Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 18, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Securities / SEBI
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI Short Notes
Articles
News
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Production Linked Incentive Schemes witness over Rs. 1.03 lakh crore of investment till Nov 2023
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PFRDA notifies Point of Presence (PoP) Regulations requiring only one registration for National Pension System
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Safeguarding Financial Stability: The Crucial Role of Assurance Functions (Speech by Shri Swaminathan J, Deputy Governor, Reserve Bank of India - January 10, 2024 - at the Conference for Heads of Assurance Functions in Mumbai)
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Resolution of Stressed Assets and IBC – the Future Road Map (Speech by Shri Swaminathan J, Deputy Governor, Reserve Bank of India - January 10, 2024 - at the Conference on Resolution of Stressed Assets, and IBC organised by CAFRAL in Mumbai)
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India reinforces its status as a resilient global economy and a preferred investment destination at Davos
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PM inaugurates new campus of National Academy of Customs, Indirect Taxes & Narcotics at Palasamudram, Sri Sathya Sai District, Andhra Pradesh
Notifications
Customs
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03/2024 - dated
16-1-2024
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Cus (NT)
Appointment of Common Adjudicating Authority for the purpose of adjudication of finalization of Provisional Assessment in SVB case w.r.t. M/s Ecoclean Machines Pvt. Ltd
GST - States
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S.O. 96/P.A.5/2017/S.9/2023 - dated
22-12-2023
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Punjab SGST
Amendment in Notification No. S.O. 35/P.A.5/2017/S.9/ 2017, dated the 30th June, 2017
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S.O. 95/P.A.5/2017/Ss. 9,11, 15 and 148/2023 - dated
22-12-2023
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Punjab SGST
Amendment in Notification No. S.O 37/P.A.5/ 2017/S.11/2017 dated the 30th June, 2017
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S.O. 94/P.A.5/2017/Ss. 9, 11,15, 16 and 148/2023 - dated
22-12-2023
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Punjab SGST
Amendment in Notification No. S.O 17/P.A.5/2017/Ss.9,11,15 and 16/2017, dated the 30th June, 2017
Money Laundering
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S.O. 180 (E). - dated
16-1-2024
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PMLA
Reporting Entities notified for Aadhaar authentication service of the Unique Identification Authority of India u/s 11A of the Prevention of Money-laundering Act, 2002
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Cancellation of GST registration of petitioner with retrospective effect from 01.07.2017 - The order of cancellation is modified to the extent that the same shall operate with effect from 25.02.2019, i.e., the date when petitioner first applied for cancellation of registration. It is clarified that respondents are not precluded from taking any steps for recovery of any tax, penalty or interest that may be due from the petitioner in accordance with law - HC
Income Tax
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Correct head of income - the nature of gains from mutual fund redemptions - these gains were capital gains, not business income - no substantial question of law arises - HC
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DCIT Jurisdiction to pass order u/s 127 - transferring the case of the petitioner - A plain reading of the impugned order itself would clearly indicate that the petitioner was in fact given an opportunity of hearing which the petitioner did avail and finally, while passing the impugned order, the authority concerned has mentioned the reasons which necessitated them to transfer the case from the jurisdiction of respondent No. 2 to the jurisdiction of respondent No. 4. - Writ petition dismissed - HC
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Validity of reopening of assessment - approval of specified authority u/s 151 - Notices quashed on the ground that there is no approval of the specified authority, as indicated in Section 151(ii) of the Act. The direction is issued with the caveat that the revenue will have liberty to take steps, if deemed necessary, albeit as per law. - HC
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Validity of Revision u/s 263 - The order passed by the PCIT suffers from lack of due opportunity of hearing as the PCIT while making such observation that the lender Company was classified as shell company and relied on some statement recorded but before such finding was recorded which was prejudicial to the right of the assessee, no opportunity of hearing was given to the assessee. The reliance of credit worthiness of lender Company which dominated the track for PCIT to arrive at a finding to invoke Section 263 was defective. - HC
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Revision u/s 264 - seeking direction to re-consider the claim of the petitioner for deduction u/s 80-IA - there is no limitation on the power of the Pr. CCIT, CCIT, CIT while invoking jurisdiction u/s 264 of the Act. It is not confined to legality or validity of an order passed by the assessing officer or a claim made and disallowed or a claim not put forth by the assessee. - Matter restored back for re-consideration of the revision application - HC
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Rectification of mistake u/s 154 against intimation u/s. 143(1) - Rejection on the ground that, revised return was not authenticated - The ITAT recognize the mistake in the original return was apparent from the record. The Tribunal, citing CBDT Circular, which urges tax officers to assist taxpayers in securing due reliefs, remitted the case back to the Assessing Officer for rectification. The Tribunal directed that the original return should be rectified, considering the revised return and relevant documents submitted by the appellant. - AT
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The interpretation of the provisions of Section 115QA, particularly whether it applies to the company's capital reduction scheme completed before June 1, 2016. - The capital reduction carried out and completed on May 31, 2016, does not fall under the definition of 'buyback' as per Section 115QA of the Income-tax Act. Consequently, the tax on distributed income to shareholders is not payable by the company. - AT
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Residential status of the assessee - period of stay in India - whether the term “employment outside India” includes “doing Business”? - even if the assessee went to Mauritius as an Investor, he was still entitled to the benefit of the extended period for determining his residential status. - AT
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TDS u/s 195 OR 172 - remittance to Marshal Island based company towards damage charges for physical damage sustained by vessels and losses caused to the owner of the vessels - provision of Section 172 only will be applicable and not the provision of Section 194C or 195 of the Act. - CIT(A) rightly set aside the demand - AT
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Disallowance of depreciation on goodwill - As seen from earlier order of the Tribunal, the said decision is based on the judgement of Hon’ble Karnataka High Court in the case of Padmini Product Pvt. Ltd. cited (supra), the operation of which is stayed by Hon’ble Supreme Court as of now as mentioned above. - Matter restored back to AO to decide the same on consideration of final outcome of decision in the case of M/s. Padmini Products Pvt. Ltd. cited - AT
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Unexplained Money u/s 69A r.w.s. 115BBE - Cash withdrawal from the firm as partner of the firm - along with confirmation letter given by the firm, assessee has also shown the financials of the firm wherein the capital account of the firm was debited by Rs. 5 lakhs. In view of the explanation given by the assessee, objection raised by the Assessing Officer and ld.CIT(A) in this regard are duly answered, so assessee had proved identity, creditworthiness and source of cash deposit. - No addition on this account - AT
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Addition u/s 43CA being the excess value of the fair market value than the sale consideration value taken by the assessee - Since the difference between the sale value and the stamp value was within the 10% margin (actual difference was 1.67%), the Tribunal held that the addition confirmed by the CIT(A) was incorrect and thus deleted it. - AT
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Assessment u/s 153A - The cost of land incurred and recorded in the books has been duly accepted and reduced from the fair value derived by the valuer. The additions appear to have been made towards cost of construction of premises thereon. The construction however has been commenced in the subsequent year and has no relation to the AY 2011-12 in question. - CIT(A) rightly deleted the additions - AT
Customs
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Lack of mandatory pre-deposit of 7.5% - during the course of investigation Rs. 7,81,861/- was actually paid by the appellants which has been appropriated towards total duty of Rs. 48,83,697/-. Since, the aforesaid amount already stands remitted to the department, therefore, same can be counted towards 7.5% of total duty involved of Rs. 48,83,697/- and appeal on merits could have been maintained and decided by the Commissioner (Appeals). - AT
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Revocation of Customs Broker License - Manipulation of import invoices or valuation of goods - Once a violation of CBLR Regulations is admitted, the Revenue has to follow the discipline governing the Customs House Agents and as such, the Commissioner of Customs is empowered to revoke the license of Customs House Agent and also to forfeit his security if such agent fails to comply with the provisions of Regulation or gets involved in the Act which would amount to mis-conduct/offence under the Act. - AT
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Benefit of concessional rate of duty - parts and accessories of medical equipment - he expert’s opinions as recorded by the authorities clearly show that these items auto suture products are essential for Endoscopic/Laparoscopic equipment and this fact is not disputed. - he fact that they are multifunctional units will not make them ineligible as long as they are found to be accessories for the eligible items list - AT
IBC
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CIRP - Unsuccessful resolution applicant - Locus standi to challenge the plan after its approval - The Appellant is not a stakeholder within the ambit of Section 31(1) of the Code qua the Corporate Debtor after having been unsuccessful as a resolution applicant and has no locus standi to file the present appeal - AT
PMLA
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Seeking grant of bail - Money Laundering - remitting of funds abroad by using forged and fabricated documents - There is no property which is derived or obtained directly or indirectly as a result of criminal activity concerning the scheduled offence which can be regarded as ‘proceeds of crime’. There is legal force in the arguments advanced by the counsel for the petitioner that the unauthorized outward remittance by forged Form 15CB Certificates does not amount to ‘proceeds of crime’ being generated from the scheduled offence i.e. fabrication of Form 15CB Certificates. - HC
Service Tax
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Levy of Service Tax - amount of freight paid by them to tractor trolley owners - in case transportation made by vehicle operator (in the present case tractor trolley owners) and no consignment note was issued, the service cannot be held as goods transport agency service liable to Service Tax. - AT
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Refund of the service tax paid on the input services that remained unutilized - It goes without saying that once the application for refund which stood rejected by the competent authority under the statute has been set-aside and quashed by the appellate Tribunal, the orders of rejection would no longer remain in existence and as a consequence of the orders passed by the appellate Tribunal, the application for refund automatically becomes active and is liable to be processed from that stage itself without there being a necessity for moving a fresh application as has been contended by the learned counsel for the Department. - HC
VAT
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SEZ unit - Wrong declaration of turnover - the petitioner was unable to prove intra-state/ inter-state stock transfer to its branch/depot, tax implication would be different under the respective enactments. For inter-state branch/depot transfer outside the State, where the petitioner was unable to produce documents, Section 6(A) 3 of the CST Act, 1956 would be applicable. - HC
Case Laws:
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GST
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2024 (1) TMI 764
Cancellation of GST registration of petitioner with retrospective effect from 01.07.2017 - HELD THAT:- In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. The registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant. It is important to note that, according to the respondent, one of the consequences for cancelling a tax payer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period. Although, it is not considered apposite to examine this aspect but assuming that the respondent s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. The order of cancellation is modified to the extent that the same shall operate with effect from 25.02.2019, i.e., the date when petitioner first applied for cancellation of registration. It is clarified that respondents are not precluded from taking any steps for recovery of any tax, penalty or interest that may be due from the petitioner in accordance with law - Petition disposed off.
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2024 (1) TMI 763
Violation of principles of natural justice - petitioner was denied opportunity to file reply in respect of notice under Section 74 given in Form GST DRC-01 - HELD THAT:- In the present case, the notice under Section 74(1) of GST Act and the intimation in form GST DRC- 01A was uploaded together on 21.03.2023. In form GST DRC-01A, it was mentioned that petitioner may file his submission by 31.03.2023, while by the notice issued under Section 74(1), petitioner was required to file his reply by 31.03.2023 also. Thus, petitioner a valuable right of filing his submission in response to the notice issued under Section 74(1). Thus a limited interference is called for in the matter. The impugned order dated 10.11.2023 is quashed. The writ petitions are allowed and the matter is remanded back to the Competent Authority.
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Income Tax
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2024 (1) TMI 765
Denial of deduction u/s.80P - assessee/s having been found to be in the business of banking - Revenue s case was of the assessees, claiming to be primary cooperative societies under the Kerala Act, undertaking the business of banking and, thus, cooperative banks, ineligible for exemption u/s. 80P u/s. 80P(4) - HELD THAT:- A society registered as a PACS stands to loose all it s characteristics, i.e., other than existing staff strength, on failing to fulfill, as in the instant case, it s principal object, i.e., providing credit through it s members primarily for agricultural and allied purposes, it yet continues to be, in terms of the said Act, a cooperative society, defined u/s. 2(f) thereof as a society registered or deemed to be registered under the said Act. And on which there can be no quarrel, particularly in view of s. 8 of the said Act, stating the registration certificate to be a conclusive evidence of it s registration, which is, further, on the basis of declared objects (s.7). The appellant-societies, thus, despite loosing all the characteristics of a PACS in view of their activities subsequent to registration, yet continue to be primary agricultural cooperative societies under the Kerala Act. This is again principally for the reason that taxing statutes, and more so the exemption provisions, are to be strictly read. It would be a different matter, we may add, where the benefit u/s. 80P(1), which in the instant case is u/s. 80P(2)(a)(i), was for agricultural credit. Taxing statutes are to be strictly construed; more so, exemption provisions, with the burden to prove it s claims being on the assessee. This, coupled with the mandate that the statute is to be read in a manner so as to effectuate it s object, rather than defeat it, led us to examine the obtaining facts in light of the law as explained by the Hon ble higher courts. The object of s. 80P(4), as explained by the Apex Court in Mavilayi SCB Ltd. [ 2021 (1) TMI 488 - SUPREME COURT] , is not the financing of agriculture per se, as understood by the Hon ble jurisdictional High Court in Poonjar SCB Ltd [ 2019 (3) TMI 1580 - KERALA HIGH COURT] but the exclusion of the cooperative banks from the purview of the beneficial provision of s. 80P. The appellants are, despite the extent of their agricultural financing, found to be engaged in the business of banking, albeit unlicensed, and which is one of the two eligible activities u/s. 80P(2)(a)(i). On the basis of their activities and bye-laws, mutually consistent, they are further found to be a cooperative society in terms of s. 2(19) of the Act, operating in pursuance of their bye-laws, consistent with the Kerala Act. And, two, not a cooperative bank in terms of s. 80P(4) of the Act. The assessees are, accordingly, entitled to deduction in full u/s. 80P(1) r/w s. 80P(2)(a)(i) in respect of income of their banking business, unimpacted by it being of an unlicensed business. As regards the claim for deduction u/s. 80P(2)(d), i.e., in the case of Sivapuram Co-operative Society Ltd, no argument in this regard was made before us, as indeed before the Revenue authorities and, accordingly, their orders are sans any findings in the matter. The assessee s relevant ground speaks of interest on investment with co-operative bank. The same, to the extent not covered as a part of banking business, would stand to be exempt u/s. 80P(2)(d) in view of the decision in Pr. CIT v. Perroorkada SCB Ltd [ 2021 (12) TMI 1084 - KERALA HIGH COURT] The same is accordingly admitted and allowed to that extent.
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2024 (1) TMI 762
Relief granted to discharge the liability towards income tax in 12 equal monthly instalments - As taking note of the huge liability cast upon the appellant appellant should be given 20 instalments to pay off the balance amount due after the deduction of the payment already effected - HELD THAT:- We are not inclined to interfere with the impugned judgment passed by the High Court. Hence, the Special Leave Petitions are dismissed. Pending applications, if any, shall stand disposed of.
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2024 (1) TMI 761
Correct head of income - gain made by assessee on redemption of mutual funds should have been treated as business income, not short-term capital gain - whether the transactions carried out by the respondent/assessee concerning mutual funds were in the nature of investment or stock-in-trade , is an aspect which is fact-centric, juxtaposed with the law enunciated qua like transactions? - HELD THAT:- What the adjudicating authority has to discern is the intent of the assessee. The intent has to be ascertained keeping in mind the magnitude and frequency of the transactions, the period for which shares are held, the purpose for which they are held, and how transactions are disclosed in the books of account. There is no presumption in law that the acquisition of shares by an assessee is necessarily for trade as against investment. CIT(A) and the Tribunal, after appreciating the material on record, have concluded that the transactions concerning mutual funds were in the nature of investment and not motivated by trade. In this context, the CIT(A) and the Tribunal, among other things, looked at the transactions from the following prism: quantum of trade, value, purpose, the period for which mutual funds were held, and how disclosure had been made in the books of accounts/financial statements. For the sake of brevity, we are not setting forth the findings returned on the said aspects by these statutory authorities once again. Reference in this regard has been made in the paragraphs above. None of these findings have been assailed before us as being perverse. Concededly, revenue has not proposed a question that the findings returned by the Tribunal concerning the aforementioned aspects were perverse as they were not based on the material placed on record. Appreciation of material/evidence placed before the statutory authorities cannot form a subject matter of appeal under Section 260A of the Act unless the Court were to conclude that the findings were perverse or were returned without evaluating the relevant material on record - no substantial question of law arises Capital contribution received by assessee should be taxed in its hands as deemed dividend under the provisions of Section 2(22)(e) - As would be apparent from the facts, in the instant case, the two companies, i.e., KPFSE and KICIPL, had made capital contributions to the respondent/assessee. Since no money had been loaned or advanced to the respondent/assessee, both the CIT(A) and the Tribunal came to a conclusion, as noticed above, that if at all, the additions could be made only in the hands of the individual partners, after affording them an opportunity of hearing. The capital contribution on a plain reading of the section cannot be treated as a 'loan' or 'advance'. Since the findings of fact returned are that KPFSE and KICIPL had contributed capital and not extended any loan or advance to the respondent/assessee and that the respondent/assessee was neither a registered shareholder nor a beneficial owner of shares held in KPFSE and KICIPL, as rightly held by the Tribunal and CIT(A), the addition could not have been made in the hands of the respondent/assessee. As correctly observed, if at all, the addition could be made in the hands of the two individuals, i.e., Mr Pradeep Wig and Mrs Neera Wig, and that too only by the AO of the two individuals, albeit after affording them an opportunity of hearing. Furthermore, in our view, the Tribunal has rightly concluded that it could not treat the observations made by the CIT(A) as a direction under Section 150(1) of the Act. As observed above, the addition, if at all in the hands of Mr Pradeep Wig and Mrs Neera Wig, could only be made by their AO after giving them a chance to defend themselves. Thus we are unable to persuade ourselves that the impugned order passed by the Tribunal requires interference - no substantial question of law arises for our consideration.
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2024 (1) TMI 760
DCIT Jurisdiction to pass order u/s 127 - transferring the case of the petitioner from the jurisdiction of respondent No. 2[ITO, Ward 4(1), Hyderabad] to the jurisdiction of respondent No. 4 [DCIT, Central Circle 4(4), Mumbai] - as per petitioners the action is without jurisdiction, the action being one which has been passed in mechanical and arbitrary manner without providing justifiable reasons and is violative of the principles of natural justice - HELD THAT:- As before passing of the impugned order, the respondent authorities did issue notice to the petitioner making their intentions clear so far as the requirement of transferring the case of the petitioner from the jurisdiction of respondent No. 2[Income Tax Officer, Ward 4(1), Hyderabad] to the jurisdiction of respondent No. 4[Deputy Commissioner of Income Tax, Central Circle 4(4), Mumbai]. The petitioner also have responded to the notices and have submitted their objections, and thereafter only, the impugned order has been passed. This by itself gives a clear picture of the petitioner being given reasonable opportunity of hearing. As regards the second rider of reasons being provided in the impugned order, the authorities concerned while passing the impugned order, have considered the objections raised by the petitioner, as would be evident from the contents of paragraphs 3, 3.1 and 4. The reason which necessitated the authorities to pass the impugned order is to have a coordinated investigation. The instant Writ Petition is the one which has been filed on 22.12.2023, whereas the impugned order under Section 127 of the Act was passed about one moth back i.e., on 20.11.2023. The consequential proceedings subsequent to the matter being transferred to respondent No. 4 also had begun, as would be evidence from the notice dated 30.11.2023 issued under Subsection (1) of Section 142 of the Act. Also in the consequential notice u/ss (1) of Section 142 of the Act, there is a clear elaboration of cash transactions between the petitioner s establishment with M/s. IRIS Group. To make the things bad, there is a statement of Accountant, who in the course of survey, has not been able to give proper and satisfactory explanation and also did not provide cogent material in respect of so called commercial transactions done between the petitioner s establishment with M/s. IRIS Group. There was also no sufficient supporting documentary evidence with the petitioner s establishment or with their officials at the time of survey to establish that the said transactions were genuine and they were done strictly in accordance with the provisions of law. A plain reading of the impugned order itself would clearly indicate that the petitioner was in fact given an opportunity of hearing which the petitioner did avail and finally, while passing the impugned order, the authority concerned has mentioned the reasons which necessitated them to transfer the case from the jurisdiction of respondent No. 2 to the jurisdiction of respondent No. 4. Considering the fact that all the companies are located at different places like Bombay, Delhi and Hyderabad, for administrative convenience and also for betterment of the proper investigation, Section 127 of the Act was invoked. Later, opportunity of hearing was given to the petitioner and reasons for the transfer of the case from Hyderabad to Bombay have also been mentioned. Thus, this Court is of the view that the requirement under statute i.e., Section 127 of the Act has been complied with while passing the impugned order. Paragraph No. 4 of the impugned order read with paragraph Nos. 3 and 3.1 would clearly speak of the reason which necessitated the authorities to pass the impugned order is centralized and coordinated investigation. This Court does not find that a strong case is made out by the petitioner for interference to the impugned order passed under Section 127 of the Act by respondent No. 1 - WP dismissed.
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2024 (1) TMI 759
Validity of reopening of assessment - approval of specified authority u/s 151 - whether the impugned notices and orders as sustainable in law, having regard to the contention of the petitioners that they are not backed by the approval of the specified authority? - HELD THAT:- After amendment, Section 151 has been split and the part which enjoins that the approval of the specified authority is mandatory stands embedded in the first proviso to Section 148. The concerned specified authorities, depending on the applicable timeframe, are adverted to in Section 151 of the Act.The first proviso to Section 148 and Section 151, when read conjointly, demonstrate the untenability of the submission made on behalf of the revenue. We may also note that in Ganesh Dass Khanna [ 2023 (11) TMI 763 - DELHI HIGH COURT ] we were considering the provision of Section 149 of the Act and have taken the view that since the escaped income was less than Rs. 50,00,000/-, the time limit as prescribed in Section 149(1)(a) of the Act would apply. As indicated above, the specified authority changes depending on the time limit prescribed in Section 151 of the Act. It is on this account that there is linkage between ruling rendered in Ganesh Dass Khanna and the instant matters. In these cases, there is no dispute that although three (3) years had elapsed from of the end of the relevant AY, the approval was sought from authorities specified in clause (i), as against clause (ii) of Section 151. Before us, the counsel for the revenue continue to hold this position. The only liberty that they seek is that if, based on the judgement in Ganesh Dass Khanna, the impugned orders and notices are set aside, liberty be given to the revenue to commence reassessment proceedings afresh. Therefore, having regard to the aforesaid, the impugned notices and orders in each of the above-captioned writ petitions are quashed on the ground that there is no approval of the specified authority, as indicated in Section 151(ii) of the Act. The direction is issued with the caveat that the revenue will have liberty to take steps, if deemed necessary, albeit as per law.
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2024 (1) TMI 758
Validity of reopening assessment order concluding assessee did not submit a reply to notice - As submitted petitioner was called upon to submit a reply thereto - According to the petitioner, the e-filing portal did not include a tab for the submission of an online reply. Consequently, the petitioner submitted the reply physically on 01.06.2022 and obtained an acknowledgment from the office of the ACIT - HELD THAT:- The documents on record include the reply dated 01.06.2022 of the petitioner to notice dated 23.05.2022. The said reply also bears acknowledgment dated 01.06.2022 of the relevant Income Tax Office. A subsequent reply dated 02.06.2022 is also on record and, likewise, the said reply also bears acknowledgment dated 02.06.2022 of the relevant office. In light of these documents, the conclusion to the effect that the assessee did not file a reply to notice dated 22.05.2022 is contrary to the documents on record. Therefore, the said order cannot be sustained. For reasons set out above, this writ petition is allowed by quashing impugned order dated 30.07.2022 and the notices issued pursuant thereto. As a corollary, the matter is remanded for reconsideration.
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2024 (1) TMI 757
Reopening of assessment u/s 147 - as argued no speaking order was passed by the Assessing Officer before disposing of the petitioner s objection - HELD THAT:- Wide powers vested for reopening the assessment under section 148 read with section 147 of the Income Tax Act, 1961. It is precisely for this reason, the Hon'ble Supreme Court had held that a speaking order should be passed after the assessee is furnished with reasons for reopening of the assessment. In this case, the safeguards enunciated by the Honourable Supreme Court in GKN Drive Shafts (India) Ltd. [ 2002 (11) TMI 7 - SUPREME COURT] has been ignored by directly passing the impugned assessment order. Therefore, impugned assessment order is therefore not sustainable. Therefore, the impugned order is set aside and the case is remitted back to the respondent to pass a fresh order disposing of the petitioner s objection in the light of the decision of Supreme Court in GKN Drive Shafts (India) Ltd.[supra] - Thus this exercise shall be carried out by the respondent, within a period of eight (8) weeks from the date of receipt.
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2024 (1) TMI 756
Validity of reopening of assessment - Jurisdiction of Officer, who passed the impugned order u/s 148(A)(d) and notice issued u/s 148 - whether the petitioner can raise the jurisdictional issue before the officer, who issued notice u/s 148? - HELD THAT:- As per provisions of section 149(1) of Income Tax Act in the event if the income chargeable to tax is 50 lakhs or more, the Assessing Officer has jurisdiction to issue the notice under section 148 of the Act. Further, the section 149 start with the terms ' no notice under section 148 shall be issued for the relevant assessment years ' which means in the event, if any notice is issued, without jurisdiction, still by referring section 149(1) of the Act, the petitioner can take a stand that the notice has been issued without any jurisdiction. Further, the petitioner can also raise the issue that her income did not cross 50 lakhs or more in the sale transaction. Therefore, it is not that the petitioner will not have any opportunity to raise the jurisdiction issue in the Section 148 proceedings. The said aspect is also fairly accepted by the learned counsel for the respondent stating that the petitioner will have the opportunity to raise the jurisdictional issue by way of filing reply to the above show cause notice. Even though the petitioner has not furnished any details with regard to the cost of the property plus improvement made therein etc., in the event, if she furnishes those particulars along with relevant documents supporting her claim, the Assessing Officer will take a stand whether the notice issued by him is within the jurisdiction or not. This court is inclined to pass the following order:- (a) The petitioner is directed to file reply to the show cause notice issued under section 148 of the Act, raising issue on jurisdiction along with the relevant documents in support of her claim within a period of 30 days from the date of receipt of a copy of this order. (b) Thereafter, the respondent is directed to consider the jurisdictional issue with regard to the notice under section 148 of the Act after taking into consideration the reply filed by the petitioner and after affording an opportunity of personal hearing.
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2024 (1) TMI 755
Validity of assessment order passed u/s 144B - grievance of the petitioner that the impugned order came to be passed on 07.12.2022 without granting an opportunity of personal hearing to the petitioner - HELD THAT:- Though the petitioner filed her reply to the show cause notice dated 24.11.2022 within the time limit prescribed i.e., before 01.12.2022 at 13.19 hours, the respondent has not considered the same on account of the fact that the reply got reflected in ITBA-PAN only after the proposal was sent to ILDP for approval, which culminated in passing the final assessment order on 07.12.2022, by recording, as if the petitioner has not filed her reply. Thus, considering the fact that the reply filed by the petitioner got reflected in ITBA only after the assessment proposal was sent to ILDP for approval, the respondent-Department has not considered the petitioner's reply while passing the impugned order dated 07.01.2022. Apart from non consideration of the reply filed by the petitioner, it is the grievance of the petitioner that the impugned order came to be passed on 07.12.2022 without granting an opportunity of personal hearing to the petitioner. Therefore, this Court is of the view that the impugned order is not sustainable not only due to non-consideration of the reply filed by the petitioner but also suffers from violation of the principles of natural justice. Hence, this Court is inclined to set aside the impugned order. Writ Petition is allowed, the impugned order passed by the respondent is set aside and the matter is remitted back to the respondent for fresh consideration, in which case, the respondent is directed to consider the reply filed by the petitioner and after affording an opportunity of personal hearing to the petitioner shall pass the assessment order within a period of three months from the date of receipt of a copy of this order.
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2024 (1) TMI 754
Validity of reassessment order u/s 148A - Allegation of bogus purchase made by assessee - order as challenged is by contending that it has been passed by violation of principles of natural justice inasmuch as the appellant has not been granted an opportunity of personal hearing - assessee stated that the document provided by the department are neither relevant nor does it indicate any bogus purchases made by them and in the document there is no whisper about the assessee that any income has escaped assessment - HELD THAT:- The assessee sought for the relevant documents and liberty to file an additional objection. The reply given by the assessee on 12.4.23 has not been taken into account in the manner it should have been done, though the assessing officer refers to the said reply of the order dated 13.4.23. As pointed out earlier, the notice dated 27.3.23 is not a notice of personal hearing. Therefore, the authority while passing the order impugned in the writ petition has violated the principles of natural justice and inasmuch as the statute also provided that opportunity be granted to the assessee before an assessment is reopened. Therefore, we are satisfied that there has been violation of principles of natural justice and, therefore, the assessee has to be provided an opportunity of personal hearing and also be given liberty to furnish additional documents to support their stand. For the above reasons, the order impugned in the writ petition dated 13.4.23 passed u/s 148A(d) is directed to be treated as a notice u/s 148A(b) and assessee be directed to file further objection along with supportive documents and on receipt of the further objection and supportive documents, the assessing officer is directed to fix a date for personal hearing to hear the authorized representative of the assessee and pass fresh orders on merits and in accordance with law. Assessee is directed to file their reply within a period of 30 (thirty) days from the date of receipt of the server copy of this order. During the course of personal hearing, the petitioner may make a request for supply of any additional document that may be relied upon by the department.
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2024 (1) TMI 753
Validity of Revision u/s 263 - Revision of Orders prejudicial to revenue - suo-motu revision under sub-section (1) of section 263 - addition of cash credit u/s 68 - HELD THAT:- A reading of Section 68 of the Act which has been invoked by the PCIT would show that the sum credited in the books of an assessee maintained for any previous year can be accounted for income-tax as the income of the assessee of that previous year . According to Section 68 of the I.T. Act which operates in the limited field , any sum found credited in the books of assessee maintained for that previous year may be charged to income tax as income of the assessee of that previous year, if - (i) the assessee offers no explanation about the nature of source of such sum or (ii) the explanation offered by him in the opinion of AO is not satisfactory. Very genesis to invoke the provisions of Section 68 of the Act apparently appears beyond the scope of PCIT as the amount was received from the Company in the financial years 2013-2014 and 2014-2015 which were pertaining to the assessment years 2014-2015 and 2015-2016 respectively. According to the findings recorded by the learned Tribunal, the credit entries appearing in the accounts of the assessee were taken into account and section 68 could not have been invoked for the past credits which were carried forward. The order passed by the PCIT also suffers from lack of due opportunity of hearing as the PCIT while making such observation that the lender Company was classified as shell company and relied on some statement recorded but before such finding was recorded which was prejudicial to the right of the assessee, no opportunity of hearing was given to the assessee. The reliance of credit worthiness of lender Company which dominated the track for PCIT to arrive at a finding to invoke Section 263 was defective. Thereby the PCIT has not followed the rules of natural justice and admissibility of such document or the statement becomes doubtful as the rules of natural justice were given a go-bye. The finding of fact that the amount of unsecured loan got by the assessee from the lender Company was not received in assessment year in question on the basis of a finding which was never before the assessee to counter it. As such, section 68 cannot be invoked in the garb of Section 263 as fiscal statute is to be given a strict interpretation. Addition u/s 69C - Genuineness of stamp paper of receipt of advance from GTPL etc., being relatable to receipt of loans in other assessment year are apparently farfetched and have no relevance for assessment of income of this year, appears to be reasonable as no prejudice is caused to the interest of Revenue. A reading of the order would further would show that the Tribunal held that the repayment of loan and payment of interest expenditure was recorded in the books of transaction, which do not fall within the purview of section 69C - The valuation report can be taken into consideration when the books of account are not reliable or are not supported by proper vouchers. The assessment year in this case has not doubted such entry and it has not been stated that the books of account maintained by the assessee are defective or not reliable. It may have marginal difference with the valuation but that may be for various reasons but primarily aforesaid two conditions are required to be satisfied, which having not been present, the appellate Tribunal has rightly held the issue in favour of the assessee. The Tribunal also recorded the fact that the so called incriminating information that the lender company being classified by the SEBI as shell Company coupled with some adversarial statement of one Amit Kumar Kedia which has been relied by the PCIT post assessment, were not supplied to the assessee despite requests made by him that those information and statement would enable him to place its defence. Therefore, a serious flaw was committed by the PCIT. The assessment order also records the fact that GTPL is a NBFC registered with RBI and is a Company of sound financial standing and a regular tax payer of huge amounts year after year, therefore, withholding certain documents which is used against the assessee by the PCIT defeats the rules of natural justice of doctrine of audi alteram partem. Applicability of Section 43CA - A perusal of the order of Tribunal would further reflect that after assessment of the factual aspect of applicability of Section 43CA it records that the transaction was duly reported in tax audit report and the appellate authority was unable to find any error in action of the Assessing Officer to accept the transaction outside the ambit of Section 43CA where the variations in actual consideration qua assessable value for the purposes of stamp duty does not exceed 10%. The Tribunal has upheld the direction of PCIT to the extent that the difference upto 10% is only saved by the amendment made in the Finance Act and the enquiry directed by PCIT in respect of transaction covered u/s 43CA where the difference exceeds 10% appears to be justified and the direction of the PCIT to the limited extent was upheld. Therefore considering the totality of the aforesaid averments, we are of the view that the order of Tribunal does not give rise to a substantial question of law warranting interference of this Court in the order of Tribunal. Decided against revenue.
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2024 (1) TMI 752
Revision u/s 264 - seeking direction to re-consider the claim of the petitioner for deduction u/s 80-IA - difference between Section 263 and Section 264 - HELD THAT:- Under Section 264 of the Act, the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may either of his own motion or on an application by the assessee for revision, call for the record of any proceeding relatable to an order other than an order to which Section 263 of the Act applies and after making due inquiry, he may pass such order thereon as he thinks fit; the only caveat being that such order should not be prejudicial to the assessee. Therefore, as we have noticed above, there is no limitation on the power of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner while invoking jurisdiction under Section 264 of the Act. It is not confined to legality or validity of an order passed by the assessing officer or a claim made and disallowed or a claim not put forth by the assessee. A Division Bench of the Bombay High Court in Geekay Security Services (P.) Ltd. ( 2018 (12) TMI 702 - BOMBAY HIGH COURT ) after referring to the Division Bench decision of the Gujarat High Court in Hitech Analytical Services [ 2017 (9) TMI 1412 - GUJARAT HIGH COURT] and other decisions, Bombay High Court came to the conclusion that Principal Commissioner was not correct in refusing to exercise jurisdiction under Section 264 of the Act to examine the claim of the petitioner on merit. Therefore, the order of the Principal Commissioner was set aside and the matter was remanded back to the Principal Commissioner for a fresh consideration and decision on merit in accordance with law. That being the position and following the decision of the Bombay High Court in Geekay Security Services (P.) Ltd. (supra), we set aside the impugned order dated 28.03.2019 and remand the matter back to the file of the 3rd respondent for re-consideration of the revision application filed by the petitioner u/s 264 of the Act on merit after giving due opportunity of hearing to both the sides.
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2024 (1) TMI 751
Rectification of mistake u/s 154 against intimation u/s. 143(1) - assessee had filed original return of income in which certain erroneous figures were entered - Claim of exemption filled in the revised return - as per CIT(A) Revised return of income claimed to have been filed by the appellant was not authenticated - As per assessee appellant had committed a bonafide error in filing up the columns while filing the original return of income and hence, the appellant had filed a revised return of income also on the very same day, which even contains the e-filing acknowledgement number and therefore, the learned A.O. ought not to have rejected the petition for rectification - HELD THAT:- We note that the assessee filed original return on 29.10.2013 showing NIL income and no refund was claimed. Subsequently the assessee filed revised return claiming refund of Rs. 55,623 which was not sent to CPC within the due date. CPC processed the original return on 12.03.2015. The assessee sent the Acknowledgement of Revised Return in ITR-V to CPC on 20.10.2017. The assessee filed rectification application on 16.08.2017. We note that the assessee had put the figures in the wrong column in its original return instead of appropriate column which is a mistake apparent from record. Considering the CBDT Circular No.14 [XL 35] of 1955 dated 11.04.1995 cited by the ld. AR, the case is remitted back to the AO for rectifying the mistake in the original return filed by the assessee and decide the issue as per law. Appeal by the assessee is allowed for statistical purposes
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2024 (1) TMI 750
Validity of assessment u/s 153A - mandation of having incriminating material unearthed as a result of search - whether Revenue is entitled to interfere with unabated assessment which stood concluded either u/s 143(1) or u/s 143(3) and not pending at the time of search in the absence of any incriminating material unearthed as a result of search in the case of assessee? - HELD THAT:- There is a total absence of reference to any incriminating material which may have any bearing to the impugned additions/disallowances except some statement of witness adverse to assessee in an all together different search proceedings. As decided in ANAND KUMAR JAIN (HUF) , SATISH DEV JAIN, SAJAN KUMAR JAIN, [ 2021 (3) TMI 8 - DELHI HIGH COURT] has observed in identical fact it is manifest that additions/disallowances have been made without reference to any specific incriminating material/document found as a result of search and seizure action under section 132 of the Act and such additions are solely based on deposition made by a witness against the assessee in the course of search in that case. Besides, the integrity of confession obtained is unknown. No cross examination of the witness was provided to the assessee either and consequently, such statement is unworthy of reliance. Guided by the principles laid down in Abhisar Buildwell (P.) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] and Ananad Kumar Jain (HUF) [ 2021 (3) TMI 8 - DELHI HIGH COURT] we find force in the legal plea raised on behalf of the assessee. Hence, in the absence of any incriminating material in an unabated assessment additions/disallowances made by AO in all captioned appeals requires to be quashed. Decided in favour of assesee.
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2024 (1) TMI 749
Chargeability of taxation u/s 115QA - capital reduction carried on by the assessee u/s 100 104 of the companies act 1956 on or before 31st of May 2016 - CIT(A) deleting the levying tax u/s 115QA on the capital reduction transaction undertaken by the company during the year made by the AO - as per AO share capital reduction by payments to the shareholders is buy-back of shares and provisions of section 115QA of the Act is attracted - HELD THAT:- According to the provisions of section 115QA of the income tax act if a domestic company distributes any amount on buyback of shares of unlisted shares from its shareholders, the domestic company is required to pay tax, which is an additional income tax at the rate of 20% on the distributed income. What is buyback is defined in explanation (i) of the section to show that buyback means purchase by a company of its own shares in accordance with the provisions of section 77A of the companies act 1956. This was the definition of buyback from 1 June 2013 till 31 May 2016. With effect from 1 June 2016 by the finance act 2016, the definition of buyback under explanation (i) to that section reads that buyback means purchase by a company of its own shares in accordance with the provisions of any law for the time being in force relating to companies. Thus, it is clear that prior to 31st of May 2016 if the company purchases its own shares in accordance with the provisions of section 77A of the companies act, such domestic companies are required to pay tax under section 115QA of the act. After 1/6/2016 if the company purchases its own shares in accordance with any of the provisions of any law relating to the companies, the buyback tax liability will arise in the hence of the company. Thus, it is clear that prior to 1/6/2016 buyback under section 77A of the companies act is covered by the provisions of taxes in the hence of the company under section 115QA of the act. In the present case, the assessee has not carried out the buyback under section 77A of the companies act 1956 but has carried out capital reduction under the provisions of section 100 104 of the companies act. All the conditions of reduction of share capital were concluded on 31st of May 2016. This event schedule is not in dispute between the parties. Therefore, apparently the capital reduction was completed by the assessee on 31st of May 2016 under the provisions of section 100 104 of the companies act. As in case of Capegemeini India private limited in company scheme petition number 434 of 2014 dated 28 April 2015 [ 2015 (4) TMI 1069 - BOMBAY HIGH COURT] holding that it is open to a company to buy back its own shares by following the procedure prescribed u/s 77A/section 68 or by following the procedure prescribed under section 391 read with section 100-104 of the companies act 1956. Thus we hold that in the present case such capital reduction is not covered in the definition of buyback as per explanation (i) to section 115QA of the income tax act and tax on distributed income to the shareholders is not payable by the assessee company. Hence, we uphold the order of the learned CIT A. Decided against revenue.
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2024 (1) TMI 748
Power of CIT(A) enhancing income - Nature of expenditure - unexplained expenditure u/s 69C OR perquisite payment made on behalf of its Director u/s 17(2) - HELD THAT:- Once it is proved that the said expenditure is reflected in the books of Spring Travels Pvt. Ltd. and sourced out of regular banking channels from the funds of the said company, the same cannot be added an unexplained expenditure in the hands of the assessee u/s 69C of the Act. But what has been done by the Ld. CIT(A) is treating the very same sum as perquisite in the hands of the assessee on the premise that the said expenditure has been incurred by M/s Spring Travels Pvt. Ltd. on behalf of its director u/s 17(2) of the Act. This in our considered opinion, becomes a new source of income which CIT(A) is not entitled to add/enhance under the powers provided to him under the statute. In any event, the Ld.CIT(A) had also not given any enhancement notice to the assessee proposing to shift the addition from unexplained expenditure u/s 69C of the Act to perquisite u/s 17(2) of the Act, thereby violating the requirements of provisions of section 251(2) of Act. Hence, in any case, the addition made by the Ld. AO and sustained by the Ld. CIT(A) are on different count and deserves to be deleted. Accordingly, the grounds raised by the assessee are allowed.
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2024 (1) TMI 747
Validity of assessment order passed U/s. 153C - as alleged final assessment order passed in the case of appellant foreign company without issuing a draft assessment order as mandated u/s 144C - HELD THAT:- As respectfully following the decision of this Bench in the assessee s own case for the AY 2018-19 [ 2023 (12) TMI 775 - ITAT VISAKHAPATNAM] as well as strictly following the principle of consistency , considering the facts and circumstances of the case on hand, we have no hesitation to come to the conclusion that the assessment order passed by the Ld. AO in the instant case of the assessee is without jurisdiction and in violation of the mandatory provisions of section 144C(1) of the Act and therefore the assessment order passed U/s. 153C of the Act is null and void and unsustainable in law. Accordingly, the legal ground raised by the assessee deserves to be allowed thereby warranting quashing of the assessment order passed by the Ld.AO - Decided in favour of assessee.
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2024 (1) TMI 746
Residential status of the assessee - period of stay in India - assessee claimed his residential status to be Non Resident and accordingly did not offer his global income to tax in India - it is the plea of the assessee that as he stayed in India only for 176 days during the year under consideration, he is Non Resident during the year for the purpose of the Act - whether the term employment outside India includes doing Business ? - Whether CIT(A) erred in interpreting the provisions of section 9A of the Immigration Act of Mauritius relating to Occupation permit which allows assessee to stay and work in Mauritius as an investor not an employee? HELD THAT:- Assessee filed his return of income with Mauritius Revenue Authorities for the period from August 2012 to December 2012 declaring a total income of MUR 1,65,12,353 and a tax deduction of MUR 24,76,852, against the same. Revenue however, did not agree with the submissions of the assessee and on the basis of the status as Investor in the Occupation Permit issued by the Government of Mauritius as well as the business visa issued to the assessee concluded that the assessee had left India not for the purpose of employment but as an Investor. In this regard, the A.O. has also taken into consideration that the assessee was holding 100% shareholding in Firstland Holdings Ltd., Mauritius, from which the assessee received alleged salary and fees for negotiation and obtained investments for the company. Accordingly, as per the A.O., the assessee has considerable control over affairs of the company i.e., Firstland Holdings Ltd., Mauritius, and the copy of the appointment letter and salary slips provided by the assessee are self serving documents in view of the fact that the assessee had no permit for employment in Mauritius. We find that the issue of whether the term employment outside India includes doing Business by the taxpayer, came up for consideration before in CIT v/s O. Abdul Razak [ 2010 (12) TMI 940 - KERALA HIGH COURT ] wherein the Hon ble Court while deciding the issue in favour of the taxpayer took into consideration the CBDT Circular no.346 dated 30/06/1982 and held that no technical meaning can be assigned to the word employment used in the Explanation and thus going abroad for the purpose of employment also means going abroad to take up self employment like business or profession. Therefore, the Hon ble Kerala High Court has interpreted the term employment in wide terms. The Hon ble Kerala High Court, however, held that the term employment should not mean going outside India for purposes such as tourists, medical treatment, studies, or the like. Even if the taxpayer has left India for the purpose of business or profession, in the aforesaid decisions, the same has been considered to be for the purpose of employment outside India under Explanation 1(a) to section 6(1) of the Act. Accordingly, even if it is accepted that the assessee went to Mauritius as an Investor in First land Holdings Ltd., Mauritius, in which he holds 100% shareholding, we are of the considered view that by applying the ratio of aforesaid decisions the assessee is entitled to claim the benefit of the extended period of 182 days, as provided in Explanation-1(a) to section 6(1) of the Act, for the determination of residential status. Since it is undisputed that the assessee has stayed in India only for a period of 176 days during the year, which is less than 182 days as provided in Explanation 1(a) to section 6(1) of the Act, the assessee has rightly claimed to be a Non-Resident during the year for the purpose of the Act. Accordingly, we find no infirmity in the findings of the learned CIT(A) on this issue. As a result, the grounds raised by the Revenue are dismissed.
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2024 (1) TMI 745
TDS u/s 195 OR 172 - remittance to Marshal Island based company towards damage charges for physical damage sustained by vessels and losses caused to the owner of the vessels - as submitted damage to the vessels has happened in India during the business carried out by the ship in India - as per Assessee lump sum consideration paid by the assessee does not fall within income /receipt as defined in Section 172 and is an income in the hands of the remitter falls under Section 5(2) and hence applying u/s 195, particularly, when there is no DTAA between India and Marshal Islands and remitter has not provided TRC, TDS @ 20% was directed as levied Crux of the argument of the assessee is this that as the agent acts on behalf of the non-resident owner or character, he steps into the shoes of the principal and accordingly provision of Section 172 only will be applicable and not the provision of Section 194C or 195 of the Act. HELD THAT:- It is a fact that once the hired Vessel left the Porbandar Port and reached Durban South Africa, the charterer handed back the vessel to the owners who, in turn, raised these damages on the buyer i.e. the assessee before us. Thereafter, only upon arbitration and negotiation, the assessee was required to pay USD 4,50,000/- within 14 days from the date of settlement. It was further found from the settlement deed that the payments were reimbursements in nature and other damages raised are capital in nature CIT(A) declined to consider the same as income to the ship owner within the purview and scope of the provision of Section 5(2) of the Act and the direction passed by the Ld. AO to deduct tax at source on such payments in terms of the provision of Section 195(2) of the Act was found to be wrong, which, in our considered opinion also found to be just and proper for the reason as discussed hereinabove. We, therefore, confirm the order passed by the Ld. CIT(A). Decided against revenue.
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2024 (1) TMI 744
Disallowance of depreciation on goodwill - HELD THAT:- Admittedly, similar issue came for consideration before this Tribunal in assessee s own case [ 2022 (6) TMI 1295 - ITAT BANGALORE ] Once the department accepted the capital gain offered by individual assessee in the respective hand, the same transaction cannot be doubted in the hands of purchaser. On this count also, we find force in the argument of Ld. A.R. that AO not established that the main purpose of transfer of such asset was reduction of liability to income tax by claiming extra depreciation on enhanced cost. In order to establish aforesaid fact, it has to be established that apart from claiming additional depreciation on enhanced cost, there is other main purpose for acquiring the asset i.e. goodwill in question. The AO in the instant case wrongly invoked the explanation 3 to section 43 of the Act. Our above decision is also supported by the order of the Tribunal relied by the Ld. A.R. in the case of M/s. Dorma India Pvt. Ltd., Chennai [ 2019 (11) TMI 1139 - ITAT CHENNAI ] Further, we also place reliance on the judgement of Hon ble Karnataka High Court in the case of Padmini Products (P) Ltd. [ 2020 (10) TMI 424 - KARNATAKA HIGH COURT ] wherein similar circumstances Hon ble High Court has allowed the claim of the assessee. As seen from earlier order of the Tribunal, the said decision is based on the judgement of Hon ble Karnataka High Court in the case of Padmini Product Pvt. Ltd. cited (supra), the operation of which is stayed by Hon ble Supreme Court as of now as mentioned above. In view of this, we are of the opinion that it is appropriate to remit this issue to the file of ld. AO to decide the same on consideration of final outcome of decision in the case of M/s. Padmini Products Pvt. Ltd. cited (supra). This issue is remitted to the file of ld. AO for fresh consideration as observed above. Disallowance u/s 14A of the Act read with Rule 8D(2) - AO invoked provisions of section 8D(2)(ii) of the Rules with regard to indirect expenses incurred by assessee which are common expenses and cannot be identified independently - HELD THAT:- We have carefully gone through the assessment orders, wherein the assessing officer clearly established that assessee has earned exempt income in these assessment years and claimed that no expenditure has been incurred in assessment year 2017-18 and 2018-19, however, disallowed a meagre amount of Rs. 6,000/- in the assessment year 2020-21 without applying the formulas specified in Rule 8D(2)(ii) for disallowance u/s 14A of the Act. Hence, it cannot be said that ld. AO has not applied his mind or recorded satisfaction on this issue. In our opinion, he came to subjective satisfaction on disallowance u/s 14A of the Act read with Rule 8D(2)(ii) of the Rules. We do not find any infirmity in the findings of the lower authorities and the same is confirmed.
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2024 (1) TMI 743
Unexplained Money u/s 69A r.w.s. 115BBE - receipts of gift from his wife on various occasions - HELD THAT:- As by filing confirmation from his wife and also the return of income showing the gross total income of Rs. 22,96,219/- during the assessment year under consideration, assessee discharged his onus. In the said confirmation, the wife of the assessee had submitted that Rs. 10 lakhs were given by her to her husband as gift. In our opinion the wife of the assessee falls within the exempt category of relative as mentioned under section 56(2)(vii) of the Act and even otherwise, once the wife admits to have given the cash of Rs. 10 lakhs to her husband, the Revenue cannot object to the said gift. As the Revenue cannot disbelieve the confirmation given by the wife and moreover, the Revenue had accepted the return of income filed by the wife of the assessee showing Rs. 10 lakhs as cash gift to her husband. In view of the above, the addition of Rs. 10 lakhs is deleted. Cash gift received from the father of the assessee - In the case of the father, admittedly, no return of income has been shown whereby the father of the assessee had shown to given as cash gift to the assessee. In the absence of any return of income or any other document to prove the cash gift, it cannot be assumed that the father of the assessee has given Rs. 2,40,000/- as gift to the assessee. There is no evidence to show that the father of the assessee had given Rs. 2.40 lakhs as a gift to the assessee. The plea of the assessee is self-serving and is not tenable. Further, during the course of hearing, though the bench has directed to restrict the addition being the amount deposited in the prescribed specified bank notes, however, while finalizing the order, the facts of non-filing of return of income and expiry of father of the assessee were noticed however, the said facts were not been brought to my notice previously, and therefore, uphold the addition made by the Assessing Officer. Cash withdrawal from the firm as partner of the firm and saving cash available on hand deposited - As AO and CIT(A) had not disputed the fact that amount of Rs. 5 lakhs were withdrawn by the assessee from the bank account of firm, (where he was the partner), and thereafter, assessee had deposited the said amount in his account. Even the firm had issued confirmation letter confirming the withdrawing of amount towards the partner account. We find that along with confirmation letter given by the firm, assessee has also shown the financials of the firm wherein the capital account of the firm was debited by Rs. 5 lakhs. In view of the explanation given by the assessee, objection raised by the Assessing Officer and ld.CIT(A) in this regard are duly answered, so assessee had proved identity, creditworthiness and source of cash deposit. We do not find any reason to sustain the order passed by the Assessing Officer and ld.CIT(A) and accordingly, the addition of Rs. 5 lakhs is deleted. Saving cash available on hand deposited - With respect to this amount the opening balance which was disallowed by the Assessing Officer and confirmed by the ld.CIT(A), no documentary evidence was shown by the assessee showing that the amount was available with the assessee. Hence, no reason to acknowledge the submission of the assessee and accordingly, uphold the addition. Appeal of the assessee is partly allowed.
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2024 (1) TMI 742
Deemed income from house property - Addition made by the AO being the estimated ALV on unsold stock @ 8.5% after deducting 30%, as income from house property - CIT(A) deleted addition - HELD THAT:- With the insertion of section 23(5) of the Act by Finance Act, 2017 w.e.f. 01.04.2018 it becomes clear that computing of annual value of property held in stock in trade certain moratorium period has been given for such treatment, however, newly inserted provisions contained under section 23(5) of the Act are to be applicable w.e.f. A.Y. 2018-19 and not to the case at hand. So the Ld. CIT(A) has rightly decided that the assessee is not entitled for taking benefit of the amended provisions contained under section 23(5) of the Act. However, the issue in question has already been decided in favour of the assessee by the co-ordinate Benches of the Tribunal in case of Bengal Shapoorji Housing Development Pvt. Ltd. [ 2021 (5) TMI 636 - ITAT MUMBAI] and Sheth Developers Pvt. Ltd [ 2022 (6) TMI 1271 - ITAT MUMBAI] by holding that deemed notional rental income with regard to unsold flats held as stock in trade cannot be taxed. The co-ordinate Bench of the Tribunal in case of Pegasus Properties Pvt. Ltd [ 2021 (12) TMI 1210 - ITAT MUMBAI] by considering the decision rendered by the Hon ble Delhi High Court in case of Ansal Housing Finance Leasing Co. Pvt. Ltd. [ 2012 (11) TMI 323 - DELHI HIGH COURT] held that such addition is not sustainable up to 2017-18. Thus we are of the considered view that the Ld. CIT(A) has rightly deleted the addition made by the AO on account of deemed rental income qua the unsold stock of flats held in stock in stock in trade up to A.Y 2017-18. Addition u/s 43CA being the excess value of the fair market value than the sale consideration value taken by the assessee - difference of 1.67% in the sale consideration vis- -vis stamp duty valuation - HELD THAT:- The co-ordinate Bench of the Tribunal in case of Sai Bhargavanath Infra [ 2022 (8) TMI 799 - ITAT PUNE] held that first proviso to section 43CA inserted by Finance Act, 2020 with effect from 01.04.2021 is applicable retrospectively and thus where difference recorded between sale value of flats sold by assessee and stamp value of such flats was within 10% margin, no addition to be made. In the instant case the difference between the sale value and stamp value is 1.67% and as such within the threshold limit of 10%, so following the order passed in case of Sai Bhargavanath Infra [ 2022 (8) TMI 799 - ITAT PUNE] we are of the considered view that the Ld. CIT(A) has erred in confirming this addition which is ordered to be deleted. So ground No.1 raised by the assessee in its cross objections is hereby allowed.
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2024 (1) TMI 741
Assessment u/s 153A - incriminating material was found during the search or not? - HELD THAT:- As relying on Abhisar Builwell (Pvt.) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] and Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] where the assessment of an assessment year stood concluded at the time of search and remains unabated, the additions and disallowances are permissible in s. 153A proceedings only qua incriminating material found in the course of search. In the instant case, no incriminating material was found during the search and referred in the assessment order and hence the AO is not entitled to make additions in such completed/unabated assessments. Revenue has not demonstrated the nature of material found in the course of search which led to impugned additions in the absence of any incriminating material. The cost of land incurred and recorded in the books has been duly accepted and reduced from the fair value derived by the valuer. The additions appear to have been made towards cost of construction of premises thereon. The construction however has been commenced in the subsequent year and has no relation to the AY 2011-12 in question. Secondly, the cost incurred in the respective subsequent year were made by the AO but deleted by the CIT(A). Thirdly, the addition on cost of construction is based on valuation report which is in the realm of estimations without any nexus to any incriminating documents per se. Hence, in the absence of any incriminating material found, We see no perceptible reason to interfere with the finding returned by the CIT(A). Decided against revenue.
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Customs
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2024 (1) TMI 740
Seeking direction for execution of the Adjudication Order-in-Original - allowing the redemption of the seized foreign currency - HELD THAT:- Section 125 of the Customs Act vests discretion in the authority to levy fine in lieu of confiscation. Reading of Section 125 (3), makes it clear that an option has to be given to the owner of the goods to pay fine in lieu of confiscation and such option has to be exercised within a period of 120 days from the date of option. Ordinarily the Adjudicating Officer needs to give option to the owner of the goods to pay fine in lieu of the confiscation and if such fine is not paid within a period of 120 days, such option will become void. But the goods seized in the present case are nothing else but foreign currency. The seized currency is already with the respondent and in paragraph (iv) of Order-in-Original, there is a clear direction for realization of the redemption fine and the penalty collectively amounting to Rs. 5,20,000/- from the total amount of Rs. 13,07,950/- and for the release of the remaining amount of Rs. 7,87,950/- to the petitioner. Since the currency was already lying with the department and only balance amount was to be released after adjusting the redemption fine and penalty, no further option was to be exercised by the petitioner. There are no justification for not releasing the money in terms of the Order-in-Original dated 28.01.2020 - Petition is allowed with a direction to the respondent to release the remaining amount after realizing the redemption fine and penalty from the seized foreign currency within a period of two weeks from today.
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2024 (1) TMI 739
Rejection of appeal under Section 129E of CA - lack of mandatory pre-deposit of 7.5% - proof of mandatory pre-deposit had not been furnished - HELD THAT:- It is an agreed fact that as against total demand of Rs. 48,83,697/- amount of Rs. 7,81,861/- had been paid by the party and only differential duty of Rs. 41,01,836/- was payable by them. It is therefore clear that during the course of investigation Rs. 7,81,861/- was actually paid by the appellants which has been appropriated towards total duty of Rs. 48,83,697/-. Since, the aforesaid amount already stands remitted to the department, therefore, same can be counted towards 7.5% of total duty involved of Rs. 48,83,697/- and appeal on merits could have been maintained and decided by the Commissioner (Appeals). Since, the present order passed by the Commissioner (Appeals) is not on merits but it has dismissed the appeal under Section 129E, the matter remitted back to Commissioner (Appeals) with direction that aforesaid amount of Rs. 7,81,861/- be considered towards 7.5% of mandatory pre-deposit and appeal entertained accordingly. Matters are accordingly remanded back.
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2024 (1) TMI 738
Classification of imported goods - 100% Polyester Woven Gray Fabrics - classifiable under CTH 580 137 10 or under CTH 540 751 19? - entitlement for benefit of N/N. 14/2006-CUS as Upholstery fabric or as other than Upholstery fabric? - HELD THAT:- The Notification defines Upholstery fabric to mean material used on furniture or used to cover walls, as curtains or wall hangings and used fabric coverings and treatments in Automobiles, Airplanes, Rail-Road passenger Cars. There is contradiction between the report of Textile committee and the report of ATIRA. The impugned order blindly follows the report of ATIRA without going into the definition of the term Upholstery fabric as given in Notification No. 14/2006-Cus. The definition given in the said Notification is restrictive definition and covers only certain uses of the fabric. In the instance case, while the textile committee has opined that the nature of fabric will depend on usage as it could have multiple uses. The report of ATIRA is absolute. However, without giving any reason as to why it has arrived at that finding. There are no merit in the impugned order blindly relying on the report of ATIRA, especially in presence of an alternate report of an equally competent body namely textile committee which clearly doubts the actual use. The impugned order is set aside and matter remand to the original Adjudicating Authority to give fresh findings, after considering all the evidences produced by the appellant and after examining the nature of goods vis-a-vis the definition is given in Notification 14/2006-Cus. - appeal is allowed by way of remand to the Adjudicating Authority.
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2024 (1) TMI 737
Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - apparent mis-declaration with reference to description, quantity and value of the goods - violation of provisions of Regulation 10(d), (e), (m) and 13(12) of the CBLR. Whether the gravity of the offence of the appellant is grave enough for revocation of license? - HELD THAT:- The jurisdiction for any action against the appellant lies with the jurisdictional authority only. The action against the CB was initiated based on an offence report which was received from the Customs office at the port - It has also been argued that the appellant was not aware of any alleged manipulation of import invoices or valuation of goods. In the instant case, there is no allegation of any such violation. Infact the provisions of CBLR, 2018 as invoked in the show cause notice read with the facts of case clearly establishes the failure of the appellant in discharging his responsibilities as per the CBLR, 2018. Whether the said violations attracted the punishment of revocation of the CB license? - HELD THAT:- In the instant case, it is established that the G Card holder was present during the examination of the goods by the Dock officers, and did not inform the authorities as required under Regulation 10(d) and 10(m) of the CBLR, 2018. It is also an admitted fact that the importer in his statement has claimed that the appellant did not inform him of other regulatory compliance requirements for the goods imported by him. This is a clear failure of appellant s duties as a Customs Broker. Infact, the G card holder has accepted that he failed to bring the discrepancies to the notice of the concerned Assistant/Deputy Commissioner as the dock officers did not raise any query. This is not acceptable, as it clearly indicates the abdication of the responsibility by the appellant/his employee, and highlights the mala fide intent of the appellant. Once a violation of CBLR Regulations is admitted, the Revenue has to follow the discipline governing the Customs House Agents and as such, the Commissioner of Customs is empowered to revoke the license of Customs House Agent and also to forfeit his security if such agent fails to comply with the provisions of Regulation or gets involved in the Act which would amount to mis-conduct/offence under the Act. The High Court of Andhra Pradesh in the case of COMMR. OF CUS. C. EX., HYDERABAD-II VERSUS HB. CARGO SERVICES [ 2011 (3) TMI 816 - ANDHRA PRADESH HIGH COURT] held that in disciplinary matters, the Commissioner is responsible for happenings in Customs area, and for discipline to be maintained, if he takes a decision necessary for that purpose, CESTAT would, ordinarily, not interfere on the basis of its own notions of the difficulties likely to be faced by the CHA or their employees. Decision is best left to the disciplinary authority, save in exceptional cases where punishment imposed is shockingly disproportionate or is mala fide. Interference with punishment imposed would be justified only when it shocks conscience of CESTAT. There is no irregularity committed by the Adjudicating Authority while revoking the license of the appellant and imposing the consequential punishments under the Regulations - there are no infirmity in the impugned order - appeal dismissed.
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2024 (1) TMI 736
Classification of imported goods - flanges - classifiable under 73072100 as contended by the department or under 8503 as confirmed by the Commissioner (Appeals)? - benefit of N/N. 12/2012 dated 17.3.2012 - HELD THAT:- The very same issue was decided by the Tribunal in the case of M/S. SEW EURODRIVE INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS CHENNAI-II COMMISSIONERATE [ 2024 (1) TMI 465 - CESTAT CHENNAI] and after considering the facts the Tribunal has held that the flanges are parts of WOEG and are classifiable under 8503 and not CTH 7307 as claimed by the department. It was also held that the flanges are eligible for the exemption as per notification no. 12/2012. Thus, the appeals filed by the department is without merits - appeal dismissed.
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2024 (1) TMI 735
Benefit of concessional rate of duty - parts and accessories of medical equipment - Sl.No. 82 of List No. 37 of the N/N. 21/02 Cus. dated 01.03.2002 and Sl. No.61(b) of N/N. 6/2006-CE dated 1.3.2006 - denial of benefit on the ground that the imported goods staplers were used for stapling the operated parts of the body after completion of endoscopic/laparoscopic surgery - HELD THAT:- The Revenue has not produced any evidence to counter the experts opinion and based on the experts opinion, it is very clear these are used for surgical procedures including for laparoscopy / endoscopic surgeries. As per HSN under chapter 9018 which is meant for instruments and appliances for human medicine or surgery includes surgical staplers for inserting staplers to close the wounds. Whether they are eligible for the benefit of the notification as per Sl. No.363(B) as accessories of List 37 of the Notification No.21/2002-Cus.? - HELD THAT:- The expert s opinions as recorded by the authorities clearly show that these items auto suture products are essential for Endoscopic/Laparoscopic equipment and this fact is not disputed. As rightly held by the Commissioner (Appeals), the fact that they are multifunctional units will not make them ineligible as long as they are found to be accessories for the items list at Sl. No.22/82 of List 37 and Sl. No.61(b) of Notification No.6/2006-CE dated 1.3.2006. The Revenue has not placed anything on record to disprove the same. In view of the above, there are no justification in interfering with the order of the Commissioner (Appeals). The impugned order is upheld and appeal is dismissed.
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Securities / SEBI
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2024 (1) TMI 734
Rights of the minority shareholders - Restoration of the Writ Petition - SEBI's Role and Response to Complaints The case involves the petitioners, who are minority shareholders of Bharat Nidhi Ltd. (BNL), filing a writ petition against BNL and the Securities and Exchange Board of India (SEBI) for various alleged violations of securities laws. The petitioners claimed that SEBI had not provided them with the investigation report or relevant documents related to their complaints against BNL, despite them being shareholders. They argued that BNL, along with majority shareholders (respondent nos. 3 to 9), committed several illegalities and violations of securities laws, including the Minimum Public Sharing Norms and disclosure issues. One key aspect of the case was SEBI's issuance of a show cause notice to BNL and others, which was later settled through the SEBI (Settlement Proceedings) Regulation 2018. The petitioners contended that the violations alleged in the show cause notice were serious and could not be settled. During the final hearing, the petitioners requested SEBI to provide documents relevant to their complaints. Despite opposition from SEBI and other respondents, the Court ordered SEBI to provide these documents, emphasizing that minority shareholders are integral to a company and entitled to such information. This order was challenged in the Supreme Court by both respondent nos. 2 and 9, and later by SEBI. However, the Supreme Court dismissed these challenges, upholding the High Court's order. Subsequently, SEBI revoked the settlement order it had passed, which led to the contention that the substantive prayers in the original petition (prayers a and b) had become infructuous. However, the petitioners opposed this view, asserting that prayers c and d of the petition still required adjudication. Ultimately, the High Court maintained its interim directions, requiring SEBI to furnish the documents and keeping open the contentions regarding prayer clauses c and d for future proceedings. The Court stressed that SEBI, as a public body, should act in public interest and comply with court orders. The petitioners later filed an interim application to restore the writ petition for a final hearing, arguing that respondent nos. 2 to 9 had engaged in forum shopping and deceit by not informing the Court about their steps to challenge SEBI's revocation order in the Delhi High Court. This was viewed as potentially fraudulent behavior, intended to secure the disposal of the writ petition in their favor. Respondent nos. 2 to 9 and SEBI, on the other hand, argued that the petitioners had no cause of action to seek restoration, that the reliefs in prayer clauses c and d could not be granted due to the completion of the buyback process, and that no prejudice was caused to the petitioners as these issues could still be agitated in appropriate proceedings. In conclusion, the Court decided to keep open the issues related to prayer clauses c and d for future action. The Court noted that the issue of the Postal Ballot Notice dated 22 September 2022, related to prayer clause (d) of the Writ Petition, became a moot point following the revocation of the Settlement Order by SEBI. The Court had previously decided to keep these matters open for future proceedings, allowing the petitioners to raise these issues at an appropriate time. The Court further observed that the conduct of respondent nos. 2 to 9, particularly in not disclosing their intention to challenge the revocation of the Settlement Order, did not reflect a fair, just, or upright approach. However, it did not constitute fraud or deceit in the legal sense. The Court emphasized that the situation had not materially changed since its order on 1 December 2023, as the revocation of the Settlement Order was still in effect. Therefore, there was no cause for the Court to review or reverse its previous orders and directions. In conclusion, the Court found no merit in the application to restore the writ petition and rejected it, maintaining its earlier orders and observations. The Court's decision was based on the principle that there was no material change in circumstances and that the substantive issues related to the revoked Settlement Order and subsequent actions remained open for future adjudication. Application rejected.
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Insolvency & Bankruptcy
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2024 (1) TMI 733
CIRP - Unsuccessful resolution applicant - Locus standi to challenge the plan after its approval - HELD THAT:- There is no doubt that resolution plan submitted by the Appellant was approved in I.A. No. 861 of 2020 on 01.10.2021 but there is no doubt as well that the said plan was ought to have been implemented by the Appellant within 90 days. It is also not in question that on account of its failure to implement the resolution plan, the Appellant filed I.A. No. 77 of 2022 and sought extension of 60 days but the said application was not allowed as it was dismissed on 01.02.2022. The order passed on 01.02.2022 was further challenged by the Appellant in CA (AT) (Ins) No. 86 of 2022 in which the Appellant was granted three months time for payment of residual balance amount with interest @ 8%, from the order dated 13.04.2022 till 12.07.2022 but it was still not complied with and this fact has been noticed by the Hon ble Supreme Court in its order dated 29.08.2022 passed in Civil Appeal No. 3660 of 2022 in which the order dated 13.04.2022 was challenged by one operational creditor, M/s Vishal Nirmiti Pvt. Ltd. In such circumstances, when the Appellant has miserably failed to implement the resolution plan, the RP filed I.A. No. 283 of 2022, praying therein for extension of period of CIRP of 60 days, which was allowed on 05.09.2022. The Appellant is not a stakeholder within the ambit of Section 31(1) of the Code qua the Corporate Debtor after having been unsuccessful as a resolution applicant and has no locus standi to file the present appeal and in this regard, reliance has been placed upon the judgment rendered by this Tribunal in the case of Ravi Shankar Vedam vs. Tiffins Barytes Asbestos and Paints Limited and Others [ 2023 (6) TMI 1250 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI] where it has been held that the Promoter / Shareholder of the Corporate Debtor Company has no locus to challenge the Plan, after its approval. There is hardly any merit in the present appeal which calls for interference, therefore, the present appeal is hereby dismissed.
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PMLA
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2024 (1) TMI 732
Seeking grant of bail - Money Laundering - scheduled offence - proceeds of crime - remitting of funds abroad by using forged and fabricated documents and by making wrong declaration regarding the purpose of remittance - Section 45 of PMLA - HELD THAT:- A Coordinate Bench of this Court in Vijay Agrawal [ 2023 (5) TMI 1198 - DELHI HIGH COURT] observed that as per Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT] , though the twin conditions provided under Section 45 of PMLA restrict the right of accused to grant of bail but it cannot be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. It is a settled proposition that the discretion vested in the Court has to be exercised in accordance with the law and has to be guided by the principles of law. In the present case main allegation of the respondent/ED against the petitioner is that he was instrumental in outward remittance of huge amount in the account of foreign entities on the basis of forged Form 15CB Certificates. However, in the present case, there is no property which is derived or obtained directly or indirectly as a result of criminal activity concerning the scheduled offence which can be regarded as proceeds of crime . There is legal force in the arguments advanced by the counsel for the petitioner that the unauthorized outward remittance by forged Form 15CB Certificates does not amount to proceeds of crime being generated from the scheduled offence i.e. fabrication of Form 15CB Certificates. After considering all facts, including incriminating material against the petitioner which are the statements made by co-accused/witness under section 50 of PMLA and the fact that their evidentiary value can be tested at the stage of trial, no generation of proceeds of crime from criminal activity and the petitioner being a sick and infirm person, the present anticipatory bail application is allowed. The petitioner, in case of arrest, shall be released on bail on furnishing personal bond in the sum of Rs. 1,00,000/- with one surety of the like amount to the satisfaction of the concerned Investigating Officer or any other authorized person subject to conditions imposed. Bail application allowed.
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Service Tax
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2024 (1) TMI 731
Seeking for invoking of the extra ordinary jurisdiction - though SCN were issued, they were not effectively served and that it could not be effectively defended - violation of principles of natural justice - HELD THAT:- A person, if for any of the reason, is not able to enter appearance for personal hearing on the first occasion, he could be granted two more opportunities before his right for personal hearing is closed. These instructions, which have been laid down by the Department itself has not been followed in the first instance or atleast there is no record to substantiate this fact. In the absence of any document to prove the service of notice on the petitioner, the Order-in-Original dated 01.11.2022, would not be sustainable and the same deserves to be and is accordingly set aside/quashed. Petition allowed.
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2024 (1) TMI 730
Refund of the service tax paid on the input services that remained unutilized - consequence of the judgment, decree or direction by the appellate authority - requirement for fresh proceedings to be drawn up or not - Section 11B of CEA - HELD THAT:- Section 11B(1) specifically provides for application for refund to be made within the stipulated period which admittedly in the instant case has been made by the petitioner and which is not disputed by the respondent as well. It is these applications which stood rejected by the respondent and it was further rejected by the Commissioner (Appeals) and which, finally stood set-aside by the Tribunal which decided the claim of refund in favor of the petitioner vide orders, dated 24.02.2020, 03.07.2017 and 24.10.2016 respectively. It goes without saying that once the application for refund which stood rejected by the competent authority under the statute has been set-aside and quashed by the appellate Tribunal, the orders of rejection would no longer remain in existence and as a consequence of the orders passed by the appellate Tribunal, the application for refund automatically becomes active and is liable to be processed from that stage itself without there being a necessity for moving a fresh application as has been contended by the learned counsel for the Department. The said contention of the Department therefore stands negated. The Writ Petition stands allowed.
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2024 (1) TMI 729
Revisional Court had exceeded its jurisdiction in literally discharging the accused/respondent herein by exercising power under Section 397 of Criminal Procedure Code, 1973 - offences punishable under Section 89(1)(d) of the Finance Act, 1994 - HELD THAT:- The impugned order passed by the Revisional Court merely indicates that the order issuing process was set aside as there was no proper and sufficient application of mind to the facts and circumstances of the case. The Revisional Court while disposing off the revision petition had observed that the private complaint did not disclose that the tax that was collected and not deposited by the accused/respondent did not exceed a sum of Rs. 50,00,000/- to attract an offence punishable under Section 89 of the Finance Act, 1994. This is something that the Trial Court must have considered. Having regard to the fact that the order impugned before the Revisional Court did not show any clear application of mind and also did not indicate that the Trial Court was satisfied that an offence under Section 89(1)(d) of the Finance Act, 1994 was committed, the Revisional Court ought to have remitted the case back to the Trial Court for reconsideration namely, to take cognizance after due application of mind. There is no error apparent on the face of the impugned order warranting interference at the hands of this Court - the petition is dismissed.
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2024 (1) TMI 728
Invocation of Extended period of Limitation - existence of fraud, suppression or willful mis-statement in the facts of the present case or not - short-declaration of taxable value - short payment of service tax - existence of mens rea - HELD THAT:- The extended period of limitation was invoked under proviso to Section 73(1) of the Finance Act, 1994, in the instant case only because the actual taxable value was not reflected/shown in the relevant column of ST-3 returns filed by the appellant during the relevant period. Apart from this the Show Cause Notice has not alleged anything which leads to wilful suppression of facts with an intention to evade payment of Service tax. As per the facts of the present case, the appellant have vehemently argued that they had provided the services to Governmental Authority in particular M/s. Tourism Corporation of Gujarat Limited, 100% owned by Gujarat Government and the activity of the appellant is carrying out work in relation to promotion of Gujarati Cultural, Educational and aesthetic aspects which is entrusted to Municipality under Article 243 W read with 12th Schedule of the Indian Constitution. The levy of Service Tax in the facts of the present case involve interpretation of law and therefore, the Bonafide of the appellant cannot be doubted. Hence, the demand for extended period is not sustainable on limitation. The mens rea/the intent to evade the tax liability is the core for invoking the extended period over the normal period. Appellants apparently have mentioned themselves to be under the bona fide belief of still not being liable under service tax. Based on the said belief only they have not disclosed the said disputed taxable value in ST-3 returns filed before the department. Their such bona fide belief stands corroborated from the fact that all the transactions related to the said disputed taxable value has been disclosed by the appellant in their books of account, profit loss account and in Balance Sheet. If the appellant have intention to evade service tax they would not have disclosed the same. It is also found that the documents relied on by the authority for issuing Show Cause Notice are the balance-sheet, P L Account, 26AS, Income Ledger, and ST-3 returns for the period from October 2014 to June 2017 and clearly, these are the statutory documents which have to be prepared and filed before the respective authorities within the time-frame prescribed under the respective statutes like the Income Tax Act or the Companies Act, or Service tax law as the case may be. Clearly, the disputed service income has been picked up from these very statutory documents and therefore, there cannot be any scope to allege suppression of the fact. The extended period of limitation is not inviolable, in the facts and circumstances of the case - The impugned order is set aside and appeal is allowed only on limitation.
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2024 (1) TMI 727
Demand on the plant and machinery component of the agreement of the M/s. Wimplast Limited - demand primarily for the reason that appellant has not paid the VAT - HELD THAT:- From the impugned order it is seen that no evidence in support of the claim that the right of possession and effective control has not been transferred is presented. The only reason cited in the order is that the appellant has not paid VAT on the said transaction and therefore it implies that the right of position in effective control has not been transferred. Department has to produce positive evidence to show that right of possession and effective control has not been transferred. Thus there are no merit in the impugned order seeking to clarify the activity of renting of plant and machinery as provision of supply of tangible goods service - Moreover, the appellant has discharged the tax along with interest. From this circumstances it appears it is fit case for invoking under Section 80. The penalties imposed in respect of this transactions are therefore also liable to be set aside under Section 80 of the Finance Act, 1994. The impugned order is set aside - appeal is allowed.
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2024 (1) TMI 726
Recovery of short paid service tax - ex-parte order - appellant was called to explain the difference between the figures of Form 26AS and ST-3 returns, but appellant chose not to join investigation and not to join adjudication - Extended period of Limitation - HELD THAT:- In this case, it is a fact on record that the demands have been raised against the appellant on differential figures between Form 26AS and ST-3 returns. It is also a fact on record that the appellant was called to explain the difference between the figures of Form 26AS and ST-3 returns but the appellant chose not to file the reconciliation statement. It is also a fact on record that appellant did not join adjudication proceedings, in that circumstances, the Revenue could not find out why there is a difference between figures of Form 26AS and ST-3 returns which is the route cause of demand of service tax from the appellant in this case. In that circumstances, it is the duty of the appellant to explain why there is difference between the figures of Form 26AS and ST-3 returns which the appellant failed to do so during investigation as well as during adjudication. In that circumstances, to meet end of justice, the appellant is required to file reconciliation statement before the Adjudicating Authority for verification and thereafter to find out whether any difference exist or not. Extended period of limitation - HELD THAT:- The extended period is not invokable as Form 26 AS is public document and the said document was available on record during the period 2014-2015 onwards with the Department, in that circumstances, demand pertaining to extended period of limitation is not sustainable and the same is set aside. Matter remanded back to the Adjudicating Authority to find out from the reconciliation statement to be submitted by the appellant within 30 days from the receipt of this order and if at all there is any difference then demand can be raised against the appellant. In the facts and circumstances of the case, no penalty can be imposed on the appellant. Appeal allowed in part.
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2024 (1) TMI 725
Classification of services - Cargo Handling Service or not - amount collected as ocean freight saving and dispatch earning during 2010 -2011 - HELD THAT:- This Tribunal has already considered the very same issue in the respondent s own case M/S. MOSAIC INDIA PVT. LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST., RAJKOT [ 2014 (12) TMI 169 - CESTAT AHMEDABAD] and by giving proper reasoning dropped the demand. From the above decision of the Tribunal it can be seen that the issue in hand and the issue involved in the above case is identical and since the issue has been settled by this Tribunal, the present appeal do not have any substance. The impugned order is upheld - appeal of Revenue dismissed.
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2024 (1) TMI 724
Validity of SCN - the assesse is Drushti Computer Centre under Drushti Charitable Trust whereas the show cause notice, Order-In- Original and the Order- In Appeal was issued against Arunkant Jadav showing him as a proprietor of Drushti Computer Centre and Director of M/s. Drushti Charitable Trust - HELD THAT:- It is held that despite raising this specific issue before the Adjudicating Authority as well as Commissioner (Appeals) no finding was given, Since there is no dispute that the demand was raised, confirmed and upheld against Shri Arunkant Jadav whereas the assesse from which the demand is recoverable is not Arunkant jadav but it is M/s. Drushti Computer Centre under Drushti Charitable Trust, therefore, on this ground alone that the show cause notice was issued to the wrong person the entire proceeding is ab- initio illegal and incorrect. The impugned order is set aside and appeal is allowed.
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2024 (1) TMI 723
Liability to pay 5%/6% of the value of exempted service i.e. Trading Activity - respondent have reversed the proportionate credit attributed to such exempted service along with interest - HELD THAT:- There isno dispute regarding proportionate reversal of cenvat credit along with interest attributed to the value of exempted service i.e. Trading Activity. Therefore, the demand under other option i.e. 5%/6% of the value of exempted service (trading activity) will not sustain as consistently held by various high court and this Tribunal and also by the judgments in SANSTAR BIO POLYMERS LIMITED VERSUS C.C.E. S.T. -RAJKOT [ 2021 (11) TMI 15 - CESTAT AHMEDABAD] and AMI LIFESCIENCES PVT LTD VERSUS C.C.E. S.T. -VADODARA-I [ 2022 (4) TMI 423 - CESTAT AHMEDABAD] by the learned counsel. Accordingly, the issue is no longer res-integra and the same stands settled in the favour of the assessee. The impugned order is upheld and Revenue s appeal is dismissed.
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2024 (1) TMI 722
CENVAT Credit - input used for providing the construction service - Cement, MS Angles, Channels, TMT Bars, and TMT Rods etc. - contention of the Revenue is that as per the amended Rule 2 (k), the goods on which credit was taken have been excluded - HELD THAT:- On the plain reading of the amended Rule 2 (k) and Explanation 2 there of it is absolutely clear that with regard to the manufacture the input does not include Cement, MS Angles, Channels, TMT Bars, CTD bar and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods. This clearly shows that Explanation 2 is exclusively in respect of manufacturer and not for the service provider. Therefore, the entire base of the department s case on Explanation 2 completely fails as the exclusion in respect of the goods in question is not applicable to the service provider but its applicable only to the manufacturer. Therefore, the appellant undisputedly being a service provider of CICS is clearly eligible for the cenvat credit in respect of the goods in question against the output service of construction. This issue has been considered by the Jurisdiction High Court in the case of MUNDRA PORTS AND SPECIAL ECONOMIC ZONE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE CUSTOMS [ 2015 (5) TMI 663 - GUJARAT HIGH COURT] where it was held that The denial of input credit to the appellant by the respondent is set aside. It is absolutely clear that the cenvat credit on the goods namely Cement, MS Angles, Channels, TMT Bars, TMT Rods etc. for service provider of CICS cannot be denied in terms of Rule 2 (k) of Cenvat Credit Rules, 2004 prevailing at the relevant time. The impugned order set aside - appeal allowed.
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2024 (1) TMI 721
Levy of Service Tax - amount of freight paid by them to tractor trolley owners, who did not issue any LR and transported the goods in such tractor trolley for the appellant - HELD THAT:- The facts are not under dispute that the service of transportation was provided by tractor trolley owners themselves and no transport agency is involved. Freight of the transportation was paid by the appellant to such tractor trolley owner for the transportation of goods i.e. Gas cylinder, no LR/consignment note was issued. In this case even though the transportation activity is involved but the criteria for classifying a transport service under GTA are not fulfilled. Such as no consignment note/LR was issued and the transportation was provided by not the goods transport agency but individual tractor trolley owners Therefore, the service does not fall under the definition of GTA service. Accordingly, in our considered view the same is not taxable in the hands of the appellant. In the case of LAKSHMINARAYANA MINING CO. VERSUS COMMR. OF ST., BANGALORE [ 2009 (9) TMI 71 - CESTAT, BANGALORE] Bangalore Tribunal has held that In the absence of a finding that the appellants had received the service of transport of goods from any GTA, the impugned demand of Service tax, and penalties are liable to be set aside. Thus, it is categorically held that in case transportation made by vehicle operator (in the present case tractor trolley owners) and no consignment note was issued, the service cannot be held as goods transport agency service liable to Service Tax. Therefore, the impugned order is not sustainable. The impugned order is set aside - Appeal is allowed.
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Central Excise
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2024 (1) TMI 720
Method of Valuation - whether the appellant M/s. Inova India is a job worker of M/s. Roca or whether the transaction between the two is on principal to principal basis? - HELD THAT:- From the stipulation in the Agreement, it can be seen that the transaction is on principal to principal basis. Further, the very same issue was considered by the Tribunal in the appellant s own case M/S. INOVA INDIA, M/S. ROCA BATHROOM PRODUCTS PRIVATE LIMITED, (FORMERLY M/S. PARRYWARE ROCA (P) LTD. ) VERSUS THE COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II COMMISSIONERATE [ 2020 (3) TMI 308 - CESTAT CHENNAI ] and the Tribunal followed the decision in the case SUJHAN INSTRUMENTS VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II, HONEYWELL ELECTRICAL DEVICES AND SYSTEMS INDIA LTD. VERSUS PRINCIPAL COMMISSIONER OF CENTRAL EXCISE, CHENNAI-I AND COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI VERSUS SUJHAN INSTRUMENTS [ 2018 (7) TMI 420 - CESTAT CHENNAI ] to set aside the demand as well as the penalties. The demand cannot sustain. Consequently, the penalty imposed on M/s. Roca also cannot sustain. The impugned order is set aside - Appeal allowed.
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2024 (1) TMI 719
CENVAT Credit - iron fines emerging in the process of manufacture of sponge iron ore - iron ore fines are not excisable and no excise duty is paid - non-maintenance of separate records - applicability of Rule 6(3) of the CCR - HELD THAT:- This issue is no longer res integra and in the case of M/S GHANKUN STEELS PRIVATE LIMITED. VERSUS COMMISSIONER OF CUSTOMS CENTRAL EXCISE, RAIPUR. [ 2019 (5) TMI 1998 - CESTAT NEW DELHI] , it has been held by this Tribunal that the Respondent need not deposit the amount equal to 6% under Rule 6(3) of the CCR. The amendment made by way of explanation to Rule 6 makes no difference because the question is not if the goods are non-excisable or excisable but exempted but whether the iron ore fines are manufactured or not and this Tribunal has consistently held that the iron ore fines are not manufactured but only emerge during the process of manufacture of sponge iron. Accordingly, there are no force in the appeal by the Revenue - The appeal is, accordingly, dismissed and the impugned order is upheld.
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2024 (1) TMI 718
Valuation - related parties for captive consumption in relation to the manufacture of other excisable goods - Rule 8 read with Rule 9 of Central Excise Valuation Rules, 2000 - Circular No. 643/34/2002- CX dated 01.07.2002 - HELD THAT:- The show cause notice has not specifically alleged that under which category appellant and their buyer are related for purpose of valuation under Section 4 of the Central Excise Act, 1944. For this reason itself the entire proceeding is ab initio illegal and not sustainable. Moreover, the appellant is a public limited company and buyer is a separate independent private limited company. Even though the buyer is one of the group company of the appellant that alone cannot be a reason for establishing the relationship between the appellant and the buyer - the payment of duty made by the appellant on the transaction value is absolutely correct and legal. The impugned order is set aside - appeal allowed.
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2024 (1) TMI 717
Refund claim - excess duty paid due to price variation clause in the contract for supply of goods - HELD THAT:- At the time of the clearance of the goods, price of the goods is fixed on the basis of earlier data given in the IEEMA formula but the price is finally decided on the basis of the current IEEMA formula which is only known at the later stage. Therefore, there is always possibility of variation in prices as compared to the price applied at the time of clearance of goods. The appellant after obtaining the actual price based on IEEMA formula worked out the difference. In case of lower price, for the excess paid duty they claimed refund and in case of higher price they pay differential duty. As per this fact the transaction value shall be actual price which is determined subsequently on the basis of the actual data based on the IEEMA formula of the relevant period of clearance. Accordingly, the appellant is prima facie entitled for the refund of excess paid duty. On the basis of the reply dated 19.07.2010 submitted before the adjudicating authority and various other records clearly establish that the appellant have submitted all the documents for the processing of the refund, Commissioner (Appeals) has ignored and not considered - the matter needs to be reconsidered only for purpose of verification of documents for processing the appellant s refund claim. The appeals are allowed by way of remand to the Adjudicating Authority for passing a fresh order preferably within a period of two months from the date of this order.
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2024 (1) TMI 716
CENVAT Credit - capital goods used in the power plant which is situated at distance of 14Kms. away from the factory - period January 2002 to July 2004 - time limitation - HELD THAT:- It is found that in the present matter Ld. adjudicating authority in respect of disputed cenvat credit observed that the present case is in respect of cenvat credit taken at their Clinker unit on the capital goods which were installed at power plant, which is around 14 KMs away from the Clinker unit and said power plant is not covered under the central excise registration issued to Appellant. Further Ld. Commissioner found that consent letter was issued to M/s Sanghi Industries Ltd. for installation of Captive Power Plant for their Cement Plant at Village Akri, Distt. Kutchh and same was not for the Appellant i.e M/s Sanghi Industries Ltd. (Cement Division), Clinker Unit, Sanghipuram, P.O. Motiber, Taluka Abdasa, Distt. Kutchh. It is found that for the availment of Cenvat credit on disputed capital goods, appellant first prove that the said power plant where the capital goods was used are belong to them - in the interest of justice one opportunity can be extended to the appellant to prove that power plant where the capital goods were used are belong to them. The appeal is disposed off by way of remand to the adjudicating authority for passing a fresh order after considering the documents/ evidences produced by the appellant in this regards.
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2024 (1) TMI 715
Violation of principles of natural justice - vital facts not examined - recovery of dues - HELD THAT:- The Learned Commissioner (Appeal) merely by reproducing in section 11 held that there is no infirmity in the notice of demand to defaulter dated 14.06.2004 . However as per the submission made by the Learned Counsel, we find that the Learned Commissioner appeal has not examined the vital facts of the case that during the period, for which the demand was confirmed, which is sought to be recovered from the present appellant what was the status of the appellant. As submitted by appellant, the present appellant had resigned as a partner from the partnership firm in August, 1993 and the period involved in the present demand is April, 1994 to August 1994. On this basis it prima facie appears that the period for which the demand was raised, when the appellant was not a partner, how he can be held responsible for the demand. However, the Learned Commissioner has not examined this fact at all, which is very vital to arrive at conclusion whether, any recovery can be made from the present appellant. Matter remanded to the commissioner appeal for reconsidering the appeal before him by following the principle of natural justice - Appeal is allowed by way of remand to the Learned Commissioner for passing a fresh order within a period of two months from the date of this order.
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CST, VAT & Sales Tax
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2024 (1) TMI 714
Denial to grant of subsidy to the petitioner - seeking direction for setting aside the Notification dated 21.12.2018 (Annexure P-14) and Notification dated 09.01.2019 (Annexure P-18) seeking to amend the policy for grant of subsidy being against the law and contrary to the Enterprises Promotion Policy, 2015 - HELD THAT:- In the case of Pournami Oil Mills [ 1986 (12) TMI 37 - SUPREME COURT ] it was a case where the State Government has granted package of concessions to new Small Scale Industries, thereafter the units were set up in response to the first order passed granting concessions. The order granting concessions was subsequently withdrawn by the Government. The Supreme Court held that all the units which have been set up in response to the first announcement made were entitled to claim all concessions on the plea of estoppels. Thereafter, a similar question came up for consideration before the Supreme Court in the case M/s Pawan Alloys and Casting Pvt. Ltd. [ 1997 (8) TMI 519 - SUPREME COURT ]. The Supreme Court was examining a case where the U.P. State Electricity Board had granted incentives to set up new industries for a particular period. Subsequently, this benefit was withdrawn by the Board. The Supreme Court examined and held that the withdrawal was made on account of any public interest and hence it was held that it was barred by promissory estoppels and the Board had granted the benefit for a period of three years and the benefit could not be withdrawn before three years. The units had already been set up. The petitioner had set up a small-scale technical textile unit in Village Khera Gani, Tehsil Shahzadpur, District Ambala, which falls in Block C . The industrial unit was covered as per the Notification dated 17.10.2017 showing categorization of blocks, notified on 02.06.2016 (Annexure P-2). The Haryana Government had issued a policy dated 12.06.2018 (Annexure P-9) pursuant to the Enterprises Promotion Policy-2015, where power tariff subsidy upto Rs. 2/- per unit for micro and small enterprises, category C and D blocks was to be provided for a period of three years from the date of release of power connection - The respondents cannot decline the benefit of subsidy in view of the Notification dated 21.12.2018 (Annexure P-14) as per the rule of estoppels they cannot deny this benefit as the industries have already been set up pursuant to the 2015 Policy and they have complied with all the conditions of the Enterprises Promotion Policy- 2015 (Annexure P-1), Notification dated 17.10.2017 (Annexure P-2) and the Policy dated 12.06.2018 (Annexure P-9). The order dated 28.05.2019 (Annexure P-21) passed by respondent No. 3-Uttar Haryaba Bijli Vitran Nigam Limited (UHBVNL) declining the grant of subsidy to the petitioner, is set aside and direction is being given to the respondents to pay the power subsidy as claimed by the petitioner as per the bills submitted without insisting on the policy decision notification dated 21.12.2018 (Annexure P-14). It is further being observed that the Notification dated 21.12.2018 (P-14) and 09.01.2019 (Annexure P-18) whereby the policy for grant of subsidy has been amended, will be applicable prospectively and not retrospectively pertaining to the units which were set up after the Notification of the Enterprises Promotion Policy- 2015 (Annexure P-1), Notification dated 17.10.2017 (Annexure P-2) and the Policy dated 12.06.2018 (Annexure P-9). The writ petition is allowed.
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2024 (1) TMI 713
SEZ unit - Wrong declaration of turnover - Alleged variance between the amounts declared by the petitioner in Annual Performance Report (APR) in Form-1 under the provisions of the Special Economic Zones Act, 2005 read with Rule 22 of the Special Economic Zones Rules 2006 - HELD THAT:- There are indications that the petitioner was engaged not only in intra-state stock transfer to its branch/depot inside the State but also inter-state stock transfer to its branch/depot outside the State apart from the exports from its factory in Special Economic Zone and its warehouse in Special Economic Zone in the State of Tamil Nadu - In the case of intra-state stock transfer to its branch/depot within the state of Tamil Nadu, the petitioner would have generated Delivery Note in form JJ under Rule 15(3), Rule 15(18), Rule 15(20) and Rule 15(21) of TNVAT Rules, 2007. In the case of inter-state stock to its branch/depot, outside the State of Tamil Nadu, such branch/depot would have issued a suitable Form-F to the petitioner. Such inter-state stock transfers/depot to its branch outside the State would have been liable to tax under local VAT enactments on further sale from such from its inter-state branch/depot outside the State of Tamil Nadu. There should have been proper correlation of documents. To the extent, the petitioner was unable to prove intra-state/ inter-state stock transfer to its branch/depot, tax implication would be different under the respective enactments. For inter-state branch/depot transfer outside the State, where the petitioner was unable to produce documents, Section 6(A) 3 of the CST Act, 1956 would be applicable. Denial of exemption on export under the provisions of the CST Act, 1956 will have an impact on assessment under TNVAT Act, 2006. If exports are not proved, such turnovers are liable to be taxed under the TNVAT Act, 2006. Therefore, as sequitur, a revised assessment order under TNVAT Act, 2006 should have been passed by invoking the machinery under the said Act. Demands on such turover cannot be made under CST Act, 1956 in absence of any notice to infer inter-state sale. The impugned assessment orders dated 12.12.2014 passed by the third respondent for the assessment years 2009-10 to 2011- 12 are liable to be quashed - the amount Rs. 423,48,00,000/- which was appropriated vide impugned G.O (MS) No. 32 Industries (MIF.1) Department dated 28.3.2017 is ordered to be refunded subject to final order to be passed by the 3rd respondent - Petition dismissed.
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2024 (1) TMI 712
Levy of penalty under Section 5B read with Section 7-A(2) of the APGST Act, 1957 - utilization of cement in the execution of the works contract - violation of declaration under the proviso to sub-section 1 - demand on the ground that, since the cement pipes manufactured by the Revenue was predominantly used for execution of the works contract awarded to the assessee themselves, he was not entitled for the purchase of cement at a reduced price - HELD THAT:- The finding of facts by the Tribunal cannot under any stretch of imagination be held to be contrary to law or contrary to the materials which have been taken into consideration for the purpose of reaching to the said conclusion. A similar view was taken by this Bench while deciding Tax Revision Case No.8 of 2008 and batch on 09.10.2023 [ 2023 (10) TMI 723 - TELANGANA HIGH COURT] , wherein in paragraph No.19, this Bench had taken a similar stand while dismissing the Tax Revision Cases filed by the assessee where it was held that A plain reading of the aforesaid proviso would clearly give an indication that when a purchase of cement is made by a manufacturer of a finished good like asbestos sheets, pipes, paint manufacturers, hallow bricks, it would be eligible for purchase of cement at a concessional rate. The petitioner was not a manufacturer of any finished goods like the ones mentioned in the preceding paragraph. Thus, no strong case has been made by the Revenue calling for interference with the order passed by the Tribunal - The view of the Tribunal is also based upon the finding of the High Court of Andhra Pradesh in the case of B. SEENAIAH AND CO. VERSUS COMMERCIAL TAX OFFICER, KHAIRATABAD CIRCLE, HYDERABAD AND OTHERS [ 2001 (6) TMI 794 - ANDHRA PRADESH HIGH COURT] wherein the High Court of Andhra Pradesh dealing with the phrase deemed sale has held While completing the execution of the works contract the property in the goods passed to the contractee from the contractor, the petitioner, at the time they were incorporated in the laying of the road. Therefore, there was a clear transfer of property in goods, while completing the works contract which would result in sale or deemed sale of goods, liable to tax. There are no merits in the contentions and submissions made by the Revenue while assailing the order of the Tribunal which is under challenge in the present three Tax Revision Cases - The three Tax Revision Cases therefore stands dismissed.
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