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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter June 10, 2024 Case Laws in this Newsletter: GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles 1. NAVIGATING THE LABYRINTH : UNDERSTANDING GAAR AND ITS IMPACT ON TAX AVOIDANCE By: Eshaan Singal Summary: The General Anti-Avoidance Rule (GAAR) is a critical tool in combating tax avoidance strategies that exploit legal loopholes to reduce tax liabilities. It emphasizes substance over form, ensuring transactions reflect genuine economic activity rather than solely pursuing tax benefits. GAAR empowers tax authorities to challenge arrangements lacking commercial substance, promoting fiscal equity and reinforcing the social contract between taxpayers and the government. Despite its importance, GAAR faces criticisms regarding implementation challenges, potential misuse, and impacts on investment. Its balanced application is crucial to maintaining tax system integrity while fostering legitimate business activities and economic growth. 2. HC grants stay on Demand Order wherein Validity of Extension Notifications Under section 168A of the CGST Act, Challenged By: Bimal jain Summary: The Andhra Pradesh High Court granted a stay on a demand order involving M/s. Fluentgrid Limited, which challenged the validity of extension notifications under Section 168A of the CGST Act. The court ruled that the 'due date' rather than the 'actual date' of return filing is pertinent for limitation purposes. The petitioner sought adjustments or refunds related to GST payments in SEZ and DTA registrations. The court noted the challenge regarding the limitation period and stated that no coercive action would be taken until the next hearing, as the proceedings were initiated beyond the permissible period. 3. Statutory Due Dates- June Compliance Calendar 2024 By: Ishita Ramani Summary: Staying compliant with statutory requirements is crucial for businesses in India to avoid financial penalties. The June Compliance Calendar 2024 highlights key deadlines, including the filing of Form DPT-3 and the renewal of the Importer Exporter Code (IEC). Form DPT-3, required under the Companies Act, 2013, must be filed by Indian companies to report deposits, loans, and financial receipts. The IEC, a vital identification for import/export businesses, must be renewed annually to ensure accurate records with the Directorate General of Foreign Trade. Timely compliance helps businesses maintain smooth operations and avoid disruptions. 4. UNIT HOLDERS’ NOMINEE DIRECTOR UNDER SEBI (REIT) REGULATIONS, 2014 By: DR.MARIAPPAN GOVINDARAJAN Summary: Under the SEBI (REIT) Regulations, 2014, unitholders holding at least 10% of a REIT's total units can nominate a director to the Manager's board. The nominee must meet specific eligibility criteria, including being 'fit and proper' and not being a defaulter or barred from capital markets. Unitholders can nominate one director, and the Manager must adopt a policy detailing the nomination process, director responsibilities, and criteria. If a nominee director's eligibility changes, they must resign. The trust deed must be amended to reflect these rights, and the Manager must regularly review unitholder eligibility. Circulars / Instructions / Orders FEMA 1. 09 - dated 7-6-2024 Foreign Exchange Management (Overseas Investment) Directions, 2022 - Investments in Overseas Funds Summary: The circular addresses amendments to the Foreign Exchange Management (Overseas Investment) Directions, 2022, regarding investments in overseas funds. It clarifies that investments, including sponsor contributions in units or any instruments from regulated overseas investment funds, are considered Overseas Portfolio Investments (OPI). The amendments allow listed Indian companies, resident individuals, and unlisted Indian entities to invest in such funds, particularly in International Financial Services Centres (IFSCs), subject to applicable limits. The changes are made under the Foreign Exchange Management Act, 1999, and authorized dealer banks are instructed to inform their clients of these updates. Highlights / Catch Notes GST Mismatch between the GSTR 3B return and the GSTR 1 statement: Court finds lack of fair chance to contest. Order set aside for reevaluation. Case-Laws - HC : The High Court found a violation of natural justice as the petitioner was not given a fair chance to contest a tax demand due to a mismatch between GSTR 3B return and GSTR 1 statement. The tax liability arose from this discrepancy. The petitioner's counsel provided evidence of GST computation errors. The court noted the tax proposal was confirmed due to lack of response to show cause notice. To ensure justice, the court set aside the order and remanded the matter for reconsideration. The petitioner can reply to the notice within two weeks. The petition was disposed of by remand. Visit to Get Source Violation of fairness: Petitioner's explanations ignored. Discrepancies unaddressed. Order set aside for review. Case-Laws - HC : The High Court found a violation of natural justice as the petitioner's reply to the show cause notice was not considered. Discrepancies in GSTR returns were explained by the petitioner, including credit notes and missing supplier invoices. The court noted that the explanation provided was not rejected with reasons, leading to the order being set aside. The case was remanded for reconsideration, and the petition was disposed of by way of remand. Visit to Get Source Extension of time for tax assessment or notice issuance. Order passed during ongoing case. No enforcement until next court date. Case-Laws - HC : The High Court addressed the issue of extension of limitation for assessment u/s 74 or issuing Show Cause Notice (SCN) as per Notification No. 09/2023 by CGST authorities. During the writ petition, interim orders were issued. Respondent authorities issued an order u/s 73(9) of CGST Act, 2017/Assam GST Act, 2017. The Court directed respondents to complete instructions and file necessary affidavit. No coercive action against the petitioner until the next hearing on 12.06.2024. Visit to Get Source High Court ruled against alleged excess input tax credit claim due to violation of natural justice principles. Stay on demand order till next hearing. Case-Laws - HC : HC addressed alleged excess input tax credit claim u/s 73 SGST/CGST Act, 2017. No SCN issued, only summary, violating Section 73 and Rule 142. Violation of natural justice. Notice issued, returnable in 4 weeks. Counsels for respondents accepted notice. Waiver of Notices due to representation. Extra copies of petition to be served within 1 week. Next hearing on 24.06.2024. Demand order dated 28.04.2024 stayed till next date. Visit to Get Source Income Tax Tribunal Orders Tax Refund with Interest Due to Discrepancies in TDS and Advance Tax Calculations, Favoring Assessee. Case-Laws - AT : The Appellate Tribunal addressed the issue of refund of excess taxes claimed by the Assessee due to a difference in the amount of TDS and Advance Tax as computed by the Department compared to what was reflected in Form 26AS. The Tribunal held that u/s 240(b) of the Act, the Assessee was eligible for the refund. The assessment showed a shortfall in the refund payable to the Assessee, as the correct amount was higher than what was initially refunded. The Assessee had already paid the excess amount through Advance tax and TDS, as evidenced by Form 26AS. The Tribunal directed the revenue authorities to refund the due amount to the Assessee, along with applicable interest u/s 244A of the Income Tax Act, 1961. The appeal of the Assessee was allowed. Visit to Get Source Corpus donation: The tribunal ruled that the amended provision of section 11(1)(d) is not applicable for AY 2018-19. Case-Laws - AT : The Appellate Tribunal considered the applicability of u/s 11(1)(d) regarding the treatment of corpus donation as income from other sources. It held that the amended provisions introduced by the Finance Act, 2021 were not applicable for the assessment year 2018-19. The Tribunal found that the authorities erred in applying u/s 11(1)(d) retrospectively and set aside their orders. The decision favored the assessee as the amended provisions were not legally sustainable for the relevant assessment year. Visit to Get Source Income accrual in India not taxable as FIS/FTS. No tech services provided. Addition deleted. Software sale not FTS. Case-Laws - AT : The ITAT considered the taxability of income in India as Fees for Included Service (FIS) or Fees for Technical Services (FTS) received by a non-resident corporate entity from its Indian subsidiary for management services. The AO failed to demonstrate that technical knowledge was made available by the assessee to the Indian subsidiary. The DRP mechanically endorsed the AO's view without proper examination. The ITAT directed deletion of the addition as FTS/FIS. Additionally, the ITAT found that the receipts from the sale of software to a bank were for software licenses, not services, and should not be treated as FTS. The ITAT held that the amount in dispute is not taxable as FTS and directed the AO to delete the addition. Visit to Get Source Assessee not liable for advance tax due to no taxable income. Appeal should be admitted for further review. Case-Laws - AT : The Appellate Tribunal held that the non-admission of appeal for non-payment of advance tax u/s 249(4)(b) was not justified. The assessee declared no taxable income, only agricultural income exempted under the Act 61. The computation showed non-taxable income and no liability to pay advance tax u/s 207 and 209. The CIT(A) should have admitted the appeal for adjudication on merits. The order was set aside, and the case was restored for proper verification and hearing, with the amount of advance tax payable considered as NIL. The appeal of the assessee was allowed for statistical purposes. Visit to Get Source ITAT Rules Bonus Shares Not Dividend Income; Sections 2(22)(b) and 56(2)(viia) Inapplicable to Equity Shareholders. Case-Laws - AT : The ITAT considered the issue of addition u/s 2(22)(b) r.w.s. 56(2)(viia) concerning the treatment of bonus shares received by the assessee. The AO treated the bonus shares as dividend, but the assessee argued that bonus shares do not result in income or asset value increase. The ITAT held that bonus shares issued to equity shareholders do not fall within the scope of Sec. 2(22)(b) as it pertains to preference shares. Citing legal precedents, it was established that bonus shares do not involve profit distribution and do not alter the company's capital structure. The value of original shares decreases with bonus shares issuance, balancing any profit gained. As no fresh funds are received, Sec. 56(2)(vii)(c) does not apply. The decision favored the assessee, rejecting the revenue's claim. Visit to Get Source Reassessment against dissolved company turned LLP is invalid. Dead person notice void. Case-Laws - AT : The ITAT held that reopening assessment against a deceased person, a non-existing company converted into LLP, is invalid. The company's status as "dissolved" on MCA data means it lost existence. As per sec 2(31), it cannot be assessed. The reassessment u/s 147/148 by AO is without jurisdiction and set aside. Notice u/s 147 and order u/s 144 r.w.s. 147 are quashed. Decision favors assessee. Visit to Get Source Appellant granted right to collect toll considered intangible asset eligible for depreciation @ 25%. Case-Laws - AT : The Appellate Tribunal held that the right to collect toll in a BOT project constitutes an intangible asset, allowing for depreciation u/s 32(1)(ii) of the Act. Citing a previous judgment, it was established that the right to operate the toll road/bridge and collect toll charges qualifies as a business or commercial right. Therefore, the appellant is eligible for depreciation on the intangible asset created through the construction of the road under the BOT contract. The appellant can claim depreciation at a rate of 25% on the road construction, as permissible for intangible assets. Consequently, the appeal of the assessee was allowed. Visit to Get Source Assessee wins appeal! Declaring income u/s 44AD protects from additions u/s 68. Bank passbook not a book of accounts. Case-Laws - AT : The Appellate Tribunal considered a case involving additions u/s 68 where the assessee declared income u/s 44AD for trading grey clothes. The Assessing Officer deemed the trading activity non-genuine due to insufficient documentary evidence. The CIT(A) ruled in favor of the assessee, stating no addition can be made u/s 68 when income is declared u/s 44AD. The Tribunal noted that books of accounts exclude bank passbooks and since the assessee declared income u/s 44AD on a presumptive basis, no requirement for maintaining books of accounts existed. Therefore, the addition u/s 68 on the entire turnover declared u/s 44AD was deemed unjustified, leading to the allowance of the assessee's appeal. Visit to Get Source Assessee's registration application u/s 12AB rejected for not proving activities' genuineness. Tribunal grants another chance for proper hearing. Case-Laws - AT : The ITAT considered the grant of registration u/s 12AB, where the assessee's application was rejected for non-compliance and failure to prove genuineness of activities. The company incorporated in 2021 filed for registration in 2022 with financial statements. The ITAT found the CIT(E)'s decision incorrect as the final accounts were filed. Donation and expenditure details were provided, supported by receipts and bills. The AO accepted the expenditure in a previous assessment. The ITAT concluded the assessee is engaged in charitable activities and deserves another opportunity to be heard by the CIT(E) for a fair decision. The appeal was allowed for statistical purposes. Visit to Get Source Validity of summoning order under Benami Act by Special Court in Lucknow for trial of offences. No illegality found. Case-Laws - HC : The High Court examined the validity of a summoning order u/s 53 r.w.s. 3 of the Benami Act, challenged on the grounds of territorial jurisdiction. The Ministry of Finance designated a Special Court u/s 50 of the Benami Act for certain districts, including where the alleged transactions occurred. The Initiating Officer found unaccounted cash deposited in a bank account during demonetization, leading to a complaint filed before the Special Court. Section 202 Cr.P.C. mandates an enquiry to determine if there are sufficient grounds for proceeding, which was satisfied in this case. The summoning order was deemed legal, as it fulfilled the requirements of Section 202 Cr.P.C. and did not cause a failure of justice. Visit to Get Source Tribunal Rules No Penalty for Assessee's Honest Mistake in Tax Filing, Dismissing Revenue's Claim of Inaccurate Income Disclosure. Case-Laws - AT : The Appellate Tribunal considered a case involving penalty u/s 271(1)(c) for furnishing inaccurate particulars of income. The Assessee did not disclose non-eligibility of brought forward losses in the return. The Assessee voluntarily paid additional taxes before assessment proceedings. The Tribunal held that the Assessee's actions were not deliberate inaccuracies. The Tribunal found no concealment or inaccurate particulars at the time of filing the return. The Tribunal dismissed the Revenue's claim that the Assessee could have claimed a refund if not selected for scrutiny. The Tribunal emphasized that the Assessee's explanation was bona fide and that the penalty under u/s 271(1)(c) was not justified. The Tribunal ruled in favor of the Assessee, stating that the conditions for imposing the penalty were not met. Visit to Get Source Revision u/s 263: ITAT ruled in favor of the assessee on eligibility for deduction u/s 80G. No error found in AO's decision. Case-Laws - AT : The ITAT, an Appellate Tribunal, considered a case involving a revision u/s 263 by the CIT regarding the eligibility to claim deduction u/s 80G for donations made under CSR activities. The ITAT held that the Principal CIT should conduct necessary inquiries before deeming the AO's order as erroneous. It was emphasized that if queries were raised during assessment and responded to by the assessee, it does not imply a lack of application of mind by the AO. The ITAT found the assessee eligible for the deduction u/s 80G, with no dispute on the genuineness of contributions. As the AO had applied his mind and verified facts, the ITAT set aside the CIT's order, ruling in favor of the assessee. Visit to Get Source Loss from selling shares on stock exchange can be set off against long-term capital gain from unlisted shares. Case-Laws - AT : The ITAT held that u/s 10(38), only long term capital gain from sale of shares/securities is exempt, not the entire source. Citing Royal Calcutta Turf Club case, it ruled that if a source is not excluded from charging section, only specific income is exempt. Loss from shares with STT can offset long term capital gain from unlisted shares. AO directed to allow set off. The decision emphasizes strict interpretation of law when only specific income is exempted. Visit to Get Source Assessment u/s 153A: Approval u/s 153D granted mechanically without due application of mind. Approval for all years on same day not valid. Case-Laws - AT : The case involved a challenge to the validity of approval u/s 153D for assessment u/s 153A. The Appellate Tribunal found that the approval granted by the JCIT was mechanical without due application of mind. The approval covered multiple assessment years in a single day, contrary to the requirement of section 153D. Citing a similar case, it held that such approval without proper consideration is fatal to search assessment proceedings. The Tribunal concluded that the approval was granted in a mechanical manner, rendering it an empty ritual, and ruled in favor of the assessee. Visit to Get Source ITAT Upholds Assessee's Contractor Expense Claims; Sales-Tax Subsidy as Capital Receipt; 14A Provisions for AO Review. Case-Laws - AT : The ITAT upheld the assessee's claim for expenses paid to contractors for loading and unloading, as supported by banking transactions and TDS deductions. Contractors confirmed providing labor, and cash withdrawals were for labor payment. The AO's claim of ex-employees as contractors was justified for reliable labor supply. The allegation of unexplained investment in land purchase was dismissed as the deal did not materialize. Sales-tax subsidy was deemed a capital receipt, requiring quantification by the AO. The matter of 14A provisions was remanded to the AO for further examination. Visit to Get Source Levy of penalty: ITAT ruled in favor of assessees on taxability of secondment receipts, citing bonafide belief & full disclosure. Case-Laws - AT : The case involved a dispute over the taxability of reimbursement of salary expenses of seconded employees as Fees for Technical Services (FTS) and levy of penalty u/s 271(1)(c) or 270A. The Appellate Tribunal found that the Assessee had a bonafide belief regarding the taxability of the receipts and eventually offered them for taxation. The Tribunal referred to a judgment stating that such reimbursements are not liable to tax deduction at source. The Assessee had disclosed the receipts in Form 3CB and provided explanations to lower authorities. The Tribunal held that there was no concealment of income and no penalty should be levied u/s 271(1)(c) or 270A. The penalty was deleted in favor of the Assessee. Visit to Get Source ITAT ruled in favor of the assessee on disallowance of business promotion expenses and cessation of liability. Case-Laws - AT : The ITAT ruled on two issues: 1. Disallowance of Business Promotion Expenses: AO disallowed expenses for a get-together, citing lack of proof of business purpose. CIT(A) upheld, but ITAT found the expenses legitimate due to revenue from operations, accepted expenses, and TDS payment to caterer. AO's disallowance was deemed incorrect. 2. Cessation of Liability u/s 41(1): AO added outstanding professional fees as income u/s 41(1) for being unpaid over 3 years. ITAT disagreed, noting the liability in financial statements indicates intent to settle. Addition was deemed incorrect, and AO was directed to delete it. Assessee's appeal was allowed. Visit to Get Source Tribunal Overturns Commissioner's Section 263 Revision, Emphasizes Objective Standards for Assessing Officer's Decisions on Capital Gains. Case-Laws - AT : The Appellate Tribunal considered a case involving a revision u/s 263 regarding short-term and long-term capital gains. The Commissioner held the Assessing Officer's order as erroneous and prejudicial to revenue due to lack of enquiry. The Tribunal noted that the Commissioner did not question the AO's enquiries before deeming the order erroneous. The Commissioner's opinion should be based on objective satisfaction, not subjective. Merely seeking more enquiries does not justify setting aside the order. Failure to point out errors in the assessee's explanations led the Tribunal to rule in favor of the assessee, emphasizing the need for finality in assessments. Visit to Get Source Appellate Tribunal Affirms Key Tax Principles, Allows Revenue Expense Claims, Orders Reassessment of Transfer Pricing Issues. Case-Laws - AT : The Appellate Tribunal addressed various issues in the case. Firstly, regarding disallowance u/s. 14A r.w.r. 8D, the Tribunal upheld the consistency principle in the methodology of computation accepted in prior years. Secondly, it ruled in favor of the assessee on the nature of expenses, considering expenditure on shelved projects as revenue. Thirdly, it allowed prior period expenditure disallowance based on mercantile accounting. Fourthly, it reversed the disallowance of discount on Euro Notes issuance. Fifthly, it directed the AO to decide on premium deduction impact u/s. 80IA based on previous rulings. Sixthly, it upheld the deduction claim u/s. 80IA for a wind power project. Seventhly, it remanded the issue of duplicate disallowance for re-examination. Lastly, it addressed Transfer Pricing adjustments, including guarantee fees and loan interest, directing the TPO to reconsider certain aspects for TP adjustments. Visit to Get Source Appellate Tribunal Confirms Executive Pay Provision, Resolves TDS Credit Issue, Remands Deferred Grant for Further Review. Case-Laws - AT : The Appellate Tribunal addressed several issues. Firstly, regarding the impact of pay revision of executives, it was held that the provision made by the assessee company for pay revision was justified, as the Delhi High Court's subsequent ruling supported the assessee's position. The provision of Rs. 17.65 crore was deemed necessary for the pay revision. Secondly, the non-grant of TDS credit due to income mismatch was dismissed as the issue had already been resolved by the assessing officer and CIT(A). Lastly, the amortization of deferred grant issue was sent back to the AO for re-verification and re-adjudication, as the AO had rejected the explanations without specific findings. Fairness and natural justice dictate that the issue be reconsidered with the opportunity for the assessee to be heard. Visit to Get Source Customs Baggage contained Dexamethasone, a dutiable item. Respondents convicted for evading duty. Fined Rs. 50,000 each. Case-Laws - HC : The High Court considered the acquittal of respondents u/s 135(1)(ii) of the Customs Act. Dexamethasone is a dutiable item u/s Customs Tariff Act. Statements u/s 108 were valid. Prosecution initiated despite declaration of Dexamethasone. Adjudication proceedings confirmed evasion of duty. Respondents convicted for evasion. Confiscation ordered with redemption option. Respondents fined Rs. 50,000 each, no imprisonment due to redemption. The trial court's acquittal was overturned. Appeal of the department (Revenue) allowed. Visit to Get Source Petition dismissed: Gold released by Customs Department cannot be granted relief against provisional attachment order. ED can proceed. Case-Laws - HC : The High Court held that the petitioner cannot obtain relief against the provisional attachment order u/s PMLA. The court noted that the gold was released by the Customs Department based on authorization u/s SEZ Act before its suspension. The release of gold did not impact the Enforcement Directorate's proceedings to recover crime proceeds. The provisional order must be finalized within 180 days u/s 8 of the Act, with the deadline set for 27.07.2024. The petition was dismissed. Visit to Get Source Restoration application for appeal before CESTAT: Appellant complied with mandatory pre-deposit. Appeal allowed. Case-Laws - HC : The High Court addressed the dismissal of a restoration application for appeal u/s 112(a) and (b) of the Customs Act, 1962, focusing on compliance with mandatory pre-deposit. The appellant had deposited Rs. 15 lakhs in 2017, showing good faith. The Court noted the appellant's compliance with Sec. 129 A (1) of the Act and pre-deposit requirements. The Tribunal should have allowed the appellant to pursue the appeal after addressing the pending Writ Petition. Dismissing the appeal in limine was deemed unreasonable. The Tribunal should have given the appellant a chance to challenge the imposed penalty of Rs. 2 crores on its merits. The appeal was ultimately allowed. Visit to Get Source Appellant mis-declared goods to evade customs duty, using ineligible licenses. Extended period justified. Show Cause Notice time-barred. Case-Laws - AT : The case involves mis-declaration of imported goods to evade customs duties. The appellant declared goods as 100% Cotton fabrics to misuse duty exemption under DFRC licenses, while actually importing 65% poly and 35% Cotton fabrics. The fabrication of documents was admitted, leading to evasion of customs duties. The invocation of extended period was deemed justified. However, the Show Cause Notice issued was held time-barred as it exceeded the 5-year limit u/s 28(4) of the Customs Act, 1962. CESTAT held in a previous case that such notices beyond 5 years are invalid. Therefore, the appeal was allowed, and the Commissioner's order was set aside. Visit to Get Source CESTAT ruled on confiscation of imported goods & penalties u/s 111(d) & 112(a) of CA 1962 when re-exported. Case-Laws - AT : The case involved confiscation of imported goods u/s 111(d) of CA 1962, re-exportation, redemption fine, and penalty u/s 112(a). Goods were imported in contravention of EPR, 1986 making them 'prohibited goods'. Confiscation u/s 111(d) precedes redemption u/s 125. Re-export permission is an administrative process post redemption. No redemption fine on re-exported goods as title vests with govt. Penalty u/s 112(a) is for breach of duty, not cured by re-export. Appellate Tribunal upheld the order, rejecting appellant's claims. Visit to Get Source CESTAT ruled refund claims filed under protest within time limit are valid. Assessment not challenged. Revenue appeals dismissed. Case-Laws - AT : The case involved a dispute over a refund claim u/s 11B of the Central Excise Act. The Appellate Tribunal held that the time limitation for filing the refund claim did not apply as the duty was paid under protest. The Tribunal also ruled that the refund claims were valid even though the assessment of bills of entry was not challenged. The Revenue's argument that the refund claims were not maintainable without challenging the assessment was rejected. The Tribunal dismissed the Revenue's appeals, finding no merit in their arguments. Visit to Get Source CESTAT ruled on levy of Redemption fine for steel coils import. DGFT's MIP notification valid. Customs bound by DGFT notifications. Case-Laws - AT : The case involved the clearance of hot dipped galvanized steel coils below the minimum import price set by DGFT. The Tribunal upheld the validity of the minimum import price notification u/s 3 of the FTDR Act. The appellant's argument that the notification was not applicable was rejected. The Tribunal emphasized that Customs must adhere to DGFT notifications. Citing a similar case, the Tribunal justified the imposition of a redemption fine. However, considering the unique circumstances, the redemption fine was reduced to Rs. 8,00,000. Appeal partially allowed. Visit to Get Source IBC Writ Petition on Electricity Dues Deemed Maintainable Despite Alternative Remedy, Court Allows Resolution Plan Execution. Case-Laws - HC : The High Court addressed the maintainability of a writ petition concerning the recovery of electricity dues from the petitioner after it was taken over u/s 31(1) of the Insolvency and Bankruptcy Code. The court noted that the approved resolution plan binds all creditors, including government authorities. Public announcements were made for creditors to submit claims, and the resolution plan was approved by the NCLT. The court allowed the deposit of the resolution amount into an Escrow account for distribution to creditors. The court found the petition maintainable despite the availability of an alternative remedy u/s 60(5)(c) of the I&B Code, as the petitioner sought a mandamus due to the respondents denying electricity connections based on pending dues. The petition was allowed. Visit to Get Source Service Tax Services for Overseas Clients Deemed Export, Exempt from Tax Under Finance Act 1994; Tax Demands Overturned. Case-Laws - AT : The case involved determining whether services provided to overseas clients constituted export of services u/s Finance Act, 1994. The Tribunal held that services falling outside taxable territory, meeting Rule 6A conditions, qualify as export. The services were rendered abroad, consideration received in foreign exchange, hence no service tax. Place of Provision of Services Rules, 2012 applied, with exceptions like performance-based services. Rule 4 applied as services were performed on goods physically available with service provider or through remote access. As goods were with overseas clients, place of provision was outside India. Thus, services were deemed export u/s Sections 66B, 66C, Rule 6A, and Rule 4. The order confirming demands was set aside, appeal allowed. Visit to Get Source Tribunal Rules M&A Services as Taxable Business Consultancy; Upholds Penalties, Orders Recalculation of Tax and Penalty. Case-Laws - AT : The case involves the classification of services as Management or Business Consultant Services for tax purposes, specifically in relation to merger and acquisitions. The tribunal held that services provided by the appellant fall under Business and Management Consultant Services based on their brochure and a Board clarification. The Chennai Bench decision emphasized that management tasks extend beyond core business activities. The appellant's services also include Legal Consultancy Services, which should be excluded from tax calculation pre-2009. The tribunal upheld the levy of tax on merger and acquisition services, citing a 2001 Board circular. The appellant's failure to register and pay tax was deemed non-bonafide, justifying the extended limitation period for demand. Interest and penalties were upheld, with a remand for re-determination of tax quantum and penalty. The appeal was partly allowed, and the matter was remanded for further proceedings. Visit to Get Source CESTAT ruled in favor of appellant on service tax issue related to foreign bank charges. Indian bank liable for service tax. Case-Laws - AT : The case involved a dispute u/s business auxiliary services and reverse charge mechanism for foreign bank charges. The Appellate Tribunal held that since the appellant had no direct dealing with the foreign bank, any taxable service would be between the foreign bank and Indian bank. The Indian bank, not the appellant, was liable for service tax. The appellant had already paid service tax to the Indian bank. The Tribunal found the demand unsustainable, setting aside the order and allowing the appeal. The issue was not new, leading to the decision in favor of the appellant. Visit to Get Source Processing and manufacturing services did not qualify as 'manpower recruitment or supply agency service'. Case-Laws - AT : The case involved classification of services provided by the Appellant to M/s. Jindal Stainless Steel Ltd. as either manpower recruitment or business auxiliary service. The Tribunal held that the services rendered by the Appellant for processing and manufacturing did not qualify as "manpower recruitment or supply agency service" but fell under business auxiliary service, exempt from service tax. The demand for service tax based on accounting errors was remanded for clarification. The demand for service tax on services rendered as a sub-contractor was restricted to the period after 23.08.2007. The Tribunal set aside penalties and disposed of the appeal. Visit to Get Source Central Excise Appellate Tribunal Affirms Exemption Benefits Despite Procedural Lapses; SCN Scope Limited to Cited Provisions. Case-Laws - AT : The case involved the Appellate Tribunal addressing issues regarding the scope of Show Cause Notice (SCN) and compliance with Customs notifications. The Tribunal held that invoking provisions not cited in the SCN was beyond its scope. The appellant, not the importer, was entitled to benefits under specific notifications as goods were certified for International Competitive Bidding. Non-compliance with furnishing an undertaking by the CEO was deemed a procedural lapse, as substantial compliance with notification provisions was evident. Failure to produce a required certificate to the Deputy Commissioner was also considered procedural, as the Ministry had supplied the certificate directly to the department. The Tribunal emphasized that substantial compliance with exemption notifications should not be denied due to procedural lapses. Consequently, the impugned order was set aside, and the appeal was allowed. Visit to Get Source Refund Denied: Tribunal Rules Assessment Orders Must Be Challenged Through Appellate Proceedings for Duty Disputes. Case-Laws - AT : The case involves a 100% Export Oriented Unit (EOU) seeking a refund of excess duty paid along with interest. The EOU had deposited an additional amount of duty as per the department's demand, which was later found to be incorrect. The EOU had not challenged the assessment order before any Appellate Authority. The Tribunal held that provisions of refund under Section 27 of the Customs Act and Section 11B of the Central Excise Act are only executionary and cannot modify assessment orders. Citing the case of ITC Ltd, the Tribunal emphasized that appellate proceedings should have been pursued to challenge the assessment orders. Referring to the case of Mafatlal Industries, the Tribunal dismissed the appeal, stating that assessment/adjudication made under the Act cannot be ignored based on later legal interpretations. Visit to Get Source Case Laws: GST 2024 (6) TMI 343 Violation of principles of natural justice - petitioner s reply and documents annexed thereto not taken into consideration - Reversal of Input Tax Credit availed by the petitioner - HELD THAT:- On perusal of the impugned order dated 22.04.2024, it is evident that the petitioner s reply and documents annexed thereto, including the certificate from the supplier, were taken into consideration. In effect, it cannot be said that there was violation of principles of natural justice. In the impugned order, reasons are set out for rejecting the supplier s certificate produced by the petitioner. In this factual context, this is not an appropriate case for exercising discretionary jurisdiction. The impugned order is dated 22.04.2024 and the petitioner is within the period of limitation prescribed by statute. Petition disposed off. 2024 (6) TMI 342 Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - mismatch between the GSTR 3B return and the GSTR 1 statement - HELD THAT:- The tax liability pertains to mismatch between the GSTR 3B return and the GSTR 1 statement. Learned counsel for the petitioner has placed on record prima facie evidence that GST was computed at the rate of 36% in respect of certain items in January and February of the relevant assessment period. It is also clear from the impugned order that the tax proposal was confirmed because the petitioner did not respond to the show cause notice or participate in the personal hearing. In the circumstances outlined above, the interest of justice warrants that an opportunity be provided to the petitioner especially because a substantial portion of the tax demand was recovered. The impugned order dated 30.10.2023 is set aside and the matter is remanded for reconsideration by the respondent. The petitioner is permitted to submit a reply to the show cause notice dated 21.09.2023 within a period of two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand. 2024 (6) TMI 341 Violation of principles of natural justice - petitioner s reply to the show cause notice was not taken into consideration - mismatch between the petitioner s GSTR 3B returns and the GSTR 1 statement as well as between the petitioner s GSTR 3B returns and the auto-populated GSTR 2A - HELD THAT:- In the reply to the show cause notice, the petitioner has explained the alleged discrepancy between the GSTR 3B and GSTR 1 by pointing out that the discrepancy is on account of not reckoning the total value of credit notes. The petitioner has placed on record the GSTR 1 statement and the annual return in GSTR 9. Both these documents reflect the total value of credit notices as Rs. 68,91,320/-. As regards the variation in input tax credit between the GSTR 3B returns of the petitioner and the auto-populated GSTR 2A, the petitioner has explained the difference by pointing out that one of the suppliers, S.M.Network, did not reflect invoices for supplies made by such supplier. In spite of the petitioner s GSTR 1 statement and the annual return in GSTR 9 being available, no reasons are specified as to why the petitioner s explanation was rejected. Even with regard to the discrepancy between the petitioner s GSTR 3B returns and the auto-populated GSTR 2A, in spite of the petitioner enclosing the relevant invoices to explain the discrepancy, the impugned order does not discuss the explanation and record reasons for rejecting the same. Consequently, the impugned order cannot be sustained. The impugned order dated 28.09.2023 is set aside and the matter is remanded for reconsideration - Petition disposed off by way of remand. 2024 (6) TMI 340 Extension of limitation for assessment u/s 74 or issuing SCN. Notification No. 09/2023 issued by the authorities of CGST dated 31.03.2023 - during the currency of the writ petition, the interim orders was issued - order issued by the respondent authorities u/s 73(9) of the CGST Act, 2017/Assam GST Act, 2017 - HELD THAT:- Let the respondents complete their instructions and file necessary affidavit, if any. In the meantime, till the next returnable date, no coercive action initiated against the writ petitioner. Issue Notice Returnable by 12.06.2024 - Let the matter be listed again on 12.06.2024. 2024 (6) TMI 339 Order u/s 73 SGST/CGST Act, 2017 - alleged excess claim of input tax credit - no SCN issued rather a summary of the show-cause notice was issued which is contrary to the provisions mandated under the Section 73 of the Act and Rule, 142 of the Rules - Violation of principles of natural justice - HELD THAT:- Let Notice be issued, returnable by 4 (four) weeks. Mr. B. Chowdhury, learned Standing Counsel, CGST accepts notice on behalf of the respondents no. 1 to 3 and Mr. D.J. Das, learned CGC accepts notice on behalf of the respondent no.4. Since all the respondents are represented by their respective counsel, Notices are waived. However, extra copies of the petition be served to them within a period of 1 (one) week from today. Let the matter be listed on 24.06.2024. Till the next date fixed, the impugned order of demand dated 28.04.2024 shall remain stayed. Income Tax 2024 (6) TMI 338 Validity of the Summoning Order - Applicability of Section 202 Cr.P.C. in the context of the Benami Act - trial of offences punishable under the Benami Act - validity of the summoning order on the sole ground that the applicant resides at New Delhi, i.e. beyond the territorial jurisdiction of Court which has passed the summoning order cognizance of the offence and summoning the applicant to face the trial - validity of an order passed by Additional Sessions Judge, Lucknow whereby the trial court has taken cognizance of offence u/s 53 r.w.s. 3 of the Prohibition of Benami Property Transaction Act and he has been summoned to face trial. HELD THAT:- In exercise of powers conferred by Section 50 of the Benami Act, the Ministry of Finance, Government Of India has issued a Notification dated 16.10.2018 whereby IX Additional District Sessions Judge, Lucknow has been designated as the Special Court for the purpose of trial of offences punishable under the Benami Act for certain Districts, including Ghaziabad District, where the cash amount of Rs. 30,00,000/- was deposited in the Bank account of M/s Shyam Trading Company and from where an amount of Rs. 7,50,000/- was transferred to the Bank account of the applicant. Therefore, the Complaint has rightly been filed before the Special Court constituted under Section 50 of the Benami Act. Applicability of Section 202 Cr.P.C - The Initiating Officer, Benami Prohibition Unit conducted an enquiry, during which the applicant admitted that the amount deposited in the bank account of M/s Shyam Trading Company was unaccounted cash, which was deposited during demonetization. After enquiry, the Initiating Officer found that the aforesaid property was Benami property and he passed an attachment order under Section 24(4) of the Benami Act. The adjudicating Authority gave an opportunity of hearing to the applicant, during which the applicant admitted on oath that the aforesaid sum of Rs. 7,50,000/- deposited into the bank account of M/ s Shyam Trading Company was the applicant s unaccounted cash, which was deposited during demonetization period and had been transferred to his bank account. Thereafter the complaint was filed after obtaining sanction from Principal Director, Income Tax (Investigation) before the Special Court having jurisdiction under the Act. Section 202 Cr.P.C. merely directs that the Magistrate shall hold an enquiry inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding. Section 202 Cr.P.C. does not prescribe the manner of holding an enquiry under this provision. The Special Court has passed the impugned order taking cognizance of the offence and summoning the applicant after taking into consideration the aforesaid facts and after recording a satisfaction that from the averments made in the complaint and the documents filed with the complaint, there is sufficient ground for proceeding against the applicant. The limited enquiry which the Magistrate can hold at this stage is meant to ascertain whether any case for summoning the accused person is made out. The perusal of the averments made in the complaint made by the Union of India through a Public Servant and examination of the documents accompanying the complaint was sufficient for holding an enquiry under Section 202 Cr.P.C. for recording a satisfaction that there is sufficient ground for proceeding against the applicant. The summoning order passed after taking into consideration the averments made in a complainant filed by the Union of India through a public servant, after perusing the documents filed with the complaint and after recording a satisfaction that there is sufficient ground for proceeding against the applicant, fulfills the requirement of holding an enquiry under Section 202 Cr.P.C. In view of the aforesaid discussion, there appears to be no illegality in the impugned order taking cognizance of the offence and summoning the applicant to face the trial and in any case, it does not cause a failure of justice to the applicant. 2024 (6) TMI 337 Applicability of section 11(1)(d) - retrospective nature of the amendment introduced by the Finance Act, 2021 - treatment of corpus donation received by the assessee as income from other sources - HELD THAT:- Amended provisions of section 11(1)(d) were not applicable. The amended provisions of section 11(1)(d) were introduced by Finance Act, 2021 and made applicable from 01.04.2022. Thus, the amendment to section 11(1)(d) which makes it mandatory to assessee to invest or deposit voluntary contribution received during the year in one or more forms specified in section 11(5) of the Act is not applicable to AY 2018-19 i.e. AY under consideration. Therefore, it is abundantly clear that authorities below are erred in invoking the provisions of section 11(1)(d) which is not legally sustainable. Accordingly, we hold that authorities below have erred and the orders of the authorities below are set aside. Hence, the issue is decided in favour of the assessee. 2024 (6) TMI 336 Assessment u/s 153A - Validity of the approval u/s 153D - As argued approval granted by the Joint Commissioner of Income Tax (JCIT) u/s 153D was mechanical and without due application of mind - HELD THAT:- As gone through the approval granted by the ld. JCIT on the date mentioned in the table hereinabove u/s 153D of the Act. The said approval letter clearly states that a letter was filed by the Ld. AO before the ld. JCIT seeking approval of draft assessment order u/s 153D of the Act. The ld. JCIT has accorded approval for the said draft assessment orders on the very same day for various assessment years. In any event, whether is it humanly possible for an approving authority like the ld. JCIT to grant judicious approval u/s 153D of the Act for all the assessment years on a single day is the subject matter of dispute before us. Further, section 153D of the Act provides that approval has to be granted for each of the assessment year whereas, in the instant case, the ld. JCIT has granted a single approval for all assessment years put together. Similar issue has been addressed in the case of PCIT vs. Anju Bansal [ 2023 (7) TMI 1214 - DELHI HIGH COURT] wherein, under similar circumstances, it is held that statutory approval given by a quasi judicial authority without due application of mind as contemplated in section 153D of the Act would be fatal to the entire search assessment proceedings. Thus no hesitation in holding that the approval u/s 153D of the Act has been granted by the ld. JCIT in the instant case before us in a mechanical manner without due application of mind, thereby making the approval proceedings by a high ranking authority, an empty ritual. Decided in favour of assessee. 2024 (6) TMI 335 Estimation of income - bogus purchases - HELD THAT:- We find that issue under consideration is covered by the decision of Pankaj K. Chaudhary [ 2021 (10) TMI 653 - ITAT SURAT ] wherein the Tribunal has sustained the addition @ 6% of bogus purchases. Since the issue herein is same therefore, following decision and to maintain consistency, we confirm the addition @ 6% of bogus purchases. Hence, we partly allow the appeal of the assessee. 2024 (6) TMI 334 Refund of excess taxes claimed by Assessee - Credit for TDS as difference in the amount of TDS and Advance Tax as computed by the Department from the one that was reflected in Form 26AS - difference between the amount as computed by the department, actually chargeable under the Act and as reflected in Form 26AS, actually paid by the Assessee for the relevant assessment year - HELD THAT:- Clause (b) of section 240 of the Act is applicable in this case and the Assessee becomes eligible to get the refund - Assessment was completed and the refund of the excess was to be payable to the Assessee, which was not given. The computation of the tax payable by or refund due to the Assessee is determined only after adjusting the amounts of tax deducted at source, tax collected at source, any advance tax paid, etc. by the Assessee, from the tax, which was required to be paid by it, as per section 143(1)(c) of the Act. The refund generated to the Assessee was Rs. 65,99,880/- whereas the correct refund was Rs. 73,40,257/-. Hence, refund was short paid to the Assessee by Rs. 7,40,377/-. Since the Assessee had already paid this amount in the form of Advance tax and TDS, refund was to be given to it. The excess tax paid by the Assessee can clearly be seen from Form 26AS of the AY 2010-11, Advance tax paid amounting to Rs. 33,71,360/- and Tax deducted at source Rs. 44,68,604/-. The Assessee has shown the same in his previous replies also by attaching Form 26AS. The question here is not claiming any deduction or exemption, simply the refund of the prepaid taxes which have been paid by the Assessee in excess to the Government treasury and ought to be refunded to the Assessee. Hence, we direct the revenue authorities to refund the amount due for the assessee along with the eligible interest as per provisions of Section 244A of the Income Tax Act, 1961. Appeal of the assessee is allowed. 2024 (6) TMI 333 Depreciation on intangible assets - right to collect toll @ 25% - right to collect toll granted to the appellant due to its capital investment in the BOT project-by treating the right to collect toll as intangible assets - HELD THAT:- The rights under BOT projects have been considered to be intangible assets in judgment of M/s. Progressive Construction Limited, Hyderabad [ 2014 (11) TMI 401 - ITAT HYDERABAD ] wherein held undisputedly by virtue of C.A. the assessee has acquired the right to operate the toll road/bridge and collect toll charges in lieu of investment made by it in implementing the project. Therefore, the right to operate the toll road/bridge and collect toll charges is a business or commercial right as envisaged under section 32(1)(ii) r/w Explanation 3(b) of the said provisions. Therefore, In our considered opinion, the assessee is eligible to claim depreciation on WDV as an intangible asset. Thus expenditure incurred by the assessee for construction of road under BOT contract by the Government of India has given rise to an intangible asset as defined under Explanation 3(b) r/w section 32(1)(ii) of the Act. Hence, assessee is eligible to claim depreciation on such asset at the specified rate - Assessee is entitled to claim depreciation @25% on road construction as admissible on intangible assets. Assessee appeal allowed. 2024 (6) TMI 332 Reassessment proceedings against deceased person i.e. non-existing company - conversion of company into LLP - data of MCA shows the status of the assessee-company as dissolved - HELD THAT:- The notice for reopening of assessment against a dead person is invalid and therefore consequential re-assessment framed by the AO u/s 147/148 is also invalid. After the Aaradhan Exim Pvt. Ltd. was converted into Aaradhan Exim LLP, it lost its existence and hence it cannot be treated as a person u/s 2(31) of the Act, against whom assessment or re-assessment proceedings can be initiated. In view of the above facts, the re-assessment order passed u/s 147 by the Assessing Officer is treated as without jurisdiction and is liable to be set aside. Accordingly, we quash the notice issued u/s 147 of the Act and the resultant order passed u/s 144 r.w.s. 147 of the Act. Decided in favour of assessee. 2024 (6) TMI 331 Set off of loss arising out of quoted securities with STT paid against the long term capital gain on sale of unquoted shares - Assessee contended before us that the provisions of Section 10(38) of the Act provide for exemption of long term capital gain resulting from sale of shares / securities subject to fulfillment of certain conditions as enumerated in that section and the entire source has not been exempted - HELD THAT:- Nowhere any exclusion or exception has been provided to the long term capital gain resulting from sale of equity shares. In our opinion, its only the long term capital gain resulting from sale of shares/securities which was granted exemption u/s 10(38) subject to the fulfillment of certain conditions and not the entire source which was excluded from the aforesaid sections . Therefore we are of the considered view that when the entire source is not excluded from the charging section and only special type of income is excluded then the interpretation of law has to be made strictly and cannot be deemed to include the any other income or loss resulting or falling within the same source. The case of the assessee is squarely covered by the decision of Royal Calcutta Turf Club vs. CIT [ 1982 (6) TMI 21 - CALCUTTA HIGH COURT] wherein Hon ble High Court held that Section 10(27) of the Act excluded term only the income derived from a business of livestock breeding or poultry or dairy farming. The said section did not exclude the business of livestock breeding or poultry or dairy farming out rightly from the operation of the Act and therefore the loss suffered by the assessee was admissible deduction in computing the total income. If the source which produce the income is outside the ambit of charging provisions of the section in such case negative income or loss can be said to be outside the ambit of taxing provisions Consequently the negative income is also required to be ignored for tax purpose. In other words, where only one of the streams of income from a source is granted exemption by the legislature upon fulfillment of specified conditions then the concept of income includes loss would not be applicable. Thus, we are of the view that the loss incurred on the sale of shares on stock exchange platform, where STT was duly paid, is eligible to be set of against the long term capital gain earned by the assessee from sale of unlisted shares. Accordingly we set aside the appellate order and direct the AO to allow the set off of the loss against the long term capital gain as claimed by the assessee. Appeal of the assessee is allowed. 2024 (6) TMI 330 Disallowance of expenses related to payments made to contractors for loading and unloading for packing - assessee mainly argued that the payments were made via banking channel and after deducting the TDS and the contractor to whom the payments made were income-tax assessees and hence the assessee has successfully discharged its burden and the AO failed to bring any adverse material in this regard - HELD THAT:- We find that the issue of payments made to contractors is squarely covered in favour of the assessee by the order of ITAT [ 2024 (2) TMI 1388 - ITAT DELHI] CIT (A) in his order has given a finding that during the remand proceedings, 5 out of 6 contractors were produced before the AO and statements of these contractors were recorded by the AO. All of them confirmed that they have provided labour to the assessee company for packing and loading of finished product - As before the Id. CIT (A), assessee produced the sixth contractor whose statement was also recorded. In his statement, he confirmed to have supplied labor for packing, loading and unloading. Another plank of AO is that the employee of the assessee company used to withdraw cash from the contractor s bank account. CIT (A) has noted that he has perused the banks accounts and the entries of withdrawal were self. Therefore, he held that cash withdrawn by the contractors and the contractors during the statement accepted that the employee of the assessee company used to accompany him at the time of withdrawal of cash from the bank and cash used to be carried in company s vehicle and this arrangement was used to ensure for the payment distributed to labourers hired for the work of the company. Another plank of the AO is that these contractors are ex-employees of the assessee company. It has been submitted that this fact has been accepted. For this explanation, the assessee submitted that for continuous supply of labour, only reliable and known person can be deployed. Another plank of AO is that in the computer of the assessee, bills of these contractors were found. It has been submitted that all the contractors have prepared the bills at the premise of the assessee as these contractors were only supplying labour and did not have separate infrastructure. CIT (A) has also found that the salary and wages per kg. production is in the range of 10% to 25% of other industries and there was no adverse findings in this regard in the assessment order. Furthermore, books have not rejected. This ground is decided against the Revenue. Unexplained investment u/s 69 - assessee failed to prove the source of payment made in cash for purchase of land - HELD THAT:- Since no such land was ever purchased, the question of alleging cash payment does not arise at all. It is clear that the deal of purchase of the land in loose paper seized, has not taken place and therefore, there is no question of payment of cash for such alleged deal and it was only a proposal. As hold that alleged investment is not made, since, transaction has not materialized. Accordingly, agree with the argument of the appellant and therefore, findings of the A.O. are erroneous. Therefore, addition made u/s 69 of the Act, as unexplained investment, is deleted - we find no infirmity in the order of learned Commissioner (Appeals) and hence, the Revenue s appeal fails and dismissed on this ground also. Characterization of receipt - Sales-tax subsidy under Package Scheme of Incentives (Maharashtra), 1993 - HELD THAT:- Incentive Scheme of the State of Maharashtra and the purpose of the Scheme and also considering the judgment of Indo Rama [ 2024 (1) TMI 1228 - DELHI HIGH COURT] , we are of the firm view that subsidy received by the assessee was a capital receipt and hence the assessee s claim is allowed. Assessee has not provided the working of the quantum of the subsidy arrived in its books of account so we restore the matter back to the file of the AO for quantifying the exact amount of the subsidy after calling replies from the assessee and supportive documents in this regard. The issue of exemption of sales-tax subsidy has been principally accepted to be termed as capital receipts but for the limited purposes for the quantification of the figures, the matter is restored to the AO. Addition u/s 14A r.w.r. 8D - argument of the assessee is that Rule 8D and 14A provisions are only invokeable in respect of those investments from which the assessee has earned dividend - HELD THAT:- We are of the view that the issue of 14A may be restored to the AO for examining afresh in the light of the settled position of law as discussed hereinabove. Needless to say that the AO will afford reasonable opportunity to the assessee accordingly. 2024 (6) TMI 329 Revision u/s 263 by CIT - Eligibility to claim deduction u/s 80G for donations made under CSR activities - HELD THAT:- Pr.CIT before holding the order of the A.O. is erroneous should conduct necessary inquiries. AR submitted that the Pr.CIT has not considered the facts that the A.O has called for the information in the scrutiny assessement and hence there cannot be any non application of mind by the A.O. Further if any query is raised in the assessment proceedings and it was responded by the assessee, mere fact that it is not dealt with by the A.O. in the order cannot implied that there is no application of mind. We find that the A.O has considered one of the possible views based on the information and it is not necessary that the A.O should put all the discussions/observations in the assessment order, as per explanation (2) to sec 263 of the Act the authority has to invoke provisions only when there is no verification and enquiry conducted by the A.O. Whereas the A.O has applied his mind and verified the facts and has not doubted the genuineness of expenditure If any query is raised in the assessment proceedings and it was responded by the assessee, mere fact that it is not dealt within by the A.O. in the order cannot implied that there is no application of mind and the A.O. has applied one of the possible view. We find the assessee is eligible to claim deduction u/sec. 80G of the Act under Chapter VIA and also there is no dispute on the genuineness of the contributions and the activities of the Donees i.e the institutions/trust registered u/s. 80G of the Act. Hence, the action of the Pr.CIT cannot be acceptable as the order passed by the A.O. does not satisfy the twin conditions of erroneous and prejudicial to the interest of the revenue. Accordingly, we set aside the order of the Pr.CIT and allow the grounds of appeal in favour of the assessee. 2024 (6) TMI 328 TP adjustment in respect of payment of management fees - HELD THAT:- The appellant had entered into a global/regional management service agreement with AEs for providing various services. The appellant had paid management service fee to its AE on the basis of agreement entered into by the parties and claimed that the fee has been paid for rendering various services. TPO had made adjustment towards management fee on the ground that the assessee could not establish cost benefit from fee paid to AE and also failed to furnish necessary evidence to establish rendering of services by the AE. We find that an identical issue has been considered by the Tribunal in assessee s own case for the earlier A.Y and by considering the relevant facts, ITAT in appellant s own case [ 2023 (6) TMI 258 - ITAT HYDERABAD] has set aside the issue to the file of the AO with a direction to re-examine the claim of the assessee in light of agreement between the parties and any other evidences that may be filed by the assessee to prove its claim. In this view of the matter and consistent with the view taken by the Coordinate Bench in appellant s own case for the A.Y 2018-19 [ 2023 (6) TMI 258 - ITAT HYDERABAD] we are of the considered opinion that the issue needs to go back to the file of the Assessing Officer/TPO for fresh examination of the facts in light of agreement between the parties and any other evidence that may be filed by the assessee to justify payment of management fees. Thus, we set aside the order of the AO and restore the issue to the file of the AO/TPO. TP adjustment by imputing the interest on outstanding receivables relating to provision of services to its AEs - AO has made TP adjustment in respect of receivable from its AE on the ground that the assessee has allowed abnormal credit period when compared to normal credit period allowed to third parties - HELD THAT:- This issue is no longer res-integra. The Coordinate Bench of the Tribunal in appellant s own case [ 2023 (6) TMI 258 - ITAT HYDERABAD] for A.Y 2018-19 has considered an identical issue and after considering the relevant facts and also by following certain judicial precedents including the decision of the Hon ble Bombay High Court in the case of CIT vs. Cotton Naturals India (P) Ltd [ 2015 (3) TMI 1031 - DELHI HIGH COURT] held that for the purpose of bench marketing the interest receivable on outstanding receivable from AE, the LIBOR+200 basis points is the appropriate rate of interest to be considered by the AO. Thus we direct the AO to recompute the interest receivable on outstanding trade receivable from AE by adopting LIBOR + 200 basis points as appropriate rate of interest in place of 14.45% rate adopted by the Assessing Officer. Disallowance of trade mark license fee - HELD THAT:- The assessee has paid the trade mark license fees in pursuant to an agreement with licensor Taylor Nelson Sofres Mode Private Limited, UK. AO has disallowed the trade mark license fee on the ground that the assessee could not file necessary agreement to prove the payment. We find the assessee has entered into agreement with the Licensor of trade mark and also paid similar payment for earlier A.Ys. The Tribunal has considered the issue for earlier A.Y 2011-12 [ 2021 (10) TMI 1382 - ITAT HYDERABAD] and after considering the relevant agreement between the parties has set aside the issue to the file of the Assessing Officer for fresh verification of the fact. The appellant claims that the appellant for this A.Y had also paid trade mark license fee in pursuant to same agreement between the same parties. Therefore, we are of the considered opinion that the matter needs to go back to the file of the Assessing Officer for further verification. Short credit for TDS - HELD THAT:- We find that the credit for TDS needs to be allowed on the basis of evidences filed by the assessee including the relevant TDS certificate and credits appearing in relevant Form 26AS etc., Therefore, we direct the Assessing Officer to verify the claim of the assessee in the light of the evidences if any that may be filed by the assessee to prove its claim and allow the credit for TDS in accordance with law. 2024 (6) TMI 327 Addition u/s 2(22)(b) r.w.s. 56(2)(viia) - treatment of bonus shares received without consideration - AO formed an opinion that bonus shares as received by the assessee were nothing but dividend received by the assessee - assessee submitted that bonus is nothing but increase in number of shares without any corresponding increase in the value. The assessee did not receive any income or increase in the value of asset due to bonus shares - HELD THAT:- Admittedly, the assessee acquired 41,31,989 number of shares of USPL in AY 2015-16 at Rs. 273.48 per share. During this year, USPL bought back 20,75,000 shares from the assessee @Rs.275/- per share. Later on 92,56,451 shares were received by the assessee as bonus shares in the ratio of 45 shares for every 10 shares held by it. The bonus thus received by the assessee was held to be dividend by Ld. AO u/s 2(22)(b). CIT(A), in our considered opinion, has correctly appreciated the provisions of Sec.2(22)(b). The issue of bonus shares to preference shares is covered as dividend but issue of bonus shares to equity shares in not covered as dividend u/s 2(22)(b). The revenue could not dispute the fact that the assessee was holding equity shares and not the preference shares. Since the bonus to equity shareholders is not covered within the ambit of Sec. 2(22)(b), the same has rightly been held by Ld. CIT(A) to be not applicable to the facts of the case. In such a situation, the same could not be brought to tax u/s 56(2). We are of the opinion that Ld. CIT(A) has correctly relied on the cited decisions of Dalmia Investment Co. Ltd. [ 1964 (3) TMI 17 - SUPREME COURT ] holding that issuance of bonus shares to equity shareholders do not amount to payment of dividend since the conversion of reserves into capital by issue of bonus shares do not involve release of profits to the shareholders and the said profits remain employed in the business. Similarly in Hansur Plywood Works Ltd. [ 1997 (11) TMI 1 - SUPREME COURT ] held that issuance of bonus shares does not amount to distribution of accumulated profits of a company. here is no inflow of fresh funds or increase in the capital employed, which remains the same. The total funds available with the company remains the same and issue of bonus shares does not result in any change in respect of capital structure of the company. Thus, there is no addition or alteration to the profit making apparatus and the total funds available with the company remain the same. In substance, when a shareholder gets a bonus shares, the value of the original share held by him goes down and the market value as well as intrinsic value of two shares put together will be the same or nearly the same as per the value of original share before the issue of bonus shares. Thus, any profit derived by the assessee on account of receipt of bonus shares is adjusted by depreciation in the value of equity shares held by him. When there is an issue of bonus shares, the money remains with the company and nothing comes to the shareholders as there is no transfer of the property and the provisions of Section u/s 56(2)(vii)(c) of the Act are not attracted in such a situation - Decided against revenue. 2024 (6) TMI 326 Penalty levied u/s 271(1)(c) - Inaccurate particulars of Income - Assessee had not made suo-moto submission regarding non-eligibility of brought forward loss either in its Return of Income or before the Assessing Officer as well as on the ground that assessee was not eligible to claim brought forward losses and accordingly furnished inaccurate particulars of Income Whether the Assessee had furnished inaccurate particulars of his Income specially when the Order giving effect (OGE) to MAP Order for the Asst. year 2012-13 was received by the Assessee after the date of filing the revised return for the Asst. year 2016-17 was barred by time and thereafter the Assessee had voluntarily paid the additional Tax liability for the Asst. year 2016-17 even before the issuance of Notice for Assessment Proceedings ? - HELD THAT:- As the Assessee Company had paid the additional Taxes along with the Interest suo motto on 30/05/2018 itself i.e. way before the issuing first notice u/s. 143(2) of Assessment hearing, the plea of the revenue that had the AO not issued the notice u/s. 142(1) dated 10/12/2018 the assessee would not have admitted the set off of brought forward losses is not at all tenable. With regard to the claim of the revenue that had the AO not issued the Notice u/s. 142(1) dated 10/12/2018 the Assessee would have got the Refund is also not tenable as the Assessee Company had already paid the additional taxes along with the Interest suo motto on 30/05/2018 under minor head Tax on Regular Assessment (400) after the preparation of revised computation way before the issuance of Notice u/s. 143(2) for the Asst year 2016-17. The Assessing Officer did not bring any material on record that the explanation given was not bonafide. We are in complete agreement with the CIT(Appeals) that the original return for year under consideration was filed on 30/11/2016 the revised return was filed on 25/05/2017 which are not in dispute therefore the underlying additions/disallowance for levy of impugned penalty was not w.r.t concealment of Income or furnishing of inaccurate particulars of income at the time of filing the return of income for the year under consideration. We are also in agreement with the CIT(A) that had the case of the Assessee appellant not been selected for scrutiny for the year under consideration then it needs to be appreciated that there was no medium available to the assessee-appellant to make any such claim of refund as has been observed by the AO Ground No. 1 of the Revenue is unsustainable and accordingly stands dismissed. Non reporting of revised entitlement of set off of brought forward losses in consequent to order giving effect (OGE) to MAP resolution by Assessee suo-motto amounts to furnishing inaccurate particulars of Income - We are of the opinion that everything would depend upon the Return of Income filed because that is the only document where the assessee can furnish the particulars of its Income. When such particulars are found to be inaccurate, the liability would arise. Disallowance has arisen owing/consequent to the passing of the Order dated 10/05/2018 by the Ld. AO giving effect to the MAP Resolution in Assessee s case for Asst. Year 2012-13 which resulted in change in the loss carried forward for set off in the subsequent years including the Present Asst. Year 2016-17. Therefore we are of the opinion that the underlying additions/disallowances for levy of impugned penalty was not with respect to furnishing inaccurate particulars of income at the time of filing of the return for the year under consideration. It goes without saying that for applicability of section 271(1)(c), the conditions u/s 271(1)(c) must exist before the penalty is imposed. Therefore this ground of the Revenue also fails. In our Opinion in the present case merely because the Assessment Order was passed on the basis of Addition/Disallowances the Assessee agreed to the Addition already paid the Taxes along with the Interest way before the initiation of the Assessment Proceedings , it could not be inferred that the Assessee has furnished inaccurate particulars of Income . Moreover the Assessee Company had offered an explanation. The explanation was also not found to be false. On the contrary it was held to be bona fide. Therefore the AO can t resort to the levy of Penalty u/s. 271(1)(c). Decided in favour of assessee. 2024 (6) TMI 325 Non admission of appeal for non-payment of advance tax u/s 249 (4)(b) - HELD THAT:- The documentary evidences filed by the assessee, of course, has been filed before the AO in course of assessment proceedings (as seen from the computer printout of the on line response sheet needs filed before us), but we are not expressing any opinion on the same because we are not adjudicating on the merits of the case and our opinion are only restricted to the applicability of section 249(4)(b) of the Act 61. We find that the assessee has declared, before the AO that he has no taxable income for the year under appeal and his income is only agricultural income, and receipts from sale proceeds sale of agricultural land which is exempted income under the Act 61 and the computation filed, shows non-taxable Income, and has filed documentary evidence of the same before the AO, as evident from the assessment order, and in the computation of income filed by the assessee before the Tribunal, he has declared NIL taxable income, thereby indicating that he is not liable to pay any advance tax as per provisions of section 207 of the Act 61 because he has no total income which would be chargeable to tax and computation of advance tax, as per sec 209 of the Act is NIL, and according to the assessee the payment of advance tax u/s 210 of the Act, of his own accord, does not arise in this case. We also note that the assessee has filed a reply before the first appellate authority to the deficiency letter, dated 15/01/2024, stating that he has no taxable income and not liable to file return of income. As such, considering all materials on record, we are of the opinion, that the assessee has presented a prima facie case, of no obligation, to make payment of advance tax u/s 208 of the Act 61, for the year under appeal, and we hold that the CIT(A) should have admitted the appeal for adjudication on merits, and the amount of advance tax payable by the assessee, for the purpose of presenting the appeal, as per provisions of section 249(4)(b), should be taken as NIL. Accordingly, we set aside the order of the CIT(A) and restore the same to his file, for adjudication on merits, on the grounds contained in Form 35, after causing all necessary verification of all documentary evidences as he deems fit and proper, as per procedure of law, (un influenced by any observation we might have made in the above paragraphs), and after allowing proper opportunity to the assessee of being heard. Appeal of the assessee allowed for statistical purposes. 2024 (6) TMI 324 Grant of registration u/s 12AB - rejecting the application filed by the assessee in Form 10AB on the ground that assessee failed to comply with the notice and prove the genuineness of its activities - HELD THAT:- Assessee company was incorporated on 20.03.2021 and filed application for permanent registration on 06.09.2022, Along with the application it has filed the financial statement for the period 20.03.2021 to 31.03.2022 - Based on that set of information we note that it is incorrect on part of CIT(E) to held that final accounts since inception is not filed. The bank account details were also submitted in the application form. From the financial account it can be noted that during the year under consideration assessee received donation of Rs 26,97,148/- and incurred expenditure of Rs. 27,02,718/-. The detail of donation received along with sample donation receipts placed on record and the major details of expenses along with the bills evidences are at PB 52-98. Even the ld. AO has accepted the expenditure claimed by the assessee in the assessment made u/s 143(3) of the Act dt. 26.03.2024 Thus, it is not under dispute that the assessee is not doing the charitable activity and therefore, in the last occasion the assessee could not supply the information and therefore, we are of the considered view that assessee in the interest of justice require one more opportunity to be heard on merits before the ld. CIT(E). Thus, we set aside the matter before the ld. CIT(E) who decide the issue based on the submission of the assessee and after providing proper opportunity of being heard to the assessee and making necessary enquiry in accordance with the law. Appeal of the assessee is allowed for statistical purposes. 2024 (6) TMI 323 Penalty levied u/s 271(1)(c) or 270A - taxability of reimbursement of salary expense of seconded employees as FTS - AO in the penalty orders has refused to accept the bonafide intention of the entities for not offering the secondment receipts to tax and for not filing original return offering such receipts (only for cases where original return was not filed) - as considered that secondment of employees to India is used as a tax shifting construct/ arrangement between IBM foreign entities and IBM India - AO in the penalty order has confirmed that the Assessee has concealed particulars of income u/s 271(1)(c) by failing to furnish original return of income u/s 139 and has made full disclosure of income only in the reassessment proceedings u/s 148 HELD THAT:- The assessee has offered the said receipts offered during the course of original assessment proceedings or during the return filed u/s 148 of the Act or during the reassessment proceedings. There was no avoiding of the income offered to tax by the assessee. The assessee made a plea before us that though at the time of filing of original return of income or at the time of filing revised return of income, there was a bonafide belief which the assessee is having regarding the taxability of the impugned secondment receipts. At the time of filing original return of income or at the time of revised return of income, there is a doubt in the mind of the assessee regarding taxability of secondment charges. Hence, assessee has not offered the same at earlier stage. However, later, to buy peace, assessee offered the same for taxation. As noted that the issue in dispute with regard to taxability of secondment receipts, there is a judgement of jurisdictional High Court in the case of Abbey Business Services India Pvt. Ltd [ 2020 (12) TMI 570 - KARNATAKA HIGH COURT] wherein held that as evident that the assessee had entered into a secondment agreement for securing services to assist assessee in its business. The expenses incurred by the seconded employees which were reimbursed by the assessee is not liable to deduction to tax at source and the aforesaid amount could not be considered as fees for technical services . It is also pertinent to note that secondment agreement constitutes an independent contract of services in respect of employment with assessee. From the perusal of the key features of the agreement, which have been reproduced by the Commissioner of Income Tax (Appeals), it is evident that the seconded employees have to work at such place as the assessee may instruct and the employees have to function under the control, direction and supervision of the assessee and in accordance with the policies, rules and guidelines applicable to the employees of the assessee. The employees in their capacity as employees of the assessee had to control and supervise the activities of Msource India Pvt. Ltd. Therefore, the assessee for all practical purposes has to be treated as employer of the seconded employees. There is no obligation in law for deduction of tax at source on payments made for reimbursement of costs incurred by a non resident enterprise and therefore, the amount paid by the assessee was not to suffer tax deducted at source under Section 195 of the Act. Thus the conduct of assessees is bonafide though it was not agreed by the department and it is also noted that assessees have all material time disclosing this secondment receipts in its Form 3CB filed with the department and also with bonafide explanation before the lower authorities regarding not offering the said receipts for taxation, when the assessees itself have voluntarily offered the said receipts for taxation either at the stage of original assessment or at the stage of reassessment or in return filed in response to notice issued u/s 148 of the Act penalty could not be levied. It cannot be construed that assessees have concealed any material facts from the department or furnished inaccurate particulars of income. In our opinion, there is a reasonable cause for not offering the same for taxation in original return filed u/s 139(1) of the Act or in revised return u/s 148 of the Act as the assessees are in bonafide belief that said receipts are not liable for taxation in view of the fact that there are contradictory decisions on this impugned issue. Thus , levy of penalty u/s 271(1)(c) or 270A of the Act in these group cases is not justified. Accordingly, we delete the penalty in all these cases. Decided in favour of assessee. 2024 (6) TMI 322 Accrual of income in India - Taxability as Fees for Included Service (FIS)/Fees for Technical Services(FTS) - assessee had received an amount from Indian subsidiary on account of rendition of management service - assessee is a non-resident corporate entity and incorporated in Singapore engaged in the business of providing management services and sales of software license to its customers in India - assessee has entered into an Inter Company Management Services Agreement with the Indian Subsidiary - HELD THAT:- For rendition of such services, the assessee receives certain amounts towards fees from the Indian subsidiary. The crucial issue requiring consideration is whether in course of rendition of such services, the assessee has made available technical knowledge, know- how, skill, etc. to the employees of the Indian Subsidiary, so as to enable the Indian Subsidiary to perform such services themselves without further aid and assistance of the assessee in future. As could be seen, from the observations of the AO, except making a general statement that the make available condition u/A 12 of the Income Tax Treaty is satisfied, he has failed to demonstrate or bring out on record any convincing reasoning to establish that, in course of rendition of services, the assessee has made available technical know-how, knowledge, skill, etc. to the service recipient, so as to enable service recipient to perform such services independently by utilizing the technical know-how, knowledge, skill, etc acquired from the assessee. AO has alleged that the assessee has failed to furnish necessary details/documents, however, he has not elaborated what were the informations required from the assessee. Unfortunately, Ld. DRP has mechanically endorsed the view of the AO without examining the issue both factually and legally with proper application of mind. Since, the Departmental Authorities have failed to demonstrate that the make available condition enshrined in Article 12(4)(b) of the tax treaty is satisfied, we are unable to sustain the addition as FTS/FIS. Accordingly, the Assessing Officer is directed to delete the addition. Addition of an amount received from AU Small Finance Bank Ltd. towards sale of software as FTS - Schedule C provides for the license fee for first 10,00,000 users. Even, the invoice raised by the assessee on AU Small Finance Bank Limited clearly shows the sale of mobile application license fee. Thus, it is explicit from the license agreement that what the assessee has sold are software licences and not any services. Therefore, in the first place, the Departmental Authorities have committed error in treating the receipts from the sale of software as FTS. Keeping in perspective the facts available on record, it would have been understandable had the Departmental Authorities taxed the receipts as royalty, which of course, can be a debatable issue in view of ratio laid down in the case of Engineering Analysis Centre of Excellence (P.) Ltd [ 2021 (3) TMI 138 - SUPREME COURT] - However, one need not go into that aspect as the singular case of the Departmental authorities is that the receipts are in the nature of FTS, which findings. in our view, is contrary to the facts and material available on record, hence, totally unacceptable. Accordingly, we hold that the amount in dispute is not taxable as FTS. The Assessing Officer is directed to delete the addition. This ground of the assessee is allowed. 2024 (6) TMI 321 Addition u/s 68 - Cash sales proceeds were deposited during the demonetization period - HELD THAT:- We find merit in the submissions of the Ld. AR that the nature and source of cash recorded by way of credit entries in the cash book, which in turn was deposited into the bank account, had been explained in as much as the source comprised of the sale proceeds of gold and precious jewellery. On these specific facts therefore, according to us, the averments made by the AO regarding non mentioning of narrations in the cashbook or non-provision of daily running cash balance cannot be sufficient reason to disbelieve the nature and source of cash recorded by way of credit entries in the cashbook, as the same had indeed been explained by the assessee and no adverse material in this regard was unearthed by the survey authorities in the course of survey conducted u/s 133A during the relevant year. As sale proceeds which were deposited during demonetization period and offered by way of revenue receipts from Business by the assessee-firm, is found to be explained and therefore we hold that the lower authorities were unjustified in assessing these sale proceeds as unexplained cash credit u/s 68 of the Act. Accordingly, the addition made u/s 68 of the Act is hereby deleted and the grounds of appeal raised by the assessee stands allowed. 2024 (6) TMI 320 Additions u/s 68 where the assessee has declared income u/s 44AD of the Act - trading activity in grey clothes - AO held trading activity of the assessee to be non-genuine for the reason that the documentary evidences submitted by the assessee do not properly substantiate the genuineness of the activity - CIT(A) allowed the appeal in favour of the assessee stating that when the assessee has declared income under section 44AD of the act no addition can be made u/s 68 HELD THAT:- Books of accounts have been defined in section 2(12A) of the act to include ledgers, day-books, cash books, account-books and other books, whether kept in the written form or in electronic form or in digital form or as print-outs of data stored in such electronic form or in digital form or in a floppy, disc, tape or any other form of electro-magnetic data storage device. Further it is also settled position that bank passbook cannot be considered as books of accounts. In the light of this legal position, we will now consider the assessee s case. The assessee in the year under consideration has declared income under section 44AD of the act with regard to the trading activities since the turnover from the trading activity is less than Rs. 2 crores. The assessee has declared income on presumptive basis under section 44AD and therefore the requirement for maintenance of books of accounts does not arise. Accordingly we see merit in the contention that addition under section 68 cannot be made in assessee s case since the assessee has offered income on estimation basis under section 44AD of the act. Thus the addition made by the assessing officer under section 68 of the entire turnover which the assessee declared under section 44 AD of the act is not tenable. Assessee appeal allowed. 2024 (6) TMI 319 Disallowance of Business Promotion Expenses - expense towards a get- together organized between the foreign suppliers and local customers - on perusal of the bills the AO noticed that an amount was incurred for food provided for 250 people - AO held mere production of bills does not prove that the expense was incurred wholly and exclusively for the purpose of business - CIT(A) upheld the disallowance stating that the assessee has not been able to prove that there was business connection of the get-together party and that the assessee has not discharge the onus that the expenditure is incurred with a view bring profit or monetary advantage - HELD THAT:- From the perusal of statement of accounts we notice that the assessee has declared substantial revenue from operations and has incurred expenses various expenses for the purpose of business which have been accepted by the AO. AO has not rejected the books of accounts of the assessee. Given the volume of business of the assessee, in our considered view without recording any adverse finding the AO is not correct in making the disallowance of the entire food expenses stating that the same is not incurred for the purpose of business. According to the ld AR the fact that the assessee has made payment to the caterer after deducting tax at source, also goes to substantiate the claim that the expenses incurred are legitimate. When the assessee has submitted the documentary evidence of having incurred the expenditure on which tax is deducted at source and when the related expenses of hotel expenditure is allowed, the AO is not right in disallowing the food expenses for the reason that the same is for large number of people. Therefore, we hold that the AO is not correct in disallowing the food expenses claimed by the assessee as part of business promotion expenses. Accordingly, we delete the disallowance made by the AO. Cessation of Liability u/s 41(1) - amount reflected in the statement of accounts as amount outstanding in the name of M/s Parul Shah and Co. towards professional fees payable - reason for the AO to make the addition is that the liability is outstanding for more than three years and that the assessee has not brought anything on record to show that there is any intention to make payments towards the liability - HELD THAT:- We noticed in assessee s case that the assessee as part of the financial statements reflecting the outstanding liability it would mean that it is an acknowledge liability and that the assessee is intending to settle the liability in the future date. The ratio of the above jurisdictional high Court decision states that addition under section 41(1) cannot made merely for the reason that the period of limitation has expired. Applying the said ratio to assessee s case, we are of the considered view that the AO is not correct in making the addition under section 41(1) of an acknowledged liability of the assessee. Accordingly, we direct the AO to delete the addition. Appeal of the assessee is allowed. 2024 (6) TMI 318 Revision u/s 263 - Examination of short-term capital gain and loss, long-term capital gain - CIT held order of the AO was erroneous and prejudicial to the interest of the revenue on the ground of lack of enquiry - HELD THAT:- A perusal of the impugned order of the Pr. CIT reveals that the Ld. Pr. CIT had asked the assessee about the details and evidences relating to short-term capital loss and long-term capital gains etc. to which the assessee had given a detailed reply. Once a point wise reply was given by the assessee, then a duty was cast upon the CIT to examine the reply of the assessee and form a prima- facie opinion as to whether the order of the AO was erroneous so far as it was prejudicial to the interest of Revenue. We further note that the Ld. Pr. CIT did not raise any query as to what enquiries were made by the AO before proceeding to pass the assessment order in question. In our view, once the Ld. Pr. CIT had proceeded to make an enquiry regarding the genuineness of the claim of the assessee, he was supposed to make a prima-facie opinion which may not be a concluding opinion to hold that the order of the AO in his view was erroneous so far as it was prejudicial to the interest of Revenue. The opinion of the Commissioner that the AO had not made proper enquiries or verifications should be based on his objective satisfaction and not a subjective satisfaction from the assessment order. Merely because, the assessment order in question is not a detailed order that itself, does not mean that the AO had not made enquiries in this respect. Admittedly, the AO asked the assessee to furnish the necessary details from time to time which were duly furnished by the assessee and after considering the same the AO passed the assessment order. A perusal of the revision order passed by the ld. Pr. CIT shows that the ld. Pr. CIT has not pointed out any error or discrepancy in the explanations and details furnished by the assessee and without examining such evidence and without counter questioning the assessee on the relevant points and even without considering the submission of the assessee furnished in reply to the show-cause notice, the ld. Pr. CIT, in our view, was not justified in setting aside the order, simply stating that in his view more enquiries were needed to be carried out by the AO. Simply because the ld. Pr. CIT felt that the AO should have made further enquiries on the same issue or that the case was to be examined from some another angle, the same, in our view, cannot be a valid ground to set aside the assessment order. If such an action is allowed by the ld. Pr. CIT in his revision jurisdiction then, there would be no end to litigation and there would not be any finality to the assessment. Thus no justification on the part of the ld. Pr. CIT in setting aside the assessment order for de novo assessment. Decided in favour of assessee. 2024 (6) TMI 317 Disallowance u/s. 14A r.w.r. 8D - Scope of principle of consistency - contention of the assessee is that assessee has computed disallowance in the same methodology as was adopted in the preceding AYs - Once the method of computation of disallowance u/s.14A has been accepted by the Tribunal in the past the same cannot be rejected - HELD THAT:- As in the preceding AYs the provisions of Rule 8D were not applicable. As pointed earlier the provisions of Rule 8D were applicable from AY 2008-09 onwards. A bare perusal of Section 14A of the Act would show that the Section does not mandate the assessee to make disallowance u/s. 14A of the Act in accordance with Rule 8D. Section 14A(2) of the Act mandates the AO to determine the amount of expenditure incurred in relation to earning of exempt income in accordance with the provisions Rule 8D if, the AO having regard to the accounts of the assessee if not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to exempt income. AO shall determine the amount of expenditure incurred in relation to earning exempt income in accordance with the provisions of section 14A(2) read with Rule 8D. The assessee in the impugned assessment year has worked disallowance u/s 14A following the same methodology as has been accepted by the AO in remand proceedings in AY 2001-02 and AY 2003-04. The said methodology was subsequently approved by the Tribunal in AY 2006-07 and Assessment Year 2007-08. Revenue has not disputed the fact that the manner of determination of suo-motu disallowance u/s.14A by the assessee is in accordance with the method accepted by Revenue in the past. Merely for the reason that Rule 8D was introduced from the impugned assessment year it cannot be said that there is any defect in the manner of computation of disallowance u/s. 14A by the assessee. We find merit in ground No.1 of appeal, hence, the same is allowed. Nature of expenses - expenditure on Shelved Projects - revenue or capital expenditure - HELD THAT:- The assessee has incurred expenditure on various projects/ feasibility reports which were subsequently shelved. The assessee claimed the expenditure as revenue, AO rejected the contentions of the assessee and treated the expenditure as capital. We find that in the preceding AY the Tribunal has been consistently holding that such expenditure is on revenue account and has decided the issue in favour of the assessee. AO in the impugned order has recorded this fact but decides it otherwise only for the reasons that the Department has not accepted the decision of the Tribunal and is in appeal. No contrary decision has been placed before the Bench on this issue by the Revenue. Nor any order of Higher Forum has been brought before us staying the order of Tribunal in assessee s case in the preceding AYs. We see no reason to take a different view, accordingly we reverse the findings of AO on this issue and allow ground No.2 of appeal. Disallowance of Prior Period Expenditure - assessee is following mercantile method of accounting - HELD THAT:- We find that in AY 2006-07 prior period expenses were allowed by the CIT(A) against which the Department was in appeal. The Tribunal held that since entire expenses got crystalized during the year under consideration, CIT(A) was correct in granting deduction in respect of prior period expenses and thus, decided the issue in favour of assessee. In the impugned assessment year the Revenue has not pointed any distinction in the facts. Therefore, following the decision of Co-ordinate Bench in assessee s own case, ground No.3 of appeal is allowed for parity of reasons. Disallowance of discount on issue of Euro Notes - HELD THAT:- The assessee had issued 7.875% Euro Notes (2007) and 8.50% Euro Notes(2017) at a discount in AY 1998-99. Assessee has been consistently writing off discount on issue of Euro Notes over the period of debentures. The same has been consistently allowed by the Department from AY 1998-99 to AY 2003-04. AO disallowed the amount in AY 2004-05 and 2005-06 but the same was allowed by the CIT(A). We find that in AY 2006-07 discount on issue of Euro Notes was again disallowed by the AO. In the impugned assessment order the AO has disallowed discount on issue of Euro Notes merely for the reasons that the Department has not accepted the order of CIT(A) on this issue in Assessment Year 2006-07 and has preferred appeal. Since, the Co-ordinate Bench has upheld the findings of the CIT(A) in Assessment Year 2006-07 the substratum for disallowance made by AO has vanished. Accordingly, ground No.4 of the appeal is allowed. Reduction in allowance of premium on pre payment of debentures and its impact on computation of deduction u/s. 80IA - HELD THAT:- The Co-ordinate Bench while deciding this issue in Assessment Year Assessment Year 2006-07 [ 2019 (12) TMI 819 - ITAT MUMBAI ] we direct the AO accordingly to give life to the issue of allowability of deduction towards premium on prepayment of debentures based on the final outcome of the appeals of the revenue for the Asst Years 2004-05 and 2005-06. Claim of deduction u/s. 80IA - HELD THAT:- It is an undisputed fact that the initial assessment year for the purpose of deduction u/s. 80IA qua Supa Wind Power Project 17 MW Unit is AY 2007-08. The Tribunal has dealt with the issue of assessee s eligibility of claiming deduction u/s. 80IA in AY 2006-07 in detail. The findings on the issue in Assessment Year 2006-07 have been ipso-facto adopted in AY 2007-08. Thus, assessee s claim of deduction u/s. 80IA on Supa Wind Power Project 17 MW Unit was allowed by the Tribunal in AY 2007-08. No material has been placed on record by the Revenue to show that the Department is in appeal against the findings of the Tribunal in AY 2007-08. Thus, it can be safely construed that that the Department has accepted the findings of Tribunal in allowing deduction u/s. 80IA on Supa Wind Power Project 17 MW Unit in AY 2007-08. Thus, the said Assessment Year becomes the initial Assessment Year for claiming deduction u/s. 80IA on Supa Wind Power Project 17 MW Unit. Once assessee s claim of deduction has been accepted in the initial Assessment Year, the same cannot be denied in the subsequent Assessment Years. Ergo, ground No.6 of appeal is allowed. Duplicate disallowance u/s.80IA - HELD THAT:- In principle, we are in agreement with the submissions of the assessee that double disallowance cannot be made while computing taxable income. Taking into consideration entire facts of the case, we deem it appropriate to restore this issue back to the file of Assessing Officer for re-examination and verification of the facts. Needless to say that the Assessing Officer while deciding this issue shall grant reasonable opportunity of making submissions to the assessee, in accordance with law. The ground No.7 of appeal is thus, allowed for statistical purpose. Disallowance of addition depreciation claimed u/s. 32(1)(iia) - HELD THAT:- Assessee has pointed that in First Appellate proceedings for Assessment Year 2006-07 the issue was restored to the Assessing Officer for examining as to whether the assessee was following WDV or SLM for claiming depreciation and if the assessee s method of depreciation is WDV, the additional depreciation claimed be allowed u/s. 32(1)(iia) of the Act. AO while giving effect to the directions of the CIT(A) in Assessment Year 2006-07 allowed the assessee s claim of depreciation. These facts have not been rebutted by the Department. The contention of the assessee is that the method of assessee s claim of depreciation is similar to the one as was in Assessment Year 2006-07. Thus, in view of un-rebutted facts, ground of appeal is allowed. Transfer Pricing Additions - Disregard of Rule 10B(2) - Assessee submits that the TPO has not provided any reason for rejecting systematic benchmarking analysis undertaken by the appellant for the underlined loan transaction and guarantee commission, which is mandatory as per provisions of section 92C(3) of the Act - HELD THAT:- We find that objection raised in ground No.10 is generic hence, ground No.10 is dealt with while deciding TP adjustments in ground No.11 and 12, respectively. TP adjustment towards Guarentee fees - HELD THAT:- For the purpose of bench marking the guarantee fee towards the loan obtained by the AE from Barclays Bank Plc., the assessee has obtained a letter from SBI quoting the rate charged. The assessee has arrived at a rate of 0.041% using SBI rate as the base and by applying the power trend analysis since according to the assessee the rate of guarantee fee is inversely proportional to the amount of loan. The amount of loan being huge i.e. USD 950 million, the assessee justified the said rate and considered the same to be at arm s length. CUP method requires a high degree of comparability of products and functions, therefore, we see merit in the contention of the TPO. The rate obtained from SBI does not consider the specific aspects such as risk etc. thus, cannot be applied carte blanche. Hence, we are not convinced to accept the basis on which the assessee has bench marked the transaction. At the same time we notice that the TPO has also used general rates obtained from two banks viz., Allahabad bank and SBI and there is no proper reasoning provided by the TPO as to how the same is applied for benchmarking assessee s transaction. Therefore, in our considered view, the TP adjustment computed by the TPO based on the general rate of guarantee fees charged by banks is not tenable. As decided in Strides Shasun Limited [ 2022 (9) TMI 1594 - ITAT MUMBAI] followed the decision of the jurisdictional High Court in the case of Everest Kento Cylinder Ltd [ 2015 (5) TMI 395 - BOMBAY HIGH COURT ] and in assessee s case also the assessee and the revenue could not provide any reason for us to deviate from the decision of the coordinate bench. Accordingly we direct the TPO to apply the rate of 0.5% and re-compute ALP of corporate guarantee. The ground No.11 of appeal is partly allowed. TP Adjustments towards imputing interest on loan - HELD THAT:- We notice that out of USD 273 million, which the assessee has lent as loan to the AE, USD 200 million is sourced through FCCB borrowings and USD 73 million is funded from India. TPO has imputed a TP adjustment by applying 6.88% interest rate on the loan funded through FCCB borrowing by considering the rate at which the assessee has borrowed FCCB loan i.e. 3.88%. TPO has added 3% margin towards the risk element. Similarly for the USD 73 million which is funded from India, the TPO has applied average borrowing cost of 7.55% and added 3% mark-up towards risk element and applied 10.55% for making the TP adjustment. The TPO while making the TP adjustment has considered the rate of interest as Nil, during the relevant period as per agreement between the assessee and AE the rate of interest charged is Nil. The rate of interest for first two years is 0%. The TPO has rejected assessee s theory of weighted average rate. The assessee has shown that the average rate of interest for 14 years period is 4.71%. In the present case there was moratorium period of first two years, wherein Nil interest was charged by the assessee. For the next one year the assessee charged 2.5% interest and for the remaining 11 years the assessee has charged 5% interest per annum. Thus, weighted average rate of interest charged by the assessee over the period of 14 years including moratorium period is 4.11%. In the light of facts of the case and the decision referred above, we accept weighted average rate applied by the assessee. Interest rate of loan extended from India, the TPO has charged rate of interest at 7.5% to 10.53% per annum. The contention of the assessee is that LIBOR rate existing at the time of borrowing should be considered. The Hon ble Rajasthan High Court in the case of Vaibhav Gems Ltd. ( 2017 (12) TMI 583 - RAJASTHAN HIGH COURT] has held that where assessee has extended loan to its AE, adjustment should be made at average LIBOR rate existing at that time. It is a settled legal position that for the purpose of determination of ALP the rate of interest should be charged in the currency in which loan is borrowed. Thus, we find merit in the submissions of assessee in applying LIBOR in respect of loan advanced from India to the AE. 2024 (6) TMI 316 Impact of pay revision of executives - assessee submitted that the assessee company had debited an amount in its P L account on account of pay revision of executives - It is the submissions that such provision was made on account of increase in the salaries and other benefits in respect of executives of the company - HELD THAT:- In the present case the AO and CIT(A) has relied upon the judgment of ITAT in assessee s own case wherein the issue in hand has been decided against the assessee. The assessment order in the present case was passed on 17.03.2019 the appellate order by Ld. CIT(A) have been completed on 05.12.2019. The order of the Hon ble Delhi High Court in the case of Housing and Urban Development Corporation Ltd. [ 2020 (2) TMI 372 - DELHI HIGH COURT ], accordingly, both the revenue authorities at the time of deciding the issue were not having the availability of principle of law decided by Hon ble Delhi High Court on the identical issue subsequently, so, their decision cannot be held as erroneous. However, since now the position of on the issue is squarely covered by the order of Hon ble Delhi High Court, we cannot subscribe to the decisions of the revenue authorities, thus, respectful following the judgment of Hon ble Delhi Court having similar facts, are of the considered view that the provision of Rs. 17.65 crore made by the assessee company was required to effect the pay revision from Jan 17 to March 17 for executives salaries and fringe benefits as the tenure of executive s salary and fringe benefits are determined and finalized by the department of public sector enterprises has come to in an end on 31.12.2016. Although the intimation regarding such pay revision was communicated by the Coal India Limited vide communication letter no. CIL/C-3A/31075/200 dated 18.04.2017 but the liability was already under negotiation and has been ascertained - Merely because the communication w.r.t. implementation of pay revision has took time, the same could not be construed as there was no basis for making provision. Accordingly, the provision made by the assessee is allowed in terms of our aforesaid observations. Resultantly, ground of the assessee is allowed. Non grant of TDS credit due to income mismatch - assessee submitted that since the issue of TDS credit mismatch has already delt with by the AO while allowing the TDS credit to the assessee vide order u/s 154 dtd. 05.04.2022, to support this contention copy of the same was furnished before us - HELD THAT:- On perusal of the order u/s 154, it is apparent that the issue pertaining to TDS credit which has been allowed by the Ld. CIT(A) and was also accepted by the assessing officer, therefore, there was no grievance remained as both the parties reached on a consensus. AR further submitted that once the issue regarding TDS credit has already accepted by the AO, the ground raised in this respect becomes infructuous and, therefore, no further adjudication is required. CIT DR also have fairly agreed to the contention of the Ld. AR, thus, the ground of the revenue is dismissed. Amortization of deferred grant - HELD THAT:- Admittedly, Ld. AO has rejected the explanations of the assessee without assigning any specific finding. Since the assessee has requested to restore the issue back to the file of AO for reverification of facts and to re-adjudicate on merits, which is not objected by the LD. CIT DR. We, therefore, under such facts and circumstances in all fairness following the principle of natural justice are of the view that since there are other issues which are restored back for re-adjudication to the files of AO, the issue regarding amortization of deferred grant wherein the claim of he assessee was denied only on the basis of assumption that assessee have not submitted plausible explanations without pursuing with the assessee with further enquiries, should also be restored back to the files of AO to verify the fact and re-adjudicate the same. Needless to say, reasonable opportunity of being heard should be allowed to the assessee. 2024 (6) TMI 289 Validity of assessment proceedings u/s 144 r.w.s. 144C exceeding period of limitation - scope of time limit prescribed u/s 153(2) - as submitted that no order of assessment, reassessment or re-computation shall be made u/s 147 after the expiry of 12 months from the end of financial year in which the notice u/s 148 was served on or after 1.4.2019 - HELD THAT:- A perusal of the record shows that the notice u/s 148 was issued on 24.2.2021, a fact not disputed by the Revenue. There is no reference made to the TPO for making any adjustment of arm s length price of the international taxation. Referring to provisions of section 153(2) clearly shows that the time limit for completion of the assessment in the present case lapses on 31.3.2022. However, the final assessment order u/s 144 r.w.s. 144C has been passed on 30.01.2023 which is beyond the time limit prescribed u/s 153(2). Since the assessment order has been passed on 30.01.2023 as against 31.03.2022, therefore, the same, in our opinion, is barred by limitation and accordingly, the assessment order is liable to be quashed. We therefore, quash the re-assessment proceedings being barred by limitation. Since the assessee succeeds on this preliminary legal issue, the other grounds become academic in nature and therefore, are not being adjudicated. Appeal filed by the assessee is allowed. Customs 2024 (6) TMI 315 Baggage - Dexamethasone - offence punishable under Section 135 (1) (ii) of the Customs Act, 1962 - acquittal of the respondents was justified based on the evidence presented or not - HELD THAT:- Dexamethasone is a dutiable item as per the provisions of the Customs Tariff Act, 1975. It is item 3004.39.13 in the Schedule to the Act. Exts. P7 and P8 statements given by the respondents under Section 108 of the Customs Act were discarded by the trial court stating that it did not contain all the details. On going through the said statements, it can only be said that the said observation of the trial court is incorrect. All necessary particulars regarding import of the article in question are stated in it. It is not a requirement of Section 108 that the person giving the statement should give an exhaustive statement in order for it to be acted upon. Either in Exts. P7 and 8 or in the retraction statement of DW-1, it was stated that the white powder they brought was Dexamethasone and despite such declaration the prosecution was initiated. Ext. P17 is the order in the adjudication proceedings in the matter. The defence set up by the respondents before the Adjudicating Officer (Additional Commissioner of Customs) has been recited in detail in Ext. P17. The respondents have no case that any contention beyond what has been recited in Ext. P17 were raised before the Adjudicating Officer. In that also no such contention was raised. In the light of the said evidence and circumstances, the assertion by DW-1 first time before the court that he declared the article to be Dexamethasone cannot be believed - the prosecution proved beyond doubt that the respondents did not declare the contents of their baggage and that was with a view to evade payment of duty on the article they imported, which is Dexamethasone. They thereby had committed the offence punishable under Section 135 (1) (ii) of the Customs Act. Hence, on reversing the findings of the trial court, the respondents are convicted of the said offence. The article imported by the respondents was ordered to be confiscated as per Ext. P17 by giving an option to them to redeem on payment of the duty, penalty and fine. DW-1 stated that he redeemed the article by making payment of the duty, penalty and fine. Taking that into account and the period elapsed after detection of the offence, it is not proposed to sentence the respondents to imprisonment. The respondents are accordingly sentenced to pay a fine of Rs. 50,000/- each and in default of payment, to undergo simple imprisonment for a period of six months. Appeal allowed. 2024 (6) TMI 314 Provisional attachment order under PMLA - Gold released by the Customs Department - HELD THAT:- The petitioner cannot be granted any reliefs against Ext. P17 order, in this writ petition. From the facts and circumstances of the case narrated above, it is clear that this Court had directed the release of 04.00 kg of gold imported by the petitioner in terms of an authorization issued to him under the provisions of the SEZ Act. The said finding is on the basis that the import was prior to the suspension of the authorization, which was on 19.08.2014. The letter of authorization was cancelled only on 27.03.2015. The Division Bench very clearly found that the 04.0kg of gold was imported by the petitioner when it had permission and authorization to do so in terms of the provisions contained in the SEZ Act read with the provisions of the Customs Act. The learned counsel appearing for respondent Nos. 3 and 6 is therefore, right in contending that the release of the gold/its value had no bearing, whatsoever, in the proceedings initiated by the Enforcement Directorate as the mandate of Enforcement Directorate is to recover/confiscate the proceeds of crime to the State. There is nothing in the law which prevents the Enforcement Directorate from doing so. Ext. P17 is only a provisional order and a final order has to be issued under Section 8 of the Act, within a period of 180 days from the date of Ext. P17 order. Ext. P17 order is dated 29.01.2024 and the petitioner has already filed his objections/reply to the same. The period for issuing a final order will expire by 27.07.2024. Petition dismissed. 2024 (6) TMI 313 Dismissal of restoration application for appeal u/s 112(a) and (b) of Customs Act, 1962 - complaince with the mandatory pre-deposit or not - Delay in filing appeal - HELD THAT:- There are force in the contention of the counsel for the appellant that the Tribunal ought not to have dismissed the appeal of the appellant in limine vide Ext. P3 Order especially since the appellant had reasonably exhibited his bona fides by complying with the mandatory pre-deposit of Rs. 15 lakhs as early as in 2017 itself. Taking note of the fact that the appellant had preferred the appeal as envisaged in Sec. 129 A (1) of the Act and had already remitted the mandatory pre-deposit, the Tribunal ought to have granted the appellant a reasonable opportunity to take appropriate steps for getting the Writ Petition, which was then pending before this Court, disposed of and then to permit him to pursue his remedy in the pending appeal before the Tribunal. Non-suiting him in limine does not appear to be reasonable, especially in the facts and circumstances of the case. The Tribunal in the facts and circumstances of the matter ought to have afforded the appellant an opportunity to challenge the penalty of Rs. 2 crores imposed upon him vide Ext. P1 Order on merits rather than dismissing his appeal in limine on the ground that a Writ Petition on the same subject matter was pending before the High Court. Appeal allowed. 2024 (6) TMI 312 Mis-declaration of nature and description of imported goods or not - invocation of extended period of limitation - SCN issued is time barred or not in terms of provisions of Section 28 of the Customs Act, 1962. Whether the appellant has mis-declared the nature and description of imported goods or not and whether invocation of extended period is justified in the facts of this appeal? - HELD THAT:- The Appellant had at the time of import and subsequent assessment had declared the subject imports as 91513.9 metres of 100% Cotton processed fabrics and upon assessment availed exemption from duty by debiting the value and quantity thereof against four DFRC licences under Notification No. 46/2002-Cus. dated 22.04.2002. the fact that the Appellant indulged in fabrication of documents was evidenced by documentary evidence obtained during investigation and moreover the Appellant admitted that they had resorted to the mis-declaration to utilise the exemption for Basic Customs Duty and Special Additional Duty available under Notification No. 46/2012- Customs applicable under DFRC licenses in their possession which is only applicable to 100% Processed Cotton fabrics and not applicable for 65% poly and 35% Cotton fabric. The Appellant had declared the entire consignment as 100% Processed Cotton fabrics and failed to declare and assess 65% poly and 35% Cotton fabric. Therefore, there is no denying the fact that the Appellant fabricated the invoice and Bill of Lading, only with an intent to evade payment of applicable duties of Customs. There are no hesitation to hold that the appellant had manipulated the invoice and Bill of Lading in order to evade applicable customs duty by utilizing ineligible DFRC licenses which would not cover the import of 65% Polyester and 35% Cotton Fabrics. As such invocation of extended period is legal and justified in this appeal for aforesaid reasons. Whether the Show Cause Notice dated 21.02.2013 issued is barred by limitation of time or not in terms of relevant provisions of Section 28 of the Customs Act, 1962? - HELD THAT:- The relevant date that is applicable to the facts of this appeal is the date of payment of duty and not the date of order of Out of Charge of Customs. So, it has to be noted that Explanation 1(d) is applicable and not 1(a) to Section 28 of the Customs Act, 1962. Even the appellant s argument that they declared the entire quantity of fabrics imported in terms of quantity though there was an admitted misdeclaration as to the description. The DFRC Licences produced covered only the Cotton Fabrics imported and not that portion of Poly+Cotton Fabrics. As such, it is concluded that at the best there can be short levy but not non levy - the explanation covers both non levy and short levy subsequent to the amendment w.e.f. 2016. The period involved in this case is before 2016 and so short levy cases would not be covered by explanation 1(a) to Section 28 of the Customs Act, 1962. At the relevant time, the date of order of Out of Charge of Customs would cover only non-levy cases. CESTAT New Delhi in the case of M/S. DESEIN PRIVATE LIMITED VERSUS COMMISSIONER OF SERVICE TAX, SERVICE TAX COMMISSIONERATE, DELHI-II [ 2024 (1) TMI 400 - CESTAT NEW DELHI] has held that the Show cause Notice issued beyond 5 years is time barred and neither the demand maintainable nor interest and penalty leviable. The provisions of Section 28(4) mandates issuance of Show Cause Notice within maximum period of 5 years from the relevant date. The relevant date being the date of payment of duty, the Show Cause Notice should have been issued on or before 11.02.2008. As the Show Cause Notice was issued later to this date on 21.02.2013, the Show Cause Notice is time barred by limitation. Tthe impugned order dated 23.12.2013 of Commissioner (Appeals) cannot sustain and justified to be set aside as being time barred - Appeal allowed. 2024 (6) TMI 311 Confiscation of imported goods (8 diesel engines and one industrial engine) under Section 111(d) of the CA 1962, when the goods have been re-exported - imposition of redemption fine on the goods that are re-exported - levy of penalty under Section 112(a) when goods are re-exported. When the goods have been re-exported, the question of confiscation of goods under Section 111(d) of the Customs Act, 1962 do arise or not? - HELD THAT:- Goods become liable to confiscation if the Importer or Exporter contravenes any of the provisions of the CA 1962 or any other Act for the time being in force in relation to the importation and exportation of goods. In this case the goods were imported in contravention of the provisions of the EPR, 1986. They were hence prohibited goods - The Hon ble Supreme Court in OM PRAKASH BHATIA VERSUS COMMISSIONER OF CUSTOMS, DELHI [ 2003 (7) TMI 74 - SUPREME COURT ], after examining the term prohibited goods as defined in Section 2(33) of the CA 1962, held The notification can be issued for the purposes specified in sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. The question raised by the appellant that when the goods have been re-exported, the question of confiscation of goods under Section 111(d) of the CA 1962 does not arise, is like putting the cart before the horse. Confiscation of offending goods under section 111(d) is an action precedent to allowing the same to be redeemed under section 125 of the CA 1962. The permission for export of prohibited goods that have been confiscated and redeemed, is an administrative order emanating from the importers request for re-export of the goods and is not flowing from Section 125 of the CA 1962 - When goods are imported in breach of statutory provisions, Section 111(d) of the CA 1962 squarely applies as the goods become offending goods liable for confiscation. Confiscation of goods in the situation of a statutory breach by imported prohibited goods , is not discretionary. An order permitting re-export of goods is sequentially a separate process which would come into play only after the importer redeems the confiscated goods. Simply because the decision is bundled along with a quasi-judicial order will not change the sequence of events. This being so confiscation of goods under Section 111(d) of the CA 1962 is a must before the administrative permission for the export of the said goods is given at the administrative discretion of the Proper officer. Appellants averment in this regard are hence rejected. No redemption fine is imposable on the goods that are re-exported - HELD THAT:- Once the offending goods are confiscated the title of the goods comes to be held by government and the mechanism for the importer to get back possession of the goods is by paying a redemption fine as decided by the Proper Officer. Hence the goods can only be taken repossession of with title by the importer, if he pays a fine - The appellant has stated that it is a settled position of law that no redemption fine is imposable on the goods that are to be re-exported. We have earlier seen that for the Proper Officer to allow the redemption of prohibited goods is part of his discretionary jurisdiction. No court has laid down the law that prohibited goods, imported without authorization, are to be released for re-export without payment of redemption fine. Such a stance would only encourage importers smuggling / making improper import of goods, to take a chance with the law and if caught request for re-export of the offending goods without a fine. It would also be discriminatory that for the same offence the intended nature of clearance of the confiscated goods would determine the imposition of fine i.e. if the offending goods are cleared for home consumption fine is to be imposed and if the importer requests for its export, no fine can be imposed. The position is legally untenable - The appellants averments in this regard are hence rejected. No penalty under Section 112(a) cannot be imposed when goods are re-exported - HELD THAT:- A penalty is the result of a breach of statutory duty. The main object behind the imposition of penalty is deterrence. Re-export of the goods does not cure the breach of statutory duty already committed. While a fine is imposed on the redemption of offending goods imported in breach of law, a penalty is levied on a person responsible for the breach of statutory duty. No interfere should ordinarily be made by an appellate body, in the discretionary order passed by a lower authority, just because another view might be possible, except on grounds of mala fides or extreme arbitrariness. No such ground has been made out in this case. Hence this plea also does not have any merit and is rejected. The impugned order is upheld and the appeal filed by the appellant is rejected. 2024 (6) TMI 310 Refund claim - time limitation for filing refund claim - refund rejected on the ground that same are barred by limitation as same has been filed beyond one year from the date of payment of duty - assessment of the bills of entry not challenged. Time Limitation - HELD THAT:- Admittedly, the duty was paid by the respondent under protest. Unless and until the protest is not vacated by a speaking order, the duty paid under protest shall remain paid under protest. In these circumstances, the time-limit prescribed under Section 11B of the Central Excise Act of one year to file refund claim of duty paid is not applicable. Therefore, the refund claims filed by the respondent, under protest, are filed by the respondent in time. Assessment of the bills of entry not challenged - HELD THAT:- Another issue has taken by the Revenue is that as the assessment of bills of entry had become final, therefore, without challenging the assessment of bills of entry, the refund claims were not maintainable in the light of the decision of the Hon ble Apex Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [ 2019 (9) TMI 802 - SUPREME COURT] - the observations made by the Ld. Commissioner (Appeals) in the impugned order not agreed upon and it is held that as there was a protest, duty was paid under protest, by the respondent. Therefore, the refund claims cannot be held as barred by the limitation and cannot be rejected on the ground that the refund claims were filed without challenging the assessment as assessment was not final. There are no merit in the appeals filed by the Revenue. Accordingly, the same are dismissed. 2024 (6) TMI 309 Levy of Redemption fine - clearance of 530 MT of hot dipped galvanized steel coils of varying sizes with values ranging between USD 515-540/MT - applicability of minimum import price for iron and steel goods - HELD THAT:- As per the Section 3 of the FTDR Act, the DGFT is empowered to impose restrictions for import and accordingly the minimum import price imposed by the DGFT vide the notification is also justified. The notification 38/2015-20 is issued under Section 3 of the FTDR Act, and therefore, the appellant cannot read into it that it has not been issued under sub-clause (2) of Section 3. Moreover, the Trade Notice referred by the Revenue which was issued by DGFT categorically states that the imported items must have a unit CIF value equal to or above the MIP. As per para 2 of the notification letter of credit is also essential to claim the exemption. The appellant admits that on the date of import the notification was applicable and the letter of credit was also not available to claim the exemption and his only plea is that considering the unusual circumstances under which the import happened the goods are not liable for confiscation. The Customs is legally bound by the notifications issued by the DGFT and therefore, the notification which is applicable on the date of import cannot be ignored as has been held by the Hon ble High Court of Madras in the case of Salmag Enterprises Versus Addl. Commr. of Cus. (Adj), Tuticorin [ 2021 (6) TMI 180 - MADRAS HIGH COURT ]. The Tribunal in identical set of facts in the case of M/S SIEMENS GAMESHA RENEWABLE POWER PVT. LTD. VERSUS C.C. MUNDRA [ 2018 (8) TMI 371 - CESTAT AHMEDABAD] as submitted by the Revenue, held that the Commissioner was justified in imposing redemption fine. Taking into consideration the unforeseen circumstances as explained above by the appellant, it is fair to reduce the redemption fine to Rs. 8,00,000/- - Appeal allowed in part. 2024 (6) TMI 290 Time limitation of one year for refund of Additional Duty of Customs - N/N. 102/2007-Cus dated 14.09.2007, as amended by N/N. 93/2008-Cus dated 01.08.2008 - rejection on the ground that refund claims were not filed within one year from the date of payment of duty as required under the Notification - HELD THAT:- The Commissioner (Appeals) has upheld the order passed by the Assistant Commissioner holding that the condition stipulated the Notification, which cannot be considered to be merely procedural, were not complied and the judgment of the Delhi High Court in Sony India [ 2014 (4) TMI 870 - DELHI HIGH COURT ] has been distinguished for the reason that it was a case relating to the period prior to the amendment made in the Notification dated 14.09.2007 by Notification dated 01.08.2008 whereas the present matters relate to imports made after the amendment was made by Notification dated 01.08.2008 which provides that the claim for refund of Additional Duty has to be filed before the expiry of one year from the date of payment of the Additional Duty. The provisions of the Notification dated 14.09.2007 as amended on 01.08.2008 and the aforesaid provisions of the Tariff Act and the Customs Act were examined by the Delhi High Court in Sony India. It was held that since Additional Duty levied under section 3(5) of the Tariff Act is refundable only on a subsequent sale, no limitation can possibly be imposed for filing a refund claim from the date of payment of such Additional Duty - the High Court concluded that the period of limitation contemplated under section 27 of the Customs Act would not be applicable to a refund made under the Notification dated 14.09.2007 as amended by Notification dated 01.08.2008, more particularly when the customs authority also understood that section 27(1) of the Customs Act would not be applicable. In Pee Gee International vs. The Commissioner of Customs ICD Tughlakabad [ 2014 (4) TMI 1160 - DELHI HIGH COURT ], the Delhi High Court following its judgment in Sony India, also held that the limitation of one year provided for in the Notification dated 14.09.2017 as amended on 01.08.2018, would not be applicable. The Notification dated 14.09.2007 requires fulfilment of certain conditions. The importer has to pay on the sale of the goods appropriate sales tax or value added tax and has to provide copies of documents with the refund claim evidencing payment of said Additional Duty, invoices of sale of the imported goods in respect of which refund of the said Additional Duty is claimed and documents evidencing payment of appropriate sales tax by the importer on the sale of such imported goods. These conditions were examined by the Delhi High Court in Sony India while arriving at a conclusion that the limitation provided in the Notification dated 01.08.2018 that the refund has to be made within a period of one year from the date of payment of Additional Duty has to be read down in as much as the right to claim refund could accrue to an importer only when the subsequent sale is completed and given the vagaries of the market, the importer has limited control over when the sale would be complete. The Division Bench of the Tribunal in JG Impex [ 2018 (10) TMI 1483 - CESTAT NEW DELHI ] relied upon 27 of the Customs Act, which was held to be not applicable in case of refund of Additional Duty by the Delhi High Court in Sony India. The decision of the Delhi High Court in Sony India was binding on the Tribunal. The inevitable conclusion, therefore, that follows from the aforesaid discussion is that the order dated 07.05.2021 passed by the Commissioner (Appeals) that has been impugned in the present appeals denying refund claim to the appellant deserve to be set aside and are set aside - Appeal allowed. Insolvency & Bankruptcy 2024 (6) TMI 308 Maintainability of the writ petition due to the presence of an alternative remedy - Recovery of electricity dues from the petitioner - effective date when as per the resolution plan, the petitioner No. 1 was taken over. Recovery of electricity dues - HELD THAT:- After the petitioner No. 1 was admitted to insolvency, a resolution plan which had been submitted was approved by the National Company Law Tribunal and by the Supreme Court, and Reliance Projects and Property Management Solutions Ltd. (RPPMSL) took over the petitioner No. 1 on 22.12.2022. Section 31 (1) of the Insolvency and Bankruptcy Code, 2016 (I B Code) which is relevant in this respect, provides that an approved resolution plan is binding on all creditors. Even in cases where the creditors include Central Government and such other authorities to whom statutory dues are owed, they shall be bound by the said resolution. It is seen in the instant case that in accordance with the provisions of the I B Code, public announcements had been made inviting all creditors of the petitioner No. 1, to submit proof of claims on or before 01.06.2016, and the same was also published by the Interim Resolution Professional as evidenced by Annexures 3 to 5 of the writ petition - The approval order then on the resolution coming to a close, was passed on 03.12.2020 by the NCLT, wherein as per the approved Resolution Plan the claims, demands and liabilities as the case may be were to stand fulfilled on the deposit of the resolution amount. Though against the approval order, appeals were filed by various persons, the NCLT on an application by the petitioner No. 1 allowed the deposit of the total value of the Restoration Plan into an Escrow account, which would go towards distribution of the said amount to the creditors, which enabled the acquisition and control of the petitioner No. 1 on a clean slate, as also on all the claims which were lying before the effective date i.e. 22.12.2022. Maintainability of petition - availability of alternative efficacious remedy - HELD THAT:- Due to the availability of alternative efficacious remedy, by virtue of Section 60 (5) (c) of the I B Code, 2016, the argument of non-maintainability of petition is not accepted, as the writ petitioner is clearly seeking a mandamus in view of the actions of the respondents Nos. 1 2, where in spite of the binding nature of Section 31 of the I B Code, are denying the writ petitioners electricity connections by making the same contingent upon the recovery of pending dues not attributable to it. The petition is allowed. Service Tax 2024 (6) TMI 307 Export of services or not - services provided by the appellants to their overseas clients - Place of Provision of Services Rules, 2012 (POPS). Whether the services provided by the appellants to their overseas clients is an export of services or not, in terms of the Finance Act, 1994 and Rules framed thereunder? - HELD THAT:- The nature of services provided by the appellants in the present case, prior to 01.07.2012 were specifically covered under taxable category under Section 65(105) (zi) ibid and after 01.07.2012 generally under the scope of services as these are do not fall outside the scope of taxability of services under Section 66B ibid read with definition clause under Section 65B(44) ibid. The provision of services that were covered under the net of service tax were those services provided within the territory of India except the State of Jammu and Kashmir. Thus, services provided to any person situated outside taxable territory, as a corollary, are not liable to be pay service tax. Thus, it is clear that when any services are provided outside the taxable territory and when such services fulfil the specified conditions provided Rule 6A of Service Tax Rules, 2005 to qualify as export including the essential requirements that the recipient of service is located outside India, payment of service provided is received in convertible foreign exchange, this would be treated as export of services, and there is no levy of service tax thereon. In the present case, it is not disputed that the services were rendered to the clients situated abroad who are located outside India and the consideration were received in convertible foreign exchange as evidenced by purchase orders, invoices and Certificate of Foreign inward remittances provided by the City Union Bank Limited, International Banking Division, Chennai with which the appellants had held current account. Whether service tax is liable to be paid on such services provided by the appellants to their overseas clients, in terms of Place of Provision of Services Rules, 2012 (POPS)? - HELD THAT:- The place of provision shall in general be the location of recipient of service, except in certain circumstances specified therein. These exceptions include performance based services, situations where services have been provided relating to immovable property, certain events such as celebration, conference, fair, exhibition etc., and certain specific services. In such cases, the place of provision of services is stated therein in the respective Rules. In the factual matrix of the present case, Rule 4 ibid is relevant as it provides for the situation where the services are actually performed on the goods that are physically made available to the service provider to work upon thereon; or the service provider is given remote access through electronic means to work upon the goods though these could be situated at the service recipient s premises/place. In terms of Rule 4 ibid, in respect of goods which are physically available with the service provider, the place of provision of service would be the place where services are actually performed and this would be the premises of the appellant, whereas in the case of goods, where access is provided through electronic means, then the place of provision of service would be the place where the goods are situated at the time of provision of service - As the appellants have got limited access through electronic means, duly restricted through user id password, user access, and the goods remain with the service receiver situated abroad, the place of provision in this case is clearly proved to have been situated outside India. The services provided by the appellants in the present set of facts is export of services in terms of Sections 66B, 66C of the Finance Act, 1994 read with Rule 6A of Service Tax Rules, 1994 and the first proviso to Rule 4 of the Place of Provision of Services Rules, 2002. Therefore, the impugned order is liable to be set aside to the extent it had confirmed the adjudged demands proposed in the SCN - the impugned order set aside - appeal allowed. 2024 (6) TMI 306 Classification of services - Management or Business Consultant Services or not - Levy of tax under the category of Business and Management Consultancy Services on the services provided in relation to merger and acquisitions - Interest and penalty. Classification of services - Management or Business Consultant Services or not - services related to merger and acquisition, including financial and business analysis, target screening, financial analysis, due diligence, deal structuring, and post-acquisition integration - HELD THAT:- While considering the nature of the services provided by the appellant commissioner has referred to the brochure of the appellant wherein the nature of services provided by the appellant have been detailed. Undisputedly one of the category of services provided by the appellant as per their own brochure is in relation to merger and acquisitions. Taking into considerations the nature of services as detailed in the brochure and the clarification issued by the Board vide letter F.No. 177/2/2001-CX4, dated 27.06.2001 under Section 37- B Order No.1/1/2001-ST dated 27.06.2001, Commissioenr ahs conclude that the service provided by the appellant are appropriately classifiable under the category of Business and Management Consultant Services. The same issue has been considered by the Chennai Bench in case of M/S. VSL INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI [ 2023 (3) TMI 802 - CESTAT CHENNAI] and it was held that Having so concluded that the services in question do not constitute the services of a consulting engineer, the question remains as to whether these services constitute the services of a management or business consultant. We have considered the interpretation placed upon the definition of the term management or business consultant employed in section 65(65) by the Board. From that interpretation, and from the words of the statute, what emerges is that the task of management extends to all those tasks that do not constitute the core business of the enterprise, and which do not fall under other specialisations. From the brochure of the appellant it is evident that appellant is providing a vast category of services some of which may be classifiable under the category Legal Consultancy Services and hence the value of the said services has to be excluded while determining the demand for the period prior to 01.09.2009. While determining the quantum of service tax payable certain amounts have been excluded as per the show cause notice - For the redetermination of the amounts which should be subjected to tax under the category of Business and Management Consultants the issue needs to be reconsidered by the original authority for the entire period of demand. Levy of tax under the category of Business and Management Consultancy Services on the services provided in relation to merger and acquisitions - HELD THAT:- It is quite evident that the issue in regards to levy of tax under the category of Business and Management Consultancy Services on the services provided in relation to merger and acquisitions had been clarified by the Board as early as in 2001 vide the circular referred earlier. Once such a clarification, has been issued appellant cannot plead bonafide and nonpayment of tax on such activities cannot be said to be bonafide act but a clear case of contempt of the statutory provisions. Appellant have by suppressing the value of taxable service so rendered by not taking registration with the department have contravened various provisions of the Finance Act, 1994 as detailed earlier. Thus the extended period of limitation as per proviso to Section 73 (1) has been rightly invoked for making this demand. Interest and penalty - HELD THAT:- Since the demand of tax is maintainable in the present case the demand of interest under Section 75 and the penalty imposed under Section 77 and Section 78 to are maintainable. Penalty under Section 78 needs to be re-determined after determining the quantum of tax payable in the remand proceedings. Appeal partly allowed and the matter remanded to the original authority for redetermination of the quantum of tax payable and penalty under Section 78, on the basis of re-determined quantum of tax. 2024 (6) TMI 305 Rejection of appeal due to non-compliance of mandatory pre-deposit in terms of Section 35F of the Central Excise Act, 1944 readwith Section 83 of the Finance Act, 1944 - HELD THAT:- The Tribunal in the case of Army Welfare Housing Organisation [ 2024 (3) TMI 854 - CESTAT NEW DELHI ] has observed that there is no provision of using DRC-03 for the purpose of pre-deposit. The CBIC Circular dated 28.10.2022 specifically clarifies the pre-deposit payment method for cases pertaining to Central Excise and Finance Act, 1994. The deposit made by the appellant towards pre-deposit under Section 35 of Central Excise Act, 1944 by way of DRC-03 cannot be accepted. As regards the contention that they made a request that they will make the pre-deposit as per the circular, it is held that the CBIC Circular dated 18.04.2023 categorically states that payment of pre-deposit under DRC-03 is not acceptable. Further, the appellant was at liberty to make the pre-deposit as per the CBIC Circular instead of merely claiming that he was willing to make. The appellant did not follow through his claim. There are no infirmity in the impugned order and the same is upheld - appeal dismissed. 2024 (6) TMI 304 Levy of service tax - business auxiliary services - reverse charge mechanism - foreign bank charges - HELD THAT:- As per the fact, the appellant had no dealing or contract or agreement with the foreign bank. The appellant have received the proceed from foreign buyer and while remitting payment by the foreign bank to Indian bank, certain banking charges were deducted. Since the dealing of banking activity is strictly between the foreign bank and Indian bank, at the most, any taxable service involve, it is between the foreign bank and the Indian bank and Indian bank is liable to pay service tax. As per the submission of the appellant, the Indian bank has discharged service tax and collected from the appellant. As regards the appellant s status is concerned, the appellant is not recipient of service. The issue is no longer res-integra - Accordingly, the demand in the present case is not sustainable hence, the impugned order is set-aside - appeal is allowed. 2024 (6) TMI 303 Classification of services - construction services - works contract services or not - composite services - quantification of demand - invocation of extended period of limitation. Classification of services - HELD THAT:- The Ld. Counsel does not dispute that the works executed were composite in nature involving both use of materials and rendition of service. The services are therefore correctly classifiable under Works Contract Service. The issue of classification is not disputed by the appellant. Extended period of limitation - HELD THAT:- The appellant has paid service tax on 33% of the consideration received. It is indeed correct that the issue of classification of construction services was doubtful and the issue of classification of services being interpretational in nature, the demand raised for the extended period cannot sustain and requires to be set aside. The department has not brought out any positive act of suppression on the part of the appellant. The entire figures have been taken from the accounts of the appellant and the Department reclassified the services under WCS. The appellant has correctly discharged service tax and the allegation is only with regard to the classification of the construction services - The demand for the period April 2012 to June 2012 would fall within the normal period and the appellant is required to pay service tax for this period under the category of WCS. Benefit of composition scheme denied - HELD THAT:- The demand raised by the department @ 12% denying abatement and composition scheme is not sustainable. The reason for denying the benefit of composition scheme is that the appellant has not obtained permission from the Department for applying composition scheme. When the appellant has classified the services under construction of Complex Services, there is no situation that appellant would apply for permission to adopt composition scheme - The Tribunal in the case of ABL Infrastructure Pvt. Ltd. Vs CCE Nashik [ 2015 (2) TMI 801 - CESTAT MUMBAI ] has held that even if the assessee has not obtained permission from the Department for opting the composition scheme, the benefit of the said scheme has to be extended to the assessee. Thus, the quantification of service tax has to be done applying the composition scheme. The details of the service tax that has to be paid by applying the composition scheme is calculated by the appellant. It is noted that after deducting the amount of service tax that has already been paid by appellant, the amount of service tax payable for the normal period would be Rs.5,759/-. The appellant has to discharge this differential amount of service tax along with interest. Penalties for the normal period are set aside for the same reason which is discussed for invocation of extended period. Appeal allowed in part. 2024 (6) TMI 302 Refund of service tax - rejection on the ground that the goods exported were not time sensitive documents, goods or articles and observed that the service received by the appellant cannot be classified under the category of courier service - HELD THAT:- The Department has accepted the Service Tax payment made by the appellant under the category of courier agency . If the silk goods exported by the appellant were not considered as time sensitive documents, then there was no liability for payment of Service Tax under the category of courier agency service . Having accepted the Service Tax paid by the appellant under the category of courier agency service, the Department cannot reject the refund on the ground that the payment of Service Tax under the category of courier agency was not in order. The payment of Service Tax by the appellant for the courier services in connection with export is not in dispute. Notification No. 17/2009-S.T. dated 07.07.2009 allows refund of Service Tax in respect of input services used in connection with export of goods. Since payment of Service Tax and utilization of the services in the export of goods is not in dispute, we hold that the appellant is eligible for the refund of Service Tax paid in terms of Notification No. 17/2009-S.T. dated 07.07.2009. The impugned order rejecting the refund claim set aside - appeal allowed. 2024 (6) TMI 301 Classification of services - manpower recruitment or supply agency service or not - activity of processing and manufacturing for the client viz. M/s. Jindal Stainless Steel Ltd. - Demand arisen due to non-consideration of the gross amount received as inclusive of tax - Demand of service tax arisen due to disallowance of rectification of accounting mistake - Demand of service tax on the services rendered by the Appellant as a sub-contractor and other miscellaneous issues - Services of erection, commissioning and installation - abatement claim - Demand of service tax pertaining to accounting error - Demand restricted for the period after 23.08.2007 - penalty. Classification of services - manpower recruitment or supply agency service or not - activity of processing and manufacturing for the client viz. M/s. Jindal Stainless Steel Ltd. - HELD THAT:- It is observed that the appellant has to perform the operation of the plant and machineries for processing of raw materials and manufacture of the resultant excisable product i.e. Ferro Chrome and Ferro Manganese. The labour force deployed by the Appellant worked under the direct control and supervision of the Appellant and not under M/s Jindal Steel Limited (JSL). It is very clear that the responsibility of the Appellant under the contract is to operate the plant and machineries for manufacture finished product out of the raw materials belonging to M/s. Jindal Stainless Limited. Thus, the activity performed by the appellant does not qualify as manpower recruitment or supply agency service . The appellant has been paid @ Rs.5.50 per MT. Thus, the consideration paid to the Appellant was on tonnage basis and not on the basis of manpower deployed - the activity performed by the appellant can be categorized as business auxiliary service for the processing / manufacturing of goods for M/s. Jindal Stainless Limited, which is outside the purview of Service tax in terms of Notification No. 8/2005-ST dated 01.03.2005. Accordingly, the demand of service tax confirmed in the impugned order under the category of manpower recruitment or supply agency service is not sustainable and hence, the same is set aside. Demand arisen due to non-consideration of the gross amount received as inclusive of tax - HELD THAT:- Since the activities undertaken by the appellant have been held to be not liable for service tax, the question of levy and collection of Service tax on the gross amount as inclusive of service tax does not arise. Accordingly, the demand of service tax confirmed without extending cum-tax benefit also would not survive. Hence, the demand of Rs.10.77 Lakhs confirmed in the impugned order on this count, is set aside. Demand of service tax of Rs. 10.65 lakhs arisen due to disallowance of rectification of accounting mistake - HELD THAT:- M/s. Srikanta Associates have not specifically clarified with evidence as to on what account the differential amount of Rs.89,54,364/- was incorrectly shown in the P L account prepared by M/s. Parida Mohanty Associates. It is observed that the appellant need to clarify this point and for this purpose, the issue is remanded back to the adjudicating authority. The appellant should submit all the documentary evidence available with them within a period of one month from the date of receipt of this Order. Thereafter, the adjudicating authority shall decide the issue within a period of three months, after giving opportunity to the appellant to clarify the issue. Demand of service tax of Rs. 5.97 lakhs, on the services rendered by the Appellant as a sub-contractor and other miscellaneous issues - HELD THAT:- Board vide Circular No. 96/7/2007-ST dated 23.08.2007 clarified that for the services provided, sub-contractors are liable to pay service tax even if the main contractor discharges service tax on the gross value. However, it is observed that the said Circular, being oppressive in nature for the subcontractor, could only have prospective effect - the appellant, as a sub-contractor, is liable to pay service tax only with effect from 23.08.2007. Accordingly, the demand confirmed in the impugned Order on this count is restricted to the period after 23.08.2007 and the demand, if any, for the period prior to 23.08.2007, is set aside. Services of erection, commissioning and installation - abatement claim - HELD THAT:- The appellant has not furnished any break up figures towards this service rendered. Also, no evidence has been submitted regarding supply of materials for claiming the abatement as provided under Notification No. 01/2006-ST. Therefore, for the purpose of quantification of duty liability as a subcontractor and under erection, commissioning and installation, the matter is remanded back to the adjudicating authority. Demand of service tax pertaining to accounting error - HELD THAT:- There is no suppression of fact with intention to evade payment of tax established on this count. Accordingly, no penalty imposable on the appellant on this amount and accordingly, the penalty imposed in this regard on the appellant in the impugned order is set aside. Demand restricted for the period after 23.08.2007 - HELD THAT:- The demand of service tax of Rs. 5.97 lakhs confirmed in the impugned order is restricted for the period after 23.08.2007 and the demand, if any, for the period prior to 23.08.2007, is set aside. However, for the purpose of quantification of duty liability as a sub-contractor and under erection, commissioning and installation, the matter is remanded back to the adjudicating authority. Penalty - HELD THAT:- Since the demands of service tax of Rs.53.54 lakhs and Rs.10.77 lakhs set aside, demanding interest or penalty on these amounts does not arise. Appeal disposed off. Central Excise 2024 (6) TMI 300 Scope of SCN - invocation of the provisions of the Customs N/N. 21/2002 at the adjudication stage which were not cited in the SCN - goods supplied against International Competitive Bidding - benefit of Sr. No. 91 of Notification No. 6/2006-CE and Sr. No. 336 of notification no. 12/2012-CE denied - non-observance of the condition with respect to furnishing of undertaking by the Chief Executive Officer - Failure to produce the requisite certificate to the Deputy Commissioner of Central Excise. Scope of SCN - HELD THAT:- Invoking of the provisions of the Customs N/N. 21/2002 at the adjudication stage which were not cited in the show cause notice was clearly beyond the scope of SCN as rightly contended by the Ld. Counsel of the appellant and further the argument of the Ld. Counsel is agreed upon that the provisions of the Custom notification no. 21/2002 cannot be applied to the appellant who is not the importer of the goods. Therefore, the benefit of Sr. No. 91 of Notification No. 6/2006-CE and Sr. No. 336 of notification no. 12/2012-CE could not be denied to them as the goods were duly certified by the jurisdictional Assistant Commissioner to the effect that all the invoices were for the goods supplied against International Competitive Bidding. Non-observance of the condition with respect to furnishing of undertaking by the Chief Executive Officer - HELD THAT:- In view of the categorical findings of the Jurisdictional Assistant Commissioner that the genuineness of the quantum of the claim of the appellant on the verification of the invoices is not disputed and the appellant was duly in possession of the requisite certificate from the Chief Engineer in the Central Electricity Authority, copy of which was also marked to the department, it is found that the appellant had substantially complied with the provisions of the relevant notification and mere non-submission of undertaking was only a procedural infringement and substantial benefit cannot be decided merely for a bonafide procedural lapse whereas the provisions of the notification were otherwise fully complied substantially by the appellant - thus, no demand is sustainable against the appellant under Sr. No. 91 of Notification 6/2006-CE and Sr. No. 91A of Notf. 6/2006-CE as amended by Notf. 46/2008 as well as notification 12/2012-CE. Failure to produce the requisite certificate to the Deputy Commissioner of Central Excise issued by the Deputy Secretary to the Government of India in the Ministry of Non-Conventional Energy Sources/ Ministry of New and Renewable Energy as well as an undertaking that the goods will be used only in the said project and not for any other use - HELD THAT:- It is found that the copy of the requisite certificate has been supplied by the Ministry directly to the department this fact has not been disputed by the department. Further, it is also not disputed that the invoices were issued according to the project Certificate. Once these conditions are satisfied, merely that the requisite certificate was not furnished by the appellant is merely procedural. Further, the purpose of required undertaking was merely to ensure that the exemption is not being misused. Once the genuineness of the invoices has been verified and found to be justify the quantum of claim of the appellant as verified by the Jurisdictional assistant Commissioner, the non-submission of undertaking by the appellant is merely procedural and the appellant should not be denied the substantial benefit merely for procedural lapse. There was a substantial compliance of the provisions of the exemption notifications under reference and the substantial benefit could not be denied merely for procedural lapse - The impugned order is set aside - appeal allowed. 2024 (6) TMI 299 Clandestine removal - shortage of stock - penalty imposed on the Company and Director - HELD THAT:- There are force in the argument of the Learned Counsel that while shortage was detected and was also accepted by the Appellant Company, the Department has not alleged as to when these stocks could have been dispatched clandestinely so as to attract interest for the intervening period. The stock taking was conducted on 24/11/2015 and 25/11/2015. The Appellant has paid the Excise Duty on 25/11/2015 in respect of the shortage found. Therefore, there is no provision to demand the interest from the Appellant Company for the already paid Excise Duty. Hence, the interest demanded under the impugned order is set aside. Penalty on appellant company - HELD THAT:- Since they could not avail the benefit of the 25% of the penalty earlier, now they are given the option to pay the penalty @ 25% of 3,46,438/-. They should pay the revised penalty amount by 31st July 2024. Penalty on the Director - HELD THAT:- The Department has not made out any specific case against the Director to implicate him for the shortages found. As can be seen from the recorded statement of Mr. Subrata Goswami, it is seen that he is taking care of day to day activities of the company. Therefore, there are no justification imposing penalty on the Director and the same stands set aside. Appeal allowed in part. 2024 (6) TMI 298 Clandestine removal - refund of amount paid under protest - HELD THAT:- It is found that initially demand of duty amounting to Rs. 46,96,664/- along with interest and penalty was confirmed by both the authorities below against which the appellant filed the appeal and the Tribunal vide order dated 24.08.2016 allowed the appeal of the appellant with consequential relief. It is a fact that during the investigation, the appellant deposited Rs. 15,45,000/- and after the decision of the Tribunal filed a refund claim which was sanctioned but thereafter a show cause notice dated 18.05.2017 was issued proposing to recover the erroneous refund of Rs. 15,45,000/-. The appellant paid the duty amouting to Rs. 46,97,000/- under protest by debiting the Cenvat credit account in order to avoid interest liability in future if the department succeeds before the Hon ble High Court of Punjab and Haryana - Subsequently, the department on 20.09.2018 withdrew its appeal on monetary grounds and the appellant after the withdrawal of the appeal by the department filed the refund claim which was rejected wrongly by both the authorities, by observing that the appellant had debited Cenvat credit account just to encash the same. Once, the decision of the Tribunal attained finality the appellant is entitled to claim refund Rs. 46,97,000/- which was deposited by him under protest by debiting RG-23A. The appellant is entitled to refund of Rs. 46,97,000/- on the basis of the order passed by the Tribunal dated 24.08.2016; therefore, the impugned order is set aside - appeal allowed. 2024 (6) TMI 297 100% EOU - refund of excess duty alongwith interest - additional amount of duty was deposited as per the demand raised by the department which was found as not correct - Payment of additional duty under protest or not - Rejection of refund claim on the ground that appellant have not challenged the letter / communication - HELD THAT:- The factum, payment of duty of interest either on the basis of the communication dated 30.07.2009 received from the Department and on the basis of self assessment is not in dispute. It is also not in dispute that the said assessment which has been made resulting in payment of this duty has never been challenged before any Appellate Authority and the said order of assessment has been set aside. In view of the above decision of Hon ble Apex Court in the case of ITC Ltd [ 2019 (9) TMI 802 - SUPREME COURT] provisions of refund contained in the Section 27 of Customs Act and Section 11B of Central Excise Act are only executionary in nature and cannot result in setting aside or modifying the assessment orders (both on direction of the Department or self assessment). In these proceedings, if these assessment orders are to be modified then resort should have been taken to the appellate proceedings as provided in law - The order of Appellate Authority to the extent whereby he has held that appellant having not challenged this letter dated 30th July, 2009 by way of appeal cannot claim refund of duties paid by way of proceeding under Section 27 of Custom Act,1962 or Section 11B of Central Excise Act, 1944. In case of Mafatlal Industries [ 1996 (12) TMI 50 - SUPREME COURT] it was held that We respectfully agree with the above propositions and hold that the said principles apply with equal force in the case of both the Central Excises and Salt Act and the Customs Act. Once this is so, it is un- understandable how an assessment/adjudication made under the Act levying or affirming the duty can be ignored because some years later another view of law is taken by another court in another person s case. Nor is there any provision in the Act for re-opening the concluded proceedings on the aforesaid basis. There are no merits in this appeal - appeal dismissed. 2024 (6) TMI 296 Liability to pay an amount equal to 5%/ 10% of the value of the exempted goods under the Rule 6 (i) of Cenvat Credit Rules, 2004 - non-maintenance of separate records - proportionate credit in terms of Rule 6(3A) of Cenvat Credit Rules, 2004 reversed - interest in case of delay also paid - HELD THAT:- There is no dispute that the appellant have paid the proportionate credit in respect of the exempted goods in terms of 6(3A) of Cenvat Credit Rules,2004 along with the interest wherever there is a delay. Therefore, as per the settled legal position in various judgments particularly in the case of appellant vide Tribunal sOrder No. A/10312/2022 dated 05/04/2022 [ 2022 (4) TMI 475 - CESTAT AHMEDABAD] the demand is not sustainable. In view of the above order coupled with a catena of judgments, whereby, it was consistently held that when proportionate Cenvat Credit attributed to exempted goods has been reversed and interest was also paid in case of delay in reversal, the demand of 5%/ 10% in terms of Rule 6(3)(i) of Cenvat Credit Rules will not sustain. Therefore, following the juridical decision in various judgments and also on the judgment in the above order of Tribunal in the appellant s own case the proposal of present demand in show cause notice is not sustainable. The impugned order passed by the Adjudicating Authority is proper and legal which does not require any interference - appeal of Revenue dismissed. 2024 (6) TMI 295 Recovery of erroneous refund of the duty paid in PLA - no substantial expansion exceeding 25% of installed capacity - Suppression of Facts - No expansion of critical machineries related to the installed capacity - Wrong assessment of the installed capacity - period July 2008 to October 2008, February 2009 and April 2009 to July 2009 ( upto 07.07.2009). Substantial expansion of the Appellant unit - HELD THAT:- The issue of substantial expansion of the Appellant unit has already been adjudicated by the Ld. Commissioner of Central Excise in COMMR. OF C. EX., DIBRUGARH VERSUS HINDUSTAN COCA COLA BEVERAGES (P) LTD. [ 2005 (1) TMI 504 - CESTAT, KOLKATA] , against which the Revenue filed an appeal before this Tribunal. This Tribunal vide order dated 20th January, 2005, rejected the appeal of the Revenue. Therefore, raising the issue of substantial expansion again by the Ld. Commissioner (Appeal) is bad in law which has attained finality. In the impugned order, the Ld. Commissioner (Appeals) has gone beyond the scope of the appeal and held that the appellant has not fulfilled the condition of substantial expansion. It is observed that this issue was not before the Ld. Commissioner (Appeals). The issue before the Ld. Commissioner (Appeals) was that the refund sanctioned to the appellant for the period in dispute was erroneous or not. However, the Ld. Commissioner (Appeals) has decided the issue of substantial expansion which was not there before him. The issue of substantial expansion has already been decided for the unit in the Tribunal orders. The same issue against the same unit cannot be raised again, which is against the principle of res judicata - the impugned order is liable to be set aside - Appeal allowed. 2024 (6) TMI 294 CENVAT Credit - inputs - MS angles, MS channels, MS beams, MS joists, MS plates etc. used in the fabrication of various machineries, support structures, platforms for machineries and equipments etc. used in the factory - Retrospective applicability of the amendment in CENVAT Credit Rules, 2004 - HELD THAT:- Undisputedly, the appellants during the relevant period used the aforesaid inputs in their factory in the fabrication / manufacture of various equipments, machineries, plants etc. and support structures holding the capital goods. The learned Commissioner in the impugned order following the judgment of the Larger Bench of this Tribunal in VANDANA GLOBAL LTD. VERSUS CCE [ 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] decided the issue against the appellants holding that credit is not admissible on the aforesaid inputs used in the fabrication of various capital items. Retrospective applicability of the amendment in CENVAT Credit Rules, 2004 - HELD THAT:- The issue is no more res integra and covered by the judgement of Hon ble Chhattisgarh High Court in M/S VANDANA GLOBAL LIMITED AND OTHERS VERSUS COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, CENTRAL EXCISE [ 2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT] , whereunder it is observed that Section 37(2)(xvia) provide for the credit of duty paid or deemed to have been paid on the goods used in, or in relation to, the manufacture of excisable goods . The impugned orders are devoid of merit and accordingly the same are set aside - Appeal allowed. CST, VAT & Sales Tax 2024 (6) TMI 293 Maintainability of revision petitions - rejection of revision petition filed by the petitioner on the ground of being filed barred by limitation - HELD THAT:- Admittedly, the Writ Petitioner has filed Revision Petitions in time i.e., within 30 days, as mentioned in the order passed in the aforesaid Writ Petitions and even the petitioner has not been heard before the impugned orders are passed and therefore the same is in violation of principles of natural justice and hence, the order rejecting the revision petitions on the ground of limitation is per se illegal and liable to be set aside. The impugned orders are set aside - Petition allowed. 2024 (6) TMI 292 Challenge to assessment order - failure to file returns and levy of tax and penalty - jurisdiction to pass the order - Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Act, 1990 - HELD THAT:- From sub-section (5) to Section 8 of the Entry Tax Act, it would be clear that any assessment ought to be made within 3 years from the last date prescribed for filing of returns of the particular period. Rule 3(2) of the Tamil Nadu Tax on Entry of Goods into Local Areas Rules, 2001, provides that if the importer is a dealer in motor vehicles, the importer ought to file its return on a monthly basis on or before 20th of the succeeding month while an importer other than a dealer in motor vehicles, shall file quarterly returns on or before last day of the month immediately succeeding the quarter. The impugned assessment relates to the Assessment Year 2010-11. Thus, the assessment ought to have been made within 3 years from the last date prescribed for filing of returns i.e., 30.06.2014 inasmuch as the respondent is not a dealer in motor vehicles. However, the notice for assessment was issued only on 29.09.2015 and the impugned order of assessment was made on 07.07.2016 which is beyond the period prescribed for original assessment in terms of Section 8(5) of the Entry Tax Act and thus, beyond the limitation stipulated under Section 8(5) of the Entry Tax Act and hence, barred by limitation. The impuged order of assessment being without jurisdiction, is liable to be set aside - appeal dismissed. Indian Laws 2024 (6) TMI 291 Seeking quashing of the complaint proceedings pending before the Chief Judicial Magistrate, Lucknow - doctrine of Vicarious liability - applicant is the Chairman and Managing Director of Wipro Ltd. (Company) and has no interest in any shareholdings or managerial control over the M/s G4S Secure Solutions (India) Private Limited - HELD THAT:- This Court finds that the summoning order dated 03.09.2016 and the subsequent bailable warrant issued on 08.02.2017 against the applicant, lacks necessary legal and factual foundation. There appears force in the argument of learned Counsel for the applicant that the applicant has no administrative control over the functioning of G4S, he could not have been summoned for the alleged violation of the Equal Remuneration Act, 1976 under which the complaint has been preferred by opposite party No.2. Further, on bare reading of complaint dated 26.08.2016, it is apparent that there was no objective material before learned Chief Judicial Magistrate, Lucknow to formulate an opinion for issuance of summoning order or even to register the complaint. It is thus, apparent that the registration of the complaint, the issuance of summoning order dated 03.09.2016 and the consequential issuance of bailable warrant vide order dated 08.02.2017 had been done in a mechanical manner sans application of mind whereas it has repeatedly been held that prior to the issuance of a summoning order it is imperative for learned Chief Judicial Magistrate to examine the complaint to ensure that the Directors or other senior officers of the company who have been named in the complaint are vicariously liable for the act complained of - As per the settled law, learned Chief Judicial Magistrate, Lucknow could not have issued process to the applicant under Section 204 Cr.P.C. and as such the entire complaint proceedings initiated against the applicant as well as summoning order dated 03.09.2016 and the order dated 08.02.2017 issuing bailable warrant against the applicant are without jurisdiction. Whether the applicant was liable for any offence even if the allegations in the complaint are taken on their face value to be correct in entirety? - HELD THAT:- The Company is a body incorporated under the Companies Act. Vicarious criminal liability of its Directors and Shareholders would arise provided any provision exists in that behalf in the statute. The Statute must contain provision fixing such a vicarious liability. Even for the said purpose, it would be obligatory on the part of the complainant and the investigating agency to make requisite allegations and collect evidence in support thereof which would attract provisions constituting vicarious liability. The applicant s impeccable reputation as an industrialist who upholds the highest standard of corporate governance and his extensive philanthropic contribution should be taken into account. His involvement in the case appears to stem from a misunderstanding or misapplication of legal principles rather than any malafide intent or violation of the Equal Remuneration Act, 1976. The orders issued against him lacks substantive ground, as the applicant has no direct or indirect control over the alleged matter and in light of the applicant s distinguished career and substantial contributions to society, it is evident that the proceedings against him are unfounded and merit reconsideration. The instant application under Section 482 Cr.P.C. filed by the applicant is allowed in respect of the instant applicant, namely-Azim Premji.
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H: GST Taxpayer Granted Two Weeks to File Rectification Application Under...

H: Assessment Order Without Officer's Signature and DIN Ruled Invalid Und...

H: Property Acquisition Deemed Complete Upon Full Payment, Not Registrati...

H: Income Tax Reopening Under Section 147 Quashed Due to Vague Reasons an...

H: Gold Hire Charges Paid to Directors Deemed Valid Business Expense When...

F: Single Invoice Series Allowed for Multiple Billing Locations Under Sam...

F: Principal Must Pay GST on Materials Sent to Absconding Job Worker Unde...

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Newsletter: Where Service Meets Reader Approval.

TMI Tax Updates - e-Newsletter June 10, 2024

Articles

1. NAVIGATING THE LABYRINTH : UNDERSTANDING GAAR AND ITS IMPACT ON TAX AVOIDANCE

2. HC grants stay on Demand Order wherein Validity of Extension Notifications Under section 168A of the CGST Act, Challenged

3. Statutory Due Dates- June Compliance Calendar 2024

4. UNIT HOLDERS’ NOMINEE DIRECTOR UNDER SEBI (REIT) REGULATIONS, 2014

Circulars / Instructions / Orders

1. 09 - dated 7-6-2024

Highlights / Catch Notes

GST

Mismatch between the GSTR 3B return and the GSTR 1 statement: Court finds lack of fair chance to contest. Order set aside for reevaluation.

Violation of fairness: Petitioner's explanations ignored. Discrepancies unaddressed. Order set aside for review.

Extension of time for tax assessment or notice issuance. Order passed during ongoing case. No enforcement until next court date.

High Court ruled against alleged excess input tax credit claim due to violation of natural justice principles. Stay on demand order till next hearing.

Income Tax

Tribunal Orders Tax Refund with Interest Due to Discrepancies in TDS and Advance Tax Calculations, Favoring Assessee.

Corpus donation: The tribunal ruled that the amended provision of section 11(1)(d) is not applicable for AY 2018-19.

Income accrual in India not taxable as FIS/FTS. No tech services provided. Addition deleted. Software sale not FTS.

Assessee not liable for advance tax due to no taxable income. Appeal should be admitted for further review.

ITAT Rules Bonus Shares Not Dividend Income; Sections 2(22)(b) and 56(2)(viia) Inapplicable to Equity Shareholders.

Reassessment against dissolved company turned LLP is invalid. Dead person notice void.

Appellant granted right to collect toll considered intangible asset eligible for depreciation @ 25%.

Assessee wins appeal! Declaring income u/s 44AD protects from additions u/s 68. Bank passbook not a book of accounts.

Assessee's registration application u/s 12AB rejected for not proving activities' genuineness. Tribunal grants another chance for proper hearing.

Validity of summoning order under Benami Act by Special Court in Lucknow for trial of offences. No illegality found.

Tribunal Rules No Penalty for Assessee's Honest Mistake in Tax Filing, Dismissing Revenue's Claim of Inaccurate Income Disclosure.

Revision u/s 263: ITAT ruled in favor of the assessee on eligibility for deduction u/s 80G. No error found in AO's decision.

Loss from selling shares on stock exchange can be set off against long-term capital gain from unlisted shares.

Assessment u/s 153A: Approval u/s 153D granted mechanically without due application of mind. Approval for all years on same day not valid.

ITAT Upholds Assessee's Contractor Expense Claims; Sales-Tax Subsidy as Capital Receipt; 14A Provisions for AO Review.

Levy of penalty: ITAT ruled in favor of assessees on taxability of secondment receipts, citing bonafide belief & full disclosure.

ITAT ruled in favor of the assessee on disallowance of business promotion expenses and cessation of liability.

Tribunal Overturns Commissioner's Section 263 Revision, Emphasizes Objective Standards for Assessing Officer's Decisions on Capital Gains.

Appellate Tribunal Affirms Key Tax Principles, Allows Revenue Expense Claims, Orders Reassessment of Transfer Pricing Issues.

Appellate Tribunal Confirms Executive Pay Provision, Resolves TDS Credit Issue, Remands Deferred Grant for Further Review.

Customs

Baggage contained Dexamethasone, a dutiable item. Respondents convicted for evading duty. Fined Rs. 50,000 each.

Petition dismissed: Gold released by Customs Department cannot be granted relief against provisional attachment order. ED can proceed.

Restoration application for appeal before CESTAT: Appellant complied with mandatory pre-deposit. Appeal allowed.

Appellant mis-declared goods to evade customs duty, using ineligible licenses. Extended period justified. Show Cause Notice time-barred.

CESTAT ruled on confiscation of imported goods & penalties u/s 111(d) & 112(a) of CA 1962 when re-exported.

CESTAT ruled refund claims filed under protest within time limit are valid. Assessment not challenged. Revenue appeals dismissed.

CESTAT ruled on levy of Redemption fine for steel coils import. DGFT's MIP notification valid. Customs bound by DGFT notifications.

IBC

Writ Petition on Electricity Dues Deemed Maintainable Despite Alternative Remedy, Court Allows Resolution Plan Execution.

Service Tax

Services for Overseas Clients Deemed Export, Exempt from Tax Under Finance Act 1994; Tax Demands Overturned.

Tribunal Rules M&A Services as Taxable Business Consultancy; Upholds Penalties, Orders Recalculation of Tax and Penalty.

CESTAT ruled in favor of appellant on service tax issue related to foreign bank charges. Indian bank liable for service tax.

Processing and manufacturing services did not qualify as 'manpower recruitment or supply agency service'.

Central Excise

Appellate Tribunal Affirms Exemption Benefits Despite Procedural Lapses; SCN Scope Limited to Cited Provisions.

Refund Denied: Tribunal Rules Assessment Orders Must Be Challenged Through Appellate Proceedings for Duty Disputes.

Case Laws:

GST

Income Tax

Customs

Insolvency & Bankruptcy

Service Tax

Central Excise

CST, VAT & Sales Tax

Indian Laws

Quick Updates:

TMI Tax Updates - e-Newsletter
June 10, 2024