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2021-TIOL-NEWS-193| August 16, 2021
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INCOME TAX

2021-TIOL-1684-HC-MAD-IT

Karti P Chidambaram Vs Addl.CIT

Whether taxpayers being 'other persons' u/s 153 require opportunity to rebut contentions raised against them from and out of materials collected from premises of 'searched person' - YES: HC

- Assessee's petition allowed: MADRAS HIGH COURT

2021-TIOL-1683-HC-KAR-IT

CIT Vs Karnataka Power Transmission Corporation Ltd

Whether adjustment of dues upon direction of State government which was acknowledged as debt by such government, does not attract Sec 41 - YES: HC

- Revenue's appeal dismissed: KARNATAKA HIGH COURT

2021-TIOL-1682-HC-KAR-IT

M George Joseph Vs DCIT

Whether exemption u/s 54 is dependant on the date of acquisition of the property and not on the date of payment made in respect of such property - YES: HC

- Assessee's appeal allowed: KARNATAKA HIGH COURT

2021-TIOL-1332-ITAT-DEL

ACIT Vs Arvind Kumar Arora

Whether additions framed u/s 41(1) are sustainable where no defects are found in the assessee's books of accounts & where details of purchases vis-a-vis the sales as produced by the assessee are not doubted by the AO - NO: ITAT

- Revenue's appeal dismissed: DELHI ITAT

2021-TIOL-1331-ITAT-DEL

Mason Infrastructure Pvt Ltd Vs DCIT

Whether money borrowed to advance it to subsidiary for business purpose qualifies for deduction of interest if it is not utilised by assessee for personal benefit – YES: ITAT.

- Assessee's Appeal allowed: DELHI ITAT

2021-TIOL-1330-ITAT-DEL

ACIT Vs Nav Bharat International Ltd

On appeal, the Tribunal considered the evidence at hand and held there to be no doubt that the wind power generation plant was commissioned during the FY in consideration & so the assessee was eligible to claim depreciation which was rightly allowed by the CIT(A).

- Revenue's appeal dismissed: DELHI ITAT

2021-TIOL-1329-ITAT-DEL

Society for Institute for Professional Studies Vs JCIT

Whether addition u/s 68 is permitted when taxpayer has discharged his onus in relation to identity of creditors and genuineness of transactions - No: ITAT

- Assessee's Appeal Allowed: DELHI ITAT

 
GST CASE

2021-TIOL-1687-HC-KERALA-GST

Sudhish PP Vs STO

GST - The petitioner, a goldsmith by profession carried with him different types of gold ornaments for the purpose of display and demonstration to the jewellers - However, respondent inspected the bag carried by petitioner and the petitioner instantaneously disclosed that the bag contains 233.540 gms of gold ornaments for the purpose of displaying and not for sale - The respondent straight away issued notice in the form of GST MOV-10 for confiscation of goods and levy of penalty under Section 130 of Central Goods and Service Tax Act, 2017 - The petitioner is only required to show cause within seven days of notice as to why action under Section 130 of CGST Act should not be taken against them - No doubt, while taking action under Section 130 of the said Act, proper officer is enjoined with duty to come to the conclusion that the act on the part of petitioner is only with an intent to avoid payment of tax, but that has to be decided by proper officer on consideration of entire materials before him and that too, after hearing the petitioner - The petitioner has to approach the proper officer for making his stand clear and to seek audience before him - The Court cannot give its own finding without there being any finding by proper officer in the light of SCN and reply thereto by the affected person: HC

- Petition dismissed: KERALA HIGH COURT

2021-TIOL-1686-HC-CHHATTISGARH-GST

Cheema Local Carrier And Contruction Vs Asstt. Commissioner of SGST

GST - Challenge in this petition primarily is to the provisional attachment of the Bank Account, cancellation of the GST registration certificate and blocking of the Input Credit ledger.

Held: After attachment of the bank account a reply was filed by the petitioner on 22.03.2021 and it appears the same has not been decided, therefore, prima facie it would be non-compliance of Rule 159(5) of the CGST Rules - So also, as regards cancellation of registration, in the order, prima facie the reasons have not been assigned as mandated under Rule 21 of the CGST Rules - Since the business of the petitioner stands closed for attachment of the bank account and cancellation of registration, strict compliance is required as per the Act and Rules - Attachment of bank account which was made as per the order dated 17.02.2021 shall remain stayed and further the order for cancellation of registration dated 26.03.2021 shall remain stayed, till the next date of hearing - High Court decision in Valerius Industries = 2019-TIOL-2094-HC-AHM-GST relied upon - Matter to be listed in the second week of September, 2021: High Court

- Interim relief granted: CHHATTISGARH HIGH COURT

2021-TIOL-1685-HC-MAD-GST

Pr.CCGST & CE Vs Achin Aggarwal

GST - Petitions have been filed by Revenue to cancel the anticipatory bail granted to the respondent - only ground raised by the petitioners to cancel the anticipatory bail is that the respondents / accused did not comply the condition even till today.

Held: While granting anticipatory bail to the respondents, Court had specifically ordered that if the respondents / accused failed to comply with the conditions imposed by this Court, the anticipatory bail granted to the respondents shall stand automatically cancelled - Accordingly, the Anticipatory Bail petitions filed by the respondents stand dismissed - The petitioners are at liberty to proceed in accordance with law against the respondents - Petitions disposed of: High Court [para 4]

- Petitions disposed of: MADRAS HIGH COURT

2021-TIOL-193-AAR-GST

Uralungal Labour Contract Coperative Society Ltd

GST -  Indian Institute of Infrastructure and Construction [IIIC] qualifies as an educational institution as defined under clause (y) of Paragraph 2 of Notification No. 12/2017-CTR and accordingly the courses conducted in the institution are eligible for exemption from GST as per entry at Sl No. 66: AAR

- Application disposed of: AAR

2021-TIOL-192-AAR-GST

Aswani Chips And Bakers

GST - Jackfruit Chips, Banana Chips, Potato chips, Tapioca Chips, Chembu chips and Pavakka chips are classifiable under CTH 2008.1940 and liable to GST @12% as per Entry at Sl No. 40 of Schedule II of Notification No.01/2017-CTR: AAR

GST - Roasted, salted, roasted and salted Cashew nuts are classifiable under CTH 2008.1910 and roasted, salted, roasted and salted Ground nuts and other nuts are classifiable under CTH 2008.1920 - All are liable to GST at the rate of 12% as per Entry at Sl No. 40 of Schedule II of Notification No. 01/2017-CTR : AAR 

- Application disposed of: AAR

2021-TIOL-191-AAR-GST

Goodwill Autos

GST - Section 15 of the Act, 2017 - Contract entered between applicant and recipient is for hiring of DG Set and is a comprehensive contract with the consideration having a fixed component and a variable component - The fixed component is the monthly fixed rent charged in the invoice for the DG Set and the variable charge is the charge for the diesel used - Though it appears that the applicant is receiving the reimbursement of diesel cost, the recipient is not paying for the diesel but for the services of DG Set, which is an integral part of the supply of DG Set rental service - There is no separate contract for supply of diesel and the invoice issued for the reimbursement of diesel cost is nothing but a supplementary invoice issued for the supply of rental service of DG Set - Hence, consideration for reimbursement of expenses as cost of the diesel for running of the DG Set is nothing but additional consideration for the renting of DG Set and attracts CGST @ 9% and KGST @ 9%: AAR

- Application disposed of: AAR

2021-TIOL-190-AAR-GST

Bindu Projects And Company

GST - Applicant has sought a ruling on the a pplicability of GST rates for works contract services for doing original works with South Western Railways - Contract cannot be a composite supply of works contracts as there is no principal supply and the works are not naturally bundled - It cannot be a mixed supply also because the valuations of each supply of works are valued separately and they would amount to separate contracts - Each of the works mentioned in a schedule is a separate contract in itself and this is bolstered by the fact that the works are not in the same place and also are different in nature - New constructions involved in the contract are liable to tax at 12% as per entry no.3(v) of Notification No. 11/2017-Central Tax (Rate) - Services of repairs, maintenance, renovation and alterations of residential complex meant for use of the Railway employees are covered under entry 3(vi) of the Notification and hence eligible for tax at 12% - Other repair works of old construction involved in the contract are liable to tax at 18% as per entry no. 3 (xii) of Notification No. 11/2017 -Central Tax (Rate): AAR

- Application disposed of: AAR

2021-TIOL-189-AAR-GST

Glow Worm Chips

GST - Jackfruit Chips and Banana Chips, Sharkara Varatty are classifiable under CTH 2008.1940 and liable to GST @12% as per Entry at Sl No. 40 of Schedule II of Notification No.01/2017-CTR: AAR

GST - Roasted, salted, roasted and salted Cashew nuts are classifiable under CTH 2008.1910 and roasted, salted, roasted and salted Ground nuts and other nuts are classifiable under CTH 2008.1920 - Salted and masala chips of Potato and Tapioca are classifiable under CTH 2008.1940 - All are liable to GST at the rate of 12% as per Entry at Sl No. 40 of Schedule II of Notification No.01/2017-CTR: AAR 

- Application disposed of: AAR

 
INDIRECT TAX

2021-TIOL-1688-HC-MAD-CUS

CC Vs R Natarajan

Cus - Revenue is in appeal against the order of the Tribunal allowing the appeals filed by the assessee and remanding the matter to the Commissioner by taking note of the order of Delhi High Court in Mangali Impex - 2016-TIOL-877-HC-DEL-CUS; stay granted by the Supreme Court and appeal of department is awaiting decision.

Held: No useful purpose would be served by remanding the matter as the Commissioner of Customs has already adjudicated the issue and without deciding the merits of the matter, the appeals should not have been allowed - An order of remand should be unconditional or qualified - If it is an unconditional order of remand, that would mean that the reasons assigned by the adjudicating authority, namely, the Commissioner of Customs, Chennai, are incorrect, and the Tribunal was duty bound to record such finding and then set aside the order, and if it is satisfied that a fresh opportunity needs to be given either to the assessee or to the Revenue, then, an order of remand has to be passed - Revenue has filed a Review Petition in Civil Appeal No. 1827 of 2018 to review the decision in M/s. Canon India Private Limited - 2021-TIOL-123-SC-CUS-LB and the same is stated to be pending before the Supreme Court - This is one more reason why the matter should be heard and decided by the Tribunal and await the decision in Mangali Impex - Appeals are allowed and the impugned common Final Order passed by the Tribunal dated 19.09.2017 is set aside and the appeals are restored to the file of the Tribunal and the order of status quo granted by the Tribunal shall continue to remain in force: High Court [para 4 to 6]

- Appeals allowed: MADRAS HIGH COURT

2021-TIOL-474-CESTAT-DEL

SRL Advisors LLP Vs CCT

ST - The appellant filed refund application for refund of erroneous payment of service tax - Same was rejected by both the lower authorities - Rule 2(bc) of Service Tax Rules, refers to the meaning of 'body corporate' in Section 2(7) of the Companies Act, wherein any other body corporate which includes a LLP is specifically excluded from the definition of body corporate - The appellant as a LLP, is not required to pay service tax under reverse charge mechanism during the period under dispute - It is held that the appellant is entitled to refund of service tax paid erroneously under reverse charge, as per the refund application - Accordingly, the adjudicating authority is directed to grant refund within a period of 45 days with interest for the period starting after three months from the date of refund application till the date of grant of refund: CESTAT

- Appeal allowed: DELHI CESTAT

2021-TIOL-473-CESTAT-DEL

Rajdhani Craft Vs CCGST

CX - The issue arises is as to whether the refund claim as was filed on 24.11.2017 is hit by time limit prescribed under Section 11 B of CEA, 1944 - Though initially a duty was proposed to be recovered from appellant vide a SCN and that it got confirmed by adjudicating authorities - Even the application for remission of duty on the goods lost in the fire in appellant's premises was disallowed by authorities below - But both these decisions were challenged before Tribunal and vide Final Order dated 10th May, 2016, the demand of duty was set aside and remission of duty on goods lost in fire was also allowed - Prior to this order was filed, request for refund on exports was filed by appellant - The refund was sanctioned but was ordered to be adjusted towards confirmed demand - Since subsequently, this Tribunal vide Order of 10.05.2016 has set aside the demand, appellant became entitled to claim said refund post the said order of CESTAT, however, admittedly, prior the expiry of period of one year from 10.05.2016 - The Revenue filed an appeal against the order of setting aside the demand before High Court of Rajasthan who has dismissed the appeal - So seen from the angle of time bar issue as invoked by Department, it is held that the period of one year as per section 11B (B) (ec) is the date of decision of Rajasthan High Court and not the date of decision of Final Order of CESTAT - Hence, the findings of authority below are absolutely wrong, the order under challenge is hereby set aside: CESTAT

- Appeal allowed: DELHI CESTAT

2021-TIOL-472-CESTAT-DEL

Sushma Vs CC

Cus - The allegation against the appellant is of conducting market inquiry in such a manner so as to aid the fraudulent exporters to draw heavy duty drawbacks - There is no allegation against appellant about intentional aiding and active complicity - There has been catena of judgments to show that any lapse in performance of duty by Custom Officer can at the most be considered as inefficiency which cannot lead to any charge of abetement or connivance thus attracting the penalty under Section 114 of Customs Act - Tribunal relies upon the decision in case of Boria Ram 2017-TIOL-919-CESTAT-DEL and Ruchika International 2015-TIOL-1224-CESTAT-MUM wherein it was held that the allegations of abeting over valuation after collusion with exporter need specific cogent evidence - In absence thereof it is merely dereliction of duties which can be proceeded in terms of Central Civil Services Rule, 1965 - There is no evidence produced by Department that appellant in any way has benefited himself due to the impugned exports by Shri Sajjan Kumar - It is merely negligence or dereliction of duties which without intention cannot be called as collusion or abetment - The order under challenge is hereby set aside: CESTAT

- Appeal allowed: DELHI CESTAT

 

 

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INSTRUCTION

F.No.NFAC-1/2021-22/439

SOP for Penalties under Faceless Penalty Scheme-2021

 
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