Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
June 29, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
GST
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High Court reduces penalties for e-way bill violations, cites lack of fairness. Petitioner to pay Rs. 15 Lakhs to PM Cares Fund.
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High Court says writ petition challenging tax assessment generally not allowed if appeal remedy available. Exceptions for cross-jurisdiction issues. Review app advised.
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High Court tackles unfair tax demand, GST registration cancellation, orders reconsideration. Petitioner gets chance to contest.
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Court rules in favor of petitioner due to lack of notice. Impugned order set aside; petitioner to pay Rs. 50,000.
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High Court rules in favor of petitioners in GST registration cancellation case, emphasizing the importance of natural justice principles.
Income Tax
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Filing tax forms just got easier! Starting June 27, 2024, certain forms as 3CN, 3CS, 3CEC, 3CEFB, 59, and 59A must be submitted electronically.
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Court allowed extra time for bank statements in a Black Money Act case. Petitioner gets 45 days.
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Court rules in favor of petitioner! Assessment order annulled due to lack of hearing. Respondent's claim rejected, petitioner gets right to video conference hearing.
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Court ruled notice to reassess tax invalid as approval was still in effect.
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Court says one day to respond to notice is unfair! Bank proof shows less money received. Order overturned, case sent back for review.
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High Court decided not to review petition due to long delay and legal questions. Court emphasized following rules to avoid uncertainty.
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The Tribunal confirmed additions for lack of evidence in transactions with Singla. Fair market value upheld for share variance.
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The Tribunal found assessment invalid due to improper approval process by AO. Lack of proper consideration made approval a formality.
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ITAT addressed cash deposits during demonetization. Found lack of evidence for certain expenses. Ruled Section 115BBE for higher rate of tax not retroactive.
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Appellate Tribunal rules in favor of taxpayer on LTCG & deduction issues. Upholds CIT(A)'s decision citing lack of Revenue challenge.
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Appellate Tribunal rules in favor of assessee on prior period expenses and TDS credit issues, rejects disallowance of demurrage charges.
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The tax tribunal ruled in favor of the taxpayer, allowing deduction for interest income from a cooperative bank u/s 80P(2)(d).
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Deduction u/s 32AD: ITAT rules in favor of deduction for investment made in 2015-16 despite dispute over Govt notification on backward areas.
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TP Adjustment: No negative working capital adjustment for captive service provider. Excluded companies not comparable. More verification needed
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Housing projects over 1000 sq. ft. get tax break. "Project Completion Method" approved for profit calculation. Local authority approval needed for tax deduction. Revenue's appeal dismissed.
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Retroactive cancellation of registration u/ss 12AA and 12AB found invalid by ITAT. Tax laws apply based on year of assessment.
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The tax tribunal reviewed appeal on cash deposits. Emphasized fair process & natural justice. Appeals allowed for fresh review.
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Appellate Tribunal cancels assessment order due to invalid notice by non-jurisdictional AO.
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The Tribunal ruled in favor of a trust seeking registration from 2021-22.
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The court found capital gains due to undeclared property sale. Claim of transfer under HUF rejected. Sale deed taxable in genuine transaction. Cash deposits justified.
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Tribunal rules in favor of assessee on safe harbor limit u/s 50C, allowing retrospective application. CBDT acknowledges property value differences.
Customs
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Ministry of Finance puts anti-dumping duty on China-made Drawer Sliders to protect local industry. Check duty rates & details
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Ministry of Finance imposes anti-dumping duty on tin plate Easy open ends from China
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Ministry imposes anti-dumping duty on steel tools from China & Korea for 5 years. Varying rates based on type. CIF value used for calculation.
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Anti-dumping duty imposed on Sodium Cyanide from China, EU, Japan, Korea to protect local industry. Rates vary, 5-year duration.
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High Court reviewed a case on detention for gold smuggling. Emphasized timely communication. Delay in forwarding representation unjustified.
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Dispute over refund of SAD resolved! Tribunal rules in favor of appellant citing compliance with conditions and CA certificate.
DGFT
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New rules for import under Tariff Rate Quota Scheme! Check out the latest amendment affecting TRQ quantities. Maize import under conditions set by High Court. Eligible entities named.
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India's DGFT has allowed 19 Pre-Shipment Inspection Agencies to expand globally, with new branches in 10 countries. PSIAs must update their certifications in 30 days.
Indian Laws
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Dishonour of Cheque: High Court discussed jurisdiction, inquiry, bank statements, signature comparison, charges merging, and case clubbing.
SEBI
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India's SEBI tightens rules for Foreign Portfolio Investors with new conditions on contributions and control. Exemptions for IFSC regulated entities.
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Security Contracts: Govt specifies goods like cereals, spices, metals, and more for regulation. Big impact on sectors.
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SEBI updates Insider Trading Regulations in 2024: 120-day restriction, trade execution rules, trading plan procedures.
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New SEBI circular allows NRIs, OCIs, and RIs to invest in IFSC-based FPIs in India. Up to 100% contribution permitted.
Central Excise
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In a case about missing goods and personnel penalty, the Tribunal found no proof of wrongdoing by the company. Industry standards matter!
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Tax credit granted! Circular advises against double benefits but doesn't deny credit. Tribunal rules in favor of legitimate credit.
Articles
Notifications
Customs-
13/2024 - dated
27-6-2024
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ADD
Seeks to impose provisional anti-dumping duty on Telescopic Channel Drawer Slider, originating in or imported from China PR
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12/2024 - dated
27-6-2024
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ADD
Seeks to impose anti-dumping duty on Easy open ends of tin plate, including electrolytic tin plate (ETP), measuring 401 diameter (99MM) and 300 Diameter (73 MM) in dimension, originating in or imported from China PR
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11/2024 - dated
27-6-2024
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ADD
Seeks to impose anti-dumping duty on alloy steel chisel/tool and hydraulic rock breaker in fully assembled condition, originating in or imported from China PR and Korea RP
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10/2024 - dated
27-6-2024
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ADD
Seeks to impose Anti-dumping duty on imports of Sodium Cyanide originating in or exported from China PR, European Union, Japan and Korea RP
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26/2024 - dated
27-6-2024
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Cus
Seeks to extend the exemption provide to imports of specified defence equipments for a further period of 5 years
GST - States-
6/2024 – State Tax - dated
27-6-2024
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Jharkhand SGST
Notify “Public Tech Platform for Frictionless Credit” as the system with which information may be shared by the common portal based on consent under sub-section (2) of Section 158A of the Jharkhand Goods and Services Tax Act, 2017
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56/2023 – State Tax - dated
27-6-2024
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Jharkhand SGST
Relevant date of issuance of order u/s 73(10) of JGST Act, 2017 for the financial year 2018-19 and 2019-20 extended - Date extended exercising the powers u/s 168A
Income Tax-
01/2024-25 - dated
24-6-2024
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IT
Specifying Forms prescribed in Appendix-II of the Income Tax Rules 1962, to be furnished electronically under sub-rule (1) and sub-rule (2) of Rule 131 of the Income-tax Rules, 1962
Circulars / Instructions / Orders
News
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Combined Index of Eight Core Industries increases by 6.3% in May 2024; Production of Electricity, Coal, Steel, Natural Gas record positive growth
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India and USA extend the Transitional Approach on Equalisation Levy 2020 until June 30, 2024
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Monthly Review of Accounts of Government of India upto May 2024 (FY2024-25)
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Inaugural Address by Shri Shaktikanta Das, Governor at the 18th Statistics Day Conference organised by the Department of Statistics and Information Management, Reserve Bank of India, Mumbai, June 28, 2024
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“Statistics Day” will be celebrated on June 29, 2024
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FATF adopts Mutual Evaluation Report of India in its June 2024 Plenary held in Singapore
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Exchange Rate Automation Module (ERAM) by CBIC to come into effect on 4th July 2024
Case Laws:
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GST
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2024 (6) TMI 1315
Seeking direction to allow him to make necessary correction in the Form GSTR-3B for the period 2018-19 by online or off-line, by opening the GST Portal for limited period or to allow the petitioner to make such correction through manual mode within a stipulated period - HELD THAT:- Having heard learned counsel for the parties, this Court disposes of the writ petition directing the opposite parties to take a decision on the reply submitted by the petitioner in form GST ASMT 11 by affording opportunity of hearing to the petitioner. In the event the authorities are satisfied with the contention raised by the petitioner, then the petitioner may be permitted to make necessary correction in accordance with law. The writ petition stands disposed of.
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2024 (6) TMI 1314
Violation of principles of natural justice - non-application of mind and failure to consider the material placed on record by the petitioner - lack of territorial jurisdiction - petitioner's principal place of business is at T.Nagar, Chennai, whereas jurisdiction has been unlawfully exercised by the State Tax Officer, Gudiyatham - difference between the GSTR 1 and GSTR 3B returns - Tax proposal relating to trade payables - Tax proposal relating to excess input tax credit being availed. Difference between the GSTR 1 and GSTR 3B returns - HELD THAT:- There is no indication in tax proposal No.3 relating to the assessment period 2018-19 that the difference between the GSTR 1 and GSTR 3B returns for July 2017 was excluded therefrom. Therefore, it appears prima facie that the two tax proposals overlap. As regards the tax proposal relating to the rate of tax on road works, the petitioner has placed on record relevant notifications. These notifications indicate prima facie that the tax rate on road works is 12%, even if the service is not provided directly to the government. Therefore, the matter requires reconsideration on this aspect. Tax proposal relating to trade payables - HELD THAT:- On examining the impugned order, it appears that such order was passed by assuming that 5% of the trade payables reflected in the financial statement were not paid within 180 days period. This conclusion is entirely speculative and, therefore, calls for interference. Tax proposal relating to excess input tax credit being availed - HELD THAT:- In respect of supplies where the difference in ITC is more than Rs. 5 lakhs, the petitioner should have produced certificates from the chartered accountants of the suppliers concerned. This does not appear to have been done by the petitioner. It is just and necessary that the matter be remanded for reconsideration. Since a substantial tax demand is involved, even after excluding amounts payable with regard to tax proposals that appear to be prima facie untenable, revenue interest is required to be protected. Towards such end, the petitioner is directed to remit a sum of Rs. 25 lakhs towards the disputed tax demand within 15 days from the date of receipt of a copy of this order. On instructions, learned counsel for the petitioner submits that the petitioner agrees to make such remittance. The impugned order dated 10.11.2023 is set aside on condition that the petitioner remits a sum of Rs. 25 lakhs towards the disputed tax demand within 15 days from the date of receipt of a copy of this order - Petition disposed off.
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2024 (6) TMI 1313
Levy of penalty with regard to three consignments not being accompanied with e-way bill - Section 129 (1) of the MGST Act - mandate of Rule 138 A of the MGST Rules, 2017 not fulfilled - non-application of mind - violation of principles of natural justice - HELD THAT:- By the impugned order penalty is levied under Section 129 (1) (a) as well as under Section 129 (1) (b) of the MGST Act. Both these provisions are mutually exclusive - the impugned order is passed without application of mind. These Petitions were heard on 21st June 2024 and while dictating the judgment in the Chamber, the Court came across an order dated 18th January 2022 wherein it is recorded that Petitioner has furnished a Bank Guarantee in all three Petitions for release of goods. Therefore, to ascertain the status of these Bank Guarantees, these Petitions were listed for direction on 26th June 2024. To a query raised by the Court about the status of the Bank Guarantees as recorded in the order dated 18th January 2022 given to the State GST Authority Respondent Nos. 2 and 3, Mr. Patkar informed the Court that the Bank Guarantees had already expired and they did not renew the same, nor the State GST Authority informed Petitioner about renewal - It was the obligation of Petitioner to have continued to renew the Bank Guarantees till the disposal of these Petitions, since based on these Bank Guarantees, the goods were released. Respondent No. 3 is directed to conduct enquiry, fix the responsibility and take the action against the officers / staffs who were responsible for allowing the Bank Guarantees to have lapsed. At the same time, Petitioner was also not justified in not renewing the Bank Guarantees, and therefore taking a firm view of such an inaction, this Court deems if fit to impose cost of Rs. 15 Lakhs on Petitioner to be paid to the PM Cares Fund, within a period of four weeks from the date of uploading of this order and file affidavit of compliance. The Petitioner is not liable to pay GST on movement of machinery from JNPT to its factory since same would not fall within the charging section - impugned order being Exhibit-A dated 15th December and corrigendum dated 22nd December 2020 is modified by holding that the Petitioner is liable for penalty of Rs. 25,000/- only under Section 129 (1) of the Act - Petitioner is directed to deposit Rs. 75,000/- with the State GST authority within a period of four weeks from the date of uploading of the present order. The Bank Guarantee furnished as recorded in order dated 18th January 2022 would be returned by Respondents to Petitioner only on payment of Rs. 75,000/- as directed herein - Petitioner is directed to donate Rs. 15 Lakhs to PM Cares Fund within a period of four weeks from the date of uploading of present order and file affidavit of compliance. The writ petition is disposed off.
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2024 (6) TMI 1312
Violation of principles of natural justice - order assailed on the ground that the order is unreasoned and disregards the petitioner's replies - HELD THAT:- The petitioner has placed on record three replies to the show cause notice. In these replies, the petitioner has explained the reasons for mismatch by stating that Government Departments reflect transactions in GSTR 7 while deducting TDS and making payments. On examining the impugned order, it merely records that the reply is not accepted. Since the impugned order is completely unreasoned, it cannot be sustained. The impugned order dated 30.04.2024 is set aside and the matter is remanded to the respondent for reconsideration - Petition disposed off by way of remand.
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2024 (6) TMI 1311
Maintainability of writ petition - availability of alternate remedy - writ petition not entertained mainly on the ground that against the order of assessment, the assessee/dealer has an appeal remedy under Section 107 of the TNGST Act, 2017 r/w Rule 108 of TNGST Rules, 2017 - want of jurisdiction. Alternative remedy - HELD THAT:- Normally, when there has been a statutory appeal remedy provided, especially under the Tax Legislation, Writ Petition under Article 226 of the Constitution of India would not be entertained by this Court. But there are some exceptions for such procedure. Want of jurisdiction - HELD THAT:- If any order of assessment is assailed, that normally would be entertained by the writ Courts. Herein the case on hand, the main contention of the learned counsel for the writ petitioner/appellant is that for want of jurisdiction, since it has been assigned to the State Authorities, the Central GST Authorities has to lay off their hands and this position has been clearly reiterated by the learned Judge in the said Judgment in Tvl.Vardhan Infrastructure's case [ 2024 (3) TMI 1216 - MADRAS HIGH COURT] . The cross jurisdiction issue is a major factor, wherein the assessment order, if it is challenged on the ground of cross jurisdiction, certainly on that ground, the order of assessment can be interfered with. However, these factual issues since have not been brought to the notice of the learned Judge, when the writ petition was taken up for hearing, the learned Judge had no occasion to consider this aspect, except to go into the ground of appellate remedy, on which ground the learned Judge since has considered the matter, he was pleased to dismiss the same. The appellant/writ petitioner is at liberty to file a review application before the learned Single Judge, against the order impugned in this writ appeal dated 04.04.2024, wherein the judgment in Tvl.Vardhan Infrastructure's case and any other judgment with regard to the point of jurisdiction can be brought to the notice of the learned Single Judge, based on which arguments can be advanced for consideration of the writ Court
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2024 (6) TMI 1310
Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - HELD THAT:- On examining the impugned order, it is evident that such order relates to two e-way bills, which were not reported in the GSTR 1 statements. It is also clear that the tax proposal was confirmed because the petitioner did not reply to the show cause notice. In view of the assertion that the petitioner could not participate on account of not being aware of proceedings, the interest of justice warrants that an opportunity be provided to the petitioner, albeit by putting the petitioner on terms. The impugned orders dated 04.09.2023 and 12.04.2024 are set aside and the matter is remanded to the second respondent for re-consideration subject to the petitioner remitting an additional 5% of the disputed tax demand within a period of two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.
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2024 (6) TMI 1309
Violation of principles of natural justice - petitioner was not provided a personal hearing - HELD THAT:- Under sub-section (4) of Section 75 of applicable GST enactments, a personal hearing is mandatory not only when requested for but when an order adverse to the tax payer is proposed to be issued. In all these cases, the tax proposals were confirmed without the petitioner being provided a personal hearing. On account of the infraction of a mandatory prescription, orders impugned herein cannot be sustained. The impugned orders in original dated 19.09.2023 are set aside and these matters are remanded for reconsideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue fresh orders within three months 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 1308
Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - cancellation of GST registration - HELD THAT:- The petitioner has placed on record evidence that his GST registration was cancelled on 21.10.2020 with effect from 31.12.2017. In those circumstances, the submission that the petitioner was not monitoring the portal is not entirely devoid of merits. At the same time, it is noticeable that the petitioner was put on notice about the discrepancies in returns by issuing notice in Form ASMT 10. In these circumstances, it is just and necessary to provide an opportunity to the petitioner to contest the tax demand on merits, albeit by putting the petitioner on terms. The impugned order dated 31.12.2023 is set aside and the matter is remanded for reconsideration on condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of 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 1307
Violation of principles of natural justice - non-receipt of either the SCN or the impugned order until the recovery notice was received - notice for personal hearing was returned by the postal authority with the remark no such person in the address - HELD THAT:- The impugned order records expressly that the personal hearing notice was returned with the endorsement no such person in the address . The petitioner has placed on record the sale deed for purchase of a house on 07.11.2023. Upon such purchase, the petitioner asserts that he shifted to such address. In these facts and circumstances, it is just and necessary that an opportunity be provided to the petitioner to contest the tax demand on merits, albeit by putting the petitioner on terms. The impugned order dated 26.10.2022 is set aside subject to the condition that the petitioner remits a sum of Rs. 50,000/- towards the tax demand within a maximum period of three weeks from the date of receipt of a copy of this order - Petition disposed off.
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2024 (6) TMI 1306
Violation of principles of natural justice - non-speaking order - petitioners have not been given any supportive documents of notice and as such the petitioners were asked to remain present for hearing on the very same day in the afternoon - cancellation of GST registration of petitioner - HELD THAT:- This Court in the case of Aggarwal Dyeing and Printing Works [ 2022 (4) TMI 864 - GUJARAT HIGH COURT] , the Coordinate Bench of this Court has discussed the law with regard to show cause notice as well as the importance of the principles of natural justice in great detail, and it was held that ' the sum and substance of various judgments on the principles of natural justice is to the effect that wherever an order is likely to result in civil consequences, though the statute or provision of law, by itself, does not provide for an opportunity of hearing, the requirement of opportunity of hearing has to be read into the provision.' Keeping in mind the facts of the present case, it appears that the show cause notice, which was issued upon the petitioners dated 8th April 2022, wherein the petitioners were directed to remain present on the very same date i.e. on 8th April 2022 for the purpose of explaining the show cause notice. It is also an undisputed fact that along with the show cause notice, the petitioners were not given any material evidence which is sought to be relied upon in support of the show cause notice. In this light, if the impugned order dated 22nd April 2022 is perused, the said order is completely non-speaking and cryptic order. The facts of the present case and the facts in the case of Aggarwal Dyeing and Printing Works are identical and similar in nature and thereby, we are unable to take any different view than the view taken by the Coordinate Bench of this Court in the case of Aggarwal Dyeing and Printing Works. Accordingly, the present petition deserves to be allowed solely on the ground of violation of principles of natural justice. The petition is allowed.
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Income Tax
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2024 (6) TMI 1305
Validity of Reopening of assessment - TDS u/s 192 or 194J - petitioner would submit that the petitioner is a medical professional in the field of Anesthesia - case of the Department that the petitioner has wrongly claimed to be a professional and has filed returns in ITR-3 and that the hospitals have wrongly deducted tax under Section 194J instead of Section 192 - HELD THAT:- The reasons stated in the notice issued under Section 148A(b) do not justify the conclusion that the petitioner is not a professional. Unless the Department has the document to substantiate that the petitioner is an employee in the respective hospitals, from whom the petitioner has received consideration and deductions were made wrongly under Section 194J instead of 192, the Department cannot re-open the assessment. The petitioner being an Anesthesiologist is consulting in several hospitals and thus, has received remuneration for the services rendered to these hospitals, although on monthly basis. There is no justification in reopening the assessment. Therefore, the impugned order is quashed. Consequently, the impugned notice issued under Section 148 of the Income Tax Act, 1961 is also quashed. Decided in favour of assessee.
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2024 (6) TMI 1304
Validity of order under the Black Money Act - limited relief requested for is to grant 45 days' time to obtain and provide the bank statement - petitioner was called upon to provide documents, including bank statements relating to the petitioner's account with DBS Bank and the said bank account was closed a along time ago - HELD THAT:- The relief requested for by the petitioner is limited to granting 45 days' time to provide all documents called for by the first respondent. Such request is made by stating that the petitioner's son has travelled to Singapore to obtain the statement from the DBS Bank and that this process is taking up time because the bank account was closed a long time ago. The reason set out by the petitioner appears to be reasonable. WP disposed by directing the first respondent to consider and grant the request for 45 days' time to provide all documents and information requested for by the first respondent.
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2024 (6) TMI 1303
Validity of assessment order passed without providing opportunity of personal hearing - violation of principle of natural justice - transfer of case from National Faceless Assessment Center to that of jurisdictional AO under section 144B (8) - request of the petitioner to grant personal hearing was rejected by the respondent No. 1 as there was no functionality to conduct hearing through video conference. HELD THAT:- The contentions raised on behalf of the respondent that there is no functionality to conduct hearing through video conference cannot be accepted because as per the provisions of the section 144B of the Act as well as circular dated 06.09.2021 issued by the CBDT, the respondent-Assessing Officer is required to give personal hearing through video conference and if the facility is not available then the personal hearing is to be conducted in a designated area in Income Tax Office and the hearing proceedings are to be record. As per Circular No. 06.09.2021 respondent Assessing Officer was required to give personal hearing to the petitioner and if it is not technically possible through video conference, then the personal hearing ought to have been conducted in a designated area of the Income Tax office. Therefore, the contention of the respondent which is stated on oath is contrary to the circular issued by the CBDT. The contention raised on behalf of the respondent that the petitioner has alternative efficacious remedy to file appeal before the CIT (Appeal) the petition may not be entertained is also not tenable in view of the fact that there is a breach of principle of natural justice by not providing opportunity of hearing to the petitioner though required as per the provisions of section 144B read with circular issued by the CBDT dated 06.09.2021 which is binding upon respondent-Assessing Officer in view of the settled legal position Hon ble Supreme Court in case of Whirlpool Trade Marks, Mumbai And Others [ 1998 (10) TMI 510 - SUPREME COURT ] Similarly, the contention raised on behalf of the petitioner that the jurisdictional officer has passed the impugned order without jurisdiction is also not tenable in view of the notings made in the order sheet in view of the fact that the assessment proceedings were conducted pursuant to the order passed under section 263 and therefore, the same is required to be conducted by jurisdictional Assessing Officer. Petition partly allowed and impugned assessment order is hereby quashed and set aside. The matter is remanded back to the respondent No. 1 Assessing Officer to give opportunity of hearing to the petitioner either through video conference or through personal hearing in the designated area of the income tax office as per the para 2B of the Circular dated 06.09.2021 issued by the CBDT.
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2024 (6) TMI 1302
Validity of reopening of assessment - notice u/s 148 for re-opening on the basis that the excess funds do not form part of approved refund and hence is not exempt from taxation - as per the order passed under Rule 3 of Part B of Schedule IV of the Act dated 31.3.2014, the approval of the fund was only withdrawn with effect from the date of passing of the said order i.e. 31.3.2014. HELD THAT:- Considering Rule 3 of Part B of Schedule IV of the Act, the Tribunal has taken note of order dated 31.3.2014 passed by the Commissioner for withdrawal of approval to hold that there was no question of any withdrawal of approval in absence of communication in writing by the Commissioner to the respondent-assessee. Tribunal has held that such withdrawal of approval shall take effect from the date on which such order has been passed. Therefore, presumption on which the notice was issued that the fund stands withdrawn is not tenable as the withdrawal of approval as per clause 6(a) of the Trust Deed from 10.4.2014 would not be applicable in the facts of this case. The tribunal has therefore, rightly held that on the date of notice dated 24.3.2014 for reopening of assessment, there was excess fund of Rs. 4.12 crores and the approval was granted under Rule 2 of Part B of Schedule IV of the Act as per clause 6 (a) of the Trust Deed was in operation. In view of the finding arrived at by the Tribunal coupled with Sub Rule 3, Rule 2 Part B of Schedule IV of the Act and in absence of any communication of withdrawal of approval by the Commissioner at the time of issuance of notice dated 24.3.2014 for reopening under Section 148 of the Act, the Tribunal was justified to set aside the notice for reopening of assessment and consequently reassessment order was also rightly set aside.
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2024 (6) TMI 1301
Validity of Revision u/s 263 - whole cash deposit which remained unexplained should have been added u/s 68 and charged by applying tax rate u/s 115BBE - ITAT allowed the appeal of the assessee by accepting the case of the assessee that the seized cash was already added in the hands of the Director of assessee in assessment order for AY 2014-2015 passed u/s 143 (3) HELD THAT:- As apparent that the amount of Rs. 15.50 lakhs was seized from the residence of the Director of respondent assessee company and addition was also made in hands of the Director in his individual capacity and tax was also paid by the Director. Tribunal has considered this aspect while allowing the appeal of the assessee challenging the order u/s 263 of the Act. It also appears from the record that the contention of the assessee company that amount of Rs. 15.50 lakh belonged to it was not accepted by the Income Tax department and therefore, the entry passed by the assessee company in the books of accounts reducing the cash balance was reversed because of the assessment order passed in the case of the Director. Tribunal therefore, was justified in holding that order the passed by the AO was not at all prejudicial to the interest of Revenue as the amount of Rs. 15.50 lakhs was already taxed in the hands of individual Director. We are of the opinion that there is no error in dismissing Misc. Application filed by the Revenue in absence of any mistake apparent in the appellate order passed by the Tribunal so as to invoke the provisions of section 254 (2) of the Act.
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2024 (6) TMI 1300
Addition u/s 68 - Unexplained cash deposit in bank account - assessee did not have sufficient cash balance and there was no conclusive proof as to how such huge amount came into the possession of the assessee in the form of cash - CIT(Appeals) deleted such additions on the grounds that confirmations were signed by authorised signatory, as person who advanced loan was in custody at the time of assessment proceedings and such loan from directors and promoters of the group with their PAN number, details of assessment etc. were with AO himself and such loan was accepted through cheques and in earlier years such parties had also given loan to the assessee also upheld by ITAT - HELD THAT:- In view of above concurrent findings of fact arrived at by CIT(Appeals) and Tribunal, this appeal stands dismissed as no question of law much-less any substantial question of law arises from the impugned order passed by the Tribunal. Decided in favour of assessee.
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2024 (6) TMI 1299
Validity of assessment - providing shorter period[one day] to reply to SCN - violation of principles of natural justice - HELD THAT:- As show cause notice provided one day's time for the petitioner to reply, this was clearly not reasonable. Amount received in the South Indian Bank - A statement from the South Indian Bank to the effect that the amount received in the bank account was Rs. 42,92,330/- and not Rs. 85,84,660/- was submitted by the petitioner as an attachment to the reply dated 17.03.2024. Therefore, the impugned order is set aside and the matter is remanded for reconsideration. On perusal of the impugned assessment order, find no consideration of these contentions or documents. For these reasons, the impugned order is not sustainable - Assessee appeal allowed.
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2024 (6) TMI 1298
Validity of Reassessment order passed - violation of principles of natural justice as petitioner's reply and documents attached thereto not examined - HELD THAT:- On the basis that the petitioner's reply and documents attached thereto could not be extracted and examined, the order was issued. In the factual context of the petitioner having submitted a reply along with relevant documents, the non-consideration thereof violates principles of natural justice. Hence, the impugned assessment order is unsustainable. Therefore, the impugned assessment order is set aside and the matter is remanded for reconsideration from the stage of reply to the show cause notice cum draft assessment order. The respondents are directed to take necessary measures to enable the petitioner to upload the reply on the portal along with the relevant attachments. The petitioner is directed to upload the reply within two weeks from the date of receipt of a copy of this order. Upon receipt thereof, the second respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing through video conference, and thereafter issue a fresh order within three months from the date of receipt of the petitioner's reply.
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2024 (6) TMI 1297
Assessment order passed ignoring request to extension of time to reply to SCN - proposal for adding all credits in the bank statement - HELD THAT:- On perusal of show cause notice it is evident that such notice deals with aggregate credit entries in the petitioner's bank statement and the proposal to treat this aggregate sum as unexplained money u/s 69A r/w 115BBE of the Income Tax Act. On perusal of earlier notices under Sections 143(2) and 142(1), this issue was not raised in such notices. In these circumstances, it was necessary to provide a reasonable time to the petitioner to respond to the show cause notice. The show cause notice granted three days originally and this time limit was extended by a further three days. Since sufficient time was not given to the petitioner to respond meaningfully to the show cause notice, the impugned assessment order calls for interference. The impugned assessment order dated 23.03.2023 is set aside and the matter is remanded for reconsideration. The petitioner shall reply to the show cause notice within a maximum period of two weeks from the date of receipt of a copy of this order by enclosing all relevant documents.
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2024 (6) TMI 1296
Maintainability of the review petition on the basis of a subsequent judgment - condonation of delay of 619 days for Civil Review petition - appellant states that the delay in filing of the present appeal is attributable to the Counsel. The appellant states that being wholly unaware of the judgment and order passed by this Hon'ble Court it could not take necessary steps in the matter Entitlement for Exemption under Section 80-P(2)(a)(i) and Taxability of Transfer Charges Received - whether the Samiti was entitled for exemption u/s 80-P(2)(a)(i) on the interest received by it. and whether the transfer charge received by it is not taxable income - Samiti submits that in Income Tax Officer, Mumbai v. Venkatesh Premises Cooperative Society Ltd. [ 2018 (3) TMI 675 - SUPREME COURT] as laid down the law on the subject and it has been held that the transfer charges payable by the outgoing member does not partake the nature of profit or commerciality as the amount is appropriated only after the transferee is inducted as the member and in view of the law laid down in Venkatesh Premises Cooperative Society Ltd. needs a relook and, accordingly, modified/reviewed. HELD THAT:- Explanation to Rule (1) to Order 47 of the Code of Civil Procedure provides that a decision on a question of law on which the judgment of the Court is based if reversed or modified by the subsequent decision of the Superior Court in any other case that shall not form a ground for review of such judgment. The judgment in Venkatesh Premises Cooperative Society Ltd. was rendered on 12th March 2018 but before that [ 2018 (2) TMI 2117 - JHARKHAND HIGH COURT] was dismissed by order. Samiti has brought to our notice a decision in Govt. of NCT of Delhi through the Secretary, Land and building Department and Another v. M/s K. L. Rathi Steels Limited and Others [ 2023 (3) TMI 1503 - SUPREME COURT] to support maintainability of this review petition on the basis of a subsequent judgment. However, the decision in M/s K. L. Rathi Steels Limited is a split verdict of the Hon ble Supreme Court and a final decision thereon is awaited. In the opinion of this Court, if a review petition is entertained ignoring the statutory provisions under Order 47 of the Code of Civil Procedure which are applied in the writ proceedings, that would bring uncertainty and chaos in the system. For the foregoing reasons appeal filed for condonation of delay of 619 days in filing the present Civil Review petition is dismissed.
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2024 (6) TMI 1295
Intimation u/s. 143(1) denying benefits of Section 11 - It was the submission that the assessee had filed rectification application u/s. 154 and the same came to be rejected and on further appeal the ld. CIT(A) without considering the claim of the assessee, has upheld the order u/s. 154 - When questioned what happened to the intimation issued u/s. 143(1), it was the submission that the assessee had filed rectification application u/s. 154 of the Act and the same came to be rejected and on further appeal the ld. CIT(A) without considering the claim of the assessee, has upheld the order u/s. 154 HELD THAT:- At the outset, ld. AR has sought liberty to withdraw this appeal and also prayed for liberty to file appeal against the intimation u/s. 143(1) of the Act. Thus, the appeal filed by the assessee against the order passed u/s. 154 of the Act stands dismissed as withdrawn and liberty is granted to the assessee to file necessary appeal against the intimation u/s. 143(1) of the Act before the appropriate forum. Appeal of the assessee is dismissed as withdrawn.
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2024 (6) TMI 1294
Unexplained credits u/s 68 - assessee was asked to establish the identity, creditworthiness of Shri Singla and genuineness of the transactions, the same was failed to establish by producing cogent documentary evidence - HELD THAT:- Since the assessee failed to submit the required documents being copy of the ITR, Bank Statement and confirmation of Shri Singla, the addition was confirmed by First Appellate Authority which is found to be just and proper so as to warrant interference particularly in the absence of any assistance rendered by the assessee before us. The order passed by the CIT(A) is confirmed. Addition u/s 56(2)(vii)(c) - difference in fair market value and actual consideration paid by the assessee for purchase of shares - HELD THAT:- As the assessee allotted 125000 shares of J.B. Rolling Mills @Rs.40/- per share on 31.03.2017, the fair market value of such shares comes at Rs. 48.60/- per share in terms of the provision of Section 56(2)(vii)(c) read with Section 11UA of the Act. Therefore, the difference in fair market value and the actual consideration paid for purchase of shares has been rightly added by the Learned AO and so confirmed by the First Appellate Authority which is found to be just and proper so as to warrant interference - Decided against assessee.
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2024 (6) TMI 1293
Validity of assessment proceedings u/s 153A - Sec 153D approval process not followed by the AO - HELD THAT:- Considered the rival submissions and material placed on record, we observed that the approval granted by DCIT, Central Circle, Noida dated 30/12/2016 in which the approval granted u/s 153 were granted to the eighteen assessees including the case of the assessee. Letter granting of such approval is placed on record. In the case of M.G. Metolloy Pvt. Ltd [ 2023 (10) TMI 686 - ITAT DELHI] , is one of the assessee, who was also granted approval by the same letter dated 30/12/2016 sanctioning authority (JCIT) has, in fact, under the force of circumstances, relegated his statutory duty to the subordinate AO, whose action the JCIT, was supposed to supervise as per the scheme of the Act. Manifestly, the JCIT, without any consideration of factual and legal position in proposed additions/disallowances and without contents of appraisal report before him or incriminating material collected in search etc. has buckled under statutory compulsion and proceeded to grant a simplicitor approval with caveats and disclaimers. This approach of the JCIT has ipso facto rendered the impugned approval to be a mere ritual or an empty formality to meet the statutory requirement and cannot thus be countenanced in law. The identical issue has been favourably adjudicated in assessee's own case in ITA 3306/Del./2018 order dated 23-08-2021 concerning other AY 2015-16 where co-ordinate bench found total lack of propriety in such statutory approval - We are unhesitatingly disposed to hold that the assessment order for AY 2014-15 in question, in pursuance of a hollow cosmetic approval accorded u/s 153D and undeniably without application of mind, is rendered unenforceable in law and hence quashed. - Decided in favour of assessee.
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2024 (6) TMI 1292
Denial of exemption u/s 11 - assessee being registered u/s 12A - HELD THAT:- The proviso to section 12A(2) was introduced to remove hardship caused to the genuine trust. In this case, assessee is a Charitable Trust. It has not been alleged by Revenue that assessee s activities/objects are not charitable in nature, rather it is an admitted fact that assessee s objects and activities are charitable in nature. CIT(E) after examining the objects and activities of the Trust, granted registration u/sec. 12AA of the Act to the assessee trust. The impugned order u/sec. 143(1) was issued on 02.01.2018 and registration u/s. 12AA of the Act was granted 20.10.2016, means at the time of issue of order u/s. 143(1), assessee was already having registration u/s. 12AA of the Act. We have already mentioned that proviso to section 12A(2) was introduced to remove hardship to the genuine trust. Therefore, as per proviso to section 12A(2) of the Act, assessee was eligible for deduction u/sec. 11 of the Act for A.Y. 2016-17. As relying on Shree Shyam Mandir Committee [ 2017 (10) TMI 1450 - RAJASTHAN HIGH COURT] Assessee is eligible for deduction u/sec. 11 of the Act for A.Y. 2016-17 as assessee had received registration u/sec. 12AA of the Act before the order u/sec. 143(1) for A.Y. 2016-17 was passed by Income Tax Central Processing Centre, Bangalore. Accordingly, grounds of appeal raised by the assessee are allowed.
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2024 (6) TMI 1291
Disallowance u/s. 14A - As argued assessee has not earned exempt income during the relevant previous year under consideration - As per CIT(A) as there is no exempt income earned in the present Assessment Year, disallowance made u/s 14A is not sustainable - HELD THAT:- We have noticed that the above findings of the Ld. CIT(A) is apt and accurate and legally sustainable as being duly supported by settled principles of law by the Hon'ble High Court and Hon'ble Supreme Court and we find no illegality and perversity in the same. Regarding the reliance by the Ld. AO on the case of Hon'ble Supreme Court in M/s. Maxopp Investment Ltd. [ 2018 (3) TMI 805 - SUPREME COURT] we have noticed that the appellant has unequivocally asserted that they have made the investment from their own funds raised by the issuing of Optional Convertible Debentures (considered entirely equity in nature) and subscribed by holding company. Further, the assessee has unequivocally asserted that they have not debited any interest expenses or similar expenses incurred to any income from investment made by the appellant. Nothing contrary has been brought on record by the revenue/appellant which may controvert the said assertions of the assessee in this case. Therefore, the facts of case of the assessee are distinguishable from the facts of case of M/s. Maxopp Investment Ltd. referred (supra). Addition of book profit u/s 115JB on addition u/s 14A - The finding of the Hon'ble jurisdictional High Court in M/s. Bengal Finance Investment Pvt. Ltd. case [ 2015 (2) TMI 1263 - BOMBAY HIGH COURT] the amount of disallowance u/s. 14A of the Act cannot be added for arriving at book profit for the purpose of Section 115JB of the Act confirmed. We are of the considered view that there is no illegality in the impugned order passed by the Ld. CIT(A) wherein the order of the Ld. AO was set aside and disallowances made by the Ld. AO were deleted. Assessee appeal allowed.
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2024 (6) TMI 1290
Unexplained cash deposits - applicability of section 115BBE - assessee and her husband deposited during demonetization in assessee s individual account and in their joint accounts - as stated assessee and her husband are farmers and they had only agricultural income during the year under consideration - HELD THAT:- We find that the Ld. CIT(A) has not considered the opening cash balance as on 01.01.2016. AR has stated that the cash receipt from October, 2013 to December, 2015 was of Rs. 38,18,461/-. From the above, the assessee has reduced the cash deposits of Rs. 4,50,000/-; agricultural expenditure, being 40% of the agricultural income, for the period October, 2013 to December, 2015; and household expenses of Rs. 6,75,000/- @ Rs. 25,000/- per month for 27 months. The assessee has given details of the total cash withdrawal and cash agricultural income. We find that apart from living expense of Rs. 25,000/- per month, the assessee has not shown any expense such as medical expenses, expenses for various social and family functions, educational expenses, travelling expenses and other miscellaneous expenses. Therefore, the expenses shown by the assessee at Rs. 25,000/- per month is on the lower side and in our view Rs. 50,000/- would be the reasonable monthly expense. Therefore, the personal expenses for the 27 months would be Rs. 13,50,000/- instead of Rs. 6,75,000/- claimed by the assessee. If such expenses are considered, the cash available as on 01.01.2016 would be Rs. 6,06,061/-. Therefore, the assessee has been able to explain only Rs. 6,06,061/- as against the claim of opening balance of Rs. 12,80,000/-. Therefore, addition to the extent of Rs. 6,73,939/- is sustained and balance is deleted. Hence, ground no.1 is raised by the assesse is partly allowed. Application of provisions of section 115BBE of the Act on the impugned addition - As provisions of section 115BBE of the Act was enacted on 15.12.2016 and hence cannot be applied for the year under consideration - As decided in Samir Shantilal Mehta [ 2023 (5) TMI 1279 - ITAT SURAT] since the search in the case of the assessee was carried out before the amendment the addition ought to have been made in terms of the prevailing provision and therefore, the addition made by the assessing officer invoking section 115BBE, provision of which came into force only on 01.04.2017, is not sustainable - Thus, provisions of section 115BBE are not applicable to the present case - Decided in favour of assessee.
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2024 (6) TMI 1289
LTCG Computation - denial of cost of improvement - As per AO no prudent person would wait for more than three years when there is no reference of such improvement in the sale deed. Further, the payment has been made only after the issue of show cause notice - HELD THAT:- We find the identical addition was made by the AO in the hands of spouse of the assessee i.e. another co-owner [ 2023 (6) TMI 1397 - ITAT PUNE] . We find the Ld. CIT(A) / NFAC deleted the said addition and although the Revenue has filed an appeal against the order of CIT(A) / NFAC challenging the deduction u/s 54 / 54F of the Act, however, no such ground was raised by the Revenue on the issue of cost of improvement in the hands of the spouse of the assessee. Once the Revenue has accepted the cost of improvement in the hands of the spouse of the assessee being the co-owner to the extent of her share, we find no reason as to how and why the Revenue is aggrieved against the order of CIT(A) / NFAC on this issue . Further, we find the CIT(A) / NFAC has given justifiable reasons while deleting the cost of improvement and the Ld. DR could not rebut the findings of the Ld CIT(A) / NFAC by producing any contrary material. In this view of the matter and in view of the detailed reasoning given, the order of CIT(A) / NFAC deleting the cost of improvement in the hands of the assessee is upheld and the grounds raised by the Revenue on this issue are dismissed. Denial of deduction u/s 54 - addition on the ground that the assessee failed to comply with the conditions stipulated in section 54 i.e. he has not completed the construction within three years from the date of transfer of original asset on or before 26.07.2019 - We find the CIT(A) / NFAC in the present case has given a finding that the assessee sold an old asset and realized the consideration and applied the same for acquiring the new asset which is in the nature of residential house, which is evident from the purchase deed filed by the assessee. He has given a finding that the assessee has satisfied all the conditions as stipulated u/s 54 of the Act. Further, we find in the case of spouse of the assessee the claim of deduction u/s 54 of the Act was denied by the Assessing Officer and in appeal the CIT(A) / NFAC allowed the claim of the assessee. Decided against revenue.
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2024 (6) TMI 1288
Addition towards prior period expenses - HELD THAT:- It has been consistently held in favour of the assessee by the ITAT, Visakhapatnam Bench for the earlier years in the assessee s own case [ 2011 (2) TMI 1536 - ITAT VISAKHAPATNAM] for the AY 2002-03 in the assessee s own case as held wherein AO has accepted the prior period income in this year but disallowed the prior period expenditure. This action of the assessing officer is not proper as he has to take into the account the status as a whole and not to make a pick and choose. We however, carefully examined the order of the Ld. CIT(A) and we find that the Ld. CIT(A) has adjudicated the issue in the light of judgment of the Delhi High Court in the case of Additional CIT vs. Jay Engineering Works Limited [ 1978 (2) TMI 94 - DELHI HIGH COURT] TDS u/s 194I - Disallowance u/s. 40(a)(ia) - demurrage charges - AR submitted that these expenditures are in the nature of payment made to shipping companies in foreign currency - HELD THAT:- From the submissions of the Ld. AR, we find that the payment are made to foreign shipping companies as demonstrated by the Ld. AR through the documents which are available. These are in the nature of detention charges paid to foreign shipping companies and therefore the Board Circular No. 723, dated 19/9/1995 is applicable. We therefore are of the view that invoking the provisions of section 194I in the case of the assessee is not valid in law and thereby we reject the grounds No. 4 5 raised by the Revenue on this issue. Denial of TDS credit - claim denied to the assessee since it is not reflecting in Form-26AS of the assessee for the impugned assessment year - HELD THAT:- As the Circular No 5/2013 wherein it was clearly clarified by the CBDT to allow and grant credit for TDS based on the original Form-16A submitted by the assessee even though it is not reflected in the Form-26AS. This instruction was issued by the CBDT to eliminate the hardships faced by the assessee in the initial assessment years during the implementation of Form-26AS. Therefore, we are inclined to remit the matter to the file of the Ld. AO and direct the assessee to produce the original Form-16A before the Ld. AO for verification. The Ld. AO is directed to verify the genuineness of the credit for TDS and thereby grant credit if it is found to be correct. Accordingly, Ground No.2 raised by the assessee is allowed for statistical purposes. Charging of interest u/s. 234C - HELD THAT:- From the submissions made by the Ld. AR we find that the Department of Defence Produce has granted a financial restructuring package to the assessee on 23/03/2011. The assessee has also failed to seek exemption from the waiver of interest with the appropriate authorities within the time limit specified. In the facts and circumstances of the case, we are of the view that there is no provision in the Act to grant waiver from levy of interest u/s. 234C of the Act. We therefore find no infirmity in the order of the Ld. CIT(A)-NFAC thereby dismiss this ground raised by the assessee.
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2024 (6) TMI 1287
Deduction u/s 80P(2)(d) denied in adjustment u/s 143(1) - assessee has earned interest income from Maharashtra State cooperative bank Ltd which is a scheduled bank - whether such an adjustment can be made under the provisions of section 143 (1) of the act or not? - HELD THAT:- In this case return is not filed beyond the due date prescribed under the provisions of section 139 of the act and therefore the disallowance of deduction claimed under chapter VIA for that reason cannot be made. It is also not the case of AO that it is an incorrect claim made by the assessee as per explanation (a) of that section. Therefore, the disallowance of deduction under section 80P(2)(d) of the act is not permitted adjustment under the provisions of section 143 (1) of the act - Such adjustment made is beyond the powers and therefore such an intimation deserves to be quashed and hence quashed. Deduction u/s 80P - Assessee is entitled to deduction u/s 80P(2)(d) for the reason that assessee has placed the sum with the Maharashtra State cooperative bank which is also cooperative society as per Maharashtra cooperative societies act. Therefore, in terms of the provisions of section 80(P)(2)(d) read with the provisions of section 2(19) of the income tax act where the definition of cooperative societies is provided and further reading the same with respect to the Maharashtra cooperative societies act, it is apparently clear that the cooperative banks are also the cooperative societies under that act. Assessee is eligible for a deduction earned by the assessee cooperative society from the investment made in another cooperative society i.e., Maharashtra state cooperative Bank Limited u/s 80P(2)(d) Supreme Court in case of Citizen cooperative society Ltd [ 2017 (8) TMI 536 - SUPREME COURT ] has categorically held that the section 80P of the act is a benevolent provision, which was enacted by the Parliament in order to encourage and promote the growth of the cooperative sector generally in the economic life of the country and must therefore, berated liberally and in favour of the assessee. Even otherwise if the strict interpretation of the law is made, the assessee is entitled to the deduction under section 80P(2)(d) of the act with respect to the interest earned by the assessee on its investment with other cooperative banks who are in fact cooperative societies as per the Maharashtra State cooperative societies act. Accordingly, CIT A is not correct in not allowing the assessee deduction under section 80P(2)(d) of the act on such interest income. Hence the order of the learned CIT A reversed, and the learned assessing officer is directed to grant the deduction u/s 80 (P) (2) (d) - Decided in favour of assessee.
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2024 (6) TMI 1286
Estimation of income - bogus purchases from non-existent vendor s - CIT(A) restricting the disallowance to 25% of purchases - HELD THAT:- AO has made the addition of 100 percent of the bogus purchases as addition to the income of the assessee by invoking the provisions of section 69C of the act despite the assessee showing the purchase invoices, name, and address of the parties, producing the books of accounts, payments made by the banking channel. Merely because the notices issued to the supplier u/s 133 (6) could not be served by the AO and further the assessee failed to produce the owner of M/s Rishabh Enterprises the learned assessing officer made the addition to the extent of hundred percent of such bogus purchases. CIT-A upon the decision of M/s Vijay Proteins Limited [ 2015 (1) TMI 828 - GUJARAT HIGH COURT] retained the addition only to the extent of 25% of bogus purchases. We find that in the case of NK proteins [ 2016 (6) TMI 1139 - GUJARAT HIGH COURT] followed the decision of M/s Vijay Proteins Ltd and further in both the cases the addition was restricted to the extent of 25% of the bogus purchases only. Therefore, the grounds of appeal preferred by AO are misplaced - no infirmity in the order of the CIT A in restricting the addition of bogus purchases to the extent of 25% of such bogus purchases. Appeal of revenue dismissed.
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2024 (6) TMI 1285
Claim of deduction u/s 32AD - additional investment allowance - investment made in financial year 2015-16 - matter referred to third member - opinion difference between the Hon'ble Members of Hyderabad B Bench - claim denied on the ground that the Central Government has issued the notification of the backward area on 20.07.2016 and it is mentioned that the notification will come into effect from the date of publication in the official gazette , therefore, the areas notified can be treated as backward areas from the date of notification only which is 20.07.2016 and therefore, the assessee cannot claim the deduction prior to the date of notification DR submitted that the assessee has not earned any revenue from its operations and that the notification was issued after the FY, therefore, section 32AD is not applicable to the assessee and strict interpretation should be applied as per the judgment case of Dilipkumar Company [ 2018 (7) TMI 1826 - SUPREME COURT ] - Whether the notification No. 61/2016/F.No.142/13/2015, TPL issued by the Central Board of Direct Taxes on 20.07.2016 keeps the operation of the provisions u/s 32AD of the I.T. Act in abeyance till 20/07/2016? AM while upholding the order of the learned CIT (A) was of the opinion that in the gazette notification published on 20th July, 2016, it is clearly mentioned that the notification shall come into force on the date of publication in the official gazette i.e. 20.07.2016 AND noted that the section was inserted by the Finance Act 2015 w.e.f. 1.4.2016. The impugned financial year is 2015-16 and the impugned financial year is prior to the insertion of the section - assessee has claimed deduction u/s 32AD which was not in force for the relevant financial year. JM held assessee shall be allowed deduction of a sum equal to 15% of the actual cost of such new asset for the A.Y relevant to the previous year in which such new asset is installed - the amendment shall take effect from 1.4.2016 and will accordingly apply in relation to A.Y 2016-17 and subsequent years. Further, the section clearly indicates that such a deduction is allowable for the previous years between 2015-16 and 2019-20 corresponding to the A.Ys 2016-17 to 2020-21. Thus, applicability of section 32AD(1) of the Act to the A.Ys 2016-17 is beyond any controversy. HELD THAT:- On combined reading of the Memorandum explaining the provisions in the Finance Bill 2015 as well as the CBDT Circular No.19 of 2015 clearly mentions that the provisions of section 32AD are applicable from A.Y 2016-17 for a period of 5 years. Therefore, the first question i.e. as to whether the provisions u/s 32AD of the Act, 1961 are applicable for the investment made in financial year 2015-16 is concerned, the answer, is Yes and is applicable for financial year 2015-16 i.e. assessment year 2016-17. So far as the remaining two questions referred the assessee in the instant case has set up the undertaking or enterprise for manufacture or production of an article or thing after 1.4.2015 and the new asset has been acquired and installed for the said purpose, during the period beginning from 1.4.2015 from which the date the section 32AD is introduced. Therefore, the assessee is entitled for the allowance u/s 32AD. As find force in the argument of assessee that neither the section nor the notification states that the deduction u/s 32AD is allowable only for the period starting from the date of notification. In my opinion, the purpose of section 32AD is to give the benefit for a period of 5 years and once the notification is issued, the benefit accrues for full 5 years. If the contention of the Revenue that the assessee is entitled to claim the benefit of section 32AD only w.e.f. the date of notification i.e. 20.07.2016 is accepted, then the condition of getting the benefit for a period 5 years from 1.4.2016 is not fulfilled and this cannot be the mandate of the legislation. Since the assessee in the instant case satisfies the eligibility criteria, the exemption notification, in my opinion, should be construed liberally. Once the notification is issued u/s 32AD specifying the area to be a backward area. it relates back to 1.4.2015 onwards. There are no further restricting words to support that the allowance shall be available for the period after the date of notification of the backward area. Hon'ble Supreme Court in the case of Mother Superior Adoration Convent [ 2021 (3) TMI 93 - SUPREME COURT ] has held that wherever there is exemption provision and if there is ambiguity, such ambiguity must be interpreted in favour of that which is exempt. Since section 32AD is a beneficial provision and since the assessee falls in the beneficial provision, therefore, the provision as well as the notification needs to be interpreted liberally i.e. in favour of the assessee and the assessee is entitled to deduction u/s 32AD. Order of Third Member - a) The notification issued by CBDT on 20.07.2016 does not keep the operation of the provisions u/s 32AD of the Act in abeyance till 20.07.2016 b) The notification stating that it shall come into force as on the date of its publication in the official gazette cannot override the provisions of section 32AD(1) of the Act. Thus agree with the order proposed by the learned JM that the assessee is entitled to deduction u/s 32AD.
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2024 (6) TMI 1284
TP Adjustment - Non-grant of working capital adjustment - HELD THAT:- As relying on M/S. SOFTWARE AG BANGALORE [ 2016 (3) TMI 1384 - ITAT BANGALORE] and M/S. TIVO TECH PRIVATE LIMITED [ 2020 (6) TMI 708 - ITAT BANGALORE] negative working capital adjustment cannot be carried out, where the assessee was a captive service provider. Here also it is an admitted position that assessee was a captive service provider and its services are entirely rendered to its AE abroad. Its share capital was entirely sourced from its AE abroad. Thus direct that no negative working capital adjustment shall be carried out on the average PLI of the final set of comparables Thus we direct the Ld.AO that no negative working capital adjustment shall be carried out in the light of above order of the Tribunal. Ordered accordingly. Comparable selection - HELD THAT:- Exclude L T Infotech Ltd. and Infosys Ltd. from the final list as present assessee is found to be a captive service provider who carries out software development services in accordance with the direction of its associated enterprises and is compensated on a cost+mark-up basis. Persistent Systems Ltd. company is mostly into product development and owns huge intellectual properties. It is also noted that there is no segmental details available in respect of the various systems of revenue earned by this company. Under such circumstances, we do not find it appropriate to be included in the final list. Infobeans Technologies Ltd.is not functionally comparable to that of the assessee. Tata Elxsi Ltd. company is into research and development activities and has developed various product design, industrial design etc. It is also noted that though this company is into software development services, in the process has developed various products that has been sold and revenue has been generated from sale of products. The segmental details in respect of software services rendered and product sale is not available in the financials of this company. It is noted that Hon ble Hyderabad Tribunal in case of Infor (India) Pvt. Ltd. [ 2023 (3) TMI 597 - ITAT HYDERABAD] for similar reason has excluded this company from the final list. Mindtree Ltd. Nihilent Ltd. companies are into various segments but segmental financials are not available it cannot be a valid comparable vis- -vis assessee which is a routine software development service provider working on cost + markup model, hence ordered to be excluded. Cygnet Infotech Pvt. Ltd. company is not captive service provider like that of assessee and is an independent entrepreneur owning intangibles. Under such circumstances, it is not appropriate to consider this comparable with that of assessee. We direct the Ld.AO/TPO to exclude this company from the final list. Cybage Software Pvt. Ltd. be excluded from the list of comparables basing on functionally not comparable diversified activities, product company, marketing services, presence of intangibles, lack of segmental data, abnormal margins, onsite revenue and non-contemporaneous data. Batchmaster Software Pvt. Ltd. comparable needs to be verified based on the annual reports and the filters in accordance with law. we remand this comparable back to the Ld.TPO for necessary verification and to consider the claim of assessee in accordance with law. Deduction u/s. 10AA - levy of interest u/s. 234A, 234B, 234C - AR submitted that assessing officer failed to include the deduction claimed even though the same was not disputed in the draft assessment order and there is an erroneous levy of interest even though assessee had filed the return of income before the due date - HELD THAT:- We note that all the above issues raised by assessee deserves necessary verification at the end of the Ld.AO. Assessee is directed to furnish details / evidences in respect of the same and the Ld.AO is directed to consider the claim of assessee in accordance with law.
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2024 (6) TMI 1283
Deduction u/s 80IB(10) - units where built up area exceeds the limit of 1000 sq. fts only when area of open sky balcony is added to built area - HELD THAT:- We observe that the Tribunal for the assessment years 2008-09 2009-10 in the common order [ 2016 (5) TMI 1555 - ITAT DELHI] allowed the claim for deduction u/s 80IB(10) in respect of flats excluding the balcony open to sky for the purpose of calculating the built-up area of the individual units Thus, we allow the claim for deduction u/s 80IB(10) of the Act in respect of those flats which area exceeds 1000 sq. fts excluding balcony open to the sky. The Assessing Officer is directed to verify the claim of the assessee after obtaining the details and allow deduction in view of the observations of the Tribunal in assessee s own case. Choice of Method of accounting - CIT(A) directing AO to accept Project Completion Method - assessee is neither following cash system nor mercantile system completely - HELD THAT:- As decided in the assessment years 2008-09 2009-10 [ 2016 (5) TMI 1555 - ITAT DELHI] Tribunal decided the issue in appeal in favour of the assessee by sustaining the order of the CIT(A) in holding that the project completion method adopted by the assessee is the right method for determining the profits. Ld. CIT(A) also held that the Assessing Officer should not have been disturbed the project completion method followed by the assessee regularly and there is no cogent reason to change the method. We further observe that the appeal of the Revenue has been dismissed by the Hon ble High Court [ 2017 (5) TMI 1824 - DELHI HIGH COURT] holding that there is no substantial question of law. Hon ble High Court held that the question whether the addition made by the Assessing Officer to the income of the Respondent for the relevant year based on percentage completion method was not correct as held by the ITAT stands answered in favour of the assessee and against the Revenue in PCIT Vs. Shipra Estate Ltd. Jai Krishan Estate Developers Pvt. Ltd [ 2016 (11) TMI 1758 - DELHI HIGH COURT] - Decided against revenue. Partly allowing the deduction u/s 80IB(10) as the project as a whole does not satisfy the conditions enumerated - two projects have been sanctioned by a common approval - HELD THAT:- This ground also decided in favour of the assessee in earlier years [ 2016 (5) TMI 1555 - ITAT DELHI] by the Tribunal following the decision of Vishwas Promoters Pvt. Ltd. [ 2012 (11) TMI 1117 - MADRAS HIGH COURT] and also Siddhivinayak Kohinoor Venture [ 2013 (10) TMI 1295 - ITAT PUNE] as held that the requirement of s. 80-IB (10) of the Act to the effect that project should be approved by a 'local authority' is fulfilled no sooner when the 'housing project' considered by an assessee is approved by a 'local authority'. Moreover, the expression 'housing project' is not defined in the Development Control Rules for PCMC i.e. the 'local authority' in the case before us and thus, the said enactment cannot be resorted to for the purpose of understanding the meaning of expression 'housing project' contained in s. 80-IB(10) of the Act. Therefore, so long as the claim of deduction is in relation to a 'housing project', which has been approved by the 'local authority', it would satisfy the requirement of s. 80- IB(10) of the Act. There is no dispute that the expression 'housing project' is not defined in the Development Control Rules for PCMC and therefore, the concept of housing project as sought to be understood by the AO based on the explanation of Chief Engineer. PCMC is not relevant for the purposes of s, 80IB (10) of the Act. Thus, the argument of the Revenue to the effect that since SWRH and S'1 projects have been approved by PCMC under a common approval, the two projects should be combined and considered as a single project for the purpose of s. under s. 80-IB(10) of the Act in our opinion is misplaced. Decided in favour of assessee. Deduction u/s 80IB(10) - conditions laid down in clauses (e) (f) of subsection u/s 80IB(10) of sub-section (10) of section 80IB of the Act are not fulfilled - HELD THAT:- As observed that even though there is a reference to clause (e) (f) of section 80IB(10) of the Act in the assessment order there is no specific finding by the Assessing Officer as to which flats are violative of clause (e) (f) of section 80IB(10) of the Act. We also observe that there is no separate addition or disallowance for violation of these clauses u/s 80IB(10) of the Act in the assessment order. Similarly, there is no specific adjudication on this aspect of the matter by the CIT(A). In such circumstances, we find no merit in the ground raised by the Revenue. Thus, this ground is rejected. Assessee appeal allowed.
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2024 (6) TMI 1282
Denial of foreign tax credit (FTC) - delay in filing Form No.67 as filled after the due date of filing the return of income - HELD THAT:- We note from the Form No.35 that the appeal was filed by the assessee before the CIT(A) against 143(1) of the intimation. As decided in [ 2022 (10) TMI 87 - ITAT BANGALORE ] wherein as held Rule 128(9) of the Rules does not provide for disallowance of FTC in case of delay in filing Form No.67; (ii) filing of Form No.67 is not mandatory but a directory requirement and (iii) DTAA overrides the provisions of the Act and the Rules cannot be contrary to the Act. Therefore, non-furnishing of Form No.67 before the due date u/s 139(1) of the Act is not fatal to the claim for FTC. Respectfully following the above judgment, we direct the AO to give credit for foreign tax credit as per Form No.67 filed on 22/10/2022 after due verification. Appeal of the assessee is allowed for statistical purposes.
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2024 (6) TMI 1281
Rejection of application filed in Form 10AB, u/s 80G(5)(iii) - application filled beyond limitation period - scope of period as within six months of commencement of the activities - CIT(E) held that date of commencement of activities in the assessee s case is 23.12.1974 and the assessee was supposed to file application in Form 10AB, u/s 80G(5) of the Act, within six months or up to 30.09.2022, whichever is earlier, however, the assessee failed to submit the application within the above said period. HELD THAT:- We note that the assessee- trust was incorporated on 23.12.1974 and started its activities from 23.12.1974. The assessee-trust has filed application in Form No.10AB, u/s 80G(5)(iii) of the Act on 30.09.2023 and as per Circular No. 8, the assessee-trust was supposed to file the application in Form No. 10AB, u/s 80G(5) of the Act on or before 30.09.2022, hence, there is a delay for 365 days (one year approx).Considering the limitation period as mentioned in section 80G(5)(iii) of the Act, as within six months of commencement of the activities, whichever is earlier which is practically impossible for the existing trusts applying for the first time for approval u/s 80G(5)(iii) of the Act, hence we note that there is ambiguity in the provisions of section 80G(5)(iii) of the Act, vis- -vis, CBDT circular No.6 /2023. Since the assessee- trust was incorporated on 23.12.1974 and therefore it was not possible to file the application within six months of commencement of its activities, as per the provisions of Section 80G(5)(iii) of the Act, therefore in these circumstances, we do not have any option but to condone the delay in filing Form 10AB, u/s 80G(5)(iii) of the Act and for that we rely on the judgment of the Co-ordinate Bench of ITAT Surat in the case of Vananchal Kelvani Trust [ 2024 (1) TMI 877 - ITAT SURAT] Therefore, we condone the delay in filing application in Form 10AB, u/s 80G(5)(iii) of the Act and remit the matter back to the file of Ld. CIT(E), with a direction to decide the application of assessee in accordance with law. We also direct the assessee to file the details and relevant documents, if any, before Ld. CIT(E), as and when required by Ld. CIT(E), for disposal of this appeal. For Statistical purposes, the appeal of the assessee is treated to be allowed.
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2024 (6) TMI 1280
Cancellation of registration granted U/s.12AA/ U/s. 12AB - Scope of Retrospective application of Section 12AB(4)(ii) introduced by Finance Act, 2022 - CIT (Central) cancelled registration invoking the provisions of section 12AB(4)(ii) invoking the provisions of section 12AB(4)(ii) with retrospective effect though this section was introduced by Finance Act, 2022 w.e.f. 1.4.2022 - HELD THAT:- We find force in the argument of ld. A.R. that in income-tax matters, law to be applied is the law in force in the assessment year unless otherwise stated or implied. In the present case, ld. PCIT is cancelling the registration granted u/s 12AA/12AB of the Act w.e.f. previous year 2020-21 relevant to assessment year 2021-22. In our opinion, the law as stated in the assessment year 2021-22 is to be applied and not the law as stood in the assessment year 2022-23. Thus, we are of the view that no retrospective cancellation could be made u/s 12AB(4)(ii) of the Act as it has been provided or is seen to have explicitly provided to have a retrospective character or intended. Therefore, without a specific mention of the amended provisions to operate retrospectively, no cancellation for the earlier years could be made. As decided in case of Auro Lab Ltd [ 2019 (1) TMI 1478 - MADRAS HIGH COURT ] PCIT has cancelled the registration under the new provisions of the Act i.e. 12AB(4)(ii) of the Act, which specifically provides that cancellation can be done for such previous year and all subsequent previous years, which makes it clear that the cancellation cannot be retrospective, therefore, in view of the above discussion, we are of the opinion that cancellation of registration with retrospective effect is invalid in these cases. Since the ld. PCIT invoked the provisions of section 12AB(4)(ii) of the Act, which has been introduced by the Finance Act, 2022 w.e.f. 1.4.2022 so as to cancel the registration with retrospective effect from assessment year 2018-19, which is bad in law. Also in the case of Heart Foundation of India [ 2023 (8) TMI 1063 - ITAT MUMBAI ] wherein held that registration granted u/s 12A of the Act dated 21.7.1989 cannot be cancelled by ld. PCIT (Central) vide order dated 6.3.2023 w.e.f. assessment year 2016-17, by invoking the provisions of section 12AB(4)(ii) - Appeals of the assessee are allowed.
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2024 (6) TMI 1279
Ex-parte order passed by CIT(A) - denial of natural justice - Addition u/s 69A - cash deposited in bank accounts - Revenue has argued that during the appellate proceedings the assessee submitted addition evidences which were sent to Assessing Officer for remand report, however, ld CIT(A) did not remind the Assessing Officer to send the remand report, and pass the order without providing sufficient opportunity to the Assessing Officer, which is against the principle of natural justice - HELD THAT:- CIT(A) did not take effort, at least to send the reminder letter to the Assessing Officer to submit remand report before him. We note that the Hon ble Supreme Court in M.S.Gill [ 1977 (12) TMI 138 - SUPREME COURT ] held The dichotomy between administrative and quasi-judicial function vis- -vis the doctrine of natural justice is presumably obsolescent after Kraipak (A.K. Kraipak vs UOI [ 1969 (4) TMI 103 - SUPREME COURT ] which makes the water-shed in the application of natural justice to administrative proceedings. The rules of natural justice are rooted in all legal systems and are not any new theology. They are manifested in the twin principles of nemo judex in parte sua (no person shall be a judge in his own case) and audi alterem partem (the right to be heard). It has been pointed out that the aim of natural justice is to secure justice. It is a settled principle of law that justice not only to be done, it is seen to be done. Therefore, we find merit in the arguments advances by ld DR for the Revenue to the effect that at least one reminder should be sent to the assessing officer to submit the remand report, however, ld CIT(A) failed to do so. Therefore, we are of the view that assessing officer did not get sufficient opportunity to submit remand report, hence it is against the principle of natural justice. We also find merit in the arguments of ld DR for the Revenue that if the order of ld CIT(A) is an ex-parte order and there is no adjudication on merit, then this Tribunal always send the matter back to the file of the ld CIT(A) for fresh adjudication on merit. Thus both these appeals, one relates to father wherein substantive addition was made and second relates to protective addition, which was made in the hands of son, should be remitted back to the file of ld CIT(A) for fresh adjudication - Appeals filed by the assessee are allowed for statistical purposes
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2024 (6) TMI 1278
Issuance of notice u/s 143(2) by non jurisdictional AO/ITO - As argued no notice u/s 143(2) was issued by the jurisdictional AO i.e., DCIT-2(1), Bilaspur who had framed and passed the assessment order - contention of Ld. Sr. DR that the notice u/s 143(2) of the Act was issued by the ITO Ward 1(1), Bilaspur, since the PAN of the assessee was lying with him at the time of issuance of notice - As soon as ITO 1(1) has realized that the amount of returned income filed by the assessee exceeds Rs. 15 Lacs, he transferred the said case to DCIT-1(1) Bilaspur HELD THAT:- Admittedly, in the present case the mandatory notice u/s 143(2) for initiating the assessment proceedings was issue by ITO Ward 1(1), Bilaspur vide notice dated 17.03.2016, who at relevant point of time was not vested with valid jurisdiction over the case of the assessee, since the cases having returned income above Rs. 15,00,000/- in the case of corporate assessee s are under the jurisdiction of ACIT/DCIT. The assessee s returned income was Rs. 21,44,050/-, which as discussed hereinabove is more than Rs. 15 Lac, therefore the valid jurisdiction was with ACIT/DCIT. In view of aforesaid CBDT s instructions referred to supra, followed by communication by the Ld. CCIT, Raipur, we hold that the first notice u/s 143(2) issued by the ITO Ward-1(1), Raipur, was clearly against the mandate of instructions issued and thereafter subsequently no notice u/s 143(2) was issued by the jurisdictional AO i.e., DCIT-2(1), Bilaspur who had framed and passed the assessment order. Objection raised by DR that the assessee has not objected to the jurisdiction of the ITO-1(1) within the stipulated time period as per provisions of section 124(3) of one month from the date on which the notice was served on the assessee - The issue has been duly considered in the case of Durga Manikanta [ 2023 (1) TMI 1099 - ITAT RAIPUR] held as the assessee s objection to the validity of the jurisdiction assumed by the Income- Tax Officer, Ward-2(2), Bhilai is by no means an objection to his territorial jurisdiction, but in fact an objection to the assumption of jurisdiction by him in contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, therefore, the provisions of sub- section (3) of Section 124 would not assist the case of the revenue. Thus admittedly, the first notice u/s 143(2) was issued by ITO Ward- 1(1), Bilaspur, on 17.03.2016, who was not vested with valid jurisdiction over the case of the assessee, therefore, the assessment framed on the foundation of such invalid notice is liable to be struck down. It is pertinent to mention that the DCIT, Circle-2(1), Bilaspur, who had framed the assessment have never issued any notice u/s 143(2) of the Act, therefore, the assessment order framed u/s 143(3) cannot survive on the basis of the first notice u/s 143(2). Thus assessment order passed u/s 143(3) by DCIT, Circile-2(1), Bilaspur, on the basis of proceedings initiated vide notice u/s 143(2) dated 17.03.2016 by ITO, W-1(1), Bilaspur, who at the relevant point of time was not vested with valid jurisdiction over the case of the assessee, cannot be sustained, thus, the same is liable to be quashed, and we do so. Appeal of assessee allowed.
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2024 (6) TMI 1277
Disallowance of delayed payment of PF ESI - reckoning of due date of payment - difference of due date for deposit of employees contribution is same as due date for deposit of employer s contribution - CIT(A) confirming the addition of employee contribution to PF/ESI U/s 36(1)(va) when the due date of making payment from 15 days from the close of the month is to be reckoned from the date of payment of salary/wages to employees and not from the date when salaries become due. HELD THAT:- The issue is covered by the decision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] . Accordingly, the entire amount will be disallowed. In our considered view that It has finally been held by Hon ble Apex Court there is clear distinction between employer s contribution which is its primary liability under law in terms of Section 36(1)(iv) and its liability to deposit amounts received by it or deducted by it from its employees in terms of Sec. 36(1)(va). The former part is the employers income, and the later retains its character as an income (albeit deemed), by virtue of Section 2(24)(x) and therefore, subjected to conditions spelt out by Explanation to Section 36(1)(va) i.e., depositing such amount received or deducted from the employee on or before the due date. This marked distinction has been clarified while interpreting the obligation of every assessee under Section 43B. If the same is not deposited as per mandate of Sec.36(1)(va), the deduction of the same would not be available to the assessee. Decided against assessee.
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2024 (6) TMI 1276
Addition made under excess receipts from contract works - As per AO assessee has designed the contract receipts to bring the unaccounted money into the books of account - CIT(A) deleted addition - HELD THAT:- Merely granting sub-contracts without any corresponding development activities will not legalize the unlawful amount paid by the said MEIL to the assessee in the guise of the running bills. Further nothing had been brought out on record that the State Government had permitted MEIL to grant sub- contract to assessee. Accepting the income disclosed by the assessee as legal income would be illogical, contrary to law and undermine the purpose of construction activities. In fact, it is difficult to comprehend that such activities were permitted to be carried out unabetted by the State Government and huge amount has allegedly been released to such contractors. The time has come where some suitable mechanism should be put in place by the State Government or other agencies against such contractors so that there should not be any siphoning or diversion of funds meant for development by any unscrupulous contractor. If today we decide this issue against the Revenue, by legalizing the payment merely because the contractor had submitted the confirmations of grant of contract then it would set a wrong precedent and there would not be any actual construction / development works would take place. Since in the present case, the Revenue authorities have failed to examine the details of the work contracts awarded and the payment made by the Government which are relatable to various stages of work contract, therefore, we remit back the matter to the file of Assessing Officer for fresh examination. Needless to say while examining the matter afresh, the Assessing Officer shall take the assistance from state Government Development Agencies and other statutory enforcement agencies to find out the terms of the allotment of the contract, execution, performance, quality control etc., and whether the assessee can divert the funds meant for development to its other activities namely, aircraft / solar power business. Thereafter, considering the inputs from the State Government and other enforcement agencies the Assessing Officer shall decide the matter in accordance with law after granting due opportunity of hearing to the assessee. In case, the Assessing Officer comes to the conclusion that no work has been executed by the assessee or only a small part of the work has been executed then to pass the assessment order accordingly. Thus, ground no.2 is allowed for statistical purposes. Addition towards STCG [Short Term Capital Gains] - the value of the shares deserves such a huge price, it is not clear why the earlier company has sold these shares at a meagre price of Rs.10/-.- CIT(A) deleted addition - HELD THAT:- Since we are remanding ground no.2 back to the file of Assessing Officer, therefore, it is deemed appropriate to remand this issue also to the file of Assessing Officer, to maintain the consistency.
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2024 (6) TMI 1275
Dismissal of appeal by CIT(A) ex-parte - non prosecution of the appeal by the assessee with cogent material evidences in support of the grounds of appeal raised - Reopening of assessment - Unexplained cash credit u/s 68 - assessee has not submitted any details and supporting evidences as called for - HELD THAT:- As observed from the records that the assessee was given several opportunities, but the assessee failed to respond to the notices for prosecution of his appeal with evidences and hence, the appeal was dismissed ex-parte by the Ld.CIT(A). When the assessee files appeal before the appeal authorities, the onus is on the assessee to adhere to the notices and appear before the authorities for prosecution of his case and controvert the findings of the revenue authorities with supporting material evidences. However, keeping in view the principles of natural justice, we are inclined to remit the matter back to the file of the Ld.CIT(A) and direct the Ld.CIT(A) to afford the assessee, another opportunity of being heard before the Ld.CIT(A). Appeal of the assessee is allowed for statistical purpose.
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2024 (6) TMI 1274
Non Grant of registration u/s 12AB from assessment year 2021-22 - Scope of amendment to Clause (ac) to section 12A(1) of the Act was inserted by TOLA - HELD THAT:- It is a fact that the assessee trust was already registered under section 12AA of the Act vide order dated 31.03.2018. The assessee has to file an application in Form 10A for fresh registration due to amendment to Clause (ac) to section 12A(1) of the Act was inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 ( TOLA ) with effect from 01.04.2021. The assessee has also filed as per amended laws in Form 10A within the due date as permitted by CBDT. We find that there is no justification for the ld. PCIT/CIT in not granting registration from the assessment year 2021-22. The ld. PCIT/ CIT has only granted registration from assessment year 2022-23 to assessment year 2026-27 by his order dated 06.04.2022. In our opinion, the ld. PCIT/CIT ought to have been granted registration from the assessment year 2021-22 onwards. The assessee was not able to file details of registration along with return of income filed by the assessee for the reason that no fresh registration was available with the assessee as per amended law. Thus, the CPC was not correct in denying benefit under section 11 of the Act to the assessee. PCIT/CIT, by following the observations of the CPC, denying the registration to the assessee from the assessment year 2021-22 was also not correct. We find that the assessee is entitled for grant of registration from the assessment year 2021-22. In view of the above, we set aside the order of the ld. PCIT/CIT dated 06.04.2022 in granting registration from 2022-23 to 2026-27 and remit the matter back to the file of the ld. PCIT/CIT with a direction to grant registration from the assessment year 2021-22 onwards and pass order accordingly. Appeal filed by the assessee is allowed for statistical purposes.
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2024 (6) TMI 1273
Addition of capital gain - transaction had not been declared in his return - status of property i.e. the property was actually owned by firm OR assessee s late father - claim of transfer of impugned property under partition of HUF - crux of assessee s submission was two-fold i.e. the property belonged to HUF, it was a case of partition of HUF and the distribution of assets by a HUF to its members on partition of HUF is excluded from transfer u/s 47(i) and the impugned property was basically a devolved property bequeathed by his deceased father by way of will - when assessee s late father had no legal title in the impugned property, how can assessee have? HELD THAT:- A careful reading of Partition-Deed reveals that the HUF had only movable property in the form of certain unsecured loans given to parties which were partitioned. The deed also makes it clear that there is no immovable property in HUF. Thus, the claim of transfer of impugned property under partition of HUF as projected by assessee before AO, stands unproved. It seems that realizing this eventuality, the assessee has himself mentioned on Page No. 2 of the application under Rule 29 family arrangement or partition , Family Settlement . Needless to mention that the Ld. AR, during hearing before us, has also not made any pleading qua the claim of partition of HUF . We may also mention here that even if we assume that there was a partition of HUF then also the exclusion from transfer u/s 47(i) is available only to HUF at the time of distribution of assets to its members on partition; the said exclusion is not available to a member who transfers his share/right in divided or undivided property. The act of transferring any share/right in property by a member to other members would be a posterior event to the partition of HUF and such act does not fit in section 47(i). Therefore, the assessee s claim of partition of HUF and thereby exclusion from taxation is an unproved claim besides being untenable in section 47(i); we are rejecting the same. Assessee executed sale-deed as part of family settlement and family settlement is not taxable under Income-tax - We find that the assessee has never claimed before lower-authorities the factum of family settlement although the assessee claimed partition of HUF . As stated earlier, the theory of family settlement has been pushed for the first time in the application under Rule 29 by mentioning family arrangement or partition , Family Settlement . Further, in the additional evidences filed under Rule 29, the assessee has filed Memorandum of Family Settlement alongwith Partition-Deed because the Partition-Deed , as mentioned earlier, does not support assessee s stand. Further, the Ld. AR for assessee has also refrained from making any pleading qua partition of HUF claimed by assessee before lower authorities. Instead, Ld. AR harped on family settlement . We may mention that in the reply filed to AO, the assessee mentioned that it was a case of forced sale to his family members but there also the assessee did not talk of family settlement , the assessee only tried to get out of taxability by claiming income of HUF or claiming partition of HUF. Now in such a situation, if we allow the claim of family settlement at this stage, it would amount to upsetting the whole proceeding done by lower-authorities and giving concession to assessee to set up a new case. We are afraid that we can do this. Therefore, without going into the merit of the additional evidence titled Memorandum of Family Settlement filed by assessee, we are straightaway rejecting the assessee s claim of family settlement itself. Rejected thus. Assessee s father/assessee did not have any right in the property which was owned by partnership firm and therefore there is no income earned by assessee even if a sale-deed has been executed - Here the case is such that the assessee s father was having 1/3rd share in partnership firm and after death of father, there were 6 legal heirs including assessee. Accordingly, the assessee sold his 1/6th share in 1/3rd share of assessee s father in undivided property of firm to his 3 brothers. To materialize this, the assessee executed a sale-deed and received actual consideration of Rs. 1,80,00,000/- from his brothers through cheques. This is a transaction inter-se between assessee and his brothers. The partnership firm is nothing to do with this transaction of sale. As admitted by Ld. AR for assessee, the firm continued even after death of assessee s father. Therefore, it seems that the entire property continued intact in the books of firm and remained unaffected by the transaction of sale made in-between the assessee and his brothers. Assessee as seller and his 3 brothers as purchasers have acted upon the sale-deed and essentially the assessee s right became right of brothers for a consideration. Therefore, when a de facto transaction of sale by assessee has been made and the assessee has received a hefty consideration of Rs. 1,80,00,000/- for transfer of his right, it would attract taxability and it is nothing to do with the provisions of section 14 of the Indian Partnership Act. The department is not asking to pay tax on any kind of notional transfer, the revenue s case is such that the assessee has made an actual sale which is taxable. Needless to mention that the assessee is also claiming to have utilized the sale consideration of Rs. 1,80,00,000/- for making investments in newer properties (it is a different point that the assessee claimed exemption u/s 54/54F on the basis of those newer investments but the AO has disallowed exemption on a different premise). Therefore, we do not find any merit in the second claim of assessee argued by Ld. AR too. - Decided against assessee. Unexplained cash deposits in bank a/c - HELD THAT:- We find that the assessee has filed a Cash-Book during proceeding before AO in which the entries of cash-inflow, outflow and opening-closing balances are adequately reflected. We also find that the Written-Note filed by Ld. AR also gives a summarized picture of Cash-Book to show that the assessee was having sufficient cash balance for deposit in bank a/c. Ld. DR for revenue though dutifully supported the orders of lower-authorities yet could not contradict or rebut the submissions made by Ld. AR. Hence, we are inclined to accept that the assessee was having sufficient cash balance for making deposits as is demonstrated by Cash Book. The addition made by AO is therefore not warranted. The same is hereby deleted. This ground is thus allowed.
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2024 (6) TMI 1272
Delay in deposit of Employees Contribution of Provident Fund and Employees State Insurance (PF ESI) - addition u/s. 36(1)(va) and 43B - HELD THAT:- The issue relating to grounds taken by the assessee have come to rest by the recent verdict of Chekmate Services Pvt. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT ] wherein it has been held that deduction u/s. 36(1)(va) in respect of delayed deposit of amount collected towards employees contribution to PF cannot be claimed when deposited within the due date of filing of return even when read with Section 43B of the Income-tax Act, 1961. - Decided against assessee.
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2024 (6) TMI 1271
Benefit of section 50C - Retrospective application of safe harbor limit of 5% - difference of the sale consideration and the market value [as per the ready reckoner rates] - Whether safe harbour limit of 5% as introduced by 3rd proviso to sub section (1) of section 50C is retrospective in operation, being curative of the unintended consequence ? - HELD THAT:- A co-ordinate Bench of this Tribunal in Maria Fernandes Cheryl [ 2021 (1) TMI 620 - ITAT MUMBAI] while negating the contention on behalf of the Revenue, found that the amendment was essentially brought about to cure unintended consequences of section 50(1) even in a bonafide situation, as sub section (1) of section 50 was essentially an anti-avoidance provision. While holding so the Bench had noted Circular 8 of 2018 by the Central Board of Direct Taxes (CBDT) viz. explanatory notes to the Finance Act 2018, which intended the rationalization of section 43CA, section 50C and section 56 of the said Act. It can thus be seen that the CBDT had acknowledged that there can be genuine cases, where there would be a variance between the stamp duty value and the actual consideration received in respect of similar properties depending upon variety of factors . It can be seen that such variance indeed occurs on the basis of location, dimension, access and other facilities which a particular property may enjoy. It is necessary to note that the stamp duty value or the ready reckoner value is essentially an estimate. Section 50C(1) is an anti-avoidance provision to prevent evasion of tax by showing lesser consideration in the transactions. However, after acknowledging the fact of variance between the stamp duty value and the actual consideration, the proviso was initially introduced by Finance Act 2018 from A.Y. 2019-20, introducing the safe harbour limit of 5%, which has been enhanced to 10% by Finance Act 2020. A co-ordinate Bench of the Tribunal has held that the subsequent amendment by Finance Act, 2020 would apply retrospectively. It is trite that the same principle would apply even in respect of the initial introduction of the proviso by Finance Act, 2018. It is necessary to emphasize that this Tribunal after holding that it was a curative amendment has held that it was retrospective in operation. While doing so this Tribunal has placed reliance on its earlier decision of Agra Bench in Rajeev Kumar Agarwal [ 2014 (6) TMI 79 - ITAT AGRA] held in view of the well settled legal position to the effect that a curative amendment to avoid unintended consequences is to be treated as retrospective in nature even though it may not state so specifically, the insertion of second proviso must be given retrospective effect from the point of time when the related legal provision was intended. In that view of the matter the appellant-assessee would be entitled to the benefit of section 50C of the Act. Consequently, the appeal succeeds. The impugned addition stands set aside.
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2024 (6) TMI 1270
Deduction u/s. 80P(2)(d) - interest received on fixed deposits in banks with any other co-operative society - HELD THAT:- There is no dispute that the assessee has received interest from various banks on deposits. Section 80P(2)(d) of the Act is very clear that interest received from the co-operative society is eligible for deduction. In the present case, the ld. AR could not bring to our notice that the interest received by the assessee is only from cooperative society and it is not carrying on business of banking as per RBI Regulations. This issue has been considered by the Hon ble Apex Court in the case of Kerela State Co-operative Agricultural Rural Development Bank Ltd. [ 2023 (9) TMI 761 - SUPREME COURT ] as examined in detail that what is co-operative Bank even if it is registered under the Cooperative Society Act. We remit this issue back to the file of AO for determination whether interest received by the assessee is only from co-operative society or co-operative bank as decided by the Hon ble Apex Court. If the AO finds that interest is received from deposits in the co-operative society, the assessee is eligible for deduction u/s. 80P(2)(d) of the Act on such interest received. If the AO finds otherwise, then assessee would be eligible for deduction of cost of funds as per the judgment of the Hon ble jurisdictional High Court in the case of Totgar Co-operative Sale Society [ 2015 (4) TMI 829 - KARNATAKA HIGH COURT ] Appeal by the assessee is allowed for statistical purposes.
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Customs
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2024 (6) TMI 1269
Habeas Corpus Petition - Detention on the ground of smuggling of gold of foreign origin from Srilanka - detention order served belatedly - defective translation of the word representation - HELD THAT:- This court is of the view that though there there is no hard and fast rule fixing any time limit for considering the representation, there should not be supine indifference, slackness or callous attitude in considering the representation. Any unexplained delay in the disposal of representation would be a breach of the constitutional imperative and it would render the continued detention impermissible and illegal. Timely and expeditious communication of grounds and disposal of representation in the cases of preventive detention has been dealt with elaborately by a Full Bench in Sarabjeet Singh Mokha vs. District Magistrate, Jabalpur and others [ 2021 (10) TMI 1378 - SUPREME COURT] where it was held that 'The delay by the State Government in disposing of the representation and by the Central and State Governments in communicating such rejection, strikes at the heart of the procedural rights and guarantees granted to the detenu. It is necessary to understand that the law provides for such procedural safeguards to balance the wide powers granted to the executive under the NSA.' A similar stand has been taken in the case of KAMLESHKUMAR ISHWARDAS PATEL VERSUS UOI. [ 1995 (4) TMI 283 - SUPREME COURT ], wherein a question arose for consideration as to when an order for prevention detention is passed by an officer especially empowered to do so by the Central Government or the State Government, is the said officer required to consider the representation submitted by the detenu and a Constitution Bench of the Apex Court has held ' Maybe that the detenu is a smuggler whose tribe (and how their numbers increase!) deserves no sympathy since its activities have paralysed the Indian economy. But the laws of preventive detention afford only a modicum of safeguards to persons detained under them and if freedom and liberty are to have any meaning in our democratic set-up, it is essential that at least those safeguards are not denied to the detenus.' In the case on hand, there is a delay of seven days on the part of the detaining authority in forwarding the representation of the petitioner to the sponsoring authority. A feeble stand has been taken on behalf of the respondents contending that the representation was made in Tamil requiring translation and the intervening two closed holidays and two Restricted holidays had caused the delay of a few days and the same cannot be a ground for interference. It may not be appropriate for the respondents to take a stand that the intervening restricted holidays had prevented the execution of their assignment to forward the representation. In the circumstances, this court is of the view that the delay on the part of the detaining authority in forwarding the representation of the petitioner to the sponsoring authority has not been properly explained and such delay is also a ground for interference by this court - this court is of the view that the least safeguards guaranteed by the Constitution are denied to the detenus and thereby, this court is of the view that the detention order is liable to be set aside. The Habeas Corpus Petition is allowed.
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2024 (6) TMI 1268
Refund of Special Additional Duty paid on import of goods - technical violation - unjust enrichment - refund application was rejected on the ground that the CA certificate has not stated as how the unjust enrichment was not applicable - HELD THAT:- It is the admitted fact that appellant had paid 4% SAD at the time of import and the appellant had also paid VAT as applicable while selling the goods. The appellant also complied with the condition No. 2(b) in the N/N. 102/2007 dated 14.09.2007 where it is stated that the importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in respect of the goods covered therein, no credit of the additional duty of customs levied under sub-section (5) of Section 3 of the Customs Tariff Act, 1975 shall be admissible. Facts being so, it is an admitted fact that the amount paid by the appellant as 4% SAD is not passed on to the buyers and the said aspect was confirmed by the statutory auditor of the appellant while issuing certificate on 05.06.2012. The issue is squarely covered by the decisions of the Tribunal relied by the appellant in KORADIA EXPORTS (INDIA) PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS (EXPORTS) , MUMBAI [ 2018 (6) TMI 944 - CESTAT MUMBAI] , it is settled that once CA certificate is produced and in the absence of any allegation of fraud or collusion, such certificate is sufficient to grant the refund claim. Refund should not be denied merely on technical violations. The impugned order rejecting the refund claim is not sustainable. Therefore, impugned order is set aside and the appeal is allowed.
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Service Tax
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2024 (6) TMI 1267
SVLDRS - Initiation of proceeding under Section 129 (2) (c) of the Finance Act, 2019 without a finding that any material particular furnished by the declarant in the declaration is false - correctness of the proceeding - voluntary disclosure under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS, 2019) - HELD THAT:- Under Section 129 (2) (c) of the SVLDRS, 2019, in a case of voluntary disclosure, where any material particular furnished in the declaration is subsequently found to be false within a period of one year of issue of discharge certificate, it shall be presumed as if the declaration was never made and proceedings under the applicable indirect tax enactment shall be instituted. Therefore, before instituting proceedings under the applicable indirect tax enactment, there has to be a finding, in a case of voluntary disclosure, that a material particular that was furnished in the declaration was false - The Authority should first come to a finding based on the declaration filed that a material particular (and not any particular) furnished in the declaration was false. In the impugned letter, the Authority only refers to Section 126 (1) of the Finance (No. 2) Act, 2019 read with Rule 6 (1) of the SVLDRS, 2019 and Section 129 (2) (c) of the SVLDRS, 2019 read with Clause 8 of a Circular and straight away proceeds to say in view of the above you are requested to provided the following documents. As there is no finding that a material particular in the declaration was false and which was that material particular, the impugned communication dated 9th November 2020 is quashed and the communication dated 13th November 2020 is followed. Petition disposed off.
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2024 (6) TMI 1266
Refund of service tax - constitutional validity of Rule 10 of the Place of Provision of Service Rules, 2012 - ultra vires Section 66B read with Section 64 and Section 65B (52) and Section 66C (1) of the Finance Act, 1994 or not - levy of service tax on the services by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India - HELD THAT:- This Court by judgment and order in MOHIT MINERALS PVT LTD VERSUS UNION OF INDIA 1 OTHER [ 2020 (1) TMI 974 - GUJARAT HIGH COURT ] declared the Notification No. 8/2017 Integrated Tax (Rate) dated 28.06.2017 and the Entry No. 10 of the Notification No. 10/2017 Integrated Tax dated 28.06.2017 as ultra vires the integrated Goods and Services Tax Act, 2017 on the ground that the same lacks legislative competency. The judgment delivered by this Court is also upheld by the Honourable Supreme Court. This Court, in case of Sai Steel Ltd. Ors. Vs. Union of India [ 2019 (9) TMI 1315 - GUJARAT HIGH COURT ] held that ' The Notification Nos. 15/2017-ST and 16/2017-ST making Rule 2 (1) (d) (EEC) charge Notification No. 30/2012-ST is struck down as ultra vires Sections 64, 66B, 67 and 94 of the Finance Act, 1994; and consequently the proceedings initiated against the writ applicants by way of show cause notice and inquiries for collecting service tax from them as importers on sea transportation service in CIF contracts are hereby quashed and set aside with all consequential reliefs and benefits.' The respondents are directed to refund service tax already paid by the petitioner pursuant to the N/N. 15/2017, which is declared ultra vires as observed in case of Sai Steel Ltd. - Petition allowed.
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2024 (6) TMI 1265
Levy of service tax - product registration fee paid by the appellants to the foreign regulatory authorities for sale of product to foreign markets - HELD THAT:- The service of approval of medicaments to be sold in those foreign countries also undertaken in the foreign country. The issue that whether statutory fees paid to the foreign regulatory authority is liable to service tax in the hands of the recipient of so called service has been decided in various judgments. In the judgment of Sidmak Laboratories India Pvt Ltd [ 2023 (11) TMI 614 - CESTAT NEW DELHI ] considering the identical facts and the legal issue involved in the present case, the Tribunal held that ' no service tax was payable on the amounts which the appellants had paid to US FDA to obtain their approval for export of their drugs.' From the above decision it can be seen that the facts and legal issue involved in the present case and the case cited above are absolutely identical, therefore, the ratio of the above decision is applicable in the present case. The demand of service tax in the present case is not sustainable - the impugned order is set aside - Appeal allowed.
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2024 (6) TMI 1264
Levy of service tax - cleaning services - services provided by the appellant to Guru Gobind Singh Super Thermal Plant under the head of cleaning services - period 16.06.2005 to 31.03.2010 - time limitation. Levy of service tax - HELD THAT:- From the definition of cleaning activity, it is clear that the cleaning activity would cover cleaning of commercial or industrial building or premises thereof for factory, plant or machinery, tank or reservoir of such commercial or industrial building or premises - the argument of the Ld. Counsel that the thermal plant is the property of the Punjab Government and being a public utility concern no service tax is leviable, does not have the force, in view, CBEC s circular No. 80/10/2004-ST., dated 17.09.2004. The Tribunal in the case of M/S. B.M. CHAPALKAR AND COMPANY VERSUS COMMISSIONER OF CENTRAL EXCISE CUSTOMS, NASHIK AND VICE-VERSA [ 2016 (2) TMI 844 - CESTAT MUMBAI ] held that ' On perusal of agreement entered into with Nasik Tharmal Power Station, we find that the Cleaning services which were expected out of appellant is very clear that there is no doubt the appellant has been awarded contract for Cleaning of plant machinery, buildings, ete. At the same time, we also find that the contract which is awarded to the appellant, also has elements of loading and unloading of Coal, to our mind, value in respect of such loading and other activities may not be covered under the category of Cleaning Agency Services.' The appellants are liable to pay service tax on cleaning services rendered to Guru Gobind Singh Super Thermal Plant. Extended period of limitation - HELD THAT:- To sustain a show cause notice beyond the normal period of limitation and up to a period of five years, it has to be established that the service tax has not been paid or short-paid, by reasons of either fraud or collusion or willful misstatement or suppression of facts or contravention of any provision of the Finance Act or the Rules made there under, with intent to evade payment of tax. Further, it is found that in the present case the appellant was under a bonafide belief that service tax is not payable being services provided to the Government of Punjab and not to any commercial organization - the issue of interpretation of the legal provision is involved and therefore invocation of extended period of limitation is not warranted in the present case. The demand of service tax only for the normal period confirmed and matter remanded back to the original authority to quantify the demand of service tax on cleaning services for the normal period along with interest; invocation of extended period of limitation is set aside. Hence, the penalty is also set aside. Appeal allowed by way of remand.
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Central Excise
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2024 (6) TMI 1263
CENVAT Credit - services not related to the manufacture of final products - interpretation of expression in or in relation to manufacture of goods - HELD THAT:- It is found that the expression activities in or in relation to manufacture postulates activities which are integrally connected to the manufacture of the goods. The Hon ble Supreme Court in M/S. COCA COLA INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, PUNE-III [ 2009 (8) TMI 50 - BOMBAY HIGH COURT ], held ' input services used in relation to setting up, modernization, renovation or repairs of a factory will be allowed as credit, even if they are assumed as not an activity relating to business as long as they are associated directly or indirectly in relation to manufacture of final products and transportation of final products upto the place of removal.' It is found that all the services have got a nexus to the manufacturing process and hence input credit on the same cannot be denied. The services are not used primarily for personal use or consumption of any employee in their individual capacity. Most of the amounts involved are less than Rs.10,000/-. Further, there has been a frequent change in the definition of inputs over a period of time and hence the legal issue was complex with different interpretation given by different forums from time to time. The issue has been decided on merits in favour of the appellant and hence the impugned order merits to be set aside - Appeal allowed.
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2024 (6) TMI 1262
Clandestine removal of goods - personal penalty of the key management personnel of the Appellant company - loose sheet glass valued not recorded in the RG-1 register - production quantity and sales quantity found to be at variance with RG-1 and RT-12 figures - HELD THAT:- The Ld. Commissioner in the impugned Order has noted that the Appellants have not furnished its response to certain facts which weigh heavily against it. Before dealing with the observations made by the Ld. Commissioner, we take note of the fact that the Appellants had duly filed its response to the four issues raised in the impugned Order and therefore the observation that the Appellants have not furnished any response on the four issues is factually incorrect. The suppressed quantities of glass sheets clandestinely removed have been determined by estimating production based on maximum installed capacity and such maximum installed capacity has been determined based on the statement of three employees of the Appellants. The suppressed quantities alleged to be clandestinely removed have been computed by deducting such production from the figures as reported by the Appellants in its RT-12 returns during the period in dispute. The allegation of clandestine removal and suppression of facts on the ground of non-recording of loose glass sheet at the stage of production itself miserably fails. Had the Department also not carried and agreed to the view that the RG-1 stage for loose glass sheets would be the point when such loose sheets are decided to be cleared as such, there was no need to withdraw the letter dated 01.01.1985 by a subsequent letter dated 09.09.1994 which was after the date of the search. No evidence of unaccounted purchases of inputs have been brought on record by making enquiries from the suppliers of such material. There is no evidence of any unaccounted sales which has been brought on record by making enquiries from either the transporters or the buyers of alleged clandestinely removed glass sheets. Interestingly, the SCN notes that enquiries had been initiated against the transporters but no finding, much less an adverse finding, has been noted in the SCN. Even no unaccounted payments to the transporters have been alleged - revenue has utterly failed to discharge the burden of proof by bringing on record any evidence of any kind to substantiate the charge of clandestine removal. Considering the very nature of the industry and the manufacturing process detailed by the Appellants, factors such as normal breakage and thickness of the glass produced have been completely ignored - it is held that maximum installed capacity determined is without any basis whatsoever and is therefore, liable to be rejected. The impugned Order is thus set aside - appeal allowed.
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2024 (6) TMI 1261
CENVAT Credit availed on the imported goods - manufacturing activity or not - manufacture and clearance of PVC Tin Stabilizer, PVC Stabilizer, Calcium Zinc PVC Stabilizer, Oxidized Veg. Oil (Epoxy Plasricizer) - HELD THAT:- Even without deciding the issue whether the activity carried out by the appellant is amount to manufacture or otherwise. This case can be decided on other issue. It is found that the appellant have made a submission that even though there is no manufacture but the assessee has paid the excise duty, hence, the Cenvat credit on the imported goods cannot be denied. From the judgment in AJINKYA ENTERPRISES VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III [ 2013 (6) TMI 610 - CESTAT MUMBAI ] and COMMISSIONER OF CENTRAL EX. CUS., SURAT-III VERSUS CREATIVE ENTERPRISES [ 2008 (7) TMI 311 - GUJARAT HIGH COURT ] , it can be seen that even though the activity does not amount to manufacture but if the assessee has chosen to pay the excise duty on the processed goods (whether it amount to manufacture or otherwise). The assessee cannot be denied the Cenvat credit. In the present case, it is seen that the appellant have already paid the amount in the form of excise duty which is equivalent to Cenvat credit availed. For this reason also the payment of duty by the appellant is as good as payment of Cenvat credit availed on the imported goods. Therefore, no show cause notice was required to be issued hence, the appellant had already made good by paying the duty which is nothing but reversal of Cenvat credit taken on the imported goods. Accordingly, neither any show cause notice was required nor the consequential interest and penalties is required to be recovered. The assessee can take the Cenvat credit even though their activity does not amount to manufacture and clear the same on payment of duty. Therefore, the entire transaction of the appellant is squarely covered by the provision of Rule 16 of Central Excise Rules, 2002 therefore, for this reasons the contention of the department that since no manufacturing activity is involved appellant is not entitled for the Cenvat credit, clearly fails on that basis. The entire proceeding of confirmation of demand, interest and penalty is not sustainable. The impugned order is not sustainable and is set aside - appeal allowed.
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2024 (6) TMI 1260
CENVAT Credit - credit denied only on the basis of board circular 783/16/2001-CX dated 28.04.2004 - undervaluation of asset - it is alleged that the excise duty on inputs procured is charged as expenditure to cost of raw material consumed , thereby resulting in dual benefit - HELD THAT:- Form the circular, it can be seen that the circular only give a guideline to the field formation that in case of any expenditure claimed on account of Cenvat credit, the same will amount to double benefit one in Cenvat credit and other in income tax. Accordingly, the said fact may be intimated to the income tax department. It is found that the board circular does not stipulate that in such situation the Cenvat credit should be denied - even the board circular does not suggest that in such situation the availment of Cenvat credit is incorrect illegal or in contravention to any of the provision of Cenvat Credit Rules, 2004. Therefore, in these circumstances, the department could not make out any case that the appellant is not eligible for Cenvat credit. From the decision in SHREE PANDURANG SSK LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III, [ 2017 (2) TMI 567 - CESTAT MUMBAI] , it can be seen the case of the department was the appellant have taken the double benefit, one by taking Cenvat credit in the Cenvat account and other by capitalizing the input service whereby they can get income tax benefit. Discarding the view of the department, the Tribunal held that when the Cenvat credit was taken in conformation to the Cenvat Credit Rules, 2004 effect given in the income tax will not affect the eligibility of the Cenvat credit. The appellant are entitled for the Cenvat Credit - the impugned order is set aside - appeal allowed.
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Indian Laws
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2024 (6) TMI 1259
Dishonour of Cheque - Jurisdiction of court - inquiry under Section 202 of the Cr.P.C. not conducted - maintainability of application under Section 239 of the Cr.P.C. - rejection of applications filed by the petitioner for production of statement of bank accounts of the respondent No. 2 - applications filed for comparison and verification of signature and Handwriting of the petitioner on disputed cheques and each of the page of agreement executed between the petitioner and respondent No. 2 rejected - cheques issued as security - merge of the charge and clubbing of all the cases. Inquiry under Section 202 of the Cr.P.C. - HELD THAT:- The inquiry under Section 202 of the Cr.P.C. was not conducted. The remedy to file revision is available to the petitioner. However, revisions were not filed against said orders of issue process by the petitioner before Sessions Court. The applications for quashing of the complaints u/ s 482 of the Cr.P.C. are not filed. However, quashing is prayed in the writ petitions. Therefore, directly filing of writ petitions against the orders of issue process are not maintainable. Maintainability of application under Section 239 of the Cr.P.C. - HELD THAT:- The applications filed for discharge of the petitioner are not maintainable. The said applications were rightly rejected by the Trial Court. No interference is warranted in these orders. Application for production of statement of bank accounts of the respondent No. 2 were rejected - HELD THAT:- The petitioner has ample opportunity to lead that evidence. The Court can also compare signatures on it under Section 73 of the Indian Evidence Act. The Court expressed that it will compare signature. It is surprising to note that once issuance of cheques is admitted by the petitioner, how the signature on it can be challenged. There is no scope for interference in these well reasoned impugned orders. Applications filed for comparison and verification of signature and Handwriting of the petitioner on disputed cheques and each of the page of agreement executed between the petitioner and respondent No. 2 rejected - HELD THAT:- It is admitted facts that cheques were issued as security. It means signatures are admitted. It is matter of evidence. Those applications were filed to support the applications filed for discharge. The discharge applications were held not maintainable as discussed above. The Trial Court held that petitioner - accused will have opportunity to lead evidence. Application is premature. Thus, petitioner can file the application of same nature after the evidence of respondent No. 2 is over, if necessary - The Trial Court has rightly exercised judicial discretion and interference is not warranted in the impugned orders. Therefore, well reasoned orders passed on those applications require no interference. Applications filed for merge of the charge and clubbing of all the cases together rejected - HELD THAT:- The charges were not framed in those cases. In summary cases, charge cannot be framed. It is only statement of accusation to be confronted to the accused and not charge. Therefore, no question of merging of charge arises. Such applications are not maintainable. As per Section 408 of the Cr.P.C. the application must be moved before the Sessions Court for clubbing those cases. Those applications were also not maintainable before trial court. Applications filed for dismissal of complaint for want of jurisdiction, rejected - HELD THAT:- The revisions before Sessions Court against the orders of Trial Court regarding issue of jurisdiction are to be filed. Those were not filed by the petitioner. In case of rejecting the application challenging the jurisdiction of the court to proceed with the trial, even though it may not be final in one sense, is surely not interlocutory order, substantially it is a final order - The writ petitions are not maintainable against the said orders. In case of Ahuja Dongre relied upon by the petitioner, the revision was filed before the Sessions Court and that Judgment was challenged. In this case, revision is not filed. Thus, it is not helpful to the petitioner. The revision is not filed. Therefore, case of Sayed Mohammed, cited supra by the petitioner is not relied upon. The applications for interim compensation in each case were granted by the Trial Court. All these orders granting interim compensation passed u/s 143-A of the N.I. Act are well reasoned. There is no any illegality and perversity to interfere in it. The revisions were not preferred against those orders u/s 397 Cr.P.C. Therefore, the writ petitions are not maintainable against those orders. The arguments of learned Advocate for petitioner are not accepted in all writs. All the writ petitions are dismissed.
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