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2020-TIOL-NEWS-040 | Monday February 17, 2020 |
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Dear Member,
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TIOL PRIVATE LIMITED.
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DIRECT TAX |
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2020-TIOL-373-HC-MP-IT
PR CIT Vs Bhomiyaji Land and Finance Company
Whether merely based on retracted statement of the partner, without any documentary evidence, addition can be made u/s 69 for undisclosed income - NO : HC
- Revenue's appeal dismissed: MADHYA PRADESH HIGH COURT
2020-TIOL-252-ITAT-MUM
Tata Sons Ltd Vs DCIT
Whether it is a fit case for remand if assessee's appeal is dismissed by the CIT(A), solely on grounds that the same was not filed electronically - YES: ITAT
- Case remanded: MUMBAI ITAT
2020-TIOL-251-ITAT-DEL
Alcatel Lucent India Ltd Vs ACIT
Whether reassessment initiated for clerical correction of the original order based on complete disclosure of material facts by the assessee is valid - NO: ITAT
- Assessee's appeal allowed: DELHI ITAT
2020-TIOL-250-ITAT-MAD
Mahindra World City Developers Ltd Vs ACIT
Whether disallowance made u/s 14A is sustainable where the assessee does not earn any exempt income in the relevant AY - NO: ITAT
- Asessee appeal partly allowed: CHENNAI ITAT
2020-TIOL-249-ITAT-KOL
Trimex Fiscal Services Pvt Ltd Vs PR CIT
Whether where the CIT carries out an enquiry on the issue of fair market value of shares of a private company u/s 56(2)(viib) of the Income Tax Act, 1961 & finds that two views are possible, no usurpation of jurisdiction u/s 263 is needed if the AO's view is also a plausible view - YES: ITAT
- Assessee's appeal allowed: KOLKATA ITAT
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GST CASE |
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2020-TIOL-383-HC-CHHATTISGARH-GST
Mangal Commercial Pvt Ltd Vs UoI
GST - Writ petitioners have filed review petitions contending that there are some inadvertent errors in the common judgment dated 20.11.2019 passed by the Court.
Held: Review Petitioners have never pleaded in the review petitions that they had made any further contentions with reference to the initial challenge raised against Annexure P/1 Circular or as to the plurality of the Proper Officers appointed throughout the country when the cases were listed and heard by this Court either on 22.10.2019 or on 06.11.2019 - In fact, they were only seeking for apology of the Court, expressing regrets for not bringing the correct position (with reference to the Corrigendum Notification dated 29.07.2019) to the notice of this Court and to drop further action, if any - It is quite evident that the attempt of the Review Petitioners is only to have a "re-hearing" of the matter, which is not permissible in exercise of the power of review - The 'review power' can be invoked only when there is any 'error apparent on the face of record' and it is not a substitute for appeal as made clear by the Apex Court - because of non-bringing of the 'Corrigendum Notification' dated 29.07.2019 to the notice of this Court and in making incorrect submissions, much of the Court's time has already been wasted by the Petitioners, which could have been utilised for other fruitful purposes - Now, the Review Petitioners virtually want to have a 're-hearing' - Such course and conduct of the Review Petitioners cannot but be deprecated - Review petitions are dismissed - Bench reluctantly refrains from imposing any cost upon the Review Petitioners: High Court [para 10 to 12]
- Petitions dismissed:
CHHATTISGARH
HIGH COURT
2020-TIOL-382-HC-MAD-GST
Refex Industries Ltd Vs Assistant Commissioner of CGST & CE
GST - On a reference, the third Judge had by order dated 19th December 2019 - 2020-TIOL-358-HC-MAD-GST held that though the liability fastened on the assessee to pay interest is an automatic liability, quantification of such liability certainly needs an arithmetical exercise after considering the objections if any, raised by the assessee - Petitioner contends that Section 50 that provides for levy of interest on belated payments would apply only to payments of tax by cash, belatedly, and would not stand triggered in the case of available ITC, since such ITC represents credit due to an assessee by the Department held as such.
Held: Specific question for resolution is as to whether in a case such as the present, where credit is due to an assessee, payment by way of adjustment can still be termed 'belated' or 'delayed' - The use of the word 'delayed' connotes a situation of deprival, where the State has been deprived of the funds representing tax component till such time the Return is filed accompanied by the remittance of tax - The availability of ITC runs counter to this, as it connotes the enrichment of the State, to this extent - Thus, Section 50 which is specifically intended to apply to a state of deprival cannot apply in a situation where the State is possessed of sufficient funds to the credit of the assessee - In my considered view, the proper application of Section 50 is one where interest is levied on a belated cash payment but not on ITC available all the while with the Department to the credit of the assessee, the latter being available with the Department is, neither belated nor delayed - argument that ITC is liable to be reversed if it is found to have been erroneously claimed, and that it may be invalidated in some situations, does not militate with my conclusion - availment and utilization of ITC are two separate events - Credit will be valid till such time it is invalidated by recourse to the mechanisms provided under the Statute and Rules - proviso inserted to Section 50(1) seeks to correct an anomaly in the provision as it existed prior to such insertion - same is to be read as clarificatory and operative retrospectively - Writ Petitions are allowed and the impugned notices are set aside: High Court [para 12, 13, 15, 17]
- Petitions allowed:
MADRAS
HIGH COURT
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MISC CASE |
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INDIRECT TAX |
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SERVICE TAX
2020-TIOL-378-HC-KOL-ST
General Security And Information Services Vs CCGST & CX
ST - The assessee claimed to be rendering watch & ward service, which is not a taxable service - The assessee claimed to be functioning as facilitators for directing passengers through automated ticket gates, to guide commuters in purchasing tickets, carrying baggages & in other miscellaneous jobs for overall upkeep of the premises - The assessee claimed that such services had nothing to do with general purpose security duty - The Revenue maintained that the assessee was engaged in rendering security agency service - Duty demand was raised under such heading - Apart from the issue pertaining to nature of service being rendered, the assessee also alleged violation of the principles of natural justice.
Held - Points of law concerning breach of principles of natural justice are an important element of administrative law - It is largely procedural in nature - If a proper procedure is not followed, the proceedings & impugned order would be in breach of the principles of natural justice and would be liable to be quashed - Considering the findings of the Tribunal, there are no proper reasons given in support thereof - It has not taken into account the certificate issued by the metro railway, certifying the nature of service rendered by the assessee - Moreover, the question of limitation has not been considered by the Tribunal in its proper perspective - The question of limitation is a mixed one involving both facts and law - The assessee pleaded that the Revenue was aware of the transactions, relying on earlier SCN issued for the same issue - Hence everything was in the Revenue's knowledge and there was no suppression of any fact - Such question and other factual issue regarding suppression of facts ought to have been examined in detail - Where the Tribunal's order is being assailed on grounds that it breached the principles of natural justice and is in ignorance of the law on limitation, then it cannot be said that the appeal relates to classification of goods or its valuation or rate of duty - The appeal is neither directly or indirectly related to such questions - Hence the Tribunal's order is set aside - As the matter involves mixed questions of facts and law, the matter warrants remand to the Tribunal for fresh consideration: HC
- Case remanded: CALCUTTA HIGH COURT
CENTRAL EXCISE
2020-TIOL-302-CESTAT-MUM
Anand I Power Ltd Vs CCGST
CX - The assessee-company manufactures Piston Rings - It availed Cenvat credit of tax paid on Renting of Immovable Property at its branch offices in Mumbai & New Delhi - During the relevant period, the assessee held some amount of credit as being inadmissible - SCN was issued proposing duty demand, along with interest and equivalent penalty - On adjudication, the proposals in the SCN were confirmed with 50% penalty u/r 15(2) of CCR 2004 r/w Section 11AC, with option of reduced penalty @ 25% being offered if penalty is paid within 30 days - Such findings were sustained by the Commr.(A) - Hence the present appeal.
Held - The Commr.(A) rejected appellants appeal on the ground that sale of goods that had taken place from the immovable property taken on rent was situated away from the place of removal - Further, the assessee acknowledged to have registered as an ISD - Therefore, availing total credit on renting services in the factory was not convincing as the rented premises were used for marketing and sale of goods manufactured in both the units of appellant's factory - It was also noted that assessee had not disclosed about availment of such Cenvat Credit on renting services in its ER-1 Returns and ultimately he endorsed the findings of the adjudicating authority in confirming the demand, interest and penalty - However, considering the decision of this Tribunal in the case of I.P. Ring Ltd such renting of immovable property services taken to be used as branch office for procurement of orders, delivery of goods, repair and maintenance service as well as for marketing purpose are admissible credits for both pre and post amendment period covering the entire disputed period in the appeal - Moreover, the assessee had replied to the query of the Revenue concerning its registration as ISD in which case, as an input service distributor, it had the discretion to distribute the inputs but the Commr (A) had not believed its reply by observing that assessee was using the rented premises for sale of goods and marketing of products being manufactured in two units of assessee and such issue of ISD registration was not agitated in the SCN - What is more important is that the Commissioner had accepted the assessee's contention that it was using the rented premises for "marketing" purposes which is in conformity to Rule 2(l) of Cenvat Credit Rules that clearly covers "advertisement or sales promotion" within the definition of input services - Therefore, the assessee is eligible to avail the credits and its specific non-reflection in ER-1, could be due to non-availability of such specific narration in the format meant for filing of ER-1 returns itself: CESTAT
- Assessee's appeal allowed: MUMBAI CESTAT
2020-TIOL-301-CESTAT-KOL
Anmol Stainless Pvt Ltd Vs CCGST & CE
CX - The assessee-company is engaged in manufacturing Cold Rolling of thick stainless sheets, slitting in small sizes & making stainless pipes classifiable under CTH 7304 9000 of the First Schedule to the CETA 1985 - An SCN was issued, alleging contravention of the provisions of Rule 16 of the CER 2002 and certain Rules of CCR 2004 r/w Section 2(f) of the CEA 1944 - The issue arose in respect of three BoE filed for import of CRSS Coil from Hong Kong - On adjudication, cenvat credit was disallowed and duty demand was raised for reversal of the same & penalty was imposed on the MD of the assessee-company - On appeal, the Commr.(A) sustained the demands but quashed the penalties - Hence the present appeal.
Held - The short issue that arises for consideration in the instant appeal is with respect to whether the assessee has already reversed the amount of Rs.11,06,691/- as Cenvat credit or not by making an entry in the books of accounts on 30/06/2017 and thereby reducing the amount of Cenvat credit to be transferred in TRAN 1 form in GST - On perusal of the entire case records, it is seen that the assessee has done the said reversal in the books of accounts and has thereby not carried the said Cenvat credit into GST regime - Further, the GST regime has been introduced w.e.f. 01/07/2017 - Thus, there is no further reversal required in the matter - Hence the demand as confirmed by the Commr. (A) in this regard merits being quashed - Besides, since the assessee had sufficient credit balances, in any case, there would be no loss of revenue to the exchequer - Therefore, the imposition of interest in the present proceedings cannot sustain and hence, the same is set aside - The Revenue also filed appeal against the dropping of penalty imposed on the assessee - The appeal is covered in terms of the litigation policy and merits being dismissed as such: CESTAT
- Assessee's appeals allowed: KOLKATA CESTAT
2020-TIOL-300-CESTAT-AHM
Unicorn Packers Pvt Ltd Vs CCGST
CX - The assessee-company is engaged in manufacturing Chewing Tobacco and paid duty as per the Chewing Tobacco & Un-manufactured Tobacco Packing Machines (Capacity Determination & Collection of Duty) Rules, 2010 - As per the same, the assessee is to pay duty on compounded levy basis - Subsequently, the rate of duty was revised - As the revision was on the lower side, the assessee was entitled for refund on pro-rata basis for the relevant period as per the 5th proviso to Rule 9 of Chewing Tobacco & Un-manufactured Tobacco Packing Machines (Capacity Determination & Collection of Duty) Rules, 2010 - The assessee accordingly took re-credit of the differential duty - The Revenue raised duty demand on grounds that the assessee is not entitled to take credit suo motu - Hence the present appeal.
Held - Considering the issue at hand, it is found that Chewing Tobacco & Un-manufactured Tobacco Packing Machines (Capacity Determination & Collection of Duty) Rules, 2010 have explicitly provided that in case of revision of rate of duty, the Revenue should itself refund the differential duty paid which is in excess of the revised rate - As per the 5th proviso, there is no need for filing any application - The Revenue is obliged to disburse refund by the 20th day of the following month - Hence the assessee's action in taking suo motu credit is in accordance with the 5th proviso to Rule 9 of Chewing Tobacco & Un-manufactured Tobacco Packing Machines (Capacity Determination & Collection of Duty) Rules, 2010 and does not suffer from any illegality - Hence the order raising demand for differential duty and imposing penalty is quashed: CESTAT
- Assessee's appeals allowed: AHMEDABAD CESTAT
CUSTOMS
2020-TIOL-379-HC-MAD-CUS
Maruvur Arasi Logistics Pvt Ltd Vs CC
Cus - During the relevant period, intelligence was gathered by the SIIB of the Customs Department regarding alleged mis-use of Notfn No 46/2011 and Notfn No 69/2011 by several importers in the import of goods falling under Chapter 72 of the Customs Tariff Act, by claiming exemption wrongly and paying concessional rate of duty as against the actual rate - An SCN was issued proposing to impose penalty for abating the imports made without compliance of various regulations of CHALR 2004 - Copies of the SCN were also issued to Commissioner, Adjudicating Unit, the Deputy/Assistant Commissioner of Customs, Customs Broker Section, Master file and notice board - Based on the information, an SCN was issued proposing to revoke the petitioner's license and to impose penalty - Such findings were subsequently upheld, thus leading to the present appeal.
Held - The issue at hand is whether the SCN issued by the SIIB would constitute an 'offence report' for the purpose of Regulation 20(1) of the CHALR - In the present case a comparison of the SCNs issued by the SIIB on the one hand and the Revenue on the other makes it very clear that the latter SCN has been issued only based on the information culled by the SIIB - in fact some portions of SCN dated 27.07.2017 appear to have been bodily lifted from the earlier SCN - Clearly it is the SCN issued by the SIIB that forms the information/'offence report' on the basis of which SCN dated 27.07.2017 has been issued - This argument of the petitioner is rejected - The second argument concerns the timelines stipulated in Regulation 20(5) which require the Assessing Authority, upon conclusion of the enquiry, to prepare a report of the enquiry and after recording his findings, to submit a report within a period of 90 days from date of issue of notice - The enquiry report dated 02.11.2017 is beyond the period stipulated in Regulation 20(5) - The petitioner's arguments on this ground, is accepted: HC
- Writ petition partly allowed: MADRAS HIGH COURT
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