Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 24, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Detention of goods alongwith the vehicle - breakdown of vehicle - non-extension of the validity of the e-way bill - intent to evade tax or not - the explanation offered by the respondent / writ petitioner was an acceptable explanation and a case cannot be made out that there was a deliberate and willful attempt on the part of the respondent / writ petitioner to evade payment of tax so as to justify invocation of the power u/s 129 of the Act. - Refund of amount paid allowed - HC
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Rectification of mistake - Levy of penalty - U/s 161 of the Act any rectification, which adversely affects any person is possible only after following the principles of natural justice. Since the order impugned substantially affects the assessee as penalty is sought to be imposed, which demand did not form part of notice dated 13.08.2020, without giving an opportunity of hearing, the orders under challenge are set aside. However, the respondents are permitted to proceed further by issuing a fresh notice and pass orders in accordance with law. - HC
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Benefit of exemption - Educational services - services supplied for the exams - As all criteria are complied with and the State Examination Board being the ‘educational institution’ in so far as it provides services by way of conduct of exams at Sr. No. 1 to 12 in the list given is eligible to avail the benefit of exemption - For the other activities like Diploma courses, applicant failed to submit that these are recognized by law, not eligible for exemption - conducting departmental examination is also not eligible for exemption - AAAR
Income Tax
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Claim of deduction u/s 10A / 10AA on Disallowance made u/s 40(a)(ia) due to non deduction of TDS - Business Development Commission paid to its US based Associated Enterprises (AE) - there was no requirement on the part of the assessee to deduct TDS on such payments and accordingly, no disallowance u/s 40(a)(i) would be attracted - Since, the disallowance itself do not survive, the grounds raised in cross-appeal stand dismissed as infructuous. The assessee’s appeal stand dismissed as infructuous. - AT
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TP Adjustment - Extraordinary one-time cost due to change in assumption for actuarial valuation - Since the actuary determined the amount of the provision to be created at the end of the year, the same became an operating cost without any need for reduction. We, therefore, do not find any force in the submission of the ld. AR that a part of the provision for approved gratuity etc. should be treated as non-operating when the full amount of such provision has been claimed as deduction for the year only. - AT
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Reopening of assessment u/s 147 - Non consideration reply of assessee u/s 148A - Since the impugned order under Section 148A(d) has been passed on 5th April, 2022 i.e. after receipt of the detailed reply of the petitioner dated 4th April, 2022, the Assessing Officer should have considered the same as it was available on record. By not considering the reply of the petitioner dated 4th April, 2022, the mandate of Section 148A(c) has been violated as it casts a duty on the Assessing Officer, by using the expression ‘shall’ to consider the reply of the petitioner/assessee in response to the notice under Section 148A(b) before making an order under Section 148A(d). - HC
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Validity of Faceless Assessment Order passed u/s 144B - variation as proposed in the draft assessment order or final draft assessment order or revised draft assessment order - a request for personal hearing through video conference denied - Order set aside - Matter restored back - HC
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Stay of demand - 1st respondent as the appellate authority exercises quasi-judicial powers. Power to consider prayer for stay is incidental and ancillary to the power to hear appeals. As a quasi-judicial authority, Commissioner (Appeals) is not bound by the administrative circulars issued by CBDT. He has to apply his own independent mind in the facts and circumstances of each case. - HC
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Penalty u/s 271(1)(c) - in the present case the result of assessing the income either under the head ‘income from other sources’ or u/s.68 of the Act, the liability to pay any additional tax does not arise and once there is no tax sought to be evaded, penalty u/s.271(1)(c) of the Act cannot be levied. - AT
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Exemption u/s 11 - Profit motive - commercial activities as hit by the proviso to Sec. 2(15) - The majority of rent received by the assessee include rental from marriage functions and rent earned from other events like cultural, spiritual and educational seminars etc. It is nowhere the findings that the assessee has not adhered to the conditions as applicable to a charitable trust or any of the objects of the assessee are profit-motive. Under these circumstances, it could not be concluded that the assessee carried out separate commercial activities and it was hit by the proviso to Sec. 2(15). - AT
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Taxability of a sum received as interest on enhanced compensation - Exemption u/s. 10(37) - Thus interest received under Section 28 of the LA Act by the assessee is part of enhanced compensation and is not liable for Income tax. - AT
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Addition u/s 68 - unexplained cash credit - AO may invoke the provisions of section 147 against the person who where the owners of the bank accounts where the sum are diverted - If the account is found to be operated by the assessee, the assessee is also duty bound to state whether he is an accommodation entry provider or owner of the money. No doubt, onus lies on the assessee. If the assessee gives names of the beneficiary as mentioned in the bank account, the addition deserves to be made in the hands of the beneficiary.- Tri
Customs
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Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between the Republic of India and Japan) Amendment Rules, 2022 - Notification
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Anti-dumping duty (ADD) imposed on PU Leather originating in or exported from China PR - Notification
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Rate of exchange of one unit of foreign currency equivalent to Indian rupees - For Import of Goods and Export Goods - Notification
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Revocation of Customs Broker License - Forfeiture of security deposit - levy of penalty - It was incumbent on the appellant-Custom Broker that they conduct all possible enquiries through independent reliable sources/ documents to verify the credentials of the clients. No such effort made by the appellant and no such document relied upon have been placed on record. Thus, they have failed to observe due diligence in this regard and thus ended up facilitating fake importers. - AT
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Levy of penalty u/s 112 of CA - Smuggling - Gold - The case of Revenue against these appellants have made out on the basis of their statements recorded at the time of investigation or the statement of the co-accused. All such statements were retracted soon thereafter. Further, these statements have also not stood the test of cross-examination during the adjudication proceedings - Levy of penalty against two persons set aside - Against one person, levy of penalty reduced from Rs. 1 lakh. to Rs. 25,000/-. - AT
DGFT
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Enlistment of an Agency and amendment in details of an authorized agency under Appendix 2E of FTP, 2015-2020 - Nag-Vidarbha Chamber of Commerce- authorized to issue Certificate of Origin (Non-preferential) - Public Notice
Corporate Law
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Companies (Incorporation) Second Amendment Rules, 2022 - Form INC-9 substituted - Notification
Indian Laws
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Dishonor of Cheque - complaint has been lodged beyond the statutory period of limitation - the instant case learned ACJM has acted beyond his jurisdiction by issuing summons to the petitioner without even taking cognizance of the offence, contrary to the provision laid down in the Act, without having any occasion of being satisfied for condoning the delay. Taking of cognizance on satisfactory condonation of delay are statutory requirements which cannot be presumed on issuance of process to accused. The impugned order is bad in law and is not tenable under such circumstances. - HC
PMLA
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Nature of transaction - sale and purchase of land or merely investment in the property - there is nothing on record to show that the petitioners were intentionally projecting or claiming any “proceeds of crime” as untainted one. Therefore, in the absence of the same, merely because in the scheduled offence, the CBI investigation suggest that the other accused who had applied for obtaining licence from the department of the State of Haryana in conspiracy with the State functionaries, wherein the petitioners are cited only as witnesses, in the absence of any material, the offence of money laundering under Section 3 of the PMLA is not attracted from the bare perusal of the complaint. - HC
SEBI
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Modification in Cyber Security and Cyber Resilience framework of Stock Exchanges, Clearing Corporations and Depositories - Circular
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Revised format of security cover certificate, monitoring and revision in timelines - to protect the interest of investors - Circular
Central Excise
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Area Bases Exemption - fixation of special rate representing the actual value addition - Recovery of refund / reversal of credit received by the petitioner as per the interim order - Later Hon'ble SC has upheld the validity of withdrawal of area based exemption - the Principal Commissioner, the Respondent No. 2 herein directed to decide the applications of the Petitioner on its own merit as regards the claim for fixation of the special rate to actual value addition to the manufactured goods of the given financial years - HC
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Refund claim - provisional assessment not opted - It is settled that even though the assessee has not opted for provisional assessment but the duty was paid in excess admittedly the assessee’s claim of refund within stipulated time of one year, the refund is admissible. The refund cannot be rejected only on the ground that assessee has not opted for provisional assessment - AT
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Recovery of CENVAT Credit - The finding/the reason quoted is apparently wrong as appellant has been an importer and not the manufacturer. Question of any amount of excise duty does not at all arise to ever be the liability of the appellant. Further the silence of any reference to the availment of credit in Section 28B of Customs Act or Section 11D of Central Excise Act is also observed to be an erroneous finding for the reason that irrespective both the sections are silent about the availment of credit but the simultaneous provisions in Rule 3 and Rule 5 of Cenvat Credit Rules entitle the appellant to avail the said credit. Admittedly the same has not been availed. Hence, the collection of amount of said duty from the customers was justified. - AT
Case Laws:
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GST
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2022 (5) TMI 1078
Maintainability of appeal - period of limitation - case of the petitioner is that the order dated 26.11.2018 was uploaded on common GST portal and, therefore, in terms of the Removal of Difficulties order dated 25.6.2020, the date of service of the order shall be considered as 31.8.2020 and limitation shall start from the aforesaid date - HELD THAT:- The Standing Counsel does not dispute the fact that the issue involved in the present case is squarely covered by the judgment of this Court in M/S J.K. Infratech vs. Additional Commissioner Anr. [ 2022 (3) TMI 909 - ALLAHABAD HIGH COURT] . In view of the Removal of Difficulties order dated 25.6.2020 and the fact that the order dated 26.11.2018 was uploaded on the common GST portal, the order dated 26.11.2018 would be deemed to have been served on the petitioner on 31.8.2020. The limitation for filing the appeal stood suspended through different orders of the Supreme Court till 28.2.2022. The appeal filed by the petitioner cannot be held to be time barred as the same was filed on 1.12.2021. The matter is remitted back to the appellate authority to hear and decide the appeal filed by the petitioner on merits treating the same to have been filed within time.
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2022 (5) TMI 1077
Levy of GST - royalty paid for undertaking mining operations in respect of minor minerals - HELD THAT:- The petitioner shall submit reply to the show cause notice dated 23.03.2022 which is under challenge herein and the proceedings pursuant to the said show cause notice shall go on, however, till the next date of listing no final orders shall be passed by the authority concerned. Two weeks' thereafter shall be available to learned counsel for the petitioner for filing rejoinder affidavit.
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2022 (5) TMI 1076
Revocation of cancellation of registration of petitioner - it is alleged that the appellant did not carry any business from the declared place and the documents filed by the appellant in support of the same are not correct - HELD THAT:- The procedure adopted by the authority while cancelling the registration was thoroughly flawed. Admittedly, when an inspection was conducted by the officers of the department, one of the person, who represented to be the receptionist of the building affirmed that one Mr. Dilip Kumar Agarwal, who was the power of attorney agent of the appellant, Mr. Rohit Varma, used to come to the premises and carried on certain business activities. Nevertheless, the said receptionist could not recognise Mr. Rohit Varma whose photograph appears to have been shown to the said receptionist - The proper course that should have been adopted is to issue a notice directing Mr. Rohit Varma and Mr. Dilip Kumar Agarwal to be personally present in the office of the respondent and the landlord of the premises also should have been summoned. If all the three parties are present, the correct facts will come to light. Had this procedure been adopted, the truth would have been established and a proper order could have been passed either way. The matter requires to be remanded to the original authority, namely, first respondent to redo the matter by conducting a proper enquiry. In the result, the appeal is allowed.
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2022 (5) TMI 1075
Detention of goods alongwith the vehicle - breakdown of vehicle - non-extension of the validity of the e-way bill - intent to evade tax or not - according to the writ petitioner the vehicle transporting goods had broken down and on account of which, there was delay and there was no willful intention to evade payment of tax - HELD THAT:- In the instant case, the bona fides of the writ petitioner has to be tested on the documents, which were available on record. Firstly, it is found that the tax invoice has been raised by Bhaskar Steel and Ferro Alloy Pvt. Ltd. dated 7th September, 2019. There is no dispute as regards the quantity and description of the goods. The said vendor had raised the eway bill dated 7th September, 2019 as the goods were to be despatched from SRMB Srijan Pvt. Ltd. to the writ petitioner, who had its registered office at Kolkata. The said e-way bill was valid upto 9th September, 2019 since the approximate distance was about 168 kilometers. The writ petitioner s case was that they are traders and they had a supply order from Om Dayal Educational and Research Society, which also has its registered office at Kolkata but, however the goods had to be shifted to a place in Durgapur. Therefore, the writ petitioner raised a second e-way bill on 7th September, 2019 and since the distance from SRMB Srijan Pvt. Ltd., Durgapur to the Delhi Public School, Durgapur was only 9 kilometers, the e-way bill was valid only for one day, i.e. 7th September, 2019 to 8th September, 2019 (midnight). The case has to be approached by considering the bona fides of the transaction as to whether the case warrants detention of the goods and collection of tax and penalty. Admittedly, the first e-way bill dated 7th September, 2019 was valid upto 9th September, 2019. Therefore, in the absence of second e-way bill, the tax authorities at Durgapur could not have intercepted or detained the vehicle. Therefore, the explanation offered by the respondent / writ petitioner was an acceptable explanation and a case cannot be made out that there was a deliberate and willful attempt on the part of the respondent / writ petitioner to evade payment of tax so as to justify invocation of the power under Section 129 of the Act. The appellant is directed to process the application for refund filed by the respondent on 7th March, 2022 and orders be passed thereon in terms of the direction issued by the learned writ Court within a period of two weeks from the date of receipt of the server copy of this judgment and order - Appeal dismissed - decided against Revenue.
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2022 (5) TMI 1074
Levy of penalty - rectification of mistake - input tax has been wrongly availed or utilized - Section 161 of the CGST Act - HELD THAT:- Section 127 of the Act which has some importance deals with power to impose penalty in certain cases. It states that where the proper officer is of the view that a person is liable to a penalty and the same is not covered under any proceedings under Section 62 or Section 63 or Section 64 or Section 73 or Section 74 or Section 129 or Section 130, he may issue an order levying such penalty after giving reasonable opportunity of hearing such person. In the instant case, Form GSTR-3A was issued on 21.07.2020 for not filing the returns within the time prescribed. On 13.08.2020, a notice came to be issued under Rule 100(1) of CGST and SGST Rules, 2017/APGST Rules, 2017 read with Section 62(1) of the GGST Act, 2017/APGST Act, 2017 - the penalties have been imposed creating additional liability on the petitioner, which was not reflected in the earlier notice dated 13.08.2020. No opportunity of hearing was given to the petitioner while imposing the said penalty. Section 62 of the Act does not anywhere speaks about imposing penalty. It only speaks about liability for payment of interest subsection (1) of Section 50 or for payment of late fee under Section 47 of the Act. Further, if the penalty is to be imposed in cases, which are not covered under Section 62 or Section 63 or Section 64 or Section 73 or Section 74 or Section 129 or Section 130, the authority can impose penalty after giving reasonable opportunity of hearing such person - under Section 161 of the Act any rectification, which adversely affects any person is possible only after following the principles of natural justice. Since the order impugned substantially affects the assessee as penalty is sought to be imposed, which demand did not form part of notice dated 13.08.2020, without giving an opportunity of hearing, the orders under challenge are set aside. However, the respondents are permitted to proceed further by issuing a fresh notice and pass orders in accordance with law. Petition allowed.
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2022 (5) TMI 1073
Validity of enquiry proceedings - Learned Single Judge Bench while setting aside the levy of GST on Penalty amount, allowed to continue to initiate enquiry proceedings - Violation of principles of natural justice - HELD THAT:- The learned Judge rendered her finding that 'post 01.07.2017, there can be no levy of GST on the amount of penalty', on 05.01.2021, whereas, the appellants obtained the order of interim stay with respect of GST on penalty, only on 24.03.2021 i.e., much later than the order of the learned Judge. Therefore, the said interim order subsequently obtained, cannot be applicable to the facts of the present case and the order of the learned Judge holds good as on 05.01.2021, which warrants no interference. However, it is made clear that there is no bar for the appellants in proceeding with the enquiry as against the respondents, after issuing show cause notices afresh and providing opportunity of hearing. This writ appeal stands disposed of.
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2022 (5) TMI 1072
Benefit of exemption - Educational services - services supplied for the exams mentioned at Sr.No.9 to 15 of the list of exams - eligibility to claim exemption benefit under Sr.No.66(a) (aa) of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 - whether the appellant is eligible for exemption as available under Sl. No. 66 of Notifications No. 12/2017 Central Tax (Rate) dated 28.06.2017? - HELD THAT:- On-going through the aforesaid entry of the said notification, it is found that the said notification has been amended vide notifications No.02/2018-Central Tax(Rate) dated 25.01.2018 and new item (aa) is inserted after item (a) in the entry in column (3) i.e. in Description of Services. The appellant also referred Circular No. 151/07/2021-GST dated 17th June 2021 and submitted that State Examinations Board should be given the same recognition of Educational Institution as is given to NBE. In the said circular, Central Board such as National Board of Examination (NBE) is construed as Educational Institution in so far as it provides services by way of conduct of examinations, including any entrance examination, to the students - these exams do not provide employment to the successful candidates, but make the successful candidates eligible for the posts of the jobs of teachers or lecturers. As all criteria are complied with and the State Examination Board being the educational institution in so far as it provides services by way of conduct of exams at Sr. No. 1 to 12 in the list given at para 26 above, it is observed that the appellant is eligible to avail the benefit of exemption under Sl. No. 66 (aa) of Notifications No. 12/2017 Central Tax (Rate) dated 28.06.2017 for exams at Sr. No. 1 to 1. Whether the appellant is eligible to claim exemption benefit under the Sl. No. 5 of the Notifications No. 12/2017 Central Tax (Rate) dated 28.06.2017 for exams given at Sr. No. 13 and 14? - HELD THAT:- In the instant case, the AAR stated that the activity of conducting examinations by the appellant squarely falls under Heading 9992 (which covers Education Services) and further held that State Examination Board can be considered as Governmental Authority - education can be considered as the act or process of imparting knowledge, especially at a school, college or university. This act of imparting knowledge also includes all the matters relating to imparting and controlling education. The appellant is not eligible to avail the benefit of exemption under Sl. No. 5 of Notifications No. 12/2017 Central Tax (Rate) dated 28.06.2017 for exams at Sr. No. 13 to 14. Departmental exam at Sl. No. 15 in the list given at para 26, cannot be covered either under Sl. No. 5 or under Sl. No. 66 (a) and (aa) of the exemptions Notifications No. 12/2017 Central Tax (Rate) dated 28.06.2017 and therefore, appellant is not eligible to claim the exemption benefit.
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Income Tax
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2022 (5) TMI 1071
Income accrued in India - Taxability of receipt as 'Royalty - revenue from sale of software - India USA DTAA - revenue challenging the remand order passed by ITAT - HELD THAT:- As in pursuance to the impugned remand orders, the AO and Dispute Resolution Panel (DRP) have decided the matter. In fact, appeal of the assessee in second round is pending before the ITAT. ITAT in Assessment Year 2010-11 2011-12 in its order dated 13th April, 2022 (passed during the pendency of the present appeals) has not only followed the decision of the Supreme Court Engineering Analysis Centre of Excellence Pvt. Ltd [ 2021 (3) TMI 138 - SUPREME COURT] but has also followed the decisions of this Court dated 15th March, 2022 and 7th March, 2022 whereby the appeals filed by the Revenue against the respondent/assessee on similar questions of law were dismissed. Consequently, keeping in view the subsequent orders deciding the issue of royalty passed by the ITAT, this Court is of the view that the present appeal challenging the orders of remand and seeking a decision by the ITAT is infructuous. In fact, some of the cross-appeals filed by the respondent/assessee against the same impugned orders have today been dismissed as infructuous.
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2022 (5) TMI 1070
Income deemed to accrue or arise in India - licensing of software products of Microsoft in the Territory of India by the Respondent was not taxable in India as Royalty under Section 9(1)(vi) read with Article 12 of the Indo US DTAA - whether Tribunal has failed to appreciate that the distribution model in the case of the respondent-assessee involved making of multiple copies of the software clearly indicating transfer of copyright? - HELD THAT:- The issue raised in the present appeals is no longer res integra as the Supreme Court in Engineering Analysis Centre of Excellence Private Limited vs. Commissioner of Income Tax and Anr. [ 2021 (3) TMI 138 - SUPREME COURT] held that the payment received by EYGSL (UK) for providing access to computer software to its member firms of EY Network located in India, that is, EYGBS (India), does not amount to royalty liable to be taxed in India under the provisions of the Income Tax Act, 1961 and the India-UK DTAA.- Decided in favour of assessee.
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2022 (5) TMI 1069
Reopening of assessment u/s 147 - Validity of Order passed u/s 148A(d) and the notice issued u/s 148 - HELD THAT:- This Court is of the view that even if the re-assessment was being done for verification in accordance with Explanation 1 to Section 148, nothing prevented the AO from conducting an enquiry with respect to the said information in accordance with Section 148A(a) - In any event, it was all the more necessary in the present case for the AO to thoroughly scrutinise the contentions and submissions advanced by the petitioner-assessee before passing an order under Section 148A(d) of the Act. In the present case, the petitioner has placed on record an acknowledgement of the reply dated 4th April, 2022 received by him from the e-filing Portal of the Income Tax Department. The said acknowledgment bears the number 579354131040422. From the said acknowledgment number it is apparent that the petitioner had filed its reply on 4th April, 2022. Since the impugned order under Section 148A(d) has been passed on 5th April, 2022 i.e. after receipt of the detailed reply of the petitioner dated 4th April, 2022, the Assessing Officer should have considered the same as it was available on record. By not considering the reply of the petitioner dated 4th April, 2022, the mandate of Section 148A(c) has been violated as it casts a duty on the Assessing Officer, by using the expression shall to consider the reply of the petitioner/assessee in response to the notice under Section 148A(b) before making an order under Section 148A(d). This Court in Fena Pvt. Ltd. [ 2022 (5) TMI 892 - DELHI HIGH COURT] had quashed the order passed under Section 148A(d) of the Act in similar circumstances i.e. where Assessing Officer had not taken into consideration the replies along with the documents/evidences filed by the assessee before passing the order under Section 148A(d) of the Act. The impugned order under Section 148A(d) and the notice issued under Section 148 are quashed and set aside. - Decided in favour of assessee.
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2022 (5) TMI 1068
Validity of Faceless Assessment Order passed u/s 144B - variation as proposed in the draft assessment order or final draft assessment order or revised draft assessment order - a request for personal hearing through video conference denied - HELD THAT:- In the case on hand, a perusal of the material on record would show that even though the petitioner made a request for personal hearing through video conference on 26.03.2022, though belatedly made, the impugned draft assessment order was passed on 30.03.2022 even without considering such request by showing the status/action of the request as open . The said draft assessment order was passed even without closing the e-portal status. As no standard, procedures and processes have been framed in terms of clause (xii) of Section 144B (7) of the Income Tax Act, 1961 and these standards, procedures and processes are required to be framed to guide the assessing officer as to whether or not personal hearing, in a given matter, should be granted and that since the statute itself makes the provision for grant of personal hearing, the respondents cannot veer away from the same. Hence, this court is of the view that since the assessee has a vested right to personal hearing and the same has to be given, if such a request is made and that the right to personal hearing cannot depend upon the facts of each case. Admittedly, the impugned draft assessment order was passed without considering the request for personal hearing through video conference, though made belatedly on 26.03.2022, even without closing the said request and keeping the status as open . Therefore, since no personal hearing had been granted before passing the impugned assessment order, there is a violation of principles of natural justice as well as mandatory procedure prescribed in Faceless Assessment Scheme as stipulated in Section 144B of the Income Tax Act. The impugned draft assessment order is liable to be set aside and also the demand notice and the proceedings initiated pursuant thereto for the Assessment Year 2016-2017 are also liable to be set aside. WP allowed.
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2022 (5) TMI 1067
Stay of demand - 1st respondent was guided by the office memorandum dated 31.07.2017 of the Central Board of Direct Taxes (CBDT), as per which stay may be granted in cases where appeals are pending subject to payment of 20% of the disputed demand - HELD THAT:- Supreme Court in Principal Commissioner of Income Tax vs. L.G. Electronics India Private Ltd. [ 2018 (7) TMI 1905 - SC ORDER ] observed that an administrative circular would not operate as a factor on the Commissioner since it is a quasi-judicial authority. Clarifying further, Supreme Court held that it would be open to the authority on the facts of individual cases to grant deposit orders of a lesser amount than 20% pending appeal. 1st respondent as the appellate authority exercises quasi-judicial powers. Power to consider prayer for stay is incidental and ancillary to the power to hear appeals. As a quasi-judicial authority, Commissioner (Appeals) is not bound by the administrative circulars issued by CBDT. He has to apply his own independent mind in the facts and circumstances of each case. Considering the above, the impugned order is hereby set aside. The matter is remanded back to the 1st respondent for a fresh decision on the prayer for stay of the petitioner in accordance with law after complying with the principles of natural justice. This shall be done within a period of four (04) weeks from the date of receipt of a copy of this order. Till such time, demand pursuant to the assessment order dated 21.12.2019 shall remain stayed.
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2022 (5) TMI 1066
Additional depreciation u/s.32(1)(iia) relating to the windmill installed - Whether generation of electricity should be equated to the term manufacturing or production of article or thing ? - HELD THAT:- It is settled law that for the purpose of claiming additional depreciation for manufacture or production of new item under section 32(1)(iia), the basic requirement is that it should be acquired or installed after 31.03.2002. Admittedly, the appellant acquired the windmill after 31.03.2002. Taking note of all this court is of the opinion that the appellate authority has correctly set aside the assessment order and remanded the matter to the assessing officer for fresh consideration. Whereas, the Tribunal erred in setting aside the said order of the appellate authority, by order dated 30.03.2012 and hence, the same is liable to be set aside and is accordingly, set aside. Consequently, the matter is remanded to the assessing officer to recompute the depreciation allowable after duly allowing the claim made by the appellant for additional depreciation, in addition to the depreciation already allowed. Such order be passed by the assessing officer, on merits and in accordance with law, after providing an opportunity of personal hearing to the appellant, within a period of six weeks from the date of receipt of a copy of this judgment.
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2022 (5) TMI 1065
Deduction u/s 80P - None appearance by assessee - HELD THAT:- When the appeal is listed for hearing on 22.02.2022 the Ld. Authorized Representative Mr. D. R. Adhia informed in writing that some important details could not be obtained due to Covid-19 and allied matters prevailing in various staffs of the assessee, therefore, sought for short adjournment to produce the details. Taking note of the written request, the appeal was adjourned to 06.04.2022. None appeared on behalf of the assessee the case was adjourned to 17.05.2022, in both the days none appeared on behalf of the assessee. It is an admitted fact that the assessee could not produce details or evidences in claiming the deduction under Section 80P right from 2011. AO has made the addition since the assessee failed to furnish any explanation or objection against the disallowance. Similar was the case with the CIT (Appeals), when he passed the appellate order in 2013. Even in 2022, though opportunity was given to the assessee to produce the details, the assessee is not present for the last two hearing. In the absence of any evidence before us, we are not in a position to delete the additions as claimed in the grounds of appeal raised by the assessee. Hence, the above grounds are rejected and the appeal filed by the assessee is hereby dismissed.
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2022 (5) TMI 1064
Penalty u/s 271(1)(c) - treatment of income disclosed from income from other sources to unexplained cash credits u/s.68 - HELD THAT:- We noted that there is no difference between assessed income and returned income. There is simpliciter change of head of income. The assessee declared this income under the head income from other sources as this income has been earned by assessee as interest earned on jewel loans made to various parties but could not submit the evidences. In our view, the primary condition of the provisions of section 271(1)(c) i.e., tax sought to be evaded is a must for levying penalty u/s.271(1)(c) of the Act. This issue has been dealt in the case of CIT vs. Reliance Petroproducts Pvt. Ltd [ 2010 (3) TMI 80 - SUPREME COURT ] wherein the Hon ble Supreme Court has considered the term particulars used in section 271(1)(c) of the Act, which would embrace the details of the claim made. The Hon ble Supreme Court stated that where no information given in the return was found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars nor expose the assessee to penalty, unless the case is strictly covered by the provisions, the penalty provision cannot be invoked. Hence, in the present case the result of assessing the income either under the head income from other sources or u/s.68 of the Act, the liability to pay any additional tax does not arise and once there is no tax sought to be evaded, penalty u/s.271(1)(c) of the Act cannot be levied. Accordingly, we reverse the orders of lower authorities and allow this appeal of assessee
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2022 (5) TMI 1063
Addition on account of interest earned u/s 80P(2)(d) - AO denied the claim of deduction u/s 80P in totality and taxed the interest income as income from other sources u/s 56 - AO also denied deduction of proportionate expenses incurred for earning the aforesaid interest income - HELD THAT:- The issue for consideration before us is whether the assessee is eligible to claim deduction on interest earned from Co-Operative Banks u/s 80P(2)(d) of the Act. The Hon ble Gujarat High Court in the case of State Bank of India[ 2016 (7) TMI 516 - GUJARAT HIGH COURT] held that that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) In the case of Surat Vankar Sahakari Sangh Ltd. v Assistant Commissioner of Income-tax [ 2016 (7) TMI 1217 - GUJARAT HIGH COURT] the Gujarat High Court held assessee-co-operative society was eligible for deduction under section 80P(2)(d) in respect of gross interest received from co-operative bank without adjusting interest paid to said bank. In the case of Surendranagar District Co-op. Milk Producers Union Ltd. [ 2019 (9) TMI 978 - ITAT RAJKOT] the ITAT held that assessee-co-operative society could not claim benefit of section 80P(2)(d) in respect of interest earned by it from deposits made with nationalised/private banks, however, said benefit was available in respect of interest earned on deposits made with co-operative bank. In the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] the Karnataka High Court has held that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. Thus interest earned by the assessee on surplus held with cooperative banks would be eligible for deduction under Sec.80P(2)(d) of the Act.- Decided against revenue.
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2022 (5) TMI 1062
Deduction u/s. 80P - whether the assessee is eligible to claim deduction on interest earned from Co-Operative Bank u/s 80P(2)(d)? - HELD THAT:- Hon ble Gujarat High Court in the case of State Bank of India [ 2016 (7) TMI 516 - GUJARAT HIGH COURT] held that that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d). In the case of Surat Vankar Sahakari Sangh Ltd. [ 2016 (7) TMI 1217 - GUJARAT HIGH COURT] the Gujarat High Court held assessee-co-operative society was eligible for deduction under section 80P(2)(d) in respect of gross interest received from co-operative bank without adjusting interest paid to said bank. In the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] the Karnataka High Court has held that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. Thus in our view, interest earned by the assessee on surplus held with Banaskantha Dist. Co-operative Bank would be eligible for deduction under Sec.80P(2)(d) - Decided in favour of assessee.
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2022 (5) TMI 1061
Validity of assessment order u/s 144 - addition invoking provisions of Section 50C - Assessing officer disallowed the long term capital gain by considering the cost of improvement and acquisition at Zero and thereby made huge addition - CIT(A) also dismissed the appeal of assessee by proceeding ex parte by passing a non-speaking order - As assessee submits that the assessee is an NRI and the notice was not served him - HELD THAT:- We find that the ld. CIT(A) instead of considering the case on merit, dismissed the appeal of assessee in limine. In our view, the order passed by the ld. CIT(A) is not as per mandate of Section 250(6) - Section 250(6) of the Act provides that the order of the Commissioner (Appeals) must contain point of determination, decision thereon and reasons for such decision. We instead of going into controversy whether the assessee was informed by his representative to whom the assessee assigned his case or not, in our view, the assessee deserved opportunity of hearing on merit. Therefore, considering all the aspects of the matter, the order of ld. CIT(A) is set aside and all the issues are restored to the file of Assessing Officer for re-determination of issues afresh. Needless to order, before passing the assessment order afresh, the Assessing Officer shall grant fair and proper opportunity of hearing to the assessee. The assessee is also directed to vigilant and to attend the hearing and furnished all requisite details and not to prolong the proceedings. With this observation, the appeal of assessee is allowed for statistical purposes. In the result, the grounds of the appeal is allowed for statistical purpose.
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2022 (5) TMI 1060
Revision u/s 263 - claim of deduction u/s 80HHE after setting off brought forward losses from the earlier years for the purpose of computing business profits under the said section - HELD THAT:- As decided in M/S. RELIANCE ENERGY LTD. (FORMERLY BSES LTD.) THROUGH ITS M.D. [ 2021 (4) TMI 1237 - SUPREME COURT] profit eligible for deduction would be net profit made by the assessee from the eligible business and such deduction is to be allowed from gross total income. In the instant case, we find that if the set off of brought forward business loss was not taken into account, the assessee would have been entitled to deduction of the entire amount of profit eligible for deduction u/s.80HHE - But since the deduction under 80HHE of the Act is restricted to gross total income and such gross total income is to be computed after setting off the brought forward business losses, the assessee s claim of deduction got reduced. Hence, there cannot be any error in the ld. AO allowing deduction under 80HHE of the Act in the instant case. Hence no adjustment is warranted in the instant case as proposed by the ld. CIT. Thus we hold that the ld. CIT grossly held in holding with the profits of the business for the year under consideration has to be reduced by the brought forward losses from earlier year for the purpose of computing profit eligible deduction u/s.80HHE of the Act. Accordingly, the ground No.2(a), 2(b) by the assessee are allowed. Allowing set off of losses and unit eligible for claiming deduction u/s.10A of the Act against non-Software Technology Park (STP) Unit - assessee earned profits in its Ashok Plaza Unit at Pune which was eligible for deduction u/s.10Aand assessee also had three other units which incurred losses during the year and such losses were set off against the income from non-STP Unit - CIT was of the opinion that the losses incurred in three other units should be set off with Pune unit and on the net amount, deduction u/s.10A of the Act should be allowed to the assessee - HELD THAT:- We find that this issue is no longer res integra in view of the decision of the Hon ble Supreme Court in the case of CIT vs. Yokogawa India Ltd.[ 2016 (12) TMI 881 - SUPREME COURT] wherein it has been held that Section 10A of the Act provides that the deduction contemplated therein is qua profits of eligible undertaking on a stand alone basis and without set off of losses of eligible or non-eligible unit or undertaking of the assessee. Transfer pricing adjustment while allowing deduction u/s.10A - HELD THAT:- We find that assessee has claimed deduction u/s.10A in the return of income. Only this sum was allowed as deduction by the ld. AO while computing the income of the assessee. We find from the computation of income enclosed in the attached assessment order, no deduction u/s.10A has been allowed in respect of transfer pricing adjustment by the ld. AO. We find that the ld. CIT has proceeded on the basis that deduction u/s.10A of the Act has been allowed by the ld. AO in the present case on higher profit after adding the transfer pricing adjustment in the eligible unit. We find that the ld. CIT has purely proceeded on incorrect assumption of facts. Hence, we have no hesitation in allowing ground No.5 raised by the assessee Book profit u/s.115JB of the Act has to be increased by the losses pertaining to unit eligible for deduction u/s.10A - HELD THAT:- We find from the computation of book profit u/s.115JB of the Act in the assessment order, the ld. AO had already carried out this adjustment as required by Clause-f of Explanation-1 to Section 115JB(2) of the Act. Hence, here also the ld. CIT had proceeded purely on incorrect assumption of facts. Hence, the ground No.6 raised by the assessee is allowed. MAT Computation u/s 115JB - deferred tax provision to be added back while computing book profits u/s.115JB - HELD THAT:- We find that Clause(h) of Explanation 1 to Section 115JB(2) of the Act which mandated deferred tax provision to be added back while computing book profits u/s.115JB of the Act was introduced in the statute vide Finance Act, 2008 with retrospective from 01/04/2001. Hence, while the ld. CIT passed the order on 30/03/2007, this amendment had not been brought in the statute which means, on the date of passing of the order by the ld. CIT, this amendment could not have been foreseen by the ld. CIT. However, we find that the assessee before us has not challenged the validity of assumption of jurisdiction by the ld. CIT u/s.263 of the Act. The grounds raised by the assessee merely challenged the issues sought to be revised by the ld. CIT on merits. Hence, on merits, this deferred tax provision is required to be added back while computing book profit u/s.115JB of the Act as per Clause(h) of Explanation 1 to Section 115JB(2) of the Act which is retrospectively applicable from 01/04/2001. Provision for doubtful debts, Provision for diminution in value of Asset Provision for doubtful recovery - As in view of the retrospective amendment brought in the statute, these three items would have to be added back while computing book profits u/s.115JB of the Act. Hence, all the case laws relied upon by the ld. AR before us would not be applicable in the instant case, in view of the retrospective amendment. Accordingly, the ground 7 raised by the assessee is dismissed.
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2022 (5) TMI 1059
Exemption u/s 11 - Profit motive - commercial activities as hit by the proviso to Sec. 2(15) - main objective of the trust was to run education institution, render financial assistance to students, help poor and destitute persons, rendering useful services in the field of community health etc. and assessee was running a Kalyanam Mandapam by the name M/s Abirami Chidambaram community hall at Kottupuram - HELD THAT:- Assessee is a registered charitable trust since the year 2000. It is enjoying exemption as applicable to a charitable trust. With a view to help poor and middle-class people, which is one of its main objects, the assessee runs Kalyanam Mandapam by the name M/s Abirami Chidambaram community hall at Kottupuram. This community hall is stated to have been conceived and constructed to help the poor people by enabling them to hire out a community hall for conducting family functions at moderate rental and also encourage fine arts by using the hall for music concerts and dance performances. It could also be seen that as against total receipts of Rs.1827.92 Lacs, the rental receipts are merely Rs.72.93 Lacs which is merely 4% of total receipts. The majority of rent received by the assessee include rental from marriage functions and rent earned from other events like cultural, spiritual and educational seminars etc. It is nowhere the findings that the assessee has not adhered to the conditions as applicable to a charitable trust or any of the objects of the assessee are profit-motive. Under these circumstances, it could not be concluded that the assessee carried out separate commercial activities and it was hit by the proviso to Sec. 2(15). The decision of this Tribunal in the case of Mylapore Fine Arts Club V/s DDIT [ 2011 (9) TMI 796 - ITAT, CHENNAI] supports the case of the assessee wherein it was held that in the modern society, perseverance and advancement of traditional and classical forms of music and arts could not be achieved without the support of the public. Participation of the public is essential. Therefore, any contributions made to such organizations by members of public have to be treated as contribution for a public cause. The assessee trust is receiving contributions in the above spirit and accordingly, it was held by coordinate bench that the assessee was eligible for approval u/s 80-G. We find that similar analogy is applicable in the present case. Moreover, this activity is regularly being carried out by the assessee over several years to achieve the objects of the trust. Therefore, the impugned activities could not be considered to have been hit by proviso to Sec.2(15). - Decided in favour of assessee.
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2022 (5) TMI 1058
Taxable income - amount received from other sugar co-operatives - HELD THAT:- CIT (A) s second round order in issue said contention of the appellant that the amount received on the sale of sugar cane to other sugar factories is transferred to sugar cane developmental fund and therefore the same is not taxable, is not an acceptable argument. The excess cane available with the appellant was sold to other sugar factories and therefore the same is a revenue receipt which should have been included as revenue receipt by the appellant. The transfer of such receipt to cane development fund is immaterial and the same is nothing but appropriation of income - amount has been rightly included by the AO in the income of the appellant. The order of the AO is accordingly found in order and the same is confirmed. However; it is observed that. the AO has omitted to add the amount in the computation of total income forming part of the assessment order, The AO is accordingly directed to rectify this mistake and add the same to the total income while giving effect to this order. Mr. Walimbe vehemently could hardly rebut the clinging fact that the CIT(A) s detailed discussion has failed to comply with their lordships directions in explicit terms. We thus restore the instant issue once again back to the CIT (A) for his afresh adjudication on merits as contemplated under Section 250(6) of the Act. The assessee succeeds in its first substantive ground for statistical purposes. Ceremonial expenses disallowance - Disallowance restricted @ 25% - HELD THAT:- We are of the opinion that such an estimation of routine day-do-day expeses; not doubted in principle but disallowed on adhoc basis, does not always form a binding judicial precedent. More so when the CIT (A) has not even discussed the evidence on record. Faced with this situation, we hold that larger interest of justice would be met in case the impugned disallowance is restricted @ 10% only subject to the condition that the same shall not be treated as a precedent. Ordered accordingly.
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2022 (5) TMI 1057
PE in India - Fees for Technical Services - HELD THAT:- It is seen that the Tribunal, right from the A.Y. 2003-04 up to the A.Y. 2014-15, has decided the issue in favour of the assessee by holding EIPL does not constitute PE of the assessee in India. The ld. DR candidly admitted that there is no change in the facts and circumstances of the instant year vis- -vis the earlier years. Respectfully following the precedent, we hold that the EIPL does not constitute the assessee s PE in India. This issue is therefore, decided in favour of assessee. Reimbursement from the Indian subsidiary as income - mark-up of 1% was added to the cost of services - as per AO assessee short reflected income - HELD THAT:- It is found as an admitted position that the sum of Rs.29.50 lakh charged by the assessee is inclusive of 1% mark-up to the actual costs incurred by the assessee. The ld. AR however, contended that only mark-up of 1% should be brought to tax and not the full amount. We are unable to countenance the proposition propounded by the ld. AR for the obvious reason that the sum of Rs.29.50 lakh is admittedly not reimbursement as it has a mark-up added to it. Once a particular receipt is not reimbursement and also includes mark-up, it becomes chargeable to tax in the gross taxation regime. On a specific query, the ld. AR submitted that the sum of Rs.29.50 lakh is otherwise in the nature of Fees for Technical Services considered by the assessee as first item in its computation of income. We, therefore, uphold the view point of the AO on this score.
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2022 (5) TMI 1056
Taxability of a sum received as interest on enhanced compensation - Exemption u/s. 10(37) - interest received u/s 28 of the Land Acquisition Act from Government, on delayed Award of compensation on compulsory acquisition of agricultural land - whether taxable as income of the assessee from other sources? - HELD THAT:- On perusal of the order of the Tribunal in the case of Jagmal Singh Vs. ITO [ 2018 (9) TMI 1468 - ITAT DELHI] find that the issue in appeal has been decided in favour of the assessee holding that interest received by the assessee under Section 28 of the LA Act is part of enhanced compensation and exempt under Section 10(37) . Thus interest received under Section 28 of the LA Act by the assessee is part of enhanced compensation and is not liable for Income tax. Accordingly, the Assessing Officer is directed to delete the addition made while computing the income of the assessee. - Decided in favour of assessee.
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2022 (5) TMI 1055
Revision u/s 263 - deduction u/s 80P (2)(a)/(d) of the Act in respect of interest received from banks disallowed - HELD THAT:- AO had conducted the necessary inquiry and examined the issue of allowability of deduction under Section 80P(2)(a) as well as 80P(2)(d) of the Act. The view taken by the AO is in line with the decision of Kaliandas Udyog Bhavan Premise [ 2018 (4) TMI 1678 - ITAT MUMBAI] wherein after considering the provisions of Section 80P(4) of the Act it has been held by the Tribunal that a cooperative bank continues to be a co-operative society, and even after introduction of Section 80P(4), a co-operative society is entitled to claim deduction under Section 80P(2)(d) of the Act in respect of the interest received from a cooperative bank. Thus it is clear that the assessment order passed by the AO was neither erroneous nor prejudicial to the interest of revenue. Assuming arguendo even if the contention of PCIT is accepted, the view taken by the AO regarding allowability of deduction under Section 80P(2)(d) of the Act in respect of interest received by the Appellant from a cooperative bank would still qualify as a plausible view and thereby taking away the jurisdiction of PCIT to invoke powers of revision under Section 263 of the Act. It is settled legal position that in case the view taken by the AO is a plausible view, PCIT cannot be permitted to substitute his opinion in place of the AO to arrive to a contrary finding. Thus, we hold that in the facts and circumstances of the present case the PCIT lacked the jurisdiction to exercise powers under Section 263 - Decided in favour of assessee.
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2022 (5) TMI 1054
Addition u/s 68 - unexplained cash credit - whether Provisions of Section 68 of the Act can be applied or not in deposits in the bank statements? - Identifying the real beneficiary of accommodation entry - HELD THAT:- We find that the issue is squarely covered against the assessee by the decision of Hon'ble Bombay High Court in case of shri Arunkumar J. Muchhala [ 2017 (8) TMI 1137 - BOMBAY HIGH COURT ] wherein Hon'ble Bombay High Court has held that where huge amounts credited to the bank account of the assessee, source of which is not explained, the provision of section 68 of the Act are applicable. While deciding so, Honourable High court also considered decision relied up on in CIT vs. Bhaichand H. Gandhi [ 1982 (2) TMI 28 - BOMBAY HIGH COURT ] in paragraph no. 7. In view of this, we dismiss additional ground raised. Addition u/s 68 - Now before us assessee has submitted the copy of the complaint filed before the metropolitan Magistrate and also complaint before Commissioner of Police on 13th February, 2017. Assessee filed same before the learned CIT(A) on 1/2/2017, however, date of the order of the learned CIT(A) is 16th November, 2016 where the date of the order mentioned in form no. 36 is 16th November, 2018, apparently, there may be some typographical error on the part of the learned CIT(A) in mentioning those dates. In this type of transactions, multiple economic offence laws are triggered. In some of such laws Ld. Assessing Officer himself is authority to initiate/or inform to respective authorities. and in some of the case those may be referred to the respective authorities. It is the bounden duty of the authorities to take the issues to its logical conclusion. We are surprised that bankers were oblivion to the facts about suspicious transactions carried out in the bank account. On examination of bank account, Ld. DDIT, LD AO and LD CIT(A) also remained passive. Therefore, we are of the opinion that such transactions need to be probed further to curb such a malpractice. We set aside all these appeals back to the file of the learned Assessing Officer with following directions. i. To obtain information of the above bank account such as the ownership of CD account wherefrom the cheques were received, signature of persons who withdrew cash of Rs. 1 lakhs on more than 100 occasions, where and how cheque books were issued, who are the owners of the bank accounts where the sums are diverted, These evidences may be obtained by the learned Assessing Officer by use of powers under section 133(6) as well as under section 131 of the Act. The Assessing Officer may also use any other provisions of the law which he is empowered to. ii. to obtain the complete details of Yash Impex, whose permanent account number is available in the statement recorded by the Bank Manager. Apparently, Yash Impex is the real beneficiary of the flow of the funds from this bank account. It may be possible that M/s. Yash Impex may also be carrying similar transactions and the real beneficiary may be other persons. iii. The Assessing Officer may also invoke the provisions of section 147 of the Act in all those persons who entered in to these transactions, after issuing them notices, keeping in mind provisions of section 153(6) of the Act. iv. If the account is found to be operated by the assessee, the assessee is also duty bound to state whether he is an accommodation entry provider or owner of the money. No doubt, onus lies on the assessee. If the assessee gives names of the beneficiary as mentioned in the bank account, the addition deserves to be made in the hands of the beneficiary. v. If, on examination it is found that it is a case of money laundering, the Assessing Officer is further directed to take necessary action by reporting appropriately. vi. The Assessing Officer is further required to issue notice to all the concerned persons including the assessee prior to taking any action against those persons. Further, the Assessing Officer is directed to give proper opportunity of hearing to the assessee as well as other persons before deciding the issue.
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2022 (5) TMI 1033
Validity of Reopening of assessment u/s 147 - change of opinion - HELD THAT:- AO concerned has rightly proceeded with the impugned reassessment proceeding and passed the impugned assessment order. In my considered opinion none of the judgments cited by the petitioner is applicable to the instant case in view of exceptional facts and circumstances involved in this Writ Petition which have been elaborately discussed above in detail. Judgment of the Hon ble Supreme Court in the case of GKN Driveshafts [ 2002 (11) TMI 7 - SUPREME COURT] upon which petitioner has relied, in the facts and circumstances of the case is not applicable to the present case and rather it goes against the petitioner since in the said judgment, ratio is that the Assessing Officer will be bound to furnish the recorded reasons which he had done in this case while the petitioner after receipt of the recorded reason himself had chosen not to file any objection immediately against the impugned notice as per the decision in the case of GKN Driveshafts (supra) and as such question of disposal of petitioner s objection against the impugned notice under Section 148 of the Act before issuance of notice under Section 142 (1) of the Act does not arise and the Assessing Officer after not receiving any objection, having no option, has rightly proceeded with the impugned reassessment proceedings by issuing notices under Section 142 (1) of the Act from time to time and the petitioner himself actively participated in the impugned assessment proceedings by complying with the aforesaid notices under Section 142 (1) of the Act and petitioner himself repeatedly requested the Assessing Officer to complete the impugned reassessment proceeding under Section 147 of the Act which are all matters of record, has rightly completed the assessment and passed the final assessment order which is appealable under the statute. - Decided against assessee.
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2022 (5) TMI 1032
Addition on account of alleged short-term capital gain - AO called upon assessee as to why stamp value adopted by the Stamp Valuation Authority should not be applied - DR contended that the AO was justified in computing the capital gain as transfer of property was completed and all conditions for taxability of STCG was satisfied - HELD THAT:- From the finding of Ld.CIT(A), it is clear that value assessed by the DVO was not accepted on account of the fact that DVO had adopted the sale instance of Narela which could not be applied to the sale instance at Wazirpur for assessing the fair market value of the property. The assessee has not brought any material rebutting the finding of Ld.CIT(A) on record. The assessee chose not to appear before the Tribunal despite various opportunities were provided to him. It is incumbent upon the assessee to prove true and correct fair market value of the property. Merely, stating that there was dispute would not be sufficient to accept the value declared by the assessee. The assessee has not furnished any Settlement Deed or award by the Arbitral Award regarding sale consideration of property. Therefore, in the absence of the relevant evidences, the finding of the authorities below remained unrebutted. Thus, Ground No.1 raised by the assessee is dismissed. Unexplained unsecured loan - no confirmation and copy of income tax return was filed - HELD THAT:- We find that the AO had noticed that various discrepancies in respect of claim of unsecured loans received from the various parties by the assessee. Even before this Tribunal, the assessee has grossly failed to substantiate his claim and negligently did not appear before the Tribunal despite having given various opportunities. The assessee was required to prove identity of creditors, genuineness of transaction and creditworthiness of creditors. The assessee grossly failed to do so. Therefore, in the absence of the supporting evidences regarding claim of unsecured loans, we do not see any infirmity in the finding of authorities below. Thus, Ground No.2 raised by the assessee is dismissed.
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2022 (5) TMI 1031
Assessment u/s 153A - Whether no incriminating material found in the said search against the assessee? - addition u/s 68 - HELD THAT:- It is seen that, while making addition u/s 68 of the Act, the Ld. A.O has not referred any incriminating material/document found at the time of search which relate to the impugned addition. No incriminating material during the search which relate to the impugned addition has not been disputed by the Ld. DR and has not placed any material to contradict the above said facts. By looking into the above facts and circumstances, we are of the opinion that the ratio laid down by the Jurisdictional High Court in the case of CIT Vs Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] is squarely applicable, wherein it is held that when there is no incriminating material was unearthed during the course of search in respect of an issue, then no addition in respect of such an issue can be made in the assessment u/s 153A 153C. The similar view has been taken in the case of Mount Echo Build Well Pvt. Ltd. [ 2021 (12) TMI 1351 - ITAT DELHI] - In the light of the above decision of the Jurisdictional High Court and the decision of the Tribunal which are binding precedent, we allow the appeal filed by the assessee and delete the addition made by the A.O which was sustained by CIT(A). Accordingly, we allow the Assesssee s Grounds of appeal.
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2022 (5) TMI 1030
Disallowance made u/s 40(a)(ia) - non deduction of TDS - Business Development Commission paid to its US based Associated Enterprises (AE) - Claim of deduction u/s 10A / 10AA on such disallowance since the taxable profit increased - HELD THAT:- We find that the issue of disallowance u/s 40(a)(i) is covered in assessee s favor by the decision of Hon ble High Court of Madras in assessee s appeal [ 2020 (9) TMI 1255 - MADRAS HIGH COURT ] noted that the issue of TDS on BDC was considered by the TDS authority where the assessee was held to be assessee-in-default. However, Ld. CIT(A) decided the issue in assessee s favor which had attained finality. The services were rendered outside India. Therefore, there was no question of TDS on these payments. On the basis of the same, it was held by Hon ble Court that the Tribunal exceeded its jurisdiction while remanding the matter back to Ld. AO. Accordingly, the decision of Tribunal was reversed - it was held that there was no requirement on the part of the assessee to deduct TDS on such payments and accordingly, no disallowance u/s 40(a)(i) would be attracted. Since the issue of TDS itself has been decided in assessee s favor on merits, the grounds thus raised in assessee s appeal as well as in revenue s appeal has become infructuous in view of the fact that the subject matter of reassessment proceedings was limited i.e., whether the disallowance made u/s 40(a)(i) would be eligible for deduction u/s 10A and 10AA or not? Since, the disallowance itself do not survive, the grounds raised in cross-appeal stand dismissed as infructuous. The assessee s appeal stand dismissed as infructuous. Provision for Doubtful Debts - Inclusion/exclusion of revenue from export operation attributable to Sec.10A - AO proposed exclusion of the same from export turnover on the ground that time limit of Sec.10A (3) had expired - assessee submitted that provision was only 2.5% of export turnover as against limit of 10% put by RBI in Master Circular on export of goods services - doctrine of parity between the export turnover in the numerator and total turnover in denominator for the purpose of Sec.10A / 10B - CIT(A) upheld the disallowance but directed Ld. AO to reduce the provisions from total turnover also - HELD THAT:- We find that the action of Ld. CIT(A) is in accordance with cited judicial decisions. The decision of Hon ble Supreme Court in CIT V/s HCL Technologies Ltd. [ 2018 (5) TMI 357 - SUPREME COURT ] as well as the decision of CIT V/s Maars Software International Ltd. [ 2019 (3) TMI 578 - MADRAS HIGH COURT ] also supports the same view. Therefore, the impugned order, on this issue, do not require any interference on our part. The grounds thus raised by the revenue stand dismissed. Set-off of STPI and SEZ - two units in STPI, one of which earned profits whereas the other incurred losses - assessee set-off the losses of STPI unit as well as SEZ unit against taxable income which was held to be not acceptable - AO opined that current year s losses have to be adjusted before arriving at total taxable income. Accordingly, total deduction u/s 10A and 10AA was reworked - HELD THAT:- We find that this issue is covered in assessee s favour [ 2018 (2) TMI 2071 - ITAT CHENNAI] wherein held that ld. Commissioner of Income Tax (Appeals) was justified in directing the ld. Assessing Officer to allow the set off loss on the STP unit against income from other units. We do not find any reason to interfere with the order of the ld. Commissioner of Income Tax (Appeals) in this regard. Deduction of Expenses incurred by SEZ Units against other units - AO opined that the SEZ unit has to be considered separately and set-off would be available only if the business commences. Accordingly, the set-off was denied - CIT(A) allowed the set-off on the ground that though the business of the unit had not commenced, however, the business of the assessee, being ongoing, the expenditure incurred in the unit would be allowable u/s 37(1) - HELD THAT:- We concur with the reasoning of Ld. CIT(A). It is undisputed fact that the assessee s business had already commenced. Only the unit was set-up which had not commenced operations. Therefore, the loss of one unit could be setoff against another units. Concurring with the adjudication, we dismiss the grounds raised by the revenue. Exclusion of unrealized debtors from total turnover for the purpose of computing deduction u/s 10A - HELD THAT:- As relying on case Maars Software International Ltd. [ 2019 (3) TMI 578 - MADRAS HIGH COURT ] we direct Ld. AO to exclude this item from total turnover also. This ground stand allowed. Disallowance u/s 14A excluded from exempt profit - HELD THAT:- CIT(A), relying on the decision of Cognizant Technology Solutions [ 2013 (1) TMI 767 - ITAT CHENNAI ] as well as the decision in Polaris Financial Technology Ltd. [ 2013 (9) TMI 296 - ITAT CHENNAI ] directed Ld. AO to include the disallowance in Profit Gain derived from export. - CIT(A) has followed the decisions of Tribunal while adjudicating the appeal, we do not find any reason to interfere in the same. The grounds raised by the revenue stands dismissed.
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2022 (5) TMI 1029
Revision u/s 263 by CIT - PCIT raised a point in the show cause notice to treat the profit on sale of land as income from business in the place of Capital Gains and the only difference in place of giving directions to the AO to make assessment in a particular manner held that proper enquiries were not made and the issue was decided without application of mind by the AO - HELD THAT:- We are not agreeable to the arguments advanced by the Ld. CIT-DR, for the reason, that the A.O in the present case did not deviate from law and admittedly made certain assessment in accordance with law. PCIT under revision held the same as erroneous, as in his opinion, the A.O. did not apply his mind elaborately. We note that the A.O examined the claim of assessee with supporting evidences along with necessary submissions and determined the assessment and chargeable to tax under LTCG. If at all, if the PCIT not satisfied with the said determination of assessment is lower side, would have applied higher rate by the A.O. of another head of income in our opinion, is untenable, again, for another reasons as it constitutes substitution of opinion which cannot be held as erroneous. Thus, when the assessment made by the A.O. is in accordance with law, it cannot be termed as erroneous and when it is not erroneous it cannot be prejudicial to the interest of revenue. Therefore, the decision of Hon ble Supreme Court in the case of Amitabh Bachan supra, is not applicable to the facts on hand. We find in the present case, the PCIT issued a show cause notice for non examination of LTCG, without determining the same, directing the A.O. to conduct de novo assessment i.e. re-examination, is not sustainable under law, therefore, in light of the discussion made by us herein above with the support of decisions relied on and in the facts and circumstances of the case, we hold, the PCIT in treating the assessment erroneous and prejudicial to the interest of revenue is not justified under revision proceedings u/s. 263 of the Act and it is set aside. Decided in favour of assessee.
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2022 (5) TMI 1028
Allowable business expenditure - disallowance of interest expenditure - DR argued that the amount borrowed was not for the purpose of business as investment is not business of the assessee. The assessee has borrowed money for investment in shares, therefore, interest paid on loan is not an allowable expenditure - HELD THAT:- To control and develop the business it was important for assessee to own the company Bitwise Inc., USA. Therefore, it is a strategic investment by assessee. The purchase of the shares of the company i.e. Bitwise Inc., USA, was a business decision based on business necessity. Therefore, the interest expenditure is allowed as revenue expenditure. Accordingly, the Ground raised by the assessee are allowed.
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2022 (5) TMI 1027
TP Adjustment - international transactions pertaining to manufacturing operations - concerning the PLI computation of the assessee - computation of the assessee s PLI of OP/OR - treatment of `Provision written back and `Balances written off as non-operating - HELD THAT:- On a specific query, AR could not demonstrate item-wise correlation between the showing of these expenses/provisions as operating expenses in the current/preceding year and their reversal in the current year. It goes without saying that if a particular expenditure or provision has been allowed as deduction and taken as part of operating cost in preceding/current year and later on during the subsequent/current year it is realized that the provision earlier made was excessive or there was some adjustment in the actual expenditure leading to lowering of its incidence, then its reversal to that extent constitutes operating revenue. If, on the other hand, it is not proved that a particular amount reversed in the year under consideration and taken to the credit side of the Profit and loss account was treated as part of operating costs in the ALP determination of a preceding year, then obviously, such reversal would not qualify as an item of operating revenue. In view of the fact that the item-wise link between the 19 items reflected with the corresponding expenditure/provision taken as a part of the operating costs in this/earlier year has not been ingrained, we consider it expedient to set-aside the impugned order and remit the matter to the file of AO/TPO for undertaking this exercise in order to determine whether the amounts of reversal and credit to the Profit and loss account of `Provision written back and `Balances written off were earlier included in the operating costs base for the ALP determination of the year of their debit to the Profit and loss account. Needless to say, the assessee will be allowed a reasonable opportunity of hearing in this regard. Miscellaneous income - The first amount is `Recovery of Telephone deposit amounting to Rs.8,702. A deposit, when made, goes to the balance sheet under the head Current assets, loans and advances. Subsequently, when the deposit is received back, the asset earlier created is squared up. Recovery of a deposit, in our considered opinion, cannot be considered as a part of operating revenue. Though a feeble attempt was made by the ld. AR to claim that the payment of Telephone deposit was initially considered as part of Operating costs, but no evidence was placed on record in this regard. Going by the nature of the item, being, Recovery of deposit, we hold that the authorities below rightly took it as a part of non-operating revenue. Recovery of contribution to Provident Fund on behalf of employees - On being called upon to explain the nature of this item, the ld. AR submitted that the assessee paid the employees share of Provident Fund and later on recovered it from them. However, no detail of such payments or document showing them as a part of operating costs in the year of the payment, was brought on record. Such payment, when made on behalf of employees, is ordinarily shown as Advance recoverable from employees, which again goes to the balance sheet. Recovery of such an amount cannot be construed as a revenue receipt. As the assessee could not produce necessary details showing that the amount was taken as a part of the operating costs at the time of its payment, we hold that its recovery cannot be treated as a part of operating revenue. This contention also fails. Items of expenses which the assessee wants to be taken as non-operating as against operating taken by the TPO - Extraordinary one-time cost due to change in assumption for actuarial valuation quantified by the assessee - Actuarial valuation indicates the liability of the assessee that it will incur for that year. The amount quantified by actuary is nothing but the obligation of the company on this account for the year. It is impermissible to bifurcate such liability into two parts viz., the part relating to year under consideration and another artificial part showing the effect of the provision made in earlier years, which also does not get reflected even in the actuarial report. Since the actuary determined the amount of the provision to be created at the end of the year, the same became an operating cost without any need for reduction. We, therefore, do not find any force in the submission of the ld. AR that a part of the provision for approved gratuity etc. should be treated as non-operating when the full amount of such provision has been claimed as deduction for the year only. This contention is, therefore, repelled. Excess payment of non-cenvatable import duty - We approve the view of the authorities below on treating excess payment of non-cenvatable import duty as part of operating cost base. Treat additional effect of foreign exchange fluctuation as non-operating - Here again, the ld. AR fairly submitted that the Tribunal in Hyundai Construction Equipment India Private Ltd [ 2021 (7) TMI 711 - ITAT PUNE] has decided this issue against the assessee by holding foreign exchange fluctuation as part of operating cost. This issue was also intended to be kept alive to be taken up before the Hon ble High Court. Following the view taken in Hyundai (supra), we approve the view point of the authorities. This contention of the assessee is, therefore, rejected. Exclusion of Subvention receipt from operating revenue base - Though there was Subvention receipt of Rs.5.01 crore but the assessee did not include it in the total income. Once the amount of Rs.5.01 crore is considered as not received for the purposes of taxation, it cannot crop up as a revenue receipt while determining the ALP. A claim dead for computation of total income cannot become alive for the ALP determination. If we accept the contention of the assessee, the situation will be akin to considering Subvention amount as having been received only for the purposes of ALP determination and not for taxation, which, by no logic, can be a correct proposition. As the assessee admittedly did not include Rs.5.01 crore in the total income, the sequitur is that such an amount cannot be included in the operating revenue base for the ALP determination. Comparable selection - Assessee is engaged in manufacturing of textile machines and is also providing installation and commissioning of machines sold by Rieter group in India in addition to trading in spare parts, thus companies functionally dissimilar with that of assessee need to be deselected. Not making transfer pricing adjustment on proportionate basis by restricting it only to the international transactions - Direction to rrestrict the transfer pricing adjustment only to the value of international transactions rather than entity level transactions. Nature of receipt - treatment of subsidy received by the assessee under Package Scheme of Incentives, 2007 introduced by the Government of Maharashtra - HELD THAT:- What is essential for ascertaining the taxability or otherwise of subsidy is to see the purpose for which it was granted. In that view of the matter, the amount in question cannot be treated as a revenue receipt. It is vital to mention that we are concerned with the A.Y. 2014-15 and the Finance Act, 2015 has inserted clause (xviii) to section 2(24) w.e.f. 01-04-2016 providing that assistance in the form of subsidy or grant of cash incentives etc., other than the subsidy which has been taken into consideration in determining the actual cost of the asset in terms of Explanation 10 to section 43(1), shall be considered as an item of income chargeable to tax. Since the amended provision of section 2(24)(xviii) is not applicable to the year under consideration, the fortiori is that the subsidy received by the assessee cannot be included in its total income. We, therefore, overturn the impugned order and direct to treat the subsidy as an item of capital receipt not chargeable to tax.
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2022 (5) TMI 1026
Income from other sources - Interest income on enhanced land acquisition compensation as taxable under Section 56(2)(viii) r.w.s. 145A(b) - HELD THAT:- We find no merit inn assessee s instant argument once the legislature has inserted Section 56(2)(viii) vide Finance Act 2009 w.e.f. 01.04.2010 holding interest received on compensation or on enhanced compensation referred to in clause (b) of Section 145A as treating the corresponding income as income from other sources. The assessee could hardly rebut the fact that the foregoing statutory provision in fact makes both interest on compensation as well as on enhanced compensation deemed as income of the year in which it is received whereas the assessment year before their lordships was 1999-2000 only. We thus hold that the CIT(A) has rightly affirmed the assessment findings assessing the impugned interest income in assessee s hands. Appellant at this stage invited our attention to the Revenue s averments in the foregoing miscellaneous application (supra) that its Tax Appeal in a connected case is pending in hon ble jurisdictional high court raising the very issue. We find no substance in assessee s instant latter request as well once it is clear that the impugned interest income is very much taxable as per the amended provision i.e. Section 56(2)(viii) r.w.s. 57(iv) r.w.s. 145A(b) applicable w.e.f. 01.04.2010. The assessee fails in its sole substantive ground as well as in the main appeal therefore.
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2022 (5) TMI 1025
Delayed employees contribution towards PF/ESI - payment made well within the due date of filing of the return - Scope of amendments carried by the Finance Act, 2021 in section 36(i)(va) and 43B - HELD THAT:- As it is seen that unanimously considering the decisions of various High Courts including the jurisdictional High Court it has been held that the amendments were prospective in nature and will kick in from 2020-21 Assessment Year. Accordingly on facts the prayer of the assessee has to be allowed - disallowance sustained in the present appeal by the CIT(A) qua the employees' contribution despite late payment qua the specific Act cannot be made. Admittedly, in the facts of the present case the payment has been made well within the time line as set out under the Income Tax Act u/s.139(1) of the Income Tax Act. Thus, admittedly the return of income was filed well within time after making the specific payments - Decided in favour of assessee.
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Customs
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2022 (5) TMI 1053
Seizure of exotic animal - Live Exotic Bird Macaw - summoning the appellant under Section 108 of the Customs Act, 1962 - evidence of production of legal documents - HELD THAT:- In the instant case the respondent no. 3 had seized Exotic Bird of the appellant but admittedly the Central Government has not notified the exotic bird and animals in question under section 11B of the Customs Act or in any of the Schedule of the Wild Life (Protection) Act, 1972 and thus mere surmises or merely on the basis of the statements recorded by the Custom or Wildlife authorities would be contrary to the provisions of the Customs Act, 1962 or even Wild Life Act. The appellant, by virtue of the Advisory had declared the stock of Exotic Live Spices on 15.11.2020 i.e. within six months from the issuance of the Advisory and thus in view of the judgments in DINESH CHANDRA VERSUS U.O.I. THRU. ADDL. PRIN. CHIEF. CONSERVATOR OF FOREST OTHERS [ 2020 (7) TMI 750 - ALLAHABAD HIGH COURT ] the seizure made by the respondent no. 3 on 24.12.2021 and subsequent summon issued to the appellant by the respondent no. 3 is bad in law and illegal. It certainly amounts to abuse of the process of law. Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 1052
Seeking release of seized goods - muddamal base oil - prayer to release base oil has not been considered - offence under Sections 285, 278 and 114 IPC and Section 3, 7 and 11 of the Essential Commodities Act or not - HELD THAT:- Upon perusal of the findings of the Courts below, this court is of view that, it is settled law that, the articles seized by the police, may be released to the person, who in the opinion of the Court, is lawfully entitled to claim, after preparing detailed panchnama of such articles as well as photographs of such articles and security bond. In the facts of the present case, after following procedure, the seized base oil, imported by the petitioner herein and after clearance of the port authority, it was about to reach at the destination. Pursuant to the FIR, samples were taken from the seized oil. The petitioner herein is authorized person of the company. In this background facts, this Court is of the view that the Courts below have not properly exercised their powers judiciously. It is required to be considered that, the expeditious and judicious disposal of the case property would ensure that the owner of the article would not suffer because of its remaining unused. Court or police would not require to keep the article in safe custody, as it would save the cost of storage etc. The petition is allowed.
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2022 (5) TMI 1051
Jurisdiction - power of DRI to issue SCN - Proper Officer or not - Section 28 of the Customs Act 1962 - power of Tribunal to remand the case without deciding the issues raised therein on the ground that jurisdiction of the officer to issue show cause notice is under dispute - HELD THAT:- The issues involved herein have been considered and decided by a Co-ordinate Bench of this Court, in the case of THE COMMISSIONER OF CUSTOMS VERSUS M/S. BOX CORRUGATORS AND OFFSET PRINTERS [ 2020 (5) TMI 475 - MADRAS HIGH COURT] where it was held that in view of the fact that the learned Tribunal has clearly protected the interest of both the Revenue as well as the Assessee by directing the Assessing Authority to keep the matter pending and maintain status quo till the Hon'ble Supreme Court decides the appeal of the Revenue in the case of UNION OF INDIA VERSUS MANGALI IMPEX LTD. [ 2016 (8) TMI 1181 - SC ORDER] , filed against the decision of the Delhi High Court, we do not find any reason to interfere with the decision of the Tribunal, as in our opinion, no question of law arises for consideration in this appeal. It is made clear that the appellant shall not initiate any coercive action against the respondent(s)/assessee(s) and await the final decision in the appeals, which have been restored to the file of the Tribunal - petition closed.
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2022 (5) TMI 1050
Revocation of Customs Broker License - Forfeiture of security deposit - levy of penalty - Department has alleged that the appellant-Custom Broker has violated various provisions of the CBLR inasmuch as they did not verify the credentials of their client importers - retraction of statements - HELD THAT:- The appellant have not based their argument on as to how they have conformed to the KYC norms while interacting with their customers. They have not submitted any independent reliable documents to prove the genuineness of the where about of the clients. It is not their claim that they have produce so and so documents to defend their position. It is found that the appellants have also not submitted any cogent reasons as to how they permitted persons without G or H cards to handle the documents on their behalf. The proprietor of the appellant has accepted there lapses in the statement recorded before the customs officers. It is found that such statement has not been retracted. It was incumbent on the appellant-Custom Broker that they conduct all possible enquiries through independent reliable sources/ documents to verify the credentials of the clients. No such effort made by the appellant and no such document relied upon have been placed on record. Thus, they have failed to observe due diligence in this regard and thus ended up facilitating fake importers. Therefore, the appellant-Custom Broker has violated the provision of Regulation 11(a), (b), (d) and (e) of CBLR 2013 as held by the Learned Commissioner. The institution of customs brokers was created to facilitate the import export trade and at the same time to take care of the interest of Revenue. Thus, a great responsibility has been cast upon the Customs Brokers to exercise due diligence while conducting their business. There are no merits in the appeal - appeal dismissed.
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2022 (5) TMI 1049
Levy of penalty u/s 112 of CA - Smuggling - Gold - cross-examination of witnesses - retraction of statements - HELD THAT:- Admittedly the gold in question was recovered from two Philippines nationals namely S.B. Taha A.J. Macud, who in their respective statements have admitted the act of smuggling by them, as they have stated that they have brought this gold into India without declaring the same at the Customs check post when they arrived at New Delhi by air. This statement have never been retracted by the two Filipino nationals. Further, they have also not contested the show cause notice. Thus, the two Filipino national have admitted that act of smuggling for gain. So far these appellants are concerned, admittedly, none of them was found to be in possession of the seized gold nor there is any detail of any alleged conspiracy hatched between them with the Filipino nationals in the alleged smuggling. Admittedly, the appellant Mr. P.K. Arora is a dealer/trader in gold jewellery and bullion and the other two appellants were his employees at the relevant time. Admittedly, Mr. P.K. Arora was not in Delhi on 18th July 2014 and had gone to Mumbai to attend a jewellery exhibition. This fact has not been found to be untrue. The case of Revenue against these appellants have made out on the basis of their statements recorded at the time of investigation or the statement of the co-accused. All such statements were retracted soon thereafter. Further, these statements have also not stood the test of cross-examination during the adjudication proceedings - the two Filipino nationals have not taken the name of any of these appellants to the effect that the gold was to be delivered to these persons. Nor there is any exchange of telephone call by these appellants with the visiting Filipino nationals. The only corroborative evidence in the facts of the present case, is the recovery of 10 rupee note bearing serial no. 89L944808, from the appellant-Rajeev Kumar. Further, Mr. S.B. Taha, the Filipino national had also stated that he was to deliver the gold to the person who would have come to him bearing the 10 rupee note having the said serial no. Thus the allegation of abetment stands only against Mr. Rajeev Kumar. The appeal of Mr. Pawan Kumar Arora (50130) Mr. Amrit Pal (50116) and set aside the impugned order against them - So far, Mr. Rajeev Kumar is concerned, admittedly gold was not recovered from him, however there is strong evidence that he had gone on the said day to hotel Delhi Pride to receive the gold from the Filipino nationals. Accordingly, the imposing of penalty, imposed under Section 112 of the Act is upheld. However, under the facts and circumstances, it is found just and proper to reduce of quantum of penalty from Rs. 1 lakh. to Rs. 25,000/-. Appeal allowed in part.
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Insolvency & Bankruptcy
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2022 (5) TMI 1048
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Existence of debt and dispute or not - application filed within the time limitation or not - HELD THAT:- There is no dispute to the preposition that Application under Section 7 should be filed within three years from the date of NPA but if there are materials on record to indicate that there is an acknowledgment within the meaning of Section 18 of the Code the limitation get extended - The present is the case where there is acknowledgment within the meaning of Section 18 hence the Limitation got extended hence the Application filed on 06.12.2019 was well within time. No other argument is raised - there are no merit in the appeal - appeal dismissed.
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2022 (5) TMI 1047
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- It is seen from the records that this Tribunal had given sufficient chances to the Corporate Debtor to file its Reply and appear before this Tribunal. However, the Corporate Debtor failed to appear and also did not file its Reply. This act itself shows that the amount is due and payable to the Operational Creditor. It is observed that the Operational Creditor has served and intimated the date of hearings to the Corporate Debtor on several occasions. On the basis of the evidences on record the Operational Creditor has established that he has delivered services to the Corporate Debtor Company for which an amount of Rs. 12,85,64,268/- is due and a default has also occurred. Considering these facts and circumstances, the nature of the Debt is an 'Operational Debt' as defined under section 5 (21) of the Definitions under The Code. There is a Default as defined under section 3 (12) of The Code on the part of the Debtor - On perusal of notice sent under Section 8 (2) of the Code and it came to the notice that the Corporate Debtor has received the same but has not paid the amount of unpaid due. Further, if the Debtor wanted to place on record evidence of 'Dispute' then he could have raised the objection within 10 days as prescribed under section 8 (2) of The Code which had also lapsed now. Hence, admittedly there is no 'Dispute' in respect of the outstanding Debt. The Operational Creditor has successfully demonstrated and proved the debt and default in this case and has also proved that there is absolutely no reason for the Corporate Debtor to hold on to the payment of the invoices. The Operational Creditor has also suggested the name of proposed Interim Resolution Professional along with his consent letter in Form-2 - the Company Petition is liable to be admitted. Petition admitted - moratorium declared.
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2022 (5) TMI 1046
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Service of notice - HELD THAT:- On several failed attempts of physical service and service by post by the Financial Creditor, this Adjudicating Authority vide order dated 23 February, 2022, directed service on the Corporate Debtor by way of newspaper publication, in the district in which the registered Office of the Corporate Debtor is situated. In pursuance of such order, the publications were made in 'Indian Express' and 'Aajkal' on 17 March, 2022, however, none appeared on behalf of the Corporate Debtor - Further, upon perusal of the record it is apparent that transaction held between the parties squarely falls under the definition of financial transaction and the default subsists. Further, the date of default is stated to be 19 July, 2014 but the Corporate Debtor paid a sum of Rs. 24,700/- on 31 January, 2017, which is within the period of limitation. It is also pertinent to mention that there have been a series of cash deposits in the loan account on earlier occasions also and as such, this is not construed as an isolated event. The payment by the Corporate Debtor before expiration of the prescribed period of limitation would attract the 'Acknowledgement' under the limitation Act, 1963 and would result into a fresh period of limitation. The present petition made by the Financial Creditor is complete in all respects as required by law. The Petition establishes that the Corporate Debtor is in default of a debt due and payable and that the default is more than the minimum amount stipulated under section 4 (1) of the Code, stipulated at the relevant point of time. Application admitted - moratorium declared.
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2022 (5) TMI 1045
Seeking dissolution of the Corporate Debtor - section 54 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:-There is no impediment to the Corporate Debtor being dissolved, and it is ordered accordingly. The Corporate Debtor is ordered to be liquidated - application allowed.
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2022 (5) TMI 1023
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The Corporate Debtor has no substance in its pleas raised in the reply affidavit. The Corporate Debtor has clearly admitted its liability, the account was declared as an NPA because the Corporate Debtor failed and defaulted in repayment of its financial debt. The petition is otherwise complete in all respects - the petition under section 7 of the Code filed by the Financial Creditor deserves to be admitted - moratorium declared.
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PMLA
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2022 (5) TMI 1044
Nature of transaction - sale and purchase of land or merely investment in the property - scheduled/predicate offence or not - HELD THAT:- This Court find force in the arguments of learned senior counsel for the petitioners that the petitioners through their companies have only made investment of money and purchased the land, in a legalized manner through registered sale deeds from November, 2004 to November, 2005 and later on in the year 2006, the said 03 land owning companies were purchased by Atul Bansal of M/s. A.B.W. Group, therefore, there is no evidence on record either of applying for licence for the purpose of setting-up of some township for earning profit nor there is any evidence collected by the Enforcement Directorate regarding any conspiracy of the petitioners with other co-accused, much less at the cost of repetition, it is observed that even the CBI investigation led to the same conclusion - from the bare perusal of the allegations and the material collected in support thereof, it can be safely held that no prima facie offence is made out against the petitioners. As per Section 44 of PMLA, it is clearly provided that the trial of the scheduled offence of money laundering is to be tried together by the same Special Court, which is to try offence under the Code of Criminal Procedure, therefore, once in the scheduled offence , the petitioners are cited as witness, their prosecution under the PMLA with the same set of allegations, is nothing but misuse of process of law. In the present case, neither there is anything to raise a presumption of fact or law that any of the petitioners were aware that the purchase of land by their companies, sale consideration of which was paid by another company and duly accounted for in their Income-tax returns and later on, the sale of the entire share in the company to M/s. A.B.W. Group through banking channels were proceeds of crime deriving from any scheduled offence - Even there is nothing on record to show that the petitioners were intentionally projecting or claiming any proceeds of crime as untainted one. Therefore, in the absence of the same, merely because in the scheduled offence, the CBI investigation suggest that the other accused who had applied for obtaining licence from the department of the State of Haryana in conspiracy with the State functionaries, wherein the petitioners are cited only as witnesses, in the absence of any material, the offence of money laundering under Section 3 of the PMLA is not attracted from the bare perusal of the complaint. The present petition is allowed.
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2022 (5) TMI 1043
Service of notice - Eviction notice - direction to vacate the premises - owner of property - HELD THAT:- This Court has gone through the materials on record. It is an admitted fact that the petitioner is not the owner of the property. The property in question was in the name of the wife of the petitioner who has sold the property to one Pawan Kumar Singh in the year 2005. Pawan Kumar Singh was the accused in ECIR/02/PAT./2012 and he was the owner of M/s Classic Coal Construction Pvt. Ltd. and with regard to that coal company, Pawan Kumar Singh was facing the money laundering case. Thus, it is an admitted that the property in question was in the name of Pawan Kumar Singh, however, the petitioner was continuing and living in the property in question. It is section 5 of the said Act, which provides for procedure for attachment of the property involved in money laundering. On perusal of section 8 of PMLA, it is crystal clear that if the adjudicating authority is having reason to believe that any person has committed the offence under section 3 or in possession of the proceeds of crime as on the date of registration of the case is made out, the competent authority is empowered to register the case under the provisions of the said Act - In the case in hand, the disputed questions of fact are involved. The petitioner has already filed a title suit with regard to the property in question which is still pending. The learned counsel for the Enforcement Directorate has contended that notices have been issued which has been disputed by the petitioner. It appears that the petitioner is third party and if third party is involved, in the statute care has been taken to adjudicate the same in light of section 9 of the said Act and the Special court is empowered to exercise that. Section 26 of the Act also speaks to file appeal if any person is aggrieved by the order made by the adjudicating authority under the Act - Section 26 of the Act also speaks that any person can file appeal before the Appellate Tribunal. So far the judgment relied by Mr. Kalyan Roy, the learned counsel appearing on behalf of the petitioner with regard to principles of natural justice is not in dispute if the court comes to the conclusion that principles of natural justice has been violated alternative remedy is not a bar to entertain the writ petition. However, in the case in hand the statute is very clear and the property in question taken over by the Enforcement Directorate. This Court is not inclined to quash the notice - It is open to the petitioner to avail remedy under the law - Petition disposed off.
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Service Tax
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2022 (5) TMI 1042
Clubbing of clearances - Clearing Forwarding Agent Services - transportation of goods by road with issuance of consignment note for Ultratech - Whether the Revenue is correct in clubbing the two services, which are provided under different agreements as a composite service of C F agency and demand tax? - Scope of SCN - extended period of limitation - HELD THAT:- Admittedly the demand in the show cause notice was proposed under the head cargo handling service, whereas in the impugned order-in-original, the demand have been confirmed under the head C F Agency Service. Thus evidently, the adjudicating authority have travelled beyond the scope of show cause notice. Thus, the impugned order is bad on this score alone. This agreement is entered into between Ultratech Cement Ltd and M/s S S Enterprises (proprietor Gunesh India private Ltd). Under the clause, scope of work contained in para 2 of the agreement, it is provided that the appellant-assessee shall call the company officials/depot incharge every day to receive instructions regarding arrival of Rakes at the railway siding situated at Kota RH and also collect information regarding arrival of rakes from the Railway Office. The appellant is also required to track the consignment from the railway online system - The appellant is also required to co-ordinate with secondary transporter engaged by the company to load the cement against orders of customers as per the instructions of company officer. In case, any truck of customer is placed, than the same will also be loaded as per the company's instructions. Admittedly, under this agreement the appellant have deposited the service tax on the full value of consideration and there is no dispute in this regard. The scope of work as provided in the para-2 of the agreement (RUD 2), provides that the appellant shall place trucks for transportation of consignment of the company from railway platform/shed/godown to the various destinations including those of dealers/stockist/individual customers as per the company s instructions on regular basis. The transport work shall be mainly carried out to different places in Rajasthan from Mata ka Than godown under Jodhpur depot. The list of specified destinations is as per the approved freight list forming part of the agreement - under this agreement under the scope of work, the appellant have correctly treated the work as GTA service and service tax have been rightly discharged by the recipient Ultratech Cement Ltd under Reverse Charge Mechanism. Thus, the confirmation of demand on the appellant is bad and accordingly set aside. Extended period of limitation - HELD THAT:- There is no case of suppression, contumacious conduct or mis-statement on the part of the appellant. Accordingly, the extended period of limitation is not attracted and have been wrongly invoked by revenue. Appeal allowed - decided in favor of appellant.
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Central Excise
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2022 (5) TMI 1041
Area Bases Exemption - fixation of special rate representing the actual value addition - Recovery of refund / reversal of credit received by the petitioner as per the interim order - Later Hon'ble SC has upheld the validity of withdrawal of area based exemption - principles of promissory estoppel - effect of judgment of the Supreme Court in the case of V.V. F. Ltd. [ 2020 (4) TMI 669 - SUPREME COURT] and its effect of the said judgment on the amendment made by the Notification No. 38/2008-CE dated 10/6/2008 - HELD THAT:- In the instant judgment, this Court had explained the scope and ambit of Paragraph 3(1) as was inserted by the Notification No. 38/2008-CE. In terms with the said provision, the manufacturer shall have the option not to avail the rates specified in the table and apply to the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, having jurisdiction over the manufacturing unit of the manufacturer for fixation of a special rate representing the actual value addition in respect to any goods, manufactured and cleared under the said Notification, if the manufacturer finds that the actual value addition in the production or manufacture of the goods is at least 115% of the rates specified in the table and for that purpose, the manufacturer may make an application in writing to the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, not later than 30th day of September in a given financial year for determination of such special rate, stating all relevant facts including the proportion in which the material or components are used in the production or manufacture of goods. It is relevant to take note of the judgment of the Supreme Court in V.V.F. Ltd. In Paragraph No. 24, the Supreme Court held that the impugned Notifications therein including the Notification No. 20/2008-CE and 38/2008-CE were clarificatory in nature and it can be defined as an Act to remove doubts. It is in that perspective, the Supreme Court observed that the subsequent Notification/industrial policies cannot be said to have taken away the benefits which were accrued/granted under the earlier Notifications. In Paragraph 24.1 to 24.1.4 the Supreme Court on the basis of the materials on record had observed the misuse of the earllier Notifications granting exemption. Taking into consideration that the Petitioner s applications were filed on 18/3/2021 for fixation of the special rate for value addition, this Court deems it appropriate and accordingly directs the Principal Commissioner of Central Goods and Service Tax, Dibrugarh, the Respondent No. 2 herein to decide the applications of the Petitioner dated 18/3/2021 on its own merit as regards the claim for fixation of the special rate to actual value addition to the manufactured goods of the given financial years - Petition allowed.
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2022 (5) TMI 1040
Permission for withdrawal of appeal - Input Tax Credit - GTA Services - applicability of case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [ 2018 (2) TMI 117 - SUPREME COURT] without verifying the fact that the sale are made on FOR basis - place of removal - HELD THAT:- When the matters were taken up for consideration, the learned counsel appearing for the appellant sought permission of this Court to withdraw these civil miscellaneous appeals and also made an endorsement to that effect. In view of submission and endorsement made by the learned counsel for the appellant, these civil miscellaneous appeals are dismissed as withdrawn.
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2022 (5) TMI 1039
Entitlement to interest on the amount of refund of pre-deposit under section 35F of the Central Excise Act, 1944 from the date of the deposit till the date of sanction of the amount - section 35FF of Central Excise Act - HELD THAT:- It is not in dispute that the amount towards pre-deposit under secton 35F of the Excise Act was deposited by the appellant on 30.08.2012, which date is prior to 06.08.2014 on which date section 35FF of the Excise Act was amended. The proviso to section 35FF of the Excise Act, as it stood after amendment on 06.08.2014, clearly stipulates that the amount deposited under section 35F of the Excise Act prior to 06.08.2014 shall continue to be governed by the provisions of section 35FF of the Excise Act as it stood before 06.08.2014. Thus, the appellant would not be entitled to claim interest on the pre-deposit amount as the provisions of section 35FF of the Excise Act, as it stood prior to its amendment on 06.08.2014, would be applicable. In the present case, it is not in dispute that the amount towards pre-deposit was deposited on 30.08.2012 and that the amount was sanctioned within three months from the date of communication of the order of the Tribunal to the adjudicating authority. The appellant would, therefore, not be entitled to claim interest. This is what was observed by the Deputy Commissioner as also the Commissioner (Appeals) while rejecting the claim of the appellant for payment of interest. In the present case, section 35F of the Excised Act, as it stood prior to 06.08.2014, provides for payment of interest only if the pre-deposit amount is not refunded within a period three months from the date of communication of the order to adjudicating authority. This is what has been observed by the Commissioner (Appeals). Appeal dismissed.
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2022 (5) TMI 1038
CENVAT Credit - input services - construction services - fee for architectural structural works for factory plant building - group Medi-claim Insurance - Group personal accident insurance - insurance, motor car/vehicle insurance - labour charges for installation - testing commissioning of components of VRV System (Centrally AC system) in the office building etc. - HELD THAT:- Right from beginning the appellant is taking a stand that construction and architectural services are used for repair and renovation of factory. This submission of the appellant was not effectively rebutted by the Revenue and the Cenvat credit was denied by the lower authorities on the ground that construction service is excluded and appearing in the exclusion clause which were brought in the statute vide Notification No. 3/2011-CE (NT) dated 01.03.2011. On this basis the credit on Construction and Architectural services was denied. The credit in respect of group Medi-claim Insurance, Group personal accident insurance, insurance, motor car/vehicle insurance etc. were denied on the ground these services have no nexus with the manufacturing of excisable goods. Construction and Architectural services - HELD THAT:- These services were used for repair and renovation work in the existing factory. As held in various judgments only such construction services which are used in initial setting up of factory are excluded. However, in the present case, the factory was already existing and this construction and architectural service were used for repair and renovation of the existing factory plant. As per the inclusion clause of definition of Input Services, repair and renovation/ modernization is specifically included in the inclusion clause. Therefore, construction or architectural service if used for initial set up of plant will only be ineligible for Cenvat credit. Whereas as per facts in the present case, the services were used for repair and renovation hence, the credit in terms of inclusion clause of Input Service is admissible. Medi-claim Insurance - Group personal accident insurance - insurance - motor car/vehicle insurance etc. - HELD THAT:- Tese are the services as mandated as per the factory Act for the safety of employees. Therefore, this cannot be said that the services were used for personal use. Every industry under statutory norms required to take group Medi-claim Insurance, Group personal accident insurance, insurance, motor car/vehicle insurance etc. from the insurance companies for which the payment of premium is paid by the assessee and the same is accounted in their books of accounts as expenditure. Therefore, all these services are in or in relation to manufacture of final products and under the business activities of the assessee - All the services have been considered as admissible Input services - it can be seen that Cenvat credit is allowed on Insurance Services. The appeal is partly allowed.
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2022 (5) TMI 1037
CENVAT Credit - duty paying invoices - case of the department is that the service recipient is M/s. Valia Industries Association therefore credit cannot be allowed to M/s. Gujarat Guardian Limited who is not a service recipient - Club or association services - difference between the Association and its Members - mutuality of services - HELD THAT:- The appellant as per Industries Association namely M/s. Valia Industries Association is only an association which includes the appellant also as its member. As per the Deed of Association dated 30.06.2008, the association was founded in the name of M/s. Valia Industries Association for operating water supply for the common benefit of all the members. The association engaged Shree Rang Services to handle the said water supply project. Shri Rang Services issued invoices for handling the water supply in favour of M/s. Valia Industries Association. M/s. Valia Industries Association proportionately shared the expenditure among the members of the association as per actual use of services. With these facts, it is clear that the appellant is in fact received the services and the expenditure for the same was borne by the appellant only. Whether invoices issued in favaour of M/s. Valia Industries Association is not valid invoice for taking credit? - HELD THAT:- Since there is no dispute that Shree Rang Services issued valid cenvatable invoices in favour of M/s. Valia Industries Association and on the basis of proportionate distribution of expenditure the appellant have availed credit. Since the appellant is member of association, as per the judgment of Hon ble Supreme Court in the case of STATE OF WEST BENGAL ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE ORS. VERSUS M/S. RANCHI CLUB LTD. [ 2019 (10) TMI 160 - SUPREME COURT] , there is no difference between the Association and its Members. Accordingly, service provided by Shree Rang Services to M/s. Valia Industries Association is deemed to have been provided to its members. The appellant have received the service and borne the expenditure along with service tax, they are entitled for Cenvat credit - Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 1036
Refund claim - provisional assessment not opted - rejection on the ground that the assessee have not opted for provisional assessment in respect of clearances made from their factory to depot and subsequent sales on lower price as compared to the price for goods cleared from the factory - HELD THAT:- There is no dispute about the fact that appellant have paid duty on the higher price when cleared the goods from their factory to depot and subsequently the goods were sold at lower transaction value. Therefore, the differential duty paid in excess arose for which the appellant have filed refund claim. Both the lower authorities rejected the refund claim only on the ground that appellant have not opted for provisional assessment. However, there is no dispute on the fact that appellant have paid duty in excess as per Section 4 of Central Excise Act, 1944 and Rules made thereunder. Merely because the appellant have not followed the provisional assessment, the refund cannot be denied as the Revenue cannot retain any amount which is not due as per law. It is settled that even though the assessee has not opted for provisional assessment but the duty was paid in excess admittedly the assessee s claim of refund within stipulated time of one year, the refund is admissible. The refund cannot be rejected only on the ground that assessee has not opted for provisional assessment - Appeal allowed - decided in favor of appellant.
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2022 (5) TMI 1035
CENVAT Credit - basic allegation against the appellant is that appellants while transferring the imported machines to its customers, had charged amount of CVD and additional duty on the machines imported by him but the said amount has not been deposited by the appellant in the Government Exchequer - HELD THAT:- There is no denial to the submission of the appellant that no Cenvat credit has been availed by the appellant. These observations are sufficient for me to hold that Commissioner (Appeals) has committed an error while holding I find that there is no reference to availment of credit in the said provisions (Sec 28B or Sec 11D) whether credit is availed by the Appellant or not. Since the duty has been collected from customers, the appellant has no other option but to pay the same to govt. exchequer. Accordingly, I hold that the adjudicating authority has correctly held that the Appellant is liable to pay the duty amount of Rs.10,44,436/- along with interest collected from their customers under the provisions of Section 28B of Customs Act, 1962 read with Section 11D of Central Excise Act, 1944. Appellant while submitting today has produced on record documents in the form of commercial invoices through which the appellant has purchased the machines which got imported after purchase. The bill of entry filed for those machines has also been produced on record. Perusal thereof shows that all the articles mentioned in the commercial invoices are mentioned in the said bill of entry (nine different machines and several spare parts) - admittedly the appellant has not availed the Cenvat credit of the aforesaid duty paid it cannot be denied that appellant was entitled to claim the same under Rule 3 and 5 of Cenvat Credit Rules. No irregularity is opined to have been committed while charging the said amount of CVD and additional duties, the credit whereof was not taken by the appellant, from its customers. The finding/the reason quoted is apparently wrong as appellant has been an importer and not the manufacturer. Question of any amount of excise duty does not at all arise to ever be the liability of the appellant. Further the silence of any reference to the availment of credit in Section 28B of Customs Act or Section 11D of Central Excise Act is also observed to be an erroneous finding for the reason that irrespective both the sections are silent about the availment of credit but the simultaneous provisions in Rule 3 and Rule 5 of Cenvat Credit Rules entitle the appellant to avail the said credit. Admittedly the same has not been availed. Hence, the collection of amount of said duty from the customers was justified. Appeal allowed - decided in favor of appellant.
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Indian Laws
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2022 (5) TMI 1034
Dishonor of Cheque - complaint has been lodged beyond the statutory period under section 142 (a) of the Negotiable Instrument Act or not - whether the order passed by learned Magistrate, supposed to have taken cognizance of the offence is tenable under the provisions of section 138 and 142 of the Negotiable Instrument Act? - section 138 of N.I. Act - HELD THAT:- It may be gathered from the impugned order dated 25.7.2013 that two cheques of Rs.1,50,000/- and as Rs.2,20,000/- were drawn by the petitioner on 2.5.2012 in favour of opposite party no.2. The cheques were presented for encashment but were dishonoured due to insufficiency of fund. On the ground of illness the complainant issued notice to the accused petitioner only on 12.11.2012 demanding payment of the cheque amounts. The complaint was lodged on 15.1.2013. This case was filed after amendment of the N.I. Act in 2002. It is apparent that the complaint was filed long after the lapse of the statutory period of thirty days from the date of cause of action that is the expiry of fifteen days from the date of service of the notice as laid down in section 138 (c) of the Negotiable Instrument Act. In section 142 (1)(a) it has been laid down that notwithstanding anything contained in the Code of Criminal Procedure, no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing made by the payee or, as the case may be, the holder in due course of a cheque and section 142 (1)(b) provides that such complaint is to be made within one month of the date on which the cause of action arises under clause(c) of the proviso to section 138. In the instant case learned ACJM, Raghunathpur has acted beyond his jurisdiction by issuing summons to the petitioner without even taking cognizance of the offence, contrary to the provision laid down in the Act, without having any occasion of being satisfied for condoning the delay. Taking of cognizance on satisfactory condonation of delay are statutory requirements which cannot be presumed on issuance of process to accused. The impugned order is bad in law and is not tenable under such circumstances. It is to be borne in mind that with the amendment of section 142 in the year 2002, a proviso has been introduced which lays down that cognizance of a compliant may be taken by the court after the prescribed period if the complainant satisfies the court that he had sufficient cause for not making a complaint within such period of thirty days. There is material on record to indicate that a complaint has been lodged under section 138 of the N.I. Act against the petitioner for dishonour of his cheques and for which notice has already been issued to him demanding repayment. It is also to be seen if notice was issued to the drawer within thirty days of dishonour of the cheques in compliance with section 138 proviso (b) of the N.I. Act. The revision application allowed.
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2022 (5) TMI 1024
Dishonor of Cheque - pre-summons mediation - Negotiable Instruments Act, 1881 - HELD THAT:- In respect of pre-summons mediation, National Portal for summons and the scheme for establishment of special courts for cases under the NI Act, the Union of India, the High Courts and the State Governments are directed to submit their suggestions within a period of two weeks from today. In so far as constitution of special courts is concerned, the learned Amicus Curiae has, for the purposes of constitution of special courts under the NI Act, identified states of Maharashtra, Delhi, Gujarat, Uttar Pradesh and Rajasthan on the ground that the number of cases pending in these states are higher than the other states. The suggestion made by the learned Amicus Curiae is that five districts in each of the above States, where cases under the NI Act are high, can be selected and one court in each such district be established. The High Courts of Maharashtra, Delhi, Gujarat, Uttar Pradesh and Rajasthan can respond to the said suggestion made by the learned Amicus Curiae, within a period of two weeks. List for further directions on 12.05.2022 at 3.00 p.m.
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