PR CIT Vs Kewal Real Estate Developers Pvt Ltd

Having heard the parties, the Supreme Court condoned the delay and dismisses the SLP, thus concurring with the opinion of High Court on the issue of deduction u/s 80IB.

- Revenue's SLP dismissed: SUPREME COURT OF INDIA

2019-TIOL-2454-ITAT-AHM

Adani Infrastructure And Developers Pvt Ltd Vs DCIT

Whether as net interest income exceeds interest expenses, there cannot be any disallowance of interest expenses when no interest expense is claimed in P&L account - YES : ITAT

- Assessee's appeal partly allowed: AHMEDABAD ITAT

2019-TIOL-2453-ITAT-JAIPUR

Albendra Singh Vs ITO

Whether claim of deduction on interest expenditure merits being allowed to the extent of interest income received from various parties - YES: ITAT

- Assessee's appeal partly allowed: JAIPUR ITAT

2019-TIOL-2452-ITAT-MUM

Shreeji Transport Services Pvt Ltd Vs DCIT

Whether if the bill of exchange found during search is dated 20.01.2005 and relates to AY 2005-06 no addition pertaining to it can be made in AY 2006-07 - YES : ITAT

- Assessee's appeal allowed: MUMBAI ITAT

2019-TIOL-2451-ITAT-KOL

Speed And Movers India Pvt Ltd Vs ITO

Whether the provisions of Section 40A come into operation only when payment in cash, in a single day, exceeds the specified limit of Rs 20000/- - YES: ITAT

- Assessee's appeal partly allowed: KOLKATA ITAT

2019-TIOL-2450-ITAT-DEL

Vishnu Apartments Pvt Ltd Vs ACIT

Whether not entertaining the Board of Resolution of a company as a material evidence of integrated construction projects, when computing additional tax on sale, is an error in law and is violative of Principles of Natural Justice - YES: ITAT

- Case remanded: DELHI ITAT

Kabeer Reality Pvt Ltd Vs UoI

GST - Petitioner/Company is owner of a commercial building and is having various tenants in respect of the building in question - the petitioner/Company is registered under the provisions of the CGST Act for carrying on business of renting immovable property and also provides allied services and is a taxable person - that earlier also, an order was passed in respect of recovery of service tax, dues on 03.10.2018, by respondent No.2 directing the tenants to deposit the rent with the State Exchequer, however, after recovery of entire dues along with penalty, the notice was withdrawn on 09.07.2019; that respondent No.1 has again issued a notice to the tenants of the petitioner/Company under Section 79(1)(c) of the Act of 2017 initiating recovery against them in respect of a sum of Rs.44,43,804/- on account of tax, cess, interest etc. payable under the provisions of Section 79 of the Act of 201 - The petitioner/Company has submitted a reply on 15.07.2019 and it's grievance is that the notice/order dated 08.07.2019 is per se illegal and has been issued contrary to the statutory provisions as contained under the Act of 2017Petitioner states that respondent No.2 has not followed the prescribed procedure relating to demand and recovery, as provided under the Act of 2017 - It has also been contended that without determination of tax payable by taxable person under Section 73, no recovery could have been initiated under Section 79 (1)(c) of the Act of 2017.

Held: Undisputed facts reveal that the petitioner has filed GSTR-1 Return under Section 37 of the Act of 2017, however, the petitioner has not filed GSTR-3B Returns, which are to be paid on GST portal based on self assessed transaction value shown in GSTR-1 Returns by the petitioner - There are twin effect of such non-filing of GSTR-3B Return, first is that no revenue is actually transferred to the Government and on the other hand, the persons/tenants, to whom the petitioner has issued invoices, would avail GST credit - GSTR-1 Returns are being filed in accordance with Rule 59 (1) of GST Rules and GSTR-3B Returns are being filed in accordance with Rule 61 sub-rule 3 of the GST Rules - Petitioner has certainly not paid the GST - It is noteworthy to mention that GSTR-1 is declaration of tax liability and GSTR-3B is evidence of actual payment - The petitioner has stated that GSTR-1 cannot be termed or classified as self assessed liability, it is only a declaration made for limited purpose - The said issued stands concluded on account of notification dated 09.10.2019 bearing No.49/2019, wherein an amendment has been made in Rule 61 of the GST Rules with retrospective effect and filing of GSTR-3B has been made compulsory - The aforesaid statutory provision of law makes it very clear that it was mandatory for the petitioner to file GSTR-3B Return. Not only this, bare perusal of the statutory provision as contained under Section 79 of the Act of 2017 and procedure adopted by the respondents reveal that the procedure contemplated under Chapter 15 of the Act of 2017 has been followed as Section 79 (1)(c) falls in Chapter 15 of the Act of 2017 and the same has rightly been invoked - Notices were issued to the tenants, however, notice sent to the petitioner was received unserved and the amount is payable by the petitioner to the Government under the provision of Act of 2017 and respondents have rightly proceeded ahead in the matter by taking appropriate steps for recovering the government dues - The petitioner has contended that in absence of tax determination under Section 73, no recovery could have been ordered in the manner and method it has been done in the present case - Court is of the considered opinion that the tax determination has already been done in the present case, as the petitioner itself has quantified its tax liability under the GSTR-1 Returns - The petitioner's contention that in absence of determination of tax under Section 73 no recovery can be made, is unfounded and in fact Section 73 has got no application in the facts and circumstances of the present case - It has also been contended by the petitioner that the order/notice dated 08.07.2019 is violative of Section 78 of the Act of 2017 - The petitioner's contention is certainly erroneous, as there is no dispute about the quantum of tax liability, action is not being taken in furtherance of any order (adjudicating order) - Revenue is simply pressing upon for actual payment as being declared by the petitioner itself under GSTR-1 - The petitioner has to pay the tax liability assessed by himself by filing appropriate form/challan, which he has not complied with, and thus, the claim of the petitioner that Section 79 of the Act of 2017 can be invoked only after Section 78 of the Act of 2017, is erroneous: High Court [para 28, 30 to 34]

GST - In the present case, there is no necessity to determine the taxable person, as the liability has been self assessed by the petitioner itself - So far as the determination of taxable person in the present case is concerned, the case of revenue rests on the GSTR declaration made by the petitioner itself, and therefore, there was no need of determination of taxable person - Since the liability has already been quantified by the petitioner itself, only attempts are being made for recovering revenue dues under Section 79(1)(c) of the Act of 2017 - It was the petitioner itself, who did not receive the notice issued by the Department, and now, at this juncture cannot blame the Department - The petitioner appears to be a chronic defaulter - Earlier also on 17.03.2018, the petitioner has requested the Commissioner for grant of installment, the same document is also on record and the the respondents have rightly issued notice by taking shelter of Section 79 (1)(c) of the Act of 2017 to the tenants of the petitioner - In the considered opinion of this Court, the tax is being recovered from the petitioner after following due process of law - The petitioner cannot escape his liability of payment of GST under Act of 2017, especially when he has filed GSTR-1 and has quantified the tax payable by him while submitting the GSTR-1 - No reason found to interfere with the action taken by the respondents/Department in the matter - Writ Petition stands dismissed: High Court [para 35 to 37]

2019-TIOL-68-NAA-GST

Director General Of Anti-Profiteering Vs IFB Industries Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges profiteering by the respondent on the supply of the product namely, 'Washing Machine (Elena Aqua VX)' by not passing on the benefit of reduction in the rate of tax on the impugned product, post introduction of GST w.e.f 01.07.2017; applicant relies on two invoices dated 31.05.2017 and 04.08.2017 - DGAP has in its report observed that there was a reduction in the applicable rate of tax in the post-GST period as compared to the pre-GST period; that there was a reduction in the rate of tax in respect of States mentioned at Sr. no. 1 to 16, post introduction of GST w.e.f 01.07.2017 and on that basis the amount of net higher sale realisation due to increase in the base price of the product, despite the reduction in the rate of tax post implementation of GST the profiteered amount is computed at Rs.51,04,002/- and later revised in subsequent report to Rs.67,28,592/- for the period 01.07.2017 to 06.06.2018; that by increasing the base price of the product consequent upon reduction in the tax rate, the commensurate benefit of reduction in tax rate post implementation of GST has not been passed on the recipients - respondent submitted that the manner of computation adopted by the DGAP was incorrect and the question of any profiteering on the said product does not arise; that the computation of profiteering could not be done based on post discount prices since in the pre-GST regime, Central Excise duty was calculated as a percentage of a fixed MRP, but under GST regime, GST was calculated on the basis of the actual price, which was variable; that in case a higher discount was given, then effective tax rate would increase as a percentage of discounted price and would lead to distorted results.

Held: Since it is impossible to compare the actual pre-GST invoices with the actual post-GST invoices state-wise and dealer-wise, therefore, the objection by respondent regarding the average price taken by DGAP for pre-GST period is incorrect - It is also not feasible to check the availability of the pre-GST invoices of the same dealer for same state with the post-GST invoices of the same dealer for same SKU for same State and, therefore, the basis adopted by DGAP is correct - Authority is of the view that section 171 of the Act puts the onus of passing of any benefit of the GST rate reductions or ITC to the recipient on the supplier; that the keyword is "commensurate reduction"; that the law expects the commensurate reduction to the extent of the rate reductions should be given by the respondent; the amount of profiteering has to be calculated by keeping the recipient at the centre and, therefore, the contention of respondent that the amount of profiteering has to be calculated entity-wise is not the correct interpretation of law - inasmuch as one particular recipient may have bought one product from the respondent at a price which he was entitled to pay when the rate of tax was reduced but simultaneously there is another recipient who has paid more than what he was supposed to pay for some another product of the respondent; that the additional benefit given to one recipient cannot be offset with the denial of benefit to another recipient as this is not the spirit of the law - aggregate profiteering has to be computed on the basis of what each consumer has lost due to non-reduction of the prices in a commensurate manner by the respondent - profiteering has to be computed at the level of each invoice and not at the entity level or any consolidated level - from a complete reading of section 171 of the Act, it is amply clear that the total quantum of profiteering by an entity/registrant is the sum total of all the benefits that stood denied to each of the recipients/consumers individually - the intent of the words 'commensurate reduction' is clearly explained by the words 'by reduction in price' - DGAP's computation of the profiteered amount is apt and correct - contention of the respondent that since the instant enquiry was meant only for the State of Kerala hence the inclusion of certain other States in the study and exclusion of some others was unjustified, is untenable in view of section 171(1) and (2) of the CGST Act inasmuch as the section nowhere mentions that the investigation should be done only for the State where complaint filed and not for other States - GST is chargeable on actual transaction value after excluding any discount (conditional as well as unconditional) and, therefore, for the purpose of computation of profiteering, actual transaction value has to be considered - as the price charged from customers is the base price which has been taken by DGAP to arrive at the amount of profiteering, is correct - insofar as the contention that the proceedings were required to be completed within three months from the date of receipt of report from DGAP i.e 06.12.2018, the said contention is incorrect as the DGAP has submitted its last report on 11.06.2019 and vide notification 31/2019-CT dated 28.06.2019, the time period for the Authority to pass the order after receipt of report from DGAP has been increased to six months - the profiteered amount calculated by DGAP of Rs.67,28,592/- is correct - respondent is directed to reduce the prices of his products as per the provisions of rule 133(3)(a) of the CGST Rules, 2017 and deposit the said profiteered amount along with interest @18% - as the rest of the recipients are not identifiable, the respondent is directed to deposit the amount along with interest in the Consumer Welfare Fund of the Centre and the State Governments concerned, in the ratio of 50:50 - amount to be deposited within three months failing which the same is required to be recovered by the Commissioners of the Central and the State GST under the supervision of DGAP and a report on the action taken is to be submitted within a period of four months - penalty is also imposable for contravention of the Act/Rules and hence SCN to be issued accordingly: NAA

- Application allowed: NAA

2019-TIOL-2811-HC-DEL-GST

Sales Tax Bar Association Vs UoI

GST - Petitioners submit that respondents have not fully implemented the isues which were resolved in earlier meetings - Respondent Counsel submits that in place of 'IT Grievances Redressal Mechanism' respondents are in the process of constituting Public Grievance Committees (PGC) at the local and commissionerate level, which would also redress IT Grievances - However, it is not stated as to how and when the said committees would be constituted; what would be the structure and qualification of the persons who would be part of the said grievance committees, and; the mechanism that these committees would adopt to ensure that the grievances are adequately addressed, and do not remain unaddressed - Bench notes that unless such committees have participation of the decision makers, their word may not matter and the grievance may remain unaddressed - Bench, therefore, directs respondents to file an affidavit within two weeks in this regard, listing all the particulars - In any event, till the constitution of the said committees at the local and commissionerate level, the grievances raised by the registered assessees cannot go un-redressed - In the meantime, till the constitution of PGCs, Bench directs that the Chairman and the CEO, GSTN shall be responsible to monitor, and they shall ensure the rederessal of all grievances relating to the GSTN, including IT related grievances in the working of the GSTN network, and to comply with our orders, as well as the aspects on which agreements have been reached and assurances have been given by the respondents; that a status report shall be filed by the Chairman and the CEO, GSTN on the next date with regard to the grievances tickets raised; grievances/tickets addressed and resolved, and; outstanding grievances/tickets - Matter to be listed on 18.12.2019: High Court [para 3 to 5]

- Matter listed : DELHI HIGH COURT

2019-TIOL-2812-HC-SIKKIM-ST

CCE & ST Vs Sikkim Manipal University Of Health Medical And Technological Science

ST - Considering the nature of the Orders-in-Original as well as the orders of CESTAT, it is evident that determination of the question as to whether service tax demand on the accreditation fees received by the respondent as also on alumni fees collected can stand to be levied by the Department or not, arise in these appeals - The substantial questions of law framed by the appellant also demonstrate that the question as to whether the respondent is liable to pay service tax on accreditation fee and alumni fee as collected by SMU very much arises in the appeals - Sub-Section (2) of Section 35L, which was inserted by the Finance (No.2) Act, 2014 with effect from 06.08.2014, makes it abundantly clear that the determination of any question having relation to the rate of duty shall include determination of taxability or excisability of goods for the purpose of assessment - Bench is, therefore, of the considered opinion that the Revenue appeals filed before the Court are not maintainable under Section 35G of the Act of 1944 - Appeals are not maintainable: High Court [para 26 to 29, 32, 33]

- Appeals disposed of: SIKKIM HIGH COURT

2019-TIOL-3556-CESTAT-MUM

CCE Vs Vainguinim Valle Resport

ST - Revenue is in appeal against the order passed by the Commissioner - impugned order is assailed on the ground that the services provided by the respondent to M/s Brittos Amusements Pvt. Ltd. pursuant to the joint venture agreement with M/s Goa Golf Club P Ltd. should fall under the taxable service category of "Support services of business or commerce"; that in view of the negative list of taxable services effective 01.07.2012, respondent was liable to pay service tax.

Held: Period involved is from October 2007 to March 2013 - AA by relying upon the Board Circular 109 dated 23.02.2009 held that there is no relationship of service provider or service receiver between the parties to joint venture agreement and there is no consideration received by either side for rendering service; that the agreement specifically provides that the profit/loss arising out of the business should be shared by both sides; that the department is not contesting specifically the findings of the Commissioner that there is no relationship existing between the service provider and the service receiver and, therefore, the impugned order is legal and proper - no merit in Revenue appeal, hence dismissed: CESTAT [para 3, 4]

- Appeal dismissed: MUMBAI CESTAT

2019-TIOL-3544-CESTAT-DEL

Rural Electrification Corporation Ltd Vs CST

ST - The assessee is a Public sector undertaking engaged in non-banking and other financial services and is duly registered with Service Tax Department for banking and financial services - During audit, it was noticed by Department that it had received an amount from their subsidiary companies namely M/s. REC Power Distribution Co.Ltd. and M/s. REC Transmission Power Co. Ltd. under the description 'Establishment Expenses' and 'Administrative Expenses' and the amount had been shown accordingly in their financial statements such as, balance sheet and profit and loss account - The Department entertained a view that the reimbursement of Administrative and other expenses received by assessee from the subsidiary companies is covered under the category of 'Business Support Services' - From a perusal of the activity undertaken by assessee, it is seen that they had only sent certain number of employees to its subsidiary companies on cost recovery basis - It would not be covered by any activity contemplated in the definition of 'Business Support Service' - Payment of certain amount towards establishment and administrative expenditure for providing certain employees to the subsidiary companies is in the nature of sharing of expenses between two companies and would not fall under any category of taxable service - It can be seen that the activity undertaken by assessee of providing expert man power on deputation basis to the subsidiary companies is akin to the one which has been discussed in the clarification issued by CBEC in F.No. 137/35/2011-ST and it has categorically provided by the Board that such activity can only be classified as manpower recruitment or supply of agency service as defined under Section 65 (105)(k) of the Act - The adjudicating authority has failed to appreciate the instructions issued by the CBEC - Since the SCN has demanded Service Tax under category of 'Business Support Service' and the CBEC has already clarified that such an activity is classifiable under 'Manpower Recruitment or Supply Agency' service, the demand of Service Tax, is not sustainable and same is set aside: CESTAT

- Appeal allowed: DELHI CESTAT

2019-TIOL-3541-CESTAT-CHD

Frontier Agencies Pvt Ltd Vs CCE & ST

ST - The assessee is a service provider to their principal, namely, E.I. Dupont India Pvt.Ltd under an agreement - During audit, it was observed that the assessee was working as super distributor for one major pesticides/insecticides manufacturer and were engaged in marketing and promotion of pesticides/insecticide manufactured by their principal which are taxable service under "Business Auxiliary Service" - Therefore, a SCN was issued to assessee by invoking extended period of limitation to demand service tax from the assessee - After issuance of SCN, the assessee paid the entire amount of service tax along with interest with a penalty equal to 15% of service tax - Thereafter, the matter was contested before the adjudicating authority stating that the assessee is providing Agricultural Extension Services to their principal - By way of impugned order, it was held that the assessee is providing "Business Auxiliary Services" and the demand proposed in SCN was confirmed along with interest and equivalent amount of penalty was also confirmed against the assessee - Said issue has been settled by Tribunal in case of M/s. Frontier Agrotech Pvt.Ltd. - 2019-TIOL-96-CESTAT-CHD wherein it is held that the services undertaken by assessee are agriculture extension services which are exempted from payment of duty - The services rendered by assessee are agriculture extension services which are covered under negative list as per section 65B (4) of FA, 1994 - Therefore, assessee is not liable to pay service tax: CESTAT

- Appeal allowed: CHANDIGARH CESTAT

CENTRAL EXCISE

2019-TIOL-3542-CESTAT-ALL

Giriraj Irosteel Company Pvt Ltd Vs CCE

CX - Assessee was engaged in manufacture of MS Bars and MS Ingots - They entered into an agreement with M/s KIL and as per the said agreement, they were entitled to use trademark 'Kamdhenu' on the goods manufactured by them - In lieu of use of said trademark, assessee was required to pay specified amount per MT along with applicable service tax on the same to M/s KIL after the end of month on the basis of total quantity of goods manufactured by them for which such trademark was used - On the basis of difference between royalty payments reflected in the books of account of assessee and those in the retrieved statement, it appeared to revenue that assessee had paid royalty both through cheque and cash and total royalty paid if calculated would resulted in more quantity manufactured by assessee than reflected in ER-1 return for the months of April, 2008 to September, 2008 - Therefore, a SCN was issued - The fundamental argument is on account of absence of any evidence about the alleged manufacture of goods on which Central Excise duty is demanded - The retrieval of data by Government Examiner of questioned documents only establishes that such data was maintained by M/s KIL - Such maintenance of data by representative of M/s KIL does not establish actual payment by the assessee - No evidence of actual payment has been brought on record by revenue - Further, as held by Allahabad High Court in case of M/s Continental Cement Company - 2014-TIOL-1527-HC-ALL-CX that clinching evidence of nature of purchase of raw material, use of electricity, sale of Final Products, Clandestine removal and the more flow back of funds are required to be established in the case of clandestine removal - Such aspects have not been investigated into and therefore, the ruling by Allahabad High Court in case of Continental Cement Co. are applicable in the present case - Therefore, manufacture of such quantity of goods on which Central Excise duty was demanded is not established - Since Central Excise duty is on manufacture and manufacture is not established, therefore, there is no basis for demand of Central Excise duty - Since the demand is not sustainable, the penalty is on the assessees are not sustainable: CESTAT

- Appeals allowed: ALLAHABAD CESTAT

CUSTOMS

2019-TIOL-3557-CESTAT-MUM

CC Vs Ashapura Minechem Ltd

Cus - s.129D(3) of Customs Act, 1962 - Revenue is in appeal against order dated 31.05.2016 passed by Commissioner(A) - Impugned order was reviewed by the Committee of Commissioners and by order dated 08.09.2016, the said Committee had taken a view that no appeal is required to be filed - subsequently, a newly constituted Committee vide review order dated 08.08.2017 held the impugned order to be not legal and proper - consequently appeal came to be filed before Tribunal.

Held: In the impugned review order, no statutory provisions are mentioned which empower the authorities to again review the order which was already reviewed earlier by the competent authorities - Once a review Committee has taken a decision to not file an appeal before Tribunal, then in such circumstances, they become functus officio and have no power review its decision on re-examination of facts or position of law - it is well settled law that review once done cannot be reopened or revised - appeals filed by Revenue are, therefore, not maintainable on this preliminary ground - further, no power has been granted to the Tribunal to condone the delay in passing the Review order beyond the prescribed time frame - appeal could not have been filed by Revenue beyond the period of four months from the date of receipt of the impugned order - therefore, on the ground of limitation also, the appeals filed are not maintainable - Revenue appeals are dismissed: CESTAT [para 6, 7]

- Appeals dismissed: MUMBAI CESTAT

2019-TIOL-3540-CESTAT-AHM

Balkrishna Industries Ltd Vs CC

Cus - The assessee-company manufactures Tyres falling under Chapter 40 of the CETA 1985 - During the relevant period, it imported 121 consignments of natural rubber under advance license and claimed exemption under Notfn No 96/2009-Cus - The BoE were assessed to zero - The assessee was not permitted to clear the goods without depositing the rubber cess in cash and the same was paid by the assessee under protest - Later, the assessee relied on an order passed by the Commr.(A) in its own case, to the effect that cess is not payable, appealed to the Commr.(A) and claimed refund of such cess paid by it under protest - The assessee submitted CA certificate and other records showing there to be no unjust enrichment - The adjudicating authority sanctioned the refund - Later, the Commr.(A) allowed the Revenue's appeal and directed recovery of the refund amount on grounds that the BoE was neither re-assessed nor assessment was modified in appeal, owing to which the refund was not maintainable - It was also held that a CA certificate by itself was insufficient to establish there to be no unjust enrichment unless such fact was also established in the books of account - Hence the present appeal was filed by the assessee - Meanwhile, the Revenue authorities issued SCN for recovery of sanctioned refund u/s 28(1) with interest u/s 28AA(1) of the Act - Such SCNs culminated into an O-i-O - Hence such order was assailed as well, in the present appeal.

Held - The issue at hand pertains to rubber cess only - The assessee claimed that if there is no duty charged on BoE, there is no question of challenging the assessment - The Commr.(A) held that since the assessment order was not challenged, the refund claim is not maintainable - Considering the contentions raised by the assessee, the judgments in the cases of Aman Medical Products Ltd. and Sesa Goa Ltd. and Whirlpool India Ltd. and Suryalakshmi Cotton Mills also need to be taken into account when resolving the issue at hand - The issue of unjust enrichment too must be considered carefully since the assessee claimed that the refund amount was shown as receivable in balance sheet apart from the CA's certificate - Hence the matter warrants remand to the adjudicating authority for reconsideration of the matter: CESTAT

- Case remanded: AHMEDABAD CESTAT

TP - Concern which is engaged in diversifying field and whose financial segmental is also not available, is unfit for purposes of comparison: ITAT

TPO is not permited to impose penalty u/s 271G if on date of non-compliance of notice as required u/s 92D(3), only AO was having such statutory power: ITAT

TP - Simply because one concern was wrongly not considered by taxpayer as comparable, cannot act as deterrent for claiming same as comparable and be considered for evaluation: ITAT

TIOL CORPLAWS

IBC - Corporate Debtor undergoing insolvency can access GST Net Portal Account to clear current tax liability in order to continue as going concern: NCLT

IBC - NCLT is obligated to dismiss insolvency application of operational creditor if debtor has raised dispute prior to issuance of demand notice : NCLAT

Companies Act - Existence of debt in last filed balance sheet is not sufficient reason to restore name of company to RoC in absence of business assets or regular ITR filings: NCLAT