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Showing 221 to 240 of 420205 Records
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2024 (11) TMI 1258
Addition u/s 69 - year of assessment - addition u/s 69 would be for AY 2013-14 or AY 2014-15 - assessee submitted different versions of arranging sources for the purchase of this property received from assessee’s husband and relatives - Assessing Officer was not convinced with different versions of sources and justification submitted by the assessee - HELD THAT:- We observed that the assessee has entered into agreement of sale in AY 2013- 14 and made the substantial payment and taken the possession of the property also in AY 2013-14. Ld. CIT (A) has rightly decided that the transaction pertained to AY 2013-14. AO was directed to delete the addition in AY 2014-15.
However, he gave an advice to AO to proceed with the reopening of the assessment for AY 2013-14 as per law. AR objected to the above advice. After considering the finding of ld. CIT (A), we observed that the advice given by him has only advisory value and cannot be treated as direction, therefore, even the ld. CIT (A) has advised so but it has no value for persuasion and it does not partake the value of direction.
Invoking of section 56(2)(vii)(b)(ii) - CIT (A) in AY 2014-15 even though after giving proper finding that the transaction under consideration is pertained to AY 2013-14 merely because the registration of the transaction was made in AY 2014-15 it does not change the character of the transaction and it belongs/pertains to AY 2013-14 only. The provisions of section 56(2)(vii)(b)(ii) of the Act was amended w.e.f. 01.04.2014. The ld. CIT (A) cannot invoke the provisions of section 56(2)(vii)(b)(ii) of the Act on the transactions pertaining to previous assessment year, as held in the case of M. Syamala Rao [1998 (4) TMI 113 - ANDHRA PRADESH HIGH COURT]
Therefore, in our considered view, transaction under consideration pertained to AY 2013-14 and ld. CIT (A) cannot treat this transaction as pertains to AY 2014-15 and also cannot invoke provisions of section 56(2)(vii)(b)(ii) of the Act which was amended w.e.f. 01.04.2014 effective from AY 2014-15. Accordingly, we delete the additions made by ld. CIT (A) by invoking the provisions of section 56(2)(vii)(b)(ii) of the Act.
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2024 (11) TMI 1257
Additions u/s 69C - Bogus transaction - AO concluded that the bills are nothing but a mode to create a paper trail just to camouflage the actual transaction - HELD THAT:- Transporter not only provided the consignment no. but also provided the bill no. as well as the quantity of the consignment. We find that apart from making a general allegation that the bills look non-genuine since most of them are the same, the lower authorities did not point out any infirmity in the detailed documents, as noted above, submitted by the assessee during the assessment proceedings.
Having carefully perused all the details filed by the assessee during the assessment proceedings, which form part of the record, we are of the considered view that the assessee has duly explained the nature of transactions of purchase made from M/s Mint Agro Tech Pvt. Ltd. during the year under consideration. Accordingly, we are of the considered view that the addition made by the AO and upheld by the learned CIT(A) is unsustainable, and thus the same is directed to be deleted. As a result, the impugned order on this issue is set aside and ground no.2 raised by the assessee is allowed.
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2024 (11) TMI 1256
Reassessment proceedings against non existent company - HELD THAT:- Notice u/s 148 of the Act apparently has been issued in the name of the non-existent company. The nonest company could not file the return of income in pursuance of such notice of non-existent company.
It is settled position of law that assessment framed in the name of non-existent company based on enforceable of issuance of notice is of no consequence. We guided by the judgement rendered in the case of Pr.CIT vs Maruti Suzuki India Pvt.Ltd [2019 (7) TMI 1449 - SUPREME COURT] wherein Hon’ble Supreme Court held that the assessment made in the name of Suzuki Power Train India Ltd. is a nullity since the entity has been amalgamated with the Maruti Suzuki India Ltd., an approved scheme of amalgamation and was not in existence at the time of amalgamation.
he assessment framed in the instant case in the name of non-existing company thus, suffers from vice of jurisdictional defect and is not a procedural irregularity which can be possibly cured u/s 292BB of the Act. Revenue appeal dismissed.
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2024 (11) TMI 1255
Denying Registration u/s 12AB - charitable purposes as defined u/s. 2(15) - objects of the Trust are for the benefit/welfare/interest of the members of the association only namely alumni and faculty members of Indus University and not for the benefit of public at large - HELD THAT:- Looking into the objects of the trust, it cannot be held that the assessee/applicant trust has been formed only for the benefit of a particular set of public namely alumni and faculty members of the University. Perusal of the activities carried out by the Trust as reproduced in the table at Paragraph 3 above namely Food Donation, Blood Donation, Women Empowerment, English Learning, Awareness of ecological concept, New Library for the under privileged school children in Tramba Village activities clearly demonstrate that the Trust is not doing a charitable activities only for the alumni members of the Trust but for the general public at large.
We also agree with the Counsel for the assessee that this aspect should be considered at the time of grant of exemption u/s 11 of the Act and the provisions of Section 13 should not be invoked at time of grant of registration u/s 12AA of the Act in the result.
The impugned order is hereby set aside with a direction to CIT(E) to grant final registration u/s. 12AB of the Act.
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2024 (11) TMI 1254
Revision u/s 263 against the reassessment order passed by the National E-Assessment Centre, Delhi, u/s. 147 r.w.s. 144B - Determination of period of limitation - HELD THAT:- The issued dealt with by AO in the re-assessment proceedings and the order passed u/w. 147 and the one dealt in the revisionary proceedings u/s.263 and the order passed thereon by ld. CIT(E) are altogether un-related and different in their character.
CIT(E) has sought to revise the re-assessment order on a subject matter which had not come to the notice of the AO in the re-assessment proceedings since the issue dealt by him as recorded in the reasons to believe was on a different footing. For the issue raised by the ld. CIT(E) to invoke revisionary proceedings u/s.263, it had to necessarily relate to intimation passed u/s.143(1) which falls beyond the bracket of two years prescribed u/s. 263 of the Act. Facts in this respect are undisputed and uncontroverted as narrated above.
We thus, are in agreement with the contentions raised by the ld. Counsel of the assessee.
We draw force from the decision of Lark Chemicals Ltd. [2013 (9) TMI 959 - BOMBAY HIGH COURT] as well as Indira Industries [2018 (6) TMI 840 - MADRAS HIGH COURT] both of which had considered in the case of Alagendran Finance Ltd. [2007 (7) TMI 304 - SUPREME COURT] Accordingly, at the threshold of the jurisdictional issue, relating to impugned revisionary order barred by limitation, we allow the appeal of the assessee and quash the revisionary order passed u/s. 263 of the Act.
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2024 (11) TMI 1253
Claim of exemption u/s 10(23G) - disallowance u/s 14 in respect of exempt income - contention of the assessee that it has more than sufficient interest free funds available for making the investments - HEKD THAT:- As seen from the chart that the assessee has sufficient interest free funds available with it for making the impugned investment. Therefore, the ratio laid down in the case of CIT vs Reliance Utilities & Power Ltd.[2009 (1) TMI 4 - BOMBAY HIGH COURT] & HDFC Bank [2014 (8) TMI 119 - BOMBAY HIGH COURT] squarely apply wherein the Hon’ble Superior Courts have held that, where the assessee has common pool of funds, it has to be presumed that the investment made is out of the interest free funds available with the assessee. While drawing such presumption, availability of interest free funds as on the date of balance-sheet has to be seen.
As decided in South Indian Bank Ltd.[2021 (9) TMI 566 - SUPREME COURT] it will be presumed that interest free funds have been utilized for making the investments and further it is the assessee who has the right of appropriation and also the right to assert from what part of the fund a particular investment is made and, therefore, it may not be permissible for the revenue to make an estimation of a proportionate figure. Contentions of the ld. D/R become redundant.
Depreciation on leased assets - HELD THAT:- We find force in the claim of the assessee. The Co-ordinate Bench in AY 2004-05 [2017 (11) TMI 1839 - ITAT MUMBAI] has considered a similar claim allowed as there is no new lease transaction. The assessee has claimed depreciation on its own fixed assets and depreciation claimed on leased assets were continuing from past tease transactions. Notably, in assessment year 1997-98 Tribunal while deciding the issue had allowed assessee's claim of depreciation.
Addition made u/s 41(4) - assessee has written back bad debts which comprises of cash write back and non-cash write backs - HELD THAT:- We find force in the contention of the ld. Counsel for the assessee. The Coordinate bench in assessee’s own case for AY 2003-04 [2023 (7) TMI 1500 - ITAT MUMBAI] wherein as consistent with the view expressed by the Tribunal in the preceding assessment year as referred to above, we restore the issue to the file of the Assessing Officer for considering afresh.
Amount written off and claimed as bad and doubtful debts - additions were challenged before the ld. CIT(A) and it was strongly contended that the bad debts written off by the assessee during the year under consideration, fulfil all the conditions laid down u/s 36(2) - HELD THAT:- As the claim of the assessee falls under Clause (i), wherein it has been specifically mentioned that debt represents money lent in the ordinary course of the business of banking or money-lending which is carried on by the assessee. In our considered opinion, the contention of the ld. D/R that the ratio laid down by the Hon’ble Supreme Court in the case of TRF Limited [2010 (2) TMI 211 - SUPREME COURT] has been diluted in the case of Khyati Realtors Pvt. Ltd. [2022 (8) TMI 1141 - SUPREME COURT] is not a proper way of interpreting the judgment of the Hon’ble Supreme Court and since the ld. CIT(A) has rightly followed the decision of the Hon’ble Supreme Court (supra), we do not find any error or infirmity in the findings of the ld. CIT(A) which calls for any interference. Accordingly, Ground are dismissed.
Claim of business loss and sales promotion expenses - HELD THAT:- There is no dispute that the loss claimed on sale of assets was in the ordinary course of business. It is also not in dispute that the discrepant notes not accepted by the RBI has to be written off as business loss and similarly, the offers made to credit card customers cannot be said to be for non-business purposes. Considering the facts of the case in totality and on finding that in earlier AYs a similar claim was allowed by the ld. First Appellate Authority, following the rule of consistency, the claim is allowed and the findings of the ld. CIT(A) cannot be faulted with. Accordingly, Ground is dismissed.
Disallowance of club membership fees - HELD THAT:- Hon’ble Supreme Court in United Glass Manufacturing Co. Ltd. [2012 (9) TMI 914 - SUPREME COURT] has held that club membership fees for employees are to be treated as business expenditure of a company under section 37.
Disallowance of loss on investments made in South Asian Regional Apex Fund - said loss was claimed vide revised computation of income filed during the course of assessment proceedings - AO was of the firm belief that the ratio laid down in the case of Goetze India Pvt. Ltd. [2006 (3) TMI 75 - SUPREME COURT] squarely apply and as the said loss was not claimed vide revised return of income, the AO denied the claim of loss - HELD THAT:- When the matter was agitated before the ld. CIT(A), the ld. CIT(A) accepted the view taken by the AO without realizing the fact that the Hon’ble Supreme Court has not put any fetter on the powers of the First Appellate Authority to consider the claim of loss through computation of income - we deem it fit to restore the issue to the file of the AO for examination/verification of the claim of loss as per the provisions of law and deciding the issue accordingly. Accordingly, Ground No. 4 is allowed for statistical purposes.
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2024 (11) TMI 1252
Eligibility for exemption from tax in India or not - Income deemed to accrue or arise in India - UAE authorities choose not to tax the assessee owing to DTAA wherein the capital gains are to be taxed by the UAE - HELD THAT:- As relying on FRATE LINE, DUBAI, C/O PATVOLK, DIVISION OF FORBS GOKAT LTD. [2010 (10) TMI 1259 - ITAT MUMBAI], Shri K. E. Faizal [2019 (7) TMI 598 - ITAT COCHIN] and RAMESHKUMAR GOENKA [2010 (4) TMI 720 - ITAT, MUMBAI] we hold that the assessee is eligible to get benefit of the India-UAE DTAA. Appeal of assessee allowed.
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2024 (11) TMI 1251
Denial of registration u/s 12A - cancelling the provisional registration granted earlier - HELD THAT:- It is the submission of assessee that given an opportunity, the assessee is in a position to file the requisite details as called for by the CIT(Exemption).
We deem it proper to restore the issue to the file of the CIT(Exemption) with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details and decide the issue as per fact and law.
Assessee is also hereby directed to appear before the CIT(Exemption) on the appointed date and file the requisite details without seeking any adjournment under any pretext, failing which the CIT(Exemption) is at liberty to pass appropriate order as per law. Appeal filed by the assessee is allowed for statistical purposes.
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2024 (11) TMI 1250
Denial of deduction u/s 11 - assessee failed to file the return before the due date and secondly audit report in Form-10B was not filed before the due date prescribed in this Act - HELD THAT:- We are of this view that the appellant is entitled to deduction and his claim cannot be denied only on this regard that Form-9A has been filed later on, not with the returned income. The appellant has been able to establish his ground of delay that the trustee responsible for handling tax related matters was hospitalized and he had been suffering from severe illness.
It is also not in dispute that the copy of discharge certificate and doctor's prescription has been filed by the assessee before CIT(E). Accordingly, we condone the delay and the matter is sent back to the file of CIT (E) to pass order as per law. Accordingly, the appeal is hereby allowed. Appeal filed by the assessee is allowed for statistical purposes
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2024 (11) TMI 1249
Addition u/s 68 - Cash deposited during demonetization period - AO was of the opinion that the sum was not deposited in the bank in one go, rather it was deposited in piece-meals in the months of November and December 2016 - HELD THAT:- A careful perusal of the chart furnished by assessee clearly shows that the facts of the case in hand are identical to the facts of the case in M/S. FINE GUJARANWALA JEWELLERS [2023 (3) TMI 1196 - ITAT DELHI].
AO was of the view that cash deposit in every transaction was below Rs. 2 lakhs which was done to avoid application of provisions of section 258BA r.w.r. 114E of the Act, which has no legs to stand as there is nothing on record to prove the same.
AO has not pointed out any flaw, fallacy or deficiency in the regular books of account maintained during the normal course of his business. It is a settled principle of law that once the Assessing Officer accepts the books of account and the entries in the books of account are matched, there is no case for making the addition as unexplained.
Submission of assessee that income of the assessee has to be computed by the AO on the basis of available material on record and it is very important to have direct evidence to make an addition rather than circumstantial evidence.
AO as well as the ld. CIT(A) have based their findings on surmises and conjectures. Moreover, the AO has not examined any party to whom the goods were sold by the assessee and has come to the conclusion that the sales are not genuine, without rejecting the books of account, which is bad in law.
We are of the considered opinion that the AO disbelieved the explanation of the assessee on the basis of presumptions and assumptions and has acted arbitrarily. Appeal of assessee allowed.
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2024 (11) TMI 1248
Disallowing the application of income - denial of benefit of section 11 and 12 - non-filing of form 10B before filing of return - CIT(A) held that the Form 10B has been filed after five months of its filing the return, which was not filed within the time frame outlined in the Act - HELD THAT:- The undisputed fact is that the assessee has obtained audit report alongwith Form 10B prior to filing of return of income. The CBDT vide Circular 3/2020 dated 03.01.2020 and Circular 16/2022 dated 19.07.2022 have mandated condonation of delay upto 365 days for delay in filing Form 10B for AY 2018-19 or for any subsequent AYs.
We direct the AO to admit the audit report with Form 10B and decide the issue afresh as per provisions of law.
We restore the issue to the file of the AO. The assessee is directed to furnish the original documents for verification and the AO is directed to examine the same and decide the issue as per the provisions of law after affording reasonable and sufficient opportunity of being heard to the assessee. Appeal of the assessee allowed for statistical purposes.
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2024 (11) TMI 1247
Taxing of Returned Income of Assessee Trust under "Maximum Marginal Rate" in place of normal rate and levy of interest U/s 234 A, B, C & D - HELD THAT:- In the present case, the appellant trust has claimed to be formed for the purpose of public charitable activities and registered with Devasthan Vibhag under the Rajasthan Public Trust Act 1959 and since 1970, it is regularly filing its return of income. However, no details are provided whether the appellant was granted registration u/s 12AA either before the CIT appeal or before us.
The appellant trust issue of application of tax rate on the return income in absence of Registration u/s 12AA is covered by the decision of Gurjar Pushkarana Vidyotejak Mandal [1987 (12) TMI 60 - ITAT AHMEDABAD-A] wherein held where assessee-trust is not entitled to exemption under section 11 or 12 by virtue of provisions to section 13(1)(b), its income cannot be charged at maximum marginal rate but has to be charged at rates specified for an AOP u/s 164(2). If the provisions of clause (c) or (d) of sub-section (1) of section 13 are attracted, then, the relevant income of the trust has to be taxed at maximum marginal rate.
The provision of Section 164(2) lays down that where relevant income or part of the income is not exempt u/s 11 due to violation of Section 13(1)(c ) or 13(1)(d) of the Act, then in that eventuality tax shall be charged on the relevant income or part of the relevant income at MMR and not that entire income of the trust would be charged to tax at MMR.
In the present case, the entire income declared in the Income Tax return by the appellant Trust is not exempted in absence of registration u/s 12AA. Meaning thereby the income returned shall be chargeable to Tax at normal tax rates as per proviso to section 164(2) of the I.T. Act 1961. In the case of Income Tax Officer vs. Gurjar Pushkarana Vidyotejak Mandal (Supra) the proviso to Section 164(2) is well considered and in our view appellant trust case is squarely covered.
Thus, we don't think it would be relevant to examine whether the appellant trust has violated the provisions of section 13 of the Act as the same has become infructuous in the facts and circumstances of the present case. In absence of registration u/s 12AA, the whole income of the appellant trustee shall be subject to Normal Tax Rate as per proviso to section 164(2) of the Income Tax Ac, 1961 as applicable in the case of AOP. Assessee appeal allowed.
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2024 (11) TMI 1246
Disallowance on account of payment exceeding the limit specified u/s 40A(3) - HELD THAT:- We are of the considered view that payment made in excess of the limit prescribed u/s 40A(3) are to be examined keeping in view the exigencies of the business run by the Assessee. In case such expenses are must for running the business and the Revenue has no doubt about the identity of the payee and the genuineness of the transactions, disallowance on such occasion is not required. In the given case, the Assessee is having the business of event management and the excess as shown by the Counsel of the Assessee may be necessary to run the show, therefore, in this situation, and in our opinion, the addition made by the AO and sustained by the CIT(A) on this account cannot be sustained. Accordingly, the Assessee’s appeal on this issue is allowed.
Disallowance of deduction claimed u/s VI-A - claim made in returns filed in response to notice u/s 153 A/B/C - HELD THAT:- We are of this considered view that the issue decided in the case of ‘CIT vs. Sun Engineering Works’ [1992 (9) TMI 1 - SUPREME COURT] is not applicable on claim made in returns filed in response to notice u/s 153 A/B/C. Accordingly, the findings given by the CIT(A) on this issue cannot be sustained and, thus, the appeal filed by the Assessee on this issue is allowed.
Disallowance of credit of TDS - as per CIT(A) credit of TDS is to be given only with regard to the TDS deducted in appellant’s name during the year under consideration and further restricted to the business income from the case assessed in appellant’s hand - HELD THAT:- We are of this considered view that it is only the Assessing Officer who can calculate the refund of TDS to the appellant ( in case applicable) as per the provisions of the Income Tax Act, 1961. Accordingly, we direct the Assessing Officer to calculate the amount of refund to be given to the appellant as per the provisions of the I.T. Act. Accordingly, this ground stands allowed.
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2024 (11) TMI 1245
Difference/variation in sales/turnover shown in ITR and GST Returns - Assessee is following “project completion method” consistently - “whether the Assessee is entitled to follow the project completion method as per its own choice or not”? - HELD THAT:- Coming to the instant case, admittedly, as the Assessee is consistently following the project completion method, and therefore there was no logic or plausible reason to discard the accounting method being continuously followed by the Assessee, hence the action of AO in rejecting the project completion method followed by the Assessee and applying “percentage completion method” is un- sustainable and contentions raised by the Ld. DR in support of decision of AO qua this aspect, are untenable and hence the same are rejected and ‘project completion method’ approved by the Ld. Commissioner is sustained.
In the instant case, the admittedly Assessee out of 228 flats, has entered into agreements to sell of 24 flats only, which is admittedly 10.5 % only. The Assessee has also been able to demonstrate that though the project of Assessee consists of 23 storey residential building which is saleable, however, during the assessment year under consideration it has completed 1st slab only and thereafter the project was/is on hold owing to certain legal impediments and financial difficulties, as appears from the letter of the bank (supra) whereby the Bank has declared the loan availed by the Assessee as NPA and therefore the Assessee during the assessment year under consideration, has completed 10% of the project/saleable building only and few clients have made agreements to sell but not the sale deeds and therefore, the parameters/conditions as prescribed for application of “percentage completion method” though not admitted but even otherwise has not being achieved.
On the aforesaid analyzations, we are of the considered view that even otherwise for the sake of argument though submitted but not admitted by the Assessee, still the Assessee has not achieved the minimum threshold to declare the revenues received and therefore contentions raised by the Ld. DR that the Assessee has completed 38.71% of its project and therefore the Assessee would have recognized the revenue under the percentage completion method and/or thus the Ld. Commissioner had erred in concluding that only 10% of the project has been completed, are also untenable, hence rejected.
Payments qua Commission/Brokerage Expenses - DR claimed that because the Assessee has paid the brokerage commissions and therefore, it should have recognized the revenue received - HELD THAT:- We observe the AO proposed the addition on this count and in response to that, the Assessee by filing its reply has claimed that it had appointed Indiabulls Distribution Services Limited (IDSL) as a "Marketing Agent on Commission Basis" during the AY under consideration, to act on behalf of the Assessee. IDSL had a monopoly to sell flats to the various customers, as it appears from the copy of Agreement with IDSL. Whatever the commission paid to IDSL was, as per the Agreement and not on the basis of sales of TDR during the year. The Assessee also provided the copy of Ledger Account and details/invoices of commission paid through NEFT/Cheque/RTGS.
We observe that the aforesaid reply/claim of the Assessee has duly been considered by the AO and accepting the same as correct, admittedly no addition on this count was made by the AO.
Even otherwise in view of judgment of DLF Universal Ltd. [2015 (4) TMI 981 - DELHI HIGH COURT] by the Hon’ble High Court of Delhi, the expenses incurred on brokerage and commission in terms of agreement entered into with IDSL, are allowable in full in the year, in which the same were incurred. In our view, just on the reason that the Assessee has paid the commission and brokerage amount during the year under consideration, the percentage completion method cannot be applied. On the aforesaid analyzations, the present contention raised by the ld. DR is also not tenable.
Differences between sales shown in the GST return and Income Tax Return - We are in concurrence with the contention of the Ld. Sr. Counsel that different statutes such as GST Act and the Income Tax Act as applicable to the instant case, are having their own parameters and cannot be equated with each other. As in the CGST Act, the consideration which is received or receivable is supposed to be disclosed, as it appears from the definition and therefore in compliance to the terms of GST Act, the Assessee has shown the amount received or receivable and paid the relevant taxes as per CGST Act accordingly. Whereas for the income tax purposes, as the Assessee has been consistently following the project completion method and therefore treated the consideration received on account of flats sold, as advances as current liabilities, but not as sales/turnover. Hence, in our considered view, the difference between the turnover shown in GST Return and ITR has been properly reconciled by the Assessee before the authorities below, as well as before us and therefore addition made by the AO on this aspect, at all is not sustainable and therefore has rightly been deleted by the ld. Commissioner.
Consequently, on the analyzations made above, the decision of the Ld. Commissioner in deleting the addition under consideration is sustained and the appea filed by the Revenue Department is dismissed.
Disallowance of architect and professional fee - Assessee has not furnished copies of bills/vouchers of payment and ledger accounts of the parties, details of the genuineness of the transactions as well as PAN details and addresses of many parties as wrong and has also not furnished any details qua TDS deducted - HELD THAT:- It is admitted fact that the assessment proceedings were carried out during the covid-19 period, when the entire Nation was on hold and therefore the reasonable cause for not submitting the relevant documents before the AO cannot be ruled out and thus, we are inclined not to take any adverse view. As the Assessee has rectified its mistake by filing appropriate document and/or willing to rectify its mistake, therefore in our considered view, the real adjudication of the issue under consideration would take place. Hence, for the substantial justice and proper decision of the issue under consideration, we are inclined to remand the instant issue to the file of the AO for decision afresh, suffice to say by affording reasonable opportunity to the assessee to substantiate its claim by producing relevant documents and reply/clarification, requires if any, by the AO.
Disallowance u/s 40(a)(ia) - disallowance qua transportation charges paid to the transporters - As observed above by us that admittedly the assessment proceedings were carried out during the covid-19 period, when the entire Nation was on hold and therefore the reasonable cause for not submitting the relevant documents before the AO cannot be ruled out and thus, we are inclined not to take the adverse view. In our considered view, the documents submitted by the Assessee qua transporters appear to be essential and important for adjudication of the issue involved. And the amount involved qua four transporters out of above eight is substantive and therefore the Assessee by filling the relevant documents qua such 04 transporters, justified its claim as bonafide and reasonable. It is the mandate of the Law that the income tax is chargeable or payable on the Real income but not otherwise, thus, considering the facts in totality, we deem it appropriate to remand the instant issue under consideration as well, to the file of the AO with a direction to decide afresh.
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2024 (11) TMI 1244
Classification of imported goods - Clear Float Glass (CFG) - to be classified under Tariff Item 7005 10 90 or under CTH 7005 2990 of the Customs Tariff Act (CTA) or not - benefit of exemption under Sl.No.934 (I) of Notification 046/2011-CUS dated 01.06.2011 -
As decided by CESTAT [2023 (11) TMI 485 - CESTAT KOLKATA] Clear Float Glass imported by the appellant are absorbent and having non-reflecting layer, in that circumstances, the appellant has qualified the merit classification under CTH 7005 1090, therefore, the correct classification of the Clear Float Glass imported by the appellant under the impugned Bills of Entry is classifiable under CTH 7005 1090. Consequently, the appellant is entitled for benefit of Serial No.934 (I) of Notification No.046/2011-CUS dated 01.06.2011.
HELD THAT:- Issue notice on the application seeking condonation of delay as well as on the Civil Appeal(s). Application for stay is dismissed.
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2024 (11) TMI 1243
Classification of ‘BAYLAN’ branded water meters - Tariff Item No. 9026 10 10 subject to ‘nil’ rate of Customs duty v/s Tariff Item No. 9028 20 00 subject to pay Customs duty at the rate of 7.5% - HELD THAT:- On going through the parameters set by the Indian Standards [IS 2401:1973 and ISO 4064] we find that all these parameters are required to be followed for import of ‘water meters’.
From the brochure submitted by the Appellant, it is clearly seen that the equipment pertains to water meters only. When the factual details and the documentary evidence produced very clearly point out that the goods are water meters only, we do not see the reason as to why the lower authorities have ignored these documentary evidence and taken the view that the goods would be classifiable under the heading 9028.
Therefore, we set aside the impugned order and allow the appeal on merits. The Appellant would be eligible for consequential relief, if any, as per law.
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2024 (11) TMI 1242
Levy of penalty - Customs Broker - Import w/o payment of Customs duty under Advance Authorization - sale of consignments on High Sea Sale basis - confiscation of goods when any goods do not correspond in respect of value or any other particular - On the basis of information received from the DRI, Pune that the imports made by M/s Blazeing Star Trade Pvt. Ltd. under Advance Authorization appears to be suspicious, enquiry was initiated and on being reported by CGST, Dehradun that the said importer firm is non-existent at the declared address
Whether the Appellant and its proprietor are liable to pay penalty u/s 112(a)(ii) and 114AA of the Act, respectively, along with redemption fine on alleged premise that the Appellant in connivance with High Sea Buyer i.e M/s Blazeing Star Trade Pvt. Ltd. facilitated the import of PVC resin to non-existent entity i.e Blazeing Star on the basis of fake Advance Authorisation and GST certificate and whether penalty under Section 117 of the Customs Act is imposable on M/s Saarthee Shipping Co. (Custom Broker)? - HELD THAT:- We find that Appellant and Blazeing Star entered into a High Sea Sales agreement wherein Blazeing Star imported the said goods vide Bills of Entry No. 5440564 dtd. 14.09.2021 under Advance Authorisation and another Bill of Entry No. 5548138 dtd. 22.09.2021 without duty under Advance Authorisation.
After the investigation, revenue alleged that Blazeing Star is fictitious and non-existent entity. Appellant vide its letter dtd. 17.01.2022 and 18.02.2022 requested to cancel the High Sea Sales Agreement and requested to allow to amend the Bill of Entry dtd. 14.09.2021 and 22.09.2021.
Deputy Commissioner of Customs House, Mundra vide letter dtd. 07.06.2022 accepted the request of the Appellant and directed them to make payment of duty, execution of Bond/ Bank Guarantee etc., and on payment of duty and on furnishing of Bond/Bank Guarantee, the Bills of Entry were amended. The said goods were released provisionally, and value was reduced on account of deduction of 2% High Sea Sales charges.
We find that by allowing amendment, obviously under Section 149, the authority had no rationale to deny having allowed said amendment under Section 149. In the present matter in terms of Section 149 of the Customs Act, the importer’s name was substituted in the Bill of Entry and department allowed him to clear the imported goods with payment of customs duty without taking benefit of disputed advance authorization. So after allowing such amendment the Department had no ground to confiscate the goods and impose fine and penalty.
The revenue has not challenged the said amendment. Further we also find that Revenue did not appeal against the order passed by Original Authority under Section 149 of Customs Act, 1962, allowing the amendment to the Bills of Entry. Section 111(m) deals with confiscation of goods when for any goods information given is not correct in respect of value or any other particular, however after amendment in Bills of Entry, in the present disputed matter, there is no mis-declaration in Bills of Entry. After the amendment, the goods in dispute are not imported under Advance Authroization and there are no discrepancies in relation to value, quantity of the goods. In these circumstances, we find no reason to sustain the confiscation of goods and imposition of penalties on Appellant.
We also find that appellant has, prior to issuance of show cause notice dtd. 17.05.2023, deposited the entire duty, without taking benefit of Advance Authorization, alogn with interest. This shows that the intention of Appellant was always bona fide. Further revenue has not brought any evidence to show that the Appellant in any way abetted Balzeing Star in importing the said goods under fake Advance Auhorisation or that the Appellant was aware about the fictitious nature of Blazeing Star. Further it is also not the case of the revenue that the Appellant had any stake in the firm or business of Blazeing Star.
It is also not the case that the Appellant –Proprietor had any connection with Blezeing Star. Importantly, the Appellant on realising that the original importer may be fictitious, paid entire duty along with interest. We also agree with the argument of Ld. Counsel that for imposition of penalty mens-rea has to be established about the wrongful act. In the present case, the only document made/signed by the Appellant are High Sea Sales agreements which are not alleged to be fake/incorrect.
From the plain reading of Section 114AA it is evident that penalty under this section can be imposed on a person who intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular for the transaction of any business under the Customs Act, 1962.
In the present case nothing has been brought on record by which it can be said that the appellant had made or caused to be made any declaration/used or caused to be used any statement or document which is false or incorrect. No document etc., which has been produced by him was found to be materially wrong. As the ingredients for invocation of provisions of Section 114AA are absent in the present case penalty under the said section is not justified.
As it is clear, penalty under Section 117 are for contravention, not expressly mentioned. But, there should be sufficient evidences to show mala fide intention resulting in contravention of any provisions warranting penalty. There is no material on record to conclude that the appellant facilitated misdeclaration of imported goods. Penalty under Section 117 of the Customs Act, 1962 can be imposed only if abetment on the part of the appellant is brought out which means that the appellant should have knowledge or reason to believe that the provisions of the Customs Act relating to correct valuation of the goods were being contravened. No such evidence is forthcoming; therefore, penalty upon the appellant cannot be sustained. Further in the present matter being a customs broker appellant only performing his duties. He is not aware about the fictitious status of High Sea Buyer. We do not find any justifiable ground to impose penalty on the Appellant.
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2024 (11) TMI 1241
Undervaluation of imported goods - reliability of statement of the co-accused - Penalty on the appellant u/s. 112(a)(i) & 112(a)(ii) the Customs Act, 1962 and another penalty u/s. 114AA of the Customs Act, 1962 - as alleged for the purpose of clearing the disputed consignments, Appellant/Superintendent of Customs, SIIB, Mundra had demanded gratification - as alleged Appellant, Superintendent, working then at SIIB, Customs House, Mundra had deliberately misguided his superior officer to aid in clearance of subject consignment illegally and that he handed over customs file to a private person and used a fabricated panchnama in clearance of goods
HELD THAT:- We find that in the impugned order, the Ld. Commissioner noted that Shri Ankit S. Travadi has affirmed in his statement that he offered amount to accused Customs officers for clearances of disputed goods and he was also actively involved in negotiation with the Customs Officers. The amount is seen to have been arranged through Anagadia and had reached Mundra. In addition to the statement of Shri Mayur Mehta, Shri Ankit Travadi, Shri Chirag Taavadi and Shri Nasir Khan, there are some Audio clips/voice message retrieved from the mobile phone of Shri Nasir Khan which show that Shri Nasir khan and Shri Mayur Mehta sent big amount of illegal gratification to the Customs Officers at Mundra.
We find that in the present matter even after the request of appellant for cross-examination of these persons/witnesses and panchas, were not offered. In such circumstances we find that their statements are not reliable evidence against the Appellant.
The adjudicating Authority has not examined the persons who have given the statements which have been relied upon to implicate the appellant. Also, no opportunity of cross-examination was given to the appellant to question the basis on which the co-accused has implicated the appellant in this case. When the procedure set out in Section 138B is not followed, the statement of the co-accused has no evidentiary value. Also, in this case the statement of the co-accused has not been corroborated by any other evidence.
Except the bald allegation that Appellant had demanded illegal gratification, there is no specific allegation against the appellant to prove that Appellant have done or omitted to do any act which itself rendered the goods liable to confiscation. We also observed that as evident from show cause notice, Shri Ankit S. Travadi reiterated in his statement dtd. 29.09.2017 recorded u/s 108 of the Customs Act, 1962 that the amount of Rs. 8 lakhs arranged through angadia and collected by his younger brother Chirag from Bhuj; that the said amount was given by him to Shri Rajdeep Sinh and Shri Vaibhav Dholakia from whom he had borrowed earlier. Shri Rajeepsinh Jadega and Shri Vaibhav Dholakia have in turn confirmed this fact in their respective statement dtd. 01.11.2017. None of these persons has ever stated that they have paid any money to Appellant.
We find that for Customs Act, irrespective of the fact whether the person is an officer of Customs or any other person, penalty for an offence of abetting can be imposed only on establishing a positive act on abetment of another person’s act or omission which will make the connected goods liable for confiscation. On careful consideration of the evidence on record and submission made by the appellant, we find that there is no sustainable ground to impose penalties u/s 112 on the appellants in the present case.
We also find that section 114AA (supra) is attracted when a person knowingly or intentionally makes, signs or uses or causes to be made, signed or used, any declaration, statement or document which is false or incorrect. Needless to mention that when the appellant had no personal interest in the transaction or that the charge of demand of illegal gratification fails, then automatically it is concluded that there was no knowledge or intention on part of the appellant. Therefore, no penalty could be imposed on the appellant u/s 114AA also.
Thus, it is difficult to uphold the orders passed by the Ld. Commissioner imposing penalties on the Appellant.
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2024 (11) TMI 1240
Refund claim for refund of 4% SAD paid on the imported goods under 48 bills of entry - partial rejection of refund for three bills holding that two Bills of Entry were time-barred and one Bill of Entry was rejected as the duplicate copy of Bill of Entry and original copy of TR6 challan were not submitted - HELD THAT:- From the facts of the case it is seen that the appellant received OIO 14284/2011 dated 25.01/2011 which was unsigned. An un-signed document looses its efficacy.
As in SRK Enterprises Vs Assistant Commissioner (ST) [2023 (12) TMI 156 - ANDHRA PRADESH HIGH COURT], held that an unsigned order cannot be covered under any provision of law dealing with mistake, defect or omission therein, hence affecting the validity of the order and set aside the same with direction to the Competent Authority to pass fresh order in accordance with law.
In the present case find that a signed order was subsequently issued on 30/11/2011 whereas the appeal was filed on 16/02/2012 involving a delay of 18 days which is within the condonable period as per proviso to Sec. 128 of the Customs Act, 1962. We, feel that the ends of justice would be served by remanding the matter back to the file of the Ld. Commissioner Appeals to be decided afresh on merits.
The appeal is hence allowed by way of remand to the Ld. Commissioner Appeals, Custom House, Chennai, for a decision on merits and is disposed of accordingly.
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2024 (11) TMI 1239
Classification of waste arise from the pulses - Classifiable under 2302 5000 as claimed by the department or under chapter heading 0713 as claimed by the appellant - HELD THAT:- From the plain reading of the chapter heading 2302, it is found that the same is applicable for the goods such as Bran, Sharps and others residues whether or not in the form of palates derived from the sifting, milling or other working cereal or of leguminous plants. That means it applies to the goods namely, cereals of leguminous plant.
In the present case the waste arise from the pulses and pulses are not covered either as cereals or leguminous plant. Therefore, on this basis, it is clear that the appellant’s product being a waste arise from the pulses does not cover under the tariff heading 2302. It is a settled legal position that irrespective of the position whether the assessee’s claim of classification is right or wrong but if the classification proposed by the department fails than the entire proceeding is vitiated and no consequential demands will sustain.
Therefore, in the present case, since, it could not be established that the goods in question is classifiable under tariff heading 2302. The impugned order is not sustainable.
Classification of goods i.e. waste of pulses under 0713 - The entry of the same reads as “DRIED LEGUMINOUS VEGETABLES, SHELLED, WHETHER OR NOT SKINNED OR SPLIT”. We find that as against the cereal and vegetable plants, the goods is appropriately classifiable as dried leguminous vegetables. Therefore, in our considered view, we hold that the appellant have correctly classified the goods under 0713.
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