TMI Tax Updates - e-Newsletter
March 11, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

TMI Short Notes

1. Presumptive profits and gains of business of plying, hiring or leasing goods carriages: Clause 58 of the Income Tax Bill, 2025 vs. Section 44AE of the Income Tax Act, 1961

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2. Computing Profits and Gains of Profession on Presumptive Basis: Clause 58 of the Income Tax Bill, 2025 vs. Section 44ADA of the Income Tax Act, 1961

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3. Computing profits and gains of business on presumptive basis: Clause 58 of the Income Tax Bill, 2025 vs. Section 44AD of the Income-tax Act, 1961

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4. Modernizing Revenue Recognition in Construction and Service Contracts: Clause 57 of Income Tax Bill, 2025 Vs. Section 43CB of Income-tax Act, 1961

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5. Taxation of Interest Income for Financial Institutions: Clause 56 of Income Tax Bill, 2025 vs. Section 43D of the Income Tax Act, 1961

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6. Taxation of insurance businesses: Clause 55 of the Income Tax Bill, 2025 vs. Section 44 of the Income Tax Act, 1961

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7. Evolution of Tax Provisions for Trade and Professional Associations: Clause 50 of the Income Tax Bill, 2025 vs. Section 44A of the Income-tax Act, 1961

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Articles

1. An In depth Analysis of section 62 of the CGST Act 2017

   By: K Balasubramanian

2. GST Implications on Excess Royalty Collection Contractors (ERCC): A Revisit of the Supreme Court's 2024 Judgment

   By: Shivam Agrawal

3. Why Your Business Needs an Online Trademark Registration Service

   By: Ishita Ramani

4. DEBTS RECOVERY TRIBUNAL

   By: DR.MARIAPPAN GOVINDARAJAN

5. ‘Make in India Logo’

   By: YAGAY andSUN

6. Intellectual Property (IP) in India in the Era of Artificial Intelligence [IPRs Laws]

   By: YAGAY andSUN

7. Mitigation of Greenhouse Gas (GHG) Emissions: Approaches and Strategies [Environmental Laws]

   By: YAGAY andSUN

8. Intellectual Property (IP) in the Era of Artificial Intelligence: A Comprehensive Analysis

   By: YAGAY andSUN

9. Chemical Sector, and Instances of Certain Non-Compliance of Environmental Laws - Role of MOEFCC, CPCB, SPCB and Local Governing Bodies (e.g. Municipal Corporations).

   By: YAGAY andSUN

10. Adaption of New Technologies for Adherence with the Environmental Compliances for sustainable and green Chemical Sector.

   By: YAGAY andSUN

11. Circular Economy - Cradle to Cradle (but not Grave)!

   By: YAGAY andSUN

News

1. GST Deputy Commissioner jumps to death from 15th floor of his apartment building in Noida

2. Gujarat: Over 17,000 cases of GST evasion detected in last two years

3. GST evasion of Rs 1.95 lakh crore detected by CGST officers during April-January

4. Thane ACB nabs senior GST official's aide for taking Rs 15 lakh bribe on his behalf

5. Need of hour radically-simplified, less-punitive GST 2.0: Congress

6. Assam presents Rs 2.63 lakh cr budget; offers sops to youths, tea garden workers ahead of polls

7. Assam budget ‘cash-for-vote’ document, has no vision, claim oppn parties

8. Pot calling kettle black, ready to extend budget session if BJP MLAs take part in discussions: Sukhu

9. Budget: Aim is to create one crore 'Lakhpati Didis', says CM Fadnavis

10. Assam now one of best fiscally-managed states in India: Himanta

11. Sitharaman presents Manipur budget envisaging Rs 35,104 cr expenditure

12. Congress slams AAP-led MCD for cutting project funds, scheme closures

13. Budget: Gadchiroli emerging as steel hub, mining highway network to be built, says Pawar

14. Budget: 7 business centres to come up in Mumbai; city to have USD 1.5 trillion economy by 2047

15. Budget 2025-26: Maharashtra govt proposes 6 pc tax on EVs costing more than Rs 30 lakh

16. MP assembly budget session begins; Guv lists welfare schemes, Cong protests short duration

17. Arunachal deputy CM presents budget with over Rs 39,000 cr outlay for FY''26, focuses on growth

18. Completely bogus budget; promises made to people not kept: Uddhav

19. Maharashtra govt gives Rs 36,000 cr to Ladki Bahin in budget, mum on stipend hike, ups vehicle tax

20. Memorials galore in Maharashtra budget for 2025-26

21. Assam to have its own satellite, talks with ISRO on

22. Vadhvan port in Maharashtra to be operational by 2030: Ajit Pawar

23. Assam govt presents Rs 2.63 lakh crore budget for FY'26; benefits for taxpayers, tea industry

24. Delhi CM engages with students at Youth Parliament, seeks budget suggestions

25. Assam minister presents Rs 2.63 lakh crore budget for 2025-26 fiscal in assembly

26. Cong MLAs stage protest demanding longer budget session of MP assembly

27. Speaker urges parties to ensure smooth Question Hour as second leg of Budget session resumes

28. Shimla police gets 490 additional personnel to maintain law and order during Budget Session

29. Delhi CM Gupta meets R K Puram residents ahead of budget announcement

30. Himachal Assembly speaker calls for smooth run of House ahead of Budget session

31. Increase in Union Budget for tribal areas to ensure active role in building developed India: Oram

32. MP assembly's budget session to begin on Monday; Cong to hold protest over farmers' issues

33. Need to improve economic status, welfare of farming community in state: Arunachal minister

34. Gadkari asks industry not to demand tax cuts perennially as govt needs funds for welfare plans

35. IICA Inaugurates Certified ESG Professional – Impact Leader Programme (Batch-IV)

36. In mid sea operation, DRI and Indian Coast Guard intercept a vessel en-route to Maldives; seize 30 kg Hashish Oil worth ₹33 crore; three held

37. Aaditya accuses BJP govt of undermining Mumbai's economic importance

Notifications

DGFT

1. 62/2024-25 - dated 10-3-2025 - FTP

Amendment in Export Policy Condition under HSN of Schedule-II (Export Policy), ITC(HS) 2022

GST - States

2. 08/2025-State Tax - dated 25-2-2025 - Maharashtra SGST

State Tax Notification for waiver of the late fee for filing GSTR 9C.

3. 07/2025—State Tax - dated 25-2-2025 - Maharashtra SGST

Maharashtra Goods and Services Tax (Amendment) Rules, 2025.

4. 08/2025-State Tax (Rate) - dated 17-2-2025 - Maharashtra SGST

Seeks to amend Notification No. 17/2017-State Tax (Rate) dated 29th June, 2017

5. 07/2025-State Tax (Rate) - dated 17-2-2025 - Maharashtra SGST

Seeks to amend Notification No. 13/2017- State Tax (Rate) dated 29th June, 2017

6. 06/2025-State Tax (Rate) - dated 17-2-2025 - Maharashtra SGST

Seeks to amend Notification No. 12/2017- State Tax (Rate) dated 29th June, 2017

7. 04/2025-State Tax (Rate) - dated 17-2-2025 - Maharashtra SGST

Seeks to amend Notification No. 08/2018-State Tax (Rate) dated 25th January, 2018

8. 03/2025-State Tax (Rate) - dated 17-2-2025 - Maharashtra SGST

Seeks to amend Notification No. 39/2017- State Tax (Rate) dated 18th October, 2017

SEBI

9. SEBI/LAD-NRO/GN/2025/233 - dated 3-3-2025 - SEBI

Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2025

Circulars / Instructions / Orders

Customs

1. Public Notice. 17/2025 - dated 7-3-2025

Automation of Refund Application and Processing in Customs–Reg.

2. PUBLIC NOTICE No. 09/2025 - dated 1-2-2025

Streamlining the process and expediting assessment in FAG Classification of LED Chips-Reg

Highlights / Catch Notes

GST

• GST Proceedings Quashed: Section 73 Show Cause Notice Time-Barred Despite Being Within Extended Deadline

  Case-Laws - HC : The HC examined whether proceedings under Section 73 of the U.P. GST Act, 2017 were time-barred. Proceedings commenced on 02.03.2023 via show cause notice with final order passed on 06.12.2023. The Court determined that even with the extension of time limit, such an order could only have been passed until 31.12.2023. Since these facts were undisputed and clearly evident from the impugned order and records, the Court concluded that the proceedings culminating in the impugned order were time-barred. The Court found no reason to call for a counter affidavit and allowed the petition, effectively invalidating the proceedings due to their time-barred nature.
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• Goods Must Be Released When Seizure Period Expires Without Extension Notice Under Section 67(7) CGST Act

  Case-Laws - HC : The HC ruled in favor of the petitioner, ordering the release of seized goods upon deposit of the valuation amount. The court found that the respondent failed to provide notice of extension before the six-month seizure period expired, violating Section 67(7) of the CGST Act. The court rejected the respondent's claim of "sufficient cause" based on documents not in the public domain, which denied the petitioner opportunity to respond. The HC emphasized that delayed valuation despite the assessee's cooperation cannot constitute "sufficient cause" for extending seizure. The court clarified that confiscation under Section 130 cannot be equated with seizure powers under Section 67, and that affected parties must be shown "sufficient cause" with proper notice and hearing rights.
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• Taxpayer Wins Right to Transitional Input Tax Credit on Computers Used for Services Under Section 140(3) of KSGST Act

  Case-Laws - HC : The HC allowed the petition, finding the applicant entitled to transitional input tax credit under Section 140(3) of the KSGST Act for computers and laptops used in providing services. Though these items were used for rendering services and thus excluded from the definition of "capital goods" under Section 2(x) of the KVAT Act, they still qualified for transitional credit under Chapter XX of the KSGST Act. The Court determined that despite the petitioner not being registered under the existing KVAT law, they satisfied the first limb of Section 140(3), making them eligible for input tax credit on these items that were used in their service operations.
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• Title: Royalty Payment Withholding Conditional; Petitioner Given Two Months to Submit Complete Claim Under Clause 35

  Case-Laws - HC : The HC determined that the Corporation's withholding of royalty payment from the petitioner's work bill was conditional. The petitioner was granted liberty to submit a complete claim with all information requested in Annexure 'R/B' within two months. Upon receipt of the complete claim, the Corporation must consider it in accordance with law and Standard Bidding Document Clause 35. The Court clarified that the prima-facie opinion expressed in paragraph 4 of the Letter (Annexure 'R/B') should not impede fair consideration of the claim. The Corporation agreed to consider the petitioner's GST claim amount subject to submission of complete documentation. Application disposed of.
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• Appeal Dismissed: AAAR Cannot Condone Delays Beyond 30 Days Under Section 100(2) of CGST Act

  Case-Laws - AAAR : The AAAR dismissed the appeal due to late filing beyond the statutorily prescribed time limits under Section 100(2) of CGST Act, 2017. The Authority clarified that while it has discretionary power to condone delays, this power is strictly limited to an additional 30 days beyond the initial 30-day filing period. The appellant failed to demonstrate sufficient cause for the delay, with their first communication occurring on 17.10.2024, well after both the original deadline (30.08.2024) and the condonable period (29.09.2024) had expired. The AAAR emphasized that ignorance of filing procedures cannot excuse non-compliance, and the discretionary power to condone delays is not obligatory but contingent upon showing sufficient cause within statutory timeframes.
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• Printing Examination Materials for Educational Institutions Exempt from GST Under Notification 12/2017-CT(Rate)

  Case-Laws - AAR : The AAR determined that printing of examination materials for educational institutions constitutes a composite supply where printing services are the principal supply, not goods. The authority ruled that services related to both pre-examination items (hall tickets, question papers, OMR sheets, answer booklets) and post-examination items (mark sheets, certificates, grade sheets) provided to educational institutions are exempt from GST under Sr. No. 66(b)(iv) of N/N. 12/2017-CT(Rate) as amended by N/N. 02/2018-CT(Rate). Additionally, scanning and processing of examination results for educational institutions also qualifies as exempt services under the same notification. This ruling aligns with Circular No. 151/07/2021-GST which clarifies exemption status for various services provided by educational boards.
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• Fish Processing Services on Others' Raw Fish Qualify as Job Work Under Section 143 with 5% GST Rate

  Case-Laws - AAR : The AAR ruled that fish processing services performed by the applicant on raw fish owned by registered persons constitute job work under Section 143 of the CGST Act. These services are properly classified under Chapter heading 998812 (manufacturing services on physical inputs owned by others). Following Notification No. 31/2017-CT(Rate) dated October 13, 2017, which amended Notification No. 11/2017-CT(Rate), such services attract a GST rate of 5% (2.5% CGST + 2.5% SGST). Prior to this amendment, the same activity was taxable at 18%. The 5% rate applies only when the applicant processes fish owned by registered persons while adhering to all statutory procedures applicable to both principal and job worker.
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• Waste Processing Services for Chennai Corporation Qualify for GST Exemption Under Notification 12/2017

  Case-Laws - AAR : The AAR determined that services provided by the applicant for maintaining micro-compost centers and processing wet waste for Greater Chennai Corporation are classifiable under SAC Heading 9994, specifically group 99943 "Waste Treatment and Disposal services." The service does not involve door-to-door waste collection but rather waste processing and disposal. The AAR ruled that these services qualify for GST exemption under Serial No.3 of Notification 12/2017-Central Tax (Rate) as they constitute "pure services" provided to a local authority for activities entrusted to municipalities under Article 243W of the Constitution, in accordance with Solid Waste Management Rules 2016.
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• Stipend Disbursement and Item Sales at Cost Not Exempt as "Pure Agent" Services Under GST Rule 33

  Case-Laws - AAR : The AAR ruled that Logskim's stipend disbursement to trainees does not qualify as a "pure agent" service under Rule 33 of CGST Rules, as they merely act as a conduit without procuring supplies or making payments to third parties. The authority found that Logskim failed to meet key conditions of Rule 33, particularly clauses (i) and (iii). Similarly, the sale of uniforms, shoes, and insurance premiums to industry partners, even at cost without markup, is taxable since "reimbursement at actuals" alone doesn't establish pure agent status. The AAR concluded that both the stipend amounts received and passed to trainees and the sale of items to industry partners are chargeable to tax under CGST/TNGST Acts, 2017.
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• Solar Power Generation to Grid Constitutes "Supply" Under GST, but Electricity Remains Exempt with Limited ITC Availability

  Case-Laws - AAR : The AAR ruled that the applicant's generation and supply of electricity from their 10.2 MW solar power plant to TANGEDCO through grid constitutes a "supply" under GST provisions. As electricity attracts nil rate of tax under HSN 27160000 (Sl. No. 104 of N/N. 02/2017-CT(Rate)), it qualifies as an "exempt supply." While ITC on goods and services used in setting up the solar plant is eligible (subject to not claiming depreciation on the tax component under Income Tax Act), the applicant cannot avail ITC on goods and services exclusively used for the generation, supply, running, or maintenance of the solar power plant as these relate to exempt supplies under Section 17(2) and 17(3) of CGST/TNGST Act read with Rule 43(1)(a).
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Income Tax

• Tax Authority Cannot Assume International Transaction Based Solely on Excessive AMP Expenditure Without Proof of Agreement Under Section 92B

  Case-Laws - HC : The HC upheld the ITAT's decision to delete additions related to AMP expenditure incurred by the assessee for brand-building owned by an associated enterprise. The court determined that while Section 92B defines "international transaction" (expanded by Finance Act 2012's Explanation to include "use" of intangible property retroactively from April 2002), the Revenue failed to establish the existence of an actual transaction. The TPO erroneously relied solely on perceived excessive AMP expenditure and applied the Bright Line Test, which had been previously criticized in Maruti Suzuki. The deeming fiction introduced in Section 92B(2) was inapplicable due to the absence of a prior agreement and its prospective application from April 2015. The ITAT's decision required no interference.
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• Income Tax Amendment Defining "Sikkimese" Under Section 10(26AAA) Does Not Affect Constitutional Protections Under Article 371F

  Case-Laws - HC : HC rejected a challenge to the amended definition of "Sikkimese" under Explanation (v) to Section 10(26AAA) of Income Tax Act introduced by Finance Act, 2023. The Court determined that the definition applies exclusively for income tax purposes and does not impact rights and privileges of indigenous Sikkimese protected under Article 371F(k) of the Constitution. The Court relied on the April 4, 2023 Press Release clarifying the limited scope of the definition, finding no justifiable reason to entertain the writ petition challenging the amendment's constitutional validity.
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• Excise Duty Exemptions for Industrial Development Qualify as Non-Taxable Capital Receipts Under Purpose Test

  Case-Laws - HC : The HC ruled that excise duty exemptions granted to the assessee's Rudrapur Plywood and MDF Units constituted capital receipts, not revenue receipts. Applying the purpose test from Sahney Steel & Press Works Ltd., the court determined that since exemptions were granted to industrialize Uttaranchal and Himachal Pradesh and generate employment, they qualified as capital receipts. Consequently, these exemptions were not chargeable to tax under normal Income Tax provisions. The court further held that such capital receipts could not be included in the computation of book profit under Section 115JB for Minimum Alternate Tax purposes. The appeal was decided in favor of the assessee.
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• Rejection of Section 72A Tax Loss Carry-Forward Request Upheld as Company Failed to Meet Production Capacity Requirements

  Case-Laws - HC : HC dismissed the petition challenging the rejection of a request for relaxation under Rule 9C read with Section 72A regarding carry-forward of losses from amalgamated companies. The court determined that the petitioner failed to achieve the required production capacity (50%) even during the requested three-year extension period. The court emphasized that Section 72A's objective is not merely to encourage corporate restructuring but to extend benefits only where amalgamating companies' industrial undertakings are genuinely revived or continued. The petitioner's multiple requests to modify conditions-first seeking time extensions and later requesting reduced production thresholds (from 50% to 36-42%)-were found unmeritorious, as the application was filed just one day before the expiry of the four-year post-amalgamation period.
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• Intra Group Service Agreement and Advisory Services Not Taxable as Fees for Technical Services Under India-UK DTAA

  Case-Laws - AT : The ITAT ruled that receipts for services rendered under the Intra Group Service Agreement do not constitute Fees for Technical Services (FTS) under Article 13(4) of the India-UK DTAA, following previous tribunal decisions for AY 2018-19 and 2019-20. Similarly, advisory services provided to RCIPL-including identifying potential buyers, supporting presentation preparation, coordinating marketing, and advising on transaction options-did not satisfy the "make available" clause as they did not transfer technical knowledge, know-how, or skills. The Tribunal found that neither the Assessing Officer nor the DRP adequately reasoned how these services met the "make available" requirement. Consequently, both service fees were held not taxable in India.
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• Reopening Assessment Invalid: AO Failed to Apply Mind Before Issuing Notice Under Section 147/148

  Case-Laws - AT : The ITAT invalidated the reopening of assessment under section 147/148 due to the Assessing Officer's failure to independently apply his mind before issuing the notice. The AO had merely relied on information from the Directorate of Income-tax (Systems) or Investigation Wing's report from search operations on Kundu group without verifying whether the transactions were already reported by the assessee. The Tribunal noted that some transactions claimed to be unreported were actually part of the assessee's filed computation. Additionally, if the reopening was based on search and seizure operations of Kundu group, section 153C should have been invoked instead of section 147/148. The Tribunal sustained the assessee's jurisdictional challenge to the assumption of jurisdiction.
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• Penalty Under Section 271(1)(c) Cannot Apply to Income Voluntarily Disclosed During Survey and Included in Returns

  Case-Laws - AT : The ITAT ruled that penalty under section 271(1)(c) cannot be imposed on additional income voluntarily disclosed by the assessee during survey proceedings and subsequently included in tax returns. The AO relied solely on assumptions without corroborative evidence that the assessee had concealed income. The Tribunal emphasized that penalty provisions must be construed strictly and cannot be based on surmises or conjectures. Since the assessee made complete disclosure in the return of income and surrendered the amount for taxation purposes, there was no actual concealment or non-disclosure warranting penalty. Explanations 5 and 5A to section 271(1) were deemed exceptions to the general rule. Appeal decided in favor of the assessee.
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• Transfer Pricing: Five Companies Excluded as Non-Comparable for Captive Software Services, Three Retained, Two Added

  Case-Laws - AT : The ITAT partially allowed the taxpayer's appeal concerning comparable selection for transfer pricing adjustments. The Tribunal excluded Tata Elxsi Limited (significant intangibles owner), Persistent Systems Limited (diversified activities), Infosys Limited (brand value, R&D expenditure), Mindtree Limited (excessive onsite revenue), and Akshay Software Technologies Limited (ERP implementation services) as non-comparable to the assessee's captive software development services. However, the ITAT retained Larsen & Toubro Infotech Limited, Infobeans Technologies Limited, and Cybage Software Private Limited as valid comparables, rejecting the assessee's functional dissimilarity arguments. The Tribunal directed inclusion of Maveric Systems Limited and Harbinger Systems Pvt. Limited, finding them functionally similar despite R&D expenditure or database availability concerns.
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• Tax Relief: Section 14A Disallowance Deleted and MEIS Export Incentives Recognized as Non-Taxable Capital Receipts

  Case-Laws - AT : The ITAT deleted the disallowance made under s.14A read with Rule 8D(2)(ii) as the assessee demonstrated that investments were made in controlled entities requiring no expenditure to earn dividend income, and interest-free own funds exceeded investments. Following South Indian Bank Ltd., the Tribunal ruled in the assessee's favor. Additionally, the ITAT permitted the assessee's additional claim regarding export incentives under MEIS Scheme, holding that such rewards constitute capital receipts not chargeable to tax under normal provisions, relying on Eastman Exports Global. Further, following Ankit Metal and Power Limited, the Tribunal directed exclusion of MEIS amounts from book profit computation under s.115JB as they represent capital receipts.
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• Unaccounted "On-Money" Cash Receipts from Property Deals Taxable at 45% Profit Margin Under Section 148

  Case-Laws - AT : The ITAT upheld that unaccounted cash receipts ("on-money") discovered during seizure operations constituted taxable income despite subsequent property registration to other parties. The Tribunal rejected the assessee's claim to reduce Rs. 10,00,000 from the addition as the CIT(A) found only the payment method had changed, not the total amount. However, regarding taxation of cash receipts, the ITAT modified the CIT(A)'s 50% profit estimation to 45% of gross receipts, partially allowing the assessee's appeal. The Tribunal confirmed the validity of notice under section 148 without providing 7 days to reply under section 148A(b) since search and seizure operations were conducted after 01.04.2021, making the case exempt from section 148A requirements per the proviso.
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• Penalty Under Section 272B Reduced: Multiple PAN Collection Failures Constitute Single Default for Jewellery Retailer

  Case-Laws - AT : The ITAT reduced the penalty imposed under Section 272B(2) from Rs. 23,20,000 to Rs. 10,000 for the assessee's failure to obtain and report PAN details of 232 customers who purchased jewellery. The Tribunal determined that multiple instances of non-compliance constituted a single default rather than separate offenses, considering this was the first year after the PAN reporting requirement was introduced (effective January 2016). The decision aligned with precedent from the Delhi HC in DHTC Logistic Ltd. and was consistent with the AO's previous treatment of similar defaults by the same assessee. The ITAT noted that the statutory amendment specifying "ten thousand rupees for each such default" only came into effect from September 2019.
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• Penalty Under Section 271G Cannot Be Imposed Without Prior Notice Under Section 92D(3) For Transfer Pricing Documentation

  Case-Laws - AT : The ITAT dismissed Revenue's appeal, holding that penalty under s.271G for failure to furnish transfer pricing documentation cannot be levied against the German resident taxpayer. The Tribunal relied on the Procter & Gamble Home Products precedent, which established that s.271G penalties require specific defects to be identified in the documents submitted under s.92D. Since no notice under s.92D(3) was issued requiring the taxpayer to furnish information regarding its international transactions-a prerequisite for initiating s.271G penalty proceedings-the ITAT concluded that the penalty was improperly imposed and upheld the taxpayer's position.
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• Additions Under Section 153C Invalid Without Corroborative Evidence Beyond "Hazir Johri" Software Entries

  Case-Laws - AT : The ITAT ruled in favor of the assessee regarding additions made under section 153C based on entries in "Hazir Johri" software discovered during a search of JBL. While the AO relied on a director's statement confirming the software documented both official and unofficial transactions, the Tribunal found no concrete evidence linking the assessee to transactions in the combined ledger. The revenue failed to produce corroborative evidence such as bills, vouchers, or stock registers to establish the nature of transactions or prove cash sales belonged to the assessee. Following precedents in Anoop Kumar Soni and Surender Kumar Jain cases involving similar JBL search matters, the Tribunal concluded that entries in the software alone were insufficient for making additions.
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• Share Application Money from Non-Resident Investors Not Taxable Under Section 68 When Identity and Creditworthiness Properly Established

  Case-Laws - AT : The ITAT upheld the CIT(A)'s deletion of additions made by the AO under s.68 regarding share application money/premium received from non-resident investors. The Tribunal found the assessee had sufficiently proved the identity and creditworthiness of investors and transaction genuineness. Regarding trade payables, the ITAT determined s.68 was inapplicable as the disputed amounts represented outstanding liabilities for purchases rather than unexplained credits in the assessee's books. Following Kulwinder Singh, the Tribunal confirmed that s.68 provisions do not apply to amounts representing credit purchases. The Revenue's appeal was accordingly dismissed on both grounds.
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Customs

• Anti-Dumping Duty Imposed on Trichloro Isocyanuric Acid Imports from China and Japan for Five Years

  Notifications : The Ministry of Finance has imposed anti-dumping duty on Trichloro Isocyanuric Acid imported from China PR and Japan under tariff items 2933 69 10 or 2933 69 90. Following DGTR's determination that the subject goods were exported to India below normal value, causing material injury to domestic industry, duties ranging from USD 766-986/MT for Chinese producers and USD 276/MT for Japanese producers have been imposed. The duty will remain in effect for five years from the notification date, with specific rates applying to different producers. The measure aims to protect domestic manufacturers from price undercutting caused by dumped imports that were determined to have materially injured the domestic industry.
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• Extension of Customs Duty and Agriculture Infrastructure Cess Exemption on Yellow Peas Imports Until May 31, 2025

  Notifications : The Central Government has extended the exemption period for imports of Yellow Peas (HS 0713 10 10) from applicable Basic Customs Duty and Agriculture Infrastructure Development Cess. Through Notification No. 17/2025-Customs dated March 7, 2025, issued under Section 25(1) of the Customs Act, 1962, read with Section 124 of the Finance Act, 2021, the exemption period previously set to expire on February 28, 2025, has been extended to May 31, 2025. This amendment to the principal Notification No. 64/2023-Customs takes effect immediately, reflecting the government's determination that this extension serves the public interest.
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• Government Amends Customs Notifications Setting 5% Import Duty on Lentils Under Section 25 of Customs Act

  Notifications : The Central Government amended multiple customs notifications pursuant to powers under s.25 of the Customs Act, 1962, read with s.124 of Finance Act, 2021 and s.110 of Finance Act, 2018. The amendments modify the import duty structure for Lentils (Mosur) under tariff heading 0713 40 00. Specifically, Notification 50/2017-Customs and 11/2021-Customs were amended to set a 5% customs duty rate for lentils, while Notification 11/2018-Customs was amended to include Lentils (Mosur) as entry 5A. Additionally, entry 4 in Notification 49/2021-Customs pertaining to lentils was omitted. These amendments take effect from March 8, 2025.
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• Detention Order Under COFEPOSA Invalidated: Authority Failed to Consider Efficacy of Existing Bail Conditions

  Case-Laws - SC : The SC invalidated a detention order under COFEPOSA Act, finding the detaining authority failed to apply its mind regarding the efficacy of bail conditions already imposed on the detenu. While acknowledging limited judicial review in preventive detention matters, the Court held that when criminal prosecution and preventive detention are based on identical allegations of organized smuggling, the detaining authority must specifically consider whether conditions imposed by the Magistrate while granting bail were sufficient to prevent further smuggling activities. The detention order's silence on this aspect rendered it legally unsustainable, despite the detenu's alleged involvement in smuggling contraband detrimental to national interest. Appeal allowed and detention order set aside.
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• Foreign Trade Policy Advance Authorization Application Rejection Challenge Dismissed Due to Lack of Territorial Jurisdiction Under Article 226

  Case-Laws - HC : The HC dismissed a writ petition challenging rejection of an Advance Authorisation application, ruling it lacked territorial jurisdiction under Article 226. Applying the doctrine of forum non-conveniens, the court held that merely because part of the cause of action arose in Delhi did not automatically confer jurisdiction. Following Supreme Court precedents in Kusum Ingots and State of Goa cases, the HC determined that even if a small part of cause of action arises within its territorial jurisdiction, this factor alone is not determinative. The court concluded it was neither the appropriate forum with territorial jurisdiction nor the forum conveniens to adjudicate the dispute, resulting in dismissal of the petition.
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• Customs Broker's Duty Limited to Verifying Document Authenticity, Not Assessing Correctness Under Regulation 10(n) of CBLR 2018

  Case-Laws - AT : CESTAT held that a customs broker's obligation under Regulation 10(n) of CBLR 2018 is limited to verifying the authenticity of documents issued by government officers, not assessing their correctness. The broker must verify that certificates like IEC and GSTIN were genuinely issued, which can be done through online verification or comparing with originals. The broker is not required to investigate document validity or maintain surveillance on clients after initial address verification. If clients relocate without updating authorities, this cannot be held against the broker. The Tribunal concluded the appellant did not violate Regulation 10(n) when the exporter was later found non-existent, and accordingly allowed the appeal against license revocation and security deposit forfeiture.
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DGFT

• Broken Rice Export Policy Changed from "Prohibited" to "Free" Under Section 3 of Foreign Trade Act

  Notifications : The Central Government has amended the export policy for Broken Rice under HS code 1006 40 00 with immediate effect, exercising powers conferred by Section 3 read with Section 5 of the Foreign Trade (Development & Regulation) Act, 1992, and in accordance with Para 1.02 and 2.01 of the Foreign Trade Policy. The notification changes the export status of Broken Rice from "Prohibited" to "Free," effectively removing all restrictions on its export. This policy change applies to Chapter 10 of Schedule-II (Export Policy) of the ITC (HS) 2022 and takes effect immediately.
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IBC

• Belated Claims After Resolution Plan Approval Under IBC Rejected Due to Missed Deadlines

  Case-Laws - AT : The NCLAT dismissed appellants' attempt to submit belated claims after a resolution plan had already been approved by both the CoC and Adjudicating Authority. The Tribunal held that the plan could not be reopened for claims belatedly agitated by appellants who failed to pursue their claims within IBC timelines without justifiable reasons. The NCLAT emphasized that admitting claims after plan approval would jeopardize the CIRP implementation process. Finding no error in the Adjudicating Authority's refusal to admit the belated claims and no infirmities in the impugned order, the NCLAT affirmed the lower tribunal's decision and dismissed the appeal.
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• Corporate Debtor's Settlement Plans Rejected by All Financial Creditors in Section 7 IBC Application

  Case-Laws - AT : NCLAT dismissed the corporate debtor's appeal against admission of a Section 7 application filed by Punjab & Sind Bank. Despite the appellant submitting three settlement plans with different investors, all financial creditors (Punjab & Sind Bank, Bank of Maharashtra, and Punjab National Bank) unanimously rejected these proposals. YEIDA, claiming 751 crores, also opposed settlement. The Tribunal found that given the corporate debtor's substantial liabilities and opposition from homebuyers' associations, resolution through the statutory IBC framework was appropriate rather than settlement. The NCLAT confirmed the Section 7 application was filed within limitation by a duly authorized person and excluded the period from 29.07.2024 until judgment from the CIRP timeline.
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Indian Laws

• Arbitration Award on GST Component in Lease Rentals Requires Security Deposit Under Section 34

  Case-Laws - HC : The HC denied unconditional stay of an arbitration award concerning GST component disputes in lease rentals. The petitioner failed to substantiate allegations of fraud or corruption in the making of the award, as required under the Arbitration and Conciliation Act, 1996. The court determined that honest mistakes or incorrect appreciation of contract terms do not constitute fraud. The petitioner must secure Rs. 8,40,52,832/- by furnishing a bank guarantee to the Registrar Original Side, Calcutta. Unconditional stay granted for four weeks, and stay will continue until disposal of the Section 34 application upon compliance with the security requirement. In default, the stay would be vacated.
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Service Tax

• Railways Cleaning Services Exempt from Service Tax as Public Health Services to Government Body

  Case-Laws - AT : CESTAT ruled that cleaning services provided to Indian Railways were exempt from Service Tax. For the period up to 30.06.2012, the Tribunal held that railways cannot be considered a commercial concern as its passenger transportation is for public welfare without profit motive. For the period after 01.07.2012, services qualified for exemption under Entry No. 25 of Notification No. 25/2012-S.T., as they constituted "public health, sanitation conservancy and solid waste management" services rendered to a government body. The Tribunal also found no grounds for invoking extended limitation period as appellant had no intention to evade tax. The demand for Service Tax, interest, and penalties was set aside and the appeal allowed.
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Central Excise

• Discrepancies Between Tax Audit Report and ER-1 Returns Alone Cannot Establish Clandestine Manufacturing of Liquid Medicaments

  Case-Laws - AT : CESTAT ruled against the Revenue's allegation of clandestine manufacture and removal of liquid medicaments based solely on discrepancies between Tax Audit Report (Form 3CD) and ER-1 Returns. Following precedent in Micky Metals Ltd. v. CCE, Bolpur, the Tribunal held that mere differences in figures without establishing parameters of clandestine activity are insufficient to sustain such serious charges. Furthermore, since the documents were in the public domain during the relevant period (2010-11 and 2011-12), the show cause notice issued on 29.04.2015 exceeded the normal limitation period. The Tribunal allowed the appeal, setting aside the demand for excise duty, interest, and penalties.
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Case Laws:

• GST

• 2025 (3) TMI 487
  Disallowance of ITC claimed by the petitioner on the basis of the returns filed under Section 39 of the said Act in Form GSTR 3B beyond the due date - HELD THAT:- The ITC had been disallowed by reasons of the petitioner filing the return in Form GSTR 3B beyond the due date, and on the basis of insertion of sub-section (5) to Section 16, the returns filed by the petitioner which are in respect of the tax period from July, 2018 to March 2020 have now been regularized having regard to the new cut of date provided for in Section 16 (5) of the said Act, the petitioner cannot be denied the benefit of the aforesaid amendment. The petitioner is permitted to apply before the appropriate authority by making appropriate rectification application - petition disposed off.

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• 2025 (3) TMI 486
  Challenge to order passed by the appellate authority under Section 107 of the Central/West Bengal Goods and Services Tax Act, 2017 - HELD THAT:- Since the entire amount of tax on account of WBGST has been recovered from the petitioner, there is no question for the petitioner to make further deposit of 2.5%. Paragraph 3 of the scheme dated 2nd November, 2023 enables the registered tax payer to prefer an appeal beyond the ordinary time prescribed subject to the registered tax payer fulfilling the pre-condition for maintaining such appeal. Admittedly in this case, the appellate authority has come to a finding that the petitioner fulfils all other precondition for maintaining the appeal save and except making payment of 2.5% of the disputed tax in respect of the WBGST, by debiting his electronic cash ledger. Admittedly, in this case, since the entire amount of the demand on account of tax insofar as WBGST is concerned, as would appear from the order impugned had already recovered, the same obviously constitute 50% of the entire demand made in GSTDRC 07 forming subject matter of challenge in the appeal. The matter is remanded back to the appellate authority for a decision on merits - Petition disposed off by way of remand.

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• 2025 (3) TMI 485
  Challenge to an appellate order under the Central/West Bengal Goods and Services Tax Act, 2017 for the Financial Year 2019-2020 - wrongful availment of input tax credit - wilful suppression of facts or not - HELD THAT:- Initially a show cause notice was issued under Section 74 of the said Act and accordingly on the basis thereof an order under Section 74 of the said Act was passed on 12th May, 2021. Subsequently, the appellate authority while hearing out the appeal by taking note of the provisions contained in Section 74 and 73 of the said Act was of the view that though the petitioner had wrongly availed input tax credit however, since it could not be established that the availment of input tax credit was by reasons of fraud, wilful misstatement or suppression with an intent to evade tax, the appellate authority had proceeded to hold that the present proceeding should be treated as a case within the meaning of Section 73 of the said Act. Matter remanded to the appellate authority with a direction upon the appellate authority to reconsider the above appeal in the light of GSTR-2A, a copy whereof has been placed before this Court, and to decide the applicability of Section 16 (5) of the said Act, having regard to the returns filed by the petitioner within the extended cutoff date as provided therein. Petition disposed off by way of remand.

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• 2025 (3) TMI 484
  Challenge to order passed by the respondent no.2 under Section 73(9) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The factual matrix is such that the matter is squarely covered by a coordinate Bench judgment of this Court in MAHAVEER TRADING COMPANY VERSUS DEPUTY COMMISSIONER STATE TAX AND ANOTHER [ 2024 (3) TMI 334 - ALLAHABAD HIGH COURT] where it was held that the impugned order cannot be sustained in the eyes of law. It has been passed in gross violation of fundamental principles of natural justice. The self imposed bar of alternative remedy cannot be applied in such facts. If applied, it would be of no real use. In fact, it would be counter productive to the interest of justice. Upon a perusal of record, it appears that the factual matrix is very similar to one in Mahaveer Trading Company s case. There are no reason to take a different stand. The impugned order dated 20.04.2024 is quashed and set-aside with a direction given to the officer concerned to grant the petitioner another opportunity of filing a fresh reply and thereafter fix a date of hearing and pass a reasoned order - Appeal allowed.

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• 2025 (3) TMI 483
  Disallowance of ITC claimed by the petitioner on the basis of the returns filed under Section 39 of the said Act in Form GSTR 3B beyond the due date - HELD THAT:- The ITC had been disallowed by reasons of the petitioner filing the return in Form GSTR 3B beyond the due date, and on the basis of insertion of subsection (5) to Section 16, the returns filed by the petitioner which are in respect of the tax period from November 2018 to March 2019 have now been regularized having regard to the new cut of date provided for in Section 16(5) of the said Act, the petitioner cannot be denied the benefit of the aforesaid amendment. The petitioner is permitted to apply before the appropriate authority by making appropriate rectification application - petition disposed off.

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• 2025 (3) TMI 482
  Seeking to declare Rule 31A(3) of the Central Goods and Services Tax Rules, 2017 and West Bengal Goods and Services Tax Rules, 2017 along with Circular No.27/01/2018-GST dated January 4, 2018 to be ultra vires Article 14 of the Constitution of India and Section 2 (52), Section 7 and Section 15 of the C.G.S.T. Act, 2017 and W.B.G.S.T. Act, 2017 - HELD THAT:- The respondents submitted that after the show-cause notice was issued, a Corrigendum dated 10th December, 2024 was issued whereby the appropriate portions of the show-cause notice dated 24th July, 2024 was amended and the showcause notice was made answerable to the Additional/Joint Commissioner of CGST CX, Bengaluru East Central Tax Commissionerate, Bengaluru and the appellants/writ petitioners had also participated in the adjudication process and the adjudicating authority has passed orders. This issue need not be adjudicated at this juncture and the same is kept open and left to be decided when the writ petition is taken up for hearing. Appeal disposed off giving liberty to the appellants/writ petitioners to file a separate application before the learned Single Bench and seeking for appropriate orders in the light of the order passed by the Hon ble Supreme Court dated 22nd January, 2025 and if such application is filed, the Hon ble Single Bench is at liberty to decide the matter on merits and in accordance with law.

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• 2025 (3) TMI 481
  Impugned order are time barred or not - extension of the time limit provided by a notification is applicable retrospectively or not - HELD THAT:- In this case, proceedings under Section 73 of the U.P. GST Act, 2017 were initiated on 02.03.2023 by issuance of a show cause notice and final order has been passed on 06.12.2023 whereas in view of the above quoted judgment, such an order could have been passed only till 31.12.2023 even after extension of the time limit. The facts aforesaid being undisputed in the sense that they are mentioned in the impugned order and the records itself, apparently, the proceedings culminating in the impugned order are time barred, therefore, there are no reason to call for a counter affidavit. Petition allowed.

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• 2025 (3) TMI 480
  Challenge to order passed by the appellate authority under Section 107 of the Central/West Bengal Goods and Services Tax Act, 2017 - cancellation of registration of petition - HELD THAT:- The original show cause notice for cancellation of registration of the petitioner was issued on the ground that the petitioner s place of business was fictitious. Although the petitioner did not respond to the same, however, after the order of cancellation was issued, the petitioner had filed an application for revocation of the order of cancellation wherein the petitioner had clarified that the petitioner had incorrectly recorded its postal address of its place of business as 122/8/9/3 J. N. Mukherjee Road, Howrah, though the correct address would be 122/89/3 J. N. Mukherjee Road, Howrah. Once, such application for revocation was filed, the respondents had called upon the petitioner to substantiate its right of legal occupancy of its place of business. Since, according to the respondents, the petitioner could not produce any valid documents in support of his claim of lawful occupancy of its place of business, an order was passed rejecting the application for revocation. The matter is accordingly remanded back to the appellate authority for a fresh decision on merits. While deciding the matter, the appellate authority shall verify and carry out physical verification of the petitioner s place of business, in accordance with the Rules upon giving due notice to the petitioner. Petition disposed off by way of remand.

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• 2025 (3) TMI 479
  Challenge to the continued retention of goods by the Respondent, seized on the basis of a search conducted by the Respondents - sufficient cause present or not - absence of notice or opportunity to be heard before extending the seizure period - HELD THAT:- In the facts of the present case, no notice of extension of the seizure was provided prior to the conclusion of the six-month period. Reliance was instead placed on certain extracts which came to be filed as a consequence of Order dated 22.08.2023 to contend that the same would constitute compliance of the mandate of sufficient cause - These extracts are not in the public domain and the Petitioner herein could not have had any opportunity to controvert or reply to the contents of the same. It clearly amounts to a unilateral act on the part of the Respondent by which the Petitioner would stand deprived of its statutory entitlement to the goods and for that reason alone would not satisfy the mandate of Section 67 (7) of the CGST Act. Clearly, the shoddy performance by the concerned officers in valuing the goods despite the complete cooperation of the Assessee cannot be sufficient cause - In any event, when the relevant documents themselves were not made available completely, it is difficult to accept the contention that the same could have formed sufficient cause for the purpose of extending the period of seizure. The confiscation is the result of an investigation that establishes that there has been a contravention of the provisions of the Act. The same cannot be equated to the power of seizure under Section 67 which pertains to the power of the Officer to seize based on a reason to believe . A notice under Section 130 cannot be equated to the mandate under Section 67 (7). It is directed that the seized goods as per the stock summary annexed to the letter dated 17.06.2021 (Annexure P-6) be released upon the Petitioner making a deposit of the amount as per the valuation annexed to the letter dated 17.06.2021, with the Respondents. Conclusion - The sufficient cause must be shown to the affected person, and the right to notice and hearing cannot be unilaterally denied. The provisions of the CGST Act regarding seizure are pari materia with the Customs Act. Petition allowed.

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• 2025 (3) TMI 478
  Cancellation of GST Registration order - petitioner is ready to pay all the balance tax, interest on it and late fee if any - HELD THAT:- Admittedly, the present matter is covered by the Order, passed by the Co-ordinate Bench of this High Court in SHIVAM BISHT VERSUS ASSISTANT COMMISSIONER SECTOR 4 HALDWANI, COMMISSIONER STATE GOODS AND SERVICE TAX COMMISSIONERATE DEHRADUN UTTARAKHAND [ 2024 (4) TMI 1237 - UTTARAKHAND HIGH COURT] With the consent of learned counsel for both the parties, the present writ petition is disposed of with a direction that in case, the petitioner deposits entire outstanding dues of tax, interest and penalty, if any and submits his application along with a certified copy of this order within two weeks from today, the Competent Authority shall consider and decide the said application as per law within a period of two weeks thereafter. Petition disposed off.

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• 2025 (3) TMI 477
  Seeking to challenge Ext.P4 order issued by the Appellate Authority for Advance Ruling, Kerala - Transitional input tax credit - computers, laptops etc. used by the applicant for providing output service would qualify as inputs or not - If the said goods are physically available as closing stock with the Applicant as on 30th June, 2017, can the Applicant avail input tax credit of the VAT paid on the same? HELD THAT:- In the case at hand, the petitioner herein was not liable to tax or was not supposed to take out registration under the existing law (KVAT). Therefore, the petitioner was making a claim with respect to the first limb of Section 140(3) of the KSGST Act. The computers/laptops would fall under the former portion of the afore definition. However, a conscious exclusion is provided in the latter portion with respect to such capital goods used for rendering of service . Therefore, insofar as the petitioner was using the computers/laptops for rendering services, they were not capital goods under Section 2(x) of the KVAT Act. When that be so, computers/laptops were not capital goods for the purposes of Chapter XX of the KSGST Act on account of the afore Explanation. In the light of the afore, the computers/laptops, which were used by the petitioner for rendering services would definitely fall under Chapter XX and were entitled to transitional credit. There cannot be any doubt regarding the entitlement of the petitioner for transitional credit under Section 140(3), especially since the petitioner is eligible for input credit as against the computers/laptops under the KSGST Act. Conclusion - The petitioner was entitled to transitional credit under Section 140(3) of Chapter XX of the KSGST Act as regards computers/laptops. Petition allowed.

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• 2025 (3) TMI 476
  Obligation to pay/reimburse the GST claim amount as per the Standard Bidding Document (SBD) Clause 35 - Corporation s withholding of royalty payment from the petitioner s work done bill is justified or not - HELD THAT:- The Respondent Corporation is ready to consider the claim of the petitioner in accordance with SBD Clause 35 , subject to the condition that the petitioner submits a complete claim and fulfills the requirement by furnishing the information which have been sought for by the Superintending Engineer of the Corporation in Annexure R/B . Liberty granted to the petitioner to submit a complete claim with all such information which have been sought for in Annexure R/B within a period of two months from today - On receipt of the complete claim with the requirements in terms of Annexure R/B , the competent authority of the Corporation shall consider the same in accordance with law and keeping in view SBD Clause 35 . It is made clear that the prima-facie opinion expressed in paragraph 4 of the Letter (Annexure R/B ) shall not come in the way of a fair consideration of the claim in accordance with law. Application disposed off.

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• 2025 (3) TMI 475
  Levy of GST - collection of the tax being a notified area as established under the provisions of Gujarat Industrial Development Corporation Act, 1962 by Notification dated 20.01.2011 - HELD THAT:- Issue Notice returnable on 20.11.2024.

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• 2025 (3) TMI 474
  Condonation of delay in filing appeal - Section 100 of CGST Act, 2017 - applicability of Doctrine of Merger in determining the start of the limitation period for filing an appeal - HELD THAT:- The proviso to Section 100 (2) of the CGST Act, 2017, begins with the phrase Provided that the Appellate Authority may, and ends with the phrase allow it to be presented within a further period not exceeding thirty days. . These phrases clearly convey the fact that the Appellate Authority has a discretion, i.e., they may or may not allow the appeal case to be presented within a further period not exceeding thirty days, depending upon the facts and circumstances of the case. Accordingly, it also becomes clear that even this discretionary power is restricted to a further period not exceeding thirty days, beyond the normal time limit of initial 30 days from the date of communication of the order - As it is found that no sufficient cause for the delay beyond the normal time limit of 30 days was shown by the Appellant, it is opined that the question of allowing the appeal to be presented, even for the extended time limit of a another 30 days as prescribed in the statute, does not arise in the instant case. The statue mandates manual filing of an application, intimation, reply, etc., in respect of any process or procedure prescribed therein, even in cases where a reference to electronic filing has been made. Accordingly, the Appellant s claim that they were under the impression that an appeal could be filed online only and that there was no mechanism to file a physical copy of the appeal, is of no avail to them, and in general parlance, ignorance of law cannot be cited as an excuse - It is also interesting to note here that the first e-mail in this regard has been admittedly sent by the Appellant on 17.10.2024, by which time, not only the last date for the filing of appeal i.e., 30.08.2024 was over, but the last date including the condonable period of another 30 days, i.e., 29.09.2024, was over as well. The powers of the appellate authority to condone the delay in filing the appeal is statutorily prescribed. Notwithstanding the same, we are of the considered opinion that it is not obligatory on the part of the appellate authority to exercise the power to condone the delay, as claimed by the Appellant in their Grounds of Appeal . Rather, it is to be seen as a discretionary power that lies with the appellate authority, enabling it to consider the request for condonation, provided it is satisfied that sufficient cause is shown for the delay, within the statutorily prescribed time limit - Under the facts and circumstances of this case, as the Appellant has not come up with sufficient cause for the delay, the question of exercising the discretionary power of condonation does not arise, even for the extended time limit prescribed statutorily under proviso to Section 100 (2) of the CGST Act, 2017, leave alone the further period beyond the statutory time limit prescribed under proviso to Section 100 (2) of the CGST Act, 2017. Accordingly, since the filing of the appeal in the instant case, falls beyond the scope of powers conferred under proviso to Section 100 (2) of the CGST Act, 2017, it is held that the appeal cannot be allowed to proceed on account of time limitation, and as a result, the question of discussing the merits of the issue in this case in appeal does not arise, as well. Conclusion - The Appellate Authority has no power to allow the appeal to be presented beyond the period of 30 days. The language used makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning the delay only up to 30 days after the expiry of 60 days which is the normal period for preferring appeal.

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• 2025 (3) TMI 473
  Exempted supply of service in terms of Sl. No.66 of Notification No. 12/2017-CGST(Rate) dated 28-06-2017 as amended by Notification No. 2/2018-CT(Rate) dated 25-01-2018 or not - printing of pre-examination items like hall tickets, question paper, OMR sheets Answer booklet for conducting examination by the educational boards - printing of post examination items like mark sheets, Degree certificate, grade sheets, rank sheets, rank cards, certificates to educational boards, after scanning the OMR sheets and processing of data in relation to conduct of examination - scanning and processing of results of the examination. Whether the supply of test papers/question papers by the applicant for educational institutes should be treated as supply of goods or supply of services as the applicant makes the supply using the paper and ink owned by him? - HELD THAT:- The supply made by the applicant cannot be classified as selling of question papers to the educational institutes as the content to be printed on them is given by the latter to the applicant. The supply of Printed materials as required by the institution cannot be in toto categorised as supply of goods to the educational institutes, as this is not a ready-made printed material bought by recipient who does not own the content in the material to be bought, but it is a composite supply of providing printing services on the papers owned by him. This composite supply involves both supply of printing services and supply of the paper owned by him on which the printing is done as per the content given by the educational institutes - The supply of papers is an integral part of the composite supply, without which the contents cannot be printed. But the same cannot be called as principal supply as the purpose for which the educational institutes contracted with applicant is not for buying papers but for the printing services. The content to be printed is based on the specifications given by the educational institutes and the applicant has no role in deciding the same. Therefore supply of printing of the content supplied by the recipient of supply] is the principal supply and the same is clarified by Circular No. 11/11/2017-GST, dated 20-10-2017. Applicability of Sr. No. 66 of N/N. 12/2017-Central Tax (Rate), dated 28-6-2017, as amended vide clause (o) of N/N. 2/2018-Central Tax (Rate), dated 25-1-2018, read with Sr. No. 27 of N/N. 11/2017-Central Tax (Rate), dated 28-6-2017 - HELD THAT:- As per Sr. No. 66 (b) (iv) of Notification No. 12/2017-Central Tax (Rate), as amended, services provided to an educational institution, by way of services relating to admission to, or conduct of examination by, such institution is exempted from payment of Goods and Services Tax. It is to be noted that exemption is given only to services and not to goods in this Notification and the principal supply of the composite supply made by the applicant is printing services. This is a composite supply, of which Printing services is the principal supply, as defined under Section 2(90) of the Central Goods and Services Tax Act, which makes HSN classification of the supply to be done on printing services which falls under Heading 9989. As it is a service done to educational institutions, the exemption under S. No. 66 (b) (iv) of Notification No. 12/2017-CT(Rate) dated 28-06-2017 is eligible as the said Notification details the services provided to educational institution which are exempt. The same is clarified by Circular No. 151/07/2021-GST dated 17-6-2021 while dealing with the issue of supply of various services by National and State Boards. Conclusion - i) Services of printing of pre-examination items like hall tickets, question paper, OMR sheets, answer booklet provided to Educational Institutions for conducting examination shall be treated as exempted supply in terms of serial No. 66 of N/N. 12/2017-CT(Rate) dated 28-06-2017 as amended by N/N. 02/2018-CT(Rate) dated 25-01-2018. ii) Services of printing of post-examination items like mark sheets, Degree Certificates, grade sheets, rank sheets, rank cards, certificates to educational boards, after scanning the OMR sheets and processing of data provided to Educational Institutions in relation to conduct of examination shall also be treated as exempted supply in terms of serial No. 66 of N/N. 12/2017-CT(Rate) dated 28-06-2017 as amended by N/N. 02/2018-CT(Rate) dated 25-01-2018. iii) Services of scanning and process of results of the examination for an Educational Institution shall be treated as exempted supply in terms of serial No. 66 of N/N. 12/2017-CT(Rate) dated 28-06-2017 as amended by N/N. 02/2018-CT(Rate) dated 25-01-2018.

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• 2025 (3) TMI 472
  Classification and applicable tax rate for the fish processing services provided by the applicant - job-work or not - classifiable under 998812 as Fish processing services which attracts 5% in terms of N/N. 11/2017-CT(Rate) dated 28-06-2017 amended by N/N. 31/2017-CT(Rate) dated 13th Oct, 2017 - HELD THAT:- In the instant case, the activity of the applicant falls within the scope of job work, and the Principal who is supplying the goods has to be a registered person. The registered person on whose goods job work is performed is called the Principal for the purpose of Section 143 of the CGST Act, 2017. Here the person who is sending raw fish in ice to the applicant is the principal and the applicant who performs any treatment or processes shall be the job-worker. The activity of fish processing is classified under Chapter heading 998812 (manufacturing services on physical inputs (goods) owned by others vide notification No. 11/2017-CT.(Rate) dated 28th Jun, 2017 which was included vide Notification No. 31/2017-CT (Rate) dated 13th Oct, 2013, as Services by way of job work in relation to -(f) all food and food products falling under Chapter 1 to 22 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) chargeable @ 2.5.% each of CGST and SGST. Therefore, the fish processing services are taxable at the rate of 5% with effect from 13th Oct, 2017 under Chapter heading 9988. Prior to its amendment, the activity was covered under the Chapter heading 998812 as (ii) Manufacturing services on physical inputs (goods) owned by others, other than (i) above and attracted GST @ 18%. Conclusion - If the applicant does the fish processing service on the goods owned by other registered person, it will fall within the scope of job work and hence will be charged at the rate of 5%, provided all the procedures and provisions contained in the acts and rules are followed and adhered to by both the principal and by the applicant (job worker).

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• 2025 (3) TMI 471
  Classification of the service - Maintaining the micro-compost centres and processing the wet waste provided by the Greater Chennai Corporation at designated locations in North Region Zones - entitlement to exemption under Serial No.3 of N/N. 12/2017-Central Tax (Rate), dated 28.07.2017, as amended from time to time - HELD THAT:- From the scope of work and the obligation of applicant, it is seen that the applicant deploys work forces to maintain the Micro Compost Centers, processes the wet waste provided by GCC and hand overs all the by-product manure to GCC without any charges. The applicant will be paid the service charges which is quoted PMT. From the copy of the Bill submitted, it is seen that the applicant has addressed the Zonal Officer, Zone-5, a bill for the month of December 2020 with Tonnage of waste processed. The service charges are arrived at based on the tonnage of waste handled and GST is not charged on the service charges billed. The activity undertaken by the applicant is waste treatment/processing of wet waste provided by GCC and maintenance of the designated Micro compost centers of GCC, by employing their own personnel. In our opinion, the activity will more appropriately fall under the Group 99943-waste treatment and disposal services rather than group 99942-Waste collection Services. Under the facts and circumstances of the instant case, we find that the applicant is not involved in the door to door collection of waste/garbage, whereas they are actually entrusted with the work of treatment/processing of wet waste and thereafter disposing the same as stipulated. Therefore, we hold that the classification of the activity of Maintaining Micro Compost Centers and processing the wet waste provided by GCC, is classifiable under Heading 9994 and more specifically under group 99943- Waste Treatment and Disposal services . Applicability of serial No.3 of N/N. 12/2017-Central Tax (Rate), dated 28/06/2017, as amended in N/N.2/2108, Central Tax (Rate), dated 25.01.2018 - HELD THAT:- Rule 15 of the Solid Waste Management Rules 2016, vests the Local Authorities with the responsibilities to prepare and implement effective Solid Waste Management of the waste generated in the limits of said authority. On a cogent reading of Sl.No.6 of the Twelfth Schedule to the Constitution and Rule 15 of the Solid Waste Management Rules 2016, it is evident that it is the duty of the local authority to effectively handle Solid Waste Management . In the case at hand GCC for Solid waste management has offered the service of the maintenance of Micro composting center to the applicant through the bid process and therefore the final criterion is also satisfied. The supply of service provided to the GCC by the applicant for maintenance of the Micro Compost Centres is Pure services rendered to GCC, a local authority and the said service are activities entrusted to a municipality under Article 243W of the Constitution. Hence, the applicant is eligible for exemption from GST vide SI.No.3 of Notification 12/2017-CT. (Rate) dated 28.06.2017(as amended). Conclusion - i) The Maintenance of Micro Compost Centres by the applicant to Greater Chennai Corporation, is classifiable under Heading SAC 9994 and more specifically under group 99943- Waste Treatment and Disposal services as per the Annexure to Notification No. 11/2017-C.T. (Rate) dated 28.06.2017. ii) he supply of service provided to the Greater Chennai Corporation by the applicant for Maintaining the Micro Compost Centers and processing of wet waste are exempted from GST vide Sl.No.3 of Notification 12/2017-CT(Rate) dated 28.06.2017 (as amended) and the corresponding Notification issued under TNGST Act.

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• 2025 (3) TMI 470
  Levy of GST - stipend received from the industry partner by Logskim and paid to trainees without making any deduction - sale of Uniforms and shoes and the amount of Insurance Premium sold to the industry partner at cost without any margin/markup - pure agent services or not - HELD THAT:- Under the Explanation to Rule 33, the expression Pure Agent has been defined as a person who, (i) enters into a contractual agreement with the recipient of supply, (ii) neither intends to hold nor holds any title to the goods or services or both so procured or supplied, (iii) does not use the same for his own interest, and, (iv) receives only the actual amount incurred to procure such goods or services. Further, for the purpose of exclusion from the taxable value, certain conditions are required to be fulfilled, viz., payment should be made to the third party by the supplier on authorisation from the recipient of supply; the payment made has been separately indicated in the invoice issued to the recipient of supply; the supplies procured are in addition to the supplies on his own account. No supplies are procured by the supplier (applicant) in the instant case, as the supplier just acts as a conduit in receiving the stipend amount from the industry partner, and disbursing the same to the trainees. Further, no payment is made to any third party, as no supply is procured by the applicant and only disbursal of funds (stipend) takes place. Accordingly, we find that the conditions as in clauses (i) and (iii) to Rule 33 of the CGST Act, 2017, do not get fulfilled in the instant case. Apart from the above, the amount or value that is eligible for exclusion from the taxable value under the pure agent concept, prima facie, has to be an expenditure or cost , which was incurred by the supplier as a pure agent of the recipient of supply. This is not so in the instant case of the applicant, because they have neither incurred any expenditure / cost on their own account, nor they have made payment to any third party, in this regard. Sale of Uniforms and shoes and the amount of Insurance Premium to industry partner - HELD THAT:- The reimbursement in actuals happen only in the case of disbursal of stipend to trainees. Accordingly, once it is held that the appellant does not act as a Pure Agent , even in the case of stipends, the question of applying Pure Agent test to the case of sale of Uniforms and shoes and the amount of Insurance Premium to industry partner , does not arise at all, as the expenses in this case are admittedly not reimbursed in actuals. It becomes imperative to reiterate here that reimbursement in actuals, i.e., without any margin or mark-up is not the only criteria to determine the concept of Pure Agent , and that it involves fulfillment of many other conditions as well, as laid down under rule 33 of the CGST Rules, 2017. Under the facts and circumstances of the case, the appellant does not act as a Pure Agent as far as it relates to the supply involving the sale of Uniforms and shoes and the amount of Insurance Premium to industry partner, and accordingly, the same becomes taxable under the CGST Act, 2017. Conclusion - i) The amount of stipend received from the industry partner by Logskim and paid to trainees without making any deduction, is chargeable to tax under the CGST/TNGST Acts, 2017. ii) The sale of Uniforms and shoes and the amount of Insurance Premium sold to the industry partner is chargeable to tax under the CGST/TNGST Acts, 2017.

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• 2025 (3) TMI 469
  Input tax credits - inputs/capital goods or input services - items used in Design, engineering, Installation of 10.2 MW of the Solar Power plant as per MNRE IEC standards wherein the generation of electricity from such solar plant is used for captive consumption - input Tax credit for inputs and services for running the solar plant - HELD THAT:- The solar power generated shall not be consumed by the applicant directly at the place of generation of electricity which is different from the place of consumption. Hence, the applicant is left with the only option to transfer/supply the electricity generated to TANGEDCO through grid which in turn is given as credits by TANGEDCO for the amount of electricity generated. Further they have informed that there is no banking agreement with TANGEDCO to store the surplus or deficit, if any. In the absence of banking agreement with TANGEDCO, any surplus/excess power generated shall get lapsed - As the Solar Power Plant forms part of the business of the applicant, the generation and supply of electricity is treated as a supply as per the GST provisions. Whether, it is taxable supply of goods or services or not. As per the tariff, electricity is goods classifiable under HSN 27160000 as specified under First Schedule to the tariff. Electricity is charged to NIL rate of tax in terms of Sl. No. 104 of N/N. 02/2017-CT(Rate) dated 28-06-2017? - HELD THAT:- As per the definition of Exempt supply, supply of any goods or services or both is attracting nil rate of tax. Hence, as per the said definition, the generation and supply of electricity to TANGEDCO which attracts nil rate of tax is an exempted supply and accordingly, all provisions related to exempt supply are applicable. Eligibility of input tax Credit (ITC) on goods and services used or consumed during the setting up for Solar Power Plant - HELD THAT:- In the instant case, as the activity of generation of electricity itself is supply of goods the tax paid on goods and services used and consumed in the setting up of Solar Power Plant is eligible to be taken as ITC. The applicant has stated in the statement of facts that the cost incurred for installation of Solar Power Plant to make it in the present condition and use shall be capitalized in their books of accounts and included in the Fixed Asset Register of the company. In terms of Section 16 (3), when the registered person who is claiming depreciation on the tax component of the cost of capital goods and plant machinery under the provisions of Income Tax Act, 1961, ITC on said tax component shall not be allowed. Here the applicant has not disclosed whether they are claiming/going to claim any depreciation on the tax component of cost of capital goods and plant and machinery classified as Fixed Asset . However, eligibility and the quantum of ITC on the capital goods depends on the fact whether the applicant is claiming depreciation under Income Tax Act or not. The applicant is not eligible for input tax credit on the goods and services exclusively used for the provision of exempt supply namely generation and supply of electricity . Electricity, being a goods charged to Nil rate of tax, is supplied to TANGEDCO which in turn is given as Credit for adjustment towards the power consumed in the factory of manufacture and hence electricity is not captively consumed but the supply is to be treated as exempt supply . As per Section 17 (2) and 17 (3) of the CGST/TNGST Act, 2017 read with Rule 43 (1) (a) of the CGST/SGST Rules, 2017, the input tax credit exclusively used or consumed for the generation and supply of electricity which is an exempted supply is unavailable for availment as input tax credit. Whether the applicant is eligible to take input tax credit for inputs and services for running the solar power plant? - HELD THAT:- The applicant is not eligible to avail the input tax credit on any goods or services exclusively used for running or maintenance of the Solar Power Plant also. Conclusion - i) The activity of the applicant namely, generation and supply of electricity would fall under the scope of supply and as the supply of electricity attracts nil rate of tax, it falls within the definition of exempted supply. The input tax credit on the goods and services used or consumed exclusively for providing exempted supplies are not available for availment and utilisation. ii) The applicant is not eligible to avail the input tax credit on any goods or services exclusively used for running or maintenance of the Solar Power Plant.

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• Income Tax

• 2025 (3) TMI 468
  TP Adjustment - international transaction - Advertisement, Marketing and Promotion [AMP] expenditure incurred would constitute an international transaction as contemplated u/s 92B r.w.s. 92F or not? - ITAT justification in deleting addition on account of expenses incurred by the assessee for advertisement, marketing and promotion [ AMP ] for brand-building for brand owned by the associated enterprise HELD THAT:- Section 92B defines an international transaction , and which is an expression which appears in Sections 92, 92C, 92D and 92E, to mean a transaction between two or more AEs in the nature of purchase, sale or lease of tangible or intangible property, provision of services, lending or borrowing of money or any other transaction having a bearing on the profits, income, losses or assets of such AEs. By virtue of Finance Act 2012, an Explanation came to be inserted in Section 92B, and which now postulates that the expression international transaction would include the purchase, sale, transfer, lease or use of, amongst others, intangible property also. The Explanation thus brings within the fold of an international transaction the use of intangible property and which would necessarily include trademarks, patents, brand names or logos in addition to the words purchase, sale or lease and which formed part of the provision originally. The said Explanation itself came to be inserted by Finance Act, 2012 with retrospective effect from 01 April 2002. The insertion of the Explanation was merely aimed at lending clarity to the use of intangible property and thus sought to allay all doubts that may have existed on account of conflicting judicial interpretation. However, and notwithstanding the insertion of the said Explanation, the Revenue clearly does not stand absolved of proving or establishing the existence of a transaction itself in the first instance. As is manifest from the line adopted by the TPO and which came to be affirmed by the DRP, the Revenue had abjectly failed to analyse or examine the issue in the aforesaid light. The benchmarking analysis was commenced solely on the basis of a perceived excessive expenditure incurred by the respondent assessee with respect to AMP and the consequential invocation of the Bright Line Test. It is this procedure which had fallen for adverse comment of the Court in Maruti Suzuki[ 2015 (12) TMI 634 - DELHI HIGH COURT] Regard must also be had to the fact that the deeming fiction which came to be introduced in Section 92B(2) would undisputedly have no impact or implication since sub-section (2) also speaks of the existence of a prior agreement in relation to the relevant transaction. This quite apart from the fact that the said amendment came to be introduced by virtue of Finance (No. 2) Act, 2014 and with effect from 01 April 2015. The said amendment would thus have no application to the AYs with which we are concerned in these two appeals. We are thus of the firm opinion that the Tribunal was justified in setting aside the orders of assessment for reasons assigned therein and consequently merits no interference. Decided against revenue.

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• 2025 (3) TMI 467
  Challenge to vires to Explanation (v) contained u/clause (26AAA) of section 10 of the Income Tax Act as introduced by way of amendment in terms of the Finance Act, 2023, insofar as it deals with the definition of the term, Sikkimese - According to the writ petitioner, it is the responsibility of the State of Sikkim to ensure protection of the old laws including its preservation/protection as provided under Article 371F (k) of the Constitution of India, in public interest. HELD THAT:- On a careful reading of the clarification provided as per the Press Release dated 04th April, 2023, makes it abundantly clear that the term Sikkimese defined for the purpose of clause (26AAA) of section 10 of the Income Tax Act, 1961, by the Finance Act, 2023, is only for the purpose of Income Tax Act, 1961, and not for any other purpose (emphasis supplied). We do not find that this clarification or explanation touches upon the sanctity of the rights and privileges reserved for genuine indigenous Sikkimese which are carefully preserved and protected under Article 371F (k) of the Constitution of India. We do not find any justifiable reason to entertain the writ petition.

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• 2025 (3) TMI 466
  Nature of receipt - excise duty exemption - revenue or capital receipt - HELD THAT:- The purpose test as formulated in the case of Sahney Steel Press Works Ltd. [ 1997 (9) TMI 3 - SUPREME COURT ] it is seen that the excise duty exemption was so granted for the purpose of industrializing the States of Uttaranchal and Himachal Pradesh and for generation of employment in the States. Therefore, the said excise duty exemption granted to the assessee for its Rudrapur Plywood Unit and Rudrapur MDF Unit, would necessarily be a capital receipt in the hands of the assessee. Decided in favour of the assessee, herein. Excise duty exemption adjustment in computation of MAT u/s 115JB - In view of the conclusions reached by us with regard to the substantial question of law No. 1, we are of the considered view that the substantial question of law No. 2 being a consequential one; the excise duty exemption being purely a capital receipt, not chargeable to tax under the normal provisions of the Income Tax Act, 1961, it would also not be permissible to reckon the same for computation of book profit under the provisions of Section 115-JB of the Act of 1961.

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• 2025 (3) TMI 465
  Rejecting the petitioner s request for relaxation of the conditions under Rule 9C of the Rules read with Section 72A seeking permission to carry forward all losses of the companies that had amalgamated with the petitioner, for an extended period of three years Petitioner s request for relaxation of the conditions under Rule 9C of the Rules has been declined on the ground that the petitioner had failed to achieve the requisite level of production capacity even during the extended period of three years as was sought by the petitioner. HELD THAT:- The objective of Section 72A of the Act is not to extend the benefit of carry-forward of unabsorbed losses to the amalgamated company for the purposes of encouraging simplification of corporate structure; it is to extend the benefit to encourage scheme for genuine business purpose and only in cases where the industrial undertakings of the amalgamating company are revived and/or continued. In the present case, the petitioner had not sought any relaxation of the said conditions either at the time of amalgamation or immediately thereafter. The petitioner had made its first application seeking relaxation of the conditions under proviso to Rule 9C of the Rules, one day prior to the expiry of period of four years from the date of amalgamation, that is, on 30.03.2011. It is material to note that on that date, the petitioner had sought an extension of three years to achieve the installed capacity of 50% production. Admittedly, the threshold capacity was not achieved within the extended period, that is within 31.03.2014. However, the petitioner s application for relaxation continued to be pending and was not disposed of. The petitioner once again sent a communication modifying its request to relax the condition regarding achieving the level of production to 40% instead of 50% as required and sought extension of further one year, that is, till 31.03.2012. It is material to note that the said request was made by a separate application in response to proceedings/communications in relation to the petitioner s earlier application for extension of time for achieving the threshold production level of 50% of the installed capacity. The petitioner subsequently modified the said request by a letter dated 21.06.2018 which was sent in continuation of its application dated 31.03.2011, inter alia, praying that the condition regarding the level of production be reduced from 50% to 36% or in the alterative, relax the production level from 50% to 42% with extension of time from March, 2011 to March, 2012. We are unable to accept that the decision to reject the petitioner s request is perverse or based on extraneous considerations. The petition is unmerited and is, accordingly, dismissed.

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• 2025 (3) TMI 464
  Penalty u/s 271(1)(c) - addition on account of unaccounted investments on account of unexplained cash credits on account of unaccounted income - HELD THAT:- AO levied penalty holding that the assessee has committed default u/s 271(1)(c) of the Act by way of furnishing inaccurate particulars of income and committed default within the meaning of Section 271(1)(c) of the Income-tax Act, 1961 . On this issue, we straight away find that the AO vide penalty order u/s 271(1)(c) imposed penalty on additions made alleging furnishing of inaccurate particulars of income . Apparently, the basis and foundation for imposition of penalty has been altered by the AO. It is thus ostensible that findings recorded by the Assessing Officer show that penalty has been levied on a different premise and the original satisfaction for imposition of penalty has been altered or modified. Where the original basis of imposition of penalty has been altered in a significant way by the Assessing Officer, the very basis for sustaining the penalty is rendered non-existent. Needless to say, the imposition of penalty is solely dependent upon the satisfaction of the Assessing Officer and non-else. The ground for action by Assessing Officer was allegation of concealment initially but finally ended up in levy of penalty for furnishing inaccurate particulars of income . Thus, in the absence of continuity in the findings of the Assessing Officer, the order of the penalty passed by the Assessing Officer is liable to be struct down on this ground alone Reliance is being placed to the decision of New Sorathia Engineering Company [ 2006 (1) TMI 71 - GUJARAT HIGH COURT] and Manu Engineering Works[ 1978 (9) TMI 18 - GUJARAT HIGH COURT] . Similar view has been taken in Gian Chand Batia [ 1996 (11) TMI 97 - ITAT ALLAHABAD-B] . Therefore, where Assessing Authority itself is not sure about nature of default, the penal action u/s 271(1)(c) of the Act is not sustainable in law. Appeal of the assessee is allowed.

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• 2025 (3) TMI 463
  Entitlement to interest u/s. 244A(1)(b) on the amount of excess DDT refunded from 01.10.2010 to the date the refund was granted - HELD THAT:- AO has treated DDT as being covered under the provision of sec.244A(1)(a)/(aa) and hence applied the proviso to these clauses. It is known that the accounting of DDT is done separately from advance tax or self-assessment tax. DDT is payable at the time of declaration/distribution or payment of any dividend whichever date is earlier. It cannot be termed as an advance tax as envisaged u/s 207 or a self-assessment tax as per Section 140A. Hence, the interest on refund related to DDT paid in excess is covered under the residual clause as envisaged u/s 244A(1)(b) of the Act and is therefore eligible for interest u/s 244A(1)(b) of the Act on the amount of excess DDT refunded from 01.10.2020 to the date the refund was granted. Ergo, the decision of the Ld. CIT(A) is affirmed. Appeal of the Revenue is dismissed.

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• 2025 (3) TMI 462
  Rectification of mistake u/s 154 - protective addition in the hands of assessee when substantive addition made in the hands of Orient Craft Limited - HELD THAT:- Rendering of services on job work basis by M/s Orient Craft Limited was held to be genuine and the addition made substantively in the case of M/s Orient Craft Limited has been deleted by the Tribunal. The miscellaneous application filed by the Revenue against the order of the Tribunal in the case of Orient Craft Limited was also dismissed. The protective addition made in the hands of the assessee was originally deleted by the CIT(A) except for the commission on estimate basis of 5% which was sustained by the Ld. CIT(A) and the Revenue did not prefer any appeal. This order of the Ld. CIT(Appeals) was challenged by the Assessee before the Tribunal and the Tribunal allowed the appeals of the assessee deleting even the commission expenses which was sustained by the CIT(Appeals). Meanwhile the Revenue filed miscellaneous application before the Ld. CIT(Appeals) stating that the Tribunal deleted the substantive addition made in the hands of Orient Craft Limited and, therefore, the protective addition made in the hands of the assessee be revised. CIT(Appeals) based on the rectification application filed by the Assessing Officer modified his order reviving the protective addition along with the disallowance of 5% towards commission as was done by the Assessing Officer in the assessment originally. In our view this is beyond the scope of provision of section 154 and also beyond the jurisdiction of Ld. CIT(Appeals). Thus, we quash the orders of the Ld. CIT(Appeals) passed u/s 154 r.w.s. 250(6) of the Act dated 28/03/2024 for the assessment years. Appeals of the assessee are allowed.

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• 2025 (3) TMI 461
  Accrual of income in India - fee received towards services rendered under group service agreement - FTS as provided under Article 13(4) of India UK DTAA - HELD THAT:- As facts being identical respectfully following the order of the Tribunal for the assessment years 2018-19 and 2019-20 we hold that the receipts towards services rendered under Intra Group Service Agreement would not fall within the definition of FTS as provided under Article 13(4) of India UK DTAA and hence not taxable at the hands of the assessee in India. Coming to fee received towards advisory services rendered by the assessee to RCIPL it is observed that the assessee has rendered the following services of Identifying potential buyer for the client, Provided support in preparation of management presentation and other material for distribution to potential buyers, all of which was based on the inputs received from the client and supported in coordination of marketing exercise and Supported RCIPL in advising on potential transaction options and evaluation of pros and cons of such options. On a reading of the assessment order and the DRP directions, we found that none of the authorities have given any reasoning as to how the advisory services rendered by the assessee to RCIPL during the year under consideration satisfies make available clause and is taxable as FTS under Article 13 of the India UK DTAA. In our considered view none of the above services rendered by the assessee to RCIPL suggest that such services provided by the assessee resulted in transfer of technical knowledge, knowhow, skill etc. and fulfills the make available clause under Article 13(4)(c) of India UK DTAA. Therefore, the reasoning and the findings given by the Tribunal for the assessment years 2018-19 and 2019-20 applies even for the fees for advisory services and, therefore, we hold that such receipts also would not fall within the definition of FTS as provided under Article 13(4) of India UK DTAA. Ground nos. 2 3 are allowed.

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• 2025 (3) TMI 460
  Unexplained cash deposit - assessee failed to justify the source of such cash deposits made by him - assessee explained that the cash deposits were from cash in hand and gifts received from the father, including a substantial amount received through cheque HELD THAT:- As the father has gifted the assessee Rs.5 lac by way of cheque and rest amount by cash at different intervals such cash gift was questioned by Revenue which is not found to be acceptable as the desire of a father how he would support his son either gifting him lump sum amount or at intervals is his prerogative and cannot be doubted by Revenue in the absence of any negative evidence in support of such finding made. Thus, keeping in view this particular aspect of the matter, without any cogent reason assigned by the Revenue, the addition confirmed by the CIT(A) is found to be not sustainable and thus, liable to be quashed. Appeal of the assessee is allowed.

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• 2025 (3) TMI 459
  Addition u/s 69A - unexplained jewellery out of the total gold jewellery and silver article found from the locker - HELD THAT:- It is a matter of fact that the said Sh. S. S. Lal had already filed affidavit before the AO on his behalf stating that he along with his spouse have for jointly gifted 300 gram jewellery to the Assessee which has been accepted. There is no such bar on late Vimla Devi gift additional 350 grams jewelery on her behalf apart from gifting 300 grams of jewellery jointly along with husband. On keeping the relationship between the donor and the Assessee in mind and we are of the opinion that the CIT(A) committed error in rejecting the claim of the Assessee regarding 350 grams jewellery without appreciating the facts narrated in the affidavit. In respect of the gold jewellery of 27.9 grams are concerned, the same has been valued at Rs. 82,703/-. Considering the statues of the family, which is admittedly been searched, the authorities below have committed error in doubting the same. In any case, the said 27.900 grams could have been accepted as Stridhana . Regarding the silver jewelry of 85.5 grams are concerned, as per the valuation the same is valued at Rs. 3,420/-, however, the AO committed error in valuing the said silver item at gold rates. Considering the smallness of the amount which is valued we are of the opinion that the Lower Authorities have committed error in doubting the same. Appeal of the Assessee is allowed.

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• 2025 (3) TMI 458
  Disallowance u/s. 14A r.w.r. 8D while computing income under the normal provisions of the Act, as also, while computing book profit u/s. 115JB - HELD THAT:- Disallowance u/s. 14A r/w Rule 8D in a particular assessment year cannot exceed the quantum of exempt income earned in the said year. Therefore, the disallowance made by the A.O. u/s. 14A read with Rule 8D could not have exceeded the quantum of income earned by the assessee. No infirmity in the decision of the first appellate authority in deleting the disallowance made u/s. 14A read with Rule 8D, while computing income under the normal provisions of the Act. Insofar as, similar disallowance made while computing book profit u/s. 115JB of the Act, we concur with the decision of first appellate authority that since the provisions contained u/s. 115JB do not provide for any disallowance with reference to section 14A read with Rule 8D, no such disallowance could have been made. In view of the afore-said, grounds are dismissed. Disallowance made u/s. 69A - FAA held that assessee had not received any cash compensation as alleged by the A.O., deleted the addition - HELD THAT:- The email communication cannot be considered as an evidence, demonstrating cash compensation transaction between the assessee and another Indian company. We have further observed, the first appellate authority has recorded a factual finding that in course of assessment proceeding, the A.O. had not made any independent enquiry either with Biacon Textile Ltd. or its parent company in Italy. When the assessee has denied of receiving any cash compensation, the logical thing to do for the A.O. was to make enquiry and bring enough corroborative evidence on record to prove receipt of cash compensation by taking up enquiry with the other party, who, allegedly paid cash compensation. Admittedly, no such enquiry has been taken up by the AO, to elicit the actual facts. Thus, in absence of any corroborative evidence on record to back his finding that the assessee has actually received the cash compensation no addition can be made merely on conjectures and surmises. Therefore, we uphold the decision of the first appellate authority on the issue. Ground raised is dismissed. Disallowance made u/s. 80IA - undertaking /unit was acquired by the assessee through a slump sale - CIT(A) deleted addition - HELD THAT:- As far as the claim of deduction u/s. 80IA for the unit at Vapi is concerned, the finding of the A.O. is factually incorrect. Hence, unacceptable. Therefore, the claim of deduction u/s. 80IA of the Act in respect of Captive Power Plant at Vapi land is clearly allowable. Insofar as, Captive Power Plant at Anjar is concerned, acquired through slum sale, the facts on record clearly reveals that the undertaking was eligible for deduction u/s. 80IA due to fulfillment of the conditions mentioned in the said provision. Merely because of change of the ownership of the undertaking it would not get disentitled from availing deductions u/s. 80IA of the Act for remaining years for which deduction has not been claimed. As rightly observed by the first appellate authority, deduction u/s. 80IA of the Act is qua undertaking and not qua the assessee. Since, the Revenue has not brought on record any cogent material to controvert the factual findings of the first appellate authority, while deciding the issue, we are inclined to uphold the decision of first appellate authority by dismissing the ground raised.

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• 2025 (3) TMI 457
  Reopening of assessment - reason to believe - non independent application of mind - HELD THAT:- AO had proceeded to reopen the case of the assessee by merely relying that the information, either received from Directorate of Income-tax (Systems) wherein the case of the assessee was considered to be a potential case for escapement or the Investigation Wing report arising out of search and seizure operations in case of Kundu group of Rohtak on 25.02.2021. There was no application of independent mind on the details of transaction which were reported by assessee and which allegedly escaped the reporting. AO was completely unmindful of the fact that some of these transactions were very much part of the computation filed by the assessee and mentioned that there was complete un-reporting of these transactions. We are also convinced that if the reopening was on the basis of the search and seizure operations carried out in the case of Kundu group of Rohtak and which was the foundation for issuing notice u/s 148 of the Act, then, in that case, the provisions of section 153C would have come into effect and the case of the assessee could not have been on the basis of the provisions of section 147/148 of the Act. Challenge of assumption of jurisdiction in the case of the assessee u/s 147/148 raised by the assessee vide jurisdictional grounds deserve to be sustained.

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• 2025 (3) TMI 456
  Reopening of assessment - absence of issuance of notice u/s. 143(2) - HELD THAT:- AO has not issued notice u/s. 143(2) of the Act and has not considered the return of income filed in response to notice u/s. 142(1) of the Act. The above provisions of section 143(2) clearly stipulate the legal necessity of issuance of notice u/s. 143(2) of the Act to complete the assessment. It is an accepted legal proposition that where the return of income has been filed in response to notice u/s. 148 the provisions of the Act shall apply as if such return was a return required to be furnished u/s.139 of the Act. In the instant case, AO did not consider the return of income filed by the assessee on 23/09/2021 stating that the return filed by the assessee is beyond the stipulated time frame of 30 days as specified in the notice u/s. 148 for filing the return of income. In our opinion, the return of income even though filed belatedly would still qualify as return furnished u/s.139 and should be taken on record by the Ld. AO. In the instant case, AO in his order has stated that since the assessee did not furnish the return of income within the time limit specified in the notice u/s 148 no notice u/s. 143(2) of the Act was issued to the assessee. The failure of the AO to issue notice u/s. 143(2) of the Act, prior to finalizing the re-assessment order, cannot be curable by the provisions of section 292BB of the Act. Thus notice u/s.143(2) of the Act presupposes the assessment order, we are of the considered view that the assessment order passed by the Ld. AO u/s. 147 r.w.s 144 r.w.s 144B in the case of the assessee is bad in the eyes of law and cannot be sustained. Decided in favour of assessee.

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• 2025 (3) TMI 455
  Penalty u/s. 271(1)(c) - income admitted by the assessee during the survey proceedings - HELD THAT:- Assessee has declared the additional income which was accepted by the AO and brought to tax. AO cannot impose penalty u/s. 271(1)(c) of the Act based on the voluntary disclosure by the assessee. AO has also not brought on record any corroborative evidence but has purely proceeded to levy the penalty based on assumptions that the assessee has concealed the income or furnished the inaccurate particulars of income while filing the original return of income wherein if the survey was not conducted on the assessee, this income would not have been admitted by the assessee. There cannot be any penalty based on surmises, conjectures and possibilities. While invoking the penalty provisions of section 271(1)(c) of the Act it has to be construed strictly. Unless it is found that there is an actual concealment or non-disclosure of the particulars of income, penalty cannot be imposed. In the instant case, there is no such concealment or non-disclosure as the assessee has made a complete disclosure in the return of income offered, surrendered the amount for the purpose of tax. The Explanation-5 and 5A to section 271(1) of the Act are also an exception to the Rule that the income is ultimately brought to tax is declared in a return of income, there can be no question of treating the assessee as having concealed particulars of income or furnished inaccurate particulars of income. Decided in favour of assessee.

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• 2025 (3) TMI 454
  Reopening of assessment u/s 147 as barred by limitation - scope of extended period prescribed under the TOLA - assessee is a beneficiary of bogus capital gains from transaction in penny stocks - HELD THAT:- From the plain reading of Section 149 of the Act, prior to its amendment by the Finance Act, 2021, it is evident that the same provides period of 4 years, up to 6 years, and up to 16 years for issuance of notice u/s 148 of the Act, provided the conditions laid down therein are satisfied. In the present case, it cannot be disputed that the time limit of 4 years from the end of the relevant assessment year, i.e., assessment year 2015-16, expired on 31.03.2020, and the period of 6 years from the end of the relevant assessment year expired on 31.03.2022. Therefore, even if the submissions of the learned DR that the extended time period provided under the TOLA is applicable to the present case is accepted, it is pertinent to note that in the present case, the time period covered under the provisions of the TOLA only includes 30.03.2020, i.e., 4 years from the end of the relevant assessment year, as the period of 6 year from the end of the relevant assessment year expired on 30.03.2022, which is beyond the period from 20.03.2020 to 31.03.2021. We find that while examining the validity of notices issued from 01.04.2021 to 30.06.2021 under the old regime, the Hon ble Supreme Court in Rajeev Bansal [ 2024 (10) TMI 264 - SUPREME COURT (LB)] , analysing the interplay of Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT] with the TOLA held that the surviving time under the Act read with the TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notice, including issuance of re-assessment notice under section 148 of the Act under the new regime. We find that the Revenue had only 15 days (i.e., between 16.06.2021 to 30.06.2021) to issue notice under section 148 of the Act of the new regime in the present case, i.e. till 25.06.2022, after receipt of the response from the assessee to the show cause notice under section 148A(b) of the Act on 10.06.2022. However, undisputedly, in the present case, the notice under section 148 of the Act was issued on 29.07.2022, i.e., 34 days after the surviving/balance time period as per the directions of the Hon ble Supreme Court in Rajeev Bansal (supra). Notice u/s 148 of the Act in the present case was issued beyond the time period provided under the Act. Decided in favour of assessee.

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• 2025 (3) TMI 453
  TP Adjustment - comparable selection - HELD THAT:- Tata Elxsi Limited owns significant intangible assets which contributes to its revenue. Assessee-company is a simple captive service provider to it s AE, whereas, Tata Elxsi Limited is a company which provides a software development services to multiple segments and to different verticals of industry. Therefore, the said company cannot be comparable to assessee-company. Persistent Systems Limited is engaged in diversified activities, whereas, the assessee company engaged in providing software development services to it s AE on cost plus mark-up basis as a captive service provider and, therefore, in our considered view, Persistent Systems Limited cannot be compared with the appellant-company. Larsen Toubro Infotech Limited - Once a particular company is a part of comparable selected in it s TP documentation by the appellant-company, it cannot be excluded at subsequent stage merely on the basis of some decisions of Tribunal, unless the appellant-company makes out a case that such company is functionally dissimilar to that of the appellant-company. Therefore, we are of the considered view, that there is no merit in the arguments advanced by Assessee for exclusion of Larsen Toubro Infotech Limited from the list of comparables. Infobeans Technologies Limited - No doubt, the appellant seeks to exclude Infobean Technologies Limited from the list of comparables on functional dissimilarity, but, on perusal of functions performed by the appellant company, when compared to Infobean Technologies Limited, we find that largely the functions performed by both the companies are similar and the dissimilarities are miniscule and insignificant. We find that Infobeans Technologies Limited is engaged in the provision of software development services. Therefore, in our considered view, once a particular company is a part of comparable selected in it s TP documentation by the appellant-company, it cannot be excluded at subsequent stage merely on the basis of some decisions of Tribunal, unless the appellant-company makes out a case that such company is functionally dissimilar to that of the appellant-company. Therefore, there is no merit in the arguments advanced by Assessee for exclusion of Infobeans Technologies Limited. Infosys Limited is a giant company carries huge brand value which is evident from the report of brand financials where the total value of brand of Infosys Limited was at USD$ 3414 million. We further note that the company incurred significant amount of expenditure on R and D activities which is more than the 1000% of the turnover of the appellant-company. From the nature of services rendered by Infosys Limited and it s scale of operations, in our considered view, it cannot be compared with appellant-company which is a capitive service provider to it s AE on cost plus mark-up. Mindtree be excluded on the ground that 46% of revenue is from onsite activity which is over and above the threshold limit of 25% of total revenue. We direct the AO/DRP to exclude Mindtree Limited from the list of comparables on functional dissimilarities. Cybage Software Private Limited - Based on information provided in annual report, it cannot be said that the functions performed by Cybage Software Private Limited is altogether different from the appellant-company, more particularly, when the broader services provided by both the companies are similar to software development services. Therefore, in our considered view, there is no merit in the arguments advanced by the Learned Counsel for the Assessee for exclusion of Cybage Software Private Limited from the list of comparables. We, therefore, reject the arguments of the appellant-company Akshay Software Technologies Limited fails onsite revenue filter which is evident from the annual report where it derives revenue from export of software services which is more than 90% of the total revenue than that of the appellant-company. ERP implementation and support involves personnel from professional domain and software domain and, therefore, when a company involved in providing ERP solutions, it cannot be compared with a company which is providing software services to it s AE as captive service provider. DRP observed that there is no segmental information available for comparison of software development services. Therefore, we are of the considered view that Akshay Software Technologies is not comparable to appellant-company. Maveric Systems Limited - Once the company is functionally similar to appellant company, the same cannot be rejected on the basis of one filter i.e., R and D expenditure above tolerance limit. Therefore, we are of the considered view that the DRP/TPO erred in not including Maveric Systems Limited from the list of comparables and thus, we direct TPO/AO to include. Harbinger Systems Pvt. is engaged in software development services. Once a particular company is functionally similar to the appellant-company, then such company cannot be rejected on the ground of data not available in prowess database/search matrix. Although the learned DRP/TPO has not included Harbinger Systems Pvt. Limited on the ground of data not available in prowess database/search matrix, but, in our considered view, once the company is functionally similar to appellant company, the same cannot be rejected on the basis of prowess database/search matrix. Appeal of the assessee is partly allowed.

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• 2025 (3) TMI 452
  Disallowance u/s 14A read with Rule 8D - Assessee submitted that interest free own funds are available and exceeding the investment - HELD THAT:- As per the chart submitted by the Assessee, the investment has been made in the entities controlled by the Assessee, therefore, the Ld. Assessee s Representative contended that no expenditure is required to earn any dividend income as the same are not regular investment/traded in stock exchange. Further, the interest free own funds are available which is exceeding the investment, the said fact could be corroborated from the audited financials. By following the ratio laid down in the case of South Indian Bank Ltd. [ 2021 (9) TMI 566 - SUPREME COURT] we delete the disallowance made by the A.O. u/s 14A read with Rule 8D (2) (ii). Additional claim which was not made in the revised return of income - Nature of receipt - whether the incentives granted in the form of Reward to the Assessee as per PTF Policy of 2015 to 2020 being an eligible export under PTP Policy is chargeable to the tax or not? - Reward under MEIS Scheme as capital receipt in the computation of the total income under the normal provision of the Act as well as in computing the book profit u/s 115JB - HELD THAT:- As relying on Pruthvi Brokers and Shareholders [ 2012 (7) TMI 158 - BOMBAY HIGH COURT] we find no merit in the contention of the Ld. Departmental Representative that the Assessee cannot make additional claim which was not made in the revised return of income. Nature of receipt - Export incentives under MEIS are incentives granted in the form of Reward as per FPT Policy 2015 to 2020 to the eligible exports under FTP Policy, which being not an assistance received by the Assessee for export under the scheme of Government, but the same is a Reward for efforts undertaken to enhance the exports and considering the purpose of the scheme and by relying on the order of Eastman Exports Global Clothing Pvt. Ltd. [ 2024 (10) TMI 740 - ITAT CHENNAI] we are of the opinion that the aforesaid Reward is not chargeable to tax being capital in nature under the normal provisions of the Act. we allow Ground of the Assessee and direct the A.O. to allow the claim of the Assessee in terms of the observation made hereinabove. MAT computation - As relying on the ratio laid down in the case of Ankit Metal and Power Limited [ 2019 (7) TMI 878 - CALCUTTA HIGH COURT] wherein it is held that interest subsidy and Power subsidy being capital receipts could not form part of book profit u/s 115JB of the Act, we direct the A.O. to exclude the amount received by the Assessee under MEIS being capital receipt in computing book profit u/s 115JB of the Act. Accordingly, we allow the Ground No. 2 of the Assessee.

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• 2025 (3) TMI 451
  Addition on account of unaccounted income - notings of on-money receipt in cash in the documents seized from the premises of the assessee - HELD THAT:- Only because of registration of the impugned property subsequently in the name of some other persons, the receipt of cash by assessee from the original/initial buyer cannot be ignored. There is no evidence that the cash was returned by assessee to Dr. Laxmichand and Shri Trilokchand Kamdar. Therefore, the request of the ld. AR to reduce the aforesaid amounts from the receipt of on-money in cash cannot be accepted. We do not find any infirmity in the finding of the CIT(A) in rejecting similar claim during the appellate proceedings before him. Regarding request of the ld. AR to reduce Rs. 10,00,000/- from the addition of Rs. 24,42,10,934/- on account of receipt of on-money in cash, the CIT(A) has given a categorical finding that the terms of payments were subsequently changed and Mrs Maya Garg has paid Rs. 10 lakhs more in cheque and reduced the cash component by same amount. As the total amount paid by Mrs Maya Garg has remained the same and only the cash component has been reduced due to increase of equivalent amount in cheque, the finding of the CIT(A) cannot be faulted with. Accordingly, the ground of revenue is dismissed. Whether the entire receipt in cash should be taxed as income of the assessee? - Conclusion of the AO that there is no evidence of unaccounted cash expenses is factually incorrect. Having found that there are evidences indicating expenses in cash, it would be proper to estimate the net income embedded in the gross cash receipt. The CIT(A) has estimated the same at 50% of the gross cash receipt. This is over and above net profit of 55.43% shown by assessee in the return of income filed u/s 139. The assessee has offered additional income of Rs. 10,79,13,346/- which comes to 44.37% of the gross cash receipts. The estimation of net profit is basically a factual issue and the rate of profit would vary from case to case depending upon the facts involved in each case. In the present case, appellant has himself declared profit at 45.83% on gross receipt. However, the CIT(A) has taken the gross receipt at Rs. 24,32,10,934/- and estimated net profit @50%. In our considered view, it would be just and reasonable if the profit is taken at 45% of the gross receipt. The ground is partly allowed. Addition on account of profit element of on-money receipt in cash instead of profit declared in the return of income filed u/s 148 - As 47% of the on-money received in cash would be the net income of the assessee for the subject year in addition to the income filed by the assessee u/s 143(3) of the Act. Following the reasons [supra] the AO is directed to add 45% of the on-money and delete the remaining amount. The ground is partly allowed. Validity of issue of notice u/s 148 without providing at least 7 days to reply the notice u/s 148A(b) and the order of CIT(A) confirming that case of the assessee falls under clause (c) of provision 148A - Present case is not a normal re-assessment proceedings but a case where search and seizure operation u/s 132 of the Act had been undertaken after 01.04.2021. Search cases are covered under proviso to section 148A of the Act, which clearly provides that provisions of section 148A of the Act shall not apply. Hence, the case of the appellant is covered under the instances provided in the proviso to section 148A of the Act, whereas the case of Sudman Consultants LLP [ 2024 (3) TMI 1419 - GUJARAT HIGH COURT] is covered under the main provisions of section 148A. Hence, reliance of the ld. AR on these two decisions would not further the cause of the appellant. In view of the clear statutory provisions and facts discussed above, we do not find any infirmity in the order of the CIT(A). Accordingly, the ground raised by the appellant is dismissed. Addition based on noting - Though the period of payment received was as on 31.03.2021, there is a handwritten date of 10.02.2018 against the impugned amount. The assessee claimed that it was a receipt of FY.2020-21 and the same was added by AO in AY.2021-22. CIT(A) has deleted the addition because it would amount to separate addition of the same amount in another assessment year. We do not find any infirmity in the order of CIT(A) because double addition of the same amount is not permissible. This ground No.3 raised by revenue is accordingly dismissed.

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• 2025 (3) TMI 450
  Penalty levied u/s 272B(2) - multiple defaults/offence - assessee neither obtained nor informed to the department PAN of 232 customers to whom jewellery or more was sold, as required u/s 139A(5)(c) - assessee explained that it had reasonable cause for its failure as the requirement for obtaining informing the department of the PAN was introduced w.e.f. 01.01.2016 and thus the financial year 2016-17 was the first year of its operation - as argued that 232 instances constituted a single offence and not 232 separate offences. HELD THAT:- As relying on DHTC Logistic Ltd. [ 2014 (2) TMI 866 - DELHI HIGH COURT] and also in the light of the fact that in assessee s own case the Assessing Officer under identical facts and similar circumstances (for 91 such defaults) imposed penalty of only Rs. 10,000/- u/s 272B and also in the light of the fact that amendment in the section itself was made from September, 2019 inserting the words ten thousand rupees for each such default , we hold that penalty of Rs. 23,20,000/- imposed u/s 272B of the IT Act by the Assessing Officer and confirmed by Ld. CIT(A)/NFAC is not correct. We therefore direct the Assessing Officer to reduce the penalty of Rs. 23,20,000/- to Rs. 10,000/- only. Thus, the grounds raised by the assessee are partly allowed.

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• 2025 (3) TMI 449
  Penalty u/s. 271G - failure to furnish information or documents u/s 92D - assessee is a non-resident company and is a tax resident of Germany - HELD THAT:- As decided in Procter Gamble Home Products (P) Ltd. [ 2019 (9) TMI 1389 - ITAT MUMBAI] While quashing the penalty levied under section 271G of the Act, the Co-ordinate Bench in the aforesaid decision, held that unless and until a specific defect is pointed out in the documents submitted by the assessee under section 92D, penalty under section 271G of the Act cannot be levied. In the absence of any notice issued under section 92D(3) of the Act requiring the assessee to furnish any information or document in respect of international transaction entered into by the assessee, which is sine quo non for initiating the penalty proceedings u/s 271G we are of the considered view that this is not a fit case for levy of penalty u/s 271G of the Act. Accordingly, the sole ground raised by the Revenue is dismissed.

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• 2025 (3) TMI 448
  Assessment u/s 153C - cash transactions were not recorded in the regular books of accounts, which were alleged by the Ld. AO to be unaccounted - AO observed that a statement of Director and former employee of JBL, was recorded u/s 132(4) wherein, she confirmed that both pakka and kaccha transactions undertaken by JBL were documented in the Hazir Johri software. HELD THAT:- Admittedly, the entries reflected in the said software pertains to other unrelated parties with the assessee. Admittedly, the said ledger is a combined ledger account of various transactions pertaining to other unrelated parties with the assessee and contains few transactions pertaining to the assessee. However, there is no concrete material brought on record by the lower authorities to implead assessee with all those transactions. Even for the transactions where assessee s name was mentioned, the revenue was not able to bring any corroborative evidence to prove the nature of such transaction. Hence it could be safely concluded that the assessee had given a plausible explanation about the contents of the said software. Furthermore, as rightly pointed out by the Ld.AR, there is no corroboration of those entries with the bills / vouchers , sales, stock registers etc, showing the cash sales to prove that the alleged cash sales belong to the assessee. Hence those entries cannot be relied upon for making an addition in the hands of the assessee. We also find in the case of Anoop Kumar Soni vs. DCIT [ 2023 (12) TMI 391 - ITAT DELHI] wherein while adjudicating almost similar facts related to search on JBL, the Tribunal held that since the ledger found during the search AP contains the entries of parties other than assessee, then said ledger cannot be said to be belonging to assessee and addition made on the basis of assumption was deleted. Similar view was taken by this Tribunal in the case of Surender Kumar Jain [ 2024 (3) TMI 426 - ITAT DELHI] arising out of search in the JBL, wherein it was held that entries in the Hajir Johri ledger supposedly involving M/s. S.K. Impex, do not prove actual transactions without corroborative evidence such as bills or invoices. Thus we hold that no addition could be made in the hands of the assessee by placing any reliance on Hazir Johri Software - Decided in favour of assessee.

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• 2025 (3) TMI 447
  Disallowance u/s 14A r.w.r. 8D - as argued no satisfaction has been drawn before making the impugned addition - HELD THAT:- The comments of the Ld. AO clearly allude that the Ld. AO is making a conjecture and / or guess and that his conclusions are not based upon any bonafide satisfaction. The contemporaneous law provides for satisfaction and not any presumption. There is a huge difference between satisfaction of the officer and presumptions. Whereas, latter can be a case of the guess work, the former can only be arrived at based upon demonstrative and cogent evidences. Accordingly, we are of the view that the order of lower authority is not based upon correct understanding and appreciation of contemporary statute. The order of lower authority is therefore set aside, and we direct the Ld. AO to delete the impugned addition. Addition on account of commission income - assessee submitted that the AO held that the assessee was entitled for receipt of its commission income on accrual basis and hence he made the impugned addition - HELD THAT:- CIT(A) confirmed the addition, in view of decision of Hon ble jurisdictional High Court dated [ 2011 (7) TMI 514 - DELHI HIGH COURT ] in assessee s own case. Nothing has been brought on record to indicate the order of Hon ble Delhi High Court has been stayed. Thus, decision of CIT(A) is confirmed and all the grounds of appeal raised by the assessee are dismissed. Addition on account of commission income having relation with port charges and other charges - HELD THAT:- AO has the first authority to examine any claim of the assessee qua determination of its correct taxable income. In this view of the matter, we draw strength from decision of Tin Box Company [ 2001 (2) TMI 13 - SUPREME COURT ] Accordingly, we set aside the order of lower authority and direct the AO to examine the details filed by the assessee for the purposes of limited verification and decide the issue in accordance with law. It shall be bounden upon the Ld. AO to provide due opportunity of being heard to the assessee and the assessee shall comply with all the statutory notices. The grounds of appeal raised by the assessee on this issue, is allowed for statistical purposes. Addition on account of treatment of alleged dividend income as interest income - Counsel submitted that the Ld. AO had misdirected himself by treating the impugned exempt dividend income as interest income - HELD THAT:- AO has the first authority to examine any claim of the assessee qua determination of its correct taxable income. In this view of the matter, we draw strength from decision of Tin Box Company [ 2001 (2) TMI 13 - SUPREME COURT ] Accordingly, we set aside the order of lower authority and direct the Ld. AO to examine the details filed by the assessee for the purposes of limited verification and decide the issue in accordance with law. Grounds of appeal raised by the assessee on this issue, is allowed for statistical purposes. Addition invoking provision of Section 40A(2)(b) - amount was incurred for the promotion of another company in which appellant subsequently became a Director - Holding that there was no business expediency u/s 37(1), declared expenditure was disallowed by AO - HELD THAT:- Nobody can claim expenses for services rendered to himself. It was argued that the assessee became the Director of the impugned company subsequently. We have noted that the case of the assessee rest upon very weak arguments. The conclusion drawn by lower authorities on the basis of material available on record, cannot be faulted. Accordingly, we are of the view that there is no case for any intervention to the order of Ld. CIT(A). The grounds of appeal raised by the assessee, is therefore dismissed.

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• 2025 (3) TMI 446
  Addition u/s 68 - share application money/premium received from non-resident investors - details and evidences submitted by the assessee were not considered sufficient by AO to prove the genuineness of the transaction of receipt of share application money/ premium money - CIT(A) deleted addition - HELD THAT:- Having considered the various details furnished by the assessee, we find no merits in the addition made by the AO u/s 68 by considering the share application money received by the assessee as unexplained cash credit, as the assessee has proved the identity and creditworthiness of the investors/shareholders, and the genuineness of the transaction. Accordingly, no infirmity in the impugned order in deleting the addition made by the AO u/s 68 on this issue. As a result, the same is upheld and the grounds raised by the Revenue pertaining to this issue are dismissed. Addition u/s 68 in respect of trade payables - From a plain reading of the provisions of section 68 of the Act, it is evident that where any sum is found credited in the books of the assessee and the assessee offers no explanation about the nature and source thereof or the expansion offered by him is not in the opinion of the AO satisfactory, then the sum so credited may be chargeable to income tax as the income of the assessee. In the present case, it is discernible that the sum that was treated as unexplained credit by the AO and added to the total income of the assessee u/s 68 is not credited in the assessee s books. Rather, the same is the trade payables, i.e. the trade payable amount outstanding in the books of the assessee, in respect of the purchases made by it, and thus the same represents a liability which was required to be paid subsequently. As in Kulwinder Singh [ 2017 (7) TMI 957 - PUNJAB AND HARYANA HIGH COURT] held that provisions of section 68 are not attracted to amount representing purchases made on credits. No infirmity in the findings of the learned CIT(A) in deleting the addition made by the AO u/s 68 of the Act on account of trade payables debited to the profit and loss account of the assessee. Revenue appeal dismissed.

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• 2025 (3) TMI 445
  Disallowance u/s 11(2) - form no.10 was filed after the expiry of time allowed for filing the return of income u/s 139(1) - HELD THAT:- The return filed by the assessee is to be treated as filed within the time allowed u/s 139 of the Act, which includes the return filed u/s 139(1) as well as return of income filed u/s 139(4) of the Act. So far as the filing of form no.10 is concerned during the assessment proceedings on 29.08.2018, we are of the considered view that the late filing of the said form is a procedural delay on the part of the assessee and cannot be used as ground for denying the legitimate exemption u/s 11(2) of the Act. The case of the assessee find force from the decision of M/s Indian Sugar Mills Association [ 2024 (1) TMI 1445 - CALCUTTA HIGH COURT] wherein as held that filing of form no.10B is a procedural provision. Similarly, in the case of Indian Panel board manufacturer [ 2023 (3) TMI 1374 - GUJARAT HIGH COURT ] has held that the non-filing of audit report along with return of income which was at best procedural omission, could never lead to an impediment in law in claiming the exemption. Decided in favour of assessee.

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• Customs

• 2025 (3) TMI 444
  Challenge to detention order - smuggling of contraband - non-application of mind by the detaining authority due to the overlapping charges under clauses (i) to (iv) of Section 3(1) of the COFEPOSA Act - HELD THAT:- The contentions raised by the DRI regarding the all-pervasive role of the detenu and his propensity to indulge in such smuggling activities, detrimental to the interest of the nation was considered in juxtaposition with the contention raised by the accused; on the basis of the investigation carried out thus far. The specific ground raised by the prosecution of apprehension of involvement in similar type of smuggling activity was reckoned by the jurisdictional Magistrate while granting bail and imposing conditions to prevent the detenu from engaging in such smuggling activities. In Ameena Begum v. State of Telangana and others [ 2024 (1) TMI 4 - SUPREME COURT ] it was held held that the observations in Rekha v. State of T.N. [ 2011 (4) TMI 1217 - SUPREME COURT ] held that preventive detention is impermissible when the ordinary law of the land is sufficient to deal with the situation was per incuriam to the Constitution Bench decision in Haradhan Saha v. State of W.B. [ 1974 (8) TMI 104 - SUPREME COURT ], in the limited judicial review available to constitutional courts in preventive detention matters. The Courts would be incapable of interference by substituting their own reasoning to upset the subjective satisfaction arrived at by the detaining authority, especially since preventive detention law is not punitive but preventive and precautionary. Likewise, in the present case, it is not concerned as to whether the conditions imposed by the Magistrate would have taken care of the apprehension expressed by the detaining authority; of the detenu indulging in further smuggling activities. It is more concerned with the aspect that the detaining authority did not consider the efficacy of the conditions and enter any satisfaction, however subjective it is, as to the conditions not being sufficient to restrain the detenu from indulging in such activities. The criminal prosecution launched and the preventive detention ordered are on the very same allegations of organised smuggling activities, through a network set up, revealed on successive raids carried on at various locations, on specific information received, leading to recovery of huge cache of contraband. When bail was granted by the jurisdictional Court, that too on conditions, the detaining authority ought to have examined whether they were sufficient to curb the evil of further indulgence in identical activities; which is the very basis of the preventive detention ordered. The detention order being silent on that aspect, we interfere with the detention order only on the ground of the detaining authority having not looked into the conditions imposed by the Magistrate while granting bail for the very same offence; the allegations in which also have led to the preventive detention, assailed herein, to enter a satisfaction as to whether those conditions are sufficient or not to restrain the detenu from indulging in further like activities of smuggling. Conclusion - The detention order was invalid due to the detaining authority s failure to consider whether the bail conditions were adequate to prevent further smuggling activities. The order of detention is set aside - appeal allowed.

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• 2025 (3) TMI 443
  Territorial jurisdiction of Delhi High Court to entertain the writ petition filed by the petitioner under Article 226 of the Constitution of India - Arising a part of cause of action, and in his submission, material cause of action - Doctrine of forum non-conveniens - Rejection of an application seeking Advance Authorisation for those entities which would fall within the jurisdiction of DGFT Office, Hyderabad - HELD THAT:- It is relevant to note that the doctrine of forum non-conveniens had its origins in Scotland where the Court applied this doctrine as an extension to the plea of forum non-competens, as the parties were not residents of Scotland as held in the case of Vernor vs. Elvies; 6 Disct. Of Dec. 4788 (1610). Thereafter, it appears to have been adopted by the American Courts which developed it further and which was also applied by the Courts in England. Coming closer to home, the Hon ble Supreme Court in the case of Kusum Ingots [ 2004 (4) TMI 342 - SUPREME COURT ] recognised this doctrine and had in fact referred to some judgements rendered by the High Court of Calcutta to opine that even if a small part of cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merits. In appropriate cases, the Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens. Therefore, the argument that this Court can entertain the writ petition since some part of cause of action has arisen in Delhi, would not, ipso facto, confer jurisdiction on this Court, if one were to apply the authoritative ratio above. Whether this Court would be compelled to exercise its discretionary jurisdiction to entertain the present writ petition? - HELD THAT:- The Hon ble Supreme Court in State of Goa [ 2023 (3) TMI 683 - SUPREME COURT] was examining a case where the State of Goa had levied a tax in respect of lottery business being run by the respondent before it in Goa. However, the respondent company was located in the State of Sikkim. Aggrieved by such levy, the respondent company had filed a writ petition before the High Court at Sikkim. The Apex Court opined that the immediate civil consequence arising from the notification impugned therein was that tax @ 14% which was to be paid by the respondent company at Goa. No consequence or effect was felt in Sikkim. In fact it was noticed by the Hon ble Supreme Court that pleadings did not reflect any adverse consequence within the local limits of the territorial jurisdiction of the High Court at Sikkim. Conclusion - This Court would not have the requisite territorial jurisdiction to entertain the present writ petition nor would it be the forum conveniens to decide the lis. Petition dismissed.

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• 2025 (3) TMI 442
  Revocation of customs broker licence - forefeiture of entire amount of security deposit - levy of penalty - violation of Regulation 10(n) of CBLR 2018 - misuse of the export promotion schemes - Does the Customs Broker have to satisfy himself that the documents or their copies given by the client were indeed, issued by the concerned government officers or does the Customs Broker have to ensure that the officers had correctly issued the documents? - HELD THAT:- Regulation 10(n) does not place an obligation on the Customs Broker to oversee and ensure the correctness of the actions by Government officers. Therefore, the verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. This can be done through online verification, comparing with the original documents, etc. and does not require an investigation into the documents by the Customs Broker. Therefore, the appellant was correct in verifying the GSTIN issued by the department on the GST portal. The presumption is that a certificate or registration issued by an officer or purported to be issued by an officer is correctly issued. Section 79 of the Evidence Act, 1872 requires even Courts to presume that every certificate which is purported to be issued by the Government officer to be genuine. The onus on the Customs Broker cannot, therefore, extend to verifying that the officers had correctly issued the certificate or registration. Of course, if the Customs Broker comes to know that its client has obtained these certificates through fraud or misrepresentation, nothing prevents it from bringing such details to the notice of Customs officers for their consideration and action as they deem fit. However, the Customs Broker cannot sit in judgment over the certificate or registration issued by a Government officer so long as it is valid. In this case, there is no doubt or evidence that the IEC, the GSTIN and other documents were issued by the officers. So, there is no violation as far as the documents are concerned. The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations. Therefore, once verification of the address is complete, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker. Conclusion - The appellant Customs Broker did not fail in discharging its responsibilities under Regulation 10(n). The impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n) because the exporter was found to not exist during subsequent verification by the officers. The impugned order cannot be sustained - Appeal allowed.

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• 2025 (3) TMI 441
  Interpretation of Section 114A of the Customs Act, 1962 - whether the amount of penalty under this section should be equal to the sum of custom duty and interest on this duty? - short payment of Customs Duty - HELD THAT:- The issue in the present appeal is squarely covered by the decision of this Tribunal in the case of M/s Khanna Traders Engineers [ 2024 (11) TMI 1433 - CESTAT ALLAHABAD] . There are no merits in the appeal filed by the revenue to the extent that interest amount should have been added to the duty short paid while imposition of penalty under Section 114A of the Act. Tribunal and even High Court has repeatedly emphasized that the word used in the section is or and not and . In case of Sony sales Corporation [ 2021 (3) TMI 174 - KARNATAKA HIGH COURT] Hon ble Karnataka high Court has held that From perusal of the relevant extract of Section 114A, it is evident that the language employed by the Legislature is plain and unambiguous and the provision contains a positive condition with regard to levy of penalty equal to duty or interest and does not contain any negative condition. Conclusion - The penalty should be equal to the duty or interest as determined, and the word or in the provision cannot be interpreted as and. There are no merits in the appeal filed by the revenue - Appeal filed by the revenue is dismissed.

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• Insolvency & Bankruptcy

• 2025 (3) TMI 440
  Approval of resolution plan of the Corporate Debtor as submitted by the Resolution Professional - claims of the Operational Creditors did not receive their dues or not - material irregularities in the exercise of powers by the RP in the CIRP proceedings or not - Appellant has assailed the impugned order approving the resolution plan on the ground that the plan was approved by the Adjudicating Authority after expiry of 330 days of CIRP period - HELD THAT:- There is no doubt that in terms of Section 24(3)(c) of the IBC, it is the duty of the RP to give notice to the Operational Creditors or their representatives regarding the CoC meetings if the amount of their aggregate due is not less than 10% of the debt. It is also well settled that such Operational Creditors whose aggregate due is not less than 10% of the debt have a right to watch the proceedings of the CoC and express their views in the meetings without however any right to vote. In the present case, there is no denial of the fact that the Appellant received notice of the CoC meetings from the RP. As the Appellant was kept informed of the CoC meetings and records show their regular participation in such meetings, they had full knowledge of the CIRP proceedings. They were therefore equally aware of the extensions of CIRP time-lines approved by the CoC but these extensions by the CoC were not questioned by them at the appropriate time. The issue was neither agitated before the Adjudicating Authority at the right point of time and is now being raked up belatedly. In the present case, the 23rd CoC meeting on 04.12.2023 had taken note of the fact that it was in an advanced stage of considering the resolution plans before it and since the extended CIRP period was getting expired on 10.12.2023, the CoC approved seeking further extension of CIRP period. Clearly enough, CoC having taken a considered decision in this regard, this constituted sufficient grounds for the Adjudicating Authority to extend further time beyond 330 days for completion of the CIRP process. The entitlement of an Operational Creditor is to receive the amount as provided under Section 30(2)(b) of IBC which is not less than the amount which the Appellant would have been entitled to receive in the event of a liquidation of the Corporate Debtor under Section 53 of the IBC - the resolution plan cannot be said to be in dissonance with the provisions of Section 30(2)(b) of IBC. The resolution plan has been approved with a majority of 97.36% of vote share. The plan having been approved by majority of votes, the Operational Creditor is clearly bound by the approved resolution plan. The Adjudicating Authority did not commit any error while approving the resolution plan after noting its satisfaction at para 26 of the impugned order about the plan being in compliance of the provisions of the IBC in terms of Section 30(2) of the IBC. Law is now well settled that the jurisdiction of the Adjudicating and Appellate Authorities to interfere with approval of the resolution plan is limited. The scope of judicial review is confined to the provisions contained in Section 30(2) of the IBC for the Adjudicating Authority and Section 30(2) read with Section 61(3) for the Appellate Authority. There is only limited review which can be exercised by the Adjudicating Authority or the Appellate Authority. There can be no fetters on the commercial wisdom of CoC. Conclusion - There is neither any material irregularity nor contravention of any provisions of law by the CoC which has been justifiably substantiated by the Appellant. In the present case when no valid grounds have been made out to challenge the approval of the resolution plan, the legislative fiat of the IBC that the Adjudicating Authority cannot trespass upon the business decision of the CoC holds ground. There are no doubts in our mind that the plan has been rightly approved by the Adjudicating Authority. There are no good ground to interfere with the impugned order approving the resolution plan. There is no merit in the appeal. The Appeal is dismissed.

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• 2025 (3) TMI 439
  Refusal to entertain the belated claims of the Appellants - HELD THAT:- When the plan has already been approved by both the CoC and the Adjudicating Authority, it cannot be reopened now on the basis of claims being belatedly agitated by the Appellant who for no justifiable reasons had clearly dropped the guard of being vigilant in pursuing his claims within the time-lines laid down by IBC. Any indulgence shown by way of belated admittance of claim after the resolution plan is approved by the Adjudicating Authority, is also likely to jeopardise the CIRP since the resolution plan is already under implementation. The Adjudicating Authority has not committed any error in the given facts and circumstances in not acceding to the request of the Appellant for admission of their claims. Conclusion - Reopening the approved resolution plan based on belated claims would jeopardize the CIRP s effectiveness. There are no cogent grounds which warrants any interference in the impugned order - The impugned order passed by the Adjudicating Authority, not suffering from any infirmities, is hereby affirmed - appeal dismissed.

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• 2025 (3) TMI 438
  Admission of Section 7 application filed by the financial creditor - Appellants claimed in the application that Section 7 application was filed fraudulently with malicious intent by financial creditors in collusion with the corporate debtor and its directors - imposition of penalties u/s 65 of the IBC on the financial creditors and the promoters of the corporate debtor for the alleged fraudulent initiation of CIRP - applicability of Rule 59 of the National Company Law Tribunal (NCLT) Rules, 2016 for issuing show cause notices in the context of penalties under Section 65 of the IBC - HELD THAT:- Initiation date has been defined in Section 5(11). From the definition of initiation date , it is clear that initiation is by a financial creditor, corporate applicant or operational creditor only. In Section 65 of the IBC when we examine the expression if any person initiates the insolvency resolution process fraudulently or with malicious intent for any purpose other than for resolution of insolvency , the focus is on the person who initiates the insolvency resolution process - Insolvency resolution process can be initiated under Section 7, 9 and 10 which is also clear from definition of initiation date under Section 5(11) and the scheme of the IBC as captured by Sections 7, 9 and 10. No other person is entitled to initiate insolvency resolution process except financial creditor, operational creditor or corporate applicant. The heading of Section 65 also provides fraudulent or malicious initiation of proceedings . It is not competent to the court to stretch the meaning of expression used by the legislature in order to carry out the intention of legislature. Even the literal construction of Section 65 does not contemplates that penalty can be imposed on any person other than one who has fraudulently or maliciously initiated the proceedings. It is well settled that penal statute are to be strictly construed. Section 65 of the IBC being a penal statute, it is required to be strictly construed and as observed above even a literal reading of Section 65 which is a golden rule of construction of statutory statute, no interpretation can be put on the provisions of Section 65 that penalty can be imposed on any other person except those who have initiated insolvency resolution process fraudulently or maliciously. The submission of the appellant cannot be accepted that in exercise of jurisdiction under Section 65, promoters are also need to be penalised. The next submission which has been pressed by the Appellant is that the Adjudicating Authority by the impugned order has issued notice to the financial creditors which is clear from direction under paragraph 18. It is submitted that the Adjudicating Authority has referred to Rule 59 of the NCLT Rules, 2016 for issuance of notice which Rule is not applicable - Admittedly, show cause notice was issued to the financial creditors in pursuance to the order dated 12.06.2024. The financial creditors to whom the notice has been issued are not aggrieved by the issuance of notice and it is the appellant who has challenged the issuance of notice by the Adjudicating Authority in paragraph 18 of the order. Although Rule 59 is not applicable while issuing notice of penalty under Section 59 and it was open for the Adjudicating Authority to impose penalty under Section 65 without issuing any notice to the financial creditors on the basis of materials on record. However, fact remains that by the impugned order penalty was not imposed. Adjudicating Authority having returned finding that the CIRP was initiated fraudulently, it is for the Adjudicating Authority to impose penalty under Section 65 - it is the Adjudicating Authority who has to take a decision on the penalty in reference to the order dated 12.06.2024 passed by the Adjudicating Authority - the Adjudicating Authority may proceed to pass an appropriate order with regard to penalty on the financial creditors in continuation of the order dated 12.06.2024 and in accordance with law. Conclusion - Section 65 of the IBC is a penal provision requiring strict interpretation, applying penalties only to those who initiate proceedings fraudulently. The initiation of CIRP is fraudulent, The penalties under Section 65 could not be imposed on promoters. Appeal disposed off.

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• 2025 (3) TMI 437
  Preferential transaction within the ambit of Section 43 of the I B Code, 2016 - HELD THAT:- Once the Appellants took a stand that the two transactions identified to be preferential transactions, were actually carried during the ordinary course of business of the Corporate Debtor, the burden of proof under Section 101 of Evidence Act, to prove to the contrary, had shifted upon the Appellants to show that the transactions identified in the Forensic Audit Report, were not the transaction, which will be falling under Section 43 of the I B Code. They having failed to do so, the conclusion, which has been arrived at by the learned Adjudicating Authority, declaring the transactions, as to be the preferential transactions and the consequentially directing Respondent No.1, Respondent No.2 and Respondent No.3 to the Company Petition to restore the amount of Rs.24,29,874/- Rs.25,53,233/-and Rs.11,50,000 respectively correct in law, is contrary, to what has been attempted to be argued by the learned counsel for the Appellant based upon the grounds taken by them in the Memorandum of Appeal, to the effect that the findings which had been recorded are perverse and contrary to the record and based upon wrong appreciation of the statement and evidence, which was place by the Respondent and particularly the Forensic Audit Report of 09.11.2020 and the additional Forensic Audit Report of 03.11.2021. The question of law which the learned counsel for the Appellants has attempted to argue before this Appellate Tribunal was from a very limited perspective, that, whether the learned Adjudicating Authority could have at all allowed the application under Section 43, without considering the objections filed by the Appellant and secondly, whether in the absence of the material particulars being placed before the learned Adjudicating Authority, it should have gone ahead to hold conclusively that the transactions were preferential transactions under Section 43 of the I B Code. In fact, both the substantial questions, which have been pressed upon by the Appellant runs contrary to the finding, recorded by the learned Adjudicating Authority, who did consider the inferences drawn from the Forensic - In fact, in accordance with the findings recorded, it is seen that the Appellants have utterly failed to discharge their responsibility to establish their defence that the said two transactions were conducted during the ordinary course of business. Having failed to do so, they cannot take advantage of their own inaction that too, particularly when the findings have been recorded by the learned Adjudicating Authority was based upon the unrebutted Forensic Audit Reports and the additional Forensic Audit Report. The second contention which has been raised by way of a substantial question was that, certain materials were not considered by the Ld. Adjudicating Authority while ruling the said transactions to be a preferential transaction, is contrary to the recording in the Impugned Order, wherein the learned Adjudicating Authority while extracting the relevant portion from the Audit Reports, has dealt in its Para 7 of the Order as to how the inferences on the preferential transactions have been drawn, which have been detailed based on the contents in the Forensic Audit Reports - This, read in consonance to the statements, recorded by the learned Adjudicating Authority as extracted in the concluding paragraphs of the Impugned Order will show that the Ld. Adjudicating Authority has considered all material placed before it. Thus the second question too is answered against the Appellant. Conclusion - i) The transactions, which have been detailed and determined by the Forensic Auditors in their report do not fall to be nor it was established to be falling under the exceptions as contemplated under Section 43(3) of I B Code, 2016, and even on bare perusal of the observations, made in Para 7 of the Impugned Order under challenge, it can be seen that the Appellant has not even endeavoured to establish the defence he has mounted that it was a transaction made in normal course of business and that it would be falling under the exceptions contemplated under Section 43(3) of the I B Code, 2016. ii) The Appellant cannot take the advantage of his own wrong by his failure to discharge his responsibilities as statutorily envisaged under Section 101 of the Evidence Act. iii) Since the Impugned Order is based upon a sound logical reasoning upon considering the statement and evidences on record, the observations made therein does not suffer from any perversity or misappreciation of evidence by the learned Adjudicating Authority which would call for any interference. Appeal dismissed.

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• 2025 (3) TMI 436
  Invocation of the Performance Bank Guarantee (PBG) - failure to implement the plan within the timeline as allowed - HELD THAT:- In the Monitoring Committee meeting held on 19.03.2024, it was noticed that SRA was obliged to make the payment within 90 days of the effective date - SRA was obliged to pay Rs.100 crore within 90 days. Adjudicating Authority in the impugned order has also noticed that SRA has failed to deposit the amount within 90 days as per the resolution plan. The invocation of Bank Guarantee with the UBI on 08.04.2024 was taken, which was noticed and Adjudicating Authority has observed that with consent of majority lenders of the corporate debtor, the Bank Guarantee was invoked. Letter dated 08.04.2024 invoking the Bank Guarantee itself clearly mentions that SRA failed to implement the approved resolution plan. Although, the appellant has referred to filing of the application by the UBI to recall of the approval order and filing of the appeal by the SBI, it is relevant to notice that even after dismissal of the appeal on 13.02.2024 and rejection of IA filed by the UBI on 10.11.2023, no amount was infused by the SRA. The litigation which was initiated with respect to approval of the resolution plan could not be a reason to appellant to not adhere to the timelines as provided in the resolution plan regarding the infusion of fund upfront payment of Rs.100 crore, which was required to be paid within 90 days admittedly has not been paid by the SRA. Effective date having been achieved on 25.07.2023, it is not even contested - Invocation of PBG was on the reason that SRA failed to implement the plan. Adjudicating Authority has rightly rejected the submission of the appellant that invocation was not in accordance with the law. When the plan is not implemented by SRA, PBG can be statutorily invoked, which is the statutory scheme as delineated by Regulation 36B(4A) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. It is noticed that appellant before the Adjudicating Authority as well as before this Tribunal has submitted that appellant is still ready to deposit amount, when the appellant has failed to deposit the amount within the timeline, it is not open for the appellant to deposit the amount at the stage when the application was filed or in the hearing of the appeal. Consequences of non-adhering to the timelines in the resolution plan, cannot be reversed after considerable lapse of time, and specially, when not even first tranche of payment has been made by the SRA. Conclusion - i) SRA not only failed to make the Upfront payment as required under the approved Resolution Plan but also failed to take any real steps even after the dismissal of appeals by Hon ble NCLAT. ii) The CIRP process has to be completed in a timeline and timeline of the CIRP process has to be adhered by all, including the SRA. iii) Timely implementation of the resolution plan is also one of the underlying objectives of the IBC. Thus, no grounds have been made out to interfere with the order impugned in these appeals - Appeals dismissed.

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• 2025 (3) TMI 435
  Admission of application filed under Section 7 of IBC - whether the Appellant being a NBFC, as certified by the regulator, namely, RBI is saved from the proceedings of the Code? - HELD THAT:- As a matter of fact, the issue regarding the appellant being NBFC and it s effect has never been before the Ld. NCLT for the purpose of seeking dismissal of the application filed under Section 7 by the Respondent. There is no dispute that the appeal is a continuation of the original proceedings but since the Appellant has to prove, by leading evidence, if already not led, that it had been engaged in providing financial services, for challenging the application filed under Section 7, therefore, it is just and expedient to set aside the impugned order and remand the matter back to the Ld. NCLT, keeping the issue open as to whether the application under Section 7 filed by the Respondent is maintainable against the present appellant in case the Appellant is a NBFC? Conclusion - The initial dismissal of the appeal set aside and the case remanded to the NCLT for a determination of whether the appellant, as a registered NBFC, was engaged in providing financial services, thus affecting the applicability of Section 7 proceedings. Appeal allowed by way of remand.

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• 2025 (3) TMI 434
  Admission of Section 7 application filed by Punjab Sind Bank - application was filed by a person duly authorized to initiate such proceedings or not - HELD THAT:- The Hon ble Supreme Court in Anand Murti vs. Soni Infratech Pvt. Ltd. Anr. [ 2022 (4) TMI 1304 - SUPREME COURT ] clearly provides that in appropriate case, promoters can be permitted to complete the project. However, for passing appropriate order, the facts on each case need to be noticed and considered. The present is a case where Appellant has submitted three different settlement plans backed by three different investors. Last investor- Apex Heights Pvt. Ltd. has been out of insolvency only on 24.07.2024. Punjab Sind Bank who has initiated Section 7 proceeding and other two lenders Bank of Maharashtra and Punjab National Bank has out rightly rejected the settlement proposals. YEIDA who has claimed of Rs.751 Crores has also expressed its reservation to the proposal and in its affidavit has submitted that the proposals deserve to be rejected. When there are huge liabilities on the corporate debtor and lenders are not expressing their agreement with the proposal and having unanimously rejected the settlement proposal and further, the registered association of homebuyers and another set of homebuyers who had earlier initiated Section 7 proceedings against the corporate debtor in the year 2020 are opposed to any settlement plan. Looking to the huge liabilities against the corporate debtor, it is satisfied that present is not a case where this Tribunal may interfere with the order passed by the Adjudicating Authority admitting Section 7 application. Present is a case where resolution of the corporate debtor is required to be found in accordance with statutory scheme under the IBC and the CIRP Regulations. In view of the interim order dated 29.07.2024, no further steps could be taken by the IRP except collation of the claims. The period from 29.07.2024 till today need to be excluded in the CIRP period. Conclusion - i) The Section 7 application was filed within the limitation period and by a duly authorized person. ii) The settlement proposals submitted by the appellant were not viable and were unanimously rejected by the financial creditors and other stakeholders. There are no merit in the appeal - appeal dismissed.

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• Service Tax

• 2025 (3) TMI 433
  Refund of Service Tax paid - refund is denied only on the ground that there is no evidence to show whether Cenvat credit is availed by the KINFRA against the service tax paid by the appellant - HELD THAT:- It is appropriate for this Tribunal to remand the matter to adjudication authority to reconsider the issue on de-novo adjudication by verifying the documents produced by the appellants regarding non-availment of Cenvat credit by KINFRA against the service tax paid by the appellants. Appellants are directed to produce certificate regarding non availment of Cenvat credit by KINFRA from authorized Chartered Accountant of KINFRA and on verification of the same, adjudication Authority shall refund due amount with consequential relief if any in accordance with law. Appeals are allowed by way of remand - Adjudication Authority is directed to consider the claim within 3 months from the date of receipt of the document from the appellants regarding non availment of the CENVAT credit by the KINFRA.

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• 2025 (3) TMI 432
  Classification of services - Cleaning service or not - services in the nature of upkeep/maintenance of platforms , dry sweeping of empty rakes and mechanized yard cleaning , railway platform cleaning , disposal of accumulated garbage to designated placed , on-board housekeeping service in reserved coaches of Poorva Express and cleaning of Sonpur Railway Station platform and its surrounding area , to the South Eastern Railways - exemption from Service Tax under Sl. No. 25 of N/N. 25/2012-S.T. dated 20.06.2012 - extended period of limitation - penalty. Demand of Service Tax for the period up to 30.06.2012 - HELD THAT:- The cleaning activity rendered is liable to Service Tax only if the same are rendered in respect of commercial or industrial buildings and premises or factory, plant or machinery, tank or reservoir of such commercial or industrial buildings and premises which are all commercial in nature. However, we find that in this case, the services were rendered by the appellant to the Indian Railways, which is a Government of India Organisation. The Department of Railways cannot be called as a commercial concern as its operations of passenger transportation of passengers in trains is meant for the welfare of the general public and it cannot be considered as an activity done with a profit motive. In these circumstances, the cleaning services rendered by the appellant cannot be held liable to Service Tax for the period up to 30.06.2012. Tribunal in the case of R.K. Refreshment Enterprises (P) Ltd. v. Commissioner of C.Ex., Raipur [ 2018 (2) TMI 1412 - CESTAT NEW DELHI] , wherein it was held that The original authority gave a reason that railway coaches are either standing on platform or running on the track and the same are to be considered as object on the premises for Indian railway holding railway coaches and contracts constituents of capital assets and machinery of Indian railway, the original authority held cleaning of such railway coaches will be considered as cleaning of commercial premises. The coaches are rolling stock of railways. They are for transport mode and cannot fall under the commercial object of industrial building, factory, plant or machinery, etc. The interpretation of the original authority is far fetched and not sustainable in view of the plain meaning of the statutory definition for tax entry. The demand of Service Tax confirmed in the impugned order for the period up to 30.06.2012 under the category of cleaning service is not sustainable Demand of Service Tax for the period after 01.07.2012 - HELD THAT:- The appellant has been rendering the said services to the Indian Railways and it is on record that they were in correspondence with the Indian Railways regarding their Service Tax liability. The Indian Railways had instructed that the services rendered to them are not liable to Service Tax, vide Circular dated 03.05.2013 and a letter dated 03.06.2013. Further, it is observed that when the Indian Railways asked the appellant to obtain registration under works contract service , they immediately took registration on 01.10.2013. Subsequently, when they came to know that Service Tax is not being paid by others who were undertaking similar businesses, they stopped paying Service Tax and filed nil Return for the period from October 2014 to March 2015, by availing the benefit of Entry No.25 of Notification No. 25/2012-S.T. dated 20.06.2012. Thus, the appellant has always acted as per the direction of Indian Railways. Eligibility of the exemption as provided under Entry No. 25 of N/N. 25/2012-S.T. dated 20.06.2012 - HELD THAT:- There is no dispute that the appellant has rendered the services namely, upkeep/maintenance of platforms , dry sweeping of empty rakes and mechanized yard cleaning , railway platform cleaning , disposal of accumulated garbage to designated placed , on-board housekeeping service in reserved coaches of Poorva Express and cleaning of Sonpur Railway Station platform and its surrounding area to a Government body viz. the Indian Railways. The services rendered by the appellant are in the nature of public health, sanitation conservancy and solid waste management . Entry No.25 of the Notification 25/2012-ST exempts all such services which are rendered to Government, as the same are otherwise exempted from service tax when rendered by a Municipality. Accordingly, we find that the services rendered by the appellant are squarely covered within the ambit of Sl. No. 25 of Notification No. 25/2012-S.T. dated 20.06.2012. The appellant has rightly claimed exempted under the above Notification for the services rendered to the Indian Railways. Time limitation - Penalty - HELD THAT:- The appellant, being a contractor engaged by the Indian Railways, took registration and paid Service Tax upon being advised by the Indian Railways. Thus, it is not a case where the appellant has collected and not paid the Service Tax to the Department. It is a case where the appellant had entertained a doubt as to their Service Tax liability and were firmly of the view that the services rendered were exempt as per Sl. No. 25 of Notification No. 25/2012-S.T. Therefore, there is no suppression of facts with intention to evade the tax on the part of the appellant existing in this case. Hence, the demand of Service Tax by invocation of the extended period of limitation is not sustainable. For the same reason no penalty imposable on the appellant. Conclusion - The services rendered by the appellant are eligible for the exemption as provided under Sl. No. 25 of N/N. 25/2012-S.T. dated 20.06.2012 as claimed by the appellant since the said services are in the nature of public health, sanitation conservancy and solid waste management which are otherwise provided by the municipality to the general public. Accordingly, the demand of Service Tax confirmed in the impugned order is not sustainable. Since the demand itself is not sustainable, the question of demanding interest and imposing penalty on the appellant company does not arise. The impugned order is set aside - appeal allowed.

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• 2025 (3) TMI 431
  Levy of service tax on labour income and target incentive - HELD THAT:- The issue in the present case is squarely covered by the decision of this Tribunal in appellant s own case 2024 (4) TMI 1232 - CESTAT ALLAHABAD wherein it is held that the service tax demands on incentives, sale of goods, and services were not legally sustainable. The impugned order is set aside - appeal allowed.

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• Central Excise

• 2025 (3) TMI 430
  Clandestine manufacture and removal - liquid medicaments - allegation on the basis of comparison of quantity clearance details as reflected in Tax Audit Report (Form 3CD) and ER-1 Returns for the period 2010-11 and 2011-12 - principles of natural justice - Extended period of limitation. Can on the basis of difference between figures of Form 3CD and ER-1 Returns, it be alleged that the appellants are engaged in the activity of clandestine clearance of the goods? - HELD THAT:- The said issue has been examined by this Tribunal in the case of Micky Metals Ltd. vs. CCE, Bolpur [ 2023 (7) TMI 357 - CESTAT KOLKATA] , wherein this Tribunal has observed time and again it is held by the judicial pronouncements as discussed hereinabove that merely on the basis of difference in the figures of audit report and ER-1 return without establishing the parameters of clandestine manufacture and removal of goods, the charge of clandestine removal is not sustainable. It is found that in this case the show cause notice has been issued on 29.04.2015 for the period 2010-11 and 2011-12 on the basis of difference between Form 3CD and ER-1 Returns. As all these documents were in public domain during the impugned period, therefore, as the documents are available with the department and if there any allegations required to be made that to be made during the normal period of limitation, which the Revenue has failed to do so. Extended period of limitation - HELD THAT:- The demand pertaining to extended period of limitation is not sustainable and whole of the demand is beyond the normal period of limitation. Conclusion - Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. The charge set aside concluding that the demand for excise duty, interest, and penalties was unsustainable due to lack of evidence, violation of natural justice, and inapplicability of the extended limitation period. There are no merit in the impugned order - appeal allowed.

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• 2025 (3) TMI 429
  Reversal of CENVAT Credit - Inclusion of CENVAT credit availed on the Interface , while calculating the proportionate credit to be reversed under Rule 6(3A) of the CENVAT Credit Rules, 2004 - applicability of Rule 16 of the Central Excise Rules or Rule 6 of CENVAT Credit Rules? - Invocation of extended period of limitation - penalties - HELD THAT:- If Rule 16 of the CENVAT Credit Rules 2004 provides for availing credit on goods brought into the factory for whatever purpose, it should be interpreted in a constricting manner without expanding the purposes for which a deeming fiction has been brought in. It is found that wherever legislature intended to make the deeming fiction applicable to the entirety of Rules, the same is provided by the Rule itself. The submissions of the learned Counsel for the appellants agreed upon that such an inclusive deeming fiction has been incorporated under Section 66A of the Finance Act, 1994. It is found that in the impugned case, Rule 16 does not provide such applicability to the other Rules of CENVAT Credit Rules. It can be seen that Rule 16 brings in one such deeming fiction to cater the exigencies of the manufacturers who are likely to receive back final products for repair, re-conditioning etc. As the duty on the same has been discharged, legislature in their wisdom has permitted availment of CENVAT credit on the same. For this reason, the goods cannot be equated to be inputs for the purpose of Rule 3 of CENVAT Credit Rules as they were never been inputs - the findings of the impugned order are not sustainable on this count. The appellant has correctly not included the amount of CENVAT credit in the value of inputs for the purpose of reversal of CENVAT credit in terms of Rule 6(3A) in respect of exempted and dutiable goods manufactured by them. Invocation of extended period of limitation - penalties - HELD THAT:- Department has not made out any case for invocation of extended period. Moreover, it is seen that extended period have been invoked in the subsequent show cause notices also in contravention of the Hon ble Supreme Court s decision in the case of Nizam Sugar Factory Ltd. [ 2006 (4) TMI 127 - SUPREME COURT] , it is found that extended period cannot be invoked in the subsequent show cause notices. Further, as the appellants being subjected to audits from time to time and keeping in view that the appellants are a Public Sector Undertaking, it is found that invocation of extended period is neither warranted not substantiated. In the result, the impugned orders cannot be sustained both on merits and limitation. Therefore, they are liable to be set aside. Conclusion - The appellants correctly excluded the Interface from the reversal calculation under Rule 6(3A). ii) The extended period for show cause notices was unjustified. Appeal allowed.

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• 2025 (3) TMI 428
  CENVAT Credit - cenvat credit availed by the respondent, has been distributed by the input service distributor as an ISD and the availment of cenvat credit by the respondent, which has been disputed at the end of ISD - HELD THAT:- The identical issue has been dealt with by this Tribunal in the case of Tata Steel Limited [ 2024 (10) TMI 50 - CESTAT KOLKATA] , wherein this Tribunal has observed that As it is an admitted fact that the availment of CENVAT Credit on intellectual property service was not disputed at the end of the ISD/TSL, Kolkata, the CENVAT Credit cannot be declared as inadmissible CENVAT Credit to the appellant who has taken the CENVAT Credit on the strength of the invoices issued by the ISD. In these circumstances, we hold that the appellant is entitled to take CENVAT Credit and accordingly, there is no requirement of reversal of CENVAT Credit by the appellant. Conclusion - A the distribution of cenvat credit to the respondent has not been disputed by the Revenue at the end of the Input Service Distributor, in that circumstances, it cannot be disputed at the end of the availment of cenvat credit by the respondent. There are no infirmity with the impugned orders - appeal of Revenue dismissed.

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• CST, VAT & Sales Tax

• 2025 (3) TMI 427
  Confirmation of best of judgment assessment made on the writ petitioner by the assessing authority - dismissal of application filed by the writ petitioner primarily on the ground that the order passed by the Fast Track Revisional Authority, impugned before it, is a well reasoned order and does not appear to have infringed any provision of law and any said principle of law - HELD THAT:- Since the matter involves verification of the documents, which the petitioner asserts to have produced along with its reply to the verification report, we are of the view that one more opportunity can be granted to the writ petitioner to go before the 4th respondent, which authority presently has jurisdiction viz., West Bengal Commercial Taxes Appellate and Revisional Board so that a factual verification can be done. In any event, as the matter requires verification of the documents, which are stated to be in possession of the writ petitioner, therefore, it will be justified in remanding the matter back to the 4th respondent for a fresh consideration of all issues, which were raised by the writ petitioner in the grounds of revision initially filed before the Revisional Board, which stood transferred to the Fast Track Revisional Authority as well as the issues, which were canvassed in the rebuttal/reply to the verification report dated September 17, 2019. Conclusion - The Court emphasized the need for factual verification of the documents claimed to have been submitted by the petitioner. The petitioner expressed readiness to produce the documents before the Court. Petition allowed by way of remand.

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• 2025 (3) TMI 426
  Sales under concessional rate of tax against declaration in Form C i.e. exemption from tax in sale in transit and regarding Camp sales - whether the appellant is entitled to further time to produce the declaration forms in Form C under the Central Sales Tax Act, 1956, to support their claim for a concessional rate of tax? - HELD THAT:- Though perusal of the record shows that the appellant was granted a number of opportunities to produce declaration Form C but it was not able to produce the same before the Assessing Authority, still in the interest of justice and as per the statement of the learned counsel for the appellant, since the appellant is in possession of declaration Form C , one last opportunity is granted to the appellant to produce the declaration in Form C before the Assessing Authority. The case is remanded to the Assessing Authority to consider and verify the declaration Form C produced by the appellant and after considering the same, pass a fresh order - one last opportunity is granted to the appellant to produce the declaration Form C before the Assessing Authority within a period of two weeks from the date of passing of this order and the Assessing Authority is directed to consider and verify the same and pass a fresh order. Conclusion - The appellant should be granted one final opportunity to produce the Form C declarations before the Assessing Authority within two weeks. Appeal disposed off.

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• 2025 (3) TMI 425
  Cancellation of penalty imposed u/s 47 (6) of the KVAT Act - documents accompanied has no connection with the gold detained and said documents are not valid documents because of variation of quantity, non declaration of the said delivery chalan before the assessing authority and non mentioning the date of transport - HELD THAT:- The appellate tribunal took note of the factual position obtaining with regard to the seizure of the gold ornaments from the employee of the respondent/assessee. As is apparent from a reading of the proceedings of the intelligence officer, the jewellery that was seized was found in the possession of one Sumesh who was standing at the hallmarking centre where he had been entrusted to take the gold ornaments by the respondent/assessee. It was not in dispute that the jewellery in his possession was being taken for the sole purpose of hallmarking and thereafter returning to the store of the respondent/assessee. The revenue also did not have a case that the goods were meant for sale and that therefore there was a possible evasion of tax. It is also significant that the respondent/assessee was paying tax on compounded basis, based on the tax paid in the immediately preceding assessment year. In the absence of any material to suggest that the gold ornaments that were seized from the employee of the assessee were meant for sale either within the State or inter-state, and finding that the assessee was paying tax on compounded basis in which event any suppression of turnover in the present year would have no bearing on his tax liability for the said year, the appellate tribunal was of the view that there was no justification for the imposition of any penalty based on the turn over computed of alleged suppressed sales. The tribunal accordingly confirmed the penalty only to an extent of Rs.10,000/- as mandated under Section 67 (1) (j) of the Kerala Value Added Tax Act. Conclusion - No evidence of tax evasion or suppression of turnover that would impact the assessee s tax liability for the year. Therefore, the appellate tribunal s decision to confirm a reduced penalty of Rs. 10,000 under Section 67 (1) (j) of the Kerala Value Added Tax Act was upheld. The O.T. Revision dismissed.

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• 2025 (3) TMI 424
  Validity/correctness of order granting permission/sanction for re-assessment - Commissioner is entitled to grant such permission for reassessment without affording opportunity of hearing to the Assessee or not - violation of principles of natural justice - HELD THAT:- It is to be noted that vide order dated 08.07.2014 in CWP-12839- 2014 [ 2015 (3) TMI 479 - PUNJAB HARYANA HIGH COURT] and other connected writ petitions, vires of Section 29 (7) of PV Act were upheld, approval given by Commissioner and notices issued by concerned authority for amending assessment order were held to be in order and without any fault. Reference was thereafter made to Rule 49 of Punjab VAT Rules in regard to amendment of assessment and procedure to be followed therein. In respect to question of grant of opportunity of hearing at the stage of grant of approval, while referring to judgment of Hon ble the Supreme Court in Assistant Commissioner Assessment-II, Bangalore and others versus Velliappa Textiles Limited and another [ 2003 (9) TMI 3 - SUPREME COURT] , it was held that grant of sanction is a purely administrative act with no opportunity of hearing required to be provided to the affected person before it. The learned Tribunal has correctly proceeded to dismiss the appeals filed by present appellant - appeal dismissed.

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• Indian Laws

• 2025 (3) TMI 423
  Sale of plot in the auction - acquisition of leasehold rights in the plot through the agreement to lease executed by the Delhi Development Authority (DDA) - entitlement of the appellant to claim unearned income from the transactions involving the plot - HELD THAT:- It is an accepted position that the lease was never executed by the appellant in favour of M/s Mehta Constructions, and no rights, title, and interest were created in favour of M/s Mehta Constructions in respect of the said plot. Therefore, at the highest, the second respondent, by virtue of the sale deed dated 15th February 1985, executed by M/s Mehta Constructions, can claim benefits under the lease agreement, provided in law, the second respondent is entitled to it in accordance with law. The first respondent will get only those rights which M/s Mehta Constructions had under the lease agreement, provided the rights can be claimed at this stage. In fact, in the impugned judgment, the Division Bench of the High Court had observed that the auction would not amount to sale of the said plot. The impugned judgment leaves the remedy of the appellant open to proceed against the concerned parties. These findings have been accepted by the first respondent. As regards the unearned income, the Division Bench was right in not passing any order on that behalf. We cannot direct the funds available in liquidation proceedings for payment of the unearned income as large number of claims have been submitted. Conclusion - The first respondent cannot claim to be a lessee as the lease in terms of the lease agreement was never executed. At the same time, if according to the case of the appellant, M/s Mehta Constructions had committed breach of the lease agreement, notwithstanding the impugned orders, it will be always open for the appellant to adopt appropriate remedy for recovery of possession and/or recovery of unearned income against the first respondent. Appeal dismissed.

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• 2025 (3) TMI 422
  Application under Section 36 (2) of the Arbitration and Conciliation Act, 1996 - prayer for unconditional stay of the award - agreements between the parties specifically provided for the treatment of the GST component included in the lease rentals tendered by the claimant s lessee to the respondent or not - entitlement to adjust all the money deposited into the designated account against the universal dues of the respondent against the claimant - alleged obligation of the respondent to make over the GST component of the lease rentals was subject to the claimant furnishing proof of deposit of the GST with the appropriate authorities - HELD THAT:- This court holds that the petitioner has failed to discharge the onerous duty to, prima facie, satisfy from the records that, the making of the award was vitiated by fraud and corruption. The threshold to prove fraud and corruption on the part of the learned Arbitrator in the making of the award would be much higher than a criticism of the findings of the learned Arbitrator. The petitioner would have to demonstrate unethical behaviour of the Arbitrator, which surpassed all moral standards. An honest mistake or the incorrect appreciation of the terms of the contract cannot be either fraud or corruption. Moreover, the petitioner has also failed to substantiate that the respondent had intentionally withheld documents in order to mislead the learned Arbitrator and had obtained the award by unfair means. The petitioner was permitted to produce documents and calculations including the sanction letter and the RBI circular, which the petitioner failed to do. After closure of arguments, a unilateral statement of account was sought to be produced, which the learned Arbitrator held could not be looked into. The petitioner had failed to show, prima facie, that the respondent had deliberately, in a premeditated way and with an intention to gain undue advantage, had suppressed and concealed documents from the learned Arbitrator or had misled the learned Arbitrator into the making of the award. The calculation has been provided by the award holder. The law is well settled. An award debtor will have to secure the entire amount awarded, which includes the principal as also interest. This court does not find any reason to grant unconditional stay of the award - The petitioner must secure the sum of Rs. 8,40,52,832/- by furnishing a bank guarantee to the satisfaction of the learned Registrar Original Side, Calcutta. The bank guarantee shall be kept renewed from time to time. There shall be unconditional stay of the award for a period of four weeks from date and the stay shall continue till disposal of the application under Section 34 of the Arbitration Conciliation Act, 1996, upon compliance of this order. In case of default, the stay shall be vacated. Conclusion - The petitioner was not entitled to an unconditional stay of the arbitration award. The petitioner was required to secure the awarded amount by furnishing a bank guarantee. The allegations of fraud and corruption were not substantiated, and the arbitration award was upheld as valid. Petition disposed off.

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• 2025 (3) TMI 421
  Seeking leave to file an appeal against the judgment and order - Dishonour of cheque - acquittal of accused - rebuttal of presumption - HELD THAT:- On perusal of the evidence produced by the applicant before the learned Trial Court the applicant has filed his examination in chief at Exh.4 and has narrated all the facts of the complaint on oath. The applicant has been cross examined at length and during the cross-examination the applicant has stated that he maintains books of accounts and pays income tax and files his Income Tax Returns. That he has not produced the extract of the entry to show that the amount is due from the accused. That he has not produced the Balance Sheet of the financial year 01.04.2015 to 31.03.2016 and the bill produced at Exh.14 does not bear the signature of the customer. The accused has sent a reply to the notice but the same is not produced on record and he has not declared the date and the quantity of goods taken by the accused. The learned Trial Court has concluded that the applicant has not proved that the accused is doing the business of gold and silver, and the applicant has not proved that the goods mentioned in the bill produced at Exh.14 were received by the accused - The accused had sent a reply to the notice and had denied all the facts stated by the applicant and had also raised the issue that his cheque book was lost before the competent authority and has raised raised a probable defence and successfully rebutted the presumption. Moreover, the learned Trial Court has considered all the documents produced by the applicant and has also considered that the defence of accused is believable and applicant had not produced any cogent evidence to disbelieve the defence of accused and has not produced any evidence in support of written arguments submitted by the applicant. The applicant has failed to prove his recoverable debt and the applicant has failed to prove beyond reasonable doubt that the cheque in question was given as repayment of a legal debt as the cheque book with series number of the cheque was lost and a publication was also given to the competent authority. Conclusion - The appellant s failure to prove the debt and the respondent s successful defense warranted the acquittal. The present application seeking leave to present an appeal under Section 378(4) of the Code of Criminal Procedure fails and is hereby dismissed.

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