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TMI Tax Updates - e-Newsletter November 16, 2024 Case Laws in this Newsletter: Income Tax Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Articles Direct Engagement in Service Provision Should Not Be Confused with Intermediary Status HANDLING OF CARGO IN CUSTOMS AREA How Direct Tax and Indirect Tax Affect Businesses HC directs department to allow filing of appeal for part period which could not be filed due to technical issue on portal News CBIC Chairman inaugurates GST & Customs Pavilion with the theme “Facilitating Trade, Fostering Economy” at the 43rd India International Trade Fair in New Delhi Notifications Customs 81/2024 - dated 14-11-2024 - Cus (NT) Customs ports - Appointment for specified purposes - Amendment in Notification No. 62/1994-Customs (N.T.) dated the 21st November, 1994 80/2024 - dated 14-11-2024 - Cus (NT) Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver GST - States G.O.Ms.No. 266 - dated 7-11-2024 - Andhra Pradesh SGST The Andhra Pradesh Goods and Services Tax Act & Rules, 2017 - Amendments to G.O. is.No.256, Revenue (Commercial Taxes-II) Department, dated. 29.06.20 17 G.O.Ms.No. 265 - dated 7-11-2024 - Andhra Pradesh SGST The Andhra Pradesh Goods and Services Tax Act & Rules, 2017 - Amendments to G.O.Ms.No.588, Revenue (Commercial Taxes-II) Department, dated. 12.12.2017 G.O.Ms.No. 264 - dated 7-11-2024 - Andhra Pradesh SGST The Andhra Pradesh Goods and Services Tax Act & Rules, 2017 - Amendments to G.O. Ms. No.259, Revenue (Commercial Taxes-II) Department, dated. 29.06.2017 G.O.Ms.No. 263 - dated 7-11-2024 - Andhra Pradesh SGST The Andhra Pradesh Goods and Services Tax Act & Rules, 2017 - Amendments to G.O.is.No.255, Revenue (Commercial Taxes-II) Department, dated.29.06.2017 G.O.Ms.No. 262 - dated 7-11-2024 - Andhra Pradesh SGST The Andhra Pradesh Goods and Services Tax Act & Rules, 2017 - Amendments to G.O.Ms.No. 258, Revenue (Commercial Taxes-II) Department, dated 29.06.2017 G.O.Ms.No. 198 - dated 19-9-2024 - Andhra Pradesh SGST The Andhra Pradesh Goods and Services Tax Act & Rules — Amendments to G.O. As. No. 588, Revenue (Commercial Taxes II) Department, date 12.12.2017 G.O.Ms.No. 194 - dated 17-9-2024 - Andhra Pradesh SGST The Andhra Pradesh Goods and Services Tax Act & Rules, 2017 — Amendments to G.O. is. No.258, Revenue (Commercial Taxes-II) Department, dated 29.06.2017 G.O.Ms.No. 193 - dated 17-9-2024 - Andhra Pradesh SGST The Andhra Pradesh Goods and Services Tax Act & Rules, 2017 —Amendments to G.O.Ms. No. 582, Revenue (Commercial Taxes-II) Department, dated 12.12.2017 Circulars / Instructions / Orders DGFT Trade Notice No. 22/2024-25 - dated 14-11-2024 Harmonisation of Schedule-II (Export Policy), ITC(HS) 2022 Highlights / Catch Notes Income Tax Company name change deemed a curable defect, but penalty order issued beyond time limit quashed. Assessment against an entity that had ceased to exist prior to the initiation of proceedings. The effect of a change in name was considered a curable defect u/s 292B, as decided in Sky Light Hospitality LLP, wherein the Supreme Court held that the wrong name given in the notice was merely a clerical error that could be corrected. Since there was no change in the entity, only a change in the company's name, the Show Cause Notice and Penalty Order issued in the name of M/s. Infovision Information Services Pvt. Ltd. were not fatal defects and could be cured. The penalty order imposed beyond the limitation period was addressed. The survey was conducted in January 2008 to verify TDS deduction and deposit, and the AO passed the order on 30.03.2011, referring the penalty proceedings. The last date for passing the penalty order was 30.09.2011, as per Section 275(1)(c). However, the penalty order was passed on 29.07.2013, beyond the limitation period. The ITAT correctly deleted the penalty levied by the AO on the ground that the penalty order dated 29.07.2013 was passed after the lapse of six months from the end of the month in which the penalty proceedings were initiated, as required by Section 275(1)(c). The decision was in favor. Visit to Get Source Pandemic cited for incorrect advance tax estimation; Interest waiver plea remanded. The High Court quashed the order denying waiver of interest charged u/s 234C, holding that the Chief Commissioner of Income Tax failed to consider the petitioner's primary submission attributing the inability to correctly estimate income/profits for paying advance tax to the COVID-19 pandemic. The court observed that the impugned order did not address the petitioner's contentions based on cited decisions or the statutory provisions and scheme of the Income Tax Act relied upon. Consequently, the matter was remanded to the Chief Commissioner for fresh consideration of the waiver application on merits, considering the petitioner's submissions and legal position. Visit to Get Source Share premium received on issue of shares below fair market value: Assessee's choice of valuation method binding. The High Court held that u/r 11UA(2) of the Income Tax Rules, 1962, the assessee has the option to choose between the Net Asset Value method or the Discounted Cash Flow (DCF) method for computing the fair market value for the applicability of Section 56(2)(viib) of the Income Tax Act. Once the assessee exercises this option, the Assessing Officer cannot question the applicability or computation of the fair market value using the chosen method, even during regular assessment proceedings. The Assessing Officer cannot reopen the assessment merely because the valuation under one method is lower than the other method chosen by the assessee, as this does not constitute an escapement of income. The court opined that the Assessing Officer cannot assume jurisdiction to reopen the assessment to verify the veracity and computation under the DCF method on the ground that the assessee did not fulfill the projected growth in subsequent years, as no assessee can accurately predict future growth at the time of making projections. Visit to Get Source Tax assessment order wrongly cited; clarification accepted. Petition challenging it dismissed. The High Court dismissed the petition challenging the assessment order u/s 144C of the Income Tax Act. The Assessing Officer clarified that the impugned order was passed u/s 143(3) and not Section 144C, rectifying the systemic error reflecting it as an order u/s 144C. The petitioner's contention that the order was passed u/s 144C was incorrect, and the challenge based on this assumption was unsustainable after the Assessing Officer's clarification. Consequently, the High Court found no merit in the petition and dismissed it with costs. Visit to Get Source Homebuyer compensated by builder for delayed property handover. Compensation received by assessee from builder for non-delivery of property within stipulated time is a capital receipt not chargeable to income tax. Assessee had applied for cancellation of allotment which was accepted by builder, who calculated compensation considering 12% interest per annum. Assessee had taken housing loan for investment in property and repaid interest to bank. Compensation received for cancellation of allotment due to non-handover within time is not taxable in assessee's hands. Visit to Get Source Flat Purchase: Stamp Duty vs. Sale Consideration Discrepancy Scrutinized. Addition u/s 56(2)(b)(vii) relates to the amount in excess of stamp duty value from the sale consideration being added to the total income of the assessee under the head income from other sources. The assessee agreed to pay a lump-sum consideration for a flat along with a car parking space as per the allotment letter issued by the builder. The allotment letter was accepted, and conditions were fulfilled except for an amount pending on the date of registration. The Tribunal considered the allotment letter as an agreement to sell and examined the applicability of the first and second provisos to section 56(2)(vii)(b). The first proviso requires the consideration or part thereof to be paid by a mode other than cash on or before the date of agreement. The second proviso relates to the stamp duty value on the date of agreement. The assessee was directed to furnish evidence of payment of consideration or part thereof by a mode other than cash on or before the date of the allotment letter to prove the applicability of the provisos. The appeal was allowed for statistical purposes to provide an opportunity to the assessee to substantiate the case. Visit to Get Source Tax deducted but not deposited: Assessee not liable for recovery. The assessee claimed that the deductor had deducted tax but failed to deposit it with the Central Government, leading to a mismatch between tax credits claimed and allowed. The High Court held that the assessee cannot be proceeded against for recovery of tax dues when the deductor had deducted the tax but not paid it to the Central Government. The Tribunal found that the CIT(A) should have sought a remand report or remitted the issue to the AO to verify the genuineness of the assessee's claim. If the claim is found genuine upon verification, the assessee is not liable to pay the demanded tax, and the judgments relied upon by the assessee would apply. The Tribunal allowed the assessee's appeal for statistical purposes, directing further verification of the claim. Visit to Get Source Office premises sale treated as long-term capital gain; eligible for 54F exemption. Capital gains on sale of office premises determined as long-term capital gains (LTCG) eligible for exemption u/s 54F. The date of allotment when the right to own the flat accrued through the letter of allotment issued by the builder, creating a contractual right in personam in favor of the assessee, is considered the relevant date for determining the nature of the capital asset. The assessee made payments as required under the allotment letter, subsequently registering the agreement to sell. Based on these facts, the sale is treated as a long-term capital asset, entitling the assessee to claim deduction u/s 54F, subject to fulfilling requisite conditions. The addition made by the lower authorities is deleted, and the assessee's claim for LTCG is restored. The Assessing Officer is directed to examine the applicability of Section 54F and allow the claim accordingly. Visit to Get Source Cash deposits from retail business without books allowed; no addition u/s 68. Section 68 addition for cash deposits cannot be made where assessee filed return u/s 44AD and did not maintain books of accounts, as provisions of section 68 apply only when books are maintained. AO erred in invoking section 68 despite accepting return under 44AD without finding transactions as non-genuine. Telescoping benefit of withdrawals from same account should be given. Addition deleted as unjustified when assessee engaged in retail business, registered under relevant Act, and furnished bank statements showing deposits and withdrawals of nearly equal amounts without adverse findings by authorities. Visit to Get Source Software solutions provider's transfer pricing adjustments, disallowances reconsidered - comparables scrutinized, economic adjustments allowed. The assessee, a software solution provider, contested various transfer pricing adjustments and disallowances. Key points: Certain comparables were directed to be excluded due to functional differences, size incomparability, and segmental data differences. Economic/working capital adjustment was allowed following precedents. Disallowance u/s 14A read with Rule 8D was partly remitted for re-verification of interest-free funds and nexus with exempt income. Computation of deduction u/s 10A regarding exclusion of foreign currency expenditure and non-exclusion of delayed foreign remittances was restored for re-examination. The levy of interest u/s 234D was remitted for re-verification of refund status. Visit to Get Source Customs Customs port Chhara in Gujarat added for import/export operations. This notification amends the previous Notification No. 62/1994-Customs (N.T.) dated 21st November 1994 issued by the Central Board of Indirect Taxes and Customs, Ministry of Finance. It exercises the powers conferred by clause (a) of sub-section (1) of section 7 of the Customs Act, 1962. The amendment adds the customs port of Chhara in the state of Gujarat to the list of ports appointed for unloading imported goods and loading export goods or any class of such goods. Visit to Get Source Revised tariff values for edible oils, brass, areca nut, gold & silver imports effective Nov 15. This notification from the Central Board of Indirect Taxes and Customs (CBIC) under the Ministry of Finance revises the tariff values for the import of certain goods like edible oils, brass scrap, areca nut, gold, and silver. Table 1 specifies the tariff values per metric ton for various edible oils like crude palm oil, RBD palm oil, crude palmolein, RBD palmolein, crude soyabean oil, and brass scrap. Table 2 lists the tariff values for gold in various forms like bars, coins, and findings, as well as silver in forms like bars, coins, and semi-manufactured items. Table 3 mentions the tariff value for areca nuts. The revised tariff values are effective from November 15, 2024. This enables the CBIC to periodically update the tariff rates based on global commodity prices to facilitate proper valuation and revenue collection. Visit to Get Source Jajpur designated as Inland Container Depot for loading/unloading goods in Odisha. This notification from the Central Board of Indirect Taxes and Customs amends the previous Notification No. 12/97-Customs (N.T.) dated 2nd April 1997. It exercises powers u/s 7 of the Customs Act, 1962. For the state of Odisha, in the table under serial number 6B, a new item (iv) 'Jajpur' is inserted in column (3) with the corresponding entry in column (4) permitting unloading of imported goods and loading of export goods or any class of such goods at Jajpur. This notification effectively designates Jajpur as an Inland Container Depot for loading and unloading of goods in Odisha. Visit to Get Source Epichlorohydrin imports from China, Korea & Thailand face anti-dumping duty for 5 yrs to protect domestic industry from dumping, price undercutting. Anti-dumping duty imposed on imports of Epichlorohydrin from China, Korea and Thailand for 5 years based on DGTR findings of dumping, material retardation of domestic industry establishment, and undercutting of domestic prices by landed import prices. Duty rates specified for producers in subject countries ranging from nil to $557/MT. Residual rates for non-specified producers $216-327/MT. Duty payable in Indian currency based on notification exchange rates. Levied to remove injury to domestic industry. Visit to Get Source Customs rules amended: Pimpri's Inland Container Depot deauthorized for loading/unloading goods in Maharashtra. This notification amends the previous Notification No. 12/97-Customs (NT) dated 2nd April 1997 by exercising powers u/s 7(1)(aa) of the Customs Act, 1962. It omits the entry for Pimpri from the list of Inland Container Depots authorized for loading and unloading of goods in the state of Maharashtra. The amendment is issued by the Central Board of Indirect Taxes and Customs, Ministry of Finance. Visit to Get Source IBC Registrar's role ministerial, can't adjudicate maintainability of insolvency petition filed under IBC. The High Court analyzed the distinction between ministerial and adjudicatory functions in the context of filing a petition u/s 95 of the Insolvency and Bankruptcy Code, 2016. The court held that the Registrar of NCLT, while receiving and registering the petition, performs a ministerial function and does not have the authority to adjudicate on the maintainability or merits of the petition. The adjudicatory stage commences after the resolution professional submits a report to the NCLT. The court clarified that the automatic moratorium resulting from filing a Section 95 petition does not amount to abuse of process. The Registrar cannot reject the petition by examining its maintainability, as such adjudication falls within the domain of the NCLT at the appropriate stage. The High Court set aside the Single Judge's order allowing the writ petition. Visit to Get Source Operational creditor's Section 9 appeal dismissed over pre-existing copyright NOC dispute. The Appellate Tribunal dismissed the appeal filed by the Operational Creditor u/s 9 of the Insolvency and Bankruptcy Code, 2016. The application was initially rejected by the NCLT on the grounds of a pre-existing dispute regarding the issuance of a No Objection Certificate (NOC) by the Operational Creditor to the Corporate Debtor for registering the copyright of a TVC. The Terms and Conditions stipulated that the Operational Creditor would provide the necessary NOC for IP registration, which it failed to do despite repeated demands from the Corporate Debtor. The dispute was genuine, supported by evidence, and arose before the issuance of the Section 8 notice, qualifying as a "pre-existing dispute" - a valid ground for rejecting the Section 9 application. The Appellate Tribunal upheld the NCLT's order, finding no merit in the appeal. Visit to Get Source Firm admits unpaid operational debt, cash crunch cited; pre-existing disputes unsubstantiated. CIRP rightly initiated u/s 9 IBC. The Corporate Debtor admitted outstanding operational debt owed to the Operational Creditor, citing adverse cash flow as the reason for non-payment, without attributing any dispute. The admitted debt exceeded the prescribed threshold limit. The Corporate Debtor's contentions regarding partial admission of debt and existence of pre-existing disputes were found unsubstantiated. The Adjudicating Authority rightly initiated Corporate Insolvency Resolution Process (CIRP) u/s 9 of the Insolvency and Bankruptcy Code (IBC), as all requisite conditions were fulfilled - the operational debt was due and payable, exceeded the threshold, and no real pre-existing dispute existed. The Appellate Tribunal dismissed the appeal, upholding the Adjudicating Authority's order admitting the Section 9 application and initiating CIRP against the Corporate Debtor. Visit to Get Source Revival of Corporate Debtor halted by power utility's insistence on pre-CIRP dues; Supreme Court decision followed. Successful Resolution Applicant paid pre-CIRP electricity dues under protest to Respondent for restoring Corporate Debtor's electricity connection to revive operations per Resolution Plan. Payment related to Corporate Debtor's revival and Insolvency Resolution Process, hence refund claim falls u/s 60(5)(c) of IBC. Supreme Court's decision followed that power distribution company cannot insist on pre-CIRP arrears for restoring electricity. Respondent benefited from non-filing of claim, received higher amount than entitled under Resolution Plan. NCLT had directed restoration of approvals/licenses. Matter pertains to Respondent's non-compliance and insistence on extinguished pre-CIRP dues, covered u/s 60(5)(c). Impugned order set aside, appeal allowed. Visit to Get Source PMLA Money laundering accused granted bail considering constitutional rights, prolonged incarceration, and delayed trial. The court granted regular bail to the accused in a money laundering case, considering the prolonged incarceration, the likelihood of delay in trial, and the constitutional right to liberty and fair trial. The court relied on Supreme Court precedents that held Section 45 of the Prevention of Money Laundering Act (PMLA) cannot override Article 21's fundamental right to life and personal liberty. While Section 45 imposes additional conditions for bail, it does not create an absolute prohibition. When trial is delayed for reasons not attributable to the accused, prolonged incarceration would violate the right to speedy trial. The court balanced the stringent provisions of PMLA against the constitutional mandate, concluding that using Section 45 as a tool for indefinite incarceration is impermissible. Considering the circumstances, including the main accused being out on bail and the trial's stagnation, the court granted regular bail to the applicant, subject to furnishing personal bond and surety. Visit to Get Source Service Tax Vehicle dealer's discounts, incentives from manufacturers & booking cancellation fees are not taxable services. The appellant, a vehicle dealer, purchases vehicles from manufacturers like Maruti Suzuki and Renault, and subsequently sells them to customers. The discount/incentive received from manufacturers based on yearly sales performance is not a service, but a discount on the sale value of vehicles, hence not liable to service tax. This issue is settled by various judgments. Booking cancellation charges received by the appellant are not consideration for service but compensation, as held in Divine Autotech case and clarified in Circular No. 178/10/2022-GST. Therefore, service tax is not leviable on discounts/incentives from manufacturers or booking cancellation charges. Visit to Get Source Govt undertaking wins tax battle over reimbursements for medical, dog squad & event costs. The tribunal held that the amounts received by the appellant for reimbursement of medical expenses, dog squad maintenance costs, and expenses incurred for celebrating Republic Day and Independence Day were not in the nature of consideration for any services provided. These were mere reimbursements of expenses and not taxable under service tax. The issue was covered by a previous decision of the Hyderabad Bench, which held that reimbursement expenses should not be added to the gross value for calculating service tax payable. Regarding the extended period of limitation, the tribunal found merit in the appellant's argument that the confirmed demand was time-barred, as the appellant, being a reputed government undertaking, could not be said to have any intention to evade service tax payment. Consequently, the appeal filed by the appellant was allowed on merits and also on the ground of limitation. Visit to Get Source Imported software sale taxability: When goods, not service. Service tax liability on sale of imported tally software was disputed. Appellant was a distributor marketing and installing the software on behalf of the seller holding intellectual property rights, with only the product being transferred. Demand of duty by invoking extended period of limitation from 16.05.2008 to 30.09.2008 was held unsustainable as penalty u/s 78 was dropped by the Appellate authority on grounds of absence of guilty mind, and this finding was not challenged by the revenue. The imported and sold software was an import and sale of goods, not exigible to service tax as per Supreme Court's judgment in Tata Consultancy Services case. Regarding upgradation of software, as per Quick Heal Technologies Ltd case, once lumpsum was charged for sale of CD and sales tax paid, revenue cannot levy service tax again on the entire sale consideration on grounds of providing updates. Once appellant paid VAT on sale of goods, service tax cannot be demanded on such sale. Visit to Get Source Central Excise Dry date processing saga: Exemption upheld, penalty quashed. Classification of an end product derived from processing dry dates under the Central Excise Tariff, whether it qualifies as "manufacture" under the Central Excise Act, and the implications for Small Scale Industry (SSI) exemption and penalty. The key points are: The end product, sold as "dry dates cut" or "dry dates chura," underwent processes like washing, deseeding, cutting, drying, sieving, and packing. The appellant contended it should be classified under sub-heading 08041030 as dry dates, while the department argued for sub-heading 20089999 as prepared fruit. Applying the General Rules for Interpretation (GIR), the product aligns with the specific description under Chapter 8 for dry dates rather than the general Chapter 20 for prepared fruits. The processes did not result in a new product distinct from dry dates. Therefore, the end product is correctly classified under Chapter 8, attracting nil duty rate. Consequently, the denial of SSI exemption and imposition of penalty u/s 11AC were improper, as no duty is confirmed. The Tribunal's order was set aside, and the appeal was allowed. Visit to Get Source Case Laws: Income Tax 2024 (11) TMI 704 Addition made u/s 68 - ITAT deleted addition - Appellant department would strenuously contend that on examination of the documents which were produced by the share subscribing companies, it is evidently clear that none of those companies had any creditworthiness to invest in the shares of the assessee company, that too, at a high premium. HELD THAT:- Unfortunately, examination of the factual position as sought for cannot be done in an appeal filed u/s 260A of the Income Tax Act and it is the duty of the Assessing Officer to have done such an exercise. Tribunal on facts found that all the share subscribing companies have responded to the notices issued u/s 138(6) of the Act and made their submissions and produced documents. Therefore, it is the duty on the Assessing Officer to deal with those documents, point out any discrepancies and then make the addition. However, the Assessing Officer failed to do so and the CIT(A) also committed same error. Therefore, we find the Tribunal was well justified in allowing the assessee s appeal and in doing so, the learned Tribunal has also taken note of various decisions of this Court and recorded its reasons for allowing the appeal. 2024 (11) TMI 703 Assessment against name of an entity which had ceased to exist much prior to the initiation of proceedings - Affect of change of name - whether curable defect u/s 292B - HELD THAT:- As decided in Sky Light Hospitality LLP [ 2018 (2) TMI 1093 - DELHI HIGH COURT] wherein, the Supreme Court held that the wrong name given in the notice was merely a clerical error which could be corrected under Section 292-B of the Act. As there was no change of entity, there being only change of name of the company, Show Cause Notice issued and the Penalty Order passed in the name of M/s. Infovision Information Services Pvt. Ltd. is not such a defect which cannot be cured and is therefore not fatal. We, accordingly, set aside the finding returned by the ITAT to the aforesaid extent and answer the question of law in favour of the appellant. Penalty order imposed beyond period of limitation - As the survey was conducted in January 2008 to verify whether the TDS has been correctly deducted and deposited timely into Government s account. The order was passed by the AO on 30.03.2011, holding the assessee to be in default for not paying the relevant TDS and the penalty proceedings were referred to the Additional CIT, Range-50 for levy of penalty. Thus, the last date by which the penalty order could have been passed was 30.09.2011 as the six months from the end of the month from which action for imposition of penalty was initiated, would expire on 30.09.2011. However, in this case, admittedly, penalty order was passed on 29.07.2013, and therefore, ITAT had rightly concluded that the orders were barred by limitation. ITAT was correct in law in deleting penalty levied by the AO on the ground that penalty order dated 29.07.2013 was passed beyond the time period framed by Section 275 (1) (c) of the Act and the same having been passed after the lapse of six months from the end of the month in which the penalty proceedings were initiated by the AO. Decided in favour of assessee. 2024 (11) TMI 702 Denial of Waiver of interest charged u/s 234C - thrust being the sudden outbreak of the COVID-19 pandemic which prevented the petitioner from correctly/properly estimating the income/book profits for paying the Advance Tax for the A.Y. 2021-22 - HELD THAT:- It appears to us that the impugned order in its findings has nowhere considered the primary submission of the petitioner on waiver of interest, attributable to the COVID-19 pandemic. There is no reference let alone findings on such submission of the petitioner, which is stated to be fundamental to the case of the petitioner as set out in its application dated 9th November 2022. There is another contention that the impugned order also fails to consider and/or deal with the position in law as reflected in the decisions cited and relied upon by the petitioner in its application dated 9th November 2022, let alone dealing with the same. In our view, the impugned order ought to have addressed these issues as flagged by the petitioner in supporting its case for grant of waiver of interest u/s 234C of the Income Tax Act as set out in the application of the petitioner dated 9th November 2022. Such approach of Chief Commissioner of Income Tax would show non-application of mind to the material contentions raised by the petitioner. The other statutory provisions and/or the scheme of the Act, on which the petitioner intends to support the case of the petitioner, in the given facts and circumstances, also lacks consideration in the impugned order. It was apposite for the Petitioner to raise contentions relying on the decisions cited before us, which also needs to be taken into consideration by the CCIT. Thus we deem it to be fit and proper to quash and set aside the impugned order dated 30th March 2024 passed by respondent No. 1; and remand the proceedings to the respondent No. 1 for a denovo consideration of the petitioner's waiver application to be decided on its own merits. 2024 (11) TMI 701 Stay of demand - petitioner had not paid 20% of the disputed amount as per the instructions given by the Board on 31.07.2017 - HELD THAT:- A learned single Judge of this Court in [ 2021 (4) TMI 609 - MADRAS HIGH COURT] had categorically held that such order passed u/s 220(6) of the Act would only hold good and will have to give way as and when the appellate authority passes an order on the stay petition filed by the aggrieved assessee. The nomenclature stay used in the circular would only mean the powers that is vested with him. The reason for coming to such conclusion is that the power to grant stay is a power that is incidentally available to the appellate authority as held in the judgment reported in ITO Vs M.K. Mohammed Kunhi [ 1968 (9) TMI 5 - SUPREME COURT] As rightly pointed out by the learned Standing Counsel, even the application filed by the petitioner before the respondent for grant of stay is bald and bereft of any material facts and even if the circular is to be made applicable, then the respondent could have invoke his power u/s 220(6) by directing the petitioner to deposit the sum equivalent to 20% of the disputed amount in appeal. Further, the impugned order does not specify any reason as to why the petitioner was not entitled for the relief under Section 220 (6) of the Act. Since we found that the impugned order is a non speaking order, we am inclined to interfere with the same. The order impugned issued by the respondent is set aside and the matter is remitted back to the respondent by treating the application as one under Section 220(6) of the Act and pass appropriate orders on merits and in accordance with law. The petitioner shall also file a supplementary petition containing the additional particulars and contentions in support of his claim within a period of two weeks from the date of receipt of a copy of this order. On receipt of such application, the respondent shall consider the same and pass appropriate orders within a period of four weeks thereafter. 2024 (11) TMI 700 Addition as undisclosed income on account of unexplained deposit in foreign bank account - appellant had earned undisclosed income only on the ground that he had been issued a debit card by a foreign bank - HELD THAT:- As none of the questions are substantial questions of law. As noted addition as admitted by the Assessee has been made solely on the basis that the Assessee had maintained an overseas bank account with Barclays Bank, and the deposits were made in the said bank account were not disclosed. AO thus, in his best judgment estimated the quantum of deposit. However, it is also admitted that no enquiries were made, as directed by the learned ITAT in terms of the order dated 31.12.2007. Assessee also concedes that in the absence of the Assessee producing the relevant material, the AO was well within his right to make an estimate bearing in mind the income profile of the Assessee. We find it difficult to accept that any interference with the estimation of the deposit made in the bank account, are called for in the absence of Assessee producing his own bank account statement. As Assessee submits that the Assessee may be given one more opportunity to produce the relevant bank statement for the block period to establish the quantum of deposits. The learned counsel appearing for the Revenue fairly states that he has no objection in this regard. AO is directed to re-examine the question of quantum of the addition on account of the deposits made in the foreign bank account maintained by the Assessee during the relevant period. This is subject to the Assessee producing the authenticated bank statement of the said bank account for the relevant period. In the event, the Assessee produces the same, the AO shall determine the addition based on the said account. And, the additions, as directed by the learned CIT(A) and as upheld by the learned ITAT in the impugned order, will shall stand modified to the said extent. 2024 (11) TMI 699 Validity of reopening of assessment - income that could have escaped assessment was below the threshold amount specified in Section 149 (1) (b) - as argued assessment proceedings have been initiated after an expiry of a period of three years and the information available indicates that the income that could possibly have escaped assessment is less than the threshold amount of Rs. 50,00,000/- as specified u/s 149 (1) (b) - HELD THAT:- A plain reading of the impugned order indicates that it is ex facie erroneous and has been passed without application of mind. AO has now concluded that the income, which has escaped assessment and that the petitioner had received the said amount during the financial year (FY) 2016-17. The conclusion that the petitioner had received any amount from M/s Bhagwati Developers and its group concern during FY 2016-17 is without any basis. Apparently, the AO has lost track of the allegation made in the notice issued u/s 148A (b) of the Act, which was to the effect that the petitioner had purchased a flat for a consideration which included Rs. 25,35,940/-. There was no allegation that the petitioner had received any amount from M/s Bhagwati Developers or any of its group concern. The information available with the AO is also not suggestive of the petitioner having received any money from M/s Bhagwati Group. The information available on the portal also indicates that the petitioner had purchased an immovable property for a consideration of Rs. 70,35,940/-, which included payments in cash. Prima facie, it appears that the AO had erroneously added the value of the transaction, which includes the element of cash, and the alleged cash payment. However, the information available with the AO as disclosed does not support this computation. The impugned order is set aside. The matter is remanded to the AO to consider afresh in the light of the information as available as well as the petitioner s reply to the notice issued u/s 148A (b) of the Act. 2024 (11) TMI 698 Application for condonation of delay for filing revised returns - HELD THAT:- ere is some merit in the contention taken by the learned counsel for the petitioner that the merits of the claim raised by the petitioner had been considered while deciding whether the application for condonation of delay for filing revised returns for the assessment year 2021-2022 should be granted or not. The fact that the merits of the claim raised by the petitioner was considered is clear from a reading of Exts.P7 and P8 notices issued by the Income Tax Officer prior to the consideration of the matter by the Principal Commissioner. The impugned orders are liable to be set aside and the applications filed by the petitioner for condonation of delay u/s 119(2)(b) of the Income Tax Act 1961, are to be restored for the consideration of the Principal Commissioner of the Income Tax, Thiruvananthapuram, who shall consider as to whether there was sufficient reason for condonation of delay. 2024 (11) TMI 697 Reopening of assessment u/s 147 - applicability of the DCF method vis-a-vis Net Asset Value Method prescribed under Rule 11UA of the Rules - huge difference between the two methods of valuation - computation of the fair market value - choice of valuation method under Rule 11UA (2) of the Income Tax Rules, 1962 - HELD THAT:- Clause (a) and (b) of the Rule 11UA (2) of the Rule prescribes the method of Net Asset Value method and the discounted cash flow method for which, the assessee is entitled to exercise the option for computation of the fair market value for the applicability of section 56 (2) (viib) of the Act. So far as the applicability of the method prescribed in Rule 11UA (2) of the Rules is concerned, the same is as per the option to be exercised by the assessee and once the assessee has exercised the option, the Assessing Officer even during the regular course of assessment, could not have questioned the applicability and computation of the fair market value as per either of the methods and therefore, there is no question of forming a reason to believe that as the valuation is less in one method and the assessee has adopted the method having higher valuation method, then there is escapement of income. We are of the opinion that the Assessing Officer could not have assumed the jurisdiction to reopen the assessment on the ground that to verify the veracity and the computation as per the DCF method adopted by the assessee on the ground that the assessee did not fulfill the projected growth as per the discounted cash flow method in the subsequent year because at the time of making projection, no assessee would be in a position to predict the future growth as per the projection. The impugned notice is accordingly quashed and set aside. 2024 (11) TMI 696 Assessment u/s 143(3) or 144C - Validity of draft assessment order u/s 144C - petitioner claims that the AO has erred in passing the impugned order as the petitioner is not an eligible assessee - According to the Revenue, the impugned order is not an order passed u/s 144C of the Act, but an order passed under Section 143 (3) of the Act, and therefore, the present petition is ill-founded - HELD THAT:- Plainly, after the AO had furnished the said clarification, there could be no possible confusion in the mind of the petitioner that the impugned order was passed u/s 143 (3) of the Act. Petitioner also submits that the portal also reflects that an order was issued u/s 144C of the Act and not u/s 143 (3) of the Act. In view of the communication dated 13.01.2020, the petitioner could not harbour any confusion in this regard as well, as the AO had clearly pointed out that there was some systemic error in reflecting the impugned order as an order u/s 144C of the Act. The petitioner s claim that the impugned order is passed under Section 144C of the Act is clearly erroneous. The petitioner s challenge to the impugned order is on the ground that it is an order under Section 144C of the Act, which as noted above, is incorrect. The challenge to the impugned order on the assumption that it is a draft assessment order under Section 144C of the Act after notwithstanding the clear language of the contents of the impugned order, is unsustainable. There was no scope of raising such a challenge after the AO had amply clarified that the impugned order was issued under Section 143 (3) of the Act and the assessee s contentions to the contrary are insubstantial. In view of the above, the present petition is dismissed with costs. 2024 (11) TMI 695 Reopening of assessment against non-existing companies/companies post-amalgamation - HELD THAT:- In view of the above dictum of law and considering the facts of the present case, more particularly, when the Assessment Order is already passed in the case of the petitioners for the year under consideration in the name of the asseseees, the Department was in knowledge of the amalgamation which had taken place in each case. Therefore, the impugned notices are not tenable as the same would be without jurisdiction as having been issued against the non-existing companies. The petitions succeed and are accordingly allowed. The impugned notices issued u/s 148 of the Act are hereby quashed and set aside - Decided in favour of assessee. 2024 (11) TMI 694 Addition u/s 69A/ 69- source of the fixed deposits made in Allahabad bank- Entitlement to Exemption u/s. 10(26AAB) - ITAT [ 2023 (11) TMI 1307 - ITAT CUTTACK] stated that the assessee is an agricultural produce market committee constituted under Orissa Agricultural Produce Market Act, 1956 for the purpose of regulating the marketing of agricultural produce and in view of the same, the income of the assessee is eligible for exemption u/s 10 (26AAB) - HELD THAT:- There is no material placed before this Court for consideration that the income derives from the purchase and sale of agricultural produce under the provisions of the Orissa Agriculture Produce Market Act, 1956 is liable for taxation. Therefore, this Court does not find any illegality or irregularity in the order passed by the Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi, which has been confirmed by the Income Tax Appellate Tribunal, Cuttack Bench, Cuttack. Decided against revenue. 2024 (11) TMI 693 Chargeability of tax u/s 201(1) and interest u/s 201(1A) - payment of External Development Charges ( EDC ) made to the HUDA was liable to Tax Deduction at Source ( TDS ) in the hands of various payers/persons including the appellant/assessee. HELD THAT:- We are of the considered view that the appellant-assessee deserves reasonable opportunity of being heard and the Revenue also has to verify the sum paid/payable as EDC by the appellant/ assessee. In view thereof, without offering any comment on merit of the case, we deem it fit to set aside the impugned order and remit the matter back to the file of the Assessing Officer (TDS) for proper verification of quantum of EDC charges paid by the appellant/assessee and doing needful accordingly. The appellant-assessee should ensure compliances during the set-aside proceedings. Appeal of the assessee is allowed for statistical purposes. 2024 (11) TMI 692 Assessment u/s 153A - Addition u/s 68 - HELD THAT:- It is found that there is no adverse incriminating material/document found in the premises of the searched person based on which the addition was made in this case. We are therefore, of the considered view that the decision of the Hon ble Supreme Court in the case of Singhad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] and the decisions of RRJ Securities Ltd. [ 2015 (11) TMI 19 - DELHI HIGH COURT] and AR Infra India Ltd. [ 2017 (4) TMI 1194 - DELHI HIGH COURT] are applicable here in the present case. We, therefore, do not find any infirmity in the impugned order and thus, we decline to interfere with the finding of the Ld. CIT(A). Accordingly, the appeal of the Revenue is dismissed. 2024 (11) TMI 691 Nature of receipt - compensation received by the assessee from Jaypee Greens Greater Noida for non-delivery of property in time - capital receipt not chargeable to income-tax or not - HELD THAT:- It is not disputed that the Jaypee Greens Greater Noida has not handed over the unit to the assessee within 39 months and the assessee has applied for cancellation of the allotment and the allotment was cancelled by the builders and the compensation was calculated by considering interest @12% per annum. The assessee has received the capital receipt from the Jaypee Greens Greater Noida. Perusal of the order of the Ld CIT(A) it reveals that the assessee has made the repayment of interest to ICICI Bank on housing loan for investment of property. Thus we hold that the compensation received by the assessee from Jaypee Greens Greater Noida for cancelling the allotment of unit due to not handed over within time in the sum is not chargeable to tax in the hands of the assessee. Appeal of the assessee is allowed. 2024 (11) TMI 690 Levying Fee u/s 234E for delay in submission of TDS return within the stipulated time - statement processed u/s.200A of the Act prior to 01.06.2015 - HELD THAT:- We observe that the issue of levy of fee u/s.234E is no more res integra by virtue of several decisions rendered by this Tribunal on this very issue. The assessment year involved in the present appeal is 2013-14 which show that the fee u/s.234E has been imposed for the delay in furnishing the statement for Quarter-2, in the return processed u/s.200A dated 21.01.2014, i.e., prior to 01.06.2015. As regards the fate of fees levied u/s.234E of the Act for the returns filed and processed before 01.06.2015, we find the Coordinate Benches of this Tribunal after considering the judicial pronouncements have been taking a consistent view that the amendment brought in Finance Act, 2015 w.e.f. 01.06.2015 under Section 200A (clause (c)] of the Act is prospective in nature thereby empowering the Revenue authorities to charge fee u/s.234E of the Act only after 01.06.2015. In that view of the matter, Revenue authorities are empowered to impose such late fee u/s.234E only for the default committed after 01.06.2015 and not prior to that. The Hon ble Kerala High Court in Olari Little Flower Kuries Pvt. Ltd. Vs. Union of India and others [ 2022 (2) TMI 1061 - KERALAHIGH COURT] has affirmed the non-imposition of fee for the period prior to 01.06.2015. Similar view has been taken in Jiji Varghese [ 2022 (3) TMI 1291 - KERALA HIGH COURT ] holding that no fee u/s.234E can be imposed for the periods of the respective A.Ys. prior to 1st June, 2015. Similar view was also taken by this Tribunal in the case of Dadasaheb Vitthalrao Urhe [ 2024 (3) TMI 149 - ITAT PUNE ] Appeal of the assessee is allowed. 2024 (11) TMI 689 Revision u/s 263 - share premium received by the appellant - HELD THAT:- From the examination of record it is crystal clear that appellant/assessee company has filed its return of income for the year 2014-15 on 01.11.2014 declaring an income - Assessment order dated 02.08.2016 mentions that the case was selected for limited scrutiny through CASS. As per notice assessee furnished required information and reply on the basis of which the return income was accepted and assessed on return income. PCIT vide orderset aside order and directed A.O. to pass an order afresh. Appeal of the assessee was dismissed by ITAT, Delhi. Hon ble High Court of Punjab and Haryana set aside order and remanded the matter back to PCIT to pass a well reasoned order. Learned PCIT issued notice under Section 263 of the Act. Assessee filed reply on 09.01.2024. PCIT after perusing balance sheet as on 31.03.2013 observed that the assessee received Rs. 2,64,10,000/- as share application money pending for share allotment during Financial Year 2012-13, however, no allotment of share was made during the Financial Year 2012-13. As per balance sheet as on 31.03.2014, the 2,11,280 share @ 125/- per share were issued to various parties against the face value of Rs. 10/- each and added/diverted Rs. 2,42,97,200/- as Securities Premium Reserve during the Financial Year 2013-14 relevant to Assessment Year 2014-15. As per ratio of judgment in Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT] and Sun Beam Auto Limited [ 2009 (9) TMI 633 - DELHI HIGH COURT] it is well settled that where the AO passed an order after conducting necessary inquiry and on due application of mind, the CIT could not assume jurisdiction to revise such an order simply because the CIT wanted inquiries to be conducted in a particular manner or the CIT was of the opinion that some or more inquiries needed to be conducted. The issue regarding allotment of shares was examined by Ld. A.O. and decided in favour of assessee in original assessment proceedings. Learned PCIT failed to clarify as to how share premium received by assessee in year 2013-14 can be taken as escaped income to initiate re-assessment proceedings for Assessment Year 2014-15. PCIT had no where found any flaw in the documents. PCIT had not undertaken any enquiry or given reasons for coming to conclusion that assessment order was erroneous and prejudicial to interest of revenue. Explanation 2 to section 263 of the act does not give unfettered power to Ld. PCIT to revise each and every order to re-examine the issues already examined by the AO during assessment proceedings. Therefore, the impugned order is beyond jurisdiction, bad in law and void ab initio. Appeal of the Assessee is allowed. 2024 (11) TMI 688 Addition u/s 56(2)(b)(vii) - amount which is in excess of the stamp duty value from the sale consideration added to the total income of the assessee under the head income from other sources HELD THAT:- From the perusal of the letter of allotment dated 29/05/2007 issued by the builder, we find that the assessee along with her husband agreed to pay lump-sum consideration of INR 25,62,500 in respect of Flat A-504, 5th floor, A-Wing, Veermani Market, Mumbai-400009, admeasuring 663.50 ft along with one car parking. Apart from the various other terms and conditions, we find that the parties are also agreed to the schedule of payment of the total consideration of INR 25,62,500. There is no dispute regarding the fact that the terms as agreed vide afore-stated allotment letter were complied with by both parties and payment was made to the builder except an amount of INR 5,20,000 which was only pending to be paid on 31/03/2013, i.e. on the date of registration of the agreement. This fact is evident from page no.36 of the paper book. Thus, the allotment letter was not only duly accepted by the assessee along with her husband but other conditions were also fulfilled. Therefore, respectfully following the aforesaid decision, we are of the considered view that the allotment letter can be considered as an agreement to sell in the present case. Even though the date of agreement fixing the amount of consideration for the transfer of immovable property, in the present case, is not the same as the date of registration, however, for the applicability of the first proviso to section 56(2)(vii)(b) of the Act, it is further relevant that the amount of consideration or part thereof is paid by any mode other than cash on or before the date of agreement in terms of the second proviso to section 56(2)(vii)(b). Assessee has furnished a copy of statement of its bank account maintained with the Maharashtra Cooperative Bank Ltd from 11/03/2008 till 02/04/2009 in order to show the payments made to the builder. Since the letter of allotment was issued by the builder on 29/05/2007, therefore for the purpose of applicability of the first and second proviso to section 56(2)(vii)(b) of the Act, it is relevant that some evidence is brought on record to show that the consideration or part thereof was paid by the assessee by any mode other than cash on or before the date of the allotment letter, i.e. 29/05/2007. Even in the decision of the coordinate bench of the Tribunal relied upon by the assessee, as noted in the foregoing paragraphs, while directing the AO to compare the stamp duty valuation as on the date of allotment with the transaction value recorded in the registration document, we find that the coordinate bench took into consideration the fact that the taxpayer, in that case, paid an amount of INR 2 lakh at the time of booking prior to the allotment letter. In the present case, no such evidence of payment of agreed consideration or part thereof by any mode other than cash on or before the date of the allotment letter has been brought on record. Therefore, in order to grant one more opportunity to the assessee in the interest of justice and fair play, we deem it appropriate to restore this issue to the file of the jurisdictional AO for adjudication in view of our aforesaid findings with a direction to the assessee to furnish the evidence of payment of agreed consideration or part thereof by any mode other than cash on or before the date of allotment letter to prove the applicability of the first and second proviso to section 56(2)(vii)(b) - Appeal by the assessee is allowed for statistical purposes. 2024 (11) TMI 687 Deductor had deducted the tax but not paid to the Central Government -mismatch between tax credits claimed and allowed and the reasons for the said mismatch was mentioned as form 26AS does not contain amount of TDS /TCS with respect to the TAN mentioned in Schedule TDS-1/TDS 2 /TCS - HELD THAT:- Assessee cannot be proceeded for the recovery of the tax dues when the deductor had deducted the tax but not paid to the Central Government. [ 2023 (6) TMI 1135 - DELHI HIGH COURT] . In the present case, we find from the documents submitted by the assessee, the tenant had deducted the tax while making the rental payments but failed to deposit the same into the Central Government. Before the Ld.CIT(A) as well as before this Tribunal, the assessee had given the details of the deductor but the Ld.CIT(A) had not taken any steps to ascertain the facts based on the details furnished by the assessee. We are of the view that the CIT(A) could have sought for a remand report from the AO through which the genuineness of the claim of the assessee could have been verified. On the other hand, the CIT(A) could have remitted the issue to the AO to verify the genuineness of the claim and if the claim of the assessee is found correct, then the AO could have desisted from collecting the tax due from the assessee. On the face of the documents submitted by the assessee, we are able to visualise that there is some reasonables in the submissions made by the assessee. Therefore the matter requires further verification. In the event of verification, if the AO found that the claim made by the assessee is genuine, then naturally, the judgments relied on by the Ld.AR would apply to the facts of the case and in that event, the assessee is not liable to pay the tax as demanded by the authorities. Appeal filed by the assessee stands allowed for statistical purposes. 2024 (11) TMI 686 Levy of penalty u/s 270A - under-reporting of income in consequence of mis-reporting of income - Mandation to mention clear charge - capital gain attracted on sale of agricultural land which is situated at rural area - HELD THAT:- We find the Co-ordinate Bench of the Tribunal in the case of Kishor Digambar Patil vs. ITO[ 2023 (3) TMI 1472 - ITAT PUNE] while deciding an identical issue has quashed the penalty levied u/s 270A for failure of the Assessing Officer in quoting any of the six limbs as mentioned in section 270A(9) of the Act. Since the Assessing Officer in the instant case has admittedly not mentioned as to under which limb of sub-section (9) of section 270A he has levied the penalty, we hold that the penalty so levied by the Assessing Officer u/s 270A is not in accordance with law. We, therefore, set aside the order of the Ld. CIT(A) / NFAC and direct the Assessing Officer to delete the penalty. The grounds raised by the assessee are accordingly allowed. 2024 (11) TMI 685 Reopening of assessment - reasons to believe - information received from the Investigation Wing - HELD THAT:- The section 147 of the Act mandates the Assessing Officer to record reasons to believe that any income chargeable to tax has escaped assessment. It is no more res intigra that borrowed satisfaction for reopening the assessment vitiates reassessment proceedings. A plain reading of the reasons recorded by the AO, unambiguously reflect that the AO has reopened the assessment based on the information received from the Investigation Wing of the Department. The reasons to believe are not of the AO. Assessment is liable to be quashed on this ground alone. We find no infirmity in the findings of the CIT(A) on this issue. We see no merit in ground no. 2 of appeal; hence, the same is dismissed. Addition u/s 37 - payment made to two companies - contention of assessee is that the assessee has not claimed expenditure against the payments made to Telestar Packaging P. Ltd., Sahara Prime City Ltd., during the relevant period - The CIT(A) on this issue has recorded finding of fact that, the impugned payments to the above two companies were advances for execution of work and the said advances were not capitalized in work-in-progress and therefore there is no reason otherwise also for the AO s conclusion that the said payments are to be exclude from WIP, thus rendering the finding and conclusion of the AO a falsity and nullity . The Revenue has not been able to controvert the said findings of the CIT(A). In the absence of any contrary material, we see no reason to disturb the findings of CIT(A) on merits of the addition. Ergo, ground of appeal no. 3 is dismissed. 2024 (11) TMI 684 Capital Gains on Sale of Office Premises - LTCG or STCG - entitlement to exemption u/s 54F - Determination of date of allotment when the property was ready OR Date of provisional allotment of the property, date of booking, payment made over the years to the builder towards acquisition of immovable property and the period of construction of the property - HELD THAT:- It is an undisputed fact that a letter of allotment was issued by the builder to the assessee by which a right to own the flat had accrued on the assessee. The right which accrued to the assessee is the booking right, i.e., the right to purchase the flat and obtain the title. It is not in dispute that the assessee has not defaulted on the terms and conditions of the letter of allotment. Assessee has made all the payments as required under the letter of allotment which has been duly acknowledged in the subsequent registration of the agreement to sell. The assessee has furnished details of payments made in each of the years. The consequence of the issuance of a letter of allotment for the flat signifies a contractual arrangement between the assessee and the builder by which a right in persona is created in favor of the assessee. When such a right is created in favor of the assessee, the builder is restrained from selling the said identified flat to someone else because the assessee in whose favor the right in persona is created, has a legitimate right to enforce specific performance in terms of the said letter of allotment, if the builder, for some reason is not executing and complying with the terms stated therein. A right in personam had been created in favor of the assessee in whose favor the letter of allotment had been issued and who has paid 20% of the total agreed consideration as advance. Based on the facts and circumstances mentioned above, we are of the view that the sale of the above stated premises is in the nature of long term asset resulting in long term capital gains on which the assessee is also eligible to deduction in terms of section 54F. The addition made is accordingly deleted and claim of the assessee is LTCG is restored. Since the applicability of section 54F was not examined by the lower authorities, the same would be examined by the Assessing officer in the light of the relevant provisions of the Act and subject to fulfilment of requisite conditions therein, the AO would allow the claim as well. Appeal of the assessee is allowed. 2024 (11) TMI 683 Disallowance of payment u/s 40(a)(ia) - Scope of second proviso to section 40(a)(ia) - As the business receipts exceeded the threshold, he was required under the Act to deduct TDS under respective provisions - AO observed that the appellant failed to do so in matters of payment to NBFCs and to an exempt trust - HELD THAT:- The assessee before the CIT(A) claimed that in view of the 2nd proviso the payee should file his return of income including such income in return. For this a certificate in Form 26A is required to be furnished. This form issued by an Accountant gives the said information that the payee has filed the return of income, the income paid by the payer is included therein and amount of tax paid by it. Accordingly, the assessee furnished relevant details in Form 26A.The certificate of an Accountant was also filed. CIT(A) has laid emphasis on production of ITRs, audit report, proof of tax payment etc as well which according to him, the assessee failed to produce leading to upholding the disallowance made by the AO. The assessee furnished the certificate of Chartered Accountant (Form 26A) under first proviso to Section 201(1) of the Act certifying that payee NBFC had furnished his return of income for the relevant A.Y. and included amount of interest in its income and paid due taxes. As per Rule 31ACB, assessee is required to furnish Annexure A alongwith Form 26A. It is undisputed fact that the assessee is liable to deduct TDS on payments made to NBFC on interest payments. However, 2nd proviso does reduce the rigours of section 40(a)(ia) where the payee has disclosed the said interest and paid taxes thereon by filing its return. The assessee in this case, has duly submitted Form no.26A evidencing such disclosures by the payees. AO was not amused and needed further details such as relevant ITRs, audit report, tax challans etc. Evidently, the assessee has discharged the primary onus in the matter as neither the AO nor CIT(A) have doubted the correctness of the said form duly certified by the Chartered Account. AO is well within his powers to examine the veracity of the said forms and for which he is adequately empowered under the Act and to seeks relevant information from relevant payees rather than expecting the taxpayers to obtain such details from big NBFCs. The matter is therefore, restored to the AO or making further enquiries and obtain necessary details so as to satisfy himself about the correctness of the claim as per Form 26A submitted. Assessee appeals are allowed for statistical purposes. 2024 (11) TMI 682 Addition u/s 14A r.wr. 8D - suo-moto disallowance of the assessee - Mandation to record satisfaction - CIT(A) deleted addition as AO failed to record the satisfaction for invoking section 14A while making the disallowance - HELD THAT:- ITAT [ 2021 (6) TMI 1178 - ITAT PUNE] had set aside the impugned issue for a limited purpose for verification of suo-moto disallowance claimed to be made by the assessee and whether the suo-moto disallowance was 0.5% or more. Thus, in our opinion the impugned issue was set aside for a very limited purpose. However, Ld.AR vehemently argued that it was set aside for reworking hence AO had to consider all the things and therefore, Ld.CIT(A) was correct in deleting the disallowance. We do not agree with the submission of Ld.AR, we have already stated that the ITAT had set aside the impugned issue for a limited purpose. CIT(A) had exceeded the jurisdiction and travelled to the area which was already decided by the ITAT. The ITAT had already held that there was proper satisfaction recorded by the AO. Once the ITAT had held that there was satisfaction recorded by the AO the ld.CIT(A) do not have any jurisdiction to adjudicate that issue again. Therefore, in this case the Ld.CIT(A) has exceeded the jurisdiction. CIT(A) discussed availability of funds with the Assessee, however, as seen from the order of the ITAT, this was not the ground on which ITAT had set-aside. Therefore, in this aspect also, the ld.CIT(A) has exceeded his jurisdiction. We again reiterate that the ITAT had set-aside the issue for a Limited Purpose of Verification of suo-moto disallowance made by assessee. Therefore, ld.CIT(A) has no jurisdiction to venture into any other area. Therefore, CIT(A) has erred in deleting the disallowance. The assessee has submitted before us that assessee had made a suo-moto disallowance in the Return of Income. AO had calculated disallowance under section 14A read with rule 8D after considering the suo-moto disallowance - AO has already considered the suo-moto disallowance made by AO. Accordingly, disallowance made under section 14A read with rule 8D is upheld - Decided in favour of revenue. 2024 (11) TMI 681 Validity of assessment without issuing notice u/s 143(2) - HELD THAT:- As regards the notice u/s 143(2) of the Act, it has been categorically mentioned in the statute that the AO shall serve on the assessee a notice requiring him on the date to be specified therein either to attend the Office of the AO or to produce or cause to be produced before the AO any evidence on which the assessee may rely in support of the return, provided that notice under Sub-section shall be served on the assessee after the expiry of six months from the end of the Financial Year in which the return is furnished. In the present case, return was furnished by the assessee in response to the notice u/s 148 of the Act on 22.03.2019 as mentioned in paragraph no.2 of the Assessment Order. Thus, the statutory notice to be issued u/s 143(2) has to be by 30th September, 2019. But, in the same paragraph of the Assessment Order, the notice under Section 143(2) of the Act was issued on 07.11.2019 which was delayed by more than one month and thus the statutory limit was not adhered by the Assessing Officer as per the provisions of Section 143(2) of the Act. The decision of Hon ble Supreme Court in case of Hotel Blue Moon [ 2010 (2) TMI 1 - SUPREME COURT] as well as the decisions of Nirali Specific Family Trust and Jignesh Bhagwandas Patel [ 2019 (7) TMI 751 - GUJARAT HIGH COURT] which are applicable in the present case to the extent that the statutory limit prescribed was not followed by the Assessing Officer. Assessee appeal allowed. 2024 (11) TMI 680 Estimation of income - disallowance of bogus purchases - AO made disallowance of entire amount of alleged bogus purchase but the CIT(A) has restricted the addition/disallowance in respect of bogus purchases to the extent of gross profit earned on non-bogus purchases at the rate of gross profit earned as following M/s. Mohd. Haji Adam Co [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT] - whether the CIT(A) was required to follow the decision of Hon ble Supreme Court in the case of N.K. Proteins Ltd. [ 2017 (1) TMI 1090 - SC ORDER] HELD THAT:- We do not find any infirmity in the order of the Ld.CIT(A), in following the binding precedent in the case of M/s. Mohd. Haji Adam Co., [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT] of the Hon ble jurisdictional High Court, instead of following the decision of the Hon ble Gujarat High Court in the case of N.K. Proteins Ltd. [ 2016 (6) TMI 1139 - GUJARAT HIGH COURT] SLP against which has been dismissed by the Hon ble Supreme Court summarily. Accordingly, the grounds raised by the Revenue are dismissed. 2024 (11) TMI 679 Addition u/s 68 on account of cash deposited - HELD THAT:- Admittedly, the case was selected for limited scrutiny regarding verification of the cash deposit from disclosed sources and the AO has confirmed the addition in respect of said cash deposit in two banks u/s 68 - As seen that the assessee has regularly been filing return of income u/s 44AD and is engaged in the retail business of trading in hardware and ceramics items in name of proprietorship concern M/s Muble Impex from Hyder Pora, Srinagar. From the record, it is noted that the AO while passing the order has accepted the return of income filed u/s 44AD in ITR/e-return U/s 44AD of the Act, filed on 16/05/2016. The AR has raised legal grounds that addition made for cash deposit u/s 68 is liable to be quashed in the absence of books of accounts. It is a settled law that the provisions of section 68 are only applicable where the assessee is maintaining books of accounts. From the record, it is very much evident that provisions of section 68 cannot be invoked in the present case where the assessee has filed the return u/s 44AD and not maintaining books of account. As in the case of Commissioner of Income-tax, Rohtak v. Smt. Kamlesh [ 2013 (2) TMI 296 - PUNJAB AND HARYANA HIGH COURT] has held that where return of income filed by the assessee has been accepted and there was no finding that transactions entered into by assessee were not genuine, in such a case, no further amount could be made taxable. ITAT AMRITSAR in the case of SH. SATBIR SINGH BHULLAR [ 2023 (3) TMI 356 - ITAT AMRITSAR] has followed the same view that addition u/s 68 cannot be made in the absence of books of accounts. In the instant case, the AO has accepted the return of income filed u/s 44AD and has not given any finding that the transactions entered into by the assessee were not genuine. Further, the assessee is registered with the Jammu and Kashmir Shops Establishment Act 1966 and as such, there is no doubt regarding the business being carried out by the assessee. Therefore, the AO has erred in invoking provisions of section 68 while making the addition. From the reconciliation statement furnished by the assessee, it is noticed that there are cash withdrawals from the same bank account which have not been considered by the Ld. CIT(A) while confirming the action of the AO, although the assessee has submitted the said reconciliation before CIT(A) and all the bank accounts along with relevant documents which were also submitted before us. In a judgment passed by Coordinate Bench in the case of Smt. Sanjeet Kanwar [ 2022 (8) TMI 939 - ITAT AMRITSAR] it was held that the assessee is ought to be given the telescoping benefit of withdrawals. In the present case, since the assessee has furnished the requisite bank statements which showed that there were deposits and withdrawals of almost equal amounts and AO and the CIT(A) failed to give any findings regarding said withdrawals, and hence, the assessee deserved to get benefit of telescoping and thus, addition was unjustified. We hold that the order of the Ld. CIT(A) suffers from infirmity and perversity to the facts on record. Therefore, the addition confirmed by the CIT(A) on account of unexplained cash deposits is deleted. Decided in favour of assessee. 2024 (11) TMI 678 Disallowance on the set apart fund u/s 11(2) and 11(5) - delay in filing of income tax return made by the AO - HELD THAT:- The assessee filed its audit report in Form No10B, Form No. 10 (For set apart of Rs. 15.00 lacs) and original income tax return within due date i.e. 31-10-2019 wherein it claimed exemption u/s 11(2) and 11(5) of the Act. Assessee submitted the copy of screen shot of Uploading Form No. 10 on 31-10-2019 and copy of screen shot of Uploading Form No. 10B on 29-10-2019 (PB 2 3). Assessee for ready reference also filed copy of Original ITR, Form No. 10 B and 10. AR mentioned in his written submission at page 10, para 1.3 14 that however, the income tax return was filed without digital signature and due to oversight and unavoidable circumstances the manual copy of ITR verification could not be sent at CPC, Bangalore within 120 days of submission of ITR. 14 Hence, subsequently assessee again filed revised return immediately after COVID restrictions were lifted, declaring the same income as shown in original return and verified the same through digital signature. The copy of revised return filed on 05-06-2020 is available - Bench noted that the CPC without going into the facts that Original Income Tax Return, Form 10 and Form 10B were submitted before filing of due date and merely filing of the revised ITR after the due date disallowed the set apart fund u/s 11(2) and 11(5) of the Act and thus raised demand of Rs. 2,91,070/-. Bench is of the view that CPC grossly erred in not considering the genuine hardship with the assessee and without considering the submissions dated 02-07- 2020 made by the assessee in response to notice issued under section 143(1) and without going into the fact has denied the benefit to the assessee u/s 11(2) - Bench has also gone through the CBDT Circular No. 3/2020 dated 13.7.2020 and after going through the said circular issued by CBDT, it is found that in the said circular relaxations has been given to those assesses whose ITR could not be verified for the assessment years 2015-16 to 2019-2020. Since the Assessment year of the assessee is covered under the said circular, therefore benefit of the said circular ought to have been given to the assessee. Hence, with the findings of the ld CIT(A). Thus the appeal of the assessee is allowed. 2024 (11) TMI 677 TP Adjustment - comparable selection - Assessee is a software solution provider, specializing in providing quality and customized IT solutions to several multinational clients in the banking, financial services and insurance HELD THAT:- Kals Information Systems Ltd. - As per functional difference and segmental data difference and hence, respectfully following the same we direct the AO to exclude this comparable and then compute the ALP. Infosys Technology Ltd. - It is to be excluded due to its huge incomparable size and scale. Admittedly, the Hon ble Karnataka High Court in the case of Acusis Software (I) (P) Ltd. [ 2018 (8) TMI 1885 - KARNATAKA HIGH COURT ] has also laid down a ceiling wherein it is held that comparable is to be excluded if the turnover is more than 10 times. This is the fact. Hence, we direct the TPO and AO to exclude Infosys Technology Ltd., as comparable and then compute the ALP. Bodh Tree Consulting Ltd. - The assessee s revenue are from software development services whereas the comparable has revenue from software services, products and from diversified services. This being covered issue by case of Kumaran Systems P. Ltd. [ 2016 (1) TMI 1273 - ITAT CHENNAI ] Respectfully following the same, we direct the TPO to exclude this as comparable for the purpose of computing PLI of the assessee. Sonata Software Ltd. - As aggregate related party transactions are roughly around 95 crores which is approximately about 40% of the total service income of Rs. 243.57 crores. As such, the said comparable is not a valid comparable and hence is directed to be excluded as it fails the RTP filter of 25% applied by the TPO. Grant of economic adjustments - We have gone through the data submitted in assessee s paper book and noted that neither the AO nor the DRP has considered granting of economic adjustment or working capital adjustment but principally assessee is entitled for working capital adjustment. Hence, respectfully following Co-ordinate Bench decision in the case of Foxteq Services India Pvt. Ltd. [ 2016 (9) TMI 1283 - ITAT CHENNAI ] and CMA CGM Shared Service Centre (India) Pvt. Ltd. [ 2019 (10) TMI 1598 - ITAT CHENNAI] we direct the AO / TPO to grant economic / working capital adjustment after verifying the numerical data. To this proposition, the ld.Senior DR has not objected. In term of the above, we restore this issue of working capital adjustment to AO/TPO and direct him to consider the numerical data and accordingly, decide the issue as per law. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Disallowance under Rule 8D(2)(ii), we noted that assessee could make a prima facie case that it has interest free funds available with it, but it is subject to verification by AO. The AO will verify the availability of interest free funds invested in instruments giving raise to exempt income. In case, the AO finds that investment is out of interest free funds available, he will not make any disallowance otherwise, he will decide as per law. Disallowance of expenses relatable to exempt income under Rule 8D(2)(iii), the AO has taken 0.5% of average value of investment and disallowed expenenses - Assessee stated that the interest free funds available will apply even to applicability of Rule 8D(2)(iii) i.e., 0.5% of average value of investment while computing disallowance. See Sintex Industries Ltd. [ 2017 (5) TMI 1160 - GUJARAT HIGH COURT ] as held t when the assessee had sufficient interest-free funds out of which concerned investments had been made, disallowance under Section 14A is not justified. Assessee stated that this income is claimed to be exempt u/s. 10A - As the assessee could not prove any nexus or any relation, we have no hesitation in confirming this disallowance. But, we set aside this disallowance of 0.5% of average value of investment to the extent the AO will verify that disallowance should be restricted only on the investments giving raise to exempt income and not others in view of the decision of Vireet Investments (P.) Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI ] Computation of deduction u/s 10A - exclusion of expenditure incurred in foreign currency from export turnover and non-exclusion of foreign onward remittance not received within the prescribed period from the total turnover - HELD THAT:- the assessee has filed the details in its paper-book in regard to exclusion of expenditure incurred in foreign currency from the export turnover and non-exclusion of foreign onward remittance, not received within the prescribed period from the total turnover. Assessee stated that this issue stood covered in favour of assessee by the Tribunal s decision in assessee s own case for the assessment year 2010-11 and also in regard to erroneous deduction of section 10A of the Act claimed due to exclusion of foreign currency expenditure from export turnover. On principle, we agree with the contention of the assessee but facts need to be verified. Hence, we restored this issue back to the file of the AO/DRP, who after verification of facts. Granting refund of levying interest u/s. 234D - AO has purposely added a sum by considering it as refund already paid to assessee and has also charged interest u/s. 234D - assessee made statement at bar that no refund whatsoever has been issued to the assessee or received by assessee as on date. When this fact was pointed out to ld.CIT-DR, he stated that issuance of refund can be sent back to AO and assessee could contact the AO who will consider this issue. In case, refund is issued, the AO will show evidence that the refund is issued or will rectify accordingly. This issue needs to be settled by the AO after verification. Insolvency & Bankruptcy 2024 (11) TMI 676 Maintainability of petition filed under Section 95 of the Insolvency and Bankruptcy Code, 2016 - legality of filing of petition under Section 95 of the Insolvency Code by the appellant - petitioner was a partnership firm registered under the Partnership Act, 1932 - Ministerial versus Adjudicatory - whether respondent No.1-Registrar could enter into realm of adjudication? - HELD THAT:- The conceptual and jurisprudential distinction between ministerial act and judicial act or administrative function and adjudicatory function came to be analysed elaborately, lucidly and pertinently by the Supreme Court in JAMAL UDDIN AHMAD VERSUS ABU SALEH NAJMUDDIN AND ANR. [ 2003 (2) TMI 509 - SUPREME COURT ]. Though slightly in different context, what was delineated and laid down by the Supreme Court provides a guidance to address the controversy involved in this case. It was in the context of presentation of election petition under Section 81 of the Representation of the People Act, 1951 that the Supreme Court discussed the difference between the ministerial function and adjudicatory function and further that by which authority and at which stage such functions, both of different kinds, could be performed. The gist of the plea raised by the appellant was the petition should have been presented either before the Designated Election Judge or the Chief Justice of the High Court and that having not been done, the petition was liable to be dismissed without trial. The Supreme Court considered the question as to whether the High Court was competent to frame rule for making provision for receiving the election petitions presented to the High Court under Section 81 of the Representation of the People Act. It is in that context that the Supreme Court elucidated the difference between ministerial act and adjudicatory act. It was observed, By no stretch of imagination can it be said that the presentation of an election petition is part of the trial of an election petition . The Supreme Court in Jamal Uddin Ahmad observed that the judicial function entrusted to a Judge is inalienable and differs from administrative or ministerial function which can be delegated for once whereof may be secured through authorisation. The status in the nature of duty discharged by respondent No.1-Registrar at the time of receiving the petition under Section 95 of the Code, satisfies the above tests. The Registrar has no discretion, but to receive and register the application once the procedural requirements are fulfilled. Registering Petition, a Ministerial Act - HELD THAT:- The Registrar of NCLT is necessarily part of the administrative segment of the Tribunal. As an administrative staff, the office of the Registrar would receive the applications filed under Section 95 of the Code along with the documentations presented therewith. The function of receiving the petitions which are filed or presented is a procedural stage. It is an administrative or ministerial function - The examination of the petition on merits for its maintainability or any such other stand point of merit, is foreign and alien at such stage. The aspect whether the petition presented with the Registrar is maintainable, is a part of merit and it necessarily travels in the realm of judicial function. The Registrar is not entitled to look into this aspect. There will be gainsaying that the Registrar of NCLT acting to receive the applications under Section 95 of the Code which was the stage of filing of the application, acts administratively. The function of registering the applications filed under Section 5 of the Insolvency Code is a ministerial function and a procedural act. This stage does not store any adjudicatory process - Application of judicial mind towards merits has no place in discharge of a ministerial or clerical function. For the Registrar, it is not permissible at the time of registering the petition which is filed by the debtor or creditor. The case as pleaded by the applicant-appellant in its application under Section 95 of the Insolvency Code filed before the NCLT had definite adjudicatory element and demonstrable adjudicatory trappings. Jiwrajka Finally Answers [ 2024 (1) TMI 33 - SUPREME COURT ] - HELD THAT:- The issue as to whether when the adjudicating function commences under the Insolvency and Bankruptcy Code, 2016 could be said to be no longer res integra in view of the judgment of Supreme Court in Dilip B. Jiwrajka. The Supreme Court stated therein as to when the adjudicatory function of adjudicatory authority commences. It was held that adjudicatory function of adjudicatory authority commences under Part III of the Code, 2016 after submission of a recommendatory report by the resolution professional. In challenging the constitutional validity of Section 95 to Section 100 of the Code, 2016 which was negatived by the Supreme Court, the same nature of submissions were advanced on behalf of the petitioners before the Supreme Court - Inasmuch as without judicial intervention for adjudication, there would operate an automatic interim moratorium, for the resolution professional would be appointed who would seek from the guarantor and would examine the information received and then submit report. Adjudicatory Stage Subsequent - HELD THAT:- It is an inescapable conclusion that even the stage when the resolution professional functions together the information to prepare the report to be submitted to the adjudicatory authority-NCLT, the adjudicatory stage does not reach and no adjudication of rights of the parties takes place. Therefore, it could not be said at any stretch of imagination that the Registrar, NCTL, while accepting or receiving the petition under Section 95 of the Code, 2016 has any adjudicatory permission, much less such power, or that at such stage of filing petitioner, adjudication can take place in any manner whatsoever. Moratorium A Statutory Effect - HELD THAT:- If for the reason of filing Section 95 application, other proceedings initiated by the rival party in relation to the subject matter are slowed down or affected in their progress or stand postponed for some period, then it could not be complained that the invocation of law or remedy in law by other party amounts to abuse of process of law. A litigant is entitled to employ all legal means in pursuit to its right to legal adjudication and availment rights in that regard. This negates the submission on the part of the respondent-original petitioner that the filing of Section 95 application by the applicant had an effect of protracting and postponing the arbitral proceedings. Prayers Misconceived - HELD THAT:- It is therefore clear that the stage of filing application under Section 94 or Section 95, is too preliminary a stage to perceive and conceive any adjudicatory attribute at that stage. The Registrar of the NCLT would receive and register the petition. Thereafter, the subsequent provisions from Sections 96 to 100 of the Code would operate. The resolution professional would examine the application as to whether it satisfies the requirements of Section 94 or 95, as the case may be, to recommend the acceptance or rejection of the application by submitting a report - it is impossible to conclude that the Registrar at the stage of receipt of the petition filed under Section 94 or 95 of the Code by the debtor or creditor, which is a stage even prior to Section 97 and 99 of the Code can decide on the maintainability of the petition by entering into merit and thus the realm of adjudication. The issue examined is only as to whether at the stage of receipt of the petition under Section 95, the Registrar, NCLT- respondent No.1, has power and jurisdiction to decide on the maintainability of such application and whether by adjudicating merits on that score at that stage, the petition could be rejected by the Registrar - All such questions of merits fall within the domain of adjudicating authority-the NCLT to be considered at the appropriate stage when the report of the resolution professional is forwarded to it. The judgment and order of learned Single Judge dated 6th March 2024 passed in writ petition No.26977 of 2023, allowing the petition, is hereby set aside - Appeal allowed. 2024 (11) TMI 675 Dismissal of application of the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016 - application under Section 9 was not admitted on the grounds of pre-existing dispute as the material supplied by the Operational Creditor was from a tainted source - HELD THAT:- In the facts and circumstances of the case it is undisputed that the Corporate Debtor was demanding NOC from the Operational Creditor, through various emails and legal notice to enable him to register the copyright of TVC, which the Operational Creditor has failed to provide. Clause 26 of the Terms and Conditions stipulated in the proforma invoice, without any exception, state that LKSS or Producer will provide the necessary NOC or any other paper which may require for the IP registration to the Client. . The Appellant Operational Creditor has failed to provide the NOC and the Corporate Debtor was unable to register the copyright. It is noted that the dispute was real and genuine, and not moonshine or feeble, and is supported by evidence, and also that the Corporate Debtor, despite having made substantial payment as advance, had not used the TVC in absence of copyright. The correspondence and dispute regarding issuance of NOC is prior to the issuance of notice under Section 8 of the IBC, and thus, qualifies to be treated as pre-existing dispute , which is a valid ground for rejection of application under Section 9 of the IBC. The Ld. NCLT had rightly rejected the application under Section 9 of the IBC and we do not find any merit in this appeal - The appeal is accordingly dismissed. 2024 (11) TMI 674 Challenge to proceeding under Section 9 of I B Code of 2016 - direction to Respondent to settle the balance claim of the Petitioner/Appellant herein within three months - HELD THAT:- The appellant has disputed the quantification of the amount payable, by the respondent and has contended that, the full amount as per the claim raised under Section 8 demand notice under I B Code, 2016 has not been remitted and that the amount deposited is on the basis of the order of MSEFC dated 13.09.2021, which does not appropriately satisfy the demand raised by the appellant in Section 8 demand notice. Since there is a dispute in respect of the size of the claim between the Appellant and the Respondent, and if the Appellant feels that the directions given by the Hon ble NCLT, in its order dated 31.03.2021 to the respondent to settle the claim of the Appellant within three months has not been complied with, the Appellant can very well approach the Ld. NCLT with an appropriate application to redress his grievances including determination of the amount that needs to be paid by the Respondent for which the Ld. NCLT has already granted liberty. Since the issue involves consideration of evidence and facts, and also scrutiny of documents to arrive at the balance amount to be paid to the Appellant and also consideration of the order dated 13.09.2021 of MSEFC, Chennai Region, it is best done at the level of Hon ble NCLT, Bengaluru Bench, which has itself left it open for the Appellant to re-approach it, to raise his grievances if, he is dissatisfied with the amount, which has been paid by the Respondent - The issue of determination of amount is still left wide open to be decided by the Hon ble NCLT. The appeal lacks merit and the same is accordingly dismissed . 2024 (11) TMI 673 Violation of principles of natural justice - Propriety of the impugned order - ex-parte order - order rendered without providing an adequate opportunity of hearing - HELD THAT:- The contentions of the Appellant that, his application preferred under section 60(5) of the I B Code to be read with the rule 49(2) of the NCLT rules, should have been taken up for consideration and for decision prior to IA(IBC)/202/2023 is un-called for, for the reason being that the CIRP proceedings as initiated by the order of 12.04.2023 has already been given effect to, and moratorium contemplated under section 14 of the I B code, 2016 has already been enforced. Further, the fact that the Corporate Debtor had already vacated the premises about four years back and that the inferences drawn upon the inspection of the records as available with the RoC, and as per the share allotment letter of 08.01.2018 pointed to the need for considering the application under section 19(2) of the Code, on a priority basis so as to facilitate CIRP proceedings already ordered to be carried out in a move effective manner. The dismissal of the application preferred by the appellant, being IA(IBC)204/2023, on the ground that no adjudication on merits is required to be made on the said application, because of the order passed on IA No. 202/2023, is absolutely justified, because section 60(5) will not have a superseding effect to the provisions contained under section 19(2) to be read with section 14 of I B code, 2016 for the purpose of effective conduct of CIRP proceedings. The order passed on IA No.204/2023 cannot be said to be an ex-parte order, contrary to the claim of the Appellant for the reason being that according to the Appellant's own case, a counsel was engaged by him, who did not file vakalathnama or counter affidavit and in the absence of there being any effective assistance being provided by the Appellant herein to the Learned Adjudicating Authority, the Learned Adjudicating Authority, by order of 29.08.2023, directed the matter to be proceeded ex-parte. There are no merits in the appeal and the same would accordingly stand dismissed . 2024 (11) TMI 672 Admission of Section 9 petition against the Corporate Debtor - initiation of Corporate Insolvency Resolution Process - dispute of dues - pre-existing disputes which were wrongly overlooked by the Adjudicating Authority - whether payment to the Operational Creditor was due from the Corporate Debtor giving rise to an operational debt? - whether a default has been committed by the Corporate Debtor in respect of payment of such operational debt having already become due and payable? - whether the said operational debt exceeds the threshold level and is an undisputed debt? HELD THAT:- The Operational Creditor has placed material on record which shows that in response to their email dated 17.12.2020 as placed at page 929 of Appeal Paper Book (APB), the Corporate Debtor in their reply email dated 21.12.2020 as placed at page 927 of Appeal Paper Book clearly admitted that they had made total imports of about USD 70 million during the period from 2016 to November 2020 against which they had paid only USD 57 million to the Operational Creditor. It was however contended by the Corporate Debtor that the Adjudicating Authority had not taken cognisance of the fact that the alleged balance confirmation dated 03.03.2021 was issued on the insistence of the Operational Creditor with the limited purpose of disclosure. The Corporate Debtor had admitted the operational debt and held adverse cash-flow to be the cause for non-payment of the operational debt and as such no dispute with the Operational Creditor was attributed for non-payment of the same - The tone and tenor of the email clearly shows that that the Corporate Debtor while admitting the debt had shown their commitment to participate with the Operational Creditor in building their brand presence in India thereby showing that there was no dispute between the parties on the business dealings. The contention of the Corporate Debtor that only part of the debt has been admitted by the Corporate Debtor does not hold ground as long as the admitted debt which has been admitted is clearly above the prescribed threshold limit of Rs 1 cr. The Corporate Debtor has duly admitted the outstanding debt and default which is a valid and proper admission in the eyes of law. In the attendant facts and circumstances, no error was committed by the Adjudicating Authority in admitting the application for initiating CIRP. It is noticed that even at the stage of notice of dispute, the Corporate Debtor has only mentioned about some agreement of 04.10.2016 and subsequent agreement of 01.09.2018 while there is no mention of the agreement of 21.07.2015. It is therefore a misleading statement made by the Corporate Debtor that the agreement of 21.07.2015 finds mention in the Notice of Dispute - In the present case, the Adjudicating Authority went ahead to ignore the disputes between the parties while admitting the Section 9 application. Thus, no material has been placed on record by the Corporate Debtor to show that they had categorically rejected the outstanding dues claimed by the Operational Creditor prior to issue of demand notice. There is no evidence of any outright denial of the liability to pay which has been placed on record by the Corporate Debtor. Furthermore, it is noticed that Corporate Debtor while admitting the outstanding debt had also admitted in the same breath that they were working to promote the global presence of the Operational creditor in India which affirms that there were no differences between them with regard to the agreement basis which they were conducting their business operations - no real preexisting dispute is discernible. There is no good ground to establish any real and substantial pre-existing dispute which can thwart the admission of section 9 application against the Corporate Debtor. The Adjudicating Authority therefore does not appear to have committed any error in holding that all requisite conditions necessary to trigger CIRP under Section 9 stands fulfilled. The Appellant has defaulted in the payment of operational debt which amount had clearly become due and payable above the threshold limit, and further in the absence of any credible or plausible pre-existing dispute, it is found that no error has been committed by the Adjudicating Authority in admitting the application under Section 9 of IBC and initiating CIRP. There are no merit in this Appeal - Appeal is dismissed. 2024 (11) TMI 671 Dismissal of application for refund of payment made, under protest, towards pre-CIRP electricity dues by the Successful Resolution applicant (SRA) to the Respondent, for the restoration of the Corporate Debtor s electricity connection, in order to revive the Corporate Debtor in terms of, and in compliance with, the Resolution Plan - scope of Section 60(5)(c) of the IBC - HELD THAT:- The submissions made by the Respondent cannot be agreed upon as the Resolution Plan related to revival of sugar crushing factory located in Distt. Parbhani, Maharashtra. Admittedly a sugar crushing factory is operational generally for six months in a year during the crushing season from November to April and during this time electricity connection is crucial for the operation of its factory as without it the factory could not operate and may come to a standstill. The correspondence would rather reveal there was no option left for the appellant except to adhere to the demands raised by the Respondent lest the Respondent would not provide electricity in the coming sugar cane crushing season. Thus the payment of pre-CIRP dues by the appellant was paid under protest and under protection of the order of the Ld. NCLT and thus it related to the revival of the Corporate Debtor in terms of the Resolution Plan and to the Insolvency Resolution Process, hence the claim for refund of such amount is a matter which can be adjudicated under Section 60(5)(c ) of the IBC. In Tata Power Western Odisha Distribution Ltd (TPWODL) Anr Vs Jagannath Sponage Pvt Ltd, [ 2023 (9) TMI 1071 - SC ORDER ] and further in Southern Power Distribution Company of Andhra Pradesh Ltd Vs Gavi Siddeswara Steels (India) Pvt Ltd and Another [ 2023 (9) TMI 664 - SC ORDER ], the Hon ble Supreme Court held the power distribution company cannot insist on the payment of arrears for the purpose of the restoration of the electricity connection and such a matter would fall within the ambit of Section 60(5)(c) of the IBC. It is crucial to note the Respondent without having filed any claim during the CIRP or having challenged the Resolution Plan is trying to benefit from its own default. The Resolution Plan provided for the payment of the Operational Creditors at an amount which was around 7% of the admitted claim. If the Respondent had filed its claim as an operational creditor it would have received rs.10.5 lakhs but today the Respondent had received Rs.2.11 crores towards the pre-CIRP dues - the Respondent cannot be permitted to benefit from its own failure to file the claim and coercing the appellant to pay pre-CIRP dues for restoring the electricity. Even if the payment was not made by the appellant under protest and so was made only because of compulsion due to the coming season then also the Respondent was barred from seeking arrears of the amount that stood extinguished by operation of law as a precondition for restoring the appellants electricity connection. Thus, it is evident the issue is squarely covered by Tata Power [ 2023 (9) TMI 1071 - SC ORDER ] and Southern Power Distribution Company [ 2023 (9) TMI 664 - SC ORDER ] and pertains to a dispute arising out of the non-compliance of the Respondent of para 30 of order dated 07.11.2019 whereby the NCLT had directed the restoration of all approvals and licenses. The present matter thus falls under Section 60(5)(c ) of IBC since it relates to the insistence of the Respondent for payment of pre-CIRP amounts that stood extinguished by way of the Resolution Plan. The impugned order is set aside - Appeal allowed. PMLA 2024 (11) TMI 670 Seeking grant of regular bail - Money Laundering - predicate offence - misuse of position to appoint and engage relatives and other known persons to various posts in the DWB, from which they derived pecuniary benefits - HELD THAT:- A plain reading of Section 45 of the PMLA shows that the public prosecutor must be given an opportunity to oppose the application and the Court should have reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail. The twin conditions though restricts the right of accused to be released on bail but do not impose absolute restraint and the discretion vests in the Court . Section 45 of the PMLA while imposing additional conditions to be met for granting bail, does not create an absolute prohibition on the grant of bail. When there is no possibility of trial being concluded in a reasonable time and the accused is incarcerated for a long time, depending on the nature of allegations, the conditions under Section 45 of the PMLA would have to give way to the constitutional mandate of Article 21. What is a reasonable period for completion of trial would have to be seen in light of the minimum and maximum sentences provided for the offence, whether there are any stringent conditions which have been provided, etc. It would also have to be seen whether the delay in trial is attributable to the accused. The issue of long incarceration and right of speedy trial also cropped up in Manish Sisodia v Directorate of Enforcement [ 2024 (8) TMI 614 - SUPREME COURT] , wherein it has been held by the Supreme Court that the right to bail in cases of delay in trial, coupled with long period of incarceration would have to be read into the Section 439 CrPC as well as Section 45 of PMLA while interpreting the said provisions. Prem Prakash v. Union of India through the Directorate of Enforcement [ 2024 (8) TMI 1412 - SUPREME COURT ], is another recent decision where it has been reiterated that the fundamental right enshrined under Article 21 cannot be arbitrarily subjugated to the statutory bar in Section 45 of the Act and the constitutional mandate being the higher law, the right to speedy trial must be ensured and if the trial is being delayed for reasons not attributable to the accused, his incarceration should not be prolonged on that account. The view taken in the Manish Sisodia and Prem Prakash cases was reiterated recently by the Supreme Court in the case of Vijay Nair v. Directorate of Enforcement [ 2024 (9) TMI 321 - SC ORDER ], where it was held that liberty guaranteed under Article 21 of the Constitution does not get abrogated. In a situation such as the present case, where there are multiple accused persons, thousands of pages of evidence to assess, large number of witnesses to be examined, the trial is not expected to end anytime in the near future and the delay is not attributable to the accused, keeping the accused in custody by using Section 45 PMLA a tool for incarceration or as a shackle is not permissible - The accused in a money laundering case cannot be equated with those punishable with death, imprisonment for life, ten years or more like offences under the Narcotic Drugs and Psychotropic Substances Act, 1985, murder, cases of rape, dacoity, etc. As held in the catena of judgements, Constitutional Courts have the power to grant bails on the grounds of violation of Part III of the Constitution and Section 45 does not act as an hindrance to the same. The sacrosanct right to liberty and fair trial is to be protected even in cases of stringent provisions present in special legislations. Considering the totality of the facts and circumstances, the fact that the main accused is out on bail, the period of custody undergone, the likelihood of supplementary challan being filed qua the main accused and that the trial has been stuck at the stage of supply of documents under Section 207 Cr.P.C., keeping in mind the import of the catena of decisions of Supreme Court discussed hereinabove, it is directed that the applicant be released on regular bail subject to him furnishing respective personal bond in the sum of Rs. 1,00,000/- with one surety of the like amount to the satisfaction of the concerned Jail Superintendent/concerned Court/Duty J.M./link J.M. and subject to the fulfilment of further conditions imposed - bail application allowed. Service Tax 2024 (11) TMI 669 Jurisdiction of the respondent authorities to issue the show cause notice Service tax demand on Works Contracts with respect to Road Building Department/Irrigation Department/Public Health Engineering Wing - petitioner is an approved E-1 (class contractor) - HELD THAT:- It is evident that the petitioner was not at all liable for service tax and the respondent authorities could not have assume the jurisdiction to issue the show cause notice on the basis of the data provided by the Income Tax Department in Form-26AS and thereafter failed to consider the details provided by the petitioner in reply to the show cause notice. No justification is given in the impugned show cause notice as well as the order-in-original for assumption of jurisdiction by invoking extended period of 5 years under the priviso to sub-section-1 of section 73 of the Finance Act, 1994. The impugned show cause notice is not tenable as the same is issued without jurisdiction and consequently the order-in-original also would not survive. The petition is accordingly succeeds. 2024 (11) TMI 668 Service tax demand - invoking the extended time proviso - Goods Transport Agency services - appellant are availing the facility of CENVAT Credit on input, input services in capital goods used in the manufacture of their finished products - HELD THAT:- We are of the view that the matter is no longer res integra as this Tribunal in case of PSL Limited [ 2014 (11) TMI 84 - CESTAT AHMEDABAD] has already decided this matter in favour of the appellant as held it is apparent that till the point of time Section 73 of the Finance Act, 1994 came to be substituted w.e.f. 10-9-2004 provisions of the said Section could not be made applicable despite retrospective amendment in Sections 68 and 71A of the Finance Act, 1994. In these circumstances, admittedly, the assessee could not be faulted with for not having filed a return after getting himself registered. More particularly, when one considers the language employed in the proviso below sub-section (1) of Section 68 and the provisions of Section 71A of the Finance Act, 1994, it is not possible to state that the language of the Statute is so clear that any default can be fastened on the respondent-assessee. Thus, we find that the entire demand under the impugned show cause notice is barred by period of limitation and therefore, we find no merit in the impugned Order-In-Appeal. Accordingly, we set aside the same. 2024 (11) TMI 667 Service tax on discount/ incentive from the vehicle manufacturer by the appellant being the dealer - appellant being a dealer, purchase the vehicles from M/s Maruti Suzuki India Private Limited/ M/s Renault India Private Limited and subsequently, sell the same to the various customers - HELD THAT:- The vehicle manufacturer M/s Maruti Suzuki India Private Limited/ M/s Renault India Private Limited on the basis of yearly performance of sale grants the discount to the dealer, this discount is nothing but a discount in the sale value of the vehicle sold throughout the year therefore, these sales discount in the course of transaction of sale and purchase of the vehicles, hence, the same cannot be considered as service for levy of service tax. This issue is no longer res-integra as the same has been decided in the various judgments cited by the appellant. See B M Autolink [ 2022 (12) TMI 12 - CESTAT AHMEDABAD] Booking cancellation charges - There is no provision of service made towards such cancellation. In the case of Divine Autotech Private Limited [ 2024 (6) TMI 1329 - CESTAT NEW DELHI] it was held that booking cancellation charges for motor vehicles received by Appellant is in the nature of compensation and not consideration for service. Further the CESTAT placed reliance on Circular No. 178/10/2022-GST dated August 3, 2022 wherein the issue of cancellation charges has been dealt with at length. Therefore, no service tax could be charged on them. The amount received as discount/ incentive from the vehicle manufacturer by the appellant being the dealer is not liable to service tax and service tax is also not leviable on the booking cancellation charges. 2024 (11) TMI 666 Service tax demand on considerations received on account of reimbursable expenditure - HELD THAT:- We find that the appellant has been reimbursed all the medical expenses. In case of the dog squad expenses, the dogs belonged to M/s. NRL and the maintenance cost towards the squads has been reimbursed by M/s. NRL. Similarly, in the case of donation/financial grants received for celebration of Republic Day and Independence Day, whatever expenses were incurred by CISF/appellant, were reimbursed by M/s. NRL. These details show that the amounts paid to the appellant were not in the nature of any consideration towards any of the said services provided by them. The issue is squarely covered by the decision of the Hyderabad Bench of the CESTAT in their own case [ 2024 (5) TMI 565 - CESTAT HYDERABAD] wherein as held that reimbursement expenses are not to be added to the gross value for arriving at the Service Tax payable. Extended period of limitation - Also see considerable force in the argument of the Appellant that the confirmed demand for the extended period is hit by time bar. The Appellant is a reputed Government of India Undertaking, working under the Ministry of Home Affairs. They cannot be said to have any intention to evade the Service Tax payment. Thus the appeal filed by CISF has been allowed on merits and also on account of limitation. 2024 (11) TMI 665 Service tax liability on sale of imported tally software - invoking extended period of limitation - Appellant is the distributor for marketing and installation of tally software on behalf of seller hold the intellectual property right and copy rights; product alone is transferred to the Appellant. Demand of duty by invoking the extended period of limitation from 16.05.2008 to 30.09.2008 - HELD THAT:- Once penalty imposed by Adjudication authority under Section 78 was dropped by the Appellate authority on the ground that there does not seems to be the presence of guilty mind warranting penalty under Section 78 of the Finance Act, 1994 and when said finding has not been challenged by the revenue, following the decision of the Tribunal in the matter of M/s Frankie Fabric India Ltd [ 2017 (2) TMI 482 - CESTAT MUMBAI] demand of Service Tax by invoking the extended period of limitation from 16.05.2008 to 30.09.2008, is not sustainable. Service tax demand - The software imported and sold by the Appellant is import and sale of goods and is not exigible to service tax. Goods imported and sold in downloaded form through Internet , as per the judgment of the Hon ble Supreme Court in the case of M/s Tata Consultancy Services [ 2004 (11) TMI 11 - SUPREME COURT (LB)] the moment copies are made and marketed, it became goods which are subject to sales tax. Demand against upgradation of software , as per the decision of M/s Quick Heal Technologies Ltd [ 2022 (8) TMI 283 - SUPREME COURT] once lumpsum has been charged for the sale of CD as involved in present appeal and sale tax has been paid thereon, Revenue thereafter cannot levy service tax on the entire sale consideration once again on the ground that updates are being provided. Thus, it is well settled that once Appellant had paid VAT on the sale of goods, service tax cannot be demanded on such sale of goods. Central Excise 2024 (11) TMI 664 Classification of goods - end product emerging after certain processing undertaken on dry dates - classifiable under sub-heading No.080410300 or 20089999 of the Central Excise Tariff - processes undertaken on dry dates amount to manufacture under the Central Excise Act - process of washing, pressing, deseeding, cutting, drying in oven, sieving and packing resulted in the production of new product in respect of dry dates or not - denial of SSI exemption Notification No.08/2003-CE dated 01.03.2023 - imposition of penalty under Section 11AC of the Central Excise Act, 1944. Whether the end product emerging after certain processing undertaken on dry dates is classifiable under sub-heading No.080410300 or 20089999 of the Central Excise Tariff? - HELD THAT:- It is found that the said product was sold as dry dates cut or dry dates chura in the packing of 25 Kg or 50 Kg as shown on invoices issued by the Appellant. The Appellant has contented that the product emerging after the above processes is again dry dates and as such classifiable under Sub-heading 08041030 as dry dates while the Department has viewed that the end product is processed dry dates different from dry dates and is classifiable under Sub-heading 20089999 of the Central Excise Tariff as prepared fruit. The classification of an item in the Central Excise Tariff is regulated in accordance with the principles enunciated in General Rules for Interpretation (GIR). Rule 1 of GIR provides that classification shall be determined according to the terms of the headings and any relative Sections or Chapter Notes. If the goods to be classified are covered by the words in a heading and the Section and Chapter Notes do not exclude classification in that heading, the heading applies - As per GIR if goods are ambiguous and two or more headings appear to be applicable, then Rule 3 should be applied which provides that specific heading should be preferred to general heading. Rule 3 of GIR provides, when by application of sub-rule (b) of rule 2 or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as given in rule 3(a), 3(b) or 3(c) . The heading which provides most specific description shall be preferred to heading providing a general description as held in CCE Vs. Maharshi Ayurveda Corp Ltd. [ 2005 (12) TMI 93 - SUPREME COURT] , where it has been held that as per Rule 3(a) of GIR, the heading which provides specific description should be preferred to heading which provides general description. It may further be seen that HSN 2008 covers only those fruits, nuts and edible parts of plants which are not specified elsewhere. For dry dates, there is specific entry under SH 0804 of the Central Excise Tariff. Hence, dates without seeds and dried in oven are again dates. So, it would be classifiable under SH 0804 of the Central Excise Tariff. The product emerging subsequent to the processes undertaken by the Appellant can be consumed as such. Going by the entry of Chapter-08, we are of the considered view that the product can rightly be classified as dry date. When the product is covered under Chapter -08, the need to go to the Chapter-20 which is residuary in nature does not arise. Therefore, the contention of the Appellant to classify the processed dry dates under Chapter-08 attracting nil rate of duty, fully agreed upon. Whether the process of washing, pressing, deseeding, cutting, drying in oven, sieving and packing resulted in the production of new product in respect of dry dates? - HELD THAT:- The Appellant carried out washing with water for dust removal from dry dates, breaking dry dates for removal of seeds, removing seeds from dry dates, cutting deseeded dry dates into small piece, such small pieces of deseeded dry dates are subjected to oven drying for removal of moisture which occurred during washing, for getting requisite size sieving of moisture free dates is undertaken and thereafter packing in 25 Kgs and 50 Kgs bags for sale - according to Chapter Note 7 of Chapter 20, the processes undertaken by the Appellant amounts to manufacture under deemed concept even if the said processes do not amount to manufacture under general concept. This view is incorrect inasmuch as that after subjecting the above processes, the end product remains the same in regard to characteristics, name and quality. Sub heading 2008 of the Central Excise Tariff covers only those fruits which are not classifiable elsewhere. As dry dates in all forms find entry in Chapter 8 of the Central Excise Tariff, it would not be classifiable under SH 2008. When the item does not fall under Chapter 20, there is no applicability of Chapter Note-7 of Chapter 20. SSI exemption - HELD THAT:- SSI exemption has been denied to the Appellant on the ground that value of clearances of cut dry dates and chura dry dates is required to be included for determination of aggregate value of clearances as the said goods were dutiable excise goods. Since said goods namely cut dry dates and chura dry dates were fully exempted from excise duty as processes undertaken thereon were not amounting to manufacture, the value of clearances of such cut dry dates/chura dry dates would not be includible for determination of aggregate value. Thus, denial of exemption granted under SSI exemption Notification is improper and not sustainable. Imposition of penalty under Section 11AC of the Central Excise Act, 1944 - HELD THAT:- It is found that the same is leviable proportionate to duty amount confirmed. If no duty is confirmed, no penalty would be imposable under Section 11AC of the Central Excise Act, 1944. In this context reference made to the decision of the Tribunal in the case of Deek Printers [ 2013 (9) TMI 278 - CESTAT AHMEDABAD ] wherein it has been held that in case demand is not sustainable, penalty would not be imposable. Hence, in the present case, no penalty is imposable. The impugned order is set aside - appeal allowed. 2024 (11) TMI 663 Reversal of common Cenvat Credit for exempted goods - demand of 5/6% of the value of exempted goods - HELD THAT:- It is seen that the impugned order has been passed by the Adjudicating Authority as per the directions of the this Bench vide Final Order No. A/55751/2016 dated 08/12/2016 [ 2016 (12) TMI 841 - CESTAT NEW DELHI] . In this Order, the Tribunal has held ' the failure of the appellant to follow the procedure perfectly should not come in the way of extending the substantial benefit of proportionate reversal. However, we find that in the order passed by the lower authority, he has not given any finding as to whether the reversal already made satisfies the test of proportionate reversal in terms of quantum of reversal. Hence, we are of the considered opinion that the matter is to be remanded to the original adjudicating authority to verify whether the amount of Cenvat credit already reversed along with interest satisfies the requirement of proportionate reversal.' It is seen from the impugned order that the Adjudicating Authority has verified all the documents placed before him and has passed very detailed order. He has considered the Cost Account s Certificates and has relied on the decision of Hyderabad Tribunal in the case of Aster Pvt. Ltd. Vs. Commr. of Central Excise, Hyderabad [ 2016 (6) TMI 866 - CESTAT HYDERABAD] Madras High Court in the case of Pepsico holdings [ 2015 (8) TMI 249 - MADRAS HIGH COURT] to come to conclusion that demand of 5/6% of the exempted value is not legally sustainable. The Adjudicating Authority has followed the directions of this Tribunal s Order and applied the ratio of the relevant case laws and all the facts were verified by the Range office. Only after this he has passed the impugned order in a considerable detailed manner. There are no reason to interfere with the same - the appeal filed by the Revenue dismissed. CST, VAT & Sales Tax 2024 (11) TMI 662 Dismissal of appeal for want of compliance of pre-deposit order passed by it without considering the merits of the assessee s case on the issue of pre-deposit - failure to appreciate that in view of the approval of input tax credit by the First Appellate Authority the entire tax demand become otiose - insistence for further payment towards pre-deposit and grant of any stay against recovery - HELD THAT:- It appears that the Tribunal ought to have taken into consideration the appellate order whereby, the brought forward towards Input Tax Credit of Rs. 1,12,01,251/- was permitted for the period under consideration i.e. 2014-15 and the appellant ought to have been directed to block such credit of Rs. 18,00,000/- out the said brought forward Input Tax Credit for consideration of the appeals on merits. The appellant shall file an undertaking on affidavit before the Tribunal that the appellant shall not utilize the block Input Tax Credit amounting to Rs. 18,00,000/- from the input tax amounting to Rs. 1,12,01,251/- duly carried forward from Financial Year 2013-14 to 2014-15 which is available for utilization and shall not utilize such credit amount till the time the appeal is decided by the Tribunal - Upon filing such undertaking by the appellant before the Tribunal, the Tribunal shall hear the Second Appeal No. 813/2019 on merits. In view of the disposal of the appeal, Civil Application as well Special Civil Application would not survive and the same are accordingly disposed of.
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TMI Tax Updates - e-Newsletter November 16, 2024

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Income Tax

Company name change deemed a curable defect, but penalty order issued beyond time limit quashed.

Pandemic cited for incorrect advance tax estimation; Interest waiver plea remanded.

Share premium received on issue of shares below fair market value: Assessee's choice of valuation method binding.

Tax assessment order wrongly cited; clarification accepted. Petition challenging it dismissed.

Homebuyer compensated by builder for delayed property handover.

Flat Purchase: Stamp Duty vs. Sale Consideration Discrepancy Scrutinized.

Tax deducted but not deposited: Assessee not liable for recovery.

Office premises sale treated as long-term capital gain; eligible for 54F exemption.

Cash deposits from retail business without books allowed; no addition u/s 68.

Software solutions provider's transfer pricing adjustments, disallowances reconsidered - comparables scrutinized, economic adjustments allowed.

Customs

Customs port Chhara in Gujarat added for import/export operations.

Revised tariff values for edible oils, brass, areca nut, gold & silver imports effective Nov 15.

Jajpur designated as Inland Container Depot for loading/unloading goods in Odisha.

Epichlorohydrin imports from China, Korea & Thailand face anti-dumping duty for 5 yrs to protect domestic industry from dumping, price undercutting.

Customs rules amended: Pimpri's Inland Container Depot deauthorized for loading/unloading goods in Maharashtra.

IBC

Registrar's role ministerial, can't adjudicate maintainability of insolvency petition filed under IBC.

Operational creditor's Section 9 appeal dismissed over pre-existing copyright NOC dispute.

Firm admits unpaid operational debt, cash crunch cited; pre-existing disputes unsubstantiated. CIRP rightly initiated u/s 9 IBC.

Revival of Corporate Debtor halted by power utility's insistence on pre-CIRP dues; Supreme Court decision followed.

PMLA

Money laundering accused granted bail considering constitutional rights, prolonged incarceration, and delayed trial.

Service Tax

Vehicle dealer's discounts, incentives from manufacturers & booking cancellation fees are not taxable services.

Govt undertaking wins tax battle over reimbursements for medical, dog squad & event costs.

Imported software sale taxability: When goods, not service.

Central Excise

Dry date processing saga: Exemption upheld, penalty quashed.

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TMI Tax Updates - e-Newsletter
November 16, 2024