2021-TIOL-384-ITAT-MUM

DCIT Vs Pfizer Products India Pvt Ltd

Whether 2nd proviso to sec. 40a(ia) is retrospective– YES: ITAT

- Revenue's Appeal dismissed: MUMBAI ITAT

2021-TIOL-383-ITAT-MUM

Kotak Alternate Opportunities India Vs ACIT

Whether penalty u/s 271(1)(c) for furnishing inaccurate particulars of income can be imposed when suo-moto disallowance u/s 14A is made on a purely estimate basis - NO: ITAT

- Assessee's appeal allowed: MUMBAI ITAT

2021-TIOL-382-ITAT-DEL

Carissa Investment Pvt Ltd Vs ACIT

Whether addition u/s 68 can be made merely because creditors are held as ingenuine in initial assessment year, but the same creditors are accepted as genuine creditors in subsequent AY - NO: ITAT

- Assessee's appeal allowed: DELHI ITAT

2021-TIOL-381-ITAT-DEL

Besto Electronics Pvt Ltd Vs ACIT

Whether disallowance of such interest expenditure can be made which is never claimed by the assessee as an expenditure in the return of income - NO: ITAT Whether perquisites in the form of rent free accomodation to the Director of the company can be allowed as business expenditure - YES: ITAT

- Assessee's appeal partly allowed: DELHI ITAT

2021-TIOL-380-ITAT-MUM

Associated Container Line Pvt Ltd Vs DCIT

Whether disallowance u/s 14A r.w.r. 8D can be made when all the investments are made on internal accruals and no borrowings were made for making any investments - NO: ITAT

- Assessee's appeal allowed: MUMBAI ITAT

Durga Projects And Infrastructure Pvt Ltd

GST - On the question relating to applicability of tax on the work executed under a Joint Development Agreement with a land owner, Appellant had sought a ruling from the AAR and an order was pronounced on 25 July 2019 - Appellant had filed an application for rectification of an alleged mistake (ROM) in the said order but the same was rejected vide order dated 11 September 2020, in terms of Section 98(2) of the said Act for the reason that the lower Authority had considered all the submissions and facts and pronounced a ruling on all questions of the applicant and there was no error/mistake which was apparent on record - It is against this order that an appeal has been filed before the Appellate authority.

Held:

+ The procedure for rectification of mistake is akin to an administrative function wherein mistakes which are apparent on record are corrected by the Authority which passed the order.

+ On the other hand, the proceedings in appeal in terms of Section 100 of the CGST Act are judicial proceedings wherein the type of order which can be appealed against and the time period for filing the appeal are clearly laid down. Therefore, Appellate Authority holds that the order passed by the lower Authority rejecting the ROM application is not an order which can be appealed before the AAAR.

+ The question whether there is any merger in a case where the authority has passed an original order and subsequently reconsidered the matter and passed another order, has been dealt extensively by the Hon'ble High Court of Karnataka in the case of Kothari Industrial Corporation vs Agricultural Income Tax Officer.

+ It is clear that even in cases where a rectification of mistake application is admitted and a mistake apparent on record is corrected, the original order is not set aside. The original order remains on record and only the mistakes are corrected therein. The principle of doctrine of merger will not apply in such cases.

+ Any appeal can be made only against the original order which will be read together with the correction made in the rectification order. In this case, the rectification application was not admitted as there was no error apparent on record and hence, the original order stands without any changes. The ROM rejection order does not merge with the original advance ruling order. The original advance ruling stands without any corrections.

+ The appeal should have been filed by the Appellant against the advance ruling order dated 25-07-2019 within the period of 30 days from the date of communication of the said order or such extended period as permitted in terms of the proviso to Section 100(2) of the CGST Act.

+ The appellate Authority being a creature of the statute is empowered to condone a delay of only a period of 30 days after the expiry of the initial time period for filing appeal. And is not empowered to condone any delay beyond what the statute permits.

+ Held that the appeal filed against the ROM order KAR ROM 03/2020 dated 11-09-2020 is not maintainable in as much as the impugned order is not an appealable order under Section 100 of the CGST Act, 2017.

+ Also held that the ROM rejection order dated 11-09-2020 does not merge with the original advance ruling dated 25-07-2019. Since the appeal is not maintainable, the question of addressing the issues raised in appeal as well as the condonation of delay application do not arise.

-Appeal dismissed : AAAR

Yulu Bikes Pvt Ltd

GST - AAR by its order dated 13.10.2020 held that Renting of e-bikes/bicycles without operator cannot be classified under SAC 9973 - Leasing or rental services without operator and Sl. No. 17(viia) of Notification no. 11/2017 CT(R) dated 28th June 2017 as amended is not applicable to the instant case - appeal to AAAR.

Held: Agreement provides the rider access to use the vehicles (e-bikes and bicycles) - Once access is provided, the rider uses the vehicle - However, while using such vehicle, there is no transfer of any interest in the vehicle in favour of the rider - The vehicle continues to be in possession of the transferor - What is used by the rider is the service which is provided by the Appellant - The rider never gets the possession of the vehicle - Getting access to use the vehicle does not tantamount putting the rider in possession of the vehicle - Except having access to the facility which the Appellant is providing by virtue of possessing such goods, no such right in the goods is transferred to the rider - Providing access does not amount to right to use goods - From the terms of the User Agreement, it is seen that the vehicles (e-bikes and bicycles) are always in the physical control and possession of the Appellant at all times and there is no transfer of right to use such goods - What is permitted under the User Agreement is a permission to have access to the vehicles and use the same in designated regions / are as for the designated period of time - In other words, the Appellant retains the effective control of the goods in all respects - Therefore, there is no transfer in the right to use the goods and in the absence of any such transfer of the right to use the goods, the Appellant does not get covered under entry Sl. No 17(iii) of the Rate Notification - The appropriate correct entry is SL. No 17(viia) i.e Leasing or renting of goods and the rate of tax will be the same rate of tax as applicable on supply of like goods involving transfer of title in goods - Held that Renting of e-bikes/bicycles without operator is classifiable under SAC 9973 - Leasing or rental services without operator and rate of tax is as applicable under entry Sl.no. 17(viia) of Notification no. 11/2017 CT(R) dated 28th June 2017 as amended is applicable to the instant case - That the rate of tax for renting of vehicles would be applied as the same rate applicable to the respective vehicles as mentioned above viz. 5% for electric vehicles (e-bikes i.e. Miracle) and 12% for bicycles (Move) - AAR order set aside: AAAR

-Appeal allowed : AAAR

2021-TIOL-07-AAAR-GST

S A Safiullah And Company

GST - Appellant is engaged in trading of Areca Nuts/Betel Nut under the name and style of 'Nizam Pakku' and the said brand is owned and registered in favour of the Appellant - Nizam Pakku is manufactured by M/s Azam Laminators P Ltd. and sold exclusively to the appellant, which is marketed by the appellant through dealers and distributors network - Appellant had made an application to the Original Authority (AAR) on the following question viz. 'Whether the Nizam Pakku bought and sold by the appellant is classifiable under Chapter heading 0802 8030 of the Customs Tariff and hence attract 2.5% CGST as per Sr. no. 28 of Schedule I of Notification 1/2017-CTR and equal rate of SGST? - AAR held that 'Nizam Pakku' traded by the appellant merits classification under Chapter 0802 8090 of the Customs Tariff and attracts 6% CGST as per Sl. no. 15 of Schedule II under notification 1/2017-CTR and 6% SGST - Aggrieved by the above decision, specifically on the issue of rate of tax, the appellant has filed the present appeal.

Held: The rate in respect of HSN 0802 is available in three entries (Sl. no. 28, 29 of Schedule I and Sl. no.15 of Schedule II) of Notification 01/2017-CTR and under Sl. no. 49 of 02/2017-CTR - Entry covered under notification 02/2017-CTR covers all fresh nuts, whether or not shelled or peeled falling under 0802 and exempts the same - The dried nuts are listed under 01/2017-CTR - 4th GST Council meeting has decided on a clear mandate for fixing the rates of goods under GST and as per this mandate, the goods which suffered tax (cumulative) in the band of 3% to 9% are to be taxed @5% GST - State Jurisdictional officer has stated that the scented betel nut under the erstwhile TNVAT Act, 2006 was taxable at 5% vide Serial no.6 of Part B of Schedule I to TNVAT Act, 2006 - The Central Excise duty on the said product under CETH 0802 was "Nil" and thus the cumulative tax incidence on the said product in the pre-GST regime is 5% only - The 14th GST Council Meeting which approved the proposed rates has in respect of Dried Areca Nuts agreed to tax it @5% considering that the weighted average of the combined tax incidence in the pre-GST regime would not be more than 5% and accordingly the rate notifications have been issued - While Sl. no. 28 of Annexure-I of the notification notifies 'Dried Areca nuts, whether or not shelled or peeled' falling under 0802 to be taxed @5%, Sl. no. 15 of Annexure-II of notification provides the rate of 12% in respect of 'Other nuts, dried, whether or not shelled or peeled, such as Almonds, Hazelnuts or filberts (Coryius spp.), walnuts, chestnuts (Castanea spp.), Pistachios, Macadamia nuts, Kola nuts (Cola spp.) (other than dried Areca nuts)' - Thus, Appellate Authority finds that the 'Dried Areca Nuts' are to be taxed to GST at the rate of 5% only as the words of the description in the notification 01/2017-CTR is clear inasmuch as 'Dried Areca nuts whether or not shelled or peeled' are to be subjected to GST @5% and simultaneously 'Other Nuts (other than Areca nuts)' are to be taxed @12% - Terms 'betel nut' and 'Areca nut' are the same and used interchangeably and, therefore, it is held that the applicable tax rate for the product is @5% only - Held that 'Nizam Pakku' is classifiable under CTH 0802 8090 and is leviable to 2.5% CGST as per Sl. no. 28 of Annexure-I of 01/2017-CTR and @2.5% SGST under Sl. no. 28 of Annexure-I of corresponding State notification: AAAR

-Appeal allowed : AAAR