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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter March 25, 2023 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles LIMITATION IN IBC FOR CASE COVERED UNDER SICA The Court may throw a meritorious case for latches if filing is an afterthought. GST provisions cannot be interpreted to deny the right to trade and commerce to any citizen Cancellation of GST Registration without stating a reason in SCN/Order is cryptic in nature News HSN Code Reporting in e-Invoice on IRPs Portal Notice of Amendments - THE FINANCE BILL, 2023 1st G20 Trade and Investment Working Group (TIWG) Meeting in Mumbai ULIP to facilitate India’s logistics sector with data-driven visibility and transparency QCI & UP Govt. launch Uttar Pradesh Gunvatta Sankalp in Lucknow Highlights / Catch Notes GST Seeking grant of regular bail - fraudulent Input Tax Credit (ITC) - In this case, the investigation is already complete. The complaint has already been filed in the concerned Court. The co-accused have already been granted bail by the Coordinate Bench of this Court and the case is to be tried by the Magistrate - The further custody of the petitioner would not serve any useful purpose. - HC Visit to Get Source Rejection of refund claim - opportunity of hearing not provided - As per Rule 92 (3) of CGST Rules, 2017, the provision is very clear that any application for refund shall not be rejected without giving the applicant an opportunity of being heard. The rule is mandatory and the department is bound to give opportunity of hearing to the petitioner before passing impugned order - HC Visit to Get Source Income Tax TDS u/s 194H - commission- trade discount allowed by the assessee to INS accredited Advertising Agent - Tribunal correctly held that it is clear that there is no principal and agent relationship between the newspaper and the advertising agency. Thus, both on facts as well as in law, the respondent/assessee has to succeed and the revenue has to fail. - HC Visit to Get Source Block Assessment - prosecution Proceedings- Offence Committed u/ s 276C(1) and 277 r.w.s 278B - having decided the preliminary issue as regards there being no power vested with the Income Tax Department to launch a prosecution with regard to undisclosed income for block assessment for the period between 1.7.1995 to 1.1.1997, the necessary consequence would be quashment of the Complaints. - HC Visit to Get Source Reopening of assessment u/s 147 - Period of limitation - The audit party is entitled to point out a factual error or omission in the assessment. reopening of the assessment in the light of factual errors pointed out by the audit party is permissible under law. In the present case, even though the assessment was reopened on the basis of the error pointed out by the revenue audit, the same was done after the period prescribed u/s 147. Tribunal is right in allowing the appeal filed by the assessee. - HC Visit to Get Source Deduction u/s 54B - investment made prior to the date of sale - Agriculture land- the assessee should be allowed the benefit of deduction under section 54B of the Act since the purchase in the new property has been made out of advances received towards sale of agricultural properties held by the assessee. - AT Visit to Get Source Due date for filing of Income Tax Returns - benefit of carry forward of loss - RBI permission letter mandating the assessee to get his accounts audited - Extension of due date of cases where accounts are required to be audited under the provisions of Income Tax Act while filing the income tax returns - As per the circular of CBDT, the benefit of extension of due date is not available where the accounts are not being audited under the income tax act - AT Visit to Get Source Penalty imposed u/s 271A - Failure to maintain books of accounts - no income from business or profession received by the assessee which exceeds Rs.1,20,000/-. Therefore, maintenance of books of account u/s 44AA of the Act is not mandated for the assessee. - no penalty - AT Visit to Get Source LTCG - Deduction u/s 54F - whether the assessee herein has actually constructed any residential house within the meaning, object and time laid down u/s. 54F of the Act, the material on record does not suggest any construction of the house in terms of section 54F? - there was no evidence in support of the fact that there was actually any construction within the stipulated time as per section 54F - benefit of exemption denied - AT Visit to Get Source TDS u/s 195 - As the assessee rendered "International services" outside India which required the payment in question. If this is the position, which has not even been disputed by the revenue, then there can be no question of roping such income within the ken of section 9(1)(i) - Since the income cannot be described as deemed to accrue or arise in India and there is no doubt about such income having not been received or deemed to be received or accruing or arising in India, the taxability of such income fails. - AT Visit to Get Source TP Adjustment - benchmarking done by the assessee by adopting internal CUP - the comparable selected by the assessee is the correct comparable being payment of royalty for technology acquired for identical activity as availed by the assessee, while that of the TPO are for totally different activity - AT Visit to Get Source Customs Classification of imported goods - seamless tubes and pipes - the goods qualify as nickel alloy in terms of Section note 5 of Section XV read with sub- heading note 1 (b)(ii) of chapter 75 - It is also not disputed by the Revenue that the said product is commercially also known as nickel alloy and not steel. This specific assertion has been made by appellant and the same has not been disputed by the Revenue. - AT Visit to Get Source Indian Laws Promotion of investments by providing structured packages for eligible projects - In the present case, the fact that the petitioner has failed to achieve the requisite production for 13 years after commencement of production stands as testimony to its ineligibility to the incentive - The mere fact that a period or a tenure has not been set out under an order of exemption would thus, in my considered view, not lead to the conclusion that such a benefit was extended to be permanent. - HC Visit to Get Source Service Tax Refund of service tax paid on such vacant land - unjust enrichment - it is clear evidence that the incidence of the service tax paid by the appellant has been passed on to the service recipient for the reason that the gross amount collected from the service recipient includes the service tax amount also - the appellant is not entitle for the refund. - AT Visit to Get Source Central Excise Valuation - related party transaction - The revenue’s concern in examining whether the parties were related might be justified; however, it could not have concluded that such relationship, as is contemplated by Section 4(4)(c) could have been inferred, without applying the proper test. - SC Visit to Get Source Classification of imported goods - Parts - Cutter Suction Dredger along with other accessories and equipments - A plain reading of the Note 2 of the Section XVII shows that parts and parts of accessories cannot apply to specified articles, including items classifiable under 8401-79, 8481-82, and to some extent, 8483. - The test is not whether multiple uses are possible but whether these parts are essential for the purpose of dredging in a Cutter Dredger. - SC Visit to Get Source VAT Levy of penalty - mens rea to evade tax in the present case as the goods meant for trade were being transported by the dealer without proper and genuine documents with an intention to evade tax - Keeping in view the statement given by the driver and the manager (Manoj Sehgal), penalty has been rightly imposed by the competent authority, as the appellant did not produce any invoice/document immediately after the goods were seized on 26.02.2009. - HC Visit to Get Source Revisional powers - Since the assessment order was passed under the Haryana General Sales Tax Act, no proceedings could be initiated after coming into force the Haryana VAT Act, as has been done in the present case - HC Visit to Get Source Retrospective withdrawal of exemption - exemption from sales tax / VAT to Waste Paper, Paper Boards and used/old bottles - while the Government is conferred with the power to grant exemption prospectively or retrospectively, the power to withdraw, annul, modify or vary a notifcation traceable to sub-Section (3) to Section 17 of the TNGST Act, cannot be exercised retrospectively. - HC Visit to Get Source Inter unit transfer of goods would constitute a sale or not - It is thus evident that unless and until there are two distinct entities, the question of sale may not arise. However, the Tribunal has not even addressed this issue and has misdirected itself in looking at the factum of independent registrations and independent lines of business to conclude that the alleged inter unit transfer would constitute sale. - HC Visit to Get Source Case Laws: GST 2023 (3) TMI 1063 Seeking grant of regular bail - accumulation of very high amount of fraudulent Input Tax Credit (ITC), on the basis of bogus purchase invoices from nonexistent and fraudulent firms - showing sale invoices at lower tax rate and claiming inverted tax refund, by filing and unloading fake documents including CA certificates - same modus operandi was used by cartel of economic offenders in filing bogus applications for refund consisting of various fake firms. HELD THAT:- The petitioner is involved in economic offence and is in custody since 26.05.2022 - In case THE STATE OF BIHAR ANR. VERSUS AMIT KUMAR @ BACHA RAI [ 2017 (4) TMI 1410 - SUPREME COURT] , it is held by Hon ble Apex Court that there is no straight jacket formula for consideration of grant of bail to an accused as it all depends upon the facts and circumstances of each case. The grant of bail was set aside to the kingpin of crime, publicly known as Bihar Topper Scam , by observing that Investigating Officer was going to file additional charge-sheet. In SANJAY CHANDRA VERSUS CBI [ 2011 (11) TMI 537 - SUPREME COURT] , it is held that when charge-sheet is already filed before the Court, the presence of accused in custody may not be necessary for further investigation. It is held therein that the appellants were entitled to grant of bail pending trial on stringent conditions in order to ally the apprehension expressed by CBI. In this case, the investigation is already complete. The complaint has already been filed in the concerned Court. The co-accused Sunil Mahlawat and Gaurav Dhir have already been granted bail by the Coordinate Bench of this Court and the case is to be tried by the Magistrate - The further custody of the petitioner would not serve any useful purpose. The petitioner is ordered to be released on regular bail, subject to his furnishing bail/bond amounting to Rs.10 lakhs with two sureties in the like amount, to the satisfaction of trial Court/Duty Magistrate concerned and subject to him being not required in any other case - Petition allowed. 2023 (3) TMI 1062 Cancellation of GST registration of petitioner - non-service of SCN - Case of petitioner is that petitioner did not receive the show cause notice dated 16.12.2020 and therefore did not submit reply dated 25.12.2020 as stated by the 1st respondent - violation of principles of natural justice (audi alterem partem) - HELD THAT:- As a matter of fact, on going through the order dated 29.12.2020, there are no reason being mentioned by the 1st respondent for cancellation of GST registration of the petitioner - Be that as it may, against such cancellation of registration, petitioner preferred appeal before the 2nd respondent. However, by the order-in-appeal dated 12.01.2023, 2nd respondent rejected the appeal by upholding the order passed by the 1st respondent. On going through both the orders dated 29.12.2020 and 12.01.2023, there appears to be total non-application of mind on the part of the said respondents while passing the two impugned orders. The issue raised in this writ petition is no longer res integra - reliance placed in the case of M/S. CHENNA KRISHNAMA CHARYULU KARAMPUDI VERSUS THE ADDITIONAL COMMISSIONER APPEALS1 AND ANOTHER [ 2022 (7) TMI 82 - TELANGANA HIGH COURT] where it was held that It is further found that the issue pertains to cancellation of GST registration of the petitioner. In the facts and circumstances of the case, it would be just and proper if the entire matter is remanded back to respondent No.2 to reconsider the case of the petitioner and thereafter to pass appropriate order in accordance with law. Both the orders are set aside - matter remanded back to the file of the 1st respondent for passing a fresh order in accordance with law after giving due opportunity of hearing to the petitioner. Petition allowed by way of remand. 2023 (3) TMI 1061 Principles of natural justice (audi alterem partem) - petitioner was never given personal hearing before passing the final order - refund claim in accordance to the provisions of Section 54 of CGST Act, 2017 and CGST Rules, 2017 - HELD THAT:- In the present case, it is not in disputed that the petitioner was granted time to appear before the Competent authority but due to COVID 19 situation in the country, he could not appear and prayed that the petitioner be allowed to attend the personal hearing through Video Conferencing. The respondents have admitted this fact that petitioner did not appear when the final order was passed. As per Rule 92 (3) of CGST Rules, 2017, the provision is very clear that any application for refund shall not be rejected without giving the applicant an opportunity of being heard. The rule is mandatory and the department is bound to give opportunity of hearing to the petitioner before passing impugned order (P-2 colly). The respondents are justifying their order on the sole ground that the petitioner did not appear. The matter is remanded back to respondent No. 2 to pass fresh order on the refund applications of the petitioner after giving opportunity of hearing to the petitioner, in view of Rule 92 (3) of CGST Rules, 2017 - petition allowed by way of remand. 2023 (3) TMI 1060 Seeking gran of bail - alleged evasion of tax by availing ITC on the basis of fake invoices - stand of the Department shows that the facts of the case of the present applicant are exactly the same as the facts of the case of co-accused persons, namely, Rajiv Chawla and Shipra Chawla, who have already been granted bail by Sh. Shailender Malik, Ld. ASJ on the basis of similar summons of even dates - HELD THAT:- Judicial notice can be taken of the fact that when accused persons are in Jail, important factual assertions may not be made by the counsel in applications due to paucity of instructions. Moreso, when the factual assertion give way to relief on legal ground. It is only after co-accused, namely, Rajiv Chawla and Shipra Chawla were granted bail on a legal submission, relying on Section 6(2)(b) of CGST Act that the accused seems to have given the relevant information to his counsel and perhaps that is the reason why such a factual ground was never raised in the first bail application. In any event, besides the fact that the case of the accused is covered on all fours by the bail order of Rajiv Chawla and Shipra Chawla on ground of Section 6(2)(b) of CGST Act, it is also noticed that the stand of the Department in the present case further supports the claim of bail of the applicant/accused as the Department has itself claimed in the reply that the main accused and conspirators in the present case were Rajiv Chawla and Shipra Chawla and the present applicant was only an employee of theirs. The Department is also informed that the doctrine of law of the case requires that when a finding is given in a case, unless the same is disturbed by a higher court, the said finding on a question of law would continue to operate and bind all courts of equal jurisdiction i.e. all subsequent judges, exercising coordinate power - considering the said doctrine, this court cannot brush aside the view or interpretation given to Section 6(2)(b) of CGST by the Roster Judge, Sh. Shailender Malik, Ld. ASJ and take a different view in the same matter. The present accused/applicant Kamal Kumar is admitted to bail on furnishing of bail bonds/surety bonds in the sum of Rs.10,000/- with one surety of like amount to the satisfaction of the concerned Ld. MM/Duty MM - application disposed off. 2023 (3) TMI 1059 Seeking grant of Regular Bail - It is stated that entire case is based on documents and accused has already joined the investigation earlier when summons were issued. - newly registered GSTINs indulged in issuing invoices without actual supply of goods - case of accused is that the main accused in this case namely Rajiv Chawla and his wife Shipra Chawla have already been granted bail and accused/ applicant is no more required in the investigation - HELD THAT:- Having gone through the record while there is no denial to the fact that accused/applicant is in judicial custody, however as per Senior Standing Counsel appearing for DGGI investigation in the matter is still going on as stated in para 5 of the reply of the Department. In such situation taking into consideration the serious nature of the offence and the fact that investigation of the Department is still going on, no case of the accused/applicant is at parity with other accused Rajiv Chawla who has already been granted bail on 17.02.2023. Moreover perusal of order dated 17.02.2023 of granting bail to accused Rajiv Chawla would show that in that case this court had considered the provisions of Section 6(2)(b) of CGST Act as there were multiple actions initiated by different agencies under the CGST. Such is not the position in this case. Bail application dismissed. Income Tax 2023 (3) TMI 1058 TDS u/s 194H - trade discount allowed by the assessee to INS accredited Advertising Agent - Whether not in nature of Commission and therefore not subjected to TDS? - HELD THAT:- The substantial question of law which has been framed for consideration has been answered in favour of the respondent/assessee in several decisions. CBDT issued Circular being No.5 of 2016 dated 29th February, 2016 clarified by the Board that no TDS is attracted on payments made by television channels/newspaper companies to the advertising agency for booking or procuring of or canvassing for advertisements. It has been further clarified that the word commission referred to Question No.27 of the Board s Circular No.715 dated 8th August, 1995 does not refer to payments by media companies to advertising companies for booking of advertisements but to payment for engagement of models, artists, photographers, sportspersons, etc. and, therefore, is not relevant to the issue of TDS referred in this Circular. Thus, the legal position as understood by the CBDT is clearly in favour of the respondent/assessee. Tribunal correctly held that it is clear that there is no principal and agent relationship between the newspaper and the advertising agency. Thus, both on facts as well as in law, the respondent/assessee has to succeed and the revenue has to fail. 2023 (3) TMI 1057 Block Assessment - prosecution with regard to undisclosed income for block assessment - Offence Committed under Section 276C(1), Section 277 read with Section 278B - HELD THAT:- Since the learned Coordinate Bench has taken a view as regards there being no provision existing at the relevant point of time whereby the Income Tax Department could launch a prosecution as regards income disclosed in block assessment for the period between 1.7.1995 to 1.1.1997, automatically and as a direct consequence, quashing of prosecution is the only necessary corollary. Having come to such a conclusion, there was no requirement for the learned Coordinate Bench to have discussed with regard to applicability of Section 278E of the Act and whereas in the considered opinion of this Court, therefore, the submission of the learned Advocate for the Income Tax Department cannot be accepted. Insofar as the submission of Income Tax Department that the decision in Criminal Misc. Application [ 2018 (10) TMI 1737 - GUJARAT HIGH COURT ] would not be applicable on the ground that the heads on which incomes were not disclosed were different than the heads of undisclosed incomes in the present case, therefore, the same may not be applicable. In the considered opinion of this Court, the Criminal Complaint has been filed by the Department inter alia alleging commission of offences punishable under Section 276C, Section 277 read with Section 278B of the Act. A bare perusal of Section 276(1) would reveal that punishment is to be imposed for willful attempt to evade tax, penalty or interest and whereas the heads of income under which there has been any alleged willful attempt as per the Scheme of the Section does not hold any special relevance. In this regard it would also be relevant to note that while it is undoubtedly true that the learned Coordinate Bench of this Court had made observations with regard to the heads of income in the judgement dated 26.10.2018, but at the same time what would be necessary to note is the fact that having decided the preliminary issue as regards there being no power vested with the Income Tax Department to launch a prosecution with regard to undisclosed income for block assessment for the period between 1.7.1995 to 1.1.1997, the necessary consequence would be quashment of the Complaints. The latter observations would not have made any difference to the final finding on the issue. Under such circumstances, in the considered opinion of this Court, the fact of heads on which income had not been disclosed being different and distinct in the present group of cases and the decision by the learned Coordinate Bench in Criminal Misc. Application [ 2018 (10) TMI 1737 - GUJARAT HIGH COURT ] would not be of any material consequence and hence, the said submissions is also not countenanced. 2023 (3) TMI 1056 Nature of expenses - Expenses relating to purchase of steel rolls by treating the same as revenue expenditure - HELD THAT:- As relying on SARAVANA SPINNING MILLS P. LTD. [ 2007 (8) TMI 16 - SUPREME COURT] the expenses incurred for replacement of the steel rolling machine are revenue expenditure and thus the Tribunal was fully justified in dismissing the revenue s appeal. Thus, we find no ground to interfere with the order of the Tribunal. Deemed dividend u/s 2(22)(e) - Tribunal deleted addition - HELD THAT:- The finding of the CIT(A) remained uncontroverted before the Tribunal and also the fact that the findings were based on documents which were placed for consideration even before the Assessing Officer. Thus, we find that the conclusion arrived at by the Tribunal on the second issue does not call for interference. 2023 (3) TMI 1055 Deduction u/s 80 P (2) (a) (vi) - whether appellant society cannot be considered as Co-operative Societies engaged in the collective disposal of labour of its members as contemplated under section 80P(2) (a) (vi) and therefore not eligible for deduction under section 80 P of the Act? - appellant society having granted registration under the Kerala Co-operative Societies Act, 1969 and the Rules as a Miscellaneous Society , thus cannot be treated as a society engaged in collective disposal of labour of its members and therefore is not eligible/entitled for the deduction under section 80 P (2) (a) (vi) - HELD THAT:- By a judgment reported in Peravoor Range Kallu Chethu Vyavasaya Thozhilali Sahakarana Sangham [ 2015 (9) TMI 506 - KERALA HIGH COURT] a Division Bench of this Court has, in the assessee's own case for a previous assessment year, answered the issues in favour of the Revenue and against the assessee. Deduction u/s 80P - claim for deduction had not been made in a valid return filed by the appellant in terms of the IT Act - HELD THAT:- Subsequent amendments to Section 80AC by the Finance Act 2018 fortifies the view that we have taken for, it makes the claim for deduction under Section 80P conditional on filing a return within the due date prescribed u/s 139(1) - the pre-condition for claiming the deduction under Section 80P of the IT Act has now been made more stringent by reducing the time available to an assessee for making the claim. A reading of the provisions of Section 139(8) and (9) of the IT Act clearly reveals that even under those provisions, the restrictions placed with regard to the accrual of interest on amounts assessed on an assessee is with regard to the date of filing of a return within the time prescribed under the IT Act. Under Section 234A of the IT Act, however, although the provision suggests that even a return filed beyond the time prescribed under any of the provisions of the IT Act can have the effect of limiting the accrual of interest on the amounts assessed against an assessee, we have to see the said provision as permitting a filing of a belated return for the limited purpose of conferring a specific benefit of limiting the accrual of interest, on an assessee, and for no other purpose. We cannot accept the contention of the appellant/assessee that the said provisions which are intended for a specific purpose and are not general in nature, have to be seen as manifesting a statutory scheme that enables the Department to act upon a belated return for allowing the claim of an assessee for deduction under Section 80P of the IT Act. Decided in favour of revenue. 2023 (3) TMI 1054 Delay uploading the assessment order or generating the DIN - Assessment barred by the limitation period provided under Section 153(3) - specific case of the petitioner is that during the pendency of the writ petition, the order of assessment was uploaded on the web portal of the petitioner assessee which was not communicated through e mail address of the assessee - mandation to quote DIN number with regard to every communication made by the Revenue to the assessee - HELD THAT:- In the case at hand, the order sheet at Annexure B to the supplementary affidavit of the revenue dated 07.12.2022, shows that the assessment order was made/generated on 31.03.2022 and the intimation letter was issued on 03.04.2022. Therefore, the contention of the petitioner, that the said assessment order, dated 31.03.2022 which was uploaded on the web portal on 01.04.2022 and communicated to the petitioner on 03.04.2022 is barred by limitation, is misconceived and not sustainable in law , inasmuch as, section 153 (3) controls only making of order. There is no restriction or limitation period prescribed under Section 153 (3) for issue of order , uploading of order on web portal or communication of order In the present case the assessment order, dated 31.03.2022, was upload ed on web portal on 01.04.2022, which is just the next day after 31.03.2022, and even the DIN was generated on 01.04.2022. Accordingly, the delay, if any, in uploading or DIN was just of one day. The legislature itself has given stricter time line for Section 153 (1) and Section 153 (2) and has give n a liberal time line for Section 153 (3). Thus it may not be correct to apply the time line provided under Section 153 (3) strictly or as mandatory as compared to the time line provided under Section 153 (1) and Section 153 (2). Both Section 153 (1) and Section 153 (2) provide for the consequence that after the expiry of time line no assessment order shall be passed . However, Section 153 (3) does not provide for any such consequence. Accordingly, in the present case, the delay, if any, of just one day in uploading the assessment order or generating the DIN cannot make the assessment order unsustainable in law. Petitioner has also contended that the assessment order, dated 31.03.2022, was uploaded on the next day i.e. 01.04.2022 but the same was required in law to be uploaded on the same date and not later. However, the Petitioner has not shown any provision of law which provides that an assessment order has to be uploaded on the web portal on the same d ay when it is made and the assessment order will become invalid if the same is uploaded on the next day. In the absence of such legal provision, it cannot be held that the assessment order, dated 31.03.2022, which was uploaded on 01.04.2022, is invalid in law. Different expression used by the legislature at different places has certainly a different objective. Making of the order and communication of the order are two different things. Even the circular stipulates communication of the order and not making of the order as it says every communication relating to assessment, appeal, order etc. shall have a DIN on the body of the order . Petitioner has contended that impugned order is antedated. It is a purely factual issue also disputed by the revenue. As such, the petitioner has a statutory alternate remedy to challenge the assessment order before the Commissioner of Income Tax (Appeals) where he may raise such plea . The instant writ application is dismissed Petitioner has failed to satisfy any of grounds to invoke the writ jurisdiction of this Court by passing the statutory alternative remedy. 2023 (3) TMI 1053 Allowable business expenses - Expenses pertained to the period after setting up of business - Commissioner held that the assessee company had started deploying skillful personnel and after 07.07.2008 it was fully equipped to mount the operation of the business - HELD THAT:- CIT(A) while allowing claim of the assessee with certain directions, had relied on the decision of the Coordinate Bench in the case of Dhoomketu Builders Development Pvt. Ltd. [ 2011 (11) TMI 193 - ITAT DELHI] wherein it was held that where the assessee had deployed skillful personnel to carry on his business by providing technological and personnel support then that expenditures have to be allowed as business expenses. Appeal is dismissed being devoid of any merit. 2023 (3) TMI 1052 Reopening of assessment u/s 147 - period of limitation - factual error pointed out by the Revenue Audit Party - HELD THAT:- Mere change of opinion on the part of the assessing officer is not a sufficient ground to re-open the assessment. We are in complete agreement with such a conclusion arrived at by the Tribunal. There is no justifiable reason assigned by the AO for not initiating action to re-open the assessment before the period prescribed under the Act. While so, we find no error in the decision of the Tribunal. The audit party noticed that the certificate of recognition granted to the assessee expired on 22.09.1972 itself and therefore, the assessee trust cannot be recognised as a charitable trust during the assessment year in question and consequently the donation made to the trust will not qualify for deduction u/s 80G of the Act. It is in those circumstances, the assessing officer re-opened the assessment. The audit party is entitled to point out a factual error or omission in the assessment. reopening of the assessment in the light of factual errors pointed out by the audit party is permissible under law. In the present case, even though the assessment was reopened on the basis of the error pointed out by the revenue audit, the same was done after the period prescribed u/s 147. Tribunal is right in allowing the appeal filed by the assessee. Accordingly, the questions of law raised in this appeal are answered against the revenue. 2023 (3) TMI 1051 E-filling of appeal - Maintainability of appeal on failure to comply with the mandate/requirements under Rule 45 of the Income Tax Rules - writ petitioner has filed an appeal manually, despite the fact that Rule 45 of the Income Tax Rules mandates/specifically provides for electronic filing of appeal before the Commissioner of Income Tax - HELD THAT:- Single Judge proceeded to hold that, inasmuch as the appeal is admittedly manually filed in the present case and that the Commissioner of Income Tax has also heard the matter on more than one occasion, was of the view that appeal being a statutory and substantive right, ought not to be denied, in view of procedural lapses in filing of appeal manually, instead of electronically as provided under Rule 45 of the Income Tax Rules. A reading of the order of the learned Single Judge would show that the learned Single Judge while granting leave to the petitioner/respondent herein to comply with Rule 45 within period of three weeks, made it clear that this case shall not be treated as a precedent with regard to the mode of filing an appeal. No reason to interfere with the impugned order passed by the learned Single Judge - this case shall not be treated as a precedent and the question as to whether Rule 45 of the Income Tax Rules must be treated as mandatory or directory, is left open. 2023 (3) TMI 1050 Income from house property - interest expenses claimed by the assessee u/s 24(b) against income earned from renting out its property shown under the head income from house property - CIT(A) allowed the same noting that the borrowing had been utilized for repaying liability pertaining to construction of Mall and not for repaying loan taken for construction - Whether loan could be said to be utilized for constructing house property? - HELD THAT:- Considering the fact that even the AO noted the OCD being utilized for payment of outstanding liability of JPIPL which the assessee demonstrated as pertained to construction expenses, we find no infirmity in the findings of the CIT(A) that the loan was utilised not for repayment of an earlier loan but for a liability for construction of property. DR has been unable to controvert this fact before us. We therefore agree with the CIT(A) that the loan can be said to be utilized for construction of property and interest thereon accordingly is allowable u/s 24(b) of the Act. Basis for disallowing interest expenses by the AO does not survive. Therefore, for this reason alone, the allowance of claim of deduction under section 24(b) of the Act of the interest paid by the assessee is held to be sustainable in law. No reason to deal with the arguments of the DR which are in the context of different set of facts which are not present in the case before us. The entire arguments of the ld.DR are raised on the fact that the interest has been paid by the assessee on a fresh loan taken to repay the original loan. Since the facts in the present case are not so, dealing with the same is only an academic exercise, and we see no reasons therefore to deal with the same. Decided against revenue. 2023 (3) TMI 1049 Provisional approval of registration u/s 10(23C) - Whether PCIT/CIT has erred in passing provisional order under (iv) of 1st proviso to clause (23C) of section 10 with effect from Ay 2021-22 instead of AY 2020-21? - HELD THAT:- We direct the authorities below to grant approval w.e.f. AY 2020-21 instead of 2021-22. Thus, grounds raised by the assessee are allowed. 2023 (3) TMI 1048 Unexplained investment made in immovable property - Addition u/s 69 - addition on the basis of acquisition of the property - case was selected for limited scrutiny for the reason large cash deposits in saving bank accounts and the assessee had also transferred one or more properties during the year - Whether transfer of property would include the purchase of property as well? - HELD THAT:- Acquisition of capital assets would not fall under this definition as it is the case of acquisition of capital asset but not of a sale of capital asset. The assessee should have pre-existing rights into the capital asset which he intends to transfer in favour of a third party. Hence, the pre-existing rights, interests and the title is sine qua non for transferring. In this case, vendor of capital asset is a third party and the assessee is a vendee. In our considered view, there were two options available with the AO; either he could have rectified the mistake so occurred u/s 154 of the Act or replacing the word acquire in place of transfer , in the reasons for limited scrutiny, if it was a typographical error and if it was not so, then he would have sought the approval from the Competent Authority for examining this aspect. The AO failed to do so. Now, at this stage when the facts are undisputed that the case was taken up for limited scrutiny for the reasons stated to be cash deposits in the bank account and transfer of immovable property. We find merit in the contention of assessee that the Assessing Authority exceeded its jurisdiction for making assessment in respect of acquisition of the property by the assessee during the year. Thus, the AO is directed to delete the impugned addition.Appeal filed by the assessee is allowed. 2023 (3) TMI 1047 Unexplained income u/s. 68 - unsecured loan in the name of M/s VRS infrastructure by the assessee and the co-owner is the unexplained income in the hands of assessee and made addition being 50% of the aforesaid amount (since the assessee was 50% as co-owner of the aforesaid land) - assessee submitted that all the payments were made through banking channels and the entire flow of transactions was explained in detail to the AO and Ld. CIT(Appeals) and without pointing out any specific defect in the said flow of transactions, the Department has added the amount in the hands of the assessee without any cogent reasons - HELD THAT:- The assessee produced before us copy of conversion premium pay order issued by the City Mamlatdar - assessee also produced before us approval letter by Government Authority for conversion of agricultural land to non-agricultural land at page 9 of the paper book. The assessee also produced before us details of payment of conversion premium along with copies of cheques issued by Shri Shanti Lal Patel and Shri SM Bharwad to the concerned Government Authority. On going through the relevant documents placed before us and the flow of transactions which has been elaborated before us, CIT(Appeals) erred in facts and in law in confirming the addition in the hands of the assessee as unexplained income under section 68 of the Act. From the facts, it is evident that the said amount was taken as unsecured loan from VRS Infrastructure and which was paid directly to Shri Shanti Lal Patel and Shri SM Bharwad towards conversion charges of agricultural land to non-agricultural land. Accordingly, we are allowing the appeal of the assessee and the addition made under section 68 in the hands of the assessee is directed to be deleted.Appeal of the assessee is allowed. 2023 (3) TMI 1046 Deduction u/s 80P - interest earned on deposits and saving bank accounts with Nationalized Banks Cooperative banks - HELD THAT:- AO in Assessment Order has not pointed out as to why the disallowance u/s 80P was made in assessee s case. CIT-A s order is also reproduced the submissions as well as the decisions relied upon by the assessee. It is pertinent to note that in the present assessee s case it is a Cooperative Society deriving interest from the member cooperative society and therefore, coming under the purview of Section 80P (2)(d) - assessee is entitled for deduction under Section 80P, the CIT(A) as well as the Assessing Officer has ignored this fact. Appeal of the assessee is allowed. 2023 (3) TMI 1045 Deduction u/s 54B - investment made prior to the date of sale - claim denied as new agricultural land was purchased by the assessee prior to the date of sale of agricultural land - HELD THAT:- We observe that the new property was primarily purchased out of advances received from sale of two agricultural properties. Evidently, the advances so received by the assessee were invested in the new agricultural property after the same were received and within a period of 2 years from the date of receipt of advance. In the case of Ramesh Narhari Jakhadi [ 1992 (2) TMI 178 - ITAT PUNE] ITAT held that investment made prior to date of transfer out of earnest money or advanced would also be eligible and should be considered as investment made out of sale proceeds for purposes of section 54B. Thus we are of the considered view that the assessee should be allowed the benefit of deduction under section 54B of the Act since the purchase in the new property has been made out of advances received towards sale of agricultural properties held by the assessee. Decided in favour of assessee. 2023 (3) TMI 1044 Addition u/s 68 - unsecured loan - addition made towards the said loan treating the same as unexplained was not warranted, hence deleted the addition - HELD THAT:- We note that loan and advance is getting reflected in the Individual Balance Sheet as well as in the balance sheet of M/s Shri Kuberji Developers therefore, it is not a case that assessee has concealed the details of such loan. Based on this factual position, we do not find any infirmity in the order of ld CIT(A). That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid addition. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. 2023 (3) TMI 1043 Computing capital gains on sale of debentures.- assessee took the dividend receivable from NTPC originally which was converted into debentures as cost of acquisition of debentures while computing capital gains on sale of debentures - amount of dividend which was subjected to Dividend Distribution Tax (DDT) was re-invested towards cost of debentures and hence, the same represent the cost of acquisition of debentures for the assessee - treatment of claiming deduction for cost was denied by the ld. AO on the ground that assessee was issued only bonus debentures by NTPC for which there is no cost attributed and hence in terms of Section 55(2)(aa)(iiia) of the Act, the cost has to be taken as Nil - HELD THAT:- We find that the same issue was subject matter of adjudication by this Tribunal in the case of J.P. Morgan Funds [ 2022 (7) TMI 1289 - ITAT MUMBAI] as held act of, and bonafides of, the transaction cannot thus be disputed. The amount so reinvested, out of dividend, was the consideration paid for debentures. We uphold the plea of the assessee that the AO erred in declines the claim of the assessee with respect to cost of acquisition in respect of these debentures.Accordingly, the ground Nos. 1 2 raised by the Revenue are dismissed. Set-off of short-term capital loss carried out against income/gain - We find that assessee in the instant case has duly complied with the provisions of Section 70(2) of the Act in as much as the computation of short term capital gain is similar and only the rate of tax is different. Infact the provisions of Section 70(2) of the Act uses the expression similar computation . This goes directly in favour of the assessee. Hence, the decision of the special Bench of this Tribunal reported MONTGOMERY EMERGING MARKETS FUND. [ 2006 (3) TMI 202 - ITAT BOMBAY-H] is squarely applicable to the case. Though this Special Bench judgment referred to supra has been rendered in the context of pre-Securities Transaction Tax (STT) era, still the analogy drawn thereon would be applicable to the facts of the instant case. In fact post STT regime, we find that this Tribunal in the case of ADIT(International Taxation)-4(1) vs. Legg Mason Asia (Ex Japan) Analyst Fund [ 2013 (11) TMI 361 - ITAT MUMBAI] had addressed the very same issue wherein the arguments advanced by the ld. DR before us is also addressed. No infirmity in the order of the ld. CIT(A) granting relief to the assessee in this regard. Accordingly, the ground No.3 raised by the Revenue is dismissed. 2023 (3) TMI 1042 Due date for filing of Income Tax Returns - Assessee is non-resident - RBI permission letter mandating the assessee to get his accounts audited - Extension of due date of cases where accounts are required to be audited under the provisions of Income Tax Act while filing the income tax returns - loss claimed by the assessee disallowed to be carried forward to subsequent years as return was not filed within the due date prescribed u/s.139(1) - According to the ld. DR, only those cases where accounts of tax payers are required to be audited under the Income Tax Act alone would get extended time limit up to 17/10/2016 for filing the returns - AR stated that assessee is liable to get the accounts audited only as per RBI permission letter HELD THAT:- We find that assessee s case herein falls under the ambit of Explanation 2(a)(ii) to Section 139(1) of the Act, as the assessee is liable for audit under any other law for the time being in force. We are of the considered view that due date of filing of income tax return is extended from 30/09/2016 to 17/10/2016 only in respect of assessees whose accounts are required to be audited under the Income tax Act. As in the second para of the press release dated 09/09/2016, the CBDT in categorical terms states that it has decided to extend the last date for such returns which was due on 30/09/2016 to 17/10/2016. The said extended due date benefit cannot be extended to those assessee s who were liable to get their accounts audited under any other law for the time being in force which is the case as that of the assessee before us. Hence, we hold that due date of filing of income tax return for the assessee for A.Yrs. 2016-17 is 30/09/2016 and not 17/10/2016 as contended by the ld. AR. From the perusal of the RBI permission letter dated 05/08/1985 mandating the assessee to get his accounts audited, we are of the considered opinion that what RBI mandate was only for the competence of the Chartered Accountant i.e. to say that a Chartered Accountant who is capable of auditing the corporate assessees should conduct the audit of the assessee herein. This was the sole mandate of RBI permission letter dated 05/08/1985. Due date for the assessee herein is only 30/09/2016 and not 17/10/2016. Hence, we hold that assessee is not entitled to carry forward business loss incurred during the year to subsequent years. Accordingly, the grounds raised by the assessee are dismissed. 2023 (3) TMI 1041 Validity of assumption of jurisdictional u/s 147 - reasons to believe - reassessment made on the basis of information received that property was sold by the assessee, though the amount of sale consideration and the capital gains may be different - HELD THAT:- No merit in submission of the DR, of the reasons for reopening the assessment we find that the AO has taken due note of the capital gains offered by the assessee from sale of property with sale consideration - AO sought to tax the capital gains on the transaction of sale of property with sale consideration which as per the AO was not offered to tax by the assessee. Therefore, the income which was initially alleged to have escaped assessment was not ultimately added by the AO while passing the assessment order and rather the transaction already disclosed by the assessee was re-examined and the capital gains computed by the assessee was recalculated in the assessment order without issuing a fresh notice under section 148 of the Act. It is trite law that the reasons, as recorded for reopening the reassessment, are to be examined on a standalone basis to determine the validity of proceedings u/s 147 of the Act. Thus reopening of assessment in the present case is unsustainable in law. The impugned reassessment proceedings are set aside for this short reason alone - Decided in favour of assessee. 2023 (3) TMI 1040 Delayed payment of employee s contribution to provident fund u/s 36(1)(va) - order passed under section 154 - HELD THAT:- We find that the Hon ble Supreme Court in Checkmate Services (P.) Ltd. [ 2022 (10) TMI 617 - SUPREME COURT ] held that payment towards employee s contribution to provident fund after the due date prescribed under the relevant statute is not allowable as deduction u/s 36(1)(va). In the present case, the assessee deposited employees contribution to provident fund after the due date for payment as provided under the relevant statute, and accordingly the same was disallowed under section 36(1)(va) of the Act vide intimation issued under section 143(1) Issue arose from the order passed u/s 154 and not from the intimation issued under section 143(1) of the Act. The view taken by the ADIT, CPC under section 154 is in consonance with the law laid down by the Hon ble Supreme Court in Checkmate Services (P.) Ltd. (supra), and therefore the claim of deduction towards employee s contribution to PF ESI made by the assessee becomes an incorrect claim under section 143(1) -Appeal by the assessee is dismissed. 2023 (3) TMI 1039 Bogus LTCG - Addition u/s 68 - disallowance of exemption of long-term capital gains claimed u/s 10(38) - treating the share transaction as non-genuine - HELD THAT:- As not only Sunrise Asian Ltd but the exit providers were also found to be involved in manipulative trade practices by the SEBI. Further, Mr. Vipul Bhat in his statement had admitted and confirmed that all the entities controlled and managed by him are mere bogus paper companies and he is involved in providing accommodation entry on a commission basis. Thus, not only Sunrise Asian Ltd but Conart Traders Ltd and Santoshima Tradelinks also, whose shares were initially purchased by the assessee in physical form, were found to be belonging to Mr. Vipul Bhat in the present case. Accordingly, we find no infirmity in the findings of the AO, which were confirmed by CIT(A) - Decided against assessee. Disallowance of set off of carry forward business losses u/s 72 - HELD THAT:- Though the issue of non-quantification of business loss declared by the assessee in his return of income was raised before the learned CIT(A), however, in absence of any evidence to support the contention during the appellate proceedings, CIT(A) dismissed the ground filed by the assessee. AO has also not quantified the loss claimed by the assessee. Accordingly, we deem it appropriate to remand this issue to the file of AO for quantification of loss and set off of same, if any, as per law. As a result, ground No. 3 raised in assessee's appeal is allowed for statistical purposes. 2023 (3) TMI 1038 Defaults in deposit of employee s contribution fund - delayed employee s PF contribution payment - Entitlement for the grace period - HELD THAT:- Hon ble Supreme Court in the case of Checkmate [ 2022 (10) TMI 617 - SUPREME COURT] held that employers have to deposit employee s contribution covers ESI and PF on or before due date to avail deduction u/s 36(1)(va) and 43B of the Act. Payment for due date of deposit of provident fund i.e. 15.08.2016 which was paid on the very next day i.e. 16.08.2016, considering the fact that August 15th being Independence Day and the general holiday, the payment made on the next day deserves to be treated as the payment has been done on time. Accordingly, the addition is hereby deleted. Remaining addition we deem it fit to remand the matter to the file of Assessing Officer to examine as to whether assessee is entitled for the grace period as claimed by the Assessee or not and consider the issue denovo after providing opportunity of being heard to the assessee - Appeal filed by the assessee is partly allowed for statistical purpose. 2023 (3) TMI 1037 Revision u/s 263 by CIT - Employee Stock Option (ESOP) Scheme expenses Allowability - HELD THAT:- As brought to our notice that the order relied by the in the case of Ranbaxy Laboratory Ltd. [ 2009 (6) TMI 126 - ITAT DELHI-I] wherein examined in the case of Biocon Limited ( 2013 (8) TMI 629 - ITAT BANGALORE] as confirmed by hc [ 2020 (11) TMI 779 - KARNATAKA HIGH COURT] hence the order relied upon by the ld. PCIT is no more good law. Hence, we hold that the directions given in the order u/s. 263 are not valid. Prior Period expenses - Hon'ble Delhi High Court in the case of CIT vs Anil Kumar Sharma [ 2010 (2) TMI 75 - DELHI HIGH COURT] also held that where there was no lack of enquiry by AO even if it could be said to be inadequate, proceedings under section 263 of the Act was not valid since the AO had applied his mind to complete details filed by the assessee. In light of the facts submitted in the original assessment, the above expenses are crystallized during the year and no deduction of the same is claimed in the earlier year. Hence, the aforesaid expenses are an allowable deduction under the Act while computing the profit and gains of business and profession that the AO has correctly appreciated the said position while passing the assessment order. Hence, we hold that the directions given in the order u/s. 263 are not valid. Interest on Late Payment of TDS - as argued that the definition of tax under the Act read with provisions of section 40(a)(ii) of the Act, the interest paid under section 201(1A)/206C(7) on late payment of TDS does not fall within the meaning of 'tax' and hence no adjustment is warranted in the returned income - We find that the AO has failed to disallow above mentioned interest expenditure while passing the order u/s. 143(3) and hence rendering the assessment erroneous and prejudicial to the interest of revenue. The order of the ld. PCIT u/s. 263 is upheld on this issue. 2023 (3) TMI 1036 Penalty imposed u/s 271A - assessee has not maintained books of account as mandated u/s 44AA - HELD THAT:- In the instant case there is no income from business or profession received by the assessee which exceeds Rs.1,20,000/-. Therefore, maintenance of books of account u/s 44AA of the Act is not mandated for the assessee. Hence, the imposition of penalty u/s 271A of the Act for non-maintenance of books of account is not warranted and we delete the same - Appeal filed by the assessee is allowed. 2023 (3) TMI 1035 Addition on account of valuation of marketing intangibles of assessee - CIT(A) deleted the addition by relying on assessee s own case for AY 2015-16 [ 2018 (5) TMI 337 - ITAT BANGALORE ] where the Tribunal has held that the profit margin forgone by the assessee cannot be held to be expenditure in creating intangible or goodwill - HELD THAT:- As decided in assessee own case [supra] action of the AO in disregarding the books results cannot be sustained and the further conclusion that the action of the AO in presuming that the Assessee had incurred expenditure for creating intangible assets/brand or goodwill is without any basis, we do not think it necessary to deal with the arguments that even assuming that expenditure was incurred by the Assessee the expenditure for building brand or creating intangible or goodwill is revenue expenditure and allowable as deduction. It is also not necessary for us to go into the question of estimation of quantum of expenditure on creating intangibles, in view of the above conclusions. We hold that the loss as declared by the Assessee in the return of income should be accepted by the AO and his action in disallowing expenses and arriving at a positive total income by assuming that there was an expenditure of a capital nature incurred by the Assessee in arriving at a loss as declared in the return of income and further disallowing such expenditure and consequently arriving at a positive total income chargeable to tax is without any basis and not in accordance with law. Disallowance u/s. 37 towards ESOP expenses - HELD THAT:- We notice that the issue of whether ESOP cross charge expenses are allowable u/s. 37 of the Act has already been decided by this Tribunal in favour of the assessee in the case of Biocon Ltd [ 2013 (8) TMI 629 - ITAT BANGALORE ] which has also been affirmed by the Hon ble Karnataka High Court [ 2020 (11) TMI 779 - KARNATAKA HIGH COURT ] by categorically holding that the expression expenditure will also include a loss and therefore, issuance of shares at a discount where the assessee absorbs the difference between the price at which it is issued and the market value of the shares would also be expenditure incurred for the purposes of Section 37(1) of the Act. Thus we hold that the expenditure towards ESOP is eligible for deduction u/s 37. Assessee appeal allowed. 2023 (3) TMI 1034 Assessment u/s 153A - existence of incriminating material / evidence found from the possession of appellant - time period for summary assessment under section 143(1) and for notice under section 143(2) - HELD THAT:- CIT(A) makes correct observation that the limitation to issue notice u/s 143(2) of Act was available and before that the search was conducted, so the assessment cannot be considered to be completed assessment. Ld. CIT(A) is right in aforesaid conclusions, as the time period for summary assessment under section 143(1) and for notice under section 143(2) of Act had not lapsed, so it is a case of pending assessment, which gets merged with assessment u/s 153A. Hence the principles laid down in Kabul Chawla case [ 2015 (9) TMI 80 - DELHI HIGH COURT] with regard assessment u/s 153A of Act have to be on basis of incriminating material found during search in case of completed assessment, do not benefit assessee. Therefore, this ground is decided against the assessee. Addition u/s 69A - Cash gifts receipts unexplained - HELD THAT:- Bench is of considered opinion that the cash/monetary gifts on the occasion referred by the assessee are either customary or out of token of love and affection and intended to be in lieu of material gifts reasonably given on the occasion or as good omen (shagun). These cash gifts, unlike Pin Money are a little something or spending money to be spent on trivial needs or to create a memory of the event and cash gift itself. When an assessee deposits these collected amounts of cash gifts in bank, and thus creates a capital or investment out of these cash gifts, the assessee is expected under law to offer a reasonable explanation of the sources and justification of the occasions and the relationships, to have received heavy denomination cash gifts or beyond threshold limits. Further that under what circumstances these cash gift amount got accumulated over the period, so as to be deposited a lump sum, in particular FY. In the case in hand there is nothing factual or substantial to disagree with the reasons of CIT(A). The burden was on assessee to give satisfactory explanation for the purpose of Section 69A - Assessee certainly failed to bring forth evidence sufficient discharge that burden. So the Ld. CIT(A) was justified to sustain the addition - Decided against assessee. 2023 (3) TMI 1033 Validity of assessment - non-service of notice u/s 143(2) - scope of curable defect u/s 292BB - CIT(A) dismissed the appeal by observing that the case of the assessee is squarely covered by section 292BB - HELD THAT:- As decided in case of Silver Line [ 2015 (11) TMI 809 - DELHI HIGH COURT] with the legal position being abundantly clear that a reassessment order cannot be passed without compliance with the mandatory requirement of notice being issued by the AO to the assessee u/s 143(2) ITAT was in the present case right in concluding that the reassessment orders in question were legally unsustainable. Hon ble Supreme Court in the case of ACIT vs Hotel Blue Moon [ 2010 (2) TMI 1 - SUPREME COURT] held that Omission on the part of the assessing authority to issue notice u/s 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with. Thus assessment framed by the AO is held to be bad in law, the same is hereby quashed - Decided in favour of assessee. 2023 (3) TMI 1032 Validity of assessment u/s 144C - Mandation to pas draft of the proposed order of assessment to the eligible assessee - HELD THAT:- The assessee would come to know of any variation which is prejudicial to its interest only by way of forwarding of a draft of the proposed order of assessment by the AO. Without forwarding a draft of the proposed order of assessment by the AO, assessee has given its waiver that it did not intend to file objection which does not meet mandatory compliance requirement of the provisions of section 144C of the Act. In the present set of facts, we note that principles of estoppels will not operate against the Act. It is obligatory on the part of the ld. AO to comply with the mandatory procedural requirements of completing the assessment. AO straightaway passed the assessment order, without passing any draft of the proposed order of assessment for which he noted, In view of above, final order is being passed without making any draft assessment order . As held in various decision of the Tribunal, a final assessment order without passing of the draft of the proposed order of assessment, being not in accordance with the provisions contained in section 144C of the Act, is liable to be quashed. Decided in favour of assessee. 2023 (3) TMI 1031 Capital gain computation - Difference in sale consideration and guidance - adopting the fair market value u/s 50C - HELD THAT:- Tribunal in the coowner s case Amarnath Sarla [ 2022 (6) TMI 1372 - ITAT BANGALORE] an appropriate opportunity ought to have been given to the assessee to reconcile the value mentioned by DVO and registered valuer and also with regard to the method of valuation followed by the different valuers. It is also submitted by Ld. A.R. that DVO has considered the value of certain property, which was not in the impugned sale deed which has to be excluded while determining the FMV of the impugned property. We also direct the authorities to bring more comparable cases for deciding the issue. With this observation, we remit the entire issue to the file of AO for reconsideration - Thus we remit this issue also to the file of AO for similar directions. These grounds of assessee s appeal are partly allowed for statistical purposes. Deduction u/s 54F - whether the assessee herein has actually constructed any residential house within the meaning, object and time laid down u/s. 54F of the Act, the material on record does not suggest any construction of the house in terms of section 54F ? - HELD THAT:- Assessee could not furnish the requisite evidence to prove the fact that there was any actual construction within the time stipulated in section 54F of the Act. The assessee has not placed any cogent evidence, so that it can be inferred that actually there was construction of residential building out of the sale proceeds of the sale of land and also not placed evidence for the purchase of any materials relating to construction of residential building. Merely producing a copy of permission from Gram Panchayat with regard to construction permission that itself cannot discharge the assessee from proving actual construction. In our opinion, this is made believe story before us and without producing requisite evidence to suggest that the assessee has completed the construction within the period of 3 years after the date of transfer. It has also been noted that assessee has not produced any license/permission for construction of building in the scheduled property from any authorities said to be constructed and there was no evidence in support of the fact that there was actually any construction within the stipulated time as per section 54F of the Act. Accordingly, we do not find any merit in the arguments of the ld. A.R. which is only artificial and superficial and deduction u/s 54F of the Act cannot be granted. This ground of appeal of the assessee is rejected. 2023 (3) TMI 1030 Representative assessee u/s 163 - agent of foreign company / Head Office - Income deemed to accrue or arise in India - AO treated the interest income received by the Head office from the branch office in India as income taxable in India and taxed the interest income @ 10% of the gross amount under Article 11(2)(a) of the India, Japan DTAA - HELD THAT:- it is also clear from the findings of the ld. CIT(A) wherein held that it is not necessary to invoke provision of section 163 and give notice u/s 163 because the branch and the head office were the same entity and inadvertently at the concluding part he stated it was necessary to issue notice under section 163 of the Act. - decided against the revenue. Chargeability of income and withholding tax - We have perused the decision of the ITAT as referred supra for A.Y. 2010-11 [ 2022 (8) TMI 1130 - ITAT MUMBAI] wherein identical issue on similar facts held that interest paid by the Indian Branch of the assessee bank to its overseas head office is not chargeable to tax in India - provisions of sec.195 consequently would not be attracted in case of such payment of interest by the Indian Branch to overseas Head office and the question of disallowance of the said interest by invoking the provisions of sec.40(a)(i) does not arise - Decided in favour of assessee. Adjustment u/s 92CA(3) - compensation received sought by the assessee in the international transaction relevant to issuing of bank guarantee on the strength of back to back guarantee by the AEs - HELD THAT:- As decided in assessee own case [ 2022 (8) TMI 1130 - ITAT MUMBAI] we deem it appropriate to remand this issue to the file of TPO for de novo benchmarking of impugned international transaction of issuing bank guarantee against counter guarantee issued by the associated enterprise. Assessee is directed to produce all the documents before the TPO in support of its claim. TPO shall be at liberty to call for any details or documents for proper benchmarking of the impugned international transaction. Thus following the decision of ITAT we restore this issue to the file of TPO for adjudicating de novo as directed by the ITAT in the decision as referred supra, therefore, the appeal of the revenue is allowed for statistical purposes. 2023 (3) TMI 1024 TDS u/s 195 - Disallowance u/s. 40(a)(ib) - payment made to parent company as fees for technical services - report from chartered accountant to be furnished u/s. 92E relating to international transactions wherein it has been confirmed that payment under consideration is reimbursement of actual expenses and allocated expenses to parent company - HELD THAT:- As the assessee rendered International services outside India which required the payment in question. If this is the position, which has not even been disputed by the revenue, then there can be no question of roping such income within the ken of section 9(1)(i). It is, therefore, patent that the payment remitted by the assessee neither falls under section 9(1)(i) nor under section 9(1)(vii). Since the income cannot be described as deemed to accrue or arise in India and there is no doubt about such income having not been received or deemed to be received or accruing or arising in India, the taxability of such income fails. Therefore, the impugned order has to be set aside and it has to be held that the amount in question cannot be charged to tax. As reasonably concluded that payments remitted by the assessee to its parent company do not attract the provisions of sec 5 and sec 9. Even if it is assumed for the time being that assessee s remittances falls in sec. 9 still revenue is not able to establish the basic condition of sec 195 i.e. income element. In view of this payments made by assessee without TDS will not attract disallowance u/s. 40(a) (ib) r.w.s.195 and 9. Appeal filed by the assessee is allowed. 2023 (3) TMI 1023 TP Adjustment - adjustment made to the international transaction of royalty paid by the assessee to the associate enterprise - benchmarking done by the assessee by adopting internal CUP - second round of litigation before the ITAT - assessee had paid royalty at the rate of 5% - HELD THAT:- It is a fact on record and has not been denied by the Revenue, that the assessee s agreement for payment of royalty was for transfer of technology for assembling of entire vehicle and similarly also in the case of comparable selected by the assessee royalty was paid for transfer of technology for assembling of entire vehicles. The comparable selected by the Revenue on the other hand, are for transfer of technology for manufacturing of particular part of the vehicles. Surely technology for assembling vehicles and that for manufacturing a particular part cannot be the same. Merely because the technology for assembling cars and manufacture of parts relate to the same project does not mean that the technology transferred is the same. Apparently technology for assembling cars and that for manufacturing parts of car are different. At least this is what any layman would understand. Revenue has given no technical input as to how the two technologies are the same in the circumstance that they relate to the same project of vehicle manufactured/assembled. It is abundantly clear therefore that the comparable selected by the assessee is the correct comparable being payment of royalty for technology acquired for identical activity as availed by the assessee, while that of the TPO are for totally different activity We uphold the benchmarking done by the assessee by adopting internal CUP and delete the adjustment made to the ALP of royalty transaction - Ground raised by the assessee is allowed. 2023 (3) TMI 1022 TP Adjustment - adjustment on account of Advertisement, Marketing and Promotion expenses (AMP expenses) - HELD THAT:- The Co-ordinate Bench of the Tribunal [ 2018 (12) TMI 111 - ITAT DELHI] held that the there does not exist any international transaction between the assessee and the AE with regard to incurring of AMP expenses. Thus by following the principle of consistency we are of the considered opinion that the adjustment made by the TPO/DRP/A.O by applying BLT on account of AMP expenses in the absence of international transactions between the tax payer and the A.E is not sustainable in the eyes of law. Hence, the same is order to be deleted. Decided in favour of assessee. 2023 (3) TMI 1021 TP Adjustment - determination of profit level indicator computation - HELD THAT:- For the purpose of profit level indicator, the margin of the assessee should be computed only on international transactions. It was also found that the CIT- A has not given any finding on this aspect despite making a written submission before him. The order of the lower authorities is not sustainable on this count. Accordingly, TPO/AO is directed to compute the profit level indicator of the assessee at 11.35%. Comparable selection - Aurum software systems Ltd - No justification in the order of the learned CIT A4 exclusion of above comparable. Naturally, the learned transfer pricing officer did not apply the accept reject metrics filter which the learned CIT - A applied. The logic given by the learned CIT A is devoid of any merit. Accordingly, as the comparable is functionally comparable, same deserves to be included in comparable analysis. Accordingly, we direct the learned transfer pricing officer/assessing officer to include the above company. Cybermate Infotech Ltd (-13.71%) and Info drive software Ltd (-17.52%) - Cybermate Infotech Ltd has revenue from operation according to schedule 18 and such is only ITeS segment. Further info drive software Ltd is also from ITeS segment. Accordingly, both are functionally comparable. DR could not show that these companies are not functionally comparable with the assessee. He also could not show anything to support the finding of the learned CIT A. Therefore, we do not have any other alternative but to direct the learned AO/TPO to include both these companies in the comparability analysis. The learned CIT A despite having the annual accounts before him did not comment that why he is upholding the action of the learned transfer pricing officer in excluding the above comparable. 2023 (3) TMI 1020 TP Adjustment - MAM selection - rate of gross margin on cost of sales made by the Appellant to Non-AEs in Europe as the basis for determining ALP of the sales made to AEs in USA by using cost plus method as the most appropriate method - HELD THAT:- For Assessment Year 2005-06, the TPO has adopted same approach as adopted in the AY 2004-05 with stands rejected by the above order of the Tribunal. The Tribunal had, for the immediately preceding Assessment Year 2004-05, accepted the contentions raised on behalf of the Appellant and remanded the issue back for fresh de-novo adjudication. Therefore, we find merit in the contentions of the Ld. Authorised Representative for the Appellant that for the Assessment Year 2005-06 the issue relating to transfer pricing adjustment can also be remanded back. Treatment of unsecured loans as unexplained cash credit in terms of Section 68 - HELD THAT:- Appellant had discharged the onus cast upon the Appellant in terms of Section 68 of the Act to prove genuineness of the aforesaid loan transactions and therefore, in absence of any material/information the CIT(A) was not justified in confirming the additions under Section 68 of the Act in respect of unsecured loan. Accordingly, we delete the addition. Assessee appeal is partly allowed. Customs 2023 (3) TMI 1029 Confiscation of imported goods - levy of redemption fine and penalty - import of 2249.867 M/T Palm Fatty Acid distillate in bulk and 1502.079 M/T Palm Acid Oil in bulk - restricted item or not - department took a stand that the two items imported are canalised items permissible for import by State Trading Corporation only - contravention of Clause 3(2) of Import (Control) Order, 1955 and with Section 3 of the Import and Export (Control) Act, 1947. HELD THAT:- Admittedly on the date when the orders were placed by the appellant for purchase of the products i.e. on 12th and 14th March, 1986 legal position was clearly in favour of the appellant. Added to that the clarifications issued by the Joint Chief Controller of Imports dated 17.03.1986, the minutes of the meeting of the Central Board of Excise and Customs and Principal Collector of Customs dated 03.04.1986, the circular issued by the Under Secretary to the Government of India to port authorities dated 23.04.1986 and the letter addressed by the Principal Collector of Customs to the Federation of Indian Export Organization dated 14th/15th May, 1986 all clarified position that the appellant would be entitled to import canalized items under the additional licenses which were issued to them. It cannot be disputed that the contract having been entered into and processed, it is virtually next to impossible to stop, the consignment mid sea which the Customs Department would be well aware and there are several procedures intervening such matters if at all it is feasible of being performed. Therefore, the Collector of Customs has faulted the appellant not performing of an act (stoppage of the shipment in the mid sea) which was next to impossible. In any event, the conduct of the appellant should be examined on the date when they placed the order i.e. on 12th and 14th March, 1986 and as stated earlier the law on the subject was clearly in favour of the appellant and the concerned department were also of the clear view that canalized items can be imported on additional license. Therefore, failure to examine bonafides of the appellant on the above facts has led to an erroneous approach by the department. In Hindustan Steel Limited Versus State of Orissa [ 1969 (8) TMI 31 - SUPREME COURT ], it was held that the discretion to impose penalty must be exercised judicially, penalty will ordinarily be imposed in cases where party acts deliberately in defiance of law or is guilty of contemptuous or dishonest conduct or acts in conscious disregard of its obligation but not in cases where there is a technical or venial breach of the provisions of the Act or where the breach flows from bonafide belief that the offender is not liable to act in the manner prescribed by the statute. Thus, bearing in mind the above legal principles and taking note of the facts which were set out above, the case on hand is a case where no penalty could have been imposed. Whether the imposition of redemption fine of Rs. 80,00,000/- was justified? - HELD THAT:- Admittedly on the date when the goods arrived in the Calcutta Port and when the appellant sought for clearance of the said goods the decision in UNION OF INDIA VERSUS GODREJ SOAPS PVT. LTD. AND ANOTHER [ 1986 (9) TMI 203 - SUPREME COURT] held the field and consequently import was unauthorized as the goods imported were canalized items and could not be imported under additional licenses. If that be the case, the appellant can have no other option except to accept the fact that the import is unauthorized, but however we have considered the conduct of the appellant and we were satisfied with the bona of the appellant. Nevertheless, on the date when the goods were sought to be cleared from the Kolkata Port there was a clear bar for importing such goods under the additional licenses and this being a bar created under the policy which binds the appellant as additional licenses were issued under the policy, the appellant cannot escape from the rigour of imposition of redemption of fine - In the case on hand the total quantity of both the products imported by the appellant more or less is 3700 metric tons and if the same yardstick as applied by the department in the case of Shashi Kant is applied to the case on hand the redemption fine could at best be imposed to the tune of around Rs. 50 to 53 lakhs and definitely not Rs. 80,00,000/-. Therefore, the redemption fine imposed on the appellant was excessive and disproportionate and inconsistent with the stand taken by the department in other contemporaries imports of same product in the same factual background. Therefore, we are inclined to interfere with the quantum of redemption fine which was imposed. The orders passed by the authority imposing a redemption fine of Rs. 80,00,000/- is set aside and the fine stands reduced to Rs. 50,00,000/- and the penalty imposed on the appellants is set aside in its entirety - Appeal allowed in part. 2023 (3) TMI 1019 Classification of imported goods - seamless tubes and pipes - to be classified from CTH 75051220 to CTH 72189910? - applicability for Sr. No. 384 of Notification No. 50/2017 dated 30.06.2017 - whether the requirement of sub heading 1 (b)(i), 1 (b) (ii) and 1 (b) (iii) have to be satisfied together or independently? HELD THAT:- Between sub heading note 1 (b) (i) and 1 (b) (ii) there is no mention of and or or . Between sub heading 1 (b) (ii) and 1 (b) (iii) there is specifically mention of word or . Interpreting the above text the revenue has come to the conclusion that to qualify as nickel alloy sub heading note 1 (b)(i) has to be mandatory satisfied along with the conditions specified in sub heading note of 1 (b) (ii) or condition specified in sub-heading note 1 (b)(iii) - it is apparent that whenever legislature intended that two conditions have to be simultaneously satisfied it has specifically mentioned word and between those condition and whenever any one of the two conditions or more conditions are to be satisfed, the legislature has specifically put the word or in between those conditions. It is also noticed that the sub-heading note 1 (b) (i) requires the content weight of cobalt to exceed 1.5%. The sub heading note 1 (b) (iii) requires the total content of nickel + cobalt to exceeds 1 %. If the subheading note 1 (b) (i) is held to be a necessary requirement then the sub heading note 1(b) (iii) becomes otiose in so far as if the alloy contains cobalt in excess of 1.5% then it will obviously satisfy the condition of Nickel + cobalt exceeding 1 % . In this background also it is seen that the sub heading note 1(b) (i), 1(b) (ii), 1(b) (iii) need not to be simultaneously satisfied for the purpose of classification of goods as nickel alloy. Nickel predominates in weight being 62.15 to 62.26 % in weight. It is seen that the iron content ranges from 4.56% to 4.59 %, therefore, sub heading note 1 (b) (ii) stands satisfied. Consequently, the goods qualify as nickel alloy in terms of Section note 5 of Section XV read with sub- heading note 1 (b)(ii) of chapter 75 - It is also not disputed by the Revenue that the said product is commercially also known as nickel alloy and not steel. This specific assertion has been made by appellant and the same has not been disputed by the Revenue. The goods qualify as nickel alloy under sub heading note 1 (b) (ii) - the impugned order classifying the goods as steel cannot be sustained and is therefore set aside - Appeal allowed. Corporate Laws 2023 (3) TMI 1018 Seeking restoration of the name of the company in the Registrar of Companies, Chhattisgarh - Section 252 of the Companies Act, 2013 - HELD THAT:- The NCLT has recorded that in this case, Registrar of Companies, Chhattisgarh also did not have objection for restoration of the Company s name in the Register. However, in view of the fact that the Audited Annual Accounts of the Company for the Financial Years 2012-2013, 2013-14, 2014-15, 2015-16, 2016-17 2017-18 and Income Tax Return of the Company for the Financial Years 2012-2013, 2013-14, 2014-15, 2015-16, 2016-17, 2017-18 2018-19 shows that the Appellant Company is having substantial movable as well as immovable assets. Therefore, it cannot be said that the Appellant Company is not carrying on any business or operations. Hence, the order passed by the National Company Law Tribunal (Cuttack Bench, Cuttack) as well as Registrar of Companies, Chhattisgarh, is not sustainable in law. The name of the Appellant Company be restored to the Register of Companies subject to the compliances imposed - application allowed. Insolvency & Bankruptcy 2023 (3) TMI 1017 Initiation of CIRP - Financial Creditors or not - unsecured loan - Financial Debt within the meaning of Section 5(8) of IBC or not - time value of money is an essential ingredient in classification of Financial Debt - HELD THAT:- The findings given by the Adjudicating Authority are agreed upon, that the Appellant has not produced any agreement between the Appellant and the Respondent that any interest would be payable by the Respondent/Corporate Debtor against the alleged loan. Further, the Adjudicating Authority rightly come to the conclusion that in order to qualify the debt to be a financial debt , it is necessary that the amount advanced to the Corporate Debtor is against the time value of money, which is totally absent in the present matter. Further, it was held that since the Appellant is not a financial creditor as the Appellant has not disbursed money against the consideration for the time value. Accordingly, the claim of the Appellant is not a financial debt within the meaning of Section 5(8) of the IBC. There are no merit in the Appeal to interfere with the order impugned passed by the Adjudicating Authority - appeal dismissed. PMLA 2023 (3) TMI 1016 Seeking for grant of bail - It is alleged that certain incriminating documents were found in respect of misuse of unaccounted and illegal cash money, which was generated by the main accused Suryakant Tiwari, being brought into the mainstream public money through the Applicant - further case is that Applicant was in connivance with the main accused Suryakant Tiwari in the layering of the proceeds of crime illegally collected by Suryakant Tiwari - HELD THAT:- As regards the incriminating materials that have been collected during the course of investigation, what prima facie reflects is the purchase of two Coal Washeries by the Applicant from the group of Companies owned by Suryakant Tiwari and his associates. What is also reflected from the materials available on record is the fact that the purchase made by Suryakant Tiwari of the two Coal Washeries at the first instance was for an amount of roughly Rs.90 Crores, of which cheque payments were made only for an amount of around Rs.34-35 Crores and the rest was cash dealing that was made. These two Coal Washeries, worth more than Rs.90 Crores, have subsequently been sold by the main accused Suryakant Tiwari to the Applicant for just around the same value of cheque transaction made by Suryakant Tiwari at the time of purchase of two Coal Washeries at the first instance. This by itself shows that the Applicant has got two Coal Washeries at a very cheap price. The manner of transaction made between the Applicant and the Firms belonging to Suryakant Tiwari, the timing of the transaction, the sale consideration made by the Applicant in the process of purchase of the Coal Washeries from the Firms belonging to Suryakant Tiwari, all establishes the nexus between the Applicant and Suryakant Tiwari and their involvement in the predicate offence. Further, going into the entire materials available in the case records, there seems to be a serious nature of racket involving huge generation of hard cash illegally being collected. Taking into consideration the fact that the offence is one under the Prevention of Money Laundering Act, in the opinion of this Court, it would not be justified at this juncture to grant bail to the Applicant - Bail application rejected. 2023 (3) TMI 1015 Seeking grant of bail - possession of disproportionate assets - proceeds of crime had been generated in the form of cash and assets / immovable and movable properties - requirements of Section 45 (1) of PMLA - HELD THAT:- The bail application of the applicant has to be decided keeping in view the provision contained in Section 45 (1) of the PMLA. From a narration, it transpires that the instant case has been lodged primarily with the allegation that the named co-accused Yadav Singh had committed corrupt practices while awarding certain engineering works and he has acquired disproportionate benami assets in the name of himself and his family members. The applicant happens to be the wife to Yadav Singh. The applicant is a woman and one of her kidneys has been removed and she is surviving with one kidney and she is suffering from anxiety, depression and panic attacks. The Proviso appended to Section 45 (1) of PMLA provides that a woman or a sick or infirm person may be released on bail. The principal co-accused Yadav Singh has already been granted bail. whereas the applicant alone is languishing in jail for an offence which carries the maximum punishment of imprisonment for a period of seven years, alongwith fine - the aforesaid facts are sufficient for making out a case for enlargement of the applicant on bail in the aforesaid case. This bail application stands allowed. Service Tax 2023 (3) TMI 1014 Time Limitation - Refund of entire amount of tax so deposited during investigation of the case - it is alleged that the petitioner had neither discharged the due service tax liability nor filed ST-E return for the period 01.04.2013 to 30.09.2013, which was required to be filed on or before 25.10.2013 - petitioner was issued shows cause notice on 17.08.2015 and thereafter, after a gap of 05 years, he was called for personal hearing. If notices could not be served upon the petitioner w.e.f 31.08.2017, then the proceedings of recovery can be kept pending or not. HELD THAT:- This aspect has been examined by various Courts and reference at this stage can be made to STATE OF PUNJAB VERSUS BHATINDA DISTRICT CO-OP. MILK P. UNION LTD. [ 2007 (10) TMI 300 - SUPREME COURT] wherein the question was what should be the reasonable period for reopening an order of assessment under the Punjab General Sales Tax Act . The appeal was dismissed and it was held that when no period of limitation is prescribed, statutory authority must exercise its jurisdiction within reasonable period. In the facts of the present case, even if details of Annexure R-1 is to be taken into account, it is not in dispute that the petitioner was not served after 31.08.2017. So the respondents were required to finalise the show cause notice within a period of one year as per clause (b) of sub Section 4-B of Section 73 of Act 1994. The writ petition is allowed and show cause notice dated 17.08.2015 is quashed on the ground of limitation. 2023 (3) TMI 1013 Refund claim - time limitation - whether the appellants refund filed after one year from the relevant date is hit by limitation in terms of Section 11B of Central Excise Act, 1944? HELD THAT:- From the proviso under Section 11B(1), the period of one year will not apply if the assessee paid duty under protest. In the present case also, it is not in dispute that service tax was paid under protest therefore, the limitation of one year is prima-facie not applicable. However, before the Adjudicating Authority the appellant have not produced the letter under protest dated 25.06.2007, the learned Commissioner (Appeals) also rejected the submissions of the appellant regarding this under process letter on the ground that it is an after-thought as the same was not produced before the original authority. This letter is of dated 25.06.2007 and it cannot be said that it is an after-thought. Learned Commissioner (Appeals) should have considered this letter and passed a reasoned order on this issue which he fails to do so. Since the letter was produced before the Adjudicating Authority, the matter should be remanded to the Adjudicating Authority to pass a fresh order after considering the under protest letter dated 25.06.2007. The appeals are allowed by way of remand to the Adjudicating Authority. 2023 (3) TMI 1012 Levy of Service Tax - renting of vacant land surrounded by boundary wall - tax paid on service of renting beyond one year from the relevant date is time barred under Section 11A or not - refund of service tax paid on vacant land is hit by mischief of unjust enrichment or not. Whether renting of vacant land is taxable under the category of Renting of Immovable Property Service? - HELD THAT:- From the definition of renting of immovable property, it can be seen that a vacant land has been excluded from the term Immovable Property . It clearly justifies that even though such vacant land having facilities merely incidental to the use of such vacant land also falls under the exclusion category. As per the facts of the present case, on the vacant land there is only boundary wall which can be categorized as a facility incidental to use of such vacant land therefore, even though the land is surrounded by boundary wall, it fall under the term Vacant land provided in the definition of immovable property therefore, as per the facts of the present case, the vacant land is not liable for service tax being excluded from definition of immovable property. Refund of service tax paid on such vacant land - limitation under Section 11B - unjust enrichment - HELD THAT:- As regard the time limit, the submission of the appellant is that the amount paid is not a service tax as there was no statutory levy on the vacant land therefore, the amount which was paid will not be governed for refund under Section 11B therefore, the limitation of one year provided under Section 11B shall also not apply mutatis mutandis - the appellant have admittedly paid the service tax under the head of service tax of renting of immovable property service and the same was declared in the ST-3 returns as payment of service tax. In this fact, since the amount was admittedly paid as service tax, the refund of service tax shall be governed by Section 11B. The appellant have considered the gross rent as cum tax amount and while paying service tax to arrive at the taxable value, the service tax was excluded which shows that the service tax which was paid by the appellant was included in the gross renting recovered by the appellant if this be so, it is clear evidence that the incidence of the service tax paid by the appellant has been passed on to the service recipient for the reason that the gross amount collected from the service recipient includes the service tax amount also - the appellant is not entitle for the refund. Appeal dismissed. 2023 (3) TMI 1011 Refund of service tax paid - Management or (Business) Consultant Service - refund sought on the ground that they had paid service tax through oversight because as per Service Tax Rules, tax should be collected and paid, whereas they paid the said service tax without collecting any tax amount from the customers (beneficiary farmers) - HELD THAT:- The appellants are a limited company created by a resolution passed by three State Government undertakings, which are its joint promoters and therefore are implementing as a nodal agency a Micro Irrigation Scheme of Government of Gujarat. It was held by Commissioner (Appeals) that On consideration, I am in agreement with the finding of the lower authority that the above services are in different areas which enable the farmers to efficiently manage their operations with regard to using the Micro Irrigation System (MIS) which are essential for their efficient working. The Appellant provide services to the individual farmers or group of farmers, as the case may be. Taking into the account the definition of Management Consultancy Service/ Management or Business Consultancy Service as mentioned in para 9 above, and the services provided by the Appellant as discussed in the forgoing paras, the Appellants services come within the scope of Management or Business Consultancy Service. Thus, the Appellant contention that their services are primarily administrative in and they do not come within the scope of Management or Business Consultancy Service is not acceptable. There are no reason to differ with the findings of the Commissioner (Appeals) - the case law quoted by the appellant in the case of ELECTRICAL INSPECTORATE, GOVT. OF KARNATAKA VERSUS C. ST [ 2007 (10) TMI 137 - CESTAT, BANGALORE] was properly considered and rejected by the Commissioner (Appeals). It is also found that the definition of Management Consultancy Service is comprehensive enough to cover any technical advice, assistance in relation to financial management which in this instance they were doing by identifying qualified farmers for disbursal of subsidy and were getting paid for these services to the State Government. That the amount for their services was being deducted and paid for eventually out of subsidy amount of farmers, as per the Government Scheme, is of no consequence and does not change the character of service or the service recipient. There are no merit in the appeal - appeal dismissed. Central Excise 2023 (3) TMI 1010 Valuation - related party transaction - price at which the appellant M/s Bilag Industries Ltd., Vapi (BIL) sold its products to the buyer, should be treated as a transaction with a related person under Section 4(4)(c) of the Central Excise Act, 1944, or not? HELD THAT:- The decision in COMMISSIONER OF CENTRAL EXCISE, AURANGABAD VERSUS M/S. GOODYEAR SOUTH ASIA TYRES P.L. OTHERS [ 2015 (8) TMI 61 - SUPREME COURT] is instructive. The assessee, a JV entity of Goodyear and CEAT (both of whom had equal share in it), had borrowed substantial sums of money from both Goodyear and CEAT. Later, CEAT transferred its entire shareholding to Goodyear. The revenue alleged that the assessee and Goodyear were related persons, which was negatived by this court holding that the order of the Member Judicial that only on the ground that the two companies had given a loan of Rs. 85.66 crores to the Assessee company, was treated as sufficient to establish the relationship between the Assessee and the buyers. That only shows one way traffic whereas requirement is that of two way traffic. The other Member, in our opinion, aptly held that this cannot be the factor which would show the mutuality of interest. In the present case, undoubtedly AgrEvo SA/ Aventis CropScience SA holds the entire shareholding in Aventis CropScience (India) Ltd. (the buyer). It also is a shareholder in BIL. All of the latter s products are sold to Aventis CropScience (India) Ltd. However, this does not show that BIL has any business interest or interest in the affairs of Aventis CropScience (India) Ltd., nor, conversely, that Aventis CropScience (India) Ltd has any such interest, direct or indirectly in BIL. The revenue s concern in examining whether the parties were related might be justified; however, it could not have concluded that such relationship, as is contemplated by Section 4(4)(c) could have been inferred, without applying the proper test. Additionally, the revenue had the materials before it, in the form of documents which indicated the mark up towards profit margin, and other objective evidence to compare, if indeed, the cost of the goods sold, were depressed, or were comparable to the market price of the same or similar goods. There is no finding that the price of the goods was lower than what was the price of those goods, in the market. Thus, it has to be concluded that the revenue s decision in rejecting the value at which the goods were sold, by treating the assessee as a related person, was erroneous - appeal allowed. 2023 (3) TMI 1009 Classification of imported goods - Cutter Suction Dredger along with other accessories and equipments including Pipes, Anchor Boats, Multicats, Dredging pumping units, Engines and other spares and accessories - to be classified under the Chapter Heading 8905 10 00 of the Customs Tariff Act, 1975 or not - Applicability for benefit of Nil rate of duty, in terms of Notification No. 21/2002- CUS dated 01.03.2002 - Assistant Commissioner was of the opinion that the multicats, M.S. pipes, imported dredging pumping units and other goods were classifiable under different tariff headings and were not entitled to exemption under the notification as DREDGERS . HELD THAT:- This Court after relying upon SARASWATI SUGAR MILLS VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-III [ 2011 (8) TMI 4 - SUPREME COURT ] and taking aid from the dictionaries held that the Guide Car could not be said to be a component of the Coke Oven Battery. It was submitted that by the same analogy, the pumping units, air compressors, pumps, pipes, wire mesh, steel angle plates and outward engine boat, all of which were granted the benefit of exemption notification, cannot be considered components . It was besides urged that the Appellate Commissioner had disregarded Note 2 to Section XVII of the Act which had clearly excluded the articles in question; they had to be classified separately under the relevant heads. The Appellate Commissioner considered the previous order in Boskalis Dredging India Pvt. Ltd. [ 1999 (2) TMI 700 - SC ORDER ] and dealt with each item separately. It was noticed that the dredger pumping units are essential for the cutter suction dredgers unlike in the case of hopper dredgers. Furthermore, the use of air compressors is also necessary to ensure a continuous supply of air to the booster pumps. The Appellate Commissioner took care to exclude some of the claims made by the appellant towards generators, consumables lathe etc. Likewise, the Appellate Commissioner allowed the claim for exemption in respect of steel angle plates, pipes, and wire mesh which was held to be useful for the erection of booster pump stations. A plain reading of the Note 2 of the Section XVII shows that parts and parts of accessories cannot apply to specified articles, including items classifiable under 8401-79, 8481-82, and to some extent, 8483. In the present case, in this Court s view, the error committed by the CESTAT is that each of the excluded items has been treated as a separate part and not integral to the functioning of a Cutter Dredger. Without the compressors and the pipes necessary to pump the dredged material, the cutter dredger would cease to function as such. The other items, likewise, are integral parts of the Cutter Dredger, even though they might independently be utilized, for other purposes. The test is not whether multiple uses are possible but whether these parts are essential for the purpose of dredging in a Cutter Dredger. As far as the exclusion of generators is concerned, this Court notices that concurrently the order in appeal, as well as the order of the CESTAT, have excluded it from the benefit of the exemption notification. The Court finds no reason to interfere with those findings. Decision in the case of M/S STEEL AUTHORITY OF INDIA LIMITED VERSUS COMMISSIONER, CENTRAL EXCISE CUSTOMS [ 2022 (9) TMI 740 - SUPREME COURT] distinguished. The impugned order is hereby set aside. The order of the Appellate Commissioner is accordingly restored - Appeal allowed. 2023 (3) TMI 1008 Maintainability of petition - availability of alternative remedy by way of a statutory appeal - denial of Input Tax Credit (ITC) in respect of the removal of goods on stock transfer basis to their own Units at Jamshedpur and Uttarakhand - ITC on outward transfer for removal of goods from the appellant's factory to the customer premises - grant of personal hearing was not acceded to on the premise that the very same issue was pending consideration before this Court - violation of principles of natural justice. ITC on stock transfer basis to the appellant's factory - HELD THAT:- The issue now stands resolved by a decision of a Division Bench of this Court in M/S. ALKRAFT THERMOTECHNOLOGIES (PVT.) LTD. VERSUS COMMISSIONER OF CENTRAL GST AND CENTRAL EXCISE [ 2019 (9) TMI 328 - MADRAS HIGH COURT ], wherein in respect of the very same appellant herein (i.e. M/s.Alkraft Thermotechnologies (Pvt). Ltd.), it was found by the Division Bench of this Court that service tax paid by the appellant-assessee on transport of its goods by way of stock transfer from Chennai to Jamshedpur would be eligible for CENVAT Credit - Insofar as the GTA (Goods Transport Agency) service tax from the appellant-assessee's factory to its Units by way of stock transfer, is concerned, it is found that the order-in-original is unsustainable, insofar as it rejects the assessee's claim for ITC, inasmuch as it is contrary to the decision of the Division Bench of this Court in the assessee's own case - credit allowed. ITC on outward transfer for removal of goods from the appellant's factory to the customer premises - HELD THAT:- It is submitted that the above judgment of the Division Bench of this Court may have a bearing. The relevance of the above said Division Bench judgment insofar as the claim of ITC on GTA also needs to be considered, which the respondent failed to examine, thereby resulting in non-application of mind to relevant factors it appears appropriate that the appellant-assessee's claim of CENVAT credit in respect of the GTA service both in respect of stock transfer as well as upto the customer's premises, may have to be re-examined keeping in mind the above said judgment of the Division Bench of this Court in M/S. ALKRAFT THERMOTECHNOLOGIES - matter on remand. Non-compliance with the request of personal hearing - HELD THAT:- There seems to be some merit in the submission of the learned counsel for the appellant-Company (writ petitioner-assessee) that their request for personal hearing was not dealt with appropriately, from a perusal of the order dated 08.01.2019 passed by the respondent - the order of the respondent, dated 08.01.2019, warrants interference by this Court. Appeal allowed in part and part matter on remand. 2023 (3) TMI 1007 Levy of penalty on partnership firm as well as on partner - Clandestine clearance - stocks verified at the premises of the Appellant did not tally with their DSA records and excess stock was found in the factory premises - HELD THAT:- The Appellant has been able to demonstrate that the seized goods which were provisionally released were cleared on payment of proper Excise Duty as it is evident from the documents produced like DSA, ER- 1 Returns, etc. Therefore, once the duty of Rs.2,09,704/- has already been paid in the normal course, the Department cannot be once again recover this amount from the Appellant. The confirmation of Rs.2,09,704/- as Excise Duty to be paid as held by the Adjudicating Authority is infructuous and is set aside. From the order portion of the OIO, it is seen that the Adjudicating Authority has not given the option of payment of penalty @ 25% which he was required to do. The Tribunal Ahmedabad in the case of COMMR. OF C. EX., AHMEDABAD VERSUS KALPESH FOUNDERS ENGINEERS [ 2009 (7) TMI 1024 - CESTAT AHMEDABAD ] held that it was observed that when the Adjudicating Authority as also Commissioner (Appeals) acted illegally and contrary to the first Proviso to Section 11AC of the Act, and no option to pay penalty of 25% within 30 days was given to the assessee the fault lies with the authorities and not with the assessee - Therefore, relying on this case law, option given to the Appellant to pay 25% of Rs.2,09,704/- as penalty. The Appellant should pay the same within the 30 days from the date of communication of this order. Penalty imposed on the Partner - HELD THAT:- The Hon ble Punjab and Haryana High Court in the case of VINOD KUMAR GUPTA VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2012 (5) TMI 173 - PUNJAB AND HARYANA HIGH COURT ] have held that Partnership firm is a firm in mercantile usage, however, penalty imposed on the proprietorship or partnership firms would mean penalty on the proprietor or partners therof, therefore, imposition of penalties one on the proprietorship firm and second on the proprietor would amount to imposition of penalty twice, which cannot be sustained in the eyes of the law - the penalty on the partner Mr. Moinuddin Ansari is set aside. Appeal allowed in part. 2023 (3) TMI 1006 Recovery of Central Excise duty under Section 11A(4) of the Central Excise Act, 1944 along with interest under Section 11AA - levy of penalty under Section 11AC - non-payment of an amount equal to 6% under Rule 6(3) of the CCR, 2004 of the value of exempted goods/ non-excisable goods - SCN is vague and not clear - HELD THAT:- Neither the original authority nor the Commissioner (Appeals) has understood what the demand in the show cause notice was for. In view of the above, it is found that these are fit cases to be remanded to the Original Authority to decide the matter afresh strictly within the scope of show cause notice. Needless to say, even if demand can be made beyond the show cause notice, the order-in-original cannot go beyond the show cause notice. Appeals are allowed by way of remand to the Original Authority. CST, VAT & Sales Tax 2023 (3) TMI 1028 Levy of penalty upon the appellant under Section 51 (7) (b) of the Punjab VAT Act - penalty levied on the ground that there was mens rea to evade tax in the present case as the goods meant for trade were being transported by the dealer without proper and genuine documents with an intention to evade tax - HELD THAT:- It transpires that the department had committed a mistake by not involving M/s K.S. Steel Tubes Ltd. regarding transaction of goods from its premises without invoice. At the time of detention of vehicle and goods, the driver had produced the computerized invoice, which could have been destroyed after the vehicle had left the limits of Punjab and this fact has gone unaccounted. This invoice was not held to be genuine. More so, after about one week, the documents were produced before the designated officer during inquiry, showing purchase of goods by the appellant firm from various parties and kanda parchis. No such document was produced before the competent authority when the goods were released after accepting the bank guarantee. Once the appellant was taking the responsibility of getting the goods released, it was its own duty/responsibility to immediately produce the correct invoice. In this case, proper invoice had not been produced, rather it was a computerized invoice, which was produced after a gap of almost 10/20 days. Hence, the penalty has been rightly imposed upon the appellant, as the computerized invoice could have been easily destroyed. In the facts of the present case, the driver had produced the invoice as well as G.R. The invoice was computerized one. The fact that the goods were loaded from the premises of M/s K.S. Steel Tubes was also substantiated by the statement of Manoj Sehgal, Manager of that firm - Keeping in view the statement given by the driver and the manager (Manoj Sehgal), penalty has been rightly imposed by the competent authority, as the appellant did not produce any invoice/document immediately after the goods were seized on 26.02.2009. This Court is of the view that the impugned order has rightly been passed by the Tribunal and no illegality, much less perversity, has been found therein. No substantial question of law arises for consideration - Appeal dismissed. 2023 (3) TMI 1027 Service of SCN - Whether notice N-2 was properly served to the appellant as per the provisions of order V of CPC read with rule 79 of HVAT Act? - service of notice N2 is valid if served to an unknown and unnamed person, who is neither the addressee nor his regular employee and nor a person authorized by the addressee, or not? - department is right in sending subsequent notices without mentioning or referring to Notice N-2, which had already been allegedly served and without referring to the fact that none had appeared in response to the notice N2, or not? HELD THAT:- The assessing officer vide order dated 29.03.2013 had framed assessment under Section 15(3) of HVAT Act as well as CST Act to the tune of Rs.34,23,021/- by observing that the appellant-assessee was illegally claiming exemption from HVAT and CST by showing transactions between its sale offices and itself as branch transfers though they were interstate sales and thereby demand of tax was evaded. Against this order, the appellant had filed appeal before JETC (A) on the grounds that no notice for rejection of branch transfer and converting the same into interstate sales was ever given and further that the assessing authority had erred in treating branch transfer as interstate sales. The JETC (A) had rejected the plea that notice in form N-2 was not issued to the assessee. However, with regard to the question that the transaction as made by the appellant was branch transfer or interstate sales, the matter had been remitted to the assessing authority with direction to confront all the material which he was relying upon to the appellant. The assessment order was passed on 29.03.2013. In such circumstances, there cannot be stated to be any force in the argument as raised by the appellant that notice VAT N-2 had not been validly served upon it. The Tribunal had also taken note of the fact that the above named Sh. Rajeev Kumar had subsequently furnished an affidavit on 17.04.2018 swearing therein that his signatures on statement dated 01.06.2017 was obtained on blank papers. The Tribunal had rejected this plea and in our opinion rightly so in view of the fact that the affidavit so sworn by Sh. Rajiv Kumar was dated 17.04.2018 i.e. only on the day when the appeal by the Tribunal had been decided. The appellant being employer of the above said Sh. Rajeev Kumar can obviously be presumed to be in a dominating position to procure such affidavit. As such, we are inclined to hold that the Tribunal had rightly observed that the statement dated 01.06.2017 was actually made by Sh. Rajeev Kumar before the officers of department affirming that notice VAT N-2 was served upon the appellant through its gatekeeper. The appellant had failed to bring any such material on record to show that the service of notice VAT N-2 was not validly effected upon it. Thus, it is held that no ground has been made out for accepting the plea of the appellant that the notice VAT N-2 was not served upon it in accordance with law and, therefore, the contention raised by the appellant that in the subsequent notices, no reference as to service of previous notice VAT N-2 had been mentioned is also of no consequence - no substantial question of law has arisen in favour of the appellant. Appeal dismissed. 2023 (3) TMI 1026 Revisional powers of respondent-authorities under Section 61 (2) of the Haryana Value Added Tax Act, 2003 - after passing of the assessment order, no proceedings were pending under the Haryana General Sales Tax Act, 1973 - HELD THAT:- In the present case, the assessment order for the year 2002-2003 has been passed on 19.03.2007 (Annexure A-1). As per the judgment in EXCISE AND TAXATION COMMISSIONER, HARYANA VERSUS M/S FRIGOGLASS INDIA PRIVATE LIMITED AND ANOTHER [ 2019 (5) TMI 1178 - PUNJAB AND HARYANA HIGH COURT ], period of three years would expire in the year 2006. However, this order in itself was beyond the period of limitation. Apart from this fact, the revisional authority, while exercising its powers under the Haryana General Sales Tax Act, 1973, had issued notice for revising the assessment order. On the date of issuing this notice, the authorities under the Haryana VAT Act had no jurisdiction to revise the order, as no assessment proceedings were pending when the order of revision was passed/issued. Once, Haryana VAT Act had come into force, the authorities could not issue the said notice, as the jurisdiction to issue such notice has not been saved in the saving clause under Section 61 (2) of the Haryana Value Added Tax Act, 2003. Hence, by applying the ratio of the aforesaid judgment on the facts of the present case, the impugned orders are held to be without jurisdiction. Since the assessment order was passed under the Haryana General Sales Tax Act, no proceedings could be initiated after coming into force the Haryana VAT Act, as has been done in the present case - Apart from that, as per the judgment passed in M/s Frigoglass India Private Limited s case, the proceedings for the assessment year 2002-2003 had to be completed within a period of three years. However, the assessment order itself has been passed on 19.03.2007 (Annexure A-1). Appeal allowed. 2023 (3) TMI 1005 Retrospective withdrawal of exemption - Constitutional Validity of Notification No.II (1)/CTR/75 (b-2)/2007, dated 19.12.2007 (G.O.Ms.No.198) - vires of Sections 30 and 88 of the Tamil Nadu Value Added Tax Act, 2006 and Articles 14, 19 (1) (g), 265, 301 and 304 (a) of the Constitution of India - exemption to Waste Paper, Paper Boards and used/old bottles - refund - principles of unjust enrichment. Whether the impugned notification(s) which imports the condition that the exemption to Waste Paper, Paper Boards and used/old bottles shall be subject to the concession that the said goods are sold on inter-state trade and tax has been paid under the Central Sales Tax Act, 1956, retrospectively is within or beyond the scope of the powers conferred on the Government in terms of Section 17 of the TNGST Act, 1959 (or) Section 30 read with Section 88 (4) of the TNVAT Act? - HELD THAT:- The question is no longer res integra . Power may be conferred to make subordinate/ delegated legislation in the shape of rules, bye-laws, notifications etc., which have retrospective operation. - Such a power may be either conferred in express words or may be inferred by necessary implication. In the absence, however, of an express or necessarily implied power to that effect, subordinate/ delegated legislation, be it a rule, a bye-law or a notification, cannot have retrospective operation. It has been consistently held by this Court in the context of Section 17 of TNGST Act which is pari materia with Section 30 of the TNVAT Act, that while the Government is conferred with the power to grant exemption prospectively or retrospectively, the power to withdraw, annul, modify or vary a notifcation traceable to sub-Section (3) to Section 17 of the TNGST Act, cannot be exercised retrospectively. Reliance can be placed in the case of HONEST CORPORATION VERSUS STATE OF TAMIL NADU [ 1997 (12) TMI 622 - MADRAS HIGH COURT] and G. PACKIRISAMY CO. VERSUS STATE OF TAMIL NADU (AND OTHER CASES) [ 1994 (5) TMI 244 - MADRAS HIGH COURT] - On a reading of the above judgments it is beyond the pale of any doubt that the power of the State Government be it under Sub-section (3) to Section 17 or 30 of the TNGST Act or TNVAT Act respectively cannot modify, annul or vary a notification retrospectively. Thus the impugned notification insofar as it imports conditions which curtails or whittles the exemption for waste paper, paper board and old or used bottles is in excess of the power conferred under Sub-section (3) to Section 17 or 30 of the TNGST Act or TNVAT Act respectively. The impugned notification travels beyond the scope of power conferred under sub-Section (3) to Section 17 (or) Section 30 of the TNGST Act and the TNVAT Act respectively and thus the impugned notification viz., Notification No.II (1)/CTR/75 (b-2)/2007, dated 19.12.2007 (G.O.Ms.No.198) is ultra vires to Sections 17 of the TNGST Act, 1959 (or) Sections 30 and 88 of the TNVAT Act, 2006, insofar as it imports conditions with retrospective effect which has the effect of curtailing/ whittling down the scope of exemption granted vide notification in G.O.Ms.No.176 dated 28.12.2006. Whether any refund consequent to a declaration that the impugned notifications are ultra vires would be subject to the doctrine of ''Unjust Enrichment''? - HELD THAT:- It was submitted that it was not a case of claim of refund, but a case where the assessment orders were made granting refund and the prayer is to direct the 1st Respondent herein to forbear from giving effect to or rely upon Notification No.II(1)/CTR/75/(81)/07 [G.O.Ms.No.198, Commercial Taxes and Registration (B2)] dated 19.12.2007, to revise or review completed proceedings granting exemption in respect of the purchases of old/ used empty bottles during the period from 1st June, 2000 to 5th September, 2006. It is submitted by the learned counsel that Doctrine of Unjust Enrichment is applicable only against a claim for refund and not to reopen closed assessment thereby resulting in recovery of any sums/amounts collected by way of or purporting to be by way of tax. We are not inclined to accede to the above prayer for we do not intend rather cannot pass orders pre-empting a quasi-judicial authority from exercising its power. It is made clear that the above declaration on the validity of the impugned notification would not preclude the authorities to recover the sums if any collected by way or purporting to be by way of taxes if law enables/permits to do so. Needless to state that any such exercise shall be in accordance with law. Petition disposed off. 2023 (3) TMI 1004 Inter unit transfer of goods would constitute a sale or not - Rejection of claim of the petitioner that the transfer of goods from one unit of the petitioner company to another unit does not constitute sale - whether independent registrations are obtained by the units and whether different business are carried out by different units of the same company to conclude that two different entities are in existence? HELD THAT:- It is found that mere independent registrations or the fact that different lines of business would not convert an inter unit transfer as constituting a ''sale''. Unless and until it is shown that there are two distinct legal entities involved in a transaction, levy of tax by treating it as a transaction of sale is wholly impermissible. It would be relevant to refer to the following judgment of the Andhra Pradesh High Court in KCP. LIMITED VERSUS STATE OF ANDHRA PRADESH [ 1992 (9) TMI 330 - ANDHRA PRADESH HIGH COURT] wherein it was held that mere registration certificate obtained by different branch or unit will not by itself result in different units becoming distinct and different legal entities capable of transferring properties/goods from one entity / person to another which is a sine qua non for a transaction to be treated as a sale attracting the charging provision. It is thus evident that unless and until there are two distinct entities, the question of sale may not arise. However, the Tribunal has not even addressed this issue and has misdirected itself in looking at the factum of independent registrations and independent lines of business to conclude that the alleged inter unit transfer would constitute sale. It is deemed appropriate to remand the matter back to the Tribunal for examining the question on the strength of the documents whether both Hi-Tech Carbon Unit and Cement Unit are different units of Indian Rayon and Industries Limited. If the answer is in the affirmative, then the question of levy of tax cannot be sustained. Writ petition disposed off. Indian Laws 2023 (3) TMI 1025 Seeking grant of anticipatory Bail - possession of properties disproportionate to the known sources of income - petitioner submits that neither proper inquiry was conducted by informant nor by proper authority to trace out the actual income and expenditure of petitioner and his wife namely, Prabha Kumari and without proper enquiry present case has been lodged - HELD THAT:- In the instant case, every single amount received by the appellant has been proved on record through the testimony of the witnesses and is also supported by contemporaneous documents and intimations to the Government. It is not the case that the receipts so projected were bogus or was part of a calculated device. The fact that these amounts were actually received from the sources so named is not in dispute. Furthermore, these amounts are well reflected in the income tax returns filed by the appellant. In similar circumstances, the acquisitions being reflected in income tax returns weighed with this Court in granting relief to the public servant. In M. KRISHNA REDDY VERSUS STATE DEUPTY SUPERINTENDENT OF POLICE HYDERABAD [ 1992 (7) TMI 333 - SUPREME COURT] it was held that on the face of these unassailable documents i.e. the wealth tax and income tax returns, we hold that the appellant is entitled to have a deduction of Rs.56,240 from the disproportionate assets of Rs.2,37,842. In the present case, the documents which have been relied upon by the respondents cannot form the basis of quashing the FIR. The value and weight to be ascribed to the documents of two Judge Benches of this Court in order to support their submissions. There is no clash between the decisions in KEDARI LAL VERSUS STATE OF M.P. AND ORS [ 2015 (3) TMI 1426 - SUPREME COURT] and STATE OF KARNATAKA VERSUS SELVI J. JAYALALITHA AND ORS. AND K. ANBAZHAGAN VERSUS SELVI J. JAYALALITHA AND ORS. ETC. AND INDO DOHA CHEMICALS PHARMACEUTICALS AND ORS. ETC [ 2017 (2) TMI 926 - SUPREME COURT] for two reasons: (I) the judgment in J. Jayalalitha notes that a document like the Income Tax Return, by itself, would not be definitive evidence in providing if the source of one s income was lawful since the Income Tax Department is not responsible for investigating that, while the facts in the judgment in Kedari Lal were such that the source of income was not in question at all and hence, the Income Tax Returns were relied upon conclusively; and (ii) in any case, the decision in Kedari Lal was delivered while considering a criminal appeal challenging a conviction under the PC Act, while the present matter is at the stage of quashing of an FIR. In the present case, the appellant is challenging the very-source of the respondents income. Hence, at the stage of quashing of an FIR where the Court only has to ascertain whether the FIR prima facie makes out the commission of a cognizable offence, reliance on the documents produced by the respondents to quash the FIR would be contrary to fundamental principles of law. The High Court has gone far beyond the ambit of its jurisdiction by virtually conducting a trial in an effort to absolve the respondents. Considering the facts and circumstances of the case as well as submissions made on behalf of parties and the fact that petitioner has acquired assets disproportionate to his sources of income by misusing his official positions and adopting illegal and corrupt means and the fact that the further investigation is still going on, the petitioner cannot be privileged with grant of anticipatory bail - the prayer of anticipatory bail of the petitioner is hereby rejected. Application dismissed. 2023 (3) TMI 1003 Promotion of investments by providing structured packages for eligible projects - Tamil Nadu Industrial Policy 2007 - G.O.Ms.No.180, Industries (MIB.1) Department dated 30.09.2008 - HELD THAT:- There is really no effective defence from the State as far as this aspect of the matter is concerned and I concur with the petitioner on the position of law qua this issue. If the Court were to ultimately accept the stand of the petitioner, then the mere fact that the State has hurriedly issued a clarification pending Writ Petition, is certainly going to have no effect on such a decision - the amendment to G.O.Ms.No.150, by virtue of G.O.No.235 dated 02.12.2022 is irrelevant and in bad taste. If at all, the State were confident in its stand, it ought to have rested content with the documentation, as available. Thus, and being of the view that the clarification is irrelevant. SIPCOT, being an arm of the State has conferred with and consulted the appropriate departments of the Government and this inter- departmental discretion has resulted in the issuance of the Eligibility Certificate imposing a cap on the period of benefit. The respondents have also established clearly that there has been application of mind to the request of the petitioner as well as to various other aspects of the project including the exemptions - there is nothing perverse in the procedure that has been followed or on the restriction imposed. The petitioner cannot dictate any aspect of the benefit that it seeks and it is a matter of negotiation between the petitioner and the respondents as to the kind of aid that it receives. No doubt, it is always within its discretion to seek a particular benefit and in this case, the petitioner has sought the benefit of 10 years, which has been rejected. The policy and consequential the Government Orders issued reveal that there are several considerations to be taken into account by the State in curating an incentive/aid package to an applicant. In the present case, the fact that the petitioner has failed to achieve the requisite production for 13 years after commencement of production stands as testimony to its ineligibility to the incentive. Incidentally, the cement industry, the respondents point out, are not beneficiaries under the later industrial policies floated by the State - Incentives are extended by the State based on a periodic assessment of industries that are deserving of the same. The mere fact that a period or a tenure has not been set out under an order of exemption would thus, in my considered view, not lead to the conclusion that such a benefit was extended to be permanent. In the present case, there is no modification as such to the terms and conditions barring the cap in post on the tenure of benefit under the Notification. This would not constitute an amendment of the original terms, as the petitioner has revealed its hand by way of its own letter that a proper period for the currency of the investment benefit would be a minimum of ten years. Even on this score, the petitioner has failed since even today, after the expiry of 13 years, the petitioner accedes to the position that it has been unable to achieve the requisite production. The challenge to Eligibility Certificate dated 31.12.2015 is repelled - petition dismissed.
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