Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
November 10, 2023
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
Indian Laws
Articles
News
Notifications
GST - States
-
G.O.Ms.No.526 - dated
8-11-2023
-
Andhra Pradesh SGST
Amendment in Notification G.O.Ms.No.258, Revenue(CT-II), Department, dated 29.06.2017
-
G.O.Ms.No.525 - dated
8-11-2023
-
Andhra Pradesh SGST
Amendment in Notification G.O.Ms.No.257, Revenue (CT-II) Department, dated 29.06.2017
-
G.O.Ms.No.524 - dated
8-11-2023
-
Andhra Pradesh SGST
Amendment in Notification G.O.Ms.No.265, Revenue(CT-II) Department, dated 29.06.2017
-
G.O.Ms.No.523 - dated
7-11-2023
-
Andhra Pradesh SGST
Amendment in Notification G.O.Ms.No.256, Revenue (CT-Il)Department, dated 29.06.2017
-
G.O. Ms. No. 34 - dated
10-10-2023
-
Puducherry SGST
Amendment in Notification G.O. Ms. No. 56/CT/2017-19, dated the 17th November, 2017
-
11/2023-Puducherry GST (Rate) - dated
10-10-2023
-
Puducherry SGST
Amendment in Notification G.O. Ms. No. 1/2017-Puducherry GST (Rate), dated 29th June, 2017
-
1164/XI-2–23-9 (47)-17-T.C.-233-U.P. Act-1-2017-Order (292)-2023 - dated
21-9-2023
-
Uttar Pradesh SGST
Electronic commerce operators who are required to collect tax at source under section 52 are notified as a class of such persons.
-
1142/XI-2–23-9(47)-17-T.C.231-U.P.Act-1-2017-Order (290)-2023 - dated
21-9-2023
-
Uttar Pradesh SGST
“Accounts Compiler” notified as a mechanism by which information can be shared through a consent based common portal under section 158A of the Uttar Pradesh Goods and Services Tax Act, 2017
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
-
Release of cash seized from the Petitioner - More than 6 months have passed from the date of seizure - Admittedly, there is no requisition under section 132(A) of the Income Tax Act, though, it was the case of the State that intimation was sent to the Income Tax Department. Even otherwise, the petitioner has not shown the cash as stock in trade - GST authorities directed to return the Cash - HC
-
Validity of third notice issued u/s 73 of the GST Act, 2017 - the petitioner has a remedy to file reply to the show cause notice before the respondent authorities - Officers have the authority of law to issue such show cause notice according to the provisions of Section 73 of the GST Act, 2017. Hence, no exceptional case is made out for interference. - Petition dismissed - HC
Income Tax
-
Additions beyond the scope of limited scrutiny assessment - Conversions of Limited Scrutiny to Extensive Scrutiny - no steps has been taken to convert the limited scrutiny into complete scrutiny wherein the AO could have had the jurisdiction to verify other details. - the Ld.AO has overstepped his jurisdiction by making an addition in the hands of the assessee by disallowing the deduction claimed u/s. 54F. - AT
-
Accrual of income - Taxability of income - interest income generated on the funds received from Gol - ownership of Interest earned - Since the entire amounts received as interest stands deposited in the consolidated fund of India, we hold that no addition is called for in the hands of the assessee. - AT
-
Revision u/s 263 - there was no error in the order of the AO vis-à-vis the issue of the assessee having not deducted tax at source on any alleged granules work payment made to its related parties warranting disallowance of expenses @ 30% - PCIT surely was misguided by the incorrect words used by the Tax Auditor in the Tax Audit Report - Revision order set aside - AT
-
Seeking a lower deduction of tax certificate (“LDC”) - LDC was grated for TDS @ 0.5% instead of @ 0.01% as sought - The reasons furnished by the Respondent No. 1 qua the Application i.e., as to why the Petitioners’ request that TDS should not be deducted at a rate of 0.01% (zero point zero one per cent), hinges on broad generalizations in relation to the propriety of projected estimations of revenue and tax liability, and accordingly has been has been issued mechanically reflecting non-application of mind. - Directions issued to consider the case of the assessee - HC
-
TDS u/s 192 or 194J - payment to the consultant-doctors and retainer-doctors - Whether there was employer- employee relation between both the parties? - Certain clauses in contract with retainers which gave the erroneous impression to the Ld. AO of creating an employer-employee relationship has been explained by the assessee that they do not create such a relationship. The explanation of the assessee has unanimously been accepted by various judicial pronouncements. - TDS was rightly deducted u/s 194J - AT
-
Revision u/s 263 - it is amicably realized that all these information, which were never submitted before the revenue authorities, are crucial in deciding the issues in hand, at the same time these needs further examination, analysis and verification of its veracity to arrive at the conclusion that whether they support the contentions raised by assessee or not - Revision proceedings sustained - AT
-
Benefit exemption from income tax - insurance business - the assessee is entitle to claim exemption under section 10(15) towards interest income from tax free bonds, under section 10(34) towards dividend income and under section 10(23AAB) towards surplus of Participating Pension Business. - AT
-
TDS u/s 195 - India-UAE DTAA - payments made to Dubai Leading Technologies - It is business transaction and not in the nature of Fee for Technical Services (FTS) - there is no obligation to deduct tax at source under section 195 of the Act as the impugned payments are not chargeable to tax in India - AT
-
Applicability of Higher Rate of Tax u/s 115BBE - the amount surrendered during survey was duly reflected in the books of account and the source it was declared/explained as business activity with due payment of Tax liability and the authorities below failed to prove the contrary to disprove source of income other than Business income - To be taxed at Normal Provision of tax rates - AT
-
Provision for obsolete stock - The provision for obsolete stock is allowable but it requires to be satisfied that the value of obsolete items of inventory is valued on the cost or market price, whichever is less - Further, there cannot be double deduction in one assessment year when the provision is made and another time when it was actually written off in its books of accounts of assessee. - AT
Customs
-
Refund of Anti Dumping Duty - refund application filed without challenging the assessment order - it is undisputed fact by the revenue also that the ADD paid by the appellant was not at all leviable at the relevant time - In absence of any final assessment order in respect of payment of Anti Dumping Duty and particularly in the fact that the Anti Dumping Duty was not leviable at the relevant time - appellant is legally entitled for the refund claim - AT
-
Revocation of benefit under the Merchandise Exports from India Scheme [MEIS] with retrospective effect - Notably, given that the entire MEIS scheme faced scrutiny at the WTO - singling out FIBCs from export incentives retrospectively, while retaining benefits for other products, especially those under Chapters 61 to 63, exhibits arbitrariness and discrimination. In our considered opinion, no valid justification has been brought forth, for such selective retrospective withdrawal of benefits. - HC
-
Condonation of delay in filing the Cross Objections - The department has, therefore, failed to furnish any satisfactory explanation for condoning the enormous delay in filing the Cross Objections - The Delay Condonation Application, therefore, deserves to be rejected and is rejected. - AT
-
Revocation of Customs Broker license - mis-declaration was not known to the appellants CB, and when they had specifically sought for examination of the goods under First Check basis - there exists no such evidence and on the contrary the declaration made in the bill of entry corresponds to the value declared in the commercial invoice. - AT
Indian Laws
-
Dishonour of Cheque - non-joinder of the Company as accused, which otherwise is treated as principal offender being drawer of the cheque, the Director of the Company joined as sole accused representing the company as well as authorised signatory, would not served the provisions of Section 141 of the Act. - HC
IBC
-
Initiation of CIRP - Present is a fit case to admit when inspite of several promises and acknowledgement, the Corporate Debtor failed to pay the outstanding debt. The Corporate Debtor also has not complied with the order of the Adjudicating Authority directing for depositing the amount equivalent to Indian Rupee in the Court, instead it cited certain regulatory procedure in obtaining the permission for remitting the amount, which order was also not complied by the Corporate Debtor - the Adjudicating Authority ought to have admitted Section 9 Application. - AT
Central Excise
-
Valuation - inclusion of after sale service charges, reimbursed by the appellants to their dealers - It is beyond imagination as to how these amounts constitute flow of additional consideration unless it is evidenced either that the appellants are allowing the dealers to collect the margin payable, by the appellant to the dealers, from ultimate customers or that the additional amounts charged by the dealers from ultimate customers is actually flowing back to the appellants. - AT
-
Recovery/reversal of credit - Export of Goods - Credit was availed under Rule 16 on returned Goods - The view taken by the authorities below is that reversal of the credit availed under Rule 16 is a pre-condition for removal of the said goods and therefore, the appellant has to reverse the credit. It is also alleged that when the goods were not originally meant for export, it cannot be later exported when the goods are brought back to the factory under Rule 16 - the said view of the Commissioner (Appeals) cannot be endorsed upon. - AT
-
Recovery of CENVAT Credit - allegation of payment of duty by the supplier on exempted goods - the goods cannot be said to be exempt inasmuch as the notification relied upon in the appeal of Revenue is a non-tariff notification which does not have the effect of section 5A of Central Excise Act, 1944 and is merely procedural and conditional - It is also settled law that it is not open to the central excise authorities having jurisdiction over the buyer to determine leviability to duty of a seller in another jurisdiction. - AT
-
From careful reading of Section 66 D(f) of the Finance Act, 1994, there is no ambiguity that the statute does not envisage levy of service tax on any process amounting to manufacture or production of goods - the payment of service tax by the appellant on the job charges collected on Die Casting of Components from Aluminium Metal was totally unwarranted and against the spirit of the law as quoted above. - AT
Case Laws:
-
GST
-
2023 (11) TMI 401
Release of cash seized from the Petitioner - More than 6 months have passed from the date of seizure - consideration received on sale proceeds of silver bars - unexplained transaction under the Goods and Services Act or not - HELD THAT:- Reading the CGST Act and particularly the preamble thereto, would indicate that it is an act to make a provision for levy and collection of tax on intra-State supply of goods or services or both by the Central Government and for matters connected therewith or incidental thereto - When this is read in context of provisions of sub-section (2) of section 67, obviously, when the proper officer confiscates any goods, documents, books or things, he must have reason to believe that they shall be useful for or relevant to any proceedings under this Act. Reading of affidavit primarily explains that even as per the case of respondent it was not the opinion of the proper officer that it was a seizure in relation to unexplained transaction under the Goods and Services Act, but it was an amount of consideration received on sale proceeds of silver bars. This therefore has to be read in light of observations of Division Bench of Kerala High Court in the decision of Shabu George [ 2023 (4) TMI 252 - KERALA HIGH COURT] . Para-3 of the aforesaid decision of Kerala High Court held that as the respondent has retained the seized cash for more than six months and is yet to issue a show cause notice to the appellants in connection with the investigation, there can be no justification for a continued retention of the said amount with the respondent. We therefore, allow this appeal by directing the first respondent to forthwith release to the appellant the cash seized from the premises, against a receipt to be obtained from him. Once it is found that the cash did not form a part of stock in trade, it could not have been seized. Admittedly, there is no requisition under section 132(A) of the Income Tax Act, though, it was the case of the State that intimation was sent to the Income Tax Department. Even otherwise, the petitioner has not shown the cash as stock in trade - Even otherwise on the facts of this case, what is evident is that the Seizure memo was dated 13.11.2020 and in accordance with sub-section (7) of section 67 thereof when no Notice in respect thereof is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession, they were seized. On this ground thereto, the petitioner is entitled to the prayer that the amount of cash seized i.e. Rs.69,98,400/- to be returned forthwith to the petitioner. Petition allowed.
-
2023 (11) TMI 400
Principles of natural justice - service of notice upon petitioner - ex-parte order - HELD THAT:- Parties have proposed that the order impugned may be set-aside giving liberty to the respondents to issue fresh notice in accordance with law which may be responded by the petitioner within the time frame fixed in the notice and thereafter fresh order be passed. The writ petition is disposed of by requiring the respondents to issue fresh notice, to the petitioner, in accordance with land and thereafter proceed to pass orders, strictly in accordance with law.
-
2023 (11) TMI 399
Validity of third notice issued by respondent No.2 under the provisions of Section 73 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- From a perusal of the documents, it appears that on 21.09.2021, the first show cause notice was issued and thereafter, on 21.02.2022, the second show cause notice was issued and both the proceedings were dropped by respondents No.3 4 vide order dated 27.04.2022 and 13.06.2022 respectively. It is categorically stated in the reply of the State that proceedings were dropped on the ground that show cause notice was issued and respondents No.1 2 had taken cognizance of the matter on 27.08.2021 though it is not specifically stated in the order dated 13.06.2022 that a third show cause notice has been issued by respondent No.2 according to the provisions of Section 73 of the GST Act. Taking into consideration the fact that the petitioner has a remedy to file reply to the show cause notice before the respondent authorities, who have issued the show cause notice, also considering that present is not a case where the principle of natural justice of the petitioner has been violated or the proceedings are without jurisdiction, in the considered opinion of this Court, respondents No. 2 3 have the authority of law to issue such show cause notice according to the provisions of Section 73 of the GST Act, 2017. Hence, no exceptional case is made out for interference. Petition dismissed.
-
Income Tax
-
2023 (11) TMI 405
Additions beyond the scope of limited scrutiny assessment - Conversions of Limited Scrutiny to Extensive Scrutiny - as a result addition of long term capital gain AND disallowing the deduction claimed u/s. 54F - AR argued that the notice issued u/s. 143(2) was a limited scrutiny to verify the huge cash deposit - HELD THAT:- CASS is a system driven identification of returns for limited scrutiny. The picking up of a return under CASS for scrutiny must be restricted only to the selected reason. Therefore procedurally, the Ld.AO must confine the scrutiny to the limited reasons selected under CASS. Details in respect of sale deed / purchase deed, the exemption claimed by the assessee in the return of income were also called for along with the details of large cash deposits. However we note that no steps has been taken to convert the limited scrutiny into complete scrutiny wherein the AO could have had the jurisdiction to verify other details. Under such circumstances, we are of the considered view that the Ld.AO has overstepped his jurisdiction by making an addition in the hands of the assessee by disallowing the deduction claimed u/s. 54F. We direct the Ld.AO to delete the disallowance so made. Unexplained Cash Deposits/income u/s. 69A r.w.s 115BBE - cash received from contract receipts is not acceptable as Assessee has not provided any confirmation or any documents/contract agreements from his clients to prove that he has undertaken and performed the contract work, nor submitted the statement of affairs of his business to support the income earned - HELD THAT:- Total cash deposited during the relevant Financial Year is Rs. 41,19,500/-. AO has made disallowance of Rs. 43,39,000/- u/s. 69A r.w. 115BBE of the act. There is a disparity in the cash deposit as per the statement filed by the assessee, scanned and reproduced hereinabove vis-a-vis the observation of the Ld.AO in para 5 of the assessment order. The summary of the total deposits provided by the assessee reveals that in Canara Bank account there is a deposit of Rs. 37 Lakhs and in State Bank of Mysore account, a sum of Rs. 4,19,500/- was deposited. Assessee has not provided any details as to the source of such cash deposited for the relevant financial year except for stating that these are business receipts - we remand this issue back to the Ld.AO for necessary verification in accordance with law. Assessee is directed to file all relevant details in respect of the source of actual cash deposited into the bank accounts in order to exonerate himself from the rigour of section 69A r.w. 115BBE of the Act. Ground partly allowed for statistical purpose
-
2023 (11) TMI 403
Accrual of income - Taxability of income - interest income generated on the funds received from Gol - ownership of Interest earned - as per revenue assessee has not included the same in its ITR as income from interest as per provision of section 194A - AO made addition of the interest in the hands of the assessee treating it as the income from other sources u/s. 56 - HELD THAT:- As decided in Handicrafts Development Corporation [ 2020 (5) TMI 410 - ITAT DELHI] when an assessee collects certain income on behalf of Government and remits the income back to the government and TDS is deducted in the name of assessee then in all practical purposes income collected by the assessee is its income in hands of the assessee and the rent paid back to the Government is its expenses and the TDS credit/refund will be provided to the assessee in whose name TDS has been deducted. Hence, in this situation also there would be no income chargeable to tax. As relying on DELHI STATE INDUSTRIAL DEVELOPMENT [ 2007 (4) TMI 150 - HIGH COURT, DELHI] CIT(A) held that the interest income generated on funds owned by Gol is not an income in the hands of the appellant company but it is the income of Gol and accordingly it is not required to be taxed in the hands of the Appellant Company. Therefore, the ld. CIT(A) held that the action of the AO treating the interest income in the hands of the appellant is not sustainable on the facts of the case as well as the law. Before us, as submitted the Entire interest earned has already been deposited in to the consolidated fund of India by way of challans. Since the entire amounts received as interest stands deposited in the consolidated fund of India, we hold that no addition is called for in the hands of the assessee. For the limited purpose of reconciliation of the interest earned and deposited in the CFI, we direct the assessee to furnish the entire details of receipt of interest income earned, TDS deducted and the total amounts deposited in CFI before the AO in a consolidated statement, which the AO shall verify and accord the benefit. Appeals of the Revenue are dismissed.
-
2023 (11) TMI 402
Revision u/s 263 - non-examination of the issue of contractual payment made to a related party of the assessee without deduction of tax at source as applicable, which warranted disallowance of 30% of the expenses as per section 40(a)(ia) - HELD THAT:- The documents in the assessment records itself substantiated the assessee s explanation that it had not incurred any job work charges of the nature of granules work at all. Therefore, PCIT s finding of error in the order of the Assessing Officer that the assessee having made payment for job-work without deducting tax at source and the AO having not examined the issue, we find, does not emanate and is in fact negated from the facts on records before him by way of audited financial statements which do not reveal any payment /expense incurred by the assessee for job-work. For the above reason we do not agree with the ld. PCIT that the assessee failed to substantiate its explanation that the tax audit report mistakenly mentioned granule work , when the fact is that his explanation was patently obvious from the data revealed in the financial statements of the assessee itself. Even otherwise, assessee has demonstrated before us that the Assessing Officer had appreciated the nature of income and expenses incurred by the assessee correctly and noted that the assessee had earned income from job work charges and not paid any expenses on account of the same. As obvious records with the AO, which included the financial statements of the assessee more particularly the Profit and Loss Account as noted by us above along with its schedules, the purchase books of the assessee, the ledger of purchases, the copy of job work account, the copy of account of Anand Synthetic - all revealed the fact that the assessee had not incurred any expenses on account of job work; that the expenses incurred in relation to Anand Synthetic, noted by the ld. PCIT, was in relation to purchase of granules and not for any job work and in fact the assessee had earned job work income from M/s. Anand Synthetic. The facts coming out so clearly from the records, PCIT surely was misguided by the incorrect words used by the Tax Auditor in the Tax Audit Report mentioning expenses incurred by the assessee with its related party Anand Synthetic in the nature of granules work instead of granules purchased. We are convinced that there was no error in the order of the AO vis- -vis the issue of the assessee having not deducted tax at source on any alleged granules work payment made to its related parties warranting disallowance of expenses @ 30%; the order passed by the ld. PCIT is, therefore, held to be not sustainable in law and is, therefore, set aside. Appeal of assessee allowed.
-
2023 (11) TMI 398
Seeking a lower deduction of tax certificate ( LDC ) - Seeking a lower deduction of tax certificate ( LDC ) - LDC was grated for TDS @ 0.5% instead of @ 0.01% as sought - Rate of deduction of Tax Deducted at Source ( TDS ) is 1% (one per cent) u/s 194O - HELD THAT:- DCIT(TDS)/Respondent No. 1 set forth no reasons whatsoever as to why the Petitioners request that TDS should be deducted at a rate of 0.01% (zero point zero one per cent) ought not to be accepted. Further, at the request made, Learned Standing Counsel, an opportunity was granted to the Respondents to file a counter-affidavit in the matter which would furnish reasons as regards the conclusion arrived at in the Impugned Order. However, this Court specifically observed therein that the Impugned Order must stand on its own legs, and accordingly, the reasons furnished by way of a counter-affidavit could not be supplanted into the Impugned Order. This Court is of the considered opinion that the principle enunciated in Mohinder Singh Gill [ 1977 (12) TMI 138 - SUPREME COURT] is applicable to the case herein. wherein the Supreme Court rejected the notation of supplementing reasons in relation to an executive order by way of an affidavit. Therefore this Court must consider whether the Impugned Order read with the Impugned Letter, is a speaking and well-reasoned order so as to satisfy the mandate of Rule 28AA of the IT Rules, devoid of the reasons furnished by the Respondents before this Court vide its counter affidavit. As perused the Impugned Order read with the Impugned Letter and we find that the reasons furnished by the Respondent No. 1 qua the Application i.e., as to why the Petitioners request that TDS should not be deducted at a rate of 0.01% (zero point zero one per cent), hinges on broad generalizations in relation to the propriety of projected estimations of revenue and tax liability, and accordingly has been has been issued mechanically reflecting non-application of mind. Accordingly, following Camions Logistics Solutions (P) Ltd. [ 2020 (12) TMI 1084 - DELHI HIGH COURT] this Court find that the Impugned Order read with the Impugned Letter suffers from non-application of mind which would certainly result in grave prejudice to the Petitioner. WP allowed.
-
2023 (11) TMI 397
Benefit of accumulation u/s 11(2) as Audit report in form 10 filed during the assessment proceedings - assessee has not filed form No.10 along with its income tax return as required u/s 139(1) but filed subsequently along with income tax return u/s 139(4) - HELD THAT:- This issue has already been decided in case of Commissioner of Income Tax vs. Nagpur Hotel Owners Association [ 2000 (12) TMI 99 - SUPREME COURT] as well as Bochasanwasi Shri Akshar Purshottam Public Charitable Trust [ 2018 (10) TMI 995 - GUJARAT HIGH COURT] So in view of the matter we are of the considered view that filing of audit report in form No.10 by the assessee on 23.12.2016 during the assessment proceedings as the assessment order was passed on 25.10.2018 is a valid compliance under the Act and as such seeking benefit of section 11 by the assessee on the basis of audit report is admissible under the law. AO as well as the Ld. CIT(A) have erred in not extending the benefit of section 11(2) for want of filing audit report in form 10 along with the return of income. So the AO is directed to extend the benefit claimed by the assessee under section 11(2) on the basis of audit report in form 10 filed on 23.12.2016 during the assessment proceedings subject to verification. Appeal filed by the assessee is allowed.
-
2023 (11) TMI 396
Validity of order of the DRP without mentioning the DIN number - simultaneous DIN number was generated through separate communication - HELD THAT:- A perusal of the DRP order shows that it is clear in the body of DRP order, no DIN number is mentioned nor there is any reason of not mentioning the DIN number in order of the DRP. Is such a situation, the DRP order will lose its validity. Subsequent separate communication of DIN is a superfluous exercise. As relying on Brandix Mauritius Holdings Ltd. [ 2023 (4) TMI 579 - DELHI HIGH COURT] and in terms of paragraph 4 of the circular No. 19/2019 dated 14.08.2019, we hold that the impugned DRP order is invalid and shall be deemed to have never been passed. Accordingly, we quash the impugned DRP/AO order. Further, the issue that a simultaneous DIN number was generated and communicated have been considered by Co-ordinate Bench of the Tribunal in the case of Abhimanyu Chaturvedi [ 2023 (8) TMI 378 - ITAT DELHI] which says forwarding of the intimation of generation of the DIN in ITBA is only a subsequent action and that is not part of assessment order. The manner in which the word communication is defined shows every notice, order, summons, letter and any correspondence from Tax authorities should have a DIN quoted and it is for this reason that the Intimation issued about the DIN of assessment order itself has a DIN quoted on it. - Decided in favour of assessee.
-
2023 (11) TMI 395
TDS u/s 192 or 194J - payment to the consultant-doctors and retainer-doctors - Whether there was employer- employee relation between both the parties? - as per revenue consultant-doctors/ retainer-doctors formed the core of the assessee s business and their expertise are used to run the company and not just for support to the company - HELD THAT:- Identical facts were examined in past years as well and the judicial consensus is that the provisions of section 194J apply to the retainer-doctors and not those of section 192B of the Act after noting differences between the two types of agreements i.e. salaried doctors and doctors appointed on retainership basis. Certain clauses in contract with retainers which gave the erroneous impression to the Ld. AO of creating an employer-employee relationship has been explained by the assessee that they do not create such a relationship. The explanation of the assessee has unanimously been accepted by various judicial pronouncements. The co-ordinate bench of Delhi Tribunal in its decision rendered on 27.06.2022 in assessee s own case [ 2022 (7) TMI 846 - ITAT DELHI] to hold that the provisions of section 194J of the Act are applicable to the assessee and not those of section 192 of the Income tax Act 1961 therefore, the appellant cannot be treated as an assessee in default in so far as the question of deducting tax at source in respect of doctors engaged as retainers and consultants was concerned. Decided in favour of assessee.
-
2023 (11) TMI 394
Condonation of delay filing appeal before ITAT - delay of 137 days - Estimation of income - Bogus purchases - HELD THAT:- In the present case, the delay of 137 days cannot be simply condoned on the basis of the unsubstantiated claim of the assessee that the same had occasioned on account of failure on his part to check his email account where the order of the CIT(Appeals), NFAC was dropped. In fact, the conduct of the assessee before the lower appellate authority clearly evidences his disregard for the process of law, which, find, he had carried forward before us by preferring the appeal beyond a period of 137 days after the lapse of the stipulated time period. Also, as observed by the Hon ble Supreme Court in the case of Ramlal, Motilal and Chotelal Vs. Rewa Coalfields Ltd. [ 1961 (5) TMI 54 - SUPREME COURT] that seeker of justice must come with clean hands, therefore, now when in the present appeal the assessee appellant had failed to come forth with any good and sufficient reason that would justify condonation of the substantial delay involved in preferring of the captioned appeal, therefore, decline to condone the delay of 137 days and, thus, without adverting to the merits of the case dismiss the captioned appeal of the assessee as barred by limitation.
-
2023 (11) TMI 393
Penalty proceedings u/s 271(1)(c) initiated after the assessee s demise - liability of legal representatives - HELD THAT:- We find that the instant issue is no more res integra in light of CIT vs. Gowri [ 2019 (3) TMI 1165 - MADRAS HIGH COURT ] decided against the department, as upheld in [ 2019 (8) TMI 1883 - SC ORDER] hold in very clear terms that an assessee s legal representatives are not liable in penalty proceedings after his/her demise in terms of sec. 159 - We adopt the very reasoning herein as well to decline the Revenue s arguments supporting the impugned penalty in question. Assessee appeal allowed.
-
2023 (11) TMI 392
Revision u/s 263 - validity of assessment as framed u/s 153A questioned Scope of non-abated assessment without any incriminating material - additional ground raised by the assessee pertaining to approval granted under Section 153D - Assessee argued revisionary proceedings have been invoked by the Ld. PCIT based on audit objection which is nothing but borrowed satisfaction - as per CIT(A) there is violation on the part of the assessee in compliance of provisions of Sections 43CA - HELD THAT:- Contrary to the arguments and to distinguish with the case laws relied upon by the Ld AR, in present case the revenue has submitted a report of the AO to substantiate that there was deliberations between the AO and JCIT, also certain additional evidence in the form of communications between the departmental authorities were furnished before us, which were further strengthened by producing the assessment case records maintained by the department. Since the issue regarding approval u/s 153D and its validity depends upon verifications of such facts, also the contention raised before us was never raised before the departmental authorities, under such facts and circumstances, in the interest of natural justice, on careful perusal of the material available on record, case laws pressed into and report of the department, we find it appropriate to restore this issue to the file of AO for fresh adjudication of the same on the basis of facts and law, the assessee shall remain at liberty to raise such issues before the revenue authorities and to furnish necessary information/ evidences and submissions in support of his contentions. Consequently, the additional ground of the assessee regarding noncompliance of provisions of section 153D in granting the approval to draft order by Ld JCIT, is partly allowed. Appeal pertaining to non-abated assessment year wherein no incriminating material was found during the course of search - Nothing is apparent or emanating pertaining to incriminating material in the relevant AY 2014-15, therefore, in absence of information pertaining to incriminating material on record, we are unable to comprehend that whether there was any incriminating material pertaining to A.Y. 2014-15, unearthed during the search proceedings or not. Under such circumstances, such a contention of the assessee cannot be concurred with at this stage and therefore, the grounds raised pertaining to no incriminating material surfaced for a non abated assessment year is liable to be dismissed. Our observations are supported with the judicial pronouncement in the case of NTPC [ 1996 (12) TMI 7 - SUPREME COURT] as held that the tribunal is not prevented to consider the questions of law arising in assessment proceedings though not raised earlier, but the relevant facts should be available on records. Such guiding interpretation by the Hon ble Apex Court suggests that the tribunal has the power to consider question of law which are based on relevant facts and material available on records, but without involving itself in the issue as an investigator to unearth the relevant facts. In terms of aforesaid observations, the contention raised by the Ld. AR w.r.t. non-abated assessment without any incriminating material is rejected in absence of any observation in the orders of revenue authorities that there was no incriminating material for the un-abated assessment year 2014-15. The contention of the assessee that the issue raised in initiating the proceedings u/s 263 was based on objection by the revenue audit department proves that the revisionary proceedings have been invoked by the Ld. PCIT based on audit objection which is nothing but borrowed satisfaction hence the said revision proceedings shall be treated as bad in law. In this context, since there were lots of deliberations by Ld. PCIT in invoking the provisions of section 263, therefore, it cannot be perceived that the initiation of proceedings with borrowed satisfaction, further, our observation is supported with the decision in the case of Gopal Sponge and Power Pvt. Ltd.[ 2023 (11) TMI 296 - ITAT RAIPUR] Admittedly, the questions and aspects pertaining to the transactions of Sale of plots by the assessee were validly raised by the Ld. PCIT, though the information qua the transactions were called for by the Ld. AO and duly submitted by the assessee but the necessary enquiries w.r.t. section 43CA were not conducted by the Ld. AO leads to hold the assessment order erroneous and accordingly prejudicial to the interest of revenue . The assessee s contention that proper opportunity of hearing was not granted cannot not accepted while 3 responses by the assessee were considered by the Ld PCIT, and the issue is remitted back to the files of AO for fresh adjudication without any binding conclusion to be followed by the AO, the assessee is also at liberty to submit all his explanations and contentions before the AO. In the course of hearing to substantiate the questions raised by Ld. PCIT, certain additional evidence under a request application to grant leave to furnish such evidence dated 07/06/2023 have been submitted by the Ld. AR, which are allowed to be admitted and on perusal of such details which contains affidavit from M/s Adhiraj Developers, Flow chart explaining the Flow of consideration received from M/s Adhiraj Developers w.r.t. sale deed executed and relevant part of Bank Statement of M/s Adhiraj Developers. On perusal of such additional evidence, it is amicably realized that all these information, which were never submitted before the revenue authorities, are crucial in deciding the issues in hand, at the same time these needs further examination, analysis and verification of its veracity to arrive at the conclusion that whether they support the contentions raised by assessee or not, thus should be restored back to the file of AO. This itself shows that the Ld AO, who have never enquired for all such information, was failed in performing his duties in examining the facts in light of applicable provisions of law. We are of the considered view that the order of Ld. PCIT is justified, the assumption of jurisdiction in initiation of proceedings u/s 263 are according to law, with proper application of mind. Since, the assessment order is set aside and opportunity of being heard is granted to the assessee, there is no prejudice to the assessee, accordingly, we find substance in the order of Ld. PCIT and therefore the same stands sustained. Since, we have approved the order of Ld. PCIT u/s 263 in restoring the case of the assessee back to the file of Ld. AO for fresh assessment for the AY 2014-15, our decision rendered therein shall be mutatis mutandis applicable in other appeals of the assessee for the AY 2015-16, 2016-17 and 2017-18, having identical facts, issues and circumstances except the quantum involved.
-
2023 (11) TMI 391
Assessment of insurance business - Computing taxable income as per section 44 read with rule No.2 of Schedule I -Adjustment of earlier year surplus - HELD THAT:- We notice that the assessing officer while recomputing the income of the assessee has made the adjustment stating that the revenue in earlier assessment years has done a similar adjustment. CIT(A) has given relief to the assessee by relying on the decision of the coordinate bench in assessee's own case for earlier assessment years. Therefore there is merit in the contention that the facts for the year under consideration are identical to that of the earlier years and that the decision of the coordinate bench for earlier years are mutatis mutandis applicable to the year under consideration also. We notice that in the above case, the co-ordinate bench has considered the various adjustments made to the income of the assessee and has held that in assessee s case the income should be computed as per the provisions of section 44 and accordingly, to be taxed under section 115B. Therefore respectfully following the above, we see no reason to interfere with the decision of the CIT(A). Disallowance u/s 14A - We hold that the provisions of section 14A are not applicable in assessee s case while granting exemption to an income earned on sale of investment primarily because of the reason of the withdrawal or deletion of sub-r.5(b) to First Schedule of s. 44 of IT Act, thus allow the ground raised in this regard in favour of the assessee. Exemption towards dividend income, interest income from tax free bonds and income from pension line of business - We notice in this regard that the coordinate bench in the case of ICICI Prudential Insurance Co. Ltd [ 2012 (11) TMI 13 - ITAT MUMBAI] has considered the issue of claiming exemption towards income from pension line of business and dividend income and held that the only effect of section 44 is that the operation of the provisions referred to therein is excluded in the case of an assessee who carried on insurance business and in whose case the provisions of rule 2 of the First Schedule are attracted. If the deductions which are claimed by the assessee do not fall within the provisions which are referred to in section 44, it will have to be held that the applicability of those provisions in the case of an assessee whose assessment is governed by section 44 read with rule 2 in the First Schedule is not excluded. Therefore respectfully following the above decision of the coordinate bench we hold that the assessee is entitle to claim exemption under section 10(15) towards interest income from tax free bonds, under section 10(34) towards dividend income and under section 10(23AAB) towards surplus of Participating Pension Business.
-
2023 (11) TMI 390
TDS u/s 195 - disallowances u/s 40(i)(a) - payments made to Dubai Leading Technologies - whether India-UAE DTAA has no clause on Fee for Technical Services? - HELD THAT:- We do not find any infirmity in the order of the Ld. CIT(A) and uphold his finding that the payments made to Dubai Leading Technologies cannot be brought to tax under Article 22 in the absence of a specific clause for FTS in the India-UAE DTAA. The impugned payments are in the nature of business income which are not chargeable to tax in India in the absence of a PE of the payee/remittee in India. We further uphold the finding of the Ld. CIT(A) that there is no obligation to deduct tax at source under section 195 of the Act as the impugned payments are not chargeable to tax in India as held by the Hon ble Apex Court in GE India Technology Centre (P) Ltd. [ 2010 (9) TMI 7 - SUPREME COURT] and hence the disallowance made by the Ld. AO under section 40(a)(i) of the Act is erroneous. Disallowance u/s 40(a)(i) - payment made to Brain Point Consultants, UAE - contention of the Revenue is that the impugned payments made by the assessee for rendering marketing and sales support services are in the nature of FTS and in the absence of a specific clause on FTS under the India-UAE DTAA, the impugned payments should be taxed under the provisions of Article 22 on other income which is residuary clause under the India-UAE DTAA - HELD THAT:- As abundantly clear that the Ld. CIT(A) after considering the impugned issue in detail has given his finding that invocation of the provisions of section 40(a)(i) of the Act by the Ld. AO is erroneous for the reason that the income of a non-resident agent from provision of marketing and sales support services rendered for overseas client cannot be included under section 5(1) of the Act as the same does not deem to accrue or arise in India based on the decision of Eon Technology P. Ltd. [ 2011 (11) TMI 20 - DELHI HIGH COURT] and further holding that in the absence of a specific clause on FTS under the India-UAE DTAA, provisions of Article 22 on residuary/ other income cannot be invoked based on the decision in the case of Kingfisher Airlines Ltd. [ 2019 (11) TMI 689 - ITAT BANGALORE] we are inclined to uphold the order of the Ld. CIT(A). Accordingly ground No. 2 of the Revenue is dismissed. Disallowance u/s 40(a)(i) - payment made to OIT Managed Services Mauritius - assessee entered into an agreement with OIT Managed Services Mauritius for provision of Amazon Web Service, Hosting Service, Identity and Access Management, Virtual Private Cloud, Virtual Machine Services to the assessee - HELD THAT:- Web hosting services availed by the assessee do not constitute royalty or FTS and hence payments made by the assessee to OIT Managed Services Mauritius in consideration of such services are not chargeable to tax in India consequent to which the assessee is not required to withhold any tax on the impugned payments. Having said so, we also hold that the impugned payments are not taxable in India in the absence of any specific clause on FTS in India-Mauritius DTAA for the year under consideration for the reasons recorded in para 8, 8.1, 8.2 and 10 above. Accordingly, ground of the Revenue is dismissed.
-
2023 (11) TMI 389
Addition u/s 68 - unexplained cash credit - onus to prove - HELD THAT:- During the second round of the assessment proceedings after remand by the Tribunal, the assessee has not filed the required details as called for to explain the credits but the assessee has filed a confirmation, thereafter, which does not contain the date and also not contain the seals/stamp of the company. The said confirmation does not even disclose regarding the mode of advance whether by cheque or cash. Though the bank statement produced by the assessee reflects the depositing of 50,00,000/-, but does not indicates as to whom from the said amount has been received. The assessee has not produced any document before the CIT(A) or before us to prove the identity to the creditworthiness of the creditor and the genuineness of the transaction. CIT(A) has also observed that the assessee has failed to explain cash credit within the meaning of section 68 - Thus lower authorities have committed no error and we find no infirmity in the order of the CIT(A). Decided against assessee.
-
2023 (11) TMI 388
Validity of assessment order with no DIN mentioned - Revenue submitted that DIN was separately generated and it was informed to the assessee by a separate letter - HELD THAT:- CBDT has specifically stated that any communication without DIN shall be deemed to have never been issued. It means communication without DIN is void ab initio. The assessment order is treated as communication in Circular No.19/2019. In this case, the assessment order is dated 25.11.2019. The effective date of the Circular No.19/2019 was 1st October, 2019. Thus, the assessment order was issued after the 1st October, 2019. It is an admitted fact that there is no DIN mentioned in the order. DR submitted copy of a letter that DIN was subsequently generated on 28.11.2019 and communicated to the assessee. We asked ld.DR whether any written approval of Chief Commissioner of Income Tax was obtained for such letter as, as per Circular No.19/2019 any communication which is manually issued without DIN shall be issued with prior written approval of Chief Commissioner of Income Tax. However, no such approval was produced before us. As in the case of Ashok Commercial Enterprises [ 2023 (9) TMI 335 - BOMBAY HIGH COURT] has held that assessment order without DIN shall be treated as invalid and deemed never to have been issued. Thus assessment order is without DIN, it shall be treated as invalid and deemed never to have been issued. Decided in favour of assessee.
-
2023 (11) TMI 387
Disallowance u/s 14A - sufficiency of own funds - HELD THAT:- As regards to disallowance in both the years, the assessee is having more interest free funds than the investments. As regards to assessment year 2012-13, the assessee has given revised computation and already made suo-motto disallowance before CIT(A). But as regards to assessment year 2013-14 is concerned, the assessee s interest free funds available is at Rs. 114.93 crores as against which investment giving rise to exempt income stood at Rs. 100.72 crores. Hence, for assessment year 2012-13, we direct the AO to restrict the disallowance of interest expenses under Rule 8D(2)(ii) at Rs. 51,29,547/- and in assessment year 2013-14, no disallowance should be made. As regards to value of investment under Rule 8D(2)(iii) i.e., 0.5% of average value of investment for the assessment year 2012-13, disallowance should be restricted at Rs. 8,79,583/- and for assessment year 2013-14, it should be restricted to the extent of amount already disallowed by the assessee at Rs. 36,12,589/-. Disallowance of interest claim - Claim disallowed on the ground of diversion of borrowed funds used for the purpose of non-business purposes - HELD THAT:- The assessee explained the nature of business of the assessee that includes sand mining and shipping business, which the subsidiary company is also doing. The assessee explained this fact from the copy of ledger account that the subsidiary incurred expenditure at harbor and other places on behalf of assessee company. Hence, the ld.counsel before us now stated that the assessee s advance free loan to subsidiaries is for the purpose of business and hence, the same should have been allowed. We noted that the assessee is able to prove that the assessee s subsidiaries namely Pradeep Shipping Pvt. Ltd., and Trimex Sands Pvt. Ltd., both are subsidiaries and engaged in the business as that of the assessee and it is called the expansion of business. Even in these subsidiaries and that of the assessee, there is common management and unity of control is there. Once this fact is there, the Revenue cannot disallow the interest expenditure because it is incurred for the purpose of business. Hence, we allow the interest and direct the AO accordingly. The appeal of the assessee is allowed. TP adjustment on account of transfer pricing relating to barite-Lumps - CIT(A) deleted the addition by observing that the TPO has proceeded to compute the margins of AE with non-AE to whom there is only a single export transaction made post increase in the price and so the CUP treated by TPO is not exact one - HELD THAT:- We noted that apart from the above difference pointed out by CIT(A) in his order that the single transaction adopted by TPO for comparing the AE and non-AE transactions for which CUP method is applied. Apart from this, we noted from the sheet that the mark up cost for transaction with AE is 40.16% as against 41.93% with non-AE. This difference is within the range of +/- 5% variations allowed under the second proviso to sub-section (2) of section 92C of the Act. Once this is a fact, we find no infirmity in the order of CIT(A) and hence, we confirm the same. This issue of Revenue s appeal is dismissed. Disallowance u/s 40(a)(ia) - non-deduction of TDS on compensatory charges - HELD THAT:- We noted that the payments made to APMDC is clearly in the nature of compensatory and these cannot be called as interest which are contemplated in the provisions of section 194A of the Act, for the purpose of deduction of TDS. Hence, we find no infirmity in the order of CIT(A), who has rightly deleted the disallowance and we confirm the same. Accordingly, this appeal of the Revenue is dismissed.
-
2023 (11) TMI 386
Applicability of Higher Rate of Tax u/s 115BBE - assessee disclosed the surrendered income as business income with explanation of source during the survey and assessment proceedings - HELD THAT:- As the expenditure incurred for creating a business asset must have been generated through the business carried out by the assessee and that expenditure laid out for the purpose of business is to be allowed deduction either as expenditure or to be capitalized on which depreciation will be allowed. In the present case, to the extent of the expenditure incurred for construction of the building, out of unexplained source is concerned, it is to be construed as income earned from the business and it will take character of the business income. The case law relied upon by the CIT(A) is distinguishable on the facts as in that case the amount surrendered during survey was not reflected in the books of account and the source from where it was derived was not declared/explained whereas in the present case the amount surrendered during survey was duly reflected in the books of account and the source it was declared/explained as business activity with due payment of Tax liability and the authorities below failed to prove the contrary to disprove source of income other than Business income. Respectfully following the order of the Co-ordinate Bench, Chandigarh in the case of M/S. ARORA ALLOYS LTD [ 2019 (11) TMI 410 - ITAT CHANDIGARH] we direct the Assessing Officer to treat surrendered income to the extent of expenditure on building as business income.
-
2023 (11) TMI 385
Provision for obsolete stock - AO observed that this expenditure cannot be allowed since the assessee has not proved with the reasonable certainty as given in the provisions of section 37(1) of the Act and not provided documentary evidence in this regard - Assessee is a manufacturing company engaged in manufacturing of heavy earth moving equipment and railway rolling stock having plants all over the country - HELD THAT:- The contention of ld. A.R. is that the assessee has debited the net provision for obsolescence of stock to the P L account and same has been claimed as a deduction. However, it was not demonstrated before us that there was no under- valuation of this inventory and the excess provision, if any, was written back in the succeeding year or in year of sale of obsolete stock, etc. nor was it demonstrated that obsolete stock was valued at lower of cost or net realizable value. In principle, we hold that the provision for obsolete stock is allowable but it requires to be satisfied that the value of obsolete items of inventory is valued on the cost or market price, whichever is less. In the circumstances, we remit the matter back to the file of AO with a direction that the provision for obsolete stock be allowed as a deduction subject to satisfying himself that the valuation is done based on the principle that at cost or market price or not realizable value, whichever is less. Further, there cannot be double deduction in one assessment year when the provision is made and another time when it was actually written off in its books of accounts of assessee. Decided partly in favour of assessee for statistical purposes. Expenditure on scientific research u/s 35(2AB) - Department of Scientific Industrial Research ( DSIR ) has not quantified the same in that certificate - HELD THAT:- Admittedly, there was no dispute that the assessee has incurred capital expenditure of Rs. 7.98 crores on scientific research which is entitled for weighted deduction u/s 35(2AB) of the Act and the balance amount of Rs. 46.56 crores, which was revenue expenditure spent on scientific research. Out of this, assessee claimed only a sum of Rs. 38.62 crores u/s 35(2AB) of the Act and the balance amount of Rs. 7.94 crores cannot be claimed u/s 35(2AB) of the Act on the reason that it was not certified by DSIR. However, this expenditure of Rs. 7.94 crores has been incurred by the assessee for the purpose of business and this fact is not disputed by the AO and in our opinion, assessee is entitled for deduction on this amount u/s 37 of the Act. This view of ours is fortified by the judgement of order of the Tribunal in the case of Auto Ignition Ltd [ 2022 (1) TMI 327 - ITAT DELHI] Allowability of liquidity damages for delay in supply of goods - Claim disallowed by AO on account of non- compliance of terms conditions of the contract u/s 37(1) - HELD THAT:- As seen from the facts of the issue, the above expenditure has been incurred as a compensation for breach of contractual obligation. In our opinion, there is a difference between penalty for infraction of law and damages for breach of contract in the context of deduction u/s 37(1) of the Act and this issue was considered by Hon ble Gujarat High Court in the case of Principal CIT Vs. Mazda Ltd. [ 2017 (9) TMI 1038 - GUJARAT HIGH COURT] wherein held that whenever damages are to be paid by an assessee for a breach of contract, such damages are treated to be normal expenses of business. It was further held that where an assessee has to pay damages to other party to fulfill the contract entered into by him in the ordinary course of his business, the amount of damages to be paid is allowable deduction if it is in the ordinary course of business and is not opposed to public policy - CIT(A) is justified in allowing the claim of the assessee in respect of compensation paid for breach of contractual obligation.
-
2023 (11) TMI 384
Differential unutilized MODVAT credit referable to closing stock invoking the provisions of Section 145A - HELD THAT:- As decided in own case AY 2005-06 [ 2023 (2) TMI 1210 - ITAT MUMBAI] Tribunal has not committed any error. (underlined for emphasis by us) It is evident from the above that irrespective of the method of accounting followed by the assessee, i.e. 'Inclusive method', wherein the taxes are included in the opening stock, purchases, etc. or the 'Exclusive method', the MODVAT credit does not have any impact on the profit of the assessee. Thus, following the ratio laid down by the Hon'ble Supreme Court in the case of Indo Nippon Chemicals Co. Ltd. [ 2003 (1) TMI 8 - SUPREME COURT] and followed by Diamond Dye Chem Ltd. [ 2017 (7) TMI 616 - BOMBAY HIGH COURT] we set-aside the order of the CIT (A) and direct the AO to delete the addition made on account of unutilised MODVAT credit. Sales tax incentive availed by the units located at Tikaria, Wadi, Chaibasa Damodar of the appellant under various schemes aggregating being capital in nature, in computing total income under the normal provisions of the Act. TDS u/s 194A - interest payment made to SBI Bank- Bahrain Branch - disallowance u/s.40(a) - HELD THAT:- As decided in own case AY 2005-06 [ 2023 (2) TMI 1210 - ITAT MUMBAI] CIT(A) in his order has given finding that Bahrain Branch of State Bank of India (SBI) is part of SBI which is governed by the Banking Regulation Act and this fact is not disputed by LD DR. Further it is also a settled position that a branch office is part of the entire SBI and not a separate legal entity. Payment to foreign branch of Indian entity tantamount to payment made to Indian company only. Accordingly, provisions of Section 195 are not applicable in respect of payments made to foreign branch of Indian Bank. Deduction u/s 80IA on TG-3 Power-Plant allowed - As deduction u/s. 80-IB was granted for an initial assessment year, same could not be rejected for subsequent assessment years unless relief for initial year was withdrawn. Addition of provision for gratuity made while computing book profit u/s 115JB is deleted. Wealth tax provision is not required to be added back while computing Book Profits under Section 115JB. Addition of provision for leave encashment made while computing book profit u/s 115JB is deleted. Addition of VRS expenditure pertaining to earlier years, capital expenditure debited and write down of value of assets while computing the book profit u/s.115JB - HELD THAT:- CIT(A) has allowed the claim of the assessee on the basis of decision of the case titled as Apollo Tyres Ltd. [ 2002 (5) TMI 5 - SUPREME COURT] . We also noticed that the issue has already been covered in favour of the assessee in the assessee s own case for the A.Y. 2002-03 we are of the view that the CIT(A) has allowed the claim of the assessee rightly. Amount transferred from Share Premium Account to the profit loss account was correctly reduced from Book Profits by the Assessee while computing book profit as per the provisions of Clause (i) of Explanation to Section 115JB(2) Disallowance u/s 14A r.w.r. 8D - Restrict the disallowance to 1% of the exempt income. The assessee gets the relief accordingly. Excise duty exemption received by assessee are capital receipts both for the purpose of computing income as per normal provision of the Act as well as book profit u/s 115JB of the Act and the addition made by Assessing Officer is deleted. Additional depreciation u/s 32(1)(iia) on the eligible assets acquired during the previous year 2005- 06 in computing the total income under the normal provisions of the Act - whether additional depreciation is allowable only on new machinery be. the first year in which it is put to use? - HELD THAT:- It is observed that coordinate bench in its later decision in the case of Ambuja Cement Limited [ 2022 (11) TMI 1419 - ITAT MUMBAI] holding company of assessee has allowed similar claim of depreciation. When coordinate bench of ITAT in its latest decision has decided issue in favour of assessee by holding that assessee is entitled for additional depreciation u/s 32(1)(iia), such later decision would prevail over the decision of Everst Industries Limited [ 2018 (4) TMI 426 - ITAT MUMBAI] relied upon by Ld DR. As a result, since this aspect of the matter is no longer res integra, we see no reasons to take any other view of the matter than the view so taken by the coordinate bench in the group concern s case of the assessee. We uphold the plea of the assessee and direct the Assessing Officer to allow depreciation u/s.32(1)(iia) of the Act. Capital gain computation - reference made by the A.O. to the Government Valuation Cell, New Delhi for determining fair market value of Okhla Land as on 01-04-1981 - HELD THAT:- AO was not justified in considering fair market value of land based upon DVO s report obtained u/s 55A of the Act. This ground of appeal is accordingly allowed. Apportionment of the indirect Head Office expenses in computing deduction u/s 80IA/ 80IB/80IC - Assessing Officer is directed to allocate Head office expenses (other than auditor fees and CMA expenses) on the basis of expenditure incurred by the units vis- -vis overall expenditure. Deduction u/s 80IA on infrastructure facility, being rail systems at Kymore, Tikaria, Wadi I Wadi II - only dispute of Assessing Officer for not allowing such deduction is that necessary form 10CCB was not filed along with return of income and claim was not quantified in such return of income - HELD THAT:- Claim of assessee is found to be correct and AO is directed to allow deduction u/s.80IA on Rail Infrastructure as quantified in form 10CCB subject to allocation of indirect expenditure as confirmed hereinabove. Denial of claim of exclusion of profit on sale of fixed assets in computing Book Profit u/s 115JB - We direct the assessing officer to recompute taxable long term capital gains arising on transfer of fixed assets as well as investments after giving the benefit of indexed cost of acquisition (if applicable) while computing taxable profits u/s 115JB of the Act. Thus, Assessee s appeal is partly allowed for statistical purpose. Amount transferred to Debenture Redemption Reserve cannot be added back while computing Book Profits. Outstanding BIS Marking Fees and Sales tax disallowed u/s 43B on the basis of Tax Audit Report of that assessment year - As assessee has claimed deduction of BIS marketing fees / sale tax as per provision of section 43B of the Act. The issue requires verification at the end of the Assessing Officer hence, it is remitted to the file of AO to verify the claim of the assessee as per law, accordingly, this ground of appeal is allowed for statistical purpose.
-
Customs
-
2023 (11) TMI 404
Refund of Anti Dumping Duty - refund application filed without challenging the assessment order under Section 17(4) of Customs Act, 1962 - Bills of Entry were finally assessed without mention of demand/ payment of Anti Dumping Duty - HELD THAT:- Though there is a mention in the order of the authority s below about the endorsement on system about payment of Anti Dumping Duty. However, the finalization of bill of entry does not show any reference of payment of Anti Dumping Duty nor there is any order showing reassessment of Bills of Entry with regard to payment of ADD. From the perusal of the bill of entry which is a final assessment order there is no mention of Anti Dumping Duty for the obvious reason that the Anti Dumping Duty was not leviable at the relevant time. The department emphasized that the appellant should have challenged the final assessment order of the bills of entry in order to claim refund of Anti Dumping Duty. It is very surprising that when the finally assessed bills of entry do not bear any reference to the assessment/reassessment order in respect of payment of Anti Dumping Duty there is no purpose of challenging the bills of entry which was assessed finally. As regard the payment of Anti Dumping Duty by the appellant it is nothing but only a deposit without having part of the final assessment of bills of entry. As per the Hon ble Supreme Court judgment in the case of ITC Ltd [ 2019 (9) TMI 802 - SUPREME COURT ] importer can file a refund claim only if the duty which was assessed under final assessment of bills of entry is challenged by way of filing appeal. However, in the present case since the Anti Dumping Duty is not part and partial of final assessment of bills of entry there is no question of challenging the assessment of bills of entry for claiming the refund of Anti Dumping Duty. Since the Anti Dumping Duty was separately paid without having included in the final assessement of bill of entry, the appellant is entitled for refund without any challenge to the assessment order which was otherwise not required. In the present case it is undisputed fact by the revenue also that the ADD paid by the appellant was not at all leviable at the relevant time. Therefore, duty which was not leviable and there is no is on that there can not be assessment/ reassessment of such not leviable duty. This fact also strengthen the case of the appellant. In absence of any final assessment order in respect of payment of Anti Dumping Duty and particularly in the fact that the Anti Dumping Duty was not leviable at the relevant time - appellant is legally entitled for the refund claim - Impugned order set aside - appeal allowed.
-
2023 (11) TMI 383
Validity of Notification dated 29th January, 2020 - revocation of benefit under the Merchandise Exports from India Scheme [MEIS] in respect of Flexible Intermediate Bulk Container [FIBC] bags, with effect from 07th March, 2019, retrospectively. The Petitioner seeks directions against the Respondents to ensure that the impugned notification is applied prospectively. HELD THAT:- While the MEIS was in operation from 1st April 2015 to 31st December 2020, its retrospective discontinuation for the FIBC sector has become a point of contention and distress for the Petitioner and it s member units. Upon learning about the prospective withdrawal of the MEIS benefit, the Petitioner promptly voiced concerns to the relevant authorities. Despite this, the DGFT portal ceased accepting MEIS benefit applications as of 01st August 2019. Despite subsequent representations, the contested notification was issued on 29th January 2020, retracting the MEIS benefits for the FIBC sector from 07th March 2019. Although the initial grievances highlighted in the petition spanned a broader spectrum, during the hearing, the Petitioner narrowed their challenge to two specific reliefs: (i) The controversial notification should have a prospective, not retrospective, effect and (ii) immediate approval of the claims made by the Petitioner s member units under the MEIS scheme for the disputed period. Given these revisions, our analysis is confined to addressing these specific contentions and reliefs. Retrospective Effect of Impugned Notification - HELD THAT:- The Kanak Exports ruling [ 2015 (11) TMI 80 - SUPREME COURT] , though anchored in the context of an earlier iteration of Section 5 of the FTDR Act, 1992, still holds relevance. A close examination reveals that the 2010 Amendment has not altered the statute's stance on retrospective provisions. Furthermore, the Respondents have not indicated any provision that would counter this interpretation - Further, disentangling the Respondents case law references, the decisions in S.B. International [[ 1996 (1) TMI 125 - SUPREME COURT] , P.T.R Exports [ 1996 (5) TMI 413 - SUPREME COURT] , and the Karnataka High Court s verdict in Rajesh Exports [ [ 2005 (9) TMI 695 - KARNATAKA HIGH COURT] , alluded to by the DGFT, to highlight the Government's policy discretion in the public interest, do not align with the present case. This is primarily because in those case there was no retrospective amendment to policy or such a finding by the Court although urged, as opposed to the clear retrospective withdrawal of a benefit herein. Guided by the precedents previously discussed, we conclude that the retrospective withdrawal of the MEIS benefits through the impugned notification does not stand. DGFT s decision to repeal the scheme with a retrospective effect, combined with their refusal to honor claims for the valid period, is arbitrary and indefensible, both in principle and law. Respondents Assertions of Prior Publicity and RoSCTL Scheme - HELD THAT:- The MEIS, falling under Chapter-3 Exports from India Schemes of the FTP 2015-20, serves as an incentive, while the RoSCTL merely rebates state and central embedded taxes and levies. They operate under separate governance: DGFT for MEIS and the Ministry of Textile for RoSCTL, emphasizing their distinct purposes and mechanisms. Therefore, equating the two schemes is erroneous. RoSCTL, in its very nature, cannot compensate for claims associated with exports executed or committed before the release of the impugned notification, for which the Petitioner was rightfully eligible. The claims under each scheme are distinct, separate, and cannot be juxtaposed or adjusted against one another. Notably, given that the entire MEIS scheme faced scrutiny at the WTO - singling out FIBCs from export incentives retrospectively, while retaining benefits for other products, especially those under Chapters 61 to 63, exhibits arbitrariness and discrimination. In our considered opinion, no valid justification has been brought forth, for such selective retrospective withdrawal of benefits. Such an action arguably violates Article 14 of the Constitution of India. Therefore, selectively withdrawing the scheme with retrospective effect for specific categories not only appears arbitrary but also compounds the deprivation felt by the FIBC sector, which was already excluded from the RoSCTL benefit. Blocking of DGFT s Portal for Submission of Claims - HELD THAT:- For exports having already been carried out for the period from 07th March, 2019 till the date of the impugned notification was notified exporters would have already factored in and priced exports in line with MEIS benefits. Now, given that it is held that impugned notification could not have been given effect retrospectively, it follows that the benefit should be disbursed to all bona fide applicants, who have applied in terms of the orders of this Court subject to fulfilment of other applicable conditions. The Petitioner has restricted the reliefs to seeking the prospective application of the impugned notification and the processing of claims submitted for MEIS benefits. Considering the same, the following directions are issued: (i) The impugned notification dated 29th January, 2020, insofar as it withdraws the MEIS benefit on FIBC bags classified under HS-ITC 6305 3200, shall apply prospectively. (ii) Respondents shall forthwith process the applications for the MEIS benefit on FIBC bags classified under HS-ITC 63053200, submitted in terms of the interim order of this Court dated 22nd February, 2022 in respect of the exports made during the period from 07th March, 2019 till the date of the issuance of the impugned notification.
-
2023 (11) TMI 382
Refund of SAD - time limitation - relevant time - rejection on the ground of limitation i.e beyond 1 year from the date of payment of customs duty - whether the 1 year limitation should apply for granting the refund of 4 % SAD from the date of payment of customs duty or from the date of sale of goods and payment of VAT? HELD THAT:- In order to grant the refund of 4 % SAD an assessee is required to submit the sales invoices and proof of payment of VAT/ Sales Tax. In this position, if the goods is not sold then the assessee cannot filed a refund claim, and even, if it is filed as a precautionary measure the department will not entertain such refund claim, for the reason that there will be neither sale invoice nor payment of VAT. Considering this position the Delhi High Court in the case of SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS [ 2014 (4) TMI 870 - DELHI HIGH COURT] , held that the period of limitation of 1 year from the date of payment of duty shall not apply, whereas 1 year shall apply from the date of sale of the goods. The appellant s refund claim is not time barred as the same was filed while within 1 year from the date of sale of the goods. The impugned order set aside - appeal allowed.
-
2023 (11) TMI 381
Condonation of delay in filing the Cross Objections - rejection on the ground that the application not filed in the manner prescribed by the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 - HELD THAT:- It is seen from a perusal of section 129A(4) of the Customs Act, that it is only on receipt of notice that the party against whom the appeal has been preferred, may file within 45 days of the receipt of the notice, a Memorandum of Cross Objections - In the present case, the notice dated 26.02.2020 was sent to the respondent by the Registry of the Tribunal by registered post with acknowledgment due on 03.03.2020. The office has also reported that the said letter dated 28.02.2020 with copy of appeal was also served in the office of the Chief Commissioner (Authorised Representative) on 03.03.2020. Section 153(1) of the Customs Act provides that a notice may be served by giving or tendering it directly or on the authorised representative of the addressee, or by sending it by registered post with acknowledgment due to the person to whom it is issued. When such a notice is tendered, it shall be deemed to have been served on the date on which it is tendered and when such a notice is sent by registered post with acknowledgement due, it shall be deemed to have been received by the addressee at the expiry of the period normally taken by such post in transit unless the contrary is proved - In the present case, the copy of the appeal was tendered in the office of the Chief Commissioner (Authorised Representatives) on 03.03.2020 and the letter addressed to the respondent sent by the Registry of the Tribunal by Registered Post with acknowledgement due was despatched on 03.03.2020. All that has been stated in the application filed to condone the delay is that the copy of the appeal was not available in the file of the department and the appeal was received only on receipt of the letter dated 21.07.2022 sent by the Additional Commissioner (Authorised Representative). The department has, therefore, failed to furnish any satisfactory explanation for condoning the enormous delay in filing the Cross Objections - The Delay Condonation Application, therefore, deserves to be rejected and is rejected.
-
2023 (11) TMI 380
Condonation of delay in filing the Cross Objections - rejection on the ground that the application not filed in the manner prescribed by the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 - HELD THAT:- It is seen from a perusal of section 129A(4) of the Customs Act, that it is only on receipt of notice that the party against whom the appeal has been preferred, may file within 45 days of the receipt of the notice, a Memorandum of Cross Objections - In the present case, the notice dated 24.01.2020 was sent to the respondent by the Registry of the Tribunal by registered post with acknowledgment due on 30.01.2020. The office has also reported that the said letter dated 24.01.2020 with copy of appeal was also served in the office of the Chief Commissioner (Authorised Representative) on 28.01.2020. Section 153(1) of the Customs Act provides that a notice may be served by giving or tendering it directly or on the authorised representative of the addressee, or by sending it by registered post with acknowledgment due to the person to whom it is issued. When such a notice is tendered, it shall be deemed to have been served on the date on which it is tendered and when such a notice is sent by registered post with acknowledgement due, it shall be deemed to have been received by the addressee at the expiry of the period normally taken by such post in transit unless the contrary is proved - In the present case, the copy of the appeal was tendered in the office of the Chief Commissioner (Authorised Representatives) on 28.01.2020 and the letter addressed to the respondent sent by the Registry of the Tribunal by Registered Post with acknowledgement due was despatched on 30.01.2020. All that has been stated in the application filed to condone the delay is that the copy of the appeal was not available in the file of the department and the appeal was received only on receipt of the letter dated 21.07.2022 sent by the Additional Commissioner (Authorised Representative). The department has, therefore, failed to furnish any satisfactory explanation for condoning the enormous delay in filing the Cross Objections - The Delay Condonation Application, therefore, deserves to be rejected and is rejected.
-
2023 (11) TMI 379
Valuation of imported goods - inclusion of demurrage charge in the assessable value of the immovable goods - HELD THAT:- The issue has been decided by the Hon ble Orissa High Court in the case of TATA Steel Ltd. [ 2019 (10) TMI 226 - ORISSA HIGH COURT] wherein the Hon ble court held that it was beyond the legislative power to include it in the Rules is accepted and thus the explanation to sub-rule-(2) of Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 is held to be bad and hence declared ultra vires the Constitution/provision of Section 14 of the Customs Act, 1962, and hence the same is struck down. Thus, the demurrage charges is not includable in the custom valuation of imported goods for the purpose of charging custom duty - the impugned order is set aside - appeal allowed.
-
2023 (11) TMI 378
Revocation of Customs Broker license - forfeiture of security deposit - levy of penalty - Import of hearing aids' by over valuation of imported goods for the purpose of money laundering - violation of Regulations 10(d), 10(e) and 10(n) of CBLR, 2018. Violation of Regulation 10(d) ibid - HELD THAT:- The appellants have duly filed the bill of entry as per the documents given by the importer and they were not aware of the mis-declaration of value of the goods. As there is no specific brand name of the imported goods, nothing was mentioned and it could not be said that unbranded needs to be mentioned. In the instant case the mis-declaration was found by the department after physical examination and market inquiry of the goods, and hence the appellants CB cannot be found fault that he did not advise his client to comply with the provisions of the Act - mis-declaration was not known to the appellants CB, and when they had specifically sought for examination of the goods under First Check basis, the non-compliance by the importer of declaring the correct value of the goods, could not have been brought to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs by the appellants, as the Appraising group itself got a reasonable belief of incorrect value only after examination of goods and perusal of samples - the violation of Regulation 10(d) ibid, as concluded in the impugned order is not sustainable. Violation of provision of Regulation 10(e) ibid - HELD THAT:- The appellants CB has declared the value of imported goods as given in the commercial invoice, which is the transaction value. Further, submitting the declaration form (GATT valuation declaration) in terms of Rule 11, is primarily the responsibility of the importer and in case of proper authorization being given by them, then by the agent of that importer. In the present case, it is not in dispute that there was any such mis-declaration in the declaration form or in the value particulars declared in the bill of entry as compared to the commercial invoice - There are no evidence or fact indicating that there was a mis-declaration of value and the value was re-determined as per the above legal provisions. There is only a mention that the market inquiry was conducted by the department and it revealed that the actual value of the consignment is Rs.15,000/- as against declared value of Rs.59,79,521/- - such an allegation at the show cause notice stage and later at the findings stage in the impugned order requires factual details or evidence to state that there was mis-declaration and the same is attributable to the appellants CB, in order to invoke the violation of due-diligence having not been undertaken by the appellants - there exists no such evidence and on the contrary the declaration made in the bill of entry corresponds to the value declared in the commercial invoice. Thus, the conclusion arrived by the Principal Commissioner of Customs (General) in the impugned order that the appellants have violated Regulation 10(e) ibid is not sustainable. Violation of Regulation 10(n) of CBLR, 2018 - HELD THAT:- In the present case, the appellants CB had obtained the KYC documents and submitted the same to the Customs Department. Thus, there are no legal basis for upholding of the alleged violation of CBLR, 2018 by the appellants in the impugned order. There is definitely delay in adjudication and that for the import transaction in 30.01.2018, the order of revocation of appellant s CB license has been passed on 12.02.2021. Revenue is unable to explain why there was such a long delay in taking action against appellants, when the information about over valuation of import through SIIB investigation was received vide letter dated 22.02.2019. There are no reasons recorded in detail justifying the delay in passing the impugned order by the learned Principal Commissioner. It appears that the reasons having been not quoted and if such reasons exist, the same being not specified and not explained for undue delay cannot be accepted as reasonable grounds in terms of the test laid down by the Hon ble High Court of Bombay. There is no basis for sustaining the impugned order of the learned Principal Commissioner - Appeal allowed.
-
Insolvency & Bankruptcy
-
2023 (11) TMI 377
Maintainability of application 9 application - failure in remitting the funds - Corporate Debtor showed his readiness and willingness to make the entire payment. Operational Creditor submits that the debt of the Operational Creditor having been acknowledged by the Corporate Debtor, which is due and has not been paid by the Corporate Debtor inspite of repeated assurances, the Adjudicating Authority committed error in not admitting Section 9 Application. HELD THAT:- The present is not a case where Adjudicating Authority has directed the Corporate Debtor to settle the dispute with the Operational Creditor. It was the Corporate Debtor, who acknowledged and showed his readiness and willingness to make the entire payment. The judgment of the Hon ble Supreme Court in E.S. Krishnamurthy [ 2021 (12) TMI 683 - SUPREME COURT ] does not help the Appellant-Corporate Debtor in any manner. The next judgment of this Tribunal relied by learned Counsel for the Corporate Debtor is judgment of this Tribunal in Praveen Kumar Mundra vs. CIL Securities Ltd. [ 2019 (8) TMI 783 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ], where the Appeal preferred against the order, rejecting Section 9 Application was heard. The Appellate Tribunal in the above case in paragraph 9 has upheld the order of the Adjudicating Authority on the ground that the Appellant has initiated CIRP with fraudulently and malicious intent, which judgment has no application in the present case. Present is a fit case to admit when inspite of several promises and acknowledgement, the Corporate Debtor failed to pay the outstanding debt. The Corporate Debtor also has not complied with the order of the Adjudicating Authority directing for depositing the amount equivalent to Indian Rupee in the Court, instead it cited certain regulatory procedure in obtaining the permission for remitting the amount, which order was also not complied by the Corporate Debtor - the Adjudicating Authority ought to have admitted Section 9 Application. Appeal disposed off.
-
2023 (11) TMI 376
Direction to Respondent to handover the asset of the Corporate Debtor, which is under the possession of Respondent since last 2 years - direction to respondent to deposit the usage charges for the above mentioned asset in the account of Corporate Debtor - HELD THAT:- The resolution plan of the Corporate Debtor has been approved on 09.08.2021 by CoC and 14.03.2022 by the NCLT. The appellant could filed its claim after the approval of plan with the Committee of Creditors, hence, the same has not been considered. The present appeal is concerned with the two directions issued in paragraph (v) as quoted above. In so far as the first direction the machine has already been handed over to the Corporate Debtor, hence, that order has been complied with - In so far as the direction to pay usage charges it is clear that there has been no rental agreement between the parties for any usage charges and machine was given to the operational creditor by the director of the Corporate Debtor in lieu of the certain dues which Corporate Debtor owe to the appellant which is reflected in letter dated 08.06.2021. The appellant could not filed its claim in the corporate insolvency resolution process of the Corporate Debtor, hence, his dues do not find any reflection - the second direction issued by Adjudicating Authority for payment of Rs. 48 lakhs is unsustainable and is set aside. Appeal allowed in part.
-
2023 (11) TMI 375
Recovery of dues - first charge on the assets of the Corporate Debtor - Seeking direction to the Resolution Professional (RP) to take into account the priority of distribution of the Plan realizations and taking into account the priority assigned to the dissenting Financial Creditor, who are also secured creditors - HELD THAT:- This Tribunal after taking into consideration the judgment in India Resurgence Arc Private Limited Vs. M/s. Amit Metaliks Limited Anr. [ 2021 (6) TMI 684 - SUPREME COURT ], upheld the judgment of the Adjudicating Authority, who rejected the IA, which was filed by SIDBI for distribution as per security interest. In the case of Vistra [ 2023 (5) TMI 303 - SUPREME COURT ], the claim of Financial Creditor was not admitted. Whereas in the present case the debt of the Appellant was admitted. In Vistra, the claim of Vistara to be secured creditor was rejected as has been noticed in paragraphs 2 to 10 of the judgment itself. Whereas, the Appellant in the present case has been recognized as a dissenting Financial Creditor and was part of the CoC and in the present case, the CoC by its decision has approved both the distribution mechanism as well as the Resolution Plan, which proposed distribution based on proportion of admitted claim. Vistra was never treated as secured creditor or given its minimum entitlement as secured creditor as per Section 53(1). The judgment of Vistra is a judgment of the Hon ble Supreme Court, which is referable to Article 142 of the Constitution, which jurisdiction was exercised and ultimately the Hon ble Supreme Court has held Vistra to be a secured creditor. The present is a case where ICICI Bank was accepted and recognized as Financial Creditor and its full claim was accepted and distribution to the Appellant was as per Section 30, sub-section (2)(b) of the IBC. Thus, no error has been committed by the Adjudicating Authority in rejecting the application - appeal dismissed.
-
PMLA
-
2023 (11) TMI 374
Seeking release of petitioner (writ of habeas corpus) - passing of mechanical remand orders without application of mind - HELD THAT:- In Ram Narayan Singh [ 1953 (3) TMI 38 - SUPREME COURT] , the Apex Court has observed that a writ of habeas corpus is with respect to legality of detention at the time of return of rule and not to the date of institution and that if on the date of return i.e. the return of the rule, the detention is not illegal and is duly authorised by a Competent Magistrate by remand orders then the writ of habeas corpus will not lie. In Kanu Sanyal [ 1974 (2) TMI 85 - SUPREME COURT] , the grounds raised by the petitioner therein were (i) that he was not informed of the grounds of arrest and (ii) the Magistrate had no jurisdiction to try the case, and hence, the remand could not be granted. The Apex Court held that the earliest date with reference to which the legality of the detention can be challenged is the date of filing of the writ and not any other date; that on the date of filing of habeas corpus, the detention of the petitioner was in district jail and therefore, the legality of his earlier detention cannot be considered; and that a writ of habeas corpus cannot be granted when the person is jailed and is in judicial custody. In the present case, it cannot be said that the remand orders are absolutely mechanical or suffer from the vice of lack of jurisdiction, warranting our interference in this writ petition, which seeks a writ of habeas corpus. The petitioner was arrested on 1st September 2023 and was served with the grounds of arrest on 1st September 2023. The petitioner has acknowledged receipt of the same. The law that held the field till Pankaj Bansal [ 2023 (10) TMI 175 - SUPREME COURT] , with respect to serving the grounds of arrest was Chaggan Bhujbal [ 2016 (12) TMI 1014 - BOMBAY HIGH COURT] - the Apex Court vide judgment dated 3rd October 2023 in Pankaj Bansal, has used the words `henceforth and has held that the decision of the Bombay High Court in Chaggan Bhujbal and Delhi High Court in Moin Qureshi [ 2017 (12) TMI 289 - DELHI HIGH COURT] does not lay down the correct law. Thus, in the facts, having regard to the same, there is no merit in the petitioner s submission, that he ought to have been furnished with a physical copy of the grounds of arrest. The petitioner was not orally read out the grounds of arrest but was served a copy of the grounds of arrest which he acknowledged by signing thereon. The petition seeking writ of habeas corpus, in the facts, cannot be entertained and as such, the petition is dismissed - it is always open for the petitioner to avail of other statutory remedies, as permissible in law to him, vis-a-vis other prayers raised in this petition. Petition dismissed.
-
Service Tax
-
2023 (11) TMI 373
Non-discharge of service tax - Architect Service - sale of space for advertisements services - HELD THAT:- There is no denying of fact that the certain amounts have been received by the appellant for providing services to various service recipients. One of the service recipients M/s. Saumya Construction Pvt. Ltd. has informed the department. They have made payment for architect and interior decorative service to the appellants - the appellant has been claiming that service provided by them to M/s. Saumya Construction Pvt. Ltd. falls under designing services. However, there are nothing on record to suggest that the service provided by the appellant pertains to designing service charges only. It is found from the beginning, the appellants have been claiming that the amount which have been received by them from M/s. Saumya Construction Pvt. Ltd. And others service recipient is on account of designing of the logo and models. While the show cause notice, on the basis of information received from the service recipient specially from M/s. Saumya Construction Pvt. Ltd., has claimed that the appellants have been providing the service of Architect and Interior Decorator Service . At the same time the learned Commissioner (Appeals) has confirmed the demand of Service Tax only under the category of Architect service - the department has not verified all the facts before issuing show cause notice in this case - the information received by the department should have been presented to the appellant before reaching it any conclusion regarding exact nature of service being provided by the appellant. Matter remanded to the original adjudicating authority for deciding the matter a fresh - appeal allowed by way of remand.
-
2023 (11) TMI 372
Classification of services - Manpower Recruitment or Supply Agency Service or not - contract for performance of specific task such as transportation, management, operation and maintenance of calcinations plant - HELD THAT:- It can be seen from the work order and the terms, on the basis of which the appellant have rendered the services to M/s. GMDC. The activity covers crushing, screening, calcinations plant operation and proper stacking of calcined bauxite etc. The appellant was required to manufacture/ produce certain quantities of calcinated bauxite as mentioned in the work order - The perusal of the work order and the definitions, it is apparent that for Manpower Recruitment or Supply Agency Service is to supply of manpower temporarily or otherwise to another person, it is necessary that the service provider will only recruit and supply the manpower to the service recipient and the person so providers will be working under the superintendence and control of the service recipient. Thus it is to emphasize that for the activity to be included in the Manpower Recruitment or Supply Agency Service then the control over the manpower should be with the recipient of the service. The service rendered by the appellant to M/s. GMDC does not fall under the category of Manpower Recruitment and Supply Agency Service - there are no merit in the order in original in this regard. Demand of service tax under Business Auxiliary Service - HELD THAT:- The facts of the matter are that the appellant have been undertaking work of calcination of raw bauxite into calcined bauxite at their own factory premises. The M/s. Saurashtra Calcined Bauxite and Allied Industries Ltd. (SCABAL) will bring raw bauxite to the appellant's factory premises and the appellant using this in their factory/plant with his own manpower, converted the raw bauxite into calcined bauxite. For the said process of calcination of bauxite, the appellant was paid by M/s. SCABAL at a fixed section per Metric Ton basis - conversion of raw bauxite into calcinated bauxite resulted into emergence of a new substance classifiable under a separate tariff heading and therefore, such activity amounts to manufacturing activity. Since the activity amenity to manufacturing beyond the scope of levy of service tax. Further, as stated in the preceding paras that service recipient has been discharging central excise duty liability on the calcinated bauxite received from the service provider i.e. the appellant, therefore, service provided by the appellant does not fall under the provisions of Business Auxiliary Service. The service provided by the appellant does not fall under the category of Business Auxiliary Service - there are no merit on this count also for demanding service tax - appeal allowed.
-
2023 (11) TMI 371
Levy of penalty under sections 76 and 77 of the Finance Act - invocation of Section 80 of the Finance Act - service charges amounting to Rs. 3,66,93,393/- out of the total Rs. 4,30,08,843/- were actually released or not - HELD THAT:- Section 80 of the Finance Act, as was in force at the relevant time, provides that notwithstanding anything contained in the provisions of section 76 or section 77, no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure. When in the earlier two matters, section 80 of the Finance Act had been invoked and penalties under sections 76 and 77 of the Finance Act were dropped, there is no good reason as to why the provisions of section 80 were not invoked by the Commissioner (Appeals) in the present case to drop the penalties under sections 76 and 77 of the Finance Act. This apart, a perusal of the order passed by the Tribunal on 06.02.2018 also shows that the bona fides of the appellant were not in doubt and, therefore, the extended period of limitation was not invoked. In this view of the matter, the imposition of penalties under sections 76 and 77 of the Finance Act cannot be sustained. As this issue has not been decided by the Commissioner (Appeals), it will not be appropriate for the Tribunal to record a finding in the first stance. The matter would have to be remitted to the Commissioner (Appeals) to decide this issue in accordance with law. While confirming the demand of service tax, the penalty imposed upon the appellant under sections 76 and 77 of the Finance Act are set aside and the matter is remitted to the Commissioner (Appeals) only for the limited purpose of deciding whether the appellant was justified in paying service tax on Rs. 3,66,93,393/- - Appeal allowed.
-
Central Excise
-
2023 (11) TMI 370
Valuation - inclusion of after sale service charges, reimbursed by the appellants to their dealers, in the assessable value - providing free service to the customers during the warranty period and the expenses are reimbursed by the appellants to the dealers - HELD THAT:- Though, the appellants and the Adjudicating Authority have considered the reimbursed expenses as the demand on the includability of post-delivery inspection charges and after sale service charges, no clarity as to what the reimbursed expenses constitute is given in the show-cause notice. The Show Cause Notice makes a bland and general averment, in Para 2 of the show-cause notice, that it is a well-known fact in case of motor vehicles manufacturers that After Sales service and pre-delivery inspection (PDI) are services provided free by the dealer on behalf of the assessee, the cost towards this is included in the dealer s margin (or reimbursed to him). It is also not made clear, in the show-cause notice, as to whether the amounts reimbursed, by the appellants to their dealers, were towards PDI and ASS. Moreover, the show-cause notice seeks to demand duty on the expenses, understandably incurred by the appellants, reimbursed to the dealers. It is beyond imagination as to how these amounts constitute flow of additional consideration unless it is evidenced either that the appellants are allowing the dealers to collect the margin payable, by the appellant to the dealers, from ultimate customers or that the additional amounts charged by the dealers from ultimate customers is actually flowing back to the appellants. Only under these two conditions the said expenses can be held includable in the assessable value even under the old or amended definition of Section 4 of CEA, 1944 - there is no provision either under Section 4 of the CEA, 1944 or under the Valuation Rules thereof to include an amount which flows out from the manufacturer to their customers. It is not the case of the Department that the appellants, instead of reimbursing the expenses on account of PDI and ASS, allowed the dealers to recover the same from the customers or that the appellants have received some amounts as extra consideration under these Heads. It is not forthcoming from the show-cause notice or from the records of the case that the amount recovered by the dealers over and above the listed price sanctioned by the appellants is towards the amount reimbursable by the appellants to the dealers. It is also not established that the amount extra collected is towards the PDI and ASS. There is no evidence to prove that the amount charged extra by the dealers is flowing back towards the appellant - the impugned order as well as the arguments of the learned Authorized Representative and to some extent, argument of the Counsel also is beyond the scope of the show-cause notice. No case is made for the inclusion of after sale expenses reimbursed to the dealers by the Noticee except for a bland averment in Para 2 of the show-cause notice that it is a well-known fact in case of motor vehicles manufacturers that After Sales service and pre-delivery inspection (PDI) are services provided free by the dealer on behalf of the assessee, the cost towards this is included in the dealer s margin (or reimbursed to him). Thus, it is not made clear in the show-cause notice as to whether these expenses reimbursed by the appellants were towards PDI and ASS - the impugned order cannot be sustained - appeal allowed.
-
2023 (11) TMI 369
Recovery/reversal of credit - Export of Goods - Credit was availed under Rule 16 on returned Goods - credit not reversed by the appellants when the chassis were exported and cleared under N/N. 108/1995-C.E. along with interest and for imposing penalties. The main allegation raised by the Department is that as the credit is availed by the appellants under Rule 16 of the Central Excise Rules, 2002, they cannot remove the goods for export or clear the same under exemption Notification No. 108/1995-C.E. without reversing the credit. HELD THAT:- Rule 16 makes it amply clear that the credit is availed in terms of the CENVAT Credit Rules, 2004. There is no embargo envisaged under Rule 16 for export of the goods or for clearance under the exemption Notification. The view taken by the authorities below is that reversal of the credit availed under Rule 16 is a pre-condition for removal of the said goods and therefore, the appellant has to reverse the credit. It is also alleged that when the goods were not originally meant for export, it cannot be later exported when the goods are brought back to the factory under Rule 16 - the said view of the Commissioner (Appeals) cannot be endorsed upon. The demand cannot sustain. The impugned order is therefore set aside - Appeal allowed.
-
2023 (11) TMI 368
CENVAT Credit - capital goods - under erstwhile Rule 57Q/57AA of Central Excise Rules, 1944 - period March and April 2001 - HELD THAT:- There is no dispute of the fact that the capital goods have been received in the premises of the appellants during the period 1997 to 2000 and installed. Their final products are dutiable all along. They had availed 50% of the total credit in March 2001 i.e. Financial year 2000-01 and balance 50% in April 2001 i.e Financial year 2001-02 as per the procedure prescribed under the relevant Rule of Central Excise Rules,1944. Out of the total credit disallowed an amount of Rs.61,85,230/- at Sl. No. 10 items used in construction of the storage tanks , specifically covered under the aforesaid definition of capital goods. Also, the issue of admissibility of Cenvat credit on the items used in fabrication has been settled in favour of the assessee by Karnataka High Court in SLR Steel Ltd. s case [ 2012 (9) TMI 169 - KARNATAKA HIGH COURT] . The said judgment has been followed by this Tribunal in the Appellant s own case vide Final Order No. 20701/2023 dated 06.07.2023 [ 2023 (8) TMI 696 - CESTAT BANGALORE] . The scope of the definition of capital goods under erstwhile Rule 57Q has been examined by the Hon ble Supreme Court in Rajasthan Spinning Weaving Mills Ltd s case [ 2010 (7) TMI 12 - SUPREME COURT] . The issue involved in the said case was regarding admissibility of Modvat credit in respect of steel plates and MS channels used in the fabrication of chimney installed in the factory premises. It was argued by the Revenue that steel plates and MS channels classifiable under Chapter 7208.11 and 7216.10 of CETA,1985 cannot be considered as capital goods, hence, credit is inadmissible on the said items - The Hon ble Supreme Court analysing Rule 57Q and following the user test laid down in Jawahar Mills s case [ 2001 (7) TMI 118 - SUPREME COURT] , held that MS channels, steel plates and angles used in fabrication of chimney would fall within the definition of capital goods. Also, a major amount of Cenvat Credit denied to the appellants are on fire extinguisher and inputs/parts mentioned at Sl. Nos. 2, 3, 4, 51, 52, and 66 amounting to Rs.4,20,109/- - the Fire extinguishers and its parts are classified under Chapter 84 of CETA,1985 and hence fall under the scope of the definition of capital goods as defined under amended Rule 57AA of the Central Excise Rules, 1944. The consumables used in the fire extinguishers are also admissible to credit as inputs. Further, this Tribunal in the case of Mylan Laboratories Ltd vs. CCE [ 2017 (6) TMI 669 - CESTAT HYDERABAD] held that Cenvat Credit on fire extinguishers and parts thereof are admissible. All the items, which have been disallowed as discussed are admissible to Cenvat credit. Accordingly, the impugned orders are modified to the extent of setting aside the orders disallowing Cenvat credit of Rs. 80,02,643/- in each of the appeals - Appeal disposed off.
-
2023 (11) TMI 367
Valuation of Excise Duty - adoption of maximum of the different retail selling price (RSP) for chargeability to duty under Central Excise Act, 1944 - HELD THAT:- The entire proceedings has been premised on a clear lack of appreciation of objectives of Standards of Weights and Measures Act, 1976, or its successor Legal Metrology Act, 2009, and its relationship with Central Excise Act, 1944. Mandating the affixing of retail selling price (RSP) , on goods specified under these statutes was intended to protect customers from being overcharged at the retail stage on pain of penalties and detriments prescribed. Neither that law nor Central Excise Act, 1944 affords a mandate to customs officials, at the time of clearance of import, or central excise officials, at the time of clearance from factory, to determine the price at which the goods are sold - exclusively a decision of the manufacturer/importer. The goods imported by the appellant are repacked after clearance from customs control and such activity being manufacture erases the import that had taken place earlier to be superimposed with production of excisable goods in the hands of the manufacturer and subject to valuation under section 4A of Central Excise Act, 1944 for assessment to duties of central excise. The affixing of retail selling price (RSP) thereupon becomes the first, and final, declaration of price for assessment under Central Excise Act, 1944. There are, thus, no two prices and, therefore, the Explanation 2(a) below section 4A of Central Excise Act, 1944 would not come into play. In the case of the appellant for the earlier period, the issue has been decided by the Tribunal in their favour. Nothing remains in the demand confirmed in the impugned order which is set aside along with charging of interest and imposition of penalty to allow the appeal. Appeal allowed.
-
2023 (11) TMI 366
CENVAT Credit - ineligibility of certain goods procured by them that were claimed to conform to inputs in rule 2(k) of CENVAT Credit Rules, 2004 - claim of the appellant is that these goods were used in the setting up of lube oil upgradation plant , diesel hydro treatment plant and similar projects which are of capital nature and, therefore, entitled to availment under CENVAT Credit Rules, 2004, of credit of duties paid on procurement. HELD THAT:- It appears from the records that there has been a summary finding by the adjudicating authority on the deployment of the impugned materials. For determining eligibility for availment of credit, it is important to note in context that these projects are turn-key projects and that the utilization of such materials in the process of setting up such facilities on site would be intrinsic to the manufacture of capital goods. There was no evidence adduced to establish that these materials were used only for providing such structures for support of capital goods. It is also on record that the adjudicating authority was less than satisfied about the documents furnished in support of the claim of the appellants that these were used in the creation of capital goods on which appellant was not placed on the notice. In view of this deficiency in finding, it would be inappropriate to take a decision on the eligibility of each of the goods claimed to be so. It was for the adjudicating authority to examine the claim of the appellant in detail and, to the extent of inapplicability, give a clear finding on the actual usage owing to which it was not entitled - the impugned order is set aside - matter remanded back to the original authority for a fresh decision after affording an opportunity to the appellants herein to present their claim on factual as well as legal submissions. Appeal allowed by way of remand.
-
2023 (11) TMI 365
Recovery of CENVAT Credit - availment of credit on duty discharged by the supplier of copper to them which was dropped by the adjudicating authority - competent reviewing authority has concluded that the respondent was not eligible for availing CENVAT credit as the procurement of such goods on payment of duty is not in concord with scheme of advance licence in the Foreign Trade Policy (FTP) - HELD THAT:- The factum of payment of duty by the appellant on procurement of copper is not in dispute. In terms of rule 3 of CENVAT Credit Rules, 2004, with duty liability having been discharged and the procured goods conforming to definition of inputs in rule 2(k) of CENVAT Credit Rules, 2004, there is no ground for disallowance of the said credit. Furthermore, the goods cannot be said to be exempt inasmuch as the notification relied upon in the appeal of Revenue is a non-tariff notification which does not have the effect of section 5A of Central Excise Act, 1944 and is merely procedural and conditional - It is also settled law that it is not open to the central excise authorities having jurisdiction over the buyer to determine leviability to duty of a seller in another jurisdiction. The duty having been discharged by manufacturers of copper who had supplied inputs to the respondent, there is no ground for denial of eligibility for CENVAT credit. Furthermore, the primary contention in the appeal of Revenue is that on identical matter was pending resolution, in their appeal, before the Hon ble High Court of Bombay in COMMISSIONER VERSUS OLEOFINE ORGANICS (INDIA) PVT. LTD. [ 2015 (10) TMI 650 - BOMBAY HIGH COURT] - With the disposal of that appeal, discarding the challenge mounted by Revenue against the order of the Tribunal permitting availment of credit, the grounds of appeal itself ceases to exist. The appeal lacks merit and is, accordingly, dismissed.
-
2023 (11) TMI 364
Process amounting to manufacture - process of conversion of metal into Engine Components carried out by the appellant - exemption from payment of duty under the job work Notification No. 214/86-CE dated 25.3.1986 - availment of CENVAT credit on the basis of debit notes which are not the prescribed document under Rule 9 of the CCR, 2004 - revenue neutrality - extended period of limitation. Whether the process involved in the job work contract with M/s Rockman amounts to manufacture? - HELD THAT:- M/s Rockman in terms of the contract supplied the raw material, i. e., Aluminium Ingots to the appellant, who processed them by using specific moulds and dies supplied by M/s. Rockman, whereby the product Aluminium Die Casting Components were produced - It is a settled principle of law as interpreted in catena of decisions that the definition of the term manufacture is an inclusive definition and has to be given wider import, so any person who is engaged in any activity as specified in the clauses of section 2(f) would fall in the category of a manufacturer and would be liable to pay the excise duty unless exempted - it is opined that the activity carried out by the appellant who happens to be a job worker amounts to manufacture, more particularly when it says that the word 'manufacture' shall also include any person, who engages in their production or manufacture on his own account. From careful reading of Section 66 D(f) of the Finance Act, 1994, there is no ambiguity that the statute does not envisage levy of service tax on any process amounting to manufacture or production of goods - the payment of service tax by the appellant on the job charges collected on Die Casting of Components from Aluminium Metal was totally unwarranted and against the spirit of the law as quoted above. In fact, the appellant was required to pay central excise duty on the said activity which amounts to manufacture and was not required to pay service tax. The Notification No 214/86 has been the subject matter of interpretation in various decisions of the Tribunal as well as of the Supreme Court. The condition of submitting an undertaking by the principal manufacturer or the supplier of the raw material as provided in the notification has been held to be a substantive condition and not merely a procedural one for the reason that it shifts the burden of the tax liability from the job worker to the supplier of raw materials or semi-finished goods. It has also been held that the above procedure set out in the notification is a pre-requisite and it being the mandate of law that unless such an undertaking is given, the benefit of exemption notification shall not be attracted and the job worker only is liable to discharge the duty liability at the time of clearance of the said goods from the premises of the job worker - There is no dispute that the principal manufacturer had neither given any such undertaking nor paid the excise duty. Consequently, the appellant cannot escape the liability to pay the excise duty on the goods manufactured by them on job work basis. Levy of interest and the penalty - HELD THAT:- The appellant has deliberately indulged in evading the duty liability in as much as he has been paying the excise duty in respect of the supply of the same goods to other customers, which shows that the appellant is aware of the duty liability - The appellant cannot be allowed to pick and choose what is beneficial to him and discard the conditions specified. That the ingredients of willful suppression of facts so as to avoid the payment of central excise duty exists. The Authorities below are justified in imposing penalty under the provisions of Section 11 AC of the Act, relying on the decision of the Apex Court in the case of SEBI VERSUS SHRIRAM MUTUAL FUND [ 2006 (5) TMI 191 - SUPREME COURT ] that mens rea is not an essential element for imposing penalty - the Adjudicating Authority has rightly imposed the penalty equal to the duty amount - Similarly, interest under Section 11AA has also been rightly imposed as the appellant knowingly and deliberately evaded payment of excise duty. Whether the appellant is entitled to take cenvat credit on the strength of debit notes, which is not the document prescribed under Rule 9(1) of the CCR, 2004 to avail the cenvat credit? - HELD THAT:- The issue is no longer res-integra and has been decided by the High Court of Rajasthan in the case of COMMISSIONER OF CENTRAL EXCISE JAIPUR-1, JAIPUR VERSUS BHARTI HEXACOM LTD. [ 2018 (6) TMI 435 - RAJASTHAN HIGH COURT ]. The Division Bench decided the issue after considering the long line of decisions, where same issue was considered and decided infavour of the party and against the Revenue. The learned Counsel for the appellant had filed the supplementary paper book on 3rd June 2022, where at Serial No.4, he has annexed the copies of the debit notes along with the chart showing the details of the debit notes. On perusal of the debit notes, it is found that they contain all the particulars and details, as are required to be mentioned in the invoice to avail the cenvat credit. Consequently, the appellant is entitled to claim the cenvat credit and the Authorities below have erred in denying the same. Both the Adjudicating Authority as well as the Appellate Authority have rejected the claim for cenvat credit on the ground that the debit notes were not a proper document as prescribed under Rule 9 of CCR, 2004 for availing cenvat credit and, therefore, did not examine the particulars given therein in terms of Rule 4A of Service Tax Rules. Matter remanded to the Adjudicating Authority, however, in the facts of the present case, when the Department has not raised any objection to the debit notes in any respect, it would be a futile exercise. The documents, i.e., debit notes produced are self-explanatory as to the details, which are required under Rule 4A of the ST Rules and, therefore, unnecessarily dragging the party all the way again to the litigation is not justifiable, moreso when the departmental authorities had adopted a very callous attitude in not considering even the contents of the documents in the light of the decisions of the Tribunal. Hence the demand of Rs 6,75,737/- along with interest and penalty is not sustainable. Revenue Neutrality - HELD THAT:- Reference placed to a latest decision of this Tribunal in M/s Parvatiya Plywood Pvt. Ltd. Vs. Commissioner of Customs, Central Excise and Service Tax, Meerut-II [ 2022 (12) TMI 451 - CESTAT NEW DELHI ], where the explanation added in section 4(1) after clause (b) of the Act (w.e.f.) 14.05.2003 was considered to say that where excise duty have not been collected separately by the manufacturerseller, the price charged shall be treated as cum-duty, excluding the sales tax and other taxes, if any actually paid - matter remanded to the Adjudicating Authority to re-compute the duty liability in terms thereof and determine the actual duty liability of the appellant. Extended period of limitation - HELD THAT:- The period in dispute is from February 2015 to March 2016. Since the show Cause Notice has been issued on 28.4.2017, the delay as pointed out by the Department is of merely two months, i.e. February and March, which also, in the facts of the case, are covered by virtue of the extended period of limitation. The appellant is liable to pay the excise duty as determined along with interest and penalty. On the other issue, the appellant is entitled to claim the cenvat credit on the basis of debit notes and, therefore, the interest under section 11 AA of Central Excise Act and penalty under Rule 15 (3) CCR, 2004 read with section 11 AC of the Act are not leviable thereon - the matter is remanded to the Adjudicating Authority for the purpose of recomputation only. Appeal allowed in part.
-
2023 (11) TMI 363
Recovery of Central Excise Act with penalty - definition of transaction value in section 4(3)(d) of Central Excise Act, 1944 requires that any additional consideration would have to be added for the purpose of determination of duty liability or not - HELD THAT:- It is clear from the facts and circumstances of the proceedings that the scheme did not involve retention of any amount on the part of the assessee. On the other hand, it entailed premature payment restricted to the present value, net discounting term for measuring the time value of the money. In effect, what was foregone by the State Government was merely the cost incurred by the assessee for not awaiting the appropriate date of payment for discharge of tax liability. A similar dispute had came up before the Tribunal in Uttam Galva Steels Ltd [ 2015 (10) TMI 1727 - CESTAT MUMBAI] and it was held that When the goods are being cleared (i.e. time of removal) actual sales tax paid is nil but sales tax actually payable is the normal sales tax or what has been collected by the assessee from its customers. Among the terms actually paid or actually payable used in transaction value, actually paid is not relevant in the present set of appeals. What is relevant is actually payable. In view of the decisions of the Tribunal, relating to the peculiarity of the scheme which was prevailed insofar as the impugned order is concerned, the demand is set aside - appeal allowed.
-
Indian Laws
-
2023 (11) TMI 362
Dishonour of Cheque - insufficiency of funds - rebuttal of presumption - it is alleged that the learned trial Court has not considered the law and facts involved in the present case as the complainant could not plead and prove, in this case, that there was any subsisting liability at the time of issuance of cheque in question - quantum of sentence - HELD THAT:- The accused, in the present case, has denied that he has ever issued the cheque in question. However, the accused has neither adduced any evidence nor appeared in the witness box to depose as per the stand taken by him. The statement of accused recorded under Section 313 Cr.P.C does not fall within the definition of evidence as per Section 3 of the Evidence Act - In such situation, when the accused himself has not appeared in the witness box to depose about the stand as taken by him in the statement recorded under Section 313 Cr.P.C, then, the said stand has rightly been discarded by the learned trial Court. As such, there is no occasion for this Court to differ with the findings recorded by the learned trial Court while convicting the accused under Section 138 of the N.I. Act. Quantum of sentence - HELD THAT:- In the absence of any sentencing policy in our country, the sentencing part has been left to the discretion of the Court. The law is good, but justice is better. Considering the said fact, while deciding the quantum, it was incumbent upon the learned trial Court to consider the fact about the benefit which had drawn by the accused for committing the offence alleged against the complainant - The learned trial Court has awarded the compensation of Rs.3,50,000/- and the said order of quantum of sentence has not been assailed by the complainant before the learned Appellate Court or before this Court. Considering the peculiar facts and circumstances of the case that the accused has not only deposited the entire amount of compensation, but, also the compounding fee, the revision petition against the judgment of conviction is dismissed, however, the order of quantum of sentence is liable to be modified by reducing the substantive sentence from 12 months to the sentence of imprisonment till rising of Court - Revision disposed off.
-
2023 (11) TMI 361
Dishonour of Cheque - amicable settlement of matter - compounding of offence - HELD THAT:- In view of the fact that the complainant has received Rs.1,30,000/- from the applicant/convict, as full and final settlement of the complaint filed by the appellant-complainant under Section 138 of the NI Act and the parties have amicably settled the matter, coupled with the fact that the complainant has no objection in case the accused-respondent is acquitted of the offence under Section 138 of the Negotiable Instruments Act, therefore, this Court sees no impediment in accepting the prayer made on behalf of the parties for compounding of offence while exercising power under Section 147 of the Act as well as in terms of guidelines issued by the Hon ble Apex Court in DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [ 2010 (5) TMI 380 - SUPREME COURT ], wherein the Hon ble Apex Court has held that Section 147 of the Negotiable Instruments Act, 1881 is in the nature of an enabling provision which provides for the compounding of offences prescribed under the same Act, thereby serving as an exception to the general rule incorporated in sub-section (9) of Section 320 of the CrPC which states that No offence shall be compounded except as provided by this Section . In K. SUBRAMANIAN VERSUS R. RAJATHI REP. BY P.O.A.P. KALIAPPAN [ 2009 (11) TMI 1013 - SUPREME COURT ], it has been held by the Hon ble Apex Court that in view of the provisions contained in Section 147 of the Act read with Section 320 of Cr.P.C., compromise arrived at can be accepted even after recording of the judgment of conviction. Since, in the instant case, the petitioner-accused after being convicted under Section 138 of the Act, has paid Rs.1,30,000/-, as full and final settlement amount to the appellant-complainant, prayer for compounding the offence can be accepted in terms of the aforesaid judgments passed by the Hon ble Apex Court. The present matter is ordered to be compounded and the judgment is quashed and set-aside and the petitioner accused is acquitted of the charge framed against him under Section 138 of the Act - taking into consideration the law laid down by the Hon ble Apex Court (supra) and the financial condition of the petitioner, as he is a poor person, since the competent Courts can reduce the compounding fee with regard to the specific facts and circumstances of the case, the petitioner is directed to deposit token compounding fee of Rs.2,500/- (rupees two thousand five hundred) only with H.P. State Legal Services Authority, Shimla, H.P., within four weeks from today. Application disposed off.
-
2023 (11) TMI 360
Dishonour of Cheque - legally enforceable debt or not - acquittal of accused - non-joinder of drawer of the disputed cheque - fatal to the proceedings under Section 138 of the Negotiable Instruments Act or not - HELD THAT:- The issue whether the learned Magistrate committed any error in dismissing the complaint by holding that non-joinder of drawer of the disputed cheque i.e. Company is fatal to the proceedings under Section 138 of the Negotiable Instruments Act is no longer res integra - The similar had question arose for consideration before three Judges Bench of the Hon'ble Supreme Court in the case of Anita Handa [ 2012 (5) TMI 83 - SUPREME COURT ] as to whether the complaint under Section 138 of the Negotiable Instruments Act and Section 141 thereto against the Director or authorized signatory of the cheque without arraigning the company as accused, was maintainable? Initially, the matter was notified before two Judges Bench, which due to diversion of opinion, was referred to the three Judges bench. The Hon ble Supreme Court had upon analysis of relevant provisions of the Negotiable Instruments Act, held that Section 141 uses terms ``person and refers it to a company. The Company is treated as a juristic person in the eyes of law and the concept of corporate criminal liability is attracted to a corporation and company. The said provisions of the Act invariably held in offences by the Company, certain categories of officers in certain circumstances are deemed to be guilty of the offence under Section 138 of the Negotiable Instruments Act. In view of the aforesaid analysis drawn by the Hon ble Supreme Court, this Court is of the view that non-joinder of the Company as accused, which otherwise is treated as principal offender being drawer of the cheque, the Director of the Company joined as sole accused representing the company as well as authorised signatory, would not served the provisions of Section 141 of the Act. Thus, no arguable case is made out to grant this application seeking special leave to appeal. Appeal disposed off.
|
9911796707
