2020-TIOL-NEWS-026 Part 2, Dated: Thursday, January 30, 2020

2020-TIOL-NEWS-026 Part 2 | Thursday January 30, 2020

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DIRECT TAX


	2020-TIOL-187-HC-DEL-IT Gunjan Kawatra Vs ITO In writ, the High Court declines to entertain the writ, since the assessee has statutory remedy of filing appeal before the CIT(A). Also considering that the assessee is present before this court, owing to which she missed her hearing before the AO, the same is postponed. - Assessee's writ petition dismissed: DELHI HIGH COURT 2020-TIOL-168-ITAT-MUM Mohan Thakur Vs ACIT Whether if proceeding u/s 153C has been initiated and subsequently dropped then on similar ground reassessment can not be initiated - YES : ITAT - Assessee's appeal allowed: MUMBAI ITAT 2020-TIOL-167-ITAT-DEL Par Excellence Leasing And Financial Services Pvt Ltd Vs ACIT Whether when very existence of entities paid for share application is doubted then higher degree of proof is required and mere filing of few documents will not prove identity and creditworthiness of parties and genuineness of transaction - YES : ITAT - Assessee's appeal dismissed: DEHI ITAT 2020-TIOL-166-ITAT-DEL SD Polyfilms Pvt Ltd Vs ITO Whether if investee company does not respond to inquiry made by the AO, then onus shifts upon assessee to explain the source and creditworthiness of investee companies - YES : ITAT - Assessee's appeal dismissed: DELHI ITAT 2020-TIOL-165-ITAT-DEL ACIT Vs Vasundhara Flavours Whether in the absence of any documentary evidences being produced by the Revenue to contradict or rebut findings of facts recorded by the CIT(A) in favour of the assessee, claim of deduction u/s 80IC can still be disallowed - NO: ITAT - Revenue's appeal dismissed: DELHI ITAT

GST CASE

2020-TIOL-198-HC-KERALA-GST

Shajahan A M Vs ASST STO

GST - Petitions filed seeking a writ for quashing the notices issued by the respondent demanding GST and for imposition of penalty and also seeking a direction to the respondent to release the vehicle with goods without insisting for payment of amount demanded.

Held: Upon a careful evaluation of the facts and circumstances of the case, it is ordered that the detained goods and vehicles involved in these two cases as per the impugned proceedings shall be immediately released to the petitioner on his furnishing Bank Guarantee for the respective values of demand - 2nd respondent adjudication officer will ensure that the further proceedings pursuant thereto, be adjudicated and finalised after affording reasonable opportunity of being heard to the petitioner without much delay, preferably within a period of 3 to 4 weeks - 2nd respondent should also consider the specific plea made by the petitioner that, even otherwise the maximum tax that could be imposed in a case like this could be 12% and not at the rate of 28% as has been ordered in the impugned proceedings since it is admitted by none other than the 1st respondent in the impugned proceedings that the detained motor cycles are 'used vehicles' and not 'brand new vehicles' and, therefore, the tax imposable could be only at the rate of 12% as per the notification dated 25.1.2018 - said plea of the petitioner should be duly adverted to and considered by the 2nd respondent while passing orders for the finalization of abovesaid proceedings - Petitions disposed of: High Court [para 4 to 6]

- Petitions disposed of: KERALA HIGH COURT

INDIRECT TAX

SERVICE TAX

2020-TIOL-209-CESTAT-ALL

Radhey Krishna Technobuild Pvt Ltd Vs CCE

ST - During the relevant period, the assessee was engaged in providing services not falling under the negative list - During the time of sale of residential units in addition to the consideration for residential unit, the assessee was also collecting some charges from the buyers under 'electric meter main load supply charges' head - The Revenue opined that such charges collected were other than the construction of residential complex service and therefore abatement admissible for construction of residential complex service was not admissible for the said amount collected - Hence duty demand was raised u/s 73 of the Finance Act 1994 - On adjudication, the demand was confirmed and later sustained in the O-i-A - Hence the present appeal.

Held: It is seen that Section 66F(3) of Finance Act, 1994 provides that taxability of a bundled service shall be determined if various elements of such services are naturally bundled in the ordinary course of the business - From the submissions madeit is clear thatcharges for electric meter main load supply were collected along with the consideration for sale of residential unit and they were collected from very person to whom the residential unit was sold and not to any other person and as explained the same was for providing electricity supply during the power failure to the residents of the complex - Therefore, such service is bundled services under Section 66F of the Finance Act, 1994 -Besides, the Final Order of the Tribunal for in the case of Logix Infrastructure Pvt. Ltd. is squarely applicable in the present case wherein it was held that charges collected towards electric substation installation was a bundled service - The assessee also paid around duty with interest which is appropriate amount after taking into consideration the abatement admissible - Hence the balance duty demanded along with interest and penalty, is quashed - Regarding penalty u/s 78 of the Finance Act, the same is not imposable, since all the transactions were reflected in the books of account - Hence there was no suppression on the part of the assessee: CESTAT

- Assessee's appeal partly allowed: ALLAHABAD CESTAT

CENTRAL EXCISE

2020-TIOL-208-CESTAT-KOL

City Rolling Mills Pvt Ltd Vs Commissioner of CGST & CE

CX- Clandestine clearances of finished goods - vide impugned order, demand of CE duty of Rs.5.96 crore confirmed along with interest, equivalent penalty imposed, penalty of Rs.5 crores imposed on ShriPramod Kumar Agrawal, Director of the appellant unit under rule 26 of the Central Excise Rules, 2002 - appeal to CESTAT.

Held: It is evident from the Panchanama that the Kingston make pen-drive was recovered from the possession of the Director of the company, ShriPramod Kumar Gupta -whereas, the appendix to the recovery memo clearly indicates that the documents were retrieved and made relied upon were from HP Pen Drive -so the Bench agrees with the contention of the appellant that the alleged documents were not retrieved from the pen drive recovered from the possession of the Director of the company, ShriPramod Kumar Gupta -in such circumstances, the charges of clandestine removal are based on the documents which do not belong to the appellant company-even if it is presumed that the documents were recovered from the alleged pen-drive, in that case also the provisions of section 36B have to be followed before relying upon the said retrieved data - the department has totally failed to bring evidence as regards to the source of the data alleged to have been stored in the pen-drive -there were 5 computers installed in the office when the Panchanama was drawn and it was found that no incriminating documents or data was present in the said 5 computers -this clearly proves that the department does not have any source data of the said pen-drive and in absence of any certification to support the alleged data of the pen-drive, the said electronic data cannot be relied upon to prove the charges of clandestine removal -hence, demand based on the said alleged pen-drive is not maintainable in the eyes of law and thus liable to be set aside -as regards to the loose sheets, no evidence as to who was the author of the said loose sheets was brought on record by the Department -the data was relied upon in a scattered way and in a manner and style best suited to the department instead of making thorough and concrete evidences -no evidence as regards to purchase of excess raw material, use of excess electricity, deployment of extra labor force to prove the illicit manufacturing and clearance activity has been brought into the record - no evidence as regards to purchase of the raw material, transportation of finished goods, receipt of cash payment etc. has been brought into the record -the Department is solely relying upon the statement of the Director of the company and only some of their employees -the statement of the Director is not conclusive and mere observatory in nature wherein he has stated that it might be possible that some of the entries will not match the corresponding invoices -such a statement cannot be said to be of conclusive proof of clandestine removal in absence of corroborative evidence - similarly, the statement of employees cannot be relied upon when the request of cross-examination has been denied on vague ground -even otherwise, Revenue chose not to examine any witnesses in adjudication, and in such a case their statements cannot be considered as evidence -judgement of G-tech Industries - 2016-TIOL-2749-HC-P&H-CX relied upon -therefore, the Bench sets aside the demand of duty, penalty and interest against the appellant and its Director and allows both the appeals : CESTAT [para16]

- Appeals allowed: KOLKATA CESTAT

CUSTOMS

2020-TIOL-207-CESTAT-ALL

Malhotra Electronics Pvt Ltd Vs CCE

Cus - The assessee is a manufacturer of television sets in which colour picture tubes (CPT) is used as inputs - They were awarded contract by ELCOT (an agency of Government of Tamil Nadu) for supply of CTV sets - On account of acute shortage of CPT in India and late supply of CTV attracted penalty under the contract, hence assessee was forced to import CPT from outside the Country - Assessee thus imported 14 inches and 21 inches CPT from M/s Chunghwa Picture Tubes, Malaysia vide 24 Bill of Entry - SCN was issued invoking extended period of limitation under Section 28 of Customs Act, 1962, directing assessee to show cause as to why declared assessable value of Rs 7,40,33,007/- & Rs 78,82,191/-should not be rejected in terms of Section 14 of Customs Act, 1962 r/w Rule 12 of Customs Rules, 2007 and the same should not be re-determined to Rs 5,99,28,857/- & Rs 72,70,959/- respectively; Subject goods should not be re-assessed and charged to Anti-Dumping duty under Notfn 50/2009 - The Tribunal in the case of M/s PG Electroplast Ltd. - 2019-TIOL-2241-CESTAT-ALL has dealt with the appeal arising out of the same set of facts and circumstances and the same investigations made by the revenue - While dealing with the assessee's pleas, it was held that once the assessments finally done have not been challenged by way of filing an appeal there again, it was not open to the revenue to initiate the proceedings by invoking the longer period of limitation - Inasmuch as the issue stands decided by the above decision, by following the same, the impugned order is set aside: CESTAT

- Appeals allowed: ALLAHABAD CESTAT

HIGH LIGHTS (SISTER PORTAL)

TII

I-T - Revenue authorities directed to examine assessee's representations seeking payment of full amount of interest on refund disbursed: HC

I-T - Provisions of Rule 28(2) of I-T Rules cannot be construed to widen scope of powers to consider assessed, returned or estimated income for period exceeding past 4 years: HC

DTAA - Service tax collected by assessee has no element of income - it is not includible in gross receipts when computing presumptive income u/s 44B: ITAT

DTAA - Korean national who does not have any fixed base in India, has no obligation to withhold TDS on receipts earned from rendering independent technical services: ITAT

TP - Transactions as to outstanding receivables cannot be re-characterized as loan deemed to be advanced to overseas AE: ITAT

TIOL CORPLAWS

Company Act, 1956 - Unsecure creditor cannot claim validation of payment transaction after initiation of winding up without proving that it was in best interest of company in liquidation: HC

Arbitration - When liability to pay and default in repayment is established through evidence and Arbitrator does not demonstrate bias in favour of lender then foreign award passed cannot be questioned: HC

NEWS FLASH


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