|
Advanced Search Options
Case Laws
Showing 1 to 20 of 427488 Records
-
2025 (3) TMI 1092
Retrospective application of amendment to Rule 108 of the GST Rules, 2017, which altered the requirements for submitting a certified copy of the order appealed against - failure to submit a certified copy of the order within the specified period, as per the unamended Rule 108 - differences in various returns - HELD THAT:- It is admitted that the appeal against the order dated 16.08.2022 passed by the Proper Officer was preferred on 15.11.2022. It is also not in dispute that along with the appeal, copy of the order appealed against was also filed. The said fact has specifically been mentioned in paragraph no. 22 of the writ petition, which has not been denied by the State in paragraph no. 11 of the counter affidavit. During the pendency of the appeal, subsequent amendment to rule 108 came on 16.12.2022.
As per the unamended rule 108 (3) of the Rules, the time of filing certified copy of the order appealed against was within 7 days of submission of appeal; whereas, as per the amended rule 108(3) of the Rules, where the decision and order against is not uploaded on the common portal, then the party shall submit certified copy of the said decision within 7 days - Bare conjoint reading of the aforesaid provisions clearly shows that in the event certified copy of the order appealed against is not uploaded along with the appeal through e-mode, then within 7 days of filing of the appeal, a self-certified copy of the order was supposed to be filed within 7 days.
The issue in hand has already been decided by the Delhi High Court in Chegg India Private Limited [2024 (12) TMI 1354 - DELHI HIGH COURT] wherein, the Court has held that the condition for physically filing the certified copy is not mandatory, but procedural in nature. If an appeal is preferred along with all documents and the copy of the appeal, the filing of certified copy is not required.
Similarly, in the case in hand, it is not in dispute that the appeal, which was preferred on 15.11.2022, was without order appealed against. Once this fact is not in dispute, the issue in hand is covered by the judgement of the Delhi High Court in Chegg India Private Limited.
Conclusion - i) The condition for physically filing the certified copy is not mandatory, but procedural in nature. ii) The amendment to Rule 108 is procedural and applies retrospectively, allowing appeals filed electronically within the limitation period to be considered valid despite delays in submitting a certified copy.
The matter is remanded back to the appellate authority, i.e., the Additional Commissioner, Grade - 2 (Appeal), State Tax, Noida, for considering the appeal on merit - petition allowed.
-
2025 (3) TMI 1091
Dismissal of appeal on technical grounds - non-constitution of Tribunal - failure to comply with the legal mandate of making the pre-deposit - HELD THAT:- Noting that the petitioner’s appeal has been rejected on technical grounds and at present the Appellate Tribunal under Section 112 of the said Act is yet to be constituted, one more opportunity should be granted to the petitioner to make payment of the pre-deposit as required under Section 107(6) of the said Act.
The order dated 22nd May, 2024 passed by the Appellate Authority rejecting the petitioner’s appeal is set aside - Petition disposed off.
-
2025 (3) TMI 1090
Condonation of delay in filing these Special Leave Petitions - HELD THAT:- No reasons to be satisfactory nor sufficient in law so as to condone the delay of 467 days in filing these special leave petitions. Hence, the application(s) seeking condonation of delay is dismissed. Consequently, the Special Leave Petitions are also dismissed.
However, all contentions which are available to the petitioner(s) herein may be advanced before the concerned Magistrate’s Court in accordance with law.
It is needless to observe that if the relevant contentions are advanced by the petitioner(s) herein, the same shall be considered and adjudicated upon by the learned Magistrate.
We also clarify that the observations of the High Court in the impugned order(s) are restricted to the consideration of the case under Section 482 of the CrPC only.
The Court before which the prosecution against the petitioner(s) is/are pending shall endeavour to dispose of the said case as expeditiously as possible with the cooperation of the parties.
Assessment u/s 153A - pendency of re-assessment proceedings - Offence punishable u/s 276CC - unaccounted receipt of money by the petitioner towards remuneration for directing movies - Whether assessment order was barred by limitation? - as per HC [2022 (6) TMI 88 - MADRAS HIGH COURT] this Court is of the considered view that respondent/complainant made out prima-facie case to proceed against the petitioner for the offences alleged in the complaint. Section 278 (e) of the Income Tax Act, 1961, empowers the Court to presume culpable mental state of the accused, unless, the accused shows that he had no such mental state with respect to the act charged as an offence in the prosecution. In this view of the matter, this Court finds that petitioner shall necessarily face the trial. Criminal Original Petitions dismissed - HELD THAT:- As respondent(s) sought some time to file Vakalatnama. Accepting his submission, three weeks’ time is granted to file Vakalatnama.
We dispose of these Special Leave Petitions by reserving liberty to the petitioner(s) herein to take up all contentions regarding the maintainability of the prosecution before the concerned Trial Court.
It is needless to observe that if such contentions regarding the maintainability of the prosecution are raised by the petitioner(s) herein, the same shall be considered in light of the relevant case law and in accordance with law and facts of the present cases.
-
2025 (3) TMI 1089
Addition u/s 68 - Addition in respect of share and share premium - ITAT deleted addition - HELD THAT:- Tribunal has elaborately considered the factual position and faulted the manner in which the assessment was completed by observing that it was a cryptic order without discussing the facts of the matter nor the submissions made by the assessee nor the documents produced by the assessee to prove the three factors, namely, identity, genuineness of the transactions and creditworthiness of the subscribers.
Tribunal also found that though such documents were once again produced before the CIT(A), but the same were not referred to nor any defect or discrepancy was pointed out under the said documents.
Apart from that, Tribunal has also pointed out that there are factual mistakes by the CIT(A) while passing the order which are contrary to the conclusion arrived at by the AO.
Tribunal took note of the decision of NRA Iron & Steel (P) Ltd. [2019 (3) TMI 323 - SUPREME COURT] noted that the principles which were summed up in the said decision when a case is considered under Section 68 of the Act. After noting the said decision, Tribunal examined the factual position and found that the initial burden casted upon the assessee has been discharged inasmuch as the assessee had produced the documents to prove the identity of the subscribers, the genuineness of the transaction and creditworthiness of the subscribers - Decided against revenue.
-
2025 (3) TMI 1088
Validity of the notice issued u/s 148 - notice issued by non-jurisdictional officer - as argued notice was issued by the one A.O i.e. ITO, Ward-1(3), Raipur who was not having valid jurisdiction over the assessee to issue such notice at the relevant point of time
HELD THAT:- As notice u/s 148 of the Act, dated 30.03.2019 which had been issued by the ITO, Ward-1(3), Raipur who had no valid jurisdiction over the assessee at the relevant point of time, therefore, it is held invalid, bad in law and all subsequent proceedings thereafter are accordingly held as void ab initio, non-est in law.
The re-assessment framed by the ITO-2(1) Raipur passed u/s. 147 r.w.s.143(3) in absence of an order of transfer u/s. 127 of the Act having been passed by the Ld. Pr.CIT and without issuance of notice u/s. 148 of the Act, is held to be without any jurisdiction and thus, held as bad in law and the same is quashed. Decided in favour of assessee.
-
2025 (3) TMI 1087
Estimation of income - bogus purchases - AO has treated the purchases declared by the assessee as bogus and proceeded to make the addition on estimate basis @ 10% - HELD THAT:- Assessee is dealing in trading in steel and scraps and in various cases coordinate benches have estimated the income in this line of business @ 5%. Therefore, the assessee has already declared profit @ 3.5% and direct the AO to make the addition of difference of 1.5% on the bogus purchases as income of the assessee.
Unexplained cash deposits u/s 68 - As bank account as well as ledger copies of Goyal Trading Company and Sagar Enterprises and we observe that there is no cash deposits in any of the ledger accounts submitted by the assessee and also there is no cash deposits in any of the bank accounts submitted before us to the extent of Rs. 3 lakh each from both the parties.
In the case of Goyal Trading Company, observe that there is a credit balance of Rs. 3 lakhs and at the same time observe that there was also a debit of Rs. 3 lakhs, which shows that it is a contra entry for dishonour of the cheque deposit by the assessee. Therefore, in absence of any cash deposits and all the transactions recorded in the bank account are only through cheques, therefore, no reason to sustain the addition.
Decided in favour of assessee.
-
2025 (3) TMI 1086
TP Adjustment - intra-group services (IGS) received by the assessee - Cost allocation methodology for intra-group services availed by Appellant - HELD THAT:- We observed that similar issue was considered by the coordinate Bench in AYs 2018-19 and 2019-20[2023 (1) TMI 42 - ITAT DELHI] as held service recipient of the assessee is unable to make use of the said technology only by itself in its business or for its own benefit without recourse to the assessee year after year - The receipts of the assessee on account of provision of information technology and other administrative services to its affiliate in India are not in the nature of Fees for Technical Services under the India Singapore Double Taxation Avoidance Agreement and we, accordingly, direct the Assessing Officer to delete the same.
Purchase of fixed assets - HELD THAT:- As assessee purchased similar equipments for the purchase of resale, however a part of the abovesaid capital assets were also used for demonstration purposes. The assets which are used for demonstration purposes were capitalized by the assessee. The transaction is closely inter-linked and aggregated with the trading segment of the assessee for the purpose of determination of ALP, we observed that assessee has also claimed depreciation on these assets on the assessee’s trading margin was determined after claim of the depreciation on abovesaid assets which are used for demonstration purposes. Further it is brought to our notice that the TPO has accepted the ALP of the trading segments which is at arms length. Since the assessee has capitalized the same traded assets, in our considered view, the ALP of the purchase of fixed assets to be determined based on the value of input cost of traded goods which assessee has traded during the year and shown relevant profits. The assessee has submitted a comparative purchase chart of traded and the assets utilized for demonstration purposes which was already reproduced in the submissions of the ld. AR.
Thus, remit this issue back to the file of AO/TPO with a direction to verify the cost of assets utilised for demonstration purposes and also the cost of input of traded goods. We direct TPO to redo the ALP adjustment after giving proper opportunity of being heard to the assessee and determine the ALP as per law. Accordingly, ground allowed for statistical purposes.
-
2025 (3) TMI 1085
TP Adjustment - allocation of software cost received from its Associated Enterprises - HELD THAT:- We find considerable cogency in the contention of the Ld. AR that the instant issue is fully covered by the order of the Coordinate Bench of the Tribunal in assessee's own case for A.Y. 2014-15 [2021 (12) TMI 1428 - ITAT DELHI] wherein the coordinate Bench upheld that the reimbursement received at cost does not require any mark-up.
Further it is noted that Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence Pvt. Ltd. [2021 (3) TMI 138 - SUPREME COURT] had also upheld the reference to OECD guidelines being persuasive in nature. In view of the aforesaid discussions and respectfully the aforesaid precedents, we deem it fit and proper to direct the AO/TPO to delete adjustments in respect of reimbursement received. Accordingly, Ground are allowed.
Adjustment u/s. 92CA(3) - allocation of reimbursement received from its Associated Enterprises - HELD THAT:- We find considerable cogency in the contention of the Ld. AR that the instant issue is fully covered by the order in assessee's own case for A.Y. 2014-15 [2021 (12) TMI 1428 - ITAT DELHI] wherein upheld that the reimbursement received at cost does not require any mark-up. It is noted that in this case the assessee relied on OECD guidelines which support that no mark-up is chargeable in reimbursements. Thus, we deem it fit and proper to direct the TPO to delete such adjustment in respect of reimbursement received.
Adjustment u/s. 92CA(3) on account of Corporate Guarantee Fee from AE - HELD THAT:- We find considerable cogency in the contention of the Ld. AR that the instant issue is fully covered by the order of the Coordinate Bench of the Tribunal in assessee's own case for A.Y. 2014-15, wherein the coordinate Bench upheld the corporate guaranteed rate @0.25%.
Adjustment on account of Inter unit Transfer – Technical Textile Business, Kashipur Division - assessee submitted that assessee’s methodology was rejected without providing any reason - HELD THAT:- We find considerable cogency in the contention that assessee’s methodology was rejected without providing any cogent reason. In our view, in various judicial precedents, CUP method has been preferred over TNMM.
Segmental margin of TTB segment computed by TPO @6.28% is incorrect as the segmental margin from the segmental results of assessee is 12.14% and hence no adjustment is warranted in any case. Accordingly, we direct the TPO to delete the adjustment.
Adjustment on account of Chemical & Polymer Business - HELD THAT:- Assessee’s methodology was rejected without providing any cogent reason. In various judicial precedents, CUP method has been preferred over TNMM. Segmental margin of CPB segment computed by TPO@ (-) 1.37% is incorrect as the segmental margin from the segmental results of assessee is reported at 33.34%.
As further noticed that the PLI of eligible unit as computed by TPO is 16.32% which is again lower than the CPB segment’s correct PLI. We further find force in the contention of the Ld. AR that DRP erred in computing the adjustment twice Rs. 40.23 lacs on cost side and Rs. 17.82 lacs on revenue side, thus incorrectly applying the TNMM method. This issue needs proper verification by the TPO on the basis information supplied by the assessee, we direct the TPO to determine the ALP on the basis of CUP method.
Transfer of power by Captive Power Plant (CPP) at Bhiwadi - HELD THAT:- Various judicial pronouncements advocated the adoption of SEB rates for benchmarking the electricity transfer and Rule of Consistency has also been followed by the assessee before Ld. DRP. The data of various discom rates obtained u/s 133(6) were not available in public domain, hence cannot be used. It is also noted that no opportunity was given to examine and rebut the data. In view of the Tribunal decision in the case of Technimont ICB P Ltd. [2012 (7) TMI 1172 - ITAT MUMBAI], we observed that assessee's internal CUP to be preferred over an external CUP, which was not done.
It is brought to our notice that in AY 2014-15 and AY 2015-16, similar bench marking was carried by the assessee adopting the CUP method based on SEB rates, which was accepted by the AO in AY 2014-15 and on the basis of CBDT instruction no 3/2016 in AY 2015-16. Hence, for the sake of bench marking the correct ALP on the electricity charges, we are inclined to remit this issue back to the file of AO/TPO to redo the bench marking based on the decision of Jindal Steels and others [2023 (12) TMI 417 - SUPREME COURT] and as per law.
Purchase of Electricity from VRETPL - HELD THAT:- Copy of sample invoices of power purchase by assessee from Tamil Nadu State Electricity Board (SEB) as an evidence to depict that the purchase rate of SEB is way higher than the rate charged by VREPL. We further note that detailed note explaining the basis of pricing of electricity and the benchmarking of the same in contrast to the rate of electricity purchase by the assessee from the SEB and the date of various discom rates obtained u/s 133(6) not available in public domain, hence it cannot be used. Tribunal decision in the case of Technimont ICB P Ltd. [2012 (7) TMI 1172 - ITAT MUMBAI] assessee's internal CUP to be preferred over an external CUP, which was not done, hence no adjustment is warranted in any case.
Hence, for the sake of bench marking the correct ALP on the electricity charges, we are inclined to remit this issue back to the file of AO/TPO to redo the bench marking by following the decision of Hon’ble Supreme Court in the case of Jindal Steel and others [2023 (12) TMI 417 - SUPREME COURT] case and as per law.
Sale of Electricity by WPP unit at Tamilnadu - HELD THAT:- It is brought to our notice that in AY 2013-14 and 2014-15, the assessee had bench marked by adopting CUP method based on EB purchased by assessee for other units from Tamil Nadu State Electricity Corporation, the same was accepted by the TPO and in AY 2015-16 accepted on the basis of CBDT instruction no 3/2016. Hence, for the sake of bench marking the correct ALP on the electricity charges, we are inclined to remit this issue back to the file of AO/TPO to redo the bench marking based on the decision of Jindal Steel and others [2023 (12) TMI 417 - SUPREME COURT] case and as per law. Hence, Ground Nos.40 to 43 are allowed as indicated above.
Disallowance of deduction u/s. 32AC - assessee submitted that there is no requirement of certificate for claiming the deduction u/s 32AC - HELD THAT:- We find that the assessee has submitted the relevant information on the claim of investment in new plant and machinery during the year. We direct the AO to consider the various information de novo after giving the proper opportunity of being heard to the assessee. The claim made by the assessee cannot be rejected mechanically and the assessee has made huge investments in the plant and machinery in order to claim the benefit u/s 32AC of the Act. Therefore, we are remitting these grounds back to file of AO.
Disallowance u/s. 14A - HELD THAT:- We find considerable cogency in the contention of the AR that the instant issue is fully covered by the order of the Coordinate Bench of the Tribunal in assessee's own case for 2006-07, 2007-08, 2008-09, 2010-11 & 2012-13 wherein the Bench deleted the similar additions.
Disallowance of weighted deduction u/s. 35(2AB) - HELD THAT:- Coming to the final assessment order, the AO has wrongly disallowed all the deductions claimed by the assessee including the old 4 approved facilities. Therefore, we direct the AO to allow the genuine claim of the assessee relating to approved facilities and disallow the excess deductions claimed by the assessee for the Gurgaon facility alone. In the result, grounds raised by the assessee are partly allowed.
Disallowance of all the deductions claimed by the assessee including the old 4 approved facilities - HELD THAT:- As we direct the AO to allow the genuine claim of the assessee relating to approved facilities and disallow the excess deductions claimed by the assessee for the Gurgaon facility alone. In the result, grounds raised by the assessee are partly allowed.
Disallowance of depreciation of goodwill - HELD THAT:- We find considerable cogency in the contention of the Ld. AR that the instant issue is fully covered by the order of the Coordinate Bench of the Tribunal in assessee's own case for years 2009-10, 2012-13, 2014-15 & 2015-16 wherein, the Bench upheld that goodwill is an intangible asset and eligible for depreciation.
Disallowance on account of inventories written off - HELD THAT:-The assessee has failed to submit the rationale for claiming separately the write off of inventory. Therefore, the submissions of the assessee are not appealing to us and we are inclined to sustain the additions made by the AO.
Case relied by the assessee are on the facts that the relevant assessee’s claimed the revaluation of inventory for reduction in the value of closing stock and the AO has rejected the same on the basis of non submission of item wise details or for other reasons. The Courts have decided the issues in favour of the assessee. The facts in the present case is distinguishable to facts of those decisions relied by the assessee. In the result, grounds raised by the assessee are dismissed.
Disallowance on account of software expenses - HELD THAT:- We find considerable cogency in the claim of the assessee. It is settled law that the software expenses are allowable expenses, which are recurring in nature and are meant to renew every year. Therefore, we are inclined to direct the AO to delete the above software expenses. In the result, the grounds raised by the assessee are allowed.
Additional claim made with respect to allowance of additional depreciation @ 10% u/s. 32(1)(iia) - HELD THAT:- We find considerable cogency in the contention of the AR that the instant issue is fully covered by the order of the Coordinate Bench of the Tribunal in assessee's own case for different assessment years specifically Assessment Year 2015-16 wherein the Bench remitted back the issue to the file of the AO and AO had allowed / granted its appeal effect order dated 22.03.2023 - we deem it fit and proper to remit back the issue to the file of the TPO with the similar directions.
-
2025 (3) TMI 1084
Late deposit of employees' contribution to PF - HELD THAT:- We observed that the issue under consideration is against the assessee based on the decision of Checkmate Services Pvt. Ltd. [2022 (10) TMI 617 - SUPREME COURT]. Accordingly, first ground of appeal raised by the Department is allowed.
Disallowance of interest on unneeded loans - HELD THAT:- Just because assessee has not earned any income during the year, the AO proceeded to disallow the proportionate interest relating to the above said investment. After careful consideration, we are of the view that assessee has invested for exploration of Potash Project in Ethiopia. The assessee has invested 32.43% stake which in turn has invested 12.5 million USD in M/s. Ethiopotash B.V. company.
The controlling of the raw material supply is key to any organization and assessee has invested to control the supply of raw material from Ethiopia. Therefore, the investment made by the assessee is directly linked to the business of the assessee. Therefore, we do not see any reason to disturb the findings of the ld. CIT (A) and accordingly, ground no.2 raised by the Revenue is dismissed.
Rejection of books of account u/s 145(3) - AO relying on the variation in the GP recorded by the assessee in the past three years and in remand proceedings, the AO has accepted the various details submitted by the assessee and has not made any negative observations on the details furnished by the assessee - HELD THAT:-CIT (A) has elaborately discussed that AO has not made preliminary verification of the information submitted by the assessee and rejected the books of account and proceeded to estimate the income. After careful consideration of the findings of the CIT (A) and also remand proceedings submitted by the AO, we are inclined to agree with the findings of the ld. CIT (A). Accordingly, ground no.3 raised by the Revenue is dismissed.
Disallowance of depreciation - Since the assessee has carried out the business only for seven months, accordingly he disallowed the depreciation for the proportionate period in which the plant was not functional and treated the claim of the depreciation as excess claim - HELD THAT:- We observed that the assessee has claimed depreciation for the whole year based on the concept of wear and tear and in the similar situation, assessee has given lay off for the plant in the AY 2000-01 and the coordinate Bench has decided the issue in favour of the assessee. Respectfully following the above decision, we are inclined to allow the claim of the assessee in the year under consideration also. Accordingly, ground no.4 raised by the Revenue is dismissed.
Addition u/s 68 - bogus share application money - HELD THAT:- As assessee represented the case of the sister concern and filed the relevant information as called for. CIT (A) has appreciated the fact that both these companies are sister concerns of assessee company wherein common promoters were promoted these companies and the summons issued by the AO were complied through authorized representative.
CIT (A) appreciated the relevant documents submitted by the assessee during the assessment proceedings as well as during appellate proceedings and has found that the documents submitted by the assessee are proper and accordingly gave relief to the assessee. Considering the facts on record, we are inclined to dismiss the ground raised by the Revenue and we are inclined to agree with the findings of the ld. CIT (A). Accordingly, ground no.5 raised by the Revenue is dismissed.
Addition on account of unsecured loan - HELD THAT:- We observed that the assessee has submitted the details of taking unsecured loan - As submitted before the ld. CIT (A) that M/s. Maneesha Finlease Limited is a sister concern of the assessee company and being a sister concern, assessee has already proved identity and established creditworthiness. With regard to genuineness of the transaction, assessee has submitted relevant confirmation and actual transactions of receiving unsecured loan. We observed that AO has added the outstanding balance at the end of the year without properly verifying actual transactions during the year. - Ld. CIT (A) has appreciated the complete facts on record and found that the genuineness of the transaction was already proved by the assessee. - Ground no.6 raised by the Revenue dismissed.
-
2025 (3) TMI 1083
Disallowance of u/s. 40(a)(ia) - As argued as per the provisions of Section 201(1) of the Act, when the recipient of income has paid tax on such income, the assessee cannot be treated as an assessee in default - As submitted that the assessee is willing to furnish a Chartered Accountant’s certificate in Form 26A to confirm that the interest income has been offered to tax by the recipient - HELD THAT:- In view of the above, the matter is restored to the AO for verification of Form 26A as per the provisions of Section 201(1) of the Act. If the assessee furnishes a valid Form 26A demonstrating that M/s H J Associates has paid tax on the interest received, the AO shall delete the disallowance made u/s 40(a)(ia) of the Act. Accordingly, this ground is allowed for statistical purposes.
Disallowance of interest Expenses - assessee failed to deduct TDS on these payments, as required u/s 194A - AR contended that all the lenders are agriculturalist having agricultural income and their other income is below taxable limit - DR contended that the interest is not paid and only credited to the account of parties from whom the amounts have been borrowed - HELD THAT:- As in the interest of justice, we deem it appropriate to restore the matter to the file of the AO for the limited purpose of verifying the validity and correctness of Form 26A and to examine whether the recipients have duly filed their returns of income, disclosing the interest income and paying tax thereon as per the provisions of Section 201(1) of the Act.
Addition u/s 43B - assessee had an outstanding VAT liability at the end of the financial year - AO held that the unpaid amount was outstanding as of the balance sheet date and was not cleared before the return filing due date, the disallowance u/s 43B of the Act was considered justified - HELD THAT:- Considering the submissions made and the decision of SDCE Projects Pvt. Ltd [2019 (10) TMI 309 - ITAT AHMEDABAD] we deem it appropriate to restore this issue to the file of the AO for verification. The AO is directed to examine whether the VAT liability was indeed reversed in the subsequent year and whether it was ever claimed as a deduction in the profit and loss account. AO shall verify to which account the VAT liability has been reversed and whether it has impacted the taxable income of the assessee. If it is found that the liability was merely carried forward as a current liability without being claimed as an expense, the disallowance under Section 43B of the Act shall be deleted.
Addition of unsecured loan u/s 68 - AO observed that the assessee failed to establish the creditworthiness of the lenders and the genuineness of following loan transactions - HELD THAT:- Considering the submissions and the judicial pronouncement relied upon by the AR, we deem it appropriate to restore the matter to the file of the Assessing Officer for fresh verification. The AO is directed to verify whether the loans in question were repaid in part or full and to reconsider the addition made under Section 68 of the Act, after examining the genuineness of transactions and the creditworthiness of the lenders in light of the ratio laid down in the case of CIT Vs. Apex Therm Packaging (P.) Ltd [2013 (12) TMI 1541 - GUJARAT HIGH COURT] Accordingly, this ground is allowed for statistical purposes.
Addition u/s 69 - treating the opening cash balance as unexplained investment, citing the assessee’s failure to substantiate the source of funds - HELD THAT:- We find that the assessee has relied on the certified personal balance sheet as on 31-03-2014, which reflects the opening cash balance. The assessee has contended that this balance was duly carried forward from the preceding year and does not represent any fresh credit during the year under consideration.
We deem it appropriate to restore the matter to the file of the AO for fresh verification. The AO is directed to examine the certified balance sheet and other supporting documents, including the cash book, to verify the genuineness of the opening cash balance. If it is found that the cash balance was genuinely carried forward from earlier years and is duly reflected in the books of accounts, the addition under Section 69 of the Act shall be deleted. This ground is allowed for statistical purposes.
-
2025 (3) TMI 1082
Addition u/s 14A r.w.rule 8D - As argued no expenditure was incurred by the appellant to earning exempt income - HELD THAT:-Section 14A is applicable if the assessee has income which is not includible in its total income and further assessee has incurred certain expenditure to earn such income.
In the instant case, the assessee has not incurred any expenditure which could be related to earning exempt income though it had exempt income. The language of section 14A is not at all ambiguous and in fact very clear and by virtue of the same, only expenditure actually incurred in relation to income not includible in total income shall be disallowed.
In no way, it could be interpreted that it seeks to disallow expenses on assumption basis. Therefore, disallowance u/s 14A can be made only when assessee has actually incurred any expenses in relation to such exempt income. The Hon’ble Supreme court in the case of Maxopp Investment [2018 (3) TMI 805 - SUPREME COURT] also expressed this view.
Looking to the fact that assessee has not claimed any expenditure which was incurred in relation to earn exempt income and further before invoking the provision of section 14A along with Rule 8D, the AO has failed to record satisfaction with respect to expenses claimed as related to earn exempt income, thus in our considered opinion the addition made made by invoking the provisions of section 14A r.w. rule 8D of the IT Rules, 1962 is not sustainable. Appeal of the assessee is allowed.
-
2025 (3) TMI 1081
Additions of 'Advance received from Customers' - HELD THAT:- The issues are covered by order in [2024 (10) TMI 32 - ITAT DELHI] for A.Y. 2009-10 in assessee’s own case as relying on Taparia Tools Ltd. [2015 (3) TMI 853 - SUPREME COURT] assessee would be entitled to deduction of the entire expenditure in the year in which the amount was actually paid. Decided in favour of assessee.
Disallowance of Security Deposit written off debited under the accounting head advances written off - HELD THAT:- As in view smallness of the amount vis-à-vis income of the assessee, the assessee claim for disallowance to be allowed as business loss as it pertains to revenue field on account of security deposit for participating in tenders.
TP adjustments in respect of international transactions of 'commission received' with its Associated Enterprise - comparable selection - HELD THAT:- Once the companies selected were dissimilar comparable are excluded then the operating profit/sales margin works out to 13.98. Moreover in subsequent years the TPO has accepted commission as Arm’s Length and has not made any addition vide order dated 29.01.2015. Accordingly, Ground of assessee’s appeal is allowed.
-
2025 (3) TMI 1080
TP Adjustment - corporate guarantee given by the appellant on behalf of its Associated Enterprises falls within the definition of international transactions u/s 92B - HELD THAT:- We find that the issue is a recurring one in the assessee own case and has been decided by the co-ordinate Bench in assessee’s own case [2023 (2) TMI 523 - ITAT KOLKATA], wherein it has been held that the corporate guarantee transactions are international transactions and accordingly, ground no. 2 raised by the assessee is dismissed.
As relying on [2023 (2) TMI 523 - ITAT KOLKATA]in assessee’s own case, wherein the Arm’s Length Price corporate guarantee fee has been restricted to 0.5%.
Addition u/s 14A r.w.s Rule 8D of the Rules - assessee has suo moto disallowed as expenses u/s 14A relating to earning of exempt income - HELD THAT:- CIT (A) deleted the addition by following the decision [2023 (2) TMI 523 - ITAT KOLKATA] as most of the investments held by the assessee are brought forward from preceding year and also the major portion of the investment is in the sister/group concerns of the assessee and thus, reverse the finding of ld. CIT(A) and delete the disallowance made by ld. AO and accept the suo moto disallowance offered by the assessee.
-
2025 (3) TMI 1079
Disallowance of depreciation on goodwill acquired/created as a result of amalgamation - HELD THAT:- In the present cases, there is no dispute on the valuation of acquired/created goodwill pursuant to the scheme of amalgamation in the books of account of the appellant assessee as neither the AO nor the CIT(A) has ever questioned the valuation of the said goodwill though the Ld. CIT(A) has held that the value of goodwill in the hands of the appellant company should be NIL as there was no value assigned to the goodwill in the books of account of amalgamating company; i.e. North Star Apartment Pvt. Ltd. Admittedly, the amalgamation has taken place in pursuant of the order dated 07.03.2015 of the Hon’ble Punjab and Haryana High Court.
We are of the considered view that this case is squarely covered by the decision of Eltek SGS Pvt. Ltd.[2023 (8) TMI 681 - DELHI HIGH COURT]. Thus, hold that the claim of depreciation on acquired/created goodwill pursuant to the scheme of amalgamation in AY 2015- 16 and 2016-17 respectively is justified. Decided in favour of assessee.
-
2025 (3) TMI 1078
Assessment of trust - Disallowing the donation and other expenses - AO disallowed the donation made by the assessee to another trust on the ground that the recipient trust was not registered u/s 12A - HELD THAT:- The provision of section 11(1)(a) allows a charitable trust to claim an exemption if at least 85% of its income is applied for charitable or religious purposes. Benefit of application is available only if the recipient entity is a registered charitable trust under Section 12A, as clarified in Explanation 2 to section 11(1).
Moreover, the assessee failed to provide any documentary evidence proving that the amounts were spent for charitable purposes. The burden of proof lies with the assessee to demonstrate that the expenditure qualifies for exemption u/s 11 of the Act. In the absence of such proof, the AO was justified in making the disallowance. Accordingly, we concur with the decision of the lower authorities. The assessee has neither substantiated that the payments were made for charitable purposes nor demonstrated that the recipient entity fulfilled the requirements of section 12A of the Act. Accordingly, the ground of appeal of the assessee is dismissed.
Addition by treating certain expenses as not allowable as an application of income - whether the disputed expenditures qualify as an ‘application of income’ for the purposes of section 11? - Role of the AO regarding the determination of income of a trust is limited to the provision of section 11 of the Act. In the present case, the authority below has not doubted regarding payment of expenses but only had a doubt regarding the expenses incurred in connection to charitable purposes or not.
In this regard, we referred the judgment of CIT Vs. Trustee of H.E.H. the Nizam's Supplemental Religious Endowment Trust [1978 (2) TMI 7 - ANDHRA PRADESH HIGH COURT] where it was held that expenses which are incidental to carrying out the charitable purpose cannot be excluded from the exemption.
As in view of above it clear that any incidental expenses incurred in carrying out the activity of charitable purpose, it should be excluded from the income of a trust. Now we need to determine that such expenses are of incidental nature of the trust or not.
Interest on TDS - Expenses on which TDS was deducted has not been doubted by the authorities therefore it is clear that such expenses incurred in connection of charitable purpose but the delay in compliance the assessee paid an extra cost. Thus, it does not mean that such excess cost is not allowable.
Penalty - ESI and Professional Tax - Penalties levied for delayed statutory payments should not be treated as personal in nature but as incidental to business operations. Since these payments relate to employer obligations, they are incidental to the charitable objectives of the assessee.
Gifts - It is well settled that expenses incurred for social and charitable activities aligned with the trust’s objects and therefore the same is qualified as an application of income. In CIT Vs. Surat Art Silk Cloth Manufacturers Association [1979 (11) TMI 1 - SUPREME COURT] it was held that any expenditure contributing towards achieving the trust’s objectives must be considered an application of income.
DKA Statue Expenses - The expenditure on the statue pertains to promoting the cultural and educational objectives of the trust.
Input Tax Credit Write-off - The assessee had to write off unutilized Input Tax Credit (ITC), which is a recognized accounting expense. As decided in CIT Vs. Munjal Showa Ltd. [2008 (2) TMI 19 - SUPREME COURT] has held that any write-off required due to legal and operational reasons must be considered a valid deduction.
Accumulation of income u/s 11(2) - assessee claimed having made an investment under the provisions of section 11(2) - whether the assessee has made the investment in the manner provided under the provisions of section 11(5) of the Act to claim the benefit of the application of income as provided under section 11(2)? - HELD THAT:- We are of the opinion that the amount lying in the bank account of the assessee can be treated as an investment as per the provisions of section 11(5) of the Act. Thus, in view of the above, it transpires that there was sufficient compliance by the assessee in keeping the money set apart as invested in the mode specified under section 11(5) of the Act.
As existing FDRs, which is free from any lien can also be treated as investments or deposit as per the provision of section 11(2)(b) of the Act. Hence, the ground of appeal of the assessee is allowed.
-
2025 (3) TMI 1077
Refusal to grant registration u/s 12AB - assessee has failed to satisfy about the genuineness of the activities - HELD THAT:- We note that the Manager of the trust is an old and illiterate man, and don’t well conversant with the registration of Trust laws and the person who was working with the assessee, who is looking after this issue, has left the job, and the assessee could not avail the opportunity of being heard before the Ld. CIT(E).
We further note that, according to the order, notices were only sent to the assessee and the order does not speak about the services of notice upon the assessee.
It is settled law that principles of natural justice and fair play require that the affected party should be given an opportunity to represent case, before the authority. In the interest of justice, we set aside the order of CIT(E) restore the matter back to the file of Ld. CIT(E) for de novo adjudication in this matter and pass a speaking order after affording due opportunity of being heard to the assessee, who in turn, is also directed to submit the relevant documents before the Ld. CIT(E). Appeal filed by the assessee is allowed for the statistical purpose.
-
2025 (3) TMI 1076
Restricted import or not - Scope of N/N. 12/2015-20 dated 12th June, 2020 - Brand New All Steel Radial Mining tires fall within the purview of said notification or not - amendment to import policy by the notification for various goods falling under Customs Tariff Heading (CTH) 4011 from ‘Free’ to ‘Restricted’ - HELD THAT:- In 2024, the disputed goods were tested by IRMRA. However, the tests were carried out on specific assumptions / requests of the DRI. The letter by DRI requesting the IRMRA to test the subject goods as per specific assumptions is neither on record nor provided to the Respondents when specifically asked. As per the tests reports of the IRMRA, the tests were not conducted on the basis of IS 15636:2022. In other words, despite the tires being categorized as “D” marking (i.e., speed not to exceed 65 km/hr), the disputed goods were tested as “J/K” category (i.e., speed not to exceed 100 km/hr or 110 km/hr).
The tests shall be conducted by Indian Rubber Manufacturers Research Association (IRMRA). This is on account of the fact that in 2022, similar tests were conducted by IRMRA (in terms of IS 15636:2022) when samples were drawn and forwarded by Central Intelligence Unit (CIU). IRMRA vide the test reports dated 15th September 2022, certified that the intended use of the tires was mining applications. Apart from the above tests, the IRMRA shall carry out any other test that it deems fit to determine whether the imported tires are of a kind used on construction, mining or industrial handling vehicles and machines. In the event the IRMRA also decides to do a speed test on the tires, the test report should indicate clearly that at what speed the tires were tested and the duration of the test as well as the wear and tear, if any, on the said tires.
Conclusion - IRMRA shall conduct specific tests to determine the classification of the tires as "Special-use" or "Normal-road-use". The results of these tests will inform the final determination of whether the tires fall under the restricted import category.
Stand over to 15th April, 2025.
-
2025 (3) TMI 1075
Levy of penalties u/s 114(iii) and section 114AA of the Custom Act, 1962 - Penalty on F -card holder of Custom House Agent (CHA) - export of Led Flash Torch light by gross over-valuation and mis-declaration with an intention to avail higher export incentive benefit - corroboration to the confession of appellant - admissible evidence or not - HELD THAT:- The allegations of attempt to export goods improperly have been confirmed against the appellant solely relying upon his statement alleging the same as the admission on part of the appellant. The copy of the said statement is produced by the department. Perusal thereof reveals that the appellant is admittedly the authorized CHA of the exporting firm, the main appellant. He produced all the requisite documents when demanded as that of packing list, invoices etc. as were provided to him by the respective exporters or their representatives. He also deposed that his firm prepared check lists of shipping bills on the basis of said documents and thereafter filed the same with the customs authority at ICD, TKD. This deposition clarifies that none of the ingredients of attempt appears to be fulfilled as against the appellant. There is no denial of the department that the detained consignment was tallying in quantity with the packing lists submitted along with the shipping bills.
Overvaluation - HELD THAT:- The appellant in his statement has deposed that he is not aware regarding the actual value of the goods, however he accepted that supplier had overvalued the exported goods. In addition, he deposed that he was getting 1% of the IGST/Drawback from the exporters in cash in lieu of preparing export documents of the goods which were overvalued by them. However, except the said deposition, there is no corroborative evidence produced by the department to show the receipt of the said amount by the appellant as an additional amount to his professional charges and nor to show that the appellant had knowledge of overvaluation being done by the exporters prior filing the shipping bills.
No doubt the department has taken the stand that admissions need not to be proved but it has also been the settled proposition of law that such admissions which are voluntary and does not get vitiated on account of any of the premises envisaged Section 24 of the Evidence Act are admissible as cogent evidence.
As per department, the statement of Shri Mali Ram Agarwal is a corroboration to the confession of the appellant. However, testimony of any statement recorded in the present case cannot be relied upon for the imposition of penalty unless it stands the test of Section 138B of the Customs Act, 1962 which is para materia to sub-section (1) of Section 9D of the Central Excise Act. The plain reading of both these provisions makes it clear that clause (a) and (b) of the said sub-section set out the circumstances in which a statement made and signed by a person before the officer of a gazetted rank, during the course of enquiry or proceeding under the act, shall be relevant for the purpose of proving the truth of the facts contained therein provided that the person making the said statement has been examined by the adjudicating authority. Section 9D came in for detailed consideration and examination by Hon’ble Delhi High Court in the case titled as J.K. Cigarettes Ltd. Vs. CCE [2009 (8) TMI 64 - DELHI HIGH COURT], it has been held that in absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement recorded by the gazetted officer is not admissible into evidence.
The statement of Shri Mali Ram Agarwal has not stood the test of Section 138B of the Customs Act, also that the appellant has objected his statement recorded under Section 108A as involuntary, recorded under pressure. Resultantly, the statements on record are miserably insufficient to prove the alleged act of attempt to export improperly and to use the false information is wrong. For appellant’s alleged admission also since same stands retracted subsequently no evidentiary value can be attached that too in absence of any corroborative evidence.
Conclusion - The department has failed to prove the guilt of the appellant who otherwise was the authorized CHA, had all the KYC documents and had filed the shipping bills based on the documents provided to him by the respective exporter or their representative and that he was not personally sure about the value of the goods imported.
The order of imposition of penalty upon the appellant set aside - appeal allowed.
-
2025 (3) TMI 1074
Additions of 'license fee' and 'advertising expenses' to the assessable value of imported goods - Lack of SCN - HELD THAT:- On a perusal of the records, it is found that the appellant herein had been importing from their overseas affiliates, and admittedly related parties, since 2006 and their original declarations, accepted by order of 29th March 2006, were, thereafter, sought to be renewed by communications of 23rd March 2009, 4th January 2011, 12th October 2012 and 24th June 2013 but it appears, in the absence of explanation in the orders of the lower authorities, that those, kept pending, were taken up for disposal only in July 2015 leading to the order for addition of specific components of recompense to overseas entities and which, but for the modification in the impugned order, were upheld by the first appellate authority.
It also transpires from the records, inasmuch as that the order of the original authority, directing loading for the imports covered for the period 2003-04 to 2013-14, was found to be unjustifiable to the extent of imports beyond five years from the relevant date, that the specific imports intended to be covered and those to be excluded, consequent upon the impugned order, remains unknown.
The impugned order is far from clear about to the reasons for limiting the additions to five years if, as stated in the order impugned before that authority, intent was to enable finalisation of provisional assessments. On the other hand, if the intent was to recover duty short-paid by reasons of evidence of the ingredients enumerated in section 28 of Customs Act, 1962 for invoking the period beyond the normal period of limitation, there should have been a finding of evidence to that effect consequent upon the importer being placed on notice of intent to invoke extended period of limitation as well as the consequential penalties specifically noted in such finding.
Conclusion - It would appear that the appeal before the first appellate authority had not been examined in terms of outcome of differential duty or evaluation of correctness of declared value in specific bills of entry which alone could have been cause of grievance. The correctness of the legality and propriety of the additions cannot be determined.
Matter remanded back to the first appellate authority for a fresh decision - appeal allowed by way of remand.
-
2025 (3) TMI 1073
Classification of imported goods - Fiber Optic Transmitters/Receivers/Transceivers - classifiable under CTH 85176290 or CTH 854230? - applicability of exemption under S.No.20 of N/N.57/2017 - Extended period of limitation - confiscation - penalties.
Whether the impugned goods imported by the appellant are classifiable under CTH 85176290 or under CTH 854230 as contended by the appellants? - HELD THAT:- The adjudicating authority has gone through the details furnished by the appellant as well as various other documents referred to supra to come to the conclusion that goods are clearly classifiable under CTH 85176290 and the goods are also in the nature of OTE, in view of their actual function. He has also categorically ruled out the possibility of its classification as simple electrical integrated circuit, keeping in view the HSN explanatory note, according to which, essentially, at least one of the components are required to be present, which incidentally was not found to have been used in the said impugned goods.
The adjudicating authority has taken into account the statements recorded from technical expert of the appellant as well as expert opinion and felt that these are in the nature of apparatus or devices meant for certain specific functions like conversion of, inter alia, electrical signal into optical signal and vice versa, using optical fiber cable and therefore, they are more in the nature of OTE. The fact that OTE has been categorically classified under CTH 85176290 in the notification itself also supports that if the impugned goods are in the nature of OTE then it would obviously fall under CTH 85176290.
Applicability of exemption under S.No.20 of N/N. 57/2017 - HELD THAT:- The impugned order is a well reasoned order, where after going through the detailed submissions and other evidence on record, the adjudicating authority has rightly held the impugned goods to be classifiable under CTH 85176290 and has also rightly held that these are in the nature of OTE and therefore, they shall not be entitled for the benefit under notification 57/2017. In view of the same, the classification as well as denial of benefit under S.No.20 of the notification 57/2017 upheld.
Invocation of extended period - HELD THAT:- There is nothing wrong for the appellant to have a bonafide belief to choose a heading which may be more beneficial to them even though, ultimately, it may not be found to be correct classification. However, this, per se, cannot become ground for invoking extended period of limitation. There has to be much more evidence on record to prove their deliberate plan or deliberate suppression in order to hoodwink the department into believing something else. Merely because they chose to claim classification under a heading, which they thought was more appropriate, it cannot be a ground for invoking extended period. Further, though the adjudicating authority has tried to bring in the concept of fraud for invoking extended period in the sense that they were deliberately misleading the department, it has neither been alleged in the SCN nor has been explained in what way the appellants were indulging in fraud. Therefore, invocation of extended period is not tenable and therefore, to that extent the impugned order is liable to be set aside.
Wrong calculation of duty demanded - HELD THAT:- There are no discussion on this issue and therefore, the matter needs to be remanded back to the adjudicating authority to examine this aspect and allow the benefit of this amount if it has already been paid, as submitted by the appellant.
Confiscation - HELD THAT:- When the issue is primarily that of classification, the confiscation cannot sustain and therefore, on that count itself, the impugned order to the extent of confiscation of impugned goods and imposition of fine is also not tenable.
Penalty u/s 114A - HELD THAT:- In view of the fact that the extended period cannot be invoked in the present case, as also there is no element of fraud, suppression or misstatement, etc., therefore, the penalty under this section is not sustainable.
Penalty u/s 114AA - HELD THAT:- In this case, whenever they have used a different classification than the classification which was indicated in the invoice, they knew that they are entering wrong classification in the bills of entry and therefore to that extent, the appellants knowingly and intentionally made the said entries. Their bonafide belief will not be of much help as here, it is an established fact that the classification mentioned in the bills of entry was different than the classification indicated by the supplier of the said goods. Therefore, there are no infirmity in the imposition of penalty under section 114AA.
Conclusion - The goods are classified under CTH 85176290, the exemption under Notification No.57/2017 is denied, the extended period for demand set aside, penalties under sections 112(a) and 114A are dismissed, the penalty under section 114AA is upheld, and the confiscation of goods is overturned.
Appeal partly allowed by way of remand for redetermination of quantum of demand.
........
|
9911796707
