|
Advanced Search Options
Case Laws
Showing 661 to 680 of 420402 Records
-
2024 (11) TMI 962
Order of assessment in excess of jurisdiction vested in the AO in relation to Limited Scrutiny - additions made by the AO were not subject matter of limited scrutiny - HELD THAT:- We observe that undisputedly the case of the assessee was selected for scrutiny for examination and verification of large cash deposits during the impugned financial year. However, upon verification of facts by the ld. AO during the course of assessment proceedings, the AO did not make any addition after verification of Bank accounts towards large cash deposits. However, he made two additions of Rs. 1,02,17,061/- on peak credit of unexplained deposits which were not on account of cash deposits and second in respect of under misreporting of income of Rs. 34,43,814/- as per Form 26AS.
It is pertinent to state that during the course of hearing, AO noticed that the assessee has deposited Rs. 1,73,10,349/- in Canara Bank account out of which cash deposit was of Rs. 4,01,390/- whereas credit entries of Rs. 6,26,597/- in ICICI Bank account were there out of which cash deposit was of Rs. 96,565/- during the financial year. We note that the assessee did not comply with the show-cause notice issued by the ld. AO and finally ld. AO framed the assessment under section 144 of the Act vide order dated 19.12.2019 making two additions as stated above.
Therefore, it is abundantly clear that the additions made by AO were not in respect of the issue, which was the subject matter of the limited scrutiny as is apparent from the notice issued under section 143(2) of the Act dated 10.08.2018 and the AO passed the assessment order by making the above said additions without converting the limited scrutiny into complete scrutiny in terms of Circular issued by CBDT bearing No. 3/2017 dated 21.02.2019. In our opinion, the said additions made by the ld. Assessing Officer are without jurisdiction and cannot be sustained.
The above issue is also covered by the decision of Vudatha Vani Rao [2024 (6) TMI 63 - ITAT VISAKHAPATNAM] wherein the issue has been decided in favour of the assessee by holding that the additions made in the assessment order, which were not subject matter of the limited scrutiny, are beyond the jurisdiction of the ld. Assessing Officer and therefore, have to be deleted. Appeal of the assessee is allowed.
-
2024 (11) TMI 961
Assessment of trust - addition as anonymous donations u/s 115BBC - donation remained unverified due to donation denied by the persons, insufficient address and no reply received from the donors - HELD THAT:- As decided in Shri Dadasaheb Gawai Charitable Trust [2024 (7) TMI 836 - ITAT NAGPUR] anonymous donations are concerned, the assessee maintained the record of the identity and address of the persons who are making contribution and other particulars and, therefore, provisions of section 115BBC of the Act are not applicable. In the present case, the assessee has maintained identity of the donors i.e., complete details such as name, address, PAN card details, Aadhar details and, hence, provisions of section 115BBC of the Act are not applicable to the assessee Trust. We find that the assessee has given all the details of the donors including names, address, PAN card details, Aadhar details, etc. Thus, the assessee discharged onus casted upon it by producing all the details before the AO.
AO without following the procedure and without providing proper opportunity to the assessee, doubted the genuineness of the donations and invoked the provisions of section 115BBC of the Act, which is not correct. CIT(A) after considering all the facts and explanation given by the assessee, deleted the addition. We find no infirmity in the order passed by the learned CIT(A).
Addition being unspent grant shown in the Balance Sheet, but not shown as income in the Income & Expenditure Account - HELD THAT:- As Tied–up grants are not voluntary contribution and cannot be considered as “Income”. Form no.9A, is required to be filed under rule 17(1) of the Income Tax Rules, 1963. The requirement to file Form no.9A, arises only when application falls short of 85% of the income derived from the property held under the Trust.
Once it is held that grants received under certain stipulated conditions, is not income, there is no requirement to file Form no.9A. Acquiescence on the part of the assessee cannot be held against them as there is no estoppel against the statute. So, the Assessing Officer had fallen under wrong premise to add which has been correctly deleted by the learned CIT(A) and such order needs no interference at our end. Accordingly, grounds no.1 & 2, raised by the Revenue are dismissed.
-
2024 (11) TMI 960
Reopening of assessment u/s 147 - Reason to believe or review/verification - case reopened purpose of verification of the source of purchase of the property - HELD THAT:- It is now well settled that no re–assessment can be done just to make an enquiry or verification and in support of this, we rely on Chapter–VI of the publication issued by the All India Federation of Tax Practitioners viz. Re–assessment Law, Procedure & Practice (Practical Guide) on the issue of “No Re–assessment Just To Make An Enquiry or Verification”.
Hon’ble Bombay High Court in Nivi Trading Ltd. v/s Union of India [2015 (4) TMI 411 - BOMBAY HIGH COURT] has categorically held that the re–assessment under section 147 of the Act cannot be done solely for the purpose of verification.
Re–opening was done only for the purpose of verification of the source of investment in the property, which is also evident from the reasons so recorded by the AO and also reproduced herein above. Relying upon the aforesaid judicial propositions, which categorically held that the re–opening cannot be done for verification, therefore, we hold that re–opening of assessment is invalid and accordingly the consequent assessment also becomes invalid, unjustified and bad–in–law. Accordingly, the re–opening of assessment by the AO and confirmed by the CIT(A) is hereby quashed for the reasons stated herein above. Since the re–opening itself is quashed, the corresponding assessment order does not survive as well. Thus, the assessee succeeds in ground no.1.
-
2024 (11) TMI 959
Penalty u/s 271(1) - concealed income representing quantum addition of unexplained cash credits - HELD THAT:- Revenue’s foregoing vehement contention and find no reason to accept the same. This is for the precise reason that the assessee had filed all the relevant details and supportive evidence which ultimately failed to evoke the assessing authority’s concurrence.
We quote CIT v. Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] that quantum and penalty proceedings are parallel proceedings wherein each and every addition/disallowance made in the course of former does not ipso facto attract the latter penalty provision, to delete the impugned penalty in very terms. Assessee’s appeal is allowed.
-
2024 (11) TMI 958
Unexplained investment u/s 69 from the Assessee's business capital - Assessee has withdrawn capital from the business of the Assessee who was engaged in the business of Straw (Bhus) for long time and the Assessee has shown income u/s 44AD - HELD THAT:- Assessee has shown the income u/s 44AD of the Act and in the year under consideration and the Assessee has shown turnover of Rs. 18,35,000/- and declared the income of Rs. 2,50,000/- from the aforesaid business which has been accepted by the AO. The explanation given by the Assessee was that out of the withdrawn of his capital, the investment has been made. To substantiate the same, the Assessee has produced capital account and also statement of affairs which has not been considered by the lower authorities.
Since, the Assessee has done the business in cash, it cannot be ruled out the availability of cash with the Assessee. Though, the Assessee has shown turnover of Rs. 18,35,000/-, CIT(A) observed that Assessee has marginal income.
We are of the opinion that there is every chance of accumulation of cash from the earlier years, therefore, Assessee having availability of cash in hand which can be corroborated with capital account and statement of affairs for three years.
Thus relying on the order of case of Mansukh K. Vaghasia [2022 (4) TMI 848 - ITAT SURAT] we delete the addition made u/s 69 of the Act.
Addition on account of unexplained investment u/s 69 - Assessee contended that the said amount was invested by the wife of the Assessee and the same has been added in her hand by the AO u/s 143(3) substantially and made the present addition on protective basis in the hand of the Assessee - Assessee further submitted that the addition made in the hand of the wife of the Assessee has been accepted and the tax has been duly paid by the wife of the Assessee - HELD THAT:- As the substantial addition made in the hand of the Assessee’s wife has been claimed to have been accepted and due tax has been paid, the protective addition made in the hand of the Assessee does not survive. Accordingly, the protective addition made in the hand of the Assessee on protective basis is hereby deleted.
Appeal of the Assessee is allowed.
-
2024 (11) TMI 957
Notice u/s 143(2) issued by non jurisdictional AC/DC - notice issued by officer who did not have the authority over the assessee - HELD THAT:-Notice u/s 143(2) is the jurisdictional notice and any inherent defect therein is not curable. In the present facts of the case, after considering the instruction No.1/2011 cited notice u/s 143(2) dated 04/07/2017 having been issued by an Income Tax Officer who had no jurisdiction over the assessee, such notice in our view has not been issued validly and is issued without authority in law.
Revenue also could not controvert the same by submitting any other Notifications/Circular/Instruction to this effect. As per the Instruction No.1/2011 dated 31.1.2011 by the Board as in the present case, the total income declared by the assessee is Rs. 59,29,270/- for the assessment year 2016-17 and therefore, the notice ought to have been issued by ld. AC/DC himself instead of transferring the same to the ITO, Ward-1(2)(1) in consequence to JCIT’s Notification Order u/s 120(5) of the Act dated 27/08/2018. In the present case, the ITO, ward-1(2)(4), Bangalore had issued the notice U/s 143(2) on 04/07/2017 & thereafter the case was transfer from ACIT, Circle- 1(2)(1), Bangalore on 29/08/2018 consequent to ld. JCIT’s Notification Order U/s 120(5) of the Income Tax Act dated 27/08/2018. Therefore the notice issued U/s 143(2) of the Act dated 04/07/2017 is illegal, bad in law & without jurisdiction.
We set aside the order of the revenue authority by quashing the order of the assessment framed u/s 143(3) of the Act dated 26/12/2018 since the issue of notice u/s 143(2) of the Act dated 04/07/2017 was not issued by the jurisdictional ld. AC/DC as specified in the CBDT Instruction No.1/2011 dated 31.1.2011 which is not a curable defect. Hence, the additional ground raised by the assessee is allowed.
-
2024 (11) TMI 956
Jurisdiction of ITAT at Delhi to entertain an Appeal - Order of AO who framed the assessment is situated in the State of West Bengal and assessee is situated in Delhi - HELD THAT:- Since the impugned assessment order is passed by the Assessing Officer situated at Kolkata, the present appeal of the revenue before Delhi Tribunal is not maintainable in view of the decision of ABC Papers Ltd. [2022 (8) TMI 863 - SUPREME COURT] wherein it settled the law that it is situs of the Assessing Officer which forms the clinching factor for exercising the appellate jurisdiction. Hence the Delhi Tribunal does not have power to adjudicate this appeal as the Assessing Officer was located in the State of West Bengal. Hence we dismiss the appeal of the revenue as not maintainable with liberty given to the revenue to approach the appropriate Bench by filing a fresh appeal together with a delay condonation petition.
-
2024 (11) TMI 955
Income deemed to accrue or arise in India - assessee having business connection in India and the LO was treated as PE of the assessee in India - onus to prove - assessee is a US based company engaged in the business of supplying goods from outside India. The assessee is a wholly owned subsidiary of a General Electric Company and made offshore sale of goods and offshore sale of software and related support services to its various customers in India - as argued assessee has no PE or DAPE in India - HELD THAT:- Relevant documents were placed before the AO by the assessee to substantiate its claim of having no LO in India, the onus shifts on the Revenue to prove otherwise. The AO has made no effort to examine claim of the assessee and to check the veracity of documents furnished during the assessment proceedings. The Tribunal sought remand report from the AO in September 2023. Six weeks time was given to the AO to furnish the report.
AO furnished the report in December 2023, the said report is stated to be based on the information provided by the assessee. AO had also expressed his helplessness in providing the said report without complete verification due to paucity of time. We do not agree with the Revenue/AO on the excuse of time limitation in furnishing the report. This appeal is taken up for hearing after almost 10 months from the date of furnishing report.
If, the AO had something more to add to the report dated 19.12.2023 or had any contrary material to rebut the contentions of the assessee, the AO could have very well furnished the same by way of supplementary report. The AO has not placed on record any material whatsoever to rebut contentions of the assessee with regard to closure of LO operations and no expatriate employees in India during the relevant period. The closure of LO operations in India result in paradigm shift in taxability and attribution of profits in India. With the closure of LO operations in India, the assessee will have no PE or DAPE in India.
Revenue has not placed on record any material to show that even after closure of LO operations, the assessee still has business connection that can be termed as PE or DAPE in India. In light of above, we find merit in the case of assessee.
We have no hesitation in holding that the assessee has no PE in India during the impugned AY, hence, question of attribution of profits to PE in India does not arise. In the result, ground no. 1 to 11 of appeal are allowed.
Holding receipts from supply of software in India as ‘Royalty’ - We find that in the assessment order the AO has treated the receipts from sale of software as royalty under the provisions of section 9(1)(vii). The assessee raised objections before the DRP, the DRP directed the Assessing Officer to verify the records and, if, software supplied by the assessee is found to be embedded in hardware itself, the addition on account of royalty income was directed to be deleted. We find that the AO without complying with the directions of the DRP reiterated the findings given in draft assessment order and treated the receipts from software & related support as Royalty.
This issue was also considered by the coordinate Bench in assessee’s own case in the preceding assessment years i.e. AY 2012-13, 2014-15 & 2015-16 [2022 (3) TMI 1209 - ITAT DELHI] as held amounts paid by resident Indian end-users/distributors to non-resident computer manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the pay of royalty for the use of copyright in the computer software, and that same does not give rise to any income taxable in India, as a result of the persons referred to in section 195 were not liable to deduct any TDS u/s 195 - Decided in favour of assessee.
-
2024 (11) TMI 954
GST amount considered for the purpose of computing presumptive income u/s. 44B - Applicability of Section 145A in computing deemed income under Section 44B - HELD THAT:- Section 44B is a special provision for computing profits and gains of shipping business in the case of non-residents. Prior to insertion of Section 44B, taxable profits of foreign shipping enterprises were determined by suitably apportioning their global profits between their Indian business and foreign business or on the basis of "voyage accounts" which led to difficult and complicated issues in assessments. With a view to simplifying and rationalizing the assessments in such cases, Section 44B was inserted for computing profits and gains of shipping business in the case of non- residents at 7.5% of specified amounts. Insertion of Section 44B substituted computation as per normal provisions in which both debit of expenses and credit of income were considered.
Interpretation of Section 145A inserted by the Finance Act 2018 with retrospective effect from 01/04/2017 on the issue of applicability of income computation and disclosure standards - Ergo, amendment to Section 145A was to include taxes of cost of sales / services for valuation of inventory to align with ICDS-2 and nowhere it can be inferred that it tantamount to change the computation mechanism on presumptive basis of taxation. Earlier Section 145A was inserted to bring clarity with the method of accounting for valuation of purchase and sale of goods and inventory, to determine business income.
Section 145A of the Act takes into consideration "valuation of sale or purchase of goods/services and of inventory", whereas Section 44B (2) considers specified amounts i.e. "amount paid or payable on account of the carriage of goods shipped at any port in India" and "amount received or deemed to be received on account of the carriage of goods shipped at any port outside India. The terms amount paid or payable' and 'amount received or deemed to be received mentioned under Section 44B cannot be replaced with the term 'valuation' in the absence of any specific enabling provisions under Section 44B or Section 145A of the Act or any other provisions of the Act. For instance, Section 50CA is a deeming provision which enables replacement of consideration with 'fair market value' where the amount of consideration is less than the fair market value determined in a prescribed manner.
Thus, in our view adding GST component to the deemed income which has to be computed directly on specified amounts i.e. amount paid or payable on account of carriage of goods shipped which is revenue element only. For the earlier regime of service tax prior to GST, there were various judicial precedents which upheld exclusion of service tax while computing the provision u/s. 44B or other similar provisions.
Full Bench of Hon’ble High Court of Uttarakhand in case of DIT v. Schlumberger Asia Services Ltd [2019 (4) TMI 1177 - UTTARAKHAND HIGH COURT] held that service tax paid earlier by the assessee to Government of India is not on account of provision of services in connection with exploration and production of mineral oil, hence would not form part of aggregate taxable amount referred to in clauses (a) and (b) of sub-section(2) of section 44BB.'On perusal of the comparison of the relevant provision of service tax law and GST law it can be seen that both are indirect taxes and is recovered by the service provider on behalf of assessee and as an agent of the Government as such rates are specified and thus, the provision under the service tax law are similar to provision of GST law and therefore, in our opinion the judicial precedents delivered in respect of erstwhile tax law would apply mutatis mutandis to the GST laws also.
GST being a mandatory 'statutory levy’ cannot be said to be in the nature of 'charges' by the shipping Company towards the carriage. The incidence of GST is on account of taxability of services under the relevant parliamentary statute i.e., GST laws and not on account of the business activities as envisaged in Sections 44B(2)(i) and 44B(2)(ii) of the Act. Otherwise, including GST in gross receipts for purpose of section 44B would be akin to charging income tax on GST i.e., tax on tax, which would promote cascading effect which cannot be the intent of legislation.
A service provider acts in a fiduciary capacity out of statutory obligation casted upon it, while collecting service tax/GST on the behalf of exchequer and the same is ultimately deposited with the exchequer, hence there cannot be any iota of doubt that the impugned GST is not in the nature of specified income under Section 44B.
As argued amendment in the provisions of Section 145A of the Act brought by Finance Act 2018, since it includes “services” within its code therefore, income has to be computed in accordance with Section 145A and any taxes levied under services is included - If it is held that Section 145A are applicable for computing deemed income u/s.44B and GST is added to the specified amounts and provisions of Section 29 are invoked, then deduction of GST paid should be allowed while computing income under the head "profits and gains" of business or profession as per Section 43B.
Even otherwise also Section 44B over rights Section 28-43A and 43B and therefore, in case if department seeks to add GST on the turnover for the purpose of calculating the profit u/s.44B, then, deduction u/s.43B has to be allowed if it is paid on or before the due date and similarly it can be disallowed once GST has not been paid within the due date. However, this is purely academic, contention which has been raised because we have already held that for the purpose of Section 44B only specified amount mentioned in the sub-Section 2 of Section 44B alone is the subject matter of computation of profit @7.5% and Section 145A has no applicability. Thus we hold that while computing income u/s.44B, GST cannot be included. Thus, in our opinion, the minority view of the single member of the DRP is to be upheld that GST cannot be included while computing deemed income u/s.44B, accordingly, this issue is decided in favour of the assessee.
Computing of book profit u/s.115JB - Since assessee has offered income of operation of ships to tax under the deemed provisions of Section 44B r.w.s.90(2) and Article 8 of India-Hong Kong Tax Treaty. Thus, in view of the Explanation 4A to Section 115JB(1), the provisions of Section 115JB are not applicable to the assessee.
Short grant of tax deducted at source and credit of advance tax - As been stated that assessee has filed rectification application before the ld. AO which has not been disposed of. Accordingly, we direct the ld. AO to examine this issue and decide accordingly.
-
2024 (11) TMI 953
TDS u/s 195 - disallowances made u/s. 40(a)(i) - ocean freight charges paid by the assessee company for availing those services falls under the definition of 'Royalty' as per article 12.3 of India-Korea DTAA - income deemed to accrue or arise in India - HELD THAT:- The assessee is a resident Indian Company, is engaged in the business of manufacture / job work of boiler pressure parts, panels, header and coils and designing, building, installation and maintaining engineering plants relating to thermal and coal power plants.
During the assessment year the assessee had incurred expenses towards freight charges paid to a non-resident logistic company - Hyupjin Shipping Co. Ltd., Korea (‘HSC’). The Assessee had engaged HSC, a Korean logistics company for availing logistics services along with coordinating with port authorities for vessel berthing, loading, unloading, port clearances, approvals, licenses, permits etc. at various ports outside India.'Firstly, the impugned payment made by the assessee is not in the nature of Royalty under section 9(1)(vi) of the act as the payments were mere simplicitor freight charges.
We note that the AO’s conclusion in the Assessment order passed, referring to the explanation 2 of section 9(1)(vi) of the Act for treating the said consideration paid by the Respondent to HSC as ‘Royalty’ towards to right to use of industrial, commercial or scientific equipment i.e., vessel, devoid of merits. As observed from the documents produced by the assessee and as per agreement entered into with HSC, the services does not confer any right to use of the equipment i.e. ship. The services relate only to logistic services, i.e., for movement of goods across various ports outside India and hence the contention of the Ld. FAO factually incorrect and wholly contrary to law.
The claim of the assessee that the payment of ocean freight to a non-resident company does not tantamount to royalty. See A.P. Moller Maersk AS [2017 (2) TMI 993 - SUPREME COURT]
DTAA between India & Korea existing during the A.Y. 2015-16 - We note that the HSC does not have any place of business/office in India and further no activities are being carried out by HSC in India, there exists no business connection for HSC in India. Therefore, no income arises through business connection in India u/s. 9(1)(i).Further, as per the India-Korea tax-treaty, the business profits of a foreign company would not be taxable in India, if such company does not have a permanent establishment in India through which the business is carried on.
HSC (non-resident logistics company) does not have any place of business/office in India through which business activities of the Company are carried on and thereby, the profits arising from logistics services would be taxable only in the resident state i.e., Korea.
We note that HSC is a logistics company, the freight income earned by HSC would be governed by Article 7 and not Article 9 of the India-Korea tax-treaty. The Article 9 of the treaty covers only income which are earned from usage of ship / letting out of ships / charter of ships etc and not for providing logistics services in any manner whatsoever. Even on perusal of provisions of Section 195 of the IT Act, itattracts tax only on chargeable income, if any, paid to a non-resident. Where there is no liability, the question of tax deduction does not arise. Where no part of the income is chargeable in India, even clearance under Section 195(2) or 195(3) of the IT Act is not necessary.
HSC does not have any place of business/office in India, the profits arising from logistics services would be taxable only in the resident state i.e., Korea, no taxes were required to be withheld by the assessee while making the remittance of freight charges. Hence, the disallowance u/s. 40(a)(i) made by the AO in reassessment is devoid of merits - Decided against revenue.
-
2024 (11) TMI 952
Reopening of assessment - reason to believe - borrowed opinion v/s independent inquiry - addition u/s 68 - Investigation Wing in its report had recorded that true nature of such transactions being sham transactions/accommodation entries and the entry giving entities had been shown to be mere shell companies of no means - as contended that the opinion of the AO is borrowed as it has highly relied on the report of Investigation Wing without independently verifying the issue and correct facts.
HELD THAT:- There is no dispute that the re-opening of assessment u/s 147 of the Act has it genesis in the search operation carried out by the Revenue at the premises of one Shri Tarun Goyal wherein it was found that the assessee had obtained entry from the entry operator. This transaction is the subject matter of dispute between the parties herein.
AO made addition being share application received from M/s. Tauraus Iron & Steel Company Ltd. u/s 68 of the Act treating non-genuine transaction and accommodation entry. Assessee during the course of hearing, submitted that even if it is assumed without admitting the same that the transaction is not a genuine transaction then also the assessment could not have been re-opened on the incriminating material found during the course of search.
AO was not justified in re-opening of the assessment u/s 147 of the Act. The proper course if any, under the facts of the present case when admittedly the incriminating material which is the basis of re-opening of assessment was recovered during the course of search at the premises of the third party would be proceedings u/s 153C of the Act. The impugned order passed by the AO thus, cannot be sustained. CIT(A) failed to advert to the submissions made by the assessee and the specific grounds taken before him regarding legality of re-opening of assessment.
-
2024 (11) TMI 951
Income deemed to accrue or arise in India - Taxability of reimbursement received on account of SAP Software and Microsoft License Fee - Royalty receipts u/s 9(1)(vi) as well as Article 12 of the DTAA stands - HELD THAT:- DR could not dispute the fact co-ordinate bench has categorically held that the issue of taxability of reimbursement of software licence fees stands covered in Assessee’s favour by the Hon’ble Supreme Court’s decision in the case of Engineering Analysis Centre of Excellence (P.) Ltd. [2021 (3) TMI 138 - SUPREME COURT]
Taxation of payment received from PVM India on account of Information & Communication Technology Service Charges (“ICT Service Charges”) as FTS under Article 12 of DTAA - Where the DRP had directed the AO on the basis of the decision of the Tribunal in assessee’s own case for AY 2017-18 to examine the issue, the controversy before the AO was limited. AO had not examined the factual aspects of the agreements and nature of services in context to ‘make available’ clause introduced by the amendment dated 30.08.1999 in India Netherlands DTAA.
As we go through the decision in favour of assessee in AY 2017-18 we find that the Mumbai Bench of the Tribunal decision in SEA Hygiene Products [2021 (1) TMI 323 - ITAT MUMBAI] had been relied and squarely applied without any examination of the assessee specific agreements and nature of services. It is not the case before us that the nature of services in the case of SEA Hygiene Products are similar to that of assessee.
On the other hand the decision in SEA Hygiene Products (supra) was based on principles of law laid in the case of Steria India Ltd. [2016 (8) TMI 166 - DELHI HIGH COURT] and accordingly in SEA Hygiene Products (supra) it was held that the provisions of Article 12(4)(b) of the Indo-Portuguese Treaty being restricted in scope vis-à-vis Article 12(3)(b) of Indo-Swedish Tax Treaty will apply in the Indo-Swedish Tax Treaty as well and it was pari materia applied in the case of the assessee for Indo- Netherlands Treaty also. There was no plea on the basis of the said benefit being independently available under India Netherlands DTAA, through an amendment vide Notification No. S.O. 693(E), dated 30.08.1999, issued under section 90(1) of the Act.
Consequently we are of the considered view that as with regard to these grounds 11 to 13(d), the contentions as raised cannot be sustained without there being an opportunity with the AO, to examine the factual aspects involved about the nature of agreements and services in terms of the amendment dated 30.08.1999 in India Netherlands DTAA, with regard to restricted scope of ‘make available’ clause. Issue is restored to the files of AO, to reexamine the issue in the light of aforesaid observation of this bench.
-
2024 (11) TMI 950
Jurisdiction of tribunal to entertain appeal related to duty drawback - Validity of Notice u/s 128A(3) of the Customs Act, 1962 - recovery of Duty Drawback erroneously sanctioned and paid to the Firm alongwith interest -
As decided by HC [2023 (12) TMI 695 - DELHI HIGH COURT] it would be erroneous to accept that the entitlement of the Firm claiming payment of Drawback cannot be considered by the learned CESTAT, but the Revenue’s demand for recovery of the erroneously paid Duty Drawback, can be considered by learned CESTAT. This would lead to a situation where if the Drawback is not fully sanctioned by the Revenue, and the Revenue later claims the refund of the partly paid Drawback, the assessee resisting the Revenue’s claim for recovery of the part Drawback would have to appeal before the learned CESTAT, but claim payment of the remaining part of the Drawback before another authority.
There is merit in the contention that the Revenue’s appeal is grossly delayed. Where the Revenue originally had not taken any objection on the appeal being heard by the learned CESTAT, and had also, following the order of the learned CESTAT, sanctioned refund of the Drawback, the Firm should not be left remediless - opportunity granted to the Firm to prefer a revision, under Section 129DD of the Customs Act
HELD THAT:-Appeal admitted. Stay as prayed is granted pending disposal of the Civil Appeal. Accordingly, IA is disposed of.
-
2024 (11) TMI 949
Finalisation of assessment of duty - Assessment of duty on the vessel and ship stores - Freight, either actual or @ 20% of fob value was required to be added to the value of vessel for discharging duty at the time of import - filing common bill of entry for payment of duty on the vessels as well as total quantum of ship stores ascertained by the custom officers at the time of entry.
HELD THAT:- We find that the assessing authority while finalizing the bill of entry after the coastal run has correctly deducted the duty involved in ship stores consumed during the voyage from Pipavav to Mumbai and back, therefore, on this count we do not find any error on the part of assessing authority . Hence the finalisation of assessment is correct and in order.
As regard the inclusion of freight, the issue is squarely covered by this Tribunal judgment in the case Sachin kshirsagar [2022 (6) TMI 928 - CESTAT MUMBAI]
The Commissioner (Appeals) contention that the freight should be included is not legal and correct. On careful perusal of the order-in- original, we find that there is absolutely no infirmity in the order of the Adjudicating Authority, therefore, the same needs to be upheld.
-
2024 (11) TMI 948
Classification of “hCG Pregnancy Rapid Test Strip” and “hCG Pregnancy Rapid Test Cassette”- Exemption from duty of customs provided to “diagnostics test kits specified in List 4” - whether the “hCG Pregnancy Rapid Test Strip” and “hCG Pregnancy Rapid Test Cassette” deserve classification under CTH 3002 and whether basic customs duty @ Nil rate as required to be paid under the Exemption Notifications?- According to Rapid Diagnostics, the disputed goods are rapid chromatographic immunoassay for detection of hCG in urine to aid in the early detection of pregnancy.
HELD THAT:- The disputed goods are prepared using agglutinating serum/sera. As the agglutinating sera used in the preparation of the disputed goods provide the essential character to the disputed goods. Further, agglutinating sera is the most essential and only active component on which test reaction is based. The other components like membrane sheet, plastic cassette and absorbent are passive components which provide longer shelf life and stability to the kit. As the disputed goods are based on agglutinating sera, the benefit of the Exemption Notifications would be available to Rapid Diagnostics.
The decision of the Tribunal in Inter Care [1996 (10) TMI 201 - CEGAT, NEW DELHI], wherein the benefit of the Exemption Notifications was allowed to the pregnancy test kits which were based on agglutinating sera, supports the aforesaid view.
The Commissioner, in the impugned order, has dropped the demands proposed in the show cause notices for the reason that the disputed goods are classifiable under CTH 3002 and so basic customs duty would have to be paid at Nil rate of duty. To arrive at this conclusion, the Commissioner held that the disputed goods are based on “agglutinating sera” which is the chief component of the test kit that produces the result regarding the pregnancy. Thus, as agglutinating sera is the only active component and the rest of the components are passive, the pregnancy detection kits have their essential character defined by agglutinating sera only. Thus, the imported goods would be covered under the Exemption Notifications. The aforesaid findings recorded by the Commissioner are based on an earlier decision of the Tribunal in Inter Care[supra] and do not suffer from any infirmity.
-
2024 (11) TMI 947
Unlawful seizure of shares and the monopolization of the cable TV network business in Chhattisgarh by the Opposite Parties - contravention of Sections 3 and 4 of the Competition Act, 2002 - HELD THAT:- As regards contravention of Section 3 of the Act, the Commission notes that the provisions of Section 3(1) of the Act read with Section 3(3) thereof have no manner of application in the factual matrix of the present case as Section 3(3) of the Act requires two or more enterprises engaged in identical or similar trade of goods or provision of services and even if they are not engaged in identical trade, they must be presumed to be part of an agreement if they participate or intend to participate in furthering such an agreement. Looking at the relationship among OPs and the facts and circumstances of the case, as detailed above, it is evident that provisions of Section 3(3) of the Act are not applicable.
Further, the Commission is of the view that, for the applicability of Section 4 of the Act and the examination of contravention thereof, it may be axiomatic to define a relevant market and assess the dominance of the entity alleged to be abusing its dominant position in such market.
However, considering the facts and circumstances of the case and having regard to the abuses as alleged, the Commission does not find it imperative to define a precise relevant market in the instant matter. Furthermore, the Commission notes that the Informants have alleged violation of Section 4 of the Act against all the OPs. The Commission observes that it is a settled position that the provisions of the Act do not provide for inquiry into the cases of joint/collective dominance. Accordingly, no case of contravention under Section 4 of the Act has been established.
The Commission notes that for the aforesaid reasons, it is unnecessary to delve deeper into the allegations. While the grievances raised by the Informant may give rise to a dispute, however, the Commission is not the right forum for adjudication of the same.
The Commission is of the opinion, prima facie, no case of contravention of provisions of Section 3 and Section 4 of the Act is made out and accordingly, the Information filed against OPs is directed to be closed forthwith in terms of the provisions of Section 26(2) of the Act - no case for grant of relief(s) as sought under Section 33 of the Act arises and the prayer for the same is also rejected.
-
2024 (11) TMI 946
Contravention of the provisions of Section 4 of the Competition Act, 2002 - hospital specializing in infertility care through misleading statements on social media - HELD THAT:- Upon perusal of the Information, it appears that the primary grievance of the Informant is that the Opposite Party through Dr. Raju Nair, has made certain misleading statements/mis-information about the cost of IVF and fertility treatments on its You Tube channel against hospitals offering affordable treatment for infertility care. These statements are alleged to be detrimental to a competitive market and would prejudice market players who are willing to offer quality treatment at an affordable rate. This conduct has been alleged to be in abuse of dominant position by the Opposite Party in contravention of provisions of Section 4 of the Act.
As per the Information available in public domain, it appears that Informant is running a hospital which offers services including infertility treatments such as IVF; pediatrics, laparoscopy (Endoscopy); obstetrics & gynaecology; orthopaedics treatment etc. However, the allegations that the Opposite Party is allegedly spreading mis- information/mis-statements about the cost of such treatment do not fall within the ambit of the Competition Act, 2002.
The Commission is of the view that there is no prima-facie case of contravention of provisions of the Act warranting an investigation into the matter - the Information is directed to be closed forthwith in terms of Section 26(2) of the Act. Consequently, no case arises for grant for relief(s) as sought under Section 33 of the Act.
-
2024 (11) TMI 945
Jurisdiction of the Competition Commission of India (CCI) in the matter - Contravention of the provisions of Section 4(2)(a)(ii) and 4(2)(c) of the Act by National Internet Exchange of India - it is submitted that the Informant has erroneously delineated the relevant market as the same is misconceived, baseless and incomplete - concealment of previous litigation by the Informant - erroneous delineation of the relevant market - whether there is any issue involved in the present matter which may oust the jurisdiction of the Commission or may merit invocation of Section 21A in the present proceedings?
HELD THAT:- The Commission observes that the obligation to comply with the provisions of the Act and maintain fair competition in the market is independent of the obligation to comply with the provisions of TRAI Act/Regulations, and violation of one need not ipso facto result in violation of the other. The Commission is, inter alia, entrusted with the duty of eliminating practices having an adverse effect on competition, to promote and sustain competition in markets, to protect the consumers and to ensure freedom of trade carried on by other participants in the market. As a sectoral regulator, the TRAI may formulate and enforce obligations through appropriate code of conduct for the entities operating in the telecom sector, keeping in view its sector-specific objectives. However, compliance with the TRAI regulatory framework remains independent of the possibility of any practice of an entity operating in the telecom sector falling afoul of the provisions of the Act.
The OP’s submission that the entity’s existence stems from sectoral regulator’s recommendations and thus, it is within the domain of TRAI and not Commission’s, does not hold water.
It will be erroneous to interpret the judgment of the Hon’ble Supreme Court in Bharti Airtel case [2018 (12) TMI 1683 - SUPREME COURT] to mean that in every case of overlap of jurisdiction with a sectoral regulator, the Commission will have to withhold taking action and await examination by the sectoral regulator. This would render the object and purpose of the Competition Act, 2002, nugatory. The law laid down by Hon’ble Supreme Court in the Bharti Airtel case was specific to the peculiar facts of that case. A universal application of the law laid down on those particular facts cannot be inferred and implied in all cases where the Commission is exercising its jurisdiction in sectors which are also regulated by a sectoral regulator.
It is clear that the allegations involved in the present matter are determinable within the legal mandate given to the Commission. Thus, the Commission does not find any merit in the preliminary objection regarding lack of jurisdiction in the matter. Further, seeking opinion of any statutory authority such as TRAI under the provisions of Section 21A of the Act is the prerogative of the Commission and may be exercised in appropriate cases, as deemed fit by the Commission.
The Commission notes that the Informant has alleged contravention of provisions of Section 4 of the Act. In this regard, the Commission notes that the Informant has delineated (in Information) relevant market as provision of ‘internet exchange services for peering between content providers, CDNs and ISPs in towns/cities in India in which CDNs/content providers are not present/do not have their data centres’ - considering the homogeneous nature of services throughout India provided by the parties in the matter, the Commission deems it appropriate to delineate relevant market as ‘provision of internet exchange services in India’.
Based on the data provided by the OP, it appears that in terms of volume of traffic and number of connected networks, the Informant has significant presence vis-à-vis OP in abovementioned six cities. The Commission also notes that despite the OP being the oldest IX provider and the much later entry of the Informant in the market, the Informant has been able to increase its relative presence in the relevant market which suggests that the relevant market remains contestable - Thus, from the data available on record and the facts and circumstances present in the matter, the Commission is of the view that dominance of the OP is not getting established. Accordingly, the Commission is not inclined to delve further into the matter.
The Commission is of the view that the OP does not appear to be dominant in the aforesaid delineated relevant market and consequently, there is no competition concern arising in the present matter. Therefore, the matter is directed to be closed forthwith under Section 26(2) of the Act.
The Secretary is directed to communicate the decision of the Commission to the parties, accordingly.
-
2024 (11) TMI 944
Cartelization in respect of procurement of medicines by ESIC - contravention of provisions of Section 3(3) of Competition Act, 2002 - HELD THAT:- The Commission observes that there are numerous medicines and medical/healthcare products which are procured by ESIC and other government bodies. The Informant has not provided details of tenders/ medicines/ parties involved in the alleged conduct. Apart from making bald allegations, the Informant has not placed on record any cogent material to enable the Commission to examine the matter. Rather, the Informant failed to provide the requisite information in spite of being accorded two opportunities.
The Commission finds that no prima facie case of contravention of the provisions of Section 3(3) of the Act is made out against any of the OPs in the instant matter. Accordingly, the information is ordered to be closed forthwith in terms of the provisions contained in Section 26(2) of the Act. Consequently, no case for grant for relief(s) as sought under Section 33 of the Act arises and the said request is rejected.
-
2024 (11) TMI 943
Contravention of provisions of Sections 3 and 4 of the Competition Act, 2002 - abuse of dominant position by the OPs - OPs have a monopoly in respect of provision of logistic services including cold storage facilities and movement of goods at the Visakhapatnam Port - HELD THAT:- The Commission has perused the Information and observed that the Informant appears to be aggrieved by the following conduct of the OP i.e. the lease agreement being camouflaged as a ‘Leave and License Agreement’ for the purpose of avoiding stamp duty and registration charges to the State exchequer; enforcing the ‘lock-in-period’ clause in the Leave and License Agreement and refusal by the OPs to adjust the rental arrears against the security deposit; repeated threats to forfeit the security deposit and restricting access of Informant's staff to the cold storage plant and threatening to switch off the power supply to the cold storage plant.
The Commission observes that the Informant entered into Leave and License Agreement with OP-1 for a period of 5 years for a portion of the cold storage plant with a lease rent of INR 17,38,800/- per month and on payment of security deposit of a sum of INR 52,16,400/- (equivalent to 3 month’s rent). The said agreement also contains a clause pertaining to a ‘lock-in-period’ of 18 months from the date of taking possession of the cold storage plant during which the said agreement cannot be generally terminated unless there is a breach of the terms and conditions of the said agreement.
The Commission notes that the alleged conduct of OPs of the lease agreement camouflaged as a ‘Leave and License Agreement’ for the purpose of avoiding stamp duty and registration charges to the State exchequer is not a competition issue and does not fall within the four corners of the Competition Act, 2002 - The alleged actions do not appear to give rise to competition concerns as envisaged within the provisions of the Competition Act, 2002.
The Commission is of the view that there is no prima-facie case of contravention of provisions of the Act warranting an investigation into the matter - the Information is ordered to be closed forthwith in terms of Section 26(2) of the Act. Consequently, no case for grant for relief(s) as sought under Section 33 of the Act arises.
............
|
9911796707
