TMI Tax Updates - e-Newsletter
August 3, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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GST:
Classification of goods - rate of GST on the supply of goods by the applicant - marine diesel engine, and parts thereof, supplied for use and application in ships, vessels, boats, floating structures etc. - Marine diesel engine, and parts thereof will be covered under Sr. No. 252 of Notification No. 1/2017-C.T.(Rate), dated 28-6-2017. only when used in the manufacture of goods falling under 8901, 8902, 8904, 8905, 8906, 8907 and supplied only to ship building companies/shipyards or Indian Navy. - AAR
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GST:
Levy of IGST - repaired Goods re-imported into India between July 2017 till date - Aircrafts - IGST on fair cost of repairs and cost of insurance and freight - Respondents have not preferred an appeal against the earlier two decisions of the CESTAT. There is no justifiable reason for the Respondents to have compelled the Petitioner to file the present writ petition and in fact the Respondents should have on their own volition applied the judgements of the CESTAT to the subsequent Bills of Entry filed by the Petitioner. It would be a travesty of justice if despite two orders of CESTAT, each time a fresh Bill of Entry comes up for assessment by the Department, the concerned officer would attempt to give its own subjective interpretation to the Exemption Notification. Judgements are not mere ornaments and are meant to be followed in letter and spirit. - HC
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Income Tax:
Faceless assessment u/s 144B - Need for personal hearing as provided - When an assessee approaches with response to show cause notice, the request made by an assessee, as referred to in clause (vii) of sub section 7 of section 144B, would have to be taken into account and it would not be proper, looking at the prescribed procedure with strong undercurrent to have hearing on a request after notice, to say that petitioner would have opportunity pursuant to section 144C in the present matter, would intercept operation of the scheme contained under section 144B. - HC
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Income Tax:
Deduction u/s 80IA - lease rent income received from letting out modules of Software Technology park to various lessees - income derived from letting out of the property with all amenities and facilities would be income from business and cannot be assessed either as income from house property or as income from other sources. - HC
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Income Tax:
Assessment of trust - The assessee has contested that no fee was fixed by the state level fee fixation committee for the year under consideration and, therefore, computation of the excess fee by the AO, is based on presumption and without any documentary evidence in support. - CIT(A) has correctly held that once the assessee is registered u/s 12AA of the Act, the Assessing Officer has to examine applicability of section 11, 12 and 13 of the Act. No such violation has been pointed out by the learned Assessing Officer of section 11, 12 and 13 of the Act - AT
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Income Tax:
Addition of capital gain - cost of indexation - JDA property - Though in the definition of 'indexed cost of acquisition', the word used are, "in which the asset was held by the assessee" a harmonious reading of Sections 48 and 49 makes it clear that, for the purpose of 'Indexed Cost of Acquisition', it has to be understood as the first year in which the previous owner held the said property. Otherwise, if the date of inheritance is taken into consideration, then the cost of acquisition of the asset on that date corresponding to the market value is to be taken into consideration. Otherwise, take the cost of acquisition on the day the previous owner acquired it and apply the "Indexed Cost of Acquisition" and then calculate the capital gains and the tax payable. Accordingly we direct the AO to recompute the cost of acquisition in the light of above discussion - AT
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Income Tax:
Penalty levied u/s 271(1)(c) - the assessee has given reasonable and plausible explanation that the accountant has committed mistake while preparing the accounts as the credit note sent by the sundry creditor was not came to his notice and there was attempt for tax evasion as the assessee suffered loss. In our view it was sufficient explanation and reasonable within the scope of section 273B of the Income tax Act. - AT
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Income Tax:
Levy of interest u/s 234B and 234C - Liability of advance tax - income from partnership firm in the hands of partner - As per the provisions of Sec. 10(2A) of the Act, the share of profit of the partnership firm is exempted in the hands of the partner. - both the provisions u/Sec 207 & Sec 208 are not inclusive and are independently applicable. The assessee case falls within the purview of provisions of section 207(2) of the Act which cannot be disputed. - Interest liability to be deleted - AT
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Indian Laws:
Dishonor of Cheque - rebuttal of presumption about the legally enforceable debt or not - the complainant, apart from existence of a presumption of a legally enforceable debt in his favour, could able to prove his case by leading cogent evidence, both oral and documentary, but the accused who failed to take any specific defence in the matter, could not even make out a case on preponderance of probabilities. - The courts have rightly convicted the accused for the offence punishable under Section 138 of the N.I. Act - HC
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IBC:
Approval of Resolution Plan - Fresh claim - When the Resolution Plan has already been approved by the CoC and it is pending before the Adjudicating Authority for approval, at this stage, if new claims are entertained the CIRP would be jeopardized and the Resolution Process may become more difficult. Keeping in view the object of the IBC which is resolution of Corporate Debtor in time bound manner to maximize the value, if such request of claimant is accepted the purpose of IBC would be defeated - AT
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Central Excise:
Refund claim - supply of LSHFHSD to Indian NAVY - Since all the goods stored in warehouse are duty paid as per the board circular 2004, the ground on which Assistant Commissioner has proceeded is clearly contrary to this clarification issued by the board. Appellant has supplied the goods to Indian Navy under claim of exemption out of the duty paid stock. In case where the entire stock is deemed to be duty paid, then whether the supply is made from tank 3 or 5 is irrelevant - AT
Articles
Notifications
News
Case Laws:
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GST
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2021 (8) TMI 49
Classification of goods - rate of GST on the supply of goods by the applicant - marine diesel engine, and parts thereof, supplied by the Applicant exclusively to ship building companies / shipyards or Indian Navy for use and application in ships, vessels, boats, floating structures etc. - classified under Sr. No. 252 of N/N. 1/2017-Central Tax (Rate), dated 28-6-2017? HELD THAT:- Applicant designs and manufactures two-stroke and four-stroke engines, and are engaged in trading of goods and also manufacture supply parts of engines. Supply of diesel engines and parts thereof are of two types i.e. assembly and manufacture of diesel engines by using various imported or locally procured parts and trading of imported diesel engines - Diesel engines are known as compression ignition internal combustion piston engines. Diesel Engines are classified under CTH 8408 and are mainly differentiated as Marine Propulsion Engines, Engines of a kind used for the propulsion of vehicles of Chapter 87 and as Other Engines. Whether the said MDEs and parts thereof used on a ship/tugs/fishing vessels, etc are forming parts of the said ship/tugs/fishing vessels, etc and therefore chargeable to reduced tax @ 5% under Sr.No.252 of Notification No.1/2017 Central Tax (Rate) dated 28.06.2017? - HELD THAT:- MDEs are the very essential parts of a ship or vessel and are quite clearly parts of a vessel/ship. A ship or a vessel cannot be imagined to be in existence without MDEs because they are essential for the main propulsion or turning the propellers of the normal ships and also for providing auxiliary power. A ship/vessel, etc. cannot sail without the marine diesel engines. There may be additional equipments required on a ship like Walkie-talkie, Binoculars, Life Jackets, Lifeboats, furniture, fans, air-conditioners, etc. but such goods cannot be taken to be parts of a ship as per general understanding but are rather additional equipment on a ship and a ship can sail without these additions - MDEs are such essential components of a vessel/ship without which the ship would not be complete and would not exist. These are very integral for the functioning of the ship and can also be separated from the ship for repair/replacement. In the present case applicant supplies subject goods and has listed many items in the Exhibit D submitted by them, and stated that the same are parts of MDEs supplied by them to the shipyards manufacturing ships and vessels. Applicant has not spelt out in detail as to how each and every item mentioned in Exhibit ₹ 13' are to be considered as parts of Marine Diesel Engines - MDEs and parts thereof are essential requirements in manufacture of ship, vessels, boats, floating structures etc. Such MDEs and part thereof are classified under heading 8408 and 8409, respectively, of GST Tariff and are parts of ships, boat, floating structures. Since subject goods are meant for ship manufacture and supplied for purpose of use or application in manufacture of goods that are classifiable under Tariff headings 8901, 8902, 8904, 8905, 8906, 8907, the said goods can be considered as parts of ships, boat, vessels etc. Entry at Sr. No. 252 covers goods which merit classification under Any Chapter of the GST Tariff wherein the description in Sr. No. 252, is Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907 . Accordingly, in the present matter, the Subject Goods will be covered under Sr. No.252. The supply of MDEs and parts thereof supplied by the Applicant exclusively and directly to ship building companies/shipyards or Indian Navy for use in manufacture of ships, vessels, boats, floating structures etc. will be classified under Sr. No. 252 of Notification No. 1/2017- C.T. (Rate), dated 28-6-2017. If the applicant supplies the impugned goods to parties other than ship building companies and for other purposes, it would not be covered in the said entry and is liable to be taxed at respective higher rates as per schedule entry.
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2021 (8) TMI 41
Grant of alternate prayer for interim bail - bail sought on the ground of medical condition of petitioner s father - Sections 132(1)(b) (c) of the CGST Act, 2017, read with Sections 132(1)(i) and Sub Section (5) of the Act - HELD THAT:- The petitioner s father is suffering from Pleural Extension with T.B. Chest and for that reason, the angiography was postponed. Angiography was also postponed as the patient having altered sensorium with depression - considering the contentions put forth by counsel for the petitioner and the medical condition of petitioner s father and the fact that he requires treatment, it is deemed proper to allow the prayer for interim bail. The prayer for interim bail is accordingly, allowed and it is directed that accused petitioner shall be released on interim bail for a period of two months, provided he furnishes a personal bond in the sum of ₹ 1,00,000/- (Rupees One Lac only) together with two sureties in the sum of ₹ 50,000/- each - petition disposed off.
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2021 (8) TMI 36
Levy of IGST - repaired Goods re-imported into India between July 2017 till date - Aircrafts - IGST on fair cost of repairs and cost of insurance and freight in terms of Serial No. 2 of N/N. 45/2017-Cus. - HELD THAT:- The aim of the Policy is to transform the Government into an efficient and responsible litigant. Efficient litigant means ensuring that good cases are won and bad cases are not needlessly persevered. Litigation should not be resorted to for the sake of litigating. Government must cease to be a compulsive litigant. The Hon ble Supreme Court has been repeatedly affirming that the propensity of Government Departments and Public Authorities to keep litigating is one of the reasons for docket explosion. Mindful of the said factor and the rising litigation, Government has framed the National Litigation Policy to ensure that pendency of cases is brought down and only meaningful issues are brought before the Court. The Hon ble Supreme Court in NATIONAL CO-OPERATIVE DEVELOPMENT CORPORATION VERSUS COMMISSIONER OF INCOME TAX, DELHI-V [ 2020 (9) TMI 496 - SUPREME COURT] , in its Postscript Note 1, observed that a certificate for dismissal is obtained from the highest court so that a quietus could be put to the matter in the Government Departments. Relegating a party to approach Courts or Tribunals, again and again, for interpretation of provisions of any Act or Rules or Notifications, which stand interpreted in earlier judgements is not only victimisation to the litigant but also wastage of judicial time. Moreover, the judgments which are not stayed or overruled by the higher Forums are binding on the respondents and ought to be followed wherever applicable in the facts of a given case. It is directed that the concerned Respondent Authority to decide the representations preferred by the Petitioner, which are Annexures A-5, A-6, A-7 and A-8, appended to the present writ petition, in accordance with law, rules, regulations and Government Policies and with due deference to the decisions rendered by the CESTAT, New Delhi dated 02.11.2020 - petition disposed off.
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Income Tax
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2021 (8) TMI 48
Faceless assessment u/s 144B - Need for personal hearing as provided - Whether any standards, procedures and processes have been framed by revenue in terms of sub-clause (h) of clause (xii) of Section 144B(7)? - HELD THAT:- Going by the provisions under section 144B, when hearing has been envisioned and incorporated, it is imperative to observe principles of natural justice as stipulated. In the present matter, it is not disputed that show-cause notice had been issued to the petitioner on 25/03/2021 to which the petitioner has responded to from time to time vide letters dated 26th March, 2021, 28th March, 2021 requesting for personal hearing and by sending responses dated 7th and 8th April, 2021. There is nothing to reflect upon that after receipt of response to show-cause-notice dated 26th March, 2021, 28th March, 2021, 7th and 8th April, 2021, prescribed procedure has been followed. The petitioner appears to be losing out on an opportunity as would be available to it under clause (xxiii)(b) read with sub section (7) sub-clause (vii). When an assessee approaches with response to show cause notice, the request made by an assessee, as referred to in clause (vii) of sub section 7 of section 144B, would have to be taken into account and it would not be proper, looking at the prescribed procedure with strong undercurrent to have hearing on a request after notice, to say that petitioner would have opportunity pursuant to section 144C in the present matter, would intercept operation of the scheme contained under section 144B. Foregoing discussion leads to that impugned draft assessment order dated 22.04.2021 is unsustainable. The petition is allowed in terms of prayer clause (a) leaving it open to the authorities to carry forward the process in accordance with section 144B
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2021 (8) TMI 46
Deduction u/s 80IA - lease rent income received from letting out modules of Software Technology park to various lessees - allowable income from business - HELD THAT:- Issue decided against the appellant/Revenue and in favour of the respondent/assessee in M/S. TIDAL PARK LTD. [ 2021 (7) TMI 302 - MADRAS HIGH COURT] wherein held that income derived from letting out of the property with all amenities and facilities would be income from business and cannot be assessed either as income from house property or as income from other sources.
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2021 (8) TMI 35
Addition on account of cessation of Liability u/s 41(1)/28 - addition made on the ground that certain trade creditors/liabilities were appearing in the Balance Sheet for more than 3 years and have ceased to exist and represented remission of liability liable to be taxed u/s 41(1) - HELD THAT:- Admittedly, the liabilities/creditors continue to appear in the audited accounts of the assessee as on 31.03.2008 and assessee has not written back these amounts. Hon ble Supreme Court in the case of CIT Vs. Singauli Sugar Works [ 1999 (2) TMI 5 - SUPREME COURT] have explained the provisions of section 41(1) and has held that so long liabilities are continuously shown and admitted in the audited accounts, the same do not cease to exist. CIT (A) has taken a correct legal view of the matter and has correctly deleted the addition. We uphold the action of CIT (A) on this issue and dismiss this ground of appeal of the department. Depreciation of account of computer peripherals such as printers and UPS etc . - HELD THAT:- Both the parties fairly agreed that this issue is now settled by the judgments of CIT v. BSES Yamuna Power Ltd. [ 2010 (8) TMI 58 - DELHI HIGH COURT] and in the case of Birla Soft Ltd. [ 2014 (2) TMI 1343 - SC ORDER] - Respectfully, following these judgments, it is held that CIT (A) s order on this issue does not need any interference and is hereby upheld. The Ground No. 3 raised by the department is accordingly dismissed. Disallowance of Foreign Tour Expenses of wife of one of the Directors of the company - HELD THAT:- As decided in judgment of Hon ble Gujarat High Court in the case of Sayaji Iron Engineering Ltd. [ 2001 (7) TMI 70 - GUJARAT HIGH COURT] to claim that there cannot be any personal element in the hands of the corporate entity and disallowance made by the AO was wholly unjustified - Decided against revenue. Losses claimed in respect of Dwaraka Project - According to the Department, these losses had been worked out by the assessee on estimated basis and in an unscientific manner - main reason given by the Assessing Officer was that very small amount of expenditure had been incurred by the assessee on the project till Assessment Year 2008-09 and only 30% of the area in respect of that project had actually been booked by the assessee and necessary revenue had been recognized in respect of the same - HELD THAT:- Transaction between the related parties is genuine is not in dispute. The Ld. AO has also accepted this aspect and the only reason for restricting the cumulative loss of ₹ 44 Crores in A. Y. 2008- 09 and A. Y. 2009-10 as noted from assessment order for A. Y. 2009-10 is the reduction of discount actually allowed by assessee @ 31.5% to 5%. Therefore, so long as transactions between the transacting parties are genuine, no challenge can be thrown to the prices decided between the parties. The AO has subsequently in A. Y. 2010-11, 2011-12 and 2012-13 accepted both the cost of the project and the sales actually realized in line with the previous year s estimation. A cumulative appreciation of all the facts and legal position as gathered and applicable to the facts of this case on this ground would lead to a natural conclusion that AO was not justified in disallowing losses in A. Y. 2008-09 and also in A. Y. 2009-10. Whether the order of Ld. CIT (A) requires any change vis - vis total losses of this project having been allocated in the manner indicated by him in his order? - Since the assessee as well as department has already acted upon the order of Ld. CIT (A) by filling appeals and cross-appeals and keeping in view the fact that tax rates in each of these years was the same as also admitted by the Ld. AR, we feel that no useful purpose will be served to accept this settled assessment history of the assessee. We, therefore, are of the view that allocation done by Ld. CIT(A) for the total losses of ₹ 45.72 Crores incurred by the assessee over the period of project running into 5 years started from A. Y. 2008-09 to A. Y. 2012-13, which allocation as already clarified has been acted upon both by the assessee as well by the department, there is no reason for us to give any directions on this submission of the assessee and action of Ld. CIT(A) on this issue of allocating the losses to various years is found justified and is hereby upheld. Accordingly, in view of our aforesaid reasoning, grounds of appeal raised by the department. Addition of sale promotion expenses - disallowance was made by the AO on the reasoning that directors of the company had incurred these expenses through their personal credit cards and the element of personal nature in such expenses cannot be ruled out - AO disallowed 20% of the total expenses debited under the head Sale Promotion on that reasoning on an estimated and adhoc basis - HELD THAT:- CIT (A) correctly observed that company is an artificial legal entity and incapable of incurring any personal expenses. For this legal proposition, the Ld. CIT (A) followed the judgment of Hon ble Gujarat high Court in the case of Sayaji Iron Engineering Co. . [ 2001 (7) TMI 70 - GUJARAT HIGH COURT] - Decided against revenue. Addition of bad debts written off - AO disallowed on account of bad debts written off, which mainly represented the advances given to various parties who were suppliers of the assessee in the ordinary course of its business - AO disallowed this amount on the plea that the amount written off are not covered u/s 36(1)(vii) - CIT (A) deleted this disallowance by holding that if the advances given to the supplier and the expected goods and services are not received against such advances and become irrecoverable, the same represent business loss u/s 28 and are allowable u/s 37 even if the same are not allowable u/s 36(1)(vii) of the Income Tax Act - HELD THAT:- At the time of hearing both the parties fairly agreed that the order of CIT (A) does not need any inference. We also find support on this issue from the judgment of Hon ble Supreme Court in the case of Badridas Daga [ 1958 (4) TMI 2 - SUPREME COURT] wherein it has been held that amounts advanced in the ordinary course of business which become irrecoverable are allowable as business losses. The order of Ld. CIT(A), therefore, on this issue is upheld and this ground of appeal of the department is dismissed. Disallowance of rent on lease hold properties to L DO - according to the AO this amount is not allowable u/s 43B and shall be allowed only in the year in which this is actually paid by the assessee - HELD THAT:- The nature of such amount, i.e., amount payable towards misuse of premises and illegal construction was held to be in the nature of ground rent by following the judgment of Hon ble Delhi High Court in the case of Gulab Singh Sons (P) Ltd.[ 1973 (3) TMI 26 - DELHI HIGH COURT] . It was amongst others held that ground rent does not come under any items mentioned in the various clauses of section 43B. Although the main issue in that case was of allowability of such amount u/s 24 of the Income Tax Act but still the issue of allowability of ground rent from the perspective of section 43B was also considered and it was held that ground rent is not disallowable by applying the provision of section 43B. As relying on case of K. Narendra [ 2001 (4) TMI 185 - ITAT DELHI-D] we hold that the provision of section 43B are not applicable to the ground rent and disallowance made by the AO and upheld by Ld. CIT(A) is hereby directed to be deleted.
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2021 (8) TMI 33
Addition on account of employee s contribution to ESI and EPF - CPC while processing the return of the assessee disallowed the claim of employee s contribution towards ESI and EPF on account of delay in depositing the amount as per the respective statutes - HELD THAT:- Respectfully following the binding precedents like case of Pr.CIT vs Pro Interactive Service (India) Pvt.Ltd [ 2018 (9) TMI 2009 - DELHI HIGH COURT ] and Dee Development Engineers Ltd [ 2021 (4) TMI 393 - ITAT DELHI ] therefore, direct the AO to allow the claim of the assessee and delete the addition. Thus, grounds of appeal raised by the assessee are allowed.
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2021 (8) TMI 32
Addition on account of interest chargeable u/s 36(1)(iii) on interest free advances given to group companies - HELD THAT:- We find from the order of the Assessing Officer that most of the investments/advances are continued from last year i.e. assessment year 2012-13, wherein the Tribunal has deleted the disallowance under section 36(1)(iii) of the Act on the ground that advances/interest free loans have been given for business purposes in view of the commercial expediency. The facts of the year under consideration are also identical to facts of the case for assessment year 2011-12. In view of the above, respectfully following the decision of the Tribunal [ 2018 (6) TMI 1776 - ITAT DELHI] and decision of the Hon ble Delhi High Court [ 2019 (1) TMI 1393 - DELHI HIGH COURT] we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the same. The ground of the appeal of the Revenue is accordingly dismissed. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- In the case of Joint Investment Private Ltd.[ 2015 (3) TMI 155 - DELHI HIGH COURT] wherein the disallowance has been restricted to the quantum of exempted income earned by the assessee in the relevant year. Before the Assessing Officer, the assessee mentioned that share of profit from partnership firm was claimed as exempt and Ld. CIT(A) has also restricted the disallowance to this amount. Respectfully, following the decision of the Hon ble Delhi High Court as cited by the Learned Counsel of the assessee, we direct the Assessing Officer to restrict the disallowance under section 14A of the Act to the quantum of exempted income earned by the assessee during the year under consideration. Accordingly, the ground of the appeal of the Revenue is dismissed.
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2021 (8) TMI 31
Assessment u/s 153A - Disallowance of interest paid in a search proceeding - HELD THAT:- CIT(A) in the earlier year on the identical facts and deleted the additions made by the Ld. AO in the unabated assessment since the same were not made on the basis of any incriminating material found during the course of search relying upon the principle laid down by the Jurisdictional High Court in the case of PCIT -Vs- Saumya Construction Pvt. Ltd., [ 2016 (7) TMI 911 - GUJARAT HIGH COURT] , the judgments passed in the matter of CIT -vs- Kabul Chawla, [ 2015 (9) TMI 80 - DELHI HIGH COURT] and CIT -vs- Continental Warehousing Corporation Ltd [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] The addition in the appeal in hand indeed has been made on the basis of the books of accounts and the details furnished to the Ld. AO and not on the basis of any incriminating material found during the course of search. Hence, respectively relying upon the judgment passed by the different judicial forums we delete the addition made under Section 143(3) r.w.s 153A of the Act. The appeal preferred by the assessee is, thus, allowed.
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2021 (8) TMI 30
Assessment of trust - assessee is registered under section 12AA - addition on the plea that Income Tax Department concerns only with the application of income and it is not significant how that income was earned - HELD THAT:- As only extra fee of ₹ 1,500/- was charged and that too was for examination fee. In such circumstances, it cannot be said that any capitation fee has been charged from the students. Moreover, there is no surplus has been generated in the year under consideration and the assessee cannot be alleged for engaged in profiteering also. The assessee has contested that no fee was fixed by the state level fee fixation committee for the year under consideration and, therefore, computation of the excess fee by the Assessing Officer, is based on presumption and without any documentary evidence in support. The decisions relied upon by the Assessing Officer are in respect of the capitation fee and in absence of any such evidence of collection of capitation fee, the decisions relied upon are not applicable over the facts of the assessee. CIT(A) has correctly held that once the assessee is registered under section 12AA of the Act, the Assessing Officer has to examine applicability of section 11, 12 and 13 of the Act. No such violation has been pointed out by the learned Assessing Officer of section 11, 12 and 13 of the Act. The Section 11 prescribe application of the income toward charitable purposes, which in the case of the assessee is for education and the assessee has duly applied its income for said purposes as per the rules specified in the Act. In view of the above facts and circumstances, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute and, accordingly, we uphold the same. The ground of the appeal of the Revenue is accordingly dismissed.
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2021 (8) TMI 29
Deduction u/s 10AA - assessee has not claimed interest on the capital of partners and their remuneration - HELD THAT:- AO relied on the decision of Rajkot Tribunal in Meridian Impex [ 2013 (9) TMI 605 - ITAT RAJKOT] and held that non-charging of interest and remuneration thereof has been done to enhance the profit of eligible exempt income. AO worked out the interest and remuneration and thereby restricted the claim of section 10AA. CIT(A) deleted the disallowance by following the decision of Jurisdictional high Court in Alidhara Taxspin Engineers [ 2017 (5) TMI 1684 - GUJARAT HIGH COURT] and also held that in the partnership deed it is clearly mentioned that no interest on capital or remuneration is payable to the partners. We find that the Hon'ble Gujarat High Court in Alidhara Taxspin Engineers (supra) held mere incorporation of interest on partners capital account and remuneration does not signify that the same is mandatory in nature. The case of the assessee is rather on the better footing, as the clause in the partnership deed clearly spelt out that no interest on capital of partners or remuneration is payable to the partners. We do not find any merit in the grounds of appeal raised by the revenue. The case law relied by Ld. CIT-DR is not helpful to the revenue after the decision of Hon'ble Gujarat High Court in Alidhara Taxspin Engineers (supra). - Decided against revenue.
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2021 (8) TMI 28
Revision u/s 263 - no source of cash deposited in the saving bank account held by the assessee - sale of agricultural land - HELD THAT:- Assessee had given specific reply along with copy of agreement and the details of transactions which took place in the course of sale of agricultural land held by the assessee at Village-Tigriya Sancha Dist. Dewas. AO on perusal of the bank statement, agreement of sale of agricultural land and other submissions and after making due application of mind accepted the submissions made by the assessee and assessed the income vide order dated 12.12.2016 framed u/s 143(2) r.w.s. 148. In the case of Ram Swaroop Bairagi Others [ 2020 (11) TMI 822 - ITAT INDORE] and having dealt similar set of facts, are of the considered view that nexus of cash deposited in the bank account is on account of sale of agricultural land made by the assessee during the year supported by copy of agreement to sale and also find that the ld. AO has made due application of mind and conducted necessary enquiry to examine the issue of cash deposited in the bank and thus the assessment order framed u/s 143(3) r.w.s. 148 dated 12.12.2016 can neither be held as erroneous nor prejudicial to the interest of revenue. We hold that Ld. Pr. CIT wrongly assumed jurisdiction u/s 263 and therefore the impugned order deserves to be quashed. We accordingly restored the assessment order dated 12.12.2016 framed u/s 143(3) r.w.s. 148 of the Act. - Decided in favour of assessee.
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2021 (8) TMI 27
Addition of capital gain - cost of indexation - JDA property - Cost of the previous owner - agreement to sell the undivided share and also the agreement for determination of value of the property were executed on 09.06.2006 and the Appellant had constructive possession of the land from that date as contemplated u/s 53A of the Transfer of Property Act read with Section 2(47)(v) - contention of the assessee is that for the purpose of computation of capital gain, indexation of cost of acquisition is to be made from the date of incurring various payments for the purpose of acquisition of capital asset which is subject matter of charging of capital gain - lower authorities considered the date of registration of the property in favour of assessee i.e., 17.5.2010 and determined the capital gain - HELD THAT:- Section 49 deals with the cost with reference to certain modes of acquisition. One such mode is, if the assessee acquires a capital asset by way of succession, inheritance or devolution, then the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be - when an asset is acquired by way of inheritance, the cost of acquisition of the asset should be calculated on the basis of the cost of acquisition by the previous owner and the said cost of acquisition of the previous owner has to be calculated on the basis of indexed cost of acquisition as provided in explanation (3) to Section 48. Though in the definition of 'indexed cost of acquisition', the word used are, in which the asset was held by the assessee a harmonious reading of Sections 48 and 49 makes it clear that, for the purpose of 'Indexed Cost of Acquisition', it has to be understood as the first year in which the previous owner held the said property. Otherwise, if the date of inheritance is taken into consideration, then the cost of acquisition of the asset on that date corresponding to the market value is to be taken into consideration. Otherwise, take the cost of acquisition on the day the previous owner acquired it and apply the Indexed Cost of Acquisition and then calculate the capital gains and the tax payable. Accordingly we direct the AO to recompute the cost of acquisition in the light of above discussion Disallowance of cost of improvement incurred by the assessee - lower authorities denied this claim of assessee towards improvement made to the interiors for which the assessee could not produce the requisite details of bills and vouchers - HELD THAT:- According to the ld. counsel for the assessee it was misplaced. Even before us the assessee has not produced an iota of evidence to suggest that the cost of improvement incurred on the interiors. In the absence of requisite details, we are not in a position to appreciate the argument of the assessee to allow such claim. Therefore, this ground of the assessee is dismissed.
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2021 (8) TMI 26
Disallowance u/s 14A - Assessee has made suo motu disallowance - CIT (A) deleted the addition on the ground that the AO has failed to record his satisfaction before invoking the provisions contained u/s 14A - HELD THAT:- AO except for making general observation that, it cannot be ruled out that some expenditure would definitely be incurred towards such investments and keeping in view the huge investments of ₹ 45.67 crores out of total assets of assessee at ₹ 448.94 crores, it can be safely concluded that buying and selling of securities as well as maintaining a portfolio of large number of scrips leading to or capable of generating the dividend income is one of the main activities of the assessee , has not recorded his satisfaction as to how and under what circumstances disallowance has been made by the assessee company is incorrect u/s 14A of the Act. AO has also not disputed books of account on the basis of which assessee has come up with the plea that he has incurred the expenditure only to the tune of ₹ 29,04,491/- of which it has made suo motu disallowance. So, in the absence of satisfaction recorded by the AO, mechanical invoking of provisions contained u/s 14A read with Rule 8D is not permissible as has been held by Hon ble Delhi High Court in case of Maxopp Investment Ltd. [ 2011 (11) TMI 267 - DELHI HIGH COURT] CIT (A) has rightly deleted the addition made by the AO u/s 14A of the Act. So, ground no.1 is determined against the Revenue. Disallowance of consumption incentive - Addition on the ground that these expenses are in the nature or provision, liability for which may or may not accrue in the time to come - CIT (A) deleted this addition - HELD THAT:- Keeping in view the facts and circumstances of the case and following the order passed by the coordinate Bench of the Tribunal in the assessee s own case for AYs 2008-09 2009-10, we are of the considered view that when the assessee has been consistently following mercantile system of accounting, the liability brought on record is an ascertained liability and the party-wise detail has been brought on record by the assessee and perused by the AO as well as ld. CIT (A) qua the discount given. So, we find no illegality or perversity in the findings returned by the ld. CIT (A), hence ground no.2 is determined against the Revenue. Disallowance under Explanation 2 of section 36(1)(va) - employees contribution beyond due date - CIT (A) deleted the addition in the light of the conjoint reading of section 36(1)(va) and section 43B - HELD THAT:- When the assessee has deposited the employees contribution of PF on 25.04.2012 as against the due date of 20.04.2012 but well before filing the return of income, we find no illegality or perversity in the deletion made by the ld. CIT (A), hence ground no.3 is determined against the Revenue.
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2021 (8) TMI 25
Disallowance u/s 14A r.w.r. 8D - CIT(A) deleted the addition on the ground that no dividend income was received by the assessee during the year and therefore, in view of the decision of Holcim India Pvt. Ltd [ 2014 (9) TMI 434 - DELHI HIGH COURT] - HELD THAT:- No infirmity in the order of the learned CIT(A) in deleting the addition made by the AO u/s 14A r.w.r. 8D of the Rules. It is an admitted fact that the assessee, during the year under consideration, has not earned any exempt or dividend income. It has been held in various decisions that in absence of any exempt or dividend income received during the year under consideration, no addition can be made u/s 14A r.w.r. 8D of the Rules. The Hon ble Delhi High Court in the case of Chiminvest Ltd. 2015 (9) TMI 238 - DELHI HIGH COURT] has held that in absence of any exempt income, disallowance u/s 14A of the Act of any amount was not permissible. The Hon ble Supreme Court in the case of CIT vs M/s Chettinad Logistics Pvt. Ltd. [ 2018 (7) TMI 567 - SC ORDER] has held that in absence of any exempt income, no disallowance u/s 14A r.w.r. 8D can be made. Since, the assessee in the impugned assessment year has admittedly not received any exempt income or dividend income, therefore, the order of the learned CIT(A) in deleting the disallowance made by the AO u/s 14A r.w.r 8D is upheld and the grounds raised by the Revenue on this issue are dismissed. Deemed dividend addition u/s 2(22)(e) - as per AO assessee has failed to demonstrate that the money advanced by the companies to it was in the nature of trade advance and therefore the learned CIT(A) was not justified in deleting the addition - HELD THAT:- Since, the facts of the present appeal are identical to the facts of the related party decided by the Tribunal in the case of Gaurav Arora [ 2019 (3 ) TMI 1289 - ITAT DELHI] therefore, respectfully following the same we hold that regular/routine transactions cannot be termed as loans and advances so as to attract the provisions of section 2(22)(e) - Since, the learned CIT(A) while deleting the addition has thoroughly discussed the issue and has given a finding that these are trading/business transactions, therefore, in absence of any contrary material brought to our notice by the learned DR against the factual finding given by the learned CIT(A) as above, we do not find any infirmity in his order. Accordingly, the same is upheld and the grounds raised by the Revenue on this issue are dismissed
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2021 (8) TMI 24
Penalty levied u/s 271(1)(c) - assessee failed to explain the excess liability and no further appeal was filed by the assessee against the additions - HELD THAT:- We find that the lower authorities while considering the reply of the assessee, filed in response to the show cause notice for levying the penalty, has not held that the reply of the assessee is false. On independent consideration of the reply of assessee, filed in response to the show cause notice under section 274 read with section 271(1)(c). We find that the assessee has given reasonable and plausible explanation that the accountant has committed mistake while preparing the accounts as the credit note sent by the sundry creditor was not came to his notice and there was attempt for tax evasion as the assessee suffered loss. In our view it was sufficient explanation and reasonable within the scope of section 273B of the Income tax Act. Thus, we accept the secondary submissions of the ld AR for the assessee and direct the assessing officer to delete the penalty levied under section 271(1)(c) of the Act. Considering the facts that we have deleted the penalty on merit, therefore, the discussions and adjudication of the technical or legal issue, raised by issue, has become academic. In the result the grounds of appeal raised by the assessee are allowed.
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2021 (8) TMI 23
Allowability of sugarcane price paid over and above FRP price - AO disallowed the excess price so paid by holding it to be the appropriation of profits - HELD THAT:- It is bounding duty of the Assessing Officer to examine the facts and circumstances under which the harvesting and transport expenses was paid to the farmers whether the payments were made over and above FRP exclusively for the purpose of business. The Assessing Officer cannot jump to a conclusion that the payments are in the nature of appropriation of profits without examining the facts and circumstances under which the said excess payments were made. The Hon'ble Bombay High Court in the case of CIT vs. Manjara Shetkari Sahakari Sakar Karkhana Ltd. [ 2007 (8) TMI 260 - BOMBAY HIGH COURT] held that the differential price cannot be disallowed merely on the ground that it is appropriation of profits without giving a finding as to whether there is any resolution passed authoring the society to pay such excess price. Also in the case of CIT vs. Aruna Sunrise Hotels Ltd., [ 2018 (5) TMI 156 - MADRAS HIGH COURT] held that the excess price determined under sugarcane control is to be treated as allowable expenditure exclusively and for the purpose of business. Therefore, the finding of the lower authorities cannot be sustained. In our considered opinion, the matter should be remanded back to the file of the Assessing Officer in order to meet the ends of justice to give a finding whether the excess price paid over and above FRP is out of the business expediency or appropriation of profit. If it is found that the excess payment was paid only out of business expediency consideration and the same should be allowed as deduction. Thus, this ground of appeal is remanded to the file of the Assessing Officer for fresh adjudication on the lines indicated above. Accordingly, this ground of appeal stands partly allowed for statistical purposes. Disallowance of sale of sugar at concession rates to the members - The issue of disallowance on account of sale of sugar at concession rate to the members is covered by the decision of the Hon'ble Apex Court in the case of Krishna Sahakari Sakhar Karkhana [ 2012 (11) TMI 669 - SUPREME COURT] wherein the issue was remanded back to the file of the Ld. CIT(A) with a direction to address the question raised by the Hon'ble Supreme Court. The Ld. CIT(A) though adverted to the decision of the Hon'ble Apex Court in the case of Krishna Sahakari Sakhar Karkhana (supra) had not addressed the question raised therein with reference to material on record. Therefore, this issue also requires to be remanded to the file of the Assessing Officer with a direction to address the question raised by the Hon'ble Apex Court in the case of Krishna Sahakari Sakhar Karkhana (supra) after calling for requisite information from assessee society. Thus, this ground appeal also stands partly allowed for statistical purposes.
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2021 (8) TMI 22
Rectification of mistake u/s 254 - Inadvertent Mistake in not adjudicating the issue of allowance of depreciation - HELD THAT:- Miscellaneous Application was already raised in an earlier Miscellaneous Application which has been duly dealt with and disposed by the ITAT [ 2020 (2) TMI 1535 - ITAT MUMBAI] . There is no provision in the act for review of the order under section 254(2). By repeatedly filing Miscellaneous Applications on the same issue the prescription of the Act cannot be changed. Thus as ITAT has already disposed off the Miscellaneous Application on the same issue this Miscellaneous Application is liable to be dismissed.
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2021 (8) TMI 21
Revision u/s 263 - disallowance u/s 40(a)(ia) - HELD THAT:- Accounts of the assessee had made the assessment in the manner provided in Sec. 144, and thus, after rejecting the book results had applied the average of the net profit rate of 8.17% to the gross receipts and assessed his income at an estimated figure. We, thus, are of the considered view, that as the A.O while assessing the income on an estimate basis had at no stage considered the assessee s claim for deduction of the impugned expenses on which TDS is alleged by the Pr. CIT to have not been deducted, thus, no disallowance u/s 40(a)(ia) even otherwise could have been made. As the A.O vide his order passed u/s 143(3) r.w.s 147, dated 25.03.2015 had after estimating the assesee s income not separately disallowed the aforementioned expenses u/s 40(a)(ia), thus, by so doing had taken a possible view which as on the date of passing of the assessment order was supported by the aforementioned orders of the Hon ble High Courts and that of the coordinate benches of the Tribunal, therefore, the Pr. CIT was clearly divested of his jurisdiction to have revised the said order in exercise of the powers that were vested with him u/s 263 of the Act. Our aforesaid view that where on the date of framing of assessment two views qua an issue were possible, and the A.O had taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue, unless the view taken by the A.O is unsustainable in law, is supported by the judgment in the case of CIT Vs. Max India Ltd. [ 2007 (11) TMI 12 - SUPREME COURT ] - As such, not finding favour with the order passed by the Pr. CIT u/s 263 of the Act, dated 23.03.2017, we herein set-aside the same and restore the order passed by the A.O u/s 143(3) r.w.s 147, dated 25.03.2015.
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2021 (8) TMI 16
Admission of additional ground of appeal by CIT-A in absence of revised return of income - HELD THAT:- It is settled law that the Assessing Officer is not entitled to consider the revised claim in absence of revised return of income under section 139(5) of the Act. However, these powers are not restricted to the appellate authorities as held in the case of Goetez India Ltd.[ 2006 (3) TMI 75 - SUPREME COURT] and the decision of Mitex Impex, [ 2017 (3) TMI 233 - GUJARAT HIGH COURT] . Considering the factual matrix of the case, that assessee has raised additional claim of excess claim of exemption under section 54B, which has not been examined by the lower authorities. Therefore, we admit the additional ground of appeal and remit the issue back to the Assessing Officer to examine the claim and pass the order in accordance with law. Appeal of the assessee is allowed for statistical purposes.
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2021 (8) TMI 13
Disallowance u/s 14A - Suo moto disallowance made by assessee - HELD THAT:- On the facts as narrated above it is clear that ITAT in assessee's own case for earlier years has restricted the disallowance to the suo moto disallowance made by the assessee. There is no change in the facts and circumstances of the case. No reason whatsoever has been attributed by the assessing officer or CIT(A) as to why the suomoto disallowance by the assessee is not appropriate. CIT(Appeals) has referred to the decision of Supreme Court in Maxopp [ 2018 (3) TMI 805 - SUPREME COURT] for the proposition referred above. From the reference to the honourable Supreme Court by the learned CIT(Appeals), we fail to understand how the same supports the case of the revenue here that without assigning any reason whatsoever as to why the suomoto disallowance proposed by the assessee on the facts of this case is to be rejected. Furthermore by choosing not to follow the ITAT decision in assessee's own case [ 2015 (11) TMI 1057 - ITAT MUMBAI] learned CIT(Appeals) has displayed scant regard to the principle of judicial discipline. For these reasons narrated above the order of learned CIT(Appeals) cannot be sustained. We set aside the order of authorities below and direct that the suomoto disallowance proposed by the assessee in the submissions above - Decided partly in favour of assessee.
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2021 (8) TMI 8
Estimated Disallowance of Revenue Expenditure - CIT(A) has sustained the disallowances partly on adhoc basis - HELD THAT:- It is settled law that disallowances cannot be made on surmises and conjectures The power of Ld.CIT(A) are co-terminus. with that of.AO. CIT(A) has grossly erred in not making the enquiry, he was of the opinion should have been conducted. Moreover, the reasoning that the expenditure incurred on building repair, repair maintenance and labour charges, in this regard bring about an expenditure of capital nature on an adhoc basis is not sustainable on the basis of material brought on record. This is more so, when assessee has already capitalized ₹ 59,22,000/- in this regard. Hence, we set aside the order of authorities below and allow the assessee s ground.
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2021 (8) TMI 6
Disallowance of depreciation claimed under the block furniture fittings - assessee had claimed depreciation @ 100% claiming that they are temporary constructions - A.O. disallowed the same holding that the assessee could not prove the expenditure as could not produce bills vouchers in support of purchase of furniture and fixtures - HELD THAT:- It is an admitted fact that the assessee has not produced any bills/vouchers in support of these payments. The assessee could furnish details of cheque numbers relating to these payments, but could not establish the nature of expenses for which these payments have been made. Since the assessee could produce rental agreements, the ld. CIT(A) has allowed capitalization of payments related to building. It is a settled proposition that the onus to prove the expenditure lies upon the assessee. Since the assessee has failed to prove the nature of expenditure, no infirmity in the order passed by Ld. CIT(A) on this issue. Restricting the depreciation to 10% in respect of interior and other expenses incurred on the showrooms - HELD THAT:- Facts clearly demonstrate that the expenditure incurred by the assessee cannot be termed towards temporary structures. Another fact that the assessee, on the first issue, has sought capitalization of entire amount of ₹ 14,55,919/-. On the above said amount also, the assessee had claimed depreciation 100%. AO disallowed the entire amount for want of bills/vouchers. Before Ld CIT(A), the assessee has only sought capitalization and depreciation @ 10%. Thus, the assessee has accepted the treatment given by AO in respect of the above said amount of ₹ 14,55,919/-. Hence it is not appropriate on the part of the assessee to take a different stand with regard to the remaining amount. CIT(A) was justified in confirming the order of the A.O. in restricting the depreciation to 10%. Appeal filed by the assessee is dismissed.
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2021 (8) TMI 5
Levy of interest u/s 234B and 234C - Liability of advance tax - income from partnership firm in the hands of partner - contentions of the Ld. DR that the provisions of Sec. 207 and 208 of the Act cannot applied independently - HELD THAT:- We find the provisions of Sec. 207(2)(a) (b) are applicable to the assessee. We understand that the liability to pay the advance tax does not apply to an individual who is resident in India and such individual does not have any income chargeable to tax under the head profit and gains of business or profession and further the age of the individual is more than 60 years during the previous year. We on applying the second proviso to Sec. 207(2) of the Act find that the assessee is a senior citizen, more than 60 years of age as confirmed by the CIT(A) on referring to the date of birth of the assessee in the pan card. In the F.Y 2015-16 relevant to A.Y 2016-17 the assessee is 71 years old. The assessee has filed the return of income ITR Form no.3 for the A.Y 2016-17 applicable to individuals and HUF being partners in firm and not carrying on business or profession under any proprietorship. We find that the assessee has filed the return of income on 02.08.2016 disclosing the income under income from business or profession as Rs. Nil. As per the provisions of Sec. 10(2A) of the Act, the share of profit of the partnership firm is exempted in the hands of the partner. Whereas, the provisions of Sec. 208 of the Act interpreted by the CIT(A) that it is a general provision applicable for all the individual where the tax liability exceeds more than ₹ 10,000/- is not acceptable. We find both the provisions u/Sec 207 Sec 208 are not inclusive and are independently applicable. The assessee case falls within the purview of provisions of section 207(2) of the Act which cannot be disputed. Considering the facts and the information on record, we do not find merits in the submissions of the Ld. DR and accordingly set aside the CIT(A) order and direct the assessing officer to delete the interest levied u/s 234B and 234C of the act and allow the grounds of appeal in favour of the assessee.
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2021 (8) TMI 4
Deduction u/s 80IC - Assessee undertaken substantial expansion of the industrial unit during the year under consideration - this was the 6th year of claiming deduction u/s 80IC - AO was of the view that the deduction u/s 80IC was allowable @ 100% only for the initial five assessment years and not for undertaking substantial expansion and proceeded to restrict the assessee s claim of deduction to 25% of the profit and gains from the eligible business - whether the initial Assessment Year can be re-fixed in the case of substantial expansion? - HELD THAT:- A perusal of the impugned order shows that the Ld. CIT(A) has allowed the assessee s claim by following the order of ITAT Delhi Bench in the case of Tirupati LPG Industries Limited [ 2016 (2) TMI 1279 - ITAT DELHI] as held that in case of substantial expansion, the deduction will be allowable @ 100% subject to a maximum of 10 years. Thus, it has been held that the assessee can re-fix the initial Assessment Year in the case of substantial expansion from the year in which the substantial expansion has taken place for the purpose of claiming deduction at full rate subject to over all limit of 10 years. Although, the Department has vehemently opposed the order of the Ld. CIT(A) granting deduction @ 100%, we find no error either in law or facts having been committed by Ld. CIT(A) as the Ld. CIT(A) has only followed the interpretation as laid down by the Co-ordinate Bench of this Tribunal. Further, the issue now stands squarely covered by the judgment of M/S. AARHAM SOFTRONICS [ 2019 (2) TMI 1285 - SUPREME COURT] wherein as laid down that in case substantial expansion is carried out as defined in clause (ix) of Sub-section-8 of Section 80IC by such an undertaking or enterprise, within the aforesaid period of 10 years, the said previous year in which the substantial expansion is undertaken would become initial assessment year and from that assessment year, the assessee shall be entitled to 100% deduction of profits and gains. It was also laid down by the Hon ble Apex Court that deduction would be for a total period of 10 years. Appeal filed by the Department stands dismissed.
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2021 (8) TMI 3
Transfer pricing adjustment - comparable selection - functional dissimilarity - HELD THAT:- Assessee provides IT enabled services to its AE through the use of IT infrastructure which includes use of online software, live information services, research on international data base, thus companies functinally dissimilar with that of assessee need to be deselected from final list of comparables. Disallowance u/s. 40a(ia) - no TDS exemption certificate was submitted in respect of rental payments made to Annapurn Builders - short deduction of TDS - HELD THAT:- CIT(A) has given direction to the Assessing Officer to verify whether the copies of non deduction of tax/deduction tax at lower rate was filed before the Assessing Officer before passing of the assessment order and if that be so then no disallowance can be made. It has been informed by the ld. counsel that ld. Assessing Officer will give effect to the order of the ld. CIT(A) vide order dated 27.09.2018 has accepted this fact that in case of payment to M/s Annapurna Builders, assessee has produced TDS exemption certificate and himself has deleted the disallowance. Accordingly, this ground is treated as infructuous. In so far as short deduction of TDS, rather TDS deducted at lower rate in the case of M/s Hind Hosiery Mills Pvt. Ltd, again no disallowance can be made in view of the judgment of Hon ble Calcutta High Court in the case of CIT vs. S.K. Tekriwal [ 2012 (12) TMI 873 - CALCUTTA HIGH COURT] . Accordingly, this issue is decided against the revenue. Disallowance u/s.40A(2) - HELD THAT:- On perusal of the relevant finding given in the impugned order, we find that first of all Assessing Officer without any reason or material facts on record had simply disallowed 50% on the ground that there is no justification for giving such huge amount of remuneration. Such an ad hoc reasoning cannot be accepted as AO has to justify that such a remuneration paid is not commensurate with the services rendered by the Managing Director having regard to the services rendered and market value of its services. The profile of Managing Director and the services rendered by him as incorporated in the impugned appellate order and also looking to the fact that the subsequent assessment year the increase remuneration has been accepted, and therefore, the disallowance made u/s.40A(2)(b) cannot be sustained. Thus, the Revenue s appeal is dismissed.
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2021 (8) TMI 2
Claim of SMU admission expenses - assessee has explained that the nature of these expenses are discount, referral bonus, waiver of late fees etc given to existing and new students to increase enrollment for various courses/progammes of Sikkim Manipal University through the distant education centre which is being run by him - HELD THAT:- All that has been submitted by the assessee to this effect is a ledger account of SMU admission expenses and affidavit of four students which to our mind is not sufficient enough in support of the claim of the expenses. As we have noted above, there are matters which needs to be examined in detail and relevant facts brought on record. Therefore, we are of the considered view that it would be just and appropriate that the matter is set-aside to the file of the AO to examine the same a fresh after providing reasonable opportunity to the assessee. In the result, the ground of appeal no. 3 is allowed for statistical purposes. Disallowance of computer AMC expenses - AO has disallowed the same for the reason that no proper vouchers have been maintained and expenses have been incurred in cash - HELD THAT:- Even before the ld CIT(A) or during the present proceedings, nothing has been brought on record in support of said claim of expenses in form of terms of AMC arrangement/contract and the invoices/bills raised by the vendor towards the AMC. Inspite of the same, we find that the AO has been reasonable enough in disallowing a sum of ₹ 35,000/- only out of total expenses of ₹ 3,86,352/- and which has already been restricted to ₹ 17,500/- by the ld CIT(A). Therefore, we donot find any infirmity in the findings of the lower authorities and the disallowance so made and sustained by the ld CIT(A) is hereby confirmed. Disallowance of visiting faculty expenses - non-production of the faculty members for examination and the fact that the amount has been paid to them in cash - HELD THAT:- Faculty member couldn t be representative of 26 faculty members and the assessee could have ensured presence of few more faculty members to give credence to his claim and the AO could have been requested to examine them and only in a situation, where the AO is not fully satisfied, other faculty members could have been asked for appear or in the alternative, any other credible verifiable documentation in terms of their engagement with the assessee as part of his distant learning centre could have been submitted to the satisfaction of the AO, however, we find that there is nothing on record. In such facts and circumstances of the case, where the AO has only disallowed a sum of ₹ 90,375/- out of ₹ 400,100/- and which has further been restricted to ₹ 45,187/- by the ld CIT(A), we find that the authorities below have been more than reasonable in their approach and keeping the entirety of facts and circumstances, we are of the considered view that such findings are just and proper and we are not inclined to interfere with the said findings. The addition so made and confirmed by the ld CIT(A) amounting to ₹ 45,187/- is accordingly confirmed. Disallowance of vehicle running and maintenance expenses - HELD THAT:- In the instant case, where the AO has recorded a finding that the vehicles have not been used exclusively for the purposes of business, a finding which remain unrebutted before us, and has determined and restricted the depreciation claim, we donot see any infirmity in the said findings of the AO. On appeal, we find that the ld CIT(A) has held the quantum of disallowance to be excessive and has already restricted the same to ₹ 15,000/- and in the facts and circumstances of the present case, we therefore are not inclined to interfere with the said findings and the same are hereby confirmed. Birthday celebration expenses - personal or business expenses - HELD THAT:- These expenses are undisputedly incurred on birthday celebration of various staff members employed by the assessee, the same are in nature of staff welfare expenses and cannot be termed as personal expenses and are thus allowable expenses. The disallowance is thus directed to be deleted.
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2021 (8) TMI 1
Deduction u/s 80P - AO denied the deduction u/s 80P(2)(a)(i) on income from lending of credit facility to Members and u/s 80P(2)(d) towards interest earned on Term Deposits with SCDCC Bank / Other Co Op Societies and Dividend Income from Investment in Shares with SCDCC Bank / Other Co Op Societies - HELD THAT:- Since the Hon'ble Supreme Court has settled many issues in the decision rendered by it in the case of Mavilayi Service Co-operative Bank Ltd. [ 2021 (1 ) TMI 488 - SUPREME COURT] and since the facts prevailing in the instant case needs to be examined afresh in the light of the principles enunciated by Hon'ble Supreme Court in the above said case, we are of the view that the issue of deduction u/s 80P(2)(a)(i) of the Act requires fresh examination at the end of the A.O. Accordingly, we set aside the order passed by Ld. CIT(A) for the year under consideration and restore them to the file of the A.O. for examining it afresh Deduction u/s 80P(2)(d) - In the case of Karkala Co-op. S. Bank Ltd. [ 2021 (2) TMI 854 - ITAT BANGALORE] the Bangalore bench of Tribunal has considered issue of eligibility of the assessee to claim deduction u/s 80P(2)(d) and it was held that the assessee is eligible for deduction of expenses incurred for earning the interest income. Thus we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to allow deduction of proportionate cost, administrative and other expenses, if the A.O. proposes to assess the interest income earned from bank deposits as income under the head -other sources. Appeal by the assessee is treated as allowed for statistical purposes.
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Customs
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2021 (8) TMI 38
Permission for withdrawal of petition - Seeking directions to the Respondents for release of the Bank Guarantees - HELD THAT:- Liberty as aforesaid is granted. As and when such representation is preferred by the Petitioner, the same shall be decided by the Authority concerned in accordance with law, rules and regulations and Government policies applicable to the facts of the case, as early as possible and practicable. Writ petition is hereby disposed of as withdrawn with liberty as aforesaid.
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Corporate Laws
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2021 (8) TMI 19
Seeking to restore the name of the Company in the Register maintained by the Respondent/RoC - Section 252 of the Companies Act, 2013 - case of applicant is that due procedure of law as contemplated under Section 248(5) and (6) of the Companies Act, 2013 was not followed by the Respondent will passing an order of strike of - HELD THAT:- As to the facts of the present case, the Applicant has pleaded in the Application and also challenged the procedure followed by the Respondent in striking off the name of the Company. In so far as the compliance to be made under Section 248(6) of the Companies Act, 2013 is concerned, from the Report filed by the Respondent, it is seen from para 17 of the Report that the Registrar has satisfied himself from the scrutiny of the balance sheet of the Company and it was found that the Company does not have any borrowings and third party liabilities. Under such circumstances, it is safe to conclude that the order passed by the Registrar under Section 248(5) of the Companies Act, 2013 does not suffer from any legal infirmities. Further, as to the procedural irregularity as pointed out by the Learned Counsel for the Applicant, it is to be noted here that eventhough in the Application the Applicant has stated that Form No. STK-5 was issued on 10.07.2017 and Form No. STK-7 was issued on 08.11.2017, the Applicant has preferred to remain indolent at that point of time, without sending any reply to the Respondent within a period of 30 days from the date of sending notice to the Company and its director. Further, from the procedure as laid down under Section 248(5) and (6) of the Companies Act, 2013, it is seen that the Respondent has followed the due process of law and has sent notice to the Company as enumerated under the Rules framed thereunder. This Tribunal is not empowered to issue directions to the Respondent in respect of which section (either 248 or 455), the action should be contemplated against a defaulting company. So long as the action initiated by the Respondent is falling within the purview of the Companies Act, 2013, this Tribunal cannot be called into to question its legality. Further, the stance of the Applicant that the Respondent has not preferred to initiate action against the Company under Section 455(4) of the Companies Act, 2013 but rather under Section 248 of the Companies Act, 2013, would not vitiate the proceedings undertaken by the Respondents under Section 248 of the Companies Act, 2013. However on the other hand it is the Company which has miserably failed to place on record any documents to show that the Company is active and carrying on its business activities. It is a fact borne on record that the Company has failed to file its Annual Returns and the Balance Sheet with the Respondent from the year 2006 onwards and also it is seen from the typed set filed along with the Application that they have not filed the Balance Sheet from the year 2006 onwards also before this Tribunal, which would go on to show that eventhough the name of the Company is restored, it would be a futile exercise, since the Company is not ready with its Balance Sheet and Annual Returns to be filed with the Respondent. There are no legal infirmities in the order passed by the Respondent under Section 248 of the Companies Act, 2013 in striking off the name of the Company viz. M/s. Sunflower Finlinks Limited from the Register maintained by them - application dismissed.
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2021 (8) TMI 12
Seeking to restore the name of the Company in the Register of Companies maintained by the Registrar of Companies - Section 252(3) of the Companies Act, 2013 - HELD THAT:- After going through the provisions of Section 252(3) of the Companies Act, 2013, this Tribunal is of the view that the Company was in existence and it is a going concern and name of the Company to be restored in the Register of Companies as maintained by RoC. The Registrar of Companies, the Respondent herein, is ordered to restore the original status of the Company as if the name of the company has not been struck off from the Register of Companies and take all consequential actions like change of company's status from 'Strike off to Active (for e-filing) and to intimate the; bankers about restoration of the name of the company so as to defreeze its accounts - Application allowed.
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2021 (8) TMI 11
Seeking restoration of name of the Company in the Register of Companies - Section 252 of the Companies Act, 2013 - HELD THAT:- The Applicant is the Shareholder of the Company. It is submitted by the Applicant that the Company is in operation and is carrying on its business. The failure of the Company in filing the statutory returns and statements was due to inadvertence. Report of the RoC has been received - Admittedly, the relevant documents which are to be filed, are ready with the Company and the Company is willing to file the same, if so permitted. By exercising the powers conferred on this Tribunal under Section 252 of the Companies Act, 2013, and Rule 87-A of NCLT (Amendment) rules 2017, R/w NCLT Rules, 2016 and basing on the assurance given by the Learned representative for Applicant that Company would be making good all pending statutory compliances on restoration of the Company, it is deemed fit case to order restoration of the Company by RoC (H) in the interest of the Company, its shareholders and the Creditors - By exercising the powers conferred on this Tribunal under Section 252 of the Companies Act, 2013, and Rule 87-A of NCLT (Amendment) rules 2017, R/w NCLT Rules, 2016 and basing on the assurance given by the Learned representative for Applicant that Company would be making good all pending statutory compliances on restoration of the Company, we feel it is a fit case to order restoration of the Company by RoC (H) in the interest of the Company, its shareholders and the Creditors. The name is restored - application allowed.
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2021 (8) TMI 9
Approval of scheme of amalgamation - Section 230-232 of the Companies Act, 2013 - HELD THAT:- Section 230(i) of Companies Act, 2013 contemplates holding of meeting unless 90% of the Creditors gave consent by way of Affidavits to dispense with meetings. In this case, the shareholders and unsecured creditors of the Transferor Company and secured creditors of the Transferee Company have given consent by. way of Affidavits to dispense with meetings Applicant Companies. Section 230(9) of Companies Act, 2013 provides that 90% of the Creditors to give consent for dispensing with convening of meeting. Therefore, the request of the 1st Applicant Company and 4th Applicant Company for conveying meeting unsecured creditors is considered. The meetings are to be convened and held in the manner mentioned below. Various directions regarding convening and dispensation of various meetings issued - various directions regarding issuance of notices also issued. The scheme is approved - application allowed.
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Insolvency & Bankruptcy
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2021 (8) TMI 34
Approval of Resolution Plan - Seeking consideration of claim of Respondent on merits - Section 61 of the Insolvency and Bankruptcy Code, 2016 - For inviting claims, service through paper publication is not proper service - HELD THAT:- In exercise of the powers conferred under Ss. 5, 7, 9, 14, 15, 17, 18, 21, 24, 25, 29, 30, 196 and 208 read with s. 240 of IBC, the Insolvency and Bankruptcy Board of India framed the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (Regulations). Regulation 6 provides the manner of public announcement. There is no allegation against the erstwhile IRP that he has not made a public announcement as per the manner provided in Regulation 6. There is no provision in the Regulations that for inviting claims, the IRP/RP is required to effect personal service. The RP has not made necessary efforts to get the records from ex-management - HELD THAT:- It is not the case of the Respondent that RP has deliberately acted so the rightful creditors may not able to file their claims and thereby they may not become the member of CoC. It is pointed out that the RP has indeed made sincere efforts to procure the records of the Corporate Debtor. The IRP has also filed an Application under Section 19 of the IBC seeking proper direction of the Ld. Adjudicating Authority to the ex-management to provide all the records. This fact is not denied by the Respondent in his reply to the Appeal. Thus, we are unable to hold that the RP has failed to do his bounden duty as assigned in the IBC and Regulations. The RP has not gathered information about the creditors of Corporate Debtor - HELD THAT:- Ld. Adjudicating Authority is not pointing out that what type of efforts RP should make to ascertain the Creditors. Aforesaid finding is a general remark, therefore we cannot hold that the RP has failed to perform his duty assigned in the IBC and Regulations. The RP has hurriedly wrapped up the company with a Resolution Plan - HELD THAT:- It is apparent that the CIRP was conducted by the IRP/RP as per the provisions of IBC and Regulations and there is nothing on record to presume that the IRP/RP have hurriedly wrapped up the company with the Resolution Plan. The RP should not have summarily rejected the claim of the Respondent on the ground that claim has not been filed within time and the Resolution Plan has already been approved by the CoC - HELD THAT:- Whenever any claim is filed after extended period provided in Regulation 12 (2) of the Regulations, the RP should have rejected the claim. The Legislation has not provided any discretion to RP for admitting the claim after the extended period. When the Resolution Plan has already been approved by the CoC and it is pending before the Adjudicating Authority for approval, at this stage, if new claims are entertained the CIRP would be jeopardized and the Resolution Process may become more difficult. Keeping in view the object of the IBC which is resolution of Corporate Debtor in time bound manner to maximize the value, if such request of claimant is accepted the purpose of IBC would be defeated - the Ld. Adjudicating Authority has erroneously directed the RP to consider the claim of the Respondent which is apparently filed after a delay of 287 days, before that the CoC has already approved the Resolution Plan. Appeal allowed.
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2021 (8) TMI 20
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational creditor - existence of debt and dispute or not - case of respondent is that the corporate debtor has made certain payments for which corporate debtor has no proof and the Corporate Debtor Company is being run by a first generation lady entrepreneur and if the Corporate Debtor was pushed into CIRP it would cause great prejudice to the promoter of the company - HELD THAT:- The corporate debtor did not place any FIR before this tribunal to show that the said police report against the said Ankit Gupta was acted upon by police. Even otherwise the Operational Creditor is not responsible for the said acts of the staff member of the corporate debtor as the corporate debtor alone is vicariously liable as a master for the acts of it s employees/servants. Even otherwise the Operational creditor issued demand notice for a balance amount of ₹ 9,50,000/- and even if the alleged discharge of ₹ 6,00,000/- is accepted assuming for a moment without admitting for argument sake, the Corporate Debtor still ows ₹ 3,50,000/- (which is more than 1,00,000/-) which is enough for admission of the company petition. Therefore, it is not legally correct to accept the contentions of the corporate debtor. Keeping in mind its previous conduct coupled with the absence of evidence with regard to the discharge of ₹ 6,00,000/-. There are no warranting grounds to dismissed the company petition and accordingly, the above company petition is admitted by passing the following order - Petition allowed - moratorium declared.
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2021 (8) TMI 18
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The bench notes that the applicant is basically an allottee in the Real Estate project. Therefore, the agreement cited by the Financial Creditor is effectively an allotment letter of the flat with the schedule of the payment of the flat. Further, the return of investment as provided in Clause 10, does not provide for any fixed return but is conditional upon completion of the project. It has also provided that the payment will not be due in the event of force majeure issue. The Bench is clear that the petitioner is an allottee and the flat purchaser in a Real Estate Project as the petitioner has been allotted flat no. 1902 in the said project - Therefore, an allottee in a real estate project is a Financial Creditor. However, under Section 7 for the purposes of initiation of CIRP there is a threshold limit with regard to number of allottee who can jointly file petition to initiate CIRP against the Corporate Debtor. There is no iota of doubt that the applicant in this case who is an allottee and who has applied singly for commencement of CIRP against the Corporate Debtor does not meet the bench mark of jointly filling by 100 allottee or not less than 10% of number of allottee. Therefore, this petitioner filed by the single homebuyer does not qualify as a fit Application as per Section 7 of IBC, 2016 as amended from time to time to be considered under CIRP. This bench dismisses the petition of a single allottee to commence the CIRP against the Corporate Debtor - petition dismissed.
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2021 (8) TMI 17
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - petitioner submitted that even if the respondent is a Government company, CIRP can be initiated against it which is evident from a parallel reading of the definitions of Corporate Person and Government Company under IBC and Companies Act - HELD THAT:- Section 2(45) of the Companies Act, 2013 can be relied upon which defines Government Company as any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company. Section 3(7) of the IBC defines Corporate Person as a company as defined in clause (20) of section 2 of the Companies Act, 2013 (18 of 2013), a limited liability partnership, as defined in clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), or any other person incorporated with limited liability under any law for the time being in force but shall not include any financial service provider. Therefore, from a parallel reading of the definitions of Corporate Person and Government Company under IBC and Companies Act, it can be summarized that the applicability provision of IBC is clear on this issue. There is no specific exemption for Government Companies under the IBC. Section 2(1) categorically states that the Code applies to all Companies incorporated under Companies Act, 2013 or under any other previous Company Law. It is evident that the Corporate Debtor which has taken goods from the Operational Creditor and has admitted the rightful and just dues of the Operational Creditor in its reply to the Demand Notice, CIRP can be initiated against the Corporate Debtor despite being a government owned company. All the requisite conditions for admission of a petition under Section 9 have been found to be fulfilled and therefore, this petition deserves to be admitted - petition admitted - moratorium declared.
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2021 (8) TMI 14
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- This Bench is of the considered opinion that there is no dispute regarding the Corporate Debtor having availed the Loan facility from the Financial Creditor. The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the debt and default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared.
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2021 (8) TMI 10
Exclusion of period of 60 days from the total period of 90 days granted by the Hon'ble Tribunal, thereby extending the CIRP period upto 24.08.2021 - HELD THAT:- Considering the facts and circumstances as averred by the Applicant and Resolution passed by the Committee of Creditors (COC) for exclusion of 60 days period from the 90 days period granted by this Adjudicating Authority vide its order dated 25.03.2021, we are inclined to allow the instant application as there is a strong possibility of either submission and approval of a Resolution Plan by the COC or withdrawal of application for admission under Section 12A of the Code. The primary objective of the Code is to resolve insolvency of a Corporate Debtor so as to allow it to continue as a going concern. Since as per the averments of the Applicant, the resolution of the Corporate Debtor is imminent, the RP is allowed to complete the CIRP process on or before 24.08.2021, failing which, the RP should submit an application under Section 33 of the Code. Application disposed of.
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2021 (8) TMI 7
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - petition dismissed on the ground that a Scheme of Compromise filed by the Corporate Debtor is pending before this Tribunal and the Statement of Account relied upon by the petitioner are not certified as per the Banker s Books of Evidence Act and there was no proof of default - HELD THAT:- On perusal of various emails sent by the Corporate Debtor submitted before this tribunal by the petitioner and as rightly contended by the petitioner the debt and default stands proved in this case and all the pleas raised by the respondent in the reply to the main company petition are not legally sustainable and liable to be rejected. The petitioner also suggested the name Mr. Adesh Kumar Gupta as Interim Resolution Professional and enclosed the consent letter given by the proposed IRP in Form-2. The company petition is complete in all respects - the company petition is liable to be admitted - moratorium declared.
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Service Tax
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2021 (8) TMI 43
Maintainability of petition - availability of alternative remedy of appeal - Section 85 of Finance Act, 1994 read with Rule 8 of Service Tax Rules, 1994 - violation of principles of natural justice - HELD THAT:- This Court is of the considered opinion that the importance of an appeal remedy, at no circumstances, be undermined by the High Court and findings of the appellate authority would be of greater assistance for the High Court for exercise of power of judicial review under Article 226 of the Constitution of India. This apart, adjudication of complete facts by the appellate authority based on the original records and evidences are not only important, the legislative intention is to redress the grievances of the aggrieved person. However, such an exercise cannot be undertaken by the High Court in a writ proceedings. In the event of not providing an opportunity to an aggrieved person to exhaust the appellate remedy, undoubtedly the aggrieved person is not only deprived of an opportunity for complete adjudication of the facts and the grounds of law, but there is a possibility of error, commission and omission by the High Court in view of the fact that the High Court is deciding certain facts only based on the facts filed by the respective parties. Preferring an appeal is the rule. Entertaining a Writ Petition before exhausting the appellate remedy is an exception. Undoubtedly, writ proceedings may be entertained before exhausting the appellate remedy - However, it is to be ensured that there is an imminent threat or gross injustice warranting urgent relief to be granted. Mere violation of principles of natural justice is insufficient to entertain a writ proceedings under Article 226 of the Constitution of India, as every Writ Petition is filed based on one or the other ground stating that the principles of natural justice is violated or statutory requirements are not complied with or there is an illegality or otherwise. The power of judicial review of the High Court under Article 226 of the Constitution of India is to scrutinize the processes through which a decision is taken by the competent authority by following the procedures as contemplated, but not the decision itself. Therefore, the routine entertainment of a Writ Petition by dispensing with appellate remedy is not preferable and such an exercise would cause injury to the institutional hierarchy and the importance attached to such appellate institutions - the finding of such appellate forums would be a valuable assistance for the purpose of exercise of judicial review by the High Court under Article 226 of the Constitution of India. The High Court cannot conduct a roving enquiry with reference to the facts and circumstances based on the documents and evidences. Based on the mere affidavits filed by the litigants, the disputed facts cannot be concluded. The petitioner is at liberty to prefer an appeal in the prescribed format and complying with the procedures contemplated under the Act, before the jurisdictional appellate authority within a period of four weeks from the date of receipt of a copy of this order - In the event of filing any such appeal, the appellate authority shall condone the delay, if any, entertain the appeal and dispose of the same on merits and in accordance with law and by affording opportunity to the writ petitioner, as expeditiously as possible. Petition disposed off.
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Central Excise
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2021 (8) TMI 42
CENVAT Credit - inputs - inputs sold without reversal of the credit as per Rule 3(5) of the CENVAT Credit Rules, 2004 - HELD THAT:- The facts would disclose that the appellant was bonafide pursuing his appeal remedy before the Tribunal in Appeal No. E/20597/2015-SM challenging the order dated 17.11.2014 remanding the case to the adjudicating authority to re-examine the limited issue of the quantum of credit availed. In the meanwhile, the adjudicating authority in terms of the order dated 25.02.2016 granted the relief to the appellant, which forced the appellant to withdraw the appeal of the order DURAG INDIA INSTRUMENTATION PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, BANGALORE [ 2018 (2) TMI 1894 - CESTAT BANGALORE] before the Tribunal - The department challenged the order of the adjudicating authority dated 25.02.2016 before the Commissioner of Central Tax (Appeals-I) who in terms of the order dated 13.10.2017 set aside the order dated 25.02.2016 as the order exceeded the terms of remand and further remitted the case back to the Original Authority to follow the directions passed in Appeal of M/S DURAG INDIA INSTRUMENTATION PVT LTD VERSUS COMMISSIONER OF CENTRAL TAX, BENGALURU WEST [ 2019 (6) TMI 64 - CESTAT BANGALORE ]. Appeal allowed by way of remand.
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2021 (8) TMI 37
Maintainability of appeal - monetary limit involved in the appeal - Applicability of circular dated 22.08.2019 - HELD THAT:- Since the Circular of CBDT dated 22.08.2019 fixed the monetary limit at a sum of ₹ 1 Crore to file an appeal, the present appeal which has a tax effect of ₹ 3,45,203/- is not maintainable. Moreover, there is no challenge to the constitutional validity of the Act or the Rules and no notification/instructions/Order or Circular is held illegal or ultravires. This appeal is dismissed on the short ground of monetary limit.
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2021 (8) TMI 15
Refund claim - supply of Low Sulphur High Flash High Speed Diesel (LSHFHSD) to Indian Navy Claiming exemption under Notification No 64/95-CE dated 16.03.1995 at Sr No 3 - refund claimed on the ground that the supplies were made from the stock of goods which were duty paid - principles of unjust enrichment - HELD THAT:- There is not dispute in respect of the admissibility of the refund claim made by the appellant. Both the authorities have conclusively recorded in respect of the duty paid nature of the goods received from the BPCL and also the fact that the goods were supplied to Indian Navy claiming the exemption under Notification No 64/95-CE. Both authorities also have concluded that the refund claim is not hit by the principles of unjust enrichment enshrined in Section 11B of the Central Excise Act, 1944. Both authorities have restricted the refund claim only for the reason that the duty paid goods received from the M/s BPCL were stored in tank No 5, whereas the supplies to Indian Navy were made from tank No 3 and 5. So they ruled in favour of the refund to the extent of supplies made from tank no 5. From the circular No 804/1/2005-CX dated 04.01.2005, it is quite evident post withdrawal of the facility of warehousing, all the petroleum products cleared from refinery are cleared on the payment of duty and hence there cannot be any issue of intermixing of duty paid and non duty paid petroleum products. The circular very categorically states that all the goods stored in the warehouse from 06.09.2004, are to be duty paid. Since all the goods stored in warehouse are duty paid as per the board circular 2004, the ground on which Assistant Commissioner has proceeded is clearly contrary to this clarification issued by the board. Appellant has supplied the goods to Indian Navy under claim of exemption out of the duty paid stock. In case where the entire stock is deemed to be duty paid, then whether the supply is made from tank 3 or 5 is irrelevant. Assistant Commissioner stating that goods received from M/s BPCL were stored only in tank 5 is of no significance as the goods stored in tank 3 also are duty paid. Irrespective of the tank from which supply has been made Assistant Commissioner did not find any reason to restrict the refund claim. Refund allowed - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2021 (8) TMI 47
Maintainability of appeal - appeal dismissed on the ground of failure to make the mandatory pre-deposit under Section 77(4) of the OVAT Act read with Rule 87 of the OVAT Rules - HELD THAT:- The learned counsel for the Petitioner states that the Petitioner will be prepared to make the above pre-deposit of ₹ 3,25,12,195/- within a period of four weeks with the Opposite Party-Department without prejudice to its rights and contentions and the appeal may be revived before the ACST (Appeals) subject to compliance of the above directions. Subject to the Petitioner depositing with the Department not later than 1st September, 2021 the aforementioned sum of ₹ 3,25,12,195/-, the impugned order dated 19th July, 2021 passed by the Additional Commissioner of Sales Tax (Appeal) Central Zone, Odisha, Cuttack shall stand set aside and the Petitioner s Appeal Case No.AA-106102010000013/2020-21 shall stand revived before the Additional Commissioner of Sales Tax (Appeal) Central Zone, Odisha, Cuttack before whom it will be listed for directions on 8 th September, 2021 - petition disposed off.
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2021 (8) TMI 45
Validity of assessment order - application for interim stay of the disputed tax - appeal filed under Section 57 of the U.P. Value Added Tax Act, 2008 - HELD THAT:- In the facts and circumstances of the case, once a prima facie case is made out, the appellate authority must enter into the merits of the case without calling upon the assessee to discharge the entire liability of disputed tax. The revision is allowed with a direction to the first appellate authority to decide the pending appeal expeditiously and preferably within a period of two months from the date of production of a certified copy of this order.
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2021 (8) TMI 44
Cancellation of petitioner's license - input tax credit - grievance of the petitioner in nutshell is that the licence was cancelled with retrospective effect and further, the licence of the second dealer was also cancelled and such a retrospective cancellation of licences is bad in law - HELD THAT:- This Court is of the considered opinion that the Hon'ble Division Bench placing reliance on the decision in the case of JINSASAN DISTRIBUTORS VERSUS THE COMMERCIAL TAX OFFICER (CT) [ 2013 (4) TMI 615 - MADRAS HIGH COURT] , and by observing that the said decision is squarely applicable to the facts, held that the Writ Court, has set aside the order passed by the Assessing Officer, cancelling the Registration Certificate of the seller with retrospective effect. The Hon'ble Division Bench in clear terms held that the decision is applicable to the facts of the case before it. Such a factual adjudication requires verification and scrutinisation or original records, documents and evidences - in the interest of justice, it would be appropriate that the petitioner must be given an opportunity to adjudicate the facts and circumstances as well as to place the judgment of the Hon'ble Division Bench before the appellate authority concerned for the purpose of redressal of their grievances. These being the principles to be followed, this Court is of the considered opinion that adjudication of facts, application of principles laid down shall be done by the appellate authority by following the procedures contemplated and by affording opportunity to the petitioner. The petitioner is permitted to file appeal to the jurisdictional appellate authority within a period of six weeks from the date of receipt of a copy of this order in a prescribed format and by complying with the provisions of the TNVAT Act - Petition disposed off.
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Indian Laws
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2021 (8) TMI 40
Dishonor of Cheque - rebuttal of presumption - debt claim is enforceable or not - onus shifts back on the complainant to lead further evidence and establish his case - Section 139 of the N.I. Act - HELD THAT:- Admittedly, except marking the cheque as well as the endorsement issued by the Bank, the office copy of legal notice sent to the accused and acknowledgment for having served the notice, the complainant has not chosen to produce any other documents. PW. 1 has been cross-examined with regard to the specific defence taken by the accused. In the present case, it has come on record that the Ganesh Bank of Kurundwad of whose cheque the complainant has relied upon is merged with the Federal Bank in the year 2005-06 and as such, the possibility of the cheque of the Ganesh Bank of Kurundwad being issued in the year 2010 is not acceptable. It supports the defence taken by the accused that in the year 1993, he had issued the cheque in question by way of security and even though he has repaid the loan, misusing the said cheque, the complainant has chosen to file a false complaint against him. The entire material placed on record, the Trial Court has rightly held that the complainant has failed to establish that it is entitled to recover the amount under the cheque in question and it was issued by the accused towards legally recoverable debt and dismissed the complaint - there is no justification to interfere with the impugned judgment and order and consequently the appeal filed by the complainant fails. Appeal dismissed.
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2021 (8) TMI 39
Dishonor of Cheque - rebuttal of presumption about the legally enforceable debt or not - cross-examination of witnesses - preponderence of probablities - Section 139 of the N.I. Act - HELD THAT:- By making that suggestion, the accused, once again, has re-confirmed of availing a loan from the complainant and also issuing a cheque to the complainant. Therefore, it is not a mere through presentation of the cheque and presumption under Section 139 of the N.I. Act, the inference of existence of a legally enforceable debt in favour of the complainant can be drawn, but, by leading cogent evidence also, the complainant has shown that, there existed a legally enforceable debt in his favour which was payable by the accused and in that regard, the cheque in question was given to him. The accused in the cross-examination of PW-1 has also produced a certified copy of the two documents, one is shown to be an agreement dated 19-04-2012 and another is a cheque for a sum of ₹ 7,00,000/- dated 16-01-2013 shown to have been drawn by him as a proprietor of Athithi Residency in favour of one Sri. Lakshman Naik, to show that, the said person by name Sri. Lakshman Naik had filed cases in the Civil Court and that he was favouring the complainant - the complainant, apart from existence of a presumption of a legally enforceable debt in his favour, could able to prove his case by leading cogent evidence, both oral and documentary, but the accused who failed to take any specific defence in the matter, could not even make out a case on preponderance of probabilities. Since both the Trial Court and the Sessions Judge's Court, after analysing the materials placed before them, have rightly convicted the accused for the offence punishable under Section 138 of the N.I. Act and have passed an order of sentence which is proportionate to the gravity of the proven guilt against the accused, the impugned judgments cannot be called as perverse, illegal or capricious, warranting any interference at the hands of this Court. Criminal Revision Petition stands dismissed as devoid of merits.
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