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Showing 1 to 20 of 1454 Records
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2024 (6) TMI 1454
Classification of goods intended to be imported - Menthol Scented Sweet Supari and Flavoured and Coated Illaichi - to be imported under the CTH-0802 80 or under CTH-2106 90? - HELD THAT:- These processes as described and carried out on the subject products are essential for the preparation of the subject goods as mouth freshener and goods after subjecting to such processes cannot be ordinarily used for any other purpose. There is nothing on record to dispute claim of the applicant. The betel nut products commonly known as supari is covered under sub-heading 2106 90 30 of this chapter. Applicant has relied upon C.B.I. & C. Circular No. 163/19/2021-GST, dated 6th October, 2021 for their claim to the classification of scented sweetened supari.
Since the product under consideration is Flavoured and coated Illaichi (Cardamom) which applicant has claimed to be edible product in terms of supplementary note 5(b) of the chapter 21 of the Customs Tariff Act, 1975 examination of relevant CTHs under chapter 21 is essential.
Applicant has referred to the C.B.I.C. Circular No. 163/19/2021-GST dated 6th October, 2021 issued based on the recommendations of the GST Council in its 45th meeting held on 17th September, 2021 for clarifying classification aspects of the scented sweet supari and flavoured coated illaichi. It is found that both the products will be subjected to the processes before their importation and hence it is pertinent to consider the contents of the CBIC circular noted earlier in view of the provisions of the Section 3(7) of the Customs Tariff Act, 1975.
In the instant case menthol scented sweet supari does not contain lime, katha (catechu) and tobacco. It will specifically contain menthol. Due to carrying out of such processes this product is not classifiable under Chapter 8 of the Customs Tariff Act, 1975. On the background of contending classifications, relevant chapter notes & supplementary notes, CBIC Circular referred above, explanations in the IGST Rate Notification amended from time to time, and the Section 3(7) of Customs Tariff Act, 1975 instant product - betel nut product known as supari -menthol scented and sweet - is more appropriately classifiable as a betel nut preparation under chapter 21 i.e., CTH 2106 9030 than in any of the headings under Chapter 8. CBIC circular legally supports this view.
Conclusion - “Menthol Scented Sweet Supari” merits classification under CTI 2106 90 30 and “Flavoured and coated Illaichi” merits classification under CTI 2106 90 99 of the First Schedule to the Customs Tariff Act, 1975.
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2024 (6) TMI 1453
Acquittal of the accused - it is alleged that the respondent No. 2 had physical relations with appellant, on the pretext of marriage and promise to give her a job - HELD THAT:- The law with regard to the scope of interference by the Appellate Court in an appeal against acquittal, is no longer res integra.
In SHEO SWARUP AND ORS. VERSUS THE KING-EMPEROR [1934 (7) TMI 17 - PRIVY COUNCIL], one of the earliest case dealing with the scope of the Appellate Court against an order of acquittal, the Privy Council held 'Sections 417, 418 and 423 of the Code give to the High Court full power to review at large the evidence upon which the order of acquittal was founded, and to reach the conclusion that upon that evidence the order of acquittal should be reversed. No limitation should be placed upon that power, unless it be found expressly stated in the Code. But in exercising the power conferred by the Code and before reaching its conclusions upon fact, the High Court should and will always give proper weight and consideration to such matters.'
The law on the issue i.e. scope for interference in an appeal against acquittal can very broadly be summarized as follows; that in exceptional cases where there are compelling and substantial reasons; and where the judgment under appeal is found to be perverse, clearly unreasonable, manifestly erroneous, contrary to the evidence on record, or contrary to law, and the findings have been arrived at, by ignoring or excluding relevant material or by taking into consideration irrelevant/inadmissible material or is `against the weight of evidence’ or if the finding so outrageously defies logic as to suffer from the vice of irrationality, the Appellate Court can interfere with the order of acquittal. However, whilst doing so, the Court has to bear in mind the presumption of innocence of the accused and further that the trial Court’s acquittal bolsters the presumption of his innocence; and that interference in a routine manner, only because another view is possible should be avoided.
It is the appellant’s case that she got married to the respondent No. 2 as per Hindu rites and customs. The evidence of the neighbours also does not, in any way, further the prosecution case.
Conclusion - Keeping in mind all the sections alleged as against the respondent No.2. In the facts, there are no infirmity in the said judgment and as such, no interference is warranted.
Appeal dismissed.
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2024 (6) TMI 1452
Process amounting to manufacture - activity of printing of wedding cards and visiting cards - entitlement to the benefit of SSI Exemption N/N. 8/2003-CE dated 01.03.2003 - inclusion of value of blank cards supplied by the customers for printing in the value of finished wedding / visiting cards - invocation of extended period of limitation.
The activity of printing of wedding cards and visiting cards amounts to manufacture or not - HELD THAT:- The activity of printing on the cards supplied by the customers results into manufacture. Also, the Tribunal in the case of Venus Albus Co. Pvt. Ltd. [2018 (11) TMI 754 - CESTAT CHANDIGARH] held that the activity printing of cards, video albums, etc., amounts to manufacture
Entitlement to the benefit of SSI Exemption Notification No.8/2003-CE dated 01.03.2003 - HELD THAT:- In the present case, the printed wedding cards and visiting cards had been affixed with the brand name ‘Valavi’ which has been registered in the name of Valavi and Company as evident from the records referred in the order of the adjudicating authority bearing Certificate No.644263 dated 27.06.2007 (Trade Mark No.1239260 dated 24.09.2003) issued by the Registrar of Trade Marks, Mumbai under the Trade Marks Act, 1999; therefore, affixing the trade mark attracts Clause (a) of the SSI Exemption Notification No.8/2003-CE dated 01.03.2003. Therefore, appellants are not entitled to the benefit of the said Notification.
Inclusion of value of blank cards supplied by the customers for printing in the value of finished wedding / visiting cards - HELD THAT:- The learned Commissioner (A) in two appeals has rejected the appellant’s contention on the ground that the appellant had failed to place documentary evidences to exclude the value of cards from the transaction value; whereas in Appeal No. E/20552/2022, the learned Commissioner remanded the matter for verification of the claim of the appellant on the basis of documentary evidences to be placed by the appellant for proper verification. Since the views of the learned Commissioner (A) are inconsistent on the issue of inclusion of the value of the cards, supplied free by the customers to the appellant, in the total cost of the printed wedding cards, therefore, the matter needs to be remanded to the adjudicating authority to examine the issue in the light of Rule 6 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000 and on the basis of documentary evidences on record or that would be produced by the appellant.
Invocation of Extended period of limitation - HELD THAT:- It is brought on record that the appellant had neither registered with the department nor intimated about the activity undertaken by them, therefore, the finding of the authorities below on the issue of suppression of fact does not warrant any interference, as no contrary evidence has been placed by the appellant to the finding of the authorities below - the invocation of the extended period is justified.
Conclusion - i) The activity of printing cards, even if customized, constitutes manufacture under the Central Excise Tariff Act, 1985. ii) The use of another entity's brand name disqualifies a manufacturer from SSI exemption benefits. iii) The value of blank cards provided by customers may be included in the assessable value, subject to verification of evidence. iv) The extended period of limitation is applicable where there is a lack of registration and disclosure by the manufacturer.
The impugned orders are modified and the appeals are remanded to the adjudicating authority only for the purpose of calculation of duty afresh after computing the assessable value of the printed cards in accordance with provisions of Section 4 of Central Excise Act, 1944 read with Central Excise Valuation Rules, 2000; thereafter, the penalty and interest be calculated accordingly - Appeal disposed off by way of remand.
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2024 (6) TMI 1451
Addition u/s 14A - AO was not satisfied with suo moto offering of disallowance of expenditure w.r.t. earning exempt income - HELD THAT:- AO cannot straight away resort to Rule 8D. Sub-Section 2 of Section 14A and Rule 8D (1), both require the ld. AO to first consider the books of accounts of the taxpayer before resorting to Rule 8D.
AO must arrive at an objective satisfaction that the assessee's claim is incorrect. The satisfaction of the AO as to the incorrect claim made by the assessee in this regard is sine qua non for invoking the applicability of Rule 8D. Such satisfaction can be reached and recorded only when the claim of the assessee is verified. If the assessee proves before the ld. AO that it incurred a particular expenditure in respect of earning the exempt income and the AO gets satisfied, then there is no requirement to still proceed with the computation of amount disallowable as per Rule 8D.
We respectfully relied on the order of Bombay Stock Exchange Ltd.(2019 (11) TMI 105 - BOMBAY HIGH COURT). We reject the impugned appeal order. The addition amount is quashed. The appeal of the assessee is succeeded.
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2024 (6) TMI 1450
Scope of appealable order - whether the procedural order passed by the National Company Law Tribunal (NCLT), which directed the consolidation of multiple pending company petitions for adjudication by an appropriate bench, falls within the ambit of appealable orders under section 421 of the Companies Act? - HELD THAT:- In the instant case, when the proceedings were taken up on 09.05.2024, the bench of the Learned Tribunal, realized the fact that there are other Company Petitions which were pending, and hence the Tribunal thought it appropriate to refer the matter to the Hon’ble Chairperson for nomination of the appropriate bench, so that all the matters which are similar in nature, are decided together. This order itself will not amount to be an adjudication of any of the rights to the party to the proceedings.
The observation thus made that the court is not inclined to grant any Interim Relief, “at this juncture”, has been misconstrued by the learned counsel for the Appellant, as if it amounts to denial of the Interim Order. That may not be the case and the correct interpretation of the order for the reason being that the court has expressed his inability to consider the Interim Relief Application at that stage owing to the reasons already given in the preceding paragraph of the Impugned Order as well as this Judgment too. On this simple count and arguments itself, the Learned Counsel for the Appellant has burdened the litigant to this appeal with the preparation of 7 volumes of documents running to 1312 pages, for no good purpose or valid reason.
Conclusion - The appeal is not maintainable as the procedural order does not affect the appellant's rights.
Appeal dismissed.
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2024 (6) TMI 1449
Addition u/s 68 - cash deposited/ old currency as unexplained cash credits - quantum of cash sales was abruptly on higher side on a single day - HELD THAT:- As we find that the assessee has maintained consistent stock levels and recorded all transactions in the books of accounts. No discrepancies were found in the cash book, bank book, purchases, monthly stock, or audited books of accounts by the AO.
We have also noted the facts that the cash deposit in question is part of the sale which is explained by the assessee. AO has not doubted corresponding purchases and quantitative details. The profit element of such sale is already offered for taxation by the assessee. Income so declared by the assessee is also accepted by the AO. AO's additions were based on presumptions and assumptions without any cogent material evidence.
The judicial pronouncements relied upon by assessee highlight that once the underlying amount forms part of the sales duly accounted for in the books and the income element embedded therein has been accepted by the AO, the same amount cannot be added again u/s 68 of the Act as it would amount to double taxation.
We hold that the Ld. CIT(A) was justified in deleting the impugned additions. Assessee appeal allowed.
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2024 (6) TMI 1448
Classification of services - Clearing &Forwarding (C&F) agent services or Business Auxiliary Service (BAS) - whether the incomes shown under various heads are on account of cargo handling services for export and hence such services are exempted from payment of service tax? - recovery alongwith interest and penalty - Jurisdiction of Commissioner of Service Tax, Mumbai-VII over all the Branches of the assessee appellant for adjudication of the SCN dated 21.10.2008 - Extended period of limitation.
Classification of service - HELD THAT:- The ‘clearing and forwarding services’ relate to receipt of goods from factories or premises of manufacturer who is the principal and the C&F agent acts as his agent, in such receipt, warehousing of goods; receiving despatch orders from the principal manufacturer and arranging its despatch as per instructions of the principal and through his authorised transporters, maintaining records of stock, receipt and despatch on behalf of the principal, for which the C&F agents receives the remuneration as a commission, either as a percentage of turnover or in any other manner as variable commission based on certain performance indicators agreed upon between them. These aspects are clearly absent in the present factual matrix of the case. The present case is concerned only with handling of export/import cargo on behalf of the principal APLL HK, who is a vessel owner or a Non-Vessel Operating Common Carrier (NVOCC), involved in transportation of such cargo for their clients, both of whom are situated outside India. Thus, on the basis of facts of the present case, the services/activities performed by the appellant assessee as per agreement dated 01.01.2002 does not fall under the category of ‘clearing and forwarding agent’ service.
The taxable services under the category of ‘cargo handling service’ covers under its scope various activities related to handling of cargo in import/export operations through containerised or non-containerised freight listed out in the ’means’ portion of the definition; however, it the non-inclusion portion, the services relating to ‘handling of export cargo’ have been specifically excluded. Further, this service is limited in its scope, inasmuch as it covers only cargo handling activities and does not extend to financial, accounting, marketing services etc. as is the case of the appellants here. Thus, ‘cargo handling service’ is not relevant to the services provided by the appellant assessee in the present set of facts in this case.
The demand of service tax under Clearing and Forwarding agent service was confirmed on the basis of the terms and conditions of Forwarders Cargo Receipt (FCR) with specific reference to condition Sl. No.3 &4. On perusal of the sample copy of FCR produced by the appellant assessee, it is found that the appellant assessee had issued the document as agent of APLL HK for the ‘buyer’ situated abroad outside India to whom the export goods are sold by Indian business entity as ‘seller’ covering voyage of the export goods from India to destination port outside India, at the place of buyer - The word ‘customer’ has been explained in condition No.1 to include persons entering into an agreement with APLL HK, and therefore specific mention in condition No.3 & 4, that any services provided by appellant assessee to the customers could include the clients/customers or business entities who have entered into an agreement or arrangement with APLL HK - it is not feasible to extend such reference to the term ‘customer’ in the FCR document to business entities situated in India, and treat the appellant assessee as ‘agent’ of these business entities in India and thus cover the services provided by the appellants under the taxable category of Clearing and Forwarding agent services for charging service tax.
It is not found that appointment of sub-agents like APL Logistics and Warehouse Management Service (Hong Kong) Ltd. (APLL WMS), a company organized under Hong Kong laws, as unauthorized or deliberate action with an intention to evade tax. Further, it is also noted that the payment of service tax already made by the appellant assessee with effect from February, 2006 towards Business Auxiliary Services provided by them and with effect from June, 2006 towards Business Support Services, which have been appropriated in the impugned order for an amount of Rs.3,45,06,438/-.
Jurisdiction for adjudicating the SCN - HELD THAT:- Rule 3 of the Service Tax Rules, 1994 provide for appointment of officers for the purpose of exercising the powers under Chapter V of the Finance Act, 1994. We further find that the SCN dated 21.10.2018 does not specifically mention that the appellants had centralized registration during the relevant period and thus they had issued demand notice covering all the locations/branches of the assessee appellant. Further, we also find that in different jurisdiction i.e., at Chennai, the Commissioner of Service Tax, Chennai had also issued show cause notice for recovery of service tax payable on the business auxiliary services for the period from 10.09.2004 to 30.04.2006 and 10.09.2004 to 31.01.2006 vide SCN 12.07.2007 - the impugned order dated 31.12.2015 had by verifying the Chartered Accountant’s certificate dated 18.12.2015 had dropped the service tax demand in respect of interest earned on time deposits/fixed deposits. Therefore, there are no infirmity in the above decision of dropping of such demand on the basis of factual details and supporting evidential documents.
On perusal of CBEC instructions issued vide F. No. 137/ 50/2007-CX.4 dated 16.03.2007, it appears that these are the nature of administrative instructions for proper handling of files, documents and investigation records by a single authority having jurisdiction over service tax matters in respect of centralised registration, and the manner of handling transitional issues from decentralized registration to centralised registration. However, we do not find that the said instruction dated 16.03.2007 and provide any legal authority for exercise of the powers conferred on the officers by the Board under Rule 3 of the Service Tax Rules, 1994.
Further, the records available in the present case do not indicate that on account of centralised registration being taken by the appellant assessee in November, 2010, the SCNs pending adjudication at different locations were transferred to the Commissioner of Service Tax-VII, Mumbai. As the SCN in respect of the impugned order was issued on 21.10.2008, much prior to the centralised registration taken during November, 2010, there is no possibility for the jurisdictional Commissioner to assume jurisdiction over all the units of the appellant registered separately at different locations. In view of the above factual position, there are no merits in the appeal filed by the department stating that the dropping of the service tax demand raised in the SCN dated 21.10.2008 for locations other than Mumbai is legally sustainable.
Penalties proposed in the show cause notice - levy of penalty equal to the amount of service tax demanded under Section 78 ibid - Extended period of limitation - HELD THAT:- The legal provisions contained in Section 73(1) ibid provide that extended period can be invoked for demand of service tax, in situations where there is any involvement of fraud, or collusion, or wilful misstatement, or suppression of facts, or contravention of any of the provisions of this Chapter or of the Rules made thereunder with intent to evade payment of service tax, by the appellant assessee. Neither in the show cause notice nor in the impugned order, there is any specific allegation or finding for invoking such legal provisions - the Department claimed that the appellant by avoiding to provide the figures, had intentionally by design stopped the process of issuing to show cause notices by other jurisdiction, and thus they had intention to evade duty. We find from the factual details about various notices issued in other jurisdictions and that the entire data having been provided to the audit officers of the Department, there is no justification to claim suppression of facts in such a situation. Further, there is no evidence or any document to indicate that the appellant assessee in any manner had attempted to evade service tax. On the other hand, it is found that contrary to the claim of the Department, the assessee appellant had paid the service tax of Rs.3,45,06,438/- on various services for which service tax is payable under the Finance Act, 1994 - The invocation of extended period for demand of service tax in the present cases is not sustainable. Consequent to this, the penalty imposed on the appellants under Section 78 ibid also does not survive on the above grounds.
Conclusion - i) The services provided by the appellant did not fall under the 'Clearing & Forwarding Agent service' category and were not taxable under this category. ii) The services were taxable under BAS and BSS, for which the appellant had already paid service tax. iii) The Commissioner of Service Tax, Mumbai-VII, lacked jurisdiction over branches outside Mumbai. iv) Extended period of limitation and penalties also set aside.
Appeal allowed.
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2024 (6) TMI 1447
Levy of surcharge despite the total income was less than Rs. 50,00,000/- - Incorrect levy of additional interest u/s. 234B - HELD THAT:- The surcharge is leviable only when amount of income tax is computed where the total income exceeds Rs. 50,00,000/- and so on. Here in this case, the return of income is only Rs. 36,930/- so on this income, taxes shall be charged at a maximum marginal rate in terms of Section 164 of the Act.
Even after the trust is taxed at maximum marginal rate but for levying the surcharge, it is necessary that the slab of income which is chargeable to tax is exceeding Rs. 50,00,000/- and above. Thus, the interpretation and the observation of the ld. CIT (A) is ostensibly against the law. If CPC which is computer assisted programme has made a mistake, then at least ld. CIT (A) should have seen the law in correct perspective; or something should have been brought on record that there is any notification or interpreting the slabs provided in the Finance Act that even if income is less than Rs. 50,00,000/-, surcharge is leviable in case of AOP. Accordingly, the surcharge levied by the CPC is deleted. Consequentially, interest u/s. 234B has also got reduced.
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2024 (6) TMI 1446
Software development expenses - revenue or capital expenditure - HELD THAT:- The issue has already been decided in the assessee’s own case by the co-ordinate bench of the Tribunal [2024 (5) TMI 1544 - ITAT CHENNAI] by following the decision of the Tribunal we dismiss the ground by upholding the decision of the ld.CIT(A) of software development expenditure as capital asset and allowing the deprecation on the same @ 60%. The corresponding ground stand dismissed.
Recovery of Bad-Debt written off in the books of amalgamating Companies - HELD THAT:- Admittedly, this issue is covered against the assessee by the order of Tribunal in earlier years. In latest decision in [2024 (5) TMI 1544 - ITAT CHENNAI] held that after amalgamation, the assessee has all the rights as well as liabilities of amalgamating company which were transferred to it. Such recoveries of bad-debts were nothing but business receipts for assessee and therefore, assessable in its hands. Respectfully, following the same, we dismiss the grounds urged by assessee, in other three A.Ys. i.e. 2015-16, 2016-17& 2017-18 also.
Rate of depreciation on UPS - assessee claimed depreciation on UPS system @60% - AO restricted the same to 15% - HELD THAT:- We find that this issue has been decided by Tribunal in assessee’s favour. In for the A.Y. 2012-13 to 2014-15 [2024 (5) TMI 1544 - ITAT CHENNAI] the Tribunal confirmed first appellate order which allowed depreciation of 60%.
Disallowance u/s.14A r.w. Rule 8D - HELD THAT:- Tribunal in assessee’s own case [2024 (5) TMI 1544 - ITAT CHENNAI] for the A.Y. 2012-13 to 2014-15, accepted the propositions of Ld. AR. Following consistent stand of Tribunal, we direct Ld. AO to verify whether assessee’s own funds are sufficient enough to cover the investment. If so, interest disallowance would not be justified. Further, the indirect disallowance of 0.5% should be computed only on those investments which have yielded exempt income during the year.
Method of recognizing income on hire purchase contracts - HELD THAT:- We find that this issue is covered by the latest order of Tribunal [2024 (5) TMI 1544 - ITAT CHENNAI] as considered the decision of Hon’ble High Court of Madras in assessee’s own case as directed Ld. AO to tax the interest income on EMI method or ESM method which was consistently being followed by the assessee and allow consequential relief in accordance with law. Considering the same, similar directions were issued by Tribunal.
Since facts are pari-materia the same in this year, the Assessing Officer and the Ld.CIT(A) have already affirmed the income offered to tax to the tune is in consistency with the method of income followed in hire purchase finance charges as correct. In our considered view, the claim of the assessee for a reduction from total income of Rs. 510.90 lacs which was brought to tax in the earlier years is not acceptable and therefore the ground of the assessee is dismissed.
Inclusion of Notional Income related to NPA as income for the A Y 2011-12 - HELD THAT:- As assessee stated that the action of assessing officer will be appropriate only if uniformly the income is assessed for all the years. Since, the department is still pursuing before the High Court for earlier years contending that notional income on the basis of contract should be assessed. If that stand is upheld then the same amount cannot be taxed in the year of receipt. We have perused the issue and we consider that there is no reason to interfere in the decision of lower authorities and dismiss the ground of the assessee.
Disallownace of Pooja Expense - HELD THAT:- Profits declared, customer base and employees of the assessee company, the amount of expenditure spent forpooja expenses as a commercial expediency to the business and claiming such expenditure is reasonable. The amount spent towards Pooja expenses is a miniscule compare to the turnover and profits of the assessee.
Considering the decision of the high court of P&H in the case of Atlas cycle Industries Ltd [1980 (10) TMI 19 - PUNJAB AND HARYANA HIGH COURT] the claim of pooja expenses claimed by the assessee cannot be denied as inadmissible expenditure. Therefore, we are of the considered view that the said expenditure is spent by the assessee company is a commercial expediency and claiming the same as business expenditure cannot be termed as personal in nature and hence appeal of the assessee is allowed by dismissing the decision of by the lower authorities. Hence, the assessee succeeds in this ground and allowed.
Disallowance of presentation to employees / customers - amount spent towards gifts and compliments given to the customers and employees on the special occasions like marriage, opening ceremonies and anniversaries - HELD THAT:- Considering the huge turnover, Profits declared, customer base and employees of the assessee company, the amount of expenditure spent on account giving gifts and compliments to employees and customers as a commercial expediency to the business and claiming such expenditure is reasonable. Therefore, the said expenditure is spent by the assessee company is a commercial expediency and claiming the same as business expenditure cannot be termed as personal in nature and hence appeal of the assessee is allowed by dismissing the decision of disallowing the same by the lower authorities. Hence, the assessee succeeds in this ground and allowed.
Rate of Depreciation on Commercial vehicles - assessee claimed higher depreciation of 50% on leased vehicles - AO rejected the claim on the ground that the assessee was involved in the business of finance and leasing and the accelerated depreciation was not available to them - HELD THAT:- CIT(A) allowed the claim of the assessee by considering item no. 3(via) as inserted in New Appendix-1 (Table of Rates at which depreciation is admissible). w.e.f. 01-04-2009 stating AO erred in disallowing the depreciation claimed by the appellant. AO is directed to allow depreciation at the higher rate of 50% for the new motor vehicles acquired between 1.1.2009 and 30.09.2009 and used for the purposes of their business - Decided in favour of assessee.
Loss on sale of repossessed assets allowed as expenditure - HELD THAT:- Assessee is into business of financing for purchase of assets to customers and in case of default in repayment, such assets are repossessed as per the terms of agreement and or sold to the third parties. If, the amount realized on sale of repossessed assets falls short of the principal amount outstanding, it results in a loss which is nothing but a bad debt which has been written off in the books as ‘loss on sale of repossessed assets’. Since, assets are treated as stock in trade the resulting on disposal of the same is a trading loss and an admissible business deduction as a bad debt written off u/s. 36(1)(vii) of the Act.
We are inclined to uphold the decision of the ld.CIT(A) of deleting the disallowance of expenditure by the AO, and direct the AO to verify the correctness of the claim of ‘loss on sale of repossessed assets’ and allow the expenditure in accordance with law. Therefore, this ground of the revenue is dismissed.
Depreciation on Computer Software @60% - AO restricted the depreciation to 25% and thereby made a disallowance - HELD THAT:- no infirmity in the order of the ld.CIT(A) in deleting the disallowance of depreciation made by the AO. The admissibility of depreciation @60% for computers including computer software has been clearly mentioned inentry no. 5 under the head ‘machinery and plant’ of the table of the rates at which the depreciation is admissible (new appendix-I u/r. 5 of the I.T. Rules, 1962). This issue has already been endorsed in the case of ACIT vs TNQ Books and Journals Pvt Ltd. [2016 (6) TMI 1493 - ITAT CHENNAI] - Thus we hold that allowing the appeal of the assessee for claiming the depreciation at 60% by the ld.CIT(A) is in accordance with law and does not require interference.
Disallowance of Bad and doubtful debts - HELD THAT:- We find that this issue has been settled in assessee’s favour by coordinate bench in its order [2024 (5) TMI 1544 - ITAT CHENNAI] for the A.Y. 2012-13 to 2014-15. The coordinate bench, dismissed revenue’s appeal.
Nature of expenses - Non Compete fees - revenue or capital expenditure - HELD THAT:- As relying on Guffic cum P ltd [2011 (3) TMI 6 - SUPREME COURT] and Carborandum Universal Ltd [2012 (10) TMI 178 - MADRAS HIGH COURT] non-compete fee paid by the assessee is allowable expenditure u/s. 37(1) of the Act and hence, the ground of the revenue is dismissed.
Business Origination Cost - AO has disallowed such expenditure treating it as capital in nature since it results in increased effectiveness and efficiency of the business - HELD THAT:- We find that this issue has been dealt with by tribunal in [2024 (5) TMI 1544 - ITAT CHENNAI] as chose to follow the decision of Taparia Tools Pvt. Ltd. [2015 (3) TMI 853 - SUPREME COURT] where in it was held that normally revenue expenditure incurred in a particular year has to be allowed in that year and if the assessee claims the full expenditure, department could not deny the same. Finally the claim was allowed. Therefore, this issue is covered in Assessee’s favour.
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2024 (6) TMI 1445
Issuance of show cause notices under GST regulations - HELD THAT:- It is noticed that the proceedings, which emanated with the issue of show cause notice dated 31.10.2022 in Show Cause Notice cum Demand Notice No.121 of 2022-GST is yet to be adjudicated and orders are yet to be passed. However, pending orders, the impugned show cause notices have been issued to the petitioner.
The aforesaid order, without awaiting for the order in Show Cause Notice cum Demand Notice No.121 of 2022 dated 31.10.2022, cannot be passed. As the issues are intertwining, the respondent ought to have passed common order after hearing the petitioner in the first mentioned show cause notice and impugned show cause notices.
Petition disposed off.
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2024 (6) TMI 1444
Penalty u/s 271(1)(c) - Defective notice - non specification of whether the penalty has been levied for concealment of income or for furnishing inaccurate particulars of income - HELD THAT:- Issue is squarely covered by the decision of Mohd. Farhan A. Shaikh [2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] Accordingly, the penalty order passed under section 271(1)(c) of the Act for the assessment year 2010-11 is quashed.
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2024 (6) TMI 1443
Rectification u/s 254 - Levy of penalty u/s 271(1)(c) - disallowance of exemption of capital gains earned, u/s 54F & 54EC - ITAT found that the claim was disallowed for the reason that new house was not purchased within the stipulated time as prescribed under the law, since the assessee had invested Rs.30 lakhs in the said property within stipulated period prescribed u/s 54F, therefore, the assessee was eligible to deduction of exemption to the extent of Rs.30 lakhs.
HELD THAT:- As the exemption denied by the AO under section 54F was allowed by the ITAT to the tune of Rs.30 lakhs. While penalty has been confirmed by the ITAT even on the addition/disallowance deleted by the ITAT in quantum proceedings.Therefore, the facts as stated by assessee that the ITAT has confirmed penalty even on the addition deleted is found to be factually correct.
As during the course of hearing, which took place before the ITAT on various occasions, the assessee in the first instance itself had placed copy of the order of the ITAT in quantum proceedings demonstrating the fact that of having been granted relief to the extent of Rs.30 lakhs, which was even taken note of by the Bench, when the appeal was first heard on 21.2.2020. Therefore, it cannot be denied that order of the ITAT in the quantum proceedings was very much part of the records and non-consideration of the same, while dealing with the appeal of the assessee, in penalty proceedings, does tantamount to a mistake apparent from record. Even if the assessee did not refer to the same when the appeal was finally heard the fact remains that the order was very much part of the record before us and non-consideration of the same tantamounted to error in the order of the ITAT.
Even otherwise, we may state that even if the assessee had failed to place on record the order passed by the ITAT in the quantum proceedings granting relief to the assessee to the extent of Rs.30 lakhs, the said order being a public document, non-consideration of the effect of the same in penalty proceedings would still tantamount to mistake apparent from the record. The fact remains that in the quantum proceedings, the assessee has been granted relief to the tune of Rs.30 lacs allowing exemption u/s. 54F of the Act to the said extent against capital gains returned and confirming penalty on this addition which stands deleted by the ITAT, is clearly impermissible in law. There cannot be any case for penalizing the assessee for an offence which has been found to have not been committed at all, and therefore, the confirmation of penalty on this aspect i.e. on the addition which stood deleted by the ITAT, was in any case a mistake which was eligible for rectification under section 254(2) of the Act. It is a clear and apparent mistake and the MA filed by the assessee needs to be allowed, which we hold so. MA allowed.
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2024 (6) TMI 1442
Seeking grant of interim bail - bail sought on the ground that the health condition of his uncle is getting bad to worse, day by day - HELD THAT:- The applicant, in the present case, is seeking the interim bail on the ground of ailment of his uncle, who, as per the application, met with an accident, on 10th April, 2024 and stated to be in intensive care unit. However, there is nothing on record to probabilize, at this stage, that the doctors have opined that there are no chances of recovery of the patient.
As such, considering the apprehensions, which have been expressed by the Enforcement Directorate, in the status report, this Court is of the opinion that the applicant is not entitled for the relief, which has been sought in the application. Moreover, the apprehensions, which have been expressed, in the status report, cannot be said to be unfounded, at this stage.
Consequently, the applicant is not able to make out a case for grant of interim bail, at this stage. Consequently, the bail application is dismissed.
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2024 (6) TMI 1441
Disallowance of deduction u/s. 80P(2)(d) in intimation u/s. 143(1) - HELD THAT:- As scope of adjustment u/s. 143(1)(a) provides that adjustment can be made from Clause (i) to (vi). Sub-clause (v) which existed prior to 01/04/2021 only permitted adjustment u/s. 10AA, 80AIA, 80IAB, 80IB, 80IC, 80ID or Section 80IE.
There was no scope of making any prima facie adjustment u/s. 80P. The amendment was brought in the statute to include Section 10AA or under any provision of Chapter VIA if the return of income has been furnished beyond the due date specified under sub-section (1) of Section 139.
Thus, prior to A.Y. 2021-22, no such adjustment could have been made. Moreover, here in this case as held above, the return of income was furnished within the due date prescribed u/s. 139(1). Thus, the entire disallowance was beyond the scope of Section 143(1) itself. Disallowance made by the CPC and as confirmed by the ld. CIT(A) is set aside and assessee is entitled for reduction u/s. 80P. Appeal of the assessee is allowed.
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2024 (6) TMI 1440
Money Laundering - proceeds of crime - acquisition and possession of assets disproportionate to known sources of income by the Petitioner and his wife and other family members - applicability of Section 45 read with Section 44 of the PML Act - it was held by High Court that the proceedings under the PMLA are maintainable, a prima facie case is established, and the anticipatory bail is not warranted.
HELD THAT:- Issue notice returnable on 29th July, 2024.
In the meanwhile, the petitioner shall not be arrested in connection with Complaint Case (PMLA) No .11 of 2022 arising out of ECIR No. ECIR/BBZO/01/2019 dated 22nd January, 2019 at Bhubaneswar Sub-Zonal Office of Enforcement Directorate pending before the District and Sessions Judge-cum-Special Judge(PMLA), Khurda at Bhubaneswar subject to condition that within two weeks from today, the petitioner shall appear before the Special Court and furnish bonds for appearance in accordance with Section 88 of the Code of Criminal Procedure, 1973.
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2024 (6) TMI 1439
Addition u/s. 69 - AO made the addition solely based on the seized data and statement of the searched person, who paid the taxes on admission of such undisclosed ‘on-money' in cash - HELD THAT:-Such addition was made without affording an opportunity to the assessee to cross-examine the person, whose statements were relied upon. This is against the principles of natural justice.
Furthermore, the payments made by cheque aggregating were duly recorded in the assessee's books of account and reflected in her Axis Bank account. These entries have not been disputed by the AO. Therefore, the addition to this extent is not justified.
As regards the cash component assessee has consistently denied making such payment and there is no corroborative evidence brought on record by the AO to substantiate this addition. Therefore, in the absence of any conclusive evidence, the addition is not sustainable.
Appeal of the assessee allowed.
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2024 (6) TMI 1438
Imposition of penalty u/s. 43 of the Black Money Act, 2015 - failure to disclose immovable property located outside India - HELD THAT:- We find, that though, the assessee has not disclosed the said property in the schedule FA of the return of income filed for the assessment year 2016-17, the said investment in the property claimed to be under construction in Dubai, has always been shown in the returns of income in preceding years as well as in the succeeding years.
Otherwise also, during the assessment year under consideration, the assessee has paid certain advances to the builder so, it is wrong to say that the assessee has not disclosed his property to the income tax department. The appellant has already admitted that this is a bonafide and inadvertent clerical omission.
Thus, this is not a fit case where penalty u/s. 43 of BMA is imposable. Thus, the appeal of the revenue is dismissed.
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2024 (6) TMI 1437
CENVAT Credit availed of Service Tax paid by the service provider - denial on the ground that the debit note against which they have taken the credit is not a proper document to avail CENVAT Credit in terms of Rule 9(1) of the CENVAT Credit Rules, 2004 - also no services have been provided by the service provider to the appellant - HELD THAT:- There is no dispute to the facts of the case that the service provider has raised debit notes on the appellant for providing the service and Service Tax has been paid thereon. There is no provision to deny CENVAT Credit to the appellant in the CENVAT Credit Rules, 2004 if Service Tax is paid by them to the service provider.
Moreover, the debit notes issued by the service provider contains all the details required in terms of Rule 9 of the CENVAT Credit Rules, 2004, to avail CENVAT Credit. In these set of facts, we hold that the CENVAT Credit cannot be denied to the appellant.
There are no merit in the impugned order and accordingly, the same is set aside - appeal allowed.
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2024 (6) TMI 1436
Exemption claimed u/sec 10(10AA)(ii) - petitioners in these cases are retired employees of different Public Sector undertakings and Scheduled Banks - HELD THAT:- Similar issues have been considered and decided by this Court [2024 (6) TMI 1230 - KERALA HIGH COURT] as held petitioners all stood retired before the latest notification, which has been issued fixing the upper limit as Rs.25 lakhs for exemption from payment of earned leave income. The employer has also deducted the admissible tax above Rs.3 lakhs from the petitioners. At this distant point of time, this Court, considering the limitation on the power of the Court as well as the doctrine of separation of powers, cannot issue a mandamus to the respondent Authorities to revise the upper limit of the encashment of earned leave for granting exemption from payment of the income tax with retrospective effect. Issuance of notification, as provided in the provision, is in the realm of the powers of the Executive.
These writ petitions are disposed of with liberty to the petitioners to approach the Government for the reliefs sought for in these writ petitions, and the Government may take a decisions on their representations.
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2024 (6) TMI 1435
Best assessment judgement u/s 144 - Unexplained money u/s 69A r.w.s. 115BBE - assessee has failed to prove that the cash deposited during demonetization are normal business receipts - HELD THAT:- AR stated that assessee is a registered Co- operative Society engaged in the activity of collective disposal of labour of its members and is eligible for deduction u/s 80P - assessee has furnished computation of total income wherein net profit as per profit and loss account was shoen on which tax payable. The assessee has also submitted Form 26AS wherefrom it is seen that TDS was made. After giving credit for the TDS refund was due to the assessee. These facts were not before the Assessing Officer during the assessment proceedings.
In the appeal before first appellate authority, the appeal was not admitted because assessee has not paid advance tax as required u/s 249(4)(b) - the facts remain that the assessee did not file its return of income u/s 139(1) of the Act or in response to notice u/s 142(1) of the Act.
Before the Tribunal, assessee submitted paper book containing 94 pages including cash book, bank book, books of account, profit and loss account and balance sheet, copy of Form 26AS and computation of income. Hence, we are of the view that one more opportunity should be given to the assessee to plead his case before the AO. It is settled law that principles of natural justice require that the affected party is granted sufficient opportunity of being heard to present his case - Appeal of the assessee is allowed for statistical purposes.
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