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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter November 28, 2024 Case Laws in this Newsletter: GST Income Tax Insolvency & Bankruptcy Service Tax Central Excise Indian Laws Articles Classification of Clear Float Glass: CTH 7005 1090 or CTH 7005 2990? EXTENSION OF MANDATE OF ARBITRAL TRIBUNAL. Excessive payment u/s 40A(3) are not disallowed incase business expediency and identity and genuineness of parties is proved ITC is available on inward supply of motor vehicles used for demonstration purpose Hydrated Lime/Slaked Lime containing less than 98% of the Calcium Oxide and Calcium Hydroxide classifiable under CTH 2522 20 00 News Advisory: Authorised e-Invoice Verification Apps Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Madhya Pradesh Advisory for Reporting TDS Deducted by scrap Dealers in October 2024 PAN 2.0: A Digital Leap in Taxpayer Services CCI approves the proposed acquisition of shares in Rebel Foods Private Limited by Jongsong Investments Pte. Ltd. CCI approves the acquisition of additional securities of DMI Finance Private Limited by MUFG Bank, Ltd. CCI approves the proposed combination involving the acquisition of standard unsecured personal loans portfolio of Standard Chartered Bank, India Branch by Kotak Mahindra Bank Limited. CCI approves transaction involving subscription of shares of Flipkart Private Limited by Shoreline International Holdings LLC CCI approves the acquisition of Fosroc Top One Limited, Fosroc Top Two Limited, and Fosroc Supply FZE by Starcin Holding France SAS (Starcin) CBDT’s PAN 2.0 Project to streamline and modernise process of issuing and managing PAN and TAN, making it simpler, more user-friendly and efficient Notifications GST S.O. 5063(E) - dated 26-11-2024 - CGST Amendment in Notification number S.O.3048(E), dated the 31st July, 2024 GST - States GHN-53)/GST-2024/S.9(3)(24)/GST Cell - dated 12-11-2024 - Gujarat SGST CORRIGENDUM - Notification No.(GHN-43)/GST-2024/S.9(3)(24)/GST Cell dated the 10th October, 2024 being Notification No. 09/2024- State Tax(Rate) .(GHN-48)/GST-2024/S.128A(1)/GST Cell - dated 29-10-2024 - Gujarat SGST State Government notifies the respective date by which payment for the tax, as per the notice, statement, or order, must be made to qualify for a waiver of interest and penalties under Section 128A of the GGST Act 1127/XI-2–24-9(47)-17-T.C.-265-U.P.Act-1-2017-Order(327)-2024 - dated 10-10-2024 - Uttar Pradesh SGST Amendment in Notification No. KA. NI.-2-851/XI–9(47)-17-U.P.Act-1-2017-Order(18)-2017, dated June 30, 2017 1126/XI-2–24-9(47)-17-T.C.-264-U.P.Act-1-2017-Order(326)-2024 - dated 10-10-2024 - Uttar Pradesh SGST Amendment in Notification No. KA.NI.-2-836/XI–9(47)-17-U.P.Act-1-2017-Order(06)-2017, dated June 30, 2017 1184/XI-2–24-9(47)-17-T.C.-263-U.P.Act-1-2017-Order(325)-2024 - dated 9-10-2024 - Uttar Pradesh SGST Amendment in Notification No. KA. NI.-2-844/XI–9(47)-17-U.P.Act-1-2017-Order(11)-2017, dated June 30, 2017 1182/XI-2–24-9(47)-17-T.C.-261-U.P.Act-1-2017-Order(323)-2024 - dated 9-10-2024 - Uttar Pradesh SGST Amendment in Notification No. 1182/XI-2–24-9(47)-17-T.C.-261-U.P.Act-1-2017-Order(323)-2024, dated October 9, 2024 Income Tax 122/2024 - dated 27-11-2024 - IT Central Government notifies transfer of capital asset from NLC India Limited u/s 47(viiaf) of IT Act 1961 Highlights / Catch Notes GST Delayed GST appeals dismissed due to absence of extraordinary circumstances. The petitioner filed appeals against orders under CGST/SGST Acts after a delay of four years. The court held that it cannot normally exercise jurisdiction under Article 226 to extend the time limit for filing appeals u/s 107 of the CGST/SGST Acts, as per the Supreme Court's rulings in Singh Enterprises and Ketan V. Parekh cases. Although Section 5 of the Limitation Act may not apply, the benefit of Section 14 can be extended in rare cases with extraordinary circumstances, which were not present in this case. Despite Article 226 not fixing a limitation period for writ petitions, inordinate delay in filing can lead to dismissal. The petitioner's contention of illness was viewed with suspicion. Consequently, the writ petition was dismissed due to the failure to approach the court within a reasonable time and the absence of extraordinary circumstances justifying condonation of delay. Visit to Get Source Uttar Pradesh Motor Vehicle Taxation Act: Court Upholds Purchase Condition for Exemption. The High Court upheld the validity of the exemption notification dated 02.03.2023 issued u/s 3 of the U.P. Motor Vehicle Taxation Act, 1997. The notification imposed a condition that the vehicle must have been purchased in the State of Uttar Pradesh to avail the exemption. The Court held that Section 3 does not restrict the State Government's power to impose conditions for granting exemption. The condition regarding purchase of the vehicle within the State was found reasonable, as it allows the State to earn revenue through GST on such purchases. If vehicles are purchased from outside the State, the State loses that revenue. Therefore, the condition cannot be deemed unreasonable, and the petition challenging the notification was dismissed. Visit to Get Source Cancelled GST registration sans proper notice, hearing - Natural justice violated. Confusion regarding cancellation of GST registration order - violation of principles of natural justice. No evidence of proper cancellation order or communication to Petitioner. Petitioner confused about whether remarks constituted order. Show cause notice required reply and personal hearing, but Petitioner neither replied nor attended. Petitioner filed physical reply later, but impugned remarks took no cognizance. Failure of natural justice as remarks uploaded after Petitioner's reply. Costs to be paid to Tata Memorial Hospital within four weeks, proof to be produced. Upon proof, personal hearing to be fixed, reasoned order to be passed after hearing and communicated properly. If costs not paid, Petition dismissed with additional costs payable. Visit to Get Source Income Tax Accumulated profits calculation for deemed dividend: Deduct depreciation as per Income-tax Act, not company books. Deemed divided u/s 2(22)(e) requires arriving at accumulated profits by deducting depreciation as per Income-tax Act rates. Bombay High Court in Navnit Lal C Javeri and Jamnadas Khimji Kothari cases held that for calculating accumulated profits u/s 2(22)(e), depreciation should be deducted at rates prescribed by Income-tax Act, not as per company's balance sheet. Profits disclosed in balance sheet are subject to adjustment by deducting depreciation as per Income-tax Act rates to determine accumulated profits for deemed dividend taxation u/s 2(22)(e). Visit to Get Source Pending Income Tax appeals: Stay on recovery until disposal of petitions. This case pertains to the pendency of appeals before the Commissioner of Income Tax (Appeals) and the initiation of recovery proceedings by the Income Tax Department for outstanding demands. The High Court expressed disappointment with the respondents for not addressing the issue of pendency despite specific directions. The Court observed that if the respondents are not interested in resolving the issue by classifying appeals based on recurring or covered issues, no recovery should be made from assessees during the pendency of appeals. Consequently, the Court ordered a stay on recovery of outstanding dues from petitioners whose appeals are pending until the disposal of these petitions. Visit to Get Source Dividend income taxability, intra-group services' TP adjustment through APA, CSR deduction clarification, interest on late filing, DDT credit verification. Exempt dividend income treated as taxable, increasing total income - claim denied by processing return u/s 143(1). Assessee filed rectification application u/s 154 pending before CPC, Bengaluru. Application to be disposed expeditiously, and no adverse action against assessee till disposal. TP adjustment on intra-group support services - settled through unilateral APA between CBDT and assessee for 5 years from 2015-16 to 2019-20, including assessment year. AO to re-decide issue considering APA and modified return. Deduction u/s 80G for CSR expenditure - DRP concluded deduction allowed except for donations to Swachh Bharat Kosh and Clean Ganga Fund, subject to section 80G conditions. Issue remanded to AO to pass final order conforming to DRP directions. Interest u/s 234A - challenged on grounds of timely filing before extended due date. AO to verify extended date and levy interest only if return filed after extended date. Interest u/s 234B to be levied by AO after giving appeal effect. Non-granting of DDT credit - AO to verify claim from challan and allow credit if correct. Visit to Get Source Scrutiny on cash deposits as agricultural income: Validity of claims & evidence. Cash deposits in savings bank account treated as long-term capital gains from sale of agricultural land. Assessee claimed income from export-quality rose cultivation with brother, relying on report from agricultural college professor. However, report alone insufficient proof of agricultural income. Assessment order passed ex-parte without assessee's participation. CIT(A) order based on AO's remand report. Matter remanded to AO for fresh assessment after proper opportunity to assessee to substantiate agricultural income claim with supporting evidence. Appeal allowed for statistical purposes. Visit to Get Source Banks' tax woes: Disallowances, interest deductibility, bad debt recoveries, MAT applicability & more resolved. The summary focuses on various issues related to the taxation of banks, covering disallowances u/s 14A, interest deductibility on IPDI bonds, taxation of bad debt recoveries, applicability of MAT provisions u/s 115JB, treatment of broken period interest, amortization of premium on HTM securities, taxation of unrealized interest on NPAs, deduction u/s 36(1)(viii), loss on sale of assets to ARCs, and disallowance of payments made to RBI for non-compliance. The ITAT relied on its own precedents and High Court judgments to provide favorable decisions for the assessee bank on most issues, emphasizing principles like following RBI guidelines, substance over form, and excluding penalties for violating internal regulations from disallowance under Explanation 1 to Section 37. Visit to Get Source Limited jurisdiction officer validly issued notice for tax assessment under prescribed CBDT rules. Section 142(1) notice issued by non-jurisdictional officer held valid. Plain reading of Section 143(2) indicates either Assessing Officer or prescribed income-tax authority can issue notice u/s 143(2). CBDT notification authorized Assistant/Deputy Commissioner to act as prescribed authority for issuing Section 143(2) notice. Contention that only NaFAC officers can issue notice unmerited, not supported by provisions. Prescribed authority can issue, not just serve, Section 143(2) notice. Assessing Officer had jurisdiction to issue impugned Section 142(1) notice, not barred by limitation. Once Section 143(2) jurisdiction established, Assessing Officer cannot be faulted for completing assessment. Visit to Get Source Income tax penalty quashed after AO accepted assessee's declared income in reassessment. Pertaining to the levy of penalty u/s 271AAC(1), the Assessing Officer (AO) initially passed an order u/s 144, concluding the assessment on a best judgment basis and making an addition of Rs. 20 lakh to the assessee's total income at a special rate u/s 115BBE. However, upon perusal of the subsequent order passed pursuant to the Tribunal's directions, it was found that the AO accepted the total income declared by the assessee in its return of income, and no addition was made. Generally, the AO has the liberty to reconsider the levy of penalty, in accordance with the fresh assessment framed. Since in the present case, the assessee was assessed at the returned income in the second round of assessment proceedings, the penalty levied u/s 271AAC(1) was deemed unsustainable and quashed. Consequently, the impugned order was set aside, and the grounds raised by the assessee were allowed. Visit to Get Source Transfer pricing adjustments questioned, comparables scrutiny ordered. Turnover filter misuse set aside. Transfer pricing adjustment rejected assessee's comparable companies in TP study analysis. Directed TPO to examine if companies are functionally comparable, apply applicable filters, and include if comparable. Rejection of comparable solely on higher turnover set aside, directed consistent turnover filter application. Deferred receivables treated as international transaction, remanded to apply bank rate after allowing 60-day credit period. Partly allowed. Visit to Get Source Arbitral Award Taxability: Contractual Compensation is Business Income, Non-Taxable in India under India-Japan Tax Treaty. Characterization of arbitral award compensation as business income under India-Japan tax treaty. Principal portion arising from contractual obligation constitutes business income, not taxable in India due to absence of permanent establishment. Interest on compensation partakes character of business receipts, not separable as income from other sources. Entire compensation construed as business income, not taxable in India under Article 7 of tax treaty. Double addition of interest income offered in return to be deleted by Assessing Officer. Penalty proceedings unsustainable due to deletion of additions. Appellate Tribunal's decision on taxability, double deduction, and penalty. Visit to Get Source Software license income not taxable in India under India-US DTAA; non-exclusive licenses not 'royalty'. The case revolves around the taxation of income earned by the assessee from licensing software to Indian customers under the India-USA Double Taxation Avoidance Agreement (DTAA). The key points are: The assessee provided the right to use computer software licenses through End User License Agreements (EULAs) or reseller agreements to Indian customers. It contended that such income was not taxable u/s 9(1)(vii) of the Income Tax Act or Article 12 (Royalty) of the India-USA DTAA. The ITAT held that the assessee's reliance on the Supreme Court decision in Engineering Analysis Centre of Excellence Pvt. Ltd. was well-founded. The transaction fell under the second category of software sale, granting non-exclusive restrictive licenses, which would not be covered under the definition of royalty as per the DTAA and hence not taxable in India. Regarding technical support services, the ITAT found that the receipts from DXC Technology India Private Limited, which had a separate clause for such services, constituted only 0.11% of the total receipts. The Assessing Officer erred in concluding that the entire receipts would fall under technical services. The ITAT held that for services to be considered 'Fees for Technical Services' under Article 12 of the India-US treaty. Visit to Get Source Aircraft repair fees not taxable as "Fee for Technical Services"; no technology transfer or enduring benefit. The receipts towards repairs and maintenance services rendered by the assessee cannot be construed as "Fee for Technical Services" (FTS) u/s 9(1)(vii) of the Income Tax Act or the Double Taxation Avoidance Agreement (DTAA) between India and Singapore. The assessee provides repair and maintenance services for aircraft equipment to Indian customers, and the primary business involves charging repair and maintenance fees. The 'make available' clause is not satisfied as there is no transfer of technology, skills, knowledge, processes, experience, or benefits. The repairs and maintenance services are not 'made available' to clients for future self-repair and maintenance. The Dispute Resolution Panel's interpretation of 'enduring benefit' gained by clients through repairs and maintenance as akin to 'make available' cannot be accepted. Consequently, the services cannot be treated as FTS under the Act or the treaty. Regarding the chargeability of interest u/ss 234A and 234B, if the return of income is filed beyond the prescribed due date u/s 139(1), interest u/s 234A shall be leviable, and the Assessing Officer is directed to examine and decide accordingly. The chargeability of interest u/s 234B would be consequential. Visit to Get Source Charitable trust denied tax exemption for excessive commercial exploitation of premises beyond permitted 20% limit. The assessee trust was denied exemption u/s 11 as it was found to be systematically exploiting its property commercially by renting out space for exhibitions, corporate meetings, etc., which were not related to the objects of the trust. The Assessing Officer held that these activities were not incidental to attaining the trust's objectives. Additionally, the assessee failed to maintain separate books of accounts for such commercial receipts as required u/s 11(4A). The Tribunal observed that based on the Supreme Court's decision in Ahmedabad Urban Development Authority, an entity can be granted exemption if the profits generated while carrying out general public utility objectives do not exceed 20% of total receipts as per the second proviso to Section 2(15). However, this aspect was not adjudicated upon by the lower authorities. Consequently, the Tribunal set aside the impugned order and restored the matter to the Assessing Officer to decide afresh, considering the ratio of the Ahmedabad Urban Development Authority judgment regarding the 20% limit on commercial receipts. The revenue's appeal was partly allowed for statistical purposes. Visit to Get Source Bogus commodity transactions surfaced through complex fund routing for tax benefit. Bogus commodity loss transaction identified as mere accommodation entry facilitated through complex fund routing. Revenue's investigation revealed modus operandi of transactions between parties, corroborated by money trail and admission by directors, establishing impugned transactions as accommodation entries for tax benefit. Burden of proof shifted to assessee to controvert findings, which was not discharged satisfactorily. Transaction treated as bogus, reducing cost of land acquisition. Unexplained credit addition deleted as source of funds established as genuine. Interest disallowance on loans reversed as source held genuine. Disallowance u/s 14A rightly deleted in absence of exempt income. Appellate Tribunal upheld Revenue's findings and assessee's contentions rejected. Visit to Get Source Cash deposits during demonetization were explained, addition dropped. Director's brother's salary allowed, but not family members' salaries. Addition u/s 68 was made for unexplained cash deposits during demonetization period. Assessee submitted detailed cash sales and deposits, demonstrating all deposits were from cash sales. AO rejected, observing SBN was banned from 09.11.2016. However, as per Ordinance, prohibition on holding SBN was after 31.12.2016, not 08.11.2016. Therefore, addition u/s 68 was dismissed. Regarding salary expenditure to brother of Director, it was allowed as he is a regular key employee and salary was disclosed in returns. However, salaries to sister-in-law and wife of Director were disallowed due to lack of evidence of employment and services rendered. The ITAT partly allowed Revenue's grounds. Visit to Get Source Construction Biz Dodges Income Tax Additions: Hotel, Garden, & Property Investments Justified. Assessment u/s 153A - Unexplained investment in hotel construction rejected as the material found during search pertained to another person, not the assessee. CIT(A) had rightly deleted the addition, as income from such investment is assessable in the hands of the partnership firm. Undisclosed income from Garden Mahaveer Paradise - CIT(A) order upholding deletion of addition affirmed after examining assessment order, documents, and submissions. Unexplained investment u/s 69 for residential property - Assessee engaged in construction material business, utilized contacts to reduce costs by 10%. No discrepancy pointed out in registered valuer's report. AO made addition without considering objections. CIT(A) allowed assessee's ground based on assessment order, documents, and reasoned order. Scope of incriminating documents - Only incriminating material, not merely material, can be considered for unabated assessments. No incriminating material found during search, only declared construction bills. CIT(A) rightly allowed assessee's appeal after examining all aspects. Visit to Get Source IBC Real estate allottees challenge treatment in resolution plan, but appeal dismissed. The Appellate Tribunal dismissed the appeal filed by the Appellants, who were allottees seeking equitable treatment with other creditors in the same class, amendment of the Information Memorandum (IM) reflecting their units as cancelled, and refund of the amount paid. The key points are: The Resolution Professional (RP) lacks adjudicatory powers on claims filed before them and could not have reversed the cancellation action taken by the Corporate Debtor prior to the CIRP initiation. The Resolution Plan, approved by the Committee of Creditors (CoC) with 100% majority, provided treatment to the cancelled allottees, complying with Section 30 of the Code. The Appellants had approached UPRERA and accepted partial refunds from the erstwhile management, indicating acceptance of cancellation. The Appellants did not challenge the pre-CIRP cancellation and misrepresented their claims. The CoC and RP could not revoke the cancellation as it was beyond their jurisdiction. The cancellation was based on an unchallenged UPRERA order, and the CoC acted within its commercial wisdom in approving the Resolution Plan. The Appellate Tribunal found no fault in the due process followed by the Adjudicating Authority. Visit to Get Source Indian Laws Accountant penalized for negligent certification without proper verification. Chartered accountant held guilty of professional misconduct under clause (7) of Part I of Second Schedule to the Act for lack of due diligence and gross negligence in issuing utilization certificate without verifying accuracy of figures or seeking supporting documents from client society. Conduct akin to previous cases where certificates issued without examining underlying documents. However, considering long membership and lack of prior misconduct, instead of removing name from register for one year, respondent severely reprimanded u/s 21(6)(b) of the Act. Reference disposed of accordingly. Visit to Get Source Service Tax Directors' remuneration not liable for service tax as employer-employee relationship established. Service tax liability on remuneration paid to directors. The key points are: Remuneration paid to directors is accounted for as 'Salary' and TDS is deducted under the head of 'Salary' as per Form-16, indicating an employer-employee relationship. As per Section 65B(44)(b) of the Finance Act, 1994, salary paid to employees falls under the negative list and is not liable for service tax. The CESTAT held that since the payment is towards salary and the relationship is that of employer-employee, it does not constitute a service and is exempt from service tax under the negative list provision. The appeal was allowed. Visit to Get Source Service tax paid by provider can't be demanded again from recipient on reverse charge basis for same service. When a service provider has already paid 100% service tax on manpower supply and security services, demanding the same service tax from the service recipient, who is liable to pay service tax on reverse charge basis, amounts to double taxation on the same service, which is not permissible. Even though the service recipient is liable to pay service tax on reverse charge basis, once the service provider has paid the service tax, the same cannot be recovered twice from the recipient. Since the service tax payment by the provider is correct, it is admissible as Cenvat credit to the recipient. Therefore, neither the service tax demand against the recipient nor the demand of Cenvat credit of the same amount is sustainable. Visit to Get Source Taxability of commission earned by 'Intermediary' from foreign service recipients debated: Assessee claimed export, Department viewed domestic service. Appellant provided 'Intermediary' services classifiable as business auxiliary services within taxable territory to foreign recipients. Service Tax returns showed activity as "Export of Service" with no Service Tax paid on commission earned from foreign service recipients for July 2012 to September 2015. Department viewed appellant as provider of 'Intermediary' services classified under business auxiliary services within India's taxable territory to various Schott group companies located outside India. Appellant contended similar demand was raised and dropped by department for March 2005 to September 2008, with no further demand after October 2008. Tribunal remanded matter for fresh consideration, directing Adjudicating Authority to give specific finding on applicability of extended period of limitation, as all facts were not available during initial adjudication. Tribunal relied on its own decision in SNQS International Socks case, endorsed by Supreme Court, favoring assessee on similar issue. Visit to Get Source Central Excise Paints on windmills get tax exemption as integral part, not mere coating. The CESTAT allowed exemption for paints applied on wind mills, considering them an integral part of the wind operated electricity generator, covered under the exemption notification. It rejected the argument that paint is merely an external coating and not a component or part. The Tribunal reasoned that paint acts like skin, essential for protection and integral to the product. Disallowing exemption for paint would be akin to removing skin from a living being. The Tribunal distinguished the Bombay High Court order cited by the Department, stating its limited writ jurisdiction is different from the appellate jurisdiction of CESTAT. The Commissioner's order denying exemption was set aside. Visit to Get Source Case Laws: GST 2024 (11) TMI 1210 Violation of principles of natural justice - opportunity of personal hearing not granted to petitioner - HELD THAT:- Applying the ratio as laid down by the coordinate Bench of this Court in the case of Mahaveer Trading Company vs. Deputy Commissioner State Tax and another [ 2024 (3) TMI 334 - ALLAHABAD HIGH COURT ], it is opined that opportunity of personal hearing should have been granted to the petitioner under Section 75(4) of the Uttar Pradesh Goods and Services Tax Act, 2017 before passing any adverse order against the petitioner. The impugned order dated November 29, 2022 passed by respondent no.2/Assistant Commissioner, State Tax, Sector-2, Shikohabad is quashed and set-aside with a direction given to the officer concerned to grant the petitioner another opportunity of filing a fresh reply and thereafter fix a date of hearing and pass a reasoned order - Petition disposed off. 2024 (11) TMI 1209 Condonation of delay in filing appeals against orders under CGST/SGST Acts - Whether the court can exercise jurisdiction under Art. 226 to permit the filing of appeals beyond the statutory time limit? - HELD THAT:- The petitioner has not made out any ground for grant of relief in this writ petition. Admittedly, the petitioner filed appeals against Ext.P.1 series of orders only in the month of February 2024 i.e., four years after the date on which the orders against which the appeal was sought to be filed had been issued. This Court cannot, normally, in the exercise of jurisdiction under Art. 226 of the Constitution of India extend the time limit for filing an appeal under Section 107 of the CGST/SGST Acts. This is clear from the law laid down in SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT] . The issue was considered in the context of Section 35 of the Foreign Exchange Management Act, 1999 in KETAN V. PAREKH VERSUS SPECIAL DIRECTOR, DIRECTORATE OF ENFORCEMENT AND ANOTHER. [ 2011 (11) TMI 62 - SUPREME COURT] - The judgment in Ketan V. Parekh is also authority for the proposition that though Section 5 of the Limitation Act, 1963 may not apply, the benefit of Section 14 of that Act can be extended in appropriate cases. It is only when the Court finds certain extraordinary circumstances that prevented the petitioner from filing an appeal within time, the Court will exercise such jurisdiction (in rare cases) and direct that the petitioner should be permitted to contest an appeal filed beyond the statutory time limit, on merits - there are no extraordinary circumstances in this case to grant similar relief to the petitioner. Though Article 226 of the Constitution of India does not fix any period of limitation for the filing of a writ petition, it is settled law that a writ petition can be dismissed on the ground of inordinate delay in filing the writ petition. As already observed the orders issued by the adjudicating authority were issued in the month of February 2020. This Writ Petition has been filed only in the year 2024. That is another reason to decline relief. The petitioner has failed to approach this Court within a reasonable time. The contention of the petitioner that he was sick and advised bed rest due to fatty liver disease has to be taken with a pinch of suspicion - the writ petition fails, and it is accordingly dismissed. 2024 (11) TMI 1208 Seeking to quash the Impugned Ex-Parte Order passed under Section 73(9) of the CGST/ UPGST Act, 2017 as well as the Impugned Summary of the Order - extension of period of limitation for determination of tax under Section 73(10) of the CGST/ UPGST Act, 2017 without having any exigency provided under Explanation to Section 168A of CGST/UPGST Act, 2017 - HELD THAT:- Petitioner placed reliance upon the judgements of the Supreme Court in Ghanshyam Mishra and Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [ 2021 (4) TMI 613 - SUPREME COURT ]; Pr. CIT v. Monnet Ispat Energy Ltd. [ 2018 (8) TMI 1775 - SC ORDER ]; judgement of Bombay High Court in Murli Industries Limited v. Astt. CIT [ 2021 (12) TMI 1182 - BOMBAY HIGH COURT ]; and the order of Delhi High Court in ARENA SUPERSTRUCTURES PRIVATE LIMITED VERSUS ASSISTANT COMMISSIONER OF INCOME TAX ANR. [ 2024 (7) TMI 1558 - DELHI HIGH COURT] to buttress his argument that once the resolution plan has been sanctioned by the National Company Law Tribunal, other dues that are not part of said plan would extinguish. Furthermore, new liability cannot be created by the tax authorities for prior periods on a company, that is the 'successful resolution applicant'. In light of the above judgements and the ratio laid down by the Supreme Court in Ghanshyam Mishra and Sons (P.) Ltd., the order impugned dated April 30, 2024 is stayed during the pendency of this writ petition. List this matter on January 16, 2024. 2024 (11) TMI 1207 Challenge to remarks/order annexed to the Respondents reply - confusion regarding cancellation of GST registration order - violation of principles of natural justice - HELD THAT:- There is no evidence of any proper order of cancellation or in any event, communication of this order to the Petitioner. Since the portal refers to remarks, it is possible that the Petitioner was confused about whether this would constitute an order or in any event, a speaking order. The show cause notice dated 8 June 2023 required the Petitioner to file a reply and attend the personal hearing on 15 June 2023. The Petitioner did neither. It was only in November that the Petitioner filed a reply in physical format, adding that it could not have been uploaded to the Respondent s portal earlier - The impugned remarks take no cognisance of the Petitioner s reply filed in the physical format. Since the impugned remarks were uploaded only on 10 January 2024, cognisance should have been taken of the Petitioner s reply. Accordingly, there is a failure of natural justice. The costs must be paid to the Tata Memorial Hospital within four weeks from today, and proof of payment/receipt must be produced before the second Respondent within four weeks. Upon receipt of such proof, the second Respondent must fix a date for personal hearing of the Petitioner/its representative and dispose of the show cause notice dated 8 June 2023 by passing a reasoned order and communicating it to the Petitioner. The notice regards personal hearing should be served on the Petitioner by e-mail and not by simply indicating it on the portal - If the costs are not paid within four weeks from today, then this Petition will be deemed to have been dismissed with Rs. 10,000/- again payable to Tata Memorial Hospital. 2024 (11) TMI 1206 Validity of exemption notification dated 02.03.2023 - imposition of condition for the purpose of getting exemption that the vehicle in question must have been purchased in the State of Uttar Pradesh - Section-3 of the U.P. Motor Vehicle Taxation Act, 1997 - HELD THAT:- Perusal of the provisions of section 3, would reveal that the State Government, subject to such conditions and for such period, as may be specified, may exempt either wholly or partly any motor vehicle or class of motor vehicles from the payment of any tax under the Act. The Section, does not restrict the power of the State to indicate the conditions for grant of exemption. The notification dated 02.03.2023, inter alia, provides for 100% exemption of tax qua the vehicles purchased and registered in Uttar Pradesh. The very fact that the aforesaid Section does not restrict the powers of the State in imposing condition, the plea raised seeking to question the condition imposed regarding purchase of vehicle cannot be countenanced. The submissions made that as the tax imposed is on plying of the vehicle, no condition on the basis of place of the purchase of the vehicle can be imposed, apparently also has no basis. There is substance in the submissions of learned counsel for the respondents that on purchase of vehicle within the State, the State gets revenue through its share of G.S.T. and in case the vehicle is purchased from outside the State, even that part of the revenue is lost and therefore, instead of making it open-ended exemption, the State is well within its power to impose the condition of purchase of vehicle within the State, which condition cannot be said to be unreasonable. Thus, no case for interference is made out in the petition, the same is, therefore, dismissed. Income Tax 2024 (11) TMI 1217 Revision u/s 263 - failure to tax unaccounted income disclosed during a survey u/s 115BBE - as per CIT AO had not made any inquiry nor considered the record of survey before accepting the surrender as pertaining to the professional receipt, as the income surrendered ought to have been taxed at the rate of 60% plus surcharge at the rate of 25% of such tax u/s 115BBE - ITAT allowed assessee appeal - HELD THAT:- Tribunal after considering the settled legal position has arrived at the findings that the PCIT has ignored the facts of the case on record as well as the legal proposition to the effect that the finding of non-inquiry vis-a-vis the documents, statements recorded during the course of survey, is not based on any hard facts but the facts on record clearly reveals that the AO had conducted due inquiry on the issue of disclosure made by the respondent assessee and considering the statement of the assessee during the survey making voluntary surrender of professional unaccounted receipts, the same was taxed as such as business income, is in accordance with law. Tribunal has therefore rightly held that only because no inquiry was conducted by the Assessing Officer on record of the survey before him, cannot be the basis for assumption of jurisdiction u/s 263 more particularly, when it is not pointed out as to how and what basis such finding was arrived at by the AO and non examination of the records cannot be the basis for coming to the conclusion that the assessment order is erroneous and pre-judicial to the interest of revenue. Principal CIT could not have assumed the jurisdiction on mere change of opinion on his part, when the Assessing Officer while during the course of regular assessment has made inquiry regarding the issue which is the subject matter of the revision. Principal CIT would have arrived at a valid finding of error on the basis of his own examination of record including the documents and statement recorded of the assessee during the survey action undertaken u/s 133A but there is nothing on record to point out that how the documents pertaining to survey could not have lead to a reasonable belief as entertained by the Assessing Officer that the income surrender pertained to the professional receipt which is one of the plausible view on the matter. Decided in favour of assessee. 2024 (11) TMI 1216 Deemed divided u/s 2(22)(e) - arriving at the accumulated profits u/s 2(22)(e) whether deduction of depreciation as provided under the Income-tax Act is necessary or not for taxing any loan borrowed from the company, as deemed dividend? - HELD THAT:- In Navnit Lal C Javeri [ 1970 (3) TMI 33 - BOMBAY HIGH COURT] dealt with the issue as to what is the correct method for determination of accumulated profits u/s 2(6A)(e) and if there are any accumulated profits so determinable, what is the correct amount thereof and held that for the purpose of calculating profits within the meaning of the phrase accumulated profits under section 2(6A)(e), an allowance of depreciation should be made by way of a deduction at the rates provided for by the Income-tax Act itself. Also in JAMNADAS KHIMJI KOTHARI. [ 1972 (10) TMI 24 - BOMBAY HIGH COURT] held that phrase accumulated profits does not mean profits as disclosed by the company s balance-sheet. The profits disclosed would be subject to adjustment and the depreciation as granted in accordance with the rates prescribed by the Income-tax Act would have to be deducted for ascertaining the accumulated profits - Decided in favour of assessee. 2024 (11) TMI 1215 Pendency of the Appeals pending before the CIT(Appeals) - CIT (Appeals) not disposing the pending Appeals on one hand and the recovery Proceedings are initiated by the respondent-Income Tax Department for the outstanding demand - HELD THAT:- As respondent Nos.3 to 5 instead of addressing the issue of pendency of the Appeals pending before the CIT(Appeals) has tried to justify the proceedings undertaken by the CIT(Appeals) for the disposal. We are at pain to note that in spite of giving specific directions in paragraph No.9 of the order 2024 (10) TMI 1616 - GUJARAT HIGH COURT] the respondent Nos.3 to 5 have ignored the same and repeated what is stated in the earlier affidavit with an addition only reference to annual Central Action Plan 2024-25 and Vivad se Vishwash Scheme, 2024 for issue of pendency of more than 5,80,000 Appeals before the CIT (Appeals). If the respondents are not interested in resolution of the issue of pendency of the Appeals the manner in which it ought to have been resolved by classifying the Appeals as per the issues concerning the recurring issues, covered issues, etc., we are of the opinion that no recovery should be made from the assessees during the pendency of the Appeals. Therefore, in all these petitions, there shall be no recovery of any outstanding dues from the petitioners whose Appeals are pending during pendency of these petitions. 2024 (11) TMI 1214 Treating Exempt dividend income as per the provisions of section 10(35) as taxable thereby increasing the total income - claim was denied by processing the return u/s 143(1) and assessee has moved an application for rectification u/s 154 of the Act which is pending disposal before the CPC, Bengaluru - HELD THAT:- On such concession, we are of the considered view that the said application of the assessee should be disposed off at the earliest and till the disposal of the rectification application, the AO should not take any adverse action against the assessee. Ground No. 1 is accordingly disposed off. TP adjustment - international transaction of payment for intra-group support services availed by the Assessee from its AEs - HELD THAT:- As assessee, pointed out that the quarrel has been settled through an unilateral Advance Pricing Agreement (APA) made on 27/03/2024 between the CBDT and the assessee and one of the terms of the agreement is that the agreement shall apply to consecutive five (5) years commencing from 2015-16 to 2019-20, meaning thereby for AYs 2016-17 to 2020-21, which includes the assessment year under consideration. The assessee has also filed modified return of income on 25/06/2024. Thus AO is directed to re-decide the issue afresh considering the APA (supra) and the modified return of income (supra). Accordingly, Ground No. 2 is allowed for statistical purposes. Deduction u/s 80G - Corporate Social Responsibility (CR) expenditure - HELD THAT:- As decided in assessee own case in AY 2018-19 DRP concluded that even though deduction for CSR Expenses was not allowable under Section 37 of the Act (in view of the Explanation 2 to Section 37 of the Act inserted by the Finance Act, 2014, with effect from 01.04.2015), there was no bar for allowance of the same under Assessment Year: 2018-19 Section 80G of the Act (except for the donations made to the Swach Bharat Kosh and the Clean Ganga Fund), provided all the other conditions of Sec. 80G are fulfilled. Therefore, the DRP issued specific direction to allow deduction u/s 80G of the Act after verifying whether the other conditions specified under Section 80G were fulfilled. As per mandate of Section 144C(13) of the Act, upon receipt of directions issued by DRP the Assessing Officer was required to complete the assessment in conformity with the directions issued by the DRP. The issue is remanded back to the file of Assessing Officer with the directions to pass the Final Assessment Order in conformity with the directions issued by the DRP. Levy of interest u/s 234A - Challenge levy on the ground that there was no delay in filing the return of income and the return of income has been filed before the extended due date by CBDT Notification No. 93/2020, F. NO. 370142/35/2020 TPL dated 31/12/202 0 - HELD THAT:- AO is directed to verify whether the Board has extended the due date of filing the return of income and if so, verify whether the assessee has filed the return of income on or before the extended date and if found correct, not to levy interest u/s 234A of the Act. This Ground is also allowed for statistical purposes. Levy of interest u/s 234B of the Act which will be levied by the AO after giving appeal effect to our order as per the provisions of the law a Non-granting of the credit for dividend distribution tax (DDT) - AO is directed to verify the claim of the DDT from the challan to be furnished by the assessee and if found correct, allow the credit. These Grounds are also allowed for statistical purposes. 2024 (11) TMI 1213 Unexplained income of cash deposits in savings bank account - sale proceeds of Agricultural land assessed as long term capital gain - assessee submitted that the assessee is in possession of substantial agricultural land along with his brother and involved in production of export quality roses in poly house. For this purpose, the assessee has also availed bank loan. HELD THAT:- We find that in support of agricultural income the assessee has relied on statistical data report prepared by Professor of Economics Agricultural College, Pune but the said report cannot be sacrosanct for the purposes of proof of agricultural income and the assessee needs to substantiate the same before the AO with proper and supporting evidences. At the same time we find that the assessment order was passed ex-parte i.e. in the absence of assessee and first appeal order was passed after considering the remand report sent by the Assessing Officer. Under these circumstances we find that the assessee could not support his case properly before the AO, thus we deem it appropriate to set-aside the order passed by Ld. CIT(A) and remand the matter back to the file of the Assessing Officer with direction to pass assessment order afresh - The grounds raised in this appeal are accordingly allowed for statistical purposes. 2024 (11) TMI 1212 Denial of exemption u/s. 11 - failure on the part of the assessee to file the Audit Report of the accounts of the Trust (Form 10B) within due time - assessee belatedly filed the same within 32 days - Rejection of rectification-application as dismissed by the Ld.CIT(A). HELD THAT:- We note that the CBDT Circular F. No.173/193/2019 ITAI, dated 23-4-2019 permits the assessee-Trust to file an application before the CIT for condonation of delay up to 365 days if the assessee is able to show reasonable cause for not filing the Audit Report within the stipulated time. CIT has been delegated the powers by CBDT to condone the delay. Be that as it may, we note that in this case, assessee Trust has filed return along with Audit Report ( 32 days delay) before the CPC and it had processed the return of the assessee. Therefore, taking into consideration sec.12A(1)(ba) r.w.s.139(4A), we are of the view that the CPC ought not to have denied exemption u/s. 11 of the Act without giving proper opportunity as stipulated by first proviso to sec.143(1) of the Act. Since, there is violation of natural justice and the assessee has complied with stipulation of filing Audit Report which was very well before the CPC, the impugned action of the CPC can t be legally sustained. Therefore, we set aside the impugned order of the Ld.CIT(A), and direct the assessee to file application for condoning delay in filing of Audit Report as per Circular No.2/2020 dated 03.01.2020. As the assessee to prefer an application as stated in Para No.5 (supra) and thereafter, the CPC to process the return of income afresh and pass orders after giving opportunity to the assessee if any adjustments are proposed to be made in accordance to law. Appeal filed by the assessee is allowed for statistical purposes. 2024 (11) TMI 1211 Grant of short credit of TDS - as per DR no income has been offered to tax corresponding to the amount of TDS being claimed by the assessee, the credit for TDS cannot be given to the assessee in the year under consideration - HELD THAT:- Considering circulars of the CBDT relating to granting of refund of TDS, we are of the view that the assessee is entitled to claim refund on TDS deducted from the advance given to it by HPCL. AO may however, verify from the system that no refund of the TDS in question has been claimed by the HPCL by way of filing of a revised TDS return. Subject to the above, the AO is directed to allow credit of brought-forward TDS as claimed by the assessee. Appeal of the assessee is allowed. 2024 (11) TMI 1205 Validity of Reopening of assessment u/s 147 - addition invoking Section 50C - as decided by HC [ 2023 (10) TMI 1454 - BOMBAY HIGH COURT] this is not a fit case to exercise our discretionary jurisdiction under Article 226 of the Constitution of India. Petitioner may raise all grounds which Petitioner has before the AO in reply to the notice u/s 148 - The officer shall consider the objections and points raised by Petitioner and pass such order as he deems fit in accordance with law dealing with all submissions of Petitioner. HELD THAT:- We continue the stay of further proceedings pursuant to the notice under Section 148. The respondents have issued the notice despite the fact that the relationship between the vendor and vendee is that of mother and son. In these circumstances, reference to the circle rate, which may be relevant for the purpose of execution of a sale deed/gift deed, as per the petitioner has no relevance to invoke Section 50C of the Act. Counter affidavit/reply within 3 weeks. Rejoinder within 3 weeks after service of the reply/counter affidavit. 2024 (11) TMI 1204 Validity of reassessment proceedings - notice was issued beyond the period of limitation as prescribed in first proviso to Section 149(1) - HELD THAT:- As decided in RAJEEV BANSAL [ 2024 (10) TMI 264 - SUPREME COURT (LB)] a notice could be issued under Section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under Section 149(1)(b) of the old regime. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under Section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under Section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses. In view of the above, the present petition is allowed. The impugned order dated 01.05.2024 as well as the notice issued under Section 148 in respect of the AY 2017-18 are set aside. 2024 (11) TMI 1203 Validity reassessment proceedings beyond period of limitation - when a notice can be considered as issued ? - delay is of only about two minutes in issuance of the impugned notice u/s 148A(b) - Revenue s contention that although the impugned notice bears the date of 01.04.2023, however, the same should be construed as having been issued on 31.03.2023. This contention is premised on the basis that the process for issuing the impugned notice had begun in the late hours of 31.03.2023 and the final act of affixing the digital signature which is system generated process was completed on 12:02 AM on 01.04.2023 HELD THAT:- In the present case the impugned notice was digitally signed on 01.04.2023. Thus, the process of digitally generating the same on the system was completed on 01.04.2023. Plainly, the impugned notice could not have been issued prior to the same being signed. The fact that the steps to generate the impugned notice commenced on 31.03.2023 cannot be a ground to hold that the impugned notice was issued on 31.03.2023. The date of the said notice is correctly reflected as 01.04.2023. In addition, it is also pointed out that the DIN Notice Number mentioned in the impugned notice also indicates that the impugned notice was issued in the financial year 2023-24. Thus, we find merit in the contention that the re- assessment proceedings could not have been initiated beyond the period of three years from the end of the relevant assessment year (AY 2019-20) as the income in respect of which the AO has information to suggest that it has escaped assessment, is below the threshold limit of ₹50,00,000/-. The petition is accordingly allowed in assessee's favour. 2024 (11) TMI 1202 Maintainability of appeal on low tax effect - addition u/s 68 - HELD THAT:- As could be seen from paragraph 9 of the Memorandum of Appeal, the tax effect involved in this case is Rs. 1,16,15,310/-. If that be so, the revenue cannot pursue the matter further on account of the circular issued by the Central Board of Direct Tax being Circular No.9 of 2024. Accordingly, the appeal stands disposed of on the ground of low tax effect and the substantial questions of law suggested by the revenue are left open. 2024 (11) TMI 1201 Notice issued u/s 142(1) by non jurisdictional officer - As submitted notice issued by an officer, who is not a prescribed income-tax authority - HELD THAT:- A plain reading of Section 143(2) clearly indicates that either of the two authorities either the Assessing Officer or the prescribed income-tax authority can issue a notice under Section 143(2) of the Act. The expression as the case may be also indicates the same. In the present case, the CBDT had issued a notification dated 12.05.2022 and 28.05.2022, in exercise of powers under Rule 12E of the Rules, and had authorised the Assistant Commissioner of Income Tax/ Deputy Commissioner of Income Tax (International Taxation), Circle 1(1)(1) Delhi to act as the prescribed income-tax authority for the purpose of issuance of notice under Section 143(2) of the Act. The contention that other than the Assessing Officer, only the authorised Income Tax Officers of the National Faceless Assessment Centre (NaFAC) can issue a notice under Section 143(2) of the Act as the same would be in furtherance of automation of such process, is also unmerited. This proposition is not supported by the plain language of Section 143(2) of the Act or Rule 12E of the Rules. Rule 12E of the Rules does not confine the power of the CBDT to authorise only the Income Tax Officers of the NaFAC as the prescribed authority for the purposes of Section 142(1) of the Act. The contention that the prescribed income tax authority can only serve a notice under Section 143(2) of the Act but cannot issue it, is insubstantial. We are unable to accept that the AO did not have the jurisdiction to issue the impugned notice dated 15.07.2024 under Section 142(1) of the Act or that the same is beyond the period of limitation. Once it is accepted that the AO has the jurisdiction to issue a notice under Section 143(2) of the Act which is also the contention of the petitioner in this case the AO cannot be faulted for proceeding to complete the assessment. 2024 (11) TMI 1200 Levy of penalty u/s 271AAC(1) - order passed u/s 144 AO concluded the assessment on best judgment on the basis of document/information available on record and made an addition of Rs. 20 lakh to the total income of the assessee at a special rate u/s 115BBE - HELD THAT:- From the perusal of the aforesaid order passed pursuant to the directions issued by the Tribunal, we find that the AO has accepted the total income declared by the assessee in its return of income and no addition has been made against the assessee. Generally, the AO is at liberty to take a fresh call on the levy of penalty, as per law, in consonance with the fresh assessment as and when framed. As in the present case, in the second round of assessment proceedings, the assessee was assessed at the returned income. Therefore, the penalty levied u/s 271AAC(1) in question before us, in any case, is not sustainable and therefore, is quashed. As a result, the impugned order is set aside and the grounds raised by the assessee are allowed. 2024 (11) TMI 1199 Revision u/s 263 - double grant of TDS credit - revisionary proceedings were initiated in the case of the partnership firm on the basis that vide assessment order passed u/s 147 r.w.s. 144B TDS credit as granted to the partnership firm even though no income has been offered to tax by the partnership firm in its return of income filed - HELD THAT:- Since the TDS as appearing in the name of the partnership firm was only allowed to the partnership firm and not to the LLP, despite the fact that the corresponding income was offered to tax by the LLP, we are of the considered view that no prejudice has been caused to the Revenue in the present case. Hon ble Supreme Court in Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT] held that in order to invoke the provisions of section 263 of the Act, the assessment order must be erroneous and also prejudicial to the interest of the Revenue, and if one of the limbs is absent, i.e., if the order of the Income-tax Officer is erroneous but is not prejudicial to Revenue or if it is not erroneous but is prejudicial to Revenue, recourse cannot be had to section 263 of the Act. Since both the conditions for invoking section 263 of the Act are not satisfied in the present case, therefore, the impugned order passed by the learned PCIT under section 263 of the Act is quashed. Accordingly, the grounds raised by the assessee are allowed. 2024 (11) TMI 1198 TP Adjustment - Rejection of comparable companies selected by the assessee in its TP study analysis - HELD THAT:- Unfortunately, the assessee has sought inclusion of these companies in the TP Study Report, however, for the reasons best known to the TPO, it was stated that these companies were not meeting the search matrix and accordingly, they were rejected by the TPO. Since the assessee has shown us that these companies are appearing in search matrix, therefore, it would be in the interests of justice the issue of inclusion of these companies are remanded back to the file of TPO with a direction to examine whether these companies are functionally comparable with the assessee company or not after applying the applicable filters. If these companies were functionally comparable, then the TPO is directed to include these companies for the purpose of computing the ALP. Thus, these grounds are allowed for statistical purposes. Rejection of comparable on the ground of higher turnover - There is no dispute that while selecting the comparable companies, the TPO has applied one filter of turnover but only minimum turnover filter of Rs. 1 crore was applied by the TPO and no maximum turnover filter was applied. Once the turnover is applied as a filter while selecting the comparables, then there should be a consistent parameter of such turnover filter like 10 times of the turnover of the assessee in both higher as well as lower side. Therefore, applying one side turnover filter by the TPO is not proper and justified. Accordingly, this issue of applying the turnover filter is set aside to the record of the TPO for carrying out necessary exercise for exclusion and inclusion of the comparable companies in the set of comparables while determining the ALP. We may clarify that once the turnover filter is applied as 10 times on the higher side and 1/10th of the lower side, then the same would be applicable to the entire set of comparables and not on the selective companies. Treating deferred receivables as international transaction and adjustments made by the TPO on notional interest - To maintain rule of consistency, this issue is remanded to the record of the AO/TPO for applying savings Bank rate of 6%on the deferred receivables after allowing credit period of 60 days. This issue is partly allowed. 2024 (11) TMI 1197 Addition of unexplained cash credit into bank account u/s 68 - rejection of books of accounts - HELD THAT:- On perusal of the judgment in the case of CIT vs. Bahubali Neminath Muttin [ 2017 (1) TMI 1375 - KARNATAKA HIGH COURT ] it is revealed that in the said case the books were rejected u/s 145(3) by the Ld. AO and at the same time the addition on account of trade creditors, also for the purpose of arriving at a closing stock, books of accounts of the assessee were relied, whereas in present case, Ld. AO have not resorted to the estimation of profit of the assessee, also the books of account of the assessee are rejected, but the quantification of additions qua the cash deposits during the demonetization period was as per undisputed information available from the bank statement of the assessee. It can be safely concluded that the rejected books of accounts have never been relied upon by the Ld. AO. The plea of assessee having been filed the annual VAT returns without filing the quarterly returns after one year cannot support, it was just to recharacterize the sham transaction into a genuine deal. Even the ITR for preceding year AY 2016-17 was filed by the assessee on 15.03.2017, much after the demonetization period, shows such steps are taken to cover bogus transactions. Further, nothing has been brought on record to show that the assessee is functioning with the similar magnitude in the business of trading of pulses in the preceding and succeeding year, thus, the finding of the Ld. AO on the basis of large transactions with the buyers without PAN / unidentifiable and were not produced before the Ld. AO, during the year of demonization and huge cash deposits. CIT(A) had rightly appreciated the facts that the total turnover of assessee of Rs. 93.17 lac includes cash deposit of Rs. 75.69 lacs i.e., almost 81%, during the period 13.11.2016 to 16.12.2016, further the month wise stocks, sales and purchase along with details of cash deposits were not furnished by the assessee. Another aspect observed by the revenue authorities was that the most of transactions were exclusively executed with the sister concern of the assessee, which could not be located by the Income Tax Inspector during the physical verification. In absence of plausible explanations qua the addition s u/s 68 on account of fictitious purchase and sale transaction and personal cash deposit the additions were confirmed by the Ld. CIT(A) correctly. Also applicability of section 115BBE shall apply as per law. Decided against assessee. 2024 (11) TMI 1196 Characterization of receipt - Taxability of arbitral award - taxability of the principal portion of the compensation received - pursuant to the directions of DRP passed the final assessment order wherein the addition in respect of the aforesaid sum was made by holding that the receipts are in the nature of income from other sources under the Act as well as Other Income under Article 22(3) of India-Japan Tax Treaty and brought the same to tax - HELD THAT:- The principal portion of the compensation received pursuant to an Arbitral Award in the sum would have to be construed only as business income of the assessee as it arises out of contractual obligation of the business. Undisputably there is no PE for the assessee in India. Hence in view of Article 7 of India Japan Tax Treaty, the same would not be chargeable to tax in India. Taxability of interest received on the compensation arising out of an Arbitral Award - We find it difficult to comprehend how the interest receipts by the assessee can be treated as receipts which flow to it de hors the business which is carried on by it. In our view, the interest payable to it certainly partakes of the same character as the receipts for the payment of which it was otherwise entitled under the contract and which payment has been delayed as a result of certain disputes between the parties. It cannot be separated from the other amounts granted to the assessee under the award and treated as income from other sources . Respectfully following the same, the interest portion also had to be treated as business income of the assessee and in the absence of PE in India, the same would not be chargeable to tax in India as per Article 7 of India Japan Tax Treaty. No hesitation to hold that the compensation received by the assessee pursuant to an Arbitral Award would have to be construed only as business income of the assessee and in the absence of any PE of the assessee in India, as per Article 7 of the India Japan Tax Treaty, the same would not be chargeable to tax in India. Accordingly, the Ground raised by the assessee are allowed. Double deduction of tax - We find that assessee had already offered interest income to tax in the return of income. AO by adding the total compensation amount had made double addition as admittedly the said figure is included in the total compensation amount. Since the fact of double addition is proved and established beyond doubt, we direct the AO to delete the addition while computing the total income of the assessee in the instant case. Accordingly, the ground raised by the assessee is allowed. Penalty proceedings u/s 270A - Since the entire additions made by the learned AO are hereby directed to be deleted, the penalty proceedings would have no legs to stand. Accordingly, ground is allowed. 2024 (11) TMI 1195 Fee for Technical Services (FTS) - Income deemed to accrue or arise in India - beneficial provisions under India-USA DTAA - Assessee earned income from license of software where it provides the right to use the computer software license through End User License Agreements (EULAs) / reseller agreements to Indian customers which in its opinion, was neither taxable u/s 9(1)(vii) of the Act nor under Article 12 of the India-USA treaty - HELD THAT:- We find that the reliance placed by the assessee on the decision of Engineering Analysis Centre of Excellence Pvt. Ltd. [ 2021 (3) TMI 138 - SUPREME COURT ] is well founded wherein the transaction of the assessee is specifically covered under the second category of software sale stated in the said decision and such sale of software as end-user model or a reseller model granting non-exclusive restrictive license model would not be covered in the definition of royalty as per DTAA and accordingly not taxable in India. AO had relied on the agreement entered into with DXC Technology India Private Limited, wherein a separate clause for providing technical support services was present. In this regard, the assessee had submitted that the services rendered towards maintenance and support are only ancillary to the sale of software license and not any additional services rendered to Indian customers. We find that in any event, the receipts by the assessee from DXC Technology India Private Limited is only Rs 1,20,931/- which constitute 0.11% of the total receipts. Therefore, the learned AO erred in concluding that the whole receipts of the assessee would fall under the same category of technical services, ignoring the fact that 99 percent of the receipts were from two major parties with whom assessee had merely entered reseller agreement without having any provision for technical services. Article 12 of India US treaty defines fee for technical services and it insists that unless the technical services rendered result in making available technological support, technology, technical plan or design etc., only then the said services could be construed as fee for technical services so as to be taxable under the India US treaty. In the instant case, nowhere the lower authorities could bring with cogent evidence on record that the make available clause is duly satisfied so as to enable the end user to use the technology on his own. Hence the said services could not be construed as FTS as per Article 12(4)(b) of India US treaty. Assessee had split its revenue into two components i.e license fees and the support fees and that the support fees are much higher than what has been offered now by the assessee - Assessee submitted that agreements entered into with DXC Technology India Pvt Ltd, JNR Management Resources Pvt Ltd, Adweb Technologies Pvt Ltd and Safe Cyber Solutions Services Pvt Ltd. With respect to remaining customers, the assessee submitted that these parties agreed to the standard terms via click through agreements. The standard terms of these agreements were also furnished before the learned DRP by the assessee. Assessee submitted that the Indian AE does not provide any technical services relating to software sale to the customers in India. We find that the earning of the Indian AE has no relevance to the issue in dispute before us. The learned Assessing Officer had stated that the Indian AE is rendering FTS for Indian customers. We find that there is no specific agreement in place between the AE and its Indian customers. Hence we are unable to comprehend ourselves to accept to the contention of the revenue that the services rendered by Indian AEs are FTS. We hold that the assessee was duly justified in treating the receipts as exempt from tax both under the Act as well as under the treaty in the facts and circumstances of the instant case. Accordingly, the grounds raised by the assessee are allowed. 2024 (11) TMI 1194 Taxability of receipts towards repairs and maintenance services rendered by the assessee - Fee for Technical Services (FTS) u/s 9(1)(vii) of the Income Tax Act or the DTAA between India-Singapore - 'make available' clause - assessee provides repair and maintenance service for aircraft equipment to Indian customers and primary business of the Assessee for which the assessee charge repair and maintenance fees - DR pleaded that the ld AO had applied source rule in the instant case and stated that services of Airbus are rendered in France which is in public knowledge HELD THAT:- We find DRs argument to be completely absurd and devoid of merit in view of the fact that no consideration was received by the assessee from Airbus. Further, this was not even the case of the ld AO for treating the receipts as FTS in the hands of the assessee. We further find that the issue in dispute is squarely covered in the case of Goodrich Corporation [ 2024 (8) TMI 1489 - ITAT DELHI] which is a sister concern of the assessee, wherein, exactly the identical issue was subject matter of consideration as held that the repairs maintenance services are 'not made available' to the clients so that in future they can repair maintain their own. There is no transfer of technology, no transfer of skill or knowledge or processes. There is no imparting of experience or benefit. The Id. DRP wrongly interpreted that the 'enduring benefit' gained by the client by the way of repairs maintenance is akin to 'make available' which cannot be accepted. As such 'make available' clause is not satisfied, the services cannot be treated as FTS as per India-USA DTAA. We hold that the revenue earned by the assessee from rendition of repairs and maintenance services of aircraft equipment cannot be construed as FTS both under the Act as well as under the treaty. Accordingly, Ground Nos. 4 and 5 raised by the assessee are allowed. Chargeability of interest u/s 234A and 234B - If the return of income is filed beyond the prescribed due date u/s 139(1) of the Act, then interest u/s 234A of the Act shall be leviable - AO is directed to examine this fact and decide accordingly. The chargeability of interest u/s 234B of the Act would be consequential in nature. 2024 (11) TMI 1193 Denial of Exemption u/s 11 - Applicability of Section 2(15) - assessee is systematically exploiting its property in commercial way by rendering its services in relation to business of parties to whom it is allowing its space to be utilized commercially like exhibitions of commercial entities, professional artists, corporate meetings, functions etc. - as AO held that the assessee has been using its space for other parties for various purposes which was not related to the objects of the trust and therefore not incidental to the attainment of the objects of the trust - also the assessee has not maintained separate books of accounts and separate balance sheet for these income receipts as required under proviso Section 11(4)A HELD THAT:- As clear from case law Ahmedabad Urban Development Authority [ 2022 (10) TMI 948 - SUPREME COURT ] observation that while actually carrying out the objectives of the general public utility, if some profits are generated, it cannot be granted exemption provided the quantitative limit of 20% under 2nd proviso to Section 2(15) of the Act for the receipts from such profits is not exceeded? The prohibition against carrying on business or service relating to business is not attracted - if the quantum of such profits does not exceed 20% of its overall receipts. These facts and aspect of the case has not been adjudicated upon either by the Ld. AO or by the Ld. CIT(A). Hence, these facts need to be examined by the Ld. AO, therefore we agree with the arguments advanced on behalf of the revenue by the Ld. DR that matter needs to be restored to the Ld. AO. For the above discussions and the submissions made on behalf of parties, the impugned order is accordingly set aside and matter is restored to the file of the Ld. AO for deciding afresh keeping in mind the ratio of the judgment Ahmedabad Urban Development Authority (supra) as discussed. Appeal filed by the revenue is partly allowed for statistical purposes. 2024 (11) TMI 1192 Bogus commodity loss - transaction of purchase and sale of shares effected between the two parties as a mere accommodation entry - capital gain returned by it on the transaction of the sale of land was a mere accommodation entry which it had provided to M/s. Ardor Overseas Pvt. Ltd. - statement of the Directors relied upon - HELD THAT:- Revenue s investigation has revealed the entire modus-operandi of the transactions. And the unusual facts circumstances of the purchase and sale transaction coupled with the modus-operandi revealed which is corroborated by the entire money trail revealed from and back to M/s. Ardor Overseas Pvt. Ltd. through M/s. Matrix International, seals the case of the Revenue of the impugned transactions being the mere accommodation entry for M/s. Ardor Overseas Pvt. Ltd. and M/s. Nikshal Properties Pvt. Ltd. being only a conduit therein. M/s Ardor Overseas Pvt. Ltd. has made no attempt whatsoever to negate the admission by the directors of M/s Nikshal Properties Pvt. Ltd and the other parties involved in the transaction of the same being only an accommodation entry. The admission of the transaction being accommodation entry by the directors/ parties of M/s Nikshal Properties Pvt. Ltd. coupled with the revelation of the modus operandi adopted for this accommodation entry duly corroborated, sufficiently make out a case against M/s Ardor Overseas Ltd. and the onus shifted to them to prove otherwise of the transaction not being an accommodation entry. Mere filing of documents of purchase and sale of land, without controverting the factual averments of the modus operandi of the transaction or for that matter the admission by the directors/ parties of M/s Nikshal Overseas Pvt. Ltd. of the transaction being accommodation entry, we hold, does not discharge the onus of the assessee to prove the genuineness of the transaction. We concur with the Ld.CIT(A) in the case of M/s Ardor Overseas Pvt. Ltd. holding the transaction of purchase and sale of shares effected between the two parties before us as a mere accommodation entry for the benefit of M/s Ardor Oversea Ltd. Accordingly, we confirm the order of the ld. CIT(A) in the case of M/s Ardor Overseas Pvt. Ltd. reducing the cost of land acquired by M/s. Ardor Overseas Pvt. Ltd. by Rs.35 crores and treating it cost to be Rs.8.5 crores only.. Unexplained credit addition - addition made by the AO in the hands of AOPL of loan received from M/s Matrix International treating it as unexplained credit - The reason being the case of the Revenue itself is that M/s Matrix International is only a conduit of M/s AOPL for enabling purchase of land at many times its actual price. That M/s Matrix International is a proprietary concern of the director of AOPL who has transferred funds from M/s Matrix for purchasing land at inflated price and also taken the extra money back through the same route. Money in effect, for funding the bogus purchase transaction from Nikshal Properties, moved from and to M/s Matrix International. And from Matrix International to M/s AOPL as loan. This modus operandi was found to be true. We have agreed with the Revenue on this count while adjudicating the issue of genuineness of transaction of land sold/purchased between AOPL NPPL, above. There is no doubt of the source of money coming into AOPL from M/s Matrix International being genuine. CIT(A), we hold, has rightly deleted the addition made u/s 68 of the Act in the hands of AOPL. Interest disallowance relating to interest paid on unsecured loans from M/s. Matrix International - Since the amount introduced by way of unsecured loans from M/s. Matrix International, has been held to be genuine, we have no hesitation in deleting the disallowance of interest made u/s 36(1)(iii) of the Act. Disallowance u/s 14A - The fact on record is that no exempt income was earned by the assessee. It is settled law now that where no exempt income is earned, no disallowance u/s 14A is warranted. Therefore, the deletion of disallowance of expenses u/s 14A of the Act by the ld. CIT(A) in the case of M/s Ardor Overseas Ltd. is hereby confirmed by us. 2024 (11) TMI 1191 Disallowance of expenditure u/s 14A r.w.r. 8D - as argued assessee has not earned any exempt income during the captioned assessment years - basis for the impugned disallowance by the AO is the amendment brought in the Act which according to the AO was effective from the AYs under consideration whereas the contention of the assessee is that the amendment is prospective and is effective from 01/04/2022 - HELD THAT:- After finding that the assessee has not earned any exempt income during the captioned AYs, we are of the considered view that the issue is no more res integra in light of plethora of judgments of the various Hon ble High Courts. The Hon ble High Court of Delhi in the case of PCIT vs. McDonald s India (P) Ltd. [ 2018 (11) TMI 1057 - DELHI HIGH COURT] had the occasion to consider a similar issue and decided in favour of the assessee and against the revenue. Contention of the revenue that post amendment, brought by Finance Act, 2022, the provisions of Section 14A has been amended and disallowance can be made even if there is no exempt income - The Hon ble High Court of Delhi in the case of PCIT vs. Era Infrastructure (India) Ltd [ 2022 (7) TMI 1093 - DELHI HIGH COURT] has held that Amendment made by Finance Act, 2022 to section 14A by inserting a non-obstante clause and Explanation will take effect from 1-4-2022 and cannot be presumed to have retrospective effects . Moreover, within the memorandum explaining the provision of Finance Bill, 2022, it has been categorically mentioned that This amendment will take effect from 01/04/2022 . Accordingly, appeals of the assessee are allowed. Addition on account of ESOP expenses - CIT(A) deleted the additions - HELD THAT:- Since the decision of the Special Bench of the ITAT Bangalore in Biocon Ltd [ 2013 (8) TMI 629 - ITAT BANGALORE] has been affirmed by the Hon ble Karnataka Hight Court [ 2020 (11) TMI 779 - KARNATAKA HIGH COURT] which has been rightly followed by the ld. CIT(A), we do not find any reason to interfere with the findings of the ld. CIT(A). Accordingly, the captioned appeals by the revenue are dismissed. 2024 (11) TMI 1190 Addition u/s 68 - unexplained cash deposits during the demonetization period - HELD THAT:- Assessee has submitted detailed submissions before the AO that the assessee has regular cash sales and deals only cash sales and regularly deposited the same in the bank and in support of the same, assessee has submitted month-wise cash sales and cash deposits in the bank. It also disclosed the cash sales during demonetization period and cash deposits. Assessee also submitted comparative chart of cash sales and cash deposits during the year in the form of chart before the AO and demonstrated that all the cash deposits are only out of cash sales. AO rejected the same by making certain analysis in the assessment order and further observed that the SBN was banned from 09.11.2016 to use in general market except to meet out some basic necessities and proceeded to make the addition u/s 68 of the Act for total cash deposits made by the assessee during demonetization period. As AO has rejected the cash sales during demonetization period and also observed that SBN was banned from 08.11.2016 and technically rejected the sales from 09.11.2016 with the observation that the assessee should not have accepted the SBN after 08.11.2016. The abovesaid observation of the Assessing Officer is not proper considering the fact that as per the Ordinance No.10/2016 dated 30.12.2016 the prohibition of holding SBN was after 31.12.2016 as per Section 5 of the Ordinance not 08.11.2016. This is supported by RBI Circular on demonetization 2016. Therefore, we are inclined to dismiss ground no.1 raised by the Revenue. Salary expenditure claimed by the assessee paid to brother of the Director/Satya Prakash Sharma - HELD THAT:- Satya Prakash Sharma is a regular employee and key employee of the assessee and whatever salary received by him is properly disclosed in its return of income not only during this year but also in the past which was accepted by the Revenue. Therefore, the disallowance made by the Assessing Officer in the name of Satya Prakash Sharma is not justified and we are inclined to accept the findings of ld. CIT (A) by considering the fact that it is a family owned business. Coming to the other salaries received by the sister-in-law of the Director and wife of the Director - No evidence was brought on record to show that they are employees of the company and no evidence was brought on record to show their rendering of the services in the company. During the hearing, we directed the ld. AR to bring on record appointment letter and qualification of these employees. Even before us, nothing was submitted till now. We are inclined to treat the salary paid to sister-in-law and wife of the Director as unsubstantiated and accordingly, salaries paid to them are sustained as disallowed. The grounds raised by the Revenue are partly allowed. 2024 (11) TMI 1189 Assessment u/s 153A - Unexplained investment in construction of Hotel building - during the course of search proceedings, incriminating documents regarding investment in the construction of Hotel building were found and seized from the premises of the assessee and the valuation of building was done by DVO - CIT(A) deleted addition - HELD THAT:- Action of revenue challenging the addition has no merits and lacks the jurisdiction of the AO u/s. 153A of the Act because the material found in the search of any other person than the assessee in appeal cannot be considered in the assessment under 153A of the assessee. Even that finding of the ld. CIT(A) in the case of the assessee has been decided in detailed in the appeal of the assessee for A. Y. 2010- 11 wherein the ld. CIT(A) categorically held that if any income on this count, is liable to be assessed in the hands of the partnership firm and accordingly, the appellant succeeds on this issue in these terms. Bench further noted that CIT(A) considered the submission and allowed the ground of the assessee. Further, it is noticed that ld. CIT(A) after considering the assessment order, documents and judgments placed on record, remand report and submissions of the assessee passed a detailed and reasoned order. Moreover, the department has merely challenged the quantum addition and not decision of the ld. CIT(A) with respect to allowance of legal ground no. 1 of the assessee in Form No. 35 wherein the legal ground as to challenging the assessment order as time barred and without jurisdiction was decided by the learned CIT(A) in favour of the assessee - Ground No. 1 raised by the revenue is dismissed. Undisclosed income from Garden Mahaveer Paradise - CIT(A) after considering the assessment order, documents and judgments on record, remand report and submissions of the assessee passed a detailed and reasoned order wherein we find no reason to interfere in his order. In this view of the matter, the Ground No. 2 of the Department is dismissed. Unexplained investment u/s 69 in respect of construction of residential house property - Assessee is engaged in the business of sale of construction material viz. Timer, Plywood, Sunmica etc, hence, the assessee is well conversant with various construction persons/business viz. Architects, Builders, Contractors, Carpenters, Other Construction material suppliers etc. As a result, the assessee has taken good advantage of his contacts in construction line, material goods as well as construction services, resulting in further reduction in construction costs to a significant extent. Hence the assessee is further able to save around 10% of the construction costs in this regard. No discrepancy was pointed out by the AO in the registered valuer report, meaning thereby, it was duly accepted otherwise discrepancies have been pointed therein. Moreover, no further opportunity of being heard was provided in respect of variations pointed out in the case of registered valuer report and DVO report. Instead, AO made the addition without considering the objections raised by stating that the objections should have been raised before the DVO. A.O. generally mentioned in the remand report that there are various discrepancies in the valuer report but no specific discrepancy is mentioned in the remand report except PWD rate. CIT(A) considered this and allowed the ground of the assessee considering the assessment order, documents and judgments on record, remand report and submissions of the assessee passed a detailed and reasoned order and we do not find any infirmity in his order. Thus Ground No. 1 read with ground no. 4 of the Department is dismissed. Scope of incriminating documents/ material - After hearing both the parties and perusing the materials available on record, it is noted that incriminating material and not merely material should be found during the course of search for making addition in respect of unabated assessments. The term incriminating is a negative term which means to provide evidence that somebody is guilty of a crime . There is no whisper about any incriminating material found during search in the assessment order or in the remand report. As noted from the query raised by the A.O. as to whether any incriminating material was found and seized during search. Hence, it is evident that no incriminating material was found during search otherwise the AO would have directly asked queries by confronting the incriminating material. As far as construction bills are concerned, these are duly recorded and declared by the assessee as construction investment. These are in the nature of material and not incriminating material. Each and every material found during search cannot be treated as incriminating. The assessing authorities nowhere pointed out any specific bill / document which was not declared by the assessee. CIT(A) duly considered all submissions, judgments, material on record, AO s remand report and allowed the appeal of the assessee by passing a detailed and reasoned order. 2024 (11) TMI 1188 Disallowance u/s 14A r.w.r. 8D - HELD THAT:- As the exempt income earned by the assessee is out of the shares/stock held as stock-in-trade, therefore respectfully following the above decision of the Co-ordinate Bench in assessee's own case for AY 2014-15 [ 2020 (11) TMI 1076 - ITAT MUMBAI ] , we direct the AO to delete the disallowance made u/s 14A r.w.r. 8D. Disallowance of interest paid on IPDI Bonds - interest is not admissible as a deduction u/s 36(1)(iii) for the reason that the bonds are of Perpetual nature, High Loss Absorption Capacity Provisions for write down of principal or conversion to equity on trigger and Discretionary pay out with existence of full coupon discretion - HELD THAT:- We notice that the Co-ordinate Bench in the case of DCIT Vs. State Bank of India [ 2022 (9) TMI 1640 - ITAT MUMBAI] has considered a similar issue and hold that the interest claimed by the assessee is allowable as deduction u/s 36(1)(iii) and the AO is directed to delete the disallowance made in this regard. Taxation of recovery of bad-debts - assessee has reduced an amount from its computation of total income on account of recovery in respect of accounts written off of Rural Branches - AO did not accept the submissions made by the assessee with regard to such adjustment held any recovery in respect of accounts written off of rural branches required to be added back in computation of income - HELD THAT:- AR brought to our attention that a similar issue in assessee's own case for AY 2013-14 [ 2024 (3) TMI 1371 - ITAT MUMBAI] as clear that the AO has held the recovery to be taxable for the reason that the adjustment made to the provision is indirectly charged to P L A/c. This scenario is considered in the above decision and therefore respectfully following the same, we hold that the recovery of bad-debts which has not been claimed as a deduction u/s 36(1)(vii) in earlier years is not taxable. Accordingly, the AO is directed to delete the addition made in this regard. Applicability of provisions of section 115JB on assessee bank - HELD THAT:-As in assessee's own case for AY 2015-16 [ 2024 (9) TMI 789 - ITAT MUMBAI ] the question referred to Special Bench is decided in favour of the assessee banks that clause (b) to sub section (2) of section 115JB of the Income-tax Act inserted by Finance Act, 2012 w.e.f. 1-4-2013, that is, from assessment year 2013-14 onwards, are not applicable to the banks constituted as 'corresponding new bank' in terms of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and therefore, the provision of Section 115JB cannot be applied and consequently, the tax on book profits (MAT) are not applicable to such banks. Addition towards broken period interest - assessee has treated the said amount as revenue and claimed deduction accordingly - HELD THAT:- As relying on Citi Bank [ 2008 (8) TMI 766 - SUPREME COURT ] and HDFC Bank [ 2014 (8) TMI 119 - BOMBAY HIGH COURT ] AO is not correct in making the disallowance towards broken period interest and accordingly we see no infirmity in the order of the CIT(A) in deleting the said disallowance. Amortization of premium paid on HTM Securities - as per AO specific clauses in RBI Circular with regard to accounting treatment cannot be considered for Income tax purposes and accordingly disallowed the amortized premium claimed by the assessee as a deduction - HELD THAT:- We notice that in the case of HDFC Bank Ltd. [ 2014 (8) TMI 119 - BOMBAY HIGH COURT ] while considering the question of law as to whether the ITAT is right in law in holding that the assessee is entitled for deduction with respect to the diminution in value of investment and amortization of premium on investment held to maturity on the ground of mandate by RBI Guidelines thereby ignoring the decision of the Hon'ble Supreme Court in the case of Southern Technologies [ 2010 (1) TMI 5 - SUPREME COURT ] has held that identical question of law was framed and answered in favour of the Assessee by this Court in its judgement of Lord Krishna Bank Ltd. (now merged with HDFC Bank Ltd.) [ 2014 (7) TMI 997 - BOMBAY HIGH COURT ] Decided against revenue. Taxation of unrealized interest on NPA - AO noticed that the assessee has not recognized the interest income pertaining to the NPA on accrual basis and called on the assessee to furnish details and provide explanations - HELD THAT:- As relying on case of ICICI Bank Ltd. [ 2022 (8) TMI 1346 - ITAT MUMBAI ] we uphold the decision of the CIT(A) in deleting the addition made towards interest on NPA. Deduction u/s 36(1)(viii) - CIT(A) remitted the issue back to the AO with a direction to recomputed the deduction based on actual interest on eligible advances after deducting cost and expenses on reasonable basis - HELD THAT:- As in assessee's own case for AY 2014-15 [ 2020 (11) TMI 1076 - ITAT MUMBAI ] decided Tribunal vide order [ 2016 (1) TMI 1427 - ITAT MUMBAI ] has remitted the issue back to the file of Assessing Officer to allow the deduction based on actual interest earned from eligible advances after deducting cost and expenses on reasonable basis. The CIT(A) has restored the issue to Assessing Officer to follow the directions of Tribunal. The Id. Departmental Representative has not brought before the Bench any material to controvert the findings of Tribunal in immediately preceding assessment year. Thus, we see no reason to interfere with the decision of the CIT(A). Sale of Asset to Asset Reconstruction Company (ARC) - assessee has incurred loss on sale of assets to ARC - AO disallowed the said claim rejecting the contention of the assessee that the said amount has been debited in accordance with RBI Guidelines - HELD THAT:- As decided in Bank of India [ 2017 (11) TMI 1812 - ITAT MUMBAI ] following of RBI instruction by a banking company cannot be basis for denying or allowing any claim. It is said that the entries in the books of accounts are not conclusive proof of taxability of any income. What has to be seen is the substance of the transaction. Considering the fact that the assessee had suffered loss while carrying out normal business activity i.e. selling its assets. Therefore, we hold that there was no justification for disallowing the loss suffered in the transaction. We uphold the decision of the CIT(A) in deleting the disallowance made by the AO. Disallowance on payment made to RBI for not following the internal regulations laid down by the AO - CIT(A) deleted Addition during appellate proceedings - HELD THAT:- It is relevant to note that the Explanation-1 to section 37 provides that any expenditure incurred by the assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to be incurred wholly and exclusively for the purpose of business or profession and no deduction shall be allowed in respect of such expenditure. In the above decision of IDBI Bank [ 2021 (2) TMI 608 - ITAT MUMBAI ] ratio laid down is that the penalty levied by RBI for violation of internal regulations does not fall within the purview of Explanation-1 to section 37. In the given case, the amount claimed as deduction by the assessee is with regard to the levy by the RBI for non-compliance of internal regulations with respect to maintenance of currency chest. Accordingly, in our considered view, the ratio laid down by the Co-ordinate Bench is applicable to assessee's case also and therefore we see no infirmity in the decision of the CIT(A) to delete the disallowance made by the AO. Assessee appeal allowed. 2024 (11) TMI 1187 Unexplained Cash deposits during demonetization - Huge sales made by the Assessee from a comparatively smaller station like Parwanoo in comparison to the big station Ludhiana - CIT(A) deleted addition - HELD THAT:- We are of the view that the finding of the ld. CIT(A) is logical and therefore, correct to the extent that once the purchase and stock of the Assessee has been accepted, there is no reasons to deny sale out of such stock and purchase. We also find that the A.O. has not rejected the books of account of the Assessee, so, once cash purchases / sales based on vouchers had been accepted, there is no point in making addition on the deposit of such cash in the bank account, particularity on cash sales. Assessee has explained the source of such cash deposits and it has also explained that such cash sales are subject to VAT where VAT has been collected and deposited with the Government treasury. In support of her explanation, the Assessee has furnished the documents of the relevant period of VAT returns, copy of trading and profit and loss accounts and balance sheets, which are duly audited. We find that the AO has accepted the cash sales and has also accepted the VAT collected and deposited in the Government account. Even the Assessing Officer has accepted the VAT returns filed by the Assessee and accepted by the Indirect Taxes Department. Therefore, it clearly shows that the Assessing Officer has not doubted the availability of cash in the hands of the Assessee. Once availability of cash in the hands of the Assessee is accepted, then deposit of such cash in bank account cannot be rejected. Accepting the cash sale by the Assessee offered to tax, and then addition of same cash deposited in the bank, will amount of double taxation and the same is clearly unsustainable in the law and cannot be justified. Therefore, we find that the explanation offered by the Assessee is genuine, reasonable and duly supported by the documentation, books of account and audited accounts of the Assessee. Therefore, we find no reason to disturb the findings of the ld. CIT(A). Accordingly, Departmental appeal on this issue is dismissed. Insolvency & Bankruptcy 2024 (11) TMI 1186 Seeking equitable treatment with that of other creditors in class - seeking amendment of the Information Memorandum (IM) reflecting the units of the Appellants as cancelled - seeking refund of the amount paid - HELD THAT:- It is to be noted that it is the duty of the RP to collate all the claims filed before him and verify the same from the books of the Corporate Debtor. The submission of the RP agreed upon that it lacks adjudicatory powers on the claims filed before him. The RP could not have reversed the action of cancellation taken by the Corporate Debtor prior to the initiation of CIRP. Even though the allotment were cancelled by erstwhile management of the Corporate Debtor, the Resolution Plan had provided treatment to the said cancelled allottees. And this Resolution Plan was approved by the CoC with 100% majority in their 12th CoC meeting held on 03.08.2023 - Resolution Plan was prepared and filed by the Resolution Applicant in compliance with Section 30 of the Code and later it has been duly approved by the CoC in its commercial wisdom. It is well settled position of law that the Resolution Plan, duly approved by the COC as per their commercial wisdom has a very limited scope of judicial review and which is circumscribed by the provisions contained in Section 31 of the Code. In the instant case, the Appellants had already approached UPRERA, seeking refund of their entire amount, along with the interest which was decreed in their favour. The Applicant had accepted partial amount paid to them from the erstwhile management. The conduct of the allottees in accepting the refund towards their allotment, indicates that allottees have accepted the cancellation of the allotments. In this conspectus, the submissions of the Respondent that the refund, which was initiated by the erstwhile management at the instance of the Appellants, cannot be given a colour of unilateral cancellation of allotment, agreed upon. It is to be noted that the Appellants did not challenge their cancellation of allotment, which was pre-CIRP. It is also clear from records that they have accepted the partial payments basis the decretal amount of UPRERA. Now their primary grievance is qua the cancellation of their respective units. Since earlier they had accepted the money and while filing their claims they misrepresented and filed full claim and are now seeking the revocation of the cancellation of the units - The CoC, RP could not have revoked the cancellation as it was beyond their jurisdiction. In fact, they had gone ahead as per the information collated from the records of the Corporate Debtor. Therefore, the contention of the Appellant that there is a failure to comply with the UPRERA Decree cannot be accepted. The cancellation of the units was based on the UPRERA s Order which was not challenged. The Information Memorandum contained this information and CoC could not have revoked the cancellation and acted within its commercial wisdom approving the Resolution Plan - there are no fault in the due process which was followed by AA - appeal dismissed. Service Tax 2024 (11) TMI 1185 Service tax on reverse charge basis in respect of monthly remuneration paid to its Director or otherwise - As argued remuneration paid to the Director is accounted for as Salary and the TDS under the Income Tax Act, is also deducted under the head of Salary in form-16, thus is not liable for service tax as per negative list under Section 65 B (44) (b) of the Finance Act,1994 HELD THAT:- As the issue in hand is no longer res-integra as it has been conclusively held that any amount paid to the Director under the head of Salary and the TDS is deducted u/s 192 of Income Tax Act, 1961 which is evident from form 16 in the present case, there is no existence of service whereas the payment is towards salary and the relation between the appellant and its Director in this case is of employer employee relationship. Accordingly, as per Section 65 B (44) (b) of Finance Act, 1994 the salary paid to the employee is into negative list and not amount to any service. Appeal allowed. 2024 (11) TMI 1184 Liability to pay service tax on reverse charge basis when service provider has already paid 100% service tax - as argued entire 100% service tax has been paid by the service provider on the manpower supply service and the security and the demand of service tax on the appellant is duplicacy of the demand and the same in any case will not sustain. HELD THAT:- We find that the appellant has received the service of manpower supply and security service. No doubt as per the statute, the appellant being a body corporate is liable to pay the service tax on receipt of such services on reverse charge basis. However, it is also fact that the service provider have paid 100% service tax, in this position, once a particular service suffered the total amount of service tax, demanding the same service tax on the same service even from some other person is not correct as this will amount to double taxation on the same service which in any case is not permissible as decided in the judgment of this Tribunal in the case of Shah Foods Limited. [ 2024 (8) TMI 1405 - CESTAT AHMEDABAD] Thus it is settled that even though, the service recipient is liable to pay service tax on reverse charge basis but once the service provider has paid the service tax, the same service tax cannot be recovered twice from the service recipient. Since, the service tax payment made by the provider of service is correct, the same is admissible as Cenvat credit in the hands of the appellant being a recipient of service. Accordingly, neither the service tax demand against the appellant nor the demand of Cenvat credit of the same amount is sustainable. Appeal allowed. 2024 (11) TMI 1183 Liability of service tax - consideration towards the provision of Business Support Services under Section 65(104c)of the Finance Act,1994 for the purpose of charging service tax - reimbursement of expenses recovered by the appellant from its group companies pursuant to common cost sharing - appellant is a power distribution Company which came in to existence pursuant to the Gujarat Electricity Industry Reorganization Regulation Act 2003 HELD THAT:- Firstly, the sharing of actual expenditure among the group companies does not amount to service. Hence, the same is not taxable. Secondly, by stretch of imagination such activity is not classifiable as business auxiliary service. Sharing of the common expenditure among the group companies does not amount to business support services. Even the said activity does not amount to service. Therefore, following the aforesaid decisions which are on the identical facts of the present case service tax demand is not sustainable. Accordingly, the impugned orders are set aside, appeals are allowed. 2024 (11) TMI 1182 Classification of services - appellant were providing Intermediary services classifiable as business auxiliary services within taxable territory to different foreign recipient - Service Tax returns showing their activity as Export of Service - no Service Tax has been paid on the Commission earned by them from their foreign Service recipient for the period July, 2012 to September, 2015 - department is of the view that the appellant falls under the category of provider of Intermediary services classified under the business auxiliary service within the taxable territory of India to various companies of Schott groups located outside India Invoking extended period - whether the impugned show cause notice is barred by the period of limitation or not? - contended by the appellant that the similar demand was also raised by the department for the period from March, 2005 to September, 2008 and which was dropped by the department and no further demand has been raised after October, 2008 - HELD THAT:- We are of the view that this fact has not been denied by the Adjudicating Authority as well as by the Commissioner (Appeal) in his Order-In-Appeal. We also find that this Tribunal in case of M/s. SNQS International Socks Pvt. Ltd. Vs. CGST C. Ex [ 2023 (11) TMI 898 - CESTAT CHENNAI] , which has also been endorsed by the Apex Court [ 2024 (3) TMI 1045 - SC ORDER] , has decided similar issue in favour of the assesse. We also take note of the fact that the learned Advocate has also submitted certain extra document including certain copies of the purchase orders which indicated that the order were placed directly to foreign supplier and the appellant has relied upon these evidences to support his stand that they have not been working as intermediary rather they have worked as an agent for sale and promotion of the product in India and thus the exported the services to their principals situated outside India. We feel that all the facts were not available with the Adjudicating Authority at the time of adjudicating the matter. We therefore, remand back the matter for the fresh consideration and direct the Adjudicating Authority to give specific finding as to how the extended period of limitation is applicable in the present case. Central Excise 2024 (11) TMI 1181 Maintainability of appeal - monetary limit fixed by the Board for filing appeal - HELD THAT:- In view of the Circular dated 2-11-2023 issued by the Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes Customs fixing the monetary limit upto Rs.2 Crore so far as filing the appeal before the Supreme Court is concerned, these appeals are not pressed. The appeals are accordingly disposed of as not pressed, in view of the monetary limit fixed by the Board. However, the questions of law, if any, are kept open. 2024 (11) TMI 1180 Refund of unutilized CENVAT credit under Rule 5 of CCR 2004 - rejection on the ground that physical export is essential for a refund under Rule 5 ibid and the warehousing procedure did not confer any export benefit to the DTA supplier - procedural infirmities viz. the copy of ARE1 of the export warehouse has not been marked after endorsement by the customs to the range officer in charge of the factory - HELD THAT:- The SCN has pointed to certain procedural defects and the fact that the appellant appears to have sold the goods domestically to the export warehouse from where the ultimate exports were made. Thus as far as the appellant is concerned the clearance remained domestic clearance only, which has not been specified as the clearances due to which the unutilised credit of the Cenvat account can be refunded under the provisions of rule 5 of CCR 2004. The OIO has further found that the appellant herein has not engaged in any manufacturing activity to claim refund under Rule 5 of CCR 2004. The impugned order has also cited the Tribunal decision in Commissioner Vs Tiger Steel Engineering [ 2010 (7) TMI 324 - CESTAT, MUMBAI ]. The facts in the said case are not identical as they relate to the case of an appellant who made supplies to a SEZ unit, who in turn used the goods as raw materials and the resultant final products were exported or cleared to DTA. In this case the fact that the goods are subsequently physically exported by the export warehouse under ARE-1 procedure as laid down under rule 20 of Central Excise Rules read with notification No.46/2001 - Central Excise (N.T.) dated 26/06/2001 and is not in dispute. In its judgment in K.P. Verghese v. Income Tax Officer, Emakulam and Another, [ 1981 (9) TMI 1 - SUPREME COURT ], the Hon ble Apex Court held that for the purpose of interpretation of a taxing statute, the fiscal philosophy, a feel of which is necessary to gather the intent and effect of its different clauses, should be applied. It is found that in the case of a beneficial provision for the export of goods the law should be read liberally. When dealing with a complex economic policy a pragmatic and beneficial solution is to be adopted. As per Circular No. 581/18/2001 CX Dt. 29.06.2001, it has been clarified that refund under Rule 5 of the CCR, 2004 is admissible for supplies to export warehouses also. In such a situation when the ultimate export of the goods are not contested, the refund should be allowed to a DTA unit, even if the physical export was not done by the unit itself, but by the exporter who is registered under Rule 20 of C. Ex. Rules, 2002 and is availing a mechanism provided for as per Boards Circular. Moreso when Rule 5 of CCR, 2004, does not differentiate between deemed exports and physical exports and grants the benefit to any products / goods cleared for export. The impugned order is set aside and the appeals are allowed. 2024 (11) TMI 1179 Application of exemption under exemption N/N. 12/2013-CE dated 17.03.2012 at Sr. No. 332 read with List 8 - paints applied/coated on wind mills for giving protection to non-conventional energy device - HELD THAT:- The parts and component of the main unit namely wind operated electricity generator are those articles which along with others would make up the whole and those were constituents or components or a member of the original unit/goods but paint is something which is applied externally on the whole unit or goods to provide it protection, beauty and perfection. It would be like skin of an organic living being and therefore in the inorganic articles, it acts in the same manner as skin has acted in organic leaving organism. It would be a futile discussion to enter into an argument saying that skin neither helps in pumping the blood in the heart or digesting the food or the like, for which human being can also be considered as a human being without a skin covering its body. In the same manner paints are used to all components as an essential requirement for its protection safety and as an auxiliary requirement to retain its life and beauty. Disallowing exemption to paints , which are applied to exempted goods would be like removal of skin from a human being so as to treat him as skinless individual that can only be possible when he/she is kept in a hospital. The paint is a part and parcel or an essential feature of an element or to say an essential or integral feature of a component as a whole. In a manufacturing industry also, powder coating and painting are used at completion of finishing processes and if the goods are exempted from payment of duty at the time of manufacture, it would also be applied to the goods having colour on it, which could be either an external coating or an internal ingredient and therefore, we consider painted wind mills also as wind operated electricity generator irrespective of its colour to which benefit of exemption notification was all along available and it would be immaterial to bring into it an artificial distinction as to if it is to be treated as component or parts since it is integral to the products itself. The reference made to Hon'ble Bombay High Court order in JOTUN INDIA PRIVATE LIMITED, VERSUS THE UNION OF INDIA THROUGH THE SECRETARY OF FINANCE, DEPARTMENT OF REVENUE, NEW DELHI, THE STATE OF MAHARASHTRA, THE MAHARASHTRA AUTHORITY FOR ADVANCE RULING FOR GOODS AND SERVICES TAX, MUMBAI, THE MAHARASHTRA APPELLATE AUTHORITY FOR ADVANCE RULING FOR GOODS AND SERVICES TAX MUMBAI, [ 2022 (12) TMI 1135 - BOMBAY HIGH COURT] by learned Departmental Representative for the Respondent-Department, since confined to the limited power available under writ jurisdiction, which is completely different from appellate jurisdiction, it is not required to venture into discussion on the applicability of that judgment to the issue which is extraneous to the issue raised here since Hon'ble Court had refrained itself from giving any finding on the observation of the Authority for Advance Ruling that paint is not a part. The order passed by the Commissioner of Central Excise GST, Pune-I vide Order-in-Original No. PUN-EXCUS-001-COM-022-17-18 dated 24.04.2018 is hereby set aside - Appeal allowed. 2024 (11) TMI 1178 CENVAT Credit - outward GTA service used in connection with clearance of excisable goods namely cement from the factory premise to buyer premise - inclusion of cost of transportation in the assessable value - HELD THAT:- The fact is not under dispute that the appellant have undertaken to deliver the goods at the customer s premises. The freight charges of GTA on which Cenvat credit was taken is included in the assessable value of the excisable goods. This is evident from the excise invoice raised by the appellant. From the perusal of the above invoice, it is observed that the freight charges was not separately collected by the appellant, therefore, the same is deemed to be included in the assessable value on which the excise duty was paid. In this identical fact the issue in hand is covered by this Tribunal s judgment in the case of Ultratech Cement Ltd. [ 2019 (2) TMI 1487 - CESTAT AHMEDABAD] which was upheld by the Hon ble Gujarat High Court reported at the Commissioner, Central Goods and Service Tax versus M/s. Ultratech Cement Ltd. [ 2020 (3) TMI 1206 - GUJARAT HIGH COURT ]. The issue involved in the present case is no longer res-integra and accordingly the appellant are entitled for Cenvat credit on outward GTA in the facts of the present case. Hence, the impugned orders are set aside - Appeal allowed. 2024 (11) TMI 1177 Eligibility for Exemption N/N. 3/2005-CE (amended by Notification 12/2012-serial No. 203) in respect of final product namely Pattis and Pattas - denial of exemption on the ground that as per the description of goods the Pattis and Pattas when subjected to any process other than cold rolling, therefore, in order to be eligible for exemption the Pattis and Pattas manufactured by the appellant must undergo any process other than cold rolling - when the description of goods in the exemption entry to be a condition that the Pattis and Pattas should be subjected to any process other than cold rolling and in absence of any process whether the appellant is eligible for exemption? HELD THAT:- This issue has been clarified by the Board whereby it was clarified that even if no process is carried out on Pattis and Pattas, the exemption is available. This issue has been considered in detail relying on the said Circular in case of MULTI METAL INDUSTRIES; MORE METAL INDUSTRIES HAJARILAL RAMCHANDRA SHARMA VERSUS C.C., AHMEDABAD [ 2023 (10) TMI 1457 - CESTAT AHMEDABAD] where it was held that ' In the present case the Hot Rolling process is admittedly the process which is taken place prior to the process of cold rolling, therefore, in view of the clarification, the Hot Rolled Pattas and Pattis are clearly covered under the Notification No 12/.2012- CE dated 17.03.2012 under Sr. No. 203.' From the above decision, it can be seen that very identical issue involved in the present case as well in the case cited above. Therefore, the ratio of the above judgment is directly applicable in the present case. Accordingly, the impugned order in the assessee s appeals are set aside and impugned order in the Revenue s appeal is uphed. Assessee s appeals are allowed. Revenue s appeal is dismissed. 2024 (11) TMI 1176 Levy of Excise duty on the job work goods supplied to the customer - activity of cutting, welding, bending etc. for manufacture of parts of structure - Process amounting of amount to manufacture - HELD THAT:- There are catena of judgments, some of the judgments are contrary. Therefore, it clearly shows that the issue was highly debatable and there is a very thin difference between whether the activity amounts to manufacture or otherwise. Therefore, in such case, the matter can be decided only on the ground of limitation without giving final conclusion to the merit of the case. As regard the issue raised by the appellant for demand being time barred, on careful examination of the facts and record, it is found that it is not a case where the appellant have out rightly evaded the duty, firstly, the activity involved is whether manufacture or otherwise covered by the various judgments cited by the Learned Counsel wherein, in various judgments, it is held that the activity of cutting, welding, bending etc. do not amount to manufacture. At the same time there are contrary judgments to each other and the matter was decided by the Larger Bench in the case of MAHINDRA MAHINDRA LTD. VERSUS CCE., AURANGABAD, CHANDIGARH, KANPUR CHENNAI [ 2005 (11) TMI 103 - CESTAT, NEW DELHI] . However, the specific activity has to be looked into in each and every case, then only this judgment can be applied. Therefore, in this undisputed fact the issue involved is of interpretation of the term manufacturer. Therefore, no malafide intention can be attributed to the appellant. Secondly, the appellant who were registered under service tax and discharging the service tax liability on the very same activity which as per department is amount to manufacture. Once the appellant have under bonafide belief assessed the activity as service and paid the service tax and have been filing their ST-3 return regularly. It was open to the department to question about the nature of activity and can raise the demand if at all they are of belief that the activity is amount to manufacture well within the normal time. In this position, nothing prevented the department to issue show cause notice within the normal period. Therefore, since there is absolutely, no suppression of fact and malafide intention, the demand is hit by limitation. The period of demand is 2011-2013 and show cause notice was issued almost after 3-4 years i.e. on 18.01.2017. Accordingly, entire demand is beyond the normal period. Hence, the same is not sustainable on the ground of limitation itself. Since, the appellant have no malafide intention and they have not suppressed any fact from department with intent to evade payment of duty. For the same reason, no penalty under Section 11 AC is imposable. Accordingly, the demand is set aside only on the ground of limitation without giving the conclusive findings on the merit i.e. whether the activity amounts to manufacture and otherwise. The impugned order is set aside, appeals are allowed. 2024 (11) TMI 1175 Demand of Excise duty with interest and penalty - mis-classification of products as under Chapter Heading 8707 instead of Chapter Heading 8704 - manufacturing goods for mounting on duty-paid Chassis - benefit of N/N. 6/2006-CE dated 01.03.2006 Sl.No.87 as amended by another N/N. 12/2012-CE dated 17.03.2012 Sl.No.334 - Extended period of limitation - HELD THAT:- In MESSRS DISHA ENGINEERS VERSUS C.C.E. -AHMEDABAD-I [ 2022 (5) TMI 476 - CESTAT AHMEDABAD] and M/S AMCL MACHINERY LTD VERSUS COMMISSIONER OF CUSTOMS C. EX. [ 2019 (8) TMI 250 - CESTAT MUMBAI] , the assessee has classified their products under Chapter Heading 8704 and claimed exemption under Notification No.6/2006-CE dated 01.03.2006 Sl.No.87 as amended by another Notification No.12/2012-CE dated 17.03.2012 Sl.No.334, which is not the case in hand. The appellant admittedly classified their products under Chapter 8707 instead of 8704. In that circumstances, the cases relied upon by the ld.Counsel for the appellant, are not applicable to the facts and circumstances of the case. But the appellant agreed upon that as they were filing ER-1 Returns regularly and classified their product under Chapter Heading 8707 claiming exemption Notification No.6/2006-CE dated 01.03.2006 Sl.No.87 as amended by another Notification No.12/2012-CE dated 17.03.2012 Sl.No.334, the extended period of limitation is not invokable. In that circumstances, the extended period of limitation is not invokable in this case. Therefore, the demand pertaining to the extended period of limitation is dropped and in the facts and circumstances of the case, no penalty is imposable on the appellant. The demand pertaining within the limitation is confirmed. Accordingly, the same shall be paid by the appellant along with interest, (if not paid) within 30 days from the date of receipt of this order - No penalty is imposable on the appellant - the appeal is disposed off. 2024 (11) TMI 1174 CENVAT Credit of input services relating to captive mines - Input Service Distributor (ISD) - distribution of credit by the captive mines to the manufacturing units of the SAIL through ISD invoices - HELD THAT:- The issue is no longer res integra as this Tribunal has already decided the same issue in their own case for the period June 2016 to June 2017, in M/S STEEL AUTHORITY OF INDIA LIMITED VERSUS COMMISSIONER OF CGST CENTRAL EXCISE, BOLPUR [ 2023 (12) TMI 1062 - CESTAT KOLKATA] , wherein, on similar facts, it has been held by this Tribunal that the Appellant is entitled to avail CENVAT Credit of input services relating to captive mines. The present appeal covers the period 2006-07 to 2011-12 (up to June 2012), for the same unit. The mines and the Appellant s manufacturing unit belongs to one legal entity, which is engaged in manufacture of dutiable goods. Therefore, the observation given by the Ld. Commissioner that distribution of credit by the mines is in contravention of Rule 7(b) of the CENVAT Credit Rules is legally not tenable. Thus, the distribution of credit by captive mines as ISD is in accordance with the provisions of law. The demands of service tax along with interest and penalty confirmed in the impugned order set aside - appeal allowed. Indian Laws 2024 (11) TMI 1173 Seeking grant of pre-arrest bail - offences punishable under Sections 9, 39, 48 and 48A read with 51 of the Wild Life (Protection) Act, 1972 - capturing six ball pythons, a golden child retic, three striped mud turtles, an Indian star turtle, a marmoset monkey, and an iguana on a specified premises - HELD THAT:- From a cursory reading of Schedule I of the Act, it appears that the Indian star turtle does not form part of this Schedule, and the other animals are included in Appendix I to Schedule I. Under Section 51 of the Act, this violation is punishable for imprisonment for a term upto three years, a fine extended to Rs.1 lakh, or both. It is acknowledged that the applicant was not present during the alleged raid. Upon a perusal of the records, particularly, the leave and license agreement of the premises, it appears that the applicant was neither the owner nor the licensee of the premises. The applicant merely attested to the document as a witness, which in itself does not suggest his involvement in the crime. At this stage, the material on record does not prima facie incriminate the applicant in the present crime. Additionally, the animals have been seized and it is reported that the animals have been relocated as required by law. The prosecution s apprehension about evidence tampering and witness influence can be addressed by imposing appropriate conditions. In these circumstances, this Court is inclined to exercise its discretion in favour of the applicant. In the event of the applicant s arrest in connection with Forest Offence Report No.WL-08-2024 (also registered as WL-61- 2024), he shall be released on bail upon executing a PR Bond of Rs.25,000/- and furnishing one or more sureties in the like amount - Application disposed off. 2024 (11) TMI 1172 Termination of Agreements - specific performance of contract - Balance of Convenience - Irreparable Loss - Section 11 of the Arbitration and Conciliation Act 1996 - HELD THAT:- The scope of interference with discretionary orders of injunction by the appeal Court is quite limited. The appeal Court will not interfere with the exercise of discretion of the Court of first instance and substitute its own discretion except where the discretion is shown to have been exercised arbitrarily, capriciously or perversely or where the Court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against the exercise of discretion is an appeal on principle. The appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the Court below solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial Court reasonably and in judicial manner, the fact that the appellate Court would have taken a different view may not justify interference with the trial Court s exercise of discretion. Any direction to treat the applications under Section 9 as Section 17 applications would involve complications, though it might save paper. Subsequent developments might be difficult to record. Therefore, it would be appropriate to grant the parties leave to file applications under Section 17, which could then be decided without being influenced by this interim arrangement. The above arrangement will operate as an ad-interim arrangement. The parties may file their applications under Section 17 within four weeks from today. The above ad- interim arrangement shall operate until the Arbitral Tribunal disposes of Section 17 applications, if filed or until the Arbitral Tribunal may direct. The Arbitral Tribunal must decide the applications under Section 17 without being influenced by any observations in the impugned judgments and orders dated 20 September 2024 or this judgment and order. The ad-interim orders granted in these Appeals are vacated since now the parties would have to abide by the ad- interim arrangement now indicated. Appeal disposed off. 2024 (11) TMI 1171 Professional misconduct - scope of clause (7) of Part-1 of Second Schedule to the Act - whether, on the basis of the material available on record, the petitioner has been rightly held guilty of professional misconduct, as covered under clause (7) of Part I of the Second Schedule to the Act, and whether an order from this Court under Section 21(6) of the Act is merited? - HELD THAT:- Coordinate Bench of this Court in case of Institute of Chartered Accountants of India, New Delhi v. B.L. Khanna Anr. [ 2000 (9) TMI 1094 - DELHI HIGH COURT ], had the occasion to explain the scope of clause (7) and the meaning of gross negligence . It was held that whether the professional was grossly negligent or not would depend on the fact whether he had applied his mind diligently to the job entrusted to him, and whether due care and caution, as is required to be adopted, was taken. Additionally, it should also be seen whether there was failure to act honestly or reasonably. It was also observed that when a Chartered Accountant signs certificates, minimum that is expected to do is to verify the accuracy of the figures certified. It does appear that the respondent no. 1, on the mere asking of the Society, and without seeking any document from the Society in this regard, had mentioned amount of ₹ 41,000/- as expenditure towards Additional Essential Machinery in the second Utilisation Certificate, and also later certified that this certificate would supersede all the previous certificates issued by him. There was also no reason assigned by him in the said clarification, as to why the second Utilisation Certificate would supersede the previous certificates issued by him. It is noted that in the case of Council of Institute of Chartered Accountants of India v. Dayal Singh FCA, [ 2007 (5) TMI 696 - DELHI HIGH COURT ], the allegations against the respondent therein (a chartered accountant) were that he was instrumental in getting a loan sanctioned from Union Bank of India in favor of an entity, on the basis of forged documents such as quotations, supply orders, money deposit receipts of various firms, rent deed and rent receipts etc., and that he had given a false certificate stating that the concerned entity had brought the contribution required in the books on the basis of which loan had been released from Union Bank of India. Similarly, in The Institute of Chartered Accountants of India v. Manakchand Laxman Baheti, [ 2023 (10) TMI 1101 - BOMBAY HIGH COURT ], the Division Bench of Bombay High Court noted that the reports of the Disciplinary Committee had revealed that the respondent therein (a chartered accountant) had no documents on the basis of which the certificates were issued by him. The certificates simply stated that they had been issued on the specific request of the firm. On being asked to produce documents regarding statements of expenditure incurred by the firms, invoices/vouchers for purchase of plant and machinery for civil work and land development etc., the respondent therein was unable to produce any document. The conduct of the respondent no. 1 in issuing the first Utilisation Certificate would not amount to gross negligence , the fact that while issuing the second Utilisation Certificate dated 28.01.2004, the respondent no. 1 did not seek any document such as invoices or receipts or bank statements or road permit for bringing machinery in the State of Manipur (as it appears from the record) from the Society which would show return of machinery of ₹ 2,50,000/- and purchase of another set of machinery of ₹ 41,000/-, would amount to lack of due diligence and gross negligence on part of the respondent no. 1, more so when the Utilisation Certificates issued by the respondent no. 1 were for the purpose of securing loans from the complainant. The Council has not erred in holding the respondent no. 1, guilty of professional misconduct under clause (7) of Part-I of Second Schedule to the Act - Insofar as the recommendation for removing the name of respondent no. 1 from the Register of Members for one year is concerned, it is noted that the respondent no. 1 has been a member of ICAI for approximately three decades, with no history of any other complaint or allegation of misconduct on record. The present complaint was filed against him in the year 2005, and the proceedings against him have remained pending for about 19 years. Considering that the present proceedings have continued for 19 years without any history of professional misconduct by the respondent no. 1, the ends of justice would be served by severely reprimanding the respondent no. 1, under Section 21(6)(b) of the Act, for his professional misconduct - the present reference is disposed of.
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TMI Tax Updates - e-Newsletter November 28, 2024

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Delayed GST appeals dismissed due to absence of extraordinary circumstances.

Uttar Pradesh Motor Vehicle Taxation Act: Court Upholds Purchase Condition for Exemption.

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Accumulated profits calculation for deemed dividend: Deduct depreciation as per Income-tax Act, not company books.

Pending Income Tax appeals: Stay on recovery until disposal of petitions.

Dividend income taxability, intra-group services' TP adjustment through APA, CSR deduction clarification, interest on late filing, DDT credit verification.

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Banks' tax woes: Disallowances, interest deductibility, bad debt recoveries, MAT applicability & more resolved.

Limited jurisdiction officer validly issued notice for tax assessment under prescribed CBDT rules.

Income tax penalty quashed after AO accepted assessee's declared income in reassessment.

Transfer pricing adjustments questioned, comparables scrutiny ordered. Turnover filter misuse set aside.

Arbitral Award Taxability: Contractual Compensation is Business Income, Non-Taxable in India under India-Japan Tax Treaty.

Software license income not taxable in India under India-US DTAA; non-exclusive licenses not 'royalty'.

Aircraft repair fees not taxable as "Fee for Technical Services"; no technology transfer or enduring benefit.

Charitable trust denied tax exemption for excessive commercial exploitation of premises beyond permitted 20% limit.

Bogus commodity transactions surfaced through complex fund routing for tax benefit.

Cash deposits during demonetization were explained, addition dropped. Director's brother's salary allowed, but not family members' salaries.

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Real estate allottees challenge treatment in resolution plan, but appeal dismissed.

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Accountant penalized for negligent certification without proper verification.

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Directors' remuneration not liable for service tax as employer-employee relationship established.

Service tax paid by provider can't be demanded again from recipient on reverse charge basis for same service.

Taxability of commission earned by 'Intermediary' from foreign service recipients debated: Assessee claimed export, Department viewed domestic service.

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Paints on windmills get tax exemption as integral part, not mere coating.

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TMI Tax Updates - e-Newsletter
November 28, 2024