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2025 (2) TMI 97
Levy of penalty u/s 129(3) of the GST Act - HELD THAT:- The plea sought to be raised by the petitioner regarding the transfer of the goods, a Pokland Machine, to its parking yard at Varanasi, needs investigation inasmuch as the conduct as projected by counsel for the respondents and which is not denied, despite the fact that petitioner had full 15 days to claim the ownership of the goods, no steps were taken and thereafter also the matter has been dealt with casually, the assertions made in the petition cannot be taken at face value.
There are no reason to entertain this writ petition under Article 226 of the Constitution. The same is, therefore, dismissed leaving it open for the petitioner to avail the alternative remedy of appeal with the aid of Section 14 of the Limitation Act as indicated by counsel for the respondents.
Petition dismissed.
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2025 (2) TMI 96
Entitlement to seamless transfer of CENVAT credit for excise duty paid on capital goods in transit as of the appointed date under the Central Goods and Services Tax Act, 2017 (CGST Act) - "input" under Rule 2(g) of the CENVAT Credit Rules, 2017 includes capital goods or not - transitional credit under Section 140(5) of the CGST Act for capital goods in transit - distinction between inputs and capital goods under the CGST Act - HELD THAT:- Prior to 01.07.2017, a manufacturer was entitled to claim CENVAT credit of duty paid by him on inputs as well as on the capital goods utilized in the manufacturing process, subject, however, to the conditions which were placed in the CENVAT Credit Rules, 2004. There is no difficulty in understanding that the facility providing the manufacturers to claim credit of the duties paid on inputs as well as capital goods continued even after 01.07.2017 but with certain modifications. CGST Act contained transitional provision according to which unutilized CENVAT credit was eligible to be brought over to the GST regime. The statute made provisions to enable the assessee to avail the credit of duty paid on inputs which were in transit as on 01.07.2017. But under the CENVAT Credit Rules, 2017 which were framed by the Central Government by virtue of powers conferred upon it under Section 37 of the Central Excise Act, 1944, no facility has been provided to enable the assessee to claim credit of the excise duty paid on such capital goods.
The word “capital goods” found its definition also in Rule 2(A) of the CENVAT Credit Rules, 2004. Sub-rule (1) of Rule ‘3’ provided that the manufacturer or purchaser of final products are a provider of output service shall be allowed to claim credit of the CENVAT credit of the various duties specified in Clauses (i) to (xi) contained therein paid on any input or capital goods received in the factory of manufacturer of final product or by the provider of output services or on after the tenth day of September, 2004.
A reading of subsection (3) of Section 16 makes it crystal clear that it provides for claim of depreciation of tax component of the cost of capital goods or plant and machinery under the Income Tax Act, 1961 and if such claim has been made by a registered person, the input tax credit on such tax component would not be allowed. Sub-section (1) and (2) of Section 17 pertain to restriction of the tax credit when the goods or services are utilized partially for business purpose and partially for other purposes or partially for effecting taxable supplies and partially for non-taxable supplies, these provisions do not make any distinction between capital goods and inputs.
The distinction in the matter of giving benefit of CENVAT credit on capital goods during the transitional period may be found in Section 140 of the CGST Act. While this provision enables an assessee to carry forward and take credit of unutilized CENVAT credit paid on inputs as well as on capital goods, in the manner as may be prescribed and subject to the conditions contained in the provisions, sub-section (5) of Section 140 makes a distinction between the capital goods and inputs.
An identical question had fallen for consideration before the Hon’ble Division Bench of the Gujarat High Court in the case of RSPL Limited [2018 (10) TMI 1521 - GUJARAT HIGH COURT] where it was held that 'Article 14 as is well-known, prohibits class legislation but not reasonable classification. To bring in the element of discrimination in terms of Article 14 of the Constitution, the onus would be on the petitioner to establish that the persons or things treated differently form a homogeneous class. In the present case, the source of the petitioner's grievance or dissatisfaction is that the inputs and capital goods are treated differently. When we find that the inputs and capital goods form different and distinct classes, the question of subclassification or artificial demarcation would not arise.'
This Court finds that the CENVAT Credit Rules, 2017 has superseded CENVAT Credit Rules, 2004 and conjoint reading of the provisions of GST Act and CENVAT Rules, 2017 leaves no room for taking any different view from that of the Hon’ble Gujarat High Court in the case of RSPL Limited.
Conclusion - The transitional credit under the CGST Act is not available for capital goods in transit, as established in RSPL Limited. The claim for transitional credit denied. The distinction between inputs and capital goods under the CGST Act was lawful and justified.
There are no error in the impugned orders - application dismissed.
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2025 (2) TMI 95
Exemption from GST - Services provided to the Panchayat Service Board, amounts to services provided to the Panchayat, and covered under entries 3 and 3A, of the Notification or not - services provided to the Gujarat Public Service Commission amounts to services provided to the State Government, covered under entries 3 and 3A of the Notification or not - services provided to the Gujarat Technological University amounts to services provided to the Government Entity or Government Authority, eligible for tax exemption under entry 3 and 3A of the notification or not.
Whether the services provided by the appellant to the Gujarat Panchayat Service Selection Board (GPSSB) qualify as services provided to a Panchayat and are exempt from Goods and Services Tax (GST) under entries 3 and 3A of Notification No. 12/2017-CT (R)? - HELD THAT:- As is evident, in terms of the serial no. 3 of notification No. 12/2017-CT (R), as amended, pure services [excluding works contract services or other composite services involving supply of any goods], provided to a Central Government, State Government, Union territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G or to a Municipality under article 243W of the Constitution of India, is exempt. Likewise, in terms of serial no. 3A of notification ibid, composite supply of goods and services, in which the value of supply of goods constitutes not more than 25% of the value of the said composite supply provided to the Central Government, State Government or Union territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G or to a Municipality under article 243 W of the Constitution are exempt.
While dealing with an exemption notification, an exemption notification is to be strictly interpreted in terms of the judgement of the Constitution Bench of the Hon'ble SC in the case of Dilip Kumar and Company [2018 (7) TMI 1826 - SUPREME COURT (LB)] wherein it was held that 'Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification.' It was also held that 'When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue.'
The services provided to the Panchayat Service Board amounts to services provided to the Panchayat, and is covered under entries 3 and 3A, of the notification and is hence, exempted from GST.
GPSSB is neither a Central/State Government nor a Union territory. Further as far as Local authority is concerned, the term having been defined under the CGST Act, there appears to be no need to borrow it from elsewhere. On going through each of the clauses from 'a' to 'g' of the definition of local authority, it is found that the GPSSB does not fall within the ambit of either of the sub-clauses. Thus, GPSSB is neither a Central Government, State Government, Union Territory or a local authority. The primary condition of the composite services having been provided to a Central Government, State Government, Union territory or local authority, not having been satisfied, the appellant is not eligible for the benefit of the notification.
Whether the services provided to the Gujarat Public Service Commission (GPSC) are considered services provided to the State Government and are therefore exempt from GST under the same notification entries? - HELD THAT:- The contention of the appellant that GPSC, a constitutional body, managed, financed by the State Government, which has 100% control, is liable to be classified as the State Government, not agreed upon. The appellant is not eligible for the benefit of the exemption notification, ibid, in respect of the services provided to GPSC.
Conclusion - i) GPSSB is neither a Central Government, State Government, Union Territory or a local authority. The primary condition of the composite services having been provided to a Central Government, State Government, Union territory or local authority, not having been satisfied, the appellant is not eligible for the benefit of the notification. ii) The contention of the appellant that GPSC, a constitutional body, managed, financed by the State Government, which has 100% control, is liable to be classified as the State Government, not agreed upon. The appellant is not eligible for the benefit of the exemption notification, ibid, in respect of the services provided to GPSC.
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2025 (2) TMI 94
Classification of goods - applicable rate of tax - supply of instant mix flours for gota, khaman, dalwada, dahiwada, idli, dhokla, dhosa, pizza, methi gota and handvo - supply of instant mix flour for gota/methi gota along with chutney powder/kadhi chutney powder - supply of khaman along with masala pack.
Mix flours of Khaman, Gota, Dalwada, Dahiwada and Methi Gota - instant mix of Idli, Dhokla, Dhosa and Handvo - HELD THAT:- What Rule 3(b), ibid, encapsulates is that mixtures consisting of different material which cannot be classified by reference to 3(a) shall be classified as if they consisted of the material or component which gives them their essential character. The argument put forth is that as the essential character of the instant flour mixes is given by the Flour, so in terms of Rule 3(b) of the GRI, it would fall under chapter heading 1101, 1102 or 1106. The argument is not legally tenable owing to the fact that in the paragraphs above, we have already held that on account of the composition, etc. the product gets excluded from falling under chapter headings 1101, 1102 and 1106. Therefore, the question of relying on Rule 3(b) of the GRI to classify the goods based on the essential character, does not arise. It is owing to this finding, that the averment of the appellant that entry most beneficial to the appellant needs to be preferred, also stands rejected.
None of the products of the appellant merit classification under Chapter 11 of the Customs Tariff Act, 1975 and specifically under Chapter Headings 1101, 1102 or 1106 of the Customs Tariff Act, 1975.
Instant Gota mix supplied with chutney powder - Methi gota instant mix supplied with kadhi chutney powder - instant Khaman mix supplied with masala pack - HELD THAT:- The appellant has stated that they are naturally bundled & hence supplied in conjunction with each other & the GST rate applicable to principal supply ie instant mix flour would be applicable. The findings of GAAR recorded in para 8.3 of the impugned ruling dated 19.7.2021 agreed upon and it is held that it is a mixed supply.
Mix Flour / Instant Mix Flour - appellant submitted that Mix Flour / Instant Mix Flour is not a ready-to-eat food - HELD THAT:- Chapter Heading 21.06 and specifically Tariff Item 2106 90 is not confined to processed or semi processed food, cooked or semi cooked food, preserved food and ready to eat food. In fact, any product which is a food preparation and which is not elsewhere specified or included in the CTA, 1975, gets covered under Chapter Heading 2106 of the CTA, 1975. Therefore, merely because the end consumer of the Instant Mix Flour is required to follow certain food preparation processes before such product(s) can be consumed, is no ground to take these products out of Chapter Heading 2106 of the CTA, 1975.
Conclusion - i) The products are classifiable under HSN 2106 90, attracting an 18% GST rate. ii) The products do not qualify for classification under HSN 1101, 1102, or 1106. iii) Supplies with additional items are considered mixed supplies.
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2025 (2) TMI 93
Prosecution Proceedings initiated u/s 276C - Bogus LTCG - guilty mind i.e., mens rea - willful evasion of tax on claims made under the head LTCG/Short Term Capital Loss - allegation of crime invoking Section 200 of the CrPC for offence punishable under Section 276C - HC [2024 (1) TMI 1007 - KARNATAKA HIGH COURT] decided mens rea is an element that is to be present in a proceeding under Section 271 of the Act. The mere fact of not accurate tax, not exact tax or erroneous tax would not lead to the proceedings under Section 276 of the Act. Thus proceedings instituted against the petitioners cannot but be termed to be an error in law. Order taking Cognisance is not in compliance with applicable law and therefore is set aside.
HELD THAT:- Since, the other connected petitions [2024 (12) TMI 1180 - SC ORDER] have already been dismissed by this Court, the present petitions also stand dismissed on the similar terms, leaving the question of law open, if any, to be decided in some other appropriate matter.
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2025 (2) TMI 92
Penalty u/s 271 (1) (c) - Appellant had not only transferred the stock-in-trade at the market value but also withdrawn the profits arising therefrom, about which there was no full and frank disclosure - whether the appellant had concealed income or furnished inaccurate particulars? - HELD THAT:- From the factual findings, we are satisfied that the very constitution of the firm and the transaction of the Appellant inflating the value of the plot of land and contributing it to the stock in trade, followed by withdrawals within a short period, amounted to a device or subterfuge or conduit to facilitate tax evasion. For these reasons, the Assessing Officer was justified in imposing the minimum prescribed penalty, and there is no warrant to interfere with the same.
The circumstance that the assessee had filed the capital account copy along with the returns does not amount to true or full disclosure in the present case. The entry in the capital account copy also, in the peculiar facts of the present case, does not amount to disclosure of the primary facts.
Even if the disclosure issue is kept aside, the penalty was still liable to be imposed upon the Appellant for having adopted such a device or subterfuge to evade taxes. The primary facts about which there is no dispute, are sufficient to sustain the findings regarding the Appellant adopting a device or subterfuge to evade the taxes. These are also good enough grounds to sustain the minimum penalty imposed upon the Appellant.
If Explanation 1 to Section 147 was not strictly speaking applicable, still, Explanation 1 to Section 271 could not have been ignored. This was a case where the Explanation offered by the Appellant was found to be patently false. In any event, the Appellant failed to substantiate or demonstrate that such Explanation was bona fide. As noted earlier, the addition to the Appellant’s income has already attained finality. Based on these factors, the minimum penalty imposed upon the Appellant warrants no interference. Decided against assessee.
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2025 (2) TMI 91
Failure to provide a draft assessment order to the petitioner under section 144B - violation of the Faceless Assessment Scheme, 2019 - HELD THAT:- As asssessment was made invoking provision in section 143(3) read with section 144B on the assessee having complied with both notices, firstly issued under section 143 (2) and then u/s 142 (1). We accept contention of revenue that the sequence does not matter inasmuch as power to issue notice provided for in section 143 (2) and section 142 (1) is for purpose of making the assessment.
There is no dispute that petitioner’s return was picked up for scrutiny assessment. The assessment had to be done. Commencement of the exercise of assessment was by issuance of section 143 (2) and then further enquiry felt necessary for purpose of the assessment and therefore second notice under section 142 (1). Petitioner having complied with both notices, the allegation of not having had full opportunity, particularly in view of statements made in the counter, are without basis.
As the return filed was picked up for scrutiny assessment. Procedure provided for in section 144B on faceless assessment was adopted. It not being a case of best judgment assessment there was no draft assessment order made and thus no question of furnishing it to the National e-Assessment Centre arose. No merit in the contentions raised on behalf of petitioner.
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2025 (2) TMI 90
Reassessment proceedings against company dissolved - HELD THAT:- On perusal of the documents brought before the Court and considering the submissions made on behalf of the parties, this Court is of the view that the initiation of reassessment proceedings under Sections 148A (b) and 148A (d) of the Income Tax Act, 1961 and the subsequent issuance of the notice under Section 148, were in violation of the statutory preconditions under the Act. The respondents failed to conduct a preliminary inquiry under Section 148A(a) and acted solely on external reports without demonstrating independent application of mind, thereby rendering the proceedings arbitrary and illegal.
Section 14 of the IBC imposes a moratorium that prohibits proceedings against a company undergoing Corporate Insolvency Resolution Process (CIRP). The resolution plan approved by the National Company Law Tribunal (NCLT) has overriding authority, as per Section 238 of the IBC and expressly precludes reassessment or revision proceedings for the period prior to the effective date stipulated in the plan. The respondents' actions are in direct contravention of these provisions.
Court holds that the reassessment proceedings initiated against the petitioner are without jurisdiction, arbitrary, and unsustainable in law. Consequently, the writ petition is allowed, and the impugned notices and orders issued under Sections 148A (b), 148A (d), and 148 of the Income Tax Act, along with all consequential proceedings, are quashed.
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2025 (2) TMI 89
Reopening of assessment - issuance of no valid service of notice within the statutory period of limitation - liability to file a return of income despite claiming exemption under India-Singapore DTAA
HELD THAT:- Challenge to the impugned notice issued u/s 148 of the IT Act cannot be countenanced merely because there is an typographical error in the address mentioned therein, notice has not been served to the petitioner's address i.e., M/s.Verizon Services Singapore Pte Ltd., instead of which, the same has been served to the incorrect address i.e., “Visteon Tax Office, One Village Centre Drive, Van Baren Township, Michigan, USA”.
Without filing of proper Return of Income, the petitioner has claimed exemption under India-Singapore Double Taxation Avoidance Agreement. Hence, the respondent/Income Tax Department has issued Notice under Section 148 of the IT Act to the petitioner, which was culminated in the impugned Speaking Order as per the decision of GKN Driveshafts (India) Ltd [2002 (11) TMI 7 - SUPREME COURT]
Income Tax Department has passed the impugned Speaking Order dated 18.03.2022 without considering the CBDT Circular No.3/2016 dated 26.02.2016 and taking note of the fact that the petitioner had subsequently filed its Return of Income manually on 02.03.2022, the petitioner can be given a reasonable opportunity to explain its case afresh in the light of CBDT Circular No.3/2016 dated 26.02.2016. Therefore, the impugned Speaking Order dated 18.03.2022 can be set aside by way of remand.
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2025 (2) TMI 88
Penalty u/s 271(1)(c) - defective notice issued u/s 274 - non specification of clear charge - as argued no specific charge has been brought in the impugned penalty order by AO against the Appellant for initiation and subsequent levy of penalty - HELD THAT:- As in notice it shows that as for the purpose of section 271(1)(c), it is not specifically mentioned as to under which limb of the default for which penalty is leviable, the assessee was called on to reply and face penalty proceedings.
In this context, the law is now quite settled that the penalty proceedings should be based on a notice wherein it should be specifically mentioned as to penalty proceedings in regard to concealment of income or for furnishing inaccurate particulars of income.
We find that even there is no striking of the irrelevant part while issuing notice u/s 274 of the Act. Thus, the penalty notices are not sustainable under law. See MANJUNATHA COTTON AND GINNING FACTORY [2013 (7) TMI 620 - KARNATAKA HIGH COURT], MR. MOHD. FARHAN [2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] and M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [2019 (8) TMI 409 - DELHI HIGH COURT] - Appeal of the assessee is allowed.
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2025 (2) TMI 87
Penalties levied u/s 271D - accepting cash loans in violation of section 269SS - Receipt of on-money - Middle class and uneducated assessee - The persons who advanced money to her were agriculturist and that was why they had given cash loans, in anonymity, in the fear of CBI actions on them also. - HELD THAT:- As there is a reasonable cause for not only accepting cash loans of Rs. 17,00,000/- immediately after the CBI actions on the assessee in the fear of the arrest but also the repayment of part of the loan on insistence of the person who advanced the said loan to the assessee in the dire need as mentioned above.
We are of the firm opinion that there are reasonable causes for not levying penalties u/s 271D and 271E r.w.s. 274 of the Act. Accordingly, we set aside the impugned orders and quash the penalties levied by the JCIT, Range Panipat. Decided in favour of assessee.
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2025 (2) TMI 86
Unverifiable purchases - Disallowance on account of direct expenses - disallowance confirmed by the CIT(A) under the head vehicle expenses, festival expense, travelling expenditure telephone expenses and conveyance expenses - HELD THAT:- As submitted that there are expenses incurred with the running of the business and no personal element can be attributed to these expenses and since these expenses of conveyance and small repairs have been self vouched, we find that 1/10th of the telephone expenses and conveyance expenses may be treated as personal expenses and so far regarding the festival expenses are concerned are incurred for performing Pooja at office premises etc may be taken and allowed as business expenditure and no disallowance required.
There is no any evidence on record of travelling expenses, so deserves to be deleted. Regarding the TDS issued, the learned AO is directed to reconsider the TDS mismatch and due credit for the tax paid accordingly. Appeal of the assessee is allowed.
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2025 (2) TMI 85
Penalty u/s 271(1)(c) - assessee could not furnish any justifiable evidence regarding writing off of bad debts and even the documents furnished by the assessee regarding Sundry Creditors were disbelieved by the AO - assessee’s appeal before FAA was dismissed for want of prosecution - HELD THAT:- Appeal of the assessee cannot be adjudicated on merits at this stage. Although the assessee has been a chronic defaulter and seems to have taken proceedings before the Tribunal in a casual manner, all the same in the interest of substantial justice, restore this file to the office of the AO for providing one last opportunity to the assessee to explain before the AO why the penalty u/s 271(1)(c) of the Act should not be imposed. Accordingly, the AO is directed to adjudicate the issue of imposition of penalty de novo. Apeal of the assessee is allowed for statistical purposes.
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2025 (2) TMI 84
Reopening of assessment - Unaccounted cash loan received - as argued broker who facilitated "Rukka" transaction had himself confessed under oath the genuineness of transaction and "Rukka" being unaccounted cash transaction document cannot be expected to bear name, signature of parties - HELD THAT:- A perusal of the reasons recorded would show that the Assessing Officer had received information that the assessee had received cash loan to the tune of Rs.11.05 crore through broker namely, Shri Jai Bhagwan Agarwal. This information in itself is not sufficient to form the belief by the AO regarding escapement of income of the assessee.
AO has only the information that the assessee had received loan and the amount received as loan in no circumstances can be said to be the income of the recipient. If the allegation is to be treated as that the said loan was a sham transaction and that the same was the own income of the assessee routed through the said broker Shri Jai Bhagwan Agrawal (though there is no such averment made in the reasons recorded, even then, such an information may be treated a trigger point for making further investigations but that information alone cannot be said to be sufficient information for reopening of the assessment.
AO in this case, blindly acted on the information received from Investigation Wing and reopened the assessment, even though in the said information it has been mentioned that the assessee had received loan and there is no allegation that the said loan was a sham transaction to route the undisclosed income of the assessee.
Assessee having denied of receipt of any cash loan as alleged by the Assessing Officer, the burden shifted on the Assessing Officer to confront the assessee with any such evidence showing that the assessee had entered into any such transaction. Admittedly, in this case, no such cash was found from the possession of the assessee. There is no name mentioned by the Assessing Officer of any lender, who allegedly gave loan to the assessee, only the name of the broker has been mentioned, that in itself is totally a vague allegation without any corroborating evidence.
Neither the assessee has been found to be owner of any money, bullion, jewellery or valuable article nor any such money, bullion, jewellery or valuable article has been found in possession of the assessee nor there is any such allegation even in the reasons recorded for reopening of the assessment. Therefore, the impugned assessment is liable to be quashed on this score also - Decided in favour of assessee.
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2025 (2) TMI 83
Unexplained cash credit u/s 68 - Bogus share capital - HELD THAT:- CIT (A) simply dismissed the appeal of the assessee on the ground that the replies of three subscribers contained the information i.e. the balance sheet and Profit and Loss account for F.Y. 2015-16, and not for F.Y. 2016-17. The assessee has filed all these information before us for F.Y. 2016-17.
After examining the balance sheets of three subscribers namely; Aakansha Advisory Services Pvt. Ld., Sunirmiti Mercantile Pvt. Ltd and Arihant Enterprises Ltd.
We find that they have adequate creditworthiness to make investments in the assessee company.
Even on the basis of balance sheet and Profit and Loss account for F.Y. 2015-16, the creditworthiness of the assessee’s subscribers could be judged. Therefore assessee has discharged its onus cost upon it by the statute and in our opinion, addition cannot be made mainly on the ground that notice issued u/s 133(6) of the Act were not complied with. Appeal of the assessee is allowed.
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2025 (2) TMI 82
Estimating net profit @25% of turnover and restricted the disallowance of expenses as 20% of adhoc disallowance made by AO - HELD THAT:- Assessee has filed return of income declaring income on presumptive basis under provisions of section 44AD of the Act.
Revenue has not disputed the fact that the assessee is an eligible assessee under provision of section 44AD. Once, the return of income has been filed under the special provision of section 44AD of the Act, the assessee cannot claim deduction allowable under provisions of section 28 to 43C of the Act.
Assessee u/s. 44AD of the Act as against presumptive tax of 8% has offered income to tax @ 9.8%.
After accepting the assessee as “eligible assessee” u/s. 44AD of the Act the Revenue cannot look into each and every expenditure and make ad-hoc disallowance with regard to the expenditure separately. Appeal of the assessee is allowed.
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2025 (2) TMI 81
Non issue of notice u/s 143 - Unexplained cash deposits addition in bank account - assessee treating the same as income of the assessee from undisclosed sources - HELD THAT:- As held in the case of ‘ACIT vs. Hotel Blue Moon’ [2010 (2) TMI 1 - SUPREME COURT] that the issue of notice u/s 143(2) is sine qua non to assume jurisdiction to proceed with the assessment in a case. If the said notice had been issued by the AO who did not have the jurisdiction over the assessee, then such notice is to be treated as non-est. The assessment carried out in such cases will be bad in law.
DR has not pointed out any contrary decision to the above propositions relied by the ld. Counsel in respect of pecuniary jurisdiction of the concerned Assessing Officer to frame the impugned assessment in question.
In this case, since the concerned ACIT who had pecuniary jurisdiction to frame the assessment but did not issue notice u/s 143(2) of the Act, therefore, the assessment framed was bad in law in view of the case laws cited above. The impugned assessment order framed by the AO, therefore, is bad in law and the same is hereby quashed. Decided in favour of assessee.
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2025 (2) TMI 80
Unexplained cash credit - Addition u/s. 69A r/w 115BBE - HELD THAT:- So far as the amount withdrawn from the partnership is concerned, the same is not in dispute as the copy of capital account of Sai Samarth Plaza is placed.
Refund of advances, the assessee has furnished list of 17 persons who have sworn on the affidavits stating that they have given the amount in cash to the assessee prior to the demonetization period scheme. Their proof of identity is also furnished.
Revenue authorities before declining the claim of the assessee ought to have carried out the verification by way of calling the persons to record the statements u/s. 131 - No such exercise has been carried out. Therefore, even if the cash received from those debtors are below Rs. 20,000/- on each day creates doubt but in absence of any cross verification, the claim of the assessee cannot be denied.
For recovery of receivables it is an admitted fact that the assessee had not given any bifurcation of the said sum in the income-tax return for A.Y. 2016-17. Even if the assessee falls under the Presumptive Taxation Scheme, he has to provide the detail of cash, bank, stock and receivables etc. In absence of any other concrete evidence and proof of genuineness of sundry debtors the claim of the assessee having received Rs. 3,14,500/- as recovery of receivables did not have any merit and the said claim is not allowed. Addition partly allowed.
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2025 (2) TMI 79
Duty exemption benefit under Entry No. 512 of N/N. 50/2017-Cus dated 30.06.2017 - import of parts and components used in the manufacture of power banks - denial of benefit on the ground that this benefit will apply only to parts and components of lithium-ion batteries - HELD THAT:- An identical question was before this bench in Customs Appeal No. 55572 of 2023, M/s XO or Technologies LLP vs. Principal Commissioner [2024 (10) TMI 297 - CESTAT NEW DELHI] and in M/s Ambrane India Pvt Ltd Vs Commissioner of Customs (Preventive)- New Delhi [2024 (10) TMI 911 - CESTAT NEW DELHI]. In both appeals, it was decided that parts of power banks were eligible for exemption under notification number 50/2017-Cus (S. No. 512).
Conclusion - The appellant was eligible for the exemption under Notification No. 50/2017-Cus for the parts and components used in manufacturing lithium-ion batteries, even if these were used in power banks.
Appeal allowed.
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2025 (2) TMI 78
Classification of Appellant as a "related party" of Corporate Debtor - powers of RP to decide about the ‘related party’ - Appellant's removal from the Committee of Creditors (CoC) of Corporate Debtor (CD).
Powers of RP to decide about the ‘related party’ - HELD THAT:- It is clear from the language of the Section that IRP is responsible for constituting Committee of Creditors. As per the proviso of sub-Section 2 of Section 21 the related party of Corporate Debtor has no right of representation participation or voting in a meeting of Committee of Creditors. It is evident from that IRP has to decide about related party status of creditors of the CD for constituting the CoC as related parties cannot form part of CoC. After confirmation as RP appointment of IRP as RP the matters relating to CoC continue to be handled by RP as he chairs the CoC meetings - RP is empowered to decide on the related party status of a creditor.
Determination of appellant as related party of the CD in terms of various clauses of Section 5(24) of the Code - HELD THAT:- This network of shareholding establishes a clear connection between the Corporate Debtor and Hari Vitthal Mission, with both entities being subsidiaries or affiliates under the broader umbrella of Kanoria Foundation. Given this relationship, Hari Vitthal Mission is not only indirectly linked to the Corporate Debtor, but is effectively part of the same corporate group. Therefore, under Section 5(24)(i), Hari Vitthal Mission qualifies as a related party by virtue of its position as a subsidiary of Kanoria Foundation, the holding company/trust that controls the Corporate Debtor - Section 5(24)(j) defines a related party as any person or entity that controls more than 20% of the voting rights in the Corporate Debtor. As seen earlier the Kanoria Foundation holds 99.9% in the appellant which is the Financial Creditor. On the other side the Kanoria Foundation through a series of entities holds a 31% stake in CD. The control of Kanoria Foundation on CD is through several intermediary entities including Adisri, SIFL, TAIML, SAIT, SIPL and PCPL. This layered ownership has been clearly shown in the organogram and even though there may be intermediary entities between Kanoria Foundation and the Corporate Debtor the overall control through shareholding and appointment of Directors through the clauses of trust deed and investment agreement is real and substantial. Hari Vitthal Mission which is 99.9% owned by Kanoria Foundation is a subsidiary company of Kanoria Foundation. The holding entity Kanoria Foundation in this case holds more than 20% in both CD and appellant and appellant therefore squarely falls in the definition of related party of CD.
Conclusion - RP is empowered to decide about the status of a creditor as related party. The findings of RP and AA endorsed, wherein the appellant has been held as related party in terms of provisions of Section 5 (24) of the Code.
There are no infirmity in the order of AA - appeal dismissed.
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9911796707
