Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 6, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Seizure of goods alongwith vehicle - release of goods - In the case at hand, there is no dispute that the parties are genuine, nor is there any dispute that the original E-way bill contained an error. However, where the error is rectified and a corrected E-way bill is produced, it would be appropriate for the Revenue authorities to act sensibly in the manner and proceed. - HC
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Rejection of refund of the tax paid for the second time and penalty - As there was discrepancy in the document from where the goods were dispatched, the authorities intercepted and confiscated the same. The petitioner was directed to pay the tax as well as penalty - Thereafter it appears that a fresh e-Way Bill was generated immediately after interception. The description of the goods in the second e-Way Bill remains the same. It is only that the place of dispatch was rectified. The petitioner had to pay tax for the second time and penalty for not carrying the proper Way Bill at the very first instance. - Refund allowed - HC
Income Tax
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Correct head of income - gain on sale and purchase of shares - normal business profit or short term capital gain - The learned tribunal had failed to note that the assessee had maintained a separate account for investment, which fact was very material to consider the nature of transactions effected by the assessee during the relevant period. - HC
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Validity of reopening of assessment u/s 147 - notice issued u/s 148A - this Court holds entertainment of the writ petition at the stage of notice would be premature. Doing so would frustrate the tax administration and adjudication process. This Court is alive to the fact that the statute under consideration, viz., the IT Act and rules framed thereunder, provides sufficient safeguard for the assessee-petitioner, more so, when against the final orders of adjudication, appeal lies. - HC
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Penalty u/s. 271D - unsecured loans in the form of cash - the amount paid by the Directors / Shareholder towards share capital and unsecured loans in the form of cash does not attract the provisions of section 269SS of the Act and penalty U/s. 271D cannot be levied on the same - AT
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Taxability of entertainment tax subsidy received by the assessee - Nature of receipts - Entertainment tax subsidy granted by the State Government is not for the purpose of utilizing on any particular or specified assets. That being the factual position emerging on record, the reasoning of the assessing officer that such subsidy would go to reduce the cost of assets is unacceptable. - AT
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Levy of tax on donations - Provisions of Section 115BBC were enacted to tax such donations in hands of certain charitable trust and institutions at the rate of 30%. However, sub-section 2 (b) of the Act excludes the trust established woolly for religious and charitable purpose from rigors of that Section. - AT
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Deduction u/s 10AA - Disallowance for the reason that the assessee had filed return of income belatedly and not within the time limit prescribed u/s 139(1) - When the Legislature has omitted such a restriction in section 10AA in its wisdom, it is not for the A.O. nor the CIT(A) to prescribe such a conditionality and impose it on an assessee. - AT
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Short-deduction of TDS - the approach of assessee is in accordance with the provisions of TDS as prescribed in Income-tax Act, 1961, which permit the consideration of deductions under Chapter-VIA while computing deductible amount of TDS - AT
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Exemption u/s 10(6)(ii) - remuneration received by her from Austrian Trade Commission, Austrian Embassy under full time employment - the certificate issued by the Austrian Embassy cannot be doubted or disregarded in view of said provision and other surrounding facts and circumstances and duties assigned to the assessee by the Austrian Embassy are also mentioned in her passport by the Government of Austria. - AT
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Income accrued in India - Centralized services fee received - royalty or fee for technical services The payments received were rightly held by the Tribunal, to be in the nature of business income. And since the assessee admittedly does not have a permanent establishment under the article 7 of the D TAA 'business income' received by the assessee cannot be brought to tax in India. - AT
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Relief u/s 90 - foreign tax credit - disallowance of FTC in case of delay in filing Form No. 67 - the assessee is eligible for foreign tax credit, as she has filed form number 67 before completion of the assessment, though not in accordance with rule 128 (9) of The Income Tax Rules, which provided that such form shall be filed on or before the due date of filing of the return of income. - AT
IBC
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Suspension of registration of the Resolution Professional (RP) - territorial jurisdiction to entertain the Writ Petition - Pursuant to the order of suspension, the Petitioner would not be in a position to work as a Resolution Professional with the assignments on hand in the State of Maharashtra - it cannot be said that only a small part of cause of action as arisen within the territorial jurisdiction of this court, the part of cause of action has arisen within the territorial jurisdiction of this court. - WP admitted - HC
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Approval of Resolution Plan - Whether the CoC and Adjudicating Authority discriminated the Operational Creditors from Financial Creditor - once the plan was approved by CoC in its commercial wisdom, the Adjudicating Authority cannot interfere with such decision taken by the CoC, unless the plan is contrary to any of the provisions of IBC or any other law. It is not the case of the Appellant that in approved is against any of the provisions of the IBC or and any other, but, pleaded only discrimination. - AT
Central Excise
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Levy of penalty - Applicability of ration of decision made in the case of co-noticee - in absence of the appeal by revenue against this order the order has acquired finality and Commissioner cannot have passed any order beyond the order passed by his predecessor. In view of this fact, the Commissioner order imposing penalty on Shri JS cannot be sustained and the penalty imposed on Shri SS cannot be in excess of the penalty imposed by this order. - AT
Case Laws:
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GST
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2022 (10) TMI 134
Constitutional Validity of circular dated 07.12.2017 - violation of fundamental rights of the Petitioner on account of the taxes being shared and borne by the Petitioner post the enactment of the Goods and Services Tax Act, 2017 - infringement of provisions of Goods and Services Tax Act, 2017 or not - restitution of benefits to the Petitioner along with interest and compensation within a stipulating period in terms of the order passed by the Hon ble High Court - HELD THAT:- The question whether, in fact, any amount is owed to the Petitioner by the Opposite Parties on account of GST deducted from its bills or vice versa, has become a highly disputed question of fact. The claim of the Petitioner ultimately, in simple terms, is one for money which it seeks as reimbursement from the Opposite Parties. It is not possible for this Court in its writ jurisdiction under Article 226 of the Constitution to calculate on a case to case basis which component of the work executed by the Petitioner for reimbursement on account of GST and which is not. This being a disputed question of fact, the Court declines to undertake this exercise in the writ jurisdiction and leaves it to the Petitioner to seek other appropriate remedies available to him in accordance with law. In such proceedings it would be open to either of the parties to rely on the pleadings of the present petition. In a case being SRI LALIT KUMAR MOHANTY VERSUS STATE OF ODISHA OTHERS [ 2022 (4) TMI 1453 - ORISSA HIGH COURT] the propriety of Revised Guidelines vide Office Memorandum dated 10th December, 2018 came up for consideration before this Court. This Court while disposing of the said writ petition declined to exercise writ jurisdiction. This Court finds no ground to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India - Petition dismissed.
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2022 (10) TMI 133
Seizure of goods alongwith vehicle - seizure on the ground of vehicle not having an appropriate E-way bill - HELD THAT:- While there appeared to be an apparent mistake in the original E-way bill under Annexure-1, i.e. the name of the seller and the buyer had been erroneously swapped and, therefore, the Revenue was justified in not allowing the vehicle to enter into the State and seized the same, yet we find that once the corrected E-way bill under Annexure-3 was produced before the respondents and the apparent error having been corrected, there is no justification in either initiating the present proceedings against the petitioner or in continuing with the seizure of the vehicle along with goods. In the case at hand, there is no dispute that the parties are genuine, nor is there any dispute that the original E-way bill contained an error. However, where the error is rectified and a corrected E-way bill is produced, it would be appropriate for the Revenue authorities to act sensibly in the manner and proceed. The authorities are directed to release the vehicle and the goods forthwith - petition disposed off.
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2022 (10) TMI 132
Issuance of notice under proviso to sub-section (1) of Section 50 of the CGST Act demanding interest on delayed payment of tax - initiation of recovery proceedings under Section 79 of CGST Act even without issuing a notice under Section 73 of the CGST Act - HELD THAT:- Stay is granted to the effect and operation of impugned notice. Accordingly, it is directed that the effect and operation of the impugned notice dated 25.03.2022 (Annexure P/1) shall remain stayed till the next date of hearing.
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2022 (10) TMI 131
Rejection of refund of the tax paid for the second time and penalty - address from where the timber was dispatched was inadvertently mentioned in the e-Way Bill - HELD THAT:- Due to an unintentional error at the time of generating the e-Way Bill, the address from where the goods were dispatched was wrongly mentioned and accordingly, the goods were rightly confiscated by the respondent authorities. It was not for the respondents to take a decision as to whether the petitioner was intentionally trying to evade tax or not. As there was discrepancy in the document from where the goods were dispatched, the authorities intercepted and confiscated the same. The petitioner was directed to pay the tax as well as penalty - Thereafter it appears that a fresh e-Way Bill was generated immediately after interception. The description of the goods in the second e-Way Bill remains the same. It is only that the place of dispatch was rectified. The petitioner had to pay tax for the second time and penalty for not carrying the proper Way Bill at the very first instance. From the conduct of the petitioner it does not appear that there was an intention to evade tax. The respondent authorities ought not to collect tax for second time in respect of the self-same goods that were transported by the petitioner. Law doesn t require payment of tax to be made more than once in respect of the self same goods. The petitioner is entitled to the refund as prayed for. The writ petition is disposed of.
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Income Tax
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2022 (10) TMI 130
Correct head of income - gain on sale and purchase of shares - normal business profit or short term capital gain - shares by way of investment were held for period varying from one day to more than 100 days - whether the tribunal was right in reversing the order passed by the CIT(A) holding that the gain made by the assessee on sell and purchase of shares was business profit and not short term capital gains? - HELD THAT:- As decided in M/S. GYAN TRADERS [ 2022 (10) TMI 47 - CALCUTTA HIGH COURT] transaction is not necessarily in the nature of trade because the purchase was made with the intention of resale. Further it was pointed out where the purchase of any article or of any capital investment, for instance shares is made without the intention to resell it at a profit, the resale under such changed circumstances would only be realization of capital and would not stamp the transaction with a business character. If the above legal principles are applied to the facts of the case on hand, the only irresistible conclusion is to approve the view of the CIT(A) who had considered all the relevant materials and details which were placed by the assessee. The learned tribunal had failed to note that the assessee had maintained a separate account for investment, which fact was very material to consider the nature of transactions effected by the assessee during the relevant period. Thus, for the above reasons, we are of the considered view that the learned tribunal erred in reversing the order passed by the CIT(A). - Decided in favour of assessee.
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2022 (10) TMI 129
Validity of reopening of assessment u/s 147 - notice issued u/s 148A - non- filing of ITR and escapement of income - As per assessee reason ascribed by the Assessing Officer is not only bereft of application of mind but also the same is outcome of blameworthy preconceived approach - as argued AO has failed to address the core issue as to whether there was requirement of furnishing return with reference to Section 139(4C)(e) for Assessment Years prior to 2016-17 - HELD THAT:- The petitioner has ample opportunity to agitate issues before the Assessing Officer. Therefore, this Court holds entertainment of the writ petition at the stage of notice would be premature. Doing so would frustrate the tax administration and adjudication process. This Court is alive to the fact that the statute under consideration, viz., the IT Act and rules framed thereunder, provides sufficient safeguard for the assessee-petitioner, more so, when against the final orders of adjudication, appeal lies. Since the petitioner-College has already filed return in Form ITR- 7 on 30.04.2022 mentioning therein that it has been filed under Section 139(4A) of the IT Act for the Assessment Year 2015-16 after receipt of notice dated 31.03.2022 under Section 148, the Assessing Officer is required to verify the books of account of the relevant year and examine any other evidence that may be allowed to be adduced by the petitioner-College with reference to the materials available in record. While doing so, he will confront adverse material, if any, he wishes to utilize against the assessee- petitioner and record statement with regard to such verification. Needless to say that the petitioner shall be allowed reasonable opportunity for stating its case, which shall be considered by the Assessing Officer in the order of assessment including the grounds of challenge against the Order dated 31.03.2022 passed under Section 148A(d). The petitioner for the purpose of assessment may participate in the proceeding initiated under Section 148 of the IT Act and no unnecessary adjournment shall be granted. The writ petition challenging the Notice issued under Section 148 and the Order dated 31.03.2022 passed under Section 148A(d) of the Income Tax Act, 1961 with reference to Notice dated 22.03.2022 issued under Section 148A(b) is hereby dismissed.
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2022 (10) TMI 128
Reopening of assessment u/s 147 - order passed under Section 148A(d) based on material available on record or not? - in response to the notice the petitioner-assessee has filed its revised return in Form ITR-6 - HELD THAT:- As in the instant case, the petitioner has not furnished objection to the notice issued under Section 148A of the IT Act. Therefore, this Court finds that no case is made out by the petitioner for interfering with the issue of notice under Section 148 by the Adjudicating Authority after taking decision to initiate proceeding on passing order under Section 148A(d) of said Act. Assessing Officer reached the conclusion reason to believe and approval was accorded by the learned Principal Commissioner of Income-tax for reopening of assessment thereby giving the assesse an opportunity to rebut and meet the points that the documents/materials based on which such a conclusion is reached is not in fact correct - In this respect it would be apt to say that the petitioner is required to participate in the assessment proceeding and produce materials and documents like books of account, vouchers, invoices, etc. maintained in terms of statutory requirement before the Assessing Authority so as to rule out manipulation. Since the petitioner has already filed revised return for the Assessment Year 2018-19 in compliance of the terms of notice under Section 148, the Assessing Officer is required to verify the books of account of the relevant year and examine any other evidence adduced by the petitioner with reference to the materials available in record. While doing so, he will confront the adverse material, if any, he wishes to utilize against the assessee-petitioner and record a preliminary statement with regard to such verification. He may also record statement whether the alleged transactions are incorporated in the regular books of account/statements on the basis of which returns have already been filed. After such verification, if he comes to the conclusion that the petitioner is liable to be levied with tax, he shall allow the petitioner to take copy of such materials which he wants to utilize against the petitioner. Needless to say that the petitioner shall be allowed reasonable opportunity for stating its case, which shall be considered by the Assessing Officer in the order of assessment. The petitioner for the purpose of assessment may participate in the proceeding initiated under Section 148 of the IT Act and no unnecessary adjournment shall be granted.
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2022 (10) TMI 127
Penalty u/s. 271D - amount paid by the Directors / Shareholder towards share capital and unsecured loans in the form of cash - HELD THAT:- We are of the considered view that the amount paid by the Directors / Shareholder towards share capital and unsecured loans in the form of cash does not attract the provisions of section 269SS of the Act and penalty U/s. 271D cannot be levied on the same. We therefore find no error in order of the Ld. CIT(A) and hence no interference is required in the order of the Ld. CIT(A) and dismiss the grounds raised by the Revenue. Nature of income - agricultural income or income from other sources - AO allowed a sum from sale of coconut and bananas but disallowed a sum from sale of Eucalyptus - HELD THAT:- As noted from the paper book that the assessee has been regularly admitting the agricultural income in the earlier assessment years. It was also not disputed by the Ld.AO in earlier years. It is also noted that the statement recorded U/s. 131 of the Act by M. Rama Rao does not have any evidentiary value and cannot be enforced upon. We also find from the paper book that the assessee has filed a letter from the Sarpanch of Vaddangi Gram Panchayat regarding the planting of Eucalyptus trees in the assessee s lands. The submission of the Ld.AR that harvesting of Eucalyptus trees will take 4 to 5 years cannot be denied. The assessee in his statement has accepted the fact that they used to get Rs. 1 lakh to Rs. 1.5 lakhs per Acre from the agricultural operations. In the sale of agricultural produce viz., Coconut grove, Paddy and Eucalyptus, the receipt of cash is common among agriculturists. We find merit in the arguments of the Ld. AR that assessee has engaged in agricultural activities, not contested by the Revenue, and therefore we are of the considered view, considering the 13 acres of wet and dry lands owned by the assessee, it can be reasonably estimated that the assessee would have earned Rs. 7 lakhs per annum during the impugned assessment year in agricultural activity carried on by him from his agricultural lands of13 Acres. We therefore direct the Ld. AO to consider the agricultural income of Rs. 7 lakhs. Accordingly, the grounds raised by the assessee are partly allowed. Expenses incurred by the assessee through Credit Cards - HELD THAT:- Assessee has clarified before the Revenue that there Is withdrawals from the capital account and accommodation from friends - The assessee has also offered the difference amount due to the inability of the assessee to produce evidence for the same. AO has rightly distinguished the facts and in the absence any cogent evidence we are of the considered view that the Ld. CIT(A) s decision is in accordance with law and based on the facts and circumstances of the case and therefore we find no reason to interfere with the of the Ld. CIT(A) on this issue. It is ordered accordingly. Thus, this ground raised by the assessee is dismissed.
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2022 (10) TMI 126
Reopening of assessment u/s 147 - reassessment proceedings initiated against a dead person - HELD THAT:- assessee died much prior to initiation of reassessment proceedings, therefore, the action initiated by the Assessing Officer is void ab initio. No doubt that the death of assessee has not come in the notice of Assessing Officer, however, it is an admitted fact that the appellant has very well informed the ld. CIT(A) in writing that her husband has died on 12/5/2013. The ld. CIT(A) despite recording such fact has not given any finding nor has directed the Assessing Officer to take remedial action. Thus, I respectfully following the decisions pf Hon ble High Courts hold that reassessment proceedings initiated against a dead person is void ab initio and consequent action initiated and completed which is affirmed by ld. CIT(A) is set aside and assessment order is quashed. In the result, ground raised by the appellant is allowed.
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2022 (10) TMI 125
Rectification of mistake u/s 154 - disallowance of additional depreciation - Asset used less than 180 days - CIT-A deleted the disallowance of additional depreciation made by the AO while passing the order u/s 154 of the Act. Grounds raised by the Revenue are rejected.HELD THAT:- No infirmity in the order passed by the Ld. CIT(A) in deleting the disallowance of additional depreciation made by the Assessing Officer while passing the order u/s 154 of the Act. Grounds raised by the Revenue are rejected.
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2022 (10) TMI 124
Taxability of entertainment tax subsidy received by the assessee - Nature of receipts - HELD THAT:- While considering the nature and character of entertainment tax subsidy received by multiplexes/cinema hall owners under the very same Scheme the Hon ble Apex Court in case of CIT Vs. Chapalkar Brothers [ 2017 (12) TMI 816 - SUPREME COURT] has held that the entertainment tax subsidy received is in the nature of capital receipt. In fact, in assessee s own case in assessment years 2008-09 and 2009- 10 [ 2013 (6) TMI 73 - BOMBAY HIGH COURT] Hon ble Bombay High Court while dismissing the appeals filed by the Revenue has upheld the decision of the Tribunal holding that the entertainment tax subsidy received by the assessee is in the nature of capital receipts. Further, in case of CIT vs. Bougainvillea Multiplex Entertainment Centre (P) Ltd. [ 2015 (2) TMI 21 - DELHI HIGH COURT] has expressed identical view. Undisputedly, Commissioner (Appeals) while deciding the issue has followed the ratio laid down in the decisions cited supra. That being the case, we do not find any infirmity in the order of learned Commissioner (Appeals) on this issue. Accordingly, the order is upheld and grounds raised by the revenue are dismissed. Entertainment tax subsidy is held to be capital in nature, whether, it will go to reduce the cost of acquisition of capital assets resulting in disallowance of depreciation claimed by the assessee on plant and machinery to that extent - Entertainment tax subsidy granted by the State Government is not for the purpose of utilizing on any particular or specified assets. That being the factual position emerging on record, the reasoning of the assessing officer that such subsidy would go to reduce the cost of assets is unacceptable. More so, when the revenue has failed to bring any material on record to demonstrate that the subsidy has actually gone to reduce the cost of any specified assets on which the assessee claimed depreciation. That being the factual position, no part of the subsidy can be reduced from the written down value to compute depreciation.
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2022 (10) TMI 123
Estimation of income - bogus purchases - bogus purchases by applying the provisions of section 44AD - HELD THAT:- CIT(A) has estimated the net profit at 8% as prescribed in section 44AD of the I.T. Act to be reasonable in the case of civil contractors. The justification given by the Ld.CIT(A) in deleting the said addition made on account of bogus purchase and also on the estimation of net profit @8% as per the provisions of section 44AD, is satisfactory. - Decided against revenue. Addition u/s 68 - unexplained cash credit (loan) - HELD THAT:- As assessee has furnished required details to substantiate its claim pertaining to the addition made under section 68 - CIT(A) has also dealt with this issue extensively. On this note, we do not find any infirmity in the order of the Ld.CIT(A) in deleting the said addition made under section 68 of the I.T. Act. In the result, these grounds of appeal filed by the Revenue are dismissed. Addition u/s 14A r.w.r.8D - CIT-A restricted addition - Assessing Officer has made disallowance under section 14A r.w.r 8D(2) on the ground that the funds invested in the exempt income earning assets could not be segregated from the funds invested in the business of the assessee - HELD THAT:- Upon perusal of the assessee s submission and the decisions cited by the Ld.AR, we are of the considered view that there is no fallacy in the decision of the Ld.CIT(A) in restricting the disallowance only to the extent of exempt income earned by the assessee. In this context, this ground of appeal filed by the Revenue is dismissed. Estimating 8% of alleged unsupported project expenses by treating the same as bogus expenditure - As we have already given a detailed order in the above mentioned appeals of the Revenue on this ground by confirming the said addition on the basis of 8% estimation relying on the decision of Rattan SinghRathod [ 2013 (1) TMI 133 - ITAT MUMBAI] wherein the assessee s nature of business was also contracts and sub contracts, we are inclined to follow the decision and thereby the estimation of net profit rate @8%, in our view, is justifiable.
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2022 (10) TMI 122
Disallowance of u/s 43B - delay/default in depositing of the amounts paid for DVAT, Service Tax, TDS and Mumbai VAT - or the reason that in the tax audit report, the amount was reflected in Clause 26(i)(B)(b) which was with respect to liability u/s 43B not paid on or before the due date - HELD THAT:- Assessee has placed on record the date of the payments of the various amounts and has demonstrated that all the payments have been made before the due date of filing of return of income. The contention of the assessee of the amount being paid before the due date of filing of return has not been controverted by Revenue. Considering the totality of the aforesaid facts coupled with the fact that the Chartered Accountant of the assessee has also given Certificate that all the amounts have been paid before the due date of filing of return of income and due to inadvertent error, the amount was reflected under Clause 26(i)(B)(b) instead of Clause 26(i)(B)(a) of the Tax Audit Report. We are of the view that no disallowance is called for. We, accordingly, direct the AO to delete the addition made by assessee. Thus the ground of assessee is allowed. Disallowance u/s 36(i)(va) - contribution received towards PF/ESIC by the assessee from its employees was not deposited before the due date - HELD THAT:- Before us, Revenue has not placed any material on record to demonstrate that the aforesaid order cited hereinabove has been overruled/stayed/set aside by higher judicial forum - we are of the view that the AO was not justified in denying the deduction claimed by the assessee on account of late deposit of PF/ESI/EPF, albeit before filing the return of income. Admittedly in the matter, the Revenue had not contended that the assessee has deposited the contribution after the filing of the return of income. Respectfully following the decision of the Hon ble High Court cited hereinabove, we allow the grounds raised by the assessee and direct the AO to delete the addition. Addition made in the intimation issue u/s 143(1) - contention of the assessee that though the assessee had earned dividend income and also reflected in the computation of income under Schedule BP but however erroneously in Schedule EIHELD THAT:- Considering the submissions of AR, we are of the view that the contention of the assessee needs to be examined by AO. We, therefore, restore the issue back to the file of AO and direct him to verify the contention of the assessee. If the contention of the assessee is found correct about the addition being wrongly made, the same be deleted. Assessee is also directed to co-operate by furnishing of all the details furnished by AO. Thus the ground of assessee is allowed for statistical purpose. Short credit of TDS - grievance of the assessee is that assessee has not been granted credit of the TDS in the intimation u/s 143(1) of the Act though the same is reflected in From 26AS - HELD THAT:- Considering the submissions of the assessee, we are of the view that the issue of credit of TDS needs to be examined by AO. AO is, therefore, directed to verify the contention of the assessee and if the contention of the assessee found correct then the AO is directed to grant the credit of TDS reflected in Form 26AS in accordance with law. The assessee is also directed to furnish all the required details called for by AO. Thus the ground of assessee is allowed for statistical purposes.
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2022 (10) TMI 121
Reopening of assessment u/s 147 - addition on account of alleged cash investment in property - HELD THAT:- CIT(A) on comparing the signature of assessee on seized material with the signature of Income tax return of assessee and held that assessee is the same person. No opportunity was given to the assessee to explain his version on such comparison. We find that the stand of the assessee throughout the proceedings is that the assessee has not relation nor any business transaction with Baldevbhai P Patel. We find that said Baldevbhai P Patel filed Petition under chapter XIXA of Income tax for settlement of his case and took similar plea as stated in his statement before survey team that assessee is one of his partner in making investment in land. However, such statement of assessee was not accepted by ld Income Tax Settlement Commission and the petition of Baldevbhai P Patel was dismissed and on further appeal Jurisdictional High Court was dismissed Considering the categorical finding of the Income Tax Settlement Commission (ITSC) in its order vis-a-vis land of survey No. 223 to 225 at Vesu, Surat, in holding that none of the dates, which were shown to be the dates of transactions tallied with the dates on which the consideration in the land was received. Commission observed that no evidence was brought on record by Baldevbhai B Patel to establish his proximity with Hitesh Savani (assessee) and that the order of the ITSC has been affirmed by Jurisdictional High Court, therefore, we find merit in the submissions of the ld AR for the assessee that there is no evidence to connect the assessee with the sized material except the statement of third party. We find that the statement of Baldevbhai P Patel is not accepted by Principal Commissioner, on the basis of which the settlement petition of Baldevbhai P Patel was not allowed. On the basis of aforesaid factual discussion, we are of the view that the addition on account of alleged cash investment in the land at survey No. 223 to 225 Vesu, Surat by assessing officer was not justified. Hence, we direct the assessing officer to delete the addition. In the result, the ground of the appeal is allowed.
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2022 (10) TMI 120
Exemption u/s. 11 12 - appellant was granted registration U/s. 12AB - benefit of Fourth proviso to section 12A - Whether income of the appellant is eligible for exemption u/s. 11 12 of the Income Tax Act, 1961 since the appellant was granted registration U/s. 12AB of the Act vide order dated 21/3/2022 and as per the provisions of section 12A of the Act the benefit shall extend to all pending assessment proceedings? - HELD THAT:- In the instant case, the assessment / reassessment has been completed much earlier to the date of registration u/s.12AB of the Act which is dated 21/3/2022 and therefore the benefit of Fourth proviso to section 12A of the Act was not available to the pending appeal proceedings before the Tribunal. Therefore, the Additional Ground raised by the assessee is dismissed. Validity of initiation of proceedings U/s. 147 - HELD THAT:- In the instant case, the Ld. AR could not provide the notice U/s. 142(1) issued by the Ld. AO while framing the assessment U/s. 143(3) of the Act. It is also noted from the submissions made by the Ld. AR that the assessee has filed a petition under Right to Information Act (RTI Act)requesting for the details, notices issued U/s. 143(2) and 142(1) of the Act by the AO to the assessee. The application was rejected by the ACIT, Circle-3(1), Vijayawada stating that the information sought by the assessee was already available with the assessee and there is no necessity of furnishing the same to the assessee under the RTI Act. In the absence of any material evidence with regard to the enquiry by the Ld. AO and the submissions or required information by the assessee with respect to Sinking Fund account, we are of the considered view that the reopening of the assessment U/s. 147 is valid in law and accordingly, ground raised by the assessee is dismissed. Debiting of 85% of the development charges received by the assessee to the Sinking Fund account - It is normal accounting practice under the Accrual System of Accounting any future expenditure needs to be provided in the books of accounts in the relevant assessment year. It is not necessary that deduction shall be permissible only in case of amounts actually expended or paid. Further, it is also noticed that the assessee is supposed to expend 85% of the amount to developmental activities as approved by the Government of Andhra Pradesh in accordance with the Master Plan revised. It can be concluded that the assessee as formed under the Andhra Pradesh Urban Areas (Development) Act is bound by the directions of the Government in the collection and execution of development charges. It is also found that the assessee after getting necessary approvals and permissions from the Government of Andhra Pradesh has to expend 85% of the Development Charges collected by them to implement the provisions of the Master Plan. In view of the above discussions, we are of the considered view that the assessee being a non-profit oriented organization established for the purpose of implementing the provisions of the Master Plan is not carrying on any business activity and is only an organ of Government of Andhra Pradesh. Since the assessee could not expend 85% of the development charges during the relevant assessment year it does not warrant disallowance of the same as the expenditure shall be incurred in future years for the purpose of general public utilities. Accordingly, we allow the ground raised by the assessee and hereby set aside the order of the Ld. Revenue Authorities.
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2022 (10) TMI 119
Assessment of trust - Addition u/s 68 - donation received by the assessee religious trust from various donors - assessee has explained the source of cash and also relying on the provisions of Section 115BBC (2) - HELD THAT:- Facts show that assessee is religious trust. In the case of the assessee trust, the addition was made u/s 68 of the Act of the sum, which is already disclosed as income by the assessee trust in the nature of donation. In this case, the survey was conducted by the income tax department. The donation received by the assessee religious trust from various donors is reflected in the donation receipts, which were impounded during survey proceedings. The amount of donation received is treated as receipts in the Income and Expenditure account as voluntary contribution. According to the provisions of Section 68 if any sum is found credited in the books of accounts of the assessee including the trust, the nature and source of such credit is required to be explained to the satisfaction of the learned assessing officer. Otherwise, it may be added under Section 68 of the Act. There is no dispute on this aspect. It applies to all assesses without any exception. Even in the case of a charitable trust, which has offered income in its income and expenditure account in the form of voluntary donation, if such trust fails to explain the source of such voluntary contributions, section 68 of the Act may apply. Earlier decision holding that section 68 does not apply to voluntary contribution were rendered where there was no tax disparity in income taxed as normal income and income as unexplained cash credit under Section 68 of the Act. In the impugned cash where the receipts were impounded by survey team, income offered as voluntary contributions and purpose of such donation is explained, it cannot be added under Section 68 of the Act. Provisions of Section 115BBC were enacted to tax such donations in hands of certain charitable trust and institutions at the rate of 30%. However, sub-section 2 (b) of the Act excludes the trust established woolly for religious and charitable purpose from rigors of that Section. This is also explained in paragraph number 25 of circular number 14/2006 dated 28th December, 2006. In the above aspect and following the decision of the Hon'ble Delhi High Court [ 2015 (9) TMI 558 - DELHI HIGH COURT] CIT (A) has deleted the addition. We do not find any infirmity in the order of the CIT (A) deleting the above addition - Accordingly, ground no. 1 of the appeal is dismissed.
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2022 (10) TMI 118
Validity of notice issued u/sec 274 r.w.s 271(1)(c) - whether the penalty is levied for concealment of particulars of income or furnishing inaccurate particulars of income? - HELD THAT:- Notice issued for levying of penalty is invalid and the A.O. has not applied his mind and non striking of charge in the penalty notice i.e. whether the charge is for concealment of income or furnishing of in accurate particulars of income. We find the Jurisdictional Honble High Court of Bombay in Mohd Farhan A Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT] has dealt on this disputed issue of not striking off charge in the penalty notice would vitiate the penalty proceedings. Appeal of assessee allowed.
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2022 (10) TMI 117
Deduction u/s 10AA - Disallowance for the reason that the assessee had filed return of income belatedly and not within the time limit prescribed u/s 139(1) - AO has disallowed the claim of deduction u/s 10AA for the solitary reason that the return of income was not filed within the specified due date u/s 139(1) - HELD THAT:- Hon ble High Court of Delhi has applied this doctrine of interpretation of Scott R.Bayman v. Commissioner of Income-tax, Delhi [ 2012 (8) TMI 646 - DELHI HIGH COURT] and referred to the above mentioned judgment of the Hon ble Apex Court. When the Legislature has omitted such a restriction in section 10AA in its wisdom, it is not for the A.O. nor the CIT(A) to prescribe such a conditionality and impose it on an assessee. Therefore, the denial of the exemption on the ground of not filing the return of income within the specified due date u/s 139(1) of the I.T.Act is not legally correct. Since the A.O. had disallowed the claim of deduction u/s 10AA of the I.T.Act, at threshold for reason that the assessee has not filed the return of income u/s 139(1) we are of the view that the matter needs to be examined whether the assessee has complied with any other conditions mandated u/s 10AA - A.O. shall also examine whether the assessee has correctly computed the claim CIT(A) in the impugned order has stated that the assessee has claimed excess deduction u/s 10AA. Deduction u/s 35(1)(i) - expenditure on scientific research - HELD THAT:- The details with regard to expenditure claimed u/s 35(1)(i) was disallowed by the A.O. for the reason that the assessee has failed to furnish the details of the claim. The assessee had debited to Profit and Loss account under the 'other expenses . The details of the 'other expenses are placed on record filed by the assessee. However, the bifurcation/schedule of the 'product development expenses has not been provided. The assessee is now claiming the benefit of deduction u/s 37 of the I.T.Act and the details of the said claim is not before the Tribunal. Therefore, in the interest of justice and equity, we are of the view that the matter needs to be examined afresh by the A.O. The assessee shall provide the necessary details of bifurcation and explain the nature of expenditure - It is ordered accordingly. Hence, 2 is allowed for statistical purposes.
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2022 (10) TMI 116
Estimation of income - Addition u/s 68 - bogus and false entries or undisclosed income of the assessee which was induced in the books under the garb of cash sales and advance from customer and receipt from debtors - addition considering the same as part of turnover and applying same rate of G.P. @ 2.59 % of cash sales which was added by AO u/s. 68 of the disbelieving the cash sales recorded by the assessee on the day of demonetization - CIT-A deleted the addition - HELD THAT:- As revenue not prove the sale made by the assessee which is executed after giving the goods to the customer, duly reflected in the invoice issued, assessee having sufficient stock in the books, sales is duly reflected in the books of accounts supported by payment of VAT. Therefore, the contention of the revenue based on the facts and circumstance of the case is not accepted and we see no reason to find any fault in the detailed reasoned finding in the order of the ld. CIT(A). Thus, we sustain the order of the ld. CIT(A) and based on these observations the appeal of the revenue stands dismissed. Rejection of books of account on the basis of insignificant defects - estimation of income by applying NP rate - Whether Rejection of books of account u/s 145(3) was not given by the AO and the assessment completed in the manner provided u/s 144 - HELD THAT:- It is apparent from records that all the amounts realized from debtors and received as advance from customers during the period 03-11-2016 to 8-112016 was genuine and verifiable from the accounts then there is no cogent reason by the lower authorities to treat the same as nongenuine. Hence, looking into the entirety of the facts, circumstances of the case and the case laws cited by the AR of the assessee (supra), we allow the appeal of the assessee by holding that the rejection of books of account on the basis of insignificant defects in all respect, is not justified and books of account deserves to be accepted. Before invoking the provisions of Section 145(3) of the Act, the AO has to bring on record material on the basis of which he has arrived at the conclusion with regard to correctness or completeness of the accounts of the assessee or the method of accounting employed by it. In the instant case, it was not the case that the assessee had not followed either cash or mercantile system of accounting. It was also not the case that the Central Government had notified any particular accounting standard not followed by assessee. Further the assessee maintains proper books of account audited by Chartered Accountant and the profit may be derived from the audited books of account therefore there is no justification in estimation of income by applying NP rate and accordingly the lower authorities are directed to delete the addition sustained by ld CIT(A). Appeal of the assessee is allowed.
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2022 (10) TMI 115
Addition u/s 234E - Intimation u/s 200A of the Act before 01.06.2015 i.e. before the amendment brought into effect from 01.06.2015 in section 200A - HELD THAT:- As decided in M/s. Keshav Industries Pvt. Ltd. [ 2020 (7) TMI 812 - ITAT INDORE] wherein fee u/s 234E of the Act was levied in the statements processed u/s 200A of the Act before 01.06.2015 i.e. before the amendment brought into effect from 01.06.2015 in section 200A of the Act thereby enabling the revenue authorities to raise demand in respect of levy of fees u/s 234E CIT(A) erred in confirming the levy of late fees u/s 234E of the Act by the assessing officer. Accordingly findings CIT(A) in all these 10 appeals are reversed as we have recently taken a considered view against the revenue on earlier orders of Ld. CIT(A) wherein the identical orders by respective CIT(A) were passed and accordingly the revenue is directed to delete the levy of fees u/s 234E of the Act in all these 10 cases. Thus, common issue raised in these bunch of appeals is decided in favour of the assessee(s). Short-deduction of TDS plus interest thereon u/s 201 of the Act - short-deduction between the revenue and assessee is for the reason that the revenue has computed deductible amount of TDS on gross salary , whereas the assessee has computed TDS deductible on the basis of net salary i.e. gross salary (-) deductions under Chapter VI-A - HELD THAT:- We observe that the approach of assessee is in accordance with the provisions of TDS as prescribed in Income-tax Act, 1961, which permit the consideration of deductions under Chapter- VIA while computing deductible amount of TDS. Therefore, we do not find any mistake in assessee s action. That brings us to observe that the revenue authorities have wrongly computed short-deduction of Rs. 56,650/- and consequently interest thereon of Rs. 28,590/-. We do not find any merit in these demands created by revenue which are not as per law. Therefore, we delete these demands. Resultantly, Ground No. 2 to 4 are allowed. Default in timely payment of TDS u/s 201 - HELD THAT:- As assessee admits delay in payment of TDS, although the assessee has pleaded reasons for delay, which again are multiple and vague. We note that TDS once deducted is a money belonging to exchequer and timely payment to Govt. A/c is mandated under the provisions of Income-tax Act, 1961. Further, section 201 prescribes levy of interest in clear terms. Therefore, the levy of interest is statutory and the assessee has to bear the same and the reasons advanced by assessee cannot exonerate from levy of interest. Accordingly, we are not inclined to grant any relief to assessee on this account. Ground No. 5 is thus dismissed.
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2022 (10) TMI 114
Undisclosed rental income - primary arguments of the assessee are two-fold: firstly, on merits, the assessee submitted that the rental income did not accrue to the assessee in the first place, since the same was siphoned off illegally and fraudulently by the directors of the company - assessee submitted that the order has been passed by Ld. CIT(Appeals) without granting adequate opportunity of hearing to the assessee - HELD THAT:- As assessee was never in receipt of the rental income, since neither the assessee company had entered into a lease agreement with the tenants and nor was the rental income ever received by the assessee company, accordingly the said rental income was not offered to tax by the assessee in its return of income. Secondly, inadequate opportunity of hearing was afforded by the Ld. CIT(Appeals) and the case was dismissed without hearing the same on merits for all the years under consideration. In the interest of justice, we are setting aside the case to the file of the Ld. CIT(Appeals) for hearing the case afresh on merits, after giving due opportunity of hearing to the assessee. Appeal of the assessee is allowed for statistical purposes.
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2022 (10) TMI 113
Unexplained cash deposits - whether impugned cash deposits to the joint bank account of the assessee and her mother belonged to the assessee? - department alleges that the impugned deposits have been made by the assessee, whereas the assessee has successfully demonstrated that these deposits have been made by her mother out of cash withdrawals made by her on 15.01.2009, much earlier than the dates of impugned deposits - HELD THAT:- It is of the opinion that only because the assessee now has been mentioned as joint account holder of the bank account to which the impugned cash deposit has been made, the additions cannot be made and sustained in the hands of the assessee, keeping aside other relevant evidences, which clearly reveal that the mother of the assessee had withdrawn an amount of Rs.50 lakh from her bank account and the impugned three deposits have been made to the same bank account by her mother out of the amount withdrawn earlier. CIT(A) was not correct and justified in confirming the addition of Rs.6,70,000/- in the hands of the assessee by taking cognizance of an agreement to sell dated 27.08.2009 which was not accepted by the assessee, but, was accepted by the mother of the assessee - CIT(A) has misinterpreted the relevant documentary evidence relied by the assessee and, therefore, part addition sustained by the ld.CIT(A) is also not sustainable and the AO is directed to delete the same. - Decided in favour of assessee.
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2022 (10) TMI 112
Exemption u/s 10(6)(ii) - remuneration received by her from Austrian Trade Commission, Austrian Embassy under full time employment - As per AO assessee is not a staff member or any official, but, was engaged as Consultant on contractual agreement basis, therefore, the exemption u/s 10(6)(ii) of the Act is not available to her - HELD THAT:- In the official endorsement, it has been mentioned that the assessee is responsible as head of Technology at Austrian Trade Commission in New Delhi. The certificate issued by the Austrian Embassy clearly reveals that the assessee was appointed as Consultant in the Austrian Trade Commission in the field of Mechanical Engineering Terotechnology and Automotive Industry, from the relevant financial period and subsequent certificate dated 17.06.2019 further clarify that the assessee has been under full time employment with Austrian Embassy, Commercial Section. This is also in conformity with the entries in the passport of the assessee. The copy of passport also reveals that the assessee is not having an ordinary passport, but, a service passport issued by the Government of Austria. Clause (ii) of sub-section (6) of section 10 clearly stipulates that the remuneration received as an official by whatever name called of an Embassy (which is Austrian Embassy in the present case) is not includable in the taxable income of an assessee. Therefore, the certificate issued by the Austrian Embassy cannot be doubted or disregarded in view of said provision and other surrounding facts and circumstances and duties assigned to the assessee by the Austrian Embassy are also mentioned in her passport by the Government of Austria. Therefore, assessee has been in full time employment with the Austrian Embassy, Commercial Section. CIT(A) has also taken a basis for denying the exemption u/s 10(6)(ii) of the Act that the assessee is not eligible for any pension, social or accident insurance, gratuity, etc., but, this is not a precondition for allowing exemption u/s 10(6)(ii) of the Act. Therefore, the basis on which the ld.CIT(A) denied the benefit of the said exemption cannot be held as good and sustainable. As it is not the case of the authorities below that the officials of Indian Embassy are not getting the same benefit and thus the claim of the assessee is hit by proviso to clause (ii) of sub-section (6) of Section 10 of the Act. In the submissions, DR could not dispute that the Treaty at Vienna Convention was signed by India and Austria and both are under obligation to abide by the same and this fact also supports the case of the assessee that she is entitled to exemption u/s 10(6)(ii) of the Act on the remuneration received by her from Austrian Trade Commission, Austrian Embassy under full time employment. Assessee appeal allowed.
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2022 (10) TMI 111
Delayed PF / ESI conntribution - contribution received towards PF/ESIC by the assessee from its employees was not deposited before the due date - HELD THAT:- We are of the view that the AO was not justified in denying the deduction claimed by the assessee on account of late deposit of PF/ESI/EPF, albeit before filing the return of income. Admittedly in the matter, the Revenue had not contended that the assessee has deposited the contribution after the filing of the return of income, we allow the ground raised by the assessee and direct the AO to delete the addition. - Decided in favour of assessee.
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2022 (10) TMI 110
Belated payment of Employee s Provident Fund (EPD) and Employee s State Insurance Scheme (ESI) - HELD THAT:- We are of the view that the AO was not justified in denying the deduction claimed by the assessee on account of late deposit of PF/ESI/EPF, albeit before filing the return of income. Admittedly in the matter, the Revenue had not contended that the assessee has deposited the contribution after the filing of the return of income. Respectfully following the decision we allow the ground raised by the assessee and direct the AO to delete the addition. See PRO INTERACTIVE SERVICE (INDIA) PVT. LTD. [ 2018 (9) TMI 2009 - DELHI HIGH COURT] - Decided in favour of assessee.
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2022 (10) TMI 109
Revision u/s 263 by CIT - miss match in income / capital of gain on sale of land or building - HELD THAT:- When a query was raised to the AR that whether the AO has raised this point with respect to applicability of provisions of section 43CA of the Act in the course of assessment proceedings, the Ld AR submitted that since the AO has issued notice 142(1) of the Act and the assesseee has complied with the directions with substantial material information and which covers the disputed issue also. AR emphasized on the details submitted by the assesse before the Pr.CIT on 4-12-2019 which includes agreement copies, booking receipts, ready recokner ,and calculation sheet of value as of flat with ready recknor value placed and the bank statements highlighting payments received from flat owners was filed first time before the Honble Tribunal as per the certificate of the assessee. Whereas the Pr.CIT has observed that the Bank statement reflecting payments received from the flats was not produced by the assessee in the revision proceedings. So it is clear that the A.O. has never verified the payments received from the flats.We find the A.O has called for the information, but there is no examination and verification of the facts or findings by the A.O on the applicability of provisions U/s 43CA of the Act. Accordingly, We do not find infirmity in the order of the Pr.CIT on the directions to A.O. for verification, examination of working submitted by the assessee and up hold the same and dismiss grounds of appeal of the assessee.
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2022 (10) TMI 108
Income accrued in India - Centralized services fee received by the appellant for rendering various marketing, advertisement other services to customers in India - whether taxable as Fees for Technical Services (FTS) in terms of Section 9 of the Income Tax Act, 1961 as well as Article 12 of the India US Double Taxation Avoidance Agreement (DTAA) - HELD THAT:- As decided in own case [ 2019 (10) TMI 1447 - ITAT DELHI] main service rendered by the assessee to its clients-hotels was advertisement, publicity and sales promotion keeping in mind their mutual interest and, in that context, the use of trademark, trade name or the stylized 'S' or other enumerated services referred to in the agreement with the assessee were incidental to the said main service, it rightly concluded, in our view, that the payments received were neither in the nature of royalty under section 9(1)(vi) read with Explanation 2 or in the nature of fee for technical services under section 9(1)(vii) read with Explanation 2 or taxable under article 12 of the D TAA. The payments received were thus, rightly held by the Tribunal, to be in the nature of business income. And since the assessee admittedly does not have a permanent establishment under the article 7 of the D TAA 'business income' received by the assessee cannot be brought to tax in India. The findings of the Tribunal on this account cannot be faulted. Appeal of assessee allowed.
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2022 (10) TMI 107
Relief u/s 90 - foreign tax credit - disallowance of FTC in case of delay in filing Form No. 67 - whether assessee is entitled to foreign tax credit even when form number 67 required to be filed according to the provisions of rule 128 (9) of the Income Tax Rules on or before the due date of filing of the return of income, not complied by the assessee, but same was filed before the completion of the assessment proceedings? - HELD THAT:- It is well settled that while laying down a particular procedure, if no negative or adverse consequences are contemplated for non-adherence to such procedure, the relevant provision is normally not taken to be mandatory and is considered to be purely directory. Admittedly, Rule 128 does not prescribe denial of credit of FTC. Further the Act i.e. section 90 or 91 also do not prescribe timeline for filing of such declaration on or before due date of filing of ROI. Further rule 128 (4) clearly provides the condition where the foreign tax credit would not be allowed. Rule 128 (9) does not say that if prescribed form would not be filed on or before the due date of filing of the return no such credit would be allowed. Further by the amendment to the rule with effect from 1 April 2022, the assessee can file such form number 67 on or before the end of the assessment year. Therefore, legislature in its own wisdom has extended such date which is beyond the due date of filing of the return of income. Further , the fact in the present case is quite distinct then the issue involved in the decision of the honourable Supreme Court in case of Wipro Ltd [ 2022 (7) TMI 560 - SUPREME COURT] - Here it is not the case of violation of any of the provisions of the act but of the rule, which does not provide for any consequence, if not complied with. Therefore, respectfully following the decisions of the coordinate bench on this issue, we hold the assessee is eligible for foreign tax credit, as she has filed form number 67 before completion of the assessment, though not in accordance with rule 128 (9) of The Income Tax Rules, which provided that such form shall be filed on or before the due date of filing of the return of income. Accordingly, ground number 2 of the appeal of the assessee is allowed.
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2022 (10) TMI 106
Revision u/s 263 - jurisdiction of the AO over the assessee whether it was with the Mumbai office or Rajkot office - HELD THAT:- There is no dispute to the fact that the intimation for the change of the address was duly communicated by the assessee to the AO of Mumbai and therefore the AO Mumbai made all correspondences including the notice issued u/s 143(2) of the Act at the address of Rajkot. Thus it is transpired that for all practical purposes the address of the assessee was shifted from Mumbai to Rajkot and this fact has also not been controverted by the revenue. No ambiguity to the fact that jurisdiction over the assessee was vested with the income tax office of Rajkot and therefore the AO Mumbai has exceeded his jurisdiction by framing the assessment u/s 144 - At the time of hearing the DR has not brought anything on record contrary to the arguments advanced by the learned AR for the assessee. As such no other judgment favouring the revenue was brought to our notice by the learned DR at the time of hearing. We hold that the assessment has been framed by the AO having no jurisdiction over the assessee and therefore such assessment is not sustainable. Accordingly, we quash the same. Hence, the technical issue raised by the assessee is allowed.
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2022 (10) TMI 105
Assessment of trust - Grant of Provisional Registration instead of Regular Registration under section 12AB - HELD THAT:- As the assessee trust was already holding certificate dated 11/08/1989 issued under section 12A of the Act. We find that section 12AB(1)(a) of the Act, which deals with grant of Regular Registration for a period of 5 years does not authorize the Principal Commissioner or Commissioner to impose any conditions for grant of such registration. We further find that though the impugned order granted Provisional Registration subject to certain conditions, however, same was granted for a period of 5 assessment years i.e. from assessment year 2022 23 to assessment year 2026 27. We also find that the impugned order for provisional registration in Form 10AC was issued under section 12A(1)(ac)(i) of the Act, which provision merely deals with making an application for registration. In view of the above, we are of the considered opinion that application filed by the assessee trust under section 12A(1)(ac)(i) was not properly considered for grant of registration under section 12AB of the Act. Accordingly, we direct the designated authority under section 12AB to de novo consider the application of the assessee trust under section 12A(1)(ac)(i) of the Act and grant the registration as per law. As a result, grounds raised by the assessee are allowed for statistical purpose.
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2022 (10) TMI 104
Addition on account of balance in the foreign bank account - information about the foreign bank account was received by the Government of India and the bank account was not disclosed by the assessee - CIT-A deleted the addition - HELD THAT:- We find that the CIT(A) has considered the facts, provisions and dealt on the financial aspects and observed that the income is already assessed in the A.Y 2007-08 and therefore granted the relief. The Ld. DR could not controvert the findings of the CIT(A) with any new cogent evidence or information to take a different view. Accordingly, we do not find any infirmity in the order of the CIT(A) on the issues raised before the Honble Tribunal in the revenue appeal and uphold the same and dismiss the grounds of appeal filed by the revenue.
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2022 (10) TMI 103
Deemed dividend Addition u/s 2(22)(e) - loan advances received as assessee is a common shareholders in both the companies holding more than 10% of the shares - HELD THAT:- As during the course of assessment proceedings, the respondent-assessee had not disputed that he is common shareholder in both the companies, however, contended that the provisions of section 2(22)(e) have no application, inasmuch as, the loan was advanced by M/s. Kumar Urban Developers Ltd. to M/s. Shatrunjay Construction and Developers Pvt. Ltd. in the ordinary course of its business. However, during the course of proceedings before the CIT(A), the respondent-assessee took a plea that he was not a shareholder in M/s. Shatrunjay Construction and Developers Pvt. Ltd. at the time of granting of loan by M/s. Kumar Urban Developers Ltd. to M/s. Shatrunjay Construction and Developers Pvt. Ltd. and this contention was proved by filing the shareholding pattern of the said company. Even on remand to the Assessing Officer by ld. CIT(A), the Assessing Officer also concurred with the submission of the respondent-assessee that he is not a shareholder in M/s. Shatrunjay Construction and Developers Pvt. Ltd. at the relevant point of time. CIT(A) accordingly concluded that the provisions of section 2(22)(e) have no application to the facts of the present case. This fact has not been controverted by the ld. Sr. DR. Since the order of the ld. CIT(A) is based on proper appreciation of facts and law, we do not find any infirmity in the order of the ld. CIT(A). Accordingly, the grounds of appeal raised by the Revenue stand dismissed.
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2022 (10) TMI 102
Deduction u/s 80C - Premium paid towards that insurance policy - HELD THAT:- As taking note of contention of the assessee in respect of premium paid to the insurance company cannot be brought to tax subject to the fact that assessee shall not avail deduction u/s 80C of the Act in respect of premium paid towards that insurance policy. Being so, we remit this issue to the file of AO to consider only net amount as discussed above to taxation provided assessee has not claimed deduction u/s 80C of the Act in respect of premium paid on life insurance policy or claimed any deduction u/s 10(10D) of the Act. With this observation, we remit this issue to the file of AO for fresh consideration after hearing to the assessee. Appeal filed by the assessee is partly allowed for statistical purposes.
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2022 (10) TMI 101
Revision u/s 263 - Deduction u/s 80IB(10) - HELD THAT:- There was indeed unvarying and indistinguishable material placed before both these tax authorities during the course of regular assessment vis- -vis revisionary proceeding, which in turn demonstrates that, AO considering the same submission of the assessee carried out inquiry with respect to eligibility of claim, basis of claim and compliance relating thereto(if any) and then finalized the assessment taking one of the plausible view in the light of settled legal position in allowing the deduction u/s 80IB(10) this evidently concludes that the adjudication squarely fell within aforementioned Queen Principle . Whereas under revisionary proceedings PCIT yet again conducted an inquiry into the claim of the appellant based on the like material and sitting on the same fence displaced with the views of Ld. AO and directed for modification of assessment which is ostensibly impermissible under a law following the ration laid in down in CIT Vs Gabriel India Ltd. [ 1993 (4) TMI 55 - BOMBAY HIGH COURT] and the Hon ble Apex Court in Malabar Industrial Co Ltd. Vs CIT [ 2000 (2) TMI 10 - SUPREME COURT] Ergo, in the above context, we find the order of Ld PCIT is unsustainable in law, consequently we quash revisionary order passed u/s 263 of the Act and restore the order of assessment passed u/s 143(3). Appeal of appellant allowed.
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2022 (10) TMI 87
Foreign Tax Credit u/s. 90/90A - Credit of any foreign tax shall be allowed on furnishing the following documents by the assessee - claim of the assessee has been denied while processing return of the assessee u/s 143(1) - HELD THAT:- We note that on identical issue, This Tribunal in the case of Brinda Rama Krishna [ 2022 (2) TMI 752 - ITAT BANGALORE ]held that (i) Rule 128(9) of the Rules does not provide for disallowance of FTC in case of delay in filing Form No.67; (ii) filing of Form No.67 is not mandatory but a directory requirement and (iii) DTAA overrides the provisions of the Act and the Rules cannot be contrary to the Act. Therefore, non-furnishing of Form No.67 before the due date u/s 139(1) of the Act is not fatal to the claim for FTC. We direct the AO to give credit for foreign tax as per Form 67 filed on 22.9.2018 before Ld. CIT(A) after due verification.
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Customs
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2022 (10) TMI 100
Territorial Jurisdiction - power of Tribunal to decide any appeal in respect of any goods imported or exported as Baggage - absolute Confiscation - direction for re-export of goods - Section 129A (1) of the Customs Act, 1962 - HELD THAT:- Having found that the Baggage Rules would cover the respondents in terms of the categories of passengers, question may still arise as to whether jewellery worn on the person of a passenger would constitute Baggage. It may be necessary for the appellant to show that not only the appellants are governed by the Baggage rules but the jewellery worn on the person would constitute Baggage to sustain its argument of lack of jurisdiction of the Tribunal to deal with the present issue. It seems that the appellants may be right in its submission that the issue relates to Baggage falls within the exclusion carved out in terms of the proviso to Section 129 A (1) of the Customs Act, 1962 and thus the order of the Tribunal is set aside as bad in law. However, liberty is granted to the respondents to avail statutory remedy by way of a revision before the appropriate authority if so advised within a period of 8 weeks from the date of receipt of a copy of this order. If such revision is filed by the respondents within the time line set out above the Revisional Authoirty shall examine the matter and pass order on merits. As the Tribunal may not have jurisdiction to entertain the appeal in respect of an order relating to import of baggage, as a consequence W.P.No.4811 of 2021 praying for disposal of her jewellery which was premised on the order of the Tribunal which we have set aside appears to have become infructuous. However liberty is granted in the event of the petitioner succeeding in the challenge to the order of the appellate authority before the appropriate forum to avail any remedy that may be available to enforce such order in the manner known to law. Petition disposed off.
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2022 (10) TMI 99
Provisional release of the impugned goods - import of used Digital Multifunctional Printers / Devices (MFDs) (second hand goods) - non-compliance with the provisions of Domestic laws under the Bureau of Indian Standards (BIS) Act, 2016 read with the Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order (CRO), 2012 - failure to obtain DGFT authorization as required for the import of second hand goods, as required under paragraph 2.31 of the FTP, 2015-20 - failure to produce Chartered Engineer Certificate in complete. HELD THAT:- Reliance placed in the case of THE COMMISSIONER OF CUSTOMS, CHENNAI VERSUS M/S. KUTTY IMPEX [ 2022 (9) TMI 1049 - CESTAT CHENNAI] , wherein it was held that the First Appellate Authority was correct in allowing the appeal thereby ordering provisional release of the goods in question, and since there is no change in the facts, the same is required to be followed in the case on hand as well. Following the above ratio decidendi, therefore, the appeal of the Revenue is dismissed.
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Corporate Laws
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2022 (10) TMI 98
Seeking restoration of name of the company in the Register of Companies being maintained by the Registrar of Companies, NER, Guwahati, Assam (ROC) - Section 252 of Companies Act - HELD THAT:- The petitioner has contended in the present petition that the company has been active since its incorporation. The failure on the part of the company to file the financial statements was unintentional and not deliberate. However due to such reason the ROC, Guwahati Struck off the name of the Company. It would be just and equitable to revive the name of the company, KONGBAM CONSTRUCTION PRIVATE LIMITED in the statutory register as being maintained by the Registrar of Companies, Guwahati. Application allowed.
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Insolvency & Bankruptcy
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2022 (10) TMI 97
Suspension of registration of the Resolution Professional (RP) - territorial jurisdiction to entertain the Writ Petition of this court - doctrine of forum conveniens - HELD THAT:- It does not appear to be a matter of debate that show cause notice was issued to the Petitioner by the Respondent and subsequent thereto the order of suspension in respect of acts of omission and commission in respect of the proceedings against the Innovari Technologies Pvt. Ltd. at Delhi is issued. The Respondents have also not disputed that the Petitioner acts as a Resolution Professional and has work on hand at Mumbai - The power conferred upon the High Court to issue directions, orders or writs can be exercised by the High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power. The Court exercising power under Article 226 of the Constitution can issue writs detailed under clause 1 to the person or authority situated beyond its territorial jurisdiction provided cause of action wholly or partly arises within the territorial jurisdiction of the court entertaining the Writ Petition. The Respondents have not disputed that the Petitioner acts as a Resolution Professional and has work on hand at Mumbai. He is appointed as an Insolvency Professional by the Mumbai Bench for Wholesale Foods P.Ltd. and the said proceeding is pending adjudication before NCLT, Mumbai Bench. The Petitioner is empanelled as Insolvency Professional for financial institution in Mumbai viz. 1) IDBI Bank 2) Bank of Baroda. Pursuant to the order of suspension, the Petitioner would not be in a position to work as a Resolution Professional with the assignments on hand in the State of Maharashtra - it cannot be said that only a small part of cause of action as arisen within the territorial jurisdiction of this court, the part of cause of action has arisen within the territorial jurisdiction of this court. This court has territorial jurisdiction to entertain the Writ Petition - matter shall be heard on merits.
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2022 (10) TMI 96
Sale of the Corporate Debtor as a Going Concern - Correctness of e- Auction Process conducted by the Liquidator - direction for initiation of fresh bidding process for sale of the Assets of Corporate Debtor - direction to complete the entire process within specified time from the date of Order, inviting fresh bids and according an opportunity to the interested bidders - whether the Appellant-Liquidator committed any material irregularity in conducting e-Auction of Corporate Debtor as a going Concern, if so the irregularity is material which vitiates the entire Auction process and whether the Auction is liable to be set aside? HELD THAT:- In the present facts of the case, the Liquidator/Appellant issued corrigendum extending time not an addenda. Irrespective of nomenclature of the Notification, the purport of the Notification if taken as it is, the Notification dated 24.08.2021 i.e., by the corrigendum is intended to extend time for submission of documents of EMD and change of date and time of Auction. Admittedly, the Liquidator received no documents of EMD till expiry of time limited in the Original Notification dated 24.06.2021 and thus nobody intends to participate in the e-Auction Process. Therefore, it is the duty of the Liquidator to afford an opportunity to inspect the Corporate Debtor enabling the participant or interested bidders to submit the EMD Application, as participation in the e-Auction Process is to maximize the Assets of the Corporate Debtor. On account of failure to fix date and time for inspection of Corporate Debtor by the interested bidders before conducting the Auction, possibility for submission of documents of EMD to participate in the e-Auction would not arise normally, thereby the questions of maximization doesn t arise hence it is a matter of serious material irregularity, which vitiates the entire e-Auction Process. In the present case, the Liquidator made an attempt to sell the Corporate Debtor as a Going Concern by Public Auction but committed a serious material irregularity in issuing corrigendum for extension of time for both submission of EMD documents and date and time for Auction, without specified date and time of inspection of Corporate Debtor which vitiates the entire process. Time Limitation - HELD THAT:- The completion of Liquidation Process within one year in terms of Regulation 32A(4) is not mandatory. The main endeavor of the Liquidator must be value of maximization of the Corporate Debtor in case of holding the Auction in a hurried manner without complying the procedure, it would vitiate the entire proceedings. The Appellant has thus committed a material irregularity which resulted in reduction of amount to be distributed among the Creditors and against the interest of the Committee of Creditors and so also failed to maximize the value of the Corporate Debtor . Though, Regulation 32A(4) is not mandatory - there are no ground to interfere with the well- considered Order of the Adjudicating Authority, warranting interference of this Tribunal. Appeal dismissed.
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2022 (10) TMI 95
Approval of Resolution Plan - it is alleged that the Resolution Plan dated 26.06.2020 submitted by 4th Respondent has been approved without application of mind and without scrutinizing the Resolution Plan - it is alleged that the financial proposal against the total dues of Operational Creditors were made without actual assessment of Liquidation Value of Corporate Debtor which dehors the provisions of Section 30(2)(b) read with Section 53 of the Insolvency and Bankruptcy Code, 2016. Whether the CoC and Adjudicating Authority discriminated the Operational Creditors from Financial Creditor while approving the Resolution plan making the Appellant to loss 100% of its claim, if so, the order is liable to be set aside? - HELD THAT:- The Resolution Professional distributed the proportionate amount to the Operational Creditors strictly adhering to Section 30(2)(b) and Section 53 of IBC. Even otherwise, the plan was approved by the CoC with 100% majority voting share. The Adjudicating Authority shall examine, whether the approved resolution plan by CoC is contrary to any law or whether it is viable and implementable, and the Adjudicating Authority is not under an obligation to examine the amount to be distributed to the different class of creditors. Thus, the once the plan was approved by CoC in its commercial wisdom, the Adjudicating Authority cannot interfere with such decision taken by the CoC, unless the plan is contrary to any of the provisions of IBC or any other law. It is not the case of the Appellant that in approved is against any of the provisions of the IBC or and any other, but, pleaded only discrimination. This Tribunal in DAMODAR VALLEY CORPORATION VERSUS KHARKIA STEELS PVT. LTD., MR. UDAY NARAYAN MITRA LSI RESOLUTION PRIVATE LIMITED, AMRITVANI EXIM PRIVATE LIMITED [ 2022 (3) TMI 821 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] , this Tribunal held that the NCLT does not hold equity-based jurisdiction and any distribution which is in accordance with Section 30(2)(b) of IBC is considered fair and equitable and accordingly the approved resolution plan is not interfered by this Tribunal. Thus, it is clear that the discrimination among class of creditors vitiates the Resolution plan. The Appellant being an Operational Creditor if discriminated from the other Operational Creditor, it is a ground to set aside, but here Appellant, being Operational Creditor was not discriminated from the other Operational Creditors. Therefore, it is not a ground for set aside the resolution plan since such discrimination is permissible in terms of the judgments referred - the ground of discrimination does not stand to any scrutiny - the point is answered against in Appellant and in favour of respondents. Whether the Resolution Professional is under legal obligation to inform the fair, liquidation value of the Corporate Debtor to the Appellant, who is not a member of CoC? - HELD THAT:- Since the Appellant is not a member of the CoC failure to provide fair value and liquidation value to the Appellant is not a ground to set aside the order impugned in the Appeal while exercising jurisdiction under Section 61 of IBC. Therefore, the contention of the Appellant about non-compliance of Regulation 35(2) is hereby rejected while holding that is not a ground to set aside the order impugned. Accordingly, point is here against the Appellant and in favour of the Respondents. Whether the alleged failure to appoint a registered valuer for valuing the Corporate Debtor to fix, fair and liquidation value is an legality in the order passed by the Adjudicating Authority? - HELD THAT:- The Tribunal recording a finding in para 16 and 17 of the order about appointment of registered valuer for determining the fair value and liquidation value of the Corporate Debtor in compliance of Regulation 27 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate persons) Regulation, 2016. But nobody will be allowed to access to such information as to the liquidation value except providing the same to the member of CoC. On over all consideration of material on record, the resolution plan was approved by CoC strictly in compliance of the procedure prescribed under the Code and Regulations framed thereunder. In the present facts of the case, except the alleged violation referred, nothing is brought on record to establish that this plan was approved in contravention in any law. In those circumstances, the Appellate Tribunal while exercising jurisdiction under Section 61 cannot interfere with such order as no law as the approval of resolution plan is in compliance of statutory procedure. Therefore, there are no ground to interfere with the order passed by the Adjudicating Authority challenging for interference of this Court, while exercising jurisdiction under 61 of the IBC. Appeal dismissed.
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2022 (10) TMI 94
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- When interim orders were passed in this Appeal being orders dated 04.04.2019, 05.04.2019 and 15.04.2019, the Respondent No. 2 in the present Appeal (Company) EMAAR MGF LAND LIMITED VERSUS HADI MOHD TAHER BADRI ORS. [ 2022 (10) TMI 48 - SUPREME COURT] which has been disposed of by the Hon ble Supreme Court on 15.09.2022. The Hon ble Supreme Court in the aforesaid Civil Appeal No. 4433-4435/2019 noticed the submission of the Appellant that in view of the order passed by Hon ble Supreme Court in DR. VIRENDRA SWARUP INSTITUTE OF COMPUTER STUDIES VERSUS HADI MOHD TAHER BADRI ORS. [ 2019 (3) TMI 1994 - SUPREME COURT] , the Company Appeal (AT) (Ins.) No. 107 of 2019 pending in this Tribunal has become infructuous. After perusing both the orders dated 29.03.2019 and 15.09.2022 passed by Hon ble Supreme Court are of the opinion that in view of the order passed on 29.03.2019 this appeal itself has become infructuous. The order initiating the CIRP itself having been set aside by the Hon ble Supreme Court by order dated 29.03.2019, there is no occasion to keep this appeal pending - Appeal dismissed.
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Central Excise
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2022 (10) TMI 93
Levy of penalty - Applicability of ration of decision made in the case of co-noticee - SSI Exemption - Clubbing of clearances - dummy units - Split Air conditioners - all such different entities are being owned by same person or not - documents which were obtained fraudulently by suppressing the facts or not - Confiscation - HELD THAT:- The Appellant 2 and Appellant 3 admitted to their role in the alleged activities for evading the central excise duty they also admitted the fact that they were collecting the duty @ 30 % on the value of goods supplied to their Customers as Central Excise Duty as per the contract, but were not paying the same to government account. Hence, there are no hesitation in holding that the both Shri Shrikant Shiwadkar and Shri Jayant Shiwadkar were in complete knowledge of the things in relation to clearance of these goods without payment of duty. These goods which have been cleared without payment of duty are liable for confiscation and hence penalties under Rule 2009A is justifiable and cannot be faulted with. It is also not in dispute that the no appeal against this order dated 09.01.2002 was filed by the revenue and other co-noticee in the show cause notice i.e. Shri Jayant Shirwadkar and Mrs H S Shirwadkar. In result the proceedings against these two co-noticees have become final and cannot be reopened by the Commissioner in de-novo proceedings as per the order of tribunal remanding the matter back to original authority in the appeals filed by M/s UCSSPL and Shri Shrikant Shirwadkar. Also in absence of the appeal by revenue against this order the order has acquired finality and Commissioner cannot have passed any order beyond the order passed by his predecessor. In view of this fact, the Commissioner order imposing penalty on Shri Jayant Shirwadkar cannot be sustained and the penalty imposed on Shri Shrikant Shirwadkar cannot be in excess of the penalty imposed by this order. Appeal filed by the Appellant 1 against the imposition of penalty under Rule 173 Q (1) is partly allowed to the extent of restricting the penalty imposed under this Rule to Rs 1,80,000/- - Appeal filed by Shri Jayant Shirwadkar (Appellant 2) against the penalty imposed by the Commissioner in this remand proceedings needs to be allowed - the appeal filed by Shri Shrikant Shirwadkar (Appellant 3) against penalty imposed under Rule 209A also is allowed partly restricting the penalty imposed under Rule 209A on him to Rs 50,000/-. Appeal by the Appellant 1 is partly allowed modifying the impugned order to the extent of reducing the penalty imposed under Rule 173 Q (1) to Rs 1,80,000/- and setting aside the impugned order to the extent it relates to confiscation of land, building, plant machinery, material or other belonging of M/s UCSSPL used in connection with the production, storage, removal or disposal of the goods - appeal allowed in part.
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CST, VAT & Sales Tax
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2022 (10) TMI 92
Maintainability of petition - availability of alternative remedy - submission of the learned counsel for the appellant is that though the appellant had merely asked for adjournment, the learned Single Judge has dismissed the Writ Petition by giving liberty to the appellant to workout the remedy - HELD THAT:- There are no merits in the present Writ Appeal. It is noticed that the time granted by the learned Single Judge for filing the appeal against the orders of the respondent vide impugned order dated 23.06.2022 while dismissing the Writ Petition, has expired. Therefore, while dismissing this Writ Appeal, the period granted by the learned Single Judge for filing the appeal is further extended by another two weeks from the date of receipt of a copy of this order. Appeal dismissed.
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2022 (10) TMI 91
Exemption under Section 5(3) of the Central Sales Tax Act, 1956 - sale made to the merchant exporter - specific case of the petitioner is that the impugned order passed by the Appellate Tribunal is erroneous inasmuch as it has not considered the fact that M.G. Plain Kraft Paper supplied by the petitioner to the merchant exporter, which was converted as Parcel Leaf did not undergo any change. HELD THAT:- The Law on the subject is settled in terms of the decision of the Hon'ble Supreme Court in STATE OF KARNATAKA VERSUS AZAD COACH BUILDERS PVT. LTD. AND ANOTHER [ 2010 (9) TMI 879 - SUPREME COURT] which has been also followed by this court in three decisions, referred supra. Further, on perusing the records, particularly the commercial invoice raised by the petitioner on the merchant exporter and the purchase order of the foreign buyer from Kualalampur, Malaysia on the merchant exporter and the commercial invoice raised by the merchant exporter on the foreign buyer indicate that, what has been sold by the petitioner is not what has been exported by the petitioner. What the merchant exporter has exported is Poly coated with LDPE Kraft Paper in Parcel Leaf size. There is no value addition in the price declared in the commercial invoice of the merchant exporter. On the other hand, what has been exported by the merchant exporter is, much below the cost on which the petitioner has sold - That apart, Form 'H' which has been filed by the petitioner also indicates that it was valid up to 31.03.1998 and was re-validated up to 31.03.2001. The commercial invoice of the petitioner is dated 28.01.2002 which comes in the next Assessment Year. The writ petition is dismissed.
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2022 (10) TMI 90
Validity of assessment order - filing of return of income indicating the total taxable turnover and paid output tax after adjusting the Input Tax Credit - HELD THAT:- The appellant appeared before the respondent and submitted a detailed reply along with documentary evidence. Without properly considering the same, the respondent passed the fresh assessment order dated 25.01.2022, on a different footing that the business carried by the assessee is a typical example of bill trading activity where there is no actual movement of goods at all proved by way of payment of transportation charges and loading/ unloading charges. The said order of assessment was questioned by the appellant by filing WP.No.9659 of 2022. Though the appellant / assessee raised very many grounds assailing the orders impugned in this writ appeal as well as in the writ petition, the learned counsel for the appellant submitted that in order to show their bona fide , the appellant, without prejudice to their right, has paid a sum of Rs.40 lakhs by way of demand draft dated 25.08.2022 bearing No. 370531 drawn on Yes Bank Limited, Mumbai, in favour of the Assistant Commissioner (ST) (FAC), Thiruvottiyur Assessment Circle, which was also received and acknowledged by the respondent - Conceding the payment of Rs.40,00,000/- made by the appellant / assessee, the learned Government Advocate (Taxes) appearing for the respondent submitted that the respondent is now inclined to grant one more opportunity to the appellant to produce the available documentary evidence to substantiate their claim and thereafter, pass orders, on merits. This court, without going into the merits of the orders impugned herein as well as in the writ petition, sets aside the same and remands the matter to the respondent for fresh consideration. The appellant is directed to produce all the required documents to the respondent / assessing officer within a period of four weeks from the date of receipt of a copy of this judgment - On receipt of the documents, the respondent shall consider the same and pass appropriate orders, on merits and in accordance with law, after affording an opportunity of being heard to the appellant, as expeditiously as possible. Appeal disposed off.
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Indian Laws
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2022 (10) TMI 89
Appointment of arbitrators to resolve the dispute between the parties - preliminary inquiry or inquiry on whether the dispute is arbitrable or not, ws not held - Section 11(6) of the Arbitration and Conciliation Act, 1996 - HELD THAT:- On a bare reading of Clause 36 of the Agreement, it clearly stipulates that in the event of any dispute as mentioned in Clauses 3, 6 and 9, other party shall have a right to get the Agreement specifically enforced through the appropriate court of law - with respect to any dispute as mentioned in Clauses 3, 6 9, such disputes are not arbitrable at all. It cannot be disputed that both the parties are governed by the Addendum Agreement dated 19.04.2011. In the recent decision in the case of Vidya Drolia [ 2020 (12) TMI 1227 - SUPREME COURT ], which, as such, is post insertion of Section 11(6A) of the Arbitration Act, it is observed and held that the issue of nonarbitrability of a dispute is basic for arbitration as it relates to the very jurisdiction of the Arbitral Tribunal. An Arbitral Tribunal may lack jurisdiction for several reasons and nonarbitrability has multiple meanings. Considering Clauses 36 and 37 of the Agreement and when a specific plea was taken that the dispute falls within Clause 36 and not under Clause 37 and therefore, the dispute is not arbitrable, the High Court was at least required to hold a primary inquiry/review and prima facie come to conclusion on whether the dispute falls under Clause 36 or not and whether the dispute is arbitrable or not. Without holding such primary inquiry and despite having observed that a party does have a right to seek enforcement of agreement before the Court of law as per Clause 36, thereafter, has appointed the arbitrators by solely observing that the same does not bar settlement of disputes through Arbitration and Conciliation Act, 1996. The matter is remitted to the High Court to decide the application under Section 11(5) and (6) of the Arbitration Act afresh and to pass an appropriate order after holding a preliminary inquiry/review on whether the dispute is arbitrable or not and/or whether the dispute falls within Clause 36 of the Addendum Agreement or not - Appeal allowed.
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2022 (10) TMI 88
Maintainability of petition - rectification of mistake - error apparent on the face of record or not - HELD THAT:- There is no error apparent on the face of the record, warranting reconsideration of the order(s) impugned. The Review Petitions are, accordingly, dismissed.
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