TMI Tax Updates - e-Newsletter
August 1, 2020
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
The class of registered person required to issue e-invoice - SEZ units excluded - Threshold limit of turnover enhanced from 100 crores to 500 crores.
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GST:
Refund of ITC in case of inverted duty structure - Not allowing refund of unutilized input tax credit relatable to input services - Explanation (a) to Rule 89(5) which denies the refund of “unutilised input tax” paid on “input services” as part of “input tax credit” accumulated on account of inverted duty structure is ultra vires the provision of Section 54(3) of the CGST Act, 2017. - HC
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Income Tax:
Maintainability of appeal filed by the erstwhile company before amalgamation - without considering the order of the High Court in the matter of amalgamation and the automatic transfer of litigations of transferor companies into transferee company, the Tribunal has simply rejected the appeal, on the ground that the appeal was filed in the name of non-existing person. We do not agree with the said finding of the Tribunal as the same is not legally sustainable.- HC
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Income Tax:
Disallowance of contrived loss - only ground for disallowing such loss was that there was no proof of delivery of shares prior to the date of search - Disallowance in block assessment proceedings - it cannot be said that the Tribunal has committed any error in holding that the assessee is entitled to claim the contrived losses in the total income for the respective year by the respective assessee. - HC
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Income Tax:
Nature of expenses - river diversion expense and HT line shifting expense - It became necessary for the appellant to shift the same for mining operation; similarly river diversion was also necessary to undertake the mining activities - Allowed as revenue expenditure - AT
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Income Tax:
Capital gain - tenancy right available with the assessee or not? - the amount received for not interfering possessions - the parties of the family settlement that the assessee and her relatives were in possession of flat. - relinquishment of rights - since there was no tenancy right, amount is not taxable. - AT
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Income Tax:
Penalty u/s 271AAB - Addition u/s 69B - income shown suo-motto - additional income brought to tax by the Assessing Officer - none of the conditions for levy of penalty at the lower rate of 10%, under clause (a) of Section 271AAB (1), are satisfied. Accordingly, it is held that in respect of such additional income, penalty is leviable at 30% under clause (a) of Section 271AAB(1). - AT
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Income Tax:
Non-grant of TCS credit - Rectification of mistak u/s 154 - Amount of TCS was not reflected (shown) in the name of assessee, but corresponding income declared by the assessee - TCS credit to be allowed, subject to verification of facts - AT
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Income Tax:
Correct year of assessment - Interest income was taxed in the earlier assessment year - Assessee cannot be penalized only for the reason that he has not filed revised return of income for correcting the apparent mistake of double taxation of the income. - AT
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Income Tax:
Rectification u/s 254 - Sale of land - land in question were sold by the assessee in the capacity of power of attorney holder and AO has assessed the income in the hand of the assessee who sold the land - earlier, the tribunal has deleted the addition - The summons issued by the AO if served upon the land owners then non appearance of the land owners would not discharge the AO from conducting further enquiry. Assessee cannot be blamed for non appearance of the land owners in response to the summons if any issued by the AO. - AT
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Income Tax:
Discount on employee stock ownership plan (ESOP) - Capital expenditure or revenue expenditure - the deduction is to be allowed for the difference between the exercise price of the option and the market price at the time of exercise of the option. - AT
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Customs:
Classification of imported goods - Parts of seats of motor vehicle (parts of part) - import of child parts - It is undisputed that child parts used for making parts which are subsequently used in the complete assembly of vehicle seat and the vehicle seat has been classified under 9401, then how part of seat can be classified under 8708. - AT
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Customs:
Principles of Natural Justice - The appellant should be allowed cross examination, the witnesses except the SIO. The SIO is part of the investigation and the Show Cause Notice has relied upon various statements, letters and opinions. - The cross of SIO is unwarranted. - AT
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Customs:
Condonation of delay of 110 days in filing appeal - the pendency of said writ-petition does not seem to extend any benefit to the present applicant who is none but the importer and the proposed allegation of mis-declaration on his part that too to the extent of importing 43020 pieces of memory card serve 4 GB and 8 GB quantity under the garb of three battery UPS, is not available to him. - AT
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Indian Laws:
PIL - welfare of advocates - non-inclusion of advocates in the definition of the word “professionals” under the MSME Act - We are not inclined to entertain this petition as a Public Interest Litigation - advocates are capable enough to approach the Court, if aggrieved - HC
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Service Tax:
Taxability - principles of mutuality - services provided to group / promoter companies - The only basis for providing of services by the appellant is on cost sharing basis as per the norms or formula laid down by the members of the appellant company. Therefore, SCN is not maintainable both on the principle of mutuality and on the fact of lack of consideration for such services alleged to have been rendered - AT
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Service Tax:
Extended period of limitation - Original Authority has accepted the plea of the appellant that the details of the transactions were recorded by the appellant in their specified records. Further, he was held that the appellants were entitled to reduced penalty. This indicates that there were no elements for invoking extended period of limitation - SCN quashed. - AT
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Central Excise:
Reversal of CENVAT Credit - There is no requirement under Rule 6(3)(i) and Rule 6(3A) of the Cenvat Credit Rules that the option had to be exercised on the first day of the financial year or the first month thereof. - there has been due compliance by the appellant of the requirements under rule 6(3) and (3A), including the procedure laid down therein and the appellant has legally and validly availed the option in terms of Rule 6(3)(ii). - AT
Articles
Notifications
Customs-
63/2020 - dated
30-7-2020
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Cus (NT)
Amendment in Notification No. 92/2017-Customs (N.T.), dated the 28th September, 2017
DGFT-
22/2015-2020 - dated
30-7-2020
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FTP
Amendment in import policy of items under Exim Code 8528 72 of Chapter 85 of ITC (HS), 2017, Schedule - I (Import Policy)
GST-
61/2020 - dated
30-7-2020
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CGST
Seeks to amendment in Notification No. 13/2020 – Central Tax, dated the 21st March, 2020
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60/2020 - dated
30-7-2020
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CGST
Central Goods and Services Tax (Ninth Amendment) Rules, 2020.
GST - States-
38/1/2017-Fin(R&C)(163)/533 - dated
23-7-2020
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Goa SGST
Goa Goods and Services Tax (Eighth Amendment) Rules, 2020.
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38/1/2017-Fin(R&C)(162)/532 - dated
23-7-2020
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Goa SGST
Amendment in Notification No. 38/1/2017-Fin(R&C)(87), dated 31st December, 2018
Income Tax-
57/2020 - dated
30-7-2020
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IT
U/s 138(1) of IT Act 1961 - Central Government specifies Director General / Secretary, Competition Commission of India
VAT - Delhi-
F. 3(20)/Fin.(Rev-I)/2020-21/DS-IV/39 - dated
30-7-2020
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DVAT
Amendment in Fourth schedule of Delhi Value Added Tax, 2004
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2020 (7) TMI 726
Refund of ITC in case of inverted duty structure - Not allowing refund of unutilized input tax credit relatable to input services - Validity of amended Rule 89(5) of the CGST Rule, 2017 - Circular no.79/53/2018-GST dated 31.12.2018 - HELD THAT:- Rule 89(5) and more particularly explanation (a) thereof, provides that Net Input Tax Credit shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rule (4A) or (4B) or both. Therefore, the grievance of the petitioner is that only the inputs is referred to in explanation (a) to sub-rule 5 of Rule 89 of CGST Rules 2017 and therefore, input tax credit on input services are not eligible for calculation of the amount of refund by applying Rule 89(5). Thus, it results into violation of provision of sub-section 3 of Section 54 of the CGST Act, 2017, which entitles any registered person to claim refund of any unutilised input tax credit. Sub-clause (ii) of the proviso to sub-section 3 of Section 54 negates the claim of refund of unutilized input tax credit other than where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies, except supplies of goods or services or both as may be notified by the Government on the recommendations of the GST Council. The provision of section 7 provides that scope of supply includes all forms of supply of goods or services. Therefore, for the purpose of calculation of refund of accumulated input tax credit of input services and capital goods arising on account of inverted duty structure is not included into inputs which is explained by the Circular No. 79/53/2018-GST dated 31.12.2018, wherein it is stated that the intent of law is not to allow refund of tax paid on input services as part of unutilised input tax credit . Therefore, it is required to consider whether the refund of unutilised input tax credit arising due to inverted duty structure can be denied or not. Section 66 levies service tax at a particular rate on the value of taxable services. Section 67 (1) makes the provisions of the section subject to the provisions of Chapter V, which includes Section 66. This is a clear mandate that the value of taxable services for charging service tax has to be in consonance with Section 66 which levies a tax only on the taxable service and nothing else. There is thus in built mechanism to ensure that only the taxable service shall be evaluated under the provisions of 67 - Rule 5 (1) of the Rules runs counter and is repugnant to Sections 66 and 67 of the Act and to that extent it is ultra vires. It purports to tax not what is due from the service provider under the charging Section, but it seeks to extract something more from him by including in the valuation of the taxable service the other expenditure and costs which are incurred by the service provider in the course of providing taxable service . What is brought to charge under the relevant Sections is only the consideration for the taxable service. By including the expenditure and costs, Rule 5(1) goes far beyond the charging provisions and cannot be upheld. By prescribing the formula in Sub-rule 5 of Rule 89 of the CGGST Rules,2017 to exclude refund of tax paid on input service as part of the refund of unutilised input tax credit is contrary to the provisions of Sub-section 3 of Section 54 of the CGST Act,2017 which provides for claim of refund of any unutilised input tax credit - as per provision of sub-section 3 of Section 54 of the CGST Act,2017, the legislature has provided that registered person may claim refund of any unutilised input tax , therefore, by way of Rule 89(5)of the CGST Rules,2017, such claim of the refund cannot be restricted only to input excluding the input services from the purview of Input tax credit . Moreover, clause (ii) of proviso to Sub-section 3 of Section 54 also refers to both supply of goods or services and not only supply of goods as per amended Rule 89(5) of the CGST, Rules 2017. In view of the above analysis of the provisions of the Act and Rules keeping in mind scheme and object of the CGST Act, the intent of the Government by framing the Rule restricting the statutory provision cannot be the intent of law as interpreted in the Circular No.79/53/2018GST dated 31.12.2018 to deny the registered person refund of tax paid on input services as part of refund of unutilised input tax credit. Explanation (a) to Rule 89(5) which denies the refund of unutilised input tax paid on input services as part of input tax credit accumulated on account of inverted duty structure is ultra vires the provision of Section 54(3) of the CGST Act, 2017. Explanation (a) to the Rule 89(5) is read down to the extent that Explanation (a) which defines Net Input Tax Credit means input tax credit only. The said explanation (a) of Rule 89(5) of the CGST Rules is held to be contrary to the provisions of Section 54(3) of the CGST Act. In fact the Net ITC should mean input tax credit availed on inputs and input services as defined under the Act - respondents are therefore, directed to allow the claim of the refund made by the petitioners considering the unutilised input tax credit of input services as part of the net input tax credit (Net ITC) for the purpose of calculation of the refund of the claim as per Rule 89(5) of the CGST Rules,2017 for claiming refund under Sub-section 3 of Section 54 CGST Act,2017. Petition allowed.
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Income Tax
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2020 (7) TMI 725
Maintainability of appeal - memo of appeal was filed in the name of the company which lost its identity after its merger - scheme duly sanctioned by the High Court under the provisions of the Companies Act - HELD THAT:- By virtue of scheme of amalgamation all the existing and the future litigation of the transferor company will be transferred and continued in the name of transferee company viz., M/s.Accenture Services Private Limited with effect from 1st April 2012. This M/s. Accenture Services Private Limited has subsequently merged with the M/s. Accenture Solutions Private Limited. By virtue of this merger, all the litigations pursued against or by both M/s. Zenta Knowledge Services Private Limited and M/s.Accenture Services Private Limited shall automatically be transferred and will be continued in the name of transferee company viz., M/s. Accenture Solutions Private Limited. When such being the position, without considering the order of the High Court in the matter of amalgamation and the automatic transfer of litigations of transferor companies into transferee company, the Tribunal has simply rejected the appeal, on the ground that the appeal was filed in the name of non-existing person. We do not agree with the said finding of the Tribunal as the same is not legally sustainable. Therefore, we are inclined to set aside the order of the Tribunal dated 14 September 2016, with request to the Tribunal to decide the appeals of the assessee (M/s.Accenture Solutions Pvt. Ltd.,) and the Revenue and the cross appeal of the assessee, on merits and in accordance with law.
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2020 (7) TMI 724
Withholding of grant of refund - order under Section 143 (3) has been passed and the scrutiny assessment has concluded - HELD THAT:- This Court in similar circumstances in M/S. Fis Payment Solutions Services India Pvt. Ltd [ 2020 (3) TMI 1243 - DELHI HIGH COURT] has observed that withholding of refund prima facie appears to be without any justification. We direct the respondents to refund the amounts for the assessment year along with interest as applicable, to the petitioner within six weeks from today. In case the respondents have any valid justification for withholding the refund, or any part thereof, they shall file their counter affidavits positively within the same period clearly stating as to why the refund/partial refund is not due. No further time shall be granted for the said purpose.
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2020 (7) TMI 723
Agricultural income - Whether Tribunal was right in presuming the assessee earned agricultural income merely relying on Chitta and Adangal extracts issued by VAO? - HELD THAT:- Tax case appeals are dismissed on account of the low tax effect. The substantial questions of law framed are left open. In the event the tax effect in the respective cases is above the threshold limit fixed in the said circular, liberty is granted to the Revenue to make a mention to this Court to restore the appeals to be heard and decided on merits.
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2020 (7) TMI 722
Addition of undisclosed interest income - proportion of investment in shares of Ashima Synthetics Ltd - HELD THAT:- Tribunal is final fact finding authority and on perusal of the impugned order passed by the Tribunal it is clear that the Tribunal has considered the submissions made on behalf of the assessee as well as revenue and thereafter has arrived at findings of fact. Tribunal has sustained the addition with regard to the interest income as it was found as a matter of fact that the interest calculated by the assessing officer was a gross calculation about amount to be received and paid by the group as a whole. The Tribunal, therefore, has rightly added sustained the addition of net difference on the item products holding the same to be undisclosed income by directing the Assessing Officer to add proportionate amount of net difference in the interest in proportion to the interest of shares of Ashima Syntex Ltd. by the respondent assessee. Disallowance of contrived loss - only ground for disallowing such loss was that there was no proof of delivery of shares prior to the date of search - Disallowance in block assessment proceedings - HELD THAT:- Tribunal has arrived at finding of fact after considering the material evidence on record so as to hold that the assessee is entitled to the claim of the contrived losses suffered by it. The Tribunal has also rightly considered the fact that in the assessment under the block period only the undisclosed income, which is found from the seized material can only be considered for the addition as in the total income of the assessee. In the facts of the case, the assessee has already disclosed the losses by making necessary entries in the books of accounts and therefore, the assessing officer and CIT(A) were not justified in disallowing the contrived losses claimed by the assessee. The Tribunal has also taken into consideration the factual aspect of the matter that the sale bills were issued by the brokers, the payments were made by cheque by the respective buyer of the shares and such transactions are duly reflected in the books of accounts. In such circumstances, it cannot be said that the Tribunal has committed any error in holding that the assessee is entitled to claim the contrived losses in the total income for the respective year by the respective assessee. It cannot be stated that the impugned order of the Tribunal is without any reason whatsoever so as to remand the matter back to the Tribunal. Even if the matter is remanded back to the Tribunal, the ultimate result arrived at by the Tribunal in the impugned order relying upon the facts emerging from the records the same would not be different in any view of the matter. In such circumstances, we do not find any merit in the appeal - Decided in favour of assessee.
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2020 (7) TMI 721
TDS u/s 195 - liability for deduction of tax - whether payments made by the assessee cannot be treated as royalty ? - HELD THAT:- Substantial question of law framed by this Court is answered in favour of the revenue and against the assessee in 2015 (6) TMI 1205 - KARNATAKA HIGH COURT] In the event the assessee succeeds before the Apex Court, it is clear that this order also cannot come into effect. The assessing authority shall therefore, pass an order under Section 260(1A)of the Act, based on the outcome of the assessee s appeal before the Apex Court. If the assessee loses his battle before the Apex Court, then before giving effect to this order, the assessing authority shall consider the application of Art. 24(4) of the DTAA between India and the Netherlands. Though the said question is not raised by the assessee before the authorities, the same being purely a question of law and the said DTAA being a beneficial piece of delegated legislation, if the assessee is entitled to the benefit of the same, that cannot be denied to it.
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2020 (7) TMI 720
Disallowance of provision for warranty while computing book profits u/s.115JB - HELD THAT:- Disallowance made under normal provisions of the Act, ITAT had set aside to the file of the ld. AO - We also find that there is absolutely no finding recorded by the ld. CIT(A) in his appellate order as to whether the provision has been made on a scientific basis based on past history of the assessee. Since, the same issue has been set aside to the file of the ld.AO under normal provisions of the Act, we deem it fit and appropriate in the interest of justice and fair play to remand this ground also to the file of the ld. AO as the decision in this case would be depending on the outcome of the decision taken by the ld. AO under normal provisions of the Act. Accordingly, the ground raised by the assessee is set aside to the file of the ld. AO for denovo adjudication in accordance with law. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [ 2020 (5) TMI 359 - ITAT MUMBAI ]
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2020 (7) TMI 719
Transfer Pricing Adjustment - Selection of comparable - HELD THAT:- Accropetal Technologies Ltd. - Observations of the DRP is a finding that the employee cost of Accropetal Technologies Ltd., is less than 25% of its total cost. However, we find that in form No.35A (form of objection before DRP) the Assessee has raised para 6.4.2 (Page-40 of Form No.35A), the objection for exclusion of this company is only on the basis of functional comparability and revenue recognition method followed by this company. Both the filters employed by the DRP for excluding this company from the list of comparables does not figure in the objection of the Assessee at all. This aspect has not been highlighted or taken as a ground of appeal by the revenue in its appeal. Therefore the only ground of appeal of the revenue against the directions of the DRP is that the directions of the DRP amount to a set aside of the issue to the TPO/AO. Since we have come to the conclusion that the directions of the DRP cannot be construed as a set aside of the issue to the TPO/AO, we find no merits in Gr.No.2 raised by the revenue. Companies functionally dissimilar with that of assessee need to be deselected from final list who is into provision of low end IT enabled services. Gains/loss arising from fluctuation of foreign currency as being operating in nature - HELD THAT:- The Hon ble Delhi High Court in the case of PCIT Vs. B.C.Management Services (P) Ltd.[ 2017 (12) TMI 255 - DELHI HIGH COURT] held that foreign exchange gain has to be regarded as part of operating income by following its own order in Pr. CIT v. Cashedge India (P.) Ltd. [ 2016 (5) TMI 1348 - DELHI HIGH COURT] .Respectfully following the said decision, we uphold the directions of the DRP and dismiss ground raised by the revenue. Working capital adjustment - HELD THAT:- On going through the TPO's order as well as annexure D referred to in the transfer pricing order on working capital adjustment, we find that the AO has not given any basis for restricting the adjustment to 1.71%. In all the cases relating to transfer pricing adjustment, this Tribunal has been directing to give working capital adjustment on actual basis and the TPO having arrived at 5.97% ought to have adopted the same instead of restricting it to 1.71 %. - remand this issue to the file of the AO/TPO for working out the ALP after giving adjustment of working capital as per the calculation of the AO in annexure D annexed to the transfer pricing order. This ground of appeal is accordingly allowed. Deduction u/s.10A - HELD THAT:- From case of CIT v. Tata Elxsi Ltd [ 2011 (8) TMI 782 - KARNATAKA HIGH COURT] we are of the view that communication charges and expenses incurred in foreign exchange should be excluded both from export turnover and total turnover. We are of the view that as of today, law declared by the Hon'ble High Court of Karnataka which is the jurisdictional High Court is binding on us. Moreover, the order of the Hon ble Karnataka High Court has been upheld by the Hon ble Supreme Court in the case of CIT v. HCL Technologies Ltd. [ 2018 (5) TMI 357 - SUPREME COURT] . The grounds are decided accordingly dismissed. Non granting full credit of TDS deducted and consequently levying interest u/s 234B and C and non granting interest under Section 244A contrary to the directions of the DRP - HELD THAT:- We are of the view that these grounds are factual in nature and therefore the AO must be directed to verify the same and grant them/rectify the same in accordance with law. We hold and direct accordingly.
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2020 (7) TMI 718
Benefit of carry forward of losses u/s 72(A) - brought forward losses of the amalgamating company - non fulfilling requirement of filing of the requisite information in Form No.62 for the third assessment year - HELD THAT:- We do not think that the requirement of filing of the requisite information in Form No.62 for the third assessment year can be said to be a condition precedent or a mandatory condition to allow the Assessee to carry forward such losses under Section 72A of the Act. The said condition of filing the Form No.62, at best, is only directory and non compliance thereof would not disentitle the Assessee to claim such carry forward losses to be set off against the profits of the Assessee company. There is no dispute before us that the fact of crossing of the 50% of installed capacity of its production stood achieved by the Assessee in the present case in the fourth year, as would be clear from the order of the Commissioner of Income Tax (Appeals) for AY 2007-08, which is produced on record and quoted above. No substantial question of law, as claimed by the Revenue Department
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2020 (7) TMI 717
Addition u/s 14A r.w.r. 8D - investments from which the appellant has not earned any exempt income - assessee suo motu has disallowed an amount u/s 14A r.w.r. 8D - HELD THAT:- As relying on VIREET INVESTMENT (P.) LTD. [ 2017 (6) TMI 1124 - ITAT DELHI] we find substance in the argument made by the Ld. Senior Counsel appearing for the assessee to this effect that only those investments are to be considered for computing average value of investment which yielded exempt income during the year. In that view of the matter we find it fit and proper to restore the matter to the file of the Ld. AO for re-computing the disallowance under Section 14A in terms of the observation made hereinabove. Hence, this ground is allowed for statistical purposes. Nature of expenses - river diversion expense and HT line shifting expense - revenue or capital expenditure - HELD THAT:- It became necessary for the appellant to shift the same for mining operation; similarly river diversion was also necessary to undertake the mining activities. Assessee has not spreaded particular expenditure over a period of years as it reflects from the return filed by it and it has claimed the entire expenditure as deductable in the same year. The assessee has claimed the expenditure in this particular year in which it has been incurred and, therefore, when it has chosen to claim the entire expenditure spent it is justifiable to allow such claims for the year under consideration invoking the provision of Sec. 36(1)(iii) of the Act and also the ratio laid down by the judgment TAPARIA TOOLS LIMITED VERSUS JOINT COMMISSIONER OF INCOME TAX [ 2015 (3) TMI 853 - SUPREME COURT] - we allow the entire claim of the assessee. The addition is, therefore, deleted. - Decided in favour of assessee.
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2020 (7) TMI 716
Draft assessment order u/s 143(3) r.w.s. 144C - maintainability of the objection filed by the assessee under Form No. 35A - Form No. 35A filed by the assessee on 19.01.2018 was not verified as per the procedure laid down since the signature of the person on verification page in the said form was a copy of the original signature - dismissing the application in limine treating the Form No. 35A filed by the assessee as nonest held to be not sustainable - submitted by the appellant that at that relevant point of time since Mauritius was hit by a cyclone leading to heavy rainfall and causing devastating damage in the country, the Directors present in Mauritius were not available for signing and forwarding the original objections. To meet the deadline, therefore, the assessee got the original objections signed by one of its Director available at United States of America and filed the scanned copy HELD THAT:- No observation as regards the reason explained by the assessee for filing the Form No. 35A with the scanned signature. Rather, we find that when the concerned Director was not available at Mauritius, the assessee with bona fide intention got the said form signed by the other Director of the company available in United States of America and filed the scanned document thereon in due date. Even it is a defect in the eyes of law, according to us, it is procedural defects and curable in nature, since procedures are handmade of justice. On this issue we have considered the judgment passed by the Hon ble Tribunal in the matter of MSM Satellite (Singapore) Pte. Ltd. vs. JCIT [ 2016 (10) TMI 1310 - ITAT MUMBAI] Tribunal pleased to observe that when the Revenue is accepting the e-filing of documents then the rejection of the Form 35A submitted by the assessee is unsustainable in the identical issue. No merit in rejecting the Form 35A filed by the assessee and thus we quash the order impugned - we allow the submission of Form 35A filed by the assessee. The instant appeal is, thus, allowed with the direction upon the DRP to accept the original Form No. 35A submitted by the assessee - Assessee s appeal is allowed for statistical purposes
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2020 (7) TMI 715
Deduction u/s 80P(2)(a)(i) - interest income earned from investment of funds in commercial banks and cooperative banks/societies - CIT-A upholding action of AO such interest income is not eligible for deduction under that section - HELD THAT:- Assessee is not a banking company and the expression business of banking cannot be given a spacious meaning to unrealistically expand the term beyond, the assessee is not eligible for deduction u/ s 80P(2)(a)(i). Accordingly, we hereby hold that the interest earned from the fixed deposits made out of the surplus funds is not eligible for the claim of deduction u/s 80P(2)(a)(i). Deduction u/s 80P(2)(d) - alternative plea for deduction - whether the co- operative bank wherein the assessee made deposits out of this surplus fund be considered as a co-operative society, for if a co-operative bank is considered to be a co-operative society than only the interest earned by the assessee on the deposits would be eligible for deduction u/s 80P(2)(d)? - HELD THAT:- We find that co- operative society is a broad and larger umbrella under which the co-operative banks do perform. All co-operative societies may not be banks but all co-operative banks are deemed to be co-operative societies. According to banking Regulations Act, a co-operative society bank as the same meaning of the co- operative society. We have also given a thought as to the interest earned by the surplus funds. As per the Income Tax Act, there is no such stipulation or prerequisite as to the nature of the funds. Section 80P(2)(d) of the Act allows whole deduction of an income by way of interest or dividends derived by the co-operative society from its investment with any other co-operative society. This provision does not make any distinction in regard to source of the investment because this section envisages deduction in respect of any income derived by the co-operative society from any investment with a co-operative society. The revenue is not required to look to the nature of the investment whether it was from its surplus funds or otherwise. Referring to cases TOTAGARS CO-OPERATIVE SALE SOCIETY, [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] and [ 2010 (2) TMI 3 - SUPREME COURT] we hereby hold that the assessee is eligible for deduction u/ s 80P(2)(d) on the income earned by the way of interest from the co-operative societies. Expenditure u/s 57 - assessee has taken a plea that the expenditure incurred in earning of interest from the commercial banks be allowed while computing the taxable income - HELD THAT:- The assessee is eligible for the expenditure u/s 57 incurred in earning the interest income which is taxable under the head income from other sources as per Section 56.
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2020 (7) TMI 714
Capital gain - tenancy right available with the assessee or not? - the amount received for not interfering possessions - the parties of the family settlement that the assessee and her relatives were in possession of flat. - relinquishment of rights - capital receipt v/s capital gain - HELD THAT:- In the instant case, Smt. Saraswati Vithaldas Sahita occupied the said flat at 2nd floor of the building known as Gangasagar on license basis. This is crystal clear from the Consent Term before the Hon ble Court of Small Causes at Mumbai, quoted at length earlier. After demise of Mrs. Saraswati Vithaldas Sahita, her son Shri Vidyut Sahita occupied the said flat with his family. The said building Gangasagar was purchased by M/s H.M. Enterprises. For vacating the premises, M/s H.M. Enterprises filed suit against the occupier of Gangasagar building. An out of Court settlement was made so that occupier could not interfere with possession of M/s H.M. Enterprises. The appellant being daughter-in-law of Smt. Saraswati Vithaldas Sahita received ₹ 25,00,000/- for not interfering possessions of M/s H.M. Enterprises. The distillation of precedents must now be applied to the facts of the present case. CIT(A) erred in confirming addition on account of relinquishment of right. CIT(A) erred in treating capital receipt as capital gain - Decided in favour of assessee.
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2020 (7) TMI 713
Penalty u/s 271AAB - Addition u/s 69B - income shown suo-motto - additional income brought to tax by the Assessing Officer - Undisclosed income admitted and declared in the return of income - HELD THAT:- Penalty has been initiated in respect amount admitted by the assessee pursuant to search conducted on 13.08.2013. Given that the assessee had only disclosed a sum of ₹ 5.2 lacs in the revised return filed on 9.11.2013, subsequent to date of search and thereafter, in the return filed on 16.02.2015 in response to notice u/s 153A, the Assessing officer has brought the balance amount of ₹ 80,000/- to tax during the course of assessment proceedings. However, as far as initiation of penalty proceedings u/s 271AAB is concerned, the same has been initiated on the whole of the sum of ₹ 6 lacs admitted by the assessee pursuant to search. Second contention of the ld AR that the assessee had cash in hand of ₹ 80,000/- as on 31.03.2013 and the same has been utilized in making the investment for purchase of land. What needs to be seen is the source of investment at the point in time when the investment was made. In the instant case, the sale deed has been registered on 5.4.2012, therefore, what needs to be seen is whether the assessee was having sufficient cash in hand on or before 5.4.2012 reflected in its books of accounts to make such investment, however, there is nothing on record to substantiate the same. None of the conditions for levy of penalty at the lower rate of 10%, under clause (a) of Section 271AAB (1), are satisfied. Accordingly, it is held that in respect of the income penalty is leviable at 30% under clause (a) of Section 271AAB(1) - Decided against assessee.
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2020 (7) TMI 712
Assessment on a non-existent entity - assessment in the name of the amalgamating company - Whether a curable defect as per Section 292B? - HELD THAT:- The amalgamating company i.e. Genpact India was not in existence at the time of conducting assessment proceedings as well as on the date of passing Assessment Order. Once it is found that assessment is framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act. Hence, the Assessment proceedings as well as the Assessment order itself are void ab initio. Therefore, assessment order is set aside. - Decided in favour of assessee.
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2020 (7) TMI 711
Non-grant of TCS credit - Rectification of mistak u/s 154 - Amount of TCS was not reflected (shown) in the name of assessee, but corresponding income declared by the assessee - HELD THAT:- In the return of income, though the assessee has claimed TCS, however, in absence of reflection of the TCS in the name of the assessee in Form No. 26AS, while processing the return of income, the credit of TCS has not been granted to the assessee. During the rectification proceedings, the assessee has submitted before AO that though TCS has been collected in the name of Shri Bheru Singh Tak, the corresponding revenues have been offered by the assessee in his return of income - also not disputed the said fact that revenues have been offered by the assessee in his return of income but at the same time, has rejected the said claim stating that TCS was deducted in the name of Shri Bheru Singh Tak having different PAN and therefore, the credit of the same cannot be allowed to the assessee. It is a settled legal proposition that the TCS is a form of advance payment on behalf of the assessee and where the assessee has offered the income in particular assessment year and the income has been brought to tax in the hands of the assessee, the corresponding TCS should be allowed to the assessee. Therefore, in the instant case, where there is no dispute that the income has been offered by the assessee and brought to tax, the assessee should be eligible for corresponding TCS subject to the fact that the same has not been claimed by Shri Bheru Singh Tak. See M/s Jai Ambey Wines vs ACIT, CPC [ 2017 (1) TMI 986 - ITAT JAIPUR ]. We accordingly agree with the contention of the ld AR that where complete purchase and sale of main licensee have been considered in case of sub-licensee, i.e the assessee, the credit for TCS should also be granted to the assessee subject to the condition that no claim of such TCS have been made by the main licensee in his individual return of income. TCS credit to be allowed, subject to verification of facts. - Matter remanded back.
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2020 (7) TMI 710
Correct year of assessment - Interest income was taxed in the earlier assessment year - interest income from partnership firms was included in the total income of the assessee for the year under consideration as well as for the assessment year 2014-15 - mistake on the part of the assessee is to declare and offer to tax the interest income - only reason for denial of exclusion of the income from the total income of the assessee is non filing of the revised return of income - HELD THAT:- Since the return of income was filed by the assessee belatedly, therefore, the assessee could not file a revised return of income. Undisputedly the said income on account of interest from the partnership firms has been taxed for the assessment year 2014-15 and it was again taxed for the year under consideration. It is a case of taxing the same income twice. It is duty of the AO to assess the correct income of the assessee permissible in law. AO cannot take the advantage of any mistake on the part of the assessee to offer an excess income which is otherwise not taxable under law. In the case in hand, what is the mistake on the part of the assessee is to declare and offer to tax the interest income for the AY 2015-16 instead of 2014-15. Once, the interest income was assessed for AY 2014-15 and the assessee has not challenged the said order of the Assessing Officer then the consequent effect of the assessment for the assessment year 2014-15 would be to exclude the same income for the assessment year 2015-16. Addition made for the assessment year 2014-15 would led to double taxation of the same income. AO has to remove the said anomaly in the assessment by excluding the said income for the assessment years 2015-16 as the income pertains to the assessment year 2014-15 and was also accordingly, taxed as per law. Once, the AO has treated the income in question as chargeable to tax for the assessment year 2014-15 the same cannot be charged to tax for the assessment year 2015-16. Even if the Assessing Officer is having limitation for not assessing income below the income declared in return of income the said bar is not applicable to the appellate authority. CIT(A) has also misunderstood the fact about the return of income for the year under consideration was filed much prior to the assessment framed by the AO for the assessment year 2014-15. At the time of filing of the return of income it was not certain or known to the assessee that the AO would make an addition of the said income for the assessment year 2014-15. Even otherwise the assessee is liable to pay tax only on the income which is chargeable to tax as per law, if any excess amount of income offered to tax the AO is duty bound to correct the same and only income which assessable to tax as per law has to be assessed to tax Assessee cannot be penalized only for the reason that he has not filed revised return of income for correcting the apparent mistake of double taxation of the income. In view of the above fact and circumstances of the case the income which is already charged to tax for the assessment year 2014-15 on account of interest from partnership firms is deleted from the total income of the assessee. - Decided in favour of assessee.
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2020 (7) TMI 709
Rectification u/s 254 - Sale of land - land in question were sold by the assessee in the capacity of power of attorney holder and AO has assessed the income in the hand of the assessee who sold the land - tribunal deleted addition - HELD THAT:- Assessee produced the relevant documentary evidence in support of the claim that he has executed the sale deeds in the capacity of power of attorney holder of the land owners namely, Hanuman Sahai, Chauthmal, Gyarsi Lal, Pachuram, Shankar Lal and Nanchi Lal. Tribunal has given a finding of fact on merits after analyzing the documentary evidence. AO though did not accept the documentary evidence but also not conducted any enquiry and particularly by examination of the original land owners who have given a power of attorney in favour of the assessee. The assessment order is silent about enquiry conducted by the AO. Now after passing the said order of the Tribunal the AO is coming up with a new stand that the issued summons U/s 131 of the IT Act to the land owners that being the case and nothing has come out from the alleged enquiry or attempt made by the AO it would support the case of the assessee. The summons issued by the AO if served upon the land owners then non appearance of the land owners would not discharge the AO from conducting further enquiry. Assessee cannot be blamed for non appearance of the land owners in response to the summons if any issued by the AO. AO is not allowed to setup a new case after the matter was decided by the Tribunal. The assessment order is completely silent about the alleged summons issued by the AO hence, the Tribunal decided the case based on the material available on record which cannot be recalled without any substantial fact or material relevant for the disposal of the case brought on record. Matter decided on merits and based on the analysis of fact and record cannot be reversed or reviewed. Even otherwise the scope of Section 254(2) of the Act is very limited and circumscribed and does not given the jurisdiction to the tribunal to re-evaluate the material/evidence hence, the Misc. Application filed by the Revenue deserves dismissed.
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2020 (7) TMI 708
Provision for labour demand - disallowance by taking view that it is contingent in nature - HELD THAT:- As in assessee s own case for AY 2006-07 [ 2013 (9) TMI 522 - ITAT, MUMBAI] issue in question has already been decided in favour of the assessee in earlier years. Deduction is allowable in respect of the estimated liability regarding incremental wages before the final agreement was entered in to. Addition being prorate premium payable on redemption of foreign currency convertible bond (FCCB) - AO disallowed the premium paid on FCCB holding that being capital and contingent - HELD THAT:- As decided in own case [ 2013 (9) TMI 522 - ITAT, MUMBAI] expenses incurred in connection with the issue of FCCB were revenue in nature. Addition of expenses on FCCB - AO disallowed the expenses on FCCB holding it as capital - HELD THAT:- As decided in own case [ 2013 (9) TMI 522 - ITAT, MUMBAI] expenses incurred in connection with the issue of FCCB were revenue in nature. Discount on employee stock ownership plan (ESOP) - HELD THAT:- As decided in own case [ 2020 (6) TMI 564 - ITAT MUMBAI] restored this issue to the file of the ld. AO to consider the claim of deduction in the light of the Special Bench decision in the case of Biocon Ltd. [ 2013 (8) TMI 629 - ITAT BANGALORE] - A specific direction need to be given to the ld. AO to allow deduction in respect of all options exercised during the year equal to the difference between the exercise price and the market price at the time of exercise of the option, as held in the case of Biocon Ltd, instead of the market price at the time of grant of option. TP adjustment - notional interest on delayed collection of receivable amount from AE - HELD THAT:- During the year under consideration, we have noted that export package credit rate furnished by assessee before the TPO at 2%. Therefore, considering the ratio of the decision of Tribunal in assessee s own case for A.Y. 2004-05 we direct the AO to re-compute the TP Adjustment by adopting the rate of 2% in place of 6.75%. In the result, this ground of appeal is partly allowed. Disallowance u/s 40A(9) - expenditure incurred on employee welfare and payment made to Mahindra Academy, which runs educational institution, where children of assessee s employee and others take education - HELD THAT:- We have further noted that similar relief was granted by Tribunal in appeal for A.Y. 2002-03, 2003-04 2004-05. We have further noted that so far as second amount is concerned, the similar issued (claim) was restored by Tribunal to the file of AY in AY 2006-07. However, the second round of litigation, the ld. CIT(A) has allowed the same claim of assessee -therefore, following the principle of consistency, the AO is directed to allow both the claim. In the result, this ground of appeal is allowed. Provision for warranty disallowance - HELD THAT:- As relying on assessee's own case [ 2014 (5) TMI 322 - BOMBAY HIGH COURT] we direct the AO to delete the entire addition on account of provision for warranty. Expenditure relating to Joint Venture with Renault, expenditure relating to Joint Venture with Jiangling Tractors - HELD THAT:- Treated as expenditure of capital expenditure and confirmed the same as to be a part of cost of improvement in order [ 2020 (6) TMI 564 - ITAT MUMBAI] Expenses of professional fee are allowed as revenue expenses. Travel expenses related with mergers and acquisitions - Treated as expenditure of capital expenditure and confirmed the same as to be a part of cost of improvement in order [ 2020 (6) TMI 564 - ITAT MUMBAI] Expenses written off - HELD THAT:- Considering the decision of Tribunal for AY 1999-2000 (on the issue of expenditure of acquisition which could not materialized), which was affirmed by Bombay High Court, thus, on similar principles, when no new asset is created for deriving enduring benefits, the expenses of written off are allowed as revenue expenses. Euro IV Project expenses - HELD THAT:- CIT(A) affirmed the action of AO by following the order of Tribunal for A.Y. 2006-07. However, we have noted that the Tribunal while treating the expenses as capital in nature allowed the depreciation to the assessee in para 3-4 of the order; similar order was followed in A.Y. 2001-02 2002-03. Therefore, we direct the AO to allow the depreciation by following the order of Tribunal for A.Y. 2006-07 [ 2013 (9) TMI 522 - ITAT, MUMBAI]. Treat the Consultancy fees as capital in nature and allowed the depreciation. Allow the Staff cost as a revenue expenditure to the assessee. Waiver of liability on Prepayment of SICOM loan - assessee submits that the Package Scheme of Incentives introduced by the Government of Maharashtra from time to time, provide for deferral of sales tax for 10 years in respect of Nasik unit - HELD THAT:- As decided in Sulzer India Limited [ 2014 (12) TMI 267 - BOMBAY HIGH COURT] it was a capital receipt and could not be termed as a remission or cessation of liability. Interest on Income Tax Refund - HELD THAT:- AO held that income received in A.Y. 2005-06 is taxable in the same year. CIT(A) confirmed the action of AO by following the order of A.Y. 2003-04 2004-05. The ld. AR of the assessee fairly submits that this ground of appeal was decided against the assessee in A.Y. 2004-05. Considering the admission of assessee that similar ground of appeal was held against the assessee in A.Y. 2004-05, therefore, this ground of appeal is dismissed. Part disallowance of deduction under section 80IC - AO restricted the claim of assessee by taking view that the only profit earned after substantial expansion can be said to be eligible for the benefit under the said section and not the profit of the full year - CIT(A) upheld the action of AO and also held that the assessee has not demonstrated the substantial expenses - HELD THAT:- Deduction is eligible on the basis of annual profit and not for any split/broken period. We are also in the agreement with the contention of ld. AR of the assessee on the ratio of decision of Hon ble Bombay High Court Godrej Soaps Pvt. Ltd. [ 1987 (3) TMI 45 - BOMBAY HIGH COURT] which is based on erstwhile section 80J wherein incentive deduction was allowed @ 6% of capital employed in the eligible undertaking with regard to the period for which undertaking worked. In view of the aforesaid deduction, we direct the AO to allow the deduction for whole of the year. In the result, this ground of appeal is allowed. Disallowance of capital loss on sale of R D assets - HELD THAT:- AO said sale of R D assets has to be treated as per the special provisions of section 41(3). The ld. CIT(A) confirmed the action of AO by following the order of Tribunal for A.Y. 2006-07. The ld. AR of the assessee fairly considered that the similar issue was decided against the assessee in A.Y. 2006-07 [ 2013 (9) TMI 522 - ITAT, MUMBAI] .
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Customs
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2020 (7) TMI 707
Provisional assessment of imported goods - Dry Dates - HELD THAT:- The respondent authorities are directed to conduct provisional assessments of the goods in question (Dry Dates) which have been imported against Bill of Entry No.8025310 dated 29th June, 2020 in accordance with law, rules, regulations and Government policies applicable to the facts of the case, within a maximum period of two weeks from today. Petition disposed off.
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2020 (7) TMI 706
Classification of imported goods - Parts of seats of motor vehicle (parts of part) - import of child parts from Japan which are then assembled to manufacture Round Recliner Assembly in India and then said Round Recliner Assembly is dispatched to factory at Haryana where the recliner welding assembly is completed and thereafter it is sent to Maruti factory where it is welded and fixed on the seat of motor vehicles - whether classifiable under heading 8708 of CTH as parts and accessories motor vehicle, or are parts of motor vehicle seats and classifiable under 9401 9000? HELD THAT:- It is seen that in CTH 8708 there is general entry of parts and accessories of motor vehicles but there is no specific entry for seat or its parts. Whereas in tariff item 9401, there is entry specifically for seat, wherein under tariff sub-heading 9401 20 00 entry describes Seats of a kind used for motor vehicles and in tariff item 9401 9000 is for Parts of various seats and the said seats includes seats of kind used in motor vehicles . Therefore, from the tariff entries it is clear that the seat for motor vehicles is specifically included under heading 9401 - Also, it is clear that vehicle seats is excluded by the provisions of notes (II) to Section XVII, therefore, clause (II) is not fulfilled. Consequently, the vehicle seats will not cover under heading 8708. In view of the unambiguous provisions for classification, there is no iota of doubt that vehicle seats will not fall under 8708 whereas, the same is correctly classifiable under 9401. Hence, part of seats which is undisputed in the present case is correctly classifiable under CETH 9401. It is undisputed that child parts used for making parts which are subsequently used in the complete assembly of vehicle seat and the vehicle seat has been classified under 9401, then how part of seat can be classified under 8708. If Revenue s contention is accepted then the tariff entry i.e. seats of a kind used for motor vehicles under 9401 2000 will become redundant. The captioned goods i.e. Child Parts imported by the appellant is correctly classifiable under CETH 9401 90 00 of Customs Tariff Act - appeal allowed - decided in favor of appellant.
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2020 (7) TMI 705
Principles of Natural Justice - request of the appellant for cross examination of the witnesses has been rejected during the adjudication proceedings in the SCN - Section 138B of CA - HELD THAT:- From the plain reading of clause (b) of sub section 1 of section 138(b), it is clear that the statement made and signed by person before the Custom Officer can be admitted as evidence when the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. In the above section, no exception is provided or any discretion is provided for the Adjudicating Authority to allow or not to allow the cross examination. Particularly, in the present case, when the appellant have vehemently requested the cross examination of the witnesses. The Adjudicating Authority cannot have his own assumption and presumption that whether anything will come out from the process of cross examination. It is up to the defendant that whether the cross examination will help for his defence. The cross examination is a vital part of principles of natural justice. The appellant should be allowed cross examination, the witnesses except the SIO. The SIO is part of the investigation and the Show Cause Notice has relied upon various statements, letters and opinions. The cross of SIO is unwarranted - the learned Principal Commissioner being adjudicating authority shall grant cross examination of witnesses as requested by the appellant - Appeal allowed.
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2020 (7) TMI 704
Condonation of delay of 110 days in filing appeal - sufficient cause present for delay or not - HELD THAT:- It is apparent that the period to file the impugned appeal stands expired on 11 May 2019. Now coming to the reason quoted as sufficient cause for the delay of 110 days in filing the appeal, we observe that the only reason quoted is pendency of writ-petition No. 2826/2019 being filed before Hon ble High Court of Delhi. Apparently and admittedly the said writ-petition was filed on 10 May 2019 that is just one day prior the date of expiry of period of limitation available to the present applicant to file the impugned appeal. Otherwise also, we observe that the writ-petition was filed by one Shri Stanley Fernandes. The said petitioner though was consignor but apparently he is not appellant nor as is apparently the co-noticee of the appellant in the impugned show cause notice No. 3007 dated 07 February 2018. Also there is no order been passed against him as is apparent from the impugned order dated 30 January 2019. For this reason also the pendency of said writ-petition does not seem to extend any benefit to the present applicant who is none but the importer and the proposed allegation of mis-declaration on his part that too to the extent of importing 43020 pieces of memory card serve 4 GB and 8 GB quantity under the garb of three battery UPS, is not available to him. COD application dismissed.
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Insolvency & Bankruptcy
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2020 (7) TMI 703
Approval of Resolution Plan - section 31(1) of the Insolvency and Bankruptcy Code, 2016 - CIRP process - effective implementation of the plan - HELD THAT:- This Adjudicating Authority is of the opinion that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 of the Insolvency and Bankruptcy Code, 2016 meets the requirement as referred in section 30 of the Insolvency and Bankruptcy Code, 2016 sub-sections (1), (2), (2)(a), (2)(b), (2)(c), (2)(d), (2)(e), (2)(f), (3), (4), (5) and (6) and has provisions for its effective implementation. Hence, this Adjudicating Authority is hereby approved the resolution plan submitted by the resolution professional as approved by the CoC. This resolution plan is now binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan from today. The resolution plan is approved with such observations that the resolution applicant shall follow the provisions of section 31(4) of the Insolvency and Bankruptcy Code, 2016, to obtain necessary approval required under any law for the time being in force within the period one year from the date of approval of the resolution plan by this Adjudicating Authority under sub-section (1) of section 31 of the Insolvency and Bankruptcy Code - Moratorium shall cease to have effect.
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Service Tax
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2020 (7) TMI 702
Taxability - principles of mutuality - services provided to group / promoter companies - period April 2007 to September 2011 - Business Auxiliary Service or not - HELD THAT:- The companies have come together to share the resources and there is mutuality of interest of the promoters / member companies. No evidence of any consideration paid by Group Companies for providing of services to the member-companies or GMR group of companies. The only basis for providing of services by the appellant is on cost sharing basis as per the norms or formula laid down by the members of the appellant company. Therefore, SCN is not maintainable both on the principle of mutuality and on the fact of lack of consideration for such services alleged to have been rendered. Appeal allowed - decided in favor of appellant.
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2020 (7) TMI 701
Levy of Service Tax - Construction Activities - reverse charge mechanism - it appeared to revenue that appellant were providing Construction of Residential Complex Service‟ for the period upto 30.06.2012 and same service after 01.07.2012 being covered by the provisions of Section 66 E of the Finance Act, 1994 - exemption under Sl. No.14 of N/N. 25/2012-ST dated 20.06.2012 - HELD THAT:- There is no evidence on record to establish that the appellant had constructed a residential complex before 30.06.2012 or the appellant had constructed a complex with more than 2 residential units together after 01.07.2012 - Thus the appellant did not provide residential complex service prior to 01.07.2012 and appellant was eligible for exemption under Notification No.25/2012-ST dated 20.06.2012 at Serial No.14 for activity of construction undertaken by him for the period subsequent to 01.07.2012. Further, appellant was not liable to pay Service Tax under Reverse Charge Mechanism. Appeal allowed - decided in favor of appellant.
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2020 (7) TMI 700
Extended period of limitation - VCES scheme - invocation of proviso to Sub-section (1) of Section 73 of Finance Act, 1994 - demand on the ground that the appellant had not filed ST-3 returns till the issue of show cause notice - HELD THAT:- The learned Original Authority has accepted the plea of the appellant that the details of the transactions were recorded by the appellant in their specified records. Further, he was held that the appellants were entitled to reduced penalty. This indicates that there were no elements for invoking extended period of limitation - Further, in view of submissions of the learned Chartered Accountant on behalf of the appellant that the amount voluntarily deposited was more than service tax liability for normal period, there were no provisions for issue of said show cause notice dated 05.06.2017 in view of provisions of Sub-section (3) of Section 73 of Finance Act, 1994. Therefore, subject SCN was not sustainable. The impugned Order-in-Original is not sustainable - appeal allowed - decided in favor of appellant.
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Central Excise
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2020 (7) TMI 699
Maintainability of application - availability of alternative remedy - Principle sof natural justice - opportunity to cross examine 50 witnesses not granted, whom the appellant/assessee intended to cross examine during the course of assessment proceedings before the learned Commissioner - HELD THAT:- Since the learned single Judge has only relegated the appellant to the effective alternative remedy, we are inclined to examine the details of the merits of the contentions raised by the learned counsel for the Assessee as to whether opportunity to cross examine the witnesses was required to be given in the present case or not or whether sufficient opportunity was already given to the Assessee or not. We cannot appreciate short circuiting the normal procedure of appellate forums to be availed by the Assessee in such cases. Merely because there has been an alleged breach of principles of natural justice, the Assessee is not allowed to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India and the learned Single Judge therefore, in our opinion, was perfectly justified in relegating the appellant back to the alternative remedy. The Tribunal being the final fact finding body, is expected to look into all the aspects of the matter, including the aspect raised before the learned Single Judge about the cross examination of the witnesses. Whether the Assessee was given sufficient opportunity or not whether such cross examining was necessary at all or not, are all aspects which the Tribunal can very well consider in the appeal, if any filed by the Assessee. Appeal disposed off.
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2020 (7) TMI 698
Reversal of CENVAT Credit - input materials and input services are used both in or in relation to the manufacture of dutiable and exempted goods - Rule 6 of the Cenvat Credit Rules - appellant had exercised the option of availing Rule 6(3)(i) of the Cenvat Credit Rules for the year 2008-09 by making payment as per the said provision in April 2008 - bar from altering of said option - HELD THAT:- This issue came up for consideration before a Co-ordinate Bench of the Tribunal in M/S. MERCEDES BENZ INDIA (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [ 2015 (8) TMI 24 - CESTAT MUMBAI] . In this case the allegation was that the assessee while reversing the amount of cenvat credit and paying the interest had not followed the procedure as laid down in subrule 3A(a) and (b) of the Cenvat Credit Rules respectively, inasmuch as they had neither exercised these option by intimating the same in writing to the Superintendent of Central Excise giving required particulars nor had they determined and paid any amount provisionally for every month. Thus by not following laid down procedure as envisaged the assessee becomes liable to calculate and pay amount equivalent to 5% of the value on exempted services. There is no requirement under Rule 6(3)(i) and Rule 6(3A) of the Cenvat Credit Rules that the option had to be exercised on the first day of the financial year or the first month thereof. On the contrary, the said provisions clearly indicate that such option could be exercised at any point of time during a financial year by a manufacturer. The only restriction under Explanation-I of Rule 6(3) is that once such option is exercised, the same has to be continued with during the remaining part of the financial year. Thus, there has been due compliance by the appellant of the requirements under rule 6(3) and (3A), including the procedure laid down therein and the appellant has legally and validly availed the option in terms of Rule 6(3)(ii). The Commissioner has therefore erred in holding that the appellant had not fulfilled the conditions of procedure laid down in Rule 6(3) and Rule 6(3A) of the Cenvat Credit Rules and that the appellant was not entitled to avail option under Rule 6(3)(ii) of the Cenvat Credit Rules - Even otherwise, the demand confirmed under Rule 6(3)(i) of the Cenvat Credit Rules by the Commissioner choosing such option in the show cause notice cannot be sustained. Appeal allowed - decided in favor of appellant.
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Indian Laws
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2020 (7) TMI 697
PIL - welfare of advocates - non-inclusion of advocates in the definition of the word professionals under the Micro, Small and Medium Enterprises Development Act, 2006 - Petitioner in person submitted that this public interest litigation has therefore been preferred for the welfare of advocates as a class, so that the benefits which flow from inclusion under the Act, 2006 is also available to them. HELD THAT:- We are not inclined to entertain this petition as a Public Interest Litigation. It ought to be kept in mind that such public interest litigation for the benefit of a class of persons can be preferred if the affected persons are unable to access the courts, e.g. the poorest of the poor, illiterates, children, and other classes of people who may be handicapped by ignorance, indigence, illiteracy or lack of understanding of the law. Looking to the fact that advocates are capable enough to approach the Court, if aggrieved, we see no reason to entertain this public interest litigation. As and when any advocate will approach the Court, decision can be taken on merits in accordance with law, rules and regulations applicable to the facts of the case. Petition dismissed.
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