Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 17, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Unfair order issued without hearing, petitioner to pay costs & file reply for reconsideration within 8 weeks.
Principles of natural justice and fair play were violated when the impugned order was issued without granting the petitioner an opportunity for a hearing. Despite the delay in responding to the show cause notice, the petitioner should be allowed to file a reply and be heard, subject to paying costs of Rs. 50,000/-. The respondent must dispose of the show cause notice expeditiously after considering the reply, within eight weeks of receiving it. The petition is disposed of accordingly.
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Tax demand order overturned for lack of due process, petitioner gets chance to reply.
The High Court set aside the impugned tax demand order due to violation of principles of natural justice, as the petitioner was not provided a reasonable opportunity to contest the tax demand on merits. The petitioner was unaware of the proceedings culminating in the order, which related to a mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A. The court permitted the petitioner to submit a reply to the show cause notice after remitting 10% of the disputed tax demand, in the interest of justice, to contest the tax demand on merits. The petition was disposed of on this condition.
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Railway service charges liable for GST: Registration Fee @18%, Haulage @5%, Right to Use @18%, Stabling @18%, Station User Fee @5%, Cancellation @5.
The applicant is required to pay GST on the charges paid to Indian Railways for various services received, as the applicant is the recipient of these services from Indian Railways, and not a pure agent. The applicant has sub-contracted the task of paying these charges to the operator, who is required to pay the applicant along with GST as per their agreement. The charges paid to Indian Railways do not qualify as pure agent services u/r 33 of CGST Rules, 2017, as the applicant has not procured any additional services. Therefore, the applicant is liable to pay GST on the taxable supplies received from Indian Railways at the following rates: Registration Fee @ 18%, Haulage Charges @ 5%, Right to Use (RU) @ 18%, Stabling Charges @ 18%, Station User Fee @ 5%, Cancellation Charges @ 5%. GST will also be charged on the Security Deposit amount if it is adjusted against any of the above charges, at the respective rate applicable to that charge.
Income Tax
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Electrical Installations Eligible for Additional Depreciation under Income Tax Act.
The assessee is entitled to claim additional depreciation u/s 32(1)(iia) on electrical items forming part of plant and machinery, even if not engaged in manufacture or production. The Tribunal, following the Gujarat High Court's decision in CIT vs. Starlight Silk Mills Pvt. Ltd., held that AC plants, electric installations, and transformers are integral to plant and machinery and eligible for depreciation. Similarly, in Raw Flints (P) Ltd case, the ITAT Ahmedabad ruled that electrical installations are integral to the manufacturing process and cannot be excluded from plant and machinery. Accordingly, the assessee can claim depreciation and additional depreciation on electrical fittings constituting plant and machinery, subject to conditions u/s 32(1)(iia).
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Pedantic approach rejected, justice prevailed for Mumbai resident's belated tax return filing.
Delay in filing return, petitioner entitled to refund of excess tax deducted at source, revenue rejected application u/s 119(2)(b) citing lack of proof for hardship faced in not filing return on time as per Circular 9/2015. Petitioner residing in Mumbai, return could not be filed by advocate. Held that pedantic approach should be avoided in condonation of delay matters, justice-oriented approach adopted. Petitioner permitted to file belated return by exercising powers u/s 119(2)(b) as entitled to refund. Petition allowed, matter remanded to pass appropriate order u/s 119(2).
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Taxpayer wins: Court quashes assessment order for denying virtual hearing despite request & passing order in haste.
Assessment order u/s 147 read with Section 144B was challenged on grounds of violation of principles of natural justice as virtual hearing was not granted despite request and assessment order was passed within short notice. The Court held that granting only two days' time to respond to show cause notice and not providing opportunity for virtual hearing despite request constituted breach of principles of natural justice. Relying on precedent, the Court quashed the assessment order, consequential demand notice, and penalty notice, allowing the writ petition on these grounds.
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Shares extinguished due to NCLT order; Unclaimed LTCG loss revision plea remanded.
Section 264 revision application concerning long-term capital gain (LTCG) on extinguishment of shares due to loss arising from NCLT order. Petitioner's claim for loss on extinguishment of share value not considered in original return. Respondent obligated to consider merits of revision petition within limitation period. High Court followed precedents quashing orders u/s 264 and remanding matters for reconsideration of unclaimed losses. Impugned order quashed, matter remanded to Principal Commissioner to decide revision petition on merits after hearing petitioner.
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Software License Fees Ruled Revenue Expense, Not Capital Asset in IT Services Firm's Transfer Pricing Case.
Transfer pricing adjustment for comparable selection was challenged due to functional dissimilarity. The assessee provided IT-enabled services and back-end credit card operations, while the comparables suggested were involved in Knowledge Process Outsourcing activities, leading to their exclusion. Regarding the nature of expenses for license fees, the Assessing Officer treated it as a capital asset or intangible asset. However, the court held that the right to use the software did not provide enduring benefit, and the payment was merely license fees, not acquisition of a capital asset. The assessee did not acquire ownership of the software, and after termination, rights remained with the licensor. Relying on previous decisions, the license fees paid were considered revenue expenditure deductible u/s 37. No substantial question of law was raised.
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Company's liability persists post-merger; assessment order partially invalid for lack of proper hearing.
The case pertains to the validity of an assessment order against a company that had already undergone amalgamation. The key points are: The assessment order was passed on a non-existent company, as it had been amalgamated. However, in an amalgamation, the corporate entity continues within the transferee company, unlike winding up where it ceases to exist. The Supreme Court has held that the business and venture live on within the new corporate residence, i.e., the transferee company. Therefore, the liability continues to be shouldered by the transferee company. The transferor company had filed an appeal before the CIT(Appeals) after the merger, indicating knowledge of the liability. A notice was issued to the assessee at its Chennai address, but there was no response. The AO proceeded with the assessment as the ITAT had remitted the matter back. While the assessment order cannot be deemed a nullity, the rejection of the long-term capital gain claim without an effective hearing to the transferee company renders the order invalid to that extent. The decision was in favor of the revenue.
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Meager loan amounts & lack of proof on share capital led to partial disallowance of interest & bogus share capital addition.
Disallowance of interest on interest-free loans was rejected as the assessee had utilized meager amounts from surplus funds for non-business purposes. Regarding bogus share capital issue, the ITAT upheld disallowance as the assessee failed to prove the capacity and source of investments by shareholders who had meager income. Conditional benefit was granted to the assessee to submit details of share allotment by respective investors showing source as share application money pending allotment. The appeal was partly allowed.
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Unexplained Investment Quandary: Cash Land Deal Questioned on Advocate's 'Satakat' Evidence.
The case pertains to an unexplained investment u/s 69B, where an addition was made on account of cash payment for the purchase of land. The Assessing Officer relied on a 'satakat' found from the hard disk of an advocate, Turnish Kania, which matched the details of the land purchase by the assessee. The Tribunal observed that the assessee had filed detailed written submissions, contrary to the CIT(A)'s observation. Referring to the case of Kalpesh Mafatlal Patel, where a similar unsigned and undated 'satakat' found from the same advocate was held inadmissible, the Tribunal allowed the assessee's appeal, stating that no addition can be made based on such a document from an unconnected person without specific queries raised. The summary highlights the evidentiary value of the 'satakat' and the principles regarding unexplained investments u/s 69B.
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Income Tax Scrutiny Conducted Without Giving Assessee Proper Opportunity: Addition Based on Auditor's Mistake.
The assessment u/s 143(1) was invalid as the procedure laid down u/s 144B was not followed. The case was selected for regular assessment, but the assessee was not given an opportunity before making the addition. The revenue argued that the intimation order does not merge with the regular assessment when the Assessing Officer taxes the taxable income based on the intimation order u/s 143(1). However, it is well-settled law that an assessee cannot be taxed on an amount not legally imposable. The intimation u/s 143(1) was passed after selecting the case for regular assessment without giving the assessee an opportunity. The regular assessment u/s 143(3) was also passed within three months of the intimation order u/s 143(1). As per the Second Proviso to Section 143(1), no intimation can be sent after the expiry of the prescribed time limit. The assessee could have filed a rectification application u/s 154, which should have been disposed of within six months. However, the regular assessment was passed before that. The addition was proposed based on an apparent mistake, which the authorities failed to appreciate. The assessee did not claim the contingent liability in the profit and loss account, and the mistake was made by the tax auditor. The assessee cannot be penalized for the tax auditor's mistake. To achieve speedy justice, the Assessing.
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Telecom Co. Wins Case: Bandwidth Charges Not Taxable as Royalty.
The assessee, a resident corporate entity providing mobile telecom services in India, challenged the taxability of bandwidth charges remitted to foreign telecom service providers as royalty income u/s 9(1)(vi) of the Income Tax Act. The Tribunal, relying on the Delhi High Court's decision in Telstra Singapore Pte. Ltd., held that bandwidth charges cannot be treated as royalty for use or right to use equipment, secret formula or process. The amendment to domestic law cannot automatically apply to treaty provisions without corresponding changes. Consequently, the bandwidth charges paid by the assessee cannot be treated as royalty under treaty provisions or Section 9(1)(vi), and the assessee was not required to deduct tax at source. Regarding annual maintenance charges (AMC) paid to certain foreign companies, the Tribunal observed that the assessee had not disputed the nature of services as technical before the departmental authorities. However, the issue of whether the services fell within technical, managerial or consultancy services was not examined due to the assessee's stand on the 'make available' condition. The Tribunal restored this issue to the Assessing Officer to factually verify if the services rendered fell within the ambit of technical, managerial or consultancy services. Concerning the demand raised for non-deduction of tax on payment of agency fees, the Tribunal upheld the First Appellate Authority's finding.
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Company's concessional tax rate continues in subsequent years if validly opted earlier.
Once a company validly opts for the concessional tax rate u/s 115BAA for an assessment year, it is not required to exercise the option again for subsequent years, unless the initial option is rendered invalid due to violation of conditions specified in Section 115BAB(2). The Appellate Tribunal held that if the Revenue authorities allowed the lower tax rate u/s 115BAA for an assessment year without finding any error, the company need not file Form 10-IC or exercise the option afresh for subsequent years u/s 115BAA(5). The assessee's appeal was allowed, as the company had validly claimed the concessional rate for the first time in the previous year, and there was no requirement to make a fresh claim by filing Form 10-IC for the current year.
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Earns tax-free interest & dividends, gets Rs. 50K deduction for unspecified activities, govt grant not taxable income.
Cooperative society earned interest and dividend income from investments with cooperative banks and societies, qualifying for deduction u/s 80P(2)(d) to promote cooperative financial activities. Deduction of Rs. 50,000 u/s 80P(2)(c)(ii) allowed as society engaged in activities not specified under 80P(2)(a) or (b). Government grant received under RKVY project for agricultural infrastructure development, credited to joint account with conditions, not taxable income u/s 2(24)(xviii) at time of receipt as per judicial precedents treating restricted grants as capital receipts until utilization. Assessee's appeal allowed by Appellate Tribunal.
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Taxman's Overreach? Assessing Income from Third Party Evidence.
Validity of assessment u/s 153A of the Income Tax Act, where material was found during the search of a person other than the assessee. It examines whether such material can be considered for assessment u/s 153A. The key points are: Section 153A assessment can only be framed based on incriminating material found during the search of the assessee's premises, not from any other person's search. The Delhi High Court's decision in Kabul Chawla's case supports this view. The addition being the difference between ITR filed u/s 153A and Section 139 was an error by the Assessing Officer, as the assessee had revised the income in the same proceedings. Regarding undisclosed income from the Bajaj Enclave Scheme, the assessee's role was limited to investing in land purchase, while others developed and marketed the project. No evidence of undisclosed profit was found at the assessee's premises. The addition of alleged bogus development expenses was incorrect, as the assessee consistently stated that the development expenses were borne by others. The addition u/s 68 for unexplained credits in the bank account was also incorrect, as the assessee provided supporting documents, and the CIT(A) had accepted the declared profit rate. The estimation of profit by the CIT(A) and adding only the profit instead of the whole.
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Fresh claims disallowed in preliminary assessment; appeal rejected.
The preliminary assessment u/s 143(1) is limited to processing the return for arithmetical errors, incorrect expense claims, verifying audit reports, deductions, and cross-checking income against Form 26AS/16A. The AO cannot go beyond this mandate. The assessee made a fresh claim for deduction of prior period expenses and CSR expenses, which was disallowed u/s 37(1) as it was not claimed in the original return. The assessee appealed, but the Tribunal observed that the case laws cited pertain to fresh claims in regular assessment, not preliminary assessment u/s 143(1). The assessee received an intimation u/s 143(1) accepting the return, and the time for revision had elapsed. The Tribunal held that the assessee filed the appeal without any grievance, as the AO accepted the return. Fresh claims can be genuine and traceable from the return or debatable issues requiring verification. The remedy for fresh claims lies with administrative officers or the Board, not appellate authorities. If the Board rejects the application, the remedy is through writ proceedings.
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Business profits fairly accepted; unexplained cash deposits allowed based on non-jurisdictional court rulings.
The ITAT upheld the CIT(A)'s deletion of additions made by the Assessing Officer. Regarding the addition of gross profit (GP) shown by increasing the GP rate, the ITAT found the CIT(A)'s findings logical and justified, as the GP rate was lower than the previous year's rate. On the addition u/s 69A for cash deposited in the bank account, the ITAT accepted the CIT(A)'s reliance on non-jurisdictional High Court decisions in the absence of a jurisdictional High Court order. The ITAT agreed with the CIT(A) that without evidence of bogus sales, sales from accepted purchases and stock cannot be rejected. The ITAT dismissed the Revenue's appeal on both grounds.
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Legal fees disallowed for settlement; Broker's appeal remanded to verify claim.
Assessee, a stock broker, claimed deduction for out-of-court settlement amount and legal fees paid for defending a criminal complaint filed by a client. AO disallowed the claim under Explanation 1 to section 37(1). CIT(A) upheld AO's order. On appeal, ITAT observed assessee failed to establish with supporting evidence that the expenditure was civil in nature and allowable. ITAT provided assessee another opportunity to substantiate claim with details. ITAT set aside CIT(A)'s order and restored the issue to AO for fresh adjudication after providing adequate opportunity of hearing to assessee and examining evidence. ITAT allowed assessee's grounds of appeal for statistical purposes.
Customs
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Export firm's duty drawback claim upheld as bank records proved local supplier payments, overruling authorities' view.
Drawback recovery case involving third-party payments for export transactions. Petitioner contended payments made to local supplier through banking channels, evident from bank statements. High Court held no proper investigation conducted regarding payments to local supplier by Revisional Authority, whose view of non-existence of supplier not based on proper investigation. Bank witnesses confirmed receipt of payments through banking channels. Since export proceeds realized within FEMA stipulated period, petitioner entitled to duty drawback and no justification for freezing bank account. Revisional Authority's order dated 18.08.2022 unsustainable, petition disposed of.
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Customs broker cleared of failing to verify importer details for prohibited goods shipment.
The Customs Broker (CB) was alleged to have violated Regulation 10(n) of the Customs Broker Licensing Regulation, 2018, for failing to verify the antecedents and actual beneficiary in an import consignment containing mis-declared and prohibited goods, including e-cigarettes. The CB had obtained the KYC documents and authorization from the importer, contacted the importer, verified their IEC and KYC details, and provided assistance to the investigating authorities. The Tribunal held that the CB fulfilled its obligations under Regulation 10(n) by verifying the KYC of the client (importer) and acted with due diligence. It is improper to impose a burden on the CB to verify the actual beneficiary beyond the obligations of verifying the client's KYC. The CB's belief that the coordinator was a representative of the importer was bonafide. The allegation of violating Regulation 10(n) was unfounded, and the penalty of Rs.50,000 imposed on the CB was set aside by the Appellate Tribunal.
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Customs valuation: Royalty inclusion for related party imports based on pricing influence.
Valuation of imports from related suppliers and the inclusion or exclusion of royalty in the transaction value. The key points are: Rule 10(1)(c) of the Customs Valuation Rules, 2007 allows for the addition of royalty to the transaction value of imported goods. The Supreme Court in CC vs. M/s Ferodo India Pvt Ltd examined the issue and held that technical know-how and royalty payment are includible in the price of imported goods if it is a prerequisite for the supply by the foreign supplier. However, in the present case, the pricing was at arm's length, and the relationship did not influence the price, which was accepted by the department in past transactions between the same parties. The Commissioner (Appeals) rightly held that there was no question of adding royalty to the transaction value. The CESTAT dismissed the Revenue's appeal, considering the Supreme Court's decision in CC vs. M/s Ferodo India Pvt Ltd.
IBC
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Tax claims frozen after resolution plan approval, belated demands untenable.
The Appellate Tribunal dismissed the appeal, holding that the appellant's claim for outstanding income tax demands against the corporate debtor could not be admitted after the approval of the resolution plan. The key points are: the appellant failed to file a firm and determinate claim within the stipulated timeframe during the CIRP, merely intimating potential heavy tax demands without specifying amounts. The appellant crystallized the tax demands through assessment orders after the CoC and Adjudicating Authority had already approved the resolution plan on 20.06.2022. Once the resolution plan is approved, claims not filed earlier stand frozen and extinguished. Allowing belated claims would undermine the finality of the resolution process and burden the successful resolution applicant with unanticipated liabilities, rendering the plan unworkable. Admitting the appellant's belated claim after plan approval would set an undesirable precedent and cause further delays in the CIRP.
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Belated govt claim for stamp duty rejected after approved insolvency resolution plan implemented.
The Appellant's claim for stamp duty was filed belatedly, around 30 months after the public notice, without any plausible reason for the delay. The Appellant failed to provide a satisfactory explanation for the belated filing of the claim. The Resolution Plan had already been approved by the Committee of Creditors (CoC) and the Adjudicating Authority, taking into account the commercial wisdom and haircut for all stakeholders, including government dues. The Resolution Plan was implemented by the Successful Resolution Applicant (SRA). The Appellate Tribunal found no merit in the appeal and dismissed it, as the Resolution Plan had been approved much earlier than the Appellant's claim submission, and the intended haircut was accepted by all stakeholders, including the Appellant's dues.
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Noida authority's pre-CIRP termination of lease upheld; RP's inclusion of cancelled plot in resolution plan inappropriate.
The Noida authority had terminated the lease deed of the subject land prior to the commencement of the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. Despite this, the suspended management wrongfully included the subject plot in the resolution plan, claiming the lease was still subsisting. The Adjudicating Authority correctly held that since the lease was cancelled before CIRP initiation, the Corporate Debtor had lost possession rights, and the moratorium u/s 14 of the Insolvency and Bankruptcy Code (IBC) would not apply. The Resolution Professional (RP) should not have treated the cancelled plot as an asset and included it in the resolution plan without proper verification. The RP's actions, including preparing the Information Memorandum and obtaining Committee of Creditors' approval for the resolution plan containing the cancelled plot, were inappropriate. The RP failed to play a pivotal role in ensuring transparency and accountability during CIRP. The Appellate Tribunal affirmed the Adjudicating Authority's findings regarding the RP's unbecoming and unfair conduct, dismissing the appeal.
Indian Laws
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Land Dispute Resolved, Lis Pendens Upholds Plaintiff's Claim Over Later Sale.
Suit decreed partially for recovery, doctrine of lis pendens applied. Agreement dated 17.08.1990 not found fraudulent or result of collusion between plaintiff and defendant no. 1. Trial court's finding on issue no. 5 not challenged by defendants through cross-appeal or objections. First Appellate Court erred in finding agreement collusive without cross-objections. Doctrine of lis pendens u/s 52 of Transfer of Property Act, 1882 applies to alienation during pendency of suit, irrespective of notice to alienee. Sale deed executed on 08.01.1993 by defendant no. 1 in favor of defendant no. 2 during pendency of suit filed on 24.12.1992. Plaintiff non-suited on ground of defendant no. 2 being bona fide purchaser without notice, contrary to doctrine of lis pendens. High Court justified in setting aside Trial Court and First Appellate Court judgments, decreeing specific performance. Supreme Court affirmed High Court judgment, dismissed appeal.
PMLA
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Bail granted after 4+ years in jail for money laundering case. Court prioritizes Article 21 over stringent PMLA conditions.
The case pertains to granting bail in a money laundering case involving scheduled offenses under the Prevention of Money Laundering Act (PMLA). The key points are: the applicability of Section 436A of the CrPC, which limits the maximum detention period for an undertrial prisoner, to offenses under PMLA, considering the twin conditions of Section 45 of PMLA. The Supreme Court in Vijay Madanlal Choudhary case held that Section 436A of CrPC will prevail over the rigors of Section 45 of PMLA, allowing relaxation of the twin conditions in case of Article 21 violation. In the present case, the applicant has been incarcerated for around 4 years and 8 months, exceeding half the maximum punishment u/s 4 of PMLA. Considering the long incarceration, the High Court granted bail to the applicant, subject to conditions.
Service Tax
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Taxpayer wins refund of service tax paid to members' club based on mutuality principle.
The appellant paid service tax under protest and filed a refund claim, which was not barred by limitation. The Supreme Court in West Bengal vs Calcutta Club Limited held that the principle of mutuality exempts clubs from service tax on amounts collected from members. The doctrine of unjust enrichment is inapplicable. The appellant is eligible for refund of service tax paid along with interest. The Appellate Tribunal upheld the order and dismissed the Revenue's appeal.
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E-learning for overseas clients & govt skill programs tax-free, trading receipts not services hence non-taxable.
Service tax liability analysis - E-learning course content development and online tutoring services provided to foreign clients considered export of services, not taxable. Training under government skill development program exempt from service tax. Other receipts from purchase and sale of fabrics not rendering of services, hence not taxable. Commissioner's order set aside, appeal allowed by appellate tribunal.
Case Laws:
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GST
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2024 (10) TMI 717
Power of CBIC to issue circular and delegate the functions of 'Proper officer' to issue Audit Report - it was held by High Court that 'no case is made out to strike down the impugned circulars or the impugned show cause notices inter alia on the ground that such show cause notices were issued by the officers who were not the proper officers as defined under Section 2(91) of the CGST Act' - HELD THAT:- Issue notice, returnable in four weeks. List the Special Leave Petition on 14 August 2024.
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2024 (10) TMI 716
Violation of principles of natural justice and fair play - impugned order made without giving the petitioner an opportunity of hearing - HELD THAT:- In this case, the show cause notice dated 10 April 2023 required the petitioner to file a response within 30 days. The notice clearly indicates the date, timing, and venue of the personal hearing. On 21 June 2023, the Petitioner sought time to file a reply. The defence that the show cause notice was not uploaded on the petitioner s designated portal is not convincing. There was undoubtedly some delay in responding to the show cause notice on the petitioner's part. Though the reason for the show cause notice not being uploaded on the petitioner s portal is not very convincing, given the fact that the impugned order was made or digitally signed only on 25 June 2023, the petitioner deserves to be granted an opportunity of hearing subject to the petitioner paying costs. This opportunity would address the argument about natural justice without prejudicing the revenue s interests disproportionately. The reply dated 21 June 2023 does not appear to be on merits, but the reply refers to the show cause notice not being uploaded to the petitioner s designated portal. Accordingly, subject to the payment of costs of Rs. 50,000/-, the petitioner is granted two weeks to file a reply to the show cause notice dated 10 April 2023. After such a reply is filed, the 4th respondent should dispose of the show cause notice dated 10 April 2023 after considering the reply and hearing the petitioner. The show cause notice must be disposed of as expeditiously as possible and, in any event, within eight weeks of receiving the reply if the same is filed. Petition disposed off.
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2024 (10) TMI 715
Violation of principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax demand on merits - petitioner was unaware of proceedings culminating in the impugned order - mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A - HELD THAT:- On perusal of the impugned order, it is evident that the tax proposal relates to a mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A. It is also evident that such tax proposal was confirmed because the tax payer did not file objections to the show cause notice. In view of the assertion that the petitioner could not participate in proceedings on account of being unaware of the same, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits by putting the petitioner on terms. The impugned order dated 23.12.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. The petitioner is permitted to submit a reply to the show cause notice within the aforesaid period - Petition disposed off.
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2024 (10) TMI 714
Levy of GST on the charges paid to the Railways on behalf of Operator and those charges were recovered from the Operator - scope of supply - pure agent service or not - If charges paid to the Railways on behalf of Operator were not come under the scope of the pure agent or liable to be tax then what will be the tax Rate? Scope of supply - Whether GST is required to be paid on the charges paid to Railways on behalf of operator and those charges recovered from operator? - HELD THAT:- As per Agreement entered between Applicant and Indian Railways, the later has supplied various services to the Applicant wherein some of them are taxable and Indian Railways has not entered any Agreement with the operator at all, As the Applicant being recipient of service from the Indian Railways hence required to pay the GST on the charges paid to the Indian Railways and Applicant has sub-late this task to the operator for smooth operation Of Palace On Wheels (POW), operator is supposed to pay the charges to the Applicant and not Indian Railways along with GST as per terms and conditions Of Agreement dated 28.06.2023 entered between them (Rajasthan Tourism Development Corporation Ltd. and the operator). Why not the said charges were come under the scope of the pure agent? - HELD THAT:- A pure agent is a registered taxable person who liaises between other suppliers on behalf of his client. Under this concept, While providing services to the client, he also undertakes to receive other ancillary services from other service providers, and incurs expenditure on behalf Of his client - Since the Applicant has not procured any additional service, there is no question of holding to the title of service and therefore they cannot use any service for their own interest. Since none of the condition of Pure Agent enumerated in a rule 33 of CGST Rule,2017is met, the Applicant cannot act as Pure Agent. As they are not Pure Agent, they are required to pay GST on the taxable supply received from Indian Railways. lf charges paid to the Railways on behalf of Operator were not come under the scope of the pure agent or liable to be tax then what will be the tax Rate? - HELD THAT:- Yes, the charges are paid to the Indian Railways by the Applicant and not operator and therefore are leviable to GST as per the rate given below: 1. Registration Fee @ 18% 2. Haulage Charges @ 5% 3. Right to Use (RU) @ 18% 4. Stabling Charges @ 18% 5. Station User Fee @ 5% 6. Cancellation Charges @ 5% 7. Security Deposit - Though no GST is leviable on this amount but if it is adjusted against any aforesaid charge, then GST will be charged according to that charges.
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Income Tax
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2024 (10) TMI 713
Validity of reopening of assessment u/s 147 - assessee argued non application of mind in granting approval u/s 151 and that is evident from the approval itself - Delay of 201 days in filing the special leave petition - As decided by HC [ 2023 (11) TMI 343 - BOMBAY HIGH COURT] if only the PCIT had read the form for approval carefully with the order that was prepared by the AO under Section 148A(d) of the Act, the PCIT would not have come to the conclusion that there is any material to treat it as a fit case to issue notice under Section 148 or pass order under Section 148A(d) - Also there is default as Personal hearing not being granted - As in every case, before passing an order u/s 148A(d) of the Act, Respondents shall give a personal hearing if requested for by Petitioner. HELD THAT:- There is a delay of 201 days in filing the special leave petition. The reasons assigned for seeking condonation of delay are neither satisfactory nor sufficient in law to condone the same. Hence, the application seeking condonation is dismissed. Consequently, the Special Leave Petition is also dismissed.
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2024 (10) TMI 712
Denial of registration u/s 12A - charitable activity or not - assessee trust is not created for the benefit of general public but one of its object clause is for the benefit of a particular religious community - HELD THAT:- In view of the findings recorded by the Tribunal, supported by decision of this Court in case of CIT V/S Bhaya Kutchhi Dasa Oswal Jain Mahajan Trust [ 2016 (9) TMI 8 - GUJARAT HIGH COURT] that the objects of the trust are not wholly for the benefit of a particular religious community, but are largely charitable in character for general public at large and for the purpose of granting registration under 12A of the Act, the provision of section 13 (1) (b) cannot be referred to. Section 13 (1) (b) is to be applied while granting exemption to the trust. Decided in favour of assessee.
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2024 (10) TMI 711
Additional depreciation u/s 32 (1) (iia) - AO denied claim as assessee is not engaged in manufacture or production of any article or thing - addition on account of alleged incorrect claim of depreciation and additional depreciation on various electrical items by not treating them as plant and machinery - ITAT allowed claim - HELD THAT:- On perusal of the aforesaid provision of Section 32(1) of the Act and proviso thereto read with Section 32 (1) (ii) of the Act, it is clear that the assessee can claim additional depreciation at the rate of 20% of the actual cost of the plant and machinery purchased during the financial year However, such allowance of the depreciation can be claimed only to the extent of 10%, if the plant an machinery purchased by the assessee is used for less than 182 days. Accordingly, the assessee has claim the additional depreciation to the extent of 10% on for Assessment Year 2010-11, and therefore, the claim of remaining 10% additional depreciation is made f the Assessment Year 2011-12. Depreciation on electrical items which are forming part of plant and machinery - Tribunal following the decision of this Court in case of CIT vs. Starlight Silk Mills Pvt. Ltd. [ 2005 (8) TMI 40 - GUJARAT HIGH COURT] wherein it is held that AC plants, electric installation and transformers form integral part of plant and machinery and eligible for depreciation. Similarly, in case of Raw Flints (P) Ltd [ 1987 (1) TMI 490 - ITAT AHMEDABAD] held that electrical installations are integral part of the manufacturing process and cannot be said to be not forming part of plant and machinery. The Tribunal following the aforesaid decision held that the electrical fittings could be forming part of the plant and machinery and the assessee is eligible for depreciation and additional depreciation accordingly. We are in complete agreement with the reasonings given by the Tribunal on the basis of the findings stated herein above
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2024 (10) TMI 710
Reopening of assessment u/s 147 - Validity of the notice issued u/s 148A(b) - notice is issued for calling upon the petitioner to submit various details for verification of the data. HELD THAT:- On perusal of the above provisions, it appears that the AO before issuing the notice u/s 148 of the Act has to conduct the inquiry with prior approval of the specified authority with respect to the information which suggest that the income chargeable to tax has escaped the assessment and after such inquiry, issued the notice u/s 148A (b) of the Act to provide an opportunity of being heard to the assessee by serving a show-cause notice. However, in the facts of the case, the respondent has issued the notice under clause (b) of the Section 148A as if the inquiry is to be conducted under clause (a) of Section 148A of the Act and therefore, the impugned notice cannot be commensurate the requirement of clause (b) of Section 148A of the Act as such notice could have been issued only after conducting the inquiry on part of the respondent-AO. We are of the opinion that the impugned notice issued u/s 148A (b) of the Act could not have been issued for verification on the part of AO and therefore, the same would fail and accordingly, the petition succeeds and the impugned notice dated 05.03.2024 and the consequential order u/s 148A (d) of the Act and the notice under Section 148 are hereby quashed and set aside. We make it clear that if the respondent wishes to re-initiate the proceedings under the provisions of the law, this order would not come in way and the respondent would be at liberty to initiate such proceedings as per the provisions of the Act. Rule is made absolute to the aforesaid extent. No orders as to cost.
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2024 (10) TMI 709
Validity of the order passed u/s 119 (2) (b) - delay in filing return and denial of refund entitlement - revenue rejected the application filed by the petitioner on the ground that the petitioner has not provided any proof to prove the genuineness of the hardship she had faced in not filing the return of income as per Para-5 of the Circular No. 9/2015 - as submitted petitioner is staying at Mumbai and return of income could not be filed by the advocate of the petitioner, HELD THAT:- It is not in dispute that the petitioner has not filed the return within the time limit prescribed u/s 139 (1) and u/s 139 (4) of the Act. It is also not in dispute that the petitioner is entitled to refund on account of excess tax deducted at source. On perusal of computation of income placed on record at Annexure B , it is revealed that the petitioner otherwise was not liable to pay the tax and as such the entire tax deducted at source of interest and dividend is liable to be refunded to the petitioner. As in the case of Bombay Mercantile Co-op. Bank Ltd. [ 2010 (9) TMI 23 - BOMBAY HIGH COURT ] as held that in matters of condonation of delay, a highly pedantic approach should be eschewed and a justice oriented approach should be adopted and a party should not be made to suffer on account of technicalities. The respondent ought to have considered the application filed by the petitioner u/s 119 (2) (b) in accordance with law, without adopting any pedantic technical approach. It is not in dispute from the facts on the record that the petitioner is entitled to the refund - The petitioner is permitted to file the return of income belatedly by exercising the powers u/s 119 (2) (b) of the Act. The present petition is allowed. Matter is remanded back to the respondent to pass an appropriate order, in accordance with law while exercising the jurisdiction under Section 119 (2).
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2024 (10) TMI 708
Assessment order u/s 147 r.w.s. 144B - It is case of the assessee that despite virtual hearing was sought for, without resorting to the same, an order of assessment u/s 147 r/w Section 144B was passed and demand notice and notice of penalty was also served upon assessee - HELD THAT:- In this case, from the facts, it can be noticed that time was granted to give response to the show cause notice to which, assessee responded and, therefore, since the assessee failed to request for video conferencing on or before the time allowed in show cause notice, it is not a case of breach of principles of natural justice. His request was rightly not considered and not forming part of the assessment order. He, thus submitted that there being no error in the assessment order dated 29.03.2022 for the A.Y.2013-2014, the petition may be rejected. Having considered the submissions and the decision relied upon, it is noticed that the final show cause notice was issued to the assessee on 26.03.2022 by granting him time of two days to file his response on or before 23:59 hours of 28.03.2022. It is not in disputes that the reply dated 28.03.2022, was filed despite there being Saturday and Sunday. From the details provided by the assessee it is noticed that on 29.03.2022, the assessee requested for video conferencing hearing where the status of the portal was shown as open. From the above fact, the two undisputed facts are noticed by this Court that, only two days time was given to the assessee to file response and despite sough for, no opportunity of hearing through video conferencing was provided. In the decision relied upon by learned advocate for the petitioner in M/S ADVANCE REALTY DEVELOPERS VERSUS NATIONAL E - ASSESSMENT CENTRE DELHI [ 2021 (12) TMI 1455 - GUJARAT HIGH COURT ], this Court has observed that when there is breach in following the procedure under the provisions of the Act, the assessment framed under the provisions of the sections would be non-est. Further, once the statute provided an opportunity to be availed by the assessee in cases of huge variation, a request for hearing needs to be responded to. Thus it is clear that time granted was too short as also no response was given on the request of hearing through video conferencing, thus violating the principles of natural justice. In view of the above fact, we deem it appropriate to quash and set aside the assessment order u/s 147 r.w.s.144B - Consequentially, the demand notice and penalty notice do not survive and hence stand also quashed and set aside. Writ petition thus stands allowed to the aforesaid extent. Rule is made absolute
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2024 (10) TMI 707
Revision application u/s 264 - LTCG on extinguishment arising on account of loss arising on account of extinguishment of shares of Garden Silk value of shares of Garden silk pursuant to order passed by the NCLT - HELD THAT:- Petitioner has not claimed LTCG on extinguishment arising on account of loss arising on account of extinguishment of shares of Garden Silk value of shares of Garden silk pursuant to order dated 01.01.2021 passed by the NCLT. Respondent No. 1 is however supposed to consider merits of the case while entertaining revision petition filed by the petitioner under section 264 of the Act and it is not in dispute that the petitioner has availed the remedy of revision within the prescribed period of limitation and the respondent therefore ought to have considered the claim of the petitioner for loss on account of extinguishment of the value of shares in the investment of shares of Garden as per the order passed by the NCLT which was not claimed by the petitioner in the original return of income. Case of Pramod R. Agraval [ 2023 (10) TMI 1142 - BOMBAY HIGH COURT] is followed by this Court in case of Jindal Worldwide Limited [ 2024 (8) TMI 1437 - GUJARAT HIGH COURT] as well as Shree Rudra Technocast Private Ltd. [ 2024 (10) TMI 186 - GUJARAT HIGH COURT] wherein, in somewhat similar circumstances, the order passed by the Principal Commissioner of Income under section 264 of the Act was quashed and set aside and the matter was remanded back for reconsideration of the claim of the petitioner which was left out in the original proceeding to be decided on merits. Adopting similar course of action, impugned order in the present case passed by the respondent No. 1 is hereby quashed and set aside and the matter is remanded back to the Principal Commissioner Surat-I respondent No. 1 to decide the revision petition filed by the petitioner under section 264 of the Act on merits after giving opportunity of hearing to petitioner.
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2024 (10) TMI 706
TP Adjustment - comparable selection - Functional dissimilarity - HELD THAT:-The assessee was only providing IT enabled services to banks and financial institutions and carrying on back-end activities pertaining to credit card operations. It is in the aforesaid backdrop that the Tribunal has ultimately come to exclude the comparables which were suggested and which were concerned with Knowledge Process Outsourcing [ KPO ] activities. Nature of expenses - license fee - liable to be treated as capital or revenue - AO held that the acquisition of license granted by the licensor in itself is a capital asset, being intangible asset , which having long validity is capital in nature - HELD THAT:- As in view of decisions in the case of CIT vs. Asahi India Safety Glass Ltd. [ 011 (11) TMI 2 - DELHI HIGH COURT ] and CIT vs. Amway India Enterprises [ 2011 (11) TMI 4 - DELHI HIGH COURT ] we are of the considered opinion that the right to use the visions plus software program does not have any effect of providing enduring benefit and the payment made to GECC(USA) is only the license fees and not the price for acquisition of capital asset. The assessee did not acquire any ownership on the software and after termination of license agreement, all the rights and title remained with GECC(USA). DR failed to dislodge the findings of the Id. CIT(A) given in the orders passed for subsequent years after considering the same license agreement and various decisions of Hon ble High courts and Supreme Court. license fee etc. paid by the assessee to M/s GECC(USA) is revenue expenditure deductible u/s 37. No substantial question of law.
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2024 (10) TMI 705
Validity of assessment order against company already got amalgamated - order passed was on non existence company which was in fact amalgamated - HELD THAT:- If we exercise at the decisions cited by the Revenue in Mahagun Realtors (P) Ltd. [ 2022 (4) TMI 347 - SUPREME COURT ] it is clear that in amalgamation unlike the case of winding up of a corporate entity, the entity still continues enfolded within the new or the existing transferee entity. The Supreme Court has held that, the business and the adventure lives on but within a new corporate residence, i.e., the transferee company. Therefore it become essential to look beyond the mere concept of destruction of corporate entity which brings to an end or terminates any assessment proceedings. Therefore the corporate business continues or the corporate venture continues with the transferree company of the transferor company. Therefore the liability will continue to be shouldered by the transferee company which concept cannot be easily ignored. The very CIT (Appeals) order for the AY 2002-03 shows that the appeal was filed before the CIT (Appeals) in the name of M/s. Shaw Wallace Properties Ltd., i.e., transferor company. Therefore, it was with the knowledge of the assessee that, even though the merger had been taken place w.e.f 30.09.2001 by virtue of the order passed by the High Courts owing to liability of the transferor company, appeal was filed and pursued. A notice to the assessee was also issued at its Chennai address. Since it was not responded, the AO proceeded to conclude the assessment, as the ITAT has remitted the matter back to the AO to do the same. Thus, it cannot be held that the Assessment Order passed by the AO was a nullity. An assessee cannot wriggle out of the assessment proceeding. At the same time, since there has been no effective hearing to the transferee company whereby, the claim for long term capital has been rejected and was assessed to income, to that extent, the Assessment Order also can be said to be invalid. Decided in favour of revenue.
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2024 (10) TMI 704
Disallowance of interest on interest-free loans - diversion of interest bearing funds to other parties - HELD THAT:- As observed that no doubt, assessee has borrowed funds for its business purposes but at the same time assessee also holds huge surpluses in the business and during the year, assessee has utilised an amount for other purposes. Since the assessee has both borrowed and owned funds in the business and the amount utilised for other purposes is very meager compared to surplus available in the business as held in the case of Reliance Utilities Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT ] when the assessee has huge surplus as well as borrowed funds, it is natural to presume that the funds diverted for non-business purpose is only from own funds. Therefore, the disallowance made by the Assessing Officer is uncalled for. Accordingly, the same is directed to be deleted. Hence, ground no.2 raised by the assessee is allowed. Bogus issue of share capital with share premium - onus to prove - AO disallowed the allotment of share capital relating to 8 parties by observing that assessee has not brought on record the respective Directors before him - HELD THAT:- The issue involved is allotment of shares and the assessee has clearly indicated that the assessee has received the cheque and made the allotment that means what is relevant is allotment of shares and confirmation made by the assessee that assessee has already received the relevant cash and as per the provisions of section 39 of the Companies Act, shares cannot be allotted before receipt of money. It is the obligation on the part of the assessee to allot the shares only upon realization of the case. Therefore, as per the information available on record, assessee has allotted the shares after receipt of cash only. Therefore, now claiming that the assessee has actually received or realised the cash in the subsequent year cannot be accepted and it is only an after-thought. Further, it is not brought on record why the payments were received through RTGS after six months of allotment of shares. Therefore, this argument of the assessee is rejected. Various documents submitted by the assessee before the authorities which includes confirmation of investment. Yes, those parties have confirmed and made the payment through banking channel. Yes, all these are regular confirmations or documentations submitted by all the parties to claim that these are genuine transactions. Now, the issue is failure to prove the capacity and identity of the investors/Directors acknowledged before the Assessing Officer during assessment proceedings as well as remand proceedings. This clearly raises several doubts that assessee has to submit additional information to substantiate the capacity and source of such investments. As observed that all the shareholders have meager income from the financial statements submitted before us. It clearly shows that they do not have means of their own to make such investment. Further we observed that all these parties have shown sources of the investment declared as other current liabilities and in detail, all the shareholders have shown as application money received for allotment of securities and due for refund/interest accrued on above . Strangely all the investors have the same source that application money was received for allotment of securities and there is no document submitted that all these companies have allotted the shares against such receipt of application pending for allotment. Therefore, all these shareholders have source which are doubtful and all of them have the same source of receipt of application money and all the application monies so received were all invested in the assessee company. This transaction does raise several questions on capacity of these shareholders. Even during remand proceedings, assessee has merely submitted the information what was already available on record and capacity of the shareholders who made the investments were never proved by the assessee. Therefore, we are inclined to agree with the tax authorities that assessee has proved the identity and failed miserably to prove the capacity of the investors. However, we are inclined to give conditional benefit to the assessee to submit the details of allotment of shares by the respective investors, who has shown the source of funds received as share application pending allotment. Accordingly, we dismiss the grounds raised by the assessee. Appeal filed by the assessee is partly allowed.
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2024 (10) TMI 703
Adjustment u/s 143(1)(a)(iv) being penalty or fine - penalty imposed for delayed intimation of institutional trade to custodian and short collection of margins from clients - Though assessee in tax audit report in Form No 3 CD has shown it to be penalty but now it is contested that same is not disallowable expenses u/s 37 (1) - HELD THAT:- We find that this issue is squarely covered in favour of the assessee by the decision in case of Angel Capital and Debt Market Limited [ 2014 (5) TMI 584 - BOMBAY HIGH COURT] and also the decision of Stock and bond trading company [ 2011 (10) TMI 172 - BOMBAY HIGH COURT] wherein it has been held that the payments made by the assessee to the stock exchange for violation of the regulation are not on account of an offence or which is prohibited by law and therefore invocation of explanation to Section 37 of the Income Tax Act is not justified. We have also considered the nature of penalty which is also levied for the violation of rules and regulation as well as by laws of the Bombay Stock Exchange and National Stock Exchange. Therefore, the issue is decided in favour of the assessee by directing the learned Assessing Officer to delete the disallowance - Accordingly Ground Nos. 1 and 2 of the appeal of the assessee is allowed
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2024 (10) TMI 702
Unexplained investment u/s 69B - addition on account of cash payment made on purchase of land - HELD THAT:- We find that the Assessing Officer made addition by taking view that assessee has purchased the above land which is shown in the satakat found from the hard disc of Turnish Kania Advocate. All the particulars mentioned on the impugned satakat are exactly matching with the ultimate sale deed of the land. It was held that it cannot be said that Satakhat has no evidentiary value which contained details of seller and buyer which are actually recorded in a reversed manner but other specification like measurement of land and location are as per registered sale deed. We find that the assessee has furnished detailed written submission on 19/06/2018 and again on 21/01/2021, copy of acknowledgement of such uploading as well as receipt of such submission is already placed on record. Thus, the observation of ld. CIT(A) is contrary to the facts. However, the detailed written submission filed by assessee has already been recorded by us on the copy of copy of submission placed. As in Kalpesh Mafatlal Patel [ 2022 (12) TMI 936 - ITAT SURAT] on the basis of similar draft Satakhat found from office of Tarnish B Kania, Advocate by holding that no specific query was raised in respect of impounded Satakhat from Tarnish B Kania, Advocate and held that no addition can be made in respect of unsigned, undated Satakhat found from a person not connected with assessee. Assessee appeal allowed.
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2024 (10) TMI 701
Disallowance of bad debts - assessee had claimed deduction for bad debts business loss as disallowed by observing that that these debts were not offered to tax in the earlier year, and that they were capital nature, thus made the disallowance u/s. 36(2) - HELD THAT:- On perusal of the assessment order, it is very clear that all the details necessary to verify the relevant fact in respect of this expenditure claimed by the assessee was available before the AO. AO proceeded to verify the requirement as per section 36(1)(vii) and 36(2) of the Act, for the reason that the assessee nomenclated these expenditure to be bad debt. Before the CIT(A), the assessee raised the contention of considering this expenditure to be business expenditure which has not been verified by the CIT(A). We note that, there is no allegation on behalf of the authorities below regarding these expenditure to be not genuine. CIT(A) has not disposed of Ground no.1 in toto, which has caused prejudice to the assessee. We therefore remand this issue to CIT(A) to verify these expenditure and to consider the claim of assessee in accordance with law. Adhoc disallowance under the head staff welfare expenses, marketing development expenses, conveyance expenses, travelling and conveyance expenses and miscellaneous expenses - HELD THAT:- It is not denied that there is no personal expenditure embedded in the form of marketing development expenses, conveyance expenses, travelling and conveyance expenses and miscellaneous expenses claimed by the assessee that is incurred in cash. It is also submitted that except for self made vouchers, there are no other evidence to support the claim of the assessee. However, the rate of disallowance adopted by the Ld.AO does not have any basis and is on a higher side. We therefore restrict the disallowance to the extent of 10% and direct the Ld.AO to compute the disallowance accordingly.
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2024 (10) TMI 700
Validity of assessment u/s 143(1) - non-following the procedure laid down u/s 144B - as argued selection of the case for regular assessment and the assessee was not given opportunity before making such addition - Revenue vehemently argued that the intimation order does mot merge with the regular assessment when the AO taxes the taxable income based on the intimation order u/s 143(1) - HELD THAT:- It is well-settled law that assessee cannot be taxed at an amount which is not legally imposable. As per the facts on record, assessee chose to address the grievance against wrong order, however we noticed that the intimation u/s 143(1) of the Act was passed after selection of the case for regular assessment and the assessee was not given opportunity before making such addition. We also noticed that after passing of the intimation order u/s 143(1) of the Act within three months, the regular assessment u/s 143(3) was also passed. As per the Second Proviso to Section 143(1) of the Act, no intimation under this sub-section shall be sent after the expiry of one year (9 months as applicable at that point of time) from the end of financial year. Since, in the present case, intimation was passed on 22.09.2022 assessee could have filed rectification application u/s 154 of the Act and the same has to be disposed off within 6 months from the date of reference. In the given case, the regular assessment itself was passed on 28.12.2022. That means assessee could have raised this issue before the AO in the regular assessment itself. Since this is a peculiar case wherein the addition was proposed based on the apparent mistake on record, which was not appreciated by the authorities. Considering these facts on record with the moto of our institution Impartial, Easy Speedy Justice , in our considered view, ld. CIT (A) even though having co-terminus power had failed to appreciate the real facts on record and we do not want to toe the same line of argument of ld. DR CIT (A), particularly when we noticed that the assessee has not made any claim of the contingent liability in its profit loss account and merely based on the mistake of the tax auditor, who wrongly mentioned at Col.21(a) of the tax audit report for such mistake the assessee cannot be penalized. In our view, there is no point in dismissing this appeal and directing the assessee to file a fresh appeal against the intimation order u/s 143(1), we noticed that the AO without making any verification has completed the assessment u/s 143(3) of the Act considering the total taxable income as per intimation u/s 143(1) of the Act. In order to achieve the speedy justice, we are inclined to direct the AO to delete the additions made in the gross taxable income u/s 143(1) of the Act which was borrowed by the AO to compute the assessment u/s 143(3) of the Act to determine the taxable income for the year under consideration. Accordingly, we allow the grounds raised by the assessee.
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2024 (10) TMI 699
Income deemed to accrue or arise in India - taxability of bandwidth charges remitted by the assessee to foreign telecom service providers - royalty income u/s 9(1)(vi) - assessee is a resident corporate entity providing mobile telecom services in India - HELD THAT:- Having examined the relevant facts and nature of payments made, we find that the issue stands conclusively decided in favour of the assessee by the decision of Telstra Singapore Pte. Ltd. [ 2024 (7) TMI 1340 - DELHI HIGH COURT ] While seized with an identical issue relating to taxability of bandwidth charges as royalty income, the Hon ble Jurisdictional court had occasion to interpret the provisions contained under section 9(1)(vi) of the Act and, more specifically, what is meant by secret formula/process etc. as used in Explanation 2, 5 and 6 under section 9(1)(vi) of the Act. After a detailed analysis, the Hon ble Court finally came to the conclusion that bandwidth charges cannot be treated as royalty for use or right to use of an equipment, secret formula or process. The Hon ble Court held that the amendment made to domestic law, cannot automatically be imported to the treaty provisions without making corresponding changes in them. Hon ble Court has observed, the consideration that the service recipient pays also cannot possibly be recognized as being intended to acquire a right in respect of a patent, invention, process or equipment. Thus, the ratio laid down by the Hon ble Jurisdictional High Court as noted above will not only apply to the payees located in treaty countries but also to payees located in non-treaty countries. Thus, in the ultimate analysis, we hold that the bandwidth charges remitted by the assessee to the service providers cannot be treated as royalty either under the treaty provisions or under section 9(1)(vi) of the Act. Therefore, the assessee was not required to deduct tax at source. Grounds are allowed. Taxability of annual maintenance charges (AMC) paid to certain foreign companies as FTS requiring deduction of tax at source - demands under section 201(1)/201(1A) - HELD THAT:- It is relevant to observe that before the departmental authorities, the assessee has never made any substantive argument disputing the nature of service as technical service. In fact, the assessee has taken a stand that since the AO has treated the services as technical in nature, therefore, it is incumbent upon him to establish that the make available condition is satisfied. Therefore, to some extent, there was a tacit acceptance by the assessee before the departmental authorities that the services are of technical nature. Though, learned first appellate authority has held that one need not go to examine the applicability of make available condition as payment made would qualify as FTS, being payment made towards services for ancillary and subsidiary to royalty, however, in our view, such finding of learned CIT(A) is without properly examining the nature of services. Because of assessee s single dimensional stand taken before the departmental authorities that due to non-fulfillment of make available condition, the payments do not qualify as FTS, the basic issue, whether the services rendered fall within the ambit of technical, managerial or consultancy services, have not at all been examined in the context of facts on record. Before us, because of the subsequent change in legal position regarding applicability of MFN clause, the assessee has fairly given up its claim of applicability of MFN clause and the make available condition. This stand having been taken for the first time before us, have not been examined either by the Assessing Officer or by learned CIT(A). The nature of services rendered by the service providers, whether are of technical nature, has to be decided based on examination of specific facts relating to the services rendered. In our view, because of assessee s singular stand relating to non-fulfillment of make available condition, the preliminary issue regarding the nature of services have not been examined at any stage earlier. Therefore, we are inclined to restore this issue to the file of the Assessing Officer to factually verify assessee s claim that the services rendered do not fall withing the ambit of technical, managerial or consultancy services. Ground is allowed for statistical purposes. Demand raised on account of non-deduction of tax on payment of agency fees - FAA held that since the Indian branch of the payee has not played any role in the transaction of arranging loan or reimbursement of interest etc., no part of the receipt towards agency fee can be attributed to the Indian Branches. Therefore, there was no liability on the assessee to deduct tax at source - HELD THAT:- FAA has given a clear factual finding that the payee banks though have branches in India, however, the Indian Branches had not played any role either arranging loan or reimbursement of loan. He has given a finding that the Assessing Officer has not recorded any factual finding regarding the role played by the Indian Branches. In the context of the aforesaid factual position, he held that since Indian Branches have not played any role of facility agent, no part of the agency fee can be attributed to the Indian Branches, even if they are held as PE. Revenue has failed to bring any material before us to controvert the aforesaid factual position brought on record by learned first appellate authority. No valid reason to interfere with the decision of learned first appellate authority. Ground is dismissed.
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2024 (10) TMI 698
Tax on income of certain domestic companies u/s 115BAA - AO disallowing the benefit of lower tax u/s 115BAA to the assessee resulting into tax demand and interest - assessee inadvertently while filing the Income Tax Return for the Assessment Year 2022-23 could not file Form 10IC on the Income Tax Portal though the same has been claimed in ITR as well as Tax Audit Report - HELD THAT:- In the case of Narayani Laxmi Viniyog (P.) Ltd. [ 2024 (7) TMI 1182 - ITAT KOLKATA ] the ITAT held that where assessee-company had validly opted for provisions of section 115BAA for assessment year 2020- 21 and revenue authorities having not found any error in such valid claim had allowed option exercised for lower tax rate for assessment year 2020- 21, assessee was not required to exercise option for subsequent assessment year under provision of section 115BAA(5) unless first option was rendered invalid due to violation of any condition contained in sub-clause (ii) or subclause (iii) of clause (a) or clause (b) of section 115BAB(2) of the Act. There is no dispute to the proposition that the assessee had validly claimed the concessional rate of tax under Section 115BAA of the Act, for the first time in assessment year 2021-22, in our view there is no requirement under the relevant statutory provisions for the assessee to make fresh claim for each subsequent assessment year by way of filing of Form 10-IC with respect to each subsequent year of claim. Once the assessee has validly opted for 115BAA for assessment year 2020-21 and Revenue Authorities having not found any error in such valid claim and has allowed the option exercised for lower tax rate for assessment year 2020-21, then the assessee is not required to exercise the option for the subsequent assessment year under the provision of Section 115BAA(5), unless the first option is rendered invalid due to violation of any condition contained in sub-clause (ii) or sub-clause (iii) of clause (a) or clause (b) of Section 115BAB(2). Appeal of assessee allowed.
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2024 (10) TMI 697
Deduction u/s 80P(2)(d) - Interest and dividend earned from the Ahmedabad Dist. Co. Op. Bank Limited - treatment of a government grant as revenue income - Assessee argued income earned by a cooperative society from its investments with other co-operative societies, including cooperative banks, qualifies for deduction - HELD THAT:- We find that both interest and dividend income earned by the assessee from Co-operative Banks and other Co-operative Societies qualify for deduction under Section 80P(2)(d) of the Act. This deduction is granted to promote cooperative financial activity, and there is no legal basis to exclude cooperative banks from this benefit. Allowing the deduction is consistent with the legislative intent to foster the growth and sustainability of cooperative societies by providing tax incentives on income earned from mutual investments. The income from cooperative banks, whether as interest or dividends, remains within the cooperative framework, justifying the tax relief. Jurisdictional precedents from the Gujarat High Court and Co-ordinate bench consistently support the view that income earned from cooperative banks should be deductible under Section 80P(2)(d) of the Act. The assessee, being a cooperative society engaged in collecting and marketing milk, primarily falls under activities that are not directly specified in Section 80P(2)(a) or (b) of the Act. Therefore, the assessee qualifies for the standard deduction of Rs. 50,000/- under Section 80P(2)(c)(ii) of the Act. The CIT(A) denied the deduction of Rs. 50,000/- claimed under Section 80P(2)(c)(ii) without providing any substantive reasoning or analysis of the statutory provisions. The provision clearly mandates a deduction for cooperative societies engaged in activities other than those specified under Section 80P(2)(a) or (b) of the Act. The statutory language does not impose additional conditions or exclusions that would disqualify the assessee from this benefit. The disallowance of this deduction by the AO and CIT(A) is hereby set aside, and the deduction is allowed in full. Characterization of income - government grant receipt under the Rashtriya Krishi Vikas Yojana (RKVY) project, specifically for implementing infrastructure and development activities for agricultural upliftment - grant was credited to a joint account controlled by the assessee and the Department of Horticulture, as per the terms of the MOU - HELD THAT:- We conclude that the government grant received by the assessee under the RKVY did not confer an unconditional economic benefit to the assessee and, as such, did not qualify as income under Section 2(24)(xviii) of the Act, at the time of receipt. Judicial precedents consistently support the position that grants restricted by purpose and subject to refund obligations are to be treated as capital receipts until they are actually utilized for the designated purposes. The addition made by the AO and confirmed by the CIT(A), treating the grant as taxable income, is erroneous and lacks legal justification. Therefore, addition is hereby deleted. Assessee appeal allowed.
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2024 (10) TMI 696
Validity of assessment passed u/s 153A - material found in the search of any other person than the assessee - validity of search conducted - assessee expressed his surprise as to the conduct of the search in the case of the assessee which remained 5 minutes only and nothing has been found incriminating from the premises of the assessee - HELD THAT:- As is evident that a search seizure operation u/s.132(1) of the Act was carried out on 30.06.2016 at the various premises of Bajaj Group, kota. Whereas in the case of the assessee, a search was conducted at the resident of the assessee on 01.07.2016. As is evident from the record that the alleged search in the case of the assessee was carried out only for five minutes starting at 2.55 and ended at 3.00 - AO through ld. DR did not place on record the nature of document found at the premises of the assessee which are incriminating in nature. With this basic fact now, to decide the technical ground raised by the assessee and before going further on the issue we would like to go through the relevant provisions of section 132 and 153A of the act along with Rule 112 of the Income-tax Rules' 1962. Provisions of section 132 and 153A of the act along with Rule 112 of the Income-tax Rules' 1962 activate the applicability of provision of Section 153A of the Act will arise - Search warrant can be issued against any person who is falling within the scope of either or more of the conditions as mentioned in clause ( a ),( b ) or ( c ) of section 132(1) and against whom reasons to believe has been formed based on the possession of information. Therefore, the warrant of authorization so issued should specify the name of the person or persons against whom it is issued along with the complete address of the premises to be searched. In other words, if a warrant of authorization has not been issued in case of a person, the provisions of Section 153A cannot be initiated in his case. Whether any material found in the search of any other person than the assessee can be considered in the assessment u/s 153A of the assessee? - As decided in Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] completed assessment can be interfered with by the Assessing Officer on the basis of any incriminating material unearthed during the course of search. If in relation to any assessment year no incriminating material is found, no addition or disallowance can be made in relation to that year in exercise of power under section 153A of the Act. The reference to the incriminating material in the above decisions of Hon'ble High Court is about incriminating material found as a result of search of the assessee's premises and not of any other assessee. On a conjoint noticeable provision of section 153A read with section 132 of the act and the judgment of the Delhi Court, in our considered opinion only the material unearthed during the course of a search by virtue of execution of a particular warrant of authorization q ua a person can be used for framing assessment u/s 153A of the act in case of such a person. Also see ABHISAR BUILDWELL P. LTD. [ 2023 (4) TMI 1056 - SUPREME COURT] Based on the discussion so recorded and the fact of the case is that in the search conducted at the premises of the assessee no incriminating material was found and therefore, no addition can be made in the case of the assessee invoking the provision of section 153A. Addition being the difference between ITR filed u/s. 153A and ITR filed u/s. 139 - On this aspect of the matter the bench noted that it was a error on the part of the ld. AO to make such addition as the assessee has in that proceeding itself revised the income by filling the revised computation filed declaring total income at Rs. 29,43,477/- and deposited tax of Rs. 10,38,490/- thereon. Therefore, the AO is wrong to say that assessee reduced income in the ROI filed u/s 153A, which is not meant for reducing income already declared. Hence, it is a mere suspicion and no valid basis. DR did not controvert this factual aspect, therefore, ground no. 3 raised by the assessee is allowed. Undisclosed income from Bajaj Enclave Scheme - According to the oral agreement the assessee has to make investment in the purchase of land and these persons will develop the land and also deal with the customers. These persons having made negotiations with the customers, were having direct contact with / approach to the customers. The assessee only received the amount from the buyers as per sale agreements and after receiving the full payment executed the legal papers in favour of the customers w.r.t. transfer. The assessee was not in the knowledge of excess money, if any received by these people from the customers. However, it is a fact that the assessee did not receive anything over and above the amount showing sale agreement amount. Moreover, the assessee recorded all these transactions in his books of account fairly. There was no any iota of evidence found (showing un-disclosed profit earned by the assessee in the sale transaction if any) at the premises of the assessee except his solitary statement which was given by the assessee with the advice of his associates during the search. In fact, these amounts were also appearing in the documents found and seized from the third-party premises. Based on these observations ground no. 4 raised by the assessee is allowed as the actual profit earned by the assessee has already been taxed. Addition of alleged bogus development expenses - Ignoring the reply of the assessee, the AO finally concluded that the claimed expenditure of Rs 8.50 Cr and the development was never incurred, and it was merely an attempt to reduce the taxable income, it was a claim of bogus expenditure made. We note from the statement so recorded ld. AO failed to appreciate the fact that assessee consistently contended that he never incurred any expenditure on account of development of expenses. The assessee only purchased the land and associated with these three people for developing, plotting and marketing the land. All the development expenditure was borne by the Shri Surinder Pal Singh, Shri Vipin Kumar Lodha and Shri Harvinder Singh - AO also did not consider the reply to question no 8. Based on these set of fact when the part of development and marketing is the activities fixed for other persons there was no need for the assessee to incur any expenditure. Based on these observation ground no. 5 raised by the assessee is allowed. Addition u/s 68 - unexplained credit in the bank account of the assessee - HELD THAT:- Assessee filed various details in support of the credit made in the bank account. CIT(A) not having rejected any of the supporting documents which clearly depicted the actual profit earned by the assessee Rs 28.39 lakh out of the declared sale consideration and was also declared in the Revised Computation as admitted by the CIT(A) himself and even by the AO. Thus, there was no reason for the CIT(A) to have applied in the appellate stage to higher GP rate of 26.78% [ derived from the seized material of total estimate of project] as against the declared profit rate of 13.75%. The revenue has not taken any specific ground against the deletion Mby the ld. CIT(A). Thus, we see no justification behind making a new addition of Rs. 46,94,853/- while deleting the addition of Rs 2.18 crore by him. Based on these observations ground no. 6 raised by the assessee is allowed. Estimation of profit by the ld. CIT(A) and adding only profit instead of whole credit in the case of the assessee - as per AO as assessee failed to explain the nature and source of the credit with documentary evidence and therefore, the whole credit is required to be added - HELD THAT:- AO has not disputed the purchase consideration and its related evidence now the revenue cannot dispute that ld. CIT(A) should have sustained the whole credit being the sales consideration against which claim of cost was allowed based on the evidence placed on record. Therefore, ground no. 3 has no force and the same is dismissed. As regards the ground no. 2 raised by the assessee as the third-party document seized suggest the profit of the project @ 26.78 % which is finding of fact by the ld. CIT(A) and in this appeal no contrary material is brough on record and therefore, ground no. 2 raised by the revenue also stands dismissed.
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2024 (10) TMI 695
Estimation of income - bogus purchases - CIT(A) restricting the addition to 10% as AO applied 12.5% - HELD THAT:- The assessment was re-opened in assessee's case based on information received from DGIT (Inv.) with regard to certain alleged bogus purchases. Assessee has not fully discharged its onus of proving the genuineness of the purchases. Even before the CIT(A) the assessee did not furnish any further details except the purchase bills and bank statements as submitted before the AO. Considering the facts of the present case in our considered view the AO has correctly applied the G.P. percentage of 12.5% on the impugned transactions and to this extent the order of the CIT(A) is set aside. The ground raised by the Revenue in this regard is allowed. Addition u/s 68 - unexplained cash deposits - CIT(A) deleted addition - HELD THAT:- From the perusal of the findings of the AO with regard to the basis on which the addition is made it is clear that the AO has not recorded any adverse finding with regard to the documents submitted by the assessee explaining the source of cash deposits. The AO has made addition only for the reason that the assessee has not explained the purpose of which cash was withdrawn and also that when other modes of payment are available why the assessee needed cash. CIT(A) has given relief to the assessee after considering this fact and therefore we see no infirmity in the order of the CIT(A) deleting the addition made under section 68 - Decided against revenue.
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2024 (10) TMI 694
Remedy for making fresh claim - fresh claim made in preliminary assessment u/s 143(1) - Deduction of the prior period expenses and CSR expenses disallowed u/s. 37(1) - Assessee failed to claim the same in the original return of income - DR submitted there is no grievance to the assessee as the AO accepted the return of income filed by the assessee and the issue raised by the assessee in the present appeal is not covered u/s 143(1) HELD THAT:- We observed that all the case law relied by the assessee are relating the fresh claim made by the assessee in the regular assessment proceedings, not in the case of preliminary assessment u/s 143(1) of the Act. The mandate of the preliminary assessment u/s 143(1) of the Act is different, it is only to process the return of income to vouch for the arithmetical error, detect the incorrect claim of expenses, losses, verify and cross check the claim made in the audit report, claim of deductions, cross verify the income declared in form 26AS or form 16A etc. The AO is not allowed to go beyond the above mandate given under section 143(1) of the Act. We observe from the record that the assessee has received the intimation u/s 143(1) and its case was not selected for the regular assessment and also the time for revision of return also already elapsed. The assessee finds it easy to claim the same by filing the appeal before appellate authorities. In our considered view, the assessee has filed the present appeal before us without there being any grievance in preliminary or intimation order in which the Assessing Officer accepted the return of income filed by the assessee. A Assessee may have two types of fresh claim, which may be genuine claim which is traceable from the return filed by the assessee, which can be claimed by the assessee, the other type is debatable issues which may be claimed only upon making proper verification and assessment, this will lead to discretion of the relevant authorities including the Board. The remedy for the fresh claim is not with any appellate authority and the remedy lies only with the administrative officers or with the board. In case the board rejects the application, the remedy available only in the writ proceedings. With the above observations, we are inclined to dismiss the grounds raised by the assessee.
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2024 (10) TMI 693
Rejection of application filed for approval u/s 80G(5)(iii) - delay of almost 11 months for filling application for approval - HELD THAT:- Since in the instant facts, as it evident from the various dates mentioned above, the assessee / Applicant Trust had filed application for grant of final approval u/s 80G(5) of the Act on 28.04.2023 and as noted by us in the preceding paragraphs, the assessee could have filed application for grant of approval on or before 30.09.2023 which further stood extended to 30.06.2024 vide Circular No. 7/2024 dated 25.04.2024 then, in our considered view, the application for grant of final registration u/s 80G(5) of the Act could not be denied only on the ground that the same was not filed before 30-09-2023. Accordingly, matter is restored to file of Ld. CIT(E) de-novo consideration after giving due opportunity of hearing to the assessee, and then decide the application of the assessee, in accordance with law - Appeal of the assessee is allowed for statistical purposes.
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2024 (10) TMI 692
Addition of GP shown by the Assessee by increasing GP rate from 3.18% to 3.43% - CIT(A) deleted addition - HELD THAT:- We find that the ld. CIT(A) has given a very clear findings on the addition on the basis of GP ratio. He has categorically stated in his order that since the GP rate of the year under consideration is less than the GP ratio of the previous year, therefore, increase in GP ratio on estimated basis by the AO is not justified to the extent the Assessing Officer has done. We have considered the arguments of DR and Assessee on this issue. We have also gone through the findings of the CIT(A) on this issue in his order and we find that the findings given by the CIT(A) on this issue is very logical and thus justified hence it needs no interference. Accordingly, Revenue s appeal on this Ground is dismissed. Addition of cash deposited in bank account of the Assessee u/s 69A - CIT(A) deleted addition - HELD THAT:- CIT(A) has followed the decisions of non-jurisdictional High Courts on this issue. Here we want to make it clear that in the absence of an order of the jurisdictional High Court, relevant orders on the same issue of even non-jurisdictional High Court are also accepted. It is a normal practice and thus there is nothing wrong in it. We have also considered the arguments of the Counsel of the Assessee and the findings given by the ld. CIT(A) in his order. We find that it is a matter on record that regarding allegation of bogus sales, nothing has been brought on record by the AO - AO has accepted all the purchases along with opening and closing stock of the Assessee. Then on what basis sales out of such stock / purchases may be rejected without any proof brought on record. Thus, the above findings given by the ld. CIT(A) on this issue in his order is very much justified and needs no interference.
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2024 (10) TMI 691
Disallowance of out-of-court settlement amount paid and legal fees paid for defending a criminal complaint under Explanation 1 to section 37(1) - HELD THAT:-The assessee is a stock broker and was in the business as stock broking services and due to trading in the clients account, the client has filed the criminal case. AO has relied only on the facts in respect to the transactions of exceptional items claimed but there is no findings or information with respect to the FIR and report of the criminal case as it was not submitted by the asssessee mentioned in the order of the CIT(A) and pointed out by the DR in the course of hearing. The assessee could not establish with the supporting evidences, that the claim of the asssessee is a civil expenditure allowable under the Act. Therefore, submissions and to meet the ends of justice, we shall provide with one more opportunity of hearing to the asssessee to substantiate with the details, accordingly we set aside the order of the CIT(A) and restore the disputed issues to the file of the AO to decide afresh on merits and the assessee should be provided adequate opportunity of hearing and to file the information and evidences on the disputed issue and shall cooperate in submitting the information. And we allow the grounds of appeal of the assessee for statistical purposes.
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Customs
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2024 (10) TMI 690
Recovery of drawback availed with interest and penalty - third-party payments for export transactions - contention of the petitioner is that petitioner had made payments to the local supplier through banking channels, which is evident from his bank statement - HELD THAT:- There appears to be no investigation regards the payments made by the petitioner to the local supplier and therefore the view taken by the Revisional Authority regarding non-existence of the local supplier is not based on a proper investigation. The bank witnesses have made it clear that payments were received through banking channels. Since export proceeds have been realized within the stipulated period as prescribed in FEMA, it is opined that the petitioner is entitled for the grant of duty drawback and there is no justification for freezing of the bank account of the petitioner. The order passed in revision dated 18.08.2022 cannot be sustained - petition disposed off.
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2024 (10) TMI 689
Imposition of conditions on petitioner for two bills of entries including bond and bank guarantee - violation of principles of natural justice - HELD THAT:- The emails and notices required the petitioner to produce some documents in connection with the two bills of entry. However, none of these emails or notices even hinted at any proposal requiring the petitioner to furnish a full bond and bank guarantee to secure 100 per cent of the differential duty. None of the emails or notices even referred to the provisions of Rule 6 (4) (C) of the CAROTAR Rules 2020. Accordingly, no opportunity was granted to the petitioner or its customs broker to submit their say on the proposal for submitting a full bond and bank guarantee. The principles of natural justice would require the party noticee to have a fair idea of the case it must meet. Petition disposed off.
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2024 (10) TMI 688
Condonation of delay of eighty-three days in filing the appeal - gross error of law in dismissing the appeal instead of taking of the appeal on merit - non-action on the part of the petitioner - lack of proper legal advice - HELD THAT:- In terms of Section 128 of the Customs Act, the maximum time period for filing an appeal is sixty days with a condonable period of thirty days. Therefore, beyond ninety days the Commissioner of Customs (Appeals) cannot entertain an appeal. Therefore, the order passed by the Commissioner of Customs (Appeals) cannot be faulted nor order passed by the learned Tribunal. However, the facts and circumstances of the case and also the revenue involved, the appellant was refunded the special additional duty based upon the documents submitted one of which was the Chartered Accountant s certificate. The department after issuing the refund issued a show cause notice under Section 28(4) of the Act on the ground that refund has been erroneously made as the Chartered Accountant s Certificate is not a valid certificate since on the date of issuance of certificate by Chartered Accountant the Chartered Accountant was no more - what was refunded to the appellant was Rs.4,81,212/- and the amount is not a substantial amount. The case on hand is a peculiar case which would call for appropriate remedy. For the above reasons, the appeal is allowed and the order passed by the learned Tribunal, Commissioner of Customs (Appeals) and the order passed by the adjudicating authority dated 3rd November, 2016 are set aside and the matter is remanded back to the adjudicating authority namely the Refund Section of the Customs House and the appellant is directed to produce a fresh Chartered Accountant s Certificate which shall be examined, verified and a fresh order be passed by the adjudicating authority in accordance with law. Appeal allowed by way of remand.
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2024 (10) TMI 687
Levy of penalty under Regulation 18 of Customs Broker Licensing Regulation, 2018 - mis-declared and prohibited goods, including E-Cigarettes concealed with the declared goods - failure to verify the antecedents of KYC of the actual beneficiary - failure to fulfill its obligations under Regulation 10(n) of the CBLR, 2018 - HELD THAT:- Both the inquiry officer and the Adjudicating Authority had recorded the finding that the CB has obtained all the KYC documents of Shri Arun Goel, proprietor of M/s. Aparna Overseas (importer). Even in the show cause notice, it has been noted that the CB had produced the KYC documents along with authorisation from the importer. It has also come on record that the CB contacted the importer and made inquiry about their IEC and KYC details and also verified their address. The provisions of Regulation 10(n) imposes the obligation on the CB only qua their client, which in the present case is the importer, in respect of whom the importer here fulfilled all the responsibility. Thus, the CB complied with the obligations as per Regulation 10(n) and thereby acted with due diligence. Consequently, there is no contravention of the said provisions. Further, from the records of the case, it appears that CB provided the mobile numbers of Ashok Kumar, his wife and son, and also the residential address, Card number and also provided necessary assistance, which enabled the Investigating Authority to trace out Shri Ashok Kumar. The fact that the consignment contained E-Cigarettes revealing mis-declaration of goods was promptly informed by the CB to the departmental officers. The Investigating Authorities were able to examine Dr. Rajesh Kumar and the CB several times. All this is sufficient to show that the CB duly cooperated with the department. Once there is no violation of the provisions of Regulation 10(n), there is no justification to impose any punishment under the provisions of CBLR. It is highly improper to impose a burden on the CB to verify, who is the actual beneficiary in a transaction. The CB cannot be expected to act as an investigating agency and go beyond his obligations of verifying the KYC of his client. Both the Enquiry Officer and the Adjudicating Authority have laid unnecessary emphasis on the statement made by the proprietor of the CB that in his opinion, he is the actual beneficiary of the goods. Mere opinion at a later stage when the goods were found to be mis-declared is not sufficient to bring the contravention of the provisions of Regulation 10(n). The fact that Ashok Kumar was coordinating with the CB, the CB was under the bonafide belief that he was merely a representative of the importer or IEC holder. In the show cause notice the only allegation made against the appellant is the violation of the provisions of Regulation 10(n) of CBLR, 2018 and a finding to that effect has been recorded in favour of the appellant - the impugned order in so far as it imposes the penalty of Rs.50,000 on the CB is unsustainable and is set aside - appeal allowed.
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2024 (10) TMI 686
Valuation of imports made from the related suppliers - royalty can be added to the transaction value of the imported items as per Rule 10(1)(c) of the Customs Valuation Rules, 2007 or not - HELD THAT:- The Hon ble Supreme Court in the matter of CC Vs. M/s Ferodo India Pvt Ltd [ 2008 (2) TMI 12 - SUPREME COURT] examined the issue regarding includability of Royalty in the assessable value of imported goods and after considering the judgment in M/s. Matsushita Television Audio (I) Ltd., [ 2007 (4) TMI 5 - SUPREME COURT] referred by the Appellant, it is held that technical know-how and payment of Royalty is includible in the price of imported goods, if the payment constitute a condition pre-requisite for supply of imported goods by foreign supplier. In the present appeal, the facts have clearly proved that the pricing was at arm s length and the relationship had not influenced the price, which has been accepted by the department in past transactions between the same parties. The issue is squarely covered by the decision of the Hon ble Supreme Court in the matter of CC vs M/s Ferodo India Pvt Ltd. Thus Commissioner (Appeals) has rightly held that there is no question of adding the royalty to the transaction value. The appeal filed by the Revenue is not sustainable, hence liable to be rejected - the appeal filed by the Revenue is dismissed.
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2024 (10) TMI 685
Classification of imported DLP data projectors - to be classified under Customs Tariff Heading (CTH) 8528 6100 by claiming exemption from Basic Customs Duty (BCD) under Notification No.24/2005-Cus. (Sl.No.17) dated 01.03.2005 or under CTH 8528 6900 as other projectors denying the benefit of the said Notification? - HELD THAT:- In the case of M/s. Acer India Private Limited vs. Commissioner of Customs, Chennai [ 2010 (11) TMI 898 - CESTAT BANGALORE] , the Tribunal after considering similar set of facts held ' Looking at the features of the Impugned data projectors imported by the appellants, we have no doubt in our mind that the same merit classification under SH 852861 and automatically become entitled to exemption under Notification No. 24/2005 as the same exempts all goods under the said sub-heading.' The said judgment has been followed subsequently by this Tribunal in one of the respondent s own case i.e., M/s. Acer India Pvt. Ltd. vs. CC, Chennai [ 2024 (1) TMI 147 - CESTAT CHENNAI] , wherein the benefit of the Notification No.24/2005-Cus. dated 01.03.2005 has been extended to the imported DLP Data Projectors classified under CTH 8528 6100. Thus, merely because the imported products have additional facility like attachment of Video Port, S-Video Port, HDMI, etc., the impugned goods cannot be classifiable under CTH 8528 6900 - the impugned orders are upheld and appeals filed by the Revenue are dismissed.
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Insolvency & Bankruptcy
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2024 (10) TMI 684
Failure to take into cognizance of the claims filed by it in respect of the outstanding income tax demands raised on the Corporate Debtor while approving the resolution plan - timeliness in the completion of assessment proceedings by the Appellant - admission of belated claim after the approval of the resolution plan. Whether the claim was filed by the Appellant within time and, if so, how the claim was treated by the RP in the CIRP of the Corporate Debtor Company? - HELD THAT:- No determinative or crystallised amount has been indicated by the Appellant as their claim amount. Mere intimation by the Appellant to the RP of heavy income-tax demand on the Corporate Debtor cannot be construed in any manner to be equated with filing a claim before the RP. Apart from not indicating any firm claim amount, the Appellant has mentioned in Form B the multiple litigations surrounding the said claims. This is indicative of the nebulous and indeterminate claim amount in Form B. The Appellant was required to submit the crystallised claim within the stipulated time frame in terms of CIRP Regulations to the RP for collation and verification of the same for the same to be duly reflected in the IM. The Appellant in the present facts of the case is trying to make recovery of claims which it is not entitled to recover because of inaction of their part to file their claim on time. On this count, in the absence of the Appellant having filed firm and determinate claims on time, there are no reason to hold the conduct of the RP to be faulty or questionable. It is pertinent to note that the CoC had already approved the Resolution Plan by then. It is also clear from material available on record that the Appellant had crystallised their tax demands for A.Y. 2013-14 to A.Y. 2019-20 by passing assessment orders dated 29.06.2022 to 01.07.2022. This leaves no doubt in our minds that the demand was raised by the Appellant on the Corporate Debtor Company after the CoC and the Adjudicating Authority had already approved the resolution plan on 20.06.2022. Whether such belated claim can be admitted after the approval of the resolution plan? - HELD THAT:- The Adjudicating Authority has concluded that once the Resolution Plan was duly approved by the CoC, the claim filed with the RP stands frozen. Since Appellant had failed to file its claim with the RP before the Resolution Plan was approved by the CoC, their claim stands extinguished. The Appellant having failed to file its claim on time before the RP, it cannot be allowed to saddle the SRA with the liability of its claim which was never filed on time. There is a concomitant need to impart finality to the resolution process by protecting a successful resolution applicant from unnecessary litigation arising out of undecided claims. No proceeding can be initiated or continued in respect of a claim which is not part of the resolution plan or was not preferred at the relevant time. No fresh claims can be lodged or enforced against the SRA after the approval of a resolution plan for when any sudden and fresh claim pops out in respect of the Corporate Debtor, the very calculations on the basis of which the SRA has submitted its plans, would go haywire and the plan would be unworkable. In the present case there is no dispute with the facts that the claims made by the Appellant in pursuance to the assessment proceedings were finalised after the approval of the resolution plan by the CoC and the Adjudicating Authority. Allowing the claim at this belated stage would unleash the hydra-headed monster of undecided claims on the SRA and would have the effect of setting the clock back causing further delay in the CIRP of the Corporate Debtor. Thus, no error was committed by the Adjudicating Authority in approving the resolution plan - appeal dismsised.
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2024 (10) TMI 683
Seeking declaration to the effect that claim of the Appellant being in the nature of Stamp Duty and cannot be ignored by the Resolution Professional - applicant authorities have filed their claim at the belated stage - Appellant submitted that without paying the statutory claims, the company does not get a clear and marketable title of the properties in question - HELD THAT:- It is noted from the pleadings of the Appellant that he was informed for the first time by the Respondent on 17.02.2021 whereas which was much delayed after the public announcement on 03.09.2020. One query was raised by this Appellate Tribunal to the Appellant that even for argument s sake the Appellant came to know only on 17.02.2021 why did the Appellant file the claim only on 23.03.2023 i.e., after more than 2 years and not immediately after 17.02.2021, the Appellant could not response properly on this pointed query. Thus, it is noted that there was no plausible reason for the Appellant to explain his conduct of filing such belated claims after 30 months of the public notice. It is noted that the Appellant stated that his claims are to be treated at par with land revenue dues and the CIRP proceeding was initiated only in 2018. For this query of this Appellate Tribunal, no specific answer could be furnished by the Appellant to elaborate action taken by the Appellant in realising its dues even prior to initiation of the CIRP. We have already noted in previous paragraphs that even the claims were filed by the Appellant after 30 months of the CIRP. The issue of the stamp duty was indeed provided in the Resolution Plan in the ambit of the Code and the same was considered by the CoC exercising their commercial wisdom and finally the Resolution Plan was approved by the Adjudicating Authority. The Resolution Plan was approved by the Adjudicating Authority by vide Impugned order dated 12.10.2023 and it is seen that the total claims which was filed were of Rs. 1695.85 Crores and the claim of Rs. 1672.08 Crores were admitted - Thereafter the Adjudicating Authority approved the Resolution Plan of M/s Steel Strips Wheels Limited who propose to infuse Rs. 138.15 Crores. Obviously, the intended hair cut is being taken by all the Stakeholders including the Secured Financial Creditors, Operational Creditor and the Government dues. Therefore, the Appellant s challenge on account of non-payment of full dues is not convincing. It is the fact that the Resolution Plan was approved by the CoC much earlier then the claim submitted by the Appellant. The Resolution Plan is stated to have been implemented by the SRA. There are no merit in the appeal. The appeal deserved to be dismissed and stand dismissed.
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2024 (10) TMI 682
Termination of lease deed of the subject land by the Noida authority prior to the commencement of the CIRP of the Corporate Debtor - inclusion of subject plot in the resolution plan despite the lease cancellation - wrong and fraudulent action of the suspended management of the Corporate Debtor that the lease over the land was still subsisting - HELD THAT:- The material on record clearly show that the lease of the subject plot was cancelled by Noida authority on 13.08.2015. Nothing has been placed on record to show that the lease deed of the said plot was restored to the Corporate Debtor except that an application had been filed by the suspended management after a gap of 305 days before the Noida authority seeking restoration - In the present case, the Adjudicating Authority has correctly held that since the lease deed had been cancelled much before the commencement of the CIRP, the Corporate Debtor had lost the right to possess the subject plot before the initiation of CIRP. Since the subject plot ceased to be an asset of the Corporate Debtor with effect from 13.08.2015, the provision of moratorium in terms of Section 14 of the IBC will not get attracted in the present case. There is nothing on record to show that post cancellation of the lease deed, the Noida authority was paid any lease rent or there is any written permission or assent of the Noida authority for restoration or continuation of the said lease. Simply by having filed an application for restoration of the said plot of land, the deemed subsistence or continuation of the lease deed cannot be presumed. The lease having been cancelled on 31.08.2015 for want of deposit of necessary lease rent/charges in terms of the allotment, the lease land could not have been made a part of the resolution plan of the Corporate Debtor - Basis the wrongful obtaining of RERA registration, it cannot be rightfully claimed by the RP that the lease was subsisting or stood revived. Despite knowing that the lease had been cancelled by the Noida authority, merely on the pretext that the cancellation of the lease was not followed up with other measures by the Noida authority, the RP should not have treated the subject plot to be in the possession of the suspended management. Given this set of facts, RP should have been more circumspect and should not have agreed to make the housing project of suspended management on the subject plot a part of the resolution plan. Instead, the RP continued to take all actions including preparation of the IM projecting the cancelled plot as the asset of the Corporate Debtor and getting approval of the resolution plan from the COC as if the said plot existed with the corporate debtor. Such a resolution plan which is premised on the basis that the land belonged to the Corporate Debtor could not have been considered by the COC - The Adjudicating Authority in its order dated 20.02.2020 had directed the RP to file a complaint with the EOW cell of Delhi police and this again shows that RP had not taken this action on his own volition but was goaded into action by the RP. There is no quarrel that during the CIRP process, RP is expected to play a pivotal role, so as to effectively assume control of the corporate debtor's management and become responsible for overseeing all aspects of CIRP. RP's underlying mandate is to ensure efficiency, transparency, and accountability within the insolvency resolution process marked by a nuanced equilibrium among creditor rights, stakeholder concerns, and procedural equity. In the present case, the Adjudicating Authority has rightly noted that the role of the RP has leaned towards justifying the wrongful action of the suspended management - there are no error in the findings arrived at by the Adjudicating Authority and affirm the observations made in respect of the unbecoming and unfair conduct of the RP. There are no reasons to interfere with the impugned order in particular with regard to the observations made on the role of the RP - there are no merit in the appeal - appeal dismissed.
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PMLA
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2024 (10) TMI 681
Seeking grant of bail - Money Laundering - scheduled offences - long incarceration under Section 436A of the CrPC - whether twin conditions of Section 45 of the PMLA Act are fulfilled - effect of the twin conditions on the entitlement of the Applicant in getting bail - HELD THAT:- It is required to be noted that the Supreme Court in the case of Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT ] considered the applicability of Section 436A of the CrPC which is concerning the maximum punishment for which an under trial prisoner can be detained to the offence punishable under PMLA, in view of Section 45 of PMLA imposing twin conditions before considering application of the Accused facing prosecution for the offences under the PMLA. It has been held that Section 436A of the CrPC has come into effect on 23rd June 2006 and the said provision is the subsequent law enacted by the Parliament after enactment of PMLA and Section 436A will prevail and will apply in spite of rigors of Section 45 of the PMLA Act. The Supreme Court in Vijay Madanlal Choudhary vs. Union of India has held that Section 436A of the CrPC will apply even to the offences under the PMLA. Thus, what has been held is that in case of violation of Article 21 of the Constitution of India, the rigors of Section 45 of PMLA can suitably be relaxed. In the present case, the Applicant has been arrested in the scheduled offences on 24th February 2020. The Applicant has been arrested in the PMLA case on 5th March 2021 when he was in custoday in scheduled offences. Thus, the Applicant is behind bar for about 4 years and 8 months. As the Applicant has been arrested in the PMLA case on 5th March 2021 and therefore even if the date of arrest in the PMLA case i.e. 5th March 2021 is taken into consideration then also the Applicant is incarcerated for about 3 years and 7 months which is half of the maximum punishment (i.e. 7 years) prescribed for offence punishable under Section 4 of the PMLA. Thus, case is made for grant of bail to the Applicant on the ground of long incarceration - the Applicant can be enlarged on bail by imposing conditions - bail application allowed.
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Service Tax
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2024 (10) TMI 680
Recovery of service tax - appellant had been filing NIL ST-3 returns and not paid service tax - development of e- learning course content and supply of tutors for online tutoring, since the consideration is received in foreign exchange - Applicability of service tax on providing training under the Sant Shiromani Ramdas High Skill Development Programme by the State of Gujarat - Leviability of service tax on other receipts - place of provision of service - export of service or not - extended period of limitation. Online Information and Database Access or Retrieval Service - Service tax on development of e- learning course content and supply of tutors for online tutoring,since the consideration is received in foreign exchange - HELD THAT:- In the present case, the appellant has designed and developed the e-learning course content and supplied against consideration to their counterpart in USA who ultimately sold the same to other customers in USA. The customers in USA placed the same on websites allowing the users to access and retrieve data. Therefore, the services rendered by the appellant to M/s. Focus Care Inc, USA cannot fall within the scope of Online Information and Database Access or Retrieval Service . Consequently, it is an export of service since the recipient of the service is located in USA in view of the Rule 3 of the POPS Rules, 2012 read with Rule 6A of the Service Tax Rules, 1994. Similarly, also in the case of supply of tutors for online tutoring to M/s. Advance Tech Enterprises, UAE, the appellant merely provided tutors to M/s. Advance Tech Enterprises, UAE and the web platform is not hosted by the appellant and also does not belong to the appellant. The appellant also does not provide any access to the web platform which is provided by M/s. Advance Tech Enterprises to its students. It is not an automated web-based services which are completely automated and required minimum human intervention; but the online tutoring provided to M/s. Advance Tech Enterprises, UAE involves interaction between the tutors and the students. In view of the judgment of the Tribunal in the case of M/S DEWSOFT OVERSEAS PVT. LTD. VERSUS CST, NEW DELHI [ 2008 (8) TMI 50 - CESTAT NEW DELHI] , the said service cannot be considered as Online Information and Database Access or Retrieval Service . Applicability of service tax on providing training under the Sant Shiromani Ramdas High Skill Development Programme by the State of Gujarat - HELD THAT:- The observation of the Commissioner that skill development scheme is not connected with NCVT / MES is incorrect which is also evident from the Publication of the Government of Gujarat under Skill Development Initiative Scheme under which training is given in Modular Employable Skill (MES) leading to certification by NCVT. Thus, the finding of the Commissioner is contradictory of the publication of the Government of Gujarat; hence cannot be sustained. Leviability of service tax on other receipts - HELD THAT:- The Commissioner s finding that the appellant has not provided evidences also seems to be not based on record. Besides, the appellant has also placed Chartered Accountant certificate confirming the entry in the P L Account relates to purchase and sale of fabrics during the relevant period. It is found that though the Finance Manager of the appellant had, at the very beginning of the investigation, disclosed the fact that other receipts relates to purchase and sale of fabrics, the Department did not proceed further with the investigation to ascertain the veracity of the said claim - the learned Commissioner has rejected the said contention of the appellant on the ground that sales turnover of the fabrics was not declared in their VAT returns - there are no merit in the order of the learned Commissioner confirming the demand on other receipts considering the same as rendering of services by the appellant. The impugned order is set aside - Appeal allowed.
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2024 (10) TMI 679
Refund of service tax paid under protest - applicability of doctrine of unjust enrichment - concept of mutuality - time limitation - HELD THAT:- There is no dispute that the appellant have submitted a letter of protest, merely because it was submitted to the Superintendent, it cannot be said that the procedure was not followed. The objective of payment under protest is that in any form the appellant should express their intention of making payment under protest which is clearly complied by their letter of protest filed before Superintendent. Therefore, as regard the payment of service tax under protest, there are no fault and therefore, the refund claim is not hit by limitation. As regard, the merit of the issue, the same has been settled by Hon ble Supreme Court in the case of West Bengal vs Calcutta Club Limited [ 2019 (10) TMI 160 - SUPREME COURT ] wherein it was held that on the Principles of Mutuality the amount collected from the members by the club would not be liable to service tax. Therefore, reliance of department to the case of Sports Club [ 2013 (7) TMI 510 - GUJARAT HIGH COURT ] pending before Hon ble Supreme Court does not exist. The doctrine of unjust enrichment is not applicable in the present case - the appellant is eligible for refund of service tax paid by them along with interest in accordance with law - the impugned order is upheld - Revenue s appeal is dismissed.
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Central Excise
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2024 (10) TMI 678
Rectification of Mistake - error apparent on the face of record - HELD THAT:- The impugned order which we have affirmed in the final order dated 05.03.2024 have decided the issue on merits against the appellant, however, on limitation, the issue has been held to be against the revenue and, therefore, the demand of duty stood confirmed to the period from Jan. 2017 to June, 2017. In the circumstances, the present application for rectification of mistake is nothing but another attempt by the appellant to re-open the appeal to somehow evade the duty demand. The same is not permissible. There are no merits in the Rectification of Mistake application, which is hereby rejected.
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2024 (10) TMI 677
CENVAT Credit - capital goods - case of the department is that since at the time of receipt of capital goods, the appellant s goods were exempted under N/N. 30/2004-CE. they are not eligible for Cenvat credit on the capital goods - Rule 6(4) of Cenvat Credit Rules - HELD THAT:- The issue in the appellant s own case is squarely covered by this Tribunal s final order in [ 2019 (11) TMI 292 - CESTAT AHMEDABAD] where it was held that ' It is also observed that the Tribunal in the cited judgments under the same set of facts and dispute related to notifications 29/2004-CE and 30/2004-CE held that even though initially Nil rate of duty exemption under notification 30/2004-CE has been availed and subsequently, notification no. 29/2004-CE availed and paid the duty, the Cenvat Credit on capital goods is admissible.' From above decision, it can be seen that the facts of the present case are identical to the fact of the above case in the appellant s own case. Therefore, ratio of the above decision is directly applicable. Accordingly, the appellant is entitled for the Cenvat credit on capital goods. The impugned order is set aside - Appeal is allowed.
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2024 (10) TMI 676
Eligibility for concessional rate of duty under Notification No. 23/2003-CE for Domestic Tariff Area (DTA) clearances - Invocation of extended period of limitation under Section 11A of the Central Excise Act, 1944 - Imposition of penalty on the Deputy General Manager under Rule 26 of Central Excise Rules, 2002. Whether the appellant are entitled to the concessional rate of Central Excise duty on the clearances effected by them on Ammonium Carbonate Liquor and Ammonium Sulphate? - HELD THAT:- It is a matter of record that the appellants have fulfilled the export obligation and only the by-products as mentioned above have been cleared at the concessional rate of duty availing benefit of Notification No. 23/2003-CE dated 31.03.2003. It can be seen from the provisions of Para 6.8 (g) of the Foreign Trade Policy that by-products can be cleared at the concessional rate of duty if 100% EOU has already achieved positive NFE. It is found that appellant have fulfilled their export obligation and there is no allegation that NFE has not been achieved by the appellant of permissible export products and therefore, the provisions relating to clearance of its by-products in Domestic Tariff Area at the concessional rate of duty are undoubtedly available to the appellant, more so when NFE has been positive in case of the appellant - the appellant have rightfully availed the benefit of concessional rate of duty under Notification No. 23.2003-CE dated 31.03.2003 an clearances of its by products. Extended period of limitation - HELD THAT:- The appellant have been informing the department about the by-products which have been cleared by them availing concessional rate of duty under Notification No. 23/2003-CE dated 31.03.2003. It is found that element of fraud, mis-representation, suppression of facts with intention to evade duty are not present in this case and therefore, there are no legally sustainable to invoke extended time proviso under Section 11A of Central Excise Act, 1944 for demanding Central Excise duty. The first show cause notice is barred by period of limitation also. Imposition of penalty on the Deputy General Manager under Rule 26 of Central Excise Rules, 2002 - HELD THAT:- There are no reason for imposition of penalty on Shri A.K.Nayak and accordingly, the penalty imposed an appellant Shri A.K.Nayak is set aside. The impugned order is set aside - appeal allowed.
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2024 (10) TMI 672
Clandestine manufacture and removal - excess stock - admissibility of electronic records under Section 36B of the Central Excise Act - printouts allegedly taken from the computerized records of the noticee - burden to proof - HELD THAT:- The Central Excise Act contains a specific provision that describes the manner in which the admissibility of computer print outs will be accepted as evidence in proceedings initiated under the Central Excise Act. In respect of section 65B of the Evidence Act, which is pari materia to the provisions of section 36B of the Central Excise Act, it would be relevant to refer to the observations made by the Supreme Court in ANVAR P.V VERSUS P.K. BASHEER AND OTHERS [ 2014 (9) TMI 1007 - SUPREME COURT] , the Supreme Court, held that evidence relating to electronic record shall not be admitted in evidence unless the requirement of section 65B of the Evidence Act is fulfilled. The aforesaid judgment of Supreme Court in Anvar P. V. was followed by the Supreme Court in ARJUN PANDITRAO KHOTKAR VERSUS KAILASH KUSHANRAO GORANTYAL AND ORS. [ 2020 (7) TMI 740 - SUPREME COURT] , though with a slight modification. The Supreme Court held that if the original device is not produced, then electronic record can be produced in accordance with section 65B (1) of the Evidence Act together with the requisite certificate under section 65B (4). It is not in dispute that the hard disk from which the printouts were subsequently taken was not found installed in the CPU. The Panchnama drawn on 04.07.2013 records that the officers found that Vaibhav Goel had removed a hard disc from his kitchen and had tried to throw it away. The panchnama does not mention that any officer had seen Vaibhav Goel actually remove the hard disc from the CPU. It only records that Vaibhav Goel had removed a hard disc from the kitchen and had tried to throw it away. At a different place, the panchnama records that the officers conducted a thorough search of the entire residential premises and found one hard disc hidden in a corner lying near the dog house. What needs to be noticed is that if Vaibhav Goel had thrown the hard disk, it would not have been found hidden in a corner of a room near the dog house. The seven pen drives were also recovered from a room on the first floor of the rear side of the house. In the said room three computer monitor were also installed without a CPU - There is nothing on the record to link the hard disk to the CPU, nor is there anything to link that the hard disc and the pen drive stored information contained in the computer. The printouts, which are the sole basis for holding that the appellant had indulged in clandestine removal, were taken both on 04.07.2013 and on 15.07.2013 by placing the recovered hard disc and pen drive in the CPU. It is, therefore, clear that the CPU did not contain the hard disk. The hard disk was in fact picked up from the corner of the room. No attempt was made by the department to admit the hard disk and the pen drive in evidence. The required certificate under section 36B (4) of the Central Excise Act was also not produced. Thus, no reliance can be placed on the printouts, in view of the two judgments of the Supreme Court in Anvar P. V. and Arjun Panditrao Khotkar and the three decisions of the Tribunal in M/S AGARVANSHI ALUMINIUM LTD OTH VERSUS COMMISSIONER OF CUSTOMS (I), NHAVA SHEVA [ 2013 (10) TMI 856 - CESTAT MUMBAI] , M/S POPULAR PAINTS AND CHEMICALS REFERRED AS, SHRI MANSOOR ZAFFAR, SHRI HUSSAIN ZAFFAR VERSUS COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS RAIPUR [ 2018 (8) TMI 473 - CESTAT NEW DELHI] and GLOBAL EXTRUSION PRIVATE LIMITED, SHRI VIJAY MADHUSUDANBHAI DAVE, SHRI DEEPAK KUMAR BABULAL NAGAR, SHRI MANOJ VIJAYKUMAR GUPTA, SHRI MANHAR AMARSHIBHAI CHAVDA, SHRI NIMESHKUMAR JAYANTIBHAI VAGHELA, SHRI JIGNESH BHIMJIBHAI PATEL, SHRI VIPUL DAMJIBHAI SANGHANI, SHRI BABULAL JETHABHAI SABHAYA, SHRI SHARAD KUMAR KALAYANJI VASANT, SHRI SHARAD KUMAR KALAYANJI VASANT, SHRI BHAGESHBHAI JAYANTIBHAI CHANDERIA, SHRI MANOJBHAI DAYABHAI AKBARI PATEL VERSUS COMMISSIONER OF CENTRAL EXCISE ST, RAJKOT [ 2024 (1) TMI 772 - CESTAT AHMEDABAD] . It is, therefore, not possible to accept the contention advanced by the learned authorized representative appearing for the department that panchnama itself should be treated as a certificate or that the adjudicating authority was justified in itself examining whether the conditions set out in section 36B (4) of the Central Excise Act had been satisfied. The impugned order dated 30.06.2021 passed by the adjudicating authority, therefore, cannot be sustained - appeal allowed.
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Indian Laws
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2024 (10) TMI 675
Suit for partition and separate possession of her share in the plaint schedule 13 items of immovable properties - independent right, title or interest in the property - HELD THAT:- Once an application under Order 21 Rule 99 is filed, it is incumbent upon the Trial Court to consider all the rival claims including the right title and interest of the parties under Order 21 Rule 101 which bars a separate suit by mandating the execution court to decide the dispute. As regards the question of limitation for execution of a decree passed in the suit for partition, this Court, in the decision in Chiranji Lal [ 2005 (5) TMI 689 - SUPREME COURT ], has categorically held that the time begins to run from the date of final decree and not from the date on which it is engrossed on the stamp paper. Applying the ratio laid down in Chiranjilal case to the facts of the present case, the High Court rightly set aside the order passed in the Execution Petition and remanded the matter to the trial court for fresh consideration, leaving all the issues including the independent right, title or interest claimed by the respondents in the property in question, to be adjudicated therein - Appeal dismissed.
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2024 (10) TMI 674
Suit for specific performance of the agreement dismissed - suit decreed partially only for the alternative relief of recovery - doctrine of lis pendens - whether the agreement dated 17.08.1990 is a result of fraud and collusion, therefore, not binding on defendant no. 1? - HELD THAT:- In the case at hand, the Trial Court had partly decreed the suit to the extent of recovery of Rs. 40,000/-. This part of the decree was not challenged by the defendants either by filing a separate appeal or by way of cross objections. They did not prefer any cross objection challenging the finding on issue no. 5. In this situation the defendants have conceded to the decree for refund and finding on issue no. 5. Therefore, in absence of cross-appeal or cross-objections by the defendants, the First Appellate Court could not have recorded a finding that the subject agreement was a result of collusion between the plaintiff and defendant no. 1. In Usha Sinha vs. Dina Ram [ 2008 (3) TMI 753 - SUPREME COURT] this Court held that the doctrine of lis pendens applies to an alienation during the pendency of the suit whether such alienees had or had no notice of the pending proceedings. This Court in Sanjay Verma vs. Manik Roy [ 2006 (12) TMI 559 - SUPREME COURT] was dealing with a suit for specific performance. During pendency of the suit, a temporary injunction was granted in favour of the plaintiff and different portions of the suit land were sold whereafter the purchasers applied for impleadment, which was rejected by the Trial Court but allowed by the High Court against which special leave to appeal was filed. In the case in hand also, it is an admitted position that the suit was filed on 24.12.1992 and the sale deed was executed on 08.01.1993 by defendant no. 1 in favour of defendant no. 2/appellant during pendency of the suit. The doctrine of lis pendens as contained in Section 52 of the Transfer of Property Act, 1882 applies to a transaction during pendency of the suit - The plaintiff was non-suited only on the ground that defendant no. 2 had no notice of the agreement and is a bona fide purchaser. However, once sale agreement is proved and the subsequent sale was during pendency of the suit hit by the doctrine of lis pendens, the High Court was fully justified in setting aside the judgment and decree of the Trial Court and the First Appellate Court and passing a decree for specific performance. The High Court has not committed any error of law in rendering the judgment impugned which is hereby affirmed and the instant appeal deserves to be and is hereby dismissed.
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2024 (10) TMI 673
Dishonour of cheque - existence of a legally enforceable debt or liability - rebuttal of presumptin u/s 118 and 139 of the Negotiable Instruments Act - conviction u/s 138 of the Negotiable Instruments Act - HELD THAT:- In the case at hand, complainant while examining himself as CW-1, tendered evidence by way of affidavit Ex.CW1/A wherein he successfully reiterated the contents of the complaint. If the crossexamination conducted upon complainant is perused in its entirety, it cannot be said accused was able to extract something contrary to what this witness stated in his examination-in-chief. As has been observed hereinabove, accused though attempted to carve out a case that he had already paid sum of Rs.8,00,000/- against sum of Rs.2,00,000/-, but since there is no mention, if any, of the Cheque in question on the receipt Mark DX1, adduced on record by the accused to prove factum with regard to his having repaid entire amount, Courts below rightly held accused guilty of his having committed offence punishable under Section 138 of the Act - there is no evidence worth credence suggestive of the fact that Cheque in question was issued as a security, but even if it is presumed that Cheque in question was issued as a security, that may not be of much help to the accused for the reason that by now it is well settled that Cheque, if any, issued as a security can also be presented for encashment, if amount taken or promised to be repaid is not paid. This Court finds that all the basic ingredients of Section 138 of the Act are met in the case at hand. Since Cheque issued by accused towards discharge of his lawful liability was returned on account of insufficient funds in the bank account of accused and he despite having received legal notice failed to make the payment good within the stipulated time, complainant had no option but to institute proceedings under Section 138 of the Act, which subsequently rightly came to be decided by both the Courts below on the basis of pleadings as well as evidence adduced on record by the respective parties. Since after having carefully examined the evidence in the present case, this Court is unable to find any error of law as well as fact, if any, committed by the Courts below, while passing impugned judgments, there is no occasion, whatsoever, to exercise the revisional power. The present criminal revision petition is dismissed being devoid of any merit.
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