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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter May 26, 2022 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise Articles Decision of Hon'ble Supreme Court on alleged extra-territorial applicability of levy on ocean freight under CIF Contracts INTEREST UNDER GST: An Interesting Interest ADJUDICATION UNDER GST (PART-10) NOTICES RELATING TO REASSESSMENT PROCEEDINGS WITHOUT APPLICATION OF ANY MINDS –notice to agent like authorized signatory in bank account, for allegations of escapement of income in hands of agent. News Govt imposes restrictions on sugar exports from June 1: DGFT Notifications Customs 16/2022 - dated 24-5-2022 - ADD Seeks to levy anti-dumping duty on imports of 'Ceramic Tableware and kitchenware, excluding knives and toilet items' originating in or exported from China PR for a period of five years. 15/2022 - dated 24-5-2022 - ADD ADD on "Decor Paper" originating in or exported from China PR - Seeks to amend notification no. 77/2021-Customs(ADD) dated 27th December, 2021 30/2022 - dated 24-5-2022 - Cus Seeks to provide global Tariff Rate Quota (TRQ) of 20 LMT per FY to Crude Sunflower Oil and Crude Soyabean Oil for 2 years exempting from whole of BCD and AIDC 45/2022 - dated 24-5-2022 - Cus (NT) Inland Container Depots for loading and unloading of goods - Seeks to amend Notification No. 12/97-Customs (N.T.) dated the 2nd April, 1997 DGFT 11/2015-20 - dated 25-5-2022 - FTP Amendment in import policy of Paper and incorporation of policy condition in Chapter 48 of ITC (HS), 2022, Schedule - I (Import Policy) 10/2015-20 - dated 24-5-2022 - FTP Amendment in Export Policy of sugar GST - States S.O. 39/P.A.8/2022/S.1/2022 - dated 26-4-2022 - Punjab SGST Seeks to bring in force provisions of sections 4 and 5 of the Punjab Goods and Service Tax (Amendment) Act, 2021 S.O. 38/P.A.8/2022/S.1/2022 - dated 26-4-2022 - Punjab SGST Seeks to bring in force provisions of section 6 of the Punjab Goods and Service Tax Act (Amendment) Act, 2021 S.O. 37/P.A.5/2017/S.23/2022 - dated 26-4-2022 - Punjab SGST Supersession Notification No. S.O.57/P.A.5/ 2017/S.23/2017, dated the 3rd October,2017 S.O. 36/P.A.5/2017/S.168A/Amd./2022 - dated 26-4-2022 - Punjab SGST Seeks to amend Notification No. S.O. 41/P.A.5/2017/ S.168A/2017 dated 22nd March, 2021 S.O. 34/P.A.5/2017/S.25/Amd./2022 - dated 26-4-2022 - Punjab SGST Seeks to amend Notification No. S.O.76/P.A.5/2017/S.25/ 2021, dated the 7th July 2021 Circulars / Instructions / Orders SEBI SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2022/70 - dated 25-5-2022 Simplification of procedure and standardization of formats of documents for issuance of duplicate securities certificates FEMA 04 - dated 25-5-2022 Guidelines on import of gold by Qualified Jewellers as notified by – The International Financial Services Centers Authority (IFSCA) DGFT 10/2015-20 - dated 24-5-2022 Allocation of Tariff Rate Quota for Import of Crude Soya bean Oil and Crude Sunflower Oil Highlights / Catch Notes GST Seeking grant of regular bail - availment of fraudulent input tax credit - bogus/fake firms - criminal conspiracy - Without meaning any expression of opinion on the merits of the case, it is ordered that the petitioners be released on regular bail in the case, subject to their furnishing requisite bail bonds/surety bonds to the satisfaction of the trial Court/Duty Magistrate concerned - HC Visit to Get Source Classification of goods - second hand or used 'Paintings' - GST on margin - determination of the liability to pay tax - shall be paid by the applicant on the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored. - Provisions of Rule 32(5) of CGST Rules will be applicable. - The 'Paintings are classifiable under Heading 9701 of the GST Tariff - AAR Visit to Get Source Seeking grant of Bail - wrongful availment of Input Tax Credit - fake invoices - Considering the seriousness and nature of the offence allegedly committed by the applicant/accused, this Court is not inclined to grant concession of bail to applicant/accused - DSC Visit to Get Source Income Tax Eligibility of relief u/s 89 r.w. Rule 21A of I.T. Rules - Amount to be spread over the years including future years - compensation received by the assessee as only salary received in advance OR or as 'compensation on termination of employment' - Company was closed down - company has paid the 'one time lump-sum ex-gratia amount' as deemed 'salary' paid to an ex-employee in advance - ITAT has already decided the compensation received by the assessee as only salary received in advance - AO directed to allow the claim of the assessee u/s. 89 r.w. Rule 21A of I.T. Rules - AT Visit to Get Source Disallowance of deduction u/s 80IB - Comparing profitability of two entities - as rightly noted by Ld. CIT(A), the profitability of the two entities could not be compared since MMHRC was a charitable entity having objects of Charity whereas MH was run on commercial basis. Pertinently, MH was a super specialty hospital having no competition. Therefore, to say that both the entities should have same profitability would not be a correct proposition - Thus the impugned order in granting full deduction u/s 80IB could not be faulted with. - AT Visit to Get Source Addition of transportation charges - The contention of the Assessee that its books were destroyed in a cyclone ought not to have been brushed aside easily by the ITAT - It could have been possible for the AO to have summoned the Area Sales Executive of BDA Limited, who issued the above letter. For some reason, that was not done. ITAT could have also adopted the approach earlier adopted by it in its order dated 2nd September, 2008 viz., sending the matter back to the AO for a fresh verification. Even that was somehow given up when the ITAT again passed the subsequent order after recall of the earlier order. - HC Visit to Get Source Reopening of assessment u/s 147 - The inquiry at this stage is only to see whether there are reasonable grounds for the Income Tax Officer to believe and not whether the omission/failure and the escapement of income is established. It is necessary to keep this distinction in mind. - it cannot be said that there is a total non-application of mind on the part of the Assessing Officer while recording the reasons for reopening of the assessment. It also cannot be said that his conclusion was merely based on the observations and information received from the Investigation Wing - HC Visit to Get Source Unexplained cash credit u/s 68 - the borrowings from NBFC, Bank can not be treated as unexplained cash credit u/s 68 of the Act which was done by the AO simply on the basis of increase in these borrowings as shown in the balance sheet with doing any verification of evidences filed by the assessee. Similarly the First Appellate Authority has dismissed the appeal on hyper technical ground of non-condoning the delay of 13 days which is against the principle of natural justice and fair play. - Additions deleted - AT Visit to Get Source Exemption u/s 11 - registration u/s 12A denied - For registration u/s 12A the steerage of the Act is that the identity of assessee and the activity relating to the main object of the society. In following two points was not properly considered by the ld. CIT(E). The maintaining a coaching centre only was incorporated in the order of the CIT(E). But no proper verification was done from the books of account and from the activities of the assessee by revenue. Related to maintenance of proper accounts no specific lacuna was found out by revenue. - Registration directed to be granted - AT Visit to Get Source TDS / withholding tax u/s 195 - the consideration paid by ESPN India for purchase of advertisement space was not taxable during the period under consideration. The consideration paid by ESPN India is not for ‘use’ of equipment (server) or for any process nor imparting of any information concerning technical, industrial, commercial, or scientific knowledge, experience or skill. Further, no right has been conferred on ESPN India over the server or website belonging to ESPN UK and ESPN India is merely a reseller of advertisement space it purchases on ESPN UK’s website. - AT Visit to Get Source Deemed dividend under Section 2(22)(e) - addition only qua the peak amount - Whether addition should be restricted to the peak amount of the loans given during the year? - Deeming fiction of dividend under Section 2(22)(e) comes to play regarding each and every sum received by the concerned assessee - AT Visit to Get Source Reopening of assessment u/s 147 - Amount of gross income shown by assessee AO has disbelieved gross receipt - the ld. AO should have made independent inquiry of the above sum paid by Wave Films as advance to the assessee in cash to correct position of the above transactions. It is more pertinent when the assessee claimed that business of wave films continued. Merely, because some infirmity is noted in stamp paper, it could not have resulted into stating that whole transaction is bogus. - AT Visit to Get Source Disallowance on account of interest paid on delayed payment of TDS - as the tax deducted at source (TDS) is not in the nature of the income tax which is required to be paid on profits & gains chargeable to tax u/s. 28 of the Act and thus not disallowable u/s. 40(a)(ii) of the Act, the consequent the interest paid u/s. 201(1A) of the Act upon late payment of TDS also cannot be disallowed u/s. 40(a)(ii) of the Act. - AT Visit to Get Source IBC Approval of Resolution plan - Abatement, extinguishment, discharge and settlement of claims raised by original respondents - Section 31(1) of IBC - the liability raised by the impugned notices which are subject matter of present writ-application stands extinguished so far as ESIL is concerned. - HC Visit to Get Source Service Tax Non-discharge of tax liability - Petitioner neither got service tax registration nor paid any service tax on the taxable consideration received - demand alongwith interest and penalty - The Petitioner after arguing for some time sought for permission to withdraw the writ petition to avail alternative remedy of appeal as is available - Permission granted - HC Visit to Get Source Levy of Service Tax - Cargo Handling Services - there are no merit in the argument of Revenue that the activity of Cargo Handling in the Container Freight Station is incidental to the Storage and Warehousing activity. From the discussion it is apparent that storage in the container freight station is only incidental to the cargo handling activity. The main purpose of the Container freight Stations is to handle cargo for the purpose of import or exports. The main purpose of the container Freight Stations is not Storage and Warehousing. In these circumstances, we do not find any merit in the order of Lower Authorities. - AT Visit to Get Source Central Excise Clandestine removal - prints out taken from the Hard Disk recovered in the premises of the alleged secret office (claimed to be a third party premises or godown) - admissible evidence or not - It is now settled principle that cases of this nature need not be proved with mathematical precision. At the same time, a single piece of evidence cannot be accepted to encompass the whole gamut of transactions. - . Reliance on principle of preponderance of probability, no way confers a License to demand duty on the basis of assumptions/presumptions/ vague imputations - AT Visit to Get Source Case Laws: GST 2022 (5) TMI 1185 Seeking grant of Bail - availment of input tax credit - floatation of bogus firms and by issuing bogus bills - HELD THAT:- The evidence collected during the course of investigation clearly points towards complicity of the petitioners, who have committed a colossal fraud of about Rs.1.80 crores. Such like huge loss is virtually an attempt to shatter the economy of the country. While noticing that the petitioners are habitual offenders, this Court does not find any ground for grant of bail to the petitioners at this stage. Both the petitions, as such, are dismissed. 2022 (5) TMI 1184 Seeking grant of regular bail - availment of fraudulent input tax credit - bogus/fake firms - criminal conspiracy - HELD THAT:- Considering the above background and custody of the petitioners, this Court is of the opinion that the conclusion of trial is likely to consume considerable time, as only two prosecution witnesses have been examined out of total thirty four prosecution witnesses, therefore, further detention of the petitioners may not serve any useful purpose, who are presently confined in judicial custody after their arrest. Apart from it, the material witnesses are police officials and officials of Excise Department and presently, there does not seem to be any possibility of their being won over. Without meaning any expression of opinion on the merits of the case, it is ordered that the petitioners be released on regular bail in the case, subject to their furnishing requisite bail bonds/surety bonds to the satisfaction of the trial Court/Duty Magistrate concerned - Petition allowed. 2022 (5) TMI 1183 Classification of goods - second hand or used 'Paintings' - determination of the liability to pay tax - applicability of Rule 32(5) of CGST MGST Rules, 2017 - HELD THAT:- The provisions of Rule 32(5) of CGST MSGST Rule, 2017 are applicable to sale of such 'Paintings' and tax shall be paid on the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored. On an application filed by IN RE: M/S. ASTAGURU AUCTION HOUSE PRIVATE LIMITED [ 2022 (3) TMI 572 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA] has held that Paintings classifiable under Heading 9701 and the applicant was liable to pay GST of 12%. In the said case also, as in the present case, the applicant was dealing amongst other goods, in second hand paintings and it was also held that the provisions of Rule 32 (5) of the CGST Rules were applicable to the applicant in respect of second hand goods. Since in the instant case also the applicant is dealing only in second hand paintings i.e. applicant is buying second hand paintings and selling the same on their website to the highest bidder and no input tax credit is being availed on the purchases of such 'Paintings', therefore the Provisions of Rule 32(5) of CGST Rules will be applicable in the instant case also. 2022 (5) TMI 1182 Seeking grant of Bail - wrongful availment of Input Tax Credit - fake invoices - HELD THAT:- This Court is of the considered view that allegations levelled against the applicant/accused are that he issued fake invoices to the tune of Rs. 5.65 crore without the actual supply of goods and all this have been done by the applicant/accused in connivance with the other firms. It is further alleged that there are nearly 56 firms, among whom fake invoices have been exchanged in regard to the amount of Rs. 5.65 crore despite the fact that goods had never been supplied through those invoices. On the basis of said fake invoices tax to the tune of Rs. 5.65 crore has been allegedly evaded by way of claiming the Income Tax Credit. Considering the gravity and the nature of the allegations levelled against the applicant/accused and the fact that the investigation of the case is at nascent stage and further considering the fact that now a days economic offences are rampant and should be dealt with due firmness as observed by Hon ble Apex Court in Y.S. JAGAN MOHAN REDDY VERSUS CENTRAL BUREAU OF INVESTIGATION [ 2013 (5) TMI 896 - SUPREME COURT] wherein the Hon ble Apex Court has observed that economic offences constitute a class apart and need to be visited with different approach in the matter of bail. The economic offences having deep rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economic of the country as a whole and thereby posing serious threat to the financial health of the country. Considering the seriousness and nature of the offence allegedly committed by the applicant/accused, this Court is not inclined to grant concession of bail to applicant/accused Saurabh Srivastava - Bail application dismissed. Income Tax 2022 (5) TMI 1181 Reopening of assessment u/s 147 - pre-condition to initiate proceedings under Section 147 - Scope of notices under Section 148A of the Act, 1961 as substituted by the Finance Act, 2021 - Notice not issued within period of limitation - Additional Solicitor General of India has made a statement that as per Clause-7.1 of the Board s circular dated 11.05.2022, the notices under Section 148 relating to the Assessment Years 2013-14, 2014-15 and 2015-16, shall not attract the judgment of Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT ] and the impugned notice under Section 148 issued on 01.04.2021 for the Assessment Year 2014-15 is, therefore, clearly barred by limitation - HELD THAT:- As per Clauses 6.2 and 7.1 of the Board s Circular dated 11.05.2022, if a case does not fall under Clause (b) of sub-Section (i) of Section 149 of the Act, 1961 for the Assessment Years 2013-14, 2014-15 and 2015-16 (where the income of an assessee escaping assessment to tax is less than Rs.50,00,000/-) and notice has not been issued within limitation under the unamended provisions of Section 149, then proceedings under the amended provisions cannot be initiated. The impugned notice under Section 148 of the Act, 1961 issued on 01.04.2021 for the Assessment Year 2014-15 and the impugned notice dated 13.01.2022 under Section 144 of the Act, 1961 and the reassessment order dated 13.01.2022 under Section 147 read with Section 144B of the Act, 1961 for the Assessment Year 2014-15 passed by the respondent No.4 are hereby quashed. The writ petition is allowed. 2022 (5) TMI 1180 Order u/s 119(2)(b) - condonation of delay in filing of Form No.10B - scope of expression 'genuine hardship' - HELD THAT:- As decided in G.V. INFOSUTIONS PVT. LTD. VERSUS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 10 (2) , ANR. [ 2019 (2) TMI 177 - DELHI HIGH COURT] the statute or period of limitation prescribed in provisions of law meant to attach finality, and in that sense are statutes of repose; however, wherever the legislature intends relief against hardship in cases where such statutes lead to hardships, the concerned authorities - including Revenue Authorities have to construe them in a reasonable manner. That was the effect and purport of this court's decision in Indglonal Investment Finance Ltd. [ 2011 (6) TMI 229 - DELHI HIGH COURT] . This court is of the opinion that a similar approach is to be adopted in the circumstances of the case Thus this writ-application succeeds and is hereby allowed. The impugned order passed by the respondent dated 17.06.2021 is hereby quashed and set aside. The delay condone application filed by the writ-applicant is hereby allowed. 2022 (5) TMI 1179 Denial of deduction u/s 80P(2)(a)(i) in respect of interest income earned from the deposits held by the assessee - HELD THAT:- As relying on M/S. PRATHAMIKA KRUSHI PATTINA SAHAKARI NIYAMITA [ 2022 (1) TMI 153 - ITAT BANGALORE] we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to allow deduction u/s 80P(2)(a)(i) of the Act on the interest income earned from investments made with the banks in compliance with the requirements under the Karnataka Co-operative Societies Act and Rules. The assessee should be given adequate opportunity of being heard. Assessee appeal allowed for statistical purposes. 2022 (5) TMI 1178 Rectification u/s 154 - addition u/s 40(a)(ia) - objections raised by internal audit party - short deduction of TDS from the payments made towards professional charges and advertisement charges - HELD THAT:- Internal audit party has gone by presumptions and accordingly taken the view that there was shortfall in deduction of TDS which would warrant disallowance expenditure under section 40(a)(ia) of the Act. On the contrary, the Ld AR demonstrated that the details of professional charges as well as advertisement expenses were duly furnished before the AO during the course of original assessment proceedings. The assessee has also submitted before the AO that some of the payments are not liable for deduction of tax at source since the payments made to each of the parties was less than the threshold limit prescribed in the respective section for deduction of tax at source. Under the set of facts, it cannot be said that there were mistakes apparent from record in the assessment order passed by the AO under section 143(3) of the Act. As submitted by the assessee, the AO has entertained the view that there were mistakes apparent from record only from the objections given by Internal Audit Party and not from the assessment record. Accordingly, we are of the view that the very initiation of rectification proceeding under section 154 of the Act is bad in law and accordingly the impugned rectification order is liable to be quashed. Accordingly, we set aside the order passed by Ld CIT(A) and quash the rectification order passed by the AO under section 154 of the Act. Appeal of assessee allowed. 2022 (5) TMI 1177 Proportionate deduction u/s. 80IB(10) - Assessee made alternate claim seeking proportionate deduction u/s. 80IB(10) of the Act for flats which are compliance with the provisions of the Act - AO denied the same - HELD THAT:- CIT(A) observed that there were numerous decisions by the Tribunals and High Court and held the assessee is entitled to get the proportionate deduction on the profits of the eligible units which comply with the provisions of section 80IB(10) of the Act, accordingly, directed the AO to allow deduction u/s. 80IB(10) of the Act on eligible units vide para 6.15 of impugned order. Having considering the facts and circumstances of the case and decisions of this Tribunal in respect of allowing proportionate deduction u/s 80IB(10) of the Act which was not disputed by the ld. DR, in our opinion, the CIT(A) rightly allowed deduction for eligible units by placing reliance on the decisions of Hon‟ble High Court which were followed by the Tribunals. Thus, we find no infirmity in the order of CIT(A) in holding the assessee is entitled to have deduction u/s 80IB(10) of the Act on eligible units. Thus, grounds raised by the Revenue fails and are dismissed. Denying deduction u/s 80IB(10) of the Act in respect of 10 flats - HELD THAT:- We find the contentions raised by the ld. AR were raised before both the authorities below. It was contended that the assessee erected an additional wall and a box like window instead of a regular window shed which was separated from the internal wall of the said residential unit with 6 cavity is not usable. In order to verify the same, the AO sought report from the DVO, who clearly stated the said 10 flats exceeding the prescribed built up area of 1500 sft. and particularly held that the said window is includable in the built up area. Therefore, it is clear the additional wall and box like window is to be included in the built up area which is above the prescribed built up area as required for claiming deduction u/s 80IB(10) of the Act. There is no dispute with regard to this position by the ld. AR. Therefore, we find no infirmity in the order of CIT(A) as it was thoroughly discussed from para No.6.10 to 6.12 of the impugned order. Thus, we hold that the assessee is not entitled to claim deduction u/s80I(10) of the Act and we completely agree with the reasons recorded by the CIT(A) and it is justified. Thus, ground No.1 raised by the assessee fails and is dismissed. Disallowance on account of warranty expenses - HELD THAT:- We note that the CIT(A) in the impugned order clearly held that the assessee has not elaborated as to how the facts and issues are identical with the case of its sister concern i.e. Gera Developments Pvt. Ltd. [ 2013 (3) TMI 719 - ITAT PUNE] and by following the ratio of Hon‟ble Supreme Court in the case of Rotork Controls India Pvt. Ltd. [ 2009 (5) TMI 16 - SUPREME COURT] held that the assessee is not entitled to claim warranty expenses allowable u/s 37 of the Act. We find no submissions made before us substantiating the claim of the assessee in terms of the order in the case of Gera Developments Pvt. Ltd. as relied on by the ld. AR. Therefore, in view of the same, we find no infirmity in the order of CIT(A) and it is justified. Thus, ground No.2 raised by the assessee is dismissed. Disallowance made by the AO on account of hawala bills - HELD THAT:- We note that admittedly no details were submitted before the lower authorities below as it is evidenced from the impugned order - DR did not report objection in remanding the matter to the file of AO. Therefore, considering the facts and circumstances of the case and in the interest of justice, we deem it proper to remand the matter to the file of AO for fresh consideration in terms of the material evidences as filed before us at pages 43 to 71. The assessee further is at liberty to file evidences, if any, in support of its claim. Thus, ground No.3 raised by the assessee is allowed for statistical purposes. 2022 (5) TMI 1176 Eligibility of relief u/s 89 r.w. Rule 21A of I.T. Rules - compensation received by the assessee as only salary received in advance OR or as 'compensation on termination of employment' - case selected for limited scrutiny - assessee has submitted Form 10E in support of his claim of relief u/s 89(1), along with copy of Form 16 issued by the employer, Century Textiles and Industries Ltd.- 'Company', after incurring heavy losses shut down its Worli Textile Mill unit in 2008. Around 6,300 of its 6600 of the mill workers opted for the voluntary retirement scheme, assessee is one of the 275 who opposed the closure of the mill and did not opt for the VRS scheme declared by the Company - admissibility of assessee's claim of treating the amount paid by the Company as 'salary in advance' or as 'compensation on termination of employment' would determine whether the mode of computation of relief u/s,89(1) falls under sub-rule (2) or sub-rule (4) of Rule 21A. HELD THAT:- We find that this issue is no longer res integra in view of the Co-ordinate Bench decision of this Tribunal in the case of Rajesh Shantaram Chavan [ 2022 (4) TMI 1179 - ITAT MUMBAI] as decided to treat the compensation received by the assessee as only salary received in advance. Therefore, we direct the AO to allow the claim of the assessee u/s. 89 r.w. Rule 21A of I.T. Rules. Accordingly, the appeal filed by the assessee is allowed. 2022 (5) TMI 1175 Assessment u/s 153A - unrecorded payments to the employees - HELD THAT:- As quantum of salary paid to employees in a trading concern cannot be directly proportional to the profits earned. There cannot be a proportionate and direct co-relation between the salary paid and the profits earned in the case of a trading concern. We also note that during the course of survey, the Department could not unearth any incriminating material which would point out towards any out of book profits having been earned by the assessee firm. Therefore, it is our considered view that even if there had to be an addition on account of some concealed profit, the AO would have to lead evidence to establish earning of such concealed profit and this kind of addition cannot be made on mere surmises - AO has not adopted a correct approach in tabulating such alleged concealed profit and such approach cannot be approved by us - no case for addition on account of concealed net profit is made out and we are not inclined to agree with the findings recorded by the Ld. CIT (A) on this issue and, therefore, we set aside the order of the CIT (A) on the issue of concealed net profits and direct the AO to delete the same. The grounds of appeals on this issue under all the three captioned years are, therefore, allowed. Addition in respect of concealed net profit - HELD THAT:- As we have already deleted this addition on account of alleged concealed profits in all the three years and have decided the issue in favour of the assessee in preceding paragraph 14.2.2 of this order and in view of our such adjudication in favour of the assessee, the ground raised by the Department stands dismissed. Estimated undisclosed investment for earning the concealed net profit - HELD THAT:- In this regard, it is seen that the Ld. CIT (A) had deleted this addition by noting that the assessee had sufficient closing stock which ran into crores of rupees and, therefore, no additional investment was required by the assessee to have been made for undertaking any concealed turnover. Anyway, since we have completely deleted the addition pertaining to alleged concealed net profit in preceding paragraph 14.2.2 of this order, therefore, this addition does not have any feet to stand on. Accordingly, while upholding the order of the Ld. CIT (A) on the issue we dismiss the ground raised by the Revenue. Undisclosed investment in the property Kothi Tehal Singh - HELD THAT:- It would also be worth-mentioning that this issue had also arisen before us in Department s appeal for assessment year 2012-13 wherein this Bench had dismissed the Department s challenge to the deletion made by the Ld.CIT(A) in respect of the property Kothi Tehal Singh by observing that categorical finding given by the Ld. CIT (A) on the issue make it amply clear that the impugned investment had been made by different co-owners in their individual names, beyond the block period and there was no link or connection with the investment made by the partnership concern i.e. the assessee . This Bench also noted that there is no dispute about the fact that the impugned investment related to the property purchased by individuals acting in their individual capacity and that the assessee firm had no connection with the same. Therefore, we find ourselves in agreement with the findings of the Ld. CIT (A) as reproduced above, that no addition could be made in the hands of the assessee firm u/s 69 of the Act as unaccounted investment during assessment year under consideration . Therefore, on the same logic and reasoning, we deem it appropriate to dismiss this ground of appeal of the Department Unaccounted purchases - Assessee arguments have been that the alleged unrecorded purchases were recorded on a paper which carried the title Estimate and were, therefore, not purchases but were only goods received on approval - HELD THAT:- As it is seen that the Ld. CIT (A) has negated this contention of the assessee by noting that this contention of the assessee cannot be accepted as a perusal of the account shows that the account of the party has been credited by the bills amount, meaning thereby that it was the purchase by the assessee - We find the above conclusion arrived at by the Ld. CIT (A) to be correct on the factual matrix of the issue. The arguments of the Ld. AR on the issue do not have feet to stand on in the face of the categorical finding recorded by the Ld. CIT (A) and we uphold the same. The ground stands dismissed. 2022 (5) TMI 1174 Disallowance of deduction u/s 80IB - As per AO MMHRC paid amount to Monica Group in the guise of purchases which was withdrawn and paid back to the assessee. The said cash, in turn, is alleged to have been introduced in MH to inflate hospital receipts with a view to claim higher deduction u/s 80IB(11C) - HELD THAT:- Allegation would have no legs to stand in the light of the fact that Shri T.John Rajasekhar admitted additional income of over Rs.12.35 Crores before Hon ble Income Tax Settlement Commission (ITSC) to account for various discrepancies found in the books and bank accounts. Therefore, the conclusion that the cash was returned back to the assessee could not be upheld. As rightly noted by Ld. CIT(A), except for difference in receipts in two accounting software, there was no other evidence / information to show that the assessee had been receiving income from other sources or had been inflating hospital receipts in order to claim higher deduction u/s 80IB. The difference in receipts has already been offered to tax by the assessee and the same has been accepted by Ld. AO as well. To support his case, Ld. AO has drawn comparison between the two entities. However, as rightly noted by Ld. CIT(A), the profitability of the two entities could not be compared since MMHRC was a charitable entity having objects of Charity whereas MH was run on commercial basis. Pertinently, MH was a super specialty hospital having no competition. Therefore, to say that both the entities should have same profitability would not be a correct proposition - Thus the impugned order in granting full deduction u/s 80IB could not be faulted with. Concurring with the stand of Ld. CIT(A), we dismiss revenue s appeals for both the years. Addition based on difference of Rs.1242.12 Lacs during the entire period from 01.04.2014 to 26.11.2014 (i.e., date of search) - The assessee reconciled whole of the receipts between two software and finally arrived at difference of Rs.1262.28 Lacs and offered the same to tax in the return of income. Therefore, the separate addition of difference of a particular day would not be justified since the same has to be considered to be part and parcel of total difference as offered by the assessee. Therefore, by deleting the impugned addition, we allow the cross-objection of the assessee. The separate addition, as sustained by Ld. CIT(A) in AY 2015-16 stand deleted. 2022 (5) TMI 1173 Revision u/s 263 - assessee had sold an agricultural land on which it had earned capital gain which was exempt as having been earned on an agricultural land - As per CIT agricultural land was not being used for agricultural purposes - HELD THAT:- In the present case there is no denying of the fact that in the Revenue records the land has been classified as agricultural land. The evidence of agricultural activities being carried out on such land was filed with the Assessing Officer. The copy of Jamabandi and Khasra Khatauni was filed with the Assessing Officer - The copy of Khasra/Girdwari and crop inspection book was filed before the Assessing Officer which was again filed before Pr. CIT,where from 2012-13 to 2017-18, Sarson has been mentioned to have been cultivated. The evidence of the land being situated at an ariel distance of 10 Kms., was also filed with the AO vide letter dated nil wherein the details of location, details of land as downloaded from web along with details of population as per census 2011 was submitted. The contents of such letter has already been reproduced in our order vide para 4.1. Therefore, keeping in view these documents and evidences the Assessing Officer took a plausible view and held such land to be agricultural land. The order passed by learned Pr. CIT is not justified. The order passed by the Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue nor the Assessing Officer has assumed wrong facts while arriving at the conclusion. In view of the above, the order passed by learned Pr. CIT u/s 263 is quashed. - Decided in favour of assessee. 2022 (5) TMI 1172 Delayed employees contribution of EPF ESI - scope of amendment - HELD THAT:- There is no dispute between the parties regarding the date of deposit of PF ESI, which clearly is beyond the prescribed date of deposit as applicable under the relevant section of the I.T. Act. Further, there is no dispute between the parties that the deposits were made before the filing of return of income for the relevant assessment year. As Relying on SAGUN FOUNDRY PRIVATE LIMITED VERSUS COMMISSIONER OF INCOME TAX, KANPUR [ 2016 (12) TMI 1479 - ALLAHABAD HIGH COURT] there has been amendment in section 36(1)(va) of the Act, and find that the said amendment is applicable w.e.f. 1.4.2021 and is prospective in nature and not retrospective. Allowed deduction towards employee contribution received by employer which was deposited late by employer beyond the time stipulated u/s 36(1)(va) , but before the due date as prescribed for filing of return of income u/s 139(1) of the 1961 Act, and there cannot be a class different now at this stage where the deduction is to be denied on the ground of strict interpretation of the provisions of Section 36(1)(va) , unless the amendment made by Finance Act, 2021 is made specifically applicable retrospectively from the date of insertion of the provision or any other specified earlier date in the Finance Act, rather on the other hand , the Memorandum to Finance Bill, 2021 has specifically made this amendment applicable from 01.04.2021 and specified that the same shall be made applicable from assessment year 2021-22 and subsequent assessment years. We are presently concerned with ay: 2005-06. - Decided in favour of assessee. 2022 (5) TMI 1171 Disallowance of interest on TDS and TCS and penalty of sales tax - HELD THAT:- CIT(A) has rightly allowed the interest on service tax and interest on VAT by respectfully following the ratio laid down by the Hon ble Supreme Court in the case of Lachmandas Mathuradas [ 1997 (12) TMI 16 - SUPREME COURT] and in the case of Mahalakshmi Sugar Mills Co [ 1980 (4) TMI 1 - SUPREME COURT] holding that such interest paid on service tax and VAT are compensatory in nature and not in the nature of penalty and, therefore, disallowance of such interest cannot be made u/s 37(1) of the Act. As far as the remaining amount is concerned, we find that ld. CIT(A) has confirmed the disallowance for interest on TDS and penalty on sales tax - During the course of hearing, ld. Counsel for the assessee requested for not pressing the disallowance of penalty on sales tax and, therefore, the said disallowance is confirmed. Remaining amount is interest on TDS TCS -. On going through the finding of the ld. CIT(A), we find no reason to interfere into the finding disallowing the claim of interest paid on TDS TCS - Thus, ground no. 1 raised by the assessee is dismissed. Deduction u/s 80IA(4)(iii) - HELD THAT:- Looking to the fact that since as on date the said industrial park is not eligible for deduction u/s 80IA(4)(iii) of the Act for want of being noticed by CBDT, the ld. CIT(A) has rightly denied the claim, however, presently the matter is subjudice before the Hon ble Calcutta High Court and whenever the judgment is passed by the Hon ble Court and if held in favour of the assessee then the assessee shall be eligible to put forth the claim before the Revenue authorities to allow the deduction u/s 80IA(4)(iii) of the Act, else the finding of the ld. CIT(A) will remain confirmed. Thus ground no. 2 of the assessee s appeal is dismissed. Disallowance u/s 14A of the Act comprises of interest disallowance - Hon ble High Court of Bombay in the case of Commissioner of Income-tax vs. Reliance Utilities Power Ltd [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] we are of the view that interest disallowance u/s 14A of the Act at Rs.60,03,465/- is uncalled for. We also find that the requirement of sub-Section (2) of Section 14A of the Act is not fulfilled by the ld. AO as there is no specific finding that why he was not satisfied with the correctness of the claim of the assessee of having not incurred any expenditure for earning exempt income. Thus, under these given facts and the settled judicial precedence, no disallowance u/s 14A of the Act was called for by the ld. AO. Thus, ground no. 1 raised by the Revenue is dismissed. Disallowance of interest paid/debited - Sufficiency of own funds - HELD THAT:- Where the assessee had sufficient interest free funds in the form of share capital and accumulated reserve and surplus to explain the interest free advances given to its subsidiary companies, we do not find any infirmity in the finding of the ld. CIT(A) deleting disallowance of interest expenditure - Hence, ground no. 2 raised by the Revenue is dismissed. Unexplained cash credit u/s 68 - HELD THAT:- As assessee has furnished sufficient documents including the income tax return, audited financial statement, assessment order u/s 143(3) of the Act for AY 2011-12, Bank accounts of the share applicants and the annual report filed with the Registrar of Companies in case of all the alleged cash creditors which in our view were sufficient to prove the identity and creditworthiness of the cash credit companies and the genuineness of the transaction entered between the assessee and the group companies. Ld. D/R could not controvert the fact that the assessee company is showing the net profit of Rs. 66.25 Cr, Rs. 35.64 Cr, Rs. 108.88 Cr and Rs. 48.47 Cr respectively for the financial years ending on 31.03.2008, 31.03.2009, 31.03.2010 31.03.2011 which means that the assessee company is worth investing. Similarly, the share applicants being part of the assessee group are also having sufficient funds to invest in the assessee company. Thus find no infirmity in the finding of the ld. CIT(A) deleting the impugned addition made u/s 68 of the Act. Thus, ground no. 3 raised by the Revenue is dismissed. Disallowance of bad debts as balance written off - HELD THAT:- From the above finding and the ratio laid down in Binani Cement Ltd. [ 2015 (3) TMI 849 - CALCUTTA HIGH COURT] and Britannia Industries Ltd [ 2015 (6) TMI 39 - CALCUTTA HIGH COURT] we find no infirmity in the finding of the ld. CIT(A) allowing the claim of the assessee writing off the stock being in the nature of business loss. We also find no infirmity in the finding of the ld. CIT(A) allowing the claim of bad debts as these were the sales/rental made in the past offered as revenue but being not realizable has been claimed as bad debts in the regular books of account and this claim has been rightly made in view of the ratio laid down by the Hon ble Supreme Court in the case of TRF Ltd. [ 2010 (2) TMI 211 - SUPREME COURT] - we confirm the finding of the ld. CIT(A) and dismiss the ground no. 5 raised by the Revenue. Deduction u/s 80IB(10) of the Act in respect of projects namely Salarpuria Serenity and Salarpuria Sanctity - HELD THAT:- We find that deduction u/s 80IB(10) of the Act are given for housing projects in a manner of granting incentive to the developers and builders to take up such projects so as to fulfil the housing needs of the citizen of our country. It includes planning of such housing projects, earmarking of the project land, taking various approvals from the local authority for the construction, arrangement of funds to construct the projects, getting the completion certificate and then finally selling the same. Though all the conditions are very important to be fulfilled for claiming deduction but approval of the project and completion certificate of the project are most essential and as far as the other conditions are concerned if there is a violation akin to the residential units then the deduction should not be denied for the total project but should be restricted only to the profits earned from sale of such units which are in violation of the conditions provided u/s 80IB(10) of the Act. We, therefore, respectfully following the decisions referred herein above find no infirmity in the finding of the ld. CIT(A) in allowing the proportionate deduction u/s 80IB(10) of the Act for the gains from Salarpuria Sanctity (except for those two flats which did not comply to the requirement of Clause e f of Section 80IB(10) of the Act). Therefore, we confirm the finding of the ld. CIT(A) allowing 100% deduction u/s 80IB(10) of the Act for Salarpuria Sanctity (100%) and proportionate deduction u/s 80IB(10) of the Act for Salarpuria Serenity 2022 (5) TMI 1170 Validity of Reopening of assessment u/s 147 - independent enquiry of the information or formation of belief available on record or not? - AR emphasized that the A.O has issued the notice based on the observations of the Hon ble ITAT in the case of M/s industrial estates Pvt Ltd [ 2013 (11) TMI 303 - ITAT MUMBAI] and no independent enquiry was conducted for recording the reasons - HELD THAT:- A.O. has issued the notice in the year 2014 and the Ld.AR has raised one of the objections that no satisfaction of the Jt.CIT was obtained u/sec151 of the Act before the issue of impugned notice and the prior sanction of appropriate authority. Since the issue pertains to A.Y 2007-08, the revenue has expressed the difficulty in providing the records/material to verify the factual aspects on sanctioning authority. We find that the assessee has filed the return of income for the A.Y.2007-08 in the status of A.O.P. with taxable income of Rs.Nil in compliance to notice u/sec 148 - AR demonstrated that the income is distributed among the six Joint Lessees with the percentages referred in the assesseement order and the shares are determinate and known, which is not disputed by the revenue. Further they have offered the share of income of joint lessees in their hands/assessments with the jurisdictional income authorities. Reopening is on the wrong assumption of facts and the information received from another assessing officer would not by itself be the basis to have a belief that the income has escaped assesseement . Accordingly, we find the reassessment is bad in law and quash the assessment order passed u/s 143(3) r.w.s 147 of the Act. Since the legal issue is decided in favour of the assessee and again adjudicating on merits becomes academic and are left open and we allow the grounds of appeal in favour of the assessee. 2022 (5) TMI 1163 Validity of Order u/s 148A - reopening of assessment - HELD THAT:- A this Court is of the view that the Petitioner-Assessee has a right to get adequate time in accordance with the Act to submit its reply. Section 148A(b) permits the AO to suo moto provide up to thirty days period to an assessee to respond to the Show Cause Notice issued u/s 148A(b), which period may in fact be further extended upon an application made by the Assessee in this behalf, and such period given to the assessee is excluded in computing the period of limitation for issuance of notice u/s 148 in terms of the third proviso to Section 149 of the Act. Since, in the present case, the Petitioner-Assessee is a resident of the United States of America, this Court is of the view that the delay of one day in asking for an adjournment should not have led to closure of the right to file a reply to the Show Cause Notice. Consequently, the impugned order passed under Section 148A(d) as well as the notice under Section 148 of the Act, both dated 13th April, 2022, are quashed and the Respondent No.1 is directed to pass a fresh reasoned order under Section 148A(d) after considering the reply filed by the Petitioner in accordance with law within eight weeks. 2022 (5) TMI 1162 Seeking refund which was recovered in excess of 10% of the total disputed tax demand against the refunds due - HELD THAT:- This Court is of the view that the restrictive stay order dated 11 th March, 2020 issued by the Respondents granting stay to the petitioner only till 30th September, 2020 is in violation of the directions of the CBDT as well as previous orders of this Court wherein it has been held that the Assessing Officer must grant stay till the disposal of the first appeal. Also, keeping in view the fact that the adjustments have been made on 7th September, 2021 i.e. prior to issuance of a set off of refund order dated 28th January, 2022 under Section 245, this Court is of the opinion that the Petitioner is entitled to refund of adjustment made in excess of 10% of the total disputed tax demand. Consequently, this Court directs the respondents to refund to the petitioner the amount adjusted in excess of 10% of the disputed tax demands for the Assessment Year 2017-18 within four weeks along with statutory interest. 2022 (5) TMI 1161 Revision u/s 263 - Non affording an opportunity of hearing to the petitioner - HELD THAT:- Show cause notice was issued to the petitioner on 02.11.2020 fixing the date of compliance on 09.11.2020. The petitioner sought adjournment and thereafter filed her written reply on 22.12.2020. Thus, it can not be said that the impugned order has been passed without affording an opportunity of hearing to the petitioner. That apart, after the impugned order under Section 263 was passed the Assessing Authority issued notices to the petitioner and petitioner participated in proceedings and thereafter an assessment order under Section 143(3) readwith Section 263 and Section 144 B of the Act, 1961 for the Assessment Year 2016-17 was passed on 29.03.2022. This Assessment order is also not under challenge in the present writ petition. Apart from above, the order under Section 263 is appealable under Section 253(1)(c) of the Act, 1961. The Assessment Order dated 29.03.2022 is appealable under Section 246 A. 2022 (5) TMI 1160 Addition of transportation charges - As per ITAT materials produced by the Assessee did not sufficiently explain the transaction in question and, therefore, the said addition was not interfered with - HELD THAT:- The contention of the Assessee that its books were destroyed in a cyclone ought not to have been brushed aside easily by the ITAT particularly since the Assessee was located in Odisha and the problem during the AY in question was not peculiar to it. In any event, this claim could have easily been verified by the ITAT instead of entirely disbelieving the case of the Appellant. The Court has perused the confirmation letter issued by BDA Ltd. Addressed to the Appellant which states that RDL had issued the credit note of Rs.4,91,350/- out of which Rs.4,02,600/- is towards reimbursement of transportation charges (carriage inward) borne by the Appellant at the time of delivery of stocks. It could have been possible for the AO to have summoned the Area Sales Executive of BDA Limited, who issued the above letter. For some reason, that was not done. ITAT could have also adopted the approach earlier adopted by it in its order dated 2nd September, 2008 viz., sending the matter back to the AO for a fresh verification. Even that was somehow given up when the ITAT again passed the subsequent order after recall of the earlier order. As the Court is of the view that the disallowance claimed by the Appellant towards transportation charges was not justified. The question is accordingly answered in the negative i.e. in favour of the Assessee. 2022 (5) TMI 1159 Reopening notice issued u/s.148 in the name of the Polytechnic - Whether no valid proceeding u/s.148 can be initiated by issuing a notice on a person who is not assessable as a distinct person under the Income Tax Act ? - writ-applicant is a Trust running various educational institutions which include N.G. Patel Polytechnic - HELD THAT:- As the basic fallacy cum incongruity arising in the stand of the Department is that, for the AY 2016-17 to 2018-19 (wherein assessment orders have been passed u/s.143(3) after filing of this petition), the Department is treating the Polytechnic as a part of the writ-applicant Society while for the Assessment Years 2009-10, 2011-12 and 2012-13, the Department wants to treat the Polytechnic as a separate assessable entity. This basic contradiction in the stand of the Department itself is sufficient to hold that the notice issued u/s.148 on the Polytechnic by treating it as a separate assessable entity, is patently illegal. Conclusions:- (i) From the inception of the writ-applicant Society and the Polytechnic, the writ-applicant Society appears to be an assessable entity. The Polytechnic is an entity which is run and managed by the writ-applicant Society, and hence, it is a part of the writ-applicant Society and cannot be considered as a separate assessable entity in the eyes of law under the Income Tax Act. (ii) The writ-applicant Society i.e. Sardar Vallabhbhai Patel Education Society has included all the transactions carried out by the Polytechnic including the transactions carried out with the Bank of Baroda. (iii) The writ-applicant Society for the relevant assessment years has included the above transactions in its return of income. (iv) The allegation of the respondent that the Polytechnic has filed its return of income for the Assessment Years 2005-06 to 2007-08 has been denied in clear terms and the said denial is also supported by the documentary evidences showing that even in the Assessment Years 2005-06 to 2007-08, that the writ-applicant Society i.e. Sardar Vallabhbhai Patel Education Society has included the income of the Polytechnic in its return of income, and therefore, the question of filing a separate return in the name of the Polytechnic does not arise. (v) Even after the filing of this petition, the Department, in the assessment order passed u/s.143(3) for the Assessment Years 2016-17 to 2018-19, has considered the Polytechnic as a part of writ-applicant Society, and hence, the stand of the respondent that the Polytechnic is a separate assessable entity is erroneous in law as well as on facts. (vi) The basic requirement that there has to be income which has escaped the assessment is completely missing as the Department itself has assessed the income of the Polytechnic and other institutes run by the Society as the income of the Society and in fact even in the later assessment years i.e. for the Assessment Years 2016-17 to 2018-19 in scrutiny assessment in 143(3) assessed the income so offered as the income of the writ-applicant Society itself. 2022 (5) TMI 1158 Reopening of assessment u/s 147 - eligibility of reason to believe - adequacy of the reasons provided by AO - HELD THAT:- It is a settled position of law that the adequacy of the reasons provided by the Assessing Officer fall outside the review powers and remains within the domain of the AO at this stage of the proceedings where only a preliminary finding under section 147/148 has been made. It is necessary to reiterate that we are at the stage of the validity of the notice under section 148/147. The inquiry at this stage is only to see whether there are reasonable grounds for the Income Tax Officer to believe and not whether the omission/failure and the escapement of income is established. It is necessary to keep this distinction in mind. (See Shri Krishna (P.) Ltd. vs. ITOS [ 1996 (7) TMI 2 - SUPREME COURT] ). Thus it cannot be said that there is a total non-application of mind on the part of the Assessing Officer while recording the reasons for reopening of the assessment. It also cannot be said that his conclusion was merely based on the observations and information received from the Investigation Wing. The Assessing Officer could be said to have applied his mind to the same. The Assessing Officer could not be said to have merely concluded without verifying the facts that it is the case of reopening of the assessment. We do not find merit in the vociferous submission of the learned counsel appearing for the writ applicant that the contents of the reasons recorded by the Assessing Officer for the reopening of the assessment is merely an introduction about the investigations conducted by the Investigation Wing, the modus operandi of the entry providers, the summing up of inquiry of the Investigation Wing, the information received from the Investigation Wing etc. We have examined the belief of the Assessing Officer to a limited extent to look into whether there was sufficient material available on record for the Assessing Officer to form a reasonable belief and whether there was a live link existing of the material and the income chargeable to tax that escaped assessment. The case on hand is not one where it could be argued that the Assessing Officer, on absolutely vague or unspecific information, initiated the proceedings of reassessment without taking the pains to form his own belief in respect of such materials. WA rejected. 2022 (5) TMI 1157 Eligibility of Reopening of assessment u/s 147 - eligibility of addition on other issues which did not found part on the reasons recorded - no addition with respect to the ground on the basis of which the notice u/s 148 of the Act was issued - assessee had sold an immovable property at Village Jonawas which is situated within 5 K.M. from the municipality s limit of Rewari/Dharuhera Municipality and thus was covered in the definition of Capital Assets - HELD THAT:- The perusal of the reasons recorded for re-opening the assessment as intimated to assessee vide reasons reveals that the reopening was initiated for the reason that assessee had sold an immovable property value in Village Jonawas which is situated within the 5 K.M. from the municipality s limit and thus was a Capital Asset and therefore the assessee should have offered the Capital gains to tax The assessment order reveals that the additions has been made on a different ground, being addition u/s 68 of the Act on account of unexplained deposits in the Bank. We find that Hon ble Bombay High Court in the case of Jet Airways (I) Ltd. . [ 2010 (4) TMI 431 - HIGH COURT OF BOMBAY] has held that if upon the issuance of notice u/s 148 of the Act, the AO does not assess or reassess the income which was the basis of the notice, it would not be open to assess income under some other issue independently. It has further held that if AO intends to assess some other income, which did not initially formed part of the reason to believe that income has escaped assessment, then a fresh notice u/s 148 of the Act would be necessary. In the present case, it is Ld. A.R. s contention that no new notice u/s 148 of the Act was issued for the issues on which the additions that have been made in the assessment framed u/s 143(3) r.w.s. 147 of the Act. The aforesaid submissions of the Ld. A.R. has not been controverted by Revenue. Hon ble Gujarat High Court in the case of CIT vs. Mohmed Juned Dadani [ 2013 (2) TMI 292 - GUJARAT HIGH COURT] after considering the effect of explanation 3 to Section 147 of the Act has held that if the assessing officer does not make any addition with respect to the ground on the basis of which the notice u/s 148 of the Act was issued, then he cannot make addition on other issues which did not found part on the reasons recorded. Thus in the present case, assessment framed by the AO is on other issues which is not part of the reasons recorded for reopening the assessment. In such a situation, the assessment order is not sustainable in the eye of law. We accordingly set aside the assessment. - Decided in favour of assessee. 2022 (5) TMI 1156 Validity of the assessment order passed u/s 153A - incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search or not? - HELD THAT:- Assessment for AY 2006-07 was already completed prior to the date of search and having not abated, the scope of proceedings u/s.153A of the Act had to be confined only to material found in the course of search. Since no material on the basis of which the impugned addition has been made was found in the course of search, the additions made by the AO in the order of assessment could not have been subject matter of proceedings u/s 153A of the Act. Consequently, the said additions made in the order of Assessment could not be made by the AO. We thus allow ground No.1 2 and hold the assessment order to be bad in law and accordingly quashed. 2022 (5) TMI 1155 Assessment u/s 153A - incriminating material found in search or not? - non inclusion of income in the return of income filed in pursuant to search conducted by Revenue u/s 132(1) . - HELD THAT:- The assessee was required to disclose the total income for the impugned assessment, in the said return of income filed on 11.10.2012 which shall include both the disclosed income as well income detected due to search conducted by Revenue u/s 132(1), but the assessee failed to include this income of Rs. 6,26,650/- in the said return of income filed on 11.10.2012 in pursuant to search, more so the aforesaid additions as was made in original assessment order passed by AO u/s 143(3), dated 21.12.2010 were accepted by the assessee as no appeal was filed by the assessee before ld. CIT(A) against the said additions made by AO vide assessment order originally framed u/s 143(3), dated 21.10.2010, and hence the assessment order dated 21.12.2010 attained finality. Thus, the assessee erred in not including the aforesaid income of Rs. 6,26,650/- in the return of income filed on 11.10.2012 in pursuant to search conducted by Revenue u/s 132(1). The AO has now included the said income of Rs. 6,26,650/- in the assessed income vide assessment order dated 30.03.2013 passed u/s 153A read with Section 143(3) of the 1961 Act. There is no duplication or double addition perse made by the AO, as the fault lies with the assessee in not including the said accepted income of Rs. 6,26,650/- in the return of income filed on 11.10.2012. Of course, the assessee will be entitled for credit of all taxes paid on regular assessment , if any , pursuant to these accepted additions of Rs. 6,26,650/- made by the AO vide assessment order dated 21.12.2010 passed u/s 143(3), and hence no double jeopardy is been done to the assessee,as is alleged by the assessee. Thus, we hold that contentions of the assessee lacks merit and are hereby dismissed. - Decided in favour of revenue. 2022 (5) TMI 1154 Addition u/s 69 based on the valuation report - CIT- A deleted the addition on ground that without pointing out any defects in the books of account, the Assessing Officer could not have made a reference to the DVO under section 142A - HELD THAT:- Obviously, Sargam Cinema [ 2009 (10) TMI 569 - SC ORDER] is applicable to the case of the assessee and the amendment brought in concerning the provisions of section 142A of the I.T. Act have no adverse effect inasmuch as the amended section has expressly been made applicable w.e.f. 1.10.2014. To reiterate, undisputedly, the year under consideration is Assessment Year 2013-14, due to which fact, the amended provisions, in absence of express direction to the contrary, cannot be made applicable to the year under consideration. To make it further clear, it would be appropriate to add that the present provisions of section 142A(2) provide that the Assessing Officer may make reference to the Valuation Officer under subsection (1) of section 142A whether or not he is satisfied about the correctness or completeness of the accounts of the assessee. Evidently, there was no analogous provision in the section prior to the amendment. In such facts and circumstances, the ld. CIT(A) has correctly held that the Assessing Officer was not justified in referring the matter to the DVO and adopting the valuation suggested by the DVO and making addition on the basis thereof. CIT(A) has correctly relied on CIT vs. Shivakami Company Pvt. Ltd. [ 2009 (10) TMI 569 - SC ORDER] K.P. Varghese vs. CIT [ 1981 (9) TMI 1 - SUPREME COURT] - The Hon ble Supreme Court has long since settled the law that unless there is evidence of excess consideration having been paid in the transaction of immovable property, no higher price can be taken in the computation of income. Department has failed to show as to how the decisions in Vijay Kumar Talwar vs. CIT [ 2010 (12) TMI 2 - SUPREME COURT] and Sudarshan Silk Sarees vs. CIT [ 2008 (4) TMI 5 - SUPREME COURT] sought to be relied on by the Department, stand violated. - Decided against revenue. 2022 (5) TMI 1153 Addition treating the agricultural income as income from other sources and enhancement by CIT-A - HELD THAT:- As assessee produced certain evidences in support of his claim regarding earning of agricultural income. AO without verifying the correctness of claim and rebutting the evidences based his finding on certain statistical data. No material is brought on record by the Revenue to rebut the claim of assessee, regarding having higher yield of crops. The statistical data may reflect the trend but cannot be a conclusive proof regarding crop yield. There remains a sharp decline and rise in the yield of crops influenced by various factors. AO ought to have verified by making necessary inquiry about the correctness of claim of the assessee. No finding is given on the evidences filed by the assessee regarding the genuineness of evidences filed by the assessee. Hence, looking to the totality of facts, the addition was made purely on the basis of conjectures and surmises. Such action is not permissible under law. The Revenue ought to have brought adverse material on records to rebut the claim of the assessee. In the absence of such evidence, the impugned additions cannot be sustained. Hence, the AO is hereby directed to delete the addition. The grounds raised in the assessee's appeal are thus, allowed. - Appeal of assessee allowed. 2022 (5) TMI 1152 Grant of exemption u/s 10(23C)(vi) - Denial of exemption as objects clause in the trust deed contains/mentions objects other than educational activities - whether if the trust deed mentions/contains activities other than educational activities, whether the Commissioner of Income Tax (Exemptions) has validly denied grant of exemption under section 10(23C)(vi)? - HELD THAT:- We are of the considered view that the Commissioner of Income Tax (Exemptions), in the instant set of facts has not taken note of the factual position of the assessee in the correct perspective. The assessee has been engaging solely in educational activities. There is admittedly nothing on record to demonstrate that the assessee has engaged in activities other than educational activities. The assessee trust has been registered since 1986. DR has stated that the revenue has not doubted the genuineness of the activities of the assessee trust. The assessee has placed on record the affidavits of trustees to the effect that the assessee trust has solely engaged in educational activities. We are the considered view that since the assessee trust only carried out educational activities, a fact which has also not been disputed by the Revenue, the Commissioner of Income Tax (Exemptions) has erred in fact and law in denying exemption under section 10(23C)(vi) of the Act to the assessee trust in the instant set of facts. Appeal of assessee allowed. 2022 (5) TMI 1151 Unexplained cash credit u/s 68 - loan from NBFC and increase in the outstanding amount over the period - identity, creditworthiness and genuineness of the lenders. - HELD THAT:- AO made disallowance as unexplained cash credit in respect of increase in cash credit limit from Bank of India. After examining the records before us, we have failed to understand as to how the loans from NBFCs borrowed on long term and short term basis were treated as unexplained cash credit. We also note that all these evidences and records comprising loan confirmations, audited financial accounts, statement of interest paid and also the submissions made before AO as well as Ld. CIT(A) were before the authorities below but these authorizes have failed to appreciate the facts correctly. We find that the assessee has borrowed long term funds from NBFCs which were duly shown in the balance sheet note no. 3 and similarly short term borrowing from Bank of India in the form of cash credit was shown in note no. 3. We are of the considered view that the borrowings from NBFC, Bank can not be treated as unexplained cash credit u/s 68 of the Act which was done by the AO simply on the basis of increase in these borrowings as shown in the balance sheet with doing any verification of evidences filed by the assessee. Similarly the First Appellate Authority has dismissed the appeal on hyper technical ground of non-condoning the delay of 13 days which is against the principle of natural justice and fair play. Accordingly we set aside the order of Ld. CIT(A) and direct the AO to delete the addition. Bogus liability u/s 41 - Addition u/s 68 by treating the increase in other current liability as on 31.3.2015 vis a vis 31.3.2014 in the audited balance sheet - HELD THAT:- We find that the AO, on the basis of details filed during the assessment proceedings, noted that there is an increase in other current liability as on 31.03.2015 vis- -vis the corresponding amount under the head other current liability as on 31.03.2014. AO simply added the difference i.e. increase in other current liability as unexplained without pointing out any mistake or the fact that liability has ceased justifying the addition u/s 41 - We note from the details filed before us that the assessee has filed all the details before the authorities below but instead of finding anything wrong therein, the AO simply added the increase over the last year which is wrong and against the provisions of the Act. Under these circumstances, we find that the addition as made by the AO is unsustainable in law and accordingly we direct the AO to delete the disallowance by setting aside the order of Ld. CIT(A). - Decided in favour of assessee. Disallowance of 1% of lorry hire charges on an ad hoc basis - HELD THAT:- In our considered view the disallowance on estimation basis is not permissible under the Act unless the AO has given specific finding as to defects in the books of accounts of the assessee justifying the disallowance. The case of the assessee is squarely covered by the decision of Hon ble Co-ordinate Bench of Kolkata in the case of Biswanath Agarwala [ 2018 (3) TMI 1517 - ITAT KOLKATA ] and in the case of Animesh Sadhu [ 2014 (11) TMI 1170 - ITAT KOLKATA ] for AY 2008-09 wherein the co-ordinate bench has held that no disallowance can be made for inability to do independent verification. The Co-ordinate Bench has also held that only specific expenditure which is unverifiable and unvouched could be disallowed. In the present case also the AO has failed to point out the particular expense which is un-vouched and unverifiable and therefore addition made by the AO cannot be sustained. Accordingly we direct the AO to delete the disallowance by setting aside the order of Ld. CIT(A). 2022 (5) TMI 1150 Revision u/s 263 - CIT setting aside assessment framed u/s 143(3) read with Section 147 for the reason that AO has failed to examined the identity, creditworthiness and genuineness of the transactions of share capital /share premium - HELD THAT:- The revisionary jurisdiction is not available to the PCIT merely on the ground that AO sought reply from the assessee during assessment proceedings which furnished by the assessee with evidences and are available in the assessment records however it did not find an elaborate discussion or reference in the assessment order. Similarly the powers of revision u/s 263 of the Act cannot be exercised arbitrarily in order to make roving enquiries and initiate fresh enquiries . In our considered view , the jurisdiction u/s 263 can be exercised to revise the assessments where no enquiry at all has been conducted by the AO which is a case of lack of enquiry but not in a case where the AO has conducted an enquiry which in the opinion of PCIT is inadequate /insufficient without showing as to how the order framed by the AO after appreciating the evidences filed by the assessee is contrary to facts or not in accordance with law. The case of the assessee finds supports on all these propositions from several decisions by the Apex Courts and other juridical forums as cited before us during the course of hearing namely Malabar Industrial Co. [ 1991 (10) TMI 26 - KERALA HIGH COURT] , CIT vs. Max India Ltd. [ 2007 (11) TMI 12 - SUPREME COURT] , CIT vs. Gabriel India Ltd [ 1993 (4) TMI 55 - BOMBAY HIGH COURT] . Thus we hold that the revisionary jurisdiction has not been validly exercised by the ld PCIT. Accordingly we quash the revisionary proceedings initiated u/s 263 of the Act and the consequent order passed u/s 263 of the Act. The appeal of the assessee is allowed. 2022 (5) TMI 1149 Disallowance made qua PF ESI in respect employee s contribution u/s. 36(1)(va) r.w.s. 2(24)(x) - Payment before the due date of filing of return u/s 139(1) - scope of amendment - HELD THAT:- As relying on case of Lumino Industries Ltd. [ 2021 (11) TMI 926 - ITAT KOLKATA] we are inclined to allow the appeal of the assessee and direct the A.O. to delete the addition and hold that the Amendment brought in Finance Act 2021 w.e.f. 01.04.2021 by inserting an Explanation to section 36(1)(va) and section 43B of the Act is prospective in nature and would apply from AY 2021-22 onwards.Consequently ground no. 2 to 4 are allowed. Difference between books of account and form 26AS - HELD THAT:- We observe that the assessee s total turnover during the year was Rs. 39,43,47,812/-. The assessee is engaged in the business of manufacturing and dealing in material handling equipments, electric starters and spares, service etc. We observe from the reconciliation statement filed before us that the amount of difference as added by the AO is very negligible. Keeping in view the total turnover of the assessee and the fact that the assessee has duly explained as to how the discrepancy has occurred between books of account and form 26AS, we are fully convinced with the reply of the assessee on this issue and find that the addition needs to be deleted. Accordingly we set aside the order of Ld. CIT(A) on this issue and direct the AO to delete the disallowance. Addition as interest on TDS - disallowance by the AO on the ground that the same is not allowable u/s 37 of the Act as the interest on Govt. liability is not permissible and preliminary in nature - HELD THAT:- We find that the interest on delayed payments of TDS is an expense which is incurred wholly and exclusively for the purpose of business as the interest has been paid on delayed payment of TDS which was the liability of the assessee. Accordingly we set aside the order of the Ld. CIT(A) on this issue and direct the AO to delete the disallowance. Liability of business loss and unabsorbed depreciation claimed in the computation by the assessee - HELD THAT:- We find that the assessee has same brought forward business loss and unabsorbed depreciation which the assessee is entitled to claim set off in terms of provision of section 74 of the Act. However, we are of the considered view that the issue is factual and needs to be examined at the level of AO. Accordingly we restore the issue to the file of the AO with the direction to verify the same and allow in terms of provision of section 74 of the Act. This ground is allowed for statistical purposes. 2022 (5) TMI 1148 Penalty u/s 271(1)(c) - defective notice u/s 274 - non specification of clear charge - HELD THAT:- As notable that in the assessment order the Assessing Officer alleges allegation of concealment of particulars of income whereas penalty has been imposed on the allegation of furnishing of inaccurate particulars of income and in the notice the Assessing Officer has not struck down / struck off irrelevant allegation and has made both the allegations simultaneously. Therefore, the issue is covered in favour of the assessee by the judgement of Sahara India Life Insurance Company Ltd. [ 2019 (8) TMI 409 - DELHI HIGH COURT] - Respectfully following the same penalty imposed by the Assessing Officer and confirmed by the ld. CIT (Appeals) is cancelled and the Assessing Officer is directed to delete the penalty. - Decided in favour of assessee. 2022 (5) TMI 1147 Reopening u/s 147 - Deduction u/s 80IC - whether the assessee s allowance of claim of deduction u/s 80IC can be revisited by issuing notice u/s 148 of the Act especially when there has been no change in facts and circumstances of the case? - HELD THAT:- If the assessee s claim for deduction is held to be allowable in assessment year 201314, there is no reason why the assessee s claim is not allowable in assessment year 2012-13 (i.e. the year under appeal) when the Statute specifically provides allowance of claim of deduction @ 100% for the initial five assessment years. As far as the issue of having multiple initial assessment years for the purpose of claim of deduction is concerned, the same stands having attained finality by the order of the Hon'ble Apex Court in the case of Pr.CIT, Shimla Vs. M/s Aarham Softronics [ 2019 (2) TMI 1285 - SUPREME COURT] and there is no dispute about that. It is also to be mentioned again, even at the cost of repetition, that the AO himself had accepted the assessee s claim for deduction @ 100% on substantial expansion in the original assessment proceedings and, therefore, without recording any cogent reason, which would justify the reopening, without pointing out any difference in the facts and circumstances of the case and without establishing that there has been some fraud or misrepresentation on part of the assessee, the claim once allowed cannot be revisited. Section 147 of the Act authorizes the re-opening of any assessment of a previous year. Section 148, which contains the conditions for re-opening assessments, including the limitation period within which notices can be issued, by its proviso. As to what can be the valid grounds for re-opening an assessment has been the subject matter of several decisions. In Income Tax Officer, Calcutta Ors. vs. Lakhmani Mewal Das [ 1976 (3) TMI 1 - SUPREME COURT] the Hon'ble Apex Court held that the reasons to believe must be based on objective materials, and on a reasonable view. Thus basis for a valid reopening of assessment should be availability of tangible material, which can lead the AO to scrutinize the returns for the previous assessment year in question, to determine, whether a notice under Section 147 is called for. Accordingly, in view of the settled judicial precedents as noted above, we cannot endorse the reopening of the assessment in the present case. - Decided in favour of assessee. 2022 (5) TMI 1146 Exemption u/s 11 - registration u/s 12A denied - Absence of dissolution clause - HELD THAT:- As relying on various case M/S SHREE DURGA MATA MANDIR [ 2020 (3) TMI 501 - PUNJAB HARYANA HIGH COURT] , M/S AJIT EDUCATIONAL AND PUBLIC WELFARE SOCIETY [ 2018 (10) TMI 1039 - PUNJAB AND HARYANA HIGH COURT] ,GEETA LALWANI FOUNDATION [ 2018 (7) TMI 2053 - BOMBAY HIGH COURT] AND SETCO FOUNDATION [ 2019 (2) TMI 532 - BOMBAY HIGH COURT] it is not obligatory for the assessee for maintain dissolution clause which will not be the issue for rejection of registration u/s 12A of the Act. Accordingly the registration U/s 12A could not be denied to the assessee-society for non maintain the dissolution clause. The aims and objects of the trust includes running of coaching centre, technical and professional institute which are not covered u/s 2(15) for charitable purpose - As in the factual matrix the activity of the assessee-society had never run coaching centre. Also, a CBSE School cannot run a coaching centre as per the guideline of Board. Also income of the expenditure account of assessee no such income was reflected from coaching centre. The number of years the assessments were done by the revenue authorities u/s 143(3) for assessee. But no specific point was pointed out related to maintain of coaching centre. So, the rejection of the registration on the basis of ancillary object i.e. running coaching centre is uncalled for. The accounts of assessee are not being maintained in systematic manner - The assessing authority did not raise any question during assessment U/s 143(3) of the Act related maintenance of books of accounts. The ld CIT(E) did not recognise any specific lacuna in the books of assessee. All three reasons are not proper indication for rejecting the application of registration u/s 12A. For registration u/s 12A the steerage of the Act is that the identity of assessee and the activity relating to the main object of the society. In following two points was not properly considered by the ld. CIT(E). The maintaining a coaching centre only was incorporated in the order of the CIT(E). But no proper verification was done from the books of account and from the activities of the assessee by revenue. Related to maintenance of proper accounts no specific lacuna was found out by revenue. CIT (E) has erred in rejecting the application for registration u/s 12AA of the Act filed by the applicant. Hence ld. CIT (E) is directed to grant registration u/s 12AA of the Act to the assessee/applicant - Appeal of assessee allowed. 2022 (5) TMI 1145 Deduction claimed u/s 35(1)(ii) - scope of withdrawal of recognition u/s 35(1)(ii) - donation made by the appellant to the School of Human Genetics Population Health (SHGPH) and consequent deduction being 175% of the amount of donation made - HELD THAT:- As perused the material available on record on the identical facts, in the case M/s. Maco Corporation (India) Pvt. Ltd. [ 2018 (3) TMI 811 - ITAT KOLKATA ] had held that withdrawal of recognition u/s 35(1)(ii) of the Act in the hands of payee organisation would not affect the right and interest of the assessee for claim of deduction u/s 35(1)(ii) of the Act. We find that there is no provision in section 35(1)(ii) of the Act to withdraw the recognition granted to the assessee therein. When there is no provision for withdrawal of recognition in the Act, the action of the revenue in withdrawing the recognition with retrospective effect from 1.4.2007 is unwarranted - See Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd [ 2018 (2) TMI 1220 - SUPREME COURT ] - Decided in favour of assessee. 2022 (5) TMI 1144 Reopening of assessment u/s 147 - change of opinion - disallowance of the assessee s claim for deduction u/s. 80IB(10) - HELD THAT:- As per the mandate of law, even where a concluded assessment is sought to be reopened by the A.O within a period of 4 years from the end of the relevant assessment year, it is must that the A.O has fresh material or information with him, that had led to the formation of belief on his part that the income of the assessee chargeable to tax has escaped assessment. As case of the assessee had been reopened by the AO on the basis of a mere change of opinion and not on the basis of any fresh tangible material coming to his notice after culmination of the original assessment, therefore, finding no infirmity in the view taken by the CIT(Appeals) who had rightly observed that the reopening of a concluded assessment of the assessee on the basis of mere change of opinion is not sustainable in the eyes of law, uphold his order to said extent. Disallowance of deduction u/s. 80IB(10) - declining of such claim of deduction qua the charges received by the assessee for provision of various facilities, i.e., pipelines, electricity and stilt parking facilities - We are of the considered view, that as observed by the CIT(Appeals), and rightly so, now when the provision of the aforesaid facilities forms part and parcel of the approval of Nagar Niyojan Avam Vikas Raipur vide Anugya , dated 23.01.2004, of the housing project in question and, the assessee in terms of the approval of his project was obligated to provide such services, therefore, the same would be eligible for deduction u/s. 80IB(10) - Decided in favour of assessee. 2022 (5) TMI 1143 TDS u/s 195 - Consideration paid by ESPN India to ESPN UK - whether payments made by ESPN India constitutes royalty falling u/s.9(1)(vi) ? - resale of advertisement space on websites owned - Taxability as per India-UK DTAA - treating the assessee as assessee in default for non-deduction of tax at source u/s.201(1) 201(1A) - whether ESPN India has obtained the right to use/ exploit the websites? - HELD THAT:- Re-seller agreement clearly states that the seller, ESPN UK, directly owns or has the rights to exploit numerous digital media websites and no such right has been transferred to ESPN India. Further Clause 4.2 of the Re-seller agreement, which confirms that ESPN UK controls the amount of advertising space available on the websites and the nature of advertisements permitted to be displayed. Hence, assessee does not in any way control the website / server, nor has been conferred with a right over any part of the website / server. We cannot accept the argument of Learned Department Representative, who at the hearing, pointed out the Assessee s submissions as encircled by the AO on page 10 of the order, stating that, ESPN UK or third party service provides do not provide specific access to / control over any particular server / website , which in fact supports the case of the assessee. Therefore, in our view neither is any equipment given to the Assessee nor is it under the control of the Assessee. This is only a re-seller agreement of advertising space. Objective of the Equalisation Levy provisions was to levy a tax on online advertisements as it was otherwise not chargeable under the Act read with the Tax Treaties - It was a business profit and in the absence of any permanent establishment was not taxable in India as held by Right Florists[ 2013 (4) TMI 338 - ITAT KOLKATA] - Since the Tax Treaties would override any non-favourable clause under the Act, to overcome this, EL provisions were introduced as a separate stand-alone enactment by the Finance Act 2016 and outside the Act. Consequently, the above object and purpose was achieved by the introduction of section 164 (i) of the Finance Act 2016 that defines a specified service to mean online advertisement, any provision for digital advertising space or any other facility or service for the purpose of online advertisement and includes any other service as may be notified by the Central Government in this behalf . We noted that the Finance Act, 2016 recognizes providing advertising space as a specified service subject to Equalisation levy. Consequently, to suggest that the sale of advertising space is royalty would even be contrary to the legislative intent, the objects and purpose of the EL provisions and result in absurdity and double taxation, as acknowledged by the Memorandum to the Finance Bill, 2016. We noted that the assessee has filed the details and Challans for the EL payment, which are annexed as a summary of the EL amount paid along with the date of payment and challan details Thus we are of the view that the consideration paid by ESPN India for purchase of advertisement space was not taxable during the period under consideration. The consideration paid by ESPN India is not for use of equipment (server) or for any process nor imparting of any information concerning technical, industrial, commercial, or scientific knowledge, experience or skill. Further, no right has been conferred on ESPN India over the server or website belonging to ESPN UK and ESPN India is merely a reseller of advertisement space it purchases on ESPN UK s website. Further, the reliance of the AO and CIT(A) on the unilateral retrospective amendments to section 9(1)(vi) of the Act to the definition of royalty cannot override the more beneficial definition under Article 13(3) of the UK-India Tax Treaty. Hence, we allow the issue on merits in these appeals of assessee. 2022 (5) TMI 1142 Unexplained investment - addition based on incriminating material found and seized during the course of search - presumption of correctness under Section 292C - whether the seized document herein satisfies the foregoing presumption or the same stands rebutted? - HELD THAT:- We note from the case file that all the corresponding entries have been made on a pad of the Maharashtra State Electricity Transmission Company Ltd. We wish to observe here that this company has nothing to do with any sale and purchase of a moveable or immoveable property concerning the assessee at all. The very factual position continues even in the entries forming part of seized documents wherein all what is given is total cost of Rs.725.00 lakhs including cheque of Rs.400 lakhs and cash component of Rs.325 lakhs; respectively. There is not even a single mention of any property or the date of any cheque payment made from the assessees . All these clinching facts lead us to the conclusion in assessee s favour and against the department that the statutory presumption of correctness under Section 229C itself stands rebutted since the learned Assessing Officer had made the impugned addition based on a dumb document which does not reveal any actual payment at all with dates as well as the assets details involving the taxpayer. We accordingly find no reason to interfere with the learned CIT(A) s detailed discussion deleting the impugned addition. The Revenue s instant substantive grounds fails therefore. Unexplained bank deposit - HELD THAT:- As we note from a perusal of the case file that this tribunal s coordinate bench decision in Revenue s identical appeal [ 2022 (3) TMI 1377 - ITAT PUNE] wherein restored the very issue back to the Assessing Officer to verify the sanctity and correctness of the Bank A/c belonging to the assessee and examine whether the funds deposits in the bank account of the HDFC Bank, whether they were from this account or not and re-adjudicate this issue in totality as per law. Deemed dividend under Section 2(22)(e) - addition only qua the peak amount - Whether addition should be restricted to the peak amount of the loans given during the year? - HELD THAT:- Deeming fiction of dividend under Section 2(22)(e) comes to play regarding each and every sum received by the concerned assessee as per the hon ble jurisdictional high court s decision in CIT vs. P.K. Badiani [ 1970 (2) TMI 3 - BOMBAY HIGH COURT] Coupled with this the CIT(A) has also taken note of decision in Tarulata Shyam [ 1977 (4) TMI 3 - SUPREME COURT] that even a repayment does not alter the status of deemed dividend under Section 2(22)(e) of the Act. We thus hold in this factual position that the learned lower authorities have rightly made the impugned addition of Section 2(22)(e) deemed dividend in assessee s hands. The foregoing twin decisions coming from the learned coordinate bench also do not rescue the assessee since the facts therein indicated both deemed dividends as well as routine trading transactions wherein it was held that the impugned addition ought to be restricted qua the former component only which is not the case before us. We accordingly reject the assessee s instant sole substantive ground 2022 (5) TMI 1141 Reopening of assessment u/s 147 - addition u/s 68 - HELD THAT:- We first reject arguments of AR that provision of section 68 could not have been applied in case where cash is deposited in the bank accounts. We find that assessee is maintaining books of accounts undoubtedly. Addition is made on account of cash deposited in three bank accounts which could not be explained to the satisfaction of the ld AO. We do not find any infirmity in application section 68 on such sums in view of the decision in case of Arunkumar J Muchalla V CIT [ [ 2017 (8) TMI 1137 - BOMBAY HIGH COURT] where in the decision of CIT v. Bhaichand H. Gandhi [ 1982 (2) TMI 28 - BOMBAY HIGH COURT] AO has disallowed the expenditure - In the order itself, the learned AO earlier agreed with the assessee that only 40% of such expenditure is disallowable. Order sheet has been reproduced by the AO of the assessment order. When the assessee agreed for 40% disallowance, the learned Assessing Officer made the volte face and disallowed almost 100% of such expenses. In support of that expenditure, assessee has produced the names of the person to whom the payments have been made and the copy of the bank account from which the payments are made. It is also substantiated by the ledger accounts where narration of such expenditure is provided. Only reason for disallowance is that the names of persons, which mentioned in the bank statements and their identity, could not be verified. Amount of gross income shown by assessee AO has disbelieved gross receipt - The gross receipts have been stated to be higher than the cash deposit of ₹30,63,900/- and ₹ 2 lacs. These two items are also separately added by the learned AO. Naturally, the gross receipts i.e. Income as well as the expenditure both have been added into the hands of the assessee. Even otherwise, the learned Assessing Officer should have verified independently whether the cash deposit is a sum received by the assessee as professional fees or not. Further, when the amount is deposited in bank account is emanating from books of accounts, further addition of cash deposit amounts to double addition. Ld AO did not carry out this examination. Advance received Assessing Officer could have asked the assessee to produce details by producing the nature of work carried out by the assessee and continuation of business of Wave Films. IT also needs to be examined when the assessee has offered this as income, if in this year it is advance. However, LD AO preferred to make Google search. Instead of making Google search, the learned Assessing Officer should have made independent inquiry of the above sum paid by Wave Films as advance to the assessee in cash to correct position of the above transactions. It is more pertinent when the assessee claimed that business of wave films continued. Merely, because some infirmity is noted in stamp paper, it could not have resulted into stating that whole transaction is bogus. The payment of advances even after the death of Gurdeep Singh Chadha by Wave Films clearly shows that business of Wave Films might have continued. For this, the assessee has also submitted the Permanent Account Number of the payee and confirmation. Ld AO could have enquired about the persons who gave confirmation and on what basis. If assessee fails to show that, in those circumstances, addition could have been possibly made. Therefore, on this facts and circumstances, we are not in a position to comment on the genuineness of the above transaction, unless the detailed inquiry is carried out by the learned Assessing Office. The LD AO may direct assessee to produce the relevant information/ persons who paid cash and treatment of this sum in the books of wave films to substantiate the veracity of the above agreement. We set aside the issue back to the file of the Assessing Officer with a direction to the assessee to substantiate the transaction of advance received and also to show that the amount of cash deposited in the bank account in cash are covered by gross receipts of the profession shown by the assessee. The assessee is also directed to show the nature of expenditure incurred with adequate evidences. Thereafter ld AO may decide issues afresh on merits after giving assessee proper opportunity of hearing. 2022 (5) TMI 1140 Addition u/s 69C - Addition under the head 'Site Expenses' - HELD THAT:- AO erred in disallowing the expenses by invoking u/s. 69C of the Act because, in this case, not only the expenses were recorded in the books of accounts but the assessee was also able to prove the source of expenditure claimed. The assessee has demonstrated that the source of expenses was the revenues earned during the year, which is evident from paper book. Hence, the reliance placed by the AO on the decisions of Bhagwati Developers P Ltd. [ 2003 (2) TMI 58 - CALCUTTA HIGH COURT ] L.M. Thapar [ 1984 (2) TMI 67 - CALCUTTA HIGH COURT ] is found to be misplaced in as much as in both these judgments the expenses found to have been incurred by the assessee were not recorded in the books of accounts and therefore its source remained unexplained. This is clearly not the factual position in the present case. Thus the disallowance of site expenses is hereby deleted. Ground No. 1 of the appeal stands allowed. Disallowance of office expenses - HELD THAT:- According to law, what has to be seen is whether the expenditure is genuine and the same has been incurred wholly for the purpose of the business. It is noted that the disallowance was made purely on surmises and conjectures. The said expenses were incurred for the purpose of procuring items such as hand soaps, bleaching powders, tea, snacks, coffee, stationary, coffee and tea for vending machines etc. which is necessary for units work sites also spreading to 3000 places. These items were purchased in the normal course of business and are found to be necessary for the smooth functioning of the business. Further, as already discussed while adjudicating Ground No. 1, Section 69C cannot be invoked n the facts of the present case. It is not a case that the expenses were not recorded in the books of accounts or that their source of payments were in doubt. The case laws cited by the AO/Ld. CIT(A,) as discussed while adjudicating Ground no. 1, is not applicable in the assessee's case. For the reasons as aforesaid, we do not countenance the action of the lower authorities in disallowing office expenses and accordingly direct the AO to delete the impugned addition. Ground No. 2 stands allowed. Disallowance of Transportation Expenditure - assessee is not able to substantiate the genuineness of these expenses and therefore disallowed the sum holding it to be unexplained expenditure u/s. 69C - HELD THAT:- As in this case due to the mistake of the accountant, as found earlier, Rs. 28,80,000/- has been shown as expenses along with transportation expenses booked by the assessee. It has been brought to our notice that the transport expenses is to the tune of Rs. 2,40,457/- and the balance sum of Rs. 28,80,000/- was on account of salary expenditure, which we have already taken note of while adjudicating the site expenses wherein we noted that site expenses included the salary disbursement of Rs. 28,80,000/- was part of the said expenses. When this fact has been accepted by us, so the disallowance of Rs. 28,80,000/- by the AO and the action of the Ld. CIT(A) confirming 90% of the said disallowance, is in itself erroneous and is accordingly directed to be deleted. Ground No. 3 is accordingly allowed. Disallowance of sum debited under the head 'Misc. Expenses written off' - HELD THAT:- Merely because expenses incurred were incurred in cash and were supported by self-made vouchers, the same cannot be disbelieved for making disallowance in the hands of the assessee. It is noted that the CIT(A) has not recorded any specific finding to allege that the expenses incurred by the assessee were either in-genuine or not incurred for the purposes of business. The only anomaly pointed out by CIT(A) has been found to be duly explained in the preceding paragraph. The disallowance impugned before us is therefore directed to be deleted. Ground No. 4 stands allowed. Disallowance of subscription and donation - AO opined that since donation and subscription paid to local puja committee and local clubs are not eligible for deduction u/s. 80G such donation is not wholly and exclusively for the purpose of business and hence the sum was disallowed - HELD THAT:- It is noted that the subscription has been paid to different committees and associations towards Jagadhatri Puja/Kali Puja/Moharram in the local vicinity where the assessee operates its business. According to Ld. AR these subscriptions are paid to the local clubs/committees etc. for smooth functioning of the business - As submitted that these expenses have not been incurred for the personal benefit of the directors/employees but are exclusively incurred for the purpose of business and is therefore an allowable expense u/s. 37 of the Act. Upon perusing the details of the donation and subscription, we find merit in the claim of the assessee. Disallowance of Balance written off - HELD THAT:- Since the balances were written off in the normal course of business, the assessee claimed that it is allowable u/s. 37 - However the Ld. CIT(A) did not appreciate the same and sustained the order of the AO. In this context, it is noted that since these excess statutory payments were no longer realizable, the assessee has written off these amounts standing in the books. According to assessee, since these balances were written off in the normal course of business, the same is allowable u/s. 37 - However, it is not clearly discernible as to whether the assessee had actually written off this claim in the books of the assessee so, the same is restored back to AO for verification. Excess VAT payment and other two items the AO may verify whether these amounts had been actually written off in the books and netted off in the respective asset heads. He may also verify whether these write off are in the course of business and if found so, it may be allowed as deduction while computing the business income. Disallowance on account of interest paid on delayed payment of tax - whether the interest paid on non-deduction of TDS/late payment of TDS can be claimed as expenditure for determining the taxable income? - HELD THAT:- Thus interest paid on delayed payment of TDS qualifies as deductible expenditure u/s. 37. TDS liability - In the present case, the assessee had paid interest under Section 201(1A) on delayed payment of TDS. The said TDS represented the taxes paid for an on behalf of the payees to the credit of the Government. Section 199 of the Act in clear terms provides that, any deduction of tax and payment thereof to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made. In other words, TDS is treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made. It is therefore evident that 'TDS' qua the assessee, is not income-tax on its profits or gains of any business or profession assessable u/s. 28 of the Act. Instead it is the tax on the profits and gains of the business of the recipient. In view of the above, as the tax deducted at source (TDS) is not in the nature of the income tax which is required to be paid on profits gains chargeable to tax u/s. 28 of the Act and thus not disallowable u/s. 40(a)(ii) of the Act, the consequent the interest paid u/s. 201(1A) of the Act upon late payment of TDS also cannot be disallowed u/s. 40(a)(ii) of the Act. For the reasons as aforesaid, the disallowance of interest paid on belated payment of TDS is hereby deleted. This ground stands allowed. Disallowance in respect of Claim of Gratuity and Leave Encashment Payment - HELD THAT:- The assessee had claimed expenditure to the tune of Rs. 71,18,021/- in relation to gratuity and leave encashment which had been disallowed in the assessment order dated 17.02.2014 for AY 2011-12, found placed - This piece of contemporaneous evidence was available both before AO CIT(A). It was this very sum, which was written back in the P L A/c of the relevant year, as these expenses were no longer payable. Since the expense was never allowed as deduction in the year of debit/accrual i.e. AY 2011-12, the corresponding write back also cannot be taxed, having regard to the extant provisions of Section 41(1) of the Act. In view of the foregoing and the fact that the AO in the remand report has also accepted the assessee's contention by observing the explanation of the assessee is considered and appears to be acceptable the action of Ld. CIT(A) sending the issue back to the AO for further verification is held to be unwarranted. Therefore, in the light of aforesaid facts and circumstances, the directions given by Ld. CIT(A) is set aside and we direct deletion of the impugned disallowance. Customs 2022 (5) TMI 1169 Revocation of customs broker license - Rule 16(1) of CBLR 2018 - HELD THAT:- In the present case continuance of suspension of license without examining the necessity of the same impinges on the fundamental right to work of the applicant. We are not going into the merits of the case and the nature of offence committed as the same needs to be examined when the appeal is heard and not at this stage where only the application of early hearing is being examined. The appeal of the applicant may be listed in the next available Division Bench in Chandigarh. The application is allowed Corporate Laws 2022 (5) TMI 1168 Sanction of scheme of amalgamation - Sections 230-232 of the Companies Act, 2013 - HELD THAT:- On perusal of the Scheme and the proceedings, it appears that the requirements of the provisions of section 230 and 232 are satisfied by the petitioner company. The proposed Scheme of Amalgamation is bona fide and in the interest of the shareholders and creditors. The scheme is sanctioned - application allowed. Insolvency & Bankruptcy 2022 (5) TMI 1139 Approval of Resolution plan - Abatement, extinguishment, discharge and settlement of claims raised by original respondents - Section 31(1) of the Insolvency Bankruptcy Code, 2016 read with the Resolution Plan - HELD THAT:- Undisputedly the applicant herein i.e. ArcelorMittal Nippon Steel India Ltd., formerly known as Essar Steel India Ltd., (ESIL) submitted a Resolution Plan which came to be approved by the CoC on 25.10.2018 and, thereafter, by the Hon ble Supreme Court in Committee of Creditors of Essar Steel India Ltd., vs. Satish Kumar Gupta and others, [ 2019 (11) TMI 731 - SUPREME COURT] Upon approval of the said Resolution Plan all the claims RP by the creditors were settled or discharged by appropriate assignment of value. The Resolution Plan provides that all the claims of ESIL whether contingent or crystallized, known or unknown, filed or not filed shall stand irrevocably and unconditionally abated, discharged, settled and extinguished in perpetuity upon approval of the Resolution Plan. Further the Resolution Plan came to be finally approved by the Hon ble Supreme Court in the aforesaid judgment, wherein in view of the aforesaid judgment and Section 31 of the Code all the past dues, claims and liabilities against ESIL stands extinguished and hence no outstanding liability of ESIL/ AMNS now remains. In view thereof, the liability raised by the impugned notices which are subject matter of present writ-application stands extinguished so far as ESIL is concerned. The proceedings under the Insolvency and Bankruptcy Code 2016 has acquired finality with the aforesaid judgment passed by the Hon ble Supreme Court in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS [ 2019 (11) TMI 731 - SUPREME COURT] which clearly shows discussion in detail of the entire scheme of the provisions of the Code and vide the aforesaid quoted paragraphs it clearly shows that undecided claim of the operational creditors i.e. stand extinguished by the said scheme of rehabilitation/revival approved by the committee of the creditors which came to be approved by the Hon ble Supreme Court. Application allowed. PMLA 2022 (5) TMI 1167 Money Laundering - renewal of passport - Section 6 of the Delhi Special Police Establishment Act, 1946 - HELD THAT:- There are no doubt that there is absolutely nothing to interfere with the order under challenge. It is true that a complaint has already been laid against the petitioner and others. It is pending as S.C. No. 533/2018 before the Special Court. Meanwhile, Enforcement Directorate has undertaken a further investigation, on the basis of the subsequent revelations that large sum of money was laundered by the petitioner. The estimation of the first respondent is that he is guilty of laundering Rs. 910 crores including sum of Rs. 258.52 crores for which three provisional attachment orders were issued. Now the further investigation by the Enforcement Directorate is in progress. As part of the further investigation, summons dated 23.02.2021, 03.03.2021, 24.03.2021, 15.06.2021 and 29.07.2021 were issued. The petitioner admits the receipt of all such notices. But according to him, he has promptly responded the same; there is no wilful default on his part in absenting from appearing before the Investigating Officer. The copy of summonses produced by the petitioner indicate that summonses issued under Section 50 of the Act asked him to appear before the Deputy Director in person on different days noted in the summons. It is a fact that he did not turn up and had sent only his representative. When the Deputy Director has insisted his personal presence as part of investigation, there is no meaning in saying that he had sent his authorised representative. When personal appearance is insisted, petitioner cannot be heard to say that the Enforcement Directorate should rest content with the documents and statements of the employee deployed by him - Such a conduct on the part of the petitioner cannot be appreciated. In this connection, this Court can see a calculated attempt on the part of the petitioner to defeat the summons and prolong the process of investigation. His adamant stand that he will not appear before the Investigating Officer is not understandable. The presumption under Section 23 of the Act works against the petitioner. Further, the petitioner has approached this Court seeking exercise of its extra jurisdiction under Section 482 of the Code of Criminal Procedure. Such a person is expected to come with clean hands. The petitioner who is adamant and insist that he will not appear before the Investigating Officer has adopted a short cut method to get the passport renewed without co-operating with the investigation. The claim that he has co-operated with investigation has no basis at all. The learned Central Government Counsel has invited special attention to Explanation No. (ii) to Section 44(d) of the Act also. Service Tax 2022 (5) TMI 1166 Non-discharge of tax liability - Petitioner neither got service tax registration nor paid any service tax on the taxable consideration received - demand alongwith interest and penalty - HELD THAT:- It transpires that adjudication with reference to evidence on record is required to be made as to whether the conduct of the Petitioner by not discharging its Service Tax liability is a pointer for invocation of jurisdiction under Section 73 of the Finance Act. It is also necessary for the appropriate authority on the basis of pleadings and material particulars available on record to decide whether there was justification in subjecting the assessee-petitioner to adjudication in view of existence of the circumstances spelt out in proviso to Section 73 of Chapter V of the Finance Act, 1994 so that extended period of limitation is attracted. In the considered view of this Court, these questions do require factual adjudication. Needless to note that plea of limitation is mixed question of fact and law. The appellate authority is vested with power to deal with both question of law as also fact. The Petitioner after arguing for some time sought for permission to withdraw the writ petition to avail alternative remedy of appeal as is available under Chapter-V of the Finance Act, 1994. This Court, therefore, declines to express its views on merit of the case. However, the Petitioner is at liberty to prefer appeal - Petition disposed off. 2022 (5) TMI 1165 Levy of Service Tax - Cargo Handling Services - Storage and Warehousing services - benefit of cum Duty price - invocation of extended period of limitation - Circular No.18/2009-Customs dated 08 June, 2009 - HELD THAT:- The facts of the case are that the appellant s are container freight station. The appellant s are providing services on the basis of a tariff card. There are standard packages which involved the complete service of container freight station (including storage for a specified limited time) at a particular rate. All the appellant s are paying service tax on such services in case of import of goods. All CFS are not paying service tax on such services in respect of export of goods being net covered in service tax net - All appellant s are charging a Storage and Warehousing fees only in case the cargo stays in CFS beyond the period included in such package rates given in tariff cards. In those circumstances for charges for storages beyond the Warehousing period included in package rate, all appellant s are paying Service Tax under category of Storage Warehousing Services . All CFS are paying Service Tax on reverse charge basis for transportation of cargo under taken by their contractors from CFS to port and vice verrce. For the period of Storage included within the consolidated package for handling import or export cargo no separate Service Tax need to be paid under the category of Storage and warehousing charges. However, for the period exceeding such period i.e. (the period included in the packages) if any storage and warehouse charges are collected the same are liable to service tax both in respect of import and export cargo - there are no merit in the argument of Revenue that the activity of Cargo Handling in the Container Freight Station is incidental to the Storage and Warehousing activity. From the discussion it is apparent that storage in the container freight station is only incidental to the cargo handling activity. The main purpose of the Container freight Stations is to handle cargo for the purpose of import or exports. The main purpose of the container Freight Stations is not Storage and Warehousing. In these circumstances, we do not find any merit in the order of Lower Authorities. In the impugned orders that only the Cargo Handling Services provided in respect of transportation of goods would be classifiable as Cargo Handling Services is misplaced and liable to be rejected - Appeal allowed. Central Excise 2022 (5) TMI 1164 Clandestine removal - prints out taken from the Hard Disk recovered in the premises of the alleged secret office (claimed to be a third party premises or godown) - admissible evidence or not - reliability on statements - third party evidences - quantification of duty evaded - levy of penalty - violation of procedure laid down under Section 100(3) Cr PC. - HELD THAT:- There were some procedural irregularities in the conduct of the Panchnama proceedings. The investigating agency was required to use panchas whose credentials cannot be questioned. Repeated use of the same Panch witnesses all around different places by the same agency, give scope for avoidable allegations while casting doubts on the proceedings initiated by using them. The Panchnama drawn at the premises of Cadbury / bournvita also suffers from the infirmities that none of the responsible persons of the said owners of the godown were present during the proceedings and it is not clear as to on whom search warrant was served - it can be held that the proceedings are in contravention of the provisions of CRPC, we are in agreement with the Authorised Representative that in matters involving evasion of taxes, it would be sufficient if the documents recovered during the search do otherwise constitute reliable evidence. However, under the circumstances, the evidence put forth requires to be weighed in the facts and circumstances of the case and in juxtaposition with the corroborative evidence. Whether or not the recovery of printouts from the hard disc found in alleged secret office of the appellants from the possession of Shri Vicky Kumar, an employee of the appellants, the appellants have vehemently submitted that the hard disc in question was not established to belong to them or established to be used with a computer which was in use by the staff of the appellants in course of regular business; the printouts taken from the said hard disc and recovery of documents thereof is in clear violation of the provisions of Section 36B of Central Excise Act, 1944. The appellants claim that the impugned order has failed to appreciate and ensure due compliance to the procedures and the requirements stipulated under the said Section; during the course of Panchnama proceedings in the so-called secret office, none of the representatives of the owners of the premises i.e., Cadbury / Bournvita were present and they were not even questioned as to how the premises were permitted to be used or permitted to be used by the appellants; moreover, it was not identified as to which computer the said hard disc belonged to and as to what kind of data is being stored in the hard disc in the day-to-day conduct of business of the appellant. The argument of the learned Commissioner is not correct. It is not for the appellant-noticees to disprove the clandestine removal and evasion. It is for the investigating agency to gather evidence and it is for the adjudicating authority to appreciate the evidence and confirm the demand of tax. It is found that as submitted by the appellants, charge of suppression of production and clandestine removal is a serious charge which is required to be established by production of sufficient tangible and positive corroborative evidence of clandestine manufacture and clearance and not merely on the basis of inferences and assumptions - In the instant case of the appellant the entire demand of duty has been raised on the basis of legally inadmissible computer printouts retrieved from external hard disc, private unauthenticated diaries, loose sheets or third-party private documents recovered through illegal Panchnama proceedings. Not even single evidence has been brought on record to show clandestine removal, conclusively establishing at least by way of sample transaction. We also find that no commensurate discrepancy in the finished stocks and raw material was found. The discrepancies found, adopting a method of averaging, were nominal and explainable. The allegation is about clandestine removal of a huge quantity of 26799.732 MT valued at Rs 97.13 Cr. To prove evasion of such magnitude, the department should have established the purchase of raw material, consumption of electricity, deployment of labour, arrangement of transportation, receipt at the customers end and financial transactions. Receipt of money in respect of not even a single transaction in the hands of the appellants has been proved with evidence - the investigation and consequentially the allegation of clandestine removal, suffers from infirmities, the demand needs to be seen on the basis of corroborated evidence alone. It is now settled principle that cases of this nature need not be proved with mathematical precision. At the same time, a single piece of evidence cannot be accepted to encompass the whole gamut of transactions. A word of caution must be added here that while the principle of preponderance probability demands us to believe that under the given facts and circumstances, the alleged tax evasion must have occurred. However, the principle ends here. Issues like quantification of duty evaded, requires concrete reliable dependable data. Reliance on principle of preponderance of probability, no way confers a License to demand duty on the basis of assumptions/presumptions/ vague imputations. While accepting the fact that there are reasons to believe that there was evasion of duty on the part of the appellants, it is found that the quantification of such duty evaded should be sustainable on the evidence available and needs to be arrived in a logical, rational and legally appropriate manner. In the absence of any corroborative evidence, it would be difficult to uphold the charges levelled on assumption and presumption. Hon ble Supreme Court held in OUDH SUGAR MILLS LTD. VERSUS UNION OF INDIA [ 1962 (3) TMI 75 - SUPREME COURT] findings based on such assumption and presumption without any tangible evidence, is vitiated by error of law. The impugned order does not survive the scrutiny of law and therefore, needs to be set aside - Appeal allowed.
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