TMI Tax Updates - e-Newsletter
July 28, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
Reopening of assessment u/s 147 - third proviso - computation of period of limitation - the said proviso does not in any manner extend the period within which action under Section 147 of the Act can be initiated by the Department. It merely empowers the AO to assess or reassess such income, which is not involved or is the subject matter of any appeal, reference or revision, and has escaped assessment. It does not grant any further extension of time to the Department to initiate a proceeding u/s 147 of the Act. - HC
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Income Tax:
Revision u/s 264 - computation of income from capital gains - Although, there is a detailed discussion with regard to the nature of the transaction, as to whether it is a transfer or not, we find there is no application of mind as to whether the subject lands are capital asset or not. We reiterate that unless the subject matter of transfer are capital assets, there cannot be any demand under Chapter-IV of the Act. Therefore, the assessees herein preferred a revision under Section 264 of the Act. - AO directed to consider the claim of the assessee - HC
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Income Tax:
Reopening of assessment u/s 147 - no original assessment order in the case of the assessee passed - Even assuming for the sake of argument that if an intimation under Section 143(1) of the Act is considered to be an order of assessment, in the subsequent re-assessment proceeding, the original assessment proceeding get effaced and the AO was required to consider the proceeding de novo and to consider the claim of the assessee. - HC
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Income Tax:
Disallowance of the interest expenditure on the loan taken by the assessee - The transactions are driven by business considerations and are part of the commercial expediency, we are of the considered opinion that the disallowance of interest expense on loan taken for purposes of business and against which interest income has been earned and offered to tax is unwarranted and the same qualifies to be allowed u/s.36(1)(iii)/S.37(l). - AT
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Income Tax:
Taxability of income received from re-insurance business in India - since SRSIPL is not a PE of the assessee, the profits earned from re-insurance business cannot be brought to tax in India in terms of Article 7 of India Switzerland DTAA. Accordingly, addition is deleted. - AT
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Income Tax:
The concept of protective assessment also becomes important in a situation where the addition on substantive basis is deleted and in such an event, protective assessment shall change its colour by becoming substantive assessment. Had there not been such protective assessment, then assessment with respect to such person (protective assessment) would have become barred by time. - The protective assessment framed by the AO without making the substantive assessment is not sustainable. - AT
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Customs:
Seeking registration of scrips - benefit under Merchandise Exports from India Scheme (MEIS) - The exports are thus, by the petitioner through DHL to a destination abroad - The role of DHL in this transaction is that of a warehouse and nothing more. The concept of 'ship to' and 'bill to', as used in this case, has been recognised under the GST regime, as commercial compulsions dictate, that transactions are to be structured in the most economical and least cumbersome manner in terms of time, procedure and expense involved. - The interpretation put forth by the petitioner is accepted, the impugned order is set aside and this Writ Petition allowed - HC
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Customs:
Refund of excess amount of tax - import of RBD Palm Oil - there is no dispute that the Notification was uploaded in the official website on 6-3-2018. Therefore, the rate of duty, as was in existence prior to the said publication of the Notification No. 29/2018-Customs, dated 1-3-2018 in Notification No. 50/2017-Customs, dated 30-6-2017, was applicable for assessment of the Bill of Entry No. 5409602, dated 1-3-2018. - HC
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Indian Laws:
Dishonor of Cheque - non-CTS-2010 cheque - valid cheque or not - the circular of the Reserve Bank of India shows that the banking channels, based on the digital signature in the form of Magnetic Ink Character Recognition (MICR), would be in a position to distinguish a non-CTS-2010 cheque from a CTS-2010 cheque. The Court, appreciating an issue u/s. 482 of the Code of Criminal Procedure, would not be justified in giving a decision one way or the other as to the nature of the cheque, which is put in issue by the parties as the same has to be established only at the time of trial by adducing oral and documentary evidence. - HC
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Indian Laws:
Dishonor of Cheque - suit barred by limitation or not - According to Section 19 of the Indian Limitation Act, when the defendant made payment on account of the cheque before the expiration of prescribed period, a fresh period of limitation shall be computed from the time when the payment was made. Therefore, it is clear that when the defendant issued four post dated cheques and thereby acknowledged the amount due to the plaintiff. The Limitation starts from the date of instrument irrespective of the fact that the defendant issued four post dated cheques. - HC
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Service Tax:
Classification of services - GTA services or not - cartage Challan - Such carting Challan is not equivalent to a consignment note which is issued by the transporter. The consignment note is a negotiable instrument and the transporter is bound to deliver the goods to bonafide holder of title, as mentioned in the consignment note. Such element of ‘consignment note’ are absent in the ‘carting Challan’. - AT
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Central Excise:
Condonation of delay of 107 days in filing the appeal - The delay of 107 days is not inordinate for the 1st respondent/Appellate Authority to dismiss the appeal as the precious rights to agitate the issue arising out of the order passed by the 2nd respondent/Commissioner of Customs and Central Excise, Salem cannot be denied to the petitioner unless there is an inordinate delay which has not been answered properly and condonation of the delay will cause prejudice to the interests of the Revenue. - HC
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VAT:
Classification of goods - powder quoting material - The product namely powder coating material is primarily composed of 'Epoxide Resins' or 'Polyester Resins' and additional items are merely additives. Therefore, in terms of Rule 3(b) of General Rules of Interpretation, the classification shall be determined on the basis of 'Epoxy Resin' or 'Polyester Resin'. - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (7) TMI 1037
Maintainability of petition - sufficient time was not afforded to the petitioner to represent his case - ex-parte order - principles of natural justice - HELD THAT:- This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, it is opined that the order is bad in law. Here is violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case - also the order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences.
Petition disposed off.
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2021 (7) TMI 1033
Maintainability of petition - sufficient time was not afforded to the petitioner to represent his case - ex-parte order - principles of natural justice - HELD THAT:- This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, it is opined that the order is bad in law. Here is violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case - also the order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences.
Petition disposed off.
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Income Tax
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2021 (7) TMI 1025
Assessment u/s 153A - absence of any incriminating material found in search - HELD THAT:- Hon’ble Delhi High Court in case of CIT(A) vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] held that no additions to be made in assessment framed u/s 153A of the Act in the absence of any incriminating material, their assessment were not abated. In the present AY 2009-10, the return was filed on 12th November, 2009 and the due date of issuing of notice u/s 143(3) is 30th September, 2009 the date of search is 9/5/2012 and date of filing of return post search is 10/09/2013. It can be observed that no proceedings were pending on the date of search for Assessment Year 2010-11.
The date of filing original returns u/s 139(1) was on 6/8/2010, the date of search was 9/5/2012. The return filed u/s 153A was on 10/9/2013 and due date of issuance of notice was 30th September, 2010. As the date of search is 9/5/2012. Thus, in Assessment Year 2010-11 as well no proceedings were pending as on the date of search.
Applicability of decision in case of Kabul Chawla is relevant in the present case as no incriminating material was found and there is no mention in the assessment order as well as in the order of the CIT(A) relating to the reliance of any material for making specific addition in the assessment. Thus, assessment itself becomes void ab initio. In result, both the appeals of the assessee are allowed.
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2021 (7) TMI 1024
Reopening of assessment u/s 147 - non-disclosure of loan given by the assessee to his wife Smt. Sulochana for purchase of agricultural land - whether the AO can limit his powers to assess income which is escaped from tax on the basis of reasons recorded for reopening of assessment or he could further proceed to any other income which is escaped from tax and which has subsequently came to his knowledge during the course of reassessment proceedings or not? - HELD THAT:- In this case, on perusal of facts available on record, it is abundantly clear that the AO has formed reasonable basis of escapement of income for taxing income escaped assessment on account of non-disclosure of money lent by the assessee to his wife for purchase of agricultural lands. However, in the reassessment proceedings, the AO has accepted the explanation of the assessee regarding money lent by the assessee to his wife and has not made any addition, but he has made addition towards profit deriving from sale of lands under the head ‘income from business or profession’ as against income declared by the assessee under the head ‘income from capital gains’ but said addition is not part of reasons recorded for reopening of assessment. Therefore, we are of the considered view that the reasons for reopening of assessment is fails and hence, the AO is not permitted to assess any other income which has escaped from tax and come to his knowledge subsequently during the course of reassessment proceedings.
Therefore, we quash reassessment order passed by the AO. - Decided in favour of assessee.
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2021 (7) TMI 1023
Assessment of trust - depreciation on assets whose cost has been allowed as application of income to charitable purpose u/s.11(1)(a) - HELD THAT:- Hon’ble Supreme Court in the case of CIT v. Rajasthan and Gujarati Charitable Foundation [2017 (12) TMI 1067 - SUPREME COURT] where after considering the amendment in section 11(6) of the Act, by the Finance Act, 2014 held that the assessee is entitled to depreciation u/s. 32 of the Act on assets whose cost has been allowed as application to charitable purpose. The court further observed that once the assessee is allowed depreciation, it shall be entitled to carry forward depreciation as well.
The Hon’ble Karnataka High Court in the case of Pr.CIT (Exemptions) vs. Shushrutha Educational Trust [2018 (12) TMI 329 - KARNATAKA HIGH COURT, had considered an identical issue and by following the decision of the Hon’ble Supreme Court in the case of CIT v. Rajasthan and Gujarati Charitable Foundation held that charitable institutions are entitled to depreciation on assets whose cost has been allowed as application of income. The court further noted that excess application of income for charitable purpose can be carry forward to subsequent years and further set-off against income of the trust in the subsequent years.
Thus we are of the considered view that the AO as well as the ld.CIT(A) were erred in not allowing depreciation on assets and further carry forward of excess application of income to subsequent years. - Decided in favour of assessee.
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2021 (7) TMI 1022
Penalty u/s 271(1)(c) - Defective notice u/s 274 - non specification of charge - whether penalty proceedings had been initiated i.e., whether for concealment of particulars of income or for furnishing of inaccurate particulars ? - HELD THAT:- In PCIT vs. Sahara India Life Insurance Company Limited case [2019 (8) TMI 409 - DELHI HIGH COURT] upheld the view taken that the notice issued by the learned Assessing Officer would be bad in law if it did not specify under which limb of section 271(1)(c) of the Act the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or for furnishing of inaccurate particulars thereof.
AO to assume jurisdiction u/s 271(1)(c), proper notice is necessary and the defect in notice u/s 274 of the Act vitiates the assumption of jurisdiction by the learned Assessing Officer to levy any penalty. In this case, facts stated supra, clearly establish that the notice issued under section 274 read with 271 of the Act is defective and, therefore, we find it difficult to hold that the learned AO rightly assumed jurisdiction to pass the order levying the penalty. As a consequence of our findings above, we direct the Assessing Officer to delete the penalty in question. Appeal of assessee is allowed.
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2021 (7) TMI 1021
Unsecured creditors - Addition u/s 68 - Flow of funds inter se the group concerns - loans from directors - Money circulated from one concern to other - HELD THAT:- Why the assessee discharged its obligation to M/s. Modsal Frozen Foods Pvt. Ltd. and why the assessee accepted loan from one of its directors need not be enquired by the Assessing Officer. Suffice it to record that the amount is neither tainted nor unaccounted. It is only the accounted money of the assessee that is used for the purpose of discharge of obligation. Therefore, it cannot be said that the amount paid to M/s. Modsal Frozen Foods Pvt. Ltd. is unaccounted money and on the same analogy amounts in the hands of Mohd. Sayed which was given as loan to the assessee cannot be unaccounted money.
In the same way, in so far as Mohd. Naeem is concerned, he is also having inter-banking account with the assessee, M/s. Modsal Frozen Foods Pvt. Ltd. and Modern Enterprises - There is no adverse comment on these accounts of any of these entities. It is not the case of Revenue that whatever the amounts that have been credited in the bank accounts of assessee were raised from any third person other than the group concerns. Further by filing the statement of account of Mohd. Naeem with the bank of Baroda and also with M/s. Modsal Frozen Foods Pvt. Ltd. as well as Modern Overseas Pvt. Ltd., it was established that all the money that is circulated inter se the group concerns is that accounted money well reflected in the books and no any funds other than the withdrawals from the group concerns is found to have been deposited by Mohd. Naeem.
Coming to Mohd. Saleem, there is no dispute that for the assessment year 2013-14, he declared an income of ₹ 9,09,008/- and for the current assessment year, it was ₹ 9,83,643/-. This declared sum is much more than the deposit of ₹ 5.55 lacs and even according to the Assessing Officer, there were deposits in cash only to the extent of ₹ 1,48,400/-. In these circumstances, it cannot be said that the unaccounted money of the assessee to the tune of ₹ 1,48,400/- travelled back to the assessee through Mohd. Saleem.
Thus the flow of funds inter se the group concerns properly explains the creditworthiness of the creditors and there is no reason to suspect the business transactions which are recorded in the books. Hence, we are of the considered opinion that the identity of the creditors, their creditworthiness and genuineness of transactions are not in doubt and are properly explained - Decided in favour of assessee.
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2021 (7) TMI 1020
Disallowance of the interest expenditure on the loan taken by the assessee - HELD THAT:- In this case, while the loan was granted to a third-party real estate developer M/S. ABW Infrastructure with strategic intent, the loan per se was for the purpose of earning interest income in terms of Agreement for effective and secured deployment of interest-bearing funds, which did not result in acquiring any controlling interest in M/S. ABW Infrastructure.
In the absence of any finding that the loan from M/s. OIPL on which interest expense has been incurred, was used for personal purposes of the assessee, keeping in view the proximity of time in obtaining loan from OIPL for the immediate necessity of meeting the expenditure for conversion of land uses and also other business prospects, and in lending the idle funds to M/s M/S. ABW Infrastructure for the purpose of earning of interest on the idle funds at the same rate of interest at which the loan was obtained.
The transactions are driven by business considerations and are part of the commercial expediency, we are of the considered opinion that the disallowance of interest expense on loan taken for purposes of business and against which interest income has been earned and offered to tax is unwarranted and the same qualifies to be allowed u/s.36(1)(iii)/S.37(l). We find equal strength in the argument of the ld. AR and hold that even in the alternative, such an expense qualifies as a deduction u/s.57(iii) against the interest income offered to tax, being an expenditure incurred in relation to earning of the said income as the loan was taken from M/s. OIPL and then given to M/S. ABW Infrastructure. - Decided in favour of assessee.
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2021 (7) TMI 1019
Deduction u/s 80HHB when no separate books in respect of foreign project were maintained - HELD THAT:- As decided in own case [2021 (3) TMI 1230 - ITAT BANGALORE] Tribunal noticed that though separate books of accounts were not maintained separate accounts were maintained in respect of each foreign project and audit certificates in Form No.10CCAH have also been furnished in respect of each project. In these circumstances, we are of the view that the decision rendered by the Tribunal in assessee’s own case for the earlier Assessment Years on identical ground would apply and therefore the assessee cannot be denied the benefit of deduction under section 80HHA of the Act on the ground that separate books of accounts were not maintained for the foreign projects.
Nature of expenses - claim of expenses towards entrance and the subscription fees paid by the assessee to clubs - HELD THAT:- The law is well settled that entrance fee and membership fees paid where the employees become members is allowable as a business expenditure and was allowed as deduction in Assessee’s own case in AY 1999-2000. When membership of a club is taken in the name of director, it is for the assessee-company to prove that membership was obtained solely for the purpose of business.
Entrance fees paid towards corporate membership of the club is an expenditure incurred wholly and exclusively for the purpose of business and not towards capital account as it only facilitates smooth and efficient running of a business enterprise and does not add to the profit earning apparatus of a business enterprises and accordingly CIT (A) was justified in deleting the disallowances of entrances fee made by the Assessing Officer.M/S. BANK OF AMERICA SECURITIES (INDIA) PVT. LTD. [2010 (9) TMI 1084 - ITAT MUMBAI] - Again, Corporate membership fees payable to club is revenue exp.
R & D expenditure u/s 35(1)(iv) when the activity claimed to be the R & D activity is part of normal business of the assessee - HELD THAT:- At the time of hearing, it was brought to our notice that identical issue was decided by the Hon’ble Karnataka High Court in the case of Tejas Network Ltd. [2015 (4) TMI 1064 - KARNATAKA HIGH COURT] and it was held that where assessee claimed deduction under section 35(2AB) pursuant to certificate issued by prescribed authority, i.e., Department of Scientific & Industrial Research (DSIR), approving such claim, AO could not have denied weighted deduction under section 35(2AB) in respect of scientific expenditure. It was held that Assessing Officer cannot sit in judgment over report submitted by prescribed authority . It was held that where Assessing Officer does not accept claim of assessee made under section 35(2AB), he should refer the matter to Board, which will then refer question to the prescribed authority. In view of the aforesaid decision, we are of the view that there is no merit in ground No.4 raised by the Revenue.
Claim of expenses on the basis of purchase of packing materials, loose tools and consumables in the year of purchase - CIT-A deleted the addition - HELD THAT:- As decided in own case Assessing Officer rejected account books of assessee and made certain addition to his income. The Tribunal held that:- (i) it was not case of revenue that purchases as debited as on 31-3-2005 were not genuine, and (ii) assessee was following a consistent method of valuing closing stock by including packing material as consumed at time of purchase. Rejection of account books of assessee and addition to his income was held to be not justified. We therefore uphold the order of CIT(A) on this issue.
Exclusion of the amount of excise duty and sales tax from the 'total turnover' for the purpose of computing deduction under section 80HHC - exclusion of the amount of excise duty and sales tax from the 'total turnover' for the purpose of computing deduction under section 80HHE - HELD THAT:- CIT(A), however, following the decision of the Hon’ble Supreme Court in the case of CIT Vs. Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME COURT] held that the sales tax and central excise duty should not be included as a part of the total turnover while computing deduction under section 80HHC of the Act. In view of the aforesaid decision of the Hon’ble Supreme Court in the case of Lakshmi Machine Works (supra), which has settled the issue, we are of the view that there is no merit in ground Nos. 6 and 9 raised by the Revenue.
Exclusion of amount of deduction allowed under section 80IA from the business profits for the purpose of computation of deduction under section 80HHC if the export divisions have not claimed - HELD THAT:- As we have already observed, the CIT(A) has given the clear finding that none of the export division of the assessee which claimed deduction under section 80HHC of the Act have also claimed deduction on the same profits under section 80IA of the Act. In the grounds of appeal, the Revenue has not disputed this factual aspect. The grievance projected in ground of appeal by the Revenue is that the profits of the 80-IA units will stand included in the business profits of the 80HHC unit and deduction will be computed on the business profits of the 80HHC unit.
Reading of the provisions of section 80IA(9) of the Act would show that the prohibition contained therein is only against inclusion of profits and gains of an industrial undertaking which was claimed and allowed as deduction under section 80IA of the Act being included and allowed deduction under any other provisions of Chapter VI-IA of the Act. Therefore when the deduction under section 80IA has not been claimed on the profits of the industrial undertaking, there was no question of applying the provisions of section 80IA(9) of the Act. In this factual background of the case, we are of the view that the relief allowed by the CIT(A) is in order and does not call for any interference.
Exclude 90% of the 'net interest income' instead of 'gross interest receipts' from the profits and gains of business or profession' to arrive at 'business profit under clause (baa) for the purpose of computation of deduction under sec.80HHC - HELD THAT:- As principle of netting has been recognized by the various decisions of Hon’ble High Courts and has also been affirmed by the Hon’ble Supreme Court in the case of ACG Associated Capsules Vs. CIT [2012 (2) TMI 101 - SUPREME COURT] The principle of netting is however applicable only on the assessee establishing nexus between the interest paid and the interest earned. If such nexus is proved, it is only the net interest that has to be excluded under explanation baa to section 80HHC of the Act.
Disallowance of claim made by the assessee towards write off of advances amount - HELD THAT:- We notice from the explanation furnished by the assessee that the assessee had customs duty concession at the time of importing of certain capital goods under EPCG scheme. It appears that the same was shown as “Receivable” in the books of account, since it had to comply with the condition of meeting export obligations. Since the assessee has not complied with the conditions imposed for getting the above said amount, the assessee chose to write off the above said amount in its books of accounts
We notice that the assessee has furnished explanations before the Ld. CIT(A) and also furnished certain details relating to export benefits. Be that as it may, we notice that the transactions relate to business activities carried on by the assessee and further the explanations furnished by the assessee would show that the same was considered as no longer receivable by the assessee, since it has failed to meet the mandatory conditions. Hence, we are of the view that the above said claim of the assessee is in the nature of business loss incurred in the normal course of the business and hence allowable as deduction.
Disallowance of claim of write off of amount given to NSL - HELD THAT:- there was no business compulsion or commercial expediency vis-a-vis business carried on by the assessee. The Ld CIT(A), in our view, has rightly observed that the advances have been given more as a promoter than as a customer of M/s NSL. The Ld A.R contended that it is imperative for the assessee to maintain its reputation in business circles and hence the assessee has given money to M/s NSL. The said contention may support the assessee as the promoter. However, the question that needs to be answered is whether there was business necessity/compulsion or is there any commercial expediency in given advances to M/s NSL to meet its day to day expenses even when M/s NSL was under liquidation?. In our view, the answer would be negative. The various case laws relied upon by Ld A.R are distinguishable from the facts prevailing in the instant case. Accordingly, we do not find any infirmity in the decision rendered by Ld CIT(A) on this issue in both the years under consideration.
Disallowance u/s 14A - HELD THAT:- As own funds available with the assessee in both the years are in far excess of the value of investments. Accordingly, as per the decision rendered by Hon’ble Karnataka High Court in the case of Micro Labs Ltd.[2016 (4) TMI 219 - KARNATAKA HIGH COURT] no disallowance out of interest expenditure is called for.
Disallowance of repairs and maintenance claimed by the assessee - A.O. noticed that the assessee has incurred repairs & maintenance expenses on the premises taken on lease - HELD THAT:- We notice that the assessee has not furnished break-up details of repairs & maintenance expenses claimed in both the years under consideration. However, it was stated that the expenditure was incurred on wooden partition, false ceiling, panelling, etc. Hence,in the absence of break-up details of expenses, we are not able to give decision. Accordingly, we restore this issue in both the years to the file of the A.O. with a direction to follow the decision rendered in assessment year 2000-01 on this issue, which is extracted above. Accordingly, we set aside the order passed by Ld. CIT(A) on this issue in both the years under consideration.
Computation of deduction u/s 80HHC - while computing profits of business, receipts by way of brokerage, commission, interest, rent, charges or any other receipts of similar nature included in such profits should be excluded to the extent of 90% of the amount so included - HELD THAT:- The Ld CIT(A) accepted the chart prepared by the assessee and correctly held that All the items mentioned in the column 3 of the table are not required to be excluded for computing “profits of business” in terms of clause (baa).
Computation of deduction u/s 80HHE - assessee has submitted in its grounds of appeals that the “miscellaneous income” has been excluded by the A.O. for computing profits of business, even though certain items are not liable to be excluded - HELD THAT:- According to the Ld. CIT(A), the A.O. has included “excise duty and sales tax” in the total turnover and accordingly computed deduction u/s 80HHE of the Act. The Ld. CIT(A) held that the excise duty and sales tax should not be included in total turnover and accordingly directed the A.O. to recompute deduction u/s 80HHE of the Act. Thus, we notice that there is no discussion about the other income by Ld. CIT(A). Similar is the case with AY 2003-04 also.
Accordingly, we are of the view that the impugned ground of the assessee raised in assessment year 2002-03 as well as in 2003-04 does not emanate from the order passed by Ld. CIT(A). Accordingly, we reject the grounds raised by the assessee relating to deduction u/s 80HHE.
Deduction u/s 80IA - A.O. deducted proportionate “head office expenses” while computing deduction u/s 80IA - HELD THAT:- A.O. deducted proportionate “head office expenses” while computing deduction u/s 80IA of the Act and the Ld. CIT(A) also confirmed the same. The Ld. A.R. submitted that this issue has been decided against the assessee in assessment year 2000-01. We also notice that the coordinate bench has decided the issue against the assessee by following the decision rendered in the assessee’s own case in assessment year 1997-98 and 1999-2000.
Deduction u/s 80O - HELD THAT:- We notice that the issue relating to deduction u/s 80O of the Act has been decided against the assessee by the coordinate bench in assessment year 2001-02 by following the decision rendered by the Tribunal in assessment year 1999-2000. There is no material before us in the present AY to take a contrary view. We are also of the view that in view of the aforesaid conclusion, the question as to whether; to claim deduction u/s. 80-O, the person claiming deduction should be the owner of the IPR or not, is academic and therefore does not call for any adjudication in the facts and circumstances of the present case.
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2021 (7) TMI 1044
Faceless Assessment u/s 144B - as argued no prior show cause notice as well as draft assessment order issued - HELD THAT:- As no prior show cause notice as well as draft assessment order had been issued and no hearing had been given before passing the impugned assessment order, there is a blatant violation of principles of natural justice as well as mandatory procedure prescribed in “Faceless Assessment Scheme” and stipulated in Section 144B of the Act.
It is also settled law that an alternative statutory remedy does not operate as a bar to maintainability of a writ petition where the proceeding is carried out in violation of principles of nature justice – like in the present case.
Thus matter is remanded back to the Assessing Officer, who shall issue a draft assessment order and grant an opportunity of hearing to the petitioner by way of Video Conferencing and thereafter pass a reasoned order.
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2021 (7) TMI 1018
Taxability of income received from re-insurance business in India - whether SRSIPL constitutes a PE of the assessee in India so as to bring the business profit of the assessee to tax in India in terms of India-Switzerland DTAA? - HELD THAT:- The issue, whether SRSIPL can be considered as a PE of the assessee in India has arisen time and again before the Tribunal and the Tribunal has consistently decided in favour of the assessee. In fact, the impugned direction of the learned DRP would reveal that though learned DRP was conscious of the fact that the Tribunal has decided the issue in favour of the assessee in assessment year 2010-11; however, since the revenue has filed an appeal against the decision of the Tribunal, learned DRP decided the issue against the assessee just for the sake of keeping it alive.
We decide the issue in favour of the assessee by holding that since SRSIPL is not a PE of the assessee, the profits earned from re5 insurance business cannot be brought to tax in India in terms of Article 7 of India Switzerland DTAA. Accordingly, addition is deleted. These grounds are allowed
Disallowance of long-term capital loss arising from sale of shares - HELD THAT:- Undisputedly, after applying the computational provisions of sections 48 and 49 of the Act to the sale transaction of shares of TTK, long term capital loss arises. Therefore, the assessee is entitled to claim such long term capital loss. As regards the allegation of the assessing officer that assessee had not valued the shares under rule 11UA, we fully agree with the submissions of assessee that rule 11UA is application for valuation of assets specified under section 56(2)(vii), 56(2)(viia) and 56(2)(viid). Therefore, rule 11UA cannot be applied for determining the value of unlisted equity shares for any purpose other than section 56(2) of the Act.
In any case of the matter, the assessee, on its part, has furnished valuation report of an expert determining the value of shares. Whereas, no such valuation has been done by the assessing officer to counter assessee’s valuation. Similarly, the allegation of the assessing officer that the promoter of Vidal Healthcare Services Ltd, Shri Girish Rao was linked to the assessee is wholly irrelevant. Undisputedly, Vidal Healthcare Services Ltd is an independent corporate entity having its own separate identity. It is no way related to the assessee. Therefore, even assuming that Shri Girish Rao at some point of time was an employee of the assessee or somehow related to TTK would not be enough to conclude that the assessee and Vidal Healthcare Services Ltd are related parties.
As regards the allegation of the assessing officer that the assessee has invested in TTK at a premium and thereafter sold the shares at a loss to benefit Warren Buffet’s Hathaway Berkshire, in our view, is totally irrelevant for deciding the issue in dispute. Rather, these allegations vindicate that the assessing officer has allowed his decision making process to be clouded by irrelevant material, presumption and surmises. In view of the aforesaid, we hold that the assessee having incurred long term capital loss in course of a genuine transaction relating to sale of shares, is eligible to claim set off and carry forward of such loss.
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2021 (7) TMI 1042
Reopening of assessment u/s 147 - third proviso - computation of period of limitation - deduction of franchise fee paid by the respondent to M/s Satyam Cineplex Limited was wrongly allowed as it gave an enduring benefit to the respondent and was an expense of capital nature - HELD THAT:- The period of four years has to commence from the date of the decision in the appeal filed by the respondent against the earlier assessment order. For this purpose, he has placed reliance on the third proviso to Section 147 which has been reproduced hereinabove. In our opinion the said proviso does not in any manner extend the period within which action under Section 147 of the Act can be initiated by the Department. It merely empowers the AO to assess or reassess such income, which is not involved or is the subject matter of any appeal, reference or revision, and has escaped assessment. It does not grant any further extension of time to the Department to initiate a proceeding u/s 147 of the Act.
As not disputed before us that for the assessment years 2003-04 to 2009-10 the claim of the respondent stood accepted. Though the learned counsel for the appellant has submitted that each assessment year would give a separate cause of action and decision taken in one assessment year cannot act as a res judicata in the other years, the same would also have a vital bearing in the adjudication of the present appeal. In Commissioner of Income Tax v. Excel Industries Limited [2013 (10) TMI 324 - SUPREME COURT] Revenue cannot be allowed to flip-flop on the issue and it ought let the matter rest rather than spend the tax payers' money in pursuing litigation for the sake of it.
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2021 (7) TMI 1016
Ex parte order of CIT(A) - AO completed assessment in terms of section 144 - Addition u/s 68 - assessee has submitted that there was a change of address whereas the Ld. CIT(A) sent all the notices at the old address and therefore, no compliance could be made before the Learned CIT(A) - HELD THAT:- Looking to the reasonable cause in putting non-appearance before the Ld. CIT(A), we are of the opinion that assessee must be provided one opportunity to explain its affairs. In view of the above facts and circumstances and in the interest of the justice, we set aside the order of the Ld. CIT(A) and restore the matter back to him for deciding afresh. Both the assessee and the Assessing Officer shall be provided adequate opportunity of being heard. In the form No. 36 filed before the Tribunal, the assessee has provided its address as 203, Turab Nagar, Ghaziabad (UP) -201001. In the case of the assessee, insolvency proceedings have been initiated and Sh. Anup Kumar has been appointed as Interim Resolution Professional (IRP)
CIT(A) may serve notice accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
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2021 (7) TMI 1039
Revision u/s 264 - computation of income from capital gains - HELD THAT:- The expression ‘capital asset’ is defined under Section 2(14) of the Act. While defining capital asset under the said provision, agricultural land in India is not included. However, by way of exception, certain agricultural lands are included which are stated in Section 2(14)(iii)(a) or (b) of the Act. Before applying Section 48 of the Act, it is necessary to ascertain whether the subject matter of transfer, namely immovable property or land is agricultural land or not. If it is to be construed to be agricultural land, then the parameters as stipulated under Section 2(14) has to be applied.
In the instant case, we find that the Assessing Officer has not applied the parameters as stipulated under Section 2(14)(iii), inasmuch as either sub-clause (a) or sub-clause (b) would apply. Even while applying the said sub-clauses, there are certain criteria mentioned within the sub-clauses, which have been applied to the subject matter of transfer before demanding tax on capital gains on the transfer of land.
Section 2(47) defines “transfer” in relation to a capital asset. Therefore, there has to be a transfer of a capital asset within the meaning of Section 2(47) of the Act, also before the said tax is attracted.
Hence, if there is (i) transfer and (ii) of a capital asset, as defined under the provisions of Section 2 of the Act, then it would attract Section 48 and other related provisions of Chapter-IV of the Act, for the purpose of raising a demand with regard to ‘capital gains’.
In the instant case, on perusal of the order of the AO, we find that the aforesaid provisions have not been applied to the facts of the case. Although, there is a detailed discussion with regard to the nature of the transaction, as to whether it is a transfer or not, we find there is no application of mind as to whether the subject lands are capital asset or not. We reiterate that unless the subject matter of transfer are capital assets, there cannot be any demand under Chapter-IV of the Act. Therefore, the assessees herein preferred a revision under Section 264 of the Act.
Admittedly, the revision petition was filed in time, as the limitation period is one year from the date on which the order in question was communicated or the date on which the assessee otherwise came to know of it. There is no controversy with regard to the revision petition being belated in the instant case. However, we find that the revisional Authority had to consider the revision in light of the observations we have made above, as the Assessing Officer has not considered the case in that light.
Thus we set aside the order of the revisional Authority - remand the matter to the concerned Assessing Officer to consider the case of the assessee.
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2021 (7) TMI 1011
Disallowance of interest u/s 36(1)(iii) - HELD THAT:- We note that assessee does have its own fund to advance money to the sister concern. However in the interest of Justice we deem it fit to remand to the AO for verifying cash flow statement for relevant period. Assessee is directed to furnish the cash flow statement that would disclose the funds available as on the date of advance to the sister concern. AO shall take a pragmatic approach in accordance with law considering the business exigency in the hands of assessee.Accordingly this ground raised by assessee stands allowed for statistical purposes.
Depreciation claimed on the equipments - AO did not allow sum claimed as depreciation against electrical installations and furniture’s and fixtures on the ground that deduction for electrical installation and furniture fixtures already has been claimed u/s 24(a) - HELD THAT:- We note that the furniture fixtures and the equipments on which the depreciation has been claimed by assessee as an integral part of the rented premises on which standard deduction of 30% is claimed and allowed u/s 24 by Ld.AO. The primary condition as envisaged by Section 32 to claim the depreciation is that the assets should be used for the purposes of assessee’s business which has remained unfulfilled in the present facts before us. Therefore, we are unable to concur with the stand of the Ld.AR, in this regard.
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2021 (7) TMI 1036
Reopening of assessment u/s 147 - no original assessment order in the case of the assessee passed - HELD THAT:- Admittedly, there is no original assessment order in the case of the assessee and it was only an intimation under Section 143(1)of the Act, which cannot be treated to be an order in view of decision of the Supreme Court in Rajesh Jhaveri [2007 (5) TMI 197 - SUPREME COURT]. Therefore, the question of re-assessment of the income of the assessee by the Assessing Officer does not arise. In the proceeding under Section 148 of the Act, it was the first assessment and the same could have been done considering all the claims of the assessee.
Therefore, the decision rendered by the Supreme Court in Sun Engineering Works (P.) Ltd [1992 (9) TMI 1 - SUPREME COURT]had no application to the fact situation of the case. Even assuming for the sake of argument that if an intimation under Section 143(1) of the Act is considered to be an order of assessment, in the subsequent re-assessment proceeding, the original assessment proceeding get effaced and the AO was required to consider the proceeding de novo and to consider the claim of the assessee.
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2021 (7) TMI 1007
Disallowance u/s. 14A - HELD THAT:- As categorically mentioned by the AO that there is no exempt income and by the assessee during the year. In absence of any exempt income the disallowance u/s.14A of the act cannot be made as has been held by the honorable Delhi High Court income in Cheminvest Ltd 2015 (9) TMI 238 - DELHI HIGH COURT - We direct the AO to delete the disallowance u/s. 14A.
Disallowance invoking the provisions of Section 40(a)(ia) - short deduction of tax or non-deduction of tax at source - tax deduction at source is deposited before the due date of filing of the return or not? - HELD THAT:- As given a correct direction if the tax deduction at source is deposited before the due date of filing of the return of income that no disallowance can be made. Otherwise, the disallowance is correctly made. We do not find any infirmity with such direction as it is purely a factual matter, which needs to be verified. Before us no evidences have been produced that the about tax has been deposited before the due date of filing of the returned by the assessee. Therefore we do not find any infirmity in the direction of the CIT - A.
With respect to the claim of the assessee that there is only a short deduction of tax and the disallowance can only be made for non-deduction of tax at source we find that issue squarely covered in favour of the assessee by the decision of the honourable Calcutta High Court in CIT v. SK Tekriwal 2012 (12) TMI 873 - CALCUTTA HIGH COURT However, it is a matter of investigation and verification that whether it is a short deduction of tax or non-deduction of tax at source. For this reason, we set aside the whole issue back to the file of the learned assessing officer with a direction to verify and if it is found that there is a shorter deduction of tax and not non-deduction of tax, the disallowance may be deleted. Accordingly, ground number 5 of the appeal is also allowed for statistical purposes.
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2021 (7) TMI 1006
Unexplained cash deposits in bank account - HELD THAT:- Firstly, in respect of availability of cash from the retail business, the assessee has shown a figure of ₹ 242,110 whereas the AO has computed an amount of ₹ 179,500/- in respect of which no specific contention has been raised before us and hence, the figure of ₹ 179,500/- as so computed by the AO needs to be considered as against figure of ₹ 242,110/-. In respect of drawings, the assessee has shown a figure of ₹ 119500/-, however, no basis has been specified as to how the assessee has determined the said figure where as the AO has returned a finding that given that assessee has salary and other business income, the household withdrawals can be considered as met out of salary income which has not been disputed by the assessee.
Drawings towards household withdrawals are taken at ₹ 144,000/- instead of ₹ 119500/- taken by the assessee. Similarly, in respect of cash flow statement in support of opening cash balance, drawing a similar analogy regarding household withdrawals, the drawings towards household withdrawals are taken at ₹ 108,000/- instead of ₹ 48,000/- for A.Y 2008-09 and ₹ 144,000/- instead of ₹ 66,770/- for A.Y 2009-10 and considering the same, the opening cash balance would come to ₹ 323,635/- instead of ₹ 423,740/- considered by the assessee. Taking the same into consideration, we find that total cash receipts comes to ₹ 34,03,035 and total deposits comes to ₹ 35,90,250/- reflecting a shortfall of ₹ 187,215/- which remain unexplained. Hence, the addition to the extent of ₹ 187,215/- are sustained and remaining addition is hereby directed to be deleted. Appeal of the assessee is partly allowed.
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2021 (7) TMI 1005
Addition u/s 69 on protective assessment - cash deposit was treated as unexplained investment in the hands of the assessee under the provisions of section 69 and therefore the same was added to the total income of the assessee on protective basis - HELD THAT:- There is no provision under the law for making the assessment on protective basis. It is well settled by the judicial precedent that in the interest of the revenue, the protective assessment can be framed. The circumstances arise for making the protective assessment in a situation where the revenue during the proceedings finds that a particular amount of income can be taxed in the hands of the different persons/assessee and the AO is not sure enough about such person in whose hands the income is chargeable to tax.
Where the legal ownership of the income is under suspicion, the AO can resort to make the addition in the hands of 2 persons or more than 2 persons on the basis of protective and substantive basis. But the demand of tax is not enforceable in the case of protective assessment until and unless it changes its shape by becoming substantive assessment.
The concept of protective assessment also becomes important in a situation where the addition on substantive basis is deleted and in such an event, protective assessment shall change its colour by becoming substantive assessment. Had there not been such protective assessment, then assessment with respect to such person (protective assessment) would have become barred by time.
The protective assessment framed by the AO without making the substantive assessment is not sustainable. Hence, the assessee succeeds on this technical ground. As the assessee has succeeded on the technical ground, we do not find any reason to adjudicate the issue raised by the assessee on merit. Hence the grounds raised by the assessee on merit are dismissed.
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2021 (7) TMI 1004
Initiation of Section 158BC proceedings - entries made in assessee’s regular books of account could be made - HELD THAT:- We notice in this factual backdrop that the foregoing issue is no more resjudicata. It is not in dispute that the impugned search had also covered the case of assessee’s family/member Shri Kuldip Singh Bagga. This tribunal’s coordinate bench’s earlier order dt.14-10-2011 for the very block period and search had held that the credits in issue cannot be gone into in block assessment proceedings as the same would only form subject matter of regular assessment proceedings.
Unexplained cash credit - HELD THAT:- Since the Assessing Officer’s remand report dt.02-05-2018 itself verified that assessee’s credits which are recorded in already maintained books of account which could form subject matter of regular and not block assessments as per hon'ble jurisdictional high court’s decision in the very group of cases - Revenue cannot be treated as an aggrieved party when the Assessing Officer’s remand report agrees with an assessee’s contentions.
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2021 (7) TMI 1003
Revision u/s 263 - Framing the assessment u/s. 143(3) - addition on account of RA Bill receipts - HELD THAT:- As perused the observation in the case of CIT vs. Nirma Corporation Ltd. [2008 (2) TMI 373 - GUJARAT HIGH COURT] held that wherein AO adopted one view, merely because commissioner took a different view of matter, it would not be sufficient to permit commissioner to exercise power u/s. 263 unless the view taken by the Assessing Officer is unsustainable in law.
As demonstrated from the detailed submission made by the assessee in the form of revised return of income, reply in respect of notice u/s. 142(1) of the act and other correspondence made during the course of assessment proceedings as elaborated above in this order that no tangible material has come in possession of the AO after framing the assessment u/s. 143(3) - On the other hand, the reopening has been made merely on the basis of material available on record which has been considered by the Assessing Officer at the original assessment stage. After considering the judicial pronouncements referred by the ld. counsel and the material on record, we are of the view that reopening made in the case of the assessee in the absence of tangible material after framing assessment u/s. 143(3) of the Act is not justified as per law therefore we quash the assessment holding that the action of the AO of reopening was without jurisdiction.- Decided in favour of assessee.
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2021 (7) TMI 1032
Reopening of assessment u/s 147 - reopening on two issues one in respect of retention money and the other in respect of difference in profits admitted in the P & L account - HELD THAT:- Reasons furnished for reopening of the assessment dated 18.12.2018 would clearly reveal that incorrect claim and reduced income were identified.
As stated that the issue of retention money was not considered by the AO in the original assessment order. Thus, the reopening of assessment cannot be construed as change of opinion..
This Court is of the considered opinion that once the Department could able to establish that reopening of assessment is made based on the new materials or with reference to the information which were not truly and correctly provided by the assessee at the time of original assessment, then power under Section 147 of the IT Act can be invoked. Amended provision of Section 147 of the IT Act provides wider power to the Assessing Officer to reopen the assessment. Only when the adjudicated issues are sought to be reopened, then alone the Court can form an opinion that the case would fall under change of opinion and not otherwise.
Sufficiency of the reasons cannot be gone into by the High Court in writ proceedings. Once the High Court is able to form an opinion that the issues raised in the reopening proceedings are not adjudicated in the original assessment order, then it is sufficient to confer power on the Assessing Officer to reopen the assessment and the Department must be allowed to proceed with further action as contemplated under the statute.
These being the principles to be followed in the present case, the non-adjudication of retention money is unable to be disputed by the petitioner/assessee in the present case.
Petitioner could not be able to establish that the retention money stated above was adjudicated by the Assessing Officer during the original assessment. This being the factum established, there is no reason to consider the case of the writ petitioner - Decided against assessee.
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Customs
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2021 (7) TMI 1027
Classification of imported goods - aircraft engine along with engine stand as parts of aircraft - goods imported into the country or shifted from Delhi to Bangalore? - to be classified under CTH 8803 30 00 or would be CTH 8411 12 00 for Aircraft Engine and CTH 7326 19 90 for Engine Stand - applicability of Sl. No. 346D of Notification No. 21/2002-Cus., dated 01.03.2002 / Sl. No. 454 of Notification No. 12/2012-Cus., dated 17.03.2012 or otherwise? - sustenance of demand without reviewing/challenging the assessment in the Bills of Entry - extended period of limitation - penalties - interest - confiscation of goods.
Whether the goods are to be treated as imported into the country or shifted from Delhi to Bangalore as claimed by the appellants?. If so, whether they are eligible for the benefit of notification no. 94/96- Cus dated 16.12.1996? - HELD THAT:- In order to avail the benefit under any notification, the appellants are required to establish the bona fides by following the proper procedure; there was no reason as to why the goods were not declared to be for re-import purposes at the time of loading in Delhi; the appellants would have given proper intimation/declaration to the department so that the department could have carried out the necessary examination/investigation. The facts of the case do clearly indicate that the appellants have filed a shipping bill while loading the goods at Delhi; at the time of movement from Germany to Bangalore and have also filed a bill of entry at Bangalore without making any reference to the intent of re-import etc. - there are no hesitation whatsoever to hold that the impugned goods are not eligible for exemption contained in terms of notification 94/96.
Whether the impugned goods be treated as 'parts of aircraft' and whether the appellants claim of benefit of exemption under notification no. 21/2002-Cus dated 01.03.2002(S1.No.346D) and notification No. 12/2012-cus dated 17.03. 2012 (SI. No. 354) is proper? - HELD THAT:- The learned commissioner has correctly held that the impugned goods i.e. 'aircraft engines' and 'engine stands' are not eligible for the benefit of Customs Notifications No.21/2002-Cus dated 01.03.2002 (Sl. No.346D) and No.12/2012 dated 17.3.2012 (Sl.No.454) and Central Excise Notifications No.6/2006-CE dated 01.03.2006 (Sl. No.545) and Notification No.12/2012-CE dated 17.3.2012 (Sl.No.303) and Notifications No. 20/2006-Cus dated 1.3.2006 (Sl. No.1) and 21/2012-Cus dated 17.3.2012 (Sl. No.1) for the purposes of SAD.
The appellants have relied upon Circular bearing D.O.F. No. 334/15/2014-TRU dated 10.07.2014 which clarified that “aircraft engines and parts thereof” are eligible for customs duty exemption under Sl. No. 454 of Notification No.12/2012-Cus, dated 17.03.2012 when imported for servicing, repair or maintenance of aircrafts used for scheduled operations subject to fulfillment of conditions specified therein - the clarifications given under Annexure-III Customs states that Representations have been received regarding the eligibility of aircraft engines and parts thereof for customs duty exemption under Sl.No.454 of notification No.12/2012-Customs, dated 17th March, 2012. It is clarified that aircraft engines and parts thereof are eligible for customs duty exemption when imported for servicing, repair or maintenance of aircrafts used for scheduled operations subject to fulfillment of conditions specified therein.
There is no mention either in the notification or in the clarification that it will be effective retrospectively. In the absence of the same, it is to be understood that the changes made in the Notification No.12/2012-Customs dated 17th March, 2012 would only be prospective.
Whether the demand can be sustained without reviewing/challenging the assessment in the Bills of Entry? - HELD THAT:- The appellants have relied upon the recent decision of Hon’ble Supreme Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [2019 (9) TMI 802 - SUPREME COURT]. We find that the issue for consideration before Apex Court was about refund and in this context, Hon’ble Apex Court has observed that in terms of the provisions of Section 27 read with Section 17 of the Customs Act, 1962, no refund claim is maintainable unless the order of assessment is challenged - the Apex Court has not, anywhere in the order, observed that for issuing a demand under Section 28, the assessment order needs to be challenged under the provisions of Section 128.
Thus, in view of the provisions of Section 17 and Section 28 of the Customs Act, 1962, the demand issued is in order.
Whether in the facts and circumstances of the case, invocation of extended period of limitation interest, and imposition of penalties under Sections 112, 114A and 114AA of the Customs Act, 1962, justified? - HELD THAT:- The bills of entry were self-assessed and were cleared under RMS. Under the circumstances, it cannot be alleged that the Department was in the knowledge of the various declarations made by the appellants and thus, charge of mis-declaration cannot be levelled. Looking into the facts and circumstances of the case, it is found that the appellants have mis-declared the impugned goods and have wrongly availed the benefit of exemption which is not due to them. Under the circumstances, it is found that extended period is correctly invoked - The present case does not relate to export at all and even for imports, all the documents presented for imports were genuine and not forged and thus penalty is not imposable under Section 114AA of the Customs Act, 1962, penalty under other sections upheld - demand of interest also upheld.
Confiscation of goods - HELD THAT:- The Adjudicating Authority simply held that the goods are liable for confiscation; he did not confiscate the goods and he did not impose any fine in lieu of confiscation. Therefore, the order of mere holding the goods liable for confiscation is of no consequence, need not be interfered with.
Appeal allowed in part.
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2021 (7) TMI 1034
Seeking registration of scrips - benefit under Merchandise Exports from India Scheme (MEIS) - invocation of procedure for cancellation of scrips as set out u/s 9(4) of Foreign Trade (Development and Regulation) Act, 1992 - HELD THAT:- Upon a comparison of the details contained in the bills of export of goods under which the petitioner has claimed duty drawback, with the bills of the parties to the transaction, it is found that the numbers and date tally. It is thus clear that the export documents have been executed by the petitioner. The petitioner also confirms that the FTWZ has neither claimed nor been granted any benefit under MEIS Scheme in regard to the instant transactions. If at all such claims had been advanced, they would have been barred under the provisions of 3.06 (vii) of the policy note.
The procedure set out for issuance of scrips is deemed to have been scrupulously adhered to by R3 and this is clear from a reading of clause (h) of the impugned order. The presumption in Clause (h) is that the scrips should be issued only after due scrutiny and, upon the slightest suspicion that the claim may be unacceptable, the Officer has to call for physical documents and decide the fate of the claim by way of a speaking order, if rejected. The issuance of the scrip thus pre-supposes due application of mind by R3 to all relevant stipulations. Clause 3.06 which sets out ineligible categories must thus be assumed, not just to have caught the attention of R3 but to have been thoroughly examined, prior to issuance of the scrip.
A detailed procedure for cancellation of the scrips has been set out under Section 9(4) of the FTDR Act. In the absence of this procedure having been invoked, the categoric presumption is that R3 continues to hold the view that the scrips are valid - The explanation put forth for non-cancellation by Mr. Chandrasekaran is that the matter was subjudice.
DHL logistics, the FTWZ, merely offers a facility to the petitioner to warehouse its consignments that are to be exported. The destination is decided by UTEXAM, which is the ultimate purchaser, which has paid the petitioner in USD for the consignment. The stipulation in Clause (vii) deals with exports made by a unit in the FTWZ. DHL, the FTWZ does not export the consignments but only facilitates such exports. The exports are thus, by the petitioner through DHL to a destination abroad - The role of DHL in this transaction is that of a warehouse and nothing more. The concept of 'ship to' and 'bill to', as used in this case, has been recognised under the GST regime, as commercial compulsions dictate, that transactions are to be structured in the most economical and least cumbersome manner in terms of time, procedure and expense involved.
Petition allowed.
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2021 (7) TMI 1047
Grant of fresh CHA License - HELD THAT:- This appeal is disposed off with liberty to the appellant to make a fresh application for grant of CHA License, which be considered by the Competent Authority in accordance with law.
In the event, the application for grant of fresh CHA License is rejected, it will be open to the appellant to take recourse to statutory remedy of appeal provided for in Regulation 9(4) of the Custom House Agent Licensing Regulations, 2004.
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2021 (7) TMI 1030
Refund of excess amount of tax - import of RBD Palm Oil - enhancement of rate of customs duty vide N/N. 29/2018-Cus., dated 1-3-2018 - validity of the notification - date on which notification came into effect, and the effect of notification on impugned bills of entry - HELD THAT:- The Notification No. 29/2018-Customs, dated 1-3-2018 came into effect from the date of its publication in the official website of the respondent as per the Office Memorandum - there is no dispute that the Notification was uploaded in the official website on 6-3-2018. Therefore, the rate of duty, as was in existence prior to the said publication of the Notification No. 29/2018-Customs, dated 1-3-2018 in Notification No. 50/2017-Customs, dated 30-6-2017, was applicable for assessment of the Bill of Entry No. 5409602, dated 1-3-2018.
The respondents will have to pass a reassessment order in terms of Section 149 of the Customs Act, 1962 and thereafter the petitioner has to file a refund claim in terms of Section 27 of the Customs Act, 1962 - the petitioner is required to satisfy with the requirements of unjust enrichment. The petitioner is therefore also directed to file a refund application before the respondents, within a period of one month from the date of receipt of a copy of this order.
This Writ Petition stands partly allowed.
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2021 (7) TMI 1048
Valuation of imported goods - rejection of declared value - purchase of urea by the Appellant from the Government of India on High Sea Sale - inclusion of miscellaneous charges of ₹ 17/- per MT paid by the Government of India to STE, in assessable value - inclusion of notional 2% High Sea Sale Commission in assessable value - invocation of extended period of limitation - confiscation - penalty.
HELD THAT:- The order of the Custom, Excise and Service Tax Appellate Tribunal in M/S. INDIAN FARMERS FERTILIZERS CO-OPERATIVE LIMITED (IFFCO) VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS, JAMNAGAR [2020 (2) TMI 1134 - CESTAT AHMEDABAD] is upheld - it was held in the case that 2% Notional High Sea Sale Commission could not have been added to the assessable value - neither the amount of ₹ 17/- per MT paid by the Government of India to the STE could have been added to the assessable value on which the Appellant was required to pay duty, nor 2% Notional High Seal Sale could have been added in the assessable value. The confirmation of demand under these two heads, therefore, cannot be sustained.
The aforesaid order need not be interfered - Appeal dismissed.
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2021 (7) TMI 1028
Grant of anticipatory bail - Smuggling - Gold - offence under Section 135(1)(b) of the Customs Act - bailable offence - Power of Customs Officer to arrest a person - HELD THAT:- The applicant apprehends that he may be arraigned as an accused in OR No. 7/2020 of Ernakulam Customs in which his son-in-law has been implicated as an accused. Going by the allegations, he apprehends that he may be implicated for an offence punishable under Section 135(1)(b), which is only a bailable offence coming within the purview of Section 104(7) of the Customs Act. In case that argument is accepted, application for anticipatory bail under Section 438 of Cr. P.C. is not sustainable.
In UNION OF INDIA VERSUS PADAM NARAIN AGGARWAL ETC. [2008 (10) TMI 1 - SUPREME COURT] it was held that the power to arrest a person by a Customs Officer is statutory and cannot be interfered with. It was observed that Section 108 does not contemplate magisterial intervention. As the power under the statute is exercised by a Gazetted Officer of the Customs Department, the person summoned is under obligation to state truth upon any subject in respect of which he is examined.
This Court is prevented from entertaining the application. In the event of his arrest, the jurisdictional Court is at liberty to consider the applicant’s plea of illness in case the proviso to Section 437 of Cr. P.C. is found applicable - application for pre-arrest bail is only to be dismissed.
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Corporate Laws
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2021 (7) TMI 1046
Recall of order - applicant was not impleaded as a party to the writ petition, for which the points raised in the recall application could not be properly represented before the court - re-activation of the Directors Identification Number (DIN) - HELD THAT:- In the present case, the challenge in the writ petition was that the DIN of the writ petitioner could not be deactivated since the writ petitioner had complied with the requirements to be complied with by the directors by filing annual reports and financial statements of the concerned financial years. However, it is specifically admitted in paragraph no. 18 of the writ petition that the petitioner is taking appropriate steps in respect of the marking of the respondent no. 4, that is, the Tirupathi Properties & Investment Private Limited as having management dispute. Thus, the marking of the company as having management dispute was not the subject-matter of the writ petition but that of an appropriate challenge before a different forum.
A perusal of the Master Circular dated February 10, 2012 makes it clear that Clause 3 thereof is independent of Clause 2, the latter merely contemplating the requirement of the company to mandatorily file the attachment relating to cause of cessation along with Form 32 of the ROC concerned, irrespective of the ground of cessation - Clause 3 of the Circular still remains in force and restrains the ROC from approving/registering/recording the documents filed by the company and the directors and from making those available in the registry for public viewing if there is an existing management dispute.
In fact, since such marking of the company-in-question as having management dispute still continues, independent of the re-activation of the writ petitioner’s DIN, the portion of the order under recall, whereby the order of the ROC dated June 24, 2016 was set aside, was beyond the scope of the writ petition and the dispute involved therein - although the portion of the order under recall, by which the deactivation of the writ petitioner’s DIN was set aside, was justified since there was due compliance of the liabilities of the writ petitioner as director of the company-in-question, the latter portion of the order under recall, setting aside the operation of the order dated June 24, 2016 of the ROC, was in contravention of the Circular dated February 10, 2012 and, thus, bad in law.
Since the review applicant was not impleaded as a party to the writ petition, there was no opportunity for the said applicant to point out the aforesaid flaw in the order under recall and/or any scope of arguing the question as raised in the review application at the relevant juncture, the portion of the order under recall setting aside the order dated June 24, 2016 is required to be recalled/set aside - deactivation of the DIN of Garima Rungta, the writ petitioner, is set aside and such DIN is re-activated.
Application allowed.
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2021 (7) TMI 1017
Seeking approval of Tribunal for sanction of scheme of Amalgamation - section 230-232 of the Companies Act, 2013, read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- On going through the approvals accorded by the members and creditors of the Petitioner Companies to the Scheme and the affidavits filed by the Regional Director, Eastern Region, Ministry of Corporate Affairs, the rejoinders filed by the Petitioner Companies to the observation of the Regional Director and the rejoinder thereto, there appears to be no impediment in sanctioning the present Scheme. The Petitioners shall abide by the undertakings given in their affidavits.
Since all the requisite statutory compliances have been fulfilled, the scheme is approved - application allowed.
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2021 (7) TMI 1015
Sanction of the Composite Scheme of Arrangement - Section 230(6) read with Section 232(3) of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding and convening of various meetings issued - directions regarding issuance of various notices also issued.
The Petitioner(s) shall supply legible print out of the scheme and schedule of assets in acceptable form to the registry and the registry will append such printout, upon verification to the certified copy of the order - petition disposed off.
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2021 (7) TMI 1013
Approval of Scheme of Amalgamation - Section 230(1) read with Section 232(1) of the Companies Act, 2013 - directions sought for dispensing with the meeting of equity shareholders of the Applicant Companies, Secured Creditors of Applicant No. 1 and Unsecured Creditors of Applicant No. 1 to Applicant No. 4 and Applicant No. 6 who have already given their consent to the Scheme - HELD THAT:- Various directions regarding dispensation of meetings issued - directions regarding issuance of various notices also issued.
The application disposed off.
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2021 (7) TMI 1008
Seeking restoration of name of the Company in the Register of Companies maintained by the Registrar of Companies - Section 252(3) of the Companies Act, 2013 - HELD THAT:- The Company is doing its business as a going concern basis - Applicant further stated that the Company would file necessary Financial Statements and Annual Returns soon after restoration of the name of the Company with the Registrar of Companies, Hyderabad and prayed the Tribunal to revive this Company.
After hearing the Learned Counsel for Applicant and after perusal of material documents on record, the report of the RoC, Hyderabad and after going through the provisions of Section 252(3) of the Companies Act, 2013, this Tribunal is of the view that the Company was in existence and it is a going concern and name of the Company to be restored in the Register of Companies as maintained by RoC.
The Registrar of Companies, the Respondent herein, is ordered to restore the original status of the Company as if the name of the company has not been struck off from the Register of Companies and take all consequential actions like change of company's status from 'Strike off' to Active (for e-filing) and to intimate the bankers about restoration of the name of the company so as to defreeze its accounts.
The name is restored - application allowed.
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Insolvency & Bankruptcy
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2021 (7) TMI 1014
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt or not - disbursement of loan and its non-payment is proved by the documents placed on record - Financial Creditors - existence of debt and dispute or not - HELD THAT:- Since the disbursement of the loan is proved vide Bank's statement of the Financial Creditor for the period 18/04/2016 to 29/03/2019, issued by the Bank of Maharashtra showing the disbursement of loan to the Corporate Debtor and the amount outstanding has been admitted by the Corporate Debtor vide its confirmation letter duly signed and sealed mentioned above, and since the admitted default of non payment of the outstanding amount is proved on the basis of documents placed on record by the Financial Creditor including various notices and reminders recalling the outstanding debt, the application of the Financial Creditor deserves to be admitted.
There are no hesitation to order that the CIRP in respect of the Corporate Debtor be initiated - Petition admitted - moratorium declared.
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2021 (7) TMI 1012
Seeking direction upon the RP to reconsider and reverify the claim submitted by the applicant, before approval of the Resolution Plan - Collation of claim by RP - HELD THAT:- This is a case where the RP himself was aware from the records that there was only one time supply of materials by the applicant and the monthly charge was towards the hiring cost of those materials. It is also admitted by the RP that the materials are still lying at the project site and have not been returned so far to the applicants - In this scenario, while the RP could not properly have paid the tax on the supply of goods without a proper tax invoice, there was nothing that prevented him from factoring in the basic rent in respect of the materials which are already technically under the corporate debtor's custody but physically lying within the Metro Railway Project site.
The sheer anchor of the defence raised by the answering respondent is that once a Resolution Plan is approved all undecided claims are extinguished - the applicant has diligently pursued his claim for acceptance and collation by the RP and if it could not be taken up by this Adjudicating Authority before the approval of the resolution plan it cannot be said that the RP extinguishes all such claims.
While those invoices which do not contain a signature cannot be accepted in so far as the tax component of the bill is concerned, there is nothing that prevented the RP from considering payment of the basic rent since the materials of the applicant were at all material times in the custody of the corporate debtor and being used at the site of the project awarded to the corporate debtor. Therefore, there is no doubt that the applicant was indeed entitled to the basic rent without his having to submit any proof other than the work order in this respect.
The answering respondent is hereby directed to collate the claim of the applicant afresh on the basis of the observations and include it in the list of operational creditors from which payments will be made by the successful Resolution applicant.
Application disposed off.
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2021 (7) TMI 1010
Liquidation process - demand of tax dues - requirement to pay the tax dues prior to the date of sale of the unit - eligibility to issue enlistment certificate - applicability of municipality by section 118 of the West Bengal Municipal Act and Audit and Accounts Rules, 1999 - requirement ot follow duties under section 55 of the Transfer of Property Act, 1882 - overriding effect of IBC or not - HELD THAT:- The Insolvency and Bankruptcy Code, 2016 is a self contained legislation. In cases of liquidation, through chapter III read with the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, the Code provides for a procedure of public announcement calling upon the stakeholders to submit their claims with the liquidator, who then consolidates, verifies and adjudicates upon it - In the present case, the liquidator had made the public announcement on 23.10.2017, however, the Respondent Nos. 2 and 3 did not file their claim with the liquidator. The Respondents cannot by-pass the provisions of the Code and hold the grant of licence or enlistment certificate ransom subject to the payment of their dues.
Under section 238, the Code also envisages that the provisions of the Code will override other laws. Therefore, the Respondent's reliance on the provisions of the Transfer of Property Act, 1882, West Bengal Municipal Act, 1993 and Audit and Accounts Rules, 1999 is misplaced.
The Applicants are not liable to pay the tax dues prior to the date of sale of the said unit i.e. 08.10.2020. The demand notice dated 01.02.2021 is not sustainable in law. The Respondent Nos. 2 and 3 are hereby directed to consider the application for grant of License or Enlistment Certificate and application for mutation of the said unit on its merit without being affected by the dues pending - Application allowed.
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2021 (7) TMI 1009
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - account of the corporate debtor was classified as NPA - valid power of attorney or not - time limitation - HELD THAT:- This case was adjourned from time to time on the ground that the issue of whether entries made in balance sheets amount to an acknowledgement of debt under section 18 of the Limitation Act, 1963 was pending before the Hon'ble Supreme Court.
Valid power of attorney or not - HELD THAT:- The plea regarding no valid power of attorney is not valid, On perusal as per clauses no. 10, 11 and 12 of the power of attorney mentioned that the applicant is authorized to initiate and prosecute insolvency proceedings by and on behalf of the bank. From the date of authorization to the applicant bank has never revoked the Power of Attorney. Hence, the question that the application is not authorized to file the present application does not arise.
Time Limitation - HELD THAT:- The other plea regarding the petition is barred by limitation is also not valid, On perusal of balance sheet and auditor's report it is noted that the corporate debtor, has itself acknowledged its liabilities. The recent judgment passed by the Hon'ble Supreme Court in "Asset Reconstructions Company India Limited Versus Bishal Jaiswal" [2021 (4) TMI 753 - SUPREME COURT] held that the entries made in the balance sheet of corporate debtor amount to an acknowledgement of debt under section 18 of Limitation Act, 1963 and, would extend the period of limitation.
It is also noted that the amount is due and payable and more than the threshold limit as prescribed under section 4 of the IB Code. The default has occurred. The question of limitation is also not arisen as seen from the record it proves that the CD has already acknowledged the debt in its balance sheet and auditor's report. Hence, considering the facts and circumstances of the case, we hold that the application filed u/s. 7 deserves to be admitted - name of IRP has also been proposed which is mandatory as per the Provision of IB Code, 2016, whose consent is on record.
The petition is admitted - moratorium declared.
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2021 (7) TMI 1002
Seeking declaration that respondent are entitled to claim any outstanding amount from the Applicant in respect of any due or amount payable - 'statutory charge' created in favour of the Respondents - effect of amendment to Section 32A of the IB Code, 2016, retrospective or not - HELD THAT:- The Hon'ble Supreme Court in GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR & ORS. [2021 (4) TMI 613 - SUPREME COURT] by clarifying the statutory amendment to Section 32A of the IB Code, 2016 has held that such amendment it clarificatory in nature and it ought to be given retrospective effect. Which means that such provision is made applicable from the date the Insolvency and Bankruptcy Code came in to effect, i.e. 1st December 2016. By taking in to consideration of the above settled legal position and by following the decision of the Hon'ble Supreme Court.
It is declared that all liabilities of the Corporate Debtor which were prior to CIRP and are prior to approval of the Resolution Plan and before transfer of the assets of the Corporate Debtor to the Resolution Applicant shall stand extinguished.
Application allowed.
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Service Tax
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2021 (7) TMI 1026
Classification of services - GTA services or not - appellant is transporter of timber/firewood for forest Department of Government of Madhya Pradesh - cartage Challan equivalent to the consignment note or not - period 2013-14 to 2015-2016 - HELD THAT:- The carting Challan in this case is only for internal control of forest department. Such carting Challan is not equivalent to a consignment note which is issued by the transporter. The consignment note is a negotiable instrument and the transporter is bound to deliver the goods to bonafide holder of title, as mentioned in the consignment note. Such element of ‘consignment note’ are absent in the ‘carting Challan’.
The carting Challan is not equivalent to consignment note. Accordingly, the appellant has not rendered the services as per the definition of GTA under the Finance Act - appeal allowed - decided in favor of appellant.
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2021 (7) TMI 1000
Nature of transaction - Service or not - Manpower recruitment and supply service or not - appellant had utilised services of the seconded employees of other firm under contract of employment - employer – employee relationship - case of appellant is that only employees working in foreign group company were deputed to its group company in India, hence is not covered under service provided from outside India - reverse charge mechanism - HELD THAT:- There is no doubt that the service said to be provided by M/s. Imasen Electric Industrial Company Ltd., Japan to the appellant were not taxable in eyes of law, especially when the appellant treated the amount paid to the said persons as salary in terms of Income tax rules and deducted the income tax on the same, in this regard the appellant produced Form No. 16 issued under Income Tax Act, which shows that the said persons worked as employee of the appellant, therefore, there is no doubt about the employer – employee relationship, thus the appellant is not liable to pay any service tax as confirmed vide the impugned order.
In the case of M/S VOLKSWAGEN INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [2013 (11) TMI 298 - CESTAT MUMBAI] where it was held that The global employees working under the appellant are working as their employees and having employee-employer relationship. There is no supply of manpower service rendered to the appellant by the foreign/holding company. The method of disbursement of salary cannot determine the nature of transaction.
The appeal is allowed.
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2021 (7) TMI 1001
Benefit of abatement of 76% under N/N. 01/2006-S.T., 21/97-S.T., 39/97-S.T., 40/97-S.T., 12/2001-S.T., 8/2003-S.T., 12/2003-S.T., 18/2003-S.T., 19/2003-S.T., 2/2004-S.T., 9/2004-S.T. and 10/2004-S.T. - appellant had availed the Cenvat credit in respect of GTA Service - HELD THAT:- The same issue for previous period in the appellant’s own case came before this Tribunal in M/S NJ DEVANI BUILDERS PVT. LTD VERSUS C.S.T. & S.T. -AHMEDABAD [2019 (6) TMI 213 - CESTAT AHMEDABAD] and this Tribunal has held that the appellant is entitled for the abatement Exemption Notification subject to reversal of Cenvat Credit.
This very order was challenged before the Hon’ble High Court in MESSRS NJ DEVANI BUILDERS PVT. LTD VERSUS UNION OF INDIA [2020 (11) TMI 798 - GUJARAT HIGH COURT] wherein the Hon’ble Gujarat High Court set aside the Tribunal’s order as well as the Show Cause Notice raising the demand on the ground that the service falls under works contract service and demand was raised under Commercial or industrial construction service.
Considering the judgment passed by Hon’ble High Court since the same issue involved in the present case and there is only difference of period, the ratio of the Hon’ble High Court Judgment is squarely applicable in the present case - demand set aside - appeal allowed - decided in favor of appellant.
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Central Excise
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2021 (7) TMI 1045
Violation of principles of natural justice - service of notice - adjudication procedure under Section 33A(1) and Section 37C of the Central Excise Act, 1944 not followed - HELD THAT:- A perusal of the paper book reveals that it is the case of the Revenue Department that though summons had been served upon the petitioner on 17th September, 2018, yet it had neither appeared before the respondent Department nor any documents had been filed on its behalf. It was only after the respondent-Department contacted the petitioner’s auditor, that he appeared and made a statement. Later also efforts were made to serve the petitioner with notices, however, the petitioner was not available at the given address.
Keeping in view the fact that the demand is a high-pitched one and subsequent notices issued by the respondent to the petitioner had not been served upon the petitioner or its authorised representative before the hearing, this Court in the interest of justice, grants last and final opportunity to the petitioner to appear before the respondent no.2 on 2nd and 9th August, 2021 at 11.00 A.M., subject to payment of costs of ₹ 2,50,000/- to Delhi High Court Bar Association Pandemic Relief Fund within a week.
Petition disposed off.
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2021 (7) TMI 1031
Condonation of delay of 107 days in filing the appeal - sufficient explanation for condonation of delay not provided - resignation of the concerned official dealing with excise matters - availability of alternate remedy by way of appeal - Section 35G of the Central Excise Act, 1944 - HELD THAT:- The delay of 107 days is not inordinate for the 1st respondent/Appellate Authority to dismiss the appeal as the precious rights to agitate the issue arising out of the order passed by the 2nd respondent/Commissioner of Customs and Central Excise, Salem cannot be denied to the petitioner unless there is an inordinate delay which has not been answered properly and condonation of the delay will cause prejudice to the interests of the Revenue.
The alternate submission of the Learned Counsel for the respondents that the remedy lies by way of an appeal before this Court against the order of the 1st respondent/Appellate Authority under Section 35G of the Central Excise Act, 1944 also cannot be countenanced as the jurisdiction of the Court under Section 35G of Central Excise Act, 1944 can be invoked only where there is substantial question of law.
The impugned orders is set aside with a consequential direction to the 1st respondent/Appellate Authority to number the appeals and dispose the same on merits in accordance with law - petition allowed.
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2021 (7) TMI 1029
Interpretation of statute - 'the person chargeable with the duty', in the main part of sub-section (1) of Section 11A of the Central Excise Act, 1944 - by such person or his agent in the Proviso - whether only one person can be charged with the duty on a given goods or otherwise? - Clandestine removal - demand of duty from two companies SAS and ASRM, who jointly involved in the manufacturing of the goods - HELD THAT:- The appeal admitted on substantial questions of law.
Due to efflux of time, we are of the view that it may not be necessary to adjudicate these appeals and decide the substantial question of law as the department has availed the opportunity granted by the Tribunal in the impugned order and issued Show Cause Notices afresh, which are slightly different from the Show Cause Notices, which have ultimately culminated into the impugned order - Therefore, the best course open would be is to direct the Commissioner of Central Excise, Tiruchirapalli, to adjudicate the Show Cause Notices after affording reasonable opportunity to the assessee and take a decision in the matter.
The appeals are disposed of, by directing the Commissioner of Central Excise, Tiruchirapalli to proceed further with adjudicating the Show Cause Notice dated 24-7-2007, after affording reasonable opportunity to the assessees, which includes an opportunity of personal hearing.
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CST, VAT & Sales Tax
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2021 (7) TMI 1043
Maintainability of petition - availability of efficacious alternate remedy - bar on appeal/objection against the impugned order - order has been passed ‘giving effect to’ the order of this Court - Seeking refund alongwith interest - HELD THAT:- This Court is of the opinion that the present case does not call for any interference under Article 226 of the Constitution, as an efficacious alternative remedy is available with the petitioner under Section of 74 of DAVT Act. The petitioner has failed to demonstrate any patent illegality like violation of principle of natural justice or of fundamental rights in the impugned order.
The Court had merely directed the respondents to decide the claim of the petitioner in accordance with law. Since the Court has not decided the matter on merits, the impugned order cannot be said to be ‘giving effect to’ the order of this Court. Therefore, objections against the impugned order will not be barred by Section 79(1)(j) of DVAT Act - writ petition is dismissed with liberty to the petitioner to file an appeal/objection.
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2021 (7) TMI 1038
Classification of goods - powder quoting material - to be classified under Central Excise Tariff Heading (CTH) 39 or under Entry 51 of 3rd Schedule of the Act? - applicability of Notification dated 03.04.2005 - Section 4(1)(b) of Central Excise Act - HELD THAT:- Section 4(1)(b) of the Act prescribe for liability to tax and rates thereof. Section 4(1)(ii) prescribes that in respect of goods mentioned in 3rd Schedule, the tax shall be levied at the rate of five and half percent. Entry 51 of Schedule III of the Act covers industrial inputs and packing materials as may be notified. The State Government has issued a Notification dated 30.04.2005 notifying the industrial inputs and packing materials. Entry 133 of the aforesaid Notification covers Chapter Heading No.3907, which in turn covers polyacetals, other polyethers and epoxide resins, in primary forms; polycarbonates, alkyd resins, polyallylesters and other polyesters, in primary forms.
The description against Entry No.133 of the Notification matches fully with corresponding description in the Central Excise Act and therefore, in terms of Explanation III to the Notification, all the commodities covered for the purpose of the said tariff heading will be covered under Entry No.133 of the Notification. Therefore, the product of the petitioner which falls under Chapter Heading No.3907, is classified as industrial input under Serial No.133 of the Notification dated 30.04.2005 - The product namely powder coating material is primarily composed of 'Epoxide Resins' or 'Polyester Resins' and additional items are merely additives. Therefore, in terms of Rule 3(b) of General Rules of Interpretation, the classification shall be determined on the basis of 'Epoxy Resin' or 'Polyester Resin'.
The reliance placed by the Respondents on the division bench decision of this court in the case of the petitioner is of no assistance to the Respondents as the product was classified by the petitioner in that case under CTH 3911.90.90 which was not covered under the Notification dated 30.04.2005. In the instant case, the product of the petitioner is covered under the Notification dated 30.04.2005.
Petition allowed.
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Indian Laws
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2021 (7) TMI 1041
Dishonor of Cheque - non-CTS-2010 cheque - valid cheque or not - scope of four corners of Section 138 of the Negotiable Instruments Act - Scope of circular issued by Reserve Bank of India dated 18.3.13 - time limitation - HELD THAT:- The circular issued by Reserve Bank of India dated 18.3.13, which has been pressed into service to put forth the contention that the non-CTS-2010 cheque is an invalid cheque, however, clause (c) of the circular issued by Reserve Bank of India provides that all residual non-CTS-2010 cheques with customers will continue to be valid and accepted in clearing houses (including the Cheque Truncation System (CTS) Centres) for another four months up to July 31, 2013, subject to a review in June, 2013. From the said clause it is evident that validity is given till 31.7.2013, which is subject to review. However, no material is placed on record to show the actual decision taken by the Reserve Bank of India as to the validity of the cheques, which are non-CTS-2010 complaint.
The petitioners are bound to establish the validity or otherwise of the cheque by adducing oral and documentary evidence during trial and at this point of time, it would not be prudent for this Court to render one finding or the other as to the validity of the cheque, in the absence of any substantial material voicing any particular view with regard to the same - the circular of the Reserve Bank of India shows that the banking channels, based on the digital signature in the form of Magnetic Ink Character Recognition (MICR), would be in a position to distinguish a non-CTS-2010 cheque from a CTS-2010 cheque. The Court, appreciating an issue u/s. 482 of the Code of Criminal Procedure, would not be justified in giving a decision one way or the other as to the nature of the cheque, which is put in issue by the parties as the same has to be established only at the time of trial by adducing oral and documentary evidence.
In the present petition u/s. 482 Cr.P.C., no material with regard to the cheque being given as security or the business arrangement between the petitioners and the respondent is placed - deciding on the nature of the cheque, being a non-CTS-2010 cheque, according to the petitioners, would not be justified.
This Court is of the considered view that the petition at the behest of the petitioners 1 and 2 for quashing the charge sheet cannot be permitted and, accordingly, it deserves to be rejected - the criminal original petition is allowed in part.
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2021 (7) TMI 1040
Dishonor of Cheque - suit barred by limitation or not - denial of execution of pronote - suit is filed only after 8 years from the date of execution of the pronote - time limitation in case post dated cheque issued - HELD THAT:- The cheques dated 28.04.2008 and 28.04.2009 were not presented for collection and both cheques had lost their validity. Insofar as the cheque dated 28.04.2011 is concerned, the complaint was lodged and referred before Lok Adalat. The last payment made by the defendant on 21.09.2012 and it was duly recorded and the complaint was closed by an order dated 21.09.2012 which was marked as Ex. A8 - Insofar as the receipt of ₹ 10,00,000/-, the execution of pronote and the issuance of cheques are concerned, the defendant, during his cross examination, categorically admitted that the plaintiff entrusted a sum of ₹ 10,00,000/- for investment and towards the repayment of the said amount, the defendant issued four post dated cheques to the plaintiff, in which, three cheques were marked as Ex. A2, Ex. A3 and Ex. A4. He also categorically admitted the signature found in the pronote, which was marked as Ex. A1. Therefore, after entrustment of ₹ 10,00,000/-, on demand, the defendant executed the pronote on 28.03.2007 and on the same day, he also issued four cheques towards the repayment of ₹ 10,00,000/-.
According to Section 19 of the Indian Limitation Act, when the defendant made payment on account of the cheque before the expiration of prescribed period, a fresh period of limitation shall be computed from the time when the payment was made. Therefore, it is clear that when the defendant issued four post dated cheques and thereby acknowledged the amount due to the plaintiff. The Limitation starts from the date of instrument irrespective of the fact that the defendant issued four post dated cheques. The last payment was made by the defendant on 21.09.2012 and the suit was filed on 03.09.2015 - Therefore, it is well within the time and the Court below rightly decreed the suit.
The Trial Court directed to defendant to pay a sum of ₹ 5,00,000/- with interest at the rate of 9% per annum from the date of pronote till the date of realization - this Court finds no merits in this Appeal Suit - Appeal suit is dismissed.
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2021 (7) TMI 1035
Dishonor of Cheque - condonation of delay in filing the complaint - trial court failed to grant extension, inspite of being allowed by suo moto petition - HELD THAT:- Even though the trial Court referred the averments made in the complaint, the sworn statement and documents marked on behalf of the complainant, it has not given its consideration to the dates of events which are mentioned above before condoning the delay in presenting the complaint. It is settled position of law that there must be application of mind before taking cognizance of the offence by the Court when there are several dates of events as mentioned - The impugned order does not speak that the Court has taken the said events into consideration before proceeding to pass the impugned order.
The matter remanded for fresh consideration by the trial Court keeping in mind the various dates of events mentioned in the complaint in the light of the order passed by the Hon'ble Apex Court in the suo motu writ petition - petition allowed.
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