TMI Tax Updates - e-Newsletter
March 14, 2023

Case Laws in this Newsletter:

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

Articles

1. The AOs should take responsibility of Sec 154 cases so that these do not meet unfavourable judgements at the appellate stage.

   By: Vivek Jalan

2. SCN/Order issued without giving any specific details or reasons for taking any action are not sustainable

   By: Bimal jain

3. STATUTORY AUTHORITIES MUST EXERCISE JURISDICTION WITHIN A REASONABLE TIME

   By: DR.MARIAPPAN GOVINDARAJAN

4. DELEGATED LEGISLATION

   By: Dr. Sanjiv Agarwal

5. Appeal filed offline cannot be denied on technical grounds

   By: Bimal jain

News

1. CBDT’s e-Verification Scheme harnesses information technology to facilitate voluntary compliance

2. A series of regional workshops are being organized to facilitate the wider adoption of the PM GatiShakti National Master Plan platform - Second regional workshop organized on 10th & 11th March 2023 in Kochi, Kerala

3. Joint Statement of 18th India-Australia Joint Ministerial Commission (JMC)

Highlights / Catch Notes

GST

• Court Rules 200% Penalty for Expired E-Way Bill Excessive; Orders Refund Due to No Confiscation in Transit.

  Case-Laws - HC : Storage of goods at unreported location after expiry of e-way bill - The petitioner was certainly at fault in not recording the additional godown at the time of generation of the e-way bill, but at the same time, the petitioner ought not to be penalized with two hundred percent penalty for such trivial offence. As the goods were not confiscated while on the move, imposition of penalty under Section 129 of the Act is erroneous and bad in law. - Amount collected ordered to be refunded - HC
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• Court Upholds Penalty Imposed for Missing E-Way Bill; Petitioner Pays Without Objection, No Unlawful Action Found.

  Case-Laws - HC : Levy of penalty - failure to produce a valid e-way bill - The authority merely performs the statutory obligation - Here, it does not appear that the authority acted in any manner contrary to law. Travelling without a proper e-way bill attracts penalty. The authority assessed the penalty amount and the petitioner deposited the same without a murmur. - There is hardly any reason to interfere in the instant proceeding - HC
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Income Tax

• CIT's Inconsistent Approach Invalidates Jurisdiction Assumption u/s 263 in Taxpayer's Shipping Income Case.

  Case-Laws - AT : Revision u/s 263 - As per CIT AO has not called for any details to ascertain the amount and nature of total remittances received by the assessee during the year - various inconsistencies in the approach of learned CIT gives an impression that he himself was not sure about the nature and character of shipping income earned by the assessee. - CIT was not justified in assuming jurisdiction u/s 263 - AT
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• CIT Confirms Additions for Bogus Purchases u/s 263 After Assessee Fails to Dispute Fraudulent Creditor Information.

  Case-Laws - AT : Revision u/s 263 by CIT - Bogus purchases - CIT had clear cut information that the creditors relating to these purchases were bogus. He had given sufficient opportunities to the assessee during the revisionary proceedings to counter this fact, but the same was not done by the assessee. - Additions confirmed - AT
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• Appeal Dismissal Incorrect: Assessee's Taxes Paid on Original Return, Revised Return Deemed Non-Existent u/s 249(4.

  Case-Laws - AT : Non-admission of appeal u/s. 249(4) - The assessee has not paid the taxes on the revised return which was not treated to be valid by the AO and was non-est in law. Since the revised return was treated to be non-est in law, there was no question of making payment of tax on the income declared therein - assessee has already paid the tax on the admitted income declared in the original return filed which was acted upon by the AO for framing the assessment u/s.153C of the Act. In the light of these facts, we are of the view that the CIT(Appeals) was wrong in dismissing the appeal of the assessee. - AT
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• Ride-sharing company not liable for TDS on "Ride Charges" u/s 194C; drivers contract directly with riders.

  Case-Laws - AT : TDS u/s 194C - non-deduction of tax on "Ride Charges" by OLA - there is no contract/ sub-contract between the assessee and the Driver under which the Driver provides any transportation services either to assessee or to any Rider on behalf of assessee, for which the Driver is paid by assessee. The contract for transportation services is between the Driver and the Rider and the assessee only facilitates the entire process in the capacity of an “aggregator”. - No TDS liability on assessee - AT
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• Penalty Imposed for Misreporting Unaccounted Rental Income u/s 270A; 200% Tax Penalty Deemed Appropriate by AO.

  Case-Laws - AT : Penalty proceedings u/s.270A - unaccounted rental income - it is a case of misreporting of income as per provisions of Sec.270A(9) of the Act, and the AO has rightly levied penalty @200% of the amount of tax payable - AT
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• Payments to CGTM France for services not taxable as "fees for technical service" under IT Act Sec 195; No TDS required.

  Case-Laws - AT : TDS u/s 195 - remittances made to CGTM, France - FTS - there was no question of deduction of TDS on the payment made to CGTM, France for the service rendered by them to the assessee and the payment made to them does not fall under the “fees for technical service.” Hence, it does not attract the provisions of section 195 of the Act so as to deduct TDS. - AT
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• No Penalty for Late Filing: Taxpayer's Loss and Lack of Advantage u/ss 271B and 44AB.

  Case-Laws - AT : Levy of penalty u/s 271B - failure to get accounts audited as per the provisions of section 44AB - From the perusal of the profit and loss account we further find that the assessee incurred a net loss during the year under consideration, which in the absence of filing the return of income within the due date cannot be carried forward and set off. Thus, the non-filing of the return of income and audited accounts cannot in any way be said to be beneficial to the assessee. - No penalty - AT
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• Transfer Pricing Adjustment: TPO to Reassess Benchmarking with Foreign Associated Enterprise as Tested Party for Onsite Development Fee.

  Case-Laws - AT : TP adjustment - onsite development and project coordination fee’ - Associated enterprise can be considered as a tested party, in the present case. Accordingly, we direct the TPO to conduct fresh benchmarking analysis after considering foreign associated enterprise as the tested party and arrive at the arm’s length price for the international transaction pertaining to ‘onsite development and project coordination fee’. - AT
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Customs

• Imported Goods Misclassification: Customs Ignored Mutilation Request, Redemption Fine Reduced, Section 112 Penalty Set at Rs. 10,000.

  Case-Laws - AT : Redemption fine in lieu of confiscation of goods - Mis-classification of imported goods - the party had made a request for mutilation of the imported consignment to indicate their bona fides which does not appear to have been considered by the department view of their acceptance of the department’s stand exhibited through waiver of show cause notice as well as clearance of the consignments - redemption fine is reduced to Rs. 1,00,000/- and the personal penalty under Section 112 to Rs. 10,000/- - AT
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Service Tax

• Services Classified as Business Support Services, Not Business Auxiliary Service, Per Service Tax Regulations and Case Law.

  Case-Laws - AT : Classification of services - Business Auxiliary Service (BAS) or Business Support Services (BSS) - the services rendered to the vendors and the companies by the appellants therein conformed to the statutory definition of SSBC and hence, the services rendered to the vendors and companies were classifiable under SSBC and not under BAS. - AT
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Central Excise

• Interest Demand Nullified by Commissioner (Appeals) from 1983 to 1997 Based on OIO 9/97 Deemed Erroneous.

  Case-Laws - AT : Demand of Interest - Commissioner (Appeals) has erroneously set aside the demand from 30.12.1983 to 31.03.1997 on the basis of OIO 9/97. - There is no ground raised in the Cross Objections with regard to the demand of interest. The respondent cannot claim a relief in an appeal filed by the Department. It is made clear that respondent is liable to pay interest on all balance duty demand on packing chares and PME if not paid by them. - AT
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• CENVAT Credit Transfer Approved u/r 10: Department Must Allow Credit Shift to Lessee Unit Due to Mutual Agreement.

  Case-Laws - AT : Transfer of CENVAT Credit to lessee unit - Rule 10 of CCR 2004 - On going through the entire agreement, it is clear that there is consensus ad idem to transfer the ownership along with assets and liabilities to the lessee unit. - the rejection of the request to transfer CENVAT Credit balance as per Rule 10 of CCR 2004 is without any legal or factual basis. The Department is directed to issue permission to the appellant unit to transfer credit to the lessee unit - AT
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VAT

• Penalty and assessment orders for 2009-10 and 2010-11 annulled, Tribunal's restoration order set aside.

  Case-Laws - HC : Legality of the penalty orders and assessment orders - as the assessment orders for the assessment years 2009-10 and 2010-11 were based on the penalty orders for the said years, and the said penalty orders in this judgment are set aside, the impugned order of the Tribunal, to the extent it restores the assessment orders for the said years, is also set aside. - HC
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• Court Rules Loading and Transport Charges Part of Taxable Turnover for VAT and Sales Tax Purposes.

  Case-Laws - HC : Valuation - place of removal - charges incurred for loading, unloading, stacking, and transportation formed part of the taxable turnover or not - The clauses in Annexures 1 and 2 of purchase order clearly show that the transfer of title to the goods would take place only on delivery of goods at the customer's place and the customer's obligation to effect payment would arise only after the delivery is effected - Demand confirmed - HC
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Case Laws:

• GST

• 2023 (3) TMI 530
  Storage of goods at unreported location after expiry of e-way bill - Contravention of Section 67(2) read with Section 129 of the State Goods and Services Tax Act, 2017 - It has been contended that if the goods were inspected and seized in transit then provision of Section 68 ought to have been invoked and not Section 67, as has been done in the present case - non-affording of an opportunity of hearing to the petitioner prior to passing the order of penalty under Section 129 of the Act - violation of principles of natural justice (audi alterem partem). HELD THAT:- It appears that an e-way bill was generated in respect of the vehicle no. RJ04GC1737 on 9th February, 2022 for transporting fifteen thousand kilograms of cumin seeds by road from Gujrat to Siliguri. The e-way bill was valid upto 20th February, 2022. On receiving information about illegal storage of goods, the authority inspected a godown on 22nd February, 2022 where 12,840 kilograms of cumin seeds were found. The stock of the goods was assessed. The person in charge of the godown produced the tax invoice, consignment note and the e-way bill of the said goods - On scrutiny of the aforesaid documents it was found that the goods were in order but the corresponding e-way bill expired. The authority was of the opinion that as the goods did not reach the end point as mentioned in the e-way bill, the goods were in transit. According to the respondent authority, the goods ought to have been covered with valid e-way bills till the time of delivery to the recipient. Section 67(2) of the Act empowers the proper officer to confiscate goods, if secreted in any place, for evading payment of tax. The place may be searched and goods seized and the same shall be released on payment of applicable taxes. The proper officer, if has reasons to believe that the goods are stored in a warehouse or godown or any other place without paying tax or not paying requisite tax, may cause inspection, search and seizure. The provision relates to a particular place where inspection, search and seizure can be made - Section 129 deals with detention, seizure and release of goods and conveyances, in transit . The said provision is to be invoked when the goods are in movement on a conveyance. In the present case, admittedly, the goods were seized two days after expiry of the e-way bill on being offloaded and stored in a godown not mentioned in the e-way bill. The e-way bill is for the purpose of moving/transporting the goods from one place to the other. Law does not require a way bill to remain valid for such period the goods remain in the godown. The petitioner submits, with conviction, that the godown from where the goods were seized is the final destination and the goods were duly delivered to the recipient. The authority has not come up with a case that the goods ought not to have been offloaded and stored at the said godown but should have been transported to the place mentioned in the e-way bill - the authority erroneously opined that as the goods were yet to reach the final destination mentioned in the e-way bill, accordingly, the same may be treated as on transit ; for which the e-way bill ought to have been extended. The authority ought not to have imposed penalty without resorting to the proper provision. The petitioner was certainly at fault in not recording the additional godown at the time of generation of the e-way bill, but at the same time, the petitioner ought not to be penalized with two hundred percent penalty for such trivial offence. As the goods were not confiscated while on the move, imposition of penalty under Section 129 of the Act is erroneous and bad in law. The aforesaid section cannot be relied upon to penalize the RTP when the goods are seized from a godown. In Magnum Steel [ 2023 (3) TMI 251 - SC ORDER] the Hon ble Supreme Court held that the person authorizing the search must express his satisfaction that the material is sufficient for conducting a search and a reasonable belief that some objective material exists on the official record to trigger searches. The report of the proper officer is an unsatisfactory one, not enough to initiate search in the godown. In the case at hand it does not appear that the authority acted in accordance with the appropriate legal provisions and instead penalised the petitioner in a mechanical manner without proper application of mind. The impugned order of the adjudicating authority and the appellate forum are liable to be set aside and, are accordingly, set aside. The respondent authority is directed to refund the amount collected from the petitioner as penalty positively within four weeks from the date of communication of this order - Petition disposed off.

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• 2023 (3) TMI 529
  Refund of the unutilized Input Tax Credit (ITC) - Export of goods - rejection on the ground that the supplier has issued fake invoices - genuineness of the purchase - refund applications were rejected for the reason that it appeared that they are to be part of a supply chain involving fake Input Tax Credit - HELD THAT:- There is merit in the petitioner s contention that it is not required to examine the affairs of its supplying dealers. The allegations of any fake credit availed by M/s Shruti Exports cannot be a ground for rejecting the petitioner s refund applications unless it is established that the petitioner has not received the goods or paid for them. In the present case, there is little material to support any such allegations. In ON QUEST MERCHANDISING INDIA PVT. LTD., SUVASINI CHARITABLE TRUST, ARISE INDIA LIMITED, VINAYAK TREXIM, K.R. ANAND, APARICI CERAMICA, ARUN JAIN (HUF) , DAMSON TECHNOLOGIES PVT. LTD., SOLVOCHEM, M/S. MEENU TRADING CO., MAHAN POLYMERS VERSUS GOVERNMENT OF NCT OF DELHI ORS. COMMISSIONER OF TRADE TAXES, DELHI AND ORS. [ 2017 (10) TMI 1020 - DELHI HIGH COURT] , a Coordinate Bench of this Court had held that t he purchasing dealer is being asked to do the impossible, i.e. to anticipate the selling dealer who will not deposit with the Government the tax collected by him from those purchasing dealer and therefore avoid transacting with such selling dealers. Alternatively, what Section 9(2)(g) of the DVAT Act requires the purchasing dealer to do is that after transacting with the selling dealer, somehow ensure that the selling dealer does in fact deposit the tax collected from the purchasing dealer and if the selling dealer fails to do so, undergo the risk of being denied the ITC. Indeed Section 9(2)(g) of the DVAT Act places an onerous burden on a bonafide purchasing dealer. Thus, the petitioner would be entitled to the refund of the ITC on goods that have been exported by it - petition allowed.

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• 2023 (3) TMI 528
  Levy of penalty - failure to produce a valid e-way bill - petitioner contends that the imposition of penalty is illegal as the petitioner did not have any deliberate intention to evade tax - Reasonable opportunity of hearing was not granted to the petitioner - Principles of natural justice (audi alterem partem) - HELD THAT:- The petitioner admits that when the vehicle was intercepted, the e-way bill was invalid. The petitioner, being aware of the legal consequences, did not raise objection and paid the penalty that was imposed. The appeal filed was also very formal and the petitioner was unable to rebut the charge of transporting goods without a valid e-way bill - From the documents available before the Court it does not appear that the petitioner genuinely intended to contest the charge brought against her. On the contrary, the petitioner without any objection deposited the penalty amount. It seems that the petitioner is raising all the issues for the first time before the High Court in the present proceeding. The practice and procedure to obtain way bill electronically from the portal suggests that there is minimal manual interference and there is no scope to exercise discretion at any stage. Opportunity of hearing is given to allow the person in charge of the goods and/or the conveyance to produce relevant documents to rebut the charge and not for examining the reason or ground for not being able to act in accordance with law - In RAMJI JAISWAL ANR VERSUS STATE TAX OFFICER, BUREAU OF INVESTIGATION (SOUTH BENGAL) KHARAGPUR ZONE ORS. [ 2022 (7) TMI 1384 - CALCUTTA HIGH COURT] the Hon ble Court opined that the respondents could not make out any case of deliberate or wilful intention to avoid and evade payment of tax. In GULJAG INDUSTRIES VERSUS COMMERCIAL TAXES OFFICER [ 2007 (8) TMI 344 - SUPREME COURT ] while considering the provision of Section 78 and its various sub-Sections of Rajasthan Sales Tax Act, 1994, the Hon ble Supreme Court held that in penalty for statutory offences, there is no question of proving of intention or of mens rea as the same is excluded from the category of essential element for imposing penalty. Penalty is attracted as soon as there is contravention of statutory obligations. Intention of parties committing such violation is wholly irrelevant. The Supreme Court on repeated occasions has held that a statutory authority does not have any power to do anything unless such powers are specifically enumerated in the Statute which creates it. The authority merely performs the statutory obligation - Here, it does not appear that the authority acted in any manner contrary to law. Travelling without a proper e-way bill attracts penalty. The authority assessed the penalty amount and the petitioner deposited the same without a murmur. There is hardly any reason to interfere in the instant proceeding - Petition dismissed.

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• 2023 (3) TMI 527
  Cancellation of GST registration of petitioner - petitioner could not file its return regularly, due to ill health and certain reasons beyond the control of the petitioner - HELD THAT:- Learned counsel for the petitioner submits that his client has already deposited all necessary dues but if any further amount is still payable under the Rules, the same will be paid. If that be so, there is no justification for keeping this matter pending before this Court any further. Therefore, with the consent of both the sides, this writ petition is being disposed of by directing the respondents to restore the GST registration of the petitioner immediately on filing return along with deposit of statutory dues by the petitioner, in accordance with the Rules. The writ petition stands disposed of.

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• 2023 (3) TMI 526
  Maintainability of petition - availability of alternative remedy - appeal rejected on the ground of non-filing of the certified copy of the essential documents - opportunity of hearing not provided - ex-parte order - violation of principles of natural justice. HELD THAT:- This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, we form an opinion that the order is bad in law. This we say so, for two reasons-(a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences; (c) Also the authorities not to have adjudicated the matter on the attending facts and circumstances. All issues of fact and law ought to have been dealt with, even if the proceedings were ex parte in nature. The writ petition is disposed off.

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• Income Tax

• 2023 (3) TMI 525
  Reopening of assessment u/s 147 - Notice in the name of company amalgamated - HELD THAT:- After issuance of the notice under section 148 A(b), the petitioner herein, in the objections to the reopening, did not specifically highlight the factum of amalgamation of M/s. Pinkhem Investment Co. Pvt. Ltd. which led to the passing of the order under section 148A(d) of the Act and subsequent notice under section 148 of the Act, yet, in our opinion, the same would not preclude the petitioner from challenging the validity of the notice under section 148 on the aforementioned ground, keeping in view the ratio of the judgment in the case of Maruti Suzuki India Ltd. [ 2019 (7) TMI 1449 - SUPREME COURT] that participation in the proceedings would not operate as an estoppel against law, based upon the settled legal principle that the amalgamating entity had ceased to exist upon the scheme of amalgamation being approved. The petition is allowed. The impugned notice under section 148 AND the impugned order under section 148A(d) and all proceedings connected thereto are hereby quashed.

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• 2023 (3) TMI 524
  Reopening of assessment u/s 147 - Period of limitation to issue notice issued u/s 148A(b) - power to extend the time period under the first proviso to section 149(1) - frequent high value transactions through transfer and through RTGS in the account - information has been flagged on the insight portal as uploaded by the Directorate of Income Tax (Systems) after risk profiling based on enquiry reports and finding of Directorate of Income Tax (Investigation) and Directorate of Investigation Criminal Investigation - respondent authorities has forcefully argued before this Court that the case is covered under the Explanation in Section 149 where the asset also includes the deposits in the bank account, moreover, it is not an exhaustive definition but, by all means an inclusive definition - HELD THAT:- Having heard both the sides and having also considered the material on the record, the aspect that needs to be considered by this Court is as to whether any interim relief at this stage is necessary, since the re-assessment for the AY 2015-16, 2016- 17 and 2017-18 continue, pursuant to the notice issued under Section 148 of the Act in post Union of India versus Ashish Aggarwal [ 2022 (5) TMI 240 - SUPREME COURT] At this stage, learned advocate, Mr.Hardik Vora seeks permission to withdraw these petitions - Permission, as prayed for withdrawal, is granted keeping all contentions open for the petitioners.

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• 2023 (3) TMI 523
  Validity of Reopening of assessment u/s 147 - request to personal appearance through video conferencing not been considered - addition u/s 68 - HELD THAT:- In the impugned assessment order, no reasons have been given as to why the petitioner was not afforded personal hearing through Video Conferencing as requested by him through his communication dated 07.09.2021 to show that he had infact declared the sum in his balance sheet. This court is of the considered view that the respondents ought to have granted an opportunity of personal hearing to the petitioner through video conferencing as sought for by him in his communication dated 07.09.2021. Therefore, this Court is of the considered view that the principles of natural justice have been violated by the respondents before passing the impugned assessment order - Decided in favour of assessee.

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• 2023 (3) TMI 522
  Addition u/s 68 - loan received treated as unexplained credit in the book of accounts of the Appellant - Admission of additional evidence - HELD THAT:- Transaction under consideration is unsecured loan transaction. Similar loan transaction with the same lender was accepted as genuine in the assessment proceedings for the immediately preceding assessment year (i.e., Assessment Year 2012-13) after scrutiny assessment. Assessing Officer and CIT(A) have not doubted the identity of the lender. The Appellant had contended that the day-to-day operations of the proprietorship concern were managed by her husband who passed away after prolonged illness on 14.01.2017, i.e., few months after passing of the Assessment Order. Even if the documents filed by the Appellant before CIT(A) are considered to be additional evidence as alleged by the Assessing Officer, though the CIT(A) has not held so while disposing off the appeal, the Tribunal would not, in our view, be precluded to consider the same. Accordingly, in view of the above, we accept the contention of the Appellant that the Assessing Officer as well as the CIT(A) erred in making/confirming addition in the hands of the Appellant under Section 68 - Decided in favour of assessee.

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• 2023 (3) TMI 521
  Revision u/s 263 - As per CIT AO has not called for any details to ascertain the amount and nature of total remittances received by the assessee during the year - assessee had received amount from various AEs in India towards services rendered, however, in course of assessment proceedings, no details were called for to ascertain the taxability of these receipts - Also AO has not called for any explanation from the assessee with regard to not offering these incomes to tax in India and also did not examine the chargeability of the aforesaid receipts as Fees for Technical Services (FTS) or business income by examining the relevant facts as well as provisions contained in Income Tax Act and India Singapore DTAA HELD THAT:- The assessee operates ships in international traffic. Assessee s case for the assessment year under dispute was selected for limited scrutiny to examine whether the value of international transactions in services have been correctly shown in form 3CEB and return of income. As per section 92E of the Act, a person entering into international transaction or specified domestic transaction in a particular previous year shall have to obtain a report from an accountant in a prescribed form duly signed and verified by the concerned accountant setting forth the information as prescribed in the form. Rule 10E prescribes that the report from the accountant has to be furnished in Form 3CEB. Section 92B defines the expression international transaction to mean a transaction between two or more AEs. In other wards in terms of section 92E read with rule 10E, an assessee entering into international transaction with AEs has to furnish an audit report in From 3CEB reporting all information relating to such international transaction. It is observed, in due compliance with section 92E read with rule 10E of the Act, the assessee had furnished the Audit Report in From 3CEB reporting international transactions with AEs - amount was received by the assessee from freight services provided to an AE. Whereas, the rest of the amount was paid towards services availed from the AEs. Since, the assessee had reported international transactions with AEs, the Assessing Officer made a reference to the TPO for examining the arm s length nature of the international transactions with the AEs. The TPO passed a clean order under section 92CA(3) of the Act accepting the transactions with the AE s to be at arm s length. In pursuance to the order of the TPO, the assessee completed the assessment under section 143(3) of the Act accepting the return of income. In course of assessment proceeding, the Assessing Officer had issued a notice under section 143(2) of the Act on 19.07.2017 requiring the assessee to furnish the requisite information in respect of the limited scrutiny issues. Subsequently, the Assessing Officer issued a notice under section 142(1) of the Act on 01.04.2019 along with a questionnaire and in response to the query raised in the questionnaire, the assessee furnished its reply on 13.05.2019. Contents of the show cause notice issued under section 263 and the issues framed make it evident that there is no allegation of misreporting by the assessee in Form 3CEB or the return of income. The allegation is of not making any enquiry/verification. In this regard, we must say that learned CIT has completely misconceived the facts. A perusal of Form 3CEB report, a copy of which is at page 249 of the paper-book, clearly reveals that out of the amount of Rs.63,45,14,259/- reported by the assessee, only an amount of Rs.1,92,59,093/- represents income of the assessee and the rest of the amounts are payments made by the assessee. In fact, these facts are clearly reflected in the order passed by the TPO. Whereas, learned CIT has assumed that aggregate amount of transactions reported in Form 3CEB represents assessee s receipts. When the TPO has accepted the transactions with the AEs to be at arm s length, the Assessing Officer had nothing more to do. Moreover, when the assessee is a tax resident of Singapore holding a valid TRC issued by the Singapore Tax Authorities, the Assessing Officer had to grant benefit to the assessee as per the treaty. At the stage of assessment, the Assessing Officer certainly could not have enlarged the scope of limited scrutiny to examine, whether the assessee is entitled to treaty benefits or not, when the TRC is a valid piece of evidence available before him. Thus, when the Assessing Officer could not have examined the issues raised by learned CIT traversing beyond the scope of limited scrutiny, learned CIT cannot hold the assessment order to be erroneous and prejudicial to the interest of Revenue for non examination of issues, which are beyond the mandate given to the Assessing Officer. What the Assessing Officer could not have done directly in view of limited scrutiny norms, in the garb of revisionary powers under section 263 of the Act, learned CIT cannot do indirectly by enlarging the scope of limited scrutiny.Assessing Officer having confined himself to the issues of limited scrutiny, the Assessment Order passed cannot be considered to be erroneous and prejudicial to the interest of Revenue. CIT has misconceived the facts and misapplied the legal position while concluding that the assessee is not entitled to treaty benefit as it has been interposed as a conduit company for treaty shopping purpose. The assessee company was incorporated in Singapore in the year 2007 and continued its business since then. It is also a fact that the assessee holds substantial fixed assets in Singapore amounting to Rs.1728 croers, out of which, an amount of Rs.1324 crores pertains to vessels. It is also a fact that Singapore has grown into a large shipping hub in the world. Therefore, there is valid reason for setting up of the assessee company in Singapore for shipping business. Facts and materials on record reveal that the assessee regularly files tax returns before the tax authorities in Singapore. It also files reports before the corporate affairs authorities. There is no allegation by any of the authorities in Singapore or Netherlands against the assessee. That being the case, the allegations made by learned CIT that the assessee has not paid legitimate tax dues in Netherlands and Singapore are unsubstantiated, inasmuch as, are either baseless or imaginary. Allegation made by the CIT to hold that the assessee cannot be considered to be a tax resident of Singapore is because its key person is also a key person in Tata NYK India - As from the materials placed before us, we find the aforesaid allegation of learned CIT to be baseless. From the list of key managerial personnel furnished in the paper-book it is observed that all key managerial personnel are based in Singapore and were holding National Registration Identity Card issued by the Government of Singapore. It is also relevant to observe, whether the assessee is a tax resident of Singapore or not is a highly debatable issue and has to be decided based upon evidence gathered through proper investigation. Conclusion on these issues cannot be reached on conjectures, surmises, doubts and suspicion. Therefore, not only they are outside the scope of limited scrutiny, but, based on such debatable issues proceedings under section 263 of the Act cannot be invoked. As could be seen, holding the assessee not to be a tax resident of Singapore, learned CIT has observed that the assessee is liable to be taxed under the domestic law - assessee has not entered into any transaction of sale and lease back of vessels in the year under consideration. It is also evident that the assessee has not paid any lease rent to NYK Netherlands and even NYK Netherlands has not paid any dividend to NYK Japan. Therefore, the allegations of learned CIT are not borne out from record. As per Article 8 of India Singapore DTAA receipts from operation of ships and aircrafts in international traffic is taxable in the country of residence of the recipient. Therefore, as per the treaty provisions, amounts received by the assessee from operation of ships in international traffic would be exempt. Therefore, when the TRC was available before the Assessing Officer, in a way, he was justified in allowing benefit to the assessee under Article 8 of the Treaty. Though, the view of the Assessing Officer in granting benefit under treaty provisions may not be the only view but certainly it is one of the possible views under the given facts and circumstances. In any case of the matter, whether the assessee is entitled to treaty benefit or not is a highly debatable issue, hence, on such an issue an order cannot be considered to be erroneous and prejudicial to the interest of Revenue. Decision of learned CIT in treating the receipts from operation of ships in international traffic to be in the nature of royalty income - A conjoint reading of the show cause notice as well as order passed under section 263 of the Act coupled with the fact that ultimately he has restricted his directions only to inward freight income, thereby, accepting assessee s claim under section 44B in respect of income from coastal shipping and claim of exemption under Article 8 of the treaty in respect of income from outward freight amounting to Rs.56,13,86,432/-, reveals the mechanical approach of learned CIT in invoking jurisdiction under section 263 of the Act. Meaning thereby, various inconsistencies in the approach of learned CIT gives an impression that he himself was not sure about the nature and character of shipping income earned by the assessee. Though, before us, learned Departmental Representative made a submission that the deficiencies/shortcomings in the order passed under section 263 of the Act can be made good by the Tribunal, however, we are not impressed with such argument. In our view, we cannot assume the role of a second Revisionary Authority to review the order of learned CIT and fill up the lacunae in the said order. It is relevant to observe, in course of hearing, learned Departmental Representative has made extensive argument on the issue of treaty shopping, non-reporting of transactions with AEs in Form 3CEB report and various other issues. However, we are not able to take cognizance of such arguments as such issues were neither dealt with by learned CIT in the show-cause notice, nor in the revision order, hence, are extraneous for the purpose of adjudicating the validity of the order passed under section 263. Thus, in ultimate analysis, we hold that learned CIT was not justified in assuming jurisdiction under section 263 of the Act to revise the assessment order as the assessment order cannot be considered to be erroneous and prejudicial to the interest of revenue. Decided in favour of assessee.

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• 2023 (3) TMI 520
  Unexplained deposits in bank account - source of such deposits and sale transaction of agriculture land owned by the assessee - HELD THAT:- In the instant case, we find that there were cheque deposits of Rs 39,61,000/- on 22/02/2010 within few days of execution of sale deed on 19/02/2010 and therefore a clear nexus has been established between source of such deposits and sale transaction of agriculture land owned by the assessee. The same is corroborated from the bank statements of the buyer where the particulars of cheque deposits in the assessee s bank account exactly tallies and only inference which can be drawn is that the deposits are towards receipts of sale consideration of agriculture land. We are conscious of the fact that though the sale deed shows lower sale consideration which is also the stamp duty valuation however, once the assessee has brought on record the relevant facts and documentation as well as nexus between transaction of sale and deposit in bank account has been established then in absence of any contrary evidence brought on record, only inference which can be drawn from these facts and circumstances of the case is that the nature and source of deposit is nothing but represent the full value of consideration from sale of agriculture land so sold by the assessee and thus stand explained. The factum of agriculture land not being a capital asset has not been disputed by the Revenue in the instant case and thus, the full value of the consideration is not liable for tax and addition so sustained by the ld CIT(A) which represent a part of consideration is hereby directed to be deleted and the matter is decided in favour of the assessee.

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• 2023 (3) TMI 519
  Bogus LTCG - disallowance of exempted capital gain on sale of shares being bogus accommodation entry and addition being unexplained expenses incurred for taking such accommodation entry - CIT-A deleted addition - HELD THAT:- There cannot be any addition to the total income of the assessee of the regular items of income shown in the books of accounts as made by the AO in the present case. As such, the assessee has duly disclosed the income under the capital gain on sale and purchase of the shares of the company namely M/s Sawaca Business Machine Limited. Accordingly, we do not find any infirmity in the order of the learned CIT (A). Hence, we uphold the same. Thus the ground of appeal of the Revenue is hereby dismissed.

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• 2023 (3) TMI 518
  Income taxable in India - Royalty receipt - receipt from sale of software - transfer of copyright - Article 12(3) of the India-Ireland DTAA - HELD THAT:- As decided in ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED [ 2021 (3) TMI 138 - SUPREME COURT ] the amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Income Tax Act were not liable to deduct any TDS under section 195 of the Income Tax Act. - Decided against revenue. Disputed standard automated services in the nature of technical services - Whether these technical services were without human intervention - AR submitted that the question of human intervention is a question of facts and need to be examined by the Tax Authorities below but the same was not examined - HELD THAT:- The bench is of considered opinion that although reference has been made by the Tax Authorities below to have taken into consideration the aspect of questioning technical services on the basis of human intervention however, there seems to have been lack of examination of the issue by taking into account the relevant evidence and opinion of expert. Conclusion are more on basis of general perception of the nature of service. Thus, the bench is of considered opinion that this issue requires restoration to the files of the ld AO to decide the issue afresh after taking into consideration the judgment of the Hon ble Supreme Court in CIT Vs. Bharti Cellular [ 2010 (8) TMI 332 - SUPREME COURT ] In the light of the aforesaid the grounds in appeal of the assessee are allowed for statistical purposes.

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• 2023 (3) TMI 517
  Revision u/s 263 by CIT - Bogus purchases - CIT held AO had not investigated the bogus claim of purchases pertaining to these parties - Whether records of subsequent years could not have been considered by the ld.CIT for arriving at a finding that there was an error in the impugned order? - HELD THAT:- A bare and literal reading of clause (b) reveals that records include all records relating any proceedings under this Act which is available with the ld.CIT at the time of examination. There is no restriction in the Explanation 1(b) to section 263 ,where the term records is specifically defined, restricting records in any manner more so to a particular year only. Therefore, applying principle of literal interpretation, we see no reason to restrict the definition of records to that relating to the year for which revisionary jurisdiction is exercised, when the definition of the term clearly states that it includes all or any records relating to the assessee available with the ld.CIT at the time he examines it. In view of the same, the contention of the ld.counsel for the assessee that the ld.CIT could not have been referred to the records of the subsequent year i.e. Asst.Year 2015-16 for exercising his revisionary jurisdiction for the impugned year i.e. Asst.Year 2014-15 is rejected. Whether issue of purchases from these very same parties was examined during the assessment proceedings? - It is a fact on record that in subsequent year i.e. Asst.Year 2015-16 when these very same parties, from whom purchases were made in the impugned year, were examined and inquired into by the AO during assessment proceedings, it revealed that all these parties were bogus and non-existent even in the impugned year. The inquiry revealed that these parties did not have TIN for the impugned year, having surrendered it in earlier year. In the impugned year, the inquiry by the AO was clearly inadequate. The Ld.CIT has pointed out from the records that in response to inquiry conducted u/s 133(6) of the Act, these parties had responded in identical format. This ideally should have raised suspicion and prompted further inquiry. But the AO accepted their responses and treated the parties as genuine. Therefore, the inquiries conducted by the AO being inadequate, and the records of the Asst.Year 2015-16 revealing these parties to be non-existent and bogus, it cannot be said that the AO had taken a plausible view accepting the purchases from these parties as genuine. This plea of the assessee is also, therefore, rejected. Whether CIT without conducting any further inquiry had simply restored the issue to the AO to make further inquiry? - It is a fact on record that during the revisionary proceedings, the ld.CIT had confronted the finding of the AO in the subsequent year of the same parties having been found bogus and non-existent. The ld.CIT has noted that the assessee was given sufficient opportunity during revisionary proceedings to respond to the same and prove genuineness. But despite adverse material available relating to these parties, the assessee simply reiterated contentions which were made before the AO without dislodging the adverse findings for the assessment year 2015-16. Therefore, we find that, it cannot be said that the ld.CIT had arrived at his finding of error without conducting any inquiry and without making any further investigation into the issue. CIT had clear cut information that the creditors relating to these purchases were bogus. He had given sufficient opportunities to the assessee during the revisionary proceedings to counter this fact, but the same was not done by the assessee. Therefore in the absence of any explanation furnished by the assessee to controvert the findings of the Ld.CIT that the purchases were bogus, the ld.CIT, we hold, rightly found the assessment order erroneous causing prejudice to the Revenue in accepting assesses claim to such purchases as being genuine. CIT(A) held that the purchases though not made from these parties must have been made from some other parties, and accordingly restricted the addition to the element of GP embedded therein only, on the premise that the assessee must have gained on this count. Therefore, the fact that these parties were bogus and non-existent was not disturbed by the ld.CIT(A) in Asst.Yr. 2015-16. Therefore, this contention of the assessee merits no consideration. - Decided against assessee.

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• 2023 (3) TMI 516
  Non-admission of appeal u/s. 249(4) - AO invoked the provisions of section 153C - AO treated the return as defective u/s. 139(9) and issued notice to the assessee to rectify the defect, since the assessee did not rectify the defect, the AO proceeded to treat the return filed in response to notice u/s. 153C as non-est - assessee submitted that there is no undisputed liability to pay tax since the return filed has been treated as non-est by the A - HELD THAT:- We notice that the coordinate bench of the Tribunal in the case M/s. Garden City Resorts Pvt. Ltd. [ 2016 (8) TMI 1587 - ITAT BANGALORE] has considered a similar issue where the assessee has filed the original return which was initially to be treated as return filed in response to notice u/s. 153C and tax on the returned income was duly paid. The assessee had later filed a revised return u/s. 153C and did not pay the tax on the revised income and held the assessee has already paid the taxes. The assessee has not paid the taxes on the revised return which was not treated to be valid by the AO and was non-est in law. Since the revised return was treated to be non-est in law, there was no question of making payment of tax on the income declared therein - assessee has already paid the tax on the admitted income declared in the original return filed which was acted upon by the AO for framing the assessment u/s.153C of the Act. In the light of these facts, we are of the view that the CIT(Appeals) was wrong in dismissing the appeal of the assessee. In the present case Assessee has filed the original return in which the tax on the income returned is duly paid. On perusal of Form 35 filed we notice that the assessee has disputed the entire amount including what is declared in the return filed in response to notice u/s. 153C which is considered as non-est by the AO and the additions made by the AO. We also see merit in the submissions of the Ld. AR that it is the disputed taxes that is not paid and the undisputed tax on the admitted income as per the original return have been duly paid. Therefore in our considered view the ratio laid down by the Hon ble High Court and the coordinate bench of the Tribunal is applicable to assessee s case. Accordingly we set aside the order of the CIT(A) and restore the matter to the CIT(A) with a direction to re-adjudicate the appeal on merits. Needless to say that the assessee be given a reasonable opportunity of being heard. Assessee s appeal is allowed for statistical purposes.

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• 2023 (3) TMI 515
  TDS u/s 194C - non-deduction of tax on Ride Charges by OLA - payments to the TSPs [Transport Service Providers] for carrying out work relating to the carriage of passengers - assessee-in-default under section 201 (1 )/201 (1 A) for non deduction of TDS - assessee is a leading technology service provider in the cab hailing market in India to establish mobility for the Indian masses and it provides internet and mobile technology platform for cab hailing by the passengers [hereinafter referred to as Rider(s) ] as operates under the brand name OLA - As per the assessee, in the capacity of a mere facilitator, the assessee is the operator of the said platform, which essentially serves as a repository of potential users (Riders/ Customers as well as Drivers) and is capacitated, through advanced algorithms, to integrate Rider preference - who is responsible for providing the transportation services to the Rider i.e., the Driver, who has the necessary approvals and the vehicle or the assessee, who owns the app? - HELD THAT:- As held that the assessee merely acts as an intermediary between the Driver and the Rider. Therefore, when the Rider itself is exempt from deducting tax at source for such personal use, we see no reason why an intermediary such as the assessee, be forced to deduct tax at source at the time of disbursement of Fare to the Driver after collecting it in electronic mode from the Rider. We are also unable to reconcile the contradictory legal stands with respect to Fare collected by the Driver from the Rider directly and Fare involving electronic payment that is merely routed through the assessee, when the service is undisputedly the same. Whether recognition as an aggregator under Service Tax laws should not absolve the assessee of its liability under Income Tax laws? - This aspect has also been addressed in Uber India ( 2021 (3) TMI 326 - ITAT MUMBAI] in the favour of the assessee. Further, we find reason in the justification given by the Ld. AR that owing to the distinction carved out by the Legislature between an aggregator and Service Provider , the assessee revamped its accounting and did not route amounts of Fare to be forwarded by it to the Driver through its profit and loss account. Therefore, from AY 2016-17, the assessee did not deduct tax under section 194C while disbursing Fare to the Driver. There is no estoppel in law and therefore, no obligation can be imposed on the assessee basis a conservative position having been taken by it in the past, when none may have existed. We also agree with the submissions advanced by the Ld. AR that control in the present case is only a measure of compliance by the assessee with the guidelines issued by the Central Government/ State Governments in accordance with the Motor Vehicles Act, 1988 and applicable to an aggregator as defined under section 2(1A) therein, which the assessee before us is. We find that from 01.09.2019, the concept of aggregator has been recognised even under the Motor Vehicles Act, 1988. According to section 93(1)(iii) Motor Vehicles Act, 1988, a distinction between license of an aggregator and Transport Service Provider [for contract carriage under section 2(7) read with section 66 of the Motor Vehicles Act] like Driver has been carved out. Therefore, since an aggregator, like the assessee, is not entitled to obtain a license in respect of a contract carriage, it cannot be said to have sub-contracted work in respect of such contract carriage to any Driver. Capping of maximum fare by Regional Transport Authorities, puts it beyond all doubts as to who regulates the prices for taxis. Therefore, there is no merit in the argument of the AO/ CIT(A)/ Ld. Departmental Representative that the assessee controls the pricing. Fare which appears on the OLA App and what Driver receives may be different due to discounts/ incentives offered by the assessee and therefore, it is the assessee who controls the Driver and the transportation service - The discounts offered by the assessee have no bearing on the Driver s Fare. As far as incentives provided by the assessee to the Driver is concerned, on which tax is deducted at source by the assessee under section 194C, we are inclined to agree with the Ld. AR that it is merely one of the heads of income for the Driver under the Subscription Agreement, taxability of which has no bearing on the taxability of the payment of Fare to Driver. Even otherwise, as has been explained, it is a cost borne by the assessee out of Convenience Fee, i.e., its effective revenue. Distinction between suppliers of accommodation, airlines or food items and the assessee to state that the said suppliers carry out businesses that are independent from the platform on which they are listed - As each case must turn on its own facts and generalities cannot be accepted as valid legal propositions. We have already expressed our view that according to the contracts in place and the conduct of assessee, the assessee is an aggregator/ intermediary. The transportation services in question are provided by the Driver to the Rider and, therefore, the Driver s Fare is payable by Rider either directly or through the assessee. There cannot be any liability on the assessee under section 194C since it is a mere intermediary. The Hon ble Jurisdictional High Court in CIT v. Truck Operators Union [ 2011 (3) TMI 1017 - PUNJAB AND HARYANA HIGH COURT] and in CIT v. Cargo Linkers [ 2008 (3) TMI 619 - DELHI HIGH COURT] have also expressed the opinion that section 194C cannot be applied on intermediaries. DR contended that if the Rider cancels a trip request after the Driver has accepted it and has reached Rider s location, the Driver is not guaranteed a Cancellation Fee - Even if it is assumed that the Driver does not get any Cancellation Fee, we do not find any merit in this contention, since no transportation services are provided in such a case. Even if it is assumed that a related party of the assessee has provided such options to the Driver, it still, in our considered view, would not saddle the assessee with a liability to deduct tax at source under section 194C. Thus there is no contract/ sub-contract between the assessee and the Driver under which the Driver provides any transportation services either to assessee or to any Rider on behalf of assessee, for which the Driver is paid by assessee. The contract for transportation services is between the Driver and the Rider and the assessee only facilitates the entire process in the capacity of an aggregator . Accordingly, the AO and the CIT(A) erred in concluding that the assessee was providing transportation services which was sub-contracted to the Driver and consequently the assessee was liable to deduct tax at source while disbursing Fare to the Driver - Decided in favour of assessee.

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• 2023 (3) TMI 514
  Penalty u/s 271(1)(c) - claiming deduction under a wrong head by the assessee - HELD THAT:- As from the quantum of order passed by the NFAC against the assessment order passed u/s. 144 of the Act, we note that the addition stands substantially reduced and the penalty cannot be levied as observed by the NFAC. Revenue has not been able to find out or bring on record any documents / evidences to establish the necessary requirement for the levy of penalty u/s. 271(1)(c) which is either furnishing of inaccurate particulars and / concealment of income. Assessee had relied on the decision of Hon ble Bombay High Court in case of Commissioner of Income-tax-I, Mumbai vs. Bennett Coleman Co. Ltd.[ 2013 (3) TMI 373 - BOMBAY HIGH COURT] in which the same ratio has been laid down. Respectfully following the above, we do not find any merit in the grounds raised by the revenue.

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• 2023 (3) TMI 513
  Penalty proceedings u/s.270A - unaccounted rental income - misreporting of income - failure to disclose rental receipts in the return of income filed for the assessment year before the date of search - Assessee submitted that mere admission of undisclosed income towards rental income, does not per-se leads to conclusion that there is an undisclosed income within the meaning of Section 270A - HELD THAT:- In this case, from the facts available on record, it is abundantly clear that although, the assessee has received rental receipts from properties, but said rental income has not been accounted in the books of accounts, which is having a bearing on total income computed for the impugned assessment years. Therefore, in our considered view, it is a clear case of misreporting of income, which attracts penalty u/s.270A . Additions made towards undisclosed income is only estimation of rental receipts without any reference to incriminating material found during the course of search - we find that during the course of search, incriminating documents with respect to rental income received for FYs 2013-14 to 2019-20, were found and impounded. Further, the assessee was called upon to question the documents and in response to a specific question, the assessee admitted to have received rental income, but failed to disclose rental income in the return of income filed for relevant to assessment year. Therefore, we are of the considered view that had search not been conducted, the assessee would not have been disclosed income and thus, we are of the considered view that it is a case of misreporting of income as per provisions of Sec.270A(9) of the Act, and the AO has rightly levied penalty @200% of the amount of tax payable - no error in the reasons given by the Ld. CIT(A) to sustain penalty levied by the AO u/s.270A(9) - Decided against assessee. Penalty levied u/s.271AAB - rental income received from certain properties was not disclosed in the return of income filed for the impugned assessment years - assessee submitted that additions made towards rental income is on estimation basis without any reference to material found during the course of search in the possession of the assessee - HELD THAT:- in respect of rental income, the question of recording such receipts in the books of accounts does not arise, if the assessee does not maintained books of accounts for relevant to assessment year. Therefore, the findings recorded by the AO that the assessee would not have disclosed the rental income, had the search not been taken place, are only apprehension, but not based on relevant facts. Therefore, we are of the considered view that the AO is erred in levying penalty u/s.271AAB of the Act, towards addition made on rental receipts as undisclosed income, because, the assessee would have disclosed said rental receipts in the return of income to be filed for the relevant to AYs 2019-20 2020-21 when he has filed return of income. Since, as on the date of search, the due date for filing of return of income for those two assessment years was not expired, the AO cannot come to the conclusion that the assessee would not have disclosed such rental receipts for tax, had search has not been taken place. Therefore, we are of the considered view that the AO is erred in levying penalty u/s.271AAB - Decided in favour of assessee.

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• 2023 (3) TMI 512
  Addition u/s 68 - unsecured loan received by the assessee - assessee submitted before the assessing officer that the transactions mentioned in the table above are not related to the purchases , but are related to the loans taken from the above said parties and also furnished copies of confirmation letters, copies of income tax return filed by the above said parties, audited balance sheet of the above mentioned parties and copies of the ledger account of the assessee as appearing in the books of the above said parties in order discharge the responsibility placed upon it u/s 68 - HELD THAT:- Assessee has furnished all the details required for the purpose of discharging the initial onus placed upon it u/s 68 of the Act. Once the initial onus is placed upon the assessee, then the burden to disprove the same would shift to the shoulders of the assessing officer. We noticed that the AO has issued notices u/s 133(6) of the Act to the above said parties and they have also responded to the notices by furnishing the details that were called for. Though the AO has stated that the inspector of income tax could not find above said parties in the addresses given by them, the details of any of his report was not given to the assessee nor its explanation was called for. Hence no credence could be given to the so called report given by the Inspector. At the end, the AO has only placed reliance on the statements given by Praveen Kumar Jain and two others and those statements were also not confronted with the assessee. CIT(A) has passed a detailed order while deleting the addition made by the AO - Decided against revenue.

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• 2023 (3) TMI 511
  Validity of initiation of proceedings u/s 153C - assessment u/s 153C or u/s 153A - document seized in premises of third party - HELD THAT:- We fail to understand how the document seized in the premises of Mahaveer Medicare and how same pertains to the assessee. It is not disputed by the parties that Annexure A is nothing but narration of what had happened in premises of assessee during the course of search As admittedly there is warrant of authorisation to conduct search in the premises of the assessee and the cash was found in the premises of the assessee. The impugned addition in the case of the assessee is made on the basis of cash found and statement recorded from the assessee during the course of search in his residential premises. Therefore, the assessment in our view ought to have been completed under Section 153A r.w.s. 143(3) of the Act and not under Section 153C of the Act. We are also unable to appreciate the contention of the learned D.R. that both Sections 153A 153C are mentioned in the order and therefore there is no infirmity. From the notices issued and satisfaction recorded it is clear that the AO has completed the assessment under Section 153C and not under Section 153A of the Act. Since the assessment has been completed under Section 153C of the Act, we are of the view that the assessment framed suffers from infirmity and it is an incurable defect. Hence, we quash the impugned assessment order. Decided in favour of assessee.

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• 2023 (3) TMI 510
  TDS u/s 195 - disallowance u/s 40(a)(ia) - remittances made to CGTM, France - FTS - payments made by the assessee company to CGTM, France for providing technical assistance was covered by the definition of FTS as defined in Section 9(l)(vii) - HELD THAT:- After hearing both the parties, we are of the opinion that there is merit in the argument of ld. A.R. since the Tribunal has already held that there was no question of deduction of TDS on the payment made to CGTM, France for the service rendered by them to the assessee and the payment made to them does not fall under the fees for technical service. Hence, it does not attract the provisions of section 195 of the Act so as to deduct TDS. Accordingly, we allow the grounds taken by the assessee .

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• 2023 (3) TMI 509
  Adjustments u/s 143(1) (a) - Late deposit of PF ESI - HELD THAT:- We note that the said issue has been settled in the case of Checkmate Service P. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT ] as expounded that the employees contribution in this regard deposited after the due date specified in the relevant Act is not allowable. Disallowance of interest on late payment of TDS - HELD THAT:- The issue is debatable and, therefore, is outside the scope of purview of the provisions of section 143 (1) - Accordingly, respectfully following the precedence M/S. HEBE INFRASTRUCTURE PVT. LTD.[ 2022 (9) TMI 492 - ITAT DELHI ] we allow this issue in favour of the assessee.

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• 2023 (3) TMI 508
  Income Tax demands in view of the order passed by NCLT imposing moratorium in terms of section 14 of the IBC Code - Powers of AO in framing assessments as well as raising tax demand in the face of order passed by NCLT imposing moratorium under the provisions of Insolvency and Bankruptcy Code (IBC) - 2016 - HELD THAT:- As could be seen from the observations of the NCLT, debt due to various creditors, such as, unsecured financial creditors, operational creditors and other creditors, including Income Tax Department were extinguished and determined at Nil as per waterfall mechanism mentioned under section 53 of the IBC Code. This is clearly evident from List B of the Report of the IRP and finds place at entry 47 of List-B appended to the final order of the NCLT in respect of income tax demand for various assessment years. At this stage, it is further necessary to observe, though, at the stage of CIRP before NCLT, AO had communicated to the IRP regarding the upward revision in tax demand relating to various assessment years starting from 2005-06 to 2014-15, however, the IRP declined to consider the revised demand of the AO as Insolvency Resolution Process period has ended. Thus, the aforesaid facts clearly reveal that the Income Tax demands relating to the assessee for assessment years 2005-06 to 2014-15 have been fully extinguished and reduced to Nil in the final order of the NCLT. Thus we quash the impugned assessment orders. Resultantly, the impugned orders of Commissioner (Appeals) are set aside.

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• 2023 (3) TMI 507
  Levy of penalty u/s 271B - failure to get accounts audited as per the provisions of section 44AB - HELD THAT:- In the present case, it is no doubt true that no documentary evidence is available on record that the assessee had authorised the aforesaid auditor to prepare its tax audit report u/s 44AB - as noted by the CIT(A), there is no confirmation affidavit from the said auditor in this regard. At the same time, we cannot be oblivious to the undisputed fact that the auditor has signed the statutory audit report, balance sheet, and profit and loss account as per the Companies Act, 1956, which fact is evident from the copy of aforesaid documents forming part of the paper book. From the perusal of the profit and loss account we further find that the assessee incurred a net loss during the year under consideration, which in the absence of filing the return of income within the due date cannot be carried forward and set off. Thus, the non-filing of the return of income and audited accounts cannot in any way be said to be beneficial to the assessee. Therefore, the aforesaid facts prove that the assessee had reasonable cause in terms of section 273B for not furnishing the audited report as per section 44AB - AO is directed to delete the penalty levied u/s 271B. As a result, the grounds raised by the assessee are allowed.

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• 2023 (3) TMI 506
  Assessment u/s 153C - incriminating material found during the search or not? - HELD THAT:- The findings of the learned CIT(A) that no incriminating material relating to the assessee was requisitioned in the present case, we find, is the admitted case of the Assessing Officer - it is not disputed that the assessment for the impugned year was unabated. The proposition of law laid down by the Hon ble jurisdictional High Court in Saumya Construction ( 2016 (7) TMI 911 - GUJARAT HIGH COURT] that in unabated assessments, in the absence of any incriminating material, no addition under Section 153A/C could be made is also not dislodged before us. Therefore, without prejudice to the grounds raised by the Revenue, we find that the Ld. CIT(A) has rightly held in the facts and circumstances of the case, the assessment order having been passed invalidly and without jurisdiction. Therefore, the order of the Ld.CIT(A) setting aside the impugned assessment is upheld and the grounds of appeal Nos. 1 to 4 raised by the Revenue are dismissed.

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• 2023 (3) TMI 505
  Unexplained cash deposits during the demonetization period - HELD THAT:- The availability of cash and receivables with the assessee over a period of time is a fact not in dispute - As relying on the case of Ashish Plastic Industries [ 2015 (4) TMI 16 - SUPREME COURT] facts are identical as the issue for consideration is that it would amount to double taxation as the assessee herein has already paid due taxes on it. We find that the position of fact as appreciated in as much as that the receivables have already been subjected to tax is not in dispute. Accordingly, in these peculiar facts, we find no good reason to interfere with the impugned order. We further find support from the decision of the Apex Court wherein in the case of Ashish Plastic Industries (supra), the issue was remanded back to consider whether the assessee was able to prove that tax on the income generated from the sale of material had been paid to that extent, the Court held that the benefit should be extended to the assessee. - Decided against revenue.

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• 2023 (3) TMI 504
  TP Adjustment - comparable selection - RPT transaction within the relevant criteria of 25% - HELD THAT:- Icon Clinical Research India Pvt. Ltd.- We note that the DRP did not verify the computation of RPT by the assessee and that of the Ld.TPO. The Ld.TPO also did not consider the computation of RPT of this company as per the accounts aspect and therefore is remanded in the interest of justice. We direct the Ld.TPO to verify the same and to consider this comparable, only if the RPT transaction fits within the relevant criteria of 25% as applied by the Ld.TPO. Syngene International Ltd. - As submitted that in the notes to the financial statement this company also renders services in the stream of discovery chemistry and biology services, toxicology, pharmaceutical development, process development / manufacture of advanced intermediates, active pharmaceutical ingredients and bio-therapeutics. We therefore direct the Ld.TPO to exclude this company from the list. Working capital adjustment - HELD THAT:- We direct the Ld.AO/TPO to compute the Working Capital Adjustment on actuals. The assessee has also sought risk adjustment in this ground which may be considered by the Ld.TPO only if the assessee is able to establish the difference in risk undertaken by assessee with the comparables that remains for computing the margin. Treating the recovery of passthrough costs by the assessee as operating in nature - HELD THAT:- Considering the fact that there is no change in facts and the nature of pass-through costs being identical, respectfully following the above view taken by this Tribunal, in assessee s own case for A.Y. 2013-14 [ 2021 (10) TMI 908 - ITAT BANGALORE] we hold that the recovery of expenses is a separate international transaction that needs to be determined and the Ld.TPO has rightly computed the markup of such transaction.

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• 2023 (3) TMI 503
  Validity of final assessment order passed u/s 144C - failure to pass a draft assessment order u/s. 144C(1) - HELD THAT:- As in terms of section 144C(1), the Assessing Officer has no right to pass an assessment order pursuant to the order passed by the TPO. AO was mandatorily required to first pass a draft assessment order and communicate to the assessee, it is only after receipt of the draft assessment order the assessee has to accept the variations proposed by the Assessing Officer, it is only in case where the assessee opts to file appeal before the learned CIT (Appeals), the Assessing Officer can pass the final assessment order. In the present case, the Assessing Officer had passed the final assessment order straightaway which is in clear violation of provisions of section 144C of the Act. It is now settled position of law that non-adherence to the provisions of section 144C would result in quashing the assessment proceedings. See M/S SHYAM COLD STORAGE, [ 2013 (2) TMI 621 - ALLAHABAD HIGH COURT] , SRI DURGA ENTERPRISES [ 2014 (2) TMI 1297 - KARNATAKA HIGH COURT] ,JCB INDIA LTD. [ 2017 (9) TMI 673 - DELHI HIGH COURT] and TURNER INTERNATIONAL INDIA PVT. [ 2017 (5) TMI 991 - DELHI HIGH COURT] and VIJAY TELEVISION PRIVATE LTD. [ 2018 (10) TMI 1125 - MADRAS HIGH COURT] . Thus we hold that the assessment order is in the nature of final assessment order passed without adhering to the provisions of section 144C of the Act, is null and void and assessment is hereby quashed. - Decided in favour of assessee.

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• 2023 (3) TMI 502
  TP adjustment - international transaction pertaining to onsite development and project coordination fee - HELD THAT:- In the present case, assessee develops software development services and hardware solutions for telecom equipment manufacturers, carriers and service providers. While, the associated enterprise has been set up primarily for the purpose of front end support for offshore business, liaison with clients and prospective clients, client interaction and limited project support. Having considered the function, asset and risk profile of the foreign associated enterprise and the assessee, we are of the considered opinion that, in the present case, foreign associated enterprise is the least complex entity vis- -vis the assessee. Further, the relevant and reliable data for comparison with the associated enterprise is also available in public domain, which was also used by the assessee for benchmarking the international transaction. Thus, we are of the view that associated enterprise can be considered as a tested party, in the present case. Accordingly, we direct the TPO to conduct fresh benchmarking analysis after considering foreign associated enterprise as the tested party and arrive at the arm s length price for the international transaction pertaining to onsite development and project coordination fee . We also direct the assessee to provide all the data as may be required by the TPO for conducting the aforesaid exercise. In view of the above directions, the transfer pricing adjustment made by the TPO and upheld by the learned CIT(A) is set aside. We order accordingly. As a result, ground No. 1 raised in assessee s appeal is allowed for statistical purpose. Nature of expenses - Disallowance of custom duty paid - AR submitted that custom duty was paid towards debonding and shifting of the assets and therefore be allowed as revenue expenditure - HELD THAT:- From the perusal of record, we find that claim of the assessee was denied by the lower authorities without examining details pertaining to these assets as well as details of the debonding. Thus, we deem it appropriate to remand this issue to the file of the Assessing Officer for de novo adjudication. Further, assessee is directed to provide complete details of the assets and demonstrate the debonding of the assets to the Assessing Officer. We further direct that upon examination if it is found that custom duty was paid for debonding of the assets, which were earlier brought in STPI premises, relief be granted to the assessee to that extent. As a result, ground No. 2 raised in assessee s appeal is allowed for statistical purpose. Disallowance under section 14A - Sufficiency of own funds - HELD THAT:- As assessee had sufficient funds available for making the investment and in such a case, it can only be presumed that the investments were made out of such available funds. Thus we direct the Assessing Officer to delete the disallowance made under Rule 8D(2)(ii) of the Rules. AO by treating half percent of average investment made disallowance u/r 8D(2)(iii) of the Rules. In this regard, it is the claim of the assessee that only investments which yield dividend income during the year should be considered. We find that claim of the assessee is supported by decision of Special Bench of the Tribunal in ACIT vs Vireet Investment (P) Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] wherein it was held that only those investments are to be considered for computing average value of investment, which yields exempt income during the year. Accordingly, we direct the Assessing Officer to only considered those investments, for purpose of computation of disallowance Rule 8D(2)(iii) of the Rules, which yield dividend income during the year. As a result, ground No. 3, raised in assessee s appeal is allowed for statistical purpose. Disallowance of foreign exchange loss - HELD THAT:- We find that lower authorities have not examined the claim of the assessee that the purpose of the forward contract entered into by the assessee was in fact hedging against the foreign exchange fluctuation risk and the claim of the assessee was rejected merely by treating it as a speculative transaction under section 43(5) of the Act. In view of the above, we considered it appropriate to remand this issue to the file of Assessing Officer for de novo adjudication after examination of the details regarding the hedging as alleged by the assessee. Further, the assessee is directed to provide the complete details to the AO regarding its claim of hedging against exchange fluctuation risk. Upon examination, if the claim of the assessee is found to be correct then the loss on account of forward contract to the extent same pertains to hedging against the risk of foreign exchange fluctuation be allowed to the assessee. As a result, ground No. 4 raised in assessee s appeal is allowed for statistical purpose.

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• Customs

• 2023 (3) TMI 501
  Redemption fine in lieu of confiscation of goods - Mis-classification of imported goods - new Aluminium, Extrusion doors and panels or Aluminium Extrusion Scrap (trade) - request for mutilation of goods not accepted - visual examinations by officer cannot be preferred over and expert opinion about serviceability or otherwise of any imported goods - HELD THAT:- The goods have been cleared and duty discharged as per the Tariff Heading proposed by the department. The Certificate of Chartered Engineer produced by the party is actually deficient, as it has been obtained behind the back of Customs Officials and does not show the time and date of entry at the port for examination of goods by this expert. Even the expertise in the field of Chartered Engineering is not coming forth on record, as also the language of the certificate does not indicate that the author is prepared to face legal scrutiny of its document and to get it examined as per law in case of need by the authorities. It is therefore found that the same has been correctly rejected by the Commissioner (Appeals). Also, the party had made a request for mutilation of the imported consignment to indicate their bona fides which does not appear to have been considered by the department view of their acceptance of the department s stand exhibited through waiver of show cause notice as well as clearance of the consignments. It is noted that the party has already paid duty under the Tariff Heading proposed by the department and also shown its bona fides subsequent to the import as they sought mutilation of goods before clearance. The redemption fine is reduced to Rs. 1,00,000/- and the personal penalty under Section 112 to Rs. 10,000/- - appeal disposed off.

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• Service Tax

• 2023 (3) TMI 500
  Classification of services - Business Auxiliary Service (BAS) or Business Support Services (BSS) - rendering services to foreign companies for evaluation of prospective garment manufacturers, processing purchase orders, customer management, tracking of delivery schedules, operational assistance for marketing, customer service, pricing policies, managing, distribution, logistics etc. - export of services or not - HELD THAT:- It is found from a plain reading of clause (104c) of Section 65 that support services of business or commerce specifically relates to evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, etc., which were the activities undertaken by the appellant, while the definition of business auxiliary service under clause (19) of Section 65 of the Act is more general in nature. Hence, the services have been correctly classified under the specific heading of support services of business or commerce and does not require us to traverse through section 65A(2) of the Finance Act, 1994. This Hon ble Tribunal s judgment in the case of the appellant in M/s. Fifth Avenue v. Commissioner of Service Tax Chennai [ 2009 (3) TMI 133 - CESTAT, CHENNAI ] and referred to by Revenue, has at paragraph 4.1, clearly found without ambiguity that the services rendered to the vendors and the companies by the appellants therein conformed to the statutory definition of SSBC and hence, the services rendered to the vendors and companies were classifiable under SSBC and not under BAS. Hence section 65A of the Finance Act, 1994 was not required to be discussed in the order. As regards Revenue s claim that the LC margin retained by FASPL was nothing but consideration received for the marketing services rendered for vendors and identification and procurement services rendered to the buyers and hence, could not be classified as export of service - it is found that the matter has also been examined in detail by the Hon ble Tribunal in M/S. FIFTH AVENUE SOURCING PVT. LIMITED VERSUS CST, CHENNAI [ 2017 (9) TMI 895 - CESTAT CHENNAI ]. The issue hence does not survive for fresh consideration. Appeal allowed.

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• 2023 (3) TMI 499
  Classification of services - works contract service or interior decorator service - services such as partition work, metal glass works, civil works, wood work finishing, flooring, ceiling, false ceiling, hardware fittings, blinds, wall paper fixing, electrical work, plumbing work, AC ducting and other similar services in relation to constructed buildings/ offices provided by the appellant during the period 2011-12. This show cause notice dated 08.07.2013 refers to an earlier show cause notice dated 19.10.2011 that was issued to the appellant for the period 2006-07 to 2010-11. It is not is dispute that both the show cause notices contain the same charges and in fact, the impugned order notes in paragraph 37 also that since the demand proposed in the earlier said show cause notice dated 19.10.2011 was confirmed by order dated 28.11.2013, the demand proposed in the present show cause notice also deserves to be confirmed. HELD THAT:- It is not in dispute that the earlier order dated 28.11.2013 passed by the Commissioner holding that the services would fall under interior decorator service was set aside by order in RUSSELL INTERIORS PVT LTD VERSUS C.S.T., SERVICE TAX, DELHI [ 2018 (10) TMI 1478 - CESTAT NEW DELHI ] - it was held in the case that Once such activity is acknowledged by the Department to be a work contract services there is no justification by concluding the similar activities to fall under any other category. The order passed by the Tribunal confirming the demand under interior decorator service deserves to be set aside and is set aside - Appeal allowed.

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• 2023 (3) TMI 498
  Levy of Service Tax - appellant undertakes to operate and maintain power plants of various clients in terms of the agreements entered with them - liability of tax on operational charges provided to the owners of the power plants - levy of penalty - HELD THAT:- The issue whether service tax is required to be discharged on operational charges by the appellant has already been examined and decided in favour of the appellant by this Bench in the appellant s own case OPERATIONAL ENERGY GROUP INDIA PRIVATE LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI SOUTH COMMISSIONERATE [ 2019 (1) TMI 1236 - CESTAT CHENNAI] where it was held that The issue as to whether activity of production of electricity in power plant would amount to management of immovable property or otherwise has been analyzed and discussed by this Bench in the case of M/S. SHAPOORJI PALLONJI INFRASTRUCTURE CAPITAL COMPANY LIMITED, M/S. OPERATIONAL ENERGY GROUP OF INDIA PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI [ 2017 (6) TMI 225 - CESTAT CHENNAI] and held in favour of assessee. Thus, the assessee is not liable to pay service tax on the operational charges provided by them to the owners of the power plants and, imposition of penalty does not arise. Appeal allowed.

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• 2023 (3) TMI 497
  Levy of penalty u/s 76 78 of FA - the service tax along with interest had already been paid - Applicability of Section 73 (3) of Finance Act 1994 - HELD THAT:- As regard, the imposition of penalty under Section 76 in the present case, it is found that the issue is settled by various High Court judgments in CCE VERSUS FIRST FLIGHT COURIER LTD. [ 2011 (1) TMI 52 - PUNJAB AND HARYANA HIGH COURT] where it was held that simultaneous penalty under Section 76 cannot be imposed when penalty under Section 78 is imposed - thus, the penalty imposed under Section 76 is not sustainable, hence, the same is set aside. Penalty under Section 78 - HELD THAT:- The adjudicating authority even though invoked the extended period but by invoking Section 80 set aside the penalty by considering the fact that the appellant had admittedly paid the entire service tax along with interest before issuance of show cause notice. It is further found that the non payment of service tax was detected only during audit of the appellant s books of accounts, therefore, the transaction on which the service tax demanded were very much entered in the books of the appellant s account. The adjudicating authority has rightly set aside the penalty under Section 76 78 of the Finance Act, 1994 - there are no infirmity in the order of the adjudicating authority - appeal allowed - decided in favour of appellant.

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• Central Excise

• 2023 (3) TMI 496
  Valuation - non-inclusion of packing charges in the assessable value - place of removal - duty demand on Post-Manufacturing Expenses - discrepancies in the trial balance as well as the Chartered Accountant certificate produced by the respondents - refund of duty paid on After sales services, Pre-delivery inspection charges and Automobile cess - applicability of doctrine of unjust enrichment - demand of interest. Whether packing charges has to be included in the assessable value or not? - HELD THAT:- The said issue stands settled by the judgment of Apex Court in the respondent s own case as reported in ROYAL ENFIELD (UNIT OF EICHER LTD.) VERSUS CCE [ 2011 (8) TMI 40 - SUPREME COURT ] where it was held that the packing which is given by the appellant-company to their motorcycles is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate and, therefore, such cost is liable to be included in the value of the goods and the cost of such packing cannot be excluded - Applying the ratio laid down in the respondent s own case, it is held that packing charges has to be included in the assessable value. However, for the period 01.05.1996 to 31.03.1997 there has been already an order passed in favour of the respondent dropping the proposal to demand duty on packing charges - Thus, when the Order-in-Original has attained finality in earlier round the same cannot be disturbed in the second round of litigation. Duty demand on the amounts of post-manufacturing expenses (PME) - rejection on the ground of discrepancies in the C.A certificate when compared with the trial balance - HELD THAT:- The lower adjudicating authority has summarily dismissed the veracity of the C.A certificate. The Ld. A.R has stressed that as the respondent has failed to produce documents the C.A certificate cannot be accepted. It has to be noted that the respondent has been paying the duty provisionally and they have been filing returns reflecting the duty paid by them along with C.A certificate. The argument put forward by the Ld. A.R that the respondent has not produced necessary documents in the nature of trial balance to verify the veracity of the C.A certificate does not find favour - the Commissioner (Appeals) has correctly proceeded to accept the C.A certificate and modify the demand of duty on post-manufacturing expenses to Rs.12,01,418/-. This issue is found against the Revenue. Refund of duty paid on After-Sales Services, Pre-Delivery Inspection charges, Automobile Cess - Revenue argued that the claim of refund is hit by the bar of unjust enrichment and therefore Commissioner (Appeals) ought not to have held that the respondent is eligible for refund of duty paid on these charges on finalization of provisional assessment - HELD THAT:- The show cause notice as well as the adjudication has been carried out as finalization of provisional assessment. To deny the refund, the Department cannot now contend that the claim of refund is under Section 11B. The attempt is to deny the refund on the ground of unjust enrichment. Prior to 25.06.1999, the bar of unjust enrichment was not applicable to a refund arising out of finalisation of provisional assessment - In the case of COMMISSIONER OF C. EX., MUMBAI-II VERSUS ALLIED PHOTOGRAPHICS INDIA LTD. [ 2004 (3) TMI 63 - SUPREME COURT ] it was held that unjust enrichment is not applicable to refund consequent upon finalization of provisional assessment under Rule 9B of Central Excise Rules, 1944. Thus, the view taken by the Commissioner (Appeals) that the respondent is eligible for refund does not require any interference. Demand of Interest - HELD THAT:- From the records, it is seen that Commissioner (Appeals) has erroneously set aside the demand from 30.12.1983 to 31.03.1997 on the basis of OIO 9/97. The period covered by this OIO is actually from 01.05.1996 to 31.03.1996 only. The respondent accepted the impugned order and has not filed any appeal. The department has filed appeal against such order. The Ld. Counsel for respondent has argued that the interest upto the period set aside by the Commissioner (Appeals) may be waived - There is no ground raised in the Cross Objections with regard to the demand of interest. The respondent cannot claim a relief in an appeal filed by the Department. It is made clear that respondent is liable to pay interest on all balance duty demand on packing chares and PME if not paid by them. Appeal disposed off.

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• 2023 (3) TMI 495
  Transfer of CENVAT Credit to lessee unit - Department denied to transfer the CENVAT Credit lying in the account balance of the appellant-company stating that there is no express stipulation in the agreement to transfer the liabilities of the appellant company - request for transfer of CENVAT Credit can be denied on technical grounds or not - HELD THAT:- The Department has referred to the agreement between the parties to deny the permission to transfer the CENVAT Credit, with the reason that there is no express stipulation for transfer of all liabilities of the appellant-company to the lessee unit. On perusal of the agreement, it is found that there is a clear intention between the parties to transfer the ownership of the machinery belonging to the appellant unit to the lessee unit. Such transfer is done along with transfer of raw materials, components, capital goods etc. which indicates that the lessee unit is put into the shoes of a manufacturer in the place of the appellant-company. The agreement has to be construed as to what is the intention of the parties who have entered into agreement and not by word to word analysis. On going through the entire agreement, it is clear that there is consensus ad idem to transfer the ownership along with assets and liabilities to the lessee unit. Thus, the rejection of the request to transfer CENVAT Credit balance as per Rule 10 of CCR 2004 is without any legal or factual basis. The Department is directed to issue permission to the appellant unit to transfer credit to the lessee unit - appeal allowed.

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• 2023 (3) TMI 494
  Seeking grant of refund - rejection of part refund claim on the ground that the conditions with regard to 129 AR3As not fulfilled - HELD THAT:- From the refund application, it is clear that the appellant had submitted all the 144 AR3As. Therefore, there seems to be no reason on the partly refund is denied out of the total AR3As. Moreover, the appellant much before the passing of the adjudication order vide their letter dated 20.04.2011, brought to the knowledge of the commissioner referring their refund application that they had submitted all 144 AR3As along with the refund application. There is no dispute that the appellant had submitted all 144 AR3As. Therefore, there are no lapse on part of the appellant. It appears from the order that the cognizance of letter dated 20.04.2011 was not taken by the Adjudicating Authority. Therefore, the matter needs to be re considered taking into consideration that the appellant have submitted all the 144 AR3As. The appeal is allowed by way of remand to the adjudicating authority.

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• CST, VAT & Sales Tax

• 2023 (3) TMI 493
  Legality of the penalty orders and assessment orders - penalty imposed on the petitioner based on the data contained in the slips that were recovered from the premises of the petitioner - HELD THAT:- These are cases where the assessment for the years 2009-10 and 2010- 11 were mechanically completed based solely on the findings contained in the penalty orders passed by the Intelligence Officer for the years 2008-09, 2009-10 and 2010-11. The penalty orders were passed by placing reliance on the data contained in certain slips recovered from the business premises of the petitioner during a shop inspection that was carried out on 4.9.2010. It is not in dispute that those slips were recovered from one Balachandran, who was present in the premises of the petitioner on the date of inspection. As rightly found by the First Appellate Authority, the fact that Sri. K.I. Sreenivasan and Sri.K.V. Abdul Rasheed were deposing against their own interests by admitting that the data in the slips pertained to their business, ought to have weighed with the Department to initiate an enquiry against the said persons to ascertain whether they had suppressed any turnover for the purposes of taxation. They could have done this simultaneously with a protective assessment against the petitioner assessee. The fact that they did not do so ought to have operated against them in an adjudication of the petitioner s case. On the contrary, the Intelligence Officer as also the Tribunal appears to have discarded this valuable evidence and mechanically presumed that the data contained in the slips recovered from the premises of the petitioner pertained to the business of the petitioner. Since there are no justification in the Intelligence Officer as also the Tribunal having discarded the evidence tendered by Sri. Balachandran, Sri. K.I. Sreenivasan and Sri. K.V. Abdul Rasheed, we cannot uphold the reasoning of the Tribunal, in the orders impugned before us, as correct or rational. Further, as the assessment orders for the assessment years 2009-10 and 2010-11 were based on the penalty orders for the said years, and the said penalty orders in this judgment are set aside, the impugned order of the Tribunal, to the extent it restores the assessment orders for the said years, is also set aside. Revision allowed.

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• 2023 (3) TMI 492
  Valuation - place of removal - charges incurred for loading, unloading, stacking, and transportation formed part of the taxable turnover or not - charges shown separately would make any difference or not - Jurisdiction of authority for clarification under Section 94 of the Kerala Value Added Tax Act, 2003 - HELD THAT:- Annexure A, the purchase order specified the price details fixed, including taxes, excise duty, other levies, freight, insurance, loading, and unloading at the site. It also contained a clause that insists that all the materials that are ordered will have to be fully insured from the time of despatch from the manufacturer to the destination station, including one month s storage, thereafter at the cost of the contractor. The clauses in Annexures 1 and 2 clearly show that the transfer of title to the goods would take place only on delivery of goods at the customer s place and the customer s obligation to effect payment would arise only after the delivery is effected. Also the provisions of Chapter 3 of the Sale of Goods Act, in particular, section 22 that applies where the contract of sale of specific goods in a deliverable state, including the conditions to do such acts with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing is done. The law applicable has again been re-iterated in INDIA METERS LIMITED VERSUS STATE OF TAMIL NADU [ 2010 (9) TMI 878 - SUPREME COURT] where it was held that w hen the transfer of the property or the goods is to be at the place of the buyer to which the seller is under an obligation to transport the goods, the expenditure incurred by the seller on freight in order to carry the goods from his place of manufacture to the place at which he is required under the contract to deliver, would thus become part of the amount for which the goods are sold by the seller to the buyer and would fall within the scope of turnover . The discussions would lead to the irresistible conclusion that Annexure C order of clarification calls for no interference, and the OT appeal is without merit, and the same is, accordingly, dismissed.

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• Indian Laws

• 2023 (3) TMI 491
  Dishonour of Cheque - essential ingredients of Section 141 of the Negotiable Instruments Act, 1881, fulfilled or not - the case is that the petition of complaint has failed to mention the specific role of the petitioner in order to link the petitioner to the offence as alleged in the complaint - HELD THAT:- In the present case, the Magistrate took evidence on affidavit along with documents under Section 200 Cr.P.C. and considered the case to be suitable for issuing process under Section 202 Cr.P.C. on examination of the documents and the evidence of the complainant on affidavit and being satisfied as to the sufficiency of grounds for proceeding under Section 202 Cr.P.C. Thus the order under revision dated 24.02.2016 passed by the learned Metropolitan Magistrate, 6th Court, Calcutta being in accordance with law (Re expeditious trial of cases u/s 138 of the N.I. Act, needs no interference. Revision dismissed.

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• 2023 (3) TMI 490
  Seeking grant of bail - Petition is listed under the caption For Dismissal - HELD THAT:- The perusal of the Farad sheet shows that the Petitioner has not appeared in the matter after the order has been passed regarding bail. But considering that prayer regarding grant of bail is sought in the Civil Writ Petition, the judgment of Division Bench of this court in the case of NAGPUR CABLE OPERATORS ASSOCIATION VERSUS COMMISSIONER OF POLICE, NAGPUR AND ORS. [ 1995 (8) TMI 342 - BOMBAY HIGH COURT] will have to be noted. The Division Bench expounded the law as to in which circumstances criminal writ petition should be filed and in which circumstances civil writ petition needs be filed. The Division Bench has observed that if the writ petition/application under Articles 226 and/or 227 of the Constitution arises out or relates to a proceeding in which, if carried to its conclusion ultimately it may result in sentence of death or by way of imprisonment, fine or forfeiture of the property then such writ petition/application under Article 226 of the Constitution of India and / or under Article 227 of the Constitution, should be treated as a criminal writ petition and styled as such. Writ Petition is dismissed.

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