TMI Tax Updates - e-Newsletter dated: June 21, 2024 - with Direct Tax, Indirect Tax and GST Updates and Updates on FTP, FEMA, IBC & Corporate Laws etc. published on TMI with Latest Case Laws

Pricing Login

Tax Management India. Com
Law and Practice : Digital eBook
Research is most exciting & rewarding

Case Laws Acts Notifications Circulars Classification Forms Manuals Articles News D. Forum Highlights Notes

Home


Tax Updates - TMI e-Newsletters

Home e-Newsletters Index Year 2024 June Day 21 - Friday ← Older Newer →
TMI e-Newsletters FAQ
You need to Subscribe a package.
Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter June 21, 2024 Case Laws in this Newsletter: GST Income Tax Customs Service Tax Central Excise Indian Laws Highlights / Catch Notes GST The court ruled in favor of the petitioner on refund of tax credit for Spunbonded Polypropylene Bed Sheets under GST. Visit to Get Source Petitioner's registration was cancelled for not filing returns under Section 39 of the CGST Act. Appeal dismissed due to time limitation. Court orders to permit petitioner to resume business. Visit to Get Source Adjudication order set aside due to discrepancy in ITC claims. Circular applies for 2017-18. Matter remitted for fresh consideration. Visit to Get Source Court quashes assessment order due to disparity in GST returns. Petitioner agrees to pay 10% of disputed tax demand for remand. Visit to Get Source Income Tax HC affirms the order where Tribunal rejected blanket stay on tax recovery, required Rs. 230 crores payment & corporate guarantee. No stay for high-pitched assessment. Visit to Get Source ITAT ruled assessment u/s 153A invalid as based on third-party material, required under u/s 153C. No incriminating material found, additions not valid. Visit to Get Source The appeal filed in the wrong place. Address of assessee always in Kolkata. Revenue Appeal dismissed. File in right place next time. Visit to Get Source High Court ruled against condoning delay in filing revision application u/s 264. Fairness in taxation outweighed by delay. Unfair advantage denied to taxpayer. Visit to Get Source Capital gain rules clarified by ITAT: Section 50C doesn't apply to leasehold rights in land. Deeming provision only for land/building Visit to Get Source Disallowance of foreign tax credit due to late filing of Form 67. Tribunal allows credit following legal precedent. Visit to Get Source ITAT says corporate guarantee to AE is not a financial service by assessee. No profit shifting or burden. Interest adjustment on AEs' receivables unjustified. Visit to Get Source ITAT ruled in favor of the taxpayer, allowing depreciation claimed on software & network equipment purchases. Visit to Get Source Income from derivatives transaction considered under presumptive taxation u/s 44AD. AO failed to justify adding 50% profit rate. Appeal allowed. Visit to Get Source Assessee, a Singapore company, not liable to pay tax in India on shipping income under India-Singapore Treaty. AO directed to delete additions. Visit to Get Source Issues regarding provision of bad debts not recorded in books of account. Rectification under sec. 154 allowed. Decision upheld by Tribunal. Visit to Get Source Issues on transfer pricing adjustment u/s 92 resolved in favor of Appellant. Correct comparison & method accepted. Additional ground admitted for deduction u/s 80-IA for further consideration. Visit to Get Source Appellate Tribunal decision: Applicant trying to reargue case without showing any mistake. Tribunal findings stand. No manifest error found. Visit to Get Source ITAT ruled that hire payments to Belgium are not taxable due to DTAA. TP adjustment using CUP method allowed based on consistency. TDS credit to be verified. Visit to Get Source ITAT: No notional interest disallowance as no advances existed during AY 2010-11. CIT(A)'s deletion of inflated import purchases upheld. New claims allowed in abated assessment. Visit to Get Source Assessing Officer's order not erroneous or prejudicial to revenue. Allegation of Lack of inquiry by LD PCIT fails. Order quashed. Visit to Get Source Undisclosed sales issue: Tribunal rejects Revenue's request for higher profit rate, stresses need for reasonable basis. Visit to Get Source Tax penalty under section 271B deleted by Appellate Tribunal due to genuine inadvertent mistake in filing tax audit report on time. Visit to Get Source Interest paid for delayed payments to broker, not subject to TDS u/s 194A. Decision in favor of assessee. Visit to Get Source Assessment reopened after 4 years based on same old info. No new material found. Assessee appeal allowed. Visit to Get Source Customs CESTAT ruled in favor of the appellant regarding valuation of imported Bovine Leather Upholster Sofa. Declared value upheld. Visit to Get Source CESTAT ruled that if goods aren't liable for confiscation under Customs Act 1962, penalty can't be imposed under u/s 112. Visit to Get Source CESTAT decided: Imported goods, parts for Ball Pen Tips, classified under specific heading. IGST @12% applicable. CBIC Circular supports decision. Visit to Get Source DGFT Export of Non-Basmati White Rice to Malawi & Zimbabwe via NCEL approved. Quantity: 1,000 MT each country. Visit to Get Source Indian Laws Court upholds presumption u/s 118 & 139 of N.I. Act in dishonored cheque case. Accused failed to rebut statutory presumption. Revision dismissed. Visit to Get Source Willful defaulters wrongly declared without notice or hearing, violating RBI rules. Orders quashed for lack of natural justice. Visit to Get Source Service Tax CESTAT ruled appellant provided Legal Consultancy service, not Business Auxiliary Service. Service recipient not liable for service tax. Visit to Get Source Refund claims for service tax were rejected due to lack of export compliance and nexus between input and output services. Show-cause and order valid. No benefit for non-exported services. Visit to Get Source Articles RE-OPENING OF COMPAY’S BOOKS OF ACCOUNTS LITIGATION MANAGEMENT IN GST REGIME (PART -5) An Excel Guide to Companies Act: Section 135 Opportunity of a personal hearing is required to be provided even when the Assessee did not check the GST portal after the cancellation of the GST registration Notifications DGFT 18/2024-25 - dated 19-6-2024 - FTP Export of Non-Basmati White Rice (under HS code 10063090) to Malawi and Zimbabwe through National Cooperative Exports Limited (NCEL) Circulars / Instructions / Orders SEBI - SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/85 - dated 20-6-2024 Modification in duration for Call Auction in pre-open session for Initial Public Offer (IPO) and Relisted scrips SEBI - SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/86 - dated 20-6-2024 Introduction of a special call auction mechanism for price discovery of scrips of listed Investment Companies (ICs) and listed Investment Holding Companies (IHCs) SEBI - SEBI/HO/MRD/MRD-PoD-2/P/CIR/2024/83 - dated 19-6-2024 Contribution to Core Settlement Guarantee Fund and Default Waterfall for Limited Purpose Clearing Corporation (PLCC) News Keeping the Financial System Resilient, Future Ready and Crisis Resistant (Inaugural Address by Shri Shaktikanta Das, Governor, Reserve Bank of India - June 20, 2024 - at the Second Global Conference on Financial Resilience organised by the College of Supervisors (CoS), RBI, Mumbai) 2nd meeting of India-Cambodia Joint Working Group on Trade & Investment held in New Delhi National Monetisation Pipeline monetised Rs 3.85 lakh crore of assets in 3 years Case Laws: GST 2024 (6) TMI 896 Denial of refund of accumulated Input Tax Credit on account of inverted duty structure - Classification of Spunbonded Polypropylene Bed Sheets under GST - HELD THAT:- Upon a thorough examination of the documents presented to the Court and taking into account the arguments put forth by the parties, this Court opines that respondent no. 4 inadequately considered various factual elements in its decision-making process. It is firmly established, as reiterated by the Supreme Court in Puma Ayurvedic [ 2006 (3) TMI 141 - SUPREME COURT ], that the onus of proving a product's classification under a specific tariff heading lies with the revenue authority, which must demonstrate that such classification aligns with the understanding of consumers or common parlance. However, the respondent authorities have failed to fulfil this burden of proving that the PPSB Bed Sheets, manufactured by the petitioner, fall under tariff heading 5603 rather than 6304. As established by the Supreme Court in Union of India v. Garware Nylons Ltd [ 1996 (9) TMI 123 - SUPREME COURT ], the burden of proof rests with the taxing authorities herein the respondent authorities to substantiate their claims regarding the taxable nature of a particular case or item. Mere assertions in this regard hold no weight. Thus, this Court has maintained that there must be tangible evidence to support the appropriate findings, which may be presented either orally or through documentation. The order of the appellate authority are quashed and set aside - application disposed off. 2024 (6) TMI 895 Cancellation of registration of the petitioner - failure on the part of the petitioner to furnish returns under Section 39 of the CGST Act, for a continuous period of six months - Appeal dismissed on the ground that the same was barred by limitation as the same was filed beyond the time prescribed as provided for in Section 107 of the said Act - HELD THAT:- Admittedly, the petitioner s registration under the said Act had been cancelled on the ground of non-filing of returns. It is not the case of the respondents that the petitioner had been adapting dubious process to evade tax. Taking note of the fact that the suspension/revocation of license would be counterproductive and works against the interest of the revenue since, the petitioner in such a case would not able to carry on his business in the sense that no invoice can be raised by the petitioner and ultimately would impact recovery of tax, the respondents should take a pragmatic view in the matter and permit the petitioner to carry on his business. It is the contention of the respondents that the petitioner is not interested to comply with the provisions of the said Act, it is, however, noticed that immediately upon issuance of the show cause the petitioner had filed its returns. Such fact would corroborate from the print out taken from the portal of the respondents. The order dated 11th May, 2023, rejecting the application for revocation of the order of cancellation and the order dated 26th February, 2024 passed by the appellate authority also stand set aside - Petition disposed off. 2024 (6) TMI 894 Rejection of petitioner s appeal - rejection on the ground of time limitation and lack of sufficient cause for filing the appeal - HELD THAT:- Admittedly, in this case the order passed under Section 73 (9) of the said Act had been received by the petitioner on 9th November 2023. It is true that there is no appropriate explanation provided by the petitioner for the period between 9th November 2023 and February 2024. However, there appears to be some explanation given by the petitioner for the period from February 2024 till 18th March 2024 when the appeal was filed. The appellate authority has acknowledged the factum of the petitioner s proprietor s illness. The justice will be sub-served if the appeal is directed to be heard out on merits subject to payment of costs of Rs. 5,000/- to be paid by the petitioner to the State Revenue Authorities - petition disposed off 2024 (6) TMI 893 Violation of principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax demand on merits - mismatch between GSTR-3B and the auto-populated GSTR-2A - HELD THAT:- On examining the impugned order, it is clear that the confirmed tax proposal pertains to mismatch between the GSTR-3B returns and the auto-populated GSTR-2A. Such tax proposal was confirmed because the petitioner did not reply to the show cause notice. Therefore, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits, albeit by putting the petitioner on terms. The impugned order dated 05.12.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is permitted to send a detailed reply to the show cause notice by enclosing all the relevant documents. Petition disposed off by way of remand. 2024 (6) TMI 892 Validity of Assessment orders under Section 63 of the Central Goods and Services Tax Act, 2017 - cancellation of GST registration of petitioner on the ground that the petitioner had not filed his returns continuously for a period of six months - HELD THAT:- On examining the orders impugned herein, it is evident that the tax liability was computed on best judgment basis by drawing on the particulars available in the auto - populated GSTR-2A. By using the total purchase value as the basis, the taxable value was arrived at and freight and miscellaneous charges and gross profit was added thereon. This exercise was carried out without hearing the petitioner in person and considering the petitioner's objections. In these facts and circumstances, it is just and necessary that the petitioner be provided an opportunity to contest the tax proposal on merits. Since the petitioner has remitted 10% of the disputed tax demand under the old registration, it is open to the petitioner to apply for refund of the same. If such application is made, the same should be considered and disposed of within a period of 30 days. In order to secure revenue interest in the meantime, as agreed to by the petitioner, the petitioner shall remit 10% of the disputed tax demand in respect of each assessment period. These matters are remanded for reconsideration. 2024 (6) TMI 891 Violation of principles of natural justice - non-service of SCN - impugned order were uploaded on the view additional notices and order tab of the GST portal and not communicated to the petitioner through any other mode - mismatches between GSTR 3B of the petitioner and the auto populated GSTR 2A - HELD THAT:- On perusal of the impugned order, it appears that the tax proposal pertains entirely to non payment of tax under reverse charge mechanism. Learned counsel for the petitioner pointed out that such tax proposal was a result of the petitioner making an inadvertent error while filling up GSTR 3B returns. In these circumstances, albeit by putting the petitioner on terms, it is just and necessary that the petitioner be provided an opportunity to contest the tax demand on merits. The impugned order dated 28.12.2023 is set aside, subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order - Petition disposed off. 2024 (6) TMI 890 Violation of principles of natural justice - non-service of SCN - impugned order were uploaded on the view additional notices and order tab of the GST portal and not communicated to the petitioner through any other mode - mismatches between GSTR 3B of the petitioner and the auto populated GSTR 2A - HELD THAT:- On perusal of the impugned order, it is evident that the tax proposal pertains to mismatches between GSTR 3B of the petitioner and the auto populated GSTR 2A. Such tax proposals were confirmed because the petitioner failed to attend the personal hearing. Upon considering the facts and circumstances, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits, albeit by putting the petitioner on terms. The impugned order dated 03.11.2023 is set aside, subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order - Petition disposed off. 2024 (6) TMI 889 Validity of adjudication order - discrepancies between the ITC claimed as per GSTR-3B and GSTR-2A - HELD THAT:- For the limited purpose of the present matter, it is to be noticed that the table enclosed in the adjudication order would indicate that there is discrepancy between the ITC claimed as per GSTR-3B and GSTR-2A. The Authority has disallowed such claim only on the ground of discrepancy. It must be noticed that Circular No. 183/15/2022-GST dated 27.12.2022 is made applicable specifically with respect to the financial year 2017-18 as is the case herein. This Court is of the prima facie view that the Circular is applicable to the present facts and on such ground, the adjudication order is set aside. In so far as the contention of counsel for revenue that the applicability of the circular may also depend on the facts of the case, the said aspect is left open to be decided upon remand. The order of sending the matter back to the authority is being passed also keeping in mind the request of the petitioner to be given one more opportunity to put forth their case before the Authority. The matter is remitted back for fresh consideration - petition disposed off by way of remand. 2024 (6) TMI 888 Violation of principles of natural justice - ex-parte order - It is submitted that without considering the documents submitted by the petitioner, adjudication has been completed without proper notice to the petitioner - HELD THAT:- It is noticed that the order passed is an ex-parte order without the say of the petitioner. Though the electronic mode of service may be sufficient, however, in the peculiar facts of this case, taking note of the substantive rights involved, it would serve the interest of justice by remanding the matter and granting another opportunity to the petitioner to participate and make out his reply to the show cause notice dated 27.09.2023. If the objective of Section 75 (4) of the Act is kept in mind, requirement is of providing an opportunity wherever adverse order is sought to be passed. Taking note of such legal mandate, it would be appropriate to permit the petitioner to participate in the adjudication process and accordingly, the order at Annexure-A is set aside - Petition disposed off. 2024 (6) TMI 887 Wrong Claim of IGST Refund on the Exports made under Advance Authorization (AA) Scheme - illegtimate refund scheme - HELD THAT:- The matter requires consideration. List the matter on 22.07.2024. 2024 (6) TMI 886 Challenge to assessment order - petitioner's reply was taken into consideration - disparity between the return in Form GSTR 3B and the supplier's return in Form GSTR 1 - HELD THAT:- Although the receipt of the reply dated 13.09.2023 is not admitted by the respondent, on perusal thereof, it appears that the petitioner explained the disparity between the GSTR 3B return of the petitioner and the GSTR 1 return of his supplier by stating that such disparity arose on account of an error by the supplier in reporting b2c turnover. Undoubtedly, the petitioner was negligent in not uploading the reply on the portal and in not participating in proceedings that culminated in the impugned assessment order. The petitioner agrees to remit 10% of the disputed demand as a condition for remand. In these circumstances, the interest of justice warrants that the petitioner be provided an opportunity to place the relevant documents on record and contest the tax demand. Solely for that reason, the impugned order warrants interference. The impugned order dated 15.12.2023 is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand within a period of two weeks from the date of receipt of a copy of this order - Petition disposed off. Income Tax 2024 (6) TMI 900 Rejection of seeking a blanket unconditional stay on collection/recovery of tax and interest demands by Tribunal - Interim order passed by the Tribunal on the stay application - Tribunal instead granted a conditional stay requiring the petitioner to pay Rs. 230 crores, furnish a corporate guarantee from an associate company with unencumbered assets in India exceeding Rs. 900 crores, and cooperate in the expeditious disposal of the appeal - HELD THAT:- We are not persuaded to accept the petitioner s contention that in the facts of the case, the recovery being in the nature of a protective recovery, it was not permissible for the Tribunal to pass the impugned order considering the decisions of the orders passed for assessment year 2008-09 as substantive year. The contention is that assessment year 2014-15 cannot be treated to be substantive, as there is no finality of adjustment - Although the Tribunal has made the observations as noted by us above, however, considering the orders passed on the subsequent assessment years (A.Ys. 2010-11, 2011-12, 2012-13), we are of the opinion that it would not be correct for the petitioner to raise a contention that the recovery as sought to be made for assessment year 2014-15 would be in the nature of a protective recovery. If such argument is accepted, orders that have been accepted by the petitioner in depositing the demands for the assessment years 2011-12 and 2012-13, (which is Rs. 50 crores and Rs. 100 crores respectively) could not have been passed. Moreover, such orders are accepted by the petitioner. Petitioner s contention that the assessment for the year in question, being a high-pitched assessment, such a demand would warrant a blanket stay - In the facts of the case, we are not inclined to accept such contention considering as to what has transpired for the previous years, i.e., A.Ys. 2008-09, 2010-11, 2011-12 and 2012-13. In such context, the petitioner s reliance on the decision of Valvoline Cummins Ltd. [ 2008 (5) TMI 20 - HIGH COURT OF DELHI] would also not assist the petitioner, as the facts are completely distinct from the facts in hand. In the present proceedings, we are concerned with the interim order passed by the Tribunal on the stay application as filed by the petitioner, which is purely a discretionary order. We do not find that the discretion has been exercised by the Tribunal perversely or in the manner which the law would palpably not recognize. Referring to partial interference in condition no. (ii) as Tribunal has directed the petitioner to furnish a corporate guarantee from an associate company which has unencumbered assets in India in excess of the balance disputed demands, i.e., Rs. 900 crores we are of the opinion that such condition ought not to have been directed by the Tribunal in the facts and circumstances of the case and more particularly considering the interim orders passed for the prior years based on the same triggers of exercise of options. Such condition, therefore, is hereby substituted by directing the petitioner to furnish a corporate guarantee of its ultimate parent, namely, Vodafone International Holdings BV, Netherlands as accepted by the revenue in the assessment year 2008-09. In the light of the above discussion, except what has been modified by us in relation to condition no. (ii) as imposed by the impugned order, we are not inclined to interfere in the impugned order. 2024 (6) TMI 899 Assessment u/s 153A v/s 153C - Legality of assessment framed u/s 153A based on materials found during the search of a third party - HELD THAT:- As decided in ABHISAR BUILDWELL P. LTD. [ 2023 (4) TMI 1056 - SUPREME COURT] already concluded assessment could not be disturbed in search proceedings u/s 153A and the additions have necessarily to be based on incriminating material found during the course of search. Proceeding further, the facts of the case would establish that impugned addition has been made on the basis of incriminating material found during the course of search on a third party as well as statement recorded therein. In such a case, the proceedings have to be initiated u/s 153C and not u/s 153A which has not been done by Ld. AO. To initiate proceedings u/s 153C, it is mandatory requirement of law that satisfaction should have been recorded by Ld. AO of the searched person as well as the AO of the other person before proceedings u/s 153C. The recording of satisfaction is sine qua non to assume jurisdiction u/s 153C. Without recording of this satisfaction, no addition could have been made in the hands of the assessee. In the present case, no such satisfaction has been shown to us and in fact, the assessment has been framed u/s 153A which could not be sustained in law considering the mandatory provisions of Sec.153C. Additions on the basis of statement recorded in a separate search action in the case of a third person are not permissible in Section 153A proceedings. The Hon'ble High Court observed that the statement of third person cannot be construed as an incriminating material belonging to or pertaining to the person other than the person searched. See Anand Kumar Jain HUF [ 2021 (3) TMI 8 - DELHI HIGH COURT Therefore, considering the aforesaid settled position of law, the assessment would be bad-in-law and therefore, the impugned addition could not be sustained on this score only - Decided in favour of assessee. Addition of Undisclosed Income - CIT(A) has rendered pertinent factual findings on merits and clinched the issue in the right perspective. The statement as relied upon by Ld. AO stood retracted and Ld. AO completely ignored the retraction. The affidavits filed by the assessee from vendors who sold the properties have also been completely ignored by AO. No corroborative evidences have been brought on record to strengthen the allegation of payment of on-money. The seized document is merely an excel sheet which did not have basic details or any acknowledgements. The same has rightly been held to be a dumb document and it could, at best, be considered as secondary evidence rather than primary evidence to sustain the addition. To support the addition arising out of this document, corroborative evidence would be essential. We concur with these findings of Ld. CIT(A). In the result, the appeal of the revenue stand dismissed. 2024 (6) TMI 898 Nature of expenses - Disallowances of product development expenses - AO observed that no supporting documents were furnished by the assessee - the case of the revenue is that the expenditure incurred by the assessee towards product development are in nature of capital expenditure given enduring benefit to the assessee - HELD THAT:- As gone through the entire list of expenditure, we find none of the expenditure incurred thereon would give any enduring benefit to the assessee. All these expenditure are genuine regular revenue expenditure incurred by the assessee. As stated earlier the assessee has been using its own employees and the material regularly purchase for its manufacturing facilities on proportion basis for the purpose of development of new product. This are only in the nature of revenue expenditure for the assessee. We are in complete agreement with the ld AO that there is no concept of deferred revenue expenditure under the income tax Act as specifically provided in section 35AB, 35ABB etc. Considering the nature of expenditure incurred by the assessee towards product development we hold that the entire expenditure thereon are purely revenue in nature and accordingly would be eligible for deduction as revenue in nature and accordingly would be eligible for deduction as revenue expenditure in the year of incurrence. We find that similar list of expenditure incurred by the assessee for AY 2018- 19 were allowed by the ld AO himself u/s 143(3) - Ground raised by the assessee are allowed. Disallowance liquidated damages - CIT(A) observed that obtaining no object certificate (NOC) from pollution control board is prerequisite, Since, there was a delay in obtaining the same by the assessee the assessee could not fulfill the supply of goods are deliver this obligation in accordance with contract with its customers, thus effectively incurred by the assessee for violation of law in force - HELD THAT:- No penalty of any amount whatsoever has been levied by any regulatory board such as pollution control board or by MOEF on the assessee for not alleged violation. The present liquidated damages as tabulated above were incurred by the assessee as part of its contractual obligation with the customers. In fact the customers had deducted the said amount while making payments to the assessee for some breach of contractual terms by the assessee. Hence, this is no provision at all as stated by the AO are its actual payment of expense by the assessee. The assessee having incurred these liquidated damages as part of contractual obligation with the customers on claims the same as a revenue expenditure. We are not in complete agreement with the contentions raised by the assessee. There is no dispute with these liquidated damages were indeed paid by the assessee only to its customers and not to any other 3rd party. There is no dispute that these liquidated damages were paid by the assessee only as part of the non fulfillment of contractual obligation as per terms of contract with the customers. Hence, it clearly becomes allowable expenditure in the hands of the assessee. Accordingly, Ground raised by the assessee allowed. Disallowances made on account of employees contribution to PF and ESI - HELD THAT:- This issue is no longer res integra in view of the recent decision of Checkmate [ 2022 (10) TMI 617 - SUPREME COURT] wherein, it has been held that if the employees contribution to F and ESI were remitted beyond the due date prescribed under respective dates the same would not be allowable in the case of the assessee if it is remitted before due date of filing of income u/s 139(1) of the Act. 2024 (6) TMI 897 Jurisdiction of the ITAT Gauhati Bench to hear the appeal - Whether appeal was filed under improper jurisdiction? - HELD THAT:- From the factual noting of position of addresses of the assessee on various documents extracted above from the order of Ld. CIT(A), it is noted that assessee always had its address in Kolkata. In both the orders of Ld. AO as well as Ld. CIT(A), there is no whisper about transfer of case of the assessee from Kolkata jurisdiction to Gauhati jurisdiction by complying with the provisions of the Act. In this respect, ld. CIT(A) from perusal of the assessment folder of the assessee has noted at page 161 about no challenge raised by the assessee for transfer of its case from the earlier AO i.e. ITO, Ward-10(1), Kolkata to the one who had passed the impugned assessment order i.e. ITO, Ward-9(2), Kolkata. Considering the judgment of ABC Ltd [ 2019 (3) TMI 501 - PUNJAB AND HARYANA HIGH COURT] as well as MSPL Ltd.[ 2021 (5) TMI 739 - BOMBAY HIGH COURT] we find that the present appeal by the revenue is under improper jurisdiction, owing to the fact that impugned assessment order dated 23.03.2015 is passed by Ld. ITO, Ward-9(2), Kolkata. Accordingly, this present appeal is dismissed with the liberty to the Revenue to file a fresh appeal before the appropriate bench of the Tribunal having jurisdiction over the assessee along with petition for condonation of delay caused on this account. The period exhausted on account of filing the present appeal and its present disposal may be considered for condonation of delay in disposing the appeal, if filed by the revenue before the appropriate bench of ITAT having jurisdiction over the assessee. Appeal of the revenue is dismissed. 2024 (6) TMI 885 Revision u/s 264 - CIT rejected the application on the ground of delay and finding that the intimation u/s 143 (1) could not be treated as an order that was amenable to revision u/s 264 - Condonation of delay on filing revision application - HELD THAT:- On a consideration of the rival submissions, while we were initially inclined to accept the submissions of the appellant, that the aspect of uniformity and fairness in taxation should outweigh the delay occasioned in preferring the revision petitions, we find ourselves unable to ignore the submissions for the Income Tax Department that it was the same aspect of delay/limitation that prevented the Department also from re-assessing the income of the appellant for the assessment years 2004-2005 and 2005-2006, respectively. We find that during the said years the appellant had declared the profit on the sale of shares as capital gains and had obtained the benefit of a lower rate of tax on the said income, and the revenue was unable to reassess the said income as business income solely on account of the limitation provisions under the statute. As far as the appellant assessee is concerned, he too did not choose to file the Revision Petitions immediately after coming to know of the assessment order for the assessment years 2006-2007 and 2008-2009, when the revenue had changed its stand and insisted on the assessment of the profits on sale of shares as business income. Had the appellant filed the revision petitions immediately on noting the changed stand of the revenue, perhaps the view taken by us in this appeal might have been different. We find, however, that the appellant assessee chose to wait till the order of the Appellate Authority that confirmed the stand of the AO with regard to the changed treatment of the income for the purposes of taxation, and only then chose to approach the revision authority through Exts. P6 and P7 Revision Petitions. The delay in approaching the revision authority cannot, therefore, be condoned as rightly held by the revision authority as also by the Single Judge in the judgment impugned in this appeal. To condone the delay and permit the appellant to re-visit the concluded assessment for the assessment years 2006-07 and 2008-09 would tantamount to conferring an unfair advantage to the appellant whilst denying such an advantage to the revenue. Thus, for the reasons stated in the judgment of Single Judge, as supplemented by the reasons in this judgment, the Writ Appeal fails and is accordingly dismissed. 2024 (6) TMI 884 Penalty u/s 271(1)(c) - Defective notice u/s 274 - non specification of clear charge - HELD THAT:- The issue is squarely covered by the judgement of Hon ble Jurisdictional High Court in the case of Mohammed Farhan A. Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] primary burden lies on the Revenue. In the assessment proceedings, it forms an opinion, prima facie or otherwise, to launch penalty proceedings against the assessee. But that translates into action only through the statutory notice under section 271(1)(c), read with section 274 of IT Act. True, the assessment proceedings form the basis for the penalty proceedings, but they are not composite proceedings to draw strength from each other. Nor can each cure the other's defect. A penalty proceeding is a corollary; nevertheless, it must stand on its own. These proceedings culminate under a different statutory scheme that remains distinct from the assessment proceedings. Therefore, the assessee must be informed of the grounds of the penalty proceedings only through statutory notice. An omnibus notice suffers from the vice of vagueness. The notice u/s 274/271(1)(c) of the Act is not carrying the specific limb. Therefore, this is a case where both the parts of the offences i.e., concealment of income as well as furnishing of inaccurate particulars of income were involved. We are of the considered opinion that the impugned penalty is not sustainable on legal grounds. The ld. DR is unable to submit any contrary judgment before the bench. Hence, penalty U/s 271(1)(c) is quashed. The appeal of the assessee is succeeded. 2024 (6) TMI 883 Penalty U/s 271(1)(c) - defective notice u/s 274 - non specification of clear charge - HELD THAT:- AO did not mention the nature of concealment in the notice issued u/s 274/271(1)(c). The counsel laid down that in the absence of such specific notice, the notice would be invalid. As held in various judicial pronouncements including the decision of SAS s Emerald Meadows [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT ] against which Special Leave Petition (SLP) filed by the department stood dismissed by Hon ble Supreme Court [ 2016 (8) TMI 1145 - SC ORDER ]. The notice u/s 274/271(1)(c) of the Act is not carrying the specific limb. Therefore, this is a case where both the parts of the offences i.e., concealment of income as well as furnishing of inaccurate particulars of income were involved. Finally, respectfully following the binding judicial precedents as cited aforesaid, we are of the considered opinion that the impugned penalty is not sustainable on legal grounds. The issue was agitated before the ld. CIT(A) but the issue is not adjudicated in appeal order. The ld. DR is unable to submit any contrary judgment before the bench. Hence, penalty U/s 271(1)(c) is quashed. We allow the appeal of the assessee. 2024 (6) TMI 882 Re-determination of interest u/s 244A on Refund via rectification u/s 154 - HELD THAT:- CIT(A) has fallen in error in making observation that the assessee has sought rectification of the determination of interest under section 244A of the Act while in fact the question was the period for which the interest should have been paid. It was not the question of making a conclusion after a long process so as to be outside the purview of section 154 of the Act. But, merely rectification of a clerical nature arising out of mistake in calculation of period for which interest is payable to assessee. It is settled proposition of law that if interest is reduced by virtue of Sub-section (3) of Section 244A on account of assessment u/s 143(3), the interest granted in earlier year gets substituted and it is the reduced amount of interest that would form part of income of that year. Thus, it would amount to mistake rectifiable under Section 154 of the Act. Reliance can be placed on Avada Trading Co. (P.) Ltd. [ 2006 (1) TMI 465 - ITAT MUMBAI ] This certainly leads to conclusion that Section 154 proceedings can be held in matters of calculation of the interest component payable u/s 244A of the Act. Admittedly, in the case in hand the refund has been credited on 25 February 2021 while the refund was determined on 20 February 2009. So assessee was entitled to interest up to 25/02/2021, which should have been rectified by the AO. Therefore we are inclined to allow the grounds raised. 2024 (6) TMI 881 Capital gain computation - Applicability of Section 50C - transfer of leasehold rights - HELD THAT:- Considering the fact that we are dealing with special provision for full value of consideration in certain cases u/s 50C of the Act, which is a deeming provision, the fiction created in this section cannot be extended to any asset other than those specifically provided therein. As section 50C of the Act applies only to a capital asset, being land or building or both, it cannot be made applicable to lease rights in a land. The Hon'ble Bombay High Court in the case of Greenfield Hotels Estates (P.) Ltd. [ 2016 (12) TMI 353 - BOMBAY HIGH COURT] held that Section 50C of the Act would not be applicable while computing capital gains on transfer of leased hold rights in Land and buildings. The Hon'ble Delhi ITAT in the case of Noida Cyber Park (P.) Ltd., [ 2020 (10) TMI 563 - ITAT DELHI] held that Section 50C of the Act covers only capital asset being land or building or both; it would not cover transfer of leasehold rights in land and building. Deeming provision has been incorporated to substitute the value adopted or assessed or assessable by stamp valuation authority in place of consideration received or accruing as a result of transfer, in case the latter is lower than the former. It, therefore, follows that only if a capital asset being land or building or both is transferred and the consideration received or accruing as a result of such transfer is less than the value adopted or assessed or assessable by the stamp valuation authority, the deeming fiction under sub-sec. (1) of Section 50C of the Act shall be activated to substitute such adopted or assessed or assessable value as full value of consideration received or accruing as a result of such transfer in the given situation. Thus is held that the section 50C of the Act, being deeming provision inserted by the Finance Act 2002 w.e.f. 01.04.2003, is not applicable in this case. However, the AO may compute capital gains as per the Act without invoking the provisions of section 50C of the Act. 2024 (6) TMI 880 Disallowance of the benefit claimed u/s 90/90A - non-allowance of the credit for the foreign tax paid in Bhutan - Form No. 67 is not filed within the required time frame - directory OR mandatory provision -HELD THAT:- Respectfully following the order of Duraiswamy Kumaraswamy [ 2023 (11) TMI 1000 - MADRAS HIGH COURT] and concurring with the views held by the coordinate Benches of the Tribunal M/s. 42 Hertz Software India Pvt. Ltd [ 2022 (3) TMI 834 - ITAT BANGALORE] Vikash Daga [ 2023 (6) TMI 1387 - ITAT DELHI] and Ashish Agrawal [ 2023 (10) TMI 86 - ITAT HYDERABAD] we hold that merely because the assessee could not file Form No. 67 within the prescribed time limit as per the provisions of rule 128(9) of the Income-tax rules, 1962, as it stood during the year under consideration, will not preclude the assessee from claiming the benefit of foreign tax credit in respect of taxes paid outside India. Therefore, the claim of the assessee is allowed and the Assessing Officer is directed to give benefit of foreign tax credit in respect of tax paid outside India by the assessee in accordance with law and the DTAA between India and the Bhutan. Since in the instant case the assessee had filed Form No. 67 along with the return of income filed u/s. 139(4) of the Act, the foreign tax credit was allowable. The AO is directed to allow the credit in accordance with the provisions of section 90 read with DTAA. Appeal of the assessee is allowed. 2024 (6) TMI 879 TP Adjustment - corporate guarantee provided to AE - assessee by giving the corporate guarantee has exposed itself to a big risk for which nothing has been charged in return - HELD THAT:- The facts of the case in hand suggest that assessee is not providing any corporate guarantee to any unrelated party thus this is not a business activity in the nature of financial services for the assessee. The security provided by the AE are sufficient in the event of any default giving immunity to the assessee company from any financial loss/burden. Net Profit Rate of AE is also a mere 1.58% thus not suggesting any possibility of shifting of profits or any effective benefit to AE out of this guarantee. Thus the facts of the case in hand are different, thus the finding rendered in the case of PCIT Vs Redington (India) Ltd [ 2020 (12) TMI 516 - MADRAS HIGH COURT] are not applicable. Therefore, although the assessee has issued the corporate guarantee but the terms of guarantees and securities of the sanction letter of borrowing along with the financial position of AE suggest that there is not any financial burden to the assessee against said borrowing. As there is no bearing on profits, income, losses or assets of the assessee as a result of provision of guarantee and the judicial precedents cited by the assessee also support this view, thus the adjustment made on account of corporate guarantee provided to AE is hereby deleted. Addition of interest on the receivables outstanding from these AEs for more than 60 days - applying rate of interest of 5.475% (based on 6 Month LIBOR plus a mark up of 400 basis points), which was confirmed by Dispute Resolution Panel - HELD THAT:- Receivables which are outstanding beyond 60 days have been treated as unsecured loans advanced to AEs and accordingly interest has been imputed thereon. Further TPO has adopted a credit policy of 60 days and the outstanding beyond 60 days have been termed as unsecured loans advanced whereas assessee has been giving a standard credit period of 180 days to AEs as well as third parties. Moreover, assessee is not charging any interest on payables too. The credit policy of the assessee is in line with RBI Guidelines on foreign exchange receivables thus there is no basis with the TPO in adopting credit period of only two months. Similar view has been expressed in the decision of GSS Infotech Ltd [ 2016 (7) TMI 243 - ITAT HYDERABAD] which the assessee has relied upon. On the same credit terms export has been made to Non AEs by giving credit period of 180 days and no interest has been charged therefrom. Thus there is complete uniformity in the act of the assessee in not charging any interest from both the AE as well as Non AE debtors and on the same delay, the assessing officer is not justified in making the addition of notional interest to the assessee s arm s length price. The ratio decided in the case of CIT Vs Indo American Jewellery Ltd [ 2013 (1) TMI 804 - BOMBAY HIGH COURT] is applicable in the present case also and accordingly the adjustment of interest is deleted. 2024 (6) TMI 878 Penalty levied u/s 271(1)(c) - Defective notice u/s 274 - no proper satisfaction was drawn by Ld. AO qua exact charge against the assessee before levying impugned penalty - HELD THAT:- Concealment of income and furnishing of inaccurate particulars of income are two different charges. These two expressions, in terms of ratio of various binding judicial precedents, carry different connotation / charges and non-framing of specific charge against the assessee would vitiate the penalty proceedings. The penalty could be levied only for a specific charge. Furnishing of inaccurate particulars of income would arise in a situation where the assessee has not disclosed the particulars correctly or the particulars disclosed by the assessee are found to be incorrect whereas concealment of particulars of income would mean that the assessee has concealed the income and has not reflected certain income, at all, in its return of income. Therefore, for each of the addition, AO has to specify as to which limb was applicable to the facts of the case and it could not be left to mere presumption or guess-work of the assessee. Framing of specific charges is sine-qua-non for levy of penalty since the assessee must be put to allegations for which the penalty was being levied. In the absence of such a specific charge, the penalty would be bad-in-law and the same is not a curable defect u/s 292BB. This position has been settled in numerous binding judicial precedents. Considering the same, we would have no hesitation in holding that these two charges are quite different charges and carry different connotation / meaning. The non-framing of specific charge would make the notice defective. The assessee assailed the notice on the ground that specific charge was not framed against the assessee. The Hon ble Court, in Amtex Software Solutions Pvt. Ltd.[ 2019 (6) TMI 1182 - MADRAS HIGH COURT] concurred with assessee s submissions that the distinction between the two expressions viz. concealed particulars of income and furnished inaccurate particulars of income was beyond any pale of doubt. There could not be two opinions or disputes about the fact the aforesaid two expressions are distinct and that they fall under different realms. The Hon ble Court finally directed revenue to keep the show-cause notice in abeyance and issue a corrigendum / addendum / errata to the assessee clearly stating the grounds on which the notice was issued. In the present case, that stage is already over since the assessee is in second appeal before us. Therefore, in our considered opinion, this case, in fact, supports the case of the assessee that non-framing of specific charges would be fatal to penalty proceedings. There was failure on the part of AO to frame specific charge against the assessee and accordingly, the penalty would not be sustainable in the eyes of law. By deleting the impugned penalty, we allow the appeal. Consequently, going into the merits of the penalty has been rendered academic in nature. AO proposed penalty for under-reporting / misreporting of income and levied penalty in both the years for under-reporting of income - AO has invoked both the limbs viz. under-reporting / misreporting of income in the penalty notice. These two expressions, on the same analogy as held earlier, would be separate and distinct charges. Applying the same logic and reasoning as for AY 2016-17, we delete impugned penalty in both the years. Consequently, going into the merits of the penalty has been rendered academic in nature. 2024 (6) TMI 877 Rectification of mistake - charging the correct income in the hands of the assessee - whether the assessee has received interest from the partnership firm? - HELD THAT:- It appears to be mistake apparent from the record and therefore, the application filed by the assessee u/s 154 is required to be adjudicated on merit and therefore, considering that aspect of the matter, we set aside the matter with a direction to the AO to make necessary inquiry and obtained evidence from the assessee and considered the plea of the assessee on merits and charged the tax in accordance with law based on the correct income. We get strength to support of our wherein on the similar circumstances the co ordinate bench of Mumbai has considered the plea of the assessee. Out of the judgment so relied upon by the assessee we find that on the similar circumstances as that of the assessee was in the case of Shri Sumanchandra G. Mehta [ 2013 (12) TMI 358 - ITAT MUMBAI] Thus we direct the AO to decide the application of the assessee filed u/s.154 after making necessary relief and decide the issue of charging the correct income in the hands of the assessee. In terms of these observations, the appeal of the assessee is allowed for statistical purposes. 2024 (6) TMI 876 Disallowance of depreciation claimed on purchases of software u/s. 40(a)(i) / (ia) - Assessee purchased certain software from resident and non-resident vendors that was capitalised in the books of accounts and depreciation at 60% was claimed u/s. 32 - AO disallowed the depreciation of software by invoking the provisions of section 40(a)(i)/(ia) of the act for non-deduction of tax at source as of the opinion that the software purchased by the assessee were copyrights and therefore the payments were in the nature of royalty -.AO further made disallowance in respect of depreciation claimed by the assessee on servers / network equipments by restricting the depreciation at 15%. HELD THAT:- Under section 40(a)( i) any interest (not being interest on loan issued for public before 1/4/1938), royalty fee for technical services or sum chargeable under this Act which is payable outside India or inside India to a non-resident not being a company or to a foreign company on which tax is deductible at source and such tax has not been deducted or, after deduction, has not been paid during the previous year or in the subsequent before the expiry of the time prescribed under sub-section (1) of section 200 shall not be allowed as deduction while computing the income chargeable under the head Profit and gains of business or profession . There is a difference between the expenditure and other kind of deduction. The other kind of deduction which includes any loss incidental to carrying on the business, bad debts etc., which are deductible items itself not because an expenditure was laid out and consequentially any sum has gone out; on the contrary the expenditure results a certain sums payable and goes out of the business of the assessee. Thus, in our view, section 40 refers to the outgoing amount chargeable under the act, and subject to TDS under Chapter XVII-B. On the contrary, depreciation is a statutory deduction and after the insertion of Explanation 5 to sec. 32, it is obligatory on the part of the assessing officer to allow the deduction of depreciation on the eligible asset, irrespective of any claim made by the assessee. Therefore, depreciation is a mandatory deduction on the asset which is wholly or partly owned by the assessee and used for the purpose of business or profession which means the depreciation is a deduction for an asset owned by the assessee and used for the purpose of business and not for incurring of any expenditure. Hon ble Supreme Court [ 2021 (3) TMI 138 - SUPREME COURT] held that, only if some right to use, without the right to commercially exploit the intellectual property in respect of a patent, invention, model, design, secret formula, process, copyright, literary or scientific work, are transferred, it cannot be regarded as royalty. There is nothing on record brought by the revenue in support of this argument. We therefore do not find any force in the argument advanced by the Ld.DR on this issue and the same stands rejected. Assessee appeal allowed. Depreciation claimed on server / network equipment - We note that identical issue has been considered in assessee s own case for A.Y. 2009-10 [ 2017 (3) TMI 1948 - ITAT BANGALORE] wherein by following decision of Dinamalar [ 2016 (9) TMI 506 - MADRAS HIGH COURT ] Tribunal has allowed the claim of assessee by granting the depreciation on peripherals at 60%. Nothing contrary to the above has been brought on record by the Ld. DR. Decided against revenue. 2024 (6) TMI 875 Assessment of long term capital gain on the sale of an immovable property - determination of the share of the assessee in the sale consideration - cost of acquisition - HELD THAT:- We find although the CIT(A) / NFAC accepted that the share of the assessee is 1/3rd, however, he upheld the action of the Assessing Officer in treating the share of the assessee at Rs. 65,00,000/-. Payment made to consenting party as expenses on transfer - Further, he did not allow the amount of Rs. 20,00,000/- paid to one Mr. Ankush Rambhau Chandere who is the consenting party as deduction. Since the order of the CIT(A) / NFAC is erroneous to the extent that he has considered the share of the assessee at 50% as against 1/3rd and since the assessee has filed certain additional evidences in support of his claim of deduction of the amount paid to the consenting party, therefore, after admitting the additional evidence, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to adjudicate the issue afresh as per fact and law after affording due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. Penalty levied u/s 271(1)(c) - As we find that the quantum appeal filed by the assessee has been restored to the file of Assessing Officer for fresh adjudication. We, therefore, deem it proper to restore the issue of penalty also to the file of the AO for adjudication afresh - Ground allowed for statistical purposes. 2024 (6) TMI 874 Determination of income from transaction in derivatives (futures) transactions - presumptive taxation u/s. 44AD opted - application of profit rate - HELD THAT:- As we find that ld. AO has made addition without sharing any information about the alleged transaction available on the system. The ld. CIT(A) on the other hand had accepted the total turnover of Rs. 42,61,003/- as disclosed by the assessee, however, without assigning any reason he has estimated profit rate of 50%. If the turnover has been accepted by the ld. CIT(A), then there is no justification of applying such a huge profit rate of 50% and since assessee has opted for presumptive taxation u/s. 44AD, then 8% as provided in the statute is liable to be accepted. Appeal of the assessee is allowed. 2024 (6) TMI 873 Taxability of income in India - Taxability of freight income u/s 44B in view of Treaty/DTAA) between India and Singapore - taxability of shipping income earned by the Appellant foreign companies admittedly incorporated in Singapore - fundamental principles of international taxation - assessee is a foreign company incorporated in Singapore which plies its ships globally including through Indian Ports and earns freight and other charges that arise from this activity - assessee stated that as per Article 8 of Treaty, profits derived by an enterprise of a contracting state from operation of ships in international traffic shall be taxable only in that state i.e. resident state viz. Singapore and therefore, according to assessee, India is precluded from taxing the shipping income, even if it is sourced from India. HELD THAT:- Article 8 of India-Singapore Treaty mandates that income of assessee enterprise from shipping business in international traffic shall be taxable only in the State of residence i.e. Singapore. Article 24(1) of the Treaty is not applicable in cases where assessee was able to demonstrate that its income is taxable in Singapore on accrual basis [like in this case, assessee has adduced material in the form of Inland Revenue Authority of Singapore clarifiying that its resident s income are taxable on the basis of accrual]. And it is noted that on the basis of such a clarification of Singapore Inland Revenue Authority which was not rebutted by the Indian tax Authorities as not genuine, or in the absence of any other material to take a view that global income of Singapore resident is assessable to taxation on remittance basis, we note that the Hon ble Gujarat High Court in similar case of M/s.M.T. Maersk Mikage [ 2016 (9) TMI 19 - GUJARAT HIGH COURT] held that income of Singapore resident was charged to tax on accrual basis (i.e. full amount would be assessable to tax on accrual and not on remittance) We concur with the view of M/s. Bengal Tigers Line Pte [ 2020 (11) TMI 567 - ITAT CHENNAI] and the decision of M.T. Maersk Mikage Mikage (supra) and hold that in terms of Article 8 of India Singapore DTAA, global income of a tax resident of Singapore from shipping operations, even though, which is earned outside Singapore is taxable only in Singapore on accrual basis; and consequently Article 24 of India Singapore DTAA ought not to have been invoked to deny the benefit of DTAA exemption merely for the reason that the said income was not taxed in Singapore by virtue of separate exemptions provided under Singapore Income Tax Act. AO as well as the Ld.DRP erred in coming to the conclusion that income earned by the assessee from shipping operations in India is taxable in India by virtue of Article 24 of India Singapore DTAA. Hence, we direct the AO to delete the additions made towards shipping income of assessee earned in India. Appeals filed by the assesses are allowed. 2024 (6) TMI 872 Rectification pf mistake u/s 154 - Disallowance of provisions of bad debts u/s 36(1)(viia) preferred in computation sheet without having been provided for in the P/L A/c. - assessee is a co-operative bank - HELD THAT:- Adverting to the first contention of the assessee that since the assessee has not pointed out and the mistake regarding claim of assessee for provision of bad debts which was not recorded in the books of assessee is not apparent from the assessment order, therefore, the addition cannot be made under the provisions of section 154. CIT(A) had also made the observations on this issue that the rectification u/s 154 can only be made when glaring mistake of law has been committed in the order which is apparent from the record. On a thoughtful consideration of the facts of the present case, since the issue under deliberation was pertaining to provision for bad and doubtful debts and the claim of assessee in the computation sheet without recording the provision in the books of account was also under the same head thus has a nexus with the issue raised in application u/s 154, and also apparent on the face of the computation of total income, therefore, in our considered opinion the rectification requested by the assessee, which was very much connected to the claim of the assessee for provision for bad and doubtful debts without having been making a provision in the books of accounts, which was allowed earlier whereas the same is not permissible under the provisions of Act. Accordingly, the fact regarding assessee s ineligible claim was a glaring and apparent mistake patent on the face of records, which was correctly undertaken by the Ld. AO and rectified under the provision of Section 154. Regarding the observation of Ld. CIT(A) that similar deduction was allowed by the Ld. AO in himself in the subsequent AY 2014-15, therefore, the claim of assessee should be allowed in the year under consideration also. On perusal of the order of Ld. CIT(A) and relevant documents, it is transpired that during the AY 2014-15, the provision for bad and doubtful debts of the assessee was increased from 14 crores to 17 crores and such amounts were duly accounted for in the books of the assessee. Nothing is emanated from such observation that the assessee had claimed any deduction under the provisions of Section 36(1)(viia) for an amount which is not recorded in the books of accounts. Considering such facts, the contentions of the assessee that similar deduction was allowed by Ld. AO in the ensuing years is found to be under false impression and contrary to the facts. It is also transpired from the submissions of the Ld. AR that as per the provisions of Companies Act, the Balance Sheet should ensure full disclosure for reserves and provisions. Regarding a particular bank, it is also noted that the share holders and other employees have imposed pressure for greater transparency, it is further stated that secret reserve accounting would mislead financial reports, users and precipitate economic efficiencies which were not in the common interest. Be that as it may, from the aforesaid Banking Regulations pursued before us, nothing concrete is cropped-up to support the contention of the Ld. AR that even if a provision is not made in the books of accounts by the assessee bank, its claim u/s 36(1)(viia) has to be allowed under the provisions of Income Tax Act. In view of the aforesaid finding of the tribunal in assessee s own case [ 2018 (6) TMI 1851 - ITAT RAIPUR] .in absence of any objection or contrary material or finding brought on record by either the assessee or by the revenue, we find it appropriate to remit the matter back to the file of Ld. AO to allow the deduction to the extent of actual provision for bad debts made by the assessee bank in its books of accounts for the relevant AY - Appeal of the revenue is partly allowed for statistical purposes. 2024 (6) TMI 871 Penalty u/s. 271(1)(c) - validity of notice issued - addition made towards unexplained investment U/s. 69 - HELD THAT:- As per the provisions of section 271(1)(c) of the Act, it is mandatory to mention the reason in the notice as to whether the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income. As carefully gone through the notice issued U/s. 274 r.w.s 271(1)(c), we find that this is not the case of non-striking off of the relevant limb in the penalty notice issued to the assessee. This is the case where the Ld. AO has not even mentioned the reason as to why they are invoking the penalty provisions. It is a settled law that a defect in the notice vitiates the entire proceedings. Therefore. we are of the considered view that since there is no proper notice stating whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income , we have no hesitation to come to a conclusion that since the notice itself is not valid, the penalty order passed on the basis of such invalid notice is void ab initio. Assessee appeal allowed. 2024 (6) TMI 870 Transfer Pricing adjustment - upward addition u/s. 92 in respect of specified domestic transaction of inter-unit transfer of power from the eligible undertaking u/s 80-IA to Other Manufacturing undertaking of the Appellant - TPO did not accept the TP report by holding that the comparison to sale price charged by eligible unit of the assessee with that of GEB is not correct considering the fact that functions performed, asset employed and the risk assumed by GEB is completely different from the eligible unit. The TPO further held that in the case of GEB huge distribution cost are involved whereas in assessee's case no such cost are involved as the transfer is an inter-unit transfer of power. HELD THAT:- We notice that the co-ordinate bench has considered the similar issue in assessee's own case for AY 2017-18 [ 2023 (10) TMI 654 - ITAT MUMBAI] held the issue in favour of the assessee stating that the rate charged by GEB to the assessee i.e. the price at which the electricity is procured by the assessee in the open market is the right comparison as per explanation (i) to section 80IA(8) of the Act. We also notice that the coordination bench for AY 2017-18 has also held that TPL is not the correct comparison for CUP since the transaction of TPL which exclusively supplies to GEB is not an uncontrolled transaction. However the arguments of the ld DR is that if TPL is to be rejected then GEB also should be rejected since both are not un-controlled transactions and that the rate adopted in independent platform such as rates of Indian energy exchange needs to be considered. In assessee's case CUP method is applied where rate at which GEB supplies electricity to the non-eligible unit is compared with rate which the eligible unit supplies electricity. These facts being similar to the above decision of the Tribunal we are of the considered view that GEB is the right comparison for external CUP and that there is no reason to hold that rates of Indian energy exchange need to be considered in assessee's case even in case where explanation (ii) to section 8-0IA is applicable in assessee's case. Accordingly on that count also we hold that no further adjustment is necessary and that the addition done in this regard is hereby deleted. Admission of additional ground - Profits eligible for deduction u/s 80-IA in respect of transfer of steam from the 80-IA eligible undertaking ought to have been computed by taking its market value instead of cost - HELD THAT:- In the given case, the issue raised in additional ground i.e. the claim of deduction under section 80IA towards transfer of steam on the basis of market value is legal issue and that relevant facts pertaining to the same except how to determine the market value of steam are already part of the records. Whether there is any bona fide reason for raising this additional ground before the Tribunal? - The assessee in the submissions has stated that the additional ground is raised based on the decision of the Tribunal which the assessee was not aware of at the time of assessment or at the time of appellate proceeding before DRP. We are of the considered view that the assessee has a reasonable cause for not raising the issue before the lower authorities and therefore we are inclined to admit the additional ground for adjudication by placing reliance on the decisions of the Apex Court in the case of National Thermal Power Co. Ltd [ 1996 (12) TMI 7 - SUPREME COURT] and Jute Corpn. of India Ltd [ 1990 (9) TMI 6 - SUPREME COURT] On the merits of the issue, since the issue has not been examined by the lower authorities on merits, we deem it fit to remit the same to the AO for a denovo consideration. The additional evidence now submitted goes to the root of the issue of whether the market value of steam should be considered for the purpose of determining deduction under section 80IA of the Act. 2024 (6) TMI 869 Rectification u/s 254 - Determination of Compensation under BTALA [Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act] - HELD THAT:- The applicant assessee is trying to conduct a review of the order already passed without pointing out any mistake apparent from the order. The Tribunal had evaluated the facts and circumstances of the case when it originally dismissed the appeal of the assessee whether the Tribunal was on merits or otherwise while dismissing the appeal is not a matter which calls for determination in these proceedings. If the assessee is aggrieved by the merits of the Tribunal while dismissing the appeal, it is at liberty to pursue its remedy in accordance with law. The observations made by us in this order are, therefore, findings to our decision on the exercise of jurisdiction under section 254(2) of the Act of the Tribunal. The case law relied upon in CIT v/s D.P. Sandu Bros. Chembur Pvt. Ltd, [ 2005 (1) TMI 13 - SUPREME COURT] which laid down that the tenancy right is a capital asset and its surrender would attract section 45 and the gains would be assessable under the head Capital Gains . In our humble understanding the same is unconnected to the present case. It is surprising to note that even after a passage of ten years, no attempt was taken to knock the doors of the High Court on substantial question of law, if any, as pleaded by the assessee. The assessee has taken numerous adjournments on some pretext or otherwise. The conduct is a clear pointer to the hollowness of the contention of the applicant assessee who is perhaps trying his luck. In the course of proceedings, the learned Counsel for the assessee even hinted that he is in the process of filing additional evidences to buttress his claim and requested our leave to this aspect. We have anxiously gone through the ITAT Rules, 1963, and found that there is no procedure so prescribed. Accordingly, his request was out rightly rejected. It seems that the prime objective of the assessee to reargue the matter all over again and to rehear the averments already made once again. It is pertinent to note that the learned Counsel for the assessee has failed to point out any manifest error in the order. In fact, even before us, he has hipped upon the same submissions earlier canvassed at all levels which were unfavourable to him. We hold that the instant M.A. filed by the applicant assessee is not maintainable and hence liable to be dismissed. 2024 (6) TMI 868 TDS u/s 195 - Disallowance of bare-boat charter hire payments u/s. 40(a)(i) - Scope of DTAA between India and Belgium - HELD THAT:- The expression use of industrial, commercial or scientific equipments has been excluded from the purview of royalty under the amended treaty. The Hon ble High Court of Madras in the case of CIT vs. Van Oord ACZ Equipment BV [ 2014 (11) TMI 605 - MADRAS HIGH COURT ] has also considered the revised definition of Royalty in Article 12 between India and Netherland and held that the appellate authority below has rightly considered Article 12(4) of the DTAA agreement between Netherlands and India and is right in holding that the amount received by the assessee for hiring out Dredgers to an Indian Company of the same name for use in Indian Ports is not taxable in India and the substantial question of law is answered against the Revenue / appellant. Therefore, considering the facts of the case, we would hold that the assessee is not liable to deduct tax on the hire charter payments made to Belgium based companies. The impugned disallowance stand deleted. The corresponding grounds raised by the assessee stands allowed. TP Adjustment in relation to payment for hire of dredgers and vessels - Selection of MAM - TPO rejected the benchmarking under CUP and aggregated the transaction for benchmarking under entity level TNMM observing that the valuation certificate issued by Bureau Veritas is not an uncontrolled transaction - HELD THAT:- The assessee has benchmarked the payment made for hire of dredgers and vessels to its AEs by adopting CUP method. However, the TPO has rejected the CUP method and adopted entity level TNMM method, proposing adjustment of Rs. 23.46 Crores. The Mumbai Tribunal in the case of Van Oord Dredging and Marine Contractor BV [ 2019 (5) TMI 1978 - ITAT MUMBAI ] on identical facts, has accepted assessee s benchmarking of international transaction of charter hire paid to AE using CUP method, based on independent valuer certificate for bench marking. The bench, on the principle of consistency, allowed the appeal. We find that similar facts exist before us. The TPO in assessee s own case for AY 2010-11 to 2012-13 has accepted the CUP method adopted by the assessee based on the valuation certificate issued by Bureau Veritas and has not made any adjustment. In view of the above, as the assessee s case is squarely covered by the decision of Hon ble ITAT, Mumbai (supra), the ALP adjustment made by AO is deleted. The aggregation approach adopted by Ld. TPO is rejected. The corresponding grounds raised by the assessee stands allowed. TP adjustment in relation to the payment of availing technical services - AR has submitted that the TPO has failed to appreciate that the assessee has agreed for consideration amounting to 3% of the project turnover and not the amended turnover - HELD THAT:- On identical facts, this issue has been decided by Tribunal against the assessee in AY 2010-11 [ 2016 (7) TMI 1699 - ITAT CHENNAI] wherein as held DRP has only computed the correct fee payable by the assessee to its AE in accordance with the rate prescribed towards the eligible turnover while as the assessee had computed the fee according to their convenience and advantage disregarding the agreement with its AE. For the irrational payment made by the assessee over and above the terms of the agreement between the assessee and its AE the DRP/TPO has revised the profit of the assessee by downward adjustment. Therefore, we do not find it necessary to interfere with the orders of the learned DRP and the learned Assessing Officer. Accordingly, this issue is decided against the assessee. Short-credit of TDS - CIT(A) has not given any direction and hence, the grievance of the assessee. In this regard, we direct Ld. AO to verify the claim of TDS and allow the credit in accordance with law. The corresponding grounds of appeal stand allowed for statistical purposes. 2024 (6) TMI 867 Disallowance of deduction u/s 11(2) - filing of Form No. 10 manually - delayed filing of Form 10 electronically (i.e. online) - HELD THAT:- The Bench noted that the adjustment made u/s 143(1) by A.O at CPC resulting in an addition in the ROI of Rs. 43,911/- only on a technical flaw, particularly in view of the facts that the statutory provisions requiring filing of Form10 etc. online along with the ROI only came into being on and from this A.Y. 2016-17. Thus this new provision was not in knowledge of the assessee, resulting in filing of Form No. 10 manually in time prescribed u/s 139(1) before Territorial Jurisdictional A.O. The same was filed on 21-04-2016. This fact has not been disputed by the ld. DR thus, even the CBDT issued a direction to condone the delay for the Asst. Years 2016-17, 2017-18 2018-19 and to accept Forms 9A 10 by condoning the delay, if the ROI filed on or before 31 March of the respective asst. years. In this case since the ROI was filed within time provided u/s 139(1) and Form No. 10 was also filed manually before filing of the return before the Territorial Jurisdictional A.O, therefore, the delay even if at all was caused in electronically filing the Form-10 for rectification, the same ought to have been condoned in the facts of the case. As relying on case of Unviersity of Burdwan C/o S. N. Ghosh Associates [ 2022 (11) TMI 1494 - ITAT KOLKATA] and the fact that the assessee has filed the form in manually the same is directed to be considered and the assessee is directed to upload the form if not done electronically so far, within 30 days from the receipt of this order. With this observation the appeal of the assessee is allowed. 2024 (6) TMI 866 Addition in respect of notional interest - assessee had given interest free advances to the brokers of NBOT Exchange - HELD THAT:- These advances were said to have been given in connection with the future transactions for edible oil. It is noted that, these advances had been assigned to M/s Nova Trading Pvt. Ltd. in FY 2007-08. From the audited financial statements found it is noted that these advances did not exist and stood at NIL as on 01.04.2009 and continued to remain NIL as on 31.03.2010. We therefore note that the assessee has shown that these advances in question neither existed nor were outstanding during the year under consideration. We further note that the audited book results had not been rejected by the AO nor had he invoked Section 145(3) of the Act and held the financial statements to be unreliable. On these given facts, we find merit in the Ld. CIT(A) s finding that, when there was no outstanding balance in the name of these three brokers during the year, the disallowance of notional interest in relation thereto, was erroneous. The reliance placed by the Revenue on the appellate orders passed in assessee s own case in AYs 2006-07 2007-08 are found to be factually distinguishable. In those years, the advances given to the three brokers were very much alive and outstanding in the books of the assessee and therefore the authorities were justified in enquiring into the nature and purpose of these advances and to ascertain whether any interest paid on the borrowings were attributable to such outstanding advances. In the present case before us however, the fundamental fact itself is not present viz., there is no amount outstanding as receivable from these three brokers in the books of accounts for the AY 2010-11. For the aforesaid reasons, we find that the Ld. CIT(A) had rightly held that the impugned disallowance made by the AO following the orders for AYs 2006-07 2007-08 was factually erroneous. Disallowance on account of inflated import purchases made - addition was made relying on the statements recorded under oath during the course of search and seizure action and clearly admitted by the assessee that the same were with paper companies to inflate the turnover - CIT(A) deleted addition - HELD THAT:- As assessee had entered into transaction involving high-sea sales of edible oil and its repurchase with its associate concerns. The data set out by the AO at Page 4 of his assessment order reveals that, the assessee had derived gains from the transaction of high sea sales. As noted by the AO, the imports worth Rs. 2380.09 crores had been sold for Rs. 2452.46 crores. It is thus ex- facie evident the transaction of high-sea sales resulted in gain to the assessee and not a loss, as erroneously alleged by the AO. These goods are thereafter noted to have been re-purchased at a price lower than the original import price itself, viz. Rs. 2240.09 crores. As rightly noted by the Ld. CIT(A), these facts show that the transactions had resulted losses in the group/associate companies to whom these high-sea sales were made and from whom thereafter re-purchases were done. The assessee, on the other hand, had in fact derived profits and these transactions did not result in loss or over-charging of any expense. We thus find merit in the factual finding rendered by the Ld. CIT(A) that these transactions neither resulted in any artificial loss to the assessee nor amounted to inflation of purchase and therefore there was no justification for making the impugned disallowance in the hands of the assessee. Revenue is noted to have cited the disclosure of additional income given by the Ruchi Soya Group in the course of search to justify the impugned disallowance made by the AO - As we note that the said disclosure was made in the hands of two different entities namely, M/s Spectra Realities Pvt. Ltd. and M/s Soya Marketing Pvt. Ltd. and therefore the said disclosure was of no relevance to the case of the assessee. It is noted that the Ld. CIT(A) had examined the said disclosure and found that even the issue on which the disclosure was made, was unrelated, and did not pertain to these purchase transactions of edible oil by the assessee. Moreover, unlike the above disclosure wherein the losses incurred in trading of gold commodities were found to be only on paper and thus non-genuine, it is not in dispute, in the present case, that these imports were physically made by the assessee and cleared from the custom authorities. Hence, overall, we countenance the above findings of the Ld. CIT(A) on this aspect. Statements of the two employees cited by the AO in his order - Having perused these statements, we find that these two persons had admitted to the contemporaneous fact that, apart from being employees of the assessee company, they were also directors in the group/associate companies. CIT, DR was unable to show us as to how these statements in any way suggested that the transaction of high-sea sales and re-purchase thereafter was not genuine and more particularly resulted in inflation of purchases made by the assessee. We therefore find merit in the submissions of the Ld. AR that these statements did not contain anything adverse relating to the import of edible oil and high-sea sales and hence were of no relevance to the issue before us. We hold that the finding of the AO that, there was inflation of import prices, was based on incorrect understanding of facts. Overall, it is noted that there was profit derived by the assessee and that the value of purchases recorded in the books was in fact lower and not inflated. Accordingly, the action of the Ld. CIT(A) deleting the impugned addition for these reasons is upheld. Hence, this ground of the Revenue stands dismissed. Assessee has lodged new claims for deduction, which were not made in the return of income originally filed u/s 139 - additional claim/s in the abated assessment - HELD THAT:- The assessee is entitled to lodge new claims in the abated assessments u/s 153A of the Act. As noted earlier, the provisions of the Act, which would be otherwise applicable in case of return filed under Section 139(1) of the Act, would also continue to apply in case of return filed under Section 153A of the Act. Hence, ordinarily under the regular provisions, the assessee is legally permitted to raise additional claims before Appellate Authorities, which were not claimed in the return filed u/s 139 of the Act. For this, gainful reference may be made to the decision of Pruthvi Brokers Shareholder [ 2012 (7) TMI 158 - BOMBAY HIGH COURT] as held that an assessee is allowed to raise additional new claims before Appellate Authorities, although not claimed in the return filed u/s 139 of the Act. Having regard to the decisions of B.G. Shirke Construction Technology P Ltd. [ 2017 (3) TMI 879 - BOMBAY HIGH COURT] JSW Steel Ltd. [ 2020 (2) TMI 307 - BOMBAY HIGH COURT] the same analogy would be applicable with equal force in the proceedings u/s 153A of the Act for abated assessments as well. We accordingly hold that the assessee is entitled to raise additional claim/s in the abated assessment for AY 2010-11 in the proceedings u/s 153A of the Act. Accordingly, the Additional Ground No. 7 raised in support of the cross objections is found to be maintainable and the preliminary objection of the Revenue is rejected. Claim of export incentive received under FPS VKGUY scheme as capital receipt in computing tax liability under normal and under section 115JB - HELD YHAT:- We find merit in the claim of the Ld. AR that the subsidies received by the assessee under the Foreign Trade Policy was in the nature of capital receipt not liable to tax. Treatment of subsidies while computing book profit u/s 115JB - We find that in the case of PCIT vs Harinagar Sugar Mills Ltd. [ 2017 (1) TMI 853 - BOMBAY HIGH COURT] , has held that these subsidies, being in the nature of capital receipt, cannot be added to arrive at the book profit u/s 115JB Also we agree with the Ld. CIT DR that these details and figures now being provided by the assessee, have not been examined by the AO, and therefore the same warrants verification. The AO is accordingly directed to verify the same and accordingly quantify and exclude the subsidies which were received under the FPS and VKGUY of the Foreign Trade Policy, which has been held to be capital receipt, both while computing income under the normal provisions as well as book profit u/s 115JB of the Act. This additional ground no. 1 of the cross objections therefore stands partly allowed for statistical purpose. Disallowance u/s 14A r.w rule 8D under normal provisions and in computing book profit u/s 115JB - HELD THAT:- It is noted that in the case of M/s Nirved Traders Pvt. Ltd. [ 2019 (4) TMI 1738 - BOMBAY HIGH COURT] and HSBC Invest Direct (India) Ltd. [ 2019 (2) TMI 731 - BOMBAY HIGH COURT] has held that the disallowance u/s 14A of the Act cannot exceed the exempt income so earned by the assessee. Following the binding decisions we find merit in the assessee s plea seeking restriction of the disallowance u/s 14A to the extent of exempt income earned i.e. Rs. 62,70,016/-. The AO is accordingly directed to delete the excess disallowance made u/s 14A of the Act of Rs. 2,29,984/- while computing total income under the normal provisions. Addition of Section 14A r.w. Rule 8D, while computing book profit u/s 115JB - Following the decision of Vireet Investments Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] we hold that the disallowance made u/s 14A read with Rule 8D cannot be added to the book profit computed u/s 115JB of the Act. Hence, the disallowance u/s 14A added to the book profit u/s 115JB is directed to be deleted. Deduction of advances written off bad debts expenditure adjusted by the respondent in the Reserve Surplus in computing book profit u/ s 115JB - HELD THAT:- Assessee is entitled to seek deduction for the bad debts and advances written off from Net Profit to arrive at the book profit u/s 115JB of the Act, even though the same was not charged to the Profit and Loss Account, though disclosed in the Notes appended to the accounts. Accordingly, this additional ground of the assessee stands allowed. Claim VAT/Excise Refund/Remission received under different state scheme as capital receipt in computing tax liability under the normal provision u/s 115JB - HELD THAT:- From the facts as discussed in the foregoing, it can be safely inferred that the subsidy was granted to the assessee for setting up new unit in the States of Madhya Pradesh and West Bengal. The Hon'ble Supreme Court in the case of Chaphalkar Brothers [ 2017 (12) TMI 816 - SUPREME COURT] has held that the subsidies granted under Government Industrial Scheme to accelerate industrial development and generate employment is capital in nature. Thus we hold that the subsidy received in the form of excise duty refund and remission of sales tax/VAT was in the nature of capital receipt not liable to tax, as the object of granting subsidy was to encourage setting up new industries for industrial growth of industrially non-developed area. Treatment of these subsidies while computing book profit u/s 115JB - Since these subsidies have been held to be in the nature of capital receipt, the same cannot be added to arrive at the book profit u/s 115JB of the Act. Following the ratio laid down in the decisions of Harinagar Sugar Mills Ltd [ 2017 (1) TMI 853 - BOMBAY HIGH COURT] and Ankit Metal and Power Ltd. [ 2019 (7) TMI 878 - CALCUTTA HIGH COURT] AO is directed to exclude the subsidies received by the assessee for setting up new industries, by way of refund of excise duty and remission of VAT/sales tax, from the computation of book profit u/s 115JB of the Act. However, since the relevant facts and figures have not been examined by the lower authorities, we deem it fit to set aside this issue back to the AO for the limited purpose of verifying the details figures placed before us. The AO shall accordingly quantify and exclude the subsidies received by way of refund of excise duty and remission of VAT/sales tax under the Industrial Schemes, which have been held to be capital receipt, both while computing income under the normal provisions as well as book profit u/s 115JB - Ground partly allowed for statistical purpose. Liability to pay advance tax and interest u/s 234B 234C in case the income is held to be chargeable to tax u/s 115JB - HELD THAT:- The assessee was not liable to pay advance tax in case of MAT computed u/s 115JB of the Act, in the years prior to the judgment of the Hon ble Supreme Court in the case of Rolta India Ltd. [ 2011 (1) TMI 5 - SUPREME COURT] Admittedly, the assessment year in dispute in case of the assessee is prior to rendering of the said decision of the Hon ble Supreme Court. Hence, respectfully following the above judicial precedents (supra), the AO is directed not to levy interest u/s 234B 234C of the Act, in case the assessee is found to be assessable to MAT u/s 115JB of the Act, while giving effect to this appellate order. This ground is therefore allowed for statistical purposes. Unaccounted profits derived from trading in guar gum and guar seed in a joint venture - CIT(A) deleted addition - HELD THAT:- DR unable to show us any specific email exchange/correspondence which referred to the purported joint venture as presumed by the AO or that the transactions discussed in these emails related to trading conducted outside the books of accounts, which would lend certain credence to the theory propounded by the AO regarding the working sheet. We thus note that the Revenue was unable to bring on record any cogent evidence to substantiate their case that the working sheet, which was explained to be estimates/projections by the person from whose possession it was found, was actually a summary of transactions taken place in a joint venture between assessee and Betul Group. We countenance the findings of the Ld. CIT(A) that the entries/summary found noted in the said worksheet being without any reference to date or time period and not corroborated by any other evidence or material, was unreliable. Hence, we agree with the Ld. CIT(A) that it was not possible to drawn any legitimate inference that these notings denoted undisclosed income in the hands of the assessee. Accordingly, we see no reason to interfere with the order of the Ld. CIT(A) deleting the impugned addition made by the AO. These grounds of appeal of the Revenue are therefore dismissed. Disallowance being expend towards employee Stock Options (ESOPs) provided the employees - HELD THAT:- It is noted the issue is squarely covered in favour of the assessee by the decision of the Biocon Ltd. [ 2020 (11) TMI 779 - KARNATAKA HIGH COURT] wherein it has been held that the ESOP expenditure is allowable to the assessee under section 37(1) of the Act. It is noted that, similar view has been expressed [ 2012 (7) TMI 696 - MADRAS HIGH COURT] in the case of CIT vs. PVP Ventures Ltd. Respectfully following the same, we hold that the Ld. CIT(A) had erred in confirming the disallowance made on account of ESOP expenses and the AO is directed to delete the same. Accordingly, this ground of the assessee stands allowed. Nature of expenses - disallowance being loss on account of fluctuation in rate of exchange treating it as capital expenditure - HELD THAT:- Following the said applicable AS-11, the assessee had consistently debited the foreign exchange loss on such foreign currency loans to the Profit Loss Account upto FY 2010-11 and the same was also accepted and allowed by the Revenue. In the relevant FY 2011-12, the ICAI had modified Para 46A of AS-11 in December 2011, in terms of which the company now had an option to either debit such foreign exchange loss to the Profit Loss Account or capitalise the same to the cost of assets. The assessee, in the present case, chose the latter option. Merely because the assessee chose the later option would not alter the nature of foreign exchange loss viz., revenue in nature. It is by now trite in law that, the entries whether the assessee is entitled to a particular deduction or not depends upon the provision of law relating thereto. The existence or absence of entries in the books of account be decisive or conclusive in the matter. This legal principle has been laid down by the Hon ble Supreme Court in the case of Kedar Jute Mfg Co. Ltd. [ 1971 (8) TMI 10 - SUPREME COURT] Likewise, it is noted that, the Hon ble jurisdictional High Court also while adjudicating the nature and allowability of expenditure incurred on repairs maintenance which were capitalized to fixed assets, have held that the entries in the books of accounts was not determinative to decide whether expenditure was capital or not, but it had to be examined in light of the provisions of the law Therefore, we hold that the lower authorities had erred in disallowing the claim for deduction of foreign exchange loss and thus, the AO is directed to delete the impugned disallowance. This ground is therefore allowed. Nature of receipt - export incentive granted under foreign trade policy as focus product scheme (FPS) Vishes Krishi and Gram Udyog Yojana (VKGUV) as capital receipt in the computation of total income under the normal provisions of the Act as well as in computing the book profit u/s 115JB - HELD THAT:- Following our conclusion drawn in A.Y. 2010-11, we hold these incentives to be in the nature of capital receipt. However, as the relevant facts and figures were not placed before the AO, we deem it fit to set this issue aside for the limited purpose of verifying the details figures. The AO shall accordingly quantify and exclude the subsidies received under the FPS VKGUY Scheme of Foreign Trade Policy, which have been held to be capital receipt, both while computing income under the normal provisions as well as book profit u/s 115JB of the Act. AO shall provide an opportunity of hearing to the assessee - This additional ground is therefore partly allowed for statistical purposes. Penalty levied u/s 271(1)(c) - As we have already deleted the addition/s made on account of (i) disallowance of ESOP expenses (ii) disallowance of foreign exchange fluctuation loss and therefore the impugned penalty order passed by the AO now has no legs to stand on. Since the quantum addition/s itself has been deleted, the consequential levy of penalty is held to be unjustified. 2024 (6) TMI 865 Revision u/s 263 - main allegation of PCIT was that assessee has himself not shown in his return of income, the agricultural income earned by him, therefore, assessee is not entitled to claim deduction / exemption u/s 54B - HELD THAT:- The order of the AO can be held to be erroneous order, that is (i) if the AO s order was passed on incorrect assumption of fact; or (ii) incorrect application of law; or (iii) Assessing Officer s order is in violation of the principle of natural justice; or (iv) if the order is passed by the Assessing Officer without application of mind; (v) if the AO has not investigated the issue before him; then the order passed by the AO can be termed as erroneous order. Coming next to the second limb, which is required to be examined as to whether the actions of the AO can be termed as prejudicial to the interest of Revenue. When this aspect is examined one has to understand what is prejudicial to the interest of the revenue. The Hon ble Supreme Court in the case of Malabar Industries [ 2000 (2) TMI 10 - SUPREME COURT] held that this phrase i.e. prejudicial to the interest of the revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Their Lordship held that it has to be remembered that every loss of revenue as a consequence of an order of Assessing Officer cannot be treated as prejudicial to the interest of the revenue. When the Assessing Officer adopted one of the courses permissible in law and it has resulted in loss to the revenue, or where two views are possible and the Assessing Officer has taken one view with which the Ld.PCIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue unless the view taken by the Assessing Officer is unsustainable in law . Taking into account, the assessee`s facts, as narrated above, order passed by the assessing officer is neither erroneous nor prejudicial to the interest of revenue. We note that the AO has passed the assessment order after calling for details on the issue and after considering the reply and documents and after verification of the same and after due application of mind passed the assessment order, so it cannot be termed as erroneous and prejudicial to the interest of the revenue. So, the Ld. PCIT s finding fault, with the order of the AO is erroneous as well as prejudicial to the interest of revenue, on account of lack of inquiry, has to fail. AO made thorough enquiry by issuing various notices u/s 142(1) of the Act and assessee submitted detailed reply before the Assessing Officer. Besides, order passed by the Assessing Officer is sustainable in law. The judgments/case law relied on by ld CIT-DR for the Revenue are not applicable to the assessee`s facts. Therefore, based on these facts and circumstances, we quash the order dated 25.03.2023 passed by the ld PCIT u/s 263 of the Act. Assessee appeal allowed. 2024 (6) TMI 864 Denial of Registration u/s 12AB and 80G(5) - exparte rejection orders - assessee stated that notices were not issued to the assessee Trust - assessee submitted unconditional apologies of the statement of non-service of notice through email id of the Trust and the Trustee without properly verifying from the official email id filed the Affidavit and pleaded to withdraw the Notarized Affidavit - HELD THAT:- It is seen that the assessee Trust was registered on 10.01.2020 with the main object to promote education, medical relief, providing medical treatment to needy persons. The assessee Trust obtained provisional registration u/s. 12AB of the Act from the Ld. CIT(E) on 30.11.2022. It is thereafter the assessee filed application in Form 10AB for final registration on 15.02.2023. As stated in the Notarized Affidavit, the assessee claims that no notices were served upon him. Per contra, the department proved beyond doubt that the first notice was delivered on 11.07.2023 sent at 06:56:26 p.m. and the same delivered to the email address at 06:56:30 p.m. Similarly, second notice sent on 04.08.2023 at 09:35:51 p.m. delivered at 09:35:58 p.m. Thus it is proved the assessee s Affidavit is misleading, though deposed before a Notary Public. Section 277 of the Income Tax Act provides for false statement in verification, etc. and Section 277A of the Act provides for falsification of books of account or document, etc. Similarly Section 177 of the Indian Penal Code, 1860 deals with furnishing of false information and Section 181 of Indian Penal Code, 1860 deals with false statement on or affirmation to public servant. Thus every assessee who makes a statement before any Authority should be vigilant enough with the above provisions of law and punishment prescribed therein. Since the assessee pleaded to withdraw the above Notarized Affidavit and submitted unconditional apologies before this Tribunal and also provisional registration already granted to the assessee Trust on 10.01.2020. We deem it fit to impose a cost of Rs. 5,000/- each in the above appeals to be payable to the Prime Minister National Relief Fund account within a period of two weeks of receipt of this order. However to uphold the Principle of Natural Justice, we deem it fit to set aside the exparte rejection orders dated 21.08.2023 and 24.08.2023 passed by Ld. CIT(E) with a direction to reconsider the Registration u/s.12AB and u/s. 80G of the Act by providing one opportunity to the assessee and pass orders strictly under the provisions of law. Needless to say, the assessee should furnish all the required details as prescribed under the Act and Rules for getting the Registration under the Act. Appeals filed by the Assessee are allowed for statistical purposes. 2024 (6) TMI 863 Disallowance of Deduction u/s 80P(2)(a)(i) - interest derived from various co- operative societies/banks - HELD THAT:- It is found that the instant issue is no more res integra in light of this tribunal s recent coordinate bench s order in The Rena Sahakari Sakhar Karkhana Ltd. [ 2022 (1) TMI 419 - ITAT PUNE] wherein held though the co- operative banks pursuant to the insertion of sub-section (4) to Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but as a cooperative bank continues to be a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co-operative bank would be entitled for claim of deduction under Sec.80P(2)(d) of the Act. Thus the issue that a co-operative society would be entitled for claim of deduction under Sec. 80P(2)(d) on the interest income derived from its investments held with a co-operative bank is covered in favour of the assessee - Decided in favour of assessee. 2024 (6) TMI 862 Estimation of income - Bogus purchases - HELD THAT:- As relying on appellant for the Assessment Year 2010-11 and 2011-12 [ 2023 (3) TMI 1500 - ITAT MUMBAI] we restrict the disallowance on account of bogus purchases to 7.5% of such bogus purchases - Appeal preferred by the Assessee is partly allowed. 2024 (6) TMI 861 Addition u/s 69A - cash deposited during demonization period - AO was of the opinion that there is an abnormal increase in the sales with decrease in profitability compare to previous year, therefore, total cash deposited during the demonetization period has been treated as unexplained investment - assessee has submitted the Cash Book, Bank Accounts and its statement, Copies of Vat returns, copy of deeds, but the AO made addition arbitrary and in mechanical manner u/s 69A without rejecting the books of accounts or finding fault in the books of account of the assessee - HELD THAT:- It is specific case of the assessee that the year under consideration was the first year in operation of the assessee s business, but the Ld. AO had committed error by comparing the fictitious sales of previous year without any basis. It is observed that the assessee was maintaining cash books and also regular books of accounts, at no point of time, the AO doubted the regular books of account of the assessee and without finding any fault in the books of account of the assessee, the Ld. AO proceeded to make addition u/s 69A of the Act. When the assessee maintained and produced the books of account and the cash books before the Ld. AO by offering the explanation and by submitting the copies of VAT returns to justify the sales and corresponding receipts of cash books deposited in bank, AO without even disputing the books of account, committed an error in making addition u/s 69A therefore, the addition made by the AO is not sustainable, hence, the addition made by the AO u/s 69A of the Act which was confirmed by the CIT(A) is hereby deleted. Appeal filed by the assessee is allowed. 2024 (6) TMI 860 Reopening of assessment - unexplained cash credit u/s. 68 - HELD THAT:- From the perusal of the reasons for reopening, it was in respect of the search conducted on three entities and the verification is a must for these transactions and the statements made by the concerned directors and the accountants of the said groups. There was no other discrepancies pointed out by the assessee and therefore reopening is valid. Thus, ground no. 1 is dismissed. Addition u/s 68 - Assessee has given confirmation of bank statement of M/s. Hartron Network Ltd. as well as the intention for obtaining said loan thereby saying that the assessee invested the said amount for acquiring the shares of Kanungo Financers Ltd. the AO doubted the expenses of Kanungo Financers Ltd. but documents and details reveal it otherwise as it is an operational company. As regards, the loss return filed by the M/s. Hartrol Network Ltd., from the perusal of the bank statement and the relevant documents the said company was having sufficient balance to give the loan to the assessee at the particular period. Merely filing the loss return cannot shake the intention of loss return company as they might have reserve funds which in the present is clearly shown in the bank statement as well as its returns (Profit and Loss account). The confirmation itself was not doubted by the AO and therefore this transaction is properly explained by the assessee and section 68 will not come into picture. This ground no. 2 is allowed. Appeal of the assessee is partly allowed. 2024 (6) TMI 859 Addition u/s 69A - Cash deposits made during demonetization period - HELD THAT:- Having accepted the assessee to have been deriving business income and accepting all the deposits in the bank, except such deposits made during the demonetization period, the AO estimated the income of the assessee at 8% on gross receipts. There is no dispute as to this rate of estimation and we accept the same. But insofar as Rs. 14,09,000 AO added the same u/s 69A on the ground that such deposits are not explained, nor the money was offered to tax - we agree with the learned DR that it is a verifiable fact. Learned AR submits that an opportunity may be granted to the assessee to appear before the learned Assessing Officer and explain the receipts during the demonetization period. Therefore, set aside the impugned order and restore the issue relating to the addition of Rs. 14.09 lakhs, to the file of the AO for verification and taking a view after affording an opportunity to the assessee. Grounds are accordingly treated as allowed for statistical purposes. 2024 (6) TMI 858 Undisclosed sales - NP determination - CIT(A) restricting the addition to the net profit element in the same - contention of the Revenue was that the lCIT(A) ought to have applied 12.5% net profit rate instead of 8% - It was pointed out that during search at the residential premises of the director of the assessee-company, various incriminating material by way of WhatsApp message/images were discovered alongwith material from the mobile phone of the director of the assessee-company, thus discovered assessee had made out of books sales - HELD THAT:- Revenue has not given any basis to justify applying higher rate of net profit at 12.5%. It is basic common sense that net profit to be applied is to be at justifiable rate depending upon nature of the business and other facts. It cannot be simply an adhoc rate; there has to be a reasonable basis for applying a particular net profit rate in each case. The ld.DR has not supported his contention of applying 12.5% GP rate with any reasonable basis. The decision of Hon ble Gujarat High Court [ 2013 (10) TMI 1028 - GUJARAT HIGH COURT] has also not been pointed out to be rendered in the context identical to the activities carried out by the assessee so as to justify his stand of applying the rate held by the Hon ble High Court to be a justifiable rate in that case. Therefore, we do not find any merit in the contentions of the ld.DR that the ld.CIT(A) ought to have been applied a net profit of 12.5% in the present case. The contention of the ld.DR is, therefore rejected, and the ground raised by the Revenue is accordingly rejected. 2024 (6) TMI 857 Levy of penalty u/s 271B - Default related to Tax Audit Report u/s 44AB - Despite obtaining audit report in time, inadvertent mistake in submitting information while filing ITR - HELD THAT:-Admittedly, the appellant assessee has obtained the tax audit report as required u/s 44AB of the Act on 28.09.2011 and e-filed its e-return of income before due date on 29.09.2011 wherein inadvertently he filled wrong information while filling the columns of audit report. Tax authorities have rejected the said explanation on the reasoning that no audit was made by the appellant as required u/s 44AB and no evidence or submissions are filed whereas such audit report, duly certified by the auditor with the support of an affidavit, has been filed on record. In the affidavit, the auditor has stated the fact that he has prepared the audit report on 28.09.2011 and a copy of said letter was also provided to the bank. Appellant contended that the required audit report as prescribed u/s 44AB was duly obtained by the appellant will within the prescribed time and filed before the authorities below. Thus, it was due to inadvertent mistake occurred in respect of selection of the proper column of the ITR while filing the return of income by the office of the auditor which has been interpreted by the authorities below as if no audit report was obtained by the appellant u/s 44AB of the Act. Meaning thereby that the penalty u/s 271B was levied on wrong premises by the AO. In the present case, on identical facts the appellant assessee at the time of filing of its e-return had inadvertently filled column regarding details of audit u/s 44AB wrongly as No and therefore, in our view, the penalty u/s 271B would not be leviable - we accept the grievance of the appellant as genuine and as such the penalty levied u/s 44AB of the Act is hereby deleted. Assessee appeal allowed. 2024 (6) TMI 856 TDS u/s 194A - Delay interest is charged by the broker which has been shown as finance cost for delayed payments - HELD THAT:- We find that in this case the interest payments have been made to the broker for delayed payments of amounts due to the broker and no TDS has been deducted at source from the said interest. We note that the said interest has not been incurred by the assessee on any amount borrowed during the normal course of business and therefore, cannot be considered as interest u/s 2(28A) of the Act. In our opinion, the provision of Section 194A of the Act is applicable only to the interest on borrowed capital and not on the interest which is paid on delayed payment of purchase considerations. The case of the assessee finds support from the decision of the Coordinate Bench in the case of Harbhajan Singh [ 2017 (1) TMI 1089 - ITAT KOLKATA] wherein the similar issue has been decided in favour of the assessee - We direct the AO to delete the addition. Appeal filed by the assessee is allowed. 2024 (6) TMI 855 Validity of Reopening of assessment u/s 147 - assessment is done beyond four years - reasons to believe - HELD THAT:- Assessment is reopened entirely based on the material available on records in the form of notes to accounts for the financial year relevant to AY 2009-10. From the perusal of the assessment order passed u/s 143(3) and the details submitted before the assessing officer during the original assessment proceedings we notice that the assessee has submitted the details on capital assets, depreciation etc., before the assessing officer during the proceedings u/s 143(3) of the Act, and that the assessing officer has also verified the same while completing the assessment. It is settled law that where the assessment is sought to be reopened after the expiry of a period of four years from the end of the relevant year, the proviso to section 147 stipulates a requirement that there must be a failure on the part of the assessee to disclose fully and truly all material facts necessary. In the given case, the assessment is sought to be reopened after a period of four years and the proviso to section 147 is applicable. The Hon ble Supreme Court in the case of Kelvinator of India Ltd [ 2010 (1) TMI 11 - SUPREME COURT] has laid down that the AO has no power to review but only to reassess based on any new material that has come to his possession. In assessee s case, from the perusal of records it is clear that the assessing officer has made the additions during reassessment based on the materials which are part of assessment records which have already been verified during the original assessment u/s.143(3). It is also noticed that the assessing officer has not brought on record any new material basis which the reopening is done and that the assessing officer has used the same material as has been considered during the original assessment under section 143(3) - Assessee appeal allowed. Customs 2024 (6) TMI 854 Valuation of imported goods - goods declared as Bovine Leather Upholster Sofa - rejection of declared value under Rule 12 of the Valuation Rules - enhancement of the transaction value declared by the Appellant - HELD THAT:- It is ironic that the appellant who approached the Commissioner (Appeals) for relief from the re-assessed transaction value by the Original Authority was left worse off after having approached the Commissioner Appeals, without any notice being given for enhancing the value. The general principles is that the Commissioner (Appeals) should not travel outside the record of the lower authority and make out a case which eve Revenue did not canvas. In TROJAN CO. LTD VERSUS RM. N.N. NAGAPPA CHETTIAR [ 1953 (3) TMI 37 - SUPREME COURT] , the Hon'ble Supreme Court considered the issue as to whether relief not asked for by a party could be granted and that too without having proper pleadings. The Court held that ' It is well settled that the decision of a case cannot be based on grounds outside the pleadings of the parties and it is the case pleaded that has to be found. Without an amendment of the plaint, the Court was not entitled to grant the relief not asked for and no prayer was ever made to amend the plaint so as to incorporate in it an alternative case. ' As per Section 14 of the Customs Act, 1962 as well as Customs Valuation Rules the transaction value is required to be accepted unless there are valid reasons for rejection of such value as provided in the said Act and Rules. Basing the value of impugned goods on a circular issued by the department or on the basis of a market survey is totally against the legal provisions. It is settled law that the onus to prove that the declared price did not reflect the true transaction value is always on the Department. It is also a settled law that the Department is bound to accept the transaction value entered between the two parties unless they are able to disturb it by the application of law as set out in the Customs Act 1962 and the Rules framed there under. The impugned order is set aside - appeal allowed. 2024 (6) TMI 853 Scope for retention of penalty u/s 112 of Customs Act, 1962 once liability to confiscation has been set aside by the Tribunal - goods imported without the certifications prescribed for availing exemption under N/N. 84/1997-Cus dated 11th November 1997 as amended from time to time - HELD THAT:- It is settled law that confiscation is qua goods imported or exported while penalty is qua persons, whether natural or artificial. There is no scope under Customs Act, 1962 for separate confiscation qua persons and to be determined by disaggregation of noticees to the adjudication proceedings. The show cause notice is clear and, in no uncertain terms, alleged that the goods are liable for confiscation in accordance with the manner provided in section 111(o) of Customs Act, 1962. Penalty under section 112 of Customs Act, 1962 would follow to the extent that noticees in section 112 of Customs Act, 1962 which, therefore, implies that, only to the extent that a person was thus responsible by acts of omission or commission in contributing to the cause that lead to confiscation of the goods, penalty could be imposed. In the absence of confiscation of the goods, as determined by the Tribunal in the appeals of M/s Rashtriya Chemicals Fertilizers Ltd and M/s ICICI Bank Ltd [ 2019 (7) TMI 1987 - CESTAT MUMBAI] , penalty cannot be imposed under section 112 of Customs Act, 1962 on any person in relation to the impugned goods. Accordingly, nothing survives in the impugned order insofar as these two individuals are concerned - Appeal allowed. 2024 (6) TMI 852 Classification of imported goods - Parts for Ball Pen Tips (Blank for Ball Pen Tips) NM6 Alloy 1.60MM*7.10MM - to be classified under the sub-heading 96089990 of the Customs Tariff Act or not - CBIC (TRU) vide Circular No. 113/32/2019- GST dated October 11, 2019 - HELD THAT:- The appellant imported certain goods and declared them as 'Parts of Ball Point Pen Tips: Blank Ball Pen Tips made of NM6 alloy' classifying the same under HSN 960899990 of the First Schedule of Customs Tariff Act, 1975, chargeable to Basic Customs Duty @5% under Notification 50/2017-Cus dated 30.06.2017. For the purpose of IGST, the appellant claimed benefit of Sl. No.232 of Notification 01/2017-Cus dated 28.06.2017. As per the Sl. No. 232 of the Schedule II of the Notification No. 01/2017, the appellant claimed IGST @12% for the goods imported. On examination of the goods imported by the appellant, the officers opined that the items imported are liable to pay IGST @18% as per Sl. No.453 of the Schedule III of the Notification 01/2017. Thus, the dispute in these appeals is with respect to eligibility of Sl. No. 232 of Notification No 1/2017-IGST(Rate) to the goods imported by the appellant. It is observed that CBIC Circular No. 113/32/2019-GST dated October 11, 2019 also supports this view. The said Circular clarifies the applicability of GST on the parts and accessories suitable for use solely or principally with a medical device. By the said Circular No. 113/32/2019-GST, it was clarified that same rate of GST would be applicable on the parts and accessories suitable for use solely or principally with a medical device as the rate of GST on the medical device and such parts would not be classified under residuary entry. It is observed that the impugned goods are suitable for use solely or principally with the ball point pens only, thus, should be classifiable with ball point pens. The impugned goods are eligible for availment of IGST @12% as provided under S.No. 232 of Schedule II under the IGST Goods Rate Notification 01/2017 dated 28.06.2017 - the demand of IGST confirmed in the impugned orders is not sustainable and hence the same is set aside. Since the demand of IGST is not sustained, fine and penalty imposed in the impugned orders is also set aside. The impugned orders are set aside - appeal allowed. Service Tax 2024 (6) TMI 851 Classification of services - Business Support Services or not - KVB had collected certain charges being the cost of reimbursement received from insurance companies for the supply of infrastructure like table chair, network, electricity, telephone, etc, to the personal of M/s Bajaj Alliance and M/s Sun Life Insurance for providing insurance service - interest - penalties - extended period of limitation. Classification of services - HELD THAT:- As per section 182 of the Indian Contract Act, 1872 an 'agent' is a person employed to do any act for another, or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the 'principal' - Agency in law connotes the relation which exists where one person has an authority or capacity to create legal relations between a person occupying the position of principal, and third parties. The actions of the appellant have not been shown to create any legal relations between the principal (insurance companies) and third parties. In fact the activities of the appellant mentioned above are other than that of selling insurance policy independently on behalf of the insurance companies and are limited to providing business support to the insurance companies and are correctly classifiable under the category of Business Support Services under section 65(104c) of FA 1994. Hence their appeal must fail. Interest - HELD THAT:- Once duty is paid belatedly, interest become payable automatically. Hence the payment of interest demanded under section 75 of FA 1994 cannot be faulted. Penalties - HELD THAT:- Once the matter was within the knowledge of the department leading to the issue of an earlier SCN, the question of suppression of information with intention to evade payment of duty leading to equal penalty will not arise on the same facts, in the subsequent SCNs. Hence the penalty under section 78 of FA 1994 merits to be dropped and is so ordered - the penalty imposed under section 77 of FA 1994 alone upheld. Extended period of Limitation - HELD THAT:- The demand for duty is also restricted to the normal period, as it is found that a case of suppression of information with intention to evade duty has not been made out. The impugned orders are upheld and the appeals fail except with respect to penalties that have been modified above - appeal disposed off. 2024 (6) TMI 850 Levy of service tax - Banking and other Financial Services - amounts received from the customer for renting the service of safe deposit locker/ vault under the head locker caution deposit - HELD THAT:- It needs to be examined whether in due course the locker caution deposit is refunded in full when the service comes to an end at the time of surrender of the locker by the customer, barring the odd case when an eventuality arises to break the locker open. Or whether any part of the deposit is retained and should form a part of the rent paid on the locker, which is taxable. The matter is remanded for a decision on this factual issue. The lower authority shall follow the principles of natural justice and afford a reasonable and time bound opportunity to the appellant to place the evidence on record before passing a speaking order - matter remanded back to the Original Authority for verification. Appeal disposed off by way of remand. 2024 (6) TMI 849 Classification of services - business auxiliary service or Legal Services - it was alleged that the Appellant neither obtained registration for service tax nor filed periodical returns under the provisions of Finance Act, 1994 - time limitation - HELD THAT:- It appears that the appellant have provided Legal Consultancy service in relation to labour law therefore, it prima facie appears that the service is correctly classifiable under legal service and the appellant being a service recipient is not prima facie liable for payment of service tax and if at all the service is not classifiable under legal service the appropriate category shall be Manpower Supply Service. However, this is subject to scrutiny of agreement, invoices, other documents - Both the lower authorities have not properly appreciated the overall facts and documentary evidence. Moreover, to classify the service as Business Auxiliary service the Revenue has no basis. It is observed that both the lower authorities have discarded this claim of the appellant without properly verifying the fact. The learned Commissioner (Appeals) discarded the claim of payment of service tax by service recipient on the ground that the same is not appearing in the ST -3 returns of EIPL. It is obvious that the detail of the parties for whose transaction the service tax is paid does not reflect in ST- 3 returns. However, this can be ascertained from the back documents such as books of account, parties ledger etc. The lower authorities have not taken any pain to verify the same therefore, rejecting the claim of the appellant that the service tax has been paid by the service recipient is absolutely incorrect. As regard the finding of the Learned Commissioner (Appeals) that even though the service recipient has paid the service tax the appellant is still liable to pay the service tax being a service provider is absolutely incorrect for the reason that in respect of any service, service tax has been paid by anyone, then the liability of the same service tax does not exit. Hence, the same cannot be recovered twice - irrespective of any classification of service if on the same service tax has been paid by the service recipient to that extent the service tax demand will not survive against the appellant. The matter should go back to the Adjudicating Authority to reconsider the entire matter - Appeal allowed by way of remand. 2024 (6) TMI 848 Classification of service - Business Auxiliary Service (BAS) - income received in USD as selling commission from an entity in Japan - HELD THAT:- The role of the appellant is to render service to the Japan based service receiver, in delivering the product manufactured outside India, to the ultimate consumer in India namely Whirlpool Ltd. Delhi Bench of the Tribunal in the case of M/S INVOLUTE ENGINEERING PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX [ 2020 (12) TMI 533 - CESTAT NEW DELHI] wherein the coordinate Delhi Bench has considered a more or less similar issue and held that 'the only requirement after the amendment to Rule 3(2) of the 2005 rules is that the service recipient should be situated outside. India and consideration should be received in foreign currency. Both the conditions stand satisfied. Even otherwise, for the period prior to February 27, 2010, it has been held that no service tax could be levied. Thus, it was material as to whether the appellant was able to substantiate the quantum of services provided after February 27, 2010, and the consideration received thereon'. The interpretation of Rule 3(2) has to be drawn by the authorities below is contrary to law and the consequent demand, therefore, cannot sustain - the impugned order is set aside - appeal allowed. 2024 (6) TMI 847 Classification of services - manpower recruitment or supply agency service or not - relationship of employer and an employee between the appellant - HELD THAT:- This question has come up before Constitutional courts in the past on how to determine whether a person is an employee or not. The Supreme Court in various cases have stated that no one test of universal application can be depended upon to give the correct result. This is not an exhaustive list of tests to discern the relationship between the parties. For example, from the textbook scenario of complete control to complete independence lies a variety of circumstances involving a wide range of initiative and discretion being enjoyed by the worker - Mere reference to invoices raised or payments made, without reference to the specific provisions of a contract or working arrangement, will not be indicative of employer-employee relationship. In the light of the non-examination of the true nature of relationship between the parties a conclusion of the appellant being the employer of the workers cannot be fastened by assumptions and presumptions. Revenue has not proved its case regarding the true nature of the disputed activity provided by workmen to the appellants customers. Hence the question of examining the correctness of the extended period invoked or imposition of penalty does not arise. There are no hesitation in setting aside the impugned order - appeal allowed. 2024 (6) TMI 846 Levy of service tax - Outdoor Catering Service - interpretation of the term 'substantial and satisfying meal' - service tax exemption under N/N. 20/2004-ST and 01/2006-ST - HELD THAT:- The appellant had voluntarily registered himself under Outdoor Catering Service , under FA 1994 and was paying duty accordingly. They have after the issue of the Order in Original pertaining to their eligibility for duty exemption, raised fresh legal issues challenging the very levy of service tax on the activity rendered by them at the appellate stage and which was not taken up before the Original Authority. Due to the initial limited stand taken by the appellant, a complete or effectual adjudication of the proceedings by examining the evidence and arguments of both the sides, did not take place on merits before the Original Authority. Matter remanded back to the Original Authority for de novo adjudication - appeal allowed by way of remand. 2024 (6) TMI 845 Refund of service tax paid - refund claims were rejected on the ground that output services were not exported in accordance with the Export of Services Rules, 2005 and on the ground that nexus between input and output services was not established - Board Circular No.111/5/2009-ST dated 24.02.2009 and Board Circular No. 120/1/2010 dated 19.01.2010 - Order-in-Original beyond the scope of the show-cause notice. Whether the Order-in-Original has traversed beyond the show-cause notice? - HELD THAT:- The original authority has rightly observed that the Order-in-Original has not traversed beyond the scope of show-cause notice as apparently the essential facts required to process the refund claims were not produced and admittedly due to very high volume of transactions covering about 45,000 export invoices, equal number of input invoices and certified copies of FIRCs were not filed along with the claim and filed only along with their reply to the notice. Therefore, the order issued cannot be held as having traversed beyond the notice. Whether the appellant satisfied the conditions of Rule 5 of the Cenvat Credit Rules, 2004 read with the Export Service Rules, 2005? - HELD THAT:- In the instant case, admittedly, the services are not provided from India but are provided from their subsidiary units situated in Australia, USA and China. Even with regard to the payments, the Commissioner (Appeals) has observed that the remittances for the output services that were rendered by establishments situated outside India, remittance instructions for depositing in Bank of America, Chicago and the Deutsche Bank Amsterdam, which has not been disputed by the appellants. Therefore, having not satisfied the conditions laid down in the Export of Service Rules, 2005, the appellants cannot claim that they have exported the services for the period October 2008 to June 2009. Correlation between the inputs and output services - Board vide Circular dated 19.1.2019 - HELD THAT:- The Board vide Circular dated 19.1.2019 suggested that in Budget 2009, the scheme was simplified by making a self-certification whereunder an Exporter or its Chartered Accountant is required to certify the invoices about correlation and the nexus between the inputs/input services and the exports. The Board had directed to be liberal and accept the correlation as certified by the Chartered Accountant as above even in cases of Rule 5 refund claims. The question of correlation arises only when the accumulation of input credit is on account of export of services. In the instant case, since the services rendered by the appellant cannot be considered as export of services, the question of correlation becomes immaterial. The question of denying the benefit does not arise. For the claims July 2009 to December 2009, the Export of Service Rules was amended with effect from 27.2.2010 where clause (a) of Rule 3 (2) of Export of Service Rules, 2005 was omitted, which categorically stated such services provided from India and used outside India. The impugned order is upheld and the appeals are rejected. 2024 (6) TMI 844 Demand of differential service tax - change in rate of tax unless and until the work order is complete - appellant had assessed their Service Tax liability at the rate of 2% of the cost value as against 4% in view of the revised rate of duty vide N/N. 07/2008-S.T. dated 01.03.2008 - HELD THAT:- The appellant has opted in advance for payment of Service Tax under Rule 3 of the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 and as per the said Rules, if an assessee opts to pay Service Tax under the Composition Scheme, then the assessee has to intimate the Department in advance for opting the same and the said option cannot be withdrawn before completion of the said works contract. The same position also applies to the Revenue. During the impugned period, unless and until the works contract is completed, the rate of tax cannot be changed, as held by the Hon ble High Court of Calcutta in the case of LARSEN TOUBRO LTD. VERSUS ASSISTANT COMMISSIONER OF SERVICE TAX ORS. [ 2016 (7) TMI 1271 - CALCUTTA HIGH COURT] wherein the Hon ble High Court observed ' This Court finds substance in the submission of the petitioner that the change in a rate of tax subsequent to exercising an option under the said composite scheme cannot operate retrospectively as the rule of the game cannot be changed once it is played.' As the issue has been settled by the Hon ble Calcutta High Court by holding that unless and until the work order is complete, the rate of Service Tax cannot be changed, the appellant has correctly opted to pay Service Tax at the rate of 2% during the impugned period. There are no merit in the impugned orders passed by the authorities below and hence, the same is set aside - appeal allowed. Central Excise 2024 (6) TMI 843 Valuation - excess freight collected as compared to the actual freight paid to the transporter is includable in the assessable value of the excisable goods or not - HELD THAT:- The identical issue has been considered in catena of judgments, particularly based on the Hon ble Supreme Court Judgment in the case of Baroda Electric Meter Ltd [ 1997 (7) TMI 126 - SC ORDER] where it was held that ' The Tribunal accepted the position that equalised freight was charged by the appellant from everyone, but proceeded to say that even though freight cannot be a part of the assessable value that wherever freight actually paid was less than the amount collected by way of freight and transportation charges the difference was appropriated by the appellant and, therefore, the same would be a part of the assessable value.' The excess freight recovered by the appellant from the customer as compared to the actual freight on account of transportation shall not include in the assessable value for the purpose valuation of excisable goods. The impugned order is set aside - Appeal allowed. 2024 (6) TMI 842 Denial of CENVAT Credit - levy of penalty - Clandestine Removal - physical shortage of huge quantity of the raw materials than the actual quantity of recorded stocks - onus to prove - cross-examination of witnesse - admissibility of evidences. Clandestine Removal - physical shortage of huge quantity of the raw materials than the actual quantity of recorded stocks - HELD THAT:- The reasons for shortage has been explained by the appellant but no verification was conducted by the department to find out the actual true. It is noticed that only one theft event has been detected by the appellant on 02.10.2011 and the same was reported to the local police - In the present matter department merely assumed that the said shortage was due to theft. Further it is also found that there is no other corroborative evidence to establish that the shortage was on account of short-receipt of raw material. In that circumstances, we hold that the investigation was conducted by the Revenue is deficient and incomplete. In that circumstances, the charge of shortage of inputs stands disproved. CENVAT Credit - HELD THAT:- There is no evidence, that the shortage of inputs are due to diversion of inputs or theft of the inputs or clandestine clearances of inputs. When there is no finding that the inputs on which credit has been taken were clandestinely removed/ diverted what remains is improper accounting of the inputs. For improper accounting the cenvat credit cannot be demanded. In these circumstances, there is no evidence to sustain a finding that this is a case of irregular or incorrect taking or utilisation of credit. In such a situation, no cenvat demand is sustainable under Rule 14 of Cenvat Credit Rules, 2004. Admissibility of evidences - HELD THAT:- Statements recorded during investigation in the present matter, whose makers are not examination-in-chief before the adjudicating authority, would have to be eschewed from evidence, and it will not be permissible for Ld. Adjudicating Authority to rely on the said evidences. Therefore, none of the said statements were admissible evidence in the present case - it is not found that the impugned order to be sustainable. The impugned order is set aside - appeal allowed. 2024 (6) TMI 841 CENVAT Credit - input service - C F Agent service - denial also on the ground of discrepancy in documents under Rule 9. CENVAT Credit - input service - C F Agent service - place of removal - HELD THAT:- In the case of C F Agent service, it is very much covered under definition of Rule 2(l) of Cenvat Credit Rules, 2004 even, before and after amendment of 11.07.2014. Therefore, the credit during the period involved in the present case cannot be denied on the ground that such service was used beyond the place of removal - credit allowed. CENVAT Credit - denial also on the ground of discrepancy in documents under Rule 9 - HELD THAT:- As per the claim of the appellant, they have availed Cenvat Credit on the input service distributors invoice. They have also given a statement showing such invoices, if this be so than the discrepancy in the debit note will not affect the entitlement of Cenvat Credit on ISD invoices to the appellant. However, it appears that the Adjudicating Authority has not verified the ISD invoices and assumed that Cenvat credit was availed on the debit note. As regard the discrepancy in the debit note, the same is not relevant at the end of the appellant. If there is any discrepancy it is the jurisdictional Officer of the input service distributor to take necessary action against the head office of the appellant i.e. input service distributor - this availment of Cenvat Credit on ISD invoices and correctness thereof needs to be verified by the Adjudicating Authority. Appeal allowed in part and part matter on remand. Indian Laws 2024 (6) TMI 840 Dishonour of Cheque - insufficiency of funds - presumption under Sections 118 and 139 of the N.I. Act - discharge of legally enforceable debt or not - failure to pay back the amount within 15 days of receipt of the demand notice - HELD THAT:- The learned trial court had found that the accused/petitioner had issued cheque No. 254228, dated 12.09.2009, drawn on UCO Bank, Silchar Branch, Cachar, for an amount of Rs. 5,00,000/- to the complainant/respondent No. 1 in discharge of his liability. The learned court below had also drawn presumption in favour of the holder of the cheque in due course, in view of the provision of Sections 118 and 139 of the N.I. Act. It is to be noted here that Section 118 of the N.I. Act lays down that until the contrary is proved, it shall be presumed that every Negotiable Instrument was made or drawn for consideration. Section 139 of the N.I. Act contemplated that unless the contrary is proved, it shall be presumed that the holder of the cheque received the cheque of the nature referred to in Section 138 of the N.I. Act for the discharge, in whole or part of any debt or liability. Admittedly, the petitioner had not lodged any information to Police about losing of his cheque. Such a plea was also not taken in his statement under Section 313 of the Cr.P.C. He had also not adduced any evidence in support of claim of the cheque being lost. On these counts a reasonable doubt arises about the veracity of the claim of the petitioner and as such the learned trial court and also the learned first appellate court had rightly disbelieved the version of the petitioner. In the instant case, the petitioner had not disputed the cheque in question and his signature thereon and as such, the statutory presumption under Sections 118 and 139 of the N.I. Act is very much available in all its plenitude and amplitude. The petitioner had failed to rebut such a presumption. Neither he appeared in the witness box to adduce evidence to rebut the statutory presumption, nor could he show any material available on the record, to rebut the presumption. This revision petition devoid of merit and accordingly, the same stands dismissed. 2024 (6) TMI 839 Seeking a direction to the respondents to provide copies of the documents that was seized from the premises of petitioner - seizure order - HELD THAT:- The petition is disposed of directing the respondents to dispose of the representation dated 11.05.2024 of the petitioner in accordance with law within a period of two weeks. Petition disposed off. 2024 (6) TMI 838 Maintainability of petition - efficacious remedy of appeal - Appointment of an arbitrator as envisaged under Section 18(2)a of the Credit Information Companies (Regulation) Act, 2005 - ds to non updation of credit information by the second respondent for which remedy has been provided under Section 21(3) of the Act and Rule 22 of its Rules, 2006 - HELD THAT:- The dispute between the borrower and the credit institution are not covered under Section 18 of the Act. Such grievance is specifically covered under Section 21 (3) of the Act which mandates credit institutions / credit information company, as the case may be, to take appropriate steps to update the credit information within 30 days after being requested to do so. However, if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by the Hon'ble Supreme Court of India not to operate as a bar in at least three contingencies i.e. where the writ petition has been filed for the enforcement of any of the fundamental rights or where there has been a violation of principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. The case on hand does not fall under any of the category to entertain the writ petition under Article 226 of the Constitution of India. Therefore, this writ petition is not maintainable - Though Debt Recovery Tribunal granted interim order on condition to pay 25% of the demand amount, the said interim order was not complied with and auction was concluded in respect of four properties and realised a sum of Rs. 216.50 lakhs - the petitioner was declared as wilful defaulter. The direction sought for in this writ petition cannot be granted and the writ petition itself is devoid of merits and liable to be dismissed - Petition dismissed. 2024 (6) TMI 837 Willful defaulters - Declaration of loan account as fraud - It is the petitioners case that without issuing any notice to them and without giving an opportunity of hearing, petitioner no. 1 s loan account has been declared to be a fraud account under the RBI s Master Directions on Fraud - HELD THAT:- It is not disputed that the fraud declaration is issued without giving an opportunity of hearing to the petitioners. Respondents were unable to place on record any document to indicate that any show cause notice with regard to the declaration of fraud was served upon the petitioners and that the copy of the fraud declaration was intimated to the petitioners. So far as the fraud declaration is concerned, the same is governed by RBI s Master Directions on Fraud. The willful defaulter orders are issued under the RBI s Master Circular. Though show cause notice was issued and a personal hearing was given to the petitioners before issuing the willful defaulter orders, a perusal of the show cause notice indicates that except for calling upon the petitioners to explain the allegations made in the show cause notice, no material was supplied to the petitioners indicating as to on what basis the respondent bank arrived at a prima facie opinion that petitioners are willful defaulters. A perusal of the allegations in the show cause notice and the observations made by WDIC and the review committee indicates that the grounds accepted by WDIC and the review committee does not form part of the allegations in the show cause notice. Thus, the petitioners are justified in making a grievance that respondent bank has not followed the basic principles of natural justice before declaring the petitioners as willful defaulters - It is a matter of record that the prima facie view taken by the bank in the show cause notice was not supported by any material supplied to the petitioners. Thus, the petitioners accused of being willful defaulters were unable to discharge their burden to prove their innocence. The orders declaring the petitioners as willful defaulters results into serious civil consequences. Hence, the bank is under obligation to provide all the material relied upon to form prima facie opinion for calling upon the noticee to issue show cause. Thus, the orders passed in both petitions, declaring the petitioners as willful defaulters, suffer from a breach of principles of natural justice and thus are arbitrary, which deserve to be quashed and set aside. Orders passed in the case of Immense Packaging Private Limited and Govinda Industries Private Limited, declaring the petitioners as willful defaulters, are quashed and set aside - fraud declarations declaring the account of Immense Packaging Private Limited and Govinda Industries Private Limited are quashed and set aside. Petition allowed in part.
← Older Newer →

Quick Updates:

What's New:
Latest Case Laws

What's New:
Latest Notifications

What's New:
Latest Circulars

N: Seeks to impose provisional anti-dumping duty on imports of ‘Telescopi...

N: Seeks to impose provisional anti-dumping duty on imports of ‘Easy open...

N: Seeks to impose provisional anti-dumping duty on imports of ‘alloy ste...

F: Auto populated ITC in Annual Return colmn 8A

N: Seeks to impose provisional anti-dumping duty on imports of Poly Vinyl...

H: Tax circular clarifies overseas ESOP/ESPP/RSU taxability for Indian em...

H: The Circular explains how suppliers can exclude discounts from taxable...

H: Government clarifies input tax credit treatment for life insurance pre...

H: Time limit for claiming input tax credit on supplies from unregistered...

F: Detailed information of 5 Years

H: A new circular clarifies valuation of imported services from related p...

H: Telecom spectrum services! Pay tax on deferred payments. Installment p...

H: Insurance companies don't pay GST on salvage if it's insured's propert...

H: New guidance clarifies that for goods sold to unregistered persons, th...

H: New guidelines clarify GST rules for warranty cases, no GST on replace...

H: New guidelines on tax for road construction services under HAM model: ...

H: Circular clarifies no denial of tax credit for ducts & manholes in OFC...

H: CBIC clarifies special procedure for manufacturers of certain goods un...

H: The circular clarifies various receipts from loans between related par...

H: New guidance clarifies tax rules for banks offering custodial services...

H: New limits set for filing appeals in tax cases to reduce litigation. F...

N: Amendments in the Notification No. 30/2023-State Tax, dated 29.12.2023.

N: SECURITIES AND EXCHANGE BOARD OF INDIA (FOREIGN PORTFOLIO INVESTORS) (...

A: RECOMMENDATIONS OF THE 53RD MEETING OF GST COUNCIL

A: A Guide to Tax Benefits of a Hindu Undivided Family (HUF)

A: Big Relief to GST Taxpayers by relaxing condition of Section 16(4)

A: Provisional attachment under GST ceases to have effect after the perio...

A: CA Certificate not required to claim refund of unutilized ITC

A: SECTION 9 APPLICATION IS NOT MAINTAINABLE IN THE ABSENCE OF STRICT PRO...

A: Capital gains – asset must be a capital asset at the time of sale – a ...

↑Top

Newsletter: Where Service Meets Reader Approval.

TMI Tax Updates - e-Newsletter June 21, 2024

Highlights / Catch Notes

GST

The court ruled in favor of the petitioner on refund of tax credit for Spunbonded Polypropylene Bed Sheets under GST.

Petitioner's registration was cancelled for not filing returns under Section 39 of the CGST Act. Appeal dismissed due to time limitation. Court orders to permit petitioner to resume business.

Adjudication order set aside due to discrepancy in ITC claims. Circular applies for 2017-18. Matter remitted for fresh consideration.

Court quashes assessment order due to disparity in GST returns. Petitioner agrees to pay 10% of disputed tax demand for remand.

Income Tax

HC affirms the order where Tribunal rejected blanket stay on tax recovery, required Rs. 230 crores payment & corporate guarantee. No stay for high-pitched assessment.

ITAT ruled assessment u/s 153A invalid as based on third-party material, required under u/s 153C. No incriminating material found, additions not valid.

The appeal filed in the wrong place. Address of assessee always in Kolkata. Revenue Appeal dismissed. File in right place next time.

High Court ruled against condoning delay in filing revision application u/s 264. Fairness in taxation outweighed by delay. Unfair advantage denied to taxpayer.

Capital gain rules clarified by ITAT: Section 50C doesn't apply to leasehold rights in land. Deeming provision only for land/building

Disallowance of foreign tax credit due to late filing of Form 67. Tribunal allows credit following legal precedent.

ITAT says corporate guarantee to AE is not a financial service by assessee. No profit shifting or burden. Interest adjustment on AEs' receivables unjustified.

ITAT ruled in favor of the taxpayer, allowing depreciation claimed on software & network equipment purchases.

Income from derivatives transaction considered under presumptive taxation u/s 44AD. AO failed to justify adding 50% profit rate. Appeal allowed.

Assessee, a Singapore company, not liable to pay tax in India on shipping income under India-Singapore Treaty. AO directed to delete additions.

Issues regarding provision of bad debts not recorded in books of account. Rectification under sec. 154 allowed. Decision upheld by Tribunal.

Issues on transfer pricing adjustment u/s 92 resolved in favor of Appellant. Correct comparison & method accepted. Additional ground admitted for deduction u/s 80-IA for further consideration.

Appellate Tribunal decision: Applicant trying to reargue case without showing any mistake. Tribunal findings stand. No manifest error found.

ITAT ruled that hire payments to Belgium are not taxable due to DTAA. TP adjustment using CUP method allowed based on consistency. TDS credit to be verified.

ITAT: No notional interest disallowance as no advances existed during AY 2010-11. CIT(A)'s deletion of inflated import purchases upheld. New claims allowed in abated assessment.

Assessing Officer's order not erroneous or prejudicial to revenue. Allegation of Lack of inquiry by LD PCIT fails. Order quashed.

Undisclosed sales issue: Tribunal rejects Revenue's request for higher profit rate, stresses need for reasonable basis.

Tax penalty under section 271B deleted by Appellate Tribunal due to genuine inadvertent mistake in filing tax audit report on time.

Interest paid for delayed payments to broker, not subject to TDS u/s 194A. Decision in favor of assessee.

Assessment reopened after 4 years based on same old info. No new material found. Assessee appeal allowed.

Customs

CESTAT ruled in favor of the appellant regarding valuation of imported Bovine Leather Upholster Sofa. Declared value upheld.

CESTAT ruled that if goods aren't liable for confiscation under Customs Act 1962, penalty can't be imposed under u/s 112.

CESTAT decided: Imported goods, parts for Ball Pen Tips, classified under specific heading. IGST @12% applicable. CBIC Circular supports decision.

DGFT

Export of Non-Basmati White Rice to Malawi & Zimbabwe via NCEL approved. Quantity: 1,000 MT each country.

Indian Laws

Court upholds presumption u/s 118 & 139 of N.I. Act in dishonored cheque case. Accused failed to rebut statutory presumption. Revision dismissed.

Willful defaulters wrongly declared without notice or hearing, violating RBI rules. Orders quashed for lack of natural justice.

Service Tax

CESTAT ruled appellant provided Legal Consultancy service, not Business Auxiliary Service. Service recipient not liable for service tax.

Refund claims for service tax were rejected due to lack of export compliance and nexus between input and output services. Show-cause and order valid. No benefit for non-exported services.

Articles

Notifications

DGFT

Circulars / Instructions / Orders

News

Case Laws:

GST

Income Tax

Customs

Service Tax

Central Excise

Indian Laws

Quick Updates:

TMI Tax Updates - e-Newsletter
June 21, 2024