Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 4, 2023
Case Laws in this Newsletter:
GST
Income Tax
Corporate Laws
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Seeking remission of amount in instalments (admitted liability) - Recovery of arrears in payment of admitted tax - In this case, while the petitioner has filed returns it has not paid the tax and hence its barred from obtaining benefit u/s 80 of the GST Act - HC
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Condonation of delay in filing of appeal - Cancellation of GST registration of petitioner - The appeal of petitioner has been filed after a period of 6 months, over and above the statutory limitation of 90 + 30 days. - The dismissal of the appeal by R1 is seen to be in order. - HC
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Allowability of Input Tax Credit - construction of shed using pre-fabricated technology - The pre-fabricated movable components joined to make a structure do not constitute as separate property of the ‘PFS’. They are building blocks applied to a civil structure attached to the land to construct a complete ‘PFS’. They have no separate existence from the ‘PFS’. - ‘PFS’ being constructed is classified as an "immovable property" - ITC is not available - AAR
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Classification of goods - Aluminium composite penal/sheet - The ACPs are sandwich panels comprising two aluminium sheets bonded to a non-aluminium core. The combined thickness of the aluminium sheets in ACP manufactured by the applicant exceeds 0.2mm - As these sandwich panels attribute most of their characteristics to the two aluminium sheets, they have to be classified under the tariff heading 7606 as per Rule 3(b) of the General Rules for the interpretation of the Customs Import Tariff Schedule - AAR
Income Tax
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Validity of Settlement Commission order - Settlement Commission passed an order to comply with the directions of the High Court to dispose of the application on or before 31.03.2008. If that be so, the High Court in fact ought to have remitted the matter back to the Settlement Commission to pass a fresh order in accordance with law and on merits after following due procedure as required under Section 245D(4) of the Act. - Matter restored back to the interim Board with a request that the matter to be taken up expeditiously - SC
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Disallowance of claim of deduction @ 50% u/s 57(iv) - interest received on enhanced compensation - on the basis of the overriding provision of Section 56(2)(viii) read with Section 57(iv) of the Act, we agree that the assessee is entitled to the statutory deduction of 50% u/s 57(iv) of the Act - AT
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Validity of order passed u/s. 201(1)/201(1A) - period of limitation - expiry of two years from the end of the financial year in which TDS statement was filed - As pertinent to point out that the assessee has not filed its quarterly statement before us for the purpose of considering the limitation period u/s.201(3) of the Act which specified “two years from the end of the financial year in which the statement is filed”. - Matter restored back - AT
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Deduction u/s. 80IB(10) - declaration of additional income - No doubt there has been suppression of the actual income for the purpose of evading tax. Nevertheless, various decisions of the higher forums have held that the assessee is entitled to claim deduction u/s. 80IB(10) on additional income declared by the assessee subsequent to the search proceedings. - AT
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Deduction u/s 54B - LTCG - Assessee technically may have defaulted in not filing the return under section 139(4). But, however, utilized the capital gains for purchase of property before the extended due date under section 139(4). The contention of the revenue that the deposit in the scheme should have been made before the initial due date and not the extended due date is an untenable contention. - AT
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Disallowance of interest expense u/s 57 - the assessee failed to prove the nexus between the interest income offered in the return of interest expense made. - Addition confirmed - AT
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Revision u/s 263 - depreciation on goodwill claimed by the amalgamated company - The amalgamating company has not claimed any depreciation. The burden cast upon the Assessing Officer to call for the details and examine the same. AO has totally ignored the artificial creation of goodwill for claiming depreciation - the assessment order passed by the AO is erroneous and prejudicial to the interest of Revenue - AT
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Cash deposit in the bank - additions as the unexplained income - When the amount has already been considered when preparing its return of income for the relevant assessment year, to treat the cash deposit in the bank as unexplained income of the assessee is nothing but double addition, which is not also permissible - AT
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Deduction u/s 80IA(4) - profit-linked incentive - infrastructural facility forms part of the Port - Assessee had obtained the permission from Custom Authorities for construction and operation of Mechanised Coal Handling System for which the Commissioner of Central Excise, Customs and Service Tax, Visakhapatnam - II Commissionerate, Visakhapatnam has accorded the permission vide letter dated 01.02.2013. The said permission is deemed to be an approval granted by the competent authority of the Central Government. - AT
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TP Adjustment - ALP adjustment on account of profit mark-up - It cannot be expected that the parent organization supply support services without charging anything for such services rendered. Hence, we hold that the markup of 5% is sufficient to recoup the expenditure involved by the AE in exploration, inspection, testing and finalization of the suitable software. - AT
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Unexplained cash credit u/s.68 - it could be safely concluded that assessee company had duly discharged its complete onus with regard to Section 68 of the Act. Hence, there could not be any addition u/s.68 of the Act even on merits on protective basis or on substantive basis. - AT
PMLA
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Money Laundering - proceeds of crime - Scheduled Offences - Seeking quashing of FIR - In the instant case, the direct involvement of the petitioners in the activities connected with the proceeds of crime has been alleged, along with the material narrated in the complaint which would require a trial to be conducted by the competent court. - The interim relief granted earlier stands vacated forthwith - petition dismissed. - SC
Service Tax
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Demand of service tax and Penalty u/s 78 of FA - Classification of services - Cargo Handling Service/Business Auxiliary Service, or not - It is noticed that the contracts are not in the nature of ‘Cargo Handling’ but are in the nature of labour contract on piece rate basis. Thus, classification of these services under ‘Cargo Handling Service’ cannot be sustained. - AT
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Cash Refund of the accumulated CENVAT credit - Reversal of credit migrated to GST (transitional credit) - In absence of any specific provision, subsequent debit under the IGST Act and rules made thereunder of the input tax credit, cannot be the circumstances to claim refund under Rule 5 of CENVAT Credit Rules, 2004 read with Notification No.27/2012-CE(NT). - AT
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Refund claim - payments made under protest - Time Limitation - the Appellant had challenged the levy of duty and therefore, any payments made are deemed to be made under protest. His challenge against the demand was decided in favour of the Appellant which resulted in the refund claim - the refund claims filed by the Appellant is allowed. - AT
Central Excise
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Entitlement to interest on delay payment of refund of pre-deposit - since the amount was deposited under Section 35F of the Central Excise Act, even a simple application could be made for claiming the refund and the refund was required to be returned along with interest - the department is liable to make payment of interest after the expiry of three months from the date the refund becomes due - HC
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CENVAT Credit - input services - Works Contract Services in so far as they are used for laying of foundation or making of structure for support of capital goods - even though services of construction of building or civil structure are falling under the exclusion clause but even if similar service is used for renovation and modernisation of existing factory, the credit is admissible. The exclusion applies only in respect of such service as specified therein which are used for initial setting of the factory. - HC
VAT
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Binding nature of Tribunal Order - Principle of “consistency” - Not only the Tribunal but all the Authorities subordinate to it are bound to follow and comply with the law laid down by the Tribunal. This is necessary to maintain judicial discipline and avoid uncertainty in law. The Tribunal may, in appropriate cases, take a view different from the one taken by it earlier if there is change in law or the fact situation in the context whereof the law was declared by it earlier. The Assessing Authorities or the Statutory Appellate Authorities under the GST Act cannot and should not take a view on question of law contrary to the view taken by the Tribunal. - HC
Case Laws:
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GST
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2023 (5) TMI 130
Seeking interim order - HELD THAT:- There is no scope of passing any interim order in the matter and the issues involved require affidavits from the respondents for final adjudication. Let the respondents file affidavit in opposition within four weeks; reply thereto, if any, to be filed by the petitioner within two weeks thereafter - List the matter for final hearing in the monthly list of July, 2023.
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2023 (5) TMI 129
Maintainability of petition - availability of alternative remedy - no second appellate forum - petitioner has already deposited 10% of the demanded tax amount before the first appellate authority - rejection under sub-Section (1) of Section 107 of the Odisha Goods and Services Tax Act, 2017 - HELD THAT:- Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of four weeks from today, the rest of the demand shall remain stayed during the pendency of the writ petition. Application disposed off.
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2023 (5) TMI 128
Seeking remission of amount in instalments (admitted liability) - applicability of Section 80 of TNGST Act - Recovery of arrears in payment of admitted tax - Difference between Taxable value reported in GSTR-3B and GSTR-I - allegation as against the petitioner was that there had been sales suppression (outward supply) - HELD THAT:- The object of Section 80 is to benefit an assessee who approaches the Commissioner for a scheme of instalments. The sole exception to the application of Section 80 is in respect of admitted tax. The language in Section 80 is 'other than the amount due as per the liability self assessed in any return'. The petitioner thus argues that the form GSTR I does not comprise a return and thus the exclusion that is set out under Section 80 would not apply to it. This argument is rejected in limine for the following reasons. Section 2 (37) defines a return , to mean 'any return prescribed or otherwise required to be furnished by or under this Act or the Rules made thereunder'. Learned counsel for the petitioner also attempts to state that the impugned order under Section 80 has been passed even prior to the assessment having framed under Section 73. However, Section 80 makes no reference to an assessment at all. It only talks of turnover that has been self-assessed. In this case, the petitioner has filed the prescribed form setting forth the details of the outward supplies and the question of assessment does not arise. Incidentally, an assessment has also been made proximate to the proceedings for inspection when also the petitioner has acceded to the position that there has been suppression of sales - Accepting the argument of the petitioner would tantamount to a situation wherein a delinquent assessee, one who has omitted to file a return of monthly turnover but has filed the prescribed return reflecting taxable sales, is allowed the benefit under Section 80, of an instalment scheme. The object of Section 80 is only to benefit an assessee who has been complaint in effecting payment of the admitted tax. In this case, while the petitioner has filed returns it has not paid the tax and hence its barred from obtaining benefit under Section 80. The conclusion as aforesaid is supported by a decision of the Orissa High Court in the case of M/S. P.K. ORES PVT. LTD. @ M/S. PK MININGS PVT. LTD. VERSUS COMMISSIONER OF SALES TAX AND ANOTHER [ 2022 (5) TMI 1293 - ORISSA HIGH COURT] where it was held that Since interest is a part of tax and such tax being belated payment in respect of self-assessment, Section 80 of the OGST Act clearly excludes grant of instalment under the present fact-situation. However, the Commissioner is not conferred with power to allow such instalment in respect of amount due as per self-assessment return(s) furnished. Section 80 empowers the Commissioner to grant permission only to the taxable person to make payment of any amount due on instalment basis, on an application filed electronically in Form GST DRC-20 as prescribed under Rule 158. Petition dismissed.
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2023 (5) TMI 127
Condonation of delay in filing of appeal - Service of SCN - Petitioner was unaware of notice - Cancellation of GST registration of petitioner - Non-filing of statutory returns within the periods stipulated - HELD THAT:- The petitioner neither submitted any response nor appeared for a personal hearing that had been fixed in the aforesaid notice. Though there is a tentative statement of the petitioner that he had been unaware of the same, this Court has taken a view in MR. PANDIDORAI SETHUPATHI RAJA VERSUS THE SUPERINTENDENT OF CENTRAL TAX, CHENNAI [ 2022 (12) TMI 1028 - MADRAS HIGH COURT ] that service effected online in terms of Section 169(1)(d) of the Act, constitutes valid service. R2 thus proceeded to pass an order dated 10.01.2022 cancelling the registration of the petitioner, also uploaded on the same day in the official portal. The provisions of Section 107 of the Act deal with 'Appeal' and provide that an appeal be filed as against any order of the State Goods and Services Tax Act within a period of 90 days. There is a period of one month after the aforesaid period of 90 days, for which the authority may grant condonation, if convinced by the explanation set out by the assessee. The appeal of petitioner has been filed after a period of 6 months, over and above the statutory limitation of 90 + 30 days. The dismissal of the appeal by R1 is seen to be in order.
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2023 (5) TMI 126
Allowability of Input Tax Credit - construction of shed using pre-fabricated technology - section 17(5)(d) of the CGST/ TGST Act - HELD THAT:- As seen from the facts of the case the appellant erects a PFS using prefabricates structures. The overlying structure along with the land on which it erected constitutes the PFS . The PFS is meant for business activity and therefore is associated with the beneficial enjoyment of the land on which it is constructed - Reference may be made to clause 4(v) of the Circular No. 58/1/2002-CX dated 15/01/2002, where it is concluded that if items assembled or erected at site and attached by foundation to earth cannot be dismantled without substantial damage to its components and thus cannot be reassembled, then the items would not be considered as moveable and will, therefore, not be excisable goods. Clearly, the PFS cannot be relocated by unfixing the pre-fabricated structures alone. The dismantling of the floor, which is the most important component of the PFS , is not possible without substantial damage to the foundation. Section 17(5)(d) bars any taxpayer to avail the benefit of Input Tax Credit in case where the goods or services or both received by the said person are used for the construction of an immovable property even if it is in the course or furtherance of business - the contention of the applicant that the very reason why PFS is preferred over conventional building is that it offers movability doesn t make him eligible for availing ITC as per Section 17(5) of the CGST/TGST Act 2017. This is because when a PFS is assembled in a place the intention is definitely not to make it a movable structure but rather to conduct the business permanently beneath it i.e. on the RCC platform to which it is attached. PFS has more flexibility than the conventional structures in facilitating hassle-free shifting based on changing business requirements but that doesn t make it a movable structure as the intention of establishing shed or PFS is to continue business permanently on the RCC platform to which it is attached. The pre-fabricated movable components joined to make a structure do not constitute as separate property of the PFS . They are building blocks applied to a civil structure attached to the land to construct a complete PFS . They have no separate existence from the PFS . The PFS cannot be conceived without the beneficial enjoyment of the civil structure, which is an integral part of the property. On this basis, PFS being constructed is classified as an immovable property and credit is not admissible on inward supplies which include pre-fabricated movable components and also on inward Works contract services pertaining to PFS technology as per section 17(5)(c) and section 17(5)(d) of CGST/TGST Act 2017.
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2023 (5) TMI 125
Classification of goods - Rate of SGST and CGST applicable - Aluminium composite penal/sheet - covered under HSN 3920 or HSN 7610 or HSN 7606? - HELD THAT:- As the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, applies to the interpretation of the Notification No. 1/2017-Central Tax (Rate) dated 28th June, 2017. Therefore the ACPs should be classified as if they consisted of the material or component which gives them their essential character. Therefore the impugned product, being plastic core laminated with aluminium sheets, are not covered under Tariff Heading 3920 as the properties of ACPs are not due to the polyethylene sandwiched between the aluminium sheets but because of the aluminium sheets which are bonded by the polyethylene. The ACPs are sandwich panels comprising two aluminium sheets bonded to a non-aluminium core. Therefore the ACPs should be classified as if they consisted of the material or component which gives them their essential character i.e. Aluminium in the present case and not the polythene core which binds the both Aluminium panels in the ACPs. The goods made by applicant is not a structure or part of a structure. The goods at the time of manufacture are in the form of sheets of various dimensions/measurements. As declared by the applicant, the same has to be further cut to different size and shape depending on the shape and size of the structure as the ACPs made are not ready to be used as it is, but the same requires cutting, routing, drilling; etc. process and only then they can be used in structure or fabrication or as the case may be. Thus, the goods made by him are not ready to use in the form in which they are made but needs further processing such as cutting, grooving/routing, bending etc. before being put to use. Therefore, it cannot be said that the impugned goods in the form in which it is presented are prepared for use in structure . Thus, the claim of the applicant to classify the said goods under CTH 7610 is not correct. As seen from the ACP product information, the respective weight of aluminium and plastic are in the ratio of maximum 2.75 kgs per m2 of aluminium to maximum 5.75 kgs per m2 of plastic. The ACPs are sandwich panels comprising two aluminium sheets bonded to a non-aluminium core. The combined thickness of the aluminium sheets in ACP manufactured by the applicant exceeds 0.2mm - As these sandwich panels attribute most of their characteristics to the two aluminium sheets, they have to be classified under the tariff heading 7606 as per Rule 3(b) of the General Rules for the interpretation of the Customs Import Tariff Schedule read with Notification No.1/2017-Central Tax (Rate) dated 28th June, 2017. Thus, the subject product is covered under Heading 7606 of the GST Tariff and the rate of GST on the impugned product is 18% (9% each under CGST and SGST).
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Income Tax
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2023 (5) TMI 124
Validity of Settlement Commission order - Settlement Commission position to pass any appropriate order for proper settlement - Settlement Commission disposed of the proceedings and settled the undisclosed income and also passed an order that the CIT/AO may take such action as appropriate in respect of the matters, not placed before the Commission by the applicant, as per the provisions of Section 245F(4) - High Court [ 2017 (3) TMI 1918 - ALLAHABAD HIGH COURT ] has dismissed the writ petition on the ground that the order passed by the Settlement Commission was a nullity as the Settlement Commission itself observed that it was not practicable for the Commission to examine the records and investigate the case for proper Settlement and even giving adequate opportunity to the applicant and the Department, as laid down in Section 245D(4) of the Act is not practicable - HELD THAT:- Settlement Commission disposed of the application u/s 245, as such, the High Court is absolutely justified in observing that the order passed by the Settlement Commission is a nullity and cannot be said to be an order in the eye of law. Settlement Commission specifically observed that it is not practicable for the Commission to examine the records and investigate the case for proper Settlement and that even giving adequate opportunity to the applicant and the Department, as laid down in section 245D(4) is not practicable. Settlement Commission passed an order to comply with the directions of the High Court to dispose of the application on or before 31.03.2008. If that be so, the High Court in fact ought to have remitted the matter back to the Settlement Commission to pass a fresh order in accordance with law and on merits after following due procedure as required under Section 245D(4) of the Act. We set aside the impugned judgment and order passed by the High Court. We set aside the subsequent assessment/re-assessment order passed by the A.O, which was the subject-matter of writ petition before the High Court. We also set aside the order passed by the Settlement Commission and remand the matter to the Settlement Commission for a fresh decision. It is reported that the Settlement Commission has been wound up and the matters pending before the Settlement Commission are being adjudicated and decided by the interim Board constituted u/s 245AA - matter would be remitted to the interim Board with a request that the matter to be taken up expeditiously and would be preferably decided within a period of six months from the date of first hearing and a reasoned order would be passed. Present appeals are accordingly allowed. The matter is remitted to the Settlement Commission/interim Board for a fresh decision in accordance with law and on its own merits and after following due procedure as required under Section 245D.
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2023 (5) TMI 123
Disallowance of claim of deduction @ 50% u/s 57(iv) - interest received on enhanced compensation - AO disallowed the claim on ground that as the appellant is in the business of real estate, the interest income arising from compulsory acquisition of property is taxable under the head PGBP and not income from other sources - HELD THAT:- Section 56(2)(viii) provides that interest on enhanced compensation has to be taxed under the head Income from other source. We agree with Assessee that the deduction U/s 57(iv) is to be allowed and the ground on which revenue authorities have disallowed the claim being the assessee engaged in business is of no relevance. Thus, on the basis of the overriding provision of Section 56(2)(viii) read with Section 57(iv) of the Act, we agree that the assessee is entitled to the statutory deduction of 50% u/s 57(iv) of the Act. Hence we set aside the orders of the authorities below and decide the issue in favour of the Assessee.
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2023 (5) TMI 122
Delay in filling appeal - delay of 1005 days - inordinate delay in filing the appeal is attributable to the lapse on the part of the Courier Company, DTDC through which the assessee had dispatched the captioned appeals - HELD THAT:- As stated by the assessee itself that the assessee did not make any efforts to pursue the appeals till it decided to settle these appeals under VSV Scheme to end the litigation. It was only after passing of more than nearly two and half years that the assessee realised that its appeals have not been filed before the Tribunal. In our humble view, the assessee could have at least enquired with the Tribunal after sending the appeals via courier on 07.05.2018 whether it has received them or not and taken the appeal nos. Instead, the assesee chose to sit silently under the guise of bonafide belief that the Tribunal would have received its courier and appeals would have been filed. It is, therefore not convincing that the delay was caused due to the reasons beyond the control of the assessee. Even after filing the application for condonation of delay on 26.02.2021, none is appearing for / or on behalf of the assessee before the Tribunal on several dates fixed for hearing of the captioned appeals. The facts on record clearly indicate that delay was caused due to negligence, lethargy or inaction on the part of the assessee and therefore not worthy of condonation. Thus we decline to condone the inordinate delay of 1005 days in filing appeal before the Tribunal. Decided against assessee.
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2023 (5) TMI 121
Disallowance of Payment of Employee Stock Option Plan ('ESOP') expenses - Allowable revenue expenses u/s 37(1) or not? - HELD THAT:- On identical facts, the Bangalore Bench of the Tribunal in assessee s own case for assessment year 2015-2016 [ 2023 (4) TMI 793 - ITAT BANGALORE] had decided the ESOP expenses to be an allowable deduction. The Bangalore Bench of the Tribunal (supra) had followed the Co-ordinate Bench order in the case of Novo Nordisk India P. Ltd. [ 2013 (11) TMI 218 - ITAT BANGALORE] . Thus we hold that the expenditure towards ESOP is an allowable deduction u/s 37 - Decided in favour of assessee.
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2023 (5) TMI 120
Validity of order passed u/s. 201(1)/201(1A) - period of limitation - default of non deduction of taxes from LTC payments to the employees - HELD THAT:- Hon'ble Jurisdictional High Court in the case of DIT(IT) vs. Mahindra and Mahindra Ltd [ 2014 (7) TMI 265 - BOMBAY HIGH COURT] has held though section 201 of the Act has not prescribed any limitation period, declared the assessee to be an assessee in default, the Revenue will have to exercise the said powers within a reasonable time . This as per our understanding clearly undertakes that it applies to cases prior to 01.04.2010. The assessee s case will not come under the purview of this decision. Hence, we do not find any merit in the additional ground raised by the assessee. Therefore, the additional ground raised by the assessee is dismissed. Whether order u/s. 201(1) cannot be passed after the expiry of two years from the end of the financial year in which TDS statement was filed? - As pertinent to point out that the assessee has not filed its quarterly statement before us for the purpose of considering the limitation period u/s.201(3) of the Act which specified two years from the end of the financial year in which the statement is filed . In order to give a fair opportunity to the assessee, we hereby remand this issue back to the file of the ld. CIT(A) for adjudicating the issue that the impugned order was barred by limitation on the facts of the case. Hence, the appeal is set aside to the file of the ld. CIT(A). As we have not gone into the merits of the case, the other grounds of appeal raised by the assessee are kept open.
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2023 (5) TMI 119
Deduction u/s. 80IB(10) - assessee s declaration of additional income - assessee has failed to prove the source of the cash payment along with another cash payment - A.O. disallowed the claim of deduction u/s. 80IB(10) on the said additional income for the reason that the assessee has filed its original return of income after claiming the deduction u/s. 80IB(10) and since the unaccounted cash receipts has not been offered for tax and the assessee has also not claimed any deduction on the impugned cash receipts - HELD THAT:- As evident that the assessee has made a new claim on the additional income declared by the assessee, pursuant to the search and seizure action. If not for the search action, the additional income would not have been declared by the assessee and perhaps there will be no claim of deduction u/s. 80IB for the same. Assessee has failed to substantiate the fact that the impugned amount pertain to income of the project which was eligible for deduction u/s. 80IB - The assessee has failed to discharge its onus in proving the source of the impugned income. No doubt there has been suppression of the actual income for the purpose of evading tax. Nevertheless, various decisions of the higher forums have held that the assessee is entitled to claim deduction u/s. 80IB(10) on additional income declared by the assessee subsequent to the search proceedings. Assessee s case would not fall under those decisions for the reason that the assessee has failed to substantiate the source of income and whether it pertains to business income of the assessee was not corroborated by evidence. The decision relied upon by the assessee in the case of Sheth Developers (P) Ltd. [ 2012 (8) TMI 159 - BOMBAY HIGH COURT] does not hold good for the present case wherein the A.O. did not have a dispute that the undisclosed income was out of business activity of the assessee. Decided against assessee.
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2023 (5) TMI 118
Deduction u/s 54B - Disallowance made as no bills of expenses are in the name of assessee - As submitted assessee given the details of agricultural land purchased on sale of ancestral property - HELD THAT:- AO himself recorded that the bills are in the name of Chhaganbhai, who is the co-owner and is party to the sale deed dated 12.02.2014, which itself proves the agriculture activities. Moreover, keeping in view the size of land find no justification of such objection. Capital gain was not utilised before due date of filing return of income u/s 139 - As in Fatima Bai Vs ITO[ 2008 (10) TMI 563 - KARNATAKA HIGH COURT] while considering almost similar question of law, though, on the deduction under section 54, held that due date for filing return of income in the said case was 30.07.1998, the assessee was entitled to file return of income under section 139(4), which was within 31.03.1990. Assessee did not file the return within the extended due date, but filed the return on 27.2.1990. However, the assessee had utilized the entire capital gains by purchase of a house property within the stipulated period of section 54(2) i.e., before the extended due date for return under section 139. Assessee technically may have defaulted in not filing the return under section 139(4). But, however, utilized the capital gains for purchase of property before the extended due date under section 139(4). The contention of the revenue that the deposit in the scheme should have been made before the initial due date and not the extended due date is an untenable contention. In view taken by Gauhati High Court in CIT Vs Rajesh Kumar Jalan [ 2006 (8) TMI 126 - GAUHATI HIGH COURT] wherein it was held that time limit for deposit under the scheme or utilization can be made before due date for filing return under section 139(4). Thus, in view of the legal position, the second objection of the assessing officer also not tenable. Nature of land recorded on the purchase deed is bin Kheti premium patra land - We find merit in the submissions of the ld AR for the assessee that land purchased by assessee is agriculture land and can be used as NA (non-agriculture) subject to premium of payment, which means conditional permission was granted but the land was not converted to NA. Thus, find merit in the submission that nature of land purchased was not changed. Hence, third objection of assessing officer is also overruled. Appeal of the assessee is allowed.
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2023 (5) TMI 117
Disallowance of transport expense - HELD THAT:- As assessee has provided PAN of the transporter and the details of transport expenses. The genuineness of said expense is not doubted either by Assessing Officer or Ld. CIT(A). As per Section 194C(6) that the assessee has provided PAN of the transporter and the transaction is not disputed and no disallowances of such transport expense is warranted. Similarly, the view taken in the case of South India Freight Carriers [ 2019 (12) TMI 363 - ITAT BANGALORE] . Interest disallowance on account of interest paid to three parties - As find that assessee has filed copy of ITR of recipients of the interest along with certificate of Chartered Accountant as required Rule 31ACB in Form 26A. Therefore, this part of ground is allowed subject to verification by Assessing Officer. This part ground of assessee is allowed in above terms. Disallowance of machines salary expense - assessee submits that Assessing Officer disallowed 20% of machine salary expenses, which was restricted to 10% by Ld. CIT(A) - assessee further submits that lower authorities disallowed the expense without doubting genuineness of such expenses and assessee filed cash book for such expense - HELD THAT:- As assessee has shown expense of Rs.24.69 lakh, which was paid in cash and no justification was given before AO. AO reasonably disallowed only 20%. The Ld. CIT(A) further reduced it to 10%, thereby granted further relief of 50%. Entire expense assessee has shown in cash. Therefore, no reason to interfere with the finding of Ld. CIT(A). This ground of assessee s appeal is dismissed. Disallowance of interest expense u/s 57 - assessee submits that Assessing Officer made addition by taking view that assessee has not furnished any details and Ld. CIT(A) confirmed the action of Assessing Officer by holding that no certificate as per Rule 31ACB in Form 26A is furnished - HELD THAT:- As the assessee failed to prove the nexus between the interest income offered in the return of interest expense made. Thus, this ground of appeal is dismissed.
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2023 (5) TMI 116
Revision u/s 263 - depreciation on goodwill claimed by the amalgamated company - assessee is a amalgamated company and claimed depreciation @ 25% on opening WDV towards intangible asset which represents goodwill created on amalgamation - HELD THAT:- In this case, the amalgamating company has not claimed depreciation on goodwill. The assessee company, which is amalgamated company only created goodwill due to amalgamation. Under these facts and circumstances of the case, AO ought to have examined as to how the depreciation is claimed by the amalgamated company, whether the depreciation claimed by the amalgamated company is in accordance with law or not and the Assessing Officer should have been issued notice under section 142(1) of the Act and called for the details and should have examined the issue. The amalgamating company has not claimed any depreciation. The burden cast upon the Assessing Officer to call for the details and examine the same. AO has totally ignored the artificial creation of goodwill for claiming depreciation - By examining entire records of the assessee and after considering the explanations, the ld. PCIT came to the conclusion that the AO has not at all examined the artificially created goodwill by amalgamating company and thus, we are of the opinion that the assessment order passed by the AO is erroneous and prejudicial to the interest of Revenue. Decided against assessee.
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2023 (5) TMI 115
Exparte order passed by the CIT(A) - HELD THAT:- We find that the ld. CIT(A) has given as many as opportunities and the assessee himself chosen not to upload its submissions along with necessary document in support of grounds of appeal before the ld. CIT(A). Therefore, we cannot find fault on the appellate order passed by the ld. CIT(A). Rectification of mistake u/s 154 - mistake in the order passed by the CPC u/s 143(1) - CPC processed the return filed by the assessee under section 143(1) of the Act as per the audit report filed by the assessee. There is no mistake in the order passed by the CPC under section 143(1) of the Act. Hence, it cannot be rectified under section 154 of the Act. Therefore, the ld. CIT(A) has dismissed the appeal of the assessee. No reason to interfere with the order passed by the ld. CIT(A). Thus, the ground raised by the assessee is dismissed.
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2023 (5) TMI 114
Deduction u/s. 80IB - exclusion of royalty payment and the sub license income pertains to Jammu Unit - revenue is aggrieved by the direction of the CIT(A) to exclude only the net expenditure on royalty from the total profit of the eligible unit for the purpose of allowing deduction u/s. 80IB - Whether the royalty payment net of royalty received has to be apportioned amongst the different units of the assessee or has to be considered only at Jammu Unit? - HELD THAT:- Considering the facts discussed here in above we are of the considered opinion that the royalty payment net of license fee received should be apportioned between the manufacturing units of the assessee on prorata basis as done and accepted in case of other corporate expenses. Accordingly the appeal of the assessee is allowed on the point on the issue remanded by the Hon ble High Court to the Tribunal and that of the revenue is dismissed.
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2023 (5) TMI 113
Cash deposit in the bank - additions as the unexplained income - AR submitted that as the cash book has not been disturbed and as the assessee has adequate opening cash balance as on the beginning of the relevant assessment year and to make the cash deposit in the bank account, the addition cannot be made as unexplained income of the assessee - HELD THAT:- What is to be considered and clearly understood is that when preparing the income and expenditure account, receipts of the assessee has been fully considered in preparing the income and expenditure account. Consequently, amount deposited in the bank account has also been considered by the assessee when preparing the income and expenditure account for the relevant assessment year. When the amount has already been considered when preparing its return of income for the relevant assessment year, to treat the cash deposit in the bank as unexplained income of the assessee is nothing but double addition, which is not also permissible. In these circumstances, on account of both the above mentioned reasons, it is held that the addition as made by the AO and confirmed by the CIT(A) is unsustainable and consequently, same stands deleted. Appeal of the assessee stands allowed.
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2023 (5) TMI 112
Disallowance u/s. 14A r.w.r. 8D - Whether no exempt income was earned by the assessee? - HELD THAT:- As in the case of Era Infrastructure [ 2022 (7) TMI 1093 - DELHI HIGH COURT ] and also various high courts and tribunals decisions on similar facts, wherein it has been held that no disallowance could be made u/s. 14A r.w.r. 8 if no exempt income was earned by the assessee. We are of the considered view that it is a well-settled law on the subject that no disallowance can be made under section 14A in case the assessee has not earned any exempt income or in excess of income claimed to be exempt. Disallowances made under section 14A read with rule 8D could not exceed amount of exempt income earned by assessee during year - Decided in favour of assessee. Nature of expenditure - Addition on account of R D expenditure - revenue or capital expenditure - AO held that entire R D expenditure is of capital nature and disallowed the sum - CIT-A deleted the addition - HELD THAT:- As the case of the assessee is covered in its favour in view of the decision of Ahmedabad ITAT in assessee s own case for assessment year 2013-14 [ 2020 (10) TMI 404 - ITAT AHMEDABAD ] which was rendered on identical set of facts. Further, the counsel for the assessee submitted that ld. CIT(A) allowed the appeal of the assessee with respect to this ground of appeal by placing reliance on the aforesaid decision of ITAT Ahmedabad for assessment year 2013-14. No infirmity in the order of ld. CIT(A) in allowing the assessee s appeal with respect to this ground of appeal, so as to call for any interference. Decided against revenue.
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2023 (5) TMI 111
Deduction u/s 80IA(4) - non fulfillment of prescribed conditions by the assessee to claim deduction u/s 80IA(4) which is a profit-linked incentive - certificate from concerned Authority that the infrastructural facility forms part of the Port - HELD THAT:- The assessee (BSSPL) and KSPL entered into an agreement for the establishment of '8 MMTPA Mechanised Coal Handling System for Unloading and Rail Despatch in Kakinada Deep Water Port at Berth No. 5 and its backup area . KSPL is acting as a nodal agency under the primary agreement between GoAP and ISPL. In this respect, the argument canvassed by the Revenue that the agreement is between assessee and KSPL does not satisfy the condition prescribed in sub-clause (b) of section 80IA(4)(i) is too rigid interpretation and frustrates both, the purpose of creating such nodal agencies and the legislative intent of granting deduction to the assessee engaged in infrastructure development projects. Similar view was taken in the case of DCIT vs. Belair Logistics [ 2015 (5) TMI 387 - ITAT HYDERABAD] wherein the assessee had entered in an agreement with Kakinada Seaport Ltd. ie the same company with whom assessee had an agreement and the deduction claimed under section 80IA(4) was allowed on the basis of port certificate issued to it. Assessee had obtained the permission from Custom Authorities for construction and operation of Mechanised Coal Handling System for which the Commissioner of Central Excise, Customs and Service Tax, Visakhapatnam - II Commissionerate, Visakhapatnam has accorded the permission vide letter dated 01.02.2013. The said permission is deemed to be an approval granted by the competent authority of the Central Government. Documents placed on record, position of law and CBDT circulars, submissions made by both the parties and judicial precedents, as discussed above, we are of considered view to allow the claim of deduction made by the assessee under section 80IA(4) of the Act. Accordingly, ground nos. 01 to 09 taken by the assessee in this respect are allowed.
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2023 (5) TMI 110
Unaccounted job work received - CIT(A) restricting the addition made by the AO by estimating the profit @ 20% on unaccounted job receipts to consider 5% as net profit as income for the year under consideration - HELD THAT:- As this Coordinate Bench of this Tribunal in Betex India Ltd.whereby the issue under consideration relating to addition in respect of unaccounted job work received were discussed and adjudicated , wherein 5% of alleged unaccounted job work addition was confirmed. As the issue is squarely covered in favour of assessee by the order in Betex India Ltd. group cases[ 2022 (12) TMI 1403 - ITAT SURAT] and there is no change in facts and law and the Revenue is unable to produce any material to controvert the aforesaid findings - we dismiss the Revenue s appeal.
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2023 (5) TMI 109
TP Adjustment - payment of royalty, project engineering and manufacturing drawings - addition made treating the international transactions pertaining to payment of royalty for receipt of technical knowhow, payment of engineering, and manufacturing drawing fees and payment of brand license fee and for availing the services, were the assessee has paid 2% of contract value to its AE and royalty paid @5% of the selling price to its AE - TPO has treated it as Rs. Nil - As argued agreement between the assessee and krupp polysius AG was approved by the RBI and the assessee has bench marked the transactions with the TNMM - HELD THAT:- We find the issues in the present appeal are identical to earlier year decided by the Hon ble Tribunal in the assessee s case for the A.Y 2009-10 [ 2020 (9) TMI 1289 - ITAT MUMBAI] such payment has been approved or deemed to have been approved by the RBI. When a payment is made after obtaining due approval from the RBI, how its ALP can be computed at Rs. Nil, is anybody's guess. The fact of approval of the payment by the RBI has been succinctly recorded by the TPO in his order as well. He still chose to propose adjustment in respect of full payment. In our considered opinion, when the rate of royalty payment and fee for drawings etc. has been approved or deemed to have been approved by the RBI, then such payment has to be considered at ALP. We, therefore, direct to delete addition of Rs. 4.29 crore made by the A.O. in this regard. The payments are to be considered at ALP and accordingly direct the assessing officer to delete the addition and allow the grounds of appeal. Reimbursement of expenditure - Contentions raised by the Ld. DR on this issue that no information was filed and the benefit has been obtained by the assessee and these facts were never brought on record before A.O/DRP. Accordingly, to meet the ends of justice, we restore the disputed issue to the file of the AO to examine details and adjudicate afresh and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information and we allow the ground of appeal of the assessee for statistical purposes.
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2023 (5) TMI 108
TP Adjustment - TP documentation adopted by the Ld. TPO - HELD THAT:- The argument of the Ld. AR deserves consideration on the fact that the assessee has not been provided an opportunity to rebut the comparables selected by the Ld. TPO, since the CD containing the comparables and the computation of the ALP was provided to the assessee along with the TP order. Argument of the Ld. AR that wherein the objections raised by the assessee were not considered by the Ld. TPO and also the Ld. DRP deserves consideration. AR in his written submissions has stated that with respect to sundry balances written back which was considered as non-operating income by the Ld. TPO without providing an opportunity to the assessee. AR also contended before us that the loan processing charges was considered as operating expenses by the Ld. TPO without providing an opportunity to the assessee. Similar treatment was also given in inventory valuation and adjustment on account of extraordinary cost and capacity adjustment wherein the assessee was not provided any opportunity to represent before the Ld. TPO. We therefore find that plea of the Ld. AR that matter may be remitted back to the file of the Ld. TPO deserves consideration. We consider it deem and fit to remit the matter back to the file of the Ld. TPO and thereby the assessee may be provided opportunity to make its submissions and rebut the TP documentation adopted by the Ld. TPO - Appeal of the assessee is allowed for statistical purposes.
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2023 (5) TMI 107
TP Adjustment - TPO rejected the aggregation approach followed by the assessee and benchmarked the transactions separately - AO passed the the draft assessment order incorporating the above adjustment - DRP on its own enhanced the adjustment made in the sale of finished goods products by stating that the TPO has considered only the transactions with AE whereas the transactions have to be considered in total - HELD THAT:- AO has, in the final assessment order retained the TP adjustment at the same amount without considering the above directions of the DRP. The final assessment order passed by the AO is not in accordance with the directions of the DRP. See case of Toyota Tsusho P. India Ltd [ 2022 (11) TMI 179 - ITAT BANGALORE] . We notice that the assessee s case is similar where the AO had not given effect to the directions of the DRP in the final assessment order and has retained the same adjustment as in the draft assessment order. Respectfully the above decision of the coordinate Bench, we quash the TP adjustment and hold the legal contentions raised in favour of the assessee. Since the TP adjustment is quashed on the basis of legal issue, we are not adjudicating the grounds raised with regard to TP adjustment on merits leaving them open. It is ordered accordingly. Disallowance of difference in 26AS - difference between the amount remitted as per Form 26AS and the revenue declared by the assessee in the Profit Loss account - HELD THAT:- AR submitted that the difference between the revenue as per Form 26AS and the P L account were reconciled and made the relevant submissions before the DRP (Ground No.10 in Form 35) and these submissions have not been considered on merits by the lower authorities and therefore prayed for remitting this issue back to the AO. DR did not have any objection. Accordingly, we remit this issue back to the AO to consider the reconciliation submitted by the assessee and decide the issue in accordance with law after giving reasonable opportunity of being heard. This ground is allowed for statistical purposes. Disallowance of TDS credit - HELD THAT:- We are of the considered view that the fact of whether tax is claimed as deduction in the year in which the income is offered needs to be examined based on evidence submitted by the assessee. We therefore remit the issue back to the AO to consider the issue on merits as per above directions, after giving reasonable opportunity of being heard.
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2023 (5) TMI 106
TP Adjustment - ALP adjustment on account of profit mark-up - assessee obtained IT support services from the AE - TPO held that the assessee merely performs coordination services and adds no value to the functions that the third party performs, hence, the same doesn t require any mark-up from Indian entity - AO held that third party cost in anyway has been allocated to the Indian entity which includes a mark-up, therefore a double mark-up is not justified - Assessee submitted that 5% mark-up on IT Software services and 7% mark-up on administrative expenses is in consonance with the international trade practices HELD THAT:- Performance/co-ordination of functions/services being rendered through a centralized off ice/Group companies, helps the participating Group companies in achieving global standardization of processes, realization of economies of scale, realizing operating and financial efficiencies, the services received from the BMW Group are provided by experienced personnel who focus on their respective domains, other direct benefits derived by the Company from such IT Support services include leveraging on the specialized support services of BMW Group who have the required expertise and knowledge. Hence, it cannot be said that the software/IT support services cannot be charged at par. A markup of 5% policy for the IT services rendered is an acceptable markup by international guidelines and as per EU Joint Transfer Pricing Forum. It cannot be expected that the parent organization supply support services without charging anything for such services rendered. Hence, we hold that the markup of 5% is sufficient to recoup the expenditure involved by the AE in exploration, inspection, testing and finalization of the suitable software. Accordingly, we direct that no other expenses other than 5% markup be allowed on the support services rendered by the AE. Deduction u/s 80G be allowed. Due TDS credit be given. Appeal of assessee allowed.
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2023 (5) TMI 105
Estimation of income - bogus purchases - HELD THAT:- We find that since the sales made out of disputed purchases have been accepted as such by the ld. AO, it would be just and fair to bring to tax only the profit element embedded in the value of such disputed purchases in view of the fact that assessee could have made purchases from the grey market in order to have some savings in the form of cash discount and indirect taxes. We find that this Tribunal in the case of assessees engaged in the trading of iron and steel had been consistently estimating the profit element to be at 5%. Hence, we direct the ld. AO to estimate the profit element at 5% of disputed purchases, which in our considered opinion, would meet the ends of justice in the peculiar facts and circumstances of the instant case. Accordingly, the ground No.2 raised by the assessee is partly allowed and ground raised by the Revenue is dismissed. Unexplained cash credit u/s.68 - AO concluded that assessee company had failed to prove the identity and creditworthiness of the investors - HELD THAT:- As in the hands of M/s. BIEL, the substantive addition made thereon, was not deleted on merits. It was deleted only on a technical ground of assessment being framed on a non-existent entity. We hold that since substantive addition has not been deleted by this Tribunal on merits, the addition made on protective basis in the hands of the assessee company had to be examined. But the excruciating fact that remains uncontroverted in the instant case is that both the ld. AO as well as the ld. CIT(A) agree that the transactions between BIEL and assessee company are genuine. Further all the documentary evidences submitted by the assessee vis-a-vis M/s. BIEL with regard to receipt of share capital and OCPS had not been rejected by the ld. AO and no deficiencies were found thereon. Hence, it could be safely concluded that assessee company had duly discharged its complete onus with regard to Section 68 of the Act. Hence, there could not be any addition u/s.68 of the Act even on merits on protective basis or on substantive basis. Hence, we hold that the ld. CIT(A) had rightly deleted the addition made u/s.68 of the Act in the hands of the assessee company on merits also. Accordingly, the ground raised by the Revenue is dismissed.
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2023 (5) TMI 104
Revision u/s 263 - As per CIT AO has not examined the finer details of utilization of accumulated funds and the same has rendered the assessment order erroneous and prejudicial to the interests of revenue - HELD THAT:- Once we have found that AO has discharged the duty of investigator (on the utilization of Rs 6 crores), then before Ld. CIT(E) holds the view of AO as erroneous, it was imperative on the part of Ld CIT(E) to have made necessary enquiries or verification and should have arrived at a conclusion that there was breach/violation of clause (a) or clause (b) or clause (d) of sec. 11(3) of the Act. Admittedly, in the instant case, CIT(E) has not conducted any such enquiry or verification. In such a scenario, we have to hold that he has initiated revision jurisdiction on mere conjectures, suspicions and surmises, which is not permitted. As noticed earlier the AO has conducted necessary enquiries regarding utilization of the accumulated income of Rs.6 crores was for the purpose for which it was accumulated and has accepted the same which is a plausible view. CIT(E) could have invoked jurisdiction u/s 263 of the Act only after enquiring himself, which we have already noticed that he has omitted to do so. In such a scenario, his impugned action of finding the action of AO to accept the claim of expenditure of Rs.6 crores as erroneous and prejudicial to the interests of revenue is untenable. The impugned revision order passed by Ld PCIT is not sustainable in law and assessee succeeds on the legal issue raised before us. Accordingly, we quash the impugned revision order passed by Ld CIT(E). Appeal filed by the assessee is allowed.
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Corporate Laws
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2023 (5) TMI 103
Seeking grant of Regular Bail - Corporate Structure repeatedly abused for various fraudulent purposes - books of accounts of BPSL were manipulated and various paper/shell companies were used for routing of funds in a deceptive manner - Siphoning of materials from BPSL Plant, Sambalpur, Orissa - Diversion of funds from BPSL in the form of bogus capital advances and routing the same as equity or unsecured loans in related entities of BPSL - Bogus advances to suppliers - Issue and negotiation of Inland Letters of Credit by Bhushan Power Steel Limited - Diversion of BPSL funds for purchase of. Shares by Promoters Family Members for Long-Term Capital Gains - Bogus purchase of capital goods - Purchase of property at Mumbai by Assurity Real Estate LLP. HELD THAT:- In the present case the petitioner has sought to invoke the inherent jurisdiction of this Court under section 482Cr.P.C. This Court thus has to analyse if the order granting bail is perverse, without jurisdiction or based on irrelevant material on record. A perusal of the impugned order reflects that the order is neither unsubstantiated nor perverse. The order granting bail is a well-reasoned order and has been based on proper material on record taking into account several incidental aspects around the case. There is no infirmity with the order which so requires the interference of this Court. The Ld. Special Court has after correctly appreciating the special benefit conferred on a woman and after considering the role of the Respondent and upon its satisfaction, has duly exercised its discretion in favour of the present Respondent thereby granting her bail. Moreover, it is not in dispute that SFIO complaint has been filed, cognizance taken and accused persons have been summoned. Thus in absence of any legal infirmity or perversity, this Court cannot interfere with the order of the Ld. ASJ granting regular bail to the respondent/accused. This Court does not sit as a court of appeal and cannot reappreciate evidence and substitute its view with that of the subordinate court merely because another plausible view was taken. Further, in absence of any cogent, supervening circumstances necessitating cancellation of bail of the respondent/accused, this Court cannot merely cancel the bail so granted. There is nothing on record to show that the accused has misused her bail or has not adhered to the conditions so imposed. Petition dismissed.
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PMLA
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2023 (5) TMI 102
Money Laundering - proceeds of crime - Scheduled Offences - knowledge of the accused is the condition precedent or sine qua non required to be shown by the prosecution for lodging the complaint - absence of any material to show that the petitioners had the knowledge that they were dealing with the proceeds of crime committed by Bharat Bomb and his associates - HELD THAT:- Section 2(u) defines what is proceeds of crime and Section 2(y) defines what is Scheduled offence . As discernable from the record, the Prosecution complaint in ECIR was lodged against the petitioners and others under the PMLA by the ED, pursuant to the investigation carried out by the CBI in the FIR No. RCBD1/2016/E/0002 dated 07.03.2016 and the charge-sheet dated 14.06.2016 filed by the CBI against Bharat Bomb and others for the offences under Sections 120B, 420, 467, 468, 471, 472 and 474 of IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 at the Designated CBI Court at Jaipur. All the said offences are scheduled offences within the meaning of Section 2(y) of the said Act - Suffice it to say that serious allegations of money laundering are alleged against both the petitioners in the Prosecution complaint and sufficient material particulars have been narrated in the said complaint to substantiate the said allegations, which prima facie show the direct involvement of the petitioners in the alleged offences of money laundering as defined in Section 3 of the said PMLA. Having regard to the definition contained in Section 3, it would be a folly to hold that the knowledge of the accused that he was dealing with the proceeds of crime, would be a condition precedent or sine qua non required to be shown by the prosecution for lodging the complaint under the said Act. As the definition itself suggests whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering - In the instant case, the direct involvement of the petitioners in the activities connected with the proceeds of crime has been alleged, along with the material narrated in the complaint which would require a trial to be conducted by the competent court. Apart from the fact that after filing of the SLPs, no documents could have been filed without the permission of the Court, which in the instant case does not appear to have been sought for by the petitioners nor granted by the Court, the very practice of not filing the essential and relevant documents, more particularly, the documents in respect of which a relief is sought in the SLPs, is strongly deprecated. It may be noted that non-production of the relevant documents especially the documents in respect of which the relief is sought, along with the SLPs could be the sole ground for rejection of the SLPs at the outset - The Registry is also directed to verify at the time of registration of SLPs as to whether all the relevant documents, more particularly, the documents in respect of which the relief is sought, have been produced at the first instance by the petitioners along with the SLPs or not. The interim relief granted earlier stands vacated forthwith - petition dismissed.
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Service Tax
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2023 (5) TMI 101
Non-payment of Service Tax - apportioned upfront fee received by the respondent-corporation of Rs. 35 Crore - this amount had been accepted before the agreement dated 12.01.2007 - whether same amount of Rs. 35 crore, which was received by the respondent-corporation at Mumbai before the agreement dated 12.01.2007, can be made basis to issue the impugned show cause notice dated 11.10.2011? HELD THAT:- The answer to this question would be in the negative, as the jurisdiction to issue this notice was with the Raigad Commissionerate, which had already set aside the notice vide order dated 30.04.2014 (Annexure A-5). Rather, apart from notice dated 11.10.2011, two more notices dated 25.01.2011 and 10.10.2012 have also been set aside. The above said three notices were issued for the period from January, 2007 to March, 2012. The argument raised by learned counsel for the appellant that the Tribunal has only observed with respect to the notice dated 11.10.2011, has no merit, because as per order dated 30.01.2014 (Annexure A-5), all the three notices have been set aside. Thus, no ground is made out to interfere in the impugned order as the same has been passed after appreciating the evidence in the right perspective. No substantial question of law arises for consideration in this appeal. Appeal dismissed.
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2023 (5) TMI 100
Levy of Service tax - cargo handling service - ocean freight - profit/mark up on ocean freight charges, treating it as integral part of cargo handling services - disputed period is from 01.10.2008 to 31.3.2013 - demand alongwith interest and equal penalty - HELD THAT:- The issue is no more res integra as the same has been decided in catena of decisions, the latest being the judgment in the case of M/S. TIGER LOGISTICS (INDIA) LTD. VERSUS COMMISSIONER OF SERVICE TAX-II, DELHI [ 2022 (2) TMI 455 - CESTAT NEW DELHI ] where it was held that This activity is a business in itself on account of the appellant and cannot be called a service at all. Neither can the profit earned from such business be termed consideration for service. The Tribunal in an earlier decision the case of GREENWICH MERIDIAN LOGISTICS (INDIA) PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX MUMBAI [ 2016 (4) TMI 547 - CESTAT MUMBAI ] held that The notional surplus earned thereby arises from purchases and sale of space and not by acting for a client who has space or slot on a vessel. Section 65(19) ibid will not address these independent principal-to-principal transactions of the appellant and, with the space so purchased being allocable only by the appellant, the shipping line fails in description as client whose services are promoted or marketed. Therefore, the demands, with interest thereon, and penalties are set aside. Demand set aside - appeal allowed - decided in favour of appellant.
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2023 (5) TMI 99
Demand of service tax and Penalty u/s 78 of FA - classification of services - Cargo Handling Service/Business Auxiliary Service, or not - issue involved is of interpretation - HELD THAT:- The appellant are engaged in services which involve unloading of milk cans and bottle crates from various incoming vehicles, dumping milk in weighment vessel, cleaning cans, plastic crates, and bottles, putting milk pouch in crates, putting bottles/pouch in crates, cleaning or pre-pack machine and department, loading the creates in the vehicle for dispatch - the appellant is supplying labour to their clients and the charges are based on individual item of work given in the table in the work order. It is seen that all the activities are conducted within the factory premises. All the seven activities listed in the table above do not individually quality as Cargo Handling Service . The appellant in only providing labour on piece rate basis and at no stage it is the appellant who has taken the custody of goods. The goods do not become cargo as any movement of goods within the factory does not make it a cargo. It is noticed that the contracts are not in the nature of Cargo Handling but are in the nature of labour contract on piece rate basis. Thus, classification of these services under Cargo Handling Service cannot be sustained. Revenue has relied on the decision of SIGNODE INDIA LIMITED VERSUS COMMR. OF CEN. EXCISE CUSTOMS-II [ 2017 (3) TMI 934 - SUPREME COURT] . In the said case, it has clearly been held that only packing of goods for the purpose of transport would get covered in the category of Cargo Handling Service - In the above case, it is seen that the entire activity under taken by the appellant is a stage prior to the goods becoming cargo. Thus, the decision is not relevant for the instant case. Appeal allowed.
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2023 (5) TMI 98
Levy of Service Tax - Renting of Immovable Property Service - rent recovered towards renting of shops, godown, office etc. to the commission agents/ traders - appellant is Agriculture Produce Market Committee (APMC) - Extended period of limitation - HELD THAT:- The issue has been decided against the assessee in the case of M/S. KRISHI UPAJ MANDI SAMITI AND OTHERS VERSUS CCE ST, JAIPUR I JAIPUR II [ 2017 (5) TMI 1465 - CESTAT NEW DELHI] where it was held that The appellants are liable to pay service tax under the category of renting of immovable property service for the period upto 30.06.2012 - For the period from 1.7.2012 (Negative List Regime), the appellants are not liable to pay service tax under the said tax entry in respect of shed/shop/premises leased out to the traders/others for storage of agricultural produce in the marketing area. The Negative List will not cover the activities of renting of immovable property for other than agricultural produce. In view of the above decision which was upheld by the Hon ble Supreme Court in KRISHI UPAJ MANDI SAMITI, NEW MANDI YARD, ALWAR VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, ALWAR [ 2022 (2) TMI 1113 - SUPREME COURT] , the issue on merit has been decided against the assessee. Extended period of limitation - HELD THAT:- The demand for the extended period is not sustainable on the ground that there is no malafide act to evade service tax. Cum-tax value - HELD THAT:- The appellant is eligible for such benefit. Revenue is at liberty to work-out the demand for the normal period by extending the cum-tax benefit and recover/ adjust from the deposit made by the appellant, if any - Appeal allowed.
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2023 (5) TMI 97
Levy of service tax - Real Estate Agent service - land sold to M/s. Sahara India Commercial Corporation Limited - appellant involved in the sale and purchase of land - appellant purchase land at x price and the same is sold to M/s. Sahara India Commercial Corporation Limited at x+1 price - profit or lose is on the account of appellant only - HELD THAT:- Under the same arrangement of activity of purchase of land from farmers / landowners and re-sale the same to Real Estate Developers, in the present case M/s. Sahara India Commercial Corporation Limited, this Tribunal has taken a view that under this arrangement the purchaser and re-seller of land cannot be treated as Real Estate Agent for charging service tax under the said category. Reliance can be placed in the case of PREMIUM REAL ESTATE DEVELOPERS, RAJAT YADAV VERSUS C.S.T. -SERVICE TAX DELHI [ 2018 (11) TMI 1472 - CESTAT NEW DELHI] where it was held that since the specific remuneration has not been fixed in the deal for acquisition of the land, both the parties have worked more as a partner in the deal rather than as an agent and the principle, therefore the taxable value itself has not acquired finality in this case - In the identical nature of transaction, it was held that assessee cannot be charged with service tax under Real Estate Agent . Following the said decision of this Tribunal, in the facts of present case the appellant s activity does not fall under the category of Real Estate Agent Service, hence service tax demand under the said head cannot be sustained. Appeal allowed - decided in favour of appellant.
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2023 (5) TMI 96
Cash Refund of the accumulated CENVAT credit - Reversal of credit migrated to GST (transitional credit) - rejection on the ground of non-compliance with the procedure laid down under Notification No.27/2012-CE(NT) and contravention of the provision of Section 142(3) of the CGST Act, 2017 - refund pertain to the quarters April 2017 to June 2017; October 2016 to December 2016 and January 2017 to March 2017; the claims have been filed during the CGST regime i.e. after 01/07/2017 - applicability of transitional provisions in terms of Section 142(3) of CGST Act, 2017. HELD THAT:- It is not in dispute that all the cash refund claims of accumulated credit have been filed during July and August, 2017 i.e. after 01/07/2017. Also, it is not in dispute that the appellant had transitioned from the old CENVAT credit into input tax credit w.e.f. 01/07/2017 and shown the closing balance of CENVAT credit as on 30/06/2017 being the opening balance of Input Tax Credit under IGST as on 01/07/2017. A plain reading of the provision of of Section 142(3), makes it clear that under the second proviso, it is specifically stipulated that no refunds will be allowed of any amount of cenvat credit where the balance of the said amount as on the appointed day i.e. 01/07/2017 has been carried forward under the CGST Act, 2017. In the present case, the learned consultant for the appellant fairly accepted that the entire amount of cenvat credit laying in balance as on 30/06/2017 have been transitioned to CGST regime and shown as input tax credit opening balance in their books of account as on 01/07/2017. There are no merit in the said contention of the learned consultant for the appellant inasmuch as once the appellant has opted to make a transition from the existing cenvat credit into input tax credit, the second proviso to Section 142(3) of CGST Act, 2017 comes into play. In absence of any specific provision, subsequent debit under the IGST Act and rules made thereunder of the input tax credit, cannot be the circumstances to claim refund under Rule 5 of CENVAT Credit Rules, 2004 read with Notification No.27/2012-CE(NT). The judgments cited by the learned consultant does not deal with the present circumstances - The Punjab Haryana High Court in ADFERT TECHNOLOGIES PVT. LTD. VERSUS UNION OF INDIA AND ORS. [ 2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT] was confronted with the question of denying of transition of cenvat credit to input tax credit because of delay in filing the relevant declarations with the Revenue department - it was not considered and neither held that after transition from the existing cenvat regime to CGST regime, the cash refund of the accumulated credit as was prior to 01/07/2017 could be considered for refund under Notification No.27/2012 read with Rule 5 of CENVAT Credit Rules, 2004. There is no reason to interfere with the order of the authorities below - Appeal of assessee dismissed.
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2023 (5) TMI 95
Refund claim - payments made under protest - Time Limitation - Commercial Training or Coaching Services - tax on total amount collected from the students, or on only the amounts they receive from NIFE, which is 80% of the amounts collected from the students - cost of study materials are to be included in the gross value of taxable services or not - HELD THAT:- The two instances that squarely apply in this case is either the date of Commissioner Appeals order as is stated at clause (ec) of Section 11B or the date of payment of duty as per clause (f) of Section 11B. If the amounts were to be considered as the tax amounts, then clearly the amounts collected by the department are liable to be refunded since the demands are set aside. But since the commissioner Appeals held that the excess amounts paid by the appellant are over and above the tax liability one has to see whether Section 11B is applicable at all. Section 11B clause (f) comes into play only if the amounts are considered to be payment of duty. In the impugned order it has been categorically that the amounts paid by the appellant is an excess amount over and above the tax liability - it has been categorically held relevant date as stipulated in Section 11B (as made applicable to service tax matters) is not applicable wherein the amounts are paid in excess and collected without any authority of law. The Hon ble Madras High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE, CHENNAI VERSUS M/S. ELECTRO STEEL CASTINGS LTD CESTAT, CHENNAI [ 2013 (8) TMI 199 - MADRAS HIGH COURT] has held that Thus, the facts involved in both the cases decided by the Supreme Court were identical and the Supreme Court, while dealing with the issue relating to period of limitation, uniformly held that no limitation was applicable to the payment made under protest. The Hon ble Supreme Court in the earlier judgment clearly observed that the payment made, when the assessee has been challenging the earlier levy of duty, is deemed to be under protest and not otherwise. Hence, the combined appreciation of both the cases decided by the Supreme Court would lead to an irresistible inference that the payment made herein is also deemed to be under protest and no limitation is applicable and the claim is maintainable and is rightly decided by the CESTAT . The facts of this case are similar to the above where the Appellant had challenged the levy of duty and therefore, any payments made are deemed to be made under protest. His challenge against the demand was decided in favour of the Appellant which resulted in the refund claim - the refund claims filed by the Appellant is allowed.
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Central Excise
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2023 (5) TMI 94
Levy of redemption Fine under Kar Vivad Samadhan Scheme - matter already got settled under the Scheme - non-issuance of certificate of declaration of full and final settlement of the dispute - HELD THAT:- Reference, at this stage, can be made to the order KEDIA GREAT GALLEON LTD. VERSUS COMMISSIONER OF C. EX., INDORE [ 2000 (8) TMI 705 - CEGAT, NEW DELHI ], wherein in a similar situation, the matter was referred under the Kar Vivad Samadhan Scheme . In that case the redemption fine of Rs.1.5 Lakhs was imposed. It was held that once the matter got settled under the Kar Vivad Samadhan Scheme, order imposing fine passed by the Commissioner of Central Excise had no validity. The Kar Vivad Samadhan Scheme was formulated only to settle the dispute with respect to imposition of penalty and tax dues etc. The redemption fine could not be imposed. In this backdrop, failure to deposit Rs.7500/- by the petitioner, cannot be made a ground for not issuing the certificate of declaration of full and final settlement of the dispute under the aforesaid Scheme. The impugned certificate of intimation (Form 2-B) dated 29.12.1998 (Annexure P-1) issued by the designated authority along with letter dated 26.04.2001 (Annexure P-3) issued by the Commissioner, Central Excise, Chandigarh-II, is set aside - Petition allowed.
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2023 (5) TMI 93
Entitlement to interest on delay payment of refund, once the Tribunal has decided to refund the pre-deposit amount - HELD THAT:- This aspect has been considered by this Court in M/S SHREEWOOD PRODUCTS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2016 (10) TMI 273 - PUNJAB AND HARYANA HIGH COURT] . In that case, application for refund was made on 22.05.2008. Part of some amount i.e. Rs.76,44,080/- was refunded in the month of January, 2009, whereas the remaining amount of Rs.88,72,686/- was refunded in the month of April, 2009. Reference was made to a circular issued by the Government of India on 02.01.2002, which provided that formal application for refund was not required. A simple letter from the person is sufficient along with copy of the order, on the basis of which, the refund became due, which can be considered by the competent authority to refund the claim. Since the application, in that case, was made on 22.05.2008, the assessee was entitled to 12% interest per annum for the period after three months till the refund was granted after passing of the order by the Tribunal on 02.05.2008. The High Court of Kerala, in SONY PICTURES NETWORKS INDIA PVT. LTD. VERSUS THE UNION OF INDIA, THE COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, THE ASSISTANT COMMISSIONER OF CUSTOMS, THIRUVANANTHAPURAM [ 2017 (5) TMI 864 - KERALA HIGH COURT] was examining a case, where the assessee was liable to pay refund amount on expiry of three months from the date of order dated 18.11.2002 passed by the Appellate Tribunal. It was held that even if the application was submitted late, the circulars dated 02.01.2002 and 08.12.2004 issued in respect of refund/return of deposits do not restrict payment of interest from the date of submission of application. In the present case, since the amount was deposited under Section 35F of the Central Excise Act, even a simple application could be made for claiming the refund and the refund was required to be returned along with interest - With respect to the interest, the judgments passed in Shreewood Products Pvt. Ltd. and Sony Pictures Networks India Pvt. Ltd. s cases have clarified that the department is liable to make payment of interest after the expiry of three months from the date the refund becomes due - In the present case also, after the expiry of three months, the interest became due w.e.f. August, 2010. The appellant is held entitled to payment of interest at the rate of 12% per annum for the period after three months till the refund was granted after passing of the order by the Tribunal on 26.05.2010 - appeal allowed.
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2023 (5) TMI 92
CENVAT Credit - input services - Wrongful interpretation of statute - Rule 2(I) of CCR - Works Contract Services in so far as they are used for laying of foundation or making of structure for support of capital goods - Works Contract Service have been straightwy excluded from the ambit of input service or not - first submission of appellant is that the Tribunal committed a serious error in holding that it has not been denied by the Department that the Coke Oven Plant of the appellant was towards modernisation and renovation of their existing plant/factor - reading of a decision (to be as a whole) - ratio decidendi - HELD THAT:- The Assessing Officer brushed aside the statutory provision, rather on a wrong understanding of the statutory provision has worded the show cause notice. The observations of the Assessing Officer stating that in terms of provisions of Rule 2(l), services provided under Works Contract Services have been straightaway excluded from the ambit of input service and hence it appears that availment of such credit is not at all admissible. This conclusion, at the very threshold by the Assessing Officer is on a wrong noting of the provision or in other words a wrong understanding of the statutory provision - the initial mistake committed by the Assessing Officer while issuing the show cause notice has perpetrated in the order of adjudication by carrying the mistake along with it. Thus, considering this fact, the Tribunal, rightly held that the revenue has not denied that the Cove Oven Plant of the appellant was towards modernisation and renovation of the existing plant/factory. If such is the case, the claim of the assessee would clearly fall within the definition of input service as defined under Section 2(l) which was prevalent from the period from 1.4.2011 to 30.6.2017. Appellant took great pain to distinguish the decisions relied upon by the learned Tribunal. It is opined that the manner in which the decision has to be read is as a whole to enable the Court to carry out as to what is the ratio decidendi. This is the cardinal and basic principle of culling out the legal principle in any decision. In the case of M/s. Reliance Industries vs. CCE ST, Rajkot [ 2022 (4) TMI 729 - CESTAT AHMEDABAD ], which has been referred to by the Tribunal, it has been held that It is pertinent to note that when the exclusion was brought in the rules, services relating to setting up of the factory was removed from the inclusion clause of the definition of input service in rule 2(l) of Cenvat Credit Rules, 2004 therefore, there is a direct nexus of the service mentioned in the exclusion clause and setting up of the factory. It is important to note that the legislature consciously continued the services of renovation, modernization, repairs appearing in the inclusion clause of definition of input service. This clearly shows that any service relating to modernization, renovation of the existing factory is admissible as input service which is the direct case of the appellant. On a reading of the above paragraph, it will clearly show that the decision can be clearly applied to the facts and circumstances of the case. In the said decision it has been held that even though services of construction of building or civil structure are falling under the exclusion clause but even if similar service is used for renovation and modernisation of existing factory, the credit is admissible. The exclusion applies only in respect of such service as specified therein which are used for initial setting of the factory. Thus, it is nobody s case much less revenue s case that project undertaken by the assessee was not one of modernisation and renovation - This is precisely the reason why the show cause notice was worded so by the Assessing Officer though by wrongly interpreting the scope of Rule 2(l). The Tribunal, on re-appreciation of the factual position, has rendered a finding in favour of the assessee which, does not suffer from any perversity to interfere in this second appeal. For the above reason, no substantial question of law arises for consideration in this appeal - Appeal dismissed.
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2023 (5) TMI 91
Suo moto adjustment of the duty paid in excess against the short payment of duty - provisional assessment under rule 7 of Central Excise Rules, 2002 - HELD THAT:- The Tribunal in the aforesaid judgments have consistently taken the stand in terms of the decision in COLLECTOR OF CENTRAL EXCISE, HYDERABAD VERSUS DIVYA ENTERPRISES LTD. [ 2003 (3) TMI 108 - SC ORDER] whereby the Apex Court re-cognising the concept of adjustment of duties has categorically allowed for such adjustment of duties with respect to less and excess duty paid and on that basis have allowed the appeals filed by the assessee - Reliance can be placed in the case of TILRODE CHEM PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, BANGALORE [ 2010 (6) TMI 544 - CESTAT, BANGALORE] and TOYOTA KIRLOSKAR AUTO PARTS PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, BANGALORE [ 2011 (10) TMI 201 - KARNATAKA HIGH COURT] . It has been informed that the department has already challenged the judgements of the MP High Court in THE PRINCIPAL COMMISSIONER CGST AND CENTRAL EXCISE HEADQUARTERS BHOPAL VERSUS M/S GODREJ CONSUMER PRODUCTS LTD. [ 2019 (5) TMI 222 - MADHYA PRADESH HIGH COURT] before the Hon'ble Supreme Court in SLP (C) No. 30394/ 2019. However, it is found that there is no stay by the Hon'ble Supreme Court of the judgements under challenge and therefore as on today the present appeal has to be decided in terms of the earlier orders of the Tribunal and as affirmed by the MP High Court on the principle that adjustment of duty is permitted under Law and the benefit of the same ought to have been allowed to the assessee. Since the issue stands decided on merits in favour of the assessee the question of limitation and the imposition of penalty does not survive. In so far as the interest is concerned the same is liable to be paid by the appellant on the short duty paid which is to be determined after adjusting the excess duty paid and for that purpose matter remanded back to the original authority for adjustment of duty and also for determination of interest to be payable by the appellant. Appeal is allowed by way of remand.
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CST, VAT & Sales Tax
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2023 (5) TMI 90
Deemed sale or not - supply of 'goods' defined under Section 2(h) (iii) [should have been sub-clause (ii)] and 2(h) (iv) of the GST Act - impugned orders challenged on the ground that the observations made by the Appellate Authority that the goods imported by the assessee from outside the State on the strength of C-Forms were supplied to the contractors for execution of work contracts and there was, thus, transfer of property in goods to the contractors was erroneous and legally unsustainable - Whether the Tribunal was bound by its earlier orders in the cases of applicant itself as they have attained finality and, on the principle of consistency , the Tribunal should not hold otherwise than what has been settled by its earlier Benches? HELD THAT:- It is held by the Assessing Authority that the transaction i.e transfer of equipments/assets erected and established by the assessee either itself or through sub-contractors is tantamount to execution of works contract by the assessee and, therefore, by the definitions of Sale , Goods and Dealer given in the GST Act, the transfer of goods or property in goods utilized in the execution of works contract is a sale exigible to tax under the GST Act. This finding of fact and the conclusion drawn on the basis of the definitions of Sale, Goods and Dealer given in the GST Act has been upheld by the Appellate Authority as well as the Tribunal - Once the questions of law framed by the Tribunal are appreciated in the aforesaid backdrop, it would clearly transpire that, having regard to the definitions of Goods, Dealer and Sale given in the GST Act, the services provides in the shape of works contract, whether divisible or indivisible involving transfer of property or not, fall in the definition of the term goods and any such transaction shall be deemed to be a sale by the person making the same. Handing over of the goods and material to the contractors for construction and laying of power grids, sub-stations and transmission lines of the assessee did not involve the transfer of right to use goods. Not only the ownership and dominion over the goods handed over to the contractors remained vested with the assessee, but the transfer or handing over of the goods and material to the contractors was without any consideration. It can, thus, be safely concluded that the transaction between the assessee and its contractor involving transfer of goods was not supported by any valuable consideration and, therefore, cannot be construed as a transfer of right to use goods so as to bring it within the purview of term sale as defined under Section 2(L) of the GST Act. From deep scrutiny, it could only be found that the assessee, after erecting grid stations, sub-stations and transmission lines, provides facility of transmission of electric energy to the State and other utilities/undertakings by levying transmission charges. Whether the works executed by the assessee through its sub-contractors involving the use of goods and material are executed for and handed over to the States, other utilities or undertakings, is not clear from the record. As a matter of fact, this aspect has not been considered either by the Assessing Authority or the two Appellate Forums under the GST Act which have heard and decided the appeals. Absent such material on record, it is difficult for us to make any comment, lest the parties or either of them may be prejudiced. In the considered view that, in respect of assessing year 1996-97, there was no transfer of right to use goods from assessee to the contractors who constructed, set up and laid power grids, sub-stations and transmission lines for the assessee by utilizing the goods and material provided to them by the assessee itself without any consideration. It shall be the contractor, who shall be accountable for paying the sales tax on the services provided to the assessee in the shape of works contact. Such is also not the case set up by the revenue before the Forums below or even before us. This will leave us with only the transfer of right to use goods by the assessee to the contractors. It is reiterated that, in the given facts and circumstances, it is found that no transfer of right to use the goods provided by the assessee to the contractors for constructing, erecting or laying out the power grids, sub-stations and transmission lines for the assessee. In the instant case, the ownership and dominion over the goods purchased by the assessee from outside the State always remained with the assessee and the goods were never transferred to the contractors against any valuable consideration. As a matter of fact, the goods and materials purchased by the assessee from outside the State were utilized by the contractors as per the directions of the assessee in raising the construction of various transmission lines, power grids and sub-stations etc. Principle of consistency - Tribunal was bound by its earlier orders in the cases of applicant itself as they have attained finality or not? - whether the Tribunal should not hold otherwise than what has been settled by its earlier Benches? - HELD THAT:- Not only the Tribunal but all the Authorities subordinate to it are bound to follow and comply with the law laid down by the Tribunal. This is necessary to maintain judicial discipline and avoid uncertainty in law. The Tribunal may, in appropriate cases, take a view different from the one taken by it earlier if there is change in law or the fact situation in the context whereof the law was declared by it earlier. The Assessing Authorities or the Statutory Appellate Authorities under the GST Act cannot and should not take a view on question of law contrary to the view taken by the Tribunal. Such conduct of the Authorities shall be gross impropriety and indiscipline which may call for initiation of appropriate departmental action. References disposed off.
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Indian Laws
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2023 (5) TMI 89
Suit for recovery of dues - Jurisdiction of the court to entertain the suit - equipments supplied by defendant to the plaintiff satisfy the specifications mentioned in the purchase order or not - Number 160 found in the basic equipment Fine Lift FH 160 refers to weight lifting capacity of the equipment or it refers to the total weight of the gripper - plaintiff has acknowledged supply of equipments as per the specifications or not - rejection of equipments which were supplied by defendant to the plaintiff as per the purchase order. Whether the equipments supplied by defendant to the plaintiff satisfy the specifications mentioned in the purchase order? - Whether the Number 160 found in the basic equipment Fine Lift FH 160 refers to weight lifting capacity of the equipment or it refers to the total weight of the gripper as well the job carrying capacity of the basic equipment? - HELD THAT:- From the communications exchanged between the parties, this Court is surprised to find that the defendant, who had promised to demonstrate the functioning of equipments with a carrying capacity of 130 kg, did not come forward to fulfill their promise. The defendant, at one stage, felt disappointed and insisted only payment. It is now established that the defendant, who has undertaken to successfully install the machines before the release of final payment, started demanding payment, which is not required as per the revised terms as mentioned in the invoice - this Court has no hesitation to hold that the defendant has not fulfilled its obligation under the contract and that they purposely delayed installation to the satisfaction of the plaintiff, as undertaken by them during middle of the installation. Though the defendant made an attempt to convince the plaintiff to improve the performance as per specifications, they did not accomplish and hence this Court is unable to accept the case of defendant. This Court has no reason to disbelieve the evidence of P.W.2 as regards the actual weight of gripper especially when the plaintiff's application for appointment of Advocate Commissioner was dismissed on the objection of defendant and the evidence of P.W.2 was not controverted. This Court finds no truth in the case of defendant. The issues are answered in favour of the plaintiff and against the defendant. This Court holds that the defendant failed to supply equipments to the plaintiff, satisfying the specifications mentioned in the purchase order. This Court also holds that the understanding of the plaintiff and defendant at the time of placing purchase order is that the weight carrying capacity of the equipment at all angles should be upto 160 kg and the actual weight of gripper has no relevance while denoting the equipment as FH 160. In other words, the Number 160 found in the basic equipment Fine Lift FH 160 would only refer to job lifting capacity of the equipment, irrespective of the weight of the gripper. Whether the plaintiff has acknowledged supply of equipments as per the specifications and in accordance with the purchase order and failed to pay balance amount as per the contract? - Whether the plaintiff is justified in rejecting the equipments which were supplied by defendant to the plaintiff as per the purchase order under Ex.B1 dated 09.02.2007 and filing the suit for recovery of money? - HELD THAT:- In the present case, though the defendant was bound to discharge the burden lies on them, they failed to produce even the Brochure to establish their story about the Number 160 found in the purchase order. This Court has already seen that the case of defendant is not consistent and the evidence of D.W.1 is liable to be rejected. Though the trial Court has not considered the report given by P.W.2 and the evidence of P.W.2, this Court has no reasons to disbelieve them atleast as to the actual weight of gripper, as the appellant/defendant has not cross-examined the witness on this aspect. Though this Court has repeatedly held in several cases that the purchaser is bound to pay the contract price when he accepts the goods, in the present case, the plaintiff is entitled to reject the goods when the goods did not satisfy the specifications as per the terms of contract. The plaintiff has parted with substantial money to the defendant towards supply of equipments. When the plaintiff's right to reject the goods is upheld, the consequence that would follow is that the plaintiff is also entitled to interest. Since interest claimed is only 12% p.a., and the transaction being commercial, this Court is justified in granting 12% p.a. interest for the period from 02.10.2008 to 28.02.2010 and 6% p.a. thereafter till date of realisation - issues are answered in favour of the respondent/plaintiff and against the appellant/defendant. The decree of the trial Court is confirmed. In addition, there shall be a decree granting interest at the rate of 12% p.a. for the period from 02.10.2008 to 28.02.2010 and at the rate of 6% p.a. thereafter till the date of realisation. Upon making payment of the amount as per the decree, it is open to the defendant to take delivery of all the equipments supplied by them to plaintiff. Appeal dismissed.
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