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Showing 1 to 20 of 1554 Records
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2024 (8) TMI 1554
Unexplained Cash deposit from agricultural source - AO had not accepted the claim of agricultural income as the assessee did not file evidence in support of sale of agricultural produce and expenditure incurred for the agricultural activity - HELD THAT:- As no specific section has any where been mentioned for making impugned addition, the Bench is of the view that non-mentioning the precise provision of law makes the entire impugned addition bad in law. In this view of the matter, the appeal of the assessee is allowed.
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2024 (8) TMI 1553
Addition made u/s 68 - denying exemption claimed u/s 10(38) for the sale proceeds of listed equity shares alleged as penny stock - HELD THAT:- Assessee cannot be put to the rigors of section 68 in respect of sale proceeds received for sale of shares on the stock exchange (BSE) and gain arising thereon.
Assessee is a regular investor with investment in shares of other companies duly reflected in his DMAT account.
We note that AO has not brought on record any material to show that assessee was part of any group which was involved in the manipulation of share prices. Suspicion by the ld. Assessing Officer on the purchase and sale of shares is baseless.
AO has referred to the theory of preponderance of probability which according to us is applied to weigh the evidence of either side and draw a conclusion in favour of a party which has more favourable factor in his side. The conclusions have to be drawn on the basis of certain admitted facts and materials and not on the basis of presumption of fact that might go against the assessee. Once nothing has been proved against the assessee with the aid of any direct material, nothing can be implicated against the assessee on the presumption or suspicion, howsoever, strong it might appear to be true.
We delete the addition made u/s 68 towards proceeds of sale of listed shares of PS IT which gave rise to Long Term Capital Gain on the said sale, claimed exempt by the assessee u/s 10(38). Accordingly, grounds taken by the assessee in this respect are allowed.
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2024 (8) TMI 1552
Failure on the part of the respondents to refund the pre-deposit amount along with applicable interest pursuant to the termination of proceedings in terms of a final order framed by the Customs Excise and Service Tax Appellate Tribunal - interest on delayed refund - HELD THAT:- From the affidavit which has been filed by the respondents in the present proceedings, it is contended that a deficiency memo was issued to the writ petitioner on 12 July 2024 requiring further documentation. It is their case, that subject to the aforesaid compliance being affected, they would be “willing to proceed with the refund” - It is unable to appreciate the stand as struck bearing in mind the undisputed position that the claim for refund had been made as far back as in September 2019. The order of the CESTAT itself had been passed on 30 September 2019 and which had then been followed by a formal application for refund being made on 14 October 2019.
The deficiency memo has come to be issued for the first time in July 2024. Although, the aforesaid deficiency memo was also duly replied to on 29 July 2024, no further action appears to have been taken by the respondents, at least till we had taken up the writ petition for consideration today.
This Court in Flipkart India Private Limited vs. Value Added [2023 (8) TMI 987 - DELHI HIGH COURT] where the legal position with respect to pre-deposit not constituting a deposit of tax or duty’ was highlighted and it was held that 'the claim raised by the Department in the show-cause notice is thoroughly dishonest and baseless. In respect of a deposit made under section 35F, provisions of section 11B can never be applicable. A deposit under section 35F is not a payment of duty but only a pre-deposit for availing the right of appeal. Such amount is bound to be refunded when the appeal is allowed with consequential relief.'
Conclusion - A deposit under section 35F is not a payment of duty but only a pre-deposit for availing the right of appeal. Such amount is bound to be refunded when the appeal is allowed.
The respondents is directed to release amount of INR 34,72,909/- within a period of four weeks from today - petition allowed.
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2024 (8) TMI 1551
Levy of surcharge - what should be the rate of surcharge applicable? - where the income is less than Rs. 5,00,00,000/- then rate of surcharge would be 15% OR 37% as per Finance Act, 2021 - HELD THAT:- Maximum Marginal rate shall be Maximum rate of tax which is tax and surcharge of the highest rate in case of an individual.
If the surcharge was to be charged according to the slab rates of the assessee, it was not required to be mentioned in section 2 (29C) of the Act. There would not have been any need to mention surcharge u/s 2 (29C) of the act because it would have been then computed under the finance Act as per slab applicable to income of the assessee. Thus, the purpose of mentioning surcharge in that section is to tax MMR as the Highest rate of tax for tax and surcharges. We should not read the section in the manner that word ‘surcharge’ mentioned in section 2 (29C) becomes redundant.
It is immaterial whether the CPC in one of the years accepted the ROI filed by the assessee, but when the issues are raised before us, we cannot hold that unsustainable view of revenue is in accordance with the law.
Thus, Levy of maximum marginal rate on Trust is a specific anti avoidance rule and therefore should be given a strict interpretation. Law prescribes that tax shall be charged on the whole of the income in respect of which such person is so liable at the maximum marginal rate. There is no intention to charge the assessee a bit lower than the rates of tax and surcharge applicable to an individual of maximum rate.Appeal of the assessee is dismissed.
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2024 (8) TMI 1550
Challenge to SCN - forbearing the respondent from adjudicating the SCN being barred by limitation in terms of Section 28(9) of the Customs Act, 1962 - preliminary objection of the petitioner is that the impugned order dated 28.09.2022 is non-est in law and time barred in view of Section 28(9) of the Act - HELD THAT:- Considering the fact that the petitioner has filed his reply and the matter is pending at the stage of cross examination, the respondent is directed to complete the entire process and conclude the proceedings in terms of Section 28(9) of the Act.
Petition disposed off.
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2024 (8) TMI 1549
Valuation of service tax - value of the books / study materials supplied by the appellant during the relevant periods be considered as a part of the gross value of commercial coaching or training services rendered during the said period or not - HELD THAT:- It is found that before the learned Commissioner though the evidences like Trial Balance Sheet duly certified by a Chartered Accountant for the period 2003-04 to 2006-07, sample copies of sales invoices of magazines, books, guides etc. evidencing sale of publication materials and fee receipts indicating consideration for services rendered on account of commercial training or coaching service to establish both activities i.e. of sale of books and coaching service was separate, but the same were not considered by the adjudicating authority. Solely on the basis of the mistake of showing a consolidated amount of income for services and sale of books in the balance sheet, for the initial years 2003-04 to 2006-07, the Commissioner has confirmed the demand.
Considering the evidences produced before the Commissioner as well as in the present case, it is found that the sale of books was a separate activity and carried out by the appellant from same or different locations/outlets and it has no connection with the rendering of ‘Commercial Training or Coaching Centre Service’. The fees collected from the students do not indicate any such collection of value of materials separately in the respective receipts without including its value in the service. In absence of any such evidence, clubbing the value of the sale of books carried out from different premises or from the outlets from where the services of ‘Commercial Training or Coaching central service’ rendered with the value of commercial coaching service in demanding service tax cannot be sustained.
Conclusion - The sale of books was a separate activity and carried out by the appellant from same or different locations/outlets and it has no connection with the rendering of ‘Commercial Training or Coaching Centre Service’. The sale of goods, such as books and study materials, should be treated as a separate activity from the provision of services unless there is clear evidence indicating otherwise.
The impugned order is set aside - Appeal allowed.
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2024 (8) TMI 1548
Maintainability of appeal - HELD THAT:- In ABC Papers Limited [2022 (8) TMI 863 - SUPREME COURT], the Apex Court has held that 'appeals against every decision of ITAT shall lie only before the High Court within whose jurisdiction the assessing officer who passed the assessment order is situated. Even if the case or cases of an assessee are transferred in exercise of power under Section 127 of the Act, the High Court within whose jurisdiction the assessing officer has passed the order, shall continue to exercise the jurisdiction of appeal. This principle is applicable even if the transfer is under Section 127 for the same assessment year(s).'
The present STA as not maintainable before this Court. The appeal is dismissed with liberty to the appellant to prefer appeal before the jurisdictional High Court.
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2024 (8) TMI 1547
Liability of job-worker to pay excise duty - inputs or not - lead alloy ingots manufactured from waste and scrap received from Exide Industries Limited (EIL) under Rule 4(5)(a) of the CENVAT Credit Rules, 2004 - reliance placed on Standard Input Output Norms (SION) to allege suppression of production and short payment of excise duty - levy of penalty - HELD THAT:- It is a settled legal principle that no demand can be thrusted upon an assessee, on mere wild allegations without a substantial basis and foundation thereof. There is no shred of evidence to support the proposition of short supply of finished goods as alleged by the Revenue in this case. The said allegation of the Department is thus outright baseless, presumptuous and therefore unsustainable.In fact, as the commercial transactions were based on the purchase orders issued by EIL, the veracity of which is not questioned by the Department, the allegations against the appellants are completely hollow void in the first place and therefore without any basis. As there is no challenge to the purchase orders issued by the EIL, no allegation for short supply of goods can be sustained. In case there is any clandestine manufacture and removal of goods, the onus lies on the Department to prove the same with appropriate, tangible, valid and sustainable evidence.
From the chain of events, it is clear that the lead scrap and other raw materials supplied by EIL are in the nature of inputs (semi-processed), as has also been held by the Larger Bench of the Tribunal in Wyeth Laboratories Ltd.4 (supra), and are supplied back to EIL (the principal manufacturer), against the challans issued and enclosed along with the monthly returns. The above Rule clearly states that the goods that are required to be sent by the principal manufacturer without payment of Central Excise Duty are required to be returned for further processing to the principal manufacturer for utilization in the final product (viz. lead storage battery, in the present case).
Also, with respect to the Standard Input Output Norms (SION), the appellant’s assertion is noted that quality of lead scrap is an important variable and is necessary for consideration to arrive at the recovery percentage (based on thorough testing of waste and scrap) as undertaken by EIL in their R&D section. The percentage of recovery would depend on the material contained in the waste and scrap and thus there cannot be a fixed one-to-one formula in the instant case.
Thus, in view of the fact that the goods were supplied in terms of challans as referred to aforesaid, the purchase orders as supplied by EIL indicating recovery percentages in addition to other details, there is no case made out for demand of duty of excise, if any, from the job worker.
In view of the position as settled by the Larger Bench of the Tribunal in Wyeth Laboratories Ltd. [2000 (7) TMI 109 - CEGAT, NEW DELHI], the issue involved is thus no more res integra. Therefore, the claim of the Department disentitling the waste and scrap for the benefit of Rule 4(5)(a) of the CENVAT Credit Rules, 2004 does not stand to any merit.
Thus, there is no justification for the demand of duty or imposition of penalties on the appellants in the matter.
Conclusion - The appellant is not liable for excise duty on the processed goods and that the penalties imposed on the appellant and its director were unwarranted.
Appeal allowed.
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2024 (8) TMI 1546
TP Adjustment - determining the Arm’s Length Price of international transaction to be 50% of the amount paid by the Assessee to its AE for receipt of Intra Group Services from its AE's - TPO observed that the assessee has submitted “Performance score card” which showed evaluation of services, but failed to establish its authenticity and neither submitted any evidence regarding the details, how such services were received - HELD THAT:- Considering the profile of the Assessee and the business structure of the Assessee, we find that the T.P.O. is not correct in arriving the ALP at NIL on the ground that the Assessee has not produced the evidence for the receipt/rendering of service. TPO should have looked into all the evidences submitted by the assessee and give finding after adjudicating the same. It is an accepted fact that the transaction between the Assessee and AE will be always subjective in nature, it is fact that the assessee American Express being a running and established foreign entity and they have established the business in India. Thus, there is a considerable advantage engaged by Indian entity, hence there is a greater chance of Intra Group Services transferred to Indian entity which has to be verified by the TPO by applying applicable transfer pricing mechanism as per Income Tax Rules and determine the TP Adjustment. We once again reiterate that the TP Adjustment cannot be at ‘NIL’ as determined by the TPO. Accordingly with the above observations, we remand the matter to the file of TPO for determining the ALP afresh.
Rejection of Company selected by the Assessee CG Vak Software and Exports Ltd - No error or infirmity in the findings and conclusion of the Ld. CIT (A) in excluding M/s CG VAK Software and Exports Ltd. from the final list of comparables as failing turnover filter and are engaged in providing software development services thus the same are not comparables.
Cepha Imaging Pvt. Ltd. meets the exports earning filter as adopted by the TPO. In our considered opinion, the Ld. CIT (A) has rightly directed the A.O/TPO to verify the export earning of the Company and to include the said in the final list of the Company if Company passes the export earning filter.
R System International Ltd. - No error the action of the Ld. CIT (A) in directing the TPO to consider R System International Ltd. in final list of comparables if quarterly audited data is provided by the assessee for computing the operating profit margin for the instant Assessment Year.
Coral Hub Ltd. and Cosmic Global Ltd. be excluded from the list of comparables as a captive unit cannot be compared with a giant case.
EClerx Services and ICRA Online Companies be excluded as perused the annual report including the business over views and management discussion analysis in annual reports. The above Companies have claim to be leading knowledge process outsourcing Companies providing data analytic and data process out sources to some of the largest brand of the world and the said Companies are engaged in providing KPO Services i.e. high end ITEs. In our considered opinion the said findings and the conclusion of the Ld. CIT (A) requires no interference.
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2024 (8) TMI 1545
Money Laundering - Seeking a direction to allow operation of the Bank Accounts - HELD THAT:- The application is not found to be tenable. Once it was filed before the High Court followed by an order. The same request between the same parties would not maintainable and, accordingly, applications is dismissed. However, it would not restrain the appellant to take the remedy, if the order of the High Court has not been complied.
Appeal disposed off.
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2024 (8) TMI 1544
Seeking grant of interim bail - Money Laundering - involvement in a scholarship scam - proceeds of crime - section 45 of PMLA - HELD THAT:- It is worthwhile to record herein that in view of the reply filed by the ED, the applicant was directed to file requisite affidavit to show that he is still the Director of M/s Walia Trading Limited. The said affidavit has now been filed, wherein, it has been recorded that the applicant is still the Director of ten Companies, as detailed in the said affidavit.
Considering the given facts and circumstances, of the case, this Court is of the opinion that the prayer of the applicant for interim bail can be allowed.
Application allowed.
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2024 (8) TMI 1543
Entitlement for benefit of Notification dated 01.03.2005, as amended by Notification dated 11.07.2014 - imported “Wireless Access Points/MIMO products” falling under Customs Tariff Item [CTI] 8517 62 90 - HELD THAT:- The matter is covered by a decision of this Tribunal in Commissioner of Customs (Air), Chennai - VII versus Redington (India) Ltd. [2023 (12) TMI 754 - CESTAT NEW DELHI], where it was held that 'WAP imported by the appellant works on technology and does not support LTE standard. Beetal Teletech was, therefore, justified in claiming exemption from the whole of the customs duty under Serial No. 13 (iv) of the notification.'
It is, however, also pointed out by the learned authorized representative for the department that department has filed Customs Appeal No. 44 of 2024 before the Delhi High Court which is pending but no stay order has been granted.
Appeal dismissed.
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2024 (8) TMI 1542
Recovery of service tax with interest and penalty - Supply of Tangible goods services or not - leasing out of earth station and related equipment to M/s SICCL - cum tax benefit.
HELD THAT:- The facts and issues involved in the present case are on all fours identical to case in M/S SAHARA SANCHAAR LIMITED VERSUS COMMISSIONER OF SERVICE TAX, NOIDA [2024 (1) TMI 451 - CESTAT ALLAHABAD]. The Chartered accountant appearing for the appellant strenuously sought to distinguish the said order by stating that the said decision is not based on the amended provisions. However there are no merits in the said submission as the perod involved in the said case was upto 31.03.2014, and the Finance Act, 1994 was amended to introduce new taxation regime with effect from 01.07.2014.
It was held in the said case that 'From the terms of agreement and stipulations, the assets were made available to the lessee for use without transferring the effective control and possession over the said assets to the lessee and hence the service tax under the category of “Supply of Tangible Goods Services” has been rightly demanded from them.'
The matter for the period after 01.07.2012 has been considered in para 4.10 of the above order and the amended provisions have been taken into account. Thus there are no merits in the submissions made by the appellant on the merits of the case.
Cum tax benefit - HELD THAT:- It is now settled position in law that benefit of cum tax benefit should have been allowed while computing the taxable value and the tax payable. For limited purpose of computing the tax demand after allowing the cum tax benefit to the appellant matter is remitted back to the original authority.
Penalties u/s 76 and 77 of the Finance Act, 1994 - HELD THAT:- There are no merits in the submissions made by the appellant in respect of the penalties imposed under Section 76 and 77 of the Finance Act, 1994. The penalties under these Sections are not the penalties u/s 78 which were to be imposed for various offences which required a guilty mind or intent to evade payment of tax. The penalties under these section are for failure to comply with the legal obligations - penalties upheld.
Demand of interest - HELD THAT:- As the demand of Service Tax upheld, demand for interest under Section 75 follows.
Conclusion - i) The agreement does not transfer the right to use tangible goods with effective possession and control to the lessee, thus constituting a taxable service under Section 65(105)(zzzzj) of the Finance Act, 1994. Demand of service tax with interest and penalties upheld.
Appeal partly allowed and matter remanded to original authority for recalculating the tax demand with cum tax benefit.
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2024 (8) TMI 1541
Money Laundering - cancellation of bail facility allegedly granted by the trial court to the applicants/accused - conspiracy and opening of 386 bank accounts in Syndicate Bank, by misusing the identity documents of various persons - Section 45 of PMLA, 2002 - HELD THAT:- In the decision of Tarsem Lal [2024 (5) TMI 837 - SUPREME COURT], the Hon'ble Supreme Court, after considering the legal provision enunciated in the earlier decision Pankaj Jain vs Union of India and others [2018 (2) TMI 1943 - SUPREME COURT], has held that where a non-bailable arrest warrant has been issued for the presence of the wanted accused while taking action under Section 82-83 of the Code of Criminal Procedure due to his absence, then in such cases such accused is not entitled to get the benefit of Section 88 of the Code of Criminal Procedure as a right, but in the present case, the investigating officer has taken a conscious decision not to arrest all the accused during the investigation, there is no such situation where the accused are evading their arrest or are absconding. According to Section 19 of the 'Act 2002', arrest is possible only on proper and strong grounds.
It is clear from the guiding decision of Tarsem Lal and the subsequent orders passed that where the option of not arresting the accused has been exercised by the investigating officer by using the provisions of section 19 “Act 2002”, then in such a situation, after the presentation of the complaint, the provisions of section 200-205 of the Code of Criminal Procedure are applicable. Since the accused is not in custody, the question of release on bail does not arise and the provisions of section 45 “Act 2002” are not attracted in any way. If seen on the touchstone of the above legal system, the order passed by the trial court to execute a bond for the regular presence of the accused during the trial does not fall in the category of bail order, hence in such a situation the provisions of section 437, 439 and 439 (2) of the Code of Criminal Procedure are not attracted.
The Enforcement Directorate has taken a conscious decision not to arrest the present accused, after which their strict attitude is completely opposite at present. Their undue leniency at one time and then adopting a very strict approach towards the accused, arresting some accused related to the same charge and opposing their bail application and deciding not to arrest some including the main accused, this functioning of the Enforcement Directorate cannot be considered fair, whereas in such cases, they are expected to perform their work impartially with full responsibility as per the legal provisions. On the basis of the above-referenced decision passed by the Hon'ble Supreme Court on 08.07.2024 in the case of accused Himansh alias Himanshu Verma [2024 (7) TMI 1610 - SC ORDER], the Enforcement Directorate is definitely required to introspect and introspect on its functioning. Therefore, the office is directed to send a copy of it to the Secretary, Ministry of Finance, Government of India, New Delhi by speed post and email to bring it to his notice.
Conclusion - The challenged orders have been passed by the trial court under Section 88 of the Code of Criminal Procedure, which are completely in accordance with the facts and law, there is no justification for any interference in them. The present application filed by the Enforcement Directorate under Section 439(2) of the Code of Criminal Procedure is liable to be dismissed.
Application dismissed.
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2024 (8) TMI 1540
Provisional attachment of petitioner's bank Account - wrongful availment of ITC - impugned order has been passed without the respondents initiating any other proceedings - summons u/s 70 of the CGST Act issued but the same was posted after the impugned order was passed - violation of principles of natural justice - HELD THAT:- The fact that the summons u/s 70 of the CGST Act was posted immediately after the date of the impugned order does not mean that the proceedings were not commenced prior to transmission of the summons. The summons is dated 20.05.2024 and thus was issued prior to the impugned order.
A plain reading of Section 83(1) of the CGST Act indicates that an order of provisional attachment can be passed where proceedings have commenced under Chapter XII, Chapter XIV or Chapter XV of the CGST Act. Chapter XIV of the CGST Act includes Section 67 to Section 72 of the CGST Act. It is apparent that the summons has been issued under Section 70 of the CGST Act - which falls under Chapter XIV of the CGST Act prior to passing the impugned order - There is no cavil with the proposition that before making an order under Section 83(1) of the CGST Act, the Commissioner must necessarily form an opinion that such an order is necessary to protect the interest of the Government revenue. Further, the said opinion must be based on tangible material.
In the present case, the impugned order records that the investigation has revealed that the petitioner had made suspicious and fraudulent payments to certain bank accounts and wrongfully availed and passed Input Tax Credit (hereafter ITC) to the extent of ₹87,54,083/ -. The Show Cause Notice dated 20.06.2024 sets out in detail the allegations regarding wrongful availment of the ITC. It is alleged that the petitioner had availed of the ITC from two suppliers namely M/s Brighton Sales Inc. & M/s Caretech System. According to the department, the said suppliers were found to be non-existent. The petitioner allegedly availed of the ITC amount to ₹87,54,083/- during the relevant period from the said suppliers. The petitioner thus has the knowledge of the allegations that he was required to meet - There are no ground to interfere with the impugned order attaching the petitioner's bank account.
The petitioner has also challenged the issuance of the Show Cause Notice dated 20.06.2024 under Section 74 of the CGST Act on the ground that he had received the intimation dated 05.06.2024 only one day prior to the Show Cause Notice and had replied to the same. However, the same was not considered.
Conclusion - Validity of the provisional attachment under Section 83 of the CGST Act, upheld.
List on 22.10.2024.
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2024 (8) TMI 1539
Reopening of assessment - Addition u/s 68 r.w.s. 115BBE - HELD THAT:- We find no merits in reopening of assessment in the case of the assessee for the year under consideration on the basis that the assessee has received bogus gains by trading in scrips of NYSSA Corporation Ltd and M/s ACI Infocom Ltd, which was not disclosed, and thus the income chargeable to tax has escaped assessment within the meaning of section 147. Therefore, the entire observation/basis of the assessment is factually incorrect, since the assessment has been reopened on the wrong facts. Thus, the impugned assessment order deserves to be quashed.
Addition u/s 68 - Even if the total receipt is treated as unexplained cash credit, the AO is required to reduce the said amount from the income side and then proceed further to make an addition under section 68 - Assessee filed its return of income declaring a total loss and if total profit from sale of shares of NYSSA Corporation Ltd and M/s ACI Infocom Ltd is reduced on account of reduction of total receipts from the income side, the same will increase the loss of the assessee, which is required to be set off with the addition made u/s 68 of the Act. Therefore, resulting in the entire exercise being tax-neutral. This position is supported by the CBDT’s Circular No. 11 of 2019, wherein it was clarified that up to the assessment year 2016-17, the losses can be set off from the additions made u/s 68. Decided in favour of assessee.
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2024 (8) TMI 1538
Refund claim u/s 54(3) of the CGST Act on account of Income Tax Credit (ITC) accumulated due to inverted tax structure - rejection on the ground that business / activity being carried on by the petitioner was supply of services being construction within the meaning of Clause/Entry 5(b) of Schedule II to the CGST Act and not a composite supply in relation to a works contract as contemplated under Clause/Entry 6(a) of Schedule II to the Act - rejection also on the ground that by virtue of N/N. 20/2017-Central Tax(Rate) dated 22.08.2017, works contract relating to Metro which is the subject matter of the present petition was excluded by the respondents.
HELD THAT:- A perusal of the material on record including the contract agreement dated 23.05.2017 entered into between the petitioner and BMRCL is sufficient to come to the conclusion that the same was a ‘works contract’ within the meaning of Item / Entry / Clause 6 (a) of Schedule II to the CGST Act and not item / Entry / Clause 5(b) which was not applicable to the supply of services by the petitioner and consequently, the said findings recorded by the respondents for the purpose of rejecting the refund claim of the petitioner deserve to be set aside and the refund claim of the petitioner deserves to be allowed.
Insofar as the rejection of the refund claim of the petitioner by the respondents by placing reliance upon the N/N. 20/2017 dated 22.08.2017 is concerned, it is relevant to state that earlier, the revenue had issued a Notification bearing No. 15/2017 dated 28.06.2017 which specifically stated that no refund of unutilized ITC shall be allowed under sub-section (3) of Section 54 of the CGST Act in case of supply of services specified in sub-item (b) of Item 5 of Schedule – II of the CGST Act; it is pertinent to note that as per this Notification, only supply of services specified in Item 5(b) were excluded and services contemplated in Item 6(a) were not excluded from claim for refund; it followed therefrom that works contract provided in Item / Entry / Clause 6(a) were not excluded from the claim for refund and consequently, the petitioner would be entitled to refund as claimed in its refund application, which was erroneously rejected by the respondents by passing the impugned orders, which deserve to be set aside on this ground alone.
In the light of the undisputed fact that the refund claims of the petitioner related to the period from March 2018 onwards, it was the N/N. 1/2018 which was applicable and the same undisputedly including works contract relating to Metro also and since the aforesaid N/N. 20/2017 dated 22.08.2017 ceased to exist from 25.01.2018 upon its substitution by N/N. 1/2018 dated 25.08.2018, the petitioner was entitled to claim refund for the subject period from March, 2018 to July, 2019 and consequently, the impugned orders passed by the respondents deserve to be set aside and the refund claim of the petitioner deserves to be allowed on this ground also.
The N/N. 15/2023 clarifies and elucidates the fact that refund of unutilized ITC is disallowed / excluded only in relation to construction activity intended for the purpose of sale in the real estate sector; in fact, this Notification clearly reinforces and reiterates that works contract are neither disallowed nor excluded from refund claims. This is amply evident from the GST council recommendations in its 52nd meeting which led to the issuance of the notification which states in agenda item 3 (ix) that refund on account of inverted duty structure is denied only for construction services rendered for sale of building in real estate sector and not to other construction or works contract services. In the light of this subsequent event also that has transpired / occurred during the pendency of the present petition, the impugned orders deserve to be quashed and the refund claim of the petitioner deserves to be allowed.
Conclusion - Works contracts are distinct from service contracts and are not excluded from refund claims under the relevant notifications. The petitioner would be entitled to refund as claimed in its refund application, which was erroneously rejected by the respondents.
The impugned order is quashed - petition allowed.
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2024 (8) TMI 1537
Request from the Assistant Director of the Enforcement Directorate for an extension of three months to issue a notice u/s 37(A) of the FEMA Act - respondent has raised objection to it because a period of more than two years has already passed and otherwise the matter is dragging only to find out the status of investigation. The prayer is made not to grant any further time.
HELD THAT:- We have considered the rival submissions and find reasons to accept the prayer made by the officer present in the Tribunal and accordingly let this matter be posted on 4th December, 2024 to find out the outcome of the order passed by the Tribunal today.
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2024 (8) TMI 1536
Validity of re-assessment proceedings u/s 147 v/s assessment u/s 153A - information received from the DCIT, Central Circle – 1, Pune according to which details emerged during the statement recorded u/s 132(4) of Shri Sachin Nahar and during search and post search enquiries by the Investigation wing and also during the course of enquiries conducted during search proceedings by the Central Circle – 1(1), Pune that the assessee has received cash loan
HELD THAT:- Certain documents were seized from the premises of Shri Sachin Nahar which contained information relating to the present assessee. Therefore, the provisions of section 153C are applicable as according to the said section, it is applicable if any information contained in the seized document relates to the assessee.
In view of the detailed reasoning given by the CIT(A) / NFAC based on various decisions, we uphold the order of the Ld. CIT(A) / NFAC that the reopening of the assessment u/s 147 was not valid and the proper course of action that should have been taken by the Assessing Officer was u/s 153C as the provisions of section 153C of the Act are clearly applicable to the facts of the case. We, therefore, uphold the order of the CIT(A) / NFAC on the issue of validity of re-assessment proceedings. The first issue raised by the Revenue is accordingly dismissed.
Addition made on the basis of the statement recorded u/s 132(4) and no other evidence whatsoever was available with the Assessing Officer except this statement. - As find from the reasons recorded as well as the assessment order that the assessee, according to the AO, has taken loan from Shri Sachin Nahar which is a liability. However, AO has treated the same as income u/s 69A of the Act.
Once the AO himself has accepted that the assessee has taken loan through Shri Sachin Nahar, although the assessee denies to have taken any such loan, the provisions of section 69A could not have been invoked. Further, as mentioned earlier, neither during the course of assessment proceedings nor during the course of appellate proceedings, the AO has brought on record any evidence based on which the assessment has been made except the statement of Shri Sachin Nahar recorded u/s 132(4).
We have already mentioned in the preceding paragraphs that the addition cannot be made merely on the basis of the statement recorded u/s 132(4) of the Act as the presumption u/s 132(4A) of the Act is available only in respect of the person from whom the paper is seized. It cannot be applied against the third party and hence, no addition could be made on the basis of evidence found with the third party. CIT(A) / NFAC on this issue, we do not find any infirmity in his order deleting the addition on merit. Accordingly, the order of the CIT(A) / NFAC on this issue is also upheld. Thus, the appeal filed by the Revenue is dismissed.
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2024 (8) TMI 1535
Requirement to register FIR under Bharatiya Nyaya Sanhita (BNS) - Requiremnet to follow guidelines under Section 41-A Cr.P.C. for offences punishable with imprisonment up to seven years - what would be the procedure of investigation, if the F.I.R. is registered after the commencement of new criminal laws for the offence committed prior to the enforcement of new criminal laws, as such investigation is not saved by Section 531(2)(a) of the BNSS to be conducted as per Cr.P.C.? - HELD THAT:- From the perusal of Section 6 of the General Clauses Act, it appears that the repeal of Cr.P.C. shall not affect any investigation, legal proceeding or remedy in respect of any liability, penalty or punishment accrued or incurred under the repealed Act and such investigation, legal proceeding or remedy will continue under the repealed Act. It is also clear from Section-6 of the General Clauses Act, the repeal of I.P.C. or Cr.P.C. will not affect any right, liability accrued or incurred under the repealed Act. Therefore, despite repealing of IPC and Cr.P.C., liability to get punishment under IPC will continue and remedy like an appeal under Cr.P.C. will remain as it is but the forum of appeal being procedural in nature will be as per the B.N.S.S.
In the case of Hitendra Vishnu Thakur & Others Vs. State of Maharashtra & Others [1994 (7) TMI 343 - SUPREME COURT], the Hon’ble Supreme Court considered the effect of repealed provision by way of amendment in pending cases and summarised the law relating to the effect of the amendment of procedural and substantive law. Hon’ble Supreme Court in the case of Hitendra Vishnu Thakur [1994 (7) TMI 343 - SUPREME COURT] observed that while right to forum and limitation is procedural in nature, while right of appeal or right of action is substantive in nature and further observed that litigants have a vested right in substantive law but no such right exists in procedural law.
Similarly, in the case of Neena Aneja & Another Vs. Jai Prakash Associates Ltd. [2021 (9) TMI 1155 - SUPREME COURT], Hon’ble Supreme Court again observed that the amendment on the matter of procedural law will be retrospective unless a contrary intention emerges from the statute.
Thus, it is clear that if any offence is committed prior to the enforcement of new criminal laws, then if the F.I.R. is registered after the enforcement of new criminal laws, then the same will be registered under the provision of I.P.C. in view of the Article 20 of the Constitution of India, but the procedure for the investigation will be as per the BNSS. Similarly, in case the offence is committed after the enforcement of new criminal laws and thereafter the F.I.R. is registered, then the investigation would be conducted as per the BNSS. However, in case the offence is committed prior to the enforcement of new criminal laws, and F.I.R. is also registered prior to the enforcement of new criminal laws then the procedure of investigation would be as per the Cr.P.C. in view of Section 531(2)(a) of the BNSS. Therefore, the procedure of investigation provided by the circular dated 7.4.2024 of the Police Technical Services Headquarter, U.P. is absolutely correct.
It has been pointed out that in view of the statement of the victim recorded under Section 164 CrPC, Section 376 (2)(n) has been deleted and all other offences are punishable with imprisonment upto seven years - Although the prayer for quashing of FIR has been made, but without insisting on the same, only submission is that all alleged offences are punishable with imprisonment upto seven years, therefore the police authorities are bound to follow the procedure laid down under Section 41-A Cr.P.C. The petitioners have been wrongly implicated and should not be arrested.
Conclusion - The FIR should be registered under the IPC, but the investigation should follow the BNSS. Additionally, the guidelines under Section 41-A Cr.P.C. must be followed for offences punishable with imprisonment up to seven years.
Petition disposed off.
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