TMI Tax Updates - e-Newsletter
October 9, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise Indian Laws

Highlights / Catch Notes

GST

• Reassessment ordered, objections allowed; ITC denial garnishee halted, others continued.

  Assessment order set aside. Assessing authority to re-do assessment considering amendment. Petitioner allowed to file objections within three weeks. Personal hearing to be granted. Garnishee proceedings related to demand for denial of Input Tax Credit u/s 16(4) for 2017-2018 to be withdrawn. Respondent permitted to continue garnishee proceedings for other demands. Petition disposed.
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• Summons jurisdiction challenged - parallel proceedings on Central GST Act.

  Challenge to summons jurisdiction - parallel proceedings - Central Authorities' jurisdiction u/s 6(2) Central Goods and Service Tax Act, 2017. Petitioner has no objection to investigation regarding M/s IESA Sales Pvt. Ltd. Held: Respondent No.3 can investigate pursuant to summons dated 21.06.2024 and 05.07.2024 regarding M/s IESA Sales Pvt. Ltd. However, based on communication dated 09.08.2024, Respondent No.3 cannot further investigate Petitioner's transactions with M/s Ridhi Industries and M/s Amazonite Steels Private Ltd. for the relevant period. Petition disposed.
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• Corrupt GST officer denies anticipatory bail in bribery case after fleeing attempt.

  The petitioner, a GST Inspector, sought anticipatory bail in a bribery case. The complainant alleged a demand for bribe by the petitioner during a telephonic conversation, corroborated by the visitor's register entry showing the complainant's visit to meet the petitioner. Despite the petitioner's attempt to flee through a secret passage, the prima facie evidence points towards his involvement. Considering the circumstances, the court dismissed the anticipatory bail petition, as the petitioner is not entitled to bail at this stage.
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• Circular challenged over GST refund denial; High Court sets aside orders, remands for fresh hearing.

  Petition challenging Circular No.151/07/2021-GST as ultra vires provisions of entry at Serial No.66(a) read with Paragraph 2(y) of N/N. 12/2017-Central Tax (Rate) and corresponding Delhi GST Act notifications. Petitioner alleged refund rejection order dated 29.06.2022 was passed without considering submissions and denying personal hearing, violating natural justice. High Court disposed petition as part of batch matters, setting aside impugned refund rejection orders. Matter remanded to appropriate authority for fresh consideration.
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Income Tax

• Limits on Carrying Forward and Setting Off Business Losses: Depreciation Deductions Restricted to Business Income.

  Carry forward and set off of business losses u/s 32(2) is subject to the provisions of Sections 72(2) and 72(3). Depreciation allowance carried forward u/s 32(2), though deemed a business loss for Sections 71 and 72, can only be set off against profits or gains from any business or profession, and not against income from other sources. Section 72 is not always subject to Section 71, despite Section 32(2) permitting carry forward of depreciation allowance subject to Section 72. The High Court dismissed the writ petition, finding no error warranting exercise of jurisdiction under Article 226 of the Constitution.
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• Appellate Court upholds ITAT's acceptance of trader's books despite low profit rate applied by Tax Officer.

  The High Court dismissed the appeal filed u/s 260A, holding that no substantial question of law arises. The Assessing Officer had rejected the assessee's books of accounts and applied a low gross profit rate of 0.54% without valid reasons. The Income Tax Appellate Tribunal (ITAT) observed that the assessee had produced stock statements without negative stock, and the evidence was part of the account books furnished. The ITAT held that it was unjustified to reject accounts merely because buyers' names were not mentioned in cash sales bills, as the assessee traded in gold bullion where rates were ascertainable. The ITAT found no valid reason to doubt the assessee's records, as they maintained quantitative stock tally. The Revenue failed to establish that the assessee did not adopt a consistent accounting method or that profits could not be detected from the books. The High Court upheld the ITAT's findings based on the factual matrix and documents examined by the lower authorities.
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• Allotment letter & banking payments define property purchase agreement, valuation date for tax.

  An allotment letter from a developer is considered an agreement to purchase a property, and payments made through banking channels establish its veracity. The valuation date for determining any deemed gift is the date of the first payment, not the later date of property transfer. CBDT circulars recognize allotment letters as agreements for construction, granting capital gains set-off benefits to purchasers. Applying this analogy, the assessee's allotment letter and cheque payments from June 2010 constitute an agreement, precluding additions u/s 56(2)(vii)(b)(ii) for deemed gifts. The Assessing Officer erred in considering the valuation date as October 2014, and the addition is deleted by the Appellate Tribunal.
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• Incorrect interpretation of tax laws led to wrongful penalty on cash receipts from property sale.

  The summary focuses on the interpretation and applicability of Section 271D and Section 269SS of the Income Tax Act. The key points are: Section 271D imposes a penalty for violating the provisions of Section 269SS, which prohibits receiving a sum exceeding Rs. 20,000 as a loan or deposit from any person. However, Section 269SS does not cover the receipt of cash consideration for the sale of immovable property. The authorities erroneously interpreted Section 269SS and imposed a penalty u/s 271D for receiving cash consideration from the sale of immovable properties. The Appellate Tribunal held that the Assessing Officer committed an error in invoking Sections 269SS and 271D in this case and quashed the penalty imposed.
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• After merger, company claimed depreciation on goodwill, revenue objected; tribunal allowed it based on past rulings. &acquisitions.

  The assessee, after being amalgamated with another company, treated the excess consideration paid over the net assets acquired as goodwill and claimed depreciation at 25% on the written-down value. The tax authorities disallowed the claim. However, the Tribunal observed that the assessee had consistently claimed depreciation on goodwill since FY 2006-07, and the Revenue's appeals on this issue for previous years were dismissed by the Tribunal. Following its earlier decisions and a recent Kolkata Tribunal ruling in a similar case, the Tribunal decided the appeal in favor of the assessee, allowing the depreciation claim on goodwill.
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• Assessee claims bogus purchases to launder unaccounted money; Tax authorities reject it & make addition.

  The assessee declared purchases from parties issuing bogus purchase vouchers without actual transactions, merely laundering unaccounted money to claim deduction u/s 80HHC. The Assessing Officer treated 25% of unverifiable purchases as income from other sources, alleging inflation of export profits. The CIT(A) confirmed this addition. The ITAT held that rejection of books u/s 145(3) requires specific conditions, which were not satisfied. The AO did not follow the proper procedure or point out defects in accounts. The ITAT relied on judicial precedents to conclude that no addition can be made if the declared gross profit rate is higher than the rate prescribed by the jurisdictional High Court in such cases. The assessee's gross profit rate was found reasonable based on comparable cases and the partner's statement recorded during the search. Consequently, the ITAT allowed the assessee's ground and deleted the addition of 25% of unverifiable purchases.
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• Grants for plant & machinery deductible from cost for depreciation under Income Tax Act.

  The grant received by the assessee towards plant and machinery and technical civil works is required to be reduced from the cost of assets for computing depreciation u/s 43(1) read with Explanation 10 of the Income Tax Act, 1961. The actual cost of assets is to be determined after reducing the portion of cost met directly or indirectly by any other person or authority. The grant received is directly attributable to meet the cost of plant and machinery and technical civil works, and hence, such portion is to be deducted from the value/cost of assets eligible for depreciation. The assessee's contention that the grant should not be reduced from the cost of assets is rejected, as the language of the statute is clear and requires literal interpretation. The judgment relied upon by the assessee is distinguished based on the peculiar facts and circumstances of the present case.
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• Dispute over tax exemption for govt-backed microwave electronics promotion society.

  The case pertains to the denial of exemption u/s 11 of the Income Tax Act to an assessee society, questioning whether its activities qualify as charitable or commercial. The society was established by the Department of Electronics, Government of India, and Microwave Electronics Ltd. to promote self-reliance in the field of Microwave Electronics and is an autonomous body for this purpose. In earlier years, the Coordinate Bench had remanded the assessee's appeals to the Assessing Officer to decide in accordance with the Supreme Court's decision in the Ahmed Urban Development Authority case. Subsequently, for the assessment years 2016-17, 2017-18, and 2022-23, as well as earlier years, the Assessing Officer, after scrutinizing the assessee's case, allowed the benefit of Sections 11 and 12 of the Act. The Revenue's appeal for the current year does not hold strong ground as the Assessing Officer, in a series of assessment orders or restored proceedings, has accepted the assessee's claim, and there is no assertion that the facts or law for the current year differ from those assessment years. The case was decided in favor of the assessee.
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• Capital Gains Tax Dispute: Penalty for Estimation Difference on Cost of Acquisition Rejected.

  The crux pertains to levying penalty u/s 271(1)(c) for alleged furnishing of inaccurate particulars or concealment of income regarding capital gains computation on sale of land. The Tribunal held that adopting a different valuation for determining cost of acquisition based on estimation cannot be the basis for imposing penalty. The capital gains were computed by the assessee based on estimated cost as on 1.4.1981, which the Assessing Officer disagreed with and adopted the fair market value mentioned in the sale deed dated 17.11.1980 without referring to the District Valuation Officer. This recomputation based on material furnished by the assessee cannot attract penalty. Mere difference in estimation of cost by the authorities does not prove concealment or inaccurate particulars. The Assessing Officer failed to establish willful negligence, concealment or furnishing of inaccurate particulars. Penalty cannot be levied for estimated additions unless the factum of concealment or inaccurate particulars is proved. The Tribunal decided in favor of the assessee, holding penalty u/s 271(1)(c) as not imposable.
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• Assessee's misleading affidavits lead to dismissal of delayed appeal against assessment order.

  The assessee delayed filing an appeal against an order dismissing their appeal contesting the assessment u/s 143(3), resulting in a 346-day delay. The ITAT held that there was no explanation for the initial 90-day delay, even after the assessee became aware of the delay on 28.10.2022. The assessee's affidavits dated 24.01.2023 and 18.04.2024 contradicted the Revenue's report regarding the date of knowledge of the assessment. The assessee's revised affidavit claiming knowledge on 24/11/2022 based on penalty orders u/ss 270A/271AAC was incomprehensible and reprehensible. The ITAT condemned the assessee's second affidavit, which appeared to be filed surreptitiously without bringing the changed date to the ITAT's notice, as clearly false and an attempt to mislead the court. The ITAT allowed the assessee time to produce evidence and cross-examine the deponent, but no material or deposition was advanced. With the affidavits being found false and no reasonable cause for the delay, the ITAT dismissed the assessee's appeal.
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• LTCG Exemption Denied for Delayed Construction Under Joint Development Deal.

  Capital gains exemption u/s 54F denied due to non-completion of construction within the stipulated period. The assessee entered into a Joint Development Agreement (JDA), receiving a residential villa in exchange for a plot of land. Despite a delay of over 7 years in completing construction against the 3-year period u/s 54F, the assessee failed to substantiate the explanation of a dispute among partners. No evidence was provided to demonstrate efforts made by the assessee to enforce rights under the agreement or ensure timely completion. Lack of vigilance and failure to exercise due diligence resulted in the dismissal of appeals by the Appellate Tribunal.
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• Tribunal upholds FMV by valuation report, allows cost of improvement deduction for computing LTCG.

  This is a summary of a case dealing with the determination of fair market value (FMV) for computing long-term capital gains (LTCG) and allowing deductions for cost of improvements. The key points are: the Tax Appellate Tribunal upheld the Assessing Officer's adoption of FMV as per the District Valuation Officer's report, rejecting the assessee's argument for using the 'reverse indexation method'. However, the Tribunal allowed the deduction for cost of improvement incurred in FY 1991-92, which was erroneously omitted by lower authorities. It also directed the Assessing Officer to rectify a mathematical mistake in computing the total indexed cost of improvement. The Tribunal's decision partially favored the assessee regarding the allowable deductions.
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• Income Tax appeal dismissed over procedural lapse in verification; raises issues of ex-parte order & bogus entries.

  The appeal filed by the assessee company was dismissed by the Income Tax Appellate Tribunal on the grounds that the Form 36 (memo of appeal) was not duly verified as per Rule 47(1) read with Rule 45(3) of the Income Tax Rules, 1962. The rules mandate that Form 36 must be verified by the person authorized to verify the return of income u/s 140 of the Income Tax Act, which in case of a company is the Managing Director or any Director. However, in this case, Form 36 was verified by the Authorized Representative (Chartered Accountant) of the assessee company instead of the Managing Director or a Director. Consequently, the appeal was held to be invalid and dismissed in limine. The Tribunal also noted issues with the ex-parte assessment order passed without proper service of notice to the assessee and in the name of a different entity, as well as the addition of bogus accommodation entries.
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Customs

• Petitioner gets relief due to inadvertent mistake by Customs Broker under MEIS Scheme.

  The petitioner was denied benefit under the MEIS Scheme due to an inadvertent mistake where the relevant entry was left blank by the employees of the Customs Broker. The court held that since the respondents had not examined the petitioner's case due to the inadvertent error, it was expedient to direct the respondent to undertake fresh examination of the 16 EDI shipping bills, treating the petitioner's submissions as a 'Yes'. The petitioner and/or authorized representative would be given an opportunity for a personal hearing and to provide relevant documents and clarifications sought by the respondent. The petition was disposed of accordingly.
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• Rejected export claims due to lack of original documents, missed deadlines, and unsubstantiated explanations.

  Petitioner failed to submit original shipping bills to substantiate claimed exports, providing only photocopies which were not accepted for meeting export obligation. Two shipping bills fell outside extended export obligation period, two were Drawback Shipping Bills with rejected conversion requests. Petitioner claimed loss of Duty Exemption Entitlement Certificate Book but provided unsatisfactory explanation before Appellate and Reviewing Authorities. Petitioner did not submit required documents to demonstrate compliance with export obligation and failed to appear for personal hearings despite opportunities. Petitioner did not provide written response to objections raised. Petitioner failed to prove Customs Authority's agreement to convert Drawback Shipping Bills to DEEC Shipping Bills and did not submit documents proving export obligation fulfilment or pay prescribed customs duty. Orders rejecting review petition found reasonable based on facts, not arbitrary. High Court dismissed petition, finding no grounds for interference under Article 226 of Constitution of India, 1950.
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• Allegations of Raw Sesame Seed Diversion Refuted, Policy Norms Revised.

  Imported raw sesame seeds duty-free under Advance Authorization Scheme were allegedly diverted and sold in the local market instead of being used for export production as specified. The appellant claimed to have exported the processed sesame seeds by procuring indigenous duty-paid goods and claiming the stipulated 1% SION norm process loss. Customs discharged the bond after due consideration. For the alleged diversion against 4 contract notes, 3 were canceled, and for the 4th, hulled sesame seeds were supplied, disproving diversion. Documents relied upon by the department failed to evidence diversion. The appellant sought clarification on using indigenous raw material and revision of norms, which was duly considered. Evidence indicates procurement of indigenous material rather than diversion, appreciated by DGFT's practical and pragmatic stance of revising the lower 1% norm. DGFT's Policy Interpretation Committee permitted sourcing domestic material for deficiency. DGFT issued EODCs, and Customs discharged the bond accordingly. The adjudicating authority correctly granted relief after considering arguments and developments. The CESTAT upheld the order, dismissing the department's appeals as devoid of merit and the appellant's appeal seeking drawback adjustment as infructuous.
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• Clear Float Glass import: Proper classification and exemption entitlements upheld.

  The imported Clear Float Glass is classifiable under CTH 7005 1090 of the Customs Tariff Act, 1975, as per Chapter Note 2(c) to Chapter 70, rather than under CTH 7005 2990 as reclassified by the Department. The issue of classification is no longer res integra, as it has been elaborately dealt with in the case of M/S. BAGRECHA ENTERPRISES LIMITED VERSUS COMMISSIONER OF CUSTOMS (PORT), KOLKATA. The Department cannot invoke the extended period of limitation, as the issue was known to the revenue, and the assessments underwent provisional assessment and subsequent finalization for the same product. Invoking the extended period for demand of duty or imposition of mandatory penalty is not sustainable, as the appellant did not suppress or misdeclare any facts. The imported Clear Float Glass is eligible for exemption under Sl. No. 934 of Notification No. 46/2011-Cus dated 01.06.2011, being classifiable under CTH 7005 1090. The impugned Order-in-Original is set aside, and the appeal is allowed.
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• Gold imports: Customs raid legality examined - Duty evasion, prohibited goods?

  Constitutional validity of Sections 104, 105, and 108 of the Customs Act, 1962, concerning the legality of search and seizure operations conducted by the respondents. It examines whether the alleged acts or omissions constitute prohibited goods or evasion of duty exceeding fifty lakh rupees, rendering Section 155 of the Criminal Procedure Code (Cr.P.C.) inapplicable. The court held that while gold is not absolutely prohibited, failure to comply with conditions amounts to prohibited goods u/ss 2(33) and 11 of the Act. The petitioners' alleged acts prima facie constitute prohibited goods, and the offence being cognizable with punishment up to 7 years, Section 155 of Cr.P.C. is inapplicable. Consequently, the court dismissed the stay applications, prima facie finding no grounds to grant a stay at this stage, subject to deciding the constitutional validity of the provisions in the main writ petitions.
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• Coin blanks, copper strips: Classification dispute. Raw materials or near-finished goods? Customs duty, Education Cess conundrum resolved.

  Coin blanks of copper alloys/strips of copper/coils of zinc & nickel to be classified under CETH 74094000 as copper plates, sheets and strips exceeding 0.15mm thickness of copper nickel base alloys or under 7419. Coin blanks cannot be classified along with plates and strips as they have distinctive shape, size, character and use; plates and strips are raw materials while coin blanks are near-finished manufactured items. Copper strips and coin blanks constitute similar goods to avail benefit under Para 6.8(a) of Foreign Trade Policy, 2009-14. Education Cess cannot be charged twice after being added to Customs duties. No penalty can be imposed u/r 25 of Central Excise Rules as the issue pertains to legal interpretation, and advance rulings favored the appellants on classification. Appeal allowed in part.
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IBC

• Engine and APU return ordered after correcting factual mistakes in earlier judgment.

  The Adjudicating Authority had the power to recall its earlier order, which contained factual mistakes, and pass a corrected order regarding the return of the Corporate Debtor's engine and APU, which were in the Appellant's possession and of greater value. The Appellate Tribunal held that the Adjudicating Authority did not review or recall its earlier order but corrected genuine mistakes based on mistaken facts. The power to recall a judgment can be exercised when the ground for reopening was not available or pleaded earlier, and no other remedy was available. The Adjudicating Authority correctly passed the impugned order, and the appeal was dismissed.
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Indian Laws

• Account freeze halts cheque dishonor liability under Negotiable Instruments Act.

  Dishonor of cheque due to account being frozen/blocked by order of IT department does not attract liability u/s 138 of Negotiable Instruments Act. For an offense u/s 138, the cheque must be returned unpaid due to insufficient funds or exceeding arranged amount, which was not the case here. Drawing a cheque from an account not maintained by the drawer due to freezing may amount to other offenses but not u/s 138. For an account to be considered maintained, the drawer must be able to operate it by depositing or withdrawing funds and giving instructions to the bank, which was not possible once the account was attached. Complaint for offense u/s 138 quashed as the account was not maintained by the drawer after freezing by IT department's order.
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Service Tax

• Levied on commercial coaching/training services irrespective of profit motive from July 1, 2003. Exemptions granted later.

  The case pertains to the levy of service tax on commercial coaching or training services. The Finance Act, 2010 inserted an explanation in Section 65(105)(zzc) retrospectively from July 1, 2003, clarifying that the word 'commercial' would mean training or coaching services provided for consideration, irrespective of profit motive. Notification no. 33/2011 granted exemptions to coaching and training centers leading to a certificate, diploma, degree, or other educational qualification recognized by law. The Board clarified that 'recognized by any law' encompasses courses approved or recognized by any entity established under Central or State legislation for granting recognition to educational courses. The High Court found that the petitioner was neither affiliated with a University nor enabled by statute to grant degrees or diplomas. The CESTAT concluded that the petitioner's appeals lacked merit, while the Department's appeals were allowed. The petition was dismissed.
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• Commercial activities like shops, canteens not directly related to agriculture are liable for service tax; exemption denied as turnover exceeded limit.

  Letting out shops/premises for shops, canteens, banks, etc. is liable to service tax as it is not directly related to agriculture and agricultural produce. The appellant is liable to pay service tax for the period 1.10.2012 to 31.03.2014 as the activities undertaken were for furtherance of business or commerce, not covered under the Negative List of Section 66D. The exemption under Notification No. 33/2012-ST is not applicable as the aggregate value of taxable services rendered by the appellant from one or more premises exceeded Rs.10 lakhs in the preceding financial years, which is a mandatory condition. The Apex Court has held that exemption notifications must be construed strictly, and all conditions must be fulfilled to claim the benefit. The Commissioner's finding that the appellant's total receipts exceeded the threshold limit for exemption is upheld. The appeal is dismissed.
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• Reimbursement costs not part of taxable service value before May 2015. SC ruling followed.

  Levy of service tax on reimbursement amounts based on Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006, and whether the reimbursement amount can be subjected to service tax for the period prior to May 2015. The Supreme Court's decision in Union of India and Anr. v. M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. is considered, where it was held that the reimbursement amount cannot be treated as "gross amount charged" as it is not a "consideration" for rendering the service. It is noted that the inclusion of reimbursable costs in the value of taxable service cannot be justified before May 14, 2015. Regarding the extended period of limitation, it is held that the requirements of the proviso to Section 73(1) of the Finance Act are not satisfied, as the Commissioner could not confirm the demand of service tax for the extended period. The impugned orders are set aside, and the appeal is allowed.
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• Refund interest denial valid for timely processed excise deposits pre-2014 Finance Act despite protest.

  Interest claim for refund of amount deposited under protest was denied as the refund applications were processed within a month of receipt, falling within the three-month grace period u/ss 11BB and 35FF of the Central Excise Act, 1944. The appellant was not entitled to interest from the date of deposit due to the proviso in Section 35FF for amounts deposited prior to the Finance (No. 2) Act, 2014. The appeals were dismissed by the Appellate Tribunal.
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• Refund Entitlement: Taxable Credits on Reverse Charge Mechanism.

  Refund of accumulated CENVAT credit paid towards Service Tax on Reverse Charge Mechanism during April 2016 to June 2017 period is admissible in cash u/s 142(3) after the expiry of the transitional provision. The non-obstante clause in the pre-existing law permitted cash refund of eligible CENVAT credit, even though no express provision existed. Invoking the 'Doctrine of Necessity', the Appellant is entitled to the claimed refund with applicable interest. The Commissioner's order denying cash refund is set aside, and the appeal is allowed. The Tribunal's precedents and the Madras High Court judgment support granting cash refund as a dire necessity.
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Central Excise

• Directors escape excise duty penalty due to lack of evidence, denial of cross-examination and failure to establish involvement.

  Penalty imposed u/r 26 of Central Excise Rules 2002 set aside due to violation of principles of natural justice and lack of evidence. Department's case based solely on statements without allowing cross-examination. Rule 26 penalty requires involvement in clearance of goods liable for confiscation, which was not established against the appellants. Imposition of penalty u/r 26 unsustainable as appellants not involved in activities attracting Rule 26. Penalty on directors set aside as one director not concerned with activities at the relevant plant. Appeals of three appellants allowed, fourth appellant's appeal partly allowed.
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• Glue mixtures for laminates classified under 35.06, not 3909; Area-based exemption applicable.

  Mixtures of Melamine & Formaldehyde and Phenol & Formaldehyde used as glue/adhesive in laminate manufacturing are classifiable under Chapter Heading 35.06, not Chapter 3909. Consequently, the area-based exemption under Notification 50/2003-CE is applicable. The issue is settled by the Tribunal's decision in Samrat Plywood Ltd., where it was held that such mixtures cannot be denied exemption by classifying them under Chapter 3909. The impugned orders denying exemption are unsustainable and set aside.
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Articles

• Understanding Fiscally Transparent Entities in International Tax Treaties
• Apex Court issued notice in SLP challenged on cross empowerment in investigation
• GRANT OF PRE-REFERENCE INTEREST IN ARBITRATION
• Nightmare on Tax Street: Safari Retreats Faces the GST Ghoul!
• Hostel accommodations are exempt from GST purview

Notifications

• Customs

• 65/2024 - dated 7-10-2024 - Cus (NT)
  Appointment of Common Adjudicating Authority

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• GST - States

• S. R. O. No. 891/2024 - dated 7-10-2024 - Kerala SGST
  Seeks to bring in force provisions of rule 2 of the Kerala Goods and Services Tax (Second Amendment) Rules, 2024

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• S. R. O. No. 890/2024 - dated 7-10-2024 - Kerala SGST
  Seeks to bring in force provisions of clause (iv) and (v) of rule 2 and rule 3 of the Kerala Goods and Services Tax (Third Amendment) Rules, 2023

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• S. R. O. No. 869/2024 - dated 27-9-2024 - Kerala SGST
  Amendments in Notification S.R.O. No. 926/2018 dated 22nd December, 2018

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• S. R. O. No. 868/2024 - dated 27-9-2024 - Kerala SGST
  Amendment in Notification No. S.R.O. No.371/2017 dated 30th June, 2017

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• S. R. O. No. 867/2024 - dated 27-9-2024 - Kerala SGST
  Amendment in Notification No. S.R.O. No.361/2017 dated 30th June, 2017

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• S. R. O. No. 866/2024 - dated 27-9-2024 - Kerala SGST
  Amendment in Notification No. S.R.O. No.360/2017 dated 30th June, 2017

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Circulars / Instructions / Orders

• SEBI - SEBI/HO/AFD/AFD-POD-1/P/CIR/2024/135 - dated 8-10-2024
  Specific due diligence of investors and investments of AIFs

News

• 12th Meeting of the India-UAE High Level Joint Task Force on Investments

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• 3rd edition of Kautilya Economic Conclave 2024 (KEC2024) concludes in New Delhi

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• Auction for Sale (re-issue) of (i) ‘7.04% GS 2029’ and (ii) ‘7.34% GS 2064’

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Case Laws:

• GST

• 2024 (10) TMI 376
  Refund claim - rejection on the ground of time limitation - scope of Section 161 of the CGST Act - dismissal of appeal by Assistant Commissioner despite Joint Commissioner's order - HELD THAT:- Taking notice of the fact that the Assistant Commissioner in his order dated 24.01.2024, notices that the Joint Commissioner had rejected his application for seeking rectification/clarification of the order passed in appeal, still proceeds to again dismiss the appeal on the ground of limitation, the Commissioner is directed to file an affidavit as to what steps have been taken against his subordinate, who has challenged his authority. However, no affidavit has been filed by him. The Assistant Commissioner seems to be asserting his authority over and above the order passed in appeal by the Joint Commissioner, who has already observed that the application has to be treated within time and has to be decided on merits - Assistant Commissioner, a subordinate officer has refused to examine the case on merits and again dismissed the application as time barred. Such an approach adopted by the subordinate officer is the result of the virtual failure of system of hierarchy in the CGST. If subordinate officers do not comply with the appellate orders, it would be something sort of administrative chaos. Such officers are required to be dealt with by the Department in a strict manner, so that they may not create a precedent for others to start insubordination. It also reflects in general public faith in filing appeals, which would be wavered if the appellate orders are not complied with. Litigation is also forced unnecessarily before this Court. Such insubordination requires to be dealt with more strictness. The Commissioner is directed to take appropriate departmental action against the concerned Assistant Commissioner, Sewa Ram, for his insubordination, by initiating proceedings for major penalty - petition disposed off.

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• 2024 (10) TMI 375
  Challenge to assessment order - Input Tax Credit has been disallowed only on the ground that the claims have been lodged beyond the period prescribed under Section 16(4) of the GST Acts - HELD THAT:- The impugned order passed by the respondent dated 31.01.2024 is set aside. The learned assessing/adjudicating authority/respondent would re-do the assessment by taking into account the amendment referred supra. The petitioner may submit their objection by way of reply, within a period of three (3) weeks from the date of receipt of a copy of this order along with the amendment and other details. If any such reply is filed, the same shall be considered and orders shall be passed, after affording reasonable opportunity of personal hearing to the petitioner. In respect of other issues, the impugned order shall remain undisturbed. The respondent shall withdraw the garnishee proceedings, insofar as it relates to the demand in view of denial of ITC in terms of Section 16(4) of the Act for the period 2017-2018 covered vide order, dated 31.01.2024. Liberty is granted to the respondent to continue with the garnishee proceedings in respect of any other demand covered by the said garnishee proceedings. Petition disposed off.

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• 2024 (10) TMI 374
  Condonation of delay of 53 days in filing appeal - appeal filed before the appellate authority - HELD THAT:- Taking note of the fact that there is no adjudication on merits by the appellate authority and by reasons of the Appellate Tribunal not being available it would be necessary for this Court to scrutinize the records and determine the factual issues in order to test out the order passed by the proper officer on merits. Having regard thereto and considering the fact that the entire amount of tax has already been recovered it would be prudent, at this stage, to remand the matter back to the appellate authority. The appellate authority having due regard to the direction passed herein shall hear out and dispose of the appeal on merit as expeditiously as possible, preferably within a period of six weeks from the date of communication of this order. Petition disposed off.

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• 2024 (10) TMI 373
  Challenge to summons on grounds of jurisdiction - parallel proceedings - whether Central Authorities i.e. the Respondent No.3 have the jurisdiction in view of Section 6(2) of the Central Goods and Service Tax, Act, 2017 - it is submitted that the Petitioner has no objection in the question of the investigation so carried out in respect to M/s IESA Sales Pvt. Ltd. - HELD THAT:- The Respondent No.3 shall be at liberty to carry out the investigation in pursuance to the summons issued on 21.06.2024 and 05.07.2024 insofar as M/s IESA Sales Pvt. Ltd. However, in view of the communication dated 09.08.2024 reference to which have been made hereinabove and the submissions so made by the learned Standing counsel for the CGST, the Respondent Authorities more particularly the Respondent No.3 shall not carry out any further investigation in respect to such transaction of the Petitioner with M/s Ridhi Industries and M/s Amazonite Steels Private Ltd. in respect to the period on the basis of which communication dated 09.08.2024 has been issued. Petition disposed off.

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• 2024 (10) TMI 372
  Seeking grant of anticipatory bail - bribery - legality of investigation carried out - respondent agency has failed to show or indicate why the custodial interrogation of the petitioner is required for the purpose of the investigation - HELD THAT:- The complainant has made a complaint about demand of bribe by petitioner-Suresh Chand Meena, GST Inspector. He has explicitly referred to a telephonic conversation in which the complainant was called by petitioner Suresh Chand Meena. The said visit is corroborated by entry No. 18 on the visitors register, as per which, complainant Surender Sharma had visited to GST office to meet petitioner at 12.00 noon. Even phone number of complainant is mentioned in the register which further corroborates the complainant s visit. Since the complainant was fed up of the demand, he made a complaint and taking advantage of secret passage in the premises and the absence of proper lighting in the said secret passage, petitioner fled away. Thus, it is a case where the petitioner is not entitled to bail. A perusal of the bail petition and the documents attached, prima facie points towards the petitioner s involvement and does not make out a case for bail. Any further discussions are likely to prejudice the petitioner; this court refrains from doing so. Petition dismissed.

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• 2024 (10) TMI 371
  Refund of Goods and Services Tax (GST) - challenge to Circular No.151/07/2021-GST dated 17.06.2021 as ultra vires the provisions of entry at Serial No.66(a) read with Paragraph 2(y) of the N/N. 12/2017-Central Tax (Rate) as well as the corresponding notifications issued under the Delhi Goods and Services Tax Act, 2017 - It is stated by the petitioner that the impugned refund rejection order dated 29.06.2022 was decided without considering the submissions of the petitioner and without granting any opportunity of personal hearing to the petitioner - Violation of principles of natural justice. HELD THAT:- The present petition is amongst a batch of petitions that were heard together [being W.P.(C) No.1298/2023, W.P.(C) No.1300/2023 and W.P.(C) No.1303/2023] and W.P.(C) No.1298/2023 was heard as the lead matter. The questions raised in the present petition are covered by the decision rendered today in W.P.(C) No.1298/2023 [ 2024 (5) TMI 177 - DELHI HIGH COURT] where it was held that 'The orders rejecting the petitioner s application for refund, which are impugned in this petition, are set aside.' Matter remanded to the appropriate authority for consideration afresh - petition disposed off.

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• Income Tax

• 2024 (10) TMI 370
  Income accrued in India or not? - receipt of guarantee charges by the appellant from its Indian subsidiaries in terms of an Intra Group Parental Guarantee and Counter Indemnity Services Agreement - Determination of source of income and the nature of services which are concerned with the extension of guarantees - HC [ 2024 (5) TMI 1415 - DELHI HIGH COURT] decided that income in the form of guarantee charges had in fact accrued and arisen in India. The guarantee charges clearly answered to the description of income accruing and which was explained by the Supreme Court to constitute a periodical monetary return coming in with some sort of regularity, or expected regularity, from definite sources . As we view the Intra Group Agreement, it becomes evident and apparent that the foundational source of those payments was the appellant s agreement to provide the service of parent company guarantees and counter indemnification facilities. These were services offered to the Indian subsidiaries to avail for their own commercial benefit . HELD THAT:- No reason to interfere with the impugned order. The special leave petition is hence, dismissed. Pending application(s), if any, shall also stand disposed of.

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• 2024 (10) TMI 369
  Conditional stay order directing payment of 20% of total tax demand for multiple assessment years under the Income Tax Act, 1961 . - HELD THAT:- We dispose of this Special Leave Petition by reserving liberty to the petitioner herein to file a review petition before the Division Bench of the High Court. As petitioner submitted that till the initial consideration of the review petition for any interim or final order, there may be stay of the impugned directions. It is needless to observe that the review petition shall be filed on or before 15.10.2024 before the High Court, which shall then take up the review petition for the purpose of considering the interim prayers on or before 04.11.2024. Both parties are directed to maintain status quo till 04.11.2024. Pending application(s) shall stand disposed of.

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• 2024 (10) TMI 368
  Nature of expenses - allowability of the varied license fee - revenue v/s capital expenditure - Recalling the judgment and restoring by de-linking the Civil Appeal [ 2023 (10) TMI 786 - SUPREME COURT] from the batch of Civil Appeal [ 2023 (10) TMI 786 - SUPREME COURT ] disposed of by this Court on the question of allowability of the varied license fee as a capital on revenue expenditure wherein the revenue appeals were allowed. HELD THAT:- As the allowability of a varied license fee as capital expenditure is concerned, the said issue is covered insofar as this assessee is concerned by the judgment [ 2023 (10) TMI 786 - SUPREME COURT] dated 16.10.2023 referred to above. However, this appeal is detagged from the rest of the appeals disposed of on 16.10.2023 and restored on the file of this Court for the purpose of considering the issue regarding the nature of royalty payment made by the appellant herein. In the circumstances, the Office is directed to de-tag this appeal from the rest of the civil appeals disposed of.

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• 2024 (10) TMI 367
  Carry forward and set off of business losses - right u/s 32 (2) is specifically made subject to the provisions of Sections 72 (2) and 72 (3) - HELD THAT:- It is clear from the reading of the provisions of Section 72 of the 1961 Act that even if the depreciation allowance under Section 32 of the 1961 Act, which was carried forward in terms of sub-section (2) of Section 32, is deemed to be a business loss for the purposes of Sections 71 and 72, it can be set off only against profits or gains of any business or profession and it cannot be set off against income from any other sources. Though the learned counsel for the petitioner took considerable efforts to establish that Section 72 is always subject to the provisions of Section 71 going by the express provisions in sub-section (2) of Section 32 permitting the carry forward of depreciation allowance subject to the provisions of Section 72 of the 1961 Act, we find no merit in the said contention taken by the learned counsel for the petitioner. There is absolutely no error in Ext.P6 warranting the exercise of jurisdiction under Article 226 of the Constitution of India. WP Dismissed.

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• 2024 (10) TMI 366
  Application for exemption u/s 11 and provisional registration u/s 12AB r/w section 12A (1) (ac) (vi) cancelled - erroneous communication of the notice without the petitioner being heard - impugned notice for processing the registration application was sent to an incorrect email address, leading to the order being passed without the petitioner's knowledge HELD THAT:- Admittedly no opportunity of reply or a personal hearing was granted to the petitioner before the petitioner s application could be rejected. Thus, we are of the opinion that it is in the interest of justice that the impugned order be quashed and set aside and the proceedings remanded to the AO, so that a fresh opportunity is made available by respondent no. 1 to the petitioner to reply to the notice. We permit the petitioner to reply to the show cause notice within two weeks from today. After the petitioner s reply is received, respondent no. 1 shall grant an opportunity of a hearing to the petitioner, of which intimation be given to the petitioner at least 7 days in advance by forwarding an email on both the email addresses of the petitioner as referred hereinabove.

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• 2024 (10) TMI 365
  Maintainability of appeal filed u/s 260A - Rejection of books of accounts - Addition of low GP - substantial question of law or fact - maximum sales are in cash and many of them were made without proper invoices - stock register was never produced negative stock was in the stock - HELD THAT:- ITAT as noticed that the assessee had produced stock statement where no negative stock had been shown and, therefore, it was concluded that how the AO had noted that the negative stock was not clear. The record produced showed that evidence was part of the account books furnished in support of the assessee's contention and the evidence had also been filed before the first Appellate Authority. Accordingly, it was held that it was not justified for rejecting the accounts simply because the names of the buyers were not mentioned in the bills of cash sales and it would not go to disbelieve the books of accounts since the assessee was trading in gold bullion. The day-to-day rates would have also been ascertainable from the rates declared by National market, Sarrafa Bazaars etc. Resultantly, a finding was recorded that the Assessing Officer was not justified in rejecting the book version of the assessee and to apply the profit rate of 0.54% without any good reason and no comparable instance had been given and there was no valid reason to doubt the record of the assessee and the assessee had maintained quantitative tally of the stock. Revenue had not been, thus, able to make out a case that the assessee had not adopted consistent method of accounts and the profit and gains earned by the assessee could easily be detected from the books of accounts. The appeal as such was dismissed. The above said discussion would go on to show that no substantial question of law as such arises for consideration and the present appeal is totally based on the factual matrix whereby the documents have been examined by the two authorities below, in detail. In such circumstances, we are of the considered opinion that the findings recorded by the Assessing Officer were against the record as everything had been produced before it by the assessee, as has also been observed by the Commissioner of Income Tax and the Tribunal. We dismiss the present appeal in the absence of any question of law arising which is the necessary pre-requisite for entertaining the appeal under Section 260A.

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• 2024 (10) TMI 364
  Addition made u/s 56(2)(vii)(b)(ii) - deemed gift in case of property purchase - cost of a property purchased along with his mother would be deemed equivalent to the amount on which stamp duty was paid by the assessee - whether the allotment letter by the developer is to be construed as an agreement or not? - HELD THAT:- A perusal of this ledger would indicate that all these amounts starting from 1st June, 2010 upto 2nd September, 2010 and payments have been made by the assessee by way of different cheques. All the payments were made through account payee cheque and part payments were made before 2nd September, 2010. Therefore, it is an incorrect interpretation by both the revenue authorities. This allotment letter is be equated to an agreement to sale. The agreement is not required to be a registered document. The only requirement in the law is that agreement should be followed by payments through banking channel, so that its veracity cannot be doubted. In the present case, the assessee has established the genuineness of the allotment letter by showing that payments were made through account payee cheques. Therefore, the valuation date for the purpose of any deemed gift is the date when first payment was made, in this case it happened around June, 2010. The ld. Assessing Officer has erred in taking the valuation of the property as on 28th October, 2014. Application of CBDT Circular No. 872 dated 16.12.1993 in determining the nature of allotment letters by developers - In the CBDT Circular No. 872 dated 16.12.1993 issue under this Circular was whether allotment of flats/houses by Cooperative Societies and other Institutions whose scheme of allotment and construction are similar to this of DDA should be treated as the cases of construction for the purpose of section 54 and 54F. Earlier there was a Circular bearing No. 471 dated 15.10.1986, wherein it was provided that cases of allotment of flats under the self-financial scheme of the Delhi Development Authority should be treated as cases of construction for the purpose of section 54 54F of the Income tax Act. The scope of this Circular was enlarged to cover other Institutions and Cooperative Societies meaning thereby that allotment letter by the developer was always been recognized as an agreement to purchase the house. Thus, we are also considered as a construction activity where benefit of set off of capital gain could be granted to the purchaser. If we apply that very analogy in the present case, then it would reveal that allotment letter given by the developer to the assessee way back in 2010 would be construed as an agreement of purchase between the developer and the assessee. Therefore, benefit of proviso appended to section 56(2)(vii)(b) would be available in the present case. The ld. Assessing Officer has committed an error by ignoring this aspect. If this starts from June, 2010 for which the assessee has made payments through account payee cheque is being construed as an agreement, then additions under section 56(2)(vii)(b)(ii) will not survive. Accordingly, we allow this appeal of the assessee and delete the addition. Appeal of the assessee is allowed.

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• 2024 (10) TMI 363
  Deduction u/s 80JJAA - late filing of audit report in Form 10DA - HELD THAT:- The issue is squarely covered by the decision of Hon ble Supreme Court in the case of CIT, Maharashtra Vs. G. M. Knitting Industries Pvt. Ltd [ 2015 (11) TMI 397 - SC ORDER] wherein the Hon ble Supreme Court has held that, even though it is necessary to file certificate in Form 10CCB along with the return of income, but even if the same has not been filed with the return of income, but the same was filed before the final order of assessment was made, the assessee was entitled to claim deduction u/s. 80-IB of the Act. Decided in favour of assessee.

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• 2024 (10) TMI 362
  Addition under the head capital gain - disallowing exemption u/s 54/54F - without giving the benefit of the cost of improvement - Assessee contended that the investment was made by the assessee in the residential property. Therefore, the same is eligible for deduction u/s 50/54Fand that the depreciable assets, if the period of holding exceeds 36 months, are also eligible for such deduction u/s 50/54F Whether the benefit of cost of improvement claimed by the assessee is eligible for deduction in calculating the amount of capital gain? - HELD THAT:- We note that admittedly the assessee has taken loan for the construction of the building amounting to Rs. 7.36 lakhs which was also accepted by the AO. It is a prevailing practice in the market that the banks do not give hundred percent loan to the parties for any project. In the given case the loan given by the bank stood at Rs. 7.36 lakhs and therefore it is implied that it shall be within the range of 70 to 80% of the total cost of the project. Accordingly, an inference can be drawn that the assessee must have also incurred the expenses for the construction of the house in the year 2003 to the tune of Rs. 20 to 30% of the total project cost. Thus, in the present facts and circumstances, we are of the view that the assessee should have also incurred the expenses to the tune of Rs. 5.16 lakhs approximately as claimed by him and accordingly we hold that the expenses claimed by the assessee for Rs. 12.52 lakhs towards the cost of construction of the building is eligible for deduction while calculating the capital gain long term capital gain with indexation. Cost of construction whether 2/4th of such expenses have been claimed by the assessee relating to the depreciable assets and the balance relates to the residential properties - Assessee has attached the receipt of the property tax demonstrating that 2 units of the impugned property were used for residential purposes. The copies of the receipt of the property tax are placed on pages 27 and 28 of the paper books, which were not disputed by the revenue authorities. Accordingly, we hold that the 50% cost of the improvement is eligible for indexation cost while calculating the capital gain. Whether the gain arising on the sale of depreciable assessed is eligible for exemption under section 54/54F? - Depreciable assets are subject to short-term capital gain in pursuance to the provisions of section 50 of the Act irrespective of the period of holding. However, there is no such distinction made under the provisions of section 54/ 54F and in the definition of long-term capital asset provided under section 2(29AA)/ 2(42A) - The gain arising from the depreciable asset shall be eligible for the exemption under section 54/ 54F of the Act if the period of holding exceeds 36 months as provided under the provisions of law. Accordingly, we hold that the assessee cannot be denied the benefit of exemption under section 54/ 54F of the Act with respect to the short-term capital gain arising from the sale of depreciable assets. Whether the investment made by the assessee in the new property is partly commercially in nature and partly residential in nature? - we note that assessee admittedly has been using the property for the residential purposes. Apart of such property indeed has been notified as commercially in nature but what we find from the facts on record is that the property primarily as a whole was used for the purpose of residence alone. The property marked as commercially in nature was never used for any commercial activity. As decided in Shri Amit Gupta [ 2005 (12) TMI 461 - ITAT DELHI] in the facts and circumstances of the present case the basement was capable of being used as residence. The fact that the assessee did not actually use the same for his residence will not disentitle him to the claim of exemption under section 54F of the Act. On the facts and the circumstances of the case, we are of the view that the exemption under section 54F deserves to be allowed. Accordingly, we direct that the same should be allowed. The appeal of the assessee is allowed. It is not out of the place to mention that the assessee in the written submission has accepted part of such property as commercial in nature and accordingly submitted that such part of the property can be excluded from the amount of deduction under section 50/ 54F of the Act. However, at the time of hearing before us the ld.AR requested not to exclude such investment as alleged commercial in nature by the revenue on the reasoning that such property was predominantly used for the residential purposes. Thus we are inclined to hold that the assessee has made investment in the residential property and therefore the same is eligible for deduction under section 50/ 54F of the Act. Hence the ground of appeal of the assessee is hereby allowed.

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• 2024 (10) TMI 361
  Accrual of income - treating the interest received along additional compensation on account of land acquisition as income chargeable to tax - assessee an individual and owns certain agricultural land along other co-owners (16 Co-owners). The land was acquired by the Government of Kerala in earlier year and compensation received against acquisition of land was claimed exempted u/s 10(37) - AO held that only the part of additional compensation shall be subject to exemption under section 10(37) of the Act, and the amount of interest is required to be taxed as income under the head other sources as per the provision section 145A(b) r.w.s. 56(2)(viii) Whether the interest received on enhanced compensation shall be exempted u/s 10(37) of the Actor chargeable to tax as income from other sources as per the provisions of section 56(2)(viii) r.w.s. 145A(b)? - HELD THAT:- In this regard we note that the issue on hand is squarely covered in favour of the assessee by the judgment of Hon ble Gujarat High court in the case of Movaliya Bhikhubhai Balabhai [ 2016 (5) TMI 488 - GUJARAT HIGH COURT] discussed the law laid down in the case of CIT v. Ghanshyam (HUF) [ 2009 (7) TMI 12 - SUPREME COURT] and the effect of amendment brought in by inserting clause (b) to section 145A of the Act as well as finding of Jagmal Singh v. State of Haryana [ 2013 (7) TMI 774 - PUNJAB HARYANA HIGH COURT] which was relied upon by the learned CIT(A). Thus, respectfully following the finding of the Hon ble Gujarat High Court, we hereby hold that the interest received by the assessee on enhanced compensation under section 28 of the Land Acquisition Act is not chargeable to tax as income from other sources. Thus, we set aside the finding of the ld. CIT(A) and direct the AO to delete the addition made by him. Hence, the ground of appeal filed by the assessee is hereby allowed.

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• 2024 (10) TMI 360
  Validity of reassessment proceedings initiated u/s 147 - period of limitation - HELD THAT:- As in the present case, the period of three years has elapsed from the end of the relevant assessment year and the order dated 22/04/2022 was passed u/s 148A(d) of the Act after obtaining the approval of the Principal CIT-27, Mumbai, we are of the considered view that the Revenue has not followed the mandatory provisions of the Act while initiating the reassessment proceedings and sanction of the Specified Authority is not in conformity with the law prevalent at the time of grant of sanction. Thus, in the present case, it is discernible that the notice under section 148 was issued on 22/04/2022 in contravention of the provisions of section 151 as the sanction of the concerned Specified Authority was not obtained. Accordingly, the notice issued u/s 148 of the Act is void ab-initio and bad in law and therefore is quashed. The entire reopening proceedings and assessment order passed u/s 147 r/w section 144B of the Act is also quashed. Appeal by the assessee is allowed.

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• 2024 (10) TMI 359
  Penalty u/s 271D - Violation of provisions of sec. 269SS - HELD THAT:- The provisions of section 271D of the Act have been perused which shows that the section has a specific bar to receive a sum more than 20,000/- from any other persons by way of loan or deposit. The provisions of the said Section does not deal with the receipt of sale consideration of immovable property in cash, but only deals with loan or deposit. Therefore, the provisions of section 269SS of the Act was wrongly interpreted by the authorities below, while imposing the penalty in the matter at hand, wherein the subject matter was receipt of sale consideration in cash in respect of selling the immovable properties. Consequently, we hold that AO had committed an error in invoking provisions of section 269SS r/w section 271D of the Act and imposing of the penalty. Accordingly, the penalty imposed by the Assessing Officer, confirmed by the CIT(A) is hereby quashed. Appeal filed by the assessee is allowed.

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• 2024 (10) TMI 358
  Determination of total income as NIL - Discrepancies in income declared by the assessee and additions made by the AO - Addition of based on cash deposits in joint bank accounts - Acceptance of capital account copies as evidence - HELD THAT:- The said action of the AO is against the Circular No.549 dated 31-10-1989 issued by CBDT, wherein it is stated that the assessed income should not be less than the returned income. The Hon ble Gujarat High Court has held in the case of Gujarat Gas Co. [ 2000 (4) TMI 19 - GUJARAT HIGH COURT] that the above said Circular issued by CBDT is binding upon the Assessing Officers. Accordingly, the AO was not justified in determining the assessed income as NIL in AY. 2011-12. Since the AO did not find fault in the capital account submitted by the assessee for this year, in our view, the same is required to be accepted. Accordingly, we set aside the order passed by the CIT(A) in AY. 2011-12 and direct the AO to accept the income returned by the assessee and also the capital account filed for that year. Addition u/s 68 - AO did not reopen the assessments of AYs. 2012-13, 2013-14 and 2015-16. In the capital account relating to AY. 2014-15, the assessee has shown receipt of gift from her elder son. CIT(A) has referred to the same and has disbelieved the same. We notice that the assessee has filed confirmation letter obtained from the son of the assessee, wherein he has confirmed that he has given gift of Rs. 3.00 lakhs to the assessee. In that letter, he has furnished his PAN number also. We noticed earlier that the bank accounts stand in the joint name of the assessee and her sons. Hence, the contribution made by the son for making cash deposit has been declared as gift. Hence, we do not find any reason to disbelieve the gift transaction. Assessee has shown opening cash balance of Rs. 15.34 lakhs as on 01-4-2014 out of which it is claimed that a sum of Rs. 10.00 lakhs has been deposited into the bank account. The closing balance as on 31-03-2015 was shown at Rs. 7,67,200/-. The above said amount constituted opening cash balance as on 01-04-2015 and in the year relevant to AY. 2016-17, the assessee has declared income of Rs. 2,90,000/- and the same has been accepted by the AO. The AO also did not make any addition of cash gifts of Rs. 45,600/- shown by the assessee. All these three amounts explain the sources of deposit of Rs. 10.00 lakhs made in the year relevant to AY. 2016-17. Accordingly, we are of the view that the assessee has explained the sources for making deposits - direct the AO to delete the addition made in those two years. Decided in favour of assessee.

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• 2024 (10) TMI 357
  Revision u/s 263 - applicability of section 56(2)(viib) - consideration received by the assessee company against the aggregate value of shares so issued, exceeded the total face value of such shares - HELD THAT:- AO passed the assessment order accepting the returned loss claimed by the Assessee. AO considered the allotment of shares between the holding and subsidiary companies at a face value of Rs. 10 and without there being any premium accepted the returned income. AO made necessary enquiry before passing the assessment order. Thus there is no question of inadequate enquiry made by the AO during the assessment proceedings. PCIT misconstrued the provisions of section 56(2)(viib) namely if a company not being a company in which public are substantially interested, received any consideration against issuance of shares and the consideration so received exceeds the face value of such shares, the difference between the aggregate consideration received and the fair market value of the shares becomes taxable in the hands of such company. PCIT failed to note that the assessee company is not a Public Ltd company and the shares were allotted only on the face value of Rs. 10/- without any premium, therefore the provisions of section 56(2)(viib) of the Act does not arise in the above transaction, resultantly the very basis of invocation of Revision proceedings itself is liable to quashed. AO made necessary inquiry during the assessment proceedings by calling for various information and after satisfied with the information received from the assessee company, passed the assessment order. In the above circumstances we do not find any merits in the Revision proceedings and the same is liable to be quashed. Thus the Grounds raised by the assessee are hereby allowed.

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• 2024 (10) TMI 356
  Revision u/s 263 - no addition u/s 56(2)(viib) - PCIT has held that the A.O has not made complete verification and inquiry in respect of consideration received by the assessee in excess of fair market value to be charged as income from other sources u/s. 56(2) (viib) and passed order without application of mind - HELD THAT:- The assessee has issued compulsory convertible preference shares at a price of Rs. 416.69 per share as against the fair market value of Rs. 414 determined as per Rule 11UA. There is difference of 0.65% only in the issue price and FMV. The A.O during the course of assessment proceedings has issued notice u/s. 142(1) and in question No.9 has asked for a detailed note on determination of the fair market value of the issued share as per section 56(2)(viib) and the assessee has submitted the details after which the A.O has not made any addition. ITAT, Delhi Bench in the case of Sakshi Fincap Pvt. Ltd. [ 2024 (5) TMI 1232 - ITAT DELHI] has held that the amendment brought in Rule 11UA was introduced to mitigate hardship faced by taxpayers by the unintended invocation of section 56(2)(viib) r/w Rule 11UA and therefore, the same is a curative amendment. The difference in the fair market value and the issue price of compulsory convertible preference shares is only 0.65%, therefore as per Rule 11UA issue price is deemed to be fair market value and hence no scope for addition required to be made u/s. 56(2)(viib) of the Act. In order to invoke Section 263 of the Act the twin condition of erroneous and prejudicial to the interest of Revenue are to be satisfied. In the present case, the second condition that order is prejudicial to interest of revenue is not being satisfied. We, therefore do not agree with the Ld PCIT that order the order passed by AO is prejudicial to the interest of revenue. We, therefore set aside the order passed by Ld. PCIT. Assessee appeal allowed.

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• 2024 (10) TMI 355
  Depreciation on goodwill - CIT (A) disallowing the claim at the rate of 25% on the Written-down value of goodwill - assessee was amalgamated with a company and consideration paid by the assessee in excess of the cost of net assets acquired by it was treated as goodwill and was shown as asset in the balance sheet - HELD THAT:- Since, F.Y. 2006-07, assessee has been consistently claiming depreciation on the goodwill created during the F.Y. 2006-07 and depreciation has been claimed on the Written-down value of the goodwill asset as on the opening of each year. In the instant year also, assessee has claimed depreciation at the rate of 25% on the opening WDV of goodwill on 1st April, 2015. Both the lower authorities though denied the claim of the assessee, we however observe that this issue has travelled before this Tribunal on multiple occasions in assessee s own case and the Revenue s appeal on the very same issue for A.Y. 2011-12 and 2012-13 has been dismissed by this Tribunal. The above finding of this Tribunal remains uncontroverted by the ld. DR by way of placing any binding precedence in its favour. We also notice that similar view was recently taken by this Tribunal in another case of Primetals Technologies India Pvt. Ltd. [ 2024 (5) TMI 1473 - ITAT KOLKATA] and therefore, taking consistent view as the facts and issue remain same as dealt by this Tribunal for A.Ys. 2012-13 and 2013-14, we are inclined to decide this appeal in favour of the assessee.

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• 2024 (10) TMI 354
  TDS u/s 195 - commission paid to the foreign agent on account of non-deduction of TDS u/s. 40(a)(i) - HELD THAT:- In this case, the non-residents agents have rendered their services outside India in connection with procurement of sale. All the agents have overseas offices, and they were not having any permanent establishment in India. At the time hearing DR has not brought any material on record suggesting that the non-resident agents are having any permanent establishment in India or services were provided within India. In absence of such finding it is held that the commission income earned by the foreign agent cannot be deemed to be accrue or arise in India. Regarding the applicability of section 195 we observe that once the income is not taxable, there is no liability of deduction of tax on the part of the assessee, therefore, it was not applicable for the assessee to deduct tax. There was no violation of the provision of section 195. Accordingly, this ground of appeal of the assessee is allowed.

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• 2024 (10) TMI 353
  Addition of deemed dividend u/s 2(22)(e) - as argued assessee is not a registered shareholder - HELD THAT:- It is the admitted position as arising from the order of the learned CIT(A) that the assessee is not a registered shareholder in the company named Nikunjam Constructions Pvt. Ltd. This fact could also be verified from the findings of the CIT(A) reproduced in the preceding paragraph. Thus, the assessee is not a shareholder and therefore the provisions of section 2(22)(e) of the Act cannot be applied. See M/S. AMIT INTERTRADE PVT. LTD [ 2022 (2) TMI 1397 - ITAT AHMEDABAD] as held the assessee in the case on hand was neither the beneficial owner of the shares nor registered owners of the shares, thus no addition u/s 2(22)(e) required. Thus provisions of section 2(22)(e) cannot be applied in the given set of facts as the assessee on hand is not a registered shareholder of the company - Decided in favour of assessee.

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• 2024 (10) TMI 352
  Rectification petition rejected - interest u/s. 244A of the Act was not calculated properly on the refund issued and requested to grant interest from the period April 2010 onwards - As aggrieved by the said rectification order u/s.154 the appellant filed appeal before the Ld. CIT(A) which was also dismissed on the ground that the appeal was not filed electronically and the appeal was filed manually During the appellant proceedings before us, as submitted that the CIT(A)has not heard the case on merit and the Ld. CIT(A) should have considered the appeal on the basis of the documents produced before him even though in the physical form. HELD THAT:- Appellant submissions made before us and we consider it proper to direct the Ld. CIT(A) to take into consideration all the documents filed by the appellant and decide the issue on the merit of the case by providing adequate opportunity of being heard to the appellant. In the result, the appeal is allowed for statistical purpose.

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• 2024 (10) TMI 351
  Assessment u/s 153A - assessee has declared purchases from the persons who were simply issuing bogus purchases vouchers and there were no export sales by assessee and only laundering of unaccounted money was made for claiming deduction u/s 80HHC by bringing the foreign remittance in India through Hawala - second round of litigation - As argued genuineness of purchases made from other then the parties listed herein below cannot be doubted as there is nothing incriminating against such parties in the assessment order - CIT (A) confirmed the addition of income being 25% of unverifiable purchases treating the same to be made to inflate the export profit and directed to treat the same as Income from other sources HELD THAT:- We have heard the rival contentions and perused the material available on record. The bench noted that in this case the Hon ble jurisdictional while allowing the appeal of the revenue set aside the assessment to be done a fresh. While doing so the Hon ble High Court has followed the finding so given in the case of M/s. Gems Paradise [ 2016 (11) TMI 1400 - RAJASTHAN HIGH COURT] directing the assessing officer to verify the transactions are genuine or not. The bench noted that in that set aside proceeding the ld. AO did not verify the issue which was set aside by the High Court and the same addition which was done in the first round of litigation was done. Even the ld. CIT(A) also given the same finding that was recorded in the earlier order issued in the first round. Rejection of books of account - Section 145(3) can be invoked when the Assessing Officer is not satisfied about the correctness or completeness of the accounts of the assessee, when the method of accounting provided in Section 145 (1) has not been regularly followed by the assessee and when the accounting standards notified u/s 145 (2) have not been regularly followed by the assessee. From the observations recorded in the order of the lower authority none of the condition is satisfied and same is also not evident from the finding of the lower authority. Not only that the bench also observed that when the provision of section 145(3) is to be invoked the assessment is to be completed as per the manner provided in section 144 and the proper opportunity is required to be given by pointing out the defects in the books of account which we observe that the same is not followed and thus the order is not correct. To drive home to this contention we get strength to support our view based on the provision of the Act and decision of Pink City Developers [ 2017 (11) TMI 1082 - RAJASTHAN HIGH COURT] Based on the discussion so recorded even in the second round of litigation the ld. AO could not find any defects in the books of account, we considered ground no. 2 in favour of the assessee. Estimation of income - addition @ 25% of unverifiable purchases - Respectfully, following the rate of gross profit to be estimated in case where the issue of bogus purchase are involved and the estimation of profit we noted that in all the case the profit is higher that what is decided by the High Court. Even the high court while dealing with the case noted that where the assessee is shown higher profit no relief will be granted then what profit is disclosed by the assessee. Based on this observation we see no reason to sustain the estimate addition @ 25 % of purchases confirmed by the ld. CIT(A). In the result we follow the decision of Clarity Gold Private Limited [ 2017 (9) TMI 1640 - RAJASTHAN HIGH COURT] no addition can be made even if the purchases held as unverifiable as the gross profit rate are higher in the year under consideration, then what is decided by the jurisdictional high as profit to be decided in such cases. The bench also noted that the assessee in his submission submitted GP chart of other comparable cases, which shows the GP declared by the assessee is in conformity of other parties in the same trade, this submission of the assessee has not been controverted by the revenue on facts. We also take note of the fact that the search party recorded the statement of Shri Ramesh Manihar u/s 132(4) of the Act, who is one of the partner in the assessee firm and he stated the profit rate is about 50% in his business of M/s. Govindam Exports. This statement submitted before the search party also confirms the GP rates declared by the assessee. Based on the discussion recorded herein above we hold that no further addition deserves to be made in the case of assessee on account of unverifiable purchases. Thus, ground no. 3 raised by the assessee is allowed.

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• 2024 (10) TMI 350
  Computation of actual cost of assets for the depreciation purposes - Nature and character of subsidy / grant in aid - Reduction of grant in aid/ subsidy from the cost of machinery for the purpose of calculating depreciation - DR strongly contended that grants in aid were strictly for technical civil works and plant and machinery for the project and the same is liable to be deducted while arriving at the cost of such asset for purpose of determining cost of asset for depreciation purpose in view of express provision contained in explanation 10 to Section 43 Whether the grant in aid received by the assessee during the year under consideration is liable to be reduced / deducted from the cost of assets i.e; plant and machinery / technical civil work for purpose of arriving at the actual cost of such assets for the depreciation purposes? - HELD THAT:- AO has rightly noticed that there is a mandate in Scheme (scheme of Infrastructure development for setting up hot water dip treatment) that grant in aid is to be spent only on Technical Civil Works and Plant Machineries for the project and has held that same shall go to reduce the cost of acquisition of such assets. Thus the concept of actual cost recognised under section 43(1) read with explanation 10 has rightly been applied. See Dalmia Cement (Bharat) Ltd. [ 2007 (6) TMI 237 - ITAT DELHI-C] Actual cost is required to be determined in fact of this case u/s 43(1) to be read with explanation 10 for purposes of Section 32. We are interpreting the fiscal statute as it is and are going by plain and simple meaning as the language utilised by the Parliament is clear and lucid. Needless to state such language is required to be construed as it is and that too strictly with no leeway whatsoever. We have gone by the fiscal rule of literal construction of Section 43(1) on actual cost r.w. Explanation 10. We have followed the path of language itself as it is clear and lucid and requires no assistance to ascertain it s meaning. We also hold that Ld. AR has failed to demonstrate before us in any manner whatsoever as to how the order of ITAT Patna Bench in case of Dayal Steel Ltd. [ 2017 (7) TMI 952 - ITAT PATNA] is applicable to the facts and circumstances of the present case. In the instant case grant in aid where for the plant and machinery and technical civil work. Both the scheme documents expressly say so as aforesaid. The Parliament in its collective wisdom be it in the terms of the scheme and as per Income Tax Act, 1961 does not intend to give double benefit to the assessee one in the form of grant in aid for the plant and machinery and technical civil work and other in the form of value / cost of asset eligible for depreciation by not reducing its value by grant in aid amounts. It is for this reason the very definition of actual cost of assets under section 43(1) r.w. Explanation 10 means that the actual cost of the assets to the assessee reduced by that portion of cost thereof, if any, as has been met directly or indirectly by any other person or authority. This is coupled with Explanation 10. Explanation in statute clarify what is meant in substantive portion of the statute. AR has failed to address us on Section 43(1) and Explanation 10 during the course of the hearing to demonstrate before us as to how the strict formula envisaged by law would not be applicable to the assessee. AR also has failed to demonstrate before us as to on what basis assesee holds the view that grant in aid is not required to be reduced. Grant in aid is towards plant and machinery and technical civil work is therefore required to be deducted / reduced from the value/cost of the assets eligible for depreciation It can therefore be said in law that grant in aid basis the scheme (supra) is directly attributable to meet plant and machinery and technical civil works and hence such portion of it is to be reduced / deducted. The judgement of the Hon ble Bombay High Court in case of Pr. CIT Vs. M/s Welspun Steel Ltd. [ 2019 (3) TMI 397 - BOMBAY HIGH COURT] relied upon is therefore distinguishable in view of the peculiar facts and circumstances of the present case. The nature of incentive in that case was in the form of sales tax benefit whereas in the instant case it is directly towards plant and machinery and technical civil works which are eligible for depreciation by virtue of the concept of the actual cost under section 43(1) r.w. Explanation10. It cannot be said that the grant in aid is only a measure under the scheme but it can correctly be said that grant in aid is for plant and machinery and technical civil work only. Appeal of the Assessee is dismissed.

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• 2024 (10) TMI 349
  Denial of exemption u/s 11 - charitable activity or not? - objectives of the society are commercial in nature and the income received by the society from its activities in the form of trade and commerce is more than Rs. 10 Lakhs - HELD THAT:- Assessee is established by Department of Electronics, Government of India and form the permission of Microwave Electronics Ltd. to make the country as reliant in the field of Micro Wave Electronics. The assessee is an autonomous body for this purpose. In the earlier years, the co-ordinate Bench has restored the appeals of the assessee to the file of the AO to decide in accordance with the decision of Hon'ble Supreme Court in case of Ahmed Urban Development Authority [ 2022 (10) TMI 948 - SUPREME COURT ]. In the stated proceedings, the learned Authorized Representative has accepted the claim of the assessee and for all these years assessed it at the return of income. Subsequently for A.Y. 2016-17, 2017-18 and 2022-23, also the earlier years were passed after scrutinizing the case of the assessee and benefit of section 11 and 12 of the Act, was allowed. Therefore, for this year, the appeal of the Revenue does not stand on strong footing for the reason that the AO in series of the assessment orders passed and restored proceedings or in independent assessment proceedings has accepted the claim of the assessee. It is not the claim of the Revenue that the fact for this year or the law in this year is different than those assessment years. Decided in favour of assessee.

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• 2024 (10) TMI 348
  Levying penalty u/s 271(1)(c) - capital gain is arisen on account of re-computation of capital gain on sale of land at Pujanahalli on which according to the AO, there was furnishing of inaccurate particulars of income and concealment of income as assessee has furnished the wrong valuation as on 1.4.19981 - whether the penalty proceedings is initiated for furnishing of inaccurate particulars of income or concealment of income under the facts and in the circumstances of the Appellant s case? HELD THAT:- Value adopted for determining the cost of acquisition so as to compute the capital gain is the stamp duty value for registration of the said property as on 17.11.1980. In our opinion, the valuation adopted by the assessee is only on the estimation basis and that cannot be basis for levy of penalty u/s 271(1)(c) of the Act. Capital gain has been computed by assessee on the basis of estimation of cost of acquisition as on 1.4.1981 and in the opinion of ld. AO, it was excessive and not based on any positive material and he has adopted the fair market value on the basis of value mentioned in the sale deed of that impugned property as on 17.11.1980 without referring the matter to the DVO and thus the computation of capital gain has been made on the basis of material furnished by assessee itself and already available on record, this was not fit case for imposition of penalty u/s 271(1)(c) of the Act. Impugned penalty has been levied by the ld. AO merely on the basis of findings in the quantum proceedings and have not independently examined the matter in the penalty proceedings u/s 271(1)(c) of the Act, even on this procedural count, the penalty levied cannot be sustained though the addition has been sustained by the Tribunal, that by itself does not prove that there is any conclusive and absolute material to suggest the assessee has concealed any income and or furnished inaccurate particulars of income. In our opinion, penalty cannot be levied in this kind of situation as there was no evidence to suggest that claim of assessee was bogus or malafide and disallowance of the claim itself cannot be reason to levy penalty. The addition of capital gain is computed on account of difference in estimation of cost of acquisition between the claim made by assessee and the value adopted by the ld. AO. The ld. AO not able to prove that there was any willful or gross negligence on the part of assessee resulting thereby either any concealment of income and or furnishing inaccurate particulars of income. To levy penalty for concealment, it is necessary that there must be either concealment of income and or furnishing inaccurate particulars of income by the assessee. As the AO or appellate authority arrived at different estimates of income of the assessee, that itself cannot be said that assessee concealed particulars of income and or furnished inaccurate particulars of income so as to attract penalty. Penalty u/ 271(1)(c) was not imposable in relation to estimated additions because the factum of either concealment of income or furnishing inaccurate particular of income, were not proved. Decided in favour of assessee.

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• 2024 (10) TMI 347
  Addition u/s. 68 - unexplained cash credit for cash deposited in a bank during the demonetization period - DR submitted that the assessee is not having any history of business and, therefore, the transaction in jewellery especially that of gold is not justifiable only through the mere production of few bills in gold transaction. HELD THAT:- AO has accepted the transactions about purchase and sale of jewellery in gold and silver without raising any doubt regarding books of account, purchase and sale stock registers and the bills produced by the assessee. The cash transaction before the demonetisation period was also revealed by the assessee as the period before the demonetisation was also the period of Diwali and that itself shows that why the cash transaction took place in that particular period. There was no doubt created by the AO in respect of purchase and sale of stock register as well as books of account. Since the stock register as well as the family evidences produced by the assessee are found to be genuine, the cash transaction has also been proved by the assessee being genuine transaction. These factual aspects were totally ignored by the AO and CIT(A). Therefore, the appeal of the assessee is allowed.

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• 2024 (10) TMI 346
  Delay filling appeal against Orde dismissing the assessee s appeal contesting his assessment u/s 143(3) - 346 day delay in filing the appeal - HELD THAT:- There is, to begin with, without doubt, no explanation for the 90 day period, i.e., even in excess of the 60 days statutorily allowed for filing the appeal, taken by the assessee even after the knowledge, on 28.10.2022, of the appeal being already delayed by months. Coming to the aspect of the period up to 28.10.2022, the Revenue s report, uncontroverted, disproves the assessee s affidavits dated 24.01.2023 and 18.04.2024. Per the latter, the assessee, in contradistinction to the former, avers of the date of his knowledge of the passing of the assessment for the relevant year as 24/11/2022, this time on the basis of the communication of the penalty orders u/ss. 270A/271AAC. The same, not called for, is incomprehensible and reprehensible. Once the assessee admittedly became aware of his assessment for the relevant year on 28/10/2022, how can the said date shift to another on the basis of another incident, again informing him the date of the assessment. No reason for the revised affidavit, which also bears no reference to the earlier, has been furnished. Much less called for by the Bench, the second affidavit, as it appears to us, stands filed to meet the observation by the Bench as to the assessee, rather than acting with alacrity in view of his appeal being already delayed, takes more than the regular time. The affidavit, clearly false, and filed on the sly, without bringing the changed date to the notice of the Bench, deserves highest condemnation. An affidavit is generally furnished at the instance of the Court where facts in the personal knowledge of the deponent cannot be otherwise proved, and the deponent is, before acceptance of his averments therein, liable to be cross-examined on his deposition. This has been abused by Sri Padmanathan to mislead the Court with untruth. Rather, on the difference in date, i.e., 14.11.2021, instead of 14.12.2021, being brought to his notice, he clarified it to be a typing error and, further, on being informed that it could not be so inasmuch as the affidavit was supported by a system report for the period 10.11.2021 to 15.11.2021, annexed along with, he, changing stance once again, would submit that he be allowed time to procure an affidavit with reference to 14.12.2021. Upon this, he was unable to answer as to how he could state so without consulting the record. Time was allowed, making it clear that he would be required to, instead, and in view of the definite evidence furnished by the Revenue, produce some evidence and, further, the deponent liable to be questioned. Needless to add, no material or deposition was advanced on the next date of hearing, where at it was closed. The affidavits, an explanation for condonation of delay, being found false, there is, thus, no explanation for the delay. No reasonable cause, thus, attends the delay, meriting condonation. Assessee appeal dismissed.

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• 2024 (10) TMI 345
  LTCG - denial of exemption u/s 54F - non-completion of construction within the stipulated period - assessee entered into a Joint Development Agreement ( JDA ) pursuant to which she was to receive a residential villa in exchange of her plot of land - HELD THAT:- The dispute among the partners of the developers arose only after 25.10.2021 which is beyond the period of 3 years from the date of transfer of the capital assets which happens pursuant to the JDA on 31.5.2016. Admittedly, there is a delay of more than 7 years in completing the construction as against the period of years u/s 54F. The explanation given by the assessee that there was dispute among the Partners is not substantiated and rather it shows that the dispute arose only in the month of October, 2021 i.e. after a lapse of 5 years. No evidence has been filed to prove that some steps were taken to enforce his/her right pursuant to the agreement dated 31.05.2016 by the assessee for a period of more than 7 years. No email or correspondence has been brought to our notice demonstrating that serious efforts were made by the assessee to ensure due completion of the construction within the time granted by the statute. Assessee should be careful and vigilant in enforcing his right which are missing, in the present case. As we do not find any reason to interfere in the findings given by the AO/DRP and accordingly both the appeals of the assessee are dismissed.

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• 2024 (10) TMI 344
  Denial of Exemption u/s 11 - Charitable activity or not - as per AO some part of income was applied on objects which are not in compliance to the objects of the assessee - assessee trust is a trust registered u/s 12A - Case of the assessee was selected for Limited Scrutiny and the notice u/s 143(2) of the Act was issued HELD THAT:- We observe that the revenue has allowed the same in the assessment years 2013-14 and 2014-15, may be without verification. This assessment year, on verification, it came to the notice of the AO that the above said trust is not registered under Income Tax and donating to such unregistered trust is not treated as valid donation. With the above findings, he has proceeded to reject the whole claim of exemption u/s 11, without bringing on record how the donation given to the unregistered trust is violation of objects and functions of the assessee trust. He has proceeded to grossly reject the claim over-looking the actual charitable activities carried on by the assessee during the impugned year. After careful consideration of the findings of CIT(A) and relief granted to the assessee trust in the subsequent assessment year, the AO himself has allowed the claim of the assessee u/s 11 and restricted the donation paid to AIMC alone for disallowance. Therefore, there is no merit in denying the benefit u/s 11 of the Act without considering the actual charitable activities of the assessee trust. With the above observations, we do not see any reasons to disturb the findings of the CIT(A). Accordingly, the grounds raised by the revenue are, accordingly, dismissed.

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• 2024 (10) TMI 343
  LTCG - FMV determination - CIT(A) confirming action of AO in adopting Fair Market Value (FMV) as per DVO s report without computing FMV using reverse indexation method - AR s only contention is such that the lower-authorities ought to have computed FMV on the basis of reverse indexation method - HELD THAT:- But the modus in this method is such that the present sale-consideration of sold asset is divided by present inflation index and multiplied by inflation index as on 01.04.1981. During hearing, we have clearly indicated to AR that this method is the last resort when there is no other basis available for determination of FMV as on 01.04.1981. And in the present case, the AO has made a reference to DVO and the DVO has given a detailed working of his estimation and the DVO has also mentioned the method of valuation adopted by him as FMV by Collectors Guidelines for registration of immovable property . Therefore, there is a good working done by DVO on the basis of a strong undisputable method. Hence, in this situation, the reverse indexation method cannot be allowed. AR could not controvert this. Consequently, we do not find any error in the order of AO in accepting FMV of Rs. 4,43,000/- reported by DVO. Accordingly, this ground is also dismissed. Restricting the cost of improvement as against the cost of improvement claimed by assessee - We find that even while giving benefit of assessee s own withdrawals, the CIT(A) has made a mistake. Admittedly, the assessee has incurred cost of Rs. 94,136/- in FY 1989-90, Rs. 1,59,494/- in FY 1990-91 and Rs. 81,440/- in FY 1991-92 but the CIT(A) has allowed deduction of first two items only and not allowed deduction of Rs. 81,440/- incurred by assessee during the FY 1991-92. Therefore, to that limited extent, there is a mistake in CIT(A) s order. Hence, we allow claim of cost of Rs. 81,440/- incurred by assessee during the FY 1991-92 with indexation benefit in addition to what has already been allowed by AO and CIT(A). AR pointed out that the AO has made a mathematical mistake and allowed deduction of total indexed cost of improvement at Rs. 3,01,627/- (+) 4,82,863/- = Rs. 6,41,370/- whereas the total comes to Rs. 7,84,490/- Thus, there is an apparent mistake in the order of AO. We direct the AO to modify his assessment-order to remove this mistake and allow correct amount to assessee. In the final conclusion, we direct the AO to allow a further deduction of cost of improvement of Rs. 81,440/- in FY 1991-92 incurred by assessee with indexation benefit as per law and also to remove the mistake narrated in preceding para. This way, the assessee succeeds partly.

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• 2024 (10) TMI 342
  Denial of exemption u/s 11 12 - assessee had charged inadequate rent from the specified person with in the meaning of section 13(3) of the Act which is a violation of section 13(2)(b) - CIT(A) deleted addition - HELD THAT:-

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• 2024 (10) TMI 341
  Validity of appeal as memo in form 36 was not verified as required by Rule 47(1) of the Income Tax Rules, 1962 - Ex-parte assessment order passed without service of proper notice to the assessee and in the name of a different entity - Addition of bogus accommodation entries - no response on behalf of the assessee to the notice issued u/s 148 as well as section 142(1) the AO framed the assessment u/s 144 r.w. section 147 HELD THAT:- The appeal u/s 253(1) to the Tribunal shall be made in form no.36 and the grounds of appeal shall be duly verified and appended thereto by the person specified in Rule 45(3) of Income Tax Rules 1962. Rule 45(3) prescribes that the form of appeal (Form No.35) shall be verified by the person who is authorized to verify the return of income u/s 140 of the Act as applicable to the assesse. Thus, form no. 35 shall be signed and verified by the person who is authorized to verify the return of income u/s 140 of the Act. Section 140 of Income Tax Act prescribes the person who is authorized/competent to verify the return of income and as per clause(c) of section 140 the Managing Director of a company is the person competent to verify the return of income of company and also memo of appeal in form 36 in view of section Rule 47(1) r.w. Rule 45(3) of the Income Tax Rules 1962. In case the managing director is not available to verify or there is no managing Director then by any Director of the company. In case in hand the form 36 is verified by the Authorized Representative (CA) of the assesse company and not by the Managing Director or Director of the assesse company. Form number 36 has not been verified by the person who is prescribed as per section 140 r.w. Rule 47(1) and Rule 45(3) of the Income Tax Rule 1962 and consequently the present appeal of the assesse is not valid appeal. Accordingly the appeal of the assessee is dismissed in limine being not a valid appeal. Appeal of the assessee is dismissed.

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• 2024 (10) TMI 340
  Denial of grant of final registration u/s 12/12AB and 80G - claim denied as assessee is not registered with the authority prescribed under the Rajasthan Public Trust Act, 1959 - HELD THAT:- The reasons advanced by the CIT(E) while rejecting the application of the assessee are curable in nature and considering the peculiar facts of the case that the assessee has already applied for Registration as per Rajasthan Public Trust Act. Thus, considering that aspect of the matter the liberal view of the matter is required to be taken in this case as the defect pointed out are not that much serious and a chance is given to the assessee to cure the defects pointed out by the ld. CIT(E). Considering this aspect of the case, the Bench does not want to go into merit of the case but it is imperative that the assessee must be provided adequate opportunity of being heard and be given a fair chance by the ld. CIT(E) to cure the defect / non submission of the certain information. It is also noteworthy to mention that approval u/s 80G cannot be granted without registration u/s 12AB of the Act. In view of the above, both the appeals of the assessee relating to Section 12AA and 80G of the Act are restored before the ld. CIT(E) for afresh consideration - Appeals of the assessee allowed for statistical purposes.

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• Customs

• 2024 (10) TMI 339
  Requirement to comply with the statutory mandate of Section 104 of the Customs Act, 1962, if the respondent-customs authorities seek to arrest the petitioner - HELD THAT:- The petitioner states that he will not press the present petition but it should be clarified that if the respondent-customs authorities seek to arrest the petitioner, they shall comply with the statutory mandate of Section 104 of the Customs Act, 1962. The Special Leave Petition is disposed of.

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• 2024 (10) TMI 338
  Seeking recall of the impugned orders and restoration of their appeals - HELD THAT:- By exercising jurisdiction under Article 142 of the Constitution, the appellant(s) herein is permitted to file necessary application(s) for recall of the impugned order(s) and seek restoration of their appeals before the Customs, Excise Service Tax Appellate Tribunal, Hyderabad. Appeal disposed off.

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• 2024 (10) TMI 337
  Seeking benefit under MEIS Scheme - denial of benefit on the ground of inadvertent mistake or not - Petitioner submits that inadvertently, the entry was left blank by the employees of the Customs Broker who omitted to fill in the relevant entry regarding the claim for MEI Scheme - HELD THAT:- The grievance of the Petitioner is that despite being eligible, it is not getting benefit under the MEI Scheme in the sum of Rs. 23,37,185/-. It is the admitted case of the parties that in view of the inadvertent error the shipping bills have not been processed by Respondent No. 1. The Counter-Affidavit of Respondents also sets out that in view of the fact that the EDI shipping bills of the Petitioner were left blank and the electronic transmission in the automatic environment assumed the Shipping Bills No and accordingly proceeded to reject the case. Given that the Respondents have not examined case of the Petitioner, in view of the inadvertent error, the Court deems it expedient to direct the Respondent to undertake the examination of the 16 EDI shipping bills of the Petitioner afresh, treating its submissions as a Yes - The Petitioner and/or his authorised representative will be given an opportunity to be present for a personal hearing in the matter. The Petitioner shall place before the Respondent/Authority all relevant documents and clarifications, as may be sought by the Respondent. Petition disposed off.

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• 2024 (10) TMI 336
  Failure to fulfil export obligation - rejection of appeal on the ground that the Petitioner did not produce proof of export made - invocation of jurisdiction of this Court seeking to direct the Respondents to regularize the exports made by Petitioner during the valid EOP and extended EOP - HELD THAT:- It emerges that the Petitioner failed to submit the original shipping bills to substantiate the claimed exports, instead providing photocopies, which were not accepted for meeting the export obligation. Of the seven shipping bills for which photocopies were submitted, two fell outside the extended export obligation period, and two were Drawback Shipping Bills, for which the customs authority had rejected the conversion request. The Petitioner also claimed that the Duty Exemption Entitlement Certificate Book No. 10967 had been lost but was unable to provide a satisfactory explanation for this before the Appellate or Reviewing Authority. Consequently, the Petitioner has not submitted the required documents to demonstrate compliance with the export obligation. The Petitioner did not provide a written response to the stated objections but, through a communication dated 22nd September 2013, requested a personal hearing to explain the issues raised by the Appellate Authority. However, as noted in the order issued by the Appellate Authority, despite being granted several opportunities for a personal hearing and directed to submit the required export documents, the Petitioner failed to comply. Thus, it is evident that the Petitioner has failed to provide the necessary documents to demonstrate that the Customs Authority had agreed to convert the shipping bills from Drawback Shipping Bills to DEEC Shipping Bills. Furthermore, they have not submitted the required documents to prove fulfilment of the export obligation, nor have they paid the prescribed customs duty. Under these circumstances, the three orders rejecting the review petition cannot be deemed arbitrary, nor do they provide sufficient grounds for this Court to exercise its jurisdiction under Article 226 of the Constitution of India, 1950 - no interference by this Court is warranted, as the reasoning provided in the afore-mentioned orders appears to be reasonable and justified based on the facts presented. Petition dismissed.

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• 2024 (10) TMI 335
  Diversion of raw sesame seeds imported duty free - Import of duty-free Sesame seeds under Advance Authorization Scheme (A.A.S) under Notification No. 96/2009-Cus dated 11.09.2009 and subsequent export of processed Sesame seeds against Advance Authorization - whether allegation that goods imported under various advance authorization were not used for the specified purpose but have been sold in local market (diversion of imported raw sesame seeds and claim of process loss) or otherwise? HELD THAT:- The party claims to have made up exports by procuring indigenous duty paid goods and by claiming only 1% SION stipulated norm. Customs has also discharged the bond furnished in this regard after due consideration of all facts. For alleged diversion of raw (natural, seasame seeds against 4 contract notes, as was pleaded before Original authority also, 3 notes were cancelled and against 4th contract notes, hulled seasame seeds were supplied, therefore diversion is not proved beyond allegation. The documents relied upon by the department fall flat on their face in attempting to evidence alleged diversion. Even, broker in his statement mentions that seeds were not imported but were of Somalia quality and not Somalian origin as also pointed out by the adjudicating authority. It is also found that clarification about indigenous raw material used for short fall as well as revision of norms was on specific reference by the appellants as well as the relevant export promotion council, same was therefore rather required to be given due weightage. It rather fortifies their claim that even under old dispensation of 1% wastage SION norm, there was need to use indigenous material to meet export obligation. Same was apparently done by them. In fact, instead of diversion, the evidence on record points to rather procurement of indigenous material and this appears to have been appreciated by DGFT, as how else an industry with low 1% norm as against actual 13% (revised 33%) could have practically operated, without indigenous procurement. Later stance of DGFT therefore was most practical and pragmatic and was indeed a corrective measure to rectify the lower rate norm of 1%. The discussion of Policy Interpretation Committee of DGFT as brought out in para 20 of the order of the Adjudicating authority, clearly indicates that sourcing material from domestic market is very much permissible to make up for deficiency. It is also noted that DGFT has issued EODC in all cases to the appellant. On the basis of such certificates, the Assistant Commissioner of Customs at Mundra port has also discharged the bond taken by it. We find that the adjudicating authority has correctly taken into account various arguments and has properly given relief which was due to the respondent. The respondent has also explained its position in the light of developments as happened. In case, the Revenue Department does not accept its proposition of higher wastage than SION norms, it was for it to prove with evidence the removal and convince DGFT for no need of revision of input output norms or of issuance of EODC. The learned Commissioner of Customs has correctly appreciated the position and passed his order which, therefore, deserves to be upheld. Accordingly appeals by the department are dismissed as devoid of merits and the appeals by the respondent seeking approval to adjust drawback against Advance Authorization Scheme becomes infructuous and therefore deserves to be dismissed. Respondent s appeal is dismissed as infructuous.

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• 2024 (10) TMI 334
  Reclassification of imported Float Glass - to be classified under CTH 70052990 or under CTH 7005 1090? - benefit of exemption under N/N. 46/2011-Cus dated 01.06.2011 (Serial No. 934) - Country of Origin of subject import goods - Invocation of extended period of limitation. Whether the imported Clear Float Glass, is classifiable under CTH 70051090 as declared/self-assessed by the Appellant or under CTH 7005 2990 as re-classified/re-assessed by the Department in terms of Chapter Note 2(c) to Chapter 70 of Customs Tariff Act, 1975? - HELD THAT:- The issue of classification of CFG is no more res integra since the issue and identical arguments submitted by litigants were already elaborately dealt with in the case of M/S. BAGRECHA ENTERPRISES LIMITED VERSUS COMMISSIONER OF CUSTOMS (PORT) , KOLKATA [ 2023 (11) TMI 485 - CESTAT KOLKATA] wherein it was held that the Clear Float Glass is more appropriately classifiable under CTH 7005 1090 of the Customs Tariff Act, 1975. Whether Extended Period is invokable or not considering the evidence and facts in this appeal? - HELD THAT:- The issue has been very much in the know of the revenue as the Department itself was of the view that the CFG is rightly classifiable under CTH 70051090 as identical imports of CFG by other manufacturers were initially assessed provisionally in terms of Section 17 of the Customs Act, 1962 and were later finalised after the receipt of the test report from CGCRI-CSIR. After finalisation of assessments for over 5 years, it is not open for the Department to invoke the larger period of limitation as these assessments have undergone the rigours of provisional assessment and subsequent finalisation for the same product and for the same reason, we are of the considered view that the appellant has not suppressed or mis-declared any fact and the proposal to reclassify was only on the basis of interpretation made in the CRA objection and not for any fault on the part of the appellant. Therefore, invoking extended period in these proceedings, either for demand of duty or for imposition of mandatory penalty is not at all sustainable. Whether the Appellant is eligible for FTA benefit under Sl. No. 934 of Notification No. 46/2011-Cus dated 01.06.2011? - HELD THAT:- The imported Clear Float Glass is more appropriately classifiable under Customs Tariff Heading 7005 1090 of the Customs Tariff Act, 1975 and thus is eligible for exemption of the benefit of the Notification No. 46/2011-Cus dated 01.06.2011 (Sl.No. 934) and the impugned Order-in-Original No. 102222/2023 dated 09.06.2023 is ordered to be set aside. Appeal allowed.

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• 2024 (10) TMI 320
  100% EOU - classification of coin blanks of copper alloys/ strips of copper/ coils of zinc nickel - to be classified under CETH 74094000 as copper plates, sheets and strips of thickness exceeding 0.15mm of copper nickel base alloys or under 7419? - whether copper strips and coin blanks constitute similar goods in order to avail benefit under Para 6.8(a) of Foreign Trade Policy, 2009-14? - demand of Education Cess - Whether penalty can be imposed under Rule 25 of the Central Excise Rules? Whether the classification of the impugned coin blanks should be under Tariff Heading 74094000 as claimed by the appellant or 7419 as alleged by the Department? - HELD THAT:- By no stretch of imagination, the coin blanks cannot be classified along with plates and strips of copper as they have distinctive shape, size, character and use; whereas the plates and strips are in the nature of raw material, the coin blanks are near total manufactured item i.e. coins, except for the embossing or printing of the logo and value etc. on the coin blanks - the cases relied upon by the appellants are of no use as the facts are different; the case of P. Chottalal Manufacturers Exporters [ 2022 (3) TMI 1489 - CESTAT MUMBAI ] is about the classification of aluminum plates remaining after punching; dispute in the cases of Colts Auto Pvt. Ltd. [ 1998 (9) TMI 229 - CEGAT, NEW DELHI ] and Neelmetal Products [ 2017 (3) TMI 1505 - CESTAT CHANDIGARH ] is about whether the aluminum circles arising out of punching would merit classification as parts of automobiles; as the facts are different, the ratio of the cases is not applicable - the coin blanks manufactured by the appellants as per orders of the mint have attained the characteristics of articles of copper and therefore, the appropriate classification would be under CETH 7419 as held by the impugned order. Whether copper strips and coin blanks constitute similar goods in order to avail benefit under Para 6.8(a) of Foreign Trade Policy, 2009-14? - HELD THAT:- It is found that though for the purpose of classification under the Tariff, coin blanks and copper strips have been classified separately, they do not cease to be similar goods for the purpose of Para 6.8 of the Foreign Trade Policy. The entitlement claimed by the appellants is in order. Demand of Education Cess - HELD THAT:- The contention of the appellants that once Education Cess is added to the Customs duties to arrive at the aggregate value in terms of proviso to Section 3(1) of the Excise Act, 1944, the question of charging Education Cess once again does not arise, agreed upon. Whether penalty can be imposed under Rule 25 of the Central Excise Rules? - HELD THAT:- The issue is about interpretation of the legal provisions and looking into the fact that a couple of advance rulings of U.S Customs are in favour of the appellants on the issue of classification and the fact that the Adjudicating Authority himself held the main issue to be about legal interpretation, thus no case is made by the Department to impose penalty. Therefore, the penalty imposed is liable to be set aside. Appeal allowed in part.

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• 2024 (10) TMI 316
  Smuggling of Gold - Constitutional validity of Sections 104, 105 and 108 of the Customs Act, 1962 - Legality of search and seizure operations conducted by the respondents - Applicability of Section 155 of the Criminal Procedure Code (Cr.P.C.) concerning non-cognizable offences - whether the acts or omissions, which are the foundation for the proceedings in question against the present petitioners, fall under the prohibited goods or evasion or attempted evasion of duty exceeding fifty lakh rupees? - HELD THAT:- The definition of Prohibited Goods clearly indicates that prohibition and restriction can be under the Customs Act or it can be under any other law. There is no absolute prohibition of gold either under the Foreign Trade (Development and Regulation) Act, 1992 or Customs Act. The same can be imported with certain restrictions/conditions. If the conditions are complied with then it is not a prohibited goods. If the conditions are not complied with then it amounts to prohibited goods as it is clear from the definition under Section 2 (33) and Section 11 of the Act of 1962 also. In the present case, summons were issued in pursuance of enabling provisions under Section 108 of the Act of 1962, which made to file the present criminal writ petitions. The challenge was made to the Constitutional validity of Sections 104, 105 and 108 of the Act of 1962, which is yet to be decided by this Court in the main writ petitions. It is needless to say that initial presumption is that all the provisions of the Act are presumed to be constitutionally valid unless it is otherwise declared to be unconstitutional. Such a situation would arise when this Court deals with the Constitutional validity of such provisions. Prima facie, this Court is not impressed by the submission with regard to Constitutional validity, which is yet required to be decided in the writ petitions. In the present case, there is allegation of smuggling, which made to arrest A. Tripathi from whose possession the gold was seized and his statement was foundation to make search and seizure in the premises owned by the petitioners herein. Prima facie, we feel that the alleged acts or omissions against the petitioners constitute within the parameters of prohibited goods. Such offence is cognizable and punishment is upto 7 years and therefore, the provisions of Section 155 of Cr.P.C. has no application in the present case whereas the Radhika Aggarwal s case was mainly based on Section 155 of Cr.P.C. In these circumstances, this Court, prima facie, feels that it is not a fit case to grant stay at this stage. The stay applications stand dismissed.

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• Insolvency & Bankruptcy

• 2024 (10) TMI 333
  Entitlement to file an application for recall of the order - Adjudicating Authority erred in recalling its earlier order or not - review or recall of the order. HELD THAT:- The power to recall a judgment will not be exercised when the ground for reopening the proceedings or vacating the judgment was available to be pleaded in the original action but was not done or where a proper remedy in some other proceeding such as by way of appeal or revision was available but was not availed. The right to seek vacation of a judgment may be lost by waiver, estoppel or acquiescence - the NCLT NCLAT have inherent powers to recall order but have no power to review its order. It has been brought out that the Corporate Debtor was required to replace the parts rendered unfit for use and other APU was also treated as parts and for ownership of Parts , the Agreements provided that, if replaced as per the Agreement, title to such replaced part was to vest in the Appellant and title to the removed part would vest with the Corporate Debtor - It has been brought out that as per definition of engine, the terms Engine includes Replacement Engine and engine does not fall within the definition of Parts . As per the original application submitted by the Respondent No. 1, it was clearly stated and supported with documents that Corporate Debtor s Engine bearing number 803473 and Corporate Debtor s APU bearing number 5121 were in possession of the Appellant and should be returned back to maximize the value of Corporate Debtor, as the Corporate Debtor s engine and APU is of greater value. In the same order, it was mentioned that the Original Engine belonging to the Respondent No. 1 has travelled back to the Respondent No. 1 which is not correct position because it was still with Respondent No. 1 as their engine was fitted in the aircraft. However, the Adjudicating Authority did not mention that Corporate Debtor s Engine and APU were in possession of the Appellant and should be returned to Corporate Debtor as it is of greater value. This was corrected in the order of the Adjudicating Authority dated 09.05.2024 mentioning that the Appellant should return Corporate Debtor s engine which is of greater value and the original engine of the Appellant shall be returned them by Corporate Debtor. The Impugned Order dated 09.05.2024 is not considered as review done by the Adjudicating Authority of its earlier order dated 04.12.2023 - the Adjudicating Authority has committed genuine mistakes in order dated 04.12.2023 based on mistaken facts and thus passed the Impugned Order dated 09.05.2024 correcting the same including consequential changes. The Adjudicating Authority has correctly passed the Impugned Order - Appeal dismissed.

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• Service Tax

• 2024 (10) TMI 332
  Direction to petitioner/Railway to reimburse Service Tax along with interest paid by the respondent to the Tax Authorities - Section 34 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- It is an entrenched principle of Indian law that the courts cannot rewrite a contract between the parties. The said concept is an integral part of the fundamental policy of Indian law. Violating the same tantamounts to contravention with the fundamental policy of Indian law and being in conflict with the most basic notions of justice. Hence, such contravention affords a ground under Section 34 (2) (b) (ii), including its Explanations. Section 28 (3) of the 1996 Act provides that while deciding and making an award, the Arbitral Tribunal shall, in all cases, take into account the terms of the contract and trade usages applicable to the transaction. Since the terms of the contract between the parties in the present case were unambiguous, contravention of the same by the Arbitral Tribunal tantamounts to a patent illegality within the contemplation of Section 34 (2-A) of the 1996 Act. The Estimate, which was relied on by the Arbitral Tribunal to interpret the clause, is neither a part of the contract nor an agreement between the parties but, as discussed above, is an internal document of the petitioner/Railway for arriving at the estimated bare price of the work. Furthermore, the estimate deals only with the wages of the workmen in terms of the Minimum Wages Act and does not constitute the rates to be quoted by the individual bidders. The estimate merely provided the minimum rates, since if rates were quoted below the same, it would imply that the workmen would be deprived of their legitimate dues under the Minimum Wages Act. It was for the bidders to take into account such minimum price and add to it their own estimates of taxes payable, in the light of Clause 2.2 which mandates that the rates must include all taxes and duties etc. which are applicable to the work done under the tender. Hence, the reliance by the Arbitral Tribunal on the Estimate to interpret Clause 2.2 was patently perverse and illegal, vitiating the impugned award itself. There is no question of the authorities picking and choosing, since Clause 2.2 is universal in its application to all prospective bidders in the tender. Petition allowed.

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• 2024 (10) TMI 331
  Levy of service tax - Commercial coaching or training services - claims of the writ petitioner of being exempt from such levy having been negatived by the respondents - HELD THAT:- By virtue of Finance Act, 2010 an explanation came to be inserted in Section 65 (105) (zzc) with retrospective effect from 01 July 2003 clarifying that the word commercial would mean training or coaching services being provided for consideration and uninfluenced by whether such training or coaching was conducted with a profit motive. By virtue of a Notification no. 33/2011 dated 25 April 2011 exemptions came to be granted to coaching and training centres and which would have led to the grant of a certificate, diploma, degree or any other educational qualification recognized by law. While a testimonial, degree or diploma which can be said to be recognized in law is a concept by now well settled and could only mean degrees, diplomas or educational qualifications granted or conferred by an authority duly empowered and recognized in law to award such a degree, diploma or grant that educational qualification, the Board by way of abundant caution had duly clarified these aspects in terms of its Circular dated 28 August 2012. The phrase recognized by any law was thus clarified to encompass courses which were approved or recognized by any entity established under a Central or State legislation, including delegated legislation, for the purpose of granting recognition to any educational course. Quite apart from IILM University and under whose aegis the petitioner had asserted to be functioning had been deprived of its character and status, the CESTAT found that the petitioner had never been recognized in law to grant a degree or diploma. The petitioner had also failed to establish or prove that it was either affiliated with a University or a deemed University it had also woefully failed to establish that it was itself enabled by statute to grant the degree or diploma - the CESTAT came to conclude that the appeals preferred by the writ petitioner lack merit while those instituted by the Department were liable to be allowed. Petition dismissed.

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• 2024 (10) TMI 330
  Levy of service tax - whether the activity of letting out shops/AARATHS and other premises for shops and canteen, banks, etc. is liable to service tax? - HELD THAT:- The issue has been decided in Krishi Upaj Mandi Samiti, New Mandi Yard Vs. Commissioner of Central Excise and Service Tax, Alwar [ 2017 (5) TMI 1465 - CESTAT NEW DELHI] The Tribunal referring to the Education Guide dated 20.06.2012 issued by the Board that any service provided by such bodies, which is not directly related to the agriculture and agricultural produce will be liable to tax e.g. renting of shops or other properties. On the main issue whether the appellant is liable to pay service tax stands decided and in that view, the appellant is liable to service tax for the normal period w.e.f. 1.10.2012 to 31.03.2014, which is the post-negative period, as the activities undertaken was for the furtherance of business or commerce which does not fall in the Negative List provided under Section 66D. The provisions of the N/N. 33/2012-ST dated 20.06.2012, under which the appellant is claiming exemption it is mandatory to follow the conditions for evaluating the threshold limit by arriving at the aggregate value of one or more taxable services provided by the service provider from one or more of the premises and not separately for each premises or each services. Further, Clause (viii) in clear terms sets out that the aggregate value of the taxable services rendered by the service provider from one or more premises shall not exceed Rs.10 lakhs in the preceding financial year. It is not permissible to pick and choose from the notification what is beneficial and discard what is against the party. The Notification has to be considered in entirety and the party claiming the benefit therein has also to satisfy the conditions enumerated therein. The Apex Court in Krishi Upaj Mandi Samiti [ 2022 (2) TMI 1113 - SUPREME COURT] has observed that it is a settled law that the notification has to be read as a whole and if any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of the notification and exception or exempting provisions in the taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the relevant policy and the exemption notifications issued in that regard. Further, it was observed that in a taxing statute, it is the plain language of the provisions that has to be preferred and where the language is plain and is capable of determining a defined meaning, strict interpretation is to be accorded. In the impugned order, the Commissioner (Appeals) arrived at a finding that the total receipts of the appellant during the subsequent financial years from 2009-10 to 2012-13 were above the threshold limit for the exemption and hence they are not eligible to SSI exemption benefit - there are no infirmity in the impugned order and the same is hereby affirmed. Appeal dismissed.

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• 2024 (10) TMI 329
  Levy of service tax - amount received towards liquidated damages - period from July 2015 to June 2017 - declared service or not - HELD THAT:- The Adjudication authority has no reason to confirm demand of service tax on the amount received by the Appellant as compensation for short lifting of electricity, since it was not on account of any obligation to tolerate an act, hence is not a service under Section 66E(e) of the Finance Act, 1994, Hence, the impugned order deserves to be set aside. The impugned order is set aside with consequential relief - Appeal allowed.

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• 2024 (10) TMI 328
  Levy of service tax on reimbursement amount based on Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 - Whether the reimbursement amount can be subjected to levy of service tax for a period prior to May, 2015? - extended period of limitation - suppression of facts or not. HELD THAT:- Section 67 of the Finance Act was considered and explained by the Supreme Court in UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [ 2018 (3) TMI 357 - SUPREME COURT] . The appellant therein was providing consulting engineering services. It received payment not only for the services provided by it but was also reimbursed for the expenses incurred by it on air travel, hotel stay, etc. It paid service tax on the amount received by it for services rendered to its clients but did not pay any service tax in respect of expenses incurred by it which were reimbursed by the clients - the service tax is on the value of taxable services and, therefore, it is the value of the services which are actually rendered which has to be ascertained for the purpose of calculating the service tax. It is for this reason that the Supreme Court observed that the expression such occurring in section 67 of the Finance Act assumes importance. It is in this context that the Supreme Court in paragraph 26 observed that the authority has to find what is the gross amount charged for providing such taxable services and so any other amount which is calculated not for providing such taxable service cannot be a part of that valuation as the amount is not calculated for providing such taxable service . This, according to the Supreme Court, is the plain meaning attached to section 67 of the Finance Act either prior to its amendment on 01.05.2006 or after this amendment and if this be so, then rule 5 went much beyond the mandate of section 67 of the Finance Act. The Supreme Court, therefore, held that the reimbursement amount cannot be treated as gross amount charged as that is not a consideration for rendering the service. It needs to be noted that it is only w.e.f. 14.05.2015 that reimbursable expenditure or cost would form part of valuation of taxable service. However, in the present case, the transaction were made before 14.05.2015. Thus, inclusion of the reimbursable cost in the value of taxable service cannot be justified. Extended period of limitation - suppression of facts or not - HELD THAT:- In the present case, the Commissioner observed that the appellant had received certain amount as reimbursement but deliberately avoided payment of service tax on the said amount with an ulterior motive to defraud the government. The Commissioner also observed that the appellant had abused the facility of self-assessment. It is for this reason that the Commissioner found that the appellant had suppressed facts with intention to evade payment of service tax. The Commissioner, therefore, could not have confirmed the demand of service tax for the extended period of limitation as the requirements of the proviso to section 73(1) of the Finance Act are not satisfied. This part of the order of the Commissioner, therefore, also deserves to be set aside - the impugned orders dated 10.10.2012, therefore, deserves to be set aside and are set aside - appeal allowed.

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• 2024 (10) TMI 327
  Non-payment of service tax - Renting of Immovable Property Services - Applicability of service tax for the pre and post negative list period. Demand prior to 30.06.2012 (pre-negative list period) - HELD THAT:- For the pre-negative period, this issue stands decided in the case of COMMISSIONER OF CENTRAL EXCISE, NASIK VERSUS DEORAM VISHRAMBHAI PATEL [ 2015 (9) TMI 790 - CESTAT MUMBAI ], the Tribunal held 'It can be seen from the above reproduced findings of the first appellate authority, the conclusion arrived at is very correct, as co-owners of the property cannot be considered as liable for a Service Tax jointly or severally as Revenue has taken to identify the service provider and the service recipient for imposing service tax liability, which in this case, we find our individual. The conclusion arrived at by the first appellate authority is correct and he has confirmed the demand raised on the respondents by extending the benefit of Notification No. 6/2005-S.T. We do not find any reason to interfere in such a detailed order.' - the demand prior to 30.06.2012 does not sustain. Demand for the period post 01.07.2012 (post-negative list period) - HELD THAT:- The Department has not submitted any evidence to the contrary. In the Finance Act, 1994, Section 65B(51) defines taxable services as any service on which service tax is leviable under Section 66B . Section 66B of the Finance Act, 1994 provides that there shall be levied a tax on all services except those mentioned in negative list (Negative list has been defined under Section 65B(34) as services listed in Section 66D of Finance Act, 1994) and provided or agreed to be provided by one person to another in the taxable territory and collected in the manner prescribed. In the instant case, it is noted that post 01.07.2012, the firm was not functional, and the rental agreements are in the name of the individual partner, with regard to the property held by them jointly. So, there cannot be a case of service to oneself. Hence, they are not liable to service tax - The decision in the case of the CADILA HEALTHCARE LIMITED VERSUS C.S.T. -SERVICE TAX - AHMEDABAD [ 2021 (4) TMI 1157 - CESTAT AHMEDABAD] relied upon by the Ld AR deals with the remuneration received by the Director of the firm for providing other independent services, which is not the case of the appellant. The impugned order is liable to be set aside and is set aside. Consequently, the appeal is allowed.

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• 2024 (10) TMI 326
  Interest claim - refund of amount deposited under protest without paying interest - HELD THAT:- Undisputedly appellant is entitled to interest on the amounts refunded to him after the dispute was finally determined in their favour by the order of this tribunal. However, the interest as per these orders would necessary be governed by the provisions of section 11BB and should be paid after expiry of three months from the date of receipt of the application for refund and not from the date of deposit as has been held by the original authority in the orders dated 09.07.2019 and 18.07.2019. Even if it is held that appellant was entitled to refund of interest as per section 35 FF then also the interest could not have been paid from the date of deposit, in view of the Proviso to section 35FF, which provided that in respect of the amounts deposited prior commencement of Finance (No. 2) Act, 2014 the provisions as contained in erstwhile section 35FF shall apply. In the present case the refund applications for refund of amount deposited under protest were made on 21.05.2019 (received on 29.05.2019) and 21.06.2019 (received on 21.07.2019) and the refunds were paid vide order dated 11.06.2019 and 15.07.2019 i.e. within a month of the receipt of the application. Thus, appellant would not be entitled to any interest as per the section 11BB or Section 35 FF of Central Excise Act, 1944. Appeals are dismissed.

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• 2024 (10) TMI 324
  Denial of cash refund of accumulated cenvat credit, paid post introduction of GST, towards Service Tax on Reverse Charge Mechanism - period from April 2016 to June 2017 - HELD THAT:- While accepting contention of the learned counsel for the Appellant that refund of such Cenvat Credit under section 142(3) in cash is admissible, as for the Judicial President of this Tribunal including that of the Larger Bench constituted on the issue in case of M/s. Brose India Automotives Systems Private Limited [ 2022 (5) TMI 480 - CESTAT MUMBAI ], there is no express contrary finding available in those two judgments referred by learned authorised representatives for the Department as in both the cases, the findings were to the effect that express provision though was not available in the existing Act (Now erstwhile Excise Act and Cenvat Credit Rules, 2004) for cash refund, Assessee is eligible to take cenvat credit amount so paid under the Service Tax Rules and even in the Ganges International Pvt. Ltd judgments [ 2022 (3) TMI 544 - MADRAS HIGH COURT ] it was also directed that such provision as available under section 142(3) could be treated as a dire necessity and by invoking Doctrine of Necessity relief can be granted to the Appellant in such kind of quasi-judicial/administrative matter. In the existing (now-pre-existing) law, whether refund in cash provision is available or not, this non-abstanate clause permitted refund admissible to the assesse in respect of Cenvat Credit only through payment of cash after expiry of transitional provision. Appellant is therefore, entitled to get the refund in cash as claimed with applicable interest as per law. The order passed by the Commissioner (Appeals), Central Tax, Central Excise Service Tax, Raigad is hereby set aside - Appeal allowed.

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• Central Excise

• 2024 (10) TMI 325
  SSI exemption under N/N. 8/2003-CE - use of brand name of others - factory is situated in a rural area - main contention of the learned counsel for the appellant is that the SSI exemption is available to them even if the goods are manufactured under the brand name as they are manufactured in a rural area and, therefore, are covered under Para 4(c) of the Notification - HELD THAT:- Para-4 of the notification denies the exemption in respect of specified goods bearing a brand name or trade name, whether they are registered or not of another person and further sets out the exceptions. The sub-clauses (a) to (e) of Para-4 enumerates various exceptions in which case even if the goods are bearing the brand name or trade name would be entitled to the exemption under the notification. Each clause is an independent clause which provides for specific exemption and, therefore, has to be dealt within the terms of the expressions used therein. Here, we are basically concerned with clause (b) and (c) of Para-4 as relied on by the Adjudicating Authority and the appellant respectively - The goods covered under clause (b) are not restricted to any particular area but only to the entitles specified therein whereas clause (c) restricts the exception only to rural area and hence, the two operates in different spheres and cannot be clubbed together for the purpose of interpretation. Support drawn from the decision of the Apex Court in COMMISSIONER OF C. EX., TRICHY VERSUS RUKMANI PAKKWELL TRADERS [ 2004 (2) TMI 69 - SUPREME COURT] , where the findings of the Tribunal that the exemption can be denied only if trade name or brand name is used in respect of the same goods, for which the trade mark is registered, were rejected observing that the Tribunal has done something, which is not permissible to be done in law. Considering the different expression used in the clause (b) and (c) of para-4 of the Notification, the intention of the department in granting and restricting the exemption is evident and the law is settled that where the words used are simple and clear and there is no ambiguity, no further aid is required to interpret them. Secondly, the exemption notification has to be construed strictly within the four corners of the expression used in the notification - the appellant is entitled to avail the SSI exemption benefit under the provisions of Para-4(c) as their factory is located in a rural area and the benefit cannot be denied for the reason that they have been manufacturing the goods bearing the brand name i.e. NOBLE , FITWELL and ZINDAL , which belong to M/s.Nootan Polymers. The appellant is entitled to avail the exemption under Para-4(c) of the notification, the impugned order deserves to be set aside - Appeal allowed.

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• 2024 (10) TMI 323
  Compounded lavy scheme - Penalty u/r 26 of the Central Excise Rules 2002 - alleged contravention committed by SMFPPL of operating the Pan masala Packaging Machines differently from that declared by SMFPPL under Rule 6 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 - based merely on statements of various persons - cross-examination of statements denied - violation of principles of natural justice - HELD THAT:- The entire case of the department is based merely on statements of various persons however, the cross-examination was denied by the Commissioner despite specific request to grant such cross-examination was made. Hence, no reliance can be placed on such statements as laid down in the following judgments that, as provided in Section 9D of the Central Excise Act 1944, a Statement of any person recorded under the said Act, shall be relevant in adjudication only when such person is examined in the adjudication proceedings. The ground on which the Commissioner has imposed penalty on the Appellants does not satisfy the ingredients of Rule 26 of the Central Excise Rules 2002. It is an admitted fact that the Appellants were not made parties to Show Cause notice dated 9-9-2011, which proposed confiscation of the goods and imposition of penalty on SMFPPL. The Appellants were made party only to Show Cause Notice dated 31-8-2012 which demanded duty from SMFPPL by interpreting the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008. This Show Cause Notice dated 31-8-2012 proposed imposition of penalty on the Appellants under Rule 26 of the Central Excise Rules 2002. As held by this Hon ble Tribunal in Meenakshi Food Products (P) Ltd v CCE [ 2019 (7) TMI 904 - CESTAT AHMEDABAD ] , the said Rule 26 can apply only to a person who is involved in the clearance of goods by different ways enumerated under Rule 26, whereas in the present case, duty demand had been made on interpretation of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008. There is no evidence and finding of the Appellants role in acquiring, possessing or being concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing or in any other manner dealing with exciseble goods with knowledge or reason to believe that the same were liable to confiscation under the Central Excise Act 1944 or the Central Excise Rules 2002. Therefore, imposition of penalty under Rule 26 is liable to be set aside - impugned Order imposing penalty upon the appellants, J M Joshi and Sachin J Joshi cannot be sustained. Therefore penalty imposed upon the appellants under Rule 26 is hereby set aside. As regards, the appellant namely Vinayak Kashiram Sawant, the Director of SMFPPL, it appears from the records that he looked after Silvassa plant of SMFPPL, further Dilip Jani, Director of SMFPPL ,Gandhinagar has admitted that he was looking after production and clearance of goods at Gandhinagar factory. As such, it is found that he was not concerned with the activities of SMFPPL, Gandhinagar. In that view, penalty imposed upon him under Rule 26 is hereby set aside. The appeals of JM Joshi, Sachin J Joshi and Vinayak Kashiram Sawant are allowed and appeal filed by Balraj Mourya is partly allowed.

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• 2024 (10) TMI 322
  Classification of goods - mixtures of Melamine Formaldehyde and Phenol Formaldehyde - these products fall under Chapter 3909 or not - Applicability of area-based exemption under N/N. 50/2003-CE - HELD THAT:- This issue is no more res integra and this Bench of the Tribunal in the case of Samrat Plywood Ltd. cited [ 2024 (7) TMI 103 - CESTAT CHANDIGARH] decided the same issue involved in the present appeal, this Bench of the Tribunal in the case of Samrat Plywood Ltd. has considered this issue in detail and after considering the various judgments of the Tribunal has held that the mixture of aforesaid items used as glue/adhesive in the manufacture of laminates is classifiable under Chapter Heading 35.06 and not under Chapter 3909 and hence the exemption cannot be denied to them. The impugned orders are not sustainable in law and therefore set aside - appeal allowed.

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• 2024 (10) TMI 321
  Doctrine of merger - Jurisdiction - proper statutory authority to issue impugned order - Rule 6(2) of Pan Masala Rules, 2008 - Commissioner has not offered any comments on certain observations made in the earlier order made by his predecessor in respect of the same show cause notice - violation of principles of natural justice - HELD THAT:- In case of KUNHAYAMMED AND OTHERS VERSUS STATE OF KERALA AND ANOTHER [ 2000 (7) TMI 67 - SUPREME COURT (LB)] Hon ble Supreme Court has observed ' Once the superior court has disposed of the lis before it either way - whether the decree or order under appeal is set aside or modified or simply confirmed, it is the decree or order of the superior court, tribunal or authority which is the final, binding and operative decree or order wherein merges the decree or order passed by the court, tribunal or the authority below.' The observations made in the order set aside in appeal cannot be a ground for preferring the appeal - appeal dismissed.

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• Indian Laws

• 2024 (10) TMI 319
  Dishonour of Cheque - Conviction under Section 138 of Negotiable Instruments Act - Presumptions under Section 118 and Section 139 of Negotiable Instruments Act - Burden to prove - invocation of revisional jurisdiction - HELD THAT:- It is a trite law under Section 139 of the Negotiable Instruments Act that the Court must presume unless the contrary is proved, that the holder of a cheque received the cheque for discharge, in whole or in part, of the debt or liability. It is also well settled that in complaints under Section 138 of Negotiable Instruments Act, the Court must presume that the cheque had been issued for a debt or liability, however, this presumption is repeatable. The burden of proof that cheque has not been issued for a debt or liability is on the accused. The petitioner/accused has failed to prove that cheque was not signed by him, in these circumstances, it is to be presumed that the cheque had been made for consideration and the holder of the cheque received the cheque for discharge in whole or in part of debt or liability. Mere on the ground that the earlier Manger has been transferred and the witness who has been examined by respondent-Bank did not have personal knowledge about the transaction, it cannot be said that the respondent-Bank has failed to prove its case because the witness has proved all relevant documents in respect to transaction between the petitioner/accused and the Bank including the cheque issued by petitioner/accused. It is well settled that while exercising the revisional jurisdiction, findings of fact recorded by lower court should only be intervened when the same is perverse. The revisional court should not appreciate or re-appreciate the evidence. In this case, there is concurrent findings of two Courts below based on appreciation of evidence in respect to the basic ingredients of offence under Section 138 of Negotiable Instruments Act. The defense of the petitioner has not been proved, therefore, learned Courts below have not erred in convicting the petitioner under Section 138 of Negotiable Instruments Act. The present criminal revision fails and is hereby dismissed.

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• 2024 (10) TMI 318
  Dishonour of cheque - maintainability of proceedings - account of the drawer company was blocked/frozen by the order of IT Department prior to the presentation of cheques - whether the petitioners can be held liable under Section 138 of the NI Act on the dishonour of cheque due to the account being frozen/blocked by the order of IT department? HELD THAT:- Section 138 of the NI Act makes it clear that it is not every return of a cheque unpaid which leads to prosecution for an offence under the Act. For the said purposes, the cheque must have been returned unpaid by the banker either because the amount of money standing to the credit of that account is insufficient to honour the cheque or that the cheque exceeds the amount arranged to be paid from that account by an agreement between the account holder and the bank - The complaint, in the present case, does not state that the cheque was dishonoured on account of either of the two grounds on which liability under Section 138 of the NI Act can be made out. A person commits an offence under Section 138 of the NI Act when he draws a cheque from an account maintained by him in a bank for discharge of any debt or any liability and the cheque is returned unpaid for the reason of the insufficient credit in the account. It is an admitted case as stated in the complaint filed by the complainant before the learned MM that the cheque was dishonoured for the reason that the account was blocked by the order of IT department - attachment of the bank account of the drawer company had the effect of disabling the petitioners from operating or maintaining the said account. The petitioners could not exercise his right either to make a deposit or withdraw any money from the said account. A person commits an offence under Section 138 of the NI Act when he draws a cheque on an account maintained by him for discharge of any debt or liability and the said cheque is returned unpaid for the reason of insufficient funds. In the present case, the account of the drawer company was blocked / frozen by the order of the IT department thus, the said account at the time of dishonour of cheque cannot be held to be maintained in the bank. Drawing a cheque for discharge of any debt or liability from an account which is not maintained by a person for the reason of it being frozen may amount to an offence under other statutes but cannot be termed as an offence under Section 138 of the NI Act. For an account to be called as maintained by the drawer, it is essential that the he is in a position to operate the said bank account by either depositing the money or withdrawing the money therefrom. The account holder should be in a position to give effective instructions to his banker with whom the account is being maintained - In the present case, once the bank account has been attached by an order of the IT department, the same could not have been operated by the petitioners or be called to have been maintained by him. The complaint being CC No. 29073/2016 filed by the respondent before the learned Metropolitan Magistrate for offence under Section 138 of the NI Act along with the consequential proceedings arising therefrom, is quashed - Petition allowed.

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• 2024 (10) TMI 317
  Maintainability of the Original Petition seeking cancellation of Design Registration - Interpretation of the Designs Act, 2000 in relation to jurisdiction of the High Court - HELD THAT:- It is found that there is a departure from the earlier provision viz., Section 51A of the Act, 1911 which enabled an interested person seeking cancellation to approach the High Court at any time after the registration of the Design. However Section 19 of the Act, 2000, now expressly mandates such person seeking cancellation of Registration of a Designs to approach the Controller alone and Section 19 (2) provides an Appeal to this Court from any order of the Controller including any matter to be referred to the Controller for decision of this Court. The provisions themselves permit an Application to be filed before the High Court. However, insofar as the Designs Act, even though the earlier Designs Act, 1911 enabled such Application to be filed before the Court, it has been taken away by the Designs Act, 2000 and by incorporation of Section 19, an Application for cancellation of Registration can be made only to the Controller and an Appeal against the the order of the Controller is also made available by approaching this Court. When an appeal is also made available to the aggrieved party by approaching this Court, it cannot be said that this Court can exercise concurrent jurisdiction alongwith the Controller. There are no merit in the arguments advanced by the learned counsel for the petitioner that the ouster has to be express and in the absence of an express ouster, it has to be implied that the jurisdiction of this Court is available to be exercised by this Court, including entertaining an Application under Section 19 for Cancellation of the Designs. The Original Petition filed before this Court is not maintainable and the petitioner has to necessarily approach the Controller having jurisdiction and canvass all its objections there - the Original Petition is dismissed.

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• 2024 (10) TMI 315
  Seeking grant of regular bail - Illegal possession of Ganja - offence u/s 20/29 NDPS Act - whether the recovered material falls within the definition of Ganja ? - HELD THAT:- The intention of the Legislature appears to be clear that in case of Ganja, if it is merely Category A i.e. a homogenous mixture of flowering buds and fruiting tops, then the same would fall within the meaning of Cannabis , however, if it is merely Category B i.e. a homogenous mixture of seeds/leaves/stalks without the fruiting tops and buds, then the same would not attract the provisions of the NDPS Act. From the framework of the entire NDPS Act and a reading of S. 2 (iii)(b), it emerges that if the material seized is a heterogenous mixture/Category C, constituting of Category A mixed with Category B, the placebo material such as stalks/leaves/stems (Category B) would not constitute an actual part of the drug and only the actual content and weight of the narcotic drug (Category A) would be relevant for determining whether it would constitute small quantity or commercial quantity. Evidently, the present case is of a recovery falling within Category C. The Chargesheet records that when the Petitioner/Ravina was apprehended, blue coloured plastic polythene bag was recovered from her which contained grass-like flowery-leafy material along with its stems, which appeared to be Ganja and was seized vide the seizure memo. On weighing, the recovered Ganja on the electronic weighing machine, the total weight of the quantity recovered, was about 24.145 Kg - It has been consistently held that if there is a prima facie discrepancy in what was seized and what was analysed and weighed and there are reasonable grounds to believe that the petitioner is not guilty of offences dealing in commercial quantity. Consequently, the rigors of Section 37 of the NDPS Act, 1985 for grant of regular bail, would not become applicable. Admittedly, the petitioner has not been involved in any other crime previously and has clean antecedents. Moreover, there is nothing to show that the petitioner is likely to tamper with the evidence or influence the witnesses. Considering the background, it can also not be said that she is a flight risk. Considering the nature of allegations and the petitioner s clean antecedents, coupled with the fact that the trial is still ongoing, the present petition is allowed and the petitioner is admitted to regular bail registered under Section 29 read with Section 20(B)(ii)(c) of NDPS Act, 1985 at Police Station Badarpur, Delhi, upon his furnishing a personal bond in the sum of Rs. 25,000/- and one surety of the like amount to the satisfaction of the learned Trial Court, and further subject to fulfilment of conditions imposed - bail application allowed.

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