TMI Tax Updates - e-Newsletter
July 13, 2019
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Highlights / Catch Notes
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GST:
Principles of natural justice - whether the vans / motor vehicles in which the petitioners were transporting cash, would be money for the purpose of Section 2(52) of the GST Act - Matter restored before AARA, since this issue was not considered by AARA
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GST:
Input tax credit - inputs - goods/ services used on the construction of the break water wall - whether the breakwater that is being constructed for the applicant can be considered to be “Plant and Machinery”? - Held No
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GST:
Classification of goods - rate of tax - “Perfumed Deepam Oil” - The process of addition of perfume to the edible oil or mixture of two or three edible oils converts the edible oil or the mixture into an in-edible vegetable oil. Such an inedible mixture is classifiable under HSN 1518 00 40.
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GST:
Classification of supply - Supply of ready built body and the activity of mere mounting the body on chassis supplied by the owner - The fabrication of the body and then its mounting on the chassis appear to be two naturally bundled supplies, supplied in conjunction with each other - it is composite supply where the principal supply is that of the body, i.e. supply of goods - fall under classification HSN 8707 and liable to GST @ 28 %
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GST:
Classification of supply - Activity of step by step building of the body on the chassis supplied by the owner using their own inputs & capital goods - if the body is built on the chassis provided by the principal and the fabrication charges, including certain material consumed during the process of job work, have been charged then the activity amounts to Supply of Service and attracts 18% GST
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GST:
Input tax credit - tax paid on Banquet and catering services for holding members meetings and various events - unless and until the proviso to Section 17(5)(b) (i) is satisfied the applicant is not entitled to Input Tax credit of Food & beverages, outdoor catering - no ITC
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GST:
Levy of GST - supply of services - Rotary Club - amount collected as membership subscription and admission fees from members is liable to GST as supply of services
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Income Tax:
Penalty u/s 271(1)(c) - assessee accepted outstanding sundry creditor as income in assessment proceedings - there was no allegation made that the statement given by the assessee was either mala fide or lacks bona fide or suppressed information with an intent to evade payment of tax - if the assessee gives an explanation which is unproved but not disproved - no penalty
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Income Tax:
Application for waiver of income tax - reference before BIFR - when the Department had objected to any concession being granted and stated that without quantification, the Revenue would not be in a position to give any concession and the BIFR scheme envisaged only 'to consider' the request for tax concession then IT Department is not bound to grant the benefit of any waiver
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Income Tax:
Disallowance u/s 14A - CIT(A) deleted the suomotu disallowance made by the assessee and upheld by ITAT - claim that an income not taxable is wrongly offered for tax will not operate as any kind of estoppel against the assessee regardless whether the revised return was filed or not - Revenue is obliged to assess the correct income - suomotu disallowance correctly deleted
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Income Tax:
Bogus purchases - accommodation entry - at best it would be a case that purchases have been made from one party in grey market and bills have been obtained from another party therefore, the purchases themselves cannot be said to be bogus as the same is duly recorded in the books and such books stands accepted by AO - directed to disallow @ 5% of the total alleged bogus purchases
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Income Tax:
Computation of Capital gains - amount received on retirement from a partnership - excess paid over and above the sum standing to the credit of the capital account of the Assessee is taxable as as capital gain
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Income Tax:
Penalty u/s 272A(2)(c) r.w.s. 274 - penalty @ ₹ 100 per day of defaulting period - Since there is no reasonable cause furnished by the assessee for non furnishing of information sought by the ITO(intelligence) u/s 133(6) - order imposing penalty is justified
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Income Tax:
Short term capital gain - sale of units of mutual funds - Article 13(4)/13(5) of DTAA of India-UAE - the gains arising from transfer of units of mutual funds should not get covered within the ambit of Article 13(4) of DTAA, but be covered under Article 13(5) - the assessee being a resident of UAE for the purposes of the tax treaty, STCG arising from sale of units should not be liable to tax in India in terms of Article 13(5)
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Income Tax:
Penalty u/s 271C - reasonable cause for non deduction of TDS u/s 194H - assessee has reasonable cause for non deduction of tax at source on the discount allowed to the prepaid distributor as there are decisions of the Hon’ble High Courts and Tribunal taking diverse views - debatable issue - no penalty
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Income Tax:
Exemption u/s 54 - sale of residential property OR vacant land with malba - From the Clause of collaboration agreement, it can be seen that what was transferred / handed over to the builder was the existing structure of the residential property - assessee permanently dis-possessed of 2nd floor onwards in old and new residential property which was long term assets - since new residential property was acquired within two years from the date of transfer - eligible for deduction
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Income Tax:
Addition u/s 50C -sale at lower price - substitution of stamp duty value as deemed sale consideration - the assessee has demonstrated the encroachment by illegal occupiers with reference to electricity bills in the name of the illegal occupiers and substantial payment to various such occupiers by the purchaser in the subsequent years which was disputed by the Revenue - will be reduced for computation of capital gains
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Income Tax:
Exemption u/s 10(23C)(vi) - there has been no exercise done by the Department either at first instance or at least on review petition to find out as to whether the Trust has generated a reasonable surplus to enable them to sustain the institution and in the event of a higher surplus, whether they had ploughed back or utilising the same for achieving the objects of the trust - rejection invalid - remanded to CCIT
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Income Tax:
Unaccounted investment - the sale price on the basis of signed documents is accepted by the department in the hands of sellers of the property - AO without rejecting the report of the DVO which was prepared at his instance not justified making addition on the basis of the unsigned documents
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Customs:
Challenge against the order passed by the Settlement Commission - reason behind the creation of Settlement Commission is to give a quietus to the dispute between the two parties - without any allegation of fraud played by any party upon such authority viz., the Settlement Commission, the orders passed by the Settlement Commission is final as per Section 127J of the Customs Act, 1962
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Corporate Law:
The Tribunal is empowered with the same power as that of High Court and for the purpose power under the provisions of the Contempt of Court Act, 1971 is applicable subject to modification as shown therein - As per Contempt of Court Act, 1971, the appeal lies under Section 19.
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State GST:
Clarification on various doubts related to treatment of secondary or post-sales discounts under GST.
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Service Tax:
CENVAT Credit - input services - appellant is entitled to credit on capital goods, input services and inputs which are received in one SSA and are distributed to other SSA (Secondary Switching Area)
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Service Tax:
Validity of SCN - Penalty u/s 78 - if there is no suppression or collusion or willful misstatement with an intent to evade service tax and the required amount of the service tax is paid before the issue of show cause notice in that case, there is no need of issuing of any show cause notice - no penalty leviable
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Service Tax:
CENVAT Credit - services provided by them in the State of Jammu and Kashmir where service tax was not payable at that time but same was paid - upto January 2013 - utilization of the Cenvat credit for payment of duty, which was not required to be paid, the credit effectively stands reversed and revenue cannot once again ask for reversal of the credits
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Central Excise:
Valuation - transaction value - The provisions of section 4(3)(c) and 4(3)(d), which are definitions, are not a substitute authority for imposing duties or computing assessable value for determination of liability.
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VAT:
Time limit for compliance of mandatory "Pre-Deposit" for entertaining appeal by the appellate authority. - the expression “admitted” used in the second proviso will have to be construed as analogous to expression “entertained”
TMI Short Notes
Articles
Notifications
GST - States-
CCW/GST/74/2015 - dated
1-7-2019
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Andhra Pradesh SGST
Seeks to extend the due date for furnishing FORM GSTR-1 for registered persons having aggregate turnover of more than 1.5 crore rupees for the months of July, 2019 to September,2019
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F.17(131)ACCT/GST/2017/4592 - dated
28-6-2019
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Rajasthan SGST
Seeks to prescribe the due date for furnishing FORM GSTR-3B for the months of July, 2019 to September,2019.
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F.17(131)ACCT/GST/2017/4591 - dated
28-6-2019
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Rajasthan SGST
Seeks to prescribe the due date for furnishing FORM GSTR-1 or registered persons having aggregate turnover of more than 1.5 crore rupees for the months of July, 2019 to September, 2019.
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10/2019-State Tax (Rate) - dated
10-5-2019
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Sikkim SGST
Amendments in the Notification of the Government of Sikkim, in the Department of Finance, Revenue & Expenditure No.11/2017- State Tax (Rate), dated the 28th June, 2017.
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22/2019-State Tax - dated
23-4-2019
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Sikkim SGST
Seeks to notify the provisions of rule 138E of the SGST Rules w.e.f 21st June, 2019.
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21/2019-State Tax - dated
23-4-2019
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Sikkim SGST
Benefit of this department notification No. 02/2019-State Tax (Rate), dated the 7th March, 2019 class of registered persons who shall follow the special procedure as mentioned below for furnishing of return and payment of tax.
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20/2019-State Tax - dated
23-4-2019
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Sikkim SGST
Sikkim Goods and Services Tax (Third Amendment) Rules, 2019.
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19/2019-State Tax - dated
22-4-2019
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Sikkim SGST
Amendment in Notification number 34/2018 – State Tax, dated the 10th August, 2018.
SEZ-
S.O. 2453(E) - dated
4-7-2019
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SEZ
Central Government de-notifies an area of 0.3804 hectares thereby making the resultant area as 51.1676 hectares, at Villages – Pipalia and Alwa, Taluka – Waghodia,District – Vadodara in the State of Gujarat
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2019 (7) TMI 619
Classification of goods - rate of tax - Perfumed Deepam Oil which is prepared by mixing Gingely Oil, Palmoline Oil, Rice Bran Oil or any one oil with perfurme or chemical and used for lighting lamp for God (not for cooking) - Non-perfumed Deepam Oil which is prepared by mixing Gingely Oil, Palmoline Oil, Rice Bran Oil or any one oil without perfurme or chemical and used for lighting lamp for God (not for cooking) with HSN Code - mixture of Gingely Oil, Palmoline Oil, Rice Bran Oil or any one oil. Classification of the individual oils of Gingely Oil, Palmoline Oil, Rice Bran Oil the mixture of any two or all the three oils - HELD THAT:- Palmolein Oil is a fraction of Palm Oil obtained by a process called fractionation. From the provisions of Chapter 15 of the CTA it is evident that individually Gingely Oil falls under Tariff Heading 1515, Palmolein Oil is covered under tariff heading 1511 and Rice Bran Oil is covered under tariff heading 1515. Further Chapter Heading 1517 provides for classification of Edible Mixture or preparations of vegetable oils or of fractions . For intra-state supplies, the Palmoline Oil falling under Chapter heading 1511, Gingely Oil Rice Bran Oil falling under Chapter Heading 1515 and the mixture of the said edible oils falling under Chapter Heading 1517 would attract CGST @ 2.5% under entry no.83, 87 89 respectively, of Schedule I to the Notification No. 1/2017 Central Tax (Rate) dated 28.06.2017 and also KGST @ 2.5% under entry no. 83, 87 89 respectively of Schedule I to the Notification (1/2017) No. FD 48 CSL 2017 dated 29.06.2017 - For intra-state supplies, the aforesaid products would attract IGST of 5% under entry no. 83, 87 89 respectively of Schedule I to the Notification No. 1/2017 Integrated Tax (Rate) dated 28.06.2017. Classification GST rate - Non-perfumed Deepam Oil and the same is without perfume or chemical intended to use lighting lamp for God and not for cooking - HELD THAT:- Chapter heading 1518 inter alia includes inedible mixtures or preparations of animal or vegetable fats or oils or fractions of different fats or oils of this Chapter, not elsewhere specified or included . Therefore the mixture of these oils, considered as not for cooking is rightly classifiable under CTH 1518. For intra-state supplies, the mixture of oils would fall under the Chapter heading 1518 would attract CGST @ 6% under entry no. 27 of Schedule II to the Notification No. 1/2017 Central Tax (Rate) dated 28.06.2017 and KGST @ 6% under entry no. 27 of Schedule II to the Notification (1/2017) No. FD 48 CSL 2017 dated 29.06.2017 - For inter-state supplies, the aforesaid mixture would attract IGST @ 12% under entry no. 27 of Schedule II to the Notification No. 1/2017 Integrated Tax (Rate) dated 28.06.2017. Classification and GST rate - Perfume Deepam Oil (Not for Cooking) - which is prepared by adding perfume to either a mixture of Gingely Oil, Palmoline Oil and Rice Bran Oil or to any one of the above oils - HELD THAT:- The process of addition of perfume to the edible oil or mixture of two or three edible oils converts the edible oil or the mixture into an in-edible vegetable oil. Such an inedible mixture is classifiable under HSN 1518 00 40. For intra-state supplies, the aforesaid mixture of oils with perfume, falling under Chapter Heading 1518, would attract CGST @ 6% under entry no. 27 of Schedule Il to the Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017 and KGST @ 6% under entry no. 27 of Schedule II to the Notification (1/2017) No. FD 48 CSL 2017 dated 29.06.2017 - For inter-state supplies, the aforesaid product would attract IGST @ 12% under entry no.27 of Schedule Il to the Notification No. 1/2017 - Integrated Tax (Rate) dated 28.06.2017.
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2019 (7) TMI 618
Classification of supply - supply of goods or supply of services - activity of building and mounting of the body on the chassis by the Applicant - whether supply of goods under HSN 8707 or supply of services under HSN 9988? - Circular No. 52/26/2018 GST dated 09-08-2018 - HELD THAT:- It is an admitted fact that the chassis is not inevitable for carrying out the activity of body building. The Applicant in their application at para 2.3(e) admits that for some standard type of vehicles the body can be completely built and kept ready well in advance to the receipt of the chassis and once the chassis is made available the said ready-built body would be mounted on the chassis and the process can be completed within 6 days. On the other hand vide their letter dated 14.02.2019, in their additional submissions, the applicant states that the chassis is made available to them and then they carry out the aforesaid activity on the chassis using their own inputs and capital goods. Hence the said activity amounts to supply of services in terms the Circular dated 09.08.2018. Therefore in the instant case two situations arise - In the first scenario the body is built without the physical presence of the chassis. The dimensions of the chassis and the required design of the body are known and the body is fabricated accordingly. Such ready built body is thereafter mounted on the chassis as and when provided by the owner - In the second scenario the chassis is provided by the owner and the applicant carries out the building and mounting of the body on the chassis in different steps as enumerated by the applicant. Activity of step by step building of the body on the chassis supplied by the owner using their own inputs capital goods - HELD THAT:- It is evident from Para 12.2(b) of Circular No. 52/26/2018 GST dated 09-08-2018 that if the body is built on the chassis provided by the principal and the fabrication charges, including certain material consumed during the process of job work, have been charged then the activity amounts to Supply of Service and attracts 18% GST - In the instant case in terms of the process explained by the applicant the body is built on the chassis provided by the owner. Therefore the instant question is answered by the provisions of Para 12.2(b) of the said Circular and the activity merits classification as supply of service attracting GST@ 18%. Supply of ready built body and the activity of mere mounting the body on chassis supplied by the owner - HELD THAT:- The fabrication of the body and then its mounting on the chassis appear to be two naturally bundled supplies, supplied in conjunction with each other. Therefore the applicant appears to be engaged in a composite supply where the principal supply is that of the body, i.e. supply of goods. Accordingly the activity shall attract classification under HSN 8707 and the activity would be liable to GST @ 28 % in terms of Serial number 169 of Schedule IV of Notn. No 1/2017-Central Tax (Rate) dated 28.06.2017, effective from 01.07.2017.
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2019 (7) TMI 617
Input tax credit - inputs - goods/ services used on the construction of the break water wall - whether the breakwater that is being constructed for the applicant can be considered to be Plant and Machinery ? - HELD THAT:- The applicant has agreed that the breakwater is an immovable property. Any apparatus, equipment machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both can be considered as plant and machinery. Further, the exclusion clause includes Land, Building or any other Civil Structure - the breakwater can be considered as a civil structure. Such apparatus, equipment and machinery should be used for making outward supply of goods or services or both. In the subject case the breakwater will, if any, be facilitating the receipt of raw material i.e. LNG by the applicant. It is not going to be used for rendering outward supply of goods or services or both. As per the decision of Hon ble High Court in the case of Mazgaon Dock Limited [1991 (3) TMI 114 - BOMBAY HIGH COURT] for the breakwater, to qualify for inclusion in the term plant , it must be established that it is impossible for the regasification plant to function without the breakwater. In the subject case the applicant s regasification plant is already functioning without the complete breakwater in place, as can be seen from their submissions. The applicant has not been able to establish that it is impossible for them to function without breakwater wall. Works contract services - whether predominantly earth work or not? - whether services of the works contract by the contractor is covered under item (vii) of serial No.3 of Table of the N/N. 11/2017-CentraI Tax (Rate) dated 28th June, 2017 as amended by N/N. 31/2017 - Central Tax (Rate) dated 13th October, 2017? - HELD THAT:- As per provision of section 95 of CGST ACT, this authority can give a ruling to the applicant on matters or questions raised, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant - Since the breakwater is going to be constructed by a contractor the supply, if any, in such a case will be undertaken by the contractor and not the applicant. Hence in view of the provisions of Section 95 of the GST Act, the issue is not within the purview of this authority and therefore this question is not being answered.
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2019 (7) TMI 616
Levy of GST - supply of services - amount collected as membership subscription and admission fees from members - HELD THAT:- Since the Applicant themselves have submitted that the facts in their case are similar to the case of Lions Club of Poona, Kothrud, which has been overruled by the Appellate Authority, the observations and findings made by the Appellate Authority in that case are squarely applicable to the instant case. In view of the above and in observance of the principles of Judicial discipline, we hold that the amount collected as membership subscription and admission fees from members is liable to GST as supply of services. Input tax credit - tax paid on Banquet and catering services for holding members meetings and various events - HELD THAT:- The provisions of Section 1 7(5) (b) (i) are crystal clear. Unless and until the provisio to Section 17 (5) (b) (i) is satisfied the applicant is not entitled to Input Tax credit of Food beverages, outdoor catering. The applicant, other than mentioning that they are eligible for such credit has not substantiated the same with evidentiary material - Hence we cannot accept their contention - the applicant, cannot claim input tax Credit on the tax paid on banquet and catering services.
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2019 (7) TMI 615
Principles of natural justice - whether the vans / motor vehicles in which the petitioners were transporting cash, would be money for the purpose of Section 2(52) of the GST Act - the issue not considered by AARA - HELD THAT:- The money would stand covered by the definition of 'goods' under Section 2(52) of the GST Act so long as the same is not used as legal tender. This on the basis of the definition of money provided in Section 2(75) of the GST Act. The aforesaid principal submission though recorded, has not been dealt with at all in the impugned order. Reliance placed in the impugned order upon the press note issued subsequent to a GST Council recommending to allow of input tax credit in respect of the motor vehicles used for transportation of money, would not by itself lead to the conclusion that prior thereto, money was not included within the definition of goods. This has to examined in terms of the definition of 'goods' and 'money' found in GST Act. The entire issue before the AARA as raised by the petitioner was whether the vans / motor vehicles in which the petitioners were transporting cash, would be money for the purpose of Section 2(52) of the GST Act. This aspect has not been dealt with in the impugned order dated 6th August, 2018 of the AARA - the decision making process has not been complied with by the Authority. It is necessary for the Authority to consider the submissions made by the parties before it and give its findings in the context of the submissions made. Ignoring a submission would render the order vulnerable to judicial review by this Court. Matter restored to AARA - Petition disposed off.
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2019 (7) TMI 587
Encashment of Bank Guarantee - Section 21 of Integrated Goods and Service Tax Act read with Section 107 of the Maharashtra Goods and Service Tax Act, 2017 - grievance of the petitioner is that the order dated 26th march 2019 passed by the Dy. Commissioner of Sales Tax is subject to further appeal to the Goods Service Tax Appellate Tribunal (Tribunal) - HELD THAT:- Mr. Sonpal, learned Special Counsel for the respondents-State, seeks time to take instructions and file an affidavit, if so required. At his request, the petition is adjourned to 19th July 2019 at 3.00 p.m.
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Income Tax
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2019 (7) TMI 620
Exemption u/s 11 - denial of exemption - continued availability of registration u/s 12A(a) of the Act for the appellant as a Public Charitable Trust - CIT-A allowed exemption - finding recorded by the Tribunal is that from the objectives of the assessee trust, it is evident that trading activities indulged by them is not mentioned in the objectives of the society - the activities of the assessee society namely, procuring raw material from abroad and distributing the same will amount to pure commercial transaction because it is purely a trading activity generating substantial profit - HELD THAT:- This finding is insufficient to dislodge the order passed by the CIT(A). We say so for more than one reason. Firstly, the Tribunal was required to take note of the legal position, which prevailed at the relevant time, in fact, one of the decisions of the Tribunal which considered similar case in respect of The ACIT(Exemptions) Vs. All India Skin and Hide Tanners and Merchants Association in [ 2017 (10) TMI 1466 - ITAT CHENNAI] was available when the Tribunal decided the impugned appeals. In the said decision, the Tribunal elaborately discussed the issue, examined the memorandum of association of the said assessee association and held in favour of the assessee. In this case also the earlier decision of the Tribunal has been referred to. We have pointed out these orders only for the purpose that in those cases the objectives of the concerned assessee were analysed by the Tribunal. However, we find such exercise was not done in the instant case, which was required to be done. We also make it clear that we have not expressed any opinion on the merits of the matter but, what we are concerned is that, an exercise should be done to examine the contention advanced by the assessee. More particularly, the contention which were raised in this appeal and the decisions which were cited at the bar. As per assessee proceeding proposing to cancel the said registration u/s 12AA was dropped and till date the assessee is enjoying such registration. However, Mr.J. Narayanaswami, learned Senior Standing Counsel, does not have any instructions in that regard but would submit that in any event, the facts of the case is only relevant factor to be gone into. Matter requires reconsideration by the Tribunal by examining the factual matrix in greater depth. For the above reason, this appeal is allowed. The order passed by the Tribunal is set aside and the matter is remanded back to the Tribunal for fresh consideration to consider all issues that may be raised by the assessee as well as by the Revenue.
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2019 (7) TMI 614
Disallowance u/s 14A - CIT(A) deleted the suomotu disallowance made by the assessee and upheld by ITAT - Tribunal held that no disallowance u/s 14A in absence of exempt income - HELD THAT:- Tribunal concurred with the findings recorded by the CIT(A) that Section 14A of the Act can be invoked only if the assessee seeks to square off the expenditure against the income which does not form part of the total income under the Act, and in such circumstances, Section 14A of the Act could not have been invoked, more particularly, when no exempt income was earned in the relevant assessment years. The Tribunal has relied on various decisions including the decision of this Court in the case of Corrtech Energy Private Limited, [ 2014 (3) TMI 856 - GUJARAT HIGH COURT] Tribunal also concurred with the findings recorded by the CIT(A) that the mistake or inadvertence on the part of the assessee whereby an income not taxable is wrongly offered for tax will not operate as any kind of estoppel against the assessee regardless whether the revised return was filed or not. If the assessee is in a position to show that it has been over assessed on account of his own mistake, the Revenue is obliged to assess the correct income. - decided against assessee.
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2019 (7) TMI 613
TDS u/s 195 - non-deduction of tax on commission payable to foreign agents - income as not chargeable to tax in India - disallowance u/s 40(a)(ia) - HELD THAT:- The questions of law as proposed by the revenue has no longer integreta in view of the decision of this Court in the case PR CIT Vs. MGM Exports [ 2018 (5) TMI 1240 - GUJARAT HIGH COURT] which has been applied saying that a person paying interest or any other sum to a non resident is not liable to deduct tax if such sum is not chargeable to tax under the Act. Tribunal had not erred in law and on facts in upholding the order of the CIT(A) deleting the addition - Decided in favour of assessee.
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2019 (7) TMI 612
Application for waiver of income tax - reference before BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985 - mandate to the Income Tax Department to grant the tax concession requested by the petitioner company - request to allow to carry forward the loss beyond the statutory period - HELD THAT:- In the context of income tax concession, in para 2.1 of the said scheme, the reference was made to the Department s letter dated 15.2.2012 stating that the company had not quantified its tax liability in the projected statement and that the reliefs sought by the company can be considered only after the details are received from the company. In this context, the Board noted that at an appropriate place, the words to consider have already been prefixed. The combine reading of para 2 and 2.1 of the said scheme would clearly bring about the purpose and intent of use of the said expression to consider . In the context of state tax, the Board clearly noted the stand of the State Government that there is no policy of the State Government to waive the taxes. The Board was, however, of the opinion that the expression to consider would enable the company to claim such benefits if in future, the Government policy changes. The scheme did not contain any mandate to the Income Tax Department to grant the tax concession requested by the petitioner company. Firstly, the Department had objected to any concession being granted. Secondly, before the Board, it was pointed out that without quantification, the Revenue would not be in a position to give any concession and thirdly, in this respect, the scheme envisaged only to consider the request for tax concession. We, therefore, cannot accept the contention of the petitioner that under the scheme, the direction was issued to the Income Tax Department to grant the benefit and that all that was left to be done was to compute the benefit. The facts in case of Tube Investments of India [ 2012 (1) TMI 35 - MADRAS HIGH COURT] court has held that the scheme should be read as a whole and that the authority was therefore bound to grant such benefit. From the judgment, it is not clear whether the Income Tax Department had opposed granting of any such concession to the company when the scheme under SICA was being framed. In the present case, as noted, the Income Tax Department had objected to any tax waiver being granted in favour of the company. Petition dismissed
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2019 (7) TMI 611
Addition u/s 68 - unexplained credit - addition was an unsecured loans - CIT-A deleted the addition - HELD THAT:- The loans borrowed from Deepak Bhatia and Nancy Bhatia of ₹ 2 and 4 lacs respectively were old loans and, therefore, rightly not treated by the CIT (A) as income of the Assessee. As regards the loans given by Jyoti Kukreja and and Suresh Kukreja, the bank statements, addresses and PAN numbers of of the said two individuals were provided. The CIT (A) found no reason to disbelieve the creditworthiness of the two individuals or the genuineness of the loan transactions. Indeed, if the AO had any doubt in this regard, he could have summoned and recorded the statements of the said individuals, which option was not chosen to be exercised. This being a factual determination by the CIT (A), and having been concurred with by the ITAT, the Court does not find any reason to interfere. - Decided against revenue
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2019 (7) TMI 610
Unaccounted investment - search and seizure operation u/s 132 wherein an unsigned Agreement to Sell was found - rejection of report of the DVO - HELD THAT:- DVO having complete knowledge of the unsigned agreement, which was much lesser than the total amount that was revealed from the two agreements found. It was noted by the ITAT that presumption could only be made under Section 132 (4A) and that too was rebuttable. The matter was referred to the DVO after the seizure of the aforementioned document. The DVO concluded that the property was worth ₹ 7.11 crores and the AO could not have disputed that finding. It was also noted by the ITAT that the sale price on the basis of signed documents is accepted by the department in the hands of sellers of the property or shareholders of Bluebird Software Private Limited. This Court concurs with the ITAT that indeed the AO could not have rejected the report of the DVO since it was at his instance that it was prepared. CIT (A) also appears to have missed this aspect while dismissing the appeal of the Assessee. In light of the report of DVO, there was no justification for the AO to have added ₹ 6,98,00,000/- to the income of the Assessee on the basis of the unsigned documents. The Court finds that the impugned order of the ITAT does not suffer from any legal infirmity and does not give rise to any substantial question of law.
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2019 (7) TMI 609
TDS u/s 195 - payment for Fee for Technical Services - no PE India - applicability of Section 9(1)(vi) and Section 9(1)(vii)(b) - DTAA between India and Srilanka, Germany and UAE - all the authority has held that TDS is deductible - HELD THAT:- If we examine the terms and conditions mentioned in the work order, more particularly the scope of work and the various clauses contained therein, we have no hesitation to hold that the nature of activity done in Srilanka is not mere construction or assembly or mining like project. Admittedly, the installation of wind turbine is a highly skilled and technical work. The various clauses in the work order clearly demonstrates the scope of work and therefore, we cannot but hold that the AO was right in concluding that the services rendered by M/s.WFPL is in the nature of Fee for Technical Services. Similarly, with regard to the services rendered by M/s.WRS, Germany was stated by the assessee to be a repair work. The AO after taking note of what is the type of repair work which would accrue in wind turbine, concluded that the repairs are not mundane repairs but require highly sophisticated techniques and accordingly held that it is in the nature of technical services. After analysing the type of services rendered by M/s.E Y at UAE, the AO held that the market study is in the nature of technical services and the remittance is to be treated as Fee for Technical Services. We find that there is no error in the said conclusion especially when it has been rendered on appreciation of the scope of work based on the documents placed by the assessee before the AO. Therefore, we find that the conclusion arrived at by the two authorities and the Tribunal on all the three issues does not call for interference. Delhi Court in Havells India Ltd [ 2012 (5) TMI 449 - DELHI HIGH COURT] after analysing Section 9(1)(vii)(b) has held that in order to get the benefit of the first exception it is not sufficient for the assessee to prove that the technical services were not utilised for its business activities of production in India, but it is further necessary for the assessee to show that the technical services were utilised in a business carried on outside India and further in order to fall within the second exception provided in Section 9(1)(vii)(b), the source of the income, and not the receipt, should be situated outside India. The decision in the case of Havells India Ltd.(supra) would apply with full force to the case on hand. In any event, as observed by us earlier the finding rendered by the Assessing Officer, affirmed by the CIT(A) and the Tribunal revolves entirely on the interpretation of the terms and conditions of the work order/contract and in the absence of any perversity, we decline to interfere in the matter as no substantial question of law arises for consideration.
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2019 (7) TMI 608
Stay petition - stay of recovery - Deduction u/s.80P disallowance - condition of depositing 20% of the tax demanded in five equal installments - HELD THAT:- Ext.P4 does not warrant interference of this Court in exercise of its power of review under Article 226 of the Constitution of India and hence the first ground against Ext.P4 fails. The next submission of Sri. Harisankar. V. Menon is that the petitioner may be permitted to comply with the order by starting the payment of the installments on or before 30th of July, 2019. To meet the ends of justice this prayer could be considered and accordingly accepted. The issue involves the claim of deduction u/s.80P disallowance. In the totality of the facts, deem it proper to stay 80% of the demand till disposal of appeal or 6 months whichever is earlier. 20% of the balance demand in five equal monthly installments starting from on or before the 30th day of July, 2019 should be paid. AO shall monitor the payment of demand and report and default on part of the appellant. Any default on part of appellant to pay demand will invite revocation of stay granted.
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2019 (7) TMI 607
Reopening of assessment u/s 147 - disallowance u/s 36(1)(iii) and non deduction of tds u/s 194H commission allowance - validity of reasons to believe - HELD THAT:- A reading of the impugned order would show that the original assessment order was framed under Section 143 (3) i.e. after scrutiny of all the claim by the assessee. It is thus apparent that the declarations and claims made, received careful consideration by the A.O. In terms of Calcutta Discount Ltd. Co. Vs. I.T.O. [ 1960 (11) TMI 8 - SUPREME COURT] the job of the A.O. essentially is to consider the claims in accordance with law and not in accordance with what an assessee states. Likewise, that an assessee might not claim a benefit would not deny it that relief, conversely, since the A.O is bound to administer the law in its correct interpretation. The impugned judgment took into account the binding decision of Commissioner of Income Tax, Delhi Vs. Kelvinator of India Ltd., [ 2010 (1) TMI 11 - SUPREME COURT] where the Court after reviewing the entire law, including the decision in Raymond Woollen [ 1997 (12) TMI 12 - SUPREME COURT] held that for a valid reopening of an assessment completed under Section 143 (3), the revenue must be in possession of tangible material outside of the record. In other words, a second opinion or a review on the existing material is impermissible. This Court is of the opinion that the learned Single Judge was justified in granting the relief to the assessee on both aspects, there was no allegation of suppression or mis-declaration by the assessee. The A.O. in the original assessment took into account all claims. The mere fact that he overlooked some provisions itself-in the absence of tangible material could have afforded opportunity of reassessment to the revenue. - Decided against revenue
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2019 (7) TMI 606
Levy of penalty u/s 271(1)(c) - rejection of claim of sundry creditors which were offered for taxation in the course of the assessment proceedings by the Appellant - concealment of Income or furnishing of inaccurate particulars of Income - penalty imposed by AO, deleted by the CIT(Appeals) and restored by the Tribunal in the impugned order is warranted - HELD THAT:- In the instant case, there was no allegation made against the assessee that the statement given by the assessee was either mala fide or lacks bona fide. There is no allegation against the assessee that he suppressed information to the Department with an intent to evade payment of tax. The details called for by the Assessing Officer during the course of assessment proceedings were culled out from the books of the assessee. In similar circumstances, this Court in Sree Krishna Electricals Vs. State of Tamil Nadu [2009 (4) TMI 428 - SUPREME COURT] held that penalty was not imposable under the provisions of the Tamil Nadu General Sales Tax Act, when the details were culled out from the books of accounts of the assessee/dealer. If the assessee gives an explanation which is unproved but not disproved i.e., it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false. The explanation cannot help the Department because there will be no material to show that the amount in question was the income of the assessee. In Commissioner of Income Tax Vs. Suresh Chandra Mittal [ 1999 (7) TMI 34 - MADHYA PRADESH HIGH COURT] it was held that the burden shifts to the assessee only if he fails to offer any explanation for the undisclosed income or offers explanation, which is found to be false by the Assessing Officer. However, proviso to Explanation 1 provides for shifting of this burden again where the explanation offered by the assessee is found to be bona fide. In the instant case, the explanation offered by the assessee was not found to be false by the Assessing Officer, in fact, the reconciliation made by the assessee was accepted for the amount of ₹ 34,51,447/-. The decision in Suresh Chandra Mittal (supra) was affirmed by the Hon'ble Supreme Court [ 2001 (6) TMI 63 - SC ORDER] Tribunal was wrong in reversing the order passed by the CIT(A), which deleted the penalty imposed on the assessee. - Decided in favour of assessee.
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2019 (7) TMI 605
Disallowance of telephone expenses - Disallowance of motor car expenses and depreciation - personal use by director - ITAT deleted the addition - HELD THAT:- The Tribunal has placed reliance on the decision of this Court in the case of Sayaji Iron and Engineering and Company [ 2001 (7) TMI 70 - GUJARAT HIGH COURT] wherein it was held that no disallowance on account of personal use can be made in the case of company. No error not to speak of any error of law could be said to have been committed by the Tribunal in passing the impugned order. None of the questions proposed by the Revenue could be termed as the substantial questions of law involved in the present Tax Appeal.
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2019 (7) TMI 604
Reopening of assessment u/s 147 - notice against dead person - curable defect u/s 292B - HELD THAT:- Issue raised are covered by the decision of this Court in the case of Chandreshbhai Jayantibhai Patel vs. ITO [ 2019 (1) TMI 353 - GUJARAT HIGH COURT] . It was held that in view of the provisions of section 159(2)(b) it is permissible for the AO to issue a fresh notice under section 148 of the Act against the legal representative, provided that the same is not barred by limitation; he, however, cannot continue the proceedings on the basis of an invalid notice issued under section 148 of the Act to the dead assessee. Further held that the notice u/s 148 which is a jurisdictional notice, has been issued to a dead person. Upon receipt of such notice, the legal representative has raised an objection to the validity of such notice and has not complied with the same. The legal representative not having waived the requirement of notice under section 148 and not having submitted to the jurisdiction of the Assessing Officer pursuant to the impugned notice, the provisions of section 292B would not be attracted and hence, the notice under section 148 has to be treated as invalid. In the absence of a valid notice, AO has no authority to assume the jurisdiction under section 147 of the Act and, hence, continuation of the proceeding u/s 147 pursuant to such invalid notice, is without authority of law. - Decided in favour of assessee.
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2019 (7) TMI 603
Rectification u/s 154 - exemption u/s 10(23C)(vi) rejected - non affording an opportunity to the petitioner trust to explain - application made by the assessee/trust for review of the rejection order passed by the CCIT, Coimbatore u/s 10(23C)(vi) was rejected - Tribunal opined that there is no error that needs to be rectified and nothing is glaring or apparent on the face of the order to invoke Section 154 - HELD THAT:- We find that both in the first order of rejection dated 24.06.2013 and second order of rejection dated 06.05.2016. The only reason assigned by the CCIT is by stating that the trust deed does not specifically mention that the educational institution established by it, is not running for the purpose of profit. Though the Statute does not specifically contemplate an opportunity of personal hearing on facts, the CCIT could have afforded an opportunity of personal hearing especially, when the assessee has come forward with the plea that the funds are utilized for educational activities and the same is pursued as a charitable activity. Therefore, we hold that there has been violation of principles of natural justice and this is also grant one more ground to interfere with the orders passed by the CCIT, dated 06.05.2016. We find from the order impugned before us that the income and receipts of the assessee from the various institutions run by it have been noted from paragraph 13 of its order. There has been no exercise done by the Department to find out as to whether the assesee/Trust has generated a reasonable surplus to enable them to sustain the institution and in the event of them earning a higher surplus, whether they had ploughed back or utilising the same for achieving the objects of the trust. This exercise ought to have been done at the first instance or at least when the assessee had filed a review petition dated 28.04.2014. Thus, for the above reasons, we are of the considered view that the matter should be remanded back to the CCIT with a direction to examine the entire financials of the assessee and take a decision on merits and in accordance with law.
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2019 (7) TMI 602
Exemption u/s 54 - sale of residential property OR vacant land with malba - builder demolished and redeveloped the old residential property into new residential building consisting of ground floor, 1st floor, second and third floor - HELD THAT:- From the records it can be seen that it is an undisputed fact that the subject property was being used as residential house by the assessee from the period of its purchase on 09.08.2007 to the date of handing over its vacant possession to the builder for re-development and construction vide collaboration agreement dated 18.04.2012. From the Clause of collaboration agreement, it can be seen that what was transferred / handed over to the builder was the existing structure of the residential property. The builder demolished and redeveloped the old residential property into new residential building consisting of ground floor, 1st floor, second and third floor. Thus, the assessee lost all rights upon the entire existing structure which comprises residential house. The reliance upon the decision in case of Ved Prakash Rakhra [ 2012 (10) TMI 286 - KARNATAKA HIGH COURT] as well as Gita Duggal [ 2013 (3) TMI 101 - DELHI HIGH COURT] and CIT vs. Smt. K.G. Rukminiamma 2010 (8) TMI 482 - KARNATAKA HIGH COURT] are apt in present case. By virtue of collaboration agreement, the assessee permanently lost the share beyond the 1st floor in the old residential property i.e. from 2nd floor onwards and in fact received the share up to the 1st floor in the newly constructed residential building. So the assessee permanently dis-possessed of 2nd floor onwards in old and new residential property. Thus, the assessee has rightly claimed exemption u/s 54. As per the provisions of Section 54, the assessee purchased residential property. The said property was held by the assessee for more than three years from the date of acquisition and it is a case of long term capital gain on transfer of residential property. The said residential property was subject matter of Collaboration Agreement dated 18.04.2012 under which the possession was transferred to the developer and the rights of the purchased property were lost. The consideration received by the assessee under Collaboration Agreement was ₹ 5.50 cores and also the cost of construction of the area of building coming to the share of the assessee which was comprising of area in basement, ground floor and first floor and the said amount was to be treated as sale consideration on account of transfer of the property by the assessee to the builder under Collaboration Agreement. The gain arising on the said transfer was utilized for purchase of residential property at Greater Kailash-III, New Delhi as per the sale registration dated 09.07.2013. Thus the new residential property was acquired within two years from the date of transfer of the said property i.e. date of collaboration on 18.04.2012. Thus, there is no need to interfere with the findings of the CIT(A). Assessing Officer was not correct in disallowing the claim u/s 54 of the Income Tax Act, 1961. The appeal of the revenue is dismissed.
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2019 (7) TMI 601
Levying penalty u/s 271C - failure to deduct tax at source u/s 194H - reasonable cause for non deduction of TDS - HELD THAT:- The issue on which the penalty u/s 271C is imposed is debatable as different courts have taken diverse views. Therefore, the fact remains that the assessee has reasonable cause for non deduction of tax at source on the discount allowed to the prepaid distributor as there are decisions of the Hon ble High Courts and Tribunal taking diverse views. Thus, it is contesting issue and the assessee has reasonable cause not to deduct the tax at source. Therefore, the action of non deduction of tax in the present case will not attract the penalty u/s 271C. Since this issue is decided in case of assessee s own case for earlier assessment years the same will be followed. - Appeals of the assessee are allowed.
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2019 (7) TMI 600
Penalty levied u/s 271(1)(c) - addition u/s 68 - defective notice - no proper satisfaction for initiating penalty proceedings by AO - HELD THAT:- AO has failed to come to finding as to which limb of section 271(1)(c) has not been fulfilled by assessee and thus, has not issued proper show cause notice to the assessee in this regard. Penalty has been levied under section 271(1)(c) for furnishing inaccurate particulars of income. Where the AO has failed to give proper show cause notice to assessee vis- -vis limb in respect of which he wants to initiate penalty proceedings, then in the absence of proper satisfaction, order passed under section 271(1)(c) cannot stand. We find support from the ratio laid down in CIT Vs. Shri Samson Perinchery [ 2017 (1) TMI 1292 - BOMBAY HIGH COURT] wherein it was held that where there is no proper satisfaction for initiating penalty proceedings and in the absence of proper show cause notice to the assessee, there is no merit in levy of penalty. In the present case, AO has failed to conclude which limb of section 271(1)(c) is applicable, hence order suffers from infirmity. Accordingly, we delete the penalty levied under section 271(1)(c). The grounds of appeal raised by assessee are thus, allowed. - Appeal of assessee is allowed.
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2019 (7) TMI 599
Penalty u/s 271(1)(c) - addition has been deleted by the Tribunal in quantum appeal - HELD THAT:- Sub-clause (iii) of section 271(1)(c) provides mechanism for quantification of penalty. It contemplates that the assessee would be directed to pay a sum in addition to taxes, if any, payable by him, which shall not be less than , but which shall not exceed three times the amount of tax sought to be evaded by reason of concealment of income or furnishing of inaccurate particulars of income. In other words, the quantification of the penalty is depended upon the addition made to the income of the assessee. In the present case, the addition has been deleted by the Tribunal vide order dated 12.5.2016 cited supra, and therefore penalty under section 271(1)(c) of the Act has not limb to stand. CIT(A) has rightly cancelled the penalty, which we confirm and the ground of the Revenue challenging impugned penalty is rejected. This observation and findings of our are also equally applicable to the cases of other three assessees. Therefore, appeals of the Revenue in all the cases are dismissed.
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2019 (7) TMI 598
Short term capital gain - Assessee is a resident of UAE for the purposes of the tax treaty - STCG arising from sale of units of equity oriented mutual funds and debt oriented mutual funds - taxable in India or UAE as per Article 13(4)/13(5) of DTAA - transfer of a capital asset situated in India shall be deemed to accrue or arise in India - Assessee sold equity linked mutual funds and derived STCG - HELD THAT:- The term share is not defined under the tax treaty. As per Article 3(2) of the tax treaty, any term not defined under the tax treaty shall, unless the context otherwise requires, have the meaning which it has under the laws of the country whose tax is being applied. Therefore, the term share would carry the meaning ascribed to it under Act, and if no meaning is provided under the Act, then the meaning that the term carries under other allied Indian laws would need to be applied. The Act does not define the term share . Section 2(84) of the Indian Companies Act, 2013 defines the term share to mean a share in the share capital of a company and includes stock . Further, the term company has been defined to mean a company incorporated under the Companies Act, 2013 or under any previous company law . Under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1995, mutual funds, in India can be established only in the form of trusts , and not companies . Therefore, the units issued by Indian mutual funds will not qualify as shares for the purpose of Companies Act, 2013. From the above definition of securities , it is clear that shares and units of a mutual fund are two separate types of securities. Applying the above meaning to the provisions of the tax treaty, the gains arising from transfer of units of mutual funds should not get covered within the ambit of Article 13(4) of the tax treaty, and should consequently be covered under Article 13(5) of the tax treaty. Therefore, the assessee, who is a resident of UAE for the purposes of the tax treaty, STCG arising from sale of units of equity oriented mutual funds and debt oriented mutual funds should not be liable to tax in India in accordance with the provisions of Article 13(5) of the tax treaty. We are of the view that the CIT(A) is justified in deleting the addition as short term capital gain - Appeal filed by the Revenue is dismissed.
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2019 (7) TMI 597
Penalty u/s 272A(2)(c) r.w.s. 274 - non furnishing the information called for u/s 133(6) - reasonable cause - penalty @ ₹ 100 per day of defaulting period - HELD THAT:- As decided in M/S. KAKOOR SERVICE CO-OPERATIVE BANK LTD. [ 2018 (1) TMI 548 - ITAT COCHIN] the assessee has not offered any valid reason for not furnishing the information called for u/s 133(6) of the Act. Many of the notices issued by the ITO (Intelligence) were never responded to by the assessee. In many instances the Assessing Officer has mentioned that when they had approached, the assessee Society, for seeking information u/s 133(6) of the Act there was total lack of co-operation on the part of the assessee society as well as threat (reference order imposing penalty u/s 272A(2)(c) in appeals [ 2018 (1) TMI 548 - ITAT COCHIN] . Since there is no reasonable cause furnished by the assessee as mentioned u/s 273 of the I T Act for non furnishing of information sought by the ITO(intelligence) u/s 133(6) it is of the view that the order imposing penalty cannot be quashed. It is ordered accordingly. we hold that the CIT(A) is justified in upholding the order passed u/s 272A(2)(c) - Decided against assessee.
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2019 (7) TMI 596
Assessment u/s 153A - validity of assessment order - Addition u/s 69 - no incriminating material/ document being found/ seized - taxability of same amount twice - HELD THAT:- We find substantial merit in contention of assessee that if at all the amount on the basis of the papers relied upon could only be taxed in year of search, when the said papers were, for the first time, confronted to the assessee. This is for the reason that the paper nowhere shows any amount being deposited in any of the assessment years beginning with assessment year 2006-07. Therefore, neither in assessment year 2006-07 nor in assessment year 2007-08, the two years in which additions have been made by the assessing officer, the assessee could be regarded as having made any investment and therefore, the provisions of section 69 cannot, in our view, be applied in those assessment years. Further, the documents relied upon actually refer to creation of account in earlier assessment year, much prior to assessment year 2006-07. Assessment years 2006- 07 and 2007-08 were undisputedly made u/s 153A in respect of non-abated assessments. In respect of nonabated assessments, the law laid down in CIT vs. Singhad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] and PCIT vs. MeetaGutgutia: [ 2017 (5) TMI 1224 - DELHI HIGH COURT] , CIT vs. Kabul Chawla: [ 2015 (9) TMI 80 - DELHI HIGH COURT] and other decisions of the jurisdictional High Court is that the addition should be made on the basis of any incriminating document found during the course of search. In Meeta Gutgutia (supra), the High Court further held that statement recorded cannot be regarded as incriminating material found during search and cannot independently be the basis for making any addition. In the present case, there is no dispute that the papers relied upon by the assessing officer were not found during the course of search at the residential premises of the assessee and therefore, strictly speaking, the said papers cannot be the basis for making any addition in assessment years 2006- 07 and 2007-08. Assessee offered for tax ₹ 5,81,32,321/- as amount equivalent to US $11,46,368 in assessment year 2012-13 u/s 69A , which amount, as noticed above, is more than ₹ 5,09,00,327/- brought to tax cumulatively by the assessing officer in assessment years 2006-07 and 2007-08.In view thereof and the entirety of circumstances discussed in the preceding paragraphs, we are of the considered opinion that the addition of ₹ 4,90,20,749 made by the AO equivalent to US $ 11,02,829 in assessment year 2006-07 under section 69 and similar addition made in assessment year 2007-08, are not sustainable in law and the same are hereby directed to be deleted. We therefore, hold that the addition of ₹ 4,90,20,749 in assessment year 2006-07 and similar addition of ₹ 18,79,578 in assessment year 2007-08 are not sustainable in law and are hereby directed to be deleted. As a consequence the amount offered for tax by the assessee in assessment year 2012-13, being ₹ 5,81,32,321, which was sustained by the Ld. CIT(A) on protective basis, is hereby directed to be restored on substantive basis in assessment year 2012-13.In the result, the grounds of appeal nos. 2 to 2.3 raised by the assessee in assessment year 2006-07 are allowed. In view of the addition made by the assessing officer having been deleted on merits, grounds of appeal nos. 1 to 1.2 challenging the validity of the assessment order are merely rendered academic in nature and the same are hereby dismissed as in fructuous. Addition on account of interest - HELD THAT:- Addition been made purely on notional basis on the premise that the assessee: (a) had alleged foreign bank account, which itself is under serious challenge; and (b) on such bank account, assessee earned interest @ 4%. We are of the view that the case of the assessee is on a much better footing vis- -vis the facts in judicial precedents relied upon by the Ld.Counsel inasmuch as in the aforesaid cases there was at least some basis of taxation of notional amount/ interest, which was never realized/ received by the assessee, but in the case of the assessee, the so-called amount of interest brought to tax is totally without any basis and is clearly hypothetical/ imaginary.Since there is no evidence that the assessee actually received interest on the disputed deposit and just by figment of imagination it has been concluded that the assessee earned interest on such deposits @ 4% p.a., the impugned addition on account of notional interest, has, even on merits, been rightly deleted by the CIT(A). Unexplained jewellery found during the course of search which has been confirmed in appeal by the CIT(Appeals) - HELD THAT:- Considering the quantum of jewellery declared in the wealth tax returns, quantum of jewellery found and jewellery mismatched, statement of wife of assessee Mrs. Bina Modi and also the status of the assessee s family, we are of the view that there was no warrant to treat part of the jewellery as undisclosed. Accordingly, the addition made in the hands of the assessee on account of undisclosed jewellery, is unjustified and is directed to be deleted.
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2019 (7) TMI 595
Disallowance of amortization of premium on leasehold land - HELD THAT:- We find that the identical issue has already been decided by the Hon ble ITAT in in assessee s own case [ 2017 (6) TMI 1173 - ITAT MUMBAI] holding that amortization of premium on leasehold land was allowable as a revenue expenditure in the hands of the assessee corporation. Therefore, respectfully following the decision of the Coordinate Bench of Hon ble ITAT and in order to maintain judicial consistency, we apply the same findings which are applicable mutatis mutandis in the present case. Resultantly, this ground raised by the assessee stands allowed. Disallowance u/s 14A - HELD THAT:- Adhoc disallowance made by the A.O u/s 14A cannot be approved. We thus set aside the orders of the lower authorities and delete the disallowance made in the hands of the assessee u/s 14A. Loss on sale of oil bond - Whether Oil bonds are capital asset? - capital loss OR business loss - HELD THAT:- Considering the decision of Co-ordinate Bench in assessee s own case [ 2017 (10) TMI 1206 - ITAT MUMBAI] wherein the similar ground of appeal was restored to the file of CIT(A), hence, keeping in view, the principle of consistency, this ground of appeal is also restored to the file of ld. CIT(A) to decide it afresh, with similar directions. In the result, this ground of appeal is allowed for statistical purpose. Disallowance of prior period expenditure - HELD THAT:- As decided in assessee's own case [ 2017 (10) TMI 1206 - ITAT MUMBAI] there the turnover or.he assessee is substantial, some bonafide adjustments in the books of accounts where the accounts for the relevant year may have been closed or the assessee's avenues for claiming these deductions in the relevant year have been exhausted. The assessee would be entitled to claim such deductions.Therefore we are unable to come to any other conclusion and are or the opinion that no interference in the impugned order is called for. Accordingly the ground raised by the Revenue is rejected
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2019 (7) TMI 594
Addition u/s 50C - substitution of stamp duty value as deemed sale consideration against actual sale price - reduction of payment made to trespasser - sale deed/document registered before the sub registrar without disputing the stamp duty for valuation of the land - HELD THAT:- It is primarily the case of the assessee that the lower consideration received on sale of property is attributable to the encumbrances, encroachment and defect in vacant possession of the property. The assessee has demonstrated the encroachment by illegal occupiers with reference to electricity bills in the name of the illegal occupiers and substantial payment of ₹ 1,75,00,000/- in aggregate to various such occupiers by the purchaser in the subsequent years. This fact of payment towards encroachment has not been disputed by the Revenue. Therefore, there is no reason to exclude such amount for the purposes of computation of capital gains. Thus, the purchase consideration together with costs towards obtaining vacant property should stand at ₹ 2,26,00,000/-. The assessee however has failed to explain as to why the difference between deemed sale consideration of ₹ 2,60,05,348/- adjusted purchase costs and ₹ 2,26,00,000/- being ₹ 34,05,348/- should not be subjected to capital gain tax in the light of Section 50C. The brokerage costs incurred on sale consideration by the purchaser cannot be taken into account for the purposes of Section 50C. CIT(A) has thus failed to take cognizance of applicability of Section 50C to the extent of ₹ 34,05,348/-. Hence, the order of the CIT(A) requires to be modified to the aforesaid extent and the chargeable capital gain requires to be increased by ₹ 34,05,348/-.- Appeal of the Revenue is partly allowed.
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2019 (7) TMI 593
Computation of Capital gains - sum above credit standing in partner account was received on his retirement from a partnership firm - certain amount credited on revaluation of assets - whether it can be said that there was a transfer of capital asset by the retiring partner in favour of the firm and its continuing partners so as to attract a charge u/s 45 ? - HELD THAT:- The decision in the case of Tribhuvandas G.Patel [ 1996 (2) TMI 16 - SUPREME COURT] is a case where the deed of reconstitution specifically referred to release of rights of the outgoing partners in the assets of the partnership and further the fact that a specified sum over and above the sum standing to the credit of the partner s capital account was paid to the retiring partner, which excess sum was attributed to the retiring partner giving up his rights over the properties of the firm. It is only because of the provisions of Sec.47(ii) of the Act that the Hon ble Court held that there was no incidence of tax on capital gain on the transaction. The decision will therefore have to be viewed as not applicable to cases after the amendment to the law w.e.f. 1-4-1989 whereby Sec.47(ii) of the Act was deleted and simultaneously Sec.45(3) 45(4) were introduced. Therefore the question whether there will be incidence of tax on capital gain on retirement of a partner from the partnership firm would depend on the upon mode in which retirement is effected as laid down by the Hon'ble Bombay High Court in the cases of Tribhuvandas G. Patel [ 1977 (9) TMI 13 - BOMBAY HIGH COURT] and N.A. Modi's case [ 1985 (10) TMI 52 - BOMBAY HIGH COURT] . Therefore the decision of the ITAT Mumbai in the case of Sudhakar M.Shetty Vs. ACIT [ 2010 (9) TMI 746 - ITAT, MUMBAI] following the decision of the Pune Bench of the ITAT in the case of Shevantibhai C. Mehta v. ITO [ 2003 (8) TMI 208 - ITAT PUNE] holding that question of taxability of an amount received by a partner on retirement from firm would depend upon mode in which retirement is effected, holds good. Therefore taxability in such situation would depend on several factors like the intention as is evidenced by the various clauses of the instrument evincing retirement or dissolution, the manner in which the accounts have been settled and whether the same includes any amount in excess of the share of the partner on the revaluation of assets and other relevant factors which will throw light on the entire scheme of retirement/reconstitution. After reducing the Partner s drawing and other payments made the balance to the credit of Assessee s capital account as on 31.3.2007 was ₹ 2,77,88,200/-. On 9.6.2007 the Assessee s was paid ₹ 38,38,200 towards Goodwill and another sum of ₹ 2,39,00,000/- being part of the consideration of ₹ 339.50 lacs payable on retirement. The difference between the sum of ₹ 3,39,50,000 and the sum of ₹ 2,77,88,200 viz., a sum of ₹ 61,61,800 was taxed as capital gain by the AO. Out of the above, ₹ 38,38,200 was Goodwill. Therefore to the extent of ₹ 2,77,88,200 being closing balance as on 31.3.2007 in the capital account and ₹ 38,38,200/- being Goodwill, was the sum payable as per the capital account of the Assessee. The claim of the Assessee that the entire sum of ₹ 61,61,800 is Goodwill is not substantitated by entries in the books of accounts of the Assessee and the book entries are only for ₹ 38,38,200/- recorded in the Assessee s capital account as well as Goodwill Account. The capital gain therefore would be ₹ 339.50 lacs minus ₹ 2,77,88,200 + 38,38,200 = ₹ 23,23,600/-. The Assessee had invested a sum of ₹ 50 lacs in specified bonds and therefore the AO allowed deduction upto ₹ 50 lacs. Therefore there would no capital gain which is chargeable to tax. We uphold the action of the revenue authorities in taxing the excess paid over and above the sum standing to the credit of the capital account of the Assessee as capital gain. The computation of the capital gain has been modified by us by treating value of goodwill also as part of the credit in the partners capital account. Consequently, the capital gain in question was less than ₹ 50 lacs and since the Assessee has been allowed exemption u/s.54EC to the extent of ₹ 50 lacs, no capital gain is exigible to tax in the present case - Appeal of the assessee is allowed
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2019 (7) TMI 592
Penalty u/s 271(1)(c) - disallowance of the claim of bad debts - HELD THAT:- As in quantum appeal on assessee's own case [ 2018 (7) TMI 2009 - ITAT MUMBAI] for the A.Y. 2003-04 in which the claim of bad debts has been allowed. Since the claim of the assessee in connection with bad debts has been allowed and the very base to levy the penalty is not in existence, therefore, no penalty is liable to be sustainable in the eyes of law. - Decided in favour of assessee.
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Customs
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2019 (7) TMI 591
Challenge against the order passed by the Settlement Commission - legitimate sales or not - HELD THAT:- Both the Assessee and the Revenue were equal parties and had an opportunity to place their respective case before the Settlement Commission. The reason behind the creation of Settlement Commission is to give a quietus to the dispute between the two parties viz., Revenue and the Assessee. Without any allegation of fraud played by any party upon such authority viz., the Settlement Commission, the orders passed by the Settlement Commission is final as per Section 127J of the Customs Act, 1962. The present appeal has no merits and it is liable to be dismissed - We express our anguish on the Revenue Departments of the Central Government in filing such petitions before the High Court, without really examining the merit and worth of their petitions before hand - On the other hand, the recent litigation policies issued to such Revenue Departments, compels the Revenue Departments to withdraw the cases where the Revenue stakes are less than ₹ 50 Lakhs and such circulars have been issued from time to time earlier also to reduce the burden of the Courts by withdrawal of such cases, even if they have some arguable points, where the Revenue stake are less than the monetary limits prescribed. Appeal dismissed.
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2019 (7) TMI 586
Principles of natural justice - the petitioner's request for cross-examination of the persons, on whose statements the Revenue relies upon is rejected - HELD THAT:- In this case, the statements of persons relied upon by the Revenue are not being made available for cross-examination only on account of alleged delay in making application. We are unable to understand how an application seeking cross-examination of the persons being relied upon could be rejected on account of delay in making the application when the impugned order dated 11th September 2018 itself records that the documents relied upon in the Show Cause Notice were supplied/given to the petitioner on that day itself - Further, there is no time limit provided in the Act for completion of adjudication proceedings as its object is as to ensure that justice is done to the parties. We set aside that part of the order dated 11th September 2018, which rejects the request for cross-examination of the persons on whose statements the Revenue is relying upon and direct the Commissioner of Customs to permit the cross-examination of the three persons whose statements are being relied upon by the Revenue, i.e., Shri. Lalit Mange, Shri. Mohan Nakhua and Mr. Umesh Ghelani. Petition allowed.
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2019 (7) TMI 585
Extension in respect of Export Promotion Capital Goods (EPCG) authorization - It is the grievance of the petitioners that the customs department cannot proceed against the decision of the EPCG Committee - HELD THAT:- These factual aspects are brought to the notice of respondent No.2 in the reply filed by the petitioners. In such circumstances, the final decision is required to be taken by respondent No.2 adjudicating authority. The results of the adjudication by respondent No.2 being directly related to the EODC, to be issued by respondent No.4, it will be appropriate for this Court to direct respondent No.4 to consider the representations of the petitioners and the rectification letters at Annexures AD, AF, AG, AJ, AM, AA, AA1 and take a decision inasmuch as the issue of EODC in favour of petitioners in an expedite manner. Petition allowed by way of remand.
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2019 (7) TMI 584
Maintainability of appeal - non-prosecution of he case - jurisdiction of DRI Officers, who issued the Show Cause Notice - HELD THAT:- The appeal is dismissed for non-prosecution of the case.
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2019 (7) TMI 583
Valuation of imported goods - revision of classification of goods - 100% polyester filament yarn - HELD THAT:- The Tribunal has disposed off three of the appeals by remanding the matter back to the adjudicating authority. Matter remanded to the original authority.
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2019 (7) TMI 582
Concessional rate of duty - N/N. 21/2002-Cus dated 1-3-2002 - Denial of benefit of notification along with imposition of consequential interest and penalty much after clearance of goods by invoking extended period - HELD THAT:- Though D.C. Defibrillators can be interchangeably used as internal or external D.C. Defibrillators, the very fact that paddles were imported along with it as it is necessary accessory, when put to use, the imported goods can be put in the category of the internal D.C. Defibrillators for which exemption notification is applicable. In the instant case not only Bill of entry, accessories attached to D.C. Defibrillators clearly reveal that the said machinery was imported for internal use for which exemption notification is rightly applicable - we refrained ourselves from discussing on the issue pertaining to applicability of extended period on the ground of mis-declaration etc. and legality of order of Commissioner (Appeals) dropping redemption fine. Appeal disposed off.
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Corporate Laws
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2019 (7) TMI 581
Initiation of Contempt Proceedings - Violation of order of status quo dated 29th November, 2017 - Section 421 of the Companies Act, 2013 - HELD THAT:- Section 420 of the Companies Act, 2013 empowers the Tribunal to pass order after giving the parties to any proceedings before it, a reasonable opportunity of being heard. The order passed under Section 420 of the Companies Act, 2013 is appealable under Section 421 of the Companies Act, 2013. For the purpose of initiation of contempt proceedings the Tribunal is empowered with the same power as that of High Court and for the purpose power under the provisions of the Contempt of Court Act, 1971 is applicable subject to modification as shown therein - As per Contempt of Court Act, 1971, the appeal lies under Section 19. In the present case, as we find that the Tribunal, after taking into consideration the relevant facts, has come to a definite conclusion and refused to initiate contempt proceedings, we are not deciding the issue aforesaid on merit as we do not want to interfere. Appeal dismissed.
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2019 (7) TMI 580
Maintainability of petition - Restoration of the applications - Case of petitioner is that petitioner could not able to remain present in the Court on account of marriage in his family, hence, he sent a letter for adjournment - HELD THAT:- The applicant has not produced sufficient proof nor shown convincing reasons for his non-appearance or the absence of his authorized representative on the due date of hearing before this Court. He did not furnish proof of his illness by producing a medical certificate along with the present applications nor his authorized representative filed any supporting affidavit by explaining that why he could not able to appear before this Bench on the due date of hearing nor he sought for adjournment by requesting some other proxy counsel or representative - Hence, the reasons shown for restoration are not adequate for want of necessary proof. It is well settled legal position in catena of decisions of the Hon ble Supreme Court and High Courts that if there is allegation of breach of Court s order/direction and there is prima-facie evidence for alleged breach of order, then the matter becomes a matter between the court and alleged contemnor and the status of the applicant can only be of complainant/informer - in order to meet the ends of justice, it is expedient to consider the above stated Miscellaneous Application and Contempt Application on its merits and to be disposed in accordance with law after affording opportunity of being heard to both the parties. Therefore, the inconvenience caused, if any, to the respondents can be compensated by appropriate cost. Applications allowed.
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Insolvency & Bankruptcy
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2019 (7) TMI 579
Admissibility of petition - Initiation of Corporate Insolvency Resolution Process - Section 9 of the Insolvency and Bankruptcy Code, 2016 - Existence of default or not? - HELD THAT:- The respondent has admitted its inability to clear the overdue payment. That, during the course of hearing also Learned lawyer appearing on behalf of the respondent fairly admitted that the respondent company is not in a position to pay the debt amount. The operational debt is due to the Applicant. Therefore, Applicant is an Operational Creditor within the meaning of (sub-section (20) of Section 5) of the Code. From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default. The Application filed by the Applicant is complete in all respects - it is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code. Petition admitted.
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2019 (7) TMI 578
Admissibility of petition - Appellant submitted that Securities and Exchange Board of India having already taken action against the Corporate Debtor , the application under Section 7 was not maintainable - whether contesting Respondent is Financial Creditor or not - Section 7 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The application under Section 7 is maintainable and till the period of Moratorium continues, the Securities and Exchange Board of India cannot recover any amount nor can sell the assets of the Corporate Debtor during the Moratorium period.
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2019 (7) TMI 577
Admissibility of petition - initiation of Corporate Insolvency Resolution Process - Section 7 of Insolvency and Bankruptcy Code, 2016, R/w Rule 4 of Insolvency Bankruptcy (Application to the Adjudicating Authority) Rules, 2016 - default in repayment of loan - HELD THAT:- It is admitted fact that the Financial Creditor sanctioned the loan and the Corporate failed to repay the loan with in time stipulated. In effect the Corporate Debtor admitted the default. The Financial Creditor is no way responsible for happening of certain events which causes delay in implementation of the Project. Thus, there is no valid objection raised for admission of the Petition. The Contention of the Corporate Debtor is that the company is likely to revive its business. This is not a ground on which the petition can be rejected. Further the corporate debtor admitted default. The Financial Creditor suggested the name of IRP and there is no compliant against proposed IRP. The financial creditor has fulfilled all the requirements as contemplated under Code. The petition is in order. Therefore the petition is fit for admission. Petition admitted - moratorium declared.
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PMLA
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2019 (7) TMI 576
Money Laundering - proceeds of crime - alleged purchase of fleet of cars out of the ill-gotten money and received about ₹16 crores in one year from Shell companies for bribing/ fixing cases in income-tax department - Section 120B/420 IPC and Section 13(2) read with 13(1) PC Act - Grant of Regular Bail - HELD THAT:- A bare perusal of the amended Section 45 would reveal that the introduction of the words under this Act would not revive the twin conditions as imposed in Section 45(1) PMLA which view has also been expressed by two other High Courts. A bare perusal of Section 24 reveals that in the case of a person charged with the offence of money laundering, the authority or the Court shall presume that such proceeds of crime are involved in money laundering unless the contrary is proved. The stage of raising the presumption or for the accused to rebut the said presumption would be during the course of trial. Even if assuming that at the stage of bail this Court is required to consider that the accused is prima facie required to rebut the presumption, the same would not have to be beyond reasonable doubt but on the basis of broad probabilities. In regard to the prima facie satisfaction of the Court in support of the charge in the two predicate offences on the basis of which ECIR stands recorded, the CBI has already clarified that in RC 0003 no pecuniary advantage has been received by the accused and thus there is no question of laundering the proceeds of the crime. In RC 0004 the complaint is by Kapil Wadhawan on behalf of M/s. White Lion Real Estate Developers Private Limited and it is alleged that a sum of ₹16,40,06,000/- has been extorted. There is no complaint from any of the entities noted in Para 25 above. Even otherwise as per the respondent, the total amount stated to have been laundered is approximately ₹52,55,00,000/- out of which ₹26,65,45,476/- stands attached - The maximum punishment provided for the offence punishable under Section 4 PMLA being 7 years imprisonment and the petitioner having undergone more than 1 year 1 month of custody and the trial likely to take some time, there being no material placed on record to show that the petitioner has been tampering of evidence and the statement of Alok Sharma which has been pressed in by the respondent stating that the petitioner forced him to remain associated with him, this Court finds it to be a fit case for grant of bail to the petitioner. The petitioner is directed to be released on bail on his furnishing a personal bond in the sum of ₹1 lakh with one surety bond of the like amount to the satisfaction of the learned Trial Court and some conditions imposed - petition allowed in part.
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Service Tax
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2019 (7) TMI 590
CENVAT Credit - services provided by them in the State of Jammu and Kashmir - POPOS Rules - the basic premise for reversal of the Cenvat credit is that the provisions of Finance Act, 1994 for levy of service tax are not applicable in the state of Jammu and Kashmir - HELD THAT:- It is a matter of record that though the appellant are not required to pay any service tax on the output service provided by them in the state of Jammu and Kashmir, however, under a mistaken belief that the provision of the Finance Act, 1994 are also applicable in the state of Jammu and Kashmir, the appellant paid service tax on the output services provided by them in the state of Jammu and Kashmir - This fact prove the bonafide of the appellant that firstly by the fact that they had been under the wrong impression that service tax liability is applicable in the state of Jammu and Kashmir; secondly that service tax which have been paid on the output service is much more than the input and capital input Cenvat credit availed by them. We do not agree with the finding of the Original Adjudicating Authority that if the credit is taken for an activity which does not constitute service, payment of service tax will not amount to reversal of the credit . demand deleted Validity of SCN - Penalty u/s 78 - HELD THAT:- If there is no suppression or collusion or willful misstatement with an intent to evade service tax and the required amount of the service tax is paid before the issue of show cause notice in that case, there is no need of issuing of any SCN - since all the facts and details of the Cenvat credit and output services have been recorded in the books of accounts of the assessee and during the enquiry itself, the assessee has made a payment of ₹ 5 crores as details given above, we feel that there are no valid ground of issue of show cause notice for demanding of service tax amounting to ₹ 87,35,678/- and for imposition of penalty under Section 78 of Finance Act, 1994 - Demand set aside. CENVAT Credit - capital goods lost before put to use - Consumer Premises Equipment (CPE) which were lost in transit or lost at the distributor s premises before same being put for use in providing the output service - interest - Penalty - HELD THAT:- During financial year 2010-2011, 2011-2012 and 2013-2014 a substantial amount of Cenvat credit had already been reversed by the appellant for the CPEs which were lost or destroyed before being put for use. However, due to oversight the amount of ₹ 66,66,437/- lost in transit CPEs during the financial years 2012-2013 could not be reversed. It has been admitted by the appellant that they own the liability of reversal of this amount of ₹ 66,66,437/- on account of the lost or destroyed CPE - as per the provisions of the Rule 3 of the Cenvat Credit Rules, the appellant are required to reverse back the Cenvat credit of ₹ 62,66,437/- as per the provisions of Rule 4 of Cenvat Credit Rules, 2004 readwith Section 73 (1) of the Finance Act, 1994. The appellant are also required to pay interest as per the provision of Section 75 on this amount - however, there is no valid ground for imposition of penalty under Section 78 readwith Rule 15 (3) of the Cenvat Credit Rules, 2004 - decided partly in favor of assessee. CENVAT Credit - capital goods lying unutilised and later written off - Rule 3 (5A) of the Cenvat Credit Rules, 2004 - Consumer Premises Equipments (CPEs) which were lying unused at the consumer premises and which have also been written off fully in the financial accounts from 01/07/2012 to 31 March 2014 by the appellant - HELD THAT:- It is presumed that the CPEs has been removed from the premises of the appellant and accordingly the provisions of Rule 3 (5A) of Cenvat Credit Rules, 2004 will be applicable. During the course of hearing, the learned Advocate has taken us through a chart of deactivation/activation of the CPEs for various subscribers. It can be seen from the provisions of Rule 3 (5) that the law has provided that in case the inputs or capital goods on which Cenvat credit has been availed are removed as such from the premises of the manufacturer or service provider, the manufacturer or service provider will have to reverse back the Cenvat credits equal to the amount of the credits availed by them. However, under the proviso to Rule 3 (5) it is provided that such payment shall not be required to be made where any input or capital goods are removed outside the premises of the provider of the output service for providing the output service . It can be seen that the provider of the output service namely appellant in this case, has taken the Cenvat credit on the CPEs which are the capital goods for providing output service at the premises of the subscribers and as per the provisions of the above-mentioned proviso to Rule 3 (5) the appellant are entitled for availing the Cenvat credit on the CPEs under the capital goods credit and they can also remove such CPEs for installation at the premises of the subscribers for providing the output service - The provisions of Rule 3 (5A) covers the situation where the goods are cleared after being put for use at the premises of the manufacture or output service provider. Since the goods are not removed after being used from the premises of the manufacturer or output service provider in the given situation in the present case and, therefore, the provisions of Rule 3 (5A) are not applicable in the present case. Extended period of limitation - Section 73 (1) of the Finance Act, 1994 - HELD THAT:- As the Department has already been aware about the facts of the matter and therefore we feel that the element of fraud, mis-representation, collusion, mis-statement with an intent to evade service tax are not present in the given circumstances in this case and, therefore, we hold that the show cause notice is also barred by period of limitation. Interest - HELD THAT:- The appropriate amount of interest as per the provisions of Section 75 of the Finance Act, 1994 readwith the Cenvat Credit Rules, 2004 confirmed on the issue of CPE. Penalty - HELD THAT:- The elements for invocation of provision of Section 78 such as fraud, collusion, willful mis-statement or suppression of facts with an intent to evade payment of service tax have not been found present and therefore imposition of any penalty under Section 78 of the Finance Act, 1994 is set aside. There is also no valid ground for imposition of the penalty under Rule 15 (1) of the Cenvat Credit Rules, 2004 on the appellant and, therefore, penalty imposed on the appellant under Rule 15 (1) of Cenvat Credit Rules, 2004 is also held legally not sustainable. Appeal allowed in part.
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2019 (7) TMI 575
Commercial and Residential Construction service - liability of service tax - HELD THAT:- Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] has settled the issue regarding the Works Contract which includes supply of material and labour for construction and the same is taxable only from 01.06.2007 - Further, even for the period after 01.06.2007, various decisions of the Tribunal have consistently held that composite contracts or works contracts even after 01.06.2007 cannot be taxed under Construction of Complex Services under section 65 (105)(zzzh) of the Finance Act, 1992. Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 574
Non-payment of service tax - Business Exhibition Service - HELD THAT:- The appellants have paid ₹ 6,24,414/- towards Business Exhibition Service together with interest before issuance of show cause notice. Demand of service tax - electricity charges - HELD THAT:- The electricity charges which were collected by the appellant from the stall owners and directly paid to the electricity department - demand set aside. Demand of service tax on advertising agency - HELD THAT:- The appellant does not fall in the definition of Advertising Agency as contained in Section 65(3) of the Finance Act, 1994. The said definition of the term Advertising Agency means any person engaged in providing any service connected with the making, preparation, displaying for exhibition of advertisements and includes advertising consultant - further, the appellants were engaged in not any of the above activity during the relevant period nor fall in the definition of Advertising Agency . Therefore, the demand of service tax on advertising agency is also not sustainable in law. Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 573
Refund claim - works contract or not - services provided by them to Ghaziabad Development Authority - time limitation - HELD THAT:- The deposit of dues was during the period 11-13 December, 2010, the challan have clearly mentioned payment of duty under protest. It seems to be an uncalled behavior of any reasonable prudent person to withdraw the protest immediately on the next date of payment i.e. on 14/12/2010 unless there is a specific reasons to do so. The explanation offered by the appellant that they were directed to do so by the range authorities seems plausible explanation. Apart from fact that there is no evidence of receipt of the said letter in the office of the Superintendent or Assistant Commissioner, the said letter has to be interpreted as being under coercion and pressure from the Revenue and not from free will of the appellant. As such, the duty having been deposited under protest in the challans itself, the refund claim cannot be held to be barred by limitation. The said aspect requires verification and examination by the Lower Authorities from the contracts entered between the two as also from the certificate issued by the Ghaziabad Development Authority read with definition of works contract - Appeal allowed by way of remand.
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2019 (7) TMI 572
Extended period of limitation - validity of subsequent SCN issued by invoking extended period - cum-tax benefit - HELD THAT:- The Appellant is entitled to cum duty benefit - there is a small difference in the taxable amount shown by the Appellant on which they have paid service tax on the gross amount as they have calculated the tax on cum duty basis. It is an admitted fact that the Appellant has not collected Service Tax separately and accordingly, the Commissioner (Appeals) has rightly allowed the cum duty benefit. Under the facts and circumstances that the Department was having knowledge of the affairs of the Appellant in view of the earlier show cause notice dated 22.10.2012, the subsequent show cause notice is held to be bad invoking the extended of limitation. Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 571
Refund claim - time limitation - Construction services - benefit of N/N. 25/2012-ST(NT) dated 20.06.2012 - HELD THAT:- The N/N. 25/2012-ST(NT) dated 20.06.2012 was issued notifying various services wherein no service tax will be leviable. In terms of serial no. 12(a) of the above Notification, construction services provided to the Government enjoyed such exemption. However, the benefit was withdrawn vide Notification No. 06/2015-ST dated 01.03.2015 by omitting the said serial number from Notification No. 25/2012. However, the benefit was re-introduced w.e.f. 01.03.2016 vide Notification No. 09/2016 ST dated 01.03.2016. The appellant has rented certain services of construction to Government Departments. Such services enjoyed the benefit of exemption through Notification No. 25/2012 ST(NT). However, for a brief period i.e. 01.04.2015 to 29.02.2015 the benefit was not available. The appellant however filed refund claim only on 08.01.2018 which is evidently after the expiry of the last date - the time limit specified in Section 102 is required to be satisfied for extending the benefit of refund. Since the claim has been preferred beyond the date set out in Section 102, there is no infirmity in the impugned order rejecting such claim. Appeal dismissed - decided against appellant.
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2019 (7) TMI 570
Renting of immovable property Service - appellant rented out shops and showrooms in Jaipur and received rent - period January, 2008 to November, 2010 - HELD THAT:- The appellant does not seriously dispute the liability for payment of service tax. The consideration received by them for renting of shops/ showrooms in Jaipur is liable for payment of service tax under Section 65(105)(zzzz) of the Act - demand alongwith interest upheld. Penalties u/s 78 - HELD THAT:- The lower appellant authority has recorded the fact that confusion prevailed at the relevant time about the liability for payment of service tax on renting of immovable property. Several disputes had arisen regarding this service which came to be settled only with the decision of the Hon ble Delhi High Court in the case of Home Solution Retail India Limited Vs. Union of India [ 2009 (4) TMI 14 - DELHI HIGH COURT ] - All penalties set aside. Appeal allowed in part.
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2019 (7) TMI 569
CENVAT Credit - input services - repairs and maintenance services - denial on the ground that such input services were used by other SSA (Nagaur, Jaisalmer and Barmer) and not by appellant - HELD THAT:- The appellant assessee have got a common PAN no. and is one organisation providing services throughout India. Further, their service tax registration number is similar (PAN based). The assessee is providing various service tax services - For the sake of administrative convenience, they have taken registration in different SSA (areas). However, admittedly they undertake repair and maintenance through their civil and electrical wing, which caters to several SSA s. Further, cenvat credit of service tax / inputs or capital goods, is not confined to the registered premises, but can be availed even if capital goods are received beyond the registered premises for providing output services. The appellant is entitled to credit on capital goods, input services and inputs which are received in one SSA and are distributed to other SSA - Appeal allowed - decided in favor of appellant.
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Central Excise
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2019 (7) TMI 568
Reclassification of Di-Calcium Phosphate under Chapter 28 Heading No.2835 25 00 instead of Chapter 23 Heading No.2309 90 90 of the Central Excise Tariff Act, 1985 - period of November 2011 to January 2014 - HELD THAT:- Indisputably, no fault can be found with the impugned orders passed by the Assistant Commissioner or orders of the Commissioner (Appeals) dismissing the petitioner's appeals. However, the fact that notification has been issued under Section 11C of the Act directing the Officers of the department not to recover the duty on Di-Calcium Phosphate for the period 1st February 2008 to 1st February 2014 which would include the period for which the duty has been confirmed by the two impugned orders. In the face of notification No. 4 of 2016C. E. (N.T.) dated 12th February 2016, the Revenue cannot recover the amounts which have been confirmed by the two impugned orders. However, as yet no recovery proceedings have been taken against the respondent consequent to the two impugned orders and therefore, at this stage, the present petition is premature - At this stage, the petition is not justified as there is no action is taken by the Revenue in the face of notification issued under Section 11C of the Act. Petition disposed off.
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2019 (7) TMI 567
Utilization of CENVAT Credit - utilization of credit for payment of tax on input services, even when Rule 3(4)(e) of Cenvat Credit Rules, 2004 was very much in existence - period prior to 20.06.2012 - import of service under reverse charge basis under section 66A of the Finance Act of 1994 - HELD THAT:- The restriction provided in Rule 5 of the above rules is that the taxable service received from outside India shall not be treated as output services for availment of tax paid on any input services. However, there is no bar to utilizing of cenvat credit already availed to discharge service tax obligation on the import of services on reverse charge basis - This view is further supported by the fact that on 20th June, 2012 the Cenvat Credit Rules, 2004 were amended so as to introduce an explanation which bars utilization of cenvat credit to meet oblilgation of tax on output service on reverse charge basis. No substantial questions of law arise in the present facts - appeal dismissed.
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2019 (7) TMI 566
Refund of excise duty - Time limitation - restoration of exemption after almost 7 months from the date of withdrawing the same earlier - proof that the duty was paid under protest - HELD THAT:- Appellant got the LPG supplies with polybutene from the supplier MRL and paid the excise duty on entire quantity of such supply for the period 01.03.1994 to 23.06.1994, for which short period, the exemption was revoked by the Central Government, which upon representations and protests of the various such Industries including the Respondent/Assessee before us stood finally restored on 24th June 1994 and a specific Notification was later on issued under Section 5A(2) of the Act for the Respondent/Assessee on 24th March 1995 also. Once the restrictions of Section 11B stood relaxed under the orders of the Court by the Revenue, which they chose not to agitate further, denial of refund claim will not be justified. The eligibility of the Respondent/Assessee in the present case to get such refund is also not disputed and a part of the excise duty for the said period has also been made to the Respondent/Assessee in the present case also and therefore, for the limited short period from 01.03.1994 till 15.05.1994, we do not think that the Assessee deserves to be denied the said refund, merely because he chose to file its application for refund on 16.11.1994. We hold this opinion because the present Assessee has also paid the said excise duty for the aforesaid period under protest and the Second proviso of Section 11B of the Act clearly stipulates that the period of limitation shall not apply, where any duty has been paid under protest. Appeal dismissed - decided against Revenue.
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2019 (7) TMI 565
Clandestine removal - grey fabrics - Grey Fabrics received for Job Work was found to be short - 75114 L. Mtrs of Finished MMF was found to be entered in job cards but not in lot register - HELD THAT:- There is no co-relation of the said names with the lot register. The show cause notice has relied upon statement of Shri Gulshan Bhatia wherein he stated that the goods were cleared without payment of duty. However subsequently he retracted his statement - when the statement of Shri Gulshan Bhatia was retracted as having been obtained under pressure the same cannot be relied upon. Even otherwise in absence of cross examination of witnesses, their statements could not have been relied upon - in absence of cross examination of witnesses, no demand can be made against on the basis of statements. Demand of ₹ 2,43,369/- has been made on the ground that a quantity of 75114 L. Mtrs of Finished MMF valued at ₹ 20,28,078/- mentioned in job cards was not found in lot register and same has been cleared illicitly in open market - HELD THAT:- Only on the basis of entries mentioned in job cards which do not match with the lot register, it cannot be said that the said goods shown in the job cards were removed without payment of duty. There is no evidence on record to show that such goods were removed in open market. Reliance has been placed upon the statement of Shri Gulshan Bhatia, which stands retracted. Except recording some statements, no evidence is appearing that the goods were disposed of in the market or if the goods belonging to the merchant manufacturers, when the goods were transported to them and what were the evidences for disposal of such goods. Thus, merely on the basis of statements, a demand cannot be made - If some lot numbers are not found in lot register, the same cannot be inferred to have been removed clandestinely - demand set aside. Demand of ₹ 55,09,868/- made on the basis of private register wherein the fabrics was found to have been entered without lot number - HELD THAT:- The appellant has pleaded that the lot numbers of main one or two parties was shown therein, though it may contain more than two lot numbers. We find that no statement of the Printing master was recorded to ascertain the facts regarding the entries made in the private register. It is coupled with the fact that no corresponding clearances of such register were found. In such case, the private register cannot be made basis for demanding duty from the appellant unit on the ground that it contained details of goods removed without payment of duty - demand set aside. Demand of ₹ 2,43, 369/-has been made against the appellant on the ground that it pertains to the quantity of 65733L.mtrs. of grey fabrics has been found from private register as substitution against the lot numbers found in private register were cleared and processed fabrics of quantity 59159.75 L.Mtrs - HELD THAT:- When the person maintaining such private register has not been interrogated nor his statement has been recorded, in such case, no allegation can be made on the basis of Private Register and no duty can be demanded. The impugned order demanding duty and penalty is not sustainable and is accordingly set aside - Appeal allowed - decided in favor of appellant.
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2019 (7) TMI 564
Refund of unutilized credit - time limitation - refund rejected for having been filed beyond the period of limitation of one year prescribed in section 11B of Central Excise Act, 1944 - N/N. 30/2004-CE dated 9th July, 2004 - HELD THAT:- The original authority has exercised power of dismissal of the application at the threshold by taking recourse to the bar of limitation of time. The claim has been preferred under rule 5 of CENVAT Credit Rules, 2004. The said Rules govern disposition of credit equivalent to duty discharged on raw material, consumables, capital goods and input services procured for, and attributable to, goods that have been exported. That may, or may not, apply to the present dispute. The adjurement of the Hon ble High Court of Karnataka, in UNION OF INDIA VERSUS SLOVAK INDIA TRADING CO. PVT. LTD. [ 2006 (7) TMI 9 - KARNATAKA HIGH COURT] , requiring ascertainment of any other provision under which entitlement to refund may be allowed should also be coupled with it. It would, therefore, be appropriate for us to set aside the impugned order for having to failed to comply with the principles of natural justice and remand the application for refund back to the original authority for necessary action thereon in accordance with the decisions cited. Appeal allowed by way of remand.
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2019 (7) TMI 563
Rebate claim - supplies made to a unit in a special economic zone between July 2008 and August 2008 - denial of the claim for rebate on the ground that the activity does not amount to manufacture and, therefore, not being liable to duties of excise at the time of removal from the factory, could not seek rebate - HELD THAT:- Tribunal in its decision SAIL BANSAL SERVICE CENTRE LTD. VERSUS COMMISSIONER OF C. EX., RANCHI [ 2007 (7) TMI 512 - CESTAT, KOLKATA] , held that once the payment of duty has been accepted, there is no scope for denial of credit pertaining to inputs, input services or capital goods to the manufacturer. It is also seen that the activity of the manufacturer was once deemed to be excisable but had been withdrawn subsequently on 2nd March 2005. It is also noted that the appellant cleared the goods against form ARE-I which was required to be certified by the jurisdictional central excise authorities. There is no allegation that these processes was not complied with; indeed, receipt of the goods in special economic zone are also required to be certified so by endorsement in ARE-I. The appellant is a manufacturer of excisable goods and, in these circumstances, could certainly have entertained the bonafide belief that their activity did amount to manufacture and, hence, not barred from discharge of duty liability on clearances to special economic zone against which rebate, under rule 18 of Central Excise Rules, 2001, was sought. Matter remanded back to the original authority to decide on eligibility for rebate after taking into consideration our decision that the activity itself amounts to manufacture - appeal allowed by way of remand.
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2019 (7) TMI 562
CENVAT Credit - input services - Rent-a-Cab Services - period Apr. 09 to Mar. 11 - HELD THAT:- The issue remains settled by the decisions as relied upon by the learned counsel for the appellant. However, in the case of RAMALA SAHKARI CHINI MILLS LTD. VERSUS COMMISSIONER CENTRAL EXCISE, MEERUT-I [ 2016 (2) TMI 902 - SUPREME COURT] , it was held that the word includes is used to enlarge the meaning of preceding words. The disallowance of credit is unjustified - Credit allowed - appeal allowed - decided in favor of appellant.
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2019 (7) TMI 561
CENVAT Credit - input services - outward transportation of goods upto the buyer s premises - place of removal - HELD THAT:- The purchase orders state that one of the terms and conditions for sale is that the goods have to be delivered at the customer s place understanding that the buyer s premise is the place of removal. The appellants have also included the freight charges in the assessable value while discharging excise duty. As per the decision in COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, AURANGABAD VERSUS M/S ROOFIT INDUSTRIES LTD. [ 2015 (4) TMI 857 - SUPREME COURT] , the place of removal can only be buyer s premises - The Hon ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [ 2018 (2) TMI 117 - SUPREME COURT] has held that credit on outward transportation would be eligible upto the place of removal. In the present case, the place of removal being buyer s premises, the appellants are eligible for credit. The disallowance of credit is unjustified - appeal allowed - decided in favor of appellant.
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2019 (7) TMI 560
Maintainability of appeal - appropriate forum - issue which pertained to Notification No. 50/2003-CE dated 10.06.2003 - HELD THAT:- The Hon ble Supreme Court in PARVATIYA PLYWOOD PVT. LTD. VERSUS UNION OF INDIA AND ORS. [ 2017 (9) TMI 1828 - SC ORDER] has granted the leave and the matter is sub judice. Both sides have agreed that without the final verdict of the Hon ble Supreme Court, the present appeal cannot be decided. Also the present appeal is against the order passed by the Joint Commissioner of Central Excise, and the appeal against such order lies with Commissioner (Appeals) in terms of Section 35 of Central Excise Act, 1944 only not before the Tribunal. Liberty is granted to the assesseeAppellants to re-agitate the issue after having the final verdict from the Hon ble Supreme Court within the prescribed time, if advised so - Appeal disposed off.
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2019 (7) TMI 559
CENVAT Credit - input services or not - house-keeping services - services for member facilitation charges - Services received for representing anti dumping duty etc., - denial on account of nexus - period April, 2013 to September, 2015 - Extended period of limitation - HELD THAT:- Various precedent decisions have held the involved services as cenvatable - Reference can be made to Tribunal decision in the case of M/S. UNIWORTH TEXTILES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE. RAIPUR [ 2013 (1) TMI 616 - SUPREME COURT] laying down that cleaning services as well as legal services and management services are cenvatable - in the case of Commissioner of C. Ex., Delhi-III vs. Maruti Suzuki India Limited [ 2015 (10) TMI 113 - CESTAT NEW DELHI ] housekeeping services have been held to be cenvatable inasmuch as cleanliness is to be maintained for ensuring health surrounding and working condition of the employees. Hon ble Bombay High Court in the case of Commissioner of C. Ex., Nagpur vs. Ultratech Cement Ltd., [ 2010 (10) TMI 13 - BOMBAY HIGH COURT ] has observed that the scope of definition of input services is very wide and the same covers not only services used directly or indirectly in or in relation to manufacture of final product - Inasmuch as the involved services have been utilised by the appellant for conducting their business, they are required to be held as cenvatable. Extended period of limitation - HELD THAT:- The demand for the period April, 2013 to September, 2015 stands raised by the show cause notice dated 28.01.2016 and major part of the same is barred by limitation. The issue being a bonafide issue of interpretation and the credit having been availed by reflecting the same in the RG-23-A Part-I Part-II, no malafide can be attributed to the appellant, in the absence of any evidence to the contrary - demand is barred by limitation. Appeal allowed on merits as well as on limitation.
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2019 (7) TMI 558
Valuation - transaction value - place of manufacture versus place of removal - inclusion of cost of services rendered by the appellant at the quick matching centre as well as the packing surcharge recovered from customers on clearance from the quick matching centre, in assessable value - printing ink manufactured at their various factories are brought to the quick matching centre (QMC) at Lower Parel, Mumbai on stock transfer and, after manually inter-mixing of concentrates and additives to cater to the customized requirements of printers, are dispatched to the customers. HELD THAT:- The provisions of section 4(3)(c) and 4(3)(d), which are definitions, are not a substitute authority for imposing duties or computing assessable value for determination of liability. They are intended to be superimposed on the corresponding words in section 4(1) of Central Excise Act, 1994 for ascertaining conformity of the transaction with scope for accepting the transaction value before resort to one or the other of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. In the absence of invoking of such provision, in the show cause notice or reference to in the orders of the authorities below, we are unable to consider the submission made by Learned Authorised Representative - the differential duty liability and interest thereon have been duly discharged. Penalty - HELD THAT:- In the light of the faultlines that have surfaced, the inability of the competent authorities to isolate the breach that would lead to invoking of the alternative value, the discharge of duty liability before the issue of show cause notice and the absence, in the show cause notice, of any reference to, or evidence of, the ingredients that justify the invoking of the penal provisions in section 11AC of Central Excise Act, 1944, the imposition of penalty is without authority of law. Appeal allowed in part.
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2019 (7) TMI 557
CENVAT Credit - cement returned back in the damage condition - period January, 2011 to August, 2014 - HELD THAT:- The Deputy Chief Chemist has dealt with the damaged cement relating to some other company, and therefore, the report in relation to some other company cannot be applied on the facts of the appellant s case. Credit allowed - appeal allowed - decided in favor of appellant.
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2019 (7) TMI 556
CENVAT Credit - paper/fake transactions - credit denied on the ground that it is mere a paper transaction as they have not received the goods - HELD THAT:- No discrepancy was found during the course of investigation, neither the Revenue has proved that if the invoices did not accompany the goods/ raw material then from where the appellants had procured the raw material for manufacturing their final goods which have been cleared on payment of duty. Moreover, no investigation was conducted at the end of the transporters to find out the truth. Merely on the basis of the invoices issued by the supplier, demand cannot be confirmed against the appellants. Therefore, the benefit of doubt goes in the favour of the appellants - Credit allowed - appeal allowed - decided in favor of appellant.
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2019 (7) TMI 555
Clandestine manufacture - TMT bars - excess manufactured goods which are not accounted for in the statutory records - confiscation - redemption fine - penalty - HELD THAT:- TMT bars were found in excess lying in their stock without entering in the statutory records manufactured by the appellant. Therefore, due to non maintenance of proper records, the goods are liable for confiscation under Rule 25 of the Central Excise Rules, 2002 - the goods rightly confiscated by the authorities below. Redemption fine - penalty - HELD THAT:- The redemption fine of ₹ 6.50 lakh imposed on the goods is on the higher side, therefore, the redemption fine is reduce to ₹ 4 lakh - penalty is reduced to ₹ 75,000/-. Appeal allowed in part.
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CST, VAT & Sales Tax
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2019 (7) TMI 589
Maintainability of appeal - pre- deposit or not - second proviso of Section 19 and proviso of Section 21 (2) of the APGST Act, 1957 or second proviso of Section 31 and proviso of Section 33 (2) of the AP VAT Act, 2005 - rejection of appeal on the ground that the appellant-assessee had failed to comply with the precondition of producing proof of payment of tax admitted to be due or of such installments as may have been granted and/or the proof of payment of twelve and a half percent (12.5%) of the difference of the tax assessed by the assessing authority and the tax admitted by the appellant for the relevant assessment year in respect of which the appeal has been preferred by the concerned appellant-assessee - proviso is not a provision of pre-deposit at the stage of filing, institution or presentation of the appeal as such; but is a provision stipulating payment of tax dues as a prerequisite or sine qua non for consideration of appeal on merits or otherwise and/or for condonation of delay in filing the same, as the case may be. HELD THAT:- The first proviso in the concerned Section (Section 19 and Section 31, as the case may be) pertains to limitation period for filing of an appeal; and discretion of the Appellate Authority to condone the delay in filing of such appeal, up to a maximum period specified therein. Indeed, the second proviso is part of the same Section. However, it is an independent condition and in one sense, mutually exclusive condition mandating or enjoining the appellant to produce proof of payment of tax dues in respect of which the appeal is preferred. That obligation can be discharged until the appeal is considered for admission and/or condonation of delay in filing of the appeal, as the case may be, by the Appellate Authority for the first time. We are conscious of the fact that the first proviso pertaining to maximum period of delay to be condoned by the Appellate Authority, also uses the expression admit the appeal . That expression admit , however, must be read to mean filing, institution or presentation of the appeal in the office of the Appellate Authority. Whereas, the expression admitted used in the second proviso will have to be construed as analogous to expression entertained . We are inclined to take this view as the setting in which the provisions under consideration appear leaves no manner of doubt that it is ascribable to the event of taking up the appeal for consideration, for the first time, to admit it on merits or otherwise and/or for condonation of delay in filing the appeal, as the case may be. Before that event occurs, it is open to the appellant to deposit the tax dues in respect of which the appeal is preferred and produce proof of such deposit before the Appellate Authority. Reverting to the factual position in the appeals under consideration, admittedly, the appellant-assessee had deposited the specified tax dues before the date on which appeal preferred by them was taken up for consideration for the first time for admission on merits. In such a situation, the stated proviso becomes unavailable to reject the appeal on the ground of institutional defect. In this view of the matter, all these appeals must succeed. We hold and direct that the Appellate Authority shall be obliged to take up every singular appeal for consideration for admission on merits and/or for condonation of delay in filing the appeal for the first time, no later than thirty days from the date of its filing, institution or presentation in the office of the Appellate Authority. This direction shall be complied with by all concerned meticulously, without any exception. Appeals shall stand restored to the file of the Appellate Authority.
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2019 (7) TMI 588
Stay of the operation, implementation and execution of the order - Refund alongwith interest - HELD THAT:- There are no further developments so far as the SLPs, which are pending before the Supreme Court, are concerned. According to Ms.Mehta, the State has also not been able to obtain any interim order from the Supreme Court. Ms. Mehta, once again prays for time. For one last time, we are adjourning this matter. Post this matter after 3 weeks.
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2019 (7) TMI 554
Input tax credit - non-availability of 'Tax Deduction at Source' credit particulars - TDS made by Chennai Corporation for the work done by writ petitioner for Chennai Corporation - non-production of TDS certificates - HELD THAT:- In the impugned orders in at least one of the impugned orders pertaining to Assessment Year 2012-13, there is more than one error in giving the TIN number of the writ petitioner - In paragraph 1 it has been given as 338314262589, in paragraph 2 it has been given as 33831462589 and in the concluding paragraph it has been given as 3383462589. While in paragraph 1, it has 12 digits, in paragraph 2 it has 11 digits and in concluding paragraph it is 10 digits. This Court is informed that this is a typographical error. Though obvious, these typographical errors will also have to be corrected when the assessment is done afresh pursuant to this order. The impugned orders are set aside on the sole ground that the credit particulars of TDS certificate have been sought for by the sole respondent, after the impugned orders - no opinion or view is expressed by this Court on the merits of the matter.
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2019 (7) TMI 553
Validity of revised assessment orders - best judgment method - it is the stated position of writ petitioner that writ petitioner has effected only Intra-State sales in the two relevant Assessment Years, whereas, the impugned assessment orders, on appreciation of material, has come to a different conclusion i.e., that there has been inter state sale - econd ground that has been urged is that lone respondent in making the impugned assessment orders, has taken into account the income tax records for making the best judgment method assessment and according to learned counsel for writ petitioner, this is impermissible - third ground of attack is that the impugned orders are such that the respondent has not applied his mind independent of the proposal given by the Enforcement Wing Officials - principles of natural justice. HELD THAT:- On the teeth of the obtaining position that Enforcement Wing proposals are approved by Joint Comm i ssioner, this Court has held that the Assessing Officer should independently apply his/her mind. This leads us to the inevitable sequitur that principle is to the effect that even though the Enforcement Wing Official's proposal is approved by Joint Commissioner, an authority much below the rank of Deputy Commissioner for that matter below the rank of even the Assistant Commissioner viz., a Commercial Tax Officer (CTO) would apply his mind independently and come to a conclusion by going through the proposal of Enforcement Wing Officials on one side and objections of the dealer on the other. Alternate remedy - HELD THAT:- It is not a rule of compulsion, but it is a rule of discretion. Though it is a rule of discretion, Hon'ble Supreme Court in Satyawati Tandon Case [United Bank of India Vs. Satyawati Tondon and others [2010 (7) TMI 829 - SUPREME COURT] has held that when it comes to matter pertain to Taxes, CESS, Revenue etc., the rule of alternate remedy has to be applied with utmost rigour - it is a fit case to relegate the writ petitioner to the alternate remedy of an appeal to the jurisdictional Deputy Commissioner or in other words, Appellate Deputy Commissioner having jurisdiction. If writ petitioner, chooses to avail the alternate remedy all the conditions for pursuing an appeal will operate and apply. If there is any delay in preferring the appeal, it is open to the writ petitioner to seek condonation, besides seeking exclusion of time spent in the instant writ petition by applying Section 14 of Limitation Act. If the writ petitioner makes such a plea/prayer for condonation and/or exclusion of time under Section 14 of Limitation Act, the Appellate Authority shall deal with the same and decide such prayers/pleas on their own merits. Petition dismissed.
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2019 (7) TMI 552
Concessional rate of tax - purchase of High Speed Diesel Oil for use in generation and distribution of electricity and other forms of power - petition could not download the 'C' forms - HELD THAT:- In the case of M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) [ 2018 (10) TMI 1529 - MADRAS HIGH COURT] , this Court allowed the writ petitions filed by the assessees and directed the Revenue to permit the petitioners dealers to download 'C' forms. There is no disputation or disagreement that the instant writ petition falls clearly within the four corners of Ramco Cements order - it follows as a natural sequitur that the instant writ petition stands allowed. Petition allowed.
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2019 (7) TMI 551
Maintainability of appeal - alternative remedy - revision of assessment - Best Judgement assessment - HELD THAT:- In the instant case, there is no disputation or disagreement that there is alternate remedy and it is nobody's case that it is not efficacious or ineffective. In other words, it is nobody's case that alternate remedy is ineffectual or not efficacious. Therefore, this Court is of the considered view that this is a fit case to relegate the writ petitioner to alternate remedy. This Court has also reminded itself that this is the second round of litigation at the original authority stage itself. The appellate authority under Section 51 of TNVAT Act is also an authority which can deal with facts and therefore, all questions that are raised by writ petitioner in the instant cases are left open for writ petitioner to be raised before the appellate Authority and the Appellate Authority can examine the matter on facts and on the merits of the grounds raised therein. To be noted, this is in the light of the language in which the appeal provision i.e., Section 51 of TNVAT Act is couched. Time frame for filing appeal - HELD THAT:- If there is any delay, it is open to the writ petitioner to seek condonation of delay as well as exclusion of time spent in the instant writ petition by relying on Section Section 14 of Limitation Act. If the writ petitioner makes such pleas/prayers for condonation of delay and/or exclusion of time spent in the instant writ petition by placing reliance on Section 14 of Limitation Act, such pleas/prayers of writ petitioner shall be dealt with by the Appellate Authority on their own merits. Petition dismissed.
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