Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
June 24, 2023
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Discussion on GST on Cotton purchase - Who is agriculturist - Cultivation of land through the Servant / Employees - Applicability of Reverse Charge Mechanism (RCM)
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Exemption from GST - supply of printing services like question papers, OMR sheets, Answer sheets, marks card etc., using his own paper and ink - Printing of test papers/question papers is the Principal supply of the composite supply and HSN classification of the entire supply should be done based on Principal supply. Supply of test papers/question papers would constitute supply of service falling under heading 9989 of the scheme of classification of services - Benefit of exemption available - AAR
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Seeking grant of Bail - irregular availment of ITC - invoices received from bogus / dummy supplier - since primary concern of Department is to trace and collect the GST evasion. Bail cannot be denied to accused as a punishment - Bail granted subject to conditions. - DSC
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Seeking grant of pre-arrest bail - Territorial jurisdiction of court - supply of material/ goods without invoices to evade the tax - the corporate office of MEPL is at Noida and the investigation has been initiated by DGGI Zonal unit Jaipur but fact remains that applicant also operates through MEPL in Marketing Office of Delhi. Therefore it cannot be laid down as an absolute rule that Delhi court has no jurisdiction at all - In the reply filed by the DGGI Jaipur Zonal Unit, no specific amount has been mentioned about the tax evasion. - Protection granted - DSC
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Reversal of Input Tax Credit (ITC) - Availing ineligible input tax credit (ITC) - Necessary particulars as demanded were supplied or not - The determination/crystallisation of the amount to be reversed on a comparison of the ITC ought to have been put to the petitioner in the show cause notice itself prior to passing of the impugned order, such that the petitioner had been afforded sufficient opportunity to respond the same and, or provide details in support of the claim of ITC - Demand confirmed on the basis of general notices issued cannot sustained - HC
Income Tax
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Addition u/s 68 - genuineness and credit worthiness of the transaction in question - As per HC assessee though has disclosed the source of the deposit but could not establish the nature thereof and conditions which are required to be proved by the Assessee as per Section 68 could not be proved by him - Apex Court dismissed the SLP of the assessee (Additions confirmed) - SC
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Reopening of assessment u/s 147 - application of mind by the PCIT while granting sanction u/s 151 - validity of order disposing objections questioned - PCIT has simply endorsed “Yes”. No date is mentioned and it does not also disclose why he felt there was a need to grant the sanction. None of these points have been discussed in the order disposing the objections - Matter restored back before the AO for denovo consideration - HC
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Income from other sources u/s 56(2)(viib) - FMV determination of shares - The decision of the tribunal holding that, the DCF method adopted by the assessee for determining the fair market value of the share as per Rule 11UA2 does not require any interference - additions made u/s 56(2)(viib) are not sustainable in law" sustained. - HC
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Reassessment proceedings against dead person - whether curable defect u/s 292BB? - The purpose of issue of notice is to make the noticee aware of the nature of the proceedings. Once the nature of the proceedings is made known and understood by the assessee, he should not be owed to take advantage of certain procedural defects. That was the purpose behind the enactment of Section 292BB. It cannot be invoked in cases where the very initiation of proceedings is against a dead person - AT
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Revision u/s 263 - Receipts against sale of plots - Mismatch between the amount disclosed by the assessee and amount shown as per 26AS - Method of accounting - When all the receipts are duly reflected in the subsequent A.Ys by following the percentage completion method. The view of the AO is a plausible view and merely because the PCIT holds a different view, then that of the AO this cannot be a ground to cancel the order of the AO being erroneous and prejudicial to the interest of Revenue. - AT
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Revision u/s 263 - Right issue shares - applicability of section 56(2)(viib) on the issue of shares by the company by stating that this section applied only to the residents and not to the non-residents - If the view point of the ld. PCIT is approved, it would give a licence to Pr. CITs to revise any assessment order in the second situation category cases without first satisfying the jurisdictional condition of showing the defect in the approach of the AO in accepting the assessee’s claim. - AT
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Refund of taxes TDS - Tax Credit u/s 199 - Defective ROI filled - PAN of a non existing entity (amalgamated) used for filing ROI - when ld AO has assessed income of the assessee independently i.e. Without considering the ROIs filed, he is duty bound to give credit of taxes u/s 199 of the Act. Accordingly due refund of taxes should be allowed to the assessee. - AT
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Enhancement of income by CIT(A) - Valuation of the shares as per Rule 11UA - Additions u/s 56(2)(viib) - Determination of Consideration received for such shares in exceeds the fair market value of the shares (FMV) - the CIT(A) have committed an error in rejected the valuation done by the assessee from prescribed expert as per the prescribed method, which ultimately resulted in enhancement of income of the Assessee u/s 251(1) of the Act - Additions deleted - AT
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Income deemed to accrue or arise in India - non-resident corporate entity - Taxability of royalty income received by the assessee on subscribers units from original equipment manufacturers (OEMs) located outside India and royalty income on infrastructure equipments - royalty income received from OEMs located outside India is not taxable in India - AT
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Addition on account of cash deposit to the bank account of the assessee - assessee is consistently submitting that the assessee has two bank accounts in her name and the assessee is earning cash income from tuition since very long time and has been filing her return of income for 20 to 25 years showing tuition income, rental income and interest income which was earned by the assessee from providing loans to her husband’s brother firm and these amounts consists of income as well as savings of assessee earned during the long period of life - Additions deleted - AT
Customs
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Classification of imported goods - squid liver powder - Preparations of a kind used in animal feeding - CTH 230120 preferred by the appellants covers ‘flours, meals and pellets, of fish or of crustaceans, molluscs or other aquatic invertebrates’. The heading does not cover products containing ingredients of plant origin. - the classification of the ‘Squid Liver Powder’ has been correctly done under CTH 23099090 - AT
Indian Laws
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Dishonour of Cheque - Territorial jurisdiction of the court - As per amendment, the Courts situated at both the places i.e. of drawer Bank and drawee Bank, would have the territorial jurisdiction to entertain the complaint - The trial Court at Bathinda is directed to entertain the complaints filed by the petitioners and proceed further with the trial as in accordance with law. - HC
Service Tax
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Levy of Service Tax - Manpower Services - The total outflow of labour charges has been divided into two parts. One part pertains to the labour charges paid to contractors and the second part pertains to labour charges paid to locally hired workers by the Company. Based on such bifurcation, the Adjudicating Authority has correctly arrived at the quantum of Service Tax applicable for the Labour Charges paid to the contractors - Demand of ST was rightly dropped by the Adjudicating Authority - AT
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Levy of Service Tax - construction of residential complex for Indian Army and WBPDCL - As it is not in dispute that the residential flats constructed by the assessee, are for personal use of Indian Army and WBPDCL, which are a part of Government of India/State Government. Therefore, the said service provided by the assessee is to Government of India for personal use, benefit of exemption allowed - AT
Central Excise
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Area based exemption - Set up of new unit at the same site / old site - Old unit was closed several years ago i.e before 1996 and Excise registration has been surrerndered in 2008 and unit was sold - Fresh licence obtained from office of the Divisional Forest Officer, Dibrugarh, Assam in 2008 - On going through the finding of the Ld.Commissioner(Appeals) in the impugned order and the documents placed here, which are evident that the respondent has established a new unit although at the same site. - The respondent is entitled for benefit of exemption - AT
Case Laws:
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GST
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2023 (6) TMI 988
Maintainability of petition - availability of statutory remedy of appeal against the impugned order - non-constitution of the Tribunal - also prevented from availing the benefit of stay of recovery of balance amount of tax - HELD THAT:- The respondent State authorities have acknowledged the fact of non-constitution of the Tribunal and come out with a notification bearing Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019 for removal of difficulties, in exercise of powers under Section 172 of the B.G.S.T Act, which provides that period of limitation for the purpose of preferring an appeal before the Tribunal under Section 112 shall start only after the date on which the President, or the State President, as the case may be, of the Tribunal after its constitution under Section 109 of the B.G.S.T Act, enters office. Subject to deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under sub-section (6) of Section 107 of the B.G.S.T. Act, the petitioner must be extended the statutory benefit of stay under sub-section (9) of Section 112 of the B.G.S.T. Act. The petitioner cannot be deprived of the benefit, due to non- constitution of the Tribunal by the respondents themselves - the statutory relief of stay, on deposit of the statutory amount, however in the opinion of this Court, cannot be open ended. For balancing the equities, therefore, the Court is of the opinion that since order is being passed due to non - constitution of the Tribunal by the respondent-Authorities, the petitioner would be required to present/file his appeal under Section 112 of the B.G.S.T. Act, once the Tribunal is constituted and made functional and the President or the State President may enter office. Petition disposed off.
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2023 (6) TMI 987
Validity of Garnishee notice - appellant has paid the entire tax as demanded and has also preferred an appeal before the appellate authority - before the expiry of the period for filing the appeal, the garnishee notice was issued - HELD THAT:- In terms of Section 107(7) of the CGST Act read with Section 107(6) for preferring an appeal, the aggrieved assessee is required to deposit 10% of the disputed tax. It is not in dispute that the appellant has paid the entire tax, which has been noted in the order dated 19th December, 2022 passed under Section 73(9) of the W.B.G.S.T. Act, 2017, which shows that the appellant/petitioner has paid the tax of Rs. 63,03,920.00. Considering the facts and circumstances of the case and also the statutory requirement, which mandates payment of only 10% of the disputed tax, it is opined that a condition need not be imposed by directing the appellant/petitioner to pay 20% of the interest. The appeal is allowed and that portion of the order passed by the learned Single Bench directing the appellant to pay 20% of the interest amount is set aside and direction is issued to the appellate authority to consider the appeal filed by the appellant on merits and in accordance with law after affording an opportunity of personal hearing.
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2023 (6) TMI 986
Seeking release of detained goods alongwith vehicle - bogus invoice declaring the goods as Ramdana has been used to show the goods as bona fide - non-existent supplies - HELD THAT:- The writ petition is disposed of by directing the respondent no. 3 to take appropriate steps for release of the tea consignment in favour of the petitioner in accordance with law if there is no impediment for release tea consignment within a period of one week from the date of receipt of the copy of the order subject to furnishing an undertaking before the authority, as and when, if required, the petitioner will appear before the authority for enquiry/investigation. It is made clear that the authorities, i.e. the State Authorities as well as respondent no. 4 shall be at liberty to carry out further investigation with regard to the poppy seeds and it is found with regard to illegal transportation of the poppy seeds, the authorities are free to take appropriate steps in accordance with law.
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2023 (6) TMI 985
Availability of effective alternate remedy - Disallowance of Input Tax Credit - Cancellation of input tax credit - HELD THAT:- On a very perusal of the impugned order reveals that there is an effective alternate remedy available before the appellate authority, namely the Deputy Commissioner, GST Appeal, Salem. Without exercising the alternate remedy, filing of this Writ petition is not sustainable before Law. This Writ petition is dismissed with liberty to the petitioner to file an appeal before the appellate authority, namely the Deputy Commissioner, GST Appeal, Salem with a period of four (4) weeks from the date of receipt of copy of this order raise all the grounds that are raised in this Writ petition before the appellate authority.
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2023 (6) TMI 984
Exemption from GST - Composite supply - Supply of services to educational institution - supply of printing services like question papers, OMR sheets, Answer sheets, marks card etc - serial no. 66(b)(iv) of Notification No. 12/2017 dt: 28.06.2017 - HELD THAT:- Not withstanding that the supply of papers is an integral part of the composite supply, without which the content of the test papers/question papers cannot be printed, but the same cannot be called as Principal supply as the purpose for which the educational institutes contracted with applicant is not for buying papers but for the printing services. The content to be printed is based on the specifications given by the educational institutes and the applicant has no role in deciding the same. Therefore supply of printing [of the content supplied by the recipient of supply] is the principal supply and the same is clarified by Circular No. 11/11/2017-GST dated 20.10.2017. Printing of test papers/question papers is the Principal supply of the composite supply and HSN classification of the entire supply should be done based on Principal supply. Supply of test papers/question papers would constitute supply of service falling under heading 9989 of the scheme of classification of services as the usage rights of the manuscript material of Question Papers/test papers (intangible inputs) are owned by the Educational Institutes and the physical inputs used for printing the same belong to the applicant. Applicability of Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended vide clause (o) of Notification No. 2/2018-Central Tax(Rate) dated 25.01.2018, read with Sr. No. 27 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 - HELD THAT:- As per Sr. No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate), as amended, services provided to an educational institution, by way of services relating to admission to, or conduct of examination by, such institution is exempted from payment of Goods and Services Tax. It is to be noted that exemption is given only to services and not to goods in this Notification and the principal supply of the composite supply made by the applicant is printing services. The service of printing of question papers, if supplied by the applicant to other than educational institutions would attract Goods and service tax at rate as specified under Sr. No. 27(i) of Notification No. 11/2017-Central Tax (Rate), as amended, at rate of 12%.
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2023 (6) TMI 983
Seeking grant of Bail - irregular availment of ITC - invoices received from bogus / dummy supplier - HELD THAT:- Having considered the submissions and taking note of entire facts, evidence including statements, recorded uptil now in the investigation of CGST. Although it has come in the investigation that there have been fake details of vehicle of supply of goods furnished in uploading e way bills on portal. There is also various lapses evident regarding supply of goods by suppliers of M/s Dhruv Steels and M/s Varuni Steels. As reflected in the reply filed by Department some of the suppliers at L-1 level were found to be inactive on GST portal and even inward supply chain at L-3 and L-4 supplier level was also inconsistent. Supply chain of bogus invoices started from 27 non-operational firms. All these things certain create doubt as to the inculpability of the accused in the matter. However having so noticed, taking into consideration the ratio laid down in the judgment of TARUN JAIN VERSUS DIRECTORATE GENERAL OF GST INTELLIGENCE DGGI [ 2021 (12) TMI 135 - DELHI HIGH COURT] , since primary concern of Department is to trace and collect the GST evasion. Bail cannot be denied to accused as a punishment - Upon filing of complaint, accused would certainly be prosecuted and would be liable to pay penalty and funds availed by way of illegitimate ITC if found guilty. Application disposed off.
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2023 (6) TMI 982
Seeking grant of pre-arrest bail - supply of material/ goods without invoices to evade the tax - HELD THAT:- Examining the provisions of section 438 Cr.PC, perusal of the same would show that though expression the High Court and the Session Court has been given, but the provisions of section 438 Cr.PC nowhere lays down the High Court or the Court of Session where offence has been committed. Basic rule of interpretation of any provision of law is to understand the bare provision of statute with the meaning as it conveys, court cannot interpret the provision in any other manner than the meaning expresses. The High Court in itself does not convey the High Court within territorial jurisdiction of which offence has been committed. Had such been the intention of the legislature, there would not have been any constrain in mentioning the High Court or the Court of Session within whose territorial jurisdiction the offence has been committed. There cannot be any denial to the general legal proposition that in view of the provisions of section 177 to 189 falling in Chapter VIII of Cr.PC, generally the court of competent jurisdiction is where the offence has been committed. As such that court generally entertain application for relief of bail etc. There has always been divergent view of different High Courts on the question of entertaining the anticipatory bail application within the territorial jurisdiction of the court where the offence has not been committed. Section 438 being a special provision for protecting a person apprehending his arrest, such provision cannot be restricted in every possible situation to file the application only within that court - Kolkata High Court in B.R. SINHA AND ORS. VERSUS THE STATE [ 1981 (7) TMI 249 - CALCUTTA HIGH COURT] has taken the view that High Court within whose territorial jurisdiction person resides is competent to grant anticipatory bail, even if offence is alleged to have been committed outside its jurisdiction. Similarly, that judgment was relied upon by Karnataka High Court in L.R. NAIDU VERSUS STATE OF KARNATAKA [ 1983 (10) TMI 295 - KARNATAKA HIGH COURT] . In the facts of the present case no doubt the corporate office of MEPL is at Noida and the investigation has been initiated by DGGI Zonal unit Jaipur but fact remains that applicant Prashant Kumar Singh also operates through MEPL in Marketing Office of Delhi. Therefore it cannot be laid down as an absolute rule that Delhi court has no jurisdiction at all - Therefore taking into consideration the fact that accused/ applicant is ready and willing to join the investigation for furnishing all the necessary documents etc. and also for the reason that in the reply filed by the DGGI Jaipur Zonal Unit, no specific amount has been mentioned about the tax evasion. The accused is certainly required to be protected from possible arrest till the time he joins the investigation with DGGI Jaipur Unit subject to joining the investigation as and when called upon - application disposed off.
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Income Tax
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2023 (6) TMI 981
Income deemed to accrue or arise in India - India - USA DTAA - FTS OR FIS - payments received by the Assessee from its Indian Customers on account of Centralized Services viz. sales and marketing, loyalty programs, reservation service, technological service, operational services and training programs/human resources do not constitute Fee for Technical Services u/s 9(l)(vii) or 'Fee for included services as defined under Articles 12(4) (a) of the Indo-US DTAA - HELD THAT:- Delay condoned. Leave granted. Issue notice on the appeal, returnable in four weeks.
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2023 (6) TMI 980
Applicability of Section 43B - electricity duty collected by the assessee as per the provisions of Punjab Electricity (Duty) Act, 1958 - As per HC applicability of Section 43B on the electricity duty, needs to be answered against the revenue - HELD THAT:- No ground to interfere with the impugned judgment and order passed by the High Court. Accordingly, the Special Leave Petition is dismissed. Pending application(s), if any, stand disposed of.
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2023 (6) TMI 979
Addition u/s 68 - genuineness and credit worthiness of the transaction in question - As per HC assessee though has disclosed the source of the deposit but could not establish the nature thereof and conditions which are required to be proved by the Assessee as per Section 68 could not be proved by him - HELD THAT:- Delay condoned. We are not inclined to interfere with the impugned judgment and hence, the special leave petition is dismissed. Pending application(s), if any, shall stand disposed of.
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2023 (6) TMI 978
Reopening of assessment u/s 147 - application of mind by the PCIT while granting sanction u/s 151 - validity of order disposing objections questioned - Petitioner states that reopening notice was issued after the expiry of four years of the assessment year but was candid to say that this was a case where no order u/s 143(3) had been passed - HELD THAT:- We find that in the order Rejecting petitioner s objections, has not given any reasons as to why he did not find any merit in the objections raised by the assessee. The assessee had also, in his objections, raised the issue of non application of mind by the PCIT while granting sanction u/s 151 - PCIT has simply endorsed Yes . No date is mentioned and it does not also disclose why he felt there was a need to grant the sanction. None of these points have been discussed in the order disposing the objections. We quash and set aside the order dated 15th November 2019 disposing the objections and remand the matter for denovo consideration to the Jurisdictional Assessing Officer (JAO).
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2023 (6) TMI 977
Income from other sources u/s 56(2)(viib) - FMV determination - fair market value of the shares shall be the value determined under the prescribed formula or as per DCF method - HELD THAT:- As tribunal considering the provisions contained in Section 56(2)(viib) as well as Rule 11UA(2) of the Rules observed that as per the aforesaid Rule, fair market value of the shares shall be the value determined under the prescribed formula or as per DCF method which is at the option of the assessee and, therefore the DCF method adopted by the assessee for determining the fair market value of the share as per Rule 11UA2 does not require any interference - additions made u/s 56(2)(viib) are not sustainable in law and, thereby the tribunal has upheld the order passed by the CIT (Appeals) to the said extent and, thereby rejected the appeal filed by the appellant Tribunal. No substantial question of law.
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2023 (6) TMI 976
Addition of provision made on account of performance service incentives by holding the same to be an unascertained liability - HELD THAT:- The Bench is of the considered opinion that learned CIT(Appeals) has failed to appreciate that it was the contingent liability or an estimated provision as it was directly related to the performance of employees. The amount stood accrued to the employee for all purposes and on completion of continuous period of service it would merely became payable. It gave rise to a contingent liability. So a provision of that amount cannot be considered to be one for unascertained liability. At the same time, since this incentive was part of the pay and emoluments of the employee, TDS was supposed to be deducted only at the time of payment. Thus, the provision of non-deduction of TDS cannot be considered to be against the Act. CIT(Appeals) has fallen in error in considering the same to be in the nature of bonus, which was not at all the case of the AO nor for which a specific query was raised at the appellate stage by the CIT(Appeals). Thus, the ground deserves to be allowed. TDS u/s 194IB - Disallowance of payment made on account of rent to landlord - no TDS has been deducted by the appellant company - HELD THAT:- TPPL was separate entity and appellant cannot take benefit of the deduction of the TDS by third party. However, the fact is that assessee was not the tenant under the lease agreement dated 11.11.2003. What can be concluded is that assessee may be a sub-tenant qua the land-lord on the basis of estoppels. The Bench is of the considered opinion as there is tri-parte transaction and TPPL is responsible for payment of Rent, so as per 194-IB of the Act, TPPL had liability to deducted the tax. The assessee was not making payment to the landlord/lessor but to actual lessee, TPPL, through whom assessee was in possession as sub-lessee thus the deduction of tax by TPPL met the mandate of law. Learned Tax authorities have failed to appreciate the aforesaid and accordingly ground raised is allowed. Nature of expenses - interior work on basement, for building painting work and for woodwork and painting - tax authorities have considered the same to be lease-hold improvements of enduring nature and, therefore, held that assessee is entitled for depreciation and these expenditure are not of revenue nature - HELD THAT:- There is nothing pointed out in the order of learned tax authorities that they have examined the lease agreement to conclude that expenditure brought benefit of enduring nature to assessee who was in possession under a lease agreement between the lessor Sardar Manmohan Singh and TPPL. Thus, the conclusion of learned tax authorities that the repairs or any interior work was of enduring nature and capital in nature is not supported by any cogent reasoning by way of examining nature of rights of the assessee in the premises. When assessee is enjoying the premises then the work in the nature of interior decoration and painting and woodwork cannot be considered to be of enduring nature. These are all improvements involving temporary material and can be very well removed at the time of vacation of the premises. The ground is decided in favour of the assessee. Provision made on account of audit fee payable - allowable revenue deduction or not? - HELD THAT:- Tax authorities have considered it to be prior period expenses and they have not crystallized during the year. However, what they failed to appreciate is that as the bill was raised by auditors the payment was made. Even otherwise when the provision was not disturbed in assessment of FY 2006-07, then in any case when the provision was reversed in the present FY, that entitled assessee to debit the expenses in the present FY. Consequently, ground raised is sustained and is allowed. Software licenses expenditure - Nature of expenses - whether to be in the nature of perpetual licenses and having enduring benefit while denying the expenditure incurred on software purchase - HELD THAT:- DR has tried to convince the Bench on the basis of nature of software and bills that as they were used for many years after purchase so they have to be considered to be of perpetual license. The law in regard to same stands crystallized that the Expenditure on Application Software is revenue. As claim was allowed in A.Y. 2007-08 U/s 143(3) and in AY 2009-10 the same has been deleted at the stage of learned first appellate authority. In the light of aforesaid, the ground is sustained.
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2023 (6) TMI 975
Reassessment proceedings against dead person - whether curable defect u/s 292BB? - HELD THAT:- Notice u/s 143(2) under which jurisdiction was assumed by the assessing officer was issued to a non- existent/ dead person which is not allowed. Issuance of notice upon a dead person and non-service of notice does not come under the ambit of mistake, defect or omission. Consequently, Section 292B of the Act, 1961 does not apply to the present case. The purpose of issue of notice is to make the noticee aware of the nature of the proceedings. Once the nature of the proceedings is made known and understood by the assessee, he should not be owed to take advantage of certain procedural defects. That was the purpose behind the enactment of Section 292BB. It cannot be invoked in cases where the very initiation of proceedings is against a dead person AO exercised jurisdiction in erroneous way. The ground raised in this regard stands allowed.
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2023 (6) TMI 974
Levy of late fees u/s 234E - assessee filed TDS statement in Form No.24Q for quarter-4 belatedly - CPC processing the TDS statement u/s 200A levied late fee - HELD THAT:- There is nothing on record to show that assessee has been served with an intimation u/s 200A of the Act for Assessment Years 2013-14 to 2015-16. The reminder letter issued by the ITO(TDS) regarding the payment of outstanding demands payable for the quarter for the above mentioned Assessment Years are placed on record along with Form No.36. CIT(A) had dismissed the appeals of the assessee by stating the appeals have been preferred against the intimation of demand and not against the order u/s 200A - CIT(A) has not held that there is a delay in filing the appeals before him, if the time limit is calculated from the orders passed u/s 200A - In the interest of justice and equity, the CIT(A) ought to have decided the cases on merits instead of dismissing them in limine. As the provisions of charging of late fees under section 234E of the Act was introduced w.e.f. 01.06.2015, we hold that issue relating to charging of interest under section 234E of the Act is covered in favour of the assessee and we delete the late fee charges under section 234E of the Act, for the Assessment Years 2013-14 to 2015-16 - Decided in favour of assessee.
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2023 (6) TMI 973
Approval u/s 80G - Charitable activity u/s 2(15) - denial of approval real purpose of the trust does not get established - HELD THAT:- Appellant failed to establish the real purpose of the trust and the receipts and the expenses shown in the bank statement remained uncorroborated and the Appellant has not provided the financial statement for the year ending 31st March, 2018. Assessee has also failed to appear before us to support his case and failed to submit any material, thus, we find no reason to interfere with the findings and the conclusion of the CIT(E), we find no merit of the assessee. Grounds of Appeal of the assessee are dismissed.
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2023 (6) TMI 972
Revision u/s 263 - Receipts against sale of plots - Mismatch between the amount disclosed by the assessee and amount shown as per 26AS - Method of accounting - HELD THAT:- As in the present case, the assessee furnished a reply in response to the question raised by the AO and had taken a plausible stand explaining the mismatch in Form 26AS and the amount received and also had submitted the year of taxation of the receipts and further had made out a case that the assessee has opted for percentage completion method and therefore, the accounting treatment given by the assessee to the receipts is in accordance with law. How the method of accounting opted by the assessee was erroneous and prejudicial to the interest of the Revenue when the method of accounting opted by the assessee was proper under AS-7 and further the learned PCIT has also failed to bring on record after making the inquiries how the order of the AO has become prejudicial to the interest of the revenue and erroneous. More particularly, when all the receipts are duly reflected in the subsequent A.Ys by following the percentage completion method. The view of the AO is a plausible view and merely because the PCIT holds a different view, then that of the AO this cannot be a ground to cancel the order of the AO being erroneous and prejudicial to the interest of Revenue. There is a difference between inadequate inquiries and lack of inquiry. In the present case sufficient and adequate enquiries were made by the AO. Merely because the AO had not written a detailed and elaborate order for accepting the submissions of the assessee, the same cannot be a ground to declare the order of the Assessing Officer as nonest. PCIT had only pointed out the alleged mismatch between the payment accounted for and TDS deducted. The above-said mismatch had been duly explained by the assessee during the assessment proceedings as well as in the revision proceedings, as the said payment (difference) was reflected in the subsequent year. In view of the above, it cannot be said that the order of the Assessing Officer was prejudicial to the interest of the Revenue. Therefore, the order passed by the learned PCIT u/s 263 of the Act being not in accordance with law is cancelled. Appeal filed by the assessee is allowed.
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2023 (6) TMI 971
Revision u/s 263 - Right issue shares - applicability of section 56(2)(viib) on the issue of shares by the company by stating that this section applied only to the residents and not to the non-residents - assessee is engaged in the business of developing and operating industrial and logistics park - case of the assessee was selected for limited scrutiny on the ground of Large share premium received during the year - HELD THAT:- As incumbent upon the PCIT to specifically point out where the AO went wrong in accepting the assessee s explanation. His action in generalizing the issue to the effect that the AO failed to make enquiry to examine and verify the reasonableness and genuineness of share premium, cannot be accorded our imprimatur when all such details were already on record and examined by the AO. If the view point of the ld. PCIT is approved, it would give a licence to Pr. CITs to revise any assessment order in the second situation category cases without first satisfying the jurisdictional condition of showing the defect in the approach of the AO in accepting the assessee s claim. Here is a case in which the assessee issued shares with face value of Rs. 10/- at a price of Rs. 6,526.96 per share. The shares were right issued to the existing shareholders. The assessee justified the receipt of share premium at this level with the help of report of a valuer. Such report was drawn on 05-12-2016, when the assessee issued shares at the same amount of premium in the immediately preceding assessment year 2017-18 to Indospace Ventures II, Mauritius. Assessment for the A.Y. 2017-18 was completed u/s. 143(3) without casting any doubt or aspersion over the reasonableness of the amount of premium charged on the shares. It is the same amount of premium which has been charged by the assessee during the year under consideration on fresh issue of shares within a gap of six months from the last issue of shares, that has been doubted by the ld. PCIT in the present case. We are satisfied that the PCIT was not justified in revising the assessment order passed u/s 143(3) of the Act. The revisionary order is hereby set aside and quashed. Appeal is allowed.
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2023 (6) TMI 970
Rectification u/s 154 - AO power to re-visit the order passed by the Tribunal or/Ld.CIT(A) - Once the appeal of the assessee against quantum additions have attained finality upto the level of the Tribunal then question arises as to whether the AO can rectify the order passed by him on an issue which is highly debatable and after the order got a seal of approval from the Ld.CIT(A). HELD THAT:- In our view, the answer is NO since in our considered opinion, it will amount to re-visiting the order of the assessment, which has attained finality. Recently, in the identical facts, in the case of Shri Krishna Kumar D. Shah [ 2023 (5) TMI 1208 - ITAT HYDERABAD] the decision relied upon by the learned DR, we had examined the law on the subject and after examining the same, we have heed that the AO has no power to re-visit the order passed by the Tribunal or/Ld.CIT(A)
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2023 (6) TMI 969
TP Adjustment - addition pertaining to interest on outstanding receivables - DRP have erred in rejecting the economic analysis undertaken by the Appellant by conducting a fresh economic analysis for the impugned transaction - HELD THAT:- We note that the ITAT in assessee s own case for immediately preceding assessment year i.e. AY 2015-16 [ 2023 (2) TMI 1105 - ITAT DELHI ] on the impugned issued as held since the assessee has provided similar services to unrelated parties and claims that no interest was charged with respect to outstanding receivables from unrelated parties, in all fairness, this contention cannot be brushed aside lightly, though needs due verification by lower authorities. We, therefore, restore this issue to the file of the TPO/AO. Assessee is directed to furnish necessary documentary evidences to demonstrate that on outstanding receivables from unrelated parties, no interest was charged on similar transactions as that with AEs and the Assessing Officer/TPO is directed to examine the same and decide the issue afresh as per provisions of law.
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2023 (6) TMI 968
Draft assessment order in the name of a non existing/Amalgamated company - defective ROI filled - PAN of a non existing entity used for filing ROI - assessee Star Sports India Pvt. Ltd. got amalgamated with Star India Pvt. Ltd. - Whether draft Assessment order passed as void ab initio? - HELD THAT:- We hold that the ld DRP has correctly held the ROIs filed by assessee as non est and has also correctly quashed the draft assessment order. Thus we confirm the direction of the ld DRP to that extent. Refund due to the assessee denied, we hold that when ld AO has assessed income of the assessee independently i.e. Without considering the ROIs filed, he is duty bound to give credit of taxes u/s 199 of the Act. Accordingly due refund of taxes should be allowed to the assessee. Ld AO is directed to verify the claim of refund and allow the same in accordance with the law. Thus all the grounds of Memorandum of appeal of the ld AO are dismissed.
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2023 (6) TMI 967
Addition u/s 68 - unexplained share premium and share capital - HELD THAT:- Assessee effectively discharged the burden cast upon them u/s 68 of proving identity of the investors, the genuineness of the transactions and the creditworthiness of the parties with respect to the transactions that took place between the Assessee and the investors. Since the Assesses filed the bank statements of the parties conclusively proving that the impugned sums were received through normal banking channels from the bank accounts of the parties, the burden of proving the genuineness of the transactions between the Assessee and the parties and the creditworthiness of the parties to invest in the share capital of the Assessee Companies stood discharged. Once the Assessee established the identity of the parties, the genuineness of the transactions and the creditworthiness of the parties to invest in the share capital of or advance loans to the Assessee Companies, the burden shifted to the Revenue to prove the contrary. The Ld. A.O has failed to discharge the secondary onus of demolishing/disproving the genuineness of the documentary evidences filed by the Assessee. As held in the cases cited above, before fastening any liability upon the Assessee, the A.O is required to show by bringing on record tangible material that the amounts received as share capital/loans from the investors/lenders actually emanated from the coffers of the Assessee or represented the undisclosed income of the Assessee. Addition made u/s 68 as sustained by the CIT(A) his hereby deleted. Decided in favour of assessee. Enhancement of income by CIT(A) under the head from other sources by applying Section 56(2)(viib) - Addition on protective basis by rejecting the valuation report furnished under Rule 11UA (2) (b) of the Income Tax Rules i.e. Discounted Cash Flow Method (DCF Method) - HELD THAT:- There is no dispute that legally the assessee had option to choose the valuation of the shares as per Rule 11UA of the IT Rules. When the statute provides for particular procedure, authorities have to follow the same and cannot interpret or permitted to act in contravention of the statute. The said legal principal is based on the legal maxim Expression Unis Est Exclusion Alterius . Thus, we hold that the CIT(A) have committed an error in rejected the valuation done by the assessee from prescribed expert as per the prescribed method, which ultimately resulted in enhancement of income of the Assessee u/s 251(1) of the Act. Accordingly, we allow Ground Nos. 2 of the Assessee and delete the enhancement made by the CIT(A).
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2023 (6) TMI 966
Income deemed to accrue or arise in India - Taxability of royalty income received by the assessee on subscribers units from original equipment manufacturers (OEMs) located outside India and royalty income on infrastructure equipments - As per AO since the subscriber units(handsets/equipments) containing CDMA technology/patent is ultimately used in India by subscribers, the royalty connected to such patent would be taxable in India as the OEMs selling the subscribers units/equipments have PEs in India. - assessee is a non-resident corporate entity incorporated in USA HELD THAT:- Considering the submission of assessee that locking of CDMA subscriber units to make it India-specific or network carrier-specific, was discontinued in assessment year 2010-11 and thereafter, subscriber units available were open market handsets not locked in any specific service provider, in our view, the report of the technical expert do not have any relevance in so far as the impugned assessment years are concerned. In any case of the matter, the assessment order makes it clear that driven by the assessment order passed for the assessment year 2012-13, the AO has concluded that the royalty income received from OEMs located outside India is taxable in India. Pertinently, while deciding the appeals for the assessment years 2009-10 to 2012-13 [ 2018 (4) TMI 1362 - ITAT DELHI] the Tribunal, having taken note of the relevant facts and earlier decisions on the issue, has held that the royalty income received from OEMs located outside India is not taxable in India. Decided in favour of assessee.
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2023 (6) TMI 965
Addition on account of cash deposit to the bank account of the assessee - assessee is consistently submitting that the assessee has two bank accounts in her name and the assessee is earning cash income from tuition since very long time and has been filing her return of income for 20 to 25 years showing tuition income, rental income and interest income which was earned by the assessee from providing loans to her husband s brother firm and these amounts consists of income as well as savings of assessee earned during the long period of life - HELD THAT:- From the copy of the passbook with SBI it is clear that the assessee has withdrawn Rs. 24 lakhs during the FY 2014-15 from the period 29.05.2014 to 21.03.2015 and the amount of cash deposit to UCO bank i.e. Rs. 9,99,000/- and lesser than the amount of cash withdrawals by the assessee during the same financial period. AO was not correct in considering the available cash out of cash in hand of Rs. 3,24,500/- for the purpose of adjudication the issue keep aside the factum of huge cash withdrawals from the bank account of the assessee with State Bank of India. Addition made by the AO and sustained by CIT(A) is not sustainable as the factual position stated by the assessee in her submission before the ld CIT(A) as well as before the AO have not been controverted neither by the authorities below nor by the Sr. DR before us as noted above. Therefore, AO is directed to delete the addition.- Decided in favour of assessee. Addition on account of stamp duty paid on purchase of property - paid out of alleged unexplained sources - HELD THAT:- This is well known fact to understand the fabric of society and habits of Indian home maker women and issue has to be seen from the angle of normal women who has normal sources of income and has spent big part of her life s earning to financially strengthen her family from doing tuition work and again utilizing the tuition income for giving loans to the relatives for earning interest income. It is not the case of the AO that the assessee has not paid any tax or has not filed return of income but the submission of the AO noted by the ld CIT(A) have not been controverted by the ld CIT(A) while restricting the addition to the tune of Rs. 6 lakhs. Therefore, explanation submitted by the assessee is a plausible explanation. Amount invested by the assessee towards payment of stamp duty in cash cannot be doubted in view of the conduct of assessee in the capacity of a consistent tax payer since 20 to 25 years and thus addition cannot be held as sustainable - Decided in favour of assessee.
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Customs
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2023 (6) TMI 964
Condonation of delay of 295 days in filing appeal - Valuation of imported goods - rejection of declared value - prohibited goods or not - contemporaneous imports/NIDB data - HELD THAT:- This appeal is delayed by a period of 295 days. The reasons stated in the application for condonation of this inordinate delay are not satisfactory. Even on merits, there are no substantial question of law worth consideration in this appeal. This appeal stands dismissed on the ground of delay as also on merits.
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2023 (6) TMI 963
Classification of imported goods - Speed Boat - classified under CTH 8906 00 90 or under CTH 8905 90 90 of Customs Tariff Act, 1975? - N/N. 21/2002-Cus., dated 1-3-2002 - HELD THAT:- This Court is of the opinion that the appeal does not involve any substantial question of law. The appeal is, therefore, dismissed.
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2023 (6) TMI 962
Export Promotion Capital Goods Scheme (EPCG) for import of capital goods - alleged violation/non-compliance of the licence conditions - HELD THAT:- The petitioner has stated in affidavit that they were unable to procure the licence at the relevant point in time. However, subsequent to the passing of the impugned order on 6-2-2013, the petitioner has made a representation before the Joint Director General of Foreign Trade on 12-5-2014 bringing to his notice that the EPCG licence was never used for any import clearance. The petitioner has surrendered the original licence. Thus what appears to have transpired is that the original licence has been procured by the petitioner, though after passing of the impugned order-in-original. The original customs TRA issued by the Chennai air Customs to Chennai SEA Customs and non-utilization certificate in original are stated to have been produced before the authority - the Asstt. Commissioner of Customs (EPCG) vide communication dated 5-5-2014 has stated that the TRA enclosed has not been registered in the system but has not denied the surrender of both the original EPCG licence and non-utilisation certificate. While sustaining impugned order-in-original dated 6-2-2013, the petitioner is permitted to appear before the Joint Director General of Foreign Trade, Chennai on Monday, the 30th of January, 2023 at 10.30 a.m. without awaiting any further notice in this regard, to pursue its representation filed on 12-5-2014 - Petition allowed.
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2023 (6) TMI 961
Smuggling - recovery of gold - officers seized the said capsules containing gold in paste form totally weighing 6454.09 gms - HELD THAT:- Having regard to the facts and circumstances of the case, taking into consideration the fact that the petitioners are in custody from 25-11-2022 and also that the petitioners have no other criminal antecedents, bail granted to the petitioners and it is ordered that the petitioners shall be released on bail on the stringent conditions imposed. The petitioners shall execute bond for a sum of Rs. 50,000/- each with two solvent sureties each for the like-sum to the satisfaction of the jurisdictional court. One of the sureties shall be a native of the State of Kerala - Petitioners shall appear before the investigating officer in O.S. No. 220/2022 of Air Customs, Cochin International Airport on every Saturday at 11 am till the final report is filed and shall also appear and co-operate with the investigation as and when required by the investigating officer. Bail application allowed.
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2023 (6) TMI 960
Classification of imported goods - squid liver powder - classifiable under CTH 2309 as Preparations of a kind used in animal feeding as finalized by Revenue, or under CTH 2301 as Flours, meals and pellets, of meat or meat offal, of fish or of crustaceans, molluscs or other aquatic invertebrates, unfit for human consumption; greaves, claimed by the appellants? HELD THAT:- CTH 230120 preferred by the appellants covers flours, meals and pellets, of fish or of crustaceans, molluscs or other aquatic invertebrates . The heading does not cover products containing ingredients of plant origin. Since squid liver powder contains a mix of ingredients both of molluscs and plant origin, from a plain reading of the heading, squid liver powder does not fall under the heading. The heading 230990 covers preparations for used in making the complete feed or supplementary feed and need not be an end product in themselves. As per the notes this heading covers sweetened forage and prepared animal feeding stuffs consisting of a mixture of several nutrients designed for use in making complete or supplementary feeds . Further as stated by the appellants squid liver powder contains certain proteins, peptides and amino acids in it. They are in line with the HSN description, as being composed consisting of a number of substances, sometimes called additives, the nature and proportion of which vary according to the animal production requirement. As stated by appellants, squid liver powder is used in shrimp feed formulation as an attractant. It is common knowledge that feeding is the main way for fish to obtain nutrition for the survival, growth and reproduction of fish/ shrimp etc. Attractants are added to the feed to improve not only the feed palatability thereby reducing wastage but also to increase feed intake resulting in fish growth, and are mainly used in captive fish farms. It hence ensures that the fish/shrimp make good use of the feeds and safeguard its health - apart from a plain reading of the Customs Tariff the classification of squid liver powder under 2309 also satisfies the relevant notes (A) and (C) of II Other Preparations given in the HSN. Hence squid liver powder merit classification under the CTH 2309. Since the product is described as being a high-quality feed ingredient for aqua feed and all type diet for animals, the product which is not for exclusive use for fish, prawn etc. has been correctly classified under CTH 23099090. Also, Revenue has discharged this duty effectively and that the discussions made in the impugned orders show the correct classification of goods under CTH 2309. Thus, the classification of the Squid Liver Powder has been correctly done under CTH 23099090 and hence the impugned orders are upheld. The appeals stand rejected.
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2023 (6) TMI 959
Absolute Confiscation - smuggling - betel nuts - goods smuggled into India from Bangladesh through unauthorized route in violation of section 7(1)(c) of Customs Act, 1962 read with Section 3(1) of Import/Export (Control) Act, 1947 as amended and Section 11 of Customs Act, 1962 - penalty. HELD THAT:- In this case there was a reasonable belief that the betel nuts in question is smuggled one, but no evidence has been brought by the Revenue to support the said allegation as onus to prove the goods in question are smuggled one lies on the Revenue as the goods in question are not notified goods in terms of Section 123 of the Customs Act, 1962. Merely alleging that the goods in question are smuggled one on reasonable belief is not sufficient. As the Revenue has failed to prove with cogent evidence that the goods in question are smuggled one, in that circumstances, it is held that the goods are not liable for confiscation. Consequently, no penalty is imposable on the Appellant. Appeal allowed.
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2023 (6) TMI 958
Valuation of imported goods - old and used Digital Multifunction Printer - enhancement of value based on Chartered Engineer s Valuation - corroborative evidences or not - restrictions made under Para 2.17 of the Foreign Trade Policy 2009-2014 and Para 2.33 and 2.33A of HB Procedure - HELD THAT:- The issue has already been settled by this Tribunal in the case of COMMISSIONER OF CUSTOMS (PORT) , KOLKATA VERSUS BHAWANI ENTERPRISES [ 2017 (11) TMI 974 - CESTAT KOLKATA ], wherein the Tribunal has held that mere enhancement of value on the basis of C.E. certificate cannot be a ground for treating declared value as mis-declared unless there is other corroborative evidence. (ii) except enhancement on the basis of C.E. s Certificate, there is no other material on record to inform that declared value was mis-declared. As in the case of Bhawani Enterprises for earlier import of identical goods, it was held that there was no restriction of import of the subject goods, it is held that no specific license is required for import of the impugned goods - it is found that for enhancement of value, the Chartered Engineer s Certificate cannot be relied upon unless there is corroborative evidence. As the issue is no more res integra, therefore, there are no infirmity in the impugned order, accordingly, the same is upheld - the appeal filed by the Revenue is dismissed.
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Insolvency & Bankruptcy
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2023 (6) TMI 957
Admission of the claim only to the extent of 35.13% - inclusion of this amount in the Resolution Plan - It is submitted by the Learned Counsel for the Appellant that the RP had classified them as Operational Creditors without approving the Notice of the Adjudicating Authority - waterfall mechanism provided under Section 53 of I B Code - HELD THAT:- In the Judgment of JET AIRCRAFT MAINTENANCE ENGINEERS WELFARE ASSOCIATION VERSUS ASHISH CHHAWCHHARIA RESOLUTION PROFESSIONAL OF JET AIRWAYS (INDIA) LTD. ORS; ASSOCIATION OF AGGRIEVED WORKMEN OF JET AIRWAYS (INDIA) LTD. VERSUS JET AIRWAYS (INDIA) LTD. ORS. [ 2022 (11) TMI 332 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI] , a clear direction was given to the Successful Resolution Applicant to make payment of the admitted Claims towards Provident Fund dues and the same was upheld by the Hon ble Apex Court in JALAN FRITSCH CONSORTIUM VERSUS REGIONAL PROVIDENT FUND COMMISSIONER ANR. [ 2023 (3) TMI 223 - SUPREME COURT] . The Hon ble Apex Court has laid down that the share of workmen dues shall be kept outside the Liquidation assets and the concerned workmen / Employees shall have to be paid the same, out of such Provident fund, Gratuity Fund, if any available. The words, if any available , cannot be read to mean that the workmen and empolyees are not entitled for Provident fund, Gratuity Fund, Pension fund, if not available with the Liquidator. As ratio of the Judgement in Jet Aircraft Maintenance Engineers Welfare Association Vs. Ashish Chhawchharia, Resolution Professional of Jet Airways (India) Ltd. Ors. of this Tribunal was upheld by the Hon ble Apex Court, this Tribunal is of the earnest view that both Provident Fund and Gratuity Fund is to be paid in full as per the Provisions of EPF and NP Act, 1952 and Payment of Gratuity Act, 1972. Appeal allowed with a direction to include these amounts in the Resolution Plan.
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Service Tax
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2023 (6) TMI 956
Levy of Service Tax - Business Auxiliary Service - amount received as remuneration for playing cricket for ISPL - HELD THAT:- The total amount of remuneration received is towards engaging the appellant by ISPL to play cricket in India Premier League matches. In the identical agreements, in respect of other players engaged by different teams, in all those cased, this Tribunal relying on the High Court in the case of SOURAV GANGULY VERSUS UNION OF INDIA OTHERS [ 2016 (7) TMI 237 - CALCUTTA HIGH COURT ] held that arrangement between the owner Company and the cricket player is of employment hence, players are not directly involved in brand promotion of a brand owner. Therefore, the activity of the cricket player does not fall under the category of Business Auxiliary Services. As per this settles legal position, in the present case also involving similar agreement and arrangement, the demand of under Business Auxiliary Service does not sustain. The demand raised in the impugned orders is not sustainable - Appeal allowed.
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2023 (6) TMI 955
Recovery of Service Tax - consideration received for alleged rendered of club or association service - technical inspection and certification service - business support service - convention service - extended period of limitation - HELD THAT:- It is seen that the entire amount reflected in the balance sheet under the head has been subjected to taxation merely because no exhibitions have been organized during the disputed period. Fastening of liability under Finance Act, 1994 without any attempt at eliciting the nature of the activity actually undertaken is sufficiently vague not to discard the contention of appellant that extended period of limitation cannot be invoked. Hence the demand on convention service , to the extent of being beyond normal period of limitation, is set aside. The secretarial service rendered to various bodies, such as Container Shipping Lines Association, Bombay City Policy Research Foundation, etc., to the extent that they are not members are liable to tax under the head of support service of business or commerce and, therefore, devolves on the appellant - there are no reason to hold the charges collected under this head to be liable to tax under club or association service as enumerated except those involving non-members which is not evidenced. The demand confirmed under these two heads, amounting to ₹ 2,62,038/- and ₹ 1,78,190/- respectively, would need to be subjected to scrutiny by the original authority for conformity with the definition of the respective heads under which these had been confirmed. Insofar as the appeal of Revenue is concerned, the objection has been solely on the ground that the adjudicating authority has relied upon the certification issued by a chartered accountant. The certificate issued by a professional functioning under the aegis of Institute of Chartered Accountants of India (ICAI) cannot easily be brushed away as inconsequential and unreliable - The jurisdictional committee of Chief Commissioners appears to have been guided merely by academic doubt and upon justifiable doubt emanating from responsible ascertainment of error in determination of the respective proportions. Sufficient time was available to carry out that exercise before elapse of deadline for undertaking review as provided for in Finance Act, 1994. The proposition in the appeal of Revenue that the segregation adopted by the adjudicating authority requires verification is not tenable as valid justification even for directed remand. In the absence of any material ground to discard the certification adopted by the adjudicating authority, and in the light of the acceptance of the principle adopted by the adjudicating authority that services rendered to members is not liable to tax in the hands of Bombay Chamber of Commerce and Industry, there are no reason to accede to this relief sought in the appeal of Revenue. Thus, demand of ₹ 1,25,68,933/- and ₹ 1,27,286/-, allegedly liable for having rendered technical inspection and certification service and convention service , is set aside for nonconformity with the period of limitation in section 73 of Finance Act, 1994. Insofar as the confirmation of demands of ₹ 2,62,038/- and ₹ 1,78,190/- are concerned, the appropriate authority would need to determine the taxability of arbitration charges as well as the amount collected from members for rendering of secretarial service - Appeal of Revenue is dismissed.
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2023 (6) TMI 954
Levy of Service Tax - Works Contract Service undertaken for various State Government approved projects - Manpower Services - Appellant was directed to produce the copy of the Certificate issued by the Chartered Accountant which has now been produced by him - levy of penalty - HELD THAT:- Admittedly the Show Cause Notice was issued towards the Manpower Services based on the Balance Sheet figures provided by the Appellant. The confirmed demand was arrived at Rs. 25,16,900/-, after the Appellant has produced copy of the Chartered Accountant s Certificate before the Adjudicating Authority. After considering the details given therein, the Adjudicating Authority has dropped the demand to the extent of Rs. 53.60 Lakhs and confirmed the demand only on the balance Service Tax amount of Rs.25.16 Lakhs. From the Annexure B attached to this Certificate, it is seen that the total outflow of labour charges has been divided into two parts. One part pertains to the labour charges paid to contractors and the second part pertains to labour charges paid to locally hired workers by the Company. Based on such bifurcation, the Adjudicating Authority has correctly arrived at the quantum of Service Tax applicable for the Labour Charges paid to the contractors - there are no error in the order passed by the Adjudicating Authority. Accordingly, their Appeal contesting the confirmed demand of Rs.25,16,900/- is dismissed. Penalty - HELD THAT:- The Appellant has paid entire amount of Rs.25,16,900/- after the adjudication order was passed. Therefore, the penalty is being reduced to 25% of Rs.25,16,900/- subject to the Appellant to paying interest amount along with this penalty within the 30 days from the date of receipt of this order. In case the Appellant fails to pay the interest along with 25% penalty as per this Order within 30 days from the date of receipt of this order, the earlier confirmed penalty of Rs.25,16,900/- will be recoverable from the Appellant. Appeal allowed in part.
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2023 (6) TMI 953
Levy of Service Tax - construction of residential complex for Indian Army and West Bengal Power Development Corporation Limited, the West Bengal Government Undertaking - contention of the assessee is that vide CBEC Circular No.332/16/2010-TRU dated 24.05.2010, which clarified that in case the Government of India is service recipient and the service provided is directly to the Government of India for its personal use, the service tax is not leviable. HELD THAT:- It is not in dispute that the assesse is engaged in the construction of flat for Indian Army and West Bengal Power Development Corporation Limited and these residential complexes are for personal use of Indian Army and WBPDCL. The CBEC has clarified vide its Circular No.332/16/2010-TRU dated 24.05.2010, which holds that if the NBCC, being a party to a direct contract with GOI, engages a sub-contractor for carrying out the whole or part of the construction, then the sub-contractor would be liable to pay service tax as in that case, NBCC would be the service receiver and the construction would not be for their personal use. As it is not in dispute that the residential flats constructed by the assessee, are for personal use of Indian Army and WBPDCL, which are a part of Government of India/State Government. Therefore, the said service provided by the assessee is to Government of India for personal use. Therefore, in the light of the CBEC Circular No.332/16/2010-TRU dated 24.05.2010, the assessee is not liable to pay service tax. The impugned demand confirmed against the assessee is set aside. Consequently, the appeals filed by the assesse are allowed - As no demand is sustainable against the assesse, therefore, question of imposing penalty does not arise. There are no merit in the appeal filed by the Revenue and the same is dismissed.
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2023 (6) TMI 952
CENVAT Credit - input services - Goods Transport Agency (GTA) - period from April, 2009 to September, 2009 and from October, 2009 to March, 2010 - HELD THAT:- In terms of Rule 2 (l) of the Cenvat Credit Rules, 2004, the input service means, used by the provider of taxable service for providing output service. As per the said definition, nowhere, it is restricted that the input service should have correlation with the output service. The Adjudicating Authority has taken a presumptive view that the input service is to be utilized for providing the same output service. This issue is dealt by this Tribunal in the case of CCE, TIRUPATHI VERSUS SHARIFF MOTORS [ 2009 (3) TMI 155 - CESTAT, BANGALORE] , wherein this Tribunal has observed unless the vehicles are received and sold, there would not be any servicing of the same. Moreover the definition of the input service is broad enough to cover the input service availed by the Respondents and also the output service rendered by them. We do not find any merit in the appeal of the Revenue. The Respondents are rightly entitled for the credit. Thus, the appellant is entitled to take the cenvat credit of input service on GTA for transportation of new vehicle to their premises and the same can be utilized for providing output service i.e. servicing of the motor vehicles - appeal allowed.
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Central Excise
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2023 (6) TMI 951
Process amounting to manufacture - SSI exemption benefit - demand with interest and equal penalty - Period involved in the dispute is November 1987 to February 1994. Process amounting to manufacture - processes of recrystallisation and distillation did not bring in any new excisable product - HELD THAT:- Distillation is a process of evaporation and re-condensation used for separating liquids into various fractions according to their boiling points or boiling ranges. Fractional distillation is a distillation process for the separation of the various components of liquid mixtures. At different temperatures, various components of liquid mixtures emerge at different stages of fractional distillation process. Such components arising in course of fractional distillation process can be distinctly different from the parent raw materials. The emergent products can have different name, character and use. However, the processes of recrystalisation and distillation undertaken by the Appellant cannot be called fractional distillation. There is no evidence available on record to show that various components of liquid mixtures emerged at different stages in the process undertaken by the Appellant - the findings of the adjudicating authority in the impugned order is not supported by any evidence. It is also observed that the appellant did not avail MODVAT Credit as per the decision of the Department that their processing of Coal Tar does not amount to manufacture as persection 2(f) of the Central Excise Act. 1944 - thus the processes undertaken by the Appellant would not amount to manufacture within the meaning of Section 2(f) of Central Excise and Salt Act, 1944 and hence the finished goods are not leviable to Central Excise duty. Accordingly, the demand made in the impugned order is liable to be set aside. Eligibility of SSI Exemption - HELD THAT:- The department contended that the benefit of SSI exemption has been allowed while working out aggregate value of clearances in each financial year during the material period. However, since the processes undertaken by the Appellant does not amount to manufacture and the demand itself is not sustainable, the eligibility of SSI Exemption would not make any difference. Appeal allowed.
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2023 (6) TMI 950
SSI Exemption - appellant had crossed the exemption limit of Rs.1 Crore during 2006-07 to 2007-08 or not - failure to consider the export clearances made by the appellant through the merchant exporter - Board Circular No.648/39/2002 dated 25.07.2002. HELD THAT:- The Tribunal in the case of VADAPALANI PRESS VERSUS COMMISSIONER OF C. EX., CHENNAI [ 2007 (3) TMI 151 - CESTAT, CHENNAI] had occasion to consider a similar issue. The above Board s circular was also referred by the Tribunal. It was held that when Form-H has been produced to establish that the goods have been exported the value of such clearances would not be included in the aggregate value so as to deny the SSI exemption. The Hon ble Gujarat High Court in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS AMAR PACKAGING INDUSTRIES [ 2012 (8) TMI 1068 - GUJARAT HIGH COURT] has held that the Tribunal has not committed any error in allowing the appeal of the assessee. It is rightly held that requirements of the circular were substantively complied with. The demand cannot sustain. The impugned order is set aside - Appeal allowed.
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2023 (6) TMI 949
Area based exemption - Set up of new unit at the same site / old site - Benefit on establishment of new unit as per N/N. 20/2007-CE Dated 25.04.2007 denied - case of Revenue is that when the ban was removed, the respondent applied for start of their unit on the same site, the same cannot be termed as new unit, so, they can not avail benefit of exemption Notification No.20/2007-CE Dated 25.04.2007 - HELD THAT:- It is a fact on record that the unit of the respondent was functional prior to 12.12.1996, when the ban was imposed on the industry of the appellant. Thereafter the appellant surrendered their factory licence on 10.01.2002 and also surrendered their Central Excise registration on 10.04.2003. Moreover, machinery was also transferred to the Rajkot (Gujarat) factory and list of the machinery was also produced before us. Some plant and machinery was sold by the appellant, that details thereof was also placed on record. Director, Shri M.P.Pariwal also resigned on 20.03.2004 from Board of Directors. Thereafter, the appellant has obtained licence from office of the Divisional Forest Officer, Dibrugarh, Assam vide letter dated 06.08.2008, wherein it has been mentioned that in pursuant of the above, a fresh licence is being issued to your industry bearing No.Sl.No.DIB/PLY/JEIPORE/IE/21 dated 05.08.2008. The Ld.Counsel produced registration and licence to work a factory from Government of Assam dated 16.09.2008 and sanctioning of loan from North Eastern Development Finance Corporation Ltd. vide letter of sanction dated 09.04.2009. They have also produced certificate issued by District Industry and Commercial Centre, Dibrugarh, Assam. On going through the finding of the Ld.Commissioner(Appeals) in the impugned order and the documents placed here, which are evident that the respondent has established a new unit although at the same site. The respondent is entitled for benefit of exemption Notification No.20/2007-CE dated 25.04.2007 - Appeal of Revenue dismissed.
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2023 (6) TMI 948
Clandestine Removal - shortages of finished goods - demand on the basis of gate pass/gate slips, for which no corresponding Central Excise invoices was found - violation of principles of natural justice - HELD THAT:- In this case, the Adjudicating Authority has violated the principles of natural justice passing the order ex parte in hurry without waiting for reconciliation statement filed by the appellant. Therefore, the impugned order has no merit. Accordingly, the same is set aside. In these circumstances, the matter is remanded back to the adjudicating authority for fresh adjudication after considering the reconciliation statement filed by the appellant in respect of gate passes matching with the Central Excise invoices - Appeal is allowed by way of remand.
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2023 (6) TMI 947
Classification of goods - lead acid battery - to be classified under CTH 85414011 of the Central Excise Tariff Act, 1985 or under CTH 85078000 of Central Excise Tariff Act, 1985? - Extended period of Limitation - HELD THAT:- It is clear that the solar battery is cleared by availing benefit of exemption Notification No.6/06 dated 01.03.2006 and the same is declared in their periodical returns filed with the Department and there is no suppression on the part of the appellant. Moreover, in another proceedings against the appellant by the Revenue, initiated proposing that the appellant is not maintaining separate cenvat credit account for input/input services used for manufacture of dutiable as well as exempted goods. As the Revenue itself was under confusion that the solar battery in question was exempted goods, so, it is held that the extended period of limitation is not invokable. Accordingly, the demand pertaining to extended period of limitation is set aside. It is noted that the appellant has already reversed the cenvat credit on input/input services used for manufacture of solar battery, therefore, the appellant is entitled to take the cenvat credit on input/input services used for manufacture of solar battery during the normal period of limitation and accordingly, the duty is payable by the appellant along with interest. In that circumstances, no penalty is imposable. The matter remanded back to the Adjudicating Authority for computation of demand for the normal period of limitation for allowing CENVAT credit on input/input services used for manufacture of solar battery during the normal period of limitation along with interest - appeal allowed by way of remand.
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Indian Laws
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2023 (6) TMI 946
Dishonour of Cheque - complaints had been returned by the trial Court to the petitioners on the premise that the Court at Bathinda had no territorial jurisdiction to entertain the same - HELD THAT:- Both the sides are in agreement that Section 142-A(2) of the Act has been inserted vide amendment in the year 2015 which came into force w.e.f. 15.06.2015. As per amendment, the Courts situated at both the places i.e. of drawer Bank and drawee Bank, would have the territorial jurisdiction to entertain the complaint and further as held by Hon ble Supreme Court in Bridgestone India Pvt. Ltd. [ 2015 (12) TMI 777 - SUPREME COURT ], the amendment will have retrospective effect. Hence, the impugned orders dated 23.04.2015 (in both petitions) being against the statute and the law laid down, are set aside. The trial Court at Bathinda is directed to entertain the complaints filed by the petitioners and proceed further with the trial as in accordance with law. Petition allowed.
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