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2024 (12) TMI 52
Rejection of appeal preferred by the Petitioner herein against the Order of Adjudicating Authority dated 20th of December, 2023 - rejection on the ground that it was barred by limitation - rectification of the Order passed by the Adjudicating Authority - HELD THAT:- From perusal of the certificate issued by the Executive Engineer, R&B, Division Kupwara dated 26th of July, 2024, it transpires that, prima facie, there is some mistake committed by the Executive Engineer concerned in uploading the TDS against the Permanent Account Number (PAN) of the Petitioner. We are not sure as to whether this aspect of the matter, if brought to the notice of the Adjudicating Authority, would ultimately result into rectification of the Order passed by the Adjudicating Authority or not - the Petitioner deserves an opportunity to place this material, including the certificate dated 26th of July, 2024 and other relevant record, before the Adjudicating Authority and seek rectification in terms of Section 161 of the Central Goods and Services Tax Act, 2017.
It is deemd appropriate and in the interests of justice to dispose of this Petition by permitting the Petitioner to file a rectification application under Section 161 of the Act of 2017 before the Adjudicating Authority within a period of two weeks from today - petition disposed off.
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2024 (12) TMI 51
Permission to rectify/ amend the GST number of the purchaser in GSTR-1 return with respect to the invoices dated 13.05.2021 (on account of human error) for the quarter ending 30.06.2021 after the limitation period is expired in terms of Section 37 (3) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The process as submitted by learned counsel for the Revenue is complete in itself and each step precedes the earlier step. If one of the steps is erroneous and the same is not corrected or rectified within the timeline provided under the provisions, a cascading effect would occur to the subsequent process provided under the subsequent provisions. We are satisfied from the aforesaid provisions that if a person submits an erroneous GSTR-1, and does not correct it, the subsequent GSTR-2A and GSTR-3B would also reflect the erroneous information and the consequences thereof shall follow.
The time limitation, as provided under Section 37 (1) and 37 (3) of the Act, is linked directly and proportionately to Section 16 (4) of the Act. In terms of the aforesaid provisions, input tax credit can be availed till the due date of furnishing the return under Section 39 of the Act for the month of September following the end of the financial year to which the invoice / debit note pertains or furnishing of the annual return, whichever is earlier. The correction in the corresponding GSTR-1 is permissible in terms of the timeline as specified in Section 16 (4) of the Act.
The petitioner could not detect the error of mentioning the point of sale as Mumbai instead of Delhi and the mentioning of the GST number of purchaser of Mumbai instead of GST number of purchaser of Delhi which has resultant, as per his submissions, loss to the concerned purchaser, who could not avail the ITC. Last date of submission for rectification/ omission, admittedly falls on 30.11.2022 for the concerned petitioner.
In Bharti Airtel’s case [2021 (11) TMI 109 - SUPREME COURT], the Supreme Court was considering the question of similar nature. In the said case, the Bharti Airtel has erroneously deposited cash and submitted that if it was allowed to rectify Form GSTR-3B so as to avail ITC for the relevant period, amount paid by it in cash towards the OTL would get credited to its electronic cash ledger account. After considering the provisions of Section 39 of the Act, which relates to the final return being filed under Form GSTR-3B, it proceeded to set aside the order passed by the Delhi High Court observing 'the matching and correction process happens on its own as per the mechanism specified in Sections 37 and 38, after which Form GSTR3 is generated for the purposes of submission of returns; and once it is submitted, any changes thereto may have cascading effect. Therefore, the law permits rectification of errors and omissions only at the initial stages of Forms GSTR-1 and GSTR-3, but in the specified manner. It is a different dispensation provided than the one in pre-GST period, which did not have the provision of auto-populated records and entries.'
As per Section 16 (4) of the Act, a registered person shall not be entitled to take input tax credit after the due date of furnishing of the return under Section 39 of the Act for the month of September following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier. Thus, ITC can be availed till the due date of furnishing of the return. If there is a correction in the corresponding GSTR-1 within the timeline, ITC would be permissible in terms of the timeline specified in Section 64 of the Act, therefore, the petitioner cannot be permitted to rectify the return beyond the statutory time limit prescribed under the GST Act.
The claim of the petitioner for correction of the return is rejected. The writ petition is found to be without any force and is accordingly dismissed.
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2024 (12) TMI 50
Seeking grant of anticipatory bail - fraudulent claims of Input Tax Credit (ITC) - creation of fake forms - forging and fabrication of fake bills showing inter se transactions of sales and purchases - HELD THAT:- The allegations are broadly to the effect that the petitioners had availed of ‘Input Tax Credit’ by raising false bills and showing fictitious transactions effected through dummy firms which were actually not in business. Such allegations, on the face of it would certainly attract offence under IPC for allegedly availing ‘Input Tax Credit’ fradulently on the basis of false documents and sham transactions. At the same time, since fraud had allegedly been committed with respect to availing ‘Input Tax Credit’ under provisions of GST, the penal provisions of GST would also attracted.
Section 26 of the General Clauses Act, 1897 suggests that there is no absolute bar to try an offender under two different enactments, but the bar is only to the punishment of the offender twice for the offence. The same set of facts, in conceivable cases, can constitute offences under two different laws. An act or an omission can amount to and constitute an offence under the IPC and at the same time, an offence under any other law - This Court however, finds that the said judgments particularly the Supreme Court’s judgments have not directly dealt with the issue where act constitutes offence under two enactments particularly in reference to Section 26 of General Clauses Act. However, Hon’ble the Supreme Court has specifically dealt with the said issue on several occasions in some other cases.
Hon’ble Supreme Court in TS BALIAH VERSUS TS RANGACHARI, INCOME-TAX OFFICER, CENTRAL CIRCLE VI, MADRAS [1968 (12) TMI 1 - SUPREME COURT], held that where an act or an omission constitutes an offence under two enactments, the offender may be prosecuted and punished under either or both enactments but shall not be liable to be punished twice for the same offence.
In STATE OF RAJASTHAN VERSUS HAT SINGH & ORS. [2003 (1) TMI 723 - SUPREME COURT] Hon’ble Apex Court discussed the doctrine of double jeopardy and section 26 of the General Clauses Act to observe that prosecution under two different Acts is permissible if the ingredients of the provisions are satisfied on the same facts.
Admittedly, the petitioners have also been proceeded in a complaint filed against them under Section 132 of CGST Act, which is pending at Ludhiana wherein petitioner-Jatinder Menro remained in custody for 1 year and 8 months and petitioner-Mandeep Singh remained behind bars for about 1 year. It is also not in dispute that the petitioners were not on the run and had associated themselves with the authorities concerned. However, the petitioners now apprehend their arrest on account alleged disclosure statement dated 2.11.2013 by Sammy Dhiman and addition of offences punishable under Sections 465, 467, 468, 471 IPC. It is now pursuant to recording of said disclosure statement that the petitioners came to be nominated as accused in the present FIR on 02.11.2023.
Having regard to the position wherein it is prima facie found that the allegations as in the complaint under Section 132 of CGST Act and in the FIR are more or less overlapping and also that the allegations pertaining to raising of false bills for showing false transactions would specifically be covered under offences under CGST and also that the petitioners have remained behind bars for a substantial period in respect of a complaint under Section 132 of CGST Act and neither the petitioners are alleged to been on the run during these five years nor the police had chosen to arrest them ever since lodging of the FIR, this Court is of the opinion that it is a fit case for grant of anticipatory bail to the petitioners.
Petition allowed.
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2024 (12) TMI 49
Maintainability of petition - availability of alternative remedy - Challenge to Order-in-Original and Summary of the Order - entitlement to Input Tax Credit [ITC] in respect of purchase of coal - refund of ITC on zero-rated supplies - violation of principles of natural justice - HELD THAT:- It is well settled that ordinarily in revenue matters, the court does not entertain a petition for a writ under Article 226 of the Constitution of India, where the petitioner has a statutory remedy, which without being unduly onerous, provides an adequate and efficacious remedy. The High Court in its writ jurisdiction, does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not act as a court of appeal against a decision of a court or tribunal or an adjudicating authority to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon a statutory remedy provided by the governing statute for obtaining relief.
In the case in hand, it is not the case of the petitioner that the petitioner did not receive the Demand –cum- Show Cause Notices. On receipt of the Demand –cum- Show Cause Notices, the petitioner ought to have replied to the said Demand –cum- Show Cause Notices. By issuance of a show cause notice, a noticee is asked to respond to the proposed action. With issuance of a show cause notice, the rights and obligations of the parties are not decided finally - In the case in hand, with the petitioner not availing the opportunity of submitting a reply to the show cause notice after seeking time for four weeks and to submit an effective reply and declining to avail any personal hearing to one Show Cause Notice and by not responding to the other Show Cause Notice, it is not open for the petitioner to raise a ground that it was a case of no notice and no opportunity of hearing.
In view of the fact that an adequate, efficacious and statutory remedy has already been provided to assail an order like the Order-in-Original dated 06.09.2024 before the Appellate Authority, this Court is of the view that this writ petition preferred under Article 226 of the Constitution of India is not to be entertained at this stage, reserving the liberty to the petitioner to avail statutory remedy of appeal under Section 107 of the CGST/AGST Act, 2017. It is accordingly observed.
This Court is of the considered view that while not entertaining the writ petition, the same can be disposed of with the following observations and directions balancing the equities and for the interest of justice as well as having regard to the fact that the bank account[s] of the petitioner has/have remained freezed and unoperational since 02.04.2024, a date prior to issuance of the Demand –cum- Show Cause Notice dated 08.04.2024 - the writ petition stands disposed of.
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2024 (12) TMI 48
Maintainability of petition - Availability of statutory remedy under Section 107 of the CGST/AGST Act, 2017 - Challenge to Order-in-Original and Summary of the Order - Input Tax Credit [ITC] in respect of purchase of coal - freezing of the petitioner's bank account - violation of principles of natural justice - HELD THAT:- It is well settled that ordinarily in revenue matters, the court does not entertain a petition for a writ under Article 226 of the Constitution of India, where the petitioner has a statutory remedy, which without being unduly onerous, provides an adequate and efficacious remedy. The High Court in its writ jurisdiction, does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not act as a court of appeal against a decision of a court or tribunal or an adjudicating authority to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by the governing statute for obtaining relief.
In the case in hand, it is not the case of the petitioner that the petitioner did not receive the Demand –cum- Show Cause Notice. On receipt of the Demand –cum- Show Cause Notice, the petitioner ought to have replied to the said Demand –cum- Show Cause Notice. By issuance of a show cause notice, a noticee is asked to respond to the proposed action. With issuance of a show cause notice, the rights and obligations of the parties are not decided finally. The event of issuance of a show cause notice is a step towards taking a final decision in the matter by the competent authority. A tentative view taken in the process cannot be deemed to be the final view taken in the matter.
It has not emerged that there was total violation of the principles of natural justice in the case in hand. Prima facie the case is not one which falls in the category of no notice and no opportunity of hearing. There is a distinction between a case where there is total violation of the rule of audi alteram partem with no notice and no opportunity of hearing and a case where there is violation of a facet of the rule of audi alteram partem in that the assessee was not afforded with any notice and/or opportunity of hearing. It does not emerge from the facts of the case that the petitioner was not provided with any kind of prior opportunity and hearing before issuance of the impugned Order-in-Original.
In view of the fact that an adequate, efficacious and statutory remedy has already been provided to assail an order like the Order-in-Original dated 16.08.2024 before the Appellate Authority, this Court is of the view that this writ petition preferred under Article 226 of the Constitution of India is not to be entertained at this stage, reserving the liberty to the petitioner to avail statutory remedy of appeal under Section 107 of the CGST/AGST Act, 2017. It is accordingly observed.
This Court is of the considered view that while not entertaining the writ petition, the same can be disposed of subject to fulfilment of conditions imposed - the writ petition stands disposed of.
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2024 (12) TMI 47
Legality of the Order-in-Original and Summary of the Order under the CGST/AGST Act, 2017 - Entitlement of the petitioner to Input Tax Credit (ITC) - refund of ITC on zero-rated supplies - after submission of the reply by the petitioner seeking time, the Adjudicating Authority did not apprise the petitioner about the next date of hearing in connection with the Demand –cum- Show Cause Notice under reference - violation of principles of natural justice - HELD THAT:- It does not emerge from the facts of the case that the petitioner was not provided with any kind of prior opportunity and hearing before issuance of the impugned Order-in-Original.
In the case in hand, it is not the case of the petitioner that the petitioner did not receive the Demand –cum- Show Cause Notice. On receipt of the Demand –cum- Show Cause Notice, the petitioner ought to have replied to the said Demand –cum- Show Cause Notice. By issuance of a show cause notice, a noticee is asked to respond to the proposed action. With issuance of a show cause notice, the rights and obligations of the parties are not decided finally - A tentative view taken in the process cannot be deemed to be the final view taken in the matter. The final view is dependent on the response received from the noticee and if the noticee is able to show sufficient cause as to why no action as contemplated under the show cause notice should be taken the final view may altogether be different. In the case in hand, with the petitioner did not avail the opportunity of submitting an effective reply to the show cause notice after seeking time for four weeks and declined to avail any personal hearing. In such scenario, it is not open for the petitioner to raise a ground that it was a case of no notice and no opportunity of hearing.
In view of the fact that an adequate, efficacious and statutory remedy has already been provided to assail an order like the Order-in-Original dated 08.04.2024 before the Appellate Authority, this Court is of the view that this writ petition preferred under Article 226 of the Constitution of India is not to be entertained at this stage, reserving the liberty to the petitioner to avail statutory remedy of appeal under Section 107 of the CGST/AGST Act, 2017. It is accordingly observed.
The writ petition stands disposed of.
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2024 (12) TMI 46
Condonation of delay in filing the appeal - Cancellation of registration of the petitioner - appeal against the cancellation of GST registration was filed within the prescribed limitation period - HELD THAT:- It is not in dispute that after service of the impugned order dated 04.03.2023, the appeal should have been preferred within limitation, but the appeal has been preferred beyond the limitation - Further, before this Court also, petitioner has failed to give any good ground for condonation of delay, therefore, this Court, under extra ordinary jurisdiction, cannot interfere with the impugned orders.
The Apex Court in the case of Singh Enterprises Vs. Commissioner of C. Ex., Jamshedpur [2007 (12) TMI 11 - SUPREME COURT], has specifically held 'there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days' period.'
In the subsequent decision in Mafatlal Industries Ltd. & Ors. vs. Union of India & Ors. [1996 (12) TMI 50 - SUPREME COURT], this Court went on to observe that an Act cannot bar and curtail remedy under Article 226 or 32 of the Constitution. The Court, however, added a word of caution and expounded that the constitutional Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise its jurisdiction consistent with the provisions of the enactment. To put it differently, the fact that the High Court has wide jurisdiction under Article 226 of the Constitution, does not mean that it can disregard the substantive provisions of a statute and pass orders which can be settled only through a mechanism prescribed by the statute.
Thus, no interference is called for in the impugned orders - petition dismissed.
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2024 (12) TMI 45
Seeking reimbursement of extra GST amount paid - grievance of the petitioner is that despite the enhancement from 01.01.2022, the respondents are paying the running bills with 12% GST and the petitioner is paying 18% GST - HELD THAT:- Respondents No. 2 & 3 filed a return raising baseless objection regarding maintainability of writ petition, and availability of alternative remedy under the Arbitration Act - Needless to say that no disputed question of facts are involved in this case, therefore, the petitioner cannot be relegated to the Dispute Resolution Form as provided under the agreement.
Respondent No.4 which is a State GST Department, according to which also the rate of GST has been enhanced from 12% to 18% and same is liable to be paid by respondent No. 2 which is a Government Entity.
The respondent No. 2 is directed to pay the difference of GST amount to the petitioner @ 6% from 01.01.2022 to 30.09.2022 with a period of three months from the date of receipt of certified copy of this order, failing which the petitioner shall be entitled for interest @ 6% per annum from the date of entitlement - petition disposed off.
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2024 (12) TMI 44
Assessment u/s 153C - AO’s assumption of jurisdiction u/s 153C - HELD THAT:- A predecessor Bench of this Court in CIT v. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] held that if no incriminating material is found during the course of the search in respect of an issue, then no addition in respect of such an issue can be made in the assessment under Sections 153A and 153C of the Act.
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2024 (12) TMI 43
Revision u/s 263 - provision made for depreciation on investment and the assessee had added back only relating to investments in India and excluded investments outside India - HELD THAT:- The tribunal by placing reliance on the order passed by it in the case of assessee for Assessment Year 1996-97 and 1997-98 inter alia held that the revenue as well as assessee are bound by the decision rendered by the tribunal and therefore, in the light of decision rendered by tribunal, the Commissioner of Income Tax committed an error in holding that the order passed by the Assessing Officer was erroneous and prejudicial to the interest of the revenue. Accordingly, the order passed by the Commissioner of Income Tax was set aside.
The Supreme Court in G.M. Mittal Stainless Steel (P.) Ltd. [2002 (12) TMI 13 - SUPREME COURT] has held that power under Section 263 of the Act has to be exercised on the basis of the material, which was available at the time when the Commissioner of Income Tax passed an order, the order passed by the tribunal was operative and therefore, the Assessing Officer's order could not have been termed as erroneous. Merely because the order of the Assessing Officer was passed relying which was subsequently reversed by this court cannot justify the order passed by the Commissioner of Income Tax under Section 263 of the Act. Decided in favour of the assessee.
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2024 (12) TMI 42
Validity of reopening of assessment - deduction u/s 54B was wrongly claimed for the agricultural land sold by the brothers of the petitioner - objection filed by petitioner were rejected - HELD THAT:- It is a settled law that inspite of amendment made in the year 1998 u/s 147 of the Act, the reassessment proceedings cannot be initiated on change of opinion.
For concluding that AO had applied mind to an issue not only assessment order is relevant but it can also be determined from record. It is for AO to determine how to frame an order. The issue accepted may not be even discussed in the order and assessee is not responsible for this. Non recording of reasons by the AO in assessment order for accepting the explanation on an issue shall not make a foundation for reassessment on same issue as AO had already dealt with it and formed an opinion.
The issue of deduction u/s 54B was raised and discussed in the assessment proceedings. The explanation of petitioner on the issue was accepted and deduction u/s 54-B of the Act was allowed. It is inferred that AO formed an opinion albeit, not recorded the reasons for it.
The notice issued u/s 148 for assessment year 2009-2010 and order rejecting the objections are quashed. WP allowed.
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2024 (12) TMI 41
Unexplained money u/s. 69A - cash deposited in bank account of the appellant - HELD THAT:- As decided in SMT. PK NOORJAHAN [1997 (1) TMI 6 - SUPREME COURT] deliberating on the term "may" used in Section 69 said Income-tax Officer is not obliged to treat the source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory. It was further observed that the question as to whether the source of the investment should be treated as income or not u/s. 69 of the Act has to be considered in the light of the facts of each case.
Discretion has been conferred on the Income-tax Officer u/s. 69 of the Act to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping in view the facts and circumstances of the particular case.
As the assessee in the present case had failed to come forth with any plausible explanation both before the A.O/CIT(Appeals) as regards the source of the cash deposits in his bank account, therefore, we principally concur with the view taken by them.
But it would be incorrect to not consider the fact that the assessee being a 44 years old commerce graduate would have some amount of cash in hand out of his past savings/current years income in his possession, viz. (i) private job with New Creative Fibre; (ii) wholesale business in the name of “Suman Combines”; and (iii) past accumulated savings as on the date of making the cash deposits in his bank account. We firm conviction that an amount can safely be held that he would have been in possession of the assessee at the time of depositing of cash in his bank account during the year under consideration. Accordingly,we scale down the addition made by the A.O to Rs. 17.91 lacs [Rs.19.71 lacs (-) Rs. 2 lacs]. Assessee appeal partly allowed.
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2024 (12) TMI 40
Addition u/s 68 - unexplained cash credits in bank account - HELD THAT:-Assessee is engaged in the business of textile and grey and is filing return of income for many years. The cash sales in the business of assessee, is a usual practice. Thus, considering the overall facts and circumstances of the case, entire cash deposit during demonetization period cannot be treated as unexplained credit, for a businessman having turnover of more than Rs. 1.00 crore.
Considering the fact that the assessee is not able to substantiate the source of entire cash deposit, similarly entire cash deposit cannot be treated as income. Therefore, a reasonable addition out of total cash deposit will be sufficient to avoid the possibility of revenue leakage. Thus, considering the facts of the present case, 20% of total cash deposit are upheld and remaining addition is deleted.
So far as taxing the addition is concerned, the cash deposit is out of business receipt, therefore, it cannot be taxed u/s 115BBE. AO is directed to tax the sustained addition at normal rate of tax. In the result, ground No. 1 of the appeal is partly allowed.
Addition of sundry creditors - no supporting evidence like copy of bills, Ledger account and proof of subsequent payment is filed - CIT(A) confirmed the action of AO - HELD THAT:- On considering the submission and perusal of supporting evidence in the form of account confirmation and sample purchase bill, find that neither the AO nor the ld. CIT(A) verified such bills and account confirmation or made any independent investigation of such evidences. Moreover, all the purchase bills are in respect of yarn. Complete details of creditors are available on sales invoices/purchase bills. Thus, no justification of making such addition. AO is directed to delete the addition. In the result, ground No. 2 of appeal is allowed.
Ad hoc disallowances of 10% of expenses - assessee submits that the assessee has offered income u/s 44AD, thus, there is no scope of further addition - HELD THAT:- CIT(A) confirmed the action of AO with similar view. Before me, the ld. AR of the assessee vehemently argued that the assessee has offered income under Section 44AD. On perusal of Profit & Loss Account and computation of total income, we do not find any such reference in offering income u/s 44AD, thus, no merit in the submission of assessee. Considering the nature of expenses and the ratio of ad hoc disallowance being 10% only which is on reasonable basis. Thus, no reason to interfere in the findings of lower authorities. In the ground No. 3 of appeal is dismissed.
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2024 (12) TMI 39
Addition in respect to loan obtained u/s 68 or under section 69A - HELD THAT:- Assessee, vide submission had submitted before the Assessing Officer, a detailed reply along with documents wherein confirmation in respect of loan taken from M/s. Abhilasha Shoppers Pvt. Ltd. for the period from 01/04/2012 to 31/03/2015 were submitted.
It is clear that the loan creditor is assessed to income tax and its address and PAN details are matter of record. The financial statements of M/s.Abhilasha Shoppers Pvt. Ltd., were also submitted.
The amount received and payable by the assessee as on 31/03/2013, is verifiable from the financial statements of the lender. The TDS certificate also placed - assessee has discharged its onus to explain the credit by adducing proper legal evidence. The amount has been repaid through proper banking channel and same is verifiable from the bank statement of the assessee. The statements of various persons reproduced in assessment order are not with reference to the verification of loan transaction of the assessee. They are general statements recorded by Investigation Wing of Kolkata, which are reproduced in the assessment order and are not in respect to any enquiry of loan in the case of the assessee. Confirmed copy of ledger evidencing repayment to lender is furnished. The legal evidence placed on record to explain loan credit does not get discredited by general statements.
Addition u/s 68 - In the present case also, the loan amount has been repaid through proper banking channel along with interest. On the above factual position, there remains no scope to make addition under section 68. Consequently, respectfully following the decision of M/s. Vibrant Global Capital Ltd [2024 (11) TMI 312 - ITAT NAGPUR] and detailed legal position discussed therein, we are of the considered opinion that the addition made in the present case of the assessee u/s 68 of the Act is unjustified and unsustainable on facts and in law. In assessee’s case, the confirmation and financial statement of lender have been placed on record. The assessee has reasonably discharged his onus to explain the credit by adducing legal evidence on record. Accordingly, we set aside the impugned order passed by the learned CIT(A) and the Assessing Officer on this issue and the addition made u/s 68 is hereby directed to be deleted. Thus, the grounds raised by the assessee are allowed.
Addition being interest paid to M/s. Abhilasha Shoppers Pvt. Ltd. - The interest paid by the assessee is through proper banking channel. The TDS was deducted and was deposited in the account of the Government. The genuineness of loan transaction is held by us to have been established and we have ordered deletion of the addition of ₹ 50 lakh. The loan obtained has been utilized for the purpose of business. The interest paid to the very same party during subsequent assessment year has been allowed. Accordingly, the addition made by the AO by disallowing interest paid is held to be unjustified.
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2024 (12) TMI 38
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Where assessee’s own funds and other non-interest bearing funds were more than the investment in tax free securities no disallowance u/s 14A can be made. See Cyquator Media Services Pvt. Ltd. vs DCIT [2023 (7) TMI 855 - ITAT MUMBAI]. Appeal of the assessee is allowed.
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2024 (12) TMI 37
Validity of reopening u/s. 147 - issuance of notice u/s. 148 beyond the period of four years - addition towards share application money u/s. 68 - HELD THAT:- From the perusal of the aforesaid list of companies and the companies from whom assessee had received share application money, it can be seen that nowhere these companies have been mentioned by Shri Pravin Jain that any of the 6 entities were managed and controlled by him.
Thus, the very premise of the ld. AO while recording the reasons is based on wrong assumption of facts. It is a very well settled law that ld. AO has acquired jurisdiction based on valid reasons and material and information referred to in the reasons recorded should have live link nexus with the income escaping assessment. If there is no such material and information relevant to the assessee, then ld. AO cannot reopen the case based on incorrect assumption of facts recorded and the reasons recorded.
Reasons recorded by the AO do not clothe the him with the jurisdiction to reopen the assessment u/s 147 for the second time and accordingly, the reason recorded as well as the notice issued u/s. 148 is invalid and accordingly, same is quashed. Thus, the entire re-assessment order is quashed. Appeal of the assessee is allowed on jurisdictional issue.
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2024 (12) TMI 36
Reopening of assessment u/s 147 - Notice beyond period of four years - assessee was beneficiary of accommodation entries from the account maintained in HDFC Bank - HELD THAT:- The reopening was made u/s 147 of the Act by issuing notice u/s 148 after the AO received information from DDIT(Inv), Unit-4(1), Kolkata. Therefore, the reopening can only be made subject to the satisfaction of the conditions as provided in first proviso to section 147 which state that where the assessment has been framed u/s 143(3) reopening after a period of four years can only be made if the escapement of income is attributed to the failure on the part of assessee to disclose material facts either in the return of income or during the course of assessment proceedings.
This is not the facts in the present case. We note that the assessee has fully disclosed all the facts in the return of income filed u/s 139(1) of the Act and the case was also selected for scrutiny and assessment was framed vide order dated 22.12.2017 passed u/s 143(3).
Therefore, non-mentioning on the part of the AO that the reopening beyond four years is made u/s 147 because of the failure on the part of the assessee to disclose fully and truly all the material facts which is necessary for assessment renders the re-assessment proceedings nullity.
Reopening of assessment has been made by the AO without recording a concrete and clear-cut findings about the failure of the assessee is bad in law and cannot be sustained. The case of the assessee finds support from the decision of CEAT Ltd. [2023 (1) TMI 73 - SC ORDER] wherein held that re-opening u/s 147 of the Act beyond 4 years from the end of the relevant assessment year can only be made if the AO has recorded a finding in the reasons that the escapement is attributable to the failure of the assessee to fully and truly the material facts qua the impugned income and not otherwise - Appeal of the assessee is allowed.
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2024 (12) TMI 35
TDS u/s 195 - Deduction of TDS from the payments made to foreign associated enterprise/group companies - HELD THAT:- As relying on assessee’s own case in [2024 (8) TMI 928 - ITAT DELHI] we hold that since the remittance made by HCLT to the foreign subsidiary/ AEs are held to be not taxable in India in the hands of the recipient company in India, there would be no obligation for the payer i.e. assessee company, to deduct tax at source u/s 195 of the Act. This proposition is already settled by the Hon'ble Supreme Court in the case of GE India Technology India Ltd. [2010 (9) TMI 7 - SUPREME COURT]
No infirmity in the order of the ld CIT(A). Accordingly, the addition u/s 201(1) and interest u/s 201(1A) of the Act on the assessee is hereby deleted and the grounds raised by the revenue are dismissed.
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2024 (12) TMI 34
Disallowance u/s 37 - Allowability of business expenses - CIT(A) deleted addition - HELD THAT:- Section 37 of the Act provides that any expenditure not being in the nature of capital expenditure or personal expenses of the assessee laid out or expanded wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head “Profits and gains of business or profession”. The assessee wholly and exclusively claims that the entire expenses have been incurred for the business purposes.
The assessee company has paid tax at MAT rate and there is no tax evasion. The Ld CIT(A) has examined this issue in correct prospective and rightly deleted the additions towards disallowances of business, expenditure u/s 37 of the Act made by the AO.
Reasonings and findings of the Ld CIT(A), while granting relief is on proper appreciation of law expounded by the judicial dicta. We do not find any reasons to interfere with the findings of the Ld CIT(A). The appeal of the revenue is liable to be dismissed.
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2024 (12) TMI 33
Estimation of gross agricultural income - calculating the net agriculture income @ 30% of gross income and thus making the addition of the balance amount as unexplained income - HELD THAT:- AO computed the income from paddy at Rs. 9,600/- per acre whereas income from wheat at Rs. 3,600/- per acre. After applying the rate of 30% the net income was estimated at 3,960/- in FY 1999-2000. In our opinion, the said calculation of AO was not based on any scientific formula or facts on record. Therefore, in our opinion, it would be reasonable and fair estimation of net agricultural income if both net profit rate of 45% is applied and 55% is treated as agricultural expenses.
The total agricultural income in respect of 33.75 acre of land would be 5940 x 33.75 = 2,00,475/-. Considering the above facts and circumstances, we are inclined to set aside the order of Ld. CIT(A) and direct the AO to make delete the addition to the extent of Rs. 66,825/- and addition to the tune of Rs. 15,525/- is sustained. The appeal is partly allowed.
Addition in respect of income in the name of Smt. Veena Mishra/wife of assessee - protective addition made in the assessee’s hand - as observed that she was a house wife and did not have any independent sources of income and investment and therefore in his opinion, the income of Smt. Veena Mishra was belonging to Dr. Jagannath Mishra so the income was assessed in the hands of assessee whereas the same was added protectively in the hands of Smt. Veena Mishra - HELD THAT:- Smt. Veena Mishra is an independently assessed to income tax and wealth tax. Besides we also note that the assessee Smt. Veena Mishra is also co-owner of the land and land measuring 4.72 acres belonged to Smt. Veena Mishra out of total family holding of 60 acres.
AO has made the addition in the hands of the assessee only on the basis of presumptions and assumptions without any substantive basis and also without bringing any evidences on record to the contrary to justify the inclusion of the assessee’s income in the husband’s hand.
Therefore, we are not in agreement with the conclusion drawn by the Ld. CIT(A) as the same is based upon in correction assumption and appreciation of facts and accordingly can not be sustained. We would like to mention that this income is to be assessed in the hands of Smt. Veena Mishra. Therefore the addition made, is accordingly, directed to be deleted by setting aside the order of CIT(A). The ground is allowed.
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