Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 7, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Erroneous orders of GST officers - hese acts/omissions of Respondents’ officers is adding to the already overburdened dockets of the Court. Valuable judicial time is wasted because such unacceptable orders are being passed by Respondents’ officers. The officers do not seem to understand or appreciate the hardship that is caused to the general public. - Cost of Rs. 10000/- imposed on GST officer. - HC
Income Tax
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Undisclosed income of the assessee - Unexplained NRI gifts - onus to prove - Had the appellant given a convincing and believable explanation / reply to the respondent, the question of charging additional tax would not have arisen. That apart, no gifts would be extended to a person after receipt of commission by the donors and the exchange of gifts must be warmhearted and not out of compulsion or demand. - HC
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Exemption u/s 11 - trustees have used property then trust - violation of provision of Section 13(1)(c) and 13 (1)(d) - The residential premises of the assessee trust are applied for the benefit of the specified persons. Therefore, the learned Assessing Officer is direct to determine the part of such income or property of the trust on which it loses the exemption. - AT
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Exemption u/s 11 - spending money by the trust outside India without the approval of CBDT - whether the Ld. CIT (A) was correct in holding that spending by the trust outside India without the approval of the CBDT u/s 11(1 )(c) of the Act is permissible - CIT(A) rightly granted relief to the assessee- AT
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Revision u/s 263 - non-deduction of TDS on freight - failure to furnish Form 26Q - A perusal of the file of the ld. Pr. CIT reveals an “Office Note” appended to the assessment order - The same unequivocally confirms that no inquiry on the aspect raised by the ld. Pr. CIT, i.e., the cumulative satisfaction of the conditions of ss. 194C(6) & 194C(7), as against s. 194C(6) alone, qua which only the AO has limited his inquiry and issued his finding, had been made in assessment. - revision order sustained - AT
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Penalty u/s 271D - contravention of provisions of 269SS - Scope of 'reasonable cause' used in Section 273B - Even though transactions of one party had been settled by the other party by way of assignment of receivables / payables or for any other reason as detailed supra, we find that all the transactions have been ultimately settled for the difference amount by account payee cheques only. - No penalty - AT
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Scope of appeal before CIT(A) after revision order u/s 263 - Since, pending proceedings before the Ld.CIT(A) is with reference to additions made in pursuant to directions of the PCIT, in our considered view, the assessee can only challenge additions made by the AO in pursuant to directions of the PCIT in 263 proceedings on merits, but the assessee cannot question the legality or otherwise of assessment order passed by the AO u/s.143(3) r.w.s.153C of the Act, in pursuant to search action u/s.132 of the Act. - AT
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TDS u/s 195 - section 195 itself is quite explicit in its language while providing withholding of tax in respect of any payment, which is chargeable to tax in India. Since, the management fee paid by assessee is not chargeable to tax in India in terms with Article 12(4) of India-USA DTAA, as held by the Co-ordinate Bench in case of the payee, the assessee was not required to deduct tax at source while making such payment. - AT
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Revision u/s 263 by CIT - profit attribution of a fixed place PE and the DAPE - Erroneous but not prejudicial to revenue order - Even if that computation of profit attribution, on the basis of the two taxpayer approach, is erroneous, in view of Hon’ble jurisdictional High Court decision, it cannot be said to be prejudicial to the interest of the revenue unless there is a categorical finding that the payment to the dependent agent is not an arm’s length price vis-à-vis functions performed, assets employed and risks assumed by the dependent agent. - AT
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Revision u/s 263 by CIT - limited scrutiny assessment - The AO ought to have examined the same to go into the root of these deposits whereas in the instant case, the AO has not questioned the information supplied by the assessee with regard to the source of cash deposits into the safe custody account and has simply accepted those details without further enquiry. - Revision order sustained - AT
Customs
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Confiscation - redemption fine - penalty - import of Carnet - goods cannot be re-exported within stipulated time - the goods were required to be re-exported on 21.12.2019. By this date there was no COVID situation in India - There are no infirmity in the order directing confiscation of these goods giving an option of paying the redemption fine - AT
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Pre-deposit - The amounts deposited by the other entities cannot be reckoned towards the pre-deposit by the appellant herein. Such amounts can be reckoned towards pre-deposit in appeals, if any, by such entities and if they had not filed any appeals, towards their liabilities of duty or penalty as per the order of the lower authority. - Tri
Indian Laws
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Dishonor of Cheque - discharge of legal liability or not - delaying tactics - Whether the cheque, in question, had been issued as a security cheque or was a blank cheque or whether the filing of the complaint was a pressure tactic or not etc. are not matters to be examined by the Court while adjudicating upon an application under Section 143-A of the Act. - HC
IBC
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Right to claim over property occupied by the Corporate Debtor - Even though the object behind imposing moratorium under section 14 of IB Code, is to prevent depletion of a corporate debtor's assets, in our considered view the same cannot be extended to the properties which are not in rightful possession of the corporate debtor as any such extension to the properties which are not in the rightful possession of the corporate debtor results in unjust enrichment by the corporate debtor, under the guise of 'maximisation' at the cost of the lawful owner of the property. - Tri
Service Tax
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Refund of service tax paid - delay in filing refund claim - time limitation - it is found that the appellant was confused in so far as they believed that the refund is to be filed on quarterly basis and therefore, they counted the delay on the basis of the last date of the quarter. If the last date of filing the refund is taken as the end of the quarter then the refund claims have been filed in time. There is a reasonable cause and in this circumstances the discretion are in favor of the appellant. - AT
Case Laws:
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GST
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2022 (10) TMI 181
Maintainability of petition - appealable order or not - Section 107 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Since the respondent has already recovered more than 10% of the amount, this petition may be disposed of by permitting the petitioner to file an appeal before the Competent Appellate Authority along with and appropriate application for considering the aforesaid factual aspect and if, the Appellate Authority comes to the conclusion that requirement of sub-sections 6 and 7 of Section 107 are complied with, the Competent Authority may pass appropriate order for refund of the remaining amount which is more than 10%. The petition is disposed of by reserving liberty to the petitioner to file the appeal along with appropriate application.
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2022 (10) TMI 180
Cancellation of registration of petitioner - appeal has been dismissed on the ground of same being time-barred - HELD THAT:- It cannot be denied that the petitioners herein would not be able to continue with their business in absence of GST registration and thus, would be deprived of their livelihood which amounts to violation of right to life and liberty as enshrined in Article 21 of the Constitution of India. Both the petitioners are given liberty to file appeal against the cancellation of their GST registration to the competent authority within ten days from today. Upon such appeals being filed, the same shall be considered and decided on all aspects in accordance with law excluding the bar of limitation in preferring the appeal by the petitioners - Petition disposed off.
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2022 (10) TMI 179
Refund of CGST - time limit specified for computing of period of limitation in filling the refund application - Notification dated 5.7.2022 bearing No. 13/2022 - section 168A of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The competent authority of the respondents is directed to process in accordance with law the claim of refund of the petitioners in each of the captioned petitions treating it within time and grant refund with statutory interest, if the petitioners are found eligible. The exercise shall be completed within a period of 12 weeks from the date of receipt of copy of this order. Petition disposed off.
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2022 (10) TMI 178
Cancellation of registration of petitioner - petitioners have missed the bus in regard to several opportunities that were extended to them post-cancellation of the registrations by way of Amnesty Schemes - TNGST Act - HELD THAT:- Identical issue decided in the case M. MALLIKA MAHAL, REPRESENTED BY ITS PROPRIETOR, MANTHIRAM, S/O. SUNMUGAVEL VERSUS THE COMMISSIONER OF CENTRAL GST AND CENTRAL EXCISE, THE DEPUTY COMMISSIONER, GST-APPEAL, CHENNAI-II, THE ASSISTANT COMMISSIONER, CIRCLE OFFICER, (ST AND GST) [ 2022 (9) TMI 1106 - MADRAS HIGH COURT ] where it was held that The petitioners are permitted to file their returns for the period prior to the cancellation of registration, if such returns have not been already filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, if it has not been already paid. Since all learned counsels for the petitioners and the respondents concur on the position that the above order will be applicable on all fours in the present writ petitions, the same order is taken to be passed in these matters as well. Petition allowed.
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2022 (10) TMI 177
Erroneous orders of GST officers - Insufficient Time limit for filing reply to notice issued u/s 73 of the Maharashtra Goods and Services Tax Act, 2017 - HELD THAT:- The order is erroneous because in the show-cause notice only 7 days was given to reply to the notice and on the 8th day the impugned order came to be passed. Therefore, the question of not paying within 30 days of the issue of the notice will not arise. - These acts/omissions of Respondents officers is adding to the already overburdened dockets of the Court. Valuable judicial time is wasted because such unacceptable orders are being passed by Respondents officers. The officers do not seem to understand or appreciate the hardship that is caused to the general public. In this case, Petitioner could afford (we have assumed) to spend on a lawyer and approach this Court but for every Petitioner, we would hazard a guess, atleast ten would not be able to afford a lawyer and approach the Court and their registrations may get cancelled by the very same officers who have passed such patently illegal orders. Cost of Rs. 10000/- imposed on GST officer.
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2022 (10) TMI 176
Un-uniform rate of GST - hiring of services for connected Worker Project under DRIVE Initiative, Assam - tender notice fails to specify a uniform GST rate applicable to all bidders for the services - HELD THAT:- After serious consideration of the rival submissions and on balancing the equities, this Court is of the opinion that interest of justice as well as public interest would be served if an interim order is passed at this stage. Accordingly, it is provided that no further action be taken by the respondent nos. 1 2 OIL after declaration of the respondent no. 3 as the L-1 till the returnable date. Since, the work is of public interest, an endeavor would be made to dispose of the writ petition on the returnable date, on which date, the learned counsel representing the OIL is directed to produce the records. List this case after 4(four) weeks.
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2022 (10) TMI 175
Jurisdiction - whether the assessment should have been undertaken by the Central Government Authorities or State Government Revenue Authorities? - HELD THAT:- Issue notice for 12th May, 2022. As an interim measure, subject to the Petitioner depositing a sum of Rs.65.00 lakhs on or before 31st March, 2022, no coercive steps shall be taken to recover the remaining demand.
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2022 (10) TMI 174
Profiteering - construction service - it is alleged that Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in the price - contravention of Section 171 of the CGST Act, 2017 - Interest - Penalty - HELD THAT:- It is clear from the plain reading of Section 171 (1) that it deals with two situations:- one relating to the passing on the benefit of reduction in the rate of tax and the second on the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the DGAP's Report that there has been no reduction in the rate of tax in the post-GST period; hence the only issue to be examined is whether there was any net benefit of ITC with the introduction of GST. On this issue, it has been revealed from the DGAP's Report that the ITC as a percentage of the turnover that was available to the Respondent during the pre-GST period (April, 2016 to June, 2017) was 0.76% and during the post-GST period (July-2017 to October-2020). it was 9.13% for the Project SKA Green Arch - the DGAP has calculated the amount of ITC benefit to be passed on to all the flat buyers as Rs. 4,75,87,468/- for the Project SKA Green Arch , the details of which are mentioned in Annexure-24 of the Report. The Authority finds no reason to differ from the above-detailed computation of profiteering in the DGAP's Report or the methodology adopted and hence, the Authority determines the profiteered amount for the period from 01.07.2017 to 31.10 2020 in the instant case, as Rs. 4,75,87,468/- for the Project SKA Green Arch . This Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from the buyers of the flats commensurate with the benefit of ITC received by him. Interest - HELD THAT:- The Authority finds that the Respondent has profiteered by Rs. 4,75,87,468/- for the Project SKA Green Arch during the period of investigation i.e. 01.07.2017 to 31.10.2020. The amount that has been profiteered by the Respondent from his home buyers/customers/recipients of supply in the above said Project shall be refunded by him, along with interest @18% thereon, from the date when the above amount was profiteered by him till the date of such payment, under the provisions of Rule 133 (3) (b) of the CGST Rules, 2017. Penalty - HELD THAT:- The Respondent has denied the benefit of ITC to the customers/flat buyers/recipients in his Project SKA Green Arch in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has committed an offence under Section 171 (3A) - This Authority finds that Section 171 (3A) of the CGST Act, 2017 has been inserted in the CGST Act, 2017 vide Section 112 of the Finance Act, 2019, and the same became operational w.e.f. 01.01.2020. As the period of investigation was 01.07.2017 to 31 10.2020. Therefore, the Authority finds that the Respondent is liable for imposition of penalty under the provisions of the above Section for the amount profiteered from 01.01.2020 onwards. Accordingly, notice be issued to him to explain why penalty should not be imposed on him.
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Income Tax
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2022 (10) TMI 173
Estimation of income - Bogus purchases - HELD THAT:- Transaction was not verifiable only the income component, could be taxed and not the entire transaction amount. It was also held that it was undisputed that the sale proceeds of the goods had been duly accounted for in the books and offered to tax, hence, the entire purchase amount could not have been added in the present case and that with a view to plug any revenue leakage in the aforementioned circumstances, disallowance of @12.5% was held to be reasonable to safeguard the interest of revenue. As confirmed the addition to the extent of 12.5% of the alleged purchases - The order of CIT (Appeals) was challenged before the Tribunal vide its order dated 03rd May, 2017, dismissed the same. It was held that without purchasing materials and goods, it would not have been possible on the part of the assessee to execute the contract work with the MCGM, which is a Government Authority. Also held that the A.O. had not disputed the turnover of the contract work executed by the assessee and that unless the assessee procured the materials and goods, if not from the declared sources but from some other sources, it would not be possible on the part of the assessee to execute work awarded by MCGM. The Tribunal, therefore, held that the entire purchase made by the assessee could not be added back as income, but only proft element embedded therein, be treated as income of the assessee.
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2022 (10) TMI 172
Undisclosed income of the assessee - Unexplained NRI gifts - onus to prove - search conducted at assessee residence under Section 132 - ITAT concluded NRI gifts were not genuine and confirming the addition - HELD THAT:- It is no doubt true that only through search, the evidence has been collected by the respondent and the Assessee had not voluntarily disclosed on his own volition about the receipt of gifts from donors. The plea raised by the appellant that the nature of payment with regard to gifts was established through affidavits filed by donors and therefore, duty is cast upon the respondent to prove the onus, cannot be accepted for the simple reason that the Assessee had received gifts from 29 persons hailing from Kerala and there was no acceptable explanation as to the nature of relationship he had with those persons in the course of business transaction. Had the appellant given a convincing and believable explanation / reply to the respondent, the question of charging additional tax would not have arisen. That apart, no gifts would be extended to a person after receipt of commission by the donors and the exchange of gifts must be warmhearted and not out of compulsion or demand. The term 'gift' denotes any sum of money received without consideration can be termed as monetary gift , Specified movable properties received without consideration can be termed as gift of movable property , Specified movable properties received at a reduced price (i.e. for inadequate consideration), can be termed as movable property received for less than its fair market value , Immovable properties received without consideration can be termed as gift of immovable property , Immovable properties acquired at a reduced price (i.e. for inadequate consideration) can be termed as immovable property received for less than its stamp duty value . The case of the appellant / assessee regarding receipt of gifts does not fall in anyone of the category mentioned above and as such, the burden is automatically shifted to the assessee to rebut the same, as held by the Supreme Court in the case of CIT vs. P.Mohanakala [ 2007 (5) TMI 192 - SUPREME COURT] which was relied upon by the respondent before the Tribunal. That apart, as per the exact dictionary meaning of the word 'gift' is, something voluntarily transferred by one person to another without compensation . A literal meaning of 'commission' is, 'money that one gets for selling something'. On enquiry with two donors, namely, P.I.Joy and David Mathew, by the respondent, the former had deposed about the arrangement of gifts to the assessee on receipt of commission, whereas the latter had stated that no gift was proffered by him to the assessee. Thus, it is very obvious that the purported gifts received by the assessee are not at all gifts in its real sense. Hence, we are of the view that the order of the Tribunal is perfectly valid and is liable to be upheld - Decided against assessee.
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2022 (10) TMI 171
Penalty levied u/s 271AA - assessee company had not kept and maintained the information and documents as required by Sub-section (1) or subsection (2) of section 92D - AO is also influenced by the fact that the assessee has entered into international transactions during the year under consideration - HELD THAT:- There is no dispute that the assessee has maintained requisite documentation in respect of its reported international transaction of FTS and FIS and has also furnished details of various documentations maintained by it. We further find that the Assessing Officer has not specified the documents/information which, in his view, were required to be kept and maintained u/s 92D(1) and 92D(2)of the Act r.w.r 10D of the Rules but were not kept and maintained by the assessee. Coming to the decision of this Tribunal in Assessment Year 2006- 07 and 2008-09 [ 2020 (10) TMI 615 - ITAT DELHI] we find that the entire basis for deciding the issue in favour of the Revenue relates to the observations given in respect of independent accountant s report/documents for specified domestic transactions whereas in the present assessment, there is not even a whisper of any specified domestic transactions. Therefore, the reference to the order of this Tribunal in earlier Assessment Years by the ld. DR would do no good to the Revenue, as the facts are totally different. - Decided against revenue.
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2022 (10) TMI 170
Disallowance under the head other current liabilities by invoking section 43B - as submitted assessee was not allowed due opportunity to explain its case before the AO as the assessee found that the disallowance has been made under intimation/order u/s 143(1) - HELD THAT:- We are of the considered view that from first appellate order, it is clearly discernible that the assessee in its written submissions before the CIT(A)/NFAC placed detailed submissions on the issue of impugned disallowance made by the AO on account of disallowance under the head Other current liabilities by invoking the provisions of section 43B of the Act, but, from a vigilant and careful reading of the first appellate order, we are unable to see any adjudication by the ld.CIT(A) on ground No.1 of the appellant. Therefore, agreeing with the contentions of the ld. Sr. DR, ground No.1 of the assessee as noted in Form No.35 is restored to the file of the CIT(A) for adjudication. Accordingly, ground No.1 of the assessee is allowed for statistical purposes. Delayed payment of employees contribution to ESI and PF - HELD THAT:-This issue is no more res integra. The Hon ble jurisdictional High Court of Delhi in various judgements including the recent judgement in the case of PCIT vs. TV Today Network Ltd. [ 2021 (8) TMI 26 - ITAT DELHI] held that as per the Memorandum to Finance Act, 2021, the amendment to section 36(1)(va) of the Act and section 43B of the Act will take effect from 1st April, 2021 and it cannot apply to previous assessment years. In the present case also, it is not in dispute that the assessee made payment of employer s contribution to ESI and PF before due date of filing the return u/s 139(1) of the Act and there is no dispute that the amount stands deposited before the filing of the return. So far as the applicability of amendment to section 36(1)(va) and section 43B is concerned, this issue is covered in favour of the assessee by the judgement of the Hon ble jurisdictional High Court of Delhi in the case of PCIT vs. TV Today Network Ltd. and various other judgements. Decided in favour of assessee.
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2022 (10) TMI 169
Exemption u/s 11 - violation of provision of Section 13(1)(c) and 13 (1)(d) - trustees have used property then trust - whether the trust looses exemption on whole of its income‟ or only that part of the amount covered under the violation - HELD THAT:- As the issue is squarely covered by the decision of various courts at least on the principle that the assessee trust looses the exemption only to the extent of violation of Section 13 and not on the whole of the income, The order of the learned CIT (A) cannot be found to be fault with and therefore, upheld to that extent. There is an amendment to the provisions by the finance act 2022 within for from 1-4-2023 which provides that a part of income is applied directly indirectly for the benefit of specified persons then only such part of income shall be excluded from the operations of provisions of Section 11 and 12 of the act and consequently it should be included in the total income of the trust. This It needs to be ascertained that on what portion of income assessee trust loses its exemption. The assessee has without prejudice submitted before the learned Assessing Officer which is also reproduced at page no.9 of the order of the learned CIT (A). It shows that the assessee submitted before the learned Assessing Officer that even if it is presumed that the trustees have used property then trust would be made liable for the income for relevant years to the extent of income that would be chargeable to tax - The assessee submitted that some portion of the premises was intermittently used by the Private Limited Company. Assessee has also stated that market value of compensation not charged is the above amounts. CIT (A) has categorically confirmed that M/s Ideen Furniture Pvt. Ltd. was occupying the 8th floor of the building of assessee‟s trust. Therefore, naturally the Provision of Section 13(1)(c) of the Act applies to this property. 10th Floor of the building was utilised by the Bujwal family as its Bunglow - Jt. Commissioner has held that complainant could not prove before him that 10th Floor is used as a residence by the Bujwal family beyond reasonable doubt . In the income tax proceedings the beyond reasonable doubt concept is unknown. Further the proceedings before the joint Charity Commissioner were altogether Under different provisions of the Bombay public trust act for the removal of the trustees. For the purpose of provisions of Section 11, 12 and 13 it needs to be verified whether the property has been used directly or indirectly for the benefit of the specified persons or not. Therefore the issue needs to be looked at from the perspective of the income tax act. Therefore, the learned AO should make necessary enquiries. In view of this fact, the learned Assessing Officer should make an independent enquiry in accordance with the law that whether the 10th floor has been utilized by the trustees for their direct or indirect benefit. If, on enquiry the learned assessing officer finds that the property is used for the director indirect benefit of the specified persons, naturally on this property also the provisions of Section 13 (1) (C) will apply. Provisions of Section 13(1)(c) (ii) of the Act clearly says that if any part of such income or property of the trust during the previous year used or applied directly or indirectly for the benefit of the specified persons then such part of income cannot be said to be applied for the charitable purposes. In the present case, the property at 8th floor and 10th floor(subject to the outcome of the enquiries of the learned assessing officer) of the building of the assessee trust are applied for the benefit of the specified persons. Therefore, the learned Assessing Officer is also direct to determine the part of such income or property of the trust on which it loses the exemption. The learned Assessing Officer may do so after giving proper opportunity of hearing to the assessee. AO is further directed to examine Whether such income is also chargeable to tax in the hands of such specified persons with respect to the provisions of Section 56 (2) (vii) of the act which was operating from 1 October 2009 till 31 March 2017 or Under Section 28 (iv) of the act.
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2022 (10) TMI 168
Assessment of trust - bringing to tax corpus donation as alleged income of the appellant trust - assessee is not enjoying registration under section 12A - HELD THAT:- Admittedly, the assessee is not enjoying registration under section 12A for the A.Y. 2014-15 and the assessee was granted registration by CIT(E) w.e.f. A.Y. 2015-16 only. From the assessment order it is clearly discernible that the A.O. has not doubted or disputed that the impugned amount pertains to corpus funds received by the assessee during the relevant financial period. This fact was also not disputed by the Ld. CIT(E). But the authorities below have treated the corpus donation as taxable in the hands of assessee for want of registration under section 12A for the A.Y. 2014-15. As has been held in the case of ITO vs., Serum Institute of India Research Foundation [ 2018 (2) TMI 103 - ITAT PUNE] , that even if the assessee is not granted registration under section 12A of the I.T. Act, 1961 for the relevant period, then also corpus funds cannot be taxed in the hands of assessee in absence of such registration. Therefore, Allow the claim of assessee and direct the A.O. to delete the addition. Accordingly, appeal of the assessee is allowed.
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2022 (10) TMI 167
Exemption u/s 11 - spending money by the trust outside India without the approval of CBDT - whether the Ld. CIT (A) was correct in holding that spending by the trust outside India without the approval of the CBDT u/s 11(1 )(c) of the Act is permissible, despite that the facts and ration of relied upon cases were not directly related to application of section 11 (1 )(c) of the Act - HELD THAT:- CIT(A) after considering the facts and circumstances of the case rightly granted relief to the assessee by following the rule of consistency as the Ld. CIT(A) -40 New Delhi had accepted appellant s grounds for assessment years 2012-13, 2013-14 and 2014-15 [ 2022 (9) TMI 1186 - ITAT DELHI] i.e. subsequent assessment years on the identical facts and circumstances. Therefore the Ld. CIT(A) was also right in following the order and granting relief to the assessee. Appeal of the Revenue is dismissed.
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2022 (10) TMI 166
Revision u/s 263 - As per CIT, failure on the part of the AO to examine the assessee s claim qua freight, allowed in full despite the fact that he had deducted tax at source only on payments partly resulting in short deduction of tax at source - HELD THAT:- The assessee before the AO admits to the non-compliance of sec. 194C(7), even as he explains the same as due to the non-availability of the prescribed form; the erstwhile Form 15J u/r. 29D having been discontinued w.e.f. 01/10/2009. AO accepts it, i.e., inferably, even as he did not, as afore-noted, issued any finding in the matter. The Pr. CIT finds the same unacceptable due to, even so, the failure to furnish Form 26Q, failing which the benefit of the changed law could not be extended, as had been per the impugned assessment. In our considered view, the arguments advanced, both for and against, by either side, are untenable - Assessee had indeed received the stated declaration qua the ownership of ten (or less) goods carriages from the contractor is clearly a false statement, and if even regarded as true despite there being no reason in law for obtaining it, to no consequence, as indeed its subsequent filing with the AO, who, without stating any reason for the same, found it acceptable . The only obligation on the assessee was to furnish the prescribed particulars to the prescribed income-tax authority within the prescribed time, and which the assessee claims as non-prescribed and the ld. Pr. CIT as F/26Q, both of which we find as incorrect. There is no change in the prescribed form, i.e., F/15-J. Form 26Q, on the other hand, is a statement in respect of tax deducted at source (as against not deducted u/s. 194C), obliged to filed u/s. 200, and which continues to obtain both prior and subsequent to 01/10/2009. There is no interface between the two. Thus, while the assessee is clearly in the wrong to say that no Form stood prescribed for him to have complied therewith, with we having found him to have made a false statement qua receipt of declaration/s from the contractor, as required u/s. 194C(6), which assumes significance as it is only on receipt thereof that the obligation u/s. 194C(7) comes into play, and the CIT rightly finds it as incorrect, yet quotes the prescribed Form, which the assessee ought to have therefore filed, wrongly, which rather is in respect of tax deducted at source as against tax not deducted at source. We, accordingly, while upholding the finding by the ld. Pr. CIT as to the non-compliance by the assessee of sec. 194C(7), modify his reference to Form 26Q, to Form 15-J. We have considered it relevant to specify the correct Form despite the admission by the assessee of non-compliance of s. 194C(7) as, in the absence of a prescribed Form, containing the prescribed particulars, along with the prescription as to time by which, and authority before whom, it is to furnished, the same could not possibly be complied with. We may consider the assessee s claim before us of s. 194C(7) being independent of s. 194C(6), so that even a non-compliance of the former would not imply the assessee being in default for non-deduction of tax at source. Toward this, we have firstly found the claim of compliance of s. 194C(6), as it stood at the relevant time, to be false. Two, the argument of compliance of s. 194C(7) as not relevant for the purpose, is, before us, misplaced. The ld. Pr. CIT has set aside the assessment for proper consideration and a decision in accordance with law, so that the proper forum for the said argument by the assessee would be before the assessing authority in the set aside proceedings. It would be a different matter, we clarify, if the revisionary authority had, upon issuing a definite finding in the matter, directed the AO to, for that reason, effect a disallowance u/s. 40(a)(ia). Our scope in the instant proceedings is limited to the validity or otherwise of the impugned order qua each of the separate reasons on which the assessment is found deficient for want of proper inquiry/verification, to find it as valid qua both, also specifying the error therein. A perusal of the file of the ld. Pr. CIT reveals an Office Note appended to the assessment order - The same unequivocally confirms that no inquiry on the aspect raised by the ld. Pr. CIT, i.e., the cumulative satisfaction of the conditions of ss. 194C(6) 194C(7), as against s. 194C(6) alone, qua which only the AO has limited his inquiry and issued his finding, had been made in assessment. The same simultaneously confirms that the sum of Rs. 107.15 lacs on which TDS stands deducted by the assessee pertained to the period 01/10/2009 to 31/3/2010, directed for verification per para 5.5 of this order. The same is unwarranted under the circumstances, and the AO shall in the set aside proceedings limit his adjudication to that stated at para 5.8 of this order, and which, in effect, is the legal consequence of the non-furnishing of Form 15-J, as required u/s. 194C(7). Assessee s appeal is dismissed.
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2022 (10) TMI 165
Penalty u/s 271D - contravention of provisions of 269SS - Scope of 'reasonable cause' used in Section 273B - CIT-A deleted Penalty levy - HELD THAT:- We find that the CIT(A) had categorically stated in para 6.8.6 of his order that the nature of transactions carried out by the assessee through journal entries in the instant case are not in the form of loan or advance which has been received or repaid and that they are acts of assigning of receivables or extinguishment of mutual liability of paying / receiving the amounts by the assessee and its sister concerns and its sister concerns to third parties. We find that this categorical finding of the ld. CIT(A) has not even been contested by the revenue before us as is evident from the grounds reproduced at the beginning of this order. CIT(A) had given relief to the assessee even on the aspect of reasonable cause by stating that on without prejudice basis, even if the transactions of the assessee fall within the mischief of provisions of section 269SS of the Act, there exists reasonable cause within the meaning of section 273B of the Act. The revenue had challenged the aspect of reasonable cause u/s 273B of the Act before us. Eventhough transactions of one party had been settled by the other party by way of assignment of receivables / payables or for any other reason as detailed supra, we find that all the transactions have been ultimately settled for the difference amount by account payee cheques only. It is not the case of the revenue that the balance amounts lying in each account i.e after adjustment of receivables with payables, were settled by one party to the other party otherwise than by account payee cheques or account payee drafts. Hence it could be safely concluded that there is absolutely no violation of provisions of section 269SS and 269T of the Act in any of the aforesaid transactions carried out by the assessee. Accordingly, the grounds raised by the revenue are dismissed. Penalty u/s 271E - assessee company had carried out certain transactions in contravention of provisions of section 269T - CIT-A deleted Penalty levy - HELD THAT:- It is not in dispute that the loan instalment and interest payable to RFL were duly serviced by the assessee company i.e Macrotech Developers Ltd (Successor to Shreeniwas Cotton Mills Ltd) against the outstanding loan account. Even the said repayment of loans were made only by account payee cheques. Hence there is no contravention of provisions of section 269T of the Act as alleged by the ld. AO in the instant case. Accordingly, we hold that this case is no different from other cases that are before us in the present list. Assessee appeal allowed.
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2022 (10) TMI 164
Revision u/s 263 by CIT - Deduction under Section 57 - Assessee case selected for limited scrutiny for verification of Large deduction claimed under Section 57 - HELD THAT:- As regards the issue of payment of interest on borrowings and receipt on advances, we observe that the assessee attached a chart showing details of rate of interest paid and received. Besides, the assessee has brought to the notice of the AO that issue on hand was also raised in A.Y.2016-17 which was selected for limited scrutiny under CASS and after considering the facts of the case accepted his submission. Thus, after considering the entire facts in entirety and after application of mind, the AO accepted the assessee's explanation. Investment in immovable property - assessee submitted that Annexure 'B' of the tax audit report (which was submitted during the course of assessment proceedings) reflects investment in immoveable property as on 31.03.2016 and additions mainly on construction to the existing property except one new property purchased at K.K. Vihar Ajmer was made during the year. The balance sheet attached with the ROI reflects Housing loan from HDFC bank and payment of interest on housing loan reflects in capital account. Therefore, since entire facts are available on records, the AO did not require any further details particularly where the assessment is selected for limited scrutiny . It is a well settled position of law that if from the assessment records, it is evident that the Ld. AO has made due enquiries in response to which assessee has filed detailed submissions, then even if the assessment order does not discuss all aspects in detail with regards to claim of the assessee, it cannot be held that the order is erroneous and prejudicial to the interests of the Revenue. The above proposition has been upheld in the case of CIT v. Reliance Communication[ 2016 (4) TMI 173 - BOMBAY HIGH COURT] , Smt. Anupama Bharat Gupta [ 2021 (4) TMI 1000 - ITAT AHMEDABAD] , Goyal Private Family Specific Trust [ 1987 (10) TMI 43 - ALLAHABAD HIGH COURT] , CIT v. Mahendra Kumar Bansal [ 2007 (7) TMI 149 - HIGH COURT, ALLAHABAD] - We, thus, find no error in the order of Ld. AO so as to justify initiation of 263 proceedings by the Ld. Pr. CIT. The Ground of appeal raised by the assessee is thus allowed. Appeal of the assessee is allowed.
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2022 (10) TMI 163
Scope of appeal before CIT(A) after revision order u/s 263 - Revision u/s 263 AND Legality or otherwise of assessment order passed by the AO u/s.143(3) r.w.s.153C - Merging of two proceedings - Legality of assessment order passed by the AO and consequent additions made thereon in absence of incriminating material found as a result of search - additional grounds filed by the assessee challenging validity of assessment proceedings and consequent addition made thereon - HELD THAT:- The assessment proceedings in pursuant to search action u/s.132 of the Act, become final and reached finality. Further, the case has been subjected to 263 proceedings by the PCIT. The PCIT has taken up 263 proceedings on certain issues and set aside the assessment order passed by the AO u/s.143(3) r.w.s.153C of the Act, for the AYs 2003-04 to 2007-08 with a direction to AO to re-do the assessment on the issue questioned in the 263 proceedings. We do not know, whether the assessee has challenged 263 order passed by the PCIT or not. AO has passed consequential assessment order u/s.143(3) r.w.s.263 of the Act, for all assessment years and has made additions to the issues questioned by the PCIT in 263 proceedings. The assessee has challenged the order passed by the AO u/s.143(3) r.w.s.263 of the Act, before the First Appellate Authority and challenged various additions made by the AO and not challenged legality of assessment order passed by the AO. The Ld.CIT(A) dismissed the appeal filed by the assessee ex-parte for non-appearance. The assessee carried the matter in further appeal before the ITAT and the Tribunal [ 2016 (4) TMI 1431 - ITAT CHENNAI] set aside the appeals to the file of the Ld.CIT(A) with a direction to re-consider the issues. At this stage, in the second round of litigation, the assessee has filed petition for admission of additional grounds by taking a legal ground challenging validity of additions made by the AO in the assessment framed u/s.143(3) r.w.s.153C of the Act, on the ground that additions made by the AO does not have any reference to incriminating material found as a result of search. We are not going into the aspects whether additions made by the AO are supported by any incriminating material found as a result of search, or not, but we are only on the question whether the assessee can take a legal issue in this round of proceedings or not. In our considered view, the assessee cannot take this legal issue challenging validity of assessment proceedings and consequent additions made by the AO in absence of incriminating material found as a result of search, because, the present proceedings pertains to assessment order passed in pursuant to directions of the PCIT u/s.263 of the Act. Since, pending proceedings before the Ld.CIT(A) is with reference to additions made in pursuant to directions of the PCIT, in our considered view, the assessee can only challenge additions made by the AO in pursuant to directions of the PCIT in 263 proceedings on merits, but the assessee cannot question the legality or otherwise of assessment order passed by the AO u/s.143(3) r.w.s.153C of the Act, in pursuant to search action u/s.132 of the Act. Two proceedings are independent and different. The first proceedings of assessment order passed by the AO in pursuant to search action is altogether a different proceedings which has reached finality when the assessee does not challenge assessment order passed by the AO before the First Appellate Authority. The present proceedings pending before the First Appellate Authority, is in pursuant to directions of the PCIT u/s.263 of the Act, and is altogether a different proceedings and in this proceedings, the assessee cannot question the legality of assessment order passed in pursuant to search action u/s132 of the Act. Therefore, we are of the considered view that the Ld.CIT(A) has rightly rejected additional grounds filed by the assessee challenging validity of assessment proceedings and consequent addition made thereon. Hence, we are inclined to uphold the findings of the Ld.CIT(A) and dismiss the appeals filed by the assessee for the AYs 2003-04 to 2007-08. Appeals filed by the assessee are dismissed.
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2022 (10) TMI 162
Disallowance of business associate expenses - Appellant is engaged in share/broking business wherein it is normal business practice to have sub-brokers/business associates - HELD THAT:- The findings returned by the AO/CIT(A) are without any factual basis and are on based conjecture/surmise. The Appellant has claimed deduction for business associate expenses in the preceding assessment years, however, no disallowance has been made in respect of the same. It is admitted position there has been no change in the facts and circumstances as compared to preceding assessment years. Thus, in view of the aforesaid, we hold that the Appellant is entitled to claim deduction for business associate expenses having substantiated his claim by filing relevant documents/details before the authorities below. Accordingly, we reverse the decision of CIT(A) and delete the disallowance made by Assessing Officer. Ground No. 1 raised by the Appellant is allowed. Ad-hoc disallowance of certain expenses - Appellant had claimed deduction for Computer Expenses, General Charges, Motor Car Expenses, Staff Welfare Expenses, Printing Stationery Expenses, Telephone Expenses, and Travelling Conveyance Expenses - AO made ad-hoc disallowance at the rate of 25% which was reduced to 15% by the CIT(A) - HELD THAT:- We have considered the rival contentions and perused the material on record. Some ledgers relating to travelling expenses have been placed before us and the same are bulky. Even the tax auditor has expressed opinion that the possibility of some expenses being of personal nature being debited to the Profit Loss Account cannot be ruled out. We note that in the immediately preceding assessment year 2010-11, the assessing officer had, in similar facts and circumstances, adopted rate of 10% for making the disallowance. Accordingly, keeping in view the facts and circumstances of the present case we restrict the disallowance to 10% of the expenditure. - Decided partly in favour of assessee. Disallowance made u/s 14A - investment made in foreign subsidiary - HELD THAT:- We find merit in the contention advanced by the Learned Authorised Representative for Appellant that investment made in foreign subsidiary should be excluded while computing disallowance under Section 14A read with Rule 8D of the Rules since the dividend income of foreign subsidiaries is taxable in India and therefore, the Assessing Officer is directed accordingly. Assessing Officer is also directed to verify and consider only the investments yielding exempt income during the relevant previous year while computing disallowance under Section 14A read of the Act with Rule 8D of the Rules as held by the special bench of the Tribunal in the case of ACIT Vs. Vireet Investment (P.) Ltd[ 2017 (6) TMI 1124 - ITAT DELHI] . Disallowance of interest expenditure - HELD THAT:- Appellant had sufficient owned/interest free funds to make deposits as well as interest bearing funds, and therefore, as per the judgment of the Hon ble Bombay High Court in the case of Reliance Utilities Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] it can be presumed that the interest free deposits were made out of owned/interest free funds and therefore, disallowance under Section 36(1)(iii) of the Act was not warranted. As regards, the findings returned by the Tribunal in the case of Deena Asit Mehta [ 2018 (2) TMI 1987 - ITAT MUMBAI] are concerned; we note that the same were given after examining the leave license transaction from the perspective of the licensor and not from the perspective of licensee. In view of the aforesaid, we reverse the decision of CIT(A) on this issue and delete the addition made by the Assessing Officer. Ground raised by the Appellant is allowed.
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2022 (10) TMI 161
Penalty u/s 271(1)(c) - Defective notice u/s 274 - non-strike off of the irrelevant part in the notice - HELD THAT:- As could be seen from the above the Hon'ble Bombay High Court (Full Bench at Goa) in the case of Mr. Mohd. Farhan A. Shaikh v. ACIT [ 2021 (3) TMI 608 - BOMBAY HIGH COURT ] while dealing with the issue of non-strike off of the irrelevant part in the notice issued u/s.271(l)(c) of the Act, held that assessee must be informed of the grounds of the penalty proceedings only through statutory notice and an omnibus notice suffers from the vice of vagueness. As the notice u/s. 274 r.w.s. 271(l)(c) of the Act was issued without striking off the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notices were issued. Thus penalty notice issued u/s. 271(l)(c) of the Act by the Assessing Officer is bad in law and accordingly the penalty order passed u/s. 271(l)(c) of the Act for Assessment Year 2008-09 is quashed. Even on merits penalty under section 271(1)(c ) of the Act is not leviable since the addition made by the Assessing Officer is on account of ad-hoc estimation of net profit @ 8% on the un-reconciled turnover as per books and as per Form 26AS and the addition is only of Rs.98,863/-. Additions made on ad-hoc basis on estimation does not attract penalty under section 271(1)(c) of the Act as there is no conclusive proof of concealment of income or furnishing of inaccurate particulars of income. Therefore, even on merits penalty is liable to be deleted. Appeal of assessee allowed.
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2022 (10) TMI 160
Disallowance u/s 14A r.w. 8D - HELD THAT:- As assessee has not earned any exempt income which is not rebutted by the Revenue placing any cogent material on records. Assessee brought to our notice that the decision of the Co-ordinate Bench of the Tribunal rendered in the case of ACIT vs M/s. Hindustan EPC Company Ltd. [ 2022 (8) TMI 904 - ITAT DELHI] wherein decided issue in favour of assessee as held that the aforesaid Explanation cannot be presumed to be retrospective in operation. As a corollary, the law prevailing prior to the insertion of Explanation would continue to apply and shall not be guided by the Explanation being prospective. Late payment of employee s contribution as per the Provident Fund Act - HELD THAT:- We find that the Revenue has not brought any contrary material to rebut the finding of Ld.CIT(A). Since the issue is otherwise decided in favour of the assessee by the judgement of Hon ble Delhi High Court in the case of PCIT vs Pro Interactive Service (India) Pvt.Ltd. [ 2018 (9) TMI 2009 - DELHI HIGH COURT] held that legislative intent was/is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee s Provident Fund (EPD) and Employee s State Insurance Scheme (ESI) as deemed income of the employer under section 2(23)(x) - Appeal of the Revenue is dismissed.
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2022 (10) TMI 159
TDS u/s 195 - Disallowance u/s 40(a)(i) - amount was paid towards use of manpower of sister concern in accepting third party projects abroad - assessee objected to the proposed disallowance by stating that the amount paid is not taxable at the hands of the AE in India - whether assessee was required to deduct tax at source u/s 195 of the Act while paying management fee to its overseas AE i.e. Everest Global Inc.? - HELD THAT:- Undisputedly, assessee is availing such services from the AE from assessment year 2010-11 onwards. It is the case of the Revenue that the services rendered by the AE to the assessee are in the nature of managerial/technical/consultancy services, hence, will fall within the scope and ambit of FTS/FIS as per the provisions of domestic law as well as under the India-USA DTAA. Notably, while considering the taxability of the corresponding receipts made at the hands of the AE viz. Everest Global Inc. in assessment years 2010-11 to 2012-13, the Tribunal [ 2022 (4) TMI 1062 - ITAT DELHI] has held that they are not in the nature of FTS/FIS under Article 12(4) of the India-USA DTAA. The services received by the assessee are general managerial services, hence, do not qualify the test of technical/consultancy services to satisfy the definition of FIS under Article 12(4) of the Tax Treaty. Thus, considering the fact that while considering the nature and taxability of corresponding receipts at the hands of the payee, the Tribunal has held that the amount is not taxable in India, in our considered opinion, there is no legal obligation on the assessee to withhold tax at source under Section 195 of the Act while remitting the management fee to the AE. This is so, because, section 195 itself is quite explicit in its language while providing withholding of tax in respect of any payment, which is chargeable to tax in India. Since, the management fee paid by assessee is not chargeable to tax in India in terms with Article 12(4) of India-USA DTAA, as held by the Co-ordinate Bench in case of the payee, the assessee was not required to deduct tax at source while making such payment. Therefore, we hold that the disallowance made under Section 40(a)(i) of the Act in the assessment years under dispute are unsustainable, hence, deleted. Grounds are allowed.
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2022 (10) TMI 158
Disallowance of testing and coordination expenses - Disallowance of the expenditure primarily for the reason of non-deduction of tax at source - HELD THAT:- AO has made a passing reference to section 37(1) - Commissioner (Appeals) having found that the reasoning of the assessing officer, in so far as, it relates to non-deduction of tax at source is factually incorrect, proceeded to sustain a part of the disallowance by stating that they are not wholly and exclusively for the purpose of business. On a perusal of invoices placed before us, it is observed that assessee, indeed, has incurred the expenses for testing of the product. Therefore, the observation of Commissioner (Appeals) that the expenditure incurred is not wholly and exclusively for the purpose of business appears to be without verification of facts on record. In any case of the matter, it has been brought to our notice by the learned representative of the assessee, which has not been controverted by learned Departmental Representative, in the preceding assessment years, the revenue has never doubted the nature and character of the expenditure to be for the purpose of business. Accordingly, we delete the disallowance. Disallowance of management fee - Disallowance under dispute was made on the basis that assessee had not deducted tax at source. However, it is the claim of assessee that tax, in fact, was deducted at source and deposited to the government account during the year. Considering assessee s contention, we direct the assessing officer to verify assessee s claim by examining the relevant TDS challan and other material on record and delete the disallowance made if it is found that the assessee has deducted tax at source. Disallowance of depreciation on goodwill - As in earlier assessment years, we respectfully follow the decision of the coordinate Bench, as relying on Smifs Securities Ltd. [ 2012 (8) TMI 713 - SUPREME COURT] and allow assessee s claim. Accordingly, assessing officer is directed to delete the disallowance.
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2022 (10) TMI 157
Non-deposit of employee's share of ESI and EPF before the due date - Scope of amendments made through Finance Act, 2021 - HELD THAT:- Admittedly the assessee has deposited the impugned contributions to the PF/ ESI though after due date as prescribed under the relevant provisions of PF / ESI Act but within the time allowed u/s 43B i.e. up to the due date u/s 139(1) for filing of income. Regarding the amendments made through Finance Act, 2021 legislature itself has categorically stated that the amendments shall apply to the assessment year 2021-22 and subsequent assessment years. Therefore these amendments are not applicable to the assessment years preceding the assessment-year 2021-22 i.e. not applicable upto assessment-year 2020-21. Hon'ble Delhi High Court in Pr. CIT Vs. Pro Interactive India Pvt. Ltd [ 2018 (9) TMI 2009 - DELHI HIGH COURT] had re-affirmed the aforesaid findings while relying judgment in CIT Vs. AIMIL Ltd [ 2009 (12) TMI 38 - DELHI HIGH COURT] so the reliance by DR on judgment date 6/9/18 in CIT Vs. Bharat Hotels Ltd. [ 2018 (9) TMI 798 - DELHI HIGH COURT] cannot be sustained. In the light of the aforesaid the grounds raised stand decided in favour of the Assessee.
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2022 (10) TMI 156
Unexplained investment on the basis of search report in the case of AEZ group - Reliance on loose sheets - HELD THAT:- Department could not produce any corroborative evidence to show that the assessee had in fact made investment in the concerns of AEZ group. The evidences furnished by the assessee in the form of confirmation from the concerns of AEZ group that the assessee nor his family members never made any investment by paying cash or cheque were not at all examined by the Assessing Officer in spite of the assessee stating that no such investment had been made by the assessee. The only basis for making addition under section 69 of the Act in the hands of the assessee is the loose sheets said to have been seized in AEZ group. This alone cannot be the basis for treating such alleged investment as un-explained by the assessee especially when the assessee furnished evidences to show that he has never made such investment in group concerns of AEZ group. Thus we hold that the Assessing Officer erred in treating sum as un-explained investment in the hands of the assessee. The ground raised by the assessee is allowed.
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2022 (10) TMI 155
TP Adjustment - no conformity with the directions issued by the Hon ble DRP u/s 144C(5) - assessee pointed out that final order of assessment does not incorporate the directions of the DRP and was a verbatim repetition of the draft order of assessment HELD THAT:- It is an admitted position that the directions of DRP would result in the changes to the TP adjustment originally proposed by the TPO. AO in the final assessment order has retained the TP adjustment at the same figure as in draft assessment merely for the reason that the TPO has not passed the order giving effect to the directions of the DRP and considering the time limit to passing the final assessment order. This in our considered view would mean that the final assessment order passed by the AO is not in accordance with the directions of the DRP. As following the decision of the coordinate bench of the Tribunal in the case of Flextronics Technologies (India) Pvt. Ltd [ 2018 (12) TMI 1741 - ITAT BANGALORE ] we hold that the assessment framed in this case is quashed. We make it clear that, this order would not, in any way, stop the revenue from taking such steps as are available to it in law and the assessee also from contesting the action of the revenue in accordance with the law, if it so desires. It is ordered accordingly.
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2022 (10) TMI 154
Delayed remittance of the employees contribution to PF - Appellant had remitted the same before the due date for filing of return of income under section 139(1) - HELD THAT:- Bangalore Bench of the Tribunal in the case of M/s. ShakuntalaAgarbathi Company [ 2021 (10) TMI 1196 - ITAT BANGALORE] by following the dictum laid down by the Hon ble jurisdictional High Court in the case of EssaeTeraokaPvt. Ltd [ 2014 (3) TMI 386 - KARNATAKA HIGH COURT] had held that the assessee would be entitled to deduction of employees contribution to PF and ESI provided that the payments were made prior to the due date of filing of the return of income u/s 139(1) of the I.T.Act. It was further held by the ITAT that amendment by Finance Act, 2021, to section 36[1][va] and 43B of the Act is not clarificatory. Amended provisions of section 43B as well as 36(1)(va) of the I.T.Act are not applicable for the assessment years under consideration. By following the binding decision of the Hon ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd [ 2014 (3) TMI 386 - KARNATAKA HIGH COURT] the employees contribution paid by the assessee before the due date of filing of return of income u/s 139(1) of the Act is an allowable deduction. Accordingly, we decide this issue in favour of the assessee and the disallowance made by the Assessing Officer is deleted. Appeal filed by the assessee is allowed.
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2022 (10) TMI 153
Stay of demand - recovery of outstanding demand - HELD THAT:- Assessee will be put to great hardship if we do not grant a stay. The refund due to the assessee for the earlier years is adjusted against the outstanding demand for the relevant assessment years, which are subject matter of appeal before the Tribunal, that would also amount to recovery of outstanding demand as held in the case of Maruti Suzuki Ltd. [ 2011 (11) TMI 312 - DELHI HIGH COURT ] . Therefore, the outstanding demand arising out of issues already decided in favour of the assessee by the Tribunal in the earlier assessment years cannot be recovered, we deem it fit to grant stay of recovery of outstanding demand for a period of 180 days or the final disposal of the appeals, whichever is earlier. Since the issues raised in these appeals are covered by the earlier order of the Tribunal for assessment years 2012-2013 to 2014-2015, we post these appeals for hearing to 21st September, 2022. Since the date of hearing is pronounced in the open Court, both the parties have waived the right to separate notice of hearing. Stay applications filed by the assessee are allowed.
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2022 (10) TMI 152
Estimation of income - Bogus purchases - HELD THAT:- Undisputedly, the assessee has indulged in obtaining bogus purchase bills from hawala dealers as listed by the Sales Tax Department, Government of Maharashtra. The assessee failed to furnish any cogent evidence viz. delivery challans, GR, stock register to show delivery of goods. At the same time The sales turnover and the closing stock declared by the assessee have not been disputed by the Revenue. Without inputs there cannot be manufacturing/sales, therefore, in such circumstances, it is only the profit element embedded in unproved purchases that can be brought to tax and the entire bogus purchases cannot be disallowed.[See PCIT vs. Paramshakhti Distributors Pvt. Ltd. [ 2019 (7) TMI 838 - BOMBAY HIGH COURT] ] - CIT(A) has restricted the disallowance to 12.5% of the bogus purchases and the same has been accepted by the assessee - no infirmity in the impugned order, hence, the same is upheld and appeal of the Revenue is dismissed.
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2022 (10) TMI 151
Revision u/s 263 by CIT - profit attribution of a fixed place PE and the DAPE - Erroneous but not prejudicial to revenue order - AO accepted the computation of profits attributable to the dependent agent permanent establishment, and, accordingly, proceeded to finalize the assessment - HELD THAT:- In the present case, there does not appear to be any dispute with respect to the ascertainment of the arm s length price of the services rendered by the dependent agent to the assessee, as no ALP adjustment is made in the remuneration paid by the assessee to the MFE-India, i.e. the dependent agent. There are also several indications to suggest that DA and DAPE are being treated as distinct taxpayers, inasmuch as while the arm s length payment to the agent is not being questioned, the FAR analysis for the PE has been called into question. The two taxpayer approach adopted by the assessee has been accepted, and, taking it further, the profit attribution on the basis of the two taxpayer approach is enhanced. Even if that computation of profit attribution, on the basis of the two taxpayer approach, is erroneous, in view of Hon ble jurisdictional High Court decision, it cannot be said to be prejudicial to the interest of the revenue unless there is a categorical finding that the payment to the dependent agent is not an arm s length price vis- -vis functions performed, assets employed and risks assumed by the dependent agent. While doing so, one also has to bear in mind that DAPE is not anything distinct from the DA, in the light of the binding judicial precedents holding the field as of now, and the taxability of the dependent agent s remuneration in the hands of the DA brings an end to the taxability of the DAPE also. There is no such finding about the payment to the dependent agent being less than the arm s length price of services rendered by the dependent agent, in the present case, even though there is a finding about questioning the DAPE s FAR analysis. The Commissioner ought to have examined the arm s length price determination in respect of the services rendered by the dependent agent, in this context. That exercise has also not been done. We are of the considered view that unless the order sought to be revised cannot be said to be prejudicial to the interest of the revenue, its being erroneous, even if that be so, cannot be said to reason enough to invoke section 263 of the Act, and the order cannot be said to be prejudicial to the interests of the revenue unless there is a categorical finding that the dependent agent has not been paid arm s length remuneration for the functions performed, assets employed and risks assumed by the dependent agent. The order being prejudicial to the interest of the revenue, inasmuch as the payment to the dependent agent not being at an arm s length, is a sine qua non for holding that the order is prejudicial to the interest of the revenue. This exercise has clearly not been done on the facts of this case. For this short reason alone, we must set aside the impugned revision order. Assessee appeal allowed.
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2022 (10) TMI 150
Revision u/s 263 by CIT - Case of the assessee was selected for limited scrutiny for the purpose of verification of cash deposits during the year - HELD THAT:- As noticed that the assessee has submitted the details as called for by the AO from time to time. However, in the assessment order, the AO has not brought out any details of verification of cash deposits carried out by him during the course of assessment and he has passed a non-speaking order accepting the explanation given by the assessee. The source of cash deposits from safe custody account was not questioned by the AO by calling for ledger accounts etc., nor has the assessee submitted any details in this regard during the assessment proceedings. In the present case, limited scrutiny was to be done for verification of cash deposits and the source of cash deposits from the safe custody account is not examined by the AO by calling for relevant details from the assessee. The AO ought to have examined the same to go into the root of these deposits whereas in the instant case, the AO has not questioned the information supplied by the assessee with regard to the source of cash deposits into the safe custody account and has simply accepted those details without further enquiry. In such circumstances, it cannot be said that the AO has made any enquiry or taken a particular view by application of mind on the issue. As relying on the ratio laid down by the Hon ble Delhi High Court in the case of Gee Vee Enterprises [ 1974 (10) TMI 29 - DELHI HIGH COURT] , we hold that there is no infirmity in the impugned order passed by the PCIT u/s. 263 of the Act. Appeal by the assessee is dismissed.
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2022 (10) TMI 149
Penalty u/s 271(1) (b) - non compliance of notice u/s 142(1) - HELD THAT:- As additions were made in the hands of the assessee were not because of the reasons that assessee did not furnish the requisite information but because of search related issues. It is also shown that the assessment has been made after considering of the details filed by the assessee under Section 153A of the Act read with section 143(3) of the Act. None of the assessment order was passed under Section 144 of the Act. This clearly shows that there are materials to suggest that the learned Assessing Officer was satisfied, on the whole, overall compliance made by the assessee during the assessment proceedings. In view of this, the penalty levied by the learned Assessing Officer under Section 271(1)(b) of the Act or under Section 272A (1)(d) of the Act deserves to be cancelled. The judicial precedent cited before us of the co-ordinate Benches in case of Globus Infocom Limited [ 2016 (6) TMI 1304 - ITAT DELHI ] and in case of DLF Commercial Enterprises [ 2021 (4) TMI 327 - ITAT DELHI ] supported the case of the assessee. Assessee appeal allowed.
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Customs
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2022 (10) TMI 148
Confiscation - redemption fine - penalty - import of Carnet - goods cannot be re-exported within stipulated time - contravention of provisions of N/N. 04/2018 Cus. dated 18.01.2018 - HELD THAT:- The goods in question were imported for a temporary purpose under a Carnet and applicable Notification with the clear condition of being re-exported within 2 months. Apparently the said period of two months was allowed to be extended by the competent authority. It is observed that the goods still could not be re-exported within the extended period that another request dated 18.12.2019 was made by the appellant for further extension of time. The appellant had quoted Covid Pandemic as a reason for the impugned delay due to which the training with reference to imported survey model CMS-V-500 with accessories could not be completed by 20.03.2020 whereafter was the nationwide lockdown w.e.f. 24.03.2020. In the present case the extended time limit to re-export the goods expired on 21.12.2019. Though request for further extension was made on 18.12.2019 but the same was not accepted. Hence, the goods were required to be re-exported on 21.12.2019. By this date there was no COVID situation in India. The order of Supreme Court and the Ordinance of Ministry of Law and Justice give relief of time extension for such actions, under specified Act, which were to be completed or complied with after 20th March, 2020. Thus, it is clear that the Notification No.04/2018 has been violated. The very perusal makes it clear that the violation of the Notification No.04/2018 by the appellant gets covered under said provision. There are no infirmity in the order directing confiscation of these goods giving an option of paying the redemption fine (redemption fine already deposited and the impugned goods stands already re-exported). Commissioner (Appeals) is observed to have been meticulous while reducing the redemption fine from Rs.2.5 Lakhs to Rs.50,000/- on the ground of no malafide on the part of appellant. Hence, the said order is held to be reasonable and justified. Appeal dismissed.
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2022 (10) TMI 147
Pre-deposit - adjustment of amount deposited by another person / entity with the requirement of pre-deposit by the appellant - section 129E of the Customs Act - HELD THAT:- It is evident from section 129E that the legal requirement is that the appellant has to make the mandatory pre-deposit failing which the appeal cannot be admitted at all by this Tribunal. Of course, if during the course of investigation or at any time before filing the appeal, the appellant had deposited any amounts, such amounts would qualify as pre-deposit for the reason that of the total amount of duty confirmed or penalty imposed on the appellant in the impugned order, if some amount has already been deposited only the rest has to be paid. Usually, the impugned order itself appropriates the amounts already deposited towards the liability of duty or penalty. The amounts deposited by the other entities cannot be reckoned towards the pre-deposit by the appellant herein. Such amounts can be reckoned towards pre-deposit in appeals, if any, by such entities and if they had not filed any appeals, towards their liabilities of duty or penalty as per the order of the lower authority. Of course, if there is no liability against any entity as per the order of the lower authority but any amount has been paid by such entity or if the entity paid an amount in excess of the liability as per the order, such entity can seek refund of the amounts so deposited. The applications filed by the appellant deserves to be rejected and are rejected - List on October 06, 2022.
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Insolvency & Bankruptcy
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2022 (10) TMI 146
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- On perusal of records it is seen that the Petition was filed on 13.07.2021 and the last payment was received by the Operational Creditor from the Corporate Debtor on 18.10.2019. Thus, in view of this, the Petition squarely falls within the period of limitation i.e. 3 years as prescribed u/s 18 of Limitation Act, 1963. The application is complete and has been filed under the proper form. The debt amount is more than Rupees One Crore and default of the Corporate Debtor has been established and the application deserves to be admitted. Petition admitted - moratorium declared.
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2022 (10) TMI 145
Seeking dissolution of the Applicant Company - seeking necessary direction to the ROC to change the status of Corporate Person from under liquidation to dissolved - Section 59(7) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 38(3) of Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 - HELD THAT:- The Company is not involved in any kind of business activities, wherein the public interest at large is involved or it is going to be affected adversely in case such dissolution of the Company is ordered. This Adjudicating Authority in exercise of power conferred under Section 59 (8) of the Insolvency and Bankruptcy Code 2016, the Applicant Company i.e., M/s. NEFA Road Carrier Pvt. Ltd. is ordered to be dissolved with effect from the date of this Order i.e. 16.09.2022 - Application allowed.
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2022 (10) TMI 144
Recovery of the subject land in occupation by the corporate debtor, by the Applicants/Landowners in terms of Section 14(1)(d) of the I B Code - Seeking appropriate directions to the Corporate Debtor M/s. Meenakshi Energy Ltd., to release the land admeasuring 40.23 acres to the Applicants - HELD THAT:- The corporate debtor is in possession of the subject property which it is not entitled to, as such the said possession is wrongful. In our considered view the right under Section 14(1)(d) of the Code, namely, not to be dispossessed of a property which is in the possession of the Corporate Debtor during the moratorium period, cannot be extended to situations where the possession is without right, as possession without right wrongful or adverse - allowing the respondent/Corporate Debtor to hold the subject property of the Applicants for the purpose of corporate insolvency resolution of the respondent, not only frustrates the order of the Hon'ble High Court, but also enables the respondent/corporate debtor to enrich unjustly, as admittedly the subject lands were delivered to the respondent/corporate debtor mistakenly/wrongly by APIIC, besides results in deprivation of the constitutional right of the Applicants to hold their property. Even though the object behind imposing moratorium under section 14 of IB Code, is to prevent depletion of a corporate debtor's assets, in our considered view the same cannot be extended to the properties which are not in rightful possession of the corporate debtor as any such extension to the properties which are not in the rightful possession of the corporate debtor results in unjust enrichment by the corporate debtor, under the guise of 'maximisation' at the cost of the lawful owner of the property. Therefore, Section 14(1)(d) of the Code has no application when the corporate debtor is not in rightful possession of the property - the argument of the Ld. Counsel for the Resolution professional that Corporate Debtor is entitled to invoke Section 14(1)(d) of the Code, cannot be accepted. Whether APIICL is a necessary party to the present application? - If so, whether present Application is bad in law for non-joinder of APIICL? - HELD THAT:- In the case on APIICL has admittedly taken a stand that the subject lands shall be delivered to the Applicant in compliance of the order of Hon'ble High Court in, supra, as such the question of affecting the right in any, of APIICL does not even arise in this case. Hence, in our considered view APIICL need not be added as a party to the present proceedings. The Resolution Professional is directed to forthwith handover the possession of the land admeasuring to an extent of 40.23 acres covered in Sy. No. 691/2, 428, 55, 636A, 617, 618, 619, 478 and 474 situated in the Momidi Village belonging to Applicant Nos. 1 and 2 and Sy. No. 41, 58, 32, 33A, 60, 65A, 66B2, 123, 153, 72, 478, 63B, 617, 618, 619 and 31C situated in Momidi Village belonging to the Applicant No. 3 and file compliance report within two weeks. Petition allowed.
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Service Tax
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2022 (10) TMI 143
Refund of service tax paid - input services used for the export of goods under Notification No.9/2009-S.T. dated 03rd March, 2009 - delay in filing refund claim - time limitation - HELD THAT:- The notification No.9/2009-S.T. grants the refund on service tax paid on input services used by the exporters - It is seen that the said provision prescribes the time limit of six months or such extended period as the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall permit, from the date of actual payment of service tax by such developer or unit to service provider. It is seen that the notification grants discretion to the Assistant Commissioner to extend the period of limitation. The notification No.9/2009-S.T. gives the discretion to the Assistant Commissioner or Deputy Commissioner to allow refund even when there is a delay. In the present case, it is found that the appellant was confused in so far as they believed that the refund is to be filed on quarterly basis and therefore, they counted the delay on the basis of the last date of the quarter. If the last date of filing the refund is taken as the end of the quarter then the refund claims have been filed in time. There is a reasonable cause and in this circumstances the discretion are in favor of the appellant.
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2022 (10) TMI 142
Levy of Service Tax - liquidated damages - Section 66E(e) of the Finance Act, 1994 - HELD THAT:- This Bench of the Tribunal in the case of M/S NEYVELI LIGNITE CORPORATION LIMITED VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX, CHENNAI WITH M/S NLC INDIA LIMITED VERSUS COMMISSIONER OF GST AND CENTRAL EXCISE, TRICHY [ 2021 (7) TMI 1090 - CESTAT CHENNAI] has held that it is not possible to sustain the view taken by the Commissioner that since BHEL did not complete the task within the time schedule, the appellant agreed to tolerate the same for a consideration in the form of liquidated damages, which would be subjected to service tax under Section 66E(e) of the Finance Act. There are no reasons to sustain the order of demand and consequently, the impugned order is set aside - appeal allowed - decided in favor of appellant.
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2022 (10) TMI 141
Levy of service tax - sponsorship services - reverse charge mechanism - period in the present case involved is prior to 01.07.2010 - HELD THAT:- From the clause related to sponsorship service before and after the amendment makes it clear that prior to 01.07.2010, the receipt of sponsorship in relation to the sports event was not taxable, however the same became taxable after 01.07.2010 - In the present case, the sponsorship received from BCCI-IPL is clearly in respect of cricket sports events which conducts cricket matches of T-20, therefore, the sponsorship is clearly related to the sports events which was not included under the sponsorship service as per sub clause (zzzn) prevailing prior to 01.07.2010, therefore, the same is not taxable. The appellant is not liable to pay service tax on the sponsorship service in the facts of the present case - Appeal allowed - the issue in hand stand settled in favour of the assessee.
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Central Excise
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2022 (10) TMI 140
Interest on refund of an amount which was paid during investigation - HELD THAT:- The issue involved in the case of Gyal M G Gases P Ltd [ 2015 (2) TMI 302 - CESTAT NEW DELHI ] is identical and the facts are also similar. It was held in the said case that The refund application was filed only on 06.07.2004. In terms of Section 11BB of the Central Excise Act, the interest liability of the Department for delay in payment of refund under Section 11B arises, only when there is delay beyond 3 months from the date of filing of the refund application. Thus, appeal is dismissed.
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2022 (10) TMI 139
Refund of accumulated credit - assessee has claimed drawback in terms of Customs and Central Excise Duties and Service Tax Drawback Rules, 1995 - rejection of refund claim also on the ground of time limitation - HELD THAT:- The issue with regard to the admissibility of refund, in case where drawback of only customs portion have been availed by the assessee, has already been decided in favour of assessee by the Tribunal in the case of COMMISSIONER OF CENTRAL TAX, GUNTUR-GST VERSUS M/S CHOLAYIL PVT LTD. [ 2019 (9) TMI 1106 - CESTAT HYDERABAD] and COMMISSIONER OF CENTRAL EXCISE, KANPUR VERSUS M/S SABHARWALS MEDICALS PVT. LTD. [ 2017 (8) TMI 697 - CESTAT ALLAHABAD] as relied by the Ld. Advocate and the issue is no longer res integra. It was held that In this case, since the drawback scheme itself has provided for a single rate of drawback, which, according to the clarification in the Notification 110/2015-CUS dated 16.11.2015, means only customs duty drawback, it is impossible that the respondents could have availed drawback of central excise duty. Therefore, there is no prohibition in refund of Cenvat credit on inputs or input services in respect of the goods which are exported. In view thereof, there is no reason to deny the refund when the Appellant has availed drawback of only the customs duty portion and not of excise duty which facts are not in dispute. Time limitation - HELD THAT:- Since no observation has been made by the Ld. Commissioner (Appeals), it would be fit to remand the matter to the Ld. Commissioner (Appeals) to decide the issue as to whether the refund claimed by the Appellant is within time. He would also examine other issues with regard to the correctness of the discrepancies as observed by Lower Authority on the documentation part. The Ld. Commissioner (Appeals) is therefore directed to examine the aforesaid issues and decide the entitlement of refund except the issue of drawback which stands decided in favour of the Appellant as discussed above. Appeal allowed by way of remand.
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2022 (10) TMI 138
Seeking production of documents - attested photocopy of order of GST Department, Govt of India - percentage on amount received as incentive amount is to be payable to GST Department (Delhi) by undersigned as GST Tax - HELD THAT:- From the standpoint of the RTI Act, the Appellant shall note that outstretching the interpretation of Section 2(f) of the RTI Act to include deductions and inferences to be drawn by the CPIO is unwarranted as it casts immense pressure on the CPIOs to ensure that they provide the correct deduction/inference to avoid being subject to penal provisions under the RTI Act. However, by taking a liberal view in the matter and also in furtherance of hearing proceedings the Commission hereby directs the CPIO to provide an extract of a copy of relevant rules/notifications pertaining to consideration which will suffices the information sought by the Appellant regarding percentage on amount received as incentive which needs to be payable to GST Department (Delhi) by him towards GST Tax. - The above said information should be provided by the CPIO free of cost to the Appellant within 15 days from the date of receipt of this order under due intimation to the Commission. Appeal disposed off.
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CST, VAT & Sales Tax
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2022 (10) TMI 137
Disallowance of claim of exemption as branch transfer - interstate sales or not - period of limitation provided under Section 55 of the Tamil Nadu General Sales Tax Act, 1959 - requirement to file Form - F to claim exemption under Section 6A of Central Sales Tax Act, 1956 - HELD THAT:- The purpose of assessment under the taxing enactment is to arrive at the correct tax payable by an assessee. An enquiry that is contemplated, the burden of proof was on the petitioner to establish that the movement of goods was otherwise than by way of sale and for this purpose, the petitioner was required to furnish Form - F as is prescribed. The present writ petition is inspired from the decision of the Hon'ble Full Bench of Kerala High Court in M SYED ALAVI AND OTHERS VERSUS STATE OF KERALA [ 1981 (5) TMI 113 - KERALA HIGH COURT ] wherein, after referring to sub-section (2) to Section 105 of C.P.C, the Court in para 17 ultimately held The effect of non-filing of an appeal is that the finding is binding on the assessing authority when the case went back to that authority and also on the Appellate Assistant Commissioner while disposing of the appeal from the revised decision of the assessing authority. As far as the issue relating to branch transfer for which Section 6A exemption was denied by the Assessing Officer and confirmed by the Appellate Assistant Commissioner, the petitioner did not take it up on further appeal before the Appellate Tribunal. The facts on record indicate that the petitioner has not produced any documents to revise the assessment of tax in respect of the turnover of Rs.10,23,728/-. As far as the balance turnover of Rs.19,71,803/- which was remanded back to the Assessing Officer for verification is concerned, the order dated 31.12.2002 of the Assessing Officer indicates that there also the petitioner had not procured Form F - petitioner had produced only collateral evidence to substantiate stock transfer without producing Form-F for a turnover of Rs.19,71,803/- by the Additional Commercial Tax Officr vide order dated 31.12.2002. Even if the Form-F was not filed by the petitioner for the balance turn over, the petitioner is entitled to file copies of transport documents such as lorry receipts, stock transfer invoices and delivery chalan etc. to substantiate such stock transfers. Once the case is remanded back, the order remanding the case back to the Original Authority is to be construed as an Interlocutory Order. The case is remanded back to the first respondent Appellate Tribunal to re-examine the issue in the light of the law settled by the Kerala High Court in M.Syed Alavi and Others vs. State of Kerala, within a period of six months from the date of receipt of a copy of this order. Petition allowed.
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Indian Laws
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2022 (10) TMI 136
Dishonor of Cheque - discharge of legal liability or not - delaying tactics of unscrupulous drawers of dishonoured cheques - prayer for interim relief - Section 143-A of NI Act - HELD THAT:- The facts clearly shows that the petitioner No.2-accused has adopted dilatory tactics by moving repeated applications for exemption before and after obtaining bail. In fact, bailable warrants/non-bailable warrants had also been issued against the accused on a few occasions. Further, as per interim bail order dated 30.07.2021 (Annexure P-11) in FIR No.09 dated 18.01.2021 under Sections 406/506/120-B IPC, the petitioner No.2 (accused) only chose to appear in these proceedings when his counsel gave an undertaking to this effect to the Court of the Additional Sessions Judge, Gurugram, pursuant to which he finally appeared on 12.11.2021 and was granted bail. The statement of Objects and Reasons as enumerated hereinabove clearly show that the need for the insertion of Section 143-A to the Negotiable Instruments Act, 1881 was in order to prevent delaying tactics of unscrupulous drawers of dishonoured cheques. The present case is a classic case wherein the petitioner No.2-accused has delayed proceedings significantly. Therefore, no fault can be found with the passing of the impugned orders. The arguments of the learned counsel for the petitioners as setout in the present petition are a virtual reproduction of the reply to the application under Section 143-A of the Act, which have been dealt with by the Courts below - Whether the cheque, in question, had been issued as a security cheque or was a blank cheque or whether the filing of the complaint was a pressure tactic or not etc. are not matters to be examined by the Court while adjudicating upon an application under Section 143-A of the Act. If the merits of the case was to be minutely examined at this stage, it would amount to the conducting of a virtual mini trial thereby defeating the very purpose of Section 143-A of the Act, which seeks to provide succour to an aggrieved person. There are no merit in the present petition - petition dismissed.
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2022 (10) TMI 135
Dishonor of Cheque - insufficient funds - discharge the legally enforceable liability or not - rebuttal of presumption available under Section 118 and 139 of the Act - HELD THAT:- This Court sees no reason to interfere with the well reasoned judgments passed by the courts below, which otherwise appear to be based upon the correct appreciation of evidence and as such, same need to be upheld. Moreover, this Court has a very limited jurisdiction under Section 397 of the Cr.PC, to re-appreciate the evidence, especially, in view of the concurrent findings of fact and law recorded by the courts below. Since after having carefully examined the evidence in the present case, this Court is unable to find any error of law as well as fact, if any, committed by the courts below while passing impugned judgments, and as such, there is no occasion, whatsoever, to exercise the revisional power. True it is that the Hon ble Apex Court in KRISHNAN ANR. VERSUS KRISHNAVENI ANR. [ 1997 (1) TMI 529 - SUPREME COURT] has held that in case Court notices that there is a failure of justice or misuse of judicial mechanism or procedure, sentence or order is not correct, it is salutary duty of the High Court to prevent the abuse of the process or miscarriage of justice or to correct irregularities/ incorrectness committed by inferior criminal court in its judicial process or illegality of sentence or order, but learned counsel representing the accused has failed to point out any material irregularity committed by the courts below while appreciating the evidence and as such, this Court sees no reason to interfere with the well reasoned judgments passed by the courts below. The present revision petition is dismissed being devoid of any merit.
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