TMI Tax Updates - e-Newsletter
August 23, 2021

Case Laws in this Newsletter:

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

Articles

1. GST ON CAN SEAT COVERS: ADVANCE RULING

   By: Dr. Sanjiv Agarwal

2. Arbitration under MSMED Act

   By: CSLalit Rajput

Notifications

GST - States

1. 21/2021-State Tax - dated 27-7-2021 - Himachal Pradesh SGST

Amendment in Notification No. 73/2017-State Tax dated the 16th January, 2018

2. 20/2021-State Tax - dated 27-7-2021 - Himachal Pradesh SGST

Amendment in Notification No. . 4/2018-State Tax dated the 30th January, 2018

3. 19/2021-State Tax - dated 27-7-2021 - Himachal Pradesh SGST

Amendment in Notification No. 76/2018-State Tax dated the 31st December, 2018

Highlights / Catch Notes

GST

• Leasing of Overseas Tank Containers Deemed a Service Under CGST Act; GST Applies Only if Purchase Option Used.

  Case-Laws - AAR : Levy of GST - leasing of tank containers taken form a supplier - lessor located outside India and the tank containers do not reach India - Finance lease - The terms of the agreement clearly indicate that the property in goods passes to the applicant only when he exercises the option failing which the property has to be returned back to the lessor at a specific deposed indicated by him. Therefore during the period of lease the transaction remains a service and the moment the option to purchase the goods is exercised by the applicant it becomes the transaction of sale. Hence the transaction made by the applicant does not fall under Entry 1 (c) of Schedule II to the CGST Act. - Liable to GST - AAR
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• Court Allows Claim for Interest on Delayed Input Tax Credit Refund; Emphasizes Timely Action by Respondents.

  Case-Laws - HC : Refund of input tax credit along with Interest - Pursuant to the interim order dated 06.04.2021, the respondent no. 4 credited the principal amount in the electronic credit ledger of the petitioner only on 08.04.2021 and filed affidavit to this effect. - this Court disposes of the present writ petition enabling the petitioner to file appropriate petition before the respondent no.4 for the purposes of lodging a claim of statutory interest for the period from issuance of Form GST PMT-03 (annexure-6) till its credit vide order dated 08.04.2021. - the petitioner cannot be made to suffer on account of laches on the part of the respondents. - HC
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• Court Quashes Ex-Parte Order Due to Violation of Natural Justice; Bank Account Attachment Vacated for Reconsideration.

  Case-Laws - HC : Maintainability of petition - fair opportunity of hearing and sufficient time was not provided - order passed in ex-parte - violation of principles of natural justice - Order quashed and set aside - Attachment of bank accounts vacated. - Matter restored back. - HC
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Income Tax

• High Court affirms limited review power on Section 147 Income Tax Act assessments; assessing officer's belief is key.

  Case-Laws - HC : Validity of reopening of assessment u/s 147 - if the assessing officer has cause or justification to know or suppose that income has escaped assessment, it can be said that he has reason to believe that an income has escaped assessment. In such a case, the High Court would not be clothed with the jurisdiction to examine the reasons which weighed in the mind of the assessing officer to issue the notice - this is not the appropriate stage for the purpose of examining the reasons - HC
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• Court Rules Lease Termination Receipt Taxable as Income, Not Non-Taxable Capital Receipt.

  Case-Laws - AT : Nature of receipt against termination of lease agreement - taxable under the head income from other sources or income from house property or not taxable as capital receipt - Appellant has submitted that it is a capital receipt but the appellant itself has shown it as revenue receipt and claimed standard deduction. - Additions confirmed - AT
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• Assessing Officer's classification of deposits as anonymous donations u/s 115BBC ruled unlawful due to clear creditor identification.

  Case-Laws - AT : Addition u/s 68 - anonymous donations u/s 115BBC - the action of the A.O. to treat the deposits under reference as anonymous donations u/s 115BBC is completely unlawful since all the loan creditors had opening balances and had also filed copies of ITRs, Thus, by no stretch of imagination could the AO treat these loans as anonymous donation u/s 115BBC. - AT
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• Deemed Dividends: Unsecured Loans Between Related Companies Not at Arm's Length, Section 2(22)(e) Applied in GI Power Case.

  Case-Laws - AT : Deemed dividend - unsecured loans - Group companies - since the two concerns are closely related to each other and the transactions are not at arm’s length. It is within their exclusive knowledge as to why they have treated the same as ICDs and argued before CIT(A) Jammu in the case of GI Power Corporation Ltd., as loan. Therefore, the argument of the ld. Counsel that provisions of section 2(22)(e) are not applicable does not hold good. - AT
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• ITAT decision errors aren't rectifiable u/s 254(2); appeal to High Court for relief on Section 271(1)(c) penalties.

  Case-Laws - AT : Rectification u/s 254 - Penalty u/s 271(1)(c) was deleted - Without prejudice to the above, assuming the findings of the ITAT is not correct than it would not amount to a mistake apparent from record which could be rectified under the provision of section 254(2) of the Act. If the decision of the ITAT is wrong than the aggrieved parties can approach to the Higher Judicial forum i.e. Jurisdictional High Court. But such findings cannot be rectified on the reasoning that there is a mistake apparent from the record. If we do so it would amount to review its own order by the ITAT which is not permissible. - AT
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• Taxing Profit Element in Grey Market Purchases Deemed Fair by CIT(Appeals); VAT Savings Considered.

  Case-Laws - AT : Bogus purchases - estimation of profit - It could be safely concluded that assessee could have made purchases only from grey market in order to have savings from VAT and incidental profit element thereon. It would be just and fair to bring to tax only the profit element embedded in the value of such disputed purchases in as much as the ld. CIT(A) accepted the fact that the goods made by the assessee from the aforesaid suppliers had been actually consumed by it in the projects. - AT
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• Court Deletes Additions After Assessee Proves Genuine Purchases with Substantial Evidence; No Contradictory Material Found.

  Case-Laws - AT : Bogus purchases - information that was received by the A.O from the DGIT(Inv.) - now when the assessee had not only substantiated the authenticity of the purchases claimed to have been made from the aforementioned parties on the basis of supporting documentary evidence which had not been dislodged by the lower authorities, but had also got the confirmations from the respective parties alongwith their “affidavits”, therefore, there could have been no justification in the absence of any material proving to the contrary to doubt the genuineness of the purchases claimed by the assessee to have been made from the aforementioned parties. - Additions deleted - AT
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IBC

• Tribunal's Role in Assessing Intent for Contempt u/s 425 of Companies Act, 2013: Key Responsibilities Explained.

  Case-Laws - AT : Contempt Jurisdiction - ‘Aggrieved’ person - It is for the Tribunal to find out whether its order has been disobeyed in a ‘wilful’ manner and the mental element is to be adjudged by the ‘Tribunal’ indicating the state of mind of the ‘contemnor’ - When the ‘Tribunal’ has the requisite power under the Section 425 of the Companies Act, 2013 to punish a person/contemnor, then, the Tribunal is to exercise its power and to adjudicate the Contempt Petition on its file, of course, on merits - AT
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Service Tax

• Appellants Not Liable for Service Tax Pre-Section 66A; Discharged Tax for Credit, Creating Revenue-Neutral Scenario.

  Case-Laws - AT : Reverse charge mechanism - wrongly availed credit and utilized the credit - the appellants were not liable to pay service tax under reverse charge mechanism prior to introduction of Section 66A in the Finance Act, 1994. - Although, there was no liability to pay the tax as per law, the appellants have discharged the tax liability as a service recipient and availed credit. So the situation is revenue neutral also. - AT
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Central Excise

• High Court Orders Resolution by December 2021 for Case with 2006 SCN and 2010 Writ Petition Order.

  Case-Laws - HC : Delay in proceeding with SCN - SCN was issued in 2006 - Order in Writ petition was passed in 2010 - Reply to SCN was filed in 2010 - A corrigendum was issued in 2016, PH was fixed and extensive reply was filed in 2017 - matter was kept pending in the call book as a policy decision - Directions issued to decide the matter not later than 6-12-2021 - HC
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• Tribunal's 2017 order on CENVAT credit stands; Commissioner oversteps remand scope, denies credit u/r 2(l)(A).

  Case-Laws - AT : CENVAT Credit - input services - The Department did not file any appeal against this order dated 17.11.2017 of the Tribunal and so the order passed by the Tribunal attained finality. The Commissioner was, therefore, required to examine only this limited issue on remand, but as the order would indicate, the Commissioner denied CENVAT credit observing that the work was basically of development of a civil structure of mining area by way of construction of decline/ramp and the same would merit classification as ‘construction services’, which services had been excluded under rule 2(l)(A) of the Credit Rules w.e.f. 01.04.2011. The Commissioner, therefore, in regard to the subsequent two show cause notices also went beyond the remand order. - AT
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Case Laws:

• GST

• 2021 (8) TMI 892
  Levy of GST - leasing of tank containers taken form a supplier - lessor located outside India and the tank containers do not reach India - Finance lease - HELD THAT:- The constitution has been amended to include Entry 12A in the Article 366 which enables levy of tax on supply of goods services except on alcoholic liquor for human consumption. Further the definition of goods in the Section 2(d) of the CST Act is amended to include only petroleum and liquor and Section 2(g) has to be applied only to the goods enumerated in Section 2(d). Therefore sales tax under CST Act can be levied only on these goods whereas tax on supply of goods and services is levied under CGST/SGST and IGST Acts - Further under Accounting Standard-19 of Accounting Standards of India the Ieased Asset will be shown in the books of lessee and this does not alter the nature of a lease transaction. The law mandates that the transfer of title in goods happens under an agreement before the property in goods passes to the purchaser. Further the law mandates that such agreement shall have a clause which stipulates that goods wall necessarily pass at a future date to the purchaser - The law does not provide for an option to purchase the goods at the end of the lease period but makes it an obligation on the part of contracting parties to necessarily transfer such property on the completion of period of agreement. A plain reading of the relevant terms of the contract clearly indicate the consensus ad idem or the meeting of minds between the parties to the contract that the agreement is prima facie for lease. There is no fixed lease term but the contract only mentions minimum lease period which may extend beyond such minimum period - There is no binding obligation for purchase of the goods at the end of the lease term. The agreement does not confer any title upon the lessee but a mere option to purchase based on fulfilment of certain conditions. The terms of the agreement clearly indicate that the property in goods passes to the applicant only when he exercises the option failing which the property has to be returned back to the lessor at a specific deposed indicated by him. Therefore during the period of lease the transaction remains a service and the moment the option to purchase the goods is exercised by the applicant it becomes the transaction of sale. Hence the transaction made by the applicant does not fall under Entry 1 (c) of Schedule II to the CGST Act. Thus, the applicant is liable to pay IGST on importation of lease services into India.

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• 2021 (8) TMI 891
  Provisional attachment of property - Section 83 of the GST Act - HELD THAT:- It is needless to say that the powers under Section 83 of the GST Act with regard to provisional attachment could be exercised only during pendency of proceedings either under sections 62 or Section 63 or Section 64 or Section 67 or Section 73 or Section 74. Hence, prima-facie the exercise of powers under Section 83 of the GST Act appears to be arbitrary and dehors the said provision. Under the circumstances respondent No. 4 is called upon to state on affidavit as to under what circumstances the impugned order of attachment was passed. Put up on 02.09.2021 - In the mean time, the respondent No. 4 is directed to lift the provisional attachment forthwith, if not done so far.

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• 2021 (8) TMI 890
  Seeking grant of bail - grievance of the petitioner is that the respondent has been arrested in a socio-economic offence and thus, could not have been released on bail at least until investigation was completed - HELD THAT:- List on 16th December, 2021. In the meantime, the competent officer of the petitioner will file an affidavit indicating as to whether the petitioner was in a position to file complaint within a period of 60 days from the arrest of the respondent so that the respondent would not have been entitled to a statutory bail like the co-accused.

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• 2021 (8) TMI 889
  Detention of petitioner - Section 132 of the Gujarat Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017 read with Section 120B of the Indian Penal Code - HELD THAT:- This Court finds that the State Authorities can not be permitted to resort to the stringent provisions like detention under the Prevention of Anti Social Activities Act against the petitioners. The State is restrained from resorting to the said option against the petitioners in these cases. Petition allowed.

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• 2021 (8) TMI 882
  Seeking grant of bail - prayer for expeditious disposal of bail application - HELD THAT:- Considering the prayer of the applicant and in view of the entire facts and circumstances of the case, it is directed that if the applicant appears and surrenders before the court below within 30 days from today and applies for bail, his prayer for bail shall be considered and decided as expeditiously as possible in accordance with law. For a period of 30 days from today or till the applicant surrenders and applies for bail, whichever is earlier, no coercive action shall be taken against him. However, in case, the applicant does not appear before the Court below within the aforesaid period, coercive action shall be taken against him - Application disposed off.

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• 2021 (8) TMI 881
  Attachment of Bank Account of petitioner - Case of petitioner is that the petitioner has lost its force since the maximum period is one year of an order of attachment under Section 83 of the CGST Act, 2017 - HELD THAT:- This writ petition is disposed of by holding that the attachment order dated 25th October, 2019 being Annexure P-2 to the writ petition has lost its force and action of the respondent bank in not allowing the petitioner to operate his bank account in question on the basis of the aforesaid attachment order is not legally justified and the bank shall not act any further on the basis of the aforesaid impugned attachment order dated 25th October, 2019. Writ petition is disposed off.

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• 2021 (8) TMI 879
  Refund of input tax credit along with Interest - petitioner seeking to take re-credit of aforesaid amount in their electronic credit ledger at the time of filing monthly return or direct the respondents to grant re-credit immediately in the petitioner s electronic ledger - HELD THAT:- Pursuant to the interim order dated 06.04.2021, the respondent no. 4 credited the principal amount in the electronic credit ledger of the petitioner only on 08.04.2021 and filed affidavit to this effect. This Court finds that although the Form GST PMT-03 were issued by the respondents as back as on 28.06.2018 but there is no worthwhile explanation from the side of the respondents as to why the credit was not made immediately thereafter. The contention of the learned counsels for the respondents that the petitioner should have filed his grievance in Form GST PMT-04 after issuance of Form GST PMT-03 is devoid of any merits in view of the fact that no such stand has been taken by the respondents in the counter affidavit. This Court also finds that the cause of action for claiming interest on the amount credited has arisen only upon the credit having been made on 08.04.2021 without any interest. This Court disposes of the present writ petition enabling the petitioner to file appropriate petition before the respondent no.4 for the purposes of lodging a claim of statutory interest for the period from issuance of Form GST PMT-03(annexure-6) till its credit vide order dated 08.04.2021 - Petition disposed off.

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• 2021 (8) TMI 877
  Vires of Section 16(2)(c) of Central Goods and Services Tax Act, 2017 - input tax credit - Denial of input tax credit on the ground that the petitioner has already paid tax on the ground that the selling dealer did not deposit the tax with the Government revenue would amount to double taxation - HELD THAT:- The issues require consideration. Hence, rule. Since legislation framed by the Parliament is under challenge, let there be notice to the learned Attorney General. For the limited purpose of considering the petitioner s request for interim relief for removing attachment of the Tax Credit Account, let notice be returnable on 23.08.2021 .

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• 2021 (8) TMI 876
  Maintainability of petition - fair opportunity of hearing and sufficient time was not provided - order passed in ex-parte - violation of principles of natural justice - HELD THAT:- This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, we form an opinion that the order is bad in law. This is for two reasons- (a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences. Order quashed and set aside - Attachment of bank accounts vacated. - Matter restored back. Petition disposed off.

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• 2021 (8) TMI 843
  Refund of IGST - rejection of the refund on the ground of the limitation - Communication of deficiency memo to appellant or not - existence of deficiency in the refund application or not - time limitation as per provisions of Section 54 of CGST Act, 2017 - HELD THAT:- The original refund application of the appellant was not filed with all relevant documents as prescribed under Section 54 (4) of CGST Act, 2017 read with Rule 89 (2) of CGST Rules, 2017. Further, there are no reason to rely on screen shot of RFD-01 as it was only a draft stage application, it could be possible that while submitting the application, appellant might have not uploaded certain mandatory documents on the common portal. In view of said circumstances, the proper officer has issued the said deficiency memo in consonance to the provisions of laws and rules made thereunder. Time Limitation - HELD THAT:- It is evident that the refund claim should be filed within two years from the relevant date. The refund was filed against ITC accumulated on account of export of goods without payment of tax, so relevant date under such cases shall be counted from the date of EGM of Shipping Bills, in plain it can be stated that the date on which goods were left Indian frontier either by sea or air. On perusal of Shipping Bills associated with said refund, it can be stated that Shipping Bill No. 8689481/02.11.2018 (EGM dated 06.11.2018) of sum Rs. 26,06,527/- only hit by the clause of limitation and is time barred. For the purpose of reckoning relevant date in the instant case is the date on which such goods pass the frontier which suitably can be derived as date of filing EGM in terms of the Customs procedure. As per customs procedure, EGM means (export goods manifest) a document which is filed by the carrier of the export consignment before the departure of the carrier (shipments, airlines etc.,) and it is considered as proof of shipment. Accordingly, the refund amount of Rs. 26,05,527/- as claimed in respect of Invoice No. EXP/MDV/18-19/01 dated 26.10.2018, Shipping Bill No. 8689481 dated 02.11.2018, EGM No.22147 date of EGM 06.11.2018 is hit by the clause of limitation as it is time barred and rest of the claim in the instant case falls within the limitation period, therefore, the refund of the same may be considered for sanction in view of provisions of laws rules made thereunder and as per procedure laid down under the various circulars issued from time to time by the CBIC, New Delhi. Appeal allowed in part.

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• 2021 (8) TMI 842
  Scope of SCN - HELD THAT:- The case involved payment of differential tax while the Division Bench proceeded on the basis that it is a self assessment. List the Special Leave Petition on 16 July 2021.

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• Income Tax

• 2021 (8) TMI 886
  Reopening of assessment u/s 147 - Assessment time barred - applicability of the newly inserted provisions of Section 148A and the amendments brought inter alia in Section 149 - Constitutionality of certain provisions of CBDT Notification No.20/2021 dated 31.03.2021 and Notification No.38/2021 dated 27.04.2021 - HELD THAT:- The similar challenge to Constitutionality of these provisions is made before the various High Courts. The High Court of Delhi in Mudra Finance Limited vs. Income Tax Officer Ward 17(1), Delhi [ 2021 (8) TMI 197 - DELHI HIGH COURT] in Mon Mohan Kholi vs. Assistant Commissioner of Income Tax Anr. [ 2021 (8) TMI 196 - DELHI HIGH COURT] , Tata Communications Transformation Services Limited [ 2021 (8) TMI 196 - DELHI HIGH COURT] and High Court of Calcutta in Babaria Properties and Investments Private Limited Anr. vs. Union of India and others. [ 2021 (8) TMI 788 - CALCUTTA HIGH COURT] have entertained the similar petitions and granted interim protection to the petitioners therein. As respondents prayed for time to file reply but did not dispute the aforesaid contentions of learned counsel for the petitioner that similar petitions have been entertained by other High Courts and interim protection has been granted. Considering the aforesaid, the respondents are permitted to file reply in the matter. Till the next date of hearing, no coercive action be taken against the petitioner pursuant to the impugned notifications.

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• 2021 (8) TMI 885
  Reopening of assessment u/s 147 - Assessment time barred - applicability of the newly inserted provisions of Section 148A and the amendments brought inter alia in Section 149 - Constitutionality of certain provisions of CBDT Notification No.20/2021 dated 31.03.2021 and Notification No.38/2021 dated 27.04.2021 - HELD THAT:- The similar challenge to Constitutionality of these provisions is made before the various High Courts. The High Court of Delhi in Mudra Finance Limited vs. Income Tax Officer Ward 17(1), Delhi [ 2021 (8) TMI 197 - DELHI HIGH COURT] in Mon Mohan Kholi vs. Assistant Commissioner of Income Tax Anr. [ 2021 (8) TMI 196 - DELHI HIGH COURT] , Tata Communications Transformation Services Limited [ 2021 (8) TMI 196 - DELHI HIGH COURT] and High Court of Calcutta in Babaria Properties and Investments Private Limited Anr. vs. Union of India and others[ 2021 (8) TMI 788 - CALCUTTA HIGH COURT] have entertained the similar petitions and granted interim protection to the petitioners therein. As respondents prayed for time to file reply but did not dispute the aforesaid contentions of learned counsel for the petitioner that similar petitions have been entertained by other High Courts and interim protection has been granted. Considering the aforesaid, the respondents are permitted to file reply in the matter. Till the next date of hearing, no coercive action be taken against the petitioner pursuant to the impugned notifications.

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• 2021 (8) TMI 884
  Validity of reopening of assessment u/s 147 - writ petition on the ground that the jurisdictional fact for issuance of such notice is absent - HELD THAT:- We do not appreciate the attempt of the petitioner to have the notice u/s 148 of the Act interdicted by presenting this writ petition on the same day of lodging of objection to the notice by submitting a detailed reply. Obviously, the objection was intended to persuade the Assistant Commissioner to revoke the impugned notice. On the contrary, if indeed the petitioner perceived that there was no justification for the Assistant Commissioner to issue the impugned notice since the jurisdictional fact was absent, the petitioner could have raised the said point at the first instance before this Court prior to submitting to the jurisdiction of the Assistant Commissioner. Petitioner appears to have pursued the writ remedy as a parallel remedy, which is impermissible in law. Now, with the pleadings on record, it does appear to us, at least, prima facie, that the contention of the petitioner of an error of jurisdictional fact having vitiated the proceedings initiated by the Assistant Commissioner is not tenable. As decided in Rajesh Jhaveri Stock Brokers (P.) Ltd [ 2007 (5) TMI 197 - SUPREME COURT] the Supreme Court analysed the provisions of Section 147 of the Act and observed that if the condition precedent for invocation of powers under Section 147 read with Section 148 to 152 of the Act is present, i.e., there is prima facie finding that income assessable to tax has escaped notice, it would be open to the assessing officer to proceed for reopening of the assessment proceedings. We also find from such decision that if the assessing officer has cause or justification to know or suppose that income has escaped assessment, it can be said that he has reason to believe that an income has escaped assessment. In such a case, the High Court would not be clothed with the jurisdiction to examine the reasons which weighed in the mind of the assessing officer to issue the notice. As has correctly been contended by Ms. Razaq, this is not the appropriate stage for the purpose of examining the reasons assigned by the Assistant Commissioner. We decline interference and relegate the petitioner to the forum before the Assistant Commissioner. The impugned notice shall be taken to its logical conclusion in accordance with law. If any adverse finding is rendered against the petitioner, obviously the same must have the support of reasons. Thereafter, the petitioner shall be at liberty to explore his remedy in accordance with law.

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• 2021 (8) TMI 883
  Exemption u/s 11 - Registration u/s 12AA denied - proof of charitable activity u/s 2(15) - ITAT allowed the exemption - HELD THAT:- The undisputed facts are that the assessee-Trust was established and is administering Matriculation School offering education both in Tamil and English medium. It has also established a Teachers Training College during the financial year 2007-08. The income for four financial years was taken into consideration by the appellant and noting the figures, the appellant opined that the income is in excess of expenditure for both the educational institutions and came to the conclusion that the Trust has been established with a clear motive of earning profits. As appreciated the assessee-Trust for establishing the school with medium of instruction in Tamil and that itself was held to be a charitable activity carried on by the assessee-Trust and by providing free bus service, it would motivate the students to attend the school and get themselves educated in Tamil medium and merely because, bus services were provided free of cost cannot be treated to be an activity for making profit. The assessee s institution was rightly regarded as an institution carrying on educational activity and in the absence of any material available with the appellant, the Tribunal was right in itself observing that there was nothing on record to show that the Teachers Training College has been established solely for making profit. Furthermore, the Tribunal was right in its observation that excess of income over expenditure by itself is not a reason to hold that the assessee-Trust is not engaged in charitable activities. There was no finding that the Trustees had applied the monies of the Trust for their personal benefit or for any other purpose other than education. The infrastructure facilities, which were provided by the assessee-Trust were also rightly taken note of by the Tribunal. The observation of the appellant that only two of the Trustees were authorized to administer the Trust, the same was held to be not a reason to reject the case of the assessee-Trust and it is common that the day-to-day activities of a Trust cannot be entrusted to all 14 Trustees and therefore, the President and Secretary of the Trust have to administer the Trust and there is nothing wrong in such an arrangement made by the assessee - Tribunal was right in observing that if in any particular assessment year, if there was any error in the manner in which the funds of the Trust were administered, it would be open to the Assessing Officer to examine the case and decide as to whether the assessee-Trust was entitled to the benefit of Section 11 of the Act for a particular assessment year or not. Thus, the Tribunal rightly held that the assessee-Trust was entitled to registration under Section 12AA of the Act. For the above reasons, we find that there is no error in the order passed by the Tribunal by directing registration to be granted to the assessee-Trust under Section 12AA of the Act - Decided in favour of assessee.

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• 2021 (8) TMI 874
  Addition in respect of the Supervisory and Risk Management expenses - CIT-A deleted the addition - HELD THAT:- CIT(A) holding the issue will be decided in the appeal of sister concern and held that in instant case the main question was that expenditure should be capitalized or not and from the fact discussed, it is clear that expenditure is not required to be capitalized and held that finding of AO that the expenditure should be capitalized cannot be accepted and granted a relief to the assessee. AR stated that in preceding year and in succeeding year same expenses were allowed in the case of the assessee. On the other hand, Ld. DR did not have anything to controvert the arguments of the assessee. In our considered opinion principle of consistency applies and in such case addition cannot be made and we do not find any merit in the appeal filed by the revenue and we are of the opinion that CIT(A) has passed detailed and reasoned order and same does not required any kind of interference at our end. In the result, the appeal filed by the revenue is dismissed. Nature of receipt against termination of lease agreement - taxable under the head income from other sources or income from house property or not taxable as capital receipt - CIT(A) confirming the finding of the AO for treating the amount received on termination of lease agreement - HELD THAT:- Assessee preferred first statutory appeal before CIT(A) who confirmed action of the AO holding that appellant could not give any justification regarding claim of standard deduction - the receipt is capital receipt then why the appellant had claimed standard deduction. In this case appellant had shown it as revenue receipt under the head income from house property and claimed the standard deduction. Appellant has submitted that it is a capital receipt but the appellant itself has shown it as revenue receipt and claimed standard deduction. So in such circumstances, we confirm the finding of the lower authorities and do not want to interfere in the order passed by the CIT(A). Lower authorities have passed detailed and reasoned order same does not require any kind of interference at our end. In the result appeal filed by the assessee is dismissed.

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• 2021 (8) TMI 873
  Addition of employees Provident Fund (PF) and ESI - delay in depositing employees contribution to PF and ESI - CIT-A deleted the addition - HELD THAT:- We note that the Ld. CIT(A) has taken note that the payments in respect of PF ESI accounts (i.e. both the employees and employers contribution) has been made by the assessee within the due date of filing of return of income (ROI) u/s. 139(1) of the Income-tax Act (hereinafter referred to as the Act ) i.e. before 30.09.2013. This fact has been taken note by the Ld. CIT(A) from perusal of Annexure 5A and 5B of the Tax Audit Report dated 26.09.2013. And since the assessee has deposited the PF ESI deposits before the due date of filing of ROI, the assessee correctly relied upon the decision of CIT Vs. M/s. Vijayshree Ltd. [ 2011 (9) TMI 30 - CALCUTTA HIGH COURT] and held since both the contributions as per the PF ESI Act has been made on or before the filing of return of income u/s. 139(1) of the Act, so no disallowance to be made u/s. 36(1)(va) - Decided in favour of assessee. Disallowance u/s.14A - HELD THAT:- As assessee brought our notice that the assessee has not received any exempt income. This fact has been confirmed by the Ld. CIT(A). The Ld. CIT(A) after taking note of this fact that the assessee has not received any exempt income during the year under consideration has given relief by relying on the decision of this Tribunal in assessee s own case for AY 2011-12 [ 2018 (4) TMI 440 - ITAT KOLKATA] . We do not find any infirmity in the order of the Ld. CIT(A) on this issue and for that we rely on the ratio of the decision of the Hon ble Delhi High Court in the case of Cheminvest Ltd [ 2015 (9) TMI 238 - DELHI HIGH COURT] and CIT Vs. Hero Cycles [ 2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT] Disallowance of interest on borrowed fund as advanced to the subsidiary company free of cost - HELD THAT:- From the facts discussed, the assessee company which is the holding company had advanced loan interest free due to business exigency to tide over the deficit (due to low tariff rate of electricity), so even if interest free advances are given to subsidiary/sister concern, interest expenditure could not have been disallowed and for such a proposition we rely on the ratio of the decision in the case of S A Builders Ltd. Vs. CIT [ 2006 (12) TMI 82 - SUPREME COURT] which is also applicable to the facts of this case. Therefore, we are of the opinion that the disallowance of interest on loan to subsidiary u/s. 36(1)(iii) of the Act by the AO has been rightly held to be unjustified. Further we note that the issue is squarely covered in favour of the assessee by order of the Coordinate bench of this Tribunal in assessee s own case [ 2018 (4) TMI 440 - ITAT KOLKATA] ad [ 2014 (2) TMI 1366 - ITAT KOLKATA] and there is no change in facts and law and the Ld. DR was unable to controvert the same by producing any cogent material, therefore, we find no reason to interfere in the impugned order of the Ld. CIT(A) and the same is hereby upheld. Therefore, we uphold the action of the Ld. CIT(A) and dismiss this ground of appeal of the revenue. Subsidy received from National Jute Board - revenue or capital receipt - AO added the said amount to the total income of the assessee on the ground that it is a revenue receipt - AO has made the addition mainly on the reason that assessee failed to deduct from the cost of plant and machinery the sum and has also claimed the depreciation on this amount of machinery - HELD THAT:- It is settled that revenue receipt are chargeable to tax on the other hand capital receipts are not unless specifically made taxable under the Act. If subsidies are given for various purpose like for promoting, construction of new industries, expansion of existing industries etc. then it is on capital account. On the other hand, the object of the subsidy scheme was to enable the assessee to run the business more profitably or to meet day to day business expenses, then the receipt shall be of revenue nature. So, if the object of this assistance/subsidy was to enable the assessee to set up a new unit or to expand the existing unit then the receipt shall be capital receipt not chargeable to tax. Therefore, the taxability of subsidies has to be determined by looking into the purpose for which it is given - Thus scheme for which this subsidy was given to the assessee Ld. CIT(A) has rightly decided in favour of the assessee. Ground of appeal of revenue is dismissed.

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• 2021 (8) TMI 871
  Assessment of trust - Addition on account of excess fees - AO brought on record sufficient material to show that assessee had collected excess fees, in addition to the fees fixed by State Government - CIT(A) held that the assessee has applied more than 85% of total receipt for its object. Thus, the predominant object of the assessee has been fulfilled - HELD THAT:- Considering the facts the assessee has applied more than 85% of the total receipt on charitable purpose and there is no expressed finding of AO that assessee is not carrying the charitable activities. Therefore, we do not find any merit in the grounds of appeal raised by the revenue. Thus we have heard the order of Ld. CIT(A). Disallowance of depreciation - AO disallowed the depreciation on fixed assets by holding that it amounts to double deduction as the assessee has already obtained the benefit under section 11 - CIT-A allowed the depreciation claim - HELD THAT:- Considering the decision of Hon ble Bombay High Court INSTITUTE OF BANKING PERSONNEL SELECTION [ 2003 (7) TMI 52 - BOMBAY HIGH COURT] which has been affirmed by Hon ble Apex Court in CIT Vs Rajasthan and Gujarati Charitable Foundation Poona [ 2017 (12) TMI 1067 - SUPREME COURT] we do not find any merit in the ground of appeal raised by the revenue. Addition u/s 68 - anonymous donations u/s 115BBC - HELD THAT:- As decided in own case [ 2019 (11) TMI 1657 - ITAT DELHI] the appellant has discharged the primary onus casted upon it to prove the identity of depositors, genuineness of transactions and credit worthiness of the depositors and therefore the unsecured loans accepted by the appellant from 5 persons during the year under appeal are treated as explained and substantiated - non production of the depositors by the appellant Has wrongly been made a ground to make addition to make, addition u/s 68 of the Act. Further the action of the A.O. to treat the deposits under reference as anonymous donations u/s 115BBC is completely unlawful since all the loan creditors had opening balances and had also filed copies of ITRs, Thus, by no stretch of imagination could the AO treat these loans as anonymous donation u/s 115BBC. Now coming u the failure to produce the depositor for the personal deposition the same cannot be treated as a ground so as to make the addition of the loans accepted from them. Decided against revenue.

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• 2021 (8) TMI 870
  Disallowance u/s 14A r.w.r. 8D - HELD THAT:- As decided in JOINT INVESTMENTS PVT LTD [ 2015 (3) TMI 155 - DELHI HIGH COURT] by no stretch of imagination can s. 14A or r. 8D be interpreted so as to mean that the entire tax exempt income is to be disallowed. The window for disallowance is indicated in s. 14A, and is only to the extent of disallowing expenditure incurred by the assessee in relation to the tax exempt income - thus we direct the Assessing Officer to restrict the disallowance to the extent of exempt income. Net off interest income with interest expenditure - HELD THAT:- It is an undisputed fact that the assessee has parked its surplus funds in fixed deposits of the bank from which it earned interest income - we find that the assessee has also paid interest to the bank. In our considered opinion, interest earned has to be netted off with interest expenditure. We, accordingly, direct the Assessing Officer to net off interest income with interest expenditure.

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• 2021 (8) TMI 869
  Excess stock found during the survey - Foreign exchange fluctuation was debited in the account after the post survey period and due to this abnormal loss excess stock found during the survey had been adjusted - HELD THAT:- It is relevant to mention that such foreign exchange loss was not found to be genuine by the Ld. AO. When the profit earned due to foreign exchange fluctuation in the earlier year was offered to tax while filing return by the appellant, the foreign exchange loss in the year under consideration should also be allowed on the same analogy has also been considered by the Ld. CIT(A). In fact, the Ld. CIT(A) observed that the excess stock found during the survey has already been included in the closing stock and thereby the closing stock in the books of accounts has been increased. The said fact is also emanated from the records filed before us. In that view of the matter the contention of the appellant that the addition tantamounts to double taxation is in fact justiciable. Over all the decision of addition on the observation that the appellant has not offered the additional stock found during the survey as made by the Ld. AO is under the present facts and circumstances of the Act not sustainable which has rightly been taken into consideration by the CIT(A) while deleting addition without any ambiguity so as to warrant interference. Hence, the appeal filed by the Revenue is found to be devoid of any merit and, thus, dismissed. Disallowance of stores and spares expenses - HELD THAT:- Upon perusal of the record particularly the ledger account of stores and spares of the firm, we find that it is specifically demonstrates the expenses in question which has further been debited in the books of accounts. Moreover, similar expenses have also been allowed in the previous year. Thus, the view taken by the Ld. CIT(A) is found to be contradictory and we do not find any rational in such decision made by the CIT(A) when the primary onus on the part of the assessee is discharged and no evidence is found that purchase has been used for non-business purposes. Thus, we do not find any justification in disallowing the said expenses out of stores and spares account in the present facts and circumstances of the case taking into consideration the assessee line of business and hence we allow the same.

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• 2021 (8) TMI 868
  Validity of reopening of assessment u/s 147 - deemed dividend u/s 2(22) (e) - unsecured loans - Group companies - HELD THAT:- As notice u/s 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law. Since the ld.CIT(A) while deciding the validity of the reassessment proceedings has thoroughly discussed all the aspects which the ld. Counsel has raised before the Tribunal, therefore, in absence of any distinguishing features brought before us against the order of the ld.CIT(A), we uphold the same and the reassessment proceedings initiated by the AO and upheld by the CIT(A) being in accordance with the law, the grounds raised by the assessee on this issue are dismissed. Deemed dividend - unsecured loans - Group companies - Assessee, Shri Anil Nanda was holding substantial shareholding in both these companies, i.e., 65.6% share in M/s Joint Investment Pvt. Ltd. and 27.90% share in M/s GI Power Corporation Ltd. as on 31st July, 2007. We find, the amount of Rs. 18.75 crore had been shown under the grouping unsecured loans by both these companies in their balance sheets - while arguing the case of GI Power Corporation Ltd. before the CIT(A), Jammu, the said assessee itself had accepted that it had received loan from M/s Joint Investment Pvt. Ltd. No force in the arguments of the ld. Counsel for the assessee that these are ICDs as per the resolutions and correspondences, etc., since the two concerns are closely related to each other and the transactions are not at arm s length. It is within their exclusive knowledge as to why they have treated the same as ICDs and argued before CIT(A) Jammu in the case of GI Power Corporation Ltd., as loan. Therefore, the argument of the ld. Counsel that provisions of section 2(22)(e) are not applicable does not hold good. CBDT Circular by the ld. Counsel is also not applicable since the said Circular relates to trade advance whereas in the instant case, it is deposit or loan and not a trade advance. Since the ld.CIT(A) while sustaining the addition has thoroughly discussed the issue and has passed a very reasoned order and has followed the decision of the Hon ble Delhi High Court in the case of Ankitech Pvt. Ltd. 2011 (5) TMI 325 - DELHI HIGH COURT] therefore, we do not find any infirmity in the same. Accordingly, the order of the CIT(A) is upheld on merit of the case also. - Decided against assessee.

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• 2021 (8) TMI 865
  Addition u/s 40A(2)(b) - computing the profit of joint venture @4% of the gross receipts as the assessee had given the payment to the persons specified under section 40A(2)(b) - HELD THAT:- As decided in own case [ 2018 (4) TMI 1747 - ITAT DELHI] disallowance under this section is made in respect of the expenses incurred or payments made which are not deductible. This section has no application to income aspect of the assessee. As the AO has made disallowance u/s 40A(2)(b) in respect of income which the assessee in his opinion ought to have earned rather than certain expenses incurred, are of the considered opinion that the provisions of this section are not attracted. Therefore, uphold the impugned order on this score deleting the disallowance - Decided in favour of assessee.

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• 2021 (8) TMI 864
  Rectification u/s 254 - Penalty u/s 271(1)(c) was deleted - HELD THAT:- On perusal of the MA filed by the Revenue it is noticed that there is no allegation highlighting the mistake apparent from the record. The sole basis of making the request for recalling of the order is that penalty has been deleted by the ITAT without appreciating the fact that the additional income would have gone tax free, had there not been any search u/s 132 - We find no allegation in the MA preferred by the Revenue that there was an error apparent from the record in the impugned order of the ITAT. Without prejudice to the above, assuming the findings of the ITAT is not correct than it would not amount to a mistake apparent from record which could be rectified under the provision of section 254(2) of the Act. If the decision of the ITAT is wrong than the aggrieved parties can approach to the Higher Judicial forum i.e. Jurisdictional High Court. But such findings cannot be rectified on the reasoning that there is a mistake apparent from the record. If we do so it would amount to review its own order by the ITAT which is not permissible. ITAT has passed this order after making reference to the provisions of explanation 5A to the section 271(1)(c) of the Act, and after relying on the order of ITAT in the case of Ajay Trader V/s DCIT [ 2016 (6) TMI 422 - ITAT JAIPUR] - We hold that the order of the ITAT does not suffer from any infirmity as alleged by the Revenue - MAs filed by Revenue are dismissed.

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• 2021 (8) TMI 863
  Penalty u/s. 271(1)(c) - Defective notice u/s 274 - addition of unexplained jewellery was not an issue before the Assessing Officer and the penalty was initiated on the afterthought which is not justifiable under the law - HELD THAT:- In the instant case also the inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s. 271(1)(c) has been initiated, therefore, we are of the considered opinion that the penalty levied u/s. 271(1)(c) is not sustainable and has to be deleted. On merit, the penalty was imposed on the addition which was not at all the part of the assessment order and there was no justification given by the Assessing Officer for such a new amount for imposing penalty. The addition of unexplained jewellery was not an issue before the Assessing Officer. Thus, the appeal of the assessee is allowed.

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• 2021 (8) TMI 862
  Exemption u/s 11 - rejecting assessee s application on Form no. 10A for registration u/s. 12A - since the assessee was claiming exemption from Income Tax u/s. 10(23C)(3)(iii)(ad) hence it had no locus standi to claim registration u/s. 12A - HELD THAT:- CIT has been wrong in holding that since the assessee was claiming exemption from Income Tax u/s. 10(23C)(3)(iii)(ad) hence it had no locus standi to claim registration u/s. 12A. It is the right of the assessee to avail either of the benefit of exemptions u/s. 10 (23c) or 12AA of the act available to it, however the assessee has to fulfilled the conditioned prescribed for availing such benefits. As noted the material fact as mentioned by the CIT that One of the objectives of the applicant society was that Special attention has been given upon character building of the students, to prepare the students for various examination conducted by various education departments which includes any educational institution, college, university, board, academy and any other institution, Government or Private, national or international, educational or any other field. It is worthy mention here that whether the object of the assessee society to prepare the students for various examination conducted by various education departments that includes any educational institution, college, university, board, academy and any other institution, Government or Private, national or international, educational contemplates to running coaching institute on commercial pattern for profit emotive needs to be examined. We deem it fit to restore the matter back to the file of the CIT(Exemption) to examine the objects and activities of the assessee society afresh for the issue of grant of registration u/s. 12AA of the act, afresh, as per amended provisions of law, after taking into consideration the material evidence and after affording sufficient opportunity of being heard to the assessee trust. Assessee appeal is treated allowed for statistical purposes.

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• 2021 (8) TMI 861
  Bogus purchases - estimation of profit - purchases made from grey market - HELD THAT:- We find that there is no dispute that the assessee had made purchases from tainted suppliers. We find that though these parties had filed an affidavit before the Sales Tax department that they are genuinely engaged in the business, the assessee herein could not prove the genuineness of purchases made from those parties with conclusive evidences. It could be safely concluded that assessee could have made purchases only from grey market in order to have savings from VAT and incidental profit element thereon. It would be just and fair to bring to tax only the profit element embedded in the value of such disputed purchases in as much as the ld. CIT(A) accepted the fact that the goods made by the assessee from the aforesaid suppliers had been actually consumed by it in the projects. For the purpose of determination of profit element embedded in the value of such disputed purchases, since the assessee had made purchases from the grey market, we hold that it could have saved in VAT portion and incidental profit element thereon making cash purchases. AO is directed to determine the profit element embedded in the value of disputed purchases in the aforesaid manner as given in the table. Accordingly, the grounds raised by the assessee as well as by the Revenue are partly allowed.

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• 2021 (8) TMI 860
  Addition u/s 68 - un-explained credit - HELD THAT:- We direct the AO to first verify from the accounts of the assessee and other details, whether this amount of Rs. 1,53,75,769/- has been received prior to 31.03.2008 or not. In case this amount received prior to 31.03.2008, no addition for this amount will be made. In case, this amount received in this year then the assessee will again explain in entirety with evidence before the AO. For remaining amount the assessee will explain with evidence to meet with the conditions of section 68 of the Act. To this proposition both agreed, the learned DR as well as the learned Counsel for the assessee. In term of the above, the matter is set aside and restore to the file of the Assessing Officer. Appeal of the assessee is allowed for statistical purposes.

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• 2021 (8) TMI 859
  Bogus purchases - information that was received by the A.O from the DGIT(Inv.), Mumbai, wherein it was intimated that the material unearthed in the course of the search proceedings conducted on Shri Bhanwarlal Jain and his associates concerns revealed, that the assessee as a beneficiary had obtained certain accommodation/bogus purchase bills - HELD THAT:- We find that complete details as regards the sales carried out by both the aforementioned parties, viz. invoice numbers, weight of diamond (carats) and sale consideration have been specifically mentioned. Also, we find that the assessee had in the course of the assessment proceedings filed the confirmations of both of the aforementioned parties. In the backdrop of the aforesaid facts, we are of a strong conviction that now when the assessee had not only substantiated the authenticity of the purchases claimed to have been made from the aforementioned parties on the basis of supporting documentary evidence which had not been dislodged by the lower authorities, but had also got the confirmations from the respective parties alongwith their affidavits , therefore, there could have been no justification in the absence of any material proving to the contrary to doubt the genuineness of the purchases claimed by the assessee to have been made from the aforementioned parties. As the assessee had substantiated to the hilt the authenticity of the purchases claimed to have been made from the aforementioned parties, therefore, no disallowance qua any part of the impugned purchases was called for in its hands. We, thus, in the backdrop of our aforesaid deliberations set-aside the order of the CIT(A) and vacate the disallowance of 3% of the impugned purchases that had been sustained by him. The appeal of the assessee is allowed in terms

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• 2021 (8) TMI 858
  TDS u/s 195 - disallowing sum paid by the assessee as software maintenance charges to its overseas group companies by invoking section 40(a)(ia) - whether the provisions of the Act can override the provisions of the DTAA, the Hon ble Court held that Explanation 4 was inserted in section 9(1)(vi) of the ITA in 2012 to clarify that the transfer of all or any rights in respect of any right, property, or information included and had always included the transfer of all or any right for use or right to use a computer software ? - HELD THAT:- Once a DTAA applies, the provisions of the Act can only apply to the extent they are more beneficial to the taxpayer and therefore the definition of royalties will have the meaning assigned to it by the DTAA which was more beneficial. It was held that the term copyright has to be understood in the context of the Copyright Act. The court said that by virtue of Article 12(3) of the DTAA, royalties are payments of any kind received as a consideration for the use of, or the right to use, any copyright of a literary work includes a computer program or software. It was held that regarding the expression use of or the right to use , the position would be the same under explanation 2(v) of section 9(1)(vi) because there must be, under the licence granted or sales made, a transfer of any rights contained in sections 14(a) or 14(b) of the Copyright Act. Since the end-user only gets the right to use computer software under a non-exclusive licence, ensuring the owner continues to retain ownership under section 14(b) of the Copyright Act read with sub-section 14(a)(i)-(vii), payments for computer software sold/licenced on a CD/other physical media cannot be classed as a royalty. As contended by the DR, neither the AO nor the CIT(A) had the benefit of the decision of the Hon ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. [ 2021 (3) TMI 138 - SUPREME COURT] and therefore in all fairness, the issue should be remanded to the AO to examine the terms of the agreement under which right were granted to the Assessee in the light of the provisions of the DTAA as to whether the same would amount to royalty. We accordingly remand the issue to the A.O. The AO will afford opportunity of being heard to the Assessee in the set aside proceedings. The appeal of the Assessee is accordingly treated as allowed for statistical purpose.

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• 2021 (8) TMI 855
  Addition u/s 68 - unexplained cash credit - HELD THAT:- It is an admitted fact that due to non-substantiation of the identity and creditworthiness of the share applicants and genuineness of the transactions, the AO invoking the provisions of section 68 made addition - We find due to non-appearance of the assessee before the CIT(A) despite number of opportunities granted, the learned CIT(A) in the ex-parte order passed by him sustained the addition made by the AO. It is the submission of the for the assessee that in the interest of justice, the assessee be given an opportunity to substantiate its case before any of the lower authorities. Considering the totality of facts of the case and in the interest of justice, we deem it proper to restore this issue to the file of the learned CIT(A) with a direction to grant one final opportunity to the assessee to substantiate its case by filing requisite details and the learned CIT(A) shall decide the issue as per fact and law. Appeal filed by the assessee is allowed for statistical purpose

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• 2021 (8) TMI 854
  Penalty u/s 271F - failure of the assessee to furnish its return of income required u/s 139(1) - CIT-A deleted the addition on reasonable cause - HELD THAT:- We find that the assessee before Ld.CIT(A) has stated that the important documents were in possession of the Directors and there was serious legal dispute was going on with the former Directors in this regard. Therefore, considering the totality of the facts and material placed before us, we do not find any infirmity in the order of Ld. CIT(A) and same is hereby affirmed. Thus, Ground of the appeal raised by the Revenue is dismissed.

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• 2021 (8) TMI 853
  Excess depreciation on Capital subsidy received from Government of India - Whether said subsidy partake the nature of capital contribution and hence the same is in the nature of capital receipt, which cannot be taxed under the Act? - HELD THAT:- There is no merit in the reasons given by the AO to consider capital subsidy as part of cost of asset directly/indirectly met by third party, because capital subsidy received from Government of India is for setting up of new food processing industry as per the scheme of promotion of industries in the industrially backward areas - said subsidy partake the nature of capital contribution and hence the same is in the nature of capital receipt, which cannot be taxed under the Act. CIT-A Once the amount is in the nature of capital receipt, question of reduction of said subsidy from the cost of plant machinery as per the provisions of section 43(1) of the Act does not arise. This proposition was supported by the decision of the Hon ble Jurisdictional High Court of Madras in the case of M/s. Srinivas Industries [ 1991 (1) TMI 120 - MADRAS HIGH COURT] where it was held that amount of subsidy made available cannot be deducted from the cost of capital asset for the purpose of working out depreciation u/s. 43(1) - This proposition was further supported by the decision of the Hon ble High Court of Rajasthan in the case of CIT vs. Ambica Electrolytic Capacitor, [ 1990 (9) TMI 24 - RAJASTHAN HIGH COURT] . We, therefore are of the considered view that the AO was erred in reducing capital subsidy received for setting up of new food processing industry from the plant machinery for computing depreciation.CIT(A) rightly deleted addition made by the AO towards excess depreciation - Decided in favour of assessee.

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• 2021 (8) TMI 852
  Revision u/s 263 by CIT - computation of long term capital gain from sale of property - AO examined sale of movable assets like air-conditioner, furniture and fixtures etc. and accepted claim of the assessee that they are in the nature of personal effects not liable for tax - HELD THAT:- AO after accepting explanation furnished by the assessee, has taken a possible view and has completed the assessment, therefore, the Principal CIT cannot assume jurisdiction u/s.263 to treat assessment order passed by the AO as erroneous and prejudicial to the interests of revenue. The question whether movable assets like air-conditioner, used TVs, fridge, dining table etc. are personal effects or capital assets is debatable issue. Since the issue is debatable, the AO has taken one of the possible view and accepted claim of the assessee that they are in the nature of personal effects and not liable for tax. The view taken by the AO may not be correct, but the Principal CIT cannot assume jurisdiction to review the assessment order u/s.263 of the Act, unless the view taken by the AO is unsustainable in law, because the Principal CIT cannot impose his view on the AO . Therefore, we are of the considered view that once an issue was subject matter of assessment proceedings by the Assessing Officer in original assessment proceedings, then there is no scope for the Principal CIT to revise assessment order by holding that assessment order passed by the Assessing Officer is erroneous, insofar as it is prejudicial to the interests of revenue - See VENKATAKRISHNA RICE COMPANY AND VIJENDRA PAL SINGH [ 1981 (3) TMI 1 - MADRAS HIGH COURT] Assessment order passed by the AO is neither erroneous nor prejudicial to the interests of revenue. Hence, we are of the considered view that the Principal CIT has erred in revision of assessment order passed by the Assessing Officer u/s.143(3) of the Act. Hence, we quash revision order passed by the Principal CIT u/s.263 - Decided in favour of assessee.

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• 2021 (8) TMI 851
  Addition u/s 68 - receipt of share premium unexplained - assessee had failed to discharge the onus cast upon it u/s 68 of the Income Tax Act,1961 of establishing the true identity, genuineness of creditworthiness of the share applicant - CIT-A deleted the addition - HELD THAT:- We concur with the view taken by the CIT(A) that now when the assessee had filed with the A.O the complete details of the 19 share subscribers, viz. names, address, PAN nos., confirmations etc., and still if the A.O was of the view that the share premium was received by the assessee from bogus shareholders, then, it was open for him to proceed against such share subscribers and could not have assessed the said amount as an unexplained cash credit in the hands of the assessee company. Our aforesaid view is supported by the judgment of the Hon ble Supreme Court in the case of CIT Vs. Lovely Export Pvt. Ltd. [ 2008 (1) TMI 575 - SC ORDER] . Also a similar view qua the pre-amended Sec. 68 of the Act i.e the assessee can be asked to prove the source of credit in books, but cannot be asked to prove the source of the source Assessee had beyond doubt on the basis of substantial material filed with the A.O proved the identity, creditworthiness and genuineness of the transactions in question, therefore, the share premium of Rs. 2.25 crore received by it from the aforementioned 19 share subscribers could not have held as an unexplained cash credit within the meaning of Sec. 68 - We, thus, finding no infirmity in the view taken by the CIT(A) who had rightly held that as the assessee had duly discharged the onus that was cast upon it as regards proving the identity, creditworthiness and genuineness of transactions in question, therefore, the share premium of Rs. 2.25 crore received from the 19 share subscribers could not have been assessed as an unexplained cash credit u/s 68 of the Act, uphold his view. No infirmity in the very well reasoned order of the CIT(A), uphold the view taken by him that the share premium of Rs. 2.25 crore received by the assessee during the year under consideration could not be held as an unexplained cash credit within the meaning of Sec. 68 of the Act. Accordingly, finding no merit in the appeal of the revenue we dismiss the same.

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• 2021 (8) TMI 849
  Penalty u/s 271(1)(c) - Defective notice u/s 274 - HELD THAT:- As perused the certified copies of the notices issued under Section 274 read with Section 271(1)(c) of the Act dated 20th June, 2014 for all these years wherein it is a fact that the ld. AR has not struck off one of the two limbs for levy of the penalty. In view of the above since the issue of notice itself is bad in law, it vitiates entire penalty proceedings and are liable to be quashed and thus, all the six penalty proceedings for respective years are quashed. The additional ground of the assessee is allowed.

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• 2021 (8) TMI 846
  Addition u/s.14A r.w.r. 8D - HELD THAT:- During the course of assessment, the ld. CIT(A) has held that in view of the ratio of various case laws in set aside proceedings with specific directions, the Assessing Officer cannot exceed the disallowance and addition made in the original assessment order as reduced by the ld. CIT(A) which was subject matter before the ITAT. CIT(A) has also referred the decision of ITAT Bombay Special Bench in the case of Daga Capital and Management Ltd. [ 2008 (10) TMI 383 - ITAT MUMBAI] that the applicability of rule 8D is prospective w.e.f. 1st April, 2008 and for earlier years the disallowance has to be made reasonably on fact of the case. Taking into consideration, the aforesaid facts and judicial finding, the ld. CIT(A) has stated that in the original order, the Assessing Officer has adopted a reasonable view on the basis of proportion of dividend income to total sales i.e. 0.83 lacs, director s remuneration, travelling expenditure of Rs. 501.33 lacs and other administrative and miscellaneous expenditure of Rs. 3219.29 lacs which required disallowance to the amount of Rs. 30,88,115/-. With the assistance of ld. representatives, we have also perused the decision in CIT Ahmedabad vs. S. R. Tele Holding Pvt. Ltd.[ 2017 (5) TMI 1160 - GUJARAT HIGH COURT] wherein it is held that rule 8D is prospective in operation and cannot be applied to any assessment year prior to assessment year 2008-09. After taking into consideration the decision of Hon ble Supreme Court as referred above and findings of ld. CIT(A) as elaborated above, we do not find any infirmity in the finding of ld. CIT(A), therefore, the appeal of the revenue is dismissed. Disallowance u/s. 80IC - HELD THAT:- After considering the decision of Co-ordinate Bench of the ITAT Ahmedabad in the case of the assessee itself pertaining to the assessment year 2010-11 and 2011-12 on identical issue and facts, we do not find any infirmity in the decision of ld. CIT(A) on allocating common interest and financial charges on the basis of investment and deleting the addition of common head expenses and administrative/corporate division expenses made on sale basis. Therefore, we do not find any merit in this ground of appeal of the revenue and the same stands dismissed. Addition u/s 14A - As no expenditure has been incurred for earning exempt income no disallowance to be made.

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• 2021 (8) TMI 845
  Penalty u/s. 271(1)(c) - additions made on account of bogus purchases - HELD THAT:- AO has made addition on the basis of estimated addition and consequently imposed penalty under section 271(1)(c) of the Act. In our considered opinion, and keeping in view the consistency maintained by this Tribunal in plethora of cases that the provisions of section 271(1)(c) of the Act are not attracted to cases where income of an assessee is assessed on estimate basis and addition is made therein on that basis. In the present case also, the facts are similar and hence no penalty ought to have been levied by the Assessing Officer. Even otherwise also, the Revenue has not adduced any cogent material before us to demonstrate that the order passed by the learned CIT(A) deleting the penalty imposed by the Assessing Officer under section 271(1)(c) of the Act is void ab initio. - Decided against revenue.

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• 2021 (8) TMI 844
  Addition u/s 40(a)(ia) - claim the benefit of the second proviso to Section 201 (1) - HELD THAT:- We find that proviso inserted u/s 201 (1) by the finance act 2012 with effect from 1 July 2012 has been held to be retrospective in operation by honourable Delhi High Court in on Ansal landmark township private limited [ 2015 (9) TMI 79 - DELHI HIGH COURT] as it is curative in nature. However to get the benefit of the above proviso certain particulars are required to be furnished before the AO in a particular manner. Though assessee has furnished certain information before AO however they were not in the prescribed format and not accompanied with the certificate of the accountant showing that income has been included by payees in return of income. So it was rejected. Learned AO further held that there was no claim made by the assessee by filing revised return and therefore in view of the decision of the honourable Supreme Court it cannot be entertained. We find that as the honourable Delhi High Court has held that the above proviso inserted u/s 201 (1) is retrospective in nature the assessee must be granted the benefit of the above proviso provided the assessee furnish the requisite information before the assessing officer in the prescribed manner. The information submitted by the assessee before the assessing officer, is not in the manner in which it is required. Before ld CIT A also assessee did not file this information. Therefore, in interest of justice, there is no harm if assessee gets one more opportunity in time bound manner to furnish this information. Regarding not making claim by filing revised return, fetters laid down by the honourable Supreme Court in the decision of the Goetz [ 2006 (3) TMI 75 - SUPREME COURT] do not apply to the first appellate authority. therefore, the claim of the assessee should have been entertained by the ld CIT (A). Disallowing the cost of material - whether the same was incurred wholly and exclusively for the purpose of the business. - HELD THAT:- We find that if assessee would like to claim any expenditure as a deduction, it is the duty of the assessee to furnish the requisite information in a reasonable manner. Assessee cannot plead that as percentage of expenditure compared to income is very low, therefore, there is no need of submission of any details. We do not appreciate such an argument, it tantamount to bypass the authority and responsibility of ld AO to compute the correct income of assessee. Further, it can also not be said that if there is a revenue there has to be certain expenditure, which should necessarily be allowed without verification. In this case, assessee has not submitted any details except the annual accounts. Therefore, we do not find any infirmity in the orders of the lower authorities in confirming the above disallowance.

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• 2021 (8) TMI 841
  Disallowance of commission paid to liaison - functioning of the business set up of that of the assessee in dealing with Indian Railways whose offices are located on various places in India - HELD THAT:- With respect to the facts that what was the need for the liaison representatives to work on behalf of the assessee company and secondly, what actual works they have performed generally for the business of the assessee company. All these details have been specifically examined and mentioned by the Ld. CIT(Appeals) in his order. Practical scenario in functioning of the business set up of that of the assessee in dealing with Indian Railways whose offices are located on various places in India and due to difficulties of conversation for not having knowledge of local language etc., these factors were also taken into consideration by the Ld. CIT(Appeals). We therefore, cannot doubt the involvement of the liaison representatives in the business of the assessee and neither the Assessing Officer has brought on record any evidences/materials to suggest otherwise. AO has neither doubted the payments nor has doubted the parties to whom the payments were made. AO has also agreed on the services rendered by these liaison representatives for the assessee company. AO has not given any cogent reasoning or finding for the ad-hoc disallowance at the rate of 7.5 % in respect of the commission paid to these liaison representatives. These ad-hoc disallowances are not only unsustainable in the case of limited company but also in the case of any assessee for that matter. Since Quasi-Judicial Authorities are required to substantiate every addition made with proper reasoning and that reason should come out from the orders of the authorities itself. The thinking process must clearly get reflected in the order based on examination of facts and evidences. In this case, such exercise is missing by the Assessing Officer which was rightly observed by the Ld. CIT(Appeals). There cannot be any additions sustained which are primarily founded on platform of doubt only. - Decided against revenue.

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• Customs

• 2021 (8) TMI 878
  Maintainability of petition - availability of alternative remedy of appeal - factual aspects either not considered or mistakenly considered - HELD THAT:- In the present case, the petitioner has stated that there are certain violations and factual aspects either not considered or mistakenly considered. However, all these aspects could be adjudicated before the appellate authority. In this writ petition, the petitioner is granted liberty to approach the appellate authority and file an appeal by following the procedures as contemplated and by complying with the conditions to prefer the appeal, within a period of 60 days from the date of receipt of a copy of this order, and in the event of filing of appeal by the writ petitioner within a period of 60 days, such appeal is directed to be entertained without reference to the period of limitation, and the matter has to be adjudicated on merits and in accordance with law and by affording opportunity to the parties concerned, and the appeal has to be disposed of, as expeditiously as possible. Petition disposed off.

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• Corporate Laws

• 2021 (8) TMI 848
  Scheme of Demerger - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- From the material on record, the Scheme of Demerger appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public interest - Since all the statutory compliances have been fulfilled, this bench hereby sanctions this Scheme in its absolute terms. The Scheme, with the Appointed Date fixed as 1st April, 2019 is hereby sanctioned - Application allowed.

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• 2021 (8) TMI 840
  Oppression and mismanagement - transfer of shares - termination of Share Purchase Agreement - Section 241 and 242 of the Companies Act, 2013 - HELD THAT:- When it is found that the petitioner has not fulfilled the conditions precedent for purchase of the shares for which the share certificate was issued, and the SPA which was the basis for issuance of the said share certificate was terminated and the said termination is not challenged by the petitioner till date, and thereby the said share certificate itself becomes void ab-initio, the principle that share certificate itself is the proof of the title of shares, will not help it in any manner. The petitioner is not a shareholder, the various other allegations with regard to oppression and mismanagement, need not be addressed, in this petition - Petition dismissed.

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• Insolvency & Bankruptcy

• 2021 (8) TMI 867
  Contempt Jurisdiction - Aggrieved person - Respondent is financially solvent or not - main grievance of the Appellant is that the Adjudicating Authority while passing the impugned order had failed to exercise his powers, in terms of section 425 of the Companies Act, 2013 thereby punishing the Respondent for Contempt - HELD THAT:- There is no two opinion of a pivotal fact that the contempt of court is of course a Special Jurisdiction to be exercised with great care, caution, and utmost circumspection, when an adverse act affects the administration of justice or which tends to shake public confidence in the judicial institutions or to impede its course - It will be a travesty of justice if the Tribunal / Court of Law were to permit gross contempt of Tribunal/Court of Law to go unpunished, if there be no mitigating factors/circumstances, in the considered opinion of this Tribunal a wilful breach of an undertaking given to a Tribunal/Court may amount to Contemptuous Act, coming within the meaning of Section 2(b) of the Contempt of Courts Act, 1971. It is for the Tribunal to find out whether its order has been disobeyed in a wilful manner and the mental element is to be adjudged by the Tribunal indicating the state of mind of the contemnor - It may not be out of place for this Tribunal to make a pertinent mention that Section 425 of the Companies Act, 2013 provides for power to punish for contempt and the same enjoins that the Tribunal and the Appellant Tribunal shall have the same jurisdiction, powers and authority in respect of contempt of themselves as the High Court has and may exercise for his purpose the powers under the provisions of the Contempt of Court Act, 1971. When the Tribunal has the requisite power under the Section 425 of the Companies Act, 2013 to punish a person/contemnor, then, the Tribunal is to exercise its power and to adjudicate the Contempt Petition on its file, of course, on merits - Application allowed.

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• 2021 (8) TMI 857
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - time limitation - HELD THAT:- The Company Petition was filed by the Operational Creditor who was engaged by the Corporate Debtor, Gopinath Engineering Co. Pvt. Ltd. for carrying out certain jobs of the Corporate Debtor by way of work order dated 10.04.2018. subsequently, the Operational Creditor has raised an invoice for the work done by them on 18.05.2019 by sending a copy Invoice. The Corporate Debtor failed to honour payment due under the invoice. The Operational Creditor issued statutory demand notice under Section 8 of the code calling upon the Corporate Debtor to pay the outstanding liability. The Corporate Debtor having received of the said notice neither sent any reply nor cleared the amount. The Operational Creditor annexed the copy of the demand notice and also track report of the postal department evidencing the receipt of the demand notice by the corporate Debtor - this Tribunal is completely satisfied that the debt and default are established in this case and the debt is also within limitation. It is also evident from the conduct of the Corporate Debtor that he is accepting the liability. Thus, the present Company Petition satisfies all the necessary requirements for admission. Petition admitted - moratorium declared.

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• 2021 (8) TMI 856
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - existence of debt and dispute or not - HELD THAT:- It is also an admitted fact from record that in August 2017, the Operational Creditor was called upon by the management of Corporate Debtor and was informed about his under performance for the past few years compared to other employees having very less experience and was low to an extent that the performance does not even cover the own costs of the Operational Creditor. Therefore, it is very clear from the admitted facts that the Operational Creditor and the Corporate Debtor were in loggerheads since 2017 with regard to the reduction of salary of Operational Creditor which itself a pre-existing dispute and accordingly the issue goes against the Operational Creditor. Admittedly, the amount claimed by the Operational Creditor in the Company Petition is towards arrears of difference salary. This Tribunal is of the considered opinion that the claim does not qualify within the definition of Operational Debt and this issue also goes against the Operational Creditor. Petition dismissed.

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• 2021 (8) TMI 850
  Voluntary liquidation of the Petitioner/Corporate person - section 59 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It appears that the affairs of the Petitioner/Corporate Person have been completely wound up and its assets have been completely liquidated. The documents on record also satisfy that the voluntary liquidation is not with intent to defraud any person. The bank account for the purpose of Liquidation has been closed. The Petitioner/Corporate Person deserves to be dissolved and it is ordered accordingly - Dated this the 05th day of August, 2021.

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• 2021 (8) TMI 847
  Early Dissolution of the Corporate Debtor - section 54 of the Insolvency and Bankruptcy code read alongwith Regulation 14 of IBBI (Liquidation Process) Regulations 2016 - HELD THAT:- No claims have been received from any Operational Creditor including the Operational Creditor at whose behest CIRP had commenced in this matter. The RP mentions that he has received only one claim from Financial Creditor, i.e., M/s. Loyal Enterprises and total admitted amount is Rs. 20 lakhs. Further, the firm does not have any workmen and employees. The bench notes that there is no asset in the Company and as per the audited financials as on 31.03.2019 the balance sheet the Company has fixed assets of about Rs. 13.79 lakhs which is not there in the Company physically, therefore, can not be valued. Similarly, there is Stock in Trade as per the books of account of about Rs. 27.93 lakhs which were primarily perishable food items and cannot be valued at present. There is no asset in the Company and the lone CoC member has recommended direct dissolution of the Company as no purpose would be served by first going in for liquidation (since no assts are there in the Company and no claim has been filed). The lone Financial Creditor is reconciled to the fact that he will not get anything by liquidation, therefore, has recommended in the CoC meeting dated 06.10.2020, for a direct dissolution. The Corporate Debtor Company stands dissolved from the date of this Order - Application allowed.

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• Service Tax

• 2021 (8) TMI 875
  CENVAT Credit - input services - Mandap Keeper Service - Real Estate Agent Services - Works Contract Service - Event Management Services - Facility Management Services - HELD THAT:- Originally show-cause notice proposing to demand service tax of Rs. 1,43,53,520/- was issued. After verification by the Additional Commissioner, cenvat credit of Rs. 1,08,18,980/- was allowed and cenvat credit of Rs. 32,57,563/- was held to be ineligible and demanded along with interest and penalty. The cenvat credit on input services are in fact relating to the business activity of the appellant and are covered by the definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004. Though in some of the invoices, the nature of service mentioned is different but the classification shown in the invoice is different but this kind of a discrepancy will not disentitle the appellant to claim cenvat credit once the input service is used for the business activity of the appellant. In some invoices, the nature of service mentioned is different but the classification as per the invoice is different but definitely all these services have been used by the appellant for rendering output service. Various decisions relied upon by the appellant have categorically held these services to be an input services . These services fall in the definition of input service and the appellant has rightly claimed the CENVAT credit - appeal allowed - decided in favor of appellant.

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• 2021 (8) TMI 866
  Reverse charge mechanism - wrongly availed credit and utilized the credit - contravention of Service Tax Credit Rules, 2002 r/w CENVAT Credit Rules, 2004 - revenue neutrality - HELD THAT:- The appellants availed the credit of service tax paid by them under reverse charge as an input service recipient and utilized the same for payment of service tax. During the relevant period, the credit availed on service tax was governed by the Service Tax Rules, 1994 and credit availed on inputs and capital goods was governed by CENVAT Credit Rules, 2002. CENVAT Credit Rules, 2004 came into force with effect from 10.9.2004 and then the appellants transferred the unutilized credit to CENVAT account and utilized it for payment of central excise duty also. The appellant not being a service provider is not eligible to take credit of the service tax under Service Tax Rules, 1994 and that such credit cannot be used to discharge their service tax liability. When the credit was not eligible, appellant s ought not to have transferred the unutilized service tax credit to CENVAT account and utilized it to discharge their tax / duty liability. It also needs to be stated that appellants were not liable to pay service tax under reverse charge mechanism prior to introduction of Section 66A in the Finance Act, 1994. The Hon ble High Court of Bombay held that tax cannot be levied or collected on the basis of Rules only. The decision in the case of UNION OF INDIA VERSUS INDIAN NATIONAL SHIPOWNERS ASSOCIATION [ 2009 (12) TMI 850 - SC ORDER] where it was held that the provisions of Rule 2(1)(d)(iv) are clearly invalid. Although, there was no liability to pay the tax as per law, the appellants have discharged the tax liability as a service recipient and availed credit. So the situation is revenue neutral also. Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2021 (8) TMI 888
  Delay in proceeding with SCN - SCN was issued in 2006 - Order in Writ petition was passed in 2010 - Reply to SCN was filed in 2010 - A corrigendum was issued in 2016, PH was fixed and extensive reply was filed in 2017 - matter was kept pending in the call book as a policy decision - HELD THAT:- It was thus seen that inordinate delay in proceeding with the earlier show cause notice despite the justification for keeping them in the Call Book coming to an end with the decision of the Larger Bench decided on 29th March, 2011. Nevertheless since the Petitioner s reply to the hearing notice filed by Petitioner on 9th February, 2017 is yet to be considered, the Court directs that the reply of the Petitioner will be considered on its merit, the Petitioner heard and the hearing date will be intimated to the Petitioner at least 10 days in advance and a reasoned order passed by the Authorized Adjudication Officer not later than 6th December, 2021. Application disposed off.

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• 2021 (8) TMI 872
  CENVAT Credit - input services - services of decline excavation, blasting, sealing and mucking, utilized for mine development at Kayad captive mines - interpretation of statute - scope of the means clause of rule 2(l) of the Credit Rules - situation pre 01.04.2011 and post 01.04.2011 - directions contained in the orders passed by the Tribunal were complied with or not - scope of SCN - HELD THAT:- There is no manner of doubt that the order passed by the Commissioner adjudicating the first show cause notice is beyond the scope of the remand order. In regard to the subsequent show cause notices dated 28.10.2015 and 31.03.2016 for the period from October 2014 to September 2015, it is seen that the show cause notices were issued on a ground different from that contained in the first show cause notice. The show cause notices mention that the services were in relation to setting up , of mines, which service stood omitted w.e.f. 01.04.2011 from the inclusive clause of the definition of input service under rule 2(l) of the Credit Rules. They also mention that the services were in relation to construction and execution of a works contract of a building or a civil structure , which service was excluded under rule 2(l)(A) of the Credit Rules. The Tribunal in the order dated 17.11.2017, after making reference to the order dated 14.08.2017 earlier passed by the Tribunal in Excise Appeal No. 51849 of 2015, issued the same direction to the Adjudicating Authority to take a fresh decision after examining the nexus between the services and the final product of the appellant. The Department did not file any appeal against this order dated 17.11.2017 of the Tribunal and so the order passed by the Tribunal attained finality. The Commissioner was, therefore, required to examine only this limited issue on remand, but as the order would indicate, the Commissioner denied CENVAT credit observing that the work was basically of development of a civil structure of mining area by way of construction of decline/ramp and the same would merit classification as construction services , which services had been excluded under rule 2(l)(A) of the Credit Rules w.e.f. 01.04.2011. The Commissioner, therefore, in regard to the subsequent two show cause notices also went beyond the remand order. There is no hesitation in holding that the order dated 25.05.2018 passed by the Commissioner has travelled beyond the scope of the remand orders passed by the Tribunal on 14.08.2017 and 17.11.2017 and, therefore, cannot be sustained - when the services received by the appellant are covered within the means clause of the definition of input service , the appellant was justified in availing CENVAT credit on various services utilized for mine development at Khayad captive mines. The Commissioner was, therefore, not justified in examining the includes part or excludes part of the definition of input service when it had been contended on behalf of the appellant that the services utilized for mine development would be input service under the means clause of the definition of input service - Appeal allowed.

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• CST, VAT & Sales Tax

• 2021 (8) TMI 887
  Assessment for liability of sales tax - assessment was set aside on the short ground that the law on works contract has undergone change and that unless there is a specific rule framed under Section 29 of the OST Act for assessment of works contract under the OST Act, there should be no assessment of liability of sales tax on works contract in terms of Section 5(2)(AA)(i) of the OST Act - HELD THAT:- The Court is of the view that the impugned notice dated 20 th November, 2007 is unsustainable in law since it could have been issued only after complying with the specific directions issued in para 18 of the judgment dated 11th October, 2007. In other words, without framing the Rules as directed by the Court no fresh notice of hearing could have been issued. While setting aside the impugned notice dated 20th November, 2007 and permitting the Opposite Parties to issue a fresh notice of hearing in light of the Rules notified on 6 th February, 2010, the Court permits the Petitioner to raise all defences it has both in relation to such reassessment as well as validity of the Rules - Petition disposed off.

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• 2021 (8) TMI 880
  Maintainability of petition - compliance with the requirement of pre-deposit or not - HELD THAT:- Petitioner states that the Petitioner will be prepared to make the pre-deposit of Rs. 14,10,760/- within a period of four weeks with the Opposite Party-Department without prejudice to its rights and contentions and the appeal may be revived before the ACST (Appeals) subject to compliance of the directions given. Petition disposed off with various directions issued.

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