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Showing 21 to 40 of 1478 Records
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2023 (9) TMI 1458 - ITAT MUMBAI
Addition u/s 69A - addition based on entries of cash amount in the loose sheets - AO held that the cash amount received through hawala for the relevant year is treated as unexplained money - HELD THAT:- According to ld. AO, the entire cash sales reflected in the loose sheets pertain to the assessee when there are corresponding sales which has been accounted in the books of M/s. Samaira Enterprises. If that premise of the AO is to be accepted then sale of M/s. Samaira Enterprises would be nil which cannot be the case, because this entity has shown sales and is assessed to tax since past.
Thus, based on these documents and the ld. CIT (A) has given his elaborate finding for his conclusion and given direction to the ld. AO wherein, he has directed the ld. AO to verify and cross check, whether the sales adopted by him from the loose sheets appears in the cash book / bank book / sales of M/s. Samaira Enterprises or not and similar exercise to be undertaken with respect to expenses of the outgoing in the loose sheets seized and impounded from the search proceedings. We do not find any reason to tinker with such a direction which is based on the facts and material on record. Accordingly, order of the ld. CIT(A) is confirmed on the grounds raised by the Revenue is dismissed.
Unaccounted purchase - unexplained expenditure u/s.69C - CIT(A) deleted addition - HELD THAT:- Appellant has brought on record sufficient documentary evidences to justify its claim of genuineness of purchase of Spice Compound, which have not been controverted by the AO during assessment proceedings. No adverse view has been taken by the AO with respect to veracity of various documentary evidences or the claim made. AO has solely relied on the statements of two employees, which have later been clarified by the deponents Considering these facts, the addition as unexplained expenditure u/s.69C is correctly deleted.
Addition u/s.68 - statement recorded during the search and survey - HELD THAT:- Once ld. AO is being directed to verify the assessee records and ascertain the correct figure of sales made to M/s. Samaira Enterprises and if there is any discrepancy, then remedial action has to be taken in the case of M/s. Samaira Enterprises as the same would constitute corresponding purchases in its hand. It is only with the direction ld. CIT(A) has directed to delete in the hands of the assessee. We do not find any infirmity in such direction because all these transactions have been stated to be recorded in the books of accounts of M/s. Samaira Enterprises.
Addition u/s.69C - Purchase invoices demonstrating that the two invoices represent purchase of Nirmali Seeds of export quantity and balance invoices showing purchase of Tukda Nirmali Seeds at a lower price - CIT(A) deleted addition - HELD THAT:- Once it has been found that there is no evidence of cash payments against the purchase of nirmali seeds from the said party, then addition made by the ld. AO itself does not have any basis, accordingly, the ld. CIT(A) has rightly deleted the said addition.
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2023 (9) TMI 1457 - CALCUTTA HIGH COURT
Retention of certain goods as security - claiming release of goods - HELD THAT:- The fact of a dispute between the parties existing relatable to the arbitration agreement is clear from the material placed before the Court. The parties hence fall within Section 11(6) of the 1996 Act and an arbitrator must be appointed in terms of the arbitration agreement.
Application is accordingly allowed and disposed of by appointing Mr. S. Muralidhar, former Chief Justice of the Orissa High Court to act as the Arbitrator subject to the learned Arbitrator communicating his consent in the prescribed format to the Registrar, Original Side of this Court within three weeks from date.
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2023 (9) TMI 1456 - PATNA HIGH COURT
Grant of anticipatory bail - Money Laundering - proceeds of crime - siphoning off of funds - Section 45(1)(ii) of the PMLA - HELD THAT:- Considering the fact that petitioner is knowingly involved in acquisition, concealment and transfer of proceeds of crime and projection of the same as untainted, as referred to hereinabove. Further, Section 45(1)(ii) of the P.M.L.Act provides that notwithstanding anything contained in the Cr.P.C., no person accused of an offence under the P.M.L.Act shall be released on bail unless the Court is satisfied that there are reasonable grounds for believing that he/she is not guilty of such offence and that he/she is not likely to commit any offence while on bail.
Taking into consideration the rival submissions of learned counsel for the parties and materials available on record as also in view of section 45 of the P.M.L. Act and the fact that prayer for anticipatory bail of other two co-accused has been rejected by a coordinate Bench of this Court in RANJEET KUMAR MANDAL AND SAUDAGAR MANDAL VERSUS UNION OF INDIA THROUGH ASSISTANT DIRECTOR, DIRECTORATE OF ENFORCEMENT (PMLA) , PATNA [2023 (7) TMI 1392 - PATNA HIGH COURT], this Court does not find any ground to grant anticipatory bail to the petitioner and as such, the application for grant of anticipatory bail to the petitioner is rejected.
Petition dismissed.
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2023 (9) TMI 1455 - ITAT SURAT
Bogus LTCG/STCG - denial of exemption u/s 10(38) - Scrip was identified as a listed penny stock on BSE used for generating bogus LTCG/STCG as per the data received from the Investigation Wing - stock prices of the companies are manipulated to provide the exempted long term capital gain - CIT(A) deleted addition - HELD THAT:- AO made addition solely on the basis of information available with him. Neither the source of such information is recorded in his assessment order nor such information was shared with the assessee. Assessee in his reply, specifically mentioned that AO considered the sale entry twice including one which is reversed on the same date. Even such fact was not examined by assessing officer. AO made addition of credit without application of mind.
Assessee explained that he made transaction of sale of shares in the legitimate manner and paid STT. Assessee further explained that the holding period of the shares was more than seven years and all the evidences with regard to purchase and sale of scrips was furnished. No comment on such evidence was made by AO on such evidences. AO has not discussed the basic fact, whether the name of assessee was mentioned in the alleged information or the broker of the assessee was involved in price manipulation with stock exchange.
CIT(A) granted relief to the assessee buy taking view that complete details of transaction in the form of contract note from broker's ledger, D-mat account and bank statement was furnished by the assessee. The assessee proved the bona fide of nature and source of sum credit in his books. Such explanation provided by assessee has not been considered by Assessing Officer. AO has not confronted with any statement or relevant part of material to the assessee, which was violated the principle of natural justice.
It was also held that the AO has not brought any material on record regarding turnover or profit or net worth of Global Capital Markets Ltd, which is still continuing be traded on BSE and has not been backlisted or barred by Security Exchange Board of India. The shares were purchased through Calcutta Stock Exchange on 27.03.2003 and at that time STT Regulation has not come in force. Thus CIT(A) while granting relief to the assessee considered entire facts and the evidence filed before him, which does not require any interference, which is affirmed.
Also the tax effect is also less than the monetary limit fixed by CBDT and the present case is not covered by clause 10(c) of the Circular No. 3/2018 Clause -c of para 10 of said circular deals with audit objection. There is no material on record to show the acceptance of such audit abjection. Mere mentioning of such facts in the grounds of appeal, without showing any material is not sufficient. Thus, the revenue failed on both the counts. In the result, the grounds of appeal raised by the revenue are dismissed.
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2023 (9) TMI 1454 - ITAT KOLKATA
Bogus LTCG - Addition u/s 68 - unexplained cash credit - denying exemption u/s 10(38) - sale of equity shares from the listed companies, which were found to be the penny stock companies by both the lower authorities - HELD THAT:- We find that recently this Tribunal has adjudicated the similar issue under identical in the case of Shyam Sunder Bajaj [2022 (10) TMI 728 - ITAT KOLKATA] and after placing reliance on case of Swati Bajaj & Others [2022 (6) TMI 670 - CALCUTTA HIGH COURT] wherein AO as well as the Commissioner (Appeals) have adopted an inferential process which is found to be a process which would be followed by a reasonable and prudent person. AO and the Commissioner (Appeals) have culled out proximate facts in each of the cases, took into consideration the surrounding circumstances which came to light after the investigation, assessed the conduct of the assessee, took note of the proximity of the time between the buy and sale operations and also the sudden and steep rise of the price of the shares of the companies when the general market trend was admittedly recessive and thereafter arrived at a conclusion which is a proper conclusion.
The issue involved in these appeals is squarely covered against the assessee.
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2023 (9) TMI 1453 - ITAT AHMEDABAD
Capitalizing the interest expenditure on Capital Work in Progress (CWIP) - AO observed that the assessee did not furnish any details pertaining to funds flow movement to prove that only surplus funds available with the assessee were utilized for the purpose of purchase of various items grouped under the head CWIP - as assessee was not able prove that there was no diversion of interest bearing funds and that the interest free funds available with the assessee which were utilized for making investment in Capital Work in Progress, AO added back a sum u/s 36(1)(iii) of the Act - CIT(A) decided the issue in favour of the assessee by observing that during the year under consideration, the assessee had sufficient interest free funds in the form of share capital, reserve and surplus - HELD THAT:- A perusal of the observations made by Ld. CIT(A) clearly shows that substantial interest free funds were available with the assessee far in excess of the investment made in Capital Work in Progress.
In the case of Amod Stamping (P.) Ltd [2014 (7) TMI 753 - GUJARAT HIGH COURT] held that where assessee had sufficient interest free fund available with it to be invested in mutual funds, deduction of interest expenditure on borrowed fund could not be disallowed under section 36(1)(iii) of the Act. In the case of Gujarat State Fertilizers & Chemicals Ltd. [2013 (7) TMI 701 - GUJARAT HIGH COURT] held that where assessee's own funds exceeded investment made to earn exempted income, and borrowed funds had not been used for investments, disallowance of 10 per cent of dividend income was impermissible. In the case of Beekons Industries Ltd. [2023 (3) TMI 323 - PUNJAB AND HARYANA HIGH COURT] it is held that where assessee-company had given loan to a directors' relative without charging interest and it also claimed deduction under section 36(1)(iii) of interest paid on loan taken from bank, since loan to director's relative was financed by assessee from self sources without any cost, disallowance of interest paid on loan taken on pro rata basis was not justified.
Thus we observe that on identical set of facts, the Assessing Officer did not make any disallowance in the hands of the assessee under Section 36(1)(iii) of the Act in the previous assessment. Therefore we find no infirmity in the order of Ld. CIT(A) in deleting the additions made under Section 36(1)(iii) of the Act. Decided against revenue.
Disallowance of Foreign Commission Expenses u/s 40(a)(i) of the Act - CIT(A) has primarily given relief to the assessee on the ground that names and address of the brokers / agents, copies of bank debit advice issued for outward remittance, debit notes and export invoices etc. were furnished by the assessee and accordingly, the Ld. CIT(A) directed to delete the addition - HELD THAT:- We observe that the commission expenses has risen substantially from Rs. 46,903/- to 60,64,640/- during the impugned year under consideration. Assessee has placed on reliance on certain documents which have been placed before us for our consideration in order to substantiate the nature of expenses which have been incurred in support of the fact that services were rendered outside of India.
What we notice that there has been a substantial increase in foreign commission expenses during the year under consideration and the Department i.e. both the AO and Ld. CIT(A) did not have opportunity to examine the foreign commission expenses in absence of copies of Agreements which have not been furnished at any stage of the proceedings. In our considered view, in order to decide on the nature / genuineness of services which have been rendered by the broker / agents and whether TDS is required to be deducted on such payments, it is important that the Department should analyze the details including copies of Agreements, which have been furnished before us on sample basis for the first time. Accordingly, in the interest of justice this issue is being restored to the file of AO for denovo consideration - Ground of the Department's appeal is allowed for statistical purposes.
Disallowance of warranty liability - CIT(A) deleted addition - HELD THAT:- Certain facts are noteworthy. Firstly, on identical set of facts, the Department has allowed the appeal of the assessee for the past years as well. The Department has not pointed out to any specific circumstances which would necessitate a change in the position taken by the Department. Second, it is observed that in some cases, the goods supplied by the assessee carry a warranty period of upto eight years. It is for this specific reason, as observed that CIT(A) that the assessee has made a provision for warranty for a period of five years from the date of sale. Thirdly, after the period the warranty period is over i.e. after five years, the assessee has suo moto offered the unutilized portion of the provision for warranty expenses and offered the same to tax in the return of income. Therefore, the provision for warranty is a Revenue neutral exercise and after the period when the warranty is over, the assessee suo moto offers the same to tax in its return of income.
This fact has also been specifically taken note of by Ld. CIT(A) while allowing the appeal of the assessee on this issue. Fourthly, the assessee has given a reasonable basis as to why a provision of warranty @ 5% of net sales has been booked, which is for the reason that the assessee has provided a bank guarantee of Rs. 10.42 cores to its clients which can be forfeited in the event of default in providing any after sales application.
CIT(A) has observed that the assessee is clearly incurred substantial risk on account of bank guarantees which have been given to its customers and therefore, looking into the instant facts, a provision of warranty @ 5% of the net sales is quite reasonable, looking into the instant facts. CIT(A) also observed that on perusal of various instances of warranty provided to customers, it was seen that in several cases the period of warranty ranged to eight years as well. Accordingly, a provision of warranty for a period of five years was justified in the instant set of facts.
It is a well settled principle that provision of warranty, if done on a scientific and rational basis is allowable to the assessee. However, what qualifies as scientific / rational would depend on assessee's line of business, the nature of warranty that it provides and a period of warranty provided by the assessee. Thus we find no infirmity in the order of Ld. CIT(A) so as to call for any interference. Decided in favour of assessee.
Disallowance of interest expenses claimed on business advances u/s 36(1)(iii) - CIT(A) deleted addition - HELD THAT:-We observe that the assessee has substantial share holder funds including reserves and surplus at its disposal. Further, the assessee has profit after tax of Rs. 2,80,11,727/-, which is in excess as compared to the advance of Rs. 2,66,40,000/- given to M/s. Shivalik Reality Pvt. Ltd. The Ld. CIT(A) on consideration of the above facts had arrived at the factual finding that the advances have been made by the assessee from own interest free funds and further in the immediately preceding Assessment Year 2011-12, no disallowances was made by the Assessing Officer in respect of such advances - no infirmity in the order of Ld. CIT(A) so as to call for any interference. Decided in favour of assessee.
Addition u/s 14A - CIT(A) restricted the disallowance which was the dividend income claimed to be exempt by the assessee - HELD THAT:- It is a well settled principle of law that the amount of disallowance under Section 14A of the Act cannot exceed the amount of income claimed to be exempt by the assessee. Accordingly, and the observations made by Ld. CIT(A) in the appellate order, we find no infirmity in the order passed by Ld. CIT(A) so as to call for any interference.
Disallowance on account of commission to foreign agents - CIT(A) deleted addition - HELD THAT:- In light of our observations made on A.Y. 2012-13 the matter is being restored to the file of the Assessing Officer for carrying out necessary verification, since the Department did not have the opportunity of analyzing the necessary agreements etc. which have been placed on record before us for the first time. Ground of the Department's appeal is allowed for statistical purposes.
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2023 (9) TMI 1452 - DELHI HIGH COURT
Money Laundering - seeking grant of bail - bail sought on medical grounds - right to medical treatment - HELD THAT:- The petitioner like any other citizen has a right to get effective and proper medical treatment, this court also cannot lose sight of the fact that a person is presumed to be innocent till he is proven guilty. The petitioner is yet to be announced guilty and therefore proper medical treatment cannot be denied to him. However, this court is also conscious of the serious allegations against him and the gravity with which the legislation has viewed such offences.
In the totality of the facts and circumstances and in view of the advice of the BLK-Max Super Speciality Hospital, the court disposes of the present application with the following directions:-
a) The Superintendent Jail shall take custody of the petitioner from VNA Hospital, situated at 1, Navjeevan Vihar, Geetanjali Enclave, Malviya Nagar today before 8 p.m. in a proper ambulance taking care of his medical condition. The ambulance should be accompanied by a doctor and proper medical facilities.
b) The petitioner, if required, shall be taken to VNA Hospital, situated at 1, Navjeevan Vihar, Geetanjali Enclave, Malviya Nagar as an OPD patient for removal of stitches, as advised by Dr. Abhishek Kumar Mishra.
c) The petitioner shall be taken in custody for follow-up with Operating Spine Surgeon for post-operative spine review, as and when required.
d) The Superintendent Jail shall strictly follow up the medical advice as given in the discharge summary of BLK-Max Super Specialty Hospital; and
e) The petitioner be also taken for rehabilitation sessions twice a week at Centre for Sports Rehabilitation, VNA Hospital, situated at 1, Navjeevan Vihar, Geetanjali Enclave, Malviya Nagar for gait training on an anti-gravity treadmill and strengthening on isokinetic machine.
f) The petitioner be provided appropriate medical treatment as per rules.
Application disposed off.
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2023 (9) TMI 1451 - ITAT PUNE
Bogus LTCG - Denial of exemption of capital gains u/s 10(38) - Reliance on investigation report by the Investigation Wing of the Department and the Securities & Exchange Board of India (SEBI) - principle of fraud v/s principles of natural justice application - HELD THAT:- We are inclined to confirm the addition made by AO, in view of the well settled principle of law that fraud vitiate everything and even principle of natural justice have no application and such transaction is void ab initio.
The Hon'ble Supreme Court in the case of Friends Trading Co. vs. Union of India [2022 (9) TMI 1076 - SUPREME COURT] held in the context of availment of alleged forged DEPB under the Customs Act, wherein, it was found DEPB licenses were forged and it was held that the exemption benefit availed on such forged DEPB are void ab initio on the principle that fraud vitiate everything and the period of limitation was held to have no application and the Department was held to be justified in invoking the extended period of limitation and the fact that whether the beneficiary had no knowledge of about the fraud/forged and fake DEPB licenses have no bearing the imposition of custom duty. The ratio of judgement is squarely applicable to the transaction under consideration before us.
Appellant deliberately withheld the information from the AO as well as the ld. CIT(A) which is within exclusive knowledge of appellant to establish the genuineness of transactions of purchase of shares of that company. It is nothing but a fraud played by the appellant against the AO as well as the ld. CIT(A) who are quasi judicial authorities employed for execution of the provisions of the Income Tax Act. Therefore, the principle of fraud can be squarely applied to the facts of the present case and principles of natural justice have no application. Decided against assessee.
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2023 (9) TMI 1450 - DELHI HIGH COURT
Money Laundering - Seeking grant of Interim Bail - bail sought on medical grounds - HELD THAT:- There is no doubt in the mind of the Court that every individual has a right to get proper and effective medical treatment. There is also no doubt that an accused has a similar right to proper and effective treatment. However in the present case, the petitioner has been given concession of interim bail on the medical grounds on several occasions. This Court cannot raise a suspicion at the ground of the petitioner’s health condition but at the same time, this extension of interim bail from time to time sets a very bad precedent and is prone to be misused. Thus, this Court does not find any ground to further extend the interim bail.
The petitioner shall be remained hospitalized in the custody of the Superintendent Jail till the petitioner is discharged from the hospital, which should not exceed two weeks except in case of some medical advice. During this period, the wife, children and parents of the petitioner may meet the petitioner in the hospital as per the rules and the permission of the Superintendent Jail. However, during these meetings, the members of the family of the petitioner shall not be allowed to take phone with them. The petitioner shall also not be allowed to use a phone during this period. The petitioner may be allowed to take home cook meal during the period of hospitalization.
Let the medical documents on record be verified from the AIIMS. Medical Superintendent, AIIMS is requested to constitute a medical board and give a definite opinion about the medical condition of the petitioner and also to suggest whether the present disease and all the medical problems taken together or singly, require hospitalization in a particular hospital or can the petitioner be treated in the jail or the referral hospital.
Application disposed off.
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2023 (9) TMI 1449 - KERALA HIGH COURT
Validity of summons for appearance of the petitioner for arrest for violation of Section 69 (1) of the CGST Act, 2017 - non-compliance with the mandatory provisions of Section 41A of the Cr.P.C. - HELD THAT:- The High Court for the State of Telangana in P. P. Ramana Reddy v. Union of India [2019 (4) TMI 1320 - TELANGANA AND ANDHRA PRADESH HIGH COURT] has held that there is vast difference between the phrase “reasons to believe” when placing reliance under Section 69 (1) of the CGST Act, 2017 and the phrase “reasons are to be recorded” under Section 41A(3) of Cr.P.C. The said Judgment does not laid down that Section 41A notice has to be issued to an offender who has allegedly committed an offence under Section 69(1) of the CGST Act, 2017.
There are no substance in the submission made by the Learned Counsel for the petitioner that the provisions of Section 41A of the Cr.P.C. are to be complied with in case of an offender for violation of Section 69(1) of the CGST Act, 2017. However, considering the facts and circumstances of the case, this Court finds that one opportunity to the petitioner to appear before the authorities for the purpose of recording his statement is to be given and, therefore, the petitioner is directed to appear before the authority concerned on 13.09.2023 (Wednesday).
Petition disposed off.
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2023 (9) TMI 1448 - ITAT DELHI
Accrual of income in India - payments received by the assessee from its Indian customers on account of Centralized Services - whether would constitute Fee for Technical Services as defined u/s 9(1)(vii) of the Income Tax Act, 1961 or “Fee for included services as defined under Article 12(4)(a) of the Indo-US DTAA.” - assessee is a non-resident corporate entity incorporated in United States of America (‘USA’) engaged in the business of providing various services to hotels in different countries across the world, including India - HELD THAT:- We find, while deciding identical issue in assessee’s own case in [2022 (9) TMI 1572 - ITAT DELHI] for assessment years 2016-17 and 2017- 18, the Tribunal, in order after analyzing in detail the nature and character of receipts has held that they cannot be treated as FTS/FIS, either under the provisions of the Act or under the treaty provisions.
Notably, the aforesaid decision of the Coordinate Bench has been affirmed by the Hon’ble Jurisdictional High Court while deciding Revenue’s appeal in judgment [2023 (5) TMI 1313 - DELHI HIGH COURT]
Since, the issue in dispute is squarely covered in favour of the assessee by the decision of the Tribunal and Hon’ble Jurisdictional High Court, we find no reason to interfere with the decision of learned first appellate authority in declaring the receipts from centralized services to be not in the nature of FTS/FIS. Ground is dismissed.
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2023 (9) TMI 1447 - ITAT SURAT
Revision u/s 263 - ‘limited scrutiny’ assessment in assessee's case conducted - As per CIT different figures of tangible asset, intangible asset are getting reflected, however, no question has been asked by the AO on acquisition of assets, depreciation, its impact on profit and loss account and ultimately on the taxable income of the assessee, thus, the assessment order is not only erroneous but prejudicial to the interest of Revenue and therefore needs revisions - assessee’s case was selected for “limited scrutiny purpose” for the purpose of verification of refund claim and ICDS compliance and adjustment
HELD THAT:- AO can not go beyond the items specified in the ‘limited scrutiny’ hence the jurisdiction exercised by ld PCIT is not in accordance with law, reason being assessee`s case was selected for ‘limited scrutiny’ and the issue involved in the items selected in ‘limited scrutiny’ were answered by the assessee during the assessment stage. Apart from this, during the assessment proceedings the assessee had provided all the required information to the assessing officer, which includes the complete financial statements and tax audit report of the company and other details sought by the AO. Hence assessment order passed by the assessing officer should not be erroneous and therefore the order of PCIT should be quashed.
On merit, we note that AO has issued notice u/s 142(1) wherein although he has not raised the issue pertaining to depreciation, because he was instructed to conduct limited scrutiny, however, we note that tax audit report which contains depreciation schedule as per Income Tax Act, and audit report as per Companies Act, which contains depreciation as per Companies Act, were on the record of the assessing officer. Therefore, Assessing Officer having satisfied himself passed the assessment order and such order passed by the Assessing Officer should not be prejudicial to the interest of revenue.
The assessee has not claimed the depreciation in tax audit report (for income tax purposes) as the new assets so purchased were not put to use. However, for Companies Act purpose, the assessee has shown depreciation in the audited books of accounts, this difference between the depreciation schedule prepared as per Income Tax Act and the depreciation schedule prepared by the assessee, as per companies Act, has been raised by ld PCIT. We note that there is no default on the part of the assessee to submit the depreciation schedule as per companies Act and as per Income Tax Act before the assessing officer. Therefore, on merit also the assessing officer has examined the issue which was raised by the ld. Principal Commissioner of Income Tax.
Therefore, order of the assessing officer passed u/s 143(3) cannot be termed as erroneous since enquiry was, in fact, carried out by assessing officer on the issue on which the ld PCIT has found fault with and has taken a plausible view.
The Hon’ble Supreme Court in the case of Malabar Industries [2000 (2) TMI 10 - SUPREME COURT] held that this phrase i.e. “prejudicial to the interest of the revenue’’ has to be read in conjunction with an erroneous order passed by the Assessing Officer - it has to be remembered that every loss of revenue as a consequence of an order of Assessing Officer cannot be treated as prejudicial to the interest of the revenue. When the Assessing Officer adopted one of the courses permissible in law and it has resulted in loss to the revenue, or where two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue “unless the view taken by the Assessing Officer is unsustainable in law”. Based on the facts and circumstances of the case, we quash the order passed by ld PCIT - Decided in favour of assessee.
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2023 (9) TMI 1446 - CESTAT CHENNAI
Seeking remand of matter for reassessment of the bills of entry taking into consideration the country-of-origin certificate - Concessional rate of duty - Eligibility for benefit of N/N. 152/2009- Cus. - HELD THAT:- The prayer put forward by the respondent before the Commissioner (Appeals) was only to remand the matter for reassessment of the bills of entry taking into consideration the country-of-origin certificate. The Commissioner (Appeals) has, however, gone beyond the prayer made in the appeal before him and held that the respondent is eligible for the benefit of the notification.
The respondent having produced the country-of-origin certificates, the matter requires to be remanded to the original authority to consider the benefit of concessional rate of duty as per the Notification No.152/2009-Cus. The original authority is also directed to take into consideration Notification No.187/2009-Cus. dt. 31.12.2009 (Determination of Origin of Goods under the Preferential Trade Agreement between the Government of India and the Republic of Korea Rules, 2009) which provides for production of the countryof-origin certificate within a period of 12 months from the date of shipment of the goods.
The impugned order is modified to the extent of remanding the matter to the original authority to look into the benefit of Notification No.152/2009-Cus. as well as 187/2009-Cus. - the appeal filed by the Department is disposed of by way of remanding the matter to the original authority.
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2023 (9) TMI 1445 - TELANGANA HIGH COURT
TDS u/s 195 - deduction of TDS in respect of remittances made by the appellant to US based company i.e., M/s. IGTL Solutions (U.S.A.) - appellant strongly contended that once when the certificate was obtained from the Joint Director so far as the waiver of deduction of TDS in respect of remittances is made to M/s. IGTL Solutions (USA) has not been considered, discussed, referred to either by the Commissioner of Income Tax (Appeals) or by the Tribunal
HELD THAT:- Today, when the matter is taken up for hearing, the entire paper-book that was filed before the Tribunal was made available by the learned counsel for appellant and one such document therein is the certificate so issued u/s 195(3) of the Act, granting exemption to M/s. IGTL Solutions (USA) so far as receiving of remittances without deduction of income tax at source. If the contents of the said document is to be accepted and on verification, found to be genuine, the consequences would be that the entire remittances that have been made to M/s. IGTL Solutions (USA) would be non-taxable so far as TDS is concerned. Further, if the contents of the said letter stands accepted, then the action on the part of the respondent in carrying out deduction at source on the remittances made to M/s. IGTL Solutions (USA) would be per se bad.
Thus taking note of the fact that there is a non-reference or non-deliberation of the exemption so obtained under Section 195(3) of the Act by the two forums below, we are of the considered opinion that it is a fit case where matter can be remitted back to the Tax Tribunal for considering the contentions raised by the appellant so far as exemption that they have got under Section 195(3) of the Act insofar as the remittances that have been made to M/s. IGTL Solutions (USA) is concerned. Considering the fact that the order of the Tribunal is one, which was passed as early as on 03.08.2007, it is expected that the Tribunal shall reconsider this matter, particularly, taking into consideration the exemption so granted to the appellant on 10.02.2003.
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2023 (9) TMI 1444 - KARNATAKA HIGH COURT
Payment of Income tax on the compensation under the provisions of Right to Fair Compensation and Transparency in Land Acquisition Act, 2013 - Quantum of compensation and deduction of income tax at source on the said compensation without granting any exemption from payment of income tax - As contended that the compensation was required to be awarded under Act, 1894 and not under Act, 2013 as the same is not applicable in respect to the acquisition made by KIADB. That the deduction of tax at source was in accordance with provisions of law as no exemption is provided from payment of income tax on the compensation.
HELD THAT:- As rightly taken note of by the learned Single Judge that in the background of upholding the contention of the respondents/writ petitioners of their entitlement of compensation under the provisions of Act, 2013, the entire benefit including the benefit under Section 96 of the said Act, 2013 has to be extended in its entirety. More so, as already noted even BMRCL, which is the appellant in the connected matter challenging the relief granted in favour of respondent/writ petitioners for determination of their claim for compensation under Act, 2013, itself has issued package compensation as per Annexure-H and General Compensation has been awarded as per Annexure-H1 taking into consideration the provisions of Act, 2013. Therefore, contention of appellant cannot be accepted, to say that since the exemption of payment of Income Tax Act and deduction of income tax at source on the compensation payable against the acquisition of land only if it is made under Act, 2013 and not under KIADB Act, 1966.
Learned Single Judge in his discussion on point No.3 has taken into consideration the provisions of law, the Circular and also the exemption granted from payment of income tax and deduction of tax at source in the awards and also the precedence in the nature of judgments passed in the case of Viswanathan M. vs The Chief Commissioner and Others [2020 (5) TMI 465 - KERALA HIGH COURT] wherein it has been held that compensation payable to the land losers would be exempt from payment of income tax, we do not see any reasons to deviate and hold contrary to the said view more particularly, for the reason of respondent/writ petitioners having held to be entitled for determination of their claim for compensation under Act, 2013. Since the only contention raised by the appellant that the exemption is provided under the new Act, 2013 and that having been held in favour of the respondents/writ petitioners, no grounds are made out warranting interference with the impugned order.
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2023 (9) TMI 1443 - KARNATAKA HIGH COURT
Quantum of compensation and deduction of income tax at source on the compensation without granting any exemption from payment of income tax - compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - compensation received pursuant to acquisition by the State/KIADB [Karnataka Industrial Areas Development Board] - Entitlement to refund the tax deducted at source together with applicable interest from the date of deposit till the date of refund - compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - Whether the petitioners are entitled to compensation under the Land Acquisition Act, 1894 or under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act ,2013, in respect of lands acquired pursuant to preliminary notification issued after 01.01.2014 u/s 28(1) of the Karnataka Industrial Area Development Act, 1966?
HELD THAT:- The claim of the petitioners is for grant of compensation under the Act, 2013. Though respondent authorities and the appellant herein do not seriously dispute grant of compensation under the Act, 2013, except stating that the package compensation offered by the appellant herein applying provisions of Act, 2013 is only for the limited purpose of passing consent award and if it was not accepted the compensation would be awarded in accordance provisions of KIAD Act, 1966, it is necessary at this juncture to refer to the very notification dated 15.10.2015 issued under Section 28(1) of the KIAD Act, 1966 seeking to acquire the subject property in that it is stated that compensation for acquisition would be paid in terms of Act, 2013. When a representation to pay the compensation is under Act, 2013 is made in the very notification, respondent-authorities cannot be allowed to contend the contrary.
In that view of the matter the contention of the respondent-authorities that grant of compensation in the cases referred to and relied upon by the respondents/ writ petitioners was on the basis of the fact the land acquired was not for BMRCL and the contention of the appellant herein that the calculation of package compensation that was made under Act, 2013 is only for the limited purpose of passing consent award cannot be countenanced.
It is also necessary to note that no appeal has been filed by the respondents 5, 6, 7 and 8 on the question of validity or otherwise of the resolution of the KIADB passed in its 343rd meeting dated 27.08.2016 which is heavily relied upon by the respondents/petitioners and accepted by learned Single Judge. State Government by its letter dated 08.08.2019 bearing No. CI 176 SPA 2019 had reiterated and reaffirmed the resolution of the KIADB to pay the compensation under the Act, 2013.
The contention of the appellant that KIADB under the scheme of Act, 1966 is not having any power or authority in the matter of determination and payment of compensation which power and authority is vested exclusively in the State Government though appears to be tenable, however, in view of the fact that the resolution of the KIADB passed in its 343rd meeting referred to hereinabove has apart from being given effect to has been accepted and reiterated by the State Government in its communication referred to above, the said contention pales into insignificance. That apart KIADB in the aforesaid proceedings namely Puttalakshmma and Jalaja has relied upon said resolution enabling this Court to accept the contentions of the land losers of their entitlement for compensation under Act, 2013. As already noted above, there has been no challenge to the validity or otherwise of the said resolution of KIADB by the State Government and the same has attained finality.
As regards the contentions of the appellant that it being a joint venture entity consisting of Central Government and State Government as their share holders and being liable to pay the compensation is entitled to maintain the challenge to the impugned order, and though referring to the certain clauses of the memorandum of understanding in terms of which the Appellate entity has been brought into existence, submission was made on behalf of the appellant that since payment of compensation, repayment of debt is the responsibility of the appellant- BMRCL it has locus standi to question the payment of compensation under Act, 2013, even before the amendment brought in to Section 30 of KIAD Act, 1966, it is necessary to refer to Annexure-H a communication dated 21.10.2016 addressed by BMRCL to the Special Land Acquisition Officer- respondent No. 7 with respect to providing package compensation. In that taking into consideration of the Notification dated 21.10.2016 and the value of land, solatium of 100% and the interest at 12% as provided under Section Act, 2013 has been calculated. Based on the said compensation package notices under Section 29(2) of KIADB Act, 1966 has been issued by KIADB and in furtherance thereof, general award as per Annexure-H1 has been passed by KIADB on 29.05.2018 though rejected by the petitioners.
Appellant has made out a case for maintainability of the writ appeal, cannot be heard to say that the respondents/petitioners are not entitled to payment of compensation under Act, 2013.
Similarly, though no appeal is preferred by the State and the KIADB, a feeble attempt is made by them to contend that the payment of compensation under Act, 2013 was made in the cases of Puttalakshmamma, Jalaja, Mahesh and Jemcy Ponnappa as the said cases were not concerned with the acquisition of land of BMRCL, the said submissions cannot be countenanced in view of the law laid down by the Apex Court in the case of Nagpur Improvement Trust [1972 (12) TMI 82 - SUPREME COURT] wherein the Apex Court has held that if the existence of two acts enables the State to give one owner different treatment from another equally situated, the owner who is discriminated against can claim protection of Article 14. That it is immaterial under which Act and for what purpose the land is acquired as far as land looses or concerned the differential standard of compensation cannot be applied.
Respondents/petitioners, as rightly held and declared by learned Single Judge, are entitled for the compensation under Act, 2013.
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2023 (9) TMI 1442 - DELHI HIGH COURT
Grant of default bail - incomplete chargesheet or not - FSL report awaited - whether the main chargesheet as well as the subsequent supplementary chargesheets filed in the present case are incomplete on account of non-filing of documents likke doctor's opinion, FSL Report and sanction order u/s 39 of the Arms Act, 1959? - HELD THAT:- With regard to requirement sanction vis-a-vis default bail under Section 167(2) of the CrPC, in Judgebir Singh alias Jasbir Singh Samra alias Jasbir and Others v. National Investigation Agency [2023 (5) TMI 1302 - SUPREME COURT], the Hon'ble Supreme Court took note of the decision in Suresh Kumar Bhikamchand Jain [2013 (2) TMI 821 - SUPREME COURT] and held that a chargesheet filed without sanction would not be deemed incomplete.
In the present case, the investigation qua the applicant was complete at the time the first chargesheet was filed, as regards the offences mentioned in the FIR, on 02.12.2021. At the time of filing of the first chargesheet, there was sufficient material on record qua the applicant such as statements of eye-witnesses and other material evidence collected and placed on record. Mere non-filing of the FSL Report is not sufficient to conclude that the chargesheet filed in the present case was incomplete. The said report can be filed by way of a supplementary chargesheet. In any case, the case of the prosecution is primarily based on the eye witness account of the complainant. The FSL report, if any, would be a corroborative piece of evidence.
The opinion of the expert can always be filed before the learned Trial Court by way of supplementary chargesheet. It is further pertinent to note that in the present case, the learned Trial Court had taken the cognizance after the chargesheet was filed and the said order was not challenged by the petitioner.
This Court is of the opinion that the chargesheet filed in the present case was not incomplete - the bail application is dismissed.
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2023 (9) TMI 1441 - CESTAT KOLKATA
Process amounting to manufacture or not - activity of blending, labeling, packing and re-packing of 'Horlicks' - section 2(f) (iii) of the Central Excise Act, 1944 read with chapter note 5 of chapter 19 of CETA, 1985 - HELD THAT:- The appellant undertakes the activity/processing on the bulk malt based powder, received from GSK thereafter removal of unwanted particles from the bulk malt based powder to make it fit for human consumption. Then processing/blending of the bulk powder with sweetened milk powder, sugar, vitamins etc. to make it marketable in the finished form and then packing of the final manufactured product either in pouches or in jars having brand name of 'Horlicks' on it. The said activity undertaken by the appellant do qualify as process of manufacturing in terms of section 2(f) of the Central Excise Act, 1944 as the activity undertaken by the appellant brings about a change in the name, character and use and bringing a new product in the market which is known as 'Horlicks', therefore, the activity undertaken by the appellant is manufacturing activity and the appellant is a manufacturer in terms of section 2(f) of the Central Excise Act, 1944.
Thus, it cannot be said that the appellant is a job-worker and providing 'Business Support Service' and no demand of service tax can be raised against the appellant - the impugned order qua demand of service tax from the appellant that they are service provider post June 2012 and prior to 2012, the appellant was providing 'Business Support Service', is not sustainable - there are no merit in the impugned order - appeal allowed.
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2023 (9) TMI 1440 - CESTAT BANGALORE
Refund of accumulated CENVAT Credit under Rule 5 of Cenvat Credit Rules, 2004 - port service - input service - HELD THAT:- The ld. Commissioner (Appeals) referring to the judgments of this Tribunal in the cases of COMMISSIONER OF CENTRAL EXCISE, RAJKOT VERSUS ROLEX RINGS (P.) LTD. [2008 (2) TMI 295 - CESTAT, AHMEDABAD] and CCE, RAJKOT VERSUS ADANI PHARMACHEM P. LTD. & ORS. [2008 (7) TMI 102 - CESTAT AHMEDABAD] held that ‘port service’ is an input service, accordingly, eligible for refund of the credit availed on the said service - there are no discrepancy in the said order of ld. Commissioner (Appeals). The services rendered at the port has been consistently held as an input service within the definition of ’input service’ as per Rule 2(l) of Cenvat Credit Rules, 2004, port being the place of removal in case export of goods.
The order of the ld. Commissioner (Appeals) is upheld and the appeal filed by the Revenue is dismissed.
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2023 (9) TMI 1439 - ITAT AHMEDABAD
Assessment in the name of non-existing company - assessee itself has filed the return of income, appeals in the name of non-existent company - HELD THAT:- Mistake committed by the assessee does not empower the Revenue to also commit the same mistake especially in a situation where the fact about the scheme of amalgamation and conversion of the assessee into LLP was known by the AO which is evident from the assessment order discussed above. The department was aware of the complete fact that the company was no longer in existence, yet the AO has framed the assessment in the name of non-existing company. Therefore, contention of the DR fails on this count that the assessee has also made a mistake in filing the returns of income and appeal papers in the name of non-existing company.
We also note that this Tribunal in case of Urmin marketing (P) Ltd. [2020 (11) TMI 47 - ITAT AHMEDABAD] has already decided the identical issue in favor of assessee on the similar facts and circumstances. Assessment framed u/s 143(3) of the Act is not sustainable. Hence the ground of appeal of the assessee is allowed.
Disallowance of depreciation on the intangible assets/goodwill acquired in the scheme of amalgamation - all assets and liabilities of the amalgamating company were transferred to the assessee company at their book value - HELD THAT:- Goodwill generated in the scheme of amalgamation is acquired by the assessee. Thus, in our considered view the assessee has complied with all the conditions provided under section 32 of the Act. Accordingly, we are not convinced by the findings of the authorities below.
All the necessary details about the management of both companies were disclosed in the scheme of amalgamation and nothing was hidden. The scheme contained all the information related to purchase consideration, its valuation, mode of payment and accounting treatment. The Hon’ble High Court approved such scheme after inviting observation and comment from ROC, MCA, and official liquidator including the income tax department. Thus, in the given fact and circumstances the reasonableness of the scheme cannot be doubted. Accordingly, no inference can be drawn that the assessee has employed colorable device in order to record high value of purchase consideration which is resulting goodwill.
There is no prohibition under the Act for disallowing the depreciation on the goodwill generated in the scheme of amalgamation. There are certain kinds of transactions, prejudicial to the interest of Revenue, which may fall under the purview of the provisions of General Anti-Avoidance rule (GAAR), POEM, and BEPS provided under section 95 to 102, section 6(3) of the Act respectively under which the impugned transaction (depreciation on the goodwill in a scheme of amalgamation) can be denied. But such provisions are not applicable for the year under consideration.
There is no dispute about the fact that the payment was made by the assessee to the shareholders of the amalgamating company in the form of shares and not through the cash payment. But the payment through the shares is a valid mode of payment.
As pertinent to note that scheme of the amalgamation can be approved under the provisions of section 2(1B) of the Act where shareholders holding not less than 75% in the value of shares of the amalgamating company become the shareholders of the amalgamated company. It is possible only when the shares are issued to the shareholders of the amalgamating company. Accordingly, we are not impressed with the finding of the AO that there was no cash payment for the acquisition of the goodwill by the assessee, rather it was recognized in the books of accounts by way of accounting entries. Thus, we hold that the impugned transaction cannot be regarded as colorable device merely on the reasoning that the assessee claimed the depreciation on the goodwill in the scheme of amalgamation.
There was an amendment to section 32, section 2(11) of the Act and other relevant sections of the Income Tax Act from the Finance Act 2021, effective from AY 2021-22. The amendment was brought into section 32 of the Act to exclude goodwill from depreciable assets.
As no depreciation is allowable on goodwill from the AY 2021-22 onwards. However, goodwill is not excluded from capital assets. The purpose of exclusion of goodwill from the depreciable assets is that it is seen that Goodwill, in general, is not a depreciable asset and in fact depending upon how the business runs; goodwill may see appreciation or in the alternative no depreciation to its value. Therefore, there may not be a justification of depreciation on goodwill. Accordingly, there is no need to provide for depreciation on goodwill of business/profession like other intangible assets or plant & machinery. But such an amendment is not applicable for the year under consideration.
Thus we reverse the order of the authorities below and direct the AO to allow the claim of the assessee for the depreciation on the impugned goodwill. Decided in favour of assessee.
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