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TMI Tax Updates - e-Newsletter
March 23, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
FEMA
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Grant of anticipatory bail - applicant has cooperated to the fullest extent by submitting reply to the notice/summons issued to him - the personal liberty guaranteed under Article 21 of the Constitution of India is a fundamental right and in every case, arrest is not necessary. Under Section 438 Cr.P.C., where the implication of a person is for a non-bailable offence, he can apply for anticipatory bail. If the applicant cooperates with the inquiry, there is no requirement of his arrest. - HC
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Blocking of input tax credit - Provisional ITC - the ITC reversal mechanism, as laid down in section 41 read with Rules, is kept in abeyance. The facility to furnish GSTR – 2 and GSTR – 3 Forms is also not available. Accordingly, there is no system-based matching of the ITC being carried out presently, and till the time such provisions are given effect, the recipients shall be eligible to claim ITC provisionally on the basis of the invoice issued by customer. - The impugned order of blocking of the ECL of the writ applicant is hereby quashed and set aside - HC
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Maintainability of application - A question which is already pending or decided - The issues raised in the instant application and the issues mentioned in the assessment order and the notice mentioned supra are one and the same i.e., applicability of GST on entrance fee collected for entry into Brindavan Gardens and toll collected for use of Bridge. Thus first proviso to Section 98(2) of the CGST Act 2017 is squarely applicable to the instant case, as all the conditions therein are fulfilled. - Application rejected - AAR
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Valuation of supply - It does not contemplate to consider a guidance value prescribed under another legislation to be deemed to be the value of the supply, unless the transaction value itself is disputed and found not acceptable under Section 15 of the GST Act. In the latter case, the determination of the value of such supply shall be made as per the provisions of Section 15 of the GST Act. - AAR
Income Tax
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Reopening of assessment u/s 147 - excess weighted deduction under section 35(2AB) - JAO has grossly erred in alleging in the reasons recorded for reopening that petitioner had claimed deduction of disallowed amount by DSIR and that there has been failure to disclose fully and truly all the material facts. - While disposing petitioner’s objection JAO has conveniently chosen not to deal with the submissions of petitioner on merits. - Notice issued u/s 148 quashed - HC
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Reopening of assessment u/s 147 - since the proposed re-opening has been issued after expiry of four years of the end of the relevant assessment year, proviso to Section 147 of the Act would apply in as much as the Revenue has to show that there has been fault on the part of petitioner to truly and fully disclose material facts required for assessment. Not only as Revenue not made any such allegations in the reasons for re-opening, we cannot even cull out from the reasons recorded that Revenue has even suggested that there has been failure on the part of petitioner to disclose truly and fully material facts. - HC
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Rectification u/s 154 - addition u/s 69 r.w.s. 115BBE - disallowing 30% of the expenditure pertaining to salary, rent, contract and professional fee as per Section 40 (a) (ia) - The power of rectification of an order of assessment u/s 154 lies within a very narrow compass. The order to be rectified must be an order which reflects an error apparent on the face of the record. The error or mistake which would require determination after long drawn hearing would not come within the ambit of Section 154. - HC
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LTCG - Computation of cost of acquisition of the property - Unless the Assessing Officer proves that the assessee has demolished existing building and dismantled machinery & fittings and realized amount from sale of said dismantled assets or written off as scrap, then he cannot deny cost incurred by the assessee to acquire those assets. In our considered view, the Assessing Officer has completely erred in not considering cost incurred by the assessee to acquire asset while computing capital gain derived from sale of property. - AT
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Addition u/s 69A - cash sales undertaken in demonetised cash after 08/11/2016 - the specified bank notes can be measured in monetary terms since the guarantee of the Central Government and the liability of Reserve Bank of India does not cease to exist till 31.12.2016. In view of the above, the contention of the Ld.DR, treating the receipt of SBNs from cash sales as illegal and thereby invoking the provisions of section 69A is not valid in law. - AT
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Validity of Reopening of assessment u/s 147 - Reopening on the basis of the report of the Centralized Audit Unit, CAG - Different Apex Court pointed out that the audit report cannot be the basis for re-opening u/s. 148 of the Act. Further, there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for this assessment. There is no reason to believe that the income has escaped assessment during the year. - AT
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Exemption u/s 11 - activities of the assessee are charitable in nature or not? - AO Compare the assessee with a private colonizer - From the development undertaken by the appellant Authority, public is benefited at large. It is clear that the benefits of development undertaken by the appellant Authority is not restricted to an individual or particular group of individuals for which its objects should be considered charitable under forth limb of section 2(15) of Income-tax Act. Words “other objects of general public utility” have been decided in catena of decisions. The said expression is widest of connotation. Words “general” in the said expression is pertaining to a whole class. If the primary purpose and the predominant object are to promote the welfare of the general public, the purpose would be charitable purpose. - AT
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Penalty u/s 271(1)(b) - non compliance of notices u/s 142(1) - the AO was not having the present address of the assessee - when the notice issued u/s 142(1) was not served upon the assessee, and the AO had not conducted further enquiry regarding the current address of the assessee, then in the facts and circumstances of the case that the assessee had already furnished the current address in his letter dated 23.08.2021, the reasons explained by the assessee were bona-fide and reasonable - No penalty - AT
Customs
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Valuation of imported goods - rejection of declared value - enhancement of value - The prices may fluctuate on account of the vagaries of market but the contractual price agreed upon by the contracting parties would be sacrosanct unless the contract provides so. The contractual price entered between the parties need to be tested against the prevailing market prices on the date of contract rather than any subsequent price. - AT
Indian Laws
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Source of Income of Public Servant or Ostensible Owner - Addl. CIT - Abuse of official position, as public servant - possession of disproportionate assets - This Court is of the view that interest of justice would be served if A-1 is sentenced to rigorous imprisonment for a period of 5 years with a fine of ₹ 10,000/- under Section 7 of the Act - this Court is also of the view that the prosecution has been able to prove beyond reasonable doubt that A-3 and A-4 abetted A-1, in the commission of offence punishable under Section 13(2) read with Section 13(1) (e) and Section 7 of the Act. - HC
IBC
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Rejection of application of the petitioner for grant of registration under the Goods and Services Tax Act, 2016 - Company under liquidation under the provisions of IBC - primary ground for rejection was non-furnishing of the required documents - The liquidator could have approached the concerned authority well in time, however, if he has not done it because of the various details that he needed to gather and collate, he could not have been sent from the post to pillar - the respondent authority is directed to grant registration under the Goods and Services Tax Act, 2016 - HC
Central Excise
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Reversal of CENVAT Credit - creation of provisions in the balance sheet for the old and slow-moving inputs - On perusal of the balance sheet, it can be seen that the appellant has not fully written off the value of inventory - It is very evident from the balance sheet that the value of the inputs has not been fully written off. In such circumstances, Rule 3(5)(B) does not apply for the disputed period. - AT
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CENVAT Credit - duty paying invoices (document) - cenvat credit availed on the strength of railway receit - Rule 9 is subservient to Rule 3 for determining the admissibility of cenvat credit. If the requirements of Rule 3 are satisfied, the credit could not have been denied. Further, Rule 9(2) read with Rule 4A of the Service Tax Rules provides that any document which contains the details as prescribed under Rule 4A shall be considered as a proper duty paying document for all the purposes including availment of cenvat credit. - AT
Case Laws:
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GST
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2022 (3) TMI 910
Grant of anticipatory bail - the applicant has cooperated to the fullest extent by submitting reply to the notice/summons issued to him - applicant happens to be Director of a company which has gained a reputation in the said industry and was never indulged in any kind of breach towards any kind of Tax or other offences. - HELD THAT:- Upon consideration of the facts and circumstances of the case, this Court could not come across any averment in the counter affidavit by the respondent no.2 to the impact that the applicant has not cooperated with the investigation that indirectly admits the situation that the applicant is cooperating with respondent no.2 and he has promised to continue to cooperate with the investigation, the applicant has no prior criminal antecedents brought on record. His implication can be made under cognizable and nonbailable offences u/s 132 (5) of the C.G.S.T. Act, if the allegations are found to be correct. As disclosed above, the personal liberty guaranteed under Article 21 of the Constitution of India is a fundamental right and in every case, arrest is not necessary. Under Section 438 Cr.P.C., where the implication of a person is for a non-bailable offence, he can apply for anticipatory bail. If the applicant cooperates with the inquiry, there is no requirement of his arrest. In the event the applicant, Akshat Jain is arrested, he shall be enlarged on anticipatory bail till the inquiry is concluded by the Proper Officer under Section 70 (1) of the C.G.S.T. Act or assessment is made whichever is earlier, on execution of a personal bond of ₹ 5,00,000/- and two sureties of the like amount before the Proper Officer concerned on the conditions imposed - application allowed.
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2022 (3) TMI 909
Cancellation of petitioner's registration - Appeal barred by time limitation or not - HELD THAT:- The registration cancellation order dated 17.9.2019 was passed ex-parte pursuant to a notice claimed to be served through the common portal. The petitioner could not reply to the same as he claimed lack of knowledge. Thereby, ex-parte order was passed on 17.9.2019 cancelling the petitioner's registration. The said order is claimed to have been served to the petitioner again through the common portal on 17.9.2019 itself. The physical copy of the order dated 17.9.2019 was never served on the petitioner. Meanwhile, Government of U.P. issued Government Order no. 792 dated 29.7.2020 providing, in cases involving facts such as those obtaining in the present case, the service of the orders would be deemed to have been made on 31.8.2020. Then the period of limitation to institute appeal etc., stood suspended by various orders passed by the Supreme Court as also this Court. Thus the period of limitation from 15.3.2020 to 14.3.2021 stood suspended. The present petition deserves to be allowed as the limitation to file first appeal under Section 107 of the U.P. GST Act, 2017, was three months with delay condonable for a period of one month. Once the order dated 17.9.2019 is taken to have been served on the petitioner on 31.8.2020, then in view of the suspension of limitation from 15.3.2020 to 14.3.2021 the limitation to file the appeal would start running from 15.3.2021. In that case, the appeal having been filed on 19.3.2021, the same was wholly within time. Petition allowed.
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2022 (3) TMI 908
Blocking of input tax credit - reasons for blocking of credit not conveyed - whether the respondent no.3 was justified in blocking the ITC under Rule 86A of CGST Rules? - HELD THAT:- Rule 86A undoubtedly could be said to have conferred drastic powers upon the proper officers if they have reason to believe that the activities or invoices are suspicious. The Rule 86A is based on reason to believe . Reason to believe must have a rational connection with or relevant bearing on the formation of the belief. It is a subjective term and can be interpreted differently by different individuals. Prima facie, it appears that the Rule 86A does not even contemplate for issue of any show-cause notice or intimation notice. In such circumstances, the person affected may be taken by surprise when he would go to the portal to pay taxes and finds that his ITC is not usable. The power under rule 86-A which in effect is the power to block ECL to the extent stated earlier is drastic in nature. It creates a disability for the tax payer to avail of the credit in ECL for discharge of his tax liability, which he is otherwise entitled to avail. Therefore, all the requirements of rule 86-A would have to be fully complied with before the power thereunder is exercised. When this rule requires arriving at a subjective satisfaction which is evident from the use of words, must have reasons to believe , the satisfaction must be reached on the basis of some objective material available before the authority - Any administrative power having quasi-judicial shades, which brings civil consequences for a person against whom it is exercised, must answer the test of reasonableness. It would mean that the power must be exercised fairly and reasonably by following the principles of natural justice. The provisions made in rule 86-A would require the Competent Authority to first satisfy itself, on the basis of objective material, that there are reasons to believe that credit of input tax available in ECL has been fraudulently or wrongly utilised and secondly to record these reasons in writing before the order of disallowing debit of requisite amount to the ECL or requisite refund of unutilised credit, is passed or otherwise the order of blocking the ECL under rule 86-A would be unsustainable in the eye of law - It can be said that there is a specific mechanism for reversing the credit in the case of a discrepancy in the ITC availed by the recipient, against the output liability of the supplier. However, the ITC reversal mechanism, as laid down in section 41 read with Rules, is kept in abeyance. The facility to furnish GSTR 2 and GSTR 3 Forms is also not available. Accordingly, there is no system-based matching of the ITC being carried out presently, and till the time such provisions are given effect, the recipients shall be eligible to claim ITC provisionally on the basis of the invoice issued by customer. The impugned order of blocking of the ECL of the writ applicant is hereby quashed and set aside - Application allowed in part.
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2022 (3) TMI 907
Maintainability of application - A question which is already pending or decided - Exemption from GST - Brindavan Garden Park entrance fee - toll collection for use of Bridge - exempt vide Notification No.12/2017-Central Tax(Rate) dtd.28.06.2017 or not - relevant entries for the exemption - HELD THAT:- The instant application has been filed online on 06.12.2021 and the question raised therein is about the applicability of GST on entrance fee collected for entry into Brindavan Gardens and toll collected for use of Bridge. The assessment order and the notice issued by concerned authorities as mentioned supra, also pertains to the applicability of GST on entrance fee collected for entry into Brindavan Gardens and toll collected for use of Bridge. The issues raised in the instant application and the issues mentioned in the assessment order and the notice mentioned supra are one and the same i.e., applicability of GST on entrance fee collected for entry into Brindavan Gardens and toll collected for use of Bridge. Thus first proviso to Section 98(2) of the CGST Act 2017 is squarely applicable to the instant case, as all the conditions therein are fulfilled. The application is rejected as inadmissible, in terms of first proviso to Section 98(2) of the CGST Act 2017.
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2022 (3) TMI 906
Valuation of supply under GST - Immovable Constructed Commercial Property without any occupancy or Completion Certificate - area of the land exceeds 500 square meters or the number of Apartments proposed to be developed exceeds 8 inclusive of all phases - whether the sale consideration mentioned in the sale deed between the builder and the proposed purchaser should be considered as taxable value or Transaction value of the said immovable property or the guidance value fixed by the state government authorities for the purpose of the registration of such property? - HELD THAT:- Section 15(1) of CGST Act, 2017 he GST Act contemplates to treat the transaction value as the value of supply unless the same is rejected and the value determined as per Section 15 of the GST Act. It does not contemplate to consider a guidance value prescribed under another legislation to be deemed to be the value of the supply, unless the transaction value itself is disputed and found not acceptable under Section 15 of the GST Act. In the latter case, the determination of the value of such supply shall be made as per the provisions of Section 15 of the GST Act. However, in case of apartments, the land value is fixed at one third of the value of the apartment involving the transfer of land along with the building, in Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. In such cases, the value of land is calculated as per the above specification and no other value is acceptable for the said land value.
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Income Tax
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2022 (3) TMI 920
Exemption u/s 11 - rejecting application made u/s 12AA - Charitable activities u/s 2(15) - CIT(E) rejected the application on a ground that the genuineness of the charitable trust is under question - HELD THAT:- CIT(E) has not pointed out on what material it came to a conclusion that genuineness of the charitable trust is in question. Section 12AA of the Act mostly focused on the two issues (i) the genuinity of the trust (ii) the activity of the trust is similar with the main object of the trust as discussed above. Assessee in its paper book has annexed the approval of Tamil Nadu School Education under Govt of Tamil Nadu which was granted by the Additional Directorate (Higher Secondary Tamil Nadu School Education). The Nursery, Primary and Higher Secondary schools are running under the Trust. Mere, application was made after survey or earlier the fees were collected by the secretary of the trust should not be the reason for rejecting application made U/s 12AA - CIT(E) correctly pointed out that the assessee had the lack of genuinity. But it was before the application of registration. But after the application made u/s 12AA of the Act, no such irregularities were found out by the revenue authority. Different financial statements are filed with the paper book and the trust invested in fixed assets for running the institutions. The Income Tax assessments of the assessee were made by the revenue in different years. The copies of the orders are annexed in Paper Book-5 of assessee in page no 1-236. It is very clear from the assessment orders that the existence, activity genuinity are not in question. Application filed by the assessee Trust for grant of registration under Sec. 12AA of the IT Act is restored to the file of the CIT(E) for fresh adjudication - Appeal of the assessee is allowed under statistical purpose.
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2022 (3) TMI 919
Disallowance on deduction of foreign exchange gain under 80IC - assessee claimed 80IC deduction on such foreign exchange gain on the ground that these had a direct and first degree nexus with the manufacturing activity of the assessee and accordingly eligible for deduction - As per AO foreign exchange gains do not satisfy the derived from business condition that the gains do not have immediate and direct nexus with the manufacturing activity of the assessee and hence the same are not eligible for deduction - HELD THAT:- We are in agreement with the submissions of the assessee that foreign exchange gains are inextricably linked to export of goods and hence have a direct and first degree nexus with the manufacturing activity. The assessee is accordingly eligible for deduction u/s. 80IC on such foreign exchange gain. In the case of Quadrant EPP Surlon Uttranchal (P.) Ltd. [ 2017 (11) TMI 1767 - ITAT DELHI] the Tribunal held that since foreign exchange fluctuation arose on account of trading transactions and excess amount received due to upward revision of foreign exchange rate was part of sale proceeds only, said fluctuation was eligible for section 80-IC deduction. We, therefore, find no infirmity in the order of the ld. CIT(A) whereby the disallowance on foreign exchange gain has been deleted. - Decided against revenue. Disallowance of deduction of export benefits u/s. 80IC - assessee during the year had received export benefit which are in the nature of excise duty refund, as its Baddi unit is eligible for outright excise duty exemption and same do not constitute independent source of income - HELD THAT:- The Supreme Court in the case of CIT vs. Meghalaya Steel Ltd. [ 2016 (3) TMI 375 - SUPREME COURT] has given a categorical finding that where assessee received (a) transport subsidy; (b) interest subsidy; (c) power subsidy; and (d) insurance subsidy which were reimbursements of manufacturing cost incurred by assessee, deduction of said subsidies was allowed under sections 80-IB and 80-IC Accordingly, in our view, in the facts of the present case and in light of various decisions cited before us, the CIT(A) has not erred in granting 80IC deduction to the assessee in respect of its export benefits representing refund of excise duty paid u/s. 80IC of the Act. We therefore hold that the assessee is eligible for deduction on export benefits on account of refund of excise duty under section 80IC of the Act. Deduction of scrap value u/s. 80IC - HELD THAT:- In the case of Reckitt Benckiser Healthcare (I) Ltd. [ 2015 (2) TMI 506 - CALCUTTA HIGH COURT] has held that profits and gains from scraps resulting in manufacturing process were eligible for deduction u/s. 80IC. Again, the Gujarat High Court in the case of CIT vs. Shreeram Tech Ltd. [ 2013 (10) TMI 306 - GUJARAT HIGH COURT] has held that compensation received by industrial undertaking from insurance companies on account of loss raw materials and finished products in fire, would be eligible for deduction u/s. 80IA of the Act. In view of the above, we do not find any infirmity on the order of ld. CIT(A) in allowing the claim of deduction u/s. 80IC of the Act on scrap income. We accordingly hold that the assessee is eligible for deduction u/s. 80IC of the Act on income from sale of scrap. Addition of expenses disallowed u/s. 40(a)(ia) - assessee has claimed deduction u/s. 80IC of the Act on expenditure disallowed u/s. 40(a)(ia) - HELD THAT:- In view of the circular no. 37/2016 dated 2nd Nov, 2016 and the decision in the case of DCIT vs. Ascendum Solutions Pvt. Ltd. [ 2017 (10) TMI 419 - ITAT AHMEDABAD] has held that where disallowance results in an enhancement of business profit, but such an enhancement is revenue neutral in as much as relates to business profits are eligible for disallowance under chapter VI. In view of the above and the language of CBDT Circular No. 37 dated 2nd Nov, 2016, we are of the view that CIT(A) has not erred in deleting the addition made on account of disallowance u/s. 40(a)(ia) of the Act. Accordingly, the ground no. 6 of the Revenue is dismissed. We are of the view that the assessee is eligible to claim deduction u/s. 80IC of the Act in respect of disallowance made u/s. 40(a)(ia) of the Act on account of non-deduction of TDS.
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2022 (3) TMI 918
Revision u/s 263 - denial of natural justice - assessee has argued on the legality of the order passed which is stated to be an arbitrary exercise of power as order is assailed as having been passed without caring to provide reasonable opportunity of being heard to the assessee leading to the order being passed in a mechanical manner - Whether the order has been passed ignoring the submissions of the assessee admittedly received on the ITBP portal and incorrectly noting that no reply has been given by the assessee? - qua the increase in share application pending before the CIT(A), the assessee had opted for 'Vivad Se Vishwas Scheme' - HELD THAT:- we deliberate that if the ld. PCIT who knowingly gives inadequate time to the assessee to file its reply considering the reply filed irrelevant notices that the assessee is seeking time, we do not find any reason why the ld. PCIT could not grant a hearing saying that time has been granted fix a date and then pass the order after hearing the assessee. However, in the facts of the present case, ld. PCIT fails to do so. So, whether the reply was noticed or remained un-noticed, the consequences are that if it was noticed, ld. PCIT failed to do what he was required to do and if it was not noticed, then he passed an order mechanically These facts when further noticed in the backdrop where the ld. PCIT after issuing the Short Cause Notice on 23.11.2020 sat over the very same information, made no efforts from any source, whatsoever to address the specific facts or the specific concerns from any other information in the public domain or made any efforts seeking information from the Investigation Wing of the Department, sat over the information for a period of almost 5 months and passed the order upsetting a statutory order which has been passed without any compunction. The said arbitrary exercise of power, we find cannot be upheld. Notwithstanding the fact that the right to be heard is very important and salient right which cannot be allowed to be trifled with. It has been noted judicially across all common law countries of the world. No decisions need be cited to quote that it is a well settled legal position that no party can be visited by an adverse order without being heard. The blatant fact staring on the face of the record is that not only the power has been exercised in an arbitrary, unfair manner contrary to settled legal positions, it has also been exercised where the ld. PCIT himself failed to do what he was required to do. The fact also appears that the provisions of the Act necessitated that the ld. PCIT before upsetting a statutorily passed order exercising the revisionary powers is expected to do the basic exercise of undertaking enquiries etc. at his end. It is incumbent upon him to undertake an enquiry and set out the facts. This exercise, in the facts of the present case has not been done. Accordingly, we find that the appeal has to be allowed. The position of law as considered for service of notice which proceeds on the footing that effective opportunity of being heard was denied to the assessee, we find the order passed deserves to be quashed. Accordingly, considering the factual background as discussed above at length and the position of law, we deem it appropriate to quash the order passed on the legal grounds itself. Hence, the arguments advanced by the parties on merits though noticed in the order need not be adjudicated upon consequently. Appeal of assessee allowed.
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2022 (3) TMI 905
Reopening of assessment u/s 147 - excess weighted deduction under section 35(2AB) - HELD THAT:- In computation of income in assessment order, Disallowance after excess weighted deduction under section 35(2AB) has been added to the income of the petitioner. Therefore, the JAO has grossly erred in alleging in the reasons recorded for reopening that petitioner had claimed deduction of disallowed amount by DSIR and that there has been failure to disclose fully and truly all the material facts. Hence, the said amount of weighted deduction is required to be added to the income and that has escaped assessment. As noted earlier in the assessment order this amount is already added to the income. When these facts were brought to the notice of JAO in the objection dated 26.11.2021 fled through petitioner s Chartered Accountant in the order dated 24.01.2022 impugned in this petition, disposing petitioner s objection JAO has conveniently chosen not to deal with the submissions of petitioner on merits. - Decided in favour of assessee.
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2022 (3) TMI 904
Charging of interest u/s 234B - payment of advance tax -TDS was not deducted on the income received - As per ITAT Non-resident is liable to pay tax but there is no question of payment of advance tax; and that, therefore, assessee is not liable to pay interest under Section 234B on account of default of the payer in deducting tax at source from the payments made to the assessee - HELD THAT:- This Court finds that in the impugned order, the Tribunal has relied upon the judgment passed by this Court in Director of Income Tax vs. Jacabs Civil Incorporated [ 2010 (8) TMI 37 - DELHI HIGH COURT] which has been confirmed by the Supreme Court in M/s Mitsubishi Corporation [ 2021 (9) TMI 875 - SUPREME COURT] This Court is also in agreement with the opinion of the Tribunal that the penalty can only be levied in such cases where concealment of income has been proven. If the quantum order itself has been set aside in an appeal preferred by the respondent/assessee, there is no question of penalty being levied. Also see M/S. HARSH INTERNATIONAL PVT. LTD. [ 2020 (12) TMI 1082 - DELHI HIGH COURT] - No substantial question of law arises.
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2022 (3) TMI 903
Income accrued / taxable in India - Royalty u/s 9(1)(vi) of the Act read with Article 12 of the Indo US DTAA - licensing of software products of Microsoft in the Territory of India by the Respondent - HELD THAT:- This Court finds that the issue raised in the present appeal is no longer res integra as the Supreme Court in Engineering Analysis Centre of Excellence Private Limited [ 2021 (3) TMI 138 - SUPREME COURT] as held that 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. Also see EY GLOBAL SERVICES LIMITED AND EYGBS (INDIA) PRIVATE LIMITED [ 2021 (12) TMI 571 - DELHI HIGH COURT] - Decided in favour of assessee.
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2022 (3) TMI 902
Reopening of assessment u/s 147 - deemed dividend addition - eligibility of reasons to believe - HELD THAT:- When we consider the reasons for re-opening the stand of the ACIT who is the Jurisdictional AO(JAO) is that the findings of CIT (A)) that the addition under Section 2(22)(e) of the Act for A.Y. 2008-09 should be made in the hands of petitioner who is substantial shareholder in PGPL and KFPL is correct and therefore the amount has escaped assessment for A.Y. 2008-09. What is strange is that even before the reasons for re-opening were recorded and even after the reasons was recorded and notice was issued to petitioner on 24th January, 2015, Revenue has argued in this court on 4th July, 2014 that the conclusion of CIT (A)) was erroneous and addition should have been actually in the hands of PGPL. One of the substantial question of law proposed in the appeal filed in this court by Revenue in IMPACT CONTAINERS PVT. LTD AND OTHERS [ 2014 (9) TMI 88 - BOMBAY HIGH COURT] was Whether on the facts and in the circumstances of the case and in law, the Hon ble Tribunal was justified in holding that deemed dividend is taxable only in the hands of a shareholder and not in the hands of a non-shareholder, by relying on the decisions without appreciating that the ratio of the decisions in the above cited case has not been accepted by the Revenue . The reason to believe that income has escaped assessment is not sustainable - since the proposed re-opening has been issued after expiry of four years of the end of the relevant assessment year, proviso to Section 147 of the Act would apply in as much as the Revenue has to show that there has been fault on the part of petitioner to truly and fully disclose material facts required for assessment. Not only as Revenue not made any such allegations in the reasons for re-opening, we cannot even cull out from the reasons recorded that Revenue has even suggested that there has been failure on the part of petitioner to disclose truly and fully material facts. - Decided in favour of assessee.
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2022 (3) TMI 901
Rectification u/s 154 - addition u/s 69 r.w.s. 115BBE - disallowing 30% of the expenditure pertaining to salary, rent, contract and professional fee as per Section 40 (a) (ia) - HELD THAT:- Rectification order came to be passed during the pendency of the present writ petition. Earlier order dated 28.08.2021 would have to be read in conjunction with the order dated 29.11.2021. On a conjoint reading of both the orders, it is evident that the two issues raised by the petitioner for rectification has been gone into by the assessing authority. While on the issue pertaining to unexplained cash credit and consequently the addition under Section 69 with view taken is that this is not a mistake apparent on the face of the record and therefore, rectification u/s 154 of the Act is not warranted. Regarding disallowance u/s 40 (i)(a) is concerned, the same has been rectified in the manner indicated above. The power of rectification of an order of assessment u/s 154 lies within a very narrow compass. The order to be rectified must be an order which reflects an error apparent on the face of the record. The error or mistake which would require determination after long drawn hearing would not come within the ambit of Section 154. We are of the view that prayer of the petitioner for rectification has been gone into by the AO following which the assessment order would stand rectified. If the petitioner is still aggrieved by such assessment order as rectified he can assail the same in appropriate appellate proceedings, which he has already availed of.
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2022 (3) TMI 900
Penalty u/s 271(1)(c) - claim of fraudulent refund - as per AO assessee has willfully furnished inaccurate particulars - HELD THAT:- In the quantum proceedings, the assessee accepted the addition because he was misled by Mr. Nagesh Shastry who was instrumental in fling the revised return of the assessee making false claims. However, the same facts and arguments in the penalty proceedings are not considered. In our opinion, it is proper to examine whether Mr. Nagesh Shastry is instrumental in claiming fraudulent refund on behalf of assessee by indulging in malpractices. If Mr. Nagesh Shastry is found solely responsible for such fraudulent act and that assessee's act is bonafide, penalty cannot be levied. With these observations. we remand this issue to the file of the CIT(Appeals) to consider all these facts and decide the issue afresh in accordance with law, after affording assessee opportunity of being heard. Appeal filed by the assessee is treated as allowed for statistical purposes.
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2022 (3) TMI 899
Assessment u/s 153A - Additions on account of certain items of income - whether addition apparently was not made based on seized materials - search and seizure operation under section 132 - HELD THAT:- We are convinced that the addition of agricultural income as income from other sources was not based on any incriminating/seized material found as a result of search. Even, the disallowance of loss claimed against house property income is also not with reference to any seized material. It is a fact on record that on the date of search, the assessment proceedings relating to the impugned assessment years did not abet As per the ratio laid down by the Hon ble Jurisdictional High Court in the case of CIT vs. Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT ] in a proceeding under section 153A of the Act, addition has to be made on the basis of seized/incriminating materials found as a result of search. Since, the decision of the Assessing Officer to treat the agricultural income as income from other sources and disallowance of loss claimed against house property income are not based on incriminating/seized material, no such addition/disallowance could have been made by the Assessing Officer. Accordingly, we delete the addition/disallowance made on account of agricultural income and set off of loss against house property income - Assessee appeal allowed.
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2022 (3) TMI 898
Disallowance on account of Central Excise Duty (Basic Excise Duty BED recoverable and Additional Excise Duty AED recoverable) which was written off - HELD THAT:- The writing off of unutilized CENVAT credit has been allowed by the revenue in the A.Y. 2010-11.The assessee is in the business of manufacturing of woolen, cotton and blended hosiery knitwears declared taxable income. Whenever the Excise Duty is written off at the time of surrender of excess registration certificate as the assessee would no longer be in a position to utilize the Excise Duty. The assessee pays CENVAT on purchase of raw material and claims benefit of set off against Excise Duty payable on manufactured items. The assessee increases the value of the purchases in respect of duty paid in the form of AED but the same could not be adjusted against the CENVAT rules because on the finished goods only the basic duties levied. Therefore, the difference of loss incurred on account of rate differential between input and output Excise Duty is allowed to be claimed as business expenditure. This is generally a regular practice in the manufacturing sector which is also followed by the assessee from year to year. CENVAT credit receivables which could not be set off has been rightly claimed by the assessee as deduction. Appeal of assessee allowed.
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2022 (3) TMI 897
LTCG - Computation of long term capital gain derived from sale of land by reducing indexed cost of acquisition of the property - assessee claimed that it has redeveloped building and renovated without removing existing structure, including plant and machinery - AO recomputed indexed cost of acquisition by taking into account cost of land which was paid by the assessee plus applicable stamp duty - HELD THAT:- When the Assessing Officer is not disputing fact that the assessee has paid ₹ 4 crores consideration for acquiring property, then the Assessing Officer ought to have allowed deduction towards cost of acquisition, including cost of building, machinery and fittings, because when the consideration was paid for fittings machinery and same was integral part of building, then the AO cannot simply ignore amount paid for acquiring assets attached to the building. It was not the case of the AO that the assessee has claimed depreciation on machinery and fittings, including building. It is also not the case of the Assessing Officer that the assessee has demolished existing building and dismantled plant fittings. Unless the Assessing Officer proves that the assessee has demolished existing building and dismantled machinery fittings and realized amount from sale of said dismantled assets or written off as scrap, then he cannot deny cost incurred by the assessee to acquire those assets. In our considered view, the Assessing Officer has completely erred in not considering cost incurred by the assessee to acquire asset while computing capital gain derived from sale of property. CIT(A), after considering relevant facts has rightly deleted additions made by the Assessing Officer Disallowance of amount paid for construction of building - AO has disallowed payment on the ground that the assessee could not produce original bills in support of various expenditure incurred for construction of building - Amount paid to M/s. Bharath Polymers - HELD THAT:- We do not agree with the reasoning given by the Assessing Officer for the simple reason that when the assessee has explained reasons for not furnishing original bills and further, filed photocopies of bills along with corroborative evidence to prove incurrence of expenditure for construction of building, AO ought to have allowed deduction towards payment made to above party. AO without appreciating facts has simply disallowed payment made by the assessee towards construction of building without assigning proper reasons. The learned CIT(A), after considering relevant facts has rightly deleted additions made by the Assessing Officer. Hence, we are inclined to uphold findings of the learned CIT(A) and reject grounds taken by the revenue. Payment made to M/s. Devi Designers Decorations - reasons given by the Assessing Officer to disallow amount paid to above party is incorrect and without any basis. If at all, the Assessing Officer was having any doubt on payment made by the assessee, then A.O. should have summoned the supplier to verify fact of payment made by the assessee. The Assessing Officer without carrying out proper enquiry, has simply rejected contention of the assessee only on the ground that original bill was not furnished by the assessee. In our considered view, whether the bill submitted by the assessee is in original or duplicate, as long as other corroborative evidences supports claim of the assessee, then the Assessing Officer ought to have allowed deduction towards amount paid for construction of building. The learned CIT(A), after considering relevant facts has rightly directed the Assessing Officer to allow deduction towards amount paid to M/s. Devi Designers Decorations. Hence, we are inclined to uphold findings of the learned CIT(A) and reject grounds taken by the revenue. Appeal filed by the revenue is dismissed.
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2022 (3) TMI 896
Addition u/s 69A - cash sales undertaken in demonetised cash after 08/11/2016 - cash sales shown by the assessee dafter 08/11/2016 in demonetised currency when the business of the assessee is not among persons permitted to accept demonetised cash after 08/11/2016 - HELD THAT:- We find that there was sufficient cash balance with the assessee The Specified Bank Notes (Cessation of Liabilities) Act, 2017, defines appointed day vide Section 2(1)(a). As per Section 2(1)(a), appointed day means the 31st Day of December 2016. Section 5 of the Specified Bank Notes (Cessation of Liabilities) Act, 2017 also deals with prohibition on holding, transferring or receiving specified bank notes. Section 5 states that On and from the appointed day, no person shall knowingly or voluntarily, hold, transfer or receive any specified bank note . We therefore, find that the specified bank notes can be measured in monetary terms since the guarantee of the Central Government and the liability of Reserve Bank of India does not cease to exist till 31.12.2016. In view of the above, the contention of the Ld.DR, treating the receipt of SBNs from cash sales as illegal and thereby invoking the provisions of section 69A is not valid in law. Therefore, we dismiss this ground of the Revenue. Admission of additional evidences - As argued CIT(A) ought to have referred the evidence produced by the assessee in the form of paper book to the Assessing Officer as per Rule 46A of the Income Tax Rules - HELD THAT:- AO has provided various opportunities to the assessee to explain the details of share transactions and provide documents in support of his claim, wherein, the assessee failed to produce any cogent evidence and information in support of his claim. However, the assessee produced documents before the Ld.CIT(A). That being the position, the Ld.CIT(A) must have remitted the matter back to AO for examination by applying the provisions of Rule 46A. However we find merit in the argument of the Ld.AR, that no additional evidence produced before the Ld.CIT(A) which was not disclosed in the return of income filed by the assessee. It is noted that the Ld.CIT(A) has only verified the authenticity of the claim made by the assessee in the return of income, and we find that there is no requirement by the Ld.CIT(A) to remit the matter back to AO for examination. In view of the above findings, the grounds raised by the Revenue are dismissed.
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2022 (3) TMI 895
Interest on share capital paid to the members of the bank - As per AO said interest amount should be treated as an appropriation of profit and added to the total income - whether interest paid on share capital is allowable deduction or not? - HELD THAT:- CIT(A) has considered the order in the case of Visakhapatnam Cooperative Urban Bank Ltd. [ 2016 (9) TMI 1465 - ITAT VISAKHAPATNAM] and came to a conclusion that interest on share capital paid to the members is an allowable deduction.we find no infirmity in the order passed by the ld.CIT(A). Thus, these grounds of appeal raised by the revenue are dismissed. TDS u/s 194A - Disallowance of interest paid to the members of the cooperative bank under section 40(a)(ia) - CIT-A deleted the addition - HELD THAT:- As decided in VISAKHAPATNAM CO-OP. BANK LTD.[ 2016 (9) TMI 1465 - ITAT VISAKHAPATNAM] we find no infirmity in the order of the ld. CIT(A). Thus, these grounds of appeal raised by the Revenue are dismissed. Amortization of premium on Government Securities i.e. HTM - AO has not accepted the explanation of the assessee for the reason that the actual expenditure was not incurred by the assessee and only a provision i.e., a contingent liability was made which may become payable at a future date. Contingent liabilities do not constitute expenditure and cannot be the subject matter of deduction even under the mercantile system of accounting - CIT-A allowed the claim - HELD THAT:- From the details filed, it is seen that the securities were held under HTM category and the premium paid over the cost of acquisition have been amortized over a period of maturity and claimed as allowance. He found that assessee s claim is in accordance with the CBDT Instruction and directed the AO to allow this claim and delete the addition. The ld. Departmental Representative has not pointed out any error in the order passed by the CIT(A), which is neither contrary to any provision of law nor CBDT Circular. We have also considered CBDT circular and find that ld. CIT(A) by following the Circular No. 17/2008, dated 26/11/2008 directed the Assessing Officer to delete the addition. We find no infirmity in the order of the ld.CIT(A). Thus, these grounds of appeal raised by the Revenue are dismissed. Disallowance of premium paid to LIC of India towards gratuity liability of employees - HELD THAT:- Admitted facts are that the payments towards liability directly made to LIC of India as a premium based on actuarial valuation, where the policy governing the fund is unapproved by CIT as on the date of contribution by way of premium. CIT(A) also agreed to the fact that the application for approval of gratuity fund was made by the assessee to CIT on 08.11.2011, which is yet to be approved by CIT. The Ld.CIT(A) relying on the decision of Capital IQ Information Systems (India) P Ltd [ 2014 (1) TMI 649 - ITAT HYDERABAD] allowed the claim of the assessee. Thus we concur with in the directions of the Ld.CIT(A) and consequently this ground raised by the Revenue is dismissed.
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2022 (3) TMI 894
Advance to the company from out of the cash receipt - addition on protective basis - CIT(A) deleted the addition made by the AO on the ground that since the sources and creditworthiness were proved in the substantive assessment, protective assessment did not have legs to stand - HELD THAT:- If a protective assessment is to be invoked u/s 68 of the Act, the conditions laid down in section 68 should be satisfied. The assessee has offered explanation to the satisfaction of the AO on the credit worthiness and the source of funds deposited into the bank account of the company. This was not disputed by the AO in his order. The AO has also not rejected the explanation, by the company, where it is implied that the AO has accepted the source. In this case also the assessee has provided explanation regarding the source of cash deposits, and has also accepted the real estate income, filed revised return and discharged his liability in payment of taxes. We find from the order of Ld.CIT(A) that the addition of ₹ 1,74,52,500/- made on substantive basis since the loan creditor provided evidences to the satisfaction of Ld.CIT(A). As the assessee has provided documentary proof for receipt of money during the substantive assessment of the company, the addition of the same on the basis of protective assessment does not have legs to stand - impugned addition shall be deleted - Decided in favour of assessee. Receipt of cash - Valid proof - CIT(A) ought not have accepted the assessee s claim rejected in the absence of valid proof and should have rejected the mere entry in the creditor s books of account - HELD THAT:- As assessee has advanced a sum of ₹ 5.20 crores to M/s Gowtham Buddha Textiles Pvt. Ltd. out of the real estate income admitted by the assessee. We see from the record submitted by the Ld.AR that the assessee has shown the amount of ₹ 5.20 crore as investment in his books of accounts. We also find that this fact was also recorded by assessee to Q No 7 in his sworn statement during the course of scrutiny assessment in the case of Gowtham Buddha Textile Park Pvt. Ltd, for the A.Y. 2014-15 to 2017-18 u/s 131 of the Act. We therefore find no merit in the argument of the Ld.DR and, we dismiss the ground raised by the revenue. In the result, appeal filed by the revenue is dismissed.
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2022 (3) TMI 893
Validity of Reopening of assessment u/s 147 - Reopening on the basis of the report of the Centralized Audit Unit, CAG - transfer from the share premium account to P L account as resulted to conversion of the capital receipts into Revenue receipts as credit to the P L account reduced from statement of income - main object of the CAG is that the assessee cannot take a different stand one in the Income Tax purpose and another for the book purpose i.e., treating it as capital receipts for the Income Tax purpose and crediting it to P L account for the book purpose - HELD THAT:- The assessee adjusted the security premium by reduction of capital. In one hand, the credit was made in P L account and on the other hand amount was adjusted during computation of income u/s. 115JB of the Act. There is no affect in the P L account during computation of the net profit. The issue was already disclosed in the tax audit report and as well as computation u/s. 115JB of the Act. During the assessment u/s. 143(3), the AO never pointed out the issue as escapement of income. The reopening was made as per the report of the CAG. So, there is no tangible material to the ld. AO for permission of reasonable believe for escapement of income. Different Apex Court pointed out that the audit report cannot be the basis for re-opening u/s. 148 of the Act. Further, there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for this assessment. There is no reason to believe that the income has escaped assessment during the year. The Petitioner statement that all said withdrawals from security premium account consequent to the aforesaid proposal will be utilized for the adjustments set up prescribed above. The issue was already discussed in the financial statement for the financial year 2008-09 and which was came to the purview of the ld. AO. The re-opening is nothing but a mere change of opinion of the Ld. AO during formation of belief for re-opening, Pr CIT, Non-Corporate Cir.2(1)/Chennai vs M.R.Narayanan,[ 2021 (6) TMI 825 - MADRAS HIGH COURT] As a result, all the grounds of the Revenue are rejected in relation to the re-opening u/s. 148 - Decided against revenue.
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2022 (3) TMI 892
Revision u/s 263 by CIT - household expenses shown is inadequate, the explanation given by the assessee regarding reduction in gross profit rate is general in nature and as regards the commission/discount,Assessing Officer has called for only broad details instead of calling for terms of agreement for sale, for allowing commission/discount - HELD THAT:- What the revisionary authority by exercising power under section 263 of the Act desires is to substitute his own opinion/decision with that of the AO. In fact, the revisionary authority himself has gone into the allowability or otherwise of each item of expenditure claimed by the assessee. This, in our view, is not the intent and purport of section 263 - It is a fact on record that on all the issues raised by the revisionary authority in the show-cause-notice issued under section 263 Assessing Officer has conducted inquiry in course of the assessment proceeding and has decided those issues applying his own wisdom. Only because such decision of the AO is not to the liking of learned PCIT, it cannot be said that the assessment order is erroneous and prejudicial to the interest of Revenue - in response to the show-cause-notice issued under section 263 of the Act, the assessee has furnished a detailed reply which has been extensively reproduced in the impugned order of learned PCIT. However, there is no speaking order of learned PCIT on various submissions made by the assessee, not only on the jurisdictional aspect but also on merits. PCIT has rejected assessee s submission and has set aside the assessment order without any strong finding either with regard to the error in the assessment order or prejudice caused to the Revenue. Thus, in our considered opinion, the assumption of jurisdiction under section 263 of the Act in the present case is invalid. Accordingly, we quash the impugned order of learned PCIT passed under section 263 of the Act and restore the assessment order. - Decided in favour of assessee.
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2022 (3) TMI 891
Estimation of income - bogus purchases - Addition @ 12.5% of the Gross Profit - HELD THAT:- In the present case, though the assessee filed various details / evidences in order to prove genuineness of the purchases, but the vendors could not be produced despite being afforded several opportunities. Therefore, looking into the entirety of facts especially the fact that the sale of flats has been accepted as being genuine and the books of accounts of the assessee are audited by chartered accountant who has not found any defect in purchases made by the appellant, we think it is fit to restrict the disallowance to 5% of the purchases, in the interest of justice. Disallowance of total depreciation on adhoc basis as personal expenditure - assessee claimed depreciation on motor cars - HELD THAT:- Considering the facts of the present case, in the absence of any log book/register maintained by the appellant showing movement of vehicle from one place to another, it is not established that the car was used exclusively for the purpose of business of the appellant. Thus for the sake of consistency, we restrict the disallowance to 10% of depreciation on motor vehicles for personal use as being fair and reasonable. Disallowance of petty cash expenses on adhoc basis - HELD THAT:- In our view in the absence of supporting evidences, genuineness of payment made in cash is not established and therefore disallowance upheld by the ld. CIT(A) at 10% of total cash expenses is found to be quite reasonable and justified. In our view the ld. CIT(A) has not erred in disallowing a sum of 10% of total cash expenses. Disallowance towards travelling expenses - assessee has not provided any supporting bills regarding visit of the partners to China and Dubai for the business purposes - HELD THAT:- Before us assessee reiterated the arguments which were submitted before the lower authorities. However, we are not convinced with the arguments of the assessee and we are of the view that in the instant facts, the assessee has not been able to substantiate the purpose of visit to Dubai and China and in absence of any details/ supporting evidences, we find no infirmity in the order of the ld. CIT(A) who dismissed the assessee s appeal due to lack of any supporting documents or evidences in support of the fact that the partner had travelled for official performances. Assessee appeal dismissed. Disallowance of interest expenditure - diversion of funds where borrowed amounts have been diverted for non-business purposes and given to various parties as interest free advances - HELD THAT:- We are in agreement with the contentions of the ld. counsel for the assessee that where the assessee was having substantial interest free funds at its disposal, there is no reason to hold that the borrowed money was utilized for purposes of giving interest free advances and no disallowance of interest was warranted - in the case of CIT vs. Raghuvir Synthetics Ltd. [ 2013 (7) TMI 806 - GUJARAT HIGH COURT] held that where huge funds were available without any interest liability with assessee and there was no evidence to hold that borrowed money was utilized for purpose of advance to sister concerns, no disallowance of interest was warranted. Since the assessee had substantial interest free funds at its disposal, it would be incorrect to presume that interest bearing funds were used for giving interest free advances to parties. Therefore, no disallowance u/s. 36(1)(iii) is called for in the instant set of facts.- Decided in favour of assessee. Addition u/s. 68 - Whether assessee has discharged the primary onus cast upon it wherein he has identified the parties by furnishing their PAN details/certificates of OCI? - HELD THAT:- In the case of CIT v. Ranchhod Jivabhai Nakhava [ 2012 (5) TMI 186 - GUJARAT HIGH COURT] has held that where lenders of assessee are income-tax assessee whose PAN have been disclosed, Assessing Officer cannot ask assessee to further prove genuineness of transactions without first verifying such fact from income-tax returns of lenders. Further, in the case of CIT v. Chanakya Developers [ 2013 (10) TMI 7 - GUJARAT HIGH COURT] held that where assessee in order to prove genuineness of transactions relating to receipt of booking amount of flats, supplied address and PAN of concerned persons, it had discharged its primary onus and, therefore, Assessing Officer could not make addition of said amount to assessee's taxable income without making proper inquiries under section 133(6). In view of the above Rulings, and the totality of facts of the present case, we are of the view that the Ld. CIT(Appeals) has not erred in deleting the addition made u/s. 68 of the Act - Decided against revenue.
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2022 (3) TMI 890
Rectification of mistake u/s 154 - Exemption u/s 11 - HELD THAT:- In this stage it is not possible for verification of the payments, made by the assessee. The matter is returned back to the Assessing Officer to take cognizance of the two payments and rectify the order under perview of Section 11. Accordingly, AO is directed to rectify the order u/s 154 of the Act considering the genunity of transactions as discussed above. Apart from above, the assessee submitted that the AO did not allowed 15% deduction u/s.11(1)(a) of the Act while passing rectification order even though same was allowed while passing giving effect. Therefore, we direct the Ld. AO to allow 15% as per section 11(1)(a) of the Act and compute income. Appeal filed by the assessee is allowed for statistical purposes.
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2022 (3) TMI 889
Deduction u/s 54F - AO disallowed related to investment in new property through borrowed fund - HELD THAT:- CIT(A) in his order mentioned the assessee s wife is repaying the loan which was borrowed for investment in property for getting the deduction u/s 54F of the Act. This issue was not adjudicated properly by any of the revenue authorities - verification is required in this issue. The matter is returned back to the AO for further verification related to payment of borrowed fund. Related to cost of improvement amount to ₹ 8,00,000/-, Ld. Counsel submitted details of payment related cost of improvement. The verification of payment is not possible in this stage. So, the matter is returned back to the Ld. AO for further verification. Related payments of registration charges and stamp duty for amount was agitated before the bench for first time through additional grounds. The assessee claimed benefit u/s 54F related payment of registration charges and stamp duty value. The proper verification is required for this assessee s claim. AO is directed to allow benefit of the assessee u/s 54F after proper verification related those payments. Appeal filed by the assessee is allowed for statistical purposes.
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2022 (3) TMI 888
Exemption u/s 11 - estimated disallowance @ 10% of the expenses under section 13(1)(c) read with section 13(3) on the ground that the estimated amount of disallowance pertained to utilization of income for the benefit of specified persons referred to in Section 13(3) - CIT(A) deleted these disallowances, holding that there was no evidence of any bogus bill or voucher, and that there was no finding that bills and vouchers were not verifiable - HELD THAT:- It is not in dispute, that the Assessee failed to furnish full information to the AO, during assessment proceedings, in respect of application or use of income or property for use of specified persons referred to in section 13(3) of IT Act - assessee had failed to make full compliance with the requirements made by the AO, to produce the books of accounts, relevant supporting documents and other information/documents as prescribed by the AO during assessment proceedings; though the assessee did, without dispute on this fact, produce books of accounts before the AO on sample basis - there is no dispute, that the assessee did not claim during assessment proceedings that prior period expenses crystallized during the current period relevant to Assessment Year 2010-11; and, that the AO did not get any opportunity to examine the assessee's claim - CIT(A) did not provide any opportunity to the AO, to rebut this claim made by the assessee for the first time during appellate proceedings before Ld. CIT(A) - CIT(A) has not passed a speaking order on how he came to the conclusion, that the aforesaid prior period expenses had crystallized during the year relevant to Assessment Year 2010-11. Assessee faced genuine difficulties in fully complying with all the requirements prescribed by the AO during assessment proceedings. Regarding the claim of the assessee (in Assessment Year 2010-11) that prior period expenses crystallized during the period relevant to Assessment Year 2010-11; we find that this claim was not scrutinized properly either during assessment proceedings (because this claim was not made by the assessee during assessment proceedings) before the AO, or during appellate proceedings before the Ld. CIT(A). We set aside the impugned appellate orders of the Ld. CIT(A), and restore all issues in dispute in the present appeals before us, to the file of the Assessing Officer, for fresh order in accordance with law- Appeal allowed for statistical purposes.
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2022 (3) TMI 887
Validity of the assessment framed u/s. 147 - Unexplained cash deposits in the bank account of the assessee - assessee challenging the reopening was that the reasons recorded by the A.O. were not sufficient for the formation of belief of escapement of income - HELD THAT:- There can be no iota of doubt that there was sufficient information for the formation of belief of escapement of income, with the assessee having been found to have deposited substantial cash in his bank account which could neither be explained by any return of income filed by the assessee ,which he had evidently not filed and nor had the assessee offered any explanation of the same in the course of enquiries conducted by the A.O. The cash deposits therefore were found to be unexplained by the A.O. and it was this information which logically and rightfully led to the formation of belief of escapement of income. The contention of the assessee therefore regarding the insufficiency of reasons for formation of belief of escapement of income needs to be out rightly rejected. The source of cash deposit remaining unexplained by the assessee, the formation of belief of escapement of income on account of the same was justified and as a consequence, the initiation of reassessment proceedings also. No other arguments challenging the validity of reopening the case were made before us. We reject the contention of the assessee challenging the validity of reopening in the present case u/s. 147 of the Act. Unexplained cash deposits - Assessee explanation that the bank account was infact being operated by his employer, we find was evidenced by the narration in the entries in the bank account reflecting the name of his employer, the brokerage firm of which he was an agent i.e. Bonanza Portfolio Ltd. and his purported relatives. We have noted that almost entirely all the withdrawals in this bank account by cheque related to these aforesaid persons only while there were few withdrawals in cash also - whatever amount was deposited in this account was withdrawn either in the name of the asseesses employer, his brokerage firm which he was an agent or for the benefit of his relatives. The explanation of the assessee therefore that his bank account was being operated by his employer appears to be justified on the touchstone of preponderance of probability. The onus stood shifted to the Revenue to prove otherwise. It was incumbent on the Revenue to have examined the evidences, make necessary inquiries from the employer of the assessee, Mr.Prakash Mirani, and also from the bank and only thereafter on finding these evidences to be of no consequence ,the onus to justify his explanation with further evidences would have shifted to the assessee. The Revenue, on the contrary, we find insisted on further evidences from the assessee without even considering that filed by the assessee or pointing out why they were not relevant. In the present case, the assessee having sufficiently evidenced his explanation regarding the nature of cash deposits and the revenue being unable to controvert the same, we hold that the Ld. CIT(A) was not justified in dismissing the explanation of the assessee and upholding the addition of cash deposits - Assessee appeal partly allowed.
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2022 (3) TMI 886
Exemption u/s 11 - activities of the assessee are charitable in nature or not? - AO Compare the assessee with a private colonizer - HELD THAT:- The main objective of the assessee authority is to develop houses at affordable cost for the public and to develop public utilities. The assessee Authority was created by enactment of Uttar Pradesh Urban Development and Planning Act, 1973 by Notification No. 1892/XXXVI- 2-21(DA)-72 dated 13.09.1974. In Uttar Pradesh Urban Development and Planning Act, it is mentioned that this Act is being enacted to tackle the problems of town planning and urban development. The assessee Authority has been constituted by the State Government and assessee Authority has no power to take decision on application of funds in contravention to the provisions of the UPUPD Act. The Authority thus cannot be said to be running for profit motive. If any income is earned over and above expenditure, it is used for development work in the city of Lucknow. Authority is just assisting State Government in development of towns which is for the welfare of the public. From the development undertaken by the appellant Authority, public is benefited at large. It is clear that the benefits of development undertaken by the appellant Authority is not restricted to an individual or particular group of individuals for which its objects should be considered charitable under forth limb of section 2(15) of Income-tax Act. Words other objects of general public utility have been decided in catena of decisions. The said expression is widest of connotation. Words general in the said expression is pertaining to a whole class. If the primary purpose and the predominant object are to promote the welfare of the general public, the purpose would be charitable purpose. Lucknow Development Authority is not engaged in carrying on any activity in the nature of trade, commerce or business or any activity in the nature of rendering any service in relation to any trade, commerce or business for a fee or any other consideration. The nature of activities of the assessee Authority, the purpose and manner of its formation and the objects for which it has been created goes to show that it is not engaged in carrying on any activity in the nature of trade, commerce or business. The objects of the assessee Authority do not, expressly or impliedly, provide for carrying on of trade, commerce or business. The L.D.A. is only rendering/ providing service to the general public on behalf of the Government without any profit motive or without earning profit. Lands, plots etc. acquired by the L.D.A. and allotted by it are allotted without earning profit after taking into account the direct and indirect expenses. Further, the L.D.A. is registered u/s 12AA of the Income-tax Act, as per the order of the Hon ble ITAT [ 2005 (7) TMI 668 - ITAT LUCKNOW ] and in pursuance of such order, registration has been granted by the Ld. Commissioner of Income Tax-I u/s 12AA of the Income Tax Act 1961, with effect from 01.04.2003 vide order dated 17.01.2006. Further, the registration u/s 12AA has never been revoked till date. We hold that the assessee had not violated the provisions of section 13(3) of the Act. In view of the above facts and circumstances and judicial precedents, we hold that the assessee is eligible for exemption u/s 11 of the Act and Assessing Officer is directed to allow the benefit of Section 11. Transferring certain amounts to IDRF account - HELD THAT:- We find that this issue has already been dealt by the Hon'ble Allahabad High Court in the case of assessee itself whereby vide order [ 2013 (9) TMI 570 - ALLAHABAD HIGH COURT ] has held that the money transferred to this fund is to be utilized for the purpose of project as specified by the committee having constituted by the Government and the same could not be treated to be belonging to the authority or the receipt is taxable in its hand. Therefore, ground of the appeals are allowed.
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2022 (3) TMI 885
Validity of the order passed u/s 153A - Basic grievance of the assessee, as appears from the submissions made by learned counsel for the assessee, is the submissions made in course of first appellate proceeding, both, on the validity of the assessment order as well as on merits, have not been duly considered and examined with reference to the material brought on record - HELD THAT:- Assessee s contention that there is no incriminating material found as a result of search, requires consideration keeping in view the settled legal principles. Further, reconciliation of entries in the bank accounts furnished by the assessee needs to be verified with reference to the evidences placed by the assessee. We are inclined to restore the issue to the learned Commissioner (Appeals) for fresh adjudication after due opportunity of being heard to the assessee. Grounds are allowed for statistical purposes.
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2022 (3) TMI 884
Addition u/s 68 - appeal is taken up for hearing in the absence of the assessee - DR submitted that Ld.CIT(A) dismissing the appeal on the ground that the provision of section 249(4) is negatively worded and prohibits the decision by the Ld.CIT(A) - HELD THAT:- The assessee ought to have been given an opportunity for making submissions regarding admissibility of appeal. Therefore in the interest of principle of nature justice and to sub-serve the interest of substantive justice, hereby set aside the impugned order and restore the grounds of appeal to the Ld.CIT(A) to re-consider the grounds after giving adequate opportunity to the assessee. Thus, grounds raised by the assessee are allowed for statistical purposes.
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2022 (3) TMI 883
Disallowances for the PF and ESIC - employees which was deposited after the due date under the PF and ESIC Act but before within the due date for filing of the Income Tax Return under section 139(1) - HELD THAT:- As PRO INTERACTIVE SERVICE (INDIA) PVT. LTD. [ 2018 (9) TMI 2009 - DELHI HIGH COURT] in view of the judgment of the Division Bench of Delhi High Court in Commissioner of Income Tax Vs. Aimil Limited[ 2009 (12) TMI 38 - DELHI HIGH COURT] the issue is covered against the Revenue and, therefore, no substantial question of law arises for consideration in this appeal. The legislative intent was/is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of employee's provident fund (EPD) and employee s State Insurance Scheme (ESI) as deemed income of employer under section 2(24)(x) of the Act. - Decided in favour of assessee.
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2022 (3) TMI 882
Penalty u/s 271B - applying the tax audit as per provisions of Section 44AB read with Section 44AD - HELD THAT:- Ground taken before the learned CIT(Appeals) reads as under: 4. That the AO has erred in law and facts in initiating proceedings u/s 271B of the act. The provisions of sec. 44AB of the act are applicable on business whereas the appellant is an investor and not a share trader. Even if, it is considered as business the loss was incurred in F O segment where the net result is considered for turnover purpose and not the total transaction. However, this ground of assessee s appeal was not adverted by the learned CIT(Appeals). Ground no. 2 before the learned CIT(Appeals), the assessee had filed certain evidences, which the learned CIT(Appeals) did not admit. Before this Tribunal the assessee has filed an order by the Hon ble Allahabad High Court in the matter of Sterla (India) Limited [ 2013 (9) TMI 1285 - ALLAHABAD HIGH COURT] . Therefore, looking to the order of the Hon ble Allahabad High Court and the submissions of the assessee, the impugned order on the issue of addition made on account of buy back of shares is set aside and restored to the learned CIT(Appeals) for decision afresh. We find merit into the contention of the assessee on the ground raised against initiating proceedings u/s 271B and applying the tax audit as per provisions of Section 44AB read with Section 44AD of the Act. On both the issues the learned CIT(Appeals) would pass a speaking order after giving reasonable opportunity to the assessee. Assessee s appeal is allowed for statistical purposes.
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2022 (3) TMI 881
Disallowance of loss claimed on house property - As stated assessee transferred an amount to his brother onward payment of LIC HFL but there was no evidence to corroborate the same - HELD THAT:- Assessee was one of joint account holder and the claim of house property loss was disallowed on the basis that the brother of the assessee had paid entire liability of loan. It was stated by the assessee that his share related to the loan was paid to the brother of the assessee. No inquiry has been made from the brother of the assessee. Therefore,we deem it proper to set aside the order of Ld.CIT(A) on this issue to the file of Assessing Officer to decide afresh. Disallowance of deduction u/s 80C - HELD THAT:- Since this ground is related to Ground No.1 wherein Ground No.1 has been restored to the file of the Assessing Officer, this issue is also restored to the AO for verifying the veracity of the claim of the assessee. Thus, Ground No.2 raised by the assessee is allowed for statistical purposes.
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2022 (3) TMI 880
Late deposit of employees' contribution to ESI PF - Amount deposited well before the due date of filing of return of income u/s. 139(1) - scope of amendment - HELD THAT:- It is a consistent position across various Benches of the Tribunal including Chandigarh Benches that the amendment which has been brought in by the Finance Act, 2021 shall apply w.e.f. assessment year 2021-22 and subsequent assessment years and the impugned assessment year being assessment year 2018-19, the said amendment cannot be applied in the instant case. Therefore, considering the entirety of facts and circumstances of the case and following the decisions of various High Courts as well as Coordinate Benches of the Tribunal referred above, the addition made by way of adjustment while processing the return of income u/s. 143(1) so made by the CPC towards the deposit of employees' contribution towards ESI and PF paid before the due date of filing of the return of income u/s. 139(1) of the Act, is hereby directed to be deleted. Appeal of the assessee is allowed.
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2022 (3) TMI 879
Exemption u/s 80G(5)(vi) - denial of claim as assessee has not produced sufficient proof on the activities of the assessee-trust - it is not possible to verify the genuineness of the activities of the assessee-trust - HELD THAT:- The very same Officer who refused to grant approval u/s 80G of the Act, was the Officer, who granted registration u/s 12AA of the Act a day prior, i.e., on 23.03.2021. We fail to understand how registration u/s 12AA has been granted on 23.03.2021 when the Officer concerned has not been able to examine the genuineness of the activities of the assessee-trust. The starting of activities of the trust is not a condition precedent for grant of approval u/s 80G of the I.T.Act. On receipt of the approval u/s 80G the assessee would be receiving donations. The receipts of money through donations are the lifeline for starting the charitable activities of the assessee-trust. In the interest of justice and equity, we are of the view that the matter needs to be examined afresh by the CIT(E). Accordingly, the issue raised in this appeal is restored to the files of the CIT(E) for de novo consideration. Assessee appeal is allowed for statistical purposes.
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2022 (3) TMI 878
Addition on account of payment of commission - Assessee has shown expenditure on account of commission paid to various agents - assessee could not produce any concrete evidence against the said payment - addition made by the A.O ex parte of assessee - HELD THAT:- On perusal of statement of facts filed along with form No. 35, we note that the assessee pleaded before the CIT(A) that all the payments on account of commission were made through account payee cheques and also pleaded that the assessee is ready to produce such evidence whenever opportunity comes for the same. Therefore, it is clear that the assessee is ready to produce evidence in support of the contention regarding payment of commission and there was no opportunity for him in the first appellate proceedings. Admittedly, the CIT(A) did not dispose of the appeal on merits, but however, he disposed of the case as discussed above, ex parte of assessee. Under sub-section (6) of section 250, the CIT(A) is expected to decide the appeal with reasons determining the points thereon. As we noted above, the appeal was disposed of by the CIT(A) ex parte of assessee. We therefore, deem it proper to remand the matter to the file of the CIT(A) and the assessee is at liberty to file evidence, if any, in support of his claim. Thus, the only ground raised by the assessee is allowed for statistical purposes.
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2022 (3) TMI 877
Reopening of assessment u/s 147 - validity of the assessment framed in the absence of service of notice to the assessee by the AO - Addition of purchase of mutual funds and on account of interest income received by the Assessee - HELD THAT:- In the present case it is not in dispute that the AO framed the assessment ex parte u/s 144 of the Act and the assessee furnished the written submissions alongwith additional evidence before the CIT(A) who had discussed the submissions of the assessee in para 4 of the impugned order. However the Ld. CIT(A) acted upon the remand report dt. 23/12/2020 received from the A.O. but no opportunity was given to the assessee to comment upon the said report. It is also noticed that the CIT(A) neither rejected nor accepted the additional evidences furnished by the assessee first time before him. We therefore considering the totality of the facts deem it appropriate to set aside the impugned order and remand the issue back to the file of the CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.Appeal of the Assessee is allowed for statistical purposes.
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2022 (3) TMI 876
Disallowing the PF and ESI payment paid before the due date of filing the return - Scope of amendment - HELD THAT:- We are of the view that the amendment brought in the statue i.e., by Finance Act, 2021, the provisions of Section 36(1)(va) r.w.s. 43B of the Act amended by inserting explanation 2 is prospective and not retrospective. Hence, the amended provisions of Section 43B r.w.s. 36(1)(va) of the Act are not applicable for the assessment year under consideration i.e. 2018-19 but will apply from assessment year 2021-22 and subsequent assessment years. Hence, this issue raised in assessee's appeal is allowed.
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2022 (3) TMI 875
Penalty u/s 271(1)(b) - non compliance of notices u/s 142(1) - HELD THAT:- As it was clear from the provisions of Section 271(1)(b) that this provision can be invoked only for non compliance of notice u/s 115WD (2) or Section 115WE(2) or Section 142(1) or 143(2) or directions issued u/s 142(2A) - Therefore, other than the default committed by the assessee specified in the clause (b) of section 271(1) the non compliance to the other notices or directions would not attract the penalty u/s 271(1)(b) - Accordingly, the penalty levied u/s 271(1)(b) for non compliance of notice the same was not served with any of the notices issued by the AO due to the change of address. Penalty levied for non compliance of notice u/s 142(1) - Tribunal opined that the assessee was not served with any of the notices issued by the AO due to the change of address - we have perused the documentary evidence of assessee's Aadhar Card for the change of address and Affidavit of the assessee dated 14.02.2022 in which there was reasonable cause principle. As regards the penalty levied for non compliance of notice u/s 142(1) of the Act. In our considered opinion, that the assessee was not served with any of the notices issued by the AO due to the change of address and since the assessee had not filed any return of income. Therefore, the AO was not having the present address of the assessee - when the notice issued u/s 142(1) was not served upon the assessee, and the AO had not conducted further enquiry regarding the current address of the assessee, then in the facts and circumstances of the case that the assessee had already furnished the current address in his letter dated 23.08.2021, the reasons explained by the assessee were bona-fide and reasonable - we set aside the order passed by CIT(A) and the penalty imposed u/s 271(1)(b) of the Act for non compliance of Section 142(1) is deleted. Appeal of assessee allowed.
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2022 (3) TMI 874
Delay deposit of employees' contribution to PF/ESI - Amount for having not paid the same on or before the prescribed due dates as per section u/s. 36(1)(va) of the Act - Payment before furnishing the return of income under section 139(1) - HELD THAT:- In the present case, it is not in dispute that the assessee deposited the contribution of PF ESI belatedly in terms of section 36(1)(va). However, the said deposits were made prior to filing of return of income u/s. 139(1) - It is noticed that an identical issue having similar facts has already been adjudicated in RAJA RAM [ 2021 (11) TMI 370 - ITAT CHANDIGARH] wherein addition on account of deposits of employees contribution of ESI PF prior to filing of the return of income u/s. 139(1) of the Act, in both the years under consideration prior to the amendment made by the Finance Act, 2021 w.e.f. 1.4.2021 vide Explanation 5, are deleted. - Decided in favour of assessee.
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2022 (3) TMI 873
Additions in respect of employees contribution towards ESI/PF - Amount paid before the due date of filing of return of income u/s 139(1) - Scope of amendment - HELD THAT:- In instant case, admittedly and undisputedly, the employees contribution to ESI and PF collected by the assessee from its employees have been deposited well before the due date of filing of return of income u/s 139(1) of the Act. Further, the ld D/R has referred to the explanation to section 36(1)(va) and section 43B by the Finance Act, 2021 and has also referred to the rationale of the amendment as explained by the Memorandum in the Finance Bill, 2021, however, we find that there are express wordings in the said memorandum which says these amendments will take effect from 1st April, 2021 and will accordingly apply to assessment year 2021-22 and subsequent assessment years . In the instant case, the impugned assessment year is assessment year 2018-19 and therefore, the said amended provisions cannot be applied in the instant case. Deposit of the employees s contribution towards ESI and PF though paid before the due date of filing of return of income u/s 139(1) of the Act is hereby directed to be deleted. - Decided in favour of assessee.
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2022 (3) TMI 872
Validity of assessment as bared by limitation - whether the AO was bound to pass the assessment order within nine months from the end of the financial year in which the order of the Hon'ble High Court was received i.e., on or before 31.12.2010? - HELD THAT:- The findings of the Ld. CIT(A) are in accordance with the plain provisions of law. On the other hand, we are not convinced with the arguments of the department that the relevant provisions referred by the CIT(A) do not apply to the case of the assessee. No case law was brought to our notice by the department to rebut the arguments advanced by the Ld. counsel for the assessee. In our considered opinion, the findings of the Ld. CIT(A) are based on the provisions of law. Hence, we do not find any reason to interfere with the findings of the Ld. CIT(A). Accordingly, we allow the appeal of the appellant assessee and uphold the order passed by the Ld. CIT(A). Appeal of the Revenue is dismissed.
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Customs
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2022 (3) TMI 871
Mis-declaration of imported goods - gold/silver dore bars - excess quantity of gold bars - instead of 74 bars (as per packing list), the officers found 76 bars - confiscation - imposition of redemption fine and penalty - HELD THAT:- The gold is sold by weight and not by number of pieces. Admittedly, in the facts of the present case, the gross weight of the packing as reduced by packing materials, the net weight of the gold dorebars matches with the import documents. Thus, there is no case of mis-declaration or any excess weight of gold dore bars found by Revenue, as per the admitted facts. The whole exercise - proceedings for confiscation and penalty is only for the alleged excess quantity, that dore gold bars are more than the numbers mentioned in the packing list and the invoice, is wholly mis-conceived - Appeal dismissed - decided against Revenue.
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2022 (3) TMI 870
Valuation of imported goods - rejection of declared value - enhancement of value - evidence of any contemporaneous imports at a higher price or not - HELD THAT:- It is settled principle of the commercial transactions that the prices of the transacted goods can be determined only on the date of transaction and not on any other date whether previous or subsequent. The prices may fluctuate on account of the vagaries of market but the contractual price agreed upon by the contracting parties would be sacrosanct unless the contract provides so. The contractual price entered between the parties need to be tested against the prevailing market prices on the date of contract rather than any subsequent price. The Appellant's contract was entered into on 19-1-2012 and the goods were shipped in March 2012. The contract price was US $ 713 per M.Ton. The appraisal price given in Metal Bulletin dated 30.01.2012 for production and exports of March 2012 of Chinese Mills, was in the range of US $ 685-695. Thus the Appellant's price was even higher than the appraisal price given in the Metal Bulletin of January 2012 for production and export of March 2012. The London Metal Bulletin prices of subsequent date 26.03.2012 giving the appraisal price for production and exports of May 2012 to be in the range of US $ 715 to 730 per MT, cannot form the basis of enhancing the value and for rejecting the transaction price. Appeal allowed - decided in favor of appellant.
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Insolvency & Bankruptcy
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2022 (3) TMI 869
Rejection of application of the petitioner for grant of registration under the Goods and Services Tax Act, 2016 - Company under liquidation under the provisions of IBC - primary ground for rejection was non-furnishing of the required documents - rejection on a completely nongermane ground - HELD THAT:- It is the specific stand of the petitioner that the Notification No. 11/2020 dated 21.03.2020 as amended by Notification No. 39/2020 dated 05.05.2020 would not apply in case of the petitioner for he being a liquidator as they are applicable qua IRP and RP. It is to be remembered that under Regulation 32 of IBBI (Liquidation Process) Regulations, 2016, petitioner was under an obligation to make an attempt to sell the business of company-in-liquidation as a going concern or on slump sale basis and if the liquidator is unable to sell the business in either way of clause (e) or (f) of the Regulation 32, within 90 days from the liquidation commencement date, he is required to sell the assets of the company under liquidation by other methods. The petitioner is an appointee of National Company Law Tribunal and is not required to run from the post to pillar for the grant of registration under the GST Act. He already had approached the concerned officer and therefore, when he was denied the same on the ground of issue of limitation, he had preferred an appeal, however, the respondent authority when conveyed him to apply afresh, he has chosen to approach this Court - According to this Court, once an application was moved for obtaining the registration under GST before the respondent authority, the denial of registration under the GST is completely on an ill conceive ground. Not only the authority concerned had not distinguish between the IRP/RP and liquidator but, both have different functions and even otherwise, if all of them are considered as the persons authorized under the provisions of Insolvency and Bankruptcy Code, 2016, applying even the notifications 11/2020 and 39/2020 in case of the present petitioner, the authority could not have disregarded the prevalence of the pandemic due to COVID-19 virus. Wherever there is a requirement, Section 25 requires the proper officer to register such person in such a manner as may be prescribed, if he is otherwise liable to be registered. Thus, in case of any delay in obtaining the registration, Section 25(8) obligates the proper officer to proceed to register such person. He may impose a penalty in accordance with Section 122 of the GST Act, however, this non-grant of registration for fulfilling the official duty for the sell of business of the company-in-liquidation as a going concern/slump sale basis or on standalone basis deserves the indulgence with a specific direction to the highest authority under the GST Regime to stop having hyper technical approach and instead make it more user friendly. The liquidator could have approached the concerned authority well in time, however, if he has not done it because of the various details that he needed to gather and collate, he could not have been sent from the post to pillar - the respondent authority is directed to grant registration under the Goods and Services Tax Act, 2016 - petition allowed.
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2022 (3) TMI 868
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- It is a well settled principle of law that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or effect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it. Similarly, in the present matter the applicant withdrew the earlier filed petition on a promise made by corporate debtor. The corporate debtor also promised that the it would have no objection against initiation of insolvency proceedings in case of any failure to adhere terms of the agreement. In the present case also the applicant has acted upon the promise of the respondent corporate debtor and withdrew the earlier petition. The respondent itself made promise and therefore is now estopped from raising objection against the present petition. Time limitation - HELD THAT:- The respondent itself in its reply has admitted the fact of making partial payments to the applicant even in the year 2018. The same fact was also recorded in the order dated 12.04.2019 passed by this Tribunal. Therefore, fresh cause of actions were started from the each date of payments made by respondent in terms of Section 19 of the Limitation Act. Hence, the application is not time barred and the judgments relied upon by the respondent corporate debtor is not applicable. The present petition is allowed initiating Corporate Insolvency Resolution Process against the Corporate Debtor - moratorium declared.
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2022 (3) TMI 867
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Whether the Operational Creditor could prove that the Corporate Debtor has failed to discharge the debt that is due to the Operational Creditor and whether CIRP can be initiated against the Corporate Debtor? - HELD THAT:- The account statement filed by the Operational Creditor would show that the amounts paid by the Corporate Debtor are adjusted and the claim is only with regard to the amount remaining after such adjustment. As rightly contended, there is no evidence with regard to the certificate issued by the Auditor and that the auditor has issued the said certificate based on proper evidence and that he is the auditor of the Corporate Debtor at all. Hence, no value can be attached to the said statement made in the counter for the first time. The contention that both the accounts of the Corporate Debtor and M/s. Vaishnavi Impex having been maintained in the same premises, an error occurred does not receive any support and moreover is stands contradicted by the fact that the e-mail given by the Corporate Debtor along with the two separate statements of Corporate Debtor and M/s. Vaishnavi Impex would show that the two accounts were properly maintained without any mincing. The contention of the Operational Creditor that the two companies are managed by the same person is not refuted - It is clear from the material on record that the Corporate Debtor has incurred a debt of ₹ 3,60,11,075/- and defaulted in discharging the same inspite of the demand notice. Hence, the petition is liable to be admitted and as such it is admitted. Petition admitted - moratorium declared.
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2022 (3) TMI 866
Approval of Resolution plan - Seeking direction to RP to re-verify the claim of Jagriti Plastics Limited - direction for resubmission of final amounts offered by the resolution applicants to the Operational Creditors in a sealed form before this Adjudicating Authority - direction to CoC to decide over the Resolution Plans of the Ras after such incremental value is revealed - HELD THAT:- In view of Section 31 of the Code, the Adjudicating Authority, before approving the Resolution Plan, is required to examine that a Resolution Plan which is approved by the CoC under Section 30(4) of the Code meets the requirements as referred under Section 30(2) of the Code - Further, as per Regulation 38 of the CIRP Regulations, a Resolution Plan is required to contain a statement how it will deal with the interest of all the stakeholders including Financial Creditors and the Operational Creditors and if these are sufficiently provided in the Resolution Plan, the Adjudicating Authority may approve the Resolution Plan. As regards compliance of clause (b) of Section 30(2) of the Code, the applicant has certified in Form H that Part-II, clause 2 read with Part-III of the Resolution Plan provides for the payment of the debts of operational creditors which shall not be less than the amount to be paid to the operational creditors in the event of a liquidation of the Corporate Debtor under Section 53 - In terms of Section 30(2)(c), management of the affairs and control of the business of the Corporate Debtor has been provided in clause 5.1 Part-II, page 22 of the Resolution Plan. The next requirement envisaged by Section 30(2)(d) is that it must provide for the implementation and supervision of the Resolution Plan. Clause 5.1.1 Part-II of the Resolution Plan provide for the Monitoring Committee consisting of equal representation of FC, RA and Resolution Professional - Ld. Counsel appearing for the Resolution Applicant submitted that the Resolution Plan is as per the provisions contained in the Code and so, the same may be approved. In terms of Regulation 39(4) of the CIRP Regulations, the Resolution Professional has filed compliance certificate in Form-H which is annexed as Annexure-A-9 at page 139. It has been submitted in the application and in Form H duly certified by Resolution Professional that the final Resolution Plan meets the requirements as laid down in various clauses of Section 30(2) of the Code. All the requirements of Section 30(2) are fulfilled. In respect of compliances regarding CIRP Regulations especially Regulations 38 and 39, the Resolution Professional has certified in Form-H and explained in details that the Resolution Plan has complied with all the required Regulations. The Resolution Plan fulfils the requirement as referred in Section 30(2) of the Code and there are sufficient provisions in the Plan for its effective implementation as required under the proviso of Section 31(1) of the Code. The Resolution Plan has been approved by CoC with 100% favourable voting - the Resolution Plan, which was earlier approved by the CoC by the majority vote of 100% is approved - application allowed.
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2022 (3) TMI 865
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? - HELD THAT:- The Applicant filed the record of default recorded in the information utility and contended that from the aforesaid undisputable facts and circumstances, existence of debt and the default are apparent on the face of the record of this case, as such, the Applicant is entitled for an order for initiation of CIRP against the Corporate Debtor - there is debt payable by the Corporate Debtor, which has not been paid. Whether financial claim by the Applicant is barred by limitation? - HELD THAT:- There are no force whatsoever in the contention of the Corporate debtor that the claim is barred by limitation. Firstly, for the reason that, in OA No. 2325 of 2017 filed by the Applicant against the Corporate Debtor no such plea has been raised, OA has been allowed and recovery certificate dated 29.11.2018 for realization of the same against the Corporate Debtor has been issued by DRT-II, Hyderabad - the present application having filed on 26.12.2019 is perfectly within limitation. The Adjudicating Authority admits this Petition under Section 7 of IBC, 2016, declaring moratorium for the purposes referred to in Section 14 of the Code.
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2022 (3) TMI 864
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The Corporate Debtor failed to pay the outstanding amount as per the terms and conditions of the sanction letter dated 26.09.2016. Thereafter, the Financial Creditor issued a recall notice, as well as legal notice for the repayment of the outstanding amount but the Corporate Debtor failed to pay the outstanding loan amount - It is also noted that the respondent, Corporate Debtor chose not to appear and contest this application even after sufficient opportunities were given whereby this Adjudicating Authority, vide order dated 26.11.2021, passed an order to proceed ex-parte against the respondent Corporate Debtor. It is established from the record that there is default of amount of ₹ 89,75,40,237.91/-, along with the interest thereon, and the respondent Corporate Debtor has failed to pay the amount even after number of reminders and notice. Moreover, the Corporate debtor had itself admitted the debt of the Financial Creditor vide letter dated 25.08.2018. This application is otherwise complete and defect-free. The amount of default meets the threshold limit as prescribed under Section 4 of the Code and is within the limitation to initiate the CIRP against the Corporate Debtor. Application admitted - moratorium declared.
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2022 (3) TMI 863
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The registered office of corporate debtor is situated in Delhi and therefore, this Tribunal has jurisdiction to entertain and try this application. The application is complete which is filed in the proforma prescribed under Rule 4 (1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of the IBC. From the narration as above, we are satisfied that a default has occurred, and the debt has remained unpaid. Thus, the application warrants admission as it is complete in all aspects and is admitted, initiating CIRP as prescribed under the IBC. Application admitted - moratorium declared.
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FEMA
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2022 (3) TMI 917
Seizure orders - respondent No.2 has seized an amount of approximately 270 crores and has transferred a substantial portion of the said amount to its own bank account - HELD THAT:- Several circumstances are narrated with regard to the hardship which the petitioner Company would face, if an amount of ₹ 15,35,45,317/- is not ordered to be released. Under these circumstances, in order to keep the petitioner Company alive and to enable it to meet its day to day expenses like payment of salaries to its employees, payment of taxes, statutory dues and operational expenses etc., this Court, in the interest of justice, deems it appropriate to direct the respondent No.2 to release an amount of ₹ 15,35,45,317/- (Rupees fifteen crores thirty five lakhs fourty five thousand three hundred and seventeen only), which is commensurate with the amount mentioned in paragraph 9 of the affidavit filed in support of I.A. No.1 of 2022, i.e., expenditure incurred by the petitioner company for the months of November and December, 2021 and January, 2022.
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Central Excise
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2022 (3) TMI 916
Reversal of CENVAT Credit - creation of provisions in the balance sheet for the old and slow-moving inputs during the period 2007 08, 2008 09 and 2009 2010 (upto August 2009) - non-reversal of CENVAT credit in relation to these provisions so made in the balance sheet - Rule 3 (5B) of CENVAT Credit Rules, 2004 - HELD THAT:- From Rule 3 (5B) which was introduced with effect from 11.5.2007 and also the amendment brought forth with effect from 1.3.2011, it can be seen that credit has to be reversed even if partially written off for the period prior to 1.3.2011. The Rule was introduced in 2007 and then the requirement was to reverse credit when fully written off. In the present case, the department does not allege that the appellant has fully written off the value of inputs. It is merely alleged that the appellant has created a provision for the old and slow-moving inventory. In the Show Cause Notice, it is not at all alleged that the appellant has fully written off the value of inputs. The method adopted by the appellant is more akin to partially writing off the value of inputs. The rule requiring reversal of credit even when there is partial write off of the value of the inventory has come into application only after the amendment with effect from 1.3.2011. On perusal of the balance sheet, it can be seen that the appellant has not fully written off the value of inventory - It is very evident from the balance sheet that the value of the inputs has not been fully written off. In such circumstances, Rule 3(5)(B) does not apply for the disputed period. The Tribunal in the case of M/S. SANGHAVI ENGINEERING VERSUS CCE, HYDERABAD [ 2012 (7) TMI 821 - CESTAT BANGALORE] as well as M/S. KIRLOSKAR FERROUS INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL TAX AND CENTRAL EXCISE, BELGAUM [ 2018 (11) TMI 348 - CESTAT BANGALORE] had occasion to analyse the very same issue and has held that the requirement of reversal of credit when the value has been partially written off would take effect only after 1.3.2011. The demand cannot sustain - Appeal allowed - decided in favor of appellant.
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2022 (3) TMI 915
Clandestine removal - allegation based on the statement of the appellant under Section 14 of the Central Excise Act, 1944 - reliance also placed on the statements of the suppliers of raw material and buyers of the finished goods - admissibility of computer printouts - existence of corroborative evidences or not - HELD THAT:- There is complete absence of evidence of actual manufacture of goods viz. evidence of shortage or excess of goods, transportation of goods or records or goods found from the buyers premises etc. It emerges that case of clandestine removal has been booked based essentially on the statements of the persons recorded under section 14 of the Act in which computer print outs containing data of purchase and sales transactions have been shown. The said statements cannot be held as relevant without having followed the mandate of section 9D of the Central Excise Act, 1944. n the present case conditions as laid down in Section 36B were admittedly not fulfilled, therefore the printouts taken from computer cannot be relied upon as evidence to conclude the clandestine removal. The charge of clandestine removal against the appellant could not be established by the revenue beyond doubt. Therefore the impugned order is not sustainable - appeal allowed - decided in favor of appellant.
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2022 (3) TMI 914
Manufacture of Bulk Drugs - eligibility for exemption under Sl No 47 (A) of the notification no 04/2006-CE dated 01.03.2006 - invocation of extended period of limitation - whether amount paid @ 5% or 8% or 10% of value of goods cleared claiming exemption from payment of duty should not have been adjusted against the demand made, by denying the exemption claimed - levy of penalty u/s 11AC of the Central Excise Act, 1962 - HELD THAT:- In view of the findings recorded in the impugned order which are not disputed by the appellant/assessee, there can be no denial of the fact that the goods cleared by the appellant/assessee are nothing but bulk drugs , specifically exempted at Sl No 47 (B) of the Notification No 4/2006-CE subjected to following the procedure as specified by the condition No 2 appended to said notification. Admittedly procedure as per said condition no. 2 has not been followed by the appellant/assessee. When such procedure as specified by the notification has not been followed the benefit of the exemption at Sl No 47 (B) is not admissible to the appellant. We are not impressed by the arguments advanced by the appellant/assessee that they have correctly availed the exemption under Sl 47 (A), by referring to definition as per Drug Price Control Order, defining drug includes bulk drug and its formulation. If this interpretation is agreed to entry at Sl No 47 (B) will become redundant and it is settled position in law any interpretation which renders some entry in the fiscal/ taxing statue cannot be correct interpretation. Generalis Specialibus non Derogant means erstwhile special law is given superiority over later general law - the specific entry in the notification will have to be given precedence over the general entry, not defined but by referring to the definition of general entry from some other statue. Since the controversy in respect of interpretation of the exemption notification has now been settled by the Hon ble Apex Court in COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY ORS. [ 2018 (7) TMI 1826 - SUPREME COURT] , relying on this decision there is no scope left for holding a view which is contrary to the principle laid down that notification needs to be construed strictly and ambiguities resolved in favour of the revenue. In view of the above there are no merits in the submissions made by the appellant/assessee on the merits of the case. Invocation of extended period of limitation - HELD THAT:- There are no justification in the impugned order for invoking the extended period, as Commissioner has not even recorded finding to effect, that the ingredient with intent to evade the payment of duty, for invoking the extended period of limitation is present in the case. The issue under consideration is purely of interpretation of two competing entries in the notification and the appellant/assessee has explained the reasons for the interpretation made by him for adopting a particular interpretation - Just because the interpretation of the notification adopted by the appellant/assessee is not acceptable, it cannot be ground for invoking extended period of limitation. Appellant/Assessee have paid certain amounts while clearing the goods claiming exemption from duty, @ 5%, 8% or 10% of the value of goods as applicable - reversal of said amount required or not - HELD THAT:- This amount which paid by the appellant/assessee was required to be paid by them in terms of Rule 6 of CENVAT Credit Rules, 2004 as they were not maintaining separate account for the goods cleared under exemption and on payment of duty. The fact that appellant/assessee has paid the said amount cannot be disputed, Commissioner has in his order only observed that the appellant/assessee was not able to provide any proof of such payment - the observation made by the Commissioner are totally erroneous as all the amounts so paid or reversed from the CENVAT account are definitely reflected in the monthly returns filed by the appellant/assessee. - for the periods when the claim to complete exemption from payment of duty is denied the amounts so paid need to be adjusted against the duty demanded denying the benefit of exemption claimed. Penalty imposed under Section 11AC - HELD THAT:- Since the conditions for invocation of extended period as per Section 11 A do not exist in the present case the penalty imposed in terms of the Section 11 AC thus cannot be sustained. Appeal allowed - decided in favor of appellant.
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2022 (3) TMI 913
CENVAT Credit - duty paying document / invoices - cenvat credit availed on the strength of railway receipt which contained all the details as prescribed under Rule 9 of the Cenvat Credit Rules - Revenue alleged that since this certificate for transportation of goods by the appellant has been prescribed by the rules w.e.f. 27.08.2014, the cenvat credit availed by them on the basis of railway receipts in respect of the said services received from Railway is improper - HELD THAT:- There is no dispute that in terms of the definition of input services as per Rule 2(k), the services against which the credit has been availed are the input services for the appellant. Admissibility of the cenvat credit is determined as per Rule 3 of the Cenvat Credit Rules. Rule 9 prescribes the documents against which cenvat credit can be taken by the appellant. It does not determine the admissibility of cenvat credit in any manner. Sub-rule (fa) subsequently provided for the documents issued by the Railway as documents for availing cenvat credit. However, such prescription w.e.f. 27.8.2014 could not have been the reason for holding that the credit availed against the railway receipts containing all the details was inadmissible. Rule 9 is subservient to Rule 3 for determining the admissibility of cenvat credit. If the requirements of Rule 3 are satisfied, the credit could not have been denied. Further, Rule 9(2) read with Rule 4A of the Service Tax Rules provides that any document which contains the details as prescribed under Rule 4A shall be considered as a proper duty paying document for all the purposes including availment of cenvat credit. Appeal allowed - decided in favor of appellant.
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2022 (3) TMI 912
CENVAT Credit - input services - maintenance and repair work of the residential colony - denial on the ground that the said service has no nexus with the manufacture of final product - HELD THAT:- Admittedly, the residential colony was constructed adjacent to the factory because of the reason that the factory manufacturing cement, which runs round the clock, is located at a remote place which is away from the city. Unless the residential colony is constructed near the factory, the appellant will not be in a position to get the proper/ adequate manpower for running its plant/ activities. Considering the aforementioned activities and the legistature intent behind the cenvat scheme, the Hon ble Andhra Pradesh High Court in the case of COMMISSIONER OF CUS. C. EX., HYDERABAD-III VERSUS ITC LIMITED [ 2011 (11) TMI 516 - ANDHRA PRADESH HIGH COURT] has held that cenvat credit of service tax paid on the taxable services used in the residential complex shall be available to the manufacturer. In the Ruling in the case of CCE VERSUS MANIKGARH CEMENT [ 2010 (10) TMI 10 - BOMBAY HIGH COURT] the Hon ble Bombay High Court have considered the eligibility of Cenvat credit of Service Tax on account of repairs, maintenance, civil construction etc. used in the residential colony, was disallowed on the ground that such service is not covered under the definition of input service. The Hon ble High Court also observed that the extension of residential colony may be a welfare activity while carrying on business. Such explanation may be available under the Income Tax Act, however to qualify as an input service, it should have nexus with the business of the assessee. With respect to Hon ble Bombay High Court, it is found that the aforementioned observations are not in tune with the language and spirit of Rule 2(l) of Cenvat Credit Rules. The rules specifically provides for allowing Cenvat credit of any service used by manufacturer, whether directly or indirectly in or in relation to the manufacturer of final products, and clearance of the final product up to the place of removal. In facts and circumstances hereunder, the assessee provides and maintains the facility of residential colony adjacent to the factory. It cannot get the service of competent staff and personnel for running the factory, which is run round the clock, and the employees have to work in shifts. Appeal allowed - decided in favor of appellant.
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2022 (3) TMI 862
Validity of claim before the Resolution Professional in respect of the confirmed demands by Deputy Commissioner, CGST Central Excise, Division Chandrapur - HELD THAT:- A three judges bench of Hon ble Supreme Court has in the case of Ghanashyam Mishra Sons [ 2021 (4) TMI 613 - SUPREME COURT ] considered similar issue and it was held that all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 could be continued. This Tribunal has no jurisdiction to entertain the present appeal. The same is accordingly abated in terms of Rule 22 of CESTAT (Procedure) Rules, 1982.
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2022 (3) TMI 861
Refusal to grant registration to the Respondent - refusal on the ground that its company is operating on the premises of another company who had outstanding Central Excise dues - whether Rule 9 prohibits issue of two registration certificates for one and the same premises that formed the basis of the adjudication order? - HELD THAT:- On a bare reading of Rule 9 no such prohibition is apparent. Moreover, a company that had under gone a process of liquidation is deemed to be non-existent for which waiting for a request from the said company to deregister it is irrelevant and is not dependent on subsequent registration of any company functioning from the said premises, existence of which remained undisputed in view of its acquirement of right, title and interest over the property through an official liquidation apparently in an auction process that was done in compliance to the order passed by the Hon'ble Bombay High Court and in view of the fact that carrying out business over the said property including filing of its return before all competent authorities bear testimony to the fact that appellant is the rightful owner of the said property, it is entitled to get a registration for its business activities carried out from the premises in question. The appeal is dismissed.
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2022 (3) TMI 860
Demand of Central Excise Duty - reversal of 5% of value of exempted product - penalty under Rule 25(1) (d) of Central excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944 - HELD THAT:- Appellant paid the confirmed demand under protest and now express its willingness to pay the penalty of ₹ 1,45,700/-. Rest of demands were dropped and what is required to be realised is interest under Section 11AB of the Central Excise Act on confirmed demand. As reveals from the case record the disputed period was between March, 2010 and May, 2010, duty demands were ultimately confirmed by the Commissioner (Appeals) on 5.01.2012 and within 2 months appellant had paid the same on 02.03.2012 under protest. Availing Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 for penalty component, appellant would have got substantial reduction to the extent of 1/3 of such penalty imposed on it. Now, since appellant has expressed its willingness to pay the entire penalty amount, interest for such a period being too meger, we are of the considered view that in the interest of justice and to put an end to the litigation that is being carried out for over 12 years, such a genuine request of the appellant can be considered favourably to secure ends of justice by invoking Rule 41 of the CESTAT (Procedure) Rules, 1982. The appeal is dismissed and the appellant is directed to pay penalty only of ₹ 1,45,700/- within 3 months of receipt of this order.
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CST, VAT & Sales Tax
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2022 (3) TMI 859
Levy of penalty u/s 54(1)(14) of the Uttar Pradesh Value Added Tax Act, 2008 - penalty could be sustained without recording any cogent finding as to intention to evade tax or not? - HELD THAT:- It transpires that in assessment year in question the assessee was found transporting ten containers of Bitumin black from a registered dealer at Kolkata (West Bengal). These were intercepted in the course of import into the State. At that time the goods were accompanied to import declaration Form-38. In that, all columns except Column 6 was duly filled up. Besides the fact that the assessee explained the aforesaid as inadvertence on part of the consignor, the assessing authority did not record any finding as to intention to evade tax on part of the assessee. The penalty order was passed mechanically imposing penalty solely on account of Column 6 found blank. A division Bench of this Court in M/S Rama Pulses Vs State of U.P. Others [ 2009 (10) TMI 885 - ALLAHABAD HIGH COURT ] where it was held that before imposing penalty the authority has to give notice under Section 54 (1) and to record a finding either on the basis of material before it, or produced by the dealer, or any other person, or the department and which may include incomplete Form 38, (which may be a ground for seizure of the goods), that there was an intention to evade the payment of tax. In absence of any cogent finding as to intention to evade tax, levy of penalty under Section 54(1)(14) of the Act, is unsustainable - revision allowed.
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2022 (3) TMI 858
Validity of assessment order - jurisdictional error or not - levy of VAT - transfer of property in goods involved in execution of works contract - HELD THAT:- It is well settled in law that transactions under the CST Act C forms which were provided by the purchaser (NEEPCO) ought to be deleted from the taxable turnover under the TVAT Act. In other words, all transactions under the CST Act ought to have been deleted apart from deletion as directed by the Hon ble Supreme Court in the Builders Association case [ 1989 (3) TMI 356 - SUPREME COURT] Therefore, this Court is of the considered view that there is no further necessity to go into the arguments advanced by the learned counsel of both sides and accordingly, quash the assessment order dated 23.11.2016 passed in the present matter and remit the matter back to the Assessing Authority with further directions to pass fresh orders of assessment strictly complying with the directions issued by the Hon ble Supreme Court in the Builders Association case (supra) as well as in the judgment rendered by a Division Bench of this Court in Projects and Services Centre case [ 1990 (11) TMI 358 - GAUHATI HIGH COURT] The petitioner are directed to appear before the Assessing Authority on 04.04.2022 along with a copy of this order and the Assessing Authority is directed to conclude the fresh assessment proceedings within a period of six months from the date of the first appearance of the partiespetition disposed off.
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Indian Laws
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2022 (3) TMI 911
Dishonor of Cheque - house was purchased and only part of consideration was paid - applicability of section 138 of NI Act or not - HELD THAT:- On going through the provision of Section 138 of Negotiable Instruments Act, it is clear that petitioner was owing debt liability towards respondent because he has not paid full consideration of the purchased house to the respondent. He paid part consideration by way of cheque No. 467136 amounting to ₹ 2,90,000/-. The Apex Court in the case of Duli Chand Vs. Delhi Administration [ 1975 (8) TMI 150 - SUPREME COURT ] has held that, the jurisdiction of the High Court in a criminal revision application is severely restricted and it cannot embark upon a re appreciation of the evidence. This Court is of the view that Court below have not committed any illegality - revision dismissed.
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2022 (3) TMI 857
Source of Income of Public Servant or Ostensible Owner - Addl. CIT - Abuse of official position, as public servant - possession of disproportionate assets - It is argued that the prosecution has to prove its case beyond reasonable doubt and once the prosecution succeeds in doing so, the appellants may discharge the onus merely by the standard of preponderance of probabilities - prosecution of public servants with non-public servants - offences punishable under section 13 (2) read with 13(e) of the Act - HELD THAT:- It is settled law that in the case of circumstantial evidence based on some foundational facts, the court draws inferences. When such inferences may be called legal inferences and when it falls in the realm of conjectures and surmises, the line may at times be blurred or dim. But in view of the settled law, it is bright and distinct - In view of the provisions of the Evidence Act and the law as laid down in the case of K. Ponnuswamy [ 2001 (7) TMI 1325 - SUPREME COURT ], the natural presumptions considering the common course of natural events and human conduct has a big role to play to make inferences by the court. It helps the court to believe existence or non-existence of any fact or to consider its existence so probable that a prudent man ought to act upon the situation that it exists. Source of Income of Public Servant or Ostensible Owner - HELD THAT:- In the absence of direct financial links, the source of income of ostensible owner is not to be examined, it would defeat the very purpose of enacting the Act. If a public servant by any means avoids any direct financial link and acquires property in the name of others, in such cases, if the source of income of ostensible owner is not examined, the matter cannot be investigated any further. Therefore, in such cases, where the public servant is charged with disproportionate assets along with non public servant and it is alleged that the properties were acquired in the name of non public servant, the court must examine the source of purchase money. It means as to how the ostensible owner acquired the money to purchase the property. The court below did not adopt any erroneous approach. The court below while examining the source of income of ostensible owner did proceed in accordance with law. Devolution of interest of the coparcenary property - whether A-1 was ever part of any HUF? - HELD THAT:- In the instant case the partition has been effected by way of a Mutation Case as revealed in Ex. A-193. It is a public document. Such partition cannot be brushed aside on the ground that it is for the convenience and not actual partition - This Court is of the view that the court below rightly observed that agricultural income of A-2 was ₹ 45,000/- per year. For eight years, which is the check period, the total income has rightly been assessed as ₹ 3,60,000/-. ₹ 45,000/- rent from Rajpur Road house has also been added to it and the court below concluded that the income from agriculture as well as rent of A-2 for the check period is ₹ 4,05,000/-. This finding is based on evidence. It does not warrant any interference. This Court is of the view that the prosecution has been able to prove beyond reasonable doubt that A-1 had been in possession for which A-1 could not satisfactorily account, of pecuniary resources or properties disproportionate to his known source of income. A-1 purchased various properties in the name of A-2, A-3 and A-4 and others. Those properties are benami properties of A-1 - the prosecution has also been able to prove beyond reasonable doubt that A-1 attempted to obtain gratification other than legal remuneration from PW 6 I.K. Batta, for the purposes as disclosed in the earlier part of this judgment. This Court is of the view that the prosecution has been able to prove beyond reasonable doubt the offence punishable under Section 13(2) read with Section 13(1)(e) of the Act and Section 7 of the Act against A-1 - the court below has sentenced A-1 under Section 13(2) read with Section 13(1)(e) of the Act. The sentence is in accordance with law. It is also liable to be confirmed. This Court is of the view that interest of justice would be served if A-1 is sentenced to rigorous imprisonment for a period of 5 years with a fine of ₹ 10,000/- under Section 7 of the Act - this Court is also of the view that the prosecution has been able to prove beyond reasonable doubt that A-3 and A-4 abetted A-1, in the commission of offence punishable under Section 13(2) read with Section 13(1) (e) and Section 7 of the Act. The conviction of the appellant Swetabh Suman for the offence punishable under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988 is upheld and confirmed. The sentence imposed on the appellant Swetabh Suman under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988 is also upheld and confirmed - the appellant Swetabh Suman is convicted under Section 7 of the Prevention of Corruption Act, 1988 and is sentenced to rigorous imprisonment for a period of five years with a fine of ₹ 10,000/-. In default of payment of fine, the appellant Swetabh Suman shall undergo simple imprisonment for a further period of two months. Appeal disposed off.
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