Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
June 24, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Securities / SEBI
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Income from house property - ALV of property - amounts received under the maintenance agreement - There are certain services provided by the assessee which are common for tenants and non-tenants and have nothing to do with the letting out activity like cleaning and housekeeping etc., and such services could be secured by the occupants of the premises even by the third parties and, therefore, merely because they are provided by the land lord alone, it cannot be said that they are part of letting out activity - AO directed to adopt the annual value of the premises as shown by the assessee and compute the income from house property - AT
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Estimation of profit - addition of receipts pertaining to contract receipts not shown in the total turnover and cash deposits into SBI Bank account - Department must act judiciously, while making estimated addition and must be guided by judicial consideration and by rule of justice, equity and good conscience. And also that there must be honest and fair estimate of the proper figure of assessment, for which consideration of local knowledge and repute, besides the previous returns an assessment of the assessee concerned, and all other matters must be taken into account for fair and proper estimate which of course, would fall in the category of guesswork, but a honest guesswork. - AT
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Computation of profit u/s 115JB - scope of MAT provisions - inclusion/ exclusion of profits of sick industrial company -Such positive Book-Profits start arising to the assessee only from year ending 31.03.2010 after it become non-sick company and accordingly, the adjustment of brought forward business losses or depreciation would start from that year only. - the assessee has correctly adjusted the brought forward losses and depreciation as tabulated above and lower authorities are not justified in disturbing the same. - AT
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Agricultural income or not - Since no agricultural income has been shown by assessee’s husband in this year, the entire income has been considered as ‘income from other sources’ which run contrary to the findings of Ld. CIT(A) that the assessee was in possession of land and it earned agricultural income out of the same. Simply because the assessee’s husband did not offer any agricultural income during the year, the assessee’s income could not be taken to be nil. Therefore, this addition has no legs to stand. - AT
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Addition u/s 68 - unexplained deposits in bank account - The assessing officer has made the addition simply because the assessee failed to produce the lender. Merely because the assessee failed to produce the lender, cannot be the ground for disbelieving the transaction. The Ld.CIT(A), on the aforesaid facts, discussed, has rightly deleted the addition - AT
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Addition u/s 69 - loss on the sale of shares of Swarsarita Gems Limited - Year of assessment the AO has determined the income under the provisions of section 69 with respect to the transactions carried out by the assessee in the earlier year and not in the year under consideration. The act of the revenue authorities is unwarranted under the provisions of law. - Additions deleted - AT
Customs
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Demand of amount over and above the amount towards cost recovery charges for deputing officers of the customs in the petitioner’s Inland Container Depot (ICD) - unless there is an appropriate amendment to the provisions and the Customs Act,1962 and the Rules made thereunder which fall within the four corners of Part XIV of the Constitution of India Cost Recovery Charges equivalent to the Salaries packs paid to such officials of the Customs Department cannot be justified. - HC
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100% EOU - De-bonding - payment of duty on capital goods imported without payment of duty - Wrongful application of rates/period of depreciation - s per the Tribunal’s clear observation, the adjudicating authority is bound to allow the depreciation upto the date of payment of duty. As per the submission made by the Appellant that if the depreciation is considered upto the date of payment then duty comes to Nil. There is no rebuttal to this fact. Hence the demand is not sustainable. - AT
Indian Laws
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Dishonor of Cheque - complaint was dismissed without taking cognizance - The complaint has been axed even before it was numbered and taking on file. In the opinion of this court, the Trial Court has not exercised its discretion judicially and fairly the order passed misconstruing the scope of Section 256 is illegal and the impugned order is liable to be set aside and accordingly, it is set aside. This court is also of the view that normally, when an order is passed under Section 256 Cr.P.C., only an Appeal will lie. Now, that, an illegal order has been passed even prior to taking of cognizance, the impugned order is set aside invoking the inherent powers of this court under Section 482 Cr.P.C. - HC
IBC
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Auction purchaser - Seeking refunds of certain amount which have deposited under protest for discharge the contractual obligation - Merely because the petitioner is a bonafide auction purchaser who had purchased assets Corporate Debtor through auction/bidding so conducted by orders of NCLT, will not absolve it from paying arrears of lease rental and interest thereon. - The Insolvency Bankruptcy Code- 2016 grants limited protection to the petitioner (auction purchaser) while allowing it to step into the shoes of the Corporate Debtor but in order to the lessee of the principle lessor (GNIDA) the petitioner has to honor the commitments and discharge its contractual obligation as embodied in the lease deeds, Transfer Memorandum and Sale Certificate. - HC
SEBI
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Contravention of provisions of the SEBI Act - Liability of directors in alleged offence - the accused petitioners were fully aware and had knowledge about the activity of the company and also the contraventions of law made by it. The onus therefore shifts upon the petitioners under proviso to section 27(1) of SEBI Act that they had no knowledge about the contravention of the provisions of law committed by the Company in mobilizing such huge amount of funds from public shares. - Since the petitioners were adequately notified before the enquiry proceedings were held by the Whole Time Member of SEBI and that they did not comply the order thereafter, learned Judge Special Court, has committed no error in holding that there is a prima facie case against the petitioners to constitute charge against them and thereby the prayer for discharge was rejected. - HC
Service Tax
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Failure to deposit the amount under SVLDRS (Sabka Vishwas (Legacy Dispute Resolution) Scheme) - The application of the petitioner under the Scheme has to be considered within the four corners of the Scheme and as such discounted tax alleged above sought to be deposited by the petitioner after last date cannot be accepted and, therefore, Revenue was correct in denying relief under the Scheme to the petitioner. - HC
Central Excise
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Levy of penalty - the penalty under Section 26 is inextricably linked to the confiscation of goods as long as there is no confiscation of the goods ordered that there cannot be a case for imposition of penalty under Rule 26. Therefore, it is found that the penalty under Rule 26 cannot be sustained either on the appellant or on the Managing Director of the appellant company. - AT
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Invocation of Extended Period of Limitation - though the department was informed as early as February 2001 took note of the ineligibility of the Notification in June 2003 by which the time limit prescribed for issuance of show cause notice for duty not paid not levied as already expired. - The department to cover up their inaction immediately after the submission of the said letter by the Appellants have taken recourse to invocation of extended period. We find that this is not legal and proper. No material evidence has been suppressed by the Appellants with intent to evade payment of applicable duty. - AT
VAT
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Determination of taxable turnover presuming sales - As far as the present case is concerned again, the Assessee cannot be expected to negatively prove that there was no purchase suppression. The Assessee in fact placed materials to show that the transaction was a loan transaction. If the Department was to doubt it, it had the onus then shifted to the Department to show that there was in fact the transaction which mimicked purchase suppression. With the Department not having discharged the onus, the authorities below including the Tribunal, the ACST and the STO were in error in proceeding on a presumption that it was a case of purchase suppression. - HC
Case Laws:
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GST
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2022 (6) TMI 1026
Seeking grant of Regular Bail - second complaint on identical allegations - It is contended that immediately after the petitioner secured bail pursuant to the order dated 18.05.2021, the present case was registered against her and she was again arrested on 18.05.2021 and is in custody till today - HELD THAT:- Admittedly, the petitioner is in custody in this case since 09.12.2020 and though the petitioner had secured bail on 18.05.2021 on a complaint containing identical allegations, the said benefit has been denied by filing a second complaint containing the same allegations. The petitioner is ordered to be released on regular bail subject to furnishing bail bonds in the sum of Rs.10,00,000/- with one surety in the like amount to the satisfaction of the learned Illaqa Magistrate/Duty Magistrate with the conditions imposed - petition allowed.
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Income Tax
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2022 (6) TMI 1025
Deduction u/s 80HHC - Income from storage and handling and other receipts was to form part of total turnover or not? - HELD THAT:- As from the reading of the orders of the Assessing Officer, Commissioner of Income Tax (Appeals) and the Tribunal, what emerges is that the income from storage and handling which form major component was independent of the export of leather and molasses which the Appellant undertook as an export business. Further, in the appeal the Appellant has made a statement on oath, which is not controverted that it is engaged in the business of export of leather and molasses and storage and handling of liquid cargo at major ports. Not only that nothing contrary as regard this assertion is shown, in fact, the authorities have proceeded on the basis that the storage and handling of liquid cargo at major ports was a different business of leather and molasses. That being the position, in the light of law laid down in the case of Punjab Stainless Steel [ 2014 (5) TMI 238 - SUPREME COURT] , the Appellant is entitled to succeed on second component and accordingly, the question of law framed will have to be answered in favour of the Appellant.
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2022 (6) TMI 1024
Deduction u/s 80IA - whether the income earned by the assessee in the form of refund of VAT, interest income on the FDs with the bank shall qualify for deduction u/s 80IA or not? - HELD THAT:- A perusal of the above provisions of the Act, it would show that the Parliament had employed the language that any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4), such business being hereinafter referred to as the eligible business . The expression derive had come for interpretation before the Hon ble Supreme Court in the case of Pandian Chemicals Ltd [ 2003 (4) TMI 3 - SUPREME COURT] in the context of the provisions of section 80HH. Following this interpretation cited supra, it cannot be said that the income earned by the assessee in the form of all those items cannot be said to flow directly from undertaking itself. Therefore, the income so earned does not qualify for deduction u/s 80IA of the Act. Thus, we do not find any illegality in the order of the ld. CIT(A). Thus, this ground of appeal no.1 stands dismissed. Disallowance u/s 14A - HELD THAT:- We find from the order of the CIT(A) that only contention raised before the ld. CIT(A) was that the provisions of section 14A have no application in the case of strategic investments. We further find from the order of the Assessing Officer, it was asserted vide para 15(c) that during the year under consideration the appellant had not received any exempt income and therefore, no disallowance can be made. AO without dealing with this contention applied the provisions of section 14A of the Act. In the circumstances, we are of the considered opinion that to meet the ends of justice matter requires remission to the AO with direction that if it is found on verification that no exempt income was earned from the investments made no resort to provisions of section 14A can be made keeping in view of the decision cited supra. Accordingly, this ground of appeal remitted to the file of AO for de novo consideration on merits in accordance with law after affording reasonable opportunity of being heard to the assessee. Thus, this ground of appeal no.2 stands partly allowed for statistical purposes. Reduction from the book profits the amount of eligible profits u/s 80IB - HELD THAT:- This issue raised by way of additional ground of appeal is covered against the appellant by decision of the Coordinate Bench of the Tribunal in the case of M/s. Chheda Electricals and Electronics Pvt. Ltd. [ 2022 (5) TMI 510 - ITAT PUNE] - additional ground raised by the assessee stands dismissed.
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2022 (6) TMI 1023
Addition u/s 68 - unexplained share application money as commission thereon - HELD THAT:- From the affidavits furnished by the directors of M/s. Moderate Credit Corpn. Ltd. and Sam Portfolio Pvt. Ltd., it is noticed that share application money was advanced through proper banking channel and equity shares having face value of Rs.10 each with a premium of Rs.40 were allotted to the share applicants on 31.3.2010. No adverse material has been brought on record by the departmental authorities to demonstrate that the unexplained cash of assessee was ploughed back by way of share application money. In fact, the cash transactions noted by the assessing officer in the assessment order are much prior to the impugned assessment year, hence, could not have formed the basis for addition u/s 68. A reading of the assessment order as well as the order of the first appellate authority would make it clear that no independent inquiry was conducted by them to ascertain the real nature of the transaction. Merely relying upon the statement of Shri Aseem Gupta, the additions have been made. As relevant to observe, the statement recorded from Shri Aseem Gupta on 23.11.2011 was subsequently retracted by him on 25th December 2011.That being the factual position, simply relying upon the statement of Shri Aseem Gupta, additions should not have been made. The departmental authorities have failed to bring on record any other corroborative material to demonstrate that the share application money received by assessee are in the nature of accommodation entries. As noted, in an identical nature of dispute arising in case of M/s. Sungrow Impex Pvt. Ltd. [ 2021 (3) TMI 881 - ITAT DELHI] wherein, relying upon the statement of Shri Aseem Gupta, assessing officer had added back the share application money received from Moderate Credit Corpn. Ltd., the Tribunal deleted the addition. The other decisions cited by the learned counsel for the assessee are in similar lines. Thus, after considering the overall facts and circumstances of the case and keeping in view the judicial precedents cited before us by the learned counsel for the assessee, we hold that the addition made as unexplained cash credit under Section 68 of the Act is unsustainable. Accordingly, we delete the addition. For the same reason, addition towards alleged commission paid for availing accommodation entries is also deleted. - Decided in favour of assessee.
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2022 (6) TMI 1022
Income from house property - ALV of property - amounts received under the maintenance agreement - CIT(A) upheld the contention of the assessee that the service charges constitute a separate source of income, though the income from house property taxes into its fold the letting out the tenant which includes the services like providing fans, bulbs, air conditions and lift etc. - DR submits that all the amenities now the assessee enumerates under the maintenance agreement are the factors which have a bearing on the quantum of rent and, therefore, they are relevant for fixation of the fair rent but they do not constitute distinct services from the letting out activity - HELD THAT:- There is an overlap in the services provided in the rental agreement and maintenance agreement and when a service is covered by rental agreement, even if an additional accommodation is provided by way of car parking, certainly it would be an activity covered by the income from house property only. There are certain services provided by the assessee which are common for tenants and non-tenants and have nothing to do with the letting out activity like cleaning and housekeeping etc., and such services could be secured by the occupants of the premises even by the third parties and, therefore, merely because they are provided by the land lord alone, it cannot be said that they are part of letting out activity. For the AY.2012-13, the Ld. CIT (A) directed the learned Assessing Officer to adopt the annual value of the premises as shown by the assessee and compute the income from house property accordingly by disallowing the repair and maintenance services of the premises. Having regard to this direction given in the earlier assessment year, we are of the considered opinion that for this year also the very same course could be followed. As a matter of fact, learned AR pleaded for the same during the course of arguments. Having considered the totality of circumstances, as analysed above, we are of the considered opinion that best course open in this matter is to direct the learned Assessing Officer to adopt the annual value of the premises as shown by the assessee and compute the income from house property accordingly, as was followed in this case by the Ld. CIT(A) for the AY.2012-13. We order so and accordingly allow the grounds of appeal for statistical purposes. Exemption claimed by the assessee u/s. 54EC - Conflicting decisions - HELD THAT:- Though the learned DR submitted that inasmuch as there is no reasonable nexus between the object of the provision and the need to create any classification amongst the assessees deriving long term capital gains prior to and after the months of September in any particular year, the provision cannot be read to have been creating any unreasonable classification amongst the assessees deriving long term capital gains since such classification would result in undesired discrimination, the judicial opinion of the Hon'ble Madras High Court C. JAICHANDER [ 2014 (11) TMI 54 - MADRAS HIGH COURT] is that there is ambiguity in the legislative language giving rise to the opinion that the deduction u/s. 54EC of the Act is not transaction base but assessment year base. Such situation is covered by the decision of the Hon'ble Apex Court in the case of CIT vs. Vegetable Products Ltd., [ 1973 (1) TMI 1 - SUPREME COURT] wherein it was held that If court finds that language to be ambiguous or capable of more meanings than one, then the court has to adopt that interpretation which favours the assessee. We, therefore, while respectfully following the decision of the Hon'ble Apex Court supra are inclined to allow benefit of the ambiguity to the assessee. Findings of the Ld. CIT(A) on this aspect are reversed and the addition made on this count is directed to be deleted.
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2022 (6) TMI 1021
Exemption u/s 11 - grant of registration u/s 12AA denied - Certain objects of the assessee [as mentioned in the order of Ld. CIT(E)] are commercial in nature and they are not covered under charitable purpose in terms of section 2(15) - CIT(E) has rejected the assessee s second-application on the sole reason that there is no change in the objects - Assessee stated he already omitted objectionable objects before filing second-application and therefore the reasoning given by Ld. CIT(E) is far from truth - HELD THAT:- After a careful consideration, we observe that although there were objections raised by Ld. CIT(E) on the first-application of the assessee, yet the assessee has removed those objections before filing second-application on 20.01.2020. We observe from the submission of Ld. AR, which we do not narrate again to avoid repetition, that there does not survive any of the objections raised by Ld. CIT(E). We also observe that the Ld. CIT(E) has rejected second-application of the assessee with the sole reason that there is no change in objects. Except this one reason, the Ld. CIT(E) has not mentioned any other reason to reject the second-application. In this regard, we find that the Ld. AR has successfully submitted that the objectionable objects had already been removed before filing second-application and this submission of Ld. AR has not been controverted by the Ld. DR. We observe that the rejection of second-application for grant of registration u/s 12AA of the act amounts to miscarriage of justice. Therefore, we are of the considered view that the assessee deserves registration u/s 12AA of the Act. Hence we direct the Ld. CIT(E) to grant the registration as applied for by the assessee. Assessee appeal allowed.
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2022 (6) TMI 1020
Estimation of profit - addition of receipts pertaining to contract receipts not shown in the total turnover and cash deposits into SBI Bank account - CIT-A computed the estimated addition based on gross profit ratio 12.89% (as compared to estimated net profit ratio at the rate of 8% computed by the assessing officer) - HELD THAT:- We note that Assessing Officer as well as ld. CIT(A) failed to consider the past history of net profit ratio shown by the assessee, which is very much relevant to make estimated addition.It is well settled that in estimation there is always a certain degree of guesswork. No doubt the authorities concerned should try to make an honest and fair estimate of the income and should not act totally arbitrarily. Department must act judiciously, while making estimated addition and must be guided by judicial consideration and by rule of justice, equity and good conscience. And also that there must be honest and fair estimate of the proper figure of assessment, for which consideration of local knowledge and repute, besides the previous returns an assessment of the assessee concerned, and all other matters must be taken into account for fair and proper estimate which of course, would fall in the category of guesswork, but a honest guesswork. We are of the view that estimation made by assessing officer is not based on sound reasoning in comparison with the past results shown by the assessee. We note that in AY.2009-10, the assessee s audit results shows net profit at the rate of 5.12% and for A.Y.2010-11, net profit ratio is 4.32% and for AY.2011-12 the net profit ratio is 4.99%. Therefore, if we consider the average of these three years, the average net profit comes at 4.79%. Thus, based on past three years average net profit, the addition, on turnover ought to have been made by the assessing officer at the rate of 4.79%. As total turnover of the assessee comes at Rs. Rs.3,08,25,664/-( Rs.64,23,832 + Rs.84,75,415 + Rs.1,59,26,417) on which estimation should be made at the rate of average net profit @ 4.79%. Taking into account all these facts, we are not inclined to accept the contention of the Assessing Officer in any manner to make estimated addition @ 8%, hence, the assessee`s income should be estimated @ 5% of turnover of Rs. 3,08,25,664/-, which comes to Rs.15,41,283/-. As the assessee has declared net profit on turnover at Rs. 7,86,505/- therefore, we direct the assessing officer to make addition of Rs.7,54,778/- ( Rs.15,41,283- Rs. 7,86,505). Thus, ground Nos. 1 and 2 are partly allowed. Addition in respect of 12 parties from whom the assessee borrowed small amount for business purposes - Amount borrowed from each party is between Rs.13000 to Rs. 19000/-, which is received by the assessee from friend circle to meet immediate business requirements. The ld Counsel submits that assessee paid these amounts in subsequent years, therefore the addition may be deleted. However, ld DR relied on the findings of the assessing officer. We note that assessing officer failed to bring any evidence on record to show that said amount borrowed from friends and relatives are bogus and for non-business purposes. The assessee is a small businessman and in needy hours, he borrowed money from his friends and relatives, and in subsequent years he has paid to them. We note that there are no findings of the assessing officer that it is assessee`s money which came back to the assessee in the form of cash credit. Hence, a small amount borrowed by assessee to meet the urgent business requirements should not be added in the hands of the assessee, therefore, based on this factual position the addition of Rs.2,00,000/- is hereby deleted. Reopening of assessment u/s 147 - On appeal by the department to the Supreme Court, [ 2010 (1) TMI 11 - SUPREME COURT] it was held that though the power to reopen under the amended section 147 is much wider, one needs to give a schematic interpretation to the words reason to believe failing which section 147 would give arbitrary powers to the AO to re-open assessments on the basis of mere change of opinion , which cannot be per se reason to re-open. One must also keep in mind the conceptual difference between power to review and power to re-assess. AO has no power to review; he has the power to re-assess. But re-assessment has to be based on fulfillment of certain pre-condition and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of change of opinion as an in-built test to check abuse of power by the AO. Hence, after 1.4.1989, the AO has power to re-open, provided there is tangible material to come to the conclusion that there is escapement of income from assessment. Considering, these facts and circumstances, we note that the re-assessment u/s 144 r.w.s. 147 dated 21.03.2016 was rightly quashed by the ld CIT(A). That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed.
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2022 (6) TMI 1019
Validity of Reopening of assessment u/s 147 - additions made other than the addition for which the reopening was made - as per assessee assessment was reopened for escapement of income on account of cash deposits made into bank account of State Bank of India by the assessee and whereas while completing the assessment the Assessing Officer made various disallowances of expenses other than the reason for which the assessment was reopened - HELD THAT:- A plain reading of the reasons recorded the Assessing Officer has reason to believe that the income of the assessee has escaped assessment in respect of cash deposits of Rs.68,68,705/- as they were remained unexplained. However, while completing the assessment the Assessing Officer disallowed 25% of purchases for want of bills and vouchers. The Assessing Officer also disallowed opening capital shown by the assessee in his capital account as no explanation was offered by the assessee. There is one more addition which was made by the assessee is in respect of license fee paid by the assessee for want of supporting documents. Other than these three additions there is no other addition or disallowance made by the Assessing Officer, which relates to cash deposits by the assessee made into his bank account. In other words, the Assessing Officer did not make any addition for which the assessment was reopened. Hon ble Delhi High Court in the case of Ranbaxy Laboratories Limited [ 2011 (6) TMI 4 - DELHI HIGH COURT] submits that if no addition is made for which the assessment was reopened other additions made other than the addition for which the reopening was made will not survive. Hon ble Delhi High Court considering the decision of the Hon ble Bombay High Court in the case of CIT Vs. M/s. Jet Airways (I) Limited [ 2010 (4) TMI 431 - HIGH COURT OF BOMBAY] held that if the Assessing Officer does not make any addition on the primary ground on the basis of which proceedings under Section 147 were initiated he cannot make other addition - Decided in favour of assessee.
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2022 (6) TMI 1018
Depreciation - intangible asset or not - payment made for purchase of shares of RRS mineral resources Ltd. - HELD THAT:- The issue before us is not the satisfaction of user test or the fate of the asset, which already entered into a block of assets. The issue before us is simple that whether the shares purchased by the assessee can be held to be at depreciable intangible asset or not. None of the judicial precedents cited before us up or the case of the assessee. In the result, we reverse order of learned CIT A and restore the order of the learned assessing officer disallowing depreciation on shares purchased by the assessee holding that it is not a depreciable intangible assets. Grounds no 1-3 of the appeal of revenue are allowed.
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2022 (6) TMI 1017
Disallowance of interest - disallowance shows that in the financial statement AO notice that the assessee company has given a deposit for premises which is shown Under short term loans and advances in schedule 16 of the balance sheet - HELD THAT:- The clear-cut finding on reading of the annual accounts of the assessee shows that assessee has interest free funds available with it in the form of share capital and free reserve which is a much more than the interest free advances given by the assessee to its sister concern. Therefore the presumption is always available in favour of the assessee that assessee has utilised non-interest-bearing funds for giving impugned deposit to the sister concern. The contention of the assessee is also supported by several judicial precedents, which have upheld the above proposition - we do not find any reason to uphold the orders of the lower authorities. Accordingly, ground number 1 of the appeal is allowed and the learned AO is directed to delete the disallowance of interest Disallowance on account of Dies written off - DR stated that the Dies are part of plant and machinery and therefore, any loss on account of that is a capital loss and cannot be allowed as deduction as revenue expenditure - CIT-A deleted the addition - HELD THAT:- As raw material consumption has been reduced to the extent of ₹ 21,263,638/ . This is for the reason that every year assessee is making valuation of dies at the end of the year and resultant profit or loss compared to the valuation of earlier year, the same is credited or debited to raw material consumption account the profit and loss account. At the time of preparing the computation of total income, if valuation has gone down, it is debited to the profit and loss account (raw material consumed) and in the computation of total income, it is not claimed as deduction from business income. Similarly, if there is any increase in valuation, such increase is credited to the profit and loss account (raw material consumed) and thereby showing lower amount of raw material consumed, but at the time of computation of total income such credit is removed from the profit and loss account. This is so because the valuation increase/decrease in the dies is not at all revenue expenditure. Similarly, assessee never claims it is a deduction. Lower authorities did not appreciate that difference in valuation in dies is merely rotated through profit and loss account but it did not affect the computation of total income for taxation. The confusion might have arisen because of the nomenclature given by the assessee of the particular item - such nomenclature should not have come into the way of lower authorities in determining the correct nature of treatment to be given while computing the taxable income of the assessee. In view of this, obviously for the above reasons given by us, we do not find any infirmity in the order of the learned CIT A in deleting the addition - Decided against revenue. Nature of Subsidy receipts - treating the grant received by the assessee as revenue receipt chargeable to tax against the contention of the assessee that same is a subsidy, therefore, it is a capital receipt not chargeable to tax - HELD THAT:- As relying on MSS India Pvt Ltd [ 2019 (1) TMI 1978 - ITAT PUNE] subsidy received by the assessee in the form of octroi duty refund as a capital receipt not chargeable to tax. Accordingly, we allow ground number 2 of the appeal of the assessee.
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2022 (6) TMI 1016
Levying late fee under section 234E - intimation u/s 200A - whether late fee under section 234E can be levied for F.Y. 2012-13? - Order passed under section 154 rejecting rectification application moved by assessee against intimation issued levying late filing fees charged under section 234E - HELD THAT:- It is observed from the Form No.35 (under Rule 45) that the assessee had filed appeal on 08.12.2018. The assessee has enclosed copy of the order under section 154 r.w.s 200A of the Act, dated 23.11.2018. The assessee filed appeal against the said order passed under section 154 r.w.s 200A of the Act before the ld.CIT(A) on 08.12.2018. Thus, this appeal has been filed within one month of the said order passed under section 154 r.w.s 200A of the Act. Therefore, there was no delay in filing appeal by the assessee before the ld.CIT(A). Therefore, the ld.CIT(A) has given an incorrect finding of fact. The issue involved in this case is whether late fee under section 234E can be levied for F.Y. 2012-13. This issue is covered in favour of the assessee. The ITAT Pune in the case of Medical Superintendent Rural Hospital [ 2018 (10) TMI 1587 - ITAT PUNE] We hold that the levy of late fee under section 234E of the Act for Quarter-2 of F.Y. 2012-13 is bad in law. Therefore, the Assessing Officer is directed to delete the said late fee. Accordingly, the appeal of the assessee is allowed.
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2022 (6) TMI 1015
Addition u/s 56(2)(vii)(b) - AR submitted that the case was selected for limited scrutiny, hence, the AO had no power to make addition u/s 56(2)(vii)(b) - AR moved a petition for filling additional evidence - HELD THAT:- As per Section 56(2)(vii)(b) the consideration is market value means the actual investment made by the vendee is not the amount mentioned as consideration in the sale deed but the market value mentioned by the Stamp Authorities for the purpose of Stamp Duty. Thus, when we read it in totality the AO has acted as per the directions of CBDT and has not gone beyond the reason mentioned for limited scrutiny. The CBDT Instruction no.20/2015 mentions scope of inquiry as under : iii Scope of Enquiry: Specific issue based enquiry is to be conducted only in those scrutiny cases which have been selected on the parameter(s ) of AIR/CIB/26AS data . In such cases, the Assessing Officer, shall also confine the Questionnaire only to the specific issues pertaining to AIR/CIB/26AS data. Wider scrutiny in these cases can only be conducted as per the guidelines and procedures stated in Instruction No. 7/2014. There is no dispute that the case was selected for limited scrutiny on the parameters of AIR. Therefore, as per the CBDT instruction 20/2015, the AO had power to investigate issue pertaining to AIR information. In this case, it is a fact that AIR information did mention market value of the property. Therefore, AO had rightly invoked provisions of Section 56(2)(vii)(b). AR moved a petition for filling additional evidence - AR explained that the said information had not been filed before the AO due to the subsequent developments in the Civil case of the appellant.It is also observed that there were Criminal and Civil proceedings in relations to the impugned land sale. Name of the Vendor and vendee appeared in the FIR. Ld.AR filed copies of the submission made during Civil suit and other documents related to civil suit. Ld.AR also submitted copy of the FIR. We are satisfied that there were sufficient reasons for not filling these documents before the AO. Therefore, we admit these documents as additional evidence. It is observed that these documents goes to the root of the taxability of impugned sale. It is also admitted fact that these documents were not filed before the Assessing Officer. Therefore, we set-aside the order of the Ld.AO, with a direction to do a de-nova assessment. The assessee will be at liberty to file all necessary evidence/documents. The AO will provide reasonable opportunity of hearing to the assessee. However, the Assessee will file all relevant documents at the earliest before the AO during the set aside proceedings, accordingly, the Additional Grounds No. II , III and Main Ground No s.1 2 are allowed for statistical purpose
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2022 (6) TMI 1014
Disallowing unpaid interest - bank interest charged and debited to Appellant's CC account u/s 43B - as argued the amount of interest debited to the CC account, which is a running account, represents interest recovered by the Bank and hence disallowance u/s 43B is not warranted - HELD THAT:- We direct the AO to verify whether the interest on bank liabilities claimed by assessee for the period 01.10.2005 to 31.03.2006 has not been claimed by India Cement Capital Ltd., and it pertains to the period 01.10.2005 to 31.03.2006. Similarly, the AO also can verify the service tax collected by India Cements Capital Ltd., on the assets transferred during the earlier years. In case, the assessee has not claimed this amount as deduction, the same can be disallowed u/s.43B of the Act. This can be verified by the AO. Accordingly both the disallowances u/.43B in regard to this common issue is remanded back to the file of the AO for verification. The appeal of the assessee is allowed for statistical purposes. Disallowance of bad debts written off - assessee contended that entire details including the list of bad debts were given by the assessee during assessment proceedings in regard to these bad debts. He argued that when the receivables were transferred and reflected in the books of assessee, it could not have been written off and claimed by India Cements Capital Ltd - HELD THAT:- As we noted that the CIT(A) s order is ex-parte and the claim of assessee needs verification at the level of AO. Hence, the matter is remanded back to the file of the AO.
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2022 (6) TMI 1013
Validity of assessment u/s 153C r.w.s. 153A - proof of incrementing material found in search - Disallowance of interest payment - HELD THAT:- We find that as per the provisions of Sec.153C, where AO is satisfied that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of Section 153A, if that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. As the proviso further provide that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under Section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. Therefore, applying the same to facts of the present case, Ld. AO would have jurisdiction to assess the income u/s 153C from AYs 2009-10 onwards and not before that since the relevant AY in the present case is 2015-16 as noted by us in preceding para-4. Therefore, we have no hesitation to hold that the assessment was bad-in-law and the same would have no legs to stand. We order so. Another factor to be noted is that the additions are not based on any incriminating material and therefore, this being non-abated year, the additions are necessarily to be based on certain incriminating material found by the search team that belong to the assessee. However, we find that the sole addition as made in assessment order is not based on any incriminating material. Addition of cash receipts - Appeal for AY 2012-13 - We find that impugned order take note of the fact that sale of jewellery was reflected in the return of income and the assessee had submitted cash flow statement which has been extracted in the impugned order. The sale transaction has not been disturbed by the revenue and the explanation has been rejected on mere allegation that the transaction was after-thought and self-serving. However, the said allegation has no basis and no evidence has been brought on record to disprove the transaction of the assessee. In such a case, the assessee s explanation of cash receipt was to be accepted. By deleting the impugned addition we allow the grounds thus raised by the assessee. In the result, the appeal stands partly allowed.
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2022 (6) TMI 1012
Computation of profit u/s 115JB - scope of MAT provisions - inclusion/ exclusion of profits of sick industrial company - HELD THAT:- We find the As per Explanation-1 to Sec.115JB(2), Book Profits means the profits as shown in the statement of Profit Loss Account. This amount is to be increased and reduced by specified items. One of the items that is to be reduced, as per clause-(iii), is the amount of loss brought forward or deprecation whichever is less as per Books of Accounts. For the purpose of this clause, loss does not include depreciation. Further, the provision of this clause shall not apply in case the amount of brought forward loss or depreciation is nil . Another reduction as provided by Clause (vii) profits of sick industrial company would be reduced to arrive at Book Profits - Applying the provisions of clause (vii), we find that the assessee has earned book-profits of Rs.195.59 Lacs for the year ending 31.03.2004 and book-profits of Rs.270.55 Lacs for the year ending 31.03.2006 and accordingly, these profits would be reduced while computing Book-Profits u/s 115JB - Book-Profits of these two years would be Nil. It is undisputed fact that the assessee was a sick company during both these years and was eligible to claim such deduction since sufficient documents, in that regard, has already been filed by the assessee during appellate proceedings and the same is also not under dispute. The logic of Ld. AO is that the Book-Profits of these two years, should first be adjusted by the amount of brought forward losses or depreciation as per clause (iii) and only thereafter, the profits should be reduced to nil as per Clause (vii). However, we find that this is not correct logic since profits of a sick company has specifically been excluded from the purview of Sec.115JB. The amount of brought forward business losses or depreciation would be allowable only when there is positive Book-Profits. Such positive Book-Profits start arising to the assessee only from year ending 31.03.2010 after it become non-sick company and accordingly, the adjustment of brought forward business losses or depreciation would start from that year only. The same is also supported by the fact that the assessee has accumulated losses of Rs.412 Lacs in the books of Accounts which is net-off of profits for the year ending 31.03.2004 31.03.2006. Therefore, the assessee, in our opinion, has correctly adjusted the brought forward losses and depreciation as tabulated above and lower authorities are not justified in disturbing the same. Accordingly, we direct Ld. AO to grant this adjustment as claimed by the assessee during the year. Assessee appeal allowed.
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2022 (6) TMI 1011
Assessment u/s 153A - Whether incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search? - HELD THAT:- Upon perusal of decision of Hon ble Court in CIT V/s St. Francis Clay D cor Tiles [ 2016 (6) TMI 378 - KERALA HIGH COURT] we find that the said case is factually distinguishable. In that case, the admitted facts were that the Managing Partner of the assessee had given voluntary statement to the Assessing Officer that there was undisclosed income of Rs.2.75 Crores. The admission was retracted by the Managing Partner subsequently. On the basis of these facts, it was concluded by Hon ble Court that since there was a disclosure made by giving a statement during the course of search and therefore, the Assessing Officer, by virtue of the power conferred on him under section 153A, was competent to issue notice under the said provision and require the assessee firm to furnish the returns as provided there-under. It was further held that neither under section 132 nor under section 153A, the phraseology incriminating is used by the Parliament. Therefore, any material which was unearthed during search operations or any statement made during the course of search by the assessee is a valuable piece of evidence in order to invoke the provisions of Section 153A of the Income Tax Act, 1961. In the present case, no such admission is shown to have been made by the assessee. The revenue could not place any incriminating material before us which has led to the impugned additions / disallowances. So far as the decision of Hon ble Delhi High Court in Filatex India Ltd. [ 2014 (8) TMI 387 - DELHI HIGH COURT] is concerned, we find that in that case Ld. AO, in the proceedings u/s 153A, had made several additions, relying upon the incriminating material found in the course of search. It was undisputed fact that there was incriminating material unearthed by the revenue including statement of Shri Sanjay Agrawal, GM (Marketing). It was never the case of the assessee that the initiation of proceedings u/s 153A was bad or unwarranted in law as no incriminating material was found during the search. Therefore, this decision, in our opinion, has no application to the present case before us. The impugned additions / disallowances are unsustainable in the eyes of law. We order so. The corresponding legal ground as raised by the assessee stand allowed which render other grounds merely academic in nature. Agricultural income - It is undisputed fact that the assessee is regularly earning this income since past several years. The assessee possesses agricultural land which fact has been accepted by Ld. CIT(A). The dispute is with regard to quantum of income only. CIT(A) has drawn a presumption that since the assessee s land holding is 1/4th of land holding of Shri A.Vijaykant, the income should be considered as 1/4th income as shown by him. Since no agricultural income has been shown by assessee s husband in this year, the entire income has been considered as income from other sources which run contrary to the findings of Ld. CIT(A) that the assessee was in possession of land and it earned agricultural income out of the same. Simply because the assessee s husband did not offer any agricultural income during the year, the assessee s income could not be taken to be nil. Therefore, this addition has no legs to stand. We direct Ld. AO to treat the income of Rs.7.25 Lacs as agricultural income. The ground thus raised stand allowed. Business loss - We find as no business income has been reflected by the assessee in this year and therefore, the expenditure of Rs.1.09 Lacs is to be disallowed. In other words, business loss of Rs.1.09 Lacs would not be allowable to the assessee. The salary income would be taken as Rs.1.14 Lacs as accepted by Ld. AO. The slot fees of Rs.32.44 Lacs do not emanate from the return of income filed by the assessee. No such expenditure or income has been admitted. We find that there is no basis to make this addition and therefore, the same stand deleted. The appeal stand partly allowed.
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2022 (6) TMI 1010
Assessment u/s 153C - Whether no satisfaction note was drawn and no incriminating material was found and used in the assessment order? - Disallowance u/s 14A - HELD THAT:- We find that Ld. AO has not referred to any incriminating material while making the assessment rather the return has been assessed in regular scrutiny assessment proceedings. The assessee group was searched on 19.04.2012 which falls in AY 2013-14. The provisions of Sec.153C, as stood at that point, mandate Ld. AO to determine the total income of such other person for six assessment years immediately preceding the assessment year (2013-14 in the present case) relevant to the previous year in which search is conducted or requisition is made. In other words, the assessment was to be framed u/s 153C only for AYs 2007-08 to 2012-13 and not for AY 2013-14. Therefore, we do not find any substance in the legal grounds raised by the assessee. Addition u/s 14A - We find that neither assessee nor revenue has made an attempt to draw the nexus of borrowed funds vis- -vis its usage by the assessee. Naturally, if the borrowed funds were used to make the investments in the firms from which interest was earned, the assessee was entitled to claim the interest on borrowed capital otherwise not. In case of mixed funds, a presumption could be drawn in assessee s favor that the borrowed funds were utilized to make investments. Therefore, on the given facts and circumstances of the case, we set-aside the impugned order and remit the matter back to the file of Ld. AO to ascertain the extent to which borrowed funds were utilized by the assessee to make investment in firms and adjudicate accordingly. The assessee is directed to substantiate its case. Regarding disallowance u/s 14A, the assessee is directed to substantiate that the expenditure was allowable from the income earned from partnership firm and no disallowance u/s 14A would be attracted. Needless to add that adequate opportunity of hearing shall be granted to the assessee. Assessee appeal stand partly allowed for statistical purposes.
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2022 (6) TMI 1009
Denial of claim of deduction u/s.80P(2)(a)(i) - assessee is a primary agricultural credit co-operative society - HELD THAT:- Chennai Bench of ITAT in the case of TN Co-operative State Agricultural Rural Development [ 2022 (6) TMI 770 - ITAT CHENNAI] and this issue has been dealt with after considering the recent decision of Hon ble Supreme Court in the case of The Mavilayi Service Co-operative Bank Ltd [ 2021 (1) TMI 488 - SUPREME COURT] Admittedly, the assessee is a primary agricultural credit co-operative society and is governed by Tamil Nadu Co-operative Societies Act and it is carrying out its co-operative business with its members, the claim of deduction u/s.80P(2)(a)(i) of the Act cannot be denied. Hence, we reverse the orders of lower authorities and allow this issue of all five appeals of assessee. TDS u/s 194A - Addition invoking the provisions of section 40(a)(ia) - HELD THAT:- As the issue is covered by the decision of Hon ble Madras High Court in the case of Coimbatore District Central Co-operative Bank Ltd. [ 2016 (1) TMI 370 - MADRAS HIGH COURT] , the amended provision of section 194A w.e.f. 01.06.2015, which is held as prospective, will not apply to the present case because before us the assessment year is 2009-10. Hence, this issue of assessee s appeal is allowed.
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2022 (6) TMI 1008
Penalty u/ 271(1)(c) - defective notice u/s 274 - Non specification of specific charge - as submitted Penalty order is bad in law for the reason that the Show cause notice for levy of penalty did not specify whether the said notice is for concealment of income or furnishing of inaccurate particulars - HELD THAT:- Since no specific charge was framed either in the show cause notice or in the body of penalty order, and there was failure on the part of Ld. AO to frame specific charge against the assessee, the penalty would not be sustainable in the eyes of law. By deleting the impugned penalty, we allow the appeal of assessee.
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2022 (6) TMI 1007
Levy of Penalty u/s 271(1)(c) - concealment/furnished inaccurate particular of income - HELD THAT:- As income declared by the assessee is based on entry in books of accounts/other documents pertaining to any previous year which commenced before the date of search and return of income has been filed before search but such income was not declared then, even if the assessee declared such income in the return of income filed after search, he will be deemed to have concealment/furnished inaccurate particular of income. It has to be noted that not only the appellant had not disclosed this income in his original return of income but even in the statement recorded u/s 132(4) of the Act, he had given evasive reply regarding the actual investment made in the hotel project. Therefore, at no stretch of imagination, the disclosure could be termed as voluntary. It is also to be noted that before us, she had only made a plea that the Ld. CIT(A) has already deleted the quantum addition and no penalty could be levied. However, she has not put any argument with regard to the above finding of the Ld. CIT(A). Since she has not made any argument on the above issue, and also lower authorities have not considered any deleted additions for levy of penalty, there is no merit in the argument of assessee s counsel that no penalty could be levied when addition is deleted where there is no levy of penalty on this deleted amount. In view of the above, we are of the opinion that sustaining penalty by Ld. CIT(A) is justified and reject all the grounds raised by the assessee in this appeal. Assessee argued that A.O. issued the show cause notice for levy of penalty on 24.10.2019, which was posted for hearing on 8.11.2019 and levied penalty u/s 271(1)(c) of the Act on 24.10.2019, which is opposed to law and against the natural justice - However, no evidence has been placed before us or any argument was made before us. Accordingly, this ground is rejected. AO ignored the fact that once the revised return filed u/s 153C of the Act, the original return u/s 139 of the Act abates and becomes non-est - We find that in view of judgement of Hon ble Supreme Court in the case of MAK Data Pvt. Ltd. [ 2013 (11) TMI 14 - SUPREME COURT] these ground of appeal have no merit. Assessee appeal dismissed.
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2022 (6) TMI 1006
Addition u/s 68 - unexplained deposits in bank account - HELD THAT:- After going through the cash book submitted before the Ld.CIT(A), the Ld.CIT(A) has recorded a finding of fact that assessee had sufficient cash withdrawals and deposits are made from the same. The Ld.CIT(A) has found that Rs.50 lakhs was withdrawn on 23-10-2013 which was deposited back on 24/10/2013. The Ld.CIT(A) has found that assessee has discharged his onus of proving the source of deposits made in his bank accounts. During the hearing, the learned DR could not find fault with the reconciliation / cash flow statement filed before us by the assessee which is placed at pages 55 to 68 of the paper book, and we find that the source of money deposited, which has been found fault with by the Assessing Officer, has been fully explained by the assessee. In such a scenario, we do not find any infirmity in the order passed by the Ld.CIT(A); so we confirmed the same and dismiss these grounds of appeal of the Revenue. Unexplained loans - CIT-A deleted the addition - HELD THAT:- The assessee had filed the confirmation of the party which also contains the PAN of the lender (AADPV7541E). We also note the bank statement of the lender is found placed wherein we note that the opening balance as on 14/06/2013 is shown to be 1,37,732,277/- and the transaction on 19/06/2013 and 12/07/2013 has been taken note of. The assessing officer has made the addition simply because the assessee failed to produce the lender. Merely because the assessee failed to produce the lender, cannot be the ground for disbelieving the transaction. The Ld.CIT(A), on the aforesaid facts, discussed, has rightly deleted the addition, which does not need any interference from our side. Therefore, we confirm the order of the Ld.CIT(A) and dismiss the grounds raised by the Revenue. Deemed dividend addition u/s 2(22)(e) - CIT-A deleted the addition - HELD THAT:- In the light of the aforesaid CBDT circular which was binding on the Assessing Officer as well as the department and on our factual finding that the transaction was purely commercial in nature does not attract section 2(22)(e) of the Act, therefore, we do not find any infirmity in the action of the Ld. CIT(A) in deleting the addition. Ground of the Revenue stands dismissed.
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2022 (6) TMI 1005
Rejection of books of accounts - Estimation of net profit - HELD THAT:- AO rejected the books of account of the assessee since the documents impounded clearly showed that the assessee entered into business transactions with Sky Lark Hatcheries (P) Ltd. and since the assessee did not report these transactions in the regular books of account the explanation of the assessee was rejected. The books were rejected u/s 145(3) and estimated net profit from suppressed sales at 0.45%. AO is justified in rejecting the books of account as the assessee did not reflect the correct picture of its true profits as the consignment sales were not recorded in the regular books of account. The net profit estimated by the Ld. AO @ 0.45% is on higher side. Taking the totality of facts and circumstances into consideration and the net profit percentage shown by RS Poultry and SA Poultry for the AY 2018-19 it would be fair and just to estimate the net profit from the suppressed sales at 0.25%. Thus, the AO is directed to estimate the net profit at 0.25% of the suppressed consignment sales turnover and re-compute the income for the assessment year under consideration. Grounds raised by the assessee are partly allowed.
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2022 (6) TMI 1004
Reopening of assessment u/s 147 - Reopening based on information of investigation wing - Bogus purchases - HELD THAT:- As decided in Pankaj K Choudhary others [ 2021 (10) TMI 653 - ITAT SURAT ] AO validly assumed the jurisdiction for making re-opening under section 147 on the basis of information of investigation wing Mumbai. So far as other submissions of the ld AR for the assessee that there is no live link of the reasons recorded, we find that the Hon ble Jurisdictional High Court in Peass Industrial Engineers (P) Ltd [ 2016 (8) TMI 277 - GUJARAT HIGH COURT] clearly held that when assessing officer received information from the investigation wing that two well known entry operators of the country provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, assessing officer was justified. Hence, the ground No. 1 in assessee s appeal is dismissed. Estimation of income - CIT(A) was of the view that disallowance of 12.5% of impugned purchases/bogus purchases would be reasonable to meet the end of justice - As in the present case the assessee has declared the GP @ 0.78%. It is settled law that under Income-tax, the tax authorities are not entitled to tax the entire transaction, but only the income component of the disputed transaction, to prevent the possibility of revenue leakage. Therefore, considering overall facts and circumstances of the present case, we are of the view that disallowances @ 6% of impugned purchases / disputed purchases would be sufficient to meet the possibility of revenue leakage. Appeal raised by the assessee is partly allowed.
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2022 (6) TMI 1003
Revision u/s 263 by CIT - deduction u/s 36(1)(viia) - Whether AO order does not satisfy the twin conditions erroneous and prejudicial to the interest of the revenue and hence the revision order passed by the Pr.CIT is bad in law? - HELD THAT:- The assessee has furnished the details in the course of assessment in lieu of notice issued u/s 142(1) of the Act and further the claim of the assessee has been accepted in earlier year. In case the claim was not allowed by the revenue, the assessee has filed an appeal before the Honble Tribunal and the directions are issued to the Assessing officer for allow ability of claim. We find that the A.O. though has not mentioned the specific claim allowed in respect of the bad debts in the assessment order. But the fact remains that the A.O has issued a notice u/s 142(1) of the Act on claim of bad debts and the explanations filed are demonstrated by the Ld.AR. Whereas the Pr.CIT has not considered the facts that the A.O has called for the information and the case was discussed and there cannot be any non application of mind by the A.O. We find that the A.O has considered one of the possible views based on the information and it is not necessary that the A.O should put all the discussions/observations in the assessment order. Further as per explanations (2) to sec 263 of the Act the authority has to invoke provisions only when there is no verification and enquiry conducted by the A.O. Whereas the A.O has applied his mind and verified the facts. If any query is raised in the assessment proceedings and it was responded by the assessee, mere fact that it is not dealt with by the A.O. in the order cannot implied that there is no application of mind. Hence, the Pr.CIT action cannot be acceptable as the order passed by the A.O. does not satisfy the twin conditions of erroneous and prejudicial to the interest of the revenue. Accordingly, we set aside the revision order and allow the grounds of appeal in favour of the assessee.
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2022 (6) TMI 1002
Revision u/s 263 - whether the order passed by the AO u/s 143(3) can be said to be erroneous and prejudicial to the interest of the revenue? - HELD THAT:- AO in this case had made inquiries in regard to the source of cash receipts and reasons of substantial closing cash balance held by the assessee and after considering the written submission duly supported by bank statements, audit reports, ledger accounts of debtors and explanation offered, the same was accepted by the AO on being satisfied with the submission vis- -vis explanation of the assessee. Such decision of the assessing Officer cannot be held to be erroneous simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, PCIT himself, even after initiating proceedings for revision and hearing the assessee, sub silentio on cash position as erroneous but suspected the occurrences of cash receipts merely on surmise and conjecture and without any refuting material, which is in our opinion is not permissible. Further inquiry and/or fresh determination can be directed by the PCIT only after coming to the conclusion that the earlier finding of the Ld AO was erroneous and prejudicial to the interests of the Revenue on the basis of evidential material and without doing so, he does not get the power to set aside the assessment, hence in our considered opinion, the conclusion drawn by the Ld PCIT is untenable in law. We de integro and applying the dictum form CIT Vs Gabriel India Ltd [ 1993 (4) TMI 55 - BOMBAY HIGH COURT ] are of the strong view that, the action of Ld PCIT could not be sustainable in eyes of law, ergo we find no infirmity with the 143(3) order of assessment and consequently quash the revisionary order, thus the solitary legal ground of the appellant is allowed.
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2022 (6) TMI 1001
Unexplained cash credits in bank - undisclosed income of the assessee - HELD THAT:- CIT(A) held that the credits / deposits in the bank account of the appellant are from 10 different parties transactions which have been duly verified by the AO during the remand proceedings. AO in order to verify the transactions have called for relevant documentary evidences from the parties in the form of confirmed ledger account, ITR and bank statement which have been duly submitted by all the parties. Assessing Officer has not doubted the documentary evidences submitted by the parties and the assessee. The Assessing Officer in order to verify the genuineness of the claim of the assessee has also stated to have recorded statement under oath and field enquiries of some of the parties. In addition these documents, the assessee has also submitted the purchase and sale register of the proprietorship concern along with VAT return as additional evidences. These documentary evidences submitted by the assessee have not been doubted by the Assessing Officer in his remand report neither has he pointed out any discrepancy in the same. Owing to the remand report submitted by the Assessing Officer after conducting due enquiries, the ld. CIT(A) has deleted the addition made by the AO as no discrepancies were found by the AO during the remand proceedings. In a way, the remand report has given a clean chit to the affairs of the assessee. Hence, the decision of the ld. CIT(A) which was wholly based on the remand report cannot be interfered with. Appeal of revenue dismissed.
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2022 (6) TMI 1000
Addition u/s 69 - loss on the sale of shares of Swarsarita Gems Limited - Year of assessment - Charge of income-tax - HELD THAT:- Income tax shall be charged for the previous year to which the income relates/in which income accrues. Thus the scheme of the Act provides that the income pertaining to a particular previous year shall be charged to tax in the corresponding assessment year. See P.G. W. Sawoo Pvt. Ltd. [ 2016 (4) TMI 1002 - SUPREME COURT ]. In the given case, the transactions for the purchase and sale of shares have taken place in the financial year 2008-09 and therefore the same at the most can be taxed in the corresponding assessment year. However, we find that the AO has determined the income under the provisions of section 69 with respect to the transactions carried out by the assessee in the earlier year and not in the year under consideration. The act of the revenue authorities is unwarranted under the provisions of law. Accordingly, we set aside the finding of the learned CIT (A) and direct the AO to delete the addition made by him.
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2022 (6) TMI 999
Deduction of interest expenditure u/s 36(1)(ii) - diversion of the assessee s interest bearing funds for making the interest free investment - assessee had during the year under consideration invested in OPCD. Although, it was the claim of the assessee that OPCD was redeemable at an aggregate return of 12% p.a, however, the same did not find favor with the A.O as he was of the view that the assessee had invested in OPCD @0.1% p.a. - HELD THAT:- We concur with the view taken by the CIT(A) that as the assessee had own funds which were far more than the investments in OPCD, therefore, the presumption would be that the investments were made from own funds and no disallowance of any part of interest expenditure claimed by the assessee u/s 36(1)(iii) was called for in the hands of the assessee. Our aforesaid view is fortified by the judgments of the Hon ble High Court of Bombay in the case of CIT vs. Reliance Utilities [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] and CIT-2, Mumbai Vs. HDFC Bank Ltd. [ 2014 (8) TMI 119 - BOMBAY HIGH COURT] - We, thus, finding no infirmity in the view taken by the CIT(A) as regards the aforesaid issue under consideration uphold his order to the said extent. The Ground of appeal No. 1 is dismissed. Addition towards sales promotion expenses and Advertisement expenses made by the A.O by capitalizing the same to the work-in-progress - CIT-A deleted the addition - HELD THAT:- We find that the selling and distribution costs, advertisement expense etc. are to be excluded from the cost of inventories as they do not contribute towards bringing the inventories to their present location and condition. Our aforesaid view that selling costs are no to be considered as a part of the project cost i.e W.I.P cost is also supported by the Guidance Note on Accounting for Real Estate Transactions (Revised 2012) wherein at Para 2.4(b) it is provided that selling costs are not to be considered as part of the construction costs and development costs. Hon ble High Court of Delhi in the case of Gopal Das Estates Housing Pvt. Ltd. [ 2019 (3) TMI 1272 - DELHI HIGH COURT] had observed, that that the expenditure incurred on advertising being necessary for promotion of its business is to be allowed as a business expenditure and would not form part of the project cost. Apart from that, we find that as the assessee s claim for deduction of sales promotion, advertisement etc. was consistently allowed by the department not only in the preceding but also in the succeeding years, therefore, there was no justification on its part in declining the assessee s claim for deduction of the said expenses during the year under consideration.We, thus, in terms of our aforesaid observations finding no infirmity in the view taken by the CIT(A) who by a well reasoned order had vacated the disallowance of the assessee s claim - Decided in favour of assessee.
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Customs
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2022 (6) TMI 998
Detention of imported consignment - Betelnut - investigation is ongoing in regard to the classification of the goods and assessment of duty - investigation as regards prohibited goods or not, also going on - HELD THAT:- The petitioners appear to have moved representations before the respondents as early as on 01.04.2022, 24.03.2022, 24.03.2022 30.03.2022 requesting that they may be permitted to re-export the consignment sans adjudication fine and penalty. The petitioners represent that the goods are perishable in nature and in such an event it would constitute a national waste - Admittedly, these representations have been received by R1 on 01.04.2022 (seal affixed), and are pending till date. Learned Senior Panel Counsel would point out that there have been several attempts made to pursue the investigation/adjudication proceedings but there has been no co-operation on the part of the petitioners. It is made clear that the petitioner will cooperate with the respondents in respect of the pending proceedings and to notices, if any, received from the respondents. In any event, for the purpose of disposal of the representations dated 01.04.2022, 24.03.2022, 24.03.2022 30.03.2022, the petitioners are permitted to appear before R1 on Thursday, the 16th of June, 2022 at 10.30 a.m. Writ petition disposed off.
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2022 (6) TMI 997
Demand of amount over and above the amount towards cost recovery charges for deputing officers of the customs in the petitioner s Inland Container Depot (ICD) - petitioner has been handling more than 7,200 TEUs containers at ICD, Hosur per annum from September 2017 onwards - eligibility for grant of waiver from the Cost Recovery Charges in terms of Circular dated 12.09.2005 - HELD THAT:- The issue relating to the payment of cost recovery charges was elaborately considered in M/S. SUN GLOBAL LOGISTICS PVT. LTD. VERSUS UNION OF INDIA, CENTRAL BOARD OF EXCISE CUSTOMS, COMMISSIONER OF CUSTOMS (SEA EXPORT) , DEPUTY COMMISSIONER OF CUSTOMS (ENQUIRY) , ASSISTANT COMMISSIONER OF CUSTOMS (APPG. DOCKS-ADMN) , CHENNAI [ 2021 (6) TMI 429 - MADRAS HIGH COURT] where it was held that unless there is an appropriate amendment to the provisions and the Customs Act,1962 and the Rules made thereunder which fall within the four corners of Part XIV of the Constitution of India Cost Recovery Charges equivalent to the Salaries packs paid to such officials of the Customs Department cannot be justified. There are no merits in the contention of the respondents in the impugned order. Therefore, the writ petition stands allowed.
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2022 (6) TMI 996
Seeking release of seized goods - import of Black Pepper of Sri Lankan origin - seizure on alleged grounds of over valuation to circumvent minimum import price - custom Notification No. 21/2015-2020 dated 25.07.2018 - Section 110A of the Customs Act, 1962 - HELD THAT:- The issue has been squarely covered by the judgement in the case of M/S. TRAVANCORE SOLVENTS OILS VERSUS THE COMMISSIONER OF CUSTOMS, THE JOINT COMMISSIONER OF CUSTOMS, THE ASSISTANT COMMISSIONER OF CUSTOMS (SIIB) , THE SUPERINTENDENT OF CUSTOMS [ 2022 (1) TMI 817 - MADRAS HIGH COURT ] where The importer carried the matter in appeal by way of intra-court appeal and a Hon'ble Division Bench in M/S. AL QAHIR INTERNATIONAL VERSUS THE COMMISSIONER OF CUSTOMS, THE DEPUTY DIRECTOR, DIRECTORATE OF REVENUE INTELLIGENCE, TUTICORIN [ 2021 (12) TMI 1160 - MADRAS HIGH COURT] order modified the conditions imposed by learned Single Judge with regard to bank guarantee alone and said bond will suffice. The sequitur is, the prayer in the captioned writ petition deserves to be acceded to by respectfully following the ratio of Hon'ble Division Bench in Al Qahir International case - the second respondent i.e., the Joint Commissioner of Customs is directed to quantify the duty, bond amounts etc., communicate the same to the petitioner forthwith and release the said consignment within one week of said remittance i.e., quantified duty/bond amounts/execution of bonds by the petitioner - It is made clear that nothing contained in this order will stand in the way of an independent inquiry by the authorities in the ongoing investigation. Petition disposed off.
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2022 (6) TMI 995
100% EOU - De-bonding - payment of duty on capital goods imported without payment of duty - Wrongful application of rates/period of depreciation - benefit availed under N/N. 13/81-Cus., dated 9-8-1981 - HELD THAT:- It is on record that, vide Order-In-Original dated 28.03.2002 Ld. Lower Adjudicating authority held that deprecation was allowed only upto the date of permission for de-bonding which has been categorically held to be incorrect by the tribunal in its remand order. Clearly, lower authorities are not following the directions given by Tribunal. Therefore, the impugned order is not sustainable in law. As per the Tribunal s clear observation, the adjudicating authority is bound to allow the depreciation upto the date of payment of duty. As per the submission made by the Appellant that if the depreciation is considered upto the date of payment then duty comes to Nil. There is no rebuttal to this fact. Hence the demand is not sustainable. Appeal allowed - decided in favor of appellant.
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Corporate Laws
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2022 (6) TMI 994
Exclusive right to use and develop the land parcels - fraudulent mutation of the ownership entered in the revenue record - validity of order passed by the Daily Lok Adalat - non-speaking order - scheme of demerger taking place - HELD THAT:- It is found that the award dated 09.12.2016 is passed by the Daily Lok Adalat. This award has been passed by the Daily Lok Adalat presided by the Civil Judge (Jr. Divn.) Gurgaon, therefore, it has to be treated alike compromise decree under Order 23 Rule 3 CPC. It is also true that all questions are to be decided in the same suit as the decree is not amenable to appeal and thus fresh independent suit is barred. Petitioner in terms of its pleadings has specifically acquiesced the factum of filing civil suit, execution of exchange deeds and compromise, incorporation of mutations in the revenue record, alleged misrepresentation of respondents - it would remain debatable as to whether petitioner can espouse the cause at such a belated stage by moving an objection petition in the same proceeding. This Court would not comment upon the remedies which may be availed by the petitioner in accordance with law in future. Certainly qua this aspect, the petitioner cannot maintain the present petition being suffered with delay and latches and also the petitioner having acquiesced the subject matter of civil suit, exchange deed and compromise etc. In any case, petitioner is a necessary party in view of proceedings conducted before the National Company Law Tribunal, New Delhi and Scheme of Arrangement approved by the Tribunal in the context of steps to be taken by the parties for the implementation of the Scheme after its approval. The pending application under Section 231 of the Companies Act would be decided by the NCLT in accordance with law. It would be open to the petitioner to seek relief, if any available to it in terms of Section 232(4) to 232(7) of the Companies Act. Since the petitioner claims itself to be an aggrieved party, therefore, it was expected from respondent No.2 to provide adequate opportunity of hearing to the petitioner. Proceedings undertaken before respondent No.2 in the context of preponing the date of hearing from 24.02.2022 to 09.12.2021 unilaterally and thereafter making communication to the petitioner only on 08.12.2021 requiring petitioner to personally appear on 09.12.2021 need to be deprecated. The application for such preponement is not forthcoming except to see that it was done on the application of respondents No.7 to 11. It is because of this act of respondent No.2, petitioner became apprehensive and came to this Court. In my considered opinion, it was not reasonably expected from respondent No.2 to unilaterally prepone the date of hearing without issuing notice to the petitioner. Preponement was done unilaterally and thereafter intimation was issued to the petitioner on 08.12.2021 to come present on 09.12.2021 to submit its case. Further one week's adjournment was given only on account of persuasion made by the petitioner. In any case, preponement of date of hearing from 24.02.2022 to 09.12.2021 was not justified. The apprehension shown by the petitioner would be squarely answered, if the pending proceedings in terms of change of land use are taken before some other competent officer of the respondent-Department. In case, respondent No.2 is the only defined authority, then the respondent No.1 can be asked to allocate the application for change of land use for ultimate processing before some other authority or respondent No.1 may itself take up the issue in accordance with law - the petitioner would be at liberty to avail its legal remedies in accordance with law - respondent No.1 shall allocate the pending application to any other competent officer or may take up the issue itself in accordance with law. The present arrangement is being made in view of attending facts and circumstances of the present case without creating any such precedent for any other case. Let the needful be done by respondent No.1 within a period of two weeks. Petition disposed off.
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2022 (6) TMI 993
Seeking restoration of name of the company, in the Register of Companies being maintained by the Registrar of Companies - section 252(3) of the Companies Act - HELD THAT:- The Petitioner was unaware of the notification regarding striking off the name of the company from the Registrar of the Respondent as no notice as required under Section 248 of the said Act, was given to the Company. The Petitioner came to know about the same only when the representative of the Company went to file the statutory documents as per the requirements of the Act and immediately the Directors of the petitioner company visited the Registrar of Companies, Guwahati and requested to change the status of the company from Strike Off to Active so that the statutory compliance can be made as per the requirements of the Act. But the Respondent expressed his helplessness to make any correction or modification in the master date and in accepting the Audited Accounts and Returns as the name of the Company has already been struck off from its record. Under Section 248 of the Companies Act, 2013 before striking off the name of the company from the register of the Respondent, notice is requested to be given to the company which in this case has not been done. The Respondent should be directed to restore the name of the company to the like and / or to the register of the respondent and the respondent be directed to rectify the master data by modifying the status from Strike Off to Active within the specific time as this Hon ble Tribunal may deem fit and proper - Application allowed.
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2022 (6) TMI 992
Fraudulent reduction in the shareholding - reduction of shares by way of illegal right issues/private placements - forged signatures - sections 241/242 of Companies Act, 2013 - HELD THAT:- From the perusal of the reply, it is noted that the claim of the petitioner as regard to equal partnership was wrong as this was never an understanding. It is further claimed that the right issues/private placements were made to clear the electricity dues. It is also claimed that the Directors were removed by following the due process of law. It is also claimed that the company petition is in the nature of directorial complaint and it does not disclose any mismanagement or act of oppression continuing from the date of filing of the company petition. It is also noted that certain properties of one company, namely, Somil Ispat Private Limited had been purchased for which a bid had earlier been made by one of the petitioners, whose bid was cancelled for non-payment of bid amount within stipulated time. Thus, this fact lends some credence to the claim of the petitioner that quasi-partnership was formed and whereby the respondent no. 1 company had taken over the assets of such company - It is also noted that even as per the respondents, a loan was taken by the respondent company to acquire assets of such company. A claim has been made that the right issue was made to clear the dues of electricity department. No reasonable justification as to why these funds were raised by way of right issue or private placement of equity shares and could not be raised in the form of loans has been given. There exist circumstances where irreparable loss may be caused to the petitioners and also it may be prejudicial to the interest of the respondent no. 1 company, if certain interim reliefs are not given - the petitioner no. 1 be restored instead of appointment of Special Officer or Director of the respondent no. 1 company from the date of his removal from such post. The main petition be listed on 31.08.2022 for final disposal.
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Securities / SEBI
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2022 (6) TMI 991
Contravention of provisions of the SEBI Act - accused company had raised a huge amount of money from general public in contravention of legal provisions and without obtaining approval or clearance from ROC, MCA and SEBI as required under the Companies Act, 1956 and the SEBI Act, 1992 - Liability of directors in alleged offence - accused company did not take any steps for winding up of the scheme or repayment to the investors, nor did it take any steps to comply with the directions of the SEBI issue and has not the refunded money to the investors and caused huge pecuniary damage - acccused no. 2 to 13 in the complaint are the directors/promoters/key management/personnel and persons in charge of and responsible to the Accused No. 1/Company for the conduct of the business and are liable for the violations of sections 56, 60 and 70 read with section 55A and 67 of the Companies Act, 1956. HELD THAT:- In the instant case the petitioners were directors and not mere name lenders to the company. Two of them had invested Rs. 5.5 lakhs each at the time of incorporation of the company. In the impugned order it has been stated that on the basis of submissions made by accused Kanwal Prakash Singh, Gajendra Pal Singh and Virendra Kumar, the Adjudicating Officer of SEBI found that during the tenure of the petitioners as directors the company issued redeemable preference shares to 3558 persons and collected an amount of Rs. 11,42,63,000/- in the financial years froms 2010-2013 without complying with public issue norms as mandated under sections 56, 60 and 73 of the Companies Act, 1956, read with the Companies Act, 2013. The Adjudicating Officer of SEBI directed the accused persons to refund the money collected by the company to the investors with interest of 15% per annum, compounded at half yearly intervals from the date when the repayments became due till the date of actual payment along with other compliance to be made. It is therefore apparent that the accused petitioners were fully aware and had knowledge about the activity of the company and also the contraventions of law made by it. The onus therefore shifts upon the petitioners under proviso to section 27(1) of SEBI Act that they had no knowledge about the contravention of the provisions of law committed by the Company in mobilizing such huge amount of funds from public shares. Order dated 13.10.2015 passed by SEBI reveals that M/s Just-Reliable Projects India Limited has mobilized fund of Rs. 11.43 crores by floating of shares in the market. This Act of the company was not done furtively and surreptitiously. Therefore, the plea of the petitioners that they had no knowledge about the activity of the company is also prima facie unacceptable at this stage. Gajendra Pal Singh and Kanwal Prakash Singh admitted before the SEBI authorities that they had sent a notice dated 18.6.2010 and 22.6.2010 to Swarup Dutta regarding alleged unilateral decisions taken by him to open bank account, increase share capitals of the company without holding Annual General Meeting and also change in the address of the registered office of the company. The aforesaid acts alleged to have been carried out by Swarup Dutta requires prior Board Resolution of the company. The petitioners who claim to be unaware about the activity of the company are well informed about opening of bank accounts, change of Registered address of the company as well as mobilization of fund to the credit of the company. The petitioners did not hand over the company documents to SEBI as directed in order dated 13.10.2015. Therefore, documentary evidence when produced in course of trial would reveal if the concerned authorities have allowed such course of activity without any Board Meeting of the company and also of the fact if the petitioners really had no knowledge about the mode and manner of functioning of the company. The petitioners having issued the notice to Swarup Dutta continued to be directors and did not resign from their office. The illegal activity of the company continued while petitioners were fully aware about such activity till 29.07.2011 and Virendra Kumar till 29.3.2012, their respective dates of resignation. As it is salutary to refer to the decision in the case of Gunmala Sales Pvt. Ltd Vs Anu Mehta and Ors [ 2014 (12) TMI 1116 - SUPREME COURT] wherein it is held that a complaint cannot be quashed merely on the ground that apart from the basic averment no particulars are given in the complaint about his role, because ordinarily the basic averment would be sufficient to send him to trail and it could be argued that his further role could be brought out in the trial. It therefore emerge from the available facts and circumstances and the position of law that there is material averment in the petition of Complaint to disclose that the directors of the accused company were responsible for the conduct of its business. Since the petitioners were adequately notified before the enquiry proceedings were held by the Whole Time Member of SEBI and that they did not comply the order thereafter, learned Judge Special Court, has committed no error in holding that there is a prima facie case against the petitioners to constitute charge against them and thereby the prayer for discharge was rejected. In view of my foregoing discussion find and the impugned order suffers from no illegality, impropriety or irregularity and calls for no interference. Both the revisional applications filed by the petitioners are accordingly dismissed on contest.
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Insolvency & Bankruptcy
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2022 (6) TMI 990
Right of Auction purchaser - Seeking refunds of certain amount which have deposited under protest for discharge the contractual obligation - Extent and the scope of judicial intervention in writ jurisdiction - contractual obligation embodied in the commercial contract - recovery of arrears of the lease rentals and interest thereon, once the petitioner stepped into the shoes of the Corporate Debtor lessee - case of petitioner is that petitioner being a bonafide auction purchaser, purchased immovable asscets consequent to the auction/sale held in pursuance of the orders of NCLT after paying the bid amount cannot be fastened with any monetory liability which was attached with Corporare Debtor under Liquidation - whether this Court can in exercise of the jurisdiction under Article 226 of the Constitution of India by virtue of judicial fiat grant relief to the petitioner which tantamount to resiling and wriggling away from a contractual obligation? HELD THAT:- In the case in hand the Court finds that only a solitary relief has been sought in the nature of mandamus directing the GNIDA to refund the amount so deposited by the petitioner along with 18% per annum. The judgment in the case of Suganmal [ 1964 (11) TMI 7 - SUPREME COURT] and Salonah Tea Company Ltd. [ 1987 (12) TMI 3 - SUPREME COURT ] are squarely applicable in the facts of the present case particularly when refund is being sought on the basis of certain deposits so made by the petitioner for discharging the contractual obligation. This Court is of the firm opinion that the present writ petition so instituted, seeking the solitary relief of mandamus without assailing any order, is not maintainable. Meticulously, analyzing the facts of the case in hand from the four corners of law this Court cannot subscribe to the argument of the learned Senior Counsel who appears for the petitioner as the controversy sought to raked up by the petitioner devolves around factual issues relating to the contractual obligation so embodied in the underline instruments be that the lease deed so executed from time to time or the Transfer Memorandum so executed between the parties. More so, the sale certificate itself has been issued after noticing the fact that the petitioner transferee (auction purchaser) is bound by the covenants contained in the lease deed as well as the Transfer Memorandum. Writ jurisdiction cannot be expanded in an elastic manner so as to stretch it to such a position which tantamounts to giving its judicial seal while delving into the factual issue as to whether pressure/coercion so adopted was practiced upon the petitioner. It is thus concluded and held as under:- (a). Merely because the petitioner is a bonafide auction purchaser who had purchased assets Corporate Debtor through auction/bidding so conducted by orders of NCLT, will not absolve it from paying arrears of lease rental and interest thereon. (b). The Insolvency Bankruptcy Code- 2016 grants limited protection to the petitioner (auction purchaser) while allowing it to step into the shoes of the Corporate Debtor but in order to the lessee of the principle lessor (GNIDA) the petitioner has to honor the commitments and discharge its contractual obligation as embodied in the lease deeds, Transfer Memorandum and Sale Certificate. (c). The conduct of the petitioner also dis-entitles it to be granted relief under the equitable jurisdiction as the petitioner has approbated and reprobated at the same time as on one hand it seeks to become a lessee while being put in possession for enjoying the immovable assets of Corporate Debtor but on the other hand it wriggles and resiles from the contractual obligation. (d). The words so employed in the Certificate of Sale Deed dated 11.09.2019 being AS IS WHERE IS , AS IS WHAT IS , WHATEVER THERE IS AND NO RECOURSE read with the Transfer Memorandum dated 24.12.2020 so executed between the petitioner (auction purchaser) and GNIDA as well as the Sale Certificate dated 30.07.2021 itself creates contractual obligation upon the petitioner to honor the commitments and to discharge the obligations so embodied in the lease deed dated 26.06.2021 and the subsequent lease deeds for the payment of past lease rentals and interest thereon. (e). GNIDA being the principal lessor has paramount interest over the demised land put to auction and it has legal as well as contractual right to raise demand of out standing arrears of lease rentals and interest thereon. (f). High Court under Article 226 of the Constitution of India cannot by a judicial fiat creates a podium to facilitate avoidance of agreements while wriggling out from contractual obligations so embodied therein. (g). A writ petition containing solitary relief of refund of the amount deposited for fulfilling contractual obligation, is not maintainable. (h). Even otherwise, in absence of any challenge being made to the covenants of the Transfer Memorandum dated 24.12.2020 and the Sale Certificate dated 30.07.2021, the petitioner is not entitled to refund of the amount so deposited by him claiming it to be under protest. The writ petition is devoid of merit and thus, liable to be dismissed. It is, therefore, dismissed.
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2022 (6) TMI 989
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- In view of the existence of dispute prior to the demand notice dated 27.11.2017 the Adjudicating Authority rightly dismissed the Application filed by the Appellant. Appeal dismissed.
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2022 (6) TMI 988
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- As far as date and amount of disbursement of loan are concerned, the same is not in dispute though there is no written agreement to this effect. Such amount being of the nature of loan is also not in dispute as it is so admitted by the corporate debtor. The repayment period of six months for such loan is also not disputed. From the reply of the corporate debtor, it is also evident that both financial creditor as well as corporate debtor are having a business relationship for some time. The only plea which has been taken by the corporate debtor is that the amount has been paid partly through cheques and partly in cash. As regard to payment made in cash, except making oral submissions, no documentary evidence such as receipt or voucher duly acknowledged by the financial creditor has been brought on record. The claim of repayment of loan remains unsubstantiated by any evidence - there is a debt which is due and payable both in law and in fact and a default has occurred therein. Further, the amount of default is more than the threshold limit as prescribed under section 4 of the Code, at the time of filing of the present application. This application complies with all requirements of the Code read with relevant Rules made thereunder. There is no impediment to the admission of the present application - petition admitted - moratorium declared.
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2022 (6) TMI 987
Seeking permission to allow to submit expression of interest published on 05/03/2022 so that the Applicant can file resolution plan - Applicant is not disqualified under section 29A of the insolvency and Bankruptcy code, 2016 in view of provisions of section 240A of the Insolvency and Bankruptcy Code, 2016 - eligibility of Micro, Small and Medium Enterprises to participate in the resolution plan - HELD THAT:- The Application under Section 10 of IBC filed by the CD itself for its default to the FCs was admitted by this Bench on 23/11/2021. When the CIRP Period of 180 days was going to complete on 21/05/2022 and at that stage almost after 41 days from the last date of submission of the EOI, the Applicant on behalf of the Corporate Debtor in which he was Promoter/Director has submitted a simple letter dated 02.05.2022 to the Respondent No. 1 (RP) requesting the RP to allow them to submit a Resolution Plan and treat the said Letter as EOI without any reference of the compliance of the terms and conditions of the EOI. Hence it is apparent that the letter submitted is all hypothetical when the Applicant CD itself couldn t pay the dues to the FCs and had filed application under Section 10 of IBC for CIRP. The question of the Liquidation does not arise, as claimed by the Applicant here, when the Resolution plans received are under consideration. It is clear that the intent of the Applicant is only to delay and defeat the CIRP process of the Corporate Debtor by filing this type of IA. The IBC process shall not be allowed to misuse and CIRP has to be completed in time in the interest of all stake holders - Application dismissed.
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2022 (6) TMI 986
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - whether there exists financial debt, which can constitute the basis for filing a petition under section 7 of the Code against the Corporate Debtor? - HELD THAT:- The facts do really cast serious doubts on the genuineness of the transactions alleged to be financial debt by the Financial Creditors. The facts regarding existence of Financial Debt, disbursement and default do not reconcile with the documents placed on record. On top of this, as stated above the Assessment Order passed in respect of the Corporate Debtor and the Forensic Audit Report further strengthen the suspicion in respect of the authenticity and bona fides of the transactions in question. The Financial Creditor has argued that the Assessment Order is only applicable with regards to assessee and does not bind the Financial Creditors. It is further contended that the same only speaks of Prarthna. This objection is unwarranted. It is not held that the Income tax Assessment Order is binding on this Tribunal. In view of the entire gamut of facts, the interrelationship between the Financial Creditors (and Nikita and Active which merged into Narsingh), the forensic Audit Report and the analysis of the facts that we have done above, leave us unpersuaded to commence CIRP against the Corporate Debtor. We cannot therefore in exercise of our summary jurisdiction under the Code, conclude that a bona fide Financial Debt exists. For this reason, this petition under Section 7(1) of the Code is not maintainable and hence we reject the Petition - petition dismissed.
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2022 (6) TMI 985
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - allegation of inferior quality of goods supplied by the operational creditor - existence of debt and dispute or not - time limitation - HELD THAT:- It is seen from the records that notice of default under Section 8, IBC has been delivered and affidavit under Section 9(3)(b) of IBC has also been filed and debt fell due on 20.07.2017 and this application has been filed on 08.08.2019 so the application is found well within the limitation - It is noted that the application filed under section 9 is complete and complies with the requirements of the relevant provisions of IBC, 2016 read with Rules and Regulations made thereunder. The outstanding amount is more than the threshold limit of Rs. 1,00,000/-. There does not exist any dispute within the meaning of provisions of Section 8 9 of IBC, 2016. The Operational Creditor has not proposed the name of any person to function as Interim Resolution Professional. Therefore, this Bench will appoint a person from the panel of names made available to it by the Insolvency Bankruptcy Board of India. Application admitted - moratorium declared.
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2022 (6) TMI 984
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- It is clear that even though there was no written agreement between the Operation Creditor and the Corporate Debtor, a business relation did exist between them and that the CD had in fact supplied the whole spices to the CD for which ad hoc payments were also made on numerous occasions except against the invoices in question. The Corporate Debtor has claimed that there are pre-existing disputes regarding the quality of goods supplied to the Corporate Debtor. However, the letters dated 27 June 2018 and 04 August 2018 regarding the same as sent by the Corporate Debtor are wrongfully addressed towards one Mr. Shankar Singh, whom the Corporate Debtor mistakenly addresses as the proprietor of Isha Food Products, Even though the relationship between Isha foods and Vashishta grinding works is not quite elaborated in the pleadings, it appears that no case has been made to prove that Shankar Singh is running all these companies, namely, Abhilasha Exports, Isha foods and Vashishtha Grinding, whereas the Operational Creditor has affirmed through an affidavit that the proprietor of Isha foods is Mr. Binod Kumar Chaudhary - Further, even if the wrongful mention of the addressee is taken to be a bona fide mistake, there is nothing on record to prove that the spurious goods being the blackish turmeric powder and other spurious powdered spices belonged to the batch of whole spices provided by Isha Food Products. The mere allegation of collusion being raised cannot, by itself, be sufficient to prevent the admission of the present petition. Otherwise, in every case, the Corporate Debtor can come up with a defence that the acknowledgment given was unauthorized, thus escaping the clutches of the law. This proposition, therefore, cannot be upheld since it will have unlimited consequences. This Adjudicating Authority is satisfied that a debt is due and payable by the Corporate Debtor towards the Operational Creditor and the Corporate Debtor has defaulted in the same. The petition has been filed in the requisite form and affidavit in compliance under section 9(3)(b) has been made. As such, this petition is complete in all respects. Petition admitted - moratorium declared.
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PMLA
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2022 (6) TMI 983
Right to vote in the Maharashtra Legislative Council Election - alternatively seeking permission to Applicant to go to Vidhan Bhavan under medical escort, the charges of which will be borne by the Applicant to enable him to vote in the Elections for Maharashtra Legislative Council - HELD THAT:- From the phraseology of the definition of election , indisputably the election to State Legislative Council is regulated by the provisions of the R.P.Act, 1951. Sub-Section (5) of Section 62 contains an interdict against the exercise of right to vote at any election by a person who is confined in prison. Indubitably, the Parliament has not made any distinction, in the matter of prescribing the aforesaid disqualification on account of being in custody on the basis of the bodies, to which election is held. The proviso, however, excludes a person who has been detained in custody as a preventive detention measure from the said bar. The issue was sought to be raised before the Division Bench of the Delhi High Court in the case of PRAVEEN KUMAR CHAUDHARY ORS. VERSUS ELECTION COMMISSION OF INDIA ORS. [ 2020 (2) TMI 1643 - DELHI HIGH COURT] . Following the pronouncements in the cases of ANUKUL CHANDRA PRADHAN ADVOCATE SUPREME COURT VERSUS U.O.I. [ 1997 (7) TMI 651 - SUPREME COURT] , and S. RADHAKRISHNAN VERSUS UNION OF INDIA (UOI) AND ORS. [ 1999 (8) TMI 1013 - SUPREME COURT] , and a Division Bench decision of the Delhi High Court in the case of MANOHAR LAL SHARMA VERSUS UNION OF INDIA [ 2014 (2) TMI 1410 - DELHI HIGH COURT] , the Delhi High Court reiterated that sub-section (5) of Section 62 is constitutionally valid - It was held that Section 62(5) is constitutionally valid. The classification of the persons who are in jail and who are out of jail is a valid classification and it has a reasonable nexus with the objects sought to be achieved as stated hereinabove. Indisputably, the Applicants profess to exercise their right to vote in the capacity of the Members of the Legislative Assembly, which constitutes the electoral college for electing the Members of the Legislative Council under Article 171(3)(d) of the Constitution of India. The claim to exercise of this constitutional right can, by no stretch of imagination, be said to be absolute. The Parliament, by law, has regulated the elections to the Legislative Councils as well, under the R.P.Act, 1951. Section 16 of the Representation of the People Act, 1951, thus provides that the Governor shall call upon the members of the Legislative Assembly of the State to elect members in accordance with the provisions of this Act, and all the rules and orders made thereunder - The situation which thus obtains is that even on the premise that the Applicants have constitutional right to exercise and duty to discharge in the capacity of the members of the Maharashtra Legislative Assembly, the same are regulated by statutory prescriptions. If the Parliament has declared that a person who is incarcerated, otherwise than as a detenue under the preventive detention law, is not entitled to vote at an election, the said prescription would govern the rights and duties of the Members of the Legislative Assembly as electors. Whether the Court would be justified in removing the embargo by either directing the release of the Applicants on temporary bail or permitting the Applicants to cast vote, under escort? - HELD THAT:- What the Applicants want the Court to do is to order release of the Applicants to cast vote in the face of an express prohibition. To this end, the Applicants appeal to the judicial discretion of the Court. The edifice of this appeal is rested on the proposition that participating in voting by the Applicants would strengthen the democracy - It would be suffice to note that the concept of democracy transcends electoral democracy . Purity of electoral process and probity of the participants therein, are also of equal significance in strengthening the democratic principles. One of the objects of the prohibition envisaged by sub-section (5) of Section 62 is stated to be arresting the criminalization of politics. The Court may be confronted with a situation, where despite the rigors of law, to uphold the constitutional norms and democratic values, the Court may be required to summon the inherent powers to remedy the malady. The Court cannot be said to be completely denuded of the authority to exercise such jurisdiction. An illustrative case would be, where on the eve of the election, a number of members of the electoral college are put behind the bars with a view to deprive them of the opportunity to vote in the election so as to achieve a desired result. In such a situation, though the Section would be unassailable, yet the Action thereunder, is susceptible to challenge and correction in exercise of appropriate jurisdiction. In such an exceptional situation, the Court may be justified in issuing directions so that the custody of the members of the electoral college does not become a subterfuge for divesting them of their right to vote. In the case at hand, the Applicants have been in custody since long. No such motive of putting the Applicants behind the bar so as to prevent them from participating in the election process can be attributed, at least, at this length of time - Application dismissed.
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2022 (6) TMI 982
Issuance of Look Out Circular/Directions - restraint from travelling abroad - Allegation of collection funds by crowdfunding for COVID relief work - proper accounting not done - case of petitioner is that the Circular has been issued without due compliance of the guidelines issued by the Ministry of Home Affairs as well as the guidelines issued by the Courts regarding the same - HELD THAT:- In the particular facts of the case, it becomes evident that the LOC was issued in haste and despite the absence of any precondition necessitating such a measure. An LOC is a coercive measure to make a person surrender and consequentially interferes with petitioner s right of personal liberty and free movement. It is to be issued in cases where the accused is deliberately evading summons/arrest or where such person fails to appear in Court despite a Non-Bailable Warrant. In the instant case, there is no contradiction by the respondent to the submission of the petitioner that she has appeared on each and every date before the Investigating Agency when summoned, and hence, there is no cogent reason for presuming that the Petitioner would not appear before the Investigation Agency and hence, no case is made out for issuing the impugned LOC. The impugned LOC is accordingly liable to be set aside as being devoid of merits as well as for infringing the Human right of the Petitioner to travel abroad and to exercise her freedom of speech and expression - the impugned LOC is set aside and quashed - Petition allowed.
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2022 (6) TMI 981
Issuance of Look Out Circular (LOC) - seeking permission to travel to any country without limitation - HELD THAT:- In the present case it is pertinent to observe that the applicant is not an accused. The investigation of the case is going on since 2019. So far there is not even a whisper from the complainant that the applicant may be an accused subsequently. It is not denied that the applicant has appeared before the ED authorities as and when required / summoned. The only grievance of the complainant / ED is that though the applicant physically appeared in compliance of the summonses, he is not providing the relevant documents. The investigating agency cannot endlessly go on saying that the required documents are not being supplied by the applicant. It is pertinent to observe that these observations of the Hon ble High Court came in bail application. Here the applicant is not even an accused. It was argued on behalf of the complainant / ED that if the LOC is quashed the applicant may not join the investigation. There is nothing in the previous conduct of the applicant to show that he is misusing the liberty granted to him. In view of the previous conduct of the applicant there is no reasonable apprehension to presume that in the absence of LOC he will not come and appear before ED authorities in compliance of the summons. Further, if the applicant fails to appear in response to summons of the ED, without seeking exemption from the authorities of ED, fresh LOC can always be issued for taking coercive measures to secure the presence of the applicant. It is to be observed that as per the complainant / ED LOC is a measure to ensure that the applicant joins investigation. The present applicant though a citizen of India is a permanent resident of Dubai, UAE. It is the case of the complainant that the entire family and business of applicant in abroad. In such circumstances the applicant does not have much interest in India. It was argued on behalf of the complainant that no blanket protection can be given to the applicant. In this regard Ld. Counsel for the applicant fairly submitted that the applicant is willing to cooperate with the investigating agency and abide by any condition imposed by the court - this court does not see any justifiable reason for the continuation of the LOC issued against the applicant. Accordingly, the LOC issued against the applicant is directed to be recalled. The other primary prayer of the applicant is that he may be allowed to travel to countries other than UAE and Iran. Since the LOC issued against the applicant stands quashed, he is free to travel as per his legal rights. However, for securing interest of the investigating agency the applicant is directed to continuously intimate the investigating agency if he travel outside Dubai, UAE. Application disposed off.
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Service Tax
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2022 (6) TMI 980
Failure to deposit the amount under SVLDRS (Sabka Vishwas (Legacy Dispute Resolution) Scheme) - Petitioner is before this Court seeking direction to the respondents to accept the tax amount deposited by him to avail the benefit under the Scheme which was denied due to late deposit - HELD THAT:- In view of the factual position and the judgment of the Allahabad High Court in M/S. YASHI CONSTRUCTION VERSUS UNION OF INDIA AND 2 OTHERS [ 2022 (3) TMI 108 - ALLAHABAD HIGH COURT ] duly confirmed by the Apex Court in M/S. YASHI CONSTRUCTIONS VERSUS UNION OF INDIA ORS. [ 2022 (3) TMI 110 - SC ORDER ], allowing of this petition would lead to tinkering with the Scheme, which does not provide for any extension of last date for deposit of the discounted amount of tax due. The application of the petitioner under the Scheme has to be considered within the four corners of the Scheme and as such discounted tax alleged above sought to be deposited by the petitioner after last date cannot be accepted and, therefore, Revenue was correct in denying relief under the Scheme to the petitioner. Petition dismissed.
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2022 (6) TMI 979
Refund claim - unjust enrichment - rejection of refund for non-adherence to conditions of Section 102(E) of the Finance Act - HELD THAT:- The issue agitated by the department before us i.e. remand of the matter to the lower authority by Commissioner(Appeals), is no longer existing in view of the passing of the order in remand proceedings. Therefore, it is found that the Appeal is infructuous and thus requires dismissal. Regarding the submission of Ld.Counsel for giving a direction to the Ld.Commissioner(Appeals), it is found that the same is not part of the proceedings. Moreover, being creature of statute, this Bench cannot thus direct the authorities in an issue which is not before us. However, Respondents are at liberty to pursue the matter before the Ld.Commissioner(Appeals). Appeal is dismissed as infructuous.
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Central Excise
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2022 (6) TMI 978
Refund of Service tax - service tax invoices subsequently cancelled by issuing credit notes to the customers which had the effect that payment of service tax on such cancelled invoices were not required as per law - parties renegotiated the invoices issued under the Finance Act, 1994 and the Appellant had issued a credit note which annulled/cancelled the invoices issued and the denial of refund of the stated amount would be in violation of the Statutory Provisions - amount of tax paid under Finance Act, 1994 due to renegotiation of invoice with the service receiver and having given a credit note of the payment made, the tax so paid should have to be refunded to the appellant - HELD THAT:- In MADRAS PORT TRUST VERSUS HYMANSHU INTERNATIONAL [ 1979 (1) TMI 105 - SUPREME COURT] , it is held that it is high time that the Government and Public Authorities have got the practice of not relying upon technical pleas. It was also argued by Shri. Ravi Shankar that when the CESTAT has been following Total Environment, but yet in the instant case has denied the relief. In view of the undisputed facts that the appellant has paid the service tax and also the GST; and the Commissioner of Central Excise has held that appellant was not liable to pay GST, rejection of applications for refund is untenable. Having paid the service tax in the year 2017 and having submitted its application, the appellant is awaiting the refund from March 2018 till date. Respondents are directed to refund Rs.17,84,952/- with statutory interest payable under Section 11BB of the Central Excise Act, 1944 within three months from the date of receipt of a copy of this order - Appeal is allowed - substantial questions of law are answered in favour of the assessee and against the Revenue.
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2022 (6) TMI 977
Evasion of Central Excise duty - non-maintenance of invoices - non-payment of applicable duty - HELD THAT:- The show-cause notice alleges that the appellants have evaded duty of Rs.22,56,445/-. The verification report submitted by the Department in respect of 62 invoices as per the direction of the Bench vide order dated 15.01.2020, shows that the appellants have discharged the duty of Rs.20,91,667/-. Therefore, it is found that to that extent, the Demand does not sustain. The duty of balance amount of Rs.1,64,778/- appears to have been not paid as per the verification report. Though the appellant claims that he has paid the duty, but no evidence of the same has been provided. Moreover, the Range Superintendent has given a fair opportunity and there are no reason whatsoever to dis-believe its report and accept the submission of the appellants that the duty is paid - the duty of Rs.1,64,778/- remains to be considered paid along with interest under Section 11B of the Central Excise Act, 1944. It is found that the same is liable to be paid by the appellants. Accordingly, the equal amount of penalty is liable to be paid by the appellants under Section 11AC of the Central Excise Act, 1944. After going to the procedural infraction alleged to be committed by the appellants, it is found that the appellants have not denied the various allegation levied in the show-cause notice. It is found that the show-cause notice did not seek to impose separate penalty under Rule 26 of the Central Excise Rules, 2002 on the appellants. It only proposed to impose penalty under Section 11AC read with Rule 26 of the Central Excise Rules, 2002. As per the findings as above, it is ordered that the appellant shall pay the non-paid duty of Rs.1,64,778/- along with penalty under Rule 11 AC ibid. It is not found that there is need to impose any other penalties. Keeping in view the facts of the case that substantial allegations of the Department that the appellants have not paid duty, have fallen flat - the penalty under Section 26 is inextricably linked to the confiscation of goods as long as there is no confiscation of the goods ordered that there cannot be a case for imposition of penalty under Rule 26. Therefore, it is found that the penalty under Rule 26 cannot be sustained either on the appellant or on the Managing Director of the appellant company. Duty confirmed against the appellant is restricted to Rs.1,64,778/- - Penalty of equal demand under Section 11AC would be confirmed - appeal allowed.
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2022 (6) TMI 976
Invocation of Extended Period of Limitation - international organization or not - applicability of N/N. 108/95-CE dated 28.08.1905 - mistake, willful misstatement or suppression of material facts or any fraudulent activity or not - Department has opined that the Appellants are not eligible for the exemption as JBSE cannot be considered as an international organization within the scope of the Notification - HELD THAT:- Ld. Sr. Counsel has fairly submitted that they are not arguing the case on merits. However, they are disputing the invocation of extended period for issuance of the show cause notice. It is found that a certificate was given by M/s. MSEB on 23.10.2000 and the same was counter-signed by the Principal Secretary (Energy), Govt. of Maharashtra. The Appellants vide letter dated 14.02.2001 have informed the jurisdictional Asstt. Commissioner about their intention to avail the benefit of the Notification No.108/95-CE on the strength of the said certificate. The Appellants have started making clearances within one week of the above said letter. The Appellants have cleared their goods during the period 20.02.2001 to 06.10.2001 and they have been filing RT-12 returns regularly. These facts have not been disputed either in the impugned orders or by the Authorized Representative during the course of hearing. We find that though the department was informed as early as February 2001 took note of the ineligibility of the Notification in June 2003 by which the time limit prescribed for issuance of show cause notice for duty not paid not levied as already expired. The department to cover up their inaction immediately after the submission of the said letter by the Appellants have taken recourse to invocation of extended period. We find that this is not legal and proper. No material evidence has been suppressed by the Appellants with intent to evade payment of applicable duty. In fact only in 2003, the Tribunal has decided that said certificates are not valid for availing exemption under Notification No.108/95-CE. This being so, the Appellants cannot be faulted for availing exemption in the bona fide belief that the said certificate issued by the competent authority is valid for availing the exemption. Under these circumstances and the facts of the case and the case law relied upon by the Ld. Sr.Counsel for the Appellants, we find that no case has been made for invocation of extended period. Appeal allowed - decided in favor of appellant.
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2022 (6) TMI 975
CENVAT Credit - input services - Manpower Supply Agency Service - GTA Inward Freight Service - Security Agency Service - Pest Control Service - HELD THAT:- The same services in the appellant s own case for the different period has been allowed by this tribunal in INTEGRA ENGINEERING INDIA LTD VERSUS C.C.E. S.T. -VADODARA-II [ 2021 (10) TMI 1336 - CESTAT AHMEDABAD] . The appellant is entitled for the Cenvat Credit on the services in question following the decision of this tribunal. The demand in respect of services namely Manpower, Freight Security Service and Pest control service is not sustainable - appeal allowed - decided in favor of appellant.
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2022 (6) TMI 974
CENVAT Credit - input services - Supply of Tangible Goods services - Hiring forklifts for use of handling the material within the factory - HELD THAT:- The contention of the revenue is not correct in as much as it contends that the Supply of Tangible Goods service is not falling under definition of Input service in terms of Rule 2(l) of Cenvat credit Rules, 2004. Though, it is agreed that it does not appear in the inclusion clause of definition however, the main clause of definition is very wide. There is no dispute that the Forklift which is taken on hire under Supply of Tangible Goods service are indeed used for handling all the material which is the part and parcel of process of manufacturing the final product within the factory. Therefore, the forklift which is taken on hire is directly used for the activity of manufacturing of final product. The identical issue has been considered by this Tribunal in the case of LARSEN TOUBRO LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE MUMBAI II [ 2018 (2) TMI 537 - CESTAT, MUMBAI ] wherein the Cenvat Credit in respect of supply for tangible goods service has been allowed - Similarly, in the case of DBOI GLOBAL SERVICES PVT LTD VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI [ 2016 (11) TMI 521 - CESTAT MUMBAI ] the credit on Supply of Tangible Goods service i.e. in respect of electronic equipments has been decided in the favour of the assessee. Credit allowed - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2022 (6) TMI 973
Recomputation of tax and imposition of penalty - whether alleged loan transaction of the Assessee was in fact an instance of suppression of purchases or not? - HELD THAT:- It is seen from the impugned order of the Tribunal that a letter was produced from Mr. Sikaria and placed before the Tribunal in which the statement of the account of the Assessee as appearing in the books of Mr. Sikaria was enclosed. It is further seen that on the part of the Assessee, material was placed to substantiate the contentions that the transaction was in fact a loan transaction. In MITTAL COMPANY VERSUS COMMISSIONER OF SALES TAX, UP., LUCKNOW [ 1987 (8) TMI 420 - ALLAHABAD HIGH COURT ], it was rightly pointed out that although the initial onus was on the Assessee to show that no sale was made, the question arose as to how the Assessee is expected to discharge that onus - Since in that case the Revenue failed to disprove the Assessee s contention, the addition made to the taxable turnover presuming sales, was set aside. As far as the present case is concerned again, the Assessee cannot be expected to negatively prove that there was no purchase suppression. The Assessee in fact placed materials to show that the transaction was a loan transaction. If the Department was to doubt it, it had the onus then shifted to the Department to show that there was in fact the transaction which mimicked purchase suppression. With the Department not having discharged the onus, the authorities below including the Tribunal, the ACST and the STO were in error in proceeding on a presumption that it was a case of purchase suppression. The Court answers the question framed in favour of the Assessee and against the Department and sets aside the impugned orders of the Tribunal, the ACST and the STO - revision petition allowed.
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2022 (6) TMI 972
Reduction of assessment framed under Section 12 (4) of the Orissa Sales Tax Act, 1947 - purchase and sales suppression - business was only four months old on the date of inspection - HELD THAT:- The Tribunal appears to have overlooked the fact that the Assessee had only conducted four months of business in the year in question and that was one factor that weighed with the ACST in reducing the enhancement of the taxable turnover to thrice the actual amount of suppression. In the considered view of the Court, since this was a new venture and it is possible that the Assessee was not fully aware of all the legal requirements, the view taken by the ACST enhancing the taxable turnover to three times the actual suppression did not call for interference. It could not be said to be arbitrary or unreasonable. This Court restores the order of the ACST to file and sets aside the impugned order of the Tribunal. The question framed is accordingly answered in favour of the Assessee and against the Department - Revision petition disposed off.
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2022 (6) TMI 971
Enhancement of tax demand - enhancement of assessment without taking recourse to Rule 50(3) of the Orissa Sales Tax Rules, 1947 - whether enhancement is beyond jurisdiction and not based on material facts on record? - enhancement of turnover in absence of any materials to establish that the goods found short have been sold - determination of sales turnover by the Tribunal can be held to be based on lawful and valid nexus and sustainable in law or not? - validity of disposal of second appeal by the Tribunal without compliance of Rule 57 of the Rules for service of notice inviting cross-objection is justified in view of Section 23(3)(b) of the OST Act read with Rule 52 of the Rules? Whether, such enhancement directed by the Tribunal under Annexure-3 is legally justified? - HELD THAT:- On a bare reading of the impugned order under Annexure-3, it appears that the enhancement was directed not in compliance of Rule 50(3) of the Rules and therefore, in the considered view of the Court, the basic principle of natural justice and the relevant provision in the OST Rules have not been followed. In a similar situation, the enhanced assessment directed by the Tribunal was interfered with in the case of UTKAL SALES CORPORATION VERSUS STATE OF ORISSA [ 2008 (3) TMI 651 - ORISSA HIGH COURT ] and the matter was remanded for a fresh consideration in accordance with law. Non-issuance of notice in terms of Rule 57 of the OST Rules - HELD THAT:- In any case, the Petitioner could have filed a cross-appeal, had it been aggrieved by any part of the order of the ACST. Nevertheless, the Tribunal had an obligation to issue a notice to the Petitioner for submission of cross-appeal as is required under Rule 57 of the OST Rules. STO declined to accept the explanation offered by the Petitioner towards the shortage in stock to the extent of 1899.15 Quintals of paddy which was based on sampling method on the ground that on the date of inspection, the dealer was present and admitted that each bag of paddy weighed 75 Kg - mere stock deficiency by itself could not be sufficient unless it is specifically shown that the suppressed stock was, in fact, sold by the assessee. In the present case, there is no material brought on record from the side of the Department to suggest that the shortage stock was sold by the Petitioner. Therefore, in absence of any such evidence, it would not be just and proper to hold that there was deficiency in stock and so the suppression of sales by the Petitioner. Apart from that, the shortage in stock is based on mere eye-estimation of the inspecting officers, which as discussed earlier, may not be sufficient for the purpose of fixing liability against the Petitioner. In any case, since the shortage of stock, even if it is assumed, per se cannot be a ground for enhancement of turnover, since no material evidence is produced by the Department to further indicate that the same was sold by the Petitioner. Having said that, the Court reaches at a conclusion that the Tribunal was not right in interfering with the order of the ACST and directing enhancement. The predominant issue with regard to the enhancement of turnover and decision thereon by the Tribunal cannot be sustained - the issues involved are answered in favour of the assessee and against the Department.
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Indian Laws
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2022 (6) TMI 970
Dishonor of Cheque - complaint was dismissed without taking cognizance - no notice was issued to complainant - insufficiency of funds - acquittal of the accused - rebuttal of presumption - HELD THAT:- The present complaint is by a private party for the offence punishable under Section 138 of the Negotiable Instruments Act. The complainant is not a public servant. Therefore, presence of the complainant and his/her examination on oath is absolutely necessary before taking the complaint on file. Since the complainant was absent on 12.11.2021, he was called absent and the court finding that the complainant is not interested to proceed with the case further, had dismissed the complaint under Section 256 Cr.P.C. - The dismissal of the complaint can be made only after the same is taken on file. In the instant case, it appears that the learned Magistrate, even before issuing process to the accused, had dismissed the complaint for default viz., for the absence of the complaint. Section 256 Cr.P.C. is the only provision which deals with the dismissal of the complaint leading to the acquittal of the accused. As per the provision, it will be applicable only if the complaint is taken on file and summons is issued to the accused and on the date appointed for the appearance of the accused, on his/her appearance, if the complainant does not appear, the Magistrate shall acquit the accused unless, if, for some reason, he thinks proper to adjourn the hearing of the case to some other date - The object of the provision is that the court should take serious note of the absence of the person who approached the court to set the law in motion, when the accused person makes himself present before the court for enquiry. The complaint has been axed even before it was numbered and taking on file. In the opinion of this court, the Trial Court has not exercised its discretion judicially and fairly the order passed misconstruing the scope of Section 256 is illegal and the impugned order is liable to be set aside and accordingly, it is set aside. This court is also of the view that normally, when an order is passed under Section 256 Cr.P.C., only an Appeal will lie. Now, that, an illegal order has been passed even prior to taking of cognizance, the impugned order is set aside invoking the inherent powers of this court under Section 482 Cr.P.C. Further, the impugned order being one passed at pre-cognizance stage, this court is of the view that no notice is required to be sent to the respondent/proposed accused. The Criminal Original Petition is disposed off.
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