TMI Tax Updates - e-Newsletter
July 11, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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GST:
Levy of GST - sale of developed plot of land - The activity of the sale of developed land is covered under 'construction of a complex intended for sale to a buyer' and is thus covered under 'construction services' and GST is payable on the sale of such developed land in terms of CGST Act / Rules and relevant Notification issued from time to time. - AAAR
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GST:
Levy of GST - distinct person - support services - Export of services or not - place of supply of service - In the present case, the applicant is a company incorporated under the laws of India and the service recipient group company, NSKJ is incorporated under the laws of Japan and therefore are separate persons and would not be considered as “merely establishments of distinct persons”. - the “Place of Supply” of the service extended will be the place of availability of the vessel and not the place of service receiver, i.e., NSKJ, which is Japan. - AAR
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GST:
Exemption from GST - intra-state supply of services - Services by way of access to a road or a bridge on payment of toll charges falling under the heading 9967 - inclusion of value of toll charges in the value of outward supply of service - the Applicant is a service provider of transportation services to their clients and the toll charges incurred by them and later reimbursed from the service recipients should be included in the value of supply and tax be paid at the appropriate rates on the entire value of supply. - AAR
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GST:
Exemption from GST or not - Pure service - contracts received from various city corporations and a municipality towards Solid waste management - The service recipients are various Municipal Corporations which are all local authorities. As per Section 2 clause (69) sub- clause (b) of the CGST Act, 2017 'Municipality' as defined in clause (e) of article 243 P the Constitution is a local authority, hence the services are provided to 'Local Authority' and the criterion related to recipient is satisfied. - AAR
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GST:
Classification of supply - Composite Supply of heath care services or not - The Supply of medicines and consumables used in the course of providing health care services to In-patients by pharmacy unit of Be well hospitals for diagnosis or treatment during the patients admission in hospital till discharge is to be considered as “Composite Supply” of health care service under GST - Benefit of exemption is available - AAR
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GST:
Scope of advance ruling - proposed activity - Classification of goods - rate of GST - Fly Ash Blocks - It is seen that the applicant has no infrastructural facilities for the proposed manufacture, has not received any orders for supply of the proposed product to be manufactured. Further from the report from the Jurisdiction authority it is evident that the applicant has not substantiated any infrastructure (in terms of raw materials/machinery/demand, etc) based on which such a supply can be undertaken by them. In this scenario, it is held that the application made by them is pre-mature and does not fall under the ambit of the proposed transaction i.e., proposed supply of goods or services. - AAR
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Income Tax:
TDS deducted in the name of the managing partner of the petitioner firm has not been given credit to in the name of the firm - Proceedings, if any, initiated against the petitioner for recovery of amounts due under Ext.P1 order of assessment shall be kept in abeyance for a period of two months to enable the petitioner to avail the option under Rule 37BA(2) of the Income Tax Rules. - HC
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Income Tax:
Block assessment - computation of undisclosed income of block period under Section 158BB - Reliance on material gathered in the course of survey - the Tribunal set aside the order of the CIT(A) and decided the case in favour of the assessee, by holding that the material gathered in the course of survey are to be treated as disclosed for the purpose of Income Tax Act and it cannot be sued for computation of undisclosed income of block period under section 158BB. This court is of the opinion that the finding so rendered by the Tribunal is erroneous and bad in law - HC
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Income Tax:
LTCG - year of taxability on transfer of development rights in a plot of land - Year of Chargeability - CIT(A) held that capital gain is taxable in AY 2012-13 rather than in AY 2009-10 - the capital asset of the assessee cannot be treated as transferred u/s 2(47)(4) of the Act read with section 53A of the Transfer of Property Act in assessment year 2009-10. We do not find any error in the finding of the Ld. CIT(A) on the issue in dispute - AT
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Income Tax:
Revision u/s 263 by CIT - an order which is prejudicial to the interests of the revenue - As far as adequacy of inquiry is considered, there is no law which provides the extent of inquiries to be made by the Assessing Officer. It is Assessing Officer’s prerogative to make inquiry to the extent he feels proper. The Commissioner of Income Tax by invoking revisionary powers under section 263 of the Act cannot impose his own understanding of the extent of inquiry. - AT
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Income Tax:
Disallowance of expenses claimed by the assessee as business expenses - Addition made as assessee had no business - in a given situation where the issue of non-submission of details of expenses along with supporting documents has not been controverted by the assessee except for embarking upon the appellate orders of preceding years without bringing on record, similarities in the facts and issues dealt therein and when 98.7% of the total area of the building has been let-out for earning rental income and only 1.3% is available otherwise. Accordingly, ground of appeal no. 1 and 2 of the appeal by the assessee are dismissed. - AT
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Income Tax:
Rectification of mistake - Deduction u/s. 57(iii) - set off of interest paid with interest income - The funds which ought to have been used for investment in CGDA Scheme is the amount received on sale consideration of capital asset. Because the assessee has mis-used the sale consideration to invest in mutual fund, the self-made mistake cannot be a reason to set off the interest paid to HSBC Bank out of interest earned from CGDA Scheme. Therefore, in our opinion, there is no merit in the arguments of the assessee that interest paid to HSBC Bank is to be allowed as a deduction u/s. 57(iii) of the Act out of interest earned from CGDA Scheme. - AT
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Customs:
Absolute Confiscation - Gold Bars - prohibited goods or not - the Commissioner (Appeals) has not exceeded his jurisdiction while modifying the order passed by the “adjudicating authority”. - Nothing has been placed before this Court to establish that this finding of the Commissioner (Appeals) is wrong or erroneous and that gold falls within the category of ‘prohibited goods’ - Therefore this appeal is decided on the factual premise that Gold does not fall within the category of ‘prohibited goods’. - HC
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Customs:
Confiscation of goods - levy of penalty - export of Rice - misdeclaration of goods or not - once all the export documents were in the name of Iranian buyers there was no scope for clearance of the goods in UAE and its subsequent sale. Further department nowhere disputed the foreign remittance of impugned consignments in Indian Rupees from Iran. - The whole case revolves around irregularities in respect of receipt of currency with regard to exported goods. It is found that these violations relate to post export conditions. - All the appeals filed by the Appellants are allowed - AT
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Customs:
Suspension of their Custom Broker License - Import of Areca Nut - importer has concealed the goods and tried to evade the compliance of FSSAI Act - there is significant force in the argument of appellant that they have done the necessary verification through documents.It is notice that the impugned order is with respect to suspension under Regulation 16(1) of CBLR, 2018. The impugned order holds that further inquiry needs to be conducted to arrived at the final decision in the instant case and therefore, on that ground upholds the order of suspension of Custom Broker. - AT
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Customs:
Maintainability of appeal - requirement of mandatory pre-deposit - after 6.8.2014 neither the Tribunal nor the Commissioner (Appeals) have the power to waive the requirement of pre-deposit, unlike the situation which existed prior to the amendment made in section 129E on 06.08.204 when the Tribunal, if it was of the opinion that the deposit of duty and interest demanded or penalty levied would cause undue hardship, could dispense the said deposit on such conditions as it deemed fit to impose so as to safeguard the interest of the Revenue. - it is not possible to grant waiver of the pre-deposit amount. - AT
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Customs:
Revocation of Customs Broker Licence - exporters were non-existent - The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations. Therefore, once verification of the address is complete, as discussed in the above paragraph, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker. - AT
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Corporate Law:
Seeking grant of regular bail - Applicant is a Chartered Accountant and one of the partners at ASRN & Associates - failure to perform his duty independently and diligently by not verifying the stock in transit - Since the ex-promoters/directors and similarly situated chartered accountants have been granted bail, there is no reason why the Applicant should be treated any differently. - HC
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Central Excise:
CENVAT Credit - input services - GTA services - It is clear that as per Section 4(3)(c)(iii) of Central Excise Act, 1944, the definition of ‘Place of Removal’ means the premises from where the excisable goods are to be sold after their clearance form the Factory - The Input Service defined in Rule 2 (1) of CENVAT Credit Rules, 2004, includes any service in relation to Outward Transportation up to the Place of Removal - In the instant cases, the place of removal is buyer’s premises - credit allowed - HC
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VAT:
Grant of eligibility certificate - ownership of the land - The validity of the agreement to sell dated 25.11.1999, has been doubted by the Tribunal as the original copy was never produced before the Tribunal nor were the documents produced before the Divisional Level Committee, which was considering the case of the revisionist firm. Even before this Court no material has been placed so as to doubt the correctness of findings recorded by the Tribunal and hence there is no material before this Court to interfere with the concurrent findings of authorities below that the condition required for transfer of land was not completed prior to last date i.e. 31.01.2000. - revisionist did not fulfill the conditions before the cut-off date fixed and hence is not entitled for exemption. - HC
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VAT:
Levy of penalty u/s 54(1)(14) - no papers were produced despite the fact that goods were being imported from outside the State - There is always apprehension that in absence of relevant documents the goods can be sold to unregistered dealers and thereby transaction would not be recorded in the books of account and the tax due would also be evaded. As per provisions contained in Section 50 of the Act, 2008, provides for penalty to stem the evasion of tax and to see that all the transactions are duly recorded in the books of account of the assessee which can subsequently be looked into by the taxing authorities - HC
Articles
Notifications
News
Case Laws:
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GST
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2022 (7) TMI 411
Levy of GST - sale of developed plot of land - activities undertaken for developing a barren land into a developed land with provision of amenities essential to make it inhabitable and fit for construction of a complex on the said land is a service or not - part of the service of construction of the complex or not - applicability of entry 5(b) of Schedule II of the CGST Act, 2017. Whether Land, and developed Land are two different things? - HELD THAT:- The obvious answer to this question is yes. This is because a barren plot of land, and a plot of land on which certain basic development works which suits the requirement of daily life of people, making it suitable for inhabiting, has been done, like making of roads, electricity infrastructure, drainage and sewerage systems etc, are clearly two distinct things; one is suitable for inhabitation by humans and other is not suitable for inhabitation - The contention of the respondent that value addition in the sale price of the plot of land does not alter the basic character of transaction of sale of land is also not valid and is not supported by any logical reasoning. In fact value addition of the scale, as seen in this case, substantially magnifies the usability of land. The respondents have also placed reliance on certain rulings of AAR in different cases but in terms of Section 103 of the CGST Act, such rulings cannot be relied upon as they are applicable to the applicant and the jurisdictional officer only. It is evident that for the development of plots, the respondent has undertaken the activities of Grading and leveling of ABD area, construction of roads, modular rain water harvesting, water supply system, automated solid waste management system, ICT and street lighting and sewage line/ water supply/ electricity/ transit house. On account of these activities relating to development of barren land into developed land, huge sum of money amounting to Rs. 301.84 crores has been spent, which appears to be a major and substantial chunk of the cost of project. The complex which is going to be built on this land either for residential or commercial use cannot be imagined without these basic development activities. Thus it would be apt to derive that these activities have been undertaken with the aim of developing the land into a complex and these activities are therefore part of construction of the complex being developed. In light of the provisions of clause 'b' of para 5 of Schedule II of the CGST Act, 2017 and also in light of the above discussions, we are of the opinion that this transaction squarely falls under clause 'b' of para 5 of Schedule II of the CGST Act, 17 as the process of developing a plot of land by providing amenities such as age line, water line, electricity line, land leveling, and common facilities viz. road and street light etc. are preparatory part of the activity of construction of whatever structure that is proposed to be constructed on that piece of land. The AAR has not given due consideration to the crucial issues related to the difference between sale of barren land and developed land. Thus, the AAR in its order No 16/2021 dt. 22.11.2021 has erred in ordering that the sale of developed land, by the applicant as per the facts provided by him where the development work is limited to providing common amenities (common drainage, water line, electricity line, land levelling, road and street light) and no development work will be done by the applicant after the sale of the developed land and if no advance from the customer for undertaking development activities is taken then it does not constitute a supply within the meaning of Section 7 of the GST Laws and therefore GST is not applicable on such sale . Accordingly we quash the order No 16/2021 dt. 22.11.2021 passed by AAR, Madhya Pradesh, Indore. The activity of the sale of developed land is covered under 'construction of a complex intended for sale to a buyer' and is thus covered under 'construction services' and GST is payable on the sale of such developed land in terms of CGST Act / Rules and relevant Notification issued from time to time.
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2022 (7) TMI 410
Taxability - transaction of the Applicant of providing space on its web-portal for advertisements provided by a foreign entity i.e., Lenzing Singapore Pte Limited for a consideration - correct classification of the services provided and rate of tax on the transaction of the Applicant of providing space on its web-portal for advertisements provided by a foreign entity i.e., Lenzing Singapore Pte Limited - HELD THAT:- The services provided by the applicant to M/s Lenzing is that of rendering Sale of internet Advertising Space (except on commission) and is charging a fixed rate and not a commission for providing such space. Hence the same is classified under six-digit SAC 998365 under the Heading 9983 which reads Other professional, technical and business services - The services provided by the applicant are covered under the Heading 9983 which reads Other professional, technical and business services and the same is taxable as per SI.No.21 of Notification No. 11/2017- Central Tax (Rate) dated: 28.06.2017. The applicant, i.e the supplier of services M/s Myntra Designs Pvt Ltd is located in India, the recipient of services, M/s Lenzing Singapore Pte Ltd. is located outside India, and the consideration is received in convertible foreign exchange and the Applicant and the overseas entity are two separate legal entities as per the agreement. The only issue to be decided is whether place of supply is outside India or not and this is outside the jurisdiction of this Authority. Unless this is decided, the question, Whether the transaction of the Applicant of providing space on its web-portal for advertisements provided by a foreign entity i.e., Lenzing Singapore Pte Ltd. for a consideration, is taxable? canriot be answered.
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2022 (7) TMI 409
Classification of services - rate of tax - service of printing and supply of textbooks received by government entity (the Applicant) from private printers where content belongs to the Applicant and physical inputs belong to the printer - applicability of N/N. 12/2017-Central Tax (Rate), as amended - taability of printing and supply of textbooks - applicability of amendment of Sl.No.27 of Notification No. 11/2017 vide Notification No.06/2021 or N/N. 12/2017 Central Tax (Rate) - levy of GST on rental income from property leased by the Appellant to Karnataka Food Civil Supplies Corporation Limited (Government of Karnataka Undertaking) - rent received in January 2022 for past periods (2005-2021) - levy of GST on sales of scrap by the Applicant - Applicant's GST registration should be retained or surrendered - HELD THAT:- The Applicant, who has filed the application, is not the supplier of services related to printing of text books. Thus the Authority refrains itself from giving any ruling in respect of the same. Whether GST is applicable on sales of scrap? - HELD THAT:- The Applicant has not specified the exact nature/type of scrap. In the absence of the same, the question cannot be answered. Whether he should retain his registration or it should be surrendered? - HELD THAT:- This question on which advance ruling is sought by the applicant is not covered under section 97(2) of CGST Act 2017. Hence, the same cannot be answered.
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2022 (7) TMI 408
Scope and Maintainability of Advance Ruling application - Classification of supply - supply of service or not - Applicability of GST - educational institution or not - activity of printing of the items of stationary on behalf of educational institutions constitutes a supply of service or not - rate of GST - Applicability of Sr. No. 66 (Heading 9992) of Notification No. 12/2017-Central Tax (Rate) - HELD THAT:- Any person registered or desirous of obtaining registration under CGST Act 2017 can seek advance ruling only in relation to the supply of goods or services or both being undertaken or proposed to be undertaken. In the instant case, it is observed that the Applicant, i.e Karnataka Secondary Education Examination Board, is not a supplier. Thus the Authority refrains itself from giving any ruling in respect of the same.
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2022 (7) TMI 407
Levy of GST - support services - Export of services or not - place of supply of service - taxable territory or not - whether, the supplier and recipient of the service are not merely establishments of a distinct person - vessel support services provided by the applicant to its group company outside India - HELD THAT:- It is evident that 'advance ruling' are decisions on questions specified in sub-section 97(2) of the Act in relation to the supply of goods or services undertaken or proposed to be undertaken by the applicant seeking the same. In the case at hand, to determine whether the supply amounts to 'Export of Service', the 'Place of supply of service' is to be determined and 'Place of Supply' is not within the ambit of this authority as per Section 97(2) - in the case at hand, to determine whether the activity is construed to have been undertaken in the taxable territory for the purposes of GST or otherwise, it becomes necessary to examine the Place of Supply of Service', based on which the liability to pay GST by the applicant on the said service can be arrived. The applicant extends services which requires the physical presence of the vessel when inspections for certifications, docking, loading /unloading, repairs, etc are undertaken and also services of accounting, HR, procurements, etc which do not require the physical presence of the vessel. Further, it is seen that the applicant acts as 'pass through', i.e., identifies vendors, facilitates entering into agreements with such vendors, attend to payments for the services of these vendors to NSKJ, etc. The applicant is paid a consolidated Management Fees' as service charge for the above bouquet of supporting services extended by them as per their agreement. It is pertinent to note from the submissions that the applicant for the period the vessel stays in the Indian territorial waters, has calculated the pro-rata management fees and have raised GST for that portion of the Management fees as can be seen in the Tax Invoice No. 031/21-22 dated 02.01.2022. In the case at hand, the applicant being the supplier of service is located in India; the recipient of service being a company registered in Japan is located outside India; the payment for the services is received in convertible foreign exchange as seen in the FIRC furnished for the Transaction Date 29/09/2020 furnished along with the application; the supplier and recipients are entities of the group company. Thus, the conditions to be examined are whether, the supplier and recipient of the service are not merely establishments of a distinct person the 'Place of Supply' of service is outside India - In the present case, the applicant is a company incorporated under the laws of India and the service recipient group company, NSKJ is incorporated under the laws of Japan and therefore are separate persons and would not be considered as merely establishments of distinct persons . Place of Supply of Services, which are governed by Section 13 of IGST Act, 2017 - HELD THAT:- The applicant supplies services, which he has classified under SAC 996759 as seen in the Export Invoice No. 030/21-22 dated 01.01.2022. SAC 996759 which is 'Other supporting Services for water transport nowhere else classified'. Thus in the self-assessment era, considering that the applicant is not here requiring the classification of the supply, it is evident that the services supplied as 'Support services' as per the agreement with NSKJ is in relation to water transport of the vessels under the maintenance of NSKJ. In extending such support service, it is stated by the applicant that they undertake various technical/operational services for the vessels either remotely or when docked; extend compliance to various statutory requirements regarding the operation of vessel; facilitate inspection; berthing of the vessel, loading and unloading. Thus, the bouquet of services rendered also includes those services which requires the physical possession of the vessel. Thus the Place of Supply of the service extended will be the place of availability of the vessel and not the place of service receiver, i.e., NSKJ, which is Japan. From a joint reading of Section 13(3) and 13(6), it is clear that the statute prescribes the location in the taxable territory where any support services requiring the physical availability of the vessel under management is supplied, then the 'Place of Supply is the location in the taxable territory in respect of that voyage of the vessel. In cases where the vessels do not enter any of the location in the taxable territory and the entire services relating to water transport of the vessels are extended in locations outside the taxable territory then, in such cases, the services extended are Export of Services .
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2022 (7) TMI 406
Scope of advance ruling - the issue is under investigation - Classification of goods - Air Spring Failure Indication cum Brake Application (FIBA) - goods proposed to be manufactured and supplied solely and principally for use in Railways - to be classified under 86072100 - Air Brakes and parts thereof of Section XVII or not? - HELD THAT:- The DGGSTI, Coimbatore based on the intelligence that the applicant are supplying parts to Indian Railways classifying all the products uniformly under Chapter 86, while most supplies should have been classified under respective chapter 84/85, have visited the applicant factory on 02.05.2019 and has recorded Statements drawn Mahazar on the same day. Further DGGI vide letter dated 24.06.2019 has addressed the applicant to pay the short payment arising out of the wrong classification and the applicant has replied on 04.07.2019 as can be seen in the SCN No. 16/2022-GST dated 28.03.2022. Further, in the said notice from para 3.9 it is seen that a letter was addressed to the applicant seeking the details of clearance of goods @ 5% for the period from 01.07.2017 to 31.12.2019, which was furnished by them vide e-mail dated 11.06.2020 and on continuing communications, the applicant has provided the technical write-up for FIBA on 02.02.2022. The Investigation Agency has analysed the classification of FIBA (as can be seen in para 5.9.2 and 5.14 of the SCN), which is the clarification sought, as a part of the Proceedings initiated by them with the visit to the applicant factory on 02.05.2019, based on the Intelligence collected by them. The first proviso to Section 98(2) of the Act, states that where the question raised is pending or decided in any proceedings under this Act, the same is not eligible for admission before this authority. It is clear that classification of FIBA, manufactured and supplied to Indian Railways by the applicant has been a part of the investigation proceedings under Authorisation for Inspection dated 01.05.2019 issued under Section 67 of the Act which establishes that the question raised before us is a part of the proceedings of DGGSTI and therefore squarely covered under proviso to Section 98(2) of the Act. The application is not admissible before this authority for ruling on merits and accordingly not admitted.
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2022 (7) TMI 405
Exemption from GST - intra-state supply of services - Services by way of access to a road or a bridge on payment of toll charges falling under the heading 9967 - inclusion of value of toll charges in the value of outward supply of service - liability to pay tax on the toll charges also by adding to outward value of supply of service - HELD THAT:- The question regarding exemption from GST is not admissible in as much as the applicant is only a recipient of such toll services. To ascertain if the toll charges are to be treated as reimbursement or disbursement as claimed by the applicant, the meaning of the word 'reimbursement' is analysed. In general parlance, the term reimbursement refers to the recovery of an expense that a person (the service provider) incurs as a principal from another party. On the other hand, the recovery of a payment made on behalf of the recipient of service by the provider of such service as an agent is termed as a disbursement . A disbursement does not constitute a supply and hence, is not subject to GST. A reimbursement, on the other hand, is subject to GST if it is consideration for a supply of goods or services. Here the toll charges are consideration paid for access to a road which is incurred while performing the renting of road vehicles service undertaken by the applicant - the toll charges are incurred by the applicant while performing the agreed supply and is a cost for the applicant. Further for a reimbursement, the relationship between the service provider and recipient needs to be that of mere provider and receiver and not that of an agent. It is established that the applicant has been engaged by their clients only as a service provider of transportation services and not as an Agent. The Applicant, being the service provider of transportation service, is the recipient of the service provisioned on payment of toll. Such charges are costs incurred, so that his vehicles can access roads/bridges to provide transportation services to the recipient. Hence they are the beneficiary and liable to pay the toll, which is compulsorily levied on the vehicles. The expenses so incurred are, therefore, cost of the service provided to their service recipients - the cost of toll charges which are paid by the applicant and later reimbursed by their clients should be included in the value of supply and tax shall, therefore, be payable at the applicable rate on the entire value of the supply, including toll charges paid. Thus, the Applicant is a service provider of transportation services to their clients and the toll charges incurred by them and later reimbursed from the service recipients should be included in the value of supply and tax be paid at the appropriate rates on the entire value of supply.
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2022 (7) TMI 404
Exemption from GST or not - contracts received from various city corporations and a municipality towards Solid waste management - contracts received from various city corporations and municipalities towards removal of legacy waste dumped at dump site through bio-mining process - applicability of Sl.No.3 of Notification 12/2017-CT.(Rate) dated 28.06.2017 - applicability of GST TDS for the exempted contracts - HELD THAT:- From the agreement, it is observed that the facility viz., BIO-CNG will be built, operated by the applicant and will be transferred to the GCC without any cost at the end of the agreed upon period. Thus it is seen that the work involved is a composite supply of goods and services as it involves transfer of facility built by the contractor which would include the Plant and machinery and support structures. Hence this supply of the applicant is not 'Pure services'. Therefore, it is found that the contract entered into for the conversion of wet waste into BIO-CNG does not satisfy the first criterion of being 'Pure services' and is found not eligible for exemption under SI.No.3 Notification 12/2017-C.T. (Rate) dated 28.06.2017(as amended). The Greater Chennai Corporation was formed vide G.O.Ms.No. 152, Dt.26.10.2015 which was earlier established as Chennai Corporation that originally was formed as Madras Municipal Corporation on the 29th September 1688. The service recipients are various Municipal Corporations which are all local authorities. As per Section 2 clause (69) sub- clause (b) of the CGST Act, 2017 'Municipality' as defined in clause (e) of article 243 P the Constitution is a local authority, hence the services are provided to 'Local Authority' and the criterion related to recipient is satisfied. Whether the activity is a function entrusted to a municipality under Article 243W of the Constitution? - HELD THAT:- On a cogent reading of SI.No. 6 of the Twelfth Schedule to the Constitution and Rule 15 of the Solid Waste Management Rules 2016, it is evident that it is the duty of the local authority to investigate, analyse the existing dumpsites for their potential bio-mining and bio-remediation and wherever feasible has to take actions to bio-mine or bio-remediate the sites under 'Solid Waste Management'. In the case at hand the function of bio-mining. Bio-remediation of the dump yard and maintenance of Micro composting center is entrusted to the applicant and therefore the final criterion is also satisfied. The contracts received from various city corporations and municipalities towards removal of legacy waste dumped at dump site through bio-mining process is Pure services' rendered to a local authority and the activity is a function entrusted to a municipality under Article 243W of the Constitution. Thus the contracts are eligible for exemption from GST vide SI.No.3 of Notification 12/2017-CT. (Rate) dated 28.06.2017(as amended). Further the contracts entered into for maintenance of Micro-composting and labour contracts for collection of bulk and wet waste are also found to be 'Pure services' rendered to local authorities and are activities entrusted to a municipality under Article 243W of the Constitution. However the contract pertaining to Bio-CNG carried at the Central Asphaltic plant being supply of goods and services together does not qualify as 'Pure services' and hence it is found not to be eligible for exemption under SI.No.3 of Notification 12/2017-CT. (Rate) dated 28.06.2017(as amended).
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2022 (7) TMI 403
Classification of supply - Composite Supply of heath care services or not - supply of medicines and consumables used In the course of providing health care services to out-patients by pharmacy unit of the Be well hospitals for diagnosis or treatment - exemption under N/N. 12/2017 CT (rate) read with Section 8(a) of GST - HELD THAT:- Inpatient services means services provided by hospitals to inpatients under the direction of medical doctors aimed at curing, restoring and/or maintaining the health of a patient and the service comprises of medical, pharmaceutical and paramedical services, rehabilitation services, nursing services and laboratory and technical services till the patient gets discharged. A complete gamut of activities required for well-being of a patient from admission till discharge, provided by a hospital under the direction of medical doctors is a composite supply of service and is covered under 'Inpatient services' classifiable under SAC 999311. In the case at hand, the applicant being a chain of hospitals undertakes services of diagnosis, treatment which comprises of providing bed/ICU/room, nursing care, diagnostics including lab investigations and treatment surgical or otherwise under the directions of the Doctors. The hospital provides medicines and consumables to the In-patients in the course of treatment on the directions of medical doctor for which the In-patient is billed together by the hospital. The hospital cannot provide health services including diagnostic, treatment surgery etc. without the help of medicines to be taken during treatment and consumables used during their stay in the hospital. Only on using these medicines and consumable as required and prescribed by the doctors and administered during their stay will the treatment be complete - the supply of medicines and consumables are naturally bundled with the supply of health services. In this case, supply of health services is the principal supply as that is the reason the in-patients get admitted to hospital instead of buying the medicines or consumables and using on themselves. Therefore, supply of medicines and consumables to in patients in the course of their treatment till the patient is discharged is a composite supply of health services. However once the patient is discharged, the composite supply comes to an end and the review of the patient subsequent to discharge cannot be considered as part of the composite supply. Inpatient services means services provided by hospitals to inpatients under the direction of medical doctors aimed at curing, restoring and/or maintaining the health of a patient and the service comprises of medical, pharmaceutical and paramedical services, rehabilitation services, nursing services and laboratory and technical services till the patient gets discharged. A complete gamut of activities required for well-being of a patient from admission till discharge, provided by a hospital under the direction of medical doctors is a composite supply of service and is covered under 'Inpatient services' classifiable under SAC 999311. A joint reading of the 'Explanation of service' pertaining to 'Inpatient services' and the exemption above, it is evident that the exemption is applicable to a Clinical Establishment , when services by way of diagnosis or treatment or care for illness, etc. are undertaken by such establishment under the directions of a medical doctor. The applicant hospital is a Clinical Establishment and for the health care services provided as defined in the Notification above provided to inpatients from admission till discharge including the supply of medicines, implants and consumables, they are exempt under S1 No 74 of Notification no 12/2017-C.T. (rate) dated 28.06.2017 as amended and Si No 74 of Notification No.II (2)/CTR/532(d-15)/2017 vide G.O. (Ms) No. 73 dated 29.06.2017. Whether the supply of medicines and consumables used In the course of providing health care services to out-patients by pharmacy unit of the Be well hospitals for diagnosis or treatment would be considered as Composite Supply of heath care services under GST and consequently avail exemption under Notification 12/2017 CT(rate) read with Section 8 (a) of GST? - HELD THAT:- In the case of in-patients, the hospital is expected to provide provide lodging, care, medicine and food as part of treatment under supervision till discharge from the hospital. But in the case of out-patients, there is no such expectation on the hospital and the out-patient just walks in for consultation and advise. Hence it is clear that the service of supply of medicines and consumables and consultation of out-patients is not inextricably linked and not naturally bundled. Therefore pharmacy run by hospital dispensing medicine to outpatient or bye standers or others can be treated as individual supply of medicine and not covered under the ambit of health care services. Hence such supply of medicines and allied goods are taxable. The Supply of medicines and consumables used in the course of providing health care services to In-patients by pharmacy unit of Be well hospitals for diagnosis or treatment during the patients admission in hospital till discharge is to be considered as Composite Supply of health care service under GST and consequently exemption under Notification No.12/2017- CT (Rate) read with Section 8 (a) of GST is available for such supplies based on the discussions above. However the supply of medicines and consumables used in the course of providing health care services to Out-patients by pharmacy unit of Be well hospitals for diagnosis or treatment during the patients admission in hospital cannot be considered as Composite Supply of health care service as under GST and are taxable as individual supplies as established.
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2022 (7) TMI 402
Scope of advance ruling - Classification of goods - rate of GST - Fly Ash Blocks - merit classification under CTH 6815 or otherwise? - HELD THAT:- Section 95(a) of CGST Act 2017 defines Advance Ruling to mean a decision provided by the authority or the Appellate Authority or the National Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of Section 97 or sub-section (1) of Section 100 or of section 101C of the CGST Act, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the Applicant. Thus Section 95(a) specifies that an advance ruling can be applied for, only in relation to proposed supply of goods or services or both - It is evident that advance ruling can be extended for a proposed transaction as well as transaction being undertaken by the applicant. Thus it is clear that the Advance ruling is in respect of a transaction of supply whether proposed or being undertaken. The Jurisdictional officer has verified the premises of the applicant and has reported that the applicant has no infrastructure facility to commence the manufacture of fly ash bricks/blocks and they are not dealing with any material at present. Further, from the photographs furnished along with the report, it is seen that the applicant is housed in a single room of first floor of a building which has been declared as their principal place of business and do not even remotely has the required infra-structure as furnished in the Video submitted by the applicant. It is seen that the applicant has no infrastructural facilities for the proposed manufacture, has not received any orders for supply of the proposed product to be manufactured. Further from the report from the Jurisdiction authority it is evident that the applicant has not substantiated any infrastructure (in terms of raw materials/machinery/demand, etc) based on which such a supply can be undertaken by them. In this scenario, it is held that the application made by them is pre-mature and does not fall under the ambit of the proposed transaction i.e., proposed supply of goods or services. The application is not admitted for ruling as the applicant has not substantiated the proposed transaction with necessary details/documents.
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Income Tax
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2022 (7) TMI 401
Reopening of assessment u/s 147 - Change of opinion - validity of reasons to believe - HELD THAT:- The issues on which the Assessing Officer wants to re-open an assessment, it appears from record that the same were already considered by his predecessor/Assessing Officer in course of scrutiny assessment and were accepted and the claim of the assessee/petitioner was allowed after detailed investigation by raising queries and considering the reply and supporting materials submitted by the assessee/petitioner in response to those queries in course of scrutiny assessment. As in view of these facts substantiated by record, even if there may not be any discussion in the body of the assessment order passed under Section 143(3) of the Act over which an assessee has no control as to how to an assessing officer is write an assessment order, it shall be presumed that on the aforesaid two issues/claims, in course of scrutiny assessment, Assessing Officer had already formed an opinion before allowing the said claims and action of the successor Assessing Officer reopening the relevant assessment on the very self-same material without making out any case against the assessee/petitioner that some new material has come to his knowledge or possession which were suppressed or not disclosed by the assessee/petitioner at the time of scrutiny assessment, is nothing but a mere change of opinion and in facts and circumstances of this case initiation of the impugned proceeding for reopening of assessment under Section 147 of Income Tax Act, 1961 is not sustainable in law and the impugned assessment proceeding is liable to be quashed. - Decided in favour of assessee.
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2022 (7) TMI 400
TDS deducted in the name of the managing partner of the petitioner firm has not been given credit to in the name of the firm - HELD THAT:- This writ petition will stand disposed of directing that on a proper application being made, the Income Tax department will provide a link for uploading the documents necessary for transfer of credit of TDS from the managing partner of the petitioner firm to the account of the firm, subject to compliance with all procedural formalities. Proceedings, if any, initiated against the petitioner for recovery of amounts due under Ext.P1 order of assessment shall be kept in abeyance for a period of two months to enable the petitioner to avail the option under Rule 37BA(2) of the Income Tax Rules.
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2022 (7) TMI 399
Depreciation on the WEGs for the year ending 31.03.2006 - whether assessee was eligible for depreciation for the year ending 31.03.2006. Revenue s case is that the transaction has not taken place in March because no documents such as bills or invoices were produced during survey conducted on 28.03.2006? - ITAT allowed the claim - HELD THAT:- ITAT has recorded that the Managing Director of the assessee company was not questioned during the survey but enquires was made only with the accountant. ITAT has also noted that assessing officer had lost sight of this vital aspect. It is not in dispute that WIL has admitted the transaction. It has not claimed depreciation for the year ending 31.03.2006. The Managing Director of the assessee company has not been questioned. Thus the ITAT, based on records, having recorded a finding of fact that the transaction had taken place in March 2006; and the assessee having offered the income generated from the WEGs between 15.03.2006 ending on 31.03.2006 to tax, in our considered view, the first substantial question raised by the revenue needs to be answered in favour of the assessee. Benefit of set off of brought forward losses - as per AO undertaking taken over, MOL was not a 'going concern' the condition specified under section 2(19AAA) (vi) has not been satisfied and therefore the assessee is not eligible for the claim of set off of brought forward losses under section 72(A) - Assessee argued that Revenue has misconstrued sub-clause (vi) of Section 2(19AA) to mean as a running unit - HELD THAT:- Shri. Shankar is right in his submission that if a unit were to be running and profitable one, the same would not be available for demerger. Tribunal has relied upon its order in the case of JCIT Vs Valdel Engineers and Constructors Pvt. Ltd. [ 2012 (10) TMI 612 - ITAT BANGALORE] . It was submitted by Shri. Aravind that ITA [ 2018 (7) TMI 2267 - KARNATAKA HIGH COURT] filed against ITAT s order in Valdel case was withdrawn by the Revenue. In our considered view, it would be incongruous to construe sub -clause (vi) of section 2 (19AA) as to mean a running unit. Second substantial question of law raised by the Revenue also deserves to be answered in favour of the assessee and is accordingly answered.
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2022 (7) TMI 398
Block assessment - computation of undisclosed income of block period under Section 158BB - Reliance on material gathered in the course of survey - HELD THAT:- Admittedly, in the present case, based on the materials collected during the course of inspection, the assessing officer made assessment for the block assessment period in question, by determining the undisclosed income which was reduced by the CIT(A). However, the Tribunal set aside the order of the CIT(A) and decided the case in favour of the assessee, by holding that the material gathered in the course of survey are to be treated as disclosed for the purpose of Income Tax Act and it cannot be sued for computation of undisclosed income of block period under section 158BB. This court is of the opinion that the finding so rendered by the Tribunal is erroneous and bad in law, in the light of the decision of the Hon'ble Supreme Court in S.Ajit Kumar case [ 2018 (5) TMI 266 - SUPREME COURT] . The substantial question of law raised herein is decided in favour of the appellant / Revenue and the order impugned herein is set aside. Consequently, the matter is remanded to the Tribunal for reconsideration, on merits and in accordance with law, after affording due opportunity of hearing to the respondent/assessee.
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2022 (7) TMI 397
Revision u/s 263 - Exemption u/s 11 - AO non-treating of corpus donation as voluntary contribution - corpus donation received by the assessee trust - HELD THAT:- CIT has given a clear-cut finding that the learned assessing officer based on his own finding in the assessment order should have denied the exemption u/s 11 (1) (d) of the act with respect to the corpus donation and should have included the loan amount as voluntary contribution for the reason that these are received from entities controlled by same authority. We find that after giving the conclusive decision by the learned assessing officer that the corpus donation as well as the loan is voluntary contribution, allowing the exemption u/s 11 (1) (d) of the act with respect to the corpus donation and not including the loan amount as income derived from the property, makes the order passed by the learned assessing officer erroneous and prejudicial to the interest of the revenue. AR has submitted that even if, the corpus donation is taken as voluntary contribution, thereafter also the computation of the trust results into a deficit and hence it cannot be said that any prejudice is caused to the revenue. We do not find any force in this argument because the movement the corpus donation is taken as a voluntary contribution, the quantum of deficit will definitely come down. Therefore, for subsequent years such deficit would be available of lesser amount for set of. Therefore, non-treating of corpus donation as voluntary contribution is definitely prejudicial to the interest of revenue. AR has also stated that the CIT has failed to show that how the order of the AO is erroneous. This argument does not merit the consideration for the simple reason that, the learned assessing officer in the assessment order has categorically held that the donation received towards the corpus is not eligible for exemption u/s 11 (1)(d) of the act therefore naturally he should not have granted this exemption to the assessee - CIT has merely directed the AO to take his findings to the logical conclusion in the computation of income. Therefore, giving a finding in the assessment order and not including the same in the computation of total income makes the order passed by the AO is erroneous. Though in grounds, the assessee has challenged that the assessment order in respect of which action u/s 263 of the act has been taken is itself invalid and consequential order passed u/s 263 is bad in law, no arguments were advanced before us, hence, it is rejected. Therefore, we do not find any infirmity in the order of the learned CIT in exercising his jurisdiction u/s 263 of the act. Thus, we uphold the order passed by the learned CIT. Before parting, we also make it clear that provisions of Section 11 (1) (d) excludes the income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution. Nomenclature of disclosing voluntary contribution in the returns and forms prescribed under foreign contribution regulation act would not be determinative of the nature of the donation, though, they would be persuasive. Therefore at the time of passing assessment order u/s 143 (3) read with Section 263 of the act, It would also be necessary for the learned assessing officer to verify what kind of specific direction the donor has given stating the object of utilizing corpus donation. With respect to the loan, there is a specific claim by the learned authorised representative that there is no utilization of loan received by the assessee against the application of income claimed in the computation of income. The AO also needs to verify the same before reaching any conclusion with respect to the above two receipts. The assessee may be granted an opportunity of hearing as the order of the learned CIT was passed wherein assessee did not avail such opportunity. The AO may decide about inclusion of both these receipts and its taxability in accordance with the law.
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2022 (7) TMI 396
Penalty u/s 271(1)(c) - Defective notice u/s 274 - Assessee argued AO has not applied his mind and non striking of charge in the penalty notice i.e. whether the charge is for concealment of income or furnishing of in accurate particulars of income - HELD THAT:- As in. Mohd. Farhan. A. Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT] has dealt on this disputed issue of not striking off charge in the penalty notice would vitiate the penalty proceedings. A.O has not has not strike off the charge for levy of penalty for concealment of income or for furnishing of inaccurate particulars of income. Accordingly, we set aside the order of the CIT(A) and quash the penalty notice. And allow the grounds of appeal in favour of the assessee.
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2022 (7) TMI 395
Reopening of assessment u/s 147 - unexplained money u/s 69A - HELD THAT:- It is evident based on AIR information indicating that the assessee had made investment of Rs.18 lakhs in fixed deposits with Bank of India, the AO reopened the assessment under section 147 - In course of assessment proceeding, the assessee furnished documentary evidence and submitted that the fixed deposit made is of Rs.3 lakhs and not 18 lakhs. On cross verification with the bank, the AO having found assessee s claim to be correct did not make any addition of the fixed deposits. Whereas, he made addition of deposits made in some other bank accounts while completing the assessment. The issue arising for consideration is, whether without assessing the income for which the assessment was reopened under section 147 can AO make other addition. The answer to the aforesaid question certainly will be in the negative. In case of CIT Vs. Jet Airways (I) Ltd. [ 2010 (4) TMI 431 - HIGH COURT OF BOMBAY] while dealing with an identical issue, has held that without assessing the income, for which the assessment was reopened, the AO cannot assess any other item of income. No hesitation in holding that the addition made is unsustainable. Accordingly, delete the addition. Ground is allowed.
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2022 (7) TMI 394
Addition based on Statement recorded on oath u/s 132(4) - unaccounted business/stock - HELD THAT:- There is no denying of the fact that the documents of unaccounted business were found from the premises of Shri Himanshu Kohli and the entire edifice of assessment is based upon this fact. In one of his replies, the assessee has categorically denied the alleged unaccounted transaction, whereas Shri Himanshu Kohli has categorically admitted the unaccounted transaction. Therefore, presumption of sections 132(4) and 292C of the Act has been substantiated by the admission of Shri Himanshu Kohli. The assessee further submitted that unaccounted stock, which was lying there, has been surrendered as undisclosed income for Assessment Year 2015-16. These factual statements of the assessee have neither been controverted nor demolished by the Assessing Officer by bringing cogent material evidence on record. In our considered opinion, the entire additions made by the Assessing Officer are on the basis of surmises and conjectures devoid of any supporting evidence. Statements referred to and relied upon by the Assessing Officer are that of Shri Himanshu Kohli, who, in fact, has admitted the transactions done by himself in the name of his father. Therefore, qua the presumption u/ss 132(4A) and 292C of the Act, the entire additions, if any, should have been made in the hands of Shri Himanshu Kohli and not the assessee. We do not find any merit in the additions made by the Assessing Officer. Therefore, the Assessing Officer is directed to delete all the additions made in the hands of the assessee. - Assessee appeal allowed.
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2022 (7) TMI 393
Correct head of income - gain on sale of flats - Addition of business income OR LTCG - as per AO intention of the assessee from the beginning was to engage in the business activity of construction of flats and the profit earned from the sale of flats was income from business and not Long Term Capital Gains - CIT(A) while deciding the issue in favour of the assessee has given a finding that the six flats were sold in Nov 2012 and assessee had invested the capital gains for purchase of property at Goa for Rs.6.84 crores. The entire sale consideration received was invested within the same financial year - HELD THAT:- Objection of the AO was that the flats that were sold was not for self use and were constructed only for earning income. He has noted that the property not being self use is not precondition as far as the provision of Section 54 of the Act are concerned. He has further given a finding that assessee had held property for 28 years and no evidence has been placed by the AO to demonstrate that the transaction of purchase of property was in adventure in the nature of the trade so as to be treated as business income. With respect to the objection of the AO that the possession of the property was not handed over and the sale has not been registered, he has given a finding that as per the provision of Section 54(2) of the Act, the important condition for claiming of exemption is the utilization of capital gain arising from the sale of old asset in the purchase of new residential house on or before the due date of filing of return of income. In case the assessee is unable to purchase the residential house before the due date of filing of return then the amount needs to be invested in Capital Gain Account Scheme and has to be utilized within the period stipulated therein. He thus while deciding the issue in favour of the assessee has given a finding that assessee has fulfilled the required conditions for claiming exemption u/s 54 of the Act, as the sale proceeds of the property sold were utilized for purchase of another property for which the entire required amount (capital gains) was invested and paid to the seller - further given a finding that the registration of the purchase transaction was also not mandatory for claiming exemption u/s 54 of the Act. He has further noted that assessee had produced the proof of investment by producing the receipts issued by the seller towards the purchase of the flats, assessee had also produced the copy of the letter issued by the seller to confirm the soft possession of the property. Considering the aforesaid facts, he deleted the addition made by AO. Before us, Learned DR has not pointed any fallacy in the findings of CIT(A). We therefore find no reason to interfere in the order of CIT(A) and thus the grounds of appeal of the Revenue are dismissed.
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2022 (7) TMI 392
Exemption u/s 11 - whether the assessee being charitable trust which has not claimed benefits of Section 11 12 of the Act with effect from Assessment Year 2009 - 2010 onwards, having filed return as AOP, is eligible for deductions under Chapter VI-A of Income Tax Act, 1961 or not? - HELD THAT:- The identical issue involved in the present Appeal has been dealt and decided against the Revenue by the Mumbai Bench of the Tribunal in the case of Bhoopati Shikshan Pratisthan [ 2022 (2) TMI 694 - ITAT MUMBAI ] wherein it is held that, the assessee being a charitable trust registered u/s 12A of the Income Tax Act is entitled to claim deduction u/s 80G/80GGA. As following the order made in the case of Bhoopati Shikshan Pratisthan, (supra) we hold that, the assessee is entitled for deduction claimed under VI-A/80GGA read with Section 35AC of the Act and further we direct the A.O to grant benefit of the deduction claimed by the assessee under Chapter VI-A of the Act in accordance with law. Appeal of assessee allowed.
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2022 (7) TMI 391
Taxability of interest received u/s 28 of the Land Acquisition Act, 1894 - whether interest received u/s 28 of Land Acquisition Act, 1894 is taxable u/s 56(2) (viii) read with Section 57(iv) and 145A of the Income Tax? - HELD THAT:- The interest under Land Acquisition Act, is payable under two different Sections i.e. Section 34 Section 28 of Land Acquisitions Act. There is no dispute in so far as payment of interest u/s 34 of the Land Acquisition Act is concerned. Now, the question whether the interest paid under the provisions of Section 28 of Land Acquisition Act is a part of enhanced compensation or is it taxable as interest income or not. The said issue has been considered by the Hon'ble Supreme Court in the case of CIT Vs. Ghanshyam HUF [ 2009 (7) TMI 12 - SUPREME COURT] held that the interest paid on the excess amount u/s 28 of Land Acquisition Act, 1894, depends upon a claim by the person whose land is acquired, where as interest u/s 34 of Land Acquisition Act is for delay in making payment. Interest u/s 28 of Land Acquisition Act is a part of enhanced value of land which is not the case in the matter of payment of interest u/s 34 of the Land Acquisition Act. Also see Hari Singh Ors. [ 2017 (11) TMI 923 - SUPREME COURT] - CIT(A) has committed no error and there is no infirmity in allowing the Appeal of the assessee.
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2022 (7) TMI 390
LTCG - year of taxability on transfer of development rights in a plot of land - Year of Chargeability - AO rejected the computation of LTCG i.e. the sale consideration and cost of acquisition and computed the quantum of LTCG based on stamp duty value and assessed the same on protective basis - CIT(A) held that capital gain is taxable in AY 2012-13 rather than in AY 2009-10 - whether possession of plot of land was handed over to the developer within the meaning of section 53A of the Transfer of Property Act, at the time of entering the DA or possession was handed over at the time of completion of construction of the property? - HELD THAT:- Hon ble Supreme Court in the case of Seshasayee Steel (P) Ltd. [ 2019 (12) TMI 702 - SUPREME COURT] considered a development agreement granting permission to start advertising, selling and construction and permitted to execute sale agreements to developer. The Hon ble court held that such permission is not possession under section 53A of the transfer of property Act - held that possession within meaning of section 53A, which is a legal concept and which denotes control over the land and not actual physical occupation of the land. This being the case, the section 53 of the Transfer of Property Act cannot possibly be attracted. Respectfully following the finding of the Hon ble Supreme Court and other High Court, we hold that the capital asset of the assessee cannot be treated as transferred u/s 2(47)(4) of the Act read with section 53A of the Transfer of Property Act in assessment year 2009-10. We do not find any error in the finding of the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the same as far as the year of taxability of capital gain is concerned. The ground no. 1 of the appeal of the Revenue is accordingly dismissed. Non-applicability of section 50C on the development right - We do not find any infirmity in the finding of the Ld. CIT(A) in holding that consideration received in the form of constructed area to the extent relatable to loading of the TDR is not taxable. As far as value of the 42% of constructed area is considered, the Ld. DVO has determined the cost of construction at ₹8,81,46,948/-. The said report of the DVO has been reproduced by the Assessing Officer in assessment order for AY 2009-10 on page 8. In clause 13 of said report, cost of construction has been reported. We direct the Ld. Assessing Officer to restrict the full value of consideration received by the assessee at 42% of the cost of construction, which works out to ₹3,70,21,718/-. The ground No. one of the appeal of the assessee is accordingly allowed. As far as the argument of Ld. DR that property was converted into stock in trade in the financial year 2007-08 and therefore should be taxed accordingly, the assessee has already withdrawn its cross objection and the lower authorities has decided the issue of transfer considering the property as capital asset and now the Ld. DR cannot raise new issue, without any ground of appeal. The arguments of the Ld. DR accordingly not relevant for adjudication of the issue-indispute. The ground No. 2 3 of the appeal of Revenue are accordingly dismissed. Disallowance of interest related to ECL Finance Ltd. - AO disallowed the interest holding the same as not incurred for the purpose of the business, wherein the Ld. CIT(A) looking to the past history has treated part of the interest as allowable under the head income from house property, whereas disallowed the amount which was used for improvement of the house property to make it fit for earning rent in future - HELD THAT:- Before us, the assessee is not able to substantiate as how the interest paid to ECL finance Ltd is deductible under the income from house property. The assessee has failed to establish that said borrowing from ECL finance Ltd is incurred for acquisition or construction of house property, income from which was offered under the head income from house property . In absence of any such evidence, we do not find any error in the order of Ld. CIT(A) on the issue in dispute and accordingly uphold the same. Addition on the basis of loose papers impounded during the course of survey action under section 133A - HELD THAT:- The assessee has clearly admitted that the expenditure of ₹ 1.3 lakh was incurred, therefore, the assessee was required to explain source of the said expenditure. CIT(A) has noted that assessee failed to substantiate the actual expenditure incurred out of the explained sources. Before us, the assessee has not filed any capital account or withdrawal by the assessee and his family members to substantiate the source of expenditure. In the circumstances, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute and accordingly we uphold the same.
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2022 (7) TMI 389
Disallowance of subscription paid to Tata Sons Ltd under the Brand Equity and Business Promotion Agreement - AO passed u/s 143(3) of the Act disallowed the aforesaid amount treating the same as non-business expenditure - HELD THAT:- DR could not show any reason to deviate from the aforesaid order and no change in facts and law was alleged in the relevant assessment year. The issue arising in the present appeal is recurring in nature and has been decided in favour of the assessee by the decisions of the coordinate bench of the Tribunal in preceding assessment years. Thus, respectfully following the order passed by the coordinate bench of Tribunal in assessee s own case [ 2021 (2) TMI 851 - ITAT MUMBAI ] we direct the Assessing Officer to delete the disallowance made on account of subscription paid to Tata Sons Ltd. As a result, ground no. 2 raised in assessee s appeal is allowed. Allocation of expenses towards earning dividend income and disallowance u/s 14A - HELD THAT:- From perusal of orders passed in preceding and subsequent assessment years, forming part of the additional case law paper book, we find that suo moto disallowance offered by the assessee, by taking into consideration 5% of salary of CFO, Deputy CFO and Head Treasury, 5% of salary of staff as well as 10% overheads thereon, has been accepted by the Revenue. However, only in the year under consideration, the AO, while giving effect to the directions of learned CIT(A), did not consider the suo moto disallowance offered by the assessee. As the assessee has also in-principle agreed to the disallowance by invocation of provisions of section 14A of the Act and is also agreeable to methodology adopted by the Assessing Officer for assessment year 2006 07 and methodology upheld by the DRP for assessment year 2007 08, with a view to avoid litigation. In its appeal for assessment year 2005 06, which was heard along with present appeal, assessee has accepted the disallowance made under section 14A of the Act, pursuant to learned CIT(A) s directions. In view of the fact that that there is no change in facts insofar as disallowance under section 14A is concerned, in preceding and subsequent assessment years and as the present appeal pertains to around 17 years old assessment year, therefore, in the larger interest of justice, we deem it appropriate to direct the Assessing Officer to apply the similar methodology as adopted and accepted in other assessment years and compute the disallowance under section 14A. Disallowance of claim of deduction u/s 80 IB of the Act in respect of fertiliser unit at Haldia - HELD THAT:- As relying on own case [ 2021 (2) TMI 851 - ITAT MUMBAI ] we direct the Assessing Officer to allow the deduction claimed by the assessee under section 80 IB of the Act. As a result, ground no. 6 raised in assessee s appeal is allowed. Denial of deduction in respect of amortisation of lease rental deposits - HELD THAT:- As decided in own case [ 2019 (4) TMI 2064 - ITAT MUMBAI] the amount paid as consideration for obtaining the lease is for the acquisition of a capital asset which enables the lessee to carry on its business. It is a capital expenditure. It cannot be split up into the number of years of the duration of the lease in order to claim a proportionate fraction as revenue expenditure each year. The acquisition is of exclusive right or privilege over the lease, it a strong point that the consideration paid is on capital account. Receipts and payments in connection with acquiring or disposing of lease are usually on capital account. Nature of receipts - Sales Tax Incentive money being the amount retained by the company in accordance with section 41 of the West Bengal Sales Tax Act, 1944 (read with The West Bengal Incentive Scheme 1999) - HELD THAT:- Sales tax incentive money being the amount received by the company in accordance with section 41 of the West Bengal Sales Tax Act, 1944 is capital receipt, which is not chargeable to tax under the Act. As a result, additional ground raised by the assessee is allowed. Computation of MAT u/s 115JB for disallowance u/s 14A - HELD THAT:- As per the decision of Special Bench of Tribunal in ACIT vs Vireet Investment (P) Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] while computing book profit under section 115JB of the Act, disallowance made u/s 14A of the Act cannot be added. Accordingly, ground no.3, raised in assessee s appeal is allowed.
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2022 (7) TMI 388
Penalty u/s 271(1)(c) - non-deduction of tax on payments being made for External Development Charges (EDC) paid / payable to HUDA - HELD THAT:- Giving thoughtful consideration to the matter on record, the clarification dated 19.06.2018 available on page no. 1 of the paper book makes it very obvious that receipts on account of EDC are being deposited in the Consolidated Fund of the State, accordingly directions were issued to colonizer like present assessee, to not deduct TDS. As in M/s. Perfect Constech P. Ltd. case [ 2020 (12) TMI 1158 - ITAT DELHI] and RPS Infrastructure Ltd.[ 2019 (9) TMI 39 - ITAT DELHI] have held that assessee was not required to deduct tax at source at the time of payment of EDC. Thus the Bench is of considered opinion that levy of penalty u/s 271(1)(C) of the Act cannot be sustained. The grounds raised in the appeals are allowed.
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2022 (7) TMI 387
Bogus LTCG - claim of exemption u/s.10(38) - HELD THAT:- As the statement recorded from the brokers, who have agreed to penny stock manipulation and the investigation report based thereon having not been relied upon by the ld. AO for the purpose of assessment, the decision relied on by the revenue in the case of Anip Rastogi Anju Rastogi ( 2019 (4) TMI 1363 - ITAT DELHI] as also the decision in the case of Swati Bajaj ( 2022 (6) TMI 670 - CALCUTTA HIGH COURT] , does not apply to the facts of the present case. In these circumstances, we find no error in the order of the ld.CIT(A), which calls for any interference and consequently, we uphold the same. Alternate claim of the ld. Sr.DR that the income should be assessed under the head adventure in the nature of trade , we are unable to accept the contention, insofar as when all the criterion required for claim of exemption u/s.10(38) of the Act has been complied with by the assessee and no fault or error in such claim has been proved much less a falsity in the claim, the income of the assessee at to be exempt u/s.10(38) of the Act, cannot be brought to tax under the head adventure in the nature of trade . In regard to the plea of ld.Sr. DR that two terms of Short Term Capital Gains has to be assessed also no hold merger insofar as the assessee has not sold the shares or transferred the shares of AAR Infrastructure. In far, the AAR Infrastructure merged with CCL International Ltd. When such merger itself has not considered as transferred to treat that the assessee s shareholding in AAR Infrastructure has got extinguished or has been transferred for the purpose of computing Short Term Capital Gains, will not arise. The assessee has been issued 1.25 lakhs shares of CCL International Ltd. in lieu of 50000 shares in AAR Infrastructure held by the assessee. There is no transfer as a consequence of the merger to treat the same as Short Term Capital Gains. - Decided against revenue.
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2022 (7) TMI 386
Addition on account of unrealized loss arising from foreign exchange fluctuations - rejection of claim of Forex Loss holding that the loss represented the marked to market loss which is notional and contingent in nature and not eligible for setting off against the taxable income - HELD THAT:- As in assessee s own case in AY 2009-10, 2010-11 [ 2018 (7) TMI 2266 - ITAT KOLKATA] 2011-12 [ 2019 (8) TMI 1826 - ITAT KOLKATA] we find that the issue is squarely covered in favour of the assessee wherein the Co-ordinate Bench has held that loss incurred on account of marked to market basis in respect of forward contracts which were outstanding at the year end on the basis of foreign exchange rate at the end of the year is not a notional loss and also not contingent in nature but a loss which the assessee is entitled to set off against the its income. In view of these facts and circumstances and the decisions of the coordinate bench supra, we are inclined to uphold the order of Ld. CIT(A) by dismissing the ground no. 1 in the revenue s appeal. Disallowance of depreciation on energy saving devices comprising transformer of different KVA, switchyard and chimney etc. - CIT-A directing the AO to allow the depreciation @ 80% as against the depreciation of 15% allowed by the AO - HELD THAT:- As undisputed facts in all preceding and succeeding years these items of equipments have been treated as part of the energy saving devices and the assessee has been allowed depreciation @ 80%. As decided in M/S MAHARAJA SHREE UMAID MILLS LTD [ 2020 (5) TMI 118 - ITAT JAIPUR] , RAKESH GUPTA [ 2013 (6) TMI 691 - ITAT CHANDIGARH] , MEHRU ELECTRICALS MECHANICAL ENGINEERS PVT. LTD., ALWAR [ 2016 (7) TMI 708 - RAJASTHAN HIGH COURT] held that transformer, switchyard and chimney are integral part of co-generation system and they are in the nature of energy saving devices. The Ld. CIT(A) has also given a very comprehensive items on the cogeneration system and how the transformer, switchyard, chimney are integral part are energy power generation system not analyzing each item. Under these circumstances, we do not find any reason to interfere in the order passed by the Ld. CIT(A). Besides the issue has been accepted by the Department in all the preceding and succeeding assessment years. Therefore the revenue cannot be allowed to demand a different stand in the current assessment year in this year as there is no change of facts and circumstances during the year vis a vis preceding and succeeding years. The case of assessee also finds support from the decision of Radhasoami Satsang [ 1991 (11) TMI 2 - SUPREME COURT] , CIT vs. Excel Industries Ltd. ( 2013 (10) TMI 324 - SUPREME COURT] and Maharao Bhim Singh of Kota vs. CIT ( 2016 (12) TMI 418 - SUPREME COURT] on this issue that where there is change in the facts and circumstances vis a vis the earlier years and the revenue has accepted the position with regard to particular issue , then in the subsequent the revenue can not be allowed to take a different stand. In view of these facts and circumstances and considering the various decisions of the various judicial forums as referred to above, we are inclined to uphold the order of Ld. CIT(A) by dismissing the ground no. 2 of revenue s appeal. Additional depreciation claimed by the assessee @ 10% - HELD THAT:- As relying on case Rittal India (P) Ltd. [ 2016 (1) TMI 81 - KARNATAKA HIGH COURT] , National Engineering Industrial Ltd. [ 2021 (12) TMI 1130 - ITAT KOLKATA] , Century Enka Ltd. [ 2015 (5) TMI 647 - ITAT KOLKATA] ,and Universal Cables Ltd. [ 2015 (5) TMI 650 - ITAT KOLKATA] the assessee is entitled to remaining 50% of the depreciation in the subsequent year which was not claimed in the year of addition because of the reasons that the asset was put to use for less than 180 days. The assessee has claimed 50% of the depreciation in consonance with second proviso to section 32(1)(ii) of Act. Accordingly we are inclined to uphold the order of Ld. CIT(A) by dismissing the ground no. 3 of revenue. Addition on account of TP adjustment - upholding the internal CUP method to bench mark the transactions of sale of power by directing the AO/TPO to allow the deduction u/s 80IA(8) of the Act - HELD THAT:- The power supplied by the CPP to non eligible unit was business to consumer (commonly known As B2C) meaning thereby the rate at which the ultimate consumers can purchase the power for their consumption is relevant. In the instant case before us, the B2C market comprises the sale of power by SEB and IEX etc to different categories of consumers. Thus the power sold by the CPP to unrelated parties namely Noida Power Co Ltd, Global Energy , RPG Power Trading Co, and IEX etc was in altogether different market conditions which is business to business commonly known as B2B model and the said rate represented the rate at which the distribution companies purchased power from generation companies. Further no consumer can buy the power in the open market at a rate generation companies sell power to distribution companies. No force in the contentions of the ld DR that rate at which the power was sold to unrelated parties by the CPP is the ALP. We also note that decision of the Calcuta High court in the case of CIT Vs ITC [ 2015 (7) TMI 450 - CALCUTTA HIGH COURT] which was relied by the TPO/AO and the functional dissimilarity between CPP and SEB have been considered by the coordinate bench of the tribunal in the case of Star Paper Mills Ltd [ 2021 (11) TMI 1 - ITAT KOLKATA] Therefore , we are inclined to uphold the order of Ld. CIT(A) by holding that the ALC at which the power is procured by noneligible unit from SEB is the most appropriate ALP to bench mark the specified domestic transaction and accordingly the order passed by Ld. CIT(A) is upheld by dismissing the ground no. 4 of the revenue s appeal. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- CIT(A) allowed the appeal of the assessee so far as the disallowance under Rule 8D(2)(ii) is concerned by holding that the assessee has sufficient own interest free funds available and therefore came to the conclusion that the investment in share and securities were made out of own interest free by relying the decision of Reliance Utilities Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] , CIT vs. HDFC Bank Ltd. [ 2016 (3) TMI 755 - BOMBAY HIGH COURT] , CIT vs. UTI Bank Ltd. [ 2013 (6) TMI 223 - GUJARAT HIGH COURT] and CIT vs. Max India Ltd. [ 2016 (11) TMI 1012 - PUNJAB AND HARYANA HIGH COURT] and assessee s own case for AYs. 2009-10 2010-11. Disallowance under rule 8D(2)(iii) was concerned, the Ld. CIT(A) allowed the appeal of the assessee by holding that only those investments are required to be considered which yielded exempt income during the year by following the ratio laid down by co-ordinate Bench in assessee s own case [ 2018 (7) TMI 2266 - ITAT KOLKATA] and came to the conclusion that the disallowance under rule 8D(2)(iii) worked out to Rs. 9635/- only. Since the assessee has suo-moto made disallowance which is higher than the disallowance coming under Rule 8D(2)(iii), therefore no need for any disallowance and directed the AO to restrict the disallowance to the suo-moto disallowance. Appeal of revenue dismissed.
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2022 (7) TMI 385
Disallowance u/s 14A r.w.r. 8D - As per assessee no exempt income has been earned by the assessee - HELD THAT:- Factum of earning no dividend income by the assessee company during the years under consideration i.e. A.Y. 2009-10, 2010-11 2013-14 is admitted one. It is settled principle of law that when no exempt income has been earned by the assessee during the years under consideration no disallowance can be made under section 14A read with rule 8D of the Act. So finding no illegality or perversity in the impugned deletion of addition, findings returned by Ld. CIT(A) are upheld. - Decided against revenue. Addition u/s 14A read with rule 8D under Minimum Alternate Tax (MAT) computation under section 115JB - HELD THAT:- When there is no disallowance under section 14A read with rule 8D of the Act, no disallowance is sustainable under section 14A read with rule 8D under MAT computation under section 115JB of the Act as has been held by Special Bench of the Tribunal in case of ACIT vs. Vireet Investment Pvt. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] - Decided against revenue. Disallowance of write off of the security deposits - CIT(A) decided the issue by referring the same back to the AO to verify whether the same were actually written off and if so allow the sum as deduction - HELD THAT:- Since department is not prejudiced in any manner with the findings returned by the Ld. CIT(A) as the amount if actually written off is an allowable deduction. It would be done by the AO only after verification. So this ground is determined against the Revenue. TP adjustment qua interest on shareholders deposit - Addition on the ground that the assessee has taken risk by giving deposit to an international Associate Enterprise (AE) without taking any security and charged the interest @ 11.71% with additional amount of 1% to the rate of interest for not taking any security, to the amount of shareholders deposit - HELD THAT:- The co-ordinate Bench of the Tribunal [ 2017 (11) TMI 376 - ITAT MUMBAI] decided the identical issue qua transfer pricing adjustment in relation to non-interest bearing shareholders deposit by considering the permission accorded by RBI and by considering the decision rendered in case of CIT vs. Hukumchand Mills Ltd. [ 1983 (2) TMI 1 - BOMBAY HIGH COURT] and decision rendered in case of Uco Bank [ 1999 (5) TMI 3 - SUPREME COURT] and as such no addition on account of transfer pricing adjustment qua non-interest bearing shareholders deposit is sustainable in the eyes of law. Hence, ground No.3 of A.Y. 2009-10, 2010-11 grounds No.1 to 7 of A.Y. 2013-14 of Revenue are determined against it. TP adjustment towards accrual of technical knowhow fees from AE in Indonesia PTFSI - technical fee received/receivable from AE were not reported in the agreement - HELD THAT:- Co-ordinate Bench of the Tribunal by relying upon the decision rendered by the Hon ble Supreme Court in case of Godhra Electricity Co. Ltd. [ 1997 (4) TMI 4 - SUPREME COURT] held that when there is an uncertainty involved in collection of technical knowhow fees from PTFSI due to its bad financial conditions the assessee has rightly not recognized the Revenue. So the necessary entries made by the assessee company are merely on hypothetical income and as such the impugned amount brought to tax by the AO has not represented the income which has really accrued to the assessee company during the years under consideration. In view of the matter the Ld. CIT(A) has rightly deleted the addition by following the order passed by the Tribunal in assessee s own case for A.Y.L 2012-13. TP Adjustment on accrual of interest on outstanding balances of the AE - HELD THAT:- This issue is no longer resintegra having been decided by co-ordinate Bench of the Tribunal in assessee s own case in A.Y. 2007-08 AND 2008-09 . [ 2018 (4) TMI 1925 - ITAT MUMBAI] , 2010-11 2012-13 [ 2017 (11) TMI 376 - ITAT MUMBAI] the debit balance outstanding with the AE on the year end does not fall within the ambit of international transactions and as such Ld. CIT(A) has rightly deleted the adjustment proposed by TPO and made by AO. Nature of receipt - subsidy received by the assessee under the package scheme of incentives 2007 from the Government of Maharashtra - revenue or capital receipt - HELD THAT:- As decided in own case since the subsidy has been given as an incentive to set up a new unit or to expand an existing unit to encourage industrial development in the state, the subsidy/incentives received by the assessee is on capital account and as such not chargeable to tax. So the Ld. CIT(A) has rightly decided the issue in favour of the assessee LTCG computation - assessee has offered Long Term Capital Gain (LTCG) by applying the percentage completion method and by taking indexation till the year of sale - AO by disagreeing with the assessee proceeded to hold that the assessee is not entitled for this claim and by removing the wrong claim of indexation and by rejecting the percentage completion method for the working of LTCG, the AO made addition being the differential amount in capital gain offered - HELD THAT:- Since the issue before hand is identical to the issue decided by the co-ordinate Bench of the Tribunal in A.Y. 2012-13 [ 2017 (11) TMI 376 - ITAT MUMBAI] so by following the order we hereby set aside the same for verification purpose only to verify the sale of stock in trade affected and offered the proportionate capital gains in the relevant years to tax the same accordingly. Because whole of the capital gain on conversion of land to stock in trade in the year in which only part of sale of stock in trade is affected cannot be brought to tax. TP Adjustment on corporate guarantee - assessee company stood as guarantor for a loan availed of by its AE without charging anything for the risk involved - HELD THAT:- As when corporate guarantee has been provided by the parent company for the overall benefit of business of the group and ultimately to the benefit of the parent company itself, the transaction qua providing corporate guarantee is to be treated at arms length without any separate mark up. Moreover, as already decided by co-ordinate Bench of the Tribunal the transaction as to providing corporate guarantee qua the loan availed of by the AE does not cover under the definition of international transactions as defined under section 92B of the Act. So we hereby set aside the order passed by the Ld. Lower Authorities and addition made by Ld. Lower Authorities on account of transfer pricing adjustment qua risk involved in giving guarantee on loan advance to the AE is ordered to be deleted. So ground No.1 of A.Y. 2009-10 2010-11 is determined in favour of the assessee. MAT computation qua the subsidy received under package incentive scheme - HELD THAT:- CIT(A) by way of specific ground qua the subsidy received under package incentive scheme of 2007 of Government of Maharashtra as capital subsidy and to exclude the subsidy amount while computing the book profit under section 115JB of the Act which is purely a legal issue, the Ld. CIT(A) was required to decide the issue on merits having been declined by the AO on the ground that this claim was not raised by the assessee by way of filing revised return. So we set aside this issue back to the Ld. CIT(A) to decide afresh.
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2022 (7) TMI 384
Revision u/s 263 by CIT - an order which is prejudicial to the interests of the revenue - CIT observed that, AO not making inquiries or verification with respect to the difference in the figures - lack of inquiry v/s inadequate inquiry - As per PCIT AO during the assessment proceedings has not verified the difference in the amount of gross value shown in the profit and loss account viz a viz gross value of the services - HELD THAT:- An inquiry made by the Assessing Officer, considered inadequate by the Commissioner of Income Tax, cannot make the order of the Assessing Officer erroneous. In our view, the order can be erroneous if the Assessing Officer fails to apply the law rightly on the facts of the case. As far as adequacy of inquiry is considered, there is no law which provides the extent of inquiries to be made by the Assessing Officer. It is Assessing Officer s prerogative to make inquiry to the extent he feels proper. The Commissioner of Income Tax by invoking revisionary powers under section 263 of the Act cannot impose his own understanding of the extent of inquiry. There were a number of judgments by various Hon ble High Courts in this regard. Delhi High Court in the case of CIT Vs. Sunbeam Auto [ 2009 (9) TMI 633 - DELHI HIGH COURT] made a distinction between lack of inquiry and inadequate inquiry. The Hon ble court held that where the AO has made inquiry prior to the completion of assessment, the same cannot be set aside u/s 263 of the Act on the ground of inadequate inquiry. The principle which emerges is that the phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an Assessing Officer adopts one of the course permissible in law and it has resulted in loss of revenue; or where two views are possible and the Assessing Officer has taken one view with which the Commissioner of Income-tax does not agree, it cannot be treated as an erroneous order causing prejudice to the interests of the Revenue unless the view taken by the Assessing Officer is unsustainable in law, or the AO has completely omitted to make any enquiry altogether or the order demonstrates non-application of mind. In the case of the assessee the AO during the course of assessment proceedings, made enquiries on this issue and after consideration of written submissions filed by the assessee and documents / evidence placed on record, framed the assessment under section 143(3) of the Act without making the addition of the amount as note above. This fact can be verified from the notice under section 142(1) of the Act by the AO and submission in reply of the assessee against such notice. Thus it is not the case that the AO has not made any enquiry. Indeed the Pr. CIT initiated proceedings under section 263 of the Act on the ground that the AO has not made enquiries or verification which should have been made in respect of cash deposited during the demonization period. It is not the case of the Pr. CIT that the Ld. AO did not apply his mind to the issue on hand or he had omitted to make enquiries altogether. In the instant set of facts, the AO had made enquiries and after consideration of materials placed on record accepted the genuineness of the claim of the assessee. There is a difference between the value of the services provided by the assessee which are subject to the provisions of service tax viz a viz the income which has to be accounted for the purpose of income tax. As such the advance received by the assessee cannot be categorised as income under the provisions of Income Tax Act whereas the services rendered by the assessee even with respect to the advances received are subject to service tax. Therefore, merely these amounts are not matching, no inference again the assessee can be drawn. Furthermore, all the details with respect to the service tax were available before the AO during the assessment proceedings. Thus it cannot be said that there was no application of mind of the AO in the given facts and circumstances. There was a specific question raised by the AO which was duly answered by the assessee as evident from the details furnished in the preceding paragraph. Thus we hold that there is no error in the assessment framed by the AO under section 143(3) causing prejudice to the interest of revenue - the revisional order passed by the learned PCIT is not sustainable - Decided in favour of assessee.
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2022 (7) TMI 383
Addition u/s. 2(22)(e) - deemed dividend for trade advance received from associate company - HELD THAT:- We note that assessee has established that these are business transactions, which do not come in the ambit of the provisions of section 2(22)(e) of the Act. Therefore, respectfully following the judgment of the Hon'ble jurisdictional High Court of Gujarat in the case of Shripad Concrete Pvt. Ltd. [ 2013 (7) TMI 117 - GUJARAT HIGH COURT ] we delete the addition made. Thus, ground no. 1 raised by the assessee is allowed. Addition u/s 36(1)(va) r.w.s 2(24)(x) for delay in depositing of employees' contribution of PF and ESI - HELD THAT:- The issue relating to delay in depositing of employees' contribution of PF and ESI, is squarely covered against the assessee by the judgment of Jurisdictional Hon'ble Gujarat High Court in the case of Gujarat State Road Transport Corporation [ 2014 (1) TMI 502 - GUJARAT HIGH COURT ] - SLP has been filed by the assessee, which has not been adjudicated yet therefore we are of the view that the issue may be remitted back to the file of the Ld. CIT(A) to decide the matter after taking into account the judgment of the Hon'ble Supreme Court as and when will be passed by the Hon'ble Supreme Court. - Decided in favour of assessee for statistical purposes. Nature of expenses - Addition of ROC (Registrar of company) expenses for increasing in authorized share capital - CIT-A and AO rejected the contention of the assessee and made disallowance holding that ROC expenses are in the nature of capital - HELD THAT:- Considering the law of the land as settled on this issue by the Hon' Supreme Court of India in the case of Punjab State Industrial Development Corporation [ 1996 (12) TMI 6 - SUPREME COURT ] and later decision of General Insurance Corporation Ltd. [ 2006 (9) TMI 116 - SUPREME COURT ] finding of the Assessing Officer to disallow the expenses towards increase in authorized share capital and treating the same as capital expenditure is confirmed and the disallowance so made is sustained. - Decided against assessee.
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2022 (7) TMI 382
Addition of rental income received from M/s. Virtual BPO services - HELD THAT:- We note that assessee's property was taken over by SBI-bank, as the assessee failed to pay the dues to SBI and such rent had been collected by SBI directly from the tenant and adjusted against the over dues of the assessee. Therefore, said rent income is the income of the assessee and adjustment of such receipt against over dues by SBI is in the nature of application of such receipts. Hence, it should be treated as rental income of the assessee. As requested by Ld. Counsel that TDS deducted from such receipts was not claimed by assessee, and if the said rental income is treated as income of the assessee, then in that circumstances, the assessee is entitled to claim the benefit of the TDS. We note that ld. CIT(A) has already given direction to the assessing officer that benefit of TDS should be granted to the assessee. We are of the view that assessee should be given credit of such TDS after verification of Form No. 26AS and TDS Certificate from party, if issued to SBI. Therefore, we direct the Assessing Officer to grant such credit of TDS, after proper verification. Addition being interest on fixed deposit as per AIR Information - Assessing Officer on the basis of AIR/ITS information, observed that assessee was in receipt of interest being credited by various banks - HELD THAT:- We note that in view of financial circumstances and suits pending before Hon'ble DRT for recovery of Rs. 500 crore by consortium of various banks, such interest could have credited by some bank having such FDR and appropriated such interest against dues of assessee hence there is no information with assessee. But, such credit of interest on mercantile system of accounting is receipt of assessee and its appropriation by bank is in the form of application of such receipt. It is therefore, we are of the view that such interest of Rs. 20,66,182/- being credited by various bank under the PAN of assessee for previous year is income of assessee. Therefore, the addition so made is upheld and confirmed. We note that assessee made a prayer before ld. CIT(A) that assessee has not claimed TDS deducted from such interest and Assessing Officer also not allowed the same, therefore TDS benefit should be allowed to him. Therefore, ld. CIT(A) directed the assessing officer to verify from records about any of TDS so deducted from such interest on the basis of Form 26AS and TDS certificate so issued by respective bank and grant the credit to assessee. We also direct the assessing officer to include the interest income in the hands of assessee and benefit of TDS should be given to the assessee. Therefore, ground no. 3 and 4 are allowed to the extent indicated above. Disallowance of depreciation for windmill sold during the year ignoring the fact that the block of windmill still remain/exist - AO was of the view that there cannot be two different block with same rate of depreciation - HELD THAT:- As we note that block is existing and for that Ld. Counsel took us through the paper book at page no. 23 wherein we noted that block of the windmill is in existence and the assessee is claiming depreciation on remaining block, therefore the depreciation on remaining block should be allowed to the assessee. Therefore, we direct the Assessing Officer to allow depreciation - Thus, ground no. 5 raised by the assessee is allowed. Disallowance of preliminary expenses treating it to be capital in nature - HELD THAT:- We have gone through the paper book of the assessee and observed that amount of Rs. 6,10,000/- pertains to preliminary expenses, and assessee has been claiming such deferred revenue expenses since long. Therefore, we note that assessee is entitled to claim these expenses, hence we direct the assessing officer to allow preliminary expenses, of Rs. 6,10,000/-. Thus, ground no. 6 raised by the assessee is allowed. Short term capital gain and Long term capital gain - information through AIR/ITS, considered the transaction of sale of windmills and land related to such windmill - as submitted sale of these land for which separate consideration is received will result into long term capital (LTCG) - HELD THAT:- We note that A.O, has not worked out the short term capital gain as well as long term capital gain on account of such sale transactions. The ld. CIT(A) noted that out of total sale consideration of all the windmills at Rs. 28,90,67,060/-, it should be first reduced to Rs. 28,52,55,287/- because of opening WDV of balance windmills. It is therefore this surplus of Rs. 28,52,55,287/- has to be treated as short term capital gain as per provisions of section 50 of the I.T. Act. In the case of sale of land which were acquired in F.Y. 04-05 (land at Irrukundarai) and in F.Y. 05-06 (land at Andhiyur), these land were long term capital asset being acquired and kept for more than 36 months. The ld. CIT(A) noted that these lands were not depreciable assets. Therefore, the sale of these land for which separate consideration is received will result into long term capital (LTCG). As per provisions of section 70(3) of the Act, the net resultant long term capital gain on account of sale of these two land will be Rs. 53,15,401/- (5942874 -627473).It is therefore, in the place of addition of Rs. 29,46,45,500/- profit as worked out by A.O. it is to be with short term capital gain of Rs. 28,52,55,287/- and long term capital gain of Rs. 53,15,401/-. The total addition in the form of such gain of Rs. 29,05,70,688/- (28,52,55,287 + 53,15,401) were upheld and confirmed by ld. CIT(A). Therefore, ld. CIT(A) directed the A.O. to delete the balance addition of Rs. 40,74,812/- (29,46,45,500 - 29,05,70,688). From the above narrated facts, it is abundantly clear that ld. CIT(A) has passed speaking order on the issue under consideration, which does not contain infirmity, therefore we decline to interfere in the order passed by ld. CIT(A).
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2022 (7) TMI 381
Addition u/s 43B - addition for other liabilities standing in the balance sheet as on the close of the year for want of proof of payment of said liabilities before the due date of filing return of income - HELD THAT:- As on going through the above finding of this Tribunal and also the balance sheet as on 31.03.1994 find merits in the contention of the ld. Counsel for the assessee. Ld. CIT(A) erred in confirming the addition for additional sales-tax and central sales-tax u/s. 43B of the Act because both these amounts were not on account of liability for the year under appeal and they were brought forward balance of other liabilities from AY 1992-93. Thus, both the additions are deleted. Ground no. 1 of the assessee is allowed. Unpaid tax liabilities u/s. 43B - As current year sales tax realization of Rs. 9,76,402/-, only a sum of Rs. 34,207/- remains due to have been paid before the due date of filing the return of income which attracts the provisions of Section 43B of the Act. Out of the alleged addition except the sum of Rs. 34,207/- the balance is either brought forward balance from preceding years which have already been considered in the previous assessment year and remaining already stands paid which do not call for invoking the provisions of Section 43B on such amount. Therefore, out of impugned addition we delete the addition and confirm the remaining addition for unpaid tax liabilities u/s. 43B of the Act. Thus, ground no. 2 is partly allowed. Addition on account of agricultural tax - HELD THAT:- As per paper book we find that the said amount has been paid on 30.04.1995 and this fact remains uncontroverted. We, therefore, delete the addition of Rs. 556/- made u/s. 43B of the Act and allow ground no. 3 raised by the assessee. Disallowance of employees' contribution towards PF ESI u/s. 36(1)(va) r.w.s. 43B of the Act pertaining to March, 1995 - HELD THAT:- Though there is a delay in deposit by 10 days as it has been paid on 24.04.1995, but both the lower authorities denied the deduction alleging that the same has not been paid as per the due date prescribed in the PF ESI Act. However, this fact is not in dispute that the alleged amount has been paid before the due date of filing return of income u/s. 139(1) of the Act and as per the consistent view taken by Hon'ble Courts and also jurisdictional in the case of CIT vs. Vijay Shree Ltd. [ 2011 (9) TMI 30 - CALCUTTA HIGH COURT] we find that no disallowance for the said amount was called for. We, therefore, delete the addition u/s. 43B of the Act - Appeal of assessee allowed.
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2022 (7) TMI 380
Addition on account of interest income earned on grant and subsidy received from Govt. - HELD THAT:- The only basis of non-taxation of interest income in the hands of assessee, was the term or condition of the scheme under which subsidy or grant was received. If the term or condition dictates that the interest income shall form part of the subsidy or if an inference can be culled out from the scheme of subsidy that the interest income shall be expended over the project and liable for refund to the Govt. if not utilised or that the assessee is merely acting as an extended arm of the Govt., then only the interest income of Rs. 53,03,707/- earned by the assessee shall not be taxable and this is the precise contention of the Ld. CIT(A). Assessee has also submitted before the Ld. AO as per the norms of the grant this amount too has to be expended over the Project itself and liable for refund in case of non-expended . However we observe that the assessee has not produced the scheme of subsidy or any documentary evidence before the lower authorities to support his submission. Even the Ld. CIT(A), though accepting the judgements, has also noted in his order that the assessee has not given any evidence. Therefore the lower authorities were not able to verify the contention of assessee or the applicability of judgements. In such circumstances, we feel it appropriate to give one more opportunity to the assessee to submit the relevant evidences to the Ld. AO so that the Ld. AO can ascertain the correct position and decide the issue properly in accordance with the judgements narrated above. Therefore, we remand this issue back to the file of Ld. AO. The Ground No. 2 is thus allowed for statistical purposes. Disallowance of interest expenditure on late payment of TDS - HELD THAT:- We are consciously aware that the decisions of Hon'ble High Courts would prevail over the decision of Hon'ble ITAT, Kolkata. Therefore, respectfully following the decisions of Hon'ble High Courts, we are inclined to hold that the interest on late payment of TDS is not allowable as business deduction and the lower authorities have rightly disallowed the same.
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2022 (7) TMI 379
Disallowance of expenses claimed by the assessee as business expenses - Addition made as assessee had no business - HELD THAT:- As both, ld. CIT(A) and the ld. AO have taken a rational approach by making a disallowance to an extent of 50% of the expenses claimed as business expenses, more particularly in a given situation where the issue of non-submission of details of expenses along with supporting documents has not been controverted by the assessee except for embarking upon the appellate orders of preceding years without bringing on record, similarities in the facts and issues dealt therein and when 98.7% of the total area of the building has been let-out for earning rental income and only 1.3% is available otherwise. Accordingly, ground of appeal no. 1 and 2 of the appeal by the assessee are dismissed. Disallowance u/s. 14A r.w.r. 8D(2)(iii) - assessee submitted that no expenditure was incurred to earn exempt dividend income - HELD THAT:- We note that this issue is no longer res integra and is covered by the decision of the Hon'ble Jurisdictional High Court of Calcutta in the case of CIT v. REI Agro Ltd. [ 2013 (12) TMI 1517 - CALCUTTA HIGH COURT ] which has upheld the findings of the ITAT by holding that only those investments could be considered for the purposes of disallowance under rule 8D(2)(iii) which had yielded tax free dividend income during the year. Respectfully following the decision of the Hon'ble Jurisdictional High Court [ 2013 (12) TMI 1517 - CALCUTTA HIGH COURT ], we find it proper to remit this specific issue to the file of the ld. AO for the limited purpose of verification and to re-compute the disallowance under Rule 8D(2)(iii) by considering the decision supra. Accordingly, this ground no. 3 of appeal by the assessee is allowed for statistical purposes.
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2022 (7) TMI 378
Unexplained cash deposit - whether the assessee had sufficient sources to prove cash-deposits made in the bank accounts or not? - HELD THAT:- On perusal of various evidences placed by Ld. AR, we find that the assessee has received so much of recognition, awards and certificates from the Government or Governmental authorities in appreciation of agricultural activities done by him. We also observe that the assessee has submitted Bills/Vouchers and also submitted he had made sale of crops directly to ultimate consumers for which the evidences could not be maintained. We find much weightage in the submission of assessee. This submission of assessee finds direct support from Smt. Annakkalanjiam Mathivanan [ 2019 (3) TMI 259 - ITAT CHENNAI] - Therefore, the assessee's submission deserves credence and acceptance. Secondly, we also observe that the assessee has made a total cash-withdrawals from his bank accounts during the year from time to time and therefore moneys were available with the assessee for making cash-deposits. On perusal of the bank-statements placed in the paper-book, we observe that the cash-withdrawals and cash-deposits have been made on various dates during the year and the pattern is such that re-deposits out of cash-withdrawals is possible. Thirdly, we also find that the assessee is having agriculture as sole source of income and there is no other source of income brought on record by Ld. AO. Since agricultural income is fully exempt, the assessee does not have any taxable income and therefore the addition u/s. cannot be made - Appeal of assessee allowed.
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2022 (7) TMI 377
Exemption u/s 11 - assessee made foreign remittance as payment against education tour package - submissions of the assessee was that amount of expenditure incurred by the society was not for a charitable purpose which tends to promote international welfare in which India is interested - HELD THAT:- In the case of the assessee it is a fact that die amount has been applied outside India. In view of the fact that die expenditure was incurred outside India and in view of the judgement in the case of Director of Income-tax (Exemption) Vs. National Association of Software Services Companies [ 2012 (5) TMI 204 - DELHI HIGH COURT ] and in the case of India Brand Equity Foundation [ 2012 (7) TMI 799 - ITAT DELHI ], the disallowance of expenditure applied outside India is upheld. - Decided against assessee.
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2022 (7) TMI 376
Rectification of mistake - Deduction u/s. 57(iii) - set off of interest paid with interest income - interest income earned on mutual funds that was offered to tax under the head 'Other Sources' - as submitted that the Petitioner had earned interest income from deposits made in the Capital Gains Account Scheme [CGDA] against which deduction was claimed for interest paid on loans availed from HSBC Invest Direct Financial Services [I] ltd and the same is also clearly brought out in the impugned order passed u/s. 263 - petitioner prayed that the Tribunal may be pleased to amend the order by holding that there was a direct nexus between the borrowed funds and the income earned from deposits made in the CGDA scheme and accordingly, the Petitioner is entitled to deduction u/s. 57[iii] of the Act, for the advancement of substantial cause of Justice - HELD THAT:- We find that there are certain errors in the orders of the Tribunal which is required to be corrected. Accordingly, para 34 of the order as modified - Unless funds are borrowed for making deposits to earn interest income, such interest paid on borrowings cannot be allowed as deduction in the computation of income from other sources, which in this case, is interest earned from CGDA Scheme. In the facts stated above, there is no doubt that the funds borrowed from HSBC Bank was used for investment to earn interest income in the CGDA Scheme. The assessee wants to set off the interest paid to HSBC Bank with interest earned from CGDA Scheme. As per section 54F of the Act, the whole consideration of capital asset to be used for deposit in CGDA Scheme. In the present case, the assessee diverted the sale consideration of capital asset in investment in mutual funds. However, the assessee borrowed money from HSBC Bank to make investment in CGDA Scheme. The funds which ought to have been used for investment in CGDA Scheme is the amount received on sale consideration of capital asset. Because the assessee has mis-used the sale consideration to invest in mutual fund, the self-made mistake cannot be a reason to set off the interest paid to HSBC Bank out of interest earned from CGDA Scheme. Therefore, in our opinion, there is no merit in the arguments of the assessee that interest paid to HSBC Bank is to be allowed as a deduction u/s. 57(iii) of the Act out of interest earned from CGDA Scheme. Accordingly, these ground of the assessee in both the appeals are dismissed.
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2022 (7) TMI 375
Addition u/s 56(2)(viib) - difference between the fair market value and actual consideration received by the appellant on issue of shares - marginal difference of 1.1% was on account of rounding off the value per share to the nearest hundred and therefore the provisions of section 56(2)(viib) were not attracted and the addition was required to be deleted - HELD THAT:- The Hon ble Apex Court has time and again held that, in a taxing statute one has to look merely at what is clearly said in the section . There is no room for any intendment. There is no concept of equity in tax law. Nothing is to be read in, nothing is to be implied. One has to look at plain language of the provisions of the section. For the purpose of construction of a taxing statute, the context, scheme of the relevant provision as a whole and its purpose is relevant. Where the statute is absolutely clear and unambiguous, recourse to beneficial/purposive interpretation cannot be taken. The Rule of literal interpretation would apply. Departure from literal rule while interpreting section is an exception, that too where literal rule would result in absurd construction of provision. In the instant case the provisions of section 56(2)(viib) of the Act or Rule 11UA no where provides for rounding off to nearest rupee or multiple of ten or hundred. The provisions are plain, clear and unambiguous. Thus, in the light of above observation, the impugned order is upheld and the appeal by assessee is dismissed.
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2022 (7) TMI 374
Deduction u/s 36(1)(vii) - writing off of bad debts in the books of accounts of the assessee - CIT(A) recorded a finding that the writing off of the loans is an actual writing off and not a provision and the same is bona fide and based on its commercial expediency of the assessee - HELD THAT:- As in the light of the addition of the Hon ble Apex Court in the case of Vijaya Bank ( 2010 (4) TMI 46 - SUPREME COURT] we are of the considered opinion that in this matter the assessee not only debited the amount of doubtful debt to the P L Account but in fact registered the value of assets in the Balance Sheet, and therefore we find that it s not the case of mere creating provision but actual writing off of the bad debts, and accordingly the assessee is entitled to the deduction under section 36(1)(vii) of the Act. On this premise we uphold the findings of the Ld. CIT(A) and dismiss ground No. 1 of the appeal. Disallowance u/s. 14A r.w.r. 8D - HELD THAT:- In view of the decision of Acb India Ltd. [ 2015 (4) TMI 224 - DELHI HIGH COURT] for the purpose of computing the disallowance u/s. 14A of the Act only such investments which yielded exempt income during the year should be taken into consideration, but not the entire investment. Going by that principle, we find that during the year, the investment in Karnataka Bank Ltd. alone yielded dividend income. Assessee s contention that such an initial investment to the tune of Rs.35.35 crores was made in the assessment year 2007-08 and for that year, the assessee had free cash reserves to the tune of Rs.81.70 croes, was considered by the coordinate Bench of this Tribunal [ 2020 (9) TMI 141 - ITAT DELHI] accepted the contention of the assessee as far as the investment in shares of Karnataka Bank Ltd. was concerned. It is, therefore, clear that no disallowance could be made towards interest expense u/r. 8D(2)(ii) of the rules. We accordingly uphold the finding of the ld. CIT(A) on this aspect and dismiss ground No. 2 of this appeal. Disallowance of business promotion expenses - Nature of expenditure - Revenue or capital expenditure - HELD THAT:- In so far as incurring of expenses is concerned, there is no doubt. There is no reason either for the authorities or for this tribunal to discard the policy manual for support services fee and recovery of expenses from the subsidiaries, in accordance with which the allocation of expenses were made. It is also not in dispute that the expenses were incurred for the purpose of business. In CIT vs. Salora International Limited [ 2008 (8) TMI 138 - DELHI HIGH COURT] held that the expenses incurred on advertisement and business promotion are to be treated as revenue expenditure. In the instant case, it is also pertinent to note that as a result of advertising and business promotion activities undertaken by REL on behalf of the assessee, loans granted by assessee have significantly increased from 1711,35,45,136/- in assessment year 2009-10 to Rs.4085,59,04,068/- in assessment year 2010-11, resulting to corresponding increase of interest income earned thereon from Rs.282,80,50,151/- in A.Y. 2009-10 to Rs.407,16,62,922/- in A.Y. 2010-11. Therefore, the business promotion expenses reimbursed by assessee to REL were for the purpose of business and hence, such expenditure has to be treated as revenue in nature. Consequently, this ground of Revenue s appeal is dismissed.
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Customs
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2022 (7) TMI 373
Absolute Confiscation - Gold Bars - prohibited goods or not - foreign currencies - Recovery from specially designed cavities made in the shoes of the respondents - non-declaration in the disembarkation slip in contravention of Section 77 of the Act - whether there exists grounds for absolute confiscation of Gold Bars or an option of releasing Gold Bars on payment of redemption fine can be allowed? - non-addressing by the Commissioner (Appeals) of itself, in its final order, the findings recorded by the Adjudicating Authority relating to absolute confiscation - HELD THAT:- Although as per the provisions contained in Section 2 (1) of the Act, the Commissioner (Appeals) or the Appellate Tribunal are not included within the definition of the term adjudicating authority and, therefore, they cannot exercise the powers vested in the officer adjudging but the power conferred by Section 128-A (3) (a) of the Act to modify the decision or order appealed against, is not at all curtailed by Section 2 (1) of the Act and thus, the Commissioner (Appeals) has not exceeded his jurisdiction while modifying the order passed by the adjudicating authority . In the order dated 27.08.2018, the Commissioner (Appeals) has held that the import of gold was not prohibited under the Foreign Trade Policy or any other law for the time being in force and, therefore, there is no sufficient ground for absolute confiscation of the gold. This finding has not been reversed by the Tribunal as the Tribunal has affirmed the order passed by Commissioner (Appeals). Nothing has been placed before this Court to establish that this finding of the Commissioner (Appeals) is wrong or erroneous and that gold falls within the category of prohibited goods - Therefore this appeal is decided on the factual premise that Gold does not fall within the category of prohibited goods . Section 125 of the Act deals with confiscation of two separate categories of goods. It provides that in the case of goods, the importation or exportation whereof his prohibited under the Act or under any other law for the time being in force, the Officer adjudicating may give an option to pay in lieu of confiscation such fine as the said officer thinks fit. However, in case of any other goods, the officer adjudicating shall give an option to pay in lieu of confiscation such fine as the said officer thinks fit. The Commissioner (Appeals) has held that the gold is not a prohibited item, it should be offered for redemption in terms of Section 125 of the Act and this finding has not been assailed by the Appellants in this Appeal. Thus, the Additional Commissioner, Customs (P.) Commissionerate, Lucknow had passed the order of confiscation of Gold without taking into consideration the fact that Gold is not a prohibited item and, therefore, it should be offered for redemption in terms of Section 125 of the Act and thus the Customs Excise Service Tax Appellate Tribunal, Allahabad has not committed any error in upholding the order dated 27.08.2018 passed by the Commissioner (Appeals) holding that Gold is not a prohibited item and, therefore, it should be offered for redemption in terms of Section 125 of the Act - appeal dismissed.
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2022 (7) TMI 372
Misdeclaration of export goods - the case of the department is that the appellant had filed the Shipping Bills/Export documents for export of goods i.e Rice to Port Bandar Abbas (Iran) but the goods were delivered at UAE (Jabel Ali Port) - remittance was received in Indian Rupees from Iran instead of free convertible foreign currency - admissible evidences or not - levy of penalty on CHA - HELD THAT:- The revenue in support of allegations rely upon the statements of Director, CHAs and the officials of Shipping Lines. However it is found that these persons were not examined in the adjudication proceedings even after the request of Appellant and as such their statements are not admissible, as evidence under the provisions of Section138B of Customs Act, which provides that - if an authority in any proceedings under the Act wants to rely upon the statement of any person (made during enquiry), such person is required to be examined as witness and if the adjudicating authority finds the evidence of the witness admissible , then such witness should be offered for cross-examination and only thereafter the evidence is admissible. In absence of compliance of the provision of Section138B of the Act, the statements are not admissible as evidence. The rejection of cross-examination in the impugned matter tantamount to violation of principles of natural justice. Request for cross-examination has been denied and the witnesses have not been examined despite specific reliance by the appellant on Section138B. The whole case revolves around irregularities in respect of receipt of currency with regard to exported goods. It is found that these violations relate to post export conditions. There is no doubt that any violation relating to foreign exchange are covered under FEMA, 1999 and not under the Customs Act. Though the show cause notice invoked Section 113(d) and 113(i) of the Customs Act but these provisions were invoked by only alleging violation of para 2.53 of the FTP and section 8 of FEMA, 1999. We therefore hold that there was no violation of Customs Act in any manner. There is no dispute about the description of the goods, its quantity and value. The export of rice was neither prohibited nor restricted. It is a well settled law that in respect of alleged violation of foreign exchange, it is the erstwhile FERA authorities or FEMA authorities who are competent to initiate the proceedings against the party. In the facts of the present case since it was only a case of alleged violation of the provisions of Foreign Trade (Development Regulation Act) and rules made there under as well as that of Foreign Exchange Management Act, the Customs authorities did not have jurisdiction to issue the show cause notice for said violation. Levy of penalty on CHA - HELD THAT:- The CHA had filed shipping bills as per the documents provided to him by exporter. Therefore the bonafide act of the Appellant cannot be doubted. The act of filing the export documents for customs clearances shows that the appellant has no mens rea and filed the documents being a bona fide facilitator. Further, in any event of the matter, since we have already held that the goods were ultimately delivered to the buyers at Iran, there is no justification for imposing penalty upon the appellant, therefore, the penalty imposed on the appellant is set aside. All the appeals filed by the Appellants are allowed.
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2022 (7) TMI 371
Confiscation of goods - levy of penalty - export of Rice - misdeclaration of goods or not - the case of the department is that M/s Janki Dass Rice Mills had filed the Shipping Bills/Export documents for export of goods i.e. Rice to Iran but the goods were delivered at UAE - admissibility of statements - levy of penalty on co-appellant - HELD THAT:- The remittance was received in Indian Rupees from Iran instead of free convertible foreign currency. Thus, there appeared to be mis-declaration on part of Appellant. The revenue in support of allegations relied upon the statements of Director, CHAs and the officials of Shipping Lines. However, these persons were not examined in the adjudication proceedings even after the request of Appellant and as such their statements are not admissible as evidence under the provisions of Section138B of Customs Act, which provides that - if an authority in any proceedings under the Act wants to rely upon the statement of any person (made during enquiry), such person is required to be examined as witness and if the adjudicating authority finds the evidence of the witness admissible , then such witness should be offered for cross-examination and only thereafter the evidence is admissible. In absence of compliance of the provision of Section138B of the Act, the statements are not admissible as evidence. The rejection of cross-examination in the impugned matter tantamount to violation of principles of natural justice. Request for cross-examination has been denied and the witnesses have not been examined despite specific reliance by the appellant on Section138B. The Hon ble Madras High Court in the case of M/S VEETRAG ENTERPRISES, CHETAN KUMAR RANKA, NIRMAL KUMAR LUNKAD VERSUS THE COMMISSIONER OF CUSTOMS (SEAPORT EXPORTS) [ 2015 (8) TMI 781 - MADRAS HIGH COURT ] has observed that attitude of the respondent shows that the petitioner was not given fair opportunity to defend their case, therefore, not providing an opportunity to cross-examine the above said eight witnesses, in my view, would violate the principles of natural justice. Accordingly, the impugned order is set aside and the respondent is directed to permit the petitioner to cross-examine the above said eight witnesses and pass appropriate orders on merits and in accordance with law. In the present matter all the documents in respect of disputed consignments were in the name of Iranian buyers. There is nothing on record to show that the said documents were amended at any stage so as to permit import of goods at UAE. Further Revenue nowhere produced any documentary evidence to show that the exports documents produced by the Appellant were false and fabricated - once all the export documents were in the name of Iranian buyers there was no scope for clearance of the goods in UAE and its subsequent sale. Further department nowhere disputed the foreign remittance of impugned consignments in Indian Rupees from Iran. It is further observed that in this case the only allegation and finding against Appellant is that they had violated para 2.53 of the FTP i.e. to say that since according to the Customs the goods were actually exported to UAE, the payments should have been received in convertible foreign exchange. The whole case revolves around irregularities in respect of receipt of currency with regard to exported goods. It is found that these violations relate to post export conditions. There is no doubt that any violation relating to foreign exchange are covered under FEMA, 1999 and not under the Customs Act - It is a well settled law that in respect of alleged violation of foreign exchange, it is the erstwhile FERA authorities or FEMA authorities who are competent to initiate the proceedings against the party. Levy of penalty on co-appellants - HELD THAT:- The act of filing the export documents for customs clearances shows that the appellants have no mens rea and filed the documents being a bona fide facilitators.Further, in any event of the matter, since we have already held that the goods were ultimately delivered to the buyers at Iran, there is no justification for imposing penalty upon the appellants, therefore, the penalty imposed on the all the co-appellants is set aside. All the appeals filed by the Appellants are allowed - decided in favor of appellant.
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2022 (7) TMI 370
Suspension of their Custom Broker License - Import of Areca Nut - importer has concealed the goods and tried to evade the compliance of FSSAI Act - validity of statements under Section 108 of Customs Act, 1962 - failure to follow Regulation 10(d) and 10(n) of CBLR, 2018 - HELD THAT:- The appellant was never in direct contact with the importer. Therefore, he could not have been in position to advice his client as requires under Regulation 10(d) of CBLR, 2018. The defence of the appellant i.e. the sealed container was received and the appellant had no occasion to come to know about the mis-declaration and therefore, could not have possibly informed the authorities. The next charge on the appellant is failure to follow Regulation 10(m) of CBLR, 2018. The said regulation requires the Customs Broker to discharge his duties as the Custom Broker utmost speed and efficiency and without any delay. The impugned order holds that the appellant had never communicated with the importer and did not verify the registered address as mentioned in KYC form of the importer. The impugned order. The impugned order also notices that the appellant had not verified the financial background of the importer. It could not be the responsibility of Custom Broker to actually physically verify the address of the importers or the financial background of the importer - The impugned order holds that the Custom Broker failed to follow due diligence before accepting the custom clearance work of the importers. Failure to follow the Regulation 10(n) of CBLR, 2018 - requirement on the part of the Custom Broker to verify correctness of Importer Exporter Code IEC number, GSTIN, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information - HELD THAT:- The impugned order holds that the appellant failed to verify the registered address as mentioned in KYC form before taking up the job as Custom Broker for clearance of the said import consignment. The appellant has claimed that the KYC documents were verified by them on the strength of the documents supplied by importer namely IEC Code, Adhar Card, Trade Licence, Bank Details, IFSC Code with importer name, Father s name and full address with photo fixed on KYC form - there is significant force in the argument of appellant that they have done the necessary verification through documents.It is notice that the impugned order is with respect to suspension under Regulation 16(1) of CBLR, 2018. The impugned order holds that further inquiry needs to be conducted to arrived at the final decision in the instant case and therefore, on that ground upholds the order of suspension of Custom Broker. The suspension may be lifted with immediate effect - Application allowed.
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2022 (7) TMI 369
Maintainability of appeal - requirement of mandatory pre-deposit contemplated under section 129E of the Customs Act, 1962 - HELD THAT:- an application filed by the appellant seeking waiver of the pre-deposit. The reason stated is that the appellant has a good case on merits in view of the judgment of the Supreme Court in M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [ 2021 (3) TMI 384 - SUPREME COURT] . The appellant has further stated that he is not in a position to make the pre-deposit because the appellant is not doing any business; the father of the appellant is ill and the appellant has taken a house on loan for which he has to make regular monthly installments. It would be seen from a bare perusal of section 129E of the Customs Act that after 6.8.2014 neither the Tribunal nor the Commissioner (Appeals) have the power to waive the requirement of pre-deposit, unlike the situation which existed prior to the amendment made in section 129E on 06.08.204 when the Tribunal, if it was of the opinion that the deposit of duty and interest demanded or penalty levied would cause undue hardship, could dispense the said deposit on such conditions as it deemed fit to impose so as to safeguard the interest of the Revenue. A Division Bench of Delhi High Court in M/S. VISH WIND INFRASTRUCTURE LLP, M/S. J.N. INVESTMENT TRADING CO. PVT. LTD. VERSUS ADDITIONAL DIRECTOR GENERAL (ADJUDICATION) , NEW DELHI [ 2019 (8) TMI 1809 - DELHI HIGH COURT] examined the provisions of section 35F of the Central Excise Act, 1944 which are pari materia to section 129E of the Customs Act and held that every appeal filed before the Tribunal after the amendment made in section 35F of the Excise Act and section 129E of the Customs Act on 06.08.2014 would be maintainable only if the mandatory pre-deposit was made. In coming to this conclusion, the Division Bench relied upon the judgment of the Delhi High Court in ANJANI TECHNOPLAST LTD. VERSUS THE COMMISSIONER OF CUSTOMS [ 2015 (10) TMI 2446 - DELHI HIGH COURT] and also observed that in view of the peremptory words shall not , there is an absolute bar on the Tribunal to entertain any appeal unless the requirement of pre-deposit is satisfied. Thus, it is not possible to grant waiver of the pre-deposit amount. The application is accordingly, rejected.
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2022 (7) TMI 368
Revocation of Customs Broker Licence - forfeiture of security deposit - levy of penalty - it is alleged that when verified, the officers found that the exporters were non-existent and therefore the shipping bills were filed on their behalf by the appellant without the requisite verification as per Regulation 10(n) - HELD THAT:- The Customs Broker is not Omniscient and Omnipotent. The responsibility of the Customs Broker under Regulation 10(n) does not extend to ensuring that all the documents issued by various officers of various departments are issued correctly. The Customs Broker is not an overseeing authority to ensure that all these documents were correctly issued by various authorities. If they were wrongly issued, the fault lies at the doorstep of the officer and not the Customs Broker. It is possible that all the authorities who issued the documents had issued them correctly and thereafter, by the time of verification, situation may have changed. If so, it is a ground for starting a thorough investigation by the officer and is not a ground to suspend/cancel the licence of the Customs Broker who processed the exports. It is not the responsibility of the Customs Broker to physically go to and verify the existence of each exporter in every location, let alone, keeping track if the exporter has moved from that address. In this case, there is no clarity whether the exporters were not available at the registered premises on the dates of export or if they ceased to operate after the export. Even if the exporters have changed their addresses and failed to intimate, it cannot be held against the Customs Broker. Scope of the obligations of the Customs Broker under Regulation 10(n) - HELD THAT:- It requires the Customs Broker to verify correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN),identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information - The verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. This can be done through online verification, comparing with the original documents, etc. and does not require an investigation into the documents by the Customs Broker. The presumption is that a certificate or registration issued by an officer or purported to be issued by an officer is correctly issued. Section 79 of the Evidence Act, 1872 requires even Courts to presume that every certificate which is purported to be issued by the Government officer to be genuine. The onus on the Customs Broker cannot, therefore, extend to verifying that the officers have correctly issued the certificate or registration. Of course, if the Customs Broker comes to know that its client has obtained these certificates through fraud or misrepresentation, nothing prevents it from bringing such details to the notice of Customs Officers for their consideration and action as they deem fit. However, the Customs Broker cannot sit in judgment over the certificate or registration issued by a Government officer so long as it is valid. In this case, there is no doubt or evidence that the IEC, the GSTIN and other documents were issued by the officers. So, there is no violation as far as the documents are concerned. The Regulation, in fact, gives to the Customs Broker the option of verifying using documents, data or information. If there are authentic, independent and reliable documents or data or information to show that the client is functioning at the declared address, this part of the obligation of the Customs Broker is fulfilled. If there are documents issued by the Government Officers which show that the client is functioning at the address, it would be reasonable for the Customs Broker to presume that the officer is not wrong and that the client is indeed, functioning at that address. In the factual matrix of this case, we find that the GSTIN issued by the officers of CBIC itself shows the address of the client and the authenticity of the GSTIN is not in doubt. In fact, the entire verification report is based on the GSTIN. Further, IECs issued by the DGFT also show the address. There is nothing on record to show that either of these documents were fake or forged - there are no reason to believe that the officers who issued them were not independent and neither has the Customs Broker any reason to believe that they were not independent. The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations. Therefore, once verification of the address is complete, as discussed in the above paragraph, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker. Thus, the Customs Broker has not failed in discharging his responsibilities under Regulation 10(n). The impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n) because the exporters were found to not exist during subsequent verification by the officers - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2022 (7) TMI 367
Seeking grant of regular bail - Applicant is a Chartered Accountant and one of the partners at ASRN Associates - failure to perform his duty independently and diligently by not verifying the stock in transit - allegation of collusion with the office bearers of M/s Bhushan Steel Limited as well - satisfaction of twin conditions under section 212(6) of the Companies Act, 2013 or not - HELD THAT:- Since the ex-promoters/directors and similarly situated chartered accountants have been granted bail, there is no reason why the Applicant should be treated any differently. The summoning order was issued on 16.08.2019 and the Applicant had not been arrested till 01.06.2022 without there being any protection in favour of the Applicant. There is also no reason shown for seeking judicial custody of the Applicant. Applicability of legal embargo of Section 212(6) - HELD THAT:- Sub-section-(i) has duly been complied with, as the Public Prosecutor (Ld. CGSC) has been given a chance to oppose the bail application. I am prima facie of the view that the Applicant is not guilty of the offence of which he is charged with, and therefore, it is opined that he is not likely to commit any further offence while on bail. Hence, sub-section (ii) of Section 212(6) is also complied with. There are no merit in the contentions and submissions of the learned CGSC - application allowed.
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Insolvency & Bankruptcy
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2022 (7) TMI 366
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - claims of the Respondent is clearly time barred and the petition under IBC is not maintainable being time barred and on the ground of pre-existence of dispute namely pending civil suits on the alleged claims - HELD THAT:- It is an admitted fact that the petition has been transferred by the Hon ble High Court itself on 07.06.2018 after which the Respondent filed Section 9 Application before the Adjudicating Authority in the month of May, 2019. The Appellant enclosed the copy of the Application as filed under Section 9 before the Adjudicating Authority as annexure to the Appeal at page 44 to 58. From the perusal of the application, it is unequivocal that the Respondent filed fresh Application before the Adjudicating Authority as per the amended notification. Hence, the stand of the Appellant that the application is not in accordance with the notification dated 07.12.2016 does not hold any merit. Even prior to filing of application by the Respondent in the month of May, 2019, the Respondent issued a demand notice in Form-3 dated 13.03.2019 demanding a sum of Rs.1,77,15,636/-. In the demand notice at serial no. 6 the Respondent clearly mentioned the MoU dated 13.02.2016. The Appellant / Corporate Debtor issued a reply dated 22.03.2019 through their advocate stating that the signatures on the MoU and cheques obtained forcefully by threatening the Appellant. From the perusal of the application filed by the Respondent at Column 2 of Part-IV, the amount claimed as Rs.1,77,15,636/- due from 04.04.2016 to 04.03.2019. At Part-V, Column 8 the Respondent mentioned the invoices raised by the Respondent/operational creditor and relied upon MoU and dishonoured of cheques and filing of C.P. No. 186 of 2016 before Hon ble High Court. Even otherwise, for the purpose of limitation it is seen from the demand notice and from the Application filed under Section 9 by the Respondent before the Adjudicating Authority, the default shown as 04.04.2016 and the Application filed before the Adjudicating Authority in the month of May, 2019 is within the period of limitation as prescribed under law. Therefore, the application is not barred by limitation. From the sequence of events, it is evident that the debt and default has been proved and the Adjudicating Authority rightly admitted the Application in accordance with law. This Tribunal does not find any illegality or infirmity in the order passed by the Adjudicating Authority. This Tribunal comes to a resultant conclusion that the appeal is devoid of merit on all aspects and liable to be dismissed - Appeal dismissed.
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2022 (7) TMI 365
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - time limitation - Seeking condonation of delay of 358 days in filing of the application - Section 5 of the Limitation Act, 1963 - whether the delay caused in filing of an application under Section 9 of the Code can be condoned by filing an application under Section 5 of the Act? - HELD THAT:- Although the issue is no more res-integra as it has been held in the cases of SESH NATH SINGH ANR. VERSUS BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK LTD AND ANR. [ 2021 (3) TMI 1183 - SUPREME COURT] that an application filed under Section 5 of the Act is maintainable. Section 3 of the Act deals with the Bar of limitation which says that: every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence. - Since, there is no dispute that the period of limitation shall be three years from the date when the right to file accrues i.e. date when the default occurs, the Adjudicating Authority shall be well within its right not to entertain the application filed under Section 7 or 9 of the Code as the case may be but the delay, if any, can be condoned in terms of the Section 5 of the Act. Since Section 5 is an enabling provision for the purpose of extending the period of limitation for the suiter to pursue his claim made in the Code, it applies only in the case of application or appeal but it does not apply to a suit - the provisions of Section 5 of the Act shall apply to the application filed under Section 9 of the Code and hence, the order passed by the Adjudicating Authority is patently illegal and erroneous. It is not the case that the application has been dismissed by the Adjudicating Authority on the ground that the Appellant could not have shown sufficient cause for the purpose of seeking condonation of delay rather the case before us is that the Adjudicating Authority has dismissed the application only on the ground of maintainability - Appeal allowed.
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2022 (7) TMI 364
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Corporate Debtor has tried to convince that there were preexisting disputes as regards short supply, price and quality but the arguments of Ld. Counsel for the Corporate Debtor are not at all convincing, because the short supply and other alleged dispute do not relate to the transaction in question. For taking advantage of any complaint with regard to quality, short supply or price it should be relatable to the transactions in question with regard to which the Operational Creditor has filed the petition. In this matter all the so-called pre-existing disputes regarding short supply quality or price cannot be put in the category of pre-existing disputes because all of them cannot be said to be relating to the transactions in question. If the Corporate Debtor had previously made a complaint but consumed the goods and made payments and again placed orders on the Operational Creditor, in spite of alleged complaints, the Corporate Debtor cannot be allowed to use the previous complaints for future transactions. The Corporate Debtor cannot be allowed to take benefit of any earlier complaints made in the past, which transactions had already been paid for and settled, maybe even by issuance of credit notes. In the business, so many transactions take place and complaints made as regard the goods supplied. A Corporate Debtor can take advantage of the goods or specific supplies made with regard to which complaint/ dispute has been raised prior to service of notice under section 8 of the IBC. The disputes or complaints raised long before in the past cannot be allowed to be made use of in every future transactions. If such a tendency is encouraged, it will cause havoc in the business circles. On the one hand, the Operational Creditor has proved its case of outstanding debt and the default and on the other hand, the Corporate Debtor in spite of its best efforts to bring this matter in the category of preexisting dispute has failed to do so - petition admitted - moratorium declared.
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2022 (7) TMI 363
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - It was informed by the Corporate Debtor that the quality of goods supplied had deteriorated - pre-existing dispute or not - HELD THAT:- The Corporate Debtor has in its reply referred to various letters written by the Corporate Debtor to the Operational Creditor, had raised the issue of quality of goods being inferior in terms of printing, quality of paper and glue. It was also mentioned in the letter dated 30th March, 2019 that the rate charged by the Operational Creditor was higher than other supplier, which was promised to be revised, for which the Operational Creditor had issued the bills at the old rates. The Corporate Debtor had, therefore, returned the bills issued by the Operational Creditor after making necessary correction in that, requesting the Operational Creditor to send revised bills. It was written by the Corporate Debtor to the Operational Creditor that they would start giving order only when the Operational Creditor assured that quality of paper, printing and glue would be upto mark. The Corporate Debtor had further complained of delayed delivery of goods which had caused business loss to the Corporate. Another issue relating to charges on account of transportation was also raised in the said letter. In view of the letters issued before the service of notice under Section 8 of the Code by the Operational Creditor, there is a clear case of preexisting dispute between the parties and, therefore, this petition is not maintainable and is therefore, rejected.
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2022 (7) TMI 362
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - whether debt existed or it was only a security cheque - Forum Shopping - It is submitted that the encashment of the alleged security cheque which in turn gave rise to the alleged dispute was done without the knowledge of the Corporate Debtor - HELD THAT:- The Corporate Debtor has not shown any previous transaction when the Corporate Debtor had issued any cheque to the Operational Creditor as a security which had been encashed by the Operational Creditor later, after delivery of the goods. The Corporate Debtor has also not shown any letter or email written by it. Either at the time of issuing that security cheque or immediately when came to it came to know that the gold ornaments have not been delivered, directing the Operational Creditor to return its cheque which is stated to have been issued as a security to the Operational Creditor - It is highly improbable that the Corporate Debtor would issue a cheque of the exact amount of invoice as a security cheque. The invoice is dated 21st May, 2019 and the cheque is dated 20th May, 2019. If as per the Operational Creditor, the new gold ornaments weighting 262.120 Gram as per work order for Rs.8,93,911/- were supplied to the Corporate Debtor on 21st May, 2019 and the Corporate Debtor received the supplies after verification as good without any objection regrading the product quality in the supply of materials. It is not possible that the Corporate Debtor would issue a cheque of exactly the same Invoice amount without receiving the goods or the Invoice. It cannot be believed that it was a security cheque. The dispute has been raised by the Corporate Debtor only after receipt of the Demand Notice. The Operational Creditor has been able to prove its case and the plea raised by the Corporate Debtor is very week defence, which would not nullify the claim of the Operational Creditor. This petition deserves to be admitted and the defence raised by the Corporate Debtor is, therefore, rejected - application admitted - moratorium declared.
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2022 (7) TMI 361
Validity of decision of the Liquidator of Kalisma Steel Pvt. Ltd. rejecting the Applicant s claim as Financial Creditor as well as Operational Creditor - Section 42 r/w section 35 of the Insolvency Bankruptcy Code, 2016 read with Regulation 20 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulation, 2016, Section 60(5) of the Insolvency and Bankruptcy Code, 2016 and Rule 11 of the National Company Law Tribunal Rules, 2016 - Liquidator informed the applicants that any Claim received after the last date of submission can be admitted only after specific orders from this Tribunal. HELD THAT:- It is noted that the Applicant being located out of the State was unaware of the order of liquidation dated 22.04.2021 as passed by the Tribunal, against the Corporate Debtor. The Applicant came to know of the commencement of liquidation process on 19.06.2021 from Mr. Modilal Pamecha, the valuer appointed by the Respondent. Therefore, the delay on part of the Applicant was unintentional and hence, this Bench hereby condones the delay, ordering the liquidator to consider the claims - This Tribunal is of the opinion that as per the document annexed in Exhibit C by the Applicant, the Corporate Debtor admits that the Applicant has made an advance against supplies with the interest @12% for an amount of Rs. 2 Cr. This shows that there was clearly a relationship of Debtor and Creditor between the Corporate Debtor and Applicant. Hence, the claim of the Respondent that it is neither a financial debt nor an operational debt is erroneous. This Tribunal relies upon the Supreme Court s Judgement in M/s Consolidated Construction Consortium Ltd. v. M/s Hitro Energy Solutions (P) Ltd., [ 2022 (2) TMI 254 - SUPREME COURT ], where in dealing with a case involving two controversial terms; operational debt and operational creditor of IBC, the 3-judges Bench explained that the appellant would be an operational creditor under the IBC, since an operational debt will include a debt arising from a contract in relation to the supply of goods or services from the corporate debtor. Thus it is concluded that the appellant is an operational creditor under the IBC, since an operational debt will include a debt arising from a contract in relation to the supply of goods or services from the corporate debtor. The Tribunal holds that there is no clarity regarding the second operational debt from both parties - the respondent are directed to verify the claim of the Corporate Debtor and submit the balance sheet of the Corporate Debtor showing the relevant transactions and the Applicant is hereby directed to submit the copy of the Purchase Orders along with all the relevant clauses - application disposed off.
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2022 (7) TMI 360
Seeking stay on the operation of the Expression of Interest issued by the Resolution Professional under Regulation 36A (1) of the Insolvency and Bankruptcy (Insolvency Resolution Process for Corporate Persons) Regulation, 2016 - seeking stay on Appointment of E Y Restructuring LLP as the Support Service Partner of the Resolution Professional in view of the inherent conflict of interest - HELD THAT:- It is the CoC that has eventually engaged support service provider and not the RP, therefore, contention of applicant the resolution professional appointed the support service provider (Paragraph xvii of IA) is factually in-correct - CoC has taken an informed decision by 100 % voting while appointing EY Restructuring LLP as support service provider to Resolution Professional and after taking into consideration there was no conflict of interest. We are of the considered view; it is the commercial wisdom of the CoC what to do best in the interest of the resolution process. Also, this Adjudicating Authority cannot be called to sit in appeal over decision of CoC - It is also not understood as to how the applicant who is a suspended Director of the Corporate Debtor is concerned about the fee payable as determined by the CoC for carrying out CIRP in an effective manner. Section 60 (5) of the Code, the residuary jurisdiction of the NCLT under Section 60(5) of the IBC though, provides it a wide discretion to adjudicate questions of law or fact arising from or in relation to the insolvency resolution proceedings, however, cannot be invoked or exercised to review/recall order dated 11-02-2022 of this Adjudicating Authority upon the grounds raised in this application - Suffice it to say, this application filed by a suspended Director at such a belated stage, from various angles looks to be merely an attempt to thwart what has been settled position; timely resolution of stressed assets is a prime factor in the successful working of the Code, the interest of the 'Stakeholders' including the 'Creditor(s)', effectively balancing within the four corners of 'Law', and as per 'I B' Code, 2016 and 'Regulations' without any further loss of time . Application disposed off.
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2022 (7) TMI 359
Seeking Liquidation of Corporate Debtor - Section 33(1) (2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In view of the satisfaction of the conditions provided under Section 33 of the Code, the Corporate Debtor i.e. M/s. Gurdaspur Overseas Limited is directed to be liquidated in the manner as laid down in Chapter III of the Code. Application allowed.
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2022 (7) TMI 358
Maintainability of application - Initiation of CIRP - Corporate Debtor failed to make repayment of its dues - demand was made on the personal guarantor - Financial Creditors - date of default - time limitation - HELD THAT:- The Demand Notice issued under Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 to the Personal Guarantor on 17.11.2021 - The date of default as mentioned in the application is 17.04.2016 and the Financial Creditor has also placed on file the Record of Default at Page Nos. 133 to 138 of the typed set. Hence, on this term, the present Petition is filed to initiate a proceeding in terms of Section 95 (1) of the IBC, 2016, against the Respondent herein. The Resolution Professional is required to examine the Application as set out in Section 97(6) of IBC, 2016 and after examining the Application, as per Section 97(7) of IBC, 2016 the Resolution Professional may recommend for the acceptance or rejection of the Application in his report, within a period of 10 days as contemplated under Section 99(1) of IBC, 2016. Post this matter on 28.07.2022 for filing of Report by the Interim Resolution Professional.
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2022 (7) TMI 357
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Time Limitation - HELD THAT:- The Operational Creditor supplied the goods to the Corporate Debtor and raised 18 invoices of Rs. 4,25,39,644/-. It is not a disputed fact that out of the total aforesaid amount, the Corporate Debtor paid an amount of Rs. 3,86,89,784/-. The Demand notice under Section 8 of the IB Code in form-3 was issued by the Operational Creditor to the Corporate Debtor on 04.04.2019 for the payment of Rs. 2,40,20,575/-, and the same was delivered to the Corporate Debtor on 09.04.2019. The Corporate Debtor replied to the said demand notice on 20.05.2019 and raised a pre-existing dispute with respect to the service and goods supplied. This application is filed on the basis of the award passed by the Hon'ble MSME Council on 20.02.2016. In the present matter, the moot question is whether the award passed on 20.02.2016 by the MSME Council is within the period of limitation or not? It is settled law that Article 137 Schedule- I of the Limitation Act, 1963 would be applicable in the application filed under section 7 or 9 of the IB Code. The aforesaid Article provides 3 years limitation period for filing an application from the date when the right accrues. The arbitration award was passed on 20.02.2016 and the present application was filed before this Adjudicating Authority on 13.08.2019 after three years. No appeal or application for setting aside the said order is preferred by the Corporate Debtor till date. The present application is barred by limitations - Application rejected.
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2022 (7) TMI 356
Implementation and effect of the Insolvency and Bankruptcy Code (Amendment) Act, 2019 - Seeking direction to Resolution Professional to rework the distribution pattern so as to implement the provisions of amended section 30(2) of the Code - seeking direction to resolution Professional to pay the liquidation value determined by the Resolution Professional - seeking direction that pending hearing and disposal of the Present Application, all disbursals pursuant to the Resolution Plan submitted by the successful Resolution Applicant be stayed - HELD THAT:- The Insolvency and Bankruptcy Code (Amendment) Act, 2019 dated 05 August 2019 came into effect from 16 August 2019. The Explanation 2 of section 30(2) (b) 1 of the Code envisages that the on and from the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019, the provisions of section 30(2)(b) shall also apply to the CIRP of a Corporate Debtor, where a resolution plan has not been approved or rejected by the Adjudicating Authority or where an appeal has been preferred under section 61 or section 62 or where a legal proceeding has been initiated in any court against the decision of the Adjudicating Authority in respect of a resolution plan - It is clear that the provision in Explanation 2 of section 30(2) (b) of the Code, shall apply to the Resolution Plan of Ramsarup Industries Limited as the Resolution Plan was still under the consideration of the Adjudicating Authority when the Insolvency and Bankruptcy Code (Amendment) Act, 2019 came into force. The Applicant had emailed the Resolution Professional on various occasions requesting the Resolution Professional to revise the distribution methodology. Why did the Applicant not bring it to the notice of the Adjudicating Authority or the Hon ble NCLAT when the approval of the Resolution Plan had not attained finality? - HELD THAT:- Explanation 2 of section 30(2) (b) of the Code is applicable to the distribution of the proposed amount to the dissenting Financial Creditor, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor. In theory one would assume that the Financial Creditor would be calculated from the estimated liquidation value. But one cannot assume that the liquidation value would be fetched in case of liquidation. The amount could be higher than the liquidation or could be lesser that the estimated liquidation value. The liquidator would have distributed in accordance with subsection (1) of section 53 on the amount received during liquidation - Similarly, the amount proposed by the successful Resolution Professional shall be considered and the distribution shall be done accordingly. The dissenting Financial Creditor shall receive payment in accordance with sub-section (1) of section 53, but calculated as per the amount proposed in the Resolution Plan. Application disposed off.
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2022 (7) TMI 355
Validity and admission of claim - seeking admission of claim which was rejected by the Resolution Professional stating that the said quantum of claim relates to future liabilities under GSA which is not duly performed and as such not being covered under the definition of claim - Section 3 (6) of IBC - HELD THAT:- Article 2.4 of the GSAs states that the gas sold by the Applicant to the Corporate Debtor shall be tendered to the Corporate Debtor at delivery point, i.e., pipeline connecting the gas transporter s facilities to the Corporate Debtor s plant (hereinafter referred to as Delivery Point ). Further, the Article states that the Applicant shall be responsible for the title to and risk of such loss of gas up to the Delivery Point, and delivery of gas under the GSA will be deemed completed at the Delivery Point and the title and risk of loss of such gas shall pass from the Applicant to the Corporate Debtor at Delivery Point. Therefore, the title of the gas supplied gets transferred to the Corporate Debtor only when the gas reaches the Delivery Point thereby constituting a triggering event for accrual of right to payment. The triggering event for accrual of right to payment is bolstered by the construction of other terms of the GSAs. Under Article 3.1 of the GSAs it is obligatory for the Corporate Debtor to purchase, receive and take the gas at the Delivery Point, and pay for gas at prices determined in accordance with the GSA or pay amounts in respect of TOP Liability in the event the Corporate Debtor fails to receive and take such gas that is supplied in accordance with the Annual Contracted Quantity (ACQ) decided between the Applicant and the Corporate Debtor in terms of Article 6.1 of the GSAs. It cannot be, that the Applicant has generated Annual Statement and claim letter towards the amounts arising till the end of the entire tenure of the GSAs (i.e., 2028 and 2037). In absence of such Annual Statements, the Applicant has itself stated in the computation table annexed as Annexure F to the Application that the claim letter date mentioned in the table is simply a tentative date of issuing claim letter . At the threshold, the amount does not qualify as a claim as there is no basis for claiming such hypothetical amounts which may or may not be payable at a future date by the Corporate Debtor - Notably, the triggering event for accrual of right to payment in respect of TOP Liability it yet to happen at a later point in time, when the gas will be supplied to the Corporate Debtor in the future, i.e., after commencement of CIRP. Therefore, the amount claimed in respect of TOP Liability does not qualify as a claim in terms of the definition of claim under the Code. The conclusion can be drawn from the submissions and the agreement that the TOP liability is calculated annually, the Obligation for TOP liability arises when Annual Contract Quantity is not lifted. The cause of action or triggering point for TOP liability is at the end of every Contract Year during which breach of contract occurred. A suit can be filed wherein TOP liability is required to be ascertained because the said liability cannot be allowed arbitrarily, as TOP liability is calculated annually upon non-lifting of the Annual Contract Quantity. Hence, the TOP liability claimed in the present case is for whole tenure of the contract for which obligation has not arose as the same is not accrued at this point of time. In the present matter, claims made as TOP liability are not accrued yet. Therefore, TOP obligation for entire contract tenure for 3 GSAs total amounting to Rs. 9942,40,44,928/- Crores cannot be admitted. Application allowed in part.
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2022 (7) TMI 354
Seeking liquidation of Corporate Debtor - Section 33(1) of the Insolvency Bankruptcy Code, 2016 - HELD THAT:- In view of the satisfaction of the conditions provided under Section 33 of the Code, the corporate debtor i.e. Modi Telecommunications Limited is directed to be liquidated in the manner as laid down in the Chapter III of the Code. Application admitted - moratorium declared.
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Central Excise
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2022 (7) TMI 353
CENVAT Credit - Bagasse - non-excisable goods or not - HELD THAT:- In view of the judgment of this Court in UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT ] holding Bagasse to be non-excisable to which the Cenvat Credit Rules had no application, the circular dated 25.04.2016 is unsustainable in law. The special leave petition is, therefore, dismissed.
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2022 (7) TMI 352
CENVAT Credit - input services - GTA services received for clearance of goods upto the place of removal - Rule 2(1) of the Cenvat Credit Rules, 2004 - HELD THAT:- The CESTAT, in the case of Bharat Fritz Werner Ltd. Vs. C.C., C.E. S.T-Commissioner of Central Tax [ 2019 (1) TMI 56 - CESTAT BANGALORE ] , has recorded in paragraph No.5 that as per the purchase orders, appellant was required to supply the goods at the buyer s premises and the price of goods would include outward freight . Similarly, in the case of MAPAL India Pvt. Ltd. CEA 71/2019, the CESTAT has recorded a similar finding. It is clear that as per Section 4(3)(c)(iii) of Central Excise Act, 1944, the definition of Place of Removal means the premises from where the excisable goods are to be sold after their clearance form the Factory - The Input Service defined in Rule 2 (1) of CENVAT Credit Rules, 2004, includes any service in relation to Outward Transportation up to the Place of Removal - The Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs, New Delhi, has issued Circular dated 08.06.2018 and clarified the definition, Place of Removal . In para 5 of the Circular, the Ministry has referred to the judgment in the case of CCE ST Vs. Ultra Tech Cement Ltd. [ 2018 (2) TMI 117 - SUPREME COURT ] and stated that, in that case, the Apex Court has held that CENVAT Credit on GTA Service from the place of removal to the buyer s premises is not admissible. In the instant cases, the place of removal is buyer s premises - credit allowed - appeal allowed.
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2022 (7) TMI 351
Valuation - medicaments supplied by the Appellants to institutional buyers like Indian Railways, ESI, BHEL, SAIL etc for their own use in the hospitals run by them - no retail sale by these institutions to their patients and these supplies are for exclusive use by such institutions by providing treatment to their patients - Requirement to affix MRP on these goods and assess the same on MRP basis under Section 4A of the Central Excise Act, 1944 - HELD THAT:- In the present case there is only difference of period i.e. for the period November 2015 to September 2016 in respect unit 1 and January 2014 to March 2016 in respect of unit 2. It is found that in respect of both the unit for the period January 2005 to May 2013 and March 2010 to February 2013 this tribunal vide order dated 28.06.2019 [ 2019 (10) TMI 810 - CESTAT AHMEDABAD ] set aside the demand on the identical issue and in the same set of facts. This order was accepted by the department and no further appeal was filed. Moreover, for the subsequent period in respect of unit 1 and 2 for the period June 2013 to October 2015 and March 2013 to December 2013 respectively, demand was set aside by the Additional Commissioner vide OIO dated 30.01.2020. The said orders were also accepted by the department and no further appeal was filed. From the decision of this Tribunal it can be seen that except difference of the period entire facts of the case is identical. Therefore the issue is no long res-integra. The demand in the present case also is not sustainable hence the impugned orders are set side - appeal allowed.
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CST, VAT & Sales Tax
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2022 (7) TMI 350
Rate of tax - sale of iron window and frames etc. fabricated and sold by the assessee - rate of tax at the rate of 10% on enhanced turnover is justified or not - HELD THAT:- By virtue of the words iron and steel goods not covered by any other item of this schedule or notification any commodity that may be broadly described as iron and steel goods, would stand covered and included under the notification. The fact though such iron and steel goods may have some specific name description or identity other than the generic identity of iron and steel goods would not itself be enough to exclude such commodity from the scope and sweep of the taxing entry - If there was any doubt as to that, the legislature has itself made its intent plain by using the words but excluding iron or steel wires . Thus, legislature first understood iron or steel wires also to be item that would be included in the generic description of goods given by it as iron or steel goods . However, since the legislature wanted to exclude the goods iron or steel wires from the scope of the taxing entry, it use the word excluding . That intent cannot be applied or extended to any other item or commodity. It is also not the case of the revenue that there is any other taxing entry to which the goods frames and windows made of iron and steel may describe more appropriately and more exactly. Therefore, the other rule of interpretation that residuary entry may apply only if the item or commodity in question does not describe to any of the specific entry, would come into play to the aid and rescue of the assessee - the commodities frames and grills made of iron and steel would be included in Entry 43 of Notification No. KA. NI. -2-100/XI-9(231)/94-U.P. Act-15- 48-Order-2000 dated 15 January, 2000 by virtue of generic entry of all iron and steel goods as were not specifically excluded. The question of law is answered in the negative i.e. in favour of the assessee and against the revenue - the present revision is allowed.
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2022 (7) TMI 349
Levy of penalty under Section 54(1)(14) of U.P. Value Added Tax Act, 2008 - penalty levied on the sole ground that the Column No. 6 of Form - 38 was left blank in contravention to provisions of Section 50 of the Act, 2008 - intent to evade tax or not - HELD THAT:- It is noticed that the goods were being carried with all the relevant documents from which the goods could be identified and more specifically the goods were accompanied by Form - 38 issued by the Punjab Government as the goods were being transported as measure of stock transfer and in such transaction as there is no element of sale and hence not Liable for levy of Sales tax and therefore it cannot be said that there was any intention to evade tax. The revenue has also not denied that the revisionist had produces From - 38 Issued by the Excise and Taxation department Punjab, or that the goods were not being transferred as measure of Stock Transfer, and there is no other material or any reason to come to a conclusion that there was any intention to evade tax. Merely because the Column 6 of Form - 38 was blank the penalty has been imposed despite the fact that there is no other material to show that there was any intention to evade tax and therefore the findings recorded in the penalty order as well as the in impugned appellate order are clearly perverse and contrary to record and hence are set aside. This Court is of the considered view that the case of the revisionist is covered by the judgment in the case of THE COMMISSIONER COMMERCIAL TAX U.P. LUCKNOW VERSUS S/S DEEPAK TRADING CO. GHAZIABAD [ 2020 (1) TMI 751 - ALLAHABAD HIGH COURT] has held that Non-filling up of column no. 6 i.e. not mentioning of bill / cash memo / chalan / invoice number may lead to an inference that in case of non-checking of goods the declaration form may be re-used for importing goods of same quantity, weight and value to evade payment of tax but it cannot be the sole ground to impose penalty under Section 54(1)(14) of the Act, 2008. The revision is allowed.
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2022 (7) TMI 348
Levy of Penalty - manufacture of Sugar - purchase of 'paint' against Form-3B on concessional rate of tax at the rate 2.5% - covered under the definition of consumable stores or not - whether the revisionist was entitled to purchase 'paint' at concessional rate of tax under Section 3(b) of the Act, treating it to be consumable store , which is utilized in the manufacture of sugar? - HELD THAT:- The provisions of Section 4-B(2) of the Act, 1948 provide that where a dealer requires any goods, referred to in sub-section (1) for use in the manufacture by him in the State, of any notified goods, or in the packing of such notified goods manufactured or processed by him, and such notified goods manufactured or processed by him, and such notified goods are intended to be sold by him in the State or in the course of inter-State trade or commerce or in the course of export out of India, he may apply to the assessing authority in such form and manner and within such period as may be prescribed, for the grant of a recognition certificate in respect thereof, and if the applicant satisfied such requirements including requirement of depositing lat fee, and conditions as may be prescribed, the assessing authority shall grant to him in respect of such goods a recognition certificate in such form and subject to such conditions, as may be prescribed. The Apex Court in the case of Coastal Chemicals Ltd. Etc. [ 1999 (10) TMI 599 - SUPREME COURT ] has clearly stated that word 'consumables' refers only to material which are utilized as an input in the manufacturing process namely 'raw material', 'component part', 'sub-assembly part' and 'intermediate part' etc. Thus, in the present case, it is noticed that 'Paints' are not utilized either as raw material or processing material such as raw material, plant, machinery, equipments, spare parts, but as per the revisionist 'paints' are utilized only for maintenance of plant and machinery - It is also clear that 'Paints' are not used as input in the manufacturing process of sugar and hence clearly they are not consumed in the process of manufacture of sugar and are also not involved in making of end product and hence it cannot be said that they are 'consumables'. Similar controversy was determined by this Court in the case of Kisan Sahkari Chini Mills Vs. Commissioner of Sales Tax, 2002 [ 2000 (10) TMI 951 - ALLAHABAD HIGH COURT ], where cement, steel and paints were sought to be included as goods which are directly involved in the manufacture of sugar - The High Court rejected the contention of the revisionist and held that cement, steel and paints were included in the definition of consumable stores . This Court is of the considered view that Paints are not utilized either as raw material utilized for manufacture of sugar nor is so closely connected with the manufacturing process so as to be included as consumable stores and therefore the revisionist was not entitled to purchase the same utilizing Form - 3B, and there are no infirmity in the judgment of the Tribunal and hence the revisions are dismissed.
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2022 (7) TMI 347
Grant of eligibility certificate - ownership of the land in the name of the Promoter Director can be considered to be the land of the unit or not - non-consideration of the fact that the final registration with the Industries Department was in continuation of the provisional registration granted in 1996 and 2001 - twisting the fact of the case and without proper appreciation of fact Tribunal has recorded the perverse finding - entitlement to exemption under Section 4-A of the Act in view of notification no. 3867 dated 22.12.2001 - non-consideration of basic legislative intent of the provisions of Section 4-A granting incentives for promoting growth and development - impugned order passed on the basis of extraneous consideration - whether the conditions laid down would be directory or mandatory? HELD THAT:- Commissioner of Income-tax, Amritsar v. Straw Board Manufacturing Co. Ltd., [ 1989 (4) TMI 339 - SUPREME COURT ], the Supreme Court held that in taxing statutes, provision for concessional rate of tax should be liberally construed. So also in Bajaj Tempo Ltd. Bombay v. Commissioner of Income-tax, Bombay City - III, Bombay, [ 1992 (4) TMI 4 - SUPREME COURT ], it was held that provision granting incentive for promoting economic growth and development in taxing statutes should be liberally construed and restriction placed on it by way of exception should be construed in a reasonable and purposive manner so as to advance the objective of the provision. The object of granting exemption from payment of sales tax has always been for encouraging capital investment and establishment of industrial units for the purpose of increasing production of goods and promoting the development of industry in the State - the Eligibility Notification lay down conditions for seeking benefit of Exemption Notification, which have to be fulfilled and are mandatory in nature and have to be strictly complied with by the dealer if he wishes to claim exemption. In case any of the conditions are not fulfilled, same would dis-entitle the dealer from being granted benefit under the said notification. Thus, in view of the facts of the present case, it is noticed that even though the land did not belong to the Promotor/Director of the revisionist firm, but the same was sought to be transferred to the revisionist and that transfer can be said to have been completed on 17.01.2001, when UPSIDC directed for transfer of plot no. F-63 in favour of the revisionist firm. It cannot be said that prior to 17.01.2001, the land was transferred in favour of the revisionist. The validity of the agreement to sell dated 25.11.1999, has been doubted by the Tribunal as the original copy was never produced before the Tribunal nor were the documents produced before the Divisional Level Committee, which was considering the case of the revisionist firm. Even before this Court no material has been placed so as to doubt the correctness of findings recorded by the Tribunal and hence there is no material before this Court to interfere with the concurrent findings of authorities below that the condition required for transfer of land was not completed prior to last date i.e. 31.01.2000. Thus, no interference is required with the findings recorded by the Tribunal that the land was not transferred prior to cut off date prescribed in the exemption notification dated 22.12.2001. It is also noticed that one of the condition required for grant of exemption was that the unit should be registered with the Industries Department and both the plots were jointly registered with the Industries Department on 21.03.2001, which is clearly beyond 31.03.2000, which is cut-off date, and consequently, it is noted that revisionist did not fulfill the conditions before the cut-off date fixed and hence is not entitled for exemption. The present revision is dismissed.
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2022 (7) TMI 346
Levy of penalty u/s 54(1)(14) of the Act, 2008, pertaining to assessment year 2010-11 - no papers were produced despite the fact that goods were being imported from outside the State - goods were being transported with intention to evade tax or not - HELD THAT:- The reason given by the revisionist that the said documents were being carried by their representative who had not accompanied the truck and therefore the said papers could not be produced at the time of inspection. The Tribunal was not satisfied with the reply given by the revisionist in this regard. The other reason recorded by the Tribunal for up holding the order of penalty was that the goods which were being transported from Jamshedpur (Jharkhand) to Lucknow, this fact has been recorded in the bilty as well as Form-38 produced by the revisionist. The reason for the vehicle having been diverted from the set route is the fact that the order from M/s Pancham Realcon Pvt. Ltd., Allahabad had to be satisfied and because there was delay in fulfilling their obligation, the truck was directly sent to Allahabad. The Tribunal has recorded that they were not satisfied with the reply given by the revisionist in this regard. All the documents produced by the revisionist clearly pertain to their transportation from Kushidi (Jharkhand) to Lucknow and there was no amendment in the bilty which could indicate that the goods were to be transported from Lucknow to Allahabad. The Tribunal has held that in exercise of powers under Section 54(1)(14) of the Act, 2008, penalty imposed on the revisionist was just, proper and reasonable. The documents produced by the revisionist were not relied upon by the Tribunal on the ground that the same have been prepared as an after thought. There is always apprehension that in absence of relevant documents the goods can be sold to unregistered dealers and thereby transaction would not be recorded in the books of account and the tax due would also be evaded. As per provisions contained in Section 50 of the Act, 2008, provides for penalty to stem the evasion of tax and to see that all the transactions are duly recorded in the books of account of the assessee which can subsequently be looked into by the taxing authorities - In the present case, the Tribunal being last fact finding authority has considered the submissions made by the revisionist as well the documents produced before them. The Tribunal after considering the entire facts and circumstances of the case has given cogent reasons for not accepting the version of the revisionist, and no interference is required to be made by this Court in exercise of its revisional powers. This Court finds no reason to interfere with the judgment of the Tribunal - this Court is satisfied that the order of the Tribunal does not require any interference - Revision dismissed.
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