TMI Tax Updates - e-Newsletter
August 10, 2021

Case Laws in this Newsletter:

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

Articles

1. Comparison Of Section-15BAC New Tax Regime With Existing.

   By: AVINASH BHATT

2. INCOME TAX TDS –VIS-À-VIS TCS ON PURCHASE OF GOODS

   By: Dr. Sanjiv Agarwal

3. Though penalty deleted but full justice not done by honorable Tribunal by ignoring some vital grounds, not awarding costs in case of Varun Finance P. Ltd.

   By: DEVKUMAR KOTHARI

Notifications

Customs

1. 43/2021 - dated 9-8-2021 - ADD

Seeks to levy anti dumping duty on imports of Phthalic Anhydride (PAN) originating in or exported from China PR, Indonesia, Korea RP and Thailand for a period of five years.

DGFT

2. 16/2015-2020 - dated 9-8-2021 - FTP

Extension in period of modification of IEC till 31.08.2021 and waiver of fees for IEC updation done during August, 2021

3. 15/2015-2020 - dated 9-8-2021 - FTP

Amendment in import policy of Integrated Circuits (1Cs) and incorporation of policy condition for HS Codes 85423100, 85423900, 85423200, 85429000, and 85423300, of Chapter 85 of ITC (HS), 2017, Schedule - I (Import Policy)

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/CDMRD/CDMRD_DRM/P/CIR/2021/612 - dated 9-8-2021

Calendar Spread margin benefit in commodity futures contracts

Customs

2. Instruction No. 16/2021 - dated 9-8-2021

Import of Split Cassia label as Cinnamon

Highlights / Catch Notes

GST

• GST Territorial Jurisdiction for Works Contract in Maldives: Place of Supply u/s 12 of IGST Act Explained.

  Case-Laws - AAR : Scope and applicability of GST - Territorial Jurisdiction - supply in respect of the works contract for setting up of the Institute of Security and Law Enforcement Studies at ADDU City in Maldives - The applicant who is the supplier of service & NBCCL who is recipient of service are located in India and therefore the place of supply is to be determined under Section 12 of the IGST Act. The proviso to Sub-Section (3) of section 12 of IGST Act clearly mention that if the location of immovable property is intended to be located outside India, the place of supply shall be the location of the recipient i.e., NBCCL. - AAR
  Visit to Get Source

  ---

• GST Rate on Sealed Fruit Bowls: 2.5% for Fresh Fruits Only; Higher Rate for Mix with Dry Fruits or Nuts.

  Case-Laws - AAR : Classification of goods - rate of GST - (i) Supply of sealed fruit bowl containing only cut fresh fruits without addition of any preservatives or additives which are sold under brand name is covered under entry no.59 of Schedule I of Notification No.1/2017 Vide HSN 1106 and is liable to tax @ 2.5% under CGST Act and 2.5% under the SGST Act, 2017. (ii) The Fruit bowl containing both cut fresh fruits and dry fruits and nuts is taxable at rate applicable to the supply of dry fruits and nuts. - AAR
  Visit to Get Source

  ---

• Manpower services to Zilla Panchayat and others subject to 18% GST; not exempt under Articles 243G/243W.

  Case-Laws - AAR : Exemption from GST - pure services - manpower services provided to Zilla Panchayat, City Corporations, Education institutions and Rural Water Supply Divisions - the manpower services are not provided by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. Hence provision of such manpower services is liable to tax at 18%. - AAR
  Visit to Get Source

  ---

• Diesel Cost for DG Set in Rental Service is Additional Consideration, Attracts 18% CGST Rate.

  Case-Laws - AAR : Applicability of GST - cost of the diesel incurred for running DG Set in the course of providing DG Rental Service - The consideration for reimbursement of expenses as cost of the diesel for running of the DG Set is nothing but the additional consideration for the renting of DG Set and attracts CGST @ 18%. - AAR
  Visit to Get Source

  ---

• Tissue Papers Excluded from 12% GST Rate; Classified Separately from Uncoated Paper and Paperboard.

  Case-Laws - AAR : Classification of goods - rate of GST - supply of tissue papers - It is clearly evident from the description that GST rate of 12% is applicable only to Uncoated paper and paperboard used for writing, printing or other graphic purposes; non perforated punch-cards and punch tape paper, in rolls or rectangular/square sheets, of any size; hand-made paper and paperboard. Further the paper of heading 4801 and 4803 are excluded from the heading 4802. The impugned products being the tissue papers fall under other paper and paperboard not containing fibres obtained by a mechanical or chemi-mechanical process and hence do not get covered under uncoated paper and paperboard. - AAR
  Visit to Get Source

  ---

• Railway Employee Housing Repairs: 12% GST for Composite Supply, 18% for Specific Old Construction Works per Entry 3(vi.

  Case-Laws - AAR : Rate of GST - Composite supply or mixed supply - services of repairs, maintenance, renovation and alterations of residential complex meant for use of the Railway employees are covered under entry 3(vi) of the Notification and hence eligible for tax at 12% - Other repair works of old construction involved in the contract are liable to tax at 18% of GST - AAR
  Visit to Get Source

  ---

• Subsidized employee lunches via contractors not a taxable supply under CGST Act Section 7(i)(c).

  Case-Laws - AAR : Canteen services or supply - provision of subsidized lunch and refreshments to employees through contractors - The applicant merely pays the part consideration towards the cost of lunch and refreshments to their employees through contractors and hence the said activity does not amount to supply, in terms of Section 7(i)(c) of the CGST Act 2017. - AAR
  Visit to Get Source

  ---

• GST Not Applicable on Books Supplied Outside India, Says AAR; Transactions Not Classified Under CGST Act 2017 Schedule II.

  Case-Laws - AAR : Territorial Jurisdiction - Levy of GST - Both the transactions of Sale and purchase are done outside India - the applicant is involved in supply of books, purchased from Amazon who owned the books, from a place outside India, a non-taxable territory, to another place outside India, a non-taxable territory, without the said goods entering into India. Thus the impugned supply of books by the applicant is neither supply of goods nor supply of services, in terms of schedule II to Section 7 of the CGST Act 2017. - AAR
  Visit to Get Source

  ---

• Vouchers Sold as Payment Instruments Taxed as Goods, Not Actionable Claims; 18% GST Applies u/s 12(5) CGST Act 2017.

  Case-Laws - AAR : Taxability - stage of taxation - vouchers themselves, or the act of supplying them? - the applicant purchases the payment instruments and sells the same to their clients, who in turn distributes them to their clients/customers and the said customers use them to discharge their obligation to pay consideration for the goods or services procured by them from their suppliers. - The vouchers are not covered under “actionable claim” as they are not debt. - The supply of Vouchers are taxable as goods and the time of supply in all three cases would be governed by Section 12(5) of the CGST Act 2017. - Taxable at the rate of 18 % GST - AAR
  Visit to Get Source

  ---

• Court Denies Request to Lift Bank Account Attachment u/s 83 CGST Act, Rule 159(1) CGST Rules.

  Case-Laws - HC : Denial to lift the order of provisional attachment of the petitioner’s bank account - Section 83 of the CGST Act read with Rule 159(1) of the CGST Rules empowers a Commissioner to protect the interests of the revenue by way of provisional attachment, but such provisional attachment cannot be ordered without fulfillment of the condition(s) precedent - HC
  Visit to Get Source

  ---

Income Tax

• Tax Practitioner Error Corrected: Assessing Officer to Remove Unauthorized Capital Addition u/s 68 of Income Tax Act.

  Case-Laws - AT : Addition u/s 68 - mistake of introduction of authorized capital - tax practitioner had made the above inadvertent mistake while filing the return of income which is not the real capital and investment of the assessee. Therefore, we direct the Assessing Officer to delete the addition made under section 68 of the Act. - AT
  Visit to Get Source

  ---

• Long-term capital gain exemption denied u/s 10(38) due to bogus classification; cross-examination rights emphasized.

  Case-Laws - AT : Bogus LTCG - Long-term capital gain exempt under Section 10(38) denied - Even if name of the appellant appeared in their statements, it could not have been used against the appellant until and unless the appellant was allowed an opportunity to cross examine the person whose statement was recorded during the course of survey/searches. - the material as received by the assessing officer behind the back of the appellant cannot be used against the appellant. - AT
  Visit to Get Source

  ---

• Denial of Section 10(23C)(vi) exemption raises questions on eligibility for assessment u/s 11 for charitable activities.

  Case-Laws - AT : Exemption u/s. 10(23C)(vi) denied - eligibility to Assessment u/s 11 - Charitable activity u/s 2(15) - an expenditure which did not even form a part of application claimed - As the assessee wholly and exclusively carried out its objects for which it was established and even if there is a violation as suggested by CCIT, it was not claimed for the purpose of application of income. - AT
  Visit to Get Source

  ---

• Jewelry Purchases: Cash Transactions Without Documentation Deemed Unexplained u/s 69A of Income Tax Act.

  Case-Laws - AT : Unexplained jewellery u/s 69A - mere purchase bills are not sufficient to explain the source of purchase of silver items where such purchases are made in cash and in absence of any explanation on record in terms of availability of cash in the hands of the assessee at the relevant point of time of purchase, such purchases cannot be treated as explained by the assessee. - AT
  Visit to Get Source

  ---

• Receipts from hiring vessel 'Smit Borneo' on time charter not royalty; no Permanent Establishment, addition removed.

  Case-Laws - AT : Taxability of receipts on hire of vessel on time charter basis - non existence of PE - the receipts from the charter of vessel 'Smit Borneo' cannot be treated as royalty and direct the assessing officer to delete the addition - AT
  Visit to Get Source

  ---

• Section 263 Revision: Does Building a Room on 90% Open Land Qualify for Section 54F Deduction?

  Case-Laws - AT : Revision u/s 263 - Deduction u/s 54F - In the instant case, where there is 90% approx. of open space and merely 10% of built up area by way of construction of a room, can it be said that assessee has constructed a residential house with land appurtenant thereto. In our considered view, the said matter has clearly escaped the attention of the AO and to that extent, the order so passed is clearly erroneous and prejudicial to the interest of the Revenue. - AT
  Visit to Get Source

  ---

Customs

• Court Questions Binding Precedent of Provisional Release Orders u/s 110A of Customs Act in Future Cases.

  Case-Laws - HC : Seeking provisional release of the export consignment - Once the reasoned order for provisional released has been passed in respect of the relevant consignment under the provisions of section 110A of the said Act and the conditions for such provisional release have been complied with by the applicant/petitioner, we fail to comprehend as to how such an administrative order could be cited as a precedent in future cases so as to preclude us from making an order as prayed for in the interim application. - HC
  Visit to Get Source

  ---

Service Tax

• Petitioner's Application Rejected by Automated Process Under Sabka Vishwas Scheme; Clarificatory Circular Requirements Overlooked.

  Case-Laws - HC : Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - it appears that the rejection is by a computer generated and/or a mechanical process by a remark that ‘show cause notice issued after 30th June, 2019’. Certainly there is no application of mind on the petitioner’s application on the provisions as made by clarificatory circular, as no reasons are furnished as to why the petitioner’s declaration cannot be entertained applying clause 2(viii) of the said Circular. - Application resumed - HC
  Visit to Get Source

  ---

Central Excise

• Refund of MODVAT Credit Denied Due to Time Limit; Ineligibility to Monetize Credit Upheld, No Remand Needed.

  Case-Laws - AT : Seeking refund of the MODVAT Credit balance available in the account on the date of surrender of the registration - rejection on the ground of time limitation - Monetising of credit balance - the finding on ineligibility for monetising of credit balance has been correctly determined and remand is not warranted. - AT
  Visit to Get Source

  ---

Case Laws:

• GST

• 2021 (8) TMI 360
  Classification of supply - composite supply or not - rate of tax of the principal supply could be adopted for the whole of supplies or not - sale of LPG, Collection of Take or Pay Charges for not lifting minimum assured quantity and rental charges for supplier gas system installed at the customer premises to store the LPG which is a condition precedent for supply of LPG - supply/sale of LPG be treated as principal supply or not. HELD THAT:- The applicant is in the business of sale of LPG to industrial customers. They have installed Supplier Gas System (SGS) consisting of 30 Nos of LPG cylinders, Regulators, Primary pressure regulating systems, Vaporizers etc. As seen from the agreement a minimum quantity of LPG has to be necessarily purchased by the buyer. And if such minimum amount is not purchased they shall pay by way of commitment charges i.e., Take or Pay Charges at the rate of Rs. 2900/MT of such shortfall in quantity. This amount Shall be paid once in a quarter. Composite supply is defined in the GST Act in Section 2(30) as follows Composite supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. Take or pay contract - HELD THAT:- Take or Pay contract is a contact which requires the buyer to either purchase and receive a minimum amount of product at a set or pay for this minimum without taking immediate Take or Pay clauses in a contract ensure compensation for the seller in the event buyer does not purchase a specified quantity of goods or services in the course of a continuous supply. The Hon ble Courts of India in a catena of cases held that Take or Pay charges are meant to compensate for breach of a contract. In the case of applicant Take or Pay Charges are evidently compensation for breach of contract and a penalty stipulated to be paid to the applicant by his buyer for not purchasing the minimum quantity specified in the agreement. Thus these charges come into existence only when there is no supply of LPG. That means supply of LPG and Take or Pay Charges are mutually exclusive and can never exist together. The forbearance comes into existence only upon breach and hence the requirements of a composite contract mentioned above are not fulfilled. Thus, sale of LPG, Collection of Take or Pay Charges for not lifting minimum assured quantity and rental charges for supplier gas system installed at the customer premises do not form a composite supply - the question of supply/Sale of LPG be treated as Principal Supply do not arise at all.

  ---

• 2021 (8) TMI 359
  Scope and applicability of GST - Territorial Jurisdiction - construction of Institute of Security and Law Enforcement Studies at Addu City in Maldives, constructed for Government of Maldives under an Memorandum of Understanding between India and Maldives - recipient of service in the instant case - place of supply in respect of the works contract for setting up of the Institute of Security and Law Enforcement Studies at ADDU City in Maldives. HELD THAT:- The Government of Republic of India Government of Maldives entered into a memorandum of understanding for construction of a Police Academy. As per this MOU the Government of India has awarded the work relating to planning, designing and execution of the project to National Buildings Construction Corporation Ltd., New Delhi. Sri Avantika Contractors Ltd., are in turn awarded the sub-contract to construct the said building by National Buildings Construction Corporation Ltd., New Delhi - Evidently Sri Avantika Contractor Ltd., have not entered into any contract with Government of Maldives for carrying out the said construction. Further they do not have any privity with respect to the MOU between the Government of Republic of India Government of Maldives. Therefore the applicant does not have any mutual or successive relationship with the Government of Maldives. Hence Government of Maldives is not the recipient of any service from the applicant. Further an agreement is reached by National Buildings Construction Corporation Ltd.. (NBCCL) New Delhi Sri Avantika Contractor Ltd to construct the building at Addu City in Maldives. Hence Sri Avantika Contractor Ltd., is supplier of the service of the works contract and National Buildings Construction Corporation Ltd.. New Delhi is the recipient of the Service - Both the applicant who is the supplier of service NBCCL who is recipient of service are located in India and therefore the place of supply is to be determined under Section 12 of the IGST Act. The proviso to Sub-Section (3) of Section 12 of IGST Act clearly mention that if the location of immovable property is intended to be located outside India, the place of supply shall be the location of the recipient.

  ---

• 2021 (8) TMI 358
  Classification of goods - rate of GST - HSN Code - Fruit bowl containing only cut fresh fruits (individually or mixture of different fruits) - Fruit bowl containing both cut fresh fruits and dry fruits and nuts - input tax credit of GST paid on plant and machinery and expenses relating to the business in case the end product is classified as belonging to 0% tax rate under GST. HELD THAT:- Since the applicant is selling cut fruits in a sealed bowl under a brand name, the same is covered under entry no.59 of Schedule I of Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017 vide HSN 1106 and is liable to tax @ 2.5% under CGST Act and 2.5% under the SGST Act, 2017. Tax rate on the fruit bowl containing both cut fresh fruits and dry fruits and nuts - HELD THAT:- The same is verified and since they are forming a single contract for supply of both goods and if the same are supplied for a single price, they would be covered under mixed supply - the mixed supply of fruits and dry fruits and nuts would be considered as the supply of dry fruits or nuts, whichever is taxable at a higher rate of tax and the tax rate applicable to that supply of dry fruit or nut would be the tax rate of the entire value of mixed supply of fruits and nuts. Supply of both cut fresh fruits and dry fruits and nuts separately and invoicing the same as separate line items - HELD THAT:- In the instant case, the applicant has informed that the customer is having the choice of choosing the dry fruits or nuts and it is not compulsory to choose any one. Hence the value of the fruit bowl is nothing but the sum of the separate supplies of fresh fruits and dry fruits and nuts. Hence the tax rate applicable is that which are applicable to the fruits, dry fruits and nuts separately as they are separate supplies - But in case, the applicant does not give the choice of choosing the dry fruits and nuts to be accompanied and sells the fresh fruits with dry fruits and nuts as a single package, then the same would amount to a mixed supply and is treated as the supply of dry fruits or nuts. Since the nature of dry fruits and nuts is not provided by the applicant, the tax rate applicable to the dry fruits or nuts would be the tax rate applicable to the entire package - supply would not amount to a composite supply as the two supplies are not naturally bundled. GST tax rate applicable to exclusive supply of fresh fruits - HELD THAT:- Regarding the dry fruits and nuts, since the applicant has not provided the details of which dry fruits and nuts are supplied, the same cannot be answered. Input tax credit - HELD THAT:- When the outward supply of goods is exempted, the taxable person is not eligible to claim the input tax credit to the extent relatable to the exempted supplies. But in the case of the applicant, since the goods are held to be taxable, the provision of section 17(2) is not applicable. Hence the person is eligible to claim input tax credit on the taxes paid on the inward supplies of taxable goods and services.

  ---

• 2021 (8) TMI 357
  Exemption from levy of GST - Labour supply to Government Departments from a registered dealer under GST Act like providing Drivers, peons, housekeeping, data Entry operators and other clerical staff - pure labour services or not - N/N. 11/2017-CT (Rate) and 12/2017 CT (Rate) both dated 28th June 2017 - Pure Labour Services as per Service Accounting Code (SAC) under chapter No. 99 or not - Applicability of dealer for work as per tender (E-procurement) as a Contractor to supply labour - deduction of TDS - Contractor under GST Act, 2017 or not. HELD THAT:- The applicant is providing manpower services like Drivers, peons, Housekeeping, Data entry operators and other clerical staff to various State Government departments. But these manpower services are not provided by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. Hence provision of such manpower services is liable to tax at 18% - The said supply of services provided by the applicant is covered under Service Accounting Code (SAC) under chapter No. 9985. Dealer can be Contractor to supply labour or not - HELD THAT:- The applicant states that, the dealer applies for work as per tender(E-procurement) as a Contractor to supply labour and TDS as per Income Tax Act is deducted u/s 194C (As a Contractor or Sub-Contractor) @ 1% and wants to know why not dealer be treated as a Contractor under GST Act, 2017. The said question does not fall under the provisions of Section 97(2) of the CGST/KGST Act, 2017.

  ---

• 2021 (8) TMI 356
  Exemption from GST - pure services - manpower services provided to Zilla Panchayat, City Corporations, Education institutions and Rural Water Supply Divisions - exempted under Article 243G and 243W or not? - HELD THAT:- The applicant is providing Manpower Services like Drivers and cleaners for solid waste management system to City Corporation / Municipalities. This is in relation to function entrusted to a municipality under article 243W of the constitution which is covered by 6th entry of twelfth schedule which says Public health, sanitation conservancy and solid waste management - The applicant also provides manpower services like Data Entry Operator, Drivers D Group etc to Zilla Panchayat departments. But these manpower services are not provided by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. Hence provision of such manpower services is liable to tax at 18%. The Provision of man power services to Zilla Panchayat, City Corporation/Municipalities are exempted only when they are provided in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution - The Provision of manpower services like cleaning staff, cook, assistant cook, teachers, staff nurse and watchman to hostels and residential schools working under Social welfare department is exempted as it satisfies both the conditions mentioned under entry no.3 of the Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017. These manpower services are provided to Social Welfare Department which is a department of State Government - These manpower services are provided to socially backward people, scheduled caste and scheduled tribe which is in relation to function entrusted to a Panchayat under article 243G of the constitution which is covered by 27th entry of eleventh schedule which says Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes . The applicant also provides manpower services like clerical staff (FDA, SDA) and Typists to district and taluk offices of Social welfare department. Even though the manpower services are provided to Social Welfare Department which is a Department of State Government the manpower services are not provided by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. Hence provision of such manpower services is liable to tax at 18%.

  ---

• 2021 (8) TMI 355
  Applicability of GST - cost of the diesel incurred for running DG Set in the course of providing DG Rental Service - HELD THAT:- The contract entered between the applicant and the recipient is for the hiring of DG Set and is a comprehensive contract with the consideration having a fixed component and a variable component. The fixed component is the monthly fixed rent charged in the invoice for the DG Set and the variable charge is the charge for the diesel used. Both are part of the same consideration and is for the contract of supplying DG Set on hire. Though it appears that the applicant is receiving the reimbursement of diesel cost, the recipient is not paying for the diesel but for the services of DG Set, which is an integral part of the supply of DG Set rental service. There is no separate contract for supply of diesel and the invoice issued for the reimbursement of diesel cost is nothing but a supplementary invoice issued for the supply of rental service of DG Set. The consideration for reimbursement of expenses as cost of the diesel for running of the DG Set is nothing but the additional consideration for the renting of DG Set and attracts CGST @ 18%.

  ---

• 2021 (8) TMI 354
  Classification of goods - rate of GST - supply of tissue papers - covered under serial No. 112 of Schedule II of the Rate N/N. 01/2017 Central Tax (R) taxable at the rate of 12% or otherwise? - HELD THAT:- N/N. 01/2017-Central Tax (Rate) dated 28.06.2017 notifies the rate of central tax in terms of schedules appended to the notification, that shall be levied on intra-state supplies of goods, the description of which is specified in the corresponding entry in column (3) of the said schedules, falling under the tariff item, sub-heading, heading or Chapter as the case may be, as specified in the corresponding entry in column (2) of the said notification. Thus the goods covered under the description of particular entry number of a particular schedule, that fall under the corresponding chapter heading/sub-heading only attract the rate specified under the respective schedule - thus, the goods must be falling under HSN 4802 and must tally with the description specified therein to attract the central tax of 6% specified in the respective schedule II. It is clearly evident from the description that GST rate of 12% is applicable only to Uncoated paper and paperboard used for writing, printing or other graphic purposes; non perforated punch-cards and punch tape paper, in rolls or rectangular/square sheets, of any size; hand-made paper and paperboard. Further the paper of heading 4801 and 4803 are excluded from the heading 4802. The impugned products being the tissue papers fall under other paper and paperboard not containing fibres obtained by a mechanical or chemi-mechanical process and hence do not get covered under uncoated paper and paperboard. Therefore the impugned products of the applicant are not covered under the entry No. 112 of Schedule II to Notification supra and hence the GST rate of 12% is not applicable to them.

  ---

• 2021 (8) TMI 353
  Rate of GST - Composite supply or mixed supply - works contract services doing original works with South Western Railways - services of repairs, maintenance, renovation and alterations of residential complex meant for use of the Railway employees - HELD THAT:- The Railways Department is a Central Government Department and hence it is clear that the services provided to them if it is for a purpose other than for business, then the same would be covered under entry 3(vi). Since the Railways is undertaking the transportation services of goods and passenger, the services provided cannot be covered under entry 3(vi)(a). However, the services of repairs, maintenance, renovation and alterations of residential complex meant for use of the Railway employees are covered under entry 3(vi) of the Notification and hence eligible for tax at 6% CGST. Rate of tax - HELD THAT:- On the question whether this contract amounts to a composite supply or mixed supply or a bunch of separate supplies, it is seen that the same cannot be a composite supply of works contracts as there is no principal supply and the works are not naturally bundled. It cannot be a mixed supply also because the valuations of each of the supply of works are valued separately and they would amount to separate contracts. Hence, there is no common price for all the contracts. Hence it can be safely decided that each of the works mentioned in a schedule is a separate contract in itself and this is bolstered by the fact that the works are not in the same place and also are different in nature. Thus, new constructions involved in the contract are liable to tax at 12% as per entry no.3(v) of N/N. 11/2017 -Central Tax (Rate) dated 28.06.2017 as amended by N/N. 20/2017 - Central Tax (Rate) dated 22.08.2017 - services of repairs, maintenance, renovation and alterations of residential complex meant for use of the Railway employees are covered under entry 3(vi) of the Notification and hence eligible for tax at 12% - Other repair works of old construction involved in the contract are liable to tax at 18% as per entry no. 3 (xii) of Notification No. 11/2017 -Central Tax (Rate) dated 28.06.2017 as amended from time to time.

  ---

• 2021 (8) TMI 352
  Classification of goods - HSN Code and rate of tax - Stainless steel cans of 40 liters capacity - flavored milk - milk cream - cold coffee - provision of subsidized lunch and refreshments to employees through contractors, supply or not. Classification of Stainless Steel cans of 40 ltrs capacity - classified under HSN code 7310 or 7323? - HELD THAT:- An applicant can seek advance ruling on matters or questions specified under Section 97(2) in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant - In the instant case, with regard to this issue, the applicant is not the supplier of the said SS cans but the recipient. Thus no advance ruling can be given on this issue as the same is beyond the jurisdiction of this authority. Classification of the product flavoured milk - to be classified under HSN code 0402 99 90 or under 2202 99 30? - HELD THAT:- It is pertinent to mention that the applicant herein being a milk producers union for Dakshina Karnataka, who in turn are part of the said Karnataka Co-operative Milk Producers Federation. Also the brand of the said flavoured milk is one and the same as that of the aforesaid Karnataka Co-operative Milk Producers Federation Limited. Thus no advance ruling can be given by this authority. Classification of the product Cream of Milk - to be classified under HSN code 0403 or 0401 - HELD THAT:- The applicant have furnished the only information that the product contain fat content of 35% and they sell it in containers. They have not furnished any information as to how the same is produced, whether it fermented or acidified, whether or not concentrated or containing added sugar or any other sweetening matter or flavored or containing added fruit, nuts or cocoa or not - applicant were requested for required information, but they furnished, vide their letter dated 09.07.2021, same information that was furnished with the application about the standards for cream under Food Safety Standards Authority of India (FSSAI) and not furnished any information substantiating their classification under HSN 0403. Thus no ruling is given in this regard for lack of adequate information. Classification of the product Cold Coffee Flavoured Milk - to be classified under HSN code 0402 99 90 or under 2202 99 30 - HELD THAT:- This question is also similar to the second question i.e., flavored milk, except that the flavor is of coffee. In this case the flavor is coffee specific. Therefore this question is similar to the second one and hence no ruling is given even in respect of this question for the reasons stated above. Canteen services or supply - provision of subsidized lunch and refreshments to employees through contractors - HELD THAT:- The applicant provides lunch and refreshments to its employees, by engaging a contractor a premises is provided to the contractor in the area of the applicant s factory. The contractor has to cook food, eatables and provide the same to the employees of the applicant at the rate specified by the applicant. The bill for the supply of food to the employees is paid by the applicant. The applicant collects a specified amount from the employees, which is less than the amount paid to the canteen contractor - applicant, in the instant case, merely pays part of the value of the canteen bill, on behalf of the employees, and not involved in provision of any supply to the contractor. Thus the instant activity of the applicant does not amount to supply in terms of Section 7(1) of the CGST Act 2017.

  ---

• 2021 (8) TMI 351
  Territorial Jurisdiction - Levy of GST - Both the transactions of Sale and purchase are done outside India - Guitar Head Books purchased from Amazon Inc.-USA (located outside India) in a context where the Guitar Head Books so purchased are not brought into India - HELD THAT:- The Customer in USA, UK and Canada places an order through Applicant s website by making payment in Foreign Currency. Applicant shares the order detail to the warehouse service provider, who in turn ships the books to customer. Applicant pays warehouse charges Shipping charges to the respective service provider. Applicant collects with the price of book along with shipping charges. Schedule III relevant to Section 7 of CGST Act 2017 specifies certain activities or transactions that shall be treated neither as a supply of goods nor a supply of services. Para 7 of the said schedule stipulates that Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India as neither supply of goods nor supply of services. In the instant case the applicant is involved in supply of books, purchased from Amazon who owned the books, from a place outside India, a non-taxable territory, to another place outside India, a non-taxable territory, without the said goods entering into India. Thus the impugned supply of books by the applicant is neither supply of goods nor supply of services, in terms of schedule II to Section 7 of the CGST Act 2017.

  ---

• 2021 (8) TMI 350
  Taxability - stage of taxation - vouchers themselves, or the act of supplying them? - rate of tax to be charged - whether the impugned vouchers are covered under money ? - HELD THAT:- It is clear that the applicant is supplying the payment instrument to various clients and they are not settling any obligation treating this as consideration. It is only at a later stage, some other person, viz. the client of the client (end user)) is using them to settle their obligation of payment of consideration, using the said vouchers instead of cash. Hence the payment instrument supplied by the applicant to their clients, cannot be covered under the definition of money at the time of supplying them. But they would take the colour of money only when it is used for payment of a consideration for the supply of goods or services procured by the end user. - Also, the applicant purchases the payment instruments and sells the same to their clients, who in turn distributes them to their clients/customers and the said customers use them to discharge their obligation to pay consideration for the goods or services procured by them from their suppliers. Hence these payment instruments would not obtain the character of money at the time of their supply by the applicant. Actionable claims are unsecured debts or it is a beneficial interest in a movable property which can be enforced by the civil courts. Further it is found that Insolvency and Bankruptcy Code 2016 defines Debt as a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. The vouchers are not covered under actionable claim as they are not debt. They have an expiry period - the entitlement of redemption is transferred or delivered unto the possession of the purchaser at the time of supply of vouchers by the applicant to its clients and therefore supply of vouchers by the applicant is not an actionable claim. Whether the impugned transaction of trading of vouchers amounts to supply in terms of Section 7(1) (a) of the CGST Act 2017 and if so whether the supply is of goods or services? - HELD THAT:- In the instant case the applicant is involved in trading of vouchers, for a consideration in the course or furtherance of business. Thus the impugned transaction amounts to supply in terms of Section 7(1)(a) of the CGST Act 2017. Whether the impugned supply of vouchers amounts to supply of goods or services? - HELD THAT:- The vouchers printed on paper are undoubtedly goods, as they are tangible - The product/item in the instant case i.e. voucher is undoubtedly a moveable property and squarely gets covered under intangible goods. Further Schedule II to Section 7 of the CGST Act 2017 stipulates the activities or transactions to be treated as supply of goods or supply of services. Para 1(a) of Schedule II to Section 7 specifies that any transfer of the title in goods is supply of goods. The transaction of sale of vouchers in the instant case involves transfer of the title and hence they are covered under goods. Though both electricity and computer software are intangibles, they are covered under Tariff heading 2716 and 8523 respectively - the e-vouchers are taxable as per residual entry no. 453 of third schedule of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 at the rate of 18% GST. Place of supply - HELD THAT:- In the instant case neither the applicant nor their customer is aware of the transaction or the purpose for which the voucher would be redeemed. Hence the time of supply would be governed by the clause (a) of sub-Section (5) of Section 12 of the CGST Act - In case of Cash Back Vouchers, the applicant is not aware of the date of redemption and these vouchers are redeemed by way of cash back and are not identifiable with any particular goods/ services and hence the time of supply would be governed by the clause (a) of sub-Section (5) of Section 12 of the CGST Act - In the case of Multiple Option Vouchers, the applicant is not aware for what purpose and when the voucher would be redeemed, hence the time of supply would be governed by the clause (a) sub-Section (5) of Section 12 of the CGST Act.

  ---

• 2021 (8) TMI 349
  Claim of IGST export refund - HELD THAT:- There is a clear finding of fact which has been recorded by the Division Bench of the High Court of Gujarat in its case AWADKRUPA PLASTOMECH PVT. LTD. VERSUS UNION OF INDIA [ 2020 (12) TMI 1116 - GUJARAT HIGH COURT] , that the respondent had claimed an IGST export refund only to the extent of the customs component. SLP dismissed.

  ---

• 2021 (8) TMI 347
  Validity of assessment order - certain discrepancies in the invoices accompanied by e-way bills - principles of natural justice - HELD THAT:- The issue decided in the case of SRI MUNIAPPA STEELS VERSUS THE ASSISTANT COMMISSIONER (ST) SINGANALLUR NORTH CIRCLE COIMBATORE [ 2021 (5) TMI 262 - MADRAS HIGH COURT] where it was held that The conclusion in the assessment order, in fact, mentions the statement recorded by the third party dealer and in the light of the fact that this statement forms the basis of assessment, the petitioner ought to have been granted opportunity to peruse the statement and put forth its objections to the same. This has not been done, constitutes principles of violation of natural justice. The impugned order is set aside. Let the statement and other particulars relied upon by the Officer in the impugned orders of assessment be supplied to the petitioner within a period of three (3) weeks from today. Thereafter, the petitioner shall be afforded an opportunity of hearing to put forth its submission and also file objections. Upon consideration thereof, speaking orders shall be passed by the Officer within a period of six (6) weeks from date of first hearing. Petition disposed off.

  ---

• 2021 (8) TMI 346
  Provisional attachment of the petitioner s bank account - despite lapse of more than a year from the date provisional attachment of the petitioner s bank account was ordered, the Joint Commissioner has not lifted such order of provisional attachment - Section 83(1) of the Central Goods and Services Tax Act read with Rule 159(1) of the Central Goods and Services Rules - HELD THAT:- The writ petition is allowed by directing the Joint Commissioner to immediately communicate to the petitioner s banker that the attachment order ceases to be operative and that the petitioner may be permitted to operate the relevant bank account which was under attachment. Let this exercise be completed as earlier as possible, but not later than seven (7) days from date. Sub-section (7) of Section 107 of the CGST Act ordains that where the appellant has paid the amount under sub-section (6), recovery proceedings for the balance amount shall be deemed to be stayed - Since the petitioner has deposited Rs. 1,25,392/- under sub-section (6) of Section 107 of the CGST Act and an acknowledgment to that effect is available, the respondents shall be restrained from initiating further proceedings for recovery of the balance amount till such time the appeal is finally disposed of. Petition allowed.

  ---

• 2021 (8) TMI 344
  Denial to lift the order of provisional attachment of the petitioner s bank account - no proceedings are pending against the petitioner under Sections 62 or 63 or 64 or 67 or 73 or 74 of the CGST Act - Jurisdiction to invoke the power conferred by Section 83 of the CGST Act read with Rule 159(1) of the CGST Rules did not exist - HELD THAT:- In the considered opinion of the Court, the approach of the respondent no.3 that a fraud has been practiced, by itself and without there being any provision in the relevant statute conferring power which could be invoked for such purpose, was not sufficient ground to clothe her with the power to order provisional attachment of a bank account under Section 83 read with Rule 159(1). It is also well settled that where a person on whom fraud is committed is in a position to discover the truth by due diligence, fraud is not proved. To empower a Commissioner to order provisional attachment on account of presence of vitiating circumstances as the one under consideration before the respondent no.3, the statute itself ought to have provided so and the power to attach property, which is of a drastic nature, ought not to have been exercised on facts and in the circumstances. As a matter of fact, no proceedings under Sections 62 or 63 or 64 or 67 or 73 or 74 of the CGST Act are pending; hence, the respondent no.3 committed an error of jurisdictional fact for which the Court is constrained to hold that she had no authority to invoke the power conferred by Section 83 of the CGST Act read with Rule 159(1) of the CGST Rules. Section 83 of the CGST Act read with Rule 159(1) of the CGST Rules empowers a Commissioner to protect the interests of the revenue by way of provisional attachment, but such provisional attachment cannot be ordered without fulfillment of the condition(s) precedent - In the absence of fulfillment of such conditions(s) precedent, the respondent no.3 could not have protected the interest of the revenue in the manner she proceeded to pass the impugned order. The order impugned cannot be sustained - Petition allowed.

  ---

• 2021 (8) TMI 341
  Classification of services - rate of GST - construction service provided by the Applicant to M/s. Provident Housing Limited under the project Provident Neora Provident Capella to M/s. Puravankara Limited under the project Provident Parksquare - applicability for lower rate of CGST as provided in Sl.No.3-Item (V)-sub item (da) vide N/N. 11/2017-CT (Rate) dated 28-06-2017 - HELD THAT:- Regarding the condition whether the project is an affordable housing project which has been given infrastructure status vide notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F.No. 13/6/2009-INF, dated the 30th March, 2017, the applicant has not provided any evidence in support of his claim that the above projects are covered under the said notification. If the above projects are affordable housing projects and are given the infrastructure status as per notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F.No. 13/6/2009-INF, dated the 30th March, 2017, the contract of supply by the applicant would be covered under the Entry No. 3(v)(da) of Notification 11/2017 Central Tax (Rate) dated 28.06.2017 and liable to tax at the rate of 12%. In case the projects are not an affordable housing projects and are not given the infrastructure status as per notification of Government of India, in Ministry of Finance, Department of Economic Affairs vide F.No. 13/6/2009-INF, dated the 30th March, 2017, the contract of supply by the applicant would not be covered under the Entry No. 3(v)(da) of Notification 11/2017 Central Tax (Rate) dated 28.06.2017, but covered under Entry No. 3(xii) of Notification 11/2017 Central Tax (Rate) dated 28.06.2017 and liable to tax at the rate of 18%.

  ---

• 2021 (8) TMI 318
  Transition/Carry forward of accumulated CENVAT credit of EC and SHEC to GST regime, through TRAN-1 - liability of interest and penalty accrues or not when ITC of Cesses is reversed - HELD THAT:- The unutilised Education Cess and Secondary and Higher Education Cess in the hands of the appellant had become dead CENVAT Credit claim in the year 2015 itself with these levies dropped by the Finance Act 2015 and therefore, there is no question of it being claimed as a right to be carried forward after 01.07.2017 - Since Section 140 was changed retrospectively w.e.f. 01.07.2017 (date of origin of GST) vide CGST (Amendment) Act, 2018 and Explanation 3 of Section 140 was also inserted retrospectively w.e.f. 01.07.2017, which makes it categorical that the transition the CENVAT Credit pertaining to cesses is not allowed and intention of legislature was very clear that these are dead claim and ought not to be transitioned. Thus, the amendment vide Section 140 through CGST Amendment Act, 2018 was done retrospectively w.e.f. 01.07.2017 because transition of cesses was never intended by the legislature. Thus, it is ample clear that carry forward of cesses as ITC through TRAN-1 by the appellant was not proper and in the instant case bounteous statutory provisions are available to restrict admissibility of cesses as ITC in GST to appellant. Whether liability of interest and penalty accrues when ITC of Cesses is reversed, or not? - HELD THAT:- The intention of the Legislature was never to transition the CENVAT Credit pertaining to cesses for the fact that Explanation (3) to Section 140, which barres transition of any cesses, was made effective retrospectively w.e.f. 01.07.2017. Further, reversing the credit pertaining to Ed. Cess and SHE in GSTR-3B for the month of September-2018 does not mean that the appellant became so entitled to carry forward even a dead claim of unutilised Ed. Cess and SHE after 01.07.2017. Hence, once ineligible ITC has been availed interest liability according to Section 50 sticks to anyone - the contention of the appellant regarding non-applicability of interest and penalty after reversing the Cenvat in question is not tenable as per aforesaid statutory provisions the transition of CENVAT Credit pertaining to cesses is not allowed and intention of legislature was very clear that these are dead claim and ought not to be transitioned. Thus, the amendment vide Section 140 through CGST Amendment Act, 2018 was done retrospectively w.e.f. 01.07.2017 because transition of cesses was never intended by the legislature. Appeal disposed off.

  ---

• Income Tax

• 2021 (8) TMI 362
  Disallowance u/s 80IB - CIT (Appeals) confirming the action of assessing officer in holding that income from housing project in the name of Hampton Park belongs to AOP and not in the individual capacity as co-owner - HELD THAT:- As decided in own case [ 2021 (4) TMI 1253 - ITAT SURAT] assessee was allowed deduction under section 80IB of the Act. - Decided in favour of assessee.

  ---

• 2021 (8) TMI 361
  Disallowance of annuity payment made to wife of a deceased partner of the firm - HELD THAT:- It is the case of the assessee that the assessee firm had made a payment as payment of annuity to the wife of the deceased Partner of the assessee firm Shri Jahangir Garat. This payment was made as per the agreed terms vide Clause-12:4 of the Partnership Deed dated 22nd June 2006 and, hence, the claim has to be allowed. Revenue authorities have disallowed the claim of the assessee in view of the decision of the Co-ordinate Bench of the Tribunal rendered in assessee s own case in preceding assessment year i.e., 2008-09 in Gagrats v/s. ACIT, [ 2015 (3) TMI 1395 - ITAT MUMBAI] wherein exactly similar issue has been decided by the Tribunal against the assessee and in favour of the Revenue by following the precedence being maintained on this issue by the Tribunal in assessee s own case cited supra. Before us, assessee has not brought any material on record which is contrary to the decision of the Tribunal as aforesaid to enable this Bench to take a different view. - Decided against assesee.

  ---

• 2021 (8) TMI 338
  Deemed dividend addition u/s 2(22)(e) - assessee company being common significant and beneficiary share holder in Pandit Automotive Pvt. Ltd. who advanced loans and advances to Ashok Automotive Sales and Services Pvt. Ltd. - case of the AO was that the assessee is a common significant and beneficiary shareholder in both the entities i.e. PAPL and AASSPL, therefore, the said loan was reached the hands of the assessee being a virtue of common shareholder - CIT(A) also confirmed that the benefit of passing of loan from PAPL with ultimately reached the hands of assessee and rejected the claim of assessee has no role in independent commercial role of two subsidiaries - HELD THAT:- Admittedly there is no dispute as the facts emanating from records the PAPL advanced to AASSPL and in which the assessee is a common significant and beneficiary shareholder. It is amply clear the loan of above said amount has been reached to the AASSPL but not the assessee company. The assessee company being major shareholder we cannot say the loan advanced to PAPL reached the hands of the assessee. Therefore, in our opinion, the addition made by the AO as confirmed by the CIT(A) is not justified, if at all any addition to be made u/s. 2(22)(e) of the Act it should be in the hands of AASSPL as loan amount reached the hands of said entity but not the assessee. Therefore, the invocation of provisions u/s. 2(22)(e) of the Act treating an amount as deemed dividend in the hands of the assessee is not justifiable. Hence, the grounds raised by the assessee are allowed.

  ---

• 2021 (8) TMI 336
  Addition u/s 68 - mistake of introduction of authorized capital - assessed the income as different from returned income - Assessee argued that it typographical eror at the time of filing up the Form of return of income and the same ought to have been considered - HELD THAT:- We notice that the mistake made by the tax consultant at the time of filing return of income that he had cut and pasted the same capital and investment details of some other assessee and this mistake was appreciated and taken note by the respective Assessing Officers in the case of Ms. Leena Joseph Lopes, and Shri Jani Navani. Even in this case also, the Assessing Officer and the learned CIT(A) should have verified the financial records of the assessee of earlier assessment years and after due verification, they could have identified the mistake, but they failed to reconcile the actual capital and investment of the assessee. After considering the above facts on record, we are of the view that tax practitioner had made the above inadvertent mistake while filing the return of income which is not the real capital and investment of the assessee. Therefore, we direct the Assessing Officer to delete the addition made under section 68 of the Act. Accordingly, grounds raised by the assessee are allowed.

  ---

• 2021 (8) TMI 335
  Penalty u/s 271(1)(c) - non specification of charge - whether for concealment of income or furnishing of inaccurate particulars of income? - concealment of income or for furnishing inaccurate particulars of income - HELD THAT:- Notice u/s 274 r.w.s. 271(1)(c) of the Act should have specifically indicated in which limb of Sec. 271(1)(c) the penalty proceedings were initiated i.e. whether for concealment of income or furnishing of inaccurate particulars of income. Thus, in absence of a particular limb, no penalty should have been levied on the assessee as the determination of such limb is sine qua non for imposition of penalty u/s 271(1)(c). AO has simply mentioned in his order with regard to initiation of penalty by stating that the assessee has concealed the income or furnishing inaccurate particulars of income by introducing non-genuine purchases thus it is a fit case for initiating the penalty proceedings u/s 271(1)(c) of the Act. Later on a pre-printed/cyclostyle performa by way notice u/s 274 r.w.s 271(1)(c) of the Act without striking off the unnecessary portions of the notice was served upon the assessee, we are of the view that, if at all, the A.O. was of the view that the assessee has concealed the income or furnishing inaccurate particulars of income then in that eventuality, he should have deleted or not mentioned the other limb for imposition of penalty. This act of the A.O. clearly indicates that the entire exercise of initiation of penalty proceedings has been done in a casual and cavalier manner. The notice u/s 271 should be specific for imposition of penalty u/s 271 (1) (c) of Act i.e. for concealment of particulars of income or furnishing inaccurate particulars of income as has been held in the case of CIT Vs. M/s SSA s EMERALD MEADOWS [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT] . We are of the view that concealment of income or furnishing of inaccurate particulars of income are two different forms and they cannot be inter mixed, therefore, we quash the penalty proceedings initiated U/s 271(1)(c). Trading addition - Bogus purchases - HELD THAT:- It is a settled law that additions based on estimation where higher trading profit as declared against the gross profit has been declared therein, in that cases, no penalty is leviable as it cannot be held that in those cases, the assessee has concealed income or of furnishing inaccurate particulars of income within the provisions of Section 271(1) (c) of the Act. This proposition has been upheld in case of CIT Vs. Dhillon Rice Mills [ 2000 (9) TMI 10 - PUNJAB AND HARYANA HIGH COURT] and in case of Hari Gopal Singh [ 2019 (4) TMI 1997 - ITAT JAIPUR] - In both these decisions, it has been held by the Hon ble Courts that the provisions of Section 271(1)(c) are not attracted to cases where the income of an assessee is assessed on estimate basis and additions are made therein. As per the facts of the present case, the additions were made on estimation basis whereas the gross profit declared by the assessee was much better than the previous years. Even in the case of CIT Vs. Aero Traders P. Ltd. [ 2010 (1) TMI 32 - DELHI HIGH COURT] the profit was estimated after rejection of the books of account due to certain discrepancies, imposed a penalty on the assessee on the ground that it was clear case of furnishing of inaccurate particulars of income. However, the Tribunal held that it did not amount to concealment of income or furnishing of inaccurate particulars of income therefore, deleted the penalty and Hon ble High Court of Delhi confirmed the order of ITAT. Further the Hon ble Rajasthan High Court in case of Shiv Lal Tak . [ 2001 (2) TMI 62 - RAJASTHAN HIGH COURT] also upheld the said proposition. Further glaring facts have also been placed on record before us wherein we noticed that the ld. CIT(A) in assessee s own case for the previous year i.e. A.Y. 2007-08 had deleted the penalty levied by the A.O. on identical facts and circumstances, therefore, taking into consideration the totality of facts and circumstances of the case as mentioned above, we are of the view that since the additions in the present case were made purely on the basis of estimation, therefore, no penalty is leviable or attracted in the present case. Accordingly, we direct to delete the penalty levied u/s 271(1)(c) .

  ---

• 2021 (8) TMI 333
  Bogus LTCG - Long-term capital gain exempt under Section 10(38) denied - HELD THAT:- Nothing has been brought on record by Revenue to show that the persons investigated, including entry operators or stock brokers, have named the appellant was in collusion with them. No finding specifically against the appellant has been made in the Investigation team report as appearing on record and this cannot be any ground for holding the appellant guilty or linked to the wrong facts of the persons investigated. Perusal of records further suggests that in the instant case, the appellant is not connected with M/s Turbo Tech Engineering Ltd. or their promoters, directors or any other person who exercised any control over M/s Turbo Tech Engineering Ltd. or any so-called entry operator. As a matter of fact, no element is available showing that the appellant has indulged in any such questionable activity or has been part of the modus operandi as alleged by the Ld. A.O. It appears on record that assessee has not given the opportunity to cross-examine the person based on whose statement the addition have been made in the hands of the assessee. That it is a settled position of law that finding as recorded in one case cannot be relied in other cases until and unless the material as gathered and to be used against the assessee is not provided to the assessee and an opportunity of cross examination is not allowed to the assessee. Hence, material as collected by the Investigation Wing of Kolkata was general in nature and cannot be used in the specific case of the appellant, moreso when the name of the appellant was never included in their statements. Even if name of the appellant appeared in their statements, it could not have been used against the appellant until and unless the appellant was allowed an opportunity to cross examine the person whose statement was recorded during the course of survey/searches. Hence, the material as received by the assessing officer behind the back of the appellant cannot be used against the appellant. As relying on SMT. KRISHNA DEVI, HARDEV SAHAI GUPTA (GARG) , SMT. BINDU GARG [ 2021 (1) TMI 1008 - DELHI HIGH COURT] we do not hesitate to allow the claim made by the appellant towards LTCG - Decided in favour of assessee.

  ---

• 2021 (8) TMI 332
  Addition u/s 68 - Difference in share premium received and the fair value of equity shares as per the report of the registered valuer - assessee failed to forward any cogent reasons as to why the shares were allocated at such a huge premium vis- -vis the valuation report as obtained by the assessee itself from the registered valuer - HELD THAT:- CIT(A) has erred inasmuch as, he has not examined the information obtained about the various offshore companies of Mauritius and France from whom the information was obtained and from where the source is layered. Secondly, there is no cogent explanation of difference between the values as given to the RBI and that given to Income tax Authorities on the touchstone of the legal maxim of approbate and reprobate as referred by Hon ble Supreme Court in the case of Suzuki Parasrampuria Suitings Pvt. Ltd. [ 2018 (10) TMI 484 - SUPREME COURT] . Further the issue in substance here is not addition under section 56 but addition under section 68. In this view of the matter also the case laws referred by learned Counsel of the assessee are not applicable. Furthermore the decision of Green Infra of Hon ble Bombay High Court was not dealing with layered remittance from source abroad. Moreover the issue here clearly is assessee applying opaque device which comes under the ken of exposition of Hon ble Supreme Court decision in Mc Dowell Co. Ltd. [ 1985 (4) TMI 64 - SUPREME COURT] With the above observation, we remit the issue to the file of learned CIT(A) for fresh adjudication. Needless to add, assessee should be granted adequate opportunity of being heard. Addition u/s 56(2) - towards the difference in the fair market value of shares of Rochem separation systems (India) Private Limited - CIT-A deleted the addition - HELD THAT:- There is nothing mentioned in the Act, which proscribes the application of section 69B is cases such as the present one. In this view of the matter in our considered opinion here as noted above since there is use of opaque colourable device the reference to ITAT decision in Rupee Finance and Management 2007 (2) TMI 240 - ITAT BOMBAY-J] does not fructify the assessee s case. Thus, Ld. CIT(A) has erred in allowing the assessee s appeal despite the fact that the assessee s investment falls under provisions of section 69B.there is some lack of clarity regarding the valuation aspect of the shares as the AO has started with a figure of Rs. 6,875/- and finally considered the value at Rs. 7,067/-. Moreover, valuation aspect was never examined by learned CIT(A). Hence, the valuation aspect needs to be examined by the first appellate authority. Since we have remitted the first issue to the file of Ld. CIT(A), we deem it appropriate to remit this issue also to the file of Ld. CIT(A). Ld. CIT(A) is directed to consider this issue also afresh.Appeal filed by the revenue is allowed for statistical purpose.

  ---

• 2021 (8) TMI 331
  Exemption u/s. 10(23C)(vi) denied - eligibility to Assessment u/s 11 - Charitable activity u/s 2(15) - an expenditure which did not even form a part of application claimed - reason for withdrawal of approval issued u/s. 10(23C)(vi) of the Act was that the trust has not applied its income in accordance with the provisions contained in clause [a] of the third proviso - HELD THAT:- As the assessee wholly and exclusively carried out its objects for which it was established and even if there is a violation as suggested by CCIT, it was not claimed for the purpose of application of income. Further, there is no allegation by the CCIT that assessee has not carried out the objects for which it was established and examination of the accounts of the assessee shows that assessee duly carried out its activities so as to attain its objects mentioned in the trust deed. There was no activities carried out in violation of its object clause so as to deny exemption u/s. 10(23C)(vi) of the Act. Accordingly, this ground of appeal of the assessee is also allowed.

  ---

• 2021 (8) TMI 330
  Unexplained jewellery u/s 69A - purchase or gold and silver jewellery - HELD THAT:- In respect of 266.138 grams of gold jewellery purchased during the financial year relevant to A.Y 2012-13 amounting to Rs. 782,233/-, the assessee has come forward with an explanation that these purchases have been made on the occasion of marriage of his son, Shaurav Pareek and source of such purchases has been stated to be cash payment of Rs. 4,92,233/- and remaining through cheque. And we find that the source of cash payment has been reasonably explained by way of cash withdrawals by the assessee from his bank accounts around the same time when the marriage of his son was solemnized. Thus to the extent of Rs. 782,233 worth of gold jewellery, the same is taken as explained by the assessee by way of purchase bills and withdrawals/payment from his bank account. Regarding the remaining jewellery worth Rs. 136,631/-, we find that no sufficient explanation is available on record in terms of source of cash payment towards purchase of such jewellery. The disclosure of gold jewellery in the balance sheet as on 31.03.2016 is demonstrate of purchases made during the financial year 2015-16 relevant to A.Y 2016-17 in absence of anything on record that such purchases were made in the earlier period and thus doesn t come to the aid of the assessee in terms of explanation of possession of the jewellery during the financial year relevant to impugned assessment year. Therefore, the addition to the extent of Rs. 136,631/- towards unexplained gold jewellery is hereby confirmed. Regarding silver articles, AO has recorded a finding that assessee has furnished no explanation and the ld CIT(A) has recorded a finding that the assessee has failed to explain the source of acquisition of silver articles. Before us, it has been contended for the first time that the silver articles weighing 3844.50 grams are supported by purchase bills seized during the course of search. As we have held mere purchase bills are not sufficient to explain the source of purchase of silver items where such purchases are made in cash and in absence of any explanation on record in terms of availability of cash in the hands of the assessee at the relevant point of time of purchase, such purchases cannot be treated as explained by the assessee. In the result, the addition made by the AO is hereby confirmed. Addition on account of undisclosed receipt u/s 68 - seized document has been found from the residential premises of the assessee and during the course of assessment proceedings, the assessee has contended that the said document pertains to his son, shri Shaurav Pareek which was however not accepted and addition was made in the hands of the assessee - HELD THAT:- Post completion of the impugned assessment proceedings, basis the aforesaid submissions of the assessee that these and other documents seized from his premises are related to his son, shri Shaurav Pareek, proceedings in the hands of shri Shaurav Pareek were initiated u/s 153C of the Act and in terms of notice u/s 142(1) referring to seized document under consideration the AO has stated that since the said documents pertains to shri Shaurav Pareek, he was called upon to furnish his explanation and submissions before the AO. In response, shri Shaurav Pareek submitted that the said document pertains to him and given his explanation regarding the entries found in the said document. There is thus a clear finding by both the Revenue and the admission by shri Shaurav Pareek that the said documents pertains to him and in such a scenario, the contention of the assessee has to be accepted that the said document pertains to his son and we therefore find that the addition, if any, where required as per law needs to be made in the hands of shri Shaurav Pareek and there is no basis for making addition based on such seized documents in the hands of the assessee. In the result, the addition so made is directed to be deleted and the ground of appeal is allowed.

  ---

• 2021 (8) TMI 329
  Taxability of receipts on hire of vessel on time charter basis - non existence of PE - receipts from the time charter of the vessel Smit Borneo brought to tax in its hands as royalty - charges received on account of time charter services rendered by the Appellant for the vessel Smit Borneo to Leighton India Contractors Private Limited in India were rendered for the use of industrial, commercial or scientific equipment, thereby treating the same as Royalty under section 9(1)(vi) - Whether time charter services shall be covered within the definition of the term Royalty under Article 12(4) of the India - Singapore Double Tax Avoidance Agreement ( DTAA )? - HELD THAT:- As decided in own case [ 2020 (11) TMI 415 - ITAT MUMBAI] as the assessee had received charges on account of time charter services rendered by its vessel Smit Borneo along with the crew to Leighton India Contractor Pvt. Ltd., and not for allowing the latter the use or right to use of industrial, commercial, or scientific equipment, the same therein cannot be treated as royalty within the meaning of Article 12(3)(b) of the India-Singapore tax treaty. As such, we herein not being able to subscribe to the view taken by the lower authorities, to the extent they had concluded that the amounts received by the assessee for time charter of its vessel viz. Smit Borneo was to be treated as royalty under Article 12(3)(b) of the India-Singapore tax treaty, therein vacate the same. As we have vacated the view taken by the A.O/DRP that the consideration received by the assessee from time charter of its vessel viz. Smit Borneo was to be treated as royalty as per Article 12 of the India-Singapore Tax Treaty, therefore, we refrain from adverting to the other contentions advanced by the ld. A.R to support its claim, which thus are left open We fallow the judicial precedence and of the substantive view that the receipts from the charter of vessel Smit Borneo cannot be treated as royalty and direct the assessing officer to delete the addition as per the ratio of the decision discussed in the above paragraphs and allow the grounds of appeal in favour of the assessee. Taxability of reimbursement of expenses received by the assessee in respect of Smit Borneo vessel and the contractors - HELD THAT:- We find that the relevant details and allocations are to be verified. Accordingly, we remit the disputed claim to the file of the assessing officer for limited purpose to verify and examine the facts with the evidences. The assesses should be provided adequate opportunity of hearing and shall cooperate in submitting the information and allow the grounds of appeal for statistical purpose Additional TDS credits - HELD THAT:- As assesses has submitted the supporting claim of evidences before the A.O. We are of the opinion that the assessee should not be deprived of its legitimate right for TDS credits. Accordingly, the assessing officer is directed to verify and examine the documents filed in support of TDS claim.

  ---

• 2021 (8) TMI 327
  Rejection of books of accounts - GP estimation - data shown in the audit report was not co-related with the data shown in the return of income of the assessee - sales of residential unit and sales of open plot of land - HELD THAT:- Assessee has failed to substantiate the discrepancy noted by the Assessing Officer. The assessee has not furnished any detail to clarify and explain the abnormality observed by the Assessing Officer in respect of the various transactions including the sale of open plot of land showing losses during the year under consideration. Even during the course of appellate proceedings before the ld. CIT(A) the assessee has again failed to furnish any additional evidences and relevant detail to clarify the various points and to controvert the additions made during the course of assessment proceedings. Even during the course of appellate proceedings before us the assessee has neither furnished the complete details which was remained to be filed before the Assessing Officer nor specified relevant reasons for not making compliance. We consider that there was no other alternative before the lower authorities than to applying the rate of estimated gross profit on the basis of preceding assessment, however considering the turnover of Rs. 2,97,95,124/- compared to the turnover of Rs. 77,58,677/- shown in the preceding year we consider that it would be reasonable to estimate the gross profit @ 15% as against gross profit estimated @ 18% by the ld. CIT(A). Accordingly, we direct the Assessing Officer to estimate the gross profit @ 15% and make the addition of net profit. In view of the discrepancies as cited above in this order and failure of the assessee for not furnishing the relevant details to establish the correctness and completeness of the account, the ground no. 1 of the assessee against rejecting the books of account u/s. 145(2) is dismissed. - Decided partly in favour of assessee.

  ---

• 2021 (8) TMI 325
  Revision u/s 263 - Deduction u/s 54F - Long Term Capital Gains earned on sale of two different properties - HELD THAT:- Dominant objective being the construction of a residential house and not purchase of plot of land and where for the purposes of proper and convenient enjoyment of a residential house, where the assessee wishes to provide for open space for garden or other utilities, etc., lands appurtenant to the building can be considered as part of the residential house, however, the question is the extent of such land which can be held as appurtenant to the building. Though we have held earlier that the assessee has the necessary flexibility to buy two plots of land measuring 622 sq. yards forming one contiguous piece of land which by necessary implications means that the assessee given her social status and family requirement wishes to built a residential house of size and scale which would require such a large plot of land and has actually gone ahead and built such a residential house - where on facts, we find that the assessee has merely carried out construction of a small room measuring 625 sq. ft on one plot of land and even by assuming for sake of argument that such a room qualifies as residential house, can it be held that remaining vacant area measuring 90% approx. of total area will qualify as land appurtenant to proper and convenient enjoyment of such a residential house. In the instant case, where there is 90% approx. of open space and merely 10% of built up area by way of construction of a room, can it be said that assessee has constructed a residential house with land appurtenant thereto. In our considered view, the said matter has clearly escaped the attention of the AO and to that extent, the order so passed is clearly erroneous and prejudicial to the interest of the Revenue. Construction of a room as to whether the same qualifies as a residential house on such contiguous piece of land measuring 612.22 sq.yards - The term residential house has not been given any statutory definition and, thus, has to be assigned meaning as understood in common parlance. As per dictionary meaning, it means abode, a dwelling place or a building for human habitation. A building, in order to be habitable by a human being, is ordinarily required to have minimum facilities of washroom, kitchen, electricity, sewerage, etc. In the instant case, though it has been claimed by the ld AR before the ld PCIT that besides the room, a kitchen and toilet has been built, however nothing has been brought on record before the ld PCIT in terms of building plan, photographs etc which lends credence and demonstrate such facilities being actually built and therefore, where the ld PCIT has held that only a small room has been built, we don t see any infirmity in the said findings and the AO having failed to verify the same during the course of assessment proceedings, setting-aside the same for necessary verification and examination as to whether the construction so carried out qualifies as a residential house or not. In the entirety of facts and circumstances of the case, we find that the claim of deduction u/s 54F has not been properly examined by the AO as per the requirement of law and accordingly, uphold the exercise of jurisdiction by the ld PCIT u/s 263 of the Act and directs the AO to examine the matter of claim of deduction u/s 54F a fresh in light of aforesaid discussion and decide as per law after providing reasonable opportunity to the assessee. Appeal of the assessee is disposed off in light of aforesaid directions.

  ---

• 2021 (8) TMI 324
  Assessment u/s 153A - Addition u/s 68 - penny stock purchases - unabated assessment year - incriminating material found in search or not? - HELD THAT:- The undisputed facts are that the return of income was filed by the assessee for the instant year on 06.09.2010 declaring an income - Search and seizure action was conducted on 09.04.2015 and thus on the date of search, the assessment has attained finality and is an unabated assessment on the date of search. We find merit in the arguments of the Ld. A.R. that in the case of unabated assessment year, addition can only be made on the basis of incriminating material found during the course of search and not otherwise. In the present case, we have noted that no incriminating material was found during the course of search in relation to the purchase and sale of penny stocks and the authorities below have relied on the general investigation that assessee has made purchase and sale in penny stocks on the basis of documents which are already on records and made huge addition of bogus long term capital gain. AO had discussed the modus operandi of the penny stock companies and operators involved in carrying out the purchase and sale of shares. However, nowhere the AO has referred to incriminating material found during the course of search in relation to purchase and sale of shares. We have also examined the documents found during the course of search by the search team as furnished by the ld DR in the form of paper book but find that these documents only contained the details of sale of shares only - The case of the assessee is squarely covered by the decision of the co-ordinate bench of the Tribunal Smt. Kalpana Mukesh Ruia [ 2021 (1) TMI 93 - ITAT MUMBAI] - Decided in favour of assessee. Addition u/s 68 - unexplained cash credit by treating the sale proceeds yielding long term capital gain on sale of shares as non genuine - HELD THAT:- Long term capital gain on the sale of shares of M/s. Splash Media Infra Ltd. is not a bogus capital gain as the AO has solely relied on the report of investigation/search team and has not carried out any further verification on the basis of documents furnished by the assessee. Similarly, the position of long term capital gain earned on the sale of shares of M/s. Comfort Intech Ltd. is same as the assessee has filed all the necessary evidences before the AO and AO has failed to carry out any further investigation to prove that the long term capital gain earned by the assessee is bogus and fictitious. - Decided in favour of assessee.

  ---

• 2021 (8) TMI 322
  Assessment u/s 153A - Assessment barred by limitation - Addition u/s. 68 on account of unexplained cash credits - documents/material belonging to the appellant were found during the course of search on PIL - HELD THAT:-The terminal date for determination of six preceding assessment years that would lay upon under section 153C read with section 153A of the Act would decidedly be the date of handing over of the documents. Here the satisfaction note recorded by the A.O, of M/s Prakash Industries Ltd. is 22.12.2014, as well as by the A.O. of the appellant is on 22.12.2014, which is to be taken as the date of handing over of documents and date. Six preceding assessment years begin with A.Y. 2009-10 and end with A.Y. 2014-15. It would be the date of handing over the documents or date of recording of satisfaction will be the date for determining the date for calculating the preceeding six assessment years is well settled by the judgement of RRJ Securities [ 2015 (11) TMI 19 - DELHI HIGH COURT] We hold that no assessment under section 153C could have been made in respect of A.Y. 2007-08 as it was clearly barred by limitation. Hence, there is no option but to annul the assessment and all consequent additions made in the assessment also stand deleted. - Decided in favour of assessee.

  ---

• 2021 (8) TMI 320
  Penalty u/s 271AAB - assessee was not subjected to search - HELD THAT:- No search in the case of present assessee before us and the assessee has admittedly accepted the jewellery in a statement under section 132(4) of the Act pursuant to which notice under section 153C was issued to the assessee. The co-ordinate Benches have taken the view that the penalty under section 271AAB can be levied in the hands of a searched person only. The assessee herein is not subjected to search, meaning thereby, penalty under section 271AAB cannot be levied in the hands of the assessee. Even though, the Assessing Officer has not cited any reason for dropping penalty proceedings, yet the fact remains that the penalty under section 271AAB cannot be levied in the hands of the assessee, as opined by coordinate Benches. Hence, very initiation of revision proceedings is not in accordance with law and the same cannot be sustained. Even otherwise, there is possibility of two views on the issue of levying of penalty under section 271AAB of the Act in the hands of the assessee. Accordingly, we quash the revision order passed by the learned Principal Commissioner of Income-tax. - Decided in favour of assesee.

  ---

• 2021 (8) TMI 319
  Penalty u/s 271(1)(c) - defective notice - Non stuck any of the twin charges - HELD THAT:- AO at the time of recording of the satisfaction did not show that how both the charges are tested for levy of penalty u/s 271(1)(c) - There may be certain circumstances where both the charges may sustain, but the AO at the time of recording satisfaction must demonstrate that how both the charges are satisfied. Even in the penalty order, such exercise has not been carried out. The issue is squarely covered in favour of the assessee by the decision in the case of SSA s Emerald Meadows [ 2016 (8) TMI 1145 - SC ORDER] in favour of the assessee - in the case of Sahara India Life Insurance Corporation [ 2019 (8) TMI 409 - DELHI HIGH COURT] has held in favour of the assessee. In view of this the orders of the lower authorities with respect to the levy of penalty under Section 271(1)(c) are not sustainable. Accordingly, we delete the penalty levied by the ld. Assessing Officer - Appeal of the assessee is allowed.

  ---

• Customs

• 2021 (8) TMI 343
  Seeking provisional release of the export consignment - despite compliance of the conditions contained in the order, the consignment was not released - Section 110A of the Customs Act, 1962 - HELD THAT:- There are no reason to keep the application pending in view of the order passed by the adjudicating authority on March 11, 2021 without any reservation. Once the reasoned order for provisional released has been passed in respect of the relevant consignment under the provisions of section 110A of the said Act and the conditions for such provisional release have been complied with by the applicant/petitioner, we fail to comprehend as to how such an administrative order could be cited as a precedent in future cases so as to preclude us from making an order as prayed for in the interim application. The interim application stands disposed of with a direction upon the respondents to effect provisional release of the relevant consignment as early as possible, but not later than 10 days from service of a copy of this order on them

  ---

• 2021 (8) TMI 342
  Maintainability of petition - appealable order or not - date of communication of the impugned order - Section 128 of the Customs Act, 1962 - HELD THAT:- The grievance ventilated by the Petitioner stands satisfied, as the order-in-original has been received by the Petitioner. Needless to state, as and when an appeal is preferred by the Petitioner along with an application seeking condonation of delay, the concerned Authority shall decide the same in accordance with law. The writ petition along with the pending application is disposed of.

  ---

• 2021 (8) TMI 323
  Maintainability of appeal - monetary limit involved in the appeal - refund claim - HELD THAT:- The amount of alleged refund sanctioned which is now appealed, in all the above appeals, is less than Rs. 5,00,000/-, to which the Notification of the Central Board of Excise Customs (C.B.E.C.) in F. No. 390/Misc./163/2010-JC dated 17.12.2015 applies whereby, as a policy decision to reduce the volume of litigation, the C.B.E.C. had revised the monetary limits for filing appeals by the Department before the CESTAT, which is at Rs. 10,00,000/-. Though a subsequent Notification in F.No. 390/Misc./116/2017-JC dated 04.04.2018 was issued deleting sub-clause (c) of paragraph 3, but however, the monetary limit has not been varied. The Revenue appeals are not maintainable and are liable to be dismissed - Appeal dismissed.

  ---

• Corporate Laws

• 2021 (8) TMI 337
  Seeking sanction of Scheme of Arrangement - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT:- From the material on record, the Scheme of Arrangement appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition filed by the Petitioner Companies is made absolute in terms of prayer clauses of the Company Scheme Petition. The Scheme of Arrangement is hereby sanctioned and declared the same to be binding on the First Petitioner Company and the Second Petitioner Company and their respective Shareholders - Application allowed.

  ---

• 2021 (8) TMI 334
  Approval of Scheme of Amalgamation - sections 230 232 of the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- Various directions regarding holding and convening of various meetings issued - various directions regarding issuance of various notices also issued. The scheme is approved - application allowed.

  ---

• 2021 (8) TMI 321
  Seeking restoration of Name of company in the register of ROC - Section 252(3) of the Companies Act, 2013 - HELD THAT:- During the relevant time the Company had people in its employment and was carrying its business activities - during the period under default the Company was carrying on its business activities and was a going concern. The Appellant submitted that the Company will comply with all the statutory obligations. The Registrar of Companies, Odisha may be directed to restore the Company s name in the Register. We accept the contention of the appellant that the Company was a going concern when its name was struck off. Therefore, in the facts and circumstances of the matter and the documents/details on record, we accept the request of the appellant and direct the Registrar of Companies, Odisha to restore name of the Company in Register. Application allowed.

  ---

• Insolvency & Bankruptcy

• 2021 (8) TMI 326
  Seeking exclusion of period of 312 days (i.e. 25.03.2020 to 31.01.2021 being the period of lockdown imposed by the Central Government and State Government in the wake of Covid-19 outbreak from the period stipulated for completion of liquidation - seeking extension of 90 days from 01.02.2021 (i.e. 270 days when calculated from 05.08.2020) as per Regulation 44(2) of the IBBI (Liquidation Process) Regulations 2016, after excluding the Covid Lock down period - HELD THAT:- It is to be noted here that the Regulation which was prevalent at the time of passing the Liquidation Order mandates the Liquidation process to be completed within a period of 2 years and as such the liquidation process in relation to the Corporate Debtor is required to be completed on or before 05.08.2020. However, the Liquidator not being in a position to complete the process and under the circumstances, the Liquidator has filed the present Application under Regulation 44(2) of IBBI (Liquidation Process) Regulations, 2016 (amended upto 15.12.2016) for continuation of the Liquidation period of the Corporate Debtor for a further period of one year. Regulation 44(2) of IBBI (Liquidation Process) Regulations, 2016, as it stood at the time of passing the Liquidation order, is taken into consideration for the facts of the present case and it contemplates that if the liquidator has failed to liquidate the Corporate Debtor within two years then he has to make an application to the Adjudicating Authority to continue such liquidation, along with a report explaining why the liquidation has not been completed specifying the additional time that shall be required for completion of the liquidation. By taking into consideration all the facts, this Authority feels that it is just and proper to extend the Liquidation period for a further period of 90 days and as such the Liquidation period of the Corporate Debtor is extended for a period of 90 (ninety) days from the date of this Order and the Liquidation process in relation to the Corporate Debtor is required to be completed on or before 14.10.2021. Further, the Liquidator shall make every endeavour to complete the liquidation process within the extended period and not to seek for any further extension. Application allowed.

  ---

• Service Tax

• 2021 (8) TMI 345
  Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - petitioner s application/declaration under the Scheme was rejected by a remark show cause notice issued after 30th June/1st July - validity of such rejection considering the clarificatory Circular No. 1074/07/2019-CX dated December 12, 2019 considering the clarificatory Circular No. 1074/07/2019-CX dated December 12, 2019 - non-application of mind on such rejection - HELD THAT:- The Circular dated December 12, 2019 has been issued by the Central Board of Indirect Taxes Customs, New Delhi clarifying such statutory scheme. Clause 2 of the Circular records that references were received by the Board on the scheme which were examined and the issues raised therein are being clarified in the context of the various provisions of Finance (No. 2) Act, 2019 and Rules made therein. Sub-clause (viii) of Clause 2 as relied on behalf of the petitioner is a significant clarification of the principal scheme and is the main pillar of the petitioner s contention on his application becoming eligible. The question which required determination in the petitioner s case was whether the petitioner who was issued a show cause notice subsequent to 1st July, 2019, i.e., on 10th October, 2019 and which came to be adjudicated by an order passed in original dated 26th December, 2019, would be eligible to take the benefit of the scheme and make a declaration being a case falling under the arrears category. This more particularly, when the petitioner had stated that he has complied with the other conditions, in as much as he made a declaration that he shall not file an appeal challenging the order dated 26th December, 2019. These issues were required to be considered by the Competent authority before the petitioner s declaration could be rejected. On a reading of the impugned communication, it appears that the rejection is by a computer generated and/or a mechanical process by a remark that show cause notice issued after 30th June, 2019 . Certainly there is no application of mind on the petitioner s application on the provisions as made by clarificatory circular, as no reasons are furnished as to why the petitioner s declaration cannot be entertained applying clause 2(viii) of the said Circular. Appeal disposed off.

  ---

• 2021 (8) TMI 328
  Recovery of service tax - Tour Operator Services - amount received on account of ticket booking - rent contract booking - luggage booking - direction to rework the amount of tax demanded - N/N. 06/2005 dated 01.03.2005 - HELD THAT:- The demand pertaining to ticket booking and bus contract booking, as was raised vide the impugned show cause notice was directed to be reworked based upon the benefit of Notification No.06/2005 dated 01.03.2005 - this finding of adjudicating authority is followed by certain calculations vide which the earlier demand confirmed with respect to bus contract Booking and ticket booking amount has further been reduced to Rs. 3,62,293/-. IThe grievance of the appellant that the demand which can be confirmed after giving the benefit of Notification remains only of Rs. 59,044/-. Also that the adjudicating authority though has reduced the earlier demand confirmed but has not expressly given the reason to how the amount of Rs. 3,62,293/- is still the liability of the appellant even after giving the benefit of said Notification. These observations are sufficient for me to hold that it is difficult to still appreciate as to whether the proper benefit of exemption notification has been extended in favour of the appellant. It is directed that the matter be remanded again with the specific directions to the adjudicating authority to give specific reason for arriving at the calculation about the demand confirmed against the appellant - appeal allowed by way of remand.

  ---

• Central Excise

• 2021 (8) TMI 340
  Levy of penalty under Rule 26 of the Central Excise Act, 2002 - valuation of the air coolers supplied by M/s Mutual industries to the appellant - HELD THAT:- The Show Cause Notice examine the evidence recovered from M/s Symphony and records the statement of various employees of M/s Symphony to allege that the sale price of symphony is much higher than the price at which they purchasing coolers. Learned Counsel assert that the investigation in all these cases was common. The agreement of the appellant with various vendors including Mutual Industry was same as other. The allegations in the Show Cause Notice are also same. From the facts, it is evident that the charges and the allegations are similar. The evidence relied upon by the Revenue is also similar in the circumstances. In the instant case the facts and dispute involved are similar to the case of M/S. RAVI KIRAN PLASTICS PVT. LIMITED AND OTHERS VERSUS COMMISSIONER OF CENTRAL EXCISE ST., VADODARA [ 2014 (2) TMI 211 - CESTAT AHMEDABAD] where it was held that the charges levelled against the manufacturers are not sustained. Consequently, no penalty was imposed on the appellant in that case. Penalty set aside - appeal allowed - decided in favor of appellant.

  ---

• 2021 (8) TMI 339
  Seeking refund of the MODVAT Credit balance available in the account on the date of surrender of the registration - rejection on the ground of time limitation - Monetising of credit balance - Difference of opinion - Majority order - HELD THAT:- The issue of show cause notice, as an indispensable statutory pre-requisite for recovery either of duties or of amounts refunded in excess of entitlement and as a public declaration of intent, authorizes the assumption of jurisdiction by the empowered official. Not unnaturally, with appeal being an outcome of adjudication, the contents thereof limit the appellate hierarchy too unless superimposed by notice in exercise of such empowerment, as section 35A of Central Excise Act, 1944 does, on an appellate authority. It is not that the authority competent to dispose that claim for refund has commenced and concluded its findings at the threshold on limitation; the order records that the eligibility on merit was initially taken up and it would appear that, having noted the decision of the Hon ble High Court of Karnataka in UNION OF INDIA VERSUS SLOVAK INDIA TRADING CO. PVT. LTD. [ 2006 (7) TMI 9 - KARNATAKA HIGH COURT] , the determination veered off on another path that, possibly, was more amenable to rejection of the claim with least controversy but leaving unarticulated the conclusion on eligibility. The impugned order has also recorded that the grounds of appeal were reiterated during the personal hearing. It is, therefore, not open to the appellant to now contend that eligibility on merit was not one of the grievances placed before the first appellate authority; to seek to curtail the jurisdiction with such a prayer is contrary to facts. Determination of eligibility on merit was, thus, within the jurisdiction conferred by the appellant on the first appellate authority. On the finding in the impugned order of ineligibility for encashment of credit in balance, which has relied upon decisions available then, the opinion of Hon ble Member (J) that the Tribunal, or any of the lower authorities, are bound to defer decision is no longer applicable as the Larger Bench of the Hon ble High Court of Bombay, in M/S. GAURI PLASTICULTURE P. LTD., BOMBAY DYEING MANUFACTURING CO. LTD., M/S. SIMPLEX MILLS CO. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, INDORE, THE COMMISSIONER OF CENTRAL EXCISE, MUMBAI IV, THE UNION OF INDIA THROUGH THE COMMISSIONER OF CENTRAL EXCISE MUMBAI I [ 2019 (6) TMI 820 - BOMBAY HIGH COURT] , has confirmed the ineligibility to claim refund of unutilised credit which places the final outcome beyond the pale of uncertainty and, additionally, relegates the threshold issue to that of mere academic interest with no claim for adjudicatory re-determination. Concurring with Hon ble Member (T), it is held that the finding on ineligibility for monetising of credit balance has been correctly determined and remand is not warranted. Registry is accordingly, directed to place the records herein before the designated Division Bench for the majority decision to be pronounced. Majority order - HELD THAT:- In view of majority view, the appeal is rejected and dismissed.

  ---

• CST, VAT & Sales Tax

• 2021 (8) TMI 348
  Validity of assessment order - process amounting to manufacture or not - refining of oil from crude vegetable oil into refined vegetable oil - periods 2004-05 and 2005-06 - HELD THAT:- The Supreme Court in the case of BP. OIL MILLS LTD. VERSUS SALES TAX TRIBUNAL AND OTHERS [ 1998 (9) TMI 507 - SUPREME COURT] after considering a slew of judgments, has considered this identical issue holding the same in favour of the assessee. The conclusion of the assessing authority to the effect that the process of conversion of crude vegetable oil into refined vegetable oil would not amount to manufacture is set aside - Petition allowed.

  ---