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Showing 1 to 20 of 1543 Records
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2024 (2) TMI 1545
Denial of Registration u/s 12A - whether the CIT had rightly declined registration u/s 12AA by holding that the objects of the assessee were not of education and thus charitable in nature? - as urged that all the objects mentioned by the assessee in the trust deed were not of charitable nature - HELD THAT:- The objects mentioned by the assessee were thoroughly examined by the Tribunal and it came to the conclusion that the same were genuine i.e of providing education. It was also noticed that the assessee was running Dental College and activities were by way of constructing the building for establishing the Dental College. The said findings have not been shown to be perverse or erroneous in any manner. The CIT was, thus, not right in declining registration u/s 12AA of the Act to the assessee. No substantial question of law arises.
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2024 (2) TMI 1544
Management, Maintenance and Repair Service - commercial complex / shopping mall - providing services at no profit no loss - case of appellant is that they are not liable to pay any service tax, for the reason that they are neither collecting any service charges and that there is no relationship of service provider and service recipient with regard to the assessee and the owners of the shops - pure agent - it was held by CESTAT that 'assessee is liable to pay service tax on the charges collected for rendering management, maintenance or repair services of Spencer Plaza' - HELD THAT:- Delay condoned.
Petition admitted.
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2024 (2) TMI 1543
Amnesty scheme - request for adjustment of an alleged amount due from the government against the tax arrears settled under the Kerala Amnesty Scheme 2020 - HELD THAT:- The Amnesty Scheme does not contemplate adjustment of any amount which may be due to an assessee. If any amount is due to the assessee, he may take the appropriate course of action to recover the said amount from the Government. When the provisions of the Amnesty Scheme do not contemplate adjustment of the amount and no such request was made before the 2nd respondent before the passing of the order dated 12.02.2021 under the Amnesty Scheme, the petitioner cannot seek a modification of the said order by requesting to adjust any amount allegedly due to him from the Government.
Once an application under the Amnesty Scheme has been decided and an order has been passed, the authority becomes functus officio to modify the said order. If any amount was due to the petitioner, the petitioner could have taken recourse to appropriate remedy. The petitioner could not get a right to get the order passed under the Amnesty Scheme modified on the ground that some amount was due to the petitioner.
Petition dismissed.
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2024 (2) TMI 1542
Dismissal of a suit for return of advance sale consideration - applicability of time limitation - Is the plaintiff entitled for charged decree in terms of Section 55(6)(b) of the Transfer of property Act? - HELD THAT:- Understanding the scope of the first limb of Section 55(6)(b), it is held that, where the non-performance is not due to the fault of the buyer and the seller, or where both are at blame/default, or where the default occurred at the hands of the vendor, it cannot be said that the buyer has improperly declined to accept delivery and hence he is entitled for charge over the property for the purchase price paid and interest. Of course, whether interest is to be granted and if so at what rate are all matters for determination based on the facts of each case.
The defendants allege that the plaintiff did not have sufficient funds with him to get the sale deed executed. The plaintiff was evading performance of the contract, it is alleged. No evidence is adduced by the plaintiff to prove that he was possessed of sufficient means to go ahead with the transaction. This tells upon the readiness of the plaintiff to go ahead with the transaction. On appreciating the entire evidence it appears that both the plaintiff and the defendants (their predecessor Rosamma) contributed to the non-performance of Ext.A1 agreement. As held supra, in such a situation, when both the plaintiff and the defendant are at fault or were not eager in the performance of the agreement, the plaintiff is entitled for charge over the property for the sale consideration paid. A decree is liable to be granted to the plaintiff.
Now coming to the grant of interest, taking note of the entire facts including the delay in institution of the suit, it is deemed appropriate that interest be declined till the date of suit. The plaintiff could be granted interest at the rate of 6% per annum from the date of suit till the date of realisation.
Conclusion - The plaintiff's claim for a personal decree is time-barred, but the claim for a charged decree is within the limitation period and valid. The plaintiff is entitled to recover the advance payment with interest, charged on the property, due to mutual fault in non-performance.
The decree and judgment of the trial court are set aside. The plaintiff is granted a decree for realisation of Rs. 12,50,000/- with interest at the rate of 6% per annum from the date of suit till realisation charged on the plaint schedule property - Appeal allowed.
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2024 (2) TMI 1541
Reduction in claim u/s 80-IA on power undertakings - rejection of allowability of Reliability charge of Rs. 1.50 per unit in computing Transfer Price of Power for the purpose of deduction u/s 80-IA - HELD THAT:- We note that the issue has already been decided on principles in favour of the appellant in earlier year (i.e. in AY 201415) wherein it has been held that the reliability charge shall form part of the transfer price of power. We further, from the facts of the assessee’s case as stated above, where there is both exclusivity (resulting in huge capex for single user) advantage and uninterrupted power supply, we on facts, agree with the assessee’s claim that Rs. 1.50/unit is the minimum reliability surcharge at arm’s length principles.
As regards the contention of the CIT (A) that the said rate of reliability charge does not pertain to Rajasthan and hence not applicable, in this regard, the co-ordinate bench in AY 2014-15 in assessee’s own case has held held both the orders of commission does not pertain to the state of Rajasthan being state in which power undertakings of the assessee is situated, however we do not think that the aforesaid fact is of much relevance here as what is to be considered is whether the concept of collection of reliability charge is justifiable and being practiced in the industry or not. We note that such concepts are not unfamiliar and have become common industry practice in some states - Decided in favour of assessee.
Disallowance on account of claim of Education Cess - On this issue we found force in the arguments of the ld. DR that in view of the amendment made in the law with retrospective effect of 01.04.2005 by inserting explanation 3 to section 40(a)(ii). Therefore, we see no merits in the ground No. 3 raised by assessee and therefore, the same is dismissed.
Deduction u/s 80IA in computing Book Profit u/s 115JB - HELD THAT:- When two views are possible in a statutory tax provision, the one in favour of the assessee be adopted. This ensures that if there is ambiguity or multiple interpretations, the interpretation that benefits the taxpayer should be preferred. Accordingly, in the background of the afore said discussion, and binding precedents cited, we are of the considered opinion that the order of the ld. CIT (A) is not sustainable.
DR could not show us any decision of equal binding strength contrary to the above high court decisions. The question that raises as there are conflicting decisions before us why the issue not referred to special bench, as it is judicial principle that when two conflicting decisions of same strength of co-ordinate benches matter should be referred to special bench for resolution of the conflicting view. This principle does not apply where there are decisions of higher forum i.e. Hon’ble High Court, then in that case it should not be referred to a special bench but a view provided by Hon’ble High Court should be followed. It may also happen that such view may be provided by Hon’ble High Court that too being the solitary High of court. In the absence of any conflicting decision of equal strength, the view provided by the high court binds us.
We reverse the decision of Ld. CIT (A) and in terms of the finding recorded here in above the ground no. 4 of the appeal of assessee is allowed.
Depreciation on expenditure incurred in respect to acquisition of leasehold rights on land u/s 32(1)(ii) being business or commercial right of similar nature - appellant has submitted that such rights have been acquired for carrying on the business and hence is in the nature of “business or commercial right” eligible for deprecation @ 25% u/s 32(1)(ii) of the Act - HELD THAT:- On being consistent to the findings so recorded by the coordinate bench on the issue in the year under consideration we note that such intangible assets being "business or commercial right" is entitled to depreciation u/s 32(1)(ii) of the Act. Hence, AO is directed to grant depreciation @25% on such leasehold rights in accordance with the provision of section 32(1)(ii) of the Act. Ergo we decide accordingly, and the additional ground no. 1 raised by the assessee is allowed.
Allowability of interest paid on late deposit of TDS as business expenditure u/s 37(1) - We find merit in the contention of the ld. AR of the assessee that the issue in question is squarely covered in favour of the assessee for AY 2014-15 AO is directed to reduce interest on TDS while computing Total Income.
Disallowance on account of deduction u/s 80IA on account of Solid Waste Management System - quantum determination - HELD THAT:- The appellant is eligible for tax holiday u/s 80IA in respect of its Solid Waste Management Systems. Since solid waste management unit is responsible for doorstep delivery of clinker to the Cement unit, therefore entire savings on account of clinker including freight and handling expenses of such clinker at cement unit should be considered as transfer price of solid waste. Freight should therefore form part of benchmarking mode.
Allowance of tax holiday u/s 80IA in respect of its Water Treatment System - Benchmarking based on quotation is a recognised method under Rule 10AB of Income Tax Rules for determining transfer pricing. Bonafide quotations are duly covered under the expression ‘price which has been charged or paid, or would have been charged or paid’ used in Rule 10AB of the Rules as held in CIT vs Toll Global Forwarding [2015 (12) TMI 1513 - DELHI HIGH COURT].
Profit margin earned by the appellant is not relevant when the transaction is at arm’s length as held by Hon’ble Pune Tribunal in MSS India [2009 (5) TMI 600 - ITAT PUNE-A]
In the present facts of the case, CPM method cannot be applied since determination of gross profit margin is a difficult and subjective exercise in absence of proper data. Decided against revenue.
Allowance on account of Incentives in the form of Sales Tax Subsidy, Electricity Duty Exemption and Excise duty Exemption received by assessee in nature of capital receipt and hence not taxable as income - HELD THAT:- As both the difference between reward and assistance is summarized as to the fact that rewards acknowledge accomplishments, while assistance focuses on aiding and supporting others. Thus, looking to these differences we are of the considering view that the assessee has not received the rewards but has received the assistance and after the amendment made in the section 2(24)(xviii) such assistance is considered as income of by the Finance Act, 2015 and therefore, all the arguments made by the ld. AR of the assessee has no leg to stands.
Thus, on the ground raised by the assessee after going through the records and arguments of both the parties noted as under :
a) Under section 2(24) of the Act a capital receipt cannot be charged to income tax unless it is specifically included as income therein.
b) The Finance Act 2015 introduced section 2(24)(xviii) wherein any form of subsidy was brought into definition of income. Such subsidy maybe in case or in kind. It also includes grant cash incentive duty drawback, waiver, construction or reimbursement of all kind.
c) The exceptions are provided under clause (a) the subsidy or grant or reimbursement which is taken into account for determination of the actual cost of the asset in accordance with the provisions of Explanation 10 to clause (1) of section 43; or (b) the subsidy or grant by the Central Government for the purpose of the corpus of a trust or institution established by the Central Government or a State Government, as the case may be;
d) Therefore with effect from 1.4.2016 all such receipts are income.
e) All prior decision of all courts holding it to be capital receipt are now no more good laws.
f) Intention of this amendment is to be support the law with ICDS VII relating to the government grants.
g) Distinction is lift only with (1) grants pertaining to depreciable assets and (2) grants pertaining to non depreciable asset (3) grants received as compensation, waiver, reimbursement and (iv) other grants and (v) non monetary grants.
h) There is press release dated 05.05.2015 that it does not apply to individuals and having business income to save government relief measures.
i) When subsidy is included in the definition of income provision of section 14 shall apply to determine under which head said income falls. So section 14 will classify the income under the respective heads.
j) There is no amendment under section 28 or section 56 to include specifically subsidy taxable under those respective heads for the reason that such classification will depend upon the nature, purpose of such subsidy.
k) Amendment is constitutionally valid as held by Bombay High Court in case of Serum Institute of India Private Limited [157 taxmann.com 107].
l) Provision of section 145B(3) has also dealt with the year of taxability of the susidy.
m) In paragraph 12(g) of the Serum Institute decision (supra) the argument of absence of head of income was raised stating that in the absence align amendment in the Section 28, subsidy still remain outside the taxation. Court answered it by relying upon decision of apex court in the case Poona Electric Supply Co Ltd. [1965 (4) TMI 20 - SUPREME COURT] negated these arguments. So, now this argument is decided by the Bombay High Court against the assessee. Thus no merits in the grounds so raised by the assessee.
Deduction u/s 80IA in respect of captive power plant - As assessee has adopted Transfer Price for the purpose of power transferred by the Power Generating Units (‘PGUs’) to the Cement Manufacturing Unit (‘CMU’) based on annual average rate of power sold by the State Electricity Board (‘Grid/SEB’) during the year to the nearby manufacturing units of independent assessees in the State of Rajasthan by applying Comparable Uncontrolled Price (‘CUP’) Method. These grounds have been extensively dealt with in while dealing with Departmental Appeal for AY 2015-16 and in the light of our findings recorded therein, we find no infirmity in the order of the ld. CIT (A).
Deduction u/s 80IA on eligible Solid Waste Management System as per Form 10CCB filed along with return of income - HELD THAT:- Restricting the said claim merely because the claim in the computation part of return is lower is not justified as it is the duty of the appellate authorities to determine correct tax liability of the assessee as laid down in NTPC vs CIT [1996 (12) TMI 7 - SUPREME COURT]
We further find that the full claim was quantified and reflected in the audited accounts of SWMS as well as in Form 10CCB both of which were duly filed along with the return of income. This fact makes the prayer of the appellant all the more stronger. When the claim is allowed on merit by CIT (A) and is in terms of audited accounts and form 10CCB uploaded with return of income and also in terms of amount reflected in the return read with notes forming part of the return, there is no reason to restrict the claim to the amount reflected in the computation part of the return. AO is therefore directed to allow deduction u/s 80IA on account of solid waste management system.
Addition on account of payment made to transporter -Whether addition can be made on the third party evidence without being shared to the assessee and without affording any cross examination to the assessee for countering those relied upon third party evidence? - HELD THAT:- As the assessee has filed copies of all invoices, bank statement as well as confirmation from the said party that submitting the evidence in support of the claim that the transactions are genuine. Hence, the onus now shifts to department to counter them and provide evidence that the transaction is not genuine. We find that the AO in the present case has not discharged its onus despite repeated requests from the assessee to provide documents to justify the addition. In view of the above facts, we find that Ld. CIT (A) was not justified in confirming the addition made by AO in summary without dealing with the contentions and his finding on the contention so raised by the assessee. This ground is therefore decided in favour of the assessee addition made of Rs 1 Crore on the basis of mere assumption and presumption is deleted. Ground No. 5 is therefore allowed.
MAT computation - compute Book Profit u/s 115JB of the Act after allowing deduction under Chapter VI-A, Part C, particularly u/s 80IA & u/s 80IC.
Exclusion of notional income while computing Book Profit u/s 115JB - HELD THAT:- We hold that notional income on account of bonds and debentures and on account of shares and mutual fund represents notional income and hence needs to be excluded while computing Book Profit u/s 115JB of the Act. Based on this observation the ground no 8 of the assessee is therefore partly allowed.
Excess levy of interest u/s 234C - HELD THAT:- Amendment to Section 115JB have been brought vide Finance Act 2017 bringing retrospective amendment to Sec 115JB w.e.f. 1-42016. Due to such retrospective effect, notional income accounted for the first time on adoption of Ind-AS became taxable u/s 115JB of the Act. It is a settled principle that law does not compel the assessee to perform what is impossible to perform in advance. Here, the assessee cannot be expected to estimate its total income considering retrospective amendment when at the time of payment of advance tax, no amendment was proposed by the legislature.
Performance of this impossible duty must be excused in accordance with the maxim, ‘lex non cogitate ad impossible’ as held in Cochin State Power and light vs State of Kerela [1965 (2) TMI 100 - SUPREME COURT]
Based on the above finding of the apex court read with the facts of the case, the ld. AO is directed to delete interest levied u/s 234C.
Depreciation @25% on such leasehold rights acquired in accordance with section 32(1)(ii)
Unexplained investments u/s 69B as purchases not fully disclosed in the books of account of the assessee - Addition merely on the premises that the same is not reconciling with the details available in the insight portal - HELD THAT:- As it is held by the various courts that the ld. Assessing officer holding co judicial power. His role is multifaceted and is not the only adjudicator but he serves as investigator when the assessee has furnished all the details he is duty bound to asked the assessee the specific defaults and the information in his possession read with the records provided by the assessee. The bench noted that how the assessing officer has proposed the addition and how ultimately he made the addition is without appreciating the information placed on record by the assessee. We see that there is no finding about details as available in the Insight Portal and only after being satisfied on the basis of corroborative evidence, such disallowance can be made. Since the ld. A.O. failed to point out any defect in the details supplied by the assessee, the disallowance made by the AO merely on surmises and suspicion is not sustainable and thus, directed to be deleted. Hence the ground raised by the assessee is allowed.
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2024 (2) TMI 1540
Recovery of duty drawback - export of “unlocked” mobile phones by Merchant Exporters - process of unlocking a mobile phone amount to the phone being taken into use or not - HELD THAT:- Issue notice.
List on 20.02.2024 alongwith W.P.(C) 9461/2023.
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2024 (2) TMI 1539
Recovery of excise duty (compounded levy amount and interest) under Section 3A of the Central Excise Act, 1944, and Rule 96ZP of the Central Excise Rules, 1944 - continuation of proceedings, after the omission of the provisions without any saving clause - HELD THAT:- In the facts of the case, admittedly the show-cause notices were issued prior to the year 2001 however, the proceedings continued before this Court and before the Tribunal thereafter and upon remand of the matter by the Tribunal before the Commissioner of Central Excise in the year 2009, the impugned order is passed in the year 2010 and in response to the remanded proceedings, the petitioner has raised the dispute with regard to the continuation of the proceedings after the omission of the Rules 96ZP and Section 3A of the Act before the Commissioner of Income Tax. However the respondent Commissioner has without considering such submissions, held that the provisions of Sub-rule 3 of Rule 3 of the Hot Rolling Mills Annual Capacity Determination Rules 1997 read with provision of Sub-rule 1 of Rule 96ZP will be applicable in the facts of the case and decided the issue against the petitioner by fixing the APC for the various periods from 1998-99 onwards by raising the demand of Rs.33,52,443/-.
On perusal of the impugned order, it appears that the respondent authorities have not considered the aspect of continuation of the proceedings. However, it is also true that at the relevant time, the decision of this Court in case of Krishna Processors [2012 (11) TMI 954 - GUJARAT HIGH COURT] was not available. This Court has delivered the judgment in case of Krishna Processors [2012 (11) TMI 954 - GUJARAT HIGH COURT] in the year 2012, which was considered by the Hon’ble Apex Court in the case of Shree Bhagwati Steel Rolling Mills [2015 (11) TMI 1172 - SUPREME COURT] in the year 2015 by confirming the same.
The Hon’ble Apex Court in case of Shree Bhagwati Steel Rolling Mills [2015 (11) TMI 1172 - SUPREME COURT] was mainly concerned with the levy of interest and penalty under Rules 96ZO, 96ZP and 96ZQ of the Central Excise Rules 1994 which were held to be ultra vires by this Court in the case of Krishna Processors and the rules relating to levy of penalty were struck down as being ultra vires and violative of Articles 14 and 19(1)(g) of the Constitution of India.
The Hon’ble Apex Court after considering the effect of the decision in case of The Fibre Board’s [2015 (8) TMI 482 - SUPREME COURT] wherein the view was taken that an “omission” would amount to a “repeal” after referring to several authorities of the Hon’ble Apex Court and G.P.Singh’s Principles of Statutory Interpretation, Section 6A of the General Clauses Act, 1897 and a passage in Halsbury’s Laws of England, arrived at the conclusion that “omission” would amount to a “repeal” for the purpose of Section 24 of the General Clauses Act and since the same expression namely “repeal” is used both in Section 6 and Section 24 of the General Clauses of the Act, the construction of the said expression in both the sections would therefore include within it “omissions” made by the legislature.
Conclusion - Neither Section 3A nor Rule 96 ZP existed on the statute book when the Commissioner passed the order in November 2010 as the aforesaid provisions have been omitted vide notification no.6/2001 dated 01.03.2001, the aforesaid rule was omitted whereas Section 3A came to be omitted vide Section 121 of the Finance Act 2001, which would amount to repeal of Section 3A as well as Rule 96(ZP). When the order dated 09/10 April, 2003 was passed by the Commissioner against which the appeal was preferred before the Appellate Tribunal the provisions were omitted.
Petition allowed.
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2024 (2) TMI 1538
Validity of Revision u/s 263 - deduction u/s 80HHC on the book profit has been wrongly claimed - HELD THAT:- We note that the ITAT while interfering with the order passed u/s 263 has principally taken note of the judgment rendered by the Court in Ranbaxy Laboratories Ltd. [2011 (6) TMI 4 - DELHI HIGH COURT] which had essentially held that once the AO had failed to make any additions in respect of matters on which the notice u/s 147 or 148 was founded, no other items forming part of the original order of assessment could have been reopened. The order framed by the Revisional Authority u/s 263 of the Act essentially compels the AO to proceed contrary to the above.
AO has pursuant to the order passed by the Revisional Authority framed a consequential order of assessment which forms subject matter of the connected appeal.
We note that the judgment in Ranbaxy Laboratories [2011 (6) TMI 4 - DELHI HIGH COURT] and the doubt which was expressed in respect of its correctness in Jakhotia Plastics Private Ltd. [2018 (1) TMI 1525 - DELHI HIGH COURT] were noticed in some detail by us while considering ITA 756 of 2023 [2024 (2) TMI 404 - DELHI HIGH COURT]
Thus, we admit these appeals on the following question of law:
Whether Ld. ITAT has erred on the facts and circumstances of the case in not appreciating Explanation 3 of Section 147 of the Income Tax Act, 1961 and whether the same would empower the Assessing Officer to assess or reassess income in respect of any issue which has escaped assessment notwithstanding the reasons recorded under sub-section (2) of Section 148 having not alluded to the same or formed the basis for reopening?
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2024 (2) TMI 1537
Copy of the sanction has not been made available - validity of sanction letter due to the absence of a Document Identification Number (DIN) - Petitioner submits that there is no DIN number mentioned in the sanction letter and, therefore, the document is invalid - HELD THAT:- Ashok Commercial Enterprises [2023 (9) TMI 335 - BOMBAY HIGH COURT] held that any document without a DIN number and which is not in conformity with the Circular No. 19/2019 (F.No.225/95/2019-ITA.II) dated 14th August 2019 shall be treated as invalid and shall deemed to have never been issued.
In the circumstances, since the sanction on which reliance has been placed is not valid, the impugned order is hereby quashed and set aside.
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2024 (2) TMI 1536
Appeal dismissed as being barred by limitation as it was filed beyond the prescribed period of three months and the condonable period of further one month as per sub-section (4) of Section 107 of the TSGST Act, 2017 - HELD THAT:- When the Special Act has prescribed a definite period of limitation and delay of one month beyond that can only be condoned, there is no basis to make any exception to the legislative intent. Reliance is placed on Ganesan represented by its Power Agent G. Rukmani Ganesan Vs Commissioner, Tamil Nadu Hindu Religious and Charitable Endowments Board and Ors. [2019 (5) TMI 1752 - SUPREME COURT] where it was held that 'The suo motu power has been given to the Commissioner to correct the orders of Joint Commissioner or the Deputy Commissioner even if no appeal has been filed within 60 days. Giving of suo motu power to the Commissioner is with object to ensure that an order passed by the Joint Commissioner or the Deputy Commissioner may be corrected when appeal is not filed within time under Section 69(1). The scheme of Section 69 especially sub-section (2) also re-enforces our conclusion that Legislature never contemplated applicability of Section 5 in Section 69(1) for condoning the delay in filing an appeal by applying Section 5 of the Limitation Act.'
Conclusion - Evidently, the scheme of the special statue i.e. TSGST Act does not permit application of the provision of Section 5 of the Limitation Act, 1963 for condonation of delay beyond the period of 1 month as provided under Section 107 (4) of the TSGST Act, 2017 - There are no error in the impugned order calling for interference under Article 226 of the Constitution of India.
Petition dismissed.
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2024 (2) TMI 1535
Revenue prays for and is granted four weeks' time to file counter affidavit. Petitioner shall have two weeks thereafter to file rejoinder thereto - For reason of interim order granted in the lead case, until further orders, payment of GST for grant of mining lease/royalty by the petitioner shall remain stayed.
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2024 (2) TMI 1534
Disposal of the suit filed by the assessee as claimed amounts from the State far in excess of that already disbursed which disbursed amounts also is claimed to have been utilized fully in providing flood relief - HELD THAT:- We have to immediately notice that though the amounts were siphoned off and deposited in an account of a fictitious firm, registered in the name of a fictitious person, the assessee admits to have utilized the said amounts in supplying relief material. There is also evidence to substantiate the operation of the accounts by the assessee.
Hence, as held by the Tribunal, the assessee cannot wriggle out of the liability unless the purchases and the money spent on relief material is substantiated, failing which the assessee would have to be taxed for the entire money’s received in the accounts.
We do not think that there is any reason to keep the matter pending till the suit is disposed off. As has been rightly noticed by the Tribunal, neither would the findings of the Assessment Officer have a bearing on the disposal of the suit nor would the findings in the suit have a bearing on the assessment to be carried out.
Assessee has not produced any material before the AO to substantiate the purchases made by him, from the amounts disbursed by the State Government for the purpose of providing flood relief. Tribunal has categorically noticed that no evidence was led by the assessee before the AO
A contention was raised based on Section 50 of the Disaster Management Act, 2005, but no certificate of utilization was produced by the assessee. The supply of relief material was the responsibility of the Corporation and if at all, the utilization certificate is obtained, it can only be by the Corporation. The assessee had no privity of contract either with the State or the Corporation to supply relief material and there is no question of a utilization certificate issued under the Disaster Management Act coming to the rescue of the assessee.
We find absolutely no question of law arising in the case and the question framed is one on facts and not on law.
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2024 (2) TMI 1533
Classification of 'PVC raincoats' for exports through the port of Nhava Sheva - to be classified under HSN code 392690 or HSN code 6201? - HELD THAT:- On plain reading of the provisions of Chapter Notes of Chapter 39 it is amply clear that the product in question i.e. PVC raincoats are not covered under any of the headings of the Chapter 39. The applicant has explained the manufacturing process of PVC raincoats whereby it is evident that the products to be exported by the applicant is raincoat which can be said readymade garment. The fact that raincoat is made of PVC does not render it to be considered as article of plastic. Thus, classifying PVC raincoat under Chapter 39 is not apropos to the provisions of Chapter Notes of Chapter 39.
The applicant has submitted that to manufacture PVC raincoat the small PVC sheets are generally not stitched with a needle and thread. Since PVC is nonporous, a needle would leave a large hole that would allow water to enter, making for a very ineffective raincoat, and weakening the seam. Instead, PVC seams are generally "welded" (sealed) with heat, or bonded by chemical means. Either way, the all pieces of materials are melt together, either thermally or chemically, and are permanently bound. Thus, it is a non-woven product. Chapter Note 1 of Chapter 61 states that "This Chapter applies only to made up knitted or crocheted articles". Therefore, by applying this chapter note 1 ibid it is amply clear that PVC raincoat can not be classified under heading 6101: Men's or boys' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets) wind-cheaters, wind-jackets and similar articles, knitted or crocheted, other than those of heading 61.03. Articles covered under heading 6103 are also knitted or crocheted.
Heading 6201 covers Men's or boys' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles, other than those of heading62.03. Heading 6203 covers Men's or boys' suits, ensembles, jackets, blazers, trousers, bib and brace overalls, breeches and shorts (other than swimwear). Plain reading of these two headings makes it clear that heading 6201 is the most suitable heading to cover raincoat, moreover, CTI 6201 4010 specifically covers--- Overcoats, raincoats, car-coats, capes, cloaks and similar articles (of man-made fibres).
'PVC raincoats' merit classification under CTH 6201 and more specifically under CTI 6201 4010 of the first schedule of the Customs Tariff Act, 1975.
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2024 (2) TMI 1532
Disallowance of interest expenses as the assessee had not started its business activities - ITAT deleted addition - HELD THAT:- ITAT's decision to allow the deduction of interest expenses u/s 57(iii) was upheld, based on the direct nexus between the borrowed funds and the interest income earned by the assessee. No justification to interfere with the view taken by the ITAT. The appeal raises no substantial question of law.
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2024 (2) TMI 1531
Expenses incurred are excessive u/s 40A(2)(b) - as during the assessment proceedings the said did not furnish any benchmarking analysis in order to justify expenses in relation to its related parties to substantiate its claim that the expense re not unreasonable in terms of the said provision of the Act - ITAT deleted addition - HELD THAT:-According to the ITAT as well as in our considered opinion, all material particulars had been duly placed before the DRP and the Assessing Officer failed to justify the invocation of the said provision. The ITAT has further found that the Department had failed to produce any material or establish from the record that the expenses claimed were inflated or unjustified. The Department had also not founded its allegation on a single comparable so as to even prima facie establish that the expenses had been unduly claimed.
Applicability of provisions of section 44BBB - It was found that the assessee was not executing a turnkey power project.
No substantial question of law.
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2024 (2) TMI 1530
Rejection of application under Section 95 filed by the State Bank of India - Demand Notice issued under Rule 7(1) of the 2019 Rules can be considered as Notice for invocation of guarantee for the purposes of filing Section 95 Application by a Creditor or not - HELD THAT:- The default by Guarantor has to exist on the date when Notice in Form-B is being issued. On reading Section 95, sub-section (4) and Rule 7 of 2019 Rules, the above is the only intendment of the legislative scheme, i.e. default on the part of Guarantor should exist on the date when Notice in Form-B has to be issued. The definitions of ‘debt’ and ‘default’ in Section 3 (11) and (12) of the IBC noticed. Default shall arise on account of non-payment of debt, when whole or part of it become due. ‘Debt’ means a liability or obligation in respect of a claim which is due from any person. Thus, for a default, debt has to be due and Debtor shall be only that person, to whom debt is due. A Personal Guarantor becomes a Debtor only when guarantee is invoked, making him liable to make the payment to the Lender.
The submission of the Appellant that use of the expression ‘and’ has to be read as ‘or’, shall not further the statutory object and purpose. Guarantor with regard to whom guarantee has not been invoked, shall not be a Debtor and no default can be committed by Guarantor, unless guarantee is invoked as per the terms of Deed of Guarantee. Thus, the insolvency resolution process against a Guarantor, against whom debt has not become due, is not understandable. The submission of the Appellant that word ‘and’ used in Rule 3(1)(e) has to be read as ‘or’ is rejected. Reading of word ‘or’ in place of ‘and’ shall be not in accordance with the statutory scheme and shall be against the statutory intendment.
The requirement of date, when the default occurred, itself contemplate the default by Guarantor, when Application is filed against Guarantor. Obviously, the default has to be of the Guarantor and mentioning of date when the default occurred, itself contemplate default on the part of Guarantor, i.e. invocation of guarantee as per Deed of Guarantee. Thus, non-mention of requirement of whether guarantee has been invoked and proof thereof, is inconsequential, since the date when default occurred is specifically asked for.
Conclusion - The application under Section 95 was rightly rejected by the Adjudicating Authority due to the lack of invocation of the guarantee.
There are no error in the order of the Adjudicating Authority, rejecting Section 95 Application filed by the SBI. There is no merit in the Appeal. The Appeal is dismissed.
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2024 (2) TMI 1529
Scope of Consumer under the provisions of the Consumer Protection Act, 1986 - borrower of a project loan, falls within the definition of ‘Consumer’ or not - HELD THAT:- A bald averment that company engaged itself in the post-production of the movie solely for the purposes of brand-building does not alter the fundamental nature of the transaction, i.e. the availing of credit facility from the appellant-bank, which was purely a business-to-business transaction, entered into for a commercial purpose. Post-production of a film involves multiple activities, which finally gives shape and presentation to a film, which is a commercial venture.
In Lilavati Kirtilal Mehta Medical Trust vs. Unique Shanti Developers [2019 (11) TMI 1824 - SUPREME COURT], this Court has observed that no straitjacket formula can be laid down for determining whether an activity or transaction is for a commercial purpose and has laid down certain principles which are to be kept in mind.
What is to be seen here is that whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the person who has availed the service. Therefore, the respondent No.1 is not a ‘consumer’ in terms of Section 2 (1) (d) (ii) of the Act.
Conclusion - The borrower was not a consumer, thus rendering the consumer complaint non-maintainable.
Appeal allowed.
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2024 (2) TMI 1528
Validity of order passed by ITAT without granting sufficient opportunity to the assessee - denial of natural justice - HELD THAT:- Tribunal by recording that no representative has appeared on behalf of the assessee and also on the previous occasions proceeded to decide the matter on merits. The nature of disputes involved for adjudication of the Tribunal are on factual aspects. The Tribunal being final fact finding authority was expected to grant sufficient opportunity to the assessee to submit his case.
Tribunal by proceeding to decide the appeal on merits without granting sufficient opportunity to the assessee, it would prejudice the assessee’s interest. The further appeal under Section 260 A of the Act before this Court would be on substantial questions of law. In the circumstances, we are of the view that the order of the Tribunal is not sustainable and the same needs to be set aside on the ground of violation of principles of natural justice.
Appeal is allowed. The appeal is remitted to Tribunal for fresh consideration after granting opportunity of hearing to the assessee/assessee representative and the revenue
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2024 (2) TMI 1527
Absolute confiscation of the goods imported - used motor vehicle - levy of penalty - entitlement to the benefit of Transfer of Residence (T.R.) under the Customs Act, 1962, for the importation of a used motor vehicle - principles of natural justice - HELD THAT:- The fact remains that indisputably, the appellant has been unable to evidence that the appellant has fulfilled the conditions of the T.R. as was conceded before the lower adjudicating authority; and indisputably, the appellant is therefore also unable to evidence compliance of the conditions of ITC (Hs) Schedule I- import policy appended to chapter 87, that are required to be adhered while importing a passenger vehicle, a restricted item.
However, that does not translate into a power to the customs authorities to give re-export as the sole option upon imposing a redemption fine, as if compelling a re-export. It is seen that a division bench of this Tribunal has held in the decision in HBL Power Systems Ltd v.CC, Vishakapatnam [2018 (7) TMI 793 - CESTAT HYDERABAD] where it was held that 'not only Section 125 but no Section of the Customs Act, 1962 gives any officer the power to compel anyone to import or export or re-export. This Section also does not give the Adjudicating Authority the right to give a conditional redemption saying “you can redeem only if you agree to re-export”.'
It is seen that for violation of the import policy with respect to car imports, a division bench of this Tribunal has held that absolute confiscation is not warranted in its decision in J. S. Gujral v Commissioner of Customs, Chennai, [2016 (3) TMI 607 - CESTAT CHENNAI].
Therefore, this Tribunal is of the view that the order of confiscation and imposition of penalty in the appellant’s case cannot be faulted. However, confining the option only to re-export on payment of redemption fine is opposed to the decisions aforementioned and is decidedly untenable - this Tribunal is of the view that the appellant is required to be extended the option to redeem the vehicle on payment of redemption fine.
The order of confiscation with an option to re-export on payment of redemption fine is hereby modified into an order of confiscation with an option of redemption of the vehicle. Given the facts and circumstances of this case, the penalty imposed under Section 112(a) is also reduced to Rs.1,00,000/-
Conclusion - i) For restricted goods, absolute confiscation is not justified; redemption should be allowed on payment of applicable fines and duties. ii) Section 125 of the Customs Act does not empower authorities to impose conditions like re-export for redemption. iii) The penalty imposed under Section 112(a) should be proportionate to the violation and circumstances. iv) The adjudicating authority must adhere to principles of natural justice and cannot ignore appellate directions.
The matter is remanded to the adjudicating authority for re-determination of duties and redemption fine, with instructions to consider issuing a waiver for detention and demurrage charges - appeal disposed off by way of remand.
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2024 (2) TMI 1526
Dishonour of Cheque - presumption as regards validity of cheque - seeking a forensic opinion to compare the contents of the cheque with the signature of the petitioner - HELD THAT:- Attention drawn to the judgment in Bir Singh [2019 (2) TMI 547 - SUPREME COURT], wherein it has been observed that even if a blank cheque leaf is voluntarily signed and handed over by the accused towards some payment would attract the presumption under Section 139 of the Act and in the absence of any cogent evidence to show that the cheque was not issued in discharge of the debt, the presumption would hold good.
It is not in dispute that in the instant case, the accused has signed the cheque. The only dispute is with regard to the age of the ink used in making the signature on the cheque and the age of the signature and contents of the cheque.
It is found that the application filed by the accused before the trial Court was wholly frivolous and that the trial Court had rightly rejected the said application. The High Court ought not to have allowed the said application and thereby allowed the revision petition of the respondent-accused.
Conclusion - i) The age of the ink used in the signature and the contents of the cheque were the only points of contention in the present case. ii) The accused's application before the trial court is found to be frivolous, and the trial court's rejection of the application is deemed appropriate.
The impugned order set aside - appeal allowed.
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