TMI Tax Updates - e-Newsletter
January 29, 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. Types of Trademark: How to Safeguard Your Logos and Slogans

   By: Ishita Ramani

2. Practice support - seriously contesting condonation of delay petition (COD) filed by appellant to win the case by respondent.

   By: DEVKUMAR KOTHARI and CA UMA KOTHARI

3. Geopolitical issues and its' impact on International Trade (In context with Advance Technologies, Rare Earth Materials and High End Goods).

   By: YAGAY andSUN

4. GST on Jewellery: Comprehensive Guide

   By: Tushar Malik

5. COMPLIANCE OF SECTION 169 OF TAMIL NADU GST ACT, 2017 FOR SERVICE OF NOTICES

   By: DR.MARIAPPAN GOVINDARAJAN

6. Export of Insecticides, Herbicides, Weedicides, And Pesticides from India.

   By: YAGAY andSUN

7. Renewal/Updation of Importer Exporter Code (IEC)

   By: YAGAY andSUN

8. Export of Imitation Jewellery

   By: YAGAY andSUN

9. Import of Fruits, Vegetables, and Exotic Fruits into India

   By: YAGAY andSUN

News

1. Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Tamil Nadu and Himachal Pradesh

2. Assam CM Sarma hints at Centre bringing 125th Constitution Amendment in Budget Session

3. In letter to Sitharaman, NGO seeks prioritising elderly welfare in Union Budget

4. Budget Session begins on Jan 31 with President's address

5. CCI approves the proposed acquisition of up to 72.64% shareholding in ITD Cementation India Limited by Renew Exim DMCC

6. India-Sierra Leone Trade Ties: Strategic Partnership Opportunities in Pharmaceuticals, IT, and Industrial Development Explored

7. To reimagine, reinvent, and reposition ISI as a globally recognized institution: Indian Statistical Institute poised to embrace the transformative vision as it approaches its centenary in 2031

8. India-Oman Joint Commission Meeting held; leaders focus on enhancing bilateral cooperation in trade, investment, technology, food security and renewable energy

9. DPIIT and JKEDI sign MoU to strengthen startup ecosystem in Jammu & Kashmir

10. Stock markets snap 2-day falling streak, banking shares shine on RBI liquidity move

11. Can't accept export of raw materials, value addition must happen in India: PM Modi

12. DGFT Launches Enhanced eCoO 2.0 System with Provisions for Back-to-Back Certificates of Origin

13. RDCL, a Residential Mortgage-Backed Securitisation (RMBS) Company set up by NHB receives Certificate of Registration to commence Operations, from RBI

14. Scott Bessent confirmed as treasury secretary, giving him key role in extending Trump's tax cuts

Notifications

Income Tax

1. 11/2025 - dated 27-1-2025 - IT

Central Government approves Shri Chaitanya Health and Care Trust, for its unit ‘Bhaktivedanta Hospital & Research Institute’, Thane, Maharashtra, under the category of ‘University, college or other institution’ for the purposes of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961

2. 10/2025 - dated 27-1-2025 - IT

Income-tax (Second Amendment) Rules, 2025

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MRD/TPD/CIR/P/2025/08 - dated 28-1-2025

Development of Web-based portal: iSPOT(Integrated SEBI Portal for Technical glitches) for reporting of technical glitches.

2. SEBI/HO/MRD-PoD2/CIR/P/2024/00181 - dated 30-12-2024

Master Circular for Stock Exchanges and Clearing Corporations

GST

3. 244/01/2025 - dated 28-1-2025

Regularizing payment of GST on co-insurance premium apportioned by the lead insurer to the co-insurer and on ceding /re-insurance commission deducted from the reinsurance premium paid by the insurer to the reinsurer

4. 245/02/2025 - dated 28-1-2025

Clarifications regarding applicability of GST on certain services

Customs

5. PUBLIC NOTICE No. 09 / 2025 - dated 23-1-2025

Enabling Voluntary Payment electronically on ICEGATE e-Payment Platform- reg.

Highlights / Catch Notes

GST

• High Court Denies Bail in 10.67 Crore GST Fraud Case Involving Fake Firms and Fabricated Bills u/s 132.

  Case-Laws - HC : HC denied bail in GST fraud case where petitioner allegedly availed fraudulent Input Tax Credit worth 10.67 crores through fictitious firms. Evidence included seized fake rubber stamps, fabricated E-bills, and transport company testimony confirming route discrepancies. Court distinguished this case from Prabir Purkayastha and Pankaj Bansal precedents regarding arrest procedures under PMLA, noting different statutory requirements under GST Act. Following Y.S. Jaganmohan Reddy principle that economic offenses warrant stringent treatment, HC found prima facie evidence of deliberate fraud through sham bills and non-existent firms sufficient to deny bail. Court emphasized gravity of economic offenses affecting national economic fabric.
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• High Court: UP GST Revision Allowed Without Exhausting Appeals, Section 108 Only Requires Appeal Filing Not Completion.

  Case-Laws - HC : HC quashed the revisional order regarding maintainability u/s 108 of U.P. GST Act, 2017. The court clarified that Section 108(2) language "order has been subject to appeal" means an appeal must have been actually filed, not that appeal must be exhausted before seeking revision. The Revisional Authority's approach was contradictory - discussing merits while questioning maintainability. The order failed either as a merit-based decision (inadequate consideration of facts) or as a maintainability ruling (misinterpreting Section 108). The provision does not require exhaustion of appeal before revision petition. Matter remanded for fresh consideration of revision petition on merits.
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• High Court Rules GST Not Applicable When Transferring Leasehold Rights in Property Between Lessee and Third-Party Assignee.

  Case-Laws - HC : HC determined GST is not applicable on assignment of leasehold rights in immovable property. Following precedent from Gujarat Chamber of Commerce case, the court held that transfer of leasehold rights constitutes assignment of benefits arising from immovable property when a lessee transfers rights to third-party assignee. The impugned show cause notice demanding GST on such transfer was quashed, as assignment of leasehold rights falls outside GST purview. The court recognized this as settled law (res integra) based on established jurisprudence. Original lessee's transfer to assignee who becomes new lessee does not attract GST liability under GST Act, 2017.
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• Court Rules Personal Hearing Required Before Denying GST Transitional Credit Claims u/s 140(5) of CGST Act.

  Case-Laws - HC : HC determined that authorities erred in denying transitional ITC claim under CGST Act s.140(5) without providing personal hearing. While petitioner incorrectly filed Form TRAN-1 by entering service tax credit details in column 5(a) instead of 7(a) for invoices received post June 30, 2017, principles of natural justice required opportunity to demonstrate compliance with statutory requirements. Authorities must allow petitioner to prove receipt of amounts after June 30, 2017, recorded in books within 30 days. Matter remanded for fresh consideration with directions to provide personal hearing and issue reasoned order on petitioner's transitional ITC claim. Petition allowed through remand.
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• High Court Dismisses Input Tax Credit Refund Claim Filed After Two-Year Limitation Period u/s 54.

  Case-Laws - HC : HC found the refund claim for unutilized input tax credit time-barred u/s 54. The court interpreted Section 54(1) and 54(3) to establish that while refund claims can be initiated from the end of the relevant tax period, there exists a two-year limitation period from the relevant date. The petitioner's application filed on 21.03.2024 exceeded the statutory deadline of 09.03.2024. The court emphasized that Section 54(3) determines the starting point for refund claims, while Section 54(1) sets the outer time limit of two years. Given the clear statutory framework and the petitioner's failure to file within prescribed time limits, the petition was dismissed.
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• High Court Rules Cross-Utilization of IGST Input Tax Credit for CGST and SGST Payments Is Legal and Penalty-Free.

  Case-Laws - HC : HC determined that utilizing Input Tax Credit (ITC) available in IGST under CGST and SGST heads does not constitute improper availment warranting penalties. The electronic credit ledger functions as a wallet with separate compartments for IGST, CGST, and SGST. Despite petitioner's pending appeal, HC exercised jurisdiction under Article 226 to set aside the assessment order, finding that the method of ITC utilization was legitimate. The Court directed proper officer to reconsider the assessment, emphasizing that cross-utilization between different tax heads within the electronic credit ledger is permissible and does not attract penalties. Petition allowed with assessment order set aside for reconsideration.
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• Court Orders Release: CGST Act Section 69 Does Not Override CrPC 41/41A Safeguards in Arrest Procedures.

  Case-Laws - DSC : DSC examined judicial remand application under Sec 167 CrPC and Sec 187 BNSS Act. While arrest grounds were properly documented with accused's acknowledgment, the court found procedural deficiencies. Despite prosecution's argument that Sec 69 CGST Act exempted compliance with Sec 41/41A CrPC requirements for arrests, the court relied on SC precedents (Arnesh Kumar and Gujarat State cases) mandating these safeguards for offenses punishable up to 7 years. The court ordered accused's release, finding arrest illegal due to non-compliance with Sec 41/41A CrPC and Sec 35 BNSS Act procedures. Prosecution retained liberty to re-arrest following proper procedures under relevant sections of CrPC, BNSS Act, and CGST Act.
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Income Tax

• Income Tax Reassessment Notice u/s 147 Cannot Be Issued After Assessee's Death to Legal Representatives.

  Case-Laws - HC : HC held that reassessment proceedings under s147 initiated against a deceased assessee through notice issued post-death cannot be continued against legal representatives (LRs). While ongoing proceedings initiated during an assessee's lifetime may continue against LRs under s159(2)(b), new proceedings cannot commence after death. The court rejected Revenue's request for liberty to initiate fresh proceedings against LRs, noting no statutory obligation exists for LRs to inform Revenue about assessee's death. Additionally, if the limitation period for proceedings expired against the deceased, no action can be taken against LRs. The Income Tax Act 1961 contains no provision to exclude time spent during proceedings against deceased when calculating limitation period for LR proceedings. Appeal dismissed.
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• Bank's NRI Deposit Expenses and Excess Pension Contributions Held Deductible u/s 36(1)(iv), Following ANZ Grindlays Precedent.

  Case-Laws - HC : HC determined two key issues regarding NRI deposit mobilization expenses and pension fund contributions. Expenses incurred for soliciting NRI deposits were held deductible as they were exclusively for Indian business operations, following precedent set in ANZ Grindlays. On pension fund contributions exceeding Section 36(1)(iv) limits, HC distinguished between initial qualifying contributions and additional employer obligations, adopting Exide Industries rationale that statutory limits apply only to regular annual contributions, not supplementary payments meeting broader obligations. Additional contributions beyond prescribed limits remain allowable business expenses. Revenue's appeal dismissed, affirming tribunal's findings in assessee's favor on both counts.
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• Court Rules No Interest Under 234B for Retrospective Book Profit Additions in MAT Cases Following Previous Bench Decisions.

  Case-Laws - HC : HC ruled against levying interest u/s 234B for additions made to book profit under MAT provisions. Court emphasized that multiple Coordinate Benches previously established that interest cannot be charged when retrospective amendments to Section 115JB's explanation (via Finance Act 2008) result in book profit adjustments. Court criticized revenue authorities for failing to disclose binding precedents from previous cases involving similar issues. While acknowledging taxation matters exclude equity considerations, HC stressed revenue's obligation for transparency in legal proceedings. Appeal was dismissed, upholding that retrospective inclusion of items in book profit computation does not warrant Section 234B interest charges.
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• Court Denies Late Tax Return Filing Despite Additional TDS Credit, Rules Section 148 Limitation Period Cannot Be Extended.

  Case-Laws - HC : HC dismissed petition seeking permission to file revised return beyond limitation period. Petitioner claimed additional TDS credit of Rs. 1,83,770 (difference between Rs. 2,69,338 and Rs. 85,568) for AY 2012-13 due to subsequent crediting of TDS on works contract by Government employer. Court held that delay condonation under CBDT Circular not applicable as limitation period u/s 148 read with Section 151 of Income Tax Act had expired. TDS credited in subsequent year can only be utilized for succeeding assessment year. Attempt to enhance taxable income through revised return for additional refund was rejected as time-barred.
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• Credit Card Expenses Disallowed u/s 37(1) Cannot Be Taxed Again as Director's Perquisite u/s 2(24)(iv.

  Case-Laws - AT : ITAT ruled against double taxation of personal credit card expenses initially disallowed under s.37(1) in company's returns. Where company had already acknowledged personal nature of director's credit card payments and voluntarily disallowed them while computing business income, these amounts cannot be taxed again as perquisite under s.2(24)(iv) in director's hands. The director received no additional benefit since company had already borne tax liability on disallowed expenses. AO's addition was deemed unjustified as it constituted double taxation. Earlier precedents cited by CIT(A) were distinguished, as those cases involved companies that had not disallowed such expenses under s.37(1). Appeal resolved in assessee-director's favor.
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• Tax Tribunal: Gains from Gifted Diamonds Are Long-Term Capital Gains, Holding Period Counts from Gift Receipt Date.

  Case-Laws - AT : ITAT ruled in favor of taxpayer regarding treatment of gains from diamond sales. Assessee received rough diamonds as gift from grandfather in AY 1994-95, which were later processed and sold. The Tribunal determined the period of holding should be calculated from gift receipt date, qualifying the assets as long-term capital assets. Despite conflicting CBDT circulars, ITAT held that statutory provisions prevail over administrative circulars. The gains were properly characterized as Long Term Capital Gains (LTCG) u/s 2(42A) of Income Tax Act, rejecting revenue's attempt to treat proceeds as unexplained cash credits u/s 68. The documented chain of possession, processing, and sale established legitimate transaction basis, negating revenue's unexplained credit allegations.
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• Tax Tribunal Allows Interest Expense Claims When Business Advances Were Interest-Free Despite Having Interest-Bearing Loans.

  Case-Laws - AT : ITAT upheld deletion of interest expense disallowance where assessee provided interest-free advances while having interest-bearing loans. The advances were given with commercial expediency for business ventures with profit expectations. Tribunal noted sufficient interest-free funds were available with assessee exceeding outstanding amounts. Regarding provision for expenses, ITAT confirmed that under mercantile accounting system, provision for known expenses is mandatory even without actual payment. The scientific basis for year-end provisions was accepted as routine practice following accounting principles. Previous years' treatment of both interest-free advances and provision for expenses supported assessee's position. Revenue's appeal dismissed, ruling in favor of assessee on both grounds of commercial expediency and accounting methodology.
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• ITAT: Seized Diary Entries Alone Not Sufficient Evidence u/s 153A to Establish Tax Liability Against Company.

  Case-Laws - AT : ITAT ruled that entries discovered in a seized diary from RKY's premises were insufficient to establish liability against the assessee company u/s 153A. The Revenue failed to demonstrate a conclusive link between the diary entries and the assessee company's transactions. The tribunal emphasized that statutory presumption was inapplicable, and the burden of proof remained with Revenue to establish transaction authenticity. The simultaneous addition of these entries to another entity's assessment further undermined Revenue's position. ITAT held in favor of the assessee on dual grounds: lack of jurisdiction u/s 153A absent incriminating evidence, and failure to substantiate that entries exclusively pertained to the assessee company.
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• Foreign Company's Distance Learning Centers Not Taxable as DAPE; IATA Clearing House Fees Exempt Under Mutuality Principle.

  Case-Laws - AT : ITAT ruled on two key taxation matters involving cross-border services. Regarding distance learning courses, the Tribunal determined that Authorized Training Centers (ATCs) operated independently on a principal-to-principal basis rather than as Dependent Agent Permanent Establishment (DAPE) of the foreign assessee. Following precedent from AY 2012-13, the addition made by treating ATCs as DAPE was deleted. On the second issue concerning IATA Clearing House (ICH) facility fees and data processing charges, ITAT held these were not taxable in India based on the principle of mutuality. The Tribunal found data processing charges for iiNet and weblink services were similar to ICH facility fees, and therefore not attributable as income to Indian branches.
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• Tax Tribunal Orders Fresh Review of TDS on Foreign Payments u/s 195, Directs Analysis of DTAA Benefits.

  Case-Laws - AT : ITAT examined TDS obligations u/s 195 for payments to foreign associates. Assessee contended payments qualified as professional services or business profits under respective DTAAs. AO had treated entire amount as fees for technical services without analyzing applicable DTAA provisions. ITAT directed AO to re-examine taxability considering specific DTAA provisions with respective countries, particularly clauses related to independent personal services including legal services. AO instructed to provide adequate hearing opportunity and allow submission of supporting documentation. Appeal allowed for statistical purposes, with matter remanded for fresh consideration of DTAA benefits.
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• Tax Court Upholds Section 68 Additions After Assessee Failed to Prove Creditor Creditworthiness Despite Bank Transaction Records.

  Case-Laws - AT : ITAT restored additions u/s 68 relating to 12 creditors where assessee failed to establish creditworthiness despite transactions through banking channels. Mere provision of PAN details and bank transactions deemed insufficient to discharge burden of proof. Banking channel transactions do not automatically validate creditworthiness u/s 68. Matter remanded to AO for fresh consideration with direction to assessee to substantiate creditworthiness of loan creditors. Restrictions u/s 269SS regarding cash loans remain applicable regardless of transaction mode. Appeal allowed for statistical purposes with opportunity for assessee to furnish additional evidence before AO.
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• Foreign Company's Transactions with Indian Permanent Establishment Subject to Transfer Pricing Rules u/s 92B and DTAA Article 7(2.

  Case-Laws - AT : Transaction between foreign enterprise and its Indian Permanent Establishment (PE) falls within transfer pricing provisions u/s 92B. ITAT held PE must be treated as distinct and separate enterprise per Article 7(2) of India-China DTAA. Transactions between foreign HO and Indian PE qualify as international transactions since both parties are non-residents, satisfying Section 92B(1) requirement. PE's functional independence is supported by OECD Model Tax Convention commentary. The underlying philosophy of transfer pricing provisions and Article 7(2) align in analyzing third-party behavior under uncontrolled conditions. ITAT rejected argument of conflict between Article 9 of DTAA and domestic transfer pricing provisions, directing ALP adjustment application to HO-PE transactions. Matter remanded to Division Bench for implementation.
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• Tax Tribunal Orders Fresh Verification of NRI's Residential Status u/s 6(1) After 132-Day Stay Evidence.

  Case-Laws - AT : ITAT examined residential status dispute of NRI taxpayer under Income Tax Act section 6(1) and applicable DTAA provisions. Appellant demonstrated presence in India for 132 days during relevant assessment year, below the 182-day threshold required for resident status. Supporting documentation included foreign employment records and visit passes. ITAT remanded matter to Assessing Officer for detailed verification of appellant's Singapore residential status and Indian non-residential position, specifically directing examination under Explanation 1 to section 6(1)(c). Appeal grounds 1-3 were allowed for statistical purposes pending final determination of residential status by AO based on documentary evidence.
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• ITAT Overturns Section 69A Addition: Demonetization Cash Deposits Valid Due to Documented Sales and VAT-Verified Business Records.

  Case-Laws - AT : ITAT reversed addition made u/s 69A regarding cash deposits during demonetization period. Assessee's regular books of accounts showed recorded sales proceeds, validated by VAT assessment authorities. Sufficient stock inventory supported legitimate sales transactions during the period. No evidence of fictitious purchases or sales to justify cash deposits was established by AO. CIT(A)'s confirmation of addition deemed legally unsustainable. Consequently, application of higher tax rate u/s 115BBE rejected. The tribunal found no basis for treating bank deposits as unexplained money u/s 69A, given proper documentation and business authenticity. Addition deleted in favor of assessee.
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• Settlement Commission's Acceptance of Assessee's Declaration Valid as No Evidence Shows Undisclosed Income u/s 245D(4).

  Case-Laws - HC : HC upheld Settlement Commission's order accepting assessee's settlement amount under s.245D(4). Commission determined assessee lacked direct involvement in land transactions generating undisclosed income. Despite documents found in third party's mobile phone, no additional disclosure required from assessee absent concrete evidence. Commission's acceptance of assessee's full disclosure declaration deemed valid, as no contrary evidence presented. Court found no jurisdictional error warranting interference under Art.227. Settlement Commission's factual findings regarding third party's responsibility to explain mobile documents upheld, rejecting presumptive additions without supporting evidence. Petition dismissed, maintaining Settlement Commission's original determination.
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• High Court Blocks Revenue's Attempt to Reopen Tax Assessment u/s 147 Due to Lack of Undisclosed Material Facts.

  Case-Laws - HC : HC dismissed Revenue's appeal challenging reopening of assessment u/s 147. The court found no valid grounds for reassessment as there was no failure by assessee to disclose material facts fully and truly during original assessment. The reopening attempt by successor AO on previously decided issues amounted to improper exercise of revisionary powers. The court held that mere change of opinion cannot justify reopening beyond 4-year limitation period without new material facts. The Revenue's attempt to reopen assessment based on different interpretation of same facts was deemed invalid, as original assessment decision had considered and accepted assessee's claims. Decision affirmed CIT(A)'s order quashing the reassessment notice.
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• Taxpayer Gets LTCG Exemption u/s 54F Despite Builder's Delay in Property Possession After Full Payment Made.

  Case-Laws - AT : ITAT upheld taxpayer's claim for LTCG deduction u/s 54F despite delayed possession of new property. While assessee made full payment exceeding capital gains within prescribed time, builder failed to deliver possession within statutory period. ITAT emphasized that beneficial provisions like Section 54/54F should be interpreted liberally when taxpayer fulfills obligations but faces delays beyond their control. Tribunal noted widespread construction delays by builders affecting numerous taxpayers and ruled substantial payment and domain over property sufficient for exemption, even without formal possession or registration within deadline. Following SC precedent in Sanjeev Lal case, ITAT concluded adverse inference cannot be drawn against assessee who demonstrated compliance with statutory conditions despite builder's default.
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Customs

• High Court Upholds CESTAT Ruling Against Customs Broker License Cancellation, Finding Permanent Revocation Too Harsh Under CBLR 2013.

  Case-Laws - HC : HC upheld CESTAT's decision against cancellation of customs broker license. While KYC documents were submitted, the Department alleged unexplained procurement methods and business irregularities involving an exporter's misused IEC code. Court determined permanent license revocation was disproportionate, noting respondent had already faced significant consequences through temporary suspension. No substantial violation of Regulation 17(9) of Customs Brokers Licensing Regulations, 2013 was established in the original order. Finding no substantial question of law, HC dismissed the appeal, maintaining CESTAT's ruling that preserved broker's operating rights.
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• High Court Overturns CESTAT Dismissal: Customs Appeal Delay Condonable When Representation Was Pending Before Third Respondent.

  Case-Laws - HC : HC ruled in favor of appellant regarding condonation of delay in customs appeal. While Commissioner of Customs (Appeals) lacked authority to condone delay beyond 30 days, CESTAT erred in dismissing the subsequent appeal filed within statutory limits. Court found compelling reasons for delay, noting appellant's pending representation before third respondent on 22.08.2007 likely caused wait before filing appeal. CESTAT's cursory dismissal failed to consider relevant parameters. Questions of law on limitation resolved favorably, with exemption issue covered by previous CESTAT Bangalore ruling supporting appellant's position. Appeal succeeded with costs throughout.
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DGFT

• DGFT Mandates Online Non-Preferential Certificate of Origin Applications Through Trade Portal with New Fee Structure and Digital Documentation.

  Circulars : DGFT amended Chapter 2 of Handbook of Procedures 2023 implementing electronic Certificate of Origin system. Key changes include mandatory online submission of Non-Preferential CoO applications through trade.gov.in portal, revised fee structure of Rs. 200 per certificate, and introduction of online correction requests via in-lieu CoO applications. New provisions allow agencies to issue Back-to-Back Certificates for non-Indian origin goods in re-export, trans-shipment, and merchanting trade, requiring explicit documentation of origin country. Previous manual submission requirements were replaced with digital documentation, and EIC's role in printing blank certificates was removed. Changes align with digital transformation of trade documentation processes.
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IBC

• NCLAT Rules Subsidiary Company Assets Cannot Be Counted as Corporate Debtor's Property During Insolvency Under IBC Section 14.

  Case-Laws - AT : NCLAT determined that assets of a subsidiary company cannot be treated as assets of the corporate debtor (holding company) during insolvency proceedings. The tribunal set aside the Adjudicating Authority's directive for fresh valuation of The Learning Internet Inc. shares, ruling it exceeded jurisdictional scope. The corporate guarantor's claim of undervaluation should have been addressed before Singapore's High Court under relevant insolvency laws, not NCLT. Historic valuation reports from 2008 and 2014-2021 were deemed irrelevant to current proceedings. The tribunal emphasized that moratorium under IBC applies exclusively to corporate debtor's assets, not subsidiary holdings. Appeal allowed, impugned order set aside.
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PMLA

• Money Laundering Case: Court Grants Bail u/s 436A CrPC After 3.8 Years Without Trial Commencement.

  Case-Laws - HC : HC granted bail to the applicant in a money laundering case after 3 years and 10 months of incarceration, applying Section 436A of CrPC which prevails over Section 45 of PMLA. The court determined that since the applicant had served more than half of the maximum possible 7-year sentence and trial had not commenced, continued detention would infringe Article 21 rights. Bail was granted on Rs. 10,00,000/- bond with conditions including bi-monthly reporting to ED Mumbai, restricted entry to Pune district except for trial purposes, passport surrender, and regular trial attendance. The court emphasized that while PMLA imposes strict bail conditions, prolonged pre-trial detention without trial commencement warrants bail consideration to protect constitutional rights.
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• Appellate Tribunal Upholds Property Attachments in Coal Transportation Money Laundering Case Under PMLA Section 5.

  Case-Laws - AT : AT dismissed appeals challenging provisional attachment orders in a money laundering case involving large-scale extortion in coal transportation. Appellants failed to prove legitimate sources for acquiring 52 properties through alleged layering of proceeds of crime. Claims of being bona fide purchasers were rejected due to inability to demonstrate valid cash sources. Court upheld that properties acquired before FIR registration could be attached as criminal activities predated FIR. Arguments regarding absence of predicate offense were dismissed, citing established Supreme Court precedents. The provisional attachment was confirmed as appellants were either accused or in possession of proceeds of crime, with sufficient reasons provided in show cause notices.
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Service Tax

• Service Tax Not Applicable on Group Company Cost-Sharing Arrangements Without Service Element, CESTAT Rules in 2008 Agreement.

  Case-Laws - AT : CESTAT ruled that service tax demand under Business Support Service category was unsustainable for cost-sharing arrangements among group companies, as no service element existed per the agreement dated 01-04-2008. The tribunal rejected service tax demand based on differential values between Profit & Loss Account and ST-3 returns, noting insufficient adjudication findings. The extended period limitation for CENVAT credit recovery was invalidated due to absence of suppression or willful misstatement allegations. Following SC precedent on cost-sharing arrangements, CESTAT held that mere expense distribution among group entities doesn't constitute taxable service. The impugned order was set aside and appeal allowed, establishing that cost-sharing without service component isn't subject to service tax levy.
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• Supreme Court Rules SVLDRS Case Falls Under Arrears Category, Not Litigation, After Finding No Pre-June 2019 Appeal Against Tax Demand.

  Case-Laws - HC : HC determined petitioner's case falls under "amount in arrears" category under SVLDRS, not "litigation" category, as no appeal was filed before 30.06.2019 against Order-in-original demanding Rs. 32,27,856/-. Designated committee's mechanical issuance of Form SVLDRS-3 without considering petitioner's reply demonstrated non-application of mind. Petitioner, having already deposited 60% of tax arrears (Rs. 31,32,551.60), is entitled to relief u/s 124 of SVLDRS. Court set aside committee's demand for higher amount and allowed petition, affirming petitioner's eligibility for reduced tax liability under scheme's provisions for arrears category.
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• Town Panchayat Service Tax Case Remanded: CESTAT Orders Fresh Review of Municipal Services' Sovereign Function Status.

  Case-Laws - AT : CESTAT remanded a service tax dispute concerning a Town Panchayat's renting of immovable property. The case centered on whether municipal services qualified for tax exemption under sovereign functions. Following precedents from Madras HC in Cuddalore Municipality and St. Thomas Mount cases, the Tribunal determined that a detailed examination was necessary to establish if the services constituted sovereign functions. The matter was remanded to the Adjudicating Authority for fresh consideration, specifically to analyze the nature of services provided and their classification under sovereign functions. The extended period of limitation and local authority status were key elements requiring reassessment.
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• Development Authority's Property Rental and Ad Space Services Remain Taxable Despite Sovereign Function Status, Rules CESTAT.

  Case-Laws - AT : A statutory development authority challenged service tax demands on various services provided by them. CESTAT held that while the authority performs sovereign functions for the West Bengal government, certain commercial activities like property rental and advertising space leasing remain taxable. The tribunal found that licensing fees and development charges, being sovereign functions, were exempt. However, the tax quantification for 2009-12 was deemed legally unsustainable due to improper documentation and calculation methods. The tribunal also ruled the extended period demand time-barred, noting the authority's statutory nature and transparent financial records indicated no deliberate tax evasion. The appeal was allowed on merits and time limitation grounds, invalidating the confirmed demand of Rs. 2,95,48,401.
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Central Excise

• CESTAT Rules No Interest Due on Pre-Deposit Refund u/s 35F When Processed Within Three Months of Order.

  Case-Laws - AT : CESTAT denied interest claim on pre-deposit refund made u/s 35F of Central Excise Act. Pre-deposit from 2012 was refunded in 2018 post-favorable appeal outcome. While appellant sought interest from deposit date, CESTAT held that u/s 35FF, interest is payable only after three months from appellate order communication. Despite appellant's reliance on Sandvik Asia precedent, CESTAT distinguished current case as specific statutory provisions now govern interest payment on pre-deposits. Since refund was processed within prescribed timeframe, no interest liability arose. Tribunal emphasized that post-2014 Finance Act amendments, pre-deposits are governed by provisions existing at time of deposit. Appeal dismissed with no interest awarded on refunded amount.
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• Tribunal Rules Transmission Tower Fabrication Not Manufacturing, Orders Refund with Interest Under Central Excise Act.

  Case-Laws - AT : CESTAT held that fabrication of transmission towers did not constitute manufacture, making excise duty collection illegal under Article 265. The tribunal rejected the department's time limitation argument u/s 11B of Central Excise Act, ruling that time limits do not apply when tax was not payable. The endorsement "under protest" on gate passes was deemed sufficient despite non-compliance with Rule 233B formalities. The appellant was granted refund with 12% interest per annum from the date of initial refund rejection, as retention of revenue deposit was held unconstitutional. The tribunal emphasized that procedural technicalities cannot override substantive rights when tax is collected without legal authority.
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Case Laws:

• GST

• 2025 (1) TMI 1312
  Waiver of penalty - it was held by CESTAT that It s a case of acquiescence on the part of the petitioners, whereby they have accepted the orders passed by the Authorities and have requested for making payment through monthly instalments. At that relevant time, they did not request for waiver of penalty, and it is only later on, that they are claiming waiver of penalty which cannot be reopened now, after the payment has already been made. HELD THAT:- There are no reason to interfere with the impugned order passed by the High Court. The Special Leave Petition is, accordingly, dismissed.

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• 2025 (1) TMI 1311
  Imposition of a penalty under Section 129 of the Act - petitioner had produced the e-way bill before the passing of the seizure order - intent to evade tax present or not - HELD THAT:- Once the e-way bill was produced before passing of the seizure order, it could not be said that there was any contravention of the provisions of the Act being made by the petitioner. This Court on various occasions have held that if the requisite documents, which were not accompanying with the goods, were produced before passing the seizure order and if there were no intention to avoid the legitimate tax, the levy of penalty was not justified. This Court in the case of M/S BANS STEEL THROUGH ITS PROPRIETOR ALPANA JAIN VERSUS STATE OF U.P. AND 2 OTHERS [ 2024 (8) TMI 772 - ALLAHABAD HIGH COURT] has held that It is not in dispute that before the seizure order could be passed, proper E-way bill was produced and the authorities, at no stage, have pointed out any discrepancy in the said E-way bill. Once the E-way bill was produced before the seizure order could be passed, the discrepancy, if any, was cured. Petition allowed.

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• 2025 (1) TMI 1310
  Seeking grant of bail - false availment of Input Tax Credit without receiving any scrap or goods - HELD THAT:- The substantial matrix of the case, prima facie indubitably points out the present petitioner s culpability. The seizure of the fake rubber stamps of the transport company, fake E Bills purported to be demonstrated as transportation of scrap from Delhi to Jaipur coupled with the statement of the transport company owner, stating the actual route through which his truck has moved on such dates, the report of the concerned authority confirming the non-existence of the firms from whom the petitioner had received so-called scrap affirmatively validates that petitioner fraudulently caused loss to the government revenue by claiming input tax credit in tune to 10.67 crores. The material collected by the respondent prima facie exhibits that the petitioner was fraudulently profited from the ITC based on sham bills obtained or procured in the name of non-existing firms. As far as judgment of Hon ble Apex Court in Prabir Purkayastha Vs. State (NCT of Delhi) [ 2024 (5) TMI 1104 - SUPREME COURT] and Pankaj Bansal Vs. Union of India [ 2023 (10) TMI 175 - SUPREME COURT] are concerned, the said judgments pertain to Section 19 of the PMLA, under which the provisions are stringent under Section 69 (2) of the Act of 2017. There is no such provision that before arresting a person, written reasons should be assigned to the petitioner. Further, the petitioner has not raised this question at the instance when he was arrested and not challenged before the Competent Court. It is also pertinent to mention here that the statement rendered by the petitioner was recorded under Section 70 of the Act of 2017, empowers the Authority to record the statements. The Hon ble Apex Court in the matter of Y.S. Jaganmohan Reddy Vs. Central Bureau of Investigation [ 2013 (5) TMI 896 - SUPREME COURT] categorically held that the economic offences are to be dealt with iron hands as such offences are committed with cool calculation and deliberate design and they affect economic fabric of the whole country, therefore, considering the above facts, it is not required to enlarge the petitioner on bail. Conclusion - The evidence presented by the respondents, including the fraudulent availing of ITC and the use of forged documents, established a prima facie case against the petitioner. Bail application dismissed.

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• 2025 (1) TMI 1309
  Violation of principles of natural justice - respondents failure to supply the petitioner with a copy of the Special Investigation Branch (SIB) report, which formed the basis of the SCN u/s 74 of the Goods and Services Tax Act, 2017 - HELD THAT:- Once the foundation of the show cause notice has been the SIB report, it was but incumbent on the respondents to supply a copy thereof so as to enable the petitioner to respond to the findings arrived at by the same SIB and/ or point out the discrepancy in the said report. The mere fact that in show cause notice, the conclusions arrived at by the SIB, have been indicated, by itself cannot fulfill the requirement of supplying a copy of the SIB report as the manner in which the conclusion had been arrived at by the SIB cannot be deciphered from the show cause notice. It is apparent that the order impugned has been passed by the respondents in violation of principles of natural justice i.e. without supplying the foundational document before passing of the order impugned. The matter is remanded back to the authority, who would supply copy of the SIB report to the petitioner, afford opportunity to respond to the show cause notice within a reasonable time and thereafter, after providing opportunity of hearing as required by Section 74 of the Act, decide the matter afresh - Petition allowed by way of remand.

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• 2025 (1) TMI 1308
  Challenge to revisional order passed by the Revisional Authority under Section 108 of U.P. Goods and Services Tax Act, 2017 - maintainability of revision petition - Availability of alternative remedy of appeal - HELD THAT:- If the revision was not maintainable on the ground that there was a provision of appeal, then, the Revisional Authority should not have discussed any other aspect of the matter, however, if he entered into merits of the matter in the sense as to whether the parameters and prerequisites for exercise of revisional powers under Section 108 were existing or not, then, he could not have observed that the writ petition is not maintainable. The order is not clear. Sub-section 2 of Section 108 of the Act, 2017 says that - The Revisional Authority shall not exercise any power under sub-section (1), if (a) the order has been subject to an appeal under section 107 or section 112 or section 117 or section 118. The words - the order has been subject to an appeal under Section 107 means that against such an order an appeal has been filed. Noway these words can be understood as implying that first of all the applicant, who has filed the revision under Section 108, should file an appeal and only thereafter, a revision will lie against such an order passed in appeal. Conclusion - The impugned order in either eventuality is not maintainable. If it is taken as a decision on merits it does not consider the facts of the case and the pleas raised in the revision. If it is taken as an order dismissing the revision as not maintainable, then, it is against the provisions of Section 108. The impugned order is quashed. Petition allowed.

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• 2025 (1) TMI 1307
  Levy of GST on assignment of the leasehold rights - seeking declaration that Respondents are not entitled to charge Goods and Service Tax on the transaction of assignment of the long-term Leasehold rights under the provisions of the Goods and Service Tax, 2017 - HELD THAT:- The issue of levy of GST on assignment of the leasehold rights is now no more res integra in view of the decision of this Court in the case of Gujarat Chamber of Commerce and Industries and others vs. Union of India and others [ 2025 (1) TMI 516 - GUJARAT HIGH COURT ], wherein it is held that assignment by sale and transfer of leasehold rights of the plot of land allotted by GIDC to the lessee in favour of third party-assignee for a consideration shall be assignment/sale/ transfer of benefits arising out of immovable property by the lessee-assignor in favour of third party-assignee who would become lessee of GIDC in place of original allottee-lessee. The grievance raised in this petition is required to be considered. Accordingly, as such, without going into the factual matrix as narrated in the petition, the impugned show cause notice is hereby quashed and set aside as the facts are not disputed by the respondent authority for assignment of the leasehold rights by the petitioner - petition disposed off.

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• 2025 (1) TMI 1306
  Cancellation of GST registration of the petitioners on the sole plea that the petitioners did not file its return in accordance with law for consecutive six months - HELD THAT:- The issue has already received the attention of the Hon ble Division Bench in the matter of Subhankar Golder Vs. Assistant Commissioner of State Tax [ 2024 (5) TMI 1262 - CALCUTTA HIGH COURT ]. The Hon ble Division Bench had observed the appellant can be provided with one more opportunity to remedy the bridge as the appellant being an individual since a small retailer of imitation jewellery, we deem it appropriate that the appellant should be permitted to remedy the bridge. The SCN, the order of cancellation of GST registratio and the order of the appellate authority stands set aside and quashed subject to petitioner files his GST returns for the entire period of default and pays requisite amount of tax, interest, fine and penalty and/or late fees within four weeks from date. Petition disposed off.

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• 2025 (1) TMI 1305
  Cancellation of the petitioner s GST registration - Non compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed - violation of principles of natural justice - HELD THAT:- Relying upon the decision of this Court in the case of AGGARWAL DYEING AND PRINTING WORKS VERSUS STATE OF GUJARAT 2 OTHER (S) [ 2022 (4) TMI 864 - GUJARAT HIGH COURT] both the show-cause notice and the order of cancellation are liable to be quashed and set aside. Therefore, the matter is remanded back to the respondent-authority for deciding the same afresh. It is further made clear that such exercise shall be completed within a period of 12 weeks. It is also made clear that the registration shall remain suspended till the respondent-authority decides the show-cause notice for cancellation after giving an opportunity of hearing to the petitioner and considering the reply of the petitioner by passing a fresh de novo detailed order. Petition disposed off by way of remand.

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• 2025 (1) TMI 1304
  Entitlement to claim the Transitional Input Tax Credit (ITC) under Section 140(5) of the Central Goods and Services Tax Act, 2017 (CGST Act) for service tax invoices received after June 30, 2017 - petitioner could not file the Form GST TRAN-1 due to technical glitch - denial of opportunity of personal hearing - violation of principles of natural justice - HELD THAT:- It is not in dispute that the petitioner has committed a mistake in for the carry forward of the Transitional Input Tax Credit in Form TRAN-1 as admitted by the petitioner by showing the carry forward of the Transitional Input Tax Credit of the Service Tax in column No. 5(a) and instead of Column No. 7(a), as the petitioner has failed to point out while filing the FORM TRAN- 1 that such claim was pertaining to the invoices received by the petitioner after 30th June, 2017 and as such the petitioner was required to fulfill the requirements of Sub- Section (5) of Section 140 of the CGST Act, 2017. On perusal of the provisions of Section 140 (5) of the CGST Act, it is for the petitioner to prove that the amount was received after 30th June, 2017 which has been duly recorded in the books of accounts within a period of 30 days from the date of receipt. Therefore, it is incumbent upon the respondent Nos. 2 and 3 to provide an opportunity to the petitioner, to show that the requirements of the Sub Section (5) of Section 140 of the CGST Act are fulfilled by the petitioner along with the requisite documents and the proof. The petitioner has been denied the opportunity of personal hearing by the respondent Nos. 2 and 3 and in such circumstances, there is a clear breach of the principle of natural justice. Conclusion - It is necessary for authorities to provide a personal hearing and issue a reasoned order when processing claims for Transitional ITC. Matter remanded to the respondent authorities to reconsider the petitioner s claim for Transitional ITC. Petition allowed by way of remand.

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• 2025 (1) TMI 1303
  Refund of tax - rejection of refund claim on the ground of being barred by time limitation - HELD THAT:- A cogent reading of Section 54 (1) and Section 54 (3) would make the scheme of the Act clear. The right to claim refund, under Section 54 (3), starts from the end of the tax period in which the refund arises. Under Section 54 (1) a dealer is entitled to claim refund of excess taxes within a period of two years from the relevant date. This would be the outer limit, within which the dealer is entitled to make a claim for refund. Thus, the starting point from when the dealer can make such a request is set out in Section 54 (3), which stipulates that a claim for refund of unutilized input tax credit can be made at the end of tax period and such claim is permissible till the end of two years from the relevant date. In the circumstances, it would have to be held that the application filed by the petitioner, on 21.03.2024, is beyond the last date of 09.03.2024, within which the application should have been made. Petition dismissed.

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• 2025 (1) TMI 1302
  Liability for utilisation of Input Tax Credit in excess - HELD THAT:- This Court has, in the decision Rejimon Padickapparambil Alex v. Union of India and Others [ 2024 (12) TMI 399 - KERALA HIGH COURT ] observed that the electronic credit ledger is in the nature of a wallet with different compartments of Integrated Goods and Services Tax, Central Goods and Services Tax and State Goods and Services Tax and there cannot be any wrong availment of input tax credit merely because a taxpayer had availed the benefit of credit of input tax available in IGST under the heads CGST and SGST. In the instant case, a perusal of the order of assessment produced as Exhibit-P2 reveals that the alleged mistake committed by the petitioner is by availing the benefit of Input Tax Credit available in IGST, under the heads CGST and SGST. The said method of availing ITC cannot be said to be a wrong availment of Input Tax Credit warranting the imposition of any penalty as observed in the above referred judgment. Therefore, it is only appropriate that the order of assessment itself is set aside and a reconsideration be directed by the proper officer. Though petitioner had preferred an appeal, in order to avoid continuance of an unnecessary procedure, it is deemed appropriate to exercise the jurisdiction under Article 226 of the Constitution of India to set aside Exhibit-P2 itself and direct a reconsideration. Conclusion - i) The said method of availing ITC cannot be said to be a wrong availment of Input Tax Credit warranting the imposition of any penalty. ii) It is only appropriate that the order of assessment itself is set aside and a reconsideration be directed by the proper officer. Petition allowed.

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• 2025 (1) TMI 1301
  Application for seeking judicial remand under Section 167 of Cr.P.C. read with Section 187 of BNSS Act, 2023 for 14 days - ground of arrest were not informed in proper manner - HELD THAT:- This Court has gone through the grounds of arrest, which were conveyed by the prosecution to the accused. It is pertinent to mention here that on arrest memo, it has been acknowledged by the accused himself in writing that he has been informed and explained about the grounds of arrest. Therefore, this Court is of the view of that ground of arrest have been properly informed and explained to the applicant/accused by the prosecution. It is correct that present offence under Section 132(1) of CGST Act, 2017 is punishable upto 5 years. Hon ble Apex Court in case law titled as Arnesh Kumar. Vs. State of Bihar [ 2014 (7) TMI 1143 - SUPREME COURT ] made it mandatory to follow the provisions of Section 41 41A of Criminal Procedure Code for the offence which are punishable upto 7 years. Prosecution has taken a stand that present accused has been arrested under Section 69 of CGST Act and hence, provision of Section 41 and 41A of Criminal Procedure Code/35 of BNSS Act are not applicable in the present matter but this Court does not find force in the arguments of learned counsel for the complainant. Further in case law titled as The State of Gujarat etc. Vs. Choodamani Parme Shwaran Iyer and another [ 2023 (7) TMI 1008 - SUPREME COURT ], Hon ble Apex Court has observed that contention of prosecution that in view of Section 69(3) of CGST Act, 2017, petitioners cannot fall back upon the limited protection against arrest, found in Sections 41 and 41A of Cr.P.C., may not be correct. Conclusion - This Court is of the view that prosecution was under obligation to comply with the provisions of Section 41, 41A of Cr.P.C/35 of BNSS Ac, 2023 before arresting the accused but same has not been complied and as such, arrest of accused cannot be termed as legal. In view of the matter, the application filed on behalf of applicant/accused Yogesh Gupta is hereby allowed. Accordingly, applicant/accused Yogesh Gupta is released from custody forthwith. However, prosecution/complainant department is given liberty to re-arrest the applicant/accused after following the due procedure as described in Section 41, 41A of Cr.P.C./35 of BNSS Act, 2023/70 (1) of CGST Act. Application allowed.

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• Income Tax

• 2025 (1) TMI 1300
  Reopening of assessment u/s 147 - liability of legal representatives for the tax obligations of a deceased person - HELD THAT:- The proceedings initiated against the Assessee by issuing notice after his demise cannot be continued against his/her legal representative. Had the proceedings been initiated against the Assessee during his life time, they could be continued against the legal representatives of the deceased Assessee. However, that is not the factual position here. Therefore, the order of the learned Single Judge cannot be faltered in quashing what were challenged before him. Second contention of the learned Panel Counsel that liberty ought to have been reserved to the Revenue for initiating fresh proceedings against the Legal Representatives of the Assessee, once proceedings taken up against the deceased Assessee are set at naught, again does not impress us even in the least. This contention is structured on a premise that the Legal Representatives i.e., persons who hold estate of the deceased Assessee in their hands are under a legal obligation to inform the Revenue as to the death of the Assessee. To support such a premise, no provision of law in general and no section of 1961 Act in particular are brought to our notice. Clause (b) of Section 159 (2) enables proceedings being taken against Legal Representatives of the deceased, is true. However, that is subject to such proceedings being capable of being taken against the deceased. If the statutorily prescribed time limit has expired as against the deceased himself, as has happened in this case then no proceedings can be taken against his LRs. Conspicuously, there is no provision in 1961 Act which provides for discounting the time spent during the pendency of proceedings against the deceased Assessee while computing the limitation period for initiating the proceedings against his Legal Representatives. Appeal dismissed.

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• 2025 (1) TMI 1299
  Validity of Reopening of assessment - change of opinion - HELD THAT:- The impugned notice and the reasons recorded on the basis of the same facts which were already considered during the regular assessment proceedings are nothing but a mere change of opinion by the respondent AO to reopen assessment ignoring the details and the replies filed by the petitioner available on record. Decided in favour of assessee.

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• 2025 (1) TMI 1298
  Validity of Settlement Commission order accepting the settlement amount offered by the assessee u/s 245D (4) - HELD THAT:- Settlement Commission has, arrived at a finding that the assessee was not directly dealing with land from which income has been earned which has been invested in the land and therefore, it would not be possible for the assessee to disclose the manner in which such undisclosed income was earned from the real estate transactions. \In view of such finding of fact arrived at by the Settlement Commission and in absence of any further evidence produced by the petitioner before the Settlement Commission and more particularly when the statement made in the application for settlement to the effect that it is based on full and true disclosure, which is to be accepted unless there is evidence found contrary to the disclosure made, therefore, the impugned order passed by the Settlement Commission is just and proper and requires no interference while exercising jurisdiction under Article 227 of the Constitution of India. Contention raised on behalf of petitioner with regard to documents found in the mobile phone of Mr. Kishor Koshiya pertaining to the assessee - As in view of the order passed by the Settlement Commission in case of Mr. Kishor Koshiya accepting the disclosure made by him as per the application for settlement, no further addition could have been made by the Settlement Commission in the hands of the assessee on such grounds as no further evidence was produced by the department during the joint verification of such documents found from the mobile phone of Shri Kishor Koshiya. Therefore, the Settlement Commission cannot be said to have committed any error while accepting the rejoinder of the assessee to the Rule 9 report. Thus findings arrived at by the Settlement Commission, it is for Mr. Kishor Koshiya to explain the documents found his mobile phone and the assessee could not be subjected to any further disclosure on the basis of such assumption and presumption in absence of any evidence. It is true that this Court is not required to go into the merits of the matter on issues which are decided by the Settlement Commission while exercising the jurisdiction under Article 227 of the Constitution of India. Appeal dismissed.

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• 2025 (1) TMI 1297
  Reopening of assessment u/s 147 - Change of opinion - failure on the part of the assessee in furnishing material facts fully and truly for the assessment - assessee has not disclosed true and correct facts regarding the payment of VAT - HELD THAT:- As per notice issued by the CIT(A), Baroda, wherein no recording of reasons of the fact of failure on the part of the appellant in submitting material facts for the purpose of making assessment truly and fully at the time of original assessment is reflecting for initiation of such re-assessment proceeding. Once, upon considering the documents, the claim of the assessee decided and accepted by not making any addition during the course of regular assessment issuing notice u/s 148 on the same issue by successor AO amongst to assumption of revisionary power which is not valid as per law. When the AO attempts to reopen an assessment on the count the opinion formed earlier by him was an incorrect opinion, the reopening is not warranted. Though the statutory power has been given in the hands of the ITO to reopen the final decision made against the Revenue in respect of the question that directly arose from the decisions in earlier proceeding, the same is required to be exercised sparingly upon due application of mind, otherwise it would result in placing an unrestricted and unguided power of review in the hands of the assessing authorities depending on their changing moods. Thus, we find that in the absence of new material facts brought on record by the Revenue reopening of assessment beyond the period of 4 years from the end of the assessment year in the present facts and circumstances of the case is found to be not sustainable in the eye of law and order of quashing the same by the CIT(A) with the same observation is found to be just and proper so as to warrant interference. Revenue s appeal is found to be devoid of any merit and hence, dismissed. Instant reopening and consequent addition sought to be made by the AO is nothing other than a mere change of opinion. Decided in favour of assessee.

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• 2025 (1) TMI 1296
  NRI expenses - Expenses incurred on soliciting and mobilization of foreign currency deposits from Non-Resident Indians on the assessee s Indian business in the backdrop of Section 44C - HELD THAT:- Issue would have to be answered in favour of assessee in light of the order passed by us in ANZ Grindlays Bank [ 2024 (10) TMI 185 - DELHI HIGH COURT] held expenses were incurred for the purposes of inviting NRIs to open deposits in the Indian branches of the respondent assessee. The aforesaid initiative was predicated upon the circular of the RBI itself which is dated 16 October 1991. Since this was expenditure which was incurred solely for the purpose of the business of the respondent assessee in India, we find no merits in the challenge which stands mounted to the order of the Tribunal in this respect. Expenditure on account of contribution to approved pension funds - contribution have breached the limits prescribed by Section 36 (1) (iv) and thus not liable to be allowed as deductions bearing in mind the provisions made in Section 40A (10) - HELD THAT:- The factual position which had fallen for notice of the Calcutta High Court in Exide Industries [ 2022 (9) TMI 1259 - CALCUTTA HIGH COURT ] and which lead it to draw a distinction between an initial or qualificatory contribution as distinguished from a contribution made in a particular year in discharge of employer obligations. It thus held that the limits that the Board could prescribe would only apply to an initial or an ordinary annual contribution. Any contribution made additionally in discharge of an overarching obligation would thus not be rendered as a disallowable expense. We find ourselves in agreement with the view expressed in Exide Industries. Appeal decided in favour of the assessee.

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• 2025 (1) TMI 1295
  Levy interest u/s 234B - addition made in Book Profit under MAT being provision for doubtful debts - HELD THAT:- In this case, at least three Coordinate Benches have taken the view that where an assessee computed book profits as per the prevailing law, no interest u/s 234B could have been levied consequent to the inclusion of various items in computing book profits as per explanation to Section 115JB which were brought on the statute by the Finance Act, 2008 with retrospective effect from 1 April 2001. While it is correct that no question of equity is involved in taxing matters, this principle does not obviate the necessity of the revenue being fair to the Court, and it points out that identical questions were decided against it. Mr Chhotaray could not or perhaps would not say whether the revenue has challenged the decisions in the case of Mangalore Refinery Petrochemicals Ltd [ 2020 (6) TMI 587 - BOMBAY HIGH COURT] , Prime Securities Ltd. [ 2010 (12) TMI 475 - BOMBAY HIGH COURT] and JSW Energy Ltd. [ 2015 (5) TMI 823 - BOMBAY HIGH COURT] These decisions were delivered in 2020, 2011 and 2015. Undoubtedly, the departments whom Mr Chhotaray represents would know whether the revenue challenged these matters before the Hon ble Supreme Court. Still, this appeal was instituted, and Mr Chhotaray insisted and argued the matter for a long time. There is no difficulty hearing long arguments, but we expect greater fairness from the revenue in pointing out contrary and binding decisions directly on the issue. Based on a serious argument, an attempt could also be made to distinguish or seek a reference. But binding precedents should not be suppressed or attempted to be attacked so casually. Appeal dismissed.

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• 2025 (1) TMI 1294
  Estimation of income - bogus purchases - ITAT restricting the addition only to the extent of 7% - HELD THAT:- We decline to entertain this appeal. The issues raised turn on facts. Accordingly, they give rise to no substantial questions of law.

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• 2025 (1) TMI 1293
  Petitioner entitled to file a revised return beyond the period of limitation prescribed under the Income Tax Act, 1961 and beyond the period of limitation under the above mentioned CBDT Circular - HELD THAT:- Petitioner has wrongly declared the gross income as also the taxable income in the return that was filed on 20.11.2012. The necessity for filing a revised return is on account of the subsequent crediting of Tax Deducted at Source (TDS) by the Government who had employed the petitioner for excluding certain works contract as a result of which, the total deduction of tax by the Government for the Assessment Year 2012-2013 would have been Rs. 2,69,338/- instead of Rs. 85,568/-. The attempt of the petitioner is to get a further refund by enhancing the taxable income of the petitioner by filing a revised return. The Income Tax Department has also not issued any notice under Section 148 of the Income Tax Act, 1961 to revise the assessment as the time for revising the assessment had already expired under Section 148 read with Section 151 of the Income Tax Act, 1961. Thus, the question of condonation of delay in the light of the above CBDT Circular cannot be countenanced. The amount that was credited during the subsequent Assessment Year for the Tax Deducted at Source (TDS) during the Assessment Year 2012-2013 at best, can be utilized by the petitioner for the succeeding year.

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• 2025 (1) TMI 1292
  Validity of reopening of assessment - jurisdiction assumed u/s 147 - addition towards LTCG on sale of shares - assessee has not filed the return of income - Reason to believe - HELD THAT:- As pointed out on behalf of the assessee, the belief towards escapement of chargeable income has been entertained by the AO on the basis that the assessee has not filed the return of income for AY 2016-17 in question which is grossly contrary to the facts on record. As demonstrated on behalf of the assessee that the assessee has duly filed return of income on 02.08.2016. The most basic reason of holding belief itself is wholly incorrect. The basis that return of income has not been filed giving rise to the reason to belief towards escapement in the reasons recorded is itself contradicted by the AO himself in the assessment order where it categorically notes that the assessee had filed return of income for AY 2016-17 on 02.08.2016, declaring total income of INR 6,40,160/-. Thus, the reasons have been recorded grossly contrary to the facts on record. Reason to believe is the starting point for re-opening a case. A freak foundation or reason that assessee did not file ROI is blatantly contrary to the facts. Belief stemmed from wholly unfounded reasons thus betrays the prerequisites of s. 147 of the Act. See ARVIND SAHDEO GUPTA [ 2023 (8) TMI 522 - BOMBAY HIGH COURT] - Assumption of jurisdiction allegedly without meeting the pre-requisites of s.151 of the Act - In consonance with the view expressed in Jagbir Singh [ 2025 (1) TMI 503 - ITAT DELHI] we see palpable merit in the plea of the assessee that the sanction granted under s. 151 of the Act is extraneous and an empty formality and do not accord with its salutary purpose. The requirement of law is to grant speaking approval u/s 151 of the Act which is not found to be fulfilled. The notice issued u/s 148 as a sequel to such sanction and resultant assessment is thus vitiated in law. Decided in favour of assessee.

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• 2025 (1) TMI 1291
  Disallowance of bad debts claim - claim is premature is unjust, illegal, arbitrary, uncalled for and devoid of any merit and the appellant prays that the same be delete - whether the first appellate authority was justified in upholding the order of the Ld. AO with the further findings that the amount of loss written off is speculative in nature ? HELD THAT:- Hon ble Supreme Court in the case of TRF Ltd [ 2010 (2) TMI 211 - SUPREME COURT] has held that this position in law is well settled. After 1-4-1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. On the basis of judicial precedents mentioned hereinbefore, it is crystal clear that it is not required for the assessee / appellant to establish that the debt in question has became irrecoverable and bad debt is written off as irrecoverable in the account of the assessee is quite sufficient. Decided in favour of assessee.

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• 2025 (1) TMI 1290
  Addition of unpaid VAT liability u/s 43B - HELD THAT:- Admittedly, the issue in present case qua the admissibility of unpaid VAT liability which was not paid on or before the due date for furnishing the return u/s 139 of the Act, if the same is not charged to P L Account, the same cannot be disallowed being not claimed as deduction in the books of accounts. We may herein note that on this issue the revenue through its Ld. Standing Counsel had accepted that the said amount was not claimed as an expenditure in P L Account and the case is covered by the decision rendered in the case of M/s Ganapati Motors [ 2017 (4) TMI 1613 - CHHATTISGARH HIGH COURT ] under such admission by the revenue, the contentions raised before us are found to be bereft of any substance. Decided against revenue.

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• 2025 (1) TMI 1289
  Addition of credit card payments being personal in nature u/s. 37(1) - Addition in hands of the Director as perquisite u/s. 2(24)(iv) - HELD THAT:- As undisputed fact that the company had agreed before the DDIT[Investigation] and disallowed the credit card payments being personal in nature u/s. 37(1) of the Act while filing the return of income of the company for the assessment years under consideration. Once, the company, did not claim the credit card payments being personal in nature as business expenditure while computing the business income, (due to disallowance made by the company), the aforesaid credit card payment relating to personal in nature cannot be taxed again in the hands of the assessee-director as income u/s. 2(24)(iv) of the Act. AO himself has observed that during post search proceedings, the assessee suo motto submitted before the DDIT [Investigation] and disclosed the details of official expenditure and personal expenses of Directors related to the payment of credit card bills in the hands of the company. Since the company did not claim the personal expenditure while computing the business income, the assessee did not receive any additional benefit from the company. AO is therefore totally unjustified in making the addition in the hands of the assessee being the personal expenditure of the director paid by the company which was disallowed in the hands of the company and the company paid taxes there on since it amounts to double taxation. Judgements relied on by the CIT(A) are distinguishable on facts, as in those cases, the company did not disallow the expenses u/s. 37(1) of the Act in the hands of the company. Decided in favour of assessee.

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• 2025 (1) TMI 1288
  Unexplained credits u/s 68 - treatment of sale consideration received on sale of diamonds as unexplained/Bogus LTCG -HELD THAT:- The existence of rough diamonds with the assessee together with the activity of processing of rough diamonds into cut and polished diamonds and sale of those cut and polished diamonds to third party customers is proved beyond reasonable doubt by the assessee herein. In the present case, the diamonds were gifted to the assessee by his grandfather in the previous year relevant to assessment year 1994-95, while computing capital gains, the period of holding should be construed accordingly. Thus, such diamonds shall fall within the definition of long term capital assets and consequently, long term capital gains shall arise on their transfer. CIT-A had relied on CBDT Circulars referred supra to treat the gains arising on sale of diamonds as short term capital gains. In this regard, we find that the Circulars had taken oscillating positions with regard to the period of holding of assets which works contradictory to the existing provisions of the Act itself. Hence the provisions of the Act would prevail. Explanation 1(i)(b) of Section 2(42A) of the Act clearly lays down the law regarding the period of holding of assets. Hence there is no need to place reliance on Circulars for this purpose. Either way, the Circulars are binding only on the revenue authorities and the same is not binding on the Tribunal. Period of holding of diamonds need to be reckoned from Assessment Year 1994-95 in terms of provisions of the Act and accordingly the resultant gain on sale of diamonds would have to construed only as Long Term Capital Gains in the facts and circumstances of the instant case. Gains on sale of cut and polished diamonds is to be construed as LTCG which had already been offered to tax by the assessee in the return of income and the same cannot be treated as unexplained cash credit u/s 68 of the Act in the facts and circumstances of the instant case.Ground Raised by the assessee are allowed.

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• 2025 (1) TMI 1287
  Validity of reassessment u/s 147 - Bogus LTCG on shares - HELD THAT:- Lower authorities brushed aside the submissions and all the documents filed during the course of the respective proceedings and merely relied upon the information received through CRIU module of insight portal and failed to conduct an independent inquiry against the claim of the assessee. Absolutely, there is no direct or indirect evidence against the assessee which has been brought on record by the lower authorities to justify the addition by denying the claim of exemption under section 10(38) for the assessee. The lower authorities had merely relied on third party information in this regard. It is pertinent to note that the transaction of purchase of shares made by the assessee in this regard has been accepted and no doubts or adverse inference has been drawn on the same. These investments in shares were made in September 2012. The payments for the same had been made by account payee cheque out of the disclosed bank account by the assessee. These shares were duly dematerialized and were held by the assessee for more than three years. These shares were admittedly sold through a recognized, through a registered share broker in the recognized stock exchange in the open market after duly suffering STT. Hence, there is absolutely no reason for the lower authorities to doubt the transaction carried out by the assessee. No case made out by the revenue for justifying the denial of exemption under section 10(38) - Decided in favour of assessee.

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• 2025 (1) TMI 1286
  Disallowance of interest expenses - assessee provided interest-free advances while having interest-bearing loans was justified -whether there was commercial expediency in giving interest free advances or loans? - HELD THAT:- We notice that the advances have been given to these three companies during the course of carrying on business for business purposes, i.e., these payments have been given in connection with business ventures with the expectation of profits from the deal that will be entered by the respective parties. Accordingly, the Ld CIT(A) has held that there was commercial expediency in giving these advances without charging interest, since the assessee is expected to get the share of profits from the deal. Further, these three advances continue from the earlier years and the AO did not make any disallowance of interest in the earlier years. CIT(A) was justified in deleting the proportionate interest disallowance. For the other parties all these balances have been brought forward from earlier years and no disallowance of interest was made in those years. Secondly, the interest free funds available with the assessee are in far excess of these outstanding amounts. Accordingly, we are of the view that there is no requirement of disallowing any interest expenses vis- -vis these outstanding balances. Also account has been brought forward from earlier years and no disallowance of interest was made in those years. Advances have been given in the earlier years and no disallowance of interest was made in those years. Since these advances have been given for business purposes, we are of the view that the Ld CIT(A) has rightly deleted the disallowance of proportionate interest in respect of both these advances. Some advances have been given on commercial expediency during the course of carrying on of its real estate business. And sufficient interest free funds were also available with the assessee. Decided in favour of assessee. Disallowance of the provision for expenses - HELD THAT:- There is no dispute that the assessee is following mercantile system of accounting. Under that system, it is mandatory for the assessee to make provision for all known expenses and losses, even if the payments in respect of those expenses have not been made. Unless such kind of provision for expenses are made in the books as at the year end, the financial statements cannot be considered to reflect true and fair view of the company. The provision for expenses is usually made on some scientific basis at the year end, since the concerned bills would not have been received by the assessee at the time of finalization of accounts. Hence, the assessee would not be in a position to furnish relevant bills in respect of all items. AR submitted that the provision for expenses are made every year in a routine manner in order to provide for all known expenses and losses in accordance with accounting principles. In the earlier years, the AO had accepted claim of the provision for expenses. Accordingly, we are of the view that the AO was not justified in disallowing the provision for expenses made by the assessee. Appeal filed by the revenue is dismissed.

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• 2025 (1) TMI 1285
  Disallowance u/s 14A r.w.r. 8D - expenditure relatable to exempt income - HELD THAT:- Average value of investment under the substituted Rules is to be made @1% on average value of investment as held in the case of ACIT vs Vireet Investments P Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] wherein, it has been held that for the purpose of computation of disallowance of average value of investment the AO has to take only the instrument which gives rise to exempt income and not the investment which does not give rise the investment. In terms of above, we set aside the order CIT(A) on this issue and remand the issue back to the file of the ld AO in the following terms:- i. that the AO will find out the investment which gives rise to exempt income. ii. then the AO will re-compute the disallowance by taking those investment which give rise to exempt income @1% on average value of investment. iii. the AO will also verify the expenditure as described in proviso to Rule 8D(2)(ii) wherein, it is referred that the amount referred to in clause 1 and clause 2 would not exceed to total expenditure claimed by the assessee. The AO will find out the expenditure claimed by the assessee in terms of above and then will re-decide the issue. Appeal of the revenue is allowed for statistical purposes and order of the CIT(A) and that of AO is set aside. Disallowing additional ground raised by the assessee during the course of first appeal - not considering that the income pertaining to the concessional fee received from AAICLAS Co. Ltd has already offered for taxation in AY 2018-19 - HELD THAT:- As both the sides and going through the facts of the case, notice that the income as claimed by the assessee which is already offered for taxation in AY, needs verification. Before us, assessee could not explain how this income of Rs. 102.88 is included in this income of Rs. 232.67 offered in AY 2018-19. At one point of time, the ld counsel made submission that part income falls in AY 2018-19 and part falls in AY 2019-20. The entire controversy raised by assessee seems plausible and there should not be double taxation of an income. There is no impediment for Tribunal not to entertain new claim as held in the case of Goetze India [ 2006 (3) TMI 75 - SUPREME COURT] wherein as laid down the principle that appellate authority can entertain a fresh claim. Hence, we admit this additional ground and set aside the order of the CIT(A) and remand this issue back to the file of AO with following directions:- i. AO will first examine income offered for taxation for AY 2018-19 amounting to Rs. 232.67 crores, whether the same includes the income of Rs. 102.88 crores as claimed by the assessee and admitted in AY 2019-20 i.e., the present assessment year. In case this is admitted in AY 2018-19 or even part of this income is admitted in AY 2018-19, the same has to be excluded in the present AY.

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• 2025 (1) TMI 1284
  Notice u/s 143(2) issued by the non-jurisdictional officer - As argued jurisdiction could not have been transferred from ITO, Ward 11(3) to Circle 11(2) without order u/s 127 - as submitted Jurisdiction lies only with DCIT, however the statutory notice u/s 143(2) was issued by the ITO instead of the present Assessing Officer i.e. DCIT. HELD THAT:- Revenue has not brought on record an order u/s 127 of the Act passed in order to transfer the case to DCIT, Circle 11 (2), New Delhi except making the submissions that assessee should file the objection within one month u/s 124(3) of the Act. Since the issue of notice u/s 143(2) is the basis of initiation of the assessment u/s 143(3) and the jurisdictional officer should have issued the notice and also completed the assessment. The present Assessing Officer has completed the assessment without following the due process of law and we are inclined to hold that the jurisdictional notice u/s 143(2) was not issued by the DCIT before completing the assessment u/s 143(3) of the Act and that there is an unwarranted defect in this case which is not curable. Decided in favour of assessee.

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• 2025 (1) TMI 1283
  Addition u/s. 69A - reliance on dumb documents found during the course of search - HELD THAT:- AO has made the additions on all the items found during search from the diary, but CIT(A) has restricted the additions to those entries only which were reflected in the books of accounts. In our considered opinion, the ld. Counsel s submissions that wrong section is mentioned is not fatal over here, as additions have been made on account of unexplained items found during the course of search from the diary. Hon ble Madras High Court in the case of M. Vivek [ 2020 (11) TMI 953 - MADRAS HIGH COURT] has duly held that loose sheets picked u/s 132, falls within definition of document mentioned in section 132(4) and therefore, it has got evidentiary value. The decisions referred by assessee has no bearing on the present facts of the case. Decided against assessee.

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• 2025 (1) TMI 1282
  LTCG - Denial of deduction u/s 54F - assessee failed to furnish the possession certificate, electricity bill etc. in order to establish the fact of possession being taken within the prescribed statutory time limit - HELD THAT:- Assessee made payment to the builders for the purchase of the new property even more than the capital gain earned. There was no delay on the part of the assessee who deposited the full amount of capital gain but the possession was not handed over by the builder which is an admitted delay on the part of the builder and because of such default of the builder in not completing the construction and handing over possession to the assessee within the time prescribed benefit of Section 54 to 54F cannot be attributed to the assessee particularly when the assessee has complied with all the statutory conditions in order to claim benefit u/s 54F. Most of the builders generally failed to complete their purchase in stipulated period and hardly any builder could complete their project within the promised time. In the event, if the builders are not able to deliver the flats within the target period, and if, the assessee invested the requisite amounts in such projects within the prescribed time, benefit of Section 54/54F cannot be denied to thousands of such cases. The provisions of section 54 are beneficial sections and therefore, it is to be interpreted liberally. If the assessee has completed his part of the job, in that case he is entitled to the deduction if the other part has not been completed because of the situation beyond the control of the assessee. Thus, For claiming exemption u/s 54, it is not necessary that the Assessee should obtain possession of the new asset or become the owner of such new asset by way of registration of document within the time limit as specified therein as long as the Assessee has acquired substantial domain over the new asset and paid substantial amount of its cost within such specified time limits. Section 54 is a beneficial provision and it could never be the intention of the legislature to deny the benefit of such deduction in such bonafide deserving cases. Hon ble Apex Court in the case of Sanjeev Lal [ 2014 (7) TMI 99 - SUPREME COURT] wherein it has been held that adverse inference against the assessee cannot be made in this regard. Decided in favour of assessee.

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• 2025 (1) TMI 1281
  Assessment u/s 153A - entries found recorded in the diary seized from the residential premises of Third party - HELD THAT:- The entries found recorded in the diary seized from the residential premises of RKY is not capable of incriminating the assessee company per se. Additions made qua such entries thus are not justified within sweep of s. 153A of the Act. On merits also, the impugned addition is not justified in the absence of any culpability established against the assessee company by some irrefutable evidence as noted above. Revenue has failed to tie the contents of impugned entries discovered from third person with that of assessee co. The statutory presumption is thus not available in the instant case. The onus thus continues to lie at the doorstep of Revenue that the transactions/ entries were consummated by the assessee indeed. Such onus has not been discharged at all. The allegation leveled against the assessee co. is in the realm of bald. Coupled with this, simultaneous addition based on such entries in the hands of other entity militates against action of the revenue and erodes the very foundation of the impugned additions. Substantial merit in the plea of the assessee on both counts namely lack of jurisdiction u/s 153A for making impugned additions dehors any incriminating material as well as additions being devoid of any merit in the absence of any credible corroboration that such entries unflinchingly relates to the assessee company in exclusion to other entities. Decided in favour of assessee.

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• 2025 (1) TMI 1280
  Rejection of registration u/s. 12AB - rejecting application filed online by the assessee in Form 10AB u/s. 12A(1)(ac)(iii) - selecting the incorrect sub-clause during the online application process - HELD THAT:- In this case, the assessee by virtue of order of Ld.CIT(E) albeit dated 08.11.2023 was enjoying registration u/s. 12AA of the Act after enquiry from AY 2020-21 onwards until it was rejected by Ld.CIT(E) vide the impugned order dated 17.05.2024, which action of Ld CIT(E) cannot be countenanced, being not in consonance with the new scheme of registration after TOLA-2020. Assessee-Trust being an old trust (before TOLA came into force) was legally entitled for registration u/s. 12AB(1)(a) for five (5) years; and because of inadvertent mistake of filling up for renewal under sub-clause (iii) instead of sub clause (i), the assessee s right for re-registration u/s. 12AB of the Act for AY 2022-23 onwards cannot be denied, which action would offend Article 14 of the Constitution of India, which guarantees inter-alia that equals to be treated equally and therefore, a different treatment cannot be given to assessee-Trust, which will tantamount to discrimination. Inadvertent mistake of the assessee clicking online for fresh registration under clause (iii) of sec.12(1)(ac) needs to be intervened and rectified; therefore, the assessee s application for registration under sub-clause (iii) needs to be treated as if assessee has applied under clause (i) of sec.12A(1)(ac) and granted registration u/s. 12AB(a) for five assessment years from AY 2022-23 onwards. Restore the assessee s application for registration back to the file of the Ld.CIT(E) and direct him to process the application filed by assessee on 08-11-2023 in Form 10 as if filed u/s. 12A(1)(ac)(i). Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (1) TMI 1279
  Income taxable in India or not - income from the provision of distance learning courses - AR submitted that the Authorised Training Centres (ATC) have been wrongly considered as agents of the assessee without appreciating the fact that the activities of the ATCs i.e. registration and training of students was carried out by them in their ordinary course of business in an independent capacity - relationship between the assessee viz. IATA, Canada and the ATCs was on principal to principal basis and there was no element of agency between them - HELD THAT:- Respectfully following coordinate bench case in assessee s own case for AY 2012-13 [ 2021 (6) TMI 2 - ITAT MUMBAI ] we hold that addition made towards provision of distance learning courses by treating the ATCs as DAPE of the assessee is not sustainable and the AO is directed to delete the addition made in this regard. Joining annual fees collected towards IATA clearing house facility (ICH facility) and data processing charges - AR argued that the joining annual fee toward ICH facility is not taxable on the principle of mutualy - HELD THAT:- We notice that addition is made on the similar grounds that the principle of mutuality is not applicable for the charges for provision of Data Processing. AO/DRP have relied on their own order of AY 2012-13 in this regard. On perusal of nature of charges, we are of the view that Data Processing charges are received towards services to airlines and agents using iiNet and weblink and therefore are similar to ICH facility fees. As already held that the ICH facility fees is not taxable in India for the reason that the principle of mutuality is applicable as has been held by the Co-ordinate Bench in assessee s own case for AY 2012-13. Therefore, applying the same ratio, we hold that the data processing charges which are similar in nature cannot also be taxed as income in India as attributable to Indian branches.

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• 2025 (1) TMI 1278
  Disallowance being sales promotion expenses - HELD THAT:-Assessee had acquired a new unit and the expenditure was incurred for which bills related to sales promotion expenditure were filed before the Ld. CIT(A) and the same was allowable as the business expenditure u/s 37(1). CIT(A) did not allow the expenditure as no details of the unit acquired nor other details were filed. Since the details of the unit acquired have been filed before us, the expenditure relates to 10.01.2010 while the unit was acquired on 14.08.2009 and the bills have been filed, hence the expenditure claimed is allowed as a deduction u/s 37(1) of the Act being in the nature of sales promotion expenses. Decided in favour of assessee.

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• 2025 (1) TMI 1277
  TDS u/s 195 - Non-Deduction of tax on foreign payments - assessee has argued that the foreign associates are predominantly individuals and in some cases are body corporate and these services rendered are either professional services or business profit as per respective DTAA - HELD THAT:- Though, the AO in the order has observed that if the relevant DTAA provides the clause of independent personal services which includes legal services, the assessee is eligible to available the benefit. However, he has considered entire amount paid as fee for technical services and levied tax to be deducted and interest u/s. 201(1A) without examining the relevant DTAA. As relying on Sri Subhatosh Majumder [ 2015 (11) TMI 1544 - ITAT KOLKATA ] we direct the A.O to examine the assessee s plea that payments were non taxable in India because of the beneficial provisions of the DTAAs with respective countries. The A.O shall grant adequate opportunity of being heard to the assessee and will also permit him to furnish necessary documents and evidences in support of his claim. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.

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• 2025 (1) TMI 1276
  Addition relatable to 12 creditors - assessee could not explain the sources of loan - as argued assessee has discharged her onus by providing the PANs, that the entire transactions were carried through the Banking Channels including repayment - HELD THAT:-Onus was on assessee to establish the creditworthiness of the loan creditors and the assessee has failed to file sufficient documentary evidences, in this regard, to the satisfaction of lower authorities. Further, it would make no difference whether the amounts are received in cash or through banking channel. The provisions of Sec.68 would still be attracted to the assessee in both the cases. In fact, the assessee is debarred from accepting loans in cash beyond specified limits as laid down u/s 269SS. Therefore, these arguments stand rejected. Considering the fact that the assessee has failed to discharge the onus of establishing the creditworthiness of the 12 parties, we provide another opportunity to the assessee to substantiate the same before Ld. AO. Accordingly, the issue of impugned addition stand restored back to the file of Ld. AO for fresh consideration with a direction to the assessee to substantiate the loan creditors. Appeal stand allowed for statistical purposes.

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• 2025 (1) TMI 1275
  Unexplained cash deposits in the bank account - cash sales of the Assessee for the year under consideration were higher than that of earlier assessment year - Assessee explained that the cash deposits were out of sale proceeds of the Assessee - HELD THAT:-Assessee has explained that the Assessee during the year, was a trader of artificial goods and flowers. That during the year, the Assessee decided to stop its business. Assessee, therefore, sold its opening stock at discounted rates resulting into higher sales during the year under consideration as compared to the earlier years. Assessee has further submitted that there is no rebuttal to the fact on the file that the Assessee was having opening stock out of which the said sales were made. That the Sales tax / VAT Return were also filed by the Assessee. No justification on the part of the lower authorities in treating the deposits made by the Assessee out of the sales of the opening stock as income from undisclosed sales. Decided in favour of assessee.

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• 2025 (1) TMI 1274
  Applicability of transfer pricing provisions to the transactions between an enterprise and its Permanent Establishment ( PE ) - Whether or not the transactions between an enterprise and its foreign permanent establishment can be considered international transactions for the purpose of section 92B, and accordingly can be subjected to the arm s length price adjustment? - HELD THAT:- The ultimate aim of Chapter -X of the Act is to determine the arm s length price of the transaction. The methods prescribed are only the means of achieving the object of the ALP determination. The purpose of transfer pricing provisions is to achieve reasonable, fair and equitable profits and tax in India. The above view is also echoed by the Hon ble Supreme Court in Morgan Stanley Co [ 2007 (7) TMI 201 - SUPREME COURT] wherein observed that the object behind enactment of transfer pricing regulations is to prevent shifting of profits outside India. The transfer pricing provisions need to be interpreted keeping in mind the above objective of fair and equitable tax allocation. In the instant case, the PO has undertaken onshore services on behalf of HO and incurred substantial losses in executing such services. Whether unrelated party would have taken up the obligation of rendering onshore services, which at the threshold itself result in loss? - As per section 92B(1), to qualify as international transaction, atleast one party should be non- resident. The residential status of the branch is that of its head office. In case of Indian enterprise and its foreign PE, both are residents in India. Thus, the condition that at least one party should be non-resident does not get fulfilled in the case of Indian enterprise and its foreign branch. However, in the case of foreign enterprise and its Indian branch, both parties are non-residents. Thus, the condition of section 92B(1) of the Act that atleast one party should be non- resident gets satisfied in the case of foreign enterprise and its Indian branch. Whether PE a Separate Enterprise? - PE in India of a foreign enterprise, Article 7(2) provides that profits, which the PE might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities shall be attributed to India. So, PE has to be treated as a distinct and separate enterprise. So even if profit attribution has to be done as per treaty, PE has to be treated as a distinct and separate enterprise from the HO. Therefore, even under the tax treaty, the PE is a separate enterprise. Since, PE is a separate enterprise from the HO for the purpose of transfer pricing provisions, the decisions relied by the learned AR to contend that one cannot generate income by dealing with self are not applicable in given context. The transfer pricing provisions are applicable to transactions between two enterprises and not between two persons. Thus, decisions in the case of Sir Kikabhai Premchand [ 1953 (10) TMI 5 - SUPREME COURT] Betts Huett Co Ltd [ 1978 (4) TMI 58 - CALCUTTA HIGH COURT] Sumitomo Mitsui Banking Corporation [ 2012 (4) TMI 80 - ITAT MUMBAI] are not applicable in the context of transfer pricing. Income arising from International Transactions - AR has contended that there is no income arising out of international transactions in the current case as there is only fund movement between HO and PE and actual transactions are between PE and third parties - Section 92 of the Act brings income arising from international transaction within the ambit of transfer pricing provisions. The international transaction is between the associated enterprises. So as a first step one needs to evaluate whether there are two enterprises and such enterprises qualify as associated enterprises u/s 92A of the Act. Such AE s should have entered into international transactions satisfying the test of either u/s 92B(1) or 92B(2) of the Act. Such international transaction should give rise to income which is within the taxing ambit of charging provisions of the Act. In our view, PO and HO are separate enterprise. Further as per Article 7(2) of the India-China DTA A and para 15, 16 17 of the commentary on Article 7 on Model tax convention published by OECD in 2010 also states that permanent establishment is to be treated as a functionally separate entity. PO and HO have transaction between them which has an impact on income . Both are non-residents and thus satisfy the basic test of section 92B of the Act. Whether they qualify as AEs within the meaning of section 92A is discussed below. Associated Enterprise - AR submitted that the TPO has erred in concluding that PO and HO are associated enterprise merely by evaluating section 92A(1) - Transaction between an enterprise and an unrelated person should have been influenced by the associated enterprise of the first party having an arrangement or agreement with the unrelated party. The associated enterprise and the unrelated person can be said to have exercised influence over the transaction in question, if the terms of such transaction would have been different but for such influence. Therefore, where the associated enterprise and the unrelated person have not been able to influence the specific transaction between an enterprise and the unrelated person, section 92B(2) of the Act does not have any application. The influence to attract section 92B(2) of the Act can take two forms. Firstly, it can be in the form of a prior agreement in relation to the transaction in question (between the associated enterprise and the unrelated person). Secondly, the terms of the transaction have to be in substance determined by the associate enterprise and the unrelated party. It is possible that these two forms may be satisfied in a fit case. DTAA v Act - PE of a foreign enterprise in India, the Article 7(2) provides that profits that will be attributed to PE shall be profits which the PE might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a PE. Article 7(2) of the India China DTAA leads to the conclusion that determination of profits under the hypothesis of the PE being a distinct and separate enterprise, dealing wholly independently with the enterprise of which it is a PE, is nothing but adherence with the arm s length principles. The underlying philosophy of TP provisions and Article 7(2) is same wherein both try to analyse as to how third parties would have dealt with each other under uncontrolled conditions. Thus, contention of the learned AR that there is conflict between Article 9 of the DTAA and domestic TP provisions is rejected. We are of the view that the transaction between foreign enterprise and its PE in India can be considered as an international transaction and be subject to ALP adjustment. The matter may be placed before the Division Bench to give effect to the direction of this Order

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• 2025 (1) TMI 1273
  Status of the Appellant is a Non-Resident Indian and not a Resident of India - Period of stay in India - interpretation of the provisions of DTAA and section 6 of the Act defining the residential status of assessee - HELD THAT:- According to second condition if assessee has remained in India in last four years for more than 365 days and in relevant previous year for more than 182 days, then only shall be treated as non-resident Assessee submitted that in relevant previous year, he was in India for 132 days only which is less than 182 days and therefore, assessee is not resident as per either of the conditions of section 6(1) of the Act. The assessee has filed evidence in support of employment outside India and also filed visit passes. In view of the evidences filed before us, we feel it appropriate to restore this issue back to the file of the Assessing Officer for verification of residential status of Singapore as well non-residential state in India particularly in view of the Explanation 1 to section 6(1)(c) of the Act and decide the issue in accordance with law. The grounds Nos. 1 to 3 of the appeal of the assessee are accordingly allowed for statistical purposes.

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• 2025 (1) TMI 1272
  Addition u/s 69A - cash deposited in bank account out of sale proceeds which stood recorded in the books of account and credited to profit loss account - HELD THAT:- Sales made by the assessee and shown in the regular books of account have been accepted as such by VAT authorities while framing the VAT assessment; that the assessee was having sufficient stock in hand for making the impugned sales during the demonetization period and that it is not the case of the AO that the assessee has shown bogus purchases to show bogus sales to cover up cash deposited during the demonetization period. We hold that the CIT(A) decision in infirm and perverse to the facts on record in confirming the addition u/s 69A. Accordingly, the addition made by invoking provisions of section 69A of the Act is held to be illegal and bad in law and as such, same is deleted. Applicability of the tax rate as per provisions of section 115BBE also stand rejected, accordingly. Decided in favour of assessee.

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• Customs

• 2025 (1) TMI 1271
  Jurisdiction - power of Additional Director General, DRI to issue SCN - Confiscation of goods - rejection of declared value - it was held by CESTAT that the Additional Director General, DRI did not have the jurisdiction to issue the show cause notice. HELD THAT:- The proceedings are now remitted back to the Customs, Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkata. Appeal disposed off.

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• 2025 (1) TMI 1270
  Revocation of Custome Broker License - forefeiture of security deposit - levy of penalty - violation of Regulation 11(n) and Regulation 17(9) of the Customs Brokers Licensing Regulations, 2013 - HELD THAT:- The reasoning given by the CESTAT is that the KYC documents were duly submitted by the Respondent herein. However, the Department s case is that the Respondent did not explain as to how it had obtained the said KYC documents. Hence, there were serious irregularities in the conduct of its business by the Respondent. In the opinion of this Court, since the requisite KYC documents had been submitted by the Respondent and the main irregularity was in respect of the exporter Shri. Rakesh Gupta, proprietor of M/s. U.P. Garments, whose Importer Exporter Code (hereinafter IEC ) had been misused by other exporters in conspiracy with each other, the Respondent s Customs Broker license cannot be cancelled for perpetuity. The Respondent has already suffered severe consequences due to the cancellation of the said license for several months. Conclusion - The Court is of the opinion that the impugned Final Order does not warrant any interference. Moreover, it is noted that the CESTAT also records that there is no ground set out in the Order-in-Original as to how the Respondent had violated the requirement of declaration under Regulation 17 (9) of the Customs Brokers Licensing Regulations, 2013. The Court is of the view that there is no substantial question of law that has arisen in the present appeal - Appeal dismissed.

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• 2025 (1) TMI 1269
  Power of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) to condone the delay in filing the appeal - sufficient cause was made for not presenting the appeal within the said period - import of provisions of Section 129(a) of the Customs Act to condone the delay in filing the appeal under Section 128 of the Customs Act. HELD THAT:- There is nothing untoward in the order of the Commissioner of Customs (Appeals) dated 13.10.2008 dismissing the appeal on the ground of delay, as the Appellate Commissioner does not have the power to condone delay beyond 30 days. However, the second appeal before the CESTAT also met with the same fate, even though it was filed within the statutory time limit. The CESTAT ought to have looked into the matter on merits as the reasons for condonation of delay before the Commissioner are compelling. The Appellant s representation before the third respondent had been made on 22.08.2007 and admittedly, no orders have been passed thereupon. Hence, it is quite possible and plausible, that the appellant might have been awaiting orders on the representation which delayed the filing of the statutory appeal. The impugned order of the CESTAT has taken note of none of the aforesaid parameters and has cursorily closed the appeal. The substantial questions of law that are admitted touch upon the aspect of limitation alone - the question of exemption must also be addressed which, stands fully covered by the order of the CESTAT, Bangalore dated 10.05.2006 [ 2006 (5) TMI 371 - CESTAT, BANGALORE] , in favour of the Appellant. Conclusion - The substantial questions of law regarding the limitation were answered in favor of the appellant. Appeal allowed.

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• 2025 (1) TMI 1268
  Levy of penalty u/s 114 of the Customs Act, 1962 - attempted export of prohibited items, specifically red sand/armature shaft - case of petitioner is that the petitioner has no direct role to play in the alleged export of red sand/armature shaft and that the petitioner has been made a scape goat - HELD THAT:- Even if the role of the petitioner in the alleged illegal export of red sand/armature shaft is confirmed, the imposition of penalty of Rs. 2/- Crores, on a Senior Manager cannot be countenanced as it appears to be disproportionate with the gains that the petitioner would have made from the alleged involvement in the export of red sand/armature shaft. Therefore, the impugned order is set aside insofar as imposition of penalty under Section 114 of the Customs Act, 1962 on the petitioner and the case is remitted back to the respondent to pass a fresh order on merits taking note of the financial position of the petitioner and the purported gain the petitioner would have made from the alleged involvement in the export of the contraband goods. This exercise shall be carried out by the respondent within a period of three (3) months from the date of receipt of copy of this order. Petition disposed off by way of remand.

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• 2025 (1) TMI 1267
  Absolute confiscation - penalties - smuggling of 2 kgs. of gold - discharge of burden of proof under Section 123 of the Customs Act, 1962 - HELD THAT:- The gold recovered from Md.Sajid Kamal Mondal has been absolutely confiscated on the premises that the invoices produced by the appellant, Rahul Harichandra Pawar are found to be correct, since the goods were handed over to Md.Sajid Kamal Mondal without any documents and the same casts serious doubt about legality of the same. Upon presumption that a genuine businessman could have issued proper challan for interstate movement of such high value goods. Therefore, he has held that as the person who has apprehended that the appellant has failed to discharge his burden of proof under Section 123 of the Customs Act, 1962 and ordered for absolutely confiscation of the gold in question. Admittedly, in this case, there is no marking of foreign origin on the gold nor it is the case of interception at Port or Airport or any International Border. Further, the purity of seized gold is found between 994.2 to 996.9. In that circumstances, the appellants are able to discharge his burden of proof under Section 123 of the Customs Act, 1962 for acquisition of the said gold in question. Further, the Revenue has failed to discharge their onus of reasons to believe that the gold in question is smuggled in nature. Conclusion - The appellants are able to discharge his burden of proof under Section 123 of the Customs Act, 1962 for acquisition of the said gold in question. 2 kgs. gold recovered from Md.Sajid Kamal Mondal, belongs to Rahul Harichandra Pawar, cannot be absolutely confiscated. Accordingly, the absolute confiscation of the gold is set aside. Consequently, no penalties are imposed on both the appellants. Appeal disposed off.

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• Insolvency & Bankruptcy

• 2025 (1) TMI 1266
  Fresh valuation of shares of The Learning Internet Inc. held by EAPPL ordered by the Adjudicating Authority - scope of the Adjudicating Authority in directing fresh valuation - assets of the subsidiary company are different from the assets of the holding company or not - preservation of values of shares of EAPPL by Resolution Professional - No reasoning for under valuation has been recorded - three valuation reports quoted by the Respondent No. 1 to justify the revaluation. Whether the Adjudicating Authority could have passed the directions to the Respondent No 2 to approach the IBBI for appointment of valuers for valuation of shares The Learning Internet Inc. based on the alleged under valuation of shares by the Respondent No. 1? HELD THAT:- The Adjudicating Authority has rightly held that in terms of the Code and the Regulation, the Corporate Debtor and its subsidiary are two legally distinct entities. It has also been correctly held that the assets of the subsidiary company cannot be treated as part of the assets of the Corporate Debtor. The Adjudicating Authority further rightly held that it is not the duty of the Respondent No. 2 to preserve the assets of the subsidiary company which are not under control of the Corporate Debtor or which are not part of estate of the Corporate Debtor. The Adjudicating Authority has also not found anything wrong in the selling of the shares of The Learning Internet Inc. - However, the Adjudicating Authority has held that the Respondent No. 1 being the corporate guarantor of the principal borrower i.e., EAPPL (subsidiary of the Corporate Debtor) has right to protect its interest in corporate guarantee and therefore the Respondent No. 1 can take certain step to protect himself to reduce risk of standing as guarantor to EAPPL. The Respondent No. 1 aggrieved due to alleged under valuation shares of The Learning Internet Inc., could have approached the liquidators or could have invoked the suitable jurisdiction, if any, in accordance with the relevant insolvency law of the Singapore before the High Court of Singapore, which he has not done as confirmed by the Respondent No. 1 in reply put by this Appellate Tribunal to Respondent No. 1 during the pleadings - it does not give any right to the Respondent No. 1 to approach the Adjudicating Authority on this issue and without any doubt, the Adjudicating Authority did not has any jurisdiction to give such directions w.r.t. fresh valuation in this regard as contained in Para 27 of the Impugned Order. The valuations were done at different time periods and in different context on different issues and we are, therefore, of opinion that such valuation reports could not have been relied upon by the Adjudicating Authority. In any case such valuation reports were done long back in 2008 and 2014-2021 which would have been conducted based on the estimates and future projections relevant at that times and cannot be relied upon now. Regulation 21A of the Liquidation Regulations has no applicability in the present Company Petition which is for insolvency proceeding of the Corporate Debtor. Conclusion - The assets of a subsidiary cannot be treated as assets of the holding company in insolvency proceedings. The moratorium under the IBC applies only to the assets of the Corporate Debtor. The NCLT s directive for a fresh valuation of shares set aside, stating that it was beyond the scope of its jurisdiction. The impugned order set aside - appeal allowed.

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• 2024 (12) TMI 1525
  Condonation of delay in filing the appeal under Section 61 of the Insolvency and Bankruptcy Code - Whether under the given factual set of circumstances, the provisions of Section 14 of the Limitation Act, could at all be made applicable to grant the benefit of limitation to the Appellant, during the pendency of the proceedings by way of application? - HELD THAT:- There was a conscious intent that the Ld. Senior Counsel for the Appellant has chosen to address upon Company Appeal (AT) (CH) (Ins) No.192/2022, which is against the Impugned order that was decided on 28.04.2022, which was arising from the interlocutory application proceedings of the same company petition and the principle proceedings of admission into the CIRP, under Section 9, which was made as the subject matter of the Company Appeal (AT) (CH) (Ins) No.193/2022. For the reasons best known, the appeal CA (AT) (CH) (Ins) No.193/2022, was chosen to be addressed upon at a later stage for the reason being that, the consequential effect would be that since the appeal itself was preferred with 45 days of delay, may be that the exclusion which has been sought by the Appellant for a period from 15.03.2022 to 28.04.2022 of 44 days will not be a period, which will be falling within the exemption clause to the proviso, which is strict in its applicability and upon failure to succeed in pressing upon the Condone Delay Application, it would have a direct bearing on the Company Appeal (AT) (CH) (Ins) No.192/2022. Hence, the aspect of exclusion, which has been sought to be argued by the Ld. Counsel for the Applicant, since would be a variable factor in each of the cases depending upon the fact involved therein, cannot be universally made applicable as a concept for the purposes of dealing with an aspect of limitation, when the law itself very strictly creates a restriction on the Appellate Tribunal that while determining the aspect of limitation, it cannot be barge upon, and extend the period beyond which is prescribed under the proviso to Section 61 (2). The Hon ble Apex Court in Kalpraj Dharamshi [ 2021 (3) TMI 496 - SUPREME COURT ] has attracted the implications of Section 14 of the Limitation Act because writ remedy was not statutorily contemplated under law. These are not the circumstances which would apply for this instant case, for the purposes of extending the limbs of the interpretation of limitation as prescribed under Section 61 (2), owing to the reason that I B Code itself has been given an overriding effect to the other law and once it contains a self-contained provision, governing the field of the limitation it has to be determined, on the basis of the strict mandate of the statute provided under Section 61 (2) and at the most it could be extendable upto the upper limit under the proviso to Section 61 (2) of I B Code. Hence, the Condone Delay Application which has been sought for, is 45 days, which is outside the ambit of the provisions contained under Section 61(2), cannot be allowed. Application for condonation of delay rejected. Withdrawal of Corporate Insolvency Resolution Process (CIRP) proceedings under Section 12A of the I B Code - Whether the Appellant can compel the Respondent to withdraw the Corporate Insolvency Resolution Process (CIRP) proceedings under Section 12A of the I B Code based on a claimed debt settlement? - HELD THAT:- While exercising powers under Rule 11, the Ld. NCLAT has approved the settlement of a dispute in relation to the dues payable to the Respondent No.03 therein the said case. This would have been a case, had the controversy ended at the stage when there was a Debt Settlement Agreement, the fact of which stands vehemently denied by the Respondent. We feel it apt to observe at this stage itself, that authority of a Hon ble Apex Court laying down the law and that too which is procedural in nature will always depend upon the facts and circumstances of each and every case and the same cannot be made universally applicable irrespective of considering the facts and circumstances which are involved therein. The instant appeal would stand answered against the Appellant and we are of the considered view, that a distorted interpretation to the Judgment relied by the Appellant, cannot be given in a manner to mould a Judgment, in a manner as if a right which are given to an Applicant to withdraw an application under Regulation 30A to be read with Section 60 could be chiselled in a manner to impose upon an Applicant by forcing upon him by soliciting a judicial direction to withdraw his own proceedings over which he has a right to pursue and continue in the light of the mandate of Article 14 to be read with Article 21 of the Constitution of India, as there cannot be a deprivation of right to judicial remedies to the citizen of this country of ours, by a judicial adjudication, where a deprivation is being attempted to be forced upon him by calling upon a party by a judicial order for not to pursue a proceeding in which he otherwise intends to continue, being the master of the proceedings drawn by him. Appeal dismissed. Conclusion - i) Section 14 of the Limitation Act does not apply to intra-court applications within the same proceeding, as it is intended for proceedings in courts lacking jurisdiction. ii) The decision to withdraw CIRP proceedings under Section 12A lies with the Applicant, and judicial directions cannot compel such withdrawal.

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• PMLA

• 2025 (1) TMI 1265
  Seeking grant of Regular Bail after prolonged incarceration - Money Laundering - twin conditions as contemplated under Section 45 of the PMLA or not - Section 439 of the Code of Criminal Procedure, 1973, read with Sections 45 and 65 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Supreme Court in the case of Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT (LB)] , considered the applicability of Section 436A of the Cr. P. C. which is concerning the maximum punishment for which an under trial prisoner can be detained, held that Section 436A of the Cr. P .C. has come into effect on 23.06.2006 and the said provision is the subsequent law enacted by the Parliament and the same will prevail and will apply in spite of rigors of Section 45 of the PMLA Act. As per the settled legal position whereas at commencement of proceedings, the courts are expected to appreciate the legislative policy against grant of bail as enacted under Section 45 of the PMLA Act, but the rigours of such provisions will melt down where there is no likelihood of trial being completed within a reasonable time and the period of incarceration already undergone has exceeded a substantial part of the prescribed sentence - Thus, inspite of restrictive statutory provisions like Section 45 of the PMLA Act, the right of the accused undertrial under Article 21 of the Constitution of India cannot be allowed to be infringed. In such a situation, statutory restrictions will not come in the way of the Court to grant bail to protect the fundamental right of the accused under Article 21 of the Constitution of India. It is an admitted position that both the cases will be tried simultaneously and trial has not yet commenced. Thus, this is a case where the trial is unlikely to conclude any time soon and is likely to take a considerably long time. As noted hereinabove, the Applicant has completed more than half of the punishment. The maximum punishment which can be imposed on the Applicant is 7 years and the Applicant has completed about 3 years and 10 months of imprisonment i.e. more than half of the punishment - the Applicant is entitled to the benefit of Section 436A of the CrPC. Conclusion - i) The applicant is granted bail with a personal bond of Rs. 10,00,000/- and sureties. ii) The applicant is restricted from entering District Pune except for trial-related purposes. iii) The applicant must report to the Enforcement Directorate s Mumbai office twice a month. iv) The applicant must not tamper with evidence or influence witnesses. v) The applicant must surrender his passport and attend the trial regularly. The Applicant Anil Shivajirao Bhosale be released on bail in connection with ECIR No. ECIR/MBZO-II/20/2020 registered with the Enforcement Directorate on his furnishing P. R. Bond of Rs. 10,00,000/- with one or two solvent sureties in the like amount and subject to fulfilment of conditions imposed - bail application allowed.

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• 2025 (1) TMI 1264
  Money Laundering - challenge to provisional attachment order - large scale illegal extortion punishable under section 384 read with 120 B of IPC - Non application of mind by the Adjudicating Authority - Absence of predicate offence - No nexus between the appellant and alleged proceeds of crime - appellants are bonafide purchaser of the property attached by the respondents - Absence of reasons to believe in the SCN. Absence of predicate offence - HELD THAT:- The Apex Court in Sunil Kumar Agarwal [ 2024 (5) TMI 1346 - SC ORDER ] found that the petitioner has already undergone incarceration for a period of 1 year and 7 months and was otherwise not named in the FIR, but without expressing any opinion on the issue, the interim bail was granted. The efforts of the appellant is to mis-lead the Tribunal by giving an impression of an order of the Apex Court to hold that the predicate offence does not exist and thus the proceedings under PMLA is not tenable. The written arguments also make a reference of it. The perusal of the order for grant of the bail to the accused would reveal it to be on the ground of long period of incarceration in violation of Article 21 of the Constitution. The bail was granted on that ground. It was with the clarification that observation made in the order is for the purpose of grant of bail and not to have any effect on the merit of the complaint. There are no judgement of the Apex Court in favour of the appellant rather detailed judgement of the Supreme Court in the case of Saumya Chaurasia [ 2023 (12) TMI 685 - SUPREME COURT ] holds it to be a case of schedule offence. No nexus between the appellant and the alleged proceeds of crime - HELD THAT:- In the instant case, the syndicate of Suryakant Tiwari has not extorted money overnight but during the period of its operation which was started much prior to the registration of the FIR. It is otherwise settled law of the land that the properties acquired prior to the commission of the crime can also be made subject matter of the attachment if the proceeds are not available or vanished - The appellant may have acquired the property prior to the registration of the FIR but period of operation of crime started much prior to the registration of the FIR and otherwise if the proceeds has been vanished or siphoned off, the property of the equivalent value can be attached. It is otherwise submitted that appellants have been named for commission of the offence under the Act of 2002. Appellants are bonafide purchaser of the property - HELD THAT:- The appellants have failed to disclose the source to acquire the cash used for acquisition of the properties and illustratively we may refer to 52 properties acquired by M/s. Indermani Minerals (India Pvt. Ltd.),showing it to be through bank channels and based on their financial condition - The statement recorded under section 50 of the Act of 2002 coupled with the documents seized from the custody of Suryakant Tiwari are sufficient to show layering of proceeds of crime and to channelize the same, immovable properties were purchased. The appellant Company has not purchased one or two properties, rather purchased as many as 52 properties without showing the source and document to prove it. In the appeal filed by them, even the Income Tax Return for financial year 2022-2023 was not enclosed. It was submitted later without showing its relevance for purchase of properties prior to it. It is found that merely using the banking channel for purchase of the property by layering the money with deposit of cash in the Bank without disclosing the source with the material and proof, the source would not stand proved. Absence of reason to believe - HELD THAT:- The appellants submits that no reasons to believe was given by the Adjudicating Authority while issuing show cause notice. It should have been for each appellant separately - There are no contest on the aforesaid before the Adjudicating Authority, otherwise it has given reasons to believe for issuance of notice. It is not necessary that for the show cause notice, it should be against the person committing the offence under section 3 of the Act of 2002, but can be against the person in possession of crime proceeds. It is not necessary to give reasons to believe separately but can be for the noticee together. The appellants are either the accused or in possession of proceeds of crime and has been indicated in the show cause notice. The appellants are victims of extortion - HELD THAT:- The appellants are victims of extortion because they were involved in transportation of the coal and thereby had to pay Rs. 25/- per ton to the main accused. The argument aforesaid has been raised specifically in the appeal preferred by M/s. Indermani Minerals (India Pvt. Ltd.),. This argument endorsed the case of the respondents where serious allegations have been made against syndicate headed by Suryakant Tiwari for extortion of money and if the appellant was also victim, it could not be clarified as to why it did not register an FIR against the accused. Conclusion - The appellants failed to provide credible evidence to substantiate their claims of bona fide acquisition and the absence of a nexus with the proceeds of crime. The existence of a predicate offence and the nexus between the appellants and the proceeds of crime is reaffirmed. The confirmation of the provisional attachment order upheld. Appeal dismissed.

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• Service Tax

• 2025 (1) TMI 1263
  Challenge to action of the designated committee formed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) by issuing Form No. SVLDRS-3 dated 04.12.2019 - petitioner s case falls under the arrears category or the litigation category under SVLDRS - recovery of service tax with interest - non-payment of service tax under Construction Service in respect of Commercial and Industrial Building and Civil Structure during the period from April 2014 to June 2017. HELD THAT:- Considering the provisions of the SVLDRS, it is apparent and crystal clear that the case of the petitioner would fall in the category of amount in arrears as admittedly the petitioner has not preferred any appeal before 30.06.2019 challenging the Order-in-original and the demand raised in the Order-in-original amounting to Rs. 32,27,856/-has achieved finality so far as the petitioner is concerned and accordingly, the petitioner would be entitled to the benefit of the SVLDRS which has a basic feature of reducing the disputes and create an atmosphere of trust between the assessee and the respondent-department. However, in the facts of the case it appears that, the designated committee, contrary to the provision of the SVLDRS and with total non-application of mind has issued Form SVLDRS-2 and without taking into consideration reply of the petitioner 29.11.2019 has issued Form SVLDRS-3 in a mechanical manner. The petitioner has been vigilant to challenge such SVLDRS-3 immediately by preferring this petition and this Court has directed the petitioner to deposit 60% of the tax arrears amounting to Rs. 31,32,551.60 which petitioner has already deposited. Therefore, in the facts of the case, when there was no appeal pending filed by the petitioner, the amount of demand raised in the Order-in-original would become the tax dues being the amount in arrears as per clause (e) of section 123 of SVLDRS and accordingly, the petitioner is entitled to get the benefit of the provision of section 124 of the SVLDRS by paying 60% of the amount in arrears as tax dues which the petitioner has already deposited. Conclusion - i) The petitioner s case is categorized under amount in arrears as per Section 121(c) and Section 123(e) of the SVLDRS. ii) The petitioner is entitled to the relief of paying 60% of the tax dues, having already deposited the amount. iii) The designated committee s issuance of Form SVLDRS-3 demanding a higher amount was incorrect and is set aside. Petition allowed.

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• 2025 (1) TMI 1262
  Levy of service tax - Business Support Service - cost sharing among the group Companies - Demand of service tax on the differential value of Profit Loss Account and ST-3 returns - Recovery of ineligible CENVAT Credit - Extended period of limitation. Levy of service tax - Business Support Service - cost sharing among the group Companies - HELD THAT:- The appellant incurred expenditure on behalf of the group companies and such expenditure has been shared among the group Companies at the ratio agreed in the agreement dated 01-04-2008. It is observed that there is no service element involved in this case. Thus, we find that in these circumstances, the demand of service tax under the category of Business Support Service is not sustainable. We find that the issue is no more res integra as the demand of Service Tax on cost sharing is settled by the decision of the Hon ble Supreme Court in M/S GUJARAT STATE FERTILIZERS CHEMICALS LTD. ANOTHER VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2016 (12) TMI 103 - SUPREME COURT] , wherein, it has been held that demand of Service Tax on cost sharing is not sustainable - the demand confirmed in the impugned order under the category of Business Support Service is not sustainable. Demand of service tax on the differential value of Profit Loss Account and ST-3 returns - HELD THAT:- The ld. adjudicating authority has not given any finding regarding the liability of service tax on the differential value. It is the settled position of law that demand of Service Tax cannot be confirmed merely on the ground that there is a difference in the value of Profit Loss Account and ST-3 returns. This issue is covered by the decision of Tribunal, Kolkata in the case of M/S BALAJEE MACHINERY VERSUS COMMISSIONER OF CGST EXCISE, PATNA II [ 2022 (8) TMI 704 - CESTAT KOLKATA] where it was held that Since the records have been duly audited, the demand cannot be raised for the same period on account of change in the opinion. Further, we find that the Appellant had duly submitted the VAT Returns which have been recorded by the Ld. Commissioner in the impugned order. - the demand of service tax of Rs.88,051/-, confirmed merely on the basis of the differential value between the Profit Loss Account and ST-3 returns is not sustainable. Recovery of ineligible CENVAT Credit - Extended period of limitation - HELD THAT:- There is no allegation of suppression, wilful misstatement or fraud in the impugned notice. In the impugned order also, the ld. adjudicating authority has not given any finding regarding suppression of facts or wilful misstatement for invocation of the larger period of limitation. Thus, the demand confirmed by invoking the extended period of limitation is not sustainable - the demand of irregular credit confirmed in the impugned order is not sustainable. Conclusion - i) Service Tax cannot be levied on cost-sharing arrangements lacking a service element. ii) Demand confirmed merely on the basis of the differential value between the Profit Loss Account and ST-3 returns is not sustainable. iii) As entire demand is time barred, the demand of irregular credit confirmed in the impugned order is not sustainable. The impugned order set aside - appeal allowed.

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• 2025 (1) TMI 1261
  Entitlement to interest on the refund of Rs.12,00,00,000/- from the date of deposit until the date of refund - Rate at which the interest is to be computed - Adjustment of the amount Rs.64,73,631/- from the total refund sanctioned to the appellant. Entitlement of interest on the amount of Rs.12,00,00,000/- from the date of deposit till the date of refund - HELD THAT:- This issue is no more res integra as the same has been decided by the Hon ble Apex Court in the case of Sandvik Asia Limited vs. Commissioner of Income Tax [ 2006 (1) TMI 55 - SUPREME COURT ], which has been followed by the jurisdictional High Court of Punjab Haryana in the case of COMMISSIONER OF CENTRAL EXCISE, PANCHKULA VERSUS RIBA TEXTILES LTD. [ 2022 (5) TMI 1531 - PUNJAB AND HARYANA HIGH COURT ], wherein the Hon ble High Court has upheld the order of the Tribunal granting interest on refund to the assessee computable from the date of payment till the date of refund @12% per annum. It is pertinent to note that the review application filed by the Revenue against this judgment has also been rejected by the Hon ble Punjab Haryana High Court - the Hon ble Punjab Haryana High Court in the case of Sunrise Immigration Consultants Private Limited vs. Union of India [ 2023 (4) TMI 504 - CESTAT CHANDIGARH ], after relying upon the decision in the case of Riba Textiles Limited, has re-affirmed that the petitioner was entitled to refund of the amount deposited during investigation along with interest @12% computable from the date of deposit of the amount till the date of refund. Rate at which the interest is to be computed - HELD THAT:- The Tribunal as well as various Courts in catena of decisions have consistently held that interest is payable from the date of deposit till the date of refund @12% per annum. In this regard, we may refer to the decision of the Tribunal in the case of Indore Treasure Market City Pvt. Ltd. [ 2024 (5) TMI 367 - MADHYA PRADESH HIGH COURT ] wherein the Tribunal after considering the various decisions of the Courts, has held that the assessee is entitled for interest on the amount of refund sanctioned @12% to be calculated from the date of payment till the date of disbursement - the appellant is entitled to receive interest on the amount deposited during investigation from the date of deposit of the amount till the date of its refund at the rate of 12% per annum. Adjustment of the amount Rs.64,73,631/- from the total refund sanctioned to the appellant - HELD THAT:- The Adjudicating Authority has committed an error because the said demand was not confirmed by the Appellate Authority rather the said demand was set aside by the Appellate Authority in the case of Bharti Infratel Ltd. [ 2022 (9) TMI 1339 - CESTAT NEW DELHI ]. It is also found that in the case of Kisan Irrigations Infrastructure Ltd. [ 2016 (7) TMI 429 - CESTAT NEW DELHI ], the Tribunal has held that adjustment of refund against a confirmed demand during the pendency of an appeal amounts to coercive recovery and is not permissible under the law. Further, adjustment of demand confirmed by the Bharti OIO against the refund due to the appellant could not have been made prior to the Bharti OIO attaining finality. Further, the demand confirmed against Bharti Infratel Ltd was subsequently dropped vide Bharti OIA dated 13.03.2023; copy of the same has also been placed in the appeal paper-book - the amount adjusted from the total refund sanctioned to the appellant is refundable to the appellant at the rate of 12% per annum computed from the date of deposit till the date of its refund. Conclusion - i) The appellant is entitled to interest on the full refund amount from the date of deposit until the date of refund at a rate of 12% per annum. ii) The amount adjusted from the total refund sanctioned to the appellant is refundable to the appellant at the rate of 12% per annum computed from the date of deposit till the date of its refund. Appeal allowed.

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• 2025 (1) TMI 1260
  Levy of service tax on the appellant, Velur Town Panchayat - Renting of Immovable Property service - exemption of service tax for performing sovereign functions - local authority - extended period of limitation - HELD THAT:- In similar circumstances, this Tribunal had in the Appellants own case for the previous period in M/S. VELUR TOWN PANCHAYAT VERSUS THE COMMISSIONER OF GST CENTRAL EXCISE, SALEM COMMISSIONERATE AND M/S. MOHANUR TOWN PANCHAYAT VERSUS THE COMMISSIONER OF GST CENTRAL EXCISE, SALEM COMMISSIONERATE [ 2024 (6) TMI 1182 - CESTAT CHENNAI ] had remanded the matter to the Adjudicating Authority by taking note of the judgement passed by the jurisdictional High Court in the case of CUDDALORE MUNICIPALITY VERSUS THE JOINT COMMISSIONER OF GST CENTRAL EXCISE, THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE SERVICE TAX AND VIRUDHACHALAM MUNICIPALITY VERSUS THE ASSISTANT COMMISSIONER, OFFICE OF THE ASSISTANT COMMISSIONER OF GST AND CENTRAL EXCISE, CUDDALORE [ 2021 (4) TMI 500 - MADRAS HIGH COURT ], and the subsequent decision in the case of ST. THOMAS MOUNT CUM PALLAVARAM CANTONMENT BOARD VERSUS ADDITIONAL COMMISSIONER, COMMISSIONER OF GST AND CENTRAL EXCISE, CHENNAI [ 2023 (4) TMI 1024 - MADRAS HIGH COURT ]. Conclusion - It is required to take a detailed examination of whether the services in question fall within the scope of sovereign functions. Appeal allowed by way of remand.

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• 2025 (1) TMI 1259
  Refund of service tax paid on Government work during the period from April 2015 to December 2015 - time limitation - rejection of refund for the reason that it had been filed beyond the period of six months prescribed under section 102 of the Finance Act - HELD THAT:- Once the time limit of six months has been provided, it cannot be contended that merely because the character of the tax deposit would continue to be in the nature of the tax collected without authority of law and, therefore, no limitation can be prescribed for filing the refund application. The learned Member failed to take into consideration the terms of sub-section (3) of the section 102 while arriving at such a conclusion. The appellant also placed reliance of the judgment of the Karnataka High Court in KVR Construction [ 2012 (7) TMI 22 - KARNATAKA HIGH COURT] . The provisions of the section 102 of the Finance Act were not under consideration in this judgment. All that was considered was if service tax has been paid under a mistake, then the time limit provided under section 11B of the Central Excise Act would not be applicable. Conclusion - The statutory time limits must be adhered to, and neither the Tribunal nor the revenue authorities have the power to extend or ignore such limits. The refund claim was rightly rejected as time-barred. Appeal dismissed.

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• 2025 (1) TMI 1258
  Levy of service tax - services provided by the Asansol Durgapur Development Authority (ADDA), a government agency - the agency was performing statutory functions - quantification of the service tax demand - time limitation. HELD THAT:- The ADDA has been created under a specific statute and it performs all acts on behalf of the State Govt of West Bengal. Their accounts, income and expenditure etc. are all controlled by and are answerable to the State Government. Therefore, there are no hesitation to come to a conclusion that ADDA is performing sovereign functions on behalf of the State Government of West Bengal. The Bangalore Bench of CESTAT in the case of Karnataka Industrial Areas Development Board v. CCT, Bangalore (North), [ 2020 (6) TMI 227 - CESTAT, BANGALORE ], the coordinate Bench of Bangalore has held that the appellant is a statutory body discharging the statutory function as per the statute KIAD Act, 1966 and hence are not liable to pay service tax in view of the ratios of the various decisions cited supra. Thus, the assessee would be exempted from payment of Service Tax when they are performing sovereign functions. But it is also required to check if all the considerations received by ADDA would be in the course of sovereign function alone are if some of the services are commercial in nature. In the present case, though it stands established that ADDA is a statutorily created body, also recognized as such by ITAT for Income Tax purposes, and is seen to be performing some sovereign functions like collecting licensing fee and other fee on account the land development [which is required to be verified], the other services provided by them like that of Renting of Immovable property, Renting of Advertisement space, Leasing of Tangible goods like road roller are not eligible for Service Tax exemption - ADDA would be required to pay the Service Tax, since these services are not in any way on account of performing of any sovereign function. Quantification of the service tax demand - HELD THAT:- The Licensing Fee, Land Development fee would be in the nature of compulsory fee / mandatory fee, being collected as part of sovereign function and hence would be exempted. But no bifurcation has been carried out in the Annexure B to SCN, wherein the quantification is done. In respect of 2009-10, 2010-11 and 2011-12, even the above perfunctory work has not been undertaken. Simply the value shown in the Balance Sheet / Bank Statement have been taken to quantify the demand. Therefore, there are considerable force in the argument of the appellant that quantification of demand is neither scientific nor is properly backed by any concrete documentary evidence - there are no hesitation in holding that Service Tax demand for the 2009-10, 2010-11 and 2011-12 cannot be legally be sustained - the quantification adopted by the Revenue while issuing the SCN, even the confirmed demand of Rs. 2,95,48,401/- cannot be legally sustained. Time limitation - HELD THAT:- The ADDA a body created by statute and is undertaking various functions assigned to them by the State Govt. and is also rendering various taxable services. But it is an admitted fact that all their income and expenditure are subject to the control of the State Govt. Hence, it would be difficult to adduce any ulterior motive to ADDA to the effect that they have suppressed the facts with an intent to evade the Service Tax payment. It is also seen that the figures taken for quantification of demand have been derived the Income and Expenditure statement and Balance Sheet of ADDA, which shows that all the details have been disclosed in the records. Further, their reliance on ITAT order, and vehement argument about their being statutory body carrying out sovereign functions, shows that they may have carried bona fide belief that they are not required to the Service Tax. Hence, the SCN issued on 12.10.2012 for the 2007-2008 to 2011-12 is partly time barred. Accordingly, the confirmed duty for the extended period is legally not sustainable. Conclusion - i) ADDA is performing sovereign functions on behalf of the State Government of West Bengal. ii) The quantification of demand is neither scientific nor is properly backed by any concrete documentary evidence. iii) The proceedings were partly time-barred. Appeal filed by the appellant [ADDA] is allowed fully on merits. The Appeal filed by the appellant [ADDA] is allowed on time bar in respect of the confirmed demand for the extended period.

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• 2024 (12) TMI 1524
  Taxability - Sale of Extended Warranty, Consumer Care Services of Registration of Vehicles, Agency Commission from Maruti Udyog Ltd. and Commission received from DGS D - non-registration of the respondent s unit - HELD THAT:- Hon ble High Court has remanded the matter for reconsideration of the said demand. Appellant do not dispute the said demand in this remand proceedings as the same was never under challenge even in the appeal filed by them. They have admitted this demand of Rs 42,799/- even at the time of adjudication. Thus the demand made in respect of this amount is upheld and the impugned order in respect of all other demands made, set aside as the issue in respect of those has not been remanded for reconsideration as per the order of Hon ble High Court. Appeal disposed off.

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• Central Excise

• 2025 (1) TMI 1257
  Recovery of Central Excise Duty with interest and penalty - Clandestine Removal - opportunity to cross-examine the witnesses was not provided - denial of access to necessary documents - violation of principles of natural justice - HELD THAT:- It is true that the CESTAT has remanded the matter to the respondent No. 2 to supply the documents sought for by the petitioner as well as to provide the opportunity of cross-examination of the witnesses in compliance with the provisions of section 9D of the Central Excise Act,1944. The respondent No. 2, pursuant to the order of remand made by the Tribunal, issued the notice to 10 witnesses to remain present on 21.08.2024, however, on 21.08.2024, none of the ten witnesses remained present nor any request was made for adjournment, or any submissions were made by any of the witnesses. The respondent No. 2 therefore, recording the statement made by learned advocates appearing for the petitioner for hearing, proceeded to adjudicate the show-cause notice. It appears that the respondent No. 2 has taken into consideration all the grievances of the petitioner with regard to the violation of principle of natural justice which are again reiterated in this petition. Be that as it may, it is not required to entertain this petition on the ground of breach of principle of natural justice in view of the above observation made by respondent No. 2 which may be considered by the CESTAT in the appeal which may be filed by the petitioner under section 35E of the Central excise Act,1944. Conclusion - i) The petitioner s grievances regarding natural justice and document access should be addressed by the CESTAT. ii) The petition is not entertained though it may be maintainable under Article 226 of the Constitution of India with liberty to the petitioner to approach CESTAT challenging the impugned Order-in-original. iii) It is also observed that the time spent by the petitioner before this Court to be considered as bona fide by the CESTAT, if the petitioner file appeal before the Tribunal in accordance with law within four weeks from today without raising issue of delay. Petition disposed off.

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• 2025 (1) TMI 1256
  Entitlement to interest on the refund of a pre-deposit amount made in 2012, which was refunded following a favorable appellate decision in 2018 - interpretation and application of Sections 35F and 35FF of the Central Excise Act, 1944, as they existed prior to and after the amendments introduced by the Finance Act, 2014 - HELD THAT:- From the perusal of the section 35F it is evident that the amounts deposited in terms of this section are noting but duty. The use of phrase in this section pending the appeal, deposit with the adjudicating authority the duty demanded. Further from the perusal of Section 35 FF it is evident that in case the appeal is finally decided in favour of the appellant hen the amount, so deposited under Section 35 F shall be refunded along with interest for period after expiry of period of three months from the date of communication of order of Appellate Authority at the rates specified as per section 11BB. It is observed that while making the above substitution w.e.f. 06.08.2014 specifically by proviso to Section 35F and Section 35FF, it has been stated that the amount deposited under Section 35F of the Act, prior to commencement of Finance Act, 2014, will be governed by provision of Section 35F as it existed before the commencement. In view of the specific provision made in the Act, the refund claim of the deposit made will have to be considered in terms of Section 35FF as it existed on the date of deposit and the interest will be paid at the rate specified in Section 11BB after expiry of three months from the date of communication of the order of the Appellate Authority till the date. Reliance placed on the decision of the Hon ble Supreme Court in the case of Sandvik Asia [ 2006 (1) TMI 55 - SUPREME COURT] . Interpreting the above decision of Hon ble Supreme various benches of tribunal have concluded in the favour of the grant of interest form the date of deposit and at the rate of 12% (though not provided by the statute or any Notification issued in terms of Section 11BB or Section 35FF of the Central Excise Act, 1944). However it may also be noted that these decisions were in respect of the deposits made when there was no separate provision for refund of deposits along with interest. In that situation courts and tribunals were allowing interest from the date of deposit till the date of refund and were also prescribing the rate of interest as deemed fit. Conclusion - The appellant was not entitled to interest on the refunded amount as the refund was made within the statutory period, and the applicable legal provisions did not support the appellant s claim for interest from the date of deposit. Appeal dismissed.

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• 2025 (1) TMI 1255
  Confiscation of seized goods - provisional release on payment of redemption fine - penalty under Rule 25 of Central Excise Rules, 2002 - HELD THAT:- Since the main appellant has settled the issue under SVLDR Scheme, penalty imposed on co-noticees being the CEO and Managing Director of the main noticee is unsustainable. Similar issue decided in decision of the Tribunal in the matter of V K Agarwal Vs. CC, New Delhi [ 2023 (9) TMI 178 - CESTAT NEW DELHI] wherein it is held that without considering the directions given in the remand order and allowing cross examination, Commissioner has imposed penalties on the appellant, just for reason that the appellant did not settle the issue along with others under SVLDRS. Such approach of Commissioner cannot be justified. Even if the appellant has not approached under SVLDRS, Commissioner should have adjudicated as directed by Tribunal. No justification for imposition of penalty on reconsideration as per order of Tribunal is forthcoming. Conclusion - When a demand is settled under the SVLDR Scheme, penalties on co-noticees should not be sustained. Since the issue is squarely covered by the decision of the Tribunal in the matter of VK Agarwal, there are no reason to differ - appeal allowed.

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• 2025 (1) TMI 1254
  Refund of Excise duty paid under protest - appellant s activity of fabricating transmission towers amounting to manufacture or not - time limitation under Section 11B of the Central Excise Act - HELD THAT:- The amount collected by way of Central excise duty was illegal as the activity itself did not involve any manufacture and the same cannot be allowed to be retained by the Government. On the principle that tax can be collected only by authority of law, the observations of the Tribunal in the case of COMMISSIONER OF CUSTOMS, DELHI VERSUS POLYGLASS ACRYLIC MFG. CO. P. LTD. [ 2011 (6) TMI 305 - CESTAT, DELHI ] that when Central excise duty is collected illegally the same cannot be retained by the Government supports the case of the appellant. Such is the mandate of Article 265 of the Constitution of India. Once it is held that the Government is not entitled to retain the amount deposited by the appellant, the next issue is regarding the time limit for reversing the said amount to the assessee. The Madras High Court in M/S. NATRAJ AND VENKAT ASSOCIATES VERSUS ASSISTANT COMMISSIONER, SERVICE TAX [ 2009 (10) TMI 36 - MADRAS HIGH COURT ] and the Punjab and Haryana High Court in INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF C. EX., NEW DELHI [ 2010 (4) TMI 625 - PUNJAB HARYANA HIGH COURT ] held that once the tax was not payable at all, time limit does not apply for filing the refund of the said amount. The other issue that under protest was not made in the prescribed format, is irrelevant. It is a settled principle that on mere procedural technicalities, the relief cannot be denied, which otherwise is available to a party. For the period prior to the introduction of Rule 233B (01.06.1981), there was no specific provision prescribing any specific mode of endorsing under protest and, therefore, the appellant cannot be non-suited for not making proper endorsement. The refund claim cannot be rejected for non-compliance with the provisions of Rule 233B. The endorsement under protest on the gate passes by the appellant is sufficient to say that the appellant paid the duty under protest and hence, cannot be denied the refund of the amount illegally collected by the Department. The Apex Court in SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [ 2006 (1) TMI 55 - SUPREME COURT ] with reference to the provisions of the Income Tax Act has observed that in view of the express provisions of the Act the assessee is entitled to compensation by way of interest on the delay in the payment of amounts lawfully due to the appellant which were wrongly withheld by the Department for an inordinate long period. The Act itself recognised in principle, the liability of the Department to pay interest where the amount deposited by the assessee is unduly retained. Conclusion - i) Duty was collected by the Department under mistake of law for which no time limit applies and, therefore, the refund claim on the ground of delay has been wrongly rejected. ii) The endorsement on the gate passes, under protest is sufficient to indicate that the appellant has paid the duty under protest and hence, the refund claim cannot be rejected as time barred. iii) The retention of the amount which is in the nature of revenue deposit would be wholly unjustified being violative of Article 265 of the Constitution. iv) The appellant is entitled to the refund claim along with interest @ 12% per annum from the date of refund claim was rejected. The impugned order is set aside and the Department is directed to release the refund along with interest to the appellant - Appeal allowed.

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• 2025 (1) TMI 1253
  Recovery of Central excise Duty with interest and penalty - duty on intermediate product PPFMY which arises during the course of manufacture of the finished products - confirmation of duty with interest and penalty - HELD THAT:- As the Tribunal has in Appellant s own case M/S ASMA TRADERS VERSUS CCE ST, KANPUR [ 2018 (1) TMI 1535 - CESTAT ALLAHABAD] held that PPMFY arises during the continuous manufacturing process of Narrow Woven Fabric is not marketable and hence no goods/excisable goods comes into existence. The claim of the Appellant in the present proceedings that they were paying duty on the intermediate product goes contrary to this order as Appellant can pay duty only on the goods/ excisable goods which come into existence and are subject to duty. Undisputedly the Appellant has taken a cenvat credit on inputs used in the manufacture of finished goods. In terms of the condition of Exemption N/N. 30/2004-Central Excise the benefit of said Notification would not be available to them, and they are required to pay central excise duty on the finished goods - the demand has been confirmed against the Appellant without allowing the benefit of the duty already paid by them by treating PPMFY as excisable goods. The quantum demand confirmed needs to be worked out after making adjustment for the duty already paid. Conclusion - The demand for excise duty on the final product, Narrow Woven Fabric, due to the appellant s availing of CENVAT credit on inputs upheld. The penalty imposed under Section 11AC(1)(a) was set aside. Matter is remanded for re-quantification of the demand of duty, giving credit of the duty already paid - appeal allowed by way of remand.

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• 2025 (1) TMI 1252
  Penalties u/r 26(2) of the Central Excise Rules, 2002 - denial of certain Cenvat credit on the ground that the said credit was taken against the material which were never received by them or used by them for production of the finished goods - HELD THAT:- Rule 26(2) was introduced by Notification No.8/2007-CE(NT) dated 01.03.2007. From the plain reading of the said notification it appears that Rule 26 as is existed prior to the said amendment was reframed at 26(1) and 26 (2) provided for imposition of penalties under the said Rule the provisions specified therein. The said rule being a separate new rule inserted could not have been said to be in respect of the persons covered by Rule 26 (1) which apparently was rule 26 prior to the existence, prior to the date of insertion. The provisions of said rule 26 (2) could not have been invoked for the imposition of penalties on the persons whose offences were specified in terms of Rule 26. There is not even iota of allegation or evidence to show that appellants were concern with handling, removing of any goods which were liable for confiscation. On the contrary, the case against the appellants is that there were paying duties, credit of which was being taken by M/s Accurate Meters Ltd. In the case of COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH VERSUS SURYA ISPAT UDYOG [ 2017 (4) TMI 1298 - CESTAT CHANDIGARH] has held that penalty provision for facilitating others in taking credit or issuance of invoice without actual supply of material has been inserted w.e.f. 1-3-2007 by inserting sub-rule (2) of Rule 26 of Central Excise Rules with the issue of Notification No. 8/2007-C.E. (N.T.), dt. 1-3-2007 and during the relevant period there was no provision under law for imposition of penalty for issuance of invoices without actual supply of material. Conclusion - Penal provisions cannot be applied retrospectively unless explicitly stated in the statute. Rule 26(2) of the Central Excise Rules, 2002, cannot be applied to conduct predating its enactment. Rule 25 requires specific involvement with goods liable for confiscation, which was not demonstrated in this case. The duty paid goods could not have been held liable for confiscation as the basic ingredient for invoking Rule 25 are missing in the cases against the appellant. The penalties imposed under Rule 25 also set aside. Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (1) TMI 1251
  True and proper construction of Section 51 (7) of Maharashtra Value Added Tax, 2002 - mere filing of self-assessment returns under Section 20 (1) r/w. Section 50 of the MVAT Act, 2002, is sufficient without filing application for refund as per law to claim refund when it is mandatory to file refund application on portal within stipulated limitation - mandate to submit E-form-501, within stipulated period of limitation to claim refund despite filing of self-assessment returns under Section 20 (1) r/w. Section 50 of the MVAT Act, 2002 - correctness in directing Assessing Authority to process application of refund when it was neither filed as per law nor within limitation - applicability of decision in Mahalaxmi Cotton and Ginning Pressing and Oil Industries v/s. The State of Maharashtra [ 2012 (5) TMI 152 - BOMBAY HIGH COURT] - limitation with respect to claim of refund ought to be considered in view of the provisions of u/s. 23 of the MVAT Act or not. HELD THAT:- The Appellant/Assessee before the Tribunal, being a dealer registered under the MVAT Act, had filed returns for the period 2010-2011 showing a refund of Rs. 4,56,216/-. However, the said refund was not granted to the Assessee. Hence, a letter was written to the Nodal Officer. The Commissioner of State Tax (D-901), Nodal Division-5, vide Order dated 19th May, 2018, rejected the Assessee s request for refund on the ground that the Assessee had failed to apply for grant of refund within the prescribed time. It was mentioned that the application for refund in respect of Assessment Year 2010-2011 was time barred under the provisions of Section 23 of the MVAT Act. The Tribunal (in M/s. Om Shree Developers), after relying upon the decision of this Court in the case of Vichare and Co. Pvt. Ltd., v/s. State of Maharashtra Others [ 2015 (3) TMI 1403 - BOMBAY HIGH COURT] , came to the conclusion that the Department had misconstrued the legal provisions and the right to get a refund under Section 51 (1) to (7) of the Act. The Tribunal held that if the dealer has paid an excess amount than what it is liable to pay, then the excess is not the property of the Department, or of the Government, but it is the property of the dealer, who is entitled to get a refund after scrutiny of the returns. In these circumstances, the Tribunal (in M/s. Om Shree Developers) allowed the Appeal and directed the Assessing Authority to scrutinize/ assess the returns submitted by the Appellant [i.e. Om Shree Developers], in accordance with law, at the earliest. Conclusion - The self-assessment returns are sufficient for refund claims and that the Department must process the Assessee s refund application. The appeal was disposed of with a directive for the Department to scrutinize the returns and process any due refund within six months. Appeal disposed off.

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• Indian Laws

• 2025 (1) TMI 1250
  Challenge to summoning order - Dishonour of Cheque - determination of criminal liability of a Director, on the date on which the offence is alleged to have been committed - HELD THAT:- From the entire averments made in the Petition, what emerges is that the Petitioner herein was admittedly the Director in the year 1998 at the time when the parties started negotiating initially - There is not an iota of averment made against the Petitioner that he continued to be the Director or was responsible for day-to-day conduct of business at the time in 2017, when the impugned Cheque was issued. Section 141 of the N.I. Act mandates that those Directors/Officials who are responsible for the day-to-day affairs of the Company are responsible for any dishonour of the Cheque issued for and on behalf of the Company. In the present case, there is not a single averment to show that the Petitioner was in any way responsible for the day-to-day affairs of the Company on the date of issuance of Cheque and cannot be summoned in a Complaint under Section 138 of N.I. Act, on the basis of his personal liability. Moreover, the Legal Notice dated 06.09.2017 is addressed only to the Respondent No. 2/Company/M/s Selco International Ltd. and Respondent No. 3/Dr. Venkata Rama Krishna Govindraju a.k.a. Dr. G.V. Rama Krishna; it is not addressed to the Petitioner - He is neither a signatory to the Cheque nor is a Director in the accused-Company and there is no Legal Notice served upon him; therefore, he is entitled to be discharged. Conclusion - i) Only directors responsible for the company s day-to-day affairs at the time of the offense can be held liable under Section 141 of the N.I. Act. ii) A guarantor s liability is civil and does not extend to criminal proceedings under Section 138 of the N.I. Act. iii) The absence of a legal notice to the petitioner and lack of evidence of his involvement warranted setting aside the summoning order. The impugned Order dated 18.05.2018 summoning the Petitioner Sh. N. Vijaya Kumar, is hereby set aside - Petition disposed off.

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