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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter June 18, 2024 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws FEMA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws TMI Short Notes 1. Court Upholds Deduction for Operational Hotel under Section 35AD Despite Administrative Delays Income Tax: Summary: The Madras High Court upheld the ITAT's decision allowing a deduction under Section 35AD(5)(aa) of the Income Tax Act for the Assessment Year 2011-12, despite the hotel obtaining a three-star classification in the subsequent year. The court emphasized that the delay in receiving the classification was due to administrative procedures beyond the assessee's control. Since the hotel was operational and generating income, the deduction was justified. The Revenue's appeal to the Supreme Court was dismissed, making the High Court's judgment final. The court interpreted the provision liberally to support operational businesses. 2. Landmark Ruling: Leasing Businesses Entitled to Depreciation Benefits Income Tax: Summary: The Supreme Court ruled that a non-banking finance company is entitled to claim depreciation on vehicles leased to customers under Section 32 of the Income Tax Act, 1961. Despite the vehicles being registered in the lessees' names, the Court recognized the company's legal ownership and business use through lease agreements, fulfilling the Act's requirements. The Court also granted a higher depreciation rate, equating leasing with running vehicles on hire due to similar business operations. This decision clarifies the interpretation of ownership and business usage for depreciation claims in leasing businesses, overturning the High Court's prior denial. 3. Court Decision on Convertible Debentures Expenses : Revenue or Capital Expenditure? Income Tax: Summary: The Karnataka High Court ruled that expenses incurred for issuing convertible debentures should be classified as revenue expenditure, even if the debentures later convert into shares. The Revenue's appeal against the Income-tax Appellate Tribunal's decision was dismissed, as the Court emphasized that the purpose and usage of the expenditure, primarily to raise working capital in the normal course of business, determine its classification. This decision aligns with the Rajasthan High Court's precedent and the Supreme Court's endorsement, reinforcing the principle that such expenses are revenue in nature. 4. Judgement on Feasibility Study Costs on Project Development: Revenue or Capital Expenditure? Income Tax: Summary: The Delhi High Court addressed whether feasibility study expenses for expanding a cinema business should be classified as revenue or capital expenditure under Section 37 of the Income-tax Act, 1961. The Revenue argued these costs aimed to create new assets, warranting capital expenditure classification. The assessee argued the expenses were for expanding the existing business, not creating new capital assets, thus qualifying as revenue expenditure. The Court concluded that since the expenses were related to the existing business and no new assets were created, they should be classified as revenue expenditure, affirming the Income-tax Appellate Tribunal's decision. Articles 1. The amount in the CENVAT credit account should be refunded in cash By: Bimal jain Summary: The Bombay High Court ruled that the amount in a company's CENVAT credit account should be refunded in cash rather than credited back to the CENVAT account. The company, engaged in manufacturing and exporting medicaments, sought a refund of excess duty paid. Previous orders directed re-crediting the amount, but the court emphasized that under Section 142(3) of the CGST Act, refunds must be paid in cash following the GST regime change. The court held that the refund should be processed in cash with accumulated interest, overriding previous legal provisions. 2. Income Tax Notice-Online Verification and Authentication By: Ishita Ramani Summary: An income tax notice is a formal notification from tax authorities regarding a taxpayer's financial matters, often due to discrepancies, missed deadlines, or unpaid taxes. Common causes include unfiled returns, income discrepancies, errors in tax returns, underreported income, and high-value transactions. Upon receiving a notice, taxpayers should verify its details, identify discrepancies, and respond promptly with necessary documents. Authentication can be done online via the Income Tax Portal using specific criteria. Timely action is crucial to resolve issues and avoid penalties. Consulting a tax expert is recommended for further guidance and compliance. News 1. CBIC mounts campaign against frauds committed in the name of Indian Customs Summary: The Central Board of Indirect Taxes and Customs (CBIC) is launching a nationwide campaign to combat frauds involving individuals impersonating Indian Customs officers. These scams often involve digital communication methods, such as phone calls or SMS, to extort money by threatening immediate legal action. The CBIC's campaign includes newspaper ads, SMS/email alerts, and social media initiatives to raise public awareness. The public is advised to recognize fraudulent tactics, protect personal information, verify communications through official channels, and report suspicious activities. Common scams involve fake calls demanding customs payments for held packages or threatening legal consequences for alleged customs violations. Circulars / Instructions / Orders Customs 1. PUBLIC NOTICE NO. 02 / 2024 - dated 9-5-2024 Launch of functionalities/features on Customs Brokers Licensing Management System (CBLMS). Summary: The Customs Brokers Licensing Management System (CBLMS) has introduced new functionalities to enhance its online portal. These include applications for license continuation after a proprietor's death, an offence module for managing cases, and options for modifying Customs Broker profiles. Additional features include a comprehensive profile view, digital NOC requests, document issuance, a public Customs Broker search tool, QR code status updates, notification alerts, and an account lockout feature for security. These enhancements aim to streamline processes for Customs Brokers and stakeholders, with user manuals available for guidance. 2. Advisory No. 09 / 2024 - dated 2-5-2024 Changes made in recent past in SCMTR module of ICES application-Reg. Summary: Recent updates to the SCMTR module of the ICES application include several trade facilitation measures. Stakeholders can now upload crew effect and ship stores declarations in PDF form via e-sanchit. The bond requirement for goods transshipped from ICD to SEZ has been made optional, provided the final destination is an SEZ. The system now accepts MCIN in SAM filings without additional transport details. Passport numbers can replace consignee codes for foreign nationals' personal effects. The consignee code in SDM filings is now optional, and the expected departure time in SAM filings is no longer mandatory. Domestic sea transshipment no longer requires a bond. The Message Implementation Guide has been updated, and support contacts are provided for assistance. Highlights / Catch Notes GST Principles of natural justice: Court says assessee deserve a fair hearing. Order set aside for fresh consideration. Case-Laws - HC : The High Court considered the liability of the petitioner u/s 73 (9) of the Central Goods and Services Tax / Karnataka Goods and Services Tax Act, 2017. It was found that the petitioner was not provided with an opportunity of hearing, violating principles of natural justice. The court held that the order for the financial years 2017-18 and 2018-19 should be set aside, and the petitioner must be given a hearing as per Section 75 (4) of the KGST Act. The matter is remitted to respondent No. 1 for fresh consideration in accordance with the law. The petition was allowed by way of remand. Visit to Get Source Income Tax High Court ruled notice u/s 148 invalid due to time limit of 10 years. Previous assessment upheld. Case-Laws - HC : The High Court addressed the issue of reopening assessment u/s 147 and the time limit for notice u/s 149. The petitioner received a notice u/s 153C after a search operation in 2019, leading to an assessment order in 2023. The petitioner had appealed successfully against disallowances u/s 40(a)(ia) in the original assessment u/s 143(3). A subsequent notice u/s 148 related to a search in 2022, limited to AY 2014-15 per Section 149(1) proviso. Referring to Filatex India Ltd. and Ojjus Medicare Pvt. Ltd., the Court found AY 2013-14 outside the ten-year block period u/s 153C and 153A, making the notice unsustainable. Visit to Get Source High Court ruled that reasons for reassessment orders must match notice reasons. Appellants must raise objections within 6 weeks. Case-Laws - HC : The High Court considered the validity of reassessment orders u/s 148A(d) where reasons differed from those in notices u/s 148A(b). The primary issue was the taxability of buyout amount and interest on fixed deposit. The Court held that notices u/s 148A(b) must contain reasons for the assessee to respond effectively. Failure to disclose reasons renders the notice ineffective. The Court noted the importance of Section 148A enquiry before issuing notice u/s 148. Orders u/s 148A(d) were deemed as notices u/s 148A(b), requiring appellants to submit objections within six weeks. Any objections would be considered, and orders passed within six weeks after a hearing. Visit to Get Source Assessment Order Invalidated for Ignoring Assessee's Reply; Court Mandates New Order Under IT Act Section 144B. Case-Laws - HC : The High Court examined the validity of an assessment order issued without considering the reply submitted by the assessee in response to a Show Cause Notice. It was held that the Assessing Officer (AO) must consider the assessee's reply before passing the Assessment Order, as per Section 144B of the Income Tax Act, 1961. The AO's explanation that the draft assessment order was already sent for approval and hence the reply was not reflected in the final order was rejected. The court quashed the Assessment Order and remanded the matter back to the AO to issue a fresh order after considering the assessee's reply and providing an opportunity for a hearing if requested. The AO was directed to complete this process within 12 weeks from the date of the court's order. Visit to Get Source Assessee entitled to deduction u/s. 80IA(4) as developer, not contractor. ITAT decision upheld. Case-Laws - HC : The High Court addressed the issue of disallowance u/s. 80IA(4) to determine if the assessee was a contractor or a developer of infrastructure facilities. The Court referred to a previous case where it was established that the assessee was a developer eligible for deduction u/s. 80IA(4). The Court considered various aspects of the agreement, such as payment terms, responsibilities, and insurance, concluding that the assessee was a developer, not a contractor. The ITAT's decision to delete the disallowance was upheld, ruling in favor of the assessee. Visit to Get Source Petitioners filed tax returns without paying tax, but paid in full when notified. No intent to evade tax found. Offence Proceedings quashed. Case-Laws - HC : HC considered a case involving offences u/s 276 C (2) r/w sec 278 B of Criminal Procedure for Economic Offences. Petitioners filed returns without paying tax, attributing it to auditors' mistake. They paid the tax upon realization. Citing M/s. Bejan Singh Eye Hospital Pvt. Ltd, HC held a positive act is needed to establish guilt u/s 276 C (2). Since petitioners paid tax with interest upon notice, showing no intent to evade tax, proceedings were quashed. Criminal Petition allowed, proceedings against petitioners quashed by HC. Visit to Get Source Cash deposits in bank accounts considered business income. Peak cash deposit amount only taxed. Case-Laws - AT : The ITAT considered the issue of cash deposits and other credits in the assessee's saving bank account. The tribunal noted that the cash deposits were not made in a single day but over various occasions, with some amounts transferred to a current account. The assessee claimed the cash came from selling PVC and iron scrap purchased with deposited funds. As the assessee had no other income besides business and capital gains, the cash deposits were deemed business receipts. Due to lack of accounting books, the tribunal applied the peak theory to tax only the peak cash deposit of Rs. 9,70,000, following legal precedents like Godhra Electricity Co. Ltd and Excel Industries Ltd. Grounds No. 3 & 5 were partly allowed based on this analysis. Visit to Get Source Assessee bought agricultural land, not subject to capital gains tax. Addition u/s 56(2)(x) deleted. Appeal allowed. Case-Laws - AT : The ITAT considered an appeal regarding an addition u/s 56(2)(x) where the property in question was agricultural land. The difference between the consideration paid and stamp duty value was disputed. The assessee argued that agricultural land is not a capital asset u/s 2(14), so u/s 56(2)(x) deeming provision doesn't apply. The ITAT found that the assessee purchased 23 bighas of agricultural land supported by a letter from the Tehsildar. Despite the letter being handwritten, it was deemed valid. Since the land was agricultural, outside the definition of a capital asset, the addition was deleted, and the appeal was allowed. Visit to Get Source Tax Tribunal Affirms Stock Valuation Rule; Section 14A Inapplicable Without Exempt Income Claim; Keyman Insurance Expenses Allowed. Case-Laws - AT : The ITAT upheld the CIT(A)'s decision to delete the addition for under-valuation of closing stock, emphasizing that stock statements provided to banks for credit purposes cannot solely determine tax values without independent verification. Regarding disallowance u/s 14A for investment in shares, it was held that if there is no claim of exempted income, Section 14A does not apply, especially when no expenditure was incurred for the investments. The ITAT also supported the CIT(A)'s deletion of the disallowance towards interest on unpaid purchase price, noting the contractual obligation and the vendor's monopoly. Additionally, the disallowance towards insurance expenses for Keyman Insurance Policies was dismissed as the policies benefitted the company, not individual directors. Visit to Get Source Exemption u/s 11: ITAT ruled in favor of assessee on salary & rent payments. Excessive payments not found. Case-Laws - AT : The ITAT addressed issues regarding exemption u/s 11 for excessive payments of salary and rent to persons specified u/s 13(3). The CIT(A) deleted the addition of excessive salary paid to a clerk, justifying it based on the clerk's qualifications and experience. The AO's disallowance of rent payments was overturned as the market rental report supported the payments. The ITAT upheld the CIT(A)'s decision, stating no basis for the AO's additions u/s 13(3). The ITAT concluded that the payments were not excessive u/s 13(3), allowing the exemption u/s 11. The appeal of the assessee was allowed. Visit to Get Source Assessee filed appeal physically before due date. Difficulty in e-filing acknowledged by CBDT. Appeal should be admitted and decided on merits. Case-Laws - AT : The Appellate Tribunal considered the validity of physical/manual filing of appeal u/s the Income Tax Rules. Assessee argued inability to e-file due to lack of assistance and incomplete requirements. Tribunal noted physical filing before due date and CBDT's extension of e-filing time limit due to difficulties. Held that physical filing was valid, directing CIT(A) to admit and decide the appeal on merits, providing ample hearing opportunity to the assessee. Remanded the matter for fresh consideration. Visit to Get Source Tribunal Rules Unpaid World Bank Loan Interest Not Disallowed; Electricity Duty Exempt from Section 43B Tax Rules. Case-Laws - AT : The Appellate Tribunal addressed two key issues. Firstly, it ruled that disallowance of unpaid interest u/s 43B on a loan from the World Bank, advanced by the State Government, was not valid. The Tribunal clarified that interest payable to the State Government or World Bank is not covered u/s 43B, as these entities do not fall under the definition of covered financial institutions. Therefore, the disallowance was directed to be deleted. Secondly, regarding the addition on account of electricity duty u/s 43B, the Tribunal held that the duty collected by the assessee from consumers does not constitute trading receipts. As the duty is collected on behalf of the government and not levied on the assessee, section 43B does not apply. The Tribunal cited a Kerala High Court case, upheld by the Supreme Court, to support this ruling. Thus, the Tribunal decided in favor of the assessee on this issue as well. Visit to Get Source Capital Gain calculation: Amendment to Section 50C applies retrospectively. Stamp duty value on agreement date considered for computation. Case-Laws - AT : The Appellate Tribunal addressed the issue of the retrospective or prospective application of amended provisions of Section 50C regarding Capital Gain computation. Citing a case precedent, it was held that the proviso to Section 50C(1) should be considered retrospective from its inception. Consequently, the amendment to Section 50C applies retrospectively, requiring the recomputation of capital gains based on stamp duty value at the agreement date. The decision favored the taxpayer, rejecting the revenue's stance. Visit to Get Source Appellate Tribunal Upholds Faceless Notice, Clarifies Taxability of Interest Payments and Data Processing Fees. Case-Laws - AT : The Appellate Tribunal upheld the validity of the National Faceless Assessment Centre's notice u/s 143(2) for the assessee. Regarding tax rates for domestic companies and cooperative banks u/s 90, the Tribunal referred to past decisions and dismissed the appeal. Data processing fees paid by the Indian branch to the Singapore branch were deemed non-taxable. Interest payments by Indian branches to the head office were analyzed u/s 12 and 7 of the India-France DTAA, concluding that interest income of the head office is not taxable under the DTAA. An addition under profit and gain from business was remanded for further assessment. The Tribunal's decisions were based on legal interpretations and past precedents, leading to the dismissal or allowance of various grounds of appeal. Visit to Get Source Customs New features launched on Customs Brokers Licensing Management System (CBLMS)! Apply online now! More updates coming soon! Circulars : The Public Notice announces the launch of new functionalities on the Customs Brokers Licensing Management System (CBLMS) portal. These features include applications for continuation of license after the death of a proprietor, an offence module for managing offence cases, and applications for modifying CB profile details. Other enhancements include features like My Profile, NOC mechanism, Issue Document, Search CB, QR code status update, notifications, and account lockout for security. The notice emphasizes the importance of these features for Customs Brokers and stakeholders, providing a comprehensive overview of the updates and improvements on the CBLMS portal. Visit to Get Source Sea Cargo Regulations Updated: PDF Uploads, Optional Bonds, MCIN for Consolidated Bills, and More Flexibility Added. Circulars : The Directorate General of Systems and Data Management issued an advisory regarding recent changes in the Sea Cargo Manifest Transshipment Regulations (SCMTR) module of the ICES application. The changes include allowing stakeholders to upload crew effect and ship stores declarations in pdf format, making the bond requirement for transshipment optional in certain cases, generating MCIN for consolidated bills of lading, allowing the use of passport numbers for foreign nationals and diplomats, making consignee code optional in SDM filings, and making the expected departure date and time field optional in SAM filings. Additionally, adjustments were made to address errors in vessel manifests and update the Message Implementation Guide. Notably, the requirement for a trans-shipment bond in domestic sea cargo movements was eliminated. Stakeholders are advised to refer to specific advisories for detailed instructions and contact provided email addresses for assistance. Visit to Get Source The court ruled that separate FIRs for different years, amounts, and accused are valid. No fresh investigation for same offense. Case-Laws - HC : The High Court considered the legality of clubbing investigations u/s two FIRs involving fraudulent forex remittance using forged documents. Citing T.T. Antoy and Amitbhai Anilchandra Shah cases, it held that no second FIR or fresh investigation is permissible for the same cognizable offence or occurrence. Sections 218, 219, and 202 allow separate charges or clubbing based on transactional link. The distinct nature of defalcation in different treasuries, years, and accused persons warrants separate trials. As the investigations are distinct, the court dismissed the petition to quash or club the FIRs, noting the ongoing progress in the 2022 case and the petitioner's unavailability for the 2017 investigation by CBI. Visit to Get Source Operating a duty-free shop without the right license led to legal issues. The appeal was successful, restoring the original license. Case-Laws - AT : The case involved operating a duty-free shop without the required Special Warehouse Licence, leading to illegal sales of duty-free goods. The appellant was initially allocated a smaller space for the shop, but later shifted to a larger space without amending the Licence. However, goods were stored and removed under Customs supervision. The Tribunal found no evidence of illegal activities and directed the Commissioner to restore the original Licence and consider amending it to include the larger space. The appeal was allowed, setting aside the impugned order and remanding the case for further action. Visit to Get Source FEMA Company Penalized for Unauthorized Foreign Payments, Fails to Rebut Culpable Mental State; Total Penalty Rs. 32 Lakhs. Case-Laws - AT : The Appellate Tribunal found the Appellant Company guilty of contravening u/s 9(1)(a) of FERA 1973 by making payments to a person outside India without RBI permission. The company abetted in contravention of u/s 8(1) of FERA 1973. The Tribunal noted the company's actions facilitated the conversion of rupee accounts, disregarding statutory obligations. The Tribunal applied the presumption of culpable mental state u/s 59 of FERA 1973, shifting the burden to the Appellants, which they failed to rebut. The Tribunal upheld penalties for contraventions u/s 9(1)(a) and u/s 9(1)(c) against the Appellant Company and individual Appellants. Penalties for contraventions u/s 8(1) were set aside. Total penalties imposed were Rs. 32,00,000 on the Company and Rs. 8,00,000 on each individual Appellant, with adjustments for pre-deposits. Visit to Get Source Indian Laws Petitioner paid compensation for bounced cheque. Court allows compounding of offence u/s 147. Judgments quashed, accused acquitted. Case-Laws - HC : The High Court allowed the compounding of the offence u/s 147 of the Act in a case involving the dishonour of a cheque. The petitioner-accused had already paid compensation to the complainant, meeting the requirements set by the court. Following guidelines from a Supreme Court case, the court accepted the application for compounding, quashed the judgments of conviction and sentence, and acquitted the accused of the offence u/s 138 of the Act. Application was allowed. Visit to Get Source Court held that if trial court's view is just & reasonable, High Court cannot interfere with acquittal. Presumption u/s 139 must be rebutted. Case-Laws - HC : The High Court analyzed evidence in a case involving dishonored cheques. The court emphasized the need to rebut the presumption u/s 139 of the Negotiable Instruments Act. The petitioner failed to prove the origin of the loan amount and the purpose of issuing the cheques. The respondent successfully demonstrated that the cheques were not for a legally enforceable debt. As a result, the petitioner's appeal was deemed futile, and the court upheld the lower court's decision, dismissing the petition. The High Court clarified its authority to reevaluate evidence but stressed the need for a justifiable basis for interference with trial court decisions. Visit to Get Source In a cheque dishonour case, accused acquitted u/s 138 NI Act. Accused rebutted statutory presumptions. Appeal dismissed. Case-Laws - HC : The High Court considered a case involving dishonour of cheque due to insufficiency of funds, determining if a legally enforceable debt existed. The accused was acquitted of the offence u/s 138 of the Negotiable Instruments Act. The court assessed evidence to prove cheque execution, rebutting statutory presumptions u/s 139 and 118 of the NI Act. Referring to legal precedents, it highlighted the onus on the accused akin to civil proceedings and the standard of proof required to rebut presumptions. Emphasizing the principle that if two views are possible, an appellate court should not reverse an acquittal. The court upheld the finding that the accused successfully rebutted statutory presumptions, leading to dismissal of the appeal. Visit to Get Source Service Tax CESTAT ruled in favor of no service tax on air and ocean freight charges pre & post 01.07.2012. Appeal allowed! Case-Laws - AT : CESTAT, an Appellate Tribunal, considered the levy of service tax on air and ocean freight charges collected before and after 01.07.2012. The issue was whether these charges constituted Business Support Service. The Tribunal held that the charges were for transportation of goods, not for any other service, and thus not subject to service tax. Referring to a previous case, the Tribunal concluded that the demand for service tax pre and post 01.07.2012 was unsustainable. Therefore, the appeal was allowed, and the demand was set aside. Visit to Get Source Central Excise CESTAT ruled Cheeslings classified under Tariff Item 21069099. Benefit of exemption confirmed. Appeal allowed. Case-Laws - AT : CESTAT, an Appellate Tribunal, ruled on the classification of Cheeslings under Tariff Item 21069099 of the Central Excise Tariff Act, 1985. The issue of availing exemption under Notification No. 3/2006-C.E. was settled in a previous case involving the same appellant. Despite Cheeslings not being fried, their sale as "Namkeen" qualified for the exemption. The Tribunal found no merit in the confirmed demands on the appellant and allowed the appeal in their favor. Visit to Get Source VAT Court Grants Amnesty Scheme Benefits to Settle Tax Arrears from 1998-2005 and 2015-16, Nullifies Previous Judgments. Case-Laws - HC : The High Court held that the appellant is entitled to the benefit of the Amnesty Scheme, 2020 for settlement of tax arrears for the assessment year 2015-16 and for the assessment years 1998-99 to 2004-05. The court emphasized that the appellant should receive the benefit of the method of computation of the Amnesty amount as per the Scheme. The court considered the pendency of a Review Petition and interim orders staying recovery proceedings as relevant factors. The payments made by the appellant during the litigation were deemed provisional and subject to the final outcome. The appeals were disposed of by setting aside previous judgments, quashing orders and demand notices, and declaring the liability of the appellant as settled under the Amnesty Scheme, 2020 through a payment of Rs. 3,19,32,523. The petition was disposed of accordingly. Visit to Get Source Case Laws: GST 2024 (6) TMI 696 Liability of petitioner u/s 73 (9) of the Central Goods and Services Tax / Karnataka Goods and Services Tax Act, 2017 - opportunity of hearing not provided - violation of principles of natural justice - HELD THAT:- While noticing that a common order is passed with respect to the financial years 2017-18 and 2018-19, taking note of the contention that the petitioner was not granted an opportunity as contemplated under Section 75 (4) of the KGST Act when the order passed seems to be adverse to the interest of the petitioner, it would meet the ends of justice by setting aside the order on the ground that the petitioner is afforded an opportunity of hearing and to remit the matter back for fresh consideration before respondent No. 1. The matter is remitted to respondent No. 1 to reconsider the matter afresh, after affording an opportunity as mentioned under Section 75 (4) of the KGST Act and to proceed in accordance with law. Petition allowed by way of remand. Income Tax 2024 (6) TMI 695 Reopening of assessment u/s 147 - Time limit for notice u/s 149 - HELD THAT:- The record would reflect that pursuant to a search and seizure operation conducted in respect of the Alankit Group on 18 October 2019, the petitioner was served a notice u/s 153C on 03 March 2022. On culmination of those proceedings, the respondent proceeded to pass a final order of assessment on 23 March 2023, accepting the income which had been assessed originally u/s 143 (3) - The petitioner discloses that insofar as the original Section 143 (3) assessment was concerned, an appeal was taken to the Income Tax Appellate Tribunal which ultimately accorded relief to the petitioner with respect to disallowances made u/s 40 (a) (ia) of the Act. The subsequent notice u/s 148 was concerned with a search which was conducted in the case of the Proform Group on 09 February 2022. Undisputedly and for the purposes of reopening, bearing in mind the proviso to Section 149(1), action could have been initiated only upto AY 2014-15. We take note of the decision in Filatex India Ltd. [ 2023 (9) TMI 1484 - DELHI HIGH COURT] and where while dealing with an identical question, upon taking note of the manner in which the relevant period under Section 153C is liable to be reckoned, and which we had otherwise dealt with in some detail in our decision rendered in Ojjus Medicare Pvt. Ltd. [ 2024 (4) TMI 268 - DELHI HIGH COURT] It is therefore ex facie evident that AY 2013-14 falls beyond the ten-year block period as set out under Section 153C read with Section 153A of the Act. Consequently, the impugned notice is rendered unsustainable. 2024 (6) TMI 694 Validity of reassessment - second notice issued during pendency of first reassessment proceedings - questioning the jurisdiction and/or authority of the jurisdictional officer to issue the notice dated 26th April, 2023 u/s 148 of the Income Tax Act, 1961 as amended by Finance Act, 2021 - as argued no notice under Section 148 of the said Act can be issued in respect of the assessment year 2016-17, beginning on or before 1st April, 2021 in terms of the amended provisions of Section 149 of the said Act, since notice was issued for the assessment year 2016-17 and should follow the un-amended provisions of Section 149 HELD THAT:- As considering the fact that no second notice under Section 148 of the said Act in respect of the assessment year 2016-17 could have been issued and further taking note of the amended provisions of Section 149 of the said Act, including the jurisdictional issue involved, it is of the view that the writ petition should be heard. Further since, the petitioner has been able to make out a prima facie case, all further proceeding in connection with the notice issued under Section 148 of the said Act, for the assessment year 2016-17 dated 26th April, 2023 shall remain stayed till the end of September, 2024 or until further orders, whichever is earlier. Let affidavit-in-opposition to the present writ petition be filed within a period of three weeks after the summer vacation. Reply thereto, if any, be filed within two weeks thereafter. List this matter in the Combined Monthly List of July, 2024. 2024 (6) TMI 693 Validity of reassessment orders u/s 148A(d) - reasons contained in the order(s) issued under Section 148 A(d) of the Act are different from the reasons which were stated in the notice(s) issued u/s 148 A(b) - taxability of the buyout amount and interest on short-term fixed deposit - Writ Petitions challenging the order(s) u/s 148A(d) of the Act are premature and that the legal issues arising for consideration in the assessment shall be decided by the assessing authority after detailed consideration of the appellants argument - Primary contention of the appellants was that the reasons set out in the order(s) under Section 148 A(d) of the Act that the impugned transactions would attract Section 56 (2)(x)(a) were raised for the first time. The notice(s) issued u/s 148 A(b) of the Act proposed to tax the above receipts on the premise that it would attract capital gains - HELD THAT:- Object behind issuance of notice u/s 148 A(b) of the Act is not an empty formality but is a mandatory requirement intended to put the assessee on notice of the reason on the basis of which the revenue intends to issue a notice u/s 148 of the Act. It is trite law that a notice must contain the reasons to which the noticee is required to respond. It is essential to disclose the reasons to enable the noticee to give a reply/ response, for, it is rudimentary that the noticee should be made aware of all that which influence the decision maker and which he has to meet. If the reasons which are set out in the notice to which the noticee is required to respond and the reasons contained in the order are different, the issuance of the notice would fail to serve its purpose and would be reduced to an empty formality. That means, it would neither qualify as a notice nor serve the object of issuance of notice. We are conscious that the proceedings/ order u/s 148 A(b) of the Act does not conclude the reassessment proceedings and there is still an opportunity for the assessees after issuance of notice under Section 148 to respond. However, we cannot turn a blind eye to the fact that legislature has introduced Section 148A of the Act, which is an enquiry undertaken before issuance of notice u/s 148 of the Act, and one cannot reduce the provisions under Section 148 A of the Act to an empty formality/ dead letter. The impugned orders passed under Section 148A(d) of the Act shall be treated as notice(s) under Section 148A(b) and the appellants are directed to put forth their objections within a period of six (6) weeks from the date of receipt of a copy of this judgment. If any such objections are filed, the same shall be considered and orders shall be passed on merits and in accordance with law, within a period of six weeks, after providing an opportunity of hearing to the appellants. 2024 (6) TMI 692 Validity of assessment order passed without considering reply - Reasons for not incorporating the reply in the Assessment Order - HELD THAT:- Once the petitioner assessee has tendered the reply to the Show Cause Notice on 23.02.2024, it was incumbent upon AO to consider such reply and thereafter to pass the Assessment Order dealing with the objections raised by the assessee with regard to additions proposed in the show cause notice, otherwise issuance of show cause notice prior to framing the assessment along with the draft assessment order would be futile exercise contrary to provisions of Section 144B of the Income Tax Act, 1961. Explanation given by the AO that the draft assessment order was already sent for approval and, therefore, reply dated 23.02.2024 tendered by the assessee was not reflected in the impugned Assessment Order, cannot be accepted. Thus because, while framing the impugned Assessment Order reply is not taken into consideration by the respondent Assessing Officer the same is hereby quashed and set aside and the matter is remanded back to the AO to pass fresh de novo order after considering the contents of reply filed by the petitioner assessee and after providing opportunity of hearing if the petitioner seeks such opportunity. Such exercise shall be completed within 12 weeks from the date of receipt of copy of this order. 2024 (6) TMI 691 Disallowance u/s. 80IA(4) - Whether assessee is a contractor or a developer of infrastructure facilities - HELD THAT:- The issue with regard to considering the respondent as developer of the infrastructure facility so as to become eligible for deduction under Section 80IA(4) is no more res intigra in view of the order passed by this Court in MONTECARLO CONSTRUCTION LTD. [ 2024 (1) TMI 383 - GUJARAT HIGH COURT] whereby the Appeal filed by the revenue is dismissed on the same question of law. It was pointed out that while dismissing the Appeal of the revenue, this Court has taken into consideration the same order passed by the Tribunal which is impugned in this Appeal and on the basis of that, it was observed that nterim payment to the tune of estimated contract value in respect of the development work done for each month after retention and other adjustments were to be made, security deposit was to be paid by the assessee, there was a penalty for delay, procurement of the material was the responsibility of the assessee, procurement of land for camp, for shop, labour camp etc. also the employment of qualified engineers, action and compensation in respect of bad work, defect liability of the accidents to persons in relation to Workman Compensation Act, indemnity insurance of the workmen employed. CIT (Appeal) and the Tribunal considering such aspects of the tendered agreement, concurrently held that the assessee has entered into a development of infrastructure facility agreement and not the works contract. ITAT has not erred in deleting the disallowance made u/s. 80IA(4) by holding that the assessee is not a contractor but a developer of infrastructure facilities and is eligible for deduction u/s. 80IA(4) - Decided in favour of assessee. 2024 (6) TMI 690 Offences punishable u/s 276 C (2) r/w sec 278 B - Criminal Procedure for Economic Offences - petitioners without making any payment of tax, filed returns - Petitioners has submitted that it is the mistake of auditors and they are under the impression that they paid the tax amount, as such, they filed the returns. When it came to the notice of the petitioners, they paid the entire amount as alleged by respondent No. 2. Therefore, there is no intention to evade the tax. HELD THAT:- As per the principle laid down in M/s. Bejan Singh Eye Hospital Pvt. Ltd [ 2020 (11) TMI 316 - MADRAS HIGH COURT] a positive act on the part of the accused is required to be established to bring home the charge against the accused for the offence punishable u/s 276 C (2) of the Act. In the case on hand also the petitioner has already paid returns without paying the tax. When it comes to the notice of the petitioner, he filed tax along with interest. Since the petitioners have cleared the dues along with interest and as there is no intention to evade the tax it cannot be presumed that culpable mental state, as such, the proceedings against the petitioners are liable to be quashed. Criminal Petition is allowed and the proceedings against the petitioners/accused Nos. 1 to 5 on the file of the Special Judge for Economic Offences, Hyderabad are hereby quashed. 2024 (6) TMI 689 Cash deposited and other credits in the saving bank account - difference between the bank credit and the purchase for which the assessee has given no explanation - HELD THAT:- It is seen from the record that the cash were not deposited on a single day, rather it has been deposited on various occasions throughout the year and some of the amount deposited in the saving bank account have been transferred to current account which is evident. It is the case of the Assessee that the cheques have been issued for the purpose of purchasing PVC and iron scrap and such PVC and iron scrap purchased have been sold in the Kabadi Market in cash, thus, the source of balance cash deposit in the bank accounts are the cash sales of PVC and iron scrap purchased out of the funds generated by way of total cash deposit in both the bank accounts. Apart from the same, the entire addition made u/s 68 are the cash deposits made in the bank accounts of the Assessee. There is nothing on record to infer that the cash deposits are not the business income of the Assessee. Assessee has not maintained any books of accounts, since the Assessee filed his return u/s 44AD, the A.O. found that the cash deposited in the Assessee s bank account are liable to be taxed u/s 68 of the Act. As observed above, the Assessee had no source of income other than the business and capital gain, therefore, we can only infer that the cash deposited by the Assessee is out of business receipts. As difficult to estimate the rate of net profit in the business of the Assessee without any data and details. The Assessee should be taxed on the real income earned by him as held in the case of Godhra Electricity Co. Ltd[ 1974 (9) TMI 116 - SUPREME COURT] and CIT Vs. Excel Industries Ltd. [ 2013 (10) TMI 324 - SUPREME COURT] . Even as per the peak theory, instead of taxing the entire tax deposit in the bank account, only peak cash deposit is required to be taxed as held in the case of Purushottam Jhawar [ 2013 (10) TMI 838 - ANDHRA PRADESH HIGH COURT] . In the present case, the peak of cash deposit in the saving bank account and the current account both taken together comes to Rs. 9,70,000/-. The Assessee has provided the working - Thus by applying the peak theory, the addition on the unaccounted money is restricted to Rs. 9,70,000/-. Thus the Grounds No. 3 5 of the Assessee are partly allowed. 2024 (6) TMI 688 Addition u/s 56(2)(x) - property was agricultural land - difference between the consideration paid on acquisition of an immovable property and the stamp duty value of the said property - As submitted assessee has purchased agricultural land which is not capital asset as per section 2(14) and being agricultural land deeming provision of section 56(2)(x) will not apply - HELD THAT:- As per the information available on record, it is clear that assessee has purchased agricultural land of 23 bighas at Village:- Prathvipur, Tehsil:- Jalalabad, Distt:- Shajahnpur. However, the stamp duty value was determined at Rs. 44.54 lacs and further assessee also filed a letter from Tehsildar in the hand written form with Tehsil of Jalalabad, Dist Shajahanpur. Since, Tehsildar had issued the relevant certificate with his signature and stamp, even though, it is in written form, the Ld. CIT(A) should not have rejected the same. In our considered view the assessee has submitted the relevant information which shows that assessee has purchased the agricultural land at Jalalabad. Since, the assessee has purchased agricultural land the same is outside the definition of capital asset, therefore, the deeming provision u/s 56(2)(x) cannot be invoked in this case. Accordingly, the addition made by the Assessing Officer is accordingly deleted. Appeal filed by the assessee is allowed. 2024 (6) TMI 687 Addition for Under-Valuation of Closing Stock stock - reliance on stock statements furnished to banks for credit purposes - CIT(A) deleted the impugned addition, noting that the stock statement supplied to the bank was primarily for securing higher borrowing facilities and did not necessarily reflect the actual stock position - HELD THAT:- Statement furnished to the bank cannot be the sole basis for determining the closing stock value for tax purposes unless supported by any independent verified evidence. CIT(A) has rightly deleted the addition made by the AO, and the same is upheld. Therefore, the Ground No.1 of the Revenue is dismissed. Disallowance u/s 14A towards Investment in Shares - HELD THAT:- Section 14A of the Act is not a provision which empowers the AO to disallow expenditure which has been incurred for earning income chargeable to tax in each and every case where there is an investment which is capable of earning exempted income. Section 14A of the Act will come into play only in such cases where there is a claim by the assessee that particular income is exempt u/s.10 of the Act or is not liable to be included in the total income of the assessee, and the assessee had incurred expenditure in relation to such exempted income. In the present case, it is evident that there is no claim of any exempted income. When there is no claim of exemption in respect of any income during the year, provisions of Section 14A of the Act has no applicability, particularly so when the appellant has not incurred any expenditure whatsoever for making the investments. As decided in the case of CIT vs. Corrtech Energy Limited [ 2014 (3) TMI 856 - GUJARAT HIGH COURT] that in a case where there is no income which is not chargeable to tax, provisions of Section 14A of the I.T. Act is not applicable. It is also a settled law that when assessee has substantial interest free funds disallowance u/s.14A of the Act is unwarranted - See Suzlon Energy Ltd [ 2013 (7) TMI 697 - GUJARAT HIGH COURT] - Decided in favour of assessee. Disallowance towards Interest on Unpaid Purchase Price - CIT(A) has deleted the addition - HELD THAT:- assessee purchased raw-material from POSCO and as none of the vendors of the said raw-material used to give credit for purchase of said material and POSCO allowed the credit facility for purchase of raw material (but charged interest at the rate of 6% per annum), material was purchased from POSCO. Since there was a delay in payment to POSCO, assessee paid interest to POSCO.POSCO is not a related party. Such interest was paid to POSCO in earlier years also. Such interest was paid on account of contractual obligation at 6% per annum when interest paid to bank was at the rate of 15% or more per annum - POSCO is enjoying monopoly among suppliers of electrical steel coils and importantly purchases from POSCO have not been doubted by the AO. CIT(A) has correctly deleted the addition considering these points and relying on the decision of co-ordinate bench in case of assessee itself in AY 2012-13. Decided in favour of assessee. Disallowance towards Insurance Expenses - Keyman Insurance Policy, where the beneficiary of such policies was assessee company and not the individual directors - AO disallowed this expenditure concluding that the same were incurred towards personal expenses - HELD THAT:- Considering the fact that the insurable interest is held in the company in case of Key Insurance Policies and the decision of Co-ordinate Bench, we dismiss the appeal of the Revenue. 2024 (6) TMI 686 Exemption u/s 11 - Excessive payments on account of salary and rent to persons specified u/s 13(3) - CIT(A) deleted addition - Huge Salary Payments to Specified Persons Compared to Others - HELD THAT:- As per the assessee, Mr. Allwyn Gomes is designated as member and is assigned the duty of clerk. The assessee further submitted Mr. Allwyn Gomes is having educational qualification of B.Com and having experience of 17 years in service. Accordingly, he was paid the salary of Rs. 8,93,468/- during the year under consideration. We find that the AO by considering other employees at the position of clerk and having similar educational qualification noted that they are being paid within the range of Rs. 3-5 lakh per year. Accordingly, the AO considered it fair and reasonable to allow monthly salary of Rs. 40,000/- which comes to Rs. 4,80,000/- for the year under consideration and disallowed the remaining amount of Rs. 4,13,468/- paid to Mr. Allwyn Gomes. We find that Mr Allwyn Gomes is having the experience of 17 years in service, as compared to the other staff member at the position of clerk and having similar educational qualification. Accordingly, we find no infirmity in the findings of the learned CIT(A) in deleting the addition made by the AO in respect of salary paid to the aforesaid member. Payment of rent to persons specified u/s 13(3) - It is evident from the record, in order to justify that the payment of rent paid, the assessee furnished Market Rental Report prepared by Government Approved Registered Valuer, who computed the market rent of Rs. 14,80,024/-. However, the AO merely on ad hoc basis considered Rs. 60,000/- as the monthly rent and disallowed the balance rental payments of Rs. 9,12,000/- paid by the assessee. Therefore, we agree with the finding of the learned CIT(A) that the AO made the impugned addition on account of rental payment to specified persons u/s 13(3) of the Act without any basis. Accordingly, we find no infirmity in the findings of the learned CIT(A) on this issue and therefore, the same are upheld. Since the payment made by the assessee on account of salary and rent is not found to be excessive of what may be reasonably paid to specified persons u/s 13(3) of the Act, we are of the considered view that the provisions u/s 13(3)(c), 13(2)(c) r.w.s. 13(2)(g) of the Act are not attracted in the present case, and the assessee has rightly claimed the exemption u/s 11 of the Act. Appeal of assessee allowed. 2024 (6) TMI 685 Validity of physical/manual filing of appeal - submission made by assessee that assessee was not in a position to take assistance regarding e-filing of appeal and he had not completed the requirements of E-filing of appeal i.e. PAN and Aadhar link as well as update of e-mail address - HELD THAT:- Undisputed fact that assessee has filed the appeal physically on 24.01.19, which was before the due date of filing the appeal . Further we note admittedly, the scheme of physical filing of appeal was replaced by electronic /online w.e.f. 01.03.2016 vide rule 45 of the Income Tax Rules. Since there was some difficulty in e-filing, CBDT has taken due cognizance of such difficulty and extended the time limit vide its circular No 20/2016 dated 26.05.2016. Thus, Ld. CIT(A) should have accepted the appeal and decided the appeal on merits. Based on these set of facts the appeal of the assessee was filed in time in physical mode and merely same was not filed online, the same cannot held invalid. Thus, we are of the considered view that the appeal of the assessee is required to be admitted and decided on merits, therefore, we remanded back the matter to the file of CIT(A) to decide the issue afresh after giving sufficient opportunity of hearing to the assessee. 2024 (6) TMI 684 Disallowance of unpaid interest u/s 43B on loan taken from World Bank - loan was advanced by State Government and interest was paid to State Government - as per DR ultimate source of money received was from the World Bank and thus the payment of interest to World Bank covers the provision of section 43B - HELD THAT:- Clause (d), (da) or (e) of Section 43B do not cover interest payable on any loan or borrowing taken from World Bank /Government. It is noted that in these clauses interest payable to specific financial institutions / NBFC / Schedule Banks / Co-operative Banks are only covered. The interest payable to State Government/ World Bank is not covered under any of these clauses. Explanation no. 4 to section 43B of the Act specifies the institutions which are covered under this section as has been elaborately discussed in the written submission filed by the ld. AR of the assessee. Therefore, from the plain reading of the definitions, it is clear that neither the State Government nor the World Bank falls under the definition of Public Financial Institution, State Financial Corporation, State Industrial Investment Corporation, Deposit taking NBFC, Scheduled Bank and Cooperative Bank. Interest payable on loan taken from State Government / World Bank is not covered with in the provision of section 43B of the Act. Hence disallowance confirmed by ld. CIT(A) u/s 43B is not as per the provision of law and therefore the same is directed to be deleted. Based on these observations grounds of appeal no. 2 and 2.1 raised by the assessee stand allowed. Addition on account of electricity duty u/s 43B - whether electricity duty collected by the assessee from consumers constitutes trading receipts? - DR supporting the finding recorded in the order of the assessment argued that electricity duty is a tax and is a forming part of trading receipt and forms an integral part of a commercial transaction of supplying and distributing the electricity, therefore, if such tax is not paid on or before the due date of filing of return, the same is to be added to the income of the assessee u/s 43B - HELD THAT:- Assessee collects the electricity duty from the consumers on behalf of the Government of Rajasthan. This is not a tax or duty or cess levied on the assessee. Hence, provision of section 43B is not applicable in the case of the assessee. Assessee simply remits the electricity duty only to the extent it is collected. The uncollected electricity duty is not payable / recoverable from the assessee. Further the State Govt. grants subsidy to the assessee which it allows to adjust against the electricity duty payable by the assessee. Thus section 43B is not applicable as the State Government do not impose electricity duty on the assessee and therefore it is not a deduction which is otherwise allowable to the assessee. See Kerala State Electricity Board [ 2010 (11) TMI 127 - KERALA HIGH COURT] as approved by SC [ 2022 (10) TMI 363 - SC ORDER] held when s. 43B(a) speaks of the sum payable by way of tax etc., the said provision is dealing with the amounts payable to the sovereign qua sovereign, but not the amounts payable to the sovereign qua principal. We are therefore of the opinion that sec 43B cannot be invoked in making the assessment of the liability of the appellant under the IT Act with regard to the amounts collected by the appellant pursuant to the obligation cast on the appellant u/s 5 of the Electricity Duty Act, 1963 - Decided in favour of assessee. 2024 (6) TMI 674 Capital Gain computation - Applicability of amended provisions of Section 50C - Retrospective or prospective application - whether the amendment made to the provisions of Section 50C of the Act with effect from A.Y. 2017-18 would apply retrospectively for the A.Y. 2010-11 or not? - HELD THAT:- As decided in SHRI VUMMUDI AMARENDRAN [ 2020 (10) TMI 517 - MADRAS HIGH COURT] wherein held proviso to Section 50C(1) deals with cases where the date of the agreement, fixing the amount of consideration and the date of registration for the transfer of the capital assets are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer. Thus an amendment by insertion of proviso seeks to relieve the assessee from undue hardship. No hesitation to hold that the proviso to Section 50C(1) of the Act should be taken to be retrospective from the date when the proviso exists. As amendment to Section 50C should be applied retrospectively, and the capital gain should be recomputed considering the stamp duty value as on the date of the agreement. Decided against revenue. 2024 (6) TMI 673 Validity of National Faceless Assessment Centre using a notice u/s 143(2) - HELD THAT:- Notice issued u/s 143(2) in the case of the assessee by the prescribed authority i.e NaFAC is in accordance with the provision of the Act , therefore, we don t find any merit in this ground of appeal of the assessee and the same stand dismissed Rate of tax applicable to domestic company and/or cooperative bank in accordance with Article 26 of the India-France Tax Treaty - HELD THAT:- As decided in [ 2023 (3) TMI 193 - ITAT MUMBAI] for A.Y.2017-2018 Tribunal referred to the Explanation in the Section 90, inserted in the IT Act with retrospective effect from 01-04-1962 as per which the higher tax rate in case of foreign company, should not be regarded as violation of non- discrimination clause. The Tribunal also referred to the judgment of the Hon ble Supreme Court in the case of ACIT Vs. J.K. Synthetics [ 2001 (2) TMI 17 - SUPREME COURT] , accordingly, rejected the ground raised by the assessee. It is evident that the issue is recurring in nature and it is squarely covered by the decision of the ITAT in the proceeding assessment year as discussed supra in this order, therefore, following the decision of the coordinate bench of the Tribunal as referred above this ground of appeal no. 2 of the assessee is dismissed. Taxability of data processing fees paid by the Indian branch of the assessee to its Singapore branch - Tribunal in assessee s own case [ 2023 (3) TMI 193 - ITAT MUMBAI] for A.Y.2017-2018 as well as the order of the Special Bench of the Tribunal in the case of Sumitomo Mitsu Banking Corporation [ 2012 (4) TMI 80 - ITAT MUMBAI] we hold that the department was not justified in taxing the data processing charges to the Singapore Branch of the assessee by applying the provisions of Article 13 of the India-France Tax Treaty. Interest payable/paid by the Indian branch offices of the assessee to the head office and its other overseas branches as chargeable to tax - We consider that the similar issue on identical fact has been adjudicated in favour of the assessee [ 2023 (3) TMI 193 - ITAT MUMBAI] decided that as per Article 12(1) of the DTAA interest arising in a contracting state and paid to a resident of the other contracting state may be taxed in the contracting states in which it arises and the tax so charged shall not exceed 10% of the gross amount of the interest. However, the provision of Article 12(5) provides that provision of Article 12(1) and Article 12(2) shall not apply if the beneficial owner of the interest carrying on business in the other contracting state through a permanent establishment and the debt claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such cases, provision of Article 7 or Article 15 as the case may be shall apply. Since, the assessee being a head office of the banking company and having branches in the form of permanent establishment in India, in such cases the provision of Article 7 is to be applied. The provision of Article 12 and 7 of the India-France DTAA demonstrate that interest payment made by the permanent establishment to the head office are not taxable in the hands of the head office as provided in Article 12(5) of the treaty and it also provide that in such cases income of the permanent establishment only to be taxed as per provision of Article 7 of DTAA. As per the provision of Sec.90(2) of the Act the assessee can opt for the taxability of its income as per the Double Taxation Avoidance Agreement between India and France (DTAA) or the Act which is more beneficial, accordingly even though the interest paid by the branches (PE) to the head office are taxable as per the provision of Sec. 9(1)(5)(c) of the Act, however, because of beneficial provision of DTAA i.e Article 12(5) as discussed supra will lead to the conclusion that such interest received by the overseas head office is not taxable under the provision of DTAA. As clear from the provision of DTAA that interest income of the non-resident (head office) shall be taxable under Article 12 of the DTAA only when such head office shall not having any PE in India wherein branch (PE) is established in India then the provision of Article 7 only shall apply and Article 7 deal with taxability of only profit attributable to the PE branches of such overseas head office. Further, the debt regarding claim mean the some money due from one person to another. Since, in the case of the assessee branch has borrowed from the overseas head office, therefore, debt claim of the head office is connected to the PE branch in India, therefore, in the present case interest received by head office from its branches in India is not taxable in the hands of the head office in view of the provision of DTAA. Addition under the head profit and gain from business and provision - assessee recorded an amount in its books of account as rental income - HELD THAT:- We find that the submission of the assessee has not been considered by the assessing officer, therefore, we restore this issue to the file of the assessing officer for deciding afresh after verification of the submission and detail filed by the assessee. Accordingly, this ground of appeal is allowed for statistical purpose. Customs 2024 (6) TMI 672 Legality of the second FIR - clubbing of investigations under two FIR - forex remittance has been fraudulently send abroad by submission of forged documents - HELD THAT:- The forged Bill of Entries utilized by the accused in RC 11(E)/2022 are distinct and separate from those used in RC 04(E)/ 2017. The accused had forged different sets of Bills of Entry and submitted them to the banks in RC 04(E)/2017 and separate set of Bills of Entries in RC 11(E)/2022. Thus, the forged Bill of Entry in both the FIRs are not the same. In the case of T.T. Antoy Vs. State of Kerala and Ors. [ 2001 (7) TMI 1322 - SUPREME COURT] , it was held that there can be no second FIR and no fresh investigation on receipt of every subsequent information in respect of same cognizable offence or same occurrence giving rise to one or more cognizable offences. In the case of Amitbhai Anilchandra Shah Vs. Central Bureau of Investigation and Anr. [ 2013 (4) TMI 903 - SUPREME COURT] , it was held that there can be no second FIR and consequently no fresh investigation on receipt of every subsequent information in respect of the same cognizable offence or the same occurrence of the instance giving rise to one or more cognizable offences. The second FIR in respect of an offence or different offences committed in the course of same transaction is impermissible and it violates Article 21 of the Constitution. Section 218 deals with separate charges for distinct offences. Section 219 provides that three offences of the same kind can be clubbed in one trial committed within one year. Section 202 speaks of trial for more than one offence if it is the same transaction. In the said case it cannot be said that the defalcation is same transaction as the transaction are in different treasuries for different years, different amounts, different allotment letters, supply orders and suppliers. There are different sets of accused in different cases with respect to defalcation. There may be a conspiracy in general one and a separate one. There may be larger conspiracy and smaller conspiracy which may develop in successive stages involving different accused persons. It was held that the defalcation were made in various years by combination of different accused persons. Thus, there can be different trials. The offences are not the same offence. The investigation of the FIR of 2022 is in progress. It cannot be said that the FIR pertains to the same transaction or same cause of action which is investigated under the FIR of 2017. Both are distinct in nature. It is not required to quash the FIR and/or club them together. The Petitioner was not available for investigation in the FIR investigated by CBI - petition dismissed. 2024 (6) TMI 671 Operating duty-free shop without possessing a Special Warehouse licenced premises - illegal sales of foreign made liquor imported duty-free - Sale of duty-free goods directly from the duty-free shop without warehousing the same in the Special Warehouse - Transferring a special warehouse licenced premises without the knowledge of the Department. HELD THAT:- The admitted facts are that the Airport Authority of India had awarded a contract to the appellant for running the Duty-Free Shop at the International Airport Trivandrum and to run the Duty-Free Shop at an International Airport, a Special Warehouse Licence is necessary to store the goods and accordingly, the appellant was issued with a Special Warehouse Licence under Section 58A of the Customs Act 1952 which provides a Licence along with a place (warehouse) where dutiable goods are to be deposited and all the goods in the warehouse are to be brought into and removed only with the permission of the Customs officers. As observed by the Commissioner in the impugned order since the new premises was allotted within 15 days of the original allocation the appellant started operating only from the new premises but without getting the Licence amended. But the fact remains that the goods were stored and removed from the new premises under the Customs supervision. Therefore, the appellant cannot be alleged with any illegality in as much as there is no evidence to prove that goods were not stored or removed without the customs supervision. The re-warehousing certificate before us clearly shows that the entry of goods into the Special Warehouse and exit were all done with the knowledge of the Customs Officers and therefore, there is no irregularity in storing of the goods at the special warehouse at the new premises. From the facts of the case, the alleged irregularities were actually noticed at the Duty-Free Shop at the Trivandrum Airport which resulted in cancellation of the Special Warehouse Licence. It is a fact that the Duty-Free Shop cannot function without the goods being stored at the special warehouse allotted to the appellant and it is essential to operate the special warehouse to run the Duty-Free Shop. The original smaller space was provisionally allotted and within 15 days the larger space of 154 sq. mtr. which was allotted and in use under the supervision of the Customs Officers need to be included in the licence - the Commissioner are directed to restore the original Licence and to consider amending the licence to incorporate the space of 154 sq. mtr., if otherwise, in accordance with the provisions of law. The impugned order is set aside - the appeal is allowed by way of remand to Commissioner with a direction to restore the original Special Warehousing Licence. Corporate Laws 2024 (6) TMI 670 Declaring the petitioners as Willful Defaulters , in respect of the loan account - diversion of funds - Principles of Natural Justice - HELD THAT:- It is no longer res integra that fair procedure and Principles of Natural Justice, demand that all the underlying documents, which form the basis of the SCN, ought to be provided to the concerned party, so that an effective reply can be filed. If the requisite documents are not provided, then, it cannot be said that an effective opportunity has been provided to the noticee. This would be in direct contravention to the Principles of Natural Justice. Therefore, it is imperative that all the underlying documents, which form the basis of a SCN, are supplied to the noticee. Since the present case is still at the stage of a SCN, it is directed that the respondent-bank shall provide all the underlying documents, which form the basis of the SCN dated 18th May, 2024, to the petitioners, within a period of two weeks from today - Upon receipt of the documents, the petitioners shall file reply to the SCN, within a period of four weeks, thereafter. The present petition is disposed off. FEMA 2024 (6) TMI 669 Contravention of Section 9 (1) (a) of FERA 1973 - Appellant Company was charged for making payments to a person resident outside India without general or special permission from RBI - payments were made through bank drafts purchased from Punjab Sindh Bank and State Bank of India - Contravention of Section 64(2) of FERA 1973 for abetment in contravention of Section 8(1) of FERA 1973 - HELD THAT:- It is not disputed that payment in contravention of the provisions of FERA 1973 and without the permission of the RBI was effected by the Appellants to ESL which was a company located in United Kingdom. The officials of the Appellant Company had met the Managing Director of ESL who was a foreign national. They complied with the instructions of his while choosing the mode of payment with resulted in conversion of non-convertible resident rupee account to convertible non-resident rupee account. To take the defense that they were not responsible for such conversion which was done by SCB Bombay, is not convincing, particularly as there is evidence on record that how they purchased bank drafts in New Delhi, making them payable in Madras and for the purpose used the services of Shri Ravi Singhal to carry such drafts. Their conduct thus left scope for the drafts to be paid on collection from the SCB Manchester. In fact, the Judgment cited by Appellants viz., Union of India Another Vs. Shri Kanti Oil Mills [ 1979 (10) TMI 236 - BOMBAY HIGH COURT] brings out their contumacious conduct in contrast to the steps taken by the Mills in the facts of the cited Judgment so as not to contravene the provisions of FERA 1973. In the facts and circumstances of a case, the intention is to be ascertained. The facts of the present case speak for themselves whereby the obligations arising from the extant statutory framework were completely ignored by the Appellants. FERA 1973 provided for a regulatory mechanism for certain payments, dealings in foreign exchange and security, transactions indirectly affecting foreign exchange and the import and export of currency for the conservation of the foreign exchange resources of the country and the proper utilization thereof in the interest of the economic development of the country. Section 59 of FERA 1973 provided for presumption of culpable mental state in any prosecution for any offence under the Act which requires a culpable mental state on the part of the accused, unless the accused proved the fact that he had no such mental state with respect to the charge against a particular offence. Sub-Section 3 of that Section makes such presumption applicable to proceeding before an Adjudicating Officer. The circumstances and the evidence in the present case reverse the burden on to the Appellants which they have failed to discharge. Thus we hold that the contravention of Section 9 (1) (a) of FERA 1973 for an amount charged under SCN I and SCN II respectively stands established against the Appellant Company and the contravention of Section 9 (1) (a) of FERA 1973 r/w Section 68 (1) ibid stands established against the three individual Appellants. Contravention of Section 9 (1) (c) of FERA 1973 for an amount charged under SCN XII stands established against the Appellant Company and the contravention of Section 9 (1) (c) of FERA 1973 r/w Section 68 (1) ibid stands established against the three individual Appellants. We uphold the impugned order in so far as the penalties which have been imposed therein on the four Appellants with respect to SCN I, SCN II SCN XII. Imposition of Penalty - We intervene with the impugned order to the extent of the penalties imposed on the four Appellants for contravention of Section 8(1) charged under SCN III and SCN IV and are set aside. Therefore, the total penalty on the Appellant Company would be of Rs. 32,00,000/- and on each of the three individual Appellants would be of Rs. 8,00,000/-. The pre-deposit made by each of the four Appellants in compliance to the order [. 2014 (3) TMI 1225 - DELHI HIGH COURT] shall be adjusted towards the penalty imposed under this order. Service Tax 2024 (6) TMI 683 Levy of service tax - Business Support Service - air freight and ocean freight charges collected for the period prior to 01.07.2012 and for the period after 01.07.2012 - extended period of limitation - penalty u/s 78 - HELD THAT:- The freight charges are collected for transportation of goods and not for providing any other service. In fact, from the activity that has taken place, it is nothing but payment of freight for transportation of cargo in airlines as well as shipping lines. The issue as to whether the air freight charges / ocean freight charges as well as mark up is subject to levy of service tax for the period prior to 1.7.2012 has been decided by the Tribunal in various cases. The Tribunal in the case of Geodis Overseas Private Ltd. Vs CST Chennai [ 2022 (6) TMI 1085 - CESTAT CHENNAI ] has considered the issue and held that the demand cannot sustain. The demand of service tax for the period prior to 1.7.2012 as well as for the period post-1.7.2012 cannot sustain and requires to be set aside - Appeal allowed. 2024 (6) TMI 668 Refund of Service Tax paid erroneously for GTA under Reverse Charge Mechanism - rejection on the ground of time limitation - HELD THAT:- Appellant is not entitled to get the refund as claimed by it for the reason that such claim was made after the period of limitation was over and the judgment of the Hon ble Bombay High Court in the case of CCE Nagpur Vs. SGR Infratech Ltd. in which Mafatlal Industries Ltd. [ 1996 (12) TMI 50 - SUPREME COURT ] judgment dealing with correctness of proposition of Kanhaiyalal [ 1958 (9) TMI 57 - SUPREME COURT ] decision was dealt with, would have no bearing on the findings of Hon ble Supreme Court judgment is followed with consistent decisions in such a scenario, including the one cited by learned AR in the case of Sarita Handa Exports (P) Ltd. [ 2010 (9) TMI 254 - PUNJAB AND HARYANA HIGH COURT ] of the Hon ble Punjab Haryana High Court following Mafatlal Industries Ltd. is available to the effect that refund application beyond the period specified under Section 11B of the Central Excise Act, 1944 could not be entertained unless refund arose in consequence of a declaration of a provision/statute as unconstitutional, which is admittedly not the fact in the present case. The order passed by the Commissioner of Central Tax (Appeals-I), Pune is hereby confirmed - Appeal dismissed. Central Excise 2024 (6) TMI 682 Delay in adjudicating show cause notices (SCNs) - whether non-communication of transfer of the show cause notices to call book is fatal to the case of respondents? - HELD THAT:- Admittedly petitioner s case was kept in abeyance in view of pending SLP in the Apex Court and it is accepted that the issue therein covered the issue in petitioner s case as well. It would therefore serve no purpose in adjudicating the show cause notice. Hence other suggestion not accepted that respondents should be permitted to proceed with the adjudication of show cause notices. It could be nothing but an exercise in futility. The two show cause notices dated 22nd October 2010 and 21st October 2011 are hereby quashed and set aside. Petition disposed off. 2024 (6) TMI 681 CENVAT Credit of service tax paid - Input service - exclusion of phrase setting up of the factory from amended definition - Consulting Engineer Service - Plant Fabrication Erection Commissioning service - Supply of Tangible Goods service - HELD THAT:- The definition of input service, prior to its amendment w.e.f. 01.04.2011 provided the phrase used in relation to setting up, modernization, renovation or repairs of a factory in the inclusive part contained therein. The said definition was amended vide Notification No.3/2011 dated 01.03.2011 (w.e.f. 01.04.2011). The effect of such amendment was that the phrase setting up of the factory was replaced with the phrase used in relation to modernization, renovation or repairs of a factory - The excluded category of services provided under Rule 2(l) ibid interalia, includes service portion in the execution of the works contract and construction services insofar as they are used for (a) construction or execution of works contract of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods . On consideration of the disputed services used/utilised by the appellants, it is found that such services were not falling under the exclusion clause provided under Rule 2(l)(A) ibid. Since, the disputed services were not specifically falling under the excluded category and were used in relation to manufacture of the final products, denial of Cenvat Credit of service tax paid on those services cannot be sustained - the issue arising out of the present dispute has been adequately dealt with by the Co-ordinate Bench of This Tribunal in the case of PEPSICO INDIA HOLDINGS (PVT.) LTD. VERSUS COMMISSIONER OF CENTRAL TAX, TIRUPATI [ 2021 (7) TMI 1094 - CESTAT HYDERABAD] . There are no merits in the impugned order, insofar as it has denied the Cenvat Credit and confirmed the adjudged demands on the appellants - the impugned order is et aside - appeal allowed. 2024 (6) TMI 680 Classification of goods - Cheeslings - to be classified under Tariff Item 21069099 of the first schedule to the Central Excise Tariff Act, 1985 or not - benefit of Sr No.10 of N/N. 2/2011-C.E. dated 01.03.2011 as amended - HELD THAT:- The issue with regard to availment of the benefit of exemption Notification No. 3/2006-C.E. dated 01.03.2006 is no more open for any debate, in view of the final Order passed by this Tribunal in the case of the appellants themselves, PARLE PRODUCTS PVT. LTD. VERSUS CCE, MUMBAI-IV [ 2017 (10) TMI 1182 - CESTAT MUMBAI] . In the said order, the Tribunal has held that Cheeslings though are not fried items, but since those were sold as Namkeen , the benefit of Sl. No. 29 in the Notification No.3/2006-C.E. dated 01.03.2006 should be available to the appellant. There are no merits in the impugned order, insofar as it has confirmed the adjudged demands on the appellant - appeal allowed in favor of appellant. 2024 (6) TMI 679 CENVAT Credit - input services or not - phrase setting up of the factory was specifically excluded in amended definition of input services or not - HELD THAT:- Since, the disputed services were not specifically falling under the excluded category and were used in relation to manufacture of the final products, in our considered view, denial of Cenvat Credit of service tax paid on those services cannot be sustained. We find that the issue arising out of the present dispute has been adequately dealt with by the Co-ordinate Bench of This Tribunal in the case of PEPSICO INDIA HOLDINGS (PVT.) LTD. VERSUS COMMISSIONER OF CENTRAL TAX, TIRUPATI [ 2021 (7) TMI 1094 - CESTAT HYDERABAD] where it was held that Without setting up the factory, there cannot be any manufacture. Services used in setting up the factory are, therefore, unambiguously covered as input services under Rule 2 (l) (ii) of the CENVAT Credit Rules, 2004 as they stood during the relevant period (post 1.4.2011). The mere fact that it is again not mentioned in the inclusive part of the definition makes no difference. Once it is covered in the main part of the definition of input service, unless it is specifically excluded under the exclusion part of the definition, the appellant is entitled to CENVAT credit on the input services used. . There are no merits in the impugned order, insofar as it has denied the Cenvat Credit and confirmed the adjudged demands on the appellants - the impugned order is set aside - appeal allowed in favor of appellant. CST, VAT & Sales Tax 2024 (6) TMI 678 Benefit of the Amnesty Scheme, 2020, for settlement of tax arrears for the assessment year 2015-16, as also for the assessment years 1998-99 to 2004-05 - HELD THAT:- Inasmuch as the Amnesty Scheme, 2020 envisages a settlement of even those dues that are pending for the assessment years 1998-99 to 2004-05, the appellant must get the benefit of the method of computation of Amnesty amount for the purposes of settlement as envisaged under the Amnesty Scheme, 2020. As the Scheme contains provisions which are beneficial to an assessee, the pendency of the Review Petition, together with the fact that interim orders were passed by this Court and the Supreme Court staying recovery proceedings against the appellant, should be seen as the backdrop against which the payments of various amounts were effected by the appellant during the pendency of the litigation referred. Thus, the said payments have necessarily to be seen as provisional and subject to the final outcome of the litigation. These appeals are disposed off by setting aside the impugned judgments of the learned Single Judges, quashing the impugned orders and demand notices in the Writ Petitions and declaring that the liability of the appellant towards turnover tax interest and penalty for the assessment years 1998-99 to 2004-05 and 2015-16 shall be seen as finally settled in terms of the Amnesty Scheme, 2020 through the payment of Rs. 3,19,32,523/-. Petition disposed off. Indian Laws 2024 (6) TMI 677 Dishonour of Cheque - compounding of the offence - HELD THAT:- In the case at hand, petitioner-accused has already paid the compensation amount to the respondent-complainant, as has been stated by him in his statement taken on record and as such, this court, in terms of S.147 of the Act and guidelines framed by Hon ble Apex Court in Damodar S. Prabhu v. Sayed Babalal H. [ 2010 (5) TMI 380 - SUPREME COURT ], can proceed to compound the offence. This court finds no impediment in accepting the prayer made on behalf of the applicant/accused through instant application for compounding of the offence and same is allowed - Impugned judgments of conviction and order of sentence passed by both the learned Courts below are quashed and set aside and the petitioner-accused is acquitted of the offence punishable under Section 138 of the Act. Application allowed. 2024 (6) TMI 676 Dishonour of Cheque - discharge of a legally enforceable debt or not - rebuttal of statutory presumption u/s 139 of the Negotiable Instruments Act - HELD THAT:- It is beyond a cavil of doubt that the power of this Court is not curtailed or limited, as it is within its realm to reappreciate the evidence available on record to render a finding. However, in reappreciating the evidence, this Court has to see whether the view taken by the trial court could not be taken by any prudent man on appreciating the materials available before it. If the view taken by the trial court, considered overall on the materials placed, is just and reasonable that the view taken by the trial court is on proper appreciation of the materials, the High Court cannot interfere with the acquittal on the ground that another view is possible. This Court will now proceed to analyse the evidence on record to find out whether the view arrived at by the trial court is based on the materials available on record or whether there are materials, which warrants grant of leave by this Court. In the absence of any witness to the passing of the amount from the petitioner to the respondent, even to aver that such a transaction could have taken place, it is incumbent on the petitioner to prove that he had the wherewithal to lend the said amount as loan to the respondent. In this regard, a perusal of the order of the court below reveals that the petitioner has not established as to where from he had the amount to be given as loan to the respondent. The petitioner merely claims that it came from his wife s side towards sale of some properties. However, there are no materials to establish the same. The presumption available u/s 139 has to be rebutted by the accused, whereinafter, a duty is cast on the complainant to establish that the cheque, which stood dishonoured, was issued for the purpose of discharging a legally enforceable debt. In the case on hand, the respondent, through the evidence of D.W.1 and other documentary evidence has established that the cheques had not been issued to the petitioner by the respondent and such being the case, the petitioner having failed to establish that there is a legally enforceable debt, towards which the cheques were issued, the leave sought for by the petitioner to file the appeal could only be termed to be an exercise in futility as nothing could be established in the appeal and the petitioner having miserably failed to establish that he had advanced loan to the respondent, cannot seek to file the appeal praying the leave of this Court. The impugned orders passed by the court below do not deserve any interference and the same stands affirmed - Petition dismissed. 2024 (6) TMI 675 Dishonour of Cheque - insufficiency of funds - legally enforceable debt or not - acquittal of the accused of the offence punishable u/s 138 of the Negotiable Instruments Act, 1881 - adduced satisfactory evidence to prove the execution and issuance of cheque or not - rebuttal of statutory presumptions under Sections 139 and 118 of the NI Act - HELD THAT:- In HARBHAJAN SINGH HARBHAJAN SINGH VERSUS STATE OF PUNJAB [ 1965 (3) TMI 101 - SUPREME COURT] , the Honourable Supreme Court held that the onus on an accused person might well be compared to the onus on a party in civil proceedings, and just as in civil proceedings the court trying an issue makes its decision by adopting the test of probabilities. The Honourable Supreme Court considered the nature of the standard of proof required for rebutting the presumption under Section 139 of the Negotiable Instruments Act in MS NARAYANA MENON @ MANI VERSUS STATE OF KERALA ANR. [ 2006 (7) TMI 576 - SUPREME COURT] , and it was held that if some material is brought on record consistent with the innocence of the accused, which may reasonably be true, even though it is not positively proved to be true, the accused would be entitled to acquittal. It is well settled that if two views are possible, the appellate court shall not reverse a judgment of acquittal only because another view is possible, as held by the Honourable Supreme Court in K PRAKASHAN VERSUS PK SURENDERAN [ 2007 (10) TMI 551 - SUPREME COURT] . When the Court before whom the witness gives evidence had the opportunity to form the opinion about the general tenor of evidence given by the witness, the appellate court which had not this benefit will have to attach due weight to the appreciation of evidence by the trial court and unless there are reasons weighty and formidable, it would not be proper to reject the evidence on the ground of minor variations or infirmities in the matter of trivial details. There are no reason to interfere with the finding in the impugned judgment that the accused has succeeded in rebutting the statutory presumptions in favour of the complainant and in that circumstance, the appeal is liable to be dismissed.
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TMI Tax Updates - e-Newsletter June 18, 2024

TMI Short Notes

1. Court Upholds Deduction for Operational Hotel under Section 35AD Despite Administrative Delays

2. Landmark Ruling: Leasing Businesses Entitled to Depreciation Benefits

3. Court Decision on Convertible Debentures Expenses : Revenue or Capital Expenditure?

4. Judgement on Feasibility Study Costs on Project Development: Revenue or Capital Expenditure?

Articles

1. The amount in the CENVAT credit account should be refunded in cash

2. Income Tax Notice-Online Verification and Authentication

News

1. CBIC mounts campaign against frauds committed in the name of Indian Customs

Circulars / Instructions / Orders

1. PUBLIC NOTICE NO. 02 / 2024 - dated 9-5-2024

2. Advisory No. 09 / 2024 - dated 2-5-2024

Highlights / Catch Notes

GST

Principles of natural justice: Court says assessee deserve a fair hearing. Order set aside for fresh consideration.

Income Tax

High Court ruled notice u/s 148 invalid due to time limit of 10 years. Previous assessment upheld.

High Court ruled that reasons for reassessment orders must match notice reasons. Appellants must raise objections within 6 weeks.

Assessment Order Invalidated for Ignoring Assessee's Reply; Court Mandates New Order Under IT Act Section 144B.

Assessee entitled to deduction u/s. 80IA(4) as developer, not contractor. ITAT decision upheld.

Petitioners filed tax returns without paying tax, but paid in full when notified. No intent to evade tax found. Offence Proceedings quashed.

Cash deposits in bank accounts considered business income. Peak cash deposit amount only taxed.

Assessee bought agricultural land, not subject to capital gains tax. Addition u/s 56(2)(x) deleted. Appeal allowed.

Tax Tribunal Affirms Stock Valuation Rule; Section 14A Inapplicable Without Exempt Income Claim; Keyman Insurance Expenses Allowed.

Exemption u/s 11: ITAT ruled in favor of assessee on salary & rent payments. Excessive payments not found.

Assessee filed appeal physically before due date. Difficulty in e-filing acknowledged by CBDT. Appeal should be admitted and decided on merits.

Tribunal Rules Unpaid World Bank Loan Interest Not Disallowed; Electricity Duty Exempt from Section 43B Tax Rules.

Capital Gain calculation: Amendment to Section 50C applies retrospectively. Stamp duty value on agreement date considered for computation.

Appellate Tribunal Upholds Faceless Notice, Clarifies Taxability of Interest Payments and Data Processing Fees.

Customs

New features launched on Customs Brokers Licensing Management System (CBLMS)! Apply online now! More updates coming soon!

Sea Cargo Regulations Updated: PDF Uploads, Optional Bonds, MCIN for Consolidated Bills, and More Flexibility Added.

The court ruled that separate FIRs for different years, amounts, and accused are valid. No fresh investigation for same offense.

Operating a duty-free shop without the right license led to legal issues. The appeal was successful, restoring the original license.

FEMA

Company Penalized for Unauthorized Foreign Payments, Fails to Rebut Culpable Mental State; Total Penalty Rs. 32 Lakhs.

Indian Laws

Petitioner paid compensation for bounced cheque. Court allows compounding of offence u/s 147. Judgments quashed, accused acquitted.

Court held that if trial court's view is just & reasonable, High Court cannot interfere with acquittal. Presumption u/s 139 must be rebutted.

In a cheque dishonour case, accused acquitted u/s 138 NI Act. Accused rebutted statutory presumptions. Appeal dismissed.

Service Tax

CESTAT ruled in favor of no service tax on air and ocean freight charges pre & post 01.07.2012. Appeal allowed!

Central Excise

CESTAT ruled Cheeslings classified under Tariff Item 21069099. Benefit of exemption confirmed. Appeal allowed.

VAT

Court Grants Amnesty Scheme Benefits to Settle Tax Arrears from 1998-2005 and 2015-16, Nullifies Previous Judgments.

Case Laws:

GST

Income Tax

Customs

Corporate Laws

FEMA

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CST, VAT & Sales Tax

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TMI Tax Updates - e-Newsletter
June 18, 2024