TMI Tax Updates - e-Newsletter
January 30, 2025

Case Laws in this Newsletter:

GST Income Tax Benami Property Customs Insolvency & Bankruptcy Service Tax Central Excise Indian Laws

Articles

1. Gurugram CJM Court declares arrest is illegal by GST Officer

   By: Bimal jain

2. DRISHTI (Export Proceed Monitoring Systems) Submission of self certified e-BRC and Annexure A JNCH drawback recovery Cell.

   By: YAGAY andSUN

3. Role of RoC in Transfer and Transmission of Shares Compliance

   By: Ishita Ramani

4. REJECTION OF FIRST APPEAL UNDER GST ACT

   By: DR.MARIAPPAN GOVINDARAJAN

5. Export of Technical Textile Items from India

   By: YAGAY andSUN

6. HSN Code for Rubber and Articles of Rubber & Applicable Export Incentives.

   By: YAGAY andSUN

7. Rubber Export from India: Legal Framework and Regulatory Mechanisms

   By: YAGAY andSUN

News

1. DGGI uncovers Rs 3,200 cr GST fraud, two held

2. No GST on penal charges levied by banks, NBFCs: CBIC

3. The 2025 Union Budget: A Blueprint for Infrastructure-Driven Growth

4. Focus on job creation in upcoming Jharkhand budget: Soren

5. Budget session of Mizoram assembly to commence from February 19

6. Rajasthan budget to be presented on Feb 19, session to begin on Friday

7. Witness India's Transformation into a Global Human Capital Powerhouse at the ET Nextech Summit

8. Digital payments rise 11.1 pc at Sept-end 2024: RBI data

9. DVC signs 25-year agreement with Haryana to export 800MW power

10. Cabinet approves Mechanism for procurement of ethanol by Public Sector Oil Marketing Companies (OMCs) under Ethanol Blended Petrol (EBP) Programme - Revision of ethanol price for supply to Public Sector OMCs for Ethanol Supply Year (ESY) 2024-25

11. RBI to conduct USD/INR swap auction of USD 5 bn on Friday to inject liquidity

Notifications

DGFT

1. 55/2024-25 - dated 29-1-2025 - FTP

Amendment in Import Policy covered under CTH 890690 of Chapter 89 of ITC (HS) 2022, Schedule -I (Import Policy)

GST - States

2. 06/2025-State Tax (Rate) - dated 16-1-2025 - Gujarat SGST

Amendment in Notification No.12/2017-State Tax (Rate) dated 30th June, 2017

3. 04/2025-State Tax (Rate) - dated 16-1-2025 - Gujarat SGST

Amendment in Notification No. 08/2018-State Tax (Rate), dated the 25th January, 2018

4. 02/2025-State Tax (Rate) - dated 16-1-2025 - Gujarat SGST

Amendment in Notification No. 02/2017-State Tax (Rate), dated the 30th June, 2017

5. EXN-D(6)-1/2023-Vol-I - dated 8-1-2025 - Himachal Pradesh SGST

Seeks to bring in force provision of sections 2 and 3 of the Himachal Pradesh Goods and Services Tax (Amendment) Act, 2024

6. G.O. Ms. No. 21 - dated 27-12-2024 - Puducherry SGST

Amendment in Notification G.O.Ms.No. 47, Puducherry, dated 25th September, 2018

7. G.O. Ms. No. 20 - dated 27-12-2024 - Puducherry SGST

Amendment in Notification G.O. Ms. No. 6/A1/CT/2017, dated 21st June, 2017

8. G.O. Ms. No. 19 - dated 27-12-2024 - Puducherry SGST

Notification under section 128 to provide waiver of late fee for late filing of NIL FORM GSTR-7 under the Puducherry Goods and Services Tax Act, 2017

9. G.O. Ms. No. 18 - dated 27-12-2024 - Puducherry SGST

Notifies the special procedure for rectification of for Input Tax Credit Orders issued under Section 73, 74, 107, 108 which confirming demand for wrong availment of input tax credit

10. G.O. Ms. No. 17 - dated 27-12-2024 - Puducherry SGST

Notifies the respective date by which payment for the tax, as per the notice, statement, or order, must be made to qualify for a waiver of interest and penalties under Section 128A of the Puducherry Goods and Services Tax Act, 2017

Indian Laws

11. FX-1/3/2024-PR - dated 24-1-2025 - Indian Law

Central Government introduce Unified Pension Scheme

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2025/11 - dated 29-1-2025

Details/clarifications on provisions related to association of persons regulated by the Board, MIIs, and their agents with persons engaged in prohibited activities

2. SEBI/HO/DDHS/DDHS-PoD-3/P/CIR/2025/009 - dated 28-1-2025

Format of Due Diligence Certificate to be given by the DTs

Customs

3. 03/2025 - dated 29-1-2025

Mandatory additional qualifiers in import/export declarations in respect of Synthetic or Reconstructed Diamonds

Highlights / Catch Notes

GST

• GST Council Exempts Loan Penalty Charges, Payment Aggregator Settlements Under 2000, and Training by NSDC Partners

  Circulars : CBIC clarified multiple GST applicability issues based on 55th GST Council recommendations. Key determinations: No GST payable on penal charges levied by regulated entities for loan contract breaches. GST exemption extended to RBI-regulated Payment Aggregators for settlements up to 2000 per transaction. Research and development services by Government Entities against grants regularized for period July 2017-October 2024. DDA not classified as local authority under GST law. GST applicable on facility management services to MCD headquarters. Training services by NSDC-approved partners exempted from January 2025, with past period regularized. Goethe Institute services' GST payments regularized for July 2017-March 2023 period.
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• Insurance Premium Sharing Between Lead Insurers and Co-insurers Not GST Taxable Under Schedule III CGST Act

  Circulars : GST Council's 53rd meeting recommendations led to amendments in Schedule III of CGST Act, clarifying two key insurance transactions. First, co-insurance premium apportionment by lead insurers to co-insurers is neither goods nor services supply, provided lead insurer pays all applicable taxes on full premium. Second, ceding/reinsurance commission deducted from reinsurance premium similarly excluded, conditional on reinsurer paying taxes on gross premium including commission. These changes, effective from 01.11.2024, also include retrospective regularization from 01.07.2017 to 31.10.2024 on 'as is where is' basis, resolving historical tax treatment ambiguities in insurance sector transactions.
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• High Court Reverses GST Registration Cancellation u/s 29(2)(c), Allows One Month Window for Restoration Application.

  Case-Laws - HC : HC set aside GST registration cancellation order issued u/s 29(2)(c) of CGST Act 2017 for non-filing of returns for six continuous months. Following precedents from coordinate benches and considering Rule 22(4) of CGST Rules 2017, the court directed petitioner to approach concerned authority within one month for revocation of cancellation and restoration of registration, subject to payment of all statutory dues. Court determined continuing the petition would serve no purpose given established precedent in similar matters. Original cancellation order dated 10.02.2021 was set aside with specific directions for restoration process.
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• High Court Upholds 200% GST Penalty for E-way Bill Fraud Using Unregistered Consignor to Mask Real Service Recipient.

  Case-Laws - HC : HC upheld penalty u/s 129(3) of WB GST Act 2017 due to deliberate discrepancies in transportation documents. The E-way bill listed an unregistered person (URP) as consignor from Arunachal Pradesh, while delivery challan showed a GST-registered entity as consignor. This mismatch was deemed intentional to conceal the actual recipient's identity and evade GST on rental/lease services of JCB machinery. Court found sufficient evidence of tax evasion intent, noting that using URP details in E-way bill while actual service recipient was GST-registered constituted willful attempt to evade tax liability. Appeal dismissed, affirming 200% penalty of tax payable.
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• West Bengal High Court Upholds GST Penalty u/s 129 for Transportation Document Discrepancies and Invalid Input Tax Claims.

  Case-Laws - HC : HC upheld penalty u/s 129 of WBGST Act 2017 regarding discrepancies in vehicle transportation documentation. The petitioner failed to establish legitimate purchase chain from Mr. X to Company Y, with Input Tax Credit already claimed by Company Z. Documentation inconsistencies included contradictory e-way bill and invoice details, with no tax payment evidence. The margin value scheme was deemed inapplicable. The Court found proper procedural compliance by authorities in issuing notice and providing opportunity for hearing. Despite petitioner's reliance on precedents, the Court distinguished them from present circumstances. The petition challenging penalty order dated May 30, 2023, was dismissed, affirming appropriate invocation of Section 129 provisions.
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• High Court Allows Fresh Hearing in GST Dispute After 25% Tax Deposit, Sets Aside Time Limitation Order.

  Case-Laws - HC : HC set aside the impugned order regarding time limitation and GSTR-3B/GSTR-2A mismatch dispute. The petitioner's willingness to deposit 25% of disputed tax amount was considered favorably. Court granted relief by directing petitioner to deposit the agreed percentage within four weeks from order receipt, allowing a final opportunity to present objections before the adjudicating authority. The decision balances tax compliance requirements with procedural fairness, enabling the petitioner to pursue substantive arguments while ensuring partial tax recovery. Matter remanded for fresh consideration upon compliance with deposit condition.
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Income Tax

• Trust A Receives Section 35(1)(ii) Approval for Healthcare Research with Tax Benefits Valid from 2024 through 2030

  Notifications : Central Government granted approval to Trust A for its healthcare research unit under Section 35(1)(ii) of Income Tax Act, 1961, read with Rules 5C and 5E. The approval classifies the institution under "University, college or other institution" category for scientific research purposes. The notification takes retrospective effect from publication date (covering Previous Year 2024-25) and remains applicable for Assessment Years 2025-26 through 2029-30. The approval enables tax benefits for research activities conducted at the institution, with certification that retrospective implementation causes no adverse effects to any party.
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• CBDT Amends Income Tax Rules: New Guidelines for Venture Capital Funds and Finance Companies in International Financial Services Centres

  Notifications : CBDT amended Income Tax Rules 1962 through Second Amendment Rules 2025, introducing key changes for International Financial Services Centres. New provisions establish conditions for Venture Capital Funds under section 10(23FB), requiring them to operate as Category I Alternative Investment Funds. Rule 21ACA specifies permissible activities for Finance Companies in IFSCs, including lending, factoring, and treasury operations. Additional amendments to Rule 21AIA introduce strict requirements for retail schemes, mandating minimum investor diversification and investment limits. Exchange Traded Funds must be listed on recognized exchanges and comply with IFSCA regulations. These amendments enhance regulatory framework for fund management and financial operations in IFSCs, effective upon official gazette publication.
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• High Court Invalidates Tax Demand and Penalty Orders Due to Improper Assessment Procedure, Draft Order Cannot Support Enforcement Actions.

  Case-Laws - HC : HC examined procedural compliance in tax assessment proceedings. The court determined that the order dated March 30, 2021 constituted a draft assessment order rather than a final order, as mandatory procedures were not properly followed. Consequently, the subsequent demand notice, penalty order, and recovery notices were deemed invalid as they were based on a draft rather than final assessment. While the draft assessment order itself remained valid and could not be set aside, the court quashed all subsequent enforcement actions including the demand notice dated March 30, 2021, penalty order dated March 16, 2022, and recovery notices dated December 30, 2021, as these could not be legally issued based on a draft order.
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• High Court: No Interest Under 158BFA(1) When Seized Documents Unavailable to Taxpayer, Upholds 70-30 Income Split in Shilpgram Case.

  Case-Laws - HC : HC declined to address allocation of undisclosed Shilpgram Scheme income between parties as factual matter, upholding Tribunal's 70-30 split. On interest charges under s.158BFA(1), court affirmed Tribunal's ruling that assessee could not be charged interest for delayed return filing during period when seized documents were unavailable. Court determined interest charges inappropriate until photocopies of seized materials were provided to assessee, as compilation of return was impossible without access to these documents. Question regarding income allocation dismissed as factual; interest charge question resolved in assessee's favor.
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• High Court Validates One-Year Extension for Tax-Attached Property Sale u/r 68B of Income Tax Act's Second Schedule.

  Case-Laws - HC : HC upheld the extension of time limit for sale of attached immovable property u/r 68B of Income Tax Act's Second Schedule. Property was attached on 10.02.2021, with auction scheduled for 25.03.2021. Due to no bidders, Chief Commissioner validly extended sale period by one year to 31.03.2022 under second proviso to Rule 68B(1). Court rejected petitioner's argument regarding unauthorized extension and dismissed claim of exemption u/r 10 based on changed status as laborer. Extension order deemed valid as circumstances fell within permissible grounds for resale when highest bid falls below reserve price. Attachment and sale proceedings upheld as legally compliant within limitation period.
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• Tax Court Confirms Rs.1 Lakh Addition u/s 145(3) for Unverifiable Cash Vouchers Despite Clean Tax Audit Report.

  Case-Laws - AT : ITAT upheld partial rejection of books under s.145(3) due to unverifiable self-made cash vouchers, though specific quantification was lacking. Given turnover of Rs.4,00,48,401 showing only 4% variance from previous year, ITAT confirmed addition of Rs.1,00,000 despite assessee's tax audit report and claimed receipted vouchers. On interest income from JSPL reflected under business income, matter remanded to AO for verification whether funds were invested for business expediency rather than mere surplus fund investment to determine appropriate head of income classification between business income versus income from other sources. Addition sustained but limited to Rs.1,00,000 considering overall circumstances and to end protracted litigation.
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• ITAT: GST Disallowance u/s 43B Invalid When Amount Not Claimed Through P&L Account or as Deduction.

  Case-Laws - AT : ITAT ruled in favor of assessee regarding GST disallowance u/s 43B. The tribunal found that GST amount was not routed through Profit & Loss account but shown under current liabilities, which remained uncontroverted by Revenue. No evidence was presented to demonstrate that assessee claimed any deduction for GST. Following established precedent, where tax liability is neither claimed as deduction nor debited to P&L account, provisions of section 43B are not applicable. Therefore, disallowance cannot be sustained when no deduction was claimed in the first place. Revenue's appeal dismissed.
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• Tax Revision Notice u/s 263 Quashed: Previous Assessment Officer's Investigation of Property and Bank Details Found Complete.

  Case-Laws - AT : PCIT issued revision notice under s263 based on audit objections regarding unexplained property investments and bank deposits. The second notice dated 17.2.2022 introducing new issues exceeded statutory two-year limitation period. AO had previously examined property investments and ICICI bank account through s148 proceedings, conducting specific inquiries with documented evidence. ITAT determined this wasn't a case of inadequate inquiry as AO had performed necessary investigations and maintained proper records. Following precedents from SC and ITAT Chandigarh, the revision proceedings were deemed invalid both procedurally and substantively. The PCIT's order was quashed, and assessee's appeal was allowed, confirming that AO's original assessment addressing both disputed issues was proper and complete.
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• ITAT Grants Interest on Self-Assessment Tax Refund Under 244A(1)(b), Plus Additional 3% Interest for Processing Delays.

  Case-Laws - AT : ITAT ruled that taxpayer is entitled to interest on refund arising from excess self-assessment tax u/s 244A(1)(b), despite the specific provision 244A(1)(aa) being introduced later by Finance Act 2016. The amendment was clarificatory in nature, not restrictive. Due to 68-month delay in refund processing (December 2014 to July 2020), ITAT granted additional interest @3% per annum u/s 244A(1A), but only from June 1, 2016 (effective date of amendment) until refund date. This aligns with precedent set in Stock Holding Corporation case and Nima Specific Family Trust ruling. Taxpayer's appeal for additional interest partially allowed; revenue's appeal dismissed.
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• ITAT Rules: EPC Consortium Not AOP, Section 80IA Deduction Valid, Capital Gains at 20%, Business Write-offs Allowed.

  Case-Laws - AT : The ITAT ruled on multiple issues in favor of the assessee. Key determinations include: consortium arrangement for EPC contracts where members are independently responsible cannot be treated as AOP, thus no TDS was required on interest payments to JV. The assessee qualified for Section 80IA deduction as a developer of infrastructure facilities. For depreciable long-term capital assets, though deemed as short-term gains u/s 50, the applicable tax rate remains 20% u/s 112. Write-offs of advances given during business operations were allowed as business losses. Compensation paid to promoters for invoked pledged shares was deemed revenue expenditure, allowable u/s 37(1). AIR reconciliation differences of 0.03% were dismissed given accepted books of accounts. Interest on delayed TDS payments was ruled non-deductible as business expenditure.
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• Directors' Property Purchase Payments Through Third Parties Not Unexplained Cash Credits u/s 68, Rules ITAT.

  Case-Laws - AT : ITAT ruled against addition under s.68 regarding unexplained cash credits from company directors. Directors made payments to 169 individuals for property acquisition on company's behalf, rather than direct loans to company. Documentation included payment confirmations and proper balance sheet entries showing director liabilities. Tribunal held that assessee discharged burden of proof by demonstrating genuine nature of transactions through third-party confirmations and establishing clear money trail for property purchases. The fact that directors obtained unsecured loans to make these payments did not justify addition under s.68 when supported by comprehensive documentation. Addition made by AO and upheld by CIT(A) was deleted.
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• Share Valuation Under Sec. 56(2)(viib) Rejected Due to Omitted Liabilities, ITAT Remands Case for Fresh FMV Determination.

  Case-Laws - AT : ITAT held the assessee failed to justify share valuation under Sec. 56(2)(viib), as the submitted valuation report omitted loan liabilities. CIT(A)'s direction for valuation from two valuers at assessee's option while restricting AO's scope was deemed unjustified. The DCF-based valuation was questioned due to lack of business activities in subsequent years. Following precedent from Madras HC, ITAT remanded the matter back to AO for fresh determination of share FMV, as the original fact-finding exercise was incomplete. The valuation must consider all liabilities and actual business performance. Appeal allowed for statistical purposes, directing AO to conduct comprehensive share valuation under Sec. 56(2)(viib).
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Customs

• ICEGATE Platform Launches Digital Payment System for Customs Duties and Penalties, Replacing Manual TR-6 Challans by 2024

  Circulars : JNCH introduces electronic voluntary payment functionality on ICEGATE platform, replacing manual TR-6 payments effective December 31, 2024. The system enables self-initiated payments through registered ICEGATE login for past import/export clearances, excluding live consignments. Payment options include Electronic Cash Ledger debits for IEC holders and Customs Brokers, plus challan-wise payments via nine authorized banks, NEFT/RTGS through RBI, and Payment Aggregator mode. Manual TR-6 challans require explicit Commissioner approval post-deadline. The platform supports 26 payment purposes including investigation payments, audit settlements, EPCG duties, penalties, and pre-deposit appeals. Users must verify payment details through ICEGATE's designated portal, with proof submission required to relevant customs sections.
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• Court Strikes Down Customs Notice on Duty Drawback Claims, Rules 9-Month Delay Arbitrary u/s 14.

  Case-Laws - HC : HC quashed show cause notice regarding duty drawback claims and export incentives. Authorities' delay of 9 months in issuing notice after court service and reliance on Section 14 of Customs Act was deemed arbitrary. Court found no deficiency in petitioner's export documentation, including Export Realization Certificate and final assessment records. Transaction value was binding u/s 14 unless proper officer had specific doubts about accuracy. Respondents failed to demonstrate any material discrepancy between exported goods and provided information. HC directed authorities to process duty drawback claim within 4 weeks per applicable rules, emphasizing that administrative actions must remain within jurisdiction and reflect actual transaction values.
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• DRI Show Cause Notices Under Customs Act Section 28 Invalidated Following Supreme Court's Canon India Precedent.

  Case-Laws - HC : HC invalidated show cause notices (SCN) issued by DRI authorities u/s 28 of Customs Act 1962, following precedent set in Canon India case where SC ruled such notices lacked legal authority. Petitioners granted 30-day window from judgment receipt to file replies to impugned notices, with previous stay on proceedings lifted. Authorities directed to conduct adjudication as per law. The ruling emphasizes proper jurisdictional authority for issuing customs notices and reinforces procedural requirements for administrative actions under customs legislation. Matter disposed of with directions for statutory compliance in further proceedings.
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• Customs Tribunal Holds Custodian Liable for Missing Refrigerant Gas Cylinders u/s 45, Upholds Penalty and Duty.

  Case-Laws - AT : CESTAT affirmed customs duty liability and penalty against custodian for pilfered imported refrigerant gas cylinders while in custody. Following precedent from Delhi HC, tribunal held custodian responsible u/s 45 of Customs Act read with Regulation 6 of Handling of Cargo Regulations for safe custody until clearance. Show cause notice issued on 18.12.2013 was within limitation period from discovery of pilferage on 27.06.2013. Penalty u/s 117 upheld as custodian failed safekeeping obligations. Appellant's duty liability confirmed since goods requiring NOC from Chief Controller of Explosives were documented present during first check but subsequently found missing from sealed container.
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• CESTAT: Imported Technical Drawings Classified Under CTH 49.06, Exempt from Duty Under Notification 12/2012-Cus.

  Case-Laws - AT : CESTAT ruled imported drawings and designs are correctly classifiable under CTH 49.06, not CTH 84.19. The tribunal determined these were original computer-printed drawings supplied separately from the ETP equipment, relating to post-import activities. The value should not be included in ETP's assessable value u/r 10(1)(b)(iv) of Customs Valuation Rules. The drawings qualified for duty exemption under Notification No. 12/2012-Cus at nil rate. Revenue's contention that drawings constituted pre-import activity was rejected. The Commissioner (Appeals) order was upheld and Revenue's appeal dismissed. The classification decision turned on the independent nature of the drawings rather than their connection to subsequently imported equipment.
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• Delivery Agents Not Liable for Sealed Container's Illegal Contents When Acting Without Knowledge Under Customs Act Sections 112(a), 114AA.

  Case-Laws - AT : CESTAT ruled in favor of delivery agents, setting aside penalties u/ss 112(a) and 114AA of Customs Act, 1962. The agents, who handled a sealed FCL container from Jebel Ali to Haldia, were unaware of the cigarette contents due to the "shipper's load and count" clause in the Bill of Lading. The tribunal found no evidence of aiding or abetting smuggling since the agents merely facilitated proper delivery with intact seals. Their role as intermediaries without knowledge of container contents precluded liability under customs regulations. The tribunal emphasized that mere delivery agency functions, without proven knowledge of illegal contents, cannot attract penalties for customs violations. Appeal allowed.
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Benami Property

• High Court Grants Relief in Benami Property Case, Allows Appeals Until 2025 u/s 26(3) Despite Procedural Bypass.

  Case-Laws - HC : HC ruled on a Benami property case where petitioners initially challenged provisional attachment orders u/s 26(3) of the Prohibition of Benami Property Transactions Act. Though petitioners bypassed the standard appellate process, the court deemed their proceedings as good faith actions. The court directed petitioners to pursue appellate remedy before the Appellate Tribunal, allowing them until February 28, 2025, to file appeals. The period of pending writ petition will be excluded from limitation u/s 14 of Limitation Act. For ongoing confiscation proceedings, the Adjudicating Authority must grant petitioners adequate time as per Proviso to Section 27(1) before proceeding further. Appeals filed by the specified deadline won't be dismissed on limitation grounds.
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• Tribal Land Benami Case: AT Confirms Attachment Where Non-Tribal Buyers Used Proxy Owner to Bypass Revenue Code Restrictions.

  Case-Laws - AT : AT upheld provisional attachment of properties determined to be benami transactions where tribal land was purchased by non-tribal persons through a proxy owner. The beneficial owner attempted to circumvent restrictions under Chhattisgarh Land Revenue Code by using a tribal person as benamidar. The fiduciary relationship exception under s.2(9)(A)(ii) of PBPT Act was rejected as the arrangement aimed to contravene law. Properties at serial 1-3, 11-16 confirmed as benami. Matter remanded for verification of properties 4-10 to determine benami status. Agreement and authority letter presented by appellants deemed unreliable due to discrepancies and collusion between parties. Subsequent property transfers to beneficial owner's son declared void u/s 6.
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IBC

• NCLAT Allows Resolution Professional to Cover Essential Expenses During Corporate Insolvency Process with Refund Safeguards.

  Case-Laws - AT : NCLAT permitted the new Resolution Professional (RP) to manage essential operational expenses of the Corporate Debtor during CIRP. Authorized expenditures include security expenses, statutory auditor fees, practicing company secretary costs, and RP remuneration as previously approved by the Adjudicating Authority. All payments require undertakings from recipients confirming refund if not ratified by reconstituted Committee of Creditors (CoC). Employee salary claims must be presented to CoC for approval. The tribunal restricted RP from engaging new professionals during CIRP. The decision follows precedent established in Sunil Kumar Jain & Ors. vs. Sunaresh Bhatt & Ors., which stipulates CIRP costs are payable only for actual work performed during the CIRP period.
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Indian Laws

• Central Government Launches Unified Pension Scheme Under NPS With 50% Last Pay Guarantee And Rs.10,000 Minimum Monthly Pension

  Notifications : Central Government introduced Unified Pension Scheme as an optional component under National Pension System (NPS) effective April 1, 2025. The scheme provides assured payout of 50% of last 12 months' average basic pay after 25 years qualifying service, with minimum guaranteed payout of Rs.10,000 monthly after 10 years service. Employee contribution is 10% of basic pay plus DA, matched by Government, with additional 8.5% Government contribution to pool corpus. Scheme includes family pension at 60% for legal spouse, dearness relief, and lump sum payment at superannuation. Existing NPS employees can opt for UPS with transfer of corpus. PFRDA will regulate individual corpus investments while Government controls pool corpus investments. Once exercised, option is final and irreversible.
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• Export Promotion Councils Not "State" Under Article 12: HC Dismisses Plea for Childcare Leave at CHEMEXCIL.

  Case-Laws - HC : HC ruled against petitioner seeking childcare leave under CHEMEXCIL's HR Policy. Following precedent in DR JITARANI UDGATA case, court determined that Export Promotion Councils like CHEMEXCIL, despite administrative oversight by Central Government, maintain autonomous character through their Committee of Administration. EPC's functions do not constitute "public duty" and fail to meet established tests for classification as "State" under Article 12. The administrative control exercised by government is not pervasive enough to override their autonomous nature. Petitioner's writ dismissed with liberty to pursue alternative legal remedies. Court affirmed CHEMEXCIL's functions parallel GJEPC's role, though in different sectors.
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SEBI

• SEBI Launches iSPOT Portal for Market Infrastructure Institutions to Report Technical Glitches Under Section 11(1)

  Circulars : SEBI has implemented iSPOT (Integrated SEBI Portal for Technical glitches), a web-based platform replacing email-based reporting of technical glitches by Market Infrastructure Institutions (MIIs). The portal, integrated with SEBI Intermediary portal, mandates MIIs to submit preliminary and Root Cause Analysis reports through a centralized system. Effective February 03, 2025, this modification streamlines reporting processes, enhances data quality, enables better traceability of historical submissions, and facilitates automated compliance monitoring. The directive, issued under Section 11(1) of SEBI Act 1992, Regulation 51 of Securities Contracts Regulations 2018, and Section 19 of Depositories Act 1996, requires MIIs to implement necessary systemic changes and regulatory amendments.
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• SEBI Consolidates Stock Exchange Regulations Under Section 11(1) in New Master Circular Effective December 2024

  Circulars : SEBI issued a comprehensive Master Circular consolidating all previous directives for Stock Exchanges and Clearing Corporations effective December 30, 2024. The circular supersedes the previous master circular dated October 16, 2023, and incorporates all relevant communications issued until October 31, 2024. While rescinding previous circulars, it preserves prior actions, registrations, approvals, and pending proceedings under the corresponding provisions. The circular draws authority from Section 11(1) of SEBI Act, 1992 and Regulation 51 of SC(R)(SECC) Regulations, 2018, maintaining regulatory continuity while updating statutory references to reflect current legislation.
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Service Tax

• Service Tax Must Be Calculated on Gross Commission for Loan Facilitation Services, Rules CESTAT u/s 67.

  Case-Laws - AT : CESTAT determined service tax liability on commission-based loan facilitation services. Appellant challenged tax calculation basis and limitation period. Tribunal held service tax must be computed on gross commission amount per Section 67 of Finance Act, not net commission received, following precedent in JMD Marketing case. However, extended limitation period u/s 73(1) was invalidly invoked as Department failed to prove willful suppression of facts, considering appellant's bona fide belief and consistent tax payments on net commission. While ruling against appellant on valuation methodology, appeal succeeded on limitation grounds. Demand held time-barred, impugned order set aside.
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• Infrastructure Support to IIM and XLRI Not Taxable as Commercial Coaching, Rules CESTAT in Service Tax Classification Case.

  Case-Laws - AT : CESTAT determined that providing infrastructure and support services to educational institutions like IIM and XLRI does not constitute commercial training and coaching services subject to service tax. The appellants' role was limited to facilitating classes through infrastructure maintenance, marketing programs, and examination support, while the institutions maintained control over pedagogy, course design, and certification. Unlike typical coaching centers, appellants were integrated with degree-awarding institutions through revenue-sharing agreements. The tribunal held these were auxiliary educational support services qualifying for exemption, not commercial coaching services. The Commissioner's contradictory findings regarding service classification were rejected, and the appeal was allowed on grounds that infrastructure support to recognized educational institutions falls under exempt services.
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• Tribunal Rules Phone Bill Waivers to Employees Not Subject to Service Tax as They Constitute Discounts, Not Taxable Consideration.

  Case-Laws - AT : CESTAT held that service tax cannot be levied on telephone charge waivers (CFA) provided by appellants to employees. The tribunal determined that free allowances constitute discounts/concessions rather than taxable consideration since benefits accrue to employees (service recipients) rather than the appellant (service provider). The bench rejected the department's best judgment method and assumptions-based tax computation, noting the show cause notice was vague regarding specified services. Following valuation principles, only consideration flowing from service recipient to provider is includable in gross taxable amount. Goodwill cannot be arbitrarily valued for taxation. The tribunal concluded that absent actual consideration received, CFA discounts fall outside service tax purview. Appeal allowed with full relief to appellant.
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• Service Tax Recovery: CESTAT Confirms Pre-Notice Payments Valid, Waives Penalties for Insurance and Finance Commission Demands.

  Case-Laws - AT : CESTAT examined service tax recovery with interest and penalties concerning insurance commission, finance payouts, and MUL incentives. The appellant had already paid demanded amounts prior to Show Cause Notice issuance. Following High Court remand directions, CESTAT confirmed the admitted demands and appropriated payments accordingly. Since payments were made before Show Cause Notice, penalties were deemed unwarranted for confirmed demands. The Tribunal maintained its earlier decision of setting aside remaining demands and penalties. The matter originated from handling charges, repair services, and expense reimbursements under reverse charge mechanism. Appeal disposed of with confirmation of pre-paid demands but elimination of associated penalties.
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Central Excise

• Tribunal Denies Interest on Pre-Deposit Refund u/ss 35F and 35FF of Central Excise Act After Timely Processing.

  Case-Laws - AT : CESTAT dismissed appeal regarding interest claim on refunded pre-deposit u/ss 35F and 35FF of Central Excise Act. Appellant had deposited amounts through CENVAT account reversal, which were later appropriated as duty. Though Tribunal previously allowed appellant's main appeal, the current dispute centered on interest eligibility. Following statutory interpretation and Supreme Court precedent in similar cases, CESTAT determined that since refund was processed within prescribed timeframe, no interest was payable on pre-deposit amount. The Tribunal distinguished earlier decisions allowing 12% interest, noting those cases dealt with deposits made when no specific provisions for refund with interest existed. Appeal lacked merit as current statutory framework did not mandate interest payment under these circumstances.
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Case Laws:

• GST

• 2025 (1) TMI 1365
  Cancellation of registration of petitioner - non-furnishing of returns in compliance of the provisions of Section 29[2][c] of the GST Act, 2017 for a continuous period of 6 or more months - HELD THAT:- Having regard to the fact that the GST registration of the petitioner has been canceled under Section 29[2][c] of the CGST Act, 2017 for the reason that the petitioner did not submit returns for a period of 6 [six] months and more; the provisions contained in the proviso to sub-rule [4] of Rule 22 of the CGST Rules, 2017 and the orders passed by the coordinate benches of this Court as well as by this Court in similar matters whereby the matters have been disposed of with a direction to the respondent authorities to revoke the cancellation of registration upon due payment of all statutory dues payable by the petitioners, this Court is of the considered view that no purpose will be served by keeping this writ petition pending and the present writ petition can be disposed of in similar terms, as had been made in similar other writ petitions. The impugned order dated 10.02.2021 [Annexure-C] is hereby interfered with and set aside. The petitioner is directed to approach the concerned authority within a period of 1 [one] month from today, seeking revocation of cancellation and restoration of his GST registration - Petition disposed off.

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• 2025 (1) TMI 1364
  Levy of penalty u/s 129 (3) of the West Bengal GST Act, 2017 imposing a penalty equal to 200% of tax payable - failure to roduce original/duplicate copy of the tax invoice/delivery challan/E-way bill at the time of interception as per the GST law - intent to evade present or not - HELD THAT:- It is an admitted position that there were discrepancies in the E-way bill and the delivery chellan, i.e, the delivery challan subsequently submitted by the appellant does not match the E-way bill generated in favour of Pisi Suriya Singhpo of Arunachal Pradesh. Noticing the aforesaid discrepancy the adjudicating authority imposed penalty. T here was no finding on the issue of mismatch between the e-way bill and the delivery challan vis- -vis appellant s intention to evade tax. Given this situation, the adjudicating authority as a fact finding body was not precluded from going into the aforesaid issue. As per the E-way bill generated by the appellant, the consignor is one Pisi Suriya Singhpo of Arunachal Pradesh who is an unregistered person whereas the delivery challan subsequently placed on record was not signed by the consignor and was accompanied by a release letter issued by one M/s. B. G. Enterprise, a registered person under the GST Act. This mismatch is not an inadvertent one but gives opportunity to conceal the identity of the actual user (a registered person) of the inward services supplied and thereby evade payment of GST on such supply. The E-way bill foot print is easily available to the tax authorities, hence the name of an URP has been intentionally declared in the E-way bill with the intention to conceal the actual recipient of the rental/lease service of the said JCB machine by a registered person with the sole intention to evade the tax liability. Conclusion - The discrepancies in transportation documents, particularly those suggesting an intention to evade tax, justify the imposition of penalties under the GST framework. The findings of the Hon ble Single Judge are well merited and does not call for interference - Appeal dismissed.

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• 2025 (1) TMI 1363
  Seeking modification of the condition in the Bail Order - HELD THAT:- In view of the submissions made, the condition imposed vide Order dated 20.12.2023 is modified to the extent that instead of seeking prior permission of the learned CJM/Trial Court, the Petitioner shall intimate the Department/Respondent about his travel and shall furnish his contact number and address where he intends to reside. Petition disposed off.

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• 2025 (1) TMI 1362
  Levy of penalty u/s 129 of WBGST Act, 2017 - alleged discrepancies in transportation documentation and invoice - whether the respondents have rightly invoked the provisions of Section 129 of the West Bengal Goods and Services Tax Act, 2017 or not? - HELD THAT:- In the present case, Input Tax Credit on the car has already claimed and utilized by M/s MMD Brothers Enterprise, Proprietor Mr. Marto Lollen, Arunachal Pradesh on the very first instance, thus this Court is of the view that the margin value scheme is not applicable in the case of the petitioner. This Court considered the judgments relied by the petitioner but finds that the judgments as distinguishable from the facts and circumstance of the present case. In the present case after interception of the conveyance, the respondent no.2 has followed all the procedure by issuing notice to the petitioner and proper opportunity was provided to the petitioner. It is found from record that documents relied by the petitioner are contrary to each other. The petitioner failed to prove that M/s Shifting Gears, Assam has purchased the said vehicle from Mr. Marto Lollen. The e-way bill relied by the petitioner for transportation of the car contrary to the Invoice cum Bill of Supply dated 13th May, 2023 and subsequent invoice submitted by the petitioner shows that no Tax was paid. Conclusion - The invocation of Section 129 was appropriate given the inconsistencies in the transportation documentation and the failure to establish a clear chain of ownership and sale. This Court did not find any illegality in the order passed by the respondent no. 2 dated 30th May, 2023 and thus the order does not require any interference - Petition dismissed.

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• 2025 (1) TMI 1361
  Rejection of appeal on the ground of time limitation - mismatch between GSTR -3B and GSTR-2A - petitioner is ready and willing to pay 25% of the disputed tax and that he may be granted one final opportunity before the adjudicating authority to put forth their objections to the proposal - HELD THAT:- The impugned order dated 29.04.2024 is set aside - The petitioner shall deposit 25% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent, within a period of four weeks from the date of receipt of a copy of this order. Petition disposed off.

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• 2025 (1) TMI 1360
  Cancellation of registration of the petitioner - non filing of the GST return for a continuous period of six months - HELD THAT:- An identical controversy has been decided by this Court in SUNIL SAH VERSUS UNION OF INDIA [ 2024 (9) TMI 904 - UTTARAKHAND HIGH COURT] where it was held that the present writ petition is also decided in terms of the said order. The matter is covered by the said order, the present writ petition is also decided in terms of the said order. The petitioner shall be at liberty to move an application for revocation or cancellation of the order under Section 30(2) of the CGST Act, 2017, within two weeks. The writ petition is disposed of.

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• Income Tax

• 2025 (1) TMI 1359
  Unjust adjustment of excess refunds - Award of interest at 15% per annum from the date of adjustment of the said amount till the date of payment of the refund - as submitted that the statutorily fixed rate of interest u/s 244-A is only 6% per annum, therefore, the High Court [ 2021 (3) TMI 1014 - TELANGANA HIGH COURT] could not have ordered for refund @ 15% per annum HELD THAT:- We find that this Court by an interim order [ 2021 (8) TMI 1433 - SC ORDER] had stayed the direction of the High Court insofar as it pertains to the award of interest in excess of 6% per annum. However, by then there had been compliance of the order of the High Court. We hence allow this appeal by directing the respondent to refund the amount of interest in excess of 6% per annum to the appellant(s)/Department being Rs.36,61,013/- within a period of four weeks from today. Appeal is allowed and disposed of in the aforesaid terms.

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• 2025 (1) TMI 1358
  Assessment of trust and beneficiaries interest - Determinate Trust or indeterminate Trust - Maintainability of appeal before SC on low tax effect - HC [ 2020 (10) TMI 1095 - MADRAS HIGH COURT] we cannot accept the contention of the Revenue that the shares were non-determinable or the view taken by the Tribunal is perverse. On the contrary, we do find that the view taken by the Tribunal is correct and would not call for interference so far as determinability of the shares of the beneficiaries are concerned. Once the shares of the beneficiaries are found to be determinable, the income is to be taxed of that respective sharer or the beneficiaries in the hands of the beneficiary and not in the hands of the Trustees which has already been shown in the present case. HELD THAT:- Petitioner, on instructions, states that the tax effect in this group of Petitions is below the threshold limit provided in Circular dated 17th September, 2024. Hence, the Special Leave Petitions are disposed of on that ground. However, the question of law, if any, is kept open

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• 2025 (1) TMI 1357
  Draft assessment order v/s final assessment order - Whether final order was never preceded by a draft assessment order? - HELD THAT:- As mandatory procedures were not followed but seek to apportion the blame on the faceless assessing officer. In any event, based on the above statements relied upon we cannot hold that the order dated 30 March 2021 is the final assessment order and not a draft assessment order. As based on a draft assessment order, the Respondents were not justified in issuing the impugned demand notice dated 30 March 2021, penalty order dated 16 March 2022, and recovery notices dated 30 December 2021. Accordingly, all these are liable to be set aside and are hereby quashed and set aside. Since we have held that the order was only a draft assessment order, it cannot be set aside. However, based on this draft assessment order, the Respondents could not have made any tax, or penalty demands or sought recovery of tax or penalty.

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• 2025 (1) TMI 1356
  Rectification of mistake - competent authority of the Department has exercised its power to declare that in view of Section 199 the deduction of TDS made on payment and paid to the Central Government by principal would be treated as income/receipt of the assessee company - Since the assessee had not shown the said amount of income, it has been held that the assessee would not get credit of the entire TDS rather the credit of TDS has to be restricted only in view of the provisions u/s 199 of the Act of 1961 read with Rule 37BA of the Income Tax Rules. HELD THAT:- This Court allows learned counsel for the petitioner(s) to withdraw both the writ applications with liberty to prefer a duly constituted appeal before the Appellate Authority within a period of thirty days from today. Since the writ applications were filed on 06.07.2021 and 16.06.2021 respectively as per the date of registration available on the record, we are of the considered opinion that the period spent by the petitioner(s) before this Court would be liable to be taken into consideration for exclusion while counting the period of limitation.

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• 2025 (1) TMI 1355
  Validity of order passed by ITAT in breach of principles of natural justice - impugned order was admittedly made without hearing the Petitioners - only issue involved imposing a penalty on such additions - HELD THAT:- Though we agree with respondent that the Appellants should have pursued the matter, given the peculiar facts of this case, the argument made on their behalf is not entirely unreasonable. Besides, the argument on the disproportionality of the proposed action could not be advanced. Appellants may not have contested the additions. Still, that does not mean that the penalty has to be imposed automatically once there is no contest. In any event, given the peculiar facts of this case, the appellants should be given an opportunity to hear and attempt to convince the tribunal that no penalty or reduced penalties ought to have been imposed in these matters. Based on instructions, appellants has offered to pay a consolidated cost of Rs 1,50,000/-. Based on this, the learned Counsel has urged that the interest of justice would be met if an additional opportunity is granted to the Appellants to argue the matter before the tribunal. After considering the above circumstances and the peculiar facts of this case, we agree that the interest of justice would be met if the appellants were granted an additional opportunity to argue the matter before the tribunal.

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• 2025 (1) TMI 1354
  Violation of principles of natural justice - Non providing all relied upon/non-relied upon documents in relation to Show Cause Notice - HELD THAT:- The contention of the Petitioner that the principles of natural justice were not followed is correct. It clarified that the proceedings shall be conducted de novo by the Respondent No. 1. All rights and contentions of the parties are left open in this regard.

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• 2025 (1) TMI 1353
  Undisclosed income from Shilpgram Scheme - allocating the sum between the assessee and Shivganga Reality Pvt. Ltd. at the rate of 70% and 30% for sustaining the addition to the extent of 70% in the case of assessee - HELD THAT:- We decline to answer the question being a question of fact confirming the order passed by the Tribunal. Charging of interest u/s. 158BFA (1) - Tribunal holding that the respondent assessee cannot be held responsible for the period during which it did not have the seized material to compile the return, the interest under Section 158BFA (1) of the Income Tax Act, 1961 cannot be charged for late filing of the return as the assessee was prevented from filing the loss return without getting the seized material - HELD THAT:- We are of the opinion that there is no infirmity in the impugned order of the Tribunal holding that the interest should not have been charged interest under Section 158BFA (1) of the Act for the period till the assessee was not provided with the photo copies of the seized materials. The question No. 2 is accordingly answered in favour of the assessee.

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• 2025 (1) TMI 1352
  Sale of Attached property - limitation period for the sale of attached immovable property - extension of time limit as per Proviso to Rule 68B(1) - extension of the limitation period for the sale of the petitioner s attached property as valid under Rule 68B of the Second Schedule to the Income Tax Act, 1961 - HELD THAT:- The immovable property of the petitioner was attached on 10.02.2021. This was few days before the period expired on 31.03.2021. On 26.02.2021, a proclamation of sale was made for the sale of immovable property of the petitioner. The auction was fixed to be held on 25.03.2021. There were no bidders during the auction that was held on 25.03.2021. Since the date of auction was fixed to 25.03.2021, on which date there are no bidders, it can be construed that the situation was covered by the 1st instance under 2nd proviso to Rule 68B of the 2nd schedule to the Income Tax Act, 1961 i.e., where the immovable property is required to be resold due to the amount of highest pay being less than the reserve price fixed. Therefore, the extension of the period for bringing the immovable property of the petitioner by one year by the Chief Commissioner of Income Tax vide order dated 02.11.2021 cannot be questioned as it is in consonance with the 2nd proviso to Rule 68B of the 2nd schedule to the Income Tax Act, 1961. The argument of the petitioner that the respondent Income Tax Department was not authorised to extend the period of auction by one year to 31.03.2022 on the ground that the situation contemplated in Rule 57, Rule 58 Rule 61 of the 2nd schedule to the Income Tax Act, 1961 were not attracted cannot be countenanced. Defence of the petitioner, claiming that the petitioner is a labourer and therefore the property of the petitioner was exempted from attachment by virtue of Rule 10 of the 2nd schedule to the Income Tax Act, 1961 read with section 60 of the Civil Procedure Code, 1908 - It has to be examined from the status of the petitioner at the time of the Assessment Order / Penalty Order which has given rise to the proceedings under the 2nd schedule to the Income Tax Act, 1961. Change in the status of the petitioner after the rights accrued to the Income Tax Department to attach the property of the petitioner cannot be whittled down. Therefore, a reference to Rule 10 of the 2nd schedule to the Income Tax Act, 1961 cannot come to the rescue of the petitioner. Challenge to the Impugned Order extending the time for bringing the immovable property of the petitioner to sale by auction by fixing the time till 31.03.2022 cannot be said to be beyond the period of limitation.

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• 2025 (1) TMI 1351
  Validity of Notices of Demand and Orders u/s 206C - as submitted that the authorities have been tried to be impressed upon by filing application showing applicability of the judgment passed in the case of Ghanshyam Mishra and Sons Private Ltd. [ 2021 (4) TMI 613 - SUPREME COURT] but the authorities have not passed any order As submitted that suffice will be at this stage if the direction will be issued upon the competent authority to take a decision on that, if not already taken. Revenue, has submitted that if the application has not been decided, then the same will be decided in accordance with law within a reasonable period. HELD THAT:- As without entering into the merit of the issues, the concerned respondent is hereby directed to decide the application dated 17.08.2024, if not already decided, within a period of three weeks from the date of receipt of copy of the order.

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• 2025 (1) TMI 1350
  Non-payment of advance tax in accordance with section 249(4)(b) - Validity of ex-parte order - HELD THAT:- We are of the considered opinion that the advance tax if any payable as per section 249(4)(b) is to be determined at the behest of the assessee. If there is no advance tax liability according to the assessee, then he need not to deposit the same CIT(A)/NFAC is required to admit the appeal of the assessee in such an event. In the instant case, it is the claim of the assessee that since the assessee remained absent the assessment order was passed ex-parte whatever deductions were legally available to the assessee were not allowed by the AO. Contention of the assessee that being cooperative society the business income of the assessee was subject to deduction 80P(2)(a)(i) and 80P(2)(d) and due to ex-parte order the same deductions were not allowed which resulted in determination of unnecessary taxable income in the hands of the assessee - We find that the appeal of the assessee was dismissed in a summery manner without admitting the same for adjudication on merits of the case. It was the observation of Ld. CIT(A)/NFAC that the assessee was required to deposit advance tax in the light of section 249(4)(b) of the IT Act when the assessee was issued show cause to explain this point he did not chose to file any application to exempt him from payment of advance tax in the light of the fact that no advance tax is payable by him. Considering the totality of the facts of the case and without going into merits of the case, we deem it appropriate to set-aside the order passed by CIT(A)/NFAC and remand the matter back to him with a direction to admit the appeal of the assessee adjudicate the same on merits of the case after providing reasonable opportunity of hearing to the assessee. Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (1) TMI 1349
  Rejection of books of accounts - estimation of income of the appellant @ 8% of gross contract receipts - HELD THAT:- The assessee participated in the assessment proceedings. Books of accounts of the assessee were produced which were verified by the AO on test check basis. As during the scrutiny proceedings, the Assessing Officer has observed that the assessee has filed self made vouchers/bills, which were paid in cash and which are not verifiable as not supported by evidences, which led to rejection of books of account u/s. 145(3) of the Act and net profit was computed @ 8% of the gross receipts. Assessee is not able to demonstrate even before ITAT that the vouchers/bills were not self made and same can be subjected to verification/enquiry. Thus, the findings of the authorities below remained uncontroverted by the assessee even before the ITAT. It is equally true that the authorities below never made any attempt to quantify and specify with precision as to what are self made vouchers which could not be subjected to verification and their magnitude/quantification. The authorities below have not pin pointed the said self made cash vouchers and their quantification/identification, which were not supported by evidences and which remained unverifiable. The turnover of the assessee during the year under consideration was Rs. 4,00,48,401/- while in the assessment year 2008-09, the turnover was Rs. 4,16,02,496/-. Thus, the turnover in this year is merely 4% lower than the turnover for the assessment year 2008-09, which is negligible difference, and Respectfully following the decision of ITAT for the assessment year 2008-09 and with a view to end this protracted litigation, confirm the addition of Rs. 1,00,000/- in the hands of the assessee keeping in view that the assessee has produced self made vouchers/bills before the authorities below which were not verifiable, and this finding could not be unsettled by the assessee even before ITAT by producing bills/vouchers and its verification, no doubt, it is true that the assessee produced books of account, tax audit report before the authorities below. The assessee has also claimed that these vouchers were receipted by the recipients. It is also claimed that the chartered accountant who did the tax-audit did not pointed any fault/defect in the accounts. Addition of interest from JSPL - Assessee has claimed that he has reflected the said income in profit and loss account of Shakti Construction, and the same was accordingly brought to tax under the head income from business or profession. It is observed that the assessee has not brought the same to tax under the head income from other sources. The assessee has not demonstrated that the said interest income is earned keeping in view the business requirement and business exigencies, rather than investing the surplus fund lying with the assessee with JSPL. This requires investigation of facts and the matter is remanded back to the file of Assessing Officer for limited verification as to whether said funds were invested with JSPL keeping in view commercial/business expediency rather than merely investing surplus fund, on which interest was earned.

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• 2025 (1) TMI 1348
  Disallowance u/s. 43B on account of GST payable - short contention of the assessee is that GST has not been routed through Profit and Loss account, therefore, no disallowance can be made - HELD THAT:- The amount disallowed u/s. 43B has not been routed through P L account is not rebutted by the Revenue. No contrary material has been placed before us, by the Revenue to show that the assessee has claimed deduction in respect of GST. The contention of the assessee that aforesaid amount has been reflected as GST payable under the head current liabilities is uncontroverted. As in the case of CIT vs. Noble and Hewitt (I) P. Ltd. [ 2007 (9) TMI 238 - DELHI HIGH COURT] held that where the assessee has neither claimed deduction on account of Service Tax nor has debited the amount to Profit and Loss account, the provisions of section 43B of the Act do not get attracted. Hence, question of disallowance of deduction not claimed does not arise. Decided in favour of assessee.

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• 2025 (1) TMI 1347
  Assessment order passed in violation of the principles of natural justice shorter time given for response to the draft assessment - HELD THAT:- Show cause/draft assessment order, was issued by the AO to assessee on 19.04.2021, with the request to respond or revert to the same by 21.04.2021, the same cannot be construed to be a reasonable time allowed to comply by the assessee, in terms of the mandate of law, as deliberated upon and interpreted in the cases referred further fortified by the decision of MM Wonder Park Private Limited [ 2022 (6) TMI 1523 - CHHATTISGARH HIGH COURT ] while dealing with the issue of reasonable time to respond towards the show cause notice u/s 148A(b) of the Act, wherein Hon ble High Court had observed that the time period of 7 days provided to the assessee company vide notice u/s 148A(b) of the Act was unreasonably short, and thus, violative of principles of natural justice. We, thus, in terms of aforesaid observations deem it appropriate to set aside the show cause notice/draft assessment order dated 19.04.2021 and remit the matter back to the file of Ld. AO to decide the issue afresh after affording reasonable opportunity of being heard to the assessee.

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• 2025 (1) TMI 1346
  Revision u/s 263 - show cause notice issued on the basis of the audit objection - Raising of New Issues by PCIT - HELD THAT:-There is a limitation of two years for the purposes of initiating the proceedings u/s 263, as per the Act as per the judgment of Tulsi Tracom Private Limited [ 2017 (9) TMI 1041 - DELHI HIGH COURT ] Notice issued by the PCIT on 17.2.2022 brining in new issues was beyond two years from the end of the assessment year in which the assessment was made. Therefore, the second notice of 17.2.2022 was not a valid one. Accordingly, the order as passed by the PCIT is quashed on this issue as well. Unexplained investment in immovable property and the ICICI Bank account - Even on merits we find that the investment in immovable property and the deposit in the ICICI Bank account were subject matter of issue of notice u/s 148. AO was well aware of the issues involved while framing the assessment, for which, he raised specific queries which were replied, along with documentary evidence, which were furnished before the A.O. further regarding the ICICI Bank account, AO did not agree with the audit objection and clarified that ICICI Bank account was part of the record lying in the other folder as per the annotated report reproduced above. Thus, it is not a case of inadequate enquiry, rather the A.O. had made the enquiry and also by relying upon the various judgments of the Apex Court and of the Chandigarh Bench, particularly of Loil Continental Foods [ 2019 (12) TMI 263 - ITAT CHANDIGARH ] we hold that even on merits, the issue of notice u/s 263 was bad in law as the A.O. had made the necessary enquiries on both the issues and, thus, the order as passed by the PCIT both on legal and merits of the case is quashed. Assessee s appeal is allowed.

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• 2025 (1) TMI 1345
  Validity of Reopening of assessment beyond limitation period - limitation period under TOLA for AY 2014-15 - time limit for issuance of re-assessment notice under new regime - HELD THAT:- As relying on ASHISH AGARWAL [ 2022 (5) TMI 240 - SUPREME COURT] notice u/s 148 of the Act was issued on 29/07/2022 whereas the original time limit for six years was 31/03/2021. Therefore, even under the TOLA, the time limit for issuance of notice u/s 148 of the Act had expired on 30/06/2021 and as per the concession made by the revenue, before the Hon ble Supreme Court, all notices issued on or after 01/04/2021 will have to be dropped as they will not fall for concession during the period prescribed under TOLA. Hence, the impugned notice dated 29/07/2022 is admittedly barred by limitation and is accordingly set aside.Appeal of the assessee is allowed.

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• 2025 (1) TMI 1344
  Validity of ex parte order passed by CIT(A) - as argued notice issued by the CIT(A) were never received or served upon the assessee and as such they could not present its case before the CIT(A) who proceeded ex parte and decided the appeal on merit without giving effective opportunity of hearing to the assessee - HELD THAT:- As per Section 250 sub section 2(a) the hearing to be given is not a formality but an effective hearing is sine qua non for the purpose of upholding the principal of natural justice. Thus, as no effective opportunity of hearing has been given and there is no proof that the notice sent on various dates were duly served or brought to the notice of the appellant/assessee. Matter needs to be restored to the file of the Ld. CIT(A) for giving effective hearing to the assessee who shall present its case before the Ld. CIT(A) within 60 days. Decided in favour of assessee for statistical purposes.

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• 2025 (1) TMI 1343
  Short Term Capital Gain - assessee purchased and transferred development rights in her personal capacity - HELD THAT:- As in the case of Sowmya Sathyam [ 2020 (12) TMI 101 - ITAT BANGALORE] had held that the scope of section 50C was restricted only to two types of capital asset i.e. land or building or both. It was further held that the development rights in the land were not the land itself and, therefore, the provision of section 50C of the Act was not applicable on transfer of development rights in the land. An identical view was taken in the case of Smt. Vimal Baburaa Jadhav[ 2021 (9) TMI 860 - ITAT PUNE] wherein it was held that section 50C of the Act applied only in the case of transfer of land and does not apply to the case of rights in land. We are of the considered view that the Ld. CIT(A) had rightly deleted the addition on account of STCG on deemed transfer of development rights in land. No such addition was called for as the land belonged to the partnership firm only and the development rights was only notionally transferred by the assessee. Therefore, the order of the Ld. CIT(A), is upheld and the appeal of the revenue is rejected.

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• 2025 (1) TMI 1342
  Addition u/s. 69A - cash deposits made by the assessee during the demonetization period unexplained - HELD THAT:- Assessee did not furnish the details of physical stock available in its hands before him. Admittedly, the assessee could make cash sales only if it could show that it was having sufficient quantity of physical stock. Hence the examination of availability of physical stock is essential to examine the claim of cash sales. Accordingly, we are of the view that the details of stock summary furnished by the assessee before the Tribunal by way of additional evidence are very much necessary to adjudicate the issue before us. Accordingly, we admit the same. If the AO had doubted the claim of availability of cash in the books of the assessee, which was claimed to have been generated out of cash sales, it is necessary for him to conduct proper enquiries to find out the veracity of the claim made by the assessee. Without conducting necessary enquiries, the AO should not take any adverse view. Since the AO has not conducted any enquiry, we are of the view that the AO has made the impugned addition of Rs. 3.05 crores u/s. 69A of the Act under suspicion, which is not permitted under the law. There is a lacunae on the part of the assessee also. We noticed that the assessee did not furnish details of physical stock before the AO, which is essential to prove the claim of cash sales. As noted earlier, the assessee could make cash sales only of gold, silver, precious stones etc., only if it was having sufficient quantity physical stock in its possession. Hence, in order to examine the claim of cash sales, it is imperative for the AO to examine the availability of physical stock also. We noticed that the details of stock summary have been furnished for the first time before the Tribunal in the form of additional evidence. Hence, we are of the view that this issue needs to be examined afresh at the end of the AO. Appeal of the assessee is treated as allowed.

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• 2025 (1) TMI 1341
  Denial of deduction claimed u/s. 80IA(4)(iii) - it is the income arising from house property and not a business income - also assessee has not satisfied the conditions for claiming the deduction u/s. 80IA(4)(iii) that there should be minimum 30 industrial units set up by the assessee for the purpose of claiming the said deduction - HELD THAT:- It is evident that this issue has been recurring in nature were the Tribunal has constantly granted relief to the assessee by holding that the assessee is entitled to claim deduction u/s. 80IA(4)(iii) of the Act. Even on the merits of the case, it is pertinent that the Industrial Park Scheme, 2002, notified by the GOI in exercise of powers u/s. 80IA(4)(iii) of the Act facilitates projects for setting up industrial parks which are eligible for claiming deduction u/s. 80IA(4)(iii) of the Act. There is no iota of doubt that the assessee was entitled to get benefit under this provision, for the reason that the assessment order does not speak of any violation in the conditions specified in the scheme, though, the revenue has raised a specific ground of appeal that the minimum 30 industrial units requisite for claiming deduction has not been satisfied. The assessment order nowhere has specified that the assessee has not complied with the said condition. In the absence of the same, we find no infirmity in the order of the ld. CIT(A) in allowing the deduction claimed by the assessee u/s. 80IA(4)(iii) of the Act. Decided against revenue.

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• 2025 (1) TMI 1340
  Interest u/s 244A(1)(b) on refund arising out of self- assessment tax - scope of amendment introduced by Finance Act, 2016 - there was an inordinate delay of 68 months from December 2014 to July 2020 in granting refund due to the assessee, thus argued that the assessee is entitled to additional interest @3% per annum u/s 244A(1)(b) for the entire period - HELD THAT:- It is seen that section 244A dealing with interest on refund was amended by the Finance Act, 2016 and clause (aa) specifically providing for interest on self-assessment tax was introduced w.e.f. 01.06.2016. Thus, the assessee s claim for interest on self-assessment tax is clearly covered under the provisions of clause (b) of section 244A(1). Even though the self-assessment tax was not specifically mentioned therein, it has been held that the assessee is entitled to interest on refund arising out of excess amount paid as self- assessment tax. Scope of amendment introduced by Finance Act, 2016 - The insertion of subsection (aa) in section 244A(1) was made by the Finance Act, 2016 to clarify the intent of revenue to grant interest on self- assessment tax. The issue is also covered by the decision of Stock Holding Corporation of India Ltd. [ 2014 (11) TMI 899 - BOMBAY HIGH COURT ]. The contention of the revenue is that the decision was rendered prior to insertion of clause (aa) which was brought in with prospective effect is not acceptable. There have been numerous decisions, both before and after the insertion of clause (aa) on this issue, granting the assessee s claim for interest u/s 244A on excess self-assessment tax. Accordingly, we hold that the assessee is entitled to interest on refund arising out of excess self-assessment tax from the date of payment of self-assessment tax till the date of grant of refund. Interest on delayed grant of refund - claim for additional interest - it is seen that there has been an inordinate delay of more than five years in giving effect to the order of Ld. CIT(A) by the AO - Since a specific provision to grant interest on delayed refunds was introduced by the Finance Act, 2016 by inserting subsection (IA) in section 244 w.e.f. 01.06.2016, we are of the view that the assessee is entitled to get interest on the delayed refund from the date of introduction of this provision i.e. 01.06.2016 till the date of grant of refund. Decision of Nima Specific Family Trust [ 2018 (10) TMI 441 - GUJARAT HIGH COURT ] is squarely applicable to the facts of this case. It was held therein that the assessee would be entitled to get additional interest w.e.f. 01.06.2016 in view of the insertion of subsection (1)(A) by finance Act, 2016 w.e.f. 01.06.2016 prospectively. Assessee s appeal with regard to the claim of additional interest on delay refund is partly allowed and revenue s appeal is dismissed.

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• 2025 (1) TMI 1339
  TDS u/s 194A - payment of interest to JV - as per the AO the assessee was liable to deduct tax at source on the interest payment made by it to the JV on the mobilisation advance, which it had failed to do - CIT (A) directed the Ld. AO that the assessee cannot be considered as assessee-in-default u/s 201(1)/ 201(1A) and consequently demand was deleted - HELD THAT:- As per CBDT Circular No.07/2016 dated 07/03/201, where consortium arrangement is made for executing the EPC/ Turnkey contracts in which each member is independently responsible for executing its part of work through its own resources and also bears the risk of its scope of work, i.e., there is clear demarcation in the work and costs between the consortium members and each member incurs expenditure only in its specified area of work, such a consortium may not be treated as an AOP. Thus, once in the case of the assessee, no work is performed by the JV or the other constituent member i.e. AGE, but only by the assessee, the AOP does not exist and therefore, we accept the contention of the assessee about non-applicability of Chapter XVII of the Act and no TDS was allowable to be deducted. Accordingly, the order of the ld. CIT(A) is confirmed and the grounds raised by the Revenue in both the years are dismissed. Disallowance of deduction u/s 80IA - infrastructure facility should not only be developed but also operated by the assessee so as to make the profits derived from the infrastructure facility qualify for deduction u/s. 80IA - HELD THAT:- Assessee is a developer of each of the infrastructure facility mentioned and considering the scope of work undertaken by the assessee in each of the contracts, the work carried out by the assessee cannot be said to be works simplicitor. Hence, in our view all the conditions required to be claimed and the deduction u/s. 80IA for all the projects are fulfilled. Accordingly, the order of the ld. CIT(A) on this ground is upheld and the appeal of the Revenue is dismissed. Taxing Capital gain @20% on sale of depreciable long-term capital asset - HELD THAT:- Both the parties agreed that this issue now stands covered by the judgment of SKF Ltd. [ 2024 (10) TMI 477 - ITAT MUMBAI] as held that in case of long-term capital asset, which are depreciable asset in terms of Section 50, even though are deemed to be taxed as short term capital gain, however, the tax rate u/s. 112 would be 20%. Thus, order of the ld. CIT (A) is upheld and the grounds raised by the Revenue are dismissed. Additions u/s 35D on account of AIR reconciliation while computing the Book Profit u/s 115JB - HELD THAT:- A perusal of the audited accounts would show that there is no adverse comment by the auditor regarding the preparation of accounts in accordance with the provisions of Schedule III to the Companies Act, 2013. Moreover, there is no such allegation by the AO and the hence the audited accounts comply with the requirements of section 115JB(2) of the Act. A perusal of Explanation 1 regarding adjustments to be made in the computation of the Book profits would show that the adjustments made by the AO fall in none of clauses stated therein and since AO has limited power u/s 115JB to make adjustment to book profit only in respect of items provided in Explanation 1 to section 115 JB(1) - Decided against revenue. Disallowance of Prior Period Expenses - HELD THAT:- Though the payment of expenses were made during the next assessment year i.e. A.Y.2018-19, the said expenses have bene incurred for the period pertaining to impugned assessment year. Since, assessee follows mercantile system of accounting; the said expenses are to be allowed in the year in which they pertained. Accordingly, the said claim of prior period expenses which has been incurred pertain to this year even though the payment has been made in the next assessment year, then also same has to be allowed. Accordingly, grounds raised by the assessee are allowed. Addition on account of difference in reconciliation as per 26AS - HELD THAT:- The income returned by the parties and income reflected by the assessee was different except in one case with AGE PATEL Joint Venture (JV) which is for the amount of Rs. 1,48,34,838/- rest are all minor accounts. Once the assessee had produced books of accounts which have been accepted, then if there is any reconciliation amount and assessee had claimed that assessee had shown the correct income, then ld. AO should have at least verified from those parties reflecting the payment. Looking to the fact that assessee has already reconciled almost every item except for 0.10% of total reported entries, therefore, we agree with the contention of the assessee that addition should not be made and this view is supported by the decision of the Co-ordinate Bench in the case of TUV India (P) Ltd. [ 2019 (8) TMI 1050 - ITAT MUMBAI] Allowability of interest on delayed payments of TDS - AO held that interest of late payment of TDS is not an allowable expenditure whereas, CIT (A) has allowed the same - HELD THAT:- Claim of the assessee regarding interest expenditure and delayed deposit of TDS, cannot be held to be an allowable expenditure. This issue has been discussed in detail in the case of DLF Ltd. [ 2019 (6) TMI 1288 - ITAT DELHI] held that depositing TDS in time is responsibility of assessee and interest in delay in deposit of TDS cannot be allowed as business expenditure. Accordingly, ground No.1 raised by the Revenue are allowed and the claim of the assessee is rejected. Disallowance made u/s. 40 (a) (ia) - Assessee indemnified the JV and AGE from all contractual responsibilities and liabilities arising out of the contract - HELD THAT:- JV had ceased to exist as it was merely a pass through entity which shall not be executed any work independently. Apart from that, ld. AO of JV had accepted that entire contract receipts are taxed in the hands of the assessee only and JV is only a pass through entity. The assessee during the year had paid interest on mobilization advances received from IRCON wherein ld. AO has held that assessee did not deduct TDS u/s. 194A(3)(iii). As already given a detailed finding after relying upon the judgment of the Hon ble Bombay High Court and CBDT Circular. Thus, we hold that no TDS is to be deducted, accordingly, disallowance u/s. 40(a)(ia) deleted by the ld. CIT(A) is confirmed. Write off of bad debt relating to Patel Engineering Resources Ltd. (PERL) - Allegations of the AO that interest accrued on loan given to PERL has been added to the loan itself and, therefore, the writing off of such interest is nothing but writing off of loans - HELD THAT:- Once there is a categorical finding that interest income has been considered as business income in the earlies years which has been written off by the assessee during the year under consideration, the conditions provided in Section 36(1)(vii) r.w.s. 36(i) stands satisfied and therefore, the finding and observation of the ld. CIT(A) is upheld and the grounds raised by the Revenue are dismissed. Write off of loan advanced to DEPL and advance to wholly step down subsidiary - HELD THAT:- CIT (A) has given a finding of fact that advances were given to its subsidiaries in furtherance of the business objects of the Assessee and, therefore, were given in the course of routine business transactions. The revenue has not controverted the said factual finding. Write off of advances made during routine business activity are allowable as a deduction, as the same are incidental to carrying on of business activity. The utilisation of advances by the borrower in no manner dictates the allowability of the loss in the hands of the Assessee. The Assessee, here in this case had advanced the loans in furtherance of its business objective and, therefore, the loss suffered while writing off the advances/loans is a business loss and eligible for a deduction. If the contention of the Ld. AO is accepted it would lead to an absurd result since for instance a sale of machinery by a dealer, which is a capital asset in the hands of the purchaser, would have to be treated as capital receipt in the hands of the seller also. We are of the opinion that the utilisation of the loan by the subsidiary is not determinative of allowability of the expenditure in the hands of the Assessee. Once the loan has been given out of commercial expediency, it is allowable as deductions, this issue is covered by the decisions in CIT vs. Colgate Palmolive (India) Ltd. [ 2014 (12) TMI 846 - BOMBAY HIGH COURT] and CIT vs. BDA Limited [ 2024 (2) TMI 1342 - BOMBAY HIGH COURT] Accordingly this issue is decided in favour of the assessee. Taxing capital gain @20% on the sale of depreciable long-term Capital asset - HELD THAT:- As already decided in favour of the assessee following the judgment of SKF Ltd. [ 2024 (10) TMI 477 - ITAT MUMBAI] wherein held that in case of long-term capital asset, which are depreciable asset in terms of Section 50, even though are deemed to be taxed as short term capital gain, however, the tax rate u/s. 112 would be 20%. Write off of advance/deposit is not acceptable as bad debt, as a such advance/deposits have not been offered as income in the earlier years - HELD THAT:- If the advance has been given during the course of business and if any loss has been suffered on account of writing off of the advance granted during the course of carrying out of business then it is an allowable loss under section 28 read with section 29 of the Act. This fact has not been disputed at all. It is not a case of claim of bad debts albeit claim of loss incurred during the course of business. Accordingly, Ld. AO is directed to allow the deduction. Nature of expenditure - Disallowance of compensation paid by the assessee to promoters for invocation of shares pledged by the Promoters to lenders - AO contended that the compensation given to promoters for invocation of pledged shares was on loan account and, hence, held to be capital expenditure - HELD THAT:- The manner in which the Promoters have been recompensated, i.e., by issuance of further shares, is not a relevant criteria for determining whether the expenditure incurred by the Assessee is revenue in nature or not. If the contention of the Ld. AO is accepted then it leads to an absurd result inasmuch as if a capital asset is acquired out of accumulated/ working profits, then such acquisition would not be treated as capital expenditure but a revenue expenditure since it was incurred out of accumulated profits. The mode of discharge of consideration is not germane for deciding the nature of expenditure. Thus, we hold that the compensation payable to promoters is allowable as a deduction u/s 37(1) of the Act. AIR Reconciliation assessed as business income - Assessee is not able to substantiate the amount has already been offered to tax in its return of income, therefore, the addition made by AO is upheld - HELD THAT:- We find that assessee was able to reconcile the AIR transactions with the income of the Assessee running into voluminous number of entries. Only un-reconciled entries were 0.03% of the total reported entries which is miniscule difference. If the assessee has shown all the entries in the books of account duly supported by invoices then no addition can be made merely upon the basis of entries getting reflected in the AIR report. Moreover, the books of accounts of the Assessee have been accepted by the Ld. AO. In such a case we agree with the ld. Counsel and the addition is directed to be deleted. Accordingly, ground raised by the assessee is allowed.

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• 2025 (1) TMI 1338
  Estimation of income - bogus purchases - HELD THAT:- AO has accepted the sales recorded by the assessee. The assessee could not have affected sales without purchasing the goods. The assessee could match the sale with corresponding purchases. Hence, we are of the view that the disallowance of entire amount of purchases is not justified As held in M/s Mohammad Haji Adam Co [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT ] the addition should be limited to the extent of bringing the GP rate on alleged bogus purchases to the same rate of other genuine purchases. In the instant case, the assessee has shown that the GP rate on sale of alleged bogus purchases is more than the GP rate of other purchases. Hence, no addition by way of disallowance of alleged bogus purchases is warranted in the facts of the present case. Decided in favour of assessee.

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• 2025 (1) TMI 1337
  Disallowance made u/s 14A r.w.r. 8D - scope of amendments to Section 14A - HELD THAT:- The contention raised by the Revenue stand decided against the Revenue and in favour of the Assessee by decision of the Tribunal in the case of Deputy Commissioner of Income Tax Vs. M/s. Welspun Steel Ltd. [ 2022 (8) TMI 430 - ITAT MUMBAI] wherein as rejected the contention of the Revenue that amendments to Section 14A introduced by the Finance Act 2022 shall have retrospective effect. Computation of book profits u/s 115JB - Disallowance made under Section 14A of the Act the tax liability computed under the normal provisions of the Act would be much more than liability under Section 115JB of the Act, and the Assessee would be assessed under normal provisions of the Act. Therefore, Ground No.2 raised by the Revenue has been rendered academic in nature.

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• 2025 (1) TMI 1336
  Unexplained cash credits - addition being loan taken from the Directors of the assessee company u/s.68 - Onus to prove - HELD THAT:- One very important fact here in this case which proves the genuineness of the loan is that, these are not direct loan given to the assessee company but payment was made to various persons on behalf of the company in respect of the property to be purchased in the name of the company. These details of payments made to 169 people were filed alongwith their confirmations. Thus, it is not a case of direct loan been given to the assessee company, albeit all the Directors have made payment to various persons for the purchase of the property to start the project of the company and the company has shown this as liability in the balance sheet in the name of the Directors. Accordingly, it cannot be said that the onus cast upon the assessee has not been discharged. Once all these facts have been brought on record, then simply because these Directors have taken unsecured loan for making payments to various parties for purchase of land in the name of the company cannot be added u/s.68 once all these documents have been furnished. Accordingly, addition made by the ld. AO and as confirmed by the ld. CIT (A) is deleted. Decided in favour of assessee.

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• 2025 (1) TMI 1335
  Additions u/s 56(2)(viib) - valuation of shares issued by the assessee company - Onus to prove - CIT(A) directed Ld. AO to obtain FMV of the shares either from IEPL or from IBBI Registered Valuer or from both of them, at the option of the assessee - HELD THAT:- In terms of the extant provisions of Sec.56(2)(viib), it was the onus of the assessee to justify the valuation of shares. The report furnished by the assessee during regular assessment proceedings has not considered the loan liabilities and therefore, the same is clearly flawed. CIT(A) directed Ld. AO to carry out valuation from two valuers, at the option of the assessee and restricted the scope of enquiry which cannot be held to be justified. No option was given to Ld. AO to carry out valuation from independent valuers. It is quite clear that the valuation made by two valuers is much higher than the issue price of shares and the impugned addition has practically been deleted giving no option to Ld. AO. As rightly pointed out by Ld. CIT-DR, the report of CS Suresh has not considered the outstanding liability and the liabilities have been treated as share capital advance / share application money which is contrary to facts on record. CIT-DR also questioned the valuation of IEPL on the ground that DCF based valuation was erroneous since the assessee had not carried out any business activities in subsequent there years viz. AYs 2017-18 to 2019- 20 whereas this fact was much known to that valuer at the time of valuing the shares. As respectfully following the directions of M/s Vaani Estates Pvt. Ltd. [ 2019 (5) TMI 952 - MADRAS HIGH COURT] we would hold that Ld. AO would be required to undertake the exercise of fact finding by determining the FMV of shares in terms of Explanation to Sec. 56(2)(viib). This exercise not having been done, the matter deserves to be remanded back to Ld. AO for undertaking the said fact-finding exercise - Appeal stand allowed for statistical purposes.

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• 2025 (1) TMI 1334
  Addition u/s. 69A - unexplained cash deposit in bank account - HELD THAT:- As based on the information of PAN in the data base of the income tax, attached to the bank account in the name of Seva Kendra, AO was provided with the information of the alleged cash deposit. We are thus, satisfied that the alleged cash deposit transactions are not at all related/pertain to the assessee but are of another assessee M/s. Seva Kendra which is duly assessed to tax. We are aware of the fact that assessee did not appear before the lower authorities but considering the smallness of the issue and the facts duly established on record, we set aside the finding of the Ld. CIT(A) and delete the impugned addition. Levy of penalty u/s. 271AAC(1) also be deleted as it is consequential to the addition for the unexplained deposit in the bank account and since the addition has itself been deleted the impugned penalty has no legs to stand. Appeal Decided in favour of assessee.

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• Benami Property

• 2025 (1) TMI 1333
  Benami Property Transactions - orders under Section 26 (3) of Prohibition of Benami Property Transactions Act - provisional attachment orders - Interpretation of Section 24(1) - HELD THAT:- Writ petition was initially filed at the stage when the orders u/s 26 (3) of the Act were yet to be passed. After the said orders were passed, an application under Order 6 Rule 17 of Civil Procedure Code was filed by the Petitioners seeking amendment of the writ petition and to seek further relief for quashing of the said orders under Section 26 (3) of the Act. This application also sought to place on record the orders passed u/s 26 (3) of the Act. Notice was issued in this application on 16th May, 2023 and the said amendment application is still pending adjudication before this Court. Petitioners, for whatever reason, have sought to raise very broad challenges to the provisions itself in this writ petition. They have also brought on record the orders passed by the Adjudicating Authority under Section 26 (3) . Petitioners, under normal circumstances, would have been entitled to file the appeals before the Appellate Tribunal, however, the Petitioners did not avail of the said remedy when available, and had chosen to dispute the vires of the foundational provisions of the Act before this Court. Ill-advised the said remedy i.e., to place the orders on record and file a writ petition before this Court challenging the provisions of the Act and the orders under Section 26 (3) of the Act, may have been, it cannot be said that the same is not a good faith proceeding. As noted by this Court that the appeals, as per Section 46 of the Act, have to be filed within forty-five days, however, the delay, if sufficient cause is shown, is condonable, This Court is of the opinion that the Petitioners ought to be relegated to the appellate remedy, as they no longer press the challenge to the validity of the provisions of the Act. The Petitioners may accordingly file appeals under Section 46 of the Act challenging the orders under Section 26 (3) of the Act, before the Appellate Tribunal. Period during which the present writ petition remained pending would be liable to be excluded from the limitation period in terms of Section 14 of the Limitation Act. As made clear that this liberty is subject to the condition that the Petitioners prefer the appeals before the Appellate Tribunal by 28th February, 2025. If the said appeals are filed by 28th February, 2025 before the Appellate Tribunal, the appeals shall not be dismissed on the ground of being barred by limitation or delay. Confiscation proceedings - Confiscation proceedings are listed before the Adjudicating Authority on 28th January, 2025 at 2.30 p.m. On the said date, the pleadings have to be completed before the Adjudicating Authority. The Petitioners are permitted to place today s order of this Court permitting them to file the appeals before the Adjudicating Authority in which case, the Adjudicating Authority shall afford time to the Petitioners before proceeding further - in terms of the Proviso to Sec. 27 (1) of the Act.

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• 2025 (1) TMI 1332
  Prohibition of Benami Property Transactions - Provisional Attachment Order - real owner - relationship between the alleged Benamidar (Sh. Onkar Singh) and the Beneficial Owner (Sh. Dwarika Gupta) - only contention advanced on behalf of the Appellants is the existence of a fiduciary relationship between the alleged Benamidar and him, thus bringing it under exception provided u/s 2(9)(A)(ii) of the PBPT Act, 1988, as amended by the Act of 2016. HELD THAT:- In the present case, it is categorically asserted by the Appellant in all the pleadings that the properties had been bought in the name of the Benamidar by the Beneficial Owner because of the prohibition under the Chhattisgarh Land Revenue Code on purchase land of Scheduled Tribe by non-ST person as per section 165(6). Thus, the entire transaction of the appellant was to contravene the provisions of a law. We are of the view that the agreement / authority letter placed by the Appellants on record cannot be relied upon. The Ld. AA noted certain discrepancies. Furthermore, it is clearly evident from the facts on record that the two appellants in these two appeals were hand-in-glove with each other in the entire set of transactions. As such, it would not have been difficult for them to create a self-serving document of this nature to justify their actions which were in defiance not only of the Chhattisgarh Land Revenue Code, but also the letter and spirit of the PBPT Act, 1988 (as amended in 2016). In the present case not only was there a transfer of title to the property in the name of the Benamidar, Sh. Onkar Singh but also the same was for the unlawful purpose of circumventing the law regarding purchase of tribal land by non-tribals. On both counts, therefore, the exception under Section 2(9)(A)(ii) is not available to the appellants in the present case. The relevant facts are that the said properties were owned by persons belonging to ST community and Sh. Dwarika Gupta has asked Sh. Onkar Singh to purchase the same on his behalf and also provided him with Sh. Onkar Singh to purchase the same on his behalf and also provided him with the necessary funds. The initial sale deeds were transferred in favour of Sh. Divya deep Gupta, son of Sh. Dwarika Gupta. From these facts, it is evident that not only the lands were purchased in the name of the benamidar (Sh. Onkar Singh) for consideration provided by the beneficial owner (Sh. Gupta), but the same were held by the former for the benefit of the latter. The subsequent transfer by Sh. Onkar Singh to Divya deep Gupta, s/o Dwarika Gupta would therefore, be direct contravention of Section 6 of the Act and, as such, null and void. Accordingly, the same has rightly been attached as benami property. The appellant s contention in this regard is, therefore, rejected. Matter be remitted back to the Ld. Adjudicating Authority for a factual verification as to whether the properties at serial no. 4 to 10 belonged to or stood in the name of Shri Onkar Singh Gond and to record a fresh finding whether they constituted benami properties within the meaning of the PBPT Act, 1988 (as amended by the Act of 2016). The Ld. AA would afford the Appellant a reasonable opportunity to be heard and to adduce necessary documentary evidence in this regard. The needful would be done within a period six months from the date of communication of this order. It is made clear that the matter is remanded back to the Ld. AA only for the limited purpose as stated in the preceding paragraph. In reference to the other properties constituting the subject matter of this appeal, namely, the properties listed at Sl. Nos. 1-3, 11 12, 13-15,16 paragraphs 3 to 57, the appeal shall stand dismissed.

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• Customs

• 2025 (1) TMI 1331
  Imposition of penalty and forfeiture of security deposit - order passed without giving any reasons - non-application of mind - principles of natural justice - HELD THAT:- The Tribunal has clearly come to the conclusion that the only argument of the adjudicating authority (Respondent No. 2) was that the Appellant was aware of the port of discharge and this was based on the contradictory statements of the exporter and the investigation conducted against the exporter. The Tribunal came to the conclusion that while the investigation conducted may or may not lead to the confirmation of the offenses by the exporter, it would not be conclusive evidence to establish gross negligence or misconduct on the part of the Appellant. It is difficult to understand how the forfeiture of security deposit and imposition of penalty could be upheld when the Tribunal itself comes to the conclusion that there is no evidence to establish that there is any gross negligence or misconduct on the part of the Appellant and neither has the adjudicating authority been able to prove that the Appellant was in the knowledge of the actual port of discharge, which was different from the final destination. Conclusion - The penalties and forfeitures cannot be sustained without clear evidence of negligence or misconduct. The forfeiture of security deposit and the imposition of penalty is unsustainable in law and is hereby set aside - Appeal disposed off.

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• 2025 (1) TMI 1330
  Jurisdiction to issue SCN - entitlement to the release of duty drawback and other export incentives withheld by the respondent authorities. HELD THAT:- The respondent authorities have adopted an arbitrary and capricious approach in dealing with the issue of claim of the duty drawback and have been annoyed by the petitioner s action of allegation of demand Rs. 75,000/- for clearance of the goods consignment by the respondent no. 6 and the action of the petitioner to approach to this Court for claim of the duty drawback by issuing the impugned show cause notice after a gap of 9 months on service of the notice issued by this Court. It is not in dispute that that goods have been permitted to be exported on final assessment made by the respondent authorities on 21.06.2018 and thereafter, the Manifest was also filed by the petitioner. The petitioner also furnished the Export Realization Certificate from the concerned bank to the effect that the foreign exchange has been received on the export made by the petitioner. Therefore, in the facts of the case, the petitioner is entitled to the claim of duty drawback and in accordance with the duty drawback rules as there is no other deficiency found by the respondent authorities. So far as the issuance of the impugned show cause notice is concerned, the only reliance is placed on Section 14 of the Customs Act, 1962 read with Rule 8 of the Valuation Rules, 2007 to invoke the provisions of Section 113 (i) (ia) of the Customs Act, 1962. On perusal of Section 14 of the Customs Act, 1962, it mandates that the respondent authorities are bound to accept the transaction value and only recourse to the valuation rules can be made pursuant to Clause (iii) of the proviso if the proper officer has reason to doubt the truth or accuracy of such value. It appears that the valuation done by the valuer as per Rule 8 of the Valuation Rules, 2007 was available since July, 2018, however, no action was taken by the respondent authorities till the notice issued by this Court is served by the petitioner to the respondents. In such circumstances, in absence of any further allegations of irregularities in furnishing the material particulars with an information furnished by the petitioner for the purpose of claim for drawback, the respondents could not have assumed the jurisdiction to issue the impugned show cause notice. Considering the facts of the case, there is nothing on record to show that the goods, which were exported by the petitioner, the petitioner has failed to provide information, which do not correspond in material particular with the exported goods and the information has nothing to do with the valuation of the goods for the purpose of claim of the drawback - the contention raised by the respondent authorities that the goods were provisionally assessed, which were tried to be justified by the screenshot appearing on the EDI system is nothing but an eye wash so as to see that the petitioner is again relegated back to the respondent authorities for adjudication of the show cause notice, which is apparently issued without jurisdiction. The Hon ble Supreme Court in the case of Commissioner of Central Excise and Service Tax, Noida vs. M/s. Sanjivani Non-Ferrous Trading Pvt. Ltd. [ 2018 (12) TMI 738 - SUPREME COURT ], while considering valuation of the goods as per Section 14 of the Customs Act, 1962 has held that assessable value has to be arrived at on basis of price which is actually paid, which is the basic principle enshrined in the provisions of Section 14 of the Customs Act, 1962. Conclusion - The administrative actions must be fair, just, and within jurisdiction. The valuation of goods should reflect the transaction value unless substantial evidence suggests otherwise. The petitioner was entitled to duty drawback, and the respondents actions were deemed arbitrary. The impugned show cause notice dated 16.04.2019 is hereby quashed and set aside. The respondents are directed to adjudicate the claim of the duty drawback of the petitioner in accordance with the duty drawback rules within a period of 4 weeks from the date of receipt of the copy of this order - Petition allowed.

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• 2025 (1) TMI 1329
  Jurisdiction to issue SCN - SCN issued u/s 28 of the Customs Act, 1962 by different DRI authorities, on the ground that they are not proper and competent officers to issue show cause notices - HELD THAT:- Hon ble Supreme Court in the case of M/s Canon India Private Limited [ 2024 (11) TMI 391 - SUPREME COURT (LB) ] held that the show cause notices in all the matters are invalid, without any authority of law and liable to be set aside and the ensuing demands are also set aside. Since in the impugned notices in the present writ petitions the period of 30 days was granted to file reply and further proceedings were stayed by this Court, therefore, all the petitioners are directed to file reply within a period of 30 days. The time limit of 30 days granted to all the petitioners for filing reply in the impugned notices would start from the date of receipt of copy of this judgment. The respondents are further directed to adjudicate the matter in accordance with law. Application disposed off.

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• 2025 (1) TMI 1328
  Appellant s liability for customs duty and penalty - pilferage of goods while in the custody - whether the appellant can be held liable for payment of customs duty and penalty under the provisions of Section 45 of the Act read with Regulation 6 of Handling of Cargo in Customs Areas Regulations, 2009 - time limitation - HELD THAT:- For considering the said issue, reference is invited to a recent decision of the Delhi High Court in CONTAINER CORPORATION OF INDIA VERSUS THE COMMISSIONER OF CUSTOMS [ 2024 (9) TMI 1503 - DELHI HIGH COURT] , where the learned Division Bench upheld the order of the Tribunal in CONTAINER CORPORATION OF INDIA LTD. VERSUS COMMISSIONER OF CUSTOMS (EXPORTS) , NEW DELHI [ 2023 (10) TMI 758 - CESTAT NEW DELHI] holding that the goods got pilfered and container seal found tampered when the goods were not still cleared. It was held that as per Section 45, the custodian is burdened with the responsibility of safe custody of imported goods, unless and until the goods are cleared either for home consumption or for being warehoused. After the first check was ordered by the appraising officer, the shed officer had raised the objection in respect of the goods contained in the container in question that import of Refrigerant Gas in cylinders requires NOC/Approval from the Chief Controller of Explosives, which is evident of the fact that the impugned goods arrived in the said container and were pilfered while in the custody of the appellant - The appellant has been held to be the custodian of the imported goods and, therefore, in terms of Section 45 of the Act read with Regulation 6, they are liable to pay the customs duty and penalty as ordered by the Adjudicating Authority. Time limitation - HELD THAT:- On the issue of time limit as prescribed under Section 28 of the Act, it is seen that the appellant vide their letter dated 27.06.2013 had informed the Department that the container was found empty during the joint survey for which, FIR has been lodged. Taking the date of the said letter, the show cause notice issued on 18.12.2013 is well within the time. Penalty - HELD THAT:- No interference is called for in imposition of penalty under Section 117 of the Act as it was the responsibility of the appellant to keep the goods in safe and secure condition so long as they remain in their custody. Here, the goods have been pilfered while they were in the custody of the appellant. There are no reason to interfere with the impugned order, which is hereby affirmed - appeal dismissed.

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• 2025 (1) TMI 1327
  Classification of imported goods - drawings and designs - to be classified under CTH 49.06 or not? - submission of the Revenue is that the imported item pertains to a Pre Import Activity as reflected in the agreement of supply of ETP and DDGS - HELD THAT:- CTH 49.06 would cover plans and drawings for architectural, engineering, industrial commercial, topographical or similar purposes, being originals drawn by hand; hand-written texts: photographic reproductions on sensitized paper and carton copies. This heading covers industrial plans and drawings the purpose of which, generally, is to indicate the position and relation of parts or features of buildings, machinery or other constructions either as they exist, or for the guidance of builders or manufacturers in their construction (eg., architects or engineers plans and drawings). The plans and drawings may include specifications, directions, etc. printed or not. In the instant case, the supplier, M/s Ventilex B. V. confirmed that these drawings are original, taken print out from computer and solely prepared in accordance to the contract no. IFBFAG/PO/PROJ-CMG/2013-14/017 dated 09.07.2013; in other words, the impugned drawings are original print outs, supplied separately and not as a part of the ETP. The impugned drawings are original print outs, supplied separately and not as a part of the ETP. Therefore, the import of impugned drawings and designs are related to post import activity and not related to pre-import activity, as contended by the Revenue. The Department had also erroneously proceeded on the incorrect premise, that since the value of the impugned drawings was to be included in the assessable value of the equipment imported and/or to be imported subsequently in terms of provisions laid down under Rule 10(1)(b)(iv) of the Valuation Rules, therefore, the impugned goods were classifiable under CTH 84.19 instead of CTH49.06, since ETP was classifiable under CTH 84.19. The above said contention of the Department is clearly misplaced, inasmuch as the sub clause (iv) of clause (b) of Rule 10(1) of the Valuation Rules seems to have been read in isolation. Conclusion - i) The imported drawings and designs are rightly classifiable under CTH 49.06, not CTH 84.19. ii) The value of the drawings should not be included in the assessable value of the ETP under Rule 10(1)(b)(iv) of the Customs Valuation Rules, as they were supplied by the foreign supplier. iii) The drawings pertain to post-import activity, not pre-import activity. iv) The exemption under Notification No. 12/2012-Cus. is applicable, allowing a nil rate of duty. There are no reason to disagree with the reasoned findings given by the ld. Commissioner (Appeals) in the impugned order - appeal dismissed.

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• 2025 (1) TMI 1326
  Levy of penalties u/s 112 (a) and 114AA of the Customs Act, 1962 - Delivery Agents - Allegation that appellants have aided and abetted the smuggling of cigarettes - HELD THAT:- The appellants are only a Delivery Agent of the Principal and acted in a proper manner and ensured that the FCL and sealed container landed properly at Haldia with its seal intact. The FCL sealed container was carried from Jebel Ali to Haldia and this being a FCL sealed container. Therefore, as the Delivery Agents were not aware of the contents inside the container or what was carried inside the container and as a reason of which the Bill of Lading of this consignment/container was clause Particulars of goods as declared by Shipper-Carrier not responsible /Shipper s Load Stow, Count, Seal Weight, Said to contain . It was only at the time of opening of the container. It came to the knowledge of the appellant that these containers are carrying cigarettes. Conclusion - The fact that being the appellants were not known the contents inside the container and they are only Delivery Agent, in that circumstances, the provisions of Section 112 (a) of the Customs Act, 1962, is not applicable on the appellants. The appellants have no knowledge and the appellants have not aided and abetted the smuggling of cigarettes, in that circumstances, no penalty is imposable on the appellants. Appeal disposed off.

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• Insolvency & Bankruptcy

• 2025 (1) TMI 1325
  Application for withdrawal of the Company Petition - settlement agreement and Form FA were obtained under force, coercion and threat - HELD THAT:- The present appeals are disposed off without adjudication on merits in view of the appellant s stand and claim based upon the settlement agreement dated 02.01.2025. Form FA dated 02.01.2025, being the application for withdrawal of the Company Petition, signed on behalf of respondent No. 1, M/s. K. Computers, addressed to the Interim Resolution Professional is placed on record by the appellant, Kalyan Muppaneni, the erstwhile Director of the corporate debtor. Appeal disposed off.

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• 2025 (1) TMI 1324
  Seeking permission to applicant to manage the operations of the corporate debtor as a going concern and also permit the applicant to perform all the duties under section 18 of IBC - Appointment of a new Resolution Professional (RP) and the associated financial management of the corporate debtor - HELD THAT:- It is disputed by Counsel for the Central Bank of India and Arrow Engineering Ltd. that Corporate Debtor is not running as a going concern, hence no payment be directed towards the salary as claimed by the RP. Learned Counsel has also relied on the Judgment of the Hon ble Supreme Court in the matter of Sunil Kumar Jain Ors. Vs. Sunaresh Bhatt Ors. [ 2022 (4) TMI 888 - SUPREME COURT ] to support his submission that unless the employees have worked during CIRP period, no CIRP cost be paid. The new RP may incur expenses which are absolutely necessary for maintaining the Corporate Debtor i.e., security expenses, expenses which are incurred towards payment to Statutory Auditors, Practicing Company Secretary and as well as the RP which was permitted by the Adjudicating Authority itself, this shall be in addition to necessary payments towards the statutory compliances. It is directed that all payments which are to be made in pursuance of this Order shall be upon undertaking that the payments are subject to ratification by reconstituted CoC and in event of CoC not approving the payment, payments are to be refunded. Conclusion - i) RP is permitted to incur expenses towards statutory compliances. Payments towards Statutory Auditor, Practicing Company Secretary and RP shall be paid in accordance with the Order as approved by the Adjudicating Authority on 13.05.2024. The above payments shall be subject to ratification by the reconstituted CoC and shall be undertaken after undertaking from the Parties to whom the payments are being made that in event of payments not being approved, the said shall be refunded. ii) With regard to other claims of payment, including payment of salary to the employees, the same shall be placed before the reconstituted CoC for consideration and approval. iii) Payment to security agencies who have been appointed to securing the assets of the Corporate Debtor shall also be paid. iv) It is further directed that new RP shall not engage any new Professional in the CIRP process, for the time being. Application disposed off.

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• Service Tax

• 2025 (1) TMI 1323
  Levy of service tax - Commercial Training and Coaching Centers services - appellants are facilitating the conduct of classes and award of degree by IIM, XLRI etc - principles of natural justice - HELD THAT:- On going through the Clauses/ Articles of different Agreements, it is clear that the appellants are providing and maintaining infrastructure like classrooms, uninterrupted communication and are marketing the programs; they provide and maintain the facilities under an Agreement with the institutions; the coaching methodology (Pedagogy) is decided by the institutions themselves; the institutions conduct examinations and award certificates; the appellants are also associated with the conduct of the examinations inasmuch as providing invigilators their own or hired; there is a revenue sharing between the appellant and the institutions. Undisputedly, the appellants are involved in providing the infrastructure required for conduct of classes and examinations; they are associated in the activity of the imparting education and award of degrees with the institutions like IIM/ XLRI. At the same time, it cannot be said that the appellants are imparting education and it also cannot be said that they are a commercial coaching or training institute - in a typical Commercial Coaching or Training Center, the Centre has no connection with those who conduct the examination; the respective authorities like universities/ colleges/ institutes/ professional bodies conduct the examinations and the coaching centers trained students/ candidates for the examinations. In the instant case, the services rendered by the appellants are not at all akin to those rendered by the coaching centers. In view of the findings of the learned Commissioner, the appellants are providing support services to the institutions who are engaged in providing education service. This being so, it cannot be held that the appellants have a joint venture with the institutions and are providing the services of a Commercial Training and Coaching Center. Understandably, the institutions referred are not preparing the students for any examination conducted by any other university or authority. The institutions design their own courses and use their own pedagogy and conduct the courses. The role of the appellants is limited to providing the necessary infrastructure and to help the institutions in marketing the courses - there is a contradiction in the findings of the learned Commissioner. It is not the case of the Department that the courses conducted by the institutions do not result in award of a recognized degree/ diploma. Therefore, the appellants are not providing services akin to that of Commercial Training and Coaching Centers. Therefore, the appellants can be held to be providing auxiliary or support services in relation to education. Thus, the services rendered by the appellants should necessarily fall under the exempted services. The learned Commissioner (Appeals) clearly observed that the issue whether the appellants were providing services under Commercial Training and Coaching Centers was not the subject matter of the appeal as neither the appellants nor the adjudicating authority have raised the issue and the impugned order therein has rejected the refund claim of the appellant on the grounds that the appellants have not borne the incidence of tax in terms of Section 11D. On going through the Order-in-Original dated 19.04.2006, it is found that the original authority has rejected the refund claim filed by the appellants mainly on the ground of unjust enrichment. Conclusion - It is established that providing infrastructure and support services to educational institutions does not constitute a commercial training and coaching center liable for service tax. Appeal allowed.

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• 2025 (1) TMI 1322
  Valuation of service tax - Inclusion of waiver from payment of telephone charges, given by the appellants to their employees, referred to as CFA is to be included for the purpose of calculating the service tax payable by the appellants - HELD THAT:- The telephone service providers are required to pay service tax on the consideration received by them, the consideration being the gross amount charged; in this case, the gross amount charged by the appellant is the amount they collected from their employees and not the discount given to the employees in the form of CFA. The appellants relies on a number of cases, including that of M/S BHAYANA BUILDERS (P) LTD. OTHERS VERSUS CST, DELHI OTHERS. [ 2013 (9) TMI 294 - CESTAT NEW DELHI-LB] wherein the principle of law was settled to state that the value of goods or material supplied free of cost would not be included in the gross amount charged under Section 67. This particular submission is not relevant to the facts of the case as there is no goods or material supplied free of cost by the service receivers to the service provider i.e the appellant. What is to be seen in the present case is whether the discount or free allowance extended by the appellants to their employees is includable in the assessable value. In the scheme of the service tax taxation, includability of any amount in the gross amount charged for service requires to be the consideration flowing from the service receiver to the service provider. In the instant case, it is the service recipient that is getting benefitted monetarily in the form of free allowance or discount and there is no flow of consideration from the service recipients to the service provider. For the purpose of valuation of service tax, the goodwill cannot be taken into consideration. It is found that learned Commissioner did not arrive at the value of the goodwill for the purpose of taxation, even if goodwill is considered to be an additional consideration. It is incorrect to take the entire free allowance given to the employees as monetary value of goodwill. Conclusion - (i) Service tax cannot be levied when there is no consideration received. Free allowance given to the employees by the appellant is in the nature of discount/ concession and as the same has not accrued to the service provider-appellant, the same cannot form part of the consideration for the purpose of levy of service tax. (ii) Under the facts and circumstances of the case, Department has not made out any strong argument in favour of best judgment method. (iii) Computation of service tax cannot be on the basis of assumptions and presumptions. (iv) The Show Cause Notice is vague and does not specify the service which is rendered by the appellant; moreover, the benefit of discounts/ free allowance is accruing to the employees rather than the appellant who is the service provider. Consideration flowing towards the service recipient cannot be included for the purpose of taxing the service provided by the appellant. Appeal allowed.

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• 2025 (1) TMI 1321
  Levy of service tax - Erection, Commissioning and Installation service - invocation of extended period of limitation - suppression of facts or not - HELD THAT:- Though the appellant contends that it had made submissions verbally/orally in response to the letter, however, it is not proposed to accept the same for want of any supporting evidence. But in any case, the fact remains that the above intimation was followed by reminders of various dates and hence, there is no dispute as to the starting point, which is 21.02.2007. The Show Cause Notice issued on 22.10.2012 is undoubtedly beyond the normal period, rather extending the larger period of limitation and hence, it was incumbent on the Revenue to prove that the appellant had suppressed facts with an intent to evade payment of tax. From a reading of SCN, the allegation against the appellant is that there was no voluntary compliance on its part despite several reminders and that the non-payment of service tax would have gone un-noticed but for the detection at the time of conducting audit by the departmental officers. Conclusion - The allegations ipso facto would not suffice the invoking of larger period of limitation and nor would the same in anyway amounts to suppression or fraud or even misstatement and hence, the demand of service tax by invoking the extended period of limitation itself stands disproved. Appeal allowed.

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• 2025 (1) TMI 1320
  Recovery of service tax with interest and penalty - Insurance Commission - Finance Payouts - Incentive received from MUL - Handling Logistic Charges - Repairing, reconditioning, restoration service - Reimbursement of Expenses from MUL - Reverse Charge Mechanism on entire expenses appearing in the audited Profit Loss Account - violation of principles of natural justice - HELD THAT:- In the case of M/S ANAND MOTERS AGENCIES LTD. VERSUS COMMISSIONER, CENTRAL EXCISE SERVICE TAX, LUCKNOW [ 2024 (12) TMI 1524 - CESTAT ALLAHABAD] it is considered the Hon ble High Court in remanding the matter, and the present appeal have to be considered in terms of the order passed in that appeal. Since demands in this response have been admitted and paid by the Appellant the Tribunal should have in the first stage itself confirmed the demand and appropriated the said demand against the confirmed demand which has not been done in the earlier round which we do now in the remand proceeding as per the directions of the Hon ble High Court. As the amount due have been paid even prior to the issuance of Show Cause Notice, the penalties could not have been imposed in respect of these demands which are confirmed as per para 4.5. Thus it is not required to interfere with the earlier order, to the extent of setting aside the entire penalties as on all other demand, the earlier order of this Bench in these appeals setting aside the demand and penalties, agreed upon. Conclusion - The amount due have been paid even prior to the issuance of Show Cause Notice, the penalties could not have been imposed in respect of these demands. Appeal disposed off.

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• Central Excise

• 2025 (1) TMI 1319
  CENVAT Credit - input service - Goods Transport Agency (GTA) service for outward transportation during the period April, 2017 to June, 2017 - HELD THAT:- The authorities below have recorded that they did not find any documentary evidence to establish that the transfer of property had taken place on reaching premises of buyer. The purchase orders and tax invoices placed on record by the appellant as annexures to the appeal and noticed that no separate amount has been charged by the appellant from its customer for delivery of the goods upto the customer s place. Purchase orders contained terms like Freight: paid by the supplier , Freight: inclusive or Freight:N.A;. In the tax invoices and the challans, the mode of despatch has been mentioned as by road without reference to any separate amount of freight or transportation. Conclusion - In the facts of the case herein, place of removal is the premises of buyer and not the factory gate of the appellant. Therefore, the appellant is entitled to take credit of Service Tax paid on GTA service for outward transportation of the goods. Appeal allowed.

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• 2025 (1) TMI 1318
  Wrongful availment of CENVAT Credit - input service tax credit document did not contain the name and correct address of the assessee - invocation of extended period of limitation - HELD THAT:- The Original Authority has held that the manner in which the ineligible credit was availed by the appellant clearly pointed to the fact that the recovery of such credit warranted invocation of extended period of limitation. The above logic for invoking the extended period of limitation cannot be accepted, since the law does not provide for any implied or hidden aspects or on assumptions or presumptions; any action proposed to be taken should be specific based on the action or inaction on the part of the assessee. Hence, the manner of availing credit may invite actions which ultimately result in recovery of the same, but however, the same could only be done in the manner known or prescribed under law. The Hon ble Supreme Court in the case of LARSEN TOUBRO LTD. VERSUS COMMISSIONER OF C. EX, PUNE II [ 2007 (5) TMI 1 - SUPREME COURT] has clearly held that the extended period of limitation entails both civil and criminal consequences and therefore must be specifically stated in the SCN. There is no specific allegation as to suppression or fraud in the SCN. There cannot also be any scope to allege so, since as early as 2012 itself, the department had conducted an audit [CERA] wherein the same query was raised, which has also been replied to by the appellant. Admittedly, nothing is brought out on record to indicate as to what prevented the Revenue from issuing the show cause notice immediately, after noticing the wrong availment etc. during audit. Also, why or what prompted them to wait for three more years to issue the show cause notice, also remains conspicuous. More than these, even when the same was brought to the notice through their reply to the SCN, the same has not been considered at all. Conclusion - The Revenue has not satisfactorily proved the invoking of extended period of limitation while raising the impugned demand and the order that has upheld the above demand cannot sustain, for which reason, the same is set aside on limitation alone. Appeal allowed.

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• 2025 (1) TMI 1317
  Interest on the refunded amount deposited as a pre-deposit under the erstwhile provisions of Section 35F and Section 35FF of the Central Excise Act, 1944 - HELD THAT:- In the present case appellant had deposited the amounts by way of reversal of entries in the CENVAT account on 15.11.2007. These amounts were appropriated by the adjudicating authority vide order in original dated 29.05.2009. After appropriation the amounts deposited acquired the character of duty. The order of appropriation was upheld by the Commissioner (Appeal). Subsequently Tribunal allowed the appeal filed by the appellant leading to present proceedings of refund. From the perusal of the above 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. In case of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. [ 2011 (10) TMI 16 - SUPREME COURT ] Hon ble Supreme Court has held that the liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made. 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 pre-deposit amount, as the refund was made within the statutory period, and the applicable provisions did not mandate interest payment. There are no merits in the appeal - appeal dismissed.

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• 2025 (1) TMI 1316
  Refund of Excise duty paid for the period when the factory belonging to the appellant was closed due to the order of the Hon ble Supreme Court - HELD THAT:- The issue in the present appeal is squarely covered by the decision of the Hon ble Tribunal in appellant s own case [ 2015 (9) TMI 514 - CESTAT AHMEDABAD ]. In the above matter, Tribunal held that There is no bar on reopening of the factory in Rules 2008, which is a subsequent event. Further, the appellant in its letter dated 8.2.2011 categorically stated that they were giving intimation of closure of the factory-as required under the Rules, would be implied surrender of registration. It is already observed that in the present case, taking into account of order of Hon ble Supreme Court, notification of Ministry of Environment and Forest, and the letter dated 8.2.2011 of the appellant to close down their factory and further consequence of surrender of registration may not be followed due to subsequent order dated 17.2.2011 of Hon ble Supreme Court, the appellant should not be penalized by rejecting the refund claims, for the reason, they had re-opened the factory and such reading of the said provision, would be totally unjust, improper and against all cannons of natural justice and fair play. There are no reason to take a different view in the matter. Considering the above, since the factory was closed in deference of the Hon ble Apex Court s order, the appellant is eligible for refund of duty paid in advance for the period from 09.02.2011 to 16.02.2011 8(eight) days. Conclusion - The appellant is eligible for a refund of the duty paid in advance for the eight-day period when the factory was closed. Manufacturers should not be penalized for following judicial orders, and procedural requirements should be interpreted in light of fairness and justice. Appeal allowed.

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• Indian Laws

• 2025 (1) TMI 1315
  Autonomous Body - EPC (Export Promotion Council) exercises public functions or not - to be treated as State or not - Seeking grant of childcare leave - challenge to Human Resource Policy implemented by CHEMEXCIL with effect from 08.01.2024 - HELD THAT:- The Division Bench of this Court in DR JITARANI UDGATA VERSUS UNION OF INDIA ANR. [ 2022 (10) TMI 1272 - DELHI HIGH COURT] has held that The function performed by the Gjepc cannot be termed as public duty and any administrative or financial hold that the Central Government is deemed to have over Gjepc is far from pervasive. The Gjepc retains its autonomous character and it is the CoA which not only looks after the affairs of the Gjepc, but is also empowered to make rules and regulations with regard to conditions of service, appointment, elections, etc. Gjepc does not satisfy any of the requirements or tests laid down by various judgments of the Supreme Court for establishing whether or not an authority can be deemed to be a State under Article 12. Conclusion - The functions of CHEMEXCIL are admittedly analogous to the functions of GJEPC, albeit in a different industry. The writ petitions are therefore dismissed, with liberty to the petitioner to take recourse to alternative remedies available to her in law.

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• 2025 (1) TMI 1314
  Seeking of grant of regular bail - smuggling - recovery of 99.876 grams of Etizolam salt which is a commercial quantity - offences punishable under Sections 22, 61 85 of the NDPS Act - HELD THAT:- The petitioner was arrested on 15.04.2022 whereinafter investigation was carried out and challan stands presented on 10.10.2022. Charges in the trial in question were framed on 23.11.2022. Total 10 prosecution witnesses have been cited, out of which only 03 have been examined till date. The rival contention of learned counsel for the parties; as to whether the petitioner has been falsely implicated into the FIR in question, whether mandatory provisions of Section 42 and Section 50 of the NDPS Act of 1985 have been complied with or not the weightage/veracity of the evidence brought by the prosecution alongwith challan (final report); are issues of contentious nature which are essentially required to be ratiocinated upon during the course of trial. Long back, in HUSSAINARA KHATOON VERSUS HOME SECRETARY STATE OF BIHAR PATNA [ 1979 (2) TMI 194 - SUPREME COURT ], the Hon ble Supreme Court had declared that the right to speedy trial of offenders facing criminal charges is implicit in the broad sweep and content of Article 21 as interpreted by this Court . The right to a speedy and expeditious trial is not only a vital safeguard to prevent undue and oppressive incarceration; to mitigate anxiety and concern accompanying the accusation as well as to curtail any impairment in the ability of an accused to defend himself, but there is an overarching societal interest paving way for a speedy trial. This right has been repeatedly actuated in the recent past and the ratio decidendi of the above-referred to Supreme Court s judgments have laid down a series of decisions opening up new vistas of fundamental rights - The guarantee of a speedy trial is intended to avoid oppression and prevent delay by imposing on the Court and the prosecution an obligation to proceed with the trial with a reasonable dispatch. The guarantee serves a threefold purpose. The unequivocal inference is that where the trial has failed to conclude within a reasonable time, resulting in prolonged incarceration, it militates against the precious fundamental rights of life and liberty granted under the law and, as such, conditional liberty overriding the statutory embargo created under Section 37 of the NDPS Act, 1985 ought to be considered as per facts of a given case. In other words, grant of bail in a case pertaining to commercial quantity, on the ground of undue delay in trial, cannot be said to be fettered by Section 37 of the NDPS Act, 1985. Reverting to the facts of the case in hand; as per the custody certificate dated 08.01.2025 filed by the learned State counsel in Court today, the petitioner has suffered incarceration for more than 02 years and 08 months. A perusal of the zimni orders dated 27.02.2023, 10.04.2023, 05.02.2024, 02.08.2024, 03.09.2024, 16.10.2024, 19.11.2024 27.11.2024 indicates that the trial is procrastinating, conclusion thereof is not visible in near future and the delay in culmination thereof cannot be attributed to the petitioner. In fact, a perusal of the zimni orders passed by the trial Court indicate that repeatedly summons as also bailable warrants have been issued against the Police officials who have not turned up to have their testimonies recorded as prosecution witnesses. The long inordinate custody of the petitioner as an undertrial, without him being responsible for procrastination of the trial, entitles him to grant of regular bail in the factual matrix of the case in hand. Conclusion - The right to a speedy trial is integral to Article 21, and prolonged pre-trial detention without justifiable cause violates this right. The statutory conditions under Section 37 of the NDPS Act must be balanced against the accused s fundamental rights, especially in cases of undue trial delay. Petitioner is ordered to be released on regular bail on his furnishing bail/surety bonds to the satisfaction of the concerned trial Court/Duty Magistrate and subject to fulfilment of conditions imposed - petition allowed.

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