Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 24, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Validity of assessment order and bank attachment order - Input Tax Credit (ITC) availed of by the petitioner was reversed on the ground that three suppliers had issued credit notes to the petitioner - The High court quashed the impugned assessment order dated 11.08.2023 and remands the matter for reconsideration by the first respondent. - The petitioner is granted the opportunity to reply to the show cause notice within two weeks, and the first respondent is directed to provide a reasonable opportunity for a fresh assessment order within two months thereafter.
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Levy of penalty - no E-Way Bill, invoice and bilty were present in the vehicle carrying the goods - onus to prove (shifting burden) - The High court held that the petitioner failed to rebut the presumption of tax evasion since they could not explain the absence of the invoice and E-Way Bill. Thus, the penalty imposed is upheld, emphasizing that penalties act as deterrents to tax evasion.
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Rejection of ITC claim solely on the ground that the petitioner had not claimed ITC in the GSTR-3B returns - The High court quashes the impugned orders and remands the matters for reconsideration. The petitioner is directed to submit all relevant documents supporting their ITC claims to the assessing officer within two weeks.
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Refund claim - export of service - zero rated supply - receipt in convertible foreign exchange - Amount received through Paypal in Indian currency - The High Court observed that payments received through PayPal, acting as an intermediary, and credited in Indian Rupees after conversion, complied with the FEMA regulations and RBI guidelines. - The court determined that the failure to directly receive payments in foreign currency or produce export invoices does not automatically disqualify the petitioner from refund eligibility, as the essence of the transactions met the criteria for "export of service". - Consequently, the petitioner is entitled for export of tax paid on export and the unutilized input tax credit used in export of service. - Refund allowed.
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Provisional attachment of bank accounts - The appeal is allowed, and the order dismissing the writ petition is set aside. The provisional attachment orders are revoked, allowing the appellant to resume bank account operations and business activities. The respondent authorities are instructed to expedite the adjudication of the show cause notice within three weeks.
Income Tax
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Benefit of Vivad se Vishwas Scheme - The High held that, once the respondents had taken the principled position that the VSV Act would apply even in those matters where the limitation period for filing of appeals had not expired on the specified date, there can be no valid justification to either countenance or draw a distinction between an appeal and a revision. The acceptance of such a distinction would be wholly illogical quite apart from being manifestly arbitrary and violative of Article 14 of the Constitution. - Since the petitioner has already deposited the entire disputed tax liability as computed in terms of the VSV Act, the Form 5 issued during the pendency of these proceedings is accorded finality.
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Recovery proceedings - Attachment of assets of the 4th respondent - alienation/transfer as contrary to section 281 of IT Act - claim of ownership of the property - void sale agreement - The High Court hedl that, Tax Recovery officer is not required to declare the sale between the petitioner and the fourth respondent as invalid as the sale is void abinito. The petitioner has to institute a suit in a civil court to establish the right which he claims over the property in dispute. - Therefore, this writ petition is liable to be dismissed and it is accordingly dismissed.
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Income recognition - advances received from clients - AO observed that “out of pocket expenses” had been exclusively kept out of the books and on reimbursement of the sum by the clients to the assessee, it was the duty of the assessee to route the same through the profit and loss account and in the absence of such course being taken, AO added the same amount to the total income of the assessee - The High Court held that, CIT(A) and ITAT have rightly concluded that the assessee received these advances in a fiduciary capacity for specific purposes, not as income. - It was not trading receipt. Therefore, the respondent/assessee was not under any legal obligation to show it as his receipts of money from the clients. The High court found no merit in the Revenue's reliance on Section 145, noting no factual basis indicating that the conditions of Section 145(3) were met.
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Penalty u/sec. 271(1)(c) - income disclosed in search action - Ex-parte order - The Tribunal observed that the assessee admitted to suppressed receipts, which were disclosed only after a search action and subsequent to the statement recorded under Section 132(4) of the Act. - The disclosure of suppressed receipts in the return filed under Section 153A of the Act did not absolve the assessee from penalty, as per legal precedent.
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Unexplained money - proof of source cash deposited in bank account - proof of cash on hand - the Tribunal noted a lack of clear reasoning in rejecting the assessee's claim, especially regarding the business transactions in cash. Consequently, the Tribunal deleted the impugned addition.
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Penalty u/s 271D / 271E - violation of provisions of Sec.269SS and 269T - basis of presumption u/s 132(4A) - Period of limitation - The Tribunal found that the penalty proceedings were not validly initiated due to the lack of satisfaction recorded in the assessment order regarding the violation of provisions of Sec.269SS. - It determined that the delay in moving the proposal for penalty proceedings after the conclusion of assessment proceedings was in violation of the CBDT Circular.
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Territorial jurisdiction of AO - Validity of notice issued u/s 143(2) and assessment completed by ACIT, Circle-3, Deoghar - Whether curable defect u/s 292BB? - The ITAT quashes the assessment order, finding that the AO acted beyond jurisdiction by issuing notices and conducting assessments without proper territorial authority.
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Fringe Benefit Tax (“FBT”) - business promotion expenses treated as fringe benefit accorded by the assessee to its employees - the expenses are incurred by field staff for giving various gifts, travel facilities, etc. to the Doctors for promoting the products of the assessee - The tribunla held that, in the present case, no material has been brought on record by the Revenue to show that the Doctors were employees of the assessee, therefore, addition made by the AO u/s 115WB(2)(d) and section 115WB(2)(o) of the Act is deleted.
Customs
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Prayer for a direction extending the validity period of Duty Credit Certificate by a period of 15 years - permit use of the Duty Credit Certificate to defray I.G.S.T and G.S.T Compensation Cess - The High Court held that, the notifications and handbook provisions were within the legal authority and did not violate the petitioner's constitutional rights. - The court acknowledged the petitioner's entitlement under the TPS but noted the procedural and legal complexities that affected the utilization of duty credits. It highlighted that the entitlements were subject to the conditions and limitations set forth in the relevant notifications and handbook provisions. - Thus, the Court cannot come to the aid of the petitioner by granting the relief of extending time by 15 years as the same is not based on any concomitant right.
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Whether the confessional statement of the appellant given to the Customs officers u/s 108 of the Customs Act, 1962 though retracted at a later stage, is admissible in evidence and could form basis for conviction? - The High Court held that, the admission that the appellant is a licensed dealer in red sander and he know the exporter John Alexander as Alex of Tutucorin is neither a fact to corroborate the incriminating statement of co-noticee, indicting the appellant. The principle of preponderance of probability been wrongly invoked by CESTAT without any fact either circumstantial or by way of corroboration relate the appellant to the Cargo seized by D.R.I. Not even a remote material available to believe the statement of a tainted person. - If statement of an accomplice accepted without material corroboration, it will be travesty of justice.
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Mis-declaration - Imported goods declared as Indonesia Robusta Coffee - 100% EOU - Goods imported was Coffee husk and not Coffee beans - The High Court observed that, the counsel of the respondent (importer) is right in his submission that confiscation could not be ordered unless goods were seized. Further, since the respondent Unit is 100% EOU, even if there were to be a mistake in declaration, unless it is proved by the Customs Authority that the goods are not re-exported or sold in the domestic market, the entire issue remains revenue neutral in nature. In any event, the CESTAT has reserved liberty to the importer to submit a fresh application under Rule 5(1)(a) of the Rules. In that view of the matter, the Revenue cannot have any grievance. Resultantly, this appeal must fail.
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Conversion of Shipping bill under Drawback scheme to Advance Authorisation scheme - Condition provided in Board's Circular No. 36/2010 - Payment of customs duties on goods exported - The CESTAT observed that, Adjudicating authority concluded that the Appellant was not diligent in maintaining the records and on that ground, the request for amendment is denied. However as per the finding in the order, when certain omissions were brought to the notice of the Appellant, they have verified the records and rectified the same and therefore it cannot be concluded as they are not diligent in maintaining the records. - Thus, the impugned order rejecting the request for conversion of the shipping bill based on the Circular No.36/2010 is set aside.
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100% EOU - Classification of goods - Bill of Entry describes the goods as ‘Indonesia robusta coffee beans’ - On examination found to be Coffee husk/bits - Denial from benefit of Notification No.52/2003-Customs - The CESTAT held that, this Tribunal has already remanded the matter for further examination and verification with regard to the procurement certificate, we also remand the case with the following observations: (i) To examine whether the amended letter of the Development Commissioner allows coffee husk/bits as the raw material for the manufacture of instant coffee. (ii) To obtain a letter from the Coffee Board whether Coffee Husk can be used as a raw material for the manufacture of instant coffee that the appellant intends to export.
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Valuation of imported goods under Rule 9 and 10(1)(c) - addition of payment made towards royalty -100% subsidy of foreign supplier - Related party - The CESTAT observed that, the Royalty is not payable in instances of trading of imported finished goods and on goods repacked in India and it is only for use of technology to produce the products in India. - The Tribunal held that, as seen from the Rules the Original Authority has after rejected all other methods has arrived at the loaded value as per Rule 9 which is last in the sequence. The Commissioner having rejected this method of enhancement of value cannot remand the case for redetermination under any other method as it has already attained finality and there is no appeal on that method of valuation. Hence the remand to redetermine is not sustainable and hence set aside.
Corporate Law
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Prayer for being excused of any criminal liability and relieved of the alleged defaults complained of by the Registrar of Companies (ROC) - section 463(2) of the Companies Act, 2013 - The High court finds merit in the petitioners' argument regarding the offenses being barred by limitation under the Code of Criminal Procedure, 1973. - The court grants relief to the petitioners, excusing them from criminal liability and restraining the respondent from proceeding with criminal proceedings based on the notice dated 6th October, 2020.
Indian Laws
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Dishonour of Cheque - The High Court observed that, the presumption under Section 139 of the N.I. Act is a presumption of law, as distinguished from the presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of innocence, which requires the Prosecution to prove the case against the Accused beyond reasonable doubt - The burden of proof was however on the person who wanted to rebut the presumption. - The court found that the applicant's attempts to rebut the presumption were unsuccessful. The evidence supported the transaction that led to the issuance of the cheques, and the applicant's defense was deemed not credible.
IBC
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Challenge to direction that entire cost be paid by the Applicant/Appellant - Admission of CIRP set aside - Corporate Debtor was NBFC - NCLAT observed that, in a situation where CIRP has been admitted and there is interim order passed by the Appellate Authority to the effect that in the CIRP no final decision shall be taken with regard to resolution plan since the order was challenged on the ground that CIRP cannot proceed against a NBFC, the CoC and the Resolution professional should have been more cautious in proceeding and incurring costs in the CIRP of the Corporate Debtor. - Resolution Professional allowed to appraoch to the Adjudicating Authority to determine the payment of the remaining costs and whether they should be borne by the Appellant or shared among the CoC members and/or Resolution Professional.
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Prayer for condonation of delay of 1197 days and admission of the claim - The appellants argue that their claims should be considered despite the approval of the Resolution Plan by the CoC. They contend that the Corporate Debtor is bound to honor agreements, but the respondents argue that no new claims can be admitted after the approval of the plan. - The NCLAT held that, there is no error has been committed by the Adjudicating Authority in rejecting Applications filed by the Appellants.
PMLA
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Grant of anticipatory bail - money laundering - sale of fake Remdesivir injections to earn huge money from Covid patients - proceeds of crime - Considering the money trail produced by the prosecution, which clearly proves involvement of the applicant in the present case, in which proceeds of crime is Rs. 2,89,00,000/-, this court is of the view that in view of the rigor of section 45 of the Act, 2002, the applicant is not entitled for anticipatory bail.
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Money Laundering - predicate/scheduled offence - proceeds of crime - purchase of papers of Rajasthan Eligibility Examination for Teachers, 2021 (REET, 2021) and its further distribution - As far as applicability of proviso appended to Section 45 (1) of the PMLA is concerned, the above facts clearly show that the amount recovered from the above persons as proceeds of crime is more than Rs. 1 Crore, therefore, the case of the present petitioner does not fall within the ambit of proviso appended to Section 45 (1) of PMLA. - Bail application rejected by the High Court.
Service Tax
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Attachment of property of the partnership firm - Recovery of Service post GST era - The High Court observed that, as regards taxes which had not been recovered, it enables initiation of action for recovery thereof under Section 142 of the CGST Act. Therefore, it was open to the first and second respondents to initiate action under the CGST Act if tax dues had not been recovered under the provisions of the Finance Act 1994. Instead, the petitioner resorted to Section 142 of the Customs Act. Section 142(1) of the Customs Act - the impugned attachment order is quashed by leaving it open to the first and second respondents to initiate appropriate proceedings in accordance with the CGST Act for the recovery of service tax dues.
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Appellant is a juridical person or not - Appellant can be treated as a “trust” or not - service provided to contributories or not - The High Court found that the assessee acts as a ‘pass through’, wherein funds from contributors are consolidated and invested by the investment manager. It acts as a trustee holding the money belonging to contributors to be invested as per the advice of the investment manager - The HC further held that, It is not in dispute that contributors are institutional investors. It is noted that doctrine of mutuality applies when commonality is established between the contributors and participators - In the instant case, the contributors and the trust cannot be dissected as two different entities. - Applying the doctrine of mutuality, demand of service tax set aside.
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Classification of services - Security Services or not - full battalion of the Tripura State Rifles mainly for dedicated deployment to PSU for security services - The Tribunal concludes that the appellant, being a government undertaking, is not engaged in the business of providing security services. Hence, they are not liable to pay service tax under the relevant provisions of the Finance Act, 1994.
Central Excise
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Interest on delayed refund - period prior insertion of the Section 11BB of CEA - As the entire issue is in sequel of the Tribunal order directing payment of due interest as due. Without challenging the direction to pay the interest at appropriate forum the same cannot be challenged in these proceedings whether for the period prior insertion of the Section 11BB before or after, there are no merits in this appeal by the Revenue.
VAT
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Validity of grant of permission to the petitioner’s assessing authority, to re-assess the petitioner - The HC observed that, since, the assessing officer failed to make any specific order of assessment in terms of Section 29(6) of the Act till 30.09.2016, his powers to make the regular assessment stood exhausted. - The High court quashed the reassessment order dated 17.03.2021 and the permission granted for reassessment, deeming them nullities due to lack of jurisdiction and absence of a valid reason to believe that any part of the petitioner's turnover had escaped assessment.
Case Laws:
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GST
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2024 (2) TMI 1129
Validity of assessment order and bank attachment order - Input Tax Credit (ITC) availed of by the petitioner was reversed on the ground that three suppliers had issued credit notes to the petitioner - HELD THAT:- The admitted position is that the entire demand under the assessment order of Rs. 2,82,760/- was satisfied by way of the remittance made by the bank to the tax department. Consequently, revenue interest is fully protected at this juncture. If the contention of the petitioner that no supplies were effected by Abhishek Steel Industries Limited is found to be correct, the reversal of ITC to that extent may warrant revision. Solely for this reason, the impugned order calls for interference. The impugned assessment order dated 11.08.2023 is quashed and the matter is remanded for re-consideration by the first respondent. The petitioner is permitted to submit a reply to the show cause notice dated 11.07.2023 within a maximum period of two weeks from the date of receipt of a copy of this order - Petition allowed by way of remand.
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2024 (2) TMI 1128
Levy of penalty - no E-Way Bill, invoice and bilty were present in the vehicle carrying the goods - onus to prove (shifting burden) - burden of proof with regard to intention to evade tax shifts from the Department to the assessee - HELD THAT:- In the present case, the facts are undisputed that neither invoice nor E-Way Bill were accompanying the goods. Such a contravention to the Rules cannot be treated to be a mere technical or typographical mistake, and accordingly, in such cases, the burden of proof for establishing that there was no mens rea for evasion of taxes shifts to the assessee - This Court in umpteen cases where penalties were being imposed under Section 129 of the Act though held that an intention to evade tax should be present, however, in the event the goods are not accompanied by the invoice or the e-way bill, a presumption may be raised that there is an intention to evade tax. Such a presumption of evasion of tax then becomes rebuttable by the materials to be provided by the owner/transporter of the goods. In the present case, one comes to an inexorable conclusion that the petitioner has not been able to rebut the presumption of evasion of taxes, as he has not been able to explain the absence of invoice and the E-Way Bill. Production of these documents subsequent to the interception cannot absolve the petitioner from the liability of penalty as the very purpose of imposing penalty is to act as a deterrent to persons who intend to avoid paying taxes owed to the Government. It is clear that if the goods had not been intercepted, the Government would have been out of its pocket with respect to the GST payable on the said goods. Thus, no interference is required with regard to the impugned orders - petition dismissed.
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2024 (2) TMI 1127
Input Tax Credit - credit claimed and availed of by the petitioner under the TNVAT Act held to be wrongly availed - HELD THAT:- The petitioner has placed on record the reply dated 01.12.2020, which bears the signature of the recepient and is dated 02.12.2020. The said communication refers to three refund orders, specifies the order numbers and the corresponding refund amounts. The communication also records that copies of the refund orders are enclosed with the communication. In these facts and circumstances, the interest of justice warrants that the petitioner be provided an opportunity to place these documents for the consideration of the assessing officer. Solely for that reason, the order impugned herein calls for interference. The impugned order dated 29.12.2023 is quashed and the matter is remanded for re-consideration. The petitioner shall submit all relevant documents to the assessing officer within a maximum period of two weeks from the date of receipt of a copy of this order - Petition disposed off.
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2024 (2) TMI 1126
Validity of separate assessment orders - ITC claim rejected solely on the ground that the petitioner had not claimed ITC in the GSTR-3B returns - HELD THAT:- When the registered person asserts that he is eligible for ITC by referring to GSTR-2A and GSTR-9 returns, the assessing officer should examine whether the ITC claim is valid by examining all relevant documents, including by calling upon the registered person to provide such documents. In this case, it appears that the claim was rejected entirely on the ground that the GSTR-3B returns did not reflect the ITC claim. Therefore, interference is warranted with the orders impugned herein. The orders impugned herein are quashed and these matters are remanded for reconsideration. The petitioner is permitted to place all documents pertaining to its ITC claims before the assessing officer within a maximum period of two weeks from the date of receipt of a copy of this order - Petition disposed off.
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2024 (2) TMI 1125
Seeking grant of Anticipatory bail - availing and utilizing fraudulent ITC on the basis of the fake tax invoice, without receiving the goods or services or both - petitioner has joined in the investigation and is neither required for further investigation nor for any custodial interrogation - HELD THAT:- Keeping in view of the fact that the petitioner had joined the investigation consequent to the orders dated 21.04.2022 and 14.12.2022 passed by this Court, interim bail granted vide orders dated 21.04.2022 and 14.12.2022 is hereby confirmed, subject to conditions as envisaged under Section 438(2) Cr.P.C. Further the petitioner is directed to join investigation as and when required in future by way of written notice for such purpose to be served by Investigating Officer of this case upon the petitioner; he will not tamper with the evidence nor will influence the witnesses and will not leave the country without prior permission of the Court. Petition allowed.
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2024 (2) TMI 1124
Violation of principles of natural justice - personal hearing was not provided to the petitioner - HELD THAT:- Section 75(4) of the Tamil Nadu State Goods and Services Tax Act, 2017 mandates that a personal hearing be given either if such hearing is requested for or if an order adverse to the assessee is proposed to be issued. In the case at hand, by reply dated 24.10.2023, the petitioner expressly requested for a personal hearing. Such personal hearing was not granted. As pointed out by learned counsel for the petitioner, several findings were recorded in the impugned assessment order on the ground that the petitioner did not provide supporting documents. The matter is remanded for reconsideration. The assessing officer is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, take into account documents produced by the petitioner and, thereafter, issue a fresh assessment order - Petition disposed off by way of remand.
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2024 (2) TMI 1123
Cancellation of GST registration of the petitioner with retrospective effect - notice does not specify any cogent reason, and merely states others - violation of principles of natural justice - HELD THAT:- In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. The registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. It is important to note that, according to the respondent, one of the consequences for cancelling a tax payer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period. Although, we do not consider it apposite to examine this aspect but assuming that the respondent s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted - Further, there is no reasoning in the said show cause notice and in the impugned order as to why the cancellation has been done retrospectively. The impugned show cause notice dated 20.07.2023, order of cancellation dated 02.08.2023 are accordingly set aside. GST registration of the petitioner is restored - Petition allowed.
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2024 (2) TMI 1122
Cancellation of GST registration of the petitioner with retrospective effect - SCN does not specify any cogent reason, and merely states not filed returns for a continuous period of six months - Violation of principles of natural justice - HELD THAT:- In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer s registration is required to be cancelled with retrospective date also covering the period when the returns were filed, and the taxpayer was compliant. It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the taxpayer during such period - it is not considered apposite to examine this aspect but assuming that the respondent s contention in required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer's registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. Further, there is no reasoning in the said show cause notice and in the impugned order as to why the cancellation has been done retrospectively. The impugned show cause notice dated 11.02.2021 and order of cancellation dated 19.04.2021 are accordingly set aside - petition allowed.
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2024 (2) TMI 1121
Refund claim - export of service - zero rated supply - receipt in convertible foreign exchange - Paypal directly credits the amounts received in Indian currency directly into the petitioner's account. - whether the petitioner is entitled for refund of the tax borne on input and final service exported to its overseas customers? - HELD THAT:- There is no dispute that the petitioner is providing services of its clients through its online portal to customers/client. The payments for the services provided by the petitioner are routed through an intermediary namely Paypal with whom the petitioner has an arrangement - As an intermediary, Paypal directly credits the amounts received in Indian currency directly into the petitioner's account. As far as export proceeds, the amounts are received in convertible foreign exchange by the said intermediary namely Paypal. The amounts are first credited into its account with CITI Bank of the said intermediary namely Paypal. Thereafter, amounts in Indian currency are transferred from the intermediaries CITI Bank account to the petitioner's account with HDFC Bank after deduction of its service charges. As per Regulation 3(2)(b) of the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016 any other mode of receipt of export proceeds for an export from India in accordance with the directions issued by the Reserve Bank of India to authorized dealers from time to time - Thus, if payments are routed through an intermediary to person like petitioner, the intermediary should be an authorised person to receive such payment in convertible foreign exchange. As an intermediary, the petitioner is required to only credit the amounts in convertible foreign exchange into Reserve Bank of India. Merely because the receipts are rooted through the intermediary and received in Indian currency ipso facto would not mean that the petitioner has not exported services within the meaning of Section 2(6) of the IGST Act, 2017. Receipt of payment by an intermediary for and on behalf of its client like the petitioner will qualify as payment received by the client. As the only requirement is with the payments received is freely convertible foreign exchange has to be directly remitted into the authorized dealers account as otherwise an intermediary will be violate the requirements of the foreign exchange. Thus, without doubt, the petitioner is entitled for refund. Reference to Circular No.88/07/2019-GST dated 01.02.2019 to concluded that the petitioner has not realized the amount in freely convertible foreign exchange therefore cannot be countenanced. The impugned order passed by the 1st respondent Additional Commissioner (Appeals I) upholding the orders passed by the 2nd respondent is unsustainable and is therefore liable to be set aside and is accordingly set aside - Petition allowed.
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2024 (2) TMI 1120
Seeking release of provisionally attached bank accounts - 13 provisional orders - Petition was dismissed on the ground of disputed questions of fact - HELD THAT:- Considering the fact that the show cause notice dated 06.12.2023 is yet to be adjudicated, an order of provisional attachment that too 13 in number by attaching all the bank accounts of the appellant is very harsh, more particularly, when there is no material on record to indicate that there is an attempt made by the appellant to evade the payment of tax. That apart, the tax and interest which is payable is yet to be adjudicated as the matter is still in the stage of the show cause notice. Therefore, at this juncture, the orders of provisional attachment of all the bank accounts of the appellant cannot be sustained. The order passed in the writ petition is set aside and the writ petition stands allowed.
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Income Tax
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2024 (2) TMI 1119
Allowable business expenditure - commercial expediency - Disallowance of claim of expenditure on the ground that it was not incurred wholly and exclusively for the purposes of the business - e xpenditure incurred by the Assessee in the form of loans and advances to its subsidiaries which were subsequently written off - as decided by HC [ 2022 (11) TMI 782 - ORISSA HIGH COURT] expenditure was in the nature of moneys advanced to the subsidiaries, it cannot be said that there is no intimate connection between the Assessee and the two subsidiaries as far as the business activities are concerned. HELD THAT:- There is a gross delay of 340 days in filing the special leave petition. We are not satisfied with the explanation offered for condonation of delay. Hence, the application seeking condonation of delay is dismissed. Consequently, the special leave petition is also dismissed keeping open the question of law, if any.
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2024 (2) TMI 1118
Principle of grossing up u/s 195A - TDS u/s 195 on the amount payable to University of Warwick, UK - Whether the grossing up has to be done to arrive at the tax to be deducted at source? - as decided by HC [ 2018 (9) TMI 81 - MADRAS HIGH COURT] obligation to pay the tax is on the University of Warwick and since the assessee in terms of the agreement agreed to pay the taxes, the same has to be necessarily added to the income of the University of Warwick and therefore, the principle of grossing up has to be applied. HELD THAT:- Special Leave Petitions are dismissed as withdrawn, However, the question of law is kept open. Pending application(s), if any, shall stand disposed of.
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2024 (2) TMI 1117
Validity of Reopening of assessment - scrutiny assessment concluded - reasons to believe - sale of teakwood trees for year consideration were not genuine - As decided by HC [ 2017 (6) TMI 605 - GUJARAT HIGH COURT] AO had recorded elaborate reasons to prima facie demonstrate that the figures of sale of teakwood trees for year consideration were not genuine if, at all, exaggerated and also in cases of sham transactions, the assessee cannot avoid the re-opening on the ground that earlier the issue was scrutinized HELD THAT:- As petitioner submits that the present petition has become infructuous in view of the assessment order having been passed during the pendency of the Special Leave Petition. In view of the statement made, the Special Leave Petition is dismissed as having become infructuous. Pending application, if any, shall stand disposed of.
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2024 (2) TMI 1116
Benefit of Vivad se Vishwas Scheme - Which appeals are covered under the Vivad se Vishwas? - whether the filing of the revision after the specified date but within the period of limitation as available rendered the petitioners ineligible from availing the beneficial coverage of the VSV Act. HELD THAT:- CBDT had clearly provided that the provisions of the VSV Act would also extend to those disputes which emanated from orders passed under the Act and which could be appealed against and the limitation for preferment of those appeals having not come to an end prior to the specified date. Undisputedly, the period of limitation for the preferment of a revision could not be said to have come to an end on 31 January 2020 bearing in mind the provisions of the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 and the orders passed on Suo Moto 3/2020. The limitation for filing a revision in terms of the aforesaid thus travelled beyond the specified date of 31 January 2020. In our considered opinion, once the respondents had taken the principled position that the VSV Act would apply even in those matters where the limitation period for filing of appeals had not expired on the specified date, there can be no valid justification to either countenance or draw a distinction between an appeal and a revision . The acceptance of such a distinction would be wholly illogical quite apart from being manifestly arbitrary and violative of Article 14 of the Constitution. The respondents, having accepted the directive of the CBDT insofar as appeals are concerned, cannot be permitted to justifiably take the position that the same would not extend to revisions. Once the CBDT had clarified that cases where the limitation for filing of appeals had not expired on 31 January 2020 would also be covered, it would be wholly unfair to hold that the same principle would not apply to a revision. More importantly, the clarificatory directive of the Board must be interpreted and understood in light of the underlying legislative policy of the VSV Act of providing an avenue for settlement of disputes coupled with the insurmountable challenges which were faced by people during the pandemic. If the clarification were to be viewed in that light it becomes apparent that the core theme of the Board directive was to extend the beneficial reach of the VSV Act even to those cases where assessees still retained the right to question an adverse order or decision on the specified date and where the law itself conferred upon them a right to raise such a challenge. There thus exists no justification to restrict the ambit of the clarification merely to appeals and exclude other avenues of redress which were otherwise available to be pursued on the specified date. In our considered opinion, the Scheme as well as the provisions of the VSV Act constitute beneficial legislation and are liable to be construed and interpreted accordingly. We allow the instant petition and quash the notifications of rejection impugned in the present petition. Since the petitioner has already deposited the entire disputed tax liability as computed in terms of the VSV Act, the Form 5 issued during the pendency of these proceedings is accorded finality.
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2024 (2) TMI 1115
Recovery proceedings - Attachment of assets of the 4th respondent - alienation/transfer as contrary to section 281 of IT Act - claim of ownership of the property - void sale agreement - as alleged sale by an assessee in default with an intention to defraud revenue Whether the impugned order is liable to be quashed or whether the petitioner or the fourth respondent should be relegated to approach the Civil court in terms of the Section 11(6) of the Second Schedule to the Income Tax Act, 1961 or whether the fourth respondent who has failed to file the Civil suit in terms of decision of the Hon'ble Supreme Court in [ 2017 (10) TMI 1648 - SC ORDER] is entitled to have audience before this Court. HELD THAT:- Tax Recovery Officer has to examine who is in possession of the property and in what capacity. Tax Recovery Officer can attach property in possession of the assessee in his own right, or in possession of the tenant or 3rd party on behalf of/for the benefit of the assessee. The Court however concluded that Tax Recovery Officer cannot declare sale made by the assessee in favour of a 3rd party as void, if he finds that the property of the assessee was transferred by the assessee to a 3rd party with an intention to defraud the revenue . As mentioned above, the expression intention has been deleted in the amended Section. The Court further held that, the Income Tax Department will have to file a suit in terms of Rule 11 (6) of the 2nd Schedule of the Income Tax Act, 1961, though under Rule 11 (6) of the 2nd Schedule of the Income Tax Act, 1961, the party against whom an order of attachment is made, has to institute a suit in a civil court to establish the right which he claims over the property in dispute and subject to the result of such suit (if any), the order of the Tax Recovery Officer shall be conclusive. Therefore, the ratio laid down by the Hon'ble Supreme Court in Tax Recovery officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade [ 1998 (9) TMI 1 - SUPREME COURT] cannot be applied to the facts of the present case. Further, Tax Recovery officer is not required to declare the sale between the petitioner and the fourth respondent as invalid as the sale is void abinito. The petitioner has to institute a suit in a civil court to establish the right which he claims over the property in dispute. Therefore, this writ petition is liable to be dismissed and it is accordingly dismissed.
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2024 (2) TMI 1114
Income recognition - advances received from clients - reimbursement / out of pocket expenses - manner in which books are being kept u/s 145 - assessee solicitor firm receives advances from clients in pre-post expenditure basis and the payments are made on behalf of the clients - AO observed that out of pocket expenses had been exclusively kept out of the books and on reimbursement of the sum by the clients to the assessee, it was the duty of the assessee to route the same through the profit and loss account and in the absence of such course being taken, AO added the same amount to the total income of the assessee HELD THAT:- The solicitor is the agent of the client. The client makes over the money to the solicitor for some work being done by the Solicitor as his agent. The money must be employed to that purpose and must not be treated as money received for any other purpose. This position is not altered by the fact that the solicitor retains a lien upon the balance of the money for his costs. The result of solicitor having a lien on the balance of the money is no more than a person having a charge on somebody else's money. We are of the opinion that when a solicitor receives money from his client, he does not do so as a trading receipt but he receives the money of the principal in his capacity as an agent and that also in a fiduciary capacity. The money so received does not have any profit-making quality about it when received. It remains money received by a solicitor as client's money for being employed in the client s cause. The solicitor remains liable to account by this money to his client. We are of the view that the monies received by assessee from clients were held by the assessee in a fiduciary capacity. The money received by the assessee was the money of the principal which was received by him as the agent in a fiduciary capacity for being employed for the work of the principal (clients) entrusted to him. It was not trading receipt. Therefore, the respondent/assessee was not under any legal obligation to show it as his receipts of money from the clients. Even factually, since the money received from clients by the respondent/assessee was not his money, therefore, the assessee could not have entered it in his accounts as his money. That apart, the payments made by the assessee as agent on behalf of his client (principal) under various heads, have not been doubted or disputed and instead a finding of fact regarding such payments have been arrived at by the CIT(A) and the Tribunal. The effect of receipt of money as agent stood neutralised by payment thereof on behalf of the principal (clients). Hence, effect of receipts stood neutralised in so far as the determination of income liable to tax is concerned. Ld' Counsel for the appellant has placed much reliance upon the provisions of Section 145 of the Act, 1961. We find on facts of the present case that no adverse inference on the basis of Section 145 can be drawn against the assessee inasmuch as it is not the case of the revenue that sub-Section (3) of Section 145 is attracted on facts of the present case. Even, learned Counsel for the appellants, despite being asked by us repeatedly, could not point out from the assessment order that any of the conditions as contained in sub-Section (3) of Section 145, factually existed. Substantial question of law as framed is answered in favour of the assessee and against the revenue
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2024 (2) TMI 1113
Appeal of the assessee dismissed ex-parte before the revenue authorities - Denial of natural justice - contention of the AR is that neither the assessee nor his representative has received any notices for hearing to prosecute assessee s case with available material evidences and as pleaded to afford another opportunity before the CIT(A) to substantiate his case with evidences. HELD THAT:- Keeping in view the principles of natural justice, remit the matter back to the file of the Ld.CIT(A) to afford one more opportunity of being heard to the assessee. Assessee is directed to adhere to the notices issued by the department and cooperate with the proceedings of the revenue authorities. Hence, the grounds raised by the assessee are allowed for statistical purpose.
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2024 (2) TMI 1112
Taxability of income in India - income accrue or arise in India or not - make available any technical knowledge, skill, know-how or process or not? - HELD THAT:- As relying on assessee own case [ 2022 (11) TMI 1313 - ITAT PUNE] for A.Y. 2017-18 as assessee is entitled for benefit of India USA DTAA and since the condition of make available has not been satisfied in the case of the assessee, the services are not taxable in India. Accordingly, we allow the appeal of the assessee.
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2024 (2) TMI 1111
Penalty u/sec. 271(1)(c) - income disclosed in search action - only contention that has been submitted by the assessee in his defence on merits is that he has declared the suppressed receipts amount in his return of income filed u/sec. 153A - HELD THAT:- In the case of CIT v. Prasanna Duga [ 2015 (5) TMI 317 - CALCUTTA HIGH COURT] has held that even subsequent to search, if the assessee voluntarily discloses a sum and offers the same to tax, since the said amount was not disclosed in original return, penalty levied u/sec. 271(1)(c) was justified. SLP against the same decision was dismissed in Prasanna Dugar [ 2015 (8) TMI 477 - SC ORDER] holding that even if assessee voluntarily disclosed a sum subsequent to search and offered said sum to tax, penalty levied under sec. 271(1)(c) r.w. Explanation 5A was justified. Reverting to the present fact situation, it is evident that due to search action, it was disclosed that there had been suppression of receipts by the assessee. This suppression of receipts was also later on admitted by the assessee vide his statement u/sec.132(4). The suppress receipts were even disclosed as additional income in the return filed u/sec. 153A of the Act by the assessee. But the fact remains that if search had not taken place, then these suppressed receipts would not have been discovered and would have escaped being taxed. This is a definite case of concealment of income. Thus even on merits also, we do not find any infirmity in the findings of the ld. CIT(A) in upholding the levy of penalty u/sec. 271(1)(c) of the Act. All the grounds, in both the appeals, raised by the assessee stands dismissed.
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2024 (2) TMI 1110
Unexplained money - proof of source cash deposited in bank account - proof of cash on hand - HELD THAT:- From CIT(A)'s order it is clear that the assessee s claim regarding cash in hand was rejected but without giving any reason for the same. If the assessee s contention is that it had turnover exceeding the limit u/s 44AD, the learned CIT(A) ought to have taken action in accordance with law. However, he merely sustained the addition made by the AO. Therefore, the claim of the assessee regarding business transaction in cash is not adverted by the lower authorities by giving a clear finding. Therefore assessee having cash in hand cannot be rejected. The impugned addition is hereby deleted. Grounds raised by the assessee are allowed.
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2024 (2) TMI 1109
Addition of agricultural income - Admission of additional evidence to substantiate agriculture activities of assessee - HELD THAT:- During the hearing, AR placed on record the surveyors report, wherein the land used for agriculture activities, types of trees, and other activities are mentioned. Accordingly, the learned AR submitted that the land measuring 66.8135 Hector was used for the plantation of mango, cashew, coconut, pineapple, banana, jackfruit, chikoo, jamun, bamboo, and animal feeding plantation. Thus, it is the claim of the assessee that apart from the 7/12 extract the aforesaid surveyors report also justifies the claim of the assessee that an amount of Rs. 22.70 lakh is the agriculture income of the assessee. Since the aforesaid document, now placed as additional evidence, was not considered by any of the lower authorities, therefore, in the interest of justice, we deem it appropriate to restore this issue to the file of the jurisdictional AO for de novo adjudication after consideration of the additional document furnished by the assessee - We also direct the AO to conduct thorough verification/examination of all the aspects pertaining to the claim of income as agricultural income - As a result, ground no. 1 raised in assessee s appeal is allowed for statistical purposes. LTCG - Exemption u/s 54F - claim denied as vacant and peaceful possession of the residential house is not handed over to the assessee as full and final consideration is not paid - During the hearing, in support of the claim that the assessee is the lawful owner of the flat and the share certificate by the Co-operative Housing Society has also been transferred in its name, reference was made to the copy of share certificate issued by Housing Society - HELD THAT:- It is evident from the record that the aforesaid documents have not been considered by the lower authorities and the claim of the assessee was rejected u/s 54F on the basis that the assessee is not the owner of the flat. Therefore, in the interest of justice, we deem it appropriate to restore this issue to the file of the jurisdictional AO for de novo adjudication after consideration of all the material as furnished by the assessee. Appeal by the assessee allowed for statistical purposes.
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2024 (2) TMI 1108
Deduction u/s 80IA - copy of Form 10CCB was not e-filed separately within due date - mandatory v/s directory obligation - Against the same, the assessee filed revised return of income and on the same day, the assessee filed copy of Form 10CCB electronically, still, the claim was denied by CPC - HELD THAT:- We find that this issue is squarely covered in assessee s favor by the decision of G.M. Knitting Industries P. Ltd [ 2015 (11) TMI 397 - SC ORDER] as affirming the decision of AKS Alloys P. Ltd [ 2011 (12) TMI 39 - MADRAS HIGH COURT] wherein it was held that when a relief is sought for under Section 80IB of the Act, there is no obligation on the part of the assessee to file return accompanied by the audit report, thereby, holding that the same is not mandatory. Therefore, it is clear that before the assessment is completed if such report is filed, no fault could be found against the assessee. Filing of audit report along with the return was not mandatory but directory and that if the audit report was filed at any time before the framing of the assessment, the requirement of the provisions of the Act should be held to have been met. See A.N. Arunachalam [ 1994 (1) TMI 65 - MADRAS HIGH COURT] and in CIT v. Jayant Patel [ 1998 (9) TMI 6 - MADRAS HIGH COURT] - Thus we direct Ld. AO to allow the impugned deduction u/s 80IA. Disallowance u/s 36(i)(va) for late payment of PF dues - HELD THAT:- This seem to be double disallowance since this disallowance has already been offered by the assessee suo-moto in the computation of income. The AO is directed to verify the same and delete this disallowance, if the submissions of Ld. AR are found to be correct. This ground stand allowed for statistical purpose.
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2024 (2) TMI 1107
Assessment u/s 153C - Penalty u/s 271D / 271E - violation of provisions of Sec.269SS and 269T - basis of presumption u/s 132(4A) - Period of limitation - assessee is a third party - assessee reiterated that it had no connection with the cash payments and receipts as mentioned in the seized material of M/s Vels group and these entries were merely one-sided entries only - HELD THAT:- In the seized material which is found from third party premises, it was alleged that the assessee received cash loan in violation of provisions of Sec.269SS - This allegation was on the basis of presumption u/s 132(4A) which provide that where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person and the contents of such books of account and other documents are true.This presumption is rebuttable one and operates only against the person in whose possession the books of account, other documents, money, bullion, jewellery or other valuable article or thing is found. The assessee is a third party and therefore, this presumption could not be raised against the assessee. Connection with the cash payments and receipts - So far as the assessee is concerned, he has denied having received any such loan. To support the same, the assessee also filed confirmatory letter from the other party that no such cash transactions have taken place between the assessee and the other group. No further enquiry has been made by Ld. AO to corroborate the receipt of loan by the assessee. The allegation is merely on the basis of one-sided entries found in the premises of a third party. Therefore, the impugned penalty could not be sustained considering this point. As undisputed AO has moved a proposal to appropriate authority for initiation for proceedings u/s 271D on 26.05.2022 whereas the assessment order was passed on 28.09.2021. The proposal has been moved nearly 8 months after completion of assessment proceedings. The same is in violation of CBDT Circular no. 09/DV/2016 dated 26.04.2016 advising Assessing Officer to make a reference to the Range Head regarding violation of provisions of Sec.269SS and 269T during the course of assessment proceedings itself. Thus, the action of Ld. AO was in gross violation of departmental circular. Therefore, we confirm the findings of Ld. CIT(A) in that regard. Mandation of recording the satisfaction - Case of the assessee is covered by the decision of Jai Laxmi Rice Mills ( 2015 (11) TMI 1453 - SUPREME COURT] which specifically provide that no penalty could be levied u/s 271E without recording the satisfaction. recoding of satisfaction in the assessment order regarding the violation of provisions of Sec.269SS was a mandatory requirement for valid initiation of penalty proceedings u/s 271D of the Act. No such penalty could be levied if AO failed to record such satisfaction in the assessment order. Therefore, in our considered opinion, Ld. CIT(A) has passed a well reasoned order deleting the impugned penalty. Decided in favour of assessee.
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2024 (2) TMI 1106
Territorial jurisdiction of AO - Validity of notice issued u/s 143(2) and assessment completed by ACIT, Circle-3, Deoghar - Whether curable defect u/s 292BB? - as argued assessment was completed by ACIT, Circle-3, Deoghar, Jharkhand whereas the assessee s residential place is in Gomti Nagar, Uttar Pradesh which is covered in database of Income tax - grievance of the assessee is that the assessee has no territorial jurisdiction or any other jurisdiction u/s 127 before the Ld. AO, Deoghar, Jharkhand. HELD THAT:- Here the assessee s jurisdiction is duly covered in assessment order and in appeal order clearly mentioned in the state of UP. There is no such any territorial jurisdiction of Ld. AO in Deoghar, Jharkhand on the jurisdiction of state of UP. So entirely the Ld. AO connected for violation of the jurisdiction. We fully rely on the order of Coordinate Bench in case of Rungta irrigation Ltd. ( 2019 (10) TMI 344 - ITAT KOLKATA] and M/s K.A. wires Ltd. ( 2020 (3) TMI 418 - ITAT KOLKATA] - AO had acted beyond the jurisdiction. We also relied the order of M/s Rupasi Bangla Agro Industries Pvt ltd [ 2023 (12) TMI 930 - ITAT KOLKATA] The notice which was issued U/s 143(2) by the ld. AO is beyond jurisdiction. The said notice is not curable U/s 292BB of the Act.The ld. DR was unable to show any different facts. The ld. AO has framed the assessment beyond the jurisdiction. Decided in favour of assessee.
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2024 (2) TMI 1105
Disallowance of interest expenditure u/s 40A(2)(b) - interest paid to related parties - Addition on the ground that the appellant had the enough funds to pay the debts and the borrowings from the related parties were not necessary - HELD THAT:- In the present case, it is pertinent to note that it is not anybody s case that the interest has been paid by the assessee to its partners and rather fact of the case is that the assessee has availed unsecured loans from its related persons at the interest rate of 18% per annum. Thus, we find no merits in the reliance placed by the learned CIT(A) on the aforesaid provision for justifying the rate of interest at 12%. Since, in the present case, the relevant material for determining the fair market value of the interest rate for availing unsecured loans has not been examined, we deem it appropriate to restore this issue to the file of the AO for de novo adjudication. In the interest of justice, one more opportunity is granted to the assessee to furnish the relevant material/documents to justify its claim that payment of interest @18% is at fair market value. With the above directions, the impugned order on this issue is set aside and ground no. 1 raised in assessee s appeal is allowed for statistical purposes. Addition on account of notional interest on the amount lying idle in assessee s bank account - HELD THAT:- From the perusal of the summary, duly supported by the statements of the bank accounts of the assessee maintained with the Bank of Bahrain and Kuwait as well as HDFC Bank, we find that prior to the payment to various airlines such as Jet Airways, Global Aviation, Cathay Pacific, Air France, etc. assessee s bank accounts are maintaining huge balance, however after the payment to the aforesaid airlines the balance in assessee s accounts even goes down to negative balance. Thus, we agree with the submissions of the assessee that it needs funds for its working capital to run the business. Therefore, we find no merits in the findings of the AO on this issue. Thus as huge funds in assessee s bank account were required for the purpose of working capital and were paid to various airlines during the course of its business as a freight agent - aforesaid addition has been made by the AO without invoking any provision of the Act, and therefore in our considered view, also lacks the authority of law. The impugned addition is set aside. As a result, ground no. 2 raised in assessee s appeal is allowed. Disallowance of transportation charges - Appellant has not deducted TDS thereon as applicable - HELD THAT:- During the hearing, the learned AR by referring to the provisions of section 194C(6) of the Act submitted that TDS under this provision is not required to be deducted while crediting or paying a sum to the transporter upon the furnishing of PAN of the transporter to the person paying or crediting such sum. AR submitted that the assessee must have provided the PAN to the AO during the assessment proceedings, however, there is no documentary evidence, at present, regarding the same. In the interest of justice, we grant one more opportunity to the assessee to provide the PAN of the transporter to AO in order to prove the compliance of provisions of section 194C(6) of the Act. Accordingly, this issue is restored to the file of the AO for de novo adjudication.
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2024 (2) TMI 1104
Fringe Benefit Tax ( FBT ) - business promotion expenses treated as fringe benefit accorded by the assessee to its employees - As per the assessee, the expenses debited under the head Advertisement and Business Promotion and considered by the AO to be covered u/s 115WB(2)(d) and section 115WB(2)(o) are not incurred on its employees and rather the same has been incurred on the Doctors. HELD THAT:- We find that the assessee filed the details of expenses, vouchers, etc. to substantiate its claim that the Advertisement and Business Promotion expenses are recurring expenditures incurred during the normal course of the business exclusively for the purpose of business. AO after examination and verification of these details on a text check basis stated that the expenses are incurred by field staff for giving various gifts, travel facilities, etc. to the Doctors for promoting the products of the assessee. Therefore, from the aforesaid remand report, it is sufficiently evident that the Revenue has accepted that the expenses under the head CRM/KAM are incurred for the benefit of the Doctors. We find that in Pr.CIT v/s Aristo Pharmaceuticals (P) Ltd., [ 2020 (1) TMI 1155 - BOMBAY HIGH COURT] after analysing the provisions of section 115WA of the Act held that for levy of FBT, the relationship of employer and employees is the sine qua non and the fringe benefits have to be provided by the employer to the employees in the course of such relationship. Accordingly, the Hon ble High Court held that since there was no employer-employee relationship between the taxpayer and the Doctors, the expenditure incurred for distributing free samples to the Doctors could not be construed as fringe benefits to be brought within the additional tax net by levy of FBT. Since, in the present case, no material has been brought on record by the Revenue to show that the Doctors were employees of the assessee, therefore, addition made by the AO u/s 115WB(2)(d) and section 115WB(2)(o) of the Act is deleted. Grounds raised by the assessee are allowed.
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2024 (2) TMI 1103
Deduction u/s 80IC - disallowance of deduction as products manufactured by assessee falling under the negative list - CIT (A) decided the issue in favour of the assessee - HELD THAT:- Since ld. CIT (A) has followed earlier order of CIT (A) which has been upheld by the ITAT, we uphold the order of the ld. CIT (A) on this issue as held products manufactured by the appellant viz., Pillar Filler and OGX do not fall under the negative list contained in the Thirteenth Schedule, and therefore, the appellant is entitled to deduction under section 80IC of the Act. Therefore, maintaining judicial discipline and respectfully following the decision of ld. CIT (A), the appeal on this ground is allowed. Decided in favour of assessee. Nature of expenses - disallowance of royalty expenditure holding the same to be capital in nature as covered within the meaning of intangible asset u/s 32(1)(ii) of the Act, after allowing depreciation @ 25% thereon - CIT (A) deleted the disallowance following the orders passed by the Tribunal in assessee s own case in earlier years - HELD THAT:- As this issue is squarely covered by the following decisions of M/s. Henkel Teroson India Ltd [ 2012 (3) TMI 723 - ITAT DELHI] ,M/s. Henkel Teroson India Ltd [ 2016 (7) TMI 1694 - ITAT DELHI] and M/s. Henkel Teroson India Ltd [ 2018 (4) TMI 1971 - ITAT DLEHI] - Respectfully following the precedent as above, we do not find any infirmity in the order of the ld. CIT (A). Accordingly, we uphold the same on this issue. Restriction of tax paid u/s 115-O @ 10% in terms of Article 10 of the DTAA between India and Germany - HELD THAT:- On this issue, we note that this issue has been raised for the first time before the ITAT by way of cross objections. Assessee, at the outset, admitted that this issue has been decided in the case of DCIT vs. Total Oil India Pvt. Ltd. [ 2023 (4) TMI 988 - ITAT MUMBAI (SB)] wherein it has been held that the beneficial rate for taxation of dividend under application DTAAs is not applicable on the DDT paid on dividends inasmuch as DDT is an additional income tax in the hands of the company and not the shareholder i.e. DDT is a tax liability of the company on the profits it seeks to distribute as dividend and not income in the hands of the shareholder with incidence of payment of tax on the company. Accordingly, following the precedent, we reject this objection raised by the assessee.
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Customs
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2024 (2) TMI 1102
Prayer for a direction extending the validity period of Duty Credit Certificate by a period of 15 years - permit use of the Duty Credit Certificate to defray I.G.S.T and G.S.T Compensation Cess - utilise the benefit under the Target Plus Scheme ('TPS') - Option of set off in duty and additional duty payable on its imports - Entry 56 of notification No.26/2017-Cus. - violative of Articles 14 and 19(1)(g) of the Constitution of India - retrospective amendment of EXIM policy affecting the rights under the TPS - prescribes 24 months time limit for utilisation of the certificate under the TPS - Director General of Foreign Trade ('D.G.F.T') to be ultra-vires the Section 5 of the Foreign Trade (Development and Regulation) Act, 1972 ('the Act') read with Foreign Trade Policy (2004-2009) - (i) Whether the period of validity for availing the Duty Credit Benefits under the TPS as 24 months from the date of issue of scrips is without jurisdiction and illegal ? - HELD THAT:- Section 5 of the Act empowers the Central Government to announce the export and import policy and also to amend the policy from time to time. Section 6 of the Act empowers the Central Government to appoint any person as D.G.F.T to advice the Government in formulation of the policy to carry out the policy and to exercise such powers as is conferred upon him by the Central Government in implementing the EXIM policy. Section 6(3) of the Act provides power to amend that policy cannot be delegated to D.G.F.T and it would be prerogative to the Central Government. It is in this background, the Central Government has chosen to designate the D.G.F.T as the Ex Officio Additional Secretary to the Government of India. Because the substantial part of the scheme is contained in the FTP and the procedural part of it has to be laid down in the Handbook of Procedures, it is expressly authorised under the FTP, the Handbook of Procedures is also notified by the Ministry of Commerce and Industry, Government of India and the public notice is signed by the person in the capacity both as the D.G.F.T and Ex Officio Additional Secretary to the Government of India. Thus, the ruling of the Hon'ble Supreme Court of India in Agricas LLP's case [ 2020 (8) TMI 705 - SUPREME COURT] would be squarely applicable to the facts of the case and the very same authority being both the D.G.F.T and the Additional Secretary to the Government of India and the notification being issued by the Ministry of Commerce and Industry, Government of India, it cannot be said that period of 24 months has been prescribed by the delegatee. Secondly, a reading of Clauses 2.4 and 2.8 of the FTP it can be seen that not only the laying down the procedure is ordered to be made in the Handbook of Procedures, it is also stated that the Certificates are valid only for the period mentioned therein. Therefore, it cannot be said that there is no express delegation of power to prescribe the validity period of 24 months. Thirdly, the 24 months period of validity was prescribed by the notification mentioned above on 07.04.2006. As a matter of fact, when in the earlier round of litigation, the retrospective amendment of EXIM policy affecting the rights under the TPS was challenged before the Hon'ble Supreme Court of India in Kanak Exports' case[ 2015 (11) TMI 80 - SUPREME COURT] , none of the petitioners thereunder including the present petitioner complained about the prescription of 24 months period of validity of the Duty Certificate. Suffice it to say that when the TPS was introduced in the FTP, simultaneously, the Handbook of Procedures in Volume - I also prescribed the said validity period of 24 months. Having availed the benefit with the said period prescribed and just because now in the year 2021, due to its business reasons, wherein, the petitioner is unable to exhaust the entire duty credit it cannot now belatedly challenge the prescription of 24 months and therefore, we hold that there is no infirmity or illegality in Clause 3.2.5(VII) of the Handbook of Procedures. Accordingly, we answer this question. (ii) Whether the Entry 56 made vide notification, dated 01.07.2017 is illegal and amounts to taking away the vested rights of the petitioner ? - HELD THAT:- According to the Central Government, these additional duties which are brought in by the amendment need not be given exemption by adjustment of duty credit under the TPS. Accordingly, the impugned notification, was issued, whereunder by Entry 56, it was made clear limiting the exemption on imports availed under Duty Credit Certificates to the levy of additional duties under Sections 3(1), 3(3) and 3(5). Thereby, it was ensured that there was no change in the scope of exemption that has been originally granted by the notification, dated 10.07.2006. Thus, it cannot be said that the Entry 56 takes away any vested right. A reading of Sections 3(7) and 3(9) would show that the legislature consciously did not employ the term as additional duty . It is only the trade notice which mentions the manner of collection as if they would be collected as additional duty. Thus, mentioning as such in the trade notice will not make the I.G.S.T or G.S.T Compensation Cess as additional duty. Accordingly, we answer this question that the impugned Entry 56 merely clarifies and makes the existing position abundantly clear and does not in any manner take away any vested right and as such, is not illegal or ultravires. (iii) Whether the petitioner is entitled for extension of time to avail the Duty Credit in view of the delay on the part of the respondents in issuing the Duty Credit Scrips ? - HELD THAT:- It is true that pursuant to the various amendments which were the subject matter of the earlier round, even though the TPS was introduced in the FTP of 2004-2009, ultimately, the retrospective amendments were held to be invalid and the Central Government and the D.G.F.T were directed to confer the benefits on the Star Trading Agencies as per the scheme by the judgment dated 27.10.2015. Even thereafter, no due certificates from the departments were insisted upon and only after the order of the Hon'ble Supreme Court of India in the Contempt Petition, dated 26.11.2019, ultimately, the Target Plus Scrips were issued on 19/04/2021. However, that by itself does not cause prejudice to the petitioner because the 24 months period starts running from the date of issue of the scrips and therefore, no vested right of the petitioner is defeated. Thus, the Court cannot come to the aid of the petitioner by granting the relief of extending time by 15 years as the same is not based on any concomitant right. However, during the course of the arguments, it was brought to the notice of this Court that by citing the time lag and the varied circumstances, the petitioner has moved the Policy Relaxation Committee under Clause 2.5 of the Policy and pending the hearing, by an order, dated 12.01.2024, we held that pendency of the Writ Petitions would not be an impediment for the Committee to take a decision on its own merits dehors the pendency of the Writ Petitions. We once again reiterate that the consideration of the Policy Relaxation Committee can be on its own merits dehors the dismissal of the Writ Petitions. In the result - (i) The Writ Petitions in W.P.Nos.3335 and 3337 of 2022 shall stand dismissed; (ii) W.P.No.3339 of 2022 is disposed of rejecting the prayer of the petitioner to extend the validity period of Duty Credit Certificate by a period of 15 years and to use the Duty Credit Certificate to defray I.G.S.T and G.S.T Compensation Cess, however with the observations that it would be open for the respondents or the Policy Relaxation Committee under Clause 2.5 of the Policy to consider extension of time etc., on the petitioner's request on its own merits as per the law and policy. (iii) There shall be no order as to costs. Consequently, W.M.P.No.3458 of 2022 is closed.
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2024 (2) TMI 1101
Whether guilty of fraud - Illegal export of red sanders by misdeclaring it as gypsum boards - red sanders are prohibited goods - Penalty imposed for abettment - statement given to the Customs Officer recorded u/s 108 - Whether the confessional statement of the appellant given to the Customs officers u/s 108 of the Customs Act, 1962 though retracted at a later stage, is admissible in evidence and could form basis for conviction? - HELD THAT:- It is well settled principle of law that the statement recorded u/s 108 of the Customs Act is a substantive piece of evidence not only against the maker of the statement, but also against the co-accused. No corroboration to the statement is required. The appellant was given adequate opportunity to provide rebuttal evidence, but nothing produced by him to prove his innocence. It is to be noted, the records relied by the Department indicates, Alexander was summoned under Section 108 of the Customs Act for the second time and his statement was recorded on 19.06.2006 before the Jailer, Central Prison, Madurai. The appellant, vide summon dated 15.06.2006, was asked to appear before Senior Intelligence Officer, D.R.I., Chennai, on 19.06.2006 at 12.00 noon, to give evidence and produce documents in connection with the seizure of red sanders from M/s.Freedom Impex. The appellant had appeared before the Senior Intelligence Officer, D.R.I. at Chennai on 19.06.2006 in response to the summon. The statement recorded remain inconclusive with the noting that the appellant refused to reply to the question when confronted with the statement of John Alexander dated 19.06.2006, which was supposed to be recorded on the same day at Madurai Central Prison. In the impugned order, the conduct of the appellant his refusal to sign the statement been considered as an attended circumstances to infer his guilty. Whereas, the time and sequence apparently indicates that by all probability, the statement of John Alexander purported to have recorded in Madurai Central Prison on 19.06.2006 could not have reached Chennai and shown to the appellant on the same day at 12.00 noon, when he appeared before the Senior Intelligence Officer, D.R.I. Further, by recording that the appellant had refused to sign the statement, the Department has made it as a reason to arrest him and produce before the Magistrate on the same day at about 09.00 p.m. The facts, such as the alleged payment of Rs. 60,000/- through ICICI Bank as remuneration for the illegal export and the alleged transit of Cargo from Chennai to Tirunelveli by the appellant, were never verified, though they are verifiable. The admission that the appellant is a licensed dealer in red sander and he know the exporter John Alexander as Alex of Tutucorin is neither a fact to corroborate the incriminating statement of co-noticee, indicting the appellant. The principle of preponderance of probability been wrongly invoked by CESTAT without any fact either circumstantial or by way of corroboration relate the appellant to the Cargo seized by D.R.I. Not even a remote material available to believe the statement of a tainted person. The decisions of the Hon'ble Supreme Court in K.I.Pavunny's case [ 1997 (2) TMI 97 - SUPREME COURT] or in Naresh J.Sukhawani's case [ 1995 (11) TMI 106 - SUPREME COURT] and Imtiaz Ahmed's case [ 2022 (12) TMI 1341 - KARNATAKA HIGH COURT] does not vouchsafe the impugned order holding the appellant guilty based on the confession of the co-accused without semblance of corroboration or circumstances. If statement of an accomplice accepted without material corroboration, it will be travesty of justice. Therefore this Court holds that the order of the CESTAT impugned in this appeal is liable to be set aside, being perverse and contrary to law. In the result, this Civil Miscellaneous Appeal is allowed. There shall be no order as to costs. Consequently, connected Miscellaneous Petition is closed.
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2024 (2) TMI 1100
Request for provisional release of the goods subject to furnishing a bond - Export business of spices - Bill of Entry - Coarse Ground Chilli re-imported - exemption under Notification No. 52/2003-Customs - HELD THAT:- During the pendency of this writ petition, the assessment order (original) has been passed, wherein it has been held that Coarse Ground Chili re-imported vide the Bill of Entry 8862322 is not eligible for exemption under Notification No. 52/2003-Customs. Once the petitioner request for exemption from payment of duty has been declined in the order (original), the petitioner has the remedy of filing the appeal. Thus, We do not find that this writ petition is to be entertained when the final order has been passed against which the remedy of appeal is provided under the Customs Act, 1962. There is no question of granting any interim relief as prayed by the petitioner. However, it would be expedient in the interest of justice to direct the Appellate Authority to decide the Interim Application of the petitioner within a period of two weeks from the date of its filing along with the appeal.
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2024 (2) TMI 1099
Mis-declaration - Imported goods declared as Indonesia Robusta Coffee - 100% EOU - Goods imported was Coffee husk and not Coffee beans - confiscated goods under Sections 111(f), (l), (m) (o) of the Customs Act, 1962 - CESTAT has allowed the appeal that the importer can approach the concerned authority and submit a fresh application under Rule 5(1)(a) of Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017- HELD THAT:- Shri. Javali is right in his submission that confiscation could not be ordered unless goods were seized. Further, since the respondent Unit is 100% EOU, even if there were to be a mistake in declaration, unless it is proved by the Customs Authority that the goods are not re-exported or sold in the domestic market, the entire issue remains revenue neutral in nature. In any event, the CESTAT has reserved liberty to the importer to submit a fresh application under Rule 5(1)(a) of the Rules. Thus, Revenue cannot have any grievance. Resultantly, this appeal must fail. Hence - The substantial questions of law raised in the appeal memorandum are answered in favour of the assessee and against the Revenue.
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2024 (2) TMI 1098
Conversion of Shipping bill under Drawback scheme to Advance Authorisation scheme - Condition provided in Board's Circular No. 36/2010 - Payment of customs duties on goods exported - documents of export are produced - time limit in the Circular No.36/2010 - HELD THAT:- No allegation that on the basis of Shipping Bill/export documents, the exporter has not fulfilled any of the conditions of the export promotion scheme to which he is seeking conversion. Further there is no allegation that the examination report and other endorsements made on the shipping bill/export documents is not sufficient prove the fact of export and the export product is clearly covered under relevant drawback Schedule. Further there is no allegation of fraud/ misdeclaration/manipulation against the appellant. Adjudicating authority concluded that the Appellant was not diligent in maintaining the records and on that ground, the request for amendment is denied. However as per the finding in the order, when certain omissions were brought to the notice of the Appellant, they have verified the records and rectified the same and therefore it cannot be concluded as they are not diligent in maintaining the records. Thus, the impugned order rejecting the request for conversion of the shipping bill based on the Circular No.36/2010 is set aside. The issue is remanded for De-novo adjudication and adjudicating authority is directed to consider the documents produced by the appellant and to decide whether the appellant is entitled to the benefit of Scheme to which they want to convert their claim. Needless to say before, considering the issue, reasonable opportunity should be extended to the appellant for personal hearing. Appeal is allowed by way of remand.
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2024 (2) TMI 1097
100% EOU - Classification of goods - Bill of Entry describes the goods as Indonesia robusta coffee beans - On examination found to be Coffee husk/bits - Denial from benefit of Notification No.52/2003-Customs - confiscation u/s 111(f)(l)(m) and (o) - Penalty - 100% EOU - whether the Coffee husk/bits with infected coffee beans is also a raw material for manufacture of coffee - HELD THAT:- The tariff headings under Chapter 0901 reads as coffee, whether or not roasted or decaffeinated, coffee husks and skins; coffee substitutes containing coffee in any proportion . The Chapter Heading 0901 11 is for coffee and Chapter Heading 0901 9010 is for coffee husks and skins; thus, clearly distinguishing coffee from coffee husk. Therefore, the Commissioner was correct in classifying coffee husk under Chapter Heading 0901 9010 as against Indonesia Robusta coffee beans being classified by the appellant under Chapter Heading 0901 1145. The appellant had produced a procurement certificate from Export Promotion Cell which allows them to import Indonesia Robusta coffee beans thus implying that the benefit of the Notification No.52/2003 will be allowed only if the imported goods are found to be Indonesia Robusta coffee beans and this is a raw material for the manufacture of instant coffee which is to be exported by the appellant. Therefore, the question of allowing coffee husk/bits under the guise of coffee beans is ruled out since the coffee husk in no terms can be a raw material for the manufacture of instant coffee rather it is used only as a waste either as animal feed or as agricultural manure. Hence, the benefit of the Notification cannot be extended to the appellant since it is not a raw material for the items to be exported. This Tribunal in a similar set of facts has held that it is for the concerned authority under Special Economic Zone to consider the request of the EOU to import raw materials suitable for manufacture of export products and to ensure fulfilment of export obligations as per the norms issued from time to time and accordingly, remanded the matter to allow the appellant to produce amended procurement certificate from the concerned authorities under Rule 5(1)(a) of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017. Since this Tribunal has already remanded the matter for further examination and verification with regard to the procurement certificate, we also remand the case with the following observations: (i) To examine whether the amended letter of the Development Commissioner allows coffee husk/bits as the raw material for the manufacture of instant coffee. (ii) To obtain a letter from the Coffee Board whether Coffee Husk can be used as a raw material for the manufacture of instant coffee that the appellant intends to export. Thus, we set aside the impugned order and the appeals are is remanded to the Commissioner for de novo adjudication subject to above observations.
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2024 (2) TMI 1096
Valuation of imported goods under Rule 9 and 10(1)(c) - addition of payment made towards royalty -100% subsidy of foreign supplier - Related party - Import of raw material for manufacture of finished goods - HELD THAT:- Appellant has produced enormous documents to show that the pricing has been uniform worldwide in respect of transaction between affiliates. As seen from Rule 3, the 2% variation in the prices demonstrated by the appellant in the tables given below do not reflect as abnormal discounts to reject the transaction value. The Department has also not produced any evidence to show any financial flow back on account of the relationship. Thus, there is no reason to reject the transaction value in the present case. On Persual of Rule 12, it is clear that Cogent reasons with evidence needs to be produced to prove that the declared value is not acceptable and in the present case revenue has failed to prove. As seen from the Rules the Original Authority has after rejected all other methods has arrived at the loaded value as per Rule 9 which is last in the sequence. The Commissioner having rejected this method of enhancement of value cannot remand the case for redetermination under any other method as it has already attained finality and there is no appeal on that method of valuation. Hence the remand to redetermine is not sustainable and hence set aside. Addition of payment made towards royalty under Rule 10(1)(c) of the Customs Valuation Rules, 2007, law is well settled that addition of payment made towards royalty can be made only in cases where the goods have been manufactured from the raw material imported by using the trade secret license under License agreement. The Royalty is not payable in instances of trading of imported finished goods and on goods repacked in India and it is only for use of technology to produce the products in India. Admittedly the royalty has been paid for use of technology to produce the products and it is payable on the net value of the goods manufactured in India and therefore, royalty cannot be added to the finished goods imported by the appellant for trading purpose. Thus, in view of the settled principles of Valuation, we find the impugned order devoid of merits. Accordingly, the appeal is allowed with consequential relief if any, in accordance with law.
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Corporate Laws
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2024 (2) TMI 1095
Prayer for being excused of any criminal liability and relieved of the alleged defaults complained of by the respondent in the notice dated 6.10.2020 - prayer for an injunction restraining the respondent / Registrar of Companies (ROC), West Bengal from initiating criminal proceedings in respect of any of the matters referred to in the notice dated 6.10.2020 - section 463(2) of the Companies Act, 2013 - HELD THAT:- In the present case, the respondent did not pass any reasoned order pursuant to the reply given by the Company on 17.11.2020. This letter was a detailed reply to the impugned Notice dated 6.10.2020. Criminal proceedings were instituted in June, 2023 after almost 3 years from the date of issuance of the preliminary findings letter. In the present case, the respondent issued the Notice dated 9.11.2023 which is a supplementary Inspection Notice from the Office of the Regional Director after filing of the present writ petition. Thus, the petitioner s apprehension was correct and ultimately came true by issuance of the Notice dated 9.11.2023. The Departmental Circular dated 20th June, 2016 relied on by the respondent is an internal document. The contents of the circular are mostly illegible. In any event, the consent/sanction referred to in section 470(3) of The Code of Criminal Procedure would only be applicable where the prosecution has exceeded the limitation period due to the requirement for sanction from the concerned authority. The reasons persuade the Court to allow the prayers in the writ petition and excuse the petitioners and each one of them of any criminal liability in respect of the alleged defaults complained of by the respondent in the impugned notice dated 6th October, 2020. The respondent is accordingly restrained from instituting or proceeding with any criminal proceedings in respect of the matter referred to in the notice dated 6th October, 2020 or take any further steps in respect thereto. Petition allowed.
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Insolvency & Bankruptcy
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2024 (2) TMI 1094
Corporate insolvency proceedings - infirmity in the scheme - it was held by NCLAT that In absence of any provision to get the Schemes in question executed through any court of Competent jurisdiction, the relevant provision(s) having been repealed, the appellant(s) may raise the question, if the respondent(s) move before any court of Law for implementation of the Schemes - HELD THAT:- It is not required to interfere with the impugned order of the National Company Law Appellate Tribunal, New Delhi - appeal dismissed.
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2024 (2) TMI 1093
CIRP - Validity of extension of 90 days was calculated Retrospectively from 10.05.2023 rendering the very extension practically an infructuous one - It is the stand of the Appellant that the Resolution Professional had no actual or constructive knowledge of the Retrospective Calculation , on 27.07.2023, until the order was uploaded on 11.08.2023 - HELD THAT:- This Tribunal points out that the Petitioner/Appellant had mentioned that he is approaching the Adjudicating Authority/Tribunal praying for an extension of 90 days to complete the CIRP of the Corporate Debtor. As per Section 12(3) of the I B Code, 2016, on receipt of an application u/s 12(2) of the Code, if the Insolvency Resolution Process remained pending on the date of the commencement of the I B Code(Amendment) Act, 2019, such Resolution Process must be completed within a period of 90 days from the date of commencement. This Tribunal taking note of the fact that the sole COC Member has passed a Resolution to extend further period of 90 days from the last date of CIRP dated 10.05.2023, in view of the categorical and candid averment that for a better negotiation , evaluation and discussion on the Resolution Plan received from the Resolution Applicant and submission of the same to the Adjudicating Authority/Tribunal the Interim Resolution Professional has proposed to extend the CIRP period for a further period of 90 days from the date of approval of the instant IA, and considering the totality of the entire conspectus of the facts and circumstances surrounding the instant case, this Tribunal comes to an inevitable and irresistible conclusion that the Adjudicating Authority/Tribunal had committed an error in not granting the exclusion for the period from 09.05.2023 to 27.07.2023 viz. the period spent in pursuing the IA (IB)1235/CHE/2023, the exclusion period would have enabled the Petitioner/Appellant to pursue the Expression of Interest received and made efforts to revive the Corporate Debtor through a Resolution Plan and in furtherance of substantial cause of justice and to prevent an aberration of justice, the observation made by the Adjudicating Authority/Tribunal in the impugned order dated 27.07.2023 in IA that the CIRP is extended for a further period of 90 days with effect from 10.05.2023 is set aside because of the fact that the period of pendency of proceeding before the Adjudicating Authority/Tribunal shall be excluded when calculating the CIRP period. Likewise, the period of pendency of instant Comp App is ordered to be excluded and the extension of CIRP period of 90 days is granted by this Tribunal from the date of the disposal of the instant Appeal, as per Section 12(2) of the I B Code, 2016. Consequently, the instant Appeal succeeds.
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2024 (2) TMI 1092
Challenge to direction that entire cost be paid by the Applicant/Appellant - Admission of CIRP set aside - Corporate Debtor was NBFC - HELD THAT:- In a situation where CIRP has been admitted and there is interim order passed by the Appellate Authority to the effect that in the CIRP no final decision shall be taken with regard to resolution plan since the order was challenged on the ground that CIRP cannot proceed against a NBFC, the CoC and the Resolution professional should have been more cautious in proceeding and incurring costs in the CIRP of the Corporate Debtor. The ends of justice be served in giving liberty to the Resolution Professional to file an application before the Adjudicating Authority to take a decision on payment of balance cost, as to whether entire balance cost is fully payable and as to whether entire cost be borne by the Appellant or shared by all the members of CoC and/or Resolution Professional. Taking into consideration the sequence of events and facts which have taken place in the CIRP proceedings of the Corporate Debtor, the Adjudicating Authority shall pass orders in the application. Appeal disposed off.
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2024 (2) TMI 1091
Prayer for condonation of delay of 1197 days and admission of the claim - seeking admission of claims of appellant - HELD THAT:- The claims were filed by the Appellant in Form-CA after more than 1 and a half year of the approval of the Resolution Plan by the CoC. Even orders on Application for approval of Resolution Plan was reserved on 22.02.2023 and the claims were filed only on 29.03.2023. The Adjudicating Authority in the impugned order has referred to the judgment of the Hon ble Supreme Court in RPS Infrastructure Ltd. Vs. Mukul Kumar Anr. [ 2023 (9) TMI 516 - SUPREME COURT ]. In Mukul Kumar s case, the claim was filed with a delay of 287 days, which was based on arbitral award. The Appeal filed by the RP was allowed and it was held that the Adjudicating Authority erred in directing the RP to consider the claim of Respondent, which was filed with a delay of 287 days, where the CoC has already approved the Resolution Plan. In the present case, the claims were filed by the Appellant on 29.03.2023, when the Resolution Plan was already approved by the CoC on 13.08.2021. The Application for approval of Resolution Plan was also heard and order was reserved on 22.02.2023 as stated by the learned Counsel for the Respondent. In the facts of the present case, no error has been committed by the Adjudicating Authority in rejecting Applications filed by the Appellants. It is also relevant to notice that Adjudicating Authority by order dated 23.06.2023 has already approved the Resolution Plan, which Plan approval order has been challenged by the Appellants by means of Company Appeal, which Appeals are still pending for consideration. Thus, no error has been committed by the Adjudicating Authority - appeal dismissed.
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PMLA
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2024 (2) TMI 1090
Money Laundering - predicate offence - manipulation of shares of the Indiabulls Group to benefit their close associates and diverting crores of public money by funding their own entities - HELD THAT:- It is not deemed necessary to delve into the question of maintainability of these appeals. This is for the reason that the appellant-ED has got efficacious alternative remedies traceable in law, to proceed against respondent nos.1 to 3 or any other person found to be involved in the alleged offences. The appellant-ED can, for such purpose, initiate appropriate independent proceedings notwithstanding the impugned judgments rendered by the High Courts of Bombay and Delhi. The appellant-ED, besides any other remedy as may be available in law, can resort to two independent proceedings such as: (i) approaching the Judicial Magistrate under Section 156(3) of Cr.P.C.; (ii) filing a review petition before the High Court of Bombay to seek clarification of the impugned judgment to the extent that it shall have no effect on the rights of the appellant-ED. Appeal disposed off.
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2024 (2) TMI 1089
Grant of anticipatory bail - money laundering - sale of fake Remdesivir injections to earn huge money from Covid patients - proceeds of crime - main submission of the applicant is that the applicant is not involved in the proceeds of crime, he was already granted bail and no custody has been sought by the respondent at the time of final report and therefore, the trial court ought to have granted anticipatory bail - HELD THAT:- As per section 45 of the Act, 2002, the offence is cognizable and non-bailable. The bail can be granted only if two conditions are fulfilled in addition to other conditions of section 438 and 439 of Cr.P.C. The bail can be granted unless the court is satisfied that there are reasonable grounds to believe that he is not guilty of the offence and he is not likely to commit such offence while on bail otherwise, he should not be released on bail. From reading the provision of section 45 of the Act, 2002, the general rule of bail not jail would not apply in such cases. The provision is otherwise as a presumption is attached that the accused is guilty and unless there are reasonable grounds to believe that he is not guilty of such offence and he is not likely to commit such offence then bail can be granted. The role of the applicant was that he was selling fake Remdesivir injection with the connivance of Sunil Mishra. He purchased fake Remdesivir injections from Dheeraj Sajnani at the rate of Rs. 11,000/- per injection. Dheeraj Sajnani is his childhood friend. Applicant didn't have the prescription of any doctor at that time. He purchased four fake Remdesivir injections as it was in great demand in society. He sold two fake Remdesivir injections to Gagan Bhaiya whose daughter was admitted in Synergy hospital, Indore at that time - This clearly establishes that he along with Sunil Mishra and others has earned money illegally through sale of fake Remdesivir injections at the cost of lives of the innocent people. The money so generated as stated above is nothing but the proceeds of crime accumulated after the commission of the Scheduled Offence as per the scheme of PMLA, 2002. Considering the money trail produced by the prosecution, which clearly proves involvement of the applicant in the present case, in which proceeds of crime is Rs. 2,89,00,000/-, this court is of the view that in view of the rigor of section 45 of the Act, 2002, the applicant is not entitled for anticipatory bail. Accordingly, the application is dismissed.
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2024 (2) TMI 1088
Money Laundering - predicate/scheduled offence - proceeds of crime - purchase of papers of Rajasthan Eligibility Examination for Teachers, 2021 (REET, 2021) and its further distribution - Section 45(1) of the PMLA - HELD THAT:- It is settled law that to establish offence under the PMLA the Enforcement Directorate must demonstrate that procurement of the property as the proceeds of crime are derived from criminal activity from the predicate offences prescribed under Part-A and Part-B of the scheduled offence. It is also an established preposition that though the offence of money laundering is separate standalone offence, the proceeds of crime ought to have preceded the commission of predicate offences and thereafter laundered over. Section 45 of the PMLA, which deals with the conditions for bail pending trial provides that the Court may grant bail to an accused if Court is satisfied that (i) There are reasonable grounds for believing that the accused is not guilty of such offence and (ii) That the accused is not likely to commit any offence while on bail. Admittedly, Rajasthan Public Examination (Prevention of Unfair Means) Act, 1992 is not scheduled offence as prescribed under Section 2 (Y) of the PMLA but the offences under Sections 420 and 120-B of I.P.C. fall within the ambit of the scheduled offence as specified under Part-A of the schedule - there is ample evidence available against the accused implying that he obtained an amount of Rs. 1.06 Crores by selling the REET, 2021 papers. The recovery of aforesaid amount from above eight persons further shows that the accused siphoned the proceeds of the crime to various persons. The recovery of Rs. 1.06 Crores from the above persons exemplifies the use/concealment of the proceeds of crime by the present petitioner. Whether, the predicate offence under Sections 420 and 120-B of I.P.C. is made out or not and whether the amount recovered from various persons is their legitimate amount or not, are the questions to be ascertained by the trial court, this Court cannot proceed into the intricacies of the case with regard to above issues, at the stage of bail. This Court has only to see whether there is prima facie evidence available against the accused-petitioner that he has committed the offence under Section 3 of Money Laundering Act. As far as applicability of proviso appended to Section 45 (1) of the PMLA is concerned, the above facts clearly show that the amount recovered from the above persons as proceeds of crime is more than Rs. 1 Crore, therefore, the case of the present petitioner does not fall within the ambit of proviso appended to Section 45 (1) of PMLA. The petitioner cannot be enlarged on bail - the instant bail application under Section 439 Cr.P.C. is dismissed.
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2024 (2) TMI 1074
Seeking grant of bail - money laundering - proceeds of crime - present application is filed under Section 438 of Cr.P.C. mainly on the ground that all the documents related to the crime have already been seized and ECIR has been filed before the Competent Court which is pending for adjudication - HELD THAT:- The applicant said to have purchased the plots from Keshav Nachani who has been granted anticipatory bail by this Court vide M.Cr.C. No.51485 of 2023. So far as the role of this applicant is concerned, he only assisted Dipak Jain in the crime. Deepak Jain transferred the property in the name of this applicant. The arrest is not required for custody/ interrogation as investigation is over now. Shri Himanshu Joshi, learned Standing Counsel for the respondent submits that at the time of filing of ECIR, the arrest of this applicant was not demanded by the prosecution agency hence, bailable warrant was issued for his appearance by the Special Judge. It is directed that in the event of arrest, the applicant - Ashok Pipada shall be released upon his furnishing personal bond in the sum of Rs.5,00,000/- with one surety in the like amount to the satisfaction of the arresting officer. This order shall be governed by the conditions No.1 to 3 of sub-Section (2) of section 438 Cr.P.C. The applicant shall also co- operate with the investigation - Application allowed.
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Service Tax
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2024 (2) TMI 1087
Attachment of property of the partnership firm - Recovery of Service post GST era - seeking direction to the 2nd respondent to provide a certified copy of the order confirming the tax demand - HELD THAT:- as regards taxes which had not been recovered, it enables initiation of action for recovery thereof under Section 142 of the CGST Act. Therefore, it was open to the first and second respondents to initiate action under the CGST Act if tax dues had not been recovered under the provisions of the Finance Act 1994. Instead, the petitioner resorted to Section 142 of the Customs Act. Section 142(1) of the Customs Act - the impugned attachment order is quashed by leaving it open to the first and second respondents to initiate appropriate proceedings in accordance with the CGST Act for the recovery of service tax dues. The petitioner is permitted to present a statutory appeal before the appellate authority provided such appeal is presented within a maximum period of two weeks from the date of receipt of a copy of this order.
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2024 (2) TMI 1086
Maintainability of appeal - appropriate forum - Appellant is a juridical person or not - Appellant can be treated as a trust or not - service provided to contributories or not - failure to recogniSe pass-through status, for the purpose of taxation statues - consideration received fro contributors or not - doctrine of mutuality. Maintainability of appeal - appropriate forum - HELD THAT:- In this case, there is no dispute with regard to rate of duty in this case. The question is whether assessee is liable to pay the duty. Therefore appeal is maintainable before this Court. Whether the CESTAT has erred in holding the Appellant to be a juridical person? - HELD THAT:- The definition clauses of each statute must be read with the object and purpose of that statute only as intended by the legislature. Various statutes such as SEBI, GST, IBC recognize trust as a person whereas the Finance Act does not. The issue involved in this case is liability to pay Service tax, therefore, the relevant statute is the Finance Act. Hence, the contention urged by Revenue is untenable. The CESTAT has recorded in the impugned order that, since the trust is treated as juridical person under SEBI, there is no reason why it should not be treated as a juridical person for taxation. This view of the CESTAT is untenable because, for the purpose of levy of tax, the entity has to be recognized under the said Act - Accordingly, the first question is answered as affirmative and in favour of the assessee. Whether the CESTAT has erred in holding that the Appellant cannot be treated as a trust and failed to recognize its pass-through status, for the purpose of taxation statues? - HELD THAT:- The assessee acts as a pass through , wherein funds from contributors are consolidated and invested by the investment manager. It acts as a trustee holding the money belonging to contributors to be invested as per the advice of the investment manager - the question is answered in the affirmative and in favour of the assessee. Whether the CESTAT has erred in ignoring that the moneys and funds contributed by the Contributors, being the property of the Appellant, the asset management service, if any rendered, is by the Appellant for its own self? - HELD THAT:- It is not in dispute that contributors are institutional investors. It is noted that doctrine of mutuality applies when commonality is established between the contributors and participators - In the instant case, the contributors and the trust cannot be dissected as two different entities because, it is an admitted fact that contributors investment is held in trust by the fund and it is invested as per the advice of investment manager. In substance, fund does nor do an act. Hence, can be no service to self. Therefore the doctrine of mutuality must apply in the instant case - the third question is answered as affirmative and in favour of the assessee. Appeal allowed.
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2024 (2) TMI 1085
Exempt service or not - petitioner argued that the service tax imposed is on the services, which are exempted by virtue of the notification dated 20.06.2012, issued by the Government of India - failure to furnosh document to substantiate the same - HELD THAT:- A perusal of the impugned order indicates that except stating that the services rendered are exempted from service tax, the petitioner has not produced any documents to substantiate that the services rendered by him were exempted from service tax. Therefore, respondent No. 1, on the available material on record has rightly passed the impugned order after providing several opportunities of personal hearing to the petitioner, which the petitioner did not avail without any sufficient cause. Whether the services of the petitioner are exempted from service tax is a matter which requires consideration by the appellate authority, and since there is a dispute as to whether the services rendered by the petitioner are exempted from service tax, the same cannot be adjudicated in this petition, and it is open for the petitioner to approach the appellate authority for redressal of his grievances. The petition stands dismissed, reserving liberty to the petitioner to file an appeal under section 85 and 86 of the Finance Act. The time spent in prosecuting this petition to be excluded for the purpose of computation of limitation period in preferring the appeal before the appellate authority.
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2024 (2) TMI 1084
Demand of service tax alongwith interest and penalties - service tax not paid - late filing of returns - time limitation - HELD THAT:- The service rendered by the appellant was inclusive of service tax and initially, the appellant paid the service tax, but thereafter, the appellant did not pay the service tax, but they filed S.T-3 Returns. In that circumstances, the responsibility casts on the Revenue to find out why the assessee is filing nil returns and no efforts were made by the Revenue to investigate the matter against the appellant. As per the said letter dated 20.08.2008 after verifying the records, the Revenue has observed that nothing is pending against the appellant. In that circumstances, the show-cause notice issued to the appellant on 18.02.2009, is highly time barred. The impugned demand is set aside - appeal allowed.
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2024 (2) TMI 1083
Invocation of extended period of limitation - wilful misstatement and suppression of facts etc. with intent to evade payment of tax - Management Consultancy service - HELD THAT:- This issue for the earlier period has been examined in detail by this Tribunal in M/S. VERVE CONSULTING PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, BHUBANESWAR-I [ 2023 (8) TMI 50 - CESTAT KOLKATA] where it was held that Services rendered in the nature of software development provided by the Appellant was exempted from payment of Service tax in terms of Notification No. 16/2004-ST dated September 10, 2004. Thus, no service tax is payable by the appellant. Further it is found that the activity of the appellant was well known to the Revenue and both the show-cause notices in question have been issued to the appellant by invoking extended period of limitation - the whole of the demand is barred by limitation. The impugned order is set aside - appeal allowed.
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2024 (2) TMI 1082
Classification of services - Security Services or not - Government of Tripura has entered into a memorandum of understanding with ONGC, which is a Public Sector Undertaking (PSU) owned by the Government of India, for a period of 10 years to raise a full battalion of the Tripura State Rifles mainly for dedicated deployment to ONGC for security services - providing services to the Public Sector Undertaking - HELD THAT:- The issue involved in these cases is squarely covered by the decision of this Tribunal in the case of MUMBAI POLICE VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI [ 2018 (4) TMI 418 - CESTAT MUMBAI] , wherein this Tribunal has observed activity undertaken by the police is not covered by the definition of Security Agency under Section 64(94) of the Act. In this case also, the appellant is not engaged in the business of providing security services, therefore, following the precedent decision of this Tribunal, it is held that as the appellant is not engaged in the business of providing security services, therefore, the appellant is outside the purview of security services as defined under Section 65 (94) of the Finance Act, 1994. The appellant is not liable to pay service tax - the impugned demand against the appellant is set aside - appeal allowed.
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2024 (2) TMI 1081
Levy of service tax - Erection, Commissioning and Installation Service - activities of fabrication of structures, erection, commissioning and installation to the plant and machineries, equipment structures etc. - period from May, 2006 to March, 2008 - service merits to be classified under Works Contract Service, regarding which SCN is silent - HELD THAT:- It is not in dispute by the Revenue that the appellant has taken the activities of erection, commissioning and installation services along with materials. Therefore, the merits classification of the above services under Works Contract Service and no demand is raised against the appellant under Works Contract Service . Therefore, following the decision of the Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] , wherein the Hon ble Apex Court has observed All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. The merits classification of the impugned service is under Works Contract Service , if it is presumed that the appellant is liable to pay service tax on Works Contract Service , then the appellant is required to pay service tax on 33% on the value of contract executed by them and the appellant has paid the service tax more than that. Thus, no demand is sustainable against the appellant - appeal allowed.
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Central Excise
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2024 (2) TMI 1080
Levy of penalty under Rule 12(6) and Rule 27 of the Central Excise Rules, 2002 and Rule 15A of the Cenvat Credit Rules, 2004 - non-filing of returns namely ER-4, ER-5, ER-6 and ER-7 for the period from February 2012 to March 2016 - invocation of extended period of limitation as provided under Section 73, sub-section (4) of the Finance Act, 1994 - HELD THAT:- As per Section 174(2)(e) of the CGST Act, 2017 the proceedings can only be continued under the new regime if it is arising/emerging out of investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings etc. Further, it is found that violation of non-filing of the returns under the existing law has not been saved under the present regime of GST. Further, in the present case the period involved is February 2012 to March 2016, whereas the show cause notice was issued on 23.04.2018 which is beyond the period of limitation. In fact, neither in the show cause notice nor in the impugned order, the grounds for invoking the extended period of limitation have been discussed. Nothing emerges from the impugned order that the appellant have not filed the requisite returns with intent to evade the payment of tax. Further, the decisions relied upon by the appellant as well as the respondent, are not strictly applicable in facts and circumstances of the present case. The imposition of penalties amounting to Rs.96,000/- is not sustainable - The impugned order is set aside - appeal allowed.
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2024 (2) TMI 1079
Recovery of CENVAT Credit alongwith interest and penalty - credit availed by the appellant on inputs during 12.02.2004 onwards - process amounting to manufacture or not - HELD THAT:- The issue involved in the present case is no more res integra and has been consistently held by various decisions of the Tribunal, upheld by the Hon ble Supreme Court and High Court wherein it has been held that when process undertaken by the assessee does not amount to manufacture, even then the CENVAT credit is admissible if such inputs are cleared on payment of duty which would amount to reversal of credit availed. Reliance can be placed in the case of COMMISSIONER OF CENTRAL EX. CUS., SURAT-III VERSUS CREATIVE ENTERPRISES [ 2008 (7) TMI 311 - GUJARAT HIGH COURT ] which was upheld by the Hon ble Apex Court in COMMISSIONER VERSUS CREATIVE ENTERPRISES [ 2009 (7) TMI 1206 - SC ORDER ] wherein it was held that once duty on final products has been accepted by the Department in the case, CENVAT credit cannot be denied even if the activity does not amount to manufacture. The impugned order is not sustainable in law and therefore is set aside - appeal allowed.
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2024 (2) TMI 1078
Valuation - inclusion of secondary packing charges recovered by the Respondent from their customers in the assessable value - Freight Cost recovered by the Respondent from their customers for the onward movement of the goods from the factory gate to Railway Station is includable in the assessable value or not - HELD THAT:- On going through the OIA, it is found that the Commissioner (Appeals) has given very detailed findings on the issue raised in the Show Cause Notice - it was held that When the appellant has sold the goods at the factory gate, then such charges which are collected for providing services beyond the factory gate cannot be added to or included in the assessable value. It is not the case of the Department, that the appellant is collecting these as part of the price of the goods and in the guise of forwarding charges. Such a proposition would be contrary to evidence as there is uniform sale price of goods at the factory gate and inclusion of such forwarding charges to be declared price would lead to differential price of goods. Hence, such forwarding charges cannot be included in the assessable value of goods. In case of UNION OF INDIA ORS. ETC., ETC. VERSUS BOMBAY TYRE INTERNATIONAL LTD. ETC., ETC. [ 1983 (10) TMI 51 - SUPREME COURT] , the Hon ble Supreme Court has held If any special secondary packing is provided by the assessee at the instance of a wholesale buyer which is not generally provided as a normal feature of the wholesale trade, the cost of such packing shall be deducted from the wholesale cash price. These decisions are squarely applicable to the facts of the present Appeals. Therefore, there are no reason to interfere with the detailed findings and conclusion arrived at by the Commissioner (Appeals). The Appeals filed by the Revenue is dismissed.
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2024 (2) TMI 1077
Interest on delayed refund - period prior insertion of the Section 11BB of CEA - HELD THAT:- There is no dispute that this order was in respect of a refund application filed on 07.04.1997. If Revenue was aggrieved by the facts as recorded in this order they should have filed an application under Section 35 C (2) of the Central Excise Act, 1944 for getting the facts as recorded in the final order of tribunal or could have filed an appeal to the concerned appellate authority. Having not done so there cannot be any dispute about the fact that entire proceedings are in respect of the refund application filed on 07.04.1997. Commissioner (Appeals) findings in this regard cannot be faulted with. As the entire issue is in sequel of the Tribunal order directing payment of due interest as due. Without challenging the direction to pay the interest at appropriate forum the same cannot be challenged in these proceedings whether for the period prior insertion of the Section 11BB before or after, there are no merits in this appeal. In the case of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. [ 2011 (10) TMI 16 - SUPREME COURT] , SC held that liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made. There are no merits in this appeal filed by the revenue - appeal dismissed.
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CST, VAT & Sales Tax
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2024 (2) TMI 1076
Validity of grant of permission to the petitioner s assessing authority, namely, Deputy Commissioner, Sector-7, Commercial Tax, Ghaziabad, to re-assess the petitioner for the A.Y. 2012-2013 (U.P. and Central), in the extended period of limitation provided under Section 29 (7) of the Act - petitioner s regular assessment proceeding for A.Y. 2012-13 was reopened - Effect of Section 27 of the Act - HELD THAT:- There did not pre-exist any principle of law where under an assessee could claim a deemed assessment or a consequence in law, equivalent to that. The U.P. Trade Tax Act that was repealed by the Act, did not contain a concept of a deemed assessment. Under that law, whenever limitation to frame assessment lapsed, no assessment arose. However, Section 27 of the Act made a clear departure from that pre-existing law. In no uncertain terms it provided that the annual return of turnover and tax filed under Section 24(7) of the Act would constitute a deemed assessment. It would arise on the last day of filing of the annual return. Further, the facts disclosed, and figures mentioned in that return were deemed to be part of the assessment order. The deeming fiction in law revived upon order dated 01.02.2016 being passed. Earlier, it may have remained in the shadow and thus dormant in face of the specific/conscious assessment order dated 04.01.2016 yet, in view of that order being recalled on 01.02.2016, it got resurrected by the force of law. It became absolute upon expiry of period of limitation to make a fresh assessment i.e. on 30.09.2016. Since, the assessing officer failed to make any specific order of assessment in terms of Section 29(6) of the Act till 30.09.2016, his powers to make the regular assessment stood exhausted. It is on the occurrence of that passive event on 30.09.2016 i.e. lapse of limitation to make a regular assessment that the deeming fiction of law created by Section 27 of the Act became absolute. If however, as in the present case, jurisdiction to reassess had remained from being assumed within the normal period of limitation - that expired on 31.03.2016, the subsequent setting aside of the regular ex parte assessment order would have no effect as to jurisdiction to initiate such reassessment proceeding - Therefore, in the present facts the assessing authority was obligated to first obtain an approval of his higher authority namely the Additional Commissioner to proceed to reassess the petitioner in the extended period of limitation namely eight years. There was neither any relevant material nor any reason was recorded by the assessing authority that any part of the turnover of the petitioner had escaped assessment. Consequently, the jurisdiction to reassess the petitioner never arose with the assessing authority for A.Y. 2012-13. Unfortunately, that basic aspect escaped the attention of the Additional Commissioner, who appears to have granted the permission to the petitioner- assessing authority to reassess the petitioner in the extended period of limitation, in a mechanical exercise of his power. It is not examined whether the reassessment order dated 17.03.2021 is ante dated or not. Since the jurisdiction never arose, the entire proceedings were conducted without jurisdiction and are a nullity. There are no hesitation to record satisfaction that the order dated 30.01.2021, as modified on 08.02.2021 passed by that authority, granting permission to the assessing authority, namely, Deputy Commissioner, Sector-7, Commercial Tax, Ghaziabad as well as the reassessment order dated 17.03.2021 for the Assessment Year 2012-2013 (U.P. and Central) are a nullity. They are quashed. Petition allowed.
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Indian Laws
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2024 (2) TMI 1075
Dishonour of Cheque - offence under Section 138 of N.I. Act has been proved beyond all reasonable doubt or not - Rebuttal of presumptions - Whether this Court while sitting as a Revisional Court, in the absence of perversity, would upset the concurrent findings of facts? - HELD THAT:- It is well settled that while sitting in a revisional jurisdiction, this Court cannot re-analyze or re-interpret or re-appreciate the evidence on record. It is also to be kept in mind that the Revisional Court will not interfere, even if, a wrong order is passed by the Court having jurisdiction, in the absence of jurisdictional error, as held in the case of SOUTHERN SALES SERVICES ORS. VERSUS SAUERMILCH DESIGN HANDELS GMBH [ 2008 (10) TMI 696 - SUPREME COURT] . Since the signature on both the cheques is admittedly of the Accused, the principles laid down by the Apex Court in the case of HITEN P. DALAL VERSUS BRATINDRANATH BANERJEE [ 2001 (7) TMI 1172 - SUPREME COURT] shall come into effect, wherein it is held that the Court shall presume the liability of the drawer of the cheques for the amounts for which the cheques are drawn. It is now well settled that Section 139 of the N.I. Act introduces an exception to the general rule as to the burden of proof and shifts the onus on to the Accused. The presumption under Section 139 of the N.I. Act is a presumption of law, as distinguished from the presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of innocence, which requires the Prosecution to prove the case against the Accused beyond reasonable doubt - The burden of proof was however on the person who wanted to rebut the presumption. The presumption arrived in favour of the Applicant under Section 139 of the N.I. Act has not been rebutted successfully by the Applicant though he entered into the witness box and thus, the findings given by both the Courts below cannot be faulted with. The Revision must fail and hence, the same stands rejected.
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