Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 3, 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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Refund of the unutilized accumulated Input Tax Credit in case of Export - failure to upload the shipping details - The High Court noted that, if a tax payer possesses the valid shipping bills, but for some reason may not have been able to upload the same in Form GSTR 1 at the time of claiming refund, the law should not be so rigid so as not to permit the claimant to rectify the mistake that has been committed inadvertently. There is nothing on record to show that the petitioner deliberately did not upload the required details. - GST officers directed to take into consideration the hardcopy of the shipping bills submitted by the petitioner.
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Seeking grant of bail - illegal claim of refund of accumulated ITC on account of trade/supply of goods - obtained GST Registration on fictitious documents and has never conducted any business activity from the registered premises - The High Court emphasized that the arrest of the applicant was not required, and the applicant was not involved in heinous crimes like murder or terrorism. - Bail granted subject to conditions.
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Default in payment of GST in spite of the fact that amount was deposited in Electronic Cash Ledger (ECL) - delay in filing of GSTR-3B returns - High Court observed that, as long as GST collected by a registered person is credited to the government's account not later than the last date for filing monthly returns, the tax liability of that registered person is discharged from the date when the amount was credited to the government's account. Any default in payment of GST, even after the due date for filing monthly returns, will lead to interest liability. - Accordingly the proceedings quashed.
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Assessment u/s 73 r.w.s. 75(4) - Validity of summary of order in form GST DRC-07 issued in consequence of Assessment order - The petitioner challenges the order on the grounds that it was passed in ex-parte proceedings without providing an opportunity for a personal hearing, violating principles of natural justice. - High Court set aside the order, and the respondents directed to provide an opportunity of hearing to the petitioners, conducted by an officer other than the one who issued the show cause notice.
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Refusal to grant certified copies of the order sheet/note sheet and search warrant - The High Court concluded that the petitioner's request for certified copies was not justified at this stage of the investigation. - It clarified that the investigation process is not complete upon the issuance of an SCN, and a final decision is reached after the matter goes through all stages of appeals and revisions. - The Court noted that disclosing information from order sheets could reveal the identity of sources and jeopardize ongoing investigations. - Petition dismissed.
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Interest for delay in payment of Output Tax - return was not declared within the prescribed time - claim of less ITC wrongly however remaining amount was lying in ECRL - The High Court refers to the amendment of Section 50(1) of the CGST Act, which provides that interest would be levied only on the portion of the tax paid by debiting the electronic cash ledger. - The High Court concludes that the notice and impugned order should be set aside and remanded back for reconsideration, taking into consideration the amendment to Section 50(1) and the petitioner's argument regarding the inadvertent mistake.
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Condonation of delay in filing appeal before the appellate authority - The Appellate Authority also considered the extension of limitation granted by the Hon'ble Supreme Court due to the pandemic situation, which saved the limitation between 15.03.2020 and 28.02.2022. The Supreme Court directed that appeals could be filed within ninety days from 01.03.2022, which means an appeal could have been filed on or before 29.05.2022. However, the petitioner filed the appeal on 13.04.2023, after 289 days from the expiration of even the extended limitation period. - The High Court dismissed the writ petition.
Income Tax
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Validity of proceedings u/s 153C - The High Court held that loose sheets and diaries, without corroborative evidence, do not constitute "books of account" and hence cannot be solely relied upon for tax assessment purposes. Additionally, the process of centralizing cases without providing a reasonable opportunity for the assessee to object was found to be in violation of Section 127. The notice under Section 153C was deemed invalid because it did not meet the prerequisites for invoking this section.
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TP adjustment - consideration paid to the associated enterprise pursuant to the merger of the holding company (i.e. subsidiary of associated enterprise) with the assessee (i.e. step down subsidiary of the associated enterprise) - The tribunal upheld the transfer pricing adjustments made by the tax authorities, distinguishing the nature of the transaction as an international transaction subject to transfer pricing provisions, despite the merger's approval by regulatory bodies. - The ruling emphasized that transactions, even if approved by regulatory bodies, must still be assessed for arm's length compliance within the framework of transfer pricing laws.
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Reopening of assessment - Disallowance of deduction claimed u/s 35(1)(ii) - The tribunal upheld the reopening of the assessment, ruling it as a procedural irregularity that does not invalidate the proceedings, and found no merit in the assessee's objections regarding the entitlement to deductions u/s 35(1)(ii), emphasizing the necessity for donations to be made to genuine institutions for claiming such deductions.
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Levy of Penalty u/s 271 - certain expenses which were not allowable expenses under the Act were not added back to the total income - The High Court concludes that, in this case, the tax audit report was filed along with the return of income, and the mistake in not properly uploading the return was a genuine error in the given circumstances. As a result, the appeal of the revenue is dismissed.
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Taxability of Waiver of loan - loan advanced for acquisition of capital equipments - Revenue's first contention that the loan waived was availed towards working capital - whether waiver of loan attributable for the working capital was taxable under Section 28 (iv)? - Hon'ble Single Judge had remitted the matter to ITAT for reconsideration - Division Bench of High Court dismissed the revenue appeal.
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Disallowance u/s. 40(a)(ia) - Non deduction of TDS - The AO had disallowed the expenses because he found no evidence of a certificate for lower TDS, which the assessee claimed had been provided by SVPL. However, the absence of representation by the assessee during the appeal process led to the confirmation of the disallowance by the CIT(A) and ultimately the dismissal of the appeal by the Tribunal.
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Additions u/s 68 - Unaccounted business income - The tribunal held that, the assessee has rightly claimed the said trading as business income - The sale proceeds of shares were properly explained by the assessee through the documentary evidence which was filed before the AO as well as before the CIT(A). AO as well as the CIT(A) was not right in making/confirming the addition to that effect. - AT
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Penalty u/s. 270A - The appellant argues that Section 270A(9)(c) of the Act should not be attracted in this case because there was no mis-reporting or under-reporting of income. The appellant asserts that all relevant details and explanations were provided during the assessment proceedings. - The tribunal held that the Assessing Officer and the CIT(A) were not justified in imposing the penalty.
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Characterization of receipt - Compensation receipt on termination of contract - Addition under Section 28(ii)(e) - The Tribunal differentiates between termination and non-renewal of a contract and argues that the compensation received due to non-renewal should not be treated as termination under Section 28(ii)(e) or Section 56(2)(xi). - Reference is made to section 2(zh) of the Industrial Relations Code, 2020, to support the argument that non-renewal of a contract is distinct from retrenchment. - AO directed to delete the additions.
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Denial of registration u/s. 12AB(1)(ac)(vi) and approval u/s.80G(5)(iv) - The tribunal has noted a recent judgement of High Court wherein taking note of this SOP held that the grant of insufficient time to respond the notice violates the principles of natural justice and, therefore, set-aside the assessment. Thus, it is clear that the appellant was given unreasonably very short period of time to respond to the notice, which is against the principles of natural justice. - Matter restored back for fresh consideration.
Customs
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Levy of penalty - confiscation of goods - The High court held that the goods imported without a valid Wireless Planning & Coordination (WPC) license, which turned out to be forged, were rightly liable for confiscation under Section 111(d) of the Customs Act, 1962. The High court found that the imposition of a redemption fine and penalty under Section 112(a) of the Customs Act did not require mens rea (intent) and was based on a strict liability principle.
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Refund of anti-dumping duty paid by the petitioner - The High court found the petition misconceived, highlighting the petitioner's failure to fulfill basic requirements for invoking Article 226, including the absence of a 'demand for justice' prior to filing the petition. The court also applied principles of delay and laches, noting the petitioner's belated approach is barred by significant delay without a satisfactory explanation. Additionally, the court rejected the notion that a Supreme Court decision could retrospectively provide a cause of action for challenging the notifications or claiming a refund.
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Levy of penalty - existence of mens rea or not - The appellant's argument that they were unaware of the need for authorization and had exported similar goods for years without objection from customs authorities was not accepted as a valid defense. The Tribunal upheld the impugned order but reduced the penalty to Rs. 50,000, stating that the goods were indeed liable for confiscation and that Section 114(i) does not require intent to be proved, only that the goods should be liable for confiscation, which was satisfied in this case.
Indian Laws
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Maintainability of writ petition - The High court held that the 1st respondent company, being a Public Sector Undertaking with the majority of its shares held by government entities and subject to significant government control, qualifies as an "instrumentality of the Union of India" under Article 12 of the Constitution. Therefore, it is amenable to writ jurisdiction, overturning the previous judgment that deemed the writ petition not maintainable.
IBC
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Approval of Resolution Plan - The NCLAT found no error in the adjudicating authority's decision, emphasizing the paramount importance of the commercial wisdom of the Committee of Creditors (CoC) in the insolvency resolution process. The Tribunal clarified that the determination of the net present value (NPV) of financial proposals and the allocation of marks based on the evaluation matrix are within the CoC's commercial wisdom and are not justiciable.
PMLA
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Charge of illegal gratification demanded by and paid to senior Income Tax Officers - The High Court found that, in the present case the material collected during the investigation by the respondent/CBI is not sufficient to frame the charge against the petitioner. Accordingly, the present petition is allowed. The impugned order is not legally sustainable.
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Seeking grant of regular bail - the High court noted the absence of a predicate offense or ongoing investigation related to a scheduled offense, aligning with the Supreme Court's stance that prosecution under PMLA cannot proceed on assumption without a registered or pending scheduled offense. Meeting the twin conditions of Section 45(1)(ii) of the PMLA, the court was satisfied there were reasonable grounds to believe the petitioner was not guilty of the offense - Bail granted.
Central Excise
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Valuation - Job work or not - The Tribunal concluded that the valuation adopted by M/s. Tescom on the basis of transaction value was correct. The argument that Tescom acted as a job worker and thus should have valued the goods as per Rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, was found to be based on incorrect premises. - AT
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Classification of goods - ball point pen ink - The Tribunal found that the Central Excise Tariff entries for ball point pen ink are not aligned with the Harmonized System of Nomenclature (HSN), which divides inks into "printing ink" and "others". Given the misalignment, reliance on HSN for classification under Central Excise Tariff is incorrect. Ball point pen ink, being used for writing, correctly falls under Sub-heading 3215.10, attracting a nil rate of duty.
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Wrongful availment of CENVAT Credit - Fake documents without actual receipts of the inputs against such documents - The Tribunal found the department's reliance on uncorroborated assumptions to be insufficient for denying Cenvat credit. The appellant had accounted for the inputs in their records, and the payments were made through proper channels, negating the department's assumptions.
VAT
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Condonation of delay of 239 days - The High court allowed the condonation of delay of 239 days in filing the revision petitions under the TVAT Act, 2004, based on the precedent set by the Apex Court in a similar case. This decision illustrates the principle that, in the absence of express or implied exclusion, the provisions of the Limitation Act, 1963, can be applied to special laws like the TVAT Act, 2004 for condoning delays beyond prescribed limits.
Case Laws:
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GST
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2024 (2) TMI 135
Maintainability of petition - availability of statutory appeal - Tribunal has not yet been constituted - appealable under Section 112 of CGST Act - HELD THAT:- In any case, in face of complete failure on part of appeal authority to exercise its jurisdiction in accordance with law, the writ court may not hold itself to offer the necessary corrections required, at this initial stage itself. Undeniably, the appeal authority may either confirm or modify or annul the order under appeal. In face of statutory prescription allowing for only three above described options to the appeal authority, no inherent power may remain be exercised by the appeal authority to set aside the order under appeal and remand the proceedings to the original authority. Any doubt in that regard has been clarified by the legislature itself by stating that the appeal authority shall not refer the matter back to the adjudicating authority. Once the appeal authority is seen to have failed to exercise its jurisdiction in accordance with law, such an order may never be sustained. It is accordingly set aside and the matter is remanded to the appeal authority to pass a fresh order after hearing the parties afresh. Petition allowed by way of remand.
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2024 (2) TMI 134
Seeking a direction to the respondents to permit the petitioner to carry forward an amount of Central Value Added Tax (CENVAT) CENVAT credit plus a sum as interest paid in Electronic Credit Ledger maintained under GST through GST 3B return - HELD THAT:- Instead of relegating the petitioner to filing an application, we dispose of this petition with a direction to the respondents to treat this petition as a representation with regard to grant of interest on the alleged delayed carry forward of the CENVAT credit in accordance with law. A speaking order be passed by the respondents within a period of four weeks from today. It will be open to the petitioner to take such further remedy as may be permissible in law, in case petitioner is dissatisfied with such an order.
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2024 (2) TMI 133
Violation of principles of natural justice - no notice was issued to the petitioner under Section 74(1) of Uttar Pradesh Goods and Services Tax Act, 2017 - HELD THAT:- From the record, it is clear that a notice was issued to the petitioner under Section 74(5) of the Act on June 4, 2021 wherein officer asserted that the tax is payable by the assessee. However, upon non-payment of the tax, Section 74(7) of the Act would come into play and the proper officer is required to give a notice under Section 74(1) of the Act. This procedure, that is to be followed, was not followed and no show cause notice was issued to the petitioner. Instead of the same, the impugned order dated July 30, 2021 was passed. Thus, it is clear that proper show cause notice was not issued to the petitioner, and therefore, all the orders impugned herein are without any basis of law, the impugned orders are required to be set aside - petition allowed.
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2024 (2) TMI 132
Tax demand arising out of discrepancies between Form GSTR-1 and Form GSTR-2A - mismatch between GSTR-3B and GSTR-1 as regards outward supply of goods and services - no personal hearing was provided - Violation of principles of natural justice - HELD THAT:- The documents on record disclose that the intimation in Form GST-DRC-01A was issued on 27.09.2023 and that, even without waiting for a reasonable period, the show cause notice in Form GST-DRC- 01 was issued on 29.09.2023. The petitioner replied promptly on 30.10.2023 and requested for a personal hearing to enable the petitioner to place relevant documents on record. The record shows that a reminder letter dated 18.12.2023 was issued by the respondent requesting for a reply to the show cause notice and that the petitioner requested for a month's time to do so by reply dated 25.12.2023. The said reply dated 25.12.2023 was disregarded. In effect, in spite of request, no personal hearing was provided and there was breach of principles of natural justice. For that reason, the impugned order warrants interference. The impugned order dated 30.12.2023 is quashed. As a corollary, the matter is remanded for re-consideration. After providing a reasonable opportunity to the petitioner, including a personal hearing, the respondent is directed to issue a fresh assessment order within a period of two months from the date of receipt of a copy of this order.
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2024 (2) TMI 131
Refund of the unutilized accumulated Input Tax Credit - Rejection on the ground that the petitioner failed to upload the shipping details - HELD THAT:- If a tax payer possesses the valid shipping bills, but for some reason may not have been able to upload the same in Form GSTR 1 at the time of claiming refund, the law should not be so rigid so as not to permit the claimant to rectify the mistake that has been committed inadvertently. There is nothing on record to show that the petitioner deliberately did not upload the required details. Apart from the fact that the petitioner did not upload the shipping details in Form GSTR-1, there is no reason for withholding or rejecting the claim for refund sought for by the petitioner. The respondent no. 2 being the Assistant Commissioner, CGST Central Excise, Jalpaiguri Division is directed to take into consideration the hardcopy of the shipping bills submitted by the petitioner for consideration of his prayer for refund of the unutilized accumulated Input Tax Credit on account of zero rated supply - Petition dismissed.
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2024 (2) TMI 130
Fraud, wilful-misstatement or suppression of fact in audit report or not - intimation in Form GST DRC-01A was not issued to the petitioner - violation of principles of natural justice. Principal contention of the petitioner was that the audit report did not contain findings of fraud, wilful-misstatement or suppression of facts - HELD THAT:- Section 65 of the CGST Act deals with audit by a tax authority and sub-section (7) thereof is particularly relevant for this case - The text of sub-section (7) indicates that the audit conducted under sub-section (1) thereof should result in the detection of tax not paid or short paid or erroneously refunded, or that Input Tax Credit (ITC) was wrongly availed or utilised. On examining the audit report, undoubtedly, it indicates that tax was not paid or short paid or that ITC was wrongly availed or utilised. Thus, the obligation imposed by statute with regard to the content of the audit report appears to be satisfied. Learned counsel for the petitioner contended that the audit report should also contain findings of fraud or wilful-misstatement or suppression of facts. There is nothing in the language of Section 65 to indicate that the audit report should contain such findings. On the contrary, subject to the audit report disclosing the aforesaid, subsection (7) of Section 65 prescribes that the proper officer may initiate action under Section 73 or 74. Thus, the relevant provision indicates that the proper officer has the option. The second ground canvassed by the petitioner was that intimation in Form GST DRC-01A was not issued. Although Rule 142(1) of the CGST Rules was amended, learned counsel submits that such amendment is prospective. The show cause notice in Form GST DRC-01A was issued on 14.12.2023, which is subsequent to the date of amendment. Therefore, even if the amendment is prospective, the amendment would apply with regard to the impugned show cause notice. The last objection of the petitioner to the show cause notice was on the basis that expenses were taken from the consolidated balance sheet. This contention does not justify interference with the show cause notice under Article 226 of the Constitution of India. Thus, no case is made out to interfere with the impugned show cause notice - petition dismissed.
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2024 (2) TMI 129
Seeking grant of bail - illegal claim of refund of accumulated ITC on account of trade/supply of goods - obtained GST Registration on fictitious documents and has never conducted any business activity from the registered premises - HELD THAT:- In view of Section 69 of the CGST Act, 2017, the Commissioner may authorize arrest of a person only if he has reasons to believe that such a person has committed any offence under the clauses mentioned therein. Reasons to believe does not mean a purely subjective satisfaction. It contemplates existence of reasons on which the belief is founded and not merely a belief in the existence of reasons inducing the belief. The belief must not be based on mere suspicion; it must be founded upon information. Such reasons to believe can be formed on the basis of direct or circumstantial evidence. A rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the officer and the formation of his belief. From the material collected on record, the reasons recorded are that during search some documents were found showing that the applicant is also running several firms on one PAN and without supplying any goods and though the said firms are not in existence and claimed ITC on account of trade/supply of goods. In the case of ARNESH KUMAR VERSUS STATE OF BIHAR ANR [ 2014 (7) TMI 1143 - SUPREME COURT ] , the Honourable Apex Court while laying down some guidelines clarified that directions issued would not only be applicable to cases under 498-A of the Indian Penal Code or Section 4 of the Dowry Prohibition Act but also would cover cases where offence is punishable with imprisonment for a terms which may be less than seven years or which may extend to seven years whether with or without fine. Thus, when facts of the present case are taken into consideration, it reveals that the applicant was arrested. Necessary investigation is carried out and the statement of the applicant is recorded. The maximum punishment provided is imprisonment upto five years. The facts of the case show that the dispute is regarding the tax evasion and the applicant has already paid Rs. 81.00 lacs towards the said tax amount. The offence is under the CGST Act, 2017 except with the limited exceptions are compoundable. The detention of the applicant in jail is not required. The applicant is not involved in a heinous crime like murder or terrorism. The basic rule is, bail is rule and jail is exception . The allegations of serious financial impropriety are levelled against the applicant. The criminal application is allowed.
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2024 (2) TMI 128
Violation of principles of natural justice - case of petitioner is that the impugned order passed u/s 73 of the Central Goods and Service Tax Act (CGST Act) is an ex-parte Order along with summary order of even date - HELD THAT:- Although the Petitioner was aggrieved by the order dated 13th June 2022 being passed without an opportunity being made available to the Petitioner to respond to the show cause notice as also without being given any opportunity for an oral hearing, the Petitioner on 18th January 2023 under protest, deposited an amount of Rs. 34,98,095/-. Such amount was deposited without prejudice to the rights and contentions of the Petitioner to assail the impugned order. Thus, no mistake can be attributed to the Petitioner for not having noticed the Notice or the Order on the portal. It is clear that all orders and notices were required to be placed in the View Notices and Orders window/ portal. It also appears to be quite clear from the perusal of the record that the Petitioner was not heard. It had no opportunity to reply to the show cause notice. It is in the interests of justice that the impugned orders are quashed and set aside. The proceedings are remanded to the Respondents for a fresh order to be passed after giving an opportunity to the Petitioner to reply to the show cause notice and after an opportunity of a hearing is granted to the Petitioner. The present proceedings disposed off and the proceedings remanded to the designated officer.
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2024 (2) TMI 127
Wrongful availment and utilization of CENVAT Credit - HELD THAT:- Having regard to the materials on record, the two Show Cause Notices and the provisions contained in sub-clause [b] of sub-section [2] of Section 6 of the CGST Act, 2017/SGST Act, 2017, the respondent CGST authorities shall not proceed further in terms of the Show Cause Notice dated 27.12.2023 till the next date of listing. List the case on 07.02.2024.
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2024 (2) TMI 126
Short deposit of the tax due to inadvertence - order passed without considering the submission made by the petitioner - violation of principles of natural justice - HELD THAT:- It appears from the documents placed before this Court that the petitioner relied upon the GSTR-9C in support of the short payment made by it. The same does not appear to have been considered by any of the respondent authorities. The order passed by the adjudicating authority and the appellate authority are set aside. The adjudicating authority is directed to revisit the issue after taking into consideration the GSTR-9C submitted by the petitioner. An opportunity of hearing shall be given to the petitioner place all documents in support of its claim. The writ petition stands disposed of.
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2024 (2) TMI 125
Validity of impugned proceedings - Default in payment of GST in spite of the fact that amount was deposited in Electronic Cash Ledger (ECL) - delay in filing of GSTR-3B returns - HELD THAT:- The issue involved in this writ petition has already been elaborately dealt with by this Court in M/S. EICHER MOTORS LIMITED, REPRESENTED BY ITS GROUP MANAGER, FINANCE, MR. R. HARI PRASAD VERSUS THE SUPERINTENDENT OF GST AND CENTRAL EXCISE, RANGE II, TIRUVOTTIYUR DIVISION, THE ASSISTANT COMMISSIONER OF CENTRAL TAX CENTRAL EXCISE, CHENNAI [ 2024 (1) TMI 1111 - MADRAS HIGH COURT] , which will squarely apply to the present case also. The credit to the account of Government would always occur not later than the last date for filing the monthly returns in terms of the provisions of Section 39(7) of the Act - Once the amount is paid by generating GST PMT-06, the said amount will be initially credited to the account of the Government immediately upon deposit, at which point, the tax liability of a registered person will be discharged to the extent of the deposit made to the Government. Thereafter, for the purpose of accounting only, it will be deemed to be credited to the ECL as stated in the Explanation (a) to Section 49(11) of the Act. Petition allowed.
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2024 (2) TMI 124
Violation of principles of natural justice - Assessment u/s 73 r.w.s. 75(4) - Validity of summary of order in form GST DRC-07 issued in consequence of Assessment order - demand for excess Input Tax Credit inclusive of interest and penalty, on the ground that the said order has been passed in an ex-parte proceedings without providing an opportunity of personal hearing to the Petitioner - HELD THAT:- The language employed in sub-section 4 of Section 75 of the Act leaves no room for any doubt that the word or is used by the law makers for a specific purpose. Although, in the first portion of the statute, i.e. subsection 4 of Section 75 of the Act, the statute talks about a specific request, the portion after the word or makes it clear like cloudless sky that opportunity of hearing is required to be given, even in those cases where no such request is made but adverse decision is contemplated against such person. In the instant case whether or not the petitioners have specifically asked for personal hearing, fact remains that the adverse decision was contemplated against the petitioners. In that event, it was obligatory and mandatory on the part of respondents to provide the petitioners opportunity of personal hearing. Admittedly, no opportunity of personal hearing has been provided in both the matters. Resultantly, the decision making process adopted by the respondents is vitiated and runs contrary to the principles of natural justice and statutory requirement of sub-section 4 of Section 75 of GST Act. The impugned proceedings after the stage of reply of show cause notices, in both the cases are set-aside. The respondents shall provide opportunity of hearing to the petitioners in both the cases by some other officer than the officer who has issued the show cause notice - Petition disposed off.
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2024 (2) TMI 123
Validity of circular dated 20.11.2017 (Annexure P-3) in which stay has been declined in a large number of cases at a subsequent point of time after noticing that the judgment of the Andhra Pradesh High Court had been stayed by the Apex Court in THE ASSISTANT COMMISSIONER (STATE TAXES) ANR. VERSUS M/S SRI DHANA LAKSHMI RAW AND BOILED RICE MILL ORS. [ 2022 (11) TMI 1442 - SC ORDER] - HELD THAT:- To come up for service of respondents No.2, 5 6 by way of dasti process for 25.01.2024 - In the meantime, proceedings may carry on but the final order may not be passed.
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2024 (2) TMI 122
Difficulty in unitizing ITC for set off of amount required to be paid (pre-deposit) before filing of appeal - Ineligible ITC availed on account of taxpayers whose registration has been cancelled - Interest payable on delayed payment of tax in cash - Period of limitation under Section 107 (1) of APGST Act, 2017. Ineligible ITC availed on account of taxpayers whose registration has been cancelled - HELD THAT:- The petitioner wants to file appeal with respect to the liability / the amount, let the petitioner file appeal within the statutory period after complying with the legal provisions to that extent - if the appeal is not filed within the statutory period of three months, the respondents would be at liberty to proceeding further pursuant to the same impugned notice with respect to the amount. Interest payable on delayed payment of tax in cash - HELD THAT:- Since the petitioner is ready to make the payment of the amount thereunder, in instalments and Section 80 of the Act provides for the concerned authority to fix instalments for payment, to that extent, the petitioner shall approach the authority by filing appropriate application, manually, as it is submitted that the same is not being accepted electronically, under Section 80 of the Act, in the prescribed format, within a period of one week from the date of receipt of copy of this Order. The authority shall thereafter consider the petitioner s request for fixing the instalments for payment as per law. It is observed that if the petitioner s grievance with respect to the system not accepting electronically the application for fixing instalments under Section 80 or for filing appeal under Section 107 with respect to the part of the liability amount of tax / penalty or interest, as the case may be, is correct and the system is accepting only such request electronically for the entire amount or entire order to avoid inconvenience to the other dealers, such grievance may be attended and appropriately resolved for future. The writ petition is disposed of.
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2024 (2) TMI 121
Refusal to grant certified copies of the order sheet/note sheet and search warrant - Non-payment of GST - Works Contract Services - HELD THAT:- The process of investigation in tax evasion cases cannot be construed to be over in the event of issuance of Show Cause Notice by the competent authority and the investigative process can be said to be over only when the quantum of evasion has been quantified or it has been determined that there was in fact no evasion of taxes or contravention of law by the process of adjudication/appeal. Further, the question of launching of prosecution, which is in many cases is a natural extension of an investigation, still remains to be decided and if it were to be assumed that an investigation is deemed to be concluded on issuance of Show Cause Notice and that the order sheet/note sheet recorded in the case file were to be disclosed, the person against whom prosecution is proposed to be launched by the department would gain an unfair advantage. Mere issuance of SCN does not mean that the process of investigation has been concluded and a final decision has been arrived at, rather, it is only one of the steps to arrive at a final decision: As such any disclosure of information at this stage, as sought for by the petitioner, would impede the process of investigation which can be deemed to be complete only after the final decision/adjudication about the liability of the person under investigation has been made after the matter has gone through all the stages of appeals and revisions and a final decision about prosecuting or not prosecuting such person has been taken by the competent authority. This Court is not inclined to entertain the prayers of the Petitioners. Accordingly, this Court hereby allows the rejection letters issued by the Deputy Director, DGGI (Opposite Party No.1), refusing to grant certified copies of the order sheet/note sheet and search warrant. Petition dismissed.
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2024 (2) TMI 120
Interest for delay in payment of Output Tax - return was not declared within the prescribed time - claim of less ITC wrongly however remaining amount was lying in ECRL - HELD THAT:- Provision inserted in sub-Section 50(1) of the WBGST Act, 2017 clearly provides that the interest would be levied only on that part of the tax which is paid in cash, the assessing authority should not have been acted arbitrary in exercise of power to issue Notice. It would be appropriate to set aside the notice dated 17.11.2022 as well as impugned order dated 20.04.2023 passed by 1st Appellate Authority and remand the matter to the Assistant Commissioner of Revenue (WBGST), Commercial Taxes, WB, Siliguri Circle for reconsideration of the matter afresh taking into consideration of amendment carried out by virtue of the Finance Act, 2021 and also issue raised by the petitioners with regard to bona fide and inadvertent mistake committed by the petitioners accountant and subsequently rectified after detection and brought to knowledge of the Authority in accordance with law. Application disposed off.
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2024 (2) TMI 119
Maintainability of appeal - appeal filed after 289 days from the date on which even the limitation period expired - HELD THAT:- An appeal could have been filed on or before 29.05.2022, which provision was not availed by the petitioner herein. The Hon ble Supreme Court in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [ 2021 (3) TMI 497 - SC ORDER ] also declared that if a longer period than 90 days is provided in a Statute, then that longer period will apply. In the BGST Act, u/s 107(4) there is a provision for condonation of delay, if the appeal is filed delayed, within one month of expiry of limitation. Even if that be deemed to be applicable then the appeal ought to have been filed by 28.06.2022. The appeal is filed only on 13.04.2023 after 289 days from the date on which even the limitation period, as stipulated by the Hon ble Supreme Court, expired. There are no reason to invoke the extraordinary jurisdiction under Article 226, especially since it is not a measure to be employed where there are alternate remedies available and the assessee has not been diligent in availing such alternate remedies within the stipulated time. The writ petition hence would stand dismissed.
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Income Tax
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2024 (2) TMI 118
Benefit of the Income Tax and Income Declaration Scheme - payment made by the assessee prior to the IDS scheme (i.e. 1st June 2016) rejected - request of the assessee for adjustment of the tax of 1.25 crores towards IDS 2016 rejected as per the IDS Scheme tax paid in the form of Advance tax, Self Assessment tax prior to IDS Scheme (i.e. 1st June 2016) are not allowed to claim under IDS except the TDS payments - HELD THAT:- Income Declaration Scheme, 2016, is a beneficial piece of legislation intended to encourage defaulters to settle their income tax dispute by paying the tax due together with surcharge and penalty. As per Section 183(4), no deduction of any expenditure or allowance shall be allowed against the income in respect of which declaration has been filed. As per Section 193 of the Finance Act, 2016, a declaration made by misrepresentation or suppression of facts is void and shall be deemed never to have been made under the Income Declaration Scheme, 2016 under Finance Act, 2016. If the amount paid by the petitioner during the assessment year 2012-2013 towards Advance Tax and Self Assessment Tax after due date for filing of the Return u/s 139 was Rs. 1.25,00,00,000/-, it remains to be unexplained as to how the tax liability of the petitioner for the said Assessment Year was reduced to Rs. 94,15,230/- by the petitioner in the declaration filed under the Income Declaration Scheme, 2016 to Rs. 94,15,230/- as detailed in Table-1. But for the aforesaid issue regarding the tax liability of the petitioner for the Assessment Year 2012-13 in the Declaration filed by the petitioner under Income Declaration Scheme, 2016, we see no impediment in allowing the petitioner to adjust the amount paid as Advance Tax and Self Assessment Tax towards tax liability of the petitioner under Income Declaration Scheme, 2016. Therefore, the impugned order is set aside for limited purpose. The case is remitted back to the respondent along with the Assessing Officer for redo the exercise after examining the accounts of the petitioner for Assessment Year 2012-13 and ascertain whether the petitioner has indeed made a correct declaration of Income for the Assessment Year 2012-13 in the Declarations. If so, the Declaration filed by the petitioner may be accepted and closed under the provisions of the Income Tax and Income Declaration Scheme, 2016. As pointed out in Table-2, there are also certain arithmetical error in so far as the amounts to be paid by the petitioner under the Income Declaration Scheme, 2016. This aspect also may be examined by the respondent along with the Assessing Officer.
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2024 (2) TMI 117
Reopening of assessment - valid sanction u/s 151 (ii) or 151(i) - Assessment Year 2016-17 - HELD THAT:- As respondents, does not dispute that on facts as well as on law the issue raised in the present petition is covered by the judgment of this Court in Siemens Financial Services Pvt. Ltd. [ 2023 (9) TMI 552 - BOMBAY HIGH COURT] wherein the Court has held that for the Assessment Year 2016-17, the sanction should have been given u/s 151 (ii) and not u/s 151(i) and consequentially the sanction is invalid, on account of which, the notice issued itself would be rendered invalid and has to be quashed. Thus as the notice dated 01/07/2022 in the instant petition, relates to Assessment Year 2016-17 and refers to prior approval of the Principal CIT-1, Nagpur which is relatable to Section 151(i) and not to Section 151(ii) of the Income Tax Act, 1961, which position is not disputed by respondents, and since the date of the notice is 01/07/2022, what would be applicable would be Section 151(ii) of the Income Tax Act, 1961. In that factuality of the matter, the case being squarely covered by what has been held in Siemens Financial Services Pvt. Ltd. (supra), the notice dated 01/07/2022 under Section 148 and all consequential action thereto are therefore quashed and set aside on the above ground. Though as per respondents, that there is a proposal to challenge the judgment in Siemens Financial Services Pvt. Ltd. (supra) before the Hon ble Apex Court, that as yet has not been done, considering which there is no reason to entertain his request for an adjournment on that ground. Petition is accordingly allowed.
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2024 (2) TMI 116
Validity of proceedings u/s 153C - whether the assessee should be treated as a Searched Person or Other Person ? - Whether Loose Sheets and Diary have any evidentiary value? - HELD THAT:- The entire allegation is made out on the basis of loose sheets of documents, which does not come under the ambit and scope of books of entry or as evidence under the Indian Evidence Act. It is established in law by the Hon'ble Apex Court in COMMON CAUSE AND OTHERS v. UNION OF INDIA [ 2017 (1) TMI 1164 - SUPREME COURT] that a sheet of paper containing typed entries and in loose form, not shown to form part of the books of accounts regularly maintained by the assessee or his business entities, do not constitute material evidence. Following the law declared by the Hon'ble Apex Court, we are of the view that the action taken by the respondent / Revenue against the Assessee based on the material contained in the diaries/loose sheets, are contrary to the law declared by the Hon'ble Apex Court. In that view of the matter, impugned notices issued under Section 153C of the Act, based on the loose sheets/diaries are contrary to law, which require to be set aside in these writ appeals, as the same are void and illegal. Whether Centralization is in violation of Section 127 of the Income Tax Act, 1961, is valid? - officer of Bangalore Judicature sent Notice and Assessment order to the resident of Delhi - As per section 127 of the IT Act, before transferring the cases, a reasonable opportunity must be provided to the Assessee, which is evaded as per the papers provided herein, furthermore officer of Bangalore Judicature should not have sent Notice and Assessment order to the respondent who is a resident of Delhi which is in total violation of section 127 of the Act. Whether the Notice u/s 153C is valid herein? - As the title enunciates, Assessment of income of any other person , no search is sine qua non for issuance of proceedings under Section 153C of the Income Tax Act, 1961. The searched person in the instant case is the petitioner, as the search was conducted in his premises, which is evident from the Panchanama. The distinction between searched person and other person is misinterpreted in the case advanced by the Appellant-Revenue, as the premises of the Respondent was searched and documents pertaining to him were seized, thereby making him the searched person. The stipulated conditions have not been satisfied in the instant case. Thus, considering the arguments advanced by the counsel for both parties vehemently, the learned Single Judge opined that the impugned notices are liable to be set aside as sought for, which are arising out of wrong interpretation of Section 153C of the Act, and the entire case was remanded to the competent authority/ respondent-Revenue for fresh consideration and to pass appropriate orders in accordance with law, after affording reasonable opportunity to the petitioners in the writ petitions. The learned Single Judge having gone through the entire material available on record had observed that the initiation of proceedings by the respondent-Revenue based on the diaries/loose sheets against the petitioners in the writ petitions is without jurisdiction and contrary to the law declared by the Hon ble Apex Court and same cannot be touched upon while conducting de novo enquiry afresh. Whether writ petitions before the learned Single were not maintainable on the ground of alternative remedy and delay and laches? - In the given facts and circumstances of the case and also issues involved between the Revenue and the assessee respectively, normally, the High Court should not entertain writ petitions unless it is shown that there is something more in a case, something going to the root of the jurisdiction of the officer, something which would show that it would be a case of palpable injustice to the writ petitioner to force him to adopt the remedies provided by the statute. But, if the High Court had entertained a petition despite availability of an alternative remedy, it would not be justifiable for the High Court to dismiss the same on the ground of non-exhaustion of statutory remedies, unless the High Court finds that factual disputes are involved and it would not be desirable to deal with them in a writ petition. The learned Single Judge had referred to a plethora of decisions which were facilitated on behalf of the petitioners and respondent / Revenue and the same decisions have been referred to even in the present writ appeals. In the given facts and circumstances of the matter, it is relevant to refer to the case of NISHANT CONSTRUCTION (P) LTD. [ 2017 (3) TMI 1048 - ITAT AHMEDABAD ] wherein it is held that, in the absence of any corroborative evidence, loose sheet can at the most be termed as dumb document which did not contain full details about the dates, and its contents were not corroborated by any material and could not be relied upon and made the basis of addition. Reliance can also be placed on the judgment of the Panaji Bench of ITAT in the case of ABHAY KUMAR BHARAMGOUDA PATIL [ 2018 (9) TMI 209 - ITAT PANAJI wherein the judgment of the Apex Court was relied upon. In the instant case, the first issue raised by the Revenue is as regards the addition of income made by the Assessing Officer based on loose sheets found in the house of a third party. We find that the Revenue has not established the said loose sheets to be considered as evidence in law by producing corroborative evidence supported by judgments and findings. Further, since the statement made by Shri K. Rajendran under Section 132 of the IT Act is later retracted by him by filing an affidavit, the statement given by him does not hold any evidentiary value. The notice issued under Section 153C of the IT Act in respect of the Assessment year 2018-19 is not applicable, which is also supported by various judgments of the High Court. Further, the notice as regards the Assessment years 2015-16, 2016-17 and 2017-18 are also not applicable, as the total addition of income were made on the basis of loose sheets. Further, the panchanama or mahazar of all the loose sheets said to have been seized from the house of Shri Rajendran, are now unavailable and the learned counsel for the Revenue has no answer for the same. On these premise, the assessment order made for the Assessment years 2015-16, 2016-17, 2017-18 and 2018-19 requires to be quashed. Insofar as the contention as regards cash having been found in Premises, New Delhi during search, as per Section 292C of the IT Act, the presumption in law is that the cash seized belongs to the owner of the house from where it was seized. However, as regards the said cash which was found, the respondent / assessee had filed his Income Tax Return including the said cash as advance tax, and the same was also accepted by the Income Tax Department. Even the cross-examination of all the parties involved also proves that clearly the cash found belonged to Shri Sunil Kumar Sharma. As satisfaction note is required to be recorded under Section 153C of the IT Act for each Assessment Year and in the impugned proceedings, a consolidated satisfaction note has been recorded for different Assessment Years, which also vitiates the entire assessment proceedings. In view of all these findings, it is said that the appeals do not have any substance for seeking intervention as sought for by the appellant / Revenue. In the light of the above said Apex court Decisions and the Panchanama provided herein, it is deemed appropriate to conclude that the notice provided under Section 153C is bad in law. Decided against revenue.
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2024 (2) TMI 115
Levy of Penalty u/s 271 - certain expenses which were not allowable expenses under the Act were not added back to the total income in the computation of income and disallowance of such expenses has been mentioned by the auditors in the tax audit report - error on the part of the assessee was detected during the course of assessment proceeding u/s. 143(3) of the Act on scrutiny by the AO - before ITAT affidavit of Managing Director of the assessee was filed stating that return was filed by the then CFO, who since left the company and migrated to United Kingdom, who made an inadvertent error of not considering the disallowances which were mentioned in the tax audit report while uploading the return of income HELD THAT:- ITAT in its order pronounced [ 2017 (3) TMI 1940 - ITAT MUMBAI] as impugned in this appeal, has come to a factual finding that there is no intention on the part of assessee to conceal the income or furnish inaccurate particulars of income. It has also accepted the explanation that the CFO was entrusted with the filing of return and the CFO made a mistake in not properly uploading the return by filling up the return with the disallowances which were already reported by the auditors in the tax audit report. ITAT has come to a factual finding that there was no intention of furnishing any inaccurate particulars or concealment of income as the facts undoubtedly suggest so. In a case that was before the Apex Court in the matter of Price Waterhouse Coopers Pvt Ltd. [ 2012 (9) TMI 775 - SUPREME COURT] Apex Court set aside the penalty proceedings in view of the findings of fact that the tax audit report was filed a/w return which would indicate that assessee had made a computation error in its return of income. In the case at hand also, the tax report has been filed along with the return of income. Therefore, we would agree with the ITAT that it was only a mistake while uploading the return of income in the given facts and circumstances of the case. Decided against revenue.
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2024 (2) TMI 114
Taxability of Waiver of loan - loan advanced for acquisition of capital equipments - Revenue's first contention that the loan waived was availed towards working capital - whether waiver of loan attributable for the working capital was taxable under Section 28 (iv)? - HELD THAT:- Revenue's contention in contra-distinction with the ratio in Mahindra Mahindra Ltd. [ 2018 (5) TMI 358 - SUPREME COURT] the Hon'ble Single Judge has held that the nature of loan would be of no relevance. He has further held that the benefit of waiver of loan in the case on hand is not other than in the shape of money. Therefore, the benefit would fall outside the ambit of Section 24 (iv) of Income Tax Act. It is not in dispute that the assessee had availed loan from several banks and the Consortium of Banks had waived the loan. Thus, whether the loan was availed for the purpose of working capital or acquisition of capital assets should not really matter and we are at one with the Hon'ble Single Judge with regard to findings recorded. Second contention of the Revenue is that right recourse for the assessee was to file an ITA and not a writ petition - Appellant is right in his submission. Ordinarily, a writ Court should not entertain a matter where there exists an alternative efficacious remedy except in rare cases such as violation of Principles of Natural Justice, imposition of disproportionate penalty, etc. In the instant case, the Hon'ble Single Judge has entertained the writ petition by recording that the issue involved is covered by Mahindra Mahindra Ltd. (supra). Having heard the learned Advocates on both sides, we are at one with the view taken by the Hon'ble Single Judge. Though the contention with regard to appellate remedy urged on behalf of the Revenue would merit some consideration, in the facts and circumstances of this case, we do not think it appropriate to interfere with the order passed by the Hon'ble Single Judge. In any event, the matter has been remitted to ITAT and Miscellaneous Petition is pending consideration. In the circumstance, we find no merit in this appeal and accordingly the appeal stands dismissed.
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2024 (2) TMI 113
Reopening of assessment u/s 147 - mandation to get prior approval of the specified authority before issuance of show cause notice u/s 148A - scope of new regime - as alleged cash sheets are bogus and sham documents prepared by the then Chief Managing Director of the company - As decided in ASHISH AGARWAL [ 2022 (5) TMI 240 - SUPREME COURT] before issuing any notice u/s 148, AO shall (i) conduct any enquiry, if required, with the approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (ii) provide an opportunity of being heard to the assessee, with the prior approval of specified authority; (iii) consider the reply of the assessee furnished, if any, in response to the show cause notice referred to in clause (b); and (iv) decide, on the basis of material available on record including reply of the assessee, as to whether or not it is a fit case to issue a notice under Section 148 and (v) the AO is required to pass a specific order within the time stipulated. Also stated in the above case that all safeguards are provided before notice under Section 148 of the IT Act is issued. At every stage, the prior approval of the specified authority is required, even for conducting the enquiry as per Section 148(a). Only in a case where, the assessing officer is of the opinion that before any notice is issued under Section 148A(b) and an opportunity is to be given to the assessee, there is a requirement of conducting any enquiry, the assessing officer may do so and conduct any enquiry. Thus, if the assessing officer is of the opinion that any enquiry is required, the assessing officer can do so, however, with the prior approval of the specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment. Petitioner, submitted that there was neither prior approval before issuance of show cause notice under Section 148A of the said Act nor there was approval before initiating action under Section 148A of the said. Thus, procedure adopted by respondent No. 1 is arbitrary to observations of the Honourable Apex Court in the case supra - though the petitioner by reply requested for personal hearing, the same was not granted to the petitioner and, therefore, the action initiated by respondent No. 1 is illegal and as such, effect and operation of the impugned Notices deserve to be stayed. Respondents submits that the Assessment Authority has already followed due procedure and, thereafter, the action was initiated. He seeks time to take necessary instructions from the respondents and to file reply. HELD THAT:- As respondent waives service of Notices for respondents so also for newly added respondent No. 3. Stand over to 5.12.2023. In the meanwhile, effect and operation of Notice u/s 142(1) of the said Act; impugned Notice under Section 148; impugned order under Section 148A(d), and impugned Notices under Section 148A(b) is stayed.
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2024 (2) TMI 112
Estimation of income - bogus purchases - AO restricted the disallowance to 12.5% and 10% for the assessment years 2009-10 and 2010-11, respectively - claim of the assessee that all the payments were made by account payee cheque - HELD THAT:- We find that before the lower authorities, the assessee was neither able to produce the parties nor could furnish the documents as directed by the AO. Even before us, no such details are available on record. Therefore, it is evident that the assessee has failed to prove the genuineness of the purchases made from the supplier, also evident from the record that the Revenue has not doubted the usage of materials for construction contract work undertaken by the assessee. It cannot be doubted that without the purchase of material, the assessee cannot carry out the construction work. Therefore, it appears to be a case of bogus bills arranged from the aforesaid entities and materials purchased from somewhere else at a lower cost. Thus, we deem it appropriate to restrict the disallowance to 8% of the disputed purchases in both assessment years. We find that the same is also in line with the judgment of Paramshakti Distributors Ltd. [ 2019 (7) TMI 838 - BOMBAY HIGH COURT] . Decided partly in favour of assessee.
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2024 (2) TMI 111
Disallowance u/s. 40(a)(ia) - Non deduction of TDS on surplus service job work contract - noone has represented the assessee even though notice for hearing has been served which were issued by RPAD - assessee had claimed that the contractor SVPL had produced a certificate issued u/s. 197(1) for lower deduction of TDS because of which it had not deducted tax at source on the payment so made - as per AO no certificate of lower deduction of tax u/s. 197(1) was issued in the name of the contractor because of which he made the disallowance. HELD THAT:- According to us, these are the facts which are verifiable from the records and appropriate examination would reveal the correct state of affairs in respect of claim made by the assessee and as held by the Ld. AO so as to give the correct effect to the transaction of payment made by the assessee to SVPL. However, from the records available before us, there is nothing to corroborate the above stated facts so as to verify the claim of the assessee as also to corroborate the stand taken by the Ld. AO. Considering the facts on record and the orders of the authorities below, we are inclined to adjudicate upon the matter ex parte qua the assessee. Thus, with the assistance of DR and on perusal of the material available on record, we do not find any reason to interfere with the observations and findings given by the Ld. AO to sustain the disallowance so made - Decided against assessee.
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2024 (2) TMI 110
Unaccounted business income - treating the sale proceeds of shares as unexplained cash credits u/s 68 - addition on account of unaccounted business income in respect of selling of the scrip - HELD THAT:- Assessee was majorly dealing with trading activities and that was not disputed at any point of time. As further noticed that the assessee has not claimed any Long Term Capital Gain or Short Term Capital Gain as well as any loss in respect of these trading of shares. From the perusal of purchase and selling of shares/scrip of VAS Infrastructure Ltd., the assessee has given all the details to the Assessing Officer during the assessment proceedings, including the details of brokers, details of transactions, credit notes, D-mat account, transaction details which were not taken into account either by the AO or by the CIT(A). The summons issued to entry provider as per the AO, has nothing to do with the assessee and the said statement was not at all verified by the AO as well as the assessee was not given any opportunity of confronting this statement. The assessee has rightly claimed the said trading as business income and, therefore, the decision of Hon ble Kolkata High Court in the case of Swati Bajaj [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT] will not be applicable in the present case. The sale proceeds of shares were properly explained by the assessee through the documentary evidence which was filed before the AO as well as before the CIT(A). AO as well as the CIT(A) was not right in making/confirming the addition to that effect. Decided in favour of assessee.
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2024 (2) TMI 109
Penalty u/s. 270A - under reporting of income in consequence of mis-reporting of income - as per AO assessee failed to establish any nexus between the income earned from other source and interest expenses as explained u/s. 57 - HELD THAT:- While invoking section 270A(9)(c) assessee has given a categorical reply to AO during the assessment proceedings and also submitted that all the details of books of accounts as well as the audit account. Assessee has established the nexus between the interest expenses and interest earned during the financial year 2009-10 from unsecured loans and in fact has given the genuineness, identity and creditworthiness for those parties. The assessee has also submitted notice copy thus, has given all the details and explained the expenses including that of the interest expenditure which was led out or extended wholly and exclusively for purpose of earning income from LIC policy maturity hence director fees from Mila India Pvt. Ltd.. Thus, it cannot be said that the assessee has under-reported in consequence of mis-reported the income of assessee at any point of time. Thus, section 270A(9)(c) of the act will not be attracted in the present case. Decided in favour of assessee.
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2024 (2) TMI 108
Validity of Reopening of assessment - reasons to believe - unexplained investment in construction of house property and no return of income has been filed by the assessee for the year under consideration - information received from DDIT(Inv.) that assessee has invested more than 15 crores in construction of house property - HELD THAT:- Apparent from factual inconsistencies in the reasons recorded there is no live link between the materials and the belief of the AO that the income to the extent of more than 15 crores has escaped assessment. Apparently, there is no enquiry made by the AO to find out whether the assessee has filed return of income or not and whether the report of the DDIT(Inv.) which is stated to be the basis for reopening of assessment that the income had escaped more than 15 crores. In the course of assessment proceedings, it appears that nothing was put to assessee to explain the escaped income of 15 crores but the matter of valuation of the property constructed was referred to Valuation Officer who ultimately valued the property at Rs. 58,93,050/-. All these goes to show that absolutely there is no application of mind by the AO before recording reasons to believe that the income of the assessee had escaped assessment more than 15 crores for the assessment year under consideration. The Hon ble Delhi High Court in the case of Pr. CIT vs. RMG Polyvinyl (I) Ltd. ( 2017 (7) TMI 371 - DELHI HIGH COURT ) held that the information received from the Investigation Wing cannot be said to be tangible material per se without a further enquiry being undertaken by the AO and the AO deprived himself of that opportunity by proceeding on the erroneous premise that assessee had not filed a return when in fact it had. AO is not disputing that the assessee filed return of income. If this is the fact, there is certainly a factual inconsistency in reopening the assessment that the assessee has not filed any return of income. Secondly, in the reasons stated the AO believed that the income escaped assessment only based on the report of the DDIT(Inv.) that the income had escaped more than 15 crores. However, we observe that what is the basis for 15 crores is not specified in the reasons. This is only a bald statement that the income of the assessee has escaped assessment for more than 15 crores without spelling out any details which is said to have been given in the DDIT report. Therefore, the reasons recorded in the present case at best can be treated to be a reason to suspect which is not sufficient for reopening the assessment u/s 148 - The requirement of application of mind is missing the present case, there is no independent application of mind by the AO to tangible materials and reasons and the AO failed to demonstrate live link between tangible material and formation of reason to believe that income had escaped assessment. Decided in favour of assessee.
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2024 (2) TMI 107
Addition on account of share premium u/s 56 - FMV determination of share price - difference in FNMV of shares allotted to foreign based company and Indian entities - assessee argued addition u/s 56(viib) does not warrant in the present case as investor company is foreign investor company incorporated in Dubai and assessee-company is joint venture company therefore the provision of section 56(viib) does not apply in the case of assessee-company - HELD THAT:- We note that assessee submitted fair market value of equity shares of the assessee-company, which worked out, on the basis of Discounted Cash Flow Method, and as per DCFM, the fair market value of the equity shares of the assessee-company is Rs. 431.65 per equity share, which was accepted by AO in case of non-residents, in respect of the equity shares of 1,77,820, which were allotted to Dubai-based company. However, the premium amount was not accepted in case of balance shares which were allotted to Indian entities/concerns, hence it is a discrimination done by the Assessing Officer between residents and non- residents. Counsel stated that so far premium is concerned, the Indian Residents are entitled for similar treatment, however, assessing officer has failed to provide the similar treatment. We note that assessee-company worked out the premium, on the basis of Discounted Cash Flow Method, and in accordance with applicable Income Tax Rules. We have gone through the Valuation report prepared as per DCF method and noted that premium amount was worked out as per the norms mentioned in the Income Tax Rules and Discounted Cash Flow Method, therefore, we do not find any inconsistencies, hence we delete the addition. Excess claim of depreciation on plant and machinery - assert put to use for less than 180 days - HELD THAT:- The assessee claimed that trial production has started in August 2012 and claimed full depreciation. However, assessee failed to prove start of production by way of excise return for August 2012. This proves that production has not commenced from August but from March 2013 and assessee is entitled for depreciation for half year only. However, we are of the view that one more opportunity should be given to the assessee to plead his case before Assessing Officer, therefore we remit this issue back to the file of the assessing officer with the direction to produce excise records and to explain put to use of fixed assets, with documentary evidences. AO is also directed to examine the relevant documents and adjudicate the issue in accordance with law. Time limit of assessment u/s 153 - whether assessment order is time barred? - HELD THAT:- We note that assessee s case was referred to the Division FT TR for action of information and time taken to exchange for information is to be excluded, which is one year. Therefore, the assessment order was passed within time limit and hence, argument advanced by Ld. Counsel does not have any merit. Hence, we dismiss ground No.3 raised by the assessee.
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2024 (2) TMI 106
Characterization of receipt - Compensation receipt on termination of contract - Addition under Section 28(ii)(e) - as per AO compensation is not reflected in the profit and loss account submitted for the year under consideration, thus said compensation is taxable u/s 28(ii)(e) read with the Board Circular No. 8/2018 dated 26.12.2018 - as per assessee its a capital receipt - HELD THAT:- Compensation received by any person on termination or modification of the terms and conditions of any contract relating to his business is taxable under the head Profits and gains of business or profession . The question that needs to be addressed now is whether reference to business includes profession . In our considered opinion, wherever the Legislature thought of referring to both Business and Profession , it has used both the words in the enactment which means that wherever the word only Business is used, it does not include Profession . The phrase or profession has been inserted by the Finance Act, 2016 w.e.f 01.04.2017 which makes the intent of the Legislature absolutely clear that the Legislature wanted the insertion of the word Profession alongwith Business . Hon'ble Supreme Court in the case of G.K. Choksi Co [ 2007 (11) TMI 7 - SUPREME COURT] made it clear that the word business occurring in clause (iv) of section 32(1) of the Act, by no stretch of imagination, can be said to include profession as well. By the same analogy, reference to business in section 32(ii)(e) of the Act would not amount to reference to profession. Applicability of provisions of section 28(ii)(e) - Impugned compensation whether received on termination or modification of terms and conditions of any contract - The word termination is used in reference to any on-going contract whereas the case of the assessee is non renewal of contract. In our humble opinion, non renewal does not mean termination. The assessee is a freelance journalist. She is not under employment of Spiegel Verlag. Therefore, there is no employer-employee relationship. The relevant clauses of the agreement mentioned elsewhere refer to renewal of the agreement which, if not renewed by 31.01.2000, will end on 30.04.2000. Since the contract was not renewed, it came to an end. Compensation received by the assessee is by way of mutual agreement between Spiegel Verlag and the assessee. When the dispute was sub judice before the Hon'ble High Court of Delhi, and the Division Bench disposed the appeal on finding that a settlement has taken place between Spiegel Verlag and the assessee on a payment of agreed sum. Thus, it can be seen from the above that non renewal of any contract does not amount to retrenchment. Considering the facts of the case in totality, we are of the considered view that provisions of section 28(ii)(e) do not apply on the given facts and therefore, the orders of the lower authorities are erroneous in law. Applicability of the provisions of section 56(xi) - Here also reference is termination of employment. For our detailed reasons given in herein above, we are of the opinion that this section is also not applicable on the given facts. Considering the facts of the case from all possible angles, we do not find any merit in the impugned addition. Therefore, the Assessing Officer is directed to delete the same. Thus as the assessee has never shown the compensation of Rs. 3 crores in her profit and loss account and only out of abundant precaution and to avoid future levy of interest, the assessee has paid self assessment tax. But the assessee has never taken a stand that the said compensation is taxable in her return of income. She has been consistently claiming that the said compensation, being a capital receipt, is not taxable. Assessee appeal allowed.
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2024 (2) TMI 105
Denial of registration u/s. 12AB(1)(ac)(vi) and approval u/s.80G(5)(iv) - Standard Operative Procedure - Shorter period given to reply - non disposal of adjournment petition - denial of natural justice - as submitted CIT, Exemption without disposing of the adjournment petition sought by the appellant had proceeded with the disposing of the application - HELD THAT:- As appellant was asked to furnish certain information requesting the appellant society to file the details on or before 18.10.2023 thereby giving a short period of time i.e. less than one week, which is against the Standard Operative Procedure ( SOP ) issued by the CBDT dated 19.11.2020, wherein, minimum period of 15 days is required to be given to the assessee to comply with notices u/s 142(1) from the date of issue of the notice. Recently, in the case of Dauphin Travel Marketing Private Limited [ 2023 (7) TMI 1355 - DELHI HIGH COURT ] taking note of this SOP held that the grant of insufficient time to respond the notice violates the principles of natural justice and, therefore, set-aside the assessment. Thus, it is clear that the appellant was given unreasonably very short period of time to respond to the notice, which is against the principles of natural justice. We find that the approach adopted by the ld. CIT, Exemption is unreasonable and violates of the principles of natural justice. In the circumstances, we are of the considered opinion that it is a fit case to remand the matter to the file of ld. CIT, Exemption for de novo consideration in accordance with law.
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2024 (2) TMI 104
TP adjustment - consideration paid to the associated enterprise pursuant to the merger of the holding company (i.e. subsidiary of associated enterprise) with the assessee (i.e. step down subsidiary of the associated enterprise) - As per the assessee, the merger transaction does not result in any income for the assessee and it is also not a case wherein the assessee has sought to claim any allowance or deduction for the equity shares, CCDs, or cash paid/issued to DIHBV - Whether entire transaction is on the capital account, and transfer pricing provisions are not applicable to the transactions on the capital account? - whether the transfer pricing provisions under Chapter X of the Act are applicable to the present case? HELD THAT:- It is pertinent to note that as per Explanation to section 92B of the Act, the transaction of business restructuring shall be considered an international transaction, irrespective of the fact whether it has a bearing on the profit, income, losses, or assets of such enterprises. In this regard, the observations in Instrumentarium Corporation Ltd. [ 2016 (7) TMI 760 - ITAT KOLKATA] also becomes relevant, wherein it was held that while a notional interest income cannot indeed be brought to tax in general, the arm s length principle requires that income is computed, in certain situations, on the basis of certain assumptions which are inherently notional in nature. Therefore, we find no merits in the aforesaid plea of the assessee and once a transaction falls within the ambit of international transaction , Chapter-X of the Act provides a mechanism for computation of arm s length price in relation to such international transaction. We find that the Hon ble NCLT took into consideration the report of the Regional Director, wherein it was stated that the tax implications if any arising out of the scheme is subject to the final decision of the Income Tax authorities - we find that before the Hon ble NCLT, the counsel for the Petitioner companies also undertook to comply with all applicable provisions of the Act and agreed that all tax issues arising out of the scheme would be met and answered in accordance with the law. Therefore, it is evident that in the order passed by the Hon ble NCLT, the Department has not waived off its right to examine the tax issues arising out of the scheme of amalgamation. As pertinent to note that the transaction pursuant to which the assessee paid consideration of Rs. 188.35 crore to DIHBV is an international transaction as per the provisions of section 92B. We find that accordingly, the TPO proceeded to compute the arm s length price of the aforesaid international transaction. There is no material available on record to show that the above exercise was conducted and the merger consideration was found to be at arm s length by the Revenue at the time of approval of the scheme of amalgamation by the Hon ble NCLT. This aspect is further evident from the observations of the Hon ble NCLT wherein the undertaking of the Petitioner companies to comply with the applicable provisions of the Act is recorded. Therefore, we agree with the findings of the learned DRP that the TPO is not questioning the scheme of amalgamation as approved by the Hon ble NCLT, and what is being questioned is whether the payments made to the parent holding company in the guise of payment for amalgamation are consistent with the provisions of transfer pricing as contained in the Act. Accordingly, we do not find any merits in the aforesaid submission of the learned AR and accordingly, the same is rejected. What has been transferred pursuant to the merger is merely an investment company without any erosion in function, asset, and risk profile of DIHBV requiring additional compensation apart from issuance of shares of the assessee. Therefore, in the present case, the entire merger transaction is a mere restatement of accounts of the subsidiary companies without the actual transfer of any asset and liability by DIHBV. As we agree with the findings of lower authorities that in substance the transaction is really a relocation of shares of the amalgamating company by the amalgamated company to the existing shareholders of the amalgamating company and insofar as the parent holding company is concerned nothing has changed in substance. In view of the facts and circumstances as noted above, we are of the considered view that the lower authorities have rightly held that shares of the assessee now held by DIHBV represent the fair value of the aforesaid merger transaction. At this stage, it is also pertinent to reiterate the findings in the valuation report dated 30/12/2016 that the management has decided to give a cash consideration to the ultimate shareholder, considering the fact that excess cash is available with the assessee, which has not been fully utilised. Therefore, in view of the above, we find no infirmity in the findings of the lower authorities that issuance of CCDs and payment of cash of Rs. 100 crore represents excessive payment. Since the findings of the lower authorities in treating payment of cash to DIHBV as a deemed loan has been upheld, we direct the TPO/AO to compute the interest on the same in conformity with the observations of the Hon ble jurisdictional High Court in Tata Autocomp Systems Ltd [ 2015 (4) TMI 681 - BOMBAY HIGH COURT] To this extent, the benchmarking by the TPO/AO is modified. As regards the disallowance of interest paid on CCDs is concerned, in view of the aforesaid findings the benchmarking by the TPO/AO is upheld. Decided against assessee.
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2024 (2) TMI 103
Reopening of assessment - assessee taken bogus donation - whether search/survey carried out on the donee 2-3 months prior to the finalisation of the scrutiny assessment of the assessee would be construed as if material was transmitted to the knowledge of the ld. Assessing Officer or not? - HELD THAT:- We are of the view that immediately after the search and survey upon a donee, the material will not be amplified and distributed amongst all the ld. Assessing Officers throughout the country. It was a fraud in an organized manner spreading over throughout the country in which the assessee is also a beneficiary. So it is not humanly possible for the AO to lay his hands on that material before finalisation of the assessment order. It is totally new information given to AO by the DDIT, Kolkata. Whether AO has used borrowed opinion for harbouring the belief that income has escaped assessment? - AO has formed an opinion that on the basis of information received from DDIT, it is found that assessee has taken a bogus donation. How it can be termed as a borrowed opinion. DDIT has transmitted the details exhibiting the fact that donee was engaged in providing accommodation entries to alleged such donors. Therefore, we do not deem it necessary to recite six case laws referred by assessee on this point because it is a question of fact and not any proposition. We agree if there is no specific information to the ld. Assessing Officer, and he has blindly followed some dictum, then reopening is not justified but here the DDIT has remitted the information and on that basis he formed his opinion. Whether CIT(Appeals) has erred in rejecting its ground of reopening by following the case law where original assessment was processed under section 143(1) of the Income Tax Act. ? - We are of the view that Assessing Officer reopened the assessment on the basis of information transmitted to it by the DDIT (Investigation). Therefore, that investigation revealed that more than 1500 donors have taken accommodation entries. AO has gone through these materials and thereafter prima facie formed an opinion. Therefore, by making reference to a case law where original assessment was under section 143(1) would not make much change in the opinion formed by the ld. 1st Appellate Authority. The question is assessment has been reopened within four years from the end of the assessment year. There was a specific information, which has duly been perused by the ld. Assessing Officer before forming the opinion that income has an escaped assessment. Therefore, we do not find any merit in the Cross Objection raised by the assessee. Accordingly 1st ground of the Cross Objection is rejected. Disallowance of deduction claimed u/s 35(1)(ii) - donation been made to M/s. School of Human Genetic and Population Health, Kolkata. - as alleged transaction of bogus donation through false billing and by providing accommodation entries in this matter - main allegation and reason for the survey against the donee was that it had received huge amount of donations on which the applicant society earned service charges - HELD THAT:- In the past, ITAT has consolidated a number of appeals involving this issue in the case of M/s. Tarasafe International Pvt. Limited [ 2023 (8) TMI 137 - ITAT KOLKATA] held that first onus discharged by them has been dispelled by the ld. Assessing Officer with credible material. If the appellants are of such a spirited Corporate House, who wants to build the research organisation of the nation, then they have to demonstrate how such donations were given in the past or in the subsequent period. We have confronted them specifically, but none of the assesses except M/s. H.K. Dutta Company could submit anything in this regard. In the case of this Company, ld. Counsel for the assessee has submitted that small amount of donation has been given to a different organisation in the next year. Therefore, if we weigh the simple plea of the appellants about their bonafide belief for giving such donations, vis-a-vis huge materials collected by the Revenue demonstrating the fact how such a belief is misplaced, then, the scale would tilt in favour of the revenue. It is to be appreciated that roughly 720 entities including individuals available in a partlist on pages no. 72 to 81 of the paper book compiled by the Revenue would have not formed a bonafide belief about giving donation to one entity across India in Kolkata. This material speaks in itself that under a criminal conspiracy, these donations have been arranged by the brokers across India for defrauding the nation. We do not find any credence in the belief of bonafide raised by the appellants. It is also pertinent to note that it is not a simple case of claiming deduction on fulfilment of conditions under section 35(1)(ii) of the Income Tax Act, rather it is a case where Revenue has disproved this claim and proved that, with a criminal mind all such donors have layered their transaction in such a manner which apparently appears to be genuine, but in reality not genuine. They took such a step to commit fraud, an economic offence against the economy of the country. The bonafide of the assessees can be appreciated if they have demonstrated that they have given the donations in the past or subsequent periods to some Institution of national importance, such as Tata Research Centre, certain Hospitals, etc. but none of them has given such a donation except a small amount of few thousand in the case of Abhilasha Tradecom Pvt. Limited. The moment Assessing Officers have dispelled onus discharged by the assessee, then it was their duty to prove the genuineness of their claim with circumstantial evidence as pointed out by the ld. Commissioner in the case of Tarasafe International Pvt. Limited, i.e. what was the purpose of the donation; whether such donation has been given to the School in the past or in the future; whether the Corporate Houses have discussed in the meeting and the Management Committee passed the Resolution for giving the donations; what influenced the assessee to give this donation to the Institution other than deduction under section 35(1)(ii) etc. This issue has been examined in the case of Swati Bajaj Others [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT] . A large number of assessees have claimed long-term capital gain/loss. The Income Tax Department has carried out search/survey upon different entities, which unearthed that certain companies and professionals were providing such claim in the shape of accommodation by manipulating the stocks of certain shell companies. The Hon ble Court has made a detailed analysis of the material found during the course of search and survey on the premises of third entities and set aside the orders of the ITAT in a group of appeals by holding that such claim by the assessees for long-term capital gain was a bogus claim. The Hon ble Court has considered the material collected by the Investigating Wing of the Department on the premises of certain companies ,who were manipulating the stocks or indulging any accommodation entry business. If we apply the ratio of this judgment upon these cases, then it would reveal that the benefit of claim under section 35(1)(ii) is outcome of an organized fraud with the help of certain manipulators. Therefore, we do not find any material in the first fold of arguments raised by the ld. Counsels for the assessees. The appellants are not entitled for deduction u/s 35(1)(ii). Thus respectfully following the above, we allow the appeal of the Revenue, set aside the finding of the ld. CIT(Appeals) and restore that of ld. Assessing Officer that assessee is not entitled for deduction under section 35(1)(ii) of the Income Tax Act. Decided in favour of rvenue.
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2024 (2) TMI 102
Validity of proceedings u/s 153C - period of limitation - HELD THAT:- As guided by RRJ Securities Ltd [ 2015 (11) TMI 19 - DELHI HIGH COURT] and Jasjit Singh [ 2023 (10) TMI 572 - SUPREME COURT] we have no hesitation to hold that the Assessments made for A.Y. 2006-07 and A.Y. 2007-08 u/s 153C consequent to the satisfaction note recorded on 18.11.2013 are outside the scope of Section 153C of the Income Tax Act, 1961 and hence, the assessments are treated as void ab initio. Decided in favour of assessee.
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2024 (2) TMI 101
Disallowance of mark to market losses - AO held that the mark to market losses claimed are in the nature of liability that is not crystallized and, therefore, cannot be claimed as a deduction as business loss - CIT(A), upheld the order of AO stating that the MTM loss is notional and that the assessee s claim that particular method of accounting continuously followed for a long period does not entail the assessee to presume that the method followed is correct - HELD THAT:- We notice that the Special Bench of the Tribunal in the case of DCIT vs Bank of Bahrain Kuwait [ 2010 (8) TMI 578 - ITAT, MUMBAI] has considered the issue of allowability of loss arising out of MTM re-investment of foreign exchange contracts and held that where a forward contract is entered into by the assessee to sell the foreign currency at an agreed price at a future date falling beyond the last date of accounting period, the loss is incurred to the assessee on account of evaluation of the contract on the last date of the accounting period i.e. before the date of maturity of the forward contract Loss claimed by the assessee is to be allowed as a deduction. During the course of hearing, the Ld.AR fairly conceded that the gain on MTM which has been held to be treated as income of the assessee in the order passed under section 154 can be reversed in case the MTM loss is held to be allowed as a deduction. Accordingly, we direct the Assessing Officer to reconsider the order passed under section 154 reversing the MTM gain and bring the same to tax accordingly. Disallowance u/s 14A - assessee has not discharged the onus of evidencing the source of investment is from own funds - assessee has made a suo motu disallowance - HELD THAT:- Though AO admits that Rule 8D is prospective he proceeded to make the disallowance, stating that the assessee in its without prejudice submission has furnished the working of disallowance under section 14A as per Rule 8D. This, in our view, is not a correct approach, since for the year under consideration, Rule 8D is not applicable. It is an undisputed fact acknowledged by the assessing officer that the assessee had its own funds which are more than the investment and, it is a settled position that when own funds are more than the investments there cannot be any disallowance towards interest. As assessee has made a disallowance of 1% on the exempt income excluding long term capital gain on which STT is paid, which, in our considered view, is reasonable towards administrative expenses. Accordingly, we hold that no disallowance is warranted and the addition made by the Assessing Officer is deleted. Disallowance of Bad debts written off - AO held that only writing off of the debts as bad debt in the accounts is not enough and that the assessee is required to furnish complete information to the Assessing Officer to prove with conclusive evidence that the debts have become bad - HELD THAT:- We notice that the co-ordinate bench in assessee s own case for A.Y. 2004-05 and 2005-06 [ 2017 (11) TMI 1839 - ITAT MUMBAI] as noted that in case of some of the debtors the Assessing Officer has alleged that they are in the nature of mere provisions, which requires examination - we direct the Assessing Officer to allow assessee s claim in respect of debts which are actually written-off by applying the principle laid down in the decisions referred to above. Further, the Assessing Officer is also required to examine whether there is any claim of write-off- of bad debt in the nature of mere provisions, hence; not allowable in terms of section 36(1)(vii) and even if the assessee's claim of write-off in respect of a particular, debt having become bad is allowed, in the impugned assessment year, the Revenue is protected under section 41(4) of the Act to bring the amount to tax in case such debt is recovered by the assessee in any subsequent assessment year. With the aforesaid observation, we restore the issue to file of the Assessing Officer for adjudicating afresh - Thus we restore this issue back to the Assessing Officer with similar directions. Business loss claimed on re-possessed assets - AO disallowed the said business loss following the similar disallowance made for A.Y. 2006-07 and that the assessee has not furnished the details - HELD THAT:- We notice that in the details furnished by the assessee before the Assessing Officer, the assessee has furnished the loan account number, party name, and the amount. However in our considered view it is important to examine the amount of loan given, amount realized from the borrower, un-recovered amount, the amount realized on sale, how the net loss is computed etc., and these need to be factually verified. From the details submitted, it is not clear as to how the loss finally claimed is computed i.e. the loss is arising out of the difference between the unrecovered portion of the loan after setting off the amount realized from sale of the re-possessed assets. We, therefore, remit the issue back to the Assessing Officer for fresh examination and direct the assessee to furnish the complete details of loans given, the nature of assets re-possessed, sale value of the re-possessed assets and how loss is computed. It is ordered accordingly. Disallowance towards proportionate claim of issue and discount expenses on bonds while completing assessment under section 143(3) - CIT(A) dismissed the ground stating that the same is not arising out of the assessment order and there is no finding given by the Assessing Officer in this regard in the assessment order - HELD THAT:- We notice that the co-ordinate bench in assessee s own case for A.Y. 2002-03 [ 2015 (2) TMI 1267 - ITAT MUMBAI] had considered the similar issue and has issued a direction to spread the expenditure over the tenure of the bond. We see merit in the contention claim of the assessee that proportionate expenditure pertaining to the year under consideration should be allowed as a deduction. Accordingly, we direct the Assessing Officer to consider the claim of the assessee and allow the deduction in accordance with the directions given by the Tribunal. Rebate u/s 88E - CIT(A) rejected the ground raised by the assessee in this regard stating that the AO has not made any discussion in the assessment order and, therefore, the impugned issue does not arise out of the findings of AO - HELD THAT:- From the submissions of the Ld.AR it is noticed that the assessee has been allowed the rebate under section 88E in the subsequent assessment years, i.e. A.Ys 2006-07 and 2008-09 when the same is claimed in the return of income by the assessee. We, therefore, direct the Assessing Officer to consider the submissions made by the assessee in this regard vide letter dated 26/11/2010 and allow the claim in accordance with law. Needless to say that the assessee be given a reasonable opportunity of being heard. MAT applicability u/s 115JB - HELD THAT:- Respectfully following the decision of the coordinate bench for A.Y. 2004-05 [ 2017 (11) TMI 1839 - ITAT MUMBAI] we hold that provisions of section 115JB is not applicable to assessee and allow the ground. TP Adjustment - A djustment towards margin under charged on Back officer support services - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected. Adjustment towards margin under charged on business support services - HELD THAT:- With regard to the pass through cost for which the TPO has added a margin of 11.59, we notice that from the nature of expenses that these costs are incurred on behalf of the AE and the same is allocated to the AE, using allocation key. Therefore, we are of the considered view that since the costs are pass-through costs and no value addition is made by the company by paying the cost on behalf of the AE and claiming the reimbursement there is no requirement of a mark up. Accordingly, we delete the adjustment made in this regard. Depreciation on leased assets - HELD THAT:- We noticed that the Co-ordinate Bench in assessee s own case for AY 2004-05 and 2005-06 [ 2017 (11) TMI 1839 - ITAT MUMBAI] has considered there is no new lease transaction. The assessee has claimed depreciation on its own fixed assets and depreciation claimed on leased assets were continuing from past lease transactions. Decided against revenue. Addition of non-cash write back made u/s 41(4) - assessee in the financial statements has shown as write back of bad-debts in respect of interest and principle of loan credit card right off in earlier year - AO held that since the assessee is following mercantile system of accounting even though no cash recovery is made, the non-cash write backs also should be brought to tax - HELD THAT:- The Co- ordinate Bench in assessee s own case [ 2017 (11) TMI 1839 - ITAT MUMBAI] for AY 2004-05 and 2005-06 restored the matter back to the file of the Assessing Officer for considering afresh. Respectfully following the above decision of the Tribunal, the issue is restored to the file of the AO with similar directions. This ground of the Revenue is allowed for statistical purposes. Nature of expenses - expenses towards club entrance fees and subscription - revenue or capital expenditure - HELD THAT:- The facts for the year under consideration being similar in assessee s own case for AY 2004-05 and 2005-06 [ 2017 (11) TMI 1839 - ITAT MUMBAI] wherein held that club membership fees for employees are to be treated as business expenditure of a company under section 37 of the Act - Thus respectfully following the above decision of the Co-ordinate Bench, we uphold the decision of the Ld. CIT(A). Both assessee s and revenues appeals are partly allowed.
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Customs
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2024 (2) TMI 100
Classification of Qatar Low Sulphur Condensate (Qatar LSC - CTH 27090000 or CTH 27101990 - exemption under Notification No. No. 21/2002-Cus dated 01.3.2002 read with Notification No. No. 74/2008-Cus dated 04.6.2008 - HELD THAT:- It is noted that the findings arrived at by the Customs, Excise Service Tax Appellate Tribunal (CESTAT) are findings of fact and we do not find any substantial question of law at all. There are no reason to interfere in the matters - the appeals are dismissed.
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2024 (2) TMI 99
Refusal to amend 21 bills of entry - interpretation of statute - scope of Section 149 of the Customs Act - HELD THAT:- The text of the proviso makes it clear that amendment is permissible only on the basis of documentary evidence that was in existence at the time the goods were cleared, deposited or exported. Significantly, the provision does not record that the relevant documentary evidence should have been produced or submitted at the time of clearance of goods. In this connection, learned counsel for the petitioner also placed on record a communication dated 13.11.2020 with regard to difficulties faced by traders in the implementation of CAROTAR. The said communication recognises that importers are not required to submit Form I while filing bills of entry as per Rule 4 of CAROTAR and that Rule 5 does not prescribe that the proper officer should ask for Form I in every case where a preferential duty claim is made. The said communication is in consonance with Section 149 of the Customs Act. The finding by Deputy Commissioner has been recorded based on the misconception that the ambit of Section 149 is confined to the rectification of inadvertent and/ or bona fide errors. There is nothing in the language of Section 149 that justifies such a curtailed reading of the scope thereof. The impugned order calls for interference. As indicated earlier, the relevant question to be considered when an application for amendment is submitted is whether documentary evidence in support of the claim for exemption from BCD was in existence at the time of clearance of goods. The matter is remanded to the Deputy Commissioner for reconsideration so as to determine whether Form I in respect of bills of entry at Sl.Nos.1 8 of the table at page 2 of the impugned order and both the certificate of origin and Form I in respect of bills of entry at Sl.Nos.9 21 of the table at page 2 of the impugned order were in existence at the time of clearance of the goods under the relevant bills of entry. Petition disposed off by way of remand.
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2024 (2) TMI 98
Penalty imposed under Section 112 of the Customs Act - confiscation of goods - WPC license were forged and fabricated - Existence of mens rea or not - HELD THAT:- In the instant case, had the authorities applied Section 114AA, the penalty could have been upto five times the value of the Goods. Reference may also be held to section 125 of the Customs Act which provides for option to pay fine in lieu of confiscation and stipulates that the fine shall not exceed the market value of the goods confiscated less duty chargeable thereon. In the instant case, the value of the goods imported were 3.13 crores and the redemption fine imposed is Rs 60 Lakhs which is nearly 19% of the value of the goods and the fine imposed is Rs 15 Lakhs on each of the appellants which translates to about 4.75% (totalling to 9.5%) of the value of the goods - The redemption fine as well as penalty imposed could have been upto the value of the goods i.e. Rs. 3.13 crores, whereas in the instant case, the redemption fine imposed is about 19% and the penalty on both the appellants cumulatively amounts to about 9.5% of the value of the goods. In Akbar Badrudin Giwani [ 1990 (2) TMI 50 - SUPREME COURT] , the Supreme Court also considered the proportionality of conduct vis-a-vis the quantum of penalty. In the present case the Commissioner of Customs could have imposed redemption fine and penalty each of 100% of the value of the goods but has restricted the redemption fine to 19% and penalty to 9.5%. It is found that discretion has been judicially exercised and in fact has been exercised in favour of the appellants by not imposing a harsh or excessive penalty. The question of law is answered in favour of the authority/respondent and against the Appellants/Assessee - there being no infirmity in the impugned order warranting any interference - appeal dismissed.
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2024 (2) TMI 97
Validity of the notifications dated 13 January, 2012 and 19 January, 2017 - Refund of anti-dumping duty paid by the petitioner in relation to the imports of the petitioner - whether a belated prayer to assail the notifications in question would be maintainable? - whether under the grab of assailing such notifications, a prayer for money claim ought to be entertained? - period from 13 January, 2012 to 12 January, 2018 - demand for justice - Doctrine of Delay and Laches - cause of action to maintain a Writ Petition - Maintainability of a money claim in a Writ Petition. Maintainability for issuance of a writ of mandamus on the touchstone of demand for justice - HELD THAT:- There was no prior representation made by the petitioner to the appropriate department of Government of India, pointing out any illegality on the notifications, much less of making a refund application which in the normal course of law a prudent litigant and that too an importer would follow - In FEDERATION OF RETAIL TRADERS WELFARE ASSOCIATE AND ORS VERSUS STATE OF MAHARASHTRA AND ORS [ 2022 (2) TMI 1420 - BOMBAY HIGH COURT] , the Division Bench of this Court has observed that it seems to have become a habit in this Court to seek a high prerogative remedy of a mandamus without averring that the petitioner has made a demand for justice and the same having been denied or has even not made a demand at all, let alone explaining how the case fits in the few limited and well-known exceptions to the general rule. Doctrine of Delay and Laches - HELD THAT:- In Union of India and Others Vs. N. Murugesan and Others [ 2021 (10) TMI 1375 - SUPREME COURT] the principles of delay, laches and acquiescence were succinctly explained in which the Court observed that the principles governing delay, laches, and acquiescence are overlapping and interconnected on many occasions, however, they have their distinct characters and distinct elements. It was observed that one can say that delay is the genus to which laches and acquiescence are species. It was observed that laches might be called a genus to a species by name acquiescence. However, there may be a case where acquiescence is involved, but not laches. These principles are common law principles, and perhaps one could identify that these principles find place in various statutes which restrict the period of limitation and create non-consideration of condonation in certain circumstances. It was further observed that such principles are bound to be applied by way of practice requiring prudence of the Court than of a strict application of law. The observations of the Supreme Court on delay and laches would aid the conclusion which we intend to derive in the present proceedings so as to non-suit the petitioner applying the principles of delay and laches. Whether in view of a prospective decision of the Supreme Court, a cause of action can arise to maintain a Writ Petition? - HELD THAT:- There are no manner of doubt that such contention of the petitioner cannot deserve any acceptance to hold that merely because the Supreme Court prospectively pronouncing such decision, the petition can have any cause of action. Maintainability of a money claim in a Writ Petition - HELD THAT:- The principles of law necessarily are required to be applied from the point of view of the limitation as prescribed by law, applicable in respect of any money claim. The writ court cannot be oblivious to such basic requirement a litigant needs to fulfill in undertaking its usual scrutiny of the proceedings. It would certainly not be swayed away or blindfolded for the fact that the party invoking the writ jurisdiction of the High Court is akin to a party in position of a plaintiff in a civil suit when the prayer is of a money claim - Certainly, even assuming that the petitioner in the present case has paid the duty under any mistake (when in fact it is not so) in the present facts, the petition would not be maintainable. Petition dismissed.
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2024 (2) TMI 96
Penalty under Section 114(i) of the Customs Act, 1962 - prohibited goods or not - existence of mens rea or not - appellant exported the said goods without obtaining the export authorization from the Competent Authority - HELD THAT:- Admittedly in the present case, the appellant has exported Alprazolam tablets which fall in the schedule of psychotropic substances of NDPS Act, 1985 and is mentioned at Sr. No. 30 of the schedule of Psychotropic and the salt thereof at Sr. No. 111 of the Act for which the export authorization is required from the Competent Authority i.e. Narcotics Commissioner, Central Bureau of Narcotics, Gwalior in terms of Rule 58 of the NDPS Rules, 1985 read with Section 8 of the NDPS Act. The defence of the appellant that he was not aware of the requirement of law to obtain export authorization from the Competent Authority before exporting the said goods is not tenable in law in view of the specific provisions made in the NDPS Act with regard to export of goods falling in the schedule of psychotropic substances of NDPS Act, 1985 - the defence of the appellant that previously no objection was raised by the customs authorities and he has been exporting the said goods for the last 7-8 years is not a proper defence to justify the export of the impugned goods without proper export authorization. The goods were liable for confiscation as per Section 113(d) of the Customs Act, 1962 and penalty has been rightly proposed under Section 114(i) of the Customs Act and no limitation of 5 years has been prescribed under both the sections - under Section 114(i) of the Customs Act under which penalty has been imposed in this case, does not require intend to be proved and the only condition that has to be satisfied is that the goods should be liable for confiscation which is clearly satisfied in the present case. There are no infirmity in the impugned order - penalty reduced to the extent of Rs. 50,000/- - appeal allowed in part.
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Corporate Laws
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2024 (2) TMI 95
Seeking to restore the name of the Company in the Register of the Respondent / Registrar of Companies (RoC), Chennai - Failure to file returns - seeking a direction to be allowed to file the remaining Financial Returns without being saddled with additional Fees and also to be allowed to Scan and Upload all the physically filed Returns of the Company till 2017 - HELD THAT:- The CODS Scheme 2018 is meant for providing an opportunity for the disqualified Director who has defaulted by not filing the Annual Return or Financial Statement for a continuous period of three years. Therefore, this Tribunal is of the considered view the CODS Scheme 2018 is not applicable to the facts of this case, where due to the non-filing of Returns, the Company was `Struck Off from the Register of RoC. It is also interesting to note that the Hon ble Madras High Court Order dated 26.03.2018, relied upon by the Learned Company Secretary is only an Interim Order whereunder, the Hon ble Madras High Court has directed the matter to be posted after a period of 8 weeks. There are force in the contention of the Learned Counsel for the Respondent that in AMALRAJ BARNABAS VERSUS UNION OF INDIA, REPRESENTED BY ITS MINISTRY OF CORPORATE AFFAIRS, NEW DELHI; THE REGISTRAR OF COMPANIES, CHENNAI [ 2019 (11) TMI 1813 - MADRAS HIGH COURT] , it is held by the Hon ble High Court, that a Director can be appointed in any other Company without hindrance, once the CODS Scheme has been complied with and therefore the direction given by the Hon ble High Court in the Section 164 (2) (a) is distinctly different from any Notice / Direction issued under Section 248 of the Companies Act, 2013. Having regard to the nature of the business of the Appellant Company which provides Mental Healthcare Services to the Members of the Society apart from the fact that a bare perusal of the Financial Statements shows that the Company has Creditors and Loans and was in the process of setting up a Hospital, this Tribunal is of the considered view that the ratio of the Three Judge Bench Judgment in Shailendra Bafna Versus The Registrar of Companies, Bilaspur Chhattisgarh [ 2022 (12) TMI 919 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ] can be made applicable to the facts of this case. This Appeal is Allowed.
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Insolvency & Bankruptcy
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2024 (2) TMI 94
Rejection of Resolution Plan - Liquidation ordered - Application under Section 66 of IBC - reliability of Forensic Audit Report, an independent expert agency - ineligibility of the Appellants under Section 29 (A) (g) of the Code - It was held by NCLAT that the persons who are not covered under clause 29 A(g), will remain eligible to submit resolution plans under clause (c) of Section 29A, else will become ineligible as in the present Appeal - HELD THAT:- There are no reason to interfere with the order of the National Company Law Appellate Tribunal. The appeals are accordingly dismissed.
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2024 (2) TMI 93
CIRP - Unsuccessful resolution applicant - Locus standi to challenge the plan after its approval - it was held by NCLAT that The Appellant is not a stakeholder within the ambit of Section 31(1) of the Code qua the Corporate Debtor after having been unsuccessful as a resolution applicant and has no locus standi to file the present appeal - HELD THAT:- There are no reason to interfere with the impugned judgement passed by the National Company Law Appellate Tribunal, Chennai Bench. The Civil Appeal is accordingly dismissed.
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2024 (2) TMI 92
Rejection of the Resolution Plan submitted by Respondent No. 3 - HELD THAT:- The Approval of the Resolution Plan by the CoC is the commercial wisdom of the CoC challenge to which approval can be on limited ground when it is shown that Resolution Plan is not in compliance with Section 30(2) of the Code. No ground has been made out in the Appeal to show that Resolution Plan is in non-compliance of Section 30(2) of the Code. Further, this Tribunal in AJR INFRA AND TOLLING LTD. (FORMERLY GAMMON INFRASTRUCTURE PROJECTS LTD.) VERSUS SUTANU SINHA; COMMITTEE OF CREDITORS PATNA HIGHWAY PROJECTS LTD. ; SILVER POINT LUXEMBOURG PLATFORM S.A.R.L. [ 2023 (5) TMI 1291 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI] has held that the plan is in compliance of the all mandatory requirements and plan has already been upheld. Thus, no grounds have been made out to interfere with the Order impugned passed by the Adjudicating Authority - appeal dismissed.
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2024 (2) TMI 91
Approval of Resolution Plan - non-allocation of any marks on equity allotment to the Financial Creditors to the Appellant with regard to which IA No. 413 of 2023 was filed before the Adjudicating Authority - mis-calculation of the NPV of the Respondent No.2 which according to the Appellant is not accordance with the evaluation matrix. Non-allocation of any marks on equity allotment to the Financial Creditors to the Appellant with regard to which IA No. 413 of 2023 was filed before the Adjudicating Authority - HELD THAT:- As per the Process Document and terms and conditions, Appellant was not entitled to change its financial proposal, hence, Clause 2 as extracted above included in the final Resolution Plan on 18.01.2023 could not help any allocation or marks to the Appellant. Further, in Clause 2 as added on 18.01.2023 provided for option to elect the fresh equity allotment by the CoC. CoC never opted to accept equity allotment as offered by the Appellant. When equity allotment was never accepted there was no question of giving any marks to the Appellant on equity allotment. Thus, allocation of no marks in the equity allotment was as per the Process Document and evaluation matrix and the Adjudicating Authority did not commit any error in rejecting IA No.413 of 2023. Further, value of the equity offered by the Appellant is Rs.200 Crores which does not meet the minimum INR 250 Crores threshold as prescribed in the evaluation matrix - no error was committed in not allocating any marks to the Appellant on equity allotment and the first submission raised by the Appellant has no merit. Mis-calculation of the NPV of the Respondent No.2 which according to the Appellant is not accordance with the evaluation matrix - HELD THAT:- The determination of NPV of the Respondent No.2 as per final Resolution Plan as done by the Consolidated CoC and its advisors, thus, has to be treated as final and cannot be allowed to be challenged by any other Resolution Applicants. Present is a case where Appellant is challenging the determination of NPV by CoC and its Process Advisors contrary to the aforesaid Clause 2(ii) which is impermissible. The evaluation matrix and Process Document are documents which have been issued by the CoC and the CoC is the best judge to interpret its document and apply it for evaluation of NPV of the Resolution Applicants. The Hon ble Supreme Court in Silppi Constructions vs. Union of India [ 2019 (6) TMI 1449 - SUPREME COURT] held that the author of a document is a best judge as to how the document has to be interpreted. Thus, commercial decision of the CoC while approving the plan to take decision whether to approve the plan of Resolution Applicant has highest NPV or not. The above clause of the Process Document also clearly indicate that the commercial wisdom of the CoC has been given paramount importance and whether the Applicant has highest NPV or not is not a deciding factor. The law laid down by the Hon ble Supreme Court is well settled that the business decision of the CoC is not to be interfered with by the Adjudicating Authority or this Tribunal unless it is shown that there is violation of Section 30(2) of the Code. Present is not a case where there is any submission that the Resolution Plan does not comply with Section 30(2). What is challenged by the Appellant is the allocation of marks on the basis of evaluation matrix to the Resolution Applicant - the CoC has considered the Resolution Plan in accordance with the evaluation matrix and there were no error in determination of the NPV of the Respondent No.2. Further, the Appellant was not entitled for any marks on equity allotment to the Financial Creditors which mark was rightly not given to the Appellant in the evaluation matrix. There are no error in the order of the Adjudicating Authority rejecting IA No.413 of 2023 and IA No.557 of 2023. Approval of the Resolution Plan by the Adjudicating Authority is in commercial wisdom of the CoC. No grounds have been made out to interfere with the order of the Adjudicating Authority approving the Resolution Plan. Appeal dismissed.
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PMLA
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2024 (2) TMI 90
Charge of criminal misconduct under the Prevention of Corruption Act, 1988 - illegal gratification demanded by and paid to senior Income Tax Officers - Framing of charges - HELD THAT:- The Supreme Court in ASIM SHARIFF VERSUS NATIONAL INVESTIGATION AGENCY [ 2019 (7) TMI 1546 - SUPREME COURT] expressed that the trial court is not expected or supposed to hold a mini trial for the purpose of marshalling the evidence on record. The Supreme Court in STATE VERSUS M.R. HIREMATH [ 2019 (5) TMI 1986 - SUPREME COURT] held that it is a settled principle of law that at the stage of considering an application for discharge the court must proceed on the assumption that the material which has been brought on the record by the prosecution is true and evaluate the material in order to determine whether the facts emerging from the material, taken on its face value, disclose the existence of the ingredients necessary to constitute the offence. The Supreme Court in NEERAJ DUTTA VERSUS STATE (GOVT. OF N.C.T. OF DELHI) [ 2022 (12) TMI 1490 - SUPREME COURT] also referred by the Special Public Prosecutor held that a person could be convicted based on circumstantial evidence for the crime of demanding a bribe or illegal gratification under the PCA, 1988. In the present case the material collected during the investigation by the respondent/CBI is not sufficient to frame the charge against the petitioner. Accordingly, the present petition is allowed. The impugned order is not legally sustainable. The impugned order dated 12.09.2019 whereby the petitioner was charged for the offences punishable under section 120B IPC read with sections 7 and 13 (1) (d) of PC Act and for the substantive offences under sections 7 and 13(1)(d) punishable under section 13 (2) of PC Act, 1988 is set aside. The petitioner stands discharged for the offences for which he was discharged. Petition allowed.
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2024 (2) TMI 89
Seeking grant of regular bail - bail sought on medical grounds - Money Laundering - proceeds of crime - acquisition of three immovable properties by the petitioner - HELD THAT:- This Court is not persuaded to consider the prayer for bail on the Medical grounds for two reasons: Firstly, the learned Senior Counsel for the Petitioner did not press this point at the time of arguments though the same has been averred in some detail in the application and briefly in the written submissions filed by the petitioner; and secondly, the PMLA does not provide for Bail, as a matter of right, solely on health grounds. As such, the prayer for Bail on medical grounds is not being considered. In absence of any cogent material that the petitioner despite knowledge that a forged sale deed is involved in the claim supporting the title of the property situated at Chesire Home Road had purchased the same as a part of a larger conspiracy to launder proceeds of crime and that the petitioner had no role in the creation of the false document, this Court is satisfied that there are reasons to believe that the petitioner is not guilty of an offence punishable under the PMLA. It needs to be iterated that materials on record do not establish, even prima facie, that the petitioner had the intention to commit an offence punishable under the PMLA. Likewise in view of the fact that with respect to lands situated at Mouza Pugru and Siram no scheduled offence has been reportedly committed and the criminal law has not been set in motion, in view of the judgment of the Supreme Court of India in Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT] no offence punishable under section 4 PMLA can be said to have to committed by the petitioner. Viewed thus, it can be held without any hesitance that the allegations qua the land situated at Pugru and Siram prima facie do not make out an offence of money laundering and thus this Court is satisfied that there are reasons to believe that the petitioner is not guilty of an offence punishable under the PMLA. The petitioner is in custody from 31.07.2023. The trial is yet to commence. There are 34 witnesses and more than 6000 of documentary evidence. The scheduled offence in respect of Chesire Home Road property is still at the stage of investigation; whereas in respect of the other two properties no FIR / Complaint alleging commission of schedule offence has been registered till date. Prolonged detention will not serve any purpose. No material has been brought to the attention of this Court that the petitioner will hamper the trial in any manner and why his custody is important for the disposal of the trial. Another aspect which cannot be lost sight of is that the prosecution pertains to sale and purchase of a piece of land measuring one acre and the accusations do not pertain to wrong aimed to harm the public at large or defraud the government exchequer. The petitioner is directed to be released on bail subject to conditions imposed - bail application allowed.
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Service Tax
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2024 (2) TMI 88
CENVAT Credit - telecast fees charged by the TV channels for telecasting them - payment of Service Tax by the appellant for telecasting their own programmes/serials - input services or not - programmes/serials produced by them are exempted from payment of Service Tax or not - HELD THAT:- The dispute involved in these appeals on the issue of eligibility of CENVAT Credit is resolved and it is no more res--integra as Tribunal Chennai in RADAAN MEDIA WORKS (I) LTD. VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI [ 2018 (2) TMI 331 - CESTAT CHENNAI] has held the appellant is not liable to discharge service tax under the category of programme producing service. The contention of the department that programmes are telecast after production of the serials etc. is flimsy and not supported by any legal basis. From the above, we conclude that the disallowance of input service credit is unjustified and requires to be set aside. The appeals are allowed.
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2024 (2) TMI 87
Levy of Service Tax - Renting of Immovable Property Service or not - whether the demand under renting of immovable property service as confirmed in the impugned Order-in-Appeal is proper? - HELD THAT:- On going through the earlier order of the co-ordinate Bench in the appellant s own case M/S. PENINSULA HOTELS (P) LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, TIRUNELVELI [ 2023 (6) TMI 414 - CESTAT CHENNAI] relied upon by the Ld. Advocate wherein the Bench had followed an earlier order of the Chennai Bench in the case of GRAND ROYALE ENTERPRISES LTD. VERSUS COMMISSIONER OF SERVICE TAX-I CHENNAI [ 2018 (10) TMI 656 - CESTAT CHENNAI] wherein it was held that the transaction between the licencee and the licensor therein was not one of renting of immovable property but a business transaction between the two since the consideration was not like a regular rent but depended on the annual performance and the profits generated. There is no change in the facts and circumstances of the case on hand and the one decided by the co-ordinate Bench for earlier periods and hence, the decision arrived at in the earlier order squarely covers the issue in the case on hand as well - the impugned order and the demands sustained under renting of immovable property service against the appellant cannot sustain. Appeal allowed.
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2024 (2) TMI 86
Reversal of CENVAT credit attributed to common input services used in taxable and exempted services - Applicability of Rule 6(3) of the CENVAT Credit Rules, 2004 - levy of interest and penalty - HELD THAT:- It is a fact on record that the appellant has rendered works contract service to Chennai Airport which are specifically excluded from the levy of service tax as provided under clause (zzzza) of Section 65(105) of the Finance Act, 1994. The appellant tried to make a distinction between exempted services and services which are excluded from the payment of service tax and argued that the provisions of Rule 6(3) of CENVAT Credit Rules, 2004 are not applicable in the present case on hand. From the definition of exempted services as defined under Rule 2(e) of CENVAT Credit Rules, 2004, it is very clear that exempted services would also include services on which no service tax is leviable under the Act. Since no service tax is leviable on the works contract service rendered by the appellant to Chennai Airport project, these services have been rightly considered as exempted services by the authorities below. Thus, the demand has been rightly confirmed in the impugned order. Accordingly, the demand of Rs.42,81,673/- being equal to 6% of the value of the exempted services confirmed in the impugned order along with interest is upheld. Penalty imposed under Rule 15 of the CENVAT Credit Rules, 2004 r/w section 78 of the Finance Act, 1994 - HELD THAT:- The appellant has already paid an amount of Rs.42,81,673/- on 28.2.2013. We find that there is no evidence brought on record to establish suppression of facts with an intention to evade payment of the tax. Accordingly, this is a fit case for invocation of provisions of section 80 of the Finance Act, 1994 to waive the penalty imposed. Appeal disposed off.
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2024 (2) TMI 85
Invocation of extended period of limitation - suppression of facts or not - classification of services - Business Support Service or not - catering commission from caterers. Invocation of Extended period of Limitation - HELD THAT:- Hon ble Apex Court in the matter of M/S CONTINENTAL FOUNDATION JOINT VENTURE SHOLDING, NATHPA HP VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I [ 2007 (8) TMI 11 - SUPREME COURT] held that suppression means failure to disclose full information with intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression - in the present case, in response to summons dated on 21.06.2006, appellant has disclosed details of transaction and after the audit for the earlier period, no show-cause notice was issued. Thereafter, based on third audit report pertaining to same transactions, show-cause notice was issued on 20.10.2009 for the period 2006-07 and hence not sustainable in law. Classification of service - HELD THAT:- It is an admitted fact that for the entire amount collected from the members, service tax is paid by both the caterers on the gross amount including the amount deducted by Appellant. Though the transactions carried out by the appellant with M/s Sreenivasa Caterers and M/s Swadeshi Caterers are very similar in nature, first Appellate authority partly allowed the appeal with respect to the service rendered by M/s Sreenivasa Caterers. Further as per the law laid down by Hon ble Apex Court in the matter of STATE OF WEST BENGAL AND OTHERS VERSUS CALCUTTA CLUB LIMITED [ 2016 (6) TMI 476 - SUPREME COURT] and in appellant s own case M/S. KARNATAKA GOLF ASSOCIATION VERSUS THE COMMISSIONER OF SERVICE TAX BANGALORE [ 2023 (6) TMI 1326 - CESTAT BANGALORE] , benefit of small-scale exemption under Notification No. 6/2005 dated 01.03.2005 could have been extended by the Department in respect of the value of taxable services, if any and the appellant would be entitled to cum tax value benefit in terms of Section 67 of the Finance Act, 1994, also. The confirmation of demand of service tax with interest and imposition of penalty are not sustainable. Hence, the Appeal is allowed.
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2024 (2) TMI 84
Levy of Service Tax - Business Auxiliary Service - Technical Inspection and Certification Service - failure to discharge the Service Tax liability - Service Tax registration not taken - non-filing of Service Tax returns - HELD THAT:- It is brought out from evidence that garments are sold by the appellant to M/s. Bon Prix, Germany. M/s. JPS Trading, Dubai has played a role of middleman in conducting quality check through M/s. Fashion Force in India. According to the department, it is an agent of M/s. JPS Trading, Dubai. However, there is no payment made by the appellant to M/s. Fashion Force. It is not understood how there would be a service rendered by M/s. JPS Trading Company to the appellant so as to be taxable under reverse charge mechanism. Even if there was any service rendered in regard to quality checking, the demand ought to have been raised against M/s. Fashion Force, who is the service provider for quality checking. If the department is of the view that Fashion Force, Tirupur is the branch office of JPS Trading, Dubai then it would be M/s. Fashion Force, Tirupur who is liable to collect and pay service tax. It cannot be said that the deductions made in the invoices raised in the name of M/s. Bon Prix, Germany is a payment made to Fashion Force, Tirupur. For these reasons, we find that the demand raised under BAS , Technical Inspection and Certification Service is without any factual or legal basis. M/s. JPS Trading, Dubai through their agent or their own office in the name of M/s. Fashion Force is carrying out quality check of the garments being exported. M/s. JPS Trading is rendering the service of a buying agent for M/s. Bon Prix, Germany. The service provider and service receiver are thus located in a non--taxable territory. There is neither any written or oral agreement between the Appellant and M/s. JPS Trading, Dubai. When M/s. JPS Trading, Dubai is a buying agent, he cannot be termed as a commission agent for the Appellant promoting export of garments. Reference made to the decision in the case of AQUAMARINE EXPORTS VERSUS C.C.E. S.T. -SURAT-I [ 2022 (2) TMI 361 - CESTAT AHMEDABAD] wherein it was held that there is no commission agent exist who provided the service for export trading of the goods exported by the appellant. When no service provider is in existence it cannot be said that the appellant have received the commission agent service. Secondly, it is also fact that the appellant have not paid the commission to any person in the foreign country. Therefore, in absence of any consideration paid for the alleged commission agent services no Service Tax can be demanded. Involving different exporters where M/s. JPS Trading, Dubai have procured the goods for M/s. Bon Prix, Germany in the cases of M/S. VEERA CREATIONS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, COIMBATORE [ 2024 (1) TMI 525 - CESTAT CHENNAI] and M/S. HARINI COLOURS VERSUS THE COMMISSIONER OF GST CENTRAL EXCISE, COIMBATORE [ 2024 (1) TMI 526 - CESTAT CHENNAI] , this Tribunal has already set aside the demands and penalties imposed involving identical facts. The impugned order is set aside - appeal allowed.
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2024 (2) TMI 83
Levy of service tax - banking and other financial services - amount deducted by the foreign banks towards banking charges - HELD THAT:- This Bench of the Tribunal in the case of M/S. KADRI MILLS (CBE) LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, SALEM [ 2023 (8) TMI 1149 - CESTAT CHENNAI] , relied upon by the Ld. Advocate, has, while analysing an identical issue, held Section 65(105)(zm) of the Finance Act, 1994 falls under Rule 3(iii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. To attract this provision, services must be received in India. In the instant case, no services are received in India. Therefore, it is not a taxable service. In view of the above decision of this Bench in M/s. Kadri Mills (CBE) Ltd., there are no merit in the demand raised in the case on hand, for which reason the impugned order deserves to be set aside. Appeal allowed.
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2024 (2) TMI 82
Levy of penalty u/s 78 of FA - suppression of facts - requirement to issue SCN when the amount of service tax along with interest is paid up - HELD THAT:- On perusal of show cause notice it is seen that notice has been issued pursuant to audit verification. It is also mentioned in the show cause notice that appellant discharged the service tax along with interest in November 2012. As per sub-section (3) of Section 73 of Finance Act, 1994 no show cause notice shall be issued when the amount of service tax along with interest is paid up as ascertained by the officer or assessee. In the present case, after payment of service tax and interest by the appellant the show cause notice has been issued alleging suppression of facts. On perusal of records, it is found that appellant has reflected all the transactions in their accounts, balance sheets and other financial documents. So also the show cause notice is based only upon the audit verification. For the subsequent period, the Hon ble Gujarat High Court in COMMISSIONER, CENTRAL GST AND CENTRAL EXCISE VERSUS TIRUPATI SARJAN LIMITED [ 2018 (11) TMI 423 - GUJARAT HIGH COURT] has upheld the decision of the Tribunal wherein the penalty was set-aside observing that there is no suppression of facts. It is found that no evidence adduced by the department to substantiate the allegation of suppression of facts with intention to evade payment of service tax on the part of the appellant for the disputed period. The impugned order is modified by setting aside the penalties imposed without disturbing the confirmation and appropriation of service tax and interest - Appeal allowed.
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2024 (2) TMI 81
Seeking consideration of additional grounds - classification of the services - works contract service or dredging service? - HELD THAT:- The learned adjudicating authority has not addressed to the submissions made by the appellants, which were to the effect that the service tax liability should appropriately be confirmed under the works contract service and not dredging service and service tax liability, if any, should be recovered or computed on the basis of the work executed by the subcontractor, who had actually executed the assigned task. Since those vital aspects have not been dealt with by the adjudicating authority, the matter arising out of the present impugned orders should go back to the original authority for a fresh fact finding on the issues, especially raised by the appellants, at this juncture. Therefore, by setting aside the impugned orders, the matter arising out of the present dispute is remanded back to the original authority for a fresh fact finding on all the issues involved - all the appeals filed by the assessee-appellants and the Revenue are allowed by way of remand.
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2024 (2) TMI 80
Refund claim - rejection mainly on the ground that while branches filed refund claim the service tax was paid by their head office - HELD THAT:- Taking note of the letter of the revenue whereby revenue has indicated that similar appeal filed by the revenue has been dismissed by this Tribunal in COMMISSIONER, CGST CENTRAL EXCISE, LUCKNOW VERSUS M/S U.P. PROJECTS CORPORATION LTD. [ 2019 (9) TMI 1395 - CESTAT ALLAHABAD] and the fact that this order has been accepted by the revenue authorities, we do not find any merits in these three appeals. All three appeals are dismissed accordingly.
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Central Excise
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2024 (2) TMI 79
Maintainability of SLP - Recovery u/s 11D of amount collected by the assessee in the name of duty of excise - retrospective effect - Cigarettes - Non-compliance of conditions of pre-depsoit as per interim order - HELD THAT:- For non-compliance of the order in GTC INDUSTRIES LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, VADODARA [ 2017 (5) TMI 1818 - SC ORDER] , the Special Leave Petition stands dismissed.
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2024 (2) TMI 78
Maintainability of appeal - Monetary limit involved in the appeal - HELD THAT:- The office report indicates that the tax effect is of Rs. 60,35,409/-. Hence, the present petitions not entertained only on that ground. The Special Leave Petitions are accordingly dismissed.
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2024 (2) TMI 77
Recovery of dues - petitioner has contended that infact after such long lapse of time, having not succeeded in the revision, the recovery as intended by the show cause notice itself had become infructuous - HELD THAT:- There are substance in the contention as urged on behalf of the petitioner that the show cause notice was itself in the nature of a protective show cause notice and more particularly, considering the grounds as set out in the show cause notice in paragraphs 7 and 8. Certainly there was no cause for the department to proceed to adjudicate the show cause notice. The contention of the petitioner is quite correct that the show cause notice has become infructuous in view of the order passed by the Revisionary Authority. Petition allowed.
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2024 (2) TMI 76
Valuation - Whether the appellant M/s. Tescom is a job worker of M/s. Roca or whether the transaction is on principal to principal basis? - Department entertained the view that the goods ought to have been valued as per Rule 10A of the Central Excise Valuation (Determination of Price of the Excisable Goods) Rules, 2000, under Section 4(1)(b) of the Central Excise Act, 1944 - HELD THAT:- The Tribunal in the case of M/S. INOVA INDIA, M/S. ROCA BATHROOM PRODUCTS PRIVATE LIMITED, (FORMERLY M/S. PARRYWARE ROCA (P) LTD. ) VERSUS THE COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II COMMISSIONERATE [ 2020 (3) TMI 308 - CESTAT CHENNAI] had analysed the very same issue and set aside the duty demand, interest and penalties imposed. The facts and issues being identical, by judicial discipline, the decision rendered in the appellant s own case is followed and the duty demand or penalties imposed on M/s. Texcom, cannot be sustained and require to be set aside. So also, the penalties imposed on M/s. Roca cannot be sustained and requires to be set aside. The impugned orders are set aside. The appeals are allowed.
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2024 (2) TMI 75
Classification of goods - ball point pen ink - clandestine removal. Classification of ball point pen ink - HELD THAT:- Hon ble Supreme Court of India has held that when the entries in the HSN and the said Tariff are not aligned, reliance cannot be placed upon HSN for the purpose of classification of goods under the said Tariff, in the case of Camlin Ltd. [ 2008 (9) TMI 1 - SUPREME COURT] - It was held that it is settled law that when the entries in the HSN and the said Tariff are not aligned, reliance cannot be placed upon HSN for the purpose of classification of goods under the said Tariff. One of the factors on which the Tribunal based its conclusion is the entries in the HSN. The said conclusion in the Order of the Tribunal is, therefore, vitiated and, accordingly, set aside - Once it is established that ball point pen ink attracts nil rate of duty, the confirmation of demand of clearance without payment on ball point pen ink and allegation of clearance of ball point pen ink by resorting to undervaluation does not sustain. Clandestine removal - HELD THAT:- The show cause notice that Revenue has compared total goods manufactured as reflected in balance sheet to the clearances effected on payment of duty by Thane unit and Revenue did not take into consideration goods cleared by Goa unit of the appellant whereas the balance sheet is common for both the units. Further, it is found that no investigation was carried out in respect of the balance amount on which duty is demanded such as dispatch particulars from the regular transporters, realization of sale proceeds and details from the regular dealers and buyers about receipt of finished goods. Therefore, relying on the ruling by Hon ble Allahabad High Court in the case of Continental Cement Company [ 2014 (9) TMI 243 - ALLAHABAD HIGH COURT] , it is held that the allegations of clandestine removal are not established - Once it is established that there was no requirement of payment of duty on ball point pen ink and there was no clandestine removal, the question of imposition of penalty on the appellant and the other appellants does not arise. The impugned order set aside - appeal allowed.
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2024 (2) TMI 74
Wrongful availment of CENVAT Credit - Fake documents without actual receipts of the inputs against such documents - credit availed only on the strength of Bills of Entry without actual receipts of imported inputs - demand on the basis of the statements of transporters and other persons whose cross-examination have not been allowed - violation of principles of natural justice - HELD THAT:- It is found that the request for cross-examination of the persons whose statements have been relied upon has been turned down on the ground that in the facts and circumstances of the case there is no need to give an opportunity to cross-examine the persons and what have been stated by the transporters and panch witnesses are their voluntary statements which have never been retracted by them. In this regard, it is found that the reasons assigned by the authorities below to reject cross-examination is clearly unsustainable in legal parlance for the obvious reason that no adverse inference can be drawn against assessee where statements are to be relied by the Revenue without ascertaining the veracity in the absence of cross-examination. Therefore the said statements cannot be relied upon as admissible evidence in terms of the provisions of Section 9D of the Act. Reliance is placed on the ruling of the Hon ble Punjab Haryana High Court in the case of M/S JINDAL DRUGS PVT. LTD. AND ANOTHER VERSUS UNION OF INDIA AND ANOTHER [ 2016 (6) TMI 956 - PUNJAB HARYANA HIGH COURT] wherein the Hon ble High Court laid down the detailed procedure, inter alia, providing for cross-examination of the witness of the Revenue by the Adjudicating Authority and thereafter, if the Adjudicating Authority is satisfied that the statement of the witness is admissible in evidence than the Adjudicating Authority is obligated to offer such witnesses for cross-examination by the other side/assessee. Such view has also been affirmed by the Hon ble Supreme Court in the case of ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [ 2015 (10) TMI 442 - SUPREME COURT] . The conditions for allowing the Cenvat credit on the inputs used for manufacturing excisable goods are stipulated in Cenvat Credit Rules 2004 and similarly the documents on which the Cenvat Credit be allowed has also been well defined in Rule 9 of Cenvat Credit Rules 2004. What is required to be established, only receipt of the inputs in the factory under cover of valid duty-paying documents and utilization of the goods in the manufacture of the final products cleared on payment of duty. On perusal of the records and facts of the case it is found that in the present case itself it is admitted facts that the Appellant shown the receipts of duty paid goods and use of the goods in their factory. Therefore there are no reason for disallowance of Cenvat credit in this matter specifically when the supplier of the goods/raw material, nowhere admitted that, they have not supplied the goods to Appellant and any evidence in relation to diversion of disputed imported raw materials. When the inputs are used in the manufacture of dutiable final products, the benefit of Cenvat credit in respect of such input cannot be denied. There is no other evidences on record to show that the Appellant either did not receive the raw materials, on which they have taken the credit or after receiving the same and availing the credit, the same stand removed by them in the open market. Further in the entire case there is no admission in the statements of Appellant s directors or employees to the effect that the raw materials were not actually received by them. There is also no admission in the said statements to the effect that raw materials stand diverted in the open market. It is also found that it is an undisputed fact that all the purchases were duly recorded in the statutory books of the Appellant and the goods were also found to be entered in statutory records of the Appellant. There is no evidence which can show that the records maintained by the Appellant are not correct. Only on the basis of statements of Transports and their private records, the huge credit is sought to be disallowed whereas the statements are in isolation with no corroboration - in the present matter disallowance of credit to the Appellant is not sustainable. The demand of Cenvat credit is not sustainable. Accordingly, impugned order is set aside - Appeal allowed.
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2024 (2) TMI 73
Cash Refund - Non-fulfilment of export obligations - requirement to pay the Customs Duty foregone at the time of initial import - rejection of refund on the ground that there is no provision either under Cenvat Credit Rules 2004 or under Sec 142(3) of CGST Act 2017 to grant such cash refunds - HELD THAT:- The Appellant filed documentary evidence towards payment of Customs Duty foregone in respect of several Bills of entry. The learned AR submits that the Appellant has paid the amounts under a common head of Customs Duty without appropriate bifurcation of Basic Customs Duty, CVD+SAD/IGST while making the payment. Therefore, the quantified refund claim of Rs.34,46,465/- by the Appellant is not verifiable and it is not known whether the figure given by the Appellant was correct or not. An identical issue had come up before this Bench on several occasions recently. Relying on the Larger Bench decision in the case of M/S. BOSCH ELECTRICAL DRIVE INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL TAX, CHENNAI [ 2023 (12) TMI 1145 - CESTAT CHENNAI-LB] and other Tribunal decisions in the case of M/S MITHILA DRUGS PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS AND SERVICE TAX, UDAIPUR (RAJASTHAN) [ 2022 (3) TMI 58 - CESTAT NEW DELHI] , M/S CLARIANT CHEMICALS INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, RAIGAD [ 2022 (10) TMI 796 - CESTAT MUMBAI] , M/S. ITCO INDUSTRIES LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, SALEM [ 2022 (6) TMI 1040 - CESTAT CHENNAI] FLEXI CAPS AND POLYMERS PVT LTD VERSUS COMMISSIONER, CGST CENTRAL EXCISE-INDORE [ 2021 (9) TMI 917 - CESTAT NEW DELHI] , this Bench has held in the case of SRI CHAKRA POLY PLAST INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL TAX MEDCHAL GST [ 2024 (1) TMI 927 - CESTAT HYDERABAD] that Appellant would be eligible to claim the cash refund for the CVD+SAD/IGST paid. Following these decisions, the Appeal is allowed and it is held that the Appellant is eligible for cash refund of the amounts paid under CVD+SAD/IGST. There are force in the submissions made by the learned AR about the quantification of the refund amount. The Appellant is directed to produce all the documentary evidence with clear statement for the amount paid under the heading of Basic Customs Duty, CVD, SAD/IGST and interest and justify his total quantified refund claim amount of Rs.34,46,465.90/-. The Adjudicating Authority, after necessary verification, shall grant refund only for the CVD+SAD/IGST portion of the Customs Duty paid by the Appellant. Appeal allowed.
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2024 (2) TMI 72
Levy of penalty - Bonafide Belief - Commissioner (Appeals) deleted the penalty - Determination of the nature of the goods manufactured at the site of construction - The dispute was that, whether they are concrete mix or ready made concrete mix? - HELD THAT:- This is purely a question of fact. The Circular of 23.05.1997 also clarified so, and extended the benefit of exemption to the concrete mix, produced at site of construction. Hon ble Supreme Court was concerned with the same issue in the case M/S LARSEN TOUBRO LTD. ANOTHER, ECC CONSTRUCTION GROUP VERSUS COMMISSIONER OF CENTRAL EXCISE, HYDERABAD [ 2015 (10) TMI 612 - SUPREME COURT] and has settled the issue in the favour of revenue. However if the issue was so clear, the revenue authorities should have proceeded against the respondent long back by demanding the duty due within the normal period of limitation. Having not done so they could not have invoked extended period of limitation to demand the duty by placing the reliance on the circular clarifying on the issue which has been upheld by the Hon ble Apex Court in the said decision. It is a settled principle in law that in such a case an extended period of limitation will not be applicable. There are no merits in this appeal - the appeal filed by the Revenue is dismissed.
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CST, VAT & Sales Tax
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2024 (2) TMI 71
Granting benefit of ITC as claimed and in deleting the amount of demand raised by the assessing authority - case of the State is that the ITC benefit is available to the assessee only with regard to goods that has been purchased in the State of Uttar Pradesh and which are the goods on which VAT is paid - HELD THAT:- The Tribunal has examined the provisions of the Act and come to a finding that the assessee claimed ITC of Rs. 1,43,83,587/- in the relevant year against which tax of Rs. 13,27,46,784/- has been deposited on the sale of manufactured urea, which is many times more than the claimed ITC. Accordingly, Tribunal held that Section 13(1)(f) would not be applicable to the assessee, and accordingly, upheld the order of the Appellate Authority. Upon perusal of the documents, the finding of the Tribunal seems to be crystal clear and leaves no room for doubt. The assessee has paid far more tax than the ITC claimed, and accordingly, the rigours of Section 13(1)(f) of the Act would not be applicable to the assessee. There does not appear any need for interference in the order passed by the Tribunal. This writ petition is dismissed.
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2024 (2) TMI 70
Classification of goods - Whether the cello used by the assessee were capital goods or merely usable containers used for sale of the ink manufactured by the assessee? - HELD THAT:- Upon a plain reading of what has been written by the Tribunal, it appears that Cello is an apparatus that is fitted to the plant and machinery where the final product is stored, and once the Cello is filled up, the same is removed from the plant and machinery and it is replaced with another Cello. The fact that the Cello is directly sent to the customers for consumption would not take away from the fact that it is used as a storage device for the manufactured ink. Mere fact that the Cello is a moveable apparatus that is sent to the customers, would not take away from the fact that it is only a storage tank in the factory. This by itself makes it an essential part of the manufacturing process and would qualify it under Section 2(f)(iii) of the Act. There are no justification to intervene in the decision made by the Tribunal. As a result, both the revisions are, accordingly, dismissed.
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2024 (2) TMI 69
Condonation of delay of 239 days in preferring the instant Revision Petition - Section 5 of the Limitation Act, 1963 - HELD THAT:- It appears on a perusal of the decision of the Apex Court in Superintending Engineer/Dehar Power House Circle Bhakra Beas Management Board [ 2019 (11) TMI 6 - SUPREME COURT] that the instant revisional provisions under Section 72 of the TVAT Act are in pari materia to Section 48 of the Himachal Pradesh VAT Act, 2005 relating to revisional power of the High Court. A limitation of 90 days from the date of communication of the order for preferring a Revision before High Court was provided under Section 48 of the Act of 2005. The Himachal Pradesh VAT Act, 2005 also did not provide for a separate provision for condonation of delay. The Apex Court upon consideration of a number of decisions on the issue arrived at an opinion that in the absence of express exclusion or even implied exclusion the application of Limitation Act to such a special law cannot be denied. The Apex Court upon consideration of a number of decisions on the issue arrived at an opinion that in the absence of express exclusion or even implied exclusion the application of Limitation Act to such a special law cannot be denied. Since the ratio of the Apex Court covers the present case as well, this Court is of the opinion that though the relevant provisions under Section 72 of the Act are silent on the aspect of the condonation of delay beyond the period of 60 days prescribed therein, there is no express exclusion or implied exclusion of the application of Limitation Act. The delay condonation application is maintainable under Section 5 of the Limitation Act, 1963 - respective interlocutory applications seeking condonation of delay of 239 days in preferring the revision petitions against the common order dated 15.10.2022 passed by the Commissioner of Taxes (Revisional Authority), Government of Tripura in batch of revision petitions concerning different assessment years A.Y. 2015-16, 2016-17 2017-18 are allowed.
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Indian Laws
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2024 (2) TMI 68
Direction to formulate guidelines/scheme for grant of sanctions/approval/clearances for speedy and effective implementation of time-sensitive medical research, to secure the right to health under Article 21 of the Constitution of India, 1950 - direction directing the Respondent No. 1 to take necessary steps to give effect to clause 2.3.3 of the National Health Policy, 2017 for facilitating growth of Private Medical Research Institutions, and promotion of life-saving medical technologies for attainment of Public Health Goals - direction to formulate a framework for revival and rehabilitation of Medical Research Institutions which are in, incipient stress to secure public interest under Section 21 of the Banking Regulation Act, 1949 - direction to Respondent No. 6 to constitute a Committee to examine the irregularities in the conduct of the Corporate Insolvency Resolution Proceedings pertaining to Frontier Lifeline Private Limited initiated pursuant to the order of the Ld. National Company Law Tribunal, Chennai Bench. HELD THAT:- The Special Leave Petition, which suffered from a delay of 1615 days, was dismissed when it came up before the Court today - The narration will clearly indicate that what is now preferred as a petition, which was purportedly filed in the public interest, is, in fact, relatable to the petitioner s specific grievance in regard to proceedings of insolvency against FLPL. Petition not entertained purportedly in the public interest - petition dismissed.
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2024 (2) TMI 67
Maintainability of petition - 1st respondent company is a State under Article 12 of the Constitution of India or not - HELD THAT:- An anxious consideration given to the judgments of the Apex Court and the various High Courts on the question of how the issue whether an authority is an instrumentality of the State under Article 12 of the Constitution of India is to be determined. It is noticed that in the case of entities in different states which are similar in nature to the 1st respondent herein, cases have arisen before the respective High Courts on the question whether such bodies are instrumentality of the State within the meaning of Article 12. In the case of Asok Kumar Singh and others v. Bihar Industrial and Technical Consultancy Organisation Limited and others, the Patna High Court held that the BITCO is an instrumentality of the State, while the Bombay High Court in R.V Dnyansagar v. Maharashtra Industrial and Technical Consultancy Organisation Limited [ 2003 (2) TMI 353 - HIGH COURT OF BOMBAY] has held that the Maharashtra equivalent of the 1st respondent is not an instrumentality of the State. Though the State Government has only 3% share in the 1st respondent, it has a decisive representation in the Board by sending two directors out of twelve. Further, the policy decisions of the 1st respondent are controlled by the SIDBI which nominates 1/3rd of the Directors including the Chairman and the Managing Director. It is clear from a reading of the Articles of Association and the documents produced in the writ petition and in this writ appeal that the State and Central Governments themselves specifically consider the 1st respondent as a Central Government company. It is also discernible that the accounts of the 1st respondent are audited by the Comptroller and Auditor General of India treating it as a deemed Government company. It is recognised as an accredited Government agency for the purpose of public works in the State. The finding that the respondent company is not a State under Article 12 of the Constitution of India and that the writ petition is not maintainable is not correct position in law - the respondent company is an instrumentality of the Union of India under Article 12 of the Constitution of India and is, therefore, amenable to writ jurisdiction. The writ petition shall be placed before the learned single Judge for consideration on merits.
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