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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter October 1, 2022 Case Laws in this Newsletter: GST Income Tax Benami Property Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Articles LIMITATION PERIOD UNDER THE IBC CODE Transfer of right over undivided share of land and reversal under Rule 42 S.234F - Delayed Filing of ROI- mandatory fees – is not justified. RECENT DEVELOPMENTS IN GST News ONDC network starts beta testing with consumers in Bengaluru Exchange Rate Notification No. 85/2022 - Customs (N.T.) Monetary Policy Statement, 2022-23 Resolution of the Monetary Policy Committee (MPC) September 28-30, 2022 IBBI to celebrate its Sixth Annual Day tomorrow India climbs to the 40th rank in the Global Innovation Index of WIPO; a huge leap of 41 places in 7 years Notifications Companies Law S.O. 4584 (E) - dated 29-9-2022 - Co. Law Central Government extends the tenure of the Judicial Members and Technical Members of National Company Law Tribunal S.O. 4583 (E) - dated 29-9-2022 - Co. Law Central Government extends the tenure of the Judicial Members and Technical Members in the National Company Law Appellate Tribunal S.O. 4582 (E) - dated 29-9-2022 - Co. Law Central Government extends the tenure of the Judicial Members and Technical Members in the National Company Law Appellate Tribunal Customs G.S.R. 741(E) - dated 29-9-2022 - Cus Implementation of India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA) - Corrigendum - Notification No. 51/2022-Customs, dated the 28th September, 2022 GST G.S.R. 740 (E) - dated 29-9-2022 - CGST Extension of due date for filing of application for refund u/s 55 by notified agencies - Corrigendum - Notification No. 20/2022-Central Tax, dated the 28th September, 2022 GST - States S.O. 192 - dated 29-9-2022 - Bihar SGST Seeks to rescind Notification No. S.O. 164, dated the 3rd April, 2018 S.O. 191 - dated 29-9-2022 - Bihar SGST Bihar Goods and Services Tax (Second Amendment) Rules, 2022 S.O. 190 - dated 29-9-2022 - Bihar SGST Seeks to bring in force sections 2 to 15 of the Bihar Goods and Services Tax (Amendment) Ordinance, 2022 F.12 (15)FD/Tax-2022- 47 - dated 30-9-2022 - Rajasthan SGST Notification seeking to make amendments (Second Amendment, 2022) to the RGST Rules, 2017 F.12 (15)FD/Tax-2022- 46 - dated 30-9-2022 - Rajasthan SGST Notification seeking to notify 01.10.2022 as the date on which provisions of sections 2 to 15, of Rajasthan Goods and Services Tax (Amendment) Act, 2022 shall come into force. IBC IBBI/2022-23/GN/REG099 - dated 28-9-2022 - IBC Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Fourth Amendment) Regulations, 2022 IBBI/2022-23/GN/REG097 - dated 20-9-2022 - IBC Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Third Amendment) Regulations, 2022 IBBI/2022-23/GN/REG096 - dated 20-9-2022 - IBC Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2022 IBBI/2022-23/GN/REG/098 - dated 20-9-2022 - IBC Insolvency and Bankruptcy Board of India (Information Utilities) (Second Amendment) Regulations, 2022 SEZ S.O. 4577 (E) - dated 27-9-2022 - SEZ Special Economic zone in the State of Tamil Nadu - area of 215.2600 hectares denotified thereby making resultant notified area as 803.9650 hectares. Circulars / Instructions / Orders FEMA 16 - dated 30-9-2022 Late Submission Fee for reporting delays under Foreign Exchange Management Act, 1999 (FEMA) DGFT 27/2015-2020 - dated 29-9-2022 Amendment in para 5.15 of Handbook of Procedures 2015-20, related to Export Promotion Capital Goods Scheme Highlights / Catch Notes GST Renting of residential accommodation - The clarification that renting of a residential dwelling by a proprietor of a registered proprietorship firm, who rents it in his/her own personal capacity for use as his/her own residence as well as not for use in the course or furtherance of business of his/her proprietorship firm and such renting is on his/her own account and not that of proprietorship firm shall be exempt from GST, is accepted by this Court and all the respondents are held bound by the same. - HC Visit to Get Source Rejection of refund claim - the law of limitation, being a procedural law, is retrospective in operation in the sense that it will also apply to the proceedings pending at the time of enactment as also to the proceedings commenced thereafter, notwithstanding that the cause of action may have arisen before the new provisions came into force - it is clear that any benefit that gets accrued by way of legislation cannot be denied/curtailed, more so, when it is clarificatory in nature like the present one and as such it has to be made retrospective in operation. - HC Visit to Get Source Income Tax Reopening of assessment u/s 147 - date of the issuance of the Notices - In the present case, the Notices were sent from the designated e-mail ID of the respective JAOs, fulfilling all requirements of authentication as per the relevant provisions. There was no doubt in the mind of the assessees that the Notices were sent by the Department. Therefore, the Notices falling under category ‘B’ would not be invalid simply because DSCs were not appended to the Notices. - HC Visit to Get Source Revision u/s 264 - Period of limitation - an order under Section 264 is required to be passed within a period of one year from the end of Financial Year, in which, the application is made by the petitioner for revision. In the instant case, last date of passing of order was 31.03.2022. That being the position, the question of giving a direction to the Commissioner for passing of an order under Section 264 of the I.T. Act beyond the said period would not arise. Hence, we are of the view that such a request cannot be granted. - HC Visit to Get Source Reopening of assessment u/s 147 - the petitioner is having an opportunity of explaining his stand, in the proceeding initiated pursuant to the notice under Section 148 of the I.T. Act. In fact no prejudice is caused to the petitioner by the acts of the respondents, if any. - HC Visit to Get Source Reopening of assessment u/s 147 - as per Explanation 2 of section 147, the Assessing Officer is free to reexamine correctness of a regular assessment and decide whether the tax assessed, rate applied, relief and allowances granted, etc., are in terms of the provisions of the Act and if not to revise the assessment in terms of section 147 of the Act. - HC Visit to Get Source Reopening of assessment u/s 147 - Unexplained gift receipt - “reason to suspect” or “reasons to believe” - The relevance of the reasons for the formation of the belief is to be tested by the judicial restraint as in administrative action as the Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made. The Court shall not examine the sufficiency or adequacy thereof. - no infirmity in the processing of reopening u/s 148 - AT Visit to Get Source Deduction u/s 80IB - Disallowance of Deduction as project was not completed as work-in-progress was reflected in the profit and loss account - Observing the facts and circumstances of the case that the legal issue of clause (e) & (f) is prospective in nature. Taking into consideration, the A.Y 2011-12, applicability of section 80IB(10) and clause (e) & (f) held that the amendment introduced clauses (e) & (f) and u/s 80IB(10) were prospective in nature. - AT Visit to Get Source Depreciation on "Toll Road" - once the right to collect the toll tax has been held to be intangible asset by the CIT(A), by following the judicial precedents in assessee’s own case, we are of the considered view that the learned CIT(A) erred in denying deduction of depreciation at the rate of 25% and restricting the same to 15% by referring to the claim made under the return of income. - AT Visit to Get Source Disallowance of Bad Debts - payment has been made by the railways after deducting the late delivery charges - it can be held that the amounts have been duly accounted under sales in the books of accounts, the due provisions have been made and when the recovery from the contractor/supplier have been made and liquidated damages are levied for late deliveries, they cannot be treated as penal in nature. Hence, the appeal of the revenue on this ground is liable to be dismissed. - AT Visit to Get Source Non-deduction of TDS - Disallowance u/s 40(a)(ia) - Scope of amendment to S. 40(ia) by Finance Act, 2010 by way of first proviso thereto -TDS u/s 194C - nil tax liability of the payee - A total relief is in any case more desirable and appropriate than a partial one. - AT Visit to Get Source Customs Import of good subject to FSSAI regulations - time frame for inspection of goods - Section 47(5) of the Act only makes provisions for the authorized officer of FSSAI to take samples of the imported articles and forward the same to the Food Analyst - it would not be prudent to prescribe or stipulate a particular timeframe within which that exercise of inspection, taking of samples and clearance is ultimately completed. This since it would be impossible for the Court to predict the vagaries of a particular situation as well as the volume of imported articles of food that may be pending for inspection at any particular point of time by FSSAI. - HC Visit to Get Source Seeking refund of terminal excise duty (TED) - the factum of payment of duty by the petitioner stands established. - The GST Authorities were thus impleaded to ascertain the mechanism presently in vogue. - GST & Central Excise Authority have merely distanced themselves from the present litigation stating that it is for the DGFT to take a view in regard to the refund - refund allowed - HC Visit to Get Source Levy of penalty on Customs Broker and Managing Director u/s 112 (a) - Deemed conclusion of proceedings on payment of duty with interest - the Circular has not personified any violator individually since it had categorically stated that cases involving seizer and confiscation would be out of the purview of the Circular and therefore the order passed by the Commissioner in allowing the benefit contained in Section 28(6)(i) to the importer company and its Managing Director and denying the same to the Appellant who is charged under same penal provisions under Section 112, 114(A), 114(A)(A) in the same case is unsustainable in law and equity. - AT Visit to Get Source Corporate Law Liquidation of company - alleged malafide conduct of the ex-directors of Futura - Proceedings under IBC - The conduct attributed to the ex-directors, prima facie borne out from the record, can certainly be not said to be unblameworthy. - It is directed that the winding up order would continue to operate despite the transfer of the proceedings to NCLT till an effective order is passed by NCLT under Section 13 of the IBC and only, thereafter, the Official Liquidator would stand discharged - HC Visit to Get Source Direct Taxes Benami Property Transactions - This Court took the view that Section 2(9)(A) and 2(9)(C) of the Act inserted by the Amendment Act of 2016 are prospective in nature because these two provisions have significantly and substantially widened the definition of ‘benami transaction’ than as was there in the unamended Benami Property Act of 1988. - HC Visit to Get Source VAT Condonation of delay of 584 days in filing revision - exclusion of COVID period - the delay in the instant case of 250 days even after ignoring the COVID period in terms of the judgment of the Apex Court and there being no plausible and cogent reasons for condoning the delay, the application for condonation of delay is rejected. - HC Visit to Get Source Case Laws: GST 2022 (9) TMI 1387 Renting of residential accommodation - Constitutional Validity of Clause (A)(b) of the Notification No.04/2022-Central Tax (Rate) dated 13th July, 2022 - exemption available to tenants who are registered under GST or not - HELD THAT:- The clarification that renting of a residential dwelling by a proprietor of a registered proprietorship firm, who rents it in his/her own personal capacity for use as his/her own residence as well as not for use in the course or furtherance of business of his/her proprietorship firm and such renting is on his/her own account and not that of proprietorship firm shall be exempt from GST, is accepted by this Court and all the respondents are held bound by the same. Petition disposed off. 2022 (9) TMI 1386 Rejection of refund claim - zero rated supply - whether the petitioner has supplied Electrical Energy across the border? - entitlement for refund of Input Tax Credit - whether amended Rule 89(2) of CGST Rules, 2022 is clarificatory or declaratory? - HELD THAT:- Circular No.175/07/2022-GST dated 06.07.2022 issued by Ministry of Finance, Government of India clearly establishes that amendment to Rule 89 of CGST (Amendment) Rules, 2022 was carried out to cure the defect in Rule 89 of CGST Rules, 2017, because of the problem faced by power generating units in filing refund claims of unutilised Input Tax Credit on export of electricity. Further, a perusal of the amendment to Rule 89(2) of CGST Rules, would inter-alia show that the said Rule came to be amended only to clarify the anomaly that was existing with regard to production of material evidencing export of a thing which is intangible in nature. This clarification came to be made since the situation namely transmission of energy could not have been visualized when Rule 89(2) was incorporated in the Statute book. Production of shipping bills will not prove or establish by any means the quantity of energy transmitted. Hence, by no stretch of imagination, the amendment can be said to be declaratory in nature, but it can only be a one, which would be curing the defect by issuing necessary clarification as to how transmission of electrical energy can be proved - Rule 89 of CGST (Amendment) Rules, 2022 is only clarificatory in nature. When amendment/notification dated 05.07.2022 issued by Government of India is held to be curative or clarificatory in nature, the question now would be whether the said clarification is retrospective in nature? - HELD THAT:- A proviso, which is inserted to remedy unintended consequences and to make the provision workable, a proviso which supplies an obvious omission in the section and is required to be read into the section to give the section a reasonable interpretation, requires to be treated as retrospective in operation so that a reasonable interpretation can be given to the section as a whole - The Constitutional Bench of Hon ble Supreme Court in COMMISSIONER OF INCOME TAX (CENTRAL) -I, NEW DELHI VERSUS VATIKA TOWNSHIP PRIVATE LIMITED [ 2014 (9) TMI 576 - SUPREME COURT] while deciding the question as to whether the insertion of proviso to Section 113 by Finance Act, 2002 is retrospective, discussed the general principles concerning retrospectivity and it was held that where a benefit is conferred by a legislation, the rule against a retrospective construction is different. If a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators' object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as retrospective. It is well settled law that no statute shall be construed to have a retrospective operation until its language is such that would require such conclusion. The exception to this rule is enactments dealing with procedure. This court held that the law of limitation, being a procedural law, is retrospective in operation in the sense that it will also apply to the proceedings pending at the time of enactment as also to the proceedings commenced thereafter, notwithstanding that the cause of action may have arisen before the new provisions came into force - it is clear that any benefit that gets accrued by way of legislation cannot be denied/curtailed, more so, when it is clarificatory in nature like the present one and as such it has to be made retrospective in operation. Petition allowed - remanded back to the Deputy Commissioner of Central Tax to deal with the claim of refund in terms of this common order. 2022 (9) TMI 1385 Reopening of portal for filing of form TRAN-1 - carry forward of CENVAT Credit - Section 140(3) of the CGST Act, 2017 - violation of principles of natural justice - HELD THAT:- It is very clear that the assesses are given two months time for filing concerned forms for availing Transitional Credit through TRAN-1 and TRAN-2 i.e, w.e.f. 01.09.2022 to 31.10.2022. Further, the authorities were also directed to see that there would be no technical glitches during the said period. A reading of the said order does not anywhere indicate that the same pertains to a particular assessment year. It appears that any assessee, who intends to file concerned forms for availing Transitional Credit through TRAN-1 and TRAN-2 and was denied earlier because of some technical problem, is always at liberty to make use of the said order and upload the relevant forms during the relevant period. Petition allowed. Income Tax 2022 (9) TMI 1384 Reopening of assessment u/s 147 - date of the issuance of the Notices - validity of the Notices issued u/s 148 as it stood prior to its amendment on 01st April, 2021, by the Finance Act, 2021 - Whether the JAO s act of generating Notice in the ITBA portal on 31st March, 2021, without despatching the Notice meets the test of the expression shall be issued in Section 149 and saves the Notices from being time barred? - HELD THAT:- There is no dispute in the present cases and it has been conceded during rejoinder arguments that the Notices have been despatched on or after 1st April, 2021, unlike in the case of Rajesh Sunderdas Vaswani [ 2016 (6) TMI 701 - GUJARAT HIGH COURT ] where the date of despatch was seriously disputed. This Court has only been called upon to determine the legal effect of the despatch of 1st April 2021 and thereafter, on the validity of the notices dated 31st March, 2021. It would be useful to note that, the impugned Notice was classified in category C . However, during the pendency of the proceedings, the JAO on 30th July 2022 determined that the said Notice though generated and signed on 31st March 2021 was issued through e-mail by the ITBA servers on 6th April, 2021. It has been brought to this Court s attention that the JAO has now self-determined that the same shall be governed by the judgment of the Supreme Court in Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT ] and JAO has accordingly proceeded to treat the Notice dated 31st March 2021 as notice under Section 148A(b). The aforesaid acts of the JAO belie the submissions of the counsel for the Department that the generation of the Notice on the ITBA screen constitutes issuance. It further substantiates the contention of the petitioners that the date and time of issue of the emails by the ITBA servers are readily available with the Department and therefore there is no disputed issue of facts. We therefore answer question no. (I) in negative against the Department and hold that the impugned Notices dated 31st March, 2021, which were despatched on 1st April, 2021, or thereafter, would not meet the test of issued under Section 149 of the Act of 1961 and would be time barred, unless saved by the judgment of the Supreme Court in Ashish Aggarwal (Supra). Determination of the time of despatch of the impugned Notices issued through e-mail - Whether despatch as per Section 13 of the Act of 2000 is sine qua non for issuance of Notice through electronic mail for the purpose of Section 149 of the Act of 1961? - It would also be relevant to note that the time taken by the ITBA e-mail software system on 31st March, 2021, to despatch the emails was not due to any software glitch. The time taken by the software system was as per the programming of the system, as admitted in the Compliance Affidavit. The programming to despatch the Notices in a controlled manner and batch mode was a pre-existing fact and to the knowledge of the Department. The time taken in despatch of the e-mail on 31st March, 2021, was therefore as per the controls set in the ITBA system. We are in respectful agreement with the law laid down by the various High Courts in Daujee Abhushan [ 2022 (3) TMI 784 - ALLAHABAD HIGH COURT ], Santosh Krishna HUF [ 2022 (5) TMI 420 - ALLAHABAD HIGH COURT ], Mohan Lal Santwani [ 2022 (5) TMI 421 - ALLAHABAD HIGH COURT ], Advance Infradevelopers (P) Ltd. [ 2021 (6) TMI 6 - MADRAS HIGH COURT ] and Yuvraj v. Income Tax Officer [ 2022 (3) TMI 536 - MADHYA PRADESH HIGH COURT ], that for determining when Notices were issued, the date and time of when the ITBA e-mail software system is triggered and the Notices leave the last ITBA server would be considered. We therefore answer question no. (II) in affirmative and hold that despatch as per Section 13 of the Act of 2000, is a sine qua non and happens when the electronic mail message leaves the ITBA s servers. Whether the time taken by the ITBA s e-mail software system on 31st March, 2021, in despatching the e-mails to the assessee is not attributable to the JAOs and the notices will be deemed to have been issued on 31st March, 2021? - We answer question no. (III) against the Department and hold that the time taken by the ITBA s e-mail software system in triggering the e-mail and transmitting the said e-mails from the ITBA servers is attributable to the Department and therefore for the e-mails despatched on 1st April 2021 or thereafter, the Notices are held not to have been issued on 31st March 2021. Department from May, 2022, for Notices issued on or after 1st April 2021, has considered the date and time of despatch of the notices as recorded by the ITBA portal as the date of issuance and disregarded the date of generation of notice i.e. 31.03.2021. For notices despatched on or after 1st April 2021, the Department, following the Supreme Court s order in Ashish Agarwal (Supra) considered the notices as issued under Section 148A of the Act of 1961. This shows that the Department itself acknowledges and admits that the date of generation is distinct from date of issuance and the Department considers the despatch by ITBA Portal as the date of issue for the purpose of Section 149 of the Act of 1961. Authentication of notices and other documents - Whether the Section 148 Notices sent as an attachment through e-mails, from the designated e-mail addresses of the JAOs, which do not bear the respective JAO s digital signature are valid under Section 282A the Act of 1961 read with Rule 127A of the IT Rules? - As per the Compliance Affidavit, the ITBA portal was itself developed for the Department in such a way that it makes the affixation of DSC optional. The notice upon generation may or may not be affixed with DSC, it would, regardless of whether DSC is attached or not, be sent through the ITBA e-mail system once it has been generated. From a combined reading of the relevant provisions, the explanation to the Finance Bill, 2016 and the abovementioned note, it becomes evident that the affixation of DSC in notices issued under Section 148 of the Act of 1961 has not been made mandatory. As long as the requirements of Section 282A of the Act of 1961 and Rule 127A of the IT Rules, are followed the notices would be considered to be authenticated. In the present case, the Notices were sent from the designated e-mail ID of the respective JAOs, fulfilling all requirements of authentication as per the relevant provisions. There was no doubt in the mind of the assessees that the Notices were sent by the Department. Therefore, the Notices falling under category B would not be invalid simply because DSCs were not appended to the Notices. JAO is therefore directed to determine time of despatch as recorded by the ITBA portal for each of these Notices and the date and time of despatch as determined by the JAO will be considered to be the date of issuance. Notice dated 31st March 2021, which was not digitally signed and was received on 16th April 2021, the JAO is directed to determine the date and time of despatch as recorded by ITBA portal and consider the same as the date of issuance. Whether upload of the Section 148 Notice on the My Account of the assessee on the E-filing portal is valid transmission under the Act of 1961? - We hold that, in order for this mode of transmission i.e. uploading of the Notices in the E-filing portal of the assessees, to be considered valid service, the Department should have issued a real time alert as provisioned in the aforementioned Section 144(B)(6)(ii)(a) of the Act of 1961. Since, the prescribed mode of service is not followed it is akin to no due despatch of Notices, therefore it cannot be said that the Notices were validly issued. However, since the assessees in the present case did become aware of the Notices later and the assessment proceedings in their cases are still pending, we are not inclined to quash these Notices.It has come on record that the ITBA records the time and date when the E-filing portal is accessed by the assessee, so the first date on which the Notices were accessed by the assessees is duly available. This date will be considered by the JAOs as the date of issuance of Notices by the JAOs. Illustratively, in W.P the Notice was never served on the assessee, instead the assessee claims that he became aware of the same on 23rd November, 2021 while checking his E-filing portal, the JAO is directed to verify the date on which the Notice was first viewed by the assessee, and consider the same as the date of issuance. Disposal of these Writ Petitions with the following directions: Category A : The Notices falling under category A , which were digitally signed on or after 1st of April, 2021, are held to bear the date on which the said Notices were digitally signed and not 31st March 2021. The said petitions are disposed of with the direction that the said Notices are to be considered as show-cause-notices under Section 148A (b) of the Act as per the directions of the apex Court in the Ashish Agarwal (Supra) judgment. Category B : The Notices falling under category B which were sent through the registered e-mail ID of the respective JAOs, though not digitally signed are held to be valid. The said petitions are disposed of with the direction to the JAOs to verify and determine the date and time of its despatch as recorded in the ITBA portal in accordance with the law laid down in this judgment as the date of issuance. If the date and time of despatch recorded is on or after 1st of April, 2021, the Notices are to be considered as show-cause-notices under Section 148A (b) as per the directions of the apex Court in the Ashish Agarwal (Supra) judgment. Category C : The petitions challenging Notices falling under category C which were digitally signed on 31st of March 2021, are disposed of with the direction to the JAOs to verify and determine the date and time of despatch as recorded in the ITBA portal in accordance with the law laid down in this judgment as the date of issuance. If the date and time of despatch recorded is on or after 1st of April, 2021, the Notices are to be considered as show-cause-notices under Section 148A (b) as per the directions of the apex Court in the Ashish Agarwal (Supra) judgment. Category D : The petitions challenging Notices falling under category D which were only uploaded in the E-filing portal of the assessees without any real time alert, are disposed of with the direction to the JAOs to determine the date and time when the assessees viewed the Notices in the E-filing portal, as recorded in the ITBA portal and conclude such date as the date of issuance in accordance with the law laid down in this judgment. If such date of issuance is determined to be on or after 1st of April 2021, the Notices will be construed as issued under Section 148A (b) of the Act of 1961 as per the Ashish Agarwal (Supra) judgment. Category E : The petitions challenging Notices falling under category E which were manually despatched, are disposed of with the direction to the JAOs to determine in accordance with the law laid down in this judgment, the date and time when the Notices were delivered to the post office for despatch and consider the same as date of issuance. If the date and time of despatch recorded is on or after 1st of April, 2021, the Notices are to be construed as show-cause-notices under Section 148A (b) as per the directions of the apex Court in the Ashish Agarwal (Supra) judgment. Notices sent to unrelated e-mail addresses: The petitions challenging Notices which were sent to unrelated e-mail addresses are disposed of with the direction the JAOs to verify the date on which the Notice was first viewed by the assessee on the E-filing portal and consider the same as the date of issuance. If such date of issuance is determined to be on or after 01st April, 2021, the Notices will be construed as issued under Section 148A (b) of the Act of 1961 as per judgment in Ashish Agarwal (Supra). The Notices which in accordance with the law laid down in this judgment has been verified by the JAOs to have been issued on or after 01st April 2021 and until 30th June, 2021 shall be deemed to have been issued under Section 148A of the Act of 1961 as substituted by the Finance Act, 2021 and construed to be show-cause notices in terms of Section 148A(b) as per the judgment of the apex Court in Ashish Agarwal (Supra) and the JAOs shall thereafter follow the procedure set down by the Supreme Court in the said judgment. 2022 (9) TMI 1383 Deduction u/s 80(I) - scope of the word derived and the word industrial undertaking - applicability of the words derived from an industrial undertaking as mentioned u/s 80(I) - whether the interest paid on delayed payments form part of profits and gains derived from an industrial undertaking? - HELD THAT:- Section 80HH of the I.T. Act, which deals with deductions in respect of the profits and gains from newly established industrial undertakings or Hotel business in backward areas also contains the phrase profits and gains derived from an industrial undertaking. The word derived has been construed by the Privy Council in CIT vs. Raja Bahadur Kamakhaya Narayan Singh [ 1948 (7) TMI 1 - PRIVY COUNCIL] Hon ble Supreme Court in Pandian Chemicals Ltd. [ 2003 (4) TMI 3 - SUPREME COURT] observed that the word derived from in Section 80-HH must be understood as something which has direct or immediate nexus with the appellant s industrial undertaking. The fact situation in the case on hand also relates to payment of interest on delayed payments of sale proceeds to the assessee. As observed in the Gujarat High Court that there are two methods of realizing sale consideration, the object being to realise sale proceeds at the earliest and without delay. To avoid any loss to the assessee on account of the delayed payments, for the goods supplied, two contingencies can be stipulated (1) charging little higher rate or (2) collecting interest on delayed payments. By this, the transaction would not be incidental or different. In our view, it forms part of the same transaction as the amount due for the goods sold is being paid with some delay for which an interest is being collected. Applying the ratio laid down in the above judgments to the case on hand, it is clear that there is direct nexus between the interest received, goods sold and the payments made including interest for the goods sold. Hence, it can be said that the profits and gains derived was from the business of the assessee and accordingly the interest received on delayed payments for the goods supplied/sold would be entitled to relief of exemption u/s 80(I) of the I.T. Act. Appeal allowed. 2022 (9) TMI 1382 Reopening of assessment u/s 147 - Eligibility of reasons to believe - Period of limitation - HELD THAT:- Seeing as the assessment framed originally was under scrutiny, the Assessing Authority could proceed to re-assess the income u/s 147, only if he is in a position to, and does, establish that the alleged escapement is on account of the petitioner having failed to make a full and true disclosure at the first instance. A perusal of the reasons would indicate that there is no tangible material that has been found by the Assessing Authority, post assessment, to lead to a conclusion that the original disclosure made by the petitioner was either incomplete or untrue. In fact, the only material referred to in the reasons, is the assessment order itself in which the depreciation schedule, the rates of depreciation and the claim of the petitioner in regard to depreciation have been discussed in detail. As transpires that all materials referred to in the reasons flow from the materials on record and in such circumstances, it is more than apparently clear that there has been no compliance of the statutory precondition as set out in the proviso to Section 147, in this case. The impugned proceedings of assessment having been initiated beyond the period of four (4) years from the end of the relevant assessment year are clearly barred by limitation. 2022 (9) TMI 1381 Revision u/s 264 - Period of limitation - challenging the proceedings issued for the assessment year 2017-18, the petitioner preferred an appeal before the second respondent. Pending appeal, an application for revision, intimation under Section 143(3) of the I.T. Act came to be made under Section 264 - Whether an application under Section 264 of the I.T. Act cannot be entertained pending appeal, an order came to be passed rejecting the request for revision of intimation? - HELD THAT:- Commissioner cannot revise an order under Section 264(4) where an appeal is filed against an order to the Deputy Commissioner (Appeals) or to the Commissioner (Appeals) or to the Appellate Tribunal or where the order is pending on an appeal before the Deputy Commissioner (Appeals) or where the order has been made subject, of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal. Having regard to the above, the question of Commissioner (Appeals) considering the request of the petitioner would not arise. Petitioner would submit that a direction may be given to the first respondent to consider the revision of the petitioner under Section 263 on merits, by treating the appeal filed by the petitioner as withdrawn. It is to be noted here that an order under Section 264 is required to be passed within a period of one year from the end of Financial Year, in which, the application is made by the petitioner for revision. In the instant case, last date of passing of order was 31.03.2022. That being the position, the question of giving a direction to the Commissioner for passing of an order under Section 264 of the I.T. Act beyond the said period would not arise. Hence, we are of the view that such a request cannot be granted. Having regard to the provision of law referred to above, an order cannot be passed by treating something which is not in existence. Hence, the first relief sought for by the petitioner in the writ petition cannot be granted. Direction to the second respondent to decide the appeal filed by the petitioner by considering the application for withdrawal of petitioner and to dispose of the appeal expeditiously - At first blush, the request made by the petitioner appeared to be quite probable, but a close perusal of the provisions of the Act and the counter filed would show that even if the request of the petitioner for withdrawal of the appeal is accepted, a direction to the Commissioner (Appeals) to pass an order under Section 264 cannot be granted for the reasons stated supra. However, the relief sought for by the petitioner for expeditious disposal of the appeal can be considered, and accordingly a direction is given to the appellate authority to disposal of the appeal in accordance with law, as early as possible. We feel that it would be just and proper for the petitioner to get the Appeal adjudicated on merits before the Appellate Authority. 2022 (9) TMI 1380 Reopening of assessment u/s 147 - order under Clause (d) of Section 148A - As argued procedure as required for issuance of notices and order under Section 148A(d) of I.T. Act are not in accordance with law - HELD THAT:- Ascertaining the e-mail of the assessee, the order under Clause (d) of Section 148A a notice under Section 148 of the I.T. Act was also sent to the e-mail address of the assessee on 12.04.2022 and the same has been received, which is admitted by the petitioner. From the above averments in the counter, coupled with the provisions of the Act, it is very clear that the petitioner is having an opportunity of explaining his stand, in the proceeding initiated pursuant to the notice under Section 148 of the I.T. Act. In fact no prejudice is caused to the petitioner by the acts of the respondents, if any. Having regard to the above, the petitioner can explain his stand to the authorities by making an application, if not already made, within a period of four (4) weeks from today, more particularly, with regard to the substantial amount lying in the account, with the PAN number AACFV4149H. Accordingly, the writ petition is disposed of. There shall be no order as to costs. 2022 (9) TMI 1379 Reopening of assessment u/s 147 - as no assessment orders are passed under sub clause (4) to section 144C - Assessee case was referred to the TPO u/s 92CA and the TPO inturn, passed an order under section 92CA (3) - whether the Assessing Officer can issue notice under section 148 of the Act when the Assessing Officer has not passed an assessment order under section 144C(4)? - HELD THAT:- The basic requirement for invocation of section 147 is that the assessing officer has the reason to believe that income chargeable to tax, had escaped assessment; and after recording the reasons for reopening the assessment, the assessing officer has to issue notice under section 148 to the assessee. In the present case, the return of income filed by the assessee, was subjected to scrutiny. As there were international transactions involved, the case was referred to TPO, for determining the Arm's Length Price, who in turn filed his report, and based on the report of the TPO, the respondent passed the draft assessment order. Thereafter, the assessing officer, after having found that certain income had escaped assessment, reopened the assessment. Admittedly, the notice under section 148 was issued to the appellant within the period of limitation and the same was also not put to challenge by the appellant / assessee. But, what was challenged in the writ proceedings by the appellant is the rejection of their objections to the said notice by the respondent. While so, it cannot be said that the reassessment proceedings initiated by the assessing officer under section 147 of the Act, without completing the original assessment, is not proper. Further, there is no embargo under section 147 of the Act, to issue notice under section 148, where assessment order has not been passed, after starting scrutiny proceedings; and section 144C(4) only states that the assessing officer has to pass an assessment order in accordance with the provisions of the Act and it nowhere states that section 148 notice can be issued only after passing an assessment order. Therefore, the learned Judge has rightly concluded that the assessing officer is empowered to invoke section 147 of the Act, if he has reason to believe that the income chargeable to tax escaped assessment, in the cases, where no assessment orders are passed under sub clause (4) to section 144C. As rightly contended by the learned senior standing counsel appearing for the respondent, as per Explanation 2 of section 147, the Assessing Officer is free to reexamine correctness of a regular assessment and decide whether the tax assessed, rate applied, relief and allowances granted, etc., are in terms of the provisions of the Act and if not to revise the assessment in terms of section 147 of the Act. In the light of the same, the assessing officer, who has reason to believe that certain income chargeable to tax, has escaped assessment, reopened the assessment by issuing notice under section 148 of the Act to the appellant. As such, it cannot be stated that the Assessing Officer initiated the reassessment proceedings by issuing notice under section 148 to the assessee for rectifying the lapses of not passing the final assessment order under section 144C(4) of the Act. This court is of the opinion that the order in justifying the reassessment proceedings initiated by the assessing officer under section 147 of the Act, after following the mandatory requirements of the Act, is perfectly correct and the same does not call for any interference by this court. - Decided against assessee. 2022 (9) TMI 1378 Recovery proceedings along with further interest on the principal amount - money was advanced to the defendant through the banking channels on the various dates - HELD THAT:- In the case at hand, the balance-sheets for the Financial Year 2015 2016, 2016 2017 and 2017 2018 clearly record the amount due and payable to the plaintiff in the respective financial years. The audited reports appear to have been filed in compliance with the statutory requirement contained in Section 44AB - It would be contextually relevant to note that in the balance confirmation letter dated 1st April, 2019 (P1/6) the defendant has clearly acknowledged the outstanding balance as of 1st April, 2019. The entries therein are supported by the Ledger Account (Exhibit-P1/8) maintained by the plaintiff. Institution of the suit on 29th March, 2022 thus appears to be within the statutory period of limitation. To conclude, the documents on record namely the Tax Deduction Certificate (TDS), the audited balance-sheet, balance confirmation letter, if read cumulatively, lead to a legitimate inference that the plaintiff has succeeded in establishing that the plaintiff had advanced the amount to the defendant and the latter had agreed to pay interest at the rate of 12% p.a. thereon. After repayment of a part of principal sum i.e. Rs.50,00,000/-, and the payment of interest, as evidenced by the TDS Certificates, as of 1st April, 2019, a sum of Rs.2,47,69,000/- remained due and payable. As the plaintiff s claim and documents have gone unimpeached, there is no other go but to pass a decree. Order - Suit stands decreed.The defendant do pay a sum of Rs.3,31,05,384/- along with further interest on the amount of Rs.2,35,00,000/- at the rate of 12% p.a. from the date of the institution of the suit till realization. 2022 (9) TMI 1377 Validity of assessment order - denial of natural justice - petitioner submitted reply to the show cause notice making several objections/submissions mentioned therein, but the authority without giving due opportunity of hearing and without considering the objections/submissions made in the reply, passed the impugned order - HELD THAT:- From bare perusal of record it is apparent that the show cause notice was issued on 26.03.2022 and in pursuance to which reply was filed by the petitioner on 27.03.2022. As the petitioner had already filed reply and the impugned order was passed after consideration of the reply, therefore, it cannot be said that no opportunity of hearing was given to the petitioner. As such the petition cannot be entertained on the ground of non-affording an opportunity of hearing and violation of principles of natural justice. As regards the other contention of the petitioner that the authority has not considered the grounds taken in the reply, also cannot be a tenable ground because it is well settled that if the order has been passed ignoring one or more grounds taken in the reply, the same cannot be a ground for invoking extraordinary jurisdiction of this court under Article 226/227 of the Constitution of India and such order can be assailed by way of alternative remedy of appeal provided under the relevant provision of the Income Tax Act, 1961. As the present petition was filed on 20.04.2022, i.e. within 20 days from the date of passing the assessment order dated 30.03.2022, therefore, if the petitioner files the statutory appeal within a further period of 30 days, the same shall be decided by the authority on merits, ignoring the question of delay in filing the appeal. 2022 (9) TMI 1375 Deduction u/s 80P(2) - Claim denied as assessee made a claim in the income tax return but for not filling up certain Schedules in the return correctly - Denial of natural justice as opportunity to substantiate its claim with necessary documentary evidences not given - HELD THAT:- As before denying such claim no opportunity has been given to the assessee as provided in the provisions of Section 143(1)(a) of the Act where the proviso states that No such adjustments shall be made unless any intimation is given to the assessee of such adjustments either in writing or in electronic mode and further provided that the response received by the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made. I find that the assessee was never given an opportunity to substantiate its claim with necessary documentary evidences. Even ld. CIT(A) did not entertain the claim of the assessee by giving a general finding. If the assessee has made a rightful claim it should not be denied without giving any opportunity of hearing to it to file necessary documents in support of its claim and if rightful claim has been made then denying of such claim merely on the basis of not filling up of certain Schedules in the income tax return will not be in the interest of justice. Restore all the issues raised in the instant appeal including that of claim of deduction u/s 80P(2) to the file of AO having jurisdiction over the assessee and direct him to examine/verify the claim of the assessee made for deduction u/s 80P(2) of the Act - Appeal of the assessee is allowed for statistical purposes. 2022 (9) TMI 1374 Addition u/s 68 - Unexplained cash credit - HELD THAT:- Pattern of deposits in bank account shows that there are certain cheque deposits, deposits in cash and regular withdrawal of amount. The frequent deposit and withdrawal shows that the bank account in dispute was used for unreported business transactions. As recorded above assessee before us claimed that the assessee was doing a business of plastic items, thus, considering the submissions of assessee, we find merit in his submission that the assessee was doing some business activity, though it was not disclosed to the department. Taxing the entire credit is not justified, thus, it would be justified if only profit element in such business activities from where the assessee generated the credit found in the bank account. The lower authorities have confirmed the entire aggregate of deposits and have not considered the withdrawal. The Hon ble Gujarat High Court in CIT Vs Pradeep Shantilal Patel [ 2013 (11) TMI 1646 - GUJARAT HIGH COURT] held that where assessee admitted that cash deposit pertains to his retail business but details and nature of business were not forthcoming from record, considering the total turnover of assessee, net income had to be determined under Section 44AF. The Coordinate Bench of this Tribunal in Smt. Krushangi Keyur Bhagat [ 2018 (9) TMI 2093 - ITAT SURAT] almost on similar set of facts wherein cash credit was found credited in the bank account of that assessee, the assessee took plea before lower authorities that transaction in bank account pertained to her textile business. The assessee claimed that only peak credit appearing in the bank account should be considered which was not accepted and the amount after reducing the cheque deposits, remaining was treated as unexplained. On appeal before Tribunal, the plea of assessee that amount credited in the bank was a part of textile business and only profit element @ 5% of total deposit including of credit by way of cheque was considered as a profit element on the total deposits. Entire amount of deposits cannot be considered for addition, when the assessee is specifically contended before ld CIT(A) that the credit in the bank account if his unreported income. Therefore, 8% of total addition is considered as profit from such business activities. Accordingly, the Assessing Officer is directed to consider 8% of total deposit - In the result, ground raised by assessee is party allowed. 2022 (9) TMI 1373 Rectification u/s 154 - income to be revised under the rectification petition - assessee that while e-filing the original Return of Income by mistake the gross total income is typed as Rs. 55,40,001/- and after paying taxes of Rs. 30,629/-. - Revised Return Filled for rectification - rectification petition was dismissed by the assessing officer on the ground that Revised Return ought to have been filed within time limit prescribed under the Act - HELD THAT:- In the present case at hand, the assessee has not made any new claim or deduction which require to file Revised Return. The grievance of the assessee is that the typographical error which has happened while filing the e-return. Thus, this is a clear case of mistake apparent on record which is very well curable/rectifiable u/s. 154 - Thus both the assessing officer and the Ld. CIT(A) has not properly appreciated the provisions of law and acted arbitrarily against the simple and genuine case of typographical mistake. Lower Authorities ought to have considered the Form No. 16 issued by the School Authorities as well as the bank statements provided by the assessee, to show her salary income from the teaching profession. However none of the above records have been considered by the lower authorities and arbitrarily derived the assessee to come for the second stage of appeal before us. This kind of arbitrariness should be avoided in such a simple genuine case, where the assesse proved establishing the typographical mistake in the efiling return. Therefore the rejection of 154 petition is hereby set aside and we direct to delete the additions made in the hands of the assessee. - Appeal of assessee allowed. 2022 (9) TMI 1372 Bogus Short Term Capital Gain on sale of land - HELD THAT:- Remand Report received from the AO simply confirmed about the payments made by the assessee to the land owners as well as third parties by the assessee. AO has not taken any steps to verify the above details either from the 5 land owners or the remaining 10 third parties it is being suffered taxed in the respective hands. AO attempted to tax the entire consideration in the hands of the assessee, which is negativated by the CIT(A) after considering the facts in detail. Therefore we do not find any infirmity in the findings of the ld. CIT(A) that the assessee is an entry provider only and was involved in accommodation entry business and has been rightly taxed at 0.5% for commission income on the deposits in the bank account which includes the sale consideration and directed to delete the above addition on account of business income. Thus the Grounds raised by the Revenue devoid of merits and the same is hereby rejected. Appeal filed by the Revenue is hereby dismissed. 2022 (9) TMI 1371 Disallowance of deduction u/s 54/54F - since the assessee had claimed deduction on account of investment in property purchased during the year but had failed to follow the terms and conditions in law therefore the deduction claimed by the assessee needed to be taxed in the impugned year - Assessee not depositing the capital gain earned in the capital gain account scheme of the Bank as required by law before the due date of filing return of income of A.Y 2011-12 ,in which the deduction was claimed - HELD THAT:- For the violation the claim of deduction in the said year itself, i.e A.Y 2011-12, should have been denied. Merely because the assessee files his return for that year belatedly, i.e during the impugned year, does not mean that the deduction claimed will be added to the income of the assessee for the impugned year. The violation of conditions having taken place in A.Y 2011-12 itself, the deduction should have been rightfully denied in that year alone. Even otherwise we find that the assessee in any case has been denied the claim of deduction in A.Y 2011-12, wherein the AO has treated the long term capital gain returned by the assessee on sale of asset as short term capital gain and denied benefit of deduction u/s 54 against the same. Copy of the assessment order for A.Y 2011-12 dated 11/12/2018 was placed before us. The same deduction cannot be denied and added to the income of the assessee in two years. In view of the above therefore the addition on account of denial of deduction u/s 54 is directed to be deleted. Appeal of the assessee is allowed. 2022 (9) TMI 1370 Rectification of mistake u/s 154 - Credit of TDS - HELD THAT:- As submitted that the appeal filed by the assessee before the learned CIT(A) and the impugned order passed by the CIT(A) disposing of the said appeal has become infructuous and urged that the same may be cancelled. After having perused the copy of the order passed by the Assessing Officer under Section 154 of the Act - copy of which is placed on record before us, we are inclined to accept the contention of the learned Counsel for the assessee. Even the DR has not raised any objection in this regard. We accordingly set aside the impugned order passed by the learned CIT(A) and allow this appeal of the assessee. 2022 (9) TMI 1369 Penalty levied u/s. 271(1)(c) - Disallowance of deduction u/s 35E as none of the income was proved by the assessee was earned from the business of prospecting for or extraction/production of mineral eligible to claim - HELD THAT:- It is seen from record that the assessee was granted mining lease for lignite for a period of 30 years in Bhavnagar District. There is also report from Gujarat Electricity Board and Mining Department, Government of Gujarat evidencing that the assessee is engaged in the prospecting activities for the minerals during the assessment year 2003-04. The assessee incurred necessary expenditures for this preliminary activities for the mining works and claimed u/s. 35E - assessee could not start commercial production within 5 years. The Co-ordinate Bench of this Tribunal has confirmed the disallowance u/s. 35E only on the ground that the assessee does not meet the parameters of eligibility prescribed within section 35E of the Act and the assessee also failed to commence the commercial production during the assessment year 2003-04. Lower Authorities failed to appreciate that the assessee has obtained mining rights from Government of Gujarat and the assessee also signed a letter of intent with Reliance Industries Ltd. for Development and sale of net electrical output generated to GEB. Thus it cannot be construed that inaccurate particulars have been furnished by the assessee to make a wrong claim u/s. 35E of the Act, thus does not warrant levy of penalty u/s. 271(1)(c) - It is undisputed fact that the lese of sale and leased back of LP Rotor Machines to GEB by the Assessing Officer but denied the benefit on the ground that no change of possession was taken place. Lower Authorities failed to consider that leasing activity is one of the objects of the assesse company and lease rent received has been treated as its business income and assessed to taxes. Consequently the assessee is entitled to claim depreciation on the leased machineries. The sale and leased back transaction entered into by the assessee with GEB which is nothing but an extension of financial assistance to GEB between two Public Sector Undertakings. In order to invoke the penalty proceedings under section 271(1)(c) of the Act, the Revenue should prove that the claim made was not sustainable in law and also the assessee had made a concealment of the particular income. In order to expose the assessee to penalty, the Revenue should show that there was contumacious conduct on the part of the assessee in suppressing the income in the return. The rejection of such a claim by the Appellate Tribunal does not amount to furnishing inaccurate particulars of income, thereby levying penalty u/s. 271(1)(c) of the Act as held by the Hon ble Supreme Court in the case of Reliance Petroproducts (P.) Pvt. [ 2010 (3) TMI 80 - SUPREME COURT] Hon ble Madras High Court in the case of CIT vs. Cholamandalam Investment Finance Co. Ltd. [ 2014 (3) TMI 774 - MADRAS HIGH COURT] held that where the A.O. failed to give independent finding that there was a deliberate design on the part of the assessee to inflate cost of acquisition so as to claim higher depreciation, penalty could not be imposed - thus penalty levied u/s. 271(1)(c) for furnishing inaccurate particulars of income is hereby deleted. - Decided in favour of assessee. 2022 (9) TMI 1368 Reopening of assessment u/s 147 - Unexplained gift receipt - reason to suspect or reasons to believe - assessee declared the gift received from his real brother in the statement - HELD THAT:- With respectful observation of the apex court that the vague reason should not be accepted. But the reason recorded by the ld. AO is not factually incorrect. The recent judgment of LaljibhaiKanjibhaiMandalia [ 2022 (7) TMI 639 - SUPREME COURT] held that formation of opinion and the reasons to believe recorded is not a judicial or quasi-judicial function but administrative in character.The information must be in possession of the authorised official on the basis of the material and that the formation of opinion must be honest and bona fide. It cannot be merely pretence. Consideration of any extraneous or irrelevant material would vitiate the belief/satisfaction. The authority must have information in its possession on the basis of which a reasonable belief can be founded that the person concerned has omitted or failed to produce books of accounts or other documents for production of which summons or notice had been issued, or such person will not produce such books of account or other documents even if summons or notice is issued to him - Reasons forming part of the satisfaction note are to satisfy the judicial consciousness of the Court and any part of such satisfaction note is not to be made part of the order. The question as to whether such reasons are adequate or not is not a matter for the Court to review in a writ petition. The sufficiency of the grounds which induced the competent authority to act is not a justiciable issue. The relevance of the reasons for the formation of the belief is to be tested by the judicial restraint as in administrative action as the Court does not sit as a Court of appeal but merely reviews the manner in which the decision was made. The Court shall not examine the sufficiency or adequacy thereof. Thus we find that no infirmity in the processing of reopening u/s 148 and in the order of the ld. AO u/s 147 of the Act. The issue was properly discussed by the ld. CIT(A) in his order. We find no infirmity in the order of the ld. CIT(A). The Ground No.1, of the assessee rejected. 2022 (9) TMI 1367 Assessment u/s 153A - Addition u/s 68 - unexplained credits of LTCG - Addition of amount of commission paid for acquiring such alleged bogus long term capital gain was also added u/s 69C - CIT(A) accepted the contentions of the assessee and held that no addition could be made as no incriminating material was found with respect to the Long Term Capital Gain by alleging the same as non-genuine - HELD THAT:- We have gone through the grounds of appeal raised by the revenue and it appears that the revenue has not challenged the findings of the ld. CIT(A) on the very legal ground decided by ld. CIT(A) against the revenue. Thus, it is clear that this legal aspect of the decision is not challenged by the revenue before us. Thus, it is undisputed that when there is no incriminating material no addition could be made in the order passed u/s. 153A of the r.w.s. 143(3) of the Act. Thus no addition can be made in the proceedings under section 153A in respect of the assessments which were completed prior to the date of search except based on some incriminating material unearthed during the search which was not already available to the AO. CIT(A) has after considering the detailed arguments of both the parties clearly taken a view that there is no incrementing material, no addition can be made for the assessment years which are already completed after making the proper enquiries by the AO, and those assessment cannot be allowed to again reframed merely based on the search and that too without any fresh evidence or any fresh material unearthed during search no fresh addition can be made on the issue which are already settled. Even, the ld. CIT(A) has based on the arguments of the assessee followed the jurisdictional High Court decision and Tribunals orders and even this coordinate bench decision is also binding on us in the absence of any contrary judgement. Whether section 153A mandates the existence of incriminating material in respect of the assessments that have concluded/are not pending on the date of search in order to assess or re-assess them? - In our considered view the said issue is no longer res integra as the same has already been decided by a Division Bench of the Hon'ble Supreme Court in the case of CIT v. Sinhgad Technical Education [ 2017 (8) TMI 1298 - SUPREME COURT] After having recorded the satisfaction, as per the requirement of section 153C(1) of the Act, the books of account or documents or assets seized shall be handed over to the Assessing Officer having jurisdiction over the other person and the said officer shall issue notice and assess or re-assess the income of the other person in accordance with the provisions of section 153A of the Act. It will thus be seen that once the requirement of satisfaction wherein the Assessing Officer of the searched person records that documents belong to the other person is met, the assessment or reassessment of the income of the other person shall have to take place in accordance with section 153A of the Act. Assessment of concluded/ not pending assessment on the date of search to be based on incriminating material. Section 153A of the Act was the subject matter of interpretation by the Hon'ble Delhi High Court in the case of Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] and several other High Courts across the country which uniformly held that the existence of incriminating material, in respect of the assessment years whose assessments stood concluded on the date of search, is a mandatory requirement to assess or reassess those years. The requirement that the incriminating material to have the corelation to the particular addition sought to be made is a logic that will hold good not only for Section 153 C of the Act but in relation to Section 153A of the Act as well. Consequently, in our considered view we do not find any error having been committed by the ld. CIT(A) in accepting the plea of the Assessee that there is no incriminating document which was seized in the course of search relating to the addition sought to be made on account of the long term capital gain reflected in the return of income filed by the assessee. Therefore, the jurisdictional requirement of Section 153 A of the Act was not satisfied. - Decided against revenue. Protective addition based on Pen drive found in search - As submitted that it is respective parties who were demanding, further interest @ 2.4% in addition to what has been recorded in the books. The additional interest which the assessee or its group concern never paid and there is no evidence of any such further sums paid and found as paid in the course of search - HELD THAT:- Similar issue we have decided [ 2022 (9) TMI 1334 - ITAT JAIPUR] where in the arguments, facts are similar in group search case and the bench noticed that interest which is actually paid is duly recorded in the books of accounts and there is no other material which is found even the person under whom possession the PAN Drive is found his statement is not recorded. This action itself shows that department find this evidence as dump documents and is not evidence relied upon. The statement of the person from whom the evidence his found is also not checked on its correctness and veracity. Therefore, based on the finding that the revenue has not made any substantive addition in the persons in whose name the interest as alleged addition income is not added and the ld. AR of the assessee categorically proved that there is no incriminating other document found recording the payment of the additional interest. Based on these observations we vacate the disallowance made for an amount made on protective basis. - Decided against revenue. 2022 (9) TMI 1366 Deduction u/s 80IB - Disallowance of Deduction as project was not completed as work-in-progress was reflected in the profit and loss account - CIT-A deleted the addition - Whether provisions of clause (e) (f) of section 80IB(10) are not applicable to the flats booked prior to 01.04.2010, even if the sale of the said flats was made after 01.04.2010 (date of insertion of clause e f)? - AO observed that as per l0CCB report the housing project was completed on 30.06.2010 but in the profit loss account work-in-progress was appearing and thus wrong information was submitted by the assessee with regard to completion of project - HELD THAT:- There are two phases where the assessee company is engaged both the projects are of residential units, where the 1st Phase is consisted 450 units and 6 shops. This phase-1 was eligible for deduction u/s 80IB(10) of the Act where the project is completed as on 30.06.20210 and the 2nd phase of the project is not eligible for deduction where the phase is under construction during the relevant period of A.Y 2013-14. - CIT(A) has deleted the disallowance taking into consideration the proceeding to assessment year that the claim of the assessee company u/s 80IB(10) was duly examined at the assessment stage and deduction was accordingly allowed except in respect of small proportionate amount for sale of multiple units to the same individual in alleged violation of the condition contained in section 80IB (10) (e) (f) introduced by the Finance Act 2009 w.e.f 01.04.2010. Observing the facts and circumstances of the case that the legal issue of clause (e) (f) is prospective in nature. Taking into consideration, the A.Y 2011-12, applicability of section 80IB(10) and clause (e) (f) held that the amendment introduced clauses (e) (f) and u/s 80IB(10) were prospective in nature. CIT(A) has placed judicial precedence concerning to different two places introduced from time to time in section 80IB(10), wherein the computing the tax for the A.Y 2013-14 did not consider the met credit available to the assessee and that in any addition is sustained and in respect of which further deduction u/s 80IB(10) of the Act is not allowed and based on the identical issue has already been examined by the ld. CIT(A) for the A.Y 2012-13 wherein the issue has also been decided in favour of the assessee. Considering the legal issues, the ld. AR for the assessee has placed reliance on various Supreme Court, High Courts and Co-ordinate Benches which specifically held that clause (e) (f) of the Act introduced in section 80IB(10) of the Act by Finance Act w.e.f 01.04.2010 were prospective in application. Completion of project whether belongs to Phase-01 and Phase-02 from the records available - The statements is showing the details of all flats sold in the project during the different years. It is to be noted that the similar disallowances were made for the assessment year 2011-12 and the assessee has not challenged these additions in this year and has accepted the disallowances. DR argued that the similar circumstances is required to be checked whether that exceed or not and since the issue has not been seen in that light and the ld. CIT(A) as merely followed the order without going into the merits of the facts that the assessee herself accepted the disallowances in past. Therefore, in light of the argument advanced by the ld. DR, we are of the view that looking to the facts before us that the assessee has incurred expenditure after the project is completed whether the terms and conditions as required U/s 80IB is property fulfilled by the assessee or not is required to be checked. AO in the light of the facts and circumstances of the advanced by the ld. DR before us and looking to the interest of justice. The ld. AO is required to check afresh about the admisibilty of the deduction claimed by the assessee u/s 80IB of the Act. We do not give any direction as to the availability of the claim the AO is directed to apply afresh his mind looking to the various aspect argued by the ld. DR with that direction the appeal of the Revenue is partly allowed. 2022 (9) TMI 1365 Depreciation on Toll Road - intangible asset - to be allowed @ 15% or 25% - HELD THAT:- As it is evident that such a claim of the assessee has been allowed in the previous assessment years and therefore, it cannot be denied that the assessee was under a bona fide belief that it has correctly claimed deduction of depreciation on toll road by treating the same as plant and machinery at 15%, in view of the consistent findings in its own case. However, subsequently, due to change in legal position, the claim of deduction of depreciation by treating the road as plant and machinery was disallowed on the basis that assessee cannot be treated as owner of the toll road. The coordinate bench of the Tribunal in assessee s own case in ACIT vs M/s West Gujarat Expressway Ltd. [ 2015 (5) TMI 305 - ITAT MUMBAI] for assessment year 2009 10, accepted the alternative plea of the assessee and in Para 28 of its order held that assessee is entitled to collect toll tax, which is an intangible commercial right under section 32(1)(ii) of the Act, at the rate as has been prescribed under the relevant rules. It is the golden rule of tax, as laid down in Article 265 of the Constitution of India that no tax can be collected except by authority of law. It is also well established that if the assessee, under a mistake, misconception or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate tax dues are collected. From the record, it is evident that it is not the case where the Revenue is alleging that rate of depreciation in case of intangible assets is 15% instead of 25% as claim by the assessee. Thus, once the right to collect the toll tax has been held to be intangible asset by the CIT(A), by following the judicial precedents in assessee s own case, we are of the considered view that the learned CIT(A) erred in denying deduction of depreciation at the rate of 25% and restricting the same to 15% by referring to the claim made under the return of income. We are further of the view that once asset has been characterised under the particular head i.e., intangible asset in the present case, all the other consequences including the rate at which depreciation is allowable under the law follows. Therefore, in view of the above, we direct the AO to grant depreciation on toll road at the rate applicable in case of intangible assets i.e. at 25%. As a result, grounds raised by the assessee are allowed. Taxability of interest income - whether interest income is linked to the business activities of the assessee? - HELD THAT:- We find that while deciding similar issue in assessee s own case for assessment year 2009 10, the Co-ordinate Bench of the Tribunal [ 2015 (5) TMI 305 - ITAT MUMBAI] held that interest income from fixed deposit is business income. - Decided against revenue. 2022 (9) TMI 1364 Assessment u/s 153A - Addition of client code modification - Addition on account of fictitious loss obtained by the assessee by misuse of CCM facility made by the AO - HELD THAT:- As undisputed that when there is no incriminating material was found no addition could be made in the order passed u/s. 153A of the r.w.s. 143(3) of the Act. Addition made on account of alleged client code modification there were search actions at the business premises of the assessee company and at the residence of the director of the company. In this search there is no incriminating evidence or any connected information found and seized is also not noted and reflected. It is the only the third-party information based upon which the AO has made the addition on account of Client Code Modification on the ground that the assessee has shifted its profit to other clients or shifted loss to its sister concerns as alleged by the I CI Mumbai. The ld.CIT(A) deleted the addition on the ground that additions NOT based on incriminating material found during the search is settled based on that technical ground deleted the addition. The requirement that the incriminating material to have the co-relation to the particular addition sought to be made is a logic that will hold good as it is held in number of cases decided by this coordinate bench and the jurisdictional High Court. Consequently, in our considered view we do not find any error having been committed by the ld. CIT(A) in accepting the plea of the Assessee that there is no incriminating document which was seized in the course of search relating to the addition sought to be made on account of the CCM reflected in the return of income filed by the assessee. Therefore, the jurisdictional requirement of Section 153 A of the Act was not satisfied. Even on merits assessee submitted various decisions that without any finding merely on the third party information no addition can be made. We find, identical issue come up in the case of PCIT Central -3 Vs. Jaypee Financial Services Ltd. [ 2021 (2) TMI 1186 - DELHI HIGH COURT] - we are of the considered opinion that there is no perversity in the order of the CIT(A) deleting the addition. Accordingly, the same is upheld and the grounds raised by the revenue are dismissed. In the result the appeal of revenue dismissed. PEN drive find during the search proceeding no questions raised to the parties not only that the employee from this PEN drive found, his statement is also not recorded - The amount in dispute is nothing but the amount of the additional interest demanded and not paid by the assessee as claimed by the ld. AR of the assessee. The ld. DR did not oppose this contention and has also not pointed out any incriminating material or a statement on this PEN drive. This based on these set of facts before us and based on the decision relied upon by the ld. AR and on careful consideration of the said decision with that of the facts in this case, we hold that the addition is without any supporting contentions, enquiry or confirmation of the party we have received the additional interest or not. The AO is supposed to point out the name of the assessee who may be the owner of such income. It is common ground that in the present case, till this date, the authorities below did not bring on record any material to show that the unexplained expenditure in question really belongs to some other assessee as income or not. The ld. DR honestly conceded that till this date no proceedings in respect of the disputed income have been made against any other assessee and the same is also confirmed by the AO in the report presented before us. There cannot be any unexplained expenditure without making the unexplained income and Revenue did not controvert the argument of the AR of the assessee and has also not supported by any judicial decision so as to confirm the order of the lower authorities. Thus, the interest which is actually paid is duly recorded in the books of accounts and there is no other material which is found even the person under whose possession the PAN Drive is found his statement is not recorded. This action itself shows that department find this evidence as dump documents and is not evidence relied upon. The statement of the person from whom the evidence his found is also not checked on its correctness and veracity. Therefore, based on the finding that the revenue has not made any unexplained income addition in the persons in whose name the interest as alleged addition income is not added and the ld. AR of the assessee categorically proved that there is no incriminating other document found recording the payment of the additional interest paid by the assessee and thus the addition made on account unexplained expenditure is required to be deleted. Appeal of assessee allowed. 2022 (9) TMI 1363 Disallowance of expenses u/s 40(1)(i) - non deduction of TDS overseas group charges - HELD THAT:- Upon careful consideration, we find that the issue is covered in favour of the assessee by a series of ITAT order in assessee s own cases [ 2019 (1) TMI 1990 - ITAT DELHI] , [ 2020 (9) TMI 1270 - ITAT DELHI] , [ 2022 (3) TMI 1424 - ITAT DELHI] and [ 2018 (2) TMI 1628 - ITAT DELHI] held that payment by way of reimbursement of expenses is not taxable in India. In view of the fact that the amount paid by the assessee to non-residents is not chargeable to tax in their hands and, as such, the provisions of section 195 of the Act are not attracted, there can be no question of applying section 40(a)(i) for making disallowance in the hands of the assessee. - Respectfully following the precedent, we uphold the order of ld. CIT (A) on this issue. Disallowance of Domestic payments u/s 40(a)(ia) in respect of payment to local vendors on behalf of group entities - HELD THAT:- As appellant has explained that the appellant company has deducted Tax Deducted at Source(TDS) on the expenditure which has been included in the total amount of group charges. Further, the details of said expenses along with the TDS deducted has been enclosed as Annexure 4 and relevant TDS certificates Since the appellant has deducted TDS on the expenses AO is directed to delete the addition u/s 40(a)(ia). - Decided against revenue. 2022 (9) TMI 1362 Disallowance on account of bonus payable - Amount mistakenly mentioned by the Chartered Accountant while filing the Tax Audit Report in the wrong column, the same had been paid within time as per law - admission of additional evidences - HELD THAT:- We agree with the contention of the Ld. AR that the revised Tax Audit Report is a vital piece of evidence which goes to the very root of the matter and should be admitted for the furtherance of cause of justice. Accordingly, admit the additional evidence and since the lower authorities have not had any occasion to examine the same - expedient to restore the issue to the file of the Assessing Officer with a direction to adjudicate the issue afresh after duly considering the revised Tax Audit Report which I have admitted as additional evidence. The AO is further directed to grant adequate opportunity to the assessee prior to the passing of order in accordance with law. Appeal of the assessee stands allowed for statistical purposes. 2022 (9) TMI 1361 Nature of expenses - R D expenses - expenses of capital nature with enduring benefits OR revenue expenses - HELD THAT:- On examination of the details, we find that these expenses are incurred during the normal course of business. The expenditure such as annual technology licence fee, technical support services, assistance in canvassing orders, marketing services which are calculated and paid on the basis of annual sales made by the assessee every year in accordance with the agreement entered between the parties cannot be treated as capital expenditure. AO misread the head R D expenditure which in fact was a manufacturing expenditure. On this issue, we are guided by the judgment of Travancore Sugar and Chemical Ltd. [ 1966 (9) TMI 44 - SUPREME COURT] wherein it was held that whenever an amount is paid based on a percentage of turnover or profit, it would have no relation to the capital value of the assessee. The facts in the instant case reveal that the payments have made for utilization of services on annual basis taking the turnover as baseline for computation and since no augmentation of the capital asset or transfer of technology or any right thereof accrued to the assessee, we hold that the expenditure ought to be treated as revenue in nature. Disallowance of Bad Debts - The payment has been made by the railways after deducting the late delivery charges, and other taxes and provision has been made in the books on account of deduction with regard to late deliveries. The said amount has already been passed through the profit loss account of earlier respective financial years under the head of provisions for bad and doubtful debts and had been disallowed while computing the income of the assessee u/s. 28 of the Act and the assessee has claimed the said amount as deduction directly in the computation of income as the amount was added back directly in the computation of income only in earlier assessment years. The assessee has furnished complete details of deductions made by the railway from the sales bill giving invoice wise deductions and nature of deduction. It is also fact on record that an amount directly shown in the computation of income as transfer from provisions for doubtful debts as the amount has already been debited to the profit loss of the earlier years which has been added back by the assessee while calculating the taxable income. The balance amount pertain to the deduction made by the railways on the invoices raised for the year. Hence, it can be held that the amounts have been duly accounted under sales in the books of accounts, the due provisions have been made and when the recovery from the contractor/supplier have been made and liquidated damages are levied for late deliveries, they cannot be treated as penal in nature. Hence, the appeal of the revenue on this ground is liable to be dismissed. Gift and Presents - details of expenses by the AO that expenses have been incurred on marriage and gifts of personal in nature - We find that the ld. CIT(A) has diligently worked out the details of the gifts and bills and confirmed an amount of Rs. 7,74,238/- out of the disallowance of Rs. 12,35,000/-. The relief given by the ld. CIT(A) was after due verification and corroboration. Hence, we decline to interfere with the order of the ld. CIT(A). Appeal of the Revenue is dismissed. 2022 (9) TMI 1360 Disallowance on account of bonus payable - Amount mistakenly mentioned by the Chartered Accountant while filing the Tax Audit Report in the wrong column, the same had been paid within time as per law - HELD THAT:- We find that it was due to an inadvertent error of the C.A. of the assessee, that he (the CA) mentioned the amount of bonus paid to employees, under clause 20(a) of the Tax Audit Report, i.e., amount payable to the employees as bonus or commission where such sum was otherwise payable to him as Profits or Dividend whereas, the payment had actually been made to labourers under the Payment of Bonus Act. This inadvertent mistake was tried to be rectified by the C.A. by filing certificate (ABP page 52) along with details (ABP-53). The same was, however, not accepted. The revised Tax Audit Report (ABP pave 20 - 51), we find, is a vital piece of evidence and it requires to be admitted as additional evidence, since it would be necessary for a just and proper decision of the matter. Accordingly, the application for additional evidence is allowed and the revised Tax Audit Report (ABP pages 20-51) is taken on record. The matter is, accordingly, remitted to the file of the AO, to be decided afresh in accordance with law, on taking into consideration the aforesaid revised Tax Audit Report, and after affording due and adequate opportunity of hearing to the assessee. The assessee, no doubt, shall cooperate in the fresh proceedings before the AO. Appeal of assessee allowed for statistical purposes. 2022 (9) TMI 1359 Rectification of mistake u/s 154 - Delayed Employees contribution to the Employee Provident Fund and Employee State Insurance Fund - addition u/s 2(24)(x) r/w s. 36(1)(va) - amount being deposited before the due date of filing the return of income u/s. 139 (1) - scope of amendment - HELD THAT:- In view of the foregoing, no question of the said Explanations being read as retrospective, so as to apply for the relevant year, sustaining the impugned additions, which therefore fail. This is, however, subject to any decision/s by the Hon'ble jurisdictional High Court, which would, where so, hold, even justifying a rectification u/s. 154/254(2), even where rendered after the date of the order sought to be rectified. See SAURASHTRA KUTCH STOCK EXCHANGE LTD [ 2008 (9) TMI 11 - SUPREME COURT] and SMT. ARUNA LUTHRA. [ 2001 (8) TMI 84 - PUNJAB AND HARYANA HIGH COURT] No such decision has been found, or otherwise pointed out by the parties, as was the case before the Tribunal in Nikhil Mohine [ 2021 (11) TMI 927 - ITAT JABALPUR] any such decision, even if discovered later, may operate to amend this order, or the order giving appeal effect thereto, to bring it in conformity or agreement with the said decision/s, of course, after allowing a fair opportunity of hearing to the assessee. The impugned additions, therefore, could not have been made under the given facts and circumstances of the case, and are directed for deletion. Decided in favour of assessee. 2022 (9) TMI 1358 Non-deduction of TDS u/s 194C - Disallowance u/s 40(a)(ia) - nil tax liability of the payee - Scope of amendment to S. 40(ia) by Finance Act, 2010 by way of first proviso thereto - HELD THAT:- The Apex Court has in CIT vs. Calcutta Export Company [ 2018 (5) TMI 356 - SUPREME COURT] held the amendment to S. 40(ia) by Finance Act, 2010 by way of first proviso thereto as retrospective from the inception of the provision, i.e., w.e.f. AY 2005-06, being only toward mitigating a hardship to the tax payers and, thus, curative. Per the said proviso, the amount disallowed u/s. 40(a)(ia) shall be allowed for the year of payment, where it is deducted in a subsequent year, or where, though deducted, is paid after the due date specified u/s. 139(1). A second proviso was inserted by Finance Act, 2012, w.e.f. 01/4/2013, i.e., AY 2013-14 onwards, whereby the provision of sec. 40(a)(ia) shall not apply even where assessee fails to deduct or deposit tax deductible at source where the assessee is not deemed to be in-default under the first proviso to S. 201(1), which provision was simultaneously amended by insertion of the first proviso thereto, whereby the assessee, despite having failed to deduct tax at source in terms of Chapter-XVII would not be deemed to be in-default where the conditions listed therein are satisfied, being toward the satisfaction of his tax liability for the relevant year on the relevant sum by the payee-deductee. Assessee has before us made out a prima facie case by exhibiting nil tax liability of the payee, also claiming that the assessee has not claimed deduction in respect of the impugned sum for AY 2010-11, which becomes exigible in view of first proviso to S. 40(a)(ia). Regarding disallowace of 30% instead of 100% - HELD THAT:- A total relief is in any case more desirable and appropriate than a partial one. We, accordingly, consider it appropriate to restore the matter to the file of the AO to verify the facts and decide in accordance with law. 2022 (9) TMI 1357 Assessment u/s 153A - Admission of additional evidence by CIT - whether CIT(A) has erred in admitting the additional evidence in absence of fulfillment of conditions mentioned in Rule 46A of the Income-tax Rules, 1962 and in deleting the addition made on account of unsecured loan in spite of the failure of the assessee to establish the genuineness of the unsecured loan during the assessment as well as remand proceedings? - HELD THAT:- CIT-DR could not show us, from the first appellate order, which piece of evidence which was not before the AO was considered by the ld.CIT(A) while granting relief to the assessee in violation of Rule 46A of the IT Rules. Therefore, ground No.3 of the Revenue being devoid of merits is being dismissed. Findings of the CIT(A), wherein he granted relief to the assessee by following the judgement of the jurisdictional High Court of Delhi in the case of Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] - A search and seizure operation u/s 132 of the Act was carried out on the assessee on 08.07.2015 and as on the date of search, i.e., 08.07.2015, the assessment year 2010-11 was the year of completed assessment or unabated assessment. On being specifically asked from the CIT-DR, CIT-DR did not dispute the above noted facts and could not point out any incriminating material in the hands of the AO supporting the additions made by him in the assessment order dated 29.12.2017 passed u/s 153A r.w.s 143(3) - We are compelled to hold that the ld.CIT(A) was right in granting relief to the assessee by following the judgement of Kabul Chawla (supra) wherein their Lordships, speaking for the jurisdictional High Court, categorically held that when, on the date of search, the assessment already stood completed, therefore, no new incriminating material was unearthed during the search, no additions could have been made to the income already assessed in the hands of the assessee for AY 2010-11. Grounds of the Revenue are dismissed. 2022 (9) TMI 1334 Assessment u/s 153A - disallowance made on protective basis - addition on the basis of entries in the Pen Drive found from the premises of the key employees - HELD THAT:- The bench has noted that when the PEN drive find during the search proceeding no questions are raised to the parties not only that the employee from this PEN drive found, his statement is not recorded - merely from that PEN when the veracity about that evidence is not recorded no addition either protective or substantive can be made. Not only that even on the merits the addition cannot be made on two counts, one is that there is no substantiative addition in those persons who claimed to have additional interest as duly confirmed before us by the AO and secondly when the substantive addition is not made protective addition cannot survive. The amount in dispute is nothing but the amount of the additional interest demanded and not paid by the assessee. Based on the decision relied upon by the ld. AR and on careful consideration of the facts in this case we hold that the ld. AO before completing the assessments on protective basis, the AO is supposed to point out the name of the assessee who may be the owner of such income. It is common ground that in the present case, till this date, the authorities below did not bring on record any material to show that the declared income in question really belongs to some other assessee. The ld. DR honestly conceded that till this date no proceedings in respect of the disputed income have been made against any other assessee and the same is also confirmed by the AO in the report presented before us. Not disputed the findings of the ld. AO that there is no addition on substantive basis. Thus, the protective addition cannot be survived as AR of the assessee explicitly proved that whatever interest that they have paid in the group cases is duly recorded in the books of accounts and wherever applicable TDS is also deducted. As an additional interest as allegedly demanded by the parties is not paid by the assessee, even those parties are not questioned on that 2.4% found recorded in the Excel-Sheet and same were also not taxed on substantive basis. There cannot be any protective addition without making the substantive addition and Revenue did not controvert the argument of the AR of the assessee and has also not supported by any judicial decision so as to confirm the order of the lower authorities. Thus, the interest which is actually paid is duly recorded in the books of accounts and there is no other material which is found even the person under whom possession the PAN Drive is found his statement is not recorded. This action itself shows that department find this evidence as dump documents and is not evidence relied upon. The statement of the person from whom the evidence his found is also not checked on its correctness and veracity. Therefore, based on the finding that the revenue has not made any substantive addition in the persons in whose name the interest as alleged addition income is not added and assessee categorically proved that there is no incriminating other document found recording the payment of the additional interest. Based on these observations we vacate the disallowance made for an amount made on protective basis. Appeal of assessee allowed. Benami Property 2022 (9) TMI 1356 Benami Property Transactions - Retrospective application of law enacted in the year 2016 - primary challenge made is that the transactions which have been classified by the respondents as benami transactions and the property accrued therefrom, which have been classified by the respondents as benami property, were acquired prior to 25.10.2016 or 01.11.2016 - HELD THAT:- The issue before us is no longer res integra not only in view of the law laid down by this Court in Nexus Feeds Limited [ 2022 (5) TMI 262 - TELANGANA HIGH COURT] but in view of the law declared by the Supreme Court in Union of India v. Ganpati Dealcom Pvt. Ltd. [ 2022 (8) TMI 1047 - SUPREME COURT] This Court took the view that Section 2(9)(A) and 2(9)(C) of the Act inserted by the Amendment Act of 2016 are prospective in nature because these two provisions have significantly and substantially widened the definition of benami transaction than as was there in the unamended Benami Property Act of 1988. Taking note of the fact that Central Government had notified the date of coming into force of the Amendment Act of 2016 as 01.11.2016, this Court held that these two provisions cannot be applied to a transaction, which took place prior to 01.11.2016. In that case, the transaction was dated 14.12.2011. Therefore, the show cause notice, provisional attachment order as well as the adjudicating order were declared null and void being without jurisdiction and consequently, quashed. Supreme Court has declared that the Amendment Act of 2016 is not merely procedural but prescribes substantive provisions. Therefore, concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to coming into force of the 2016 Amendment Act i.e., 25.10.2016. As a consequence, all such transactions or confiscation proceedings shall stand quashed. Supreme Court has also clarified that in rem forfeiture provision under Section 5 of the Amendment Act of 2016 being punitive in nature can only be applied prospectively and not retroactively. In view of finality of the law declared by the Supreme Court, the impugned show cause notices, provisional attachment orders as well as the adjudicating orders passed by the various authorities under the Benami Property Act as amended by the Amendment Act of 2016 impugned in the batch of writ petitions cannot be sustained. Customs 2022 (9) TMI 1355 Suit for value of goods - wrongful delivery of goods by another agent of the disclosed principal - vicarious liability - breach of express term of contract of carriage by wrongfully and illegally delivering the consignments sans presentation of original Bills of Lading - failure to mitigate the loss - duty drawback claim. Whether the value of the goods consigned by the plaintiff is proved? - HELD THAT:- The fact that immediately after the claim was lodged by the plaintiff defendant nos.3 and 4, went on to claim the amount from the person, whom they held liable, detracts materially from the defence now sought to be raised. Undoubtedly, the Bills of Lading contain a disclaimer as regards the quantity, contents and value of the goods consigned. However, the plaintiff s claim is not rested on the value of goods mentioned on the Bills of Lading only. Post disclosure of wrongful delivery of the goods, the plaintiff instantaneously alleged and firmly claimed damages commensurating with the value of the goods, as assessed by the plaintiff. In this view of the matter, the defendants cannot seek to draw any mileage from the fact that there is no evidence aliunde to establish the value of the goods. From this stand point, the learned Judge, City Civil Court committed no error in returning an affirmative finding in favour of the plaintiff. Is defendant no.3 liable for wrongful delivery of the goods by defendant no.4 to the consignee? - principal plank of the challenge to the impugned decree was that defendant no.3 being an agent of a disclosed principal i.e. defendant no.2, could not have been sued for the alleged wrongful delivery of the consignments by the another agent of defendant no.2 - HELD THAT:- If the evidence is read as a whole, the inference which Mr. Shah wants the Court to draw does not commend itself. Defendant no.3 had both the authority and choice, to select the agent at the port of destination. Defendant no.3, in the totality of the circumstances, cannot be permitted to wriggle out of the situation by simply contending that defendant no.4 was an agent of defendant no.2 at the port of destination. The aspect of the liability of the defendants, in the case at hand, is required to be appreciated in the light of undisputed wrongful delivery of the goods, in breach of an express term of contract. Whether the plaintiff s alleged failure to mitigate the loss dis-entitles the plaintiff from seeking damages? - HELD THAT:- The defence of rejection of goods by M/s. Universal is required to be considered in the backdrop of indisputable position of wrongful delivery of the goods to M/s. Universal. At the very moment of the wrongful delivery, the defendants were guilty of breach of contract. The plaintiff had already parted with the possession of the goods. There is no contemporaneous material to indicate that the alleged rejection of the goods by M/s. Universal was brought to the notice of the plaintiff. An abstract submission that the plaintiff ought to have taken steps to mitigate the loss in the light of these hard facts, is unworthy of acceptance. What consequences flow from the benefit of duty-drawback allegedly availed by the plaintiff? - HELD THAT:- An inferential submission that availing of benefit of duty drawback implies receipt of consideration is simply far fetched. Conversely, from the perusal of the provisions contained in Section 75 of the Customs Act, 1962 such an inference cannot be said to be automatic. The second proviso to sub-section (1) of Section 75 envisages a situation where any duty drawback has been allowed but the sale proceeds in respect of such goods are not received by or on behalf of the exporter in India and empowers the Central Government to specify the procedure for recovery or adjustment of the amount of such drawback. An aspect, which, however, warrants consideration is the justifiability of the relief granted by the learned Judge, as regards the currency in which the damages are quantified and the rate at which interest has been awarded thereon. The claim for damages thus stood crystalized at Rs.29,87,795/- as of 14th September, 1996. In this view of the matter, a decree for damages on the basis of the value of the goods, as assessed by the plaintiff, ought to have been passed in Indian currency instead of US Dollar - Secondly, the award of interest at the rate of 24% also appears to err on the side of excessiveness. Undoubtedly, the underlying transaction was purely commercial. Yet, award of interest at the rate of 24% p.a. appears to be a little harsh and exorbitant. The appeal is allowed in part. 2022 (9) TMI 1354 Import of good subject to FSSAI regulations - time frame for inspection of goods - praying for levy of demurrage charges being imposed on an importer only after the grant of an NOC from FSSAI and in essence a waiver from that levy till such time as clearance is granted - the reliefs as claimed stand restricted to appropriate directions being framed for FSSAI expediting the process of inspection of imported articles and for permission being accorded to enable an importer to move the goods from a custodian warehouse to a public warehouse. HELD THAT:- From the recordal of submissions of parties it is manifest that none of them question the permissibility of the movement of imported articles from a custodian warehouse to a public warehouse. It was also conceded before the Court that no provision, statutory or otherwise, prohibits such a choice being exercised by an importer. In view of the above and bearing in mind the provisions which are made in Section 49 of the 1962 Act the Court records that pending clearance of imported articles by the competent statutory authorities it would in principle be permissible for an importer to apply to the competent authority of Customs to be granted the permission to move such articles from a custodian warehouse to a public warehouse. This would thus enable the importer to move the goods out of the airport or the cargo terminal and to store the same in a public warehouse. The movement of those goods would however necessarily have to be regulated by the Customs authorities since the goods while transiting from the custodian warehouse to the public warehouse are still to be cleared for the purposes of home consumption. The imported articles of food are statutorily subject to inspection and analysis under the provisions of the Act read with the Import Regulations which have been noticed above. An importer of food articles thus cannot contend that the goods be cleared for home consumption even before they have been duly inspected by the authorities of FSSAI and a conforming report having been drawn and submitted before the authorized officer. It would be pertinent to recollect that Section 47(5) of the Act only makes provisions for the authorized officer of FSSAI to take samples of the imported articles and forward the same to the Food Analyst - it would not be prudent to prescribe or stipulate a particular timeframe within which that exercise of inspection, taking of samples and clearance is ultimately completed. This since it would be impossible for the Court to predict the vagaries of a particular situation as well as the volume of imported articles of food that may be pending for inspection at any particular point of time by FSSAI. The apprehension which has been expressed in the writ petition stands duly taken care of and laid to rest in light of the unanimous position as struck by and on behalf of respondents 1, 4, 5, 6 and 8 who had stated that the transportation of imported articles from the custodian warehouse to a public warehouse is not prohibited under the provisions of the 1962 Act. This would enable the authorities of FSSAI to inspect imported articles of food and draw samples for analysis thereof irrespective of whether the imported articles of food are stored in a custodian warehouse or a public warehouse. All that would need to be observed is that FSSAI would not refuse inspection merely on the ground that the goods are stored in a public warehouse. Petition disposed off. 2022 (9) TMI 1353 Seeking refund of terminal excise duty (TED) - duty paid on supply of laptops to licence holders of Export Promotion Capital Goods (EPCG) Scheme - benefits for deemed exports - HELD THAT:- There are no doubt in mind and Mr.Chandrasekaran, learned Senior Panel for R1 to R5 would fairly accede to the position, that a supplier to a EOU/licence holder under the EPCG scheme, is entitled to refund of terminal excise duty. In the present case, there is no dispute on the position that the petitioner has, in fact, paid the refund at the first instance - the factum of payment of duty by the petitioner stands established. In the case of Sandoz Private Limited [ 2022 (1) TMI 225 - SUPREME COURT ], the Hon'ble Supreme Court has directed credit of the duty paid to the CENVAT Register of that assessee for the reason that, pending litigation, the era of Central Excise had been subsumed into Goods and Service Tax regime with no avenue available for receipt of the amount in cash. The GST Authorities were thus impleaded to ascertain the mechanism presently in vogue. In their counter dated 10.08.2022, the GST Central Excise Authority have merely distanced themselves from the present litigation stating that it is for the DGFT to take a view in regard to the refund - petition allowed. 2022 (9) TMI 1352 Levy of penalty on Customs Broker and Managing Director u/s 112 (a) - Deemed conclusion of proceedings on payment of duty with interest - benefits of sub-Section 6(i) of Section 28 of the Customs Act -proceedings against the Appellant-Customs Broker - conclusion of proceeding against goods which were seized under Section 110 of the Customs Act or liable for confiscation on the other Sections of Customs Act - HELD THAT:- While applying this provision against the Appellant, the Commissioner had observed that the goods were seized under Section 110 and liable for confiscation under Section 111(m) of the Customs Act, 1962 and hence the co-noticee M/s. Damani Shipping Pvt. Ltd. (present Appellant) is out of the purview of the clarification of the Board Circular No. 11/2016-Cus. dated 15.03.2016. Further, Section 28(6)(i) of the Customs Act, 1962 clearly reveals that the proceedings in respect of such persons or other persons to whom the notice is served under sub-Section (1) or sub-Section (4) of the Section 28 of the Customs Act, shall, without prejudice to the provisions of Section 135, 135A and 140 be deemed to be conclusive as to the matters stated therein. The Board Circular No. 11/2016-Cus. in unambiguous terms clarified that other person implies that other person to which no demand of duty is raised with notice served under Section 1 or sub-Section 4 of Section 28, as the case me be. Hence the Appellant s case squarely covered under provision. Since it was a co-notice to whom no demand notice was made but notice under Section 28 was served. Ambiguity arises because of the fact that at the end of para 6 it was noted that case involving seizure of goods under Section 110 of the Customs Act or cases where confiscation proceedings are involved, would be out of the purview of this Circular - the said Circular has not personified any violator individually since it had categorically stated that cases involving seizer and confiscation would be out of the purview of the Circular and therefore the order passed by the Commissioner in allowing the benefit contained in Section 28(6)(i) to the importer company and its Managing Director and denying the same to the Appellant who is charged under same penal provisions under Section 112, 114(A), 114(A)(A) in the same case is unsustainable in law and equity. Appeal allowed. Corporate Laws 2022 (9) TMI 1351 Suit for recovery alongwith interest - Order XXXVII of Code of Civil Procedure, 1908 - whether the averments in the pleadings constitute an acknowledgment of debt to the extent of the amount, the defendant agreed to refund? - HELD THAT:- In the light of the exposition of the legal connotation of the terms debt and acknowledgment the pleadings extracted it satisfies the requirement of both debt and acknowledgment to the extent of the amount, which the defendant agreed to refund. The submission on behalf of the defendant that, in the absence of a written contract to refund the amount, the tenability of the suit itself is suspect, does not merit acceptance unreservedly, if the afore-extracted pleadings are construed in the light of the aforesaid enunciation of law. In my view, the acknowledgment of liability to pay the amount to the extent agreed to by the defendant itself furnishes a foundation for institution of Summary Suit. The audited balance-sheet of the defendant for the year ending 31st March, 2020, under the caption other current liabilities includes a sum of Rs.59,33,517/-, payable towards the advances from customers in E wing. This, according to the plaintiffs, is the very amount which is payable by the defendant to the plaintiffs, after deducting the amount which defendant claims it is entitled to deduct. There is material to indicate that apart from the plaintiffs, the transactions of the rest of the persons, who had booked the flats in E wing, did not materialise. Prima facie, the claim of the plaintiffs that the said amount represents the consideration parted with by the plaintiffs can not be said to be without substance. The audited balance-sheet may furnish a sustainable ground for institution of a summary Suit on the premise that the statement therein constitutes an acknowledgment of liability. The plaintiffs may be termed as investors , if not allotties . Nonetheless, the facts remain that the plaintiffs had parted with a sumptuous amount towards the consideration, the project has not come up and the defendant agreed to refund the consideration after deducting a portion of the said amount on account of cancellation and also the amount of service tax, albeit, allegedly, at the instance of plaintiffs - The defendant is granted leave to defend the suit on the condition of deposit of a sum of Rs.5,107,767/within a period of six weeks from the date of this order. Application disposed off. 2022 (9) TMI 1350 Seeking to transfer of the Company Petition to the National Company Law Tribunal (NCLT) for being heard and decided in accordance with the provisions contained in Insolvency and Bankruptcy Code, 2016 (IBC) - alleged malafide conduct of the ex-directors of Futura - Section 434 of the Companies Act, 2013 - HELD THAT:- Commitments and undertakings were made on umpteen occasions to be observed in breach. Simply, it cannot be urged that Futura and its ex-directors had no adequate opportunity to make amends. Thus, the touchstone, on which irreversibility is to be judged, is also indicated by observing that so long as no actual sale of the immovable or movable assets of the company in liquidation takes place, nothing irretrievable can be said to have been done which would preclude the Company Court from exercising discretion to transfer the proceedings to NCLT - the Company Court called upon to exercise the discretion has to pose unto itself a question; whether the winding up proceedings have progressed to such a stage of irreversibility as to render it impossible to set the clock back ? If the answer is in the negative, the transfer of the proceedings to NCLT would be in furtherance of the intent of the legislature. The conduct attributed to the ex-directors, prima facie borne out from the record, can certainly be not said to be unblameworthy. Surely, the conduct of the parties must enter into judicial determination while exercising discretion - The conduct of the parties to proceedings or for that matter, the ex-directors of the company, may not always be of determinative significance. When a situation comes to such a pass that the Company Court considers it appropriate to order winging up of a company, more often than not, such a situation would be brought about by mismanagement and improper conduct of the persons who were in charge of the affairs of the company or, in the least, imprudent decisions. Thus, to urge that such conduct of the parties should dissuade the Court from exercising the discretion, would deprive the creditors, contributors and other stake holders from the benefits which the insolvency resolution process under IBC affords. While ordering transfer of the winding up proceedings to NCLT, there does not seem to be a prohibition for continuing the position as it obtains in the winding up proceedings before the Company Court as an interim measure, till the time NCLT passes an appropriate order under Section 13 of IBC. Lest the interest of the company and all the stake holders would be a casualty, especially in a case like the present one, where the instantaneous setting aside of the order of winding up and putting the ex-directors again at the helm of the affairs of the company is fraught with imminent risk. It is directed that the winding up order would continue to operate despite the transfer of the proceedings to NCLT till an effective order is passed by NCLT under Section 13 of the IBC and only, thereafter, the Official Liquidator would stand discharged - Interim Application stands allowed. Insolvency & Bankruptcy 2022 (9) TMI 1349 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- In the present case notice of demand was issued on 30.12.2019, hence, we proceed to examine the materials on the record before 30.12.2019 to find out was to whether there was any dispute raised by the Corporate Debtor regarding bills of the Appellant and further whether the dispute raised earlier was not existing on the date when Demand Notice was issued and has subsided as contended by leaned counsel for the Appellant - The Operational Creditor was put to notice that there is short supply of the Supervisor and Security Personnel under the contract which shall result in recovery from the payment and payments for the months mentioned therein has been released to mitigate the hardship of the employees which were released conditionally and all recoveries will be visited on conclusion of the contract. There are issues regarding releasing the final payment after observing the terms and conditions of contracts. The letter dated 20.12.2019 clearly communicated that issues regarding observing the terms and conditions of the contracts are yet not settled or decided and that was in process. The email further stated that Appellant is informed that very shortly the aforesaid issues would be settled . The above email does clearly belie the submission of the Appellant that before issuance of demand notice dated 30.12.2019 all the issues between the parties were settled. There are no substance in the submission of learned counsel for the Appellant that dispute, if any, existing earlier came to an end by the time Demand Notice was issued by the Appellant on 30.12.2019. The materials brought on the record before the Adjudicating Authority and also before us clearly indicate that there was pre-existing dispute with regard to payment of amount claimed by the Appellant and Appellant was duly communicated of the said dispute even prior to issuance of Demand Notice - No reliance on Minutes of Meeting dated 07.06.2019 be placed to accept the submission of Appellant that all the issues between the parties subsided and were settled and the reconciliation was complete. The Adjudicating Authority did not commit any error in rejecting the Section 9 Application filed by the Appellant on the ground of pre-existing dispute - Appeal dismissed. 2022 (9) TMI 1348 Seeking permission to resolution applicant to withdraw the resolution plan - HELD THAT:- After noticing the adverse effect on all businesses the Hon ble Supreme Court in Ebix Singapore [ 2021 (9) TMI 672 - SUPREME COURT ] had laid down that vesting any such power in the Successful Resolution Applicant to withdraw shall be impermissible. In event the submission of the Appellant is accepted that due to financial difficulty he is unable to implement the plan and he be permitting to go back from the commitments made in the Resolution Plan, it shall have disastrous effect on the entire process undertaken. The IBC is process consists of different steps with a ultimate object of reviving the Corporate Debtor. Permitting Successful Resolution Applicant to withdraw after the Plan has been approved will have serious disastrous effect on whole purpose and object of IBC - On the submission made by Counsel for the Appellant that since he had no financial capacity to implement the plan he should have been allowed to withdraw, the Adjudicating Authority has rightly rejected his application. There is no merit in Appeal - The Appeal is dismissed. 2022 (9) TMI 1347 Seeking liquidation of the Corporate Debtor - Section 33(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The CoC having rejected the Resolution Plan submitted by the Resolution Applicant after due deliberation and discussion, the decision taken by the CoC is a decision taken in the commercial wisdom of the CoC which cannot be interfered with in exercise of jurisdiction by the Adjudicating Authority or by this Tribunal. The submission of Learned Counsel for the Appellant that no reasons have been given by the CoC for rejecting the plan has also no legs to stand when a decision is taken after due deliberation. The decision of the CoC is reflected in the result of the voting which cannot be questioned. In so far as reliance on 14th CoC meeting dated 22.07.2021 is concerned, the Resolution Professional has brought into notice of CoC about the e-mail send by Resolution Applicant revisiting his offer, which fact although was noticed but no decision was taken by CoC to consider the e-mail by reversing its earlier decision of rejection of plan. Thus, the minutes of 14th CoC in no manner helps the Appellants. Thus, no error has been committed by Adjudicating Authority in directing for liquidation of the Corporate Debtor. No grounds have been made out to interfere with the Impugned Order dated 26th October, 2021 passed by the Adjudicating Authority - appeal dismissed. 2022 (9) TMI 1346 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice duly done, but outstanding amount not paid by Operational creditor, nor any reply to demand notice was done - HELD THAT:- It is noted that the Operational Creditor supplied the electricity to the Corporate Debtor in the month of April to June and raised 8 invoices for an amount of Rs.1,59,25,360/- .The Corporate Debtor served the demand notice dated 21.10.2019 issued on 22.10.2019 and the same was delivered on 28.10.2019 to the Corporate Debtor. But the Corporate Debtor neither replied to the Demand Notice nor paid the outstanding amount to the Operational Creditor. As per the statement given by the PGVCL for the credited units, all the units are credited after the deduction of transmission loss and wheeling loss units. A total of 26,60,401 units have been credited by the PGVCL and the Operational Creditor raised eight invoices of Rs. 1,59,25,360/-. The Corporate Debtor claimed that an amount of Rs. 1,31,82,987/- has been paid. As per the ledger account from 01.04..2015 to 14.10.2019 more than Rs. 23,00,000/- is still due and payable by the Corporate Debtor to the Operational Creditor. It is not a disputed fact that the Corporate Debtor has not raised any disputes with respect to the invoices raised by the Operational Creditors. Moreover, Corporate Debtor vide letter dated 26.09.2017 itself admitted that Rs. 67,65,986/- has been withheld on account of gross subsidy charges, additional surcharge and electricity supplied. The present application is defect free as per section 9 (5) of the IB Code, and the outstanding amount meets the threshold limits as section 4 of the IB Code - Application admitted - moratorium declared. 2022 (9) TMI 1345 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Time limitation - service of demand notice - whether the demand notice in Form 3 dated 13.11.2019 was properly served? - HELD THAT:- The petitioner has placed a copy of the notice which was delivered to the corporate debtor. Whether the operational debt was disputed by the corporate debtor? - HELD THAT:- It is to be noted that none appeared on behalf of the corporate debtor despite repeated service and has been set ex parte vide order dated 30.06.2022. It is deposed by way of affidavit by Operational Creditor that reply dated 30.11.2019 was received to its Demand Notice where Corporate Debtor has raised baseless,frivolous, sham and bogus dispute. Also, it is stated that no notice was given by the Corporate Debtor relating to a dispute of the unpaid operational debt. It shows that there is no pre-existing dispute. Whether this application is filed within limitation? - HELD THAT:- This application was filed on 24.02.2020 vide Diary No.1482. Whereas the date of default is 18.05.2019 i.e. 30 days from the date of first outstanding invoice dated 18.04.2019, therefore, this Adjudicating Authority finds that this application has been filed within limitation. It is seen that the petition preferred by the petitioner is complete in all respects. The material on record clearly goes to show that the respondent committed default in payment of the claimed operational debt even after demand made by the petitioner. In view of the satisfaction of the conditions provided for in Section 9(5)(i) of the Code, the petition is admitted - moratorium declared. 2022 (9) TMI 1344 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 sale was confirmed and the Financial Creditor has released a sum of Rs. 6.32 crores by selling one of the mortgaged properties of the Corporate Debtor. Hence, the amount due and payable would come to a sum of Rs.1.02 Crore (Approx) after deducting the sale proceed amount from the default amount as mention in this application. It emerges that the Financial Creditor has filed its application only for the recovery of the interests and also that the Corporate Debtor is a going concern and in view of the recent judgment of Hon ble Supreme Court in VIDARBHA INDUSTRIES POWER LIMITED VERSUS AXIS BANK LIMITED [ 2022 (7) TMI 581 - SUPREME COURT ], it is not satisfying that the present petition has been filed only for resolving the insolvency, as the Corporate Debtor had even tendered the balance amount, which the Financial Creditor did not accept. Petition dismissed. 2022 (9) TMI 1343 Seeking to declare that the Lease Property is not an asset of the Corporate Debtor and shall not form part of the resolution plan - transfer of the Lease Property or continuation of the lease arrangement in relation to the Lease Property shall be subject to strict compliance with the Agreement and the express approval of the Applicant herein, or not - seeking direction to Respondent No. 1 and Respondent No. 2 to refrain from taking any action in relation to the Lease Property - HELD THAT:- The registered Lease Deed is not a mere Lease Deed and is a registered Lease-Cum-Sale-Agreement under which the Corporate Debtor has already acquired possessory legal rights under the registered document. It is also very clear from the above terms that the Lessee has a right to ask for extension of the lease or for purchasing the above property with absolute rights at the price determined by the Corporation. In fact, the Corporate Debtor has already requested the Applicant/KIADB to fix the price of the land that was allotted to them by means of letter dated 18.10.2016 so as to obtain Sale Deed by them for which the Applicant/KIADB vide their letter dated 28.11.2016 informed the Corporate Debtor that the board of the Applicant/KIADB has not yet fixed the final price to the said industrial area and hence the Sale Deed cannot be considered at this stage. Of course, the Applicant/KIADB also issued notice under Section 34 B of KIAD Act of 1966 to the Resolution Professional to remedy the alleged breaches said to have been committed by the Corporate Debtor in their notice. It is clear from the terms and conditions of the Lease Deed as well as the various correspondence relied by them that the Corporate Debtor is in physical possession and enjoyment of the land allotted to them under the above registered Lease Deed and both parties are alleging breach of terms and conditions of the registered Lease-Cum-Sale-Agreement against each other and the Applicant/KIADB could not evict the Corporate Debtor due to kicking of moratorium. Thus, it is held that whatever legal rights the Corporate Debtor had already acquired under the above registered Lease-Cum-Sale-Agreement shall continue to vest with the Resolution Applicant and the Resolution Applicant is entitled to continue in possession of the property till the Resolution Applicant is evicted under due process of law - application dismissed. 2022 (9) TMI 1342 Seeking Liquidation of Corporate Debtor - Section 33 (1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Upon perusing the material available on record, it is observed from the minutes of the 12th CoC meeting that the COC unanimously decided to liquidate the Corporate Debtor. Even though the COC in its 12th meeting unanimously decided to liquidate the Corporate Debtor, no voting was conducted in this regard for the reason best known to the COC. It is important to observe here that more than 397 days has been elapsed without any Resolution application and therefore this Tribunal by virtue of powers conferred under section 33(1)(b)(i), orders Liquidation. Application allowed. 2022 (9) TMI 1341 Seeking Liquidation of Corporate Debtor - Section 33 of the Insolvency and Bankruptcy Code, 2016 read with Rule of the NCLT Rules, 2016 - HELD THAT:- It can be seen from the submissions that the CIRP of the Corporate Debtor ended on 24.08.2021 and the Committee of Creditors in the 9th COC meeting held on 03.03.2022 has resolved to liquidate the Corporate Debtor. In such circumstances, this Adjudicating Authority concludes that this present application deserves to be allowed. As the CIRP of the Corporate Debtor has come to an end on 24.08.2021 and the COC vide meeting dated 02.03.2022 has unanimously resolved to liquidate the Corporate Debtor. It is noted that a period of 863 days have passed since commencement of CIRP till the date of this Application. As such this Adjudicating Authority is left with no other choice but to liquidate the Corporate Debtor The liquidation of Corporate Debtor is ordered - application allowed. Service Tax 2022 (9) TMI 1340 Disallowance of refund claim - amount in respect of invoices issued by AB Commercial for transportation of iron ore fines - to be qualified under GTA services or Cargo Handling Services ? - HELD THAT:- The Adjudicating authority vide Order-in-Original dated 23.09.2010 had allowed the refund claim of the Appellant in respect of the transportation Bills issued by AB Commercial totaling to Rs.2,22,119/- observing that the goods were carried upto the point of port of export from origin and that this is sufficient to have a nexus with the exportation of the goods. Thus, the amount of Rs.2,22,119/- is liable to be considered for sanction. Subsequent to the above order of the Adjudicating authority sanctioning the refund, the Department had preferred an Appeal before the Commissioner of Central Excise (Appeal-I) alleging that the invoices issued by AB Commercial were related to Cargo Handling Services and not Goods Transport Agency (GTA) as claimed by the Appellant and there is no provision for exemption under Notification No.17/2009 dated 07.07.2009 for Cargo Handling Services . Hence, the amount of Rs.2,22,119/- has been erroneously refunded vide Order-in-Original. After following the due process of law, the Ld.Adjudicating authority vide de novo Order-in-Original dated 03.02.2012 disallowed the refund claim of Rs.2,22,119/-. Against the said de novo order, the Appellant filed Appeal before the Ld.Commissioner(Appeals) and the Ld.Commissioner(Appeals) vide the impugned Order-in-Appeal rejected the Appeal filed by the assessee holding that the refund sanctioned on the invoices issued by M/s. AB Commercial to the tune of Rs.2,22,119/- is not admissible. The facts of the present case are squarely covered by the decision in the case of Rungta Projects Ltd. Vs. CCE ST, Allahabad [ 2017 (9) TMI 791 - CESTAT ALLAHABAD] where it was held that transportation of coal was the essential service provided by the assessee and the activity of loading and unloading of coal was instantly for transportation and therefore service rendered by the assessee did not fall within the definition of Cargo Handling Service . The impugned orders cannot be sustained and is accordingly set aside - appeal allowed - decided in favor of appellant. 2022 (9) TMI 1339 Reversal of CENVAT Credit - Capital Goods cleared as waste and scrap - amount required to be paid in terms of rule 3(5A) of the Credit Rules for capital goods cleared as scrap - Appellant is output service provider - period of dispute in the present case is from 1.3.2011 to 16.3.2012 and 27.09.2013 to 31.03.2015 - HELD THAT:- In terms of payment of the amount under rule 3(5A) of the Credit Rules during the said relevant period, only a 'manufacturer' was required to pay the amount in case of clearance of capital goods as scrap and not an output service provider. The appellant, being an output service provider, was not required to pay any amount in terms of rule 3(5A) of the Credit Rules during the period involved in the present appeal for clearance of capital goods as scrap. Whether the capital goods involved in the present case which were cleared by the appellant without payment of any amount under rule 3(5A) of the Credit Rules can be considered as used capital goods or waste and scrap? - HELD THAT:- In the present case the appellant has also undertaken an internal procedure for determination of the nature of the capital goods to be cleared by it. The goods are thereafter sent to OEM and Chartered Engineer for further verification as to whether the goods qualify as scrap. Only when the goods have been certified that they were sold as to scrap management companies having registration under Hazardous Waste Management Rules - It is, therefore, clear that the capital goods cleared by the appellant would qualify as scrap and no amount was required to be paid while clearance of the same by the appellant. Extended period of limitation - HELD THAT:- It is not necessary to examine the contention advanced by learned counsel for the appellant that the extended period of limitation could not have been invoked in the facts and circumstances of the present case. The impugned order dated 29.07.2016 passed by the Additional Director, therefore, cannot be sustained and is set aside - Appeal allowed - decided in favor of appellant. Central Excise 2022 (9) TMI 1338 Clandestine Removal - Gutkha - period involved in the show cause notice is from December 2007 to 04.08.2008 - demand of duty alongwith levying penalty on Partner - HELD THAT:- It is not in dispute that the search was conducted on 04.08.2008. At that time the unamended rule 17(2), which had come into force on 01.07.20008, was operating. The amended rule 17(2) came into force on 20.10.2008 and there is nothing in the amended Rules that may show that they shall apply retrospectively w.e.f. 01.07.2008. The contention of the learned authorised representative appearing for the department that merely because the amended rule 17(2) states that such machine shall be deemed to have been in operation since 01.07.2008 it would mean that the amended rule 17(2) shall apply retrospectively from 01.07.2008 cannot be accepted The amended rule 17(2) would apply to any search conducted after 20.08.2008 and it would only be in such a situation that the consequence would flow from 01.07.2008. At the time when the search was conducted on 04.08.2008, rule 17(2) had not been amended and the amended rule 17(2) cannot impose duty at a higher rate with retrospective effect. In the present case, if the contention of learned authorised representative appearing for the department is accepted, the respondent would be subjected to higher rate of duty then what was prevailing at that time the search was conducted. Penalty on Sumit Agarwal - HELD THAT:- No submission was made by learned authorised representative regarding that part of the order by which the Principal Commissioner refrained from imposing penalty on Sumit Agarwal as penalty had already been imposed upon M/s. OM Fragrances. Appeal of Revenue dismissed. 2022 (9) TMI 1337 CENVAT Credit - inputs (used in the Cement manufacturing process) or not - Welding Electrodes and Dissolved Acetylene Gas (D.A. Gas) - period from April, 2013 to June, 2017 - HELD THAT:- The adjudicating authority had observed that Welding Electrodes and D.A. Gas were used in the cement manufacturing plant of the Appellant for the purpose of repair and maintenance of its plant and machinery. This being observation of the adjudicating authority there is no denial of the fact that plant and machinery which were being used for manufacturing of final product were being kept in usable with condition periodic repair and maintenance, in which these two components were being used. Hence, both Welding Electrodes and D.A. Gas are required for smooth process of manufacturing, for which definition of input provided under Rule 2(k)(i) is squarely applicable as the clarificatory Circular of the Board issued on 29.04.2011 clearly mentions that goods used in relation to manufacture of final product in indirect way also excludes the definition contained in the said Rule 2(k)(F) that deals with goods having no relationship with manufacture of final product. The credits availed by the Appellant on Welding Electrodes and D.A. Gas are eligible credits and Appellant had rightly availed the same - Appeal allowed - decided in favor of appellant. 2022 (9) TMI 1336 CENVAT Credit - capital goods or not - square rail - input services - insurance premium on motor vehicles owned by the Appellant - violation of Rule 16 of Central Excise Rules, 2002 read with Rule 9 of Cenvat Credit Rules, 2004 - duty paying invoices - suppression of facts or not - extended period of limitation - penalty. Denial of credit of 50% amounting to Rs.17,650/-, which has been used for construction of support structures for movement of cranes - HELD THAT:- The issue is no more res integra and is squarely covered by the decision of the Tribunal in the case of EURO CONTAINERS VERSUS COMMISSIONER OF C. EX., CHANDIGARH-I [ 2013 (9) TMI 1089 - CESTAT NEW DELHI] where reliance has been placed on Tribunal in the case of Mastech Technologies Pvt. Ltd. v. CCE, Jaipur-I [2013 (5) TMI 241 - CESTAT NEW DELHI], where it was held that the steel items used for fabrication of Gantry rails on which the EOT cranes moves would be eligible for Cenvat credit - the denial of credit cannot be sustained and is set aside. Denial of credit of Rs.5,799/- for the financial year 2010-11, out of total credit taken amounting to Rs.10,907/- of Service Tax paid on the insurance premium of the motor vehicles owned by the Appellant and used in or in relation to the manufacture of the final products for the year 2010-11 and 2011-12 - HELD THAT:- For the year 2010-11, the Service Tax paid on the insurance premium paid on the motor vehicles which is available to them as input service under Rule 2(l). It is found that the service on which the above credit had been taken is covered under the definition of input service w.e.f. 01.04.2011. Accordingly, the denial of credit is set aside. Denial of credit of Rs.2,80,091/- for violation of Rule 16 of Central Excise Rules, 2002 read with Rule 9 of Cenvat Credit Rules, 2004 - HELD THAT:- It is found from the records that the Appellant had already approached the jurisdictional Commissioner vide their application dated 28.05.2013 sharing their concern regarding the difficulty they were facing in accounting the returned goods in the ERP SAP system and the Ld. Commissioner had acknowledged vide his letter dated 11.12.2013 appreciating their concern and guided them to observe certain conditions. It was further submitted that the Appellant all along followed those conditions while accounting for the rejected goods. Extended period of limitation - suppression of facts or not - HELD THAT:- The Show Cause Notice was issued on 21.01.2014 demanding duty for the period 2009-10, 2010-11, 2011-12, 2012-13 and 2013-14 (upto September 2013) by invoking the extended period of limitation on the ground of willful suppression of facts - As the Appellants are filing statutory monthly returns showing clearance of the impugned goods and all along they were in communication with the Department, therefore, the allegation of suppression of facts with intent to evade payment of duty is not sustainable. Hence, the demand beyond the normal period of limitation is barred by limitation, and is accordingly set aside - thus, demand for the normal period along with interest is upheld. Penalty - HELD THAT:- The allegation of suppression with intent to evade payment of duty is not sustainable therefore penalty under Section 11AC of the Central Excise Act, 1944 is also set aside. Appeal disposed off. CST, VAT & Sales Tax 2022 (9) TMI 1335 Condonation of delay of 584 days in filing revision - exclusion of COVID period i.e. from 15.03.2020 till 10.02.2021 as per decision in the case of IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [ 2021 (3) TMI 497 - SC ORDER] - satisfactory explanation for delay was given or not - HELD THAT:- The delay is sought to be explained by contending that the order passed by the learned Tribunal was served on the revisionist on 09.04.2019 although a proposal for filing of the revision was sent on 28.10.2020 to the office of Additional Commissioner Grade-2, Commercial Tax, Lucknow and a letter was also forwarded on 06.11.2020 seeking permission and sanction for filing revision was received from the Law Department on 10.12.2020 yet despite best efforts the revision could only be filed on 10.02.2021. The delay is sought to be explained on the ground of inherited bureaucratic lackadaisical attitude imbibed with note-making, file pushing and passing on the buck ethos. The delay in filing revision has been considered by this Court in the case COMMISSIONER COMMERCIAL TAX U.P. LKO. VERSUS M/S R.C. AND SONS RAKABGANJ LUCKNOW [ 2022 (9) TMI 533 - ALLAHABAD HIGH COURT] , where the delay of 163 days was sought to be explained on the basis of the casual and lethargic attitude of the officials which prevails in the Department, on the part of the Officers concerned. In the instant case the delay is of 250 days even after ignoring the COVID period in terms of judgment of the Apex Court. Considering the aforesaid judgments in the case of M/s. R.C. Sons, and the delay in the instant case of 250 days even after ignoring the COVID period in terms of the judgment of the Apex Court and there being no plausible and cogent reasons for condoning the delay, the application for condonation of delay is rejected. Application dismissed.
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A: Difference between “License” and “Royalty”

A: Penalty proceedings under Section 130 of the CGST Act cannot be initia...

N: Inland Container Depots for loading and unloading of goods - Seeks to ...

C: Guidelines to Stock Exchanges, Clearing Corporations and Depositories

T: Supreme Court Upholds Validity of Re-Assessment Notices Issued During ...

F: Transfer of ITC without filing ITC-02

F: assessment order

F: INTERMEDIARY SERVICES OR EXPORT SERVICES

H: Revision: Hospital receipts verified, partial refunds & fees paid subs...

F: ITC Issue in case of Acqusition of Company in Insolvency

H: Goods matched documents like e-way bill and invoices; detention order ...

H: Goods Inspection Matches E-Way Bill, Lack of Tax Evasion Intent Quashe...

H: Income tax reassessment validity: AO initiated proceedings u/s 147 ins...

H: Reassessment Rules Interpretation: Taxpayer Wins Over Accommodation En...

H: Sale-purchase loss disallowed unreasonably by tax officer, commercial ...

H: Building sale value can't determine depreciation; actual consideration...

H: Loan to equity conversion attracts income tax on excess share premium ...

H: Property purchase: Joint owners pay via banking channels before regist...

H: Tax exemption limit for leave encashment: Local authorities' employees...

H: Tax assessments beyond 6-year limit quashed, satisfaction note lacked ...

H: Cash found in lockers linked to temple trust and educational foundatio...

H: Microphone Tech Classification: Functionality Over Technology.

H: Exemption from Social Welfare Surcharge on duty-free imports via scrips.

H: Claim for performance pay not an operational debt under IBC; Multiple ...

A: Director Identification Number

A: No GST is applicable for the services provided by the Director under p...

A: Income Tax Act Revamp (Comprehensive Review): Status and Suggestion on...