TMI Tax Updates - e-Newsletter
April 5, 2025

Case Laws in this Newsletter:

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

TMI Short Notes

1. Curb tax evasion through Unexplained Credits (i.e. unaccounted money or fictitious entries in financial records) in Clause 102 of The Income Tax Bill, 20205 Vs. Section 68 of The Income Tax Act, 1961

  Bill:

2. Income Apportionment in AOPs and BOIs in Clause 309 of the Income Tax Bill, 2025 Vs. Section 67A of the Income Tax Act, 1961

  Bill:

3. Comprehensive Analysis of Total Income in Clause 101 of the Income Tax Bill, 2025 Vs. Section 66 of the Income Tax Act, 1961

  Bill:

4. Addresses the tax liability of individuals in respect of income that is included in the income of another person in Clause 100 of the Income Tax Bill, 2025 vs. Section 65 of the Income Tax Act, 1961

  Bill:

Articles

1. Decoding TDS on Rent: Navigating the 2% vs. 5% Rate under Section 194IB for FY 2024-25

   By: Mohit Jain

2. From Choice to Compulsion: The New ISD Mandate Under GST Explained

   By: Harshit Jain

3. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

4. Things to remember While Filing Company Law Documents!

   By: Tushar Makkar

5. How Long Does the Online 12A Registration Process Take?

   By: Ishita Ramani

6. Dedicated Freight Container Corridor Railway Lines (DFCC)

   By: YAGAY andSUN

7. How India Can Become the 3rd Largest Economy of the World: A Critical Analysis

   By: YAGAY andSUN

8. The Business of Perfume in Kanauj: A Critical Insight{Vocal for Local}[One District One Product]

   By: YAGAY andSUN

9. How to Manage Risk in an Export Business?

   By: YAGAY andSUN

10. What is behind India's huge landfills?

   By: YAGAY andSUN

11. We need to fix Landfills – Here’s How?

   By: YAGAY andSUN

12. Why it is good for Environment, nature and climate, if elections in India is conducted " Green " (i.e. without any flags, pamphlets, banners, posters, stickers, noise through loudspeakers etc.)[Environment Protection, Nurturing Nature and Healing Climate]

   By: YAGAY andSUN

13. How to Select Products for a profitable Export business from India?

   By: YAGAY andSUN

14. 𝟏𝟑 𝐲𝐞𝐚𝐫𝐬 𝐣𝐮𝐬𝐭 𝐭𝐨 𝐫𝐞-𝐝𝐞𝐜𝐢𝐝𝐞 𝐚 𝐜𝐚𝐬𝐞

   By: Pradeep Reddy

News

1. Advisory on Case Sensitivity in IRN Generation

2. Parliament's nod to Waqf bill highlight as Budget session ends with over 100 per cent productivity

3. Rajya Sabha adjourned sine die; Budget Session ends

4. Rajya Sabha adjourned sine die; Budget Session concludes

5. Rahul calls for law ensuring fair share of budget for schemes for Dalits, Adivasis

6. Lok Sabha adjourned sine die; Budget session concludes

7. Cabinet approves four multitracking projects across Indian Railways

8. ED arrests drugs 'kingpin' from Punjab under PMLA

9. RBI to issue Rs 10, Rs 500 notes bearing signature of Guv Malhotra

10. ED searches Empuraan producer Gopalan's chit fund firm in FEMA case

11. Union Commerce & Industry Minister Shri Piyush Goyal Calls for Investments in Emerging Technologies to Propel 'Viksit Bharat 2047' Vision

12. Republicans moving ahead with Trump''s 'big' bill of tax breaks and spending cuts amid tariff uproar

Notifications

Customs

1. 23/2025 - dated 4-4-2025 - Cus

Amendment in Notification No. 50/2017-Customs, dated the 30th June, 2017

2. 21/2025 - dated 3-4-2025 - Cus (NT)

Export Entry (Post export conversion in relation to instrument based scheme) Regulations, 2025

3. S.O. 1607(E) - dated 2-4-2025 - Cus (NT)

Corrigendum - Notification No. 18/2025- (N.T.), dated 28th March, 2025

GST - States

4. 38/1/2017-Fin(R&C)(01/2025-Rate)/43 - dated 16-1-2025 - Goa SGST

Amendment in Notification No. 38/1/2017-Fin(R&C)(01/2017-Rate) dated 30th June, 2017

Income Tax

5. 26/2025 - dated 3-4-2025 - IT

Notifies that every person who has been allotted permanent account number on the basis of Enrolment ID of Aadhaar application form filed prior to the 1st day of October, 2024

6. 25/2025 - dated 3-4-2025 - IT

Income-tax (ninth Amendment) Rules, 2025

Circulars / Instructions / Orders

GST - States

1. CCT/26-4/2024-25/H/5645 - dated 29-3-2025

Various issues related to availment of benefit of Section 128A of the CGST Act, 2017

FEMA

2. 01 - dated 3-4-2025

Limits for investment in debt and sale of Credit Default Swaps by Foreign Portfolio Investors (FPIs)

Customs

3. 11/2025 - dated 3-4-2025

Implementation of the Export Entry (Post export conversion in relation to instrument-based scheme) Regulations, 2025

4. Instruction No. 03/2025 - dated 3-4-2025

Applicability of SCOMET on Polyethylene Glycol CAS No. 25322-68-3

Highlights / Catch Notes

GST

• Input Tax Credit Not Available for Share Buyback Expenditure Under GST as Securities Fall Outside Supply Definition

  Case-Laws - AAR : The AAR ruled that a listed entity is not eligible to avail Input Tax Credit (ITC) on expenditure incurred for buyback of its shares. The authority determined that buyback of shares is neither a supply of goods nor services, as "securities" are explicitly excluded from both definitions under CGST Act. Since section 16(1) permits ITC only on supply of goods or services used in course of business, the primary condition for ITC availment is not satisfied. The applicant's argument that such expenditure furthers business activity becomes irrelevant once the threshold requirement fails. The AAR concluded that the applicant must reverse ITC on common inputs and input services related to share buyback expenditure.
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• Gujarat Maritime Board Dredging Services Not Eligible for Exemption Under N/N 9/2017-IT (Rate) as Amended

  Case-Laws - AAR : The applicant sought ruling on eligibility for exemption under serial No. 3A of N/N. 9/2017-IT (Rate) as amended by N/N. 2/2018-IT (Rate) regarding dredging services supplied to Gujarat Maritime Board. The AAR determined that while Gujarat Maritime Board is a body corporate, the term "government entity" has been omitted from the exemption notification. The AAR ruled that the applicant is not eligible for the benefit claimed under the exemption notification. The Authority also noted that in accordance with Section 103 of the CGST Act, 2017, this advance ruling is binding only on the applicant who sought it.
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• GST Demand Against Deceased Invalid Without Show Cause Notice to Legal Representative Under Section 93

  Case-Laws - HC : The HC ruled that a GST demand against a deceased individual without issuing a show cause notice to their legal representative is invalid. While Section 93 of the GST Act addresses the liability of legal representatives to pay tax, interest, or penalties after a proprietor's death, it does not authorize determinations against deceased persons. The court held that issuing notice to and seeking response from the legal representative is a prerequisite before making any determination. Consequently, the determination made against the deceased without proper notice to the legal representative was unsustainable and the petition was allowed.
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• Condonation of Delay in GST Returns Filing Beyond 30-Day Period Under Section 62(2) Granted While Preserving Late Fees

  Case-Laws - HC : HC condoned the delay in filing GST returns beyond the 30-day period specified in Section 62(2) of the GST Act, 2017, following the precedent established in Comfort Shoe Components case. While granting relief, the Court preserved the respondent's authority to impose applicable late fees for the delayed period. The petitioner was directed to file a formal application for condonation of delay before the respondent within 15 days from receipt of the order. The petition was accordingly disposed of, balancing taxpayer relief with regulatory compliance by maintaining the statutory consequence of late filing while removing the procedural bar.
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• No GST Payable on Gas Lost During Transit, But Input Tax Credit Must Be Reversed Under Section 16(1)

  Case-Laws - AAR : The AAR ruled that no GST is payable on goods (gas) lost during transit as no supply occurred, since the loss happened before delivery to the customer and prior to the place and time of supply being established. However, the applicant must reverse Input Tax Credit (ITC) on inputs used in manufacturing the goods subsequently lost in transit. The authority determined that such inputs fail the "proper end use" condition under Section 16(1) of CGST Act, as they were not ultimately used in furtherance of business through a taxable outward supply. The ITC reversal is required under Section 17(5)(h) read with Section 16, as the goods were lost/destroyed during transit.
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• Investment Firm Cannot Claim Input Tax Credit on Mutual Fund Transactions Under Section 17(2)

  Case-Laws - AAR : The AAR ruled that the applicant is not eligible to avail Input Tax Credit (ITC) on tax paid for inputs and input services related to mutual fund subscription and redemption activities. The Authority rejected the applicant's contention that redemption of mutual funds differs from sale of securities, clarifying that redemption constitutes a sale transaction regardless of nomenclature, as it involves cessation of ownership by the unit holder. Consequently, the applicant must reverse ITC on common inputs and input services used for mutual fund subscription and redemption activities in accordance with Section 17(2). The applicant's argument regarding lack of statutory machinery provisions to calculate exempt supply value was also dismissed.
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• Free Scraping Tool with Apsara Oil Pastels Constitutes Mixed Supply Under Section 2(74), Taxable at 18% GST (74)

  Case-Laws - AAR : The AAR determined that the inclusion of a free scraping tool with Apsara Oil Pastels constitutes a "mixed supply" under section 2(74) of the CGST Act, 2017, rather than a composite supply. The authority rejected the applicant's contention that the scraping tool was merely an accessory, finding that the two products were not integral to each other's function. Since the products were supplied together for a single price, section 8(b) of the CGST Act applies, requiring taxation at the higher applicable rate between the two items. Consequently, the entire "Apsara Oil Pastels with Free Scraping Tool" package was classified under HSN 3926, attracting GST at 18% in accordance with entry no. 111 of Schedule-III.
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• GST Officer Appointed Under Karnataka GST Act Qualifies as Proper Officer Under IGST Act Through Cross-Empowerment Provisions

  Case-Laws - HC : The HC held that an officer appointed under Section 6 of the Karnataka GST Act qualifies as a proper officer under Section 4 of the IGST Act through cross-empowerment provisions. The court determined that challenges to confiscation orders passed under Section 130 must proceed through statutory appeal mechanisms under Section 107 of KGST rather than writ petitions, following precedents from SC decisions in Falcon Enterprises and Commercial Steel Ltd. The petition was deemed not entertainable due to the existence of alternative statutory remedy. The court disposed of the petition while granting the petitioner 4 weeks to file an appeal under Section 107 KGST read with Section 20 IGST.
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• Input Tax Credit Denied for Concrete Tower Construction Supporting Manufacturing Lines Under Section 17(5)(d) of CGST Act

  Case-Laws - AAR : The AAR ruled that the applicant cannot avail Input Tax Credit (ITC) on inputs and services used for constructing a concrete tower to support VCV lines for manufacturing EHV cables. Applying the Supreme Court's functionality test from Safari Retreats, the AAR determined that while a building may qualify as "plant" under Section 17(5)(d) of CGST Act, ITC is unavailable when construction is for the recipient's own use. The AAR found the applicant failed to prove the construction was not on their own account, breaking the ITC chain. The authority dismissed the applicant's reliance on various judgments as irrelevant, noting they primarily pertained to Income Tax matters rather than GST provisions.
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• Businesses Can Apply Margin Scheme for Second-Hand Goods While Maintaining Regular GST Procedures for Other Operations Under Rule 32(5)

  Case-Laws - AAR : AAR ruled that businesses can utilize Rule 32(5) valuation (margin scheme) for second-hand goods while maintaining regular valuation for existing operations. Taxpayers may selectively apply this scheme to purchases from unregistered dealers while using standard GST procedures for registered dealer purchases. Under the margin scheme, the taxable value is the difference between selling price and purchase price, excluding repair/improvement costs. When using this scheme, input tax credit cannot be claimed on either purchase price or repair costs. Purchases of second-hand goods from unregistered dealers are exempt from reverse charge mechanism for intra-state supplies under Notification No. 10/2017-CT(R).
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• Rice Husk Board with PVC Resin Cannot Be Classified Under Chapter 44 of GST Tariff

  Case-Laws - AAR : The AAR dismissed an application seeking classification of rice husk board (containing rice husk powder, calcium carbonate, recycled waste, processing aids, and PVC resin as a bonding agent) under Chapter 44 of the GST tariff. The authority found the application unmaintainable for several reasons: the submission appeared to be an exact reproduction of a previous ruling (M/s. Papaka Herbs & Spices Private Ltd.), the submitted test report from a NABL-accredited laboratory contained parameters not covered under NABL accreditation, the report lacked reference to BIS standards, and the applicant failed to provide supporting documentation such as brochures, purchase invoices for inputs, or sales invoices.
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• Goods Delivered Under Fraudulent Orders Still Constitute "Supply" Under Section 7 of CGST Act Despite Non-Payment

  Case-Laws - AAR : The AAR ruled that goods supplied by the applicant, despite being a victim of fraud without receiving consideration, still constituted a "supply" under GST law. The authority determined that while fraud may vitiate a contract, it does not negate the statutory definition of "supply" under section 7 of the CGST Act. The facts established that goods were physically removed and received at the destination, as confirmed by the FIR. The AAR concluded that the transaction qualified as supply of goods under section 20 of the IGST Act read with sections 12 and 7 of the CGST Act, regardless of the fraudulent nature of the order.
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• Input Tax Credit Available on Employer's Share of Mandatory Canteen Services Under Factories Act

  Case-Laws - AAR : The AAR ruled that Input Tax Credit (ITC) is available to the applicant for GST charged on food and beverages provided through mandatory canteen facilities under the Factories Act, 1948, read with Gujarat Factories Rules, 1963. This eligibility applies specifically to canteen services for factory employees where such provision is obligatory under law. However, the ITC is limited strictly to the portion of the cost borne by the applicant company, excluding any contribution made by employees. This ruling creates a specific exception to the general restriction on ITC for food and beverages by recognizing the statutory obligation to provide canteen facilities.
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Income Tax

• Transfer Pricing Adjustment for Guarantee Fees Paid to Associated Enterprise Rejected Under Section 254(2)

  Case-Laws - HC : The HC declined to entertain the petition challenging the Tribunal's decision under Section 254(2) regarding TP adjustment for guarantee fees paid to an Associated Enterprise. The Court noted that the Tribunal had decided Ground No.4 in favor of the Assessee based on a precedent from the Gujarat HC [2018] that confirmed a similar ruling for an earlier assessment year (2009-10). The Court determined it would be an academic exercise to evaluate the Tribunal's power to recall its order under Section 254(2) when the HC had already approved similar findings in the previous assessment year, thereby implicitly validating the Tribunal's conclusion rejecting the upward TP adjustment of guarantee fees.
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• Proportionate Allocation Method Valid for Computing Section 36(1)(viii) Deduction When Eligible Business Expenses Not Separately Recorded

  Case-Laws - HC : The HC upheld the assessee's methodology for computing deduction under Section 36(1)(viii) of the I.T. Act. Since the assessee's accounts did not segregate actual expenditure for eligible business, the court approved the proportionate allocation method where the ratio of total income to total expenditure was applied to eligible business income to determine eligible business expenses. This approach was justified as the accounts showed gross income and expenditure for the entire business, as well as gross income for eligible business, but not specific expenditure for eligible business. The court confirmed that 20% of the resulting profit figure from eligible business qualified for deduction under Section 36(1)(viii).
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• Property Transactions Below 50 Lakh Threshold Not Subject to TDS Under Section 194IA

  Case-Laws - AT : ITAT reversed the CIT(A) and AO's determination that appellant was an assessee-in-default under s.201(1) for failure to deduct TDS under s.194IA. The Tribunal held that since payments to individual sellers (21,83,680 and 31,83,680) were each below the 50,00,000 threshold, s.194IA provisions were not applicable, following Bhikhabhai H. Patel. The CIT(A) failed to address the legal issues raised by appellant or examine the transaction structure in light of judicial precedent. Consequently, the demand under s.201(1) and interest under s.201(1A) were deleted, rendering moot the remaining grounds concerning s.2(14)(iii), proviso to s.201(1), Explanation to s.191, and penalty under s.271C.
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• Taxpayer Wins: IT Support Services to Associated Enterprises Not "Fees for Technical Services" Under India-UK DTAA Article 13

  Case-Laws - AT : ITAT ruled in favor of the taxpayer regarding income from IT support services provided to associated enterprises. The Tribunal held that these services did not qualify as fees for technical services under Article 13 of the India-UK DTAA as they failed to satisfy the "make available" condition. The technology was not transferred in a manner enabling the recipients to apply it independently after contract conclusion. The ITAT noted that tax authorities erred by not recognizing that payments were mere cost-to-cost reimbursements without markup, thus not constituting taxable income. The Assessing Officer had not demonstrated that any training provided transferred technology to associated enterprises' employees for independent use. Appeal allowed.
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• Cash Deposits Partially Exempted as Customary Gifts from Relatives Under Section 69A and 115BBE

  Case-Laws - AT : ITAT partially allowed the appeal concerning unexplained cash deposits under section 69A r.w.s 115BBE. The appellant claimed exemption for cash gifts received from relatives on occasions like marriage anniversaries, Diwali, and birthdays. While the Tribunal acknowledged Indian custom of giving gifts on such occasions, it noted the appellant failed to explain why Rs. 3,50,000 was deposited by Sh. Sandeep Sharma in her account and why such customary gifts weren't regularly deposited in previous years. Considering these factors, ITAT accepted half of the contested amount as exempted customary gifts and deleted half of the addition made by the AO, thus partially allowing the appeal.
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• PMS Fees Qualify as Business Expenses Under Section 37, Not Part of Capital Gains Calculation

  Case-Laws - AT : The ITAT ruled that Portfolio Management Service (PMS) fees paid by the appellant to portfolio managers qualify as expenses "wholly and exclusively incurred in connection with the business" and are therefore allowable under Section 37 of the Income Tax Act. The Tribunal distinguished this case from Devendra Motilal Kothari, which addressed PMS fees in the context of capital gains calculations. By allowing the assessee's claim under Rule 27 of the ITAT Rules that PMS fees constitute business expenses rather than costs related to capital asset transfers, the Tribunal determined the Revenue's appeal to be infructuous and dismissed it accordingly.
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• Notice Under Section 147 Quashed: AO's Vague Reasons and PCIT's Mechanical Approval Render Reopening Invalid

  Case-Laws - AT : The ITAT quashed the reopening of assessment under section 147, finding it invalid on two grounds. First, the reasons recorded by the AO were vague and incomplete, lacking essential transaction details and demonstrating merely borrowed satisfaction rather than independent verification. Second, the PCIT's approval was deemed mechanical and invalid as it contained only the notation "yes, it is fit case" without recording any substantive satisfaction based on the facts presented. The Tribunal determined that both the reopening of assessment and the subsequent assessment framed by the AO were legally unsustainable, and accordingly allowed the assessee's appeal.
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• Income Tax Notice Under Section 148 Quashed Due to Jurisdictional Errors and Unjustified Cash Credit Additions

  Case-Laws - AT : The ITAT quashed the assessment proceedings due to jurisdictional defects in the notice under section 148. The ITO, Nabha incorrectly issued the notice when jurisdiction properly belonged to ACIT/DCIT, Mandi Gobindgarh. When the file was transferred, ACIT/DCIT failed to issue a fresh notice, rendering the proceedings legally invalid. On merits, the Tribunal also found the addition of Rs. 12,39,90,680/- as unexplained cash credits unjustified, as the assessee had demonstrated that deposits originated from legitimate sales of Harvester Combines and spares, supported by proper documentation including ledger accounts, sale invoices, and trading accounts. Following the principle in Ludhiana Steel Rolling Mills, such additions were impermissible when books of accounts had not been rejected. Appeal allowed.
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• Penalty Under Section 271D Deleted As Loan Disbursed Through Banking Channels, Not Cash Transaction

  Case-Laws - AT : The ITAT set aside a penalty of Rs. 15 lakhs imposed under section 271D for alleged violation of section 269SS. The Tribunal found that the loan amount was disbursed through banking channels and duly confirmed by both the NBFC and the concerned party. The ITAT held that section 269SS applies only to actual acceptance of money and not to liabilities recorded through journal entries, as the legislative intent is to prevent cash transactions. The provision is restricted to monetary transactions and does not extend to cases where debt or liability arises merely through book entries. Following precedents from the Bombay HC, Delhi HC, and other judicial authorities, the Tribunal concluded the transaction was outside the ambit of section 269SS and deleted the penalty.
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• Land Outside Municipal Limits Not a Capital Asset Under Section 2(14), Exempting Seller from Capital Gains Tax

  Case-Laws - AT : The ITAT allowed the assessee's appeal regarding capital gains tax on land sale, setting aside both the AO's and CIT(A)'s orders. The dispute centered on whether the land qualified as a "capital asset" under s. 2(14), specifically whether it was situated within municipal limits of Sardarsahar. The Tribunal found that revenue authorities failed to properly consider the Rajasthan State Gazette dated 14.07.1988, which established boundary limits under the Rajasthan Nagar Palika Act, 1959. A subsequent letter dated 04.04.2019 clarified that the land was outside municipal limits, contradicting the earlier letter relied upon by the AO. The ITAT held that the tax authorities failed to discharge their evidentiary burden on this crucial jurisdictional fact.
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• Unsecured Loans Additions Deleted After Lender Verification; Cash Seizure Appeal Allowed; Third-Party Search Evidence Invalid Under Section 153A

  Case-Laws - AT : The ITAT dismissed Revenue's appeal regarding unsecured loans under s.68, upholding CIT(A)'s deletion of additions after verifying lenders' documentation and creditworthiness. The Tribunal noted that CIT(A) possesses co-terminus powers with the AO and had properly examined all evidence. Regarding cash found during search, the ITAT allowed the assessee's appeal, accepting that the seized cash belonged to the company where assessee worked as Finance Head, as corroborated by the company's books. The Tribunal rejected additions for alleged on-money payments for flat purchase, ruling that evidence from a third-party search couldn't be used in s.153A proceedings without initiating separate s.153C proceedings with proper satisfaction note. Interest under s.234A was confirmed as mandatory for late filing, while s.234C interest was limited to returned income only.
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• Inventory Valuation Must Exclude Unpaid Excise Duty; Bonus Payments Under Section 43B Require Verification of Actual Payment

  Case-Laws - AT : The ITAT dismissed Revenue's appeal regarding addition for under-valuation of closing work-in-progress. Following precedent from a Coordinate Bench, the Tribunal held that SS145A requires inventory valuation at lower of actual cost or net realizable value, and excise duty should not be included in closing WIP as no such amount was paid since the stage of levy had not arisen. Regarding disallowance under SS43B for bonus/ex-gratia payments, ITAT upheld CIT(A)'s direction to AO to verify whether payments were made before the filing deadline (30/11/2018), characterizing this as limited verification rather than remand. The Tribunal confirmed that SS43B emphasizes actual payment before the return filing date with proper evidence furnished by the assessee.
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Customs

• Gold Kada Detention Case: Customs Authorities Criticized for Failing to Preserve Crucial CCTV Evidence

  Case-Laws - HC : The HC ruled that customs authorities failed to preserve crucial CCTV evidence that would have verified whether the petitioner was wearing the gold kada upon departure, noting that such footage is only available for 30 days. The court emphasized that immediate action should be taken to preserve evidence when complaints of illegal seizure are received. Without this evidence, the legality of the gold kada's detention and confiscation, as well as the alleged illegal seizure of Thai Baht, could not be properly determined. The HC ordered that the petitioner's revision petition be decided within one month from the date of judgment and disposed of the petition accordingly.
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• Customs Can't Confiscate Personal Gold Jewelry Meant for Wedding Use Under Baggage Rules, 2016

  Case-Laws - HC : The HC set aside the confiscation order of personal gold jewelry (kada and chains weighing 85 grams) seized from the petitioner by Customs officials. The Court determined that the items constituted "personal jewellery" under Baggage Rules, 2016, as they were bona fide for personal use at a wedding the petitioner was attending. The Court emphasized that tourists should not face harassment regarding personal jewelry and effects, noting that no show cause notice was issued to the petitioner after detention, violating principles of natural justice. Following Gopika Vennankot Govind precedent, the Court ordered release of the items subject to payment of storage charges and the condition that the jewelry be re-exported.
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• Customs Duty Exemption for Wireless Access Points with MIMO Technology Upheld Without LTE Standards Requirement

  Case-Laws - HC : HC interpreted the phrase "MIMO and LTE Products" in clause (iv) of Serial No. 13 of N/N. 11/2014-Customs dated 11th July, 2014, following the precedent established in Commissioner of Customs v. Ingram Micro India Pvt. Ltd. The Court affirmed CESTAT's interpretation that the exclusion clause applies only to products combining both MIMO technology and LTE standards, not to products featuring either technology alone. Consequently, Wireless Access Points employing only MIMO technology without LTE standards remained eligible for Basic Customs Duty exemption. The Court found no question of law requiring determination and dismissed the appeal.
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• Preprinted Waiver Forms Cannot Substitute Oral Show Cause Notices Under Section 124 of Customs Act

  Case-Laws - HC : HC held that preprinted waiver forms used by Customs Department cannot be considered valid oral show cause notices under Section 124 of the Customs Act. The court directed that passengers must be properly informed about applicable provisions regarding oral SCNs, and personal hearing notices must be provided via WhatsApp, email, and through authorized signatories even if notice is waived. For foreign travelers, personal effects including jewelry declared in the 'Red Channel' with undertaking to re-export should not be detained. The court ordered the Customs Department to conduct sensitization initiatives to prevent unnecessary detention of personal jewelry worn by travelers, and directed the development of a Standard Operating Procedure until the Baggage Rules can be amended to align with current economic realities.
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• Styrene Butadiene Rubber Anti-Dumping Duty Challenge Dismissed After Domestic Industry Withdraws Implementation Request

  Case-Laws - HC : The HC determined that the challenge to the imposition of Anti-Dumping Duty (ADD) on imports of Styrene Butadiene Rubber from the European Union, Korea RP and Thailand had become infructuous. Respondent No. 2, representing the domestic industry, formally communicated to the Government that it no longer pressed for ADD implementation as previously recommended by the Designated Authority. Consequently, the impugned Office Memorandum remained unchallenged. The Court noted that provisional assessment orders issued by CESTAT allowing conditional release of subject goods must now be finalized without ADD imposition, reflecting the domestic industry's withdrawal of its insistence on such duties. The appeal was accordingly disposed of.
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• Customs Duty Exemption Upheld for MIMO-Only Wireless Access Points Under N/N. 11/2014-Customs Interpretation

  Case-Laws - HC : The HC dismissed the appeal regarding interpretation of "MIMO and LTE Products" in N/N. 11/2014-Customs. Following precedent established in Commissioner of Customs v. Ingram Micro India Pvt. Ltd., the court affirmed that the phrase "MIMO and LTE Products" in the exclusion clause applies only to products combining both technologies, not to products featuring either technology alone. Consequently, Wireless Access Points employing only MIMO technology without LTE standards remain eligible for Basic Customs Duty exemption. The court determined that since this question of law was previously settled, no further legal questions arose in the present appeal.
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DGFT

• Govt Expands Food Import Entry Points: LCS Darranga Added as 33rd Land Customs Station for Regulated International Trade

  Notifications : The GoI's DGFT issued Notification No. 03/2025-26 expanding food import entry points by including LCS Darranga in Assam as the 33rd land customs station. The amendment updates List "A" of Appendix-V to Schedule-I (Import Policy), ITC (HS), 2022, synchronizing with FSSAI notifications. Authorized officers at the new entry point include Superintendent/Appraiser/Inspector/Examiner, enabling food import clearance procedures. The modification increases total food import entry points from 161 to 162, facilitating regulated international food trade through the specified land customs station.
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• Government Restricts Roasted Areca Nuts Imports, Implements New CIF Value Threshold for Commercial Importation under Section 08028090

  Notifications : The GoI's DGFT issued Notification No. 02/2025-26 amending import policy for Roasted Areca Nuts under ITC (HS) Codes 08028090 and 20081920. The policy status changed from "Free" to "Prohibited", with a conditional exemption permitting imports if the CIF value is Rs. 351/- or above per kilogram. Specific exemptions apply for 100% Export Oriented Units, Special Economic Zone units, and imports under Advance Authorisation Scheme. The amendment modifies import regulations, effectively restricting Roasted Areca Nuts imports while providing a value-based mechanism for authorized commercial transactions.
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• Updated RBI Authorization List: 13 Banks for Gold and Silver, 2 Banks for Gold Imports in FY 2025-26

  Circulars : The DGFT issued Public Notice No. 01/2025-26 amending Appendix 4B of the Handbook of Procedures, 2023, updating the list of banks authorized by RBI to import gold and silver for FY 2025-26. The notice delineates two categories: 13 banks authorized to import both gold and silver, and 2 banks authorized to import only gold, effective from 01.04.2025 to 31.03.2026. The amendment modifies the existing regulatory framework governing precious metal imports, providing a comprehensive and updated roster of authorized financial institutions for such transactions under the Foreign Trade Policy.
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IBC

• Disciplinary Committee's Erroneous Figures in IBBI Order Lead to Reduction of Insolvency Professional's Suspension Period

  Case-Laws - HC : The HC found that while the IBBI followed procedural requirements, the Disciplinary Committee based its conclusions on erroneous figures that contradicted the Investigating Authority's Report, which had vindicated the appellant's position. This discrepancy likely influenced the severity of the penalty imposed. The court noted that while judicial review typically focuses on decision-making processes rather than outcomes, and courts rarely interfere with penalties unless they "shock the conscience," this case warranted intervention due to factual errors. Rather than remitting the matter back to the DC, which would cause further delay, the HC reduced the appellant's two-year suspension from IRP assignments to the period already served (approximately 16 months), ending the suspension effective immediately.
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• Resolution Plans Cannot Be Rejected Based on Pending Avoidance Applications Under IBC Section 66

  Case-Laws - SC : The SC clarified that applications for fraudulent and wrongful trading under Section 66 of IBC are distinct from avoidance applications under Sections 43, 45, and 50. The Court upheld NCLT's approval of the Resolution Plan, ruling that NCLAT had improperly interfered with the Committee of Creditors' commercial wisdom regarding recoveries from fraudulent transactions. The Court emphasized that judicial review of resolution plans is limited to compliance with Section 30(2) requirements, with commercial decisions left to the CoC's discretion. The SC further determined that the resolution plan did not violate RBI or NHB Acts, as neither statute mandates full payment of deposits. The NCLT was directed to separately adjudicate avoidance applications and Section 66 applications.
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Indian Laws

• Section 34 Application Filed on Next Court Working Day After Holiday Period Deemed Within Limitation Under Arbitration Act

  Case-Laws - SC : The SC held that the respondent's Section 34 application under the ACA, filed on 11.07.2022 (the next court working day), was within the limitation period and required no condonation of delay. The High Court correctly allowed the Section 37 appeal, determining the application was timely filed. The Court declined to interfere with the High Court's interim direction staying execution of pending recovery until merits adjudication, noting the appellant had already withdrawn 50% of the arbitral sum deposited by the respondent. The appeal was accordingly dismissed.
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• Contractual Clause Must Explicitly Prohibit Interest in All Circumstances to Bar Arbitrator from Awarding Pendente Lite Interest

  Case-Laws - SC : The SC held that under the Arbitration Act, 1940, a contractual clause barring interest claims must explicitly prohibit interest in case of disputes, differences, delayed payments, or any other circumstance to restrict an arbitrator's power to award pendente lite interest. Clause 22, which merely prohibited the contractor from claiming interest on payments due, was insufficient to bar the arbitrator from awarding such interest. The Court reduced the pendente lite interest from 15% to 9% (matching the post-award interest already paid), applicable from December 18, 1991, to March 7, 1995, payable within 60 days, considering the time elapsed in litigation and amounts already paid by the respondent.
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• Dishonored Cheque: Complainant Not Required to Prove Financial Capacity, Accused Bears Burden to Rebut Presumption Under Sections 118 and 139

  Case-Laws - SC : In a dishonored cheque case, the SC overturned the High Court's decision, ruling that the complainant is not obligated at the threshold to prove financial capacity to make payments for which the cheque was issued. The Court clarified that Sections 118 and 139 of the Negotiable Instruments Act place the burden on the accused to rebut the statutory presumption, not on the complainant to establish detailed evidence of transactions. The SC found the complainant had successfully established a case under Section 138, and the High Court erred in overturning concurrent findings of guilt by the Trial Court and Appellate Court. The impugned order was set aside and the appeal allowed.
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• Cheque Dishonour Case: Presumptions Under NI Act Sections 118(a) and 139 Successfully Rebutted By Security Deposit Evidence

  Case-Laws - HC : The HC dismissed a petition seeking leave to appeal against an acquittal in a cheque dishonour case. Despite admitted execution of the cheque, the court found the statutory presumptions under Sections 118(a) and 139 of the NI Act had been properly rebutted by the respondent on a preponderance of probabilities. The respondent successfully established that the cheque was given only as security for a smaller sum (1,65,000) rather than for the full amount. The petitioner failed to demonstrate financial capacity to have advanced the alleged 10 lakh loan, with no supporting documentation or income tax returns reflecting such transaction. Following precedent in Sri Dattatraya v. Sharanappa, the HC found no perversity in the trial court's reasoning warranting interference.
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PMLA

• Enforcement Directorate Confirms No Debit Freeze on Accounts; Court Directs Communication to Banks Within Five Days

  Case-Laws - HC : The HC dismissed appellants' application for de-freezing bank accounts, clarifying that no debit freeze exists according to the Enforcement Directorate (ED). The Court ruled that appellants are free to operate their accounts in accordance with law. ED was directed to communicate this position to the respective banks within five working days, including a copy of the order to lift any debit freeze. However, the Court specified that appeals challenging the attachment orders filed before the Tribunal shall be decided on their own merits. The appeal was accordingly disposed of.
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• Provisional Attachment Order Valid Despite 190-Day Delay as COVID Period Properly Excluded Under PMLA Proceedings

  Case-Laws - AT : The AT upheld the provisional attachment order against appellant's property despite being issued 190 days after the PAO, as the intervening COVID-19 period (15.03.2020 to 28.02.2022) was properly excluded per SC's suo moto order. The tribunal confirmed that properties can be attached even when held by non-accused individuals who possess proceeds of crime, following Vijay Madanlal Choudhary. The appellant failed to prove legitimate cash payment of 14,00,000 to the main accused, while evidence showed the appellant received 5,00,000 and an RTGS transfer of 14,00,000 from the accused, which was subsequently transferred to a company owned by the same accused-establishing the appellant's role in layering and laundering proceeds of crime. Appeal dismissed.
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SEBI

• SEBI Revamps InvIT Regulations to Strengthen Governance, Expand Investment Options, and Enhance Trustee Oversight

  Notifications : SEBI amends Infrastructure Investment Trusts (InvIT) Regulations in 2025, introducing significant governance and compliance modifications. Key amendments include enhanced trustee responsibilities with comprehensive oversight roles, expanded investment permissible categories, and refined regulatory compliance mechanisms. The amendment introduces detailed trustee roles encompassing asset management oversight, regulatory reporting, managerial supervision, and stringent due diligence requirements. Notable changes include provisions for filling director vacancies, transfer restrictions on locked-in units, and expanded investment options such as unlisted equity shares and interest rate derivatives. The regulations aim to strengthen investor protection, improve transparency, and establish more robust governance frameworks for Infrastructure Investment Trusts.
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Central Excise

• Extended Limitation Period Cannot Be Invoked Without Evidence of Willful Suppression Under Central Excise Act

  Case-Laws - AT : CESTAT determined appellant's appeal was allowed. The Tribunal ruled the demand for central excise duty was time-barred as mere non-payment of duties cannot justify invoking extended limitation period without evidence of willful suppression or misstatement. While the appellant was correctly denied SSI exemption due to exceeding turnover limits and was liable for duty on articles of jewellery from March 2016, they were entitled to cum-duty benefit. The Tribunal held that demanding duty on exported goods was unjustified as substantive compliance was met despite procedural shortcomings. Consequently, penalties under Section 11AC(1)(c) and Rule 26 were deemed unsustainable. The proceedings were found to comply with principles of natural justice.
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Case Laws:

• GST

• 2025 (4) TMI 238
  Raising of demand against a deceased individual without issuing a show cause notice to the legal representative of the deceased - Section 73 of the Goods and Services Tax Act, 2017 - HELD THAT:- A perusal of the Section 93 of GST Act, would reveal that the same only deals with the liability to pay tax, interest or penalty in a case where the business is continued after the death, by the legal representative or where the business is discontinued, however, the provision does not deal with the fact as to whether the determination at all can take place against a deceased person and the said provision cannot and does not authorise the determination to be made against a dead person and recovery thereof from the legal representative. Once the provision deals with the liability of a legal representative on account of death of the proprietor of the firm, it is sine qua non that the legal representative is issued a show cause notice and after seeking response from the legal representative, the determination should take place. Conclusion - The determination made in the present case wherein the show cause notice was issued and the determination was made against the dead person without issuing notice to the legal representative, cannot be sustained. Petition allowed.

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• 2025 (4) TMI 237
  Cancellation of the petitioner s registration under the UPGST Act, 2017 - HELD THAT:- It does merit acceptance that the petitioner was not obligated to visit the GST portal to receive the show cause notices that may have been issued to the petitioner for 2018-19 through e-mode, preceding the adjudication order dated 29.04.2024 passed in pursuance thereto. It is also not the case of the revenue that any physical/offline notice was issued to or served on the petitioner before the impugned order came to be passed - no useful purpose may be served in keeping the petition pending or calling counter affidavit at this stage or to relegate the present petitioner to the forum of alternative remedy. Petition disposed off.

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• 2025 (4) TMI 236
  Challenge to assessment orders - condonation of delay in filing returns - returns filed beyond the 30-day period specified in Section 62(2) of the Goods and Services Tax Act, 2017 (GST Act) - HELD THAT:- Considering the submissions made by the petitioner and in view of the order passed by this Court in COMFORT SHOE COMPONENTS, REP BY ITS PROPRIETOR RAFEEQUE AHMED VERSUS ASSISTANT COMMISSIONER, AMBUR, VELLORE. [ 2024 (1) TMI 281 - MADRAS HIGH COURT] , this Court is inclined to condone the delay in filing the returns. While condonning the delay, the liberty is granted to the respondent to impose applicable late fee for the delayed period, if any, against the petitioner. The petitioner is directed to file an application before the respondent for condonning the delay in filing the returns within a period of 15 days from the date of receipt of copy of this order - Petition disposed off.

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• 2025 (4) TMI 235
  Challenge to assessment order passed by the second respondent which was subsequently confirmed by the rectification order passed by the second respondent - HELD THAT:- The petitioner is having an appeal remedy before the Deputy Commissioner (GST Appeal), Tirunelveli, under Section 107 of the GST Act, 2017, this writ petition is disposed of, with liberty to the petitioner to approach the appellate authority and raise all the grounds raised in this writ petition in the appeal. In the event, if any appeal is filed within a period of two weeks from the date of receipt of a copy of this order, the appellate authority shall entertain the appeal without reference to the period of limitation and dispose of the same in accordance with law, within a period of three months thereafter. In the interregnum, the respondents shall maintain status quo prevailing as on date.

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• 2025 (4) TMI 234
  Maintainability of appeal - requirement to make a pre-deposit of 10% of the disputed tax amount under Section 107(6)(b) of the CGST Act, 2017 - HELD THAT:- Petitioner s appeal stands dismissed for non payment of mandatory predeposit, though the petitioner has paid the entire tax due as per the order of determination. Further, if the petitioner has paid the entire tax imposed in the order of determination, they are at liberty to apply for the benefit under Section 128A CGST Act. If any difficulty is encountered in filing Form SPL-02; petitioner can approach the 4th respondent, who shall immediately take appropriate measures to rectify any technical glitches to enable the petitioner to claim the benefit under Section 128A of the CGST Act, if otherwise eligible. Petition disposed off.

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• 2025 (4) TMI 233
  Entitlement for reimbursement of the Service Tax/GST - works completed and billed prior to the implementation of the GST regime on July 1, 2017, but paid during the GST regime - HELD THAT:- The report has been prepared by the Superintendent Engineer, Presidency Circle, PWD and has been approved by the Chief Engineer, Head Quarter, Public Works Directorate, Government of West Bengal and Chief Engineer (South Zone), PWD Nodal Officer of Singur Project. Therefore, it will be too late for the respondent now to contend that the sanction was a post facto sanction and, therefore, the question of payment of the amount to the contractor would not arise. This stand taken in the written instruction given to the senior officer is wholly contrary to the stand taken by the department. Thus, in the aforementioned document/report there is one other document containing revised demand of fund for payment for GST in connection with the work as prepared by the Executive Engineer, Bankura Highway Department dated 14.02.2020. This document contains a tabulated statement for first phase and in column No. 10 it has been mentioned Progress expenditure against Service Tax/GST upto date . In column No. 11 it has been mentioned that Expenditure (work + Service TAX/GST) during previous year. Column No. 12 states Progress expenditure (work + Service Tax/GST) upto date . Finally, in the remarks column it has been mentioned that the fund may be placed to Executive Engineer, Hooghly Highway Division No. 1, PW (Roads) Directorate. All these documents clearly show that the claims made by the appellants were never denied or disputed by the department, rather accepted and supported by the department and the reason pleaded was lack of funds. Therefore, the respondent cannot wriggle out of the liability to make payment to the appellants. There will be a direction upon the respondent department to make payment of GST which has been estimated by the appellant which is Rs. 68,98,565 in the case of M/s. Rajlaxmi Construction and Rs. 34,95,220/- in the case of M/s. Biswas Enterprise within a period of twelve weeks from the date of receipt of the server copy of this order. Conclusion - The administrative or funding delays do not negate the legal entitlement to reimbursement of taxes paid under a subsequent tax regime when works were completed and billed under a previous regime. Appeal allowed.

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• 2025 (4) TMI 232
  Jurisdiction - proper officer in terms of Section 4 of the IGST to act under the Integrated Goods and Services Tax Act, 2017 (IGST) without a specific notification from the Government of India - HELD THAT:- A division bench of the High Court of Orissa, at Cuttack, interpreting Section 4 of the IGST in the case of Narayan Sahu vs. Union of India and Others [ 2024 (12) TMI 870 - ORISSA HIGH COURT] , holds that Section 4 of the IGST authorizes cross empowerment inter alia of the officers under the State Tax Act or the Central Tax Act. A division bench of the High Court of Kerala in the case of Pinnacle Vehicles And Services Private Limited v. Joint Commissioner [ 2025 (1) TMI 838 - KERALA HIGH COURT] , has held Section 6 (1) of the CGST cross empowers the officer of the State GST Act or Union Territory GST Act to function as the proper officers under the CGST. The fourth respondent who is an authorized officer under Section 6 of the KGST, is declared to be the proper officer under Section 4 of the IGST. Whether the petition could be entertained before this Court or the petitioner should be left to avail the statutory remedy available under Section 107 of the KGST? - HELD THAT:- While hearing a challenge to the confiscation order passed under Section 130 of the CGST, the Apex Court in the case of Falcon Enterprises Vs. State Of Gujarat [ 2021 (6) TMI 518 - SC ORDER] holds that such orders can only be challenged by way of an appeal under Section 107 of CGST. The Apex Court in the case of Commr. Of State Tax V. Commercial Steel Ltd. [ 2021 (9) TMI 480 - SUPREME COURT] , while deciding the issue of maintainability of a writ petition challenging an order of detention passed under Section 129 (3) of the CGST r/w Section 20 of the IGST, holds that the such orders should be challenged by way of the statutory remedy of appeal provided under Section 107 of CGST and the Writ Petition is only maintainable in certain circumstances. The Division Bench in the case of Kesar Farm V. Addl. Commissioner [ 2019 (12) TMI 1083 - KARNATAKA HIGH COURT] holds that the non-obstante clauses in Sections 129 and 130 of CGST will not affect the remedy of appeal under Section 107 of the CGST and Section 121 of the CGST does not specifically state that orders under Section 129 and 130 of the CGST are not appealable. A co-ordinate bench of this Court in Rajalakshmi Enterprises V. Additional Chief Secretary To Government Finance Department [ 2020 (12) TMI 93 - KARNATAKA HIGH COURT] , following the judgment of the Division Bench in the case of KESAR FARM holds that confiscation orders passed under Section 130 of the KGST Act and CGST Act r/w the IGST Act can only be challenged by way of an appeal under Section 107 of the CGST Act. In the case at hand, the order of confiscation is passed under Section 130 of the KGST supra, exercising power under the IGST. The issue with regard to jurisdiction is answered in favour of the Revenue holding that the Officer appointed under Section 6 of the KGST is a proper officer under Section 4 of the IGST. On the same reason, the appeal against an order of confiscation by an officer under Section 130 of the KGST would undoubtedly be maintainable under Section 107 of the KGST or Section 20 of the IGST, as the case would be. Conclusion - The fourth respondent is a proper officer under the IGST. The petitioner is directed to avail the statutory remedy of appeal under Section 107 of the KGST. The petition before this Court is not entertainable, in the light of existence of an alternative statutory remedy of filing an appeal under Section 107 of the KGST r/w Section 20 of the IGST. Petitioner is granted 4 weeks time to file an appeal - Petition disposed off.

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• 2025 (4) TMI 231
  Correctness of the N/N. 09/2023 dated 31.03.2023 - Validity of SCN and summary SCN - opportunity of hearing not provided - violation of principles of natural justice - HELD THAT:- From the reading of Section 75 (4) of the CGST Act, it is seen that while the assessee may be granted an opportunity where a request is made in writing, the provision also stipulates that such opportunity is to be extended where any adverse decision is contemplated against such person. It must be noticed that in case of contingencies as contemplated under Section 75 (4) of the CGST Act wherein adverse decision is contemplated prior to concluding the proceedings, an opportunity of hearing ought to have been afforded. There is no evidence of such opportunity having been afforded. In the light of contentions raised and noticed regarding violation of Section 75 (4) of the CGST Act, the orders at Annexures-C and C1 are set aside and the matter is remitted to the stage of furnishing of reply to the show cause notice. All contentions are kept open. Conclusion - The challenge to the validity of Notification No. 09/2023 is not pursued by the appellant, and thus, the Court did not make a determination on this issue. The procedural requirement under Section 75(4) of the CGST Act is violated, leading to the setting aside of the adverse orders and remittance for further proceedings. Petition allowed by wayof remand.

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• 2025 (4) TMI 230
  Eligibility for exemption under serial No. 3A of N/N. 9/2017-IT (Rate) dated 28.6.2017 as amended by N/N. 2/2018-IT (Rate) dated 25.1.2018 - supply of services of Dredging Activity undertaken by the applicant given to Government - HELD THAT:- The Gujarat Maritime Board is a body corporate. The term government entity stands omitted from the exemption notification. Even otherwise, in terms of Section 103 of the CGST Act, 2017, the advance ruling pronounced by the Authority is binding only on the applicant. The applicant is not eligible for the benefit of the exemption notification.

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• 2025 (4) TMI 229
  Eligibility for Input Tax Credit (ITC) - expenditure incurred by the applicant, a listed entity, for the buyback of its shares in the course of furtherance of business - HELD THAT:- In terms of sections 16 17 of the CGST Act, 2017, every registered person is entitled to take ITC on any supply of goods or services or both used or intended to be used in the course or furtherance of business subject to the prescribed conditions and restrictions. Where the goods or services or both are used by the said registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax, as is attributable to the purposes of his business. The availment is subject to the ITC blocked u/s 17, ibid. The applicant has erred in assuming that they are eligible for ITC. This is more so since section 16 (1) of CGST Act 2017, states that every registered person shall be entitled to take credit of ITC charged on any supply of goods or services or both used or intended to be used in the course or furtherance of business. Now a conjoint reading of the definitions as provided in section 2 (52), 2 (101) and (102), ibid, states that the activity undertaken, ie. buy back of shares by the applicant is neither a supply of goods nor supply of services. Therefore, in terms of section 16 (1), we find that the applicant is not eligible for availing ITC on the expenditure incurred for the buyback of its shares, it neither being goods nor services, a primary condition for availment of ITC. The applicant is therefore out of the ambit of section 16, ibid and is therefore not eligible to avail ITC on the expenditure incurred for buyback of its shares. The thrust of the applicant s argument is that the expenses incurred towards the buyback of shares is in the course or furtherance of the business activity therefore, should be considered as eligible expenditure for the purpose of ITC. This averment needs to be examined only if the expenditure incurred is towards goods or services. The term securities is excluded from both goods and services. The primary requirement for availment of ITC, not having been met, it is not intended to go into the averment as to whether the same is in the course or furtherance of business activity or otherwise, since it would only be an academic exercise. Conclusion - The applicant is not eligible to avail the ITC involved in the expenditure incurred for buyback of its share and also required to reverse the ITC on common inputs and input services used in relation to the expenditure incurred for buyback of share.

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• 2025 (4) TMI 228
  Levy of GST on goods lost in transit - value of supply for the purpose of payment of GST - requirement to reverse ITC in terms of section 17 (5) (h) of the CGST Act, 2017 - basis of reversal of ITC. Levy of GST on goods lost in transit - HELD THAT:- It is evident that there is no supply of the said goods by the applicant to its customer more so since the loss is before the goods are handed over to the customer. Even on the parameters of place of supply and the time of supply, since the loss occurs prior to both the place of supply and the time of supply, in this peculiar situation, we hold that there is no supply as far as transit loss is concerned - there are merit in the claim of the applicant that they are not liable to pay GST on the transit loss of the gas. Reversal of ITC - HELD THAT:- The provisions of section 17 (5) (h), states that ITC is not eligible on goods lost, stolen, destroyed, written off or disposed off by way of gift or free samples. The goods is lost/destroyed during the course of transit. It is not a manufacturing loss. Section 16 of the CGST Act, 2017, clearly states that a registered person shall be entitled to avail ITC charged on any supply of goods or services or both which are used/intended to be used in the course or furtherance of business. In this case, as far as the goods lost during the course of transit is concerned, it cannot be said that the inputs involved [involved in the goods manufactured subsequently lost in transit] have been used in the course of furtherance of business, as we have already held above that there is no supply involved, as far as the transit loss is concerned. This renders the credit availed on the inputs used in the goods lost in transit to fail the vesting condition attached to the validity of the credit taken under section 16 (1) being proper end use of the inputs. Credit is not a vested right at the time of receipt of inputs but can only be availed on satisfying all vesting conditions, including its participation in a taxable outward supply. This not being the case, we find that the applicant is hit by blocked credit as per section 17 (5), ibid. Conclusion - i) No GST is payable on the goods lost in transit. ii) Question of value of supply for the purpose of payment of GST, as no GST payable. iii) The applicant is not eligible for the ITC in respect of inputs used in the goods lost in transit hence is required to reverse the ITC in terms of section 17 (5) (h) of the CGST Act, 2017. iv) The applicant is required to reverse the ITC involved in the inputs used in the outward supply which was lost in transit, in terms of section 17 (5) (h) read with section 16 of the CGST Act, 2017.

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• 2025 (4) TMI 227
  Eligibility to avail ITC of tax paid on common inputs input services used in relation to the subscription and redemption of mutual funds - HELD THAT:- The averment that redemption of mutual fund and sale of security, a term used in the explanation for computing the value of exempted supply is not same, fails. The redemption as is mentioned in the websites quoted and also in general parlance is nothing but sale of units to the AMC. It does not matter by which nomenclature such a transaction is known until broadly it is a sale in other words cessation of ownership of the units by the unit fund holder, in this case the applicant. Since this was the primary contention on which the applicant was basing his next averment that redemption not being akin to sale, the taxing statute lacks machinery provision to arrive at the value of exempt supply also lacks merit and fails. The plethora of case laws relied upon by the applicant, to substantiate this averment would also not help the applicant case in view of the foregoing. The case laws relied upon by the applicant, therefore, is not being discussed. Conclusion - The applicant is not eligible to avail ITC of tax paid on inputs input services used in relation to the subscription and redemption of mutual funds and also required to reverse the ITC on common inputs and input services used in relation to the subscription and redemption of mutual funds as per Section 17 (2).

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• 2025 (4) TMI 226
  Scope of Supply - inclusion of a free Scraping Tool in the pack of Apsara Oil Pastels - independent supply of the scrapping tool under Section 7 of the CGST Act, 2017 - classification and rate of tax on supply of the Apsara Oil Pastels with Free Scraping Tool - HELD THAT:- There is a supply of scrapping tool which is very much a part and parcel of the kit containing Apsara oil pastels with free scraping tool . The averment of the scraping tool being an accessory to the main product, does not fulfil the criterion set forth that the oil pastel and the scraping tool are integral to the overall supply ie if the scraping tool is removed, the nature of the supply would be affected - the product of the applicant Apsara Oil Pastels with free scraping tool would not fall under the ambit of composite supply. The applicant supplies two products in a single pack/box for a single price. Further as already discussed supra such supply does not constitute composite supply. Therefore, the applicant s product is covered under the category of mixed supply as defined under section 2 (74) of CGST Act, 2017. Tax liability in respect of a supply falling under the ambit of mixed supply is governed by section 8 (b) of CGST Act, 2017 - HELD THAT:- The provision specifies that the tax liability of a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the higher rate of tax in the mixed supply. The product Apsara Oil Pastels with free scraping tool is classifiable under HSN 3926 and would attract GST @ 18% in terms of entry no 111 of schedule-III. Conclusion - i) Inclusion of a free Scraping Tool in the pack of Apsara Oil Pastels amounts to independent supply of the scrapping tool under Section 7 of the CGST Act, 2017. ii) Apsara Oil Pastels with free Scraping Tool is classifiable under HSN 3926 and is leviable to GST @ 18%.

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• 2025 (4) TMI 225
  Eligibility to take ITC on inputs and input services used for construction of concrete tower to support and erect the VCV lines at the factory of the applicant, for manufacture of EHV cables, in terms of Section 17 (5) (c) and (d) of the CGST Act, 2017 - HELD THAT:- The Hon ble Supreme Court in the case of M/s. Safari Retreats P Ltd [ 2024 (10) TMI 286 - SUPREME COURT] while analyzing the expression plant or machinery, held that there could be a plant that is an immovable property; that the word plant not having been defined under the Act, its ordinary meaning in commercial terms will have to be attached to it. The Hon ble Court, thereafter laid down a functionality test, further concluding that if a building qualifies to be a plant, ITC can be availed against the supply of services in the form of renting or leasing the building or premises, provided the other terms and conditions of the CGST Act and Rules framed thereunder are fulfilled; that however, if the construction of a building by the recipient of service is for his own use, the chain will break, and ITC would not be available. Now on examining the matter as to whether it would fall within the other exception of 17 (5) (d), ibid, i.e. construction of an immovable property consisting of a plant or machinery , we find that the Hon ble Court has laid down a functionality test, holding that if a building qualifies to be a plant, ITC can be availed. However, even on this count, if the construction of a building by the recipient of service is for his own use, the chain will break, and therefore, ITC would not be available. It is already held that in the present dispute, the appellant has not been in a position to prove that it is not on his own account. Going by the rationale of the judgement, supra, we hold that on this ground also, the appellant would not be eligible for ITC. The plethora of judgements relied upon by the appellant, would not support his case, more so because, in paragraph 25 in the case of Safari Retreats P Ltd, the Apex Court, has summarized the law regarding interpretation of taxation statutes and thereafter, passed the aforementioned judgement, which we have relied in coming to the aforementioned findings. Even otherwise, we find that the case laws relied upon is not relevant as it mostly pertains to the Income Tax Act. Conclusion - The applicant is not eligible to avail ITC on inputs and input services used for construction of concrete tower to support and erect the VCV lines at the factory of the applicant, for manufacture of EHV cables, in terms of Section 17 (5) (c) and (d) of the CGST Act, 2017.

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• 2025 (4) TMI 224
  Valuation of outward supply as per rule 32 (5) of the CGST Rules, 2017 - amount of difference as per Rule 32 (5) for dealing in second hand goods - Entitlement of ITC on repair/improvement cost - applicability of e way bill and e-invoicing on appellant - taxability on reverse or forward charge on purchase of second hand goods from registered/unregistered dealer. Can the applicant opt for valuation of outward supply as per rule 32 (5) of the CGST Rules, 2017 for the new line of business solely [ie only for dealing in second hand goods] besides following regular rules for their existing business? - HELD THAT:- Since nothing is produced, which takes a contrary view, it is held that the applicant can opt for valuation of outward supply in terms of Rule 32 (5), ibid for dealing in second hand goods while simultaneously following the normal valuation practice for their existing business. Can the applicant opt for valuation of outward supply only for acquisition made from unregistered dealer and for acquisition from registered dealer they continue to pay GST as regular mode [ie by discharging GST on full amount of sales consideration and claim ITC on acquisition cost]? - HELD THAT:- It is clear that the valuation proposed in terms of Rule 32 (5), ibid, is at the option of the supplier and is not mandatory in terms of rule 32 (1) - Now, as far as simultaneous availment of valuation procedure enumerated in rule 32 (5), in respect of second hand goods, where the same are purchased from an unregistered person, and opting out of the valuation prescribed under rule 32 (5), ibid, in respect of purchases from registered persons wherein the applicant wishes to discharge GST on full amount of sales consideration and claims ITC on the purchase, - it is found that this is not something which is barred either by the Act or the Rules. What will be the amount of difference as per Rule 32 (5) for dealing in second hand goods? Does purchase price as per Rule 32 (5) include cost of repair/improvement? - HELD THAT:- As per rule 32 (5), computation of value in respect of margin scheme, shall be difference between the selling price and the purchase price, provided no input tax credit has been availed on the purchase of such goods. The procedure set forth in the rule is unambiguous. It does not provide for inclusion of cost of repair/improvement. The amount of difference as per Rule 32 (5) for dealing in second hand goods would be the difference between the selling price and the purchase price and would not include the cost of repair/improvement. If the purchase price does not include cost of repair/improvement than can ITC of such repair/improvement cost can be claimed? - HELD THAT:- The wordings of Rule 32 (5), also known as margin rule , clearly states that no ITC can be availed on the purchase. The rule provides for minor processing on the second hand goods ie used goods, provided it does not change the nature of the product. If the Legislature intended on allowing ITC in respect of such minor processing, rule 32 (5), ibid, would have provided for availment of ITC in respect of such minor processing. That not being the case, we hold that the applicant is not eligible for availment of ITC in respect of the cost of repair/improvement. Does e way bill and e-invoicing applicable for appellant if they follow margin scheme? If yes then which value should be shown in e-way bill and e-invoice and in which section as the data of e-way bill and e-invoice are getting auto populated in GSTR-1? - HELD THAT:- As is evident, e-way bill and e-invoicing does not find a mention under serial No. 2(a) to (g) of Section 97. For purchase of second hand goods from registered/unregistered dealer, do appellant need to pay any tax on reverse charge/forward charge basis? - HELD THAT:- Again, as far as purchase of second hand goods, from registered person is concerned, we find that the question of the applicant paying tax under reverse /forward charge simply does not arise. This part of the question, is vaguely framed. As far as the question relates to purchase of second hand goods from unregistered dealers is concerned, it is found that the same is exempt from payment of tax under RCM in terms of notification No. 10/2017-CT (R) dated 28.06.2017, provided the supply falls within the ambit of intra-state supply. Conclusion - i) The applicant can opt for valuation of outward supply as per rule 32 (5) of the CGST Rules, 2017 for the new line of business solely [ie for dealing in second hand goods] besides following regular valuation procedure for their existing business. ii) The applicant can opt for valuation of outward supply in terms of Rule 32 (5), ibid, for purchases made from unregistered dealer and for purchases from registered dealer they can pay GST by following the regular mode [ie by discharging GST on full amount of sales consideration and claim ITC]. iii) The purchase price as per Rule 32 (5) will not include cost of repair/improvement. iv) ITC of repair/improvement cost cannot be availed by the applicant in case they are availing the benefit of Rule 32 (5), ibid. v) No ruling for question of applicability of e-way bill and e-invoicing under the margin scheme, including the value to be shown in these documents. vi) No GST is to be paid under RCM for purchase of second hand goods from unregistered dealer if the supply falls within the ambit of intra state supply.

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• 2025 (4) TMI 223
  Classification of rice husk board manufactured, comprising of natural fibre [rice husk powder], calcium carbonate, recycling waste other processing aid as well as PVC resin, wherein PVC acts only s a bonding agent - to be classified as wood and articles of wood under chapter 44 attract 12% rate of GST or not? - HELD THAT:- The applicant has provided a copy of the test report dated 23.12.2024, which confirms the contents of the rice husk board as has already mentioned in the application. However, we find that the entire submission, the contents of the product, etc. exactly resembles the ruling IN RE: M/S. PAPAKA HERBS SPICES PRIVATE LTD. [ 2020 (2) TMI 32 - AUTHORITY FOR ADVANCE RULING, TAMILNADU] to the teeth. It is difficult to believe that this is a coincidence. Even otherwise, it is found that the test report dated 23.12.2024, though from a NABL accredited laboratory, contains a remark that All above parameters are not covered/not accredited under NABL Scope of Accreditation . The test parameters nowhere state the BIS followed, for arriving at the test result. The applicant, it is felt, should have provided the test report from a Government recognised laboratory, as listed in the annexure to CBIC circular No. 43/2017-Customs dated 16.11.2017. The applicant has not provided copies of either the brochure, copies of purchase invoice of inputs, copies of sales invoices, etc. The application os not maintainable.

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• 2025 (4) TMI 222
  Supply of goods or not - goods supplied by the applicant, who became a victim of fraud without receiving consideration - section 21 under the IGST Act - HELD THAT:- Factually, it is not disputed that a supply has been done by the applicant, that the goods were removed which in terms of the FIR have also been received at the destination. The applicant s averment is that since the entire transaction emanated out of a fraudulent/bogus order, it goes out of the ambit of supply. An element of fraud may vitiate a contract, but how it would enable the applicant to move out of the ambit of the term supply as defined under section 7, is neither explained nor forthcoming. The goods supplied by the applicant will be considered as supply of goods in terms of section 20 of the IGST Act, 2017 read with section 12 and 7 of the CGST Act, 2017.

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• 2025 (4) TMI 221
  Eligibility to take ITC for the GST charged by the canteen service provider for the canteen services (on the portion which is borne by the company) for its employees where the canteen facility is mandatory in terms of section 46 of the Factories Act, 1948 read with rule 72 of Gujarat Factories rules, 1963 - HELD THAT:- Input Tax Credit will be available to the applicant in respect of food and beverages as canteen facility is obligatorily to be provided under the Factories Act, 1948, read with Gujarat Factories Rules, 1963 as far as provision of canteen service for employees working at the factory is concerned. It is further held that the ITC on GST charged by the canteen service provider will be restricted to the extent of cost borne by the applicant only.

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• Income Tax

• 2025 (4) TMI 220
  Assessment of trust - corpus donation receipts - addition u/s 68 - corpus donation had been received by the petitioner-Company from entities as struck off the record of the registered companies and therefore, they had to be treated as shell companies - As decided by HC [ 2023 (11) TMI 947 - PUNJAB HARYANA HIGH COURT] appellant could not produce sufficient material to dispel the suspicion which had been raised about the donations received from the companies which were not even based geographically close to the educational institution and the reason to grant the donation was never properly explained HELD THAT:- There is a delay of 388 days in filing the Special Leave Petition which has not been satisfactorily explained. Even otherwise, we have gone through the Special Leave Petition and do not find any merit in the same. Special Leave Petition is, therefore, dismissed on the ground of delay as well as on merits.

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• 2025 (4) TMI 219
  Proceedings for an offence u/s 276-B - non-payment/belated remittance of the TDS - Failure to pay tax to the credit of Central Government - interpretation given to term reasonable cause - as decided by HC [ 2024 (6) TMI 1070 - ANDHRA PRADESH HIGH COURT] reason provided by the Petitioner for the delay in remitting the amount to the Central Government is sufficient to constitute reasonable cause in view of Section 278AA of the I.T. Act and hence criminal prosecution against the Petitioners is not warranted. HELD THAT:- We are not inclined to interfere with the impugned judgment and order of the High Court; hence, the special leave petition is dismissed.

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• 2025 (4) TMI 218
  Validity of reassessment proceedings - reasons to believe - determination of the TPO - non independent application of mind - HELD THAT:- In this case, it is apparent that the AO regarded himself to be bound by the TPO s determination for the subsequent assessment year and felt that he had no option but to issue the notice for reopening the assessment. The directions of the Joint Commissioner of Income Tax or the Commissioner of Income Tax left the AO in no doubt about the bindingness of the TPO s determination and the Commissioner s directions. All this is sufficient to vitiate the initiation of reassessment proceedings. This is a classic case of the AO acting under dictation or on borrowed satisfaction. ITAT in this case, has allowed the assessee s Appeal upon analysing the material on record and correctly concluding that this was not a case where the AO had independently applied his mind to the materials on record. The materials on record showed that the AO had acted under the dictation of his superiors and had issued the notice to reopen the assessment without himself having any reason to believe that the income had indeed escaped assessment. ITAT has relied on the decision of Kelvinator of India Ltd [ 2002 (4) TMI 37 - DELHI HIGH COURT] where it was held that one of the preconditions for reopening is that the AO must have reason to believe that the income chargeable to tax has escaped assessment. We find no error in the ITAT s reasoning. Decided against the revenue.

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• 2025 (4) TMI 217
  TP Adjustment - international transaction of payment of guarantee fees by Assessee to the Associated Enterprise - petitioner submitted that the Tribunal could not have entertained the Misc. Application filed by the Respondent-Assessee u/s 254 (2) as there is no mistake apparent on record - HELD THAT:- On perusal of the Order [ 2024 (7) TMI 1177 - ITAT AHMEDABAD] it appears that the Tribunal has decided the Ground No.4 regarding the adjustment, in relation to the international transaction of payments of guarantee fees to the Associated Enterprise in favour of the Assessee relying upon the Order passed by this Court in [ 2018 (7) TMI 2349 - GUJARAT HIGH COURT] whereby, the Order of the Tribunal for the earlier year i.e., Assessment Year 2009-10 is confirmed. Thus, it would be an academic exercise to decide as to whether the Tribunal was right in exercising its powers under Section 254 (2) of the Act, more particularly, when this Court while rejecting the appeal filed by the Revenue arising from the Order of the Tribunal for the earlier Assessment Year 2009-10 has approved the findings of the Tribunal Tribunal has rightly decided the Ground No.4 pertaining to the upward adjustment of international transaction of payment of guarantee fees to the Associated Enterprise in favour of the Respondent-Assessee. Therefore, without going into the larger question of exercising the powers of the Tribunal u/s 254 (2) of the Act to recall its order, in view of the Order passed by the Tribunal in case of the Assessee for the earlier year was justified or not, the petition is not entertained, in view of the decision stated hereinabove.

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• 2025 (4) TMI 216
  Deduction u/s 36(1)(viii) - special reserve created, in an amount not exceeding 20% of the profit derived from eligible business - HELD THAT:- We are of the view that no exception can be taken to the methodology followed by the assessee in its return, which was sustained by the First Appellate Authority and the Appellate Tribunal in appeal, for the purposes of computation of deduction u/s 36(1)(viii). It is the admitted position that the accounts maintained by the assessee did not show the actual expenditure incurred for the purposes of earning the income for the eligible business. As already noticed, the assessee s accounts showed the figures relating to gross income of the entire business and the gross expenditure incurred for earning the said gross income from the entire business. The accounts also showed the gross income earned in respect of the eligible business. The only figure that was not discernible from the accounts was the gross expenditure incurred for the eligible business. It was under these circumstances that the assessee had computed the proportionate expenses for the eligible business by taking the ratio of the income earned and expenditure incurred in respect of the entire business and applying the said ratio to the income earned in respect of the eligible business. The resulting figure representing the proportionate expenditure for the eligible business was reduced from the income earned in respect of the eligible business to arrive at the profit of the eligible business. Thereafter, 20% of that figure was taken for the purposes of deduction under Section 36(1)(viii) of the I.T. Act. Decided in favour of assessee.

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• 2025 (4) TMI 215
  TDS u/s 194IA - AO rejected the assessee s claim that the land in question was agricultural in nature and therefore outside the purview of section 194IA - AO treated the assessee as an assessee-in-default under section 201(1) of the Act for failure to deduct tax - HELD THAT:- We note that the assessee paid Rs. 21,83,680/- to one seller and Rs. 31,83,680/- to another seller both of which are individually below Rs. 50,00,000/-. In line with the interpretation adopted in the case of Bhikhabhai H. Patel [ 2020 (2) TMI 1032 - ITAT AHMEDABAD] we hold that the provisions of section 194IA of the Act were not attracted in the case of the assessee. CIT(A), while upholding the AO s action, failed to consider the legal issue squarely raised by the assessee and did not deal with the applicable precedent or examine the transaction structure in light of judicial interpretation. The approach of the appellate authority, in summarily concurring with the AO without addressing these key issues, does not meet the standard required under section 250(6) of the Act. The demand raised under section 201(1) and 201(1A) of the Act is liable to be deleted. As the assessee has been held not to be in default for failure to deduct tax u/s 194IA of the Act, all other grounds raised in the appeal including those relating to section 2(14)(iii) of the Act, the proviso to section 201(1) of the Act, the Explanation to section 191 of the Act, and penalty u/s 271C are rendered redundant and academic and are therefore not adjudicated. Accordingly, the assessee could not have been held to be an assessee-in- default under section 201(1) of the Act, and the consequential levy of interest under section 201(1A) of the Act also fails. The orders of the lower authorities are therefore liable to be set aside on this short ground alone.

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• 2025 (4) TMI 214
  Income deemed to accrue or arise in India - Income from providing IT support services - Whether taxable as fees for technical services (FTS ) under Article 13 of the India- United Kingdom Double Taxation Avoidance Agreement (DTAA )? - HELD THAT:- We find that the issues involved are covered in favour of the assessee by the decision of ITAT in assessee s own case [ 2024 (8) TMI 1424 - ITAT DELHI] held condition of make available was not satisfied for services when provided by assessee did not enabled the AEs to apply the technology independently, on conclusion of the yearly contract. The services availed by Petitioner cannot be said to the technical services and Article 13 is wholly inapplicable in the facts and circumstances of the present case. There is nothing to show in the assessment order that the AO had made any enquiry on his own or relied any provisions of the Master Inter- Company Services Agreement (in short MSA ) to show that the training as imparted was of such nature that it made available , the technology to the associate enterprises so that on conclusion of the training the employees of AE s will be unable to use technology on their own. Also fee received by the Assessee is in the nature of reimbursement as it is simply allocation of costs without any mark-up and thus same not be treated as income of the Assessee. The tax authorities below have fallen in error in not appreciating that the reimbursement was on cost to cost basis. Assessee appeal allowed.

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• 2025 (4) TMI 213
  Addition of unexplained cash deposit u/s 69A r.w.s 115BBE - AR submitted that the assessee has received the gift from her relatives and family members HELD THAT:- The assessee has submitted the details of the donors along with the cash amounts received on various occasions to prove that are the exempted gifts were provided to the assessee. In India it is customary to give the gift on the occasion of the marriage anniversary, Diwali, birthday and other festival etc. The assessee claimed the cash which have received on various dates and have been deposited on various dates in cash amounts below Rs 50,000/- except the entry of Rs 3,50,000/- which was deposited by Shri Sandeep Sharma in her account are customary exempted gifts. Assessee has failed to explain why the amount of Rs. 3,50,000/- was deposited by Sh. Sandeep Sharma in her bank account. If the assessee has received customary gifts on the birthday, festivals and family functions then such cash amounts would have been deposited by the assessee every year. Assessee has failed to explain that all amount deposited in her bank account was the customary exempted gift given by her relatives. We accept the contention of the assessee to the extent, the half amount which was deposited in her bank account as customary exempted gift given by her relatives. The half amount of the addition made by AO is deserves to be deleted, by treated as customary exempted gift and in terms of above, appeal of the assessee deserves to be partly allowed.

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• 2025 (4) TMI 212
  Disallowance of PMS fees in computing the capital gain - whether CIT(A) erred ignoring Provisions of Section 48 as per which the expenses which are not wholly and exclusively incurred in connection with transfer of capital assets are not deductible in computing the capital gain and ignoring the fact that PMS fees is indirectly related to equity or derivative transactions. HELD THAT:- We are inclined to hold that the PMS expenses incurred by the assessee by way of fee to the portfolio managers has to be treated as expenses wholly and exclusively incurred in connection with the business of the assessee and therefore, are allowable u/s 37 of the Act. So far as the decision relied on by the ld DR in the caser of Devendra Motilal Kothari [ 2010 (3) TMI 794 - ITAT MUMBAI ] we find the same to be rendered in the context of whether the PMS fee was deductible in computing capital gain. But since we have allowed the issue raised by the assessee in Rule 27 of the ITAT Rules, the decision of the coordinate bench is not applicable to the facts as we have held that PMS Fee is allowable as business expenses u/s 37 of the Act. Since, we have allowed the issue raised by the assessee under Rule 27 of ITAT Rules, the appeal of the Revenue become infructuous and is accordingly, dismissed.

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• 2025 (4) TMI 211
  Undisclosed investment in the plot jointly purchased by assessee with her father - certain digital data was extrapolated from the Mobile data of the assessee, wherein the purchase consideration of plot, purchased by the assessee and her father, having share each and the total consideration as per Mobile Images were worked out by the AO - HELD THAT:- The figures in the Mobile images have been extrapolated, without any reason. No addition could be made on account of such Mobile data or loose paper in the absence of corroborative evidence, for which, the reliance has been placed by assessee on Bombay High Court, different Benches of the ITAT and further reliance on the judgment of Hon ble Apex Court in the case of Common Cause[ 2017 (1) TMI 1164 - SUPREME COURT] are quite apt. Copy of the statement as recorded of the seller, the assessee and other co-owner have been recorded and they have undisputedly stated before the PBPT that no payment of on money have been made and no adverse view have been taken by the department in the hands of seller or in the hand of Sh. Manjeet Singh at all. The said fact has already been stated by the assessee in his argument before the Ld. CIT(A) and, thus, when no adverse conclusion have been drawn in the hands of seller and also that the figures in the Mobile data have been extrapolated and no adverse view has been taken in benami proceedings in the case of the assessee, the addition as confirmed cannot be sustained. Addition on account of cash as seized during the course of search - Since there are six members of the family, who are all filing their returns of income and the assessee himself is an engineer and she is having her own business, there is no justification of sustaining the addition of Rs. 3 lacs as confirmed by the Ld. CIT (A).

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• 2025 (4) TMI 210
  Addition u/s 68 - unexplained cash credit as capital contribution by one of the partners - AO Relying solely on the non-response by partners, treated the capital contribution as unexplained cash credit - assessee submitted that the capital was introduced by its partners through banking channels and supported by ledger accounts and confirmations. HELD THAT:- CIT(A) was justified in deleting the addition made under section 68 of the Act as rightly concluded that the assessee had discharged the initial onus cast under section 68 of the Act. He noted that the failure of the partner to respond to a notice under section 133(6) of the Act was not communicated to the assessee and, even otherwise, does not ipso facto establish that the capital is unexplained. The assessee has satisfactorily discharged the onus cast upon it by furnishing adequate evidence to prove the identity, genuineness and creditworthiness of the partner. Therefore, we find no infirmity in the order passed by the CIT(A), and accordingly, the appeal filed by the Revenue is dismissed.

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• 2025 (4) TMI 209
  Reopening of assessment u/s 147 - material seized by the investigation wing during the course of search u/s 132(1) of the Act in case of Mukesh Banka and his related companies, which revealed that assessee was one of the beneficiary of accommodation entry in the form of unsecured loan - applicability of Sections 147, 148, and 153C - HELD THAT:- We find merit in the contention of AR that where there is a specific provisions existing in the Act overriding all the provisions then the proceeding should be initiated and culminated in consonance with those specific provisions. In this case, the information was found during the course of search u/s 132 on Mukesh Bunka and his group concerns relating to the assessee and therefore, the special provisions as contained in the provisions of Section 153C should have been invoked. We have carefully perused the provisions of Section 153C of the Act and find that the said provisions begin with the non-obstante clause, overriding all other provisions and consequently, proceeding should be initiated u/s 153C of the Act after following the procedure laid down in the section itself. Therefore, it is not open to the department to resort to the provisions of Section 147 read with section 148 of the Act to assess the escaped income which has come to the notice of the department during the course of search u/s 132(1) on some other person. The case of the assessee find force from the decision of Sejal Jewellary and Anr. Vs. Union Ors and Others [ 2025 (2) TMI 870 - BOMBAY HIGH COURT] We are inclined to quash the proceeding-initiated u/s 147 of the Act and consequent order framed by the ld. AO. The appeal of the assessee is allowed on legal issue.

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• 2025 (4) TMI 208
  Reopening of assessment u/s 147 - AO received information form DIT investigation, Kolkata that assessee is a beneficiary of accommodation entries of bogus long term capital gain - HELD THAT:- Reasons are not complete as the details of transactions, such as date of transactions, the person from whom the money has been received and where the transactions have been transacted and how the assessee is beneficiary of bogus Long Term Capital Gain. Reasons recorded were not sufficient as the AO has not recorded his satisfaction and it is, in fact, a case of borrowed satisfaction. So far as the approval of the ld. PCIT is concerned which is said to be mechanical and without application of mind and sans recording his satisfaction, we note that the ld. PCIT has granted approval by mentioning yes, it is fit case then put his signature. In our opinion the said approval is not valid approval as PCIT has not recorded his satisfaction on the basis of facts and proposal place before him by the lower authorities. We are of the view that the reopening of assessment has been invalidly made on two grounds (1) reasons recorded were vague and scanty and (2) the approval has been granted mechanically and is invalid. Consequently we quash the re-opening of assessment as well as assessment framed by the AO. Assessee appeal allowed.

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• 2025 (4) TMI 207
  Initiation of proceedings u/s 148 - Addition of cash deposits - HELD THAT:- Cash deposits in AY 2010- 11 and 2011-12 were to the tune of Rs. 12,87,58,500/- and Rs. 09,07,73,000/- and during the year under consideration, they were to the tune of Rs. 12,39,90,680/-. It is also a fact that the returns for earlier years were filed declaring an income of more than Rs. 50 lacs, thus, the issue of notice u/s 148 ought to have been issued by the ACIT/DCIT, Mandi Gobindgarh, with whom the correct jurisdiction lied and the ITO, Nabha did not have any jurisdiction over the case of assessee. As such, the issue of notice u/s 148, is bad in law and deserves to be quashed. The issuance of notice u/s 148 goes to the root of assumption of jurisdiction by the AO concerned and the ITO, Ward- Nabha after issuance of notice u/s 148 realizing her mistake, he transferred the file to the ACIT/DCIT, Mandi Gobindgarh, who ultimately framed the assessment on the strength of earlier notice u/s 148, dated 28,03.2019 of ITO, Ward Nabha, the ACIT/DCIT should have issued a fresh notice u/s 148 for assumption the jurisdiction and, thus, the assessment proceedings as framed by the ACIT/DCIT, Mandi Gobindgarh are required to be quashed. Cash deposits in the Bank accounts, which was stated to be out of the sales of Harvester Combines and its spares and such sales have been disclosed in the regular books of accounts of the assessee and even copies of the ledger accounts of the parties to whom, the sales have been made, alongwith the sale invoices issued to the customers, giving description of the item sold, amount of sale, address of the party and signatures of the buyers, have been submitted. The manufacturing and trading account and the said cash realized out of the sale of stocks, available with the assessee. There is no justification by the CIT (A) to uphold the addition of Rs. 12,39,90,680/- as unexplained cash credit. As the books of accounts of the assessee have not been rejected either by the AO or by the CIT (A) and if the books of accounts have not been rejected, there was no justification in making the addition as per binding judgment of M/s Ludhiana Steel Rolling Mills [ 2007 (9) TMI 31 - HIGH COURT, PUNJAB AND HARYANA ] Thus, we are of the considered view that both on legal ground of issuance of notice u/s 148 by a non jurisdictional AO and on merit also, the addition as sustained by the CIT(A) on account of deposits in the bank account cannot be sustained. Assessee s appeal is allowed.

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• 2025 (4) TMI 206
  Penalty imposed u/s 271(1)(c) - there was no addition or disallowance made by the AO - HELD THAT:- We in the case of Brijendra Gupta [ 2015 (7) TMI 451 - CALCUTTA HIGH COURT ] has held that where there is no disallowance or addition made by the AO in the income as disclosed in pursuance of the notice u/s 148 of the Act, no penalty can be levied u/s 271(1)(c). The co-ordinate Bench of this Tribunal in Haresh Ghanshyamdas Makhija [ 2024 (3) TMI 940 - ITAT MUMBAI ] has taken a similar view placing reliance on the decision in SAS Pharmaceuticals [ 2011 (4) TMI 888 - DELHI HIGH COURT ] The penalty u/s 271(1)(c) of the Act could not have been levied and the appeal deserves to succeed. Penalty imposed u/s 270A - Under-reporting of income due to misreporting - HELD THAT:- In CIT vs Dodsal Ltd. [ 2008 (7) TMI 5 - HIGH COURT BOMBAY ] which was a case arising out of block assessment in a search case, the Bombay High Court has held that the use of word may in Section 158BFA(2) [which is similarly worded to Section 270A(1)] confers discretion on the AO to direct payment of penalty. Albeit such a discretion is not arbitrary and has to be guided by well-established principles depending upon the facts and circumstances of each case. In the present case, we find that the appellant-assessee is a retired employee of MTNL and had relied upon TRP to file her return. In the return filed in response to notice u/s 148 the appellant has made a voluntary disallowance and paid taxes on the amount of HRA. We find that this is a fit case where the AO could have exercised the discretion not to impose penalty. AO is directed to delete the penalty imposed. Assessee appeal allowed.

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• 2025 (4) TMI 205
  Disallowances u/s 40(a)ia) - non-deduction of tax on the interest payments made towards VIP deposits - HELD THAT:- Respectfully following the decision of the co-ordinate bench of this Tribunal in assessee s own case for the assessment year 2010-11 [ 2025 (3) TMI 596 - ITAT CHENNAI] we hold that recurring deposits cannot be understood as time deposit and its interest payments are not liable for TDS for the assessment year 2009-10 2011-12 also. Similarly, we kept the issue open with regard to Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963 as mentioned by the co-ordinate Bench in para 9 of the Tribunal order cited supra. Therefore, the grounds raised by the Revenue on the issue of disallowance u/s. 40(a)(ia) for non-deduction of tax in interest payments made towards VIP deposits for AYs 2009-10 2011-12 are dismissed. Disallowance made u/s. 14A r.w. rule 8D of IT Rules - AO was of the view that Section 14A of the Income tax Act provides that the expenditure incurred in connection with exempted income has to be excluded while computing the total income - HELD THAT:- Tribunal in assessee s own case [ 2024 (3) TMI 613 - ITAT CHENNAI] for assessment years 2015-16 2016-17 held even in the present case no reason was assigned by the AO for rejecting the explanation of the assessee. In the circumstances, ratio of the decision in the case of Maxopp Investment Ltd [ 2018 (3) TMI 805 - SUPREME COURT] is squarely applicable. We direct the AO to delete the addition made u/s. 14A.

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• 2025 (4) TMI 204
  Denial of deduction claimed u/s 80G - donations made as part of Corporate Social Responsibility (CSR) activities - AO disallowed the deduction claimed on the ground that since these donations form a part of CSR expenditure mandated u/s 135(5) of the Companies Act, 2013, the payments cannot be considered voluntary in nature and cannot be considered as donations, as element of charity missing. HELD THAT:- As in the case of Interglobe Technology Quotient (P) Ltd. [ 2024 (6) TMI 8 - ITAT DELHI] in which held that mandatory nature of CSR expenditure does not justify disallowance of the same u/s 80G, if other conditions of section 80G are fulfilled. As decided in Cheil India P. Ltd [ 2024 (12) TMI 457 - ITAT DELHI] section 80G(2) lists down the sums on which deduction shall be allowed to the assessee. Section 80G falls in Chapter VIA, which comes into play only after the gross total income has been computed by applying the computation provisions under various heads of income, including the Explanation 2 to section 37(1) of the Act. Thus, there is no correlation between suo-moto disallowance in section 37(1) and claim of deduction under section 80G of the Act. As with regard to the reasoning that CSR expenditure are not voluntary but mandatory in nature due to penal consequences, we are of considered view that voluntary nature of donation is by nature of fan that it is not on the basis of any reciprocal promise of donee. The CSR expenditures are also without any reciprocal commitment from beneficiary being philanthropic in nature. The Act permits deduction of donations as per Section 80G of the Act, even though, assessee is not gaining any benefit out of any reciprocity from donee. Similar is the case of CSR expenditure. Thus the reasoning of learned Tax Authority, the CSR expenditure is mandatory, does not justify disallowance of these expenditures u/s 80G, if other conditions of section 80G are fulfilled. There is no allegation of Revenue that other conditions of Section 80G are not fulfilled. Decided in favour of assessee.

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• 2025 (4) TMI 203
  Penalty order u/s 271D - violation of Section 269SS - as argued AO treated the journal entry reflecting the loan as contravening the provisions of Section 269SS despite the fact that the loan amount was routed through banking channels and duly confirmed by the NBFC - HELD THAT:- We find that there is no dispute regarding the fact that the amount of Rs. 15 lakh was paid through banking channels and was duly confirmed by both the NBFC and the concerned party. The loan amount of Rs. 15 lakh was disbursed directly to the said party. We note that the balance amount of Rs. 10 lakh was paid by the assessee to the same party towards film promotion and other incidental charges. In its books of accounts, the assessee recorded the said transaction through a journal entry, recognizing the liability as a loan. Since the assessee is responsible for repaying the said amount, the loan is duly reflected in its books of accounts. A plain reading of Section 269SS reveals that the provision applies to transactions where a deposit or loan is accepted by an assessee otherwise than by an account payee cheque, an account payee draft, or other prescribed banking modes. The scope of this provision is restricted to transactions involving the acceptance of money and does not extend to cases where a debt or liability arises merely due to book entries. The legislative intent behind Section 269SS is to prevent cash transactions, as is evident from clause (iii) of the Explanation to the section, which defines a loan or deposit as a loan or deposit of money. Consequently, a liability recorded in the books of accounts through journal entries such as crediting the account of a party to whom money is payable or debiting the account of a party from whom money is receivable falls outside the purview of Section 269SS, as such entries do not involve the actual acceptance of a loan or deposit in monetary form. The imposition of penalty u/s 271D in relation to Section 269SS is, therefore, not justified, particularly in light in the case of Triumph International Finance (I) Ltd. [ 2012 (6) TMI 358 - BOMBAY HIGH COURT] and Worldwide Township Projects Ltd [ 2014 (6) TMI 47 - DELHI HIGH COURT] AR has further placed reliance on the decision in Noida Toll Bridge Co. Ltd.[ 2003 (1) TMI 46 - DELHI HIGH COURT] wherein has categorically held that the provisions of Section 269SS do not apply to transactions recorded through journal adjustments. The transaction entered into by the assessee is outside the ambit of Section 269SS. Consequently, the penalty levied by the AO under Section 271D amounting to Rs. 15 lakhs is liable to be deleted. The issue was also agitated before the CIT(A), where it was argued that, in the absence of any material evidence indicating that the assessee had engaged in any cash transaction, no adverse inference could be drawn under Section 273B - CIT(A) rejected the assessee s contention. Furthermore, the Ld. DR was unable to rebut any of the submissions advanced by the Ld. AR with any contrary judicial precedents. Accordingly, following the binding decisions we hold that the penalty imposed u/s 271D stands deleted. Decided in favour of assessee.

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• 2025 (4) TMI 202
  Capital gain on sale of land - Nature of land sold - Whether the land sold by the assessee qualifies as a capital asset u/s 2(14)? - addition to income of the Assessee in as much as the land in question was situated beyond the Municipal Limit on Sardarsahar - HELD THAT:- It was within the ambit of AO that it was required to ascertain the distance of land as against the letter issued which was against the very letter relied upon by the Revenue Authority. In fact the letter clearly mentions the Rajasthan State Gazette dated 14.07.1988 which sets the boundary limits under the Rajasthan Nagar Palika Act, 1959. Further, it is from the letter dated 04.04.2019 which clearly specified that the letter relied by the AO, i.e. letter dated 24.08.2016 was issued without considering the aforementioned Gazette and hence, as to why this letter from the same dis-credibility is not part to the discussion or reason given by the ld. CIT(A). Hence, on this count the burden which is required to be discharged by the Assessing Authorities simply remains absent. Now coming to the effect of the letter dated 04.04.2019 wherein it now clearly establishes that the land in question was not situated within the municipal limits of Sardarsahar, the basis of the Rajasthan Gazette dated 14.07.1988 could not be ignored. It arrived at a conclusion that while issuing the letter dated 24.08.2016, the Gazette seems to have been ignored and on realizing the same, the effect of the Rajasthan Gazette could not been ignored. Now this bench is of the view that the order passed by the Assessing Officer dated 28.12.2017 as well as the order upholding the same which passed by the ld. CIT(A) dated 23.08.2024 is hereby set aside and the addition of the income and the capital gain Tax levied thereon is also set aside as per the settled principles of law. Hence, we do not concur with the findings of the CIT(A) and thus the appeal of the assessee is allowed.

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• 2025 (4) TMI 201
  Revision u/s 263 - PCIT said AO has failed to conduct enquiries on some other issues while framing the reassessment - HELD THAT:- We observe that in this case, the proceedings u/s. 147 were initiated on the ground that the assessee has made certain payments from his credit card and verification of these payments is required as assessee did not file any return of income. As observed elsewhere that the AO issued 133(6) notice to the banks and also called for the reply from the banks. We observe that the assessee explained that the payments were made on behalf of the company and the company, in turn, reimbursed these expenses to the assessee. AO satisfied with the reply of the assessee as well as information received from the banks and has taken a pragmatic view and accepted the returned income of the assessee. It is settled position of law that if the point, on which jurisdiction u/s. 148 has been assumed, could not call for any addition, then the AO is not empowered to make other additions de hors the main ground on the basis of which jurisdiction has been assumed u/s. 148 of the Act. AO has duly discharged his duties as an investigator by framing the assessment and the AO has also acted in a judicious manner while discharging his duties of an adjudicator. Therefore, the view of ld. PCIT that the AO has failed to conduct enquiries on some other issues while framing the reassessment, is patently wrong. PCIT cannot enlarge the scope of enquiries in reassessment proceedings particularly when the point on which jurisdiction for 147 has been assumed is not taxable in law and on facts. AO has taken one of the plausible views after calling for information from the banks and the assessee and hence, the view of PCIT vis-a-vis investigation on other issues by AO is not tenable. Assessee appeal allowed.

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• 2025 (4) TMI 200
  Unsecured loans u/s 68 - AO observed that the assessee did not file relevant bank statements of the lenders nor established identity, creditworthiness and genuineness of persons / parties from whom the assessee has taken unsecured loans - CIT(A) deleted addition - revenue agued that as AO had indeed given sufficient opportunities to the assessee in the assessment proceedings and hence the CIT(A) ought not to have taken cognizance of all the additional evidences filed before him - HELD THAT:- It is pertinent to note that the ld. AO also had one more occasion in the remand proceedings to examine these documents, but he chose not to do so. Hence the ld CIT(A) proceeded to examine all the factual details with supporting evidences. Hence we reject the plea of the DR before us to restore this matter to the file of ld AO as in our considered opinion, these facts are not going to change. CIT(A) is having co-terminus powers with that of ld AO and in the instant case, entire evidences had been verified and examined by the ld CIT(A) himself and relief was granted to the assessee. Hence we do not find any infirmity in the order of the ld CIT(A) in this regard. Accordingly, the grounds raised by the revenue are dismissed. Addition towards cash found in the course of search - HELD THAT:- We find that the assessee right from the date of search had always maintained that the seized cash does not belong to him and it belongs to M/s Vibhav Vaibhav Infra Home P Ltd, wherein he is working as the Head of Finance. We find that the said company had also come forward to own up the said cash to have belonged to them by passing entry in the cash book immediately after the date of search. The statement of the assessee u/s 132(4) of the Act gets corroborated with the action of the said company incorporating the cash of Rs 21,00,000/- in the books of the company. Hence the statement u/s 132(4) of the Act in the instant case attains evidentiary value. On perusal of the cash book of the said company, we find that the said company indeed had sufficient cash balance to explain the source. Hence no addition towards the cash found could either be made in the hands of the said company or in the hands of the assessee herein. Accordingly, the Ground No. 1 raised by the assessee is allowed. Chargeability of interest u/s 234A, 234B and 234C - In the instant case, the return was filed by the assessee belatedly. Hence interest u/s 234A of the Act is leviable as per the Act. The chargeability of interest u/s 234B of the Act is consequential in nature and does not require any specific adjudication. It is well settled that interest u/s 234C of the Act is to be made only on the returned income and not on the assessed income. Ground No. 2 raised by the assessee is partly allowed. Addition made on account of alleged on-money paid by the assessee for purchase of flat - Addition u/s 153A - HELD THAT:- In the instant case, no satisfaction note was ever recorded and no proceedings u/s 153C of the Act were initiated on the assessee herein. AR also placed on record a copy of panchanama drawn on 05.11.2016 in the case of Shri Praveen Tyagi in the premises R-9/242, Rajnagar, Ghaziabad. On perusal of the said Panchnama, we find that the name of Shri Naveen Tyagi i.e. assessee herein, does not figure at all. Hence whatever is being found and seized in the aforesaid residential premises of Shri Praveen Tyagi, if they are sought to be used against the assessee, then the department should have proceeded on the assessee u/s 153C of the Act. It is not in dispute that the assessee was independently covered in the search u/s 132 of the act and proceedings were initiated u/s 153A of the Act in his hands for the year under consideration. But that does not mean that evidence found in the search of a third-party premises could be used in the search assessment proceedings of the assessee u/s 153A. The legislature in its wisdom permits two search assessments to be framed for the same assessment year - one u/s 153A of the Act and other u/s 153C of the Act. In the search assessment u/s 153A of the Act, the assessment is to be framed based on the materials found during the course of search of that assessee plus the declared income. In the search assessment u/s 153C of the Act, materials found in the premises of third-party could be used on the assessee provided search material has a bearing on determination of total income of the assessee after recording due satisfaction note as mandated in Section 153C of the Act. This is the clear mandate of law in Section 153A and 153C of the Act. This mandate cannot be changed merely because Shri Naveen Tyagi (assessee herein) is also part of VVIP Limited. Hence, the alleged on-money payment cannot be considered in the search assessment framed in the hands of the assessee u/s 153A of the Act. Addition made on account of gross profit - CIT(A) proceeded to adopt the net profit of the comparable business of earlier years instead of subsequent years - HELD THAT:- We find that the ld CIT(A) had taken cognizance of actual business predominantly carried during the year i.e. trading in electrical goods and it compared the gross profit derived in earlier years from the very same trading activity. He has also taken cognizance of the fact that the assessee had started subcontract work related to civil work only during the year earning a meagre turnover of Rs.33.75 lakhs and the same was not prevalent in earlier years. We do not find any infirmity in the said adoption of profit by the ld CIT(A). Accordingly, ground No. 1 raised by the revenue is dismissed. Addition u/s 68 of the Act on account of unsecured loan - CIT(A) observed that all the receipts and payments were made through regular banking channels and the bank statements of the lender as well as assessee were examined to find out availability of sufficient funds in the bank account before making the said payment by the either party and also examined the return of income of the lender and from the audited financial statements found that it has own fund of Rs.2.27 crore. Hence, ld CIT(A) concluded that the lender is having sufficient creditworthiness to advance loan to the assessee. Since all the 3 ingredients of Section 68 were duly fulfilled, the ld CIT(A) deleted the addition. None of the aforesaid factual findings of the ld CIT(A) were controverted by the revenue before us. Hence, we do not find any infirmity in the order of the ld CIT(A) in granting relief to the assessee. Addition made on account of investment in shares - From the order of the ld CIT(A), it was duly clarified that the investment is only Rs. 1 lakh (10,000 X 10) and not Rs. 10 lakhs. Accordingly, the ld CIT(A) confirmed the addition only to the extent of Rs. 1 lakh and deleted the remaining arithmetic error of Rs. 9 lakhs. We do not find any infirmity in the order of the CIT(A) as what is sought to be corrected is only an arithmetic error committed by the ld AO. Accordingly, ground raised by the revenue is dismissed.

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• 2025 (4) TMI 199
  Addition on account of alleged under-valuation of closing work-in- progress ( WIP ) by not including the excise duty payable in the value of CWIP - factual position that during the year under consideration closing stock of work in progress which was required to be loaded with Excise Duty applicable @ 12.625% - HELD THAT:- As respectfully following above order of our Coordinate Bench in the Assessee own cases we dismiss the present appeal of Revenue as the issue is squarely covered. CIT(A) has rightly deleted the addition. We also hold that Section 145A contemplates valuation of inventory to be made at lower of actual cost or net realisable value and tax, duty, cess or fee (by whatsoever called) shall not be includible in value of closing work in progress as no such amount of excise duty is paid as the stage of levy in law has not arisen. What is contemplated in law is actual payment and not proposed payment. Disallowance u/s 43B - Disallowance of payment of bonus / Ex gratia made - HELD THAT:- As payment of bonus / ex-gratia made before due date of filing the return of income u/s 139(1) of the Act i.e; 30/11/2018 we hold that requisite payment perse appears to have been made as is demonstrated before us. Even section 43B/36 speaks of certain deduction shall apply only on actual payment. Emphasis is on actual payment on or before of filing of return of income and evidence of such payment is furnished by the assessee. We are therefore of the considered view that Ld. CIT has rightly asked the Ld. AO to cross check such evidence of payment and the date of such payment a task primarily to be done by AO. On this issue, to seek remand report from Ld. AO or to contend that CIT(A) has no power of Remand is far fetched. CIT(A) in the impugned order is simply directing the Ld. AO to verify whether payment has been made on or before 30/11/2018 or not, so that it is verified factually that condition of 43B is adhered to it or not by assessee. The directions in sum and substance is on to check evidence / proof of payment and the relevant date of it therefore it can be said to be limited verification and not remand.

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• Customs

• 2025 (4) TMI 198
  Detention and subsequent confiscation of the gold kada - illegal seizure of foreign currency (Thai Baht) - HELD THAT:- This Court is of the opinion that if a complaint was received in this manner, the CCTV footage ought to be preserved immediately as the same is available only for 30 days. Moreover, the CCTV footage of the Petitioner at the time of departure could also have been preserved to determine whether the Petitioner was wearing a gold kada or not at the time of departure. Therefore, in such cases, immediate action ought to be taken when such a complaint is received - Be that as itmay, the Revision Petition of the Petitioner shall be decided within one month from today. Petition disposed off.

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• 2025 (4) TMI 197
  Seeking release of the gold bangle of the Petitioner which has been seized - Time limitation to issue SCN - HELD THAT:- Once the goods are detained, it is mandatory to issue a show cause notice and afford a hearing to the Petitioner. The time prescribed under Section 110 of The Customs Act, 1962, is a period of six months and subject to complying with the formalities, a further extension for a period of six months can be taken by the Department for issuing the show cause notice. In this case, six months period has elapsed. No intimation is stated to have been sent to the Petitioner regarding a further extension of six months having been obtained by the Customs Department. Thus, the detention would no longer be permissible. The time for issuance of show cause notice has already lapsed and in the opinion of this Court, the goods can no longer be detained. The detention is set aside. The Department is directed to return the gold item to the Petitioner within a period of four weeks without charging any storage charges - Petition disposed off.

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• 2025 (4) TMI 196
  Confiscation of goods - Gold jewellery - Violation of principles of natural justice - no SCN issued within the prescribed period and no personal hearing given to the Petitioner - HELD THAT:- After having perused the record, considering the fact that the export certificates were obtained by the Petitioner, and these are jewellery items which are stated to be gifts to the Petitioner by his family members, the Court is inclined to permit release of all the goods. Such release shall be made within a period of four weeks, subject to payment of redemption fee of Rs. 80,000/-. The penalty amount is waived. Petition disposed off.

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• 2025 (4) TMI 195
  Confiscation of gold kada and two gold chains - imposition of redemption fine - no SCN issued to petitioner afte detention - violation of principles of natural justice - HELD THAT:- Prima facie, this Court is of the view that tourists and travellers of this nature ought not to be subjected to harassment by the Customs Officials, especially in respect of personal jewellery and personal effects. In Saba Simran v. Union of India Ors., [ 2024 (12) TMI 19 - DELHI HIGH COURT] the Court decided the validity of the seizure of gold jewellery by the Customs Department from an Indian tourist. The Court considered the ambit of personal effects vis- -vis jewellery under the Baggage Rules, in effect from time to time - The decision would lead to the conclusion that jewellery that is bona fide in personal use by the tourist would not be excluded from the ambit of personal effects as defined under the Rule 2(vi) of the Baggage Rules, 2016. A perusal of the above Rules would show that the Customs Department is required to make a distinction between jewellery and personal jewellery while considering seizure of items for being in violation of the Baggage Rules, 2016 - In the present case, the invitation card of the marriage which the Petitioner was intending to attend has also been placed on record. Thus, the bringing of the jewellery is clearly bona fide. The weight of the gold in this case is just 85 grams and they are personal jewellery of the Petitioner. In view thereof, following the reasoning given in Gopika Vennankot Govind v. Union of India [ 2025 (3) TMI 754 - DELHI HIGH COURT] , the Order-in-Original is set aside. The items shall be released to the Petitioner, subject to payment of storage charges with the condition that the items shall be reexported. Petition disposed off.

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• 2025 (4) TMI 194
  Interpretation of the word and appearing in the clause (iv) of Serial No. 13 of N/N. 11/2014-Customs dated 11th July, 2014 - Multiple Input/ Multiple Output (MIMO) and Long Term Evolution (LTE) Products - CESTAT has interpreted the said terms i.e., MIMO and LTE in conjunction and thereby, held that the subject goods would not be covered in the exclusion clause of the exemption notification. HELD THAT:- This issue has now been decided by a Coordinate Bench of this Court in Commissioner of Customs (Air) Chennai -VII Commissionerate, Chennai v. Ingram Micro India Pvt. Ltd. [ 2022 (9) TMI 594 - CESTAT NEW DELHI ] where it was held that the phrase MIMO and LTE Products in Serial No. 13(iv) of the amended Notification No. 24/2005 applies solely to products combining MIMO technology and LTE standards. The exclusion clause cannot be stretched to encompass products featuring either one of the two technologies. Accordingly, the WAPs imported by the respondent, which employ MIMO technology but not the LTE standards, are entitled to the exemption from Basic Customs Duty. In terms of the decision in Ingram Micro India Pvt. Ltd. no question of law arises in this matter for determination. Appeal dismissed.

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• 2025 (4) TMI 193
  Detention of goods by the Customs Department belonging to the tourists travelling to India, of both Indian and foreign origin - personal jewellery worn by travelers - Baggage Rules - legality of the Customs Department s practice of using preprinted waiver forms for show cause notices (SCN) and personal hearings - HELD THAT:- In Amit Kumar vs. Commissioner of Customs, [ 2025 (2) TMI 385 - DELHI HIGH COURT] , the Court had considered the validity of a preprinted waiver form, being relied upon by the Customs Department, by which the Petitioner was stated to have waived the show cause notice (hereinafter SCN ) and personal hearing. The said preprinted document was alleged to be an oral SCN by the Customs Department in terms of the proviso to Section 124 of the Customs Act. The Court held that the preprinted waiver form cannot be considered to be considered an oral SCN in compliance with Section 124 of the Act. The passengers shall be duly informed about the applicable provisions in respect of issuance of an oral SCN and the procedure thereto. In any event, even if notice is waived, notice of personal hearing would be given to the concerned passenger through Whatsapp, email id as also through the authorized signatory. This would ensure that the passenger s right to a personal hearing cannot be waived off, as is clear from a reading of Section 124 of the Act and the decisions passed by this Court. Accordingly, notice of personal hearing would be given to the passenger so that submissions can be made on behalf of the passenger prior to passing of the adjudicating order - let the Department look into the applicable provisions of law and as part of the next status report, place before the Court, the mechanism which the Department wishes to adopt for issuing oral SCN and providing the opportunity of personal hearing in compliance with the law. Insofar as travellers of foreign origin, whether foreign passport holders or foreign residence permit holders, are concerned, in respect of personal effects including jewellery, so long as the same are declared in the Red Channel and the said travellers undertake to re-export the same, the said personal effects shall not be detained. Since the CBIC and Customs Department is now seeking further time to amend the Baggage Rules and to place the same before this Court, a sensitisation initiative shall be carried out by the Customs Department to all Customs officials. The Customs officials shall ensure that old jewellery of even Indian travellers, personal jewellery which is being worn by the travellers during travel or used jewellery is not unnecessarily detained in a routine manner, so as to ensure that no harassment is caused to travellers coming to India - If the Baggage Rules cannot be amended by the next date of hearing, a Standard Operating Procedure (hereinafter SOP ) shall be placed on record by the next date which shall be followed by the Customs Department till the time the Baggage Rules are amended. Conclusion - i) The Baggage Rules, 2016 require reevaluation to align with current economic realities and to balance the interests of travelers and the need to curb smuggling. ii) Preprinted waiver forms for SCNs and personal hearings are invalid as they contravene Section 124 of the Customs Act. iii) Personal jewellery worn by travelers should not be detained under the Baggage Rules as it constitutes personal effects. Let the Respondents file a further affidavit by the next date of hearing in terms of the directions passed today. The draft SOP as directed above be also placed before the Court - In the facts of this case the concerned Revision Authority is directed to take a decision within one month. List on 19th May, 2025.

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• 2025 (4) TMI 192
  Imposition of Anti-Dumping Duty (ADD) in respect of imports of Styrene Butadiene Rubber of 1500 and 1700 series from the European Union, Korea RP and Thailand - Respondent No. 2 in the present case, submits that it has already written to the Government that it does not press its rights in terms of the recommendation given by the Designated Authority - HELD THAT:- In effect therefore, the domestic industry no longer presses for imposition of ADD. Accordingly, the impugned OM is no longer challenged by the domestic industry. The entire matter has thus become infructuous. However, since the subject goods were provisionally released by the CESTAT subject to certain conditions, the said assessment orders would have to now be finalised bearing in mind that ADD is no longer insisted upon by the domestic industry. Appeal disposed off.

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• 2025 (4) TMI 191
  Seeking implementation of anti-dumping duties in terms of the final findings dated 31st March, 2023 issued by the Respondent No. 2- Ministry of Commerce and Industry, Department of Commerce - extension of the anti-dumping duty on imports of high tenacity polyester yarn (goods) originating in or exported from China - HELD THAT:- The stand of the Petitioner now is that the domestic industry no longer insists on the imposition of anti dumping duty in respect of the goods and therefore, the Petitioner does not press the present petition. The petition is disposed of as infructuous binding the Petitioner to its stand that it no longer insists on imposition of anti dumping duty in respect of the subject goods.

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• 2025 (4) TMI 190
  Interpretation of the word and appearing in the clause (iv) of Serial No. 13 of N/N. 11/2014-Customs dated 11th July, 2014 - Multiple Input/ Multiple Output (MIMO) and Long Term Evolution (LTE) Products - CESTAT has interpreted the said terms i.e., MIMO and LTE in conjunction and thereby, held that the subject goods would not be covered in the exclusion clause of the exemption notification. HELD THAT:- This issue has now been decided by a Coordinate Bench of this Court in Commissioner of Customs (Air) Chennai -VII Commissionerate, Chennai v. Ingram Micro India Pvt. Ltd. [ 2022 (9) TMI 594 - CESTAT NEW DELHI ] where it was held that the phrase MIMO and LTE Products in Serial No. 13(iv) of the amended Notification No. 24/2005 applies solely to products combining MIMO technology and LTE standards. The exclusion clause cannot be stretched to encompass products featuring either one of the two technologies. Accordingly, the WAPs imported by the respondent, which employ MIMO technology but not the LTE standards, are entitled to the exemption from Basic Customs Duty. Since the question of law stands decided, no further questions of law would arise in this appeal. Appeal dismissed.

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• 2025 (4) TMI 189
  Confiscation of Gold Bars bearing foreign markings - Smuggling - burden to prove as per Section 123 of the Customs Act, 1962 - allegation of the Department is that the appellant was not having any valid documents evidencing legal procurement/possession of the said gold bars at the time of the search - penalties - Principles of natural justice. HELD THAT:- The Department has not brought in any corroborative evidence to substantiate the allegation that the gold bars in question were smuggled in nature. Failure to produce documents in respect of the goods available in the shop at the time of search does not ipso facto prove that the said goods are contraband in nature. The allegation of smuggling needs to be proved with cogent reasoning and corroborative evidence thereof. Subsequently, if the appellant could produce documents for its legal purchase, the same cannot be ignored to conclude that the gold is of smuggled in nature. Just because the gold bars in question bear foreign markings, it cannot be presumed that the gold bars were smuggled in nature. This view is supported by the decision in the case of Commissioner of Customs (Prev.), Shillong versus Sri Sangpuia, [ 2005 (1) TMI 263 - CESTAT, KOLKATA] wherein it has been held that In the present case there is no such notification shown to us under these provisions of the Customs Act, 1962. The absence of documents, therefore, does not induce us to share the views of the Commissioner (Preventive) that the goods are of foreign origin and are of smuggled nature. The present appeal made on grounds as in para 2 above cannot be upheld. This Tribunal has to enforce liability as it is written and cannot go into the pleas as made in certain grounds taken by Commissioner (Preventive) in this appeal. The ld. adjudicating authority has absolutely confiscated the gold without any concrete evidence to establish the smuggled nature of the gold bars. Having foreign markings on the gold bars alone not sufficient to conclude that the gold bars in question have been illegally imported into India without payment of applicable customs duties. This view is supported by the decision in the case of Commissioner of Customs (prev.), Shillong versus Manisha Devi Jain [ 2019 (5) TMI 1356 - CESTAT KOLKATA] . Burden of prove - HELD THAT:- The appellant has recorded the legal procurement and possession of the gold bars in question in their books of account. In these circumstances, the appellant has produced evidence as required under Section 123 of the Customs Act, 1962 for legal procurement/possession of the said two gold bars. Thus, the gold bars in question are not liable for confiscation and accordingly, the confiscation of gold bars ordered in the impugned order set aside. Principles of natural justice - HELD THAT:- The Ld. Addl. Commissioner has not supplied the Relied Upon Documents (RUDs) to the appellant and thereby deprived his right to defend himself, which is in violation of the basic principles of natural justice. It is also found that the Ld. Commissioner (Appeals) has not followed the principles of natural justice and passed the impugned order without giving adequate opportunity to the appellant to put forth his defence effectively. Thus, the impugned order is liable to be set aside on this ground alone. Penalty - HELD THAT:- As the confiscation of the two gold bars collectively weighing 100 grams, is not sustainable, no penalty is imposable on the appellant under Section 112(a) and 112(b) of the Customs Act, 1962. Accordingly, the penalty imposed on the appellant in the impugned order is set aside. Conclusion - The absence of documents, therefore, does not induce us to share the views of the Commissioner (Preventive) that the goods are of foreign origin and are of smuggled nature. The impugned order set aside - appeal allowed.

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• Insolvency & Bankruptcy

• 2025 (4) TMI 188
  Avoidance of transactions - Fraudulent or Wrongful trading under Section 66 of the IBC - Validity of Resolution Plan (RP), approved by the CoC and the NCLT, requiring the NCLAT to exercise its jurisdiction under Section 61 of the IBC. What are the Applications for Avoidance of transactions required to be filed by the Resolution Professional in accordance with Chapter III, and what are the Applications in respect of Fraudulent trading or Wrongful trading required to be filed by the Resolution Professional under Section 66 of the IBC? - HELD THAT:- The Applications filed in respect of Fraudulent and Wrongful trading carried on by the CD, could not be termed as Avoidance Applications used for the Applications filed under Sections 43, 45 and 50 to avoid or set aside the Preferential, Undervalued or Extortionate transactions, as the case may be. There is clear demarcation of powers of the Adjudicating Authority to pass orders in the Avoidance Applications filed by the Resolution Professional under Section 43, 45 and 50 falling under Chapter III and the Applications filed by the Resolution Professional in respect of the Fraudulent and Wrongful trading of CD, under Section 66 falling under Chapter VI of the IBC. If the Resolution Professional has filed common applications under Sections 43, 45, 50 and also under Section 66, the Adjudicating Authority shall have to distinguish the same and decide as to which provision would be attracted to which of the Applications, and then shall exercise the powers and pass the orders in terms of the provisions of IBC. What are the mandatory requirements as referred in sub-section (2) of Section 30 read with Regulation 38 of the Regulations, 2016? - HELD THAT:- The entire process right from the submission of RPs by the PRAs till the final approval/rejection of the Plan by the Adjudicating Authority has been duly prescribed, which is mandatory in nature. If there is any non-compliance of the mandatory requirements stated in Section 30(2) of IBC, readwith Regulation 38 of the Regulations, 2016, the Adjudicating Authority is empowered to reject the plan as envisaged in sub-section (2) of Section 31. If however, the plan approved by the CoC as per Section 30(4), meets with the requirements under Section 30(2), the Adjudicating Authority has to approve such plan under Section 31(1), which would be binding to all the stakeholders as stated therein. What is maximization of the value of assets of the Corporate Debtor? - HELD THAT:- The entire process has to be carried out in an absolutely transparent manner, and each and every aspect relating to the RP, and more particularly its financial layout and the measures proposed for maximization of the value of the assets of the CD, has to be placed before the CoC. The CoC, if after considering such measures for maximization of the value of the assets of the CD as proposed by the RA in the RP submitted by it, and considering the feasibility, viability and such other requirements as mandated in the IBC and in the Regulations, 2016, approves the plan with the requisite number of votes as required under Section 30(4), after exercising its commercial wisdom, then the scope of judicial review by the Adjudicating Authority under Section 31 will be limited only to the extent of satisfying itself about the compliance of the requirements of Section 30(2). The judicial review by the Appellate Authority under Section 61 in the appeal against the order of Adjudicating Authority approving the plan, is further limited to the grounds mentioned in Clauses (i) to (v) specified in sub- section (3) of Section 61. Whether the NCLAT should have entertained the Appeals of the 63 Moons under Section 61 of the Code and interfered with the commercial wisdom exercised by the CoC? - HELD THAT:- As per the legislative intent and as per the broad contours of the provisions of IBC, the commercial wisdom of CoC has been given the prominent status, with the least judicial intervention, for ensuring the completion of Resolution Process within the prescribed timelines. As stated earlier, in Essar Steel [ 2019 (11) TMI 731 - SUPREME COURT ], this Court after discussing earlier judgments had observed that what is left to the majority decision of the CoC is the feasibility and viability of a RP, which obviously takes into account all aspects of the plan, including the manner of distribution of funds among the various classes of Creditors. The legislature has consciously not provided for a ground to challenge the justness of the commercial decision expressed by the Financial Creditors, be it to approve or reject the RP. Similar view is taken by the Three Judge Bench in Ghanashyam Mishra [ 2021 (4) TMI 613 - SUPREME COURT ] to the effect that the legislature has given paramount importance to the commercial wisdom of the CoC and the scope of judicial review by the Adjudicating Authority is limited to the extent provided under Section 31 and by the Appellate Authority limited to the extent provided under sub-section (3) of Section 61 of IBC. The NCLAT therefore has clearly transgressed its jurisdiction under Section 61 IBC, by interfering with the clause pertaining to the treatment to the recoveries from the Fraudulent and Wrongful trading under Section 66. Whether the Resolution Plan violated the provisions of RBI Act or NHB Act? - HELD THAT:- Both the Sections 36(A) of NHB Act and 45(QA) of the RBI Act containing almost similar provisions, require the Housing Finance Institution or the Non-Banking Financial Company, as the case may be, to repay the deposits accepted by it in accordance with the terms and conditions of such deposit, however from the bare reading of the said provisions it clearly transpires that in case of non- payment of such deposits, the authorized officer or the CLB as the case may be on being satisfied that it is necessary to safeguard the interest of the company, or of the depositors in the public interest may direct such institution or the company to make repayment of such deposit or part thereof. None of the said provisions mandates full payment of deposits or confers any right upon the depositors to have full payment of such deposits. There is also nothing on record to suggest that any authorized officer under the NHB Act or the CLB under the RBI Act has passed any order to make full payment of deposits to the Appellants. Hence, it could not be said, by any stretch of imagination, that the RP in question, providing for the Distribution mechanism, was contrary to any of the provisions of the RBI Act or of the NHB Act. The CoC rejected the said recommendation by approximately 89% of the CoC in its 20th Meeting, which decision came to be challenged before the NCLAT. The NCLAT also vide the impugned order dismissed the same by holding inter alia that the Administrator was under no obligation to ensure full payment of deposits to the FD Holders under the RBI Act or the NHB Act, and that the decision about the payments to the creditors fell within the commercial wisdom of CoC which was not amenable to judicial review, subject to fair and equitable play. Conclusion - The impugned judgment and order passed by the NCLAT is set aside, and the judgment and order passed by the Adjudicating Authority/ NCLT granting its approval to the Plan Approval Application, and thereby approving the Resolution Plan, is upheld. However, it is clarified and directed that the NCLT shall decide the Avoidance Applications filed by the Administrator under Section 43, 45, and 50, and shall separately decide the Applications under Section 66, and it shall pass the orders in accordance with the powers conferred upon it under Section 44, 48, 49, 50, and under Section 66, as the case may be. Appeal dismissed.

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• 2025 (4) TMI 187
  Failure on the part of IBBI to adhere to the procedure before passing the order of suspension against the appellant - HELD THAT:- Ordinarily, the writ court would not interfere in matters arising out of disciplinary proceedings or administrative decision, save and except where there is apparent or palpable infraction of a statute, statutory rule or regulation or the proceeding displays violation of the principles of natural justice. It is trite that it is the decision making process and not the decision itself which may be open to judicial review under Article 226 of the Constitution of India. Yet another facet to consider such category of matters is on the proportionality of the penalty imposed. It is trite that unless the penalty imposed is such which shocks the conscience of the Court, or that which no prudent man would reach, no interference by Courts is warranted, ordinarily. Even the Investigating Authority s Report vindicated the stand taken by the appellant to the extent of the figures furnished by the appellant, whereas, the DC as well as the learned Single Judge proceeded on the figures mentioned in the SCN ignoring the conclusion reached by the Investigating Authority in its Report dated 08.08.2023. The conclusion based on erroneous figures which are contrary to the Report of the Investigating Authority, which is a fact finding authority, had the potential of persuading the DC to impose a higher and stricter penalty. Various charges levelled against the appellant appear to be aspects which may have inadvertently been overlooked by the DC and it is possible that considered from the above point of view, a penalty, not so severe in nature may perhaps, have been imposed upon the appellant. Ordinarily in such cases, the remit to the DC on this aspect, would be the correct course of action, however, having regard to the fact that almost 1 year and 4 months of the penalty imposed have already lapsed i.e. from 01.12.2023 leaving 8 months remaining, we deem it appropriate not to remit the matter for decision of the DC lest it may get further delayed defeating the purpose of such remit. In that view of the matter, the penalty imposed of two years suspension from taking any assignment as IRP is reduced to the period already under gone and the suspension of the appellant would be deemed to come to an end from the date of this order. Conclusion - i) The IBBI followed the procedure, but the appellant raised valid concerns about the lack of a written order and the scope of investigation, which are not adequately addressed by the IBBI. ii) The DC s conclusions are potentially based on erroneous figures, and the appellant s evidence is not adequately considered, leading to an unjust penalty. iii) The suspension period is reduced to the time already served, thus ending the suspension with the Court s order. Appeal disposed off.

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• PMLA

• 2025 (4) TMI 186
  Money Laundering - dismissal of application preferred by the Appellants seeking de-freezing of the Bank accounts of the Appellants - HELD THAT:- In view of the position taken by ED, it is made clear that there is no debit freeze on these bank accounts and the Appellants are free to operate their bank accounts in accordance with law. ED shall write a communication to the respective banks within five working days, clarifying the above position as also attaching a copy of today s order for the purposes of lifting the debit freeze. The Appeals filed before the Tribunal challenging the attachment orders against these bank accounts shall, however, be decided on their own merits - Appeal disposed off.

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• 2025 (4) TMI 185
  Money Laundering - provisional attachment of the property of the appellant - time limitation - impugned order was passed after a period of 190 days from the date of PAO - attachment of property when appellant is not an accused - Acquisition of property by using proceeds of crime or not. Time limitation - HELD THAT:- In the instant case, attachment order was confirmed beyond the period of 180 days. Thus, by operation of section 5(3) of the Act of 2002, it may cease to exist under normal circumstance. We have been deliberately referred to normal circumstance because small period intervening was affected by Covid-19 which was from 15.03.2020 to 28.02.2022 and if the period aforesaid is excluded, the order of confirmation is within 180 days. Reasons of exclusion of the period is due to Covid-19 and in light of the order passed by the Apex Court in Suo-moto Petition No. 03/2020vide order dated 10.01.2022 [ 2022 (1) TMI 385 - SC ORDER ]. The Apex Court s order is to exclude the period of Covid-19 from 15.03.2020 till 28.02.2022 for the purposes of litigation and even termination of the proceedings. The issue was discussed and decided in the case of Bhuneshwar Prasad Verma versus The Deputy Director, Directorate of Enforcement, Bhubaneswar [ 2024 (10) TMI 227 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI ], where it was held that the period from 15.03.2022 to 28.02.2022 has to excluded because till 28.02.2022 has been excluded by the Apex Court for termination of proceedings and from 1.03.2022, the impugned order was passed within 180 days. Attachment of property when appellant is not an accused - HELD THAT:- The issue was elaborately discussed by this Tribunal in the case of Sant Singh versus The Deputy Director, Directorate of Enforcement, Chandigarh [ 2024 (8) TMI 523 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI ] after referring to the section 5(1) of the act of 2002 and the judgement of the Apex court in the case of Vijay Madanlal Choudhary Vs. Union of India [ 2022 (7) TMI 1316 - SUPREME COURT (LB) ]. It was held if a person is in possession of the proceeds of crime, then a property can be attached even if he is not named as an accused. Acquisition of property by using proceeds of crime or not - HELD THAT:- The appellant failed to prove the payment of Rs. 14,00,000/- to main accused, Shri Shankarlal Khandelwal in cash. While analyzing the account of Syndicate Bank, it was found that the appellant received Rs. 5,00,000/- while transfer of Rs. 14,00,000/- was received through RTGS from Shri Shankar Lal Khandelwal, the accused in the case. It was thereafter paid to M/s Shri GovindKripa Buildcon Pvt. Ltd., which was again a company owned by the accused and thereby proceeds of crime was routed and laundered through the appellant. In the light of statement of the appellant under Section 50 of the Act of 2002 and the material on record, appellant could not show the source to acquire the property in question which otherwise was out of the proceeds of crime. The transfer of money by Shri Shankar Lal Khandelwal to the appellant was to make tainted money to be untainted and thereby it was got transferred by layering of the proceeds of crime. Conclusion - i) The 180-day period for confirming a PAO can exclude time affected by the Covid-19 pandemic. ii) Attachment under the PMLA is not limited to properties held by accused individuals; it extends to any person in possession of proceeds of crime. iii) The property in question is acquired using funds that are proceeds of crime, justifying its attachment. Appeal dismissed.

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• Service Tax

• 2025 (4) TMI 184
  Levy of service tax - income earned by the Respondent from selling allotment rights in respect of flats to buyers - amount charged under the name of Demand Survey - cancellation charges and miscellaneous income received by the Respondent - HELD THAT:- In the opinion of this Court, the CESTAT has followed the decision in Saumya Construction Pvt. Ltd. V. CST, Ahmedabad, [ 2013 (12) TMI 379 - CESTAT AHMEDABAD ] and decisions of Coordinate Benches of CESTAT which have held consistently that when the transaction is one of trading in land and no specific remuneration is fixed in the deal for acquisition of land, the same would not be liable to service tax. Insofar as the small demand of Rs. 5,000/- is concerned, which each of the customers had deposited, the said amount is primarily for the purpose of certain adjustments, if required, at the final stage and the same was on a refundable basis. The Court is not inclined to admit the present appeal - Appeal dismissed.

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• 2025 (4) TMI 183
  Interest on delayed refund - whether the Commissioner (Appeals) ought to have decided the issue on payment of interest on the delayed refunds instead of remanding the same and whether the relevant date for payment of interest on delayed refunds as per Section 11BB of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994? - HELD THAT:- The question of interest on delayed refunds is no longer res integra in as much as the Hon ble Supreme Court of India in the case of Ranbaxy Laboratories Ltd. Versus Union of India [ 2011 (3) TMI 564 - CESTAT, NEW DELHI] referring to the relevant sections held that the liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made. Conclusion - Interest is to be paid to the appellant for the period commencing from the date immediately after expiry of three months from the date of receipt of refund applications till the date of refund of such duty. Therefore, the Commissioner (Appeals) ought to have decided the issue on payment of interest on delayed refunds instead of remanding the matter for a decision by the lower authority. The impugned order is set aside - appeal allowed.

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• 2025 (4) TMI 182
  Invocation of extended period of limitation - intent to evade or not - appellant submits that the appellant is an autonomous unit under the Department of Science and Technology, Govt. of India and they have no intention to evade payment of duty - interest and penalty - HELD THAT:- The appellant has not collected any service tax from their clients for the services rendered by them. The Department has not brought in any evidence to establish that the appellant has intention to evade payment of tax and suppressed any information before the Department. Accordingly, the demand confirmed by invoking the extended period of limitation is not sustainable and hence, we set aside the same. Demand of Service Tax for the normal period - HELD THAT:- The turnover of the appellant during the financial years 2006-07 and 2007-08 are Rs.3,50,085/- and Rs.4,18,370/- respectively. The value of turnover during these two financial years is less than the exemption limits of Rs.4,00,000/- and Rs.8,00,000/- available during the respective financial years. Thus, the appellant is not liable to pay service tax during the normal period of limitation also since their turnover is less than the threshold exemption limit as provided under the respective Notifications issued during the relevant period. Interest - penalty - HELD THAT:- As the demands itself are not sustainable, the question of demanding interest and imposing penalties does not arise. Conclusion - i) The Department has not brought in any evidence to establish that the appellant has intention to evade payment of tax and suppressed any information before the Department. Accordingly, the demand confirmed by invoking the extended period of limitation is not sustainable. ii) The appellant is not liable to pay service tax during the normal period of limitation also since their turnover is less than the threshold exemption limit as provided under the respective Notifications issued during the relevant period. The impugned order is set aside - appeal allowed.

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• 2025 (4) TMI 181
  Liability of appellant to pay Service Tax on freight charges paid for locally hired vehicles in the absence of consignment notes under the transportation of goods by road (GTA) service, as per the reverse charge mechanism - penalty - HELD THAT:- As per Rule 2(1)(d)(v) Of the Service Tax Rules, 1994 read with Notification No. 35/2004-S.T. dated 03.12.2004, in relation to taxable service provided by a goods transport agency, the consignor / consignee, who is making payment towards freight, either himself or through his agent, would be liable to pay Service Tax, if the consignor / consignee of the goods falls under one of the seven categories mentioned therein. Thus, even if the consignor or consignee falls within the ambit of one of the seven categories mentioned in the Notification No. 35/2004-S.T. dated 03.12.2004, the liability to pay service tax on reverse charge arises only when they receive the transportation service from a goods transport agency who issues consignment notes. The appellant has hired vehicles from local vehicle providers who have not issued any consignment notes. Hence, they cannot be considered as goods transport agency within the meaning of Section 65(50b) of the Finance Act, 1994. The liability of the appellant to pay Service Tax under the category of transportation of goods by road (GTA) service arises only when the appellant receives services from a goods transport agency who issues a consignment note, by whatever name it may be called. In these circumstances, the appellant is not liable to pay Service Tax under the category of GTA service in respect of the expenditure incurred by them for transportation of goods during the period from 2004-05 (from January) to 2008-09 (up to December), as the services were not received from a GTA who issues consignment notes. Penalty - HELD THAT:- Since the demand raised against the appellant does not survive, the penalty imposed on the appellant under Section 78 of the Finance Act, 1994 is not sustainable. Further, since there is no liability to pay Service Tax on the part of the appellant in this case, there is no need to take registration and file returns and hence, penalty imposed under Section 77 of the Act is not sustainable. Conclusion - The appellant is not liable to pay Service Tax on the transportation service received by them under reverse charge mechanism. Penalty also set aside. The impugned order is set aside - appeal allowed.

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• 2025 (4) TMI 180
  Denial of Cenvat credit for the reason of nonproduction of original documents against which Cenvat credit has been taken - penalty - HELD THAT:- It is settled by series of decisions that mere nonproduction of the original documents cannot be the ground of denial of Cenvat credit if the same could be verified by any other means. Revenue has failed to produce any evidence to show that the said services were not received to be used by them for providing output services. In case of JSW Steel [ 2025 (1) TMI 1086 - CESTAT CHENNAI] Chennai Bench has observed that the Appellant is entitled to avail the Cenvat Credit based on Certificates/ statements issued by M/s. Indian Bank and based on the photocopies of invoices in the facts of this appeal. Conclusion - Cenvat credit should not be denied solely due to the nonproduction of original documents if the transaction can be verified through other means. Penalty u/s 78 also set aside. Appeal allowed.

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• 2025 (4) TMI 179
  Evasion of service tax - eligibility for basic exemption of 8 Lakhs - applicability of N/N. 6/2005-ST dated 01.03.2005 - Time limitation - interest and penalty - HELD THAT:- The appellant had taken registration under the category of Business Auxiliary Service (BAS) and had been regularly filing returns ST-3 returns during the period from 2005-06 to 2006-07. During the year 2007-08, the appellant availed basic exemption of Rs. 8 lakhs because their taxable turnover in the preceding Financial Year 2006-07 was less than Rs. 8 lakhs. In April 2008, the appellant surrendered their registration. The Department had not raised any objection when the appellant surrendered their registration. It is found that the demand has been raised on the basis of the Audit conducted at other concern i.e. M/s Bharat Ispat, Dibrugarh, where some papers of the appellant had been found. It is also found that no verification was conducted at the end of the appellant. The demand raised without verifying the records of the appellant is not sustainable. Hence, the demand confirmed in the impugned order is not sustainable on merits. Time limitation - HELD THAT:- The Department was fully aware about the facts, when the registration was surrendered by the appellant. No objections were raised at the time of surrendering the registration. The demand was raised by the Department on the basis of an audit conducted on the records of another unit and appellant s records were beyond the power of that audit team - The Department has also failed to bring any evidence on record to suggest suppression or misrepresentation on the part of the appellant. In these circumstances, the entire demand confirmed in the impugned order by invoking extended period of limitation is not sustainable and hence, the same is set aside. Interest - penalty - HELD THAT:- Since the demand of service tax is not sustained, the question of demanding interest and imposing penalty does not arise. Conclusion - The demand for service tax, along with interest and penalties, is unsustainable due to lack of direct verification and improper invocation of the extended period of limitation. Appeal allowed.

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• Central Excise

• 2025 (4) TMI 178
  Levy of Central Excise duty on the amount of sales tax retained after availing benefit extended by the State Government for pre-payment of such sales tax which was collected by the appellant - Applicability of the judgment in the case of M/s Super Synotex (India) Ltd., [ 2014 (3) TMI 42 - SUPREME COURT ] for the period prior to 31.06.2000 - HELD THAT:- The Tribunal felt that the issue was no longer resintegra in view of the Hon ble Supreme Court judgment in the case of M/s Super Synotex (India) Ltd., which was also followed by Co-ordinate Bench of this Tribunal in the case of Honda Motorcycles Scooters India Pvt Ltd., Vs CCE, Delhi-III [ 2016 (9) TMI 533 - CESTAT CHANDIGARH ]. On going through the judgment in the case of M/s Super Synotex (India) Ltd., supra, and it is found that the Hon ble Supreme Court has examined the issue of taxability in respect of amount retained by the assessee by treating the said retention as price of goods under the basic fundamental conception of transaction value as substituted with effect from 01.07.2000 under Section 4 of the Central Excise Act. It also took into account CBEC Circular No. 378/11/98 dated 12.03.1998 which protected industrial units availing incentive scheme as there was conceptual book adjustment of sales tax paid to the Department. The issue involved was that the assessee had not paid the duty on the additional consideration collected towards the sales tax. The Revenue felt that the assessee was availing exemption from the payment of sales tax even though it was showing sales tax but assessable value was shown separately for the payment of Central Excise duty. On the other hand, the assessee said that it was a incentive scheme and not an exemption and therefore the sales tax collected was not includable in the assessable value and the deduction was admissible. It is therefore apparent that in the given situation what have been clearly held that in terms of amendment in Section 4 of the CEA, wherein the concept of transaction value was brought, unless the sales tax is actually paid to the Sales Tax Department of the State Government no benefit towards excise duty can be given under Section 4(4)(d). Therefore, from the plain reading of the judgment in the case of M/s Super Synotex (India) Ltd., it is obvious that the said judgment has not considered the period before 01.07.2000 and therefore the said judgment is only applicable for the period after 01.07.2000. Conclusion - The judgment in M/s Super Synotex (India) Ltd. does not apply to the period prior to 01.07.2000. Consequently, the demand for excise duty for the period up to 30.06.2000 is not sustainable. The appeal is allowed partly, reflecting the Tribunal s determination that the pre-01.07.2000 period was not covered by the judgment in M/s Super Synotex (India) Ltd.

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• 2025 (4) TMI 177
  Demand of differential central excise duty on account of inclusion of the notional cost of drawings and designs supplied free of cost by Maruti Suzuki India Pvt Ltd. in the assessable value of parts and components of motor vehicles manufactured by the appellant and cleared to MSIL - HELD THAT:- The issue raised in the case of Denso India Pvt Ltd. [ 2024 (3) TMI 686 - CESTAT NEW DELHI] was whether the notional cost of specifications in the form of drawings and designs supplied free of cost by Maruti to the potential vendors should be included in the assessable value of the parts or components manufactured by the vendors and cleared to Maruti for their motor vehicles. To appreciate the said issue, the Principal Bench considered the provisions of section 4 of the Central Excise Act, 1944 and Rule 6 of the Valuation Rules and observed that anything which is supplied by the buyers to the manufacture before even identifying the potential seller/ manufacturer cannot be treated as additional consideration for sale. It was, therefore, held that something can be treated as an additional consideration for sale of goods only when there exists a contract of sale or an agreement to sale between two parties and in terms thereof the buyer pays something over and above the price agreed. In other words anything which is supplied by the buyer to the manufacturer even before identifying the potential manufacturer can never be treated as an additional consideration for sale. The Tribunal, therefore, concluded that the drawing and designs supplied by MSIL at the time of identification and short listing of potential vendors for supply of parts and components, the provisions of section 4 1(b) of the Act read with Rule 6 of the Valuation Rules, could not have been invoked as no consideration was received by the vendors from MSIL. It is also pertinent to take note of the fact that the Principal Bench had noted the distinction between mere specification and detailed engineering drawing as considered in the earlier decision in Mangalore Refinery Petrochemicals Ltd. Vs. CC, Mangalore [ 2012 (9) TMI 712 - CESTAT, BANGALORE] , where the Tribunal has held that there is a distinction between mere specifications and detailed engineering drawing. It is only the latter which is covered under rule 9(1)(b)(iv) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (which is now Rule 10(1)(b)(iv) of the Customs Valuation Rules, 2007). The aforesaid decisions are squarely applicable to the facts of the present case and, therefore, the specifications in the nature of design/drawings provided by MSIL were merely layout or dimensions of the desired parts and components as they have to be necessarily manufactured as per the requisite dimensions so that they can be fitted in the vehicle manufactured by the Maruti. Conclusion - The notional cost of specifications provided by MSIL is not includable in the assessable value of the parts and components manufactured by the appellant, leading to the setting aside of the impugned order. The impugned order deserves to be set aside - Appeal allowed.

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• 2025 (4) TMI 176
  Recovery of alleged irregular input credit - rejection of request of cross-examination - violation of principles of natural justice and the provisions of Section 9D of the Central Excise Act, 1944 - HELD THAT:- The Tribunal in the appellant s own case [ 2024 (12) TMI 220 - CESTAT CHANDIGARH ] remanded the matter to the adjudicating authority on the same allegations i.e. denial of cross-examination of the persons whose statements have been relied upon for issuing the show cause notice. Conclusion - The impugned order is unsustainable due to the procedural lapse and the case remanded for fresh adjudication, directing the adjudicating authority to allow cross-examination of the material witnesses. Appeal allowed by way of remand.

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• 2025 (4) TMI 175
  Clandestine removal - violation of principles of natural justice - proceedings held ex-parte in quick succession - demand for central excise duty on exports - non-compliance of the conditions prescribed in Rule 19(3) of the Rules - denial of benefit of SSI exemption - extended period of limitation - penalty. Violation of principles of natural justice - impugned order passed ex-parte without affording sufficient opportunity of being heard - HELD THAT:- The scope of the suo moto petition before the Supreme Court as is evident from the Order dated 10.01.2022 is that the Court took cognizance of the difficulties that might be faced by litigants in filing petitions /applications/suits/appeals/all other quasi-proceedings within the period of limitation prescribed under the General Law of Limitation or under any special laws due to the outbreak of the COVID-19 Pandemic and thereafter due to surge of the virus on public health, it was directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation, as may be prescribed under the General or Special laws. The matters were taken up for hearing virtually before all the forums. The appellant could have availed the facility of appearing online during the various opportunities granted by the Adjudicating Authority. Therefore, there is no substance in the arguments of the appellant that there is violation of the mandate of the Supreme Court or that sufficient opportunity has not been granted in terms of Section 33A of the Act. The impugned order does not suffer from any infirmity in this regard. Demand for central excise duty on exports - HELD THAT:- The appellant is engaged in the manufacture of articles of jewellery and was, therefore, liable to pay central excise duty pursuant to the Union Budget 2016 17 imposing basic excise duty of 1% without credit and 12.5% with credit on articles of jewellery. In compliance to the Public Notice No.07/2016 dated 26th July 2016 , extending the time limit for taking Central Excise registration upto 31 July 2016, the appellant was registered with the Central Excise Department on 29th July 2016. It implies that the appellant had understood the liability towards Central excise duty on manufacture of articles of jewellery and therefore, there is no reason for them not to discharge the central excise duty liability w.e.f. 1st March, 2016 - The appellant having admitted that they had knowledge about the excise duty levied on gold jewellery, the necessary corollary is that the appellant is liable to pay excise duty w.e.f. 1st March 2016. The invoices for sale from Chandni Chowk branch and Karol Bagh branch with the description of the goods as gold ornaments/gold chain in respect of which the appellant had claimed exemption from Central excise duty was admitted by Siri Ajay Goyal that they had mistakenly claimed exemption on the clearance under the said invoices and accepted their duty liability. The goods under and these invoices were covered under the definition of articles of gold jewellery. The excise duty has been rightly confirmed on account of non-inclusion of the value of goods sold on invoices having description 24 Carat Ornaments/Gold Chain valued at Rs.3,42,904/- during the period from 1.03.2016 to 30.06.2017. Benefit of SSI Exemption - HELD THAT:- The total clearances of the appellant for the FY 2015 16 was Rs.1,198.64 crores as per the balance sheet and out of which Rs.793 crores was pertaining to the sale of articles of jewellery as per the statement of Shri R.R. Singla and the sale of excisable goods for the month of March 2016, was Rs.1.71 Cr. as per the Trial Balance. In view of the notification, the threshold limit for SSI exemption was Rs.85 lakhs for the month of March 2016 and Rs.15 crores (as amended) for the preceding financial year. Resultantly, the appellant is not entitled to avail the benefit of SSI exemption either for March 2016 or for FY 2015-16 and FY 2016-17. There are no error in the findings recorded by the Adjudicating Authority in view of the clear and simple wordings of the notification. Cum-duty benefit towards demand of central excise duty - HELD THAT:- It appears from the documents made available, the appellant had not charged the central excise duty from their customers any time during 1.03.2016 to 31.12.2016 in view of the prevailing circumstances at that time. The net sale value of articles of jewellery amounting to Rs.274,28,94,752/- has to be assessed giving the benefit of cum-duty value. By virtue of an amendment an explanation was added to section 4 w.e.f., 14.05.2003 which provides that when duty is not collected separately, the price actually realised is deemed to be cum-duty price. Whether the demand of Rs.65,69,207/- on exported goods is sustainable as these clearances did not qualify as export under Rule 19 of Central Excise Rules, 2002? - HELD THAT:- For facilitating exports, safeguards in the form of procedural requirements were provided whereby the exporter is required to furnish the Bond and the Letter of Undertaking (LUT). The purpose is to ensure that the goods cleared from the manufacturing premises without payment of duty are not diverted in transit and are actually exported, however in the event the goods are not exported, the duty which would be leviable thereon maybe recovered by enforcing the bank guarantee. Coming to the present case, it is an undisputed fact that exports have been physically effected under the supervision of the Proper Officer of Customs and documentary evidence such as invoices and shipping bills have been duly produced by the appellant, however, the appellant has not furnished any Letter of Undertaking/Bank Guarantee/Bond before the Customs or Central Excise authorities - It is not the case of the Revenue that the goods have not been exported rather, the only allegation is that the procedure laid down for availing the benefit of exporting the goods without payment of excise duty have not been followed by the appellant while making the export which is contrary to the principle that a substantive right cannot be denied for want of procedural formalities - there are no substance in raising the demand on the goods exported merely on the ground that the conditions prescribed for export of excisable goods without payment of duty has not been fulfilled. Extended period of limitation - HELD THAT:- The law on invoking the extended period of limitation has been settled over the period by various decisions of the Apex Court and other forums - The extended period of limitation is applicable only when something positive other than mere inaction or failure on the part of assessee is proved. Conscious or deliberate withholding of information by manufacturer is necessary to invoke larger limitation of five years. Similar view was expressed by the Apex Court in Uniworth Textiles Ltd versus Commissioner of Central Excise, Raipur [ 2013 (1) TMI 616 - SUPREME COURT ], where the Court was concerned with the invocation of extended period under Section 28 of the Customs Act and it was observed the conclusion that mere non-payment of duties is equivalent to collusion or willful mis-statement or suppression of facts is untenable. In the case of Mahanagar Telephone Nigam Ltd versus Union of India Ors. [ 2023 (4) TMI 216 - DELHI HIGH COURT ] the Delhi High Court observed that merely because MTNL had not declared the receipt of compensation as payment for taxable service does not establish that it had wilfully suppressed any material fact and therefore, no intent to avoid tax can be inferred by non-disclosure of the receipt in the service tax returns. Penalty - HELD THAT:- The failure to file service tax returns is a violation but the said violation cannot be attributed with intent to evade payment of duty and therefore the penalty imposed under section 11AC Is not sustainable however, since no general penalty has been imposed by the Adjudicating Authority, there is no reason for us to impose any such penalty on the appellant. Personal penalty u/r 26 on Director - HELD THAT:- Since the demand is not sustainable being time barred, consequently the penalty would also not survive. Conclusion - i) The impugned order is not in violation of natural justice as sufficient opportunities are provided. ii) The demand for duty on exported goods is unjustified as substantive compliance is met. iii) Pendants of 24CT purity are liable for duty as they are classified as articles of jewellery. iv) The appellant is entitled to cum-duty benefit but not SSI exemption due to turnover limits. v) The demand is time-barred, and the extended limitation period is inapplicable. vi) Penalties under Section 11AC(1)(c) and Rule 26 are unsustainable. Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (4) TMI 174
  Reopening of the assessment for the year 1996-97 under the CST Act, based on the alleged new material or change in circumstances - inter-state sales under Section 3(a) of the CST Act or consignment sales under Section 6A of the CST Act - HELD THAT:- The indisputable fact is that the show cause notice does not describe what was the new material based on which the assessment was proposed to be re-opened. Moreover, admittedly, assessment has already been carried out for the AY 1996-97 and an assessment order dated 26.11.1998 has been passed. Indisputably, during the course of assessment, cash book, ledger, purchase and sales bills were called for and checked. Indisputably, for the assessment, F Forms, copy of agreement between petitioner and Bhuwalka Trade Links (P) Limited, copies of sale pattials, copies of lorry receipts have been verified. The other connected records have also been verified. After verification of records, the assessment order has been passed. The Apex Court in Ashok Leyland Limited [ 2004 (1) TMI 365 - SUPREME COURT] held that once a declaration has been accepted and acted upon by the Revenue, unless and until on further enquiry made thereto, the particulars furnished were found to be incorrect or untrue, the assessment once made based on Form F cannot be re-opened. The Apex Court went on to hold that if such a declaration is filed and on an enquiry made pursuant to or in furtherance of the particulars furnished are found to be correct by the Assessing Authority, the result thereof, which is evidenced by the expression thereupon , shall, in view of the legal fiction created, would be a transaction otherwise than as a result of an inter-State sale. Furthermore, once such a legal fiction is drawn, the same would continue to have its effect not only while making an order of assessment in terms of the State Act, but also for the purpose of invoking power of re-opening assessment contained in Section 9(2) of the Central Act as well as Section 16 of the State Act. These are nothing but bald allegations with no evidence to speak of. When, in the original assessment, the Assessing Authority had satisfied himself as to the claim of the assessee by way of verifying the details in Form F , apart from the agreement as well as accounts of the Assessee, in the absence of any other material to discredit the details in Form F , the claim could not be rejected under Section 16 proceedings. There is not even a whisper questioning the truthfulness of the contents in Form F . The assessment order is conclusive for all purposes and therefore, re-opening cannot be permitted merely on change of opinion and revenue be given a second innings. Conclusion - The reopening of the assessment is quashed, the transactions are confirmed as consignment sales, and the High Court s jurisdiction is affirmed. Petition allowed.

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• Indian Laws

• 2025 (4) TMI 173
  Whether the contractual clause that bars the appellant/contractor from claiming any interest on any payment, arrears or balance due to it amounts to an express bar on the arbitrator s power to grant pendente lite interest as per the law under the Arbitration Act, 1940? - HELD THAT:- Under the 1940 Act, a stricter approach is followed that requires a clear and express clause against the payment of interest in case of difference, dispute, or misunderstanding, in case of delay of payment, or any other case whatsoever, to constitute a bar on the arbitrator from granting interest. A clause that only provides that interest shall not be granted on amounts payable under the contract would not be sufficient. On the other hand, under the 1996 Act wherein Section 31(7)(a) sanctifies party autonomy, interest is not payable the moment the contract provides otherwise. Clause 22 prohibits the appellant (contractor) from claiming interest on any payment, arrears or balance, which may be found due to him at any time. Applying the above-stated law, we find that this clause does not expressly bar the award of pendente lite interest in the event of disputes, differences, or misunderstandings between the parties, or on delayed payment, or in any other respect whatsoever. Under the 1940 Act, this Court has not readily inferred a bar on the arbitrator from clauses that merely bar the contractor from claiming interest, and the same will apply to this case as well. Considering that the arbitrator entered reference in 1991 and the award was made in 1995, along with the passage of time in litigation as well as the amounts already paid by the respondent including post-award interest @ 9%, it is deemed appropriate to grant 9% pendente lite interest, instead of 15% as granted by the arbitral tribunal, from 18.12.1991 till 07.03.1995 (date of the arbitral award) within a period of 60 days. Application disposed off.

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• 2025 (4) TMI 172
  Dishonour of Cheque - discharge of a legally enforceable debt - rebuttal of presumption under Sections 118 and 139 of the Negotiable Instruments Act - burden of proof on the accused to rebut the presumption - HELD THAT:- The High Court while allowing the criminal revision has primarily proceeded on the presumption that it was obligatory on the part of the complainant to establish his case on the basis of evidence by giving the details of the bank account as well as the date and time of the withdrawal of the said amount which was given to the accused and also the date and time of the payment made to the accused, including the date and time of receiving of the cheque, which has not been done in the present case. Pausing here, such presumption on the complainant, by the High Court, appears to be erroneous. The onus is not on the complainant at the threshold to prove his capacity/financial wherewithal to make the payment in discharge of which the cheque is alleged to have been issued in his favour. In the present case, on an overall circumspection of the entire facts and circumstances of the case, it is found that the appellant succeeded in establishing his case and the Orders passed by the Trial Court and the Appellate Court did not warrant any interference. The High Court erred in overturning the concurrent findings of guilt and consequential conviction by the Trial Court and the Appellate Court. Conclusion - The complainant had successfully established the case under Section 138 of the Act, and the High Court erred in overturning the concurrent findings of the lower courts. The Impugned Order is set aside - appeal allowed.

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• 2025 (4) TMI 171
  Time Limitation for filing application under Section 34 of the Arbitration and Conciliation Act, 1996 (ACA) - HELD THAT:- The respondent s application under Section 34, which was filed on 11.07.2022, i.e., the next working day of the court, must be considered as being filed within the limitation period. Consequently, there was no delay in filing the application and sufficient cause need not be shown for condonation of delay. The High Court therefore rightly allowed the Section 37 appeal and held that the respondent s Section 34 application was filed within the limitation period. It is not required to interfere with the High Court s direction to stay the execution of pending recovery till the matter is adjudicated on merits, since the same is interim in nature and the appellant has already withdrawn 50% of the arbitral sum that was deposited by the respondent. In this view of the matter, the present appeal is dismissed.

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• 2025 (4) TMI 170
  Seeking leave to appeal - Acquittal of accused - Dishonour of Cheque - legally enforceable debt or not - failure to properly apply the statutory presumptions under Sections 118 (a) and 139 of NI Act - HELD THAT:- In proceedings under Section 138 of the NI Act, the law creates a presumption in favour of the holder of the cheque that it was issued in discharge of a legally enforceable debt or liability. Section 118 (a) of the Act presumes that the cheque was made or drawn for consideration, while Section 139 mandates that the Court shall presume that the cheque was issued for the discharge of such liability. Once execution of the cheque is admitted or established, these statutory presumptions operate automatically in favour of the complainant. However, it is equally well-settled that these presumptions are rebuttable. The accused is entitled to demonstrate, by cogent material or circumstances, that the debt or liability did not exist at the time of issuance of the cheque. The presumption does not render the complainant s case infallible, it only shifts the initial burden, which can be discharged by the accused on a balance of probabilities. The Supreme Court, in Rajesh Jain v. Ajay Singh [ 2023 (10) TMI 418 - SUPREME COURT ] held that the phrase unless the contrary is proved in Section 139 does not imply that the accused must necessarily prove the negative, i.e., that the instrument was not issued in discharge of any debt or liability. Instead, it suffices if the accused can demonstrate that the existence of such liability is improbable, so as to persuade a prudent person, under the given circumstances, that no such debt existed. In the present case, the issuance of the cheque and the signature thereon are admitted by the Respondent. However, a closer examination of the record shows that the Trial Court rightly found the statutory presumptions under Sections 118 and 139 to have been rebutted on a preponderance of probabilities. The Respondent, in his statement under Section 313 CrPC, clearly stated that the cheque was given only as security in respect of a smaller sum of Rs. 1,65,000/-, and not towards any legally enforceable liability equivalent to the cheque amount - The Respondent acknowledged his liability to the extent of Rs. 1,65,000/- and expressed his willingness to repay the same, however, he denied any liability for the amount mentioned in the cheque. Though he did not lead any defence evidence, his admissions and explanations were relevant for assessing whether the statutory presumption stood rebutted. Whether the defence so raised by the Respondent was sufficient to rebut the presumptions under Sections 118 and 139 of the NI Act on the touchstone of preponderance of probabilities? - HELD THAT:- This Court finds no infirmity in the Trial Court s conclusion that the Petitioner failed to establish his financial capacity to have advanced the alleged loan of Rs. 10 lakhs to the Respondent. This finding stands well-supported by the inconsistencies in the Petitioner s own evidence, the absence of corroborative documentation, and the failure to produce income tax returns reflecting the alleged loan transaction - it would be profitable to take note of the recent judgment of the Supreme Court in Sri Dattatraya v. Sharanappa [ 2024 (8) TMI 468 - SUPREME COURT ], where the Court upheld the acquittal of an accused in a cheque dishonour case, inter alia, on the ground that the complainant had failed to substantiate the loan transaction either through documentary evidence or by reflecting the same in his income tax returns. The Court further noted that contradictions in the complainant s deposition undermined the credibility of his claim and that, despite the presumption under Section 139 of the NI Act, the accused had succeeded in rebutting the same on a preponderance of probabilities. Conclusion - The Trial Court rightly concluded that the Petitioner s failure to substantiate the source of the alleged loan, his inability to produce any supporting documentation such as bank records or income tax returns, and the inconsistencies in his testimony rendered his claim inherently improbable. The Respondent, through his cross-examination and the surrounding circumstances, successfully rebutted the statutory presumption under Section 139 of the NI Act. This Court finds no perversity or legal infirmity in the Trial Court s reasoning. The impugned judgment, therefore, calls for no interference. Petition dismissed.

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