|
Advanced Search Options
Case Laws
Showing 41 to 60 of 1612 Records
-
2022 (4) TMI 1572 - CESTAT AHMEDABAD
Rectification of mistake filed by the applicant - apparent error in the order or not - Appellant submits that the remand may be made open for the issue of limitation as well as penalty for re-considering not only on Revenue neutrality but otherwise also - HELD THAT:- It is found that in Para 4.3, though the matter was remanded on the issue of limitation as well as imposition of penalty but it is confined to the point of Revenue neutrality. However, considering the other facts of the case, it would be proper that the issue of limitation as well as imposition of penalty should be reconsidered not only limited to revenue neutrality but on the basis of other facts also. Therefore, the issue of limitation as well as imposition of penalty needs to be reconsidered as open remand.
The Tribunal order dated 24.05.2021 stands rectified to the above extent. ROM application is allowed.
-
2022 (4) TMI 1571 - ITAT PUNE
Disallowing services charges payments - CIT(A) restricted addition to the extent of 30% - assessee seeks to delete the entire service charges disallowance whereas the Revenue's endeavour is to restore the assessment findings rejecting this entire claim - HELD THAT:- We find no merit in the Revenue's instant argument as it is clear from a perusal of the assessment findings that the assessing authority had itself admitted the relevant factual position herein to be similar as in AY 1999-2000 [2022 (4) TMI 1073 - ITAT PUNE] wherein the taxpayer has already succeeded. We therefore adopt judicial consistency to accept assessee's impugned service charge claim in entirety and allow its corresponding ground.
Disallowing travelling expenditure - HELD THAT:- We make it clear first of all that the CIT(A) himself held in his detailed discussion that the assessee had been including these travelling charges as part and parcel of service charges only till AY 1999-2000 which have been separately accounted in the impugned assessment year onwards. We reiterate that the assessee's service agreement issues have already been decided against the department all along as well in the preceding paragraphs. That being the case, we find no substance in the Revenue's vehement arguments supporting the impugned disallowance in principle since the very claim stands accepted all along in principle.
Quantification of the impugned travelling expenses disallowance - Although the assessee had to indeed perform its reimbursement obligation regarding travelling expenditure to payee group, we hardly see any reason for the latter entity's employees right to claim the same regarding their family members as well. This is coupled with the fact that there is no complete reconciliation between the corresponding travelling expenses vis-à-vis the assessee's business requirement involving the group company employees' travel to sufficiently discharge its onus of having incurring this expenditure wholly and exclusively for the purpose of the business.
Faced with this situation, we find that a lump sum travel expenditure disallowance of 10% on estimation basis would be just and proper. Ordered accordingly. The assessee succeeds in the remaining 90% travelling expenditure component. Necessary computation shall follow as per law.
Depreciation disallowance on coolers - not only the learned lower authorities had accepted the assessee's identical depreciation claim pertaining to cooler provides to the bottlers/vendors by allowing the same in preceding years throughout but also the learned counsel sought to invite our attention that the accepted written down value thereon as on 01.04.1999 held as eligible for depreciation. And that the dispute therein is only for the coolers which have been added in the asset schedule of the relevant previous year. We thus observe that there is hardly any justification on the part of the learned lower authorities to adopt a different approach in the impugned assessment year's depreciation claim only for the newly added coolers installed at bottlers/vendors premises. Decided in favour of assessee.
-
2022 (4) TMI 1570 - ITATJABALPUR
Delayed employee’s contribution to the employee welfare funds - same having been deposited beyond the due date specified in its respect u/s. 36(1)(va), even as the same stand deposited by the due date/s of filing the return of income u/s. 139(1) - adjustment under section 143(1) - scope of amendment - Retrospectivity - HELD THAT:- In the Tribunals’ decision in Nikhil Mohine [2021 (11) TMI 927 - ITAT JABALPUR] while confirming the Explanations under reference to be explanatory of the law, even as signified by the clear, unambiguous language employed therein, are yet stated to be prospective inasmuch as they are applicable assessment year 2021-22 onwards.
The view recorded in the impugned order/s on the merits of the additions – even as the same agrees with that expressed by the Tribunal in Nikhil Mohine [supra] is of little consequence in view of the limited scope of an adjustment u/s. 143(1), the law on which is well-settled, with the Explanatory Notes to the Provisions of the Finance Bill, 2021 itself admitting of a conflict of judicial opinion, explaining that to be the reason for effecting the amendments per the said Explanations. The only circumstance justifying the impugned addition/s is a decision/s by the Hon’ble jurisdictional High Court No such decision, however, despite asking, stands brought to our notice by the parties, or otherwise found.
The decision by the Hon’ble jurisdictional High Court in B.S. Patel v. Dy. CIT [2007 (11) TMI 373 - MADHYA PRADESH HIGH COURT] also noticed in Nikhil Mohine (supra), is not squarely on the point and, therefore, of no assistance to the Revenue.
As regards the aspect of the retrospective nature of the Explanations under reference, we again find no difference in the view expressed in the impugned order/s, with that by the Tribunal in Nikhil Mohine (supra), i.e., per se. So, however, as afore-noted, the said Explanations themselves stand proposed as prospective amendments, as stated in the Notes on the Clauses to, and the Memorandum explaining the Provisions of, the Finance Bill, 2021, with a view to, as explained, settle the controversy arising due to the contrary view expressed by some High Courts, for which reference may be made to para 5.4 of the Tribunal’s order (also refer paras 3.1 & 3.2 above). There is, accordingly, no question of the same being given a retrospective effect.
There is, in view of the foregoing, no question of the said Explanations being read as retrospective, so as to apply for the relevant years, sustaining the impugned additions, which therefore fail. This is, however, subject to any decision/s by the Hon’ble jurisdictional High Court, which would, where so, hold, even justifying a rectification u/s. 154/254(2), and even where rendered after the date of the order sought to be rectified (Asst. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008 (9) TMI 11 - SUPREME COURT], CIT v. Aruna Luthra [2001 (8) TMI 84 - PUNJAB AND HARYANA HIGH COURT]. No such decision has been found, or otherwise pointed out by the parties, as was the case before the Tribunal in Nikhil Mohine (supra). Any such decision, even if discovered later, may operate to amend this order, or the order giving appeal effect thereto, to bring it in conformity or agreement with the said decision/s, of course, after allowing a fair opportunity of hearing to the assessee.
The impugned additions, therefore, could not have been made under the given facts and circumstances of the case, and are directed for deletion. We decide accordingly.
-
2022 (4) TMI 1569 - GUJARAT HIGH COURT
Maintainability of appeal - monetary limit for filing the tax appeals - HELD THAT:- The learned senior standing counsel appearing for the Union has filed a note addressed to the Registrar with a request that he may be permitted to withdraw the Tax Appeal No.932 of 2015 in light of the CBIC instructions dated 22nd August, 2019 revising the monetary limit for filing the tax appeals.
Appeal disposed of as not pressed.
-
2022 (4) TMI 1568 - ALLAHABAD HIGH COURT
Money Laundering - Seeking grant of bail - huge amount embezzled in the project of Gomti River Front - HELD THAT:- The matter pertains to a large scam of Rs. 1500 crores and it was an admitted fact that the applicant was the then Executive Engineer in the department and it was his responsibility to deposit the said "centage charges" - Corruption is a form of dishonesty which is undertaken by a person or persons or organization, which is entrusted with a position of authority, in order to acquire illicit benefits or abuse of power for one's personal gain.
The applicant has clearly misused the power entrusted to him and he does not deserve any leniency.
Considering the facts and circumstances of the case, the nature of offence, embezzlement of huge amount, complicity of accused as well as the rival submissions advanced by the learned counsel for the parties and without expressing any opinion on the merits of the case, the applicant cannot be released on bail.
The bail application of the applicant is rejected.
-
2022 (4) TMI 1567 - JHARKHAND HIGH COURT
Seeking grant of anticipatory bail - Money Laundering - bank loan turned into NPA - HELD THAT:- In the present case charge sheet has been submitted, accused persons were not arrested during investigation and had cooperated in it. Under the circumstance the Anticipatory Bail application is allowed.
Accordingly, the petitioners above-named are directed to be released on anticipatory bail on furnishing bail bond of Rs. 1,00,000/- each with two sureties of the like amount each to the satisfaction of learned court below.
Bail application allowed.
-
2022 (4) TMI 1566 - ITAT MUMBAI
Revision u/s 263 - As per CIT AO was not correct in allowing the interest on perpetual debt instruments without examining and verifying the allowability of such expenditure - HELD THAT:- As demonstrated from the detailed submission and copies of documents placed in the paper book that assessing officer has made detailed inquiry/verification during the course of assessment proceedings that assessee has borrowed funds for business use by issue of debentures. The borrowed fund were payable on call option exercising by company after the 10th year or any at the end of every year thereafter. It was also explained that the lenders were not entitled to share any surplus or bear any loss like shareholders.
Debentures trustee were appointed to safeguard interest of the lenders. The assessee company had also stated on the basis of aforesaid discussion that it had borrowed fund for the purpose of its business and the interest on debenture was deductible in computing the income from profit and gains from business and profession.
Thus after considering the detailed material furnished by the assessee during the course of assessment proceedings before the assessing officer we observe that the assessee has categorically explained to the assessing officer with relevant supporting material that it has issued unsecured perpetual non-convertible debentures and such lenders were not entitled to share any surplus or bear any loss like shareholders. These debentures were entitled for fixed interest @ 11.40% along with redemption after the 10th year. These facts and submission were also brought to the notice of the ld. Pr.CIT during the course of proceedings u/s 263 however, CIT without controverting these undisputed fact held that assessment order was erroneous so far it was prejudicial to the interest of Revenue. Therefore, we consider that the order passed by the ld. Pr.CIT u/s 263 is unjustified and we quash the same. Therefore, we allow the ground of appeal of the assessee.
-
2022 (4) TMI 1565 - PUNJAB AND HARYANA HIGH COURT
Reasonableness of Clause 33 (7) of the Agreement/s between the petitioner and respondents - requirement of pre-deposit for invoking the arbitration - HELD THAT:- Clause 33(7) of the Agreement, which has been reproduced in the foregoing paras, especially provides that where the party invoking arbitration is the contractor, no reference for Arbitrator shall be maintainable unless the contractor furnishes a security deposit of a sum determined as per the table given therein. A specific percentage based on the claim amount is provided in Clause 33 (c). It is further provided that the sum so deposited on termination of Arbitration proceedings shall be adjusted against the cost, if any, awarded by the Arbitrator against the claimant party and the balance remaining after such adjustment, in the absence of any such cost being awarded, the whole of the sum shall be refunded to the contractor within one month from the date of the Award.
Admittedly, in the case of M/s ICOMM Tele Limited’s case [2019 (3) TMI 600 - SUPREME COURT], the requirement was of ‘deposit – at-call’ of 10% of the amount claimed. Moreover, it was provided that in the event of an award in favour of the claimant, the deposit would be refunded to him in proportion to the amount awarded with respect to the amount claimed and the balance, if any, would be forfeited and paid to the other party. There was admittedly no provision of any refund or adjustment of the amount.
Discussion of the judgement of S.K. Jain’s case [2009 (2) TMI 926 - SUPREME COURT] makes it crystal clear that such like clauses, which provide for adjustment and refund to the party making the deposit after the passing of the award are materially different from the clause which was under challenge in M/s ICOMM Tele Limited’s case. In case of M/s ICOMM Tele Limited’s case, the objectionable clause 25 (viii) was struck down finding the same to be arbitrary.
Argument raised by learned counsel for the petitioner/s that once the Arbitrator was appointed by the Chief Administrator himself without the pre-deposit being made, there is no question of insistence upon the same, is an argument which is devoid of any merit, hence rejected. This is so for the reason that it is clearly mentioned in impugned order dated 09.11.2020 itself that Chief Administrator Housing Board Haryana, while appointing the Arbitrator directed the Arbitrator to ensure compliance of the Arbitration Agreement including the clause regarding the security deposit in respect of the claims (counter claims). Therefore, appointment of the Arbitrator cannot be in any manner be construed to be a waiver of the clause requiring pre-deposit by the petitioner.
There are no illegality, irregularity or perversity in the impugned order dated 09.11.2020, Annexure P-4, passed by the learned Arbitrator - petition dismissed.
-
2022 (4) TMI 1564 - ITAT AHMEDABAD
Allowability of making new claim made in return filed u/s 153A - disallowance of the carry forward of business loss - assessee had not claimed loss in the return of income filed u/s 139(1) of the I.T. Act, but claimed losses when filing the return u/s 153A - HELD THAT:- Assessments were not abated, and the claim of business losses admittedly emanated from incriminating material i.e the foreign bank account of the assessee. Income from incriminating material is to be considered after defraying all expenses that are incurred for earning such income.
The decision of CIT vs Piara Singh [1980 (5) TMI 2 - SUPREME COURT] is relevant for the same. The business losses therefore qualified as being in the nature of Income from incriminating material required to be assessed to tax in such cases. There is no provision of law, pointed out to us, debarring claim of expenses or losses emanating from incriminating material. To put it otherwise, there is no provision of law requiring only positive incomes emanating from incriminating material to be disclosed/added to the incomes of the assessee in assessment framed u/s 153A of the Act denying claim of expenses and losses emanating therefrom. The legislature, we are aware has debarred claim of losses/expenses against incomes assessed u/s 68/69/69A /69B/69C of the Act specifically so providing u/s 115BBE of the Act, which provides for levy of taxes at special rates on such incomes.
The returns filed u/s 153A of the Act disclosing losses emanating from incriminating material is therefore as per law to be treated as filed in returns u/s 139 of the Act and entitled to be set off against profits from such incriminating material in subsequent years. And to this extent of set off, they certainly do not qualify as fresh claim made in return filed u/s 153A of the Act, since they were necessarily to be disclosed at the same time and alongwith the positive incomes arising from the incriminating material. These losses cannot be considered in isolation from the profits to qualify as” fresh claim”, not originally claimed in the return filed u/s 139 of the Act.
We may clarify that set off of these business losses from any other income originally returned, other than profits from this business, would have qualified as a fresh claim and to which the assessee would not be entitled. The proceedings u/s 153A of the Act, being in consequence to search undertaken u/s 132 of the Act, cannot be utilized by the assessee to seek relief not claimed earlier. The proceedings are analogous to proceedings u/s 147 of the Act, as being for the benefit of the Revenue and not the assessee. The decision of the Hon’ble apex court in the case of CIT vs Sun Engineering Works Pvt. Ltd. [1992 (9) TMI 1 - SUPREME COURT] is relevant for the purpose.
Having held so, that the claim of losses emanating from incriminating material, made in returns filed u/s 153A of the Act are to be treated as filed u/s 139 of the Act and noting that the said returns undisputedly were filed within the stipulated time, the assessee, we hold, was entitled to the benefit of carry forward and set off of the same in subsequent years, as per law. The findings of the Ld. CIT(A) in this regard are also upheld.
The order of the Ld. CIT(A) deleting the disallowance of losses and their carry forward and set off, in the assessment years before us, is therefore upheld. Ground of appeal No. 1 of the Revenue is dismissed.
Addition u/s 68 - Credits in the foreign bank account of the assessee unexplained - Addition deleted by the ld. CIT(A) - HELD THAT:- As noted from the order of the Ld. CIT(A), filed all explanations regarding the credits in the bank account which were noted by the CIT(A) as relating to transactions in securities, dividend income, interest, distribution etc. The assessee also filed portfolio statements and calculation of profits and reconciled the figures in the bank statement with the profits /losses computed and returned in the income filed by the assessee u/s 153A of the Act.
Assessee also filed evidences showing declaration of certain credits in the bank account, under the Black Money Act as also evidences of certain credits wrongly given being reversed subsequently by the Bank. Each and every entry was so explained by the assessee as having been duly accounted for and returned as business income or disclosed under the Black Money Act or wrongly credited and thus subsequently reversed by the Bank.
After thoroughly examining these evidences and reconciliations, the Ld. CIT(A) has accepted the plea of the assessee that the said entries could not be taxed as unexplained, having been returned as business income or explained otherwise. All these evidences were also filed before us in voluminous paper book. The Ld. DR was unable to point out any infirmity in the finding of the Ld.CIT(A). He was unable to point out any credit entry wrongly accepted by the Ld.CIT(A) as duly explained.
Thus no merit in the ground raised by the Revenue for treating the impugned credits as unexplained and thus taxable u/s 68 - Decided against revenue.
-
2022 (4) TMI 1563 - SUPREME COURT
Overturning of order of acquittal against A-14 to A-16 - witnesses who spoke about these Accused's presence failed to consider the import of Section 149 Indian Penal Code - Scope of Appeal filed against the Acquittal - Delay in sending the (FIR) First Information Report to the Magistrate - Delay in Recording the Statement Under Section 161 Code of Criminal Procedure - Recovery Under Section 27 of the Evidence Act.
Scope of Appeal filed against the Acquittal - HELD THAT:- While dealing with an appeal against acquittal by invoking Section 378 of the Code of Criminal Procedure, the Appellate Court has to consider whether the Trial Court's view can be termed as a possible one, particularly when evidence on record has been analyzed. The reason is that an order of acquittal adds up to the presumption of innocence in favour of the Accused. Thus, the Appellate Court has to be relatively slow in reversing the order of the Trial Court rendering acquittal. Therefore, the presumption in favour of the Accused does not get weakened but only strengthened. Such a double presumption that enures in favour of the Accused has to be disturbed only by thorough scrutiny on the accepted legal parameters.
Delay in sending the (FIR) First Information Report to the Magistrate - HELD THAT:- The first information report in a criminal case starts the process of investigation by letting the criminal law into motion. It is certainly a vital and valuable aspect of evidence to corroborate the oral evidence. Therefore, it is imperative that such an information is expected to reach the jurisdictional Magistrate at the earliest point of time to avoid any possible ante-dating or ante-timing leading to the insertion of materials meant to convict the Accused contrary to the truth and on account of such a delay may also not only gets bereft of the advantage of spontaneity, there is also a danger creeping in by the introduction of a coloured version, exaggerated account or concocted story as a result of deliberation and consultation. However, a mere delay by itself cannot be a sole factor in rejecting the prosecution's case arrived at after due investigation. Ultimately, it is for the Court concerned to take a call. Such a view is expected to be taken after considering the relevant materials.
Delay in Recording the Statement Under Section 161 Code of Criminal Procedure - HELD THAT:- The Investigating Officer is expected to kick start his investigation immediately after registration of a cognizable offense. An inordinate and unexplained delay may be fatal to the prosecution's case but only to be considered by the Court, on the facts of each case. There may be adequate circumstances for not examining a witness at an appropriate time. However, non-examination of the witness despite being available may call for an explanation from the Investigating Officer. It only causes doubt in the mind of the Court, which is required to be cleared - Similarly, a statement recorded, as in the present case, the investigation report is expected to be sent to the jurisdictional Magistrate at the earliest. A long, unexplained delay, would give room for suspicion.
Recovery Under Section 27 of the Evidence Act - HELD THAT:- Section 27 of the Evidence Act is an exception to Sections 24 to 26. Admissibility Under Section 27 is relatable to the information pertaining to a fact discovered. This provision merely facilitates proof of a fact discovered in consequence of information received from a person in custody, Accused of an offence - The onus is on the prosecution to prove the fact discovered from the information obtained from the Accused. This is also for the reason that the information has been obtained while the Accused is still in the custody of the police. Having understood the aforesaid object behind the provision, any recovery Under Section 27 will have to satisfy the Court's conscience. One cannot lose sight of the fact that the prosecution may at times take advantage of the custody of the Accused, by other means. The Court will have to be conscious of the witness's credibility and the other evidence produced when dealing with a recovery Under Section 27 of the Evidence Act.
There is a structured pattern in the recovery of A-10 to A-13. There appears to be some anxiety on the part of the prosecution to make compulsory recoveries. The recoveries are said to have been made from the house of P.W. 21, having no connection with A-10. The fallacious notion that the recovery of such an incriminating Article was made from a place that might also be accessible to the P.W. 21, is also one of the doubts we sense in the following factual analogy of this case. P.W. 21 is also the same witness who has given his 161 Code of Criminal Procedure statement nine days after the incident pertaining to the Accused.
The conviction rendered by the High Court against the Appellants in Criminal Appeal No. 430-431 of 2015 arrayed as A-10 to A-13 stands set aside. Consequently, the appeals filed by Accused Nos. A-10 to A-13 being Criminal Appeal No. 430-431 of 2015 are allowed by setting aside the judgment rendered by the High Court and restoring the acquittal rendered by the Trial Court. Bail bonds, if any, pertaining to A-10 to A-13 stand discharged.
-
2022 (4) TMI 1562 - CALCUTTA HIGH COURT
Corruption - appointment in the posts of assistant teachers by the School Service Commission - no meeting of the 5 member committee held - HELD THAT:- There is a deliberate false statement made by Dr. S.P. Sinha before this court which has been exposed from the annexure of the supplementary affidavit in this matter, and the said Dr. Sinha was the convenor of the said five-member committee.
Therefore, this matter is also required to be investigated by CBI by registering a new case in this matter as it relates to appointment of Assistant Teachers in classes IX and X - CBI is directed to investigate the matter and to interrogate Dr. Santi Prasad Sinha specially and other members of the committee again in this matter in view of the startling revelation made in Annexure P-5 of the supplementary affidavit.
The matter will appear tomorrow under the heading 'To be mentioned' for a report from the CBI, as indicated above, and again on 27th April, 2022 for further hearing of the matter.
-
2022 (4) TMI 1561 - MADRAS HIGH COURT
Reopening of assessment - Limitation period to issue notice - distinction between issuing of notice and delivery of notice or receipt of notice - HELD THAT:- Limitation prescribed for completing the assessment under Section 147 is at Section 153(2) of the Act which says - No order of assessment, re-assessment or re-computation shall be made under Section 147 after the expiry of 9 months from the end of the financial year in which the notice under Section 148 was served
As in the present case, the limitation started from the last date of financial year during which the notice u/s 148 was served on the assessee. The word 'served' has been predominantly and unambiguously used by the legislature, that means, the limitation starts only from the last date of the financial year, wherein the notice was served on the assessee and not from the notice was 'issued' or 'sent' by the Revenue.
In the case in hand, admittedly the notice dated 30.03.2018 has been served on the assessee only on 03.04.2018. If that being so, 03.04.2018 is the date of serving of notice. Therefore, if that date falls in a particular financial year, the limitation starts only after the last date of that financial year. Here in the case in hand, since the notice was served on 03.04.2018, since that falls in the financial year 2018-19, the last date of the financial year being 31.03.2019, the limitation of nine months as contemplated under Section 153(2) of the Act would necessarily start only from 01.04.2019 and not from 01.04.2018 as projected by the learned counsel for the assessee.
In this context, the submission made by the learned Standing Counsel for the Revenue is to be accepted.
If that being the factual position, certainly the order impugned dated 21.02.2022 passed under Section 147 of the Act is well within the limitation of nine months period and therefore it cannot be stated that it is beyond the period of limitation and hence on that ground it can be assailed before this Court invoking the extraordinary jurisdiction.
Hence, this Court has no hesitation to hold that the ground raised by the petitioner on the basis of limitation as contemplated under Section 153(2) of the Act is to be answered in favour of the Revenue and against the assessee.
Thus, impugned order cannot be assailed successfully on the ground of limitation within the meaning of Section 153(2) of the Act. Hence, the challenge fails and the writ petition is liable to be rejected.
-
2022 (4) TMI 1560 - KARNATAKA HIGH COURT
Faceless assessment - Initiation of the proceedings u/s 148 - denial of due opportunity - letter intimating the schedule of personal hearing through video conference and personal hearing was scheduled to be held on 30.03.2022 at 11:30 a.m. The petitioner’s case is that the petitioner logged in well in time and continued to be logged in beyond 11:30 a.m. but the scheduled hearing did not commence. The petitioner has uploaded response at 11:45 a.m.
HELD THAT:- The letter of intimation and the response immediately thereafter indicate that the petitioner had indeed logged in well in time and continued to be logged in until 11:50 a.m. As regards the petitioner’s grievance that the personal hearing was a non-starter, the Assessing Officer has perfunctorily opined that the screenshots relied upon by the petitioner are for the period prior to 11:30 a.m. There cannot be a hyper technical approach, especially with the petitioner placing on record the response at 11:50 a.m., which is not contradicted.
Therefore, this Court is of the considered view that the petitioner must succeed on this limited ground with opportunity to the respondents to extend another personal hearing to the petitioner in accordance with Faceless Scheme parameters.
-
2022 (4) TMI 1559 - DELHI HIGH COURT
Dishonour of Cheque - reference is sought to be made under sub section (2) of Section 395 Cr.P.C. by way of which a magistrate may refer for the decision to the Hon'ble High Court any question of law arising in the hearing of a case - HELD THAT:- In terms of the judgment of the Hon’ble Supreme Court in ADALAT PRASAD VERSUS ROOPLAL JINDAL & OTHERS [2004 (8) TMI 647 - SUPREME COURT] and SUBRAMANIUM SETHURAMAN VERSUS STATE OF MAHARASHTRA & ANR. [2004 (9) TMI 605 - SUPREME COURT], the Trial Court cannot be conferred with inherent powers, either to review or recall the order of issuance of process - As held in Adalat Prasad and Subramanium Sethuraman, the Magistrate is deluded with the power to revisit the order of issue of process, except to the limited extent that the Court has no jurisdiction to try the case. In other words, the Trial Court has no inherent jurisdiction to revisit the order of issue of process within the meaning of the provisions of Section 258 Cr.P.C.
Further, it has been clearly held that, in any event, the provisions of Section 258 Cr.P.C. are not applicable to complaints under Section 138 of the Negotiable Instruments Act, 1881 (N.I. Act).
The Court of a Magistrate does not have the power to discharge the accused upon his appearance in Court in a summons trial case based upon a complaint in general, and particularly in a case under Section 138 of the N.I. Act, once cognizance has already been taken and process issued under Section 204 Cr.P.C. - Reference answered accordingly.
-
2022 (4) TMI 1558 - ITAT MUMBAI
Disallowance u/s. 40 (a)(ii) in respect of state taxes paid in overseas countries - HELD THAT:- This issue is already covered by the Co-ordinate Bench decision of this Tribunal in assessee’s own case for A.Y.2009-10 [2019 (11) TMI 408 - ITAT MUMBAI] State taxes paid overseas cannot be allowed as deduction in view of the provisions of section 40(a)(ii) of the Act.
It is the specific plea of the assessee that the State tax is not covered either under Indo-US or Indo-Canada tax treaty, hence, not eligible for any relief under section 90 of the Act. Pertinently, unlike section 91 read with Explanation-(iv), section 90 does not provide for inclusion of tax levied by any State/ local authority of that country within the expression 'income tax'. In view of the aforesaid, we direct the Assessing Officer to verify whether the State taxes paid by the assessee overseas are eligible for any relief under section 90 of the Act and if it is not found to be so, assessee's claim of deduction should be allowed.
Disallowance made on account of advertisement expenses - HELD THAT:- This issue is already covered by the Co-ordinate Bench decision of this Tribunal in assessee’s own case for A.Y.2009-10 [2019 (11) TMI 408 - ITAT MUMBAI] evidences were not furnished before the Departmental Authorities, to afford a fair opportunity to the Department to verify the authenticity of assessee's claim vis-a-vis the additional evidences furnished before us, we restore the issue to the AO for de novo adjudication after providing reasonable opportunity of being heard to the assessee. We make it clear, our aforesaid direction is only with regard to the experience certainty expenditure - The decision of learned Commissioner (Appeals) on this issue is modified to this extent only.
Foreign tax credit in respect of income pertaining to Section 10A/10AA eligible units in India - HELD THAT:- Credit for foreign tax paid shall be eligible only for nine countries listed above. Respectfully following the aforesaid decision for the A.Y.2009-10 in assessee’s own case [2019 (11) TMI 408 - ITAT MUMBAI] decided in favour of assessee.
Deduction of education cess - Though this issue is covered in favour of the assessee by the decision of Sesa Goa Limited [2020 (3) TMI 347 - BOMBAY HIGH COURT] we find that there is an amendment by the Finance Act 2022 in Section 40(a)(ii) wherein it had been categorically stated that no deduction on account of education cess shall be allowed while computing the income from business and profession. Admittedly, this amendment has been brought in statute with retrospective effect and is accordingly, applicable for the year under consideration. Hence, in view of the amendment in the statute, this additional ground raised by the assessee on account of claim for deduction of education cess is dismissed.
Deduction u/s.10AA on commercial profit instead of on income from business and profession - HELD THAT:- The expression “profits and gains” derived was subject matter of adjudication in the case of Vijay Industries Ltd. [2019 (3) TMI 171 - SUPREME COURT] wherein the Hon”ble Apex Court observed that the profits and gains referred to commercial profits without deducting depreciation and investment allowance as per the Act. Since this aspect was not raised by the assessee before the lower authorities, accordingly, the lower authorities did not have an occasion to give their finding on the same. Hence, in the interest of justice and fair play, we deem it fit and appropriate to remand this issue raised in the additional ground to the file of the ld. AO for denovo adjudication Accordingly, the additional ground raised by the assessee in respect of claim of deduction u/s.10A of commercial profits is allowed for statistical purposes.
TDS u/s 195 - Disallowance of expenditure on imported software u/s.40(a)(i) - non-deduction of tax at source - HELD THAT:- As given the definition of "royalties' contained in article 12 of the DTAAs there was no obligation on the persons mentioned in section 195 of the Act to deduct tax at source, as the distribution agreements and end-user licence agreements did not create any interest or right in such distributors or end-users, which would amount to the use of or right to use any copyright. The provisions contained in the Act which deal with royalty, not being more beneficial to the assessees, had no application in the facts of these cases. The amounts paid by resident Indian end-users or distributors to non-resident computer software manufacturers or suppliers, as consideration for the resale or use of the computer software through end-user licence agreements or distribution agreements, was not royalty for the use of copyright in the computer software, and did not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Act were not liable to' deduct any tax at source under section 195 - Decided against revenue.
Disallowance u/s.14A r.w.r. 8D - HELD THAT:- We find that it is the duty of the ld. AO to record objective satisfaction with cogent reasons as to why the voluntary disallowance made by the assessee is incorrect having regard to the accounts of the assessee. Without recording such objective satisfaction with cogent reasons, the ld. AO cannot proceed directly to apply the computation mechanism provided in Rule 8D(2) of the Income Tax Rules and make disallowance u/s.14A of the Act. This issue is also addressed by the decision in the case of Maxopp Investments [2018 (3) TMI 805 - SUPREME COURT] Hence, the disallowance made by the ld. AO u/s.14A of the Act has been rightly deleted by the ld. CIT(A) for want of recording of objective satisfaction with cogent reasons. Accordingly, the ground Nos. 2 & 3 raised by the Revenue for the A.Y.2012-13 are hereby dismissed.
Nature of expenses - Disallowance of payment made towards Tata Brand equity subscription which was treated as capital expenditure - HELD THAT:- We find that this Tribunal in assessee’s group concern’s case of Tata Autocomp Systems Ltd. [2013 (6) TMI 909 - ITAT MUMBAI] as deleted the disallowance made by the A.O. on account of subscription paid by the assessee to Tata Sons Ltd. towards brand equity and promotion scheme and allow ground of assessee’s appeal.
TDS u/s 195 - disallowance of expenditure on commission paid to non-residents which was disallowed for non-deduction of tax at source u/s.40(a)(i) - HELD THAT:- As decided in own case for A.Y.2009-10 in [2019 (11) TMI 408 - ITAT MUMBAI] factual finding recorded by learned Commissioner (Appeals) that the non-resident agents have rendered the services in their respective countries and do not have either any business connection in India or any PE in India has not been controverted by the Revenue. Further, the nature of payment viz. commission has also not been disputed by the Revenue. That being the case, since the commission paid to the non-resident agents is not chargeable to tax in India at their hands, there is no necessity for the assessee to withhold tax under section 195(1) of the Act on such payment.
Method of computation of deduction u/s.10AA - whether the list of items that are subject matter of reduction from export turnover would be liable for reduction from “total turnover” also, while computing deduction u/s.10AA? - HELD THAT:- We find that this issue is no longer res integra in view of the decision of the Hon”ble Jurisdictional High Court in the case of CIT vs. TCS Limited [2019 (4) TMI 1439 - BOMBAY HIGH COURT] held that the total turnover for the purpose of section 10 of the Act cannot be understood as defined for the purpose of section 80 HHE. It was further held that thus the expenses which are to be excluded from the export turnover, would also have to be excluded for the purpose of computing total turnover.
TP adjustment made in respect of provision of software consultancy services - Partial relief granted by CIT(A) - HELD THAT:- As decided in own case [2019 (11) TMI 408 - ITAT MUMBAI] it becomes clear that significant marketing functions are being performed and distribution and marketing risk are being taken by the AEs. On examination of the financials of the subsidiaries it is revealed that some subsidiaries are still making loss at net level which signifies that some risk is being borne by the AEs. It has further been brought on record that the manpower base of AEs performed various functions relating to marketing as well as client co-ordination. The AEs have developed sufficient competency to handle the marketing work independently. The entire contract related work is performed by the AEs, though, in cooperation with the assessee. Thus, it is quite natural that for being a sufficiently motivated work force, the AEs are compensated at return on sales and not merely on value added costs. Therefore, learned Commissioner (Appeals) was justified in directing the Transfer Pricing Officer to adopt the PLI of gross margin on sales.
As regards consideration by the Transfer Pricing Officer, the outsourcing / sub-contracting cost to assessee as a pass through cost, learned Commissioner (Appeals) was absolutely correct in observing that the decision of the Transfer Pricing Officer to exclude such costs while computing the margin of the AEs is incorrect. When similar cost incurred by the comparables were not excluded while computing their margin, a different treatment cannot be given to such costs in case of the AEs.
Alternative benchmarking furnished by the assessee before the Transfer Pricing Officer by considering the AEs in different geographic locations as tested parties with the comparables selected on the basis of the respective geographic locations furnished before the Transfer Pricing Officer were not properly considered. However, in course of appeal proceedings, the learned Commissioner (Appeals) examined them in detail and after a detailed analysis approved some comparables selected by the assessee and also added some new comparables. Whereas, the comparable selected by the Transfer Pricing Officer were not on the basis of any detailed search process. At least, no such analysis is either forthcoming from the order of the Transfer Pricing Officer or could be brought to our notice by learned Departmental Representative. On the contrary, on a thorough and careful reading of the impugned order of learned Commissioner (Appeals), we are of the view that learned Commissioner (Appeals) has taken pains to examine in detail the alternative benchmarking done by the assessee with foreign comparables and after detailed analysis has shortlisted the final comparables to be considered for comparability analysis.
TP adjustment made in respect of provision of loans to Associated Enterprises (AEs) - HELD THAT:- As decided in own case [2019 (11) TMI 408 - ITAT MUMBAI] primary contention of the assessee that the advance made to the AEs is in the nature of quasi equity and falls within shareholder's activity has not been properly addressed by the Departmental Authorities keeping in view the ratio laid down in the relevant case laws. It also requires deliberation whether it can be considered as an international transaction under section 92B r/w Explanation-1(c). Since, the aforesaid legal and factual aspects have not been considered properly, we are inclined to restore the issue to the file of the Assessing Officer for de novo adjudication after due opportunity of being heard to the assessee. The Assessing Officer must examine all relevant facts to find out the exact nature of the advances made to the AEs. He should also examine the applicability of the ratio laid down in the case of DLF Hotel Holdings Ltd. [2016 (11) TMI 1031 - ITAT DELHI] and any other case laws which may be cited before him. The assessee must be afforded reasonable opportunity of being heard.
TP Adjustment made in respect of provision of guarantee - HELD THAT:- As in assessee’s own case in A.Y.2009-10 in [2019 (11) TMI 408 - ITAT MUMBAI] after introduction of Explanation-(i)(c) to section 92B of the Act, with retrospective effect from 1st April 2002, provision of guarantee to AEs has to be considered as an international transaction. Different Benches of the Tribunal have also expressed similar view on the issue. Therefore, we hold that the provision of guarantee to the AEs is an international transaction. In fact, the aforesaid view has been expressed in WNS Global Services Pvt. Ltd. [2019 (1) TMI 1128 - ITAT MUMBAI] Therefore, we direct the Assessing Officer to charge guarantee commission @ 0.5% per annum both on performance / lease guarantee as well as financial guarantee.”
Disallowance of expenditure u/s.40(a)(ia) in respect of year end provision both under normal provisions as well as in the computation of book profits u/s.115JB - HELD THAT:- We find that provision has been made in the books by the assessee as per the standard accounting practices followed by it and that since the accounts of the company are closed within short period after the end of the year, before which the data or invoice from the concerned vendor was not available with the assessee whereas the services had already been provided by the vendor to the assessee. In respect of these items, the assessee had made provision for expenses in its books as per the applicable accounting standard and as per the generally accepted accounting principles on accrual basis. Since the concerned vendor account is not credited by the assessee they are not identifiable for want of bills, the assessee has credited provision for expenses and had not deducted tax at source for the same, as according to the assessee, only when the party name is identifiable, the provisions of 40(a)(ia) of the Act would come into operation. Accordingly, it pleaded that no liability of TDS could be fastened on the assessee when the payee is not identifiable. We further find that the very same issue has been the subject matter of adjudication of this Tribunal in the case of Mahindra and Mahindra Ltd. [2013 (9) TMI 522 - ITAT, MUMBAI] AO has not examined the issue about year-end payments.There is a difference between the payments that are made during the year and the payments made at the fag-end of the year.In our humble opinion in 2nd category of payments tax has been detected in the subsequent year when Bills are booked. In this regard we have also considered the amendment made to Sec.40(a)(ia) by the finance act,2008, with retrospective effect from 1.4.2005.We have also perused the case laws relied upon by the AR.
-
2022 (4) TMI 1557 - MADRAS HIGH COURT
Demand of CENVAT Credit alongwith interest and penalty - invocation of extraordinary jurisdiction of the court - violation of principles of natural justice - violation of statute - want of Jurisdiction - HELD THAT:- Insofar as entertaining a writ petition challenging the order like the present one which is impugned herein passed by the original authority by way of Order-in-Original when there is a clear alternative, effective statutory appeal remedy is available, the same should be exhausted, without which, the litigant normally would not be permitted to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution except under the following three circumstances (i) Violation of Principles of Natural Justice; (ii) Violation of Statute; and (iii) For want of jurisdiction.
The mere pendency of any issue before the Court would not preclude the Assessing Authority or the original Adjudicating Authority to proceed in accordance with law, especially under the provisions of the statute under which they are functioning.
Unless and until there is a specific order of stay prohibiting or forbearing the authorities concerned from proceeding further in a particular proceedings, generally such kind of request made by the assessee or noticee to defer the hearing to get a decision in the related case pending before any Court of law would not be entertained. Therefore, that kind of request if it is rejected it cannot be termed as 'violation of principles of natural justice'.
This Court feels that, in this writ petition, without entertaining the same on merits, the petitioner can be relegated to go before the Appellate Authority within a time frame - Petition dismissed.
-
2022 (4) TMI 1556 - BOMBAY HIGH COURT
Validity of order u/s 92CA(3) making upward adjustment - Reference to dispute resolution panel u/s 144C - failure to pass a draft assessment order u/s 144C(1) - HELD THAT:- Since Respondent No.1 was to give effect to the order passed by the TPO, as noted earlier, a draft of the proposed order ought to have been served upon petitioner before the final impugned order was passed.
In this case there is no dispute that the provisions of Section 144C of the Act read with Section 92CA of the Act was applicable and Section 144C (1) of the Act mandates that the draft assessment order was necessary before the Assessing Officer can proceed to pass the final assessment order. Even in partial remand proceedings from the Tribunal, it is averred the Assessing Officer is obliged to pass the draft assessment order under Section 144C(1) of the Act and passing draft assessment order is without jurisdiction. As noted earlier, no reply has been filed, though respondent had enough time, denying these averments.
Having perused the petition and also the impugned order, it does appear that no draft assessment order has been issued. In the circumstances, the impugned order is quashed and set aside.
-
2022 (4) TMI 1555 - BOMBAY HIGH COURT
Reopening of assessment u/s 147 - statutory approval for issuance of notice u/s 148 - HELD THAT:- In our view, for the case at hand, the approval ought to have been given by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner and not by the Additional Commissioner of Income Tax. We find support for this view in judgment of this court in Voltas Ltd. Vs. ACIT [2022 (4) TMI 594 - BOMBAY HIGH COURT] and J.M. Financial and Investment Consultancy Services Pvt. Ltd. [2022 (4) TMI 1446 - BOMBAY HIGH COURT]. Therefore, on this ground alone the impugned notice issued u/s 148 is quashed and set aside. Decided in favour of assessee.
-
2022 (4) TMI 1554 - BOMBAY HIGH COURT
Reopening of assessment - Initiation of assessment proceedings u/s 148 - Scope of new Section 148A -notices issued u/s 148 are after 31st March 2021 but the procedure followed is the old procedure which came to be replaced by the Finance Act, 2021 with effect from 1st April 2021.
HELD THAT:- Counsel state that they do not have any instructions of any assessment order having been communicated to petitioner. Statement accepted.
Even if the assessment order is passed, still it will be non-est as the notice issued under Section 148 of the Act itself is being set aside.
As already held in Tata Communications Transformation Services Limited [2022 (4) TMI 44 - BOMBAY HIGH COURT] that such notices are bad in law and have to be quashed. Accordingly, notice impugned in these petitions are hereby quashed and set aside.
-
2022 (4) TMI 1553 - BOMBAY HIGH COURT
Suit for declaration that it is the owner of the suit shares - restraint from exercising any right in respect of the pledged securities - plaintiff discovered that the consideration for the pledge of the suit shares is fraudulent and unlawful - HELD THAT:- The principles which govern the amendment of pleadings are crystallized. The Court is empowered, at any stage of the proceedings, to allow either party to amend the pleadings in such a manner and upon such terms as may be found just. Nay, all such amendments shall be allowed to be made as may be necessary for the purpose of determining the real question in controversy between the parties. The determinative factor is whether the proposed amendment is necessary for determining the real question in controversy between the parties.
Undoubtedly, the plaint is premised on the limited nature of the rights of pledgee i.e. either sale the pledged security and appropriate the sale proceeds or bring a suit and retain the pledged security. The plaintiff has assailed the action of defendant no. 1 in transferring the pledged shares in favour of defendant no. 2 and the exercise of rights over the pledged shares by defendant no. 2 as if the general opportunity in those shares has been transferred to defendant no. 2. The case now sought to be set up by the plaintiff is that the very transaction of creation pledge was vitiated by fraud. Support is sought to be drawn from the lodging of the complaint by defendant no. 2 in respect of the said transaction.
Firstly, the lodging of the complaint by defendant no. 2 does not seem to be in serious contest. Secondly, the fact remains that amendment is sought at the nascent stage of the trial. Neither the element of delay nor want of due diligence has any role to play. Thus, there is no likelihood of prejudice to the defendants. The defendants will have adequate opportunity to meet the case proposed to be set up by the plaintiff.
Application allowed.
........
|
