TMI Tax Updates - e-Newsletter
April 16, 2025

Case Laws in this Newsletter:

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

TMI Short Notes

1. offer financial relief to taxpayers who incur significant medical expenses on Specified Diseases in Clause 128 of Income Tax Bill, 2025 Vs. Section 80DDB of Income Tax Act, 1961

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2. Supportive Tax Provisions for Individuals and HUFs Caring for Disabled Dependents persons : Clause 127 of the Income Tax Bill, 2025 Vs. Section 80DD of the Income Tax Act, 1961

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3. Understanding Health Insurance Deductions : Insights from Clause 126 of the Income Tax Bill, 2025 Vs. Section 80D of the Income Tax Act, 1961

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4. Tax incentives to individuals who are enrolled in the Agnipath Scheme : Clause 125 of the Income Tax Bill, 2025 Vs. Section 80CCH of the Income Tax Act, 1961

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5. Tax Incentives for Pension Contributions under NPS : Clause 124 of the Income Tax Bill, 2025 Vs. Section 80CCD of the Income Tax Act, 1961

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Articles

1. POWER TO CALL FOR INFORMATION UNDER GST LAW

   By: Dr. Sanjiv Agarwal

2. The Importance of OPC Annual Return for Maintaining Compliance

   By: Ishita Ramani

3. SECTION 94 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 IS NOT APPLICABLE TO SOLE PROPRIETORSHIP FIRM

   By: DR.MARIAPPAN GOVINDARAJAN

4. PARLIAMENT QUESTION: IMPACT OF FTAS AND PTAS ON EXPORTSMinistry of Textiles

   By: YAGAY andSUN

5. India's trade (Import) with the African Union (AU)

   By: YAGAY andSUN

6. India and its Balance of Trade - Fundamental and Technical Analysis for filling the Gaps.

   By: YAGAY andSUN

7. BIS Quality Control Orders - How it is shaping the India's Manufacturing Sector in context with its Import?

   By: YAGAY andSUN

8. Amendment in Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. Notification No. 14/2025-Customs (N.T.)18th March 2025

   By: YAGAY andSUN

9. Tea Board of India: Introduction, Constitution, Legal Framework, Functions, Schemes, Products, Services, Membership.

   By: YAGAY andSUN

10. Project Exports Promotion Council of India (PEPC)

   By: YAGAY andSUN

11. Indian Oil Seed & Produce Export Promotion Council (IOPEPC){Export Promotion Council}

   By: YAGAY andSUN

News

1. NITI Aayog launches Report on ‘Unlocking $25+ Billion Export Potential - India’s Hand & Power Tools Sector’

2. DRI intercepts 7.56 kg cocaine worth around Rs. 75.6 crore at IGI Airport from an in-bound passenger from Dubai, one held

3. Karnataka HC directs Google India, executives to furnish 50% of FEMA penalties as bank guarantee

4. Tariff war opens door for India to emerge as global toy export hub

Notifications

GST - States

1. 24/2024-STATE TAX - dated 28-1-2025 - Chhattisgarh SGST

Amendment in Notification No. F-10-40/2017/CT/V(64), dated the 21st June, 2017

2. 23/2024-STATE TAX - dated 28-1-2025 - Chhattisgarh SGST

Seeks to provide waiver of late fee for late filing of NIL FORM GSTR-7 (GST TDS Return) - Supersede notification No.22/2021-State Tax, No. F 10-40/2021/CT/V(55), dated the 29th July, 2021

3. 22/2024-STATE TAX - dated 28-1-2025 - Chhattisgarh SGST

Notifies the special procedure for rectification of for Input Tax Credit Orders issued under Section 73, 74, 107, 108 which confirming demand for wrong availment of input tax credit

4. 21/2024-STATE TAX - dated 28-1-2025 - Chhattisgarh SGST

Notifies the respective date by which payment for the tax, as per the notice, statement, or order, must be made to qualify for a waiver of interest and penalties under Section 128A of the Chhattisgarh Goods and Services Tax Act, 2017

5. 20/2024-STATE TAX - dated 28-1-2025 - Chhattisgarh SGST

Chhattisgarh Goods and Services Tax (Second Amendment) Rules, 2024.

6. 11/2025-State Tax - dated 9-4-2025 - Gujarat SGST

Gujarat Goods and Services Tax (Second Amendment) Rules, 2025.

Circulars / Instructions / Orders

Customs

1. - - dated 24-3-2025

Standard Operating Procedure to be followed for containers selected for scanning at Scanning Facility -Reg

Highlights / Catch Notes

GST

• E-way Bill Compliance: Complete Documentation Mandatory for Goods Transport, Partial Filling Signals Potential Tax Evasion

  Case-Laws - HC : HC ruled that carrying a complete e-way bill is mandatory for goods transportation. The petitioner was found transporting goods without fully completing the e-way bill (Part B), which was generated only after vehicle interception. The court held that merely downloading Part A of the e-way bill does not absolve tax liability. The petitioner's conduct suggested an intention to evade tax, as the e-way bill inconsistently reflected transportation details. Following precedents in Akhilesh Traders and Jhansi Enterprises, the court established that incomplete documentation creates a rebuttable presumption of tax evasion. The petition was consequently dismissed, reinforcing the strict requirement of comprehensive e-way bill documentation post-April 2018.
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• Land Development Agreement Not Subject to GST, Revenue Sharing Arrangement Upheld with Interim Relief Granted to Petitioner

  Case-Laws - HC : HC adjudicated a dispute concerning a development agreement's revenue sharing arrangement between parties. The court determined that the transaction did not constitute a taxable transfer under GST law. Even if a transfer was presumed, it would involve immovable property, which falls outside GST taxation scope. The court found a prima facie case for interim relief exists. Respondents were mandated to file an affidavit in reply within two weeks and serve a copy on petitioner's counsel. The petition was subsequently disposed of, effectively granting preliminary relief to the petitioner.
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• Tax Recovery Notice Upheld: Procedural Challenges Rejected Despite GST Tribunal and Pre-Deposit Concerns

  Case-Laws - HC : HC dismissed the writ petition challenging tax recovery proceedings. The petition contested the validity of recovery notice issued on 13.02.2025 for tax, interest, and penalty, alleging procedural irregularities including non-constitution of GST Tribunal and non-compliance with pre-deposit requirements under Section 112(8). Upon filing of a reply affidavit by the Excise & Taxation Officer, the court rendered the petition infructuous, effectively maintaining the original tax demand without substantive adjudication of the underlying legal challenges.
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• Legal Challenge Halts GST Demand as Appellate Tribunal Remains Unformed, Ensuring Statutory Appeal Rights Under Section 112

  Case-Laws - HC : HC granted an unconditional stay of GST demand due to the absence of a constituted Appellate Tribunal under Section 112 of the GST Act. The court recognized the petitioners' statutory right to appeal and noted the Tribunal's non-existence. An interim stay was issued on the demand in Form GST APL-04, with directions for affidavit-in-opposition to be filed within eight weeks and potential reply within four weeks thereafter. The stay was granted for four weeks, acknowledging the petitioners' prima facie case.
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• Employer-Provided Canteen and Transport Services Deemed Taxable Supply Under GST with Limited Input Tax Credit Restrictions

  Case-Laws - AAR : AAR ruled that recoveries from employees for canteen and transportation services constitute taxable supply under GST. The services are considered incidental to business activities, with tax liability limited to amounts recovered from employees. Input tax credit is disallowed for both canteen and transportation services under Section 17(5) of CGST Act. Transportation services do not qualify for exemption under Notification No. 12/2017-Central Tax (Rate). The remaining service value, not recovered from employees, is treated as employer-provided perquisite and remains non-taxable. The ruling emphasizes that while services are supplied by the employer to employees, only the recovered portion attracts GST.
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• Employer Canteen and Transport Services Taxable Under GST, Recoveries Subject to Levy and Input Tax Credit Restrictions

  Case-Laws - AAR : Legal Summary: The AAR ruled on GST applicability for employee canteen and transportation services. The employer's provision of these services constitutes a taxable supply under Section 7(1) of CGST Act, 2017, with GST levied on the recoveries made from employees. Transportation services do not qualify for exemption under Notification No. 12/2017 and are classified as rented vehicle services. Input Tax Credit (ITC) is denied for transportation services, as they are considered personal consumption under Section 17(5)(g). The taxable value comprises only the amount recovered from employees, with the employer's remaining contribution treated as a non-taxable perquisite in lieu of employee services.
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Income Tax

• Income Tax Assessment Order Under Sec. 153C Invalidated Due to Insufficient Evidence and Improper Correlation of Search Materials

  Case-Laws - AT : ITAT held that the assessment order under sec. 153C was invalid due to lack of proper satisfaction regarding incriminating material. The AO failed to establish a direct correlation between search materials and the assessee's income for AY 2019-2020. Consequently, the PCIT's revisionary order under sec. 263 was deemed illegal and void ab initio. The tribunal emphasized that an illegal assessment order cannot be legitimized through revisionary powers. The order was ultimately decided in favor of the assessee, quashing both the assessment order and the revisionary proceedings.
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• Transfer Pricing Dispute Resolved: Comprehensive Reassessment Ordered with Full Restoration of Disputed Issues to Tax Authorities

  Case-Laws - AT : ITAT adjudicated transfer pricing dispute involving manufacturing and service segments. Tribunal found substantial merit in assessee's contentions regarding arm's length pricing methodology. Key objections included improper comparability analysis, incorrect application of transfer pricing principles, and disregard of multiple year data. The Tribunal comprehensively restored all disputed issues to TPO/AO for fresh determination, directing a de novo examination of transfer pricing adjustments. The appellate order allows the assessee to submit additional evidence and mandates the lower authorities to pass a reasoned order consistent with legal principles. Appeal allowed for statistical purposes with directions for comprehensive re-examination of transfer pricing computations.
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• Software Reimbursement Not Taxable: ITAT Clarifies Technical Services Scope, Rejects Tax Addition for SAP Installation Charges

  Case-Laws - AT : ITAT held that reimbursements for SAP software installation, intranet, and maintenance charges are not taxable in India as 'Fees for Technical Services' under section 9(1)(vii) of the Income Tax Act. The tribunal directed the Assessing Officer to re-verify design and drawing details, placing the burden of proof on the assessee. Regarding interest chargeability for non-residents, the tribunal referenced precedent establishing that section 209(1) proviso has prospective effect only. Consequently, the tribunal deleted the disputed tax addition and accepted the assessee's grounds, maintaining judicial consistency with prior coordinate bench decisions from assessment year 1992-93 onwards.
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• Tax Dispute Resolved: Procedural Defect Nullified, Assessee Granted Fair Hearing Under Section 249(4)(b)

  Case-Laws - AT : ITAT determined that Section 249(4)(b) was inapplicable due to specific procedural circumstances. The tribunal found the statutory requirements for advance tax payment were not conclusively established, particularly given the ex-parte order by the Assessing Officer. Consequently, the tribunal restored the matter to CIT(A) for merit-based adjudication, directing that the assessee be provided a reasonable opportunity of hearing in the appellate proceedings. The decision effectively nullified the procedural impediment and mandated a substantive review of the underlying tax dispute, ensuring procedural fairness and comprehensive examination of the case.
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• Assessee's Net Accounting Method for Reimbursement Expenses Validated, Tribunal Confirms Transparent Financial Reporting

  Case-Laws - AT : ITAT upheld the CIT(A)'s order, affirming the assessee's method of net accounting for reimbursement expenses. The tribunal found the assessee consistently followed a transparent accounting practice, with expenses properly documented in client ledger accounts and appropriate TDS deducted. Despite the AO's initial disallowance, CIT(A)'s comprehensive review of accounting records and lack of adverse comments from the AO validated the assessee's expense claims. The tribunal ultimately decided in favor of the assessee, rejecting the revenue's challenge to the expense reimbursement.
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• Tax Deduction Dispute: ITAT Clarifies Commission Payments and Service Charges for Consignee Forwarding Agents Under Sections 194C, 194H

  Case-Laws - AT : ITAT adjudicated a tax deduction at source (TDS) dispute involving payments to consignee and forwarding agents (CFAs). The tribunal examined whether payments characterized as "commission" or "variable service charges" warranted TDS under sections 194C, 194H, and potential default under sections 201(1) and 201(1a). Key findings revealed the CFA's limited operational role, without authority to independently contract or bind the primary assessee. The tribunal determined that merely labeling payments as "commission" does not automatically trigger TDS liability. Critically, no prior disallowances were made during scrutiny proceedings for assessment years 2013-14 to 2019-20, further supporting the assessee's position. Consequently, the tribunal ruled in favor of the assessee, invalidating the lower authorities' demand and finding the TDS deduction under section 194C was correctly applied.
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• Charitable Trust Registrations Restored: ITAT Overturns PCIT's Cancellation, Validates Educational Platforms Under Section 12A

  Case-Laws - AT : ITAT determined that the PCIT erroneously cancelled charitable trust registrations under section 12A without express statutory authority. The tribunal found no evidence of tax evasion or misuse of funds, recognizing the trusts as genuine educational platforms for medical professionals. The court held that the trusts consistently conducted charitable activities, invited global speakers, organized conferences, and applied received funds transparently through banking channels. Registration cancellation was quashed for most trusts, with the exception of one entity whose registration was under a different statutory provision. The tribunal emphasized that exemption denial should only apply to specific violations, and in this case, no substantive misconduct was proven. Consequently, the assessee's appeal was allowed, reinstating the charitable trust registrations.
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• Tribunal Upholds Taxpayer's Accounting Records, Rejects Arbitrary Disallowance of Sales During Demonetization Period

  Case-Laws - AT : ITAT held in favor of the assessee, rejecting the Assessing Officer's (AO) arbitrary rejection of books of accounts. The tribunal found that the assessee provided comprehensive documentation, including audited financial statements, VAT and service tax returns, and stock registers. The AO's suspicion of sales during demonetization was deemed unjustified, particularly given the nature of the assessee's tobacco and perfumery products. The tribunal criticized the AO's approach of challenging cash sales without proper verification and noted inherent arbitrariness in partially accepting sales figures. Consequently, the tribunal deleted the impugned addition and allowed the assessee's appeal, emphasizing the need for substantive inquiry before challenging accounting records.
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• Taxpayer Wins: Inter-Branch Purchase Disallowances Deleted After Thorough Document Verification and Precedent Review

  Case-Laws - AT : ITAT held that the CIT(A) correctly deleted disallowances related to inter-branch purchases after reviewing the Remand Report. The Revenue's challenge was deemed unsustainable as the Assessing Officer had already accepted the assessee's claim following document verification. Relying on precedent from Bombay HC, the tribunal emphasized that once concessions are made and verified, the department cannot subsequently challenge the same. The appeal was found devoid of merit, with the cross objection deemed unnecessary as no substantive grievance existed against the original order. The decision affirmed procedural fairness in tax assessment proceedings.
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• Tax Deduction Compliance Dispute Resolved: ITAT Remands Case, Grants Assessee Opportunity to Present Comprehensive Evidence

  Case-Laws - AT : ITAT adjudicated a TDS dispute under sections 194IA and 195, finding the assessee failed to substantively demonstrate compliance with first proviso to section 201(1). Despite incomplete initial documentation, the tribunal exercised discretion by remanding the case, providing the assessee an additional opportunity to present comprehensive evidence before the Assessing Officer. The appellate order set aside the lower court's decision, restoring all demand-related issues for fresh examination, and technically allowed the assessee's appeal for statistical purposes, thereby preserving procedural fairness while maintaining statutory scrutiny of tax deduction requirements.
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Customs

• Customs Introduces Streamlined Provisional Assessment Field for Bill of Entry, Simplifying Import Procedures for Stakeholders

  Circulars : The public notice details administrative modifications to the provisional assessment process for bills of entry in customs procedures. A new system field "Prov" has been introduced, allowing importers and customs house agents to request provisional assessment by marking the field as "Y" during bill of entry filing. The change eliminates the need to recall RMS-facilitated bill of entry. Stakeholders are advised to familiarize themselves with the new functionality and report any system-related difficulties to designated customs officials or through specified communication channels. The notice establishes a standardized protocol for implementing the new provisional assessment request mechanism across the customs jurisdiction.
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• Synthetic Diamond Imports Now Streamlined: Reduced Documentation for Small Stones Under One Carat Enhances Trade Efficiency

  Circulars : The public notice addresses mandatory qualifiers for synthetic diamond import/export declarations. Following challenges raised by exporters regarding Lab Grown Diamonds (LGDs) weighing less than one carat, the customs authority has modified previous regulations. For LGDs under one carat, additional qualifier declarations are now voluntary, while remaining mandatory for other diamond categories. The modification aims to reduce export processing complexities and minimize operational delays, providing flexibility for smaller diamond consignments while maintaining overall regulatory oversight of synthetic diamond trade documentation.
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• Customs House Agent Cleared: No Penalties Without Direct Proof of Fraudulent Intent Under Sections 114(iii) and 114AA

  Case-Laws - AT : CESTAT analyzed a case involving a Customs House Agent (CHA) facing penalties under Sections 114(iii) and 114AA of the Customs Act, 1962. The tribunal found the department's allegations against the CHA unsubstantiated, noting no credible evidence of fraudulent intent or deliberate misconduct. The tribunal emphasized that penalties can only be imposed with positive proof of the CHA's direct involvement in fraudulent activities. The department failed to record the appellant's statement or provide substantive evidence of wrongdoing. Consequently, the tribunal allowed the appeal, holding the imposed penalties unsustainable and highlighting that procedural compliance alone does not constitute a punishable offense under customs regulations.
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Benami Property

• Shell Company Claims Dismissed: Lack of Evidence Clears RK Emporium's Transactions Under Section 2(9)(A) of PBPTA

  Case-Laws - AT : AT determined that M/s RK Emporium is not a shell company, and the absence of Benamidars does not create a presumption of impropriety. Despite suspicious circumstances like bank credits during demonetization, the investigation failed to establish evidence of a benami transaction under Section 2(9)(A) of PBPTA. Consequently, the tribunal set aside the impugned order, lifted the provisional attachment of Rs. 1.12 crore from the appellant's bank account, and allowed the appeal, finding insufficient proof to substantiate claims of a benami property transaction.
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IBC

• Supreme Court Clarifies: Insolvency Moratorium Does Not Shield Criminal Prosecution for Cheque Dishonor Under Section 138

  Case-Laws - SC : SC held that interim moratorium under Section 96 IBC does not protect against criminal prosecution under Section 138 of NI Act. The moratorium is restricted to civil claims for debt recovery and does not extend to criminal proceedings. The protection applies only to corporate debtors, not personal guarantors or individual directors. Prosecutorial actions for cheque dishonor remain valid, as the legislative intent is to maintain commercial transaction integrity. The court emphasized that criminal liability cannot be evaded through insolvency proceedings. Consequently, the appellants' petition seeking stay of criminal proceedings was dismissed, reinforcing the deterrent effect of the NI Act in ensuring accountability in commercial transactions.
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Indian Laws

• High-Stakes Tax Fraud Case: Evidence Reveals Alleged Bribery Scheme Reducing Tax Liability from Rs. 13.06 to Rs. 7.00 Crores

  Case-Laws - HC : HC finds prima facie evidence of conspiracy and illegal gratification against accused No. 1 under PC Act and IPC. Prosecution alleges reduction of compounding tax from Rs. 13.06 crores to Rs. 7.00 crores after alleged bribe payment, with circumstantial evidence suggesting misconduct. Accused No. 8's car was used in alleged transaction, but insufficient evidence exists to implicate him in conspiracy. Court rejects statutory limitation arguments under KVAT Act and dismisses plea to quash final report, allowing prosecution to proceed against accused No. 1 while discharging accused No. 8 from conspiracy charges.
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• Legal Settlement Resolves Cheque Bounce Case: Section 138 Compounded, Conviction Quashed After Mutual Agreement

  Case-Laws - HC : HC allowed compounding of offence under Section 138 of Negotiable Instruments Act, 1881, following mutual settlement between petitioner-accused and complainant. The Court exercised discretion under Section 147, overriding general CrPC provisions, and accepted the compromise deed. The impugned judgment of conviction and sentencing order were quashed, effectively acquitting the petitioner-accused. The Court emphasized that compounding is permissible even post-conviction when both parties mutually agree to settlement, consistent with precedential guidelines from apex judicial interpretations.
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• Territorial Jurisdiction Matters: Cheque Dishonour Complaint Under Section 138 Requires Precise Location of Bank Branch Presentation

  Case-Laws - HC : HC determined territorial jurisdiction for a cheque dishonour complaint under Section 138 of Negotiable Instruments Act. The court held that the complaint can only be inquired into and tried by the court within the local jurisdiction where the cheque was delivered for collection, specifically the bank branch of the payee or holder in due course. In this case, the cheque was presented at an ICICI bank branch in Noida, which was beyond the Trial Magistrate's territorial jurisdiction. Consequently, the Trial Magistrate's order was set aside, and the complaint was directed to be returned to the complainant for filing before the appropriate magistrate with proper territorial jurisdiction.
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• High Court Strikes Down Unfair Loan Sale, Orders Full Refund, Compensation, and RBI Probe into Bank's Improper Auction Practices

  Case-Laws - HC : HC found the writ petition maintainable, quashing the sale certificate and declaring it null and void. The court ordered respondent No. 1 to refund Rs. 9,93,752.94 with 12% interest, foreclose the loan account, and remove the freeze on the petitioner's savings account. Additionally, the court directed RBI to investigate respondent No. 1's actions, imposed Rs. 5,00,000 compensation, and emphasized the critical importance of due diligence in auction sales, highlighting the bank's failure to disclose property encumbrances and conduct proper verification before sale.
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VAT

• Mobile Battery Chargers Taxed Separately from Cellphones, Independent Accessory Classification Confirmed Under VAT Regulations

  Case-Laws - HC : HC analyzed VAT taxation of mobile chargers within composite product sales. The court determined that mobile battery chargers are separate accessories, not integral components of cellphones, and should be taxed independently at prescribed rates. The tribunal's previous interpretation was found erroneous, failing to correctly apply VAT Act provisions and Supreme Court precedents. The court rejected the dominant nature test argument, emphasizing that chargers sold with phones constitute a pure goods transaction. Consequently, the HC allowed the petition, mandating separate taxation for mobile battery chargers at the appropriate rate under the HP VAT Act, 2005, specifically referencing entry No. 60 (f) (vii) of schedule-A.
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Service Tax

• Iron Ore Screening and Grading Deemed Mining Service Under MMDRA Act, Redefining Operational Classification Criteria

  Case-Laws - AT : CESTAT determined that screening and grading of iron ore constitutes mining services under MMDRA Act, 1957. The tribunal classified the appellant's services as mining services effective 01.06.2007, rejecting prior classification as Business Auxiliary Service. Supreme Court precedent regarding ancillary mineral preparation processes was instrumental in establishing the service's categorization. The tribunal found the activity inherently part of mining operations, thereby validating the appellant's service tax treatment. Revenue's concurrent taxation approach was acknowledged. Appeal was ultimately allowed, confirming the appellant's service classification as mining services.
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• Technology Support Within Same Organization Not Taxable Service, Research Center Expenditures Deemed Internal Transfer

  Case-Laws - AT : CESTAT determined that the technology assistance provided by the Research Center to its Division does not constitute a taxable service. The tribunal found that the Forsoc Technology Center (FTC) is an integral part of the appellant's organization, and the R&D expenditures cannot be considered a taxable service payment to the holding company. Consequently, the service tax demand for the period from April 2010 to March 2012 was set aside, with the principle of consistency applied to subsequent periods. The appellate authority ruled in favor of the appellant, effectively exempting the transaction from service tax liability.
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Case Laws:

• GST

• 2025 (4) TMI 810
  Interpretation of statute - whether carrying complete eway bill is mandatory for the movement of goods from one place to another? - HELD THAT:- The question is no more res integra after the 14th Amendment of the Uttar Pradesh Goods and Service Tax Rules, 2017 which came into effect from 01.04.2018. Post amendment in the Rule, it has become obligatory that goods should be accompanied with complete e-way bill. The co-ordinate Bench in Akhilesh Traders [ 2024 (2) TMI 1128 - ALLAHABAD HIGH COURT ] had held that in case goods are not accompanied by e-way bill, a presumption may be read that there is an intention to evade tax. Such a presumption of evasion of tax then becomes rebuttable by the materials to be provided by the owner/ transporter of the goods. In Jhansi Enterprises [ 2024 (3) TMI 219 - ALLAHABAD HIGH COURT ], the co-ordinate Bench following the decision rendered in Akhilesh Traders further held that mere furnishing of documents subsequent to interception cannot be a valid ground to show that there was no intention to evade tax. The Court further held that reliance placed upon the decision by petitioner therein was of transaction prior to April, 2018 but after April, 2018, those difficulties have been resolved and there is no difficulty in generating and downloading the e-way bill. In the instant case, it is an admitted case that the goods were intercepted by respondent no. 2 on 06.03.2023 at 3:16 a.m., while only Part A of the invoice No. ST/OUT/BMC/365, e-way bill no. 4113 1890 1103 was filled and Part B of the e-way bill required for transportation was not filled and it was generated on 06.03.2025 at 4:28 AM that is after about one hour when the vehicle was intercepted. Further, invoice no. ST/ OUT/BMC/366, e-way bill no. 4113 1891 6631 reflected that goods were being transported from Agra to Agra while the goods were brought from Agra to Noida for which no document was available - Moreover, conduct of the petitioner clearly reveals that an intention to evade the tax is there as not only the goods in transit were not accompanied by Part B of e-way bill but also goods were being transported from Agra to Noida while the e-way bill was issued by the petitioner firm from Agra to Agra. Conclusion - It is mandatory on the part of the seller to download the complete e-way bill once the goods are put in transit. Only downloading Part A of e-way bill and non filling of Part B would not absolve the liability under the Act. Petition dismissed.

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• 2025 (4) TMI 809
  Supply of services - revenue sharing arrangement under a development agreement entered into by the Petitioner with L T Asian Realty Project LLP - HELD THAT:- In the present case, in fact it is the case of the Petitioner that there is no transfer at all. Even if one would assume that there is a transfer, the same would be of immovable property and not taxable under the GST Law. Thus, a prima facie case for interim relief is made out. Respondent Nos. 1 to 4 are directed to file their Affidavit in Reply within a period of two weeks from today and serve a copy of the same on the Advocate for the Petitioner - petition disposed off.

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• 2025 (4) TMI 808
  Time Limitation - dismissal of appeal filed by the petitioner on the grounds of delay under the Chhattisgarh Goods and Service Tax Act, 2017 - HELD THAT:- Particularly considering the order dated 03.12.2019 issued by the Central Board of Indirect Taxes and Customs and also considering the order dated 09.05.2024 passed by the Co-ordinate Bench in WPT No.40/2023 and other connected matters [ 2024 (5) TMI 1549 - CHHATTISGARH HIGH COURT] , this Court finds it appropriate to direct that as soon as the President or State President enters the office of Goods and Service Tax Appellate Tribunal constituted under the Act of 2017, the petitioner may invoke the aforesaid provision for filing an appeal after statutory deposit. On such appeal being filed, the concerned Authority shall decide the same strictly in accordance with law. The statutory stay as provided under Section 112 (9) of the Act 2017 would remain in operation till the decision of said appeal. Petition disposed off.

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• 2025 (4) TMI 807
  Initiation of recovery proceedings initiated through the notice for recovery of demand dated 13.02.2025, which demands payment of tax, interest and penalty despite non-constitution of GST Tribunal and the payment of requisite pre-deposit by the petitioner in terms of Section 112 (8) and in violation of Circular dated 11.07.2024 bearing No. 224/18/2024 - HELD THAT:- Upon notice, reply by way of affidavit dated 05.03.2025 of Karanbir Singh, Exicse Taxation Officer-cum-Proper Officer, Ward No.2, Mansa, on behalf of the respondents, was filed. In view of the stand taken by the respondents, the present writ petition is disposed of as having been rendered infractuous.

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• 2025 (4) TMI 806
  Direction against an interim direction - HELD THAT:- In the instant case the peculiar facts and circumstances persuades to grant an order of stay of the impugned orders in the writ petition without any condition. This is because the case of the appellant/writ petitioners is that they committed a mistake while claiming ITC in IGST to the tune of Rs.19,12,857/- in the place of actual claim of ITC in CGST of Rs.9,56,429.12/- in WBGST of Rs.9,56,429.12/- and, as a result of the said ITC in IGST of Rs.19,12,857/- was reflected in the electronic credit ledger of IGST. The court is of the view that the orders impugned in the writ petition shall remain stayed till the disposal of the writ petition and the petitioners are exempt from making the payment of 10% of the tax in dispute as ordered by the learned writ court - Petition disposed off.

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• 2025 (4) TMI 805
  Principles of Natural Justice - Exemption to goods cleared from a unit located in the state of Jammu and Kashmir - benefit of N/N. 01/2010-CE dated 06.02.2010 - opportunity of hearing not provided to the petitioner - Conclusion - The impugned memorandum(s) passed by Respondent No. 1 Respondent No. 3 and the recoveries initiated, fly in the face of judgment dated 24.09.2020 passed by the Division Bench of this Court. In terms of judgment in LUPIN LIMITED VERSUS UNION OF INDIA AND OTHERS [ 2020 (12) TMI 909 - JAMMU AND KASHMIR HIGH COURT] , the Respondent No. 3 was under a legal obligation to pass a fresh order after affording an opportunity of being heard to the petitioner. The Respondent No. 3 was also required to pass a reasoned order so that the petitioner could know the basis of acceptance or otherwise of his claim. This however, has not happened in this case. The impugned office memorandum(s) dated 26.07.2021 and 05.08.2021, respectively, including the recovery proceedings, if any, initiated by the respondents quashed - petition allowed.

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• 2025 (4) TMI 804
  Cancellation of the petitioner s GST registration - non-filing of returns by the petitioner s auditor - HELD THAT:- In this case, the GST registration of the petitioner was cancelled by the respondent vide the impugned order dated 08.02.2024. According to the petitioner, the Auditor, who was entrusted by him, had failed to file his returns continuously for a period of 6 months and hence, the GST Registration of the petitioner was cancelled by the respondent vide impugned order dated 08.02.2024. The reason provided for non- compliance with the relevant provisions of the Act within the prescribed time, in the considered opinion of this Court, appears to be genuine. This Court is inclined to revoke the impugned order dated 08.02.2024 passed by the respondent canceling the GST registration of the petitioner. The cancellation of registration is hereby revoked, subject to the fulfillment of conditions imposed - bail application allowed.

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• 2025 (4) TMI 803
  Stay of demand / recovery of GST - Absence of a constituted Appellate Tribunal under Section 112 of West Bengal/Central Goods and Services Tax Act, 2017 - HELD THAT:- Noting that that the petitioners have a statutory right in the form of an appeal before the Appellate Tribunal and the said Appellate Tribunal under Section 112 of the said Act is yet to be constituted, the writ petition should be heard. Let affidavit-in-opposition to the present writ petition be filed within a period of eight weeks from date. Reply, thereto, if any, be filed within four weeks thereafter - Since, the petitioners have been able to make out a prima facie case, there shall be an unconditional stay of the demand made in Form GST APL 04 dated 27th September, 2024, for a period of four weeks from date.

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• 2025 (4) TMI 802
  Taxation of recovery of canteen services and transportation services made from employees - Taxability of Supply of Canteen services and transportation services to the employees - Whether the Applicant would be exempted under the S1. No. 15 of Notification No. 12/2017-Central Tax (Rate)? - Whether ITC of tax paid to Canteen Service Provider for Canteen Services is available? - Whether ITC is available to the Applicant on GST charged by the Transport Service Providers for providing the non-air-conditioned bus transportation services? - Value in respect of which canteen and transportation services are taxable. Taxation of recovery of canteen services and transportation services made from employees - HELD THAT:- There is no privity of contract between these service providers and the employees. It is the Appellant (employer) which is providing these services to the employees. Applicant deducts certain amount from salary of the employees against this supply. Applicant makes only part of the recovery and balance cost is borne by him. Hence, the criteria of business , consideration are met in the transaction of supply of these services by Applicant the employees. Thus, there is supply of canteen services and transportation services from the Applicant to the employees, u/s. 7 (1) of CGST Act, 2017. Taxability of Supply of Canteen services and transportation services to the employees - HELD THAT:- If incidental of ancillary supply of goods or services such as canteen or transportation services by the employer to employee were to not fall under business , it would not be necessary to provide respite to supplies by employer to employees given as perquisite from falling under supply by taking recourse to schedule III. That is, if a transaction or activity is not a supply u/s 7 (1) of CGST Act, then there would not be necessity to place such a transaction u/s 7 (2) (a) for deeming it to be neither supply of goods nor supply of services - the recoveries made from the employees are liable to levy of tax as it is consideration against canteen services and transportation services provided by the Applicant to the employees. Whether the Applicant would be exempted under the S1. No. 15 of Notification No. 12/2017-Central Tax (Rate)? - HELD THAT:- The contract carriage permit holder is responsible for the operation of vehicles as per the conditions imposed in section 74 of the Motor vehicles Act, 1988. In this case, the applicant is not the contract carriage permit holder and thus not bound by the conditions mentioned in the section 74 of the Motor Vehicles Act, 1988 - M/s. Supreme Facility Management Ltd. is charging his services of providing transport buses for carrying the employees @12%. These invoices are raised to M/s. Lear Automotive India Pvt. Ltd. These services are in the nature of renting of services of transport vehicles with operators. Here, the transport service provider provides buses to M/s. Lear Automotive India Pvt. Ltd. and charges them on monthly basis fixed amount plus 12% GST under SAC 9966. Cost of fuel is included in these charges and the buses provided are along with the drivers. It is for M/s. Lear Automotive India Pvt. Ltd. to decide as to how these buses are to be used. Thus, these services squarely fall under SAC 9966 as rented services of transport vehicles. Further, the hire or charter services are excluded from the said entry 15(b) of Notification No. 12/2017 CT(R) dated 28.06.2017. In view of aforesaid discussion, the transportation services provided by the Applicant to its employees are not covered by entry 15(b) of the Notification No. 12/2017 CT(R) dated 28.06.2027. The services provided by M/s. Lear Automotive India Pvt. Ltd. squarely fall under transport of passengers under SAC 9964 and taxable at 5% without ITC or 12% with ITC (If ITC is not blocked by other provisions) under entry No. 8 (vi) of Not. No. 11/2017 CT(R) dated 28.06.2017 as amended from time to time. Whether ITC of tax paid to Canteen Service Provider for Canteen Services is available? - HELD THAT:- The flow of the transaction is that the Canteen Contractor is providing service to the Applicant, which is classifiable as Restaurant Service and the Applicant himself is also providing same service to its workers as mandated in the Factories Act, 1948 i.e., he is also providing Restaurant Service to its workers. As already mentioned in para 5.3.6, the Restaurant Service compulsorily attracts rate of 5% without ITC in a non-specified premise and the Applicant s premises is not specified premises in terms of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. Therefore, though the Section 17 (5) of the CGST Act, 2017 does not block availment of ITC, however, in the present case, availment of ITC is barred in terms of provisions of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended vide Notification No. 20/2019-C.T. (Rate) dated 30.09.2019. Whether ITC is available to the Applicant on GST charged by the Transport Service Providers for providing the non-air-conditioned bus transportation services? - HELD THAT:- Hired motor vehicles would be used by the applicant for provision of service of transportation of employees from residence to factory or office premises. The services of leased or hired motor vehicles are consumed for discharging obligation towards employees - Section 17 (5) (g) of CGST/MGST Act 2017 states that input tax credit shall not be available in respect of goods or services or both used for personal consumption. Provision of service of transportation of employees from residence to factory or office premises has been used for personal consumption or comfort of employees. The applicant is not under any statutory obligation to provide these services to his employees and the services provided comes under category of personal consumption which makes the applicant ineligible to avail input tax credit on the invoices issued to him by the transporter for transportation of employees as per Section 17 (5) (g) of CGST/MGST Act 2017. Value in respect of which canteen and transportation services are taxable - HELD THAT:- The value of the outward supply of canteen and transportation service can be considered as having two parts. First part is the amount of recovery that is made from the employees, and second part is balance value of the services provided by the employer as perquisite which is in the lieu of the services provided by employees to the employer. The entire balance value of the services for which no amount is charged is the perquisite provided by the employer to the employees. As this part is in lieu of services of the employees to the employer which fall under schedule 3, the perquisite part is not taxable, as a corollary, deeming it to be falling in the said entry of schedule 3. Hence, though the employer and employee are related parties, the value on which tax is a liable to be paid is only the recovered amount from the employee as the remaining part of the value is the perquisite provided by the employer which is not liable to tax. Conclusion - i) The recoveries made by the Applicant from employees for canteen and bus transport facilities are taxable under GST as they are incidental to the Applicant s business activities. ii) The Applicant is not eligible for exemption under Notification No. 12/2017-Central Tax (Rate) for bus transportation services, as the services do not qualify as contract carriage. iii) Input tax credit is not available for the canteen and transportation services as per Section 17(5) of the CGST Act and relevant notifications. iv) GST is payable only on the value of the recoveries made from employees, not on the full value of the services provided.

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• 2025 (4) TMI 801
  Levy of GST - recoveries made from the employees towards providing canteen facility at subsidized rates in the factory and office - recoveries made from the employees towards providing bus transportation facility - exemption under N/N. 12/2017 Central Tax (Rate) - ITC of the input services received in respect of the services procured in respect of bus transportation services. Taxation of recovery of canteen services and transportation services made from employees - HELD THAT:- The Applicant (employer) is supplying these services to their employees for which the Applicant is receiving consideration, although at the subsidized rate, from their employees. The respective service provider invoices the appellant for the entire services. He charges the consideration along with GST thereon. There is no privity of contract between these service providers and the employees. It is the Appellant (employer) which is providing these services to the employees. Applicant deducts certain amount from salary of the employees against this supply. Applicant makes only part of the recovery and balance cost is borne by him. Hence, the criteria of business , consideration are met in the transaction of supply of these services by Applicant to the employees. Thus, there is supply of canteen services and transportation services from the Applicant to the employees, u/s. 7 (1) of CGST Act, 2017. Taxability of Supply of Canteen services and transportation services to the employees - HELD THAT:- If incidental of ancillary supply of goods or services such as canteen or transportation services by the employer to employee were to not fall under business , it would not be necessary to provide respite to supplies by employer to employees given as perquisite from falling under supply by taking recourse to schedule III. That is, if a transaction or activity is not a supply u/s 7 (1) of CGST Act, then there would not be necessity to place such a transaction u/s 7 (2) (a) for deeming it to be neither supply of goods nor supply of services. Hence, as discussed in Para 5.1.2 and 5.1.3, Applicant s activity of supply of canteen and transportation services falls u/s 7 (1) of CGST Act, 2017. As discussed in Para 5.1.4, only the perquisites i.e., free supplies, in terms of a contractual agreement between the employer and employee are not to be subjected to GST as these are in lieu of the services provided by employee to the employer in relation to his employment. Hence, the recoveries made from the employees are liable to levy of tax as it is consideration against canteen services and transportation services provided by the Applicant to the employees. Whether the Applicant would be exempted under the SI. No. 15 of Notification No. 12/2017 - Central Tax (Rate)? - HELD THAT:- The transport service provider provides buses to M/s. Spicer India Private Limited and charges them on monthly basis based on fixed amount plus additional charges based on the Km running of the bus. Additionally, 12% GST under SAC 9966 is also charged in the bill. Cost of fuel is included in these charges and the buses provided are along with the drivers. It is for M/s. Spicer India Private Limited to decide as to how these buses are to be used. Thus, these services squarely fall under SAC 9966 as rented services of transport vehicles. In case of MAH AAR-M/s. Shailesh Ramsundar Pande and RAJ AAR in case of M/s. Pawan Putra travels, the services provided by the transport service providers to the companies or organization for transportation of its employees have been held to be renting services to the company. Further, the hire or charter services are excluded from the said entry 15 (b) of Notification No. 12/2017 CT(R) dated 28.06.2017. In view of aforesaid discussion, the transportation services provided by the Applicant to its employees are not covered by entry 15(b) of the Notification No. 12/2017 CT(R) dated 28.06.2027. The services provided by M/s. Spicer India Private Limited squarely fall under transport of passengers under SAC 9964 and taxable at 5% without ITC or 12% with ITC (If ITC is not blocked by other provisions) under entry No. 8 (vi) of Not. No. 11/2017 CT(R) dated 28.06.2017 as amended from time to time. Whether ITC is available to the Applicant on GST charged by the Transport Service Providers for providing the non-air-conditioned bus transportation services? - HELD THAT:- The service provider of transportation service to the Applicant is required to discharge GST on the said services. It is seen that ITC on leasing, renting or hiring of motor vehicles for transportation of passengers having approved seating capacity of more than 13 persons is not blocked u/s 17 (5) (b)(i) - The transportation of employees by picking them from their residence to the factory or office premises is merely for personal convenience of the employees to enable them to reach the premises of the office so as to participate in the business activity. Section 17 (5) (g) of CGST/MGST Act 2017 states that input tax credit shall not be available in respect of goods or services or both used for personal consumption. Provision of service of transportation of employees from residence to factory or office premises has been used for personal consumption or comfort of employees. The applicant is not under any statutory obligation to provide these services to his employees and the services provided comes under category of personal consumption which makes the applicant ineligible to avail input tax credit on the invoices issued to him by the transporter for transportation of employees as per Section 17 (5) (g) of CGST/MGST Act 2017. Taxability of value in respect of which canteen and transportation services - HELD THAT:- Supply of canteen services and transportation services to the employees would in normal course constitute to be the supply of services u/s 7 (1) of GST Act 2017. However, it is now clarified by the CBIC circular No. 172/04/2022/GST dated 6th July 2022 that perquisite provided to the employees in view of the Contractual Agreement would not be subjected to GST. It is clarified that such perquisite are in lieu of the services provided by the employees to the employer in the course of or in relation to his employment, and should not be subjected to GST. The supply of canteen and transportation services in the nature of perquisite by the employer to the employee would not have respite from two aspects mentioned at Sr. No. 1 and 2 above as the said supply is neither exempted nor a Non-GST supply. Hence, it needs to be analysed if such services can be called as supply u/s 7. The value of the outward supply of canteen and transportation service can be considered as having two parts. First part is the amount of recovery that is made from the employees, and second part is balance value of the services provided by the employer as perquisite which is in the lieu of the services provided by employees to the employer. The entire balance value of the services for which no amount is charged is the perquisite provided by the employer to the employees. As this part is in lieu of services of the employees to the employer which fall under schedule 3, the perquisite part is not taxable, as a corollary, deeming it to be falling in the said entry of schedule 3. Hence, though the employer and employee are related parties, the value on which tax is a liable to be paid is only the recovered amount from the employee as the remaining part of the value is the perquisite provided by the employer which is not liable to tax Conclusion - i) GST is payable on the recoveries made from employees for canteen facilities, based on the value of recoveries. ii) GST is payable on the recoveries made from employees for bus transportation facilities, and no exemption under Notification No. 12/2017 applies. iii) ITC is not available for the GST paid on bus transportation services.

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• 2025 (4) TMI 800
  Seeking grant of regular bail - rumming of fake firms - commission of an offence punishable under Section 132 (1) (b) (f) (1) of The Central Goods and Services Tax Act, 2017 - HELD THAT:- There was every danger of the course of justice being thwarted, if the accused was enlarged on bail. The Court can not lose sight of the fact that such like of crimes, were on rise and therefore, the perpetrators of the crime must be dealt with, iron hands. Leniency, while granting bail in serious offences, was not only undesirable but also against public interest. Given the intricate nature of the fraudulent activities involved and the possibility of a wider network, after considering the criminal antecedents of the applicant, the commission of offence, as alleged was prima-facie found attracted. Hence, the applicant-accused Arun Garg is held not entitled, to bail under Section 483 of the Cr.P.C. It has also been held in Inderjeet Singh @ Laddy and others Vs. State of Punjab, [ 2014 (1) TMI 1972 - PUNJAB AND HARYANA HIGH COURT] , that there can not be any settled precedent in criminal cases especially, in bail matters. Facts of each case are different and distinct, therefore, observations made by the Court while deciding a bail can not be taken to be settled and binding precedent by the other Courts dealt with similar matters. Conclusion - The applicant-accused Arun Garg is not entitled to bail under Section 483 of the Cr.P.C. due to the prima facie evidence of his involvement in economic offenses, the risk of tampering with evidence, and the need to protect societal interests. Application dismissed.

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• Income Tax

• 2025 (4) TMI 799
  Estimation of gross profit (GP) at 5% and disallowance of expenses estimated at 25% - Bogus purchases - HELD THAT:- Revenue could not place on record the rejection of books of accounts merely based on non-furnishing of supporting evidences, namely, not submitting contra confirmation, details of purchase and sales. Furthermore, the Revenue could not controvert the submission that there was increase in the price of raw materials which are resulted in reduction of GP, whereas, the actual GP is 1.18% as per the audited financial statement. Similarly, disallowance of business expenses at 25% is not justified by the AO with any material evidences but only on adhoc basis. Thus, we do not find any infirmity in the deletion made by the Ld. CIT(A). Thus, Ground No.1 of appeal raised by the Revenue is devoid of merits and the same is liable to be dismissed. Addition u/s.68 - unexplained sundry creditors - HELD THAT:- As the assessee filed a paper book wherein details of sundry creditors and also produced ledger accounts which clearly states that there is a credit and debit with the closing balances as on 30.11.2016. Thus, the AO is not correct in treating the above transaction as unexplained and in the absence of any contra evidence and made addition u/s.68. Hon ble Jurisdictional High Court in the case of PCIT vs. M/s. Adani Agro Pvt. Ltd. [ 2018 (2) TMI 1215 - GUJARAT HIGH COURT] held that the provisions of Section 41(1) of the Act could not have been invoked as there is no remission of cessation of liability - Decided in favour of assessee. Unexplained cash credit - HELD THAT:- Hon ble Gujarat High Court in the case of CIT V Ayachi Chandrashekhar Narsangji [ 2013 (12) TMI 372 - GUJARAT HIGH COURT] held that where department had accepted the re-payment of loans in the subsequent year, no addition was to be made in the current year on account of cash credit. Addition towards alleged capital work in progress - CIT(A) held that the asset having been not reflecting in the blocks of assets in the depreciation chart, he confirmed the addition - HELD THAT:- Counsel clarified that the assessee in ITR by mistake shown Rs. 15,87,600/- as capital work in progress but actually it comprised of Rs. 10,71,100/- of flat and Rs. 5,16,500/- being office, which is also evident from balance sheet. The above being personal asset and they were not claimed in the block of assets in the depreciation chart, however reflecting as Fixed Assets in the balance sheet of the firm. We find force in the submissions of the assessee that the Ld. CIT(A) erred in sustaining the above addition that too u/s.69 of the Act, when it is already reflecting in the books. Therefore, the addition is liable to be deleted.

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• 2025 (4) TMI 798
  Unaccounted cash receipts on sale of land - incriminating documents were found and seized in search action - As argued assessee cannot be held liable for having received any on-money in cash in connection with sale of land, as the assessee has not sold the land to the K. Star Group entity, which is actually the second buyer, or subsequent buyer - CIT(A) deleted the addition - HELD THAT:- The assessee cannot be held liable for having received any on-money in cash in connection with sale of land, as the assessee has not sold the land to the K. Star Group entity, which is actually the second buyer, or subsequent buyer. Therefore, CIT(A) held that there is no justification for making an addition on account of receipt of on money in cash, in the hands of the assessee, as the assessee has sold the land to three individuals as an agricultural land, and not sold to any K. Star Group entity, which might have acquired the same in a subsequent sale transaction to which the assessee is not a party, and for that reason, the assessee cannot be made liable. Therefore, ld CIT(A) deleted the addition. In the wake of above delineation, we see no error in the conclusion drawn by the CIT(A) in this regard. The CIT(A) in our view, has rightly deleted the addition. We thus decline to interfere with the conclusion so drawn by the CIT(A) whose order is under challenged by the revenue. Therefore, we dismiss the appeal of the revenue.

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• 2025 (4) TMI 797
  LTCG - Transfer of capital asset u/s 2(47) - Year of assessment - AO was of the view that since the development agreement was signed during the period under consideration, the property is said to be transferred during this period only accordingly not satisfied with the reply of the assessee - HELD THAT:- Considering the totality of the facts of the case and judgement passed in the case of Bharat Jayantilal Patel [ 2023 (2) TMI 428 - BOMBAY HIGH COURT] we are of the considered opinion that capital gains income does not arise to the assessee on transfer of development rights in its land to a developer, since assessee had merely granted licence to permit construction on land to such developer but not given any possession in land as contemplated under section 53A of T.P. Act, 1882, there was no transfer as per section 2(47)(v) giving rise to any capital gain in hands of assessee. Thus we direct the AO to delete the addition made on account of capital gains. Thus, the ground raised by the assessee in this appeal is allowed.

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• 2025 (4) TMI 796
  Revision u/s 263 to revise the assessment order passed u/s 153C - assessee has made on money payment towards purchase of agricultural lands which has neither been offered for taxation in assessment year 2019-2020 by the assessee nor the same was assessed to tax by the AO u/sec.69 - HELD THAT:- We find that there is no direct co-relation between the incriminating material found during the course of search qua the assessment years 2019-2020 to allege that the documents found during the course of search belongs to or relates to the assessee s and has a bearing on the total income of the assessee s for the assessment year 2019- 2020. Therefore, we are of the considered view that the satisfaction note recorded by the AO u/sec.153C is not in accordance with law as provided u/sec.153C of the Act and this fact is further strengthened by the decision of Sinhgad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] wherein it has been clearly held that unless the AO records satisfaction with reference to the incriminating material qua each assessment year, the initiation of proceedings u/sec.153C and consequent assessment proceedings is null and void abinitio. Since the satisfaction note recorded by the AO is not a valid satisfaction, in our considered view, any assessment order passed by the AO pursuant to the said invalid satisfaction note also void abinitio and liable to be quashed. Therefore, once the assessment order considered to be illegal assessment order, in our considered view, the assumption of jurisdiction by the PCIT to revise the assessment order in terms of sec.263 of the Income Tax Act, 1961 is also illegal and void abinitio and liable to be quashed because an illegal order cannot be legalised by exercising revisionary power u/sec.263 of the Act. Order passed by the PCIT u/sec.263 of the Act is not sustainable in law. Decided in favour of assessee.

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• 2025 (4) TMI 795
  TP Adjustment made in manufacturing segment - case of the assessee that the TPO has omitted to examine the ALP applying transactions by transactions approach in the light of additional evidences placed before the Tribunal and largely omitted to taking into account various submissions despite the matter having been set aside for fresh determination - as objected TPO has only provided proportionate relief in respect of its manufacturing segment and restricted the TP adjustments to the quantum of international transactions entered with AE. Besides, the direction of the ITAT [ 2012 (11) TMI 1208 - ITAT DELHI ] to re-examine the contentions of the assessee towards R D support service segment and business support service segment has not been given due effect. HELD THAT:- The assessee has filed detailed submissions in writing as well as made lengthy oral submissions as broadly extracted in the preceding paragraphs. The objections of the assessee ranges from failure to apply ALP principles in the assessment order passed under challenge; failure to apply interpretation rendered by Co-ordinate Benches and in disregarding multiple year/prior years data used by the assessee - Plea towards international transactions relating to import of components for manufacturing of electrical equipment would meet arm s length principles on a transaction by transaction basis as canvassed by the assessee have been ignored. The contention towards selection of overseas tested party is also alleged to have been disregarded contrary to position of law and based on incorrect appreciation of facts. The assessee also asserts that the TPO has included certain companies that are not comparable to the assessee in terms of the functions performed, assets employed and risks assumed. Likewise, as contended, the TPO has wrongly excluded certain comparables companies for the purposes of TP adjustments. As further contended, the benefit of working capital adjustment while computing the ALP has also not been borne in mind. In the light of order passed by the Tribunal under s. 254(12) of the Act, the assessee also claims tax holiday u/s 10A on profits arrived at after the adjustments so made in accordance with law and alleges that the lower authorities have failed to apply the principles laid down in the case of CIT vs TEI Technology Pvt. Ltd. [ 2012 (9) TMI 47 - DELHI HIGH COURT ] We find considerable force in the plea of the assessee for appropriate relief from such alleged errors committed by the lower authorities. We thus consider it expedient to restore all the issues placed before the Tribunal back to the file of the TPO/AO for fresh determination of such issues in the light of submissions made and various claims asserted before the Tribunal. It shall be open to the assessee to make such submissions and adduce such evidences as may be considered expedient. The TPO/DRP/AO shall pass fresh order in accordance with law by way of a speaking order. Appeal of the assessee is allowed for statistical purposes.

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• 2025 (4) TMI 794
  Accrual of Income in Inda - Fees for Technical Services u/s 9(1)(vii) of the Income Tax Act - consideration received from supply of designs and drawings forming integral part of the sale/supply of equipments, received under various contracts - whether amounts received towards reimbursement of cost towards intranet, SAP are liable to tax in India as Fees for Technical Services ? - HELD THAT:- As the earlier learned coordinate bench(es) has already decided the issue of taxability of assessee s income, be it from sale of designs and drawings or offshore sale of plant and machinery, against the department by quoting the corresponding adjudication right from AY 1992-93 onwards whilst holding that the impugned receipts are not taxable in India under the provisions of the Act. Coming to the Revenue s foregoing limited objection of reconciliation of the assessee s designs and drawings vis- -vis, the corresponding projects we direct the learned AO to re-verify its details as per law within three effective opportunities. We make it clear that it shall be the assessee s onus only to plead and prove the relevant facts in the consequential reconciliation. Reimbursements representing installation of SAP software, regular breakup and maintenances and intranet charges, as taxable in India, under the head fee for technical services - We find that the DRP s directions in assessee s case itself for AY 2010-11 have already accepted the instant claim thereby concluding that the same are neither taxable as a FTS under section 9(1)(vii) of the Act for want of any technical services being provided nor royalty under section 9(1)(vii) Explanation 1 of the Act. All these clinching intervening developments have gone unrebutted from the Revenue side. We thus adopt judicial consistency in absence of any distinction of facts or law, as the case may be, to delete the impugned addition. The assessee s firth substantive ground is accepted. Chargeability of interest in its case under section 234B being a non-resident - Suffice to say, the case law DIT Vs. Mitsubishi Corporation [ 2021 (9) TMI 875 - SUPREME COURT] has already settled the instant issue in assessee s favour and against the department, thereby holding that section 209(1) proviso inserted in the Act vide Finance Act, 2012, carries prospective effect only. We reiterate that the assessment year before us is AY 2008- 09. That being the case, we accept the assessee s sixth substantive ground in very terms.

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• 2025 (4) TMI 793
  Determine the head of additional income as surrendered by the assessee during survey proceedings - assessee is stated to be running a nursing home - additional income was offered to make up for excess cash, construction expenditure and gifts as stated to be made by the assessee - AO rejected the same and assessed additional income u/s 69A which would be taxable at higher rates as specified u/s 115BBE - HELD THAT:- From the computation of income, it clearly emerges that the substantial source of income for the assessee is business income only. The statement as recorded from the assessee during survey has been placed. Upon perusal of replies to Q. Nos.12, 13 and 14, it could be seen that the additional income has been offered over and above the normal business profits only but not out of unknown sources. The usage of additional income, in our considered opinion, is not a relevant factor but it is the source which is relevant factor to determine the head of income. On these facts, the assessee s claim is to be accepted. AO is directed to accept the additional income as normal business income only. Assessee appeal allowed.

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• 2025 (4) TMI 792
  Disallowance of reimbursement of expenses - net of reimbursement accounting adopted by the assessee - difference between the agency charges shown in its profit and loss account and the individual transaction statement (26 AS) showing such receipts - CIT(A) deleted disallowance - HELD THAT:- CIT s order we find is based on concrete finding of uncontroverted facts that the assessee consistently following method of accounting its income net of reimbursement of expenses, that the expenses reimbursed were duly accounted for in its books of accounts in the Ledger account of the clients and TDS deducted on such expenses wherever applicable. CIT(A), we hold, based on these factual findings has rightly recorded the finding of the expenses to have been demonstrated to have been genuinely incurred by the assessee. AO s order disallowing the expenses was based on the finding that the assessee had not demonstrated suitably with evidence the incurrence of such expenses. CIT (A) noted has gone through the complete books of accounts of the assessee, confronted the same to the AO and after seeking the report of the AO on the explanation furnished by the assessee coupled with the documentary evidences filed by way of books of accounts and noting no adverse comments to be made by the AO with respect to the same, has allowed the assessee s claim of reimbursement of expenses. Decided against revenue.

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• 2025 (4) TMI 791
  Penalty imposed u/s 41 of the Black Money - HELD THAT:- Considering the fact that the addition sustained by the CIT(A) have been reduced by the Tribunal in both the cases, the penalty is also required to be computed as per Section 41 of the Black Money (Undisclosed Foreign Income and Assets) and imposition of Tax Act, 2015 in so far as the additions sustained by the Tribunal. Therefore, we direct the AO to re-compute the amount of penalty and pass order accordingly in accordance with law. Penalty proceedings are initiated u/s 43 of the Black Money Act - Assessee has failed to furnish the information of Foreign Income/Assets held by him in the ITR - HELD THAT:- AO has recorded the satisfaction for initiation of penalty proceedings u/s 43 of the Black Money Act only for AY 2012-13 to 2017-18 and no satisfaction has been recorded by the AO for the year under consideration i.e. Assessment Year 2018-19. Considering the fact that no satisfaction has been recorded by the AO in the assessment order for AY 2018-19, the imposition of the penalty for the year under consideration cannot be sustained.

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• 2025 (4) TMI 790
  Non compliance of section 249(4)(b) as the assessee has failed to pay the advance-tax before filing of appeal - CIT(A) conceded that the assessee is a non filer, so section 249(4)(b) of the Act should be complied during filing of appeal - HELD THAT:- We find that the applicability of Section 249(4)(b) of the Act is contingent upon certain conditions, namely: (i) whether the assessee is a non-filer, and (ii) whether the assessee was required to make an advance tax payment at the time of filing the appeal. If advance tax has not been paid, the assessee must satisfy the statutory requirements as prescribed under Section 249(4)(b) of the Act. However, in the present case, the assessee failed to comply with these statutory requirements. Furthermore, the addition was made by the Ld. AO through an ex-parte order. We hold that the provisions of Section 249(4)(b) of the Act are not applicable in the present case. Accordingly, we restore the matter to the file of the Ld. CIT(A) and direct that the appeal be adjudicated on its merits. Needless to say, the assessee shall be afforded a reasonable opportunity of hearing in the set-aside appellate proceedings.

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• 2025 (4) TMI 789
  TDS u/s 194C OR 194H - fixed expenses paid as incentive, as well as commission paid under nomenclature of variable service charges on the bills raised by the CFAs - demand u/s 201(1) 201(1a) for short deduction of TDS - HELD THAT:- No doubt the Assessee, in the consignee and forwarding (CFA) agreement has used the world commission on sales on a monthly basis. CFA had very limited right, just to carry out the work, as per the direction of the Assessee and had no authority to bind the Assessee with the third party directly or indirectly and the Assessee was/is supposed to work as per the direction, desire and welfare of the Assessee only. The role of the CFA is simplest of forwarding agent but not to make any contract with the third party qua goods delivered by the Assessee, either in its own name and/or on behalf of the Assessee. Simply by using any term such as commission as used in the instant case, ipso facto, would not entail raising the demand and/or treating the Assessee in default. As the title of the provision of section 194C of the Act, pertains to payments to contracts or carrying out any work which include carriage of goods or passengers by any mode of transport other than by railways, as defined in the provisions of section 194C of the Act itself. Admittedly, even otherwise, no addition on account of disallowance u/s 40(a)(ia) of the Act has ever been made during the scrutiny proceedings u/s 143(3) of the Act for the A.Ys. 2013-14 to 2018-19 and vide intimation u/s 143(1) of the Act for the A.Y. 2019-20, which also strengthens the case of the Assessee. Thus, we are of the considered view that the Assessee has rightly deducted the TDS u/s 194C of the Act, hence the decision of the authorities below in treating the Assessee in default within the meaning of section 201(1) and 201(1a) of the Act and consequently making the demand is un-sustainable. Decided in favour of assessee.

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• 2025 (4) TMI 788
  Cancelling registration u/s. 12A by referring and relying upon powers u/s. 12AB(4) - No charitable activity - whether PCIT-Central Circle, Pune erred in treating Appellant Trust as a facilitator/conduit in tax evasion pursuit deployed by EMCURE group of companies? - Mechanism provided u/s. 12AB of the Act to cancel the registration granted u/s.12A under the old regime - Power of cancellation is vested with ld. CIT(Exemption) and not with ld. PCIT and secondly no powers are bestowed in section 12AB of the Act for cancellation of registration granted u/s.12A (old regime) - HELD THAT:- We find that firstly in section 12AB of the Act powers are only there to cancel the registration u/s. 12AA and 12AB of the Act but there is no express power to cancel the registration granted u/s. 12A under the old regime. The situation is similar to the one which came before the Hon ble Apex Court in the case of Industrial Infrastructure Development Corporation [ 2018 (2) TMI 1220 - SUPREME COURT ] where the issue was regarding cancellation of registration u/s. 12A under the provisions of section 12AA of the Act and since there was no express power granted u/s. 12AA of the Act to cancel the registration u/s. 12A of the Act, such cancellation order was quashed. Subsequently, there was an amendment brought in by the Finance Act, 2010 thereof giving power u/s. 12AA of the Act to cancel the registration u/s.12A of the Act. However, under the current provisions of section 12AB of the Act there is no express powers provided under the Act to cancel the registration u/s.12A of the Act granted under the old regime. In the impugned orders in the case of all the assessees in appeal before us, ld. PCIT has referred to the specified violation mentioned in section 12AB(4) of the Act which the assessee(s) trusts have been alleged to have been committed based on which the registrations granted u/s.12A/12AA/12AB have been cancelled. However, the word specified violation has been brought into the Act in section 12AB of the Act from 01.04.2022 onwards and is therefore applicable for A.Y. 2022-23 and onwards and therefore in absence of word specified violation prior to 01.04.2022, ld.PCIT erred in invoking section 12AB(4) of the Act in the cases of assessee(s) appeals before us. Cancellation of registration should be only for such years for which specified violation exists. In the case of POGs alleged irregularity relates to A.Y. 2017-18 to 2020-21. As such, no reason exists for disturbance of other years. Similar is the situation for other assessees also wherein also no specified violation committed by the assessee(s) as referred in section 12AB(4) of the Act post 01.04.2022. Admittedly, in case of POGS and MOGS registrations were granted under the old regime u/s. 12A of the Act whereas in case of AOGS registration was granted u/s.12AA of the Act. PCIT grossly erred in cancelling the registration u/s. 12A of the Act from A.Y. 2014-15 onwards till A.Y. 2021-22. Accordingly, the legal issues raised in the additional grounds of appeal in case of POGS and MOGS are allowed and the impugned orders dated 06.03.2023 passed u/s. 12AB(4) of the Act in case of POGS and MOGS are hereby quashed to the extent of cancelling the registration granted to the POGS and MOGS u/s. 12A of the Act. So far as the assessee namely AOGS is concerned since registration has been granted u/s.12AA of the Act, there are powers u/s. 12AB(4) of the Act to cancel the registration u/s. 12AA of the Act also and therefore our finding that registration u/s. 12A of the Act in the old regime cannot be cancelled u/s. 12AB(4) of the Act in absence of express powers, will not be of any help in the case of assessee AOGS. Therefore, the legal issue raised by way of additional ground in the case of AOGS is hereby dismissed. Charitable activity or not? - The purpose of referring the programme details and the messages received by various dignitaries is to appreciate the fact that genuine activities of imparting the education is being carried out by these trusts consistently for past many years. It is only for the reason that one of the Pharmaceutical Company has been searched, based on which the impugned proceedings have been carried out but at no point of time it has been proved that funds received by the assessee(s) trusts have been specifically given to the doctors by way of freebies. What actually is the activity is that for the purpose of imparting education programmes are devised and conferences are organised. Eminent speakers from across the globe/country are invited to give the deliberations and various research activities are also undertaken. Such platform of research activities provided by the conferences/seminars give rise to fostering critical thinking, enhancing learning, promoting innovation, and contributing to societal advancement by providing solutions to problems and improving lives and for carrying out this expenditure has to be incurred for booking the hotels, food, travel expenses and also the expenses relating to staff who are engaged in organizing such activity. The assessee(s) trusts in the instant case are Professional Association of Persons which have been formed to facilitate for imparting of education to the doctors and for providing CPD hours and there is no evidence on record to demonstrate that any funds have been retained by the assessee(s) trusts for its own use. Whatever funds they have received are through banking channels from the Pharmaceutical Companies or the payments have been made directly to the bank of vendors by the Pharmaceutical Company for the expenditure incurred by the assessee(s) trusts. We find that the assessee(s) trusts are genuinely and consistently carrying on the work for the charitable objects for which they have been granted registration u/s.12A(old regime)/12AA/12AB of the Act and the funds they have received from the pharmaceutical companies have been applied for the objects of the trusts. Further, it has been consistently held that denial of exemptions can only be to the extent of violation made by the assessee(s) trusts. In the case of Audyogik Shikshan Mandal [ 2018 (12) TMI 1344 - BOMBAY HIGH COURT ] has held that exemption u/s.11 ought to be denied only to the extent of violative portion. Further, since the assessee(s) trusts are genuinely carrying out the charitable activities, registration granted u/s.12A/12AA/12AB of the Act cannot be cancelled. Only a professional association of persons who have formed the trusts duly approved by Maharashtra Medical Council and duly registered u/s.12A/12AA/12AB and working for the charitable objects and advancement of education and therefore ld.PCIT erred in applying the ratio laid down by the Hon ble Apex Court in the case of M/s. Apex Laboratories Put. Ltd. [ 2022 (2) TMI 1114 - SUPREME COURT ] on the facts of the instant case alleging the assessee(s) trust of committing the specified violation . In view the above, we are of the considered view that on merits of the case, assessee(s) trusts deserve to succeed and accordingly finding of ld.PCIT cancelling the registration of the assessee(s) trusts for the alleged violation provided in section 12AB(4) of the Act is hereby reversed - Assessee appeal allowed.

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• 2025 (4) TMI 787
  Revision u/s 263 - Unexplained sources of cash deposits during the demonetization period - HELD THAT:- After having satisfied with the explanation as furnished by the assessee, AO chose to accept the returned income of the assessee. The Ld. AO had raised a specific query on sources of cash deposits which was duly substantiated by the assessee. Thus, it is a case of acceptance of one of the plausible views which was more on facts and the said view could not be said to be opposed to any law or statutory provisions. AO, in our opinion, had taken one of the plausible views in the matter and therefore, Ld. Pr. CIT could not be said to be justified in substituting the view of Ld. AO with that of his own view. Simply because some further verification was required or simply because the verification was not done in a particular manner, the same could not justify revision of the order unless it was shown that the view of Ld. AO was erroneous or opposed to any law. The Hon ble Supreme Court in Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT] has held that the phrase prejudicial to the interests of the revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the revenue. Where two views are possible and AO has preferred one view against another view, order could not be said to be erroneous or prejudicial to the interest of the revenue. Thus, the impugned revision of assessment order could not be sustained in law. Decided in favour of assessee.

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• 2025 (4) TMI 786
  Disallowance u/s 36(1)(va) - delayed payment of Provident Fund and ESI received from the employees - HELD THAT:- We are inclined to accept the view of the ld. Addl/JCIT(A) that the assessee continues to be governed by the ratio of Checkmate Services P. Limited [ 2022 (10) TMI 617 - SUPREME COURT] and any delay in deposit of employees contribution to PF/ESI beyond the due date as prescribed in those Acts cannot be condoned. Subsequent to the order u/s 143(1), the case was taken up for scrutiny u/s 143(3) and AO in those proceedings has accepted the returned income of the assessee - We observe that while deciding the case of Rohan Korgaonkar [ 2024 (2) TMI 1373 - BOMBAY HIGH COURT] the Bombay High Court, after considering the case of PR Packaging [ 2022 (12) TMI 841 - ITAT MUMBAI] effectively overruled the same, holding that after the decision of the Hon Supreme Court in Checkmate Services(P) Ltd [supra], it is of no relevance whether the disallowance has been made under section 143(3) or under section 143(1). Therefore, in view of the aforesaid, we hold that once the legal position had been made clear in the case of Checkmate Services (P)Ltd (supra) and the disallowance had been indicated by the information in the audit report, the Assessing Officer was well within his rights to make the disallowance, while processing the return under section 143(1)(a). Appeal of the assessee is dismissed.

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• 2025 (4) TMI 785
  Rejecting the application in form 10AD, for approval u/s 80G(5)(iii) - no response to various notices issued by the ld CIT (E), for verification of the genuineness of the activities and fulfilment of all conditions laid down under clause (i) to (v) of the section - Whether order passed by ld. CIT(E) in Form No. 10AD is liable to be set aside on Principle of Natural Justice? HELD THAT:- As notices calling for verification of particulars of the trust was issued on three different dates, in the departmental portal but no notice has been served through the email id of the assessee, or by post and no electronic message has been communicated from the office of the Ld CIT (E) either, which is not as per procedure laid down for service of notice u/s 282 of the Act and it does not tantamount to authentication of notices and other documents as laid down u/s 282A of the Act 61. Moreover, as held in the case of Munjal BCU Centre of Innovation and Entrepreneurship [ 2024 (3) TMI 479 - PUNJAB HARYANA HIGH COURT] where it has been held that service through portal alone is not valid service and service is required to be made as per procedure laid down in section 282 of the Act 61 . As the final opportunity notice issued by the Ld CIT (E) on 24th November, 2022, fixing the date of compliance on 1st December, 2022 (within seven days time frame ) where the assessee has partly responded, was not as per normal SOP where at least fifteen days time should have been allowed for proper compliance. Interest of justice the matter should be remanded back to the Ld CIT (E), for considering the application for approval filed in u/s 80(G)(5) of the Act, on merits of the case (since we have not expressed any opinion on merits), and to proceed as per provisions of law and we also direct the assessee to fully cooperate by filing all necessary documents and particulars as called for vide various notices issued by the Ld CIT (E), for proper disposal of the application . Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (4) TMI 784
  Rejection of the assessee s books of accounts - increase of sales to invoke the provisions of section 68 - As per DR nature of manufacturing and trading business of the assessee is not such that due to demonetization the customers would have purchased more of the stock - assessee is a manufacturer of tobacco products and also is in the trading business of perfumery - HELD THAT:- When the assessee had given details of the parties from whom purchases were made and the details of sundry debtors was given, the relevant statutory returns to the VAT and Service Tax authorities were filed, when the assessee had made available all the stock registers as maintained, then, by alleging that the stocks does not depict item-wise, day-wise inventory and on that basis alone to discredit the books of account is not justified. The assessee had furnished the audited books of account which included trading and profit loss Accounts. Pertinent to mention is that assessee had manufacturing and trading units a various places and their separate accounting was part of the audited financial. The opening stock, sales and closing stocks have been duly disclosed, which has been accepted in audit. No deficiency or inaccuracy in the inventories is cited by the ld. AO. Thus, without even going through the audited financial and raising queries on the basis of any inaccuracy and infirmity found in the audit report, the rejection of books of account is not sustainable. There seems to have been no inquiry on the part of the ld. AO with regard to the transactions which were reported in the audited books of account. So much so that the assessee s justification for the overall fall in GP rate by providing segment wise trading result for manufacturing and trading activity was accepted. AO has failed to appreciate that in demonetization period there was every possibility of increase in sales as the assessee was a manufacturer and dealer of products which have high consumption, through may be the most exhaustive retailers. There was every possibility that retailers dealing with the nature of products, the assessee was manufacturing and trading, may have increased their own stocks and without making any effort to examine and verify the sales as reported to identifiable parties the ld. AO has considered the sales to be suspicious. In any case, the rejection of books of account only qua a particular entry of cash deposits during the demonetization period is not justified while the other components of trading results and profit margins as reported have been accepted. There was inherent arbitrariness and adhocism in the conclusion of ld. AO by arriving at a figure of Rs. 1,02,59,935 as possible genuine cash sales out of total cash sales of Rs. 3,23,51,657/- during demonitisation as reported by the assessee. CIT(A) has merely endorsed the observations of ld. AO, without appreciating any of the submission of the assessee and for the aforesaid reasons we are inclined to sustain the grounds. Consequently, the appeal of the assessee is allowed and the impugned addition is directed to be deleted. Decided in favour of assessee.

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• 2025 (4) TMI 783
  Disallowance of inter branch purchase as bogus purchase - as contended that there was separate VAT/GST number for the main office and the branch office - as contended that out of the total branch transfer, amount Partly as related to pre-GST period, i.e. from 01.04.2017 to 30.06.2017 and the balance pertained to GST period - HELD THAT:- A bare perusal of the impugned order shows that the CIT(A) has accepted the Remand Report and has deleted the disallowances made on account of bogus purchases; both inter-branch and other parties, and unexplained expenditure added under Section 69C. Once the AO has accepted the claim of the assessee after due verification of the documents produced, it is difficult to see as to how the Revenue can challenge the same on the spacious ground that the learned CIT(A) was in error in accepting and placing reliance on the Remand Report. The issue is no longer res integra. In Jivatlal Purtapshi [ 1967 (2) TMI 8 - BOMBAY HIGH COURT ] before the Bombay High Court, the ITO had made addition to the returned income of the assessee as part of branch profits arising from its branch. While the appeal against the addition was pending, the ITO considered and agreed to delete the said addition. On the basis of the said concession, the AAC (the appellate authority) deleted the addition, which was challenged before the Tribunal. The High Court, inter alia, held that in the circumstances the Department could not be treated as being aggrieved by that part of the order which was based on concession. CIT(A) rightly allowed the grounds deleting the disallowance/additions made placing reliance on the Remand Report. Thus, the appeal is without any merit. Admissibility of Cross Objection - Cross Objection is not expected to be filed only to support the order or to contend that the appeal is not maintainable. Such a plea about non-maintainability can be a part of the submissions/arguments opposing the appeal. Filing of the Cross Objection presupposes that the respondent/cross objector is aggrieved by a part of the order passed by the CIT(A), which is subject matter of challenge in the appeal, which is not the case in this appeal. In this case, there was no occasion for the respondent-assessee to file a Cross Objection.

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• 2025 (4) TMI 782
  Short deduction of TDS - demand raised by the AO u/s.201 - TDS u/s 194IA or 195 - HELD THAT:- There should not be any dispute that the concession/benefit given in the first proviso to section 201(1) of the Act will be available to the assessee only if the conditions mentioned therein are satisfied. In the instant case, the assessee did not file all the relevant document before the AO in order to demonstrate that he has complied with all the conditions prescribed in the first proviso to sec.201(1) of the Act. According to the Ld A.R, the details relating to income tax return filed by the seller were produced before the CIT(A) and the Accountant s certificate is also readily available. Accordingly, in the interest of natural justice, we are of the view that the assessee may be provided with one more opportunity to present his case properly before the AO. Accordingly, we set aside the order passed by the Ld.CIT(A) and restore all the issues relating to demand u/s. 201(1)/201(1A) of the Act of the Act to the file of the AO for examination. Appeal filed by the assessee is treated as allowed for statistical purposes.

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• 2025 (4) TMI 781
  Reopening of assessment - reason to believe or suspect - borrowed satisfaction - addition made by the AO u/s. 68 treating the sale of shares by the assessee as bogus - HELD THAT:- A perusal of the reasons recorded for reopening of the assessment would reveal that in this case, the only information received by the AO was that the assessee company was beneficiary of accommodation entry through layering of bank transactions in the Financial Year 2010-11. This information is a vague information. The AO did not co-relate and verify this information from the accounts of the assessee. There is no mention in the said reasons recorded as to from whom, assessee had received the aforesaid amount of Rs. 50,00,000/-. What was the nature of the transaction and as to whether the assessee had received the aforesaid sum of Rs. 50,00,000/- as share application money or as loan or on account of sale of penny stocks. There is no name mentioned of the parties, who allegedly passed on the amount in question to the assessee. The aforesaid information, therefore, was not sufficient to form the belief that the income of the assessee has escaped assessment without co-relating the same with the accounts of the assessee or without verifying the correctness of the said information from any other sources. The reasons to believe of the AO in this case, were based on borrowed satisfaction of the Investigation Wing without application of mind. The powers of Assessing Officer to reopen an assessment, though wide, are not plenary. The words of the statute are reason to believe and not reason to suspect . The entire law as to what would constitute reason to believe has been summed up by the hon ble Supreme Court in the case of Income Tax Officer v Lakhmani Mewaldas [ 1976 (3) TMI 1 - SUPREME COURT] . The reasons pointed out by the AO cannot be said to be the reasons to form the belief that income of the assessee had escaped assessment. Therefore, the reopening of assessment was bad in law and consequential assessment order is not sustainable and the same is accordingly quashed. Decided in favour of assessee.

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• 2025 (4) TMI 780
  Addition u/s 68 - bogus share transaction - Long Term Capital Gains (LTCG)/ Short Term Capital Loss (STCL) qua trading in the identified scrips - HELD THAT:- Commissioner thoroughly examined the case of the Assessee and also taken into consideration the peculiar facts and circumstances that the Assessee has duly supported its transactions by filing the relevant documents such as copies of contract notes, D-mat statement, bank statements evidencing the transactions and prima-facie discharged onus cast upon him Commissioner also taken into consideration the fact that the Assessee has not claimed any LTCG/STCG but in fact purchases and sales have been shown part of profit and loss account, meaning thereby the addition in our considered view, on this aspect itself is un-sustainable. Therefore, we are of the considered view that the Ld. Commissioner righty deleted the addition made by the AO. Appeal filed by the Revenue Department stands dismissed.

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• 2025 (4) TMI 779
  Deduction u/s 80P - assessee is a co-operative society engaged in the business of banking and providing credit facilities to its members and earning interest income and income from other sources - HELD THAT:- Before the CIT(A) in the present proceedings the assessee made exhaustive submission on the legal point and strongly relied upon the judgment in case of Mavilayi Service Co-operative Bank Ltd. [ 2021 (1) TMI 488 - SUPREME COURT] . However, the CIT(A) has failed to appreciate that in the case of Mavilayi Service Co-operative Bank Ltd.(supra), ultimately the Hon ble Supreme Court had restored the matters to the file of the A.O. for verifying as to whether the co-operative banks have dealt with the members or the outsiders. The Hon ble Apex Court has held that the deductions to the petitioners would be allowed after verification by the Assessing Officer. Be that as it may, we deem it fit to restore the issue of deduction u/s.80P once again to the file of the A.O. for examining afresh and also direct the assessee to produce all the relevant material in order to establish its claim of deduction u/s.80P of the Income-tax Act. The assessee has to provide all the details vis- -vis income earned from its members and other income also. Appeals filed by the assessee are allowed for statistical purposes.

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• 2025 (4) TMI 778
  Unexplained cash credit u/s.68 - addition invoking provisions of section 115BBE of the Act - HELD THAT:- The reasons for not accepting the claim is that assessee had withdrawn very small amounts which could not justify accumulation of such huge cash in hand. Such outright rejection is not proper because the opening cash balance for AY.2014-15 and 2015-16 are duly supported by the returns filed by the assessee to the Department. In absence of any evidence to the contrary that the said cash balance was invested or spent for some other purpose, availability of cash in the hands of the assessee cannot be rejected. Assessee has given copy of the bank account statement for the period 01.04.2015 to 31.03.2017, which reveals that assessee had also withdrawn Rs.1,00,000/- in cash on 17.06.2016. Therefore, the claim of the assessee that the deposit was made out of opening cash balance and cash withdrawal is supported by the ITRs and other documentary evidences furnished by the assessee.The Co-ordinate Bench of ITAT, Surat in case of Nileshkumar Maganlal Shah [ 2024 (2) TMI 832 - ITAT SURAT ] after relying on various decisions, deleted the addition made by the AO. Levy of tax u/s 115BBE - We have already deleted the addition made by AO u/s 68 of the Act. Hence, question of applying rate u/s 115BBE of the Act does not arise.

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• 2025 (4) TMI 745
  Addition u/s 50C - difference of sale consideration as per Jantri Rate and actual sale deed - whether the full value of consideration should be adopted? - HELD THAT:- The Act provided consideration of date of agreement for determination of stamp duty value and compared to the value of the SRO as on the date of registration. However, the Act also laid down a condition that these provisions will apply in cases only in which where the part of the consideration has been received by account payee cheque. It is clear that the assessee has received payments by cheques even before the effective date of new Jantri rate i.e. 01.04.2011. Hence, the assessee is saved by the provision to Section 50C(1) of the Act. Appeal of the assessee is allowed.

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• 2025 (4) TMI 744
  Unexplained cash credit u/s 68 and taxable u/s 115BBE - Bogus share transactions - treating the sale proceeds of shares as unexplained cash credit - HELD THAT:- Assessee held the shares for around 17 months and sold the same through banking channel and it is a fact that no action has ever been taken by the SEBI or any Investigation Agency against the Assessee herein and it is a fact that the Assessee has produced the relevant documents such as purchase bills of shares, bank account statement, DP statement and some broker notes in order to establish his claim of LTCG. This fact is duly admitted by the AO in assessment order itself. Therefore, in our considered opinion, the Assessee has discharged its prima-facie onus cast u/s 68. AO had no base or foundation/corroboration to make the addition in the hands of the Assessee. AO simply relied on the investigation report of the Kolkata Directorate and the SEBI report and usual rise in the price, in which the Assessee has not played any role and therefore it goes to show that the AO made the additions under consideration simply on the conjecture and surmises, which at all are not sustainable, as per the decision of Ziauddin A Siddique [ 2022 (3) TMI 1437 - BOMBAY HIGH COURT] Hon ble Gujarat High Court in Divyaben Prafulchandra Parmar [ 2024 (1) TMI 800 - GUJARAT HIGH COURT] has also dealt with same scrip i.e. M/s. Sunrise Asian Limited as involved in this case and ultimately affirmed the decision of the Hon ble Tribunal in deletion of the identical addition. Assessee purchased the share through banking channel and held the same for around 17 months and sold the same through online platform and banking channel. The Assessee by filling relevant documents such as purchase bills of shares, bank account statement, DP statement and some broker notes in order to establish his claim of LTCG, has discharged prima-facie onus cast u/s 68. AO had no base or foundation/corroboration to make the addition in the hands of the Assessee but he simply relied on the investigation report of the Kolkata Directorate and the SEBI report and usual rise in the price, in which the Assessee has not played any role and it is a fact that no action has ever been taken by the SEBI or any investigation agency against the Assessee herein and therefore it goes to show that the AO made the additions under consideration simply - Appeal filed by the Assessee is allowed.

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• 2025 (4) TMI 743
  Revision u/s 263 by CIT - high closing stock, payment to land owners and source of advance - Allowability of business promotion expenses , travelling and conveyance and new papers and periodicals - HELD THAT:- As original assessment order dated 09/07/2019, the impugned order and the legal provisions in this regard and we are of the opinion that in the present case, all necessary enquiries were made by the AO not only as mentioned in the assessment order, during this year, but in earlier years also. Thus, the setting aside of the assessment order dated 09/07/2019 by the PCIT, Dhanbad amounts to revisit of the same issues which is not permissible as has been decided in plethora of cases including the Hon ble Apex Court. Thus, the order passed under Section 263 of the Act by the ld. PCIT, is hereby, cancelled.

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• 2025 (4) TMI 742
  Reopening of assessment u/s 147 - addition made in violation of the provisions of section 149(1)(b) - bogus LTCG - HELD THAT:- As we found that the assessment order was passed on the basis of surmises and without any documentary evidences to prove that the assessee ever transacted in the shares of Vas Infrastructure Ltd or earned any LTCG. Moreover, the reassessment proceedings were initiated in violation of the provisions of section 149(1)(b) of the act, therefore Ld, CIT(A) rightly deleted the additions. No new documents or evidences have been brought on record by Ld. DR to controvert or rebut the findings so recorded by Ld. CIT(A). Decided against revenue.

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• 2025 (4) TMI 741
  Additions u/s 36(1)(va) on account of late deposit of EPF - HELD THAT:- It is material fact that employee s provident fund of Rs.8,37,196/- for the month of May, 2021 could not be deposited in due time on 15/06/2021 and was deposited on the very next day i.e 16/06/2021 by the assesse due to technical glitches in EPF portal. As per ratio of Judgment in FIL India Business Research Services (P.) Ltd. v.[ 2023 (9) TMI 906 - ITAT DELHI] it is well settled that when the assessee had deposited the employees dues before the prescribed due dates but due to the glitches at the end of the respective authorities, the amounts were reversed by the bank, then the assessee cannot be penalized with the addition on account of delayed deposits. Therefore, impugned orders are set aside. Appeal filed by the assesse is allowed.

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• Benami Property

• 2025 (4) TMI 777
  Benami Property Transactions - provisional attachment - determination of the transaction s nature - HELD THAT:- It is not disputed that M/s RK Emporium is not a shell company. The absence of Benamidars and the non-representation of them in the proceedings cannot lead to presumption of them being shell companies. Receiving payment two months in advance from M/s KS Traders who have a valid PAN ID, particularly when no transaction has ever happened between M/s KS Traders and M/s RK Emporium, is a possibility which cannot be ruled out in the realm of trading business. Appellant has shown that in order to make supplies to M/s KS Traders it had to procure in turn from its suppliers which have been identified by the Appellant. The investigation has failed to explain the existence of bilties and the account details of the transporter. Receipt of bank credit within three days of initiation of demonetization is a suspicious circumstance and therefore causing of investigation was warranted. However, the ensuing investigation failed to bring out evidence which would make the explanation of the Beneficial Owner as cooked up story. We find that the Impugned Order has failed to bring out that the impugned transaction is benami within the import of Section 2(9)(A) of PBPTA. We therefore set aside the Impugned Order and the confirmation as well as the Provisional Attachment of the impugned property of Rs.1,12,00,000/- (Rupees One Crore and Twelve Lakhs Only) deposited in the bank account of the Appellant maintained with Kotak Mahindra Bank Ltd., Ludhiana. The Appeal is accordingly allowed.

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• Customs

• 2025 (4) TMI 776
  Levy of penalties u/s 114(iii) and Section 114AA of the Customs Act, 1962 - due diligence was not done by the CHA in both the cases before filing the export documents with customs as they did not verify existence of the exporter at the given address - failure to fulfill its obligations under the Customs Broker License Regulations, 2018, specifically under Regulation 10(d) and 10(n) of the Customs Broker License Regulations, 2018 - HELD THAT:- The department has not recorded the statement of the appellant in either of the case and made allegations without substantiating them. Neither the show cause notices nor the orders of the lower authorities bring out as to how appellant has abetted in wrong doings of the exporter to justify imposition of penalty on him under Section 114(iii) and submitted false and incorrect material for imposing penalty under Section 114AA of the Customs Act, 1962. The SCNs invoke Regulation 13(d) and (n) of CHA Licensing Regulations, 2013 but as the matter pertains to 2020, Customs Broker License Regulation, 2018 should have been invoked. In the case of Bansal Fine Foods Pvt. Ltd. Vs. Commissioner of Customs, Mundra [ 2022 (7) TMI 372 - CESTAT AHMEDABAD] , this Tribunal has held that CHA who filed shipping bills as per documents provided by Indian exporter is not liable to penalty under section 114 and 114AA of Customs Act, 1962 when export consignment was rerouted to another country but ultimately delivered to original consignee. Thus, it is clear that penalty on the CHA under the Customs Act can be imposed only if some positive Act of his involvement in fraudulent import/export is found with credible evidence. If there is failure on his part to fulfill the obligation cast upon him under CBLR, 2018, appropriate action needs to be taken under those regulations. As discussed, the department has not adduced any evidence in both the cases showing abetment by the CHA in alleged fraudulent activity of the exporter. They have also not brought forward any evidence to show that the CHA has used false and incorrect material in the cases. What has come out, is that the CHA has received KYC documents, export invoices, packing lists, etc. of the exporter through some other agency and filed the shipping bills with the Customs. Conclusion - The department has not brought out anything in either of the cases to sustain its allegation against the appellant. It is further found that the penalty has been imposed on the appellant without credible evidence and therefore, it is held as unsustainable. Appeal allowed.

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• Insolvency & Bankruptcy

• 2025 (4) TMI 775
  Seeking stay of proceedings initiated against the Appellants/Petitioners Under Section 138 read with Section 141 of the N.I. Act, 1881, in view of the interim moratorium Under Section 96 IBC having come into effect upon the Appellants/Petitioners filing applications Under Section 94 IBC - HELD THAT:- Vide order in Rakesh Bhanot v. M/s. Gurdas Agro Pvt. Ltd., this Court granted an order of stay of further proceedings in COMA No. 1059 of 2019. Following the same, an order of interim stay of further proceedings pending before the trial Court was subsequently granted in all other connected matters as well. The term Corporate Person includes a company as defined Under Section 2(20) of the Companies Act, 2013, and a Limited Liability Partnership. However, there is a subtle difference in the protection available to the Directors and the Partners. In case of a partnership firm, the interim moratorium protects not only the firm, but also the partners. But in case of a company, such protection is available only to the company and not to its directors. That apart, the object of interim moratorium can be no different from that of the moratorium specified Under Section 14. It is also clear from Section 14 that the protection from legal action during the period of moratorium is not available to the surety or in other words, to a personal guarantor. The use of the words all the debts and in respect of any debt in Sub-section (1) of Section 96 is not without a purpose, as the moratorium is intended to offer protection only against civil claim to recover the debt. Hence, such period of moratorium prescribed Under Section 14 or 96 is restricted in its applicability only to protection against civil claims which are directed towards recovery and not from criminal action. Admittedly, the Appellants/Petitioners are facing trial for the offence Under Section 138/141 of the N.I. Act, 1881, at the instance of the Respondents/complainants. While so, they initiated the personal insolvency proceedings under the IBC and sought exemption from the Section 138 proceedings before the trial Court, referring to interim moratorium provided Under Section 96 IBC. It is to be noted that upon the application being admitted, the moratorium provisions under the IBC offer protection only to the corporate debtor, i.e., the company, and do not extend protection against civil liability to personal guarantors by specific exclusion or to any individual who is prosecuted for committing a criminal act. The purpose of interim moratorium contemplated Under Section 96 is to be derived from the object of the act, which is not to stall the proceedings unrelated to the recovery of the debt. The protection is not available against penal actions, the object of which is to not recover any debt. This moratorium serves as a critical mechanism, allowing the debtor to reorganize their financial affairs without the immediate threat of creditor actions. The clear and unequivocal language of this provision reflects the legislative intent to provide a protective shield for debtors during the insolvency process - The cause of action for prosecution Under Section 138 of NI Act commences on the dishonor of the cheque and the failure to pay the amount unpaid because of dishonour, within 15 days from the date of receipt of notice demanding payment. It is pertinent to mention here that the prosecution can be only with respect to the amount unpaid by dishonour of the cheque irrespective of the actual debt. The distinction between the right to sue based on a dishonoured cheque by initiating a civil suit and launching a prosecution Under Section 138 of the Negotiable Instruments Act is significant. In case of former, the interim moratorium can operate, but not in case of later. Conclusion - The object of moratorium or for that purpose, the provision enabling the debtor to approach the Tribunal Under Section 94 is not to stall the criminal prosecution, but to only postpone any civil actions to recover any debt. The deterrent effect of Section 138 is critical to maintain the trust in the use of negotiable instruments like cheques in business dealings. Criminal liability for dishonoring cheques ensures that individuals who engage in commercial transactions are held accountable for their actions, however subject to satisfaction of other conditions in the N.I. Act, 1881. Therefore, allowing the respective Appellants/Petitioners to evade prosecution Under Section 138 by invoking the moratorium would undermine the very purpose of the N.I. Act, 1881, which is to preserve the integrity and credibility of commercial transactions and the personal responsibility persists, regardless of the insolvency proceedings and its outcome. The prayer of the Appellants/Petitioners to stay the prosecution Under Section 138 of the N.I. Act, 1881, relying on the interim moratorium Under Section 96 IBC, cannot be entertained - Petition dismissed.

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• Service Tax

• 2025 (4) TMI 774
  Eligibility to file a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - appeal before the Supreme Court did not arise from a show cause notice or demand of duty - HELD THAT:- This Court in QUEST RETAIL PRIVATE LIMITED VERSUS PRINCIPAL COMMISSIONER CGST AND ANOTHER [ 2023 (2) TMI 1397 - PUNJAB AND HARYANA HIGH COURT] relying upon the judgment of the Bombay High Court in the case of Nilkamal Limited and Ors v/s Union of India and Ors [ 2022 (11) TMI 1008 - BOMBAY HIGH COURT] , set aside the impugned order and remanded the matter back to the designated Committee to pass a fresh order as per the clarificatory circular and judgment passed by Bombay High Court in Nilkamal Limited and Ors. The impugned order dated 27.12.2019 is set aside. The matter is remanded back to the designated Committee to pass a fresh order as per the clarificatory circular - petition disposed off by way of remand.

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• 2025 (4) TMI 773
  Demand of service tax from the respondent/assessee under the category Site Formation Services and Construction of Industrial and Commercial Services for the period from 16.6.2005 to 31.3.2008 - Invocation of extended period of limitation - HELD THAT:- The learned tribunal examined the facts of the case and found that the contract is clearly a comprehensive contract for the purposes mentioned above and the activity done by the assessee is in relation to commissioning of coal and not for site formation. The learned tribunal also referred to two decisions of the Co-ordinate Bench of the learned tribunal. Reference has been made to the decision of the Hon ble Supreme Court in the case of Larsen Toubro Ltd. [ 2015 (8) TMI 749 - SUPREME COURT ] wherein the Hon ble Supreme Court held finding that Section 67 of the Finance Act, which speaks of gross amount charged , only speaks of the gross amount charged for service provided and not the gross amount of the works contract as a whole from which various deductions have to be made to arrive at the service element in the said contract. We find therefore that this judgment is wholly incorrect In its conclusion that the Finance Act, 1994 contains both the charge and machinery for levy and assessment of service tax on indivisible works contracts. The tribunal accepted the case of the assessee and held that no service tax is payable and the question of imposing penalty also does not arise. Extended period of limitation - HELD THAT:- The department is required to show that there was omission and failure and suppression of material fact with an intent to evade payment of service tax. This having not been clearly spelt out in the show-cause notice, the case of the department cannot be improved at the stage of adjudication, nor has it been done so in the instant case. Therefore, this is a case where the extended period of limitation could not have been invoked by the department. Conclusion - i) The composite contracts should not be artificially bifurcated for service tax purposes. ii) No service tax was payable for mining-related services prior to 01.06.2007, as clarified by the circular and legislative amendments. iii) The extended period of limitation could not be invoked without clear evidence of intent to evade tax, which was not present in this case. Appeal dismissed.

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• 2025 (4) TMI 772
  Levy of service tax - Sale of Space and Time for Advertisement - amounts received from sponsorship agreements for boxes and stands in the stadium constitute a taxable service or not - HELD THAT:- The issue stands already decided in the appellant s favour in the appellant s own matter by two earlier decisions of this Tribunal on which the Appellant has placed reliance. Relevant portions of this Tribunal s decision in the case M/S. TAMILNADU CRICKET ASSOCIATION VERSUS THE COMMISSIONER OF CGST CENTRAL EXCISE CHENNAI NORTH COMMISSIONERATE [ 2024 (4) TMI 471 - CESTAT CHENNAI] , where it was held that the amount received as per sponsorship agreements for boxes and stands are not leviable to tax under Sale of Space for Advertisement and requires to be set aside. The facts of this case are no different and a perusal of the sponsorship agreement as available in the appeal records reveal that the terms therein too are similar to that in the decision reproduced above. There is no need to multiply the authorities except to point out that the decisions cited by the counsel for the appellant all attest to similar line of reasoning. Conclusion - The sponsorship services related to sports events are not taxable under the Sale of Space and Time for Advertisement category, as they do not involve the sale of advertisement space but rather the granting of sponsorship rights. The impugned order is set aside - appeal allowed.

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• 2025 (4) TMI 771
  Classification of services - management, maintenance or repair service and manpower recruitment or supply agency service or not - liability to pay Service Tax for the period from October 2004 to December 2007 - HELD THAT:- The appellant has used materials such as cement, barbed wire, structural steel, etc., while rendering the service. Thus, it is evident that the appellant has utilized materials in the provision of the service of filling of ash at different low lying areas and widening of MGR track of railways. The services rendered along with materials are appropriately classifiable under the category of works contract service as held by the Hon ble Supreme Court in the case of Commissioner of Central Excise and Customs, Kerala v. M/s. Larsen Toubro Ltd. [ 2015 (8) TMI 749 - SUPREME COURT ]. In these circumstances, the impugned demand pertaining to the period prior to the introduction of works contract service , is not sustainable. The appellant had hired manpower for rendering the service to themselves. The service rendered by them is thus not liable to be categorized under the category of manpower recruitment or supply agency service as manpower has not been recruited to M/s. NTPC. Thus, the classification of the said service under the category of manpower recruitment or supply agency service to demand Service Tax in the impugned order, is not legally sustainable. Since the demand itself is not sustainable, the question of demanding interest or imposing penalties does not arise. Conclusion - The services rendered along with materials are appropriately classifiable under the category of works contract service . Appeal allowed.

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• 2025 (4) TMI 770
  Classification of service - services of screening and grading of iron ore provided by the appellant - Business Auxiliary Service (BAS) or Mining Services - suppression of facts or not - extended period of limitation - HELD THAT:- In view of Board clarification vide letter dated 28.02.2007, the services undertaken by the appellant are rightly classifiable under mining services . Moreover, as rightly claimed by the appellant and relied upon by him with regard to definition of mining operations as per the MMDRA Act, 1957 and the decision by the Supreme Court in the case of Bharat Cocking Coal Vs. State of Bihar [ 1990 (8) TMI 394 - SUPREME COURT] wherein it is held that any ancillary process carried down for the preparation of minerals is a mining activity and hence, rightly classifiable under the newly introduced service mining services. The Tribunal in the case of [ 2008 (5) TMI 248 - CESTAT BANGALORE] in similar set of facts observed that Once it is established that the activity of the appellant is mining,, it cannot be taxed under the Business Auxiliary Service for the period prior to 1-6-2007. Even when we examine the definition of business auxiliary service, it is seen that production which does not amount to manufacture comes under business auxiliary service. Conclusion - The services rendered by the appellant is nothing but a mining service and rightly classifiable under mining services with effect from 01.06.2007. It is also a fact that Revenue has being collecting the service tax under this category from 01.06.2007 onwards. Appeal allowed.

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• 2025 (4) TMI 769
  Denial of rebate claim - applicability of time limitation - HELD THAT:- Though the issue raised by the lower authorities were disputed at the time of issuing impugned order, all the issues are settled over a period of time as rightly claimed by the counsel - the appellant is entitled for the claim for rebate of Service Tax as per Notification No.12/2005-ST dated 19.04.2005 for the period from July 2007 to September 2007. Conclusion - The appellant was entitled to the rebate claim for Service Tax for the period from July 2007 to September 2007, as per N/N.12/2005-ST dated 19.04.2005. Appeal allowed.

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• 2025 (4) TMI 768
  Levy of service tax - Business Auxiliary Services (BAS) - target-oriented incentives received by the Appellant - benefit of cum tax. Target oriented incentives - HELD THAT:- The issue is no more res integra as the issue is settled by the Tribunal in the matter of M/s. Roshan Motors Ltd vs. CC, Dehradun [ 2020 (12) TMI 1014 - CESTAT NEW DELHI] , wherein it is held that the dealers and manufacturers work on principal to principal basis and it was further held that sale promotion activities are undertaken by the dealer is for mutual business of a dealer and manufacturer. Accordingly CESTAT, New Delhi held that such incentives cannot be treated as consideration for any service. The dealing is on principal to principal basis only. Service Tax on commission received from financial institutions - HELD THAT:- Since the Respondent accepted the Tax liability on cum-tax value of the commission received from financial institutions and paid with interest before issue of the show-cause notice, the said amount is sufficient to meet the demand against the appellant. The demand confirmed by the adjudicating authority against the commission received by the appellant from financial institution for extending financial assistance to the extent of Rs.6,84,254/- and interest of Rs.39,695/- on cum-duty basis is upheld. Remaining demands against appellant and penalty imposed by the adjudicating authority are set aside. Conclusion - The target-oriented incentives do not constitute consideration under BAS when the dealer-manufacturer relationship is on a principal-to-principal basis. Appeal allowed in part.

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• 2025 (4) TMI 767
  Failure to discharge appropriate Service Tax on Banking and Financial Services - whether the appellants are required to discharge service tax on different services rendered by them to their Members? - HELD THAT:- It is not in dispute that the appellant is registered under Karnataka Cooperative Society Act, 1959 and the Membership is restricted to the persons staying within the territorial limit of Dakshina Karnataka including villages of the district and all the taluks of the Udupi district. Also, it is not in dispute that appellant being a cooperative society registered under the Karnataka Cooperative Society Act, 1959. In the impugned orders, the lower authorities considering the appellant being a commercial concern ignoring the principles of mutuality of interest held that the services rendered by the appellant to its Members are taxable under the category of Banking and other Financial Service . From the records and the bye-laws placed by the appellant, it is found that various services of advances, loan, etc., provided by the appellant to its Members exclusively and the services are limited to Members only. In these circumstances being a registered cooperative society, the principle laid down by the Hon ble Supreme Court in the case of State of West Bengal vs. Calcutta Club Ltd. s case [ 2019 (10) TMI 160 - SUPREME COURT] is squarely applicable. Conclusion - The incorporated cooperative societies operating on mutuality principles are not liable for service tax on services provided to their members. Appeal allowed.

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• 2025 (4) TMI 766
  Failure to discharge appropriate Service Tax on Banking and Financial Services - whether the appellants are required to discharge service tax on different services rendered by them to their Members? - HELD THAT:- It is not in dispute that the appellant is registered under Karnataka Cooperative Society Act, 1959 and the Membership is restricted to the persons staying within the territorial limit of Dakshina Karnataka including villages of the district and all the taluks of the Udupi district. Also, it is not in dispute that appellant being a cooperative society registered under the Karnataka Cooperative Society Act, 1959. In the impugned orders, the lower authorities considering the appellant being a commercial concern ignoring the principles of mutuality of interest held that the services rendered by the appellant to its Members are taxable under the category of Banking and other Financial Service . From the records and the bye-laws placed by the appellant, it is found that various services of advances, loan, etc., provided by the appellant to its Members exclusively and the services are limited to Members only. In these circumstances being a registered cooperative society, the principle laid down by the Hon ble Supreme Court in the case of State of West Bengal vs. Calcutta Club Ltd. s case [ 2019 (10) TMI 160 - SUPREME COURT] is squarely applicable. Conclusion - The incorporated cooperative societies operating on mutuality principles are not liable for service tax on services provided to their members. Appeal allowed.

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• 2025 (4) TMI 765
  Exemption from service tax - Classification of services provided by M/s Chinki Construction Private Limited as a sub-contractor - commercial and industrial services or not - HELD THAT:- The scope of work in as many as 4 of the LOA s relate to construction of the infrastructure for the power station while one relates to provisioning of the residences for the employees of BSEB. None of these can certainly be said to be concerned with construction, falling within the ambit of any commercial activity. BSEB being a 100% subsidiary of the Government of Bihar, falls well within the scope of a government body and hence would lie within the ambit of clarification issued vide the said circular 80/10/2004-ST dated 17.09.2004, to suggest and indicate it as of non-commercial in nature and thereby not leviable to tax. Further, vide its circular no.147/16/2001 dated 21.10.2011, issued by the CBEC in the context of commercial construction/infrastructure development projects of roads, airports, dams, tunnels etc., regarding levy of Service Tax on various service providers engaged/associated with such construction work, it is clarified that the service provided by the sub-contractor to the main contractor under works contract service would be eligible to avail the exemption as available to the main contractor providing Works Contract Service, in relation to the said projects. The Revenue has made the allegations, merely by combining different services, viz., construction services (commercial or industrial) as defined under Section 65(25b), construction of residential complex service as defined under section 65(105)(zzzh) read with 65(30a) and site formation services as defined u/s 65(105)(zzza) read with Sec.65(97a) of the Finance Act, 1994, without recording transaction made in each taxable services and without calculating value, tax on individual categories of services separately in distinguishable manner of applicability of classification as mandated in law before 30.06.2012, i.e., before introduction of Negative List . It appears that the revenue has simply overlooked the various legal provisions, relatable to execution of a works contract and clarifications as issued by way of circulars referred in earlier paras, have resorted to this sort of an exercise, merely for the sake of issuing the demand note. Therefore, the impugned order is no more than being based on mere surmise and conjecture. The jobs undertaken by the appellant, were in connection with or in the category of or a part of the work undertaken by them in construction of the residential complex. It cannot be considered as a job separately for site levelling and slope protection work. The construction of the boundary wall, security room and levelling of the premises is part and parcel of the work, construction of residential complex at the sub-stations of Bihar Electricity Board. Conclusion - The services provided by the appellant were non-commercial and related to government infrastructure projects, thus exempt from service tax. There are no merit in the order appealed, being not in accordance with law - appeal allowed.

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• 2025 (4) TMI 764
  Taxability - provision of service - whether the consideration received by the appellant for the Technology Assistance provided by their Research Center, from one of its Divisions can be considered as provision of service? - consideration received from M/s. Fosroc International Limited (FIL) to the appellant is liable for payment of service tax or the transaction can be considered as export of service or not - HELD THAT:- On going through the evidence produced by the appellant and as per the evidence available on record it is an admitted fact that the Forsoc Technology Center (FTC) is a part and parcel of the appellant only. Moreover, the amount spent by the appellant for R D activities of Forsoc Technology Center (FTC) cannot form part of taxable value of the service in question said to have been paid to the holding company. The MOU between the appellant and the foreign company M/s. Fosroc International, Ltd., also clearly shows that the Forsoc Technology Center (FTC) is part of the appellant and hence the demand for the period from April 2010 to March 2012 was set aside by the Appellate Authority and once the department accepted the finding in the above order, considering the rule of consistency, service tax is not payable for the subsequent periods, which are the impugned orders in the present 7(seven) appeals filed by the appellant. Fact being so, the impugned orders are not sustainable and need to be set aside. Conclusion - The amount spent by the appellant for R D activities of Forsoc Technology Center (FTC) cannot form part of taxable value of the service in question said to have been paid to the holding company. Appeal allowed.

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• 2025 (4) TMI 763
  Levy of service tax - amounts received by the appellant as reimbursement towards advertisements can be considered as consideration for sales promotion activities done by the assessee for Maruthi Suzuki India Ltd. (MSIL) - invocation of extended period of limitation - HELD THAT:- From the facts, it is evident that there is no service provided by the appellant and there is no consideration received for rendering any service as alleged. If, MSIL reimburses the amount, which is attributed to their share of joint advertising for promotion of the business, same cannot be considered as service done by Appellant to demand service tax. The service is provided by third party and they are liable to make payment for such services. Invoking the extended period of limitation - penalty - HELD THAT:- It is found that there is no suppression of facts and considering the same, extended period of limitation and penalty is also unsustainable. Conclusion - i) The reimbursement for joint advertising activities does not constitute consideration for a taxable service, as no service was rendered by the appellant to MSIL. ii) There is no suppression of facts and considering the same, extended period of limitation and penalty is also unsustainable. Appeal allowed.

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• 2025 (4) TMI 762
  Levy of service tax - transportation charges billed by the vendors for the supply of goods using their own vehicles under the category of Goods Transport Agency (GTA) services - HELD THAT:- Undisputedly, the appellant had received goods delivered as per the condition of purchase order by the vendors at the premises of the appellant. The appellant is purchasing goods from vendors on the basis of free on road delivery, wherein the ownership and the possession of the property in goods is transferred to the appellant only when the same are delivered at the warehouse / delivery point. There is no involvement of any Goods Transport Agency but the vendors themselves delivered the goods at the warehouse / delivery point of the appellant. Since no Goods Transport Agency is involved in the transportation of goods to the appellant and no consignment note has been issued for transportation of the goods by the vendors to the appellant, therefore, the demand of service tax from the appellant who reimbursed the transportation cost mentioned in the invoice of the vendors cannot be sustained. This view has been consistently held by the Tribunal in series of cases included the one R.K. GUPTA C/O. M/S. MANGALAM CEMENT LTD. VERSUS C.C.E., RAIPUR AND VICE-VERSA [ 2018 (6) TMI 1434 - CESTAT NEW DELHI] , wherein it is observed Irrespective freight is shown separately in the invoice, the same cannot be considered as equivalent to the consignment note, which is the mandatory requirement of Section 65 (50b). Conclusion - The appellant is not liable for service tax under the GTA category, and the impugned orders demanding tax are set aside. Appeal allowed.

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• Central Excise

• 2025 (4) TMI 761
  Challenge to impugned recovery notice - demanding repayment of an erroneously refunded amount under Section 11A and Section 11AA of the Central Excise Act, 1944 - entitlement to a special rate/value addition as per the Notifications dated 27.03.2008 and 10.06.2008 - HELD THAT:- Having perused the order dated 24.03.2021, passed in M/s. Jyothi Labs Ltd. [ 2021 (3) TMI 1039 - GAUHATI HIGH COURT ], it is seen that issue involved in that case and in the present case appears to be similar on facts and law with only a difference that in that case the special rate application was filed before the appropriate authority and in the present case, the petitioner filed the special rate application before the Regional Officer, although addressed to the Principal Commissioner, Central Goods Services Tax, Guwahati. As agreed to by the learned counsel for the parties, the petitioner is directed to file special rate/value addition application claiming special rate/value addition before the Principal Commissioner, Central Goods Services Tax, Guwahati, within a period of fifteen (15) days from today. On receipt of such application by the petitioner as directed herein above, the Principal Commissioner, Central Goods Services Tax, Guwahati to consider the application. After arriving at the special rate, if any as per the order to be passed by the Principal Commissioner, Central Goods Services Tax, Guwahati, further process against the petitioner as per law, may be initiated. Conclusion - The petitioner is entitled to file a special rate/value addition application, which must be considered by the Principal Commissioner, Central Goods Services Tax, Guwahati. Petition disposed off.

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• 2025 (4) TMI 760
  Rejection of appeal on the ground of being time barred - HELD THAT:- The appellant has produced before me a copy of appeal filed before the Assistant Commissioner, Mohali on 02.05.2018 in the form of Form No. E.A. 1 which is a form of appeal before the Commissioner (Appeals) under Section 35. The appellant has also produced the proof of Challan dated 01.05.2018 depositing mandatory pre-deposit of 7.5%. It is also found that as per the appellant, he has also sent the copy of the appeal to the Commissioner (Appeals), but the same was not proved by furnishing the proof of the receipt in the office of Commissioner (Appeals). It is also noted that when the copy of the appeal was filed in the office of Assistant Commissioner, Mohali, it was the duty of Assistant Commissioner to forward the same to the office of Commissioner (Appeals), but the same was not done and the learned Commissioner (Appeals) rejected the appeal of the appellant being time barred holding that the appellant filed the appeal on 29.07.2021 before him. Division Bench of the Tribunal in the case of Premier Car Sales Ltd [ 2018 (12) TMI 2014 - CESTAT ALLAHABAD] has remanded the matter back to the Commissioner (Appeals) in identical facts wherein also the appellant filed appeal before the Assistant Commissioner. Similarly, by following the ratio of the said decision, the present matter also remanded back to the learned Commissioner (Appeals) to find out whether the appellant has filed copy of the appeal alongwith proof of pre-deposit before the Assistant Commissioner, Mohali and if the same is found to be valid, then the period, during which the appeal was kept pending with the Assistant Commissioner, should be excluded from the computation of the period prescribed for filing the appeal before the Commissioner (Appeals). Conclusion - Matter remanded back to the Commissioner (Appeals) with a direction to decide the issue of limitation afresh after considering the material placed on record by the appellant and after affording an opportunity of hearing to the appellant and thereafter, pass a reasoned order in accordance with law within the period of two months from the date of receipt of the certified copy of this order. It is further directed that if the appeal is found in time then the same may also decided on merits. Appeal allowed by way of remand.

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• 2025 (4) TMI 759
  CENVAT credit - process amounting to manufacture or not - credit taken under the invoices does not meet the requirement of Rule 9 of the Cenvat Credit Rules, 2004 - HELD THAT:- As per the findings at Para 6.5 of the Order-in-Appeal there was no reason for the Commissioner(Appeals) to dismiss the Appeal filed by the Appellant. However, at Para 6.6 of the impugned Order-in-Appeal he has gone beyond the scope of the Show Cause Notice and dismissed the Appeal on the sole ground that the Appellant has not produced any evidence towards payment for the purchase of the goods, which was not the issue in the Show Cause Notice. On this ground itself the impugned order requires to be set aside. The Tribunal has consistently held that the duty paid at the end of the vendor cannot be questioned at the end of the user of the goods - In the case of AGP Food Products [ 2014 (2) TMI 1096 - CESTAT NEW DELHI] , the Tribunal has held that as the supplier of input is not party to the present proceeding and the assessment cannot be reopened at the recipient end. The impugned order is not sustainable and is set aside. Conclusion - i) The scope of SCN is surpassed. ii) The duty paid at the end of the vendor cannot be questioned at the end of the user of the goods. Appeal allowed.

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• 2025 (4) TMI 758
  Availment of cenvat credit of additional duty of customs (CVD) paid by debiting the Duty Entitlement Pass Book (DEPB) scrips during the period 2010-11 to 2011-12 - invocation of extended period of limitation - HELD THAT:- Learned Commissioner in the impugned order has reasoned that the adjustment of additional customs duty (CVD) paid by way of debiting the DEPB scrips cannot be considered as additional customs duty (CVD) paid and further held that when there is no payment of additional customs duty, the availment of credit on said CVD is irregular. There are no merit in the said reasoning of the learned Commissioner as it has been held by the Hon ble Madras High Court in the case of Tanfact Industries Ltd. [ 2009 (4) TMI 92 - MADRAS HIGH COURT] later affirmed by the Hon ble Supreme Court in [ 2009 (10) TMI 892 - SC ORDER] that the goods cleared under DEPB scheme cannot be treated as exempted goods but it be treated as duty paid goods. Further, Board in its Circular No.18/2006-Cus dated 05.06.2006 clarified that 4% special CVD paid by debiting DEPB scrips is allowed to be taken as cenvat credit. Also, the N/N. 97/2009-Cus dated 11.09.2009 specifically mentions that the importers are entitled to avail the drawback or cenvat credit of additional duty leviable under Section 3 of the Customs Tariff Act against the amount debited in the DEPB scrips. The Tribunal in the case of Styrenix Performance Materials Limited Vs. CCE ST, Vadodara-II [ 2023 (5) TMI 384 - CESTAT AHMEDABAD] after examining the issue at length held that cenvat credit cannot be denied when the additional duty of customs (CVD) was debited by utilising the DEPB scrip. Conclusion - i) The goods cleared under the DEPB scheme are duty-paid goods, and cenvat credit is admissible for additional duty of customs paid via DEPB scrips. ii) The invocation of the extended period of limitation requires clear evidence of suppression of facts, which is absent in this case. Appeal of Revenue dismissed.

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• 2025 (4) TMI 757
  Availment of CENVAT credit - capital goods or not - steel items used for the construction of technological and supporting structures in a sugar manufacturing plant - invocation of extended period of limitation - HELD THAT:- The issue was considered by this Bench in the matter of M/s. Sunvik Steels Ltd Vs. CCE [ 2013 (11) TMI 1081 - CESTAT BANGALORE] wherein it is held that for the period prior to 07.07.2009, the appellants are eligible to avail CENVAT credit on the inputs viz., HR coils, HR Sheets, M.S. Angles, M.S. Channels and MS plates, etc., and accordingly, demand confirmed is not sustainable; for the period 07.07.2009 to April 2011, in principle CENVAT credit on the inputs viz., HR coils, HR Sheets, M.S. Angles, M.S. Channels and MS plates, etc., are not admissible. Consequently, the impugned order is modified, and the appeal is remanded to the original adjudicating authority to recalculate the demand for the period after 07.07.2009, if any, payable. Similar view was upheld by the Tribunal in the matter of M/s BMM Ispat Limited Vs. Commr. C.Ex., Belgaum [ 2024 (4) TMI 671 - CESTAT BANGALORE] and in the matter of M/s Sri Renuka Sugars [ 2024 (6) TMI 294 - CESTAT BANGALORE] - Since the issue is squarely covered by the above decisions, it is found that the material used by the Appellant for support of structures and platform for machineries and equipment used in the factory are eligible for CENVAT credit. Invocation of Extended period of limitation - HELD THAT:- The Show cause notice (SCN) was issued on 03.01.2013 and in the absence of any allegation regarding suppression of facts for evasion of duty, invocation of extended period of limitation is unsustainable. Conclusion - i) The steel items used for constructing and supporting manufacturing equipment qualify as capital goods for CENVAT credit. ii) The invocation of extended period of limitation is unsustainable. Appeal allowed.

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• 2025 (4) TMI 756
  CENVAT Credit - trading activity - Demand of reversal of proportionate credit relating to exempted service - credit availed on Security Services , which is also a common input service used by them in relation to manufacture of dutiable goods and trading services - Extended period of limitation - HELD THAT:- As per the impugned order, adjudication authority rejected the same in a casual manner by quoting that; however in the absence of evidence to prove that the parameters laid down in formula has been correctly followed, it is not inclined to take cognizance of the claim that the procedure under Rule 6(3A) has been followed. Therefore, the assesses are liable to pay the amount of 5% /6% as the case may be, of the value of exempted service in terms of Rule 6(3) (i) of the Cenvat Credit Rules, 2004 for the period April 2011 to December 2014. - it is found that without specifying the mistake or omission on the part of the appellant, while assessing the proportionate Cenvat credit under Rule 6(3A), the same cannot be rejected. Invoking the extended period of limitation - HELD THAT:- There are strong force in the submission made by the appellant. As regarding reversal of proportionate cenvat credit on common security services, it was required to be made only from April 2011, when Rule 6(5) of Cenvat Credit Rules was omitted vide Notification No. 3/2011-CE (NT) dated 01.03.2011 w.e.f. 01.04.2011. Fact being so, since the appellant had fully reversed the cenvat credit availed against common input services under Courier services and Telephone services and proportionately as per Rule 6(3A) for the Security Service , the impugned order is prima facie unsustainable and liable to be set aside. Conclusion - i) Without specifying the mistake or omission on the part of the appellant, while assessing the proportionate Cenvat credit under Rule 6(3A), the same cannot be rejected. ii) The extended period of limitation cannot be invoked without just cause, particularly when the appellant has demonstrated compliance with credit reversal requirements. Appeal allowed.

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• 2025 (4) TMI 755
  Levy of excise duty - manufacture or not - works related to Installation of structural Glazing , Aluminium Doors , Aluminium Partitions and office interiors - HELD THAT:- It is an admitted fact that upon fabrication the impugned items become a part of civil construction. In such a situation, it is not sustainable to hold that there is a marketable new product emerging in between. Similarly, if the goods installed at site are capable of being sold or shifted as such, after removal from the base, then the goods would be considered to be movable and excisable. In the present appeal, the department has no case that the goods installed/structure erected can be shifted or dismantled to be movable property and, therefore, are excisable to duty. Further, they cannot be shifted or disassembled without causing damage to the components/ parts. Even as per the counsel it is has been rightly pointed out that if the curtain wall/AWs, cladding are pulled down or dismantled, it would result into scrap only. Considering the above facts and circumstances the activity of Installation of Structural Glazing work , Aluminium Doors , Aluminium Partitions and Office Interiors cannot be considered as manufacturing to confirm demand of duty along with interest and impose penalties. Conclusion - The appellant s activities do not constitute manufacture under Section 2(f) of the Central Excise Act, as they did not result in a new, distinct, and marketable product. The installations were deemed part of immovable property. The impugned order is not sustainable, hence liable to be set aside - Appeal allowed.

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• 2025 (4) TMI 754
  Wrongful availment of Cenvat credit - inputs used for manufacture of Aluminium Bus Bars and Anode Stem within the factory, which in turn, was captively consumed as capital goods for supply of heavy electric current and for electrolysis respectively in the pot line for the manufacture of dutiable final product i.e. Aluminium metal - invocation of extended period of limitation - HELD THAT:- The issue as to whether cenvat can be availed on the intermediate product when the same is exempted, is no more re integra. Dealing with such CENVAT Credit under the provisions of erstwhile Rule 57 of the Central Excise Rues, 1944 the Delhi Tribunal in the case of HINDALCO INDUSTRIES LIMITED VERSUS COMMR. OF C. EX., ALLAHABAD [ 2002 (5) TMI 180 - CEGAT, NEW DELHI] held that the well settled position about what is intermediate product and having regard to the fact that the appellants in their Form-I form (C/List) shows that bus-bar is captively consumed. We have no doubt in our mind that bus-bar is an intermediate product and is eligible to the benefit of credit of input itself in terms of Rule 57D(2) of C. Ex. Rules, 1944. - the impugned order is set aside on merits and the Appeal is allowed. Extended period of limitation - HELD THAT:- There are considerable force in the appellant s argument that the Show Cause Notice issued on 1.10.2004 for the CENVAT Credit taken during April, 2000 to February, 2001 is time barred. The appellant is an assessee since 1997 and has been taking the credit and filing the Returns. The case laws in respect of the CENVAT Credit eligibility on exempted intermediate goods are in favour of the party. Therefore, the Department has not made any case of suppression on the part of the appellant to fasten the extended period demand liability. Therefore, the demand is set aside even on account of time bar. Conclusion - i) The Appellant is entitled to CENVAT credit on the inputs used for manufacturing exempted intermediate products that were further used in dutiable final products. ii) The demand also set aside on the grounds of time bar, finding the extended period of limitation inapplicable. Appeal allowed.

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• 2025 (4) TMI 753
  Method of valuation - valuation method used by the Appellant for inter-unit transfer of goods - Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - extended period of limitation - HELD THAT:- The issue is no more res integra. In the case of Hindalco Industries Ltd. v. Commissioner of Central Excise, Bhubaneswar-II, [ 2023 (5) TMI 720 - CESTAT KOLKATA] , this Bench has held The duty paid by the Appellant would be available as credit to their sister unit. This the entire exercise is revenue neutral. On an identical issue in the case of M/s H. V. Transmission Ltd. v. CCE, Jamshedpur [ 2023 (12) TMI 118 - CESTAT KOLKATA] , this Bench has held that We find that the issue is squarely covered by the cited decisions of this Tribunal, wherein it has been held that when the duty paid by the parent unit is eligible as Cenvat Credit to the receiving unit, the entire proceeding becomes revenue neutral. Conclusion - Tthe valuation method used by the Appellant is consistent with legal precedents and that the principle of revenue neutrality is applied, rendering the demand for differential duty unsustainable. Appeal allowed.

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• 2025 (4) TMI 752
  Recovery of excess refund of accumulated Cenvat - applicability of retrospective amendment of N/N. 32/99-CE by N/N. 61/02-CE - HELD THAT:- The appellant utilized the accumulated Cenvat as on 22.12.2002 by 31.01.2003, which has remitted in lesser refund being received by them during the period December 2002 to February 2003. This Bench in the case of Ozone Pharmaceuticals vs. Commissioner of Central Excise S.T., Guwahati [ 2023 (9) TMI 1371 - CESTAT KOLKATA] , has dealt with identical issue and has held The entire accumulated CENVAT credit as on 22.12.2002 was utilized by the Appellants during this period, leading to the scenario of Nil refund during the period February 2003 to May 2003. Conclsuion - The utilization of CENVAT credit post-amendment fulfills the conditions for refund eligibility, negating the need for recovery. The Appeal is allowed on merits.

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• CST, VAT & Sales Tax

• 2025 (4) TMI 751
  Failure to appreciate the entries made in the Schedules of the HP VAT Act, 2005 in respect of goods / articles / commodities/items to be taxed as per the rates prescribed in the Schedules appended to the H.P. VAT Act, 2005 - failure to interpret the contents of the judgment in Nokia India Pvt. Ltd. [ 2014 (12) TMI 836 - SUPREME COURT] case by the Hon ble Supreme Court and the orders passed by the Authorities below without adhering to the legal proposition settled down by the Hon ble Supreme Court - wrongful treatment of mobile battery charger - entry No. 60 (f) (vii) of part-II A of schedule-A of the HP VAT Act., 2005 - cell phone charger is an accessory to the cell phone or not. HELD THAT:- It is not in dispute that in Nokia India Pvt. Ltd. s case [ 2014 (12) TMI 836 - SUPREME COURT] , the Hon ble Supreme Court had rendered judgment in context of Punjab Vat Act, wherein entry 60 (6) (g) of Schedule B did not mention accessories for the purpose of taxing the item/product @4% and thus are liable for being charged @ 12.5%. The pivotal issue before the Allahabad High Court in M/s Samsung India s case [ 2018 (1) TMI 911 - ALLAHABAD HIGH COURT ] revolved around whether a mobile charger, when sold as part of a composite package with a mobile phone, could be made subject to separate taxation under the U.P. VAT Act, 2008. The Department contended that the charger should be taxed separately based on the judgment of Hon ble Supreme Court in Nokia s case whereas the petitioner argued that the composite package should be treated as a single entity for tax purposes. In the case before the Allahabad High Court, Entry No.28 of the U.P. VAT Act was under consideration which provides cell phones and its parts but excluding cellphones with MRP exceeding Rs. 10,000/- and the VAT charged was @4%, therefore, the plea of the U.P. State that the charger should be charged at higher rate was held to be misconceived, as a charger was part of the cellphone. The petitioner therein, a prominent manufacturing company was engaged in the production of consumer electronics, IT, and telecom products, operates multiple offices across India. The petitioner therein had filed a writ petition challenging two notices issued under the U.P. VAT Act on February 2, 2016 and March 18, 2016. These notices were issued for reassessment of tax liability for the same period and products previously assessed by the tax department. The impugned order resulting from these notices was passed on March 30, 2016. Division Bench in aforesaid case had failed to notice number of judgments rendered by learned Single Judge of the same High Court in case titled as M/s Lava International Ltd. versus State of Karnataka and others, [ 2016 (12) TMI 60 - KARNATAKA HIGH COURT ] upholding the separate rate of tax on the Mobile Battery Chargers (MBC) sold alongwith the mobile phones itself, under the provisions of the Karnataka Value Added Tax act, 2003. As regards the dominant nature test as heavily stressed upon by learned counsel for the respondent and taken note in the case before Allahabad High Court, is conceptually flawed in application. The dominant nature test or degree of intention or overwhelming component test or decree of labour and service tax came to be developed with the progress of law and applies to dominant composite contracts goods plus service tax, as evolved over to determine whether the contract is a work contract or a contract for sale of goods or both. Whether the contract could be treated as divisible or not. In the instant case what is sold is a phone with the charger which is a pure sale of goods and containing no self-service element. It is common knowledge that today majority of the mobiles are being sold with charger and wherever there are two different products being sold in same retail package. Conclusion - i) The learned Tribunal failed to appreciate the entries made in the Schedules of the H.P. VAT Act, 2005 in respect of goods/ articles/commodities/ items to be taxed as per the rates prescribed in the Schedules appended to the H.P. VAT Act, 2005 in its right perspective and thereby reached at a wrong conclusion. ii) The learned Tribunal wrongly interpreted the judgment in Nokia India s case and thereby, reached at a wrong conclusion. iii) The order passed by the learned Tribunal is perverse and contrary to the provisions of law laid down in the VAT Act and law settled by the Hon ble Supreme Court in Nokia India s case. iv) The learned Tribunal has wrongly treated the mobile battery charger taxable @5% instead of 13.75%. v) The learned Tribunal was not justified in passing the impugned order ignoring entry No. 60 (f) (vii) of part-II A of schedule-A of the H.P.Vat Act, 2005 which does not include mobile charger and other accessories. vi) The learned Tribunal erred in not considering the cellphone charger as an accessory to the cellphone and is not a part of the cellphone. Therefore, battery charger cannot be held to be a composite part of cellphone but is an independent product which can be sold separately without selling the cellphone. Petition allowed.

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• 2025 (4) TMI 750
  Disallowance of claim of deduction towards sub-contractors for the lack of producing certificates mandated under Rule 3(2)(i-1) of KVAT Rules, 2005 - absence of particulars of tax collected - invocation of powers of suo moto revision under section 64 of the Act - levy of tax on receipt for land cost i.e., immovable property, which does not constitute consideration for works contract under Composition Scheme of KVAT - reopening of assessment proceedings by invoking revisional powers under section 64 of the Act - HELD THAT:- With respect to exemption claimed on sub-contractor payment of Rs. 75,63,738/-, the reassessment order itself had disallowed the same. Added, there is no material to show that the turnover was different from the one declared by the Assessee and the same turnover has been used by both the authorities. In respect of URD purchases that were disallowed, the Assessee had filed its reply specifically stating that there was no URD purchase. The re-assessment order though does not in so many words give any finding but does not deny or disallow the claim of Assessee. Therefore, question of error or prejudice does not arise. It hardly needs to be stated that the change of opinion cannot be a ground for invoking suo moto revisional powers vide COMMISSIONER OF INCOME-TAX. VERSUS. JAIN CONSTRUCTION CO. [ 2012 (11) TMI 1071 - RAJASTHAN HIGH COURT] . In the instant case, when all the documents were already submitted by the Assessee at the time of reassessment, what the revisional authority has done is nothing but a mere change of opinion, which is impermissible - What is contemplated by the statute is that the former agreement for sale of land would not be a subject matter of the tax, and the aggregate of works contracts agreements only would be taken into account as they represent the total consideration for the works contract. Further, in terms of section 15 (4) of the Act, the only item that is excluded is input tax credit as composition schemes are normally done to tax turnover without input tax as a simple alternative to regular tax payments. Composition schemes cannot be converted into a scheme to tax turnovers not falling within the legislative competence. In the instant case, obviously there is no JDA inasmuch as the Assessee himself has undertaken construction activity on his own land, as recorded in the reassessment order dated 25.09.2019. Further, documents for purchase of land and the entire set of agreement to sell and agreement for construction along with copy of invoices were produced at the time of reassessment - The assessment proceedings for the period 2015-16 has attained finality under comprehensive Karasamadhana Scheme 2019 (CKSS 2019), the same cannot be reopened by invoking revisional powers in terms of Section 64 of the Act. Conclusion - i) VAT cannot be levied on immovable property. ii) Finalized assessments under the Karasamadhana Scheme cannot be reopened. The questions of law framed in these appeals, are answered in favour of the Assessee and against the Revenue.

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• Indian Laws

• 2025 (4) TMI 749
  Conspiracy / Bribery - VAT officers - Initiation of prosecution against the accused - Whether barred under the Kerala Value Added Tax Act (KVAT Act) due to statutory limitations or prior proceedings? - materials produced by the prosecution are sufficient to establish a prima facie case against the accused, particularly accused Nos. 1 and 8, under the Prevention of Corruption Act, 1988 (PC Act) and Indian Penal Code, 1860 - illegal gratification in the absence of direct evidence of bribery - HELD THAT:- The prosecution has a definite allegation that following payment of such an illegal gratification the compounding tax of Rs. 13,06,29,613/- was reduced to Rs.7,00,68,469/-. More conspicuously on payment of that amount all documents and the account statements pertaining to the transactions of M/s. Nano Excel company were returned to the company without retaining even copies. When the prosecution alleges that such an act disabled the department from checking even the correctness of the action of fixing the compounding tax that certainly is another circumstance pointing to the conspiracy. The circumstances mooted by the prosecution which are mentioned above, if proved, would establish payment of illegal gratification. Whether there occurred infraction from law while imposing compounding tax on M/s. Nano Excel company has only a secondary importance being one of the circumstances proposed to be proved. In the above circumstances, it is unable to accept the contentions of the 1st accused in support of his plea to quash the final report in C.C. No. 7 of 2022 as against him. Car bearing registration No. KL 08 AN 8081 belongs to accused No.8 is not disputed. Sufficient evidence is proposed to prove that the said car was used to carry Rs. 1.5 crores from the office of M/s. Nano Excel company to Pearl Regency hotel for being handed over in terms of the instructions of accused No. 7. But, no evidence has been collected to establish that accused No.8 knew that his car was availed for the purpose of carrying such a sum and also that he was a party to the conspiracy of bribing accused Nos. 1 to 4. In the statement filed by the investigating officer also, no such evidence has been pointed out. Therefore, prosecution of accused No.8 for the offences punishable under Section 13 (1) (d) r/w Section 13 (2) of the PC Act and Section 120 B of the IPC cannot be justified. Such an exercise will end only in futility. Conclusion - i) The contentions regarding statutory bars under the KVAT Act were previously considered and dismissed, and cannot be revisited at this stage. ii) The prosecution s materials, while lacking direct evidence of bribery, present sufficient circumstantial evidence to justify proceeding against accused No. 1 under the PC Act and IPC. iii) The use of accused No. 8 s car in the alleged crime, without evidence of his knowledge or involvement, does not justify prosecution under the conspiracy charges. Applcation dismissed.

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• 2025 (4) TMI 748
  Dishonour of Cheque - petitioner-accused could be acquitted of the conviction under Section 138 of the Negotiable Instruments Act, 1881, following a compromise with the complainant - compounding of offence - HELD THAT:- Having taken note of the fact that the petitioneraccused and the respondent (complainant) have settled the matter, vide Compromise Deed Annexure A-1, and the complainant/respondent has no objection in compounding the offence, therefore, this Court sees no impediment in accepting the prayer made on behalf of the accused-petitioner for compounding of offence while exercising power under Section 147 of the Act as well as in terms of guidelines issued by the Hon ble Apex Court in Damodar S. Prabhu vs. Sayed Babalal [ 2010 (5) TMI 380 - SUPREME COURT ], wherein the Hon ble Apex Court has held Section 147 of the Negotiable Instruments Act, 1881 is in the nature of an enabling provision which provides for the compounding of offences prescribed under the same Act, thereby serving as an exception to the general rule incorporated in sub-section (9) of Section 320 of the CrPC which states that No offence shall be compounded except as provided by this Section . A bare reading of this provision would lead us to the inference that offences punishable under laws other than the Indian Penal Code also cannot be compounded. However, since Section 147 was inserted by way of an amendment to a special law, the same will override the effect of Section 320(9) of the CrPC, especially keeping in mind that Section 147 carries a non obstante clause. In K. Subramanian vs. R. Rajathi [ 2009 (11) TMI 1013 - SUPREME COURT ], it has been held by the Hon ble Apex Court that in view of the provisions contained in Section 147 of the Act read with Section 320 of Cr.P.C., compromise arrived at can be accepted even after recording of the judgment of conviction. Since, in the instant case, the petitioner-accused after being convicted under Section 138 of the Act, has compromised the matter with the complainant/respondent, prayer for compounding the offence can be accepted in terms of the aforesaid judgments passed by the Hon ble Apex Court. Conclusion - i) Section 147 of the Negotiable Instruments Act allows for the compounding of offenses, overriding the general rule under the CrPC. ii) The Court has the discretion to reduce the compounding fee based on the financial condition of the petitioner and the specific facts of the case. iii) Compounding of the offense is permissible even after conviction if both parties agree to a settlement. The present matter is ordered to be compounded and the impugned judgment of conviction and order of sentence dated 08.12.2023, passed by learned Judicial Magistrate First Class, Nahan, District Sirmaur, H.P., are quashed and set-aside and the petitioner-accused is acquitted of the charge framed against him under Section 138 of the Act. Bail bonds, if any, stand discharged - petition disposed off.

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• 2025 (4) TMI 747
  Dishonour of Cheque - territorial jurisdiction of Trial Magistrate to entertain the complaint under Section 138 of the Negotiable Instruments Act - HELD THAT:- A complaint for offence under section 138 Negotiable Instruments Act can be inquired into and tried only by the court within whose local jurisdiction a cheque is delivered for collection i.e. the branch of the bank of the payee or the holder in due course or if the cheque is presented for payment otherwise through an account, the location of the branch of the drawee bank where the drawer maintains the account would be determinative of the territorial jurisdiction. Reliance placed in the judgement of Supreme Court in the case of Bridgestone India Pvt. Ltd. v Inderpal Singh [ 2015 (12) TMI 777 - SUPREME COURT ] in which, it has been held that Section 142(2) of the Negotiable Instruments Act amended by the Negotiable Instruments (Amendment) Second Ordinance 2015, leaves no room for any doubt, specially in view of the Explanation thereunder, that with reference to an offence under section 138 of the Negotiable Instruments Act, the place where cheque is delivered for collection i.e. branch of the bank of the payee or holder in due course, where the drawee maintains an account, would be determinative of the place of territorial jurisdiction. Thus, it is clear that inquiry trial or other proceedings in respect of a case under section 138 Negotiable Instruments Act can be held only by a court within whose local jurisdiction the cheque is delivered for collection i.e. the branch of the bank of the payee where the payee or the holder in due course, as the case may be, maintains the account. Adverting to the facts of the present case, it is clear that the respondent/complainant had presented the cheque in his bank account maintained at ICICI, Sector 128 Noida (UP) which is beyond the local territorial jurisdiction of the learned Trial Magistrate. It is not a case where the respondent/complainant had presented the cheque for payment otherwise through an account, in that case even the location of the branch of drawee bank where the drawer maintains the account would have been determinative of the territorial jurisdiction. Thus, it is clear that the learned Trial Magistrate did not have territorial jurisdiction to entertain the complaint which is subject matter of the present petition. Having held that the learned Trial Magistrate had no jurisdiction to entertain the complaint filed by the respondent against the petitioner and the co-accused, and consequently he had no jurisdiction to issue process against the petitioner and the co-accused, it is not necessary to go to the second ground of challenge urged by the learned counsel for the petitioner. Conclusion - The order of the Trial Magistrate is set aside due to lack of territorial jurisdiction. The complaint is ordered to be returned to the respondent for filing before the competent magistrate. Petition allowed.

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• 2025 (4) TMI 746
  Validity of sale of the property to the petitioner - subsequent discovery of a prior sale and possession by another party - refund of the amounts paid, along with interest, due to the failure of respondent No. 1 to deliver clear title and possession of the property - whether in view of the pendency of the proceedings before the learned DRT, this writ petition is maintainable or not? - HELD THAT:- This Court has no hesitation in answering that the present writ petition is certainly maintainable because the dispute as between the petitioner and the respondent No.1 cannot be encompassed within the scope and ambit of the SARFAESI Act. The respondent No.1 claimed the schedule property as a security interest for the realization of its debts from the primary borrowers viz., due in account of M/s. Dass Brothers and M/s. Simran Traders, whose accounts had become non-performing assets. Consequently, respondent No. 1 proposed to sell the property by inviting tenders and conducting an auction. The home loan agreement executed by the petitioner on 24.12.2013 is not the subject matter of the proceedings before the learned DRT. Instead, the proceedings concern the competing rights and claims of two different financial institutions/banks over the scheduled property, with each asserting it as its security interest. - the proceedings against the present petitioner are not in the nature of Section 13 of the SARFAESI Act, i.e., they do not pertain to the enforcement of a security interest per se, and therefore, this Court finds no hesitation in holding that pendency of proceedings before the learned DRT does not render the present petition non maintainable before this Court. In terms of Rule 8(7)(f) it is manifest that the respondent No.1 failed to supply all the relevant details regarding the encumbrances in respect of the schedule property by or in favour of other financial institutions. There was a patent failure on the part of respondent no. 1 to conduct due diligence before auctioning the scheduled property. Regardless of whether respondent No. 1 was aware of the encumbrances on the property in question, this is immaterial, as the petitioner acted in good faith based on the declarations made by respondent No. 1. As a result, respondent No. 1 has not only unjustly enriched itself but has also caused irreparable harm to the petitioner - In the instant case, respondent No.1 has not only failed to act in accordance with the provisions of the Act but has also acted in blatant disregard of the fundamental principles of judicial procedure. The petitioner lodged a complaint with the Ombudsman/respondent No.2 within the period of limitation prescribed under the Limitation Act, 1963. It cannot be concluded that the complaint was abusive, frivolous or vexatious. The petitioner undeniably had a legitimate grievance against respondent No.1, as he fell victim to a misleading declaration in the Auction Notice. Respondent No. 1, without conducting proper due diligence, managed to sell the subject property to the petitioner for valuable consideration. This led to the petitioner being trapped into entering a home loan agreement, leaving him a victim of the high- handed actions of Respondent No. 1. Repeatedly, and at the cost of redundancy, despite giving repeated assurances, the officials of Respondent No. 1 failed to address the petitioner s genuine and legitimate grievance. Conclusion - i) The sale certificate dated 24.12.2013 was quashed and declared null and void. ii) The petitioner was entitled to a refund of Rs. 9,93,752.94 with 12% interest per annum from 2013. iii) The loan account was to be foreclosed, and any installments paid were to be refunded with interest. iv) Respondent No. 1 was ordered to remove the freeze on the petitioner s savings account. v) The Reserve Bank of India was directed to inquire into the arbitrary actions of respondent No. 1 and issue corrective guidelines. vi) Respondent No. 1 was ordered to pay Rs. 5,00,000 as compensation for the petitioner s prolonged litigation and distress. vi) The Court emphasized the importance of due diligence and disclosure in auction sales under the SARFAESI Act. Petition disposed off.

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