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Showing 61 to 80 of 1305 Records
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2023 (2) TMI 1245 - SUPREME COURT
Classification/discrimination made by the Greater Noida Authority (G Noida) in payment of compensation on the basis of the landholder being 'Pushtaini' and 'Gair-Pushtaini - HELD THAT:- TThe establishment of Greater Noida, was done for a noble purpose, i.e., to accommodate in the city all those who came travelling from every corner of the country in search of a better life. While doing so however, as can be seen in the present case, some residents whose land was subject to acquisition in the pursuit of the said aim, were faced with discrimination. In such circumstance, it becomes the duty of this Court to dispense justice, and rectify the harm caused to those at the receiving end of the discrimination.
The impugned judgment passed by the Full Bench of the High Court is not liable to be sustained and stands set aside. As a consequence, the Writ Petition filed by the Appellants before the High Court stands allowed and the Appellants are held entitled to the reliefs claimed in the said Writ Petition.
Appeal allowed.
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2023 (2) TMI 1244 - BOMBAY HIGH COURT
De-listing letter of 10th November 2022 - Petitioner is de-listed for nine months from the list of approved vendors for the manufacture and supply of jointless hard Drawn Grooved Copper contact wires or HDGC wires - HELD THAT:- There is here a procedural irregularity in the absence of cogent reasons, the failure to take into account relevant material and the reliance on extraneous or immaterial factors, that meets the Wednesbury unreasonableness standard. As to proportionality, nowhere in the impugned order we find a justification for a de-listing for nine months.
It can only be presumed that it was less than 12 months because someone might have described that as a blacklisting, and hence completely illegal. But that still does not answer why it should be this particular period.
It is impossible to sustain the impugned order at Exhibit "A" - petition allowed.
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2023 (2) TMI 1243 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Fraudulent scheme for issuance of GDRs by the Company - SEBI found that Vintage was the sole subscriber to the GDR and that the Company did not disclose this fact with clarity that only one entity had subscribed to the entire GDR and, therefore, misled the investors and loan agreement and the pledge agreements were not disclosed to the stock exchange or to the shareholders of the Company - WTM restrained the Company, Chairman and its Managing Director from accessing the securities market for a period of three years and one year respectively and imposed a sum of Rs.10 crore upon the Company and Rs.10 lakh each upon the Chairman and Managing Director - whether directions imposed by the WTM and the penalty imposed by the AO was harsh and excessive?
HELD THAT:- Where the punitive measure is harsh or disproportionate to the offence which shocks the conscience it is within the discretion of the Court to exercise the doctrine of proportionality and reduce the quantum of punishment to ensure that some rationality is brought to make unequals equal.
In our opinion, the penalty imposed is excessive and disproportionate to the violation and is also discriminatory.
Excessive penalty imposed upon the Company does not make any sense. In the instant case, there are public shareholders and workers. The Company is a running concern. Penalising the Company with such heavy penalty is in fact penalising the shareholders which is not justifiable especially for a running company. Further, the money raised through GDRs has been received by the Company and has not been misappropriated. The same has been utilitised for the purpose for which the GDR was issued which fact has not been disputed. Thus, it is not a case of defalcation of the funds.
While affirming the order of the AO for the violations committed by the Company we reduce the penalty against the Company to Rs. 25 lakh. The penalty against the Chairman and Managing Director is affirmed.
For the same reason, debarring the Chairman and Managing Director for 1 year is neither excessive nor arbitrary. We accordingly confirm the directions issued by the WTM. Further, in the circumstances of the case, the debarment of the Company for a period of 3 years is reduced to the penalty undergone.
Appeal of Euram Bank is concerned, the WTM has issued a warning to the said appellant to ensure that all its future dealings in the Indian securities market is done strictly in accordance with law - Appellant Euram Bank was registered as a Foreign Institutional Investor (FII) with SEBI in the year 2008 and that an entity known as India Focus Cardinal Fund (IFCF) was registered with SEBI as a sub account of the appellant. The role played by Euram Bank while granting a fraudulent structured loan to Vintage was dubious. The pledge agreement executed by Euram Bank with the Company pledging the GDR shares prior to its actual issuance for the purpose of securing the loan given to Vintage was totally dubious.
WTM also found that IFCF undertook the role of off-loading the converted shares of GDR in the Indian market which was done with the active role of the appellant bank and the fraudulent scheme of the sub account IFCF could not have been completed and the shares of Zenith could not have been sold in the Indian market but for the active participation of the appellant bank. On these findings the WTM held that there was sufficient reasons to hold the acts of the appellant bank amounted to transgression of Section 12A of the SEBI Act read with Regulation 3 and 4 of the PFUTP Regulations. In spite of coming to the aforesaid conclusion the WTM has only issued a warning on the strength of the observation that the appellant subsequently took corrective steps in removing Arun Panchariya as Director from its joint venture Euram Bank Asia Ltd. (EBAL).
Considering the findings given by the WTM we are of the opinion that the warning given by the WTM to the appellant bank does not suffer from any manifest error.
Violations found against the Company and the Directors are affirmed. Appeal of the Company, Zenith Steel Pipes and Industries Limited are partly allowed. The debarment is reduced to the period undergone and penalty is reduced from Rs. 10 crore to Rs. 25 lakh.
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2023 (2) TMI 1242 - NATIONAL COMPANY LAW TRIBUNAL BENGALURU
Seeking approval of the Resolution Plan - eligibility of the Resolution Applicant as per Section 29A of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In compliance to the order dated 09.12.2022, the RP filed Memo vide diary no. 5625 dated 21.12.2022 stating that, in the present case there are no debts or liabilities due and payable to the Central Government, any State Government or any Authority. The resolution professional has not received any claim from any government department, institution or any statutory authority. It is stated that no claims have been made, even belatedly after nearly 2 years of the CIRP being initiated. No employees have filed any claims or claimed any unpaid Provident Fund/Gratuity payments by the Corporate Debtor. The Provident Fund Commissioner or the EPFO have not filed any claims before the resolution professional. Further, the resolution applicant in the Resolution Plan (at Page No. 98 of the application submitted for the approval of resolution plan-para D in the table under Clause II of the Resolution Plan), has proposed to make 100% payment towards the outstanding statutory dues, if any, anytime.
The MSME UDYAM Certificate obtained subsequent to the initiation of CIRP is required to be ignored and the Successful Resolution Applicants in the case are not eligible under Section 29A r. w. s. 240A of IBC. The Resolution Plan submitted in therefore not tenable in law and is rejected under section 31(2) r.w.s 30(2)(e) of IBC.
Application disposed of.
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2023 (2) TMI 1241 - CESTAT NEW DELHI
Levy of service tax - lease rental charges - Department alleged that leasing of vehicles is taxable service and appellant was liable to pay service tax on the same - HELD THAT:- The issue on levy of service tax on lease rental charges has been decided by the Principal Bench of this Tribunal in the appellant’s own case M/S. CARZONRENT (INDIA) PVT. LTD. VERSUS CST, DELHI [2017 (1) TMI 98 - CESTAT NEW DELHI] where it was held that the appellants failed to sustain legally their plea regarding non-applicability of the provisions of Service Tax to the transactions of renting of motor cabs and on such consideration received.
It is pertinent to note that the current show cause notice is a periodical one which has been adjudicated by the Commissioner vide the impugned order. There is no change in the factual matrix, and therefore there are no reason to deviate from the decision of this Tribunal in the Appellant’s own case.
As regards the request of the appellant for referring this matter before a Larger Bench in view of the contrary decision of the Mumbai bench of the Tribunal in the case of ARVAL INDIA PRIVATE LIMITED VERSUS PRINCIPAL COMMISSIONER OF SERVICE TAX – IV AND (VICE-VERSA) MR CJ MATHEW, MEMBER (TECHNICAL) [2020 (9) TMI 125 - CESTAT MUMBAI], it is noted that the Tribunal has differentiated the decisions based on the facts, as is evident in para 7 of the order.
There are no infirmity in the impugned order - appeal dismissed.
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2023 (2) TMI 1240 - DELHI HIGH COURT
Income taxable in India - FTS - whether the activities carried out by the respondent/assessee fall within the exclusionary part of Explanation 2 i.e., whether or not the activity was in the nature of mining or like project? - whether Section 44BB of the Act would be applicable to the assessee, who is a second line contractor - PE in India - According to AO since the payment received is qua FTS, it will fall under Section 9(1)(vii) of the Act and is also covered by the provisions of Article 13 of the India-France Double Taxation Avoidance Agreement (DTAA) - it is the respondent/assessee’s case that the activity in issue is connected with prospecting and extraction of mineral oil, and therefore, would fall under Section 44BB? - HELD THST:- There is no question of law proposed by the appellant/revenue, that this finding of fact is perverse. Therefore, in our view, we are not inclined to frame any question(s) of law, with regard to whether or not the income received by the respondent/assessee is in the nature of FTS.
Whether the amount received by the respondent/assessee, in relation to which, concededly, tax has been paid on a presumptive rate under Section 44BB? - It is the appellant/revenue’s case, that since the respondent/assessee, concededly, was a second line contractor, Section 44BB of the Act would not apply to it.
To be noted, there is no such distinction made in Section 44BB of the Act with regard to a main or a second line contractor. All that the recipient of income has to demonstrate, is that it is a non-resident who is engaged in the business of providing services or facilities in connection with or supplying plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of mineral oils.This is again, in our view, a finding of fact which cannot be disturbed, unless it is held to be perverse. Once again, no question of law has been proposed by the appellant/revenue, to the effect that the finding of fact is perverse.
Whether Section 44BB of the Act would be applicable to the respondent/assessee, who is a second line contractor? - Although, prima facie, as noted above, there is no such distinction made between a main or a second line contractor, because a somewhat similar question has been admitted in Technip UK Limited [2018 (7) TMI 2335 - DELHI HIGH COURT] we are inclined to issue notice.
We may note, that the question of law framed for consideration by a coordinate bench of this Court reads as follows :
“Whether the Income Tax Appellate Tribunal was right in setting aside and quashing the order passed by the Commissioner of Income Tax under Section 263 of the Income Tax Act, 1961 interpreting Section 44 BB of the afore-stated Act.”
A bare perusal of the question of law would show, that it is linked to the exercise of power under Section 263 of the Act. Clearly no such position arises in the instant case.
Tribunal, in the impugned judgment, while holding in favour of the respondent/assessee, has relied upon its order rendered in DCIT v. Technip UK Limited. [2018 (7) TMI 2335 - DELHI HIGH COURT] This order was passed in [2018 (12) TMI 1069 - ITAT DELHI].
Revenue, says that he will ascertain, as to whether any appeal was lodged with this Court qua the Tribunal’s order - Issue notice.
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2023 (2) TMI 1239 - MADHYA PRADESH HIGH COURT
Seeking grant of anticipatory bail - ill-gotten immovable property, generated through illegal activities related to scheduled offence - HELD THAT:- In the present case, the applicant is apprehending his arrest in connection with the complaint case by the respondent for offence of money-laundering under Section 3 of PMLA Act and punishable under Section 4 of the Act. Though supplementary charge sheet has been filed, but once the prayer for anticipatory bail is made in connection with the offence of PMLA Act, the underlying principles and rigour of Section 45 of the Act gets triggered.
The record submitted by the respondents prima facie shows nexus between the primary offender and the applicant, who is found to be an accessory to money-laundering. From the material collected by the Investigating Agency, considering the nature of allegations and the seriousness of offence alleged, prima facie, at this stage, it cannot be said that the applicant has not committed any offence alleged against him.
The Supreme Court in the case of P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [2019 (9) TMI 286 - SUPREME COURT] while dismissing the anticipatory bail application has observed that power under Section 438 Cr.P.C. being an extra- ordinary remedy has to be exercised sparingly, more so in cases of economic offences which stand as a different class as they affect the economic fabric of the society.
Thus, no case for grant of anticipatory bail is made out. Accordingly, this application is dismissed.
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2023 (2) TMI 1238 - ITAT DELHI
Admission of additional evidences CIT(A ) in violation of Rule 46A of the Income-tax Rules, 1962 - over-reporting of the value of time deposits deleted by CIT(A) - HELD THAT:- Commissioner (Appeals) exercising statutory power vested with him has called for and examined necessary evidences for deciding the issue. Such exercise of power by learned first appellate authority assumes importance in the present case considering the fact that the assessee did not get a fair opportunity to represent his case before the AO. On a careful reading of the impugned order of Commissioner (A) it is very much clear that considering the fact that the assessee did not get a fair opportunity to represent his case before the AO, Commissioner (Appeals) took the responsibility upon himself to inquire into the matter and in the process has called for necessary evidences, not only from the assessee, but from the concerned bank through the assessee.
After examining the evidences, Commissioner (Appeals) has factually found that the actual quantum of time deposits in Canara Bank was to the tune of Rs.9,50,00,000/-. He has further found that even Rs.9,50,00,000/- deposited in Canara Bank was out of overseas remittances from the income earned by the assessee as a resident in USA for past so many years. No contrary material has been brought on record by the Revenue to disturb the aforesaid factual findings of learned Commissioner (Appeals). Therefore, if, upon examining the material on record Commissioner (Appeals) has recorded a factual finding, without pointing out any deficiency or discrepancy in such finding, the decision of learned Commissioner (Appeals) cannot be reversed merely on the allegation of violation of Rule 46A. Revenue appeal dismissed.
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2023 (2) TMI 1237 - ITAT BANGALORE
TP adjustment - treatment of duty drawback as non-operative in nature for computing the operating margin of the assessee - HELD THAT:- The duty drawback is provided to the manufacturer and exporter for the purpose of compensating in the duty component which is already been included in the cost of raw material and the duty drawback received against the duty paid in our view is part of the operating profit of the assessee.
As relying on Sami Labs. Ltd case [2019 (4) TMI 2110 - ITAT BANGALORE] we remit the issue back to the TPO to verify that export incentive is in respect of turnover of the present year as per the ratio laid down in the above judgement. Needless to say that the assessee be given an opportunity of being heard.
Comparable selection - UMW Industries Ltd - The major part of the revenue derived by the company is from sale of guidance wire. We also notice from the annual report (pg. 1493 of paper book) that one of the major suppliers for the company is Bharat Dynamics which is a Govt. of India Enterprise, which is a manufacturing base for guided weapon systems. Therefore we see merit in the submission of the ld AR that the company supplies the guided wire for defence activities and therefore not comparable with the assessee who supplies machinery to textile industry.
TPO and the DRP have considered the profile of the company as manufacturer of other machinery for textiles, apparel and other industries whereas as per the annual return, the extract of which is reproduced above, the company is engaged in the manufacture of guidance wire and miniature control cable. In view of the discussion, we hold that the functional profile of UMW Industries Ltd. is different from that of the assessee and therefore not comparable. The AO/TPO is directed to exclude the company from list of comparables.
Lohia Corporation Ltd. - assessee contended before the TPO and the DRP that the company incurs significant expenditure towards R&D which is more than 3% on an average for the previous 3 years and assessee on the other hand is a licensed manufacturer and relies on the technical knowhow of which AE to manufacture the product - We notice from the above judicial pronouncements relied on by the assessee that application of R&D filter with a threshold limit of 3% is a settled position now. We also notice that the Bangalore Bench of the Tribunal in the case of KBACE Technologies Pvt. Ltd. [2020 (2) TMI 78 - ITAT BANGALORE] has also taken a similar view. In view of this we direct the TPO to exclude Lohia Corporation Ltd from the list of comparables.
TP adjustment restricted to the value of only international transactions - We hold that the TP adjustment should be restricted only to AE related transaction and direct the TPO/AO to compute the TP adjustment accordingly.
Benefit of adjustment for working capital denied - HELD THAT:- As working capital adjustment is to be allowed as per actuals, after considering the decisions rendered in this order on the exclusion/inclusion of comparable companies out of/into the final set of comparables. The TPO/ AO are accordingly directed.
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2023 (2) TMI 1236 - ITAT AMRITSAR
Addition u/s 68 - Bogus cash sales - AO rejecting the Cash Sales being claimed to be made out of Opening Stocks and purchases made during the year duly supported with the VAT paid on such cash sales as per the VAT returns of the period under consideration - HELD THAT:- Admittedly, the assessee has made cash sales out of the opening stock and purchases made during the year duly supported with audited stamen of account and VAT Return. The authorities below has neither pointed out any discrepancy in the audited books of account nor rejected assessee’s books.
CIT(A) has made contradictory observation in one para that there was no cash sale in the earlier year FY 2015-16 whereas in another para he observed that there was cash sale of Rs. 560204/- in FY 2015-16. Merely, making a comparison of cash sales with the preceding assessment year in hypothetical manner bases on assumption, surmises and conjectures without supporting corroborative documentary evidence to disprove disputed cash sales as bogus sales cannot be approved.
There is no bar in making cash sales by the manufacturer. AO has also admitted that there was cash sale of Rs. 560204/- in Financial Year 2015-16. Thus, the AO wrongly held that no goods in cash was sold during the earlier Financial Year 2015-16. The AO failed to appreciate that there was no excess sale of 546 kgs of shoddy yarn in the range of Rs. 105/- to Rs. 145/-. AR explained that the goods were sold out of balance stock of shoddy yarn and even at the year end, the unsold stocks of shoddy yarn was 2960 kgs with the support of Paper book placed on record.
In the case of “Principal Commissioner of Income Tax, 20, Delhi v. Akshit Kumar”, [2020 (11) TMI 873 - DELHI HIGH COURT] held that the quantum figure and the closing stock which stood accepted in the earlier years had to be taken as actual stock available with the Respondent-Assessee. In view of these facts, the sales made by the Respondent-Assessee out of its opening stock were not treated as unexplained income, to be taxed as income from other sources.
In another case of ‘Anantpur Kalpana v. Income-tax Officer’, [2021 (12) TMI 599 - ITAT BANGALORE] observed that since the sale proceeds for which cash was received from the customers was already admitted as income and if the cash deposits are added under section 68 of the Act that will amount to double taxation once as sales and again as unexplained cash credit which is against the principles of taxation.
On similar fact, in the case of Hirapanna Jewellers [2021 (5) TMI 447 - ITAT VISAKHAPATNAM] as observed that since, the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. This view is also supported by the decision of.Kailash Jewellery House [2010 (4) TMI 1070 - DELHI HIGH COURT] and Vishal Exports Overseas Ltd. [2012 (7) TMI 1110 - GUJARAT HIGH COURT]
We hold that the disputed cash sales by the appellant assessee were made out of Opening Stocks and purchases made during the year which are offered for Taxation as revenue receipts as per audited books of accounts and financial statements filed before the authorities below and before us, duly supported with VAT Return. As such, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. Therefore, the addition is deleted. Assessee appeal allowed.
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2023 (2) TMI 1235 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Admissibility of Section 7 Application - applicability of Section 5(4) of the SARFAESI - whether the proceeding could have been continued and assignment had no effect on the proceeding? - HELD THAT:- The provisions of Section 5(4) of SARFAESI Act are clear and categorical that mere assignment during pendency of the proceeding, as referred in 5(4) of SARFACEI Act, shall not be prejudicially affected by the reason of acquisition of financial debt by the said JC Flower ARC as the case may be, but the suit or appeal or other proceeding may be continued, prosecuted and enforced by the assignee JC Flower ARC.
By virtue of Section 5(4) of SARFAECI Act, the Application could have been continued and would not have been prejudicially affected by reason of acquisition of the financial asset. But present is the case, where an application has been filed by the Corporate Debtor praying for dismissal of Section 7 Application on which application the Adjudicating Authority passed the order on 19.01.2023 taking note of the Application and granted time to Financial Creditor to file Reply since it has waived notice. Adjudicating Authority categorically directed that the Reply be filed before the adjourned date after duly serving copy to the Corporate Debtor.
The Adjudicating Authority, it having already issued notice on the application, granted time to the Financial Creditor to reply the Application, ought to have considered the Application. At this stage when the Application has not been considered, it is not necessary to express any opinion on the merits of the Application which may prejudice the parties before the Adjudicating Authority.
Let Adjudicating Authority consider the Application and pass fresh order both on Application IA No. 210 of 2023 and Section 7 Application in accordance with law.
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2023 (2) TMI 1234 - CALCUTTA HIGH COURT
Waiver of penalty - HELD THAT:- A connected appeal arising out of the very same impugned order was heard by the Division Bench in Commissioner Of Central Excise, Haldia Commissionerate Versus W.B. Handloom & Powerloom Development Corporation Ltd. (Tantushree)
[2022 (9) TMI 561 - CALCUTTA HIGH COURT], the appeal was allowed and the substantial question of law was answered in favour of the revenue.
Following the above decision, this appeal (CEXA/3/2007) is allowed and the substantial question of law is answered in favour of the revenue.
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2023 (2) TMI 1233 - ITAT KOLKATA
Unexplained cash credit u/s. 68 - identity and creditworthiness of the shareholders and genuineness of the transactions not proved - Onus to prove - directors failed to appear to the summons issued u/s. 131 - HELD THAT:- All the share applicants are (i) income tax assessees, (ii) they are filing their income tax returns, (iii) share application form and allotment letter is available on record, (iv) share application money was made by account payee cheques, (v) details of the bank accounts belonging to share applicants and their bank statements, (vi) in none of the transactions there are any deposit of cash before issuing cheques to the assessee, (vii) all the share applicants are having substantial creditworthiness represented by their capital and reserves.
We notice that all the details were very much placed before the Assessing Officer but while framing the assessment, no efforts have been made by the Assessing Officer to examine the correctness of various proof, filed by the assessee by carrying out any investigation. Merely for non-appearance of the directors, AO disregarded all these documents which have been placed before various statutory authorities including Registrar Of Companies, Income Tax Department and Schedule Banks.
The assessee by way of filing all these documents necessary to prove identity, creditworthiness and genuineness of the alleged transaction, has discharged the initial burden casted upon it under the provisions of section 68 - Unless and until, the assessing authority finds any lacuna or adversity or defect in the said documents, the burden to prove remains on the Revenue authorities. In the instant case, ld. Assessing Officer failed to discharge the burden and summarily disregarded the documents filed by the assessee by merely referring to some decisions and not going into the facts of the case except referring to the price per share.
Since the assessee has sufficiently explained the identity and creditworthiness of the share subscriber companies and the genuineness of the transaction of applying for the equity shares of the assessee company and since nothing contrary to the evidence filed by the assessee has been placed on record by the Revenue, except the reason that the directors failed to appear to the summons issued u/s. 131 of the Act, we find no reason to interfere with the meritorious finding of the Ld. CIT(A). We accordingly dismiss the grounds raised by the revenue in this respect.
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2023 (2) TMI 1232 - CESTAT MUMBAI
Recovery of Central Excise duty alongwith interest and penalty - retention of scrap generated from the raw material received by them from the principal manufacturer namely KEC International, Larsen and Tubro Ltd. etc. - contravention of Rule 4, 6 & 8 of Central excise Rules, 2002 - HELD THAT:- In case of Raaja Magnetics Ltd. [2017 (6) TMI 800 - CESTAT BANGALORE], on similar issue it was held that the value of scrap not includable in assessable value.
The Commissioner (Appeals) has in the appellant own case following the decision of PR. ROLLING MILLS PVT. LTD. VERSUS COMMISSIONER OF C. EX., TIRUPATHI [2009 (3) TMI 444 - CESTAT, BANGALORE] has allowed the appeals and held that the money value of the scrap retained by the appellant does not represents additional consideration for the appellant and it is not liable to be included in the assessable value of job worked goods being cleared on payment of duty to the principal manufacturer. The retention of scrap/ waste arised during job work does not depress the job work conversion charges, the same are not included in the assessable value.
There are no merits in impugned order or the submissions made by the authorized representative - appeal allowed.
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2023 (2) TMI 1231 - KARNATAKA HIGH COURT
Classification of goods - rate of tax - mobile phone chargers sold along with mobile phone in a composite pack - whether attracts tax at the same rate as applicable to "mobile phone" only and it cannot be taxed at higher rate separately? - HELD THAT:- This Court has considered the above question in STRP No.8/2022 & connected matters [2023 (2) TMI 1228 - KARNATAKA HIGH COURT] and answered the question in favour of the assessee and against the Revenue holding that definition contained in the Notification issued under the KVAT Act includes the ‘Charger’ which is sold along with the mobile phone in one set and accordingly taxable at 5%.
Revision dismissed.
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2023 (2) TMI 1230 - CALCUTTA HIGH COURT
Undisclosed stock - CIT(A) considered the case of the assessee along with the assessment records and held that no details have been produced by the assessee with regard to the quantity of the leather consumed - tribunal called for the assessment records as well as the records of the CIT(A) but, however, concurred with the CIT(A) on the ground that the assessee has not produced any evidence from which the yielded figure as well as the figure of wastage could be worked out - HELD THAT:- A fundamental error has crept in during the course of the assessment proceedings as pointed out earlier in response to the show cause notice dated 28th November, 2008 with regard to the quantitative details of stock. The assessee’s specific case was that from the materials already produced before the assessing officer it is clear that the consumption of raw materials would depend on the quality of leather and items produced and that during the year under review they had used old stock and most of the items are small things of various shapes in which case there was heavy wastage.
If such stand of the assessee is not disputed by the assessing officer that the assessee had produced details including quantitative details of stock of finished leather and raw materials consumption of the same and details of production, the assessing officer was duty bound to examine those details and documents and come to a conclusion. However, those details have been brushed aside and what derived in the mind of the assessing officer were the figures for the three earlier assessment years.
This, in our opinion, could not have been done by the assessing officer ignoring the materials and documents produced by the assessee about assessment year under consideration.
CIT(A) also committed a similar error in not adverting to the records which are germane to the assessment year under consideration and largely swayed by the opinion of the assessing officer who committed an error by determining the quantity of wastage based on the production figures for the previous year.
There is nothing on record to indicate that there was suppression of materials by the assessee nor there is anything to indicate that the wastage as mentioned by the assessee for the year under consideration could not have been shown and those figures were neither examined nor rejected. One more important factor which needs to be taken note is that before the CIT(A) the assessee placed bunch of documents which were comparative chart of gross profits for the assessment years 2004-05 to 2007-08. As produced the consumption report style-wise showing particulars of consumption of different types of products. The list of different types of articles producing during the assessment years 2005-06 to 2007-08 was also furnished along with the summary of export sales.
Thus, if according to the assessee, different types of articles are produced for each assessment year which largely depends upon the orders which were placed by the assessee by overseas customers, the assessing officer was bound to consider those details as it is elementary principle that each assessment year is an independent unit. Tribunal also ignored this fact and was persuaded by the opinion drawn by the CIT(A) which had approved the estimation done by the assessing officer purely based upon the figures for the earlier assessment years and not in respect of the assessment year under consideration. It might have been a different case had the details and documents furnished by the assessee been examined and found to be incorrect or otherwise and thereafter the assessing officer embarked upon a fact finding exercise by referring to the facts and figures for the earlier assessment year, it would have been another matter.
Specific case of the assessee is that in none of the two years identical products have been manufactured and exported and, therefore, an independent examination of the goods ought to have been done by the AO which the assessee was not noticed by CIT(A) or by the learned tribunal. Thus, the first issue which has been raised in substantial question of law (a) has to be necessarily answered in favour of the assessee.
Estimating the production/sale of finished goods AND disallowance of expenditure on repairs and maintenance made upon comparison of expenditure under the head for the preceding year and the turnover figures for the two years - The other two substantial questions of law (b) and (c) are also relatable to the same approach of the assessing officer as well as the CIT(A) and the learned tribunal. Once again, the two authorities and the tribunal state that there was nothing on record. Documents clearly show the details of repairs and maintenance have been clearly listed before the CIT(A) and, thus, if the facts relevant for the assessment year under consideration had been considered, such an error would not have occurred. In fact, the learned tribunal in its order records that the assessment records as well as the records of the CIT(A) were called for. Having done so, the tribunal does not record any finding on such records and details and documents produced by the assessee at the very inception during the course of scrutiny assessment. It proceeds to say that there is no evidence before the authorities below. This finding is factually incorrect and should be termed to be a perverse finding.
For all the above reasons, we are of the considered view that the Tribunal committed an error in affirming the order passed by the CIT(A). In the result, the appeal filed by the assessee is allowed and the substantial questions of law are answered in favour of the assessee.
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2023 (2) TMI 1229 - KARNATAKA HIGH COURT
Reassessment of the income of the petitioner's society - new PAN obtained - as alleged transactions are carried out by the petitioner's society under the old permanent account number, which was obtained in the name of the firm - Since, the petitioner is a co-operative society, the petitioner-society was required to obtain permanent account number under the status of association of persons - acceptability of transaction though carried out under the new permanent account number- HELD THAT:- As dispute has arisen on account of the confusion in respect of the permanent account numbers, which was changed in the year 2011. For this reason, this court deems it appropriate that the matter has to be reconsidered by the Assessing Officer further by affording an opportunity to the petitioner to produce necessary documents in support of its claim.
This court also makes it clear that nothing is expressed on the merits of the claim of either of the parties and for the purpose of affording an opportunity to the petitioner to substantiate its claim, the matter is remanded to the first respondent. For these reasons the impugned orders are set aside.
Since, the petitioner and the respondents are before this court, this court deems it appropriate that the petitioner shall appear before the first respondent on April 10, 2023 without awaiting notice from the first respondent. With the above observations, the writ petition is allowed.
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2023 (2) TMI 1228 - KARNATAKA HIGH COURT
Classification of goods - rate of tax - mobile phone chargers sold along with mobile phone in a composite pack - taxable at the same rate as applicable to mobile phone only or taxed at higher rate as unscheduled goods under Section 4(1) (b) (iii) of the Act? - HELD THAT:- The issue involved in Nokia India Case [2014 (12) TMI 836 - SUPREME COURT] was whether mobile charger should be excluded from the entry of concessional rate of tax which applies to cellphones under the Entry 60(6)(g) of Schedule B of the Punjab VAT Act where it was held that the battery charger cannot be held to be a composite part of the cellphone but is an independent product which can be sold separately without selling the cellphone. The High Court failed to appreciate the aforesaid fact and wrongly held that the battery charger is part of the cellphone.
It is relevant to note that the decision in Nokia India Case is based on Entry 60(6)(g) of the Schedule B of the Punjab VAT Act. In the said Entry only cellular phone is defined and accessories are not included. The Hon'ble Supreme Court of India has upheld Revenue's contention in that case because Entry 60(6)(g) of Schedule B of the Punjab VAT Act does not mention accessories for the purpose of taxing the items/product at 4%.
Entry 53 of Schedule III of the KVAT Act read with the Notification No. FD 43 CSL 07(02) dated April 4, 2007 issued by the State Government - HELD THAT:- In Entry No. 60(6)(g) of the Punjab VAT Act, the expression used is 'cellular telephone' whereas in the Notification issued under KVAT Act, the words used are 'and parts thereof'. Further, the parts falling under Heading 8843, 8825, 8527 or 8528 have been specifically excluded. It is relevant to notice that, battery charger which falls under Entry 8504 40 30 under the CET Act and CT Act, has not been excluded. This makes it clear that charger is a composite part in the package. Thus, the intention of the Revenue is unambiguous that the Notification was applicable for telephone sets and parts thereof which includes charger. Therefore, the Entries in Punjab VAT Act and the KVAT Act are different and the Entry under the Punjab VAT Act is limited only to cellular telephones in contradistinction to the Notification under KVAT Act - 'telephone sets' can be considered as 'goods put up in sets for retail sale' under Rule 3(b) of the GRI.
A bare perusal of the Section 4 (charging section) of KVAT Act and Rule 3 (computation provision) of KVAT Rules would clearly indicate that there is no prescribed mechanism provided for determining the value of individual goods in a composite transaction. Thus, in the absence of a valuation mechanism, tax cannot be levied differently on each of the component by separating a single composite package - the definition contained in the Notification issued under the KVAT Act includes the charger which is sold along with the mobile phone in one set and accordingly taxable at 5%.
These revision petitions are dismissed.
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2023 (2) TMI 1227 - CALCUTTA HIGH COURT
Addition on account of an arithmetical mistake - whether the Tribunal was justified in reversing the order passed by CIT (A) and restoring the addition made in the assessment excluding the case of the assessee that it was on account of an arithmetical mistake - HELD THAT:- Tribunal failed to note that this issue arose during the assessment proceedings itself and the assessing officer had issued notice dated 4th December, 2006 for which reply was given on 18th December, 2006 by the assessee which was rejected by the assessing officer while completing the assessment.
Therefore, to state that merely because the revised tax audit report was submitted later when the appeal was pending before the CIT(A), may not be a ground on which the learned Tribunal could have taken a different view.
Tribunal has observed that the assessee could not point out any mistake as claimed in the tax audit report during the course of the assessment proceedings. This also is factually incorrect as mentioned by us above as the matter was brought to the notice of the assessing officer during the course of the assessment.
Tribunal states that the copy of the remand report submitted by the AO could not be produced by both parties. Tribunal failed to note that the assessee was not furnished with the copy of the remand report called for by the CIT(A) but in the order passed by the CIT(A) the said report has been extracted in page 5 of the order passed by the CIT(A). In any event, the assessee was able to establish the factual position as to how it was a genuine arithmetical mistake. In the absence of any material to show that it was not a genuine arithmetical mistake, the tribunal erred in non-suiting the assessee on the ground that the mistake ought to have been detected earlier by the assessee itself. Thus, we are of the view that the conclusion arrived at by the tribunal for setting aside the order passed by the CIT(A)is incorrect as the learned tribunal has ignored the factual position which was available on record. Assessee appeal allowed.
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2023 (2) TMI 1226 - ANDHRA PRADESH HIGH COURT
Dishonour of Cheque - acquittal of the drawer of a cheque - discharge of legally enforceable debt or not - revision under Sections 397 read with Section 401 of Cr.P.C. - Whether the finding of the learned first appellate Court that Ex.P1 cheque was not given in discharge of debt and that Ex.P1 cheque was materially altered are findings based on evidence and in accordance with law? - HELD THAT:- It is to be mentioned here that the case of the complainant that Ex.P1 cheque in its physical form was received by Pw.1 from the accused is a fact that is admitted by the accused all throughout the trial as he stated specifically even in his evidence as Dw.1 that he physically handed over Ex.P1 cheque to Pw.1. The cheque bears the signature of the drawer. Pw.1 stated that it was given by accused. Dw.1 in his evidence categorically stated that he signed the cheque and Ex.P1 cheque bears his signature. Thus, there is legitimate handing over of the cheque which bears the signature of the drawer and that much is undisputed - As per the evidence of Pw.1 and also as per the evidence of Dw.1 there were business transactions between them and both sides stated that each of them was maintaining books of accounts concerning these business dealings. According to Pw.1 towards repayment of what was overdue the accused gave him Ex.P1 cheque. That there was overdue was shown by complainant through Ex.P8 statement of account. Dw.1 during his cross examination verified it and admitted the truth of its contents.
Ex.P1 cheque as is available on record bears the date 03.01.2003. Since the date is specifically given and is available on the negotiable instrument by the time it came to be considered by the Courts below there was mandate of the law in Section 118(b) of the Negotiable Instruments Act, 1881 to the affect that the Court shall presume, until contrary is proved, that every negotiable instrument which bears a date was made or drawn on such date. The contrary has to be proved and this presumption has to be dislodged by the one who questions the correctness of the date - there was absolutely no material to think any probability that the accused did not put the date on Ex.P1 and did not hand it over to the complainant on the date that is available on the cheque but gave it on any different date. Accused never issued any notice to complainant for return of his cheques on the promise that he had discharged the debt.
Learned first appellate Court without eliciting any experts opinion and without anybody's invitation and without considering all that relevant and material evidence and the law simply rushed to a conclusion that in its opinion there is a change in the colour of ink and Ex.P1 cheque was materially altered and was not given towards discharge of debt. No reasonable prudent man would have arrived at such conclusion on the kind of evidence that was available on record. Learned first appellate Court failed to look at the statute and the precedent and failed to apply the law to the facts. Its appreciation of evidence is unreasonable capricious and is perverse. Therefore, the conclusions reached by it cannot be supported and therefore the judgment of the first appellate Court shall be set-aside.
Having concluded to set-aside the judgment of the first appellate Court the result that emerges is that the acquittal granted to the accused is incorrect. In such circumstances, the accused shall be punished with appropriate sentence. However, since this Court is not sitting in appeal and this Court is only sitting in revision it cannot convert a finding of acquittal into one of conviction by virtue of legislative mandate in Sub Section (3) of Section 401 of The Code of Criminal Procedure, 1973.
The Judgment dated 23.01.2007 of the learned VIII Additional District and Sessions Judge (Fast Track Court) Vijayawada in Criminal Appeal No. 235 of 2005 is set aside and the matter is remitted to the said Court with a direction to rehear the appeal and render its judgment afresh in accordance with law as expeditiously as possible - this Criminal Revision case is allowed.
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