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Showing 1 to 20 of 1465 Records
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2023 (1) TMI 1476
Validity of orders passed u/s 144C without compliance with the directions of the Dispute Resolution Panel (DRP) - HELD THAT:- As under section 144C(13) AO is expected to give effect to the directions of the learned DRP. If the AO did not comply with the directions of DRP, whatsoever may be the reason, may be oversight or due to lack of or improper understanding of the directions, the proper course is to seek the AO or the superior authorities, the compliance with the order of the DRP, but not to quash the entire proceedings thereby nullifying the entire exercise conducted by DRP. What is applicable for non-compliance with the directions of the Tribunal, if any by AO would equally be made applicable to the directions of the DRP.
With this view of the matter, we are inclined to follow the decision of Yokogawa India Ltd [2022 (3) TMI 1563 - ITAT BANGALORE] matter needs to be remanded to the file of the AO in case there is non-compliance with the directions of DRP. We, therefore, find it difficult to direct the AO to delete the impugned addition. Instead, while respectfully following the view taken in Yokogawa India Ltd., [2022 (3) TMI 1563 - ITAT BANGALORE] and M/s. Apollo Health Street [2014 (12) TMI 515 - ITAT HYDERABAD] we set aside the final assessment order and remand the issue to the file of AO/ TPO to pass appropriate order. Appeal is treated as allowed for statistical purpose.
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2023 (1) TMI 1475
Applicability of provisions of Section 167B - Assessee agitated against the action of the AO in determining the status of the assessee as Association of Person (AOP) as against Artificial Juridical Person (AJP) - HELD THAT:- The issue has been decided in the case of M/s Anand Educational Society [2018 (9) TMI 2156 - ITAT VISAKHAPATNAM] wherein the Tribunal following its earlier order in the case of Vidyodaya Educational Society [2018 (4) TMI 2007 - ITAT VISAKHAPATNAM] held that once the society is registered under the Societies Registration Act the applicability of maximum marginal rates u/s 167B of the Act would not arise.
Thus hold that the provisions of section 167B have no application to the Assessee and the income of the assessee cannot be taxed at maximum marginal rates.
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2023 (1) TMI 1474
Validity of SCN - SCN demanding service tax issued without prior pre-consultation - time limitation - HELD THAT:- One of the issue that is agitated is the consequences of setting aside the Show Cause Notices on the aspect of limitation. It is noted that it is on this restricted aspect notice is issued by the Hon’ble Supreme Court.
Prima facie, from the limited argument advanced by the Revenue and the issue being restricted to the limitation aspect, the mandatory nature of pre consultation is impliedly accepted by the Revenue. In these circumstances, it is deemed appropriate that since the issue is pending before the Hon’ble Supreme Court and to avoid any further litigation, to list the petitions for hearing.
Since the arguable questions are raised, Rule in these petitions - the execution and operation of the impugned Show Causes Notices is stayed.
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2023 (1) TMI 1473
Admission of Application under Section 7 of Insolvency and Bankruptcy Code, 2016 - existence of financial debt or not - no loan agreement entered into between the Corporate Debtor and the Respondents - service of demand notice - time limitation - HELD THAT:- From the Reply given by the Corporate Debtor, the conclusions are inescapable, firstly, the Corporate Debtor admitted grant of loan. The plea taken in the Reply was that loan was granted for a tenure of 5 years. The second conclusion which may be drawn from the Reply is that the claim of interest which was claimed by the Demand Notice was not refuted. Corporate Debtor did not take any plea that no interest is payable.
In Section 7 Application, the Financial Creditors have also brought on record Form 16-A for the financial year ending 31st March, 2018 which Form 16-A indicates that TDS was deducted by the Corporate Debtor and deposited under Section 194-A of Income Tax Act, 1961.
It is true that deduction of TDS and deposit by the Corporate Debtor does not itself prove that there is any financial debt but deduction of TDS and deposit in Form 16-A under Section 194-A of Income Tax Act clearly proves that the deduction which was deposited was TDS relating to “Interest other than interest on securities”. Form 16-A which was filed by the Financial Creditor along with Section 7 Application at least support the case of the Financial Creditors that loan which was granted to the Corporate Debtor was with interest.
Loan was granted by the Financial Creditors to the Corporate Debtor which was proved from the materials brought on record by the Financial Creditors.
Submission of Learned Counsel for the Appellant that the Respondents Financial Creditors has no license under Section 22 of Banking Regulation Act, 1949 hence no Financial Facility could have been extended by the Financial Creditors - HELD THAT:- Section 22 contains the prohibition that no Company shall carry on banking business unless it holds a license issued on behalf of bank. Section 22 of the Banking Regulation Act, 1949 prohibits banking business. Present is not a case that Respondents are carrying on any banking business hence advancing a loan by the Respondents to the Corporate Debtor is not prohibited by Section 22 of the Banking Regulation Act - The definition of Financial Debt as contained in Section 5(8) of the Code is expansive definition and use of the expression “any other transaction” is a wide enough to cover the loan advanced by the Respondents to the Corporate Debtor and we are satisfied that loan advanced by Respondents cannot be disregarded relying on Section 22 of the Banking Regulation Act, 1949.
The Adjudicating Authority after considering the materials on record and submissions of parties rightly came to the conclusion that the Financial Debt as claimed by the Respondents were disbursed against the consideration for the time value of money.
Conclusion - The definition of Financial Debt as contained in Section 5(8) of the Code is expansive. The loan advanced by Respondents cannot be disregarded relying on Section 22 of the Banking Regulation Act, 1949. The ingredients of financial debt were fully proved in the facts of the present case.
There are no error in the Order of the Adjudicating Authority warranting any interference in this Appeal. There is no merit in the Appeal, the Appeal is dismissed.
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2023 (1) TMI 1472
Reopening of assessment - Reason to believe - change of opinion - applicability of section 43CA(3) has got violated as the condition that the amount of consideration or part thereof should have been received by modes other than cash was not satisfied - HELD THAT:- As gone through the annexures to the petition, to conclude that it is a clear case of "change of opinion"; no specific reasons are given, or discovery of new material is mentioned in the reasons to show a failure on the part of the assessee to disclose.
The petitioner has fully and truly disclosed all material facts necessary for its assessment, he has no further duty to disclose as there was nothing embedded. Inference of law on the given facts is for the Assessing Officer.
In the present case, a query was raised with regard to the sale of the shop and the details called for as can be evinced from the letter dated June 26, 2015. The two letters with their enclosures attached to the petition evince that the queries were answered by the petitioner.
In our view, the notice in the present case is a review of the earlier decision based on a change of opinion. Decided in favour of assessee.
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2023 (1) TMI 1471
Validity of reopening of assessment - approval taken for triggering the reassessment proceedings is not in accordance with Section 151 - HELD THAT:- The issue raised in the instant petition also obtains in Twylight Infrastructure Pvt. Ltd.[2024 (1) TMI 759 - DELHI HIGH COURT]
Accordingly, issue notice. Notice on behalf of the respondent/revenue accepted.
Counter-affidavit will be filed within the next four weeks. Rejoinder thereto, if any, be filed before the next date of hearing.
List the matter on 23.03.2023.
As noticed in Twylight Infrastructure, since the issue involved goes to the root of the jurisdiction of the concerned authority, proceedings under Section 148 of the Act shall remain stayed, till further directions of the Court.
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2023 (1) TMI 1470
Levy of service tax - business support service - reimbursements received by the appellants from their group companies for expenses incurred on their behalf - reimbursements can be considered as 'consideration' for the purpose of levying service tax as per the Explanation to Section 67 of the Finance Act, 1994 or not - HELD THAT:- The period involved in the present dispute is from 01.04.2015 to 31.03.2017. The phrase ‘service’ has been defined in Section 65B ibid to mean ‘any activity carried out by a person for another for consideration, and includes a declared service.’. On reading of the said definition clause, it transpires that in order to constitute a service, there must be involvement of more than one person i.e., a service provider and a service receiver; and that there must be ‘consideration’ for provision of such service. The phrase ‘consideration’ explained in the Explanation, appended to Section 67 ibid has provided that ‘consideration’ includes any amount that is payable for the taxable services provided or to be provided.
In the present case, the appellants herein have not provided any taxable service to their group companies, which is evident from both the SCN and the impugned order.
The reimbursement of the cost/expenses incurred by the appellants as per actual, cannot be regarded as consideration, flowing to the appellants towards the taxable services provided by them - in absence of any provision of service by the appellants to their group companies, mere claim of reimbursement of actual cost and expenses should not form a part of provision of any taxable service, for payment of service tax thereon.
Conclusion - The reimbursement of expenses incurred by one entity on behalf of another, without the provision of a service, does not constitute a taxable service. Such reimbursements do not qualify as 'consideration' for service tax purposes.
Appeal allowed.
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2023 (1) TMI 1469
Invocation of fundamental rights - right to free speech - claim of fundamental rights against anyone other than the State or its instrumentalities - Protection of rights of a citizen under Article 21 of the Constitution of India even against a threat to the liberty of a citizen by the acts or omissions of another citizen or private agency - role and responsibility of a Minister and the vicarious liability/responsibility of a Government to any statement made by him - statement by a Minister, inconsistent with the rights of a citizen under PartIII of the Constitution, constitutes a violation of such constitutional rights (constitutional tort).
AS PER (S. Abdul Nazeer), (B.R. Gavai), (A.S. Bopanna) and (V. Ramasubramanian).
Whether the grounds specified in Article 19(2) in relation to which reasonable restrictions on the right to free speech can be imposed by law are exhaustive, or can restrictions on the right to free speech be imposed on grounds not found in Article 19(2) by invoking other fundamental rights? - HELD THAT:- The grounds lined up in Article 19(2) for restricting the right to free speech are exhaustive. Under the guise of invoking other fundamental rights or under the guise of two fundamental rights staking a competing claim against each other, additional restrictions not found in Article 19(2), cannot be imposed on the exercise of the right conferred by Article 19(1)(a) upon any individual.
Whether a fundamental right under Article 19 or 21 can be claimed against anyone other than the State or its instrumentalities? - HELD THAT:- A fundamental right under Article 19/21 can be enforced even against persons other than the State or its instrumentalities.
Whether the State is under a duty to affirmatively protect the rights of a citizen under Article 21 of the Constitution of India even against a threat to the liberty of a citizen by the acts or omissions of another citizen or private agency? - HELD THAT:- The State is under a duty to affirmatively protect the rights of a person under Article 21, whenever there is a threat to personal liberty, even by a nonState actor.
Can a statement made by a Minister, traceable to any affairs of the State or for protecting the Government, be attributed vicariously to the Government itself, especially in view of the principle of Collective Responsibility? - HELD THAT:- A statement made by a Minister even if traceable to any affairs of the State or for protecting the Government, cannot be attributed vicariously to the Government by invoking the principle of collective responsibility.
Whether a statement by a Minister, inconsistent with the rights of a citizen under PartIII of the Constitution, constitutes a violation of such constitutional rights and is actionable as ‘Constitutional Tort’? - HELD THAT:- A mere statement made by a Minister, inconsistent with the rights of a citizen under PartIII of the Constitution, may not constitute a violation of the constitutional rights and become actionable as Constitutional tort. But if as a consequence of such a statement, any act of omission or commission is done by the officers resulting in harm or loss to a person/citizen, then the same may be actionable as a constitutional tort.
The writ petition and the special leave petition are directed to be listed before the appropriate bench after getting orders from Hon’ble the Chief Justice of India.
AS PER NAGARATHNA, J.
Are the grounds specified in Article 19(2) in relation to which reasonable restrictions on the right to free speech can be imposed by law, exhaustive, or can restrictions on the right to free speech be imposed on grounds not found in Article 19(2) by invoking other fundamental rights? - HELD THAT:- It is for the Parliament in its wisdom to enact a legislation or code to restrain, citizens in general and public functionaries, in particular, from making disparaging or vitriolic remarks against fellow citizens, having regard to the strict parameters of Article 19(2) and bearing in mind the freedom under Article 19(1) (a) of the Constitution of India.
Can a fundamental right under Article 19 or 21 of the Constitution of India be claimed other than against the ‘State’ or its instrumentalities? - HELD THAT:- It is also for the respective political parties to regulate and control the actions and speech of its functionaries and members. This could be through enactment of a Code of Conduct which would prescribe the limits of permissible speech by functionaries and members of the respective political parties.
Whether the State is under a duty to affirmatively protect the rights of a citizen under Article 21 of the Constitution of India even against a threat to the liberty of a citizen by the acts or omissions of another citizen or private agency? - HELD THAT:- Any citizen, who is prejudiced by any form of attack, as a result of speech/expression through any medium, targeted against her/him or by speech which constitutes ‘hate speech’ or any species thereof, whether such attack or speech is by a public functionary or otherwise, may approach the Court of Law under Criminal and Civil statutes and seek appropriate remedies. Whenever permissible, civil remedies in the nature of declaratory remedies, injunctions as well as pecuniary damages may be awarded as prescribed under the relevant statutes.
Can a statement made by a Minister, traceable to any affairs of State or for protecting the Government, be attributed vicariously to the Government itself, especially in view of the principle of Collective Responsibility? - HELD THAT:- A statement made by a Minister if traceable to any affairs of the State or for protecting the Government, can be attributed vicariously to the Government by invoking the principle of collective responsibility, so long as such statement represents the view of the Government also. If such a statement is not consistent with the view of the Government, then it is attributable to the Minister personally.
Whether a statement by a Minister, inconsistent with the rights of a citizen under Part Three of the Constitution, constitutes a violation of such constitutional rights and is actionable as ‘Constitutional Tort’? - HELD THAT:- A proper legal framework is necessary to define the acts or omissions which would amount to constitutional torts, and the manner in which the same would be redressed or remedied on the basis of judicial precedent. It is not prudent to treat all cases where a statement made by a public functionary resulting in harm or loss to a person/citizen, as constitutional torts - Public functionaries could be proceeded against personally if their statement is inconsistent with the views of the Government. If, however, such views are consistent with the views of the Government, or are endorsed by the Government, then the same may be vicariously attributed to the State on the basis of the principle of collective responsibility and appropriate remedies may be sought before a court of law.
Conclusion - i) On question 1, all the judges gave same view. ii) On question 2, majority held that 'A fundamental right under Article 19/21 can be enforced even against persons other than the State or its instrumentalities', wheras Hon'ble Nagarathna. J held that 'A a fundamental right under Article 19/21 cannot be enforced against persons other than the State or its instrumentalities. However, they may be the basis for seeking common law remedies.' iii) On question 3, majority held that 'The State is under a duty to affirmatively protect the rights of a person under Article 21, whenever there is a threat to personal liberty even by a private actor.' wheras Hon'ble Nagarathna. J held that 'The duty cast upon the State under Article 21 is a negative duty not to deprive a person of his life and personal liberty except in accordance with law.' iv) On question 4, majority held that 'A statement made by a Minister even if traceable to any affairs of the State or for protecting the Government, cannot be attributed vicariously to the Government by invoking the principle of collective responsibility.' wheras Hon'ble Nagarathna. J held that 'A statement made by a Minister if traceable to any affairs of the State or for protecting the Government, can be attributed vicariously to the Government by invoking the principle of collective responsibility, so long as such statement represents the view of the Government also. If such a statement is not consistent with the view of the Government, then it is attributable to the Minister personally.' v) On question 5, majority held that 'A mere statement made by a Minister, inconsistent with the rights of a citizen under Part-III of the Constitution, may not constitute a violation of constitutional rights and become actionable as a Constitutional tort.' whereas Hon'ble Nagarathna. J held that 'A proper legal framework is necessary to define the acts or omissions which would amount to constitutional torts, and the manner in which the same would be redressed or remedied on the basis of judicial precedent. It is not prudent to treat all cases where a statement made by a public functionary resulting in harm or loss to a person/citizen, as constitutional torts.'
Petitions are directed to be listed before an appropriate Bench after seeking orders of Hon’ble the Chief Justice of India.
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2023 (1) TMI 1468
Undisclosed cash credit u/s 68 - assessee has failed to prove the genuineness of transaction and creditworthiness of the subscribers - Bogus share capital issued by the assessee company - CIT(A) considering the entire details on record observed that all the share subscribers were group entities and that the money was also received by the appellant from them even on earlier occasions also and further that the creditworthiness and identity has been accepted by the AO in the earlier years deleted addition - only contention raised by the AO was that the directors did not appear for personal examination - HELD THAT:- CIT(A) after examining all the documents and relying upon the judicial decisions observed that merely because the directors did not appear before the AO, that itself, was not sufficient enough to hold that the entire transaction was bogus. The \CIT(A) considered the relevant documents on record and also considering that the share subscriber companies were having sufficient net worth to invest in the assessee company has deleted the addition so made by the AO.
Assessee has further submitted that even otherwise, there was no doubt / suspicion raised by the AO either about the identity or of the creditworthiness of the share subscribers. He, in this respect, has submitted that the assessee company, during the year, had received share capital from four companies out of which three companies were group concerns of the assessee company and the fourth company i.e. Fort Projects Pvt. Ltd was a reputed company of Kolkata engaged in the profession of real estate developer/builder. That the said company i.e. Fort Projects Pvt. Ltd had a net worth and profits/turnover in millions of rupees. That even in the earlier years, the share application money was received by the assessee from the said company which was accepted by the Department.
For Nortex Reality Ltd., was group company of the assessee company and the company’s net worth and profits/turnover was also in millions of rupees. The company has furnished all the details in respect of notice u/s 133(6) of the Act. That the company was also enjoying bank overdraft facility and that the Assessing Officer in the remand report has not made any adverse comment against the said company.
For Hope Enterprises Pvt. Ltd.there was no doubt about the identity of the said company. The company has duly filed the response to the notice u/s 133(6) of the Act. The share application money received by the aforesaid group entities by the assessee company in the earlier years has been accepted by the Department.
For Poddar Projects Pvt. Ltd. the Income Tax Office of the Department was run in the hired building owned by the Poddar Group. He, therefore, has submitted that there was no question of suspicion about the identity and creditworthiness, not only of the assessee company but also its group companies.
Thus no reason to interfere with the order of the CIT(A) and the same is accordingly upheld. The appeal of the Revenue is hereby dismissed.
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2023 (1) TMI 1467
Money Laundering - seeking quashment of summons issued to the petitioner - proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) can continue after an accused has been acquitted of the predicate offence or not - HELD THAT:- The Apex Court in the case of VIJAY MADANLAL CHOUDHARY & ORS. VERSUS UNION OF INDIA & ORS. [2022 (7) TMI 1316 - SUPREME COURT (LB)], has clearly held that on three circumstances, the proceedings under the Prevention of Money Laundering Act, 2002 cannot continue; one being quashment of the proceedings in 482; the acquittal of the accused in predicate offence that is offences under the Indian Penal Code or Prevention of Corruption Act, 1988 as the case would be and the other; discharge of accused in those proceedings. In the case at hand, the petitioner is acquitted of the offences alleged against him under the Prevention of Corruption Act, 1988 in Spl.C.C.No.189/2013 and the said acquittal in terms of the order of the concerned Court dated 23.12.2022.
Conclusion - In the light of the acquittal of the petitioner in the aforesaid offence, the proceedings under the Prevention of Money Laundering Act, 2002 cannot continue.
The proceedings in ECIR No.BGZO/05/2015 Summons/2790 dated 21.12.2018 stands quashed - petition allowed.
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2023 (1) TMI 1466
Procedural framework for issuing notices and filing affidavits under SEBI Act - We direct that, subject to all just exceptions and office objections, let notice be issued in all the pending applications, including unregistered applications.
Notices will be issued by all modes, including dasti.
Counter affidavit/reply will be filed within four weeks from the date of service.
Rejoinder affidavit, if any, will be filed within four weeks from the date of service of the counter affidavit/reply.
Copy of the applications along with the counter affidavit/ reply and rejoinder affidavit, if any, will be served on the learned Amicus Curiae, Mr. Shekhar Naphade, Senior Advocate, the learned counsel for the Securities and Exchange Board of India (SEBI) and the learned counsel appearing on behalf of Sahara Group.
The learned Amicus Curiae, Mr. Shekhar Naphade, Senior Advocate, will appoint an Advocate-on-Record, who will act as a nodal advocate and logistic coordinator. The Advocate-on-Record, so appointed, will be paid, out of pocket and miscellaneous expenses as per the bills/invoices raised, and Rs.10,000/- per appearance in the Court. In addition, the learned Advocate-on-Record will be paid Rs.40,000/- (consolidated) as reading and preparation fee. Fee will be paid from the money/funds available with SEBI.
Re-list for hearing and arguments on 18th, 19th and 20th April 2023.
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2023 (1) TMI 1465
Rejection of refund claim - rejection on the ground that the petitioner has sought such refund under the provisions of Rule 95A and the Circular No.106/25/2019/GST dated 29.06.2019 - HELD THAT:- The respondent, does not dispute the premise in which the refund is sought for and he emphasizes that all questions otherwise may be left open for consideration including the consideration of the petitioner’s prayer for reversal of ITC based on the decision in SANDEEP PATIL, FLEMINGO TRAVEL RETAIL LIMITED & ANR., VERSUS UNION OF INDIA AND OTHERS. [2019 (10) TMI 360 - BOMBAY HIGH COURT].
Petition allowed.
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2023 (1) TMI 1464
Income deemed to accrue or arise in India - Absence of business connection and Permanent Establishment (PE) in India - assessee, a non-resident corporate entity, is incorporated in the United Kingdom (UK) - HELD THAT:- As respectfully following the consistent view in assessee’s own case [2021 (10) TMI 1023 - ITAT DELHI] and [2022 (2) TMI 1058 - ITAT DELHI] we decide these grounds against the assessee by holding that the assessee has business connection and PE in India. These grounds are dismissed.
Attribution of profit to PE at 25% of the total turnover - As decided in assessee’s own case in past assessment years, we hold that 15% of the booking fees should be attributed to the PE in India.
Disallowance of various expenses, including distribution expenses/distributors fee while computing the profit of the PE - While deciding identical issue in past assessment years, the Tribunal has held that 100% deduction of distribution expenses/distributors fee has to be allowed. Whereas, in respect of all other expenses, 70% deduction has to be allowed.
Allowance of head office expenses u/s 44C - While deciding identical issue in assessee’s own case in assessment year 2016- 17 [2022 (2) TMI 1058 - ITAT DELHI] remit this issue to the file of the AO for allowing the correct claim of the head office expenditure to the assessee in the light of the details/information/ documents already on record and which he may require the assessee to furnish before him - Ground is allowed for statistical purposes.
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2023 (1) TMI 1463
Assessment u/s 153A - Undisclosed income - Credits Transferred from Nagaland based entities - sufficient incriminating material found n search or not? - HELD THAT:- As AR submitted that in the absence of any incriminating material on record, no such additions could have been made by AO. This plea could not be accepted since this is not a case wherein no incriminating material has been found. Rather, it is the finding of CIT(A) that several incriminating materials were seized which include blank letter head of Nagaland based persons / entities, blank cheques, notes / diaries containing details of payments received and transferred. The evidence relating to unexplained investment made in cash towards purchase of immoveable properties was also seized. Thus, this is a case where sufficient incriminating material has been found by investigation team which indicates undisclosed income of the assessee - Decided against assessee.
Best judgement basis u/s 144 - As alleged by assessee no notice u/s 143(2) was issued - Assessment Proceedings for AY 2018-19 - HELD THAT:- As it was to be held that none of the conditions for invoking jurisdiction u/s 144 was satisfied by Ld. AO which would vitiate the assessment proceedings. Further, the assessee has filed valid return of income and no notice u/s 143(2) has ever been issued before making assessment. The non-issuance of notice u/s 143(2), in non-curable defect and therefore, assumption of jurisdiction and subsequent order passed u/s 144 becomes bad-in-law. The case laws as cited above clearly support the legal ground raised by the assessee. Therefore, we hold that the assessment order passed for this year fails on legal grounds and the consequential additions made therein become unsustainable. We order so. This being so, no further adjudication is required in the appeal for AY 2018-19. The assessee’s appeal stand allowed on this ground alone.
Addition based on statements recorded by investigation wing during the course of search operations from various persons - HELD THAT:- The pre-existing statements recorded by the Investigation Wing could not form the sole basis of assessment. It could also be seen that Shri G.K. Rengma retracted the statement vide affidavit dated 01.04.2019 wherein he clarified that the statement was recorded incorrectly. The said retraction was supported by the audited financial statements of Shri G.K. Rengma as placed on record. The total turnover of Shri G.K. Rengma as reflected in these financial statements is much higher than the figures recorded in the statement. Under these circumstances, the third-party statements recorded from Shri G.K. Rengma as well as from other persons would lose evidentiary value. The statements of remaining persons i.e., land owners / various other contractors have never been independently examined by Ld. AO. The copies of statement were never confronted to the assessee and no opportunity of cross-examination was ever provided to the assessee. Accordingly, the ratio of decision of Hon’ble Apex Court in Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT] would apply to the facts of the case and support the case of the assessee. Considering the same, no much weightage could be given to such statements and the same, on standalone basis, would not be sufficient to support the impugned additions.
Addition under provisions of Sec.68 or 69 or 69A to 69D - as argued additions have been made merely on the basis of surmises, conjectures and on borrowed satisfaction without specifying the relevant sections under which additions have been made - HELD THAT:- The onus of the assessee has to remain confine to the extent of credits received by the assessee in his own books of accounts and not any further. To hold any contrary position, Ld. AO must establish this fact otherwise no such debits / credits appearing in bank accounts of other parties could be deemed to be the income of the assessee. The assessee’s onus u/s 68 in respect of entries in books / bank accounts of other persons is only secondary i.e., consequential upon the successful discharge of the primary onus by the A.O of establishing the assessee to be the actual owner of the books of account / bank accounts held in the names of other persons. This position has been held by Hon’ble Supreme Court in the case of CIT Vs. Daulat Ram Rawatmull [1972 (9) TMI 9 - SUPREME COURT].Therefore, the credits appearing in the other bank accounts could not be held to be income of the assessee.
Adjudication on Merits - Credit Entries Received from Nagaland bases entities / individual - HELD THAT:- As we find that the debit / transfer entries aggregating to Rs.243.19 Crores have been treated to be the assessee’s income on the allegation that assessee’s unaccounted income has been routed through these accounts for the benefit of group as a whole. However, in para 7.10, we have already taken a position that the credit transfer received by the other family members and group concerns could not be assumed to be assessee’s undisclosed income since it is nowhere been established by the lower authorities that the assessee was de-facto owner of either Nagaland based bank accounts or the owner of bank accounts of various recipients. The other family members and group concerns of the assessee were separate Income Tax assessee and subjected to separate assessment. Therefore, the credit received in those accounts could not be held to be the assessee’s income. Under these circumstances, the assessee’s onus would remain confine to explain the credit received by it in his own bank accounts. Further, the assessment proceedings for AY 2018-19 have already been quashed by us on legal grounds. Therefore, at the outset, the addition, to that extent, could not be sustained in the hands of the assessee.
Assessee’s onus to prove the ingredients of Sec.68 with respect to unsecured loan received from Shri G.K. Rengma and M/s Excellence Associates - Undisputedly the transactions have taken place through banking channels. On the basis of all these documentary evidences, it could be said that the requisite onus as required to be discharged u/s 68 was duly discharged by the assessee and it was the onus of the revenue to dislodge the same - upon perusal of orders of lower authorities, we find that no cogent material or evidences are on record to dislodge the claim of the assessee rather the additions are based more on allegations, surmises, conjectures and mere suspicion. In such a case, these amounts could not be considered to be the assessee’s undisclosed income. We order so. In the result, the addition to the extent of Rs.5,44,90,000/- is sustained under this head and the balance additions stand deleted. The corresponding grounds raised by the assessee in all the years stands partly allowed.
Cash deposit in the bank accounts of the assessee - Since the assessee group has incorporated the alleged cash payment of Rs.16.10 Crores for purchase of immoveable properties in these cash flow statements, the separate addition made to that extent would also not be sustainable. Even otherwise, the properties have not been purchased by the assessee rather this addition is subject matter of consideration in other family members / entities which are separate taxable entities and therefore, the addition for those entities would not be sustainable in the hands of the assessee.
Other Credit Entries in Bank Account of the assessee and other family members / entities - Since the assessment for AY 2018-19 has been quashed by us, the additions to that extent are otherwise not sustainable. The remaining credit entries for Rs.353.64 Lacs pertain to AYs 2012-13 & 2017-18. Out of this amount, the assessee has identified amount of Rs.88.50 Lacs being the entries which are lacking complete details / supporting evidences. The remaining entries are either not in the nature of income and a part of these entries has already been disclosed under IDS 2016. Few of the entries have already been disclosed in the Income Tax Returns of the assessee. The complete details of these entries have been placed by the assessee on page numbers 58 and 59 of Paper Book No.3A. We have perused the same. We find that all the other credit entries are in the nature of maturity proceeds of LIC, Chit money received by the assessee, directors loan withdrawn, mutual funds proceeds from UTI, refunds etc. These entries are not in the nature of assessee’s income. Therefore, the additional amount of Rs.88.50 Lacs as worked out by the assessee is found to be correct and therefore, sustained in the hands of the assessee. The remaining addition stands deleted since the same is not the in nature of income.
Credit for income disclosed under IDS 2016 has not been given to the assessee - We find that this credit was not given in the absence of requisite declarations / certificates forthcoming form the assessee. The assessee has now placed all these documents in the paper book which has been detailed in Table 35 of written submissions. Further, the assessee has already considered such declaration while working out additional income which has also been accepted by us. Therefore, the assessee is left with no grievance on this account.
Non consideration of additional evidences / documents as filed by the assessee before Ld. CIT(A) on 15.03.2021 and 16.09.2021 - Since, we have substantially accepted the working of the assessee which has been considered after incorporating all these evidences, the assessee is left with no grievance on this issue. The remaining grounds are either general or consequential in nature which does not require any specific adjudication on our part.
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2023 (1) TMI 1462
Eligibility of exemption as per section 10(2A) - share of profit received from the partnership firm - assessee (LLP) is deriving income from business in the form of running of plant and machineries and share of profit from partnership firm - HELD THAT:- Assessee (LLP) is a partner in M/s. M.S. Enterprises and assessee has claimed exemption u/s 10(2A) of the Act on the share of profit received from M/s. M.S. Enterprises. The section 10(2A) of the Act grants exemption to a person being a partner of firm which is separately assessed as such, his share in the total income of the firm. The firm has been defined in section 2(23) of the Act, which includes LLP also. The Act is very clear that the LLP is to be treated as a firm. A firm can be a partner in other partnership firms. There is no restriction in the income tax Act for becoming partner by firm in other partnership firms. The assessee is a LLP and has received share of profit from other partnership firm which has been claimed as exempt income.
As relying on case of Radha Krishna Jalan [2007 (8) TMI 42 - HIGH COURT , GAUHATI] we hold that the assessee is eligible for exemption u/s 10(2A) of the Act from the share of profit received from the partnership firm. No much weightage on the case law relied by the ld. DR. Accordingly, allow the appeal of the assessee.
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2023 (1) TMI 1461
Restoration of CENVAT Credit/Input tax credit - lack of opportunity given by the Tribunal when the Tribunal had taken up an issue of law suo moto, which was also not the case of the Respondents before the Tribunal and the Appellant had no opportunity to deal with the same.
Whether the Tribunal could have given an opportunity to the parties before coming to the conclusion that in the event refund of service tax was not due, the Appellant was entitled to restoration of Cenvat Credit/ Input Tax Credit for transition under section 140 of the Central Goods & Services Tax Act, 2017 and when this case was not put before the Tribunal by either of the parties whether remand to the Tribunal on this count is necessary?
HELD THAT:- From the facts and the arguments before the Tribunal and the reasoning given by the Tribunal, it is clear that the ground on which the Tribunal has remanded the proceeding was neither the case of the Appellant nor of the Respondent nor any opportunity was given to the parties to meet this case. This assertion of the learned counsel for the Appellant is not denied by the learned counsel for the Respondent.
There is a consensus that a new ground is made out by the Tribunal while passing the impugned order. The grievance of the Appellant, that when on the completely new ground order was to be passed then the Appellant should have been given an opportunity of being heard, is not merit-less. In view of the admitted position that the ground on which the Tribunal has passed the impugned order was not the case of the Appellant or the Respondent and both were not given an opportunity of hearing, there are no option but to set aside the impugned order and restore the matters to the file of the Tribunal to decide it as per law.
The issue is answered in favour of the Appellant - appeal allowed.
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2023 (1) TMI 1460
Money Laundering - proceeds of crime - provisional attachment order - rights of a secured creditor under SARFAESI Act would prevail over an order of attachment under the PMLA Act, or not - security created in favour of a bonafide lender who has exercised due diligence can be adversely impacted by an order of attachment under the PMLA Act - HELD THAT:- Prima facie, considering the appeal memo and interim application, it does appear that properties of additional respondent no.1 and additional respondent no.2, have been charged / mortgaged to appellant. It is possible that additional respondent nos.1 and 2 may argue that action by respondents under the provisions of PMLA was incorrect or malafide but that is a separate issue and that cannot deny the fact that the property has been secured to appellant.
These are issues which requires consideration. But until these issues are considered, if the property which has been attached under the provisions of PMLA, which are also secured to appellant are not disposed, the property may get wasted or encroached upon and the value would also get eroded. It would be to nobody's benefit. Therefore, purely by way of an interim adhoc arrangement, we pass the following order:
(a) The properties which are mortgaged / charged to appellant may be sold by appellant under the provisions of SARAFESI Act. The sale proceeds shall be deposited with the Registrar, Appellate Side, Bombay, of this court within one week of receiving the sale proceeds to be disbursed in accordance with any final order this court may pass in the appeal.
(b) As and when appellant deposits the money with the Registrar, the registrar shall invest the amount in a fixed deposit with a nationalised bank for a minimum period of 13 months to be renewed for the same period until the disposal of the appeal unless otherwise ordered.
(c) Since this is only an adhoc arrangement, we clarify that we have not expressed any opinion on appellant’s case that they rank higher in priority as compared to respondent.
Interim Application disposed.
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2023 (1) TMI 1459
Classification of goods - rate of tax - all types of jaggery are covered under the Notification No. 6/2022-Central Tax (Rate) dated 13-07-2022 or not? - HELD THAT:- The Applicant states that they are selling commission agents of Jaggery; that the jaggery is loosely wrapped and stitched in gunny bags or loosely wrapped in plastic covers for easy transport and to avoid unnecessary wastage in transportation, but not pre packed or labeled.
The Applicant states that agriculturist manufacture the jaggery mainly with sugar cane juice by mixing necessary chemicals in minor portion; that the boiled sugar cane juice will be put in approximately 5kg, 10kg and 30kg pots and it will be in the form of lump (jaggery). The weight of none of the lumps are similar to each other; that the jaggery will be brought to APMC Yard wherein it will be examined by APMC Authority. In APMC Yard it will be handed over to the godown of selling commission agent and after bidding, the goods will be given to purchaser and there after weighment is made before the purchaser.
The entry 91A says Jaggery of all types including Cane Jaggery (gur), Palmyra Jaggery, pre-packaged and labelled; Khandsari Sugar, pre-packaged and labeled is exigible to CGST at 2.5%. which means all types of jaggery which are prepackaged and labeled is exigible to CGST at 2.5%.
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2023 (1) TMI 1458
Levy of Service tax - supply of Work-wear on rent/ lease basis as per the requirement of each customer - supply of tangible goods service or not - declared service or not - HELD THAT:- From the decision in M/S LINDSTROM SERVICE INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX [2019 (8) TMI 427 - CESTAT CHANDIGARH], it is observed that the CESTAT’s two benches have taken a consistent view that the service in question is not taxable under supply of tangible goods for use or under the declared service. Therefore, following the aforesaid decision in the present case also, the issue deserve to be decided in the favour of the assessee.
As regard, the submission of learned Authorized Representative that against the aforesaid two Chennai Tribunal’s order, the Revenue has filed appeal bearing No. Civil Appeal No. 6459 of 2021, we find that as of now either side could not produce any stay order staying the operation of the Chennai Tribunal’s Order, therefore, mere filing of appeal before the Hon’ble Supreme Court will not of any help to the Revenue.
Appeal of assessee allowed.
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2023 (1) TMI 1457
Classification of goods - Fire TV sticks - Benefit of Serial No. 20 of Notification No. 57/2017-Customs dated 30.06.2017 - applicability of time limitation - Section 28KA of the Customs Act - HELD THAT:- Section 28KA of the Customs Act was inserted by the Finance Act, 2018, to provide an appeal in respect of any ruling. The Customs Act is a special Act and Chapter-VB of the Customs Act, which contains provisions relating to advance rulings, provides a special scheme for the stated purpose. The time for appealing any order/ruling made by the CAAR was restricted to a period of sixty days from the communication of the ruling or order. However, the court can extend the same by a further period of thirty days if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the stipulated period of sixty days - The period of limitation, as prescribed under Section 28KA of the Customs Act, is not the period as prescribed under the Limitation Act, 1963. Thus, in terms of Section 29(2) of the Limitation Act, the provisions of Section 4 to 24 of the said Act shall apply only to the extent not expressly excluded by such special law.
The proviso to Section 28KA(1) of the Customs Act empowers the High Court to extend the period for filing an appeal by a further period of thirty days, subject to the condition that the court is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the specified period of sixty days. It is clear from the plain language that the court’s power to extend time is restricted to a period of thirty days. It would have no power to extend the time for filing the appeal beyond the said period even if it is satisfied that the appellant was prevented by sufficient cause from filing the said appeal within the stipulated period - It is also well settled that the right to appeal is not an inherent right but one conferred by a statute. It follows that the statute may restrict or truncate the said right.
In the present case, this appeal was filed on 14.07.2022. The learned counsel appearing for the appellant submits that the impugned ruling was communicated to the concerned appellant on 22.03.2022. He states that although the copy of the ruling was received by the concerned Commissionerate in Mumbai on 09.12.2021, it was received by the Commissionerate in Delhi much later on 22.03.2022. He states that the Commissionerate of Delhi was also a party to the application filed by the respondent; therefore, for the purpose of limitation, the date of receipt of the impugned ruling must be reckoned as 22.03.2022.
Thus, it is apparent that even if the appellant’s contention is accepted that the date of communication of the impugned ruling is 22.03.2022 and not 09.12.2021, the present appeal is beyond the period of ninety days from the said date. It was also feebly suggested by the learned counsel appearing for the appellant that the month of June be excluded from the period of limitation since, the period of thirty days, beyond the stipulated period of sixty days for filing the appeal, expired on 20.06.2022. At the material time, this Court was closed for vacations. The said contention is ex facie erroneous. The period, which can be extended in terms of the proviso to Section 28KA(1) of the Customs Act, cannot exceed thirty days.
The appeal is dismissed as barred by limitation.
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