TMI Tax Updates - e-Newsletter
May 26, 2023

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Securities / SEBI Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax

Articles

• Registering as an Indian Subsidiary Company : Things you should know
• Four months – 120 or 121 days – litigation initiated by appellate authority by adopting meaning of four months as 120 days causing tax payer to approach High Court.
• Rent on Accommodation buildings located outside the boundaries of religious places are chargeable to GST

News

• Webinar on ‘New e-Invoice FO portal’

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• Increased limit for tax exemption on leave encashment for non-government salaried employees notified

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• IICA conducts 3-day training programme on ‘Leadership Skills for Government Officers’ of Directorate General of Civil Aviation (DGCA)

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• DRI busts clandestine makeshift laboratory in Nagar Kurnool District, Telangana; seizes 31.42 kg Alprazolam worth Rs. 3.14 crore, one held

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Notifications

DGFT

• 07/2023 - dated 24-5-2023 - FTP
  Amendment in Export Policy of broken rice under HS Code 1006 40 00

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GST

• 13/2023 - dated 24-5-2023 - CGST
  Seeks to extend the due date for furnishing FORM GSTR-7 for April, 2023 for registered persons whose principal place of business is in the State of Manipur.

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• 12/2023 - dated 24-5-2023 - CGST
  Extend the due date for furnishing FORM GSTR-3B for April, 2023 for registered persons whose principal place of business is in the State of Manipur.

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• 11/2023 - dated 24-5-2023 - CGST
  Seeks to extend the due date for furnishing FORM GSTR-1 for April, 2023 for registered persons whose principal place of business is in the State of Manipur.

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GST - States

• 03/2023-State Tax (Rate) - dated 23-5-2023 - Delhi SGST
  Amendment in Notification No. 1/2017- State Tax (Rate), dated the 30th June, 2017

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• S.O. 38/P.A.5/2017/S.148/Amd./2023 - dated 8-5-2023 - Punjab SGST
  Amendment in Notification No. S.O. 66/P.A.5/2017/ S.148/2019, dated the 31st May, 2019

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• G.O. Ms. No. 53 - dated 12-5-2023 - Tamil Nadu SGST
  Amendment in Notification No. II(2)/CTR/232(h-5)/2020,dated 13th April, 2020

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• G.O. Ms. No. 49 - dated 11-5-2023 - Tamil Nadu SGST
  Amendment in Notification No. II(2)/CTR/532(d-14)/2017 dated 29th June, 2017

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Income Tax

• 31/2023 - dated 24-5-2023 - IT
  Exemption from income tax - Leave encashment by the employees other than an employee of the Government - Specifies Rs. 25,00,000 as maximum amount received as leave encashment for the purpose of section 10(10AA)

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• 30/2023 - dated 24-5-2023 - IT
  Angle Tax - Start-ups Recognized by DPIIT - Provision of section 56(2)(viib) of IT Act 1961, shall not apply to consideration received by a company for issue of shares that exceeds the face value of such shares in the case of Startup, subject to conditions - Supersession Notification No. 13/2019 dated 5th March 2019

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• 29/2023 - dated 24-5-2023 - IT
  Angle Tax - Investment in start-ups from 21 countries - Provision U/s 56(2)(viib) of IT Act 1961 shall not apply in respect of Exemption from any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares - Central Government notifies class or classes of persons

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Circulars / Instructions / Orders

DGFT

• Trade Notice No. 05/2023-24 - dated 25-5-2023
  Amendment under Interest Equalisation Scheme

Customs

• 12/2023 - dated 24-5-2023
  Foreign Trade Policy 2023

Highlights / Catch Notes

GST

• Levy of penalty u/s 129 (3) of CGST Act - the notice issued u/s 129(1)(a) was nothing more than an empty formality as no time/opportunity has been allowed pursuant to the notice, and immediately, on the same date, penalty has been recorded under Section 129(3). The determination of penalty under Section 129(3) is, therefore, in contravention of the statutory requirement under Section 129 of the Act. The requisite compliance with principles of natural justice, inherent in Section 129(4) has thus been violated. - HC
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• Seeking cancellation of anticipatory bail granted to respondent/accused - It appears that there has not been violation of this condition also. Although nothing bars the department to carry out further investigation in this regard and to justify that actually no refund of Rs. 18 crores has been made by the respondent/accused but on perusal of the record produced by the respondent/accused, which has not been disputed by the department and also in view of the averments made by the parties, this court reaches to this conclusion that there is no violation of condition no. 6 also by the respondent/accused. - DSC
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Income Tax

• Obligation to file return of income - Assessee being a member of a scheduled tribe - All that was required of her upon receiving the several notices was to demonstrate that such income, in its entirety, was exempted u/s 10(26) - Yet, notice after notice went unheeded till the petitioner furnished the details of her bank accounts, claimed that she had invested and reinvested in mutual funds and glibly submitted that she maintained no accounts despite maintaining that she was an authorised distributor of LPG gas cylinder and an exporter of coal and limestone and the like - No relief - HC
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• Addition u/s 41(1) - addition towards waiver of liability / expenditure claimed earlier - One of the essential requirements of Section 41(1) of the Act is that there should be an allowance or deduction made in the assessment for any year in respect of loss or expenditure or trading liability. The AO has recorded a finding in para 3 of its order that the assessee has not filed the returns for the claim for the earlier years and thus no claim has been made by filing returns of income. - No additions - HC
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• Hearing of the appeal out of turn - grievance of very high-pitched scrutiny assessment - petitioner did not comply with notice u/s 142(1) - In writ jurisdiction, we are not inclined to delve deeper in the narrative and the counter narrative. The assessee is only denied out of turn hearing. We do not find any irrationality in the reasons recorded by the High-Pitched Committee. - HC
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• LTCG - Benefit of exemption u/s 54F - Purchase of second residential house - assessee already owns one residential house in USA - Contention of the Ld. AR that the property at USA is a Farm House cannot be accepted. Since the assessee owned one more residential house at the time of transfer of original asset, the assessee is not entitled to claim the benefit of deduction u/s. 54F in respect of long term capital gains - AT
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• Renovation expenditure as capital expenditure - payment towards purchase of furniture and fixture for new office have been incurred for purchase of furniture and fixture and other capital assets and hence are in the nature of capital expenses. Accordingly, the same cannot, in our view, be allowed as revenue expenditure in the hands of the assessee. However, the AO is directed to allow depreciation on such fixed asset in accordance with law after carrying out the necessary verification. - AT
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• Income deemed to accrue or arise in India - PE in India - employees of the assessee were present in India for rendering services for a period aggregating to only 13 days - Since the assessee neither has a PE in India nor the income is found to be in the nature of ‘Fee for Technical Services’ under the provisions of the DTAA, therefore, the said income cannot be brought to tax in India, even under the provisions of the Act in view of the provision section 90(2) of the Act. - AT
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• Addition u/s 68 - AO observed that unexplained money of the assessee brought into its business in the guise of share capital/share premium - For the cogent reasons recorded by the AO, he made the impugned addition u/s 68 which has been upheld by the Ld. CIT(A). - Additions confirmed - AT
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Customs

• Violation of import condition - goods (Raw Petroleum Coke) having sulphur content in excess of 7% - the Tribunal opined that no harm will be caused by provisionally releasing the goods - Such a finding, cannot be accepted as the question would be as to whether when admittedly the sulphur content is in excess of 7% will it conform to ISI 7049 as mentioned in the licence and if it does not conform to the said standard is there a violation of the conditions of import. Furthermore, the goods being prohibited item there is a mandatory requirement to comply with the policy condition - Matter restored back to tribunal - HC
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• Revocation of CB license reversed - The department has not been able to demonstrate possession of knowledge of “code words” or that of the alleged misdeclaration of value on part of the appellant. There is nothing to establish that the CHA failed in suitably advising his clients or to report any non-compliance (of which obviously he ought to have knowledge) to the department’s notice or that the appellant failed in discharge of his duties with efficiency and alacrity. - AT
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Corporate Law

• Seeking restoration of striken off name of company - company was non-operational - neither any GST was paid nor revenue from operation was collected. These facts are enough to draw an inference that the company was non-operational nor doing any business. Besides this there is admission of the appellant before NCLT that in the management of the company there was deadlock due to litigation and disputes amongst the directors. - NCLT has committed no error in rejecting the appeal filed by the company under Section 252 of the Act for its restoration. - AT
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IBC

• Initiation of CIRP - NCLT admitted the application filed u/s 7 - status / locus of Debenture Trustee - assignment of debt - After looking into the different clauses of the Debenture Trust Document and Inter-Creditor Agreement, it is clear that the Financial Creditor was fully entitled to issue Acceleration Notice issued on 26.07.2022. The Debenture Trustee having already issued Notice of Demand on 13.07.2022, the argument of the Appellant that action has to be taken by Debenture Trustee loses its significance - AT
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• Initiation of CIRP - NCLT rejected the application - Scope of the agreement between parties for use of office space - Unilateral Termination of agreement before the specified date - non-registered, non-stamped document - existence of debt and dispute or not - The Appellant has proved that debt claimed by the Appellant in Section 9 Application was operational debt. Further the agreement dated 17th August, 2018 was not compulsorily registrable and agreement having not been executed on Rs. 100 Stamp Paper was inconsequential, the agreement having been acted upon and the Corporate Debtor having entered into possession of the premises in pursuance of the Agreement. - NCLT directed to admit the application - AT
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Service Tax

• Maintainability of writ petition - Alternative remedy of appeal - Erroneous order of the First Appellate Authority - Validity of SCN - Recovery of service tax - the impugned order-in-appeal may be erroneous, but it cannot be said that the order was wholly without jurisdiction - WP dismissed - petitioners to avail the alternative and efficacious remedy before CESTAT / Tribunal - HC
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• Rejection of petitioner’s application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - the legislative intent to enact the SVLDR Scheme was to include all taxpayers for offloading the baggage of disputes. All taxpayers, except those which were specifically excluded, were entitled to avail the benefit of the said Scheme. The SVLDR Scheme also covered cases where no disputes were pending and enabled the taxpayers to voluntarily pay taxes and avail amnesty under the SVLDR Scheme. - HC
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• Cross utilization of CENVAT Credit - input services - With effect from 2004 when Cenvat Credit Rules, 2004 were issued, it was stated clearly that cross utilization of Cenvat credit on inputs, input services is being allowed for payment of central excise duty and service tax. That being so, there are no merits in the submissions made by the Revenue that utilization of Cenvat credit for payment of output service tax liability of the appellant can be faulted with. - AT
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VAT

• Classification of goods sold - photo identity cards - The principal contention urged by the Revenue that photo identity cards do not fall under the Entry 71 of Schedule III to the KVAT Act, is untenable because, the KVAT Authority is bound by the classification accepted by the Central Excise Authority - the photo identity cards fall under Entry 71 of Schedule III to the KVAT Act under the category of printed materials other than books meant for reading, and accordingly, taxable at 5%. - HC
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• Validity of SCN demanding VAT - charges collected for supplying and installation of goods in respect of internet and cable services - The KAT has rightly held that the notices sent by AO has merely made a bald allegation that the assessee had supplied goods without referring to the particular goods or the sale transaction. Thus, the notice proposing the demand by itself was vague and contained no legal basis for proposing the demand. - HC
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Case Laws:

• GST

• 2023 (5) TMI 1019
  Cancellation of GST registration of petitioner - reason for proposing the aforesaid adverse action was stated to be: Others - non-compliance with Rule 25 of the Central Goods and Services Tax Rules, 2017 - violation of principles of natural justice - HELD THAT:- The show cause notice is inadequate and fails to meet the requisite standards of a show-cause notice. The impugned show cause notice does not disclose any discernible reason for proposing adverse action against the petitioner. The purpose of a show-cause notice is to apprise the noticee regarding the reason for the proposed action to enable him to respond to the same. This in turn enables the concerned authority to make an informed decision. No adverse order could be passed against the petitioner without informing the petitioner of reasons for the same and affording him an opportunity to respond to the same. Thus, the impugned order dated 14.02.2023 is void as having been passed in violation of the principles of natural justice. Neither the show cause notice dated 25.01.2023, nor the impugned order can be sustained. Since it is now clear that the respondents proposed to cancel the petitioner s registration on the assumption that he was not-existent at his principal place of business, this Court considers it apposite to set aside the impugned order and remand the matter to the concerned officer to consider afresh after affording the petitioner a full opportunity to be heard - Petition disposed off.

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• 2023 (5) TMI 1018
  Levy of penalty u/s 129 (3) of CGST Act - case of petitioner is that due to breakdown of the vehicle, the same could not move through the State of Bihar within the currency of its validity - notice under Section 129(1)(a) of the Act and the order determining penalty under Section 129(3) of the Act are issued simultaneously on the same date - parallel proceedings - HELD THAT:- This Court has gone through the notice under Section 129(1)(a) as well as the order imposing penalty on the same date i.e. 28.03.2022, contained in Annexure-6, both these orders have been issued by the proper officer simultaneously. It is ex facie evident that the notice and order have been recorded simultaneously by the same authority. The order imposing penalty does not record the fact of the petitioner s appearance or hearing prior to passing of the order. This Court would find that the notice issued under Section 129(1)(a) was nothing more than an empty formality as no time/opportunity has been allowed pursuant to the notice, and immediately, on the same date, penalty has been recorded under Section 129(3). The determination of penalty under Section 129(3) is, therefore, in contravention of the statutory requirement under Section 129 of the Act. The requisite compliance with principles of natural justice, inherent in Section 129(4) has thus been violated. The order imposing penalty is unsustainable and is hereby quashed. The matter is remanded to the Joint Commissioner of State Tax, Magadh Division, Gaya - Petition allowed.

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• 2023 (5) TMI 1017
  Cancellation of GST registration of petitioner - Section 29 of the West Bengal Goods and Services Tax Act, 2017 read with Rule 22(3) of the West Bengal Goods and Services Tax Rules, 2017 - HELD THAT:- An appeal under sub-section (1) of Section 107 of the said Act of 2017 is required to be filed within three months from the date on which the decision or order passed under the Act is communicated to the aggrieved person, such time can be extended under Sub-section (4) thereof, subject to the condition that the aggrieved person showing sufficient cause - The Appellate Authority since has the power to extend the time to file an appeal, the petitioners, for the ends of justice, are entitled to get an opportunity to pray for such extension. The order of the Appellate Authority dated August 30, 2022 for the aforesaid reason, is set aside - Application allowed.

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• 2023 (5) TMI 1016
  Seeking cancellation of anticipatory bail granted to respondent/accused - Non-compliance with the directions mentioned in the bail order. Deposit of passport with investigating officer - HELD THAT:- On being enquired from the IO about the violation of this condition that if he is having any information with respect to the renewal of old Passport or issuance of any new Passport in the name of the respondent/accused or there being any instances when accused has travelled abroad by using said Passports. The reply to the same has come in negative from the IO. IO has submitted that he has not abled to lay his hand on any such information and he is also not having any details about any such Passport being used by the accused - it cannot be said that there has been any willful concealment from the side of the accused. It is needless to say that no one stops the IO to trace out further evidence in this regard. It is pertinent to mention here that there are no allegations that accused has violated this condition to show any use of such passport. Giving prior intimation to the IO on his mobile phone before leaving the NCR for any purpose - HELD THAT:- The violation of this condition has not been disputed by Ld. Defence counsel. It is submitted by Ld. Defence counsel that on one occasion, due to medical urgency in the family of the accused, he left to Raxaul but at the same time, it has also not been disputed by the IO that on several occasions, in compliance to the notice of the IO, respondent/accused has joined the investigation. On the violation of this condition for once only, warning at this stage would be sufficient to the respondent/accused as the present case has not been the case of repeated violation of any such condition. Engagement in any similar offence or temper with any evidences of influence any witness in the present case - HELD THAT:- On being enquired from the IO about the destruction of the mobile phone and information contained therein, it is submitted that this instance of destruction of evidence is prior to passing the bail order dated 02.02.2023. Nothing of this sort has surfaced or has been alleged against the respondent/accused after passing the impugned bail order - it is clear that no such condition has been violated from the side of the respondent/accused after the grant of anticipatory bail on 02.02.2023. Co-operation in the investigation and appear before the IO as and when summoned and also appear before the Court when called upon to face inquiry - HELD THAT:- On being enquired from the IO about the accused joining the investigation on the above mentioned dates, the IO has admitted that accused has joined the investigation. So when the accused has joined the investigation on several dates and also got recorded his statement, then violation of this condition of non-joining the investigation does not arise and violation of the same has been alleged without any basis. Refund to the Department within 15 days from today - HELD THAT:- It appears that there has not been violation of this condition also. Although nothing bars the department to carry out further investigation in this regard and to justify that actually no refund of Rs. 18 crores has been made by the respondent/accused but on perusal of the record produced by the respondent/accused, which has not been disputed by the department and also in view of the averments made by the parties, this court reaches to this conclusion that there is no violation of condition no. 6 also by the respondent/accused. The applicant department has failed to show any cogent and reasonable grounds for cancellation of bail - the present application stands dismissed being not maintainable.

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• Income Tax

• 2023 (5) TMI 1015
  Assessment of trust - Deduction u/s 11 - ITAT held that receipt of fee in the nature of capitation fee by the Appellant Trust in excess of the permissible fee would rendered the Appellant Trust ineligible for deduction under Section 11 - whether whole of the income of the Appellant Trust was liable to be taxed at the maximum marginal rate contrary to Section 164(2)? - HELD THAT:- We are not inclined to interfere with the impugned judgment and hence, the special leave petition is dismissed. At the request of the learned counsel for the petitioner, we grant time to the petitioner for payment of arrears by way of eight equal monthly installments, beginning from 01.05.2023 till 01.12.2023.

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• 2023 (5) TMI 1014
  TP Adjustment - HELD THAT:- By passing the impugned judgment and order, the High Court has relied upon its earlier decision in the case of Principal Commissioner of Income Tax and Another vs. M/s Softbrands India Pvt. Ltd. [ 2018 (6) TMI 1327 - KARNATAKA HIGH COURT] As required to be noted that the decision of the Karnataka High Court in the case of Softbrands India Pvt. Ltd., (supra) fell for consideration before this Court in the recent decision of this Court in the case of SAP Labs India Private Limited [ 2023 (4) TMI 859 - SUPREME COURT] - Therefore, the matter is now required to be remitted back to the High Court to decide the Appeal afresh in accordance with law and on its own merits and in light of the observations made by this Court in the case of Sap Labs India Private Limited (supra) . The impugned judgment and order passed by the High Court insofar as it relates to transfer pricing is hereby quashed and set aside. The matter is remanded back to the High Court to consider the issues/questions with respect to transfer pricing afresh in accordance with law and in light of the observations made by this Court in Sap Labs India Private Limited (supra)

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• 2023 (5) TMI 1013
  Revision u/s 263 - as per HC [ 2019 (10) TMI 927 - BOMBAY HIGH COURT] basis to invoke section 263 factually did not exist as there was due enquiry by the AO during the assessment proceedings leading to the assessment order the issues resolved by the High Court are pure questions of fact HELD THAT:- The issues resolved by the High Court are pure questions of fact and in the absence of any question of law being involved, no case to interfere with the impugned order passed by the High Court of Judicature at Bombay, is made out. Special Leave Petition dismissed.

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• 2023 (5) TMI 1012
  Income escaping assessment - Obligation to file return of income - Assessee being a member of a scheduled tribe - Deriving income exclusively within a notified area - Entitlement for full exemption of income u/s 10(26) - whether not obliged to file any return of income u/s 139(1) or her income be charged to tax? - HELD THAT:- In the present case, a regular appeal is maintainable and the submission on behalf of the writ petitioner to the effect that such regular appeal will be confined only to the order passed u/s 147 of the Act and cannot be enlarged to look into the factual aspects going into the making of the order, cannot be countenanced. Indeed, when an appeal is of limited scope, the appellate provision will expressly provide therefor as in cases where appeals are limited to questions of law and facts are excluded. There is no expression in the entirety of Section 246A of the Act to construe the power of the appellate authority to be limited only to Section 147 and not take up the fundamental issue that is sought to be raised in the present proceedings. Finally, the writ petitioner appeals to the Court to exercise its discretion since the primary premise of the argument falls within a narrow campus. The petitioner appeals that it would be better if the legal question raised were to be decided and the matter left to the Department for the Department s further consideration. Ordinarily, there is an element of bona fides which is taken into consideration by a writ court, particularly when allowing its discretion to be exercised in an extraordinary manner. All that was required of her upon receiving the several notices was to demonstrate that such income, in its entirety, was exempted under Section 10(26) - Yet, notice after notice went unheeded till the petitioner furnished the details of her bank accounts, claimed that she had invested and reinvested in mutual funds and glibly submitted that she maintained no accounts despite maintaining that she was an authorised distributor of LPG gas cylinder and an exporter of coal and limestone and the like. Such conduct on the part of a citizen would not excite to a Constitutional Court to exercise any discretion in her favour. Indeed, the interpretation of a provision of the statute and the considerations going into allowing an extraordinary remedy to be pursued may sometimes depend primarily the conduct of a party approaching the Court or an element of prejudice suffered by such party. In this case, neither the conduct nor the alleged prejudice suffered by the petitioner herein prompts the Court to exercise any discretion to receive the matter and adjudicate the same without leaving the petitioner free to approach the regular remedy in accordance with law. As however, recorded that since the matter had been pending in this Court for a substantial period of time, whatever may have been the reasons therefor, the Department should not take point of limitation before the appellate forum; or else, even if such objection is taken, the appellate forum deals with the objection with a degree of latitude towards the petitioner herein. Legal issues raised on merits have not been gone into and it will be open to the appellate forum to decide the same in accordance with law.

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• 2023 (5) TMI 1011
  Addition u/s 41(1) - addition towards waiver of liability / expenditure claimed earlier - assessee has neither filed its return of income nor made an assessment and thus interest was not claimed as deduction - HELD THAT:- Undisputed fact of the case is, assessee stopped its operation in the year 2004 and it is under the control of Liquidator. Assessee has not filed its return from A.Y. 2003-04 onwards. As per mercantile system of accounting, assessee had been accounting for interest expenses every year in its books of accounts showing it as payable. One of the essential requirements of Section 41(1) of the Act is that there should be an allowance or deduction made in the assessment for any year in respect of loss or expenditure or trading liability. The AO has recorded a finding in para 3 of its order that the assessee has not filed the returns for the claim for the earlier years and thus no claim has been made by filing returns of income. As is right in his submission that Section 41(1) shall be applicable only when allowance is made in any assessment or reassessment for any year. In the present case, no assessment or reassessment has been made for any A.Ys. Therefore, no allowance or deductions are claimed for any A.Ys. It is not in dispute that assessee has not filed return of income in the earlier A.Ys. claiming deduction of interest and no assessment or reassessment has been made for any A.Ys. Hence, Section 41(1) of the Act is not applicable and we find no error in the CIT(A) s order. Decided in favour of the assessee.

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• 2023 (5) TMI 1010
  Hearing of the appeal out of turn - grievance of very high-pitched scrutiny assessment - Guidelines for priority/out of turn disposal of appeals by CsIT (AU) and CsIT (Appeals) - Local High Pitch Committee rejected the request - request for early hearing is made on the premise that the additional assessment u/s 143(3) and the demand u/s 156 is high-pitched and inasmuch as the demand is more than Rs. 1 Crore, appeal challenging the order u/s 246-A and which is pending before the Principal Commissioner of Income Tax, be heard out of turn - HELD THAT:- We are not required to delve deeper. We note that personal hearing as such was not sought, and nothing is brought to our notice to suggest that a personal hearing is provided either under any statutory rule or then any guideline issued by the CBDT. The material placed on record would suggest that the High- Pitched Committee considered the grievance of the assessee along with the relevant record. High-Pitched Committee noted that the petitioner did not comply with notice under Section 142(1) of the Act dated 03-12-2020 nor did he comply with the reminder letter dated 20-12-2020 or then the show cause notice dated 19-1-2021. The Committee further noted that the reminder letter dated 03-2-2021 is responded belatedly and there is no compliance with the letter dated 26-2-2021. In writ jurisdiction, we are not inclined to delve deeper in the narrative and the counter narrative. The assessee is only denied out of turn hearing. We do not find any irrationality in the reasons recorded by the High-Pitched Committee. Stay of demand - Department has already shown indulgence inasmuch as Stay is granted for assessment year 2018-19 on the condition of payment of Rs. 4,00,000/- (Rupees Four Lakh) per month, the first installment being due and payable from November 2022. In essence, the petitioner is permitted to deposit 20% demand, in monthly installment of Rs. 4,00,000/- (Rupees Four Lakh). In our considered view, the department has been very reasonable and considerate. Petition is absolutely meritless, and is dismissed with costs of Rs. 10,000/- (Rupees Ten Thousand), which may be paid to the Department within four weeks from the date this order is uploaded on the High Court Website.

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• 2023 (5) TMI 1009
  Application filed seeking interim relief - order u/s 148A(d) was passed, according to the petitioner, as far back as on 31.03.2022 - revenue, says that the petitioner is guilty of delay and laches, and therefore, no intercession is called for. HELD THAT:- Before we proceed further, we would like to know from revenue as to whether or not the assessment order has been passed. He will return with instructions, in that behalf, on the next date of hearing. List the matter on 14.02.2023.

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• 2023 (5) TMI 1008
  Unexplained expenditure - Ledger Confirmation submitted by assessee ignored - HELD THAT:- We note that assessee had furnished before the assessing officer the invoices, bank statements and payment details in respect of expenditure/ purchases made from these two parties and assessing officer did not find any mistake in these documents and evidences. AO has not refuted or discredited these documents and evidences. AO does not mention in his assessment order that why he is not accepting these evidences and documents. AO ought to have examined all these details, documents and evidences and refuted / rejected them, with a cogent adverse findings and discernable line of reasoning, in order to arrive at a conclusion and to make the addition. We note that assessing officer has not refuted or discredited these evidences and documents. On the contrary, the assessing officer has just brushed aside these evidences without even a word on why they are not acceptable. It is a well settled Law that when an assessee has all the possible evidence in support of its claim, they cannot be brushed aside based on surmises. Decided in favour of assessee. Differential amount of balance as compared to Ledger Confirmation of the Parties - HELD THAT:- These additions are opening balances coming from the previous year, therefore these two amounts did not pertain to assessment year under consideration. The principle of taxation is that right income should be taxable in the right assessment year and we note that these two additions made by the assessing officer do not pertain to assessment year 2017-18, under consideration, therefore we delete these additions.

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• 2023 (5) TMI 1007
  Addition u/s 69A - unaccounted income of the assessee - income of the partnership firm added in the hands of the assessee - HELD THAT:- Details relating to the said firm and 'the' books of accounts and statements of the said firm were submitted before the assessing officer vide submissions in response to notice u/s 153C of the Act issued to the said firm. Similar submissions were made in the case of the assessee as well. However, the assessing officer did not take cognizance of the said submissions. CIT(A) also observed that M/s Platinum Developers has filed application before Hon'ble Settlement Commission, Mumbai in which the undisclosed income which is part of the seized material referred to above has been offered to tax in the hands of the said firm. CIT(A) held that the Himgiri Project belonged to M/s Platinum Developer and income including undisclosed income, if any, has to be brought to tax in the hands of the said firm only. The income of the firm especially when assessed to tax cannot be brought to tax in the hands of the individual partners. Addition made by the AO towards the income of the partnership firm M/s Platinum Developers in the hands of the assessee in the profit sharing ratio cannot be sustained. Appeal filed by the Revenue is dismissed.

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• 2023 (5) TMI 1006
  Benefit of exemption u/s. 54F - Purchase of second residential house - assessee already owns one residential house in USA - Period of limitation for investment in the property within a period of three as mandated in section 54F - HELD THAT:- From the plain reading of the provisos (a) (b) to section 54F it is clear that if the assessee owns more than one residential house other than the new asset on the date of transfer of original asset, the benefit of deduction u/s. 54F cannot be availed by the assessee. The Act is also silent on the fact whether the property should be situated in India or outside India. The submission of the DR also holds merit on the ground that the assessee is a co-owner of the property situated in USA which was evidenced by the property record details submitted by the Ld. DR. There is also merit in the argument of DR that the assessee habitually resides in the property situated in USA and has disclosed the address of that property in the assessee s Passport. Contention of the Ld. AR that the property at USA is a Farm House cannot be accepted. Since the assessee owned one more residential house at the time of transfer of original asset, the assessee is not entitled to claim the benefit of deduction u/s. 54F of the Act. Hence, the Ground No.1 raised by the Revenue is allowed.

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• 2023 (5) TMI 1005
  Disallowance u/s 14A r.w.r. 8D - Assessee did not make any disallowance u/s 14A in computation of income - HELD THAT:- Reason given by AO for the impugned disallowance that the assessee did not make any disallowance u/s 14A in computation of income completely ignoring the assessee s explanation offered before him that the expenditure claimed in profit and loss account has duly been disallowed in computation of total income and treated as pre-operative expenses capitalised as fixed assets. During the year the assessee had no business income and therefore, no expenses were claimed as business expenses or any expense under the head other sources . Hence, no disallowance of expenses is called for under section 14A r.w. Rule 8D. CIT(A) also misapplied the decision of Godrej Boyce s case [ 2017 (5) TMI 403 - SUPREME COURT] as legal import of the decision is that the expenditure incurred in earning the exempt income cannot be allowed to be deducted which is as per law enshrined in section 14A - CIT(A) also discarded the explanation of the assessee that no expenditure was incurred to earn dividend income since the entire expenditure had been capitalised as Capital Work-in Progress without assigning any valid legal and tenable reasons. Identical disallowances made in preceding AY 2011-12 and 2012-13 have been deleted by the Ld. predecessors of the Ld. CIT(A). Rule of consistency must be adhered to if the facts and circumstances of the case remain the same. Decided in favour of the assessee. CIT(A) has already given direction for verification of opening and closing amount of investment for calculating disallowance under section 14A r.w. Rule 8D. We reiterate the same direction

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• 2023 (5) TMI 1004
  Unexplained cash deposit in two separate bank accounts - HELD THAT:- CIT(A) not accepted the explanation of the assessee that cash deposit in the bank account was out of past savings as there was cash withdrawal of Rs. 50,000/- and Rs. 80,000/- only. Remaining additions were upheld by ld CIT(A) by taking view that assessing officer made addition as no evidence was furnished about agriculture income and past savings. CIT(A) further held that the assessee has not shown agriculture income in his return of income and upheld that addition to the extent of Rs.5.00 lakhs only. Before us assessee has not filed any evidence of agriculture income or any evidence about the retiring benefits from GSRTC. Also noted that the CIT(A) has already granted the substantial relief from addition of cash deposits, therefore, no reason to grants further relief to the assessee. Hence, ground No.1 of the appeal is dismissed. Taxing the addition u/s 115BBE - CIT(A) confirmed the action of assessing officer in taxing the addition at higher rate by simply holding that section 115BBE was inserted by Finance Act 2012, w.e.f. 01.04.2014 - HELD THAT:- We direct the assessing officer to tax the addition at the normal rate of tax applicable prior to Second Amendment Act 2016. In the result, ground No.2 of the appeal is allowed.

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• 2023 (5) TMI 1003
  Disallowance u/s. 42 - plant and machinery (including oil-well) installed during the year under consideration - AO rejected the assessee s claim on the ground that as per the section 42 of the Act, only those deductions are allowable which are specifically provided in the agreement entered into between the assessee and the Central Government - HELD THAT:- Hon ble Supreme Court [ 2015 (11) TMI 1685 - SC ORDER] dismissed the petition filed by the assessee and held that Product Sharing Contracts (PSCs) entered into between the assessee and the Government of India did not include a clause pertaining to section 42 and therefore deduction under this section could not be allowed to the assessee. Based on the aforesaid decision passed by Hon ble Supreme Court, the ITAT dismissed the appeal filed by the assessee for assessment years 2005- 06, assessment year 2001-02 and assessment year 2002-03. Depreciation at higher rate - Depreciation on oil wells be allowed as plant and machinery OR building u/s. 32 - HELD THAT:- As relying on own case assessment year 2006-07 [ 2022 (3) TMI 1524 - ITAT AHMEDABAD] oil wells are eligible for depreciation as plant and machinery . Accordingly, the Assessing Officer is directed to re-compute the depreciation on oil wells on opening WDV. With respect to additions made during the year, the A.O. may call for necessary details from the assessee to ascertain the nature of additions made and allow depreciation as per the above directions. Oil field equipment eligible for depreciation @ 60% being plant and machinery - HELD THAT:- As respectfully following the decision in assessee s own case for assessment year 2006-07 [ 2022 (3) TMI 1524 - ITAT AHMEDABAD] we hold that the assessee is eligible to claim depreciation on oil field equipment @ 60%. Additional depreciation u/s. 32(1)(iia) - HELD THAT:- As in the assessee s own case for assessment year 2006-07 [ 2022 (3) TMI 1524 - ITAT AHMEDABAD] which has held that extraction of mineral oil which would amount to production of articles or things , we hold that the assessee is eligible to claim additional depreciation u/s. 32(1)(iia) of the Act. The matter is being restored to the file of the Assessing Officer to allow additional depreciation on oil well and oil field equipment, capitalized during the year, he may need to carry out the necessary verification that the conditions of section 32(1)(iia) have been satisfied i.e. the plant and machinery before its installation, was not used within or outside Indian by any other person and also satisfy himself that any other conditions as mentioned in section 32(1)(iia) of the Act, have been duly satisfied at the time of allowing the assessee s claim for additional depreciation. Unrealized foreign exchange gain reduced from block of assets u/s. 43A - HELD THAT:- As in the instant facts, we observe that the AO and DRP have given a categorical finding that the assessee has not been able to demonstrate whether the aforesaid foreign exchange gains on account of restatement of payables for capital asset at the end of the year is realized or unrealized capital gains. Accordingly, this issue is restored to the file of Assessing Officer to verify whether the foreign exchange gains are realized or unrealized in the instant set of facts and then allow the claim of the assessee in accordance with law. Disallowance of deduction u/s. 80IB(9) for Wavel Oil Field and Dholka Oil Field - HELD THAT:- Since the issue whether the Explanation to section 80IB(9) would operate retrospectively or not is pending adjudication before the Hon ble Supreme Court, following the decision of the assessee s own case for assessment year 2001-02, 2002-3 and 2005-06 at this juncture, we are refraining from adjudicating ground and restore the matter back to the file of Assessing Officer to decide the issue in accordance with the directions of the Hon ble Supreme Court decision [ 2015 (11) TMI 1685 - SC ORDER] Disallowance of deduction of technical service charges paid to head office - HELD THAT:- We are in agreement with the proposition that merely by providing services in the form of reports etc does not lead to the inference that technology has been made available to the assessee and therefore in our considered view, since the Department has not been able to bring anything conclusive to prove that services have made available, knowledge and technology in a manner that the assessee shall not require such services from the head office for the purpose of conducting its business in India in the future - in the instant facts, make available clause has not been satisfied and therefore the services do not qualify as fee for included services under Article 12 of the India-US Tax Treaty. Further, it is also a settled preposition that technical services do not fall within the embargo provided u/s. 44C of the Act. In the case of John Wyeth Brothers Ltd. [ 2012 (12) TMI 406 - ITAT MUMBAI] held that where the assessee, a branch office of foreign company, claimed deduction of laboratory expenses, in view of the fact that said expenses did not include expenses incurred on executive or general administration as indicated in different clauses of section 44C of the Act, the assessee s claim was to be allowed - we are of the considered view that the assessee is eligible to claim deduction of technical service charges paid to the head office. Assessee appeal allowed. Nature of expenses - Disallowance of preliminary drilling expenditure as capital expenditure - HELD THAT:- Looking into the nature of expenses incurred by the assessee coupled with the fact that the Department has not brought anything on record to show that any capital asset of enduring nature was brought into existence, the claim of the assessee on expenses incurred on preliminary drilling expenditure is hereby allowed. Renovation expenses in the Leased Premises - renovation expenditure or capital expenditure - HELD THAT:- The aforesaid expenditure qualifies as revenue expenditure and hence may be allowed as revenue expenditure. Assessee has incurred a sum towards other sundry expenses, may also be allowed as revenue expenditure since no capital asset of enduring nature was brought into existence by way of aforesaid expenditure and hence the same may be allowed to the assessee as revenue expenditure. Expenses towards purchase of furniture and fixture and another payment to Dishnet Wireless Ltd. for purchase of asset and payment towards purchase of furniture and fixture for new office have been incurred for purchase of furniture and fixture and other capital assets and hence are in the nature of capital expenses. Accordingly, the same cannot, in our view, be allowed as revenue expenditure in the hands of the assessee. However, the AO is directed to allow depreciation on such fixed asset in accordance with law after carrying out the necessary verification. Non granting depreciation u/s. 32 if expenditure is held as capital expenditure - HELD THAT:- Looking into the nature of expenses since the same have been incurred for creation of a capital asset, the same are of capital account and hence are not allowable as revenue expenditure. We are in agreement with the contention of the assessee that in case the expenses are held to be of capital nature and have been incurred for creation of new capital asset, then, the assessee is entitled to claim depreciation on such expenses. Accordingly, we direct the Assessing Officer to allow depreciation on the aforesaid expenditure in accordance with law after carrying out the necessary verifications. Disallowance u/s. 40A(3) - assessee incurred payment on sweets during the festive season and payment was made in cash - HELD THAT:- Since the assessee has not been able to adduce any evidence whatsoever with respect to incurring of the aforesaid expenditure in cash towards purchase of sweets, we find no infirmity in the order of DRP so as to call for any interference. Decided against assessee. Disallowance u/s. 40(a)(ia) - short deduction of tax - assessee submitted that the aforesaid short deduction on the total payment was on account of inadvertent exclusion of surcharge while deducting taxes at source on the aforesaid payment - HELD THAT:- We observe that this issue has been decided in favour of the assessee by case of Future First Info Services Pvt. Ltd. [ 2022 (7) TMI 748 - DELHI HIGH COURT] as held that where the AO made disallowance u/s. 40(a)(ia) on the ground that assessee company had made short deduction of tax and thus was in violation of section 97(1), since for cases of short deduction of TDS the correct course of action is proceeding under section 201 of the Act, thus, impugned disallowance u/s. 40(a)(ia) was to be deleted - this issue stands decided in favour of the assessee on account of aforesaid short deduction of tax. Depreciation on goodwill or as depreciation of any other commercial right or intangible asset u/s. 32 - amount shown under the head goodwill is the amount paid by the company in respect of value of assets acquired by it along with interest in joint venture from L T - HELD THAT:- As in the interest of justice, this issue is being restored to the file of Assessing Officer to examine firstly, whether or not depreciation is allowable on the aforesaid asset and under which category the assessee is claiming depreciation on the same i.e. as depreciation on goodwill or as depreciation of any other commercial right or intangible asset u/s. 32 of the Act. Secondly, the Assessing Officer may also examine that the necessary supporting documents in justification for assessee s claim of depreciation. Accordingly, this issue is aside to the file of ld. Assessing Officer with the aforesaid directions. Nature of expenses - repairs and maintenance expenditure as capital expenditure - HELD THAT:- As the assessee already identified and capitalized the relevant expenditure and assessee only claimed the balance expenditure as Revenue expenditure, we are of the considered view that the assessee is eligible to claim aforesaid expenditure as revenue expenditure. Further, the assessee s facts are supported by the case of Madras Auto Services [ 1998 (8) TMI 1 - SUPREME COURT] and also by the case of Modi Spinning and Weaving Mills [ 1992 (10) TMI 76 - DELHI HIGH COURT] in which it was held that expenditure of alteration is capital, if incurred by owner but revenue if incurred by the tenant.

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• 2023 (5) TMI 1002
  Deduction u/s.80IA(4) - not doing activities as defined - proof of effluent treatment plant and process - AO has denied the claim holding that assessee is not doing activities as defined in Section 80IA(4) which includes carrying out infrastructure project of water treatment project or effluent treatment plant - HELD THAT:- The explanation below Sub-Section (4) to Section 80IA states that for the purpose of this clause infrastructure facility means a water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system . As brought to our notice that CBDT vide Circular No.1/2006 dated 12/01/2006 have also clarified that effluent treatment plant shall be considered as part of water treatment plant and shall be eligible for tax u/s.80IA. As explained that the assessee gets effluent water and this water contains Potassium Carbonate, Sodium carbonate, Potassium Hydroxide in dissolved form. This aqueous stream containing the dissolved salts is received by the assessee. Then this stream is concentrated in multi-effect evaporator to remove the water contents. The concentrated stream is then crystallized using cooling water. During crystallization process Potassium Carbonate and Sodium carbonate crystals are formed as mixture. The Crystallized slurry is filtered in centrifuge. The wet cake is dried in dryer generate Potassium Carbonate Sodium carbonate mixture. The mother liquor and wash liquids sold as Potash Lye contains Potassium Hydroxide. Thus, it is purely effluent treatment plant and process. Apart from that the assessee has obtained consent to set-up/consent to operate from the Maharashtra Pollution Control Board (MPCB) for setting up the ETP/WTP Thus, assessee s effluent water treatment plan categorically falls within the ambit and scope of Section 80IA(4) as misinterpreted by the AO so as to deny the claim of deduction u/s.80IA(4). Nowhere the AO has pointed out as to what are the conditions laid down in Section 80IA(7) has not been fulfilled because assessee had filed and obtained the audit report alongwith revised return on 19/02/2018. Nowhere the AO has held that revised return is invalid. In any case, the reason which was given before the ld. AO was that Form No.10CCB and working of 80IA was though obtained before the date, however, inadvertently it was deleted for the A.Y.2017-18 and once assessee realizes his mistake in Form 10CCB together with working of 80IA(4) were then correctly filed electronically alongwith revised return of income. In these circumstances, it cannot be held that there is any violation of any provisions of law and in any case, if the claim and audit report was there before the ld. AO during the course of assessment proceedings and no fault has been pointed out therein; the same cannot be the ground for denial of deduction u/s.80IA. Decided in favour of assessee.

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• 2023 (5) TMI 1001
  Income deemed to accrue or arise in India - denial of benefit of the India-UK Double Taxation Avoidance Agreement ( DTAA ) - HELD THAT:- We find that Tribunal in assessee s own case in Linklaters LLP [ 2019 (6) TMI 1502 - ITAT MUMBAI ] rendered similar findings. Similarly was held by the coordinate bench of the Tribunal in assessment years 2015-16 and 2016-17 in assessee s own case [ 2020 (11) TMI 733 - ITAT MUMBAI] , [ 2023 (3) TMI 912 - ITAT MUMBAI] . DR could not show us any reason to deviate from the aforesaid decisions rendered in assessee s own case and no change in facts and law was alleged in the relevant assessment year - we uphold the plea of the assessee that it is entitled to claim the benefit under the India-UK DTAA. Grounds raised in assessee s appeal are allowed. Taxability of income received by the assessee as Fees for Technical Services under the provisions of the India-UK DTAA - HELD THAT:- Since in the year under consideration also the assessee rendered similar services in the nature of purely legal advisory, wherein it cannot be said that any technical knowledge, experience, skill, know-how, or processes can be utilised by the client in the future without the aid of the assessee, therefore, the services rendered by the assessee cannot be said to have made available the technical knowledge, skill, experience, know-how or process, etc. to the recipient of services. Thus, respectfully following the decision of the coordinate bench of the Tribunal rendered in assessee s own case [ 2017 (2) TMI 779 - ITAT MUMBAI] we are of the considered view that income received by the assessee is not in the nature of Fees for Technical Services as envisaged under Article 13 of the India-UK DTAA. As a result, grounds raised in assessee s appeal are allowed. Existence of the Permanent Establishment ( PE ) in India in terms of the provisions of the India-UK DTAA - HELD THAT:- From the perusal of the submission dated 02/12/2016 filed by the assessee before the AO, forming part of the paper book from pages 9-22, we find that employees of the assessee were present in India for rendering services for a period aggregating to only 13 days. This fact was also reiterated by the assessee before the learned DRP. However, the same has not been controverted. Even in the final assessment order pursuant to the directions issued by the learned DRP, the AO has not denied the aforesaid fact - we are of the considered opinion that the assessee does not have a PE in India under the provision of the India-UK DTAA, during the year under consideration. Since the assessee neither has a PE in India nor the income is found to be in the nature of Fee for Technical Services under the provisions of the DTAA, therefore, the said income cannot be brought to tax in India, even under the provisions of the Act in view of the provision section 90(2) of the Act. As a result, grounds raised in assessee s appeal are allowed. Taxability of reimbursement of expenses received by the assessee - HELD THAT:- From the perusal of the record, it is evident that the Revenue has not disputed the fact that out of the total amount of Rs.50,29,148 invoiced by the assessee, the amount of Rs.1,33,099.54 pertains to the reimbursement of travel and hotel accommodation.Assessee has also provided the breakup of this disbursement and the clients from whom the same was charged. Since the disbursements are not in the nature of income and are only reimbursement of actual expenditure incurred by the assessee, therefore same cannot be chargeable to tax. As a result, grounds raised in assessee s appeal are allowed.

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• 2023 (5) TMI 1000
  Disallowance of Design and Development expenses - principal of res-judicata or consistency - contention of the assessee that similar expenses were incurred by the assessee in earlier and in subsequent years and amount was also paid to the same parties in those years but no disallowance of the expenses have been made by the AO while framing the assessment u/s 143(3) - HELD THAT:- DR Submission that the principal of res-judicata is not applicable to the assessment proceedings and each assessment year has to be considered on standalone basis. We do not dispute the aforesaid preposition of DR but at the same time the Hon ble Supreme Court in the case of Radhasoami Satsang [ 1991 (11) TMI 2 - SUPREME COURT] has held that even though principles of res judicata do not apply to income tax proceedings, but where a fundamental aspect permeating through different assessment years has been found as the fact one way or the other and the parties have allowed the position to be sustained by not challenging the order, then it would not be appropriate to allow the position to be changed in the subsequent year. No justification in AO for disallowing the expenses on adhoc basis and which was upheld by CIT(A). We, therefore, set aside the addition made by AO. Thus the ground of assessee is allowed. Addition on account of suppressed income from sale of Katran/Scrap material - waste generated known as Katran - HELD THAT:- We find that the basis of working out the alleged sale value of Scrap that assessee ought to have earned is only on the basis of the search conducted by the AO on the internet. AO has not brought any material on record to demonstrate that the Scrap Sales found by him on the internet by various other entities were engaged in dealing with similar business as of the assessee. AO has also not stated the basis of the selection of parties, the name of the parties on the basis of which he has concluded the sale of scrap to be understated. Assessee has also demonstrated the percentage of sale of Scrap in various preceding and succeeding assessment years and percentage of waste to the sale in the year under consideration are in the same range as that of earlier and subsequent years. AO has not brought on record any concrete material to demonstrate that the sale of Scrap recorded by the assessee is understated. On the contrary he has presumed it on the basis of the working made by him on the basis of research undertaken on the internet. AO was not justified in making the estimation of Scrap Sales. Set aside the addition made by AO and upheld by CIT(A). Thus the ground of assessee is allowed.

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• 2023 (5) TMI 999
  Validity of Reassessment proceedings u/s 147 - bogus purchases - HELD THAT:- We note that original assessment of the assessee was complete u/s144 wherein the Assessing Officer made addition on account of bogus purchases. Later on reassessment proceedings were initiated under section 147 of the Act and assessment was framed u/s 144 r.w.s. 147 - In the said reassessment proceedings, the bogus purchases was again added by the Assessing Officer, which amounts to double taxation. Since, the above amount was disallowed by Assessing Officer in original assessment, therefore the same amount should not be disallowed in reassessment proceedings. Hence, addition made by Assessing Officer in reassessment proceedings is not sustainable in law. Ground of the assessee is allowed.

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• 2023 (5) TMI 998
  Penalty u/s 271(1)(c) - assessee has settled the dispute related to the one addition in VSVS - As the order of the ld. CIT(A) considered that the whole issue of levy of penalty is covered by VSVS scheme is not correct as argued by assessee - HELD THAT:- Considering the peculiar circumstances and facts as it emerges from the order of the lower authority that if the revenue peruse for the penalty demand of the assessee which is not covered under VSVS scheme then in that case the revenue before proceeding against the assessee CIT(A) should hear the case of the assessee on merits of dispute which is not settled in the VSVS scheme to that extent the order of the ld. CIT(A) is amended and restored to the file of the ld. CIT(A) for deciding the contentions of the assessee raised in the appeal afresh on merits after giving an opportunity of being heard to the assessee. The assessee is also directed to co-operate with the ld. CIT(A) in deciding the appeal on merits and without sufficient reason, not to take further adjournments - Appeal of the assessee is allowed for statistical purpose.

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• 2023 (5) TMI 997
  Addition u/s 40A - cash payment to the third party - HELD THAT:- The assessee has filed ledger extract of Sakthi Murugan Crusher in the books of the assessee as was filed before the Assessing Officer, the assessee could not demonstrate that the impugned expenditure was wholly and exclusively incurred for the purpose of its business or filed any corresponding evidences along with vouchers, details of sundry creditors with confirmation and sources for cash introduced were produced by the assessee. So far as case law relied on by the assessee in the case of Attar Singh Gurmukh Singh [ 1991 (8) TMI 5 - SUPREME COURT] has no application to the facts of the present case for the reason that the assessee has not produced any evidence for the purchase in cash mode with third party or furnished any satisfactory explanation either before the AO or before the CIT(A) or even before the Tribunal and thus, the Assessing Officer has rightly invoked the provisions of section 40A(3) of the Act in the present case. Decided against assessee.

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• 2023 (5) TMI 996
  Addition u/s 68 - assessee has raised fresh paid-up share capital which includes share premium by issue of fresh share during the instant previous year - AO straightway discussed position of law and then observed that assessee failed to submit specific details, hence he made the addition - HELD THAT:- According to the ld. CIT(Appeals), it is highly improbable that some genuine company would pay the premium as shown by the assessee. The simple reason is that there should some scientific study for commanding the premium and here in this case, the assessee has taken premium @ Rs.249/- per share as well as Rs.499/- per share. The face value of the share is only Rs.1/- in both the cases. As taken note of this finding of CIT(Appeals) in the order - The assessee failed to submit plausible details before AO as well as CIT(Appeals). It has not filed any paper book before the Tribunal. After going through the well reasoned finding of the ld. 1 st Appellate Authority, we do not find any reason to interfere in it. Hence, this appeal of the assessee is dismissed.

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• 2023 (5) TMI 995
  Addition u/s 68 - AO observed that unexplained money of the assessee brought into its business in the guise of share capital/share premium - HELD THAT:- AO found credits in the name of M/s. Pushpanjali Exports Pvt. Ltd. in the books of account of the assessee on different dates from 03.12.2011 to 15.12.2011. He asked for explanation as to the nature and source of the above credit entries. The explanation offered by the assessee was put to test. As not found satisfactory by the Ld. AO. We may refer to the decision in CIT vs. Precision Finance Pvt. Ltd. [ 1993 (6) TMI 17 - CALCUTTA HIGH COURT] wherein held that it is for the assessee to prove the identity of the creditor, his creditworthiness and the genuineness of transaction. Mere furnishing of particulars is not enough. Mere payment by account payee cheque is not sacrosanct nor can it make a non-genuine transaction genuine. For the cogent reasons recorded by the AO, he made the impugned addition u/s 68 which has been upheld by the Ld. CIT(A). We endorse the findings of the AO/CIT(A) and reject ground of the assessee.

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• 2023 (5) TMI 994
  Interest u/s. 244A - AO has not granted refunds with appropriate interest to the assessee, who is a Super Senior Citizen - assessee has filed the Return of Income by quoting the wrong PAN Number , but when the refund orders were issued in wrong name the same were returned by the assessee, highlighting the mistake in the PAN No. mentioned by the assessee - HELD THAT:- The assessee claimed the refund based on the TDS of Rs. 2,626 for the AY 2005-06, Rs. 4,222 for the Assessment Yeas 2006-07 and TDS 2,570 for the AY 2007-08 and 5,330 for the Assessment Year 2008-09. The A.O. ought to have verified the claim of above TDS with which PAN Number. From perusal of records the A.O. has not verified in the above TDS. When the assessee has returned the original refund orders made in the name of Harshadrai Chaturbhai Vora and on filing of Indemnity Bond by the assessee, the Revenue ought to have refund the money to the assessee. In this case, we find that the authorities have not exercised both these conditions. Therefore in the interest of justice, we set aside the matter back to the file of the Assessing Officer to verify the TDS claim made by the assessee with appropriate PAN No or otherwise based on the Indemnity Bond, the assessee should be issued with refunds in accordance with law. Appeals filed by the Assessee are allowed for statistical purpose.

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• 2023 (5) TMI 968
  Deduction u/s 11 - assessment of trust - ITAT held that receipt of fee in the nature of capitation fee by the Appellant Trust in excess of the permissible fee would rendered the Appellant Trust ineligible for deduction u/s 11 - whether whole of the income of the Appellant Trust was liable to be taxed at the maximum marginal rate contrary to Section 164(2)? - HELD THAT:- Appeal admitted on substantial question of law. Registry is directed to communicate a copy of this order to the Tribunal. This would enable the Tribunal to keep papers and proceedings relating to the present appeal available, to be produced when sought for by the Court. No case for grant of any interim relief is made out. The Interim Application is rejected.

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• Customs

• 2023 (5) TMI 993
  Violation of import condition - goods (Raw Petroleum Coke) imported by the respondent admittedly having sulphur content in excess of 7% - in conformity with Indian Standard 17049 or not - import of Raw Petroleum Coke under the CTH 27131100 needs to mandatorily comply with the policy condition or not - provisional release of goods having sulphur content more than 7% - HELD THAT:- The Commissioner of Customs, (Appeals) as well as the learned Tribunal has proceeded based upon the ultimate end product which is being manufactured by the respondent. Thus it would be an incorrect manner of examining as to whether the import was provided and whether it satisfies the conditions of licence. Furthermore, the Tribunal opined that no harm will be caused by provisionally releasing the goods - Such a finding, cannot be accepted as the question would be as to whether when admittedly the sulphur content is in excess of 7% will it conform to ISI 7049 as mentioned in the licence and if it does not conform to the said standard is there a violation of the conditions of import. Furthermore, the goods being prohibited item there is a mandatory requirement to comply with the policy condition and the Tribunal was required to examine as to whether there has been any violation of the stipulations under the policy. Before considering as to whether the goods have to be provisionally released when admittedly the sulphur content is more than 7%. Therefore, we are of the view that this question, which is a mixed question of fact and law is required to be decided by the Tribunal before approving the order passed by the Commissioner of Customs (Appeals) granting provisional release. Therefore, the matter requires to be reconsidered by the Tribunal by deciding the referred questions. The order passed by the learned Tribunal is set aside and the matter stands remanded to the learned Tribunal to decide the aforementioned questions and the parties are at liberty to make their submissions before the Tribunal and fresh decision has to be taken on merits and in accordance with law - appeal allowed by way of remand.

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• 2023 (5) TMI 992
  Issuance of Writ of Certiorari to call for the records in the Proceeding - Department was directed (by way of Interim Order) not to take any coercive steps for recovery of demand raised on account of the issue, which is pending with the Adjudicating Authority - HELD THAT:- Despite the interim order, it appears that some steps were taken against the petitioner and therefore, the petitioner was constrained to approach the Division Bench of this Court in C.M.P. Nos.4533, 6715, 6948 and 6987 and 2020 in C.M.A. Nos.735, 1059, 1098 and 1111 of 2020 and the Division Bench of this Court, by interim order dated 21.04.2021, referring to the earlier interim order granted on 22.09.2020, observed that action taken to attach the bank account of the petitioner was clearly in violation of the order passed by the Division Bench of this Court and directed the respondents to raise the order of attachment forthwith - Now, it is seen that the second respondent, by impugned communication dated 03.05.2023, has called upon the petitioner to pay the penalty amount of Rs.2,50,00,000/-, within 7 days from the date of receipt of the notice and informed that in case of failure, action will be initiated against the petitioner in accordance with the provisions of Section 142(1)(c)(iii) of the Customs Act, 1962. Despite interim orders already in force, there is no justification on the part of the respondents to issue the impugned letter dated 03.05.2023. Therefore, this Court feels that the writ petition can be allowed setting aside the impugned letter, which is clearly in violation of the earlier orders passed by the Division Bench of this Court - Petition allowed.

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• 2023 (5) TMI 991
  Grant of Anticipatory bail - Smuggling - Red Sanders - prohibited item or not - mis-declaration of goods - ignorance about E-way bill or propose recipient - HELD THAT:- The most import thing, according to this Court is the fact that irrespective of the fact that whether this is the case of mis-disclaration or about ignorance about E-way bill or propose recipient, the fact remains that the item which was mis-declared was red sandal logs, which has multiple uses right from uses in some common uses to use in installation of security equipment and therefore, the said item is a prohibited item for export. When the quantity of wooden logs found as mentioned in the panchnama dated 26.05.2022 is 840 wooden logs of red sandal amounting to Rs.11.70 crores, even if the consignment is cleared by the ICD, the sender of the consignment is expected at least to know the details about the proposed recipient of the E-way bills. In the instant case, the present applicant, during his response to the summons under Section 108 has pleaded complete ignorance about the proposed recipient of the red sandal logs as well as the E-way bills. Further, which shows that either the present applicant has non-cooperated or that he is hiding something. Further, as far as the submission of learned advocate Mr.Sharma about applicability of decision of Arnesh Kumar [ 2014 (7) TMI 1143 - SUPREME COURT ] is concerned, this Court is of the view that considering the sensitivity of the matter, once the present applicant who happens to be the sender of the red sandal logs, which according to Mr.Sharma is a case of mis-declaration and which is a prohibited item, even if the punishment is less than 7 years, considering the fact that quantity of red sandal logs is quite use running into 11.70 crores and is a prohibited item. The matter is required to be investigated thoroughly to reach to the roots of this entire conspiracy and therefore, also as in response to summons under section 108 of Custom Act, the present applicant has pleaded complete ignorance there is a possibility that he might be hiding something, which is very important for DRI to carry on further investigation and therefore, there are no reason to grant anticipatory bail to the present applicant as his custodial interrogation in opinion of this Court would be required. Application dismissed.

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• 2023 (5) TMI 990
  Levy of penalty under Sections 112 (a) and 112 (b) of the Customs Act, 1962 - allegation of importing consignments from Hongkong and China grossly mis-declaring the description and value of the consignments using the IEC registered in the name of other person and shell companies - burden to prove the allegations on appellant, cannot be fulfilled - no corroborative statements recorded - HELD THAT:- During the course of investigation, it is found that on 25.08.2017, the appellant visited the DRI Office along with one Shri Sameer Sharma, on whose persuasion, the appellant came to the DRI Office to facilitate the clearance of the impugned consignment, but it is very strange, that when Shri Sameer Sharma has also visited DRI Office along with the appellant, why the statement of Shri Sameer Sharma, who is alleged to be tout in the import of the impugned goods, was not recorded? It is found from the record that it has been alleged that the appellant has abeted to mis-declare and under-value the impugned goods, but in fact, the impugned consignment were already intercepted by DRI and found mis-declared and under-valued. In that circumstances, how the appellant was involved in abetment of the impugned consignment, which were already found mis-declared and under-valued. This said issue has come up before this Tribunal in the case of Smt.Sushma [ 2021 (7) TMI 578 - CESTAT NEW DELHI] , wherein the Tribunal has held There is no mention of any involvement of the appellant either in the form of instigation or conspiracy to aid the impugned fraudulent export. Though said statement got retracted vide his letter dated 26.08.2011 to Director General, DRI. But said retraction stands rebutted from letter No.50 D/25/2011 dated 02.09.2011 (RUD-II) and also from his own subsequent letter dated 11.11.2011 (RUD-12) where he informed Director General, DRI, about him to be the authorized person of all the companies in Table-I. All the documents collected statements recorded by the department are absolutely silent about any alleged role of the appellant. Further in the case of Shri Ram Another [ 1974 (11) TMI 100 - SUPREME COURT] , the Hon ble Apex Court has examined that in order to constitute abetment, the abettor must be shown to have intentionally aided the commission of the crime. Mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough to comply with the requirements of abetment. The Court cannot heap one assumption to give an another conduct of the appellant meaning which, it does not naturally bear at the best. In that circumstances of the case, the appellant wanted to help the clearance of the consignment, which does not conclude that the appellant has abeted in committing the crime. Thus, it is clear that the appellant came to the DRI Office with one Shri Sameer Sharma, whose statement was not recorded at all. The revenue has failed to prove that the appellant was involved in mis - declaration and under-valuation of the import consignments (which were already seized) without any cogent evidence - penalty on the appellant under Section 112 (a) 112 (b) is not imposable - appeal allowed.

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• 2023 (5) TMI 989
  Dropping of all proceedings initiated under Regulation 22 of the CHALR-2004 against the CHA M/s Gee Pee International, holder of CHA licence (revocation of CB license reversed) - Department s essential contention is that CHA s action, instead of associating with the Customs Authorities appeared to have done just opposite by resorting to suppression - HELD THAT:- The present appeal is a clear case of appalling apathy on the part of department in initiating a frivolous litigation when from para 15(iii) of Statement of Facts of their appeal no wrong doing appear to be forthcoming on the part of the CHA - whatever be the allegation regarding mis-declared value of imports, these is not a shred of evidence to impute the CHA, with this alleged imputation of misdeclaration and ascribe the onus on him. Also it is observed from the order passed by the LD. Commissioner that as far as knowledge on the part of the CHA about the code words and access to purchase registrar of Ma Vabatarini Enterprises, was concerned, it does not come out that the CHA was well aware of and had prior knowledge of the code words/numbers and wholesale market price mentioned in the purchase register of Kolkata based trader - Moreover, the appellants had no access to the Purchase Register of M/s Ma Vabatarini Enterprises. It is seen from the records, that it is categorically stated in the concerned papers that CHA had no role to play in price negotiations between the importers and Shri Dipak Das. The CHA is stated to have a limited role that of arranging the delivery of goods from the Customs area (bonded warehouse) and make arrangements for physical delivery in the presence of the officer of the department. The CHA appellants, merely filed the various bales of entry on the basis of invoices received from the importers and that there is no finding that such invoices received from overseas supplier were fake or fabricated. In short, there is nothing to impute any suppression or mis-statement on the part of the CHA. The entire case of the department is no better than a figment of imagination, based on presumption and attributing knowledge on part of CHA, without any material to support the same. Each case has to be looked at into its own facts and merits and the fact of cancellation of licence of some other CHA placed in similar circumstances cannot be any justification to mete out a similar treatment to another CHA. The department has not been able to demonstrate possession of knowledge of code words or that of the alleged misdeclaration of value on part of the appellant. There is nothing to establish that the CHA failed in suitably advising his clients or to report any non-compliance (of which obviously he ought to have knowledge) to the department s notice or that the appellant failed in discharge of his duties with efficiency and alacrity. The appeal filed by the department fails miserably and is therefore dismissed.

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• 2023 (5) TMI 988
  Penalty under Section 114(i) 114AA of Customs Act - seized foreign currency - whole case is made out on assumptions and presumptions, relying on the statement of Mr. Manoj Phulwani - HELD THAT:- There is no evidence that the seized and confiscated foreign currency was given by the appellant to Mr. Manoj Phulwani. It is further found that the statement of Mr. Manoj Phulwani is not reliable piece of evidence, as revenue have failed to comply with the mandate of Section 138B of the Act. Section 138B(b) requires that such person who made the statement has to be examined as witness in the adjudication proceedings, and if the adjudicating officer having regard to the circumstances of the case, admits the same in evidence, thereafter, such witness should be offered for cross examination by the noticee and only after such statement is tested in cross examination, the same can be relied upon. Sub-section (2) of Section 138B categorically provides that the mandate of Section 138B(1) shall so far as may be, apply in relation to any proceedings under this act, other than a proceeding before a court, as they apply in relation to a proceeding before a court. Appeal allowed.

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• 2023 (5) TMI 987
  Eligibility to avail the benefit of Notification No.12/2012 dated 17.03.2012 for import of Phelps Dodge Brand Electrical Cable 132 KV (EHT Cables = Extra High Tension Cables) - adjudicating authority denied the benefit of the said Notification and assessed the normal rate of duty against the said order. HELD THAT:- The said issue came up before the Tribunal in the COMMISSIONER OF CUSTOMS (PORT) , KOLKATA VERSUS TATA STEEL LTD. [ 2018 (6) TMI 1832 - CESTAT KOLKATA] , wherein it was held that After going through the definition as contained in McGraw Hill dictionary it appears that the same confined only to Cathode Ray Tube (CRT) which are generally used to manufacture of computer monitor and picture tube of T.V. etc. The imported cable does not belong to that category. Therefore, the Ld. Commissioner (Appeals) has rightly set aside the order of the Lower Adjudicating Authority and by extending the benefit under the notification. We find no infirmity in the order of the impugned order, so the same is hereby sustained. The appeal filed by the Revenue is dismissed. The ground, which has been taken for filing these appeals, is that the matter in the case of Tata Steel Ltd., is pending before this Tribunal. Therefore, the appeals are filed - As the issue has already been settled in favour of Tata Steel Limited by this Tribunal, relying on the same, it is held that the respondent are entitled for Notification No.12/2012 dated 17.03.2012 Sl.No.376. The appeals filed by the Revenue are dismissed.

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• Corporate Laws

• 2023 (5) TMI 986
  Seeking restoration of striken off name of company on the Register of Companies - preceding two years on behalf of the company no financial statement and annual returns were filed before the ROC and the company was non-operational - HELD THAT:- Once the appellant was taking a stand that the company was doing business, it was mandatorily required to satisfy the NCLT with, cogent evidence that the company was doing some business or company was operational. The plea of learned counsel for the appellant that company was operational or doing business in absence of any cogent material is not sustainable. It is further seen from the stand taken by the ROC before the NCLT in the application filed by the applicant i.e. Appeal No.150/2020 that the company was not operational and doing no business. The ROC in its reply in para 4,5,6 and 7 has clarified the position and also clarified that before striking off the name, the company was given full opportunity to explain. On examination of the table in para No.7 of the reply, it is evident that the Colum No.1 i.e. Revenue from operation and Column No.4, GST Details, have been shown as blank. Meaning thereby that neither any GST was paid nor revenue from operation was collected. These facts are enough to draw an inference that the company was non-operational nor doing any business. Besides this there is admission of the appellant before NCLT that in the management of the company there was deadlock due to litigation and disputes amongst the directors. On examination of the provision of section 250 of Companies Act, it goes without saying that even a company whose name has been struck off, is competent to realise claim/claims and similarly his liability can also be realised by others. It is evident that while considering the case of Indian Explosives Ltd [ 2010 (4) TMI 1185 - DELHI HIGH COURT] in the year 2010 there was no occasion for the Hon ble High Court to examine the Section 250 of the Companies Act, 2013. Moreover, if a specific procedure has been provided under Section 248 of the Act for taking a decision in special exigency for striking off the name of the company taking lenient view in passing restoration of the name of the company may amount to render a statutory provision i.e. Section 248 of the Act redundant without any plausible explanation. In the present case the facts which have emerged are sufficient to persuade us that the Learned NCLT has committed no error in rejecting the appeal filed by the company under Section 252 of the Act for its restoration. There are no error in the impugned order warranting interference - appeal dismissed.

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• Securities / SEBI

• 2023 (5) TMI 985
  PIL - Suspension of Admission to Dealings on the Exchange - millions of investors who are being duped by the unscrupulous promoters of the companies - Petitioner holding a Bachelor s Degree in Law stating that he is espousing the cause millions of investors who are being duped by the unscrupulous promoters of the companies as the promoters of the companies vanish after siphoning off the hard-earned money of the investors - Scope of Appeal to Securities Appellate Tribunal. HELD THAT:- It is the duty of the SEBI to protect the interest of the investor in securities and to promote the development of, and to regulate the securities market by such measures as it thinks fit. Meaning thereby, the SEBI is empowered to take all such measures in the interest of investors and such measures may include regulating the business in stock exchange, registering and regulating the working of stock brokers, performing such functions and exercising such powers under the Provisions SCRA, as may be delegated by the Central Government. The aggrieved investor can certainly prefer an Appeal before the Securities Appellate Tribunal (SAT) in case he is aggrieved in the matter of delisting of the security. Delisting regulations provide Provisions with respect to the rights of the share-holders and all kind of checks and balances are in place under the Regulations. It is pertinent to note that Section 23(2) of the SCRA gives a special power to SEBI to penalize any person who contravenes the Provisions inter alia Section 21 or Section 21A or Section 22, and a punishment upto 10 years or a fine which may extend up to Rs. 25 crores can be inflicted. Not only this, as stated in the written reply filed by the SEBI, for vanishing companies, the exercise was undertaken by the Registrars of companies and action has been initiated in the matter against them. Thus in short, the statutory provisions do provide a robust mechanism to safeguard the interest of investors and by no stretch of imagination, it can be said that the interest of investors is not at all protected. Appeal against any order/ decision for recognized stock exchange before the SAT and any person aggrieved in the matter by the order or decision of the recognized stock exchange or the adjudicating officer or any order made by the SEBI under Section 4B can prefer an Appeal, therefore, an efficacious remedy is also available under the statutory provisions. The statutory provisions governing the field make it very clear that a transparent mechanism of delisting the securities, adequate participation and/ or representation of public shareholders in the process of delisting is in place, and a remedy is also available to aggrieved investor in the matter of delisting. Not only this, even in case of compulsory delisting, which is a disciplinary mechanism, an aggrieved investor may file an Appeal before the SAT against the decision of the recognized stock exchange delisting the securities under Section 21A(2) of the SCRA. In the considered opinion of this Court, in view of the reply filed by the SEBI, Government of India and Bombay Stock Exchange, no further orders are required to be passed in the present PIL, and the interest of the investors is certainly protected under the Statutory Provisions governing the field.

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• Insolvency & Bankruptcy

• 2023 (5) TMI 984
  Condonation of delay of 21 days in filing appeal - time limitation - initiation of CIRP - HELD THAT:- There is a delay of 21 days in filing the appeal under Section 62 of the Insolvency and Bankruptcy Code 2016. The delay is beyond the maximum period which is condonable in terms of the statute. The civil appeal is dismissed on the ground of limitation.

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• 2023 (5) TMI 983
  Initiation of CIRP - time limitation - date of default - whether the original application filed by the Appellant under Section 7 of the Code before the Adjudicating Authority was within limitation time frame in accordance with the Limitation Act, 1963 or it was time barred as observed by the Adjudicating Authority based on which the Application was dismissed? HELD THAT:- The debt is defined under Section 3(11) of the Code and default has been defined under Section 3(12) of the Code, debt has been defined as a liability or obligation in respect of a claim which is due and default means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor/ Corporate Debtor. It is observed from Section 7(1) of the Code that the Financial Creditor may file an application for initiating CIRP when the default has occurred. It is not necessary for the Appellant to file an application under Section 7 of the Code, on the happening of first default of amount due and it is discretion of the Financial Creditor to decide filing an Application under Section 7 as per the facts and his legal rights - the Financial Creditor do not initiate on many occasions the proceeding for CIRP against the Corporate Debtor on the first date of default itself although it is his legal right as provided in the Code and the law. From Schedule II of the Loan Account, it is seen that there has been moratorium on payment of principal amount and only on 19.09.2017 the principal amount became due and payable - the Appellant could have taken legal recourse under the Code either on 19.08.2018 or on subsequent defaults or when entire loan became due, payable and defaulted i.e. on 28.03.2022. It is noted that in the present case, the Appellant has chosen 28.03.2022 as date of default in the application filed under Section 7 of the Code before the Adjudicating Authority. The Corporate Debtor defaulted the payment of the instalment for the month of July 2018 which was due and payable on 19.08.2018 which could be treated as an event of default in terms of Clause 12.1.1 of the Loan Agreement i.e., non-payment according to which, if the borrower ( Corporate Debtor ) does not pay by the due date(s) the borrower s dues or part thereof and/ or any amount payable pursuant to loan document, the same will be treated as event of non- payment. Similarly, Clause 12.2 of the Loan Agreement describes consequence of an event of default. It is therefore, clear the date of default could have been taken as 19.08.2018 in terms of various clauses of Loan Agreement - The Financial Creditor gets rights for filing an Application under Section 7 of the Code when the right to apply against default accrues and for every default there is a fresh period of limitation. It seems that the Adjudicating Authority has taken the date of 09.05.2016 as the date of default presuming that the first instalment was due, payable and not paid and therefore date of default became 09.05.2016. Either of the date i.e. 19.08.2018 i.e., the date on which the instalment was due, resulting into default payable and not paid or the date of 28.03.2022 when the entire loan account stood defaulted in terms of Loan Recall Notice dated 25.03.2022, would have been and is covered within the limitation period as discussed in the preceding paragraphs. The Adjudicating Authority clearly erred in taking the date of default as 09.05.2016 for computing the limitation for filing the Section 7 Application - this Appellate Tribunal has no hesitation in holding that the impugned order was incorrect and is set aside. Appeal allowed.

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• 2023 (5) TMI 982
  Initiation of CIRP - NCLT dismissed the application on the ground of period of limitation - relevant date - date of acknowledgement of debt by email - Operational Creditors - Corporate Debtor did not issue any notice of dispute - HELD THAT:- The Corporate Debtor in their reply dated 09.03.2020 to the Section 9 application filed by the Appellant had raised several objections, inter-alia, non-maintainability arising out of the bar created by the Indian Partnership Act, 1932; invalidity of demand notice being in Form III and for not containing date of default; non-receipt of demand notice and non-service with the Information Utility; defective issue of demand notice; etc. - on the issue of limitation, it held that the Section 9 application has not been filed within three years from date of default and in the absence of sufficient material on record to establish extension of limitation period, Section 9 application was dismissed. A plain reading of the provision of Section 4 of IT Act, makes it clear that the intent of Section 4 of the IT Act is to allow any information which can be transmitted on paper by physical mode to also be henceforth transmitted in electronic form too. In other words, this section recognizes that a document sent and received electronically shall be deemed to have complied with the requirement of sending information in writing - the Adjudicating Authority is agreed upon that merely because a document is sent via electronic mode instead of physical mode, the legal and mandatory requirements of authentication of documents will not change and cannot be dispensed away. Section 18 of the Limitation Act also specifies that the acknowledgment should be in writing and signed by the party against whom such right is claimed though of course the word sign or signed has not been defined in the said section. This requirement is required to be met irrespective of whether it is in electronic or in physical form. Merely because a document is sent via e-mail, the mandatory requirements of Section 18 cannot be exempted - the Adjudicating Authority only exercises summary jurisdiction in admitting or rejecting the Application under Section 9 of the Code. In view of their limited jurisdiction, disputes of authenticity of the statement of accounts annexed to an email, cannot be adjudicated by the Adjudicating Authority. Hence, the Adjudicating Authority cannot be found to have committed any error in not entering into the issue of authenticity of the statement of accounts. Given the fact that the debt has not been acknowledged; that a dispute has also been raised on the quality of goods supplied in the Section 9 application and that the veracity of statement of accounts contained in the form of external attachment to the main body of the email has been questioned, we are persuaded to believe that the email of 05.05.2017 cannot be viewed as an acknowledgment of liability on the part of the Corporate Debtor and hence cannot help in extending the period of limitation. There are no merit in the submissions raised by the Learned Counsel for the Appellant to warrant any interference in the impugned order. The Adjudicating Authority did not commit any error in rejecting the Section 9 application filed by the Appellant on grounds of having been barred by limitation. There is no merit in the appeal - Appeal dismissed.

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• 2023 (5) TMI 981
  Liquidation of Corporate Debtor - Vacation of premises - direction to Respondent to co-operate with the Liquidator to show the said premise to the prospective investors - HELD THAT:- Reliance placed on judgment passed by three Members Bench of this Tribunal in the case of M/S. JHANVI RAJPAL AUTOMOTIVE PVT. LTD. VERSUS VERSUS R.P. OF RAJPAL ABHIKARAN PVT. LTD., AGARWAL REAL CITY PVT. LTD. [ 2023 (1) TMI 301 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ]. In the above case, lease Agreement was not renewed and also no dispute that assets in question is owned by the Corporate Debtor and this Appellate Tribunal laid down that Adjudicating Authority has rightly allowed the Application filed by the RP directing the Appellant to vacate from the premises so that Resolution Plan which has been approved can be implemented. We thus do not find any merit in the Appeal, the Appeal is dismissed. The aforesaid case was challenged before the Hon ble Supreme Court in M/S. JHANVI RAJPAL AUTOMOTIVE PVT. LTD. VERSUS R.P. OF RAJPAL ABHIKARAN PVT. LTD. ANR. [ 2023 (2) TMI 1133 - SC ORDER ] and the Hon ble Supreme Court upheld the order passed by three Members Bench of this Tribunal. In the present case also, Agreement was expired and further, Respondent is paying rent for the Tenanted Premises as per mutual understanding between the parties. The said internal communication email dated 31.07.2019 (at page 106 of the Appeal) of Corporate Debtor clearly stated that New Agreement will not be renewed and Corporate Debtor will raise invoice with 5% increase in monthly rent. Contrary to the above, the Tribunal noted the fact in the impugned order is of the dispute relating to title of the Corporate Debtor. Therefore, the Tribunal permitted the liquidator to file eviction suit in the proper Court. The Adjudicating Authority has failed to notice the above judgment passed by three Member Bench of NCLAT which was upheld by Hon ble Supreme Court. The three Member Bench of NCLAT judgment is binding. In view of the fact, the impugned order dated 10.02.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench, Court 1) is hereby set aside and the matter is remanded back to the Adjudicating Authority with a request to pass afresh order in accordance with law at an early date.

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• 2023 (5) TMI 980
  Initiation of CIRP - NCLT admitted the application filed u/s 7 - status / locus of Debenture Trustee - Corporate Debtor failed to make repayment of its dues - assignment of debt to assignment holder - admission of debt and default - HELD THAT:- The present is a case where in the reply filed before the Adjudicating Authority, the Corporate Debtor did not dispute the debt and default. In the reply filed by the Corporate Debtor, it was mentioned that due to COVID-19 there was standstill in the business activities of the Corporate Debtor. The debt and default was an admitted position in the reply filed by the Corporate Debtor. The submission which is much pressed by learned counsel for the Appellant is that the Respondent No.1 had no locus to issue Acceleration Notice dated 26.07.2022. It is submitted that it was only Debenture Trustee who could have taken action in event of default, as per the Debenture Trustee Document. In the facts of the present case, there is no dispute that event of default took place. After looking into the different clauses of the Debenture Trust Document and Inter-Creditor Agreement, it is clear that the Financial Creditor was fully entitled to issue Acceleration Notice issued on 26.07.2022. The Debenture Trustee having already issued Notice of Demand on 13.07.2022, the argument of the Appellant that action has to be taken by Debenture Trustee loses its significance - there are substance in submission of learned counsel for the Appellant that the Financial Creditor was not entitled to issue Acceleration Notice dated 26.07.2022. We do not find any infirmity in the initiating proceeding against the Corporate Debtor under Section 7, there being debt and default undisputed and clearly proved by the fact as noted above. The Financial Creditor stepped in the shoes of the Debenture Holder on the basis of Assignment Deed dated 04.03.2021. There are no substance in grounds raised by the Appellant to interfere with the impugned order - appeal dismissed.

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• 2023 (5) TMI 979
  Initiation of CIRP - NCLT rejected the application - Scope of the agreement between parties for use of office space - Unilateral Termination of agreement before the specified date - Corporate Debtor failed to make repayment of its dues - Operational Creditors - non-registered, non-stamped document - existence of debt and dispute or not - HELD THAT:- Clause 1.4 of agreement deals with cancellation and clause provides that client that is the Corporate Debtor can terminate agreement with 30 days notice after the lock in period whereas there are restriction on the services provided in the agreement. The present is a case where in pursuance of the agreement, Corporate Debtor took the possession of the premises. When we look into the agreement, there is a number of services, site plan containing the various facilities which has to be provided by the service provider to the corporate debtor like meeting room, writing wall, work stations, etc. - The Operational Creditor thereafter issued notices to the Corporate Debtor demanding payment in respect of unpaid operational debt and ultimately a Demand Notice under Section 8 was issued on 18th August, 2020. Whether the debt claimed by the Appellant was an Operational Debt? - HELD THAT:- The Adjudicating Authority committed error in holding that the debt claimed by the Operational Creditor was not Operational Debt. The debt claimed by the Appellant is clearly a claim within the meaning of IBC and on default being committed by the Corporate Debtor the debt became due and Appellant was fully entitled to initiate proceedings under Section 9 of the Code. Compulsorily registrable agreement - HELD THAT:- The nature of Agreement is where no interest, title or right on property immovable or movable or any other form of right to assert any claim save and except availing services being run by the Appellant. There being no right, title or interest in the agreement created in favour of the Corporate Debtor, the Agreement was not compulsorily registrable under Section 17(b) of the Registration Act - it is clear that agreement does not purport or operate to create, declare, assign, limit or extinguish any right, title or interest in immovable or movable property. The Agreement was clearly not required to be compulsorily registered under Section 17(b). The above determination by the Adjudicating Authority was also fallacious. Agreement was originally engrossed on an unstamped paper or not - HELD THAT:- On looking into the Reply, stand taken by the Corporate Debtor is clear that Corporate Debtor clearly admits that in the Agreement in the stamp paper there are no signatures of both the parties whereas in the entire reply the Corporate Debtor does not deny execution of the agreement between the parties. The Agreement was termed by the Corporate Debtor as a lease agreement. The Reply of the Corporate Debtor and the fact that Corporate Debtor in pursuance of the Agreement took the possession of the premises, also paid monthly office fee upto July 2019 clearly indicate that agreement dated 17th August, 2018 was given effect to. When the Corporate Debtor has accepted the agreement and acted upon by using the premises and have utilized services in the office space provided by the Appellant, even accepting the argument of Learned Counsel for the Respondent that it was not duly stamped, do not negate and do not oblige the Adjudicating Authority to ignore the agreement for finding out as to whether the claim made by the Appellant was an Operational Debt - In the present case, when Agreement was admittedly executed between the parties, signed by both the parties and acted upon, mere fact that it not being engrossed on stamped papers shall have no adverse consequence on the claim of the Operational Creditor. The Adjudicating Authority erred in determining the 3rd point against the operational creditor. The Appellant has proved that debt claimed by the Appellant in Section 9 Application was operational debt. Further the agreement dated 17th August, 2018 was not compulsorily registrable and agreement having not been executed on Rs. 100 Stamp Paper was inconsequential, the agreement having been acted upon and the Corporate Debtor having entered into possession of the premises in pursuance of the Agreement. Appeal allowed.

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• 2023 (5) TMI 978
  CIRP - Application filed for intervention of home buyers dismissed - dismissal on the ground that Appellant had no locus to maintain the said application at this stage when the proceedings are pending and no order of admission has been passed - CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors. Whether an application like the one in hand could have been maintained at the instance of the Appellant before the admission of the application under Section 7 of the Code? - HELD THAT:- There is no dispute that the Applicants/Appellants are the homebuyers who have booked their units in the said project being developed by the Corporate Debtor. However, as submitted by counsel for Respondent, the units which has been booked by the Appellants are in the Tower Joy and Spark which is far beyond completion. It is further the case of the Respondent that there are large number of homebuyers and if all of them keep on filing the application before the order of admission then the timeline which is provided for the purpose of pursuing the application filed under Section 7 of the Code shall be adversely affected as also the interest of the Financial Creditor who has initiated the proceedings. The order passed in the case of SURINDER PAL SINGH ORS. VERSUS SPAZE TOWERS PVT. LTD. [ 2023 (5) TMI 928 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI] , this court was dealing with an application which was filed by homebuyer as an Intervener in the proceedings under Section 7 of the Code and held that the Application under Section 7 is not maintainable till the application under Section 7 is admitted. However, a window was kept open for the Applicant by observing thus it shall be open to the Appellant to file appropriate fresh application in the event application is admitted under Section 7 IBC. In the case of PRAYAG POLYTECH PVT. LTD. VERSUS HIND TRADEX LTD. [ 2019 (8) TMI 1867 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] it was held that In that view of the matter, there is no requirement for intervention of any Directors or shareholders of the Financial Creditor or any other party before admission of Application under Section 7 of IBC. If the application is admitted, it would be open to any aggrieved party to move before this Appellate Tribunal. - In the case of Shrem Residency Pvt. Ltd. [ 2023 (1) TMI 551 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ] this court has held that the only thing which is to be taken into consideration at the time of admission of section 7 of the Code that there is a debt and default. There are no merit in the present appeal and the same is hereby dismissed.

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• Service Tax

• 2023 (5) TMI 977
  Maintainability of writ petition - Alternative remedy of appeal - Erroneous order of the First Appellate Authority - Validity of SCN - Recovery of service tax - health care services - suppression of facts and non-filing of return - invocation of extended period of limitation - petitioner contends that the show-cause notice did not put the petitioner no. 1 to clear notice of the intention of the respondent no. 2, and that the impugned order was passed on different considerations, which were not disclosed in the show-cause notice - HELD THAT:- On a perusal of the impugned order-in-original, it cannot be said that the points urged by the petitioners in their reply were not considered. The respondent no. 2, inter alia, had dealt with the issue of limitation; discussed the effect of non-disclosure of correct taxable value of return and that in return the petitioners had declared values pertaining to their service tax liability on reverse charge basis only; gave its justification why the petitioners were liable to pay service tax despite the two exemption notifications referred to by the petitioners. Moreover, although the respondent no. 2 took note of the copies of audited financial statement for financial year 2016-17 and ST-3 return filed for the period of April, 2016 to September, 2016 and October, 2016 to March, 2017 it was also observed to the effect that the petitioners had not responded to the communications made before issuing the show-cause notice to ascertain their tax liability. Accordingly, it was held that failure to disclose position in conformity with the position in balance sheet amounted to suppression of correct taxable value and accordingly, the tax liability was confirmed. Thus, in the opinion of the Court, all the points urged by the learned counsel for the petitioners before us has been dealt with by the respondent no. 2 in the impugned order. Therefore, in the considered opinion of the Court, the impugned order-in-appeal may be erroneous, but it cannot be said that the order was wholly without jurisdiction. It is not in dispute that opportunity of personal hearing was given by the respondent no. 2. The writ petition is not for enforcement of fundamental rights or to challenge the vires of any statute. The Court is inclined to restrain itself from entertaining this writ petition in view of alternative and efficacious remedy available to the petitioners under the Goods and Services Tax Act, 2017 before the Customs, Central Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkata. It has not been disputed that the said appellate tribunal is not functional - this writ petition is dismissed at the motion stage without issuing notice to the respondents.

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• 2023 (5) TMI 976
  Rejection of petitioner s application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - rejection on the ground of ineligibility with the remarks, incomplete and selective declaration - amount as mentioned by the petitioner, did not cover the entire details of the duty and the amount deposited by the petitioner - petitioner was neither issued any notice nor afforded any opportunity to be heard by the designated committee before its application was rejected - violation of principles of natural justice. HELD THAT:- The procedure as contemplated under Section 127 of Finance Act conformed to the principles of natural justice and included an opportunity of affording the declarant an opportunity to be heard where there was a difference in the amount as computed by the declarant and the designated committee - It is clear that Rule 6(3) of the Rules also mandated that an opportunity to be heard be afforded to the declarant in case the amount of duty estimated by the declarant fell short of the estimate made by the designated committee. In this case, the petitioner was neither issued any notice nor afforded any opportunity to be heard by the designated committee before its application was rejected. The rejection of the petitioner s application was communicated online and the only reason stated for rejection discernable from the remarks is: incomplete and selective declaration . There is no dispute that the petitioner had deposited the entire duty in respect of the four audit objections: the amount of ₹3,16,946/- on account of the alleged wrongful availment of cess; short payment of service tax of ₹92,385/- ascertained on reconciliation; wrongful availment of the Cenvat Credit amounting to ₹8,05,654/- on certain services rent a cab, medical insurance and hotel accommodation; and alleged wrongful availment of the Cenvat Credit amounting to ₹82,81,915/- proportionate to exempted income. In terms of the SVLDR Scheme, the petitioner was entitled to waiver of the interest and penalty on deposit of the tax dues. Undisputedly, the petitioner had deposited the tax dues prior to 31.03.2019. Thus, there was no amount payable after the tax relief - The only controversy is that the petitioner had declared the duty amount as ₹82,81,915/- and had also indicated that the same amount had been deposited. The error on the part of the petitioner is that it did not include the duty amount, which related to the other three audit objections in the column of duty details and the duty paid. Clearly, this error was a curable one and did not affect the estimation of the amount payable after availing the benefit under the SVLDR Scheme. The petitioner had, in the course of proceedings prior to the SVLDR Scheme coming into force, paid the tax in respect of the said audit observations and had sought waiver of interest and penalty, which it claimed, was acceded to by the concerned Additional Commissioner, CGST. In Thought Blurb v. Union of India Ors. [ 2020 (10) TMI 1135 - BOMBAY HIGH COURT] , the Division Bench of the Bombay High Court had examined the legislative intent of the SVLDR Scheme and had held that the summary rejection of the application without affording the declarant an opportunity to be heard would violate the principles of natural justice. In the present case, the petitioner s application has been rejected in violation of the principles of natural justice. As noted above, the petitioner had already deposited the tax dues. It had also made a request for waiver of interest and penalty prior to the SVLDR Scheme coming into force. On respondent no. 2 pursuing the petitioner to pay the interest and penalty, it had unequivocally expressed its intention to apply under the SVLDR Scheme. It had subsequently done so. Concededly, in terms of the SVLDR Scheme, the petitioner would be entitled to the waiver of interest and penalty as it had paid the requisite tax prior to the stipulated date - the legislative intent to enact the SVLDR Scheme was to include all taxpayers for offloading the baggage of disputes. All taxpayers, except those which were specifically excluded, were entitled to avail the benefit of the said Scheme. The SVLDR Scheme also covered cases where no disputes were pending and enabled the taxpayers to voluntarily pay taxes and avail amnesty under the SVLDR Scheme. The impugned order rejecting the petitioner s declaration under the SVLDR Scheme is set aside and the designated authority is directed to process the petitioner s declaration in accordance with the SVLDR Scheme as expeditiously as possible, and preferably within a period of eight weeks from today - petition allowed.

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• 2023 (5) TMI 975
  Refund of service tax paid under a mistake of fact and law - applicability of provisions of section 11B of Excise Act, 1944 for claiming refund before the expiry of one year from the relevant date - applicability of principles of unjust enrichment - manpower recruitment or supply agency services - reverse charge mechanism - HELD THAT:- Provisions of section 11-B of the Excise Act relating to limitation would not be applicable in case where payment was made purely on account of a mistake in understanding the Notification. In Commissioner of Central Excise (Appeals), Bangalore vs KVR Construction [ 2012 (7) TMI 22 - KARNATAKA HIGH COURT ], service tax was paid by the assessee under a mistaken notion that it was liable to pay, though it was not liable to pay by virtue of a Circular dated 17 September, 2004 and, accordingly, a refund was sought. The Karnataka High Court examined whether section 11-B of the Excise Act would be applicable if the amount was paid under a mistaken impression that it was liable to be paid. The High Court found that section 11- B of the Excise Act refers to a claim for refund of duty of excise only and does not refer to any other amount collected without authority of law. Thus, it was held that section 11-B of the Excise Act would not be applicable. The Supreme Court, on 11 July, 2011, dismissed the Special Leave Petition filed by the Department to assail the aforesaid judgment of the Karnataka High Court. There is no merit in this appeal filed by the Department - Appeal dismissed.

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• 2023 (5) TMI 974
  Rejection of SVLDRS Application - rejection on the ground that while the Appellant has opted to take advantage of SVLDR Scheme, they did not Appear in the Personal Hearing granted when the Department has raised the demand for balance of Rs.23,002/- - HELD THAT:- This is a peculiar case where the Appellant had paid the entire amount of confirmed demand of Rs.17,43,346/- along with interest of Rs.5,98,748/- and also had made some more pre-deposit at the time of filing the Appeal before the Tribunal. Under the SVLDR Scheme for the amount confirmed against this Appellant, mere payment of about Rs.6,00,000/-would have been enough to get the benefit of this scheme. The Department failed to note that at the very first stage they have paid Rs.10,00,000/- whereas only Rs.5,00,000 was appropriated in the OIO and also noted as deposited by the Appellant in the SVLDRS-2, because of which the Appellant was denied the benefit of the Scheme. As the Appellant is not contesting the Service Tax and interest and pre-deposit already paid, the same are not part of the present Appeal for the present decision. The penalties imposed are set aside. No further amount is recoverable from the Appellant. No refund accrues to the appellant - appeal disposed off.

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• 2023 (5) TMI 971
  Short payment of service tax - Cross utilization of CENVAT Credit - input services - HELD THAT:- With effect from 2004 when Cenvat Credit Rules, 2004 were issued, it was stated clearly that cross utilization of Cenvat credit on inputs, input services is being allowed for payment of central excise duty and service tax. That being so, there are no merits in the submissions made by the Revenue that utilization of Cenvat credit for payment of output service tax liability of the appellant can be faulted with. The issue in the case of M/S ICICI PRUDENTIAL ASSET MANAGEMENT CO. LTD. VERSUS COMMISSIONER OF C.G. ST., MUMBAI EAST [ 2019 (11) TMI 1466 - CESTAT MUMBAI] was also not in respect of such cross utilization. In para 8 of the said order, the issue is in respect of denial of Cenvat credit and not of the utilization of the said credit. There are no merits in the impugned order, set aside the same and allow the appeal.

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• Central Excise

• 2023 (5) TMI 973
  CENVAT Credit - input services - denial of credit on the ground that some of the invoices raised by the service provider were showing the address of Appellant s registered office at Kolkata - suppression of facts or not - Extended period of Limitation - HELD THAT:- Admittedly there is no dispute that the services were received by the Appellant in their factory premises as is established from the copies of the sample Invoices provided by the Appellant. The Tribunals have been consistently holding that when the service is received and utilized in the factory and the invoices are raised in the address of the Head office, the Cenvat Credit cannot be denied. In the case of COMMISSIONER OF CUSTOMS C. EX., VAPI VERSUS DNH SPINNERS [ 2009 (7) TMI 130 - CESTAT, AHMEDABAD ], the Tribunal has held The Revenue in their grounds has raised only technical grounds that the documents were not in the name of the assessee s factory situated at Silvassa but the same were issued in the name of the head office of the assessee situated at Mumbai. However, I find that there is otherwise no dispute about the input services received by the assessee. The substantive benefit cannot be denied on the procedural grounds. I do not find any infirmity in the view adopted by Commissioner (Appeals) and accordingly reject the appeal filed by the Revenue. In the case of PAREKH PLAST (INDIA) PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, VAPI [ 2011 (6) TMI 595 - CESTAT, AHMEDABAD ], the Tribunal has held the denial on the sole ground of invoices being in the name of head office, is not justified. Since the issue is squarely covered by the cited case laws, appeal is allowed.

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• 2023 (5) TMI 972
  100% EOU - Clandestine Removal/suppression of production - non-speaking order - violation of principles of natural justice - HELD THAT:- It appears that the entire order has been passed without considering any submissions made by the appellant, which runs into 83 pages. Though the statements of various persons have been relied upon by the Commissioner, specifically of Shri Kamlesh S. Patil, his cross-examination though asked for has not been allowed or rejected in the impugned order. The impugned order is totally a non-speaking order passed in violation of the principles of natural justice and cannot be sustained. Adjudicating authority is obligated under law to consider the submissions made in response to the show cause notice and any order passed without consideration of the submissions is in violation of the principles of natural justice and needs to be set aside. Matter is remanded back to the original authority for passing a speaking order taking into consideration the submissions made in reply to the show cause notice, including the request for cross-examination of Shri Kamlesh S. Patil - Appeal allowed by way of remand.

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• CST, VAT & Sales Tax

• 2023 (5) TMI 970
  Classification of goods sold - photo identity cards - to be classified under Entry 71 of Schedule III to the Karnataka Value Added Tax Act, 2003 or under the residuary category under Section 4(1)(b)(iii) of the Karnataka Value Added Tax Act, 2003? - only the specific goods mentioned under Entry 71 of Schedule III to the Karnataka Value Added Tax Act, 2003 merit classification under the said Entry as 'printed material' as well as 'stationery articles' or not? HELD THAT:- The first part of Entry 71 of the Schedule III to the KVAT Act specifies printed materials other than books meant for reading. The Tariff item No. 49.01 of the CET Act includes other products of the printing industry - For the purpose of Chapter 49 of the CET Act, printed also means reproduced by means of a duplicating machine, produced under the control of a computer, embossed, photographed, photocopies, thermocopied or typewritten. It is relevant to note that, photo identity cards are also produced by using a computer, holograms are embossed, and photographs affixed. Therefore, a photo identity card falls within the definition of other products of printing industry under Tariff item No. 49.01 of the CET Act. The Parliament has excluded only certain items and Photo identity card is not one such excluded item. It is settled that if an item is cleared under a particular tariff, by the Central Excise Authority, the same is not disputable by the VAT Authorities - reference can be made to decision in the case of SAMSUNG INDIA ELECTRONICS PVT LTD VERSUS STATE OF GUJARAT [ 2020 (2) TMI 1247 - GUJARAT HIGH COURT ]. The principal contention urged by the Revenue that photo identity cards do not fall under the Entry 71 of Schedule III to the KVAT Act, is untenable because, the KVAT Authority is bound by the classification accepted by the Central Excise Authority - the photo identity cards fall under Entry 71 of Schedule III to the KVAT Act under the category of printed materials other than books meant for reading, and accordingly, taxable at 5%. The revision petition is allowed.

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• 2023 (5) TMI 969
  Validity of SCN demanding VAT - charges collected for supplying and installation of goods in respect of internet and cable services - respondent was registered during the periods in question - taxability of charges collected by the Respondent for supplying and installation of goods in respect of internet and cable services provide by the Respondent to its customers - HELD THAT:- The electromagnetic waves are not goods and waves are merely carriers of information and are not consumed by the customers in any form. Therefore, in the transaction between the cable service provider and the customer there is no sale of any tangible goods. Hence, the transaction is not taxable. The KAT has rightly held that the notices sent by AO has merely made a bald allegation that the assessee had supplied goods without referring to the particular goods or the sale transaction. Thus, the notice proposing the demand by itself was vague and contained no legal basis for proposing the demand. It has further held that the companies may receive installation charges from the customers for providing cable internet services. From such a contract it needs to be ascertained whether there is an implied transfer of cable to the customer or whether other service provider may also use the same cable for internet signal supply in which case, a deemed transfer of property can be ascertained. It is settled that strict interpretation of the words used in taxing statutes is warranted. No tax can be levied by implication, unless the subject falls within the four corners of statutory provision of the levy. There are no error in the findings recorded by the KAT - petition dismissed.

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