TMI Tax Updates - e-Newsletter
January 25, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. THEIR LORDSHIPS ARE REQUESTED TO FINALIZE THE LAW, WORK COMPLETELY TO SETTLE LAW INSTEAD OF KEEPING IT OPEN AND SET EXAMPLE.

   By: DEVKUMAR KOTHARI and CA UMA KOTHARI

2. Navigating a GST/Customs Classification Dispute

   By: Pradeep Reddy

3. Investing for the Youth: Building Wealth for the Future

   By: Vaibhav Garg

4. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

5. Pre-Shipment Inspection Agencies (PSIAs)

   By: YAGAY andSUN

6. Understanding Cumulation in Rules of Origin for India.

   By: YAGAY andSUN

7. COLLECTION OF INCOME TAX AT LOWER RATE OR ‘NIL’ RATE

   By: DR.MARIAPPAN GOVINDARAJAN

8. Pre-June, 2019 Duty Quantification Validates SVLDR Application

   By: Bimal jain

9. CBIC Rolls Out Automated Out of Charge (OOC) for AEO -Tier 2 and AE0 -Tier 3

   By: YAGAY andSUN

10. Types of Containers in International Trade

   By: YAGAY andSUN

News

1. Advisory on Business Continuity for e-Invoice and e-Waybill Systems

2. CBIC cautions against fraudsters issuing fake and fraudulent Summons for GST violations

3. Implementation of mandatory mentioning of HSN codes in GSTR-1 & GSTR 1A

4. FM takes part in customary halwa ceremony; marks final stage of Budget preparation

5. Odisha budget to focus on industry, tourism, jobs: CM Majhi

6. Congress announces separate ministry, budget for Poorvanchalis in Delhi if voted to power

7. Government e Marketplace sets new benchmark; crosses ₹ 4 Lakh Crore GMV within 10 months of FY 24-25

8. DPIIT signs MoU with a private firm to promote startup ecosystem in manufacturing sector

9. SC refuses to examine PIL for scrapping TDS system under income tax law

10. Maha Govt Signs MoU with Rural Enhancers for Rs 10,000 Crore Investment In World Economic Forum Summit in Davos, Switzerland

11. Workshop on ‘Capacity Building Workshop on Monitoring Frameworks of Sustainable Development Goals, Compilation of Environment Accounts, and Gender Statistics’ during 23-24th January, 2025, Bhopal

12. eSankhyiki Surpasses 100 Million Records Milestone

13. World Economic Forum: Trump tells businesses to manufacture in US or face tariffs

Notifications

Central Excise

1. 01/2025 - dated 23-1-2025 - CE (NT)

Re-assignment of central excise and service tax appeals filled on or after 01.07.2017

DGFT

2. 54/2024-25 - dated 24-1-2025 - FTP

Amendment in import Policy Condition of Glufosinate Technical covered under HS Code 38089390 of Chapter 38 of Schedule –I (Import Policy) of ITC (HS) 2022

GST

3. 08/2025 - dated 23-1-2025 - CGST

Central Tax Notification for waiver of the late fee

4. 07/2025 - dated 23-1-2025 - CGST

Central Goods and Services Tax (Amendment) Rules, 2025

Highlights / Catch Notes

GST

• High Court Overturns GST Penalty u/s 129(1), Rules Incomplete E-way Bill Details Not Proof of Tax Evasion.

  Case-Laws - HC : HC set aside penalty orders under GST Act Section 129(1) and allowed refund application. The appellate authority's dismissal was deemed unjustified as there was no clear tax evasion intent. While the e-way bill showed dispatch from Durgapur without full supplier details, the court found this omission insufficient to establish evasion, noting the goods moved in the same vehicle (WB 41D 1508) as per both e-way bill and tax invoice. The court emphasized that acceptance of dispatch details in the e-way bill portal's Part-A submission indicated compliance, and mere incomplete supplier information didn't constitute tax evasion intent. The court directed authorities to process refund applications as per law.
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• Tax Authority Issues Show-Cause Notice for Rs. 16.56 Lakh Short Payment on Commission Income from Jembo Cable Services.

  Case-Laws - HC : HC upheld the validity of a show-cause notice (SCN) regarding short payment of tax on commission income of Rs. 16,56,267/-. The authority correctly determined that commission received from M/s. Jembo Cable could not qualify as an exempted service. Court emphasized that SCN represents a preliminary procedural step, ensuring principles of natural justice by allowing petitioner to present evidence and submissions during adjudication. The adjudicating authority must consider all submissions before passing final order. Court found SCN lawful as integral part of tax adjudication process, particularly concerning determination of claimed exemption applicability. Application disposed of accordingly.
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• High Court: Statement Recording Not Mandatory Before Show Cause Notice u/s 122(1A) of CGST Act 2017.

  Case-Laws - HC : HC found no statutory requirement mandating obtaining a statement as a prerequisite for issuing show cause notice u/s 122(1A) of CGST Act, 2017. Petitioner granted 4 weeks to file objections to the notice from receipt of order. Respondents directed to consider objections according to law, providing reasonable hearing opportunity before proceeding with assessment/adjudication. Court explicitly noted no views expressed on merits. Petition disposed of with directions for procedural compliance while preserving petitioner's right to present defense during adjudication process.
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• High Court Directs Re-examination of GST Input Tax Credit u/s 17(5) Following Supreme Court's Functionality Test Guidelines.

  Case-Laws - HC : HC held that challenge to vires of Section 17(5)(c) and 17(5)(d) of CGST Act/Punjab GST Act 2017 is no longer res integra following SC's ruling in Safari Retreats case. While SC upheld constitutional validity of these provisions, it directed High Courts to examine functionality test in individual cases. Present petition partially allowed through remand to respondent authorities for re-examination and issuance of speaking order after providing petitioner hearing opportunity. Matter to be evaluated based on functionality test as per SC guidelines.
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• High Court Remands ITC Denial Case for Fresh Review u/s 16(5) of GST Acts, Orders Hearing Within 3 Months.

  Case-Laws - HC : HC overturned denial of input tax credit (ITC) u/s 16(4) of CGST/SGST Acts. Court acknowledged petitioner's claim regarding eligibility under newly notified Section 16(5). Original order partially set aside specifically concerning ITC denial. Matter remanded to competent authority for fresh consideration in light of Section 16(5) provisions. Authority directed to provide hearing opportunity to petitioner and issue new order within three months of judgment copy receipt. Decision emphasizes procedural fairness and proper application of amended statutory provisions in ITC determinations.
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• GST Rule 96(10) Amendment Through Notification 54/2018 Applies Prospectively From October 2018, High Court Rules.

  Case-Laws - HC : HC determined that Notification No. 54/2018-Central Tax amending Rule 96(10) of CGST Rules operates prospectively from October 9, 2018, not retrospectively from October 23, 2017. The court quashed summons, notices, and recovery proceedings initiated based on retrospective application of the notification. Any quantification of alleged erroneous refunds for periods before October 9, 2018, was held invalid and without jurisdiction. The ruling aligned with previous rectification order in Cosmo Films Limited case which corrected the earlier misinterpretation regarding notification's effective date. The decision establishes clear temporal boundaries for enforcement of amended Rule 96(10).
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Income Tax

• CBDT Must Give Fair Hearing on 1585-Day Delay in Revised Return Filing Despite Section 119(2) Being Silent.

  Case-Laws - HC : HC set aside order denying condonation of 1585-day delay in filing revised return under s.139(5), holding principles of natural justice must be followed despite absence of explicit provision in s.119(2). Natural justice principles should be read into statutory gaps when not explicitly excluded. Matter remanded to CBDT for fresh consideration with directions to provide petitioner hearing opportunity and issue reasoned order within three months. While s.119(2) doesn't specify procedural requirements, decisions with serious civil consequences warrant fair hearing. CBDT must evaluate condonation application afresh following due process, keeping merits open for consideration.
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• Power Transfer Pricing u/s 80IA: High Court Validates CUP Method Using State Electricity Board Rates as ALP Benchmark.

  Case-Laws - HC : HC held that Comparable Uncontrolled Price (CUP) method was appropriate for determining Arm's Length Price (ALP) for power transfer between eligible and non-eligible units u/s 80IA. The court affirmed that Rs. 4.39 per kWh, being the rate at which assessee supplied excess power to UPPCL, constituted a valid internal uncontrolled transaction and was correctly accepted as ALP. Following precedent from Jindal Steel case, HC confirmed that State Electricity Board rates for industrial consumers represent market value u/s 80IA(8). The regulated nature of electricity market necessitates comparable transactions to be materially similar without price-affecting differences. Matter resolved in assessee's favor, validating their ALP computation methodology and transfer pricing adjustments.
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• High Court Validates CBDT Notification Limiting Section 80IB(10) Tax Benefits for Slum Redevelopment Projects Between 2004-2008.

  Case-Laws - HC : HC upheld the validity of CBDT's corrigendum notification dated 5 January 2011 restricting deductions u/s 80IB(10) for slum redevelopment projects approved between 1 April 2004 and 31 March 2008. The court determined the notification properly aligned with legislative intent, as the proviso for slum redevelopment schemes was introduced prospectively from 1 April 2005. The amendment's reference to past events did not make it retrospective in nature. The petitioner's challenge claiming the notification was ultra vires failed, as the court found no legislative intention for retrospective application of the benefits. The deduction claim was rejected for non-compliance with notification conditions.
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• High Court Validates IT Act Amendments on Housing Perks Valuation, Setting Population-Based Rates u/s 17(2)(ii.

  Case-Laws - HC : HC upheld amendments to Section 17(2)(ii) of IT Act regarding valuation of accommodation perquisites. Court affirmed legislature's authority to create legal fiction through explanations and establish limited retrospective application from April 1, 2006. Amendments prescribe specific valuation rates (15%, 10%, 7.5%) based on city population per 2001 census. Determination of perquisite value involves calculating difference between prescribed percentage of salary and actual rent paid. Court rejected challenges based on Article 14 violations, finding amendments constitutionally valid. Regarding banks' liability as "assesses in default," matter left open for future determination. Revenue authorities directed to consider interim orders prohibiting TDS during petition pendency and practical implications for retired bank employees.
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• High Court Validates ITAT Order: Share Trading Gains Exempt u/s 10(38) Despite Missing AIR Reports.

  Case-Laws - HC : HC upheld ITAT's decision rejecting AO's addition u/s 68 and allowing exemption u/s 10(38) for LTCG. The assessee demonstrated legitimate share transactions not appearing in AIR reports for penny stocks. ITAT found AO erred by not considering substantial documentation proving genuine investments, including BSE trading resumption notice for Wagend Infra Venture Limited. The transactions were validated as non-speculative long-term investments, supported by precedent of department accepting similar LTCG claims from assessee's father. CIT(A)'s detailed analysis of documentary evidence was affirmed by ITAT. HC found no substantial question of law warranting interference.
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• ITAT Upholds ESOP Expense Deductions After Finding AO's Verification Adequate u/s 263, Rejects PCIT's Revision Order.

  Case-Laws - AT : ITAT quashed revision order under s.263 regarding ESOP expenses claimed by assessee as deduction. Assessee provided comprehensive documentation including TP report under s.92D(1), employee details, valuation reports, and accounting treatment compliant with ICAI guidelines. ESOP costs were properly recorded as salary compensation, with parent company MakeMyTrip (Mauritius) shares listed on NASDAQ. AO conducted adequate verification before allowing deduction, examining grant price calculations and vesting schedules. ITAT found PCIT's revision grounds untenable as AO had performed necessary inquiries. The tribunal confirmed ESOP expenses as legitimate business deduction, noting their role in employee retention and motivation.
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• Tax Tribunal Upholds Penalties on Firm u/s 271(1)(c) for Unexplained Cash Credits and False Expense Claims.

  Case-Laws - AT : ITAT upheld penalties imposed under s.271(1)(c) against appellant firm for multiple violations. Unexplained cash credits in partners' capital accounts violated Explanation-1 requirements as firm failed to provide satisfactory explanations. Penalty sustained for understated business income where appellant's claim of inadvertent omission was rejected. Additional penalties confirmed for false claims regarding FBT expenses, donations, and prior period expenses where appellant admitted inadmissibility before CIT(A). Tribunal found appellant failed to substantiate expense genuineness and maintained CIT(A)'s finding that these constituted wrong claims warranting penalties. All grounds of appeal dismissed, confirming original penalty orders.
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• ITAT Orders Fresh Assessment of Property Ownership Share and Section 54 LTCG Deduction After Rejecting Khatha-Based Determination.

  Case-Laws - AT : ITAT remanded case back to AO regarding LTCG computation and Section 54 deduction eligibility. Tribunal rejected AO's determination of 50% ownership share based solely on Khatha records, emphasizing that property ownership cannot be established through Khatha alone. AO directed to conduct fresh inquiry regarding assessee's claimed 25% share by examining partition deed and investigating separate property sales by family members. On Section 54 deduction, ITAT clarified that if construction commenced within prescribed 3-year period, deduction would be allowable even if completion extended beyond, subject to proper documentation. AO instructed to verify construction timeline and supporting documents. Appeal allowed for statistical purposes with directions for fresh assessment on both issues.
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• Tax Reassessment u/s 147 Quashed: Identical Facts Cannot Justify Reopening Without New Evidence, Rules ITAT.

  Case-Laws - AT : Reopening of assessment under s.147 challenged on grounds of invalid notice under s.143(2) and "change of opinion." ITAT held notice under s.143(2) was valid as return was e-verified on 24.10.2019 and notice issued on 05.11.2019 complied with statutory requirements. However, reopening was quashed as it was based on identical facts available during original assessment under s.143(3), constituting mere change of opinion by successor AO without discovery of new material. Following Kelvinator precedent, reassessment proceedings initiated without fresh evidence were deemed impermissible. Appeal partly allowed in assessee's favor on the substantive ground of invalid reopening, though procedural challenge regarding notice was rejected.
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• Tax Deduction Denied: ITAT Rules Form 56F Invalid When Not Certified by Qualified Chartered Accountant u/s 10A.

  Case-Laws - AT : ITAT upheld AO's denial of deduction u/s 10A due to defective Form 56F filing. The form, signed by "Deloitte Haskins and Sells," failed to meet statutory requirements as it lacked proper certification by an "Accountant" as defined u/s 288(2). The tribunal emphasized that certification must be provided by a Chartered Accountant qualifying u/s 2(1)(b) of the Chartered Accountants Act, 1949. The assessee's inability to demonstrate that the signing entity met the definition of an "Accountant" u/s 10A(5) rendered the form defective. CIT(A)'s favorable ruling was reversed, and deduction claim was rejected.
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• Tax Rate of 60% u/s 115BBE Applies to Unexplained Cash Deposits for Entire Assessment Year 2017-18.

  Case-Laws - AT : ITAT upheld application of higher tax rate (60%) u/s 115BBE for unexplained cash deposits treated as deemed income u/s 68. The Tribunal confirmed that enhanced tax rates apply to entire previous year 2016-17 (AY 2017-18), rejecting appellant's contention against retrospective application. Distinguishing between charging provisions and machinery provisions, ITAT clarified that while charging provisions cannot apply retrospectively, tax rates specified in Schedule are applicable as determined annually by Parliament. Following precedent in Chandan Garments Pvt Ltd case, ITAT found AO's tax computation at higher rate legally valid and dismissed the appeal.
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• ITAT Deletes Additions u/s 69A and 68, Rules Unsecured Loans Valid With Proper Financial Documentation.

  Case-Laws - AT : ITAT ruled in favor of assessee regarding unexplained money additions under s.69A for unsecured loan receipts. The tribunal found sufficient evidence proving loan disclosure in creditor's financial statements and proper reconciliation between rough and final balance sheets. Regarding additions under s.68 for partners' cash capital introduction, ITAT held that in completed/unabated assessments, additions cannot be made without incriminating material found during s.132 search. The tribunal confirmed assessee established partners' identity, transaction genuineness, and creditworthiness. CIT(A)'s finding that AO's additions were based merely on suspicion was upheld, as Revenue presented no contrary evidence. Both additions were deleted.
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• Tax Tribunal Deletes TPO Adjustments, Orders ALP Recomputation for Drug Pricing, and Rules on R&D Claims u/s 35(2AB).

  Case-Laws - AT : ITAT ruled on multiple issues in a tax dispute. TPO adjustments regarding Northstar Health Care were deleted following prior precedent. For drug sales pricing adjustments, ALP recomputation was ordered. Provision for rebates written back was deleted based on statutory benefit principles. Addition for restructuring-related provisions was confirmed due to rate differential concerns. Job work charges addition was deleted as genuineness was established. For R&D deduction under s.35(2AB), claim denied due to missing Form 3CL but alternative relief under s.37/32 permitted subject to proper bifurcation. FCCB premium redemption expense disallowed under s.40(a)(i) for non-deduction of TDS, to be allowed in year when TDS is deducted.
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Customs

• High Court Strikes Down 15-Year-Old Customs Notice for Exceeding Time Limit u/s 28(9) of Customs Act.

  Case-Laws - HC : HC quashed a Show Cause Notice (SCN) issued in 2008 by Principal Commissioner of Customs, finding it barred by limitation u/s 28(9) of Customs Act, 1962. The court rejected respondent's justification that delay occurred due to SCN's placement in call book, noting that repeated placing and removing from call book over 15 years without adjudication was invalid. Following precedents from Swatch Group India and Vos Technologies cases, HC determined that absent any grounds showing impossibility to determine duty amount within prescribed period, the SCN had lapsed and could not be adjudicated. The unexplained gaps between periods and lack of reasoning for non-adjudication despite hearing notices further supported the petition's allowance.
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• Customs Tribunal Overturns Penalties in Gold Smuggling Case Due to Insufficient Evidence Beyond Witness Statements u/s 112.

  Case-Laws - AT : CESTAT set aside penalties imposed under s.112(a) and s.112(b) of Customs Act 1962 against appellant for alleged gold smuggling. Court found insufficient evidence beyond statements of P and Y to establish appellant's involvement in smuggling activities. While gold recovered from P and Y was confiscated under s.111 and penalties imposed on them, no independent corroborative evidence existed to prove appellant's role in the offense. Mere statements without supporting proof were deemed inadequate to sustain penalties for abetment of smuggling. Tribunal held penalty provisions require concrete evidence of acts rendering goods liable for confiscation, which was lacking against appellant.
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• Customs Tribunal Overturns Motorcycle Confiscation Order, Rules No Evidence of Smuggling u/s 111 Customs Act.

  Case-Laws - AT : CESTAT ruled in favor of the appellant, setting aside the confiscation order and penalty regarding an allegedly smuggled motorcycle. The Tribunal determined Hyderabad Customs had proper jurisdiction as the vehicle was registered with RTA Hyderabad. However, the confiscation u/s 111(d), (i), and (j) of Customs Act was unsustainable as the bike wasn't "prohibited goods" u/s 2(33), wasn't concealed, and no evidence showed unauthorized removal from customs area. The penalty u/s 112(b) was also invalidated as there was no proof the appellant knew the bike was liable for confiscation. The absence of action against the original seller (Sunil Lawrence) did not affect the validity of show cause notice or subsequent proceedings.
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IBC

• NCLAT Rules 180-Day Moratorium Under IBC Section 101(1) Is Mandatory, Cannot Be Extended By Any Authority.

  Case-Laws - AT : NCLAT determined that the moratorium period of 180 days u/s 101(1) of IBC is mandatory, not directory, and cannot be extended by either the Adjudicating Authority or the Appellate Tribunal. The Tribunal emphasized that the statutory language is unambiguous, setting a clear outer limit for moratorium either at 180 days from admission or when the Adjudicating Authority passes an order on the Repayment Plan, whichever occurs earlier. The Tribunal distinguished this from provisions like Section 54D and Section 54N, noting that Section 101(1)'s express limitation precludes judicial discretion to extend the moratorium period. The appeal challenging the non-extension of moratorium beyond 180 days during PIRP was dismissed, affirming the statutory cessation of moratorium.
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• NCLAT Dismisses IBC Section 9 Case Due to Pre-existing Complex Disputes Between Corporate Entities Over Supply and Rent.

  Case-Laws - AT : NCLAT allowed the appeal and set aside Section 9 proceedings under IBC against the Corporate Debtor. The tribunal found a pre-existing dispute between parties involving complex transactions and intermingled disputes between Promoters of both entities. Though transactions occurred in a running account for supply of goods, additional disputes regarding premises rental arrangements were evident. Following Mobilox Innovations precedent, NCLAT held that disputes were not patently feeble but required proper adjudication. While limitation period was not an issue due to recent part-payment extending it by 3 years, the tribunal concluded Section 9 petition was not maintainable due to genuine pre-existing disputes requiring examination beyond corporate veil.
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Indian Laws

• Supreme Court Refers Questions on Writ Jurisdiction Against MSEFC Orders Under MSMED Act to Five-Judge Constitutional Bench.

  Case-Laws - SC : SC addressed maintainability of writ petitions under Article 226 against MSEFC orders under MSMED Act 2006. The Court determined that while MSMED Act establishes mandatory statutory arbitration with specific provisions for interest rates and pre-deposits, writ jurisdiction under Article 226 remains a constitutional right and part of basic structure. The matter raised complex questions regarding absolute bar on writ jurisdiction, exceptions to alternative remedy doctrine, and propriety of MSEFC members serving as both conciliators and arbitrators. Due to significance, SC referred these questions to a five-judge bench, maintaining that writ jurisdiction is discretionary and not automatically barred by alternative remedies. Final determination pending larger bench consideration.
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• High Court Rules Section 313 Statement Not Mandatory in Cheque Bounce Cases When Accused Deliberately Avoids Trial.

  Case-Laws - HC : HC affirmed that in Section 138 NI Act cases, being quasi-criminal in nature ("civil sheep in criminal wolf's clothing"), courts can proceed with trial in accused's absence and dispense with Section 313 CrPC statement if the accused remains willfully absent without justification. The court upheld the Metropolitan Magistrate's conviction order, ruling that mandatory recording of Section 313 statements traditionally required in criminal trials is not strictly applicable to cheque dishonor cases. The absence of accused during evidence stage and non-recording of Section 313 statement does not vitiate trial proceedings when absence is unjustified. Both revision applications challenging the conviction were dismissed, confirming original sentence u/s 138.
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PMLA

• Supreme Court Upholds ED's Search and Seizure Powers Under FEMA and PMLA, Emphasizes Limited Judicial Intervention During Investigations.

  Case-Laws - HC : HC affirmed ED's authority to conduct search, seizure, and account freezing operations under FEMA 1999 and PMLA 2002. Court held that interference during investigation stage is warranted only in exceptional circumstances, as law enforcement requires both coercive and covert techniques. ED demonstrated reasonable belief of proceeds of crime, provided proper documentation during search, and followed procedural requirements. Statutory safeguards exist through Adjudicating Authority review within 30 days of attachment order, with stakeholder participation rights and appeal provisions to Appellate Tribunal. Court declined to intervene, directing petitioners to pursue remedies through established administrative mechanisms under the Acts.
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• PMLA Attachment Order Invalid: Tribunal Rules Actual Possession of Crime Proceeds Required, Not Just Theoretical Connection.

  Case-Laws - AT : AT determined that provisional property attachment under PMLA was invalid where appellants lacked possession of crime proceeds. While "proceeds of crime" broadly encompasses property derived directly/indirectly from criminal activity and equivalent-value property, authorities must establish actual possession or likelihood of concealment/transfer. The tribunal found no evidence that appellants held proceeds or intended to transfer them. Additionally, pre-existing Company Law Board restrictions already prevented property transfers without Conciliation Board consent. The appeal challenging the attachment failed as authorities could not demonstrate the basic statutory requirements u/s 5(1) PMLA regarding possession or control of proceeds of crime. Appeal dismissed with the finding that mere theoretical connection to proceeds is insufficient for provisional attachment.
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Case Laws:

• GST

• 2025 (1) TMI 1145
  Challenge to order of declination to grant any interim order but directing affidavits to be exchanged - whether the appellate authority viz., the Senior Joint Commissioner of Revenue, Bally Circle was justified in dismissing the assessees appeal by an order confirming the order of penalty imposed on the appellants under Section 129 (1) of the G.S.T. Act, 2017? - HELD THAT:- It is not clear as to how the adjudicating authority and the appellate authority had invoked Section 129 of the Act since, the facts of the present case shows there appears to have been no intention to evade the payment of tax. The only reason for imposing the penalty is that in the e-way bill generated by the appellants in favour of M/s. CRM Ispat Private Limited dated 8th July, 2023 for outward supply, the despatch was shown to be made from Durgapur, West Bengal, Pin 713212. The authorities are of the opinion that the full details of the company, which despatched the goods, which were sent to the appellants/customer was not disclosed. However, on a comparison of the e-way bill raised on 6th July, 2023 alongwith the tax invoice raised by the appellants show that the goods moved in the same vehicle bearing registration No. W.B. 41D 1508. In any event, the e-way bill is generated based on an application made in the portal and in Part A of the e-way bill, one of the details is to be furnished is place of despatch in which the appellants had mentioned as West Bengal, 713212 and this detail, which was disclosed while making the application was accepted and the e-way bill stood generated. Therefore, merely because the appellants did not disclose the name of the company and the full particulars of his supplier, cannot be stated to be a ground that the appellants had intention to evade the payment of tax. In the peculiar facts and circumstances of the case, the power under Section 129 (1) (a) of the Act could not have been invoked. Conclusion - The mere omission of certain details in an e-way bill, when justified by common trade practices, does not automatically imply an intention to evade tax. The penalty imposed under Section 129(1) was unjustified. The order passed by the appellate authority as well as the original authority are set aside and the appellants are entitled to apply for refund of the penalty, which was remitted by them without prejudice to their rights and contentions and if such application is filed, the same shall be dealt with in accordance with law - Appeal allowed.

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• 2025 (1) TMI 1144
  Challenge to SCN issued under Section 74 (1) of the CGST Act, 2017 and W.B.G.S.T. Act, 2017 read with Rule 142(1)(a) of the Rules for the financial year 2023-24 - HELD THAT:- It is not in dispute that the appellants have submitted a detailed explanation and also enclosed certain documents in support of their contention and relied upon various decisions. Thus, when the authority has thought fit to exercise its powers under Section 74 (5), he is enjoined upon a duty to consider the reply before it takes a decision to issue a show-cause notice under Section 74 (1) of the Act. However, in the instant case, it is found that the show-cause notice dated 8th August, 2024 is a replica of the intimation given earlier and all that the assessing officer has said is that the reply furnished by the appellants in response to the intimation is not found to be satisfactory and hence, not acceptable. The remaining portion of the show-cause notice has been copied from the earlier intimation and the show-cause notice does not deal with any of the contentions, which were raised by the appellants in their reply to the intimation dated 18th July, 2024. The authority should consider the reply dated 18th July, 2024 to the intimation issued earlier, deal with those issues and then proceed to issue a show-cause notice. Conclusion - The authority should consider the reply dated 18th July, 2024 to the intimation issued earlier, deal with those issues and then proceed to issue a show-cause notice. The writ petition was deemed maintainable. The matter is remanded back to the assessing authority to consider the reply dated 18th July, 2024 and if it still finds it to be not satisfactory, it will be well-open to the authority to proceed in accordance with law - Appeal allowed by way of remand.

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• 2025 (1) TMI 1143
  Correctness of issuance of SCN without taking into consideration the reply filed by the Petitioner to the pre-consultation notice issued to the Petitioner under Rule 142 (1A) of the Central Goods and Services Rules, 2017 - HELD THAT:- It is not required to stay the hearings that have been fixed on the show cause notice. It is directed that though the hearings can proceed, the concerned Authority shall not pass any adjudication order on the said show cause notice until further orders. Stand over to 11th February 2025.

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• 2025 (1) TMI 1142
  Levy of GST on a Deed of Assignment under which the land and the building constructed thereon is transferred by a Lessee to a 3rd party - HELD THAT:- Without going into the merits of the matter it would be in the fitness of things if the impugned order is set aside and the matter is remanded back to Respondent No.3 for a fresh adjudication on the show cause notice. This is because the impugned order also clearly records that no submissions have been made by the Petitioner against the show cause notice and which is factually incorrect. There was a reply to the show cause notice filed by the Petitioner dated 22nd July 2024 and which was received by the Assistant Commissioner of State Tax on the very same day. Despite this, the impugned order records that no submissions were made in reply to the show cause notice. The impugned order dated 19th August 2024 is hereby quashed and set aside. The 3rd Respondent is now directed to once again adjudicate the show cause notice. The Petitioner is at liberty to file their detailed reply to the show cause notice within a period of 2 weeks from today. Once the aforesaid reply is filed, Respondent No.3 shall give a personal hearing to the Petitioner and only thereafter pass any order on the show cause notice. Petition disposed off.

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• 2025 (1) TMI 1141
  Legality of SCN issued - petitioner contends that the show-cause notice, being devoid of due consideration, is liable to be set aside - HELD THAT:- The SCN issued on 19th November, 2024 is correctly issued by the respondent no. 1 in relation to the alleged short payment of tax on commission income where the authority has considered all the relevant answer while coming to a conclusion that a commission received by the petitioner from M/s. Jembo Cable of Rs. 16,56,267/- cannot be treated as exempted service and thus issued the show-cause notice. This Court emphasizes that the show-cause notice serves as a preliminary step in the adjudication process, allowing the petitioner to present further submissions and evidence before the adjudicating authority thereby adhering to the principles of natural justice. The petitioner is, therefore, requested to appear before the adjudicating authority who shall consider all the submissions of the petitioner before passing the adjudicating order. Conclusion - This Court concludes that the issuance of the show-cause notice was lawful, as the notice forms an integral part of the tax adjudication process. Moreover, the matter requires adjudication regarding whether the claimed exemption is applicable to the petitioner. Application disposed off.

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• 2025 (1) TMI 1140
  Challenge to impugned demand/SCN on the premise that jurisdictional fact necessary for invoking Section 122 (1A) of the Central Goods and Services Tax Act, 2017, does not exist - HELD THAT:- To a pointed question as to if there is any provision which mandates that obtaining a statement was a condition precedent for issuance of show cause notice, the learned counsel for the petitioner was unable to point out any provision. It is open to the petitioner to file their objections to the notice within a period of 4 weeks from the date of receipt of a copy of this order. If any such objections/ reply is filed by the petitioner needless to say the respondents shall consider the same in accordance with law after affording the petitioner a reasonable opportunity of hearing and proceed with assessment/ adjudication process keeping in view that this Court has not expressed any view of merits. The writ petition stands disposed of.

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• 2025 (1) TMI 1139
  Short payment of RCM - ITC availed in excess - ITC found reversible - HELD THAT:- Challenge of Rule 36(4) of CGST Rules 2017 has no direct bearing with Short Payment of RCM ITC availed in excess and ITC found reversible the facts of this case and as the adjudication order dated 28th August, 2024 has a remedy by way of an appeal under Section 107 of the GST Act to deal with all the questions of facts as narrated by the learned counsel appearing for petitioner, the writ petition are dismissed.

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• 2025 (1) TMI 1138
  Cancellation of petitioner s registration on the ground of non-filing of return - HELD THAT:- The petition is disposed of by setting aside the impugned orders by both the concerned authorities and by directing the respondent CGST/WBGST authority to restore the petitioner s registration and open the portal for a period of 45 days from date of communication of this order by the counsel of the respondent authority to enable the petitioner to make the payment of revenue due as well as any other due including penalty to be indicated by the respondent authority concerned within a period of 15 working days. If the petitioner fails to make the payment of revenue due after indication of the amount by the GST authority, the respondent authority concerned shall be free to block the portal again and cancel the registration. Petition disposed off.

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• 2025 (1) TMI 1137
  Challenge to impugned notice on the limited ground that the same came to be issued even before the time granted to the petitioner to respond to Form GSTR DRC-01A had expired - HELD THAT:- It is always open to the petitioner to make a request of the copy of the materials sought to be relied upon by the authority. If any request is made, the same would be considered in accordance with law. It is also open to the petitioner to raise all contentions in response to DRC-01A including jurisdictional issues. The Respondent authorities would consider such request/ reply if any filed and pass orders in accordance with law after affording the petitioner a reasonable opportunity of hearing. Petition disposed off.

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• 2025 (1) TMI 1136
  Challenge to impugned order passed by the respondent - violation of principles of natural justice - petitioner seeks an opportunity to explain the discrepancies noted during the inspection of the petitioner s business premises - the petitioner is ready and willing to pay 10% of the disputed tax and that he may be granted one final opportunity before the adjudicating authority to put forth their objections to the proposal, to which the learned Government Advocate appearing for the respondent does not have any serious objection. HELD THAT:- The impugned order dated 19.07.2024 is set aside. The petitioner shall deposit 10% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent, within a period of four weeks from the date of receipt of a copy of this order. Petition disposed off.

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• 2025 (1) TMI 1135
  Vires of Section 17(5)(c) and 17(5)(d) of the Central GST Act/Punjab GST Act, 2017 - HELD THAT:- The issue raised by the petitioner in the present petition assailing the vires of Section 17(5)(c) and 17(5)(d) of the Central GST Act/Punjab GST Act, 2017, is no more res integra in view of the judgment passed by the Supreme Court in Chief Commissioner of Central Goods and Service Tax vs. Safari Retreats (P.) Ltd., [ 2024 (10) TMI 286 - SUPREME COURT] , wherein the Supreme Court has concluded The challenge to the constitutional validity of clauses (c) and (d) of Section 17(5) and Section 16(4) of the CGST Act is not established. While the Apex Court has directed all the petitions to be heard by the concerned High Court and examine the functionality test, it is found that in the present case, the matter can be remanded back to the respondents to re-examine the aspect and pass a speaking order, after giving an opportunity of hearing to the petitioner. The writ petition is accordingly partly allowed by way of remand.

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• 2025 (1) TMI 1134
  Prospective omission of Rule 96(10), Rule 89(4A) and Rule 89(4B) from the CGST Rules, 2017 - omission of N/N. 20/2024- Central Tax dated 08th October, 2024, Central Board of Indirect Taxes Customs framed Central Goods Service Tax (Second Amendment) Rules, 2024 and as per Rule 10, Rule 96(10) - HELD THAT:- Both Minutes of the GST Council as well as Notification No.20/2024-Central Tax dated 08th October, 2024 are ordered to be taken on record of Special Civil Application No. 22519 of 2019 and in view of the subsequent development after 19th September, 2024, the order dated 19th September, 2024 is ordered to be recalled and the matter is ordered to be re-notified for further consideration on 19th December, 2024 before the regular Bench. Application disposed off.

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• 2025 (1) TMI 1133
  Violation of principles of natural justice - Service of SCN - impugned order is challenged on the premise that the notices and orders were uploaded under the view additional notices and orders tab on the GST Portal, thereby, the petitioner was unaware of the initiated proceedings and thus unable to participate in the adjudication proceedings - Challenge to impugned order passed by the respondent relating to the assessment year 2018-19 - excess claim of Input Tax Credit over and above that of the tax paid under Reverse Charge Mechanism - the petitioner is ready and willing to pay 25% of the disputed tax and that they may be granted one final opportunity before the adjudicating authority to put forth their objections. HELD THAT:- The impugned order is set aside and the petitioner shall deposit 25% of the disputed tax within a period of four (4) weeks from the date of receipt of a copy of this order. On complying with the above condition, the impugned order of assessment shall be treated as show cause notice and the petitioner shall submit its objections within a period of four (4) weeks from the date of receipt of a copy of this order along with supporting documents/material. If any such objections are filed, the same shall be considered by the respondents and orders shall be passed in accordance with law after affording a reasonable opportunity of hearing to the petitioner. Petition disposed off.

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• 2025 (1) TMI 1132
  Denial of benefit of input tax credit on account of the provisions contained in sub-section (4) of Section 16 of the CGST/SGST Acts - HELD THAT:- Having regard to the assertion of the learned counsel appearing for the petitioner that on account of notification of sub-section (5) of Section 16 of the CGST/SGST Acts, the petitioner will be entitled to input tax credit, which has been denied to the petitioner by Ext.P3 order, the writ petition will stand disposed of, setting aside Ext.P3 to the extent that it denied input tax credit to the petitioner on account of the provisions of sub-section (4) of Section 16 of the CGST/SGST Acts and directing the competent authority to pass fresh orders, after taking note of the provisions contained in Section 16(5) of the CGST/SGST Acts and after affording an opportunity of hearing to the petitioner, within a period of three months from the date of receipt of a certified copy of this judgment. Petition disposed off.

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• 2025 (1) TMI 1131
  Applicability of Rule 96(10) of the CGST Rules, as amended by Notification No. 54/2018-Central Tax dated 9.10.2018 - retrospective or prospective effect - validity of summons and recovery proceedings based on the retrospective application of Notification No. 54/2018 - HELD THAT:- This Court in case of Cosmo Films Limited [ 2024 (10) TMI 275 - GUJARAT HIGH COURT] has held that On perusal of above notification, it is clear that same has come into effect from 9th October, 2018 and as such there is a mistake apparent on record in CAV judgment dated 20th October, 2020 wherein it is incorrectly stated that said notification has come into effect from 23rd October, 2017. This Court while considering the mistakes pointed out in Misc. Civil Application No.1 of 2020 in Special Civil Application No. 15833 of 2018 has passed the rectification order holding that Notification No.54 of 2018 shall apply prospectively with effect from 9th October, 2018 only. The summons, issued, notices as well as recovery proceedings on the basis of retrospective operation of Notification No.54 of 2018 dated 09.10.2018 is held to be without jurisdiction. The summons issued, notices as well as recovery proceedings are quashed and set aside as Notification No.54/2018 would be applicable prospectively with effect from 09.10.2018 and therefore, the amount quantified for the period prior to 09.10.2018 towards alleged erroneous refund would not survive. Petition disposed off.

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• Income Tax

• 2025 (1) TMI 1130
  Delay of 1585 days in filing a revised return u/s 139(5) - Denial of principles of natural justice - HELD THAT:- The impugned order refusing to condone the delay visits the Petitioner with serious civil consequences. Such an order should generally be made after compliance with principles of natural justice and fair play. The fact that Section 119 (2) does not explicitly refer to any show cause notice or opportunity of hearing is not grounds for noncompliance with principles of natural justice. In the absence of any provision to the contrary, such principles should be read into the unoccupied interstices of a statute. The impugned order is accordingly set aside. The matter is remanded to the CBDT for fresh consideration of the Petitioner s application for condonation of delay. Further consideration should be following the law and after giving the Petitioner an opportunity of a hearing. The CBDT or the Member to whom such function is assigned must pass a reasoned order and communicate to the Petitioner. This exercise must be completed within three months of uploading this order. All contentions on merits are, however, left open.

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• 2025 (1) TMI 1129
  Refusal to condone a 15-day delay in filing Form-10B on the ground that no sufficient cause was shown - HELD THAT:- There is no serious denying that the reconstruction and redevelopment of the trust premises have been going on since 2018. Necessary approvals are on record. There is a reference to the intervening Covid pandemic. If, for all these reasons, there was some disruption in the normal functioning of the trust office, entailing a marginal delay of 15 days in filing Form-10B, a case of sufficient cause was made out. The reason is neither frivolous nor can it be said to be some excuse to derive some undue benefits. Even assuming that each day s delay must be explained, considering the delay is only 15 days and the cause shown is eminently acceptable, the impugned order warrants interference. Thus, condone the delay of 15 days in filing Form-10B of the IT Act.

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• 2025 (1) TMI 1128
  Quantum of deduction available u/s 80IA - determining the ALP and the market value for the purposes of Section 80IA - ALP adjustment of specified domestic transactions from Associated Enterprises - electric power transferred by the Assessee from its eligible unit to its non-eligible unit - adjustments made on account of transfer of power as per the provision of section 92F r.w.s 80IA HELD THAT:- In the present case, the Assessee had computed the ALP by adopting the CUP method as provided in Rule 10B (1) (a) of the Rules. TPO had also accepted it as the most appropriate method in the facts of the present case. Thus, there is no dispute that CUP method is required to be used for determining the ALP and the market value for the purposes of Section 80IA of the Act. As is apparent from Sub-clause (i) of Clause (a) of Rule 10B (1) of the Rules, it is necessary to determine the price charged or paid for the property or goods transferred or services provided in a comparable uncontrolled transaction. In the present case, the transaction relates to the sale of electricity by the Assessee s eligible unit to a non-eligible unit. Thus, a comparable uncontrolled transaction would necessarily involve determining a transaction of sale of power in a similar uncontrolled transaction. CUP method would be an appropriate method only if the transactions are identical inasmuch as there are no differences that would materially affect the price in an open market. And, if there is any difference which affects the price, the same can be reasonably ascertained and its effect can be eliminated by an appropriate adjustment. Determine the market value or the ALP of power supplied by power plants established by the Assessee to its other units - The market for supply of electricity is regulated. Thus, to apply the CUP method, it would be necessary to ascertain the comparable transactions that are similar in material aspects and there is no difference between the transactions which has a bearing on the price of the power supplied. Whether power traded on IEX cannot be compared with the power supplied by a SEB ? - In the present case, the Assessee had supplied excess power to UPPCL in UP region at the rate of Rs. 4.39 per kWh. Thus, the said transaction was accepted by the learned DRP as well as the learned ITAT as an internal uncontrolled transaction. The rate at which such electricity was supplied by the Assessee being Rs. 4.39 per kWh, was rightly accepted as an ALP. Supreme Court in Jindal Steel and Power Limited [ 2023 (12) TMI 417 - SUPREME COURT] had accepted the rates at which electricity was supplied by the SEBs to industrial consumers as being the market value of the said supplies for the purposes of Sub-section (8) of Section 80IA of the Act. Decided in favour of the Assessee.

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• 2025 (1) TMI 1127
  Deduction u/s 80IB (10) - only requirement was that the construction of the housing project must be completed on or before 31 March 2008 - CBDT, by the impugned notification, dated 5 January 2011, which is a purported corrigendum to the notification dated 3 August 2010, restricted the benefit of the proviso to Section 80IB (10) only to projects approved on or after 1 April 2004 and before 31 March 2008. Whether the impugned notification dated 5 January 2011, styled as a corrigendum to the notification dated 3 August 2010, is ultra vires Section 80IB(10)? - HELD THAT:- As on a comparison of the present and the earlier provisions in Section 80IB(10), it is apparent that there was no special benefit to housing projects carried out in accordance with the scheme framed by the Central or State Governments for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force where such schemes were to be notified by the CBDT in this behalf. The benefit to such notified schemes for reconstruction or redevelopment of existing buildings in areas declared to be slum areas was introduced only with effect from 1 April 2005 and not earlier. The proviso to clauses (a) and (b) of sub-section (10) of Section 80IB of the IT Act entered force on 1 April 2005. The principal notification, however, had notified the scheme with which the Petitioners are concerned only with effect from 3 August 2010. Therefore, to align the principal notification with the date of coming into force of the proviso, the impugned corrigendum dated 5 January 2011 came to be issued. The effect of the principal notification dated 3 August 2010, as corrected by the impugned notification dated 5 January 2011, is only to align the CBDT s notification with the proviso to Section 80IB (10), which was brought into force by legislature prospectively, i.e. with effect from 1 April 2005. The provisions of 80IB (10), as they obtained before 1 April 2005, had made no special provisions regarding any slum redevelopment schemes. There is nothing in the Finance Act, 2004 or the provisions introduced by the said act to suggest or imply legislative intention to grant any retrospective effect. Therefore, the argument that the impugned notification is ultra vires cannot be sustained. In this case, the legislature has expressly stated that the substituted Section 80-IB (10) would come into force from 01 April 2005. Because some of the clauses encompass or refer to past events, that is not sufficient to hold that the amendment is retrospective. Mere reference to projects approved before 1 March 2004 in sub-clause (a) of Section 80 IB (10) cannot lead to the inference that the amendment is retrospective. We are satisfied that no case is made to declare the impugned notification ultra-vires or strike it down. As impugned notification was valid and that the petitioner was not entitled to the claimed deductions u/s 80IB(10) due to non-compliance with the notification s conditions.

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• 2025 (1) TMI 1126
  Scope of amendments and the Explanations in Section 17 (2) (ii) of the IT Act - whether retrospective application of the amendments is permissible and constitutional? - definition of perquisite contained in Section 17 (2) of the IT Act - HELD THAT:- By introducing the impugned amendments, the legislature, apart from addressing the lacuna and shortcomings pointed out in the Court decisions, has provided consistency, clarity and uncertainty. These factors promote good tax governance. In fiscal matters or tax measure laws, it is well settled that the legislature enjoys far greater latitude than what may be permitted in non-fiscal legislation. For all the above reasons, we see no force in the contention that the impugned amendments constitute an instance of impermissible judicial override or that the legislature has overruled the judicial precedents in Arun Kumar [ 2006 (9) TMI 115 - SUPREME COURT] or Officers Association, Bhilai Steel Plant [ 1980 (10) TMI 6 - MADHYA PRADESH HIGH COURT] From 1 April 2006, the impugned amendment provides that a concession in the matter of rent shall be deemed provided at the specified rate by an employer to his employee by providing unfurnished employer-owned accommodation. The value of such concession in terms of Explanation 4 would be 15% of the salary in cities having a population exceeding twenty-five lakhs as per 2001 census; 10% of salary in cities having a population exceeding ten lakhs but not exceeding twenty-five lakhs as per 2001 census; and 7.5% of salary in any other place less the rent recoverable from or payable by the employee. Thus, if for the period between 2002 to 2006, an employer were to have provided to his employee unfurnished employer-owned accommodation in a city having a population exceeding four lakhs as per the 1991 census and such employee had a monthly salary of Rs.1 lakh and was paying a monthly rent of Rs. 5,000/- towards such accommodation, then, the value of the concession for the purposes of Section 17 (2) (ii) had to be determined as the difference between 10% of such employee s salary i.e. Rs. 10,000/- and the rental of Rs. 5,000/- which such employee was payable to the employer. This means that the value of the concession would be computed at Rs.5,000/-, the amount on which such an employee would be liable to pay tax. Arguments about the scope of explanations and legal fiction - The arguments about the impugned amendments being inconsistent, repugnant and destructive of the main body of Section 17 (2) (ii) of the IT Act carry no force and cannot be accepted, as discussed earlier, the legislature creating legal fiction is a permissible legislative exercise. If such exercise is shown not to offend any constitutional provisions, there is no scope to interfere with such an exercise. The following argument about the necessity of introducing an explanation without demonstrating that there was any ambiguity in Section 17 (2) (ii) of the IT Act also cannot be accepted. The purposes of introducing or adding an explanation to a Section can be manifold. The legislature has broad discretion in such matters. The impugned amendments and the explanations introduced thereby cannot be struck down either because the legislature was incompetent to create a legal fiction, because such an explanation was unnecessary, because it destroyed the principal section, or because they were otherwise unconstitutional, ultra-vires, or null and void. Retrospectivity of the impugned amendments - In the present case, however, we need not explore whether the Explanations inserted by the impugned amendments are clarificatory. This is because the issue of construction and determining retrospectivity arises when a legislature is either silent or ambiguous. Here, the legislature, has expressly provided a limited retrospective operation. There is nothing inherently wrong in providing for such a retrospective operation. Therefore, merely because a limited retrospectivity is granted to the impugned amendments, we cannot hold that the impugned amendments violate Article 14 of the Constitution or otherwise ultra-vires the constitutional provisions. For all the above reasons, we find no force in the challenge based on the retrospectivity of the impugned amendments. Amendments violating Article 14 of the Constitution of India - We see not much force in the challenges to the impugned amendments on the grounds of any breach of Article 14 of the Constitution or any other constitutional provisions. Bank Submission - As it is too premature to decide whether the banks could be held to be assesses in default or made liable to pay any taxes on behalf of the employees. Therefore, we do not wish to make any observations on this issue. However, we clarify that if and when such issues arise, all parties contentions regarding this issue are kept open. Such issues should be dealt with in accordance with law by all concerned. Revenue authorities must consider that this Court had interdicted tax deductions at source through interim orders that operated during the pendency of some of these Petitions. The tax authorities must also consider the plight of the banks vis-a-vis its employees, most of whom must have retired by now. In any event, for the present, since such issues are yet to arise, we make no further observations on such matters, leaving all contentions of parties open.

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• 2025 (1) TMI 1125
  Addition u/s 68 - denial of exemption u/s 10(38) - penny stock used for generating bogus LTCG - Tribunal held that the AO made the addition solely on the ground that the scrips are in the stock whereas the assessee was able to demonstrate that the shares of the company in which the assessee has invested does not appear in the AIR report of the revenue which related to trading in penny stock HELD THAT:- Tribunal found that the AO committed a mistake which is apparent on the face of the assessment order. Tribunal also noted that the assessee had submitted details to substantiate the claim and the transaction of the assessee was found to be not in the nature of speculation and the assessee has purchased scrips for long term holding. Tribunal faulted the AO in not considering the voluminous information placed by the assessee during the course of assessment proceedings. Tribunal also referred to the notice issued by the Bombay Stock Exchange dated 17.07.2016 wherein the trading in the company in question namely Wagend Infra Venture Limited resumed with effect from 15.7.2016 and this information made known in the notice issued by the Bombay Stock Exchange was not disputed by the revenue. Tribunal on facts found that in case of the assessee s father the long term capital gains on the sale of some scrips/shares was accepted by the department, and this was specifically noted by the CIT(A). CIT(A) has elaborately considered the factual position and the voluminous documents and information furnished by the assessee and the same were re-appreciated by the Tribunal and the order passed by the CIT(A) was affirmed. No substantial question of law.

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• 2025 (1) TMI 1124
  Revision u/s 263 - Employees Stock Option Plan ( ESOP ) expenses claimed by assessee - as per CIT(A) AO failed to conduct adequate inquiry and verification before allowing the ESOP expenses as a deduction. Whether the deduction claimed by the assessee for the Employee Stock Option Plan (ESOP) expenses paid to its parent company, MakeMyTrip, Mauritius, was allowable under the Income Tax Act? HELD THAT:- We noted that the assessee has filed information in regard to ESOP charges claimed as deduction while furnishing information before TPO i.e., copy of information and documents maintained in TP report u/s 92D(1) including Executive Summary of ESOP cross charges. The assessee in its TP report has disclosed the ESOP cross charges which is part of assessment record and TP report. The assessee has filed entire details and AO has carried out enquiry into the details and after verifying the details he has allowed the claim of the assessee, and hence, it is not a case that the AO has not carried out verification or has not made in enquires in regard to this claim. We noted that the shares of MakeMy Trip, Mauritius got listed on NASDAQ Stock Exchange w.e.f., 17/08/2010 and since that date the market price of MakeMy Trip, Mauritius are readily available on the stock exchange. We noted that that the assessee has accounted for all the entries related to ESOP in term of guidelines note provided by ICAI on accounting of employees shares based payments and assessee has carried out the accounting treatment skill in compliance with the same. Assessee has undertaken ESOP costs as part of the salary and compensation under personnel expenses in the profit and loss account. Assessee has provided complete list of employees, as subscribed to these shares and their current employment status and benefit provided to them and consequent benefit to the assessee company. Assessee also explained before the AO and now before us that the earning under ESOP accrues to eligible employees by virtue of their employment with the assessee company. The company benefits from the services of an enthused and motivated work force, who remain committed and loyal to the company in anticipation of potential benefits under ESOP. Assessee has also provided valuation report for issuing such ESOP scheme and as per schedule reflected in Annexure-5 of the scheme the grant price of ESOPs during the year sum up to US$ 5,27,28 as per graded vesting schedule and corresponding amount of Rs. 2,41,51,868 has been booked in the audited financial statements and duly reflected in F. No.3CBE of assessee company for the Financial Year 2010-11 relevant to AY 2011-12. The complete benefit, if any, share shall be derived by employee and consequent benefit to the company is described is entity. Hence, on merits also the PCIT could not find fault with the scheme. He has simply directed revision on the assessment order that no verification or enquiry was carried out by the AO. Thus the revision order quashed and allowed the appeal of the assessee.

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• 2025 (1) TMI 1123
  Reopening of assessment u/s 147 when proceedings u/s 154 were pending - As per the reasons recorded in the approval form, the reasons recorded therein are exactly similar to the reasons recorded in the notice issued u/s 154 proceedings - HELD THAT:- We are of the view that in the proceedings initiated u/s 154, the AO has not acted upon pending proceedings u/s 154, AO cannot initiate the proceedings u/s 148 which is beyond his jurisdiction. Two simultaneous proceedings cannot be initiated. Respectfully following the decision of S.M. Overseas Pvt. Ltd. [ 2022 (12) TMI 702 - SC ORDER ] we are inclined to quash 148 proceedings as bad in law. Accordingly, ground is allowed.

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• 2025 (1) TMI 1122
  Unexplained expenditure u/s 69C - bogus expenditure as no supporting bills for such payments made u/s 194C to non-filers were furnished before the AO - HELD THAT:- As on the basis of data available on the Departmental portal, list of non-filers was found to whom payment had been made but who had not filed their income tax returns. Assessee was given the list of those non-filers, and the onus to prove the genuineness of transactions with them vide notice issued u/s 142(1) of the Act, but no reply was filed by the to the notice issued. Thus, it is not correct to state that the Ld. AO never asked for such details. A perusal of the details of non-filers shows that heavy payments were made to one individual Shri Phulchand Sharma at Rs. 1,47,60,000/- and while the Ld. AO had invoked section 69C of the Act to make the addition, however, this was a case of the expenses not being verified and, therefore, the expenses claimed u/s 37(1) of the Act were liable to be disallowed as it could not be established in the absence of the vouchers that the expenditure was incurred for business purposes. It has been held in the case of P.K. Palanisamy Vs. N Arumugham and another [ 2009 (7) TMI 1311 - SUPREME COURT ] that it is a well settled principle of law that mentioning of wrong provision or non-mentioning of provision does not invalidate an order if the court and/or statutory authority had the requisite jurisdiction therefore. Even though the provisions of section 69C of the Act were not applicable, however since the primary evidence for the expenditure claimed was not produced before the Ld. AO, nor the same could be produced before the Bench, therefore, some disallowance was called for on account of expenditure not being supported by vouchers. Hence, it is considered appropriate to sustain the addition to the extent of 10% of the expenses disallowed by the Ld. AO for non-maintenance of the vouchers which was conveyed to the Ld. AR. Thus, addition being 10% of the disallowed amount is hereby sustained and the rest of the addition is directed to be deleted. Hence, Ground Nos. 1 and 2 of the appeal are partly allowed.

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• 2025 (1) TMI 1121
  Denial of exemption u/s 11 - non-filing of Form 10B along with return of income - directory v/s mandatory provision - HELD THAT:- Filing of Form 10B is directory to facilitate the assessment and not mandatory. The assessee is running charitable trust and carried on charitable activities over the years, mere non-filing of Form 10B which is directory in nature cannot be the reason to deny the benefit extended by the statute, therefore, we are inclined to allow the claim of the assessee by relying on the findings in Green Dot Health Foods Pvt. Ltd. [ 2023 (2) TMI 516 - ITAT DELHI] - Decided in favor of assessee.

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• 2025 (1) TMI 1120
  Reopening of assessment u/s 147 - Addition u/s 68 - unexplained credits regarding share application money - HELD THAT:- AO observed that based on the information from Central Circle with regard to obtaining accommodation entries from MARRASS Industries Ltd. reasons recorded for reopening of the assessment and, it shows that he reopened the assessment after lapse of four years. On careful consideration of the reasons recorded for reopening the assessment, the AO has not discussed or hinted on the aspect for failure on the part of the assessee particularly when provisions of section 147 (1) was attracted in this case. Since original assessment order was already passed u/s 143(3) of the Act and after due verification of the transaction, AO allowed the same by accepting the same after verification of various documents submitted before him. CIT (A) sought for the assessment records in order to verify the above submissions of the assessee, however no records were traceable at that point of time. Since the assessee has submitted relevant information with regard to submission of various informations relating to receipt of share application money. Since the issue involved is application of provisions to section 147(1) of the Act, non-recording of failure on the part of the assessee in the reasons recorded shows that the reopening of assessment is only change of opinion and also beyond jurisdiction and at this juncture, we do not see any reason to disturb the findings of the CIT (A). Appeal filed by the Revenue is dismissed.

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• 2025 (1) TMI 1119
  Penalty imposed u/s. 271(1)(c) - Scrutiny assessment - Addition towards unexplained cash credits in the capital accounts of the partners - HELD THAT:- For Unexplained cash credit in the partners capital account as the assessee firm as per the mandate of Explanation-1 of Section 271(1)(c) had failed to come forth with any explanation as regards the aforesaid credits in its books of accounts, therefore, it was liable to be saddled with penalty under the aforesaid statutory provision. We, thus, in terms of our aforesaid observations finding no infirmity in the view taken by the CIT(A) who had rightly saddled the assessee firm with penalty on the aforesaid addition made u/s. 68 of the Act, uphold the same. Addition to the business income - Although the assessee firm on being confronted with the aforesaid fact in the course of the quantum appeal before the CIT(A), had stated that the said infirmity was on account of an inadvertent omission, but we are unable to persuade ourselves to concur with the same. As the assessee firm had failed to come forth with any plausible explanation for having suppressed/understated the net profit in its return of income, therefore, as observed by the CIT(Appeals) and, rightly so, it was liable to be saddled with penalty u/s. 271(1)(c) of the Act. We, thus, in terms of our aforesaid observations finding no infirmity in the view taken by the CIT(Appeals) who had rightly saddled the assessee firm with penalty u/s. 271(1)(c) of the Act on the aforementioned amount of understated/suppressed net profit uphold the same. Deduction of expenses of FBT, donation and prior period expenses - There is nothing available on record which would substantiate the genuineness of the aforesaid expenses, which the assessee had admitted before the CIT(Appeals) as inadmissible, therefore, the same is nothing short of raising of a false/wrong claim of deduction. We, thus, in terms of our aforesaid observations, find no infirmity in the view taken by the CIT(Appeals) who had rightly imposed penalty u/s. 271(1)(c) on the assessee firm for raising a wrong claim of deduction of expenses. Decided against assessee.

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• 2025 (1) TMI 1118
  Validity of Assessment order passed by the ITO-4(1), Raipur as non-jurisdictional A.O - no order u/s.127 was passed for transfer of case from ITO-3(1), Raipur to ITO-4(1), Raipur - HELD THAT:- As on a perusal of the aforesaid order of transfer u/s. 127 of the Act that it is stated at Sr. No.20 that the case of the present assessee had been transferred from ITO-3(1), Raipur to ITO-4(1), Raipur. Additional grounds of appeal raised by the assessee are dismissed. Addition u/s 68 - unexplained source of the cash deposit made in her bank account during the demonetization period - The assessee had failed to come forth with an irrefutable explanation as regards the source of the cash deposits of Rs. 11 lacs (supra) made in her bank account during the year under consideration. Left with no other alternative but to draw support from the CBDT Instruction No.3/2017, dated 21.02.2017 for estimating the amount of cash in hand that would have been available with her to source the subject cash deposits in her bank account. As availability of cash with the assessee as on the date of cash deposits which would have sourced the cash deposits of Rs. 11 lacs (supra) in her bank account with Allahabad Bank, Raipur is restricted to the extent of Rs. 3,50,000/-. Hence, sustain the addition partly.

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• 2025 (1) TMI 1117
  Assessment u/s 153A - Addition of unexplained cash credit u/s 68 - HELD THAT:- In the case of Smt. Shashi Agarwal [ 2024 (10) TMI 533 - ITAT LUCKNOW ] coordinate bench of ITAT Lucknow has decided the matter in favour of the assessee, relying on Abhisar Buildwell (P.) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT ] on the issue whether additions can be made in a search assessment in the absence of any incriminating material found during search. Thus addition cannot be made in a search assessment in the absence of any incriminating material - Decided in favour of assessee.

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• 2025 (1) TMI 1116
  Addition u/s 69/69A - treating all the credit found in bank as unexplained money - AO charging special tax rate 60 percent u/s 11BBE - HELD THAT:- Out of a credit amount Rs. 44,01,180/- is on account of a home loan, copy of home loan disbursal is placed on record, otherwise it is evident from the credit entry, if such amount is reduced from whole of the addition, the addition will reduce to Rs. 28,80,494/-. Further, if the assessee is allowed deduction under section 80TTA of Rs. 2,042/-, the addition will reduce to Rs. 28,78,452/-. Further, there is mistake on figure of Rs. 19,870/- by considering as correct amount will reduce to Rs. 28,58,582/-. From the copy of ITR for AY 2016-17, we find that the assessee was having cash-in-hand of Rs. 9,92,080/- the return of income for AY 2016-17 filed on 14.09.2016, copy of which placed on record pages 39 to 41 of the paper book. Thus, if such credit is allowed, the additions is left only to Rs. 18,66,502/-. We find that the assessee was engaged in business income is estimated @ 10% the taxable income would be Rs. 1,86,650/-, which we rounded off to Rs. 2.00 lakhs. Thus, the additions made by AO is restricted to Rs. 2.00 lakhs. In the result, the grounds of appeal raised by the assessee are partly allowed.

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• 2025 (1) TMI 1115
  Disallowance u/s. 40A(3) r.w. clause (f) of Rule 6DD - cash purchases exceeding Rs. 20,000 - Auditor has identified 61 transactions attracting mischief of section 40A(3) - HELD THAT:- Claim of assessee is that assessee has given cash to her employee who is the supervisor or the agent who in turn made payment to the sellers of the gold and therefore the same would not fall within the scope of section 40A(3). It was also the claim of assessee that part of jewellery and bullion is purchased by assessee was shown as stock in trade and the provisions of section 40A(3) were not applicable and assessee relied on the decision of Prosperous Buildcon Pvt. Ltd. [ 2023 (11) TMI 706 - DELHI HIGH COURT ] The assessee has further relied on the decision of Rajesh Kumar [ 2023 (10) TMI 1285 - DELHI HIGH COURT ] stating that if the assessee proves the genuineness of the transaction, disallowance could not have been made u/s. 40A(3) of the Act. As all these issues have not been considered by the ld. lower authorities, therefore, we restore the whole issue back to the file of ld. AO with a direction to the assessee to substantiate that the payment made to 61 parties on bank holiday, the payment was made by the agent and further the business exigency also demanded payment of cash - Appeal of the assessee is allowed for statistical purposes.

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• 2025 (1) TMI 1114
  LTCG - Deduction u/s 54 - share of the assessee in the Joint Development Agreement (JDA) - entire sale consideration received are invested in the construction of the new property - DR contended that the Katha stood in the name of the assessee as well as his brother and therefore the assessee is entitled for 50% share in the land given to the builder. HELD THAT:- We are in agreement with the argument that the title of the property cannot be decided on the basis of Khatha as held by the various Courts, when the assessee was able to establish the ownership of the lands by way of JDA and Partition Deed. Mere reliance on the Khatha issued by the authorities is not legally correct. AO has also not produced any documents to show that the assessee and his brother are the owners except the Khatha. The ownership of the immovable property could not be transferred without executing any registered document. There is no such documents were available to show that the assessee as well as his brother are the owners. We do not accept the reasoning given by the AO for arriving the share of the assessee at 50%. Assessee was also not able to explain why he has adopted a lesser area of land while computing the long term capital gains. If the assessee s contention that his share is 25% and therefore long term capital gains should be computed on his share alone, some more enquiry is to be conducted by the authorities. One such enquiry may be carried out with the sister of the assessee as well as his father and if they are able to show that they have sold their respective shares to various buyers, the dispute arose in this appeal would be solved. We therefore restore this matter to the file of the AO to call for the details from the assessee as well as his father and sister to prove that they sold their respective shares separately in favour of the buyers which they got based on the partition deed. Whether entire money received by him were utilised in the construction of the building and therefore he is eligible for deduction u/s. 54? - The assessee is entitled to claim deduction u/s. 54 of the Act if the assessee is able to establish the fact that the construction was commenced within the period prescribed under the Act. If the assessee is able to establish the said fact, then as per section 54 assessee is entitled for said deduction. Based on the records filed by the assessee, we are not able to ascertain the said facts. In order to ascertain the said facts, we are remitting this issue also to the AO to decide the issue afresh based on the documents produced by the assessee and if the AO is found that the construction was commenced within the period of 3 years, but the same was completed after the period of 3 years, then the assessee is entitled for deduction irrespective of the completion of the construction. With the above directions, we are remitting both the issues to the AO for deciding the issues in accordance with law and also based on the findings given above. Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (1) TMI 1113
  Classification of income - treatment of interest income on loans and advances provided to employees - business income or income from other sources - HELD THAT:- Interest income earned from loans and advances provided to employees is incidental to the business of power generation and qualifies as business income. The AO s classification of the income under other sources is erroneous and contrary to binding judicial precedents. CIT(A) has correctly relied on the judgments of Odisha Power Generation Corporation Ltd. [ 2022 (3) TMI 539 - ORISSA HIGH COURT] and provided a well-reasoned conclusion to delete the additions made by the AO. Now in the case of Gujarat Urja Vikas Nigam Ltd. [ 2020 (3) TMI 232 - GUJARAT HIGH COURT] also upheld that interest income earned on loans and advances provided to its employees is directly related to the business operations of Power Companies. Decided against revenue.

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• 2025 (1) TMI 1112
  Validity of Reopening of assessment u/s 147 without issuing a valid notice u/s. 143(2) - assessee s claim of having purchased the subject land i.e. land situated at Talapara, Bilaspur as stock-in-trade of his business could not be accepted and treating the same as the income of the assessee u/s. 56(2)(vii)(b) - HELD THAT:- As is discernible from the Screen shot of the e-portal account of the assessee,, the return of income filed by the assessee on 11.06.2018 (supra) had thereafter been e-verified though after the due date i.e. on 24.10.2019. Accordingly, as the assessee had filed the return of income in compliance to notice u/s. 148 of the Act (wherein the provisions of the Act shall so far as may be apply accordingly as if such return were a return required to be furnished u/s. 139 of the Act), therefore, the A.O had validly issued the notice u/s. 143(2) of the Act, dated 05.11.2019. Our aforesaid conviction is fortified on a perusal of Section 143(2) of the Act, as per which, where a return of income has been furnished u/s. 139 of the Act, then the A.O, if considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner shall serve upon him a notice requiring him, on a date to be specified therein, either to attend the office of the A.O or to produce, or cause to be produced before him any evidence on which, he may rely in support of the return. Accordingly, after the return of income was e-verified by the assessee on 24.10.2019, the notice u/s. 143(2) of the Act which was thereafter issued by the A.O could not be held to be invalid. Against assessee. Whether concluded assessment in his case had been reopened based on a mere change of opinion ? - As the concluded assessment of the present assessee that was originally framed by the A.O vide his order passed u/s. 143(3) of the Act, dated 23.08.2016 had been reopened by successor A.O based on the same set of facts as were there before his predecessor and were looked into and deliberated upon by him in the course of the original assessment proceedings, and not on the basis of any fresh material coming to his notice after framing of the original assessment, therefore, the same is based on a mere change of opinion , which as pointed out by the Ld. AR and, rightly so, as per the ratio of Kelvinator of India [ 2010 (1) TMI 11 - SUPREME COURT ] is not permissible, thus, cannot be sustained and is liable to be quashed. Decided in favour of assessee.

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• 2025 (1) TMI 1111
  Denial of deduction u/s 10A - defective Form 56F - there is no certification by Chartered Accountant as required under law - CIT(A) allowed deduction - HELD THAT:- We find the Tribunal in the case of Mahendra Kumar Damani [ 2023 (2) TMI 386 - ITAT CHENNAI] held that the provisions of sub-section (5) of section 10A of the Act shall apply in relation to deduction specified in section 10AA of the Act. Whether report signed as Deloitte Haskins and Sells is not a valid verification of report in Form 56F and treated as defective? - We find the Act envisages an Accountant , as referred in sub-section (5) to section 10A of the Act and the definition of which as provided in Explanation below to sub-section (2) of section 288 of the Act, should sign Form 56F, which was not done in this case as observed by the AO. We find in order to certify the correct claim under the provisions of section 10A of the Act, an Accountant as referred in sub-section (5) to section 10A of the Act and the definition of which as provided in Explanation below to sub-section (2) of section 288 of the Act is required. It is amply clear that a Chartered Accountant falling under the definition to clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 is required to certify the correct claim under the provisions of section 10A of the Act. Assessee could not provide any material supporting the order of the ld. CIT(A) showing that Deloitte Haskins and Sells is an Accountant as referred in sub-section 5 of section 10A of the Act. Thus, we hold the view of the AO is correct in holding the Form 56F is defective and the assessee is not entitled for deduction under section 10A - Decided against assessee.

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• 2025 (1) TMI 1110
  Higher tax rate un/s 115BBE for Addition u/s 68 - unexplained cash deposits - AO levied tax at 60% under Section 115BBE - HELD THAT:- The rate of taxes as applied by the Assessing Officer is in accordance with the tax provisions of the Act, and therefore, we do not find any error in the orders passed by the AO or the LD.CIT(A). Even in the absence of decision of Hon ble High Court of Kerala in the case of Maruthi Babu Rao Jadav [ 2021 (1) TMI 481 - KERALA HIGH COURT] the bare provision of the Act - 2(37A) read with other provisions of the Act i.e., Section 68 and Section 115BBE make it clear that the rate of taxes at which the deemed income of the assessee is required to be taxed, would be taxed, as notified by the Parliament in the Schedule of Income Tax Act for A.Y. 2017-18. In view of the above, the objection of the ld.AR is devoid of any merit. It is also settled proposition that the charging provision cannot be applied retrospectively, whereas the machinery / applicability of the rate of tax is charged in accordance with the Schedule of Income Taxes as declared by the Parliament on a year- to-year basis. Respectfully, following the decision of Chandan Garments Private Limited [ 2023 (7) TMI 973 - ITAT INDORE] no merit in the appeal of the assessee and we are inclined to hold that the higher rate of tax prescribed in Section 115BBE of the Act is applicable to the whole previous year 2016-17 relevant to A.Y. 2017-18 - Decided against assessee.

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• 2025 (1) TMI 1109
  Addition u/s 69A - unexplained money - unexplained receipts towards unsecured loan received from Smt. K. Subbaratnamma, on the ground that the assessee has received loan in cash and hence the same is not reflected in the regular accounts of the assessee - HELD THAT:- From the details filed by the assessee, we find that the loan given to the appellant has been disclosed in the financial statement of the creditor. Therefore, we are of the considered view that the appellant has filed relevant evidences to prove the amount of loan received from the creditor. Reason for difference in the rough balance sheet and the final balance sheet is explained and as per the rough balance sheet, the appellant has recorded loan received from Smt.K.Subbaratnamma, whereas, after considering the details of repayment of loan, the account was squared up in the final balance sheet. Assessee has explained the difference in unsecured loan from two balance sheets by filing reconciliation. AO and the CIT(A) without appreciating relevant facts, simply sustained the additions made by the AO. Thus direct to delete addition - Decided in favour of assessee. Assessment u/s 153A - Addition u/s 68 - introduction of fresh capital in cash by partners - identity, genuineness and creditworthiness of the partners who introduced capital not established - HELD THAT:- As in respect of completed assessments / unabated assessments, no additions can be made in the absence of any incriminating material found during the course of search u/s 132 of the Act. In the present case, going by the assessment order, we find that the additions made by the AO towards capital account of partners u/s 68 of the Act is not based on any incriminating material found as a result of search. Therefore, additions made by the AO towards capital account of partners u/s 68 in the assessment order passed u/s 153A of the Act, without any reference to incriminating material found during the course of search us 132 of the Act cannot be sustained. Capital contributions from partners - The appellant is able to establish identity, genuineness of transactions and creditworthiness of the partners. The Ld.CIT(A) after considering relevant facts has rightly held that the Assessing Officer has made addition only on the basis of suspicion and surmises, without any clinching evidence to suggest that the amount of capital introduced by the partners is unexplained credit or income of the appellant firm. The findings of facts recorded by the Ld.CIT(A) is uncontroverted by the Revenue. Therefore, we are inclined to uphold the findings of the Ld.CIT(A) and dismiss the appeal filed by the Revenue.

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• 2025 (1) TMI 1108
  TP Adjustment - adjustments in respect of international transactions made with M/s. Northstar Health Care - TPO had treated the said entity as a deemed AE - HELD THAT:- As in respectful compliance to the decisions of the Hon ble Coordinate Bench, in assessee s own case [ 2016 (12) TMI 236 - ITAT CHENNAI] , we direct the Ld. AO to delete the addition made on account of adjustment made by the Ld. TPO in respect of M/s.Northstar Health Care TP Upward adjustments made by the Ld. TPO on account of sale of cephalexin and Levetiracetam Drugs - HELD THAT:- .Accordingly, in the line of decision in assessee s own case qua AY-2017- 18 2018-19 supra the Ld. TPO is directed to recompute the ALP following the ratio laid down in [ 2024 (9) TMI 1688 - ITAT CHENNAI] . TPO would be required to give all opportunities of being heard to the assessee who shall comply with all the notices issued to him in this regard. Addition qua provisions u/s 36(1)(vii) - provision for rebates and discounts written back - HELD THAT:- A benefit accruing to a tax payer on account of a statutory stipulations cannot be taken away by the assessing authority on account of mere adverse presumption. In support of its contentions assessee has placed reliance upon the decision of Banyan and Berry [ 1995 (12) TMI 12 - GUJARAT HIGH COURT] and Walfort share and stock broker private limited [ 2010 (7) TMI 15 - SUPREME COURT] We have also noted that the Ld. DRP has also not confirmed the order of the Ld. AO with any detailed findings and has only confirmed Ld. AO s findings in a summary manner. Accordingly, we are of the view that the addition made by the Ld. AO is not correct. We therefore set aside the order of the lower authorities and direct the Ld. AO to delete the addition Adding back the impugned provisions the assessee had calculated tax at 20% whereas while reversing the same it has claimed the benefit at 30% - Addition of provision pertaining to AY-2010-11 and the assessee has reversed the transaction in AY-2012-13 - HELD THAT:- At any take over / restructuring of business a contractual condition exists that the new party will take over all the assets and liabilities of the old party. Thus the new entity namely Hospira Health Care India Private Limited which had taken over assessee s generic injectable finished dosage business also become entitled to all the assets and liabilities of the of the assessee. To this extent we find force in the arguments of the Ld. AO that the said amount cannot be claimed by the assessee. We have also noted the concerns of the Ld. AO that assessee had calculated tax at 20% whereas while reversing the same it has claimed the benefit at 30%. We are therefore of the view that there is no merit in the case of the claim of the assessee when viewed in the light of peculiar facts of the present case. The Judicial Pronouncements also cited by the assessee would not come to his rescue given the existence of peculiar facts of the present case. Accordingly, the addition made by the Ld. AO is confirmed Addition by invoking provisions of section 37(1) - provisions were created at the end of the year and no party account was credited. - HELD THAT:- The genuineness of the impugned job work charges is not in dispute. It is also not in dispute that the assessee has offered the corresponding sales attributable to the job work during the said year. We have also found that there is no dispute qua regarding any benefit accruing to the tax payer on account of differential tax rates. It is also not a case of a provision being created qua an unascertained liability. This being the case we do not find any infirmity in the demand of the assessee regarding the allowance of the impugned expenses. Accordingly, we direct the Ld. AO to delete the impugned addition Disallowing claim of deduction u/s. 35(2AB) - According to AO, the assessee had not filed supporting evidence as well as the required Form 3CL and therefore he proceeded to add the impugned addition - HELD THAT:- Form 3CL is a mandatory requirement for claiming deduction u/s 35(2AB). Non-availability thereof would preclude the assessee from rightfully claiming the statutory deduction. where law is unambiguously candid, there is no scope for any different interpretation by the courts than the one specified therein. We have however found sufficient force in the alternate argument of the appellant that in the event of denial of weighted deduction u/s 35(2AB), for want of prescribed Form 3CL, the assessee would be eligible to at least the deduction u/s 37 / section 32 of the act. As stated that within the meanings of provisions of 37 a part of the same would be classified as capital expenditure and the balance as revenue expenditure. As also urged that on the component of capital expenditure the assessee would be entitled for depreciation u/s 32. Accordingly, the order of lower authorities on this issue is set aside. AO is directed to read judicate the matter de novo and consider allowing assessee s claim of deduction u/s 37 / 32 in accordance with law after giving opportunity of being heard to the assessee. Assessee shall provide the AO bifurcation of the capital and revenue expenditure as available in its records. AO would then allow the assessee the impugned expenses u/s 37 and 32 in accordance with law. Accordingly ground of appeal no.11 is dismissed and 12 is allowed for statistical purposes. Non deduction of TDS u/s 40(a)(i) - Disallowing of deduction in respect of FCCB issued which was redeemed during the previous year under consideration at a premium - HELD THAT:- It is an undisputed fact of the case that the assessee has issued FCCB during 2006-07 and which have been redeemed by incurring a premium expenditure during the year under consideration. As undisputed and rather admitted fact on records that no TDS deduction u/s 40(a)(i) was done by the assessee. To this extent the disallowance made by the Ld. AO has been found to be in order. We have also noted that no adverse findings have been given by the Ld. AO as regards to commercial expediency of the impugned expenditure on premium or regarding the genuineness of the said expenditure. The argument of the Ld. AO about amortization also does not find favour with us since even though he argued for amortization he has himself chosen not to allow the assessee 1/5th of Rs. 246.87 Crs and proceeded to add the entire figure. In the absence of any adverse findings qua commercial expediency of the impugned expenditure on premium or regarding the genuineness of the said expenditure brought on records we are unable to concur with the findings of the lower authorities. The order of Ld. Lower authorities is therefore set aside. The impugned expenditure cannot be allowed as deduction in the year under consideration on account of the same not being exposed to any TDS deduction u/s 40(a)(i). Accordingly, we direct the AO to allow the impugned expenses in the year when TDS deduction u/s 40(a)(i) is made by the assessee.

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• Customs

• 2025 (1) TMI 1107
  Valuation of imported goods - allegation of Fabricated invoices/ original invoices - transaction value of the imported goods - Jurisdiction Of Ld. Adjudicating Authority to appreciate the evidences on record in sustaining the allegations/ the issues raised in the SCN - it was held be CESTAT that The transaction values of other importers could not be considered for re-determination of the subject goods value under Rule 5 of the Customs Valuation Rules, 2007. HELD THAT:- It is not required to issue notice in the present appeal; hence, the same is dismissed.

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• 2025 (1) TMI 1106
  Challenge to assessment order - seeking release of the bank guarantee - import of consignment of gold jewellery from Indonesia - benefit of exemption N/N. 46/2011-CU dated 01st June, 2011 and N/N. 12/2012-CE dated 7th March, 2012 - HELD THAT:- There can be no doubt about two facts, firstly that the Division Bench judgment [ 2023 (12) TMI 697 - DELHI HIGH COURT] had to be complied with and the Customs Department could not hold back compliance thereof by directing adjustment in the final order. Such a course of action would not be permissible. Secondly, insofar as the impugned order is concerned, the same is an appealable order. Delay in passing the impugned assessment order is a ground on which the Petitioner seeks to challenge the same. The ground of delay can also be raised in the appeal. The appellate forum would then consider the reliefs sought in the first writ petition also while deciding whether there was delay. This Court is also not to go into computation in terms of the impugned order. That would be a factual determination. Since the impugned order is appealable, this Court does not wish to go into merits of the order or the aspect of delay. The Petitioner is permitted to file an appeal challenging the impugned order dated 23rd February, 2024 within a period of 30 days from today along with requisite pre-deposit in terms of the Act - Petition disposed off.

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• 2025 (1) TMI 1105
  Challenge to SCN - time limitation - seeking declaration that proceedings initiated under the SCN by Respondent No. 2 Principal Commissioner of Customs, ICD Tughlakabad, New Delhi, to be barred by limitation under Section 28 (9) of the Customs Act, 1962 - HELD THAT:- The issue raised in the petition is no longer res-integra. Section 28 (9) of the Act, unamended and amended, have been considered in detail by the Coordinate Benches of this Court in Swatch Group India Pvt. Ltd. [ 2023 (8) TMI 864 - DELHI HIGH COURT ] as also M/s Vos Technologies India Pvt. Ltd. v. The Principle Additional Director General Anr. [ 2024 (12) TMI 624 - DELHI HIGH COURT ]. All the issues which have been raised by the Respondents now stand adjudicated. It was held in Swatch Group India Pvt. Ltd. that In the absence of any ground that it was not possible for the officer to determine the amount of duty within the prescribed period, the impugned SCN has lapsed and cannot be adjudicated. The impugned SCN, which was issued way back in 2008, due to repeated placing in the call book has not been adjudicated for so long. Repeated placing and removing from the call book is not a valid justification for non-adjudication of the impugned SCN for about 15 years. Moreover, the gaps between the said periods is also inexplicable. Hearing notices have been given to the Petitioners but there is no reason for non-adjudication of the impugned SCN for long period. Conclusion - The SCN was quashed due to being barred by limitation, and the justification of delay due to call book placement was rejected. Petition allowed.

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• 2025 (1) TMI 1104
  Levy of penalty u/s 112(a) and 112(b) of the Customs Act, 1962 - abetting the smuggling of gold and his indulgence in dealing with smuggled gold - HELD THAT:- From the findings of the ld. adjudicating authority, it is observed that except the statements of Shri Pawan Prasad and Smt. Monika Yadav, there is no other corroborative evidence to establish the role of the Appellant in the alleged offence. From the Section 112 of the Customs Act, 1962, it is observed that penalty can be imposed under this section only when a person commits an act which renders the goods liable for confiscation. In the present case, it is observed that the gold recovered from Shri Pawan Prasad and Smt. Monika Yadav has been ordered to be confiscated under Section 111 of the Customs Act vide the impugned order dated 31.03.2017 and penalty has been imposed on them for the role played by them in the offence. There is no other evidence available on record to implicate the appellant in the alleged offence. The penalty imposed on the Appellant by invoking the provisions of Section 112(a) and (b) of the Act is not sustainable - Appeal allowed.

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• 2025 (1) TMI 1103
  Smuggling of bike - Jurisdiction of DRI officers to issue SCN in view of the amendments made by the Finance Act, 2022 - power of customs authorities at Hyderabad to adjudicate the case when the bike was said to have been smuggled through Kolkata port and got registered with RTA, Raigad - challenge to SCN on the ground that Shri Sunil Lawrence has not been made a noticee at all - confiscation - redemption fine - penalty. Jurisidiction of Customs authorities in Hyderabad - HELD THAT:- The appellant had produced a copy of Bill of Entry purported to have been filed in Kolkata Air Cargo complex, which was found to be fake. There are no other legal documents to show how the bike was imported into India. Therefore, it is inconceivable that Kolkata Customs will have any jurisdiction over this case. In fact, in this case, there is no proposal for assessment or demand of duty. The question of jurisdiction of the port will arise when goods are imported through a port and the duty has been assessed and the duty so assessed has to be modified. The property was registered in the name of the appellant by RTA, Hyderabad. Therefore, there are no reason to hold that any officer other than the officers of Hyderabad Customs will have any jurisdiction over to decide the matter. The only question is whether the bike was liable to be confiscated and whether the appellant was liable to pay penalty under section 112(b) or not. Here it is found in favour of the Revenue and against the appellant on the question of jurisdiction. Challenge to SCN on the ground that Shri Sunil Lawrence has not been made a noticee at all - HELD THAT:- The identity of Shri Sunil Lawrence was also not known to the appellant and the person through whom the bike was purchased from Shri Sunil Lawrence is no more. So, there was no way to find who Shri Sunil Lawrence was and where he lived and if he had smuggled the bike into India - the proposal is only to deprive the appellant of his property and therefore, SCN was issued. The proposal was also issued to impose penalty on the appellant. The mere fact that some action has not been taken against any other person, such as Shri Sunil Lawrence, does not negate the validity of this SCN or the consequential orders. Confiscation - HELD THAT:- It is clear from section 2(33) that prohibited goods under the Customs Act are only such goods whose import or export is prohibited and not those goods where the appropriate procedures have not been followed. The SCN refers to section 46 and 47 of the Customs Act. Section 46 requires the importer of any goods to file a bill of entry and section 47 provides for proper officer to issue out of charge on the bill of entry. Neither of these provisions deals with any prohibitions. While it is irregular and contrary to law to import goods, i.e., bring goods into India from a place outside India without following the due processes, such violations would not make the goods prohibited goods under the Customs Act. In fact, if any goods are imported or attempted to be imported other than through the customs ports or airports or land customs station, such goods will be liable for confiscation under section 111(b) of the Customs Act. Therefore, in this case, confiscation under section 111(d) cannot be sustained - Section 111(i) deals with goods which are found concealed in any package either before or after unloading thereof. There is no allegation that the bike in dispute was concealed in any manner, let alone, any evidence to this effect. In fact, it was registered with the RTA, Hyderabad in the name of the appellant. Therefore, confiscation under Section 111(i) cannot be sustained - Section 111(j) deals with the goods, which are removed or attempted to be removed, from customs area or warehouse without permission of proper officer or contrary to the terms of such permission. In this case, there is no evidence or allegation that the bike was removed from customs area without any permission. Therefore, confiscation under Section 111(j) also cannot be sustained. None of the three clauses of section 111 under which the bike was confiscated apply. For this reason alone, the confiscation of the bike needs to be set aside. Penalty - HELD THAT:- Penalty under Section 112(b) which is dependent on goods being liable to confiscation under Section 111 also cannot be sustained - section 112(b) provides for penalty for knowingly carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing any goods. There is nothing in this case to show or establish that the appellant had any knowledge that the bike was liable for confiscation. At any rate, once the confiscation under section 111 is set aside, the penalty under section 112 also needs to be set aside. Conclusion - i) The property was seized from the possession of the appellant in Hyderabad. Therefore, there are no reason to hold that any officer other than the officers of Hyderabad Customs will have any jurisdiction over to decide the matter. ii) None of the three clauses of section 111 under which the bike was confiscated apply. For this reason alone, the confiscation of the bike needs to be set aside. iii) Once the confiscation under section 111 is set aside, the penalty under section 112 also needs to be set aside. The impugned order set aside - appeal allowed.

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• Insolvency & Bankruptcy

• 2025 (1) TMI 1102
  Approval of Resolution Plan - Applicant submits that RP has not issued clarification with regard to certain commercial spaces in the Corporate Debtor s asset - It is submitted that the Applicant/ Appellant was not informed about the 4th to 9th floor also belong to the Corporate Debtor - it was held by NCLAT that There is no substance in the submission advanced by the Applicant in the present Application praying for setting aside the order of the Adjudicating Authority and to remand the Plan back to the CoC for fresh consideration. HELD THAT:- No case is made out for interference - Appeal dismissed.

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• 2025 (1) TMI 1101
  Dismissal of application filed by the respondent-Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016 on the ground of bar of limitation - HELD THAT:- It is found that the NCLAT has relied upon a letter dated 25th October, 2019 for coming to the conclusion that Section 25(3) of the Indian Contract Act, 1872 will apply and in view of the promise contained in the same letter, the petition under Section 7 of the IB Code was within the limitation - However, the admitted position is that the letter dated 25th October, 2019 was not produced by the respondent before the NCLT and it was produced for the first time in the appeal preferred by the respondent before the NCLAT. The finding on the issue of bar of limitation has been upset by the NCLAT mainly relying upon the letter dated 25 th October, 2019. The appeal is partly allowed by leaving open all questions for consideration of the NCLT.

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• 2025 (1) TMI 1100
  Admissbility of petition u/s 9 of the IBC against the Corporate Debtor - asset value of the Corporate Debtor, M/s. Etco Denim Private Limited, was more than the norms prescribed for it to qualify as an MSME - HELD THAT:- An appeal is heard in terms of Section 62 of the IBC and within its limited confines, the question of the validity of the registration certificate dated 23.10.2020 not gone into. At the same time, the certificate having been placed on record, Section 29A read with Section 240A of the IBC would come into play and would affect the interests of the secured creditors, including the appellant, Central Bank of India. Keeping in view the peculiar facts of the present case, the appellant, Central Bank of India, is permitted to file a writ petition before the jurisdictional High Court challenging the issuance of the MSME Registration Certificate dated 23.10.2020. If any such writ petition is filed, the High Court is requested to take up the same for hearing expeditiously and preferably decide the same within a period of six months from the date of its filing. The parties and the authorities who have issued the said certificate shall also cooperate. Re-list in the week commencing 18.08.2025.

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• 2025 (1) TMI 1099
  Statutory interpretation of the provision of Section 101(1) of IBC - moratorium period prescribed under Section 101 of the Insolvency and Bankruptcy Code (IBC) is mandatory or directory - the period can be extended by the Adjudicating Authority or the Appellate Tribunal or not - error in not extending the moratorium period beyond 180 days during the Personal Insolvency Resolution Process (PIRP). HELD THAT:- The principles for interpretation of statute are well settled. Reference made to the Constitution Bench Judgment of the Hon ble Supreme Court in the matter of State of UP Ors. Vs. Babu Ram Upadhyay [ 1960 (11) TMI 116 - SUPREME COURT] Constitution Bench held that for determining as to whether statute is mandatory or directory, the Court has to ascertain the real intention of the nature and the consequences which would follow from construing it from one way or other. Another Judgment of the Hon ble Supreme Court in the matter of Rajsekhar Gogoi Vs. State of Assam Ors. [ 2001 (5) TMI 979 - SUPREME COURT] , where Hon ble Supreme Court had occasion to consider Rule 206 of Assam Excise Rules 1945, which provided that tender must be in such form and contained such particulars as may be prescribed by the State Government and tenders not containing all the particulars shall be liable to be rejected. Arguments was raised before the Hon ble Supreme Court that the said provision is not mandatory, which argument was rejected. Hon ble Supreme Court in the matter of Newtech Promoters Developers Private Limited Vs. State of Uttar Pradesh Ors. [ 2021 (12) TMI 892 - SUPREME COURT] laid down that it is always advisable to interpret the legislative wisdom in the literary sense as being intended by the legislature and the Courts are not supposed to embark upon enquiry and find out the solution in substituting the legislative wisdom. The language of Section 101(1) is plain and clear, outer limit of Moratorium is prescribed by providing that 180 days from date of commencement of admission of the Application or an Order is passed by the Adjudicating Authority on the Repayment Plan under Section 114 whichever is earlier thus on happening of the eventuality as prescribed as Section 101(1) Moratorium comes to an end. Conceding any power to the Adjudicating Authority or this Tribunal to extend the said period shall be plainly against the statutory scheme of Section 101(1). When the statutory scheme is clear and unambiguous, there is no role of any interpretive process to find out the jurisdiction of NCLT to extend the period of Moratorium when statute provides a date for cessation of the Moratorium it cannot be extended by the Adjudicating Authority or by this Tribunal against the statutory intendment under Section 101(1). This Tribunal after noticing the provisions of Section 54D, Section 54N relying on the Judgment of the Hon ble Supreme Court in Surendra Trading Company Vs. Jugilal Kamlapat Jute Mills Company Ltd. Ors. [ 2017 (9) TMI 1566 - SUPREME COURT] and Judgment of the Hon ble Supreme Court in the matter of Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta Ors. [ 2019 (11) TMI 731 - SUPREME COURT] came to the conclusion that the provisions of Section 54D does not contemplate any automatic termination of the PPIRP, hence the Court had discretion to extend the time in an appropriate case. Conclusion - In view of the expressed provisions of Section 101(1) limiting the Moratorium period to 180 days on the date when the Order is passed by the Adjudicating Authority for Repayment Plan, whichever is earlier. 180 days from commencement of the Moratorium has come to an end on 28.10.2024. The Moratorium has statutorily come to an end and could not be extended. Appeal dismissed.

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• 2025 (1) TMI 1098
  Admission of the Section 9 application under the Insolvency and Bankruptcy Code, 2016 (IBC) - pre-existing dispute between the parties or not - transactions under running account - demand is barred by Limitation Act, 1963. Pre-existing dispute between the parties - HELD THAT:- Any dispute between the Promoters / Directors / Shareholders of the Respondent No.1 or Corporate Debtor is outside the scope of Section 9 of the IBC as both Respondent No.1 and Corporate Debtor are separate corporate legal entities different from their Promoters / Directors / Shareholders. Furthermore, the pre-existing dispute has to relate to the debt which is the subject matter of the application. The purported dispute does not relate to the subject matter of the present proceeding. In the conspectus of the case, issue of the pre-existing dispute cannot be put to a strait jacket as there is a complex nature of transactions when the Demand Notice was issued. It is found that there is a pre-existing dispute between the Promoters inter-mingled with the two legal entities and is not a patently feeble argument or an assertion of fact unsupported by evidence, rather it is an actual dispute requiring adjudication. The Hon ble Supreme Court in the matter of Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited [ 2017 (9) TMI 1270 - SUPREME COURT ] has mandated that such an application needs to be dismissed under Section 9(5)(ii)(d). There is a pre-existing dispute between the parties and Section 9 petition is not maintainable. There is sufficient material on record to suggest that there is a pre-existing dispute and Section 9 petition is not maintainable, even then the other additional grounds raised by the Appellant - with respect to limitation and the account being running account or not, are being delved in subsequent paragraphs to unearth the real nature of transactions between the two parties. Time limitation - HELD THAT:- Even the Adjudicating Authority has concluded that The latest part-payment being made on 02.03.2022 extended the limitation for further 3 years, hence, the claim of the Operational Creditor in respect of the invoices raised, is not time-barred. This conclusion of Adjudicating Authority doesn t provide any benefit to the Appellant and the maintainability of the petition cannot be questioned on the grounds of limitation. Conclusion - There are multiple transactions which were happening in the purported running account - some of which relate to the supply of goods and their payment from two legal corporate entities, but others not directly related to the supply of goods and services. The dispute is apparent from the material on record with respect to the arrangement for use of the premises on rent. There are disputes, which are between the Operational Creditor and its Promoters and Corporate Debtor and its Promoters. The transactions between the Corporate Debtor and the Operational Creditor cannot be seen in isolation and it is required to go beyond the corporate veil. The disputes between all of them cannot be brushed aside. Therefore, it is concluded that there is a pre-existing dispute between the Corporate Debtor and the Operational Creditor. The Section 9 proceedings against the Corporate Debtor are set aside - Appeal allowed.

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• PMLA

• 2025 (1) TMI 1097
  Seeking direction to the Enforcement Department (ED) to produce all the records as regards purported inquiry being conducted under the Foreign Exchange Management Act, 1999 - challenge to search and seizure proceedings - quashing of the illegal act of freezing of the bank account of the petitioner company - reasons to believe - HELD THAT:- Though the jurisdiction under Article 226 of the Constitution of India is plenary, however, there are self imposed limitations which are required to be followed before exercising the power of judicial review. Ordinarily, interference at the stage of investigation carried out by the law enforcement agencies is not advisable because the law enforcement investigation techniques include coercive as well as covert techniques. The method of search and seizure is coercive as it is used to carry out the investigation/inquiry into the affairs if violation of a statutory provision is suspected. The search and seizure is a well known tool in the investigation which enables the law enforcement agencies to come to a conclusion. Though the Constitutional Courts are the sentinels of justice, however, this power is required to be exercised with due care and caution and interference at the stage of investigation is made in rare and exceptional cases. It is evident that while carrying out search, proper information was supplied to the petitioner. Moreover, the petitioner has not attached the ECIR. The petitioner has attached the search and seizure memos and freezing orders sent by the ED to the various banks. In the freezing orders, it has been stated that the Assistant Director, Unit-III (2) ED has reasons to believe from the documents in his possession that the proceeds of crime might have been diverted to the above said bank account maintained with that particular bank. Moreover, as already noticed, these orders were passed on 26.11.2024, whereas on the date when the arguments are heard, 30 days are yet to be completed. Section 5 (5) of the 2002 Act mandates the ED to file a complaint stating the facts of such attachment before the Adjudicating Authority within a period of 30 days. The Adjudicating Authority is entitled to adjudicate the matter on receipt of a complaint. Before the Adjudicating Authority all the stakeholders are entitled to participate and explain their position. The Adjudicating Authority is required to decide the matter in a time bound manner. Against the final order of confirmation of attachment, the appeal is maintainable before the Appellate Tribunal. Once the 2002 Act itself provides for sufficient safeguards, it is not found appropriate for this Court to interfere at this stage. Conclusion - The legal authority of the ED to conduct search and seizure operations and freeze bank accounts without prior notice affirmed. The petitioners are provided with the opportunity to present their case before the Adjudicating Authority under the 1999 Act and the 2002 Act. Petition disposed off.

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• 2025 (1) TMI 1096
  Money laundering - proceeds of crime - provisional attachment of properties - applicability of Section 5 (1) of the PMLA - issuance of SCN without application of mind - HELD THAT:- As there is nothing on record that appellants are in possession of any proceeds of crime. Moreover, there is nothing on record that such proceeds of crime are likely to be conceive, transfer or dealt with in any manner by the appellants. Appellant M/s Emaar Hills Township Pvt. Ltd. took the specific plea that even prior to the passing of PAO, the appellant was unable to transfer or deal with the properties in terms of the order dated 21.12.2010 passed by Hon ble Company Law Board Chennai Bench in CP No.608/2010 without the consent of the Conciliation Board. A perusal of this definition would show that the proceeds of crime includes the property derived or obtained directly or indirectly out of criminal activity, but that is not end of the definition of Proceeds of Crime. It can be for value of any such property . The aforesaid words used in the definition of Proceeds of Crime is to cover those properties which are not derived or obtained directly or indirectly out of the criminal activity, but attached for value equivalent to the Proceeds of Crime, if money acquired has been vanished. The Act of 2002 was enacted pursuant to the International Convention to address the offence of money laundering. If the definition of Proceeds of Crime is given restricted meaning to hold that it shall include only the properties obtained or derived directly or indirectly from the criminal activity then it would nullify the very objects of the enactment and the consequence of it would be serious. It would result to a situation where the accused would immediately try to vanish or siphon off the proceeds, so that the properties may not be attached. Any property of equivalent value can be attached when the proceeds directly or indirectly obtained out of the crime has been vanished or siphoned off. Here, the significance would be to the property acquired even prior to commission of crime. It is for the reason that any property acquired subsequent to the commission of crime would be directly or indirectly proceeds of crime and then, it would fall in the first limb of the definition of proceeds of crime. In the second limb, which refers to the value of any such property would indicate any other property which was acquired prior to the commission of crime and it would be attached only when the proceeds directly or indirectly obtained or derived out of the criminal activity is not available. Conclusion - The definition of proceeds of crime is wide enough to not only refer to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also of the value of any such property. Appeal dismissed.

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• Service Tax

• 2025 (1) TMI 1095
  Levy of service tax - supply of food and beverages at their counters provided in the cinema halls - whether the supply of food and beverage in the cinema complex falls within the definition of service and declared service in terms of Section 65B(44) and Section 66 E of the Act? - it was held by CESTAT that no service tax can be charged on the sale of food stuff in the PVR complex to the viewers of the movie, the provisions of Service Tax (Determination of Value) Rules, 2006 will not be applicable. HELD THAT:- There are no good reason to interfere with the impugned order dated 30.11.2023 passed by the Customs, Excise Service Tax Appellate Tribunal, New Delhi. Appeal dismissed.

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• 2025 (1) TMI 1094
  Eligibility for availment of CENVAT credit of tax paid on premium mandatorily required for functioning as banks under the supervision of Reserve Bank of India - HELD THAT:- The decision of the Larger Bench of the Tribunal in M/S. SOUTH INDIAN BANK VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX-CALICUT [ 2020 (6) TMI 278 - CESTAT BANGALORE - LB] had settled the issue of eligibility by holding that The insurance service provided by the Deposit Insurance Corporation to the banks is an input service and Cenvat credit of service tax paid for this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering output services . Conclusion - The eligibility for CENVAT credit of tax paid on such premium is beyond any controversy. Appeal allowed.

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• 2025 (1) TMI 1093
  Levy of interest and penalty - short payment of service tax - time limitation - suppression of facts. Levy of penalty u/s 78 of Finance Act, 1994 - HELD THAT:- From the record of the appeal that audit party pointed out short payment of service tax only on the basis of contracts entered with M/s. Gujarat Alkalies and Chemicals Limited and all the contracts/ work orders were available with them. The classification of the service in this case is also a subject matter of dispute, however, since the appellant has already deposited the payment of service tax, there are no reason to go into this issue. It is found that element which need to be present for invoking provisions of Section 78 are not present in this particular case and therefore, the impugned order-in-appeal as well as order-in-original are legally not sustainable in so far as invoking of Section 78 of the Finance Act, 1994 is concerned. Demand of interest under Section 75 of FA - HELD THAT:- The demand of interest under Section 75 vide show cause notice dated 07.08.2014 on the payment made in 2011 and for the demand which pertains to 2005-06 to 2007-08 is much beyond the normal period of limitation and extended time proviso - Hon ble Gujarat High Court decision in the case of GUJARAT NARMADA FERTILIZERS CO. LTD. VERSUS COMMR. OF C. EX., VADODARA [ 2010 (7) TMI 857 - CESTAT AHMEDABAD] has held that It is settled law that mis-declaration means not declaring something or making an incorrect declaration about something, which he is required to declare under the law and not declaring something which is not required to be declared under the law does not constitute mis-declaration. The impugned order-in-appeal is legally not sustainable - appeal allowed.

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• Central Excise

• 2025 (1) TMI 1092
  Failure to pay/reverse the amount of credit availed on input services used in the manufacture of exempted goods - HELD THAT:- This Tribunal finds that a division bench of this Tribunal, in the case of SIVARAJ SPINNING MILLS PVT. LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, MADURAI [ 2024 (8) TMI 990 - CESTAT CHENNAI ], in a similar fact situation of the appellant therein clearing cotton yarn on payment of duty under Notification No. 29/2004-CE dated 09.07.2004 and clearing cotton yarn at nil rate as per Notification No. 30/2004 CE dated 09.07.2004, simultaneously, after discussions, has rendered the decision in favour of the appellant therein holding the credit availed on input services is eligible and the contention of the Department that the credit has to be reversed is against the provisions of law. Conclusion - The goods exported under bond are exempt from the reversal of CENVAT credit and that CENVAT credit can be availed on input services used in the manufacture of such goods. The impugned order in appeal is hence set aside. The appeal is allowed.

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• CST, VAT & Sales Tax

• 2025 (1) TMI 1091
  Seeking condonation of delay of 179 days in filing the appeal - sufficient cause for delay or not - HELD THAT:- A perusal of the affidavit would indicate that the appellants, after passage of over four months, whereas in the order dated 22.5.2024 three months time was granted for complying with the direction, for the first time found it appropriate to seek opinion of the Chief Standing Counsel regarding filing of the appeal. As to what transpired after passing of the order dated 22.5.2024 till 11.9.2024, when the opinion was sought, no indication, whatsoever, has been made. The opinion was immediately tendered on 14.9.2024 by the office of the Chief Standing Counsel whereafter also the appeal has been filed on 13.12.2024, i.e., after three months from the date the opinion was tendered. The said period apparently has been consumed in seeking opinion first by the Secretary from the Special Secretary, Secondary Education and again by the Upper Secretary from the Special Secretary Secondary Education and once the permission was granted on 20.11.2024 also, about 25 days have been taken in filing the appeal. The affidavit, which has been filed, does not give sufficient cause for the delay of 179 days in filing the appeal inasmuch as there are large gaps in affidavit wherein the period spent between 22.5.2024 till 13.9.2024 has nowhere been explained/adverted to despite, as noticed hereinbefore, the fact that the Court had granted only three months for the compliance. The manner in which the direction including time line, as indicated by the Court, has been taken and thereafter also the proceedings of the matter at snail pace cannot be countenanced in a case, wherein the direction by the Court only pertains to reconsideration of the matter by the appellants. Conclusion - The appellants failed to demonstrate sufficient cause for the delay, noting the slow pace of proceedings and lack of adherence to the court s timeline. Thus, no case for condoning the delay in filing the appeal is made out. The application seeking condonation of delay is dismissed.

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• Indian Laws

• 2025 (1) TMI 1090
  Maintainability of petition - whether a writ petition under Article 226 of the Constitution would be maintainable against an order passed by the Micro and Small Enterprises Facilitation Council (MSEFC) in exercise of power under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006? - interplay between the MSMED Act and the Arbitration and Conciliation Act, 1996 (A C Act), especially regarding the roles of conciliation and arbitration. HELD THAT:- This is a case of statutory arbitration that is mandatory. It is possible to argue that it bars a party from moving the court of law under Section 9 of the Code of Civil Procedure, 1908. Section 18 also overrides the principle of party autonomy when they enter into an arbitration agreement which prescribes the procedure for the appointment of an arbitrator and conduct of arbitral proceedings. The statute further prescribes an undoubtedly high rate of interest three times the Reserve Bank rate of interest presently 6.5 per cent i.e. 19.5 per cent. The interest is compounded with monthly rests - Pre-deposit is a condition for hearing a decision on the objections to the award. The issue therefore which arises and needs consideration is whether there would be an absolute and complete bar to invoke writ jurisdiction under Article 226 of the Constitution even in exceptional and rare cases where fairness, equity and justice may warrant the exercise of writ jurisdiction. The access to High Courts by way of a writ petition under Article 226 of the Constitution of India, is not just a constitutional right but also a part of the basic structure. It is available to every citizen whenever there is a violation of their constitutional rights or even statutory rights. This is an inalienable right and the rule of availability of alternative remedy is not an omnibus rule of exclusion of the writ jurisdiction, but a principle applied by the High Courts as a form of judicial restraint and refrain in exercising the jurisdiction. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and the same is not limited by any provision of the Constitution and cannot be restricted or circumscribed by a statute. It is deemed appropriate to refer the following questions raised in the present appeal to a larger Bench of five Judges, namely: (i) Whether the ratio in M/s India Glycols Limited (supra) that a writ petition could never be entertained against any order/award of the MSEFC, completely bars or prohibits maintainability of the writ petition before the High Court? (ii) If the bar/prohibition is not absolute, when and under what circumstances will the principle/restriction of adequate alternative remedy not apply? (iii) Whether the members of MSEFC who undertake conciliation proceedings, upon failure, can themselves act as arbitrators of the arbitral tribunal in terms of Section 18 of the MSMED Act read with Section 80 of the A C Act? The first and second question will subsume the question of when and in what situation a writ petition can be entertained against an order/award passed by MSEFC acting as an arbitral tribunal or conciliator - The Registry is directed to place the papers before the Chief Justice so that an appropriate decision can be taken on the administrative side for the constitution of a larger Bench in the present case. Conclusion - The writ jurisdiction is discretionary and not barred by the existence of alternative statutory remedies. A final determination is not provided but instead the significant questions are raised to a larger bench for comprehensive resolution.

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• 2025 (1) TMI 1089
  Dishonour of Cheque - power of the trial Court to proceed with the trial for an offence punishable under Section 138 of the Negotiable Instruments Act in absence of the accused - when neither accused nor his advocate appeared during evidence recording stage, whether trial Court can a) proceed further, b) dispense statement under section 313 of the Criminal Procedure Code and c) convict the accused? HELD THAT:- It is very well true that this view does not fit into the traditional view of mandatory recording of the statement and even giving the benefit to the accused about certain lacunaes in recording Section 313 statement . Recently, the Hon ble Supreme Court in case of P. MOHANRAJ ORS. VERSUS M/S. SHAH BROTHERS ISPAT PVT. LTD. [ 2021 (3) TMI 94 - SUPREME COURT ] has dealt with nature of cases under Section 138 being quasi-criminal. The Hon ble Supreme Court observed Section 138 proceeding can be said to be a civil sheep in a criminal wolf s clothing - The issue involved in that case was whether the proceeding under Section 138 read with Section 141 of the Negotiable Instruments Act are covered by the moratorium provisions under Sections 14 of the Insolvency and Bankruptcy Code. That is why there was an occasion for the Hon ble Supreme Court to consider the nature of proceeding under Chapter XVII of the Negotiable Instruments Act. The ingredients of Section 138, 141, 142, 143-A, 148 were considered. If the proceeding under Section 138 of the Negotiable Instruments Act are quasi-criminal in nature, there is reason to believe that one of attribute of criminal trial about mandatory recording of statement under Section 313 of the Criminal Procedure Code is not applicable. So in given set of facts narrated hereinabove, the accused cannot make complaint about causing prejudice if evidence is adduced in his absence and he cannot make complaint of non recording of the statement under Section 313 of the Criminal Procedure Code if they have remained absent without justification. In a given case and after ascertaining certain factors, the Magistrate is justified in proceeding further in absence of accused and even dispense his statement. It cannot be said that there is illegality in the findings recorded by the trial magistrate and confirmed by the Court of the Additional Sessions Judge. There is no merit in both these revisions applications. The order of conviction and the sentence passed by the Court of Metropolitan Magistrate for the offence punishable under Section 138 of the Negotiable Instruments Act is confirmed - Both the revision applications are dismissed.

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• 2025 (1) TMI 1088
  Enhancement of the rent/licence fee from Rs. 20/- to Rs. 50/- per day for the petitioner, a fruit vendor - enhancement is discriminatory compared to other vendors in the locality or not - HELD THAT:- This court is not in agreement with the submissions advanced by the learned counsel for the respondents for the reasons that when the petitioner obtained the permission for selling of fruit vend at the space in question, the rent was being charged at Rs. 20/- per day, since January, 2016. The same has been enhanced to Rs. 50/- per day within a span of one year and it is this enhancement which the petitioner s claim to be discriminatory as the same amounts to the petitioner s paying an amount of Rs. 1500/- per month whereas others are being levied lesser rent/licence fee. The fact that the petitioner is a fruit vendor is not a relevant consideration to subject the petitioner to such discriminatory treatment. All other vendors in the same locality, as per the public notice dated 27.03.2017 are vendors of similar consumable items with reference to whom he is claiming discriminatory treatment - The Court finds the levy to be shockingly disproportionate and discriminatory. Such arbitrary demand is thus found to be unsustainable. The levy of Rs. 50/- per day is clearly unsustainable since other vendors have been charged much less than Rs. 1500/- per month, i.e. Rs. 1000/- per month or Rs. 800/- per month. In view of the shocking disparity as evident from the public notice dated 27.03.2017, this Court finds that the determination of rent for the petitioner at Rs. 50/- per day is clearly unsustainable. This Court directs the respondent no.2 to take a final decision on the petitioner s claim as contained in annexure P-7 to the writ petition taking into consideration the observations made. Conclusion - The rent enhancement was discriminatory and arbitrary. The municipal authority is directed to reconsider the petitioner s claim for parity and determine rent based on relevant parameters. Petition disposed off.

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