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TMI Tax Updates - e-Newsletter
January 2, 2024
Case Laws in this Newsletter:
GST
Income Tax
PMLA
Service Tax
Indian Laws
Articles
News
Notifications
Highlights / Catch Notes
GST
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Jurisdiction to conduct audit - the petitioner's registration is cancelled, now he is an unregistered concern - On perusing Section 65, it is stated that the audit can be conducted to the said registered persons “for such period”, “for such frequency” and “in such manner”. When a Section provides for periodical audit, the respondent having failed to conduct audit for all these years, suddenly cannot wake up and conduct an audit. - HC
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Refund of IGST - zero rated supplies - grant of refund after adjusting the differential duty drawback amount which was claimed erroneously because of mistake committed by the clearing and forwarding agent - The respondent-authorities are directed to comply with the directions issued by this Court while sanctioning the refund of IGST after deducting the differential duty drawback with 7% simple interest as ordered by this Court. - HC
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Proper officer / Jurisdiction of GST authorities - Calling for the records of the impugned show cause notice - When the matter had come up today, the learned counsel has filed his counter and informed this Court that the officer concerned is the second respondent, the Superintendent of Central GST and Central Excise, Theni Range. - Petitioner directed to answer the show cause notice and appear before the authorities - HC
Income Tax
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Unexplained investment u/s. 69B - excess stock found during the course of survey - taxability at higher rate of tax u/s 115BBE - the same is to be assessed as business income as declared by the assessee and it cannot be charged at special rate of tax u/s. 115BBE of the Act. - AT
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TP Adjustment - Notional interest on overdue receivables - number of days outstanding beyond the grace period for each and every invoice. - If there are no agreements with the AEs, the TPO should consider the market practice in the relevant sector and then grant the grace period. We, however, clarify that in business world there is always a grace period and therefore non-granting of grace period is ignoring the business realities. - AT
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Computation of interest u/s 234A - if the assessee deposits the taxes at a date at which the interest liability u/s 234A, does not exceed Rs. 1 lakh, such an assessee is entitled to the extended period of due date and, therefore, any return of income filed thereafter will not fasten any additional interest liability. - AT
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Disallowance of Expenses - AO erred in appreciating that nonreply of Section 133(6) notices cannot necessarily lead to disallowance of petty expenses ranging from Rs. 9,000/- to Rs. 1,00,000/- in the absence of any other proof of non-incurring of expenses. Assessee has provided primary and direct evidences along with the PAN & address and hence, no disallowance can be made merely on the reason of noncompliance of the parties to the notices issued u/s 133(6) of the Act. - AT
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Claim of depreciation - Fresh claim made in the revised ITR - irrespective of the fact of assessee claiming or not, the depreciation shall be allowed while computing the total income of the assessee. Then it becomes the obligation on the part of the Revenue to allow depreciation on goodwill even if it is not claimed by the assessee. - AT
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Income taxable in India - royalty receipts - copyright - Light to broadcast “Live events” - when the agreements clearly bifurcate the consideration paid towards Live and “Non-Live Rights”, the Department can’t deem the payment made for “Live Rights” to have been made for a bouquet of rights. - the payments in dispute are not made for use of any “process” as defined u/s 9(1)(vi) of the Act and can’t be charged to tax as “Royalty” in the hands of the overseas rights holders. - AT
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Income taxable in India - Royalty u/s. 9 and/or under Article- 12 of India - payments made in terms of Sponsorship Agreement - Singapore, DTAA - sponsorship of the ICC Cricket Events - such payments cannot be considered as royalty in the hands of recipient u/s. 9(1)(vi) - AT
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TDS u/s 195 - non deduction of tds on payments to various overseas entities for translating its products into foreign language (other than English) for sale in foreign countries - CIT(A) has not given any justification while allowing the appeal of the assessee on this issue. - Matter restored back - AT
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Assessment u/s 153A - undisclosed income - purchase of properties - payment of on money - AO has rejected the reply to the show cause notice without assigning proper reasons by merely relying on the estimation without any justification. - AO has not given any break-up of the income by deducting the bund area and also the income from Fish Culture with respect to the leased lands. - the assessee has offered an amount of Rs. 74,458/-per Acre (net of Bund area), and which is more than the rate per Acre fixed by the jurisdictional Bench - CIT(A) rightly deleted the additions - AT
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Validity of Assessment u/s 153A - non-generation of DIN - approval u/s. 153D of the Act is akin to the approval u/s. 151 of the Act, wherein, we find sanction/approval u/s. 151 required from prescribed authority to initiate issuance of notice u/s. 148 of the Act, likewise, in order to proceed with the assessment u/s. 153A, AO required to take approval u/s. 153D of the Act, which in our opinion, is a statutory requirement, falling under the ambit of Circular No. 19/2019 to generate DIN. Therefore, we hold non-mentioning of DIN on approval granted u/s. 153D of the Act vitiate the final assessment order passed u/s. 153A r.w.s. 144 of the Act. - AT
Indian Laws
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Preventive detention - judicial reviewability - White Collar Offender - Detention being a restriction on the invaluable right to personal liberty of an individual and if the same were to be continued for the maximum period, it would be eminently just and desirable that such restriction on personal liberty, in the least, reflects an approach that meets the test of Article 14. - SC
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Dishonour of Cheque - rebuttal of presumption - the learned Trial Court had rightly doubted the financial capacity of the complainant and had rightly held that the presumption contained in Section 139 of the Negotiable Instrument Act was rebutted. This was a reasonable view taken by the learned Trial Court - HC
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Dishonour of Cheque - vicarious liability of Managing Director - The liability of persons referred to in Section 141 of the N.I Act is coextensive with that of the company, firm or association of individuals, in a prosecution under Section 138 of the N.I Act. When it is found that the company has not committed the offence, and it is acquitted, its directors are not liable to be convicted, for the offence for which the company has been acquitted. - HC
Service Tax
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Exemption from service tax - Providing computer training services on behalf of Municipal corporation - so long as the payment is made by the concerned candidate to the petitioners or by the Corporation to the petitioners, the service provider being the petitioners, there is an obligation on part of the petitioners to collect the service tax from the payee and be remitted to the concerned department - the stand taken by the Corporation that it is exempted from making payment under Section 66D of Finance Act is of no avail. - HC
VAT
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Refund of excess tax alongwith interest - Power to re-quantification or re-adjudication after the sanction of refund - there is no doubt that the first respondent had issued the said notice beyond the scope of his jurisdiction, since in the course of processing of the refund application, the 1st respondent is not empowered to re-adjudicate or re-quantify while passing the refund order. - HC
Case Laws:
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GST
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2024 (1) TMI 32
Refund of IGST - zero rated supplies - grant of refund after adjusting the differential duty drawback amount which was claimed erroneously because of mistake committed by the clearing and forwarding agent - HELD THAT:- It appears that the impugned order is passed contrary to the directions issued by this Court. Once this Court has issued the directions, the same are binding upon the respondent-authorities and the respondent-authorities had no reason to take a different view than the directions issued by this Court while exercising the powers under Article 226 of the Constitution of India. The respondent-authorities are bound by the directions issued by this Court and therefore, the impugned order is hereby, quashed and set aside. The respondent-authorities are directed to comply with the directions issued by this Court while sanctioning the refund of IGST after deducting the differential duty drawback with 7% simple interest as ordered by this Court. Such exercise shall be completed within a period of four weeks from the date of receipt of the copy of this Order. Petition allowed.
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2024 (1) TMI 31
Refund claim - seeking acceptance of refund application either by opening the portal of the department or in the physical form - period 2017-18 and 2018-19 - HELD THAT:- Admittedly, the petitioner did not make an application for refund within the period provided. The reason stated for the application not having been filed is a dispute with the party respondent - It is not satisfying that the reason stated is reasonable nor can the limitation be extended under Section 54(1). There are absolutely no reason to entertain the writ petition and the same stands dismissed.
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2024 (1) TMI 30
Levy of penalty for transporting the vehicle in question after expiry of the e-way bill which was expired - HELD THAT:- In view of the facts and circumstances of the case which appears from record and considering the order of this Court in the case of ASHOK KUMAR SUREKA VERSUS ASSISTANT COMMISSIONER, STATE TAX, DURGAPUR RANGE, GOVERNMENT OF WEST BENGAL [ 2022 (3) TMI 445 - CALCUTTA HIGH COURT] , this writ petition being WPA 22612 of 2023 is disposed of by setting aside the aforesaid impugned order of the appellate authority and adjudicating authority and as a consequence, petitioner will be entitled to get the refund of the penalty in question subject to compliance of legal formalities. Petition disposed off.
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2024 (1) TMI 29
Proper officer / Jurisdiction of GST authorities - Calling for the records of the impugned show cause notice - creation of forged deed of reconstitution partnership firm - suppression of facts - HELD THAT:- The show cause notice, which is the impugned order before this Court, does not reflect the designation or name of the officer, before whom the petitioner had to appear. Therefore, when the matter had came up for admission on 08.06.2023, this Court had directed the learned counsel appearing for the respondents 1 and 2 to give the details of the official before whom the petitioner has to appear. When the matter had come up today, the learned counsel has filed his counter and informed this Court that the officer concerned is the second respondent, the Superintendent of Central GST and Central Excise, Theni Range. The Writ Petition is disposed of with a direction that the petitioner shall answer the show cause notice dated 21.03.2023 and appear before the second respondent on 28.06.2023.
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Income Tax
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2024 (1) TMI 28
Unexplained investment u/s. 69B - excess stock found during the course of survey - HELD THAT:- According to assessee, if we apply this profit rate the stock will almost come close to book stock. It means that there is some discrepancies in the physical verification done because it is not possible to estimate stocks of textile and handloom within one day. Even otherwise, the Revenue could not point out how they have valued each items because they have not valued in term of quality i.e value of the textile and handloom. In view of the above, it cannot be said that excess stock found, which is also based on estimate only, is unexplained investment. In view of the above, the same is to be assessed as business income as declared by the assessee and it cannot be charged at special rate of tax u/s. 115BBE of the Act. Hence, we direct the Assessing Officer to assess the income of excess closing stock found during the survey operation in the business premises of the assessee as business income and not as unexplained investment u/s. 69B of the Act. Disallowance of expenditure @30% - We note that AO without going into the details estimated disallowance of expenditure at 30% out of total expenditure - In the absence of details of expenses, CIT(A) confirmed the action of the AO. After going through the facts of the case, we are of the view that in the absence of evidence, it cannot be denied that there will be no indirect expenses. Hence, we restrict the disallowance at 20% and direct the Assessing Officer accordingly.
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2024 (1) TMI 27
Revision u/s 263 - As per CIT AO has erroneously allowed the deduction u/s. 80P(2)(a)(i) in respect of interest income earned from Co-operative banks and hence it is prejudicial to the interest of Revenue - HELD THAT:- As respectfully following the Hon ble Supreme Court decision in the case of Mavilayi Service Co-operative Bank Limited,[ 2021 (1) TMI 488 - SUPREME COURT] , decision in the case of S-1308, Ammapet Primary Agricultural Cooperative Bank Ltd.[ 2016 (8) TMI 560 - MADRAS HIGH COURT] and Tamilnadu Co-operative State Agriculture and Rural Development Bank Limited,[ 2022 (6) TMI 770 - ITAT CHENNAI] and in view of the above findings that the assessee had earned interest income from deposits from Central Co-operative Bank Tamil Nadu State Apex Co-operative Bank, we are of the view that the Assessing Officer had rightly allowed the claim of deduction u/s. 80P(2)(a)(i) of the Act and hence the revision order is reversed and the appeal of the assessee is allowed.
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2024 (1) TMI 26
TP Adjustment - Addition of provision of warranty services - HELD THAT:- TPO has committed an error that while he has considered the cost of services provided during the financial year 2016-17, the TPO has not considered the revenue recognized during the year. This has resulted into a situation where the cost of services provided is considered but the revenue pertaining to these services have been ignored. Obviously, this will give absurd results. We, therefore, concur with the arguments advanced by assessee and find no mistake in the accounting policy adopted by the assessee. We have also considered the other arguments of the Ld. AR that the entire revenue recognized during the year amounting to INR 19,16,24,516 has been offered for taxation. Since we have accepted the accounting methodology adopted by the assessee, we do not wish to comment on this argument of Ld. AR. Thus we hold that the margin of the assessee under this segment should be computed by considering the entire revenue of INR 19,16,24,516. This computation is available in the order of the TPO and the margin works out to 35.71%. The median margin of the comparables which has been accepted by the TPO works out to 6.55% as available on page number 6 of the order of the TPO. Since the margin of the assessee is higher, the entire transfer pricing addition of INR 13,99,71,558 made by the TPO on account of provision of warranty services, is deleted. Provision of software development services - Comparable selection - assessee is providing software development services including identifying the bugs and debugging the software while the AEs are responsible for all other functions - HELD THAT:- Exclusion of companies as functionally dissimilar with that of assessee.-[ Deselect E-Infochip Limited, Dun Bradstreet Technologies Data Services Pvt. Ltd., Interglobe Technology Quotient Pvt. Ltd., Cybage Software Private Limited,Acewin Agriteck Ltd., Cadsys (India) Ltd., Cygnet Infotech Pvt. Ltd., InfoBeans Technologies Limited, Nihilent Analytics Ltd. and Nihilent Ltd. ] Arguments of the Ld. AR regarding the inclusion of 8 companies - A company which is comparable in AY 2016-17 and/or AY 2018-19 cannot be rejected by the TPO just on the basis of a general and common comment. TPO has not pointed out any specific reason for rejection of these companies while the same companies were good comparable either in the immediately preceding year or succeeding year. Thus, we direct the TPO to include the following companies in the comparable set, i.e.,C G-V A K Software Exports Ltd., Harbinger Systems Pvt Ltd., Sagarsoft (India) Ltd., Evoke Technologies Pvt Ltd., Kireeti Soft Technologies Ltd., Maveric Systems Limited and Akshay Software Technologies Limited. Sasken Technologies Ltd. which the Ld. AR has argued for inclusion on the ground that it passes all the quantitative filters adopted by the TPO - submitted that Sasken Technologies Limited (Software Service Segment) is engaged in Software development services; The Company has reported Segment reporting between 'Software service' and ' Software Product' and the relevant Segment 'Software Service' Selected by the Assessee. Since the Ld. AR has argued that there are segmental results available, we direct the TPO to verify the same from the annual report and if segmental results are available use the segmental results for this company. We direct accordingly. Notional interest on overdue receivables - TPO considered amount of receivables from AE as indirect advance which benefitted the AE. The TPO in his order has observed that the Assessee has not submitted the required details in relation with the outstanding receivables - whats the amount and days on which the interest should be charged, the grace period and the rate of interest applicable? - HELD THAT:- As far as the amount and days on which the interest should be charged there is no doubt that the interest can be charged only on the actual amount outstanding for each and every invoice beyond the grace period. Charging of interest by the TPO on the closing balance without looking into delay of each and every invoice is incorrect. Therefore, we direct the TPO to compute the amount and number of days outstanding beyond the grace period for each and every invoice. The assessee shall provide complete information in this regard to the TPO. Number of days of grace period, there is no thumb rule that grace period of 30 days, 60 days or 90 days should be allowed. It should be dependent upon (i) the terms and conditions of agreement with the AE and/or (ii) the terms and conditions of comparable business transactions with the Non-AEs. On being asked, the Ld. AR submitted that the assessee is a captive service provider and there are no comparable transactions with the Non-AEs. Thus, we are left with no choice but to remand this issue to the file of the TPO to examine if there are any agreements with the AE and what is the grace period in those agreements. If there are no agreements with the AEs, the TPO should consider the market practice in the relevant sector and then grant the grace period. We, however, clarify that in business world there is always a grace period and therefore non-granting of grace period is ignoring the business realities. Rate of interest we have considered the arguments of both the sides. Following various judicial precedents, we hold that the rate of interest of Libor + 200 bps should be applied.
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2024 (1) TMI 25
Penalty u/s 271D - cash Received in contravention to the provision of section 269SS - mandation of recording satisfaction - whether without satisfaction being recorded in the assessment order, penalty can be levied under section 271D of the Act? - HELD THAT:- In the case of Umakant Sharma Vs JCIT [ 2023 (8) TMI 1094 - ITAT INDORE] observed that, it is pre-requisite condition that the initiation of penalty under section 271D/271E of the Act, there must be assessment proceedings or proceeding arising from assessment order are pending in the case of the assessee, and, therefore, following case of Vijayaben G. Zalavadia [ 2022 (5) TMI 1572 - ITAT AHMEDABAD] deleted the penalty levied under section 271D by holding that without any assessment proceedings in the case of the assessee such penalty is not valid and liable to be quashed. Also this question as dealt in the case of Srinivasa Reddy Reddeppagari [ 2022 (12) TMI 1446 - TELANGANA HIGH COURT] wherein while referring to the decision of the Hon ble Apex Court in the case of Jai Laxmi Rice Mills [ 2015 (11) TMI 1453 - SUPREME COURT] the Hon ble High Court held that the provisions under section 271E and 271D of the Act are in pari materia and since in terms of the decision in Jai Laxmi Rice Mills (supra), satisfaction must be recorded in the original assessment order for the purpose of initiation of penalty proceedings under section 271E of the Act, the same is equally applicable for initiation of penalty proceedings under section 271D of the Act. Assessee appeal allowed.
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2024 (1) TMI 24
Computation of interest u/s 234A - date on which the quantification of interest liability under section 234A is to be taken - Assessee pleaded that interest u/s 234A was paid by the assessee on 27/09/2021 itself though the return was filed a bit late, but that too within the time allowed by the CBDT for filing of the returns - According to the assessee, as on the date of paying the taxes on 27/09/2021, the interest liability under section 234A of the Act was less than Rs. 1 lakh and, therefore, such payment of taxes shall be construed to be before the due date - HELD THAT:- As decided in PRANOY ROY ANR ANOTHER INDIA METERS LTD. [ 2008 (9) TMI 150 - SUPREME COURT] interest under section 234A of the Act could be levied only by way of compensation to compensate the Revenue in order to avoid it from being deprived of the payment of tax on the due date and, therefore, such interest would be payable only in a case where tax has not been deposited prior to the due date of filing of the income tax return. We are in agreement with the submission of the learned AR. The clarification No. 1 of the circular is not clear as to the date on which the quantification of interest liability under section 234A of the Act has to be taken. But, when we read the circular as a whole in the light of the decision of the Hon ble Apex Court in the case of Prannoy Roy (supra), the reasonable inference is that if the assessee deposits the taxes at a date at which the interest liability under section 234A of the Act, does not exceed Rs. 1 lakh, such an assessee is entitled to the extended period of due date and, therefore, any return of income filed thereafter will not fasten any additional interest liability. We direct the AO to verify whether the taxes paid by the assessee as on 27/09/2021 took care of the interest liability till such date, and if it is so, to delete the addition made. Grounds of appeal are allowed accordingly.
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2024 (1) TMI 23
Addition on account of suppression of sales - DRP held that on the issue of credits notes it is seen that the credit note and debit note are been inserted by the assessee for account reconciliation which is not backed by actual transaction - allegation of the revenue that the credit note was afterthought is baseless as the credit note was duly accounted in the sales for the purpose of benchmarking, the corresponding adjustment was made by the AE, and furthermore benchmarking was duly accepted by the AO - HELD THAT:- Once the transaction has been benchmarked at the arm length and no adverse finding was there, then no further addition can be done, and no further attribution can be made. The AO and subsequently ld. DRP both erred in not appreciating the judgment of Morgan Stanley [ 2007 (7) TMI 201 - SUPREME COURT] - We find that the assessee has consistently benchmarked its international transaction with the cost plus @ 15% markup and it has been consistently accepted by the department during the assessment procedure and has passed the assessment order u/s 143(3). The AO erred in not appreciating that issuance of credit note / debit note was a regular year end feature of the assessee to achieve such benchmarking of mark -up. Once such transaction is held to be at ALP, no further addition /attribution can be made to the assessee income. Hence, we hold that the AO cannot treat the amount of Rs. 94,00,610/- as an unaccounted sales Disallowance of Expenses - The argument of the assessee that the Ld. DRP has erred in not appreciating that the all the inward and outward entry in the SEZ Area must passed through the checking of another wing of Ministry of Revenue i.e., custom department and the SEZ authority cannot be accepted. Invoices pertaining to Modi Graphic, Bharat Safety House, Om Jyoti Engineering Enterprises, Inox Air Products Ltd. and Vikram Paints Sanitary Store have not been stamped proving their entry into the premises. Hence, the same cannot be considered as proven correctly. The disallowance on account of these expenses is hereby upheld. For other expenses, we find that they are very minor expenses, the AO erred in appreciating that nonreply of Section 133(6) notices cannot necessarily lead to disallowance of petty expenses ranging from Rs. 9,000/- to Rs. 1,00,000/- in the absence of any other proof of non-incurring of expenses. Assessee has provided primary and direct evidences along with the PAN address and hence, no disallowance can be made merely on the reason of noncompliance of the parties to the notices issued u/s 133(6) of the Act.
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2024 (1) TMI 22
Claim of depreciation on goodwill - depreciation was not claimed in the original return (ITR) - Power of authorities to consider the claim for additional depreciation by way of filing revised computation of income - whether the assessee could make a claim for deduction other than by filing a revised return - HELD THAT:- Such an issue is no longer res integra and is covered by the decision of Goetze (India) Ltd [ 2006 (3) TMI 75 - SUPREME COURT] wherein Hon ble Apex Court affirmed the principle that the appellate authorities can consider additional claim even if the same is not raised by the taxpayer in the original or revised return and the Tribunal under section 254 of the Act has the power to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. We are, therefore, of the considered opinion that there is no bar to consider the claim of the assessee for additional depreciation, made otherwise than by a revised return of income by the appellate authorities. Goodwill acquired pursuant to the amalgamation - The issue of depreciation on goodwill arising on amalgamation has already been dealt with by Hon'ble Supreme Court in the case of Smifs Securities [ 2012 (8) TMI 713 - SUPREME COURT] which is later followed in various cases by the Hon ble High Courts and Co-ordinate Benches of the Tribunal. We find force in the submissions of the learned AR that Explanation 2 to Section 43(6) of the Act, does not affect the right of amalgamated company to claim depreciation as the explanation is applicable only where an existing block of asset is transferred to the amalgamated company, and that since here goodwill comes into existence only for the first time because of excess consideration paid, explanation does not apply. Explanation 5 to Section 32(1) of the Act clearly lays down that the provisions of such sub-section shall apply whether or not the assessee has claimed the deduction in respect of the depreciation in computing the total income. It, therefore, goes without saying that irrespective of the fact of assessee claiming or not, the depreciation shall be allowed while computing the total income of the assessee. Then it becomes the obligation on the part of the Revenue to allow depreciation on goodwill even if it is not claimed by the assessee . At the same time, the CBDT Circular No.14 (XL 35) of 1955, date 11/04/1955, reinforces this obligation in unequivocal terms, stating that the department must not take advantage of ignorance of any assessee as to his rights and it is one of the duties of the department to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs, by taking initiative in guiding the taxpayer where the proceedings are before them indicate that some relief is due to the taxpayer. When we read Explanation 5 to Section 32(1) of the Act and the above circular issued by the CBDT in the context of Article 365 of the Constitution of India, we find it difficult to uphold the action of the authorities below in depriving the assessee of the claim for deduction of depreciation on goodwill. Thus we are of the considered opinion that disallowance of the claim for deduction of depreciation on goodwill by the authorities below cannot be sustained and the same is liable to be deleted. Appeal of assessee allowed.
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2024 (1) TMI 21
Income taxable in India - royalty receipts - whether the right to broadcast Live events is not copyright and payment made thereto is Royalty u/s 9(1)(vi) or not? - HELD THAT:- We hold that broadcasting Live events does not amount to a work in which copyright subsists, meaning thereby right to broadcast live events i.e., Live Rights , is not copyright and therefore any payment made thereto can t be said to be chargeable to tax as royalty under section 9(1)(vi). See Delhi Race Club [ 2014 (12) TMI 265 - DELHI HIGH COURT] , Fox Network Group Singapore Pvt. Ltd. [ 2020 (3) TMI 1428 - ITAT DELHI] , Cricket Australia [ 2023 (8) TMI 1253 - ITAT DELHI] Further the courts have held that when the agreements clearly bifurcate the consideration paid towards Live and Non-Live Rights , the Department can t deem the payment made for Live Rights to have been made for a bouquet of rights. Whether payments were made for the use of process or not? - We find that the payments in dispute are made to overseas rights holder. The said payments are neither made to any satellite operators nor for use of any satellite. Thus, the payments in dispute are not made for use of any process as defined u/s 9(1)(vi) of the Act and can t be charged to tax as Royalty in the hands of the overseas rights holders. Accordingly, we hold that the AO while passing the order u/s 201 of the Act has erred in law by treating the remittances to have been made for use of a Process . Appeal of the assessee is allowed.
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2024 (1) TMI 20
Income taxable in India - Royalty u/s. 9 and/or under Article- 12 of India - payments made in terms of Sponsorship Agreement - sponsorship of the ICC Cricket Events - Singapore, DTAA - HELD THAT:- The Co-ordinate Bench in the case of Global Cricket Corporation PTE Ltd [ 2023 (1) TMI 161 - ITAT MUMBAI] while considering the issue of taxability of the amounts received from the sponsors for use of Event marks, signages, etc. held that such payments cannot be considered as royalty in the hands of recipient u/s. 9(1)(vi) of the Act. We find that while adjudicating taxability of amount received as Sponsorship Fee in hands of the recipient, the Tribunal referred to the decision in the case of Hero MotorCorp Ltd [ 2013 (8) TMI 57 - ITAT DELHI] . Thus the payments made by the assessee to GCC are not in the nature of Royalty as defined under the provisions of the Act or Article-12(3) of India- Singapore DTAA. Consequently, the assessee succeeds on ground No.1 to 6 of the appeal.
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2024 (1) TMI 19
TDS u/s 195 - Disallowance u/s 40(a)(ia) - non deduction of tds on payments to various overseas entities for translating its products into foreign language (other than English) for sale in foreign countries - AO held that the assessee had also not furnished Forms 15CA and 15CB for necessary verification - CIT(A) allowed the appeal of the assessee while observing that the assessee had made payments to various parties located outside India, who did not have permanent establishment in India. thus the assessee was not required to deduct TDS HELD THAT:- We observe that Ld. CIT(A) has not given any justification while allowing the appeal of the assessee on this issue. CIT(A) has made no observation whatsoever regarding the applicability of Tax Treaty provisions to the aforesaid payment, neither as he made any observations as to why such payments do not qualify as fee for technical services under the Income Tax Act, nor as he made any observations as to why Section 195 of the Act is not applicable to the aforesaid payments and further, CIT(A) has also not given any comments on whether Form No. 15CA 15CB were furnished before him for necessary verification. Accordingly, we observe that from the contents of the order passed by Ld. CIT(A), it is not clear as to on what basis relief was afforded to the assessee on this issue. Further, in this case it is observed that the assessee had made payments to both companies as well as individuals residing outside of India in respect of the aforesaid services availed by him. CIT(A) has not made any observations with respect to the aforesaid payments and the relevant Tax Treaty provisions as may be applicable to the various countries of which the recipients were residents viz. Netherlands, France, Dubai, South Korea, Vietnam, Indonesia, Beijing PR, China etc. Accordingly, in the interest of justice the matter is restored to the file of Ld. CIT(A) to pass a detailed / speaking order giving reasons for allowing relief to the assessee on this issue.Ground No. 1 of the Department s appeal is allowed for statistical purposes. Disallowance of Compensation claim on Termination of Marketing Rights - assessee submitted that the aforesaid amount was paid by the assessee for termination of Marketing Rights of various dealers / distributors of the company - CIT(A) allowed the appeal of the assessee - HELD THAT:- CIT(A) passed a non-speaking order while allowing the appeal of the assessee on this issue. CIT(A) in the appellate order has not controverted any of the findings made by the AO at the time of making the aforesaid disallowance, we observe that neither has been the initial agreement towards granting of marketing rights to various parties was furnished before Ld. CIT(A) and neither was be subsequent termination agreement furnished before Ld. CIT(A). We observe that the assessee has sought to produce a termination agreement before us for our perusal, but apparently the other party too of the parties to the agreement has not signed the same. CIT(A) has not given any justification in allowing the appeal of the assessee on this issue. It was submitted before us that it was due to the marketing offers of the concerned persons to whom the compensation towards marketing rights was paid that there was a substantial increase in the sales / turnover of the assessee companies. CIT(A) in our view has passed a non-speaking order while allowing the appeal of the assessee on this issue. Income received but not accrued - CIT(A), allowing the appeal of the assessee on this issue - HELD THAT:- CIT(A) has simply accepted the version of the assessee and allowed the appeal of the assessee primarily on the ground that the aforesaid income was offered to tax by the assessee in the subsequent assessment year. However, while allowing the appeal of the assessee, CIT(A) has given no concrete finding or any basis for holding that as to why the aforesaid income, which was received by the assessee during the year under consideration, did not accrue to the assessee and on the basis on which accounting practice, the recognition of Revenue was deferred to the succeeding assessment year. Accordingly, in the interest of justice, the matter is being restored to the file of Ld. CIT(A) to give a detailed and reasoned findings as to why the aforesaid income did not accrue to the assessee during the year under consideration. Interest disallowed u/s 36(1)(iii) - AO observed that the assessee had given interest free advances to various parties - CIT(A) gave relief to the assessee and the ground that the assessee was having substantial interest free funds available with it - HELD THAT:- Once it is found that the assessee is having substantial interest free funds available with it in the form of capital, reserves and surplus and non- interest bearing sundry creditors, then it has to be presumed that the interest free advances had been given by the assessee from its own interest free funds available with it. Secondly, Ld. CIT(A) also observed that majority of the advances had been given by the assessee in previous years only. Also observed by Ld. CIT(A) while granting relief to the assessee that in respect of most of the advances, it is seen that the provisions of Section 36(1)(iii) of the Act was not attracted since the advances were given for business purposes of the assessee in the course of business. Accordingly, in our considered view, looking into the facts of the instant case and observations made by Ld. CIT(A) while allowing the appeal of the assessee on this issue, we are of the considered view that Ld. CIT(A) has not erred in facts and law while allowing the appeal of the assessee.
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2024 (1) TMI 18
Assessment u/s 153A - undisclosed income as per the seized hand written books - unaccounted income generated by various entities was used by the assessee as on money component in purchase of properties like land, building and Gold - AO issued a show cause notice to the assessee as to why the difference between the unaccounted income worked on the basis of incriminating material seized admitted in the return of income filed u/s. 153A should not be added to the total income - HELD THAT:- AO has merely relied on the seized material but has not corroborated with the additional evidence while calculating the revenue per acre estimated for the business of Aqua Culture by the assessee and its group companies. It is also noticed that Sri VV Balakrishna Rao in his sworn statement has stated that it is a rough version of daily cash receipts and payments which also contains some duplicate entries. It is also an admitted fact that maintaining books of accounts in this line of business (Aqua Culture) which is a non-organized sector, which is further evident from the fact that the CBDT has issued Instruction No. 8/2014, dated 17/10/2014 that the income with respect to Fish Culture in Andhra Pradesh may be decided by committee comprising of Two Commissioners, Two Representatives of Farmer s Association to determine the income that may be estimated for that Financial Year. Therefore, we also find that the AO has estimated the income based on the net receipts calculated as per the seized material and by apportioning it on the basis of the accounted turnover of three entities dealing with Aqua Culture business of Usha Bala Group viz., Usha Bala Agro Farms (P) Ltd, UBK Hotels Resorts (P) Ltd and VBK Exim (P) Ltd. AO has rejected the reply to the show cause notice without assigning proper reasons by merely relying on the estimation without any justification. AO has not given any break-up of the income by deducting the bund area and also the income from Fish Culture with respect to the leased lands. We therefore find that the Ld.CIT (A) while discussing the issue at length in his order has considered the CBDT Instruction No. 8/2014 and also the decision of Krishna Fisheries Vijayawada ( 2017 (8) TMI 655 - ITAT VISAKHAPATNAM ) and has concluded that the additional income of Rs. 74,458/- per Acre disclosed by the assessee is reasonable and in accordance guidelines issued by the CBDT and is also above the amount of Rs. 25,000/- to Rs. 35,000/- per Acre fixed by the decision in the case of Krishna Fisheries Viajaywada (supra). We also find from the submissions made by the Ld. AR that if the addition is made as per the Ld. AO, the income per acre on an average works out to Rs. 1,20,000/- which is practically impossible in the opinion of the assessee in this trade. From the facts discussed as above, we are of the considered view that since the assessee has offered an amount of Rs. 74,458/-per Acre (net of Bund area), and which is more than the rate per Acre fixed by the jurisdictional Bench, the Ld. CIT(A) has rightly held and deleted the addition made without any justification / corroborative evidences, by the Ld. AO, and therefore we find no infirmity in the order of the Ld. CIT(A) and thereby dismiss the grounds raised by the Revenue.
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2024 (1) TMI 17
Validity of Assessment u/s 153A on non-generation of DIN on approval u/s. 153D - whether non-generation of DIN on approval u/s. 153D of the Act results into invalid assessment? - HELD THAT:- As in spite of direction from the Addl. CIT vide para 5 of said Circular No. 19/2019 to take approval on ITBA portal, no DIN was generated in the ITBA platform. Further, no exceptional circumstances claimed nor brought to our notice in not generating the DIN in pursuance of para 3 of the said circular. DR vehemently contended that there was no requirement of law and guidance of the CBDT for generation of DIN for the approval by the Addl. CIT. We find no force in the arguments of the ld. DR as it is contrary to the guidelines contained in CBDT circular which is binding on all Income Tax Authorities. Para 4 of said circular provides that any communication which is not in conformity with para 2 and 3 shall be treated as invalid and shall be deemed to have never been issued, which clearly explains any communication without DIN is invalid in the eye of law. Thus, we find approval u/s. 153D of the Act is covered by para 2 of Circular No. 19/2019. Therefore, in the present case non-mentioning of DIN on approval granted u/s. 153D of the Act by the Addl. CIT renders the assessment order dated 30-09-2021 passed u/s. 153A r.w.s. 144 of the Act invalid treating the same deemed to have never been issued. Thus we note that approval u/s. 153D of the Act is akin to the approval u/s. 151 of the Act, wherein, we find sanction/approval u/s. 151 required from prescribed authority to initiate issuance of notice u/s. 148 of the Act, likewise, in order to proceed with the assessment u/s. 153A, AO required to take approval u/s. 153D of the Act, which in our opinion, is a statutory requirement, falling under the ambit of Circular No. 19/2019 to generate DIN. Therefore, we hold non-mentioning of DIN on approval granted u/s. 153D of the Act vitiate the final assessment order passed u/s. 153A r.w.s. 144 of the Act. Non-application of mind by the approving authority - The approval u/s. 153D is a mandatory requirement and such approval is not meant to be given mechanically. Such approval granted mechanically without application of mind by the Addl. CIT resulting in vitiating the assessment orders. We find in the present case that the AO sought approval u/s. 153D of the Act on 30-09-2021, the Addl. CIT granted approval on the same day and the final assessment order u/s. 153A r.w.s. 144 of the Act was also passed on the same day i.e. 30-09-2021 which clearly indicates that the approving authority granted approval mechanically without examining the relevant material. Admittedly, according to the AO, there were around 8300 pages, 16 hard disk and 6 pend drives found and seized in the case of group which were required to be taken into consideration while granting approval u/s. 153D of the Act by the Addl. CIT. Therefore, the Addl. CIT granted approval u/s. 153D of the Act mechanically without examining the above said relevant material without application of mind which resulting in vitiating the present final assessment order dated 30-09-2021 u/s. 153A r.w.s. 144 of the Act. Thus Addl. CIT as a approving authority without application of mind and without verifying in detail granted approval u/s. 153D of the Act in a most mechanical manner, of which, in our opinion, the assessee suffered serious prejudice of non- application of mind. Therefore, the final assessment order dated 30-09- 2021 passed u/s. 153A r.w.s. 144 of the Act is vitiated for want of non- application of mind. Difference between draft assessment orders and final assessment orders - AO made alterations to the draft assessment order and incorporated charging rate u/sec 115BBE - AR argued that the AO cannot pass final assessment order altering the draft assessment order - We note that the AO failed to apply the tax rate in the draft assessment order and which was approved by the Addl. CIT, thereafter, the AO added the tax rate u/s. 115BBE of the Act in the final assessment order, which clearly shows the AO deviated from the draft assessment order and by altering the same passed final assessment order, in our opinion, the AO cannot pass final order without fresh approval from the approving authority i.e. Addl. CIT. AO departed from the draft assessment order as approved by the Addl. CIT in the capacity of approving authority and pass final assessment order by altering the draft assessment order. Therefore, the ratio laid down by the Hon ble High Court of Bombay in the case of Mrs. Ratnabai N.K. Dubhash [ 1997 (9) TMI 88 - BOMBAY HIGH COURT] is applicable to the facts on hand and thereby, the final assessment order dated 30-09-2021 passed u/s. 153A r.w.s 144 of the Act is liable to be quashed. Assessee appeal allowed.
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2023 (12) TMI 1285
Assessment u/s 153A - Addition u/s 69 for unexplained investments in land - addition made being in respect of entry appearing in the assessee s accounts - HELD THAT:- The assessee stating that no incriminating material was found during search is without basis on facts. Notice u/s. 153A r/w s. 153C in case of a person other than the persons searched, as the assessee in the instant case, can only be on the basis of a satisfaction recorded as to the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of another person. That is, the jurisdiction to frame an assessment u/s. 153A r/ws. 153C, can, as the law always stood and explained, is only on the basis of such material, i.e., incriminating in nature. This jurisdiction has not been assailed at any stage, including before us, i.e., the second round before the Tribunal. The challenge to the satisfaction note, on the basis of which the assumption of jurisdiction could be questioned, is conspicuous by its absence, even as Sri. Mathew, the ld. counsel for the assessee, was specifically queried in its respect during hearing. It is the assessments in case of the person searched, that the Hon ble Apex Court has in Abhishar Buildwell ( 2023 (4) TMI 1056 - SUPREME COURT ) reading down the provision held as obtaining only on the strength of incriminating material, which was always the case for an assessment u/s. 153A r/w s. 153C, i.e., in case of a person other than the person searched. In other words, the said decision impacts only an assessment u/s. 153A, i.e., in the case of the person searched, and reliance thereon is misplaced qua a s. 153C, which obtains in the instant case. The assessee is merely trying to take advantage of the said decision, clearly inapplicable in the facts of it s case. No books of account were found maintained during search or even produced during assessment proceedings. In fact, in the absence of the returns filed, as indeed accounts, the entire material found during the search is liable to be regarded as incriminating. In concluding whether the income would or would not have disclosed, reliance, it explained, is to be placed on the surrounding facts and circumstances of the case. The only manner for disclosing income, it went on to explain, on the part of the assessee, is filing a return as stipulated in the Act. The non-filing of the return by the assessee was thus regarded by it as a fair inference as to the satisfaction of the condition that the income would not have been disclosed. Applicability of section 68 or 69 is, again, contrived and, in any case, of no consequence, even as clarified by the courts, as in Namdev Arora[ 2016 (8) TMI 219 - PUNJAB AND HARYANA HIGH COURT] as and when this issue came up before them. No books of account were found during the search, nor indeed presented during the original assessment proceedings. That produced in the set aside proceedings in 2013 incorporating the investment in properties, documents in respect of which were found during the search, is, thus, only aruse so as to bring the additions in their respect in assessment under, as against section 69, under section 68, so as to be able to contend, on that basis, that the investment is recorded in the books. In the absence of any explanation as to the source thereof, the basis of the addition continues to be the unexplained nature and the source of the investment. Interest u/s. 234A(1) r.w.s 234A(4) up to the date of assessment in the set aside proceedings, i.e., 31.07.2014, is equally without merit. In absence of furnishing any return of income up to the date of assessment on 28.12.2010, the same is the date of regular assessment, up to which therefore the interest u/s. 234A(1), which is for the delayed filing of return of income, is to extend. This interest is to be on the tax as finally assessed, i.e., as per the assessment dated 31.7.2014 (as may be further modified in appeal, which would therefore only be subsequent to), but that would not operate to extend the date up to which the interest is to be charged. The Revenue s reliance on Mahesh Investment [ 2020 (10) TMI 428 - KARNATAKA HIGH COURT] is misplaced. Assessee s appeals are partly allowed.
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PMLA
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2024 (1) TMI 16
Maintainability of SLP - HELD THAT:- Having heard learned counsel for the petitioner at a considerable length and after carefully perusing the material placed on record, the impugned order passed by the High Court not interfered - the Special Leave Petition is dismissed. The petitioner is directed to surrender before the concerned Trial Court within three weeks from today.
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2024 (1) TMI 15
Money Laundering - seeking permission to travel abroad - HELD THAT:- Taking into consideration that the main accused in the Prevention of Money Laundering Act Case has already been released on bail and also been granted permission to travel abroad, issue notice, returnable in four weeks. Dasti service, in addition, is granted.
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2024 (1) TMI 14
Grant of bail - Money Laundering - Section 50 of the Prevention of Money-laundering Act, 2002 - High Court granted the bail subject to conditions - HELD THAT:- In view of these prima facie factual findings and stringent conditions imposed while granting bail, thus, no case for interference with the impugned order is made out. As regards condition (d), apart from the fact that the respondent has not challenged the same, the legality of such condition is being examined in another case. In the event, the respondent commits any breach of the terms and conditions on which bail has been granted to him or if he misuses the liberty granted under the impugned order, it is always open for the petitioner to apply to the concerned Court for cancellation of bail. The Special Leave Petition is dismissed.
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2024 (1) TMI 13
Money Laundering - seeking release on bail - charges not framed yet - HELD THAT:- The appellant Benoy Babu has already suffered incarceration for about thirteen months, and the trial has not commenced, in the sense, that charges have not yet been framed. Having regard to the facts and circumstances, including the period of incarceration already suffered by the appellant Benoy Babu, it is accepted that the present appeals and direct that the appellant Benoy Babu will be released on bail in Complaint Case No. 31 of 2022, pending before the learned ASJ/Special Judge (PC Act) (CBI-09), Rouse Avenue District Courts, New Delhi. The impugned judgment/order is set aside and the appeals are allowed.
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2024 (1) TMI 12
Permission for withdrawal of Special Leave Petition - Grant of anticipatory bail - Seeking quashing of ECIR against the petitioner - Money Laundering - schedule offences/predicate offence - person who is not named in the ECIR has locus to seek relief such as quashing of ECIR or not - HELD THAT:- Permission as sought for is granted - The Special Leave Petition is dismissed as withdrawn.
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2024 (1) TMI 11
Maintainability of petition - petitioner at the time of hearing of this matter on instruction submits that his client would not like to press the present petition - Legality of Bail granted - Money Laundering - offence of siphoning of money to Foreign Country - failure to co-operate with investigation and withholding the trail of proceeds of crime - adjudication not completed even after expiry of five years - HELD THAT:- The present petition is dismissed as not pressed.
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2024 (1) TMI 10
Seeking grant of regular bail - scheduled offences or not - illegal tapping of phone calls of NSE employees was conducted under the guise of an agreement between NSE and M/s ISEC Services Private Limited - HELD THAT:- There are no reason to interfere with the impugned order in exercise of our jurisdiction under Article 136 of the Constitution of India. It is obvious that the observations made in the impugned judgment are only prima facie observations for the limited purposes of considering the prayer for grant of bail. It is made clear that the observations will not prejudice the trial. The Special Leave Petitions are dismissed.
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2024 (1) TMI 9
Seeking grant of anticipatory bail - principles of parity - illegal earning of black money and purchased movable and immovable property in the name of his family members - HELD THAT:- A woman can take benefit of the first proviso, where she can be released when the money laundering is of lesser amount. Since the applicant is main accused, the principle of parity is not applicable. On careful considerations to the precedents cited by learned Senior counsel for the applicant, but in the considered view of this Court, the same are inapposite to the factual scenario of this case. On perusal of the law laid down in the case of MAHDOOM BAVA VERSUS CENTRAL BUREAU OF INVESTIGATION [ 2023 (3) TMI 881 - SUPREME COURT] is concerned, the custodial interrogation was not required by CBI in that cases, hence due to different facts of the case, applicant of this case cannot be benefitted by the aforesaid case. So far as the judgements passed in the cases of PAWAN KUMAR AGRAWAL ANR. VERSUS ENFORCEMENT DIRECTORATE THROUGH I.O. [ 2023 (2) TMI 1218 - SC ORDER] and RAGHVENDRA SINGH TOMAR APPELLANT VERSUS DIRECTORATE OF ENFORCEMENT [ 2023 (5) TMI 1282 - SC ORDER] , the facts of those cases are not applicable here, because in the case at hand, it is remonstrated by learned Dy. Solicitor General that the investigation pertains to applicant is still going on as he is still dealing with proceeds of crime. hence, in light of Section 45 of PMLA, applicant cannot be benefited for grant of anticipatory bail. Since the matter is related to the economic offences containing property worth Rs. 1,55,87,861/-, the applicant cannot be released under the provisions of anticipatory bail and therefore, anticipatory bail application filed under Section 438 of the Cr.P.C is hereby dismissed .
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Service Tax
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2024 (1) TMI 8
Exemption from service tax - Providing computer training services on behalf of Municipal corporation - sub-clause (a) of Section 66D of Finance Act, 1994 - payment made by the Corporation to the petitioners would amount to services - HELD THAT:- Sub-Section (a) of Section 66D of Finance Act, 1994 has been reproduced hereinabove which indicates that the services by Government or local authority excluding the services under sub-clause (i) to sub-clause (iv) thereof would be in the negative list and in terms thereof no service tax would be payable on such services - In the present case, the Corporation has entered into an agreement with the petitioners to render computer training to persons identified by the Corporation as regards which those persons did not make payment of money, but the payment was made by the Corporation to the petitioners. The present transaction would not come within the purview of sub-section (a) of Section 66D of Finance Act, 1994. The matter would have been different if the concerned candidate paid the money to the Corporation, then the Corporation would not be required to make payment of any service tax on that amount. However, so long as the payment is made by the concerned candidate to the petitioners or by the Corporation to the petitioners, the service provider being the petitioners, there is an obligation on part of the petitioners to collect the service tax from the payee and be remitted to the concerned department - the stand taken by the Corporation that it is exempted from making payment under Section 66D of Finance Act is of no avail. The Corporation availing the services of the petitioners to render computer education to persons belonging to economically weaker section as regards which the Corporation has made the payment of monies to the petitioners would be amenable to service tax, that is to say, it is not exempted from service tax - Petition allowed.
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2024 (1) TMI 7
Seeking vacation of the interim stay - proceedings proposed to be initiated in terms of Rule 5A(2) of the Service Tax Rules, 1994 - HELD THAT:- The present batch of matters placed before the Hon ble Chief Justice, for constituting an appropriate Bench in order to consider the following questions which appear to arise: A. Whether Aargus which upholds the validity of Rule 5 A(2) was correctly decided? B. Whether the views expressed in Travelite and Megacabs require reconsideration in light of the above? Interim orders granted earlier to continue till the next date of hearing.
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2024 (1) TMI 6
Levy of service tax - Services retendered on behalf of state government - Banking and Financial Services - receiving service charges @1% of the total salary disbursed in respect of two primary schools - Extended period of limitation - HELD THAT:- There is no specific exemption provided under 'Banking and Financial Services' for the services rendered by the banks to state governments. Hence, the contention of the Appellant is not acceptable and the service charges collected are liable to pay service tax under the category of 'Banking and financial Services' as defined under section 65(12) of the Finance Act, 1994. Extended period of limitation - suppression of facts - HELD THAT:- The entire demand has been confirmed in the impugned order based the information available in the balance sheet. The department has not brought in any evidence to substantiate the allegation of suppression. Accordingly, the demand confirmed in the impugned order by invoking the extended period is not sustainable. The Appellant is liable to pay service tax, if any, on the normal period of limitation, along with interest. Demand of service tax - receipts of the Appellant from Agricultural Insurance Company of India Ltd. for collection of crop insurance premium from cultivators and/or agriculturists under National Agricultural Insurance Scheme - HELD THAT:- It is observed that such services are exempted under Notification 3/2000-ST dated 06.07.2000 - the decision cited in the case of SHRI RAJKOT DISTRICT CO OPERATIVE BANK LTD VERSUS COMMISSIONER OF CENTRAL EXCISE ST, RAJKOT [ 2023 (6) TMI 1347 - CESTAT AHMEDABAD] , is squarely applicable in this case, where it was held that the appellant are entitled for the exemption notification 3/2000-ST and not liable to pay any service tax on the commission received in relation to general insurance under government s various schemes - the demand confirmed in the impugned order on this count is not sustainable. Demand of service tax - service charges deducted by the out station banks for the collection of out station cheques - HELD THAT:- The Appellant has not received any money on account of collection of out station cheques. The service charges were deducted by the out station banks on which no service tax payable by the Appellant. Accordingly, we hold that the demand made in the impugned order on this count is not sustainable. Demand confirmed on the amount of Rs.43,500/- deducted by State Bank Of India, Midnapore Branch from the accounts of appellant as banking cash transaction tax - HELD THAT:- It is observed that the amount wrongly deducted was credited to their account later. Hence, no service tax payable on this amount. Accordingly, the demand of service tax on this amount is not sustainable. Appeal disposed off.
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2024 (1) TMI 5
Levy of service tax - reverse charge mechanism - payment of net present value by the appellant in the Compensatory Fund would be a consideration against a declared service under section 66E (e) of Finance Act or not - HELD THAT:- This precise issue arose for consideration before a Division Bench of Kolkata Bench of the Tribunal in M/S MAHANADI COALFIELDS LIMITED (ORIENT AREA) VERSUS COMMISSIONER OF CGST CENTRAL EXCISE, ROURKELA. [ 2023 (7) TMI 1336 - CESTAT KOLKATA] and after placing the reliance upon the earlier decision of the Tribunal in MNH Shakti Ltd. [ 2021 (11) TMI 427 - CESTAT KOLKATA] , the Tribunal held that the clearance granted by Ministry of Environment, Forest and Climate Change for usage of the forest land falling under the said project for non forest purposes, cannot be considered as a Declared Service as defined under Section 66E(e) of the Finance Act, 1944 and the charges of NPV paid by the Appellant cannot be considered as Consideration for the said service. In view of the aforesaid decision of the Tribunal in Mahanadi Coalfields Ltd., the order passed by the Principal Commissioner cannot be sustained and is set aside - appeal allowed.
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Indian Laws
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2024 (1) TMI 4
Length / Duration of detention - preventive detention - judicial reviewability - White Collar Offender - local limits of the jurisdiction of a District Magistrate or a Commissioner of Police. Detention Order passed under section 3(2) of the Act - whether such subjective satisfaction of the Commissioner stands scrutiny on application of the requisite tests? - HELD THAT:- The existing legal framework for maintaining law and order is sufficient to address like offences under consideration, which the Commissioner anticipates could be repeated by the Detenu if not detained. We are also constrained to observe that preventive detention laws an exceptional measure reserved for tackling emergent situations ought not to have been invoked in this case as a tool for enforcement of law and order . This, for the reason that, the Commissioner despite being aware of the earlier judgment and order of the High Court dated 16th August, 2021 passed the Detention Order ostensibly to maintain public order without once more appreciating the difference between maintenance of law and order and maintenance of public order . The order of detention is, thus, indefensible. Whether there was proper application of mind to all relevant circumstances or whether consideration of extraneous factors has vitiated the Detention Order? - HELD THAT:- Whenever an accused is tried for an offence under a penal law which carries a maximum sentence, the Court is obliged while imposing sentence to apply its mind to the specific facts and circumstances of the case and to either impose maximum sentence or a lesser sentence. It has, therefore, a discretion regarding imposition of sentence - The very term maximum period in section 13 vests the Government with discretion, allowing it to be exercised while considering whether the detention is to be continued for the maximum period of 12 (twelve) months or any lesser period. In our opinion, the relevant provisions of the Act have to be so read as to inhere a safeguard against arbitrary exercise of discretionary power. The period of detention ought to necessarily vary depending upon the facts and circumstances of each case and cannot be uniform in all cases. The objective sought to be fulfilled in each case, whether is sub-served by continuing detention for the maximum period, ought to bear some reflection in the order of detention; or else, the Government could be accused of unreasonableness and unfairness. Detention being a restriction on the invaluable right to personal liberty of an individual and if the same were to be continued for the maximum period, it would be eminently just and desirable that such restriction on personal liberty, in the least, reflects an approach that meets the test of Article 14. The detention order not upheld - As a consequence, the impugned judgment and order of the High Court too cannot be upheld. The Detention Order and the impugned judgment and order stand quashed. The appeal stands allowed.
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2024 (1) TMI 3
Dishonour of Cheque - acquittal of accused - accused failed to make the payment despite the receipt of the notice - presumption of consideration under Section 139 of the Negotiable Instruments Act - burden lies upon the accused to rebut the presumption - HELD THAT:- The complainant filed an application to prove the Income Tax Returns submitted by him. The return for the year 2009-2010 was submitted on 16.03.2010 as per the endorsement made on the acknowledgement. He had filed the complaint on 11.03.2010, hence, the Income Tax Return came into existence after filing of the complaint during its pendency - The application has been filed under Section 311 of Cr.P.C. however, the application is in the nature of additional evidence to prove the additional record mainly the Income Tax Return and will properly fall within the definition of Section 391 of Cr.P.C. It was laid down by the Hon'ble Supreme Court in ASHOK TSHERING BHUTIA VERSUS STATE OF SIKKIM [ 2011 (2) TMI 1539 - SUPREME COURT ] that the power to receive additional evidence must be exercised sparingly in those cases where the Court is satisfied that additional evidence would serve the interest of justice. Since no plausible reason has been assigned for not producing the additional evidence before the learned Trial court; therefore, it is impermissible to lead the additional evidence in the appeal. Consequently, the present application fails and the same is dismissed. The complainant did not examine these persons. Thus, the learned Trial Court had rightly doubted the financial capacity of the complainant and had rightly held that the presumption contained in Section 139 of the Negotiable Instrument Act was rebutted. This was a reasonable view taken by the learned Trial Court - the submission that the learned Trial Court had wrongly held that the presumption under Section 139 of the NI Act was rebutted is not acceptable. The judgment passed by the learned Trial Court was a reasonable one and no interference is required with the same - the present appeal fails and the same is dismissed.
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2024 (1) TMI 2
Dishonour of Cheque - need of new evidence - evidence sought to be led in under Section 311 is noted by the Court for a just decision of a case or not - HELD THAT:- The exercise of the widest discretionary power under Section 311 Code of Criminal Procedure should ensure that the judgment should not be rendered on inchoate, inconclusive speculative presentation of facts, as thereby the ends of justice would be defeated - The exercise of power under Section 311 Code of Criminal Procedure should be resorted to only with the object of finding out the truth or obtaining proper proof for such facts, which will lead to a just and correct decision of the case. The power under Section 311 Code of Criminal Procedure must therefore, be invoked by the Court only in order to meet the ends of justice for strong and valid reasons and the same must be exercised with care, caution and circumspection. The Court should bear in mind that fair trial entails the interest of the accused, the victim and the society and, therefore, the grant of fair and proper opportunities to the persons concerned, must be ensured being a constitutional goal, as well as a human right. - In present case, Trial Court, after going through statement Ex. DW-3/A and after taking into consideration evidence before it, including Ex.DW-3/A, and considering the rival contentions of the parties, concluded that it appeared to be just and important to allow the application for adjudication of the complaint and, therefore, after recording that though application was filed at a belated stage, in the interest of justice, allowed the application with further order to compensate the complainant with costs of ₹ 1,000/-. The Trial Magistrate has not committed any irregularity, illegality or perversity in the impugned order, and, therefore, it is not a fit case to exercise jurisdiction under Section 482 Cr.P.C. - complainant-petitioner has failed to make out a case to rebut the satisfaction recorded by the Trial Magistrate with respect to necessity of allowing the application for just decision of the case. The present petition is dismissed and disposed of.
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2024 (1) TMI 1
Dishonour of Cheque - acquitted of the charges - vicarious liability of Managing Director for the offence committed by the company - HELD THAT:- In the case on hand, the 1st accused-company owed amount to the complainant/1st respondent. Admittedly the revision petitioner was the Managing Director of that company and he issued that cheque in his capacity as its Managing Director. When the company is found not guilty of the offence alleged, the Managing Director cannot be held vicariously liable for the offence committed by the company. No appeal or revision has seen preferred by the complainant/1st respondent against the acquittal of the 1st accused-company. So, that verdict has become final. So much so, the revision petitioner Managing Director cannot be held liable as the company was acquitted, finding that no offence was committed by the company. The revision petitioner in his personal capacity did not owe any amount to the complainant/ 1st respondent and Ext.P2 cheque was issued not towards discharge of any personal liability of the revision petitioner. The liability of persons referred to in Section 141 of the N.I Act is coextensive with that of the company, firm or association of individuals, in a prosecution under Section 138 of the N.I Act. When it is found that the company has not committed the offence, and it is acquitted, its directors are not liable to be convicted, for the offence for which the company has been acquitted. The finding of the appellate court that, the revision petitioner/2nd accused has committed an offence punishable under Section 138 of the N.I Act in spite of acquittal of the 1st accused-company, is liable to be set aside - the impugned judgment is set aside and the revision petitioner is found not guilty of the offence punishable under Section 138 of the N.I Act and he is acquitted. Revision petition allowed.
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9911796707
