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Showing 201 to 220 of 1429 Records
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2023 (12) TMI 1229
Disallowance u/s. 14 r.w.s. 8D - sufficiency of own funds - expenditure incurred on earning exempt income - HELD THAT:- The undisputed fact is that the exempt income of the assessee is Rs. 1615/- only, therefore, in the light of the decision of Caraf Builders and Construction [2018 (12) TMI 410 - DELHI HIGH COURT] disallowance should not exceed the exempt income.
Suo-moto disallowance As decided in case of GMR Enterprises Private Limited [2021 (11) TMI 565 - ITAT BANGALORE] following the decision of M/s. Marg Limited [2020 (10) TMI 102 - MADRAS HIGH COURT] disallowance u/s 14A of the 1.T.Act cannot exceed the exempt income earned during the relevant assessment year irrespective whether larger amount was disallowed by the assessee u/s. 14 A of the IT Act while filing the return of income - we direct the AO to delete the disallowance and restrict the same to Rs. 1615/- only. Appeal of the assessee is partly allowed.
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2023 (12) TMI 1228
Addition u/s 69A - taxability at higher rate of tax u/s 115BBE - on-money in respect of 100% of unit is brought on record - HELD THAT:- As incriminating material is not found relating to each and every unit. AO extrapolated the rate in respect of all 384 units. No independent investigation of facts was carried out by AO during assessment proceedings. There is no refinance in the assessment order that the search party while preparing appraisal report suggested collection of on money in respect of all the units. There is no allegation of AO that units were sold below the Jantri rate. No other independent evidence or material to substantiate the on-money in respect of 100% of unit is brought on record.
We find that in CIT Vs Standard Tea Processing Co. Ltd. [2013 (7) TMI 539 - GUJARAT HIGH COURT] held that the addition for undisclosed income on account of inflated purchase price can be made only for the period to which document found during the search is related and not for the entire block period
As in CIT Vs B. Nagendra Baliga [2014 (6) TMI 114 - KARNATAKA HIGH COURT] held that the Assessing Officer has not entitled to extrapolate undisclosed income detected in the course of search for a particular period to entire block period on estimate basis.
The Coordinate Bench of Tribunal in ACIT Vs M/s Amar Corporation Ltd. [2011 (3) TMI 1676 - ITAT AHMEDABAD] and in Sayan Textiles Park Ltd. [2015 (4) TMI 184 - ITAT AHMEDABAD] also held that question of extrapolation can only arise only in a situation when the documents give an indication that it was a regular occurrence in a systematic manner. Thus, in view of aforesaid factual and legal discussion, we uphold the order of ld. CIT(A) on our aforesaid observations. In the result, grounds of appeal raised by revenue as well as assessee are dismissed.
Taxing of addition u/s 115BBE - We find that no such provision was invoked by AO while making addition in the assessment order. We further find that combination this bench in case of Dagina Jewellers ([2023 (4) TMI 1277 - ITAT SURAT] held that when the source of income was explained and is apparently established, hence section 115BBE is not applicable for such business receipts. It was held that the provisions of Sections 68 and 69 are not applicable for trading transactions like deposit of cash out of cash sales and excess closing stock. While giving such finding, we have made reliance on the decision of Shilpa Dyeing & Printing Mills Ltd, [2015 (7) TMI 691 - GUJARAT HIGH COURT] Thus, in view of aforesaid position, the Assessing Officer is directed to tax the addition under normal provision/rate applicable on assessee. In the result, the ground No. 2 of appeal is allowed.
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2023 (12) TMI 1227
TP Adjustment - apportioning the expenses of assessee’s affiliates - HELD THAT:- We note that the Ld.TPO has not considered the agreements between the assessee and its AE and the nature of the transaction entered into, the services rendered by the assessee to its AE and the benchmarking method adopted by the assessee on a consistent basis. In the interest of justice, we remand this issue back to the Ld.AO/TPO to consider the claim of assessee by analysing all the details vis-à-vis the contracts and the functions performed by the assessee in respect of the services rendered.
Also noted that the assessee has received certain services from its AE which has been treated by the Ld.TPO at arms length by the assessee. However, the Ld.TPO has apportioned 1/5th of the expenses once again to the assessee and proposed a TP adjustment which in our view amounts to double addition. Such kind of computation of adjustment is not in accordance to the sound principles of transfer pricing rules. We direct the Ld.AO/TPO to consider the segments of the assessee under the receipt of business development services from its AE denovo in accordance with law. Needless to say that proper opportunity of being heard must be granted to assessee.
Grant of depreciation at the rate of 60% on NMS CG/TX Cards, switches, etc., on the ground that these items do not come within the definition of “computers” - HELD THAT:- Identical issue has been considered by Coordinate Bench of this Tribunal for A.Y. 2015-16 [2022 (8) TMI 1343 - ITAT BANGALORE] we direct the Ld.AO to allow the depreciation at 16% on the CG/TX Cards, switches etc.
TDS u/s 195 - grant of deduction of tax paid outside India in respect of which no foreign tax credit is eligible in India by holding that the same would be outside the scope of Section 40(a)(ii) - HELD THAT:- We direct the Ld.AO to verify the amount of foreign tax credit paid that is attributable to the income accruing / arising in India and to allow the same. Accordingly in the light of the decisions relied by Coordinate Bench of this Tribunal hereinabove in assessee’s own case for A.Ys. 2014-15 and 2015-16 Accordingly, Ground nos. 2-3 raised by revenue is remanded to the Ld.AO to consider the claim in accordance with law. Needless to say that proper opportunity of being heard must be granted to assessee.
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2023 (12) TMI 1226
Disallowance of loss in derivative transactions on the platform of National Exchange of India (NSE) - as submitted by the assessee before the CIT(A) that the loss in derivative segment arose as a result of transactions made through registered brokers on the platform of NSE which are duly verifiable from the records and the Assessing Officer has rejected the claim of loss cursorily without any opportunity to the assessee to corroborate its claim - HELD THAT:- The derivative loss claimed by the assessee is supported threadbare by scrip-wise tabular statement. The mis-match between derivative loss claimed qua the working of the CIT(A) is found to be explained and is on account of unilateral omission on part of the CIT(A) to take cognizance of the losses arising on account of open position at the beginning of the year which matured during the year in question and likewise open position which remained unmatured and carried forward in the subsequent financial year. The approach of the assessee to recognize profits/losses in open contracts appears to be prima facie in tune with the accounting practices. The effect of open position if not taken will give rise to totally absurd conclusions.
The profit/loss carried already reported for a part of the period in the preceding accounting year will get accounted for again during the year. Similarly, the profits/losses accounted for covering a part of the financial period during the year will again get accounted for in the subsequent year on termination of derivative contracts at the time of maturity. The action of the CIT(A) is apparently flawed and has lead to manifestly absurd results. The action of the CIT(A) cannot be justified in any manner and thus liable to be set aside. The derivative loss claimed by the assessee appears fully justified and requires to be accepted. The plea on behalf of revenue that such loss from open position has no effect on profit and loss is devoid of any merit. We thus set aside the order of the CIT(A) and direct the Assessing Officer to allow the claim towards derivative losses as business losses of the assessee as claimed.
Penalty u/s 271(1)(c) on the impugned derivative losses disallowed - The imposition of penalty under Section 271(1)(c) has thus lost the very premise to hold its sustainability. The penalty u/s 271(1)(c) in question thus cannot be sustained in law. Besides, the action of the assessee is fully supported by the documentary evidences, the confirmation from the registered SEBI brokers and the audited financial statement showing presence of open interest in derivative scrips both at the beginning of the year as well as at the end of the year. This being so, in the absence of any mistake or culpability in the action of the assessee, the imposition of penalty cannot be justified by any stretch of imaginations. We thus set aside the impugned first appellate order and delete the penalty.
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2023 (12) TMI 1225
Additions u/s 41(1) - Cessation of liability - Freezer Deposit (security deposit) considered as lapsed liability u/s 41(1) - Relevant in which such incomes taxable - assessee-company manufactured ice creams and frozen foods, sold it through distributors from whom it obtained deposits in lieu of installing deep freezers at their premises - HELD THAT:- There is, we observe, no dispute on the primary facts. That is, the refundable deposits, to secure the assessee’s interest, are accepted from it’s dealer by the assessee on provision of equipment to them, which is though subject to depreciation. Though refundable only on termination of the agreement, the amount refundable reduces at a definite rate for each year (or part thereof) of the agreement, corresponding with the rate of depreciation, i.e. @25% p.a. The amount refundable thus reduces at a defined rate each passing year. This ascertained reduction in the amount refundable and, thus, the ceasing of the assessee’s liability qua deposit is regarded as it’s income by Revenue. How, one wonders, being axiomatic, could that be disputed, signify as it does the right to receive, case law on which is legion
The amount having been already received, income arises to that extent; the assessee acquiring a dominion or unqualified right over the same. That the assessee may not have appropriated it as it’s income in it’s accounts is another matter, it being trite that that the passing or, as the case may be, non-passing of accounting entries is not determinative of the matter. Accounting entries do not create income, but only recognize it. Non-booking of income in accounts would be to no consequence Sutlej Cotton Mills Ltd. v. CIT [1978 (9) TMI 1 - SUPREME COURT]. Reliance on case law, de hors the facts and ratio, is of no moment, rendered in fact of no consequence in view of identity of the ratio or the principle of law relied upon.
The assessee’s challenge, in fact, is not based on merits per se, but on precedence, which we have again found to be in agreement with the Revenue’s case, i.e., cessation of liability signifying accrual of income. For the reasons unknown, this cessation has, as it appears, in assessee’s view, coincided with the termination of agreement, which represents the fundamental flaw in assessee’s case. It is not the amount refundable, which is only on the said termination, but that non-refundable, which is independent of termination, which results in accrual of income.
True, termination also signifies the amount refundable, but then that is only the amount not non-refundable, since determined at the expiry of each year. The exercise is to be carried out at each year-end, determining the deposit amounts no longer refundable. There being no dispute on quantum at any stage, we have no hesitation in according our approval to the impugned addition. We are conscious that the said sum or part thereof may have been booked as income in the subsequent years, i.e., on termination of the relevant agreements. It is, however, again trite that income is liable to be taxed for the right year, and it being taxed in another year is no ground for it being not brought to tax for the right year [CIT v. British Paints India Ltd. [1990 (12) TMI 2 - SUPREME COURT]; CIT vs. Chunilal V. Mehta & Sons P. Ltd. [1971 (8) TMI 4 - SUPREME COURT].
Disallowance u/s 14A - expenditure incurred on earning exempt income - HELD THAT:- Until and unless there is diversion of funds, of which there is no whisper, the term loan, as indeed working capital loan/advance, are for business purposes, would not stand to be allocated, which is only qua common expenses. The assessee has also claimed that it has sufficient funds of it’s own, i.e. vis-a-vis the investment yielding non-taxable income, being at an average of Rs. 305 lakhs and Rs. 19 lakhs respectively, and that therefore no part of the tax-free investment could be regarded as financed from interest bearing borrowings. The matter is completely factual. It is only in the absence of the assessee exhibiting it’s case with reference to facts and figures that the average formula prescribed u/r. 8D comes into play.
The comparison as made is misplaced. The term loan, for example, does not finance the fixed assets to the extent of 100%, so that the balance is by own capital, as indeed the repayment of the term loan, increasing the share self-financed to that extent. Similarly, for the working capital borrowing, which also entails margin money. Money has no bones and, therefore, it is only the fund flow statement (or Balance Sheets as at the end of the year/s) that would clarify the financing pattern of the taxable assets and, by implication, of the non-taxable or the tax-free investment. No such exercise has been done at any stage for us to issue any finding in the matter. No interference, therefore, apart from the exclusion of the term loan aforesaid is warranted in computing disallowance u/s. 14A.
Assessee’s appeal is partly allowed.
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2023 (12) TMI 1224
Eligibility of exemption u/s 11 - main grievance of the revenue is that the relevant year under consideration is AY 2018-19; and the Parliament had substituted the first and second proviso of section 2(15) of the Act by Finance Act, 2015 w.e.f 01.04.2016 which is applicable for the year under consideration - whether the assessee’s case falls under mischief of proviso to section 2(15)? - HELD THAT:- We note that the relevant year under consideration is AY 2018-19 and the Parliament had substituted the first and second proviso of section 2(15) of the Act by Finance Act, 2015 w.e.f 01.04.2016 which is applicable for the year under consideration.
And the Hon’ble Supreme Court had laid the law on the issue regarding claim of exemption by similar assessee’s in the case of Ahmedabad Urban Development Authority [2022 (10) TMI 948 - SUPREME COURT] [as well as in the case of Servants of People Society [2023 (2) TMI 535 - SUPREME COURT]] which was decided after considering the proviso to section 2(15) of the Act, which admittedly the Ld. CIT(A) did not consider, before he passed the impugned order.
n the light of the recent decision of the Hon’ble Supreme Court in the case of Ahmedabad Urban Development Authority (supra) as well as Servants of People Society (supra), we are of the opinion that Ld. CIT(A) erred in merely following the order of the Tribunal in assessee’s own case for AY. 2011-12 to AY. 2013-14 passed on 06.09.2022. And that AO has framed the assessment only discussing the ‘Principle of Mutuality’ and did not consider the application of proviso to section 2(15) of the Act. And since the ratio laid by the Hon’ble Supreme Court (supra) is applicable in the case of assessee for assessment [regarding claim of exemption] for the relevant year under consideration, in the interest of justice and fair play, we are inclined to set aside the impugned order and restore the assessment back to the file of AO for denovo assessment.
AO to decide the issues [claim of exemption] involved in assessment for AY. 2018-19 after giving proper opportunity to assessee and assessee is directed to file relevant/details/written submission and request for video conference as per rules. Appeal of the revenue stands allowed for statistical purpose.
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2023 (12) TMI 1223
Addition of share premium - AO has treated the amount received by the assessee from its holding company as unexplained cash credit u/s 68 on the ground that source of funds has not been explained - CIT(A) deleted addition admitting of additional evidence as provided in sub-rule (2) of Rule 46A of the Income Tax Rule 1962 - HELD THAT:- We find that assessee has explained before the ld. CIT(A) that it has submitted the relevant details as sought by the assessing officer during the course of assessment proceedings and no further any notice was received for calling any other details. Therefore, the assessee has further submitted the following details before the ld. CIT(A) as additional evidences under Rule 46A of the Income Tax Rule. Under the aforesaid circumstances the ld. CIT(A) has rightly admitted the same as additional evidences. We find that the assessing officer has not contrary disproved the genuineness of the various documents as discussed in the finding of the ld. CIT(A).
CIT(A) has elaborated in his finding the relevant supporting document furnished by the assessee which categorically established the identity, genuineness and creditworthiness of the transactions. CIT(A) has also referred the CBDT instruction 2/2015 dated 29.01.2015 that premium on share issue was on account of capital account transaction and does not give rise to income and, hence not liable to transfer pricing adjustment as held in the case of M/s Vodaphone Services Pvt. Ltd. Vs. Union of India & Others [2014 (10) TMI 278 - BOMBAY HIGH COURT]
During the course of appellate proceedings the ld. Counsel has also referred the decision of ITAT in the case of ITO 6(2)(4) Vs. Chiripal Poly Films Ltd. [2019 (4) TMI 1422 - ITAT MUMBAI] wherein held that the assessee complied with the requirements of RBI guidelines by filing FIRC with RBI and also filed Unique Identification number received from RBI. Further it had also filed FCGPR with RBI that the assessee was having sufficient authorised share capital to issue shares to investor then no addition could be made u/s 68 of the Act. In view of the above facts and finding we don’t find any error in the decision of ld. CIT(A). Therefore, these ground of appeal of the revenue stand dismissed.
Disallowance of 20% of advertisement and Sales promotion expenses and 25% of travelling expenses - CIT(A) deleted the addition - HELD THAT:- AO has disallowed the expenditure on estimated basis without considering the aforesaid details furnished by the assessee. The assessee explained that advertisement and sale promotion expenditure were related to the marketing of Carlisle Brand of products which had global presence and this expenditure incurred on year to year basis and such expenditure constitutes only of small proportion of the revenue of the assessee.
Travelling expenses the assessee submitted that it has reimbursed the claim of its employee for incurring expenses for business travel and such expenses comprised incidental expenses towards meals refreshment and travel expenses for which it is not feasible to furnish invoices and vouchers for all such expenses CIT(A) has elaborated in his finding that assessing officer has not brought on record any cogent basis for disallowing such expenditure without considering the percentage of expenditure compared to the revenue generated by the assessee company.
During the course of appellate proceedings before us the ld. Counsel has also referred decision of R.G. Buildwell Engineers Ltd. [2018 (10) TMI 252 - SC ORDER] wherein the decision of Hon’ble High Court was upheld for not making adhoc disallowance of expenses without rejecting the books of account. No infirmity in the decision of ld. CIT(A), therefore all these grounds of appeal of the revenue are dismissed.
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2023 (12) TMI 1222
Seeking release of various models of second hand Highly Specialised Equipment digital Multifunction Print, Copying & Scanning Machines, imported - HELD THAT:- This Court had already dealt with the similar issue M/S. SIMPLE MACHINES VERSUS THE COMMISSIONER OF CUSTOMS (CHENNAI II) IMPORT, THE ADDITIONAL COMMISSIONER OF CUSTOMS (CONCOR ICD) , THE DEPUTY COMMISSIONER OF CUSTOMS (CONCOR ICD) [2023 (12) TMI 198 - MADRAS HIGH COURT] held that Sl.No.(b) of Notification No.5/2015-2020, dated 07.05.2019, states that all electronics and IT goods notified under the Electronics and IT Goods (Requirement of Compulsory Registration) Order, 2012, as amended from time to time are “restricted”. Therefore, they are supposed to get authorization from the DGFT. When the said policy was in force, at that point of time also several imports have been made for importing second hand multi-function devices and similar issue was raised that these are all the multi function devices coming under Sl.No.(b). Therefore, unless otherwise authorization is obtained from the DGFT, the same cannot be imported.
There shall be a direction to the respondents to consider the plea of the petitioners to release the goods by way of provisional release on condition that, the petitioner shall pay/deposit the enhanced duty amount. On receipt of such enhanced duty amount paid by the petitioners, the goods in question shall be released within a period of three (3) weeks thereafter - For payment of such duty, quantification shall be made by the Customs forthwith within one (1) week from the date of receipt of a copy of this order. On receipt of such quantification, the payment shall be immediately made by the petitioners and on receipt of the payment in entirety, the goods shall be released as indicated above at the outer limit of three (3) weeks.
Petition disposed off.
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2023 (12) TMI 1221
Validity of SCN - Power of DRI to issue SCN - delayed adjudication of the show cause notice, which was issued almost about 8 years back - Jurisdiction of adjudicating authority to adjudicate the show cause notices - HELD THAT:- There is no dispute that the impugned show cause notice has been issued by the Director of Revenue Intelligence (DRI). Prima-facie, there are substance in the submission as urged on behalf of the petitioners - as the show cause notice has been issued by the DRI, the same would certainly attract the law laid down by Canon India Pvt. Ltd. [2021 (3) TMI 384 - SUPREME COURT].
Contention of the respondents that show cause notice should be proceeded - reliance placed in this regard on the orders passed by this Court in the case of LAXMI ORGANIC INDUSTRIES LTD VERSUS UNION OF INDIA, THROUGH ITS SECRETARY, DEPARTMENT OF REVENUE & ORS. [2023 (12) TMI 1157 - BOMBAY HIGH COURT] - HELD THAT:- The said decision is not applicable to the facts of the present petitioners. In Laxmi Organic Industries Ltd, show cause notice was of October 2019 which was followed by Covid-19 Pandemic from March 2020 and, therefore, the adjudication of the show cause notice was not of a nature falling on the principles discussed in the case of Coventry Estate Pvt. Ltd. [2023 (8) TMI 352 - BOMBAY HIGH COURT]. In the case of the present petitioners, the show cause notice is dated 29th February 2016 which is thus 8 years old. Therefore, on such facts, the order relied upon by the Respondents in the case of Laxmi Organic Industries Limited would not assist the respondents.
The impugned show cause notice dated 29th February 2016 shall remain stayed. Pending hearing and final disposal of the petition - The Respondents are at liberty to move this Court for vacating the interim stay if the Respondents are of the opinion that such orders ought not to be continued and/or after decision of the Supreme Court on the review proceedings filed in Canon India Private Limited and on the final adjudication on the challenge to the Finance Act, 2022.
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2023 (12) TMI 1220
Sanction of the Scheme of Amalgamation - NCLT fixed the Appointed Date to 01.10.2022, while allowing the Chennai Second Motion Petition and sanctioning the Scheme, when the NCLT – Mumbai, had sanctioned the Scheme filed by the Transferee Company with the Appointed Date of 01.10.2020.
It is argued that since NCLT, Mumbai, had by way of an Order dated 06.06.2022, already sanctioned the Scheme with the Appointed Date as 01.10.2020, the impugned order by changing the Appointed Date to 01.10.2022, has made the Scheme unworkable.
HELD THAT:- It is not in dispute that the NCLT, Mumbai had already sanctioned the Scheme with the Appointed Date of 01.10.2020, vide Order dated 06.06.2022. In the IA filed on 31.03.2023, the Appellants had sought for rectification of the Appointed Date to 01.10.2020, which was dismissed on the ground that NCLT did not have the power to review its own order. It is seen from the record that the Appointed Date as per the Scheme is 01.10.2020 ‘and the same is within a period of one year from the date of filing of the Application for Approval of the Scheme with NCLT i.e., 29.09.2021’.
It is relevant to rely on the Judgment of this Tribunal, in which matter, this Tribunal placed reliance on the Judgment of the Hon’ble Apex Court in Miheer H. Mafatlal v. Mafatlal Industries Limited., [1996 (9) TMI 488 - SUPREME COURT], in which case, the Court had laid down the broad contours of the jurisdiction of the Company Court in granting a sanction to the Scheme holding that jurisdiction of the Company Court while sanctioning the Scheme is supervisory only, i.e., to observe that the procedure set out in the Act is met and complied with and that the proposed scheme of compromise or arrangement is not violative of any provision of law, unconscionable or contrary to public policy. The Court is not to exercise the appellate jurisdiction and examine the commercial wisdom of the compromise or arrangement arrived at between the parties.
It is held by this Tribunal in the Accelyst Solutions Private Limited [2021 (3) TMI 1009 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI], that the ‘settled legal position, while exercising its power in sanctioning a Scheme of Amalgamation, the Courts / Tribunal has to examine as to whether, the Provision of Statute has been complied with’. The Courts / Tribunal would have no further jurisdiction to sit in Appeal over the ‘Commercial Wisdom of the Shareholders of the Company’.
In the instant case, apart from the fact that NCLT – Mumbai, had already fixed the Appointed Date of the Scheme as 01.10.2020, the date of filing of the Application for Approval of the Scheme with NCLT – Chennai is 29.09.2021 and therefore is within a period of one year, and hence, attracts Clause 6(c) of the MCA General Circular No. 09/2019 dated 21.08.2019 - Additionally, NCLT has the discretion to fix the Appointed Date which could be beneficial to the interests of the Company, which in the instant case ought to have been fixed at 01.10.2020 as having two different Appointed Dates, would render the Scheme unworkable. The NCLT has powers under Rule 11 of the NCLT Rules, 2016, to fix the Appointed Date, which would be beneficial to the Scheme of Amalgamation.
Appeal allowed.
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2023 (12) TMI 1219
CIRP - Validity of order of liquidation - Rejection of resolution plan - eligibility criteria - Resolution Plan not considered by the Committee of Creditors (CoC) - bank guarantee furnished with delay of 3 days as the last date of submission of bank guarantee was 1st March 2021 - submission of bank guarantee of ICICI bank as against the bank guarantee which should have been issued from nationalised bank located in India - ineligibility u/s 29 A of IBC.
HELD THAT:- This Appellate Tribunal is of considered opinion that terms and conditions as stipulated in RFRP are required to be treated valid and legal binding terms and conditions which has been stipulated by the CoC after fair deal of deliberations. The framing of such terms and conditions, evaluation of the Resolution Plan against such matrix is considered to be entirely within the commercial wisdom domain of the CoC.
After analysing the facts in the appeal in details in provisions paragraphs, it is held that the Appellant failed to comply with the conditions as stipulated in RFRP - there are no reason to interfere with the Impugned Order dated 02.02.2023 passed by the Adjudicating Authority since, there are no error in the Impugned Order.
Appeal dismissed.
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2023 (12) TMI 1218
Approval of Resolution Plan - Appellant are personal guarantors of the Corporate Debtor - HELD THAT:- The Resolution Plan does not absolve the personal guarantors from their guarantee. The law well settled by the Hon’ble Supreme Court in the matter of LALIT KUMAR JAIN VERSUS UNION OF INDIA AND ORS. [2021 (5) TMI 743 - SUPREME COURT], that by approval of resolution plan the guarantees are not ipso facto discharged. The resolution applicant has taken liability of only one crore, the other liabilities of the personal guarantors are not discharged.
There are no ground to interfere with the approval resolution plan within meaning of Section 61 - the order of the Adjudicating Authority approving the Resolution Plan need not be interfered - there is no merit in the Appeal - appeal dismissed.
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2023 (12) TMI 1217
Maintainability of section 7 application - time limitation - dispute raised regarding the liability of the Corporate Debtor towards the Financial Creditors and the guarantee by the Respondent - HELD THAT:- This is one such case in which direction has to be issued to the Tribunal to admit the application filed under Section 7 of the Code in view of the findings recorded by the Tribunal in its order dated 25.03.2022 wherein it has been held that the debt and default both are present in this case but the Tribunal did not admit the application only on the issue that the Application was found to be barred by limitation. The question of limitation was taken to the higher court and ultimately it has been proved that the application was within the limitation. In such circumstances, the Tribunal should not have gone in for further investigating on the issue as to whether there is debt and default in the present case for the purpose of admission of the application.
The Tribunal is directed to admit the application filed by the Appellant on the next date of hearing and pass further necessary orders in accordance with law - Appeal allowed.
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2023 (12) TMI 1216
Refund of the amount paid during investigation but not appropriated by the department after conclusion of such investigation - Refund barred by limitation under the provisions of Section 11B of the Central Excise Act, 1944 or not - HELD THAT:- The refund claim filed by the Appellant cannot be rejected on the ground of limitation as what was paid by the appellant was not tax as envisaged under the Finance Act, 1994. Thus, the amount paid by the Appellant would not take the character of tax but is simply an amount paid under a mistake of law. The provisions of Section 11B ibid would, therefore, not be applicable to an application seeking refund thereof. Moreover, since the retention of the amount in issue by the department is without authority of law, the question of applying the limitation prescribed under Section 11B ibid would not arise.
For a service to be taxable, it is necessary that the service has to be rendered by one person to another and without a perceived service money contribution cannot be held to be a consideration which is liable to tax. The authority concerned is duty bound to refund such amount as retention of such amount would be in violation of Article 265 of the Constitution of India which mandates that no tax shall be levied or collected except by authority of law. Since Service Tax received by the concerned authority is not backed by any authority of law, in view of the provisions of Article 265 of the Constitution of India, the authority concerned has no right to retain the same.
The judgment of MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA [1996 (12) TMI 50 - SUPREME COURT] has been considered and interpreted by several judgments including the Karnataka High Court in COMMISSIONER OF CENTRAL EXCISE (APPEALS), BANGALORE VERSUS KVR CONSTRUCTION [2012 (7) TMI 22 - KARNATAKA HIGH COURT], by this Tribunal in the case of M/S. ASL BUILDERS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL GST & CX, JAMSHEDPUR [2020 (1) TMI 431 - CESTAT KOLKATA]. The said judgments have concluded that statutory limitation periods are not applicable to amounts paid under mistake of law.
Thus, it is concluded that the statutory limitation period prescribed under Section 11B is not applicable to the refund claimed by the Appellant since the amount paid by the Appellant is not a tax.
The present appeal is allowed.
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2023 (12) TMI 1215
Levy of service tax - Business Auxiliary Service - services of 'Sizing of coal' to customers - HELD THAT:- The issue is no longer res integra, as the Tribunal Kolkata Bench has decided the issue in favour of the Appellant in the case of COMMR. OF CENTRAL EXCISE & S. TAX, BOLPUR VERSUS M/S INTEGRATED COAL MINING LTD. [2021 (1) TMI 179 - CESTAT KOLKATA] where it was held that By discharging the tax liability on the job work charges as well as by discharge of VAT liability on ‘brought out’ items used for fabrication at site, the scope for considering the activity as manufacture is eclipsed entirely.
The Appellant is not liable to service tax under the category of 'Business Auxiliary Service' and hence the demands confirmed in the impugned order is not sustainable - the demands of duty along with interest and penalty confirmed in the impugned order is set aside - appeal allowed.
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2023 (12) TMI 1214
Non/short-payment of service tax - contention of the appellant was that it had neither issued the invoice nor had received the amount mentioned in the notice - principles of natural justice - HELD THAT:- In view of the factual position as to whether the service tax paid by the consortium partner of the appellant was linked with the invoice issued by the consortium partner, it would be in the fitness of things that the adjudicating authority examines this issue and it would be not appropriate to examine this issue in this appeal.
Whether the service tax to the extent of Rs. 6,42,177/- has been paid on the excess income of Rs. 51,95,614/- by the service tax recipient, namely, M/s Bihar Urban Infrastructure Development Corporation Ltd.? - HELD THAT:- In view of the nature of controversy that has arisen, it would be appropriate if this issue is also again examined by the adjudicating authority after providing an opportunity to the appellant to submit relevant documents to establish the link between the invoice and the service tax paid by M/s Bihar Urban Infrastructure Development Corporation Ltd.
Whether service tax was required to be paid on the amount of Rs. 31,84,835/-, which amount was shown in the books of account as “work-in-progress” by the appellant? - HELD THAT:- The Commissioner (Appeals), after having noted all the submissions, recorded a finding that it was for the appellant to have shown by positive evidence that it had not received the amount as advance and since it could not substantiate this fact, the demand had to be upheld - The Commissioner (Appeals) completely erred in recording this finding. It was for the Department to have established that the appellant had received the payment in that particular year, more particularly when the contention of the appellant was that it had not received any payment and the amount was only shown as “work-in-progress” in the balance sheet. This demand, which has been confirmed by the Commissioner (Appeals), therefore, deserves to be set aside.
The present appeal has to be allowed in part.
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2023 (12) TMI 1213
Levy of penalty - non discharge of tax liability - availment of irregular CENVAT Credit - suppression of facts or not - amount already reversed by the appellant was proposed to be appropriated against the said demand - HELD THAT:- The present case is merely a case of non discharge of tax liability, same cannot be equivalent to an intentional and positive act to evade payment of duty. The onus to prove such an act is upon the department. There are no iota evidence proving any positive intentional act of the appellant to evade the duty. The appellant was regularly/claiming credit of duty paid on coal as their input i.e. coal was exempted till 1.3.2011. They continued availing said credit for subsequent few more months due to inadvertence or ignorance on the part of the appellant to take into consideration the amendment which came into effect on 1.3.2011 making coal as an excisable goods. Thus it is far a different situation than an intention to evade payment of duty. The tax returns were otherwise regularly undisputedly filed. There is also no demand of excise duty on the coal from the appellant which otherwise stands paid. This apparent fact makes it clear that there is no suppression of facts, nor any element of fraud, mis-statement on the part of the appellant.
It is also observed that the amount which is ordered to have been appropriated was reversed much prior to issuance of SCN. The SCN should not have been issued in view of proviso to section 73 of the Finance Act, 1994.
The order imposing equal penalty of Rs.46,21,582/-, is not sustainable and the order under challenge is set aside to that extent - Appeal allowed.
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2023 (12) TMI 1212
Maintainability of appeal - appeal dismissed as it was not filed within the time stipulated in section 85 (3A) of the Finance Act, 1994 - HELD THAT:- In the present case, the appeal was presented before the Commissioner (Appeals) even beyond the extended period of one month after the expiry of the normal period of limitation of two months.
In SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [2007 (12) TMI 11 - SUPREME COURT], the Supreme Court observed The Supreme Court held that the period upto which the prayer for condonation can be accepted is limited by the proviso to sub-section (1) of Section 35 of the Act and the position is crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the period of thirty days after the expiry period of sixty days.
In view of the aforesaid decision of the Supreme Court in Singh Enterprises, the Commissioner (Appeals) did not commit any error in dismissing the appeal - Appeal dismissed.
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2023 (12) TMI 1211
Extended period of limitation - suppression of facts or not - mining service or not - service of blasting the rocks/boulders from the quarries, loading them into trucks and transporting them to the site of the crusher - HELD THAT:- As per section 73 of the Act, demand of service tax not paid or short paid can be raised only within the normal period of limitation. However, extended period of limitation can be invoked, if the non-payment or short payment of service tax is on account of fraud or collusion or willful statement or suppression of facts or violation of the provisions of the Act or Rules with an intent to evade payment of service tax. Evidently, fraud, collusion and willful statement have an in-built element of mens-rea. Without the intent being established, these cannot be alleged. As far as the suppression of facts is concerned, it has been held in a series of judicial pronouncements that since the words suppression is used along with words, such as, fraud, collusion and willful statement mere omission cannot be called suppression and intent has to be established. It has now well settled position of law.
The two SCNs merely state that the appellant had not disclosed the value of the taxable services which it had rendered correctly in its ST-3 returns and, therefore, presume that the appellant had an intention to evade payment of service tax. There is not an iota of evidence in either of the SCN of this intent - Both the SCNs further state that had the audit not conducted scrutiny of the records, the short paying the service tax would not have come to notice. It is a matter of fact that all the details were available in the records of the appellant. The appellant was required to furnish returns under section 70 with the Superintendent of Central Excise which it did. It is for the Superintendent to scrutinize the returns and ascertain if the service tax had been paid correctly or not. If the assessee either does not make the returns under section 70 or having made a return, fails to assess the tax in accordance with the provisions of Chapter or Rules made thereunder, the Superintendent of Central Excise can make the best judgment assessment under section 72.
The fact that the alleged short payment came to light only during audit does not prove the intent to evade payment of service tax by the appellant, but it only proves that the Range Superintendent had not done his job properly. For these reasons, it is found that the demand for the extended period of limitation cannot be sustained.
It is evident that neither SCN has given any opportunity to the appellant to defend its case for the period after 01.07.2012. Both SCNs only proposed the demand under the head “Mining Services” for the period pre 01.07.2012 as well as period post 01.07.2012. As far as the demands for the period pre 01.07.2012 are concerned, it is already held that the extended period of limitation was wrongly invoked in both the SCNs and, therefore, demand cannot be sustained. The legal provisions pertaining to the post 01.07.2012 have not been invoked and the appellant was not put to notice although the Commissioner has, in the impugned order, confirmed the demand on the ground that the services rendered by the appellant were not covered by the negative list.
It is a well settled legal principle that the adjudicating authority cannot travel beyond the SCN. Therefore, he could not have confirmed the demand under the provision after 01.07.2012. Under these circumstances, it is found that the demand in the impugned order is not sustainable and needs to be set aside. Consequently, the demand of interest and the penalties imposed also need to be set aside.
Appeal allowed.
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2023 (12) TMI 1210
Non-payment of service tax - gross amount of commission received by the appellant under ‘business auxiliary service’ - extended period of limitation - HELD THAT:- A perusal of the order passed by the Commissioner (Appeals) indicates that what was examined by the Commissioner (Appeals) was whether the services rendered by the appellant would fall under ‘business auxiliary service’, as defined under section 65 (19 (vi) of Finance Act, 1994, or under ‘business support service’ as defined under section 65 (104c) of the Finance Act, 1994. After a careful analysis of services provided, the Commissioner (Appeals) after noticing that business support service was subjected to levy of service tax from 01.05.2006 and since there was no amendment in the definition of ‘business auxiliary services’, recorded a categorical finding that the activity of the appellant would not fall under ‘business auxiliary service’. The demand made for the period April, 2005 to March, 2006 was, therefore, set aside.
On perusal of the order dated 23.04.2012 passed by the Commissioner (Appeals) shows that a categorical finding has been recorded that the services would appropriately fall under the category of business support service, which service was made taxable with effect from 01.05.2006. The period involved in the present appeal is prior to 01.05.2006.
The order dated 16.01.2018 passed by the Commissioner (Appeals) cannot, therefore, be sustained and is set aside - appeal allowed.
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