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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter January 8, 2022 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles TRANSACTIONS OF SALE VOUCHERS – APPLICABILITY OF GST GST @ 12% chargeable on supplying, operating, and maintaining air-conditioned electrically operated buses with ITC News Advisory on Revamped Search HSN Code Functionality Finance Minister Smt. Nirmala Sitharaman chairs review meeting with heads of Public Sector Banks Centre establishes help desks and control rooms to avoid any possible disruptions in Commerce and Industry Department for Promotion of Industry and Internal Trade (DPIIT) to organize Startup India Innovation Week With APEDA assistance, Uttar Pradesh’s Purvanchal region emerges as new hub for India’s Notifications Customs 02/2022 - dated 6-1-2022 - Cus (NT) Supersession Notification No. 98/2021-Customs(N.T.), dated 16th December, 2021 GST - States 32/2021–State Tax - dated 6-1-2022 - Delhi SGST Delhi Goods and Services Tax (Seventh Amendment) Rules, 2021. F. 3(145)/Fin.(Exp-I)/2021-22/DS-I/05 - dated 5-1-2022 - Delhi SGST CORRIGENDUM - Notification No. 75/2019-State Tax, dated 29th December, 2020 AE-I/DT&T/2021-22/23 - dated 4-1-2022 - Delhi SGST Commissioner, State Tax confer powers under section 69, section 70, section 71, section 73 & section 74 of the DGST Act 2017, Jurisdictional Officer AE-I/DT&T/2021-22/22 - dated 4-1-2022 - Delhi SGST Commissioner, State Tax confer powers under section 69, section 70, section 71, section 73 & section 74 of the DGST Act 2017, Jurisdictional Officer AE-I/DT&T/2021-22/21 - dated 4-1-2022 - Delhi SGST Commissioner, State Tax confer powers under section 69, section 70, section 71, section 73 & section 74 of the DGST Act 2017, Jurisdictional Officer 209-FIN-CT1-TAX-0001/2022 - dated 4-1-2022 - Orissa SGST Seeks to supersede F.D. 34479 dated 10.12.2021 bearing S.R.O. No. 480/2021 and to amend Notification No. 19869 dated 29.06.2017 bearing S.R.O. No. 305/2017 205-FIN-CT1-TAX-0001/2022 - dated 4-1-2022 - Orissa SGST Seeks to supersede F.D. 34475 dated 10.12.2021 bearing S.R.O. No. 479/2021 and to amend Notification No. 19829 dated 29.06.2017 18-FIN-CT1-TAX-0001/2020 - dated 1-1-2022 - Orissa SGST Odisha Goods and Services Tax (Amendment) Rules, 2022. 36635-FIN-CT1-TAX-0002/2020 - dated 31-12-2021 - Orissa SGST Seeks to amend F.D. Notification No. 24932 dated 27.07.2018 bearing S.R.O. No. 309/2018 36631-FIN-CT1-TAX-0002/2020 - dated 31-12-2021 - Orissa SGST Amendment in Notification No. 19833-FIN-CT1-TAX-0022/2017, dated the 29th June, 2017 Income Tax 01/2022 - dated 6-1-2022 - IT U/s 10(46) of IT Act 1961 - Central Government notifies ‘Regional Air Connectivity Fund Trust' in respect of the specified income arising to that Trust. Circulars / Instructions / Orders SEBI SEBI/HO/DDHS/DDHS_Div1/P/CIR/2022/0000000006 - dated 7-1-2022 Disclosure obligations of listed entities in relation to Related Party Transactions Highlights / Catch Notes GST Rate of GST - Composition tax payers - manufacturing of sweet and namkins and selling the goods over the counter - Rate of GST applicable for a Composition tax payer who are engaged in the manufacture of sweet and namkins and who is doing only the counter sales, is one percent (0.5% CGST and 0.5%SGST) subjected to the condition mentioned in the Notification No. 8/2017-Central Tax - AAR Visit to Get Source Income Tax Assessment u/s 144B - National assessment scheme - as argued AO proposed to modify the return filed by the petitioner without issuing the mandatory show-cause notice contemplated under Clause 5(xvi)(b) of the Scheme - When the decision making process is contrary to law or is vitiated, jurisdiction under Article 226 of the Constitution of India can be invoked. - Matter restored before AO - AO directed to reconsider the case of the petitioner by issuing the draft assessment order and the necessary show-cause notice as contemplated under the Faceless Assessment Scheme in Ext.P8 and after eliciting the objections/explanations of the assessee - HC Visit to Get Source Disallowance of exemption claimed u/s 54F - nature of the property as residential in nature - It does not make difference whether the property has been shown as residential house on the record of the government authority but actual user thereof by the assessee will be considered while adjudicating upon the eligibility of deduction under sec. 54F Claimed by the assessee. In the present case, for denial of the claimed deduction under sec. 54F AO should not have considered the property as residential on the basis of municipal record ignoring the actual user thereof, as held in the above cited decisions. - AT Visit to Get Source Correct head of income - sale consideration received by the assessee from redemption of preference shares including the premium- capital income or income from other sources - CIT(A) has given a finding that the investment in redemption of preference shares was clearly based on the condition that the assessee was entitled to receive redemption fair market value of shares apart from premium amount and therefore the receipt of premium was part of full value of consideration received on redemption of shares. - the same is to be subject to tax under the head capital gains - AT Visit to Get Source Customs Refund of Terminal Excise Duty - deemed exports - in addition to ab initio exemption, the EOU is additionally eligible to receive entitlements of DTA supplier as specified in Chapter 8 of the FTP subject to complying with necessary requirements and formalities. In other words, EOU is not entitled for refund of TED on its own accord, but can avail of the entitlements of DTA supplier on complying essential procedure. As mentioned earlier, the interest on the refundable amount, if paid in cash ought to be refunded with simple interest at the rate of 6% per annum as provided in para 8.5.1 of the applicable FTP, even in the case of application for refund by EOU. - SC Visit to Get Source Refund of Terminal Excise Duty - deemed exports - The responsibility of refund of TED in reference to applicable FTP would be that of the Authority responsible to implement the FTP under the 1992 Act, which has had consciously accorded such entitlements/benefits for promoting export and earning foreign exchange. Further, the fact that the concerned entity had unsuccessfully applied for refund to the Authorities under the 1944 Act and the rules made thereunder, that would not denude it of its entitlement to get refund of TED under the FTP, as may be applicable being mutually exclusive remedies. It is so because it is well settled that the assessee is free to take benefit of more beneficial regime. - SC Visit to Get Source Foreign Vessel in transit - Confiscation - While the vessel was fishing on the high seas at Yemen, it was abducted by its own crew members and brought it near the territorial waters of India - The impugned order of confiscation reveals that the customs duty and confiscation have been imposed and ordered as per Ext.P1 and Ext.P2 in a mechanical manner, without bearing in mind the fact that it was not the volition of the owner of the vehicle to bring the vessel or the goods into India. To penalise the owner of the vessel, when admittedly he had no knowledge of the alleged ‘bringing into India’ of the vessel or the goods in it, in the context of the factual situation emerging in this case, is, to say the least, too harsh, arbitrary and not contemplated under law. - HC Visit to Get Source Provisional release of goods - Classification of imported goods - Heavy Melting Scrap ISRI Code 200 to 206 - goods were found to be “old and used CRGO (secondary Cold Rolled Grain Oriented) Sheets/old and used “empty gas cylinder” and “Table Tennis Rackets” - prohibited goods or not - When similar import declared as HMS and reclassified and reassessed as CRGO sheets were ordered to be released after mutilation and payment of duty, there are no reason to interfere with the view taken by the Commissioner (Appeals) directing provisional release of the impugned goods. - AT Visit to Get Source Indian Laws Dishonor of Cheque - rebuttal of presumption - The documents produced by the petitioner in his evidence before the trial establishes that he has a business transaction with the complainant and he issued the cheque in favour of the complainant in discharge of his liability. Learned Magistrate while awarding compensation against the drawer of the cheques has not assigned any reason as to why he did not compensate the complainant to the extent of the total cheque amount. - There are no illegality in the judgment - HC Visit to Get Source Dishonor of Cheque - Vicarious liability on the Director of the company - involvement of the director (respondent No. 2) in the affars of the company or not - no material has been placed on record, much less of incontrovertible or unimpeachable nature, to establish that respondent No. 2 was in fact not responsible for the day-to-day affairs of the accused company. Rather, despite the legal notice having been issued to respondent No. 2 as well, no reply was furnished on her behalf to the effect that she was not in-charge of or responsible to the accused company for the conduct of its business at the relevant time. - no ground for quashing of the summoning order - HC Visit to Get Source IBC CIRP - Rejection of claim as secured creditor - Non-registration of charge - There being adjudicatory order of the Debt Recovery Tribunal in favour of the Appellant, the mortgage and hypothecation was created in favour of the Appellant by the Corporate Debtor, hence, non-registration of mortgage and hypothecation under Section 77 of the Companies Act cannot be a ground to held that Appellant was not a ‘secured creditor’ - AT Visit to Get Source Direction to COC to consider ineligibility of 3rd Respondent under Section 29A of I&B Code - as per the Provisions of Law, the COC has power to take a decision with regard to approval of the Resolution Plan. Further in accordance with the Regulations, the Committee has power to evaluate the Resolution Plans received by the Resolution Professional. As per Sub Regulation 4 of Regulation 39, the COC has power to approve the plan and after approving the Plan by the Committee the Resolution Professional shall submit to the Adjudicating Authority. Therefore, this Tribunal is of the view that the COC has power to decide and approve the Resolution Plan of the Resolution Applicants. - AT Visit to Get Source Service Tax Reverse charge mechanism - GTA service - appellant were proprietorship concerns - the demand for the period April, 2016 to June, 2017 is also liable to be set aside. Although the appellant has also raised the issue of threshold exemption under notification no.33/2012-ST dated 20.62012 but as it is already held that since those proprietary concerned have been registered as factories, they are liable to pay service tax under reverse charge mechanism, therefore the issue of threshold exemption, is not decided upon. - AT Visit to Get Source Consideration for the services - Valuation - Mining services - whether entitlement towards “Cost Petroleum” under the “Production Sharing Contract” can be treated as “consideration” for rendering “mining services” to the Government of India? - From the provisions of the Production Sharing Contract it is clear that Cost Petroleum and Profit Petroleum cannot be said to be consideration flowing from the Government of India to the appellant and that the components of “Cost Petroleum” and “Profit Petroleum” are inherent and embedded part of the Production Sharing Contract. - Demand set aside - AT Visit to Get Source Central Excise Area based exemption - appellant paid an amount equal to 6% under rule 6(3) of Cenvat Credit Rules, 2004 - It is found that the adjudicating authority has not touched upon rule 6(3D) of the Cenvat Credit Rules, 2004 while deciding the eligibility of the exemption notification no. 30/2004-CE - matter remanded back - AT Visit to Get Source Clandestine removal - CTD/TMT bars - provisions of Section 9D of the Central Excise Act have not been followed - Although in the instant case, opportunities were granted by the adjudicating authority to the appellant but they chose not to participate in the proceeding - When the legislature has laid down a procedure to be followed then it has to be done in that way only and no shortcut can be adopted. Therefore on this ground alone, without going into the merits of the matter, it is deemed proper to set aside the impugned order and remand the matter back to the adjudicating authority for de novo adjudication after giving an opportunity of hearing to the appellant - AT Visit to Get Source CENVAT Credit - credit taken on bills of entry of imported goods without receipt of the goods - The adjudicating authority has grossly violated the principles of natural justice by not providing the documents as requested by the appellant and also not giving the effective hearing to the appellants - without going into the other details of the adjudication order, it is held that the principles of natural justice which is the foremost requirement for any adjudication, needs to be followed. - AT Visit to Get Source VAT Violation of principles of natural justice - validity of assessment order - at the time when the notice was served on the security guard, the area of the petitioner's office was a containment zone and all staff of the petitioner were working from home - Even to move into the office building of the petitioner, there was a restriction in the form of total lockdown in the State. Hence for reasons beyond the control of the petitioner, there was a failure to grant a reasonable opportunity of being heard, though for no fault of the assessing officer also - Matter restored back - HC Visit to Get Source Case Laws: GST 2022 (1) TMI 249 Change in ownership of firm - request for deletion of names of two of the partners from the registration - case of revenue is that petitioner has failed to respond the order dated 27.03.2020 wherein the order also directed the petitioner to file a reply by 09.04.2020 - HELD THAT:- The petitioner has not replied to the respective notices dated 27.03.2020 and 20.07.2020 and therefore there is no merits in the present writ petition in as much as these communications in Form GST Reg 03 dated 27.03.2020 and 20.07.2020 are merely a proposal setting out the reasons why the request of the petitioner cannot be accepted. It is for the petitioner to respond to the same. This writ petition is disposed by directing the petitioner to file appropriate reply. 2022 (1) TMI 248 Scope of Advance Ruling - tax invoice proposed to be issued by the assesse satisfies section 31 of GST Act and Rule 46 of GST Rules or not - whether total amount (inclusive of GST) shown in the main portion of the bill be interpreted as the taxable value under section 31 of GST Act and Rule 46 of GST Rules? - HELD THAT:- Since the questions on which advance ruling is sought by the applicant is not covered under section 97(2) of CGST Act 2017, the questions cannot be answered. 2022 (1) TMI 247 Rate of GST - Composition tax payers - manufacturing of sweet and namkins and selling the goods over the counter not having any facility of restaurant or hotel or not a part thereof and not giving for human consumption at the place of shop - HELD THAT:- Since the applicant is into manufacture of sweets, he can opt to pay GST at one per cent. of the turnover subjected to the condition mentioned in the Notification No. 8/2017 (Central Tax) dated: 27.06.2017 and further amended notifications. Income Tax 2022 (1) TMI 246 Expenditure allowable as business expenditure u/s 37(1) - expenditure on account of processing fees on a loan taken by the third party - what is the nature of transaction and as to how the CIT(A) held the expenditure to be of revenue in nature? - HELD THAT:- No uncertain terms held that CIT(A) has examined each and every aspect of the case and held in favour of the assessee. But with regard to the issue whether the expenditure is allowable as business expenditure, under Section 37(1) CIT(A) has taken note of the various decisions on the point, namely the positive test and the negative test, which are to be applied, and thereafter proceeded to examine the facts, and held that the case of the assessee is entirely different from that of the case of M/s Ruia Sons P Ltd. In this regard, it is relevant to take note of the finding recorded by the CIT(A). This finding was reexamined by the Tribunal and the Tribunal has on facts concurred with the CIT(A). No substantial questions of law. 2022 (1) TMI 245 Assessment u/s 144B - National assessment scheme - as argued AO proposed to modify the return filed by the petitioner without issuing the mandatory show-cause notice contemplated under Clause 5(xvi)(b) of the Scheme and hence, according to the petitioner, the assessment order itself is bad in law - HELD THAT:- As revealed that the assessing Officer had, after calling for the objections of the assessee, decided to modify the return submitted by the assessee. By virtue of modification contemplated by the National assessment Centre the provisions of Clause 5(xvi)(b) of the Scheme gets automatically attracted thereby entitling the assessee to be served with a notice calling upon him to show-cause, as to why the assessment should not be completed as per the draft assessment order. On a perusal of the assessment order, thus find that, the assessee was never served with a draft assessment order or the show-cause notice while proposing to modify the return submitted by the petitioner. There is a clear violation of the procedure involved in arriving at the assessment order. The respondents failed to serve the show-cause notices or the draft assessment order upon the assessee. When the decision making process is contrary to law or is vitiated, jurisdiction under Article 226 of the Constitution of India can be invoked. Accordingly, as find that there is violation of the procedure while issuing the assessment order Ext.P7. Therefore Ext.P7 is set aside and the 1st respondent- Assessing Officer is directed to reconsider the case of the petitioner by issuing the draft assessment order and the necessary show-cause notice as contemplated under the Faceless Assessment Scheme in Ext.P8 and after eliciting the objections/explanations of the assessee within a reasonable time, pass fresh orders thereon, in accordance with law, in a time bound manner. 2022 (1) TMI 244 Assessment of trust - allowance of carry forward of deficit to the assessee s trust - assessee is a trust registered under section 12A - AO rejected the claim holding that the provision 11 of the Act does not permit the determination of deposit - HELD THAT:- CIT(A) has allowed the deficit to the assessee to be carried forward following the decision of the Hon ble Jurisdictional High Court[ 2013 (3) TMI 654 - BOMBAY HIGH COURT] . He also supported such decision by the decision of Hon ble Supreme Court wherein the Special SLP filed by the Revenue was dismissed. [ 2018 (4) TMI 1622 - SC ORDER] . Also with effect from 1-4-2022 explanation (2) is inserted after explanation 1 u/s 10(23C) of the by the Finance Act, 2021, which provides that Explanation 2.-For the purposes of this clause, it is clarified that the calculation of income required to be applied or accumulated during the previous year shall be made without any set off or deduction or allowance of any excess application of any of the year preceding to the previous year. However Notes on clauses to Finance Bill 2021 says that These amendments will take effect from 1st April, 2022 and will, accordingly, apply in relation to the assessment year 2022-2023 and subsequent assessment years. Therefore it does not apply for the impugned assessment year. No infirmity was pointed out by the learned Departmental Representative in the order of the learned Commissioner of Income Tax (Appeals). - Decided against revenue. 2022 (1) TMI 243 Capital gain - Conversion of capital asset into stock in trade - FMV determination - AO has adopted about ₹ 100/- per sq.ft as fair market value of the property as on date of conversion and such rate was determined on the basis of guideline value of property, when the assessee has subsequently sold plots after conversion of capital asset into stock in trade - HELD THAT:- No doubt, guideline value of property may not be a sound indicator for determining fair market value of the property. It is an admitted fact that there is large difference between guideline value and fair market value of property. Therefore, one cannot go by guideline value of property to determine fair market value of the property, including for the purpose of conversion of capital asset into stock in trade. To this extent reasons given by the Assessing Officer to adopt fair market value of the property at the time of conversion of capital asset into stock in trade at ₹ 100/- cannot be sustained. Similarly, valuation of closing stock by adopting guideline value as on 31.03.2012 also cannot be accepted. However, fact remains that the assessee has also not able to justify adoption of fair market value at ₹ 250/- per sq.ft at the time of conversion of capital asset into stock in trade. Therefore, considering fact that both the parties have failed to justify respective rates adopted for conversion of capital asset into stock in trade, we deem it appropriate to adopt a sum of ₹ 200/- per sq.ft as fair market value of the property as on date of conversion of capital asset into stock in trade to settle dispute between the parties. Hence, we direct the Assessing Officer to adopt a sum of ₹ 200/- per sq.ft. as fair market value of the property and rework gross profit, if any, to be considered for taxation. Appeal filled by assessee is partly allowed. 2022 (1) TMI 242 Disallowance of employees contribution to PF ESI u/s.36(1(va) r.w.s. 2(24)(x) - Scope of amendment - HELD THAT:- We find that amendment brought to the statute by insertion of Explanation 1 to section 36(1(va) by the Finance Act, 2021 w.e.f. 01.04.2021 is considered to be prospective in nature as per the decision of the co-ordinate Bench of ITAT., Chennai [ 2021 (12) TMI 558 - ITAT CHENNAI] , where it was held that insertion of Explanation 1 to said section cannot be considered as retrospective in nature and thus, belated payment of employees contribution to PF ESI after due date specified under respective Act, but before due date for filing of return of income u/s.139(1) of the Act is allowable deduction. We direct the Assessing Officer to delete additions made towards disallowance of employees contribution to PF ESI u/s.36(1(va) r.w.s. 2(24)(x) of the Act for both assessment years. Disallowance of expenses relatable to exempt income u/s.14A r.w. Rule 8D - absence of exempt income - HELD THAT:- Hon'ble Jurisdictional High Court of Madras in the case of M/s. Redington India Ltd. [ 2017 (1) TMI 318 - MADRAS HIGH COURT] had considered identical issue and held that in absence of exempt income, no disallowance can be made towards expenses relatable to said exempt income. In this case, facts borne out from records clearly show that there is no exempt income for both assessment years, and hence, the AO cannot compute disallowance of expenses relatable to said exempt income. Accordingly, we direct the AO to delete additions towards disallowance u/s.14A read with Rule 8D of Income Tax Rules, 1962, for both assessment years. 2022 (1) TMI 241 Interest payable u/s.244A - Refund claim - Date of determination of interest payable - HELD THAT:- As in the present case period involved is only 6 years and 4 months. Further, it is not a case of the assessee that money due to the assessee was determined and retained by the department without any reason. In fact, interest payable to the assessee was itself determined on 15.03.2018. If we consider date of determination of interest payable to the assessee as per provisions of section 244A of the Act, i.e., 15.03.2018, then the arguments of the assessee that there is inordinate delay in payment to the assessee which requires payment of compensation cannot be accepted. As per provisions of section 244A of the Act, the assessee is entitled only interest on income tax refund due to the assessee upto the date of payment of such refund - there is no provision in the Act to pay compensation to the assessee for certain delay in payment of interest, more particularly, such delay is on account of technical reasons. Therefore, we are of the considered view that there is no merit in arguments taken by the assessee in light of decision of the Hon'ble Supreme Court in the case of M/s.Sandvik Asia Ltd. Vs CIT[ 2006 (1) TMI 55 - SUPREME COURT] and also the decision in the case of CIT VS. Narendra Dosh [ 2001 (7) TMI 10 - SUPREME COURT] Hon ble Karnataka High Court in the case of CIT Vs. M/s. Syndicate Bank [ 2020 (10) TMI 522 - KARNATAKA HIGH COURT] has considered identical issue and after considering decision of the Hon'ble Supreme Court in the case of Sandvik Asia Ltd. vs CIT (supra) observed that although, the Hon'ble Supreme Court very clearly held that revenue is liable to pay interest on the amount of interest while deciding issue, but fact remains that in the said case there was inordinate delay of 17 years and under those facts, it was held that the revenue is liable to pay compensation for unlawful retention of money due to the assessee. But, fact remains that as per provisions of section 244A of the Act, interest has to be paid to the assessee and such interest has to be paid in terms of section 244A of the Act only, which prescribes interest upto the date of granting refund to the assessee.Appeal filed by the assessee is dismissed. 2022 (1) TMI 240 Capital gain computation - disallowance of indexed interest cost while computing capital gains - assessee while computing capital gains had reduced the indexed interest cost, being interest cost incurred for acquiring the relevant shares, but the same was denied by the lower authorities - HELD THAT:- We find that identical issue arose in the case of Fritz Desilva [ 2015 (5) TMI 1125 - ITAT MUMBAI] after relying on the decision of Hon ble Madras High Court in the case of Trishul Investments Ltd. [ 2007 (7) TMI 252 - MADRAS HIGH COURT] held that interest paid for acquisition of shares would partake the character of cost of shares and therefore the interest would be considered as cost of acquisition for the purpose of computing of capital gains. We further find that in the case of CIT vs. Maithreyi Pai [ 1983 (11) TMI 43 - KARNATAKA HIGH COURT] has held that the interest paid on borrowings for the acquisition of a capital asset must fall for deduction u/s 48, if the same sum has not been claimed as deduction under any other heads. Submissions of the assessee about the interest paid for acquisition of the shares having not been claimed as deduction in any of the earlier years has been found false or has been controverted by Revenue by bringing any contrary material on record. In such a situation, we relying on the aforesaid decisions, are of the view that the interest payable by the assessee for acquisition of shares should be added to the cost of acquisition and therefore be considered while computing capital gains. We therefore direct the AO to allow the indexed cost on account of interest on shares to compute the deduction under capital gains. Thus the grounds of assessee are allowed. Disallowance u/s 14A - AO noticed that assessee had received dividend which was claimed as exempt u/s 10(34) - HELD THAT:- We find that AO had given detailed reason to discard the assessee s working of disallowance u/s 14A. In such a situation, we are of the view that the requirement of the statue has been satisfied. No infirmity in the action of AO in invoking the provisions of Rule 8D r.w. Section 14A for working the disallowance is concerned. Alternate submissions of the AR in working the disallowance u/s 14A only after considering the investment which have yielded tax free income is concerned, we find force in the submission of Learned AR. We find that in the case of CIT vs. Holcim India Pvt. Ltd.[ 2014 (9) TMI 434 - DELHI HIGH COURT] , CIT vs. Corrtech Engineering Pvt. Ltd. [ 2014 (3) TMI 856 - GUJARAT HIGH COURT] and Shivam Motors (P.) Ltd. [ 2014 (5) TMI 592 - ALLAHABAD HIGH COURT] has held that Section 14A of the Act cannot be involved when no exempt income was earned. Before us, AR has submitted that out of the total investments which the AO has considered for working of disallowance u/s 14A r.w.r 8D, the investments which had yielded dividend were to the extent of ₹ 20,55,16,081/- (as on 31.03.2013) and ₹ 20,98,25,264/- (as on 31.03.2012). The contention of the assessee that it has received dividend only from the aforesaid investments has not been controverted by Revenue. In such a situation, relying on the aforesaid decisions, we are of the view that disallowance u/s 14A needs to be re-worked on the basis of the investments which have yielded tax free income. We therefore direct the AO to work out the disallowance u/s 14A r.w.r 8D on the basis of investments which had yielded dividend. Thus Ground of assessee is partly allowed. 2022 (1) TMI 239 Disallowance u/s 14A r.w.r. 8D - CIT-A deleted the addition - HELD THAT:- We find that Ld.CIT(A has followed the judgements of Hon ble Delhi High Court rendered in the case of CIT vs Holcim India Ltd. [ 2014 (9) TMI 434 - DELHI HIGH COURT] and CIT vs Cheminvest Ltd. [ 2015 (9) TMI 238 - DELHI HIGH COURT] . Revenue has not brought to our notice any other binding precedents by the Hon ble High Court and Hon ble Supreme Court and therefore, we do not see any reason to interfere in the finding of Ld.CIT(A), the same is hereby affirmed. Thus, Ground No.1 raised by the Revenue is dismissed. Addition made u/s 14A r.w.Rule 8D of the Rules while calculating MAT liabilities u/s 115JB - CIT-A deleted the addition - HELD THAT:- CIT(A) has decided the issue by following the judgement of Hon ble Delhi High Court rendered in the case of CIT vs Bhushan Steel Ltd.[ 2015 (9) TMI 1424 - DELHI HIGH COURT] . We do not see any infirmity in the finding of Ld. CIT(A), the same is hereby affirmed. Expenditure related to employees stock option cost - CIT-A deleted the addition - HELD THAT:- Keeping in view clear judicial decisions of higher Courts in the appellant's case only wherein the same issue has been decided in the assessee's favour, the disallowance made by the AO of expenses on account of ESOP is deleted. Disallowance in respect of late deposit of ESI/EPF contribution - HELD THAT:- Issue decided in favour of assessee as relying on PRO INTERACTIVE SERVICE (INDIA) PVT. LTD. [ 2018 (9) TMI 2009 - DELHI HIGH COURT] and AIMIL LIMITED [ 2009 (12) TMI 38 - DELHI HIGH COURT] - Decided against revenue. 2022 (1) TMI 237 Deemed income u/s 44BBB - Income from offshore supplies -- Income attribution - composite contracts - Offshore supply qua PE - amounts received on account of Business whether in or outside India - why the Project Office be not taxed under section 44BBB of the Act and the assessment not be completed by following the assessment orders for earlier assessments years as the facts of the case were identical to that of earlier years? - HELD THAT:- Income from offshore supplies was not liable to tax in India both u/s 44BBB as well as under the provisions of Article 7 r.w. para 6 of DTAA between India Japan. The aforesaid order was followed by the Co-ordinate Bench of Tribunal while deciding the appeal for A.Y. 2007-08 2008-09 [ 2020 (2) TMI 1053 - ITAT DELHI] . Before us, Revenue has not placed any material to demonstrate that the order of Tribunal in assessee s own case for earlier years have been set aside/stayed/overruled by higher judicial forum. Since the facts in the year under consideration are identical to that of earlier years, we for similar reasons hold no reason to interfere with the order of CIT(A) and thus dismiss the ground of Revenue. Dependent Agent Permanent Establishment (DAPE) in India - computation of profits attributable to PE - AO noticed that assessee had received amounts for supply to Teesta Purulia Project but the entire receipts were not offered to tax - non inclusion of the amounts to tax to which it made the submissions - HELD THAT:- The issue in the present ground is with respect to the. AO attributed the profit to PE @ 50% whereas CIT(A) attributed it to 20%. We find that identical issue arose in assessee s own case in A.Y. 2006-07 to 2008-09, 2010-11, 2012-13 2013-14. The relevant findings of the Co-ordinate Bench of Tribunal in assessee s own case for A.Y. 2013-14 [ 2020 (11) TMI 1032 - ITAT DELHI] . Revenue has also not placed any material to demonstrate that the order of the Co-ordinate Bench of Tribunal in assessee s own case for earlier years has been set aside/stayed/overruled by higher judicial forum. In such circumstances, we following the order of the Co-ordinate Bench for earlier years and for similar reasons, find no reason to interfere with the order of CIT(A) and thus the grounds of Revenue is dismissed. Attribution of 20% profits to the assessee - HELD THAT:- The issue in the present ground is with respect to attribution of profits to the assessee. AO had attributed 50% of gross profits to assessee which was reduced to 20% by CIT(A). We find identical issue arose in assessee s own case in A.Y. 2006-07. The Co-ordinate Bench for the detailed reasons stated in the order upheld the order of CIT(A) in holding that no income was liable to be attributable in India even if Mitsui Co. Ltd. constituted DAPE of the assessee in India. The aforesaid order was followed by ITAT while deciding the appeal for A.Y. 2007-08 2008-09[ 2020 (2) TMI 1053 - ITAT DELHI] . Before us, no distinguishing feature in the facts for the year under consideration and that of earlier years has been pointed out by Revenue. 2022 (1) TMI 236 Disallowance of exemption claimed u/s 54F - nature of the property as residential in nature - assessee claims to have converted Shastri Nagar residential property into commercial property under MCD rules, no certificate from MCD is produced establishing property as commercial - HELD THAT:- No dispute on fact that the property E-575A, GK-II, New Delhi owned by the assessee was being used as his office during the relevant period but only dispute between the assessee and Revenue remained about the entitlement of deduction of sec. 54F of the Act on the basis of actual user of the property i.e. office use and not merely on the basis of the municipal showing the property meant for residential use or in the sale deed shown as residential type It does not make difference whether the property has been shown as residential house on the record of the government authority but actual user thereof by the assessee will be considered while adjudicating upon the eligibility of deduction under sec. 54F Claimed by the assessee. In the present case, for denial of the claimed deduction under sec. 54F AO should not have considered the property E-575A, G.K.II, New Delhi as residential on the basis of municipal record ignoring the actual user thereof, as held in the above cited decisions. The authorities below were thus not justified in denying and upholding the denial of the claimed benefit to the assessee by way of deduction under sec. 54F of the Act on the basis that the assessee was owning more than one residential house (i.e. inclusion of E-575A, GK-II, New Delhi) on the date of transfer of the original assets. We thus setting aside the orders of the authorities below in this regard direct the Assessing Officer to allow the claimed deduction under sec. 54F of the Act. See case ofSHRI. NAVIN JOLLY C/O NAVIN ARCHITECT PRIVATE LIMITED VERSUS THE INCOME-TAX OFFICER, WARD 11 (1) [ 2020 (6) TMI 514 - KARNATAKA HIGH COURT] The ground No.1 is accordingly allowed 2022 (1) TMI 235 Penalty u/s.271D - default u/s 269SS - assessee firm received loan in cash from one of its partner and repayment and interest of such loan was made in subsequent year - HELD THAT:- No penalty under section 271D of the Act can be imposed on assessee firm in respect of transaction inter-se between the assessee and its partners for violation of section 269SS of the Act. The submission of ld.AR finds support from the decision in CIT vs. Lokpat Film Exchange [ 2007 (1) TMI 165 - RAJASTHAN HIGH COURT] AND V. SIVA KUMAR [ 2013 (3) TMI 265 - MADRAS HIGH COURT] - Decided against revenue. 2022 (1) TMI 234 Income from other sources - consideration received in excess of consideration recorded in Sale Deed - Admission of additional evidence - HELD THAT:- The dispute in respect of actual sale consideration has not been decided based on evidences filed by assessee. We note that the Ld. CIT(A) rejected additional evidences. It is noted that the Ld. CIT(A) held the sale proceeds received by assessee over and above the sum mentioned in the registered sale deed as Income from other sources. In our view, the Ld. CIT(A) should have admitted the additional evidences and considered the claim in the light of additional evidences filed by assessee. Exemption u/s. 54F with regard to the investment in the residential property - Assessee is entitled to make fresh claim for deduction or relief before the appellate authorities, during the course of the appellate proceedings, irrespective of whether claim not being made before Ld. AO by revising the return of income or during the course of the assessment proceedings. The decision by Hon'ble Supreme Court in Goetze (India) Ltd. [ 2006 (3) TMI 75 - SUPREME COURT does not prohibit such claim before the appellate authorities. We therefore remand both these issues to the Ld. AO to consider it afresh. The Ld. AO shall first decide the actual amount of sale consideration received by assessee based on the agreement entered into by the parties towards sale of property, followed by the claim under section 54F by assessee based on the principles laid down by Hon'ble Supreme Court in case of Comm. of Customs vs. M/s. Dilip Kumar Co. [ 2018 (7) TMI 1826 - SUPREME COURT] - Appeal filed by assessee stands allowed for statistical purposes 2022 (1) TMI 233 Disallowance u/s 14A r.w.r. 8D - mandation of recording satisfaction before proceeding to make disallowance u/s. 14A - Suo moto disallowance made by assessee - HELD THAT:- As decided in own case [ 2019 (10) TMI 776 - ITAT PUNE] considering the manner of computation of disallowance u/s. 14A, the Tribunal held that the AO failed to record the mandatory satisfaction before proceeding to make disallowance u/s. 14A of the Act. That is how, the addition was deleted. The facts of the instant year are mutatis mutandis similar to those of the preceding years. The ld. DR candidly accepted the fact. Respectfully following the precedent, we order to delete the addition. Disallowance u/s. 14A in the computation of book profit u/s. 115JB - HELD THAT:- As in case M/s. Bhushan Steel Limited and others [ 2015 (9) TMI 1424 - DELHI HIGH COURT] holding that no disallowance can be made u/s. 14A in the computation of income u/s. 115JB. We respectfully follow the same and allow the ground of appeal. Disallowance of weighted deduction u/s. 35(2AB) - amount not allowed by the DSIR and held to be ineligible for the weighted deduction u/s. 35(2AB) - HELD THAT:- As decided in own case [ 2019 (10) TMI 776 - ITAT PUNE] observing that the amendment in the relevant rules came into force only from 01-07-2016 which would not apply to mar the claim of the assessee for the weighted deduction. After considering the facts, the Tribunal granted weighted deduction on the amount not allowed by the DSIR. Since the facts and circumstances of the instant ground are similar, respectfully following the precedent, we allow this ground of appeal. Claim of deduction of Education Cess paid for the year - HELD THAT:- This issue is no more res integra in view of the judgment of Hon'ble jurisdictional High Court in Sesa Goa Lt. [ 2020 (3) TMI 347 - BOMBAY HIGH COURT] in which it has been held that Education Cess is not disallowable expenditure u/s. 40(a)(ii) of the Act. Similar view has earlier been taken by the Hon'ble Rajasthan High Court in Chambal Fertilisers and Chemicals Ltd. and Another [ 2018 (10) TMI 589 - RAJASTHAN HIGH COURT] - We, ergo, direct to allow deduction for such an amount after verification. 2022 (1) TMI 232 Validity of reopening of assessment u/s 147 - Maintanability of appeal - CIT-A Invoking the provisions of section 249(4)(b) holding that the appeal of the assessee is not maintainable because assessee had not filed his original return of income u/s. 139(1) 139(4) or under the requisitions of the AO in compliance of notice u/s. 148 or 142(1) - HELD THAT:- Nowhere the AO has held that the assessee has not filed any return of income originally or in pursuance of section 148. Secondly, in the statement of facts in Form 35, the assessee has clearly submitted that it has filed return of income. If the ld. CIT(A) has any doubt at least he should have clarified it from the assessee by giving a specific notice of query. Now, before us, ld. counsel has produced photocopy of income-tax return filed originally on 04.12.2009 for the impugned assessment year and also gave the details of taxes paid on the returned income. Thus, the findings of the ld. CIT(A) holding the appeal not admissible u/s. 249(4)(b), is found to be incorrect. Accordingly, since ld. CIT(A) has not decided the appeal on merits, therefore, we remand back all the issues and grounds raised before us before the ld. CIT(A) to be decided on merits in accordance with law after giving due and effective opportunity of being heard to the assessee. Appeal filed by the assessee is allowed for statistical purposes. 2022 (1) TMI 231 Penalty u/s 271(1)(c) - defective notice u/s 274 - non striking off inappropriate words - Addition on account of unexplained investment and undeclared interest income - HELD THAT:- A perusal of the notice issued u/s.274 r.w.s. 271 issued by the AO shows that the inappropriate words in the said notice have not been struck off. As in the case of PCIT vs Sahara India Life Insurance Company Ltd. [ 2019 (8) TMI 409 - DELHI HIGH COURT] held that the notice issued by the Assessing Officer is bad in law since it did not specify under which limb of section 271(1)(c) penalty proceedings have been initiated i.e. whether for concealment of income or for furnishing of inaccurate particular of income. Since, the AO in the instant case has not struck off the inappropriate words in the notice issued u/s. 274 r.w.s. 271 of the Act dated 29th December, 2016 and the notice does not indicate the proper charge, i.e., under which limb of section 271(1)(c) of the I.T. Act the penalty proceedings have been initiated, therefore we delete penalty levied - Decided in favour of assessee. 2022 (1) TMI 230 Revision u/s 263 by CIT - deduction u/s 80P - amount as received from the Mysore and Chamarajanagar District Co-operative Bank Ltd which is a co-operative bank and not a co-operative society - CIT held that the assessment order passed by the AO is erroneous and prejudicial to the interest of the revenue and accordingly, directed the A.O. to revise the assessment order - HELD THAT:- An identical issue was considered in the case of M/s.Prathamika Krushi Pattina Sahakari Niyamita [ 2022 (1) TMI 153 - ITAT BANGALORE] wherein the Tribunal directed the A.O. to consider the issue afresh in the light of the dictum laid down by the Hon ble Apex Court in the case of Mavilayi Service Co-operative Bank Ltd. Ors. V. CIT Anr. [ 2021 (1) TMI 488 - SUPREME COURT] . Since the facts considered by the Tribunal in the case of Prathamika Krushi Pattina Sahakari Niyamata v. Pr.CIT (supra) are identical to the facts of the case under consideration, respectfully following the same, we direct the A.O. to consider the issue afresh, based on the above order of the Tribunal. Appeals filed by the assessee are allowed for statistical purposes. 2022 (1) TMI 229 Disallowance on account of late payments towards EPF and ESI u/s 36(1)(va) - payment before furnishing the return of income under section 139(1) - HELD THAT:- Since the facts involved in the present case are identical to the facts involved in the case of Mohangarh Engineers and Construction Company Vs. DCIT [ 2021 (8) TMI 563 - ITAT JODHPUR ] and in the case of Bikaner Ceramics Private Limited, Bikaner Vs. ADIT, CPC, Bangaluru [ 2021 (9) TMI 1319 - ITAT JODHPUR ] So respectfully following the aforesaid referred to order, the disallowances sustained by the Ld. CIT(A) are deleted. - Decided in favour of assessee. 2022 (1) TMI 228 Assessment u/s 153A - Bogus purchases - whether statement recorded during search to be treated as incriminating material ? - HELD THAT:- Undisputed facts are that on the date of search the assessment for the current assessment year was not pending and therefore it has attained finality and thus it was unabated on the date of search. It was also undisputed that except the statement recorded u/s 132(4) of the Act of director of Karma Ispat Ltd as well as Director of Man Group of Industries there was no incriminating materials which was seized during search to back the additions. Therefore the AO has no jurisdiction to make addition in an unabated assessment year without there being incriminating materials and accordingly the jurisdiction of the AO can not be justified. Further we find merit in the contentions of the ld A.R. that statement recorded during search do not constitute incriminating material as the same can not be said to be found during the course of search but is recorded to elicit more information/explanation of the searched person on the incriminating documents/gold/jewellery found during search. Therefore after perusing the material on record and considering rival contentions and also the decisions cited before us, we are of the considered view that a statement recorded during the course of search can not be considered an incriminating material in order to make addition in an unabated assessment year. Therefore, this is an undisputed position of law that in case of unabated assessment year, no addition can be made in absence of any incriminating material found during the course of search. - Decided in favour of assessee. Profit estimation on On-money - CIT(A) partly upholding the order of AO on the issue of on-money by directing to apply 25% as against the 100% added by the AO - HELD THAT:- In view of the profit margin of the assessee from the real estate business, it would meet the ends of justice if a rate of 12.50% is applied on the on money. Accordingly the order of the ld CIT(A) is modified and AO is directed to apply profit rate of 12.50% on the on money. Consequently the ground no 1 in the assessee cross objection is partly allowed. MAT computation u/s 115JB - addition as made by the AO book profits u/s 115JB on account of on money - whether AO has jurisdiction to change the book profits when the books are prepared in accordance with the requirements of Part II and III of Schedule VI of the Companies Act and certified by the statutory auditors with no adverse reporting on any issue? - HELD THAT:- Hon ble Apex Court in the case of Appollo Tyres Ltd [ 2002 (5) TMI 5 - SUPREME COURT] wherein it has been held that AO while assessing a company for income-tax under section 115J of the Income-tax Act can not question the correctness of the profit and loss account prepared by the assessee-company which are certified by the statutory auditors of the company as having been prepared in accordance with the requirements of Parts II and III of Schedule VI to the Companies Act. Similarly in the case of Malayala Manorama Co. Ltd. Versus CIT, Trivandrum [ 2008 (4) TMI 20 - SUPREME COURT] has held that in respect of a company consistently charging depreciation in its books of account at the rates prescribed in the Income-tax Rules, the Income Tax Officer has no jurisdiction under section 115J of the Income Tax Act, 1961 to rework net profits by substituting the rates prescribed in Schedule XIV of the Companies Act, 1956 and no addition should be made to book profits u/s 115JB of the Act. It is not out of place to submit that the coordinate bench in the case of Rishiroop Rubber International Ltd [ 2013 (3) TMI 120 - ITAT MUMBAI] has allowed the A.O. to rewrite the book profit under section 115JB of the Act in following two cases namely i) if it is discovered that profit Loss account is not drawn up in accordance with Part II and Part III of Schedule IV to the companies Act, however, the Assessing Officer cannot disturb the Net Profit as shown by the assessee where there are no such allegation, fraud, misrepresentation but only a difference of opinion as to whether particulars amount should be property shown in the profit and loss account or in the Balance sheet, ii) if accounting policies, accounting standards not adopted for preparing such accounts and method, rate of depreciation which have been incorrectly adopted for preparation of profit and loss account laid before the Annual General meeting. In our considered view none of the aforesaid conditions laid down by the tribunal gets fulfilled in the case of the assessee. Therefore we are inclined to uphold the order of ld CIT(A) by dismissing the appeal of the revenue. Addition on protective basis - As argued substantive addition has not yet been confirmed and accepted by the assessee and there is possibility of revenue loss in case substantive addition is deleted by higher authorities - CIT-A deleted the addition - HELD THAT:- As perusing the material on records in the appellate order including the charts of on money calculation filed by the assesse, calculated by the AO and reworking thereof by ld CIT(A), we note that the substantive addition has been confirmed @ 12.50% of the on money in the hand Man Global Ltd in AY 2015-16 and thus the protective addition was rightly deleted by the ld CIT(A). We further note that in on money as reworked by ld CIT(A) has been accepted both by the assesse as well as revenue and we have directed the AO to assess the on money @ 12.50%. Therefore we are inclined to uphold the order of ld. CIT(A) by dismissing the appeal of the revenue. Disallowance u/s 14A - Sufficiency of own interest free funds - HELD THAT:- We find that the assessee s own interest free funds are far more than the investments in shares and mutual funds and therefore the presumption is that the assessee has made investments out of own funds and not interest bearing funds. The case of the assessee is squarely covered by the decision of jurisdictional High court in the case of CIT v. Reliance Utilities and Power Ltd [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] and HDFC Bank Ltd Vs. DCIT [ 2016 (3) TMI 755 - BOMBAY HIGH COURT] wherein it has been held that where the assessee own funds are more than the investments made in securities yielding exempt income, then the presumption has to be made that assessee has invested in the said securities out of own funds. Therefore the order of ld CIT(A) is set aside on this issue and AO is directed to delete the disallowance. We would like to make it clear that this is ground raised before us and therefore we are allowing relief to the assessee over and above that. Ground no. 3 is allowed. Addition u/s on account of on money - HELD THAT:- We find that that the on money recalculated by the ld CIT(A) was accepted by the assessee as well as by the revenue. As per the said working the ld CIT(A) recorded a finding of fact that the said amount has been taxed in the hands of group entity M/S Man global Ltd and any further addition will result in double addition resulting into double taxation which is not permitted under the Act. We have also perused the records before us along with the working of on money done by the ld CIT(A) and do not find any infirmity in the appellate order. We are therefore upholding the order of ld CIT(A) by dismissing the ground no 1 raised by the revenue. Addition on account of commission paid - HELD THAT:- Company Law board had specifically held that the Assessee is not involved into any siphoning off the funds and all payment including payments towards the commission alleged by the brother of the Chairman of the assessee company Mr. J. C. Mansukhani was spent for the benefit of the assessee and its business affair. Hence there is no scope to doubt the commission payment on the basis of letter of M/s Kala Gas Company already dealt by CLB in petition of Mr J.C. Mansukhani. As in the year under consideration, the commission was paid for exports made to M/S Abu Dhabi Gas Industries Ltd. and not to Kala Gas Co, however, the A.O. without applying the mind has only referred the letter from Kala Gas Co. without appreciating fact that in AY 2013- 14 there is no sale to Kala Gas Co. The AO on the basis of addition made in AY 2009-10 on alleged letter of Kala Gas Co. also made disallowance in AY 2013-14 without appreciating the facts correctly that there is no export to Kala Gas Co. We note that similar payment of commission has been allowed by the revenue in the earlier years and therefore even on the principal of Consistency, impugned addition on account of Export Commission can not be sustained. - Decided against revenue. Addition on account of Service charges paid - Allowable revenue expenses or not? - HELD THAT:- The expression commercial expediency is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The case of the assessee finds support from the decision of Hon ble Apex Court in the case of S.A. Builders Ltd. v. Commissioner of Income-tax (Appeals), Chandigarh [ 2006 (12) TMI 82 - SUPREME COURT] wherein the Hon ble court has held that the AO can not decide what is right for the business and decide what are the expenses to be incurred for the business. We note that ld CIT(A) has dealt with the issue regarding the allowability of service charge in para no. 11 of the appellate order. Considering the provisions of section 37 of the Act and decision of Supreme Court in case of S.A. Builders Ltd and reasoned order of CIT(A) we are inclined to uphold the order of CIT(A) on the issue of service charges by dismissing the ground no.4 of the revenue s appeal. Withholding of tax - CIT(A) allowed the appeal of the assessee by observing that the AO has not disputed the fact that the withholding tax is paid actually paid by the Assessee - HELD THAT:- We note that the assessee has redeemed FCCB and paid total premium by grossing up the amount by withholding tax. In other words the TDS deducted and deposited by the assesse on behalf bondholders was treated as part of that. Besides we note that claim was in accordance with section 195A of the Income Tax Act, 1961 as the Company paid withholding tax by the grossing up the amount of premium and paid premium on redemption of FCCB to bondholder - We note that the case of the assessee is squarely covered by the decisions Commissioner of Income Tax V. Standard Polygraph Machines (P) Ltd. [ 1998 (11) TMI 49 - MADRAS HIGH COURT] and ACIT 2(1) V. M/s. BOB Card Ltd.[ 2013 (5) TMI 532 - ITAT MUMBAI] wherein the issue has been decided in favour of the assessee. G.P. addition on Bogus purchase - addition based on statements recorded on oath during the survey - HELD THAT:- We find merit in the arguments of the ld AR that statements recorded on oath during the survey cannot be the sole basis for taking adverse view against the assessee and has no evidentiary value as held by the Hon ble Apex Court in the case CIT vs Khader Khan Son [ 2013 (6) TMI 305 - SC ORDER] - Similarly the statement made u/s 132(4) also has no evidentiary value unless some materials is there on the record to corroborate the same - Decided in favour of assessee. Non genuine purchases - Estimation of income - HELD THAT:- The only possibility is that though the purchases are held to be bogus but certainly the purchases were made from some other source in the grey market. Such purchases can not be ruled out as the materials were used in the manufacturing process, the inspection report whereof was on the records and stock register showing monthwise receipt and consumption of materials. So under these circumstances it is settled position now that entire alleged bogus purchases can not added to the income of the assessee as it would affect the profits of the assessee unrealistically and unreasonably. Therefore under such circumstances only profit margin on those bogus purchases can at the most be added. Accordingly we set aside the order of ld CIT(A) on this issue and direct the AO to apply a profit rate of 5% on the bogus purchases. 2022 (1) TMI 227 Intimation u/s. 143(1) - Rectification of mistake u/s 154 - period of limitation - intimation set off of brought forward losses were not allowed because of which assessee was asked to pay the demand - HELD THAT:- Intimation u/s. 143(1) should be communicated to the assessee, if there is an adjustment made in the return resulting either in demand or reducing in refund. The un-communication orders/intimations cannot be enforced and are not valid. The onus to show that the order was communicated and served on the assessee is on the revenue and not upon the assessee. Here in the case of the assessee the lower authority has not demonstrated from any material that the intimation u/s. 143(1) for the assessment year 2006-07 was served within the four years of passing the intimation. It is mentioned in the finding of the Hon ble High Court 2013 (3) TMI 316 - DELHI HIGH COURT] that while deciding application u/s. 154, the Assessing Officer is required to know and follow the aforesaid principle laid down in the finding of the Hon ble High Court. Since the Assessing Officer has not communicated the intimation u/s. 143(1) to the assessee as elaborated supra, therefore, in the light of the finding of the Hon ble High Court as supra, we direct to consider the case of the assessee on merit after examination of the claim of the assessee. In the result, this ground of appeal of the assessee is allowed for statistical purposes. 2022 (1) TMI 226 Disallowance u/s 14A r.w.r.8D - expenditure incurred by the assessee in relation to the tax exempt income - HELD THAT:- We find that in the case of Joint Investments Pvt. Ltd. [ 2015 (3) TMI 155 - DELHI HIGH COURT] has held that Section 14A r.w. Rule 8D of the IT Rules 1962 cannot be interpreted so as to mean that the entire tax exempt income is to be disallowed. It is further held that the window for disallowance is indicated in Section 14A, and was only to the extent of disallowing expenditure incurred by the assessee in relation to the tax exempt income . The portion of the tax exempt income cannot swallow the entire amount considering the facts of the present case in line with the aforesaid decision of Hon ble Delhi High Court. No interference with the order of CIT(A) is called on this aspect. Disallowance of indirect expenses - CIT(A) after considering the details of the expense has come to a finding that the entire operating expenses shown by the assessee cannot be considered to have been incurred for earning exempt income as there were certain expenses in the nature of rent or its remuneration etc which was assessee was required to incur whether it had earned any income from dividend or not. Before us, no fallacy has been pointed out by the Learned DR in the aforesaid findings of CIT(A). In such a situation, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed. Correct head of income - sale consideration received by the assessee from redemption of preference shares including the premium- capital income or income from other sources - CIT-A deleted the addition - HELD THAT:- CIT(A) has given a finding that the investment in redemption of preference shares was clearly based on the condition that the assessee was entitled to receive redemption fair market value of shares apart from premium amount and therefore the receipt of premium was part of full value of consideration received on redemption of shares. Before us, no fallacy in the findings of CIT(A) has been pointed by the Revenue. We further find that Hon ble Apex Court in the case of Anarkali Sarabhai [ 1997 (1) TMI 5 - SUPREME COURT] after considering and distinguishing the decision of Vania Silk Millls Ltd . [ 1991 (8) TMI 2 - SUPREME COURT] which has been relied upon by the AO, has held that redemption of preference shares is a sale and is also a transfer by relinquishment of asset by shareholder and accordingly the same is to be subject to tax under the head capital gains. Before us, no contrary binding decision has been placed by the Revenue to support its case. We therefore find no reason to interfere with the order of CIT(A). Thus the ground of Revenue is dismissed. Customs 2022 (1) TMI 225 Refund of Terminal Excise Duty - deemed exports - It had been asserted that TED was paid by the DTA Unit from where the goods in question were procured or supplied to the appellant for its EOU during the relevant period - whether the entities herein are entitled to refund of amount purportedly towards TED in respect of specified goods procured or supplied, as the case may be, being deemed exports and from which authority, either under applicable Foreign Trade Policy (FTP) or the 1944 Act? - Circular No.16 (RE 2012/2009 14) dated 15.03.2013 - whether the circular is merely clarificatory regarding TED refund and exemption and the efficacy thereof or not? HELD THAT:- Going by the scheme of FTP applicable at the relevant period, it is crystal clear that EOUs were entitled to ab initio exemption from payment of Central Excise duty on goods procured from DTA on goods manufactured in India, as the import of such goods was to be made without payment of duty. No more and no less. That, however, did not preclude the EOU from availing of the entitlement of DTA supplier under Chapter 8 upon obtaining a suitable disclaimer from DTA supplier - Upon conjoint reading of the relevant para and its clauses, it leaves no manner of doubt that the intent of the subject FTP was to encourage DTA suppliers by providing refund of TED in terms of para 8.3(c), subject to fulfilment of formalities and stipulations in Chapter 8 of FTP. This was also to generate foreign exchange as a consequence of goods supplied as inputs or otherwise, were finally exported by the EOU. The EOU, on the other hand, could only avail of the entitlement of the DTA supplier if the DTA supplier had not taken rebate or CENVAT credit facility (as per para 8.5) treating it as deemed export. This dispensation was uniformly followed until the issue of policy circular dated 15.3.2013. EOU is entitled only for ab initio exemption from payment of central excise duty in terms of para 6.11(c)(ii) of the FTP; and obliged to import the goods from DTA supplier without payment of duty in terms of para 6.2(b) of the FTP. The arrangement provided in para 6.11(a) is, however, in the nature of benefit given to EOU in the event it had paid the amount towards TED in relation to goods procured by it to DTA supplier. In that case, EOU will be eligible only for obtaining entitlements of DTA supplier as specified in Chapter 8 of the FTP upon obtaining a suitable disclaimer from DTA supplier - EOU is not entitled for refund of TED on its own accord, but can avail of the entitlements of DTA supplier on complying essential procedure. As mentioned earlier, the interest on the refundable amount, if paid in cash ought to be refunded with simple interest at the rate of 6% per annum as provided in para 8.5.1 of the applicable FTP, even in the case of application for refund by EOU. As regards DTA supplier of goods to EOU, it is entitled to receive the refund of TED in terms of para 8.3(c) read with paras 8.4.2 and 8.5 of the applicable FTP subject to complying necessary formalities and stipulations provided therein, being a case of deemed exports. Even, in the case of DTA supplier of goods to EOU, if TED has been paid by utilizing CENVAT credit, the refund would be in the form of reversal of commensurate amount in its CENVAT credit account. And if the amount towards TED has been paid in cash by the DTA supplier to the Authorities under the 1944 Act, the refund of TED amount would be made by the Authority implementing the applicable FTP in cash with simple interest at the rate of 6% per annum for the delay in refund of TED. The responsibility of refund of TED in reference to applicable FTP would be that of the Authority responsible to implement the FTP under the 1992 Act, which has had consciously accorded such entitlements/benefits for promoting export and earning foreign exchange. Further, the fact that the concerned entity had unsuccessfully applied for refund to the Authorities under the 1944 Act and the rules made thereunder, that would not denude it of its entitlement to get refund of TED under the FTP, as may be applicable being mutually exclusive remedies. It is so because it is well settled that the assessee is free to take benefit of more beneficial regime. Appeal allowed in part. 2022 (1) TMI 224 Condonation of delay of 358 days in filing the Civil Appeal - HELD THAT:- The delay has not been satisfactorily explained. The Civil Appeal is accordingly dismissed on the ground of delay. 2022 (1) TMI 223 Foreign Vessel in transit - Confiscation - While the vessel was fishing on the high seas at Yemen, it was abducted by its own crew members and brought it near the territorial waters of India - according to the petitioner, penalising the petitioner for criminal acts done without his knowledge after abducting his vessel is highly arbitrary and unjust - HELD THAT:- The abduction and bringing into India of a foreign vessel by its crew illegally, without the knowledge of its owner, cannot amount to import or be liable to customs duty as contemplated under the Act, unless the same is used for consumption in India. If the vessel and the goods that came with it are intended by the owner to be taken back to the flag State of the vessel, the bringing into the country can only be regarded as in the course of transit if it is mentioned in the import manifest or report. In the light of the submission made on behalf of the petitioner that the vessel or the goods would not be used in India and on an appreciation of the proved facts, as evident from the impugned order, even in the absence of the import manifest, the conveyance and the goods in the said conveyance could at the most be regarded as in transit and not liable to be imposed with customs duty or subjected to confiscation. The impugned order of confiscation reveals that the customs duty and confiscation have been imposed and ordered as per Ext.P1 and Ext.P2 in a mechanical manner, without bearing in mind the fact that it was not the volition of the owner of the vehicle to bring the vessel or the goods into India. To penalise the owner of the vessel, when admittedly he had no knowledge of the alleged bringing into India of the vessel or the goods in it, in the context of the factual situation emerging in this case, is, to say the least, too harsh, arbitrary and not contemplated under law. The order of confiscation issued as per Ext.P1 shall stand set aside - while setting aside Ext.P1 and Ext.P2 orders, the respondents are directed to handover custody of the vessel and the goods in it, to the petitioner forthwith, without imposing any charges and in as is where is condition - Petition allowed. 2022 (1) TMI 222 Seeking waiver of demurrage/storage and other charges - Regulation 6(l) of the Handling of Cargo in Customs Areas Regulations, 2009 - HELD THAT:- The petitioner cannot be mulcted with any liability for payment of demurrage/storage charges. The liability for demurrage or storage has not occasioned due to any default of the petitioner but solely due to a wrong order of confiscation. Therefore, the respondent ought to be granting the benefit of waiver of demurrage, storage and other charges. Already a period of almost three months have elapsed since the order of CESTAT. The 1st respondent ought to have issued the certificate as contemplated in Regulation 6(l) without delay. The 1st respondent is directed to consider the case of the petitioner for issue of a certificate under Section 6(l) of the Regulations - Petition disposed off. 2022 (1) TMI 221 Levy of penalty on Customs broker - violation of Regulations 10(q) and 13(12) of Customs Brokers Licensing Regulations, 2018 - opportunity of cross-examination not provided - principles of natural justice - HELD THAT:- The Inquiry Officer, in his Inquiry Report dated 14.10.2020, has extracted the Show Cause Notice to a large extent and the appellant s reply. What is missing is the requirement under Regulation 17(3) whereby the Inquiry Officer was expected, in the course of inquiry, inter alia, to take such oral evidence as may be relevant. This is because, as contended by the Learned Advocate for the appellant, no opportunity of being heard was ever extended to the appellant by the Inquiry Officer. Further, Regulation 17(4) gives the right of cross-examination to the Customs Broker, but however, in the absence of any notice of hearing, even the appellant stands deprived of the above opportunity - the Inquiry Report has been submitted as an empty formality. Moreover, it appears that the Inquiry Report has not been submitted as mandated under Regulation 17(5). With regard to the specific contravention of Regulation 10(q) ibid., the appellant has given a plausible reply, which is taken note of in the Inquiry Report, but however, the Assistant Commissioner has not denied the bona fides of the appellant. Appeal allowed - decided in favor of appellant. 2022 (1) TMI 220 Provisional release of goods - Classification of imported goods - Heavy Melting Scrap ISRI Code 200 to 206 - goods were found to be old and used CRGO (secondary Cold Rolled Grain Oriented) Sheets/old and used empty gas cylinder and Table Tennis Rackets - prohibited goods or not - seeking provisional release of goods - HELD THAT:- According to the importer, the goods imported are Heavy Melting Scrap ISRI Code 200-206. The Pre Inspection Certificate issued by the agency Wize Services FZE‟ has certified the goods to be Heavy Melting Scrap. The Ld. Counsel has furnished photographs of these goods held by department to be CRGO Sheets.He submits that these are end cuttings and used pieced of metals having homogenous holes in all the pieces. There is no expert opinion placed - it is not considered proper to enter into any discussion as to the nature or the classification as these issues are under investigation and yet to be adjudicated. The Commissioner (Appeals) has thus directed to subject the impugned goods to mutilation before release of the same. When similar import declared as HMS and reclassified and reassessed as CRGO sheets were ordered to be released after mutilation and payment of duty, there are no reason to interfere with the view taken by the Commissioner (Appeals) directing provisional release of the impugned goods. Import of goods in the nature of old and used gas cylinders - main objection raised by Revenue is that the Gas Cylinder Rules prohibit import of gas cylinders which are filled or intended to be filled with any compressed gas - HELD THAT:- The Commissioner (Appeals) has ordered for mutilation of these goods so as to render them as scrap. On such score, the contention raised by the Revenue adverting to Gas Cylinder Rules and Explosives Act is without any basis - the view taken by the Commissioner (Appeals) to allow provisional release of the goods is legal and proper. Legality and propriety of the conditions imposed in the impugned order for provisional release of the goods - HELD THAT:- The reliance placed by the Commissioner (Appeals) to impose the condition to furnish BG is highly misplaced and misconstrued. In both these decisions, the Hon ble Courts have directed to pay 20/30 percent of the differential duty. In the present case, the importer having paid duty on the declared value and having accepted to pay the entire differential duty, in the interest of justice, the condition to furnish Bank Guarantee equivalent to 30% of value of the goods requires to be waived. The impugned order is modified to the limited extent of setting aside the direction to furnish Bank Guarantee of 30% equivalent to the value of the goods - Appeal allowed in part. Corporate Laws 2022 (1) TMI 219 Sanction of Scheme of Arrangement (Demerger) - section 230-232 of Companies Act, 2013, and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed. 2022 (1) TMI 218 Sanction of Scheme of Arrangement - section 230-232 of Companies Act, 2013, and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed. Insolvency & Bankruptcy 2022 (1) TMI 217 Approval of Resolution Plan - Appeal filed within time or not - submission of the Appellant is that the Appellant was provided free of cost copy of the order only on 05.02.2021 hence period of limitation shall start running only from 05.02.2021 - Section 61 of the Insolvency and Bankruptcy Code, 2016 - Whether limitation for filing the Appeal for the Appellant against the order dated 11.11.2019 passed by the Adjudicating Authority shall commence only w.e.f. 05.02.2021 when he has been provided with certified copy of the judgment (free of cost)? - HELD THAT:- When the Appellant himself stated before the Bombay High Court that they intend to challenge the order dated 11.11.2019 there was no occasion for him to wait till 05.02.2021 for obtaining a certified free of cost copy and file an Appeal. He has disclosed their intention to file an Appeal on 03.12.2019. He cannot be allowed to contend that since he received certified copy (free of cost) on 05.02.2021, his Appeal is within time. Whether the Appellant is entitled for the benefit of judgment of the Hon ble Supreme Court in Suo Moto Writ Petition No. 3 of 2020 [ 2020 (5) TMI 418 - SC ORDER ] ? - HELD THAT:- The present is a case where order was passed on 11.11.2019 and 30 days period expired on 10.12.2019. The order of Suo Motu Writ Petition was relied. The Hon ble Supreme Court in the aforesaid order directed for extension of limitation from 15.03.2020 due to the COVID-19 Pandemic. The limitation for filing the Appeal of the Appellant long expired much before 15.03.2020, hence, the benefit of order of the Hon ble Supreme Court dated 23.03.2020 in Suo Motu Writ Petition cannot be availed by the Appellant. Whether on account of Appellant prosecuting its claim which Writ Petition is still pending, the Appellant is entitled for the benefit of Section 14(2) of the Limitation Act, 1963 for presenting the present Appeal? - HELD THAT:- The benefit of Section 14(2) can be claimed of the period during which bonafide proceeding is prosecuted in a Court which due to defect of jurisdiction or other cause of a like nature, is unable to entertain it. The present is not a case where Bombay High Court was unable to entertain the Writ Petition which was filed and pending in the Bombay High Court. Writ Petition was filed under Article 226 of the Constitution of Indian and it cannot be accepted that High Court has no jurisdiction to entertain the Writ Petition. Thus, the benefit of Section 14(2) as claimed by the Appellant cannot be extended in the present case. This Appeal is clearly barred by time and no case has been made out to claim benefit of Sections 5 and 14(2) of the Limitation Act to the Appellant - Appeal dismissed. 2022 (1) TMI 216 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The Respondent No. 1 has not been able to prove the existence of the purported loan. Consequently Respondent No. 1 has not been able to establish that he is a Financial Creditor, who is entitled to file application under 7 of IBC. Furthermore, the date of default, which is taken as 31.7.2015 means that section 7 application should have been filed within three years i.e. by 30.7.2018. The section 7 application in this case was filed on 14.9.2018. Hence, even if it is assumed that the transaction between the Corporate Debtor and Respondent No. 1 resulting in financial debt, the section 7 application was not filed within the period of limitation. The Respondent No. 1 has not been able to prove the existence of the purported loan - Respondent No. 1 has not been able to establish that he is a Financial Creditor, who is entitled to file application under 7 of IBC. Furthermore, the date of default, which is taken as 31.7.2015 means that section 7 application should have been filed within three years i.e. by 30.7.2018. The section 7 application in this case was filed on 14.9.2018. Hence, even it is assumed the transaction between the Corporate Debtor and Respondent No. 1 resulting in financial debt, the section 7 application was not filed within the period of limitation. Respondent No. 1 was not able to prove that the loan provided by him to the Corporate Debtor is a financial debt which is due and payable - appeal allowed - decided in favor of appellant. 2022 (1) TMI 215 Liquidation proceedings - possession of vehicles - It is the Appellant s case that since he had settled the loans in respect of two vehicles and the ownership was transferred in his name, he is not liable to hand over the vehicles to the Resolution Professional as they were no longer assets of the Corporate Debtor - HELD THAT:- The Appellant has tried to explain the delay in filing the appeal by claiming that he first filed an application before the Adjudicating Authority for review of the order dated 26.9.2019. This review application was disposed off vide order dated 4.11.2020, inter alia, holding that the review application was misconceived since there was no provision in IBC for review of an order of Adjudicating Authority - the order dated 4.11.2020 is not a substantive order, but only an order seeking help of police authorities for locating the vehicles. The substantive order dated 26.9.2019 has assumed finality, as has been noted by us earlier. The contention of the Appellant that he filed a review application under rule 11 read with Section 154 of NCLAT Rules and hence he waited for an order on this application before filing the appeal is not tenable. It is amply clear that there is no provision of review under the IBC and hence a misconceived review application cannot provide relaxation in limitation to the Appellant. It is clear that the Appellant Niraj Jha had knowledge of the order dated 26.09.2019. His claim that he could appeal against the said order only after receipt of its copy on 12.02.2021 does not appear convincing - This appeal was actually filed on 01.02.2021 which is much after the expiry of the extended period of limitation. Moreover, the Appellant has not explained in any cogent manner the delay of over 40 days in filing this appeal. Hence, even after adopting liberal approach in calculating limitation, we do not find the appeal to be filed within limitation period. Since the appeal is found to be barred by limitation, it is not considered necessary to go into other issues raised by the Appellant relating to transfer of ownership of the said vehicles - appeal dismissed. 2022 (1) TMI 214 CIRP - Rejection of claim as secured creditor - Non-registration of charge - security interest - failure to to furnish any document pertaining to ROC charge/ registration certificate in support of its security interest as required by Section 77 of Companies Act, 2013 - HELD THAT:- The Application filed by the Appellant under Section 60 sub-section (5) was fully entertainable and it could not have been rejected on the ground that it has not been filed within 14 days as provided under Section 42. Section 42 was clearly inapplicable, since no Appeal was filed by the Appellant. The Adjudicating Authority thus, committed error in rejecting the Application as barred by time. Non-registration of charge under Section 77 of the Companies Act, 2013 - HELD THAT:- The order passed by the Debt Recovery Tribunal dated 26th April, 2017 is an order adjudicating the dispute between the Appellant and the Corporate Debtor and after adjudication, the order passed by the Tribunal is akin to a Decree. The order dated 26th April, 2017 indicates that 30 days time was allowed to the defendants (one of which was Corporate Debtor) to make the payment, failing which the amount was to be recovered from the sale of mortgaged and hypothecated properties - When the sale of mortgaged and hypothecated was directed as per judgment of the Debt Recovery Tribunal, the mortgage and hypothecation no longer remained the matter of contract, rather it was the part of the judgment of the Tribunal and the non-registration of charge as required by Section 77 of Companies Act, 2013 does not in any manner affect enforceability of the order dated 26th April, 2017. There being adjudicatory order of the Debt Recovery Tribunal in favour of the Appellant, the mortgage and hypothecation was created in favour of the Appellant by the Corporate Debtor, hence, non-registration of mortgage and hypothecation under Section 77 of the Companies Act cannot be a ground to held that Appellant was not a secured creditor - Under the order of the Debt Recovery Tribunal, the Corporate Debtor having not deposited the amount within 30 days time period, the Appellant was at liberty to realise the amount from mortagaged and hypothecated assets. Adjudicating Authority committed error in rejecting the claim of the Appellant to be of secured creditor - the Appellants were entitled to recover their dues from the secured assets and they having relinquished the security interest according to Section 52 of the IB Code, as was requested by the Liquidator, in the liquidation proceedings - Appeal allowed. 2022 (1) TMI 213 Direction to COC to consider ineligibility of 3rd Respondent under Section 29A of I B Code - main grievance of the Appellant is that the COC has no power to consider the ineligibility of the 3rd Respondent under Section 29A - HELD THAT:- From the Provisions of Law, it is clear that the Code (IBC, 2016) and the Regulations empowers the Committee of Creditors approving the Resolution Plan and also empowers that it shall not approve a Resolution Plan where the Resolution Applicant is ineligible under Section 29A. In this case, the Adjudicating Authority directed the COC to consider whether the 3rd Respondent is really ineligible under Section 29A(e) of the IBC and therefore directed the COC, which has the power to approve the Resolution Plan and also consider the Resolution Applicant s ineligibility under Section 29A. In accordance with the above Provisions of Law and the Regulations made thereunder, the COC has the power to consider the eligibility/ineligibility of the Resolution Applicant whether they are eligible/ineligible under Section 29A(e) of the Code. The stand of the 3rd Respondent is that the Resolution Professional did not afford any opportunity to cure the defect and Suo moto rejected on the ground of ineligibility which is mere technicality. However, this Tribunal is not inclined to delve into those issues. This Tribunal is considered only with respect to whether the Adjudicating Authority has passed the order directing the COC to consider the ineligibility of the 3rd Respondent is in accordance with law or not. This Tribunal is of the view that as per the above Provisions of Law, the COC has power to take a decision with regard to approval of the Resolution Plan. Further in accordance with the Regulations, the Committee has power to evaluate the Resolution Plans received by the Resolution Professional. As per Sub Regulation 4 of Regulation 39, the COC has power to approve the plan and after approving the Plan by the Committee the Resolution Professional shall submit to the Adjudicating Authority. Therefore, this Tribunal is of the view that the COC has power to decide and approve the Resolution Plan of the Resolution Applicants. Appeal dismissed. 2022 (1) TMI 212 Dissolution of the Corporate debtor - section 54(1) of the Insolvency and Bankruptcy Code, 2016 r.w. Regulations 45(3)(b) of the IBBI (Liquidation Process) Regulations, 2016 - HELD THAT:- This Authority in the exercise of the powers conferred under section 54(2) of the I.B. Code order the dissolution of the Corporate Debtor viz., M/s. Shree Santosh Cotton Spin Private Limited. Application allowed. 2022 (1) TMI 211 Seeking dissolution of M/s. Medanta Duke Research Private Limited - section 59 of the Insolvency and Bankruptcy Code, 2016 (Code) read with Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 - HELD THAT:- In compliance of the direction of Hon'ble NCLT's order, registrar of companies has filed a report to the petition filed u/s. 59 of insolvency bankruptcy code dated 17.03.2021 stating that As per data available and maintained no inquiry/inspection/complaint/legal action has been proceeded/pending against the subject Company. That this office has compiled the above factual report on the basis of the records maintained document filed by the concerned Company on MCA21 portal. There is no legal impediment in allowing the prayer of the applicant - the Prayer of Liquidator to dissolve the Company U/s. 59 of IBC, is allowed - application allowed. Service Tax 2022 (1) TMI 210 Direction respondents to accept the return manually - HELD THAT:- The only case before the High Court was that due to technical glitch, the petitioner was compelled to file the return manually, the cause which could not satisfy the High Court. Be that it may if at all the petitioner has filed the return electronically which even was not the case of the petitioner before the High Court and if it found to be in order and in accordance with law and same may be considered by the Department in accordance with law and permissible under law for which we have not expressed anything on merits in favour of the petitioner. SLP dismissed. 2022 (1) TMI 209 Condonation of delay in filing appeal - overcoming the statutory period of limitation - seeking to recover service tax and penalty - Sabka Vishwas (Legacy Dispute Resolution) Scheme - Section 125 of the Finance Act, 1994 - HELD THAT:- By virtue of the orders of the Supreme Court in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [ 2021 (11) TMI 387 - SC ORDER] , the period of limitation for filing appeals stands condoned till 02.10.2021 from 15.03.2020. Therefore, petitioner can prefer an appeal against the order in original dated 27.11.2020 under Section 85 of the Finance Act, 1994; by seeking condonation of delay from 27.11.2020 till 02.10.2021. Petitioner has been contesting this writ petition from 12.10.2021 onwards. The period during which this writ petition has been pending from 12.10.2021 till today, can also be excluded while calculating the period of limitation. This Court is of the opinion that, the remedy of an appeal available to the petitioner must be pursued and, irrespective of whether the petitioner was served with the earlier order dated 27.11.2020; or not no prejudice will be caused to the respondents, if the petitioner is served with a fresh certified copy of the order in original in a time bound manner - In order to enable the petitioner to prefer an appeal against the order in original, the period spent by the petitioner in pursuing this writ petition from 12.10.2021, till the date of judgment shall stand excluded for the purpose of calculating the period of limitation, apart from the period from 26.11.2020 till 02.10.2021. Petition disposed off. 2022 (1) TMI 208 Reverse charge mechanism - GTA service - appellant were proprietorship concerns - section 68(2) of the Act r/w Notification 30/2012-ST dated 20.6.2012 - Extended period of limitation - HELD THAT:- It clearly shows that the department had full knowledge about the activities of the appellant way back in the year 2016 itself therefore in my view the plea of suppression or non-disclosure with intent to evade service tax is not available to the department. It is settled legal position that mere failure to declare does not amount to mis-declaration or willful suppression and therefore extended period cannot be invoked in such a situation. There is no evidence of fraud or suppression of fact. The certificates, issued by the respective State Governments, to the effect that the said proprietary concerns are registered as Factories have also been submitted by the Appellant before the authorities concerned and before me as well. A perusal of the same will lead to inevitable conclusion that the proprietary concern to whom GTA services were provided by the appellant, were authorized dealers of Piggio Auto and were registered as factories therefore in view of Section 68(2) ibid read with Notification (supra) those they are liable to pay service tax under reverse charge mechanism. Therefore the demand for the period April, 2016 to June, 2017 is also liable to be set aside. Although the appellant has also raised the issue of threshold exemption under notification no.33/2012-ST dated 20.62012 but as it is already held that since those proprietary concerned have been registered as factories, they are liable to pay service tax under reverse charge mechanism, therefore the issue of threshold exemption, is not decided upon. Appeal allowed - decided in favor of appellant. 2022 (1) TMI 207 Consideration for the services - Mining services - whether entitlement towards Cost Petroleum under the Production Sharing Contract can be treated as consideration for rendering mining services to the Government of India? - transaction on principal-to-principal basis - Production Sharing Contract - Joint Venture agreement - HELD THAT:- This precise issue was examined at length by the Division Bench of the Tribunal in the decision rendered by the Tribunal on 06.10.2021, in the case of the appellant itself, in B.G. EXPLORATION PRODUCTION INDIA LTD. VERSUS COMMISSIONER OF CGST CEX., NAVI MUMBAI [ 2021 (10) TMI 306 - CESTAT MUMBAI] . The Tribunal, after referring to the earlier decision of the Tribunal rendered on 11.06.2020 in the case of the appellant in BG EXPLORATION PRODUCTION INDIA LTD VERSUS COMMISSIONER OF SERVICE TAX (AUDIT-I) MUMBAI [ 2020 (10) TMI 579 - CESTAT MUMBAI] , the decision of the Tribunal in MORMUGAO PORT TRUST VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX, GOA- (VICE-VERSA) [ 2016 (11) TMI 520 - CESTAT MUMBAI] and the decision of the Supreme Court in FAQIR CHAND GULATI VERSUS UPPAL AGENCIES PVT. LTD. [ 2008 (7) TMI 159 - SUPREME COURT] and after noticing that an appeal had been filed by the Department in the Bombay High Court against the decision of the Tribunal rendered on 11.06.2020, observed that the Government of India with the appellant, RIL and ONGC had entered into a joint venture agreement, whereunder each co-venturer had its own set of obligations and the responsibility discharged by each of the co-venturers towards the venture was not by way of any service rendered to the joint venture, but in their own interest in furtherance of the common objective of the joint venture. Service tax liability, therefore, could not have been fastened upon the Appellant. From the provisions of the Production Sharing Contract it is clear that Cost Petroleum and Profit Petroleum cannot be said to be consideration flowing from the Government of India to the appellant and that the components of Cost Petroleum and Profit Petroleum are inherent and embedded part of the Production Sharing Contract. Consequently, such components cannot be treated as consideration for the services rendered by the appellant. A perusal of the Circular dated 12.02.2018 reveals that Contractors carry out the exploration and production of petroleum for themselves and not as a service to the Government of India and Cost Petroleum is not a consideration for service to Government of India and thus not taxable per se. It is, therefore, more than apparent that the aforesaid Circular only confirms the view taken by the Tribunal in the decision rendered on 06.10.2021 of appellant earlier case. Appeal allowed - decided in favor of appellant. 2022 (1) TMI 206 Short levy or not paid service tax - extended period of limitation - period 2012-13 and 2013-14 - HELD THAT:- No such objection of short payment or non-payment of service tax has been raised during the course of audit as pointed out by the ld. Counsel during the course of argument and admittedly, the show cause notice has been issued on 21.04.2017 which is beyond the period of limitation of one year, therefore, the demand cannot be raised against the appellant as there is not suppression on the part of the appellant as audit took place on 02.04.2014 itself. As the show cause notice has been issued beyond the period of limitation of one year, therefore, the demand against the appellant is not sustainable - Appeal allowed - decided in favor of appellant. 2022 (1) TMI 204 Refund of service tax - refund sought on the premise that it had not been able to avail input tax credit on the said amount - opportunity for a hearing not provided - violation of principles of natural justice - HELD THAT:- This writ petition can be disposed of without going into the merits of the matter. There are no propose to enter into the merits of the controversy or to render any finding as to whether a notice for personal hearing was actually issued to the petitioner or not. The Learned Standing Counsel is justified in asserting that a person who failed to avail an opportunity cannot be heard to complain of a violation of the principles of natural justice. However, one cannot lose sight of the fact that this is not a case where there has been a consistent default on the part of the petitioner in appearing for a personal hearing. Further opportunity should have been granted to the petitioner for a personal hearing - Petition allowed. Central Excise 2022 (1) TMI 205 Exemption under N/N. 12/12-CE(Sl.No.134), as amended by the N/N. 12/13-CE dated 1.3.2013 - manufacture of Henna Powder and Henna Paste - Revenue entertained a view that they are not eligible for exemption for the said products as these are either not Henna Powder or Henna Paste not mixed with any other ingredients - Tribunal held that We are constrained that the basic facts of the case have not been found in chromatography test so that the Tribunal will be able to pass an order on legality of the claim of the appellant. HELD THAT:- There are no reason to deviate from the view taken by the Tribunal to relegate the parties before the adjudicating authority in the fact situation of the present case. Appeal dismissed. 2022 (1) TMI 203 Area based exemption - case of department is that appellant have availed the credit therefore the condition of the notification no. 30/2004-CE was violated - appellant paid an amount equal to 6% under rule 6(3) of Cenvat Credit Rules, 2004 - HELD THAT:- The appellant right from the adjudication stage and before this appellate tribunal submitted that there is specific provision under rule 6 (3D) according to which even if the Cenvat credit is availed and reversal of an amount at the rate of 6% is made it will amount to non availment of Cenvat credit and the condition of the notification stands complied with. It is found that the adjudicating authority has not touched upon rule 6(3D) of the Cenvat Credit Rules, 2004 while deciding the eligibility of the exemption notification no. 30/2004-CE dated 09.07.2004. The main defence of the appellant is on Rule 6(3D) but since the same was not considered by the adjudicating authority and no independent finding was given, the impugned orders are non speaking therefore the same are not sustainable. Matters remanded to the adjudicating authority for passing a fresh de-novo order within a period of three months from the date of this order - appeal allowed by way of remand. 2022 (1) TMI 202 Clandestine removal - CTD/TMT bars - provisions of Section 9D of the Central Excise Act have not been followed - allegations against the appellant are based on the statement of third party which were not subjected to examination-in-chief or cross-examination - Principles of natural justice - HELD THAT:- A plain reading of Section 9D(i) ibid makes it clear that clauses (a) and (b) therein set out the circumstances in which a statement made and signed by a person before the Central Excise Officer of a gazetted rank, during the course of inquiry or proceeding under the Act, shall be relevant, for the purpose of proving the truth of the facts contained therein. The use of the word shall in the said section makes it clear that the provisions contemplated in the said sub-section are mandatory. It means that the procedure prescribed in Section 9D(i) ibid has to be followed mandatorily in the adjudication proceedings and if without following the procedure stated therein, the adjudicating authority relies upon the statements recorded during investigation then it vitiates the adjudication process. Either the adjudicating authority follow the procedure prescribed in Section 9D or if it is not possible to follow then to discard those statements. Although in the instant case, opportunities were granted by the adjudicating authority to the appellant but they chose not to participate in the proceeding - When the legislature has laid down a procedure to be followed then it has to be done in that way only and no shortcut can be adopted. Therefore on this ground alone, without going into the merits of the matter, it is deemed proper to set aside the impugned order and remand the matter back to the adjudicating authority for de novo adjudication after giving an opportunity of hearing to the appellant - appeal allowed by way of remand. 2022 (1) TMI 201 Entitlement to to interest on the amount deposited by it during the investigation, consequent to dropping of the entire demand - relevant time for calculation of interest - HELD THAT:- Division Bench of this Tribunal in M/S. PARLE AGRO PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS SERVICE TAX, NOIDA (VICE-VERSA) [ 2021 (5) TMI 870 - CESTAT ALLAHABAD] , following the ruling of the Apex Court in SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [ 2006 (1) TMI 55 - SUPREME COURT] has been pleased to grant interest @ 12% p.a. from the date of deposit till the date of grant of refund, with reference to Section 35FF of the Central Excise Act. The Court below is directed to disburse the interest on refund @ 12% p.a. from the date of deposit till the date of refund within a period of 45 days from the date of receipt or service of the copy of this order - Appeal allowed - decided in favor of appellant. 2022 (1) TMI 200 Valuation - requirement of affixation of MRP on the finished goods - packets are less than 10 gms - applicability of Section 4 of the Central Excise Act, 1944 or Section 4(A) of the Act? - HELD THAT:- In appellant s own case CCE, JAMMU VERSUS HYDERABAD CHEMICALS LTD. AND VICE-VERSA [ 2018 (9) TMI 305 - CESTAT CHANDIGARH] , this Tribunal placed reliance in the case of RADHA TOBACCO CO. VERSUS COMMISSIONER OF CENTRAL EXCISE KANPUR [ 2016 (7) TMI 768 - CESTAT ALLAHABAD] where it was held that Considering the fact that the appellant have made packages for retail sale, they are legally bound to affix MRP of the said goods. In the circumstances, the appellant is required to discharge duty in terms of Section 4A of the Act. Therefore, the appellant has correctly discharged the duty liability under section 4A of the Act. The appellant is rightly discharged the duty in terms of Section 4(A) of the Act - Appeal allowed - decided in favor of appellant. 2022 (1) TMI 199 Levy of penalty under Rule 26 of the Central Excise Rules, 2002 - availment of irregular CENVAT Credit - non receipt of raw material in their factory - no finished goods manufactured and cleared by them - neither any plant/machinery nor any electric connection to manufacture the finished goods - no corroborative evidences found - HELD THAT:- A case has been booked against the appellants on the basis of investigation conducted at the end of Assistant Commissioner of CGST, Bhiwadi, Rajasthan. But no corroborative evidence has been brought nor any statement against the appellants placed on record whether the goods have been procured without invoice or not? Moreover, in their statement of the appellant it has been categorically stated that they have received the goods which has been used in the manufacture of final products and the same has been cleared on payment of duty. Therefore, in the absence of any corroborative evidence against the appellants, the penalties are not imposable on all the appellants. Appeal allowed - decided in favor of appellant. 2022 (1) TMI 198 CENVAT Credit - credit taken on bills of entry of imported goods without receipt of the goods - levy of penalty under Rule 26 of Central Excise Rules, 2002 - documents as requested by the appellant were not produced - violation of principles of natural justice - HELD THAT:- There is a force in the argument of the counsels for all the appellants on the ground of principles of natural justice. It is found that all the appellants could not re-present during the personal hearing. Also all the relied upon and none relied upon documents were not supplied to the appellants - It is also observed that the relied upon documents have not been provided to the appellant nor records seized from the appellant have been returned to them despite the request made by the appellant by letter dated 24.01.2011, thereafter, almost after 8 years impugned order was issued. The adjudicating authority has grossly violated the principles of natural justice by not providing the documents as requested by the appellant and also not giving the effective hearing to the appellants - without going into the other details of the adjudication order, it is held that the principles of natural justice which is the foremost requirement for any adjudication, needs to be followed. Matter remanded to the adjudicating authority to comply with the principles of natural justice and to pass a de novo adjudication order after providing all the documents and sufficient opportunity of personal hearing - appeal allowed by way of remand. 2022 (1) TMI 197 Reversal of CENVAT Credit - input - Baggase - exempt goods - manufacture of taxable as well as exempt goods - non-maintenance of separate account for manufacturing of exempted as well as dutiable goods - demand to pay 5% of the value exempted goods interms of rule 6(3) of CENVAT rules 2004 - HELD THAT:- The issue has been settled by the Hon ble apex court in the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT] where Apex Court has held that in the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty. As the Hon ble apex court has held that Rule 6 of cenvat credit rules, 2004 is not applicable to the facts of the case. In that circumstances, no demand under rule 6(3) of cenvat credit rules 2004 is sustainable against the appellant - appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2022 (1) TMI 196 Rejection of account books of the applicant - best judgement assessment against the applicant - Consideration of affidavit of Shri Jagdish Prasad and Jangi Lal which were filed before the assessing authority and were pressed before the Ist appellate authoritity as well as before the Tribunal - HELD THAT:- The specific directions given by this Court vide order dated 14.11.2013 has not been complied with. The specific requirement for filing of the counter affidavit was to explain as to why the affidavit filed by the dealer in support of his contention was not considered by the appellate authority. The counter affidavit so filed, does not whisper a word for which the affidavit was sought. The respondents have just in a casual manner has filed the counter affidavit. When a specific direction was there, the affidavit must be filed as per the directions and not on the whims and fancies of the officers. This act of the department is deprecated. The matter is remanded to the Tribunal to re-consider the same without being influenced with the observations made by the assessing authority - revision allowed by way of remand. 2022 (1) TMI 195 Violation of principles of natural justice - validity of assessment order - at the time when the notice was served on the security guard, the area of the petitioner's office was a containment zone and all staff of the petitioner were working from home - effective opportunity of being heard was not made available to the petitioner - HELD THAT:- The extraordinary situation demand exceptional approach. Functioning of establishments during lockdown or in containment zones during covid-19 pandemic has been peculiar and extraordinary. Those who were beyond the limits of the containment zones were not permitted to enter into the containment zones, while those who are inside the containment zones, were not permitted to step out of the containment zones. Thus the admitted service of notice upon the security guard of the petitioner's office building, in the strict sense of the term, cannot be treated as an effective service of notice for the purpose of complying with the directions under Ext.P2 for granting a reasonable opportunity of being heard. Even to move into the office building of the petitioner, there was a restriction in the form of total lockdown in the State. Hence for reasons beyond the control of the petitioner, there was a failure to grant a reasonable opportunity of being heard, though for no fault of the assessing officer also - In the nature of circumstances in which the petitioner was served with the notice on 22.09.2020, petitioner was in a disadvantaged position and hence this Court finds that there was no effective or reasonable opportunity of being heard granted to the petitioner. Interests of justice demand that petitioner be granted one more opportunity of being heard and to produce the required documents if any, to complete the assessment afresh - While setting aside Ext.P1, it is imperative that petitioner should not be permitted to further delay the assessment of the proceedings. Petition allowed. 2022 (1) TMI 194 Validity of assessment order - Assessing Officer has erroneously applied the provisions of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) and passed the assessment orders which resulted exercise of jurisdiction erroneously - HELD THAT:- Jurisdictional error should not result in exoneration of liability. Jurisdictional error, if any committed, is technical, and thus, rectifiable. In such circumstances, the Courts are expected to quash the order passed by an incompetent authority and remand the matter back for fresh adjudication. Contrarily, if an assessee is exonerated from liability, undoubtedly, the purpose and object of the Act is defeated. The growing practice in the High Court is to file writ petitions under Article 226 of the Constitution of India without exhausting the statutory remedies provided under the Act. The points raised in this regard are statutory violations. However, even such statutory violations can be dealt with by the Appellate authorities or the Appellate Tribunals. This apart, in a writ petition, if such orders are passed with jurisdictional errors and quashed without any remand, then an injustice would be caused to the very spirit of the statute enacted for the benefit of the public at large. Thus, Courts are expected to be cautious, while granting exoneration of liability merely on the ground of jurisdictional errors, if any committed by the authorities competent - The procedures to be followed in the department for assessment are well settled. Thus, the authorities competent are not expected to commit such jurisdictional errors in a routine manner. In these circumstances, review of such orders by the higher authorities are imminent to form an opinion that there is willful or intentional act for commission of such jurisdictional errors, enabling the assesses to get exonerated from the liability. Liability and jurisdictional errors are distinct factors, and therefore, Courts are expected to provide an opportunity to the Department to decide the liability on merits and in accordance with law with reference to the provisions of the Act and Rules and guidelines issued by the Department. Large number of writ petitions are filed without exhausting the statutory appeal remedies and High Court is also entertaining such writ petitions in a routine manner. Keeping such writ petitions pending for long time would cause prejudice to the interest of the assessee also. Thus, such statutory provisions regarding the appeal are to be decided at the first instance, enabling the litigants to avail the remedy by following the procedures as contemplated under law - the Courts shall not provide unnecessary opportunities to the assessee to escape from the liability merely on the ground of jurisdictional error, which is rectifiable. This Court has no hesitation in arriving a conclusion that the petitioner is bound to exhaust the statutory appellate remedy as contemplated under the provisions of the TNVAT Act. Thus, the petitioner is at liberty to approach the appellate authority by filing appeal/revision and by following the procedures contemplated. The delay, if any occurred, for filing the appeal, shall be condoned by the appellate authority and the appeal shall be taken on file to be adjudicated on merits and in accordance with law and by affording opportunity to all the parties concerned. Petition disposed off. Indian Laws 2022 (1) TMI 193 Dishonor of Cheque - rebuttal of presumption - contention of the petitioner is that learned Trial Court has based its finding on surmise and conjecture and has not considered the evidence on record - HELD THAT:- D.W-1 has failed to rebut the presumption raised against him which include the existence of the legally enforceable debt or liability. In the present case the defendant petitioner has produced some money receipt as exhibit B series which indicate that he has paid ₹ 52,000/- to M/S. Fortune Filling Centre owned by the complainant opposite party no. 2 towards interest against the loan received by him. The documents produced by the petitioner in his evidence before the trial establishes that he has a business transaction with the complainant and he issued the cheque in favour of the complainant in discharge of his liability. Learned Magistrate while awarding compensation against the drawer of the cheques has not assigned any reason as to why he did not compensate the complainant to the extent of the total cheque amount. There are no illegality in the judgment passed by learned Magistrate in respect of the sentence and compensation. The Appellate Court has also noticed this fact and pointed out that it is within the discretion of the trial to award compensation and no illegality have been committed due to the difference between the cheque amount and the compensation - the petitioner cannot escape his liability from making payment of the debt he has conceded by issuing the cheques in favour of Opposite Party no. 2. There is no illegality or impropriety in the impugned judgement passed by the learned Additional District and Sessions Judge, F.T.C., 2nd Court, Haldia - revisional application is dismissed on merit. 2022 (1) TMI 192 Dishonor of Cheque - Vicarious liability on the Director of the company - involvement of the director (respondent No. 2) in the affars of the company or not - cheque signed by the said director or not - whether the allegation was made merely on account of the position held by the director in the accused company? - HELD THAT:- The law on summoning of an accused for the offence punishable under Section 138 N.I. Act has been enunciated by the Supreme Court time and again. It has been propounded that before summoning an accused under Section 138 N.I. Act, the Magistrate shall examine the nature of the allegations made in the complaint and the evidence, both oral and documentary, in support thereof, and then proceed further with the proper application of mind to the legal principle of the issue - It is also well settled that at the time of issuing of the process, the Magistrate is required to see only the allegations in the complaint and only where the allegations in the complaint do not constitute an offence against a person, the complaint is liable to be dismissed. For making a Director of a company liable for the offences committed by the company under Section 141 of the N.I. Act, there must be an averment in the complaint that he was in-charge of and responsible to the accused company for running of its day-to-day business at the time of commission of the alleged offence - the N.I. Act being a penal statute should receive strict construction and thus, averments in the complaint which satisfy the requirements of Section 141 N.I. Act are imperative. The fact that respondent No. 2 is a Director of the accused company is also not disputed. The petitioner has also placed on record balance sheets of the accused company for the relevant years, which indicate that the same were signed by respondent No. 2 in the capacity of Director. In this backdrop, what role, if any, was played by respondent No. 2 at the time when the offence was committed shall be a matter of trial and may be discerned by the concerned Court once both parties have led evidence - In the opinion of this Court, no ground for quashing of the summoning order qua respondent No. 2 is made out, as the case is at nascent stage. Considering the facts thereof, requirements of Section 141 N.I. Act are prima facie satisfied. The present petition is allowed and the impugned order is set aside. 2022 (1) TMI 191 Dishonor of Cheque - insufficiency of funds - existence of transaction and consideration or not - presumption under Section 139 of the Negotiable Instruments Act - preponderance of probability - whether the revision petitioner/accused discharged the burden of proof with positive evidence by probablising the suggestive case? - HELD THAT:- On perusal of Ex.P1 marked through D.W.1, it is found that the complainant has no means to advance such a huge amount of ₹ 4 lakhs and it is only is oral evidence. However, Ex.D1 statement of bank accounts shows that it never exceeded ₹ 10,000/- the account of company at relevant point of time and the entire amount ODT only assumes significance. It is the burden on the shoulder of the accused to prove non existence passing of consideration for the issuance of cheque. The same can be either by direct or by bringing on record, the preponderance of the probability or by reference of the suggestive upon which he relied on. It may not insist upon the accused to disprove the existence of the consideration by leading direct evidence as the leading negative evidence neither possible nor contemplated. This Court finds that the revision petitioner/accused has successfully demonstrated before the Court that the private complainant does not possess sufficient source of income to lend to ₹ 4 lakhs at relevant point of time - in the complaint and in the deposition, P.W.1 has stated that A3 has issued the cheque and hence it is found that the evidence of P.W.1 regarding passing of consideration for A1 and A2 issuance of cheque by A3 suffers from material implementation amounting to material contradiction on the point of passing of consideration and issuance of the cheque by A3 therefor. In the circumstances, the cloud has been created has to be issuance of the cheque by A3 to the private complainant. Before the trial Court, A2 was acquitted and there is no appeal as against the acquittal of A2 also assumes significance and hence I find that A3 has successfully demonstrated that there does not exists any legally enforceable debt between the respondent- complainant and the accused and theory forwarded by the private complainant in Ex.P3 complaint is totally different from that of the complaint and the P.W.1 evidence passing off consideration for issuance of the cheque by A3 is under cloud - In the absence of any other explanation by the complainant that he had some other account or any evidence to show the source of income after the rebuttal, this Court holds that the accused has successfully demonstrated the rebuttal of presumption and then it becomes duty has caused upon the private complaint to demonstrate his source of income. Admittedly, no re-examination or any additional documents was marked - the order of conviction passed by both the Courts below is erroneous on the facts and circumstances of the case - Criminal Revision Petition is allowed.
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