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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter October 19, 2022 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Securities / SEBI Insolvency & Bankruptcy PMLA Service Tax Indian Laws Articles 1. TAX AUDIT REPORT (TAR) - specified date need to be changed. By: DEVKUMAR KOTHARI Summary: The Tax Audit Report (TAR) highlights issues arising from the timing differences between the submission of the TAR and the due date for filing the Return of Income (ROI). These timing discrepancies can lead to mismatches, disallowances, and unnecessary proceedings due to incomplete information being available at the time of TAR submission. The report suggests harmonizing due dates to ensure comprehensive data is provided, which affects deductions and disallowances under sections like 40, 43B, 44AB, and 139 of the Income Tax Act. This alignment could prevent unnecessary adjustments and additional compliance burdens for taxpayers. News 1. Ms Bharati Das takes charge as new Controller General of Accounts (CGA) Summary: Ms. Bharati Das has been appointed as the new Controller General of Accounts (CGA) for the Government of India, effective October 18, 2021. She is the 27th person to hold this position within the Ministry of Finance. A 1988-batch officer of the Indian Civil Accounts Service, Ms. Das has previously served in various senior roles across multiple ministries, including Finance, External Affairs, Home Affairs, Health and Family Welfare, Civil Aviation, and Transport. The CGA acts as the principal advisor on accounting matters to the Union Government, overseeing the management accounting system, exchequer control, and internal audits. 2. Cabinet approves Minimum Support Prices for all Rabi Crops for Marketing Season 2023-24 Summary: The Cabinet Committee on Economic Affairs has approved increased Minimum Support Prices (MSP) for Rabi crops for the 2023-24 marketing season. The highest MSP increase is for lentil at Rs.500 per quintal, followed by rapeseed mustard at Rs.400. Wheat, gram, and barley see smaller increases. The MSP aims to provide fair remuneration, aligning with a policy to set MSP at 1.5 times the cost of production. The government emphasizes increasing oilseed and pulse production, with a focus on technology and innovation in agriculture through initiatives like the Digital Agriculture Mission and promoting smart farming. 3. Central Record Keeping Agencies (CRAs) of PFRDA have become Digi Locker Partner Organizations to provide Subscriber Centric online Services Summary: Central Record Keeping Agencies of the Pension Fund Regulatory and Development Authority have partnered with Digi Locker to enhance online services for subscribers. This initiative aligns with India's Digital India program, aiming to create a digitally empowered society. New features include opening pension accounts using a driving license and updating addresses through Digi Locker. These services are available to new and existing subscribers of Protean CRA. Digi Locker, with nearly 13 crore registered users, facilitates easy access to digital documents. The process involves using Digi Locker credentials to share documents for account creation or address updates. Notifications GST - States 1. S.O. 397 - dated 22-8-2022 - Jammu & Kashmir SGST Amendment in Notification No. S.O 181 dated 19th April 2022 Summary: The Government of Jammu and Kashmir has amended Notification No. S.O. 181 dated 19th April 2022 under the Jammu and Kashmir Goods and Services Tax Act, 2017. The amendment involves replacing the entry in column (3) of the table against Serial No. 1 with "Fly ash bricks; Fly ash aggregates; Fly ash blocks." This change is based on the recommendations of the Council and is effective retroactively from 18th July 2022. The notification was issued by the Financial Commissioner to the Government, Finance Department. 2. S.O. 396 - dated 22-8-2022 - Jammu & Kashmir SGST Seeks to amend Notification No. SRO -GST-5 DATED 08.07.2017 Summary: The Government of Jammu and Kashmir has amended Notification No. SRO-GST-5 dated 08.07.2017 under the Jammu and Kashmir Goods and Services Tax Act, 2017. The amendment involves substituting "serial numbers 1" with "serial numbers 1AA" in the proviso clause. Additionally, a new set of serial numbers and entries has been inserted, covering various oils, fats, and coal products. These include soya-bean oil, ground-nut oil, olive oil, palm oil, and other vegetable and microbial oils, as well as coal and peat products. The notification is effective from 18th July 2022. Circulars / Instructions / Orders GST - States 1. CCT/26-4/2022-23/F/1946 - dated 30-9-2022 Guidelines for filing/revising TRAN-1//TRAN-2 in terms of order dated 22-07-2022 & 02-09-2022 of Hon’ble Supreme Court in the case of Union of India vs. Filco Trade Centre Pvt. Ltd. Summary: The circular issued by the Government of Goa outlines guidelines for filing or revising GST TRAN-1 and TRAN-2 forms in compliance with Supreme Court orders dated July 22, 2022, and September 2, 2022, in the case of Union of India vs. Filco Trade Centre Pvt. Ltd. The Goods and Service Tax Network (GSTN) portal will be open for submissions from October 1, 2022, to November 30, 2022. Applicants must ensure accuracy before submission, as no further revisions will be allowed. The guidelines detail the process for electronic submission, document requirements, and verification procedures by tax officers, with transitional credits reflected in the Electronic Credit Ledger post-verification. Highlights / Catch Notes GST Promissory Estoppel Cannot Override Statutory Provisions; Government Not Bound by Past Representations per CGST Act Section 174(2)(c). Case-Laws - SC : Doctrine of promissory estoppel could operate against a statute or not? - benefits granted under an earlier statute, - Even on the ground of change of policy, which is in public interest or in view of the change in the statutory regime itself on account of the GST Act being introduced as in the instant case, it will not be correct to hold the Union bound by the representation made by it, i.e. by the said O.M. of 2003. Further, this would be contrary to the statutory provisions as enacted under Section 174(2)(c) of the CGST Act - SC Visit to Get Source Court Permits Filing of Outstanding Returns Post-Cancellation u/s 29(2)(c) of CGST Act, 2017; Taxes and Interest Due. Case-Laws - HC : Cancellation of registration of petitioner - non-filing of returns for consecutive period of six months - Section 29(2)(c) of Central Goods and Services Tax Act, 2017 - Petition allowed - The petitioner is permitted to file returns for the period prior to the cancellation of registration, if such returns have not already been filed, together with tax defaulted which has not been paid prior to cancellation along with interest - HC Visit to Get Source Court Allows Appeal Against GST Registration Cancellation; 10-Day Deadline Set for Filing with Competent Authority. Case-Laws - HC : Cancellation of the GST registration of petitioner - applicability of time limitation - The petitioner is given liberty to file appeal against the cancellation of GST registration to the competent authority within ten days from today. - HC Visit to Get Source Court Allows Release of Detained Goods as Tax Paid and Bank Guarantee Provided, Leaves Rule 138 Interpretation Pending. Case-Laws - HC : Release of detained goods - Since the tax amount has already been remitted by the consignor and the appellant has already furnished bank guarantee for the balance amount equivalent to the tax demanded, the goods in custody of the respondent can be released to the appellant. We have not interpreted Rule 138 of the KGST Rules 2017 and the said fact is left open to be decided in appropriate case. - HC Visit to Get Source Department Orders Invalid: No Show Cause Notice or Hearing Opportunity Given, Lacking Required Explanation Per Act Provisions. Case-Laws - HC : Validity of summary orders/adjudication orders - the summary of orders, adjudication orders and all subsequent orders issued by the department in all the writ applications is bad in law, inasmuch as, the same has been issued without issuance of any Show Cause Notice and without affording the opportunity of personal hearing which is mandatory and without passing any detailed order in terms of the provisions of the Act. - HC Visit to Get Source Income Tax Doctors' Income from Hospitals Classified as Professional, Not Salary; No Employer-Employee Relationship Found. Case-Laws - HC : Taxability of Hospital income in the hands of Doctor - ‘salary’ or ‘professional income’ - The fact that the remuneration paid is variable, and the doctors are not entitled for any statutory benefits also points to the absence of an employer-employee relationship. The mere presence of rules and regulations do not, in my considered view, lead to a conclusion of a contract of service. - mere existence of an agreement that indicates some measure of regulation of the service of the doctors, cannot lead to a conclusion that they are salaried employees. - HC Visit to Get Source Court Rules Maintenance Charges from Let-Out Property as "Income from Other Sources" if Linked to Provided Services. Case-Laws - AT : Correct head of income - addition of maintenance charges received on let out property - Once, these maintenance charges are attributable to the services provided, the same derived from providing services is to be considered under the head "income from other sources" as claimed by the assessee. - AT Visit to Get Source CBEC's Customs Duty Valuation Doesn't Imply Assessee Understated Import Value; Not Considered Undisclosed Income. Case-Laws - AT : Undisclosed income - CBEC has not accepted the invoice value and determined separate value for the purpose of customs duty. Therefore, merely for the reason that the CBEC does not accept the value declared by the assessee, it does not mean that the assessee has understated the imports and difference between actual price paid for imports and value determined by the CBEC is undisclosed income of the assessee. - AT Visit to Get Source Petitioner Seeks Interest Refund on Seized Amount; Authorities to Review u/ss 132B(4)(b) & 244A of Income Tax Act. Case-Laws - HC : Refund of the pending amount of interest u/s 132B(4)(b) r.w.s. 244A - Petitioner states that the principal amount of seized on 12th November, 2014 was refunded to the Petitioner on 14th November, 2017, but without any interest - Authorities directed to consider the representation - HC Visit to Get Source Section 50C Inapplicable: Sale of Undetermined Beneficial Rights in Land Not Subject to Stamp Duty Value Substitution. Case-Laws - AT : Applicability of provisions of section 50C - Sale of undetermined beneficial rights in the land - There cannot be any substitution of stamp duty value as the full value consideration in terms of Section 50C of the Act in the instant case. This fact is also strengthened by the fact that assessee has also offered capital gains in the return of income as sale of rights in land has been transferred. - AT Visit to Get Source Taxability of Management Fees in India Under Singapore DTAA Hinges on Skill Transfer, Not Just Capability Enhancement. Case-Laws - AT : Income deemed to accrue or arise in India - taxability of management fees - Singapore DTAA - An incidental benefit or enrichment which may add to the capabilities is not sufficient; the critical factor triggering the taxability in the source jurisdiction is the transfer of skills. - AT Visit to Get Source Noida Property Valuation Must Use Uttar Pradesh PWD Rates for Fair Market Value, Says Directive to Assessing Officer. Case-Laws - AT : Determination of cost of construction - Valuation adopted in respect of the construction of a property at Noida UP. - the state PWD rates should be adopted for computing the fair market value of the property situated in different states. Therefore, respectfully following binding precedents, we hereby direct AO to adopt PWD rates as prevalent at that point in time for ascertaining the correct and true figure of investment made by the assessee. - AT Visit to Get Source SAP Implementation Income in Pune Not Taxable as Royalty or Fee for Technical Services Under India-Singapore DTAA Article 12. Case-Laws - AT : Income deemed to accrue or arise in India - Royalty receipt - Implementation of SAP for transportation system at Pune India- Singapore DTAA - Fee for Technical Services - TDS u/s 195 - the income on account of Information Technology Services is also not taxable under article 12 - AT Visit to Get Source Revision u/s 263 Upheld: AO Failed to Investigate Share Premium Details, Lacked Proper Inquiry. Case-Laws - AT : Revision u/s 263 - lack of inquiry by AO - it is a case where the AO did not make any inquiry vis-à-vis the share premium and simply accepted the details filed by the assessee and, thus, the AO had failed miserably to carry out the duty cast upon him. Therefore, it is our considered view that it is a case of complete lack of inquiry by the AO - Revision order sustained - AT Visit to Get Source Share Transactions Deemed Bogus u/s 153A; No New Material Means No Additional Assessment u/s 68. Case-Laws - AT : Assessment u/s 153A - Addition u/s 68 - Share transactions are bogus and are to be treated as the assessee's unexplained income - Merely the surveys conducted parties are not available after 8 years it is not the fault of the assessee and without any fresh material unearthed during search no fresh addition can be made on the issue which are already settled. - AT Visit to Get Source Customs High Court Invalidates Tribunal's Order for Exceeding Show Cause Notice Scope; Limits Appellate Authority's Jurisdiction. Case-Laws - HC : Jurisdiction - scope of SCN - The Appellate Authority be it the Commissioner (Appeals) or the Tribunal is not empowered to issue directions which traverse beyond show cause notice. It seems that the order of the Tribunal affirming the order of the Commissioner (Appeals) is bad insofar as it affirms directions which traverse beyond show cause notice and hence it is set aside. - HC Visit to Get Source Penalties Imposed for Overvalued Rough Precious Stones; Section 114AA Penalty on Appellant Overturned Due to Lack of Intent. Case-Laws - AT : Levy of penalty u/s 112 (a) & (b) (iii) and 114A of the Customs Act, 1962 - importing rough precious stones by making huge overvaluation - goods not imported by actual importers but the imports are being managed by someone else behind them - it is clear that the appellant has deliberately and intentionally has not provided any such information which was false or incorrect. As such, in my opinion that penalty under section 114AA of the Customs Act, 1962 has wrongly been imposed upon him. - AT Visit to Get Source Corporate Law High Courts Rule: Director Identification Number Cannot Be Cancelled u/ss 164 or 167 of Companies Act 2013. Case-Laws - HC : Disqualification of Director under section 164(2) of the Companies Act, 2013 - Different High Courts have taken same stand that DIN cannot be cancelled or deactivated resorting to Section 164 or 167 of the Act of 2013 and for the reasons assigned into their orders - HC Visit to Get Source Indian Laws Court Rules 12-Year Limitation Under Article 136 Applies in Land Dispute; Validity of Deed Must Be Challenged in Time. Case-Laws - SC : Time limitation for initiation of suit - land dispute - Whether a larger period of limitation of 12 years would be available to the Plaintiffs to bring in a suit by virtue of application of Article 136 of the Limitation Act, 1968 - In the absence of any successful challenge against the validity of the said Relinquishment Deed by making proper prayer in an appropriate proceedings, and that too within the prescribed period of limitation, the conclusion and finding of the First Appellate Court, cannot be said to be perverse or illegal as there can be no doubt with respect to the position that consideration of validity of a relinquishment deed and consideration of the period of limitation with reference to the same are different and distinct. - SC Visit to Get Source IBC Court Orders Reconsideration of Insolvency Professional Registration Application; Qualifications and Experience to be Reassessed. Case-Laws - HC : Registration as an Insolvency Professional (IP) - When the petitioner has already passed the Insolvency Professional Examination of IBBI and has already undergone 50 (fifty) hours Pre - registration Education Course as mandated by the IBBI under the Regulations, 2016, and claims to have managerial experience, this Court is of the considered opinion, that application needs to be decided afresh - HC Visit to Get Source PMLA Court Lacks Jurisdiction Under Article 226(2) for Writ Petition as Case Taken by Court Outside State Limits. Case-Laws - HC : Territorial jurisdiction to entertain the writ petition under Article 226 (2) of the Constitution of India - even though a part of cause of action arises in this State, as the investigation was culminated in filing the charge sheet and the case is also taken cognizance by a competent court situated outside the territorial limits of this State, this Court cannot exercise its jurisdiction to entertain the writ petition under Article 226(2) of the Constitution of India. - HC Visit to Get Source SEBI SEBI Can Take Action Against Companies for Dividend Payment Defaults; Only Specific Parties Can File Complaints Under Sec 621. Case-Laws - HC : Power of SEBI to initiate action against the company or its directors who have defaulted in payment of dividend - Section 621 clearly specifies that the shareholder/registrar of companies/person authorized by a central government can only maintain a complaint for the offence punishable u/s 207 even though the dividends are paid, since criminality does not get absolved on payment of dividends after the stipulated time. Hence, Point No.2 is answered affirmatively in favor of the Petitioners. - HC Visit to Get Source Service Tax High Court invokes Article 226 to allow petitioner payment under Sabka Vishwas Scheme after online payment denial. Case-Laws - HC : SVLDRS - Non-grant of option to pay the amount determined by respondent No.2-Designated Committee formed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 through online facility - the petitioner made bona fide attempt to make the payment as determined under the Scheme and is also prepared to pay the amount in question in accordance with the Scheme along with interest for the period for which the petitioner was not permitted to make payment by respondent authorities considering extreme Pandemic condition of Covid-19, it is opined that this is a fit case for invocation of the powers under Article 226 of the Constitution of India. - HC Visit to Get Source Court Rules Service Tax for Street Light Maintenance Must Be Reimbursed to Petitioners; Recipient Bears Cost. Case-Laws - HC : Reimbursement of amount of Service Tax - maintenance of street lights - The petitioners have paid service tax, during the relevant period. The logical sequitur would be that the petitioners would have to be reimbursed the service tax that they have paid, since the recipient would have to bear the ultimate burden of the payments in that behalf. - HC Visit to Get Source Appeal Filed 1.5 Years Late is Time-Barred; 180-Day Filing Period Exceeded After Withdrawal of Writ Petition. Case-Laws - HC : Condonation of delay in filing appeal - The appellant withdrew the appeal knowingly that the remedy of appeal is available despite that a review petition was filed before this High Court. Thereafter without withdrawing the Review Petition this Appeal has been filed on 12.02.2019,i.e, after the lapse of one and half years. Whereas the limitation of filing this appeal is 180 days. Even if the limitation of 180 days is calculated from the date of withdrawal of the writ petition 04.09.2017, even then this appeal is hopelessly time barred. - HC Visit to Get Source Case Laws: GST 2022 (10) TMI 677 Doctrine of promissory estoppel could operate against a statute or not? - whether, despite a subsequent statute specifically providing for rescinding the benefits granted under an earlier statute, the Union Government can be compelled to stand by the representation made by it through the earlier notification? HELD THAT:- Undisputedly, the Notification dated 18th July 2017 withdrawing the exemption notifications was issued in pursuance of the statutory mandate as provided under Section 174(2)(c) of the CGST Act. If the contention as raised by the appellants is to be accepted, it would make the provisions under the proviso to Section 174(2)(c) of the CGST Act redundant and otiose. The legislature in its wisdom has specifically incorporated the proviso to Section 174(2)(c) providing therein that any tax exemption granted as an incentive against investment through a notification shall not continue as privilege if the said notification is rescinded. If the contention is accepted, it will amount to enforcing a representation made in the said O.M. of 2003 and 2003 Notification contrary to the legislative incorporation in the proviso to Section 174(2)(c) of the CGST Act. In other words, it will permit an estoppel to be operated against the legislative functions of the Parliament - the claim of the appellants on estoppel is without merit and deserves to be rejected. It is further to be noted that this Court has also consistently held that when an exemption granted earlier is withdrawn by a subsequent notification based on a change in policy, even in such cases, the doctrine of promissory estoppel could not be invoked. It has been consistently held that where the change of policy is in the larger public interest, the State cannot be prevented from withdrawing an incentive which it had granted through an earlier notification. Even on the ground of change of policy, which is in public interest or in view of the change in the statutory regime itself on account of the GST Act being introduced as in the instant case, it will not be correct to hold the Union bound by the representation made by it, i.e. by the said O.M. of 2003. Further, this would be contrary to the statutory provisions as enacted under Section 174(2)(c) of the CGST Act - It could thus be seen that this Court holds that a writ of mandamus can be issued where the Authority has failed to exercise the discretion vested in it or has exercised such a discretion malafidely or on an irrelevant consideration. The appellants are permitted to make representations to the respective State Governments as well as to the GST Council - appeal dismissed. 2022 (10) TMI 676 Cancellation of registration of petitioner - non-filing of returns for consecutive period of six months - Section 29(2)(c) of Central Goods and Services Tax Act, 2017 - the petitioner preferred appeal under Section 107 of the CGST Act on 05.08.2021 with a delay of around 660 days which came to be rejected on 07.10.2021 - HELD THAT:- Minute reading of N/N. 76/2018- Central Tax [GSR 1253(E)], dated 31st December, 2018 gives indication that the Government have been considerate in extending the benefit to the taxpayers who could not file returns for the months/quarter(s) of July, 2017 to April, 2021 within statutory period specified. As the registration certificate of the petitioner stood cancelled since 15.10.2019 by the time amendments to Notification No.76/2018- Central Tax [GSR 1253(E)], dated 31st December, 2018 came into force, there was no scope left for availing the advantage conferred thereunder. It is observed that the order of cancellation of registration was passed with effect from 15.10.2019 and in terms of Section 107 the petitioner was required to file the appeal within three months from the date of communication of the order and further condonable period available was one month therefrom. In the present case total period lapsed on 14.02.2020 - The Hon ble Supreme Court of India in PRAKASH CORPORATES VERSUS DEE VEE PROJECTS LIMITED [ 2022 (2) TMI 1268 - SUPREME COURT ] took cognizance of unprecedentedly unfavourable and unpleasant situation faced by entire humanity from or around the month of December 2019. The Appellate Authority, while passing order on 07.10.2021, had no occasion to take into consideration the orders of the Hon ble Court more particularly Cognizance for Extension of Limitation, In re, [ 2022 (1) TMI 385 - SC ORDER ]. An identical fact-situation arose before the Hon ble Gujarat High Court [ 2022 (4) TMI 751 - GUJARAT HIGH COURT ], where the Appellate Authority did not entertain appeal on the ground of limitation qua cancellation of registration being made on 10.07.2019. It is pertinent to say that writ petition is maintainable challenging the order in appeal, albeit the petitioner is entitled to carry the matter before the Appellate Tribunal under Section 112 of the CGST Act inasmuch as even after lapse of 5 years, the said Appellate Tribunal is not constituted under Section 109. Since the Appellate Tribunal has not yet been constituted as per Section 109 of the CGST Act, there being no alternative remedy available for the petitioner to question the veracity of the order passed in the first appeal, this Court prefers to exercise its writ jurisdiction to undo prejudice and injustice caused to the petitioner. Thus, this Court is of the considered view that grave injustice would ensue if extraordinary jurisdiction under Article 226 of the Constitution of India is not exercised. In the present case scales of justice weigh in favour of the petitioner. The petitioner is permitted to file returns for the period prior to the cancellation of registration, if such returns have not already been filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and statutory payments and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of sixty days (60) days from the date of receipt of a copy of this Judgment, if it has not been already paid - Petition allowed. 2022 (10) TMI 675 Cancellation of the GST registration of petitioner - petitioner filed the e-appeal on 17.06.2022 but could not submit the hard-copy within the prescribed period of limitation - applicability of time limitation - HELD THAT:- It cannot be denied that the petitioner herein would not be able to continue with his business in absence of GST registration and thus, would be deprived of his livelihood which amounts to violation of right to life and liberty as enshrined in Article 21 of the Constitution of India. The petitioner is given liberty to file appeal against the cancellation of GST registration to the competent authority within ten days from today. Upon such appeal being filed, the same shall be considered and decided on all aspects in accordance with law excluding the bar of limitation in preferring the appeal by the petitioner - Petition disposed off. 2022 (10) TMI 674 Provisional attachment order - Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The record shows [something which has also been noted in order dated 29.08.2022] that notice in the writ petition was issued as far back as on 24.07.2020, despite which, counter-affidavit(s) have not been filed on behalf of the respondents, which includes the contesting respondents/revenue - the matter has been hanging fire without the respondents/revenue taking requisite steps, either vis-a-vis the petition or with regard to imposition and/or recovery of penalty. Given the fact that the present attachment has continued beyond the timeframe prescribed under Section 83(2) of the CGST Act, we are inclined to direct that the same be lifted - Petition disposed off. 2022 (10) TMI 673 Maintainability of petition - availability of alternative remedy of appeal - Seeking release of detained goods - production of updated E-way bill or not - Rule 138(2A) of the CGST Rules - HELD THAT:- The Rule reads that where the goods are transported by railways or by air or vessel, the e-way bill shall be generated by the registered person, being the supplier or the recipient, who shall, either before or after the commencement of movement, furnish, on the common portal, the information in Part B of FORM GST EWB-01 - Rule 140 of the CGST Rules relate to release of seized goods on provisional basis. In the present case Ext.P6 final order imposing tax and penalty is passed and hence, the argument that bank guarantee for the applicable tax, interest and penalty payable is to be submitted does not deserve merit. Since the tax amount has already been remitted by the consignor and the appellant has already furnished bank guarantee for the balance amount equivalent to the tax demanded, the goods in custody of the respondent can be released to the appellant. We have not interpreted Rule 138 of the KGST Rules 2017 and the said fact is left open to be decided in appropriate case. Appeal allowed - the first respondent is directed to release the goods if the appellant furnishes the bank guarantee for the penalty amount, if not already done within a period of two weeks from today. 2022 (10) TMI 672 Violation of principles of natural justice - cancellation of the GST registration of petitioner - non-compliance of certain provisions in the GST Act or the Rules made there under - submission of fake Input Tax Credit invoices claiming benefit - HELD THAT:- As the first notice issued is bereft of provisions of law, which are alleged to have been violated; and as the second notice, which was issued on the very same day, contains details, to which no opportunity was given to the petitioner to submit his explanation, this Court is of the opinion that the order under challenge is liable to be set aside and the matter be remanded to the 3rd respondent. The matter is remanded back to the 3rd respondent, who shall issue a fresh notice, giving sufficient time to the petitioner for responding to the same and thereafter, pass orders in accordance with law - petition allowed by way of remand. 2022 (10) TMI 671 Validity of summary orders/adjudication orders - challenged on the ground that the revisional authority without passing an order under Section 108 of JGST Act had just returned the revision applications filed by the respective petitioners - Proper enquiry not carried out - violation of principles of natural justice - Section 74 (1) of JGST Act, 2017 read with Rule 142 (1) (a) of JGST Rules, 2017 - HELD THAT:- After going through the documents available on record it appears that in all these writ applications no show cause notice has been issued and no relied upon materials has been given. DRC-01 which was issued is vague and lacks in details and is in violation of principle of natural justice. The demand of tax, interest and penalty has been confirmed without proper enquiry. Failure to issue the mandatory Show Cause Notices under Section 73/74 of the JGST Act along with summary Show Cause Notice under Rule 142(1) goes to the root of the matter and vitiates the entire proceeding and violates principles of natural justice. The law is now no more res integra that the show cause notice under Section 73/74 is mandatory in nature. Leaving the question open that whether an Assessee can invoke jurisdiction under Section 108 of the JGST Act or not , it is held that the summary of orders, adjudication orders and all subsequent orders issued by the department in all the writ applications is bad in law, inasmuch as, the same has been issued without issuance of any Show Cause Notice and without affording the opportunity of personal hearing which is mandatory and without passing any detailed order in terms of the provisions of the Act. The summary of SCN and orders are quashed and set aside - All these matters are remitted back to the concerned respondents to pass afresh order in accordance with law and specific provision as enshrined under JGST Act, 2017 after following principles of natural justice - application allowed. 2022 (10) TMI 670 Stay for payment (levy) of GST - grant of mining lease/royalty for carrying out quarry operations of rough stone was provided for a period of 5 years and transport permits issued by the authorities for collecting the necessary statutory charges and other charges - now respondents are insisting and compelling the petitioner to register the quarry operations under the GST Act, 2017 and to pay the GST on the seigniorage fee paid by the petitioner to the Geology and Mining department - Impugned order is notice. HELD THAT:- It is seen that the Honourable Apex Court in the case of M/S. LAKHWINDER SINGH VERSUS UNION OF INDIA ORS. [2021 (11) TMI 336 - SC ORDER] had granted stay for payment of GST for grant of mining lease/royalty by the petitioner. Further, it has been followed consistently by various Courts including this Court. It is further seen that the impugned order is only a notice. The petitioner is directed to appear before the respondents and make his objections with necessary documents. The petitioner is directed to approach the second respondent within a period of 30 days from the date of receipt of a copy of this order and make his objections. Further , the second respondent is directed to consider the petitioner s objections and dispose the same in accordance with law following the judgment of the Hon ble Apex Court - Till such time, Status quo to be maintained by the respondents - Petition disposed off. 2022 (10) TMI 669 Uniform GST rate applicable to all bidders for the services, specified in the tender notice or not - hiring of services for Real Time Production Monitoring and Analysis (RTPM) Project under DRIVE Initiative - HELD THAT:- This Court is of the opinion that interest of justice as well as public interest would be served if an interim order is passed at this stage. Accordingly, it is provided that no further action be taken by the respondent nos. 1 2 OIL in furtherance to the LOI dated 01.07.2022 and the respondent no. 3 is accordingly directed not to further advance with the work which is the subject matter of this writ petition till the returnable date. Since, the work is of public interest, an endeavor would be made to dispose of the writ petition on the returnable date, on which date, the learned counsel representing the OIL is directed to produce the records - List this case after 4(four) weeks. 2022 (10) TMI 668 Review of the order of dismissing the writ petition - error apparent on the record or not - appeal was dismissed on the ground of delay without hearing on merits - Jurisdiction of Appellate authority to decide the appeal on merits - scope of review - Section 107(4) and 107(8) of M.P. Goods and Services Tax Act, 2017 - HELD THAT:- When this Court already bestowed its consideration over the submissions raised by the review petitioner, then it appears that no fresh ground has been raised by the petitioner and all the grounds including the ground of opportunity of hearing in terms of Section 107(4) and 107(8) of the SGST Act already raised by the petitioner and from different e-mails and correspondence made between the appellate authority and petitioner whereby sufficient opportunity was given, it appears that there is no error apparent on record exists. The Apex Court in the case of THE STATE OF WEST BENGAL VERSUS KAMAL SENGUPTA AND ANOTHER [ 2008 (6) TMI 578 - SUPREME COURT] that mistake or error apparent on the face of the record means that mistake or error which is prima facie visible and does not require any detail examination. Erroneous view of law is not a ground for review and review cannot partake the category of the appeal. It appears that no case for review is made out. After due consideration, no error apparent on the face of record found to exist. Petitioner has already advanced his arguments in previous proceedings at length. No case for interference is made out under the limited scope of review. Review petition dismissed. 2022 (10) TMI 667 Non-filing of TRAN-1 Form - petitioner either could not file TRAN-1 Form because of the technical glitches and/or the request for amendment/revision/modification of TRAN- 1 Form was not allowed - HELD THAT:- The Division Bench of this Court had directed the jurisdictional assessing authority to consider all the issues that would be raised by the Petitioners including the issue on merits simultaneously. The Authority was also directed to decide the effect of the judgments of this Court in the case of Heritage Lifestyles and Developers and Pvt. Ltd. [ 2020 (11) TMI 235 - BOMBAY HIGH COURT ] where it was held that human errors can be allowed to be corrected and if because of technical glitches, TRAN-1 Form could not be filed, opportunity can be given to file the same , and also Nelco Ltd. [ 2020 (3) TMI 1087 - BOMBAY HIGH COURT ] where it was held that after the time stipulated is over, the Petitioners do not have right to file TRAN-1 Form and or seek amendment/revision/modification of the said Form. If in case, the show cause notices are issued while adjudicating the same, the directions and observations in the present order shall also be considered by the Authority - the Petitioners are allowed to file and correct TRAN-1 and TRAN-2 Form. In case it is not possible to file the same online, it shall be filed manually. Petition disposed off. Income Tax 2022 (10) TMI 689 Renewal of approval of the appellant trust under Section 80G - HELD THAT:- We do not find any reason to interfere with the Judgment and order passed by the High Court of Karnataka at Bengaluru [ 2018 (11) TMI 1919 - KARNATAKA HIGH COURT] In our opinion, the High Court s decision on conditions to be considered for renewal of approval of the appellant trust under Section 80G of the Income Tax Act, 1961 is correct. The appeal is accordingly, dismissed. 2022 (10) TMI 688 Assessment of capital gains on account of transfer of property - Transfer of capital asset u/s 2(45) - scope of conditional sale transaction - basic contention of the appellant which was that registration document could not be taken as a conclusive proof to hold that there was transfer resulting in capital gains - ITAT confirming the addition made by the AO - Whether Tribunal was justified in passing the order after the period of 3 months from the date of hearing misunderstanding the letter and spirit of Rule 34(5) of Income Tax (Appellate Tribunal) Rules, 1963 and judicial precedents - HELD THAT:- According to the Tribunal, appellant had already executed a registered sale deed which is treated as valid transfer under Section 2(47)(V) of the Act. The other documents relied upon by the appellant were only pleadings before civil and criminal courts, which proceedings were yet to attain finality. Accordingly, Tribunal upheld the addition of long term capital gains made by the assessing officer as confirmed by the CIT(A). After holding so, Tribunal noted that the appeal was decided after a period of 90 days from the date of hearing; the same was because of the covid lock down situation and referred to the orders passed by the Supreme Court extending limitation. On thorough consideration of all aspects of the matter, we are of the view that no substantial question of law arises out of the order of the Tribunal dated 02.09.2021. Findings returned by the Tribunal are clear findings of fact which does not call for any interference. Appeal as well as I.A. filed for condonation of delay of 76 days in filing the appeal are accordingly dismissed. 2022 (10) TMI 687 Nature of receipt - excess realization of levy price on sale of incentive sugar - revenue or capital receipt - expenses in connection with construction and handing over of transmission lines/substation to Karnataka Government was treated as revenue expenditure - Exclusion of incentive sugar from valuation of closing stock - whether Tribunal was right in excluding the incentive sugar from valuation of closing stock? - HELD THAT:- Question now been answered in the case of Additional Commissioner of Income-tax, Bareilly vs. Dhampur Sugar Mill (P.) Ltd. [ 2014 (11) TMI 356 - ALLAHABAD HIGH COURT] held that where an expenditure is made not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade, there is very good reason, in the absence of special circumstances leading to an opposite conclusion, to treat it as an expenditure properly attributable not to revenue but to capital. If the advantage which had accrued to the assessee was to facilitate its trading operation or the conduct of its business while leaving the fixed capital untouched, the expenditure would be on the revenue account. Expenditure which was incurred by the assessee in the laying of transmission lines was clearly on the revenue account -CL. The expenditure which was incurred by the assessee was for facilitating the efficient conduct of its business since the assessee had to supply electricity to its sole consumer - This was not an advantage of a capital nature. The Tribunal was, in these circumstances, correct in affirming the view of the Commissioner (Appeals) - Decided in favour of assessee. 2022 (10) TMI 686 Reopening of assessment u/s 147 - Taxability of Hospital income in the hands of Doctor - salary or professional income - information in possession of the Department must prima facie, satisfy the requirement of enabling a suggestion of escapement from tax - existence of an employer employee relationship inter se the parties - as per revenue petitioners are to be construed as employees and not full time/visiting consultants and the income returned by them has to be assessed under the head salary and not professional income - whether the contract entered into by the deceased with R3 was a contract of service in which case a liability would be capped or whether it was a contract for service in which case, the liability would be unlimited? HELD THAT:- The intention of the parties appears to engage in a relationship of equals. The hospital, on the one hand, and the professional, on the other, engage in a relationship where the former provides the administrative infrastructure and facilities and the latter, the professional skill and expertise to result in a mutual rewarding result. The fact that the remuneration paid is variable, and the doctors are not entitled for any statutory benefits also points to the absence of an employer-employee relationship. The mere presence of rules and regulations do not, in my considered view, lead to a conclusion of a contract of service. Rules and regulations are necessary to ensure that the workplace functions in a streamlined and disciplined fashion. Thus, mere existence of an agreement that indicates some measure of regulation of the service of the doctors, cannot lead to a conclusion that they are salaried employees. References in the show cause notices and impugned orders to insistence of the management on selected brand of medication does not advance the stand of the revenue. What is important is that professional decisions as regards the diagnosis, treatment and procedures rests solely and wholly upon the doctors and there is no interference in this regard by the hospital. The fact that the doctors hold full responsibility for their medical decisions and actions and the hospital bears no responsibility in this regard is also of paramount importance, relevant to determine the nature of the relationship as being one of equals, rather than one of master-servant. Ratio of the judgments of the Hon ble Supreme Court in the case of Birla Corporation Limited[ 2005 (7) TMI 104 - SUPREME COURT] , Kaumudini Narayan Dalal and Another[ 2000 (12) TMI 101 - SC ORDER] , Kusum Ingots and Alloys [ 2004 (4) TMI 342 - SUPREME COURT] that categorically settle the proposition that issues settled in one matter must not be raked up in other matters involving similar facts and there must be finality in regard to the same. The officer has, stated in so many words, that all material in his possession that the intends to rely upon, have been shared with the petitioners. The exercise of fact finding is thus complete and to this end, it is not correct to state that the proceedings are premature, as the impugned order contains clear, categoric and conclusive findings that are adverse to the petitioners. There are no disputed facts at play and rather, it is only the interpretation of admitted facts and conclusions arrived at by the officer, that are challenged. The terms in the agreements before me compare very closely to those in the cases discussed in the preceding paragraphs and the conclusions of several Courts upon identical issues are equally applicable in these matters. No hesitation in holding that the information in possession of the revenue does not, in light of the settled legal position discussed above, lead to the conclusion that there has been escapement of tax. The impugned orders are set aside and these writ petitions are allowed. 2022 (10) TMI 685 Addition u/s 68 - disallowance of unsecured loans from directors and promoters - CIT-A deleted the addition - HELD THAT:- On perusal of the Ld. CIT(Appeals) order, we observe that the unsecured loans from directors and promoters are all balances in the books of account as on 01.04.2012 and it was subsequently repaid on 12.04.2013 and there were no changes in unsecured loans in respect of directors and promoters during the year under reference i.e. FY 2012-13 relevant to the AY 2013-14. Therefore, we hold that there is no infirmity in the order passed by the Ld.CIT(A) in deleting the addition made u/s 68 of the Act. Grounds raised by the Revenue on this issue are rejected. Addition made u/s 41(1) in respect of outstanding sundry creditors - CIT-A deleted the addition - HELD THAT:- CIT(A) following the decision of the jurisdictional High Court in the case of Vardhaman Overseas Ltd. [ 2011 (12) TMI 77 - DELHI HIGH COURT ] deleted the addition observing that consistent legal position is that an addition u/s 41(1) of the Act can be made only when the amount has been written off by the Appellant Company in its books of account. We do not see any infirmity in the order passed by the Ld.CIT(A) in deleting the addition made u/s 41(1) of the Act. Thus, we sustain the order of the Ld.CIT(A) and reject the grounds of Revenue on this issue. 2022 (10) TMI 684 Rejection of books of account u/s 145 - HELD THAT:- AO has rejected the books of account on the fact that the assessee has failed to maintain proper records and owing to other irregularities, the Assessing Officer has made the assessment in the manner provided in section 144 of the Act by invoking the provisions of section 145 as the books maintained by the assessee were not reliable. The same has been confirmed by the Ld.CIT(A). We do not find any infirmity in the order of the Ld.CIT(A) in rejecting the books of account of the assessee, thereby we uphold the order of the Ld.CIT(A) and reject ground 2 of the appeal filed by the assessee. Estimation of Income - Bogus purchases transactions - addition being 2% of the bogus sales and on the disallowance of deduction claimed under Chapter VIA - HELD THAT:- The confirmation letters from the parties produced by the Ld.AR, in our opinion, needs to be thoroughly examined and enquired into by the Assessing Officer as to the genuineness of the said documents. We also observe that the said confirmation letters did not have details of name, PAN, etc of the persons, who have signed them. We further observe that some signature in the said confirmation letters were found to be identical with that of others. On this note, we direct the Assessing Officer to make a thorough enquiry pertaining to the said additional evidences to be furnished by the assessee and also to examine the genuineness of the persons furnishing the confirmation letters. With these observations, we remand this issue to the file of the Assessing Officer for admitting additional evidences and for considering this issue on merits based on the submission of the assessee. We also direct the Assessing Officer to consider on merits as to how 2% commission on the estimated sales has been arrived at by the Assessing Officer, in case the submission of the assessee on additional evidence is not to the satisfaction of the Assessing Officer. This ground of appeal is allowed, for statistical purpose. Disallowance of deduction claimed under Chapter VIA - AR contended that the donation made to charitable trust was disallowed for want of documentary evidence by the Assessing Officer - HELD THAT:- In the circumstances, we are inclined to dismiss this ground of appeal for lack of evidence to substantiate the claim of the assessee. In the result, ground 4 filed by the assessee is dismissed. 2022 (10) TMI 683 Disallowance of foreign travel expenses - Business expenses v/s personal expenses - HELD THAT:- Having accepted the fact that the directors of the assessee company had undertaken these foreign trips together with Architect and Advocate, what is to be seen is whether any person would take Architect and Advocate along with him while going on a personal trip abroad. This itself goes to prove that the foreign visits were purely meant only for business purposes and no personal purpose could be established thereon. Moreover, we hold that there cannot be any personal element of expenditure in a company as held by the Hon ble Gujarat High Court in the case of Sayaji Iron Engineering Co. [ 2001 (7) TMI 70 - GUJARAT HIGH COURT ] When the assessee had furnished all the relevant details with supporting evidences together with the purpose of foreign travel, it is wrong on the part of the ld. CIT(A) to simply conclude that they were only pleasure tours and hence not meant for the purpose of business. The facts stated by the assessee supported by evidences were never controverted by the lower authorities or by the revenue before us. Hence in view of the aforesaid observations and respectfully following the judicial precedents relied upon hereinabove, we direct the ld. AO to delete the disallowance made on account of foreign travel expenses - Accordingly, the Ground No.1 raised by the assessee is allowed. Adhoc disallowance of 25% made on account of domestic travel expenses - HELD THAT:- AO made an adhoc disallowance of domestic travel expenses @ 25% and made disallowance in the assessment. It was specifically submitted that the assessee company was previously located in New Delhi and later shifted to Mumbai. In this regard, frequent visits were mandated in order to meet various regulatory compliance requirements and hence employees and its directors had to travel frequently to Gurgoan for the purpose of business. In any event, the books of accounts of the assessee were not rejected by the ld. AO by pointing out certain defects in the evidences submitted by the assessee. Hence there cannot be any adhoc disallowance that could be made by the revenue. On this count also, apart from merits, we have no hesitation in directing the ld.AO to delete the adhoc disallowance made on account of domestic travelling expenses. The findings given hereinabove for Ground No. 1 supra together with case laws relied upon thereon, would hold good for this ground also. Accordingly, the Ground No.2 raised by the assessee is allowed. Disallowance of business promotion expenses - HELD THAT:- We find that the assessee had explained that it is engaged in the business of real estate development and in that regard , the directors had to meet various people at various places to market the real estate project for the purpose of sale of apartments. Hence the business nexus is proved beyond doubt. Since the payments were incurred out of credit cards belonging to the directors, the assessee company had reimbursed the same to the directors. It is not personal in nature. Moreover, payment to Ambey Valley City has been made through Cheque No. 003239 from the bank account of the assessee company in the sum of Rs 1,55,411/-. The entire bills issued by various vendors were duly placed by the assessee before the ld. AO .Without looking into any of those bills, the ld.AO by mere suspicion, surmise and conjecture , proceeded to treat the entire expenses as personal in nature and disallowed. We hold that the action of the ld. AO and ld. CIT(A) is certainly unsustainable in the eyes of law. The observations made by us hereinabove for Ground No.1 supra together with case laws relied upon thereon would hold good for this ground also. Accordingly, we direct the ld.AO to delete the disallowance made on account of business promotion expenses - Decided in favour of assessee. Disallowance on account of depreciation on car merely because the car was registered in the name of the director of the assessee company - HELD THAT:- Registration of the car in the name of the company is not necessary for the purpose of grant of depreciation thereon in the hands of the assessee company. What is required to be seen is whether the said car has been used for the purposes of business of the company. This fact is not in dispute at all. We find that the car is forming part of fixed assets of the assessee company. Hence by placing reliance on the decision of Hon ble Supreme Court in the case of Mysore Minerals Ltd [ 1999 (9) TMI 1 - SUPREME COURT ] we hold that the assessee company would be entitled for depreciation u/s 32 of the Act . We direct the ld. AO to allow depreciation thereon to the assessee company. Accordingly, the Ground No. 4 raised by the assessee is allowed. Recomputation of income of the assessee to allow short term capital loss - HELD THAT:- We find that the assessee had claimed total loss as per Return of income at Rs 39,68,046/- , but the ld. AO while framing the assessment had started the computation with loss of Rs 28,56,420/-. We find that the ld. CIT(A) had only directed the ld. AO to verify the same and recompute total income of the assessee accordingly. Hence there cannot be any grievance for the assessee in this regard as it has already been addressed by the ld. CIT(A) and the matter is pending before the ld. AO. Hence the Ground No. 5 raised by the assessee is dismissed. Seeking TDS credit anad set off of MAT credit u/s 115JAA - HELD THAT:- This aspect has been set aside to the file of ld. AO by the ld. CIT(A) to decide in accordance with law and it is pending before the ld. AO. Hence there cannot be any grievance for the assessee. Accordingly, the Ground raised by the assessee is dismissed. 2022 (10) TMI 682 Depreciation on plant machinery - Disallowance on the ground that the assessee has not generated any business income for the impugned assessment years except other income being interest income - HELD THAT:- Merely for the simple reason that those assets were come into the books of accounts of the assessee on amalgamation, it cannot be said that the assessee has put to use those assets in its business. In this case, the assessee could not substantiate its claim of depreciation on plant machinery in light of reasons given by the AO that there is no business carried out for the impugned assessment years. Therefore, we are of the considered view that the assessee is not entitled for depreciation on plant machinery. The assessee has relied upon various case laws on the issue of depreciation on plant machinery and we find that those case laws are not applicable to the assessee s case and thus, case laws relied upon by the assessee are rejected. We are of the considered view that the assessee is not entitled for depreciation on plant machinery, and thus, we are inclined to uphold the findings of the Ld. CIT(A) and reject the ground taken by the assessee. Disallowance of foreign travel expenses - AO has disallowed foreign travel expenses on the ground that the assessee has failed to prove nexus between the expenditure for foreign travel and business purpose - HELD THAT:- As we find that the assessee could not justify foreign travel expenses with necessary evidence to prove that said expenditure has been incurred for the purpose of business of the assessee. If the assessee has incurred foreign travel expenses for the business of the parent company, then, the parent company should have incurred the cost of travel of the Director, but not the assessee company. Therefore, we are of the considered view that the assessee is not entitled for deduction towards foreign travel expenses and thus, we are inclined to uphold the findings of the Ld. CIT(A) and reject the ground taken by the assessee. Reopening of assessment u/s 147 - income chargeable to tax had been escaped assessment on account of assessment of other income under the head income from other sources and also deduction allowed towards expenditure incurred by the assessee against other income without debiting to capital work-in-progress - HELD THAT:- In this case, on perusal of reasons recorded for re-opening of assessment, we find that the AO does not have any fresh tangible material to come to the conclusion that there is an escapement of income and further, the basis for reasonable belief of escapement of income is financial statements filed by the assessee for relevant assessment year and thus, we are of the considered view that re-opening of assessment in the given facts and circumstances of the case, is bad in law and liable to be quashed and hence, we quashed re-opening of assessment and consequent re-assessment order passed by the AO u/s. 143(3) r.w.s. 147 of the Act. - Decided in favour of assessee. Addition made u/s. 14A r.w.r. 8D - CIT-A directed the AO to disallow expenses under the head interest and finance charges on account of non-commencement of business activities - HELD THAT:- Hon ble Supreme Court in the case of Chettinad Logistics (P.) Limited [ 2018 (7) TMI 567 - SC ORDER] held that Sec. 14A of the Act, cannot be invoked where no exempt income earned by the assessee in relevant assessment year. In this case, there is no dispute with regard to the fact that the assessee has not earned any exempt income. Therefore, we are of the considered view that the AO is erred in disallowing expenditure u/s. 14A r.w.r. 8D(ii) of IT Rules 1962. The Ld. CIT(A) after considering relevant facts has rightly deleted the addition made u/s.14A r.w.r. 8D of IT Rules. Hence, we are inclined to uphold the findings of the Ld. CIT(A) and reject the ground taken by the Revenue. As regards enhancement of income by the Ld. CIT(A) towards disallowance of interest and finance charges for non-commencement of business - Assessee claims to have commenced its business activity of real estate in light of JDA with M/s. Unitech Cestos Realtors Pvt. Ltd., for development of 70 acres of land by virtue of JDA on 22.05.2008, but from the admission of the assessee itself income from operations in relation to real estate business has been commenced from AY 2013-14 onwards. Therefore, we are of the considered view that any expenditure incurred including interest and finance charges in connection with said business should be added back to project work-in-progress to be claimed in appropriate year. Therefore, we are of the considered view that there is no error in the reasons given by the Ld. CIT(A) in directing the AO to disallow interest and finance charges for non-commencement of business. Hence, we are inclined to uphold the findings of the Ld. CIT(A) and reject the ground taken by the Revenue. Disallowance of expenses u/s. 14A r.w.r. 8D in absence of exempt income - HELD THAT :- As disallowance contemplated u/s. 14A cannot exceed exempt income. In this case, the assessee has earned exempt income of Rs. 50,22,099/-, whereas the Assessing Officer has disallowed expenditure u/s. 14A of the Act, at Rs. 1,28,31,758/- contrary to settled law. Therefore, we direct the AO to restrict disallowance u/s. 14A of the Act, to the extent of exempt income earned for the year amounting to Rs. 50,22,099/-. Appeal of assessee partly allowed. 2022 (10) TMI 681 Disallowance on business development expenses - Applicability of provisions of Sec.43CA - income from sales received in excess of the registered sale consideration - method followed by the assessee to account income as well as expenses - CIT-A directed AO to delete addition made towards disallowance on business development expenses - HELD THAT:- The assessee explained that business development on sales expenses is nothing, but various expenses incurred by the assessee as per oral agreement with purchases like stamp duty and registration charges, incidental expenses, etc. As per contractual obligation, the assessee needs to incur these expenses and accordingly, it is in the nature of expenses incurred wholly and exclusively for the purpose of business. No doubt, the assessee must have incurred certain expenses as per contractual obligation with its customers and incurred those expenses. However, fact remains that except making an oral statement, no evidence was filed before the AO and before us to justify its case that the assessee has incurred such and such expenses on behalf of such and such party and such and such property sold during the relevant period. Unless, the assessee proves its case with necessary evidences, the claim of the assessee cannot be accepted, because, if you go through the unique entry passed by the assessee in the books of accounts, in our considered view, the assessee has adopted a tool to nullify the effect of provisions of Sec.43CA of the Act. In one side, the assessee tried to comply with provisions of Sec.43CA and on the other side nullified the effect with corresponding debit to expenses account without any details. CIT(A) without appreciating these facts deleted the additions made by the AO on different grounds, although, the case of the AO was that the assessee has not substantiated expenses debited under the head business development on sales expenses - we set aside the order of the CIT(A) and restored the issue to the file of the AO and direct the AO to re-examine the case of the assessee in light of claim of the assessee that it has incurred certain expenses as per oral understanding with purchasers. The assessee is directed to furnish necessary evidences before the AO to justify its case. Disallowance of gift on gold coins - AO has disallowed gift expenditure u/s.40(a)(ia) of the Act, for non-deduction of TDS - CIT(A) deleted the additions made by the AO on the ground that the prizes given by way of incentives to purchasers is below threshold limit of taxability at source and hence, needs to be allowed in terms of provisions of Sec.40(a)(ia) - HELD THAT:- CIT(A) has set aside the issue to the file of the AO with a direction to re-examine the claim of the assessee in light of arguments of the assessee that prize money is in excess of Rs.10,000/- and above threshold of taxability at source in respect of Gadapam plots and same needs to be allowed in terms of Sec.40(a)(ia) of the Act, and if not suffered tax, the same should be then disallowed. In our considered view, there is no grievance for the Revenue to agitate the issue, because, the issue has been already set aside to the file of the AO for further verification and hence, rejected the ground taken by the Revenue. 2022 (10) TMI 680 Remission of liability u/s. 41(1) - identity of the creditors - Whether transaction between two share holders cannot in anyway affect the capital base of a company nor it can give rise to a remission of liability by a shareholder with regard to the assessee company - whether aggregate value of the liability did not change only the value of the liability got regrouped under some other heads? - CIT-A deleted the addition - HELD THAT:- The Canara Bank as creditor of M/s. DAIL filed recovery suit before the Hon ble Delhi High Court and the Hon ble Court vide their order dated 23.11.2004 passed an order restraining from dealing with amount received from Data Access America in bank account maintained by the assessee company with ABN Amro bank, Chennai. Canara Bank has filed Civil Appeal before the Hon ble Delhi High Court and the Hon ble High Court has passed order on 18.11.2005 and directed all parties, including income-tax department to remit amount received from M/s. Data Access India Ltd. to Canara Bank account. From the above, it is very clear that amount received by the assessee from M/s. Cheran Holdings Pvt. Ltd. does not belong to the assessee, in view of the specific order of the Hon ble Delhi High Court and thus, it cannot be said that it is unexplained income of the assessee - source of money has been explained by the assessee, including identity of the creditors and further said amount has been transferred through proper banking channel only. CIT(A), after considering relevant facts held that the assessee has identified creditors and hence, deleted additions made by the Assessing Officer towards amount received from M/s. Cheran Holdings Pvt. Ltd. as unexplained income of the assessee. Hence, we are inclined to uphold findings of the learned CIT(A) and reject ground taken by the Revenue. 2022 (10) TMI 679 Correct head of income - addition of maintenance charges received on let out property - assessable under the head income from house property or income from other sources - assessee is owner of two floors i.e., 8th 9th floors in the property of Menon Eternity, Alwarpet, Chennai - HELD THAT:- The portion of clause 2.2 of lease deed entered into between the assessee and Fichtner Consulting Engineers (India) Ltd. clearly reveals that the services provided for the charge of maintenance charges is clearly distinguishable from the rental receipt for renting out the portion of the property and it is for only providing services. Once, these maintenance charges are attributable to the services provided, the same derived from providing services is to be considered under the head income from other sources as claimed by the assessee. Hence, we reverse the findings of the lower authorities on this issue and allow the appeal of the assessee. 2022 (10) TMI 678 Application of provisions of section 41(1) - written off an amount as interest receivable from the assessee for the year ending 31.03.2008 as bad debt - assessee has pointed out that the assessee has not at all charged the amount to profit and loss account and not at all debited to profit and loss account, therefore, the provision of section 41(1) of the Act has no application - Only case of AO is that because M/s. V.S. Net Ltd., to whom the assessee has to pay the interest amount has written off the amount as bad debt, thereby the provision of section 41(1) of the Act as to be applied automatically - HELD THAT:- In this case, AO has invoked section 41(1) on the ground that the other party M/s. V.S. Net Ltd. has written off the interest amount as bad debt and therefore, section 41(1) of the Act has to be applied in assessee s case. As per section 41(1) assessee was not allowed deduction in respect of the loss or expenditure revenue or capital for trading liability incurred by the assessee. In the present case, the assessee has not claimed any deduction in earlier years in respect of loss or expenditure or trading liability. Assessing Officer invoked the section 41(1) of the Act presuming that the assessee has got benefit is not correct. We find that section 41(1) of the Act as no application to the facts of the assessee s case. Without considering the provision of section 41(1) of the Act, in sprit, the Ld. CIT(A) has simply confirmed the order of the Assessing Officer. Accordingly, we reverse the order passed by the Ld. CIT(A) on this issue and allow the ground raised by the assessee. 2022 (10) TMI 666 Refund of turnover tax assessed by the department - income assessable under Section 41(1) - As per HC if deduction of turnover tax paid was allowed in the assessment for any year prior to the year in which refund is issued, then the refund amount is assessable in the year in which it is received by virtue of operation of Section 41(1) - HELD THAT:- An order of remand to the High Court is required, however, we are not inclined to pass remit order, as the issue, in our opinion, has been correctly decided. Remand in the present appeal will only entail extra expenditure on the part of the assessee and would not be in the interest of justice. Hence, we decline to exercise our power under Article 136 of the Constitution of India and dismiss the present appeal. 2022 (10) TMI 665 TDS u/s 195 - Royalty - amounts paid by the concerned persons resident in India to non-resident, foreign software suppliers - Royalty paid to foreign software Supplier - Double Tax Avoidance Agreement - HELD THAT:- The impugned judgment(s) passed by the High Court of Karnataka at Bangalore had relied on the earlier judgment of the High Court in the case of Samsung Electronics Co. Ltd. [ 2011 (10) TMI 195 - KARNATAKA HIGH COURT] which judgment has been set aside and overruled by this Court in the decision reported as Engineering Analysis Centre of Excellence Private Limited[ 2021 (3) TMI 138 - SUPREME COURT] Before us, learned counsel for both parties have rightly stated that the facts, as found by the Income Tax Appellate Tribunal and the authorities have not been analyzed by the High Court. We set aside the impugned judgment with an order of remand to the High Court to re-examine the issue and the question of law. Parties would be entitled to raise all pleas and contentions, in accordance with law including reliance on the judgment in the case of Engineering Analysis Centre of Excellence Private Limited (supra), and the contention of the Revenue that notwithstanding the said judgment, the payments would be covered under the head Royalty etc. We are informed that the Review Petition No. 1422/2021 titled The Commissioner of Income Tax International Taxation Another v. Engineering Analysis Centre of Excellence Private Limited Etc., is pending. In case any order is passed, it will be open to the parties to rely upon the said order. The appeals are disposed of in the aforesaid terms. 2022 (10) TMI 664 Classification or categorization of the income - income from long-term capital gain OR income from other sources - amount in issue was paid to the appellant only to safeguard Mr. Dalvi from any claim(s) likely to be made against him by the person who had booked the flats through the appellant, since Mr. Dalvi did not construct the flats as agreed by him earlier - HELD THAT:- The findings of fact recorded by the assessing officer, which have been affirmed right till the High Court, are (i) the appellant had entered into a Memorandum of Understanding dated 10.04.1985 with one Shirish Dalvi, a developer who was to acquire certain pieces and parcels of the land in Village Barve, Taluka Kalyan and thereupon construct residential buildings/apartments; (ii) the appellant had collected funds from prospective members of the proposed society; (iii) these funds were transferred to Shirish Dalvi; (iv) subsequently, Shirish Dalvi faced legal problems in acquiring the land and in obtaining clear title and necessary permissions; (v) thereupon, another Memorandum of Understanding dated 01.12.1989 was arrived and executed between the appellant and Shirish Dalvi, pursuant to which the amount received from the proposed members was refunded to the appellant, albeit this amount has not been brought to tax as income of the appellant, but another amount of Rs. 29,11,000/- (Rupees Twenty Nine Lakh and Eleven Thousand Only) received statedly as compensation by the assessee has been brought to tax as income from other sources. We do not find any justification and reason to hold that this amount received was not taxable being a capital receipt. Whether or not the amount would be taxable as income from business or income from other sources, need not be examined and answered in the present case. Appeal dismissed. 2022 (10) TMI 663 Settlement Commission order - immunity to the assessee from prosecution and penalty under the Act and directing payment of tax alongwith interest within 35 days - HC held mere fact that impugned orders have been given effect to would make no difference as the said orders are patently illegal for the reason as the entire procedure as contemplated in Section 245-D(4) has been completely overlooked by Settlement Commission, as is evident from their own order and, therefore, the impugned orders are patently illegal and nullity in the eyes of law. HELD THAT:- While we agree with the impugned judgment dated 25.02.2015 that the order passed by the Settlement Commission being bereft of reasons is unsustainable, and the fact that the respondent has made payment in terms of the order passed by the Settlement Commission cannot be a ground to sustain the order passed by the Settlement Commission, being contrary to the mandate of Section 245-D(4) of the Income Tax Act 1961, we feel that the matter has to be remitted for fresh decision. Settlement Commission has been wound up, and the matters pending before the Settlement Commission are being adjudicated and decided by the Interim Board constituted under Section 245AA of the Income Tax Act, 1961. The matter would be remitted to the Interim Board with a request that the matter to be taken up expeditiously and would be preferably decided within a period of six months from the date of first hearing. A reasoned order would be passed. Recording the aforesaid, the impugned judgment is partly set aside and the appeals are allowed in the aforesaid terms. We clarify that we have not made any observations or given any findings on the merits. 2022 (10) TMI 662 Assessment u/s 153A - seized material/documents found during the course of search and seizure operations under Section 132 or not? - HELD THAT:- This Court in Principal Commissioner of Income Tax vs. Bhadani Financiers Pvt. Ltd. [ 2021 (9) TMI 902 - DELHI HIGH COURT] has held that where the assessment of the respondents had attained finality prior to the date of search and no incriminating documents or materials had been found and seized at the time of search, no addition could be made under Section 153A of the Act as the cases of the respondents were of non-abated assessment. Both the CIT(A) and the ITAT have given concurrent findings of fact that no incriminating evidence had been brought on record by the Assessing Officer and the time for issuing notice u/s 143(2) had elapsed at the time the search proceedings had been undertaken. - Decided in favour of assessee. 2022 (10) TMI 661 Refund of the pending amount of interest u/s 132B(4)(b) r.w.s. 244A - Petitioner states that the principal amount of seized on 12th November, 2014 was refunded to the Petitioner on 14th November, 2017, but without any interest - HELD THAT:- Keeping in view the fact that Petitioner s representation dated 11th July, 2022 has not been decided till date, the present writ petition along with pending application is disposed of with a direction to the Respondent No.2 to decide the Petitioner s detailed representation dated 11th July, 2022 by way of a reasoned order in accordance with law within eight weeks. In the event, the Petitioner is aggrieved by the decision of the Respondent No.2, the Petitioner shall be at liberty to file appropriate proceeding in accordance with law. 2022 (10) TMI 660 Disallowance of claim for expenses - difference between the actual and the declared amounts under all the heads is on the higher side - Tribunal was justified in rejecting the claim of appellant that the assessing authority has not rejected the audit report and final statement of accounts based on valid materials? - HELD THAT:- The documents/ accounts are at variance with the declaration made by the assessee in the returns. The difference between the actual and the declared amounts under all the heads is on the higher side. The assessing authority gave an opportunity to justify the claim under the respective heads. It is at this juncture the appreciation of the issue comes for our consideration. The resistance to the notice by the assessee is very informal. As already noted, the said reply did not convince the assessing authority. No exception to the findings of fact recorded in this behalf is argued. We have independently perused the conclusions recorded by the AO, CIT (Appeals) and the Tribunal. What arises first for consideration of this Court is whether an error is committed by the Tribunal and the Authorities under the Act; then, this Court can embark upon the merits of the matter. The assessee failed to demonstrate any error in law for our examination. Under those circumstances, having independently considered the issue, we are of the view that the orders under appeal do not warrant our interference. Substantial questions of law framed are unavailable. The findings recorded are simple findings of fact. Questions are answered in favour of the Revenue and against the assessee. 2022 (10) TMI 659 Long term capital gains v/s long term capital loss - applicability of provisions of section 50C - Sale of undetermined beneficial rights in the land at Chembu r - agreement to sell rights in land was unregistered - amendment brought in Section 50C - HELD THAT:- Amendment in Section 50C of the Act by including the expression assessable could be made applicable only in respect of transfer of capital assets made on or after 01/10/2009. In the instant case, the transfer according to the Revenue had been completed prior to 01/10/2009. Hence, the amended provisions of Section 50C of the Act could not be applied at all by the Revenue, as admittedly the transfer of rights in land had happened pursuant to an unregistered agreement. Prior to 01/10/2009, we hold that provisions of section 50C of the Act cannot be applied for unregistered documents. There cannot be any substitution of stamp duty value as the full value consideration in terms of Section 50C of the Act in the instant case. This fact is also strengthened by the fact that assessee has also offered capital gains in the return of income as sale of rights in land has been transferred. The dispute between the Revenue and the assessee is only with regard to two issues (1) what is transferred is sale of land according to Revenue but what is transferred is sale of rights in land according to assessee (2) Revenue substituting stamp duty value in terms of Section 50C of the Act treating it as sale of land as against the actual consideration received in the sum of Rs.24.03 lakhs towards sale of rights in land. Both these issues have already been duly addressed by us hereinabove and hence, we direct the ld. AO to delete the full value of consideration substituted by him by adopting stamp duty value in terms of Section 50C of the Act and accept the sale consideration reported by the assessee herein. Since we have already deleted the addition made u/s.50C of the Act on the ground that the amended provisions of Section 50C of the Act could not be made applicable for transfers made prior to 01/10/2009, the adjudication of other grounds raised by the assessee with regard to reference to Departmental Valuation Officer (DVO), becomes infructuous and academic in nature. Hence, they are not adjudicated herein. Grounds raised by the assessee are allowed. 2022 (10) TMI 658 Sale consideration for capital gain - Enhancement on account of compensation paid for cancellation of agreement to sale executed earlier - HELD THAT:- As rightly contended by assessee, the factum as well as the quantum of compensation paid on cancellation of banakhat as per the mutual understanding between both the sides was duly established and since the same was duly supported by the cancellation agreement executed between both the sides on 22.02.2010, there was no justifiable reason for the CIT(A) to dispute the genuineness of the compensation paid by the assessee and to disallow the deduction claimed by the assessee for the same while computing the capital gain by enhancing the income of the assessee to that extent. Compensation charges on cancellation of banakhat being the cost of improvement of the property - Entitled for deduction on index basis while computing the capital gain, it is observed that this issue is squarely covered by the decision in the case of CIT vs. Shakuntala Kantilal [ 1991 (3) TMI 123 - BOMBAY HIGH COURT] wherein it was held that compensation paid to earlier buyer to cancel the agreement is an expenditure incurred wholly and exclusively in connection with transfer because without removing any encumbrance the sale or transfer of property could not be effected. As held by the Hon ble Bombay High Court, such compensation, therefore, cannot be treated as cost of improvement to the capital asset so as to allow deduction at index value while computing the capital gain. We uphold the order of the Assessing Officer allowing deduction to the assessee on account of compensation paid for cancellation of banakhat to the extent of Rs.36 lakhs. Ground No.2 of the assessee s appeal is thus partly allowed. Disallowance of brokerage expenses - said disallowance was made AO and confirmed by CIT(A) mainly on the ground that brokerage was paid by the assessee to the concerned broker in the year under consideration while the agreement to sale was executed on 01.06.2010 and almost the entire sale consideration was received by the assessee in the FYs 2009-10 and 2010-11. There is, however, nothing brought on record by the authorities below to dispute the services rendered by the concerned broker in connection with the sale of assessee s property for which the brokerage was claimed to be paid. Moreover, the sale deed admittedly was executed in the year under consideration and when the brokerage was paid by the assessee after execution of the sale deed, it cannot be disallowed merely because the agreement for sale was executed and entire consideration was received by the assessee in the earlier years when there was nothing to dispute the services rendered by the concerned broker in connection with sale/transfer of the assessee s property. Accordingly delete the disallowance made by the Assessing Officer and confirmed by CIT(A) on this issue and allow Ground No.4 of the assessee s appeal. 2022 (10) TMI 657 Income deemed to accrue or arise in India - taxability of management fees received by the assessee as fees for technical services under the provisions of the Act as well as under India Singapore Double Taxation Avoidance Agreement ( DTAA ) - HELD THAT:- We find that the coordinate bench of the Tribunal in assessee s own case [ 2022 (7) TMI 1330 - ITAT MUMBAI] decided similar issue in favour of assessee make available clause in the Indo-Singapore tax treaty cannot be invoked on the facts of the present case- as no case is even made out by the revenue that as a result of rendition of these services to the Indian entity, there is any transfer of skill or technology. It is not a question of, as the learned DRP put it, enriching the service recipient, making him wiser to face similar challenges in future on his own and acquiring the skills to deal with these issues , but the test is whether the rendition of these services per se enables the recipient to provide the similar services, without recourse to the service provider, in future. An incidental benefit or enrichment which may add to the capabilities is not sufficient; the critical factor triggering the taxability in the source jurisdiction is the transfer of skills. Once the taxability fails in terms of the treaty provisions, there is no occasion to refer to the provisions of the Income Tax Act, 1961, as in terms of Section 90(2), where the Central Government has entered into an agreement with the Government of any country outside India or specified territory outside India, as the case may be, under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee. - Decided in favour of assessee. 2022 (10) TMI 656 TDS u/s 194H - Discount provided by the distributors to provision of prepaid telecom products being recharge vouchers - HELD THAT:- As in assessee s own case [ 2022 (5) TMI 1462 - ITAT DELHI] which has not been reversed by the Hon ble jurisdictional High Court we hold that the Ld. CIT(A) s order is to be upheld as regards on non-deduction of TDS u/s 194H is concerned. Clauses of the agreement which do not tangibly differentiate from the facts examined by the Hon ble jurisdictional High Court in the case of Idea Cellular Ltd. [ 2010 (2) TMI 24 - DELHI HIGH COURT ] we decline to interfere with the order of the Ld. CIT(A) TDS u/s 194J - Roaming charges paid to various operators - As decided in own case [ 2016 (8) TMI 422 - KARNATAKA HIGH COURT ] payment made by a mobile service provider to another mobile service provider for utilization of roaming mobile date and connectivity cannot be termed as technical service and therefore, no TDS was deductible u/s 194J. Decided partly in favour of assessee. 2022 (10) TMI 655 Assessment u/s 153C - requirement of law for exercising jurisdiction u/s 153C - HELD THAT:- Hon ble Jurisdictional Allahabad High Court in the case the CIT vs. Raj Kumar Arora [ 2014 (10) TMI 255 - ALLAHABAD HIGH COURT] has unequivocally decided this issue in favour of the Revenue by holding that the AO would be empowered to assess and reassess the returns of assessee not only for the undisclosed income which was found during the search operation but also with regard to the material that was available at the time of the original assessment proceedings. Also see Sunshine Infra State Pvt. Ltd. [ 2022 (5) TMI 1297 - ITAT ALLAHABAD] In the present case, the assessee being under the jurisdiction of Hon ble Allahabad High Court, the ratio of the decision in the case of Raj Kumar Arora (supra) holds the field as it is binding on all the authorities under the jurisdiction of Hon ble Allahabad High Court. We therefore respectfully following the judgement of the jurisdictional High Court rendered in the case of Rajkumar Arora (supra) hereby dismiss the grounds of the assessee. Approval granted by Addl.CIT u/s 153D of the Act was a mechanical approval without application of mind and therefore assessment order was bad in law and contrary to the settled position of law - From the records, it is evident that the entire case file was placed before the competent authority who after perusing the same and due application of mind had accorded the requisite approval and therefore in our view, the contentions of the assessee is merely based upon suspicion without being backed by any material evidence and hence we do not see any merit in the contention of the Ld AR. Thus this Ground No.2 raised by the assessee is dismissed. Valuation adopted in respect of the construction of a property at Noida UP. - HELD THAT:- The direct evidence on cost of construction should be preferred unless found unreliable or unacceptable to the indirect evidence on the point coming through the road of estimated valuation. The Revenue has not brought any material on record suggesting that the assessee had in fact incurred any other expenditure more than what has been recorded in the books of accounts or the entries made in the accounts are false. As well settled now that even if the AO proceeds for estimation of fair market value of the property, he is duty bound to apply state PWD rate in view of the binding precedents. Therefore, we are unable to sustain the impugned addition firstly for the reason that the AO ought to have brought direct evidences of incurrence of expenditure towards construction of property to demonstrate that the assessee had in fact incurred expenditure more than what is recorded in its books of accounts and secondly that the Hon ble High jurisdictional High Court and the Coordinate Benches of this Tribunal have unequivocally ruled that the state PWD rates should be adopted for computing the fair market value of the property situated in different states. Therefore, respectfully following binding precedents, we hereby direct AO to adopt PWD rates as prevalent at that point in time for ascertaining the correct and true figure of investment made by the assessee. In case, if the AO finds that upon applying prevailing PWD rates, fair market value of the property is lesser than the investment disclosed by the assessee, he shall delete the addition. Rebate on account of self supervision charges - HELD THAT:- Interest of justice that if a rebate of self supervision @10% is granted to the assessee. Our view of granting self supervision rebate is also supported by the decision of co-ordinate Bench of this Tribunal rendered in the case of Smt. Saroj Gupta [ 2006 (8) TMI 242 - ITAT DELHI-B] wherein the Tribunal has allowed the self supervision rebate at the rate of 10%. We accordingly direct the AO to grant the rebate on account of self supervision charges as observed hereinabove at the rate of 10%. Thus this ground of assessee s appeal is partly allowed in the terms indicated hereinabove for statistical purpose only. Addition made u/s 68 and 69C qua the share application money and payment of commission - HELD THAT:- Considering the peculiarity of the facts, we are of the view that in the present case, the additions have been made purely on the basis of statement recorded at the back of the assessee without providing an opportunity of cross examination of the maker of the statements. Moreover, the statements do not reveal the specific details of the transaction with the assessee and the share applicant. Merely a sweeping statement without supported by relevant evidences cannot form the basis of making the addition. It is well settled that the addition cannot be made purely on the basis of suspicion and the AO is required to bring material evidences in its support. In the instant case, the AO has not brought any adverse material suggesting that the assessee had devised a colorable device for the purpose of routing its own money. In the absence of such evidence and in the light of the binding decisions cited hereinabove, we are of the considered view that the impugned addition cannot be sustained in the facts of the present case. We accordingly hereby direct the AO to delete the addition - Also the addition made by the AO on account of alleged payment of commission thereon u/s 69C also cannot be sustained. Hence, the AO is hereby directed to delete the addition. Addition made by estimating the cost of construction on the basis of the report submitted by the DVO - HELD THAT:-We direct the AO to adopt the state PWD rates for estimating the cost of construction and further grant a deduction of self supervision charges at the rate of 10%. Thus the grounds raised by the assessee are allowed in the terms indicated hereinbefore for statistical purposes. Unexplained construction in property - HELD THAT:-So far the question of adopting the PWD rate is concerned, however in our considered view the AO ought to have taken into consideration the actual expenditure incurred by the assessee on the construction of the property till the date of inspection by the DVO and ought to have given the setoff of the same. We therefore do not see any reason to interfere with the finding of CIT(A). Thus the ground raised by the Revenue is dismissed. Difference in fair market value of the property as declared by the assessee and adopted by AO on the basis of DVO report - contention of the assessee that if the PWD rates self - supervision charges are allowed then there would not be any occasion to make addition - HELD THAT:- The facts of the present case are identical to the facts of the case of Ecstasy Buildcon Pvt. Ltd. as admitted by both the parties. In the case of Ecstasy Buildcon Pvt. Ltd. (supra), we have examined the issue elaborately and decided the issue in favour of the assessee by directing the AO to adopt the State PWD rates for the purpose of arriving at fair market value of the property. For the same reasoning, in this case also we hereby direct the AO to adopt the State PWD rates and also grant deduction on account of self supervision at 10%. The AO is hereby directed to delete the impugned addition in view of the working given by the Assessee in the form of chart which is reproduced hereinabove. Thus the grounds of the assessee are allowed. Addition u/s 69A of the Act being unexplained cash found - as contention of the assessee that the cash found at the time of search was out of the sale proceeds of the various paintings which assessee s wife had acquired from her late father who had hobby to collect the valuable paintings. The late father in law of the assessee had sufficient source of income to make such purchases - submissions of the assessee about the cash generated out of the sale of the paintings have not been controverted by Revenue by placing any adverse evidence on record - it is also a fact that assessee has also not produced any evidence that was called for by the AO regarding details of purchases of paintings - we are of the view that the disallowance of claim of assessee regarding sale of paintings in the present facts of the case is excessive and arbitrary. We therefore in interest of justice restrict the addition to the extent of Rs.6,00,000/- i.e. 30% of total disallowance made by the AO and rest of the addition is hereby deleted. Thus the ground of assessee is partly allowed. Unexplained investments u/s 69 in the property at Indirapuram, Gaziabad - HELD THAT:- Lower authorities have made addition purely on the basis of the notings in diary found in the possession of Shri B. B. Goel and the statement recorded in this regard. The Revenue did not provide opportunity of cross examination to the assessee in respect of any statement made by Shri B. B. Goel. The AO has also not brought any other material suggesting the actual fair market value of the property in question is higher than what is recorded in the sale deed. Undisputedly, transfer of a property would always be between two parties one being seller and other the purchaser. It cannot be assumed that one party disclosed correct figure of consideration and the other party concealed the true value of the property. There is no mention about action taken by Revenue in the case of seller who had sold the shops to the assessee. It was incumbent upon the AO to demonstrate the correct fair market value of the property when he was not accepting the value disclosed by the assessee. In the absence of such finding with supporting evidences, any addition made on the basis of presuming that the figures written by the third party in his diary is the fair market value of property, would not be justified and against the law laid down in the case of CBI vs. V. C. Shukla [ 1998 (3) TMI 675 - SUPREME COURT] and followed in other catena of judgments. We therefore respectfully following the binding precedents on this issue relied by the Ld. AR hold that the addition has been made purely on the basis of surmises and we therefore direct for it deletion. Thus the ground raised by the assessee is allowed. Addition u/s 68 - unsecured loan being routed through dubious route by the assessee to bring her own unexplained money through the lenders - HELD THAT:- AO without carrying out requisite enquiry proceeded purely on the basis of surmise and therefore, such approach of the assessing authority is not in accordance with the settled position of law. Admittedly in the present case no addition has been made in the case of the lender. Hence, it can be safely inferred that no addition has been made in the hand of the lender meaning thereby the source of such amount has been duly accepted in the hand of lender since no addition has been made by AO. Therefore, in our considered view source is explained. Now AO cannot blow hot and cold at the same time. There is no finding regarding the unsecured loan being routed through dubious route by the assessee to bring her own unexplained money through the lenders. In the absence of specific finding by the AO supported by relevant evidence that the assessee has adopted the route of the unsecured lenders for bringing her own money, no addition could be made. Furthermore, the Revenue has not rebutted the fact that the loan in question was repaid during the year of its receipt. In the case of ITO Vs. Habitat Infrastructure Ltd. [ 2019 (4) TMI 1104 - ITAT DELHI] held that there was no need to interfere with the findings of CIT(A) who deleted the addition on the basis that loan which was obtained and repaid by the assessee subsequently. We therefore respectfully following the binding precedents cited by the Ld. AR noted hereinabove direct the AO to delete the addition. Thus the ground of the assessee is allowed. Addition u/s 69A of the Act with respect to unexplained investment in jewellery and bullion - HELD THAT:- As in terms of CBDT instructions, 535.28 gms of jewellery, in the absence of any contrary material, is stood explained. Further, the contention that out of the total jewellery found at the premises of Shri Dinesh Yadav, jewellery weighing 160.358 gms belonged to Mrs. Shweta Yadav, who is stated to be the sister of Mr. Manish Yadav. The AO could not controvert the fact that at the time of search the jewellery in question was found in a separate pouch with the name of Mrs. Shweta Yadav. Therefore, looking to the fact that Shri Manish Yadav admitted the fact that the jewellery belonged to his sister, Mrs. Shweta Yadav and coupled with the fact that it is a normal practice in Indian household that ladies keep their jewellery jointly, the AO ought to have not attributed the aforesaid jewellery solely in the hands of the Assessee. We hold accordingly, and direct the AO to delete the addition to that extent. Out of the remaining jewellery, we are of the considered view that the AO should have considered the gift deed and other evidences furnished by the assessee explaining the ownership of the jewellery found in the possession of Shri Dinesh Yadav. Therefore taking a holistic view, jewellery to the extent of 150 gms be treated as not explained and rest of the jewellery stood explained. We therefore, direct the AO to restrict the addition in this respect to the extent 150 gms in the hand of the assessee. Thus this ground of the assessee is partly allowed. Addition u/s 68 - AO had made addition on the basis that there was no debit entry in the bank statement of the lender - HELD THAT:- As looking into the material placed on record in support of the claim regarding loan of Rs. 20 lakh received from Shri Shantnoo Goyal, the amount is duly reflected. Therefore, the suspicion of AO is baseless. We, therefore, looking to the material placed on record are of considered view that the AO erroneously made addition and hence same is hereby deleted. Thus the ground of the assessee is allowed. Setoff of jewellery - HELD THAT:- Action of AO is not justified for not giving set off of jewellery belonging to other persons and duly explained by the assessee. We, therefore, taking a holistic view restrict the addition to the extent of 300 gms jewellery in the hands of assessee. Rest of the addition is hereby deleted. Thus the ground of the assessee is partly allowed. Unexplained investment addition u/s 69B - HELD THAT:- Revenue has not rebutted the claim of the assessee that the property in question was yet to be completed and the DVO took the value of completed property coupled with fact that no evidence is brought on record by the AO suggesting that any expenditure more than what was booked by the assessee in its books of accounts has been incurred. In the absence of such evidence, the cost adopted by the AO is merely an estimation and pure guess work. Therefore, following our decision in the case of Ecstasy Buildcon Pvt. Ltd. we hold that the action of AO for making addition partly on the basis of a report by DVO who has failed to take note of the judicial pronouncements, adopted CPWD rate for the purpose of estimation of cost of construction cannot be sustained. We, therefore, direct the AO to delete the impugned addition. The Ground of Assessee s appeal is allowed and corresponding ground and Revenue s appeal is dismissed. 2022 (10) TMI 654 Income deemed to accrue or arise in India - Royalty receipt - Implementation of SAP for transportation system at Pune India- Singapore DTAA - Fee for Technical Services - TDS u/s 195 - CIT(A) held that the services mentioned above fall under the category of Article 12(4)(a) as they are ancillary and subsidiary to consideration for Royalty. The ld. CIT(A) also held that the taxability is determined by nature of service only and since there was no PE they have to be taxed on gross basis - HELD THAT:- The quarrel/is squarely covered in favour of the assessee and against the Revenue by the decision of the Hon ble Supreme Court in a land mark judgment in the case of Engineering Analysis Center of Excellence Pvt. Ltd. [ 2021 (3) TMI 138 - SUPREME COURT ] amounts paid by resident Indian end-users/distributors to nonresident computer s. manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the pay of royalty for the use of copyright in the computer software, and that same does not give rise to any income taxable in India, as a result of the persons referred to in section 195 of the Income-tax Act were not liable to deduct any TDS under section 195 of the Income-tax Act. - Hence, we hold that the appeal of the assessee on the ground of Royalty is allowed. Provisions of FTS - make available clause - We find the similar matter has been adjudicated by the Co-ordinate Bench of ITAT Mumbai in the case of SCA Hygiene Products AB Vs. DCIT [ 2021 (1) TMI 323 - ITAT MUMBAI ] held that the payment received by the assessee has been held to be in the nature of reimbursement, which is outside the ambit of taxation. The person selling the SAP software is Be One Solution, Switzerland, whereas the person providing the services in question is the assessee. Article 12(4)(a) will not, therefore, come into play at all. In our considered view, therefore, the taxation under article 12 in the present case can come into play only when the make available clause is satisfied, but then the Assessing Officer s justification for the satisfaction of make available clause, for the detailed reasons set out earlier in this paragraph, does not meet our judicial approval. In view of these discussions, as also bearing in mind the entirety of the case, we uphold the plea of the assessee on this point as well. Accordingly, we hold that the income on account of Information Technology Services is also not taxable under article 12 - Decided in favour of assessee. 2022 (10) TMI 653 Late payment of Employees contribution to EPF and other Welfare Funds - no payment till the due date, mentioned in the respective Acts, but before the due date of filing return of income u/s. 139(1) - HELD THAT:- As relying on RAJA RAM [ 2021 (11) TMI 370 - ITAT CHANDIGARH] additions made by the AO and sustained by the Ld. CIT(A) on account of deposits of employees contribution of ESI PF prior to filing of the return of income u/s. 139(1) under consideration prior to the amendment made by the Finance Act, 2021 w.e.f. 1.4.2021 vide Explanation 5, are deleted. - Decided in favour of assessee. 2022 (10) TMI 652 Assessment u/s 153A - Addition of receipt of share premium and unsecured loan as unexplained cash credit u/s.68 - incriminating material found during the course of search or not? - HELD THAT:- As brought on record that except the statement u/s.132(4) AO did not place any reliance on any incriminating material seized during the course of search for the purpose of framing an addition u/s.68 of the Act in the instant case. The very same issue was the subject matter of adjudication by the erstwhile ld. AO in the re-assessment proceedings completed for A.Y.2009-10 u/s.143(3) r.w.s. 147 wherein it was accepted as genuine. This itself goes to prove that there could not be any incriminating material that could be found during the course of search relatable to these additions. Only basis for making the addition is statement recorded u/s.132(4) of the Act which has been duly admitted by the ld. AO both in the assessment order as well as in the remand proceedings - It is trite law that statement u/s.132(4) of the Act cannot be considered as an incriminating material unless it is corroborated by some other evidence found during the course of search and the said statement cannot be relied upon solely for the purpose of making an assessment. The decisions in this regard have already been dealt elaborately by the CIT(A) as detailed hereinabove The assessment for A.Y.2009-10 is a concluded assessment as on the date of search in the instant case and assessment has been framed by the ld. AO by making additions u/s.68 of the Act without reference to any incriminating material found during the course of search relatable to such additions. This issue is very well settled by the decision of Continental Warehousing Corporation [ 2015 (5) TMI 656 - BOMBAY HIGH COURT ] - Decided against revenue. 2022 (10) TMI 651 Revision u/s 263 - lack of inquiry by AO - as per CIT, selection of the assessee s case for limited scrutiny was for the reason of large share premium having been received by the assessee company and that a perusal of the assessment order would show that the AO has not even mentioned such fact in the body of the assessment order - HELD THAT:- There was a complete lack of inquiry on the part of the AO on the issue of share premium and, therefore, in view of complete lack of inquiry by the AO, we have no option but to hold that the order of the Ld. PCIT deserves to be upheld. We would like to emphasize that it is clearly being brought out from the records that the assessee had submitted details like date-wise details of share capital receipts, confirmation certificates from the investor, copy of ITR along with computation chart and the balance sheet of the investor etc., bank statement of the investor but no explanation was called for regarding valuation of shares or the genuineness and creditworthiness of the investors. Therefore, in our considered opinion it is a case where the AO did not make any inquiry vis- -vis the share premium and simply accepted the details filed by the assessee and, thus, the AO had failed miserably to carry out the duty cast upon him. Therefore, it is our considered view that it is a case of complete lack of inquiry by the AO and, therefore, we hold that the Ld. PCIT was absolutely correct in invoking the revisionary powers u/s. 263 - Appeal of the assessee stand dismissed. 2022 (10) TMI 650 Deduction u/s 80IA(4) - Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. - CIT-A treating the assessee as a Developer of infrastructure projects instead of Work Contractor as treated by the A.O.- HELD THAT:- To sum up, (i) first to see any new infrastructural facility has been put in place (and not mere repairs/ restoration/ upgradation/ strengthening etc. is done of the existing facility) (ii) In addition to works contract, the assessee undertakes addition responsibilities and risks attached to the project being undertaken, both financial risk as well as undertaking responsibility towards various other obligations attached towards successful completion and handling over the project including post completion performance guarantee, then he would, in our considered view, be eligible to deduction u/s 80-IA(4) of the Act. Deduction u/s 80-IA (4) in respect of project Number 6 Sabli Dam work - We are of the considered view that the assessee is not acting as a mere works contractor in respect of this project. The assessee has taken the responsibility of complete handholding of the project and also additional maintenance after 12 months post completion of project. Accordingly, we are of the view, that Ld. CIT(Appeals) has not erred in facts and in law in holding that the assessee is eligible for claim of deduction under section 80-IA (4) of the Act in respect of project Number 6. Contract No. 7: Tapi River, Kathor PKG-6 Irrigation - From the terms of the contract, primarily the work seems to involve restoration/upgradation/strengthening/maintenance of existing flood protection earthern embankment on the bank of river Tapi. The scope of work, in our view does not involve development of an infrastructure facility, as envisaged within the meaning of section 80-IA (4) of the Act. The work primarily has upgraded/strengthened the existing projects, but no development of infrastructural facility, in our view has taken place. Although, the assessee has undertaken responsibility of maintenance of the safer. 12 months after completion of the project, however, looking into the totality of facts, we are of the considered view that the assessee is not eligible for deduction under section 80-IA (4) of the Act We are of the view that Ld. CIT(Appeals) has erred in facts and in law in holding that the assessee is eligible for claim of deduction under section 80-IA (4) of the Act in respect of contract number 7 as mentioned above. Accordingly, we are of the view that the assessee is not eligible for claim of deduction under section 80-IA (4) of the Act in respect of contract number 7. Contract number 8 Tapi River, Kathor PKG-3 Irrigation - From a perusal of the contention of the order passed by Ld. CIT(Appeals), the scope and contents of contract number 8 and contract number 7 mentioned above are similar. Accordingly, observations in respect of contract number 7 would apply to contract number 8 as well. Accordingly, Accordingly, we are of the view that Ld. CIT(Appeals) has erred in facts and in law in holding that the assessee is eligible for claim of deduction under section 80-IA (4) of the Act in respect of contract number 7 as mentioned above.Thus assessee is not eligible for claim of deduction under section 80-IA (4) of the Act. Contract number 9: Bharuch 4, Lane Road - In this case, it may be useful to refer to CIRCULAR NO. 4/2010 [F.NO. 178/14/2010-IT(A-I)], DATED 18-5-2010, wherein Board considered the issue as to whether widening of existing roads constitutes creation of new infrastructure facility for the purpose of section 80-IA(4)(i) of the Income-tax Act, 1961. Vide the above Circular, CBDT clarified that widening of an existing Road by constructing additional lanes as a part of a highway project by an undertaking would be regarded as a new infrastructure facility for the purpose of section 80-IA(4)(i). However, simply relaying of an existing Road would not be classifiable as a new infrastructure facility for this purpose. Accordingly, in view of the above circular and in light of the observations made by ld. CIT(A), we are of the view that Ld. CIT(Appeals) has not erred in facts and in law in holding that the assessee is eligible for claim of deduction under section 80-IA (4) of the Act in respect of contract number 9 as mentioned above. CONTRACT NUMBER 10: GIDC CHEMICAL ZONE DAHEJ ROAD - As per terms of the contract, we are of the considered view that the assessee is not acting as a mere works contractor in respect of this project. The assessee has taken the responsibility of complete handholding of the project and also additional maintenance for 60 months post completion of project.Accordingly, we are of the view, that Ld. CIT(Appeals) has not erred in facts and in law in holding that the assessee is eligible for claim of deduction under section 80-IA (4) of the Act in respect of contract number 10 mentioned above. C ontract number 11: GIDC Dahej Road - Assessee is not acting as a mere works contractor in respect of this project. The assessee has taken the responsibility of complete handholding of the project and also additional maintenance after 60 months post completion of project. In this case, it may be useful to refer to CIRCULAR NO. 4/2010 [F.NO. 178/14/2010-IT(A-I)], DATED 18-5- 2010, wherein Board considered the issue as to whether widening of existing roads constitutes creation of new infrastructure facility for the purpose of section 80-IA(4)(i) of the Income-tax Act, 1961. Vide the above Circular, CBDT clarified that widening of an existing Road by constructing additional lanes as a part of a highway project by an undertaking would be regarded as a new infrastructure facility for the purpose of section 80-IA(4)(i). However, simply relaying of an existing Road would not be classifiable as a new infrastructure facility for this purpose. CIT(Appeals) has not erred in facts and in law in holding that the assessee is eligible for claim of deduction under section 80-IA (4) of the Act in respect of contract number 11 mentioned above. Contract number 13: Bhopal Vidisa Road - We are of the considered view that the assessee is not acting as a mere works contractor in respect of this project. The assessee has taken the responsibility of complete handholding of the project and also additional maintenance for 12 months post completion of project. We would like to further add that in respect of the mobilisation advance received by the assessee, subject to certain conditions - CIT(Appeals) has not erred in facts and in law in holding that the assessee is eligible for claim of deduction under section 80-IA (4) of the Act in respect of contract number 13 mentioned above. Morbi Maliya Rural P-2 Road - It is evident that the assessee has not developed any infrastructure facility but only rendered services of civil work in the form of repairing and restoration of the existing road. A clear distinction can be made between widening an existing road by constructing additional lanes as part of the highway project vis- -vis improving, maintaining and refurbishing an existing road. For a specific patch of road, as the taxpayer was only operating and maintaining an already existing four lane road by strengthening it, no new infrastructure facility came into existence. Laying a service road and laying a main line were two different activities and laying a service road could not be termed as a new infrastructure facility, to claim deduction under section 80-IA of the Act. See GMR Tambaram Tindivanam Expressways Ltd [ 2018 (11) TMI 1794 - ITAT BENGALURU] . We find no infirmity in the order of Ld. CIT(Appeals) with respect to Contract Number 1. Accordingly, in our view, the assessee is not eligible for claiming deduction under section 80-IA of the Act in respect to Contract number 1. Contract No. 2: KKS RJTI-A Road, Contract No. 3: Morbi Malaiya KP/RAJ/P-2 ROAD, Contract No. 4: Morbi TankaraKP/RAJ/P-3 ROAD, Contract No. 5:Nabard/RAJ/P-4WMT ROAD AND Contract No. 12:GKA KM42 TO 248 NH-8 NHAI ROAD - From perusal of the observations made by Ld. CIT(Appeals), it is evident that the assessee has not developed any infrastructure facility but only rendered services of civil work in the form of repairing and restoration of the existing road. In this case, it may be useful to refer to CIRCULAR NO. 4/2010 [F.NO. 178/14/2010-IT(A-I)], DATED 18-5-2010, wherein Board clarified that widening of an existing Road by constructing additional lanes as a part of a highway project by an undertaking would be regarded as a new infrastructure facility for the purpose of section 80-IA(4)(i). However, simply relaying of an existing Road would not be classifiable as a new infrastructure facility for this purpose. Accordingly, in our view, we find no infirmity in the order of Ld. CIT(Appeals) with respect to Contracts as not eligible for claiming deduction under section 80-IA(4). 2022 (10) TMI 649 Unexplained credit u/s 68 - Bogus purchases - Transaction of Penny Stock companies and Commission paid thereon - commission paid for acquiring such long-term capital gain added u/s 69C - HELD THAT:- The report of the SEBI Related to the stock market regulation and its order is not in assistance to the revenue based on these findings the CIT hold view that mere statement of third-party is not enough to make addition in the hands of the assessee and also vacated the findings of the ld. AO. CIT(A) reviewed the copies of the documents filed by the assessee wherein he is reviewed the contract notes, ledger account, bank statement, demat account, affidavit of Anil Agarwal etc. after going through this records he observed that no questions raised before the Anil Agarwal about the transaction entered by the assessee is under his knowledge not only that the Anil Agarwal retracted his statement so even on that count no addition can be made in the hands of the assessee. CIT(A) extracted various decision that has been considered by him while considering the appeal of the assessee and the same were not reiterated here to avoid the duplication but he has mainly considered the various jurisdictional binding decision and based on those findings he allowed the appeal of the assessee. DR reiterated the findings recorded by the AO and submitted that the ld.CIT(A) has deleted the addition merely on technical ground and no merits of the case is discussed. We find that ld. CIT(A) has dealt all the aspects that the ld. AO has raised and given his finding on each one every issue in detailed and has also called for the remand report, now the revenue cannot take a plea on the issue again. Thus, we do not find any reason to deviate from the findings recorded by the CIT(A) in his order and we do not find any mistake of facts as well as in law in the detailed and reasoned findings of the CIT(A). Addition made by the AO is based on mere suspicion and surmises without any cogent material to show that the assessee has brought back his unaccounted income in the shape of long/short term capital gain. On the other hand, the assessee has brought all the relevant material to substantiate its claim that transactions of the purchase and sale of shares are genuine. Accordingly, we do not find any reasons to deviate from the detailed and reasoned finding of the CIT(A) and thus we dismiss the ground no 1 of the revenue. Addition on account of notional commission u/s 69C - treatment of long/short term capital gain as bogus - Once, we have confirmed the finding of the CIT(A) on the issue of treatment of long/short term capital gain as not bogus then, the consequent addition made by the AO rightly deleted by the CIT(A) and accordingly ground no. 2 raised by the revenue is also dismissed. 2022 (10) TMI 648 Revision u/s 263 by CIT - Direction to AO to consider the capital gain for an amount as Short Term Capital Gain - HELD THAT:- Before us, assessee first of all argued that the AO has examined the entire issue and he took us through the assessment order wherein the AO has considered the claim of capital gains exemption u/s. 54 of the Act and the entire discussion in the assessment order is as regards to this capital gain only. Assessee stated that the AO has raised queries and assessee vide letter dated 23.06.2017 submitted complete details. Relevant details filed by the assessee before AO during original assessment proceedings that the AO has examined the complete details before passing a speaking order on the very issue. From the assessment order, it can be gathered that the AO has formed an opinion and a view is taken which is one of the possible view. Admittedly, the assessee purchased one property at Medavakkam Main Road in 1998 for a sum which includes the building cost. Before construction of residential house on this property, the assessee has to demolish this building and accordingly, the building was demolished in 2012 but assessee has purchased this land along with residential building. Hence, it cannot be a case of Short Term Capital Gain as directed by PCIT. Therefore, we find no infirmity in the order of AO accepting the Long Term Capital Gain declared by assessee. Hence, we reverse the revision order and allow the appeal of assessee. 2022 (10) TMI 647 Assessment u/s 153A - Addition u/s 68 - Share transactions are bogus and are to be treated as the assessee s unexplained income - incrementing material found during the search or not? - HELD THAT:- The additions made by the AO while passing the assessment order u/s153A for the assessment year 2012-13 are not sustainable. We found force in the arguments of the ld. AR of the assessee and also convince with the findings of the CIT(A) who has after considering the facts on record taken a considered view that the looking to the facts of the case on technical ground, he has considered the appeal of the assessee and before giving his findings he has called for the remand report also and the equal chance were given to revenue place their case. DR appearing on the behalf of the revenue has merely relied on the investigation done at the time of search simultaneous survey conducted in the investor company. In all these processes we have not seen any reasons as to why and how the order of the ld. CIT(A) is not correct. There is no admission of either party of any undisclosed income. CIT(A) has after considering the details arguments of both the parties clearly taken a view that there is no incrementing material, no addition can be made for the assessment which are already completed after making the proper enquiries by the AO, and those assessment cannot be allowed to again reframed merely based on the search and that too without any fresh evidence. Merely the surveys conducted parties are not available after 8 years it is not the fault of the assessee and without any fresh material unearthed during search no fresh addition can be made on the issue which are already settled. Even, the ld. CIT(A) has based on the arguments of the assessee followed the jurisdictional High Court decision and Tribunals orders and even this co- ordinate bench decision is also binding on us in the absence of any contrary judgement. Appeal of the revenue is dismissed 2022 (10) TMI 625 Reopening of assessment u/s 147 - unexplained money u/s.69A - HELD THAT:- Although, the assessee claims to have made each deposit out of rental income from property, but could not file any evidence from which property so called rent is derived, from whom said rental income is received. Therefore, in absence of details regarding rental receipt from property, the explanation of the assessee is that cash deposits into bank account is out of rental income, cannot be accepted. Therefore, we are of the considered view that there is no error in the reasons given by the Ld.CIT(A) to sustain the addition made towards cash deposits into bank account. Hence, we are inclined to uphold the findings of the Ld.CIT(A) and dismiss the appeal filed by the assessee. 2022 (10) TMI 624 Revision u/s 263 - difference between value of imports shown by the assessee in the books of accounts and value determined by the CBEC for the purpose of payment of customs duty - As per CIT, AO has failed to consider relevant materials to bring to tax, the difference in value of import made by the assessee for the relevant assessment years which rendered the assessment order passed by the AO is erroneous in so far as prejudicial to the interest of the Revenue - HELD THAT:- According to the PCIT, said difference constitutes unexplained income of the assessee, which needs to be taxed. It was the explanation of the assessee that the aspect of import purchases has been examined by the AO, where the assessee has explained the reasons for difference in purchases. According to the assessee, he had purchased used machinery from abroad, for which, necessary invoices and other related documents have been produced. CBEC has not accepted the invoice value and determined separate value for the purpose of customs duty. Therefore, merely for the reason that the CBEC does not accept the value declared by the assessee, it does not mean that the assessee has understated the imports and difference between actual price paid for imports and value determined by the CBEC is undisclosed income of the assessee. AO after considering relevant facts has rightly concluded that there is no reason to make addition towards difference in value of imports. Since, the AO has already considered the issue and has taken a view, in our considered opinion, the PCIT cannot substitute his view and held that assessment order passed by the AO is erroneous in so far as prejudicial to the interest of the Revenue. Therefore, we quashed the order passed by the PCIT u/s. 263 of the Act. Appeal filed by the assessee is allowed. 2022 (10) TMI 623 Reopening of assessment u/s 147 - Notice beyond period of four years - whether any reasons recorded that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for framing of assessment for the relevant assessment year? - HELD THAT:- We are of the view that the reopening is beyond 4 years and as the original assessment was framed u/s. 143(3) of the Act, the Revenue could not establish any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment, the reopening in present case is bad in law and hence, quashed. Since we have quashed the reassessment on reopening, we need not to go into the merits of the case. Decided in favour of assessee. Customs 2022 (10) TMI 646 Seeking production of papers and documents relating to the issuance of the Seizure Memo - seeking release of the Vessel MV Polaris Z (Imo 9109512) - goods identified as pigeon-peas - Soybean consignment - prohibited goods or not - HELD THAT:- It evident from the record and it is an admitted position that in detaining the vessel MV Polaris Z (IMO 9109512), what weighed with the authorities was the only reason that it carried the cargo allegedly prohibited goods of genetically modified Soyabean - In that view and since the cargo will have to travel back to the Mosambique port in the same vessel, and further that the custom authorities have permitted the provisional release of the cargo on the conditions imposed by the court as above, the vessel will have to be necessarily allowed to be released. At the same time, it would be in the fitness of things that the owner of the vessel- the petitioners shall comply with the identical conditions provided for the release of the goods in paragraph No.5.1 above for release of cargo of Soyabean. It is provided that neither the cargo of allegedly prohibited genetically modified Soyabean, nor the vessel MV Polaris Z (IMO 9109512) shall be released by the respondent custom authority unless the conditions of furnishing of bond, bank guarantee and giving of undertaking before this court as directed - Satisfaction of those terms shall be operated as preconditions for permitting the cargo in question as well as the vessel to be permitted to leave. As far as the conditions of production of certification of unloading at the Mozambique Port, the time of four weeks is granted from the date of sailing of the vessel. Petition disposed off. 2022 (10) TMI 645 Jurisdiction - scope of SCN - Whether the order of the Tribunal insofar as it issued directions which travel beyond the scope of the show cause notice is without and in excess of jurisdiction? - Principles of unjust enrichment - HELD THAT:- The question as to whether the issue of imposing a cap on the extent of the credit to which the appellant is not available and unjust enrichment, was never part of the Show Cause Notice and thus, the directions of the 1st Appellate Authority affirmed by the Tribunal raising the issue of extent of credit eligibility and also the impact of the doctrine of unjust enrichment is beyond the scope of the show cause notice. The Appellate Authority be it the Commissioner (Appeals) or the Tribunal is not empowered to issue directions which traverse beyond show cause notice. It seems that the order of the Tribunal affirming the order of the Commissioner (Appeals) is bad insofar as it affirms directions which traverse beyond show cause notice and hence it is set aside. Appeal allowed. 2022 (10) TMI 644 Levy of penalty u/s 112 (a) (b) (iii) and 114A of the Customs Act, 1962 - importing rough precious stones by making huge overvaluation - goods not imported by actual importers but the imports are being managed by someone else behind them - overvaluation of goods - HELD THAT:- The copy of IEC code is very much on record. The firm is otherwise registered for GST purpose as is apparent from the Certificate of Registration dated 27.07.2017. The Deed of Admission cum Retirement dated 12.1.2018/ Addendum to LLP agreement dated 10.2.2017 is perused. The perusal thereof reveals that it is a document between new partners and retiring partners of M/s.Rishipushp Trading LLP. The retiring partners of M/s.Rishipushp Trading LLP namely, Shri Pukhraj R Padiyar and Shri Rajendra Byawat have agreed for them to be substituted with new partners namely, Shri Hemant Kumr Bhmbi and Shri Dinesh Kumar Meghwanshi with the clear understanding that the importer LLP between the partner will continuing with effect from 10.2.2017 on same terms and conditions as are consistent in the deed of LLP. The penalty upon the appellant has been confirmed on the sole ground that the importer on record i.e. M/s.Rishipushp Trading LLP is not the actual importer. The actual importer is presumed to be Shri Pukhraj Ramdevji Padiyar and since Shri Pukhraj Ramdevji Padiyar is not IEC code holder and since this fact was known to the appellant, he deliberately ignored the same, thereby committing violation of his obligation as Customs Broker - The firm is holder of valid IEC. There is no dispute about their valid KYC documents. There is nothing on record that Shri Pukhraj R Padiyar was the actual importer. Thus, it is clear that the appellant has deliberately and intentionally has not provided any such information which was false or incorrect. As such, in my opinion that penalty under section 114AA of the Customs Act, 1962 has wrongly been imposed upon him. Penalty u/s 112 of Customs Act - HELD THAT:- The penalty is the consequence to a wrong declaration of the value of the goods in the Bill of Entry. Since there is no denial that Bill of Entry were filed by the appellant, under his obligation it was mandatory for him to have the documents showing the value of imported consignment. Nowhere appellant has stated about the said document and the valuation thereof nor any such document in the form of invoice has been produced on record which would have been verified by the appellant at the time of processing of the impugned consignment. Accordingly, the penalty under section 112 of Customs Act has rightly been imposed. The penalty under section 114A of the Customs Act, 1962 is hereby set aside. However, penalty under section 112 (a) (b) (iii) is hereby confirmed - Appeal allowed in part. Corporate Laws 2022 (10) TMI 643 Disqualification of Director under section 164(2) of the Companies Act, 2013 - HELD THAT:- From the perusal of the Act of 2013 and Rules of 2014, it appears that Section 152 of the Act of 2013 deals in respect of Appointment of Director whereas Section 153 is in respect of Application for allotment of DIN and Section 154 is in respect of Allotment of DIN. It is pertinent to mention here that as per Section 152(3), allotment of DIN under Section 154 ( or any other number as may be prescribed under Section 153) is a prerequisite for appointment as director of a company. From perusal of said rule, it appears that cancellation or deactivation of DIN can be done at the instance of any person while moving an application along with fee as specified in the Rules of 2014 and that too after affording of opportunity of hearing (if cancellation or deactivation of DIN is made pursuant to clause (b) of sub-rule 1 of rule 11) - Here, prima facie no application has been moved by any person to reach to a conclusion regarding cancellation or deactivation of DIN at the hands of Registrar. In Rules, incorporation of requirement of moving application is obvious, because allotment of DIN number is prerequisite for appointment of directors, therefore, moving application by person assumes more significance because it is identity which is carried by the director over his shoulder during his stint as director of the company, therefore, such important identification cannot be sacrificed suo motu or at the instance of any misrepresentation. It needs verification of e-record and affording opportunity of hearing in some contingencies especially when the matter pertains to obtaining DIN in a Wrongful Manner or by Fraudulent Means. So far as application of Sections 164 and 167 of the Act of 2013 is concerned from the Act of 2013 itself it appears that Section 164 of the Act of 2013 was made applicable from 1st May, 2014 whereas Section 167 of the Act of 2013 was made applicable w.e.f. 7th May, 2018 and it is settled in lay that unless statute is made applicable retrospectively, its application would be prospective in nature. In some of the cases, alleged default appears to be of 2015-16 and 2016-17, therefore, three consecutive years have not been lapsed so as to attract the liability or rigours of Section 164(2) of the Act of 2013. Different High Courts have taken same stand that DIN cannot be cancelled or deactivated resorting to Section 164 or 167 of the Act of 2013 and for the reasons assigned into their orders - looking to the legal position and the judgments passed by different High Courts from time to time, this Court intends to allow the writ petitions preferred by petitioners and set aside the impugned orders passed by Registrar of Companies against the petitioners whereby DIN has been cancelled/deactivated - Petition allowed. 2022 (10) TMI 642 Seeking restoration of its name in the Register of Companies (RoC), Vijayawada for the State of Andhra Pradesh - Section 252(1) of the Companies Act, 2013 - HELD THAT:- The material available on record indicates that the failure of the Company to furnish the statutory returns with the RoC was not intentional. Apparently the Company has been carrying on its operations as the financial statements would indicate. Unless the Company s name is restored, it will prejudicially affect its prospects and adversely influence the Directors in their future endeavours. The Shareholders of the Company as well as the Applicant are keen to carry on and perform the objects of the Company in right earnest. There have been substantial investments in the project. The Company is continuing its business. Unless the name of the Company is restored in the Register of Companies, it would suffer financially and may go out of business. The directors of the company would also face disqualification. The name of the Company should be restored in the Register of Companies - Application allowed. Securities / SEBI 2022 (10) TMI 641 Power of SEBI to initiate action against the company or its directors who have defaulted in payment of dividend - non payment of dividends - Whether the complaint filed by the respondent is barred by limitation as specified under Section 468(2) of Cr.P.C.? - HELD THAT:- A reading of the unamended Section specifies that the company and its directors are said to have committed an offence if the dividends are not paid within 42 days from the date of declaration. There is no provision that the company or its directors shall also be liable to pay a fine of Rs.1000 everyday during which such default continues. Hence, the offence committed under the unamended section was not a continuing offence. The decisions relied upon by the learned counsel for petitioners were rendered with reference to unamendend section and the same are not applicable to the present case since the offence alleged to have been committed by the Petitioners is under the amended section which is a continuing offence. Hence, the complaint is not barred by limitation as specified under Section 468(2) of Cr.P.C. Whether the respondent has locus-standi to maintain the complaint when the dividends were already paid to the shareholders as on the date of filing the complaint? - A combined reading of Section 55(A) and Section 207 clearly indicates that the SEBI is vested with power to safeguard the interests of the shareholders in the matter of non payment of dividends and the moment the dividends are paid, the SEBI has no power to initiate any action against the company or its directors who have defaulted in payment of dividend within 30 days as specified under Section 207 of the Act. Section 621 clearly specifies that the shareholder/registrar of companies/person authorized by a central government can only maintain a complaint for the offence punishable u/s 207 even though the dividends are paid, since criminality does not get absolved on payment of dividends after the stipulated time. Hence, Point No.2 is answered affirmatively in favor of the Petitioners. For the foregoing discussions, the respondent had no locus standi to file the complaint and the cognizance taken on the said complaint stands vitiated. Insolvency & Bankruptcy 2022 (10) TMI 640 Rejection of application for grant of Certificate of Registration as an Insolvency Professional (IP) under Regulation 7 of the Insolvency Bankruptcy Board of India (Insolvency Professional) Regulations, 2016 - rejetection of application by Whole Time Member of Insolvency Bankruptcy Board of India on the ground that the petitioner is self-employed and is running a Consultancy and Valuation business and does not have the managerial experience as a salaried employee. HELD THAT:- When the petitioner has already passed the Insolvency Professional Examination of IBBI and has already undergone 50 (fifty) hours Pre - registration Education Course as mandated by the IBBI under the Regulations, 2016, and claims to have managerial experience, this Court is of the considered opinion, that application needs to be decided afresh, if the petitioner also submits other documents on record to demonstrate that he was actually managing a team which also requires management expertise as provided under Regulation 5(3)(c)(iii)(b) or (c) and also possesses educational qualification as per the said Regulation. The impugned order dated 18.11.2021 (Annexure P/1) passed by respondent No.2 is hereby quashed and the matter is remanded back to the respondent Whole Time Member of Insolvency Bankruptcy Board of India with a liberty to the petitioner to file additional documents within two weeks time as observed by this court, to demonstrate his eligibility to claim the IP certificate, and the concerned respondent is also directed to take decision on the petitioner s application afresh - Petition disposed off. 2022 (10) TMI 639 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - who are Financial Creditors? - it is alleged that the Applicants are not the Financial Creditors to the Respondent - HELD THAT:- Admittedly, the MOU was executed between the Developer M/s. ABW Infrastructure Limited and the Applicants. We find that the Respondent herein was neither a party nor anyway connected to the said MOU, annexed as Annexure A-5, Annexure A-6 and Annexure A-7 to the Application. Further, the Applicants have failed to place or produce any document on record to substantiate that the money in question was paid to Respondent herein. Hon ble NCLAT in AGARWAL AGENCIES PVT. LTD. ORS. VERSUS DOVE INFRASTRUCTURE PVT. LTD. [ 2022 (10) TMI 573 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] has held that M/s. Dove Infrastructure Private Limited is to set up IT Park does not make the disbursement made by Appellant to M/s. ABW Infrastructure Ltd. as a Financial Debt against the Corporate Debtor. The disbursement against time value of money is against M/s. ABW Infrastructure Ltd. and not against the Corporate Debtor. The aforesaid ruling of the Hon ble NCLAT is squarely applicable on the facts of the present case - the Applicants are not the Financial Creditors to the Respondent and therefore, have failed to make out a prima-facie case for maintainability of the application file under Section 7 of IBC, 2016/issuance of notice - Application dismissed. 2022 (10) TMI 638 Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - defective material - credit note was given for the defective material or not? - HELD THAT:- On the Counsel for the Operational Creditor pointing out the credit note and copy of the GSTR-1 the Counsel for the Corporate Debtor infact took time to get instructions with regard to discharging the claim amount. Since, none appeared for the Corporate Debtor and did not raise any objection with regard to the argument made by the Operational Creditor, it has to be considered that the Corporate Debtor does not have anything to say against the contentions of the Counsel for the Operational Creditor. This Company Petition needs to be admitted - Petition admitted - moratorium declared. 2022 (10) TMI 637 Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Pre-mature application - HELD THAT:- It is observed that the present application is premature because as per the agreement dated 31.12.2014, the tenure of the loan is for a period of ten years starting from 31.03.2015 to 31.03.2025, which has not met the maturity till date. Also, it is further observed that there is no agreement between the parties regarding interest payment became due. Therefore, there is no Default of the loan agreement dated 31.12.2014. It is further observed that the Resolution Professional of the Financial Creditor has only furnished the proof of Record of Financial Information from National E-Governance Services Limited but not the Status of Authentication which implies the debt and its default not yet reflected on National E-Governance Services Limited. Petition dismissed. 2022 (10) TMI 636 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - proper service of Form-3 notice on Corporate Debtor or not - HELD THAT:- In the first instance the Corporate Debtor was set ex-parte and an application was moved by the Corporate Debtor for setting aside the ex-parte order and the same was allowed by virtue of the order dated 14.03.2022. Observing that the notice was booked on 17.07.2021 and not on 16.07.2021 and was delivered on 27.07.2021 but not on 20.07.2021 as mentioned in the counter and the notice sent by the Tribunal on 22.11.2021 is after the Applicant has shifted his office to Vijayawada and Form No. INC 22 shows that the office was shifted to Vijayawada on 03.08.2021 itself this Tribunal allowed the application filed seeking to set aside the ex-parte order - Even according to the Counsel for the Corporate Debtor the office was shifted to Vijayawada on 03.08.2021 and the notice was delivered before 03.08.2021 which may be either on 27.07.2021 or 20.07.2021. The track record clearly shows that the item is delivered. Hence, when the office was functioning at Vishakhapatnam by 20.07.2021 and 27.07.2021 it has to be assumed that the notice was delivered. Due to the said fact not being brought to the notice of the Court during the hearing of the Interlocutory Application filed seeking to set aside the ex-parte order, the Tribunal relied on the dates mentioned in the application and observed as such. But considering the track record, it has to be held that the notice was duly served on the Corporate Debtor - this point is answered by holding that Form-3 notice was duly served on the Corporate Debtor. However the same might have lost sight of the concerned due to the work of shifting the office having been going on. Whether the Operational Creditor could prove the debt and whether the same is acknowledged by the Corporate Debtor? - HELD THAT:- Since the burden of proving the debt is on the OC, he fails due to non filing of any supporting documents to the invoices. Failure to reply to the demand notice, has an assumed reason. Moreover mere failure to reply, does not entitle the OC for the prayed reliefs - The admitted liability is Rs. 18 Lakhs and odd. The argument of the Counsel for the Corporate Debtor with regard to the said debt due is that it is below the threshold limit of Rs. 1 Crore and hence, an application under IBC is not maintainable even if it is considered that the said amount is due and is defaulted. The said argument is cogent since, the threshold limit of Rs. 1 Lakh is done away with by virtue of the Notification No. 1205(E), dated 24-3-2020. Petition dismissed. PMLA 2022 (10) TMI 635 Territorial jurisdiction to entertain the writ petition under Article 226 (2) of the Constitution of India - Criminal conspiracy - defrauding and cheating the Consortium of Banks led by the Central Bank of India - in furtherance of the criminal conspiracy induced the Central Bank of India, Corporate Finance Branch, Chennai by submitting fraudulent Letter of Credit documents without any physical movement of goods and unlawfully availed credit facilities for which they were not eligible. Whether this court is having territorial jurisdiction to entertain the writ petition under Article 226 (2) of the Constitution of India? - HELD THAT:- The High Court of Madras in A. John Kennedy and Ors. v. Joint Director, Directorate of Enforcement, Cochin Zonal Office [ 2020 (12) TMI 1351 - MADRAS HIGH COURT] extracting the judgment of the Hon ble Apex Court in KUSUM INGOTS ALLOYS LTD. VERSUS UNION OF INDIA [ 2004 (4) TMI 342 - SUPREME COURT] observed that, even if a small part of cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be a determinative factor to decide the matter on merit. All these cases would show how the legal position under Article 226(2) is evolving, how the concept of cause of action is incorporated in Article 226, the history behind it and though initially it is stated that even if a small fraction of the cause of action arises within the jurisdiction of the Court, that Court would have territorial jurisdiction to entertain the suit/petition to the extent that the petition is not maintainable before the Court where a small part of cause of action had arisen and the major part of cause of action shall be considered for applicability of territorial jurisdiction of the Court and had taken a full circle in observing that the concept of part of cause of action is irrelevant and had no application in criminal proceedings and only that High Court could entertain a prayer for quashing which has the supervisory jurisdiction over the jurisdictional court which is monitoring the investigation as per Cr.P.C. The issue whether a writ petition under Article 226 is maintainable against a Criminal Court situated outside the territorial jurisdiction of the Court as well as whether the Court could judicially review the action of the Magistrate in taking cognizance of the offence located outside the territorial jurisdiction of the court is considered by the High Court of Kerala in Augustine Babu P.M. Vs. Mohd. Samiur Rahman Ansari and Ors. [ 2017 (8) TMI 1680 - KERALA HIGH COURT] . It held that There cannot be any dispute that the complaint before the Coimbatore court and taking cognizance of the same by the said court cannot be challenged under S.482 of the Cr.P.C or under Art.227 of the Constitution of India, before this Court. The only contention raised is that a Writ Petition under Article 226 will lie, in view of clause (2) thereof, as part of the cause of action in the transaction regarding issuance of the cheque, its dishonour etc., arose in Kerala. Thus, even though a part of cause of action arises in this State, as the investigation was culminated in filing the charge sheet and the case is also taken cognizance by a competent court situated outside the territorial limits of this State, this Court cannot exercise its jurisdiction to entertain the writ petition under Article 226(2) of the Constitution of India. Whether taking cognizance of the offence under PMLA by the Principle Session Judge, Chennai in CC 1 of 2021 against the petitioner is in accordance with law? - HELD THAT:- Since the question of territorial jurisdiction is answered against the petitioner, it is considered not appropriate to deal with the merits of the matter to answer this question. The writ petition is dismissed. 2022 (10) TMI 634 Money Laundering - proceeds of crime - seeking enlargement on Bail - fudging its debtors list with inflated receivables from non-existing entities or related parties or companies floated by its own employees to avail loan facility fraudulently - diversion of funds without actual trade/sales - HELD THAT:- As on the date of expiry of 90th day, no report under Section 173 Cr.P.C. was on record with the Magistrate. On expiry of 90 days, the accused filed an application for bail invoking Section 167(2) Cr.P.C. The Judicial Magistrate rejected to extend the benefit under Section 167(2) Cr.P.C. Article 21 of the Constitution of India says that no person shall be deprived of his life or personal liberty except according to procedure established by law. Referring this provision, it is time and again enunciated by the Hon ble Apex Court in series of decisions that it is the heart of the Constitution of India and that it is one of the prominent provisions which safeguards the life and personal liberty of the citizens of the country. One may not dispute the fact that the indefeasible right to default bail under Section 167(2) Cr.P.C. is an integral part of right to personal liberty under Article 21 of the Constitution of India. It is clear that in a case, which relates to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than ten years, the investigation is required to be completed within 90 days, and in all other offences within 60 days. It is specifically mentioned that on expiry of the said period i.e., 90 days or 60 days as the case may be, the accused shall be released on bail - There is no provision in the entire Code of Criminal Procedure authorizing any of the Courts to extend such period. The above provisions in the Code of Criminal Procedure are aimed at ensuring expeditious investigation, fair trial and more so, to safeguard the life and personal liberty of the citizens against whom accusation is made. This Court is of the view that the investigating agency has not completed its investigation within the statutory period i.e., within 60 days as required under Section 167(2) Cr.P.C. Filing of some set of papers by giving a title charge sheet does not mean that the same is filed as a final report on completion of investigation. The mandate of law is that on completion of investigation, the final report/charge sheet has to be filed within the statutory period in the format as laid down under Section 173 Cr.P.C. - it is clearly brought on record that only to get over the obligation of filing of the charge sheet within the statutory period so that the accused would not raise plea of grant of statutory bail under Section 167(2) Cr.P.C., it appears that the respondent has filed a formal charge sheet without any material. The order that is rendered by the Court of Metropolitan Sessions Judge-cum-Special Court under the Prevention of Money Laundering Act, Hyderabad is hereby set aside - Petition allowed. 2022 (10) TMI 633 Validity of proceeding pursuant to Annexures-2, 3 8 (series) - seeking de-freezing the Bank account - HELD THAT:- From the nature of proceeding undertaken pursuant to Annexure-8 page 69 of the brief, this Court finds, this document is in shape of attachment of property of the Petitioners upon prima facie opinion of existence of offence under the provisions of the Act, 2002 and Annexures-2 3 are all consequential outcomes pursuant to development through Annexure-8. As appears from Annexure-8 the proceeding is still in U/s.17(A) of the Act, 2002 stage and prayer so far it relates to take-out the proceeding U/s.17(A) of the Act, 2002 and the consequential freezing order of attachment to Annexure-8, for not passing of time fixed through the provision at Section 5 and 8 as well, cannot be considered at this stage of the matter. Surprisingly the Petitioners even not filed their objection to the notice vide Annexure-8. For leaving no scope for considering the validity of the notice vide Annexure-8 for its prematureness, this Court dealing with the ultimate prayer of the Petitioners for de-freezing the amount involving the notice under Annexures-2(series) 3, since finds, the development through Annexures-2(series) 3 since not arising out of the subject involving Section 17(1-A) of the Act, 2002, the notice at Annexure-8 (series) cannot be considered in the present proceeding. Petition disposed off. Service Tax 2022 (10) TMI 632 Levy of Service Tax - premium in terms of the insurance policy covering the future period at revised rates - chargeability to service tax if the rates are revised by law during the operation of policy already issued and service tax liability is discharged - HELD THAT:- Considering the fact that the entire premium was paid prior to 10.09.2004 i.e. before the change in the rate of tax, has rightly observed and held that the assessee is not liable to pay the enhanced rate of tax. Appeal dismissed. 2022 (10) TMI 631 Non-grant of option to pay the amount determined by respondent No.2-Designated Committee formed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 through online facility - HELD THAT:- It is not in dispute that the petitioner was required to make the payment of Rs. 38,64,256/- as determined in Form SVLDRS-3 and the petitioner tried to make the payment through NEFT on 30.06.2020, however, the same was not accepted by the receiving bank and the payment was returned to the petitioner which is apparent from the bank statement produced on record. It also appears from the record that the petitioner could not generate the challan successfully for making the payment and after the advice of its Chartered Accountant, tried making payment through NEFT/RTGS out of abundance caution and to demonstrate the bona fide of the petitioner to make the payment as determined under the Scheme by respondent No.2 Designated Committee - the petitioner made bona fide attempt to make the payment as determined under the Scheme and is also prepared to pay the amount in question in accordance with the Scheme along with interest for the period for which the petitioner was not permitted to make payment by respondent authorities considering extreme Pandemic condition of Covid-19, it is opined that this is a fit case for invocation of the powers under Article 226 of the Constitution of India. The respondent authorities are directed to accept the payment of Rs. 38,64,256/- as specified in SVLDRS-3 dated 16.03.2020 along with interest @ 9% per annum from 30.06.2020 till the date of payment and grant the benefit of the Scheme to the petitioner - Petition allowed. 2022 (10) TMI 630 Condonation of delay in filing appeal - sufficient reason for delay provided or not - section 5 of Limitation Act - Appropriate forum - Section 35 L of the Act of 1944 - HELD THAT:- The appellant has not properly explained the delay in filing this Central Excise Appeal. The appellate Tribunal dismissed the appeal on 11.09.2015. The appellant received the certified copy on 04.01.2016 and filed a review petition which came to be dismissed on 14.02.2017. Thereafter, a writ petition was filed which was dismissed as withdrawn on 04.09.2017 with the liberty to file Central Excise Appeal. The appellant withdrew the appeal knowingly that the remedy of appeal is available despite that a review petition was filed before this High Court. Thereafter without withdrawing the Review Petition this Appeal has been filed on 12.02.2019,i.e, after the lapse of one and half years. Whereas the limitation of filing this appeal is 180 days. Even if the limitation of 180 days is calculated from the date of withdrawal of the writ petition 04.09.2017, even then this appeal is hopelessly time barred. The appeal suffers from delay and latches hence, a delay of 545 days is not liable to be condoned. Even otherwise the appellant is challenging the taxability of the services rendered by him and not the amount of tax or value of the goods, therefore, Shri Prasad, learned counsel for the respondents has rightly objected to the maintainability of this appeal filed under Section 35 G of the Central Excise Act 1944. In view of Section 35 L of the Act of 1944, the appeal lies before the Apex Court. Appeal dismissed. 2022 (10) TMI 629 Reimbursement of amount of Service Tax - maintenance of street lights - if petitioners were required to pay service tax, then whether the same, if at all, could be recovered from respondent no.1 i.e., Municipal Corporation of Delhi (MCD) or not? - HELD THAT:- It is quite evident that as far as the Service Tax Department is concerned, during the relevant period, the service provided by the petitioners was not exempted from service tax - service tax was leviable on maintenance of street lights, contrary to the stand taken by respondent no.1/MCD. The petitioners have paid service tax, during the relevant period. The logical sequitur would be that the petitioners would have to be reimbursed the service tax that they have paid, since the recipient would have to bear the ultimate burden of the payments in that behalf. During the relevant period, there was no exemption operating qua the payment of service tax on the maintenance of street lights - Petition disposed off. 2022 (10) TMI 628 Levy of penalty u/s 76, 77 and 78 of FA - non-payment of Service Tax on the balance transport charges - taxable service or not - HELD THAT:- Appellant has all along taken the view that the service is not taxable service as it was not provided by the goods transport agency, but by goods transport operator and/or individual truck owners namely an individual either owning or operating. This plea has been taken in all the proceedings at the initial stage as well as at the appellate stage and also before the Tribunal. Therefore the Appellant s submission that the service received from the goods transport operators/individual truck owners is acceptable - the decision of the Tribunal in the case of CCE C, GUNTUR VERSUS KANAKA DURGA AGRO OIL PRODUCTS PVT. LTD. ANR. [ 2009 (3) TMI 130 - CESTAT, BANGALORE ] holding that there is no liability on the recipient of service in the case of transportation by the individual truck owners and/or individual truck operators and not by goods transport agency to pay Service Tax is squarely attracted. The demand in respect of the other three suppliers are set aside - appeal allowed - decided in favor of appellant. Indian Laws 2022 (10) TMI 627 Time limitation for initiation of suit - land dispute - issue of limitation can be determined as a preliminary issue Under Order XIV, Rule 2(2) of the Code of Civil Procedure or not - Whether a larger period of limitation of 12 years would be available to the Plaintiffs to bring in a suit by virtue of application of Article 136 of the Limitation Act, 1968, as contended by the Appellant and in the facts and circumstances obtained in this case? - Whether Article 17 or Article 65 of the Act got any application, as contended by the Appellants, in view of the plaint averments, in case Article 136 of the Act is found inapplicable? HELD THAT:- A perusal of Article 136 of the Limitation Act would reveal the indubitable position that it applies only when an application for execution of any decree (other than a decree granting a mandatory injunction) or order of any Civil Court is to be filed - In the instant such a stage for application of Article 136 of the Limitation Act had not reached and, in troth, the question involved is relatable only to the time restriction for initiating legal proceedings to seek the alleged legal right. In the said circumstances, the inevitable conclusion can only be that Article 136 got no application in the case on hand and as such the Appellants could not claim for a larger period of limitation of 12 years. The findings of the Trial Court with respect to preliminary issue of limitation are based on the relevant dates revealed from the pleadings of the Plaintiffs in the plaint itself. True that in the plaint it is repeatedly alleged that the relinquishment deed was obtained fraudulently by the 5th Respondent. However, conspicuously its date was not mentioned - it is very much clear from the plaint averments that the Relinquishment Deed is anterior to the date of letter of intimation to the 5th Respondent (08.03.1991) and obviously, the date of objection against the same was firstly preferred by deceased Nahar Singh viz., 05.04.1991. Evidently, the aforesaid two dates specifically mentioned in the plaint were taken into account by the Trial Court as also by the First Appellate Court and the High Court in the matter of consideration of the question whether the suit was barred by limitation. In the absence of any successful challenge against the validity of the said Relinquishment Deed by making proper prayer in an appropriate proceedings, and that too within the prescribed period of limitation, the conclusion and finding of the First Appellate Court, cannot be said to be perverse or illegal as there can be no doubt with respect to the position that consideration of validity of a relinquishment deed and consideration of the period of limitation with reference to the same are different and distinct. In the case on hand in view of the nature of the finding on the preliminary issue and the consequential consideration of the suit in terms of Order XIV Rule 2(2)(b) and taking note of the fact that the suit do not survive after such consideration, there are no reason to consider the contention of the Appellants with reference to Order VII Rule 11. Thus, there is absolutely no perversity or illegality in the concurrent findings of the courts below warranting interference in invocation of the power Under Article 136 of the Constitution of India - appeal dismissed. 2022 (10) TMI 626 Seeking restraint on Defendant their agents, servants, employees, workers, friends, assigns, nominees - forcible and illegal demolishing the porch constructed in the property of the Plaintiff, being marked Red in color in the site plan annexed along with the plaint - HELD THAT:- The question as to whether the sellers are required to be produced in such a case, would not be a substantial question of law, as the Plaintiff has chosen to lead evidence in the manner it best thought. The production of these two witnesses or otherwise did not have a bearing on the Trial Court s judgment because in any case, the Trial Court has analysed the sale deed and evidence in detail and has come to the conclusion that the Plaintiff could not prove his case. In the opinion of this Court, the Appellate Court also having upheld this very finding, no substantial question of law arises in this matter and there is no ground for warranting interference against the concurrent findings of the Trial Court. It is settled law that in a second appeal, the scope of interference is quite narrow - this Court is of the opinion that no interference with the concurrent findings of the lower courts, is warranted, in the present second appeal. Appeal dismissed.
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Newsletter: Where Service Meets Reader Approval.

TMI Tax Updates - e-Newsletter October 19, 2022

Articles

1. TAX AUDIT REPORT (TAR) - specified date need to be changed.

News

1. Ms Bharati Das takes charge as new Controller General of Accounts (CGA)

2. Cabinet approves Minimum Support Prices for all Rabi Crops for Marketing Season 2023-24

3. Central Record Keeping Agencies (CRAs) of PFRDA have become Digi Locker Partner Organizations to provide Subscriber Centric online Services

Notifications

1. S.O. 397 - dated 22-8-2022 - Jammu & Kashmir SGST

2. S.O. 396 - dated 22-8-2022 - Jammu & Kashmir SGST

Circulars / Instructions / Orders

1. CCT/26-4/2022-23/F/1946 - dated 30-9-2022

Highlights / Catch Notes

GST

Promissory Estoppel Cannot Override Statutory Provisions; Government Not Bound by Past Representations per CGST Act Section 174(2)(c).

Court Permits Filing of Outstanding Returns Post-Cancellation u/s 29(2)(c) of CGST Act, 2017; Taxes and Interest Due.

Court Allows Appeal Against GST Registration Cancellation; 10-Day Deadline Set for Filing with Competent Authority.

Court Allows Release of Detained Goods as Tax Paid and Bank Guarantee Provided, Leaves Rule 138 Interpretation Pending.

Department Orders Invalid: No Show Cause Notice or Hearing Opportunity Given, Lacking Required Explanation Per Act Provisions.

Income Tax

Doctors' Income from Hospitals Classified as Professional, Not Salary; No Employer-Employee Relationship Found.

Court Rules Maintenance Charges from Let-Out Property as "Income from Other Sources" if Linked to Provided Services.

CBEC's Customs Duty Valuation Doesn't Imply Assessee Understated Import Value; Not Considered Undisclosed Income.

Petitioner Seeks Interest Refund on Seized Amount; Authorities to Review u/ss 132B(4)(b) & 244A of Income Tax Act.

Section 50C Inapplicable: Sale of Undetermined Beneficial Rights in Land Not Subject to Stamp Duty Value Substitution.

Taxability of Management Fees in India Under Singapore DTAA Hinges on Skill Transfer, Not Just Capability Enhancement.

Noida Property Valuation Must Use Uttar Pradesh PWD Rates for Fair Market Value, Says Directive to Assessing Officer.

SAP Implementation Income in Pune Not Taxable as Royalty or Fee for Technical Services Under India-Singapore DTAA Article 12.

Revision u/s 263 Upheld: AO Failed to Investigate Share Premium Details, Lacked Proper Inquiry.

Share Transactions Deemed Bogus u/s 153A; No New Material Means No Additional Assessment u/s 68.

Customs

High Court Invalidates Tribunal's Order for Exceeding Show Cause Notice Scope; Limits Appellate Authority's Jurisdiction.

Penalties Imposed for Overvalued Rough Precious Stones; Section 114AA Penalty on Appellant Overturned Due to Lack of Intent.

Corporate Law

High Courts Rule: Director Identification Number Cannot Be Cancelled u/ss 164 or 167 of Companies Act 2013.

Indian Laws

Court Rules 12-Year Limitation Under Article 136 Applies in Land Dispute; Validity of Deed Must Be Challenged in Time.

IBC

Court Orders Reconsideration of Insolvency Professional Registration Application; Qualifications and Experience to be Reassessed.

PMLA

Court Lacks Jurisdiction Under Article 226(2) for Writ Petition as Case Taken by Court Outside State Limits.

SEBI

SEBI Can Take Action Against Companies for Dividend Payment Defaults; Only Specific Parties Can File Complaints Under Sec 621.

Service Tax

High Court invokes Article 226 to allow petitioner payment under Sabka Vishwas Scheme after online payment denial.

Court Rules Service Tax for Street Light Maintenance Must Be Reimbursed to Petitioners; Recipient Bears Cost.

Appeal Filed 1.5 Years Late is Time-Barred; 180-Day Filing Period Exceeded After Withdrawal of Writ Petition.

Case Laws:

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Income Tax

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TMI Tax Updates - e-Newsletter
October 19, 2022