TMI Tax Updates - e-Newsletter
June 28, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. RECOMMENDATIONS OF THE 53RD MEETING OF GST COUNCIL

   By: Dr. Sanjiv Agarwal

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

   By: Ishita Ramani

3. Big Relief to GST Taxpayers by relaxing condition of Section 16(4)

   By: Sandeep Saini

4. Provisional attachment under GST ceases to have effect after the period of one year

   By: Bimal jain

News

1. 73rd meeting of Network Planning Group under PM GatiShakti evaluates eight key infrastructure projects - NPG assesses two railways and six NICDC projects

2. MCA refutes recent news reports on Byju’s

Notifications

GST - States

1. 47/2023-State Tax - dated 26-6-2024 - Delhi SGST

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

SEBI

2. SEBI/LAD-NRO/GN/2024/185 - dated 26-6-2024 - SEBI

SECURITIES AND EXCHANGE BOARD OF INDIA (FOREIGN PORTFOLIO INVESTORS) (SECOND AMENDMENT) REGULATIONS, 2024.

3. S.O. 2470(E) - dated 26-6-2024 - SEBI

Notified commodity derivative u/s 2(bc)

Circulars / Instructions / Orders

GST

1. 217/11/2024-GST - dated 26-6-2024

Entitlement of ITC by the insurance companies on the expenses incurred for repair of motor vehicles in case of reimbursement mode of insurance claim settlement-reg.

2. 207/1/2024 - dated 26-6-2024

Reduction of Government Litigation - fixing monetary limits for filing appeals or applications by the Department before GSTAT, High Courts and Supreme Court -reg.

3. 220/14/2024-GST - dated 26-6-2024

Clarification on place of supply applicable for custodial services provided by banks to Foreign Portfolio Investors-reg

4. 218/12/2024-GST - dated 26-6-2024

Clarification regarding taxability of the transaction of providing loan by an overseas affiliate to its Indian affiliate or by a person to a related person- reg.

5. 208/2/2024-GST - dated 26-6-2024

Clarifications on various issues pertaining to special procedure for the manufacturers of the specified commodities as per Notification No. 04/2024 - Central Tax dated 05.01.2024– reg.

6. 219/13/2024-GST - dated 26-6-2024

Clarification on availability of input tax credit on ducts and manholes used in network of optical fiber cables (OFCs) in terms of section 17(5) of the CGST Act, 2017 - reg.

7. 221/15/2024-GST - dated 26-6-2024

Clarification on time of supply in respect of supply of services of construction of road and maintenance thereof of National Highway Projects of National Highways Authority of India (NHAI)in Hybrid Annuity Mode (HAM) model -reg.

8. 216/10/2024-GST - dated 26-6-2024

Clarification in respect of GST liability and input tax credit (ITC) availability in cases involving Warranty/ Extended Warranty, in furtherance to Circular No. 195/07/2023-GST dated 17.07.2023-reg.

9. 209/3/2024-GST - dated 26-6-2024

Clarification on the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Service Tax Act, 2017 relating to place of supply of goods to unregistered persons– Reg.

10. 215/9/2024-GST - dated 26-6-2024

Clarification on taxability of salvage/ wreck value earmarked in the claim assessment of the damage caused to the motor vehicle -reg.

11. 222/16/2024-GST - dated 26-6-2024

Clarification on time of supply of services of spectrum usage and other similar services under GST -reg.

12. 210/4/2024-GST - dated 26-6-2024

Clarification on valuation of supply of import of services by a related person where recipient is eligible to full input tax credit – Reg.

13. 211/5/2024-GST - dated 26-6-2024

Clarification on time limit under Section 16(4) of CGST Act, 2017 in respect of RCM supplies received from unregistered persons – reg.

14. 214/8/2024-GST - dated 26-6-2024

Clarification on the requirement of reversal of input tax credit in respect of the portion of the premium for life insurance policies which is not included in taxable value-reg.

15. 212/6/2024-GST - dated 26-6-2024

Mechanism for providing evidence of compliance of conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 by the suppliers -reg.

16. 213/07/2024-GST - dated 26-6-2024

Clarification on the taxability of ESOP/ESPP/RSU provided by a company to its employees through its overseas holding company - reg.

Highlights / Catch Notes

GST

• Tax Clarification: ESOP, ESPP, and RSU by Overseas Parent Not GST Supply; Fees May Attract GST if Charged.

  Circulars : The circular addresses the taxability of ESOP/ESPP/RSU provided by a company to its employees through its overseas holding company. It clarifies that the transfer of securities/shares by the foreign holding company directly to employees of the Indian subsidiary company, and subsequent reimbursement of costs by the subsidiary company to the holding company, does not constitute an import of financial services liable to GST. The circular emphasizes that such transactions are not considered supplies of goods or services under GST law. However, if the foreign holding company charges additional fees, GST would be leviable on such amounts as consideration for facilitating the transaction. The circular highlights that no supply of services occurs when securities/shares are transferred directly, but GST applies if additional fees are charged.
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• Guidelines for Verifying GST Compliance on Post-Supply Discounts Using Tax Credit Notes Outlined in New Circular.

  Circulars : The Circular addresses the mechanism for verifying compliance with Section 15(3)(b)(ii) of the CGST Act, 2017 by suppliers offering discounts through tax credit notes post-supply. It clarifies that such discounts can be excluded from taxable value if conditions are met, including the recipient's reversal of input tax credit. As no portal functionality exists for verification, suppliers may obtain a certificate from recipients, issued by a Chartered Accountant or Cost Accountant, confirming the reversal. For discounts under Rs 5,00,000, an undertaking from the recipient suffices. These certificates/undertakings serve as evidence for compliance and must be produced when required by tax authorities. Trade notices should disseminate this Circular's content for awareness.
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• Input Tax Credit on Life Insurance Premiums: No Reversal Needed u/r 42 of CGST Rules.

  Circulars : The circular clarifies the treatment of input tax credit in relation to life insurance premiums not included in taxable value. The circular explains that such premiums are not to be considered as pertaining to a non-taxable or exempt supply under the CGST Act. As per the Insurance Act, life insurance policies may include an investment component, but the portion of premium not included in taxable value does not qualify as exempt supply. Therefore, there is no requirement to reverse input tax credit for such premiums as per Rule 42 of the CGST Rules. The circular aims to ensure uniformity in the implementation of tax provisions across field formations.
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• Time limit for claiming input tax credit on supplies from unregistered persons clarified. Don't delay invoices!

  Circulars : The circular discusses the time limit u/s 16(4) of the CGST Act, 2017 for availing input tax credit (ITC) on reverse charge mechanism (RCM) supplies from unregistered persons. It clarifies that the relevant financial year for ITC availment is the year in which the recipient issues the invoice u/s 31(3)(f) of the CGST Act, subject to tax payment. Delayed issuance of invoice may attract interest and penalties under the CGST Act. The circular aims to ensure uniformity in implementing the law and suggests issuing trade notices for awareness.
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• New Circular Simplifies Valuation of Imported Services from Related Persons for Full Input Tax Credit in India.

  Circulars : The circular addresses the valuation of imported services from a related person when the recipient is eligible for full input tax credit. It clarifies that where no consideration is involved, and the activities are not considered supplies by the related person in India, the value declared in the invoice by the recipient may be deemed the open market value. The circular references Rule 28 of the CGST Rules, emphasizing that where full input tax credit is available to the recipient, the declared value in the invoice is deemed the open market value. It extends the principles applied to domestic related parties to foreign entities providing services to related parties in India. The recipient in India must pay tax under the reverse charge mechanism and issue a self-invoice. The circular instructs field formations to publicize its content and invites feedback for implementation issues.
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• GST Timing for Telecom Spectrum: Deferred Payments as Continuous Supply Triggering Tax at Each Due Date.

  Circulars : The circular clarifies the time of supply for GST payment on spectrum allocation services when telecom operators opt for deferred payments. The bidder is liable to pay GST on spectrum usage services received on reverse charge basis. If payments are made in installments, it constitutes continuous supply of services, with tax liability arising when payments are due or made. Frequency Assignment Letter is not considered an invoice for GST purposes. Invoice must be issued before the due date of payment. Full upfront payment triggers GST liability at payment or due date, while deferred payments trigger GST liability at each installment's due or payment date. Similar treatment applies to other cases of government allocating natural resources for continuous service over time. Trade notices should publicize the circular, and any implementation difficulties should be reported to the Board.
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• Insurance companies don't pay GST on salvage if it's insured's property. But if it's insurer's property, GST is due on sale.

  Circulars : The Circular addresses the taxability of salvage/wreck value in motor vehicle insurance claims under GST law. Insurance companies are not liable to pay GST on salvage deducted from claim settlements if such salvage remains the property of the insured. However, if the insurance contract settles the claim without deducting salvage value, making salvage the property of the insurance company, GST is payable on the disposal/sale of the salvage. The circular emphasizes that in cases where salvage deductions are contractually agreed upon, insurance companies do not incur GST liability on the salvage. Suitable trade notices are advised for dissemination, and any implementation difficulties should be reported to the Board.
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• Place of Supply for E-Commerce Goods to Unregistered Persons Now Determined by Delivery Address per Recent Circular.

  Circulars : A recent Circular provides clarification on the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Service Tax Act, 2017 regarding the place of supply of goods to unregistered persons. The clause states that the place of supply for goods to unregistered persons is determined by the address recorded in the invoice, overriding other provisions. In cases where the billing address differs from the delivery address for goods supplied through e-commerce platforms, the Circular clarifies that the place of supply is based on the delivery address recorded on the invoice. Suppliers are advised to note the delivery address as the recipient's address for determining the place of supply. Trade notices are recommended for dissemination of this clarification.
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• New guidelines clarify GST rules for warranty cases, no GST on replaced goods. Extended warranty seen as separate service.

  Circulars : The circular provides clarification on GST liability and input tax credit (ITC) availability for warranty and extended warranty cases. It addresses issues like the replacement of goods or parts under warranty, distributor's role in replacement, and nature of extended warranty supply. It clarifies that GST is not payable on goods replenished under warranty and distinguishes extended warranty as a separate service. The circular emphasizes uniformity in implementing CGST Act provisions. Trade notices are advised for dissemination, and feedback on implementation challenges is welcomed.
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• New Guidelines for Time of Supply in Road Construction Services Under HAM for National Highway Projects Clarified.

  Circulars : The Circular provides clarity on time of supply for services in construction of roads and maintenance under the Hybrid Annuity Mode (HAM) model for National Highway Projects. It states that under the HAM model, where payments are staggered over the contract period, the time of supply is determined by the date of invoice issuance or payment receipt, whichever is earlier. If the invoice is not issued as prescribed, the time of supply is the date of service provision or payment receipt. The Circular also clarifies that interest components in payments to the concessionaire should be included in the taxable value. Tax liability arises based on the above principles.
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• Circular clarifies no denial of tax credit for ducts & manholes in OFC networks as "plant & machinery."

  Circulars : The circular addresses denial of input tax credit (ITC) on ducts and manholes used in optical fiber cable (OFC) networks u/s 17(5) of the CGST Act. It clarifies that ITC is not restricted for such items as they are considered part of "plant and machinery" essential for telecommunication services. Ducts and manholes are integral for laying OFC networks and fall within the definition of "plant and machinery" as per the Act. The circular aims to prevent unnecessary disputes in the telecommunication sector and encourages uniformity in tax implementation. It directs issuance of trade notices to disseminate the clarification and invites feedback for smooth implementation.
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• India Clarifies Special Procedure for Manufacturers Under Notification No. 04/2024-Central Tax; Addresses Trade Concerns and Compliance.

  Circulars : A circular issued by the Government of India provides clarifications on issues related to a special procedure for manufacturers of specified commodities under Notification No. 04/2024-Central Tax. The procedure was revised following the rescission of a prior notification. The circular addresses concerns raised by trade associations, including the non-availability of machine details, electricity consumption rating declaration, reporting values in forms, and the applicability of the special procedure to different scenarios like SEZ units and manual packing operations. It specifies qualifications for Chartered Engineers certifying details and emphasizes compliance for all involved parties in the manufacturing process.
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• Clarification on GST Taxability for Loans Between Related Parties: Interest Exempt, Fees May Incur Tax.

  Circulars : A recent circular addressed the taxability of loans between related parties or affiliates. The circular clarifies that providing loans between related parties constitutes a taxable supply under GST. However, services involving interest or discount on loans are fully exempt. Processing fees or administrative charges on loans may be subject to GST, but in cases where no such fees are charged, no GST applies. Fees charged by lenders to related parties beyond interest or discount are considered taxable. The circular emphasizes the distinction between loans provided by related parties and independent lenders, noting differences in processing requirements. It advises issuing trade notices to disseminate the circular's contents and invites feedback on implementation challenges.
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• Clarification on IGST Act: Custodial Services to FPIs Not Classified as Services to Account Holders u/s 13(8)(a.

  Circulars : The circular provides clarification on the place of supply for custodial services offered by banks to Foreign Portfolio Investors (FPIs). It addresses the confusion regarding whether these services fall under the category of services provided to 'account holders' as per Section 13(8)(a) of the IGST Act. The circular explains that custodial services do not qualify as services to account holders and should be determined under the default provision of sub-section (2) of section 13 of the IGST Act. This interpretation aligns with similar provisions in the Service Tax regime, indicating that custodial services are distinct from services provided to account holders. The circular emphasizes the need for uniformity in implementing these provisions across field formations.
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• Government Sets Monetary Limits for Appeals in Tax Cases to Reduce Litigation Under New Circular.

  Circulars : The circular addresses the Reduction of Government Litigation by setting monetary limits for filing appeals before GSTAT, High Courts, and Supreme Court. It refers to the National Litigation Policy, emphasizing prudent litigation practices. The circular cites Section 120 of the CGST Act, empowering the Central Board of Indirect Taxes & Customs to fix monetary limits for appeals. The circular sets monetary limits for filing appeals: GSTAT - 20,00,000/-, High Court - 1,00,00,000/-, and Supreme Court - 2,00,00,000/-. It outlines principles for determining if a case falls within these limits and specifies exclusions where monetary limits do not apply. It highlights that filing an appeal should be based on case merits, not just exceeding monetary limits, to reduce unnecessary litigation. Non-filing of appeals based on monetary limits does not set a precedent value. The circular encourages officers to decide on appeals based on reducing litigation and providing certainty to taxpayers.
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• Insurance Firms Can Claim Input Tax Credit on Motor Vehicle Repair Costs in Reimbursement Settlements.

  Circulars : The circular addresses the entitlement of Input Tax Credit (ITC) by insurance companies on repair expenses for motor vehicles in reimbursement mode of claim settlement. It clarifies that ITC is available to insurance companies for repair expenses reimbursed to insured, even if the garage issues invoices in the insured's name. ITC is permissible as the insurance company is the recipient of the repair services, covering the repair liability. The extent of ITC depends on the approved claim cost reimbursed. If excess amount invoices are issued, ITC is available on the approved claim cost reimbursed. However, if full invoice amount is paid to the garage but only approved cost is reimbursed to insured, ITC is limited to the approved claim cost. If the repair invoice is not in the insurance company's name, ITC is not available.
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• Court orders refund of Rs. 30 lakh to appellants as collected due to coercion during search proceedings.

  Case-Laws - HC : In a case where a writ petition was dismissed due to allegations of false statements regarding authorization, the High Court held that payment made under threat and coercion during search proceedings cannot be considered voluntary. The court directed GST authorities to refund Rs. 30,00,000 to the appellants within six weeks. The appellants can raise a claim for interest during the show-cause notice adjudication. The appeal was allowed, setting aside the previous writ petition decision.
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• High Court grants relief to small dealer in tax dispute due to lack of response and credit discrepancies. Case remanded for fresh consideration.

  Case-Laws - HC : The High Court addressed a case involving a violation of natural justice as the petitioner did not respond to prior notices leading to the disputed order. Discrepancies in credit amounts were noted. The Court, acknowledging the petitioner as a small dealer, granted partial relief by annulling the order and sending the case back to the respondent for fresh consideration within two months. The petitioner was required to deposit 30% of the disputed tax within 30 days and reply to the show cause notices. The petition was disposed of through remand.
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• High Court grants retrospective relief for input tax credit refund under CGST Act, citing COVID period extension in Notification 13/2022.

  Case-Laws - HC : The High Court addressed the issue of refunding accumulated input tax credit within a time limit for zero-rated supplies. The petitioner sought the benefit of an extended period under Clause(e) of Explanation 2 to section 54 of the Central Goods and Service Tax Act, 2017, as per Notification No. 13/2022-Central Tax. The court held that the petitioner was entitled to the benefit of the notification, which allowed relaxation of the COVID period from 01.03.2020 to 28.02.2022 for the period from June 2018 to January 2019. The court allowed the petition, directing the respondents to grant the benefit of the notification retrospectively for the relevant period, as it was not available when the impugned orders were issued.
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• The court ruled on unused tax credits from VAT to GST. Credits from TNVAT Act are protected. Refunds was denied for untransferred credits.

  Case-Laws - HC : The High Court addressed the transition of unutilized input tax credit from VAT returns u/s 140 of GST enactments. It held that credits availed under TNVAT Act are indefeasible, citing a Supreme Court decision on CENVAT Credit Rules. Refund wasn't provided for untransitioned credits under TNGST Act. The petitioner's credit validity under TNVAT Act needed verification, and the impugned order was partly allowed for this purpose.
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• High Court ruled search invalid due to lack of reasons provided. Goods to be released in 3 weeks, refunds in 8 weeks.

  Case-Laws - HC : The High Court considered a challenge to a search and seizure order under the UPGST Act. The court found non-compliance with the mandatory provision of Section 67 as the Joint Commissioner did not provide the necessary "reasons to believe" for the search. The State authorities' explanation of discrepancies in forms was deemed insufficient. Consequently, the authorization for the search was invalidated. All proceedings stemming from the illegal search were annulled, goods and documents seized were to be released within three weeks, and any deposited amounts were to be refunded within eight weeks.
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• HC: Recovery of incorrect refund due to duty error. Show cause notice lacked detail, violating justice. Order quashed, matter remanded for new notice.

  Case-Laws - HC : The High Court examined a case involving the recovery of an erroneous refund due to an inverted duty structure. The Court found that the show cause notice lacked specific details beyond mentioning the excess refund amount. This lack of particulars violated natural justice principles as it hindered the petitioner's ability to respond adequately. Consequently, the Court quashed the order and remanded the matter for reconsideration. The respondents were instructed to issue a new show cause notice with comprehensive details to facilitate a proper response. The petition was disposed of through remand for further proceedings.
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Income Tax

• High Court rules no income escape warranting reassessment as no share sale occurred. Petitioner's evidence supports no income.

  Case-Laws - HC : The High Court considered the issue of reopening assessment u/s 148A based on a difference between allotment price and market price of shares. It was held that as no sale of shares occurred in the relevant year, there was no income escape warranting reassessment. The court found the basis for the reassessment order to be lacking as no other grounds were provided. The Writ Petition was allowed as there was a failure to apply mind to the facts and the petitioner's evidence showing no income from share sales. The court rejected the Revenue's request for remand, stating it lacked merit.
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• High Court allows widow's plea for delayed tax return filing, citing business losses. Income tax authority directed to treat the ITR in time.

  Case-Laws - HC : The High Court addressed a case concerning a delay in filing the return u/s 119 (2) (b) which sought condonation for a 15-day delay. The court acknowledged the authority of the respondents to condone delays with sufficient reasons. The petitioner, a widow operating a small herb business, explained the delay due to business losses. Finding the explanation satisfactory, the court granted the writ petition, quashing the order and directing the respondents to accept the petitioner's return for the assessment year 2021-2022 within the stipulated time.
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• Court Rules on Leave Encashment Limits; No Retrospective Tax Relief for Retirees Exceeding Rs. 3 Lakh Before New Cap.

  Case-Laws - HC : The High Court considered the issue of Leave Encashment exemption u/s 10AA and the retrospective review of income limit for taxing earned leave salary. The petitioners, retired before the latest notification setting the upper limit at Rs. 25 lakhs, sought relief as their earned leave income exceeded Rs. 3 lakhs. The Court acknowledged the limitation on its power and the separation of powers doctrine, stating it cannot mandate the revision of the upper limit with retrospective effect. While sympathetic, the Court emphasized that such policy decisions fall within the Executive's domain. The writ petitions were disposed of, allowing petitioners to approach the Government for relief, with the Government having the discretion to decide on their representations. Any pending interlocutory applications were dismissed.
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• Tribunal Grants Exemption After Corrected Income Classification; Rejects Unjustified Rectification Denial.

  Case-Laws - AT : The case involved rectification of a mistake u/s 154 for denial of exemption u/s 11. The appellant mistakenly classified income as "business income" instead of "income from other sources," resulting in denial of exemption. The appellant rectified this by submitting a revised return within the prescribed time frame u/s 139(5), not as a Section 154 application. As no intimation u/s 143(1) was issued within the stipulated period, the revised return was deemed accepted. Even if treated as a Section 154 application, the CPC's failure to pass an order within six months led to deemed acceptance. The rejection of a second rectification application lacked justification as all necessary details were provided in the revised return. The tribunal directed the exemption u/s 11 to be granted.
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• The Tribunal ruled in favor of the taxpayer, allowing genuine deductions despite reporting errors in filing ITR.

  Case-Laws - AT : The Appellate Tribunal considered a case where disallowance of Gratuity u/s 43B was made due to a discrepancy in classification in the Income Tax Return and tax audit report. The Tribunal held that inadvertent errors in reporting, when details are available in the Return, are bonafide. Deductions based on genuine claims cannot be denied, even if reported in the wrong category. The Tribunal emphasized that legitimate deductions should be allowed to prevent over-assessment, notwithstanding errors by the assessee. Therefore, the Tribunal allowed the assessee's appeal, stating that the incorrect classification in the Return should not lead to denial of a valid deduction u/s 43B.
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• Final Assessment Order Overturned Due to Jurisdictional Error and Untimely DRP Communication; Appeals Allowed.

  Case-Laws - AT : The case involves the validity of a final assessment order passed by the Assessing Officer (AO) u/s 144(C)(3) beyond the period of limitation. The Dispute Resolution Panel (DRP) plays a crucial role in deciding on objections raised by the assessee. The law mandates that the assessment order must be passed within one month from the end of the month in which the objections filing period expires. The DRP can confirm, reduce, or enhance the variations proposed in the draft order. In this case, the DRP rejected the objections as being time-barred, which effectively confirmed the draft order. However, this confirmation does not extend the limitation for passing the final order. As the DRP's directions were not communicated as required by law, the final order passed by the AO u/s 144C(13) was found to be without jurisdiction. Consequently, the appeals were allowed.
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• Appellate Tribunal Upholds AO's Assessment on Long Term Capital Gain Exemptions; Revision Request by Commissioner Denied.

  Case-Laws - AT : The Appellate Tribunal considered a case involving a revision u/s 263, where the Commissioner contended that the Assessing Officer did not adequately inquire into Long Term Capital Gain Exemptions u/s 54. The Tribunal found that the Assessing Officer had indeed examined the deduction u/s 54 and addressed the concerns raised, ultimately allowing the claim. The Commissioner did not identify any specific errors in the AO's actions, merely suggesting a need for further investigation without pinpointing any missed inquiries. The Tribunal concluded that the AO had taken a reasonable view during assessment, with no demonstrated errors by the revenue. As none of the conditions for revision u/s 263 were met, the order was not deemed erroneous or prejudicial to revenue, resulting in the appeal by the assessee being allowed.
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• Tribunal Clarifies Timing for Trusts' 80G Approval Applications, Rules in Favor of Applicant's Timely Filing.

  Case-Laws - AT : The Appellate Tribunal addressed the rejection of an application for approval u/s 80G as time-barred. Provisional registration was introduced for newly formed trusts. The Tribunal interpreted the statutory provision to avoid absurdity, holding that the time limit for existing trusts to apply for regular registration is within six months of the expiry of provisional registration. They clarified that the provision "within six months of commencement of activities" applies to trusts not engaged in charitable activities at the time of provisional registration. The Tribunal found the applicant's registration application valid and maintainable as it was submitted within the allowed time. Additionally, since the applicant had applied for permanent registration before the expiry of provisional approval, the application was not time-barred. The appeal of the assessee was allowed.
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• Tribunal: Livestock Not a Capital Asset, Profits are Business Income; Loan Document Evidence Allowed for Review.

  Case-Laws - AT : The Appellate Tribunal considered the disallowance of interest paid on a loan from Hyderabad Mutual Benefit Society. The Tribunal found that the documents certifying the loan were not available to the Assessing Officer before the assessment order. The Tribunal directed the assessee to file an application for admission of additional evidence. Regarding the disallowed expenditure on livestock, the Tribunal held that livestock is not a capital asset, and thus, the expenditure cannot be capitalized. The Tribunal dismissed the appeal on this ground. Additionally, the Tribunal determined that the profit on the sale of livestock should be treated as business income, not capital gain, as livestock is considered stock-in-trade. The Tribunal remanded the issue of computing total income from the purchase of livestock to the Assessing Officer for further verification.
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• ITAT rules on book profit calculation & TDS for non-residents. Fresh verification ordered for deductions. Payments to certain countries not taxable.

  Case-Laws - AT : The ITAT, an Appellate Tribunal, addressed two main issues. Firstly, regarding the computation of book profit u/s 115JB, discrepancies arose from the deduction claimed by the assessee for brought forward losses or unabsorbed depreciation. The Tribunal directed a fresh verification by the Assessing Officer based on the provided chart. Secondly, concerning TDS u/s 195 for payments to non-residents, the Tribunal held that payments to certain countries were not taxable in India under treaty provisions, thus no tax deduction was required. Additionally, the Tribunal ruled in favor of the assessee regarding disallowance of advances written off, as supported by the Commissioner (Appeals)'s factual findings.
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• Tribunal Overturns Tax Addition on Cash Deposits During Demonetization, Citing Inadequate Consideration of Evidence.

  Case-Laws - AT : The Appellate Tribunal addressed the issue of addition u/s 69A with reference to cash deposits during demonetization. The assessee failed to establish the source of these deposits into a bank account, contrary to RBI and Government directives. However, the Tribunal found that the assessee, engaged in the dhall mill business, had consistent cash sales with no abnormal increase during demonetization. The assessee provided evidence of cash on hand before demonetization and claimed to have received demonetized currency from customers post the specified date. The Tribunal held that the assessee's explanation for the cash deposits was genuine and acceptable, considering the nature of the business and submitted evidence. The AO and CIT(A) were criticized for not duly considering the relevant submissions, leading to the allowance of the assessee's appeal.
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• The Tribunal ruled that assessee were not liable for penalty for not auditing accounts due to delayed book updating.

  Case-Laws - AT : The ITAT considered a case involving Penalty u/s 271B for not auditing books as per section 44AB. The Assessee argued books were not updated by the due date for audit under 44AB. The ITAT found the Assessee did not file returns u/s 139(1) and only did so after a notice u/s 148, indicating books were not updated timely. As per legal precedents, non-maintenance of accounts attracts penalty u/s 271A, not 271B. The ITAT ruled in favor of the Assessee, stating failure to maintain books by the due date u/s 139(1) absolved them from penalty u/s 271B for not auditing accounts. The contention that books were updated later was dismissed.
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• The court denied exemption for alleged bogus LTCG from unreliable company shares. Profit size doesn't prove legitimacy.

  Case-Laws - AT : The ITAT considered a case involving denial of exemption u/s 10(38) for alleged bogus LTCG. The assessee invested in shares of a company deemed unreliable due to manipulation by brokers for undue benefits. The ITAT emphasized that profit magnitude does not establish the genuineness of an investee company. Despite the assessee's small profit, it was held that the transaction's genuineness cannot be determined solely by profit amount. The ITAT upheld the decision of the CIT (Appeals), dismissing the assessee's appeal based on the lack of error in the earlier order.
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• Revision u/s 263: ITAT ruled in favor of taxpayer in tax case for non-deduction of TDS on salary/commission payments.

  Case-Laws - AT : The ITAT, an Appellate Tribunal, considered a case involving the revision u/s 263 for non-deduction of tax at source on salary and commission payments. The CIT argued that the AO did not disallow u/s 40(a)(ia). The ITAT held that if the recipient of income has declared and paid taxes on income where no TDS was deducted, the assessee is not in default per Second Proviso to Section 40(a)(ia). The ITAT found that the recipient had declared and paid taxes on salary and commission income. The ITAT disagreed with the PCIT's failure to consider these facts during the 263 proceedings. The ITAT allowed the appeal, stating that TDS on commission should be disallowed and added to the assessee's income for the relevant assessment year.
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• Appellate Tribunal upheld deletion of unexplained investment u/s 69. Director's name instead of company's was genuine mistake.

  Case-Laws - AT : The Appellate Tribunal addressed the addition u/s 69 concerning unexplained investment. The issue stemmed from an agreement displaying the individual name of the assessee, a director of the company, instead of the company's name. The Tribunal upheld the CIT (A)'s decision, noting a genuine mistake rectified later. Section 69 criteria were examined, requiring unrecorded investments with no satisfactory explanation. The Tribunal found the provided explanation credible and supported by evidence, thus dismissing the Revenue's appeal.
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• Appellate Tribunal allows additional evidence in tax assessment case, remands to CIT for fresh review.

  Case-Laws - AT : The Appellate Tribunal considered an ex-parte assessment u/s 144 and an application for additional evidence. The Tribunal held that since the assessment was completed u/s 144 and the assessee provided an explanation for non-appearance, the CIT (A) should have considered the request for additional evidence. The Tribunal found the additional evidence crucial for deciding the case, especially regarding the claim for exemption u/s 10(23C)(iiiad). As a result, the Tribunal admitted the additional evidence and remanded the matter to the CIT (A) for a fresh examination, allowing the assessee an opportunity to support their claim. The Tribunal did not address the merits of the case, and the assessee's appeal was allowed for statistical purposes.
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Customs

• Finance Ministry Launches Automated Exchange Rate System for Customs Valuation, Live July 2024.

  Circulars : A circular issued by the Ministry of Finance announces the launch of the Exchange Rate Automation Module (ERAM) for customs valuation under the Customs Act. The ERAM aims to automate the process of issuing exchange rates based on daily rates from State Bank of India (SBI). Exchange rates will be adjusted to the nearest five paise and published on the ICEGATE website. Rates will be effective from midnight the following day and stored for future reference. Contingency plans are outlined for technical issues, and automated alerts will be sent in case of discrepancies. The automated system will replace manual notifications from the 1st Thursday of July 2024. Stakeholders are advised to follow the new process, with a link provided on the CBIC website for access to published rates.
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• Guidelines for Transferring Goods Under the Customs Act: Deferred Duty Payment and Compliance with MOOWR Regulations.

  Circulars : The Instruction addresses concerns from trade regarding transferring goods between Section 65 Units under the Customs Act. It emphasizes deferred duty payment when goods are moved for home consumption, following MOOWR regulations. Procedures for receiving goods in a Section 65 unit from another warehouse are detailed, including verifying seals, documenting transfers, and compliance with Circulars. Prior permission for clearance is not required under certain circumstances. Compliance with MOOWR and Customs Act provisions is crucial, requiring accurate record-keeping and timely filing of returns. Adherence to regulations is essential to ensure duty liability is maintained until deferred duties are paid upon home consumption clearance. Authorities and industry members are urged to follow the guidelines, with provision to address implementation difficulties to the Board.
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• Refund Claim Rejected as Time-Barred: Court Confirms One-Year Limit Post Provisional Assessment Finalization.

  Case-Laws - HC : In this case, the High Court addressed the issue of a rejected refund claim due to being time-barred. The key determination was the relevant date for calculating the period of limitation for filing a refund claim u/s 27(1B)(c) of the Customs Act, 1962. The Court held that the assessee must apply for refund within one year of finalizing provisional assessment. The Court noted that the assessee's application for finalizing custom duty on a specific date indicated lack of awareness regarding the final assessment. Mere upload of final assessment orders by the Custom Department on the portal was deemed insufficient as it did not constitute proper intimation to the assessee. The Tribunal's consideration of various documents indicating communication of finalization of provisional assessment to the assessee was deemed appropriate. Ultimately, the Court found no fault in the Tribunal's decision and dismissed the appeal, ruling that no legal questions of significance were raised.
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• The court ruled in favor of refunding the amount without delay, dismissing the revenue's appeal.

  Case-Laws - HC : The High Court addressed the issue of whether the Tribunal could uphold the refund granted by the Commissioner, despite setting aside the cost recovery charges demand. The Court held that the appellate-revenue must adhere to the Circular issued by the Central Board of Excise & Customs, which mandates granting refunds arising from adjudication orders without a stay order after three months. The Tribunal relied on this Circular to reject the revenue's appeal against the Commissioner's refund decision. The Court found no merit or substantial legal questions in the appeal and dismissed it.
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• The Tribunal said appeal not valid due to low duty amount below Rs.50 lakhs. Follow CBIC circular.

  Case-Laws - AT : The Appellate Tribunal considered the maintainability of an appeal based on the monetary limit involved and the assessment made by the department. The Tribunal noted that circulars from the CBIC instructed the department not to file or pursue appeals before higher authorities if the duty amount is below specified limits. In this case, the CBIC's circular set a monetary limit of Rs.50 lakhs for appeals before the CESTAT. The Tribunal referred to a Bombay High Court decision supporting the withdrawal of appeals falling below monetary thresholds. As the duty amount in the appeal was below the prescribed limit, the Tribunal found the appeal not maintainable and dismissed it in line with the CBIC's circular.
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• CESTAT dismisses seven departmental appeals due to CBIC circular's Rs.50 lakh threshold, reinstates self-assessment of goods value.

  Case-Laws - AT : CESTAT, an appellate tribunal, addressed the maintainability of appeals based on a CBIC circular setting a monetary limit. The re-assessment of goods at an enhanced value was reversed, restoring self-assessment. The issue was whether additional consideration was paid to exporters. The onus was on the department to prove declared value. The duty involved in each appeal was below the Rs.50 lakh limit per the circular. Citing a Bombay High Court case, it was ruled that appeals below certain monetary limits should be disposed of accordingly. The department's appeals were deemed not maintainable under the 02.11.2023 instructions. All 7 appeals were dismissed.
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FEMA

• India Extends FCRA Certificate Validity for Pending Renewals Until June 30, 2024, or Until Renewal Decision Made.

  Circulars : The Government of India, Ministry of Home Affairs, has extended the validity of FCRA registration certificates for certain categories of FCRA registered entities. The extension applies to entities whose certificates were extended until 31.03.2024 and have pending renewal applications, now extended till 30.06.2024 or until renewal application disposal. Additionally, entities with certificates expiring between 01.04.2024 and 30.06.2024, and have applied/will apply for renewal, will have their validity extended until 30.06.2024 or until renewal application disposal. If renewal applications are refused, the certificate validity will be deemed expired, rendering the association ineligible to receive or use foreign contributions. The notice is issued under the approval of the Competent Authority for compliance by all concerned FCRA registered associations.
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Service Tax

• Tribunal rules in favor of appellant on service tax valuation and procedural issues.

  Case-Laws - AT : The case involved violations of natural justice, service tax Composition Scheme, and valuation issues. The tribunal held that free materials supplied by recipients should not be included in taxable value without investigation. Demand based solely on Form 26AS and returns was deemed impermissible. The extended limitation period was inapplicable as the appellant had a tax record. Pre-amendment Section 73 barred penalty due to non-invoke of extended period. The order was set aside and the appeal allowed.
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• Dispute Over Service Tax Penalty Reduction: Tribunal Rules 25% Penalty Inapplicable; 50% Reduction Granted for Record-Keeping.

  Case-Laws - AT : The case involved a dispute regarding the entitlement to a reduced penalty under the second proviso to Section 78(1) of the Finance Act 1994. The appellant had not obtained service tax registration or paid the applicable tax. The Tribunal held that the 25% penalty was not applicable as the appellant did not pay the determined amount and interest within the specified timeframe. However, the appellant was granted the benefit of the first proviso, reducing the penalty to 50% for a specific period. The Commissioner (Appeals) noted the appellant's maintenance of records and transactions, making them eligible for the reduced penalty. The appellant was directed to calculate the total penalty liability and submit proof of payment to the authority. The appeal was disposed of accordingly.
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Central Excise

• CESTAT ruled fruit juice-based drinks should be classified under Tariff Heading 2202 9020.

  Case-Laws - AT : CESTAT, an Appellate Tribunal, addressed the classification of aerated drinks and fruit pulp or fruit juice-based drinks under different brand names. The issue was whether to classify them under Tariff Heading 2202 9020 or Chapter Sub-heading 22021020 for the period April 2011 to August 2012. The Tribunal referred to a previous case and a decision by a Larger Bench, concluding that the products in question are classifiable under Tariff Item 2202 90 20 as "fruit pulp or fruit juice-based drinks." The Tribunal disagreed with a previous decision cited by the Commissioner. Consequently, the appeal was allowed in favor of the Appellant.
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VAT

• High Court clarifies: Amnesty Scheme allows penalty waiver but no refund if already paid. Petitioner granted waiver after prior tax payment.

  Case-Laws - HC : The High Court addressed the issue of penalty levy and rejection of Amnesty Scheme benefit. The petitioner sought penalty waiver under the Scheme after paying tax and interest before the assessment order. The court held that the Amnesty Scheme allows for interest and penalty waiver, but no refund if already paid. The petitioner believed penalty payment was unnecessary due to prior tax and interest payment. The authorities misinterpreted the Scheme, leading to rejection. Relying on precedent and case facts, the court found the rejection erroneous. The petitioner was granted penalty waiver, and the impugned communication and attachment order were quashed. The petition was allowed.
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Case Laws:

• GST

• 2024 (6) TMI 1258
  Refund of amount paid under threat and coercion, during search proceedings - writ petition was dismissed on the ground that the allegation made by the appellants that there was no proper authorization in INS-01 was a false statement since the revenue, during the course of argument, had produced a copy of the INS-01 dated 12th June, 2023 - HELD THAT:- The payment of tax during the course of search i.e. even before the search could be completed cannot be at any stage of imagination to be treated to be a voluntary payment. Furthermore, it is an admitted case that the department has not issued any receipt under GST DRC-04. The order passed in the writ petition is set aside and there will be a direction to the respondents/GST authorities to return the sum of Rs. 30,00,000/- to the appellants within a period of six weeks from the date of receipt of server copy of this order. With regard to the claim for interest is concerned, the appellants are at liberty to raise such a plea during the adjudication of the show-cause notice for which, we propose to issue the following directions. Appeal allowed.

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• 2024 (6) TMI 1257
  Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - SCN and impugned order were uploaded in the portal and not communicated to the petitioner through any other mode - mismatch between the petitioner s GSTR 3B return and the auto-populated GSTR 2A - HELD THAT:- On examining the impugned order, it is evident that the tax proposal related to a mismatch between the petitioner s GSTR 3B return and the auto-populated GSTR 2A. It is also clear that such proposal was confirmed because the tax payer did not file objections or avail of personal hearing opportunity. By taking into account the assertion that the petitioner could not participate in proceedings on account of being unaware of the same, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits by putting the petitioner on terms. The impugned order dated 12.12.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order - petition disposed off by way of remand.

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• 2024 (6) TMI 1256
  Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - petitioner was not aware of proceedings, and could not participate in the same - HELD THAT:- On examining the impugned order, it is evident that the tax proposal was confirmed because the tax prayer did not respond to the show cause notice by filing objections. The impugned order indicates that the personal hearing notice dated 10.03.2023, reminder dated 29.05.2023 were sent by RPAD and that the latter was received by the petitioner on 01.06.2023. In these circumstances, the explanation of the petitioner that he was unaware on account of notices being uploaded on the GST portal cannot be accepted. At the same time, it is apparent that the tax proposal was confirmed without the petitioner being heard and liability was imposed under Section 74 of applicable GST enactments. The impugned order dated 30.10.2023 is set aside on condition that the petitioner remits that 15% of the disputed tax demand within fifteen days from the date of receipt of a copy of this order. Within the said period, the petitioner is directed to submit a reply to the show cause notice - Petition disposed off.

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• 2024 (6) TMI 1255
  Violation of principles of natural justice - petitioner failed to reply to rest of the notices that preceded the impugned order - discrepancies between the amount of the credit reflected in Form GSTR 2A - HELD THAT:- Considering the fact that the petitioner appears to be a small time dealer and considering the fact that the petitioner is willing to deposit 25% of the disputed tax, as a condition, for the case to be heard again, this Court is inclined to grant partial relief to the petitioner by quashing the impugned order and remitting back the case to the respondent to pass fresh orders on merits and in accordance with law within a period of two months from the date of receipt of a copy of this order, subject to the petitioner depositing 30% of the disputed tax within a period of 30 days from the date of receipt of a copy of this order from its Electronic Cash Register and subject to filing reply to the show cause notices that preceded the impugned order. Petition disposed off by way of remand.

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• 2024 (6) TMI 1254
  Refund of unutilized accumulated ITC - Rule 89 (4) of the CGST Rules - non-constitution of GST tribunal - period July 2017 to January 2018 - HELD THAT:- When the petition was filed, the CGST Tribunal was not constituted. It is constituted now. Therefore, on asking as to why petitioner should not file an appeal before the Tribunal, it is stated that a recovery notice has also been received for Rs. 3,62,841/-. The petition is disposed off with a direction to petitioner to exhaust its alternate remedy by filing an appeal before the Tribunal. If the appeal is filed within four weeks from today, the delay, if any, shall be deemed to have been condoned.

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• 2024 (6) TMI 1253
  Time limitation - petition filed long after the time expired for filing an Appeal under Section 107 of TNGST Act, 2017 - HELD THAT:- This Court is inclined to dispose of this Writ Petition by giving liberty to the petitioner to file statutory appeal before the Deputy Commissioner (GST-Appeal), Madurai and Tirunelveli, within 30 days from the date of receipt of a copy of this order - Since the Deputy Commissioner (GST-Appeal), Madurai and Tirunelveli, is not a party to this proceedings, the Deputy Commissioner (GST-Appeal), Madurai and Tirunelveli, is impleaded as sue moto as second respondent. The petition is disposed off.

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• 2024 (6) TMI 1252
  Maintainability of petition - petitioner has an alternate remedy by way of filing an appeal before the Appellate Officer/Deputy Commissioner (ST) (Appeals), Trichy - HELD THAT:- There is no merits in this Writ Petition and the petitioner has an alternate remedy, the Court is inclined to dismiss this Writ Petition by giving liberty to the petitioner to file statutory appeal before the Deputy Commissioner (ST) (Appeals), Trichy under Section 107 of TNGST Act, 2017 within 30 days of this order. The petition is dismissed.

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• 2024 (6) TMI 1251
  Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - SCN and impugned order were uploaded in the view additional notices and orders tab on the GST portal, but not communicated through any other mode - HELD THAT:- On perusal of the impugned order, it is evident that the tax proposal was confirmed solely because the petitioner did not reply to the show cause notice. In view of the assertion that the petitioner could not participate in the proceedings on account of being unaware of the same, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits. The petitioner has placed on record evidence that a sum of Rs. 8,35,000/- was debited from the bank account on 19.06.2024. Therefore, to that extent, revenue interest is secured. The impugned order dated 18.12.2023 is set aside subject to verification of the debit of a sum of Rs. 8,35,000/-. The petitioner is permitted to file a reply to the show cause notice within two weeks from the date of receipt of a copy of this order.

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• 2024 (6) TMI 1250
  Violation of principles of natural justice - SCN and impugned order were uploaded on the GST portal, but not communicated to the petitioner through any other mode - mismatch between the petitioner s GSTR-3B returns and the GSTR-1 statement - HELD THAT:- The impugned order discloses that the tax proposal was confirmed because the petitioner did not respond to the show cause notice or utilize the opportunity of participating in personal hearings. Since the petitioner asserts that such participation was not possible on account of not being aware of the proceedings, the interest of justice warrants that the petitioner be provided an opportunity, albeit by putting the petitioner on terms. The impugned order dated 30.12.2023 is set aside subject to the condition that the petitioner remits 10% of the disputed tax demand, within two weeks from the date of receipt of a copy of this order. Within the said period, the petitioner is permitted to submit a reply to the show cause notice - petition disposed off.

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• 2024 (6) TMI 1249
  Violation of Principles of Natural Justice - petitioner was not heard - HELD THAT:- It is noticed that the impugned order dated 26.03.2024 passed by the respondent, though is reasoned it has been passed without hearing the petitioner. The impugned order dated 26.03.2024 is quashed and the case is remitted back to the respondent to pass fresh orders on merits after hearing the petitioner - Petition disposed off by way of remand.

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• 2024 (6) TMI 1248
  Violation of principles of natural justice - petitioner was unaware of the notice that preceded the impugned order as also the impugned order that can be passed on 23.06.2023 - HELD THAT:- Considering the fact that the impugned order has been passed against the petitioner without giving an opportunity to the petitioner to reply the show cause notice, the impugned order is quashed and the matter is remitted back to the respondent. The petitioner is at liberty to file a reply to the show cause notice subject to the petitioner depositing 10% of disputed tax within a period of 30 days from the date of receipt of a copy of this order. In case the aforesaid sum of Rs. 22,83,579/- has already been recovered, there shall be no further recovery, pending further orders regarding the demand proceedings. Petition disposed off by way of remand.

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• 2024 (6) TMI 1247
  Challenge to assessment order - documents submitted by the petitioner were not taken into consideration and on the ground that the tax proposal was confirmed on a ground that was not raised in the show cause notice - HELD THAT:- The only reply in respect of proceedings initiated by the first respondent is the reply dated 11.10.2023. Apart from uploading a couple of documents, the petitioner failed to respond to the show cause notice. In the show cause notice, the tax proposal was founded on a mismatch between the petitioner s GSTR-3B returns and the auto-populated GSTR-2A. The impugned order refers both to Section 16(4) of applicable GST enactments and to the mismatch. In those circumstances, interference is not warranted merely because Section 16(4) was also referred to - albeit by putting the petitioner on terms, it is just and appropriate that the petitioner be provided an opportunity to contest the tax demand on merits. The impugned order dated 30.01.2024 is set aside and the matter is remanded to the first respondent for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand within three weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.

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• 2024 (6) TMI 1246
  Maintainability of petition - petitioner has challenged the impugned order although the petitioner has an alternate remedy - HELD THAT:- It is noticed that the impugned order is dated 30.04.2024 and the present writ petition has been filed on 07.06.2024 well within the period of limitation prescribed under Section 107 of the TNGST Act, 2017 to file an appeal. There are no merit in the challenge to the impugned order in this writ petition, as there are no procedural violations that have been pointed out in the impugned order. Therefore, the Writ Petition stands disposed of by directing the petitioner to file statutory appeal within a period of 30 days from the date of receipt of a copy of this order subject to the petitioner compliance with the other requirements of Section 107 of the TNGST Act, 2017.

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• 2024 (6) TMI 1245
  Violation of principles of natural justice - failure to notice that the notices that were issued prior to the impugned order - HELD THAT:- This Court is inclined to dispose of this Writ Petition by setting aside the impugned order dated 22.12.2023 by giving liberty to the petitioner to file a reply to the show cause notice in DRC 01 dated 27.09.2023 that preceded the impugned order dated 22.12.2023 in DRC 07, subject to the petitioner depositing 10% of the disputed tax from the Electronic Cash Register of the petitioner within a period of 30 days from the date of receipt of a copy of this order. The impugned order, which stands quashed, shall be treated as addendum to the show cause notice in DRC 01 dated 27.09.2023. Subject to such compliance by the petitioner, the respondent is directed to pass fresh orders on merits and in accordance with law as expeditiously as possible preferably within a period of three months thereafter. Petition disposed off.

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• 2024 (6) TMI 1244
  Refund of input tax credit accumulated - time limitation - zero-rated supplies - Clause(e) of Explanation 2 to section 54 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- The petitioner was eligible for benefit of extended period granted vide Notification No. 13/2022 Central Tax dated 05.07.2022, whereby relaxation of COVID period from 01.03.2020 to 28.02.2022 was eligible for the period from June-2018 to Jan-2019. However, the notification dated 05.07.2022 was not in existence at the time of issuance of the impugned orders. The petition is allowed by directing the respondents to grant the benefit of Notification No. 13/2022-Central Tax dated 05.07.2022 whereby the relaxation of Covid period from 01.03.2020 to 28.02.2022 was eligible for period from April 2018 to January, 2019. It appears that notification dated 05.07.2022 was not available at the relevant time when the impugned orders were passed and therefore, benefits of the same were not given to the petitioner. Petition allowed.

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• 2024 (6) TMI 1243
  Seeking quashing of impugned order - petitioner neither participated in the show cause proceeding nor filed any statutory appeal in time - HELD THAT:- There is no proper explanation also forthcoming from the petitioner as to why the statutory appeal was not filed in time except stating that the petitioner had handed over the papers to the Sale Tax Practitioner/GST Practitioner to file an appeal, but was not filed. This Court is inclined to exercise its discretion in favour of the petitioner by quashing the impugned order and by remitting the case back to the respondent to pass a fresh order on merits and in accordance with law subject to the petitioner depositing 10% of the disputed tax within a period of 30 days from the date of receipt of a copy of this order. Petition allowed by way of remand.

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• 2024 (6) TMI 1242
  Transition of input tax credit lying unutilized in its VAT returns - Section 140 of the respective GST enactments - HELD THAT:- The credit that was availed by the petitioner under the provisions of the TNVAT Act, 2006 was to be allowed subject to the petitioner complying with the requirements of Section 140 of the TNGST Act, 2017 read with Rule 117 of the TNGST Rules, 2017. The credits that are availed under the provisions of the TNVAT Act, 2006 are indefeasible in nature. In this connection, reliance placed on the decision of the Hon ble Supreme Court in COLLECTOR OF CENTRAL EXCISE, PUNE VERSUS DAI ICHI KARKARIA LTD. [ 1999 (8) TMI 920 - SUPREME COURT ], wherein, the Hon ble Supreme Court while dealing with the provisions of the Central Excise Rules, 1944 in the context of CENVAT Credit Rules/MODVAT Credit Rules, held that once the credit is validly availed, it is indefeasible unless provided to lapse under the law and that credits availed under the provisions of the erstwhile Central Excise Act, 1944 and Central Excise Rules, 1944 are indefeasible and are intended to reduce the cascading effect of the tax to benefit the consumers. The provisions of Section 54 of the TNGST Act, 2017 also do not provide for the refund of such unutilized input tax credit that was not transitioned under Section 140 of the TNGST Act, 2017. Be that as it may, the petitioner cannot be made to suffer if the credit was validly availed. The impugned order can be set aside for verification as to whether the petitioner had validly availed input tax credit under the provisions of the TNVAT Act, 2006 and the credit availed by the petitioner satisfied the requirements of Section 19 of the TNVAT Act, 2006 read with relevant Rules - Petition allowed partly.

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• 2024 (6) TMI 1241
  Cancellation of registration of petitioner - petitioner has not filed the returns for six consecutive months and has not responded to Ext. P2 notice - HELD THAT:- It is trite law that if the show cause notice is vague and where the order of cancellation also does not specify the factors that led to the cancellation of registration, the entire proceedings must be held to be bad in law. Further, it is a well settled salutory principle that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner. Since the proceedings were initiated by the 1st respondent in Form GST-REG-31 and not in Form GST-REG 17, Ext.P3 order is without jurisdiction. Ext. P3 is accordingly set aside. It is made clear that setting aside Ext. P3 will not have the effect of absolving the petitioner from any fiscal liability. The writ petition is disposed of.

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• 2024 (6) TMI 1240
  Violation of principles of natural justice - irrelevant notification was applied in respect of sanitary ware - petitioner s request for an adjournment in response to the show cause notice was denied and a wrong notification was applied - HELD THAT:- On perusal of the impugned order, it appears that the respondent applied Notification No.5/2020 dated 16.10.2020. The petitioner has placed on record the said notification. The notification applies to satellite launch services and not to sanitary ware. The petitioner has also placed on record Notification No.6/2018, which reduces the GST rate on sanitary ware to18% from the earlier 28%. By reply dated 19.09.2023 the petitioner requested for an adjournment for reasons stated therein up to 07.10.2023. Such request was denied. As a result, the tax proposal was confirmed without considering the petitioner s response on merits. The impugned order dated 20.09.2023 is set aside and the matter is remanded for re-consideration. The petitioner is directed to submit a reply to the show cause notice within fifteen days from the date of receipt of the copy of this order - petition disposed off by way of remand.

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• 2024 (6) TMI 1239
  Challenge to search and seizure order - non-compliance with mandatory provision of Section 67 of UPGST Act - reasons to believe - Joint Commissioner, while granting the authorization for search and seizure, never put forth the reasons to believe that the search was necessary - HELD THAT:- The attempt of the State authorities in explaining the issue of two INS-01 forms has resulted in a kerfuffle and nothing more. The confusion is writ large in the counter affidavit and no sensible explanation has been provided to put forward the actual reasons to believe as required under Section 67 of the Act. In the present case, the said procedure had not been followed, and accordingly, the entire authorization is vitiated and liable to be quashed. The entire proceedings that have originated from the illegal search and seizure carried out under Section 67 of the Act have no foot to stand on, and accordingly, are quashed and set aside. The State authorities are directed to release all the goods and documents that they may have detained or confiscated within a period of three weeks from date - Any amount deposited by the petitioner in lieu of the order passed under Section 74 of the Act should be refunded to the petitioner within a period of eight weeks from date.

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• 2024 (6) TMI 1238
  Challenge to assessment order - notices and orders were only uploaded on the GST portal and not communicated to petitioner - breach of principles of natural justice - HELD THAT:- The documents on record reveal that proceedings were initiated pursuant to a notice in Form ASMT-10 in November 2020. Thereafter, the intimation was issued in May 2023 and the assessment order was issued on 25.07.2023. As a registered person under applicable GST statutes, the explanation of the petitioner that he was unaware of the notices and the assessment order is not entirely convincing. However, it is noticeable that the petitioner was not granted sufficient time for the personal hearing by notices dated 03.07.2023 and 17.07.2023 and, admittedly, the petitioner was not heard. The impugned orders are quashed and these matters are remanded to the assessing officer for reconsideration. The petitioner is permitted to submit a reply to the show cause notice within a maximum period of 15 days from the date of receipt of a copy of this order along with the remittance of 10% of the disputed tax demand under each assessment order - petition disposed off by way of remand.

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• 2024 (6) TMI 1237
  Recovery of erroneous refund on account of inverted duty structure - SCN does not provide any particulars beyond stating that an excess refund was made to the petitioner on account of inverted duty structure - Violation of principles of natural justice - HELD THAT:- On examining the impugned order, it is noticeable that the only reason specified therein is that the CAG para pointed out that the taxpayer was issued excess refund on account of inverted duty structure and that the excess amount is Rs. 7,51,961/-. Unless the show cause notice sets out sufficient particulars to enable the assessee to understand the nature of claim being made against such assessee, it is not possible for such assessee to respond in a meaningful way to the show cause notice. In this case, both the SCN and the impugned order are bereft of particulars. Therefore, the order calls for interference. The impugned order is quashed and the matter is remanded for re-consideration. The respondents are directed to issue a fresh show cause notice to the petitioner setting out all relevant particulars so as to enable the petitioner to respond thereto - Petition disposed off by way of remand.

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• 2024 (6) TMI 1236
  Levy of GST - royalty to be paid by the petitioners, on extraction of sand, for which an agreement has been entered into by the petitioners and the State through the Mining Department - HELD THAT:- When royalty has been declared to be a tax by a Seven-Judge Bench, as of now the same cannot be deemed to be a consideration for service of grant of licence. In any event, it is seen that the impugned orders are based on an advance ruling under the Bihar Goods and Services Tax Act, 2017 which is also said to be challenged in CWJC No. 3531 of 2022. Post on 30.01.2024 along with CWJC No. 3531 of 2022.

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• Income Tax

• 2024 (6) TMI 1235
  Reopening of assessment u/s 148A - difference between the allotment price of Rs. 13/- and the market price of Rs. 659/-, necessitating re-assessment of the returns filed for that year - HELD THAT:- In the matter in hand, it being clear that no sale of such shares had been effected in the Financial Year 2015-16, there is no question of incidence of income on account of any sale of KFCL shares, justifying a view that income in that year had escaped assessment. Besides, there is no other ground in the notice for proposing reassessment. Consequently, the very basis on which the Impugned Order passed u/s 148A (d) of the Act, stands undermined. Since the very basis of proposing re-assessment does not exist, as a matter of fact, nothing survives in the proposal to conduct reassessment. Writ Petition deserves to be allowed. There has been no application of mind to the facts of the case and the explicit and specific reply of the Petitioner and the documentary record that showed that no sale had been effected in that year, leading to no income that could have arisen in that year. There is no merit in the request of the Revenue to remand the matter for a fresh consideration of the facts (instead of simply quashing the Impugned Order).

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• 2024 (6) TMI 1234
  Rejection of application u/s 119(2)(b) - delay filing Form-10DA, which is necessary for availing deduction u/s 80JJAA - assessee submits that medical grounds and the continuation of the COVID 19 pandemic were cited as reasons for delay in filing the said form - HELD THAT:- The petitioner has placed on record Form-10DA. On perusal, it is clear that the Chartered Accountant signed the document on 30.06.2022, which is within the time limit of 30.09.2022. The petitioner has also placed on record the ITR acknowledgment for assessment year 2022-23 and the intimation u/s 143(1) accepting the deduction. In the application for condonation of delay, the petitioner has set out multiple reasons including the continuation of the COVID 19 pandemic, medical grounds of family member and has stated that the delay was neither willful nor wanton. As contended by learned counsel for the petitioner, the power u/s 119(2)(b) is required to be exercised whenever the refusal to condone delay would result in genuine hardship to the assessee. Application was rejected by recording that this power is to be exercised only in extraordinary circumstances. There is nothing in Section 119(2)(b) which indicates that the power should only be exercised in extraordinary circumstances. By taking into account the fact that Form-10DA was signed on 30.06.2022 and filed on the extended date for filing the return of income, in my considered view, it is an appropriate case for condoning the delay. Undoubtedly, genuine hardship would be caused to the petitioner unless the delay is condoned. WP allowed. The impugned order is set aside. As a consequence, the respondents are directed to receive Form-10DA and process the petitioner s return of income on such basis.

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• 2024 (6) TMI 1233
  Addition u/s 68 - Tribunal affirming the order passed by CIT(A) by which the addition made by the assessing officer stood deleted - HELD THAT:- Tribunal as noted that pursuant to the notice issued under Section 133(6) of the Act by the assessing officer, the share applicants have furnished the evidence called for by the assessing officer and established their identity, creditworthiness and the genuineness of the transaction. Tribunal noted that summons issued to the director by the assessing officer was complied with and he has given statement on oath by appearing in person before the assessing officer. If we turn back to the findings recorded by the CIT(A), we find that the matter was taken up by the PCIT under Section 263 of the Act and an order was passed holding that the reassessment order was erroneous and prejudicial to the interest of the revenue for not making profit and sufficient enquiries into the share capital raised by the assessee during the relevant year. In the said order dated 10th March, 2014 the CIT(A) had set aside the assessment order and issued three specific directions. These directions were scrupulously taken into consideration and we find from the order passed by the CIT(A), the entire factual aspect has been discussed which have been noted by the assessing officer while completing the assessment. Thus, we find that the matter to be entirely factual and no substantial questions of law arise for consideration. Revenue appeal dismissed.

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• 2024 (6) TMI 1232
  Eligibility of exemption from realisation of process fee, development charges in view of the Niyamavali, 2014 - said relief has also been pressed on the ground that the Society has already got benefits under Section 12A and 80G - petitioner, which is a charitable society, applied for sanction of map for construction of temple and cremation site, which was so accorded by the SDA - refusal to grant exemption to the petitioner Society on the ground that from time to time notices were sent to the petitioner and at the time of sanction of map, the petitioner Society was not accorded exemption under Section 12A and 80G HELD THAT:- It is not in dispute that at the time of sanction of map, the applications of the petitioner Society for registration under Section 12-A and 80-G of the Act, 1961 were pending for approval and the same was approved by the SDA on 17.11.2014. Thereafter, CIT (Exemption), Lucknow had accorded exemption to the petitioner Society under Sections 12-A and 80G of the Act, 1961 on 29.03.2016 with effect from 01.04.2014. The Government order dated 19.10.2002 provides that the religious institutions, which work for public and charitable purpose without earning any profit or loss and do not indulge in any business activity, are exempted from development charge etc. The subsequent Government order dated 19.10.2002 had amended the previous Government order dated dated 21.05.1998. In view of the Niyamavali, 2014 and the successive Government orders, the petitioner Society is entitled for concession for payment of process fee, development fee etc. as provided under Section 53 of the Act, 1973 in the light of the exemptions so accorded by the Income Tax Department on 29.03.2016 w.e.f. 01.04.2014. Thus, the impugned orders cannot sustain and the same are accordingly set aside. Writ petition is allowed and the matter is relegated to the Vice Chairman, SDA to take a fresh decision within a period of six weeks from the date of production of certified copy of this order but certainly considering the Niyamavali, 2014 and the exemption under Section 12A and 80G.

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• 2024 (6) TMI 1231
  Delay in filing the return u/s Section 119 (2) (b) - delay of 15 days was sought to be condoned - HELD THAT:- This Court finds that the respondents have ample powers to condone the delay of the assessee, if sufficient reasons are found. The petitioner is a widow and is running a very small business of herbs and was at a loss in the year when she was running this business as a proprietor of the firm. As the delay in filing the return has been adequately explained by stating the complete factual matrix, this Court is inclined to allow the writ petition. Accordingly, writ petition is allowed while quashing the impugned order with respondents as directed to treat the return filed by the petitioner for the assessment year 2021-2022 within time.

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• 2024 (6) TMI 1230
  Leave Encashment - Exemption u/s 10AA - Review of income limit for taxing purposes on earned leave salary u/s 10AA (ii) with retrospective effect by retired employees - HELD THAT:- Petitioners all stood retired before the latest notification, which has been issued fixing the upper limit as Rs. 25 lakhs for exemption from payment of earned leave income. The employer has also deducted the admissible tax above Rs. 3 lakhs from the petitioners. At this distant point of time, this Court, considering the limitation on the power of the Court as well as the doctrine of separation of powers, cannot issue a mandamus to the respondent Authorities to revise the upper limit of the encashment of earned leave for granting exemption from payment of the income tax with retrospective effect. Issuance of notification, as provided in the provision, is in the realm of the powers of the Executive. The Court, though, has sympathy with the petitioners, but considering the limitation on powers of the Court, this Court is unable to issue a writ of mandamus commanding the respondents to revise the upper limit in respect of the employees who retired before 01.04.2023. This is in the realm of policy decision, which is to be taken by the Executive. Thus, these writ petitions are disposed of with liberty to the petitioners to approach the Government for the reliefs sought for in these writ petitions, and the Government may take a decision on their representations. Pending interlocutory application, if any, in these present writ petitions stands dismissed.

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• 2024 (6) TMI 1229
  Rectification of mistake u/s 154 for denial of exemption u/s 11 - rectification application as filed beyond the time limit - AO found that the income was wrongly shown under business income instead of income from other sources thus denying exemption - prima facie mistake committed by the assessee society wherein incorrect input were given in the return filed and it is for this reason that the CPC while processing the return did not give the deduction claimed u/s 11 of the I.T Act - revised return of income has been submitted rectifying the mistake initially committed while disclosing the income whereby the income has now been disclosed under the head income from other sources . HELD THAT:- The fact of the matter is that it was not a rectification application simpliciter u/s 154 but actually a return of income revising the head of income disclosing the income under the correct head of income in the hands of the assessee society and rest all particulars remaining the same. The said return of income was in substance a return filed under section 139(5) though wrongly mentioned as filed u/s 139(4) for the simple reason that in the present case, the assessee has already filed the original return of income and question of filing the belated return of income u/s 139(4) doesn t arise. The said revised return of income has been filed within the stipulated time frame as so prescribed u/s 139(5) of the Act and given that no intimation u/s 143(1) has been issued by the CPC Bangalore within stipulated period of one year from end of the financial year in which return was so filed, it shall be deemed that such return of income has been accepted by the Revenue and no adjustment is warranted. Thus, both the lower authorities have failed to take into consideration revised return of income so filed and were swayed by the fact that it was a rectification application u/s 154 of the Act. Even for the sake of argument, it is considered as a rectification application, the fact of the matter is that a mistake has occurred while filing the original return of income and within 15 days of receiving the intimation u/s 143(1), the assessee has moved the rectification application u/s 154(2) and in terms of section 154(8), it was incumbent on part of the CPC to pass an order within six months of receipt of the rectification application and given that the same has not been passed, it will be taken as deemed acceptance on part of the CPC Bangalore that they have accepted the rectification application so filed. As far as the second rectification application is concerned, we are unable to appreciate the reasoning adopted by the AO while rejecting the application. The AO has stated that the CPC has rightly processed the return of income failing to appreciate that the assessee has filed a revised return of income which has not been processed by the CPC and secondly, what details have not been given by the assessee has not been specified by the AO while rejecting the application. Thus all necessary particulars have been disclosed in the revised return of income in terms of receipts and utilization, and there is no justification in denying the claim of exemption u/s 11 to the assessee society and the same is hereby directed to be given as so claimed in the return of income. Appeal of the assessee is allowed.

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• 2024 (6) TMI 1228
  Addition of LTCG - differential amount between reported by tax auditor as LTCG and declared by the assessee in its return of income as LTCG - HELD THAT:- In nutshell both the parties are at consensus/ad-idem that an income by way of LTCG to the tune of Rs. 9172/- could be added. Addl./JCIT(A) erred in making addition of Rs. 2,62,383/- towards long term capital gain as reported in clause16(d) of the tax audit report , while the fact of the matter is that the assessee has duly declared long term capital gain of Rs. 2,53,211/- in the return of income filed by the assessee with department and paid due taxes on the same, and at the best only differential amount of Rs. 9,172/- could have been sustained by ld Addl/JCIT(A) . Both the parties are at consensus/ad-idem that the amount of Rs. 9,172/- can be added and brought to tax, otherwise the same amount of income by way of LTCG to the tune of Rs. 2,53,211/- would be doubly taxed which is not permissible. Thus, we sustain the addition under the head LTCG to the tune of Rs. 9172/- and grant relief to the assessee by deleting the additions under the head LTCG as sustained by ld. CIT(A), as the LTCG to the tune of Rs. 2,53,211/- is reported by the assessee in the ROI filed with the department. Thus, the appeal of the assessee is partly allowed

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• 2024 (6) TMI 1227
  Validity of order passed by CIT(A) (NFAC) dismissing the appeal of the appellant - Difference of Points for determination considered by CIT(A) from the points for determination and the grounds of appeal taken up by the assessee. HELD THAT:- It is seen from the order that the appeal decided by the Ld. CIT(A) does not pertain to the case of the assessee. It is clear from the facts mentioned in the appellate order that the appeal decided by the Ld. CIT(A) pertains to the assessment order of ITO, Ward-2, Vapi for AY.2016-17; however, the impugned assessment order was passed u/s 143(3) r.w.s. 147 of the Act by the ITO, Ward-1(3)(1), Surat for AY.2014-15. CIT(A) has decided the appeal against a partnership firm who had filed return of income for the AY.2016-17 on 23.07.2016, declaring total income of Rs. 4,57,260/-. However, in case of the appellant, the original return for AY.2014-15 was filed on 30.07.2014, declaring total income of Rs. 8,61,350/-. We also found that the grounds of appeal raised by the assessee as evident from Form 35 is totally different from the grounds of appeal adjudicated by the Ld. CIT(A) which is mentioned at para 3 of the appellate order. Hence, the Ld. CIT(A) has dismissed the appeal of the appellant on the facts and grounds of appeal of some other case and not on the facts and grounds of appellant s case. Therefore, the order of Ld. CIT(A) is liable to be set aside at the threshold because it has not been passed as per the mandate of section 250(6) of the Act. Points for determination considered by him are totally different from the points for determination and the grounds of appeal taken up by the assessee. Since the appeal has been decided not on the facts and ground of the appellant but on some other case, we set-aside the order of the Ld. CIT(A) and remit the matter back to the file of the Ld. CIT(A) for passing fresh order in accordance with law after giving reasonable opportunity of hearing to the assessee. The list of the appealable orders is provided in section 253 of the Act and an order u/s 250 passed by the Ld. CIT(A) is an appealable order. In the present case, the order passed by the Ld. CIT(A) does not deal with the facts and grounds of appeal raised by the assessee in his appeal. In substance, it is not an appellate order in case of the assessee. As stated earlier, it is also not as per the mandate provided u/s 250(6) of the Act. All the facts are not available before the Bench including the points for determination, decision thereon and the reasons for the decision. Moreover, the valuation report subsequently received by the Assessing Officer was also not considered either by the Assessing Officer or by the Ld. CIT(A). Similarly, the addition of credit entries has also not been considered by the Ld. CIT(A). In view of these peculiar facts, the ratio of the decision relied upon by the Ld. AR cannot be applied to the facts of the assessee. We have already set aside the order of Ld. CIT(A) and remitted the matter back to him. We make it clear that we are not making any view on the merits of claim made by the assessee including adoption of valuation report and direction for consequential relief under section 49(4) of the Act as it is for the appellate authority to consider and decide. For statistical purposes, the appeal of the assessee is allowed.

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• 2024 (6) TMI 1226
  Estimation of income - Bogus purchases u/s 69C - finding of the investigation Wing that party was engaged in providing bogus bills without actual sales - HELD THAT:- The amount was outstanding as on 31/3/2010 in the books of the assessee. This sum was paid on 1/10/2010 by the assessee by account payee cheque. Quantity of purchases in the above transaction is shown by the assessee stated to be in closing stock and valued at the same rate. Assessee has stated that it has the closing stock of Rs. 1.35 crores. It is not the claim of the learned assessing officer that the purchases shown by the assessee are not at market rate. It is claimed by the assessee that above amount is also standing in the books of accounts in the closing stock at the same rate. Therefore, only the appropriate amount of the gross profit involved in the above transaction needs to be added to the total income of the assessee. As there is no information available with the assessing officer due to non-compliance by the assessee, non-compliance before the CIT appeal and also not producing any details except written submission before us, we are constrained to adopt 12.5% of the bogus purchases as income of the assessee. Accordingly the AO is directed to restrict an addition of 12.5%. Decided partly in favour of assessee. Set-off of loss as per return of income - claim of the assessee is that such loss should be set off against any income held to be chargeable on account of this bogus purchases in view of CBDT circular number 11 of 2019 - HELD THAT:- The circular states that there was an uncertainty on the issue of set off of losses against the income referred to under section 115BBE. As per paragraph number 4 of that circular it was stated that to remove any ambiguity of interpretation set off of any losses was specifically inserted only by the finance act 2016 with effect from 1/4/2017, therefore assessee is entitled to claim set off of loss against income determined under section 115BBE of the act in the assessment year 2016 17. Thus the claim of the assessee is covered by the circular as the impugned assessment year is 2010 11. Accordingly ground of the appeal is allowed.

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• 2024 (6) TMI 1225
  Disallowance on the basis of audit report in the intimation generated u/s 143(1) - disallowance of Gratuity u/s 43B as not mentioned in proper classification in Income Tax Return and also not reported in the tax audit report - HELD THAT:- Inadvertent non-reporting in tax audit report by auditor is bonafide when when all details are available in ITR on records although such deduction was find mentioned in wrong classification in ITR. Deductions based on the genuine claim of the assessee cannot be denied especially in the circumstances as narrated above. As such the assessee has claimed deduction u/s 43B of the Act and therefore in our considered view, the same should have been allowed by the authorities below. The income of the assessee should not be over assessed even if there is a mistake made by the assessee. As such the legitimate deduction for which the assessee is entitled should be allowed while determining the taxable income. Thus the claim of the assessee cannot be denied for the reason that a deduction was mentioned in wrong classification in ITR especially in the circumstances where all other evidence is available on record suggesting the deduction in pursuance to the provisions of section 43B is available. Appeal of the assessee are allowed.

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• 2024 (6) TMI 1224
  Validity of the final assessment order passed by the AO u/s 144(C)(3) beyond period of limitation - Role of the Dispute Resolution Panel (DRP) in deciding on objections - mandation to pass the assessment order within one month from the end of the month in which the statutory period of filing the objections expired - HELD THAT:- A perusal of Section 144C(2) of the Act would show that the assessee, on receipt of the draft order, shall file his objections within 30 days of the receipt of the draft order with Dispute resolution Panel and the AO. Only when no objections are received within the period specified under Sub- Section 2, the Assessing Officer shall complete the assessment on the basis of the draft order, as contemplated under Section 144(C)(3) of the said Act. What is contemplated under Section 144C(2) is the filing of the objections by the assessee with the Dispute Resolution Panel, if he is not accepting the draft assessment order. The said provision also contemplates filing of such objection before the Assessing Officer as well. If such objection is filed in time, then the Dispute Resolution Panel alone shall proceed to decide the matter as provided under Section 144C(5) 6 of the said Act. DRP may confirm, reduce or enhance the variation proposed in the draft order. It is not in dispute that the DRP rejected the objection filed by the assessee on the ground that it is barred by limitation. Though, it is an order rejecting the objections but the Panel concluded that it does not find it fit for issuing directions for the guidance of the assessing officer for enabling him to complete the assessment. Once, the DRP has chosen to reject the objections on the ground of delay, it goes without saying that resultant position of such rejection is nothing but confirming the merits of draft order passed by the AO but in no way extends the limitation of passing the order under sub-section (4) of Section 144 of the Act. The final order should have been passed under sub- section (3)(b) of Section 144 read with sub-section (4)(b) of Section 144 of the Act. of the Act. There is nothing in the DRP order stating that the directions are communication to the assessee and the departmental authorities as per the provision of Section 144C(5) of the said Act. Rather, being aware of the lapse at end of the AO, ordered that The Revenue is advised to take further course of action as per the law and precedents in interest of revenue. Consequently, we are inclined to hold that the final order passed of AO under Section 144C(13) of the Act, is devoid of jurisdiction. The additional ground is sustained. The appeals are allowed.

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• 2024 (6) TMI 1223
  Deduction of interest income received from banks u/s. 80P(2)(a)(i) - considering the interest income as income from other sources u/s. 56 - HELD THAT:- We note that the assessee was not allowed deduction under Chapter VIA of the Act by observing that the assessee is not registered under the the Karnataka Co-operative Societies Act, 1959, it is registered under Karnataka Souharda Sahakari Act, 1997. We further note that the assessee has not represented the case before the CIT(Appeals). In the interest of justice, we remit the appeal to the CIT(Appeals) for fresh consideration and decision as per law after reasonable opportunity of being heard to the assessee. The assessee is directed to update its correct email-id and phone number in the departmental portal and respond to the notices issued by the department. The assessee is directed not to seek unnecessary adjournment for early disposal of the case and in case of further default, the assessee shall not be entitled to any leniency. Appeal by the assessee is allowed for statistical purposes.

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• 2024 (6) TMI 1222
  Revision u/s 263 - as per CIT AO did not make proper enquiries in respect of Long Term Capital Gain Exemptions u/s 54 - HELD THAT:- AO had not only examined the deduction u/s. 54 of the Act, but also blamed the assessee that the claim made by the assessee u/s. 54 of the Act amounted to wrongful and malafide claim. The blame so made was explained by the assessee, and consequently, the claim of the assessee was allowed by ld. AO. Thus, having raised the issue of deduction u/s. 54, collected the related information and after applying the mind on the information so collected, the claim was allowed. We also take note that the case of the assessee was re-opened for verification of source of investment in property for an amount. Said issue was examined and subsequently the ld. AO having noticed that the assessee had claimed deduction u/s. 54 of the Act, he called for information while exercising powers u/s. 133(6) of the Act. All the details related to claim were examined as is evident from the findings recorded in the body of the assessment order. We may note here that ld. CIT evidently did not place on record any apparent error on the part of the AO to substantiate that order passed by ld. AO is prejudicial to the interest of revenue. He only mentioned that a detailed investigation was required to be conducted in order to verify the claim of the assessee for which related details had already been called for and examined. CIT has not pinpointed as to on which aspect enquiry required to be made was not made by the ld. AO. He commented about the eligible amount of the claim which was allowed and considered, based on the information collected. Thus, no further defect was found from the record collected by the AO. Since, in this case, ld. AO has clearly incorporated the extract of enquiry conducted in the body of the assessment order and revenue did not pinpoint any error on the part of the Assessing Officer the order passed after due application of mind could not be subjected to proceeding u/s. 263 of the Act. In our considered view, A.O while framing the assessment had taken a possible view, and revenue did not demonstrate any error on the part of the AO. In fact, when the ld. AO had conducted the required enquiry and none of the conditions mentioned for revision of order as required by Explanation 2(a) of Section 263 of the Act has been fulfilled, the order passed by the AO could not be deemed to be erroneous so as to be prejudicial to the interests of the revenue - Appeal filed by the assessee is allowed.

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• 2024 (6) TMI 1221
  Validity of the notice u/s 153C - addition of undisclosed income - sum received by the assessee LLP are through shareholder/paper companies which have no substantial business and has been used as a conduit for bringing unaccounted money in the books in the form of capital investment - HELD THAT:- As no valid satisfaction note was recorded, the ld. Assessing Officer erred in assuming jurisdiction u/s 153C of the Act to make the assessment. Thus, we fail to find any infirmity in the finding of the ld. CIT(A) quashing the impugned assessment order holding them to be invalid, void ab initio and bad in law for want of proper satisfaction note. Since no incriminating material found during the course of search has been referred by the ld. Assessing Officer for making the impugned addition, which falls under the category of completed and unabated Assessment Year, no addition can be made in the hands of the assessee. See ABHISAR BUILDWELL P. LTD. [ 2023 (4) TMI 1056 - SUPREME COURT] Addition made by the ld. AO is on account of investment made in two LLPs (of which one is the assessee) by its partner M/s. Dayanidhi Commercial Ltd., in the preceding financial year. We also note th the ld. Assessing Officer on the one hand, himself states that assessee company received capital contribution of Rs. 3.72 Crores in the preceding year but went on to make addition of Rs. 10.72 Crores for the year under appeal which includes Rs. 7 Crores received by another LLP, namely, M/s. Suntok Plantations LLP, from its partner in preceding financial year. It clearly indicates that the impugned additions has been made without making any reference to the incriminating material found during the course of search. Decided in favour of assessee.

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• 2024 (6) TMI 1220
  Deduction u/s 80P(2)(a)(i) - deduction denied by applying the judgement of Citizen Co-operative Society Ltd. [ 2017 (8) TMI 536 - SUPREME COURT] observing that there was violation of principles of mutuality among members and the society cannot be granted deduction u/s 80P(2)(a)(i) - assessee society is having two accounts of members i.e. associated and nominal members, who are not identical to that of ordinary/resident members - HELD THAT:-Similar issue came for consideration before this Tribunal in the case of Kotekar Vyavasaya Seva Sahakara Sangha Niyamitha [ 2024 (6) TMI 1096 - ITAT BANGALORE] as held in respect of associate / nominal members, Hon ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. [ 2021 (1) TMI 488 - SUPREME COURT] has held that the expression Members is not defined in the Income-tax Act. Hence, it is necessary to construe the expression Members in section 80P(2)(a)(i) in the light of definition of that expression as contained in the concerned co-operative societies Act - Thus, the facts are to be examined in the light of principles laid down in Mavilayi Service Cooperative Bank Ltd. (surpa) - we remit this issue of deduction u/s 80P(2)(a)(i) of the Act to the files of Ld.AO to examine the same de novo in the light of the above judgment. Deduction u/s 80P(2)(d) - c laim denied as assessee earned interest on deposits from Co-operative banks and scheduled banks and it is to be assessed as income from other sources - Similar issue came for consideration before this Tribunal in the case of Kotekar Vyavasaya Seva Sahakara Sangha Niyamitha [ 2024 (6) TMI 1096 - ITAT BANGALORE] wherein directed the A.O. to verify whether interest / dividend is received by the assessee out of investments made with Cooperative Societies. If the assessee earns interest / dividend income out of investments with co-operative society, as observed in the case of Kerala State Co-operative Agricultural and Rural Development Bank Ltd [ 2023 (9) TMI 761 - SUPREME COURT] the same is entitled to deduction u/s 80P(2)(d). In view of the above order of the Tribunal, we remit the issue to the file of ld. AO for fresh consideration to decide the same in the light of above observations. Relief u/s 57 - If the interest earned by assessee from the banks is considered under the head Income from other sources , relief to be granted to the assessee u/s 57 of the Act in accordance with law. Accordingly, the issue is restored to the file of ld. AO for de-novo consideration with the above observations.

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• 2024 (6) TMI 1219
  Rejection of application for approval u/s 80G as time barred - process for charitable institutions and introduced provisional registration to facilitate newly formed trusts - scope of amendment - HELD THAT:- Institution which have provisional registration have to apply at-least six months prior to expiry of the provisional registration or within Six months of commencement of activities, whichever is earlier. In continuation of this when we read the sub clause iii of Proviso of section 80G(5), which we have already reproduced above, it is clear that the intention of parliament in putting the word or within six months of commencement of its activities, whichever is earlier is in the context of the newly formed Trust/institutions. For existing Trust/Institution, the time limit for applying for Regular Registration is within six months of expiry of Provisional registration if they are applying under sub clause (iii) of the Proviso to Section 80G(5) of the Act. This will be the harmonious interpretation. As decided by K P Varghase [ 1981 (9) TMI 1 - SUPREME COURT] the statutory provision shall be interpreted in such a way to avoid absurdity. In this case to avoid the absurdity as discussed by us in earlier paragraph, we are of the opinion that the words, within six months of commencement of its activities has to be interpreted that it applies for those trusts/institutions which have not started charitable activities at the time of obtaining Provisional registration, and not for those trust/institutions which have already started charitable activities before obtaining Provisional Registration. We derive the strength from the Speech of the Hon ble Finance Minister and the Memorandum of Finance Bill. 2020. Therefore, we hold that the Assessee Trust had applied for registration within the time allowed under the Act. Hence, the application of the assessee is valid and maintainable. Even otherwise, assessee had received provisional approval under section 80G(5) on 27.05.2021 and it was valid upto A.Y. 2023-24. The assessee had applied for registration under section 80G on 24.05.2023, which was before A.Y. 2023-24. Thus, assessee had applied for permanent registration under section 80G before the expiry of provisional approval. Therefore, the application of the assessee was not time barred. Assessee appeal allowed.

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• 2024 (6) TMI 1218
  Additions made u/s 56(2)(ix) - forfeiture of advance - Additions towards advance received by the appellants as forfeiture of advance in the course of negotiation for transfer of capital asset and same is forfeited for failed negotiation and thus, opined that advance received by the appellant is taxable u/s. 56(2)(ix) - HELD THAT:- If you go by the arguments of assessee, he claims that the negotiation was never failed and it is still alive and they are ready to transfer the properties in favour of the buyer. At the same time, from the arguments from both the parties, in light of statement recorded from Smt. V.K. Sasikala, we find that she has denied having entered into any kind of MoU and also payment of advance in cash. The facts are totally contradictory. We further came to know that the department has completed assessments of alleged buyer Smt. V.K. Sasikala and also made additions towards advance claimed to have paid by her as per MoU, for purchase of property as unexplained money. The Assessing Officer, has also made additions in the hands of the appellants towards additions as forfeiture of money. There is no concept of deemed forfeiture of advance as per sub clause (ix) of section 56(2) of the Act, because if you go by said provisions, it is very clear that sum can be assessed u/s. 56(2)(ix) of the Act, in a case where any sum of money received as advance or otherwise in the course of negotiation for transfer of a capital asset, if, (a) such sum of forfeited and (b) the negotiations do no result in transfer of said capital asset. If you go by the arguments of the Ld. Counsel for the assesse s, two conditions prescribed u/s. 56(2)(ix) of the Act are not satisfied. Further, they claimed that even now they are ready to transfer of property in favour of the buyer. From the above, it is undoubtedly clear that these appeals needs to be decided along with other connected appeals pending in the case of Smt. V.K. Sasikala and her associates at the first appellate authority level itself. Therefore, we are of the considered view, that these appeals cannot be independently decided, because the issues involved in these appeals are inextricably linked to additions made by the department in the hands of the Smt. V.K. Sasikala, the alleged buyer of the property and their associates. Thus, we set aside the orders of the ld. CIT(A) in all these cases and restore the issues to the file of the first appellate authority and direct the first appellate authority to decide these appeals along with other connected appeals pending before the first appellate authority in the group cases of Smt. V.K. Sasikala and others and decide the issues afresh in accordance with law - These appeals are set aside for denovo consideration by the ld. CIT(A) in accordance with law.

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• 2024 (6) TMI 1217
  Disallowance of interest paid on loan taken from Hyderabad Mutual Benefit Society (HMBS) - DR has submitted that no evidence was shown by the assessee to the lower authorities that the loan amount was utilized for the business purpose after taking loan from HMBS and to that effect, the C.A. of the assessee has given a Certificate which has been considered by the learned lower authorities - whether the amount has been received through banking channels or not? - HELD THAT:- From a perusal of the list of documents, we find the assessee had filed a certificate and ledger account certifying that the documents issued by HMBS were available with the Assessing Officer. However, the date of the document dt. 14.04.2017 which is subsequent to passing of the assessment order clearly shows that these documents are not available with the AO. Therefore, in our view, the submission that the document was available with the AO, is incorrect. We expect the learned advocate to be fair while filing the certificate of certifying documents and making the submissions before us. In our view, the application should have been filed by the assessee for admission of the additional documents / evidences before the lower authority as well as before us, before assessee choses to rely upon the documents / evidences. With respect to the letter issued by HMBS certifying that the interest instalments were paid by the assessee, we are of the opinion that the AO is required to verify whether the interest certificate issued by HMBS is correct or not and further, the Assessing Officer is required to verify whether the amount received by HMBS was from banking channels or not. AO is also required to verify whether the amount allegedly deposited by the common partner of M/s. G.B. Bakers, was claimed by the said partner as expenditure in the books of accounts of M/s. G.B. Bakers or not. Since the statements of bank account was not available before the AO/ CIT(A), therefore, there was no question of examination of his bank statement and give finding. Thus, we remit the matter to the file of ld.CIT(A) with a direction to the assessee to move appropriate application for admission of additional evidence before ld.CIT(A) in respect of documents now filed before us. Ground allowed for statistical purposes. CIT(A) power to enhance without providing an opportunity of being heard - CIT(A) disallowed expenditure on feeds and maintenance of livestock and the cost of purchase of livestock, treating them as capital expenditure - HELD THAT:- Admittedly, in the present case, CIT(A) has made addition under the separate head of income. Infact, while passing the order, the income directed to be determined by the ld.CIT(A) would be below the income assessed by the Assessing Officer in his assessment order. Thus, there is no enhancement of income and therefore, there was no occasion to follow the procedure as argued by the ld.AR. In fact, in the paragraphs below, we have adjudicated the issue whether the livestock is capital asset or not and we have held that the livestock is not a capital asset. As we have held that the livestock is not a capital asset, therefore, the expenditure claimed by the assessee cannot be capitalized. In view of the above, the ground no.4 raised by the assessee, is dismissed. Addition towards profit on sale of livestock - capital asset or not? - AO held that livestock is not a capital asset and the long term capital gain on sale of self breeded livestock is not covered by the provision of section 10 of the Act and therefore, the assessee is not entitled to claim any exemption of this in the income of the assessee - whether the livestock is a capital asset or not? - HELD THAT:- The nature of assets whether it is fixed asset like plant and machinery or stock-in-trade is required to be determined on the basis of the correct nature of the asset. Based on the correct nature of the asset, the taxability of the transaction is required to be determined. In the present case, the nature of the asset namely, livestock is not a fixed asset as mentioned hereinabove as it is so defined by the Income Tax Act and therefore, the finding of the ld.CIT(A) holding it to be a capital asset is contrary to law. As we have held that livestock is not a capital asset, the next argument decided by the ld.CIT(A) of his order that the buffalo calves born in the shed has zero cost of acquisition. In our view, as we have decided that livestock is not a capital asset and therefore, there is no purpose to discuss whether what will be the cost of acquisition of newly born buffalo calves. As mentioned hereinabove, the normal business principles as applicable for the purpose of determining the profit and loss of the business are required to be applied even for the purposes of computing the profit on sale of newly born buffalo calves and thereafter, the income earned used to be taxed as business income . Having held that livestock is not a capital asset and is only a stock-in-trade, the logical fallout of the above conclusion is that the income of the assessee is required to be determined by applying the principle as applicable for determining the profit and loss of the business and is to be taxed as business income. Further Assessee is not entitled to indexation on the cost of purchase of the livestock, as there is no provision for grant of indexation of the livestock, being not a capital asset. Therefore, we reverse the finding of the ld.CIT(A) whereby he had wrongly held that livestock is a capital asset, and the income of the assessee is to be determined on the basis of treating the livestock as capital asset and not as stock in trade. Computation of total income for amount being purchase of livestock charged to Profit and Loss Account - HELD THAT:- Since the contention of the assessee is that the income has already been taken into account while computing the income of the assessee in the computation, therefore, it cannot be charged again in the profit and loss account, on the face of it, is required to be accepted. However, in view of the finding given hereinabove that livestock is not a capital asset and the sale of it is required to be computed as business income, therefore, we deem it appropriate to remand this issue to the file of AO to verify the contention of the assessee and decide the issue afresh in the light of our finding given hereinabove. Short term capital gain - As sale and purchase of livestock is a business activity and is not subjected to determination of capital gain or loss under the head income from Capita Gain . Therefore, the gain arising out of the sale of livestock during the year under consideration is required to be treated as business income only and, accordingly, is required to be taxed.

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• 2024 (6) TMI 1216
  TP Adjustment - comparable selection - calculation of profit margin - grievance of the assessee is to consider the depreciation during calculation of fair net profit under TNMM by the TPO - HELD THAT:- The assessee is newly set-up company and yielding huge depreciation in respect of comparable M/s Stelco Limited and M/s Tata Steel BSL Limited who are incorporated in 1995 and 1983 respectively. In comparison of depreciation percentage of revenue was @1.09% for Stelco Limited and 11.19% for Tata Steel BSL Limited whereas the assessee has @16.92%. The assessee prayed to reject both the comparable as functionally different. We accordingly direct the TPO /AO to remove both the comparable during calculation of fairnet profit for ALP. Assessee has requested for acceptance of two comparable M/s Vallabh Steel Limited, for which rectification application u/s 154 has been filed before the TPO and is pending for disposal and M/s Uttam Galva Steels Ltd - We direct the TPO /AO to accept both the comparable M/s Vallabh Steel Limited and M/s Uttam Galva Steels Ltd after considering the function and activity of the two companies and direct to dispose the rectification petition filed U/s 154. The TPO/AO is directed to allow the fresh search in relation to comparable of the assessee. Remove the depreciation during the calculation of profit margin and requested for cash PLI in TNMM - In cash PLI the average of comparable 10.44% which is similar for assessee. The assessee stated that considering depreciation as a part of the total cost would not be appropriate for the purpose of benchmarking since the depreciation in the year under consideration was 16.92% of its revenue, vis-a-vis depreciation of 4.85% of seven comparable companies as taken by the TPO which in most cases as average depreciation as a percentage of revenue. The assessee has relied on the order of M/s Epcos Ferrites Ltd [ 2019 (3) TMI 554 - ITAT KOLKATA] We also relied on the same. In our considered view the depreciation should be removed for calculation of net profit margin and cash PLI is justified method. Accordingly, we remit back the matter to the file of TPO/AO for further calculation of TP adjustment by considering the direction of the Bench.

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• 2024 (6) TMI 1215
  Computation of book profit u/s 115JB - as per AO discrepancies in the deduction claimed by the assessee for brought forward loss or unabsorbed depreciation and recomputed the deduction, allowing a lesser amount - as per assessee calculation of book profits must relate to the entries made in the books for the relevant year and such calculation must start from the profit as shown in P L account. Thereafter, the amount of loss brought forward or unabsorbed deprecation, whichever is less, as per the books of account, must be considered - HELD THAT:- We are of the view that assessee s claim of deduction for computing book profit under section 115JB of the Act requires fresh verification in the light of the Chart furnished by the assessee, which has been reproduced in the order. Accordingly, the issue is restored back to the Assessing Officer for fresh adjudication after factually verifying assessee s claim. TDS u/s 195 - payments have been made to non-residents without deducting tax at source - Disallowance made u/s 40(a)(i) - as submitted by assessee repair and maintenance work was carried out outside India and no part of it was carried out in India - also in absence of Permanent Establishment (PE) of such non-resident companies in India, business profit cannot be taxed in India - HELD THAT:- AO has failed to demonstrate with cogent evidence that the make available condition enshrined in the concerned treaties are satisfied. In fact, learned first appellate authority has recorded a categorical factual finding that in course of rendition of service technical knowledge, know-how, skill, etc. has not been made available to the service recipient by the service provider. Thus, in absence of any contrary material brought on record by the Revenue, we concur with the view expressed by learned first appellate authority. Once the payments do not qualify as FTS under the respective treaty provisions, in terms with section 90(2) of the Act, treaty provisions being more beneficial would override the provisions contained in the domestic law. That being the legal position, in our view, the payments made to the residents of USA, UK, Australia, Canada and Singapore, being not chargeable to tax in India, section 195 is not applicable. Accordingly, we hold that the assessee was not required to deduct tax at source while making payment to residents of the aforesaid countries. Payments made to entities in UAE , admittedly, in India UAE treaty, there is no provision concerning taxability of FTS. Thus, in absence of any such provision, the payments made to the residents of UAE can either be taxed as business income or as other income in terms with Article 7 or 22, respectively. On reading of Article 7 it becomes clear that business profits can be taxed in the source country only if the resident of other country has a PE in the source country. In the facts of the present appeal, admittedly, none of the entities had any PE in India. Therefore, the payments made to them cannot be taxed in India as business profits. Even, they cannot be taxed as other income in India as Article 22 of India UAE treaty makes it clear that the other income can only be taxed in the country of residence. Thus, in our view, the payments made to the entities in UAE are not taxable in India as per the treaty provisions, hence, there is no requirement for deduction of tax at source on the payments made. Second category comprising of Netherlands, Spain and France . Admittedly, the definition of FTS in the treaty provisions with these countries are wider in scope and do not contain the make available clause. However, it requires to be examined whether the nature of services would fall within the category of technical consultancy or managerial services. As per the work process followed by the assessee, as discussed earlier, certain parts of helicopters are sent for routine repair/overhaul in terms with the guidelines of DGCA to keep the helicopters airworthy. The parts of helicopters were sent outside India for repair/overhaul and the repair/overhaul is carried out outside India. The repaired/overhauled parts are sent back to India to be fixed in the helicopters. In fact, learned Commissioner (Appeals) has given a categorical factual finding to the aforesaid effect. The Revenue has failed to bring any material on record to demonstrate that any non-resident technical personnel visited to render any technical service in India or the repair and maintenance work was carried out through any PE in India. When, the entire repair and maintenance of helicopter parts was carried out outside India and nothing was done in India by the non-resident payees, in our view, the payments made to the non-residents are not chargeable to tax in India. Therefore, there was no obligation on the assessee to withhold tax under section 195 - Decided in favour of assessee. Disallowance of advances written off - addition made as assessee failed to furnish adequate evidence in support of its claim - CIT(A) deleted addition - HELD THAT:- Commissioner (Appeals) after examining the facts and materials on record has recorded that the amount in dispute represents the advances given earlier by the assessee in its normal course of business for purchase of spare consumables, repairs and maintenance, freight clearing forwarding charges, lodging boarding charges, etc. The amount has become irrecoverable owing to nonfulfillment of certain conditions. Advances were pertaining to two to three years prior to assessment year 2011-12 and that no expenses were booked by the assessee. Revenue has not brought any contrary materials on record to disturb the aforesaid factual finding of learned Commissioner (Appeals). Therefore, we do not find any infirmity in the decision of learned first appellate authority. Ground raised is dismissed.

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• 2024 (6) TMI 1214
  Non disposal of appeal by CIT(A) on merits - non considering additional evidences -Addition of cash deposited in bank account - Addition invoking provisions of section either 68 or 69 or 69A - CIT(A) non considering evidence filed before him to prove sources of cash without giving any reason for doing so - HELD THAT:- Under the factual matrix of the present case, it is apparently discernible that the assessee has not discharged the onus cast upon him in explaining the huge cash amounts deposited in his bank accounts before the Ld AO. After the completion of assessment, it is stated by the assessee that the facts furnished before Ld AO were incorrect, thus the same should not be relied. Since the assessee himself had admitted that books of accounts are not maintained by him and no plausible explanation could be furnished before the Ld AO, the addition proposed by the AO under 69A cannot be faulted with. So, the contention of assesse that money if recorded in books of accounts can t be treated as unexplained money u/s 69A is devoid of merit on the facts of present case. Thus, the case laws relied upon on this aspect by the assessee cannot rescue or support the contention of the assessee. Non-admission of additional evidences by CIT(A) - The audit of books of accounts under the provisions of section 44AB for the relevant AY 2017-18, which was due to be completed by 30th September 2017 further extended to 31st October 2017 have been conducted and certified on 07.12.2021, i.e., after more than 4 years of time. It is the assertion of Ld AR that such audit report was furnished before the Ld CIT(A) as additional evidence but the same was not even discussed by him. On perusal of the order of Ld CIT(A), no whisper with respect to submission of audit report or its discussion was perceptible, even the exhaustive submission of the assessee before the Ld CIT(A), running into 31 pages. CIT(A) was supposed to discuss the issue on its merits considering the additional evidence, if admissible under the provisions of rule 46A of the IT Rules following the pre-requisite conditions of the said rule. it is copiously clear that Ld. CIT(A) was in error in dismissing the appeal of the assessee without discussing the written submission of the assessee and without considering the evidence filed before him. This shows that Ld. CIT(A) has not decided the issue by considering the response and the documents furnished before him by the assessee. CIT(A) has discussed about contention of the assessee and certain documents like purchase ledger, Kirana Sales ledger, balance sheet and part of bank statement uploaded by the assessee but there was no whisper in the order of Ld. CIT(A) regarding admission of additional evidence in the form of such documents, neither said documents have been remitted to the Ld. AO for his comments. Under such facts and circumstances, it is evident that the issue to be decided was not dealt with on merits by the Ld. CIT(A) in consideration of the evidence submitted by the assessee, without rejecting or accepting such evidence, also the further enquiries which are obligatory for the Ld. CIT(A) to be conducted or to direct the Ld. AO to conduct the same. CIT(A) has grossly erred in dismissing the appeal of the Assessee mainly discussing the noncompliant conduct of the assessee by summarily accepting the decision of Ld AO, without attending to the merits of the issue by dealing with the submissions of the assessee or by causing any further enquiries by himself or by directing the Ld AO to do so - Thus we direct the Ld. CIT(A) to pass denovo order as per law, in accordance with Sections 250 and 251 of I.T. Act Appeal of the assessee is partly allowed for statistical purpose.

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• 2024 (6) TMI 1213
  Condonation of delay filing appeal before ITAT - Delay of 7 years 104 days and 6 years 83 days in filing the captioned ITAs - HELD THAT:- In the present case, though the assessee is claiming that the delay in filing has occurred solely due to lapse of counsel but the fact is that the assessee has also contributed to a large extent in the process of delay. As can be seen from Ld. DR s arguments that the assessee has filed appeals of other two years i.e. AY 2011-12 and 2013-14 on 07.09.2022 and even at that stage, had not taken care to enquire and see the status of present appeals. This clearly shows lethargic attitude of assessee. The grossly negligent attitude of assessee is further discernible from one more fact. As can be seen from first pages of impugned orders reproduced earlier in Para No. 4(iv) of this order, the assessee received impugned orders on 20.01.2016 and 13.02.2017. Thus, when the assessee received later order on 13.02.2017, wasn t it a duty of assessee to enquire from his counsel about filing status of appeal against former order received on 20.01.2016? Had the assessee exercised any care at that stage itself, he would have not only rushed to file appeal against impugned order dated 20.01.2016 with a smaller delay but also could ensure timely filing of appeal against order dated 13.02.2017. However, the assessee did not exercise any such care even at stage and only continued with its negligent or lethargic attitude. Therefore, the assessee is also a contributor in causing delay in filing. DR is very much correct in submitting that the assessee does not deserve any sympathy in present cases. Needless to mention that there is a whopping delay of more than 7 or 6 years. Consequently, we are inclined to reject the assessee s condonation prayer and dismiss these appeals as being time-barred.

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• 2024 (6) TMI 1212
  Assessment u/s 153A - Income from undisclosed sources - incriminating material found during search or not? - addition made in respect of the entries credited by the assessee in the books of account in the form of sale of investments to two concerns/companies - HELD THAT:- Addition not based on any incriminating material found at the time of search. This issue is now well settled in favour of the assessee and against the revenue by the Hon ble Supreme Court in the case of Abhisar Buildwell Private Limited [ 2023 (4) TMI 1056 - SUPREME COURT] - Respectfully following the decision of USG BUILDWELL PVT. LTD [ 2021 (3) TMI 518 - ITAT DELHI] and in the light of the decision of the Hon ble Supreme Court (supra) we direct the AO to delete the impugned addition. Decided in favour of assessee.

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• 2024 (6) TMI 1211
  Disallowance of claim of depreciation on assets acquired by the assessee from a demerged company - assessee came into existence as a result of demerger - depreciation claimed on the written down value of assets as standing in the books of the erstwhile company on the date of demerger and acquisition by the assessee - DR submitted that in terms of explanation 10 to section 43(1) of the Act, the actual cost of such assets has to be determined after reducing the cost mat by the Central Government through Central Excise Exemption. HELD THAT:- The factual position in these appeals are identical to the facts involved in the case of Abhisar Buildwell Pvt. Ltd. [ 2019 (8) TMI 107 - DELHI HIGH COURT] as held that since excise refund is in the nature of revenue receipt forming part of profits and gains arising from the business, it cannot be reduced from the cost of plant machinery Therefore, we are of the considered opinion that assessee s claim of depreciation is allowable. Even, otherwise also, the disallowance of depreciation would only enhance the profit of the assessee, which is otherwise eligible for claim of deduction u/s 80IC of the Act. In fact, in case of Abhisar Buildwell Pvt. Ltd. (Supra), Hon ble jurisdictional High Court has expressed the aforesaid view. As FAA has directed the AO to allow assessee s claim of depreciation after verifying, if the assets have been brought in the books of the assessee on the closing WDV from the demerged company as on the effective date of demerger and depreciation has been claimed on such WDV year after year as per law. If it is found to be so, claim should be allowed. In our view, the Revenue should not have any grievance against such directions as it is in consonance with the directions of the Tribunal, while deciding the earlier year s appeals of the present assessee. Appeals of the Revenue are dismissed.

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• 2024 (6) TMI 1210
  Levy the penalty u/s 271B - assessee had failed to get his accounts audited - assessee contended that assessee is only a commission agent and earns only commission from selling products of Mother Dairy - CIT (A) was not convinced that the assessee was not required to get his books of account audited for the year under consideration and next assessment year assessee has got his accounts audited - HELD THAT:- Upon careful consideration, we find that assessee has made cogent submissions. Assessee s commission income was only Rs. 3,24,558/- and the deposits in the bank were sales on behalf of Mother Dairy. The assessee was under a reasonable/bonafide belief that he was not needed to get his accounts audited as transactions belonged to Mother Dairy. In these circumstances, we set aside the orders of the authorities below and delete the levy of penalty u/s 271B. Assessee appeal allowed.

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• 2024 (6) TMI 1209
  Assessment completed ex-parte order - Undisclosed cash deposits addition u/s 69A - HELD THAT:- The Bench observed that the assessee was really lethargic and unserious in pursuing his case in spite of providing various opportunities by the ld. CIT(A) and ld. AO as mentioned in his order. The assessee did not appear or filed any reply to the notices which were issued by the ld. AO during the assessment proceedings, finally the assessment completed ex-parte order. Assessee or his legal representative did not appear even appellate proceedings in spite of several notices, it is evident in the ld. CIT(A) order. Bench feels that the assessee has filed an affidavit stating that he could not advance his arguments/submissions to contest the case before the lower authorities and the ld. AR for the assessee also prayed to give one more opportunity to submit the evidences concerning the issue in question, with grounds so raised by the assessee, to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the ld. AO. Appeal of the assessee is allowed for statistical purposes.

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• 2024 (6) TMI 1208
  Calculation of capital gain on the sale of property against the claimed capital loss - recalculation of LCG on cost of acquisition in FY 2008-09 - assessee argued that the property was purchased in FY 2005-06 and that the AO erroneously considered the date of the sale deed (16.07.2008) as the date of purchase - HELD THAT:- AO had accepted the contentions of the assessee partly in the remand proceedings and the ld CIT(A) had relied on the same remand report and granted relief to the assessee. Once, relief is granted based on the remand report of the ld AO, revenue would be precluded from filing any further appeal before this Tribunal. This view of ours is further fortified by the decision of Smt B Jayalakshmi Vs. ACIT [ 2018 (8) TMI 208 - MADRAS HIGH COURT] . Hence, we do not find any infirmity in the order of the ld CIT(A) granting relief to the assessee qua the assessee under first issue. Addition u/s 68 - Unexplained Unsecured Loans - HELD THAT:- As submission of the appellant was verified and having gone through the additional submission as submitted by the appellant as well as examination of additional evidences, the contention of the assessee seems to be acceptable. Additional evidences which were not submitted during the course of assessment proceedings i.e. bank account no, confirmed copy of account, ITR, bank statement and bank statement of assessee, it has been found that there was opening credit balance and during the year under consideration, assessee had received unsecured loans through banking channels and amount was credited in the bank account - No infirmity in the order of the ld CIT(A) granting relief to the assessee. Revenue appeal dismissed.

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• 2024 (6) TMI 1207
  Addition u/s 69A - cash deposit made in the bank account during the demonetization period - HELD THAT:- The source of cash deposits is clearly explainable from the cash withdrawal made earlier which is reflected in the same bank account. The reason for holding huge cash of Rs. 15 lakhs for a period of 14 months had also been explained by the assessee as she had to pay the requisite fees to the medical college within three days from the date of intimation by the College management. The assessee had also explained the source of withdrawal of cash to be out of maturity proceeds of fixed deposits which is also evident from the bank statement reproduced. Hence, no hesitation in deleting the addition made on account of cash deposit u/s 69A in the instant case. Accordingly, grounds raised by the assessee on merits are hereby allowed.

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• 2024 (6) TMI 1206
  Addition u/s 69A r.w.s.115BBE - cash deposits treated as unexplained money - assessee could not establish source for cash deposits made during demonetization period into Axis Bank account - assessee could not establish accumulation of cash in hand - assessee himself claimed that he has received cash in demonetized currency after 09.11.2016 and up to 31.12.2016 contrary to Circular issued by RBI Government of India in respect of handling demonetized currency - assessee could not file any evidences like month wise sales/purchases for FYs 2015-16 2016- 17, stock register, and other details to fully substantiate his claim of the cash deposits from sale of materials only. HELD THAT:- The facts borne out from the record clearly indicate that the assessee is running a dhall mill and manufacturing various kinds of dhalls. The assessee procures various kinds of pulses from local market and manufacturing into various kinds of dhalls and sells to unregistered dealers in cash. From the details filed by the assessee, it is abundantly clear that there is no sudden increase in cash sales during demonetization period when compared to earlier Financial Years. Further, the assessee has filed cash book and other details to prove availability of cash in hand as on 08.11.2016 at Rs.71,76,208/-. In fact, the AO is not disputed the fact that the assessee has filed cash book and as per said cash book, cash in hand as on 08.11.2016 was at Rs.71,76,208/-. If you go by the nature of business of the assessee and sales trend, it is undoubtedly clear that the assessee s sales predominantly in cash, and thus, the cash in hand shown by the assessee as on 08.11.2016 appears to be genuine and bona fide. To this extent, in our considered view, the reasons given by the AO to reject explanation of the assessee for source for cash deposits into bank account is devoid of merits. As considering explanation of the assessee with regard to source for remaining cash deposits.assessee claims that he has collected cash in demonetized currency from customers even after 09.11.2016 and said cash receipts is not violation of Specified Bank Notes (Cessation of Liabilities) Act, 2017. As per Specified Bank Notes (Cessation of Liabilities) Act, 2017, no person shall accept or transact any SBNs from the appointed date. As per said Act, appointed date is 31.12.2016. From the above, it is very clear that up to appointed date, persons can transact in SBNs. However, the only requirement is, they should be able to establish source for said cash deposits. In the given facts of the present case, there is no dispute with regard to the fact that the assessee s sales predominantly in cash. It is also an undisputed fact that there is no abnormal variation in total sales, cash sales and cash deposits for two Financial Years. The assessee is also able to file various evidences, including month-wise purchase and sales and cash book to prove availability of cash in hand as on 08.11.2016. Therefore, we are of the considered view that going by the nature of business of the assessee and also details submitted for two Financial Years, the explanation offered by the assessee towards source for cash deposits into bank account during demonetization period, is bona fide and acceptable. The AO and the Ld.CIT(A) without considering the relevant submissions of the assessee simply made addition towards cash deposits u/s.69A r.w.s.115BBE - Assessee appeal allowed.

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• 2024 (6) TMI 1205
  Assessment order u/s. 144 passed ex parte - assessee submitted that the management of the company was not aware of the notices issued by both the authorities and the assessee company was also facing SARFAESI proceedings - HELD THAT:- AO passed assessment order u/s. 144 and before the CIT(Appeals) there was no representation by the assessee. Assessee has submitted that during the assessment proceedings the assessee was facing SARFAESI proceedings and that the notice issued by the CIT(Appeals) was not served on the assessee on its registered email-id with the department and hence could not be represented by the assessee before the lower authorities. CIT(Appeals) has passed ex parte order. In the interest of justice, we remit the issues in appeal to the file of AO for fresh consideration and decision as per law after giving proper opportunity of being heard to the assessee. Assessee is directed to communicate its correct email-id, mobile no. etc. to the department and produce all necessary evidence in support of its case and not seek unnecessary adjournment for early disposal of the case - Assessee s appeal is allowed for statistical purposes.

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• 2024 (6) TMI 1204
  Capital gain computation - Failure to refer valuation to the DVO as per section 50C - property in question was being developed as Rehabilitation of Slum Scheme by the Slum Redevelopment Authority which was not transferable by the assessee for a period of ten years - HELD THAT:- We are of the considered view that the issue is required to be remitted back to the AO to decide afresh after providing opportunity of being heard to the assessee who shall refer the matter to the DVO for valuation as per provisions contained under section 50C of the Act so as to compare the actual sale consideration with the stamp duty valuation as on date of the allotment letter (supra). Hence, the impugned order passed by the Ld. CIT(A) is set aside - Appeal filed by the assessee is allowed for statistical purposes.

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• 2024 (6) TMI 1203
  Disallowance of deduction u/s 10(23C)(iiiad) - AO noted that to verify those expenses, the assessee was given various opportunities but assessee did not provide necessary vouchers and details but noted that certain information was received from ITBA which was examined - HELD THAT:- Assessee was given various opportunities but he did not produce books of accounts and vouchers. AO further said that some information was received through ITBA but the AO did not specify the documents and information which have been given by the assessee. Interest of justice would be served if the matter is remitted to AO. AO is directed to decide the issue afresh after giving adequate opportunity of being heard to the assessee. Assessee is also directed to cooperate with AO in this regard. Appeal of the assessee is allowed for statistical purposes.

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• 2024 (6) TMI 1202
  Ex-parte order levying penalty u/s 270A - assessee submitted that the CIT (A) NFAC had not granted proper opportunity to the assessee to substantiate its case - HELD THAT:- From the perusal of the order of the CIT (A) NFAC we find learned CIT (A) NFAC had issued notice on 17.05.2022, however, there was no compliance. On the next date of hearing on 6.7.2023, the assessee filed an application for adjournment and the matter was adjourned 23.07.2023 and again there was also non-compliance for which the learned CIT (A) NFAC dismissed the appeal filed by the assessee for want of prosecution. As assessee submitted that given an opportunity in the interest of justice, the assessee is in a position to substantiate its case by producing the relevant details before the learned CIT (A) NFAC - For interest of justice we deem it proper to restore the issue to the file of the learned CIT (A) NFAC with a direction to grant one final opportunity to the assessee to substantiate its case by filing the necessary documents and decide the issue as per fact and law. Appeal filed by the assessee is allowed for statistical purposes

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• 2024 (6) TMI 1201
  Penalty u/s 271B - not getting books of accounts audited as per the provisions of section 44AB - Assessee submitted that the assessee has not written up the books of accounts till the date of finalization of audit within the due date specified u/s 44AB , accordingly, there was no possibility of getting accounted u/s 44AB HELD THAT:- The undisputed fact is this that the assessee did not file any return of income under the provisions of section 139(1) of the Act. The return was filed in response to the notice issued under section 148 of the Act on account of income escaping assessment. Thus, there remains no ambiguity that the books of accounts of the assessee were not written up before the due date of filing the return of income as specified u/s 139(1) of the Act. This fact can be verified from the penalty order framed by the AO under section 271B of the Act. Once it is established that the books of accounts were not written up within the due date of filing the return of income, the question of getting them audited to comply the provision of section 44AB of the Act, does not arise. As such the first default of the assessee on stand-alone basis is non-maintenance of books of account u/s 44AA of the Act which is complete offence. Therefore, such default i.e. non-maintenance of the books of accounts is subject to the penalty under the provisions of section 271A . As decided in BISAULI TRACTORS [ 2007 (5) TMI 181 - ALLAHABAD HIGH COURT] as separate penalty has been provided for non-maintenance of accounts, i.e., under section 271A and for not getting the accounts audited and not furnishing the audit report i.e., under section 271B - If a person has not maintained the accounts book or any accounts the question of its audit does not arise. In such an event the imposition of penalty under the provision contained in section 271A of the Act for the alleged non-compliance of section 44AA of the Act may arise but the provisions of section 44AB of the Act does not get violated in case where the accounts have not been maintained at all and, therefore, penal provisions of section 271B of the Act would not apply. Also see SURAJMAL PARSURAM TODI VERSUS COMMISSIONER OF INCOME-TAX [ 1996 (8) TMI 102 - GAUHATI HIGH COURT] Therefore, the assessee can get the immunity from the penalty specified u/s 271B of the Act.\ Contention of the Ld. DR that the assessee has written up the books of accounts is misplaced. Indeed, the assessee has written up books of account but on a later date. As such, the Ld. DR has not brought any concrete evidence justifying that the books of accounts of the assessee were written up before the due date of filing return of income as specified under section 139 of the Act and therefore the assessee has contravened the provisions of section 44AB. We hold that the assessee did not maintain the books of accounts within the due date specified u/s 139(1) of the Act, so as to comply the provisions of section 44AB of the Act. Accordingly, the assessee cannot be visited to the penalty for the offence committed by the assessee for not getting accounts audited. Decided in favour of assessee.

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• 2024 (6) TMI 1200
  Bogus LTCG - Denial of exemption u/s 10(38) - investment is to be treated as unreal - assessee has purchased 6,000 of equity shares of Sulabh Engineers Services Ltd. through the broker but as per AO Sulabh Engineers Services Ltd. is a paper entity and its stocks were manipulated by the experts for granting undue benefits to certain investors - As argued small profit is earned by the assessee THELD THAT:- Hon ble High Court in the case of Swati Bajaj [ 2022 (6) TMI 670 - CALCUTTA HIGH COURT] has examined a large number of companies, whose shares were manipulated by certain share brokers for granting undue benefit to the investors either in the shape of gain or loss whenever it is required to an investor. Therefore, the very credential of this company where investment was made is unreliable. The genuineness of an investee company is not dependent on the magnitude of profit earned by an investor. The assessee might have made investment when the shares of the company were already managed to a particular level and he sold his investment very early, but that small profit is earned by the assessee would not result into automatic genuineness of the transaction. It is an incorrect conception conceptualized by the assessee to segregate himself from the treatment of other such investors. It cannot be accepted as fact to distinguish the judgment of the Hon ble Jurisdictional High Court, simply for the reason that magnitude of profit is on the lower side to the assessee. The assessee s investment cannot become genuine because he earned a lesser amount of profit and at the cost of repetition, we again observe that magnitude of profit is not a decisive factor about genuineness of existence of an investee company, therefore, we do not find any error in the order of ld. CIT (Appeals), hence Assessee appeal is dismissed.

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• 2024 (6) TMI 1199
  Reopening of assessment u/s 147 - unexplained money under Section 69A - exemption u/s 10(38) wrongly claimed - Shares were not genuinely obtained, and the conduct of the assessee raised suspicions regarding the sale of shares at a higher rate - HLED THAT:- AO in the Assessment Order has given the finding in respect of the assessee s purchase and sale activities wherein it was stated that the sale consideration is in fact first paid by the assessee in cash who has trusted confidence in broker but the said fact appears to be not correct. AO has not stated out as to how the assessee is involved in price variation of the said scrip of Turbotech Engineering Limited during that period while selling the said shares/scrip. Besides this, the suspension of the said scrip came much after selling of the said scrip carried out by the assessee. Therefore, the assessee has rightly claimed exemption u/s 10(38). AO as well as the CIT (A) has not established that the assessee was involved in the price manipulation of the sales scrip and, therefore, this cannot be treated as unexplained money u/s 69A. Reopening of the assessee s case, the reopening was properly done with proper procedure followed by the AO and, therefore, ground in that respect is dismissed but on merit i.e. ground no.2 (actually 3) is allowed.

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• 2024 (6) TMI 1198
  Revision u/s 263 - assessee had not deducted tax at source on part of the salary and on account of non-deduction of tax on commission / brokerage payment - As per CIT AO did not made disallowance u/s 40(a)(ia) - HELD THAT:- We are in agreement with the contentions of assessee that once the recipient of income has offered the income on which no taxes were deducted by the assessee at source and paid due taxes thereon, in view of Second Proviso to Section 40(a)(ia) of the Act, the assessee is deemed to have deducted and paid taxes on such sum and the assessee is not an assessee in default . In the instant case, it has been argued before us that so far as salary and commission is concerned, the recipient has offered such income in their respective returns of income and have paid due taxes thereon. However, the Ld. PCIT has omitted to consider and analyze these arguments during the course of 263 proceedings. Accordingly, in so far as the issue of non-deduction of TDS on aforesaid two payments are concerned, we are of the considered view that the assessee was not could not be held to an assessee in default once the recipient of income has offered such income in their return of income and paid due taxes thereon. With respect to the disallowance of commission is concerned, the assessee has himself agreed for disallowance before Ld. PCIT during the course of 263 proceedings. Accordingly, in so far as TDS on commission the aforesaid amount is liable to be disallowed and added to the income of the assessee for the impugned assessment year. Accordingly, it is so directed that the aforesaid amount may be added to the income of the assessee during the impugned assessment year. Appeal of the assessee is allowed.

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• 2024 (6) TMI 1197
  Addition made u/s 68 - assessee could not furnish Income Tax Return of entity/ trust as capital contributors - HELD THAT:- During appellate proceedings, it transpired that notice u/s. 148 was issued to Trust and that entity filed its return of income - This return has been subjected to scrutiny assessment and an order has been passed u/s. 147 r.w.s. 144B accepting the returned income of that entity. AO has drawn conclusion that the deposits made by the assessee were out of funds received from M/s Shriram Ownership Trust for Rs. 34 Crores and from M/s Envestor Trust for Rs. 6.30 Crores. Therefore, the source of time deposit made by that assessee during that year stood explained. This being the case, there remain nothing with revenue to doubt the credit received by present assessee before us. Thus as rightly concluded in the impugned order, the assessee successfully proved the identity and creditworthiness of the investor and also the genuineness of the transactions. Decided against revenue.

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• 2024 (6) TMI 1196
  Rectification u/s. 154 - Denial of deduction 80P - HELD THAT:- In the instant case, the AO has not brought out single material on record to show that the deduction granted in the assessment order completed is a mistake apparent from the record. The rectification order does not provide for any reason. AO in the show cause notice had referred in the case of Citizen Cooperative society Ltd [ 2017 (8) TMI 536 - SUPREME COURT] where benefit of deduction u/s. 80P was denied since in the facts of that case assessee was dealing with non-members and had violated the principles of mutuality. AO has also referred to the judgment of case of SAURASHTRA KUTCH STOCK EXCHANGE LTD [ 2008 (9) TMI 11 - SUPREME COURT] for the limited proposition that a rectification order can be passed on the basis of subsequent judgment. It is interesting to note that the AO has not referred to the subsequent judgment in the case of Mavilayi Service Co-operative Bank Ltd. [ 2021 (1) TMI 488 - SUPREME COURT] which was already available when he had issued show cause notice to the assessee. The Hon ble Apex Court in Mavilayi Service Cooperative Bank Ltd. (supra) has clearly held that to the extent of dealing with non-members, proportionate deduction for the same can be denied. As mentioned earlier, in the instant case the AO while issuing show cause notice for rectification had not mentioned that the assessee had violated the principles of mutuality by dealing with nonmembers. Therefore, the issue is highly debatable and by no stretch of imagination can be termed as a mistake apparent on the record. Only an obvious and patent mistake which can be established not by a long drawn process of reasoning alone can be subjected to rectification proceedings u/s. 154 - In this case, there is nothing on record to suggest that the assessee had violated the principles of mutuality and has been dealing with non-members. Therefore, we are of the view that the issue raised in this appeal is not a mistake apparent on record which is amenable to rectification u/s. 154 - Assessee s appeal is allowed.

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• 2024 (6) TMI 1195
  Addition of share capital as unexplained cash credit u/s 68 - CIT (A) arrived at a conclusion that subscriber had simply submitted the documents but did not appear for examination on oath and creditworthiness could not be proved - CIT (A) also observed that investigation of the AO was deliberately resisted by the assessee and the share subscribing companies by resorting to approach of non-compliance, thus, sustained the additions so made by the AO and dismissed the appeal of the assessee. HELD THAT:- As none appeared to represent the assessee and substantiate the claim made by it. From the perusal of the authorities below, we observe that assessee has been contesting that it had made all the submissions in support of the transaction in which additions have been made which have not been considered. It is a fact on record that notices issued for fixing the hearing have been returned unserved which have also been issued on the latest address mentioned in the letter head which was used for filing the application for adjournment dated 06.10.2023. Nothing has been placed on record by the assessee, which has been claimed to be furnished before the authorities below in support of its transactions. In absence of such material, we do not find any reason to interfere with the observations and findings arrived at by the authorities below. Accordingly, grounds taken by the assessee are dismissed.

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• 2024 (6) TMI 1194
  Addition u/s 69 - unexplained investment - entire impugned action is based on the fact that agreement showed the individual name of assessee [name of director of the company figured in his individual capacity and not in the name of company] - HELD THAT:-We find that the learned CIT (A) is right in finding that it was by way of a bona fide mistake, which has also been corrected subsequently. CIT (A) has then adverted to the additions which could be made under Section 69 of the Act. The said section envisages a situation where the assessee has (i) made an investment (ii) which is not recorded in the books of account or (iii) the assessee offers no explanation about the nature/source of the investment or (iv) the explanation offered is not found to be satisfactory. In our view, none of these requirements can be said to be satisfied in this case as the explanation offered is plausible and is clearly borne out of material on record. We, therefore, find that no case for interference is made out. Revenue appeal stands dismissed.

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• 2024 (6) TMI 1193
  Ex-parte assessment u/s 144 - application seeking permission to submit the additional evidence - claim for exemption u/s 10(23C)(iiiad) - HELD THAT:- Given that the assessment proceedings have been completed u/s 144 and the assessee has come forward with an explanation regarding non-appearance before the AO and has also moved an application seeking permission to submit the additional evidence, it was incumbent on part of the CIT (A) to consider the said prayer of the assessee for submitting additional evidence. In our view, we find that the additional evidence so submitted is critical and germane for deciding the matter under consideration and given that the assessment has been completed u/s 144, the assessee deserve to be allowed an opportunity to furnish the necessary explanation and documentation in support of its claim for exemption u/s 10(23C)(iiiad) of the Act. Therefore, we hereby admit the additional evidence and the matter is remanded to the file of the CIT (A) to examine the matter a fresh after providing reasonable opportunity to the assessee. The contentions on merits are thus left open and not adjudicated upon - Appeal of the assessee is allowed for statistical purposes.

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• 2024 (6) TMI 1192
  Addition u/s 68 - unexplained deposits with regard to amount of share premium and increase in paid up capital - Identity, creditworthiness and genuiness of the creditors were not established by the assessee - CIT(A) deleted addition - HELD THAT:- The findings of the CIT (A) mentioned elsewhere do not have any supporting evidences. It appears that the first appellate authority has simply believed what has been stated before him without making any verification himself and putting the entire blame on the AO. The first error in the findings of the CIT (A) is that the share application money was received in F.Y. 2007-08. The bank statements show that the credits were made in the bank account in the month of August 2008. The contention of the Counsel that the cheques were received in the month of March-2008 and, therefore, the entries are reflected in F.Y.2007-08 is nothing but mockery of the accounting system as no bank in the entire country would validate clearing of check after 8 months. The validity of check is only for 3 months and, therefore, cheques of March-2008 could not have cleared in the month of August-2008. Assuming that fresh cheques were issued then the cheques must have been issued in F.Y. 2008-09 pertaining to year under consideration. When the bench asked the Counsel to give the balance sheet of year ending 31.03.2008 the Counsel showed his inability and sought adjournment. This issue needs fresh examination of facts and, therefore, we deem it fit to restore the impugned issues to the files of the AO. The assessee is directed to demonstrate that the impugned share application money was received in F.Y. 2007-08 and is duly reflected in the balance sheet as on 31.03.2008. The assessee is further directed to furnish all necessary demonstrative evidences to explain the credit of Rs. 1 crore being fresh application money received during the year alongwith documents relating to share application money of Rs. 1.50 crore. The AO is directed to examine the same and decide the issue afresh after affording a reasonable and sufficient opportunity of being heard to the assessee. Appeal of the revenue is allowed for statistical purpose.

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• 2024 (6) TMI 1191
  Ex-parte order passed by CIT(A) - violation of principle of natural justice - scope of Procedure in appeal - not giving the assessee proper and reasonable opportunity of being heard - addition made as assessee has not filed any submissions or information or documents on various opportunities given in the course of hearing - HELD THAT:- Keeping in mind the provision of sections 250 and 251 of the Act referred as above, it is incumbent upon the Ld. CIT (A) to pass a speaking order on the merits of the case by examining, verifying and analyzing the material on record. Since there are no meritorious finding given by the Ld. CIT (A) on the submissions made by the assessee and also considering the grounds raised by the assessee where the Ld. CIT (A) has passed an ex parte order without giving opportunity of being heard, we find it fit to remit the matter back to the file of the Ld. CIT (A) for his objective and meritorious observations and findings on the submissions made by the assessee. Needless to say the assessee be given reasonable opportunity of being heard and the assessee shall also be cooperating for the effective disposal of the appeal and will be at liberty to make further submissions as deem fit. Appeal of assessee is allowed for statistical purpose.

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• Customs

• 2024 (6) TMI 1190
  Refund claim rejected on the ground of being time barred - Relevant date for computation of period of limitation for filing refund claim - date of service of finalization of provisional assessment - section 27 (1B) (c) of the Customs Act, 1962 - HELD THAT:- Once the provisional assessment is done and the assessee is entitled to the refund claim, then he has to make application within a period of one year under section 27 read with section 27(1B) of the Act. The assessee made application on 19.08.2016 with a prayer for finalizing of custom duty by way of final assessment which means that till that point of time, the assessee was not aware about the final assessment - Merely because the Custom Department has uploaded the final assessment orders on portal is not sufficient compliance of intimation to the assesee as it is a condition sine quanon to file the refund claim within one year as per section 27 (1B)(c) of the Act from the date of finalization provided such order of assessment is communicated to the assessee. Therefore, the Tribunal has rightly taken into consideration the various documents intimating the respondent assessee about the finalization of provisional assessment communicated by the respondent. There are no infirmity in the impugned order of the Tribunal and no question of law much less any substantial question of law arises - appeal dismissed.

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• 2024 (6) TMI 1189
  Refund of SAD - imported goods were Betel Nut Industrial Grade (not fit for human consumption), whereas goods sold in domestic market were Supari (edible) - correlation between the imported goods Betel Nut Industrial Grade and goods sold in domestic market as Supari - benefit of N/N. 102/2007- Customs dated 14.09.2007 - HELD THAT:- Considering the facts of the case which is not in dispute that there is no distinction between the areca nuts betel nuts as certified under CTH 0802090 of HSN at the time of importation as edible goods which are not suitable for immediate consumption. It is also the case of the respondent-assessee that such imported goods were required further processing to make them edible. The Commissioner (Appeals) and the Tribunal has also referred to and relied upon the information available on DGFT website wherein also areca nut and supari has been considered as the same product in the minutes of ALC meeting No. 02/2007 held on 20.4.2006. There is no infirmity in the impugned order passed by the Tribunal while upholding the order passed by the Commissioner (Appeals), the appeal is therefore being devoid of any merits do not give rise to any questions of law - Appeal dismissed.

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• 2024 (6) TMI 1188
  Refund claim - demand of cost recovery charges set aside - whether the Tribunal could have confirmed the order passed by the Commissioner (Appeals) granting the refund pursuant to the order passed by the Tribunal on merits by which the demand of cost recovery charges was set aside? - HELD THAT:- The appellate-revenue is bound by the Circular dated 22.2.2001 issued by the Central Board of Excise Customs which has repeatedly clarified that if any refund arises out of any order of adjudication passed by the Commissioner or CESTAT, unless the stay order is obtained, refund must be granted after three months from the date of the order. The Tribunal has also referred to and relied upon CBEC Circular No. 572/9/2001-CX dated 22.2.2001 to reject the appeal filed by the revenue challenging the order passed by the Commissioner granting the refund to the respondent. The appeal is devoid of any merits that no questions of law much less any substantial questions of law arises from the impugned order of the Tribunal. Appeal dismissed.

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• 2024 (6) TMI 1187
  Maintainability of appeal - monetary limit involved in the appeal - Assessment made by the department on enhanced value set aside - rejection of declared value - non-speaking order - violation of principles of natural justice - HELD THAT:- For reduction of litigation, the CBIC has issued circulars/instructions from time to time instructing the department not to file the appeal and in some cases, if it has already filed, not to press the appeal before higher authorities i.e. the CESTAT, the High Courts and the Supreme Court as the case may be, where the duty amount involved is below the minimum threshold limits respectively prescribed in such circulars. In the present cases, we are concerned with the CBIC s latest circular dated 02.11.2023, wherein it has been specifically prescribed that no appeal shall be filed before the CESTAT below the monetary limit of Rs.50 lakhs and if already filed, will have to be withdrawn. In so far as, the CESTAT is concerned the monetary limit prescribed is Rs.50 lakhs. Para 3 of the said circular prescribes that in respect of the pending cases before the CESTAT, the High Courts and the Supreme Court which are below the monetary limits, process of withdrawal of the appeal would be undertaken by the department. It is pertinent to mention here that the amount of duty involved in the appeal is below of the threshold limit prescribed in circular dated 02.11.2023 issued by the CBIC wherein it is provided that if the duty amount involved is less than Rs.50 lakhs, then no appeal shall be filed before the CESTAT, and if already filed, the same will be withdrawn by the department. Reference made to the decision of the Bombay High Court in the case of COMMISSIONER OF CUSTOMS, CENTRAL EXCISE, SERVICE TAX, NASHIK II COMMISSIONERATE, VERSUS M/S. SUVARNA SANJIVANI SUGARCANE [ 2017 (6) TMI 858 - BOMBAY HIGH COURT ], wherein the Hon ble High Court has observed There is no issue that the appeals filed by the department in the year 2 012 having monitory limits of below 15/20 lakhs. The above provisions and instructions/circulars therefore covers the case of disposal of these appeals on the same ground. The learned Counsel appearing for the respondents has no objection for such disposal. The present appeal filed by the department is not maintainable in view of the instructions dated 02.11.2023 issued by the Board and consequently dismissed - appeal dismissed.

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• 2024 (6) TMI 1186
  Maintainability of appeal - monetary limit involved in the appeal as per CBIC circular dated 02.11.2023 - Re-assessment of goods at enhanced value set aside - restoration of self-assessment at the declared value - evidence to prove that any additional consideration was paid to the exporters or not - onus on the department to establish that the declared value - HELD THAT:- It is pertinent to mention here that the amount of duty involved in each of the appeal is below of the threshold limit prescribed in circular dated 02.11.2023 issued by the CBIC wherein it is provided that if the duty amount involved is less than Rs.50 lakhs, then no appeal shall be filed before the CESTAT, and if already filed, the same will be withdrawn by the department. Reference made to the decision of the Bombay High Court in the case of COMMISSIONER OF CUSTOMS, CENTRAL EXCISE, SERVICE TAX, NASHIK II COMMISSIONERATE, VERSUS M/S. SUVARNA SANJIVANI SUGARCANE [ 2017 (6) TMI 858 - BOMBAY HIGH COURT ], wherein the Hon ble High Court has observed There is no issue that the appeals filed by the department in the year 2012 having monitory limits of below 15/20 lakhs. The above provisions and instructions/circulars therefore covers the case of disposal of these appeals on the same ground. The learned Counsel appearing for the respondents has no objection for such disposal. The present appeals filed by the department are not maintainable in view of the instructions dated 02.11.2023 issued by the Board - All 7appeals dismissed.

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• Service Tax

• 2024 (6) TMI 1185
  Violation of principles of natural justice - SCN issued without conducting investigation - Entitlement to concessional rate of service tax under the Composition Scheme - non-inclusion of free materials supplied by service recipients in taxable value - non-filing of service tax returns for the periods 2007-08 and 2008-09 - extended period of limitation - penalty. Non-inclusion of free materials supplied by service recipients in taxable value - SCN issued without conducting investigation - HELD THAT:- This issue has now been settled by the Hon ble Apex Court in the case of CST vs. Bhayana Builders (P) Ltd [ 2018 (2) TMI 1325 - SUPREME COURT] wherein the Hon ble Apex Court while referring the valuation provision under the Finance Act, 1994, and also referring the provisions of such service , has held though it took care of the value of goods and materials supplied by the service provider/assessee by including value of such goods and materials for the purpose of arriving at gross amount charged, it did not deal with any eventuality whereby value of goods and material supplied or provided by the service recipient were also to be included in arriving at gross amount charged. Further, it is noted that in this case, the entire demand has been raised and confirmed merely by relying upon Form 26AS, Balance Sheet and ST-3 Returns, which is not permitted under law in view of the various decisions relied upon by the appellant - reference made to the decision in the case of Kush Constructions [ 2019 (5) TMI 1248 - CESTAT ALLAHABAD] , wherein the Division Bench of the Tribunal has held Revenue cannot raise the demand on the basis of such difference without examining the reasons for said difference and without establishing that the entire amount received by the appellant as reflected in said returns in the Form 26AS being consideration for services provided and without examining whether the difference was because of any exemption or abatement, since it is not legal to presume that the entire differential amount was on account of consideration for providing services. All the documents furnished by the appellant in this regard have not been considered by the Adjudicating Authority, hence, the impugned finding in this regard is not sustainable in law. Extended period of limitation - HELD THAT:- In the facts and circumstances of the present case, extended period cannot be invoked as the appellant has been registered with the service tax and has been paying service tax and filing returns which has been acknowledged by the Adjudicating Authority in the impugned order. Further, in the case of Infinity Infotech Parks Ltd vs. UOI Ors [ 2014 (12) TMI 36 - CALCUTTA HIGH COURT] , it has been held that when the extended period of limitation is not invokable, the demand cannot be confirmed for the normal period of limitation for some of the same transactions. Though, there is the amendment in Section 73 made by the Finance Act, 2013 w.e.f. 10.05.2013 by inserting sub-section (2A); but period of dispute in the present case is prior to that. Therefore, this amendment will not be applicable in the present case. Penalty - HELD THAT:- When the extended period is not invokable, the penalty under Section 78 of the Act is also not leviable since ingredients for invoking extended period and levying penalty under Section 78 are same. The impugned order is not sustainable in law and therefore set aside - appeal allowed.

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• 2024 (6) TMI 1184
  Levy of service tax - Business Auxiliary services - transportation of their raw materials/finished products in and out of their factory premises - reverse charge mechanism - Rule 2(1)(d)(B) r/w N/N. 30/2012 ST dated 20.06.2012 - HELD THAT:- In this case, it is the appellant who has hired the vehicles from vehicle owners and at the most, it could be a service provided by such vehicle owners to the Appellant for which there should have been flow of consideration by the appellant to them. That apart, there are no agreement or contract in this regard between the appellant and such vehicle owners for providing any service - Undeniably, it was the responsibility of the appellant to provide GTA service to CCCL by virtue of the existing contract between them. It is a fact borne on record that in respect hired vehicles, CCCL were not paying the freight directly to the other transporters because, they were under no obligation to pay them. Hence, the assumption that the amount retained by the appellant was towards the promotion of transport business of the other transporters is without any basis. This is also because, the goods transport service is provided to CCCL by these transporters but the payment for the same is by the appellant. Hence, to allege transport business the Revenue should have enough evidence to indicate that such transporters were in the transport business, they had an understanding with the appellant seeking promotion and that the same was for a consideration. There is no agreement/contract and there is also no flow of consideration from the transporters / vehicle owners to the appellant for having rendered service of BAS and hence, the allegation of provision of BAS lacks merit. The impugned order is set aside - Appeal allowed.

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• 2024 (6) TMI 1183
  Refund of input service credit under Rule 5 of CENVAT Credit Rules, 2004 - export of services or not - services provided by the appellant herein to the foreign entity - periods from April 2010 to June 2010 and January 2010 to March 2010 - HELD THAT:- The Appellant is not to market the product of the foreign supplier to Indian entity but rather to identify suppliers within India; supplier has been defined in the same agreement to be companies entrusted by the Agent for the manufacture of Merchandise . It is hence clear that the lower authorities have seriously erred in misunderstanding the facts and thereby deny the CENVAT credit availed by the appellant as inadmissible. This Bench had an occasion to consider an almost similar issue recently, in the case of MANALI PETROCHEMICALS LTD. PLANT I VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI [ 2024 (6) TMI 848 - CESTAT CHENNAI] where it was held that It is clear from the above that the role of the appellant is to render service to the Japan based service receiver, in delivering the product manufactured outside India, to the ultimate consumer in India namely Whirlpool Ltd. It is apt to refer to the CBEC Circular No. 111/05/2009 ST dated 24.02.2009, wherein the board has clarified the phrase used outside India to mean that the benefit of the service should occur outside India, where it was held that what is accruing outside India is the benefit in terms of promotion of business of a foreign company. Similar would be the treatment for other Category III [Rule 3(1)(iii)] services as well. The action of the authorities in denying the CENVAT credit is unsustainable and is set aside - appeal allowed.

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• 2024 (6) TMI 1182
  Levy of service tax - Renting of Immovable Property Services - providing services / facilities while discharging sovereign functions - HELD THAT:- The Tribunal in the appellant s own case had occasion to consider the similar issue. After taking note of the judgement passed by the Hon ble High Court in the case of Cuddalore Municipality Vs. Joint Commissioner of GST and Central Excise, Tiruchirappalli [ 2021 (4) TMI 500 - MADRAS HIGH COURT ] and St. Thomas Mount Cum Pallavaram Cantonment Board Vs. Additional Commissioner of GST and Central Excise, Chennai [ 2023 (4) TMI 1024 - MADRAS HIGH COURT ] wherein the Tribunal remanded the matter to the adjudicating authority to reconsider the issue afresh. After giving the appellant an opportunity to put forward evidence and also for personal hearing. The matter requires to be remanded to the adjudicating authority who is directed to consider the issue afresh after giving an opportunity to the appellant to furnish evidence and for personal hearing - appeals are allowed by way of remand.

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• 2024 (6) TMI 1181
  Classification of services - Construction of Residential Complex Service or not - providing construction services under different projects under works contract - construction under each of the projects were of the nature of indivisible composite contracts involving both supply of materials as well as construction activity - HELD THAT:- From the perusal of the clauses extracted in the original order, clear that it was for the developer to hire services of architects, engineers, contractors, et cetera, for the purposes of construction, so as to develop the property into one or more residential / multistoried buildings. It is further clear that in terms of the construction agreement, it was for the developer to construct the complex using its own men material. In respect of Wanlock Woods project, the appellant is fastened with a liability on the ground of not recognising the said construction as under CRCS, but as individual units. This very issue has been considered by the coordinate Bench, in the case of COMMISSIONER VERSUS MACRO MARVEL PROJECTS LTD. [ 2009 (7) TMI 1222 - SC ORDER] as contended by the learned Advocate, which has also been affirmed by the Hon ble Supreme Court. In view of the above position of law, the demand under CRCS as proposed is not sustainable and accordingly, this ground of the appeal succeeds. There is no dispute that there was supply of materials as well as the service of construction and hence, the same could only be taxed under WCS. However, the proposal in the show cause notice is clearly under CRCS and hence, confirmation of the demand under WCS is not in accordance with the decision of the Supreme Court in COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] . It is held in this case that there could be no levy of service tax under works contract service prior to 01.06.2007. In so far as the period post 01.06.2007, the proposal in the Show Cause Notice is to levy service tax under CRCS and not WCS, which demand is also incorrect in the light of the decision of Larsen Toubro. The impugned order is set aside - Appeal allowed.

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• 2024 (6) TMI 1180
  Entitlement to reduced penalty @ 25% under the second proviso to Section 78(1) of the Finance Act 1994 - appellant had not obtained service tax registration nor paid the applicable service tax - Alternative request for grant of benefit of the first proviso i.e. 50%. Whether the penalty of 25% can be extended in respect of total demand finally confirmed in terms of Commissioner (Appeals) or otherwise? - HELD THAT:- The provisions are quite clear. As per the second proviso to Section 78(1) there is a provision that where the service tax and interest is paid within a period of 30 days of the date of receipt of the Order of the Central Excise Officer determining the amount of service tax under sub-section (2) of Section 73, the penalty would be @ 25%. In this case, obviously, the appellants have not paid the determined amount and the interest thereon within the 30 days of the receipt of the Order-in-Original dated 31.05.2022 - there are no infirmity in the Order of the Commissioner (Appeals) in holding that 25% penalty is not applicable in the facts of the case. Alternative request for grant of benefit of the first proviso i.e. 50% - HELD THAT:- The first proviso is an exception to Section 78(1) where there is provision for imposing mandatory penalty of 100%. Therefore, if the appellants are fulfilling the conditions indicated in the said proviso then instead of 100% they will be liable to pay penalty equal to 50% of the determined service tax - para 9 of impugned order, the Commissioner (Appeals) has made a detailed observation of various records, which were maintained by the appellant during the material time and the veracity of the documents has not been doubted by the Commissioner (Appeals) nor the Revenue has come in appeal against the observations of the Commissioner (Appeals). Therefore, it is but obvious that they were maintaining certain records and details of such transactions in respect of which the demand has been made in the show cause notice. Therefore, to that extent they are eligible for the benefit of first proviso for the period starting from 08.04.2011 upto 14.05.2015 and therefore the amount of service tax finally determined/confirmed in terms of Commissioner (Appeals) order will be liable to penalty @ 50% during this period and for the period beyond that they will be liable to penalty at the rate of 100%. The appellants can work out the total liability of penalty as observed above and submit the same to the jurisdictional authority along with the proof that they have discharged the determined service tax along with the penalty applicable thereon - appeal disposed off.

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• Central Excise

• 2024 (6) TMI 1179
  Recovery of Modvat/Cenvat Credit availed along with interest and penalty - receiving certain raw materials based on purchase invoices, without actually physically receiving any material and availed Cenvat credit - HELD THAT:- The petitioners have paid the amount of Rs. 12,90,000/- during the course of search. The said amount was adjusted towards the outstanding demand by the adjudicating authority while passing the Order-in-Original dated 26.8.2004. Petition dismissed.

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• 2024 (6) TMI 1178
  Process amounting to manufacture or not - appellants had been receiving inputs like aluminum ingots from M/s Auto Ignition Ltd., Rudrapur, Uttrakhand and job-work challans for making aluminum dye-cast components - area-based exemption contained under N/N. 32/99 availed - HELD THAT:- Tribunal has dealt with a case involving identical facts in the case of ALUMECO INDIA EXTRUSION LTD. VERSUS COMMR. OF C. EX., HYDERABAD-I [ 2009 (5) TMI 402 - CESTAT, BANGALORE] observed that It is his finding that the definition of manufacture includes everything, which undergoes a change. We find that the learned Adjudicating Authority has misdirected himself on this ground. The process undertaken by the appellants on the ingots supplied by the principal job-worker does not amount to manufacture; the facility available to the principal manufacturer or the job-worker cannot be denied for procedural infractions, more so, when the Department was put to notice by way of seeking permission; it is not the fault of the principal manufacturer or the job-worker if there was delay in giving or denying the permission. It is opined that if the process undertaken by the job-worker/ appellant amounted to manufacture, duty requires to be demanded from the principal manufacturer and in no case, duty can be demanded from the job-worker. Appeal allowed.

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• 2024 (6) TMI 1177
  Classification of goods - aerated drinks and fruit pulp or fruit juice based drinks under different brand names - to be classified under Tariff Heading 2202 9020 or under Chapter Sub-heading 22021020 - period April 2011 to August 2012 - HELD THAT:- The issue of classification of the impugned product is no more res integra as the same issue has been settled in favour of the Appellant in Appellant s own case M/S. HINDUSTAN COCA-COLA BEVERAGES P LTD VERSUS COMMISSIONER OF CGST, BHIWANDI [ 2022 (11) TMI 595 - CESTAT MUMBAI ]. The order relied on the decision by a Larger Bench of this Tribunal in M/S BRINDAVAN BEVERAGES PRIVATE LIMITED, KRANTI KUMAR CHANDRAKAR, M/S PEPSICO INDIA HOLDINGS PRIVATE LIMITED VERSUS COMMISSIONER CUSTOMS, CENTRAL EXCISE AND SERVICE TAX, HAPUR AND BAREILLY [ 2019 (10) TMI 762 - CESTAT ALLAHABAD (LB) ] which held that the product Minute Maid Nimbu Fresh is classifiable under Tariff Item 2202 90 20 of the Central Excise Tariff Schedule under the category of fruit pulp or fruit juice based drinks . The Larger Bench did not agree with the decision in the matter of HINDUSTAN COCA COLA BEVERAGES PVT LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE-I [ 2014 (9) TMI 659 - CESTAT MUMBAI ], on which reliance has been placed in the impugned order by the Commissioner (Appeals). The Larger Bench held The product Minute Maid Nimbu Fresh (hereinafter referred to as MMNF) manufactured by Brindavan Beverages Private Limited, and 7UP Nimbooz Masala Soda or 7UP Nimbooz manufactured by PepsiCo India Holdings Private Limited are classifiable under Tariff Item 2202 90 20 of the Central Excise Tariff Schedule under the category of fruit pulp or fruit juice based drink . The appeal filed by the Appellant is allowed.

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• 2024 (6) TMI 1176
  CENVAT Credit on inputs - Process amounting to manufacture or not - embossing the logo of M/s. Hyundai on caseskin which was obtained by cutting the coil - HELD THAT:- When the final product is stated as dutiable and duty is accordingly paid and collected by the revenue by treating the activity as manufacturing activity, the CENVAT credit is always available and hence, there is no question of denial or reversal of the same in the case on hand. Moreover, it is not disputed by the revenue that the appellant had paid duty, but they only are denying the CENVAT credit, which is not permissible in view of the ratio laid down by the High courts in THE COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS AJINKYA ENTERPRISES [ 2012 (7) TMI 141 - BOMBAY HIGH COURT] . The denial as made in the impounded order is contrary to the settled position of law, which therefore requires to be set aside - Appeal allowed. Levy of penalty under Rule 15A of the CENVAT Credit Rules, 2004 - HELD THAT:- The penalty is fastened based only on statement, without there being any independent evidence in support - the impugned order set aside. Appeal allowed.

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• 2024 (6) TMI 1175
  Valuation - inclusion of cost of tools from the buyer-customers by raising excise invoices, in the assessable value - benefit of N/N. 67/95 CE dated 16.03.1995 - Double Taxation or not - extended period of limitation - suppression of facts or not. Inclusion of cost of tools from the buyer-customers by raising excise invoices, in the assessable value - HELD THAT:- The issue as to whether the cost of tools supplied by the buyer free of charge back to the appellant, should be included as an amortised cost, when the said tools are used in the appellants factory for manufacture of components for the said buyers, in terms of Rule 6 of CVR 2000 or not, has been examined by this Tribunal in M/s Best Cast IT Ltd [ 2023 (6) TMI 99 - CESTAT CHENNAI ] after considering the judgements of COMMISSIONER OF CENTRAL EXCISE, MUMBAI-I VERSUS M/S MEGA RUBBER TECHNOLOGIES PVT. LTD. [ 2016 (1) TMI 157 - CESTAT MUMBAI ] and the Larger Bench decision in Mutual Industries Ltd Vs Commissioner of Central Excise, Mumbai [ 2000 (3) TMI 74 - CEGAT, COURT NO. I, NEW DELHI ], where it was held that had the mould not been supplied by the customer, appellant could not have agreed to the price of the finished goods at the price as is evidenced by the contract entered into between them. So, the price of the finished goods fixed in the contract between the parties can safely be taken as not the sole consideration for the sale of the finished product. The fact whether the tools were manufactured in the appellants factory or was outsourced by the appellant from another company would not change the legal position as per CVR 2000 so long as they were paid for by the buyer-customer - The tools manufactured and used for production of components at the cost of the buyer and against purchase orders, needs to be included in the cost of production and amortized for payment of duty on the final products manufactured by the appellant using such tools. Double taxation - HELD THAT:- Double taxation with reference to central excise duties on goods means levying central excise taxes twice on the very same excisable product, which is not the case here - Had they purchased the tools from the market its price would have automatically entered the price of the final product sold by them. Hence the question of double taxation does not arise. Benefit of N/N. 67/95 CE dated 16.03.1995 - HELD THAT:- A Co-ordinate Bench of this Tribunal in Ashok Iron Works [ 2004 (2) TMI 482 - CESTAT, BANGALORE ] has held at para 6 that the benefit of Notification No.67/95 CE was available to jigs, fixtures, patterns and tooling irrespective of the ownership of these goods - The excise duty element would hence not form a part of the amortised value of the tools and it needs to be re-worked out suitably. However, it is noted that the eligibility for exemption from payment of duty for the tools does not detract from amortising the cost of the tool charged to the buyer, less the duty element. Extended period of limitation - HELD THAT:- The requirement of law is that mere failure or negligence in adopting the correct value and making the correct payment of duty cannot be considered as suppression of fact with intention to evade payment of duty, especially when the issue was complex. Something more is required to show that there was a positive intention to evade payment of duty - there are no grounds to invoke the extended period and the demand for the larger period must fail. The matter remanded back to the Original Authority for re-quantification of the duty demand for the normal period - appeal allowed by way of remand.

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• 2024 (6) TMI 1174
  Rejection of refund claim - unjust enrichment - rejection by holding that in respect of depot sales, the price indicated in the invoices were the transaction value and hit by the bar of unjust enrichment - HELD THAT:- The first appellate authority has observed that for the year 2008 09, as against claim of Rs.14,38,174/- the original authority had sanctioned Rs.86,129/- and for the other year a refund of Rs.6,96,147/- was allowed and the rejection of the balance claim was pertaining to the excess duty paid in the respect of depot sales. It is the case of the Revenue that though Rule 7 of CER, 2002 enabled a taxpayer to claim refund of any amount paid in excess during provisional assessment, but however, the same is not absolute but subject to the principles of unjust enrichment. The impugned order is set aside - appeal allowed.

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• 2024 (6) TMI 1173
  100% EOU - demand of Education cess and Secondary and Higher Education Cess on the countervailing duty and basic customs duty without paying the same on the excise duty - period involved in the present dispute is from November 2011 to May 2012 - HELD THAT:- Having considered the decision of larger bench of the Tribunal in the case of KUMAR ARCH TECH PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II [ 2013 (4) TMI 482 - CESTAT NEW DELHI - LB ] has held that the demand confirmed in the against the taxpayer therein was not called for and accordingly set aside the demand therein. The impugned order set aside - appeal allowed.

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• CST, VAT & Sales Tax

• 2024 (6) TMI 1172
  Levy of purchase tax under Section 12 of the Tamil Nadu Value Added Tax Act, 2006 - validity of assessment order - HELD THAT:- A reading of the order dated 09.11.2022, rejecting the request of the petitioner for revision of the assessment made on 28.09.2022 reveals that the order has been passed in undue haste. The dispute pertains to the Assessment Years 2014-2015 and 2015-2016 and the amount involved are huge. For the Assessment Year 2014-2015, the tax amount is Rs. 91,46,490/- and the amount of tax involved for the Assessment Year 2015-2016 is Rs. 68,98,819/-. The orders dated 09.11.2022, rejecting the Petition filed by the petitioner for revision of the orders dated 28.09.2022, is set aside, subject to the petitioner depositing 10% of the disputed tax before the second respondent in cash by way of D.D. within a period of 30 days from the date of receipt of copy of this order. The petitioner shall appear for personal hearing before the second respondent before fresh orders are passed. Petition dispsoed off.

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• 2024 (6) TMI 1171
  Violation of principles of natural justice - order passed without considering the Profit and Loss Account, Balance Sheets and the Ledger produced before him - HELD THAT:- There is no merit in the challenge to the impugned order in this Writ Petition, as the respondents cannot be found fault with for passing the impugned order. After the earlier order dated 30.05.2019, which was set aside by this Court vide order dated 08.04.2021, it was incumbent on the part of the petitioner to have got ready with the reply. Instead, the petitioner waited till the issuance of pre-revision notice dated 31.08.2021 and has merely submitted only copies of Ledger and Profit and Loss Account. The petitioner should have filed a clear reply as to how there was no case made out by the respondents. That apart, in the counter affidavit, the second respondent has also stated that the petitioner has suppressed the turnover and that there is a tax liability, which has been confirmed vide the impugned order. Petition dismissed.

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• 2024 (6) TMI 1170
  Refund of amount paid under coercion - no order for demand is passed - HELD THAT:- On perusal of the facts, it is apparent that the respondents have not passed any order disposing of the refund applications dated 04.06.2021 and 24.09.2021. Considering the affidavit in reply, it appears that there are disputed questions of facts with regard to service of notice and passing of the assessment order for the period for which refund is claimed by the petitioners. The affidavit in rejoinder filed by the petitioners also raises such disputes with regard to the contents of the affidavit in reply. The petition is not entertained at this stage. The respondents are directed to pass appropriate order disposing of the aforesaid refund applications filed by the petitioners within a period of 12 weeks from the date of receipt of a copy of this order.

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• 2024 (6) TMI 1169
  Levy of penalty - Rejection of benefit of Amnesty Scheme under the Vera Samadhan Yojna, 2019 - seeking directions to grant waiver of the penalty under the Amnesty Scheme on the basis of payment of tax and interest prior to passing of the assessment order - attachment of bank accounts - HELD THAT:- The benefit of the Amnesty Scheme is available for waiver of interest and penalty. However, the Scheme also provides that no refund would be issued qua interest or penalty which is already deposited by the applicant. Therefore, the petitioner is not entitled to the refund of interest but so far as the penalty is concerned, the petitioner was entitled for the waiver thereof. The respondent authorities however invoking the Clause 4.5 by misinterpreting the object of the Scheme to give waiver of interest and if the amount of tax is deposited by the assessee. The petitioner under the bona fide belief that the petitioner already deposited the entire tax and interest and the order under challenge before the appellate authority was the assessment order comprising of tax interest and penalty and therefore as per Clause 4.5 of the Amnesty Scheme, the petitioner is not liable to deposit any penalty. The petitioner therefore did not deposit amount of penalty as intimated by the respondent-authority. The petitioner however, intimated the respondent-authority that as the petitioner has already paid tax and interest before assessment order was passed, the petitioner is not liable to deposit any amount of the penalty as required by the intimation letter. However, the respondent-authority rejected the application of the petitioner for the benefit of the Amnesty Scheme as the petitioner did not deposit the amount as required by the intimation letter. Keeping in view the observation made by this Court in case of SAFAL DEVELOPERS AND ANOTHER VERSUS STATE OF GUJARAT AND ANOTHER [ 2016 (4) TMI 1310 - GUJARAT HIGH COURT] and considering the facts of the present case, we are of the opinion that respondents have committed error while rejecting the application under Amnesty Scheme as the petitioner has already paid amount of tax and interest prior to passing of the order of assessment and prior to the announcement of the Scheme - The petitioner is therefore entitled to the waiver of the penalty as per the provisions of the Scheme accordingly. As the petitioner is not entitled to the Amnesty Scheme alternative prayer with regard to restoration of the second appeal before the Tribunal would not survive. Impugned Communication dated 11.03.2022 at Annexure-A as well as attachment order passed by the respondent-authorities are hereby quashed and set aside - petition allowed.

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