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Showing 181 to 200 of 1354 Records
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2024 (3) TMI 1174
Nature of activity undertaken by the appellant - Amounting to manufacture or not - Business Auxiliary Service or not - business of surface treatment of article/structures of steel provided to them by their clients, which is performed at site/workshop - non-payment of service tax for the period 16.06.2005 to 30.09.2009 - HELD THAT:- The process undertaken by the appellant makes a new identifiable product and the same cannot be held that it is only a job work activity. In fact, the activity undertaken by the appellant amounts to manufacture as held by this Tribunal in the case of M/S. MOHATA COAL COMPANY (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, BOLPUR COMMISSIONERATE [2024 (3) TMI 1166 - CESTAT KOLKATA], wherein this Tribunal has relied on the decision of the Tribunal in the case of M/S FERRO SCRAP NIGAM LIMITED VERSUS COMMR. OF CGST & EXCISE, BOLPUR (VICE-VERSA) [2021 (1) TMI 711 - CESTAT KOLKATA] and it was held that As it has already been decided that the said activity undertaken by the appellant amounts to manufacture and the appellant is doing the said activity on job work basis and such job worked goods have suffered duty at the end of the principal manufacturer, in these circumstances, the demand of Service Tax under the category of “business auxiliary service” is not sustainable against the appellant.
As the issue has already been decided by this Tribunal, wherein it has been held that the activity undertaken by the appellant amounts to manufacture and the appellant is doing such activity on job work basis and such “job work” has suffered duty at the end of principal manufacturer.
The appellant is not liable to pay service tax under the category of Business Auxiliary Service. Accordingly, the impugned demand is not sustainable against the appellant - Appeal allowed.
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2024 (3) TMI 1173
Refund claim - rejection on the ground that the appellant have not complied with the condition of N/N. 12/2013-ST clause-III sub-clause(C) in as much as the appellant have not obtained the Service Tax registration before filing the refund - HELD THAT:- From the condition of the Notification, the assessee is required to obtain a registration before filling a refund claim in terms of Clause-III Sub-clause (c) of Notification. However, as per sub-clause (g) even if the appellant has not obtained the registration they may obtain registration before filing the refund claim. As per the facts of the present case the appellant though did not obtain the registration before filing the refund application but subsequently on 14.07.2015 they had obtained registration. After obtaining the registration, the condition of the Notification provided under clause (c) stands made and on that account refund could not have been rejected as at the time of rejection of claim the appellant had registration in possession. Therefore, considering the same refund should have been sanctioned.
Moreover, even as per the condition the appellant is required to apply for the registration prior to filing the refund application. This condition is merely a procedural requirement and for breach of the procedural condition the substantial benefit of refund cannot rejected, particularly when the payment of service tax and use of service in the SEZ is not under dispute - Section 26 of SEZ Act provides that no tax/ duties are leviable on the input or input service received and use in the SEZ. As per this statutory provision which override any other Act, the service tax is not leviable on the service received in SEZ. Accordingly, the tax paid on the service needs to be refunded.
The impugned order is set aside - appeal allowed.
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2024 (3) TMI 1172
Scope of Capital goods - whether the finding of the CEGAT/CESTAT, applying the ration laid down in the larger bench of CEGAT in the case of JAWAHAR MILLS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, COIMBATORE [1999 (4) TMI 153 - CEGAT, NEW DELHI] was correct, legal and proper, when the goods are specifically excluded from the purview of Capital Goods as defined in Rule 57 Q of Central Excise Rules, 1944? - HELD THAT:- The order of the larger bench of CEGAT was further subjected to challenge before the Hon’ble Supreme Court by the Department which stood decided on 27.07.2001 in the case of COMMISSIONER OF C. EX., COIMBATORE VERSUS JAWAHAR MILLS LTD. [2001 (7) TMI 118 - SUPREME COURT] where it was held that The stand of the revenue was not as has been projected now by Mr. Rohtagi. In this view, the question of directing remand of these matters for fresh decision by the Tribunal does not arise. On the facts and circumstances of these cases, therefore, the stand that the items in question are not used for manufacture of final product cannot be accepted for the reasons aforestated.
The aforesaid view was further considered by the Hon’ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS LTD. [2010 (7) TMI 12 - SUPREME COURT] wherein, the Hon’ble Supreme Court again reiterating the view rendered in the case of Jawahar Mills where it was held that the Tribunal was correct in law in holding that the assessee was entitled to avail of MODVAT credit in respect of the subject items viz. steel plates and M.S. channels used in the fabrication of chimney for the diesel generating set, by treating these items as capital goods in terms of Rule 57Q of the Rules
In view of the authoritative decision of the Hon’ble Supreme Court in the aforesaid two cases, particularly, in the case of Jawahar Mills, which was relied upon by the CESTAT while deciding the appeal of the Department at the first instance which is under challenge in the present appeal, we do not find any merits in the submissions made by the learned Senior Counsel for the Department.
The appeal, thus fails and is accordingly rejected.
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2024 (3) TMI 1171
CENVAT Credit - received only invoices and no goods - reliability of statements recorded - HELD THAT:- Statements of the above persons have been summarised in the SCN. Not one of these persons was questioned about any of the disputed invoices on the strength of which the appellant had taken Cenvat credit. If the department’s case is that only specific invoices were supplied without goods the least one expects is to question if it was so. All the statements were general statements and are vague and not one deals with the invoices in dispute.
It has also not been disputed that the appellant had recorded the receipt of inputs in its RG-23A Part I and Part II registers. It is also not the dispute that the appellant had paid for the inputs. It is also not in dispute that the appellant had manufactured final products and had cleared them on payment of duty. There is also nothing on record to show that the stock of the inputs and final products in the appellant’s premises were taken and any shortage of either inputs or final products was discovered as a result.
The entire SCN is based on presumptions and assumptions and the confirmation of demand based on such an SCN cannot be upheld - the impugned order is set aside - Appeal allowed.
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2024 (3) TMI 1170
CENVAT Credit - purchase and sale of goods i.e., trading of goods - availing common input services without maintaining separate inventory for the taxable and exempted services in terms of rule 6(2) of the Cenvat Credit Rules (CCR), 2004 - separate accounts are not being maintained for dutiable and exempted services - whether proportionate reversal of credit is sufficient to comply with the relevant CCR, 2004? - period of dispute is July 2014 to June 2017 - HELD THAT:- Rules 6 very clearly establish that the taxpayer has been given an option to reverse the credit along with the interest when common credit is availed on inputs and input services on both dutiable and exempted goods/services.
In the case of M/S. SIFY TECHNOLOGIES LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI [2023 (3) TMI 12 - CESTAT CHENNAI] relied upon by the Revenue, the facts are entirely different and the question there was one who manufactures and clears simultaneously dutiable and exempted goods, various alternatives were provided to the taxpayer and having chosen a particular option, they cannot avail any other option simultaneously and the amended provisions are also not being considered - In the present case, the appellant does not manufacture consciously dutiable and exempted products but at times, trades in goods that were found to be excess and therefore, he was liable to reverse the CENVAT credit availed on the traded goods which are nothing but exempted products. Since the audit officers have noticed this irregularity, the appellant having accepted it, they have reversed the proportionate credit as laid down by Rule 6(3A) of the CCR, 2004 which is one of the options provided to the tax payer. Therefore, the question of denying this option to the appellant is not acceptable.
The Hon’ble High Court of Telangana Hyderabad in the case of M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT] had observed We may also note that in the event the petitioner was found to have availed Cenvat Credit wrongly, Rule 14 of the Cenvat Credit Rules, 2004 empowered the authorities to recover such credit which had been taken or utilised wrongly along with interest. However, the second respondent did not choose to exercise power under this Rule but relied upon Rule 6(3)(i) and made the choice of the option thereunder for the petitioner, viz., to pay 5%/6% of the value of the exempted services. The statutory scheme did not vest the second respondent with the power of making such a choice on behalf of the petitioner.
In the case of COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX VERSUS M/S RAJASTHAN PRIME STEEL PROCESSING CENTER PVT LTD., SHRI SACHIN GUPTA, SENIOR EXECUTIVE (ACCOUNTS AND EXCISE) , SHRI RAJPAL SINGH, SENIOR MANAGER (FINANCE AND ADMINISTRATION) AND AUTHORISED SIGNATORY [2019 (8) TMI 1175 - RAJASTHAN HIGH COURT] in a similar set of facts, the Hon’ble High Court observed that “in short, the Revenue argument is that Rule 6(3A) is not nearly procedural but was binding upon the assessee, who could not have claimed the benefit of even proportionate credit or it would have otherwise been entitled to input service for which CENVAT Credit was admissible, without following the procedure the Show-cause notice in this case covers two different periods(2011-16) substantial part of that period was when Rule 6(3A) did not exist - In the present case the period of dispute is after the introduction of Rule 3(A) in the CENVAT Credit Rule 2004 which was introduced from 01.04.2016, and Rule 3 provided an option to pay an amount as determined under subrule (3A) which allowed the appellant to reverse the proportional credit.
From the above, it is very clear that even if the manufacturer or a provider of service had failed to exercise the option under subrule (3) will be allowed to pay proportionate credit along with the interest at the rate of 15% per annum from the due date for payment of amount till the date of payment. However, there is nothing on record to show that the appellant has reversed the entire proportionate credit along with interest, therefore the matters needs to be remanded for verifying the same.
There are no reason denying the benefit of reversal of proportion CENVAT credit to the appellant - the impugned order is set aside - appeal allowed by way of remand for verification of payment/reversal of the proportional cenvat credit along with interest.
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2024 (3) TMI 1169
CENVAT Credit - clearance of inputs as such without reversal of payment of amount of credit availed on the said inputs - it is alleged that while clearing the inputs as such, they were required to reverse the input on the highest value of input received in a particular month - HELD THAT:- The said method of adoption of value is not correct as held by this Tribunal in the case of LSR SPECIALITY OIL PVT LTD, AROKIA SAMY, RAMESH BABU VERSUS COMMISSIONER OF CENTRAL EXCISE, BELAPUR [2015 (9) TMI 983 - CESTAT MUMBAI] wherein this Tribunal has held that the average value of input procured in a year is to be taken for reversal of cenvat credit on input cleared as such and the adjudicating authority has also relied on the said decision.
Admittedly, the show-cause notices were issued to the assessee to direct them for reversal on highest value of inputs in a particular month when they were procured, which is not correct. The adjudicating authority cannot improve the case of the Revenue by adopting the decision in the case of LSR Speciality Oil Private Limited at the stage of adjudication.
The charge made in the show-cause notices against the assessee as highest value of input for the month of procurement cannot be adopted for reversal of the cenvat credit by the assessee, is set aside - the impugned order is not sustainable in the eyes of law - appeal filed by the Revenue is dismissed.
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2024 (3) TMI 1168
Time Limitation - Election Petition filed to challenge result of an Election (public) - Whether any procedural deficiency in the proceedings filed online within the prescribed limitation period designated with objection can be labelled as proceedings filed beyond limitation? - HELD THAT:- This Court observed that any deficiency in filing the Appeal / Application for failure to file the physical documents, cannot make the Appeal or the proceedings which was registered on the online portal within the prescribed period of limitation to be labelled and held to be barred by limitation. This Court held that once the proceedings are filed albeit under the online method within the prescribed limitation, any deficiency in the same certainly could be removed later on as the law does not provide that proceedings be strictly filed sans deficiency and only then the proceedings would be held to be validly filed.
While referring to the e-filing Rules applicable to the present case, it is seen that there is nothing in the said Rules which could construe that the proceedings which have been filed by Petitioners on 20.11.2023 would debar them from maintaining the Election Petition. It is clear that the Petition is filed online and electronically by them before the end of the limitation period generating the remark “Document not serial”. This Court has held that to take an extreme view that if there is deficiency in filing it would debar the party from maintaining the action would tantamount to patent absurdity and it would result in gross injustice prejudicially affecting the legitimate right of persons to a legal remedy (access to justice). It is trite that parties will undoubtedly have an opportunity to remove the deficiencies, if any, which may prevail at the time of filing the proceedings, after the proceedings are filed.
This Court has observed that procedural compliances can never defeat the substantive remedy and right to pursue substantive challenge and proceedings when filed within the limitation period - In the present case the procedural deficiency noted as “Document not serial” after admittedly electronically filing and registration of the Election Petition online on 20.11.2023 cannot be held to be as the Petition being not filed within the limitation period. What is crucial is the fact of receiving the Petition in the record of the Registry, which infact has been accomplished.
The impugned orders dated 21.12.2023 passed by the learned Trial Court though have rejected the Application filed by Writ Petitioners which was on account of considering the physical filing of the Election Petition two days later, the jurisdiction of this Court and the amplitude of this Court while hearing writs under its extraordinary jurisdiction under Articles 226 and 227 of the Constitution of India is extremely wide - The objection raised or subsequent act of the Petitioners to file the Petition physically later cannot render the electronic filing of the Petition on 20.11.2023 as nugatory. Petitioners’ right to maintain challenge is upheld as the Petitions are held to have been filed on 20.11.2023 online, despite the objection raised. The objection undoubtedly being a curable defect. This Court can always cure the defect of the action which is occurred.
Both the aforesaid Election Petitions have been filed within limitation on 20.11.2023 which was supposed to expire on 21.11.2023. They have therefore to be accepted as filed within limitation - Petition allowed.
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2024 (3) TMI 1167
Challenged the order in original passed by the CGST Authority - Appeallable order - HELD THAT:- This is not a case where the impugned order has been passed by an authority having inherent lack of jurisdiction or is without affording any opportunity of hearing to the petitioners or the same is contrary to any specific provisions of law or constitutional validity of any provision of law is involved and furthermore, since the impugned order is an appellable order under the statute and this case does not fall under those categories of cases where in spite of availability of alternative remedy, this Court is not inclined to invoke its constitutional writ jurisdiction under Article 226 of the Constitution of India.
Accordingly, without going into the merit of the impugned adjudication order, on the ground of availability of alternative remedy, this writ petition is dismissed.
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2024 (3) TMI 1166
Levy of Service Tax - business auxiliary service - activity carried out by them of processing of cutting, grinding, drilling and machining of forged black wheels / axles supplied by M/s. Durgapur Steel Plant - HELD THAT:- The issue has already been examined by this Tribunal in the case of M/S FERRO SCRAP NIGAM LIMITED VERSUS COMMR. OF CGST & EXCISE, BOLPUR (VICE-VERSA) [2021 (1) TMI 711 - CESTAT KOLKATA] wherein this Tribunal observed The Tribunal in their own case M/S FERRO SCRAP NIGAM LIMITED VERSUS CCE, RAIPUR AND VICE-VERSA [2014 (1) TMI 1051 - CESTAT NEW DELHI] where it was held that service of shifting, transportation or raw materials, waste materials, and finished products from one place to another, inside the plant itself, does not fall under the taxing category of Cargo Handling Services.
As it has already been decided that the said activity undertaken by the appellant amounts to manufacture and the appellant is doing the said activity on job work basis and such job worked goods have suffered duty at the end of the principal manufacturer, in these circumstances, the demand of Service Tax under the category of “business auxiliary service” is not sustainable against the appellant.
The impugned order set aside - appeal allowed.
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2024 (3) TMI 1165
Transitional credit - Disparity was on account of the transitional credit availed of and reflected in the GSTR 9 annual return - mismatch between the Input Tax Credit (ITC) reported in GSTR 9 versus the GSTR 3B returns - HELD HAT:- The petitioner clearly stated in reply dated 21.09.2023 that transitional ITC of Rs. 1,15,40,474/- was claimed and that this is reflected in the GSTR 9 return but not in the GSTR 3B return. As regards the alleged defect pertaining to Director's remuneration, in the reply dated 27.10.2023, the petitioner stated that the Directors of the Company are based at the head office in Mumbai and that their remuneration would be taxable on RCM basis in the State of Maharashtra and not in Tamil Nadu. Similarly, as regards the blocked credit, it was expressly stated in the reply dated 27.10.2023 that no ITC was claimed in respect of the four items specified under defect no.2.
In the impugned order, the respondent has confirmed the tax demand without taking into consideration the above replies of the petitioner. This is also the case with regard to the other defects discussed in the impugned order. Hence, the impugned order is unsustainable.
The impugned order dated 31.12.2023 is quashed and the matter is remanded for re-consideration by the respondent - Petition disposed off.
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2024 (3) TMI 1164
Violation of principles of natural justice - validity of assessment order - the impugned order was issued after the petitioner failed to reply to the show cause notice or participate in proceedings in spite of being provided an opportunity to do so - attachment of bank account - HELD THAT:- On examining the impugned order, it is evident that the tax liability indicated therein is a sum of Rs. 95,666/-. The petitioner has placed on record proof of payment of Rs. 96,132/- by submitting Form GST DRC-03. The impugned order also indicates that the petitioner was not heard before such order was issued. Given the fact that revenue interest is fully secured as on date, it is just and appropriate that the petitioner be provided an opportunity of being heard.
The impugned order dated 12.09.2023 is quashed and the matter is remanded for reconsideration. The petitioner is permitted to file a reply to the show cause notice within a period of two weeks from the date of receipt of a copy of this order. Upon receipt thereof, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh assessment order within a period of two months from the date of receipt of the petitioner's reply.
As a consequence of the impugned assessment order being quashed, the bank attachment order shall stand raised.
The writ petition is allowed.
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2024 (3) TMI 1163
Challenged the order of cancellation of registration - appeal preferred was dismissed on the ground of limitation - limitation of filing of an appeal - date of the order - HELD THAT:- The Counsel for the petitioner argues that the appeal has been dismissed as being beyond limitation as such the doctrine of merger would not apply and the petitioner is fair entitled to seek judicial review of the order dated 14.02.2023 on the ground that the same is non speaking order. This Court in M/S Chandrasen, Sarda Nagar, Lucknow vs Union of India and others [2022 (9) TMI 1047 - ALLAHABAD HIGH COURT] had held that the order of cancellation of registration or any other order passed either on administrative or on judicial side is without any reason and prima facie, without application of mind, the same does not stand the test of scrutiny under Article 14 of the Constitution of India.
Thus, following the said judgment rendered in the case of M/s Chandrasen (Supra), the writ petition deserves to be allowed.
Accordingly, the writ petition is allowed. The order dated 14.02.2023 is set aside and the petitioner is permitted to appear before the respondent along with the reply to show cause notice and the certified copy of this order within three weeks from today.
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2024 (3) TMI 1162
Time Limitation - issuing a notice after the detention and then in passing the final order from the date of service of such notice - two figures in the vehicle number differing from that recorded in the e-way bills - HELD THAT:- Annexure-P/1 is series of e-way bills which shows the transport to be in vehicle no. UP78 CT 9645. On detention the transport was found to be made in a vehicle having no. UP78 CT 9650. The petitioner produced documents, as stated in the writ petition, establishing that the vehicles bearing both the registration numbers belonged to the petitioner. The tax authority in the order passed specifically pointed out that this would further the case of evasion and if the vehicles were with two different operators probably the recording of the number in the e-way bill was a bonafide mistake - the merits of the case need no consideration, especially when the contention is of bar by virtue of limitation.
Be that as it may, even if the detention is stated to be on 28.12.2023, the notice was only issued on 05.1.2024, after the seven day period provided in Section 129(3) CGST Act. Likewise when the petitioner had been informed at the time of verification, if the petitioner had sought for time on the seventh day from the date of serving of notice, there was nothing preventing the tax authority from rejecting the said prayer and passing the order, especially since, if the matter is kept pending, the proceedings would be barred by limitation.
The Limitation is clear and definite. The facts of the case indicate that the officers did not act in accordance with the provisions, we hence find no reason to sustain the demand raised. We set aside the orders passed for detention of the vehicles. The vehicle with the goods would be released immediately. Ordered, accordingly.
Petition allowed.
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2024 (3) TMI 1161
Cancellation of GST registration of the petitioner - rejection has been made primarily on the ground that the petitioner has failed to file their returns for more than six (06) months continuously - HELD THAT:- It is necessary to appreciate the fact that the show cause notice was that of December, 2020. Everybody knows that since March, 2020, onwards it was Covid pandemic that ripped through the entire country bringing the entire commercial and industrial establishments to a standstill or at least remaining closed for a major part of that period. The business of these establishments including that of the petitioner must have definitely been affected - If the default on the part of the petitioner is only so far as non-furnishing of the returns, we are of the considered opinion that subject to the petitioner making good the default, the said GST registration of the petitioner would get restored which would enable the petitioner to carry on his business and which would also generate GST revenue to the respondent authorities as well.
Learned counsel for the petitioner has also undertaken to make good the necessary default so far as non-furnishing of the GST returns are concerned along with late fees and penalty that would be applicable.
The present Writ Petition stands allowed directing the petitioner to immediately appear before the respondent authorities by 12.03.2024 and upon furnishing the entire GST returns up till date which they have not yet filed along with requisite late fees and penalty if any, the respondent authorities shall forthwith restore the GST registration of the petitioner without any further scrutiny so far as the default of non-payment of GST returns till now is concerned and the same is a onetime measure.
Petition allowed.
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2024 (3) TMI 1160
Seeking release of goods in terms of the provision of Section 129(1)(a) of the U.P.G.S.T. Act 2017 - SCN issued to the petitioner in its capacity as the consignee - HELD THAT:- The transaction disclosed to the revenue authorities was one of job work return to the petitioner (a registered dealer in the State of Haryana) from a dealer in Daurala. The goods were intercepted during movement through the State of Uttar Pradesh - Penalty order has also been passed against the petitioner in its capacity as the consignee. The case of the revenue is that the petitioner has also prepared delivery challan of job worker and therefore, the penalty has been rightly imposed. At the same time, upon query made, learned counsel for the revenue fairly states, no person other than the petitioner has claimed the goods.
Undoubtedly, under Section 129 of UPGST Act, 2017, different rates of penalties are prescribed depending upon the status of the person viz-a-viz, the goods that may have been seized. Again, undoubtedly the owner of the goods may not be visited with penalty exceeding 200 percent of the tax leviable on the offending goods.
Learned counsel for the petitioner last submits that the goods may be made over to the petitioner subject to its complying Section 129 (1)(a) of UPGST Act, 2017 with liberty to appeal against the penalty order.
The writ petition succeeds and is allowed at this stage itself to the extent, petitioner is permitted to obtain release of goods against furnishing security equal to 200 percent of the tax imposable on the goods.
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2024 (3) TMI 1159
Delay in filling appeal before SC - Deduction u/s 80-IA - Nature of Interest income - Advances extended to Employees - interest on the bonds issued by GRIDCO in lieu of unpaid energy bills - Nexus with business activity - Disallowing deduction towards ‘power profit’ under Section 80-IA (4)(iv) - As decided by HC [2022 (3) TMI 539 - ORISSA HIGH COURT] on the netting principle, since there is no other activity of the Assessee except power generation, the AO, the CIT(A) and the ITAT, were in error in disallowing the aforementioned sum as deduction under 80-IA of the IT Act. There is merit in the contention of the Assessee that the interest received from the bonds issued by GRIDCO have a direct nexus with its essential business activity and therefore, was income derived from it, thus, making it eligible for such deduction
HELD THAT:- There is a gross delay of 608 days in filing the special leave petition. The reasons assigned for seeking condonation of delay are not acceptable to us. Hence, the application seeking condonation of delay is dismissed.
Consequently, the special leave petition is dismissed on the ground of delay keeping open the question of law, if any, which arises in this matter.
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2024 (3) TMI 1158
Reopening of assessment u/s 147 - Pro-Trade activity of Petitioner - reason to believe - as alleged Assessee had entered into sales/purchase of equity shares with or without actual delivery in recognized Stock Exchange and there are no details provided - mandation to have live link between the information received by AO and formation of his belief that income had escaped assessment
HELD THAT:- Queries were raised and replies were sent itself indicates, as held in Aroni Commercials Limited [2014 (2) TMI 659 - BOMBAY HIGH COURT] once a query is raised during the assessment proceedings and assessee has replied to it, it follows that the query raised was a subject of consideration of the AO while completing the assessment. It is also not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. Therefore, the reopening of the assessment, in our view, is merely on the basis of change of opinion of the AO from that held earlier during the course of assessment proceedings and this change of opinion does not constitute justification and/or reason to believe that income chargeable to tax has escaped assessment.
AO in the reasons recorded does not even make an allegation that there was failure on the part of assessee to truly and fully disclose material facts. From the reasons as reproduced earlier, we are unable to cull down the factum of failure to disclose. The reason, in our view, does not indicate anything cogent or clear that in fact there was failure on the part of Assessee to truly and fully disclose all material facts necessary for its assessment.
There is no live link, which is a sine qua non between the material before the AO in the present case and the belief which he has to form regarding escapement of income.
We are satisfied that the jurisdictional conditions have not been met and the reassessment proceedings are nothing but a ‘change of opinion’. This ‘change of opinion’ does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. Decided in favour of assessee.
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2024 (3) TMI 1157
Determination of long term capital gain u/s 50C - assessee has received part sale consideration - whether the assessee is eligible for the benefit of First and Second proviso to Section 50C? - HELD THAT:- The first proviso to Section 50C specify that in case where the date of agreement fixing the amount of consideration and the date of registration of the transfer of capital asset is not the same, the value adopted or assessed by the stamp valuation authority or the date of agreement may be taken for the purpose of computing full values of consideration for such transfer. Further second proviso to section 50C specify that the benefit of first proviso shall apply only in case where the amount of consideration, or part thereof has been received by way of account payee cheque or by banking channel.
As part payment of the consideration is received by the assessee prior to the execution of agreement to sale in the month of June 2011, which we have verified from the bank statement of the assessee and as find that as per jantri rate applicable as on 01.08.2011 (sale agreement date) i.e., Rs. 64,82,526/-, the assesse has shown / received sale of Rs. 1.94 Crore, which is much more than the agreed price.
Thus, in view of the aforesaid factual discussion, we find that the assessee is entitled for the benefit of first and second proviso to section 50C. Hence, the addition made by assessing officer by invoking the provision of section 50C is not sustainable and the same is deleted. In the result, the ground No. 1 of the appeal raised by the assessee is allowed.
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2024 (3) TMI 1156
Late remittance of PF and ESI - HELD THAT:- We find the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd [2022 (10) TMI 617 - SUPREME COURT] has decided the issue in favour of the Revenue and therefore, respectfully following the decision of the Hon'ble Supreme Court, we allow the grounds raised by the Revenue.
Loans advanced to sister concerns - CIT (A) reducing the rate of interest from 16% to 8% on the loans advanced by the assessee to the sister concerns - HELD THAT:- The findings given by the CIT (A) cannot be faulted with CIT(A) as he had examined the availability of funds and thereafter had restricted the interest at 8% correctly.
Disallowance of expenses - assessee has not filed the requisite bills/vouchers/documents substantiating the increase in expenditure which is in the range of more than 39% of the earlier expenditure - HELD THAT:- AO is required to be disbelieved as the assessee had filed a letter dated 26.3.2015 before the AO which was filled before the passing of the order, where in the assessee had explained the increase in the expenditure . The situation continues to be the same even before the CIT (A). CIT (A) mentioned that the “ Manufacturing, administrative and selling and distribution expenditures along with ledger extracts.” were produced before the revenue authority. The above said, categorical finding of the CIT (A) recorded in the order have gone unrebutted. Undoubtedly, there is no ground raised by the Revenue challenging the order of the learned CIT (A) on the ground of the no adherence to principles of natural justice mentioned in Rule 46A of I.T. Rules.
In the absence of any ground-raising violation of principles of natural justice or accepting the evidence at the back of the assessee, the finding recorded by the CIT (A) that the assessee has produced bills/vouchers explaining the increase in expenditure before the AO and before CIT (A) is required to be accepted.
Once the bills have been produced by the assessee before the Revenue authorities and the bills have been examined by the CIT (A) and thereafter only the disallowance made by the AO has been deleted. We do not find any reason to interfere with the findings given by the CIT (A) and accordingly, the disallowance deleted by the learned CIT (A) is sustained.
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2024 (3) TMI 1155
Addition u/s 68 - Bogus LTCG - Penny stock transactions - long-term capital gains derived by the assessee on sale of shares of listed companies questioned - entry operators involved in facilitating bogus LTCG to beneficiaries like assessee, which according to AO is nothing but converting the black money of the beneficiaries to white - CIT(A) deleted the addition - HELD THAT:- As decided in the case of PCIT v. Ziauddin A Siddique [2022 (3) TMI 1437 - BOMBAY HIGH COURT] which is found to be relevant in the facts involved in the present case. In the decided case, the issue before the Hon’ble High Court was whether this Tribunal was right in law in deleting the addition made u/s 68 in relation to LTCG derived on sale of shares, ignoring the fact that the shares were purchased from off-market sources and that the sharp rise in prices were not supported by financials. Answering the question raised by the Revenue in the negative, the Hon’ble High Court held that there was a finding of fact that the purchase & sale of shares occured on the platform of stock exchang, upon payment of STT and were supported by documentary ecidences and therefore there was no perversity in the order of this Tribunal. The Court further noted that there was no allegation against the assessee that he had participated in price rigging in the market and therefore dismissed the appeal of the Revenue.
We concur with the view of the CIT(A) and uphold the impugned order of the CIT(A) deleting the addition - we direct the AO to allow the LTCG/exemption claimed by assessee u/s 10(38) on sale of shares of M/s Shaleen Textile Ltd. Decided against revenue.
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9911796707
