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2023 (6) TMI 1301 - ALLAHABAD HIGH COURT
Seizure of goods alongwith vehicle - evasion of tax or not - goods were being transported on stock transfer basis from the additional place of business to the principal place of business - HELD THAT:- Be that as it may, since the learned counsel for the petitioners has stated that the petitioners have got their prima-facie case and the impugned seizure of the goods and vehicle is in derogation of the provisions of law, therefore, it is deemed appropriate that the liberty be given to the petitioners to file an application for provisional release of the goods as well as the vehicle before the adjudicating authority i.e. opposite party no. 2(Assistant Commissioner, Sector-3(Mobile Squad), State Tax Office, GST Bhawan, Vikas Bhawan, Road, Barabanki) within a period of 7 days from today taking all the pleas and grounds, which are available to them.
Petition disposed off.
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2023 (6) TMI 1300 - ANDHRA PRADESH HIGH COURT
Determination of GST / Assessment under GST - To be followed by scrutiny of returns / assessment u/s 61 or not? - Attachment of Bank account of petitioner - requirement of scrutiny of return submitted by the petitioner for the relevant period.
Whether proceedings u/s 74 of APGST Act cannot be independently initiated without having recourse to the scrutiny u/s 61 of the said Act? - HELD THAT:- Section 73 and 74 are not controlled by Section 61 alone as argued by the petitioner. The proceedings u/s 74 can be taken up by resorting to the audit of accounts u/s 65 also - It should be carefully observed that Section 74 starts with the clause “where it appears to the proper officer that any tax has not been paid”. The word “appears” has a wider amplitude subsuming in it not only Section 61 and 65 but also any other credible information from a different source. If the intendment of legislature is to make Section 74 bound by Section 61 and 65 alone, that fact would have been clearly depicted in Section 74.
In Doypack Systems Pvt Ltd. V. Union of India [1988 (2) TMI 61 - SUPREME COURT] the Apex Court observed thus In the present case as already stated supra the phrase “where it appears” is a free, unfettered and unbound usage made by legislature and therefore in our view, the source for the proper officer to proceed under this provision can be held to be either under Section 61 or 65 or some other information but cannot be constricted to Section 61 or 65 alone to reach Section 74 cannot be accepted.
The decision of High Court of Madras (Madhurai Bench) in Vadivel Pyrotech Private Limited’s case [2022 (10) TMI 784 - MADRAS HIGH COURT] cited by the petitioner can be distinguished on facts. In that case the writ petitioner filed his return for the Assessment Year 2018-19 and later it was taken up for scrutiny by the proper officer u/s 61 of Tamil Nadu Goods and Services Taxes Act (TNGST Act) by issuing notice in Form ASMT – 10 dated 22.12.2021 by pointing out certain discrepancies between GSTR3B GSTR 1 and GSTR 2A returns filed by the petitioner calling upon him to pay the tax of of Rs.13,54,250/- along with interest Rs.13,54,250/- along with interest and it was held that It is trite law that when the Act prescribes the method and manner for performing an act, such act shall be performed in compliance with the said method and manner and no other manner.
Thus it is clear that the above observation was made by learned single Judge in the factual back ground that at the inception itself the proceedings were taken worth u/s 61 of TNGST Act but not u/s 74 as in our case. Therefore, the above decision is of no avail to the petitioner - in the present case, this point is decided against the petitioner.
Whether the attachment of the bank account of the petitioner is illegal? - HELD THAT:- As can be seen that the main allegation under impugned notice dated 06.07.2022 is that the petitioner has passed fraudulent ITC to the purchasers without actual supply of goods/services. In that context while issuing show cause notice to the petitioner, respondent authorities seems to have made provisional attachment of the bank account of the petitioner by resorting to Section 83 of APGST Act.. Since the petitioner has not so far filed his objections/ reply to the notice, at this juncture it cannot be concluded that the attachment is illegal.
There are no merits in the writ petition. However, since it is the submission of the petitioner that he received impugned show cause notice only on 16.07.2022 i.e., after expiry of time granted for submitting explanation which was dated 13.07.2022 and though this fact was brought to the notice of the 3rd respondent he refused to receive the explanation and relevant documents, in the interest of justice, it is considered apposite to permit the petitioner to submit his explanation along with relevant material.
This writ petition is disposed of giving liberty to the petitioner to file his explanation / objections along with the relevant materials before the 3rd respondent within three (3) weeks from the date of receipt of copy of this order, in which case the 3rd respondent shall receive the said explanation and material and consider the same after affording an opportunity of personal hearing to the petitioner and pass appropriate order in accordance with governing law and rules expeditiously.
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2023 (6) TMI 1299 - KARNATAKA HIGH COURT
Refund of input tax credit - rejection on the ground of time limitation - HELD THAT:- Learned counsel for the respondents who has filed his statement of objections does not dispute the said submission made by petitioner’s counsel. However he contends that the order of rejection was passed by the Assistant Commissioner prior to the notification dated 15.07.2022 and therefore no fault can be found in the same.
Be that as it may be, the fact remains that this Court has already considered the question involved in this writ petition in M/S MANGALORE REFINERY AND PETROCHEMICALS LTD VERSUS UNION OF INDIA, COMMISSIONER OF CENTRAL TAX, THE ASSISTANT COMMISSIONER OF CENTRAL TAXES [2023 (1) TMI 1265 - KARNATAKA HIGH COURT] and therefore, even this writ petition is required to be disposed of in terms of the orders passed in the said petition by the Co-ordinate Bench of this Court.
The impugned order passed by the 3rd respondent is set aside and the petitioner’s application for refund is restored and the 4th respondent is directed to consider the same afresh in accordance with law - Petition allowed.
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2023 (6) TMI 1298 - AUTHORITY FOR ADVANCE RULING, UTTAR PRADESH
Scope of Supply - work done by the applicant (NHAI) in shifting the transmission lines for the widening of road under the supervision of MVVNL - Applicability of GST on the full amount of work done for shifting the transmission lines by NHAI - payment of same amount of GST on the same transaction to two separate entities, amounting to double taxation or not - HELD THAT:- The applicant is a Central Government entity whose primary work is building roads and bridges. Shifting, dismantling arid raising of transmission lines is done by the applicant as and when required for safe electrical clearances during the widening of the National Highways, which is an ancillary to its main work. In the process of the activity, nowhere any assets are transferred to the applicant and therefore ownership lies with the MVVNL. It is merely an activity where just shifting of power transmission towers/lines is done to widening of the National highways.
It is observed that MVVNL is not supplying any material or goods or services to the applicant, except the supply of services of supervision and shut down with GST duly charged thereon, which can be used in the shifting or modification of transmission lines. Every material and labour involved in the work is being purchased by the NHAI or its contractors and ITC is claimed against this transaction and TDS is being deducted by the NHAI on payments made to their contractors. The MVVNL is only supplying the services of supervision and shutdown to the NHAI.
It is observed that MVVNL is not a supplier of goods or services in relation to shifting of transmission lines and other assets which are required to be shifted during construction or widening of roads, the work being undertaken by NHAI itself. Hence, there is no relationship between NHAI and MVVNL which can be categorized as that of supplier and recipient except for the services of the supervising the whole operation for which NHAI is paying consideration along with GST leviable thereon. The supplier in the instant operation is the contractor who is undertaking the work of shifting transmission lines and not the MVVNL who are just supplying services of supervision and not that of construction or replacement of transmission lines.
MVVNL is not demanding the cost of total project of shifting of transaction lines rather they are only concerned with supervision charges and GST on the estimated project cost. It is nothing but a case of double taxation because the project cost is being borne by NHAI through its contractors where GST is charged and paid and ITC being availed. But by demanding GST only and not the cost of project being undertaken by NHAI, M/s MVVNL have shown utter disregard to canons of taxation - the element of consideration is not involved in the activity and therefore the said activity i.e. shifting of transmission lines for widening of roads is not a supply under Section 7 of GST Act, 2017.
Thus, assets constructed by the applicant do not fall under category of goods, thus no supply is involved. Therefore, the applicability of GST does not arise.
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2023 (6) TMI 1297 - AUTHORITY FOR ADVANCE RULING, UTTAR PRADESH
Scope of Supply - providing food to the employees at subsidized price as per terms and conditions of the employment contract - subsidized deduction made from the salary of employees who are availing facility of food in the factory - consideration of supply of service or not - aplicability of GST on the amount deducted from the salaries of employees - input tax credit on the GST charged by third party contractor for canteen services availed by it for its employees.
HELD THAT:- M/s Shriram Pistons and Rings Limited has arranged a canteen facility for its employees, which is run by a Canteen Contractor M/s P.J. Banan. As per their arrangement, part of the Canteen charges is borne by M/s Shriram Pistons and Rings Limited whereas the remaining part is borne by its employees. The said employees’ portion of canteen charges is collected by M/s Shriram Pistons and Rings Limited and paid to the Canteen Service provider. M/s Shriram Pistons and Rings Limited submitted that it does not retain with itself any profit margin in this activity of collecting employees’ portion of canteen charges. M/s Shriram Pistons and Rings Limited vide letter dated 15-11-2022 has submitted that more than 2000 employees are working in its factory.
The applicant is not liable to pay GST on the amount deducted/ recovered from the employees. Further the applicant is recipient of canteen service to facilitate the employees and Canteen Service Provider raises the Bill of canteen charges inclusive of GST as per the contract. The applicant collects/ recoveres the partial amount from the employees and is required to pay the gross amount inclusive of GST to the canteen service by adding residual amount in the employees’ portion and is required to pay gross amount of Bill inclusive of GST to the Canteen Service Provider.
ITC on canteen charges on the food supplied to employees of the applicant company - HELD THAT:- The proviso of Section 17 (5)(b) stipulates that ITC shall be available on the GST paid where it is obligatory to provide a benefit for an employer to its employees in terms of any law for the time being in force - in view of the above clarification ITC of the GST paid on canteen charges is available to the applicant on the food supplied to the employees of the applicant company as under Section 46 of the Factories Act, it is mandatory to provide canteen facility to the employees.
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2023 (6) TMI 1296 - AUTHORITY FOR ADVANCE RULING, UTTAR PRADESH
Levy of GST - if goods are supplied as free replacement under guarantee period without any consideration - HELD THAT:- The applicant is engaged in supply of Elastomeric pads without any consideration (free of cost) during the warranty period as mentioned in para 9 of vide P.O. No. 38201145101516 dated 30.04.2021 of Principal Chief Material Manager, South Central Railway to the M/s Prag Industries (India) Pvt. Ltd. It is an admitted fact that the warranty is a promise or guarantee for the goods/services supplied by the applicant.
That under guarantee and free replacement no consideration shall be chargeable from the buyer against the supply of replaceable goods, and as such no GST could be charge and payable to the Govt. The replaced items shall be of NIL value. In as much as the consideration for replaced goods has already been included as and when the original supply was made for the first time to the Indian Railways. During the warranty period the goods and service have been supplied to customers as free of charge. No separate consideration is charged and received at the time of replacement. The value of supply made earlier includes the charges to be incurred during the warranty period. Therefore the replacement of the goods and service rendered during the warranty period without consideration does not attract GST separately.
The issue has been decided in IN RE: M/S. SOUTH INDIAN FEDERATION OF FISHERMEN SOCIETIES [2022 (3) TMI 1299 - AUTHORITY FOR ADVANCE RULING, TAMILNADU] where it was held that the replacement of the goods and service rendered during the warranty period without consideration does not attract GST separately.
Thus, GST is not leviable, if goods are supplied as free replacement under guarantee period without any consideration.
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2023 (6) TMI 1295 - AUTHORITY FOR ADVANCE RULING, UTTAR PRADESH
Exemption from GST - Duty Credit Scrips issued under RoSCTL scheme issued by Directorate General of Foreign Trade - exempt under GST schedule I, SI. No.-122A HSN code 4907 or not - applicability of N/N. 35/2017-Central Tax (Rate) dated 13th October 2017 to all duty credit scrips or not.
HELD THAT:- As per the para 3.02 of the chapter 3 of the FTP, Duty Credit Scrips shall be granted as rewards under MEIS and SEIS. The Duty Credit Scrips and goods imported / domestically procured against them shall be freely transferable. The Duty Credit Scrips can be used for: (i) Payment of Basic Customs Duty and Additional Customs Duty specified under sections 3(1), 3 (3) and 3 (5) of the Customs Tariff Act, 1975 for import of inputs or goods, including capital goods, as per DOR Notification, except certain specified items. From this, it is clear that the duty credit scrips are the instruments to award incentives to the exporters with the objective of the export promotion by allowing them to set off the basic customs duty against it. It is also to be noted that the duty credit scrips are not allowed to set off the IGST/CGST/SGST liability.
The manner of issue of duty credit for goods exported under the Scheme for Rebate of State and Central Taxes and Levies, subject to such conditions and restrictions as specified herein, in accordance with Government of India, Ministry of Textiles' Notification No. 12015/11/2020-TTP dated the 13th August, 2021 has been discussed in Notification No. 77/2021-Customs (N.T.) dated 24th September, 2021.
Duty Credit Scrips issued under RoSCTL Scheme is not taxable falling under HSN code 4907 & inserted vide SI. No.-122A under Notification No.35/2017-Central Tax (Rate) dated 13.10.2017. Regarding, whether it is applicable to all duty credit scrips or not? It appears that it is applicable to all the duty credit scrips. It is pertinent to mention that only specific entry has been exempted i.e. Duty Credit Scrips.
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2023 (6) TMI 1294 - BOMBAY HIGH COURT
Reopening of assessment u/s 147 - reason to believe - ‘tangible material’ for purposes of reopening an assessment - necessity of disposing of the objections to the re-assessment - claim of deduction on account of payment made to settle a class action suit - AO observed the same as in the nature of penalty and proposed to disallow u/s 37(1) - HELD THAT:- According to the law, which is applicable to the present case, as it existed before 1st April 2021, with a view to invoke the provisions of section 147 for reopening, AO had to satisfy the jurisdictional condition of ‘his reason to believe that income chargeable to tax had escaped assessment’. If the reopening of the assessment is beyond the period of four years from the end of the relevant assessment year, an additional jurisdictional condition has to be satisfied that in a case where an assessment u/s 143(3) of the Act had been completed, the assessee had failed to disclose fully and truly all material facts necessary for assessment during such assessment proceedings.
In the instant case, AO has in fact alleged that the petitioner had failed to disclose fully and truly material facts necessary for the assessment for the assessment year 2013- 14. A bald statement made in the reasons recorded would not satisfy the jurisdictional condition as prescribed for purposes of invoking section 147 of the Act.
Whether or not there was in fact a failure to disclose fully and truly can be seen from the material on record. In the present case, as stated in the preceding paragraphs, the claim of the petitioner with regard to deduction of on account of settlement of class action suit was not only specifically reflected in the relevant documents but the issue had also been specifically gone into by the AO.
A specific query was raised by the Assessing Officer during the scrutiny assessment proceedings as is reflected from the order-sheet dated 16th November 2016 whereby the Assessing Officer had sought specific details of claims made under class action suit (Rs. 161.63 crore) and had sought justification for its allowability. The query so raised was responded to by the petitioner which was before the AO.
Finally, an order of assessment came to be passed on 3rd January 2022 wherein the claim was not disallowed. It, therefore, is clear that the issue with regard to the claim of deduction on account of payment made to settle a class action suit was not so embedded in the documents as could not with due diligence have been noticed by the Assessing Officer rather in this case, the claim had been noticed, queries raised, response called, which came to be furnished, and therefore, must be deemed to have been considered. In such a case, it cannot by any stretch of imagination, be said that there was any failure to disclose fully and truly any of the material facts.
In the present case, a bald assertion made in the reasons recorded that what was paid was in fact was a penalty would not make the deduction liable to be disallowed in terms of Explanation – 1 to section 37 of the Act. For purposes of reference, Explanation to Section 37 envisages that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure.
The argument that the petitioner had failed to provide to the Assessing Officer a copy of the plaint/suit filed against the petitioner before the Court in USA which it is alleged constitutes a failure on the part of the assessee to disclose fully and truly a material fact, in our opinion, does not at all impress or appeal to us in any manner. Nothing could have prevented the Assessing Officer from calling for a copy of the pleadings which were filed before the Court in USA if at all it was found to be necessary. Therefore, the argument advanced clearly deserves to be rejected.
A reference to the agreement would show that what was agreed to be paid was on account of a pure settlement between the parties. It was also made clear in the agreement that the settlement was being arrived at for purposes of avoiding expense, risk and uncertainty and further that the agreement would not be construed as an admission by the defendants of any wrongdoing or that the plaintiff’s claim had any merit or that the defendants have any liability to the plaintiffs or class members on those claims. The agreement also reflects that the same would not be construed as an admission of wrongdoing or liability on the part of any party to the said agreement. Even the order passed by the Court recording approval to the said agreement did not even in the least refer the amount payable in any manner as a penalty amount.
A.O. had no reason to believe that the payment made towards settlement of the class action suit was a payment towards a penalty imposed and on that account we hold that there was no reason for the A.O. to believe that income had escaped assessment. In the light of the above to hold that what was paid by the petitioner was a penalty, in fact, would be without any basis and aimed at reviewing an order passed earlier by the AO who had specifically gone into the allowability of the claim. We also have no hesitation in holding that a mere assertion in the absence of any material would not constitute a ‘tangible material’ for purposes of reopening an assessment. Decided in favour of assessee.
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2023 (6) TMI 1293 - BOMBAY HIGH COURT
Validity of Reopening of assessment - notice issued in name of non-existent entity - factum of amalgamation was brought to the notice of the AO as acknowledged by the DCIT - HELD THAT:- It is not denied that the notice issued under section 148 of the Act was issued in the name of a non-existent entity, i.e., Times Infotainment Media Ltd. which had ceased to exist pursuant to the Scheme of Amalgamation and arrangement having been approved as passed by this Court with effect from 1st April 2013.
As not denied, as can also be seen from the material on record, that the factum of amalgamation of TIML was very much within the knowledge of the respondents. If that be so, then issuance of the impugned notice under section 148 in the name of a non-existent entity would render it void.
As relying on case of CLSA India Private Limited [2023 (2) TMI 469 - BOMBAY HIGH COURT] we hold that the impugned notice issued u/s 148 is unsustainable in law and is accordingly set aside. Decided in favour of assessee.
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2023 (6) TMI 1292 - BOMBAY HIGH COURT
Reopening of assessment u/s 147 - notice after a period of four years - Reasons to believe - Whether case reopened on account of ‘change of opinion’? - HELD THAT:- As the principle of change of opinion cannot be a basis for reopening completed assessments where AO has applied his mind and taken a conscious decision on a particular matter in issue. Moreover, the decision of the AO u/s 143(3) dated 22nd December 2017 is against the Petitioner who has filed an appeal therefrom that is pending adjudication before the CIT (A).
A perusal of the reasons recorded by Respondent No. 1 indicates that the Respondent No. 1 has relied upon facts and figures available from the audited account. It appears that there was no tangible material available on record to conclude that income had escaped assessment. The ratio in the case of Ananta Landmark [2021 (10) TMI 71 - BOMBAY HIGH COURT] is clearly applicable to the facts of this case.
Thus AO has acted in excess of the limit of his jurisdiction to reopen the assessment in the exercise of powers under section 147 r.w.s. 148 of the Act. Decided in favour of assessee.
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2023 (6) TMI 1291 - BOMBAY HIGH COURT
Miscellaneous Application u/s 254 (2) rejected as not covered under the Direct Tax Vivad Se Viswas Act, 2020 (‘DTVSV-A’) as it was not filed in pursuance of an appeal ‘dismissed in limine’ - HELD THAT:- As with regard to the condition in answer to FAQ 61, viz. ‘Appeal dismissed in limine’ we are of the view that the qualifying words ‘in limine’ that apparently restrict the eligible assessees for availing settlement under the DTVSV, are contrary to its object and reasons. The Apex Court in the case of UCO Bank, Calcutta [1999 (5) TMI 3 - SUPREME COURT] and Commissioner of Central Excise, Bolpur vs Ratan Melting & Wire Industries [2008 (10) TMI 5 - SUPREME COURT] the additional qualification viz. “in limine” added to the word Appeal is adverse to the assessee, against the mandate of DTVSV-A and thus contrary to law.
It would be appropriate that the ratio laid down in the above cases with regard to ‘construing a remedial statute’ be followed in the present case in as much as DTVSV-A is a beneficial statute.
The Delhi High Court in the case of Medeor Hospital Limited v Principal Commissioner of Income Tax [2022 (11) TMI 26 - DELHI HIGH COURT] and Tushar Agro Chemical [2021 (7) TMI 1267 - GUJARAT HIGH COURT] have held that CBDT cannot issue circulars adverse to the assessee. For the reasons aforesaid we hold that the FAQ 61 of the circular 21/2020 dated 4th December 2020 issued by the CBDT to the extent that it restricts appeals to the ones ‘dismissed in limine’ are not only adverse to the interest of the assessee but also contrary to the object and reasons of DTVSV-A.
ORDER: FAQ No. 61 of the Circular 21 of 2020 issued by the Respondent no. 1 is struck down. The impugned rejection order dated 3rd August 2021 passed by Respondent No. 2 is quashed and set aside. The Respondent No. 2 is directed to issue acknowledgment in Form 3 against the application made by the Petitioner in Form 1 and Form 2.
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2023 (6) TMI 1290 - BOMBAY HIGH COURT
Reopening of assessment - migration to new PAN from old PAN - undisclosed time deposits - What was procedure for the cancellation of PAN that the Petitioner failed to follow? - HELD THAT:- The Counsel were unable to point out any regulation, circular or a procedure that could help the assessee cancel the PAN. We also examined the record which evinced that, the Petitioner has filed their returns under the new PAN. The perusal of the notice also indicates that the Respondent No. 1 has failed to acknowledge the correspondence by the Petitioner with the Respondent No. 1.
It was the duty of the Respondent No. 1 to have examined and verified the contentions of the Petitioner in respect of cancellation of the old PAN and the returns filed under the new PAN before the issuance of the impugned Order and the impugned notice.
A failure of duty of Respondent No. 1 has led to filing of this Petition which in our view could be easily avoided along with its cascading effect on the Courts which are already overburdened. This is yet another in the case of Bhavna Steel v ITO-5(1)(1) [2023 (6) TMI 402 - BOMBAY HIGH COURT] where the assessee has sought to cancel the old PAN and the IT department has failed to do it. The Respondents ought to prominently display the steps for cancellation of a PAN on their website apart from sending a link for cancellation in the covering letter when a PAN is provided to an assessee.
In the absence of any clear answer to the query and any clear stand of the department, we are prima facie of the view that the Petition deserves to be allowed without further procrastination.
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2023 (6) TMI 1289 - BOMBAY HIGH COURT
Reopening of assessment u/s 147 - notice after a period of four years - Reasons to believe - Whether case reopened on account of ‘change of opinion’? - Reopening based on the order of SEBI in cases of reversal trades and accommodation entries - HELD THAT:- The criteria for reopening of assessment after a period of four years are no longer res integra in view of the judgment of this Court in the case of Ananta Landmark P. Ltd [2021 (10) TMI 71 - BOMBAY HIGH COURT] wherein this Court held that, where assessment was not sought to be reopened on the ‘reasonable belief’ that income had escaped assessment on account of failure of assessee to disclose truly and fully all material facts that were necessary for computation of income, but was a case wherein assessment was sought to be reopened on account of ‘change of opinion’ of AO the reopening was not justified.
Where primary facts necessary for assessment are fully and truly disclosed the AO is not entitled to reopen the assessment on a change of opinion. Also held that while considering the material on record, when one view is conclusively taken by AO, it would not be open for the AO to reopen the assessment based on the very same material and take another view.
In the present case, the Respondent No. 1 has received information from ITO (I & CI) Unit 2(3) Mumbai, that SEBI passed orders in cases of reversal trades and accommodation entries. Even though the Petitioner has explained the transactions done, through note No. 17 submitted along with the Profit and Loss Account and other supporting documents, the Respondents have mindfully taken a stand, that at this stage, they are not required to look into the sufficiency and correctness of the information and can consequently reopen the case.
Once the Petitioner provided the all the details, explanations and documents against the reasons for reopening. AO considering the principle of ‘shifting of onus’ under the evidence act, must necessarily carefully examine the material and then give particulars and reason/s to disbelieve the assessee, whilst rejecting the objections, to shift the onus on the assessee, as failure to do so, does not discharge the onus shifted upon him (AO) by the assessee by submitting all documents and explanations, and provides no reason for the Court to disbelieve the assessee.
There is an essential distinction between burden of proof and onus of proof: burden of proof lies upon a person who has to prove the fact and which never shifts. Onus of proof shifts. Such a shifting of onus is a continuous process in the evaluation of evidence. See R V E Venkatachala Gounder v Arulmigu Vishwesaraswami & V. P. Temple & anr. [2003 (10) TMI 639 - SUPREME COURT]
As evinced that there is no live link or nexus with the alleged orders passed by SEBI as alleged by the Respondent. Besides the Respondent has failed to aver the particulars of the information available which has led to the belief that income has escaped assessment. There appears no new tangible material available on record to conclude that income had escaped assessment. In our view it is clearly a ‘change of opinion’. Decided in favour of assessee.
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2023 (6) TMI 1288 - BOMBAY HIGH COURT
Reopening of assessment in the name of deceased assessee - Whether a curable defect u/s 292B? - HELD THAT:- The impugned notice for reopening the assessment was issued on a dead person. There are several judgments of different High Courts holding that the notice issued on a dead person or reopening of assessment of a dead person is null and void in law and the requirement of issuing a notice to a correct person is not merely a procedural requirement but a condition precedent for a notice to be valid in law.
In the case of Principal Commissioner of Income Tax, New Delhi vs Maruti Suzuki India Ltd. [2019 (7) TMI 1449 - SUPREME COURT] the Apex Court has held that the notice issued and the order passed in the name of an old entity is bad in law and that such error was not curable u/s 292B of the Act as the same constitutes a substantive illegality and not a mere procedural violation.
This Court holds that the notice and all consequential proceedings in the name of a deceased assessee are null and void - Decided in favour of assessee.
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2023 (6) TMI 1287 - GUJARAT HIGH COURT
Rejection of ITR by the CPC as defective u/s 139(9) - Condonation of delay in filing the application for rectification of error committed in the return of income - removal of defects in return of income - Return of income filed u/s 44ADA declaring the professional income as well as income from trading in shares - HELD THAT:- As decided in ADCC Infocom (P.) Ltd [2023 (4) TMI 245 - BOMBAY HIGH COURT] wherein the expression ‘genuine hardship’ has been discussed, if the facts of the present case are examined, we are of the view that the petitioner has pointed out genuine hardship caused to the petitioner as a result of which the mistake committed in the return could not be rectified, as suggested by the CPC within the stipulated period.
As in the present case one of the authorities of Revenue i.e. PCIT-1 passed an order on 07.09.2021 in favour of the petitioner, wherein as specifically observed by the said authority that, ‘in view of the genuine hardship faced due to lockdown in Ahmedabad city due to the corona pandemic, the assessee could not comply with the notice issued by the CPC, Bangalore within the stipulated period’ and by giving the said finding, the order was passed by the said authority in favour of the petitioner.
As observed hereinabove, the said authority was not having jurisdiction to pass said order and therefore the same was withdrawn. Be that as it may, the fact remains the one of the authorities of the Revenue considered the case of the petitioner and thereby granted relief in favour of the petitioner.
Thus, in view of the aforesaid facts and circumstances of the present case, the case of the petitioner deserves consideration. Hence, petition is allowed.
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2023 (6) TMI 1286 - MADHYA PRADESH HIGH COURT
Reopening of assessment - income of the petitioner HUF be not made subject matter of re-assessment - petitioner while taking exception to the impugned notice and order inter alia submits that subsequent to allotment of new PAN Card in the year 2016 it has all along been filing returns of the income for the succeeding assessment years including 2016-17 with new PAN Card number and amount allegedly deposited in the bank maintained by the petitioner has been well reflected in the return filed for the assessment year 2016-17 and assessed
HELD THAT:- There is no jurisdictional error on the part of the Assessing Officer while he passed the impugned order under clause (d) of Section 148A. Nevertheless, it is apposite to observe that the order passed under clause (d) of Section 148A is not the substitute of the order of assessment if any to be passed by the AO during the course of the re-assessment proceedings. AO is statutorily obliged to look into the entire material placed before him before he reaches the conclusion that the income found has escaped assessment warranting re-assessment and tax thereupon.
Consequently, we though decline to interfere but direct the Assessing Officer to extend liberty to the petitioner to file complete documents with reference to and in context of the amount found deposited in the bank account of the petitioner mentioned above and such other documents as he may be advised to file. The Assessing Officer is hereby directed to process reassessment with due advertence to the record placed before him, pursuant to the notice under Sec.148.
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2023 (6) TMI 1285 - ITAT DEHRADUN
Unexplained investments made by the payment in cash - assessee could not specifically explain the source of making payment to Sh. Jagat Bhushan Batra - HELD THAT:- AR had placed on record a copy of the assessment order framed in the hands of Sh. Rameshwar Havelia u/s 153A(1)(b) r.w.s.143(3) by DCIT, Central, Circle, Dehradun (who is the same officer assessing the assessee also), wherein, the AO of Sh. Rameshwar Havelia had categorically stated that it is Sh. Rameshwar Havelia, who had made cash payment of Rs. 1 crore to Sh. Jagat Bhushan Batra.
Hence, the receipt of money in cash by the assessee from Sh. Rameshwar Havelia is proved beyond doubt by the orders of the Income Tax Department itself. Hence, the source for making payment to Sh. Jagat Bhushan Batra of Rs. 1 crore in cash stands clearly proved and explained. Hence, in our considered opinion, there cannot be any unexplained investment made by the assessee in the sum of Rs. 1 crore in the facts and circumstances of the instant case.
Since the search assessment order of Sh. Rameshwar Havelia for assessment year 2015-16 could not be placed on record by the assessee before the CIT(A) as it was obtained by him after passing of order of learned CIT(A), this fact could not be addressed by the assessee before the learned CIT(A). These are only orders of the Income Tax Department, which clearly shows a divergent stand taken by the very same AO for the very same assessment year for two different assessees on the very same transaction. Hence, we direct the learned AO to delete the addition made in the sum of Rs. 1 crore paid in cash to Sh. Jagat Bhushan Batra. Decided in favour of assessee.
Capital gain computation - denial of deduction on account of cost of acquisition and expenses incurred in connection with transfer of property - HELD THAT:- A sum as paid by the assessee to Sh. Sandeep Kumar towards demarcation of land would be construed as cost of improvement eligible for deduction while computing capital gains. Further, the commission payment to Sh. Sandeep Kumar for sale of two plots is to be construed as expenses incurred in connection with transfer and eligible for deduction while computing capital gains.
Payment as commission to Smt. Rajni Aswal for sale of third plot, we find that the assessee has placed on record the confirmation from Rajni Aswal together with her income tax return and computation of total income evidencing the fact of offering the commission income in her hands. These documents are enclosed - We hold that this commission payment is to be construed as expenses incurred in connection with transfer of land and accordingly eligible for deduction while computing capital gains.
Thus out of the total disallowance made by the AO while computing capital gains expenses incurred for performing Puja of the land as this has got nothing to do with the property and cannot be construed as an expenses incurred in connection with the transfer of the property and sum paid to a civil contractor, Sh. Sandip Kumar from whom the work of demarcation and construction of partition for three plots sold was carried out need to be disallowed and remaining amounts should be allowed as deduction while computing capital gains.
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2023 (6) TMI 1284 - ITAT JAIPUR
Addition u/s 143(3) - rejecting the books of accounts of the assessee u/s 145(3) - HELD THAT:- As during the appellate proceedings assessee has not furnished any evidences, where the ld. CIT(A) relied on the detail findings and reasons given by the ld. AO in his assessment order which have not been explained by the assessee and no evidence to the contrary has been submitted either at the stage of assessment or appellate.
Before us taking into consideration the facts and circumstances of the case and the submissions by the ld. DR, the Bench confirm and uphold the order of the ld. CIT(A) as per rejection of books of accounts of trading of bullions and jewellery of the assessee u/s 145(3) of the Act by invoking the provisions of Section 145(3) of the Act as the assessee did not produced books of account, bills/vouchers of all the expenses even before us and the addition made by the AO amounting is hereby confirmed - Decided against assessee.
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2023 (6) TMI 1283 - ITAT DELHI
Mis-match in the Form No. 26AS - Mis-match arises due to TDS deposit under wrong major head - denial of credit of TDS - HELD THAT:- As deductor has deducted the tax at source and deposited the same which is appearing in the challan status in TIN Website but the same is not appearing in 26AS of the assessee. It is the case of the assessee is that these TDS deposits belongs to him on the basis of manual form No. 16 issued by the employer, therefore, because these TDS amounts do not reflect in 26AS of the assessee.
Since there is a mis-match of amount deposited by Texl Export Pvt. Ltd. and TDS reflected in 26AS of the assessee, the CIT(A) has remanded the matter to the file of A.O. for de-novo verification. No reason to interfere with the direction of the CIT(A) to the A.O. for the de-novo verification, accordingly, find no merit in the grounds of Appeal of the assessee. We deem it fit to direct the A.O. to comply with the directions of CIT(A) and pass order in accordance with law within six months from the date of the receipt of this order. Thus, the Grounds of Appeal of the assessee are dismissed.
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2023 (6) TMI 1282 - ITAT DELHI
Addition u/s 56(2)(viib) - share capital and premium received by the assessee - revenue dismissing the DCF method of valuation as adopted by assessee - HELD THAT:- Usage of DCF method for the purpose of valuation of shares is an approved method in Rule 11U and 11UA of the Income Tax Rules. On perusal of the said Rules, an option is given to the assessee to choose either of the methods prescribed therein.
Hence, the rejection of valuation report submitted by the assessee using DCF method by the lower authorities is hereby dismissed. As per DCF method of valuation, the fair market value of the shares have been arrived at Rs. 1136.92 and Rs. 992 per share by Chartered Accountant namely Sh. A.K. Agarwal and Sh. Deepak Kumar Agarwal respectively.
Assessee had ultimately issued shares to the aforesaid five share holders at a price below the fair market value of shares determined by the valuers in the valuation report. Obviously, the fair market value determined in the valuation report by the valuers represent the maximum value beyond which the shares could not be issued by any company. Hence, we do not find any justification in the action of the lower authorities in dismissing the DCF method of valuation and substitute it with any of the method of valuation and making addition u/s 56(2)(viib) of the Act.
Issue in hand is squarely covered by the decision of this Tribunal in the case of Cinestaan Entertainment (P.) Ltd.[2019 (6) TMI 1367 - ITAT DELHI] wherein it was held as per section 56(2)(viib) of the Act read with Rule 11U and 11UA of the Rules, the assessee has an option to do valuation of shares and determine fair market value either using DCF method or NAV method and Assessing Officer cannot examine or substitute his own value in place of value determined.
When shares were issued at premium based on valuation report from prescribed expert using DCF method of valuation, the said sum cannot be disregarded merely because the projection of revenues thereon did not match with actual revenues of subsequent years.
We direct the Ld. AO to delete the addition made u/s 56(2)(viib) - Ground raised by the assessee is allowed.
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