TMI Tax Updates - e-Newsletter
August 28, 2021

Case Laws in this Newsletter:

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

News

1. Advisory on HSN and GSTR-1 Filing

2. Implementation of Rule-59(6) on GST Portal

3. Income Tax Department conducts searches in Rajkot

4. Income Tax Department conducts searches in Visakhapatnam

5. Finance Minister Smt. Nirmala Sitharaman virtually chairs 2nd BRICS Finance Ministers and Central Bank Governors Meeting

Notifications

Customs

1. 47/2021 - dated 26-8-2021 - ADD

Seeks to levy anti dumping duty on imports of “ Natural Mica based Pearl Industrial Pigments excluding cosmetic grade ” originating in or exported from China PR for a period of five years.

GST - States

2. 24/2021-State Tax - dated 29-7-2021 - Chhattisgarh SGST

Amendment in Notification No. 14/2021–State Tax, dated the 18th June, 2021

3. 28/2021-State Tax - dated 27-7-2021 - Himachal Pradesh SGST

Supersession Notification No. 89/2020-State Tax dated the 23rd December, 2020

4. 27/2021-State Tax - dated 27-7-2021 - Himachal Pradesh SGST

Himachal Pradesh Goods and Services Tax (Fifth Amendment) Rules, 2021

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/IMD/IMD-I/DF9/P/CIR/2021/620 - dated 26-8-2021

Modalities for implementation of the framework for Accredited Investors

GST - States

2. CCT/26-4/2017-18/E/1311 - dated 25-8-2021

Clarification regarding extension of limitation under GST Law in terms of Hon’ble Supreme Court’s Order dated 27-04-2021

3. 05/2021-GST - dated 9-8-2021

Clarification regarding rate of tax applicable on construction services provided to a Government Entity, in relation to construction such as of a Ropeway on turnkey basis

4. 06/2021-GST - dated 9-8-2021

GST on service supplied by State Govt. to their undertakings or PSUs by way of guaranteeing loans taken by them

5. 03/2021-GST - dated 30-7-2021

Clarification in respect of applicability of Dynamic Quick Response (QR) Code on B2C invoices and compliance of notification 14/2020- State Tax dated 4th November 2020

6. 04/2021-GST - dated 30-7-2021

Clarification regarding GST on supply of various services by Central and State Board (such as National Board of Examination)

Highlights / Catch Notes

GST

• High Court Orders Tax Department to Allow VAT Credit Transition for Auto Financing Firm in Telangana.

  Case-Laws - HC : Transition of VAT Credit - the credit of the amount in Form GSTR-3B not allowed - petitioner contends that, it is into the business of non-banking financial company engaged in financing automobiles in the form of loans and financial leases to its customer and has operations in 14 States across India, including in the State of Telangana - Department directed to allow the credit - HC
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• Court Deems Challenge to Provisional Attachment Premature; Respondent's Objections u/r 159(5) Unresolved.

  Case-Laws - HC : Provisional attachment of goods - bogus invoices - writ court granted relief to the respondent - as on date, the respondent have not complied with the order passed by this Bail Court and the objections filed under Rule 159(5) of CGST Rules have not been disposed of by passing a reasoned order - The respondent, having sought for lifting the attachment by filing representation/objection dated 18.03.2021, ought to have pursued the same. Without pursuing the said objections, a challenge to the provisional attachment order has to be held to be premature. - HC
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Income Tax

• Court Deletes Additions Due to Lack of Evidence in Alleged Bogus Donation Case u/s 80GGA.

  Case-Laws - AT : Deduction u/s 80GGA - Allegation of Bogus Donation - the name of the Trust appears at Serial No. 14 in the notification dated 11.08.2011 and the the Trust is eligible for accepting donation u/s 35AC - No positive evidence is brought on record by the Revenue to substantiate that the donation money had infact travelled back to the assessee in the form of cash. - Additions deleted - AT
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• Court Orders Reconsideration of Registration Denial; No Evidence of Fraud Found u/s 12AA(1)(b)(ii.

  Case-Laws - AT : Exemption u/s 11 - denial of registration under section 12AA(1)(b)(ii) - There was no material to show that assessee (ITAT Bar Association) was not genuine or that its activities were not as professed in the MOA and AOA. There was no finding that assessee (ITAT Bar Association) was a sham entity - CIT(E) directed to consider the application for registration u/s 12AA - AT
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• Taxpayer Wins Right to TDS Credit After Rectification; AO to Verify Joint Venture Partner's Certificates.

  Case-Laws - AT : Credit of the TDS was not claimed in return of income because of non-appearance in the Form 26AS at the time of filing return of income, however knowing the correct situation, the appellant filed an application for rectification of mistake online - TDS certificates in the name of Joint Venture partner or Director - AO directed the allow the claim of TDS credit after verification - AT
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• Court Rules Addition u/s 68 Unsustainable; Firm's Explanation of Partner Contributions Accepted by Assessing Officer.

  Case-Laws - AT : Unexplained cash credit u/s 68 - cash received from partners - difference pointed out by the AO as capital introduced by both the partners of the assessee firm different from the capital contribution stated to be claimed by the assessee firm - when the same was satisfactory explained by the assessee inter alia in the form of capital contribution by the partners of the assessee firm, it is of the view that the addition as made by the AO and confirmed by the Ld. CIT(A) u/s 68 is not sustainable. - AT
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• Contested income addition u/s 68 due to income overflow in Form 26AS; reconciliation supports accrual accounting.

  Case-Laws - AT : Addition u/s 68 - Addition on the basis of income shown in Form No. 26AS - Mercantile system of accounting - There can be overflow of income of one preceding previous year in the current year in form 26AS. However, there cannot be overflow of income pertaining to the preceding previous year in the current previous year in the books of accounts of the assessee because assessee is maintaining books of accounts on accrual system of accounting. AO should have considered the income shown by the assessee in the earlier year in its profit and loss account, when assessee has filed detailed reconciliation before the ld AO. - AT
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• Revenue Authorities Should Not Interfere with Director Salaries; Disallowance u/s 40A(2)(b) Deemed Incorrect.

  Case-Laws - AT : Disallowance u/s 40A (2)(b) - payment of higher salary to the Directors - When a Company pays higher salary to the Directors of the Managers or other Officers or employees it is for the commercial expediency of internal affairs of the company, it is not for the Revenue Authorities to decide that particular salary should not have been paid to the Directors. It is the business decision and, therefore, the disallowance u/s 40A(2)(d) is wrongly invoked - AT
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• Court Finds No Violation of Natural Justice in Section 144B Assessment; Petitioner's Multiple Adjournments Not Justified.

  Case-Laws - HC : Assessment u/s 144B - violation of principle of natural justice - series of adjournments were granted on the prayer of the petitioner from time to time - petitioner could not make out a case of any patent jurisdictional error or that the assessing officer acted contrary to any specific provision of law in course of the impugned assessment proceeding. - in my considered opinion, sufficient opportunities of hearing were given to the petitioner and there was no violation of principles of natural justice in course of impugned assessment proceeding - HC
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• High Court Rules: Designated Authority Cannot Add Interest to Disputed Tax Under DTVSV Act.

  Case-Laws - HC : Interest sought to be recovered as disputed tax from the assessee in Form-3 under the DTVSV Scheme - the Respondent No.1 (CIT) Designated Authority having no power or authority to add/include this amount to the disputed tax under the provisions of the DTVSV Act. - HC
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Customs

• High Court dismisses petition; seizure of goods pending investigation under Customs Act, Sections 108, 111, 112, and 124.

  Case-Laws - HC : Seizure of imported goods - Validity of seizure memo - The exercise of seizure is an interim measure pending investigation. What is evident from the affidavit-in-reply filed by the investigating agency is that based on the statements recorded under Section 108 of the Customs Act, 1962, the investigation is pending. Reading of the provisions of the Customs Act, 1962 Sections 111 and 112 which provide for confiscation of goods post an investigation, the authorities are required to issue a show-cause notice under Section 124 of the Customs Act, 1962 before confiscation of goods. That stage has yet not reached. - Petition dismissed - HC
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Service Tax

• Section 73-A Not Invoked: Excess Service Tax Recovery Cannot Be Demanded Without Appellate Challenge.

  Case-Laws - AT : Recovery of excess amount collected as service tax - Although show cause notice invoked the provisions of Section 73-A of the Act, but the adjudicating authority has not invoked the provisions of Section 73-A of the Act and the said findings of the adjudicating authority have not been challenged by either of the side before any appellate authority - the confirmation of the excess amount recovered by the appellant cannot be demanded under Section 73 of the Act. - AT
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• Sub-contractor must pay service tax despite main contractor's payment, but claims beyond normal limitation period are void.

  Case-Laws - AT : Levy of service tax - liability on activity of sub-contractor when main contractor has discharged the service tax liability - the appellant / sub-contractor is liable to pay the Service Tax even if the main contractor has discharged the liability - However, demand beyond the normal period of limitation set aside - AT
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• Refund Approved: No SCN Issued for Deposited Amount in Investigation, Rejection Deemed Unauthorized, Amount Refundable.

  Case-Laws - AT : Refund claim - Amount deposited during investigation - no SCN issued to the appellant either for appropriation or for rejection of the amount - the amount paid during the course of investigation is only an amount of deposit, the same cannot be formed part of service tax. Therefore, rejection of refund claim by the respondent is without authority of law and the same is refundable to the appellant. - AT
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• Appellant Entitled to Refund of Excess Service Tax Paid Before July 1, 2017; Limitation Period Not Applicable.

  Case-Laws - AT : Refund of excess amount of service tax paid - Since post July 01, 2017, the applicability of this Rule was no more available to the appellant, the excess amount already got deposited by the appellant at the time when Service Tax liability for the said quarter had not even accrued towards the appellant, but remain unutilised for any tax liability till 30.06.2017, the amount cannot qualify for being called tax. - Department cannot be allowed to get unjustly enriched out of said money - Period of limitation not applicable - AT
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Central Excise

• CENVAT Credit Allowed: Control and Ownership Retained by Seller Until Delivery Under FOR Basis Sales.

  Case-Laws - AT : Wrongful availment of CENVAT Credit - outward freight - sale on FOR basis - place of removal - Since the buyer had a right to reject the goods after receiving them at his place and he was supposed to make the payment at his place, that too after inspecting the goods also. Also since the appellant had a right to sell the goods to someone else, before the goods reach to the buyer at his destination, it become ample clear that the control and possession of propriety in the goods remained with the appellant till they reach the place of his buyer. - Credit allowed - AT
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• Court Rules Against Refund of Interest on Differential Duty Due to Price Variation Clause; Refund Deemed Erroneous.

  Case-Laws - AT : Recovery of erroneous Refund of interest on delayed payment of differential duty - price variation clause - Rejection on the ground that since the appellant was liable to pay interest on the price variation amount, he is not liable to get the refund thereof - The appellant was liable to pay the interest on subsequent price variation with effect from the date of removal of the goods involved - the refund of the amount of interest already paid by the appellant was erroneous. - AT
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• CENVAT Credit Allowed for Sales Promotion: Commission Paid to Financers Counts as Eligible Input Service.

  Case-Laws - AT : CENVAT Credit - input services - sale promotion - commission paid to the various financers for selling their vehicles - The financers are indirectly providing the services of sales promotion to the appellant. Sales promotion is inclusive part of the definition and the same can be availed beyond the place of removal as there is no bar on the same in the definition itself. - Credit allowed - AT
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Case Laws:

• GST

• 2021 (8) TMI 1127
  Attachment of Bank Account of petitioner - lack of jurisdiction in issuing the attachment order - HELD THAT:- The representation made by the petitioner is already pending before respondent no.3 - the said attachment order dated 14.1.2021 was passed on the date on which a search was carried out at the premises of the petitioner under Section 67 of the Central, GST, 2017. Therefore, there was no inherent lack of jurisdiction in issuing the attachment order. Post decisional hearing was to be afforded by respondent no.3 after it had issued, the attachment order dated 14.1.2021 (Annexure-3 to the writ petition). In that regard, the petitioner has already filed a written objection dated 25.3.2021. That was received by respondent no.3 on 1.4.2021 - no useful purpose would be served in keeping the present petition pending or calling for a counter affidavit, at this stage. Petition disposed off.

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• 2021 (8) TMI 1123
  Seeking grant of Bail - availment of fake input tax credit - generation of invoices without actual supply of goods - offence u/s 132 of Central Goods and Service Act, 2017 - HELD THAT:- This complaint alleges commission of an economic offence of huge magnitude and therefore, a thorough and detail investigation is essential. Further, considering the enormous materials collected and placed before this Court, vide the record, in respect of manipulation of invoices, etc and thereby allegedly evading tax by the petitioner to the tune of Rs. 28,97,85,917/- by way of illegally availing ITC, the enlargement of the petitioner on bail, at this stage is likely to hamper the investigation and tamper evidence which may amount to compromising with the entire investigation of the case. This Court has also taken note of the fact that the investigation of the case, involves a huge number of documents to be examined at different levels and at different places necessitating reasonably sufficient time to the Investigating Agency. Petition disposed off.

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• 2021 (8) TMI 1122
  Transition of VAT Credit - the credit of the amount in Form GSTR-3B not allowed - petitioner contends that, it is into the business of non-banking financial company engaged in financing automobiles in the form of loans and financial leases to its customer and has operations in 14 States across India, including in the State of Telangana - HELD THAT:- Though the respondents filed a lengthy counter-affidavit, it neither denied or disputed the ARN number generated from their systems and the email received by the petitioner of successful filing of GST TRAN-1 Form. In the absence of any denial to the ARN number or email sent to the petitioner, it is not open for the respondents now to turn around and allege the petitioner to be a non-filer. Further, no explanation is offered by the respondents as to which transaction the ARN number referred to by the petitioner is relatable to, if under the said ARN number, the petitioner has not filed Form GST TRAN-1 on 27.12.2017. In an identical situation, in petitioner s own case, the Bombay High Court in BMW INDIA FINANCIAL SERVICES PVT. LTD., VERSUS UNION OF INDIA, STATE OF MAHARASHTRA, GOODS AND SERVICE TAX COUNCIL, GOODS AND SERVICES TAX NETWORK (GSTN) NEW DELHI [ 2020 (10) TMI 1217 - BOMBAY HIGH COURT] considering a similar issue of transitional credit of Rs. 17,07,673/- claimed through TRAN-1 filed on 27.12.2017 not being transitioned into the petitioner s electronic credit ledger despite successful filing, while observing that the action of the respondents is unfair and unjust - the Bombay High Court allowed the writ petition and directed the respondents to take such action as may be necessary for transitioning the credit of such amount into petitioner s credit ledger/electronic credit ledger within four weeks from the date of the order. In the facts of the present case, there are no reason to take a different view from the one as expressed by the Bombay High Court, merely because the respondents chose to file a counter in the present writ petition alleging negligence on the part of the petitioner, which in our concerned view, as detailed herein above is without any basis, unsubstantiated apart from being reprehensible. The respondents are directed to transition the credit of amount of Rs. 21,07,574/- claimed by the petitioner, into petitioner s electronic credit ledger in Form GST PMT-2 maintained on the portal, within a period of four weeks from the date of the order - petition allowed.

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• 2021 (8) TMI 1121
  Provisional attachment of goods - bogus invoices - writ court granted relief to the respondent - Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Admittedly, what was put to challenge was only the order of provisional attachment and the statutory machinery provides for a mechanism for filing objections against such provisional attachment. As rightly pointed out by the learned counsel appearing for the respondent/writ petitioner, the respondent appears to have understood the factual and legal provisions in a proper manner and has given a representation/objection, dated 18.03.2021, seeking to lift the order of attachment under Section 83 of the CGST Act. This application is undoubtedly an application to be reckoned under Rule 159(5) of the CGST Rules. However, the fact remains that the appellant/Department has not disposed of the said application by passing a reasoned order. The respondent has failed to comply with the conditions imposed by this Court while granting bail vide order dated 19.02.2021. No doubt, the respondent have preferred Special Leave Petition before the Hon ble Supreme Court, in which, notice has been ordered. Thus, as on date, the respondent have not complied with the order passed by this Bail Court and the objections filed under Rule 159(5) of CGST Rules have not been disposed of by passing a reasoned order - The respondent, having sought for lifting the attachment by filing representation/objection dated 18.03.2021, ought to have pursued the same. Without pursuing the said objections, a challenge to the provisional attachment order has to be held to be premature. Appeal allowed.

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• Income Tax

• 2021 (8) TMI 1124
  Addition u/s 68 - share capital of more than Rs. 316 Crores invested by the foreign company in assessee - argument of the appellant is that no show cause notice was issued before the addition was made by resorting to Section 68 - HELD THAT:- The statutory provision does not specifically state that a show cause notice is required to be issued. What is required is that where any sum is found credited in the books of the assessee and it is pointed out by the Assessing Officer, the assessee is required to offer an explanation about the nature and source thereof and if the assessee offers no explanation or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax. Admittedly, in the instant case, the assessee has been put on notice and the assessee had participated in the assessment proceedings and submitted their explanation. AO questioned the source for the fund for the share application money and the assessee stated that an amount of Rs. 127,47,05,650/- was received from M/s.Rakeen (P.) Ltd., Mauritius and Rs. 5,00,000/- was received from Indian Promoter. The Assessing Officer has stated that there was no proof filed by the assessee to substantiate its existence and claimed to have 100% share capital transferred from Rakindo Developers PJSC (FZE) Dubai. Further, the company has no entity, but it is just a conduit to transfer funds to India from Mauritius and this, according to the Assessing Officer, is evident from the consolidated balance sheet of the Dubai company. Assessing Officer proceeds to analyse the Dubai company and has mentioned that on perusal of the balance sheet of the Dubai company, it is noticed that the promoters of the Dubai company had diverted/transferred funds to various concerns during the year. Once again, the assessee has been called upon to explain and the assessee was represented by an authorized representative, who had stated that Reyada Investment Ltd., was holding 48% of shares in the Dubai company originally. On a perusal of the above findings, as recorded by the Assessing Officer, it will be evidently clear that the entire controversy involved in the matter is fully factual. We do not agree with the submission that the assessee did not have adequate opportunity to put forth their case, as the Assessing Officer has recorded that the assessee has been represented by the authorized representative and if according to the assessee, the documents have not been properly appreciated or to be appreciated in the manner as decided by the assessee, it is for the assessee to agitate the same before the appellate authority and there is no justifiable or valid reason for the assessee to bypass the appellate remedy available under the Act. - Decided against assessee.

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• 2021 (8) TMI 1103
  Interest sought to be recovered as disputed tax from the assessee in Form-3 under the DTVSV Scheme - interest sought to be recovered as disputed tax be understood as the one paid pursuant to Section 244A and not Section 234D - HELD THAT:- We quash and set aside Form-3 dated 31st March, 2021 issued by Respondent No.1 for Assessment Year 2010- 11 as being without jurisdiction, the Respondent No.1 Designated Authority having no power or authority to add/include this amount to the disputed tax under the provisions of the DTVSV Act. We direct Respondent No.1 to issue fresh Form-3 to Petitioner determining the amount of disputed tax in accordance with the above discussion within three weeks from the date of pronouncement of this order and thereafter Petitioner to make payment of the disputed tax so determined within a period of two weeks of the issuance of revised Form -3.

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• 2021 (8) TMI 1102
  Assessment u/s 144B - violation of principle of natural justice - respondent concerned not giving adequate and effective opportunity of hearing to the petitioner - whether assessing officer has committed jurisdictional error and that the alternative remedy is no bar in entertaining this Writ Petition since violation of natural justice is a jurisdictional error? - HELD THAT:- It is established from record that series of adjournments were granted on the prayer of the petitioner from time to time and the petitioner did not comply with many notices and sometime in response to some of the notices on some occasion replied to the show-cause notice in detail and furnished material evidence and documents in support of its case before the Assessing Officer in course of impugned assessment proceeding. In my considered opinion petitioner could not make out a case of any patent jurisdictional error or that the assessing officer acted contrary to any specific provision of law in course of the impugned assessment proceeding. In view of the discussion made above and after taking into the consideration records available/annexed to the Writ Petition, in my considered opinion, sufficient opportunities of hearing were given to the petitioner and there was no violation of principles of natural justice in course of impugned assessment proceeding and in passing the assessment order and in the instant case it cannot be said that the assessing officer/respondent concerned who passed the assessment order was having inherent lack of jurisdiction or his action in course of impugned assessment proceeding was contrary to any specific provision of law and the impugned assessment order is not liable to be interfered with in constitutional writ jurisdiction of this Court under Article 226 of the Constitution.

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• 2021 (8) TMI 1101
  Disallowance u/s 40A (2)(b) - higher salary to the Directors or the Managers or other Officers or employees - HELD THAT:- The assessee company has paid the Directors remuneration during the previous year as well as the subsequent years, the Assessing Officer has observed that they are the Managers to Directors and control the company. AO has not disputed that the Board meeting has approved the increase of remuneration payable to the Directors in accordance with the provisions of the Companies Act, 1956 during the previous year 2011-12 2012-13. When a Company pays higher salary to the Directors of the Managers or other Officers or employees it is for the commercial expediency of internal affairs of the company, it is not for the Revenue Authorities to decide that particular salary should not have been paid to the Directors. It is the business decision and, therefore, the disallowance u/s 40A(2)(d) is wrongly invoked - Decided in favour of assessee.

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• 2021 (8) TMI 1100
  Disallowance of claim of business loss - loss if not allowed in the year under consideration then it be allowed in A.Y. 2015-16 - HELD THAT:- It is an undisputed fact that the aforesaid amount which has been disallowed by the AO represents the compensation paid by the assessee to Ms Susan Beer on account of the decision of the Hon ble Delhi High Court. It is also an undisputed fact that the payment of the aforesaid amount arose on account of the decision of Hon ble Delhi High Court which was pronounced on 30.05.2014. It is also an undisputed fact that out of the total compensation amount of Rs. 5,28,80,795/- was deposited with the Registrar of High Court during the year under consideration and the balance amount of Rs. 2,40,56,079/- was deposited with the Registrar on 26.08.2014. The incurring of expenditure is not in doubt and genuineness of the claim is not in dispute - the amount that was paid during the year under consideration i.e. Rs. 5.28 crore (rounded off) be allowed as an expense in the year under consideration and the balance amount of Rs. 2.40 crore (rounded off) which was deposited with the Registrar High Court be allowed as deduction in A.Y. 2015-16. Thus the claim of the assessee is allowed.

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• 2021 (8) TMI 1099
  Addition u/s 68 - difference in total revenue shown as per the books of account of the assessee and income shown in Form No. 26AS for that year - Mercantile system of accounting - HELD THAT:- CIT-A correctly deleted the addition as the amounts of service tax shown in the invoice are not reflected to the extent of service tax included in the gross value of payment. With respect to certain invoices, which were pertaining to assessment year 2012-13, included by the assessee in the income of those years whereas same were shown as payment made by the customer in the Form No. 26AS of this year. Interchangeability of receipts from Reliance Communication Ltd and Reliance Communication Infrastructure Ltd pertaining to the same group. The ld CIT (A) examined the reconciliation of both the companies individually with Form No. 26AS and no difference were found.The failure of the ld AO to consider the income shown under the other segment of the assessee already shown as income in the profit and loss account and merely comparing with one of the segment of the income. The above reasons are verified by the ld CIT (A) to the extent of each rupee and have given detailed analysis with respect to each of the parties. The ld DR could not show us any infirmity in the order of the ld CIT(A) in deleting the above additions - Therefore, we confirm the order of the LD CIT (A) and dismissed the ground of appeal of the LD AO. There can be overflow of income of one preceding previous year in the current year in form 26AS. However, there cannot be overflow of income pertaining to the preceding previous year in the current previous year in the books of accounts of the assessee because assessee is maintaining books of accounts on accrual system of accounting. AO should have considered the income shown by the assessee in the earlier year in its profit and loss account, when assessee has filed detailed reconciliation before the ld AO. The ld AO could also have verified the above with the books of account produced before him - difference between the revenue shown in the Form No. 26AS and the profit and loss account of the assessee , may trigger a doubt in the mind of the learned assessing officer, but that doubt needs to be further clarified by carrying out further examination of the details and reconciliation. Merely, issuing notices u/s 133(6) and not receiving the reply cannot result an addition into hands of the assessee. According to us, AO should have carried out further examination before making such a huge addition - Addition made by the ld AO has been correctly deleted by the CIT (A).

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• 2021 (8) TMI 1098
  Set off of Business Loss and unabsorbed depreciation of scooter business against property dealing income - whether the income declared in the course of survey and disclosed in the return of income as business income, could be eligible for set off of loss or not? - HELD THAT:- More particular circular issued by CBDT, Circular No.1/2019 dated 18.06.2019, the claim of the assessee for set off of loss would be allowable. As it is clarified by the CBDT that section 115BBE(2) came into statute book w.e.f. 01.04.2017, we hold accordingly. AO is hereby directed to allow the claim of set off of loss against the business income disclosed during the course of survey proceedings. Thus, Ground Nos.1 2 raised by the assessee are allowed.

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• 2021 (8) TMI 1097
  Disallowance u/s 37 (1) - AO has disallowed 10% of the expenses on ad-hoc basis claimed under the head telephone expenses , travelling expenses and staff welfare expenses on the ground that element of personal use cannot be overruled as no logbook was maintained for Vehicles, details of phone calls was not maintained in respect of telephones and proper vouchers of tour and travel expenses were not maintained - HELD THAT:- In our opinion, the Assessing Officer is not justified in making ad-hoc disallowance out of expenses without pointing out specific error or absence of particular voucher of expenses - Tribunal in identical circumstances has upheld the deletion of such disallowance. Respectfully, following the finding of the Tribunal in the case of the assessee in immediately preceding assessment year, we uphold the finding of the Learned CIT(A). The ground No. 1 of the appeal of the Revenue is accordingly dismissed. Disallowance u/s 14A - CIT(A) deleted the disallowance in view finding of his predecessor and no exempt income earned by the assessee - HELD THAT:- We find that the Ld. CIT(A) has deleted the disallowance relying on the decision of the Hon ble Delhi High Court in the case of Cheminvest Ltd [ 2015 (9) TMI 238 - DELHI HIGH COURT] . We do not find any error or illegality in the finding of the ld. CIT(A). Accordingly, the grounds No. 2 3 of the appeal of the Revenue are dismissed. Disallowance of interest expenditure related to interest free advances u/s 36(1)(iii) - AO observed that building was put to use in the year under consideration and interest on money borrowed corresponding to the period for which the building was not put to use was computed - HELD THAT:- As assessee has already transferred the interest to preoperative expenses which has been allocated to fixed assets. The facts in the year under consideration are identical to assessment year 2010-11 [ 2019 (1) TMI 1062 - ITAT DELHI] thus, respectfully following the finding of the Tribunal (supra), we uphold the deletion of the addition by the Ld. CIT(A). The ground No. 4 to 6 of the appeal are accordingly dismissed.

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• 2021 (8) TMI 1096
  Unexplained cash credit u/s 68 - cash received from partners - difference pointed out by the AO as capital introduced by both the partners of the assessee firm different from the capital contribution stated to be claimed by the assessee firm - HELD THAT:- The main source of cash in hand was explained by the assessee as capital contribution made by its partners and since the said source was clearly established on the basis of cash book showing introduction of capital by the partners, the difference as pointed out by the AO in the total capital contribution as claimed by the assessee to the extent of Rs. 31,00,000/- was not relevant to the issue and such shortfall cannot be treated as income u/s 68 in the hands of the assessee firm by treating the same as unexplained cash credit. The issue was relating to the source of cash in hand as reflected in the balance sheet of the assessee as on 31.03.2015 and when the same was satisfactory explained by the assessee inter alia in the form of capital contribution by the partners of the assessee firm, it is of the view that the addition as made by the AO and confirmed by the Ld. CIT(A) u/s 68 is not sustainable. We delete the same and allow this appeal of the assessee.

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• 2021 (8) TMI 1095
  TP Adjustment - comparable selection - HELD THAT:- E-Zest Solutions Limited - As in the case of GXS India Technology Centre (P.) Ltd. [ 2015 (8) TMI 227 - ITAT BANGALORE] , since assessee in our case is into software development services, same cannot be functional compared with E-Zest Solutions Limited, which is into KPO services. Therefore, we direct the AO / TPO to exclude E-Zest Solutions Limited from the final list of comparables. It is ordered accordingly. Softsol India Limited - On identical facts, the Tribunal in the case of GXS India Technology Centre (P.) Ltd. (supra) had held that Softsol India Limited is to be excluded from the comparables list of companies on account of that it was having related party transactions in excess of 15%. In view of the above order of the Tribunal and also for the fact that assessment year being the same (A.Y.2008-2009), we direct the AO / TPO to exclude Softsol India Limited from the final list of comparable companies. Benefit of deduction u/s 10A in respect of additions agreed for the MAP proceedings - HELD THAT:- On identical facts, the Tribunal in assessee s own case [ 2020 (6) TMI 699 - ITAT BANGALORE] had held that additions agreed under MAP proceedings was entitled to the benefit of deduction u/s 10A. Deduction u/s 10A of the I.T.Act by excluding the expenditure deducted from the export turnover also to be reduced from the total turnover - HELD THAT:- We are of the view that the above issue raised by the Revenue is no more res integra. As in the case of CIT v. HCL Technologies Ltd. [ 2018 (5) TMI 357 - SUPREME COURT] had held that when expenditure are reduced from the export turnover, the same need to be reduced also from the total turnover while calculating deduction u/s 10A of the I.T.Act. In view of the dictum laid down by the Hon ble Apex Court, ground No.1 raised in Revenue s appeal is rejected.

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• 2021 (8) TMI 1094
  Addition of share premium u/s 56(2)(viib) - Determination of value of shares - method of valuation - DCF method - assessee furnished a valuation report in support of the share premium amount, wherein shares had been valued under discounted cash flow method (DCF) - A.O. noticed that the projections given in the valuation report prepared under DCF method do not tally with the actual, as per the return of income - HELD THAT:- AO has proceeded to determine the value of shares by adopting different method without scrutinizing the valuation report furnished by the assessee under DCF method. Accordingly, we set aside the orders passed by Ld CIT(A) and restore the impugned issue to the file of the AO with the direction to examine this afresh as per the directions given by the co-ordinate bench in the case of Innoviti Payment Solutions P Ltd [ 2019 (1) TMI 688 - ITAT BANGALORE] - Appeal of the assessee is treated as allowed.

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• 2021 (8) TMI 1093
  Unexplained cash credit under section 68 - no evidence filled in support of the claim of receipt of money from Mr. Suresh Shervegar - HELD THAT:- The documents now sought to be filed by the assessee as additional evidence prima facie shows the source of funds is from Banks and requires examination by the AO and the AO has to be satisfied with the identity, capacity of the creditors and the genuineness of the transaction. For carrying out this exercise, it is necessary that the impugned order of the CIT(A) should be set aside and the issue with regard to addition u/s 68 has to be remanded to the AO for fresh examination. - Appeal of the assessee is treated as allowed for statistical purposes

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• 2021 (8) TMI 1092
  Rectification of mistake field u/s. 154 - credit of the TDS was not claimed in return of income because of non-appearance in the Form 26AS at the time of filing return of income, however knowing the correct situation, the appellant filed an application for rectification of mistake online - TDS certificates in the name of Joint Venture partner or Director - HELD THAT:- We conquer with the argument of the Ld. A.R. that at the time of filing of original return u/s. 139 the payment of TDS was not reflected in Form 26AS as deductor had not remitted the same in the Government account and as evident from the record and from Form 26AS M/s Aditya Coke Pvt. Ltd. had remitted TDS of Rs. 12,41,617/- on 24/03/2013. The Hon ble High Court of Andhra Pradesh in the case of CIT vs. Bhooratnam Co.. [ 2013 (1) TMI 478 - ANDHRA PRADESH HIGH COURT] wherein it is held that the revenue cannot be allowed to retain tax deducted at source without credit being available to anybody, if credit is not allowed to the assessee, and the joint venture has not filed return of income, then credit of the TDS cannot be taken by anybody. This is not the spirit and intention of law. Therefore, in our view, the Assessing Officer erred in denying the benefit of the TDS mentioned in the TDS certificates filed by the assessee on the ground that the TDS certificate is issued in the name of the joint venture or a director and not the assessee . CBDT has also vide instruction No. 5/2013 dated 08/07/2013 even in the cases of mismatch of TDS directed to give credit of TDS when the assessee furnishes the TDS certificate. - In the present case, the appellant furnished the TDS certificate and at the time of filing of original return could not file because M/s Aditya Coke Pvt. Ltd. remitted the TDS in the Government account on 24/03/2013. Therefore same was not reflecting at the time of filing of return. We set aside this matter back to the tile of the Assessing Officer examine the Form 26AS and other details have been submitted by the appellant before the lower authorities and if it is found that M/s Aditya Coke Pvt. Ltd. has remitted the TDS of Rs. 12,41,617/- in the Government account then will give benefit of the same to the assessee.Appeal filed by Assessee is allowed.

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• 2021 (8) TMI 1091
  Rectification of mistake u/s 154 - total income of the assessee as considered by the Assessing Officer different from total income determined in the assessment order- HELD THAT:- As from Ground raised by the assessee company total income of the assessee for the year under consideration was determined by the Assessing Officer vide an order passed u/s 144 of the Act at Rs. 15,62,97,564/-. However, while computing the tax payable by the assessee in the Income tax computation form attached with the assessment order, the total income of the assessee was wrongly considered by the AO at Rs. 6,00,76,720/- as against the total income of the Rs. 15,62,97,564/- determined in the assessment order. There was thus a clear mistake committed by the AO and since the same was apparent from record, we find merit in the contention of the ld. D/R that it was rightly rectified by the AO vide an order passed u/s 154 of the Act. - no infirmity in the order of the ld. CIT(A) upholding the order of the Assessing Officer u/s 154 of the Act and upholding the same - Appeal of the assessee is dismissed.

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• 2021 (8) TMI 1090
  Rectification u/s 254 - recognition of goodwill required or not - pooling of interest method in the scheme of amalgamation - assessee in the scheme of amalgamation did not specify whether it was following pooling of interest method or purchase method of amalgamation - HELD THAT:- The provisions of section 254(2) of the Act empowers the ITAT to rectify the mistake committed by it. But such a mistake aassessee in the scheme of amalgamation did not specify whether it was following pooling of interest method or purchase method of amalgamation.s to be apparent from record. There are various judicial precedents on the concept what a mistake apparent from record is. Generally, wherever two views are possible with respect to any issue/question, it is implied that the mistake cannot be said as apparent. In this respect we find support and guidance from the observationt in the case of ACIT-Rajkot vs. Saurashtra Kutch Stock Exchange Ltd. [ 2008 (9) TMI 11 - SUPREME COURT] where the Hon ble Apex Court defined the term apparent mistake in context of section 254(2). This fact has not been disputed. The relevant finding of the ITAT is on para 31.7 to 31.9 of the order. It was also recorded that there is no dispute qua the fact of making the payment by way of issuing the shares which is a valid mode of payment as held by the Hon ble Delhi High Court in case of CIT vs. Mira Exim Ltd [ 2013 (10) TMI 228 - DELHI HIGH COURT] . Accordingly, the ITAT after considering all these facts have recognized the goodwill in the books of accounts of the assessee. Revenue has not pointed out any mistakes with respect to the above finding of the ITAT. Therefore it cannot be said that there is a mistake apparent from record arising from the order of the ITAT. Principles laid down by the Hon ble Supreme Court in the case of CIT vs. Smifs Securities Ltd [ 2012 (8) TMI 713 - SUPREME COURT] are not applicable in the case on hand. In this regard, we note that once the ITAT has recognized the goodwill in the books of the assessee which is a tangible assets as held by the Hon ble Supreme Court. Therefore the reference made to the above judgment of the Hon ble Supreme Court was not made in the context of AS 14 and AS 103. But it was referred to hold that the goodwill being intangible asset is eligible for the depreciation. We do not find that there is any mistake in the order of the ITAT which is apparent from record. Hence, we disagree with the contention of the learned DR. Thus the MA filed by the Revenue is dismissed.

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• 2021 (8) TMI 1089
  Rectification of mistake u/s 254 - Assessee contended that, tribunal has not considered annexure 12, 14 and 16 of the paper book and also ignored the affidavit placed on page no.10 and 11 of the paper book - Tribunal has not considered the order passed in the case of Kavita Verma - HELD THAT:- It is clear that the Tribunal had considered all the evidences and the case law as relied upon by the learned counsel for the assessee and took conscious decision. Therefore, the contention of the assessee would not fall within the ambit of section 254 of the Act. Hence, the miscellaneous application filed by the assessee is hereby dismissed, being devoid of any merit.

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• 2021 (8) TMI 1088
  Exemption u/s 11 - denial of registration under section 12AA(1)(b)(ii) to ITAT Bar Association - CIT s jurisdiction to denied deduction - HELD THAT:- So far as grant of registration u/s 12AA of the Act is concerned, the Ld. CIT s jurisdiction is only to verify the objects of the institution and genuineness of the activities, meaning thereby that he has to satisfy himself that objects are charitable in nature and activities being carried on or to be carried on are genuine, meaning thereby that they are in consonance for achieving of charitable objects and nothing else. From a reading of section 12A and 12AA of the Act what is intended thereby is only a registration simplicitor of the entity/trust. The registration u/s 12AA of the trust has been made a condition precedent for claiming the benefits of the exemption u/s 11 and 12 of the Act. While processing the application for registration u/s 12AA of the Act, no examination of the modus of the application of the funds of the assessee is called for. The stage for consideration of the application of the funds vis-a-vis objectives of the trust arises at the time of assessment by the A.O. where benefits are claimed by the assessee in terms of section 11 and 12 of the Act and AO can examine the question as to the nature of the contributions etc. at the time of assessment. At the time of registration of the assessee u/s 12AA is concerned what is to be looked into is whether the assessee trust is a genuine one or whether it is a sham institution floated only to avail the benefits of exemption under the Act. CIT(E) could have examined only the genuineness of the association and its activities postulated, are to achieve the objects for which it is created. There was no material to show that assessee (ITAT Bar Association) was not genuine or that its activities were not as professed in the MOA and AOA. There was no finding that assessee (ITAT Bar Association) was a sham entity and therefore, we are inclined to set aside the order of the Ld. CIT(E) with the direction to him to consider the application for registration u/s 12AA of the Act, de novo, by passing a speaking order in accordance to law and after giving adequate opportunity to the assessee in accordance to law. Appeal of the assessee is allowed for Statistical purposes.

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• 2021 (8) TMI 1087
  Revision u/s 263 - irregularities computing deduction claimed u/s 80P(2) - whether interest on savings bank account and interest from fixed deposits are eligible for deduction under section 80P(2)(d) of the Act or not, specially where the assessee has submitted the details of interest on savings bank account and interest on fixed deposit before the AO - HELD THAT:- Assessee has shown income from other sources comprising interest income from savings bank account, fixed deposits, sale proceeds of old newspapers. The AO has examined these issues in respect of interest and interest on fixed deposits, and took a possible view, therefore, order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue. Assessee has submitted the details of interest income from savings bank account and interest income from fixed deposits before the AO which is evident from page no.2 of the order of the Assessing Officer passed by him under section 143(3) of the Act, dated 18.10.2016. Just because, the assessee has, by mistake and inadvertently, mentioned the interest on saving bank and interest on fixed deposits under the head Income from other sources , does not mean that assessee would not be eligible to claim deduction under section 80P(2)(d) of the Act. Right income should be taxable in the hands of the assessee in the right assessment year. Income returned under an erroneous understanding or misconception of law is not chargeable under the Act [Abdul v CIT [ 1989 (12) TMI 37 - ALLAHABAD HIGH COURT] ]. During the assessment proceedings, the AO has issued notice under section 142(1) of the Act, dated 8th September, 2016, wherein the AO asked the assessee to furnish the details, documents and explanations about the deduction claimed under chapter VIA - Therefore, the AO having examined the submissions and documents filed by the assessee, passed the order under section 143(3) of the Act dated 18.10.2016. We also note that assessment order passed by the assessing officer is sustainable in law, as the Coordinate Bench of ITAT Mumbai in the case of Lands and Co-Operative Housing Society Ltd. [ 2016 (2) TMI 620 - ITAT MUMBAI] has held that interest earned by Co-Operative Housing Society on Investment with a Co-Operative Bank is eligible for deduction U/s 80P(2)(d) - An order of assessment passed by the Assessing Officer should not be interfered with only because another view is possible, as held by Hon`ble Supreme Court in the case of CIT vs. Green World Corporation [ 2009 (5) TMI 14 - SUPREME COURT] - Hence, such order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue. Therefore, we quash the revision proceedings initiated by the learned PCIT under section 263 - Decided in favour of assessee.

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• 2021 (8) TMI 1086
  Deduction u/s 80P(2)(d) - whether interest income derived from deposits with cooperative banks is eligible for deduction under section 80P(2)(d) of the Act or not has not crystallised so far? - HELD THAT:- The coordinate Bench of the Tribunal in the case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd. [ 2018 (4) TMI 1678 - ITAT MUMBAI] considering various decisions by Hon ble High Courts and the Tribunal and the provisions of the Act, has held that interest income derived by a co-operative society from investments with co-operative bank, would be entitled for deduction under section 80P(2)(d). In the case of PCIT vs. Totagars, Cooperative Sale Society [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] has held that for the purpose of section 80P(2)(d) of the Act, co-operative bank should be considered as cooperative society. Similar view has been taken by the Hon ble Gujarat High court in the case of Surat Vankar Sahakari Sangh Ltd. [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] Accordingly, following the decision in the earlier case of Totagars Co-operative Sale Society [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] and in the case of Vankar Sahakari Sangh [ 2016 (7) TMI 1217 - GUJARAT HIGH COURT] the deduction claimed by the assessee under section 80P(2)(d) of the Act in respect interest derived from investments with the cooperative bank is allowed. - Decided in favour of assessee.

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• 2021 (8) TMI 1085
  Rectification of mistake u/s 254 - grievance of the Revenue is that the Tribunal has granted relief to the assessee and there are factual inconsistencies in the order of Tribunal and there is enough material on records in the form of inventory of Stock Cash found during the course of survey which has escaped the notice of Tribunal while passing the order - HELD THAT:- Power of rectification u/s 254(2) of the Act can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from record and not a mistake which requires to be established by arguments and long drawn process of reasoning. Tribunal cannot exercise its power of rectification, look into some other circumstances which would support or not support its conclusion so arrived at. The mistake which the Tribunal is entitled to correct is not an error of judgment but a mistake which is apparent from record itself. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion, is not an error apparent on the record, although it may be an error of judgment. It has further held that in the grab of an application for rectification it is not permissible to the parties to reopen and reargue the whole matter. Hon ble Kerala High Court in the case of P.T. Manuel and Sons [ 2021 (3) TMI 435 - KERALA HIGH COURT ] has held that the power of rectification is not akin to that of appeal or even a review. It has further held that merely because there is a wrong or erroneous order or a wrong appreciation of facts, the same cannot be grounds for rectification though they could be grounds for appeal. In view of the aforesaid facts and following the decisions cited hereinabove, we are of the view that since the Revenue has filed to point out any mistake apparent from record in the order as contemplated u/s 254(2) of the Act, we are not inclined to recall order - Misc. Application of the Revenue is dismissed.

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• 2021 (8) TMI 1084
  Rectification of mistake - error in filing the correct column in the return of income with correct figures have resulted into a huge demand - appellate authorities power to admit fresh claim - HELD THAT:- It is the assessee who has claimed to have made alleged mistake while filing return of income and now the assessee is resiling from its own position, thus, burden cast on assessee is very heavy. We are also of the view that the various documents/evidences filed by assessee in support of its contentions require verification. The claims of the assessee has been rejected by the CIT(A) only on the ground that returned income is accepted and secondly no revised return is filed. We have observed that Hon ble Superior Courts have taken consistent view that appellate authorities have power to admit fresh claim, even if the same is not claimed through filing of revised return of income. Keeping in view entire factual matrix of the case and in the interest of fair play and justice, we remit the matter back to the file of the CIT(A) for fresh determination of the issue and to pass detailed/speaking order. Needless to say that learned CIT(A) has powers which are co-terminus with the powers of Assessing Officer. The ld. CIT(A) shall give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law.

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• 2021 (8) TMI 1083
  Exemption u/s 11 - registration u/s 12AA - HELD THAT:- Under section 12A, the provisions of sections 11 and 12 shall not apply in relation to the income of any trust or institution unless various conditions are fulfilled. Section 2(15) defines charitable purpose and the same includes relief in education and advancement of any other object of general public utility. In case the utility is carried out in the nature of trade, commerce, business, the proviso provides that the same will not be a charitable purpose. We are of the considered opinion, that the power of the Commissioner is to look into the objects of the Society and the genuineness of the same cannot be doubted when the basis is of non-supply of information. In such circumstances, it would be appropriate that the Commissioner undertakes the exercise afresh, on the basis of the application which has already been filed, keeping in view the material which can be produced by the assessee. The impugned order is set aside with a direction to the file of the CIT(E) to decide the application, filed under section 12AA, afresh with the following directions Consider the veracity of evidence claimed to be submitted before the then CIT. Verify the genuineness of the objectives of the assessee trust in the light of evidences prima facie relevant, for the year under consideration for the purpose of grant of registration u/s. 12AA of the Act. Assessee shall cooperate in the proceedings, before the CIT. All pleas available under the law shall remain so available to the assessee in the fresh proceedings before the Ld. CIT. Appeal is treated allowed for statistical purposes in the terms indicated as above.

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• 2021 (8) TMI 1082
  Deduction u/s 80GGA - Allegation of Bogus Donation - the name of the Trust appears at Serial No. 14 in the notification dated 11.08.2011 and the the Trust is eligible for accepting donation u/s 35AC - HELD THAT:- The assessee in support of donation made, has filed copy of Bank Statement and receipt issued by the Trust acknowledging the receipt of donation made by the assessee. The assessment for AY 2014-15 was re-opened in the case of assessee to disallow the benefit of deduction claimed by the assessee under section 80GGA of the Act in respect of donation made to Navjeevan Charitable Trust. A perusal of the assessment order reveals that the AO has merely raised a suspicion that the possibility of Navjeevan Charitable Trust accepting donation and returning the amount back to the donors after charging some commission cannot be rulled out. No positive evidence is brought on record by the Revenue to substantiate that the donation money had infact travelled back to the assessee in the form of cash. The disallowance has been made merely on suspicion. See JADSTONE TRADING PVT. LTD. VERSUS ITO 10 (2) (1) MUMBAI. [ 2019 (6) TMI 1574 - ITAT MUMBAI] - Decided in favour of assessee.

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• 2021 (8) TMI 1081
  Addition being interest on part amount receivable as corpus from developers - Addition on ground that the interest u/s 12.50% is due and since the assessee is following mercantile system of accounting, the said interest is chargeable to tax - HELD THAT:- CIT(A) has found that no interest was due during the impugned financial year. This is duly supported by ITAT order in assessee s own case [ 2017 (2) TMI 1497 - ITAT MUMBAI] referred by learned CIT(A). Hence, we do not find any infirmity in the order of learned CIT(A) in this issue. Deduction u/s.80P(2)(c) - HELD THAT:- Main reason for disallowing the claim here is by his mistaken invocation of section 80P(4) of the Act. This has been duly settled in The Mavilayi Service Cooperative Bank Ltd. [ 2021 (1) TMI 488 - SUPREME COURT] that in the case of Cooperative societies this section cannot be invoked as they cannot be held to be cooperative bank. When they have a lease from RBI to this effect. Examining the learned CIT(A) s order on the conspectus of aforesaid decisions, we do not find any infirmity in the order of learned CIT(A). Hence, we uphold the same. Disallowance of deduction u/s 80P(2)(d) made by the CPC Bangalore is beyond the scope of provisions of section 143(1) - Whether as per section 143(1)(a)(ii) of the Act an incorrect claim can be disallowed if such incorrect claim is apparent from any information in the return? - HELD THAT:- We do not find any infirmity in the order of learned CIT(A). We note that claim was due and proper. There was no reason that CPC would disallow the same. The date of filing of return being extended by CBDT, no adverse inference can be drawn that the assessee could not be eligible for deduction and claim which are allowable if return are filed within due date. The extension of due date makes the assessee eligible for all the claims, which are allowable when the return is filed within due date. Moreover, as rightly noted by learned CIT(A) in any case this was not something which could be denied under section 143(1) of the Act. Hence, we uphold the same.

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• 2021 (8) TMI 1080
  Nature of expenses - professional expenses - revenue or capital expenditure - CIT-A treated expenses claimed by the assessee as revenue expenditure instead of capital expenditure treated by the AO - HELD THAT:- CIT(A) has decided the said issue in favour of the assessee by following the ratio laid down in the case of CIT vs. SRF Ltd. [ 2015 (7) TMI 1029 - DELHI HIGH COURT] and case of Reliance Footprint Ltd. [ 2013 (12) TMI 161 - ITAT MUMBAI] and case of DSM Sinochem Pharmaceuticals India (P) Ltd.[ 2015 (12) TMI 1827 - ITAT CHANDIGARH ] . Since, the Ld. CIT(A) has decided the issue in accordance with the law laid down by decided judgments no infirmity in the order passed by the Ld. CIT(A). - Decided against revenue.

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• 2021 (8) TMI 1079
  Penalty u/s 271(1)(c) - disallowance to 12.5% of the alleged non-genuine purchases - HELD THAT:- Ultimately, the additions leading to the imposition of penalty were made on estimate basis - as evident from the assessment order, in response to the notice issued under section 133(6) of the Act, some of the selling dealers responded and furnished the details of sales made by them. Thus, the admitted factual position is, some of the dealers alleged to be non-genuine have confirmed the transactions with the assessee. Thus, from these facts, neither concealment of income nor furnishing of inaccurate particulars of income is proved. Therefore, in such scenario, no penalty under section 271(1)(c) of the Act could have been imposed. Maintainability of appeal on monetary limits - It is the case of the revenue that the appeals are protected under paragraph 10(e) of CBDT Circular No. 2/2018 dated 11.07.2018 - a careful reading of the relevant clause of the circular makes it clear that it is only applicable to the additions made based on information received from external sources like law enforcement agencies in the category of CBI, DRI etc. Presently, we dealing with proceeding for imposition of penalty u/s 271(1)(c) of the Act which is independent from the assessment proceedings. Therefore, it cannot be said that the penalty imposed is based on information received from external sources as contemplated under paragraph 10(e) of the foretasted circular. That being the case, the present appeals are not maintainable due to low tax effect as well. In view of the aforesaid, we uphold the order of learned Commissioner (Appeals) while dismissing the grounds raised.

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• 2021 (8) TMI 1078
  Amount payable under the DTVSV Act - Interest u/s 244A on the refund due to the Petitioner - whether Petitioner has a permanent establishment in India under certain provisions of the India-Netherlands double taxation avoidance agreement to the Assessing Officer? -whether the Appeal pending before the ITAT is a departmental Appeal or an assessee Appeal? - HELD THAT:- As following our decision in Writ Petition[ 2021 (7) TMI 336 - BOMBAY HIGH COURT] we have no doubt in arriving at the conclusion that pending Appeal is a Revenue Appeal and the first proviso to Section 3 of the DTVSV Act would become applicable and, accordingly, the amount payable by Petitioner would be 50% of the disputed tax. Whether an interest granted under Section 244A of the IT Act to Petitioner earlier can be recovered by the Respondents by adding the same to the amount of disputed tax otherwise payable by Petitioner under the DTVSV Act? - Once a declarant has filed a declaration to the Designated Authority in respect of the tax arrears, which declaration is in accordance with Section 4, then notwithstanding anything contained in the IT Act or any other law, the amount payable shall be as set out in the Table in Section 3. In the case of Petitioner, Section 3(a) read with the first proviso would be applicable which would be 50% of the amount of disputed tax. Disputed tax in accordance with the definition set forth above would mean the income tax including surcharge and cess, referred therein as the amount of tax payable by the Appellant, computed as contained in Clause (A) therein. It is also undisputed fact that interest under Section 244A has been received by Petitioner as that is the amount of interest which was levied on the refund granted to Petitioner, pursuant to order giving effect to the order of CIT(A) pending the proceedings before the ITAT. It is also not in dispute that ordinarily if the Appeal before the ITAT is decided against Petitioner, the said amount already paid to Petitioner, would be recovered in the order giving effect to the order of the ITAT, as interest or as an amount is due from Petitioner to the Department. Upon a query from the Court, as to how the Department would recover the interest paid under Section 244A, in the absence of the DTVSV Act, if the Tribunal order was decided against the assessee, it is being clarified on behalf of Revenue that such interest granted earlier under Section 244A of the IT Act would be recovered from the assessee by charging interest under Section 234D of the IT Act at the rate stated therein on the whole of the excess amount refunded and not separately, as the rate at which Section 234D interest would be levied is higher than the rate which is given to assessee under Section 244A From a conjoint reading of Section 2(1)(j)(A), Section 2(1)(o)(i), Section 3, Section 5 and Section 6 of the DTVSV Act, it is clear that there is no provision in the DTVSV Act, which authorises recovery of interest paid earlier by the Department under Section 244A as disputed tax, there being no statutory mandate for the Designated Authority to recover interest as disputed tax in the manner sought to be done in this case. Thus there is no provision in the DTVSV Act which authorises recovery of interest paid earlier by the Department under Section 244A of the IT Act by adding the same to the amount of disputed tax in the manner sought to be done, thereby making the addition to disputed tax in Form-3 bad in law.

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• Customs

• 2021 (8) TMI 1126
  Seizure of imported goods - Provisional release of goods and for re-testing - Validity of seizure memo being disputed on the basis of test reports - contract with Aureole Trading (U.A.E) for supply of product Naphtha - HELD THAT:- From reading of the affidavit-in-reply of the respondent, it appears that no parameters were suggested by the petitioner pertaining to the test of goods as Natural Gasoline Liquid. Even if the letters dated 16.02.2021 and 17.02.2021 which are pressed into service by Mr. Nankani are considered as creating a doubt about the Custom House Laboratory what is indicated is that though the lines of investigation was in context of whether the goods was Naphtha, the CRCL report dated 28.05.2021 (page 447 of the paperbook) in accordance with the parameters prescribed by the authorities in the test memo indicate unequivocally that the consignment is that of Natural Gasoline Liquid. What is evident therefore in context of the pleadings in the petition and the response of the Union of India is that this court in exercise of powers under Article 226 is called upon to decide the legality and validity of a seizure memo by weighing the pros and cons of the test reports on the quality of the product, reports divergent which are produced by the petitioner and the respondent - The Court in exercise of its extra-ordinary jurisdiction under Article 226 of the Constitution Of India cannot enter into a roving inquiry on the basis of conflicting test reports to decide the validity of a seizure memo. The exercise of seizure is an interim measure pending investigation. What is evident from the affidavit-in-reply filed by the investigating agency is that based on the statements recorded under Section 108 of the Customs Act, 1962, the investigation is pending. Reading of the provisions of the Customs Act, 1962 Sections 111 and 112 which provide for confiscation of goods post an investigation, the authorities are required to issue a show-cause notice under Section 124 of the Customs Act, 1962 before confiscation of goods. That stage has yet not reached. The entire issue of the seizure memo being disputed on the basis of test reports essentially being in the realm of disputed questions of facts we do not propose to exercise jurisdiction under Article 226 of the Constitution of India in favour of the petitioner and entertain the petition in context of the prayers made herein - Petition dismissed.

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• Corporate Laws

• 2021 (8) TMI 1110
  Sanction of scheme of amalgamation - Seeking holding, convening and dispensation with various meetings - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding, convening and dispensation with various meetings issued - directions regarding issuance of various notices issued. The scheme is approved - application allowed.

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• 2021 (8) TMI 1107
  Sanction of scheme of merger - section 232 read with section 230 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 - HELD THAT:- Various directions regarding holding, convening and dispensation of various meetings issued - directions regarding issuance of notices also issued. The scheme is approved - application allowed.

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• 2021 (8) TMI 1106
  Seeking to restore the name of the Company in the Register maintained by the Respondent/Roc - Section 252 of the Companies Act, 2013 - HELD THAT:- Taking into consideration the provisions of Section 252(1) (3) of the Companies Act, 2013 which vests this Tribunal with a discretion where the Company whose name has been struck off and such Company is able to demonstrate that there is a running business as on the date when the name was struck off and also keeping in consideration that it is just to do so can restore the name of the Company in the register and in the interest of all the stakeholders including members of the Company, its employees as well as the revenue and the Applicant itself who seeks restoration of the name of the Company in the register being maintained by Roc. The name of company is restored - application allowed.

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• Insolvency & Bankruptcy

• 2021 (8) TMI 1109
  Liquidation of Corporate Debtor - Section 33 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Despite all possible steps as required under the Code taken during the CIRP, the CoC did not receive any viable resolution plan/proposal for revival of the Company. The CoC in its wisdom has resolved in favour of the liquidation of the Company. This Authority has no reason before it to take a contrary view in terms of Section 33(1) (a) of the Code. Therefore, there are no option than to pass an order for liquidation of the Company in the manner laid down in Chapter-Ill of the Code. Application allowed.

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• 2021 (8) TMI 1108
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Financial Debt - existence of debt and dispute or not - HELD THAT:- The Corporate Debtor has not disputed the fact that the Financial Creditor has invested in the Corporate Debtor in the form of Non-convertible Debentures (NCDs) in multiple tranches to the tune of Rs. 31,75,00,000/-. Further, the amount raised pursuant to the debentures would qualify to be a financial debt as per Section 5(8)(c) of IBC, 2016. It is seen from the records, that the Respondent/Corporate Debtor has preferred only to file the written submission and not reply to the Application filed by the Financial Creditors. From the written submission submitted by the Corporate Debtor it is seen that they not disputed the debt nor default. In the circumstances there is a clear evidence in the case of the existence of financial debt and the default of such financial debt which is payable by the Corporate Debtor to the Financial Creditor. Under the said circumstances, this Tribunal is left with no other option but to proceed with the present case and initiate the Corporate Insolvency Resolution Process in relation to the Corporate Debtor. This Application filed by the Financial Creditor is required to be admitted under Section 7(5) of the IBC, 2016 - The application is admitted - moratorium declared.

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• 2021 (8) TMI 1105
  Scheme of Amalgamation - seeking directions regarding holding convening and dispensation of various meetings - first stage of the proceedings under Section 230(1) read with Section 232(1) of the Companies Act, 2013 - HELD THAT:- Various directions with regard to holding, convening and dispensation with various meetings issued - directions with regard to issuance of notices also issued. The scheme is approved - application allowed.

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• Service Tax

• 2021 (8) TMI 1119
  Recovery of excess amount collected as service tax - Recoveries to be made u/s 73 or 73A - document for computation of demand of service tax - Form 26-AS or Balance Sheet? - extended period of limitation - penalty - Whether the excess recovery of the service tax can be recovered under Section 73 of the Finance Act, 1994 or Section 73-A of the Finance Act, 1994? - HELD THAT:- If any amount is collected more than the actuals, the said amount is recoverable from the assessee under Section 73-A of the Act. Although show cause notice invoked the provisions of Section 73-A of the Act, but the adjudicating authority has not invoked the provisions of Section 73-A of the Act and the said findings of the adjudicating authority have not been challenged by either of the side before any appellate authority - the confirmation of the excess amount recovered by the appellant cannot be demanded under Section 73 of the Act. Therefore, the demand confirmed under Section 73 of the Act excess recoveries made by the appellant on account of service tax cannot be demanded under Section 73 of the Act. Which figures are to be taken for computation of demand of service tax, (a) Form 26-AS or (b) Balance Sheet? - HELD THAT:- Balance sheets figures records all the transactions done by the appellant by way of issuing invoices and receipts amounts thereof and the said Balance sheets have been certified by the Chartered Accountant. In that circumstance, figures of the balance sheets are more authenticate to compute the service tax recoverable from the appellant. But the adjudicating authority chose the figures whichever is higher comfortable to him/her which is not correct. As balance sheets figures are certified by the Chartered Accountant and the same are more authentic figures, therefore, the service tax demand is to be computed on the basis of balance sheets figures - impugned order qua computation on the basis of balance sheets needs examination at the end of the adjudicating authority. Whether extended period of limitation is invokable in the facts and circumstances of the case or not? - HELD THAT:- In this case, extended period of limitation is not invokable as it is a case of availment of benefit of Notification No. 30/2012-ST dt. 20.06.2012 and computation of taxable turnover and no fact has been suppressed by the appellant from the respondent. The activity as well as payment of service tax were in the knowledge of the department, therefore, in the absence of any malafides on the part of the appellant, extended period of limitation is not invokable - any demand pertaining to extended period of limitation is set aside. Whether the penalty can be imposed on the appellant or not? - HELD THAT:- As extended period of limitation is not invokable, therefore, no penalty is imposable on the appellant. Appeal disposed off.

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• 2021 (8) TMI 1118
  Maintainability of appeal - appeal dismissed for the reason that it was filed beyond the statutory period contemplated - section 85(3A) of the Finance Act, 1994 - HELD THAT:- In the present case, admittedly the order of the adjudicating authority was received by the appellant on March 15, 2015 but the appeal was presented before the Commissioner (Appeals) on July 02, 2015. It was clearly not presented within the period of two months nor within the extended period of one month. The Commissioner (Appeals) dismissed the appeal after placing reliance on the decision of Supreme Court in SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT] . The provisions of section 35 of the Central Excise Act, 1944 are pari materia with section 85(3A) of the Finance Act. The Supreme Court in Singh Enterprises, held that the period upto which the prayer for condonation can be accepted is limited by the proviso to sub-section (1) of section 35 of the Central Excise Act and the position is crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the period of thirty days after the expiry period of sixty days. In other words, the appellate authority can entertain the appeal by condoning the delay only upto 30 days beyond the normal period for preferring the appeal, which is 60 days. Appeal dismissed.

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• 2021 (8) TMI 1117
  Levy of service tax - liability on activity of sub-contractor when main contractor has discharged the service tax liability - suppression of facts or not - extended period of limitation - penalty - HELD THAT:- It is seen that the amount received from the clients have been subjected to Service Tax at the hands of the main contractor. However, since the appellant, as a sub-contractor, has provided services to the main contractor, is liable to discharge Service Tax on the consideration received from the main contractor namely, M/s. ACL - This issue is no longer res integra and is settled by the decision of the Larger Bench of the Tribunal in the case of COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. [ 2019 (6) TMI 518 - CESTAT NEW DELHI] where it was held that A sub-contractor would be liable to pay Service Tax even if the main contractor has discharged Service Tax liability on the activity undertaken by the sub-contractor in pursuance of the contract. Thus, the appellant / sub-contractor is liable to pay the Service Tax even if the main contractor has discharged the liability. The issue on merits is found against the assessee and in favour of the Department. Extended period of limitation - penalty - HELD THAT:- There is no clear allegation that the appellants have wilfully suppressed facts with the intention to evade payment of Service Tax. In the present case, the main contractor / M/s. ACL collected the full consideration including Service Tax from the clients, which is clear from the records. Appellants from the very beginning have raised the contention that they were instructed by M/s. ACL that they are not required to pay the Service Tax - there are no factual basis for invoking the extended period. Appeal fails on merits - However, we hold that the demand for the extended period of limitation, if any, cannot sustain and the impugned order to this extent is set aside, without disturbing any demand that falls within the normal period. Decided partly in favor of assessee.

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• 2021 (8) TMI 1114
  Levy of service tax - services provided to Mandi Samiti for construction services in the market yard - commercial in nature - demand of penalty - HELD THAT:- Undisputedly the appellant have rendered construction service to the Mandi Samiti, which is a statuary authority. The services provided to Mandi Samiti for construction services in the market yard are not commercial in nature as held by a coordinated Bench of this Tribunal in M/S. KRISHI UPAJ MANDI SAMITI AND OTHERS VERSUS CCE ST, JAIPUR I JAIPUR II [ 2017 (5) TMI 1465 - CESTAT NEW DELHI] wherein it is held herein with the introduction of Negative List Regime of Taxation w.e.f. from 1st July, 2012, the Mandi Parishad is excluded from tax liability. This Tribunal held that Mandi Samiti or Board are not liable to Service Tax on renting of immovable property used for storage of agricultural produce in the market area. Time Limitation - penalty - HELD THAT:- The Impugned Order is not sustainable and was set-aside. It was further held that the post-harvest strategy of storage marketing etc. being done by the Mandi Samiti is exempted under serial no. 14 of Notification No. 12/2012-ST. Appeal allowed.

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• 2021 (8) TMI 1113
  Refund claim - Amount deposited during investigation - no SCN issued to the appellant either for appropriation or for rejection of the amount - HELD THAT:- It is admitted fact that no show cause notice was issued to the appellant for appropriation of the amount nor for rejection of the refund claim. Therefore, the order of rejection of refund claim is bad in law and against the provisions of Finance Act as well as Central Excise Act,1944 - the amount paid during the course of investigation is only an amount of deposit, the same cannot be formed part of service tax. Therefore, rejection of refund claim by the respondent is without authority of law and the same is refundable to the appellant. The appellant is entitled for refund claim - Appeal allowed - decided in favor of appellant.

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• 2021 (8) TMI 1104
  Refund of excess amount of service tax paid - rejection on the ground of time limitation - relevant date - refund was proposed to be rejected as it has not been filed within one year - HELD THAT:- There is no denial of the fact that appellant had made payment for his service tax liability for the quarter ending April, 2017 to June, 2017 in April itself.Certain amount i.e. Rs. 2,85.501/- was paid to be adjusted towards his total liability to be incurred during this quarter. There is also no denial that the entire liability of the appellant for this quarter was for Rs. 1,41,714/- which stand adjusted by the Department as the Service Tax being paid by the appellant for the period of April, 2017 to June, 2017 but out of the payment made from 11.4.2017 to 24.4.2017. Admittedly, Rs. 1,51,404/- remained the balance to be adjusted for the service tax liability of appellant as may occur after quarter ending on 30.06.2017. These admitted facts are sufficient to hold that the amount in question was not at all tax liability of the appellant. Since post July 01, 2017, the applicability of this Rule was no more available to the appellant, the excess amount already got deposited by the appellant at the time when Service Tax liability for the said quarter had not even accrued towards the appellant, but remain unutilised for any tax liability till 30.06.2017, the amount cannot qualify for being called tax. The said balance was appellant s own money and Department cannot be allowed to get unjustly enriched out of said money - the learned Commissioner (Appeals) has erred while invoking bar of limitation of one year as mentioned under section 11 B for the amount which was not duty or tax. Learned Commissioner (Appeals) is also held to have erred while invoking the clause (f) of the definition of relevant date as given under section 11B. Since the amount in question was not duty, date of payment of duty clause cannot apply and date of impugned deposit cannot be taken as relevant date - appeal allowed - decided in favor of appellant.

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• Central Excise

• 2021 (8) TMI 1116
  Wrongful availment of CENVAT Credit - outward freight - sale on FOR basis - place of removal - extended period of limitation - HELD THAT:- As far as interpretation under the Central Excise laws is concerned, the transfer of possession with title of goods by one person to another is the crux of the sale transaction. Therefore, until and unless the goods are delivered to the buyer, and the possession with title of goods is transferred unto the buyer, the sale does not take place and it cannot be said that goods have been sold. Though it may not always be the physical delivery and physical possession. Present is the case of F.O.R. destination sales. It therefore becomes important to understand its meaning. Section 19 of the Sale of Goods Act, 1930 explains as to when property in goods passes. F.O.R. destination means the seller retains the risk of loss until the goods reach the buyer. Historically this term was used only to refer goods transported by ships to U.K. but it has since been expanded to include all types of transportations. F.O.R. destination as different from FOB origin means that the seller retains the risk of goods until the goods reach the buyer - The possession in the goods remain with the seller during the transit, and the possession is transferred to the purchaser only when the goods reach him. Since the buyer had a right to reject the goods after receiving them at his place and he was supposed to make the payment at his place, that too after inspecting the goods also. Also since the appellant had a right to sell the goods to someone else, before the goods reach to the buyer at his destination, it become ample clear that the control and possession of propriety in the goods remained with the appellant till they reach the place of his buyer. Hence when appellant engaged the transporter, he instead of his buyer becomes the service recipient of freight / transport service, and the same, becomes his input. The circular dated 08.06.2018 also cannot be made retrospectively applicable to the period in question (April 2015 to June, 2017). At the relevant time, circular No. 988/12/2014 CX dated 20.10.2014 / Circular No. 97/8/2007-CX dated 23.8.2007 were applicable. It has been time and again been settled by the Hon ble Supreme Court that the beneficial circular cannot be retrospectively withdrawn. Consequently benefit of the said circular shall continue to be available to the appellant. Extended period of limitation - HELD THAT:- It is apparent on record that credit has been shown in the ER-1 returns filed by the appellant from time to time. Neither suppression nor misrepresentation of facts can be alleged against the appellant. The alleged suppression of facts on part of the appellant that too with an intent to evade payment of duty is therefore not sustainable. It is accordingly held that the Department was not entitled to invoke the extended period of limitation. Appeal allowed - decided in favor of appellant.

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• 2021 (8) TMI 1115
  Recovery of erroneous Refund of interest on delayed payment of differential duty - price variation clause - Rejection on the ground that since the appellant was liable to pay interest on the price variation amount, he is not liable to get the refund thereof - HELD THAT:- The Hon ble Apex Court in the case of M/S. STEEL AUTHORITY OF INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR [ 2019 (5) TMI 657 - SUPREME COURT] has adjudicated the same issue i.e. whether the interest is payable on differential excise duty with retrospective effect that becomes payable on the basis of escalation clause, where it was held that The fact that it is known, later cannot detract from the fact, that the later discovered price would not be value at the time of removal. Most significantly, section 11A and section 11AB as it stood at the relevant time did not provide read with the rules any other point of time when the amount of duty could be said to be payable and so equally the interest. The appellant was liable to pay the interest on subsequent price variation with effect from the date of removal of the goods involved - the refund of the amount of interest already paid by the appellant was erroneous. Appeal dismissed.

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• 2021 (8) TMI 1112
  CENVAT Credit - input services - commission paid to the various financers for selling their vehicles - Rule 2 (l) of the Cenvat Credit Rules, 2004 - HELD THAT:- The appellant is paying commission to the financers for selling their vehicles to various prospective buyers on the vehicles manufactured by the appellant. If these financers do not finance the vehicles manufactured by the appellant, the vehicles of the appellant are not able to be sold in the open market freely. Therefore, these financers are indirectly providing the services of sales promotion to the appellant. Sales promotion is inclusive part of the definition and the same can be availed beyond the place of removal as there is no bar on the same in the definition itself. Thus, on commission paid to various financers for arranging the prospective buyers to the appellant for sale of vehicles, the appellant is entitled to take cenvat credit as sale promotion is an input service - appeal allowed - decided in favor of appellant.

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• 2021 (8) TMI 1111
  Maintainability of appeal - time limitation - statutory time limit prescribed for filing the appeal was expired - HELD THAT:- The appeal was not preferred by the appellant before the office of Learned Commissioner (Appeals) within the stipulated time frame and also within the condonable period prescribed in the Statute - Since the Appellate Authority is a creature under the statute, the statutory mandates are strictly required to be complied by him. Since the appeal was dismissed by him on the ground of limitation, there are no infirmity in the said order passed by the Commissioner (Appeals). Appeal dismissed.

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• CST, VAT & Sales Tax

• 2021 (8) TMI 1125
  Initiation of action for recovery of the dues - SARFAESI Act - issue of priority over the charge - HELD THAT:- The petitioner in fact claims that they hold priority over the charge as they are secured creditors. The 1st respondent/revenue equally claims the priority over all other charges as it is arrears of tax and State revenue. Further, the 1st respondent-Commercial Tax department claims that actions for recovery of arrears of tax was initiated long back and during the pendency of the proceedings under the taxation law, the bank has dealt with the property and therefore, they cannot claim any priority over the property, as far as the tax arrears are concerned. Such disputed fact cannot be adjudicated by the High Court in a writ petition under Article 226 of the Constitution of India. Which are all the proceedings initiated at the first instance and which proceedings has to be construed as an initial proceedings, are the disputed facts which are all to be adjudicated by scrutinising the original documents and evidences made available. An enquiry has to be conducted in this regard. The TNVAT Act contemplates appeals to the authority. The appellate authority under the said Act are exercising the power of the Quasi judicial authorities. Therefore, they have to adjudicate the issue, by affording opportunity to all the parties concerned and take a decision in respect of such claims. As far as the tax laws are concerned, both the assessee and the revenue are preferring appeal before the appellate authorities and before the tribunal - Similarly, the bank being aggrieved from and out of the action initiated by the 1st respondent, Commercial Tax department, is entitled to file an appeal before the appellate authority for adjudication of complete facts and circumstances. The appellate authorities are the final fact finding authority. Petition disposed off.

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• 2021 (8) TMI 1120
  Validity of assessment order - Input tax credit - alleged mis-match between returns and the returns filed by the sellers - HELD THAT:- This Court is inclined to pass the order as in the case of M/S. CHAKARAVARTHY READYMADES VERSUS THE STATE TAX OFFICER, VANDAVASI, TIRUVANNAMALAI DISTRICT [ 2019 (2) TMI 1447 - MADRAS HIGH COURT] where it was held that the matters have been remanded for fresh consideration the petitioners/dealers are not entitled to raise a plea of limitation, when fresh show cause notices are issued and they are directed to submit their explanation to enable the assessing officers to adjudicate their case. The impugned orders of assessment are set aside - Petition allowed.

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• 2021 (8) TMI 1077
  Validity of Encumbrance certificate - priority over the charge as secured creditors - arrears of tax and State revenue - appeal before the appellate authorities and before the tribunal - HELD THAT:- The petitioner in fact claims that they hold priority over the charge as they are secured creditors. The 1 st respondent/revenue equally claims the priority over all other charges as it is arrears of tax and State revenue. Further, the 1 st respondent-Commercial Tax department claims that actions for recovery of arrears of tax was initiated long back and during the pendency of the proceedings under the taxation law, the bank has dealt with the property and therefore, they cannot claim any priority over the property, as far as the tax arrears are concerned. Such disputed fact cannot be adjudicated by the High Court in a writ petition under Article 226 of the Constitution of India. Which are all the proceedings initiated at the first instance and which proceedings has to be construed as an initial proceedings, are the disputed facts which are all to be adjudicated by scrutinising the original documents and evidences made available. An enquiry has to be conducted in this regard. The TNVAT Act contemplates appeals to the authority. The appellate authority under the said Act are exercising the power of the Quasi judicial authorities. Therefore, they have to adjudicate the issue, by affording opportunity to all the parties concerned and take a decision in respect of such claims. As far as the tax laws are concerned, both the assessee and the revenue are preferring appeal before the appellate authorities and before the tribunal. Similarly, the bank being aggrieved from and out of the action initiated by the 1 st respondent, Commercial Tax department, is entitled to file an appeal before the appellate authority for adjudication of complete facts and circumstances. The appellate authorities are the final fact finding authority - Petition dismissed.

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• Indian Laws

• 2021 (8) TMI 1129
  As per J. INDIRA BANERJI] Substitution of a legally valid irrevocable Bank Guarantee - Scheduled Bank - whether the Division Bench, after having held that the order impugned before it was appealable, should have dismissed the appeal and allowed the direction on the Appellant to substitute the Bank Guarantee of ICBC with a fresh bank guarantee of a Scheduled Indian Bank, to stand? HELD THAT:- As a Scheduled Bank and a banking company within the meaning of the Banking Regulation Act, ICBC is governed by the regulatory provisions of the RBI Act and the Banking Regulation Act and the Rules, Regulations, Orders, Notifications etc. issued thereunder. The circulars and directives of the Reserve Bank of India with regard to Bank Guarantees/ Demand Guarantees are binding on ICBC - The RBI Act only defines Scheduled Banks which includes Scheduled Foreign Banks operating in India. The RBI Act or the Second Schedule thereto does not segregate Scheduled Indian Banks. There is no definition of Scheduled Indian Bank in the RBI Act. The regulatory provisions of the RBI Act apply equally to all scheduled banks. However, since there is a list of Scheduled Foreign Banks in India categorized separately in the Second Schedule by Gazette Notifications, it may be presumed that all other banks listed in the Second Schedule in the various categories except the category of Scheduled Foreign Banks, that is, Scheduled Public Sector Banks, Scheduled Private Sector Banks, Scheduled Small Finance Banks, Scheduled Payments Banks, Scheduled Regional Rural Banks are all Scheduled Indian Banks, even though Scheduled Indian Banks do not constitute any distinct category in the Second Schedule to the RBI Act. Since ICBC has its principal branch registered in the People s Republic of China and is listed in the category of Scheduled Foreign Banks in India, the High Court made a distinction between ICBC and a Scheduled Indian Bank . In the absence of any adverse material against ICBC and in the light of a plethora of reports showing its financial soundness, the High Court erred in directing the Appellant to replace the Bank Guarantee of ICBC, already furnished pursuant to an order of Court passed on 12.02.2019, with another Bank Guarantee, oblivious of the practical realities in the arena of banking activities, specially the difficulties in obtaining a Bank Guarantee from banks with which the applicant has no transaction and ignoring the cost already incurred by the Appellant by way of bank charges for obtaining the guarantee. All that is required for invocation of the Bank Guarantee is an order of the High Court in the proceedings relating to the Arbitral Award. The statement that the guarantee is subject to the URDG does not dilute the guarantee or make it conditional - Appeal allowed. As per V. Ramasubramanian, J. These special leave petitions do not deserve to be entertained under Article 136 of the Constitution of India in view of the fact (i) that the very same Judge who passed the first Order dated 12.02.2019, clarified the same by his subsequent Order dated 09.04.2019; (ii) that the same learned Judge dismissed on 16.05.2019, the petition to recall the Order dated 09.04.2019; (iii) that the Commercial Division Bench of the High Court dismissed the appeal arising out of the Order dated 16.05.2019; and (iv) that the Commercial Division Bench again reiterated its orders, by dismissing the review petition. The question whether there exists statutorily, a distinction between a Scheduled Indian Bank and a Scheduled Bank located in India does not arise for consideration in this case, as the dispute primarily revolves around what was offered in Court by one of the parties, what was accepted in Court, and what was recorded in the Order and clarified later. If without any offer from the petitioner, an adjudication had been made by the Court directing the petitioner to furnish bank guarantee of a particular type of bank and a dispute had been raised thereafter, it is only then that a question of law as to the status of such a bank with reference to the statutory provisions, would have arisen - SLP dismissed.

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• 2021 (8) TMI 1128
  Inhuman condition of quarantine centres and for providing better treatment to corona positive - HELD THAT:- It is a normal practice, which is also desirable, that such matters of public importance are dealt with by the Bench presided over by the Chief Justice, but since the constitution of Benches is the prerogative of the Chief Justice, it would be for the Chief Justice of the High Court to consider such aspect and pass appropriate orders. Further while again appreciating the efforts of the judges of the High Court in looking to the matter in depth while passing orders, we are of the opinion that the High Court should normally consider the possibility of the implementation of the directions given by it, and such directions which are incapable of being implemented should be avoided. The doctrine of impossibility, would be equally applicable to Court orders as well. Considering the totality of the facts and circumstances, the impugned order dated 17.05.2021 is stayed. However, we make it clear that further proceedings before the High Court are not being stayed - this matter be now listed on 14.07.2021.

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