TMI Tax Updates - e-Newsletter
July 15, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Highlights / Catch Notes

GST

• Central Govt exempts Unit Run Canteen supply of goods under 2202 heading to authorized customers from GST Compensation Cess, effective 15/07/2024.

  Visit to Get Source

  ---

• Railways exempts platform tickets, waiting rooms, battery cars, inter-zonal services, SPV infrastructure usage & maintenance. Accommodation up to Rs 20k/month for >= 90 days exempted.

  Visit to Get Source

  ---

• Exempts supply of farm produce > 25kg/25L from pre-packaged labelling norms under Legal Metrology Act from 15/7/24.

  Visit to Get Source

  ---

• Cartons, boxes, milk cans, solar cookers get 6% GST. Cartons (non-paper), milk cans (non-iron/steel), utensils (aluminium) at 9%. Pre-packaged labelling for agriculture products.

  Visit to Get Source

  ---

• HC quashed order for violating natural justice. Case remanded for fresh order after petitioner deposits 10% tax & files reply in 30 days.

  Visit to Get Source

  ---

• Principles of natural justice violated due to SCN non-uploading on portal. Despite emails, confusion persisted due to redesign. Permitted to challenge order within 30 days by filing appeal.

  Visit to Get Source

  ---

• Order upheld, pay tax demand & interest. Fresh orders on penalty in 6 months, Penalty may drop if 53rd GST Council norms applied.

  Visit to Get Source

  ---

• Order u/s 107 set aside. Remanded to treat deposit as per notification. Hear appeal within 8 weeks, allow personal hearing.

  Visit to Get Source

  ---

• Tax demand set aside for lack of proper notice. Petitioner gets chance to contest after remitting 10% disputed amount.

  Visit to Get Source

  ---

Income Tax

• Interest paid to LIC Mutual Fund on unsecured debentures allowable, not disallowed u/s 43B as it's not a Public Financial Institution.

  Visit to Get Source

  ---

• Notice by non-Faceless Officer for escaped income invalid. Faceless assessment mandatory. Officer ignored submissions on project completion method. Assessee wins appeal.

  Visit to Get Source

  ---

• Impugned notice quashed due to lack of sanction for reopening assessment beyond 3 years, violating Section 151(ii). Notification can't override statute.

  Visit to Get Source

  ---

• Notices by JAO instead of FAO invalid & bad-in-law u/s 151A. Non-compliance with Section 151A vitiates proceedings u/s 148.

  Visit to Get Source

  ---

• Incorrect claim doesn't amount to inaccurate particulars. Separate books, own capital investments & direct expenses debited. No concealment. No Penalty.

  Visit to Get Source

  ---

• Unexplained investment share capital/premium sans incriminating material. Conditions u/s 153C not met. Search didn't yield documents. Notice invalid.

  Visit to Get Source

  ---

• Services rendered outside India, payment made abroad. No PE of foreign co. in India. Fees for technical services utilized for earning income from foreign source.

  Visit to Get Source

  ---

• TDS 194H/192 - Commission to directors, deducted TDS u/s 192 as salary - No addition u/s 40(a)(ia) for non-deduction of TDS on commission

  Visit to Get Source

  ---

• Registration denied for non-compliance with state trust law. Charitable institutions must follow applicable state laws.

  Visit to Get Source

  ---

• Offshore Supply Contracts receipts not taxable u/s 44BBB. Functions post equipment sale irrelevant for business income chargeability.

  Visit to Get Source

  ---

Customs

• New entries in customs duty exemption notification: 5% duty on aircraft parts, exemption for RAMA buoys till 2026. Re-export & bond for exemption.

  Visit to Get Source

  ---

• Notification amends anti-dumping duty on 'Flexible Slabstock Polyol' imports from Singapore, changing producer's name to Shell Singapore Pte. Ltd.

  Visit to Get Source

  ---

• Customs dept's vindictive conduct restricting exit despite acquittal is abuse of power. Court grants exit & ₹10L compensation for trauma.

  Visit to Get Source

  ---

• Valuation case: Polyurethane Sealant import value enhanced 5x solely on acceptance letter. Held: Insufficient evidence for enhancement as per CMR Nikkei case.

  Visit to Get Source

  ---

• Broker's license revocation overturned, penalty upheld for misdeclaration entries despite due diligence. Deterrent penalty for future compliance.

  Visit to Get Source

  ---

Corporate Law

• Arbitral order lacks jurisdiction, misreads tax laws, violates self-incrimination. Accounts' veracity dispute unresolved. Order may render proceedings infructuous.

  Visit to Get Source

  ---

IBC

• Certified copy essential for appeals, not free copy. Tribunal clarifies in line with precedents.

  Visit to Get Source

  ---

• Resolution plan approved by CoC can't be challenged by individual homebuyer. Homebuyers are financial creditors under IBC & RERA. Different payment schemes for creditor categories valid.

  Visit to Get Source

  ---

SEBI

• BSE recognized as RAASB & IAASB for 5 years. Bye-laws, SOPs, FAQs for adoption. Revised RA fees from July 25, 2024. Fee neutral.

  Visit to Get Source

  ---

Service Tax

• Training exempt pre-2010, works contract benefit allowed, mandap service demand upheld, foreign training non-taxable, consultancy demand wrong, grants non-taxable. Penalties set aside.

  Visit to Get Source

  ---

Central Excise

• Tribunal upheld input tax credit eligibility for services utilized in manufacturing, rejecting vague allegations without specific objections.

  Visit to Get Source

  ---

• Refund: Unjust enrich Invoices - didn't mention duty. Stock transfers between units. Appellant bore duty burden. Price difference due to gold rate. Refund eligible.

  Visit to Get Source

  ---

Articles

• FILING OF NEW FORMS FOR LIQUIDATION PROCESS
• LITIGATION MANAGEMENT IN GST REGIME (PART -10)
• PROVISIONAL LIQUIDATOR (WINDING UP BY THE TRIBUNAL – IV)
• No GST liability on any portion of income – ITC reversal not required in all cases

Notifications

• Customs

• 14/2024 - dated 12-7-2024 - ADD
  Seeks to amend Notification No. 14/2020-Customs (ADD) dated 9th June, 2020 in order to change the name of the producer viz. “ Shell Eastern Petroleum (Pte) Ltd ” to “Shell Singapore Pte. Ltd.”, in pursuance of DGTR recommendation .

  ---

• 28/2024 - dated 12-7-2024 - Cus
  Seeks to amend notification No. 50/2017-Customs to give effect to the recommendation of the 53rd GST Council meeting.

  ---

• 27/2024 - dated 12-7-2024 - Cus
  Seeks to provide exemption from Compensation Cess leviable on imports by SEZ unit or developer for authorised operations.

  ---

• GST

• 04/2024 - dated 12-7-2024 - CGST Rate
  Seeks to amend Notification No. 12/2017-Central Tax (Rate), dated the 28th June, 2017 - Exempted supply of services

  ---

• 03/2024 - dated 12-7-2024 - CGST Rate
  Seeks to amend Notification No. 2/2017-Central Tax (Rate), dated the 28th June, 2017 - Exemption on intra-State supplies of goods

  ---

• 02/2024 - dated 12-7-2024 - CGST Rate
  Seeks to amend Notification No. 1/2017-Central Tax (Rate), dated the 28th June, 2017 - rates of CGST @ 2.5%, 6%, 9%, 14%, 1.5% and 0.125% on Supply of Goods

  ---

• 01/2024 - dated 12-7-2024 - GST CESS Rate
  Central Government exempts supply of goods falling under the heading 2202 by a Unit Run Canteen (URC) to authorised customers, from the whole of the Goods and Services Tax Compensation Cess leviable thereon under section 8 of the Goods and Services Tax (Compensation to States) Act, 2017

  ---

• 04/2024 - dated 12-7-2024 - IGST Rate
  Seeks to amend Notification No. 9/2017-Integrated Tax (Rate), dated the 28th June, 2017 - Exemptions on supply of services.

  ---

• 03/2024 - dated 12-7-2024 - IGST Rate
  Seeks to amend Notification No. 2/2017-Integrated Tax (Rate), dated the 28th June, 2017 - Exemption from IGST on inter-State supplies of goods.

  ---

• 02/2024 - dated 12-7-2024 - IGST Rate
  Seeks to amend Notification No. 1/2017-Integrated Tax (Rate), dated the 28th June, 2017 - Rates of IGST @ 5%, 12%, 18%, 28%, 3% and 0.25% on supply of goods

  ---

• 04/2024 - dated 12-7-2024 - UTGST Rate
  Seeks to amend Notification No. 12/2017-Union Territory Tax (Rate), dated the 28th June, 2017

  ---

• 03/2024 - dated 12-7-2024 - UTGST Rate
  Seeks to amend Notification No. 2/2017-Union Territory Tax (Rate), dated the 28th June, 2017

  ---

• 02/2024 - dated 12-7-2024 - UTGST Rate
  Seeks to amend Notification No. 1/2017-Union Territory Tax (Rate), dated the 28th June, 2017

  ---

Circulars / Instructions / Orders

• SEBI - SEBI/HO/MIRSD/MIRSD-POD-1/P/CIR/2024/101 - dated 12-7-2024
  Recognition of BSE Limited as Research Analyst Administration and Supervisory Body (RAASB) and Investment Adviser Administration and Supervisory Body (IAASB)

Case Laws:

• GST

• 2024 (7) TMI 750
  Maintainability of petition - appeal is provided under Section 107 of the GST Act against impugned order - no reply was filed by the petitioner and no opportunity of personal hearing was demanded by the petitioner - violation of principles of natural justice - HELD THAT:- It is found that there is no such pleading on record that the petitioner had also filed his reply to the show cause notice issued under Section 73 (1) of SGST Act or even prayed for time to be given to him to reply to the said show cause notice. Having placed reliance upon Judgment rendered in Eveready Industries India Ltd [ 2024 (6) TMI 162 - ALLAHABAD HIGH COURT ] passed by this Court, the court is of the considered opinion that in the said case, the petitioner Eveready Industries India Ltd. had submitted detailed reply to the show cause notice issued under Section 73 and had also urged for personal hearing which was denied. This court having gone through the instructions as also the Judgment rendered in Eveready Industries India Ltd is of the opinion that even if no date, time or place of hearing is indicated in the notice issued under Section 73, it was the duty of the assessee to file his reply to the show cause notice which was admittedly received by him. He chose to ignore the show cause notice. In such cases, the plea regarding denial of opportunity of hearing and violation of principles of natural justice cannot be countenanced. This writ petition is dismissed in view of statutory remedy available under Section 107 of the Central GST Act.

  ---

• 2024 (7) TMI 749
  Violation of principles of natural justice - explanation that was given by the petitioner during the course of personal hearing has not been discussed in the operative portion of the impugned order - HELD THAT:- The fact remains that the petitioner has discharged substantial portion of the demand of Rs. 1,15,98,246/- by depositing Rs. 68,09,076/- for the assessment years 2018-19 and 2019-20. The petitioner has not given proper explanation by way of reply. Only during the course of personal hearing, some attempt was made by the petitioner. However, there are no proper discussion in the impugned order. The case is remitted back to the respondent by quashing the impugned order subject to the petitioner depositing 10% of the disputed tax to pass a fresh order on merits and in accordance with law. The impugned order, which stands quashed, shall be treated as addendum to the show cause notice issued to the petitioner earlier. The petitioner shall file a consolidated reply with a period of 30 days from the date of receipt of a copy of this order. Petitio allowed by way of remand.

  ---

• 2024 (7) TMI 748
  Challenge to assessment order - mismatch between the taxable turnover reported in GSTR 9 and GSTR 3B - HELD THAT:- As regards the mismatch between the taxable turnover reported in GSTR 9 and GSTR 3B, it was recorded that the differential turnover is Rs. 1,17,31,242/-. Instead of treating such differential turnover as taxable supply and computing tax thereon at the applicable rate, it appears that tax of Rs. 1,17,31,242/- has been apportioned between CGST and SGST. By considering the petitioner's reply to the show cause notice, defect no.2, defect no.4, defect no.6, defect no.7 and defect no.8 were dropped. As regards defect no.1, the petitioner has placed on record the annual return whereby the mismatch between GSTR 1 and GSTR 3B was reconciled by reflecting the value of credit notes. As regards defect no.5, the petitioner shall pay the interest, as agreed to, unless waiver is granted in the interregnum pursuant to the recommendations of the GST Council. As regards defect nos.9 and 10, the petitioner has agreed to remit 10% of the disputed tax demand as a condition for remand. The impugned order dated 29.12.2023 is partly set aside only in so far as defect no.1, defect no.3, defect no.9 and defect no.10 are concerned subject to the petitioner remitting 10% of the disputed tax demand as regards defect no.9 and defect no.10 within 15 days from the date of receipt of a copy of this order. Upon being satisfied that 10% of the disputed tax demand, as stated above, was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within a period of three months from the date of receipt of a copy of this order. Petition disposed off.

  ---

• 2024 (7) TMI 747
  Seeking grant of interim order - HELD THAT:- There is no scope for granting any interim order and the correctness of the order can be tested only after the affidavits are being filed, for which direction has already been issued by the learned Single Bench - Hence, no ground has been made out to interfere with the impugned order. Appeal dismissed.

  ---

• 2024 (7) TMI 746
  Violation of principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax proposal on merits - HELD THAT:- In the impugned order, the first respondent concluded that the petitioner had failed to explain the unreconciled turnover on the basis that the petitioner had not properly reported the adjustment of a sum of Rs. 23 Crores against receivables. This aspect was not raised in the show cause notice or in the subsequent request for clarifications. Nonetheless, it should be recognized that the petitioner was called upon to explain the total unreconciled turnover of Rs. 80,63,40,950/- and, therefore, cannot be completely absolved of responsibility for not providing a proper clarification on this aspect. On instructions, learned counsel for the petitioner agrees that the petitioner would remit 10% of the disputed tax demand as a condition for re-consideration. The impugned order dated 18.03.2024 is set aside on condition that the petitioner remits 10% of the disputed tax demand within fifteen days from the date of receipt of a copy of this order. Within the said period, the petitioner is permitted to submit an additional reply along with supporting documents - petition disposed off.

  ---

• 2024 (7) TMI 745
  Violation of principles of natural justice - order challenged on the ground of non consideration of the petitioner's reply - wrongful availment of input tax credit - HELD THAT:- The respondent did not closely examine the documents submitted by the petitioner, such as invoices, e-way bills, etc. Instead, a conclusion was drawn that the petitioner failed to establish movement of goods. In these circumstances, re-consideration is necessary. The impugned order dated 17.08.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to within fifteen days from the date of receipt of a copy of this order and the matter is remanded for re-consideration. Within the said period, the petitioner is permitted to submit additional documents, if any - petition disposed off.

  ---

• 2024 (7) TMI 744
  Violation of principles of natural justice - impugned order has been passed without considering any of the contentions raised by the petitioner pursuant to the SCN - HELD THAT:- It is noticed that the petitioner in his reply to the SCN has set out the ledger account in respect of the supplies received from eight named suppliers along with the bills. However, the impugned order does not refer to the same or provides any reason why the petitioner s claim was found to be unmerited. The impugned order also indicates that since the petitioner s reply was found to be unsatisfactory, an opportunity of personal hearing was granted to the petitioner. This is incorrect. The petitioner claims that date of personal hearing before the Proper Officer was mentioned in the SCN which was obviously prior to petitioner s reply to the SCN and not pursuant to any queries that the concerned officer had in respect of the reply to the SCN. It is considered apposite to set aside the impugned order and remand the matter to the concerned officer for consideration afresh - petition allowed by way of remand.

  ---

• 2024 (7) TMI 743
  Violation of principles of natural justice - service of SCN - SCN u/s 73 of the said Act was not uploaded in the view notices and orders section of the portal - Challenge to notifications dated 5th July 2022 and 31st March 2023 issued under Section 168A of the CGST/WBGST Act, 2017 - HELD THAT:- Admittedly, in this case it is noticed that the show cause notice issued under Section 73 of the said Act was not uploaded in the view notices and orders section of the portal. It is, however, not in doubt that by email communications the petitioner was informed with regard to the exact location of the show cause notice on the portal. Such fact would corroborate from the email communications which remains uncontroverted. Be that as it may, since there was some confusion with regard to uploading of the show cause and the order and especially taking into consideration the fact that the dashboard of the portal has been re-designed, the petitioner should be permitted to challenge the aforesaid adjudication order dated 6th December 2023 passed under Section 73(9) of the said Act before the appellate authority. In the event, the petitioner approaches the appellate authority within 30 days from date and files an appeal along with an application for condonation of delay, the appellate authority, by condoning the delay shall hear out and dispose of the appeal on merits by passing a reasoned order, within a period of 12 weeks from date of filing of the said appeal upon giving an opportunity of hearing to the petitioner, subject to the petitioner complying with the requirement for pre-deposit, as is required for maintaining an appeal under Section 107 of the said Act. Petition disposed off.

  ---

• 2024 (7) TMI 742
  Challenge to assessment order - petitioner could not reply to any of the notices that preceded the impugned order - seeking one more opportunity to substantiate the case - HELD THAT:- Having considered the medical certificate and discharge summary issued by the MIOT Hospitals Private Limited, Chennai, the Court is inclined to exercise the discretion partly in favour of the petitioner by setting aside the impugned order and remitting the case back to the respondent to pass fresh orders on merits and in accordance with law. The impugned order, which stands quashed, shall be treated as addendum to the show cause notice that preceded the impugned order - Petition allowed.

  ---

• 2024 (7) TMI 741
  Condonation of delay in filing appeal - proper explanation for delay given or not - oversight on the part of accountant - HELD THAT:- The petitioner claims that by reasons of oversight on the part of its accountant, the appeal could not be filed on time. The aforesaid explanation though, does not appear to be adequate, however, for the end of justice and taking into consideration of the fact that the petitioner may have merits in the appeal and the petitioner having deposited the pre-deposit amount, the order dated 15th March, 2024 is set aside, subject to the petitioner s making payment of cost of Rs. 25,000/- with the concerned GST authorities. Petition disposed off.

  ---

• 2024 (7) TMI 740
  Condonation of delay of 13 days in filing appeal - delay on the ground of medical grounds - HELD THAT:- In this case it is noticed that despite there being an application for condonation of delay, the appellate authority by glossing over the same had purported to reject the appeal on the ground that the appeal was delayed by more than 4 months. From the order impugned it would appear that the appellate authority despite acknowledging the fact that the main reason for delay in filing the appeal was due to medical treatment and by placing reliance on the provisions of Section 107 (4) of the said Act, by observing the petitioner having filed the appeal beyond the time prescribed, had dismissed the same. It is elementary that when an application for condonation of delay is filed, the appellate authority is obliged to consider the same. Unfortunately, in this case the appellate authority, despite acknowledging the fact that the reason for delay was the medical treatment of the petitioner and by holding that the appeal had been filed beyond the time prescribed as provided for in Section 107 (4) of the said Act, had been pleased to reject the same - the aforesaid order is perverse to say the least and based on complete non application of mind. The same is accordingly set aside. The petitioner has been able to sufficiently explain the delay in filing the appeal. Petition disposed off.

  ---

• 2024 (7) TMI 739
  Jurisdiction to pass impugned order - It is submitted that the impugned proceedings of the respondent is clearly without jurisdiction in as much as the petitioner is under the administrative control of the State GST Authorities whereas the impugned order has been passed by the Central GST Authority - HELD THAT:- The operative portion of the impugned order itself indicates that the petitioner has paid a sum of Rs. 74,32,540/- as against the tax demand of Rs. 78,74,766/- leaving the balance of Rs. 4,42,226/-. This amount has to be paid by the petitioner without prejudice to the rights of the petitioner pursuant to the remand order. It is noticed that the petitioner is also required to pay a sum of Rs. 11,08,324/-. The petitioner was directed to pay a sum of Rs. 3,00,000/- at the time of admission in this Court on 01.11.2022. It is not clear whether the petitioner has complied with the same. The delay in payment of tax attracts interest and therefore, the petitioner has to pay the interest. This amount is, therefore, also directed to be paid by the petitioner without prejudice to the rights of the petitioner if the amounts have already not been paid by the petitioner. Imposition of penalty under Section 122 of the GST Act, 2017 - HELD THAT:- The respondents are directed to pass a fresh orders on merits and in accordance with law within six months from today. In case the recommendations of the 53rd GST council meeting is implemented, the penalty may be dropped. Petition disposed off.

  ---

• 2024 (7) TMI 738
  Seeking disposal of petitioner's application dated 23.05.2024 pending - It is the case of the petitioner that the petitioner has discharged the entire tax liability and a part of the interest for a sum of Rs. 9,00,000/- out of Rs. 13,00,000/- as on date - HELD THAT:- This Writ Petition is disposed off by directing the second respondent to dispose of the petitioner's application dated 23.05.2024, filed under Section 80 of the Act, within a period of 60 days from the date of receipt of a copy of this order, in the light of the recommendation made in the 53rd GST Council Meeting held on 22.06.2024 and subject to the Notification to be issued to that effect. Considering the same, the respondents are directed to keep all recovery proceedings in abeyance for a period of 60 days from the date of receipt of a copy of this order. In case Notification is issued, suitable orders may be passed. In case no Notification is issued pursuant to recommendation made in the 53rd GST Council Meeting held on 22.06.2024, the petitioner's application dated 23.05.2024 may be suitably considered and disposed of. Petition disposed off.

  ---

• 2024 (7) TMI 737
  Challenge to order passed by the appellate authority under Section 107 of the CGST Act, 2017/WBGST Act, 2017 - HELD THAT:- Paragraph 3 of the N/N. 53/2023 dated 2nd November, 2023, inter alia, provides that no appeal shall be filed under this notification, unless the appellant has paid in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him and a sum equal to twelve and a half per cent of the remaining amount of tax in dispute arising from the said order subject to maximum of twenty-five crores rupees, in relation to which the appeal has been filed, out of which at least twenty per cent should have been paid by debiting from the Electronic Cash Ledger. There are other conditions in the said notification which are not relevant for the present purpose. The payment made in Form GST DRC-03 dated 30th January, 2024, would undisputedly demonstrate that the same was not made against any show cause notice or against any particular order but was made in connection with the appeal and in terms of the aforesaid notification. In fact, one of the conditions of the aforesaid notification for availing the benefit has been recorded in the remarks column of the aforesaid Form GST DRC-03. The respondents have also not been able to identify any particular Form under which the pre-deposit for maintaining any appeal in terms of the aforesaid notification is required to be made. The order dated 16th February, 2024 passed by the appellate authority under Section 107 of the said Act is set aside - matter is remanded back to the appellate authority with a direction upon the appellate authority to treat the aforesaid deposit made by the petitioner in From GST DRC-03 dated 30th January, 2024, as a deposit within the meaning of the aforesaid notification dated 2nd November, 2023 with a further direction upon the appellate authority to hear out and dispose of the appeal within a period of 8 weeks from the date of communication of this order by giving an opportunity of personal hearing to the petitioner. Petition disposed off by way of remand.

  ---

• 2024 (7) TMI 736
  Imposition of tax due from the petitioner on account of different in the Return filed by the petitioner in GSTR-3B and the auto populated Input Tax Credit in GSTR-2A - HELD THAT:- Considering the fact that there is no scope for auto population of the Input Tax Credit on IGST, the Court is inclined to come to rescue the petitioner by quashing the impugned order and remitting the case back to the respondent to pass fresh orders. The impugned order, which stands quashed, shall be treated as addendum to the show cause notice in GST DRC 01 dated 10.08.2023. Petition disposed off.

  ---

• 2024 (7) TMI 735
  Breach of principles of natural justice - service of SCN - petitioner was unaware of proceedings since the notices and orders were uploaded in the View additional notices and order tab of the GST portal, but not communicated to the petitioner through any other mode - HELD THAT:- As a registered person under applicable GST enactments, the petitioner is under an obligation to monitor the GST portal on an ongoing basis. Therefore, the explanation provided by the petitioner is not entirely convincing. At the same time, it should be noticed that the tax demand was confirmed only because the petitioner failed to submit a reply to the show cause notice and attend the personal hearing. In the overall facts and circumstances, albeit by putting the petitioner on terms, the interest of justice warrants that an opportunity be provided to the petitioner to contest the tax demand. The impugned order dated 16.08.2023 is set aside and the matter is remanded for reconsideration, subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order - petition disposed off by way of remand.

  ---

• 2024 (7) TMI 734
  Condonation of delay in filing the revocation application - invocation of proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. Petition is disposed off.

  ---

• Income Tax

• 2024 (7) TMI 733
  Delay filling SLP - Reopening of assessment u/s 147 - reason to suspect v/s reason to believe - Allegation that companies were paper companies which acted as conduits to facilitate loan transactions - As decided by HC [ 2023 (7) TMI 867 - DELHI HIGH COURT] jurisdictional prerequisite is a well-established principle, as reason to suspect is qualitatively different from reason to believe. The statutory [prerequisite] condition was not met by the AO before entering the realm of reassessment/assessment proceedings - HELD THAT:- There is a gross delay of 213 days in filing this special leave petition. The explanation offered by the petitioner is not satisfactory so as to accept the same and condone the delay as it is not sufficient in law to do so. Hence, the application seeking condonation of delay in filing the special leave petition is dismissed. Consequently, the special leave petition also stands dismissed on the ground of delay.

  ---

• 2024 (7) TMI 732
  Validity of Settlement Commission order - Order beyond the limitation prescribed u/s 245D(4A)(iii) and by operation of Section 245HA(1)(iv) - Non-disposal of the applications within the cut-off period. HELD THAT:- It is pointed out by the learned counsel for the respondent -M/s. RNS Infrastructure Limited that assessment order has been passed and challenged in appeal by the respondent. In view of the aforesaid position, we are not inclined to interfere with the impugned judgment and hence, the special leave petition is dismissed. We clarify that the dismissal of the special leave petition will not be construed as an observation on the merits of the assessment order and the allegations.

  ---

• 2024 (7) TMI 731
  Exemption u/s 11 - denial of claim vide assessment order u/s 143(3) as Assessee-Trust had not furnished proper information to the Charity Commissioner and there was shortfall in making provision of Indigent Patients Fund ( IPF ) - HC [ 2023 (8) TMI 1449 - BOMBAY HIGH COURT] decided issue in favour of assessee - HELD THAT:- No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is, accordingly, dismissed.

  ---

• 2024 (7) TMI 730
  Disallowance of expenses incurred in respect of municipal taxes, maintenance and repair of rest/guest house - Allowance of expenses incurred in buying presentation articles - HELD THAT:- As relying on Income Tax Appeal relating to Assessment Year 1995-96, Question No. 1 would stand answered against the Assessee and in favour of the Revenue by disallowing the deduction in respect of municipal taxes, maintenance taxes and repair of guest house. Question No. 2 would stand answered in favour of the Assessee and against the Revenue, allowing deduction towards expenses of buying presentation articles. Deduction u/s 80HHC - proceeds of sale of scrap would be factored into the size of total turnover for purposes of computing the deduction - HELD THAT:- This issue has been squarely covered by the Supreme Court in Punjab Stainless Steel Industries [ 2014 (5) TMI 238 - SUPREME COURT] holding that for purposes of the term total turnover with regard to Section 80HHC, the ratio should be between the export turnover of the business in question and the total turnover of the business in question, and that the proceeds of sale of scrap would not form part of total turnover for purposes of Section 80HHC. In the facts of the case at hand, such turnover would relate to a turnover of the paper manufactured by the Assessee, to which, the turnover of sale of scrap must not be added. Question No.3 in favour of the Assessee and against the Revenue. Lease rent received are part of the total turnover or not - Whether 90% of interest included in the lease rent received by the Appellant has been rightly reduced from business income of the Appellant? - HELD THAT:- As both these questions stand answered against the Assessee and in favour of the Revenue, in the light of the judgment of K. Ravindranathan Nair [ 2007 (11) TMI 10 - SUPREME COURT] The lease rent received by the Assessee would therefore not be part of the business income or turnover of the Assessee. Likewise, the disallowance of 90% of interest component of the lease rental income also cannot be questioned. Since these questions stand squarely answered by the law declared in the aforesaid judgment of the Supreme Court on the premise of the need to have a direct linkage to export turnover , nothing survives on these two issues under this Appeal.

  ---

• 2024 (7) TMI 729
  Addition in the block assessment proceedings - Addition u/s 69A - Validity of import of articles as well as the aspects relating to the statement of Sh. Chander Prakash Sachdeva - ITAT deleted addition - HELD THAT:- Tribunal has ultimately on facts come to the conclusion that the factum of exports could not be doubted and that the export proceeds stood duly reflected in the books of account. It has categorically observed that there was no justification for additions being made u/s 69A since the record had established that the assesee had made genuine export sales and received export remittances through regular banking channels. Statement of Sh. Chander Prakash Sachdeva and the denial of a right of cross-examination - While in the instant appeal the appellants have sought to question the correctness of the conclusions ultimately arrived at and noticed hereinabove, in our considered opinion, the aspects pertaining to import lose all significance bearing in mind the findings returned by the Tribunal as held conditions are not satisfied in the case of the assessee as Shri Chander Prakash Sachdeva was available to the A.O. because his statement at various stages have been recorded after the search and at the assessment stage. Therefore, he was available for cross- examination on behalf of the assesee. When assessee asked for cross-examination to his statement, he was capable to give statement. He was not kept out of the way by the assessee and that there was no delay in the proceedings. Therefore, it is clear that without any just cause Shri Chander Prakash Sachdeva refused to cross-examination on behalf of the assessee. A.O. has also not exercised his powers to summon him to produce him for cross- examination on behalf of the assessee. Therefore, when Shri Chander Prakash Sachdeva refused for cross-examination on behalf of the assessee which were recorded at the back of the assessee by the Investigation Wing and the A.O, his statement cannot be relied upon against the assessee to frame the assessment. As according to assessment order, statement of Shri Chander Prakash Sachdeva was also recorded on 09.11.1998 i.e., prior to the search. Therefore, such statement cannot be considered as statement recorded under section 132 (4) of the I.T. Act. Therefore, allegation of the alleged threat to Shri Chander Prakash Sachdeva is not substantiated through any evidence or material on record. There is no justification to apply Section 69C of the I.T. Act against the assessee. No evidence was found during the course of search to prove that purchases made by assessee were bogus. No evidence has also been found during the course of search that assessee made purchases in cash from other concerns. It was merely an inference of the Ld. CIT(A) that assessee made purchases in cash from other parties. The Bank Accounts of these two concerns have been operated by Shri Chander Prakash Sachdeva only. Therefore, on the basis of evidence and material on record, we hold that assessee made the purchases for exports from M/ s. Sachdeva Trading Co and M/s. Rave Scans only. We, accordingly hold that purchases were not made in cash as mentioned by the authority below. There is no evidence of such purchases having been made in cash. Benefits under Section 80HHC - Auditor's Report filed in the name of proprietorship concern before Ld. CIT(A) was admitted by the Ld. CIT(A) on calling the report from the A.O. at the appellate proceedings. We may also note that Shri S.S. Rana, attended the appellate proceedings before Ld. CIT(A). There is no specific ground taken by the Revenue against the action of the Ld. CIT(A) in admitting Auditor's Report filed in the name of proprietorship concern. It may be noted here that assessee filed return of income under section 158BC of the IT. Act and assessment was completed against him in his proprietorship concern. Therefore, assessee rightly claimed deduction under section 80HHC with respect to export proceeds. Therefore, taking into account the facts and circumstances of the case and also in view of the fact that exports were made, export proceeds were received through Banking channel, Auditor's Report was admitted and examined by the Ld. CIT(A), the report of the A.O. was called or and Revenue was represented by Shri S.S. Rana, the assessee is entitled for deduction under section 80HHC - No infirmity in the Order of the Ld. CIT(A) in allowing the claim of assessee. Accordingly, deduction under section 80HHC was rightly allowed by the Ld. CIT(A). Appeal dismissed.

  ---

• 2024 (7) TMI 728
  Applicability of section 43B - LIC Mutual Fund can be regarded as Public Financial Institutions as specified or not? - Whether an amount being interest provision as at the year end made in the accounts is allowable considering the fact that the said payment relates to LIC Mutual Fund and hence does not attract the provisions of Section 43B? HELD THAT:- The language of Section 4A of the Companies Act, 1956 and Section 43B of the Act, 1961 being plain and unambiguous, no interpretation can be given, other than what is clearly expressed by the plain language of the aforesaid provisions. The list of public financial institutions given in Subsection (1) of Section 4A of the Companies Act, 1956 being exhaustive and not illustrative, nothing can be added to it. It is not the case of the respondent that there is any notification under Section 4A of the Companies Act, specifying LIC Mutual Fund as a public financial institution . That apart, it is also not the case of the respondent/Revenue that LIC Mutual Fund Trust qualifies the two conditions mentioned in Sub-section (2) of Section 4A of the Companies Act, 1956. Since LIC Mutual Fund is not Public Financial Institution under Section 43B of the Act, 1961 read with Section 4A of the Companies Act, therefore, the interest on unsecured debentures payable by the appellant-assessee to the LIC Mutual Fund is not covered by Section 43B of the Act, 1961. Consequently, it could not be disallowed in the hands of the appellant-assessee on the ground of non-compliance of conditions of Section 43B. The above discussion leads to an irresistible conclusion that the Income Tax Appellate Tribunal has committed a manifest error of law to hold that LIC Mutual Fund is a public financial institution u/s 43B. Therefore, the disallowance invoking the provisions of Section 43B cannot be sustained and consequently, the impugned order to that extent deserves to be set aside - Substantial questions of law are answered in favour of the assessee

  ---

• 2024 (7) TMI 727
  Validity of reassessment proceedings - Faceless assessment of income escaping assessment - notice u/s 148A (b) issued by JAO instead of FAO - as argued order passed by the AO u/s 148A (d) of the Act is invalid as AO has failed to deal with the objections which were filed by the petitioner - HELD THAT:- We find much substance in the contention as urged on behalf of the petitioner that the Jurisdictional Assessing Officer could not have issued a notice under Section 148A (b) of the Act, outside the Faceless Assessment Scheme. In the context of the contentions as urged on behalf of the petitioner, at the outset, we may note the provisions of Section 151A of the Act, which was inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions), Act, 2020 (for short, TOLA ) with effect from 01 November, 2020 providing for faceless assessment of income escaping assessment . In pursuance of Section 151A, the Central Government by notification dated 29 March, 2022 notified a scheme in regard to faceless assessment inter alia providing that the assessment, reassessment or recomputation of income under section 147 of the Act as also the issuance of notice under Section 148 of the Act, shall be through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in Section 148 of the Act for issuance of notice and in a faceless manner. Section 144B of the Act is a provision which ordains faceless assessment. Perusal of Section 144B indicates the entire procedure to be followed in undertaking assessment in a faceless manner involving the National Faceless Assessment Center. Section 144B of the Act although was inserted by the TOLA, it has been brought into effect from 01 st April, 2021. The impugned notice in the said proceedings being issued by the JAO and not as per the faceless assessment procedure, as envisaged under the scheme notified by the Central Government by notification dated 29 March 2022 was illegal and invalid. It was held that the JAO had no jurisdiction to issue such notice, as it was not issued as per the requirements of Section 151A read with Section 144B of the Act. Non considering assessee submission - Also we find substance that the order passed by the Assessing Officer requires interference as it is clear from reading of the impugned order that the submission which was made on behalf of the petitioner before the assessing officer that the petitioner was following the project completion method, has not been taken into consideration while issuing the impugned notice and in coming to a conclusion to re-open the assessment. Assessee appeal allowed.

  ---

• 2024 (7) TMI 726
  Validity of reopening of assessment - notice has been issued in breach of the provisions of Section 151 - No sanction by the specified authority before issuance of notice - HELD THAT:- In the present case, Section 151 as amended by the Finance Act, 2021 and Section 148A as also introduced by Finance Act, 2021 have become applicable, as although the assessment year in question is 2016-17 in respect of which the assessment is sought to be reopened by issuance of notice u/s 148, which is dated 30 July, 2022. Such amended provision would squarely become applicable the date of notice u/s 148 itself being 30 July, 2022. The record clearly indicates that the sanction in the present case was issued by the Principal Commissioner which can only be in respect of cases if three years or less than three years have elapsed from the end of the relevant assessment year, as would fall under the provisions of clause (i) of Section 151. As in the present case the assessment year in question is 2016-17 and the impugned notice itself has been issued on 30 July, 2022, it is issued after a period more than 3 years having elapsed from the end of the said assessment year, hence, clause (ii) of Section 151 of the Act was applicable, which required the sanction to be issued by either Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General for issuance of notice u/s 148 of the Act. It is held that the sanction of the specified authority has to be obtained in accordance with the law existing when the sanction is obtained and, therefore, the sanction is required to be obtained by applying the amended section 151 (ii) of the Act and since the sanction has been obtained in terms of section 151 (i) of the Act, the impugned order and impugned notice are bad in law and should be quashed and set aside. The respondent s case based on the notification dated 31 March, 2020 issued under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 ( TOLA ) was concerned, the Court held that such notification was a subordinate legislation and it could not override the statute enacted by the Parliament and in that regard, the position in law was discussed by the Division Bench in paragraph 27 of the said decision. In the present case, it is not in dispute that an appropriate sanction of the specified authority as per the provisions of Section 151 (ii) of the Act was not obtained and for such reason, certainly, as held by this Court in Siemens Financial Services Pvt. Ltd. [ 2023 (9) TMI 552 - BOMBAY HIGH COURT ] the impugned notices would be rendered bad and illegal. Decided in favour of assessee.

  ---

• 2024 (7) TMI 725
  Validity of Faceless assessment of income escaping assessment - Challenge to notice u/s 148 as non-compliance with Section 151A of the Act - notices issued by JAO instead of FAO - HELD THAT:- It is now well settled that for a notice to be validly issued for reassessment u/s 148, the Revenue would need to be compliant with Section 151A of the Act, which has been interpreted and analysed in detail by a Division Bench of this Court in the case of Hexaware Technologies Limited. [ 2024 (5) TMI 302 - BOMBAY HIGH COURT] wherein held notices issued by JAO instead of FAO are invalid and bad-in-law u/s 151A of the Income Tax Act, 1961. Therefore, it is apparent that the Revenue is not in compliance with the Scheme notified by the Central Government pursuant to Section 151A (2) of the Act. The Scheme is also required to be tabled in Parliament and is in the character of subordinate legislation, which governs the conduct of proceedings under Section 148A as well as Section 148. In view of the explicit findings returned in Hexaware, the grievance of the Petitioner insofar as it relates to an invalid issuance of a notice is unsustainable and consequently, the very manner in which the proceedings have been initiated, vitiates the proceedings. Thus, proceedings initiated under Section 148 of the Act would not be sustainable.

  ---

• 2024 (7) TMI 724
  Validity of Faceless assessment of income escaping assessment - Challenge to notice u/s 148 as non-compliance with Section 151A of the Act - notices issued by JAO instead of FAO - HELD THAT:- It is now well settled that for a notice to be validly issued for reassessment u/s 148, the Revenue would need to be compliant with Section 151A of the Act, which has been interpreted and analysed in detail by a Division Bench of this Court in the case of Hexaware Technologies Limited [ 2024 (5) TMI 302 - BOMBAY HIGH COURT] wherein held notices issued by JAO instead of FAO are invalid and bad-in-law u/s 151A of the Income Tax Act, 1961. Therefore, it is apparent that the Revenue is not in compliance with the Scheme notified by the Central Government pursuant to Section 151A (2) of the Act. The Scheme is also required to be tabled in Parliament and is in the character of subordinate legislation, which governs the conduct of proceedings under Section 148A as well as Section 148. In view of the explicit findings returned in Hexaware, the grievance of the Petitioner insofar as it relates to an invalid issuance of a notice is unsustainable and consequently, the very manner in which the proceedings have been initiated, vitiates the proceedings. Thus, proceedings initiated under Section 148 of the Act would not be sustainable.

  ---

• 2024 (7) TMI 723
  Addition u/s 69 - cash deposits made during demonetization period - HELD THAT:- Once the assessee claims that the source for cash deposits is out of realization of sale proceeds from sundry debtors, then the same cannot be brought to tax under the provisions of section 69 for the simple reason that the provisions of section 69 is applicable in a situation where the assessee has made investment which are not recorded in the books of account, if any maintained by him for any source of income and the assessee offers no explanation of the nature and source of investment or the explanation offered by the assessee is not up to the satisfaction of the AO. In the present case, the cash received from sundry debtors has been recorded in the books of account of the assessee and further the assessee has explained the nature and source of investment by filing necessary evidences including corresponding sale invoice, e-way bill and ledger account copies of the parties. From the details furnished by the assessee, it is undoubtedly clear that the source for cash deposits into the bank account during demonetization period is explained out of known source of income. CIT (A) had recorded a categorical finding that similar cash deposits were made even before the demonetization period and after demonetization period. From the analysis of the cash deposits during and after demonetization period, there is no abnormal increase or deviation in cash deposits during the demonetization period. Therefore, we are of the considered view that when the assessee has recorded cash receipts in the books of account out of realization from sundry debtors before the date of demonetization, then the AO ought not to have made the addition towards cash deposits u/s 69 only based on the theory of human probabilities, because when the evidences filed by the assessee are glaring at us, the theory of human probabilities alone will not be sufficient to take an adverse view on the assessee. Since the assessee has justified the source for cash deposits during the demonetization period with necessary evidences, in our considered view, there is no error in the reasons given by CIT (A) to delete the addition made u/s 69. Decided in favour of assessee.

  ---

• 2024 (7) TMI 722
  Addition u/s 56(2)(vii) - assessment order of one of the joint owner, being the son of the assessee, has been passed by department accepting the contentions - HELD THAT:- In the present case we found that Agreement /MOU for sale of Plot were entered on 31/07/2008. This agreement/MOU is also not disputed by the Authorities below. On going through the Agreement/MOU we also found that Advance of Rs. 1,00,000/- claimed to have received by the Shejawadkar Builders Pvt. Ltd. (Seller) vide Cheque dated 31/07/2008 of Indian Bank, Hubli. Revenue contention is that the first payment of Rs. 1,00,000/- was only made on 11.05.2009 by the assessee and that to one Suresh Enterprises. AR on the other hand submitted that the amount was actually paid by the Akshay Thakkar s bank account (Son of the assessee) on 02/08/2008 who is also the joint purchaser even though he was not a party to the Agreement/ MOU for Sale of Plot on dated 31/07/2008. Since in the case of the assessee s son the assessment order u/s 147 of the Act dated 23.03.2022 was passed accepting the contentions of one of the joint purchaser of the property, then the same needs to be extended to other purchaser (the assessee) also. The revenue cannot take different view for different parties involved in the same transaction. Therefore, we remit the issue to the file of the AO to take decision on the basis of the assessment order dated 23/03/2022 passed in the case of his son Mr. Akshay Nagesh Thakkar. Appeal filed by the assessee is allowed for statistical purposes.

  ---

• 2024 (7) TMI 721
  TP Adjustment - Treatment of Outstanding Trade Receivables as Loan - TPO treated the delayed payments as unsecured loans advanced to the AEs and proposed to charge interest rate of 9.175% on the basis of prevailing average SBI Base Rate during the year - assessee prayed that DRP has clearly directed the AO/TPO to net off the payables and charge interest on net receivables and AO/TPO was directed to recompute the interest chargeable accordingly - assessee submitted that this has not been done by the AO/TPO. As per the exercise to be done, no adjustment is required - HELD THAT:- Upon careful consideration, we find considerable cogency in the submissions of the ld. counsel for the assessee. Accordingly, we remit the issue to the file of AO/TPO to properly apply the DRP s directions on this issue and decide as per law after giving the assessee an opportunity of being heard. In the result, the appeal of the assessee is allowed for statistical purposes.

  ---

• 2024 (7) TMI 720
  Ex-parte order by the National Faceless Appeal Centre (NFAC) u/s 250 - HELD THAT:- While exercising the jurisdiction u/s 251(1)(a) of the Act, the CIT(A) is mandated to state point of determination, its decision thereon and clear reasons therefore in terms of section 250(6) of the Act. This exercise by the CIT(A) is a pre-requisite and invariably necessary for each assessment year in each case irrespective of its repetition. This is because in taxation each assessment year per-se is a separate unit as is governed by its own peculiar facts features and as such the principle of res-judicata is inapplicable in fiscal laws. It is a trite law as laid down in case Chandra Kishore Jha Vs Mahavir Prasad [ 1999 (9) TMI 948 - SUPREME COURT] that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner . Therefore the Ld. NFAC has no power to dismiss the appeal ex-parte for non-prosecution without dealing with the merits therefore. This view stands fortified in CIT Vs Premkumar Agundas Luthra HUF [ 2016 (5) TMI 290 - BOMBAY HIGH COURT] . Therefore, in our considered view, in the absence of clear authorisation in the statue permitting the Ld. NFAC to culminate proceedings without touching merits even in ex-parte proceedings is violative of provision of sub-section (6) of section 250 of the Act. The impugned order passed side-stepping the dictate is since not in consonance with provision of s/s (6) of section 250 of the Act, is set aside and remanded back to Ld. NFAC with a direction to deal therewith de-novo after according two effective opportunities to the appellant assessee and pass a speaking order in terms of section 250(6) of the Act. Appeal allowed for statistical purposes.

  ---

• 2024 (7) TMI 719
  Penalty u/s 271(1)(c) - assessee had not been able to deny that the administrative expenses or indirect common expenses include amount spent in relation to earn exempt income - penalty has been imposed because the assessee has neither made any disallowance u/s. 14A nor computation of income for administrative expenses/indirect common expenses incurred in relation to earn exempt income HELD THAT:- What is concealment of income or inaccurate particulars of such income as contemplated by Section 271(1)(c), has been explained by the Hon'ble Supreme Court in the case of the CIT Vs. Reliance Petro Products (P.) Ltd.[ 2010 (3) TMI 80 - SUPREME COURT] wherein held that making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. Therefore, it is obvious that it must be shown that the conditions u/s 271(1)(c) must exist before the penalty is imposed. In this case assessee is maintaining the separate books of accounts for all his proprietorship concerns where the expenditures are debited separately; the fund flow statement indicates that the investments have been made from own capital and same is reflected in the personal balance sheet; Interest payments are made to finance company for the purchase of trucks etc. which were used for business of the assessee; direct expenditure for earning exempt income has been debited to his personal accounts. Above submissions and the explanation given by the assessee is an admitted fact as find recorded in the order of the Ld. AO. Thus, admittedly no information in the return was found to be incorrect or inaccurate. Further, statement made or any detail supplied was not found to be factually incorrect. Thus, the fact and circumstances of the case is covered by the ratio of Hon ble Supreme Court judgment in CIT Vs. Reliance Petro Products (P.) Ltd. referred (supra). The facts and circumstances are also covered by the case of ITAT Delhi in M/s. Mohair Investment and Trading Company (P.) Ltd [ 2015 (12) TMI 299 - ITAT DELHI] where it was held that it is clear that the present issue, related to application of section 14A, especially in relation to shares held as trading assets, was clearly debatable and so it cannot be visited with penalty under section 271(1)(c). Further we find that the assessee has furnished all the details relating to the earning of dividend income. So, it cannot be said that the assessee had concealed income or furnished incorrect particulars of income. Hence, penalty u/s 271(1)(c) is not sustainable. Revenue has failed to show that the assessee has concealed the particulars of income or has furnished the incurred particulars of such income and the case of the assessee is not covered u/s. 271(1)(c) - Decided in favour of assessee.

  ---

• 2024 (7) TMI 718
  Dismissal of appeal by CIT(A) - Addition u/s 68 - unexplained cash credit - bogus LTCG earned by the assessee on sale of shares - HELD THAT:- From the perusal of the order of the ld. CIT(A), we note that it is a cryptic order of six lines, dismissing the appeal for non-appearance of the assessee. Despite the objection raised by the Ld. Sr. DR, in the interest of justice and fair play, we find it appropriate to accept the submissions made by the Ld. Counsel for the assessee to restore the matter back to the file of ld. CIT(A) for denovo meritorious adjudication of the grounds of appeal taken by the assessee at the first appellate stage. Assessee is at liberty to furnish details and documents, if she so requires, to substantiate her claim. Section 250 of the Act provides for procedure to be adopted while disposing of the appeal by the Ld. CIT(A). Sub-section (4) of section 250 of the Act provides that the Ld. CIT(A) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing officer to make further inquiry and report the result of the same to the Commissioner (Appeals). Keeping in mind the provision of sections 250 of the Act, it is incumbent upon the Ld. CIT(A) to pass a speaking order on the merits of the case by examining, verifying and analyzing the material on record. Appeal of the assessee is allowed for statistical purposes.

  ---

• 2024 (7) TMI 717
  Assessment u/s. 144 - assessing the income @8% of total receipt - HELD THAT:- AO estimated the quantum of profit @ 8% of on sub contract portion of work which was confirmed by the learned CIT(A) also. Before us, A.R. pleaded that since the work has been sub contracted, the margin of profit would at most be @ 4% and it appears that the commission to that extent has already been disclosed by the assessee. Since the matter is very old and in view of the forgoing discussion, we deem it fit and proper to adopt @4% on the sub contract work instead of @8% as adopted by the AO and confirmed by the learned CIT(A). Thus, all the grounds raised by the assessee are partly allowed.

  ---

• 2024 (7) TMI 716
  Assessment u/s 153C - Unexplained investment being share capital and share premium - incriminating material seized in the course of search or not? - HELD THAT:- It is the finding of the CIT(A) that there is no seized materials impounded in the course of search belong to the assessee. After analyzing the satisfaction note of the DCIT (Central Circle) the CIT(A) held that the three conditions enumerated in Section 153C of the Act are not satisfied cumulatively and simultaneously. It is the finding of the CIT(A) that in the case of the assessee admittedly additions are not based on any incriminating document found as a result of search and AO has not recorded the satisfaction for the relevant assessment years as envisaged u/s 153C. It is also the observation of the Ld.CIT(A) that in fact no assessment year is mentioned in the satisfaction note recorded by the AO and, therefore, conditions stipulated in Section 153C have not been satisfied cumulatively and simultaneously. Non-satisfaction of any of the pre-conditions mentioned in the provision of Section 153C of the Act would result in notice under 153C legally unsustainable or invalid. The ratio of the decision of Sinhagad Technical Education Society ( 2017 (8) TMI 1298 - SUPREME COURT ) and the decision of Index Security Pvt. Ltd. (8 2017 (9) TMI 585 - DELHI HIGH COURT] was rightly applied to the facts of the assessee s case. Thus, we see no infirmity in the orders passed by the Ld.CIT(A). The same is sustained. Decided against revenue. Validity of notice u/s. 153C as barred by limitation - Validity of notice issued beyond block of 6 years - HELD THAT:- We find that in this case date of search was 11.11.2014 and the Date of recording of satisfaction u/s. 153C was 02.12.2016. We are of the considered view that in a case of searched person, the block of 6 years for assessments are 6 years immediately proceedings the year of search. As the search u/s. 132 was conducted in the Apple Group on 11.11.2014, hence, the date of search falls in AY 2015-16 in the case of Apple Group. Accordingly, the AO in the case of searched person was empowered to initiate the proceedings u/s. 153A for immediately preceding six years from AY 2009-10 to AY 2014-15. We further observed that in a case of person other than the searched person , provisions of section 153C are applicable and in such case, the block of 6 years will be immediately preceding the year in which satisfaction u/s. 153C of was recorded. In the instant case the AO has recorded satisfaction on 02.12.2016, hence, at the earliest, it is the date of 2.12.2016, when the AO can be presumed to have got the documents in his capacity as AO of the assessee, on the basis of which proceedings u/s. 153C have been initiated. Hence, this date of 02.12.2016 falls in the previous year 2016-17 relevant to AY 2017-18. The immediately preceding six years are AY 2011-12 to AY 2016-17. Thus, the AY 2009-10 and AY 2010-11 are clearly out of block of 6 years and therefore, the assessment order deserve to be quashed being invalid. See JASJIT SINGH [ 2023 (10) TMI 572 - SUPREME COURT] - Decided in favour of assessee.

  ---

• 2024 (7) TMI 715
  TDS u/s 195 - Addition u/s 40(a)(i) - payment to Everest Global Inc. for rendering software training services without deducting TDS - as submitted source of income was located outside India and the payments have been made in respect of services outside India - HELD THAT:- Everest global Inc do not have any permanent establishment in India and further the service provided outside India to the assessee. In the present case assessee company has entered in the Teaming agreement with Everest Global Inc and work order was issued and services of Everest global Inc were utilized for carrying out the project work, the source of income was located outside of India and payment also have been made outside of India. The fee for technical services was paid by the assessee for the purpose of making or earning income from any source outside India. Therefore, clearly section 9(1)(vii)(b) of the Act applied and income earned by such non - residents cannot be deemed to accrue or arising in India and the fees for technical services was not taxable. The assessee company has utilized the service of the company outside the India and payment also made outside India and company was not liable for deduction of tax under section 195 of the Act. Assessee is a resident in India and he has paid fee for technical services to the non-residents. Thus, except in two circumstances, firstly, where the fees paid in respect of services utilized in a business carried on by the assessee outside India or secondly fee is paid for the purpose of earning any income from any source outside India, in all other cases the assessee is liable to deduct tax on the amount of technical fee paid to non-residents. Keeping in view the fact that work order was issued outside country for making an income from a source outside the country. The amount paid are covered in exception provided in section 9(1)(vii)(b). Hence the assessee was not required to deduct tax at source - Decided in favour of assessee.

  ---

• 2024 (7) TMI 714
  Addition u/s 68 - unverified share premium amount added as unexplained cash credit - CIT(A) deleted addition - revenue argued that CIT(A) erred in not considering the financial profiles of investor companies - HELD THAT:- The financial situation of the appellant does not justify any premium whatsoever and this only strengthens the assumption that the genuineness of impugned transaction is not proved. There is a finding by the AO that an analysis of the details of income of the Appellant Company revealed that there was no business activity carried out during the year under consideration. This further led to the finding that no prudent investor would pay a massive premium of Rs 190 per share of a Company which had no business activity worth the name and also there was no indication of appropriate business activity which could have a bright commercial future. A combined reading of the Ld. AO s order and the order u/s 263 of the Act reveals that there were efforts made to investigate the genuineness of the impugned transactions because of sub-par business credentials, prima facie visible in the Appellant s case. Thus there is no hesitation in holding that the findings in the authorities cited supra, especially the case of BST Infratech [ 2024 (4) TMI 989 - CALCUTTA HIGH COURT] , would apply in the assessee s case and it deserves to be held that the Appellant was not able to prove the genuineness of the transaction. Applicability of the principles of the amended provisions u/s 68 of the Act would apply to the present case, since as discussed in para 27 of the BST Infratech case (supra), the said amendments merely codified the position of law as earlier expounded in various case laws. Thus, it is held that the assessee has not been able to discharge the burden of proof cast upon him by the provisions of Section 68 of the Act. Accordingly, the ground raised by the Revenue is allowed.

  ---

• 2024 (7) TMI 713
  Assessment u/s 153A - Addition u/s 68 - unsecured loan - whether incriminating material found in search or not? - HELD THAT:- Addition has been made without reference to any incriminating material. In this case, it is apparent that assessment year is unabated, hence the decision in the case of PCIT vs. Abhisar Buildwell (P.) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] squarely applies in the facts of the case. This is an unabated assessment and there was no reference to incriminating material to make the addition. Revenue could not dispute the above proposition and also could not dispute that there is no incriminating material on which addition is made. In these circumstances, in the background of the aforesaid discussion and precedent, we set aside the orders of the authorities below and decide the issue in favour of the assessee.

  ---

• 2024 (7) TMI 712
  TDS u/s 194H or 192 - addition u/s 40(a)(ia) - Non deduction of TDS on payment of commission to the directors - appellant has considered this payment as salary and deducted TDS on the same u/s 192 - HELD THAT:- We find that the issue is squarely covered by the assessee s own case in respect of Assessment Years 2014-15 to 2016-17 [ 2023 (2) TMI 222 - ITAT MUMBAI ] wherein as find commission paid to the CMD has been shown as part of salary in Form-16 for Assessment Year 2010-2011. Total salary paid for the Financial Year 2009-2010 as it appears from the impugned order which includes commission paid by assessee in the Assessment Year in question. Section 192 of the said Act, unlike other TDS provisions require deduction of tax at source under the head Salary only at the time of payment and not otherwise. We also find that the quantum of accrual of expenses is not disputed by Revenue and Shri Sharma also stated the same. Since AR had in fairness stated that the quantum or accrual of expenses is not disputed, there cannot be any perversity in the order passed by CIT(A) or by ITAT in concurring with the findings of CIT (A). No infirmity in the order passed by the Learned CIT(A) in deleting the addition made by Learned AO under Section 40(a)(ia) - Decided against revenue.

  ---

• 2024 (7) TMI 711
  Rejection of application for registration u/sec.12AB - assessee s application for registration under Rajasthan Public Trust Act is pending with competent authority - HELD THAT:- It is an admitted fact that on 15.06.2022, i.e. date when assessee filed application for registration u/sec.12AB of the Act assessee was not registered under Rajasthan Public Trust Act. It is also a fact that assessee had applied for registration under Rajasthan Public Trust Act after 15.06.2022. As per section 17 of Rajasthan Public Trust Act, it is mandatory for a Public Trust to register under Rajasthan Public Trust Act, within three months from the date of which the Public Trust is created. As admitted fact that assessee had not registered itself. Section 12AB(1) mandates that all the applicable laws shall be followed and if any applicable law is not followed by the Trust, then it is not eligible for registration. In this case, admittedly Rajasthan Public Trust Act is applicable to the assessee and assessee has not followed provisions of Rajasthan Public Trust Act, therefore, as per section 12AB(1), assessee is not eligible for registration u/sec.12AB r.w.s. 12A of the Act. The Hon ble Supreme Court in the case of New Noble Education Society [ 2022 (10) TMI 855 - SUPREME COURT] have held that Charitable Institutions and Societies which may be regulated by other state laws have to comply with them. The provisions of the Andhra Pradesh Charities Act and provisions of the Rajasthan Public Trust Act are almost identical. Therefore, decision of the Hon ble Supreme Court in the case of New Noble Education Society(supra) on this issue is squarely applicable to the assessee. Therefore, respectfully following the Hon ble Supreme Court s decision(supra), we uphold the order of the ld.CIT(E). As observed that assessee had not submitted the details called by the ld.CIT(E), therefore, ld.CIT(E) observed that genuineness of the activities of the assessee could not be verified. After the amendment in the registration procedures for Charitable Trust parliament in its wisdom has introduced provisional registration and permanent registration w.e.f 01.04.2021. The provisional registration is issued almost automatically relying on the assessee s submissions. At the time of issuing permanent registration as per Section 12AB(1), it is mandatory for ld.CIT(E) to verify genuineness of the activities of the assessee. In this case, assessee has not submitted the relevant details. Therefore, CIT(E) could not verify genuineness of the activities of the assessee. Since we have uphold the order of ld.CIT(E) on the ground that assessee do not have registration under Rajasthan Public Trust Act, we do not intend to comment on the genuineness of the activities. Accordingly, grounds of appeal raised by the assessee are dismissed.

  ---

• 2024 (7) TMI 710
  Denial of registration u/s. 12A(1)(ac)(iii) and approval u/s. 80G(5)(iii) - HELD THAT:- A perusal of the record would indicate that the assessee-Trust came into existence on 24.01.1956. It was granted registration u/s 12A on 15.11.2000. Thus, it is an old Trust after the change in the scheme of assessment of Charitable Institution effected by way of Finance Act, 2020-21 w.e.f. 1st April, 2020. The assessee has applied for grant of registration u/s. 12A(1)(ac)(iii) and approval u/s. 80G(5)(iii) afresh. A perusal of the impugned orders would reveal that these applications of the assessee have been dismissed for want of prosecution. This dismissal of the applications for want of prosecution is being considered one of the reasons for condoning the delay in filing the appeals. We have gone through the impugned orders, which are very brief. We find that the CIT sent notices to the assessee for submitting supporting evidence but the notices remained uncompiled with and accordingly CIT (Exemption) has rejected the applications of the assessee. On due consideration of the impugned orders, we are of the view that ends of justice would meet if we give one more opportunity to the assessee. We set aside the impugned orders and restore the applications of the assessee for grant of registration under section 12A(1)(ac)(iii) and approval u/s 80G(5)(iii) of the Income Tax Act. The ld. CIT(Exemption) is directed to decide them on merit and not on account of any technical reasons. Appeals of the assessee are allowed for statistical purposes

  ---

• 2024 (7) TMI 709
  Reopening of assessment - Addition u/s 68 - penny stock transaction - reopening as initiated only on the basis of information from the Investigation Department - reliance on indirect evidences - non independent application of mind by AO - HELD THAT:- The Directors of the company were duly verified by the Revenue authority. The statements are recorded. But the assessee was not able to get a link of those persons related to sale of shares. AR submitted all relevant documents, i.e. the register, bank statement, demat account, bill copies before the authorities. But the veracity of the document has never been in question. There is no nexus of price rigged by the assessee himself. The money trail of the assessee and the broker is not in evidence. The entire addition was made on report of investigation wing. The evidence which is supplied by the assessee is duly bypassed and the ld. AO is only accepted the indirect evidence in the form of repost of the Investigation wind. We relied on order of ITAT Jaipur in Purushotam Soni [ 2018 (4) TMI 1839 - ITAT JAIPUR] and Pramod Jain [ 2018 (2) TMI 300 - ITAT JAIPUR] In the impugned orders, the theory propounded by the ld. AO suggests large scale generation investment of unaccounted monies took place, but even after conducting an invasive search action, no evidence to support such addition was unearthed. As per the ld. AO, the assessee had earned routed unrecorded income. If that were so, it would have certainly reflected in the investigated documents. The documents in the form of undisclosed sales or bogus expenses etc. AO has however not been able to bring on record any material or evidence unearthed during search/ investigation which would reveal as to from which income earning activity did the assessee derive such unaccounted monies to support his theory that he had routed such unaccounted monies in the guise of bogus capital gains. The addition was fully dependent on indirect evidence and statement of different persons. The relevant documents in support of claims of transactions are submitted by the assessee was never been rejected by the revenue . We respectfully relied on the orders Mukesh Ratilal Marolia [ 2011 (9) TMI 919 - BOMBAY HIGH COURT] and Ziauddin A. Siddiquie [ 2022 (3) TMI 1437 - BOMBAY HIGH COURT] . The view was taken in favour of assessee by the Coordinate bench of the ITAT Mumbai in the case of Yogesh P Thakkar(supra) cannot be circumvented. Decided in favour of assessee.

  ---

• 2024 (7) TMI 708
  TP Adjustment - Comparable selection - HELD THAT:- Nihilent Limited company deals in Enterprise transformation and change management, Digital transformation services and Enterprise IT services. We also observe that there is no segmental reporting made in the annual report. It is seen that the assessee is engaged in business requirement gathering, business solution design, software design, software development/implementation/support services, project management, software QA, software support services, technical documentation etc. We are of the opinion that the services provided by the assessee company are routine services whereas Nihilent Limited is providing services which are in the area of transformation of the enterprises and change management which are quite different from the services provided by the assessee. Thus, we are of the opinion that Nihilent Limited cannot be used as a comparable to the assessee. We direct the Ld. TPO/AO to exclude this company from the set of comparables.

  ---

• 2024 (7) TMI 707
  Bogus LTCG - Addition u/s 68 - assessee failed to discharge the onus of proving the genuineness of the transaction and that the price of the scrip has increased abnormally in a period of two years - HELD THAT:- AO without finding any fault with the evidence submitted by the assessee has proceeded to treat the transaction as non- genuine and the long-term capital gains earned by the assessee as bogus for the reason that the name of scrip is part of Investigation report and there is an abnormal increase in the price within a period of 2 years. Therefore, we seen merit in the contention of the ld. AR that the assessee is a regular investor and that in his normal course of operation has sold a part of his investments made in Pine Animations Ltd. The fact that the assessee continues to hold the portion of shares of Pine Animations Ltd. also goes to substantiate the claim that assessee is not involved in the price manipulation of the impugned shares. On perusal of the the statements recorded from Mr. Anuj Agarwal we notice that there is no specific mention of the names of neither the assessee nor the broker through whom the assessee carried out the transactions. We see no merit in the order upholding the treatment of the LTCG as an income u/s 68 of the Act. Assessee appeal allowed.

  ---

• 2024 (7) TMI 706
  Revision u/s 263 - unexplained cash credit u/s. 68 - HELD THAT:- Claim of the Ld. AR that though the observation of the A.O that the aggregate sales of the assessee firm worked out at Rs. 4,24,67,351/- (as per chart ) was a factually incorrect observation, but the same would by no means lead to any prejudice to the revenue, we are unable to concur with the same. As nothing is either discernible from the record nor placed before us by the AR which would reveal that the aforesaid observation of the A.O that the aggregate sales of the assessee firm for the year under consideration had been assailed or sought to be rectified by the assessee firm therefore, we are of the view that no infirmity emerges from the order of the Pr. CIT who had in the backdrop of the aforesaid serious infirmity in the order of the A.O, set-aside the same with a direction to him to readjudicate the issue after affording a reasonable opportunity of being heard to the assessee firm. We are of the view that in case the observation of the AO as canvassed by the AR is found to be factually incorrect, then the proper recourse would be available to the assessee only in the course of the set-aside proceedings by seeking weeding out of the said incorrect observation and substitution of the same by the correct figure. As regards the contention of the Ld. AR that the Pr. CIT had failed to carry out any independent verification on the aforesaid aspect, we are unable to persuade ourselves to subscribe to the same. We, say so, for the reason that the Pr. CIT had categorically referred to the aforesaid conflicting figures of sales as are clearly discernible from the assessment order and, in the backdrop of the same, had set-aside the order of the A.O with a direction to readjudicate the same. Also, we are unable to concur with the claim of the Ld. AR that the aforesaid variance in the figures of sales would have no bearing on the assessment order. In case, the aggregate sales of the assessee firm as observed by the A.O are found to be Rs. 4,24,67,351/- (as per chart ), then, the same would clearly render the order passed by the A.O as erroneous and prejudicial to the interest of the revenue u/s. 263 of the Act. A.O while framing the assessment had lost sight of the aggregate figure of sales of Rs. 4,24,67,351/- (supra) as is clearly discernible from the chart forming part of the assessment order, therefore, the Pr. CIT had rightly assumed jurisdiction as per the Explanation 2 to Section 263 of the Act, as per which, he remains well within his power to revise the order passed by the A.O if in his opinion, the order was passed by the A.O without making enquiries or verification which should have been made. In our view, the A.O based on the figure of aggregate sales of Rs. 4,24,67,351/- (supra) ought to have carried out necessary enquiries and verification as regards the aggregate sales that were disclosed by the assessee firm as against that gathered by him on the basis of its cash book for the year under consideration. CIT had rightly assumed jurisdiction as per Explanation 2 to Section 263 of the Act, therefore, uphold his order. Appeal of assessee dismissed.

  ---

• 2024 (7) TMI 705
  Addition u/s 68 r.w.s. 115BBE - money trail related to unsecured loan - Treatment of loans as unaccounted cash credits - HELD THAT:- Since no specific names were mentioned in the SCN, the assessee submitted the details to the best of its understanding and the AO did not ask for any further details. The query in the SCN appears that the AO had already made up its mind to somehow make an addition indicating a pre-judgment. The assessee has produced the standard details as is required to establish the genuinity of the transaction. No further hearings were given after the info was received albeit partially from Karur Vysya Bank. No question was asked about the transaction with Shri Laxmipat Dudheria. The fact that all the parties being Dinesh Kumar Singhi, Snehalatha Singhi and Laxmipat Dudheria are assessed to tax for long period of time and the resources are adequate and reflected in the financial statements and that the transaction were through account payee cheques/ RTGS has been ignored. The assessee has discharged the basic onus and that the onus was shifted to the AO has been totally ignored. Loan from Laxmipat Dudheria - No adverse inference can be drawn on the assessee in this regard. The assessee has produced the standard details as is required to establish the genuinity of the transaction. The very edifice and the substratum based on which the addition is made does not exist and appears to be a wild imagination. There is no effort by the AO except summarily and erroneously causing a wrong addition. Any clarification could have been submitted by the assessee and examined by the AO had the same been brought to the knowledge of the assessee. The transaction is genuine, verifiable and can no stretch be called unexplained. Lack of understanding/inability to understand the explanation cannot be equated as unexplained. Loan from Dinesh Kumar Singhi - A bare verification of the ledger copies of Sagar Cements in Dinesh Kumar Singhi books and the confirmation of accounts given by Sagar Cements indicates that the closing balance of Rs. 1.57 crore matches with each other and indicates no discrepancy, Evidently the AO has misguided herself for the reason best known. Even a rudimentary analysis would indicate that there was no need to make such an inference and addition thereon. The very edifice and the substratum based on which the addition is made does not exist and appears to be a wild imagination. These clarifications could have been submitted by the assessee and examined by the AO had the same been brought to the knowledge of the assessee. The transaction is genuine, verifiable and can no stretch be called unexplained. Lack of understanding/inability to understand the explanation cannot be equated as unexplained. Loan form Snehalatha Singhi - The assessee has produced the standard details as is required to establish the genuinity of the transaction. Without calling for any further detail/explanation from the assessee, the AO has alleged that Snehalatha Singhi did not have source to advance loan to the assessee. The AO has not given any reason for making the said disallowance and thus is done without application of mind. The very edifice and the substratum based on which the addition is made does not exist and appears to be a wild imagination. There is no effort by the AO except summarily and erroneously causing a wrong addition. Onus on the assessee is not only limited to establish the identity of the person making the advance but also his capacity to make advances and it has to be proved that it had actually been received as a loan from the creditor. The documents produced by the assessee shall not only proving identity of the parties but also creditworthiness of the creditor who should have the financial capacity to make the advance in question, to the satisfaction of the AO, so as to discharge the primary onus. The ld. AO is duty bound to investigate the creditworthiness of the parties, verify the identity of the creditors and ascertain whether the transaction is genuine or these are bogus entries in the name of lenders. If the enquiries and investigations reveal that the identity of the creditors to be dubious or default or lack of creditworthiness, then the genuineness of the transaction would not be established. In view of the above, we are of the opinion that it is appropriate to remit this issue in dispute to the file of NFAC/CIT(A) to carry out further enquiry on this issue as deemed fit and to decide accordingly. Appeal of the assessee is partly allowed for statistical purposes.

  ---

• 2024 (7) TMI 704
  Disallowance u/s 14A r.w.r.8D - suo-moto disallowance working done by the assessee - mandation to record satisfaction - HELD THAT:- Considering the fact that the investments made are in subsidiaries companies and that there is no movements in the investments during the year under consideration. We do not see merit in the findings given by the AO that the assessee should have incurred indirect expenses such as market report, telephone stationary, etc. for the purpose of investments. We are also of the view that the observations of the AO as extracted above cannot be considered to be recording of satisfaction, since the AO has not stated anything as to why the calculation of suo-moto disallowance is not acceptable by the AO and why he is not satisfied about the correctness of the said calculation. Therefore, there is merit in the alternate contention of the assessee that the AO has invoked section 14A without recording satisfaction and therefore, bad in law. The Hon'ble Supreme Court in the case of Maxopp Investments [ 2018 (3) TMI 805 - SUPREME COURT ] as given a finding that the AO needs to record satisfaction that having regard to the kind of the assessee suo-moto disallowance under section 14A is not correct. Thus, AO is not correct in invoking the provisions of section 14A without recording any satisfaction as to why the suo-moto disallowance computed by the assessee is not correct. Accordingly, we delete the disallowance made by the AO and direct the AO to restrict the disallowance to the suo-moto disallowance made by the assessee. Disallowance of ESOP expenses - non admission of additional claim before the Appellate - Authority HELD THAT:- we hold that the CIT(A) is not correcting in not admitting the claim of the assessee with regard to ESOP expenses. As relying on Biocon Ltd. [ 2020 (11) TMI 779 - KARNATAKA HIGH COURT ] we hold that the ESOP expenses claimed by the assessee an allowable expenditure u/s 37(1) of the Act. Accordingly, we direct the AO to allow the claim of the assessee. This ground of the assessee is allowed. Disallowance u/s 14A - as per DR Explanation inserted by the Finance Act, 2022 is clarificatory in nature and therefore, should be applied retrospectively - contention of Revenue that CIT(A) erred in not appreciating that the amendment brought in by Finance Act 2022 to section 14A whereby it has been clarified that the provisions of section 14A can be invoked when the assessee has investments which have the potentional of yielding exempt income and the amount of exempt income earned is not relevant in this context - HELD THAT:- We noticed that the Hon'ble Delhi High Court in the case of Era Infrastructure India Ltd. [ 2022 (7) TMI 1093 - DELHI HIGH COURT ] has considered a similar issue held the amendment of section 14A, which is for removal of doubts cannot be presumed to be retrospective even where such language is used, if it alters or changes the law as it earlier stood. Thus, we are of the considered view that the Explanation inserted by Finance Act, 2022 to section 14A is prospective in nature. Accordingly, ground raised by the Revenue is rejected. Disallowance of Broken period interest on securities - HELD THAT:- Considering that the facts for the year under consideration being identical, we are of the view that the issue of allowance of broken period interest on securities is covered by the decision of Co-ordinate Bench in assessee's own case for AY 2012-13 [ 2021 (9) TMI 7 - ITAT MUMBAI ] is applicable for the year under consideration also. Accordingly we see no reason to interfere with the decision of the CIT(A). This ground of the Revenue is dismissed. Disallowance of bad debts on credit cards - AO did not allow the claim of the assessee for the reason that the credit card bad debts were never taken into account for computing the income of the assessee and that the same does not represent the money lent in the ordinary course of business of banking - CIT(A) allowed the claim of the assessee stating that the services provided by the assessee is a banking service which is part of the lending activity - HELD THAT:- There is merit in the contention that the amount settled by the assessee to the merchants against the purchases made by the credit card holders is given in the normal course of business. Further we also noticed that in the case of Hotel Leela Ventures Ltd. [ 2018 (12) TMI 1637 - BOMBAY HIGH COURT ] while considering the applicability of deduction of tax at source under section 194H on the credit card charges has held that the amount of fees retained by the Bank is a fee charged by them for having rendered the banking services and cannot be treated as commission or brokerage. Combined reading of the RBI Circular and the decisions of the Hon'ble High Court and the Co-ordinate Bench leads us to the conclusion that the bad debts arising out of the business of credit card services is part of the banking activities and the loss arising on account of un-recovered balance is arising out of the normal course of banking business. Accordingly, the same shall be allowed as a deduction under section 36(1)(vii) of the Act. We, therefore, uphold the decision of the CIT(A) in allowing the claim of the assessee. The ground raised by the Revenue in this regard is dismissed. Disallowance towards provision for debit and credit card reward points - AO held that the provision made is a book entry and is not a real expenditure incurred by the assessee - CIT(A) deleted the disallowance stating that the assessee has followed a scientific basis for arriving at the provision and therefore, the same is not a contingent liability - HELD THAT:- We noticed that the AO has made the disallowance based on the difference between the closing provision as of 31.03.2016 and the subsequent utilization and came to the conclusion that the provision made by the assessee is excess. The CIT(A) allowed the claim of the assessee stating that the provision made on the basis of actuarial valuation cannot be held to be an ascertained liability since the actuarial valuation takes into consideration various factors such as discount available to the Bank on purchase, customer leaving the credit cards is without redeeming the points, customer losing eligibility to redeem points, etc. Considering the fact that in the expert advisory committee of the ICAI, it is stated that the liability towards reward points on credit and debit cards should not be limited to the points expected to be redeemed in a particular period such as next year and that the actuarial report based on which the provision is made takes into consideration all the relevant factors with regard to the reward points, in our considered view there is merit in the claim of the assessee that the provision made towards reward points on credit and debit cards should be allowed as a deduction. No infirmity in the decision of the CIT(A) in allowing the claim of the assessee with regard to the provision for reward points on credit and debit cards. This ground of the Revenue is dismissed. Disallowance of revised claim for deduction u/s 36(1)(viia) - AO did not allow the revised claim by the assessee stating that the revised claim during assessment proceedings cannot be allowed without filing the revised return of income relying on the decision of Goetz India Ltd. [ 2006 (3) TMI 75 - SUPREME COURT ] - CIT(A) allowed the revised claim of the assessee for the reason that the assessee has not made a new claim but has asked for re-computation of the deduction claimed which is based on re-classification of the existing branches into Rural and Urban branches which was not available at the time of filing the return of income - HELD THAT:- It is a settled position that when the assessee has not made a fresh claim but has only revised the claim which is already made in the return of income, the disallowance cannot be denied on the ground that the additional claim is not made by filing the revised return of income. In assessee's case it is an admitted position that the assessee has not made a fresh claim under section 36(1)(viia) but has only re-computed the amount of claim based on the fresh data made available with respect to the classification of branches into Rural and Urban. Therefore, we are inclined to agree with the decision of the CIT(A) and accordingly, direct the AO to verify the revised claim and allow the same in accordance with law. It is ordered accordingly. This ground of the revenue is dismissed.

  ---

• 2024 (7) TMI 703
  Assessment u/s 153C - addition u/s 69A - Undisclosed cash transaction from undisclosed sources - entries pertaining to the assessee firm based on the excel sheets found in the electronic devices seized during the course of search in the case of Christy group of companies - assessee has challenged additions made by the Assessing Officer towards alleged cash transactions not recorded in the books of accounts of the assessee, on the basis of seized excel sheets u/s. 69A. HELD THAT:- In order to impart life and evidentiary value to the alleged excel sheets there must be statement recorded pertaining to those transactions from the person who is having control over the electronic devices and also from the searched person and these statements should be confronted to the appellant firm for getting sanctity that these transactions had actually being taken place. However, no such exercise has been carried out by the AO before making additions u/s. 69A of the Act. Further, the appellant firm has denied that there are any transactions outside the books of accounts. Therefore, once the appellant firm has denied the transaction outside the books of accounts, the AO has to prove with evidence that alleged cash transactions recorded in excel sheets were belongs to the assessee. However, no such effort was made by the investigation department and the AO. As in Shadi Ram Ganga Prasad, SP Kanodia and Smt. Premlatha Kanodia [ 2010 (4) TMI 1199 - ALLAHABAD HIGH COURT] where it has been held that the loose papers found from the possession of a person during the search can be used to raise a presumption against the said person only - the said loose sheets cannot be held against the parties whose names appear therein, unless the person from whose possession it was recovered admits in his statement that the entries in the loose sheet relate to the transaction made by such parties. As no efforts were made by the department to establish the nexus of the assessee with the undated and unsigned printout found during the search and to corroborate the contents of the said printout to arrive at a definite conclusion that the assessee derives such alleged income. Entries of the loose papers which were seized were not corroborated with any other evidence on record and no enquiry or verification was made and thus, no additions can be made u/s. 69A - See Umesh Israni [ 2019 (4) TMI 1947 - BOMBAY HIGH COURT] Decided in favour of assessee. Revenue has taken a ground in light of alleged two set of accounts maintained Tally1 and Tally 2 by the assessee group and argued that, the appellant is in the practice of replacing the invoices not checked by any Government authorities in the accounted Tally - In our considered view the ground taken by the revenue is devoid of merits, because the AO neither considered so called Tally1 and Tally 2, nor made any additions based on said evidences in the assessment order in respect of additions made u/s. 69A of the Act. Therefore, in our considered view the ground of appeal taken by the revenue fails. Appending two zeros to value recorded in alleged excel sheets, the AO has added two zeros to values recorded to excel sheets for assessment year 2018-19 2019-20 only - When the bank entries is matching with the books of accounts of the assessee without appending two zeros, the question of appending two zeros to cash entries alone is totally incorrect. Since, the payment through bank noted in seized excel sheets are matching with the corresponding entries found in the bank statement without need to append two zeros, it is considered that the payments through cash found noted in the same excel sheet cannot be construed by adding two zeros to the said amounts. If the payments through cash alone are considered by adding two zeros and the payment through bank are considered in the manner in which they appear in the excel sheets, the totals of the payments column and the receipts column will be grossly different from the total mentioned in the excel sheet. It is therefore clearly evident that, all the amounts mentioned in the excel sheets, regardless of whether they are cash transactions or bank transactions are the actual amounts without suppression of two zeros at the end. Therefore, we are of the considered view that the AO is erred in appending two zeros to the cash transactions appearing in the seized excel sheets and same is untenable. Undisclosed cash transactions - Since, the cash payments are made out of cash receipts to the extent of the available cash receipts, aggregating the cash receipts as well as cash payments for determining the undisclosed income results in exaggerated amount of such income. It is further noted that, when the AO is not able to identify the nature of cash receipts or payments then the best is to net off the cash receipts against the cash payments to arrive at undisclosed income. Therefore, findings of the facts recorded by the ld. CIT(A) with regard to the manner of computing undisclosed income appears to be reasonable and acceptable. Thus additions made by the AO u/s. 69A of the Act towards alleged cash transactions recorded in excel sheets found during the course of search proceedings of Christy Group in the premises of Shri. P. Karthikeyan, without there being any corroborative evidence is unsustainable in law. The ld. CIT(A), after considering relevant facts has rightly deleted additions made by the AO - Decided in favour of assessee.

  ---

• 2024 (7) TMI 702
  Assessment u/s. 144 r.w.s. 153C - jurisdiction to assess income of person other than the searched person - unexplained investment u/s 69B - difference in consideration between sale agreement and registered deed in respect of purchase of properties by the assessee - HELD THAT:- In the present case, as per satisfaction note dated 17.09.2020 recorded by the AO [DCIT, Central Circle 2(1)], Chennai, it is clearly evident that the AO has recorded satisfaction u/s. 153C of the Act, on the basis of sale agreement dated 01.04.2015 and two registered sale deeds dated 25.08.2015 which were found and impounded during the course of search in appellant s own case on 05.07.2018. Therefore, we are of the considered view that the satisfaction note recorded by the Assessing Officer u/s. 153C of the Act to assume jurisdiction to assess income of person other than the searched person based on material found during the course of survey in appellant s own case is invalid and unsustainable in law. In so far as arguments of the DR that, the survey u/s. 133A of the Act in the case of the assessee is triggered in pursuant to search action u/s. 132 of the Act conducted in the case of M/s. Christy Fried Gram Industry does not alter the legal position that, proceedings u/s. 153C of the Act can be initiated only when the Assessing Officer of the searched person records a satisfaction that any money, bullion or other valuable article or thing seized or requisitioned, belongs to or any books of accounts or documents seized or requisitioned pertains to or any information contain therein relates to a person other than the person referred to in section 153A of the Act. Therefore, mandatory condition to invoke jurisdiction u/s. 153C of the Act is not satisfied and thus, notice issued by AO u/s. 153C and consequent assessment order passed u/s. 144 r.w.s. 153C of the Act is illegal and unsustainable in law. Merely because search and survey are carried out simultaneously at several places, material found during the course of survey does not authorize the Assessing Officer to make assessment u/s. 153C of the Act - See Sai Shraddha Enterprises [ 2022 (12) TMI 1359 - ITAT MUMBAI] No error in the reasons given by the ld. CIT(A) to annul the assessment order passed by the Assessing Officer u/s. 144 r.w.s. 153C - reject grounds taken by the revenue. Addition u/s 69B - whether the assessee is able to explain source for purchase of property and is there any unexplained investment in respect of agreement of sale dated 01.04.2015 as alleged by the AO? - Though the assessee has disclosed purchase of properties as per agreement of sale dated 01.04.2015 and filed return of income u/s. 139 of the Act, the Assessing Officer completed the assessment without examining the said documents on the allegation that the assessee had not furnished any information in response to notices issued u/s. 142(1) of the Act. In our considered view, in a case of best judgment assessment u/s. 144 of the Act, the AO is required to apply his mind to the material already available on record such as return of income, tax audit report, financial statements etc., to the extent of which they are relevant to the issue under consideration. Adherence to Rule 46A regarding additional evidence - AO did not make any attempt to verify documents before arriving at the conclusion that the assessee has paid on-money for purchase of property. From the above, it is undoubtedly clear that the AO has passed the assessment order without application of mind and thus, when the CIT(A) after considering return of income and financial statements allowed relief, it cannot be said that there is a violation of rule 46A of the Income tax Rules, 1962. There is no merit in the contention of the revenue that the Assessing Officer lost an opportunity of examining the source of capital contribution of the partners and valuation of machineries as per sale agreement due to the omission to call for a remand report is not tenable. Since, the scope of the assessment u/s. 153C of the Act is strictly limited to the seized material in the case of the searched person, because the assessment for the instant assessment year 2016- 17 is unabated assessment. In the present case, the department did not unearth any seized material which pertains, or contains any information relating to the appellant and thus, it is legally not permissible for the Assessing Officer to examine the source of capital contribution from partners and valuation of machinery for the purpose of making additions. Therefore, we are of the considered view that there is no merit in arguments of the ld. DR present for the revenue and thus, rejected. AO erred in making additions towards purported on-money payment for purchase of properties as per agreement of sale dated 01.04.2015 and two registered sale deed dated 24.08.2015 u/s. 69B - Decided against revenue.

  ---

• 2024 (7) TMI 701
  Income taxable in India or not - Taxability of payment received under Offshore Supply Contracts - whether amounts received by the appellant company from the Offshore Supply Contracts are covered by the provisions of section 44BBB and consequently liable to tax in India? - HELD THAT:- We noticed that the Co-ordinate Bench in assessee's own case has considered the same issue for earlier AYs and has been consistently holding that the receipt towards offshore supply contract cannot form part of the business income chargeable to tax under section 44BBB. As decided in AY 2007-08 [ 2017 (4) TMI 758 - ITAT MUMBAI] though the contract was a composite and an indivisible one as well as a non-resident assessee was required to perform certain functions to the satisfaction of the buyer after completion of the sale of the equipment, the income relating to offshore supply of equipment was not chargeable to tax in India. We heard the arguments of both the parties on the contention that the income from service contract should not be taxed under section 44BB of the Act. It is now settled position that the ld. DR cannot improve the case of the AO and therefore, we are unable to accept the without prejudice contention raised by the ld. DR. Further, we noticed that the Department has not raised this specific contention even before the Hon'ble Bombay High Court where the following question of law has been raised by the Department. Assessee appeal allowed.

  ---

• 2024 (7) TMI 700
  Revision u/s 263 - gain on sale of agricultural land which was an urban agricultural land - assessee has sold an agricultural land which was an urban agricultural land but the same was treated as agricultural land not exgible to capital gains tax - HELD THAT:- During the course of the proceedings u/s. 263 of the Act the assessee accepted that properties are in question is a capital asset under the IT Act. On such concession and finding that the impugned asset was a capital asset assessment was set aside by the Pr. CIT. Thus, as the sale consideration of impugned land is exigible to capital gains tax as per relevant provisions of the Act and, therefore, we do not find any error or infirmity in the order of the Pr. CIT and decline to interfere. Appeal of the assessee is dismissed.

  ---

• 2024 (7) TMI 699
  Registration u/s 12AB - CIT concluded that the section 8 company is undertaking business activities based on the agreements submitted during proceedings u/s 12A(l)(ac)(iii) of the IT act 1961. During pursuing of registration before the Rajasthan Public Trust Act, 1959, the assessee by wrong advised had withdrawn the application filed before the ld. CIT(E). But later on, the registration under Rajasthan Public Trust was not required as the assessee is already registered under Companies Act - As per AR during the course of the proceedings before the Id. CIT (Exemption) an objection was raised that the registration of even the Companies registered under the Companies Act, 2013, will be required to be registered under the Rajasthan Public Trust Act, 1959 HELD THAT:- The assessee is registered under the Companies Act 2013. By wrong advised the assessee had withdrawn the application of registration u/s 12AB of the Act, for pursuing registration under Rajasthan Public Trust. Finally, the assessee came to know that the state registration is not required if the trust registered under the Companies act. The assessee requests to restore the application of registion u/s 12AB of the Act. AR fully relied on the Circular No. 14(XL-35) of 1955 dated 11/04/1955 that the department cannot take the advantage of ignorance of an assessee. Here, the revenue has not taken any advantage of the ignorance of the assessee. The assessee by wrong advised or under different impression had withdrawn the application for registration filed before the CIT(E) u/s 12A of the Act. We find that the order of the ld. CIT(E) is well accepted and need not be intervened by us. Accordingly, the appeal filed by the assessee is duly dismissed.

  ---

• Customs

• 2024 (7) TMI 698
  Liability and responsibility of customs department in created hurdles in getting hurdle in issuing Exit Permit to the petitioner - Petitioner was acquitted on merit - Smuggling - baggage rules - gold - prohibited/contraband item - Section 135 (1) (i) of the Customs Act, 1962 - HELD THAT:- It is apparent from the record that conduct of the respondent No. 2 is not only wrongful and vindictive but it amounts to gross abuse of its powers in restricting the petitioner to leave for her country without any justification. It has been rightly argued by the learned Counsel for the petitioner that conduct of the respondent No. 2 is reprehensible and unbecoming of a responsible officer/s of the Customs Department. The prosecution does not say that the petitioner had violated conditions of VISA. The petitioner, who is a lady, having left her country way back in 2019 with two children behind should not have been troubled and harassed by the Customs Department as it is apparent from the record - This is a fit case in which this Court would invoke it s powers under Section 482 of the Cr. P.C for doing complete justice. The power under Section 482 of the Cr. P.C is to be exercised ex debitio justitiae to prevent abuse of Court. It should not, however, be exercised to stifle legitimate prosecution. The power has to be exercised very sparingly and with circumspection, that too, in the rarest of rare cases. The whole purpose is to advance justice and not to frustrate it - There is sufficient evidence on record bearing on the conduct of the respondent No. 2 justifying some remarks which is necessary for the decision of the case as an integral part thereof to animadvert that conduct. In case of ANWAR VERSUS THE STATE OF J. AND K. [ 1970 (7) TMI 83 - SUPREME COURT] , it was held that the rights under Articles 20, 21 and 22 are available not only to citizens but also to persons which would include non-citizens . Article 20 guarantees right to protection in respect of conviction for offences. Article 21 guarantees right to life and personal liberty while Article 22 guarantees right to protection against arbitrary arrest and detention. These are wholly in consonance with Article 3, Article 7 and Article 9 of the Universal Declaration of Human Rights, 1948. Apart from the right of the petitioner to get Exit Permit within two weeks from the date of passing of this order, she needs to be adequately compensated for the mental agony, trauma and sufferings undergone by her due to the conduct of the respondent No. 2. Respondent No. 2 Union of India shall pay an amount of Rs. 10,00,000/- to the petitioner. Petition allowed.

  ---

• 2024 (7) TMI 697
  Refund claim of Special Additional Duty (SAD) paid on the imported goods - rejection on the ground that Chartered Accountant certificate does not specify how he has arrived at the conclusion that the MRP/RSP does not include SAD - HELD THAT:- It is an admitted fact that at the time of import by the Appellant, there were two prevailing Notifications. The N/N. 102/2007 was covering all the goods imported for trading purposes, whereas N/N. 29/2010 was available for pre-packaged goods intended for resale and other specified goods in the Notification. There was no restriction on the importers to avail the benefit of either Notifications. Moreover, the issue is squarely covered by the decision of the Tribunal in the matter of M/s Suburban Engineering Works (Cal.) Pvt. Ltd. [ 1990 (12) TMI 245 - CEGAT, CALCUTTA] , where it is held that ' In this case, the refund is not claimed under Section 27 of the Customs Act. The appellant is not requesting for change of the assessment made at the time of importation. For grant of refund of SAD as per notification 102/07-Cus. re-assessment of Bills of Entries are not prescribed under the notification.' Regarding reliance on the letter F. No. 334/1/2010-TRU dated 26.02.2010, it is explaining the scope of N/N. 29/2010, wherein outright exemption from SAD was provided to goods imported in pre-packaged form and intended for retail sale. In the absence of any specific provision superseding the N/N. 102/2007 dated 14.09.2007 in Notification No. 29/2010, when it was introduced, it is open for the Appellant to opt for either of them and in the case the appellant has opted for N/N. 102/2007 and paid SAD at the time of import, which cannot be considered as admission of the liability to pay SAD. The appellant is eligible for refund of SAD under N/N. 102/2007 dated 14.09.2007 - the impugned order is set aside - appeal allowed.

  ---

• 2024 (7) TMI 696
  Valuation of imported goods - Polyurethane Sealant - enhancement of value only on the basis of the appellant s acceptance letter whereby the price was enhanced 5 times of the declared value - HELD THAT:- The value of imported goods has been enhanced solely on the basis of acceptance letter dated 26.07.2018 given by the appellant - this issue has been considered by this Tribunal in the case of CMR Nikkei India Pvt. Ltd [ 2022 (8) TMI 114 - CESTAT AHMEDABAD] where it was held that ' in spite of the admission on behalf of the importer, the Revenue is required to satisfy the requirements prescribed under Section 14 of the Customs Act read with Customs Valuation Rules before any enhancement of valuation.' It is found that except the acceptance letter by the appellant no contemporaneous import price has been relied upon on the basis of documentary evidence. Therefore, there is no reason to enhance the value. Accordingly, both the orders of the lower Authorities are incorrect and illegal in the light of the settled legal position. As regards the reliance placed by the revenue in the case of Sukhdev Exports Overseas Vs. Commissioner of Custom (Preventive), New Delhi [ 2023 (2) TMI 1038 - CESTAT NEW DELHI] , it is found that in that judgment the fact is that the assesse had accepted the price in statement given under Section 108 of the Customs Act. However, there is no such statement under Section 108 recorded in the present case. Therefore, the decision of Sukhdev Exports Overseas Vs. Commissioner of Custom (Preventive), New Delhi [ 2023 (2) TMI 1038 - CESTAT NEW DELHI] carrying different facts is not applicable in the present case. The impugned order set aside - appeal allowed.

  ---

• 2024 (7) TMI 695
  Revocation of customs broker license - levy of penalty - misdeclaration of description value and quantity of the goods - non-verification of antecedents of the importer - HELD THAT:- The appellants claim that they have verified the IEC No. etc. on the Government website and they had no reasons to disbelieve the documents. We find that to this extent the contentions of the Custom Broker are acceptable as in terms of Regulation No.11(n) of CHLR 2018, the Custom Broker is required to verify through independent and authentic sources and he is neither required nor has any wherewithal to conduct an investigation into the importer s business. Regarding other allegations, it is found that though it is alleged that the Custom Broker did not exercise due diligence and did not apprise the importer of various Rules, Procedures and Prohibitions thereof. Except for bald allegation no evidence has been adduced to allege that the Custom Broker had the previous knowledge of mis-declaration of the value and contents of the consignment. Department merely mentions that the value declared was three and odd lakhs of rupees whereas the actual value was more than Rs.75 Lakhs and the fact in itself shows the culpability of the Custom Broker. This contention is not accepted as it is not alleged with any evidence. The act of the Custom Broker cannot be said to be in violation of the CHLR 2018 and therefore, no case has been made to revoke the license of the Custom Broker, jeopardizing the livelihood of the Custom Broker and their employees thereof. However, looking into the fact that the appellant has been filing Bills of Entry on behalf of a series of mis-declared imports, it is found that the appellants need to be suitably penalized so as to act as a deterrent for any future misdemeanor. The impugned order is set aside as far as the revocation of the license of Custom Broker is concerned - the penalty imposed is, however, upheld - appeal allowed in part.

  ---

• Corporate Laws

• 2024 (7) TMI 694
  Invocation of arbitration clause in the Retirement Deed and appointment of an Arbitrator - alleged manipulation of accounts by the respondents. Whether the impugned order is in aid of the main relief? - HELD THAT:- The tests to be applied to Section 17 are somewhat akin to those applicable to interim measures passed in a civil suit under Order XXXIX of the Code of Civil Procedure. Although Section 19 (1) of Arbitration and Conciliation Act, 1996, stipulates that the provisions of the Code are not applicable to arbitral proceedings, nevertheless, the principles thereof apply, as the nature of interim measures which can be granted under Section 17 are equivalent to that under Order XXXIX of the Code. Section 17 (1)(ii) envisages interim measures of protection in respect of certain matters, including the preservation, interim custody or sale of goods which are the subject-matter of the arbitration agreement, securing the amount in dispute in the arbitration, detention, preservation or inspection of any property etc. which may be necessary or expedient for the purpose of obtaining full information or evidence, interim injunction or appointment of receiver and such other interim measures of protection as may appear to the Arbitral Tribunal to be just and convenient. A broad analogy between interim measures under Order XXXIX of the Code and Section 37 of the 1996 Act is thus inevitable. The last part of Section 17 (1) provides that for such purpose, the arbitral tribunal shall have the same power for making orders as the Court has for the purpose of and in relation to any proceedings before it, thereby importing the governing guidelines of similar orders passed by a Civil Court. In fact, sub-section (2) of Section 17 clearly stipulates that any order so issued under Section 17 shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure in the same manner as if it were an order of the Court, further strengthening the above view. Hence, the entire focus of Section 17 is to preserve the property in statu quo till final disposal of the arbitral proceeding - this issue is decided in the negative, holding that the impugned order is not in aid of the main relief. Whether the impugned order has the effect of granting the final relief, thus rendering the arbitral proceedings infructuous? - HELD THAT:- Although the impugned order is not in aid of the main relief, if it is implemented, the effect will be that the very plinth of the claimant s challenge might be rendered infructuous. In the event the claimant succeeds, the financial accounts of the firm will already be a part of the income tax returns filed by the firm, containing the claimant s signature as well. The learned Arbitrator would not have the jurisdiction to reverse such filing even if the claimant ultimately succeeds in his challenge, since the same is not only beyond the scope of the dispute before the Arbitrator but the Income Tax Authorities are not parties to the arbitration agreement. Hence, in a sense, the impugned order has the effect of rendering the arbitral proceedings infructuous. Thus, this issue is held in the positive. How far are the Accounting Standards binding on the Income Tax Authorities? - HELD THAT:- A comprehensive assessment of the document relating to accounting standards issued by the Institute of Chartered Accountants of India, on which the respondents rely to support the impugned order, itself clearly enumerates that the auditors are entitled to disown their liability for the statements made therein. It is entirely the responsibility of the management for the preparation of the financial statements giving a true and fair view of the financial position and it is the management which gets the flak for inaccuracy or suppression in the same. SA 706, the Auditing Guideline, is issued by the Institute of Chartered Accountants of India and comprise of mere guidelines to its own members. Hence, those can at best guide the auditors in their functioning. In fact, there is some doubt as to how far they are binding on the auditors themselves as well. The said accounting standards cannot be stretched so far has to be binding on any third party apart from the institute and its members. Those are not even binding on the clients of the auditors, let alone the Income Tax Authorities. Hence, there is nothing in any law produced before this Court or the accounting standards themselves to indicate that they are binding in any manner on the Income Tax Authorities - the issue is decided in the negative, observing that the accounting standards are not binding on the Income Tax Authorities at all. Whether the order of the Arbitral Tribunal is binding on the Income Tax Authorities? - HELD THAT:- It is well-settled that legal causes in the nature of matters in rem are not inherently arbitrable and fall beyond the pale of the Arbitration and Conciliation Act, 1996, being under normal circumstances non-arbitrable. Hence, from the perspective of the Income Tax Authorities, no order of the arbitral tribunal, which is an adjudicatory Authority of issues confined to the signatories to the arbitration agreement, can bind the said authority in any manner. The Income Tax Authorities are bound by the provisions of the statute which creates them that is the Income Tax Act, 1961 and function within the confines of the said statute - The observation of an Arbitrator, that too in an interlocutory matter in a dispute restricted to private parties who were signatories to the arbitration agreement, cannot even concern the Income Tax Authorities, let alone to be binding on them. Hence, the present issue is decided in the negative, holding that the order of the arbitral tribunal is not binding on the Income Tax Authorities at all. Whether the claimant/petitioner can be compelled to sign the financial statements at this stage despite the disputes raised by him to the accounts? - HELD THAT:- The 1961 Act operates in a completely different footing, at least insofar as Sections 271 and 271A are concerned. The said provisions stipulate penalties for deliberate suppression or concealment of the real state of affairs in financial statements and in documents as well as returns and also penalize inaccurate recordings in the financial statements of a firm. Such consequences are direct and criminal in nature, whereas the evidentiary value of recordings in a balance sheet as admission, which was being considered in ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED VERSUS BISHAL JAISWAL ANR. [ 2021 (4) TMI 753 - SUPREME COURT] was merely in respect of a rule of evidence. A non-admission of a civil debt by filing of balance sheets is entirely different from penalties imposed for deliberately filing inaccurate balance sheets or concealment of the actual state of affairs in financial statements, which operate in entirely different fields - this issue is answered in favour of the claimant/petitioner and against the respondents inasmuch as the claimant/petitioner cannot be compelled to sign the financial statements at this stage, in the teeth of the disputes raised by him regarding the accounts, before adjudication of the cardinal issue of veracity of the accounts, which is the subject-matter of dispute in the main arbitral proceeding. The impugned order suffers from utter lack of jurisdiction and authority and is vitiated by a patent misreading of the provision of Section 271 and 271A of the Income Tax Act, 1961. The order is also passed beyond the authority and jurisdiction of the arbitral tribunal as well as violative of the principle embodied in Article 20 (3) of the Constitution of India and thus cannot survive judicial scrutiny. Petition allowed.

  ---

• Insolvency & Bankruptcy

• 2024 (7) TMI 693
  Interpretation of statute - whether the Certified Copy , so prescribed for the purposes of preference of an Appeal, could be taken up as a substitute to the Certified Free Copy , provided under Rule 50 of the Rules to the parties concerned? - HELD THAT:- The issue came up for consideration, before this Tribunal in MUNAGALA ROJA HARSHA VARDHINI VERSUS VARDHANSMART PRIVATE LIMITED [ 2024 (3) TMI 1333 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL CHENNAI] and this question was quite elaborately dealt with by this Tribunal by the Bench of Three Members, wherein, Para 12 onwards the Court has dealt with as to what would be the factors to determine the Certified Copy, in pith and substance mean for the purposes of preferring of an Appeal, under Section 61 of the I B Code, 2016. The issue was laid to rest, by the Three Member Bench while drawing its implication from the Judgment of V. Nagarajan V. SKS Ispat [ 2021 (10) TMI 941 - SUPREME COURT (LB) ] where the Three Member Bench of this Tribunal, had answered the aforesaid question after dealing with the various Authorities that, in those cases where the Appellant before the NCLAT, has not applied for a Certified Copy, as prescribed under Section 76 of the Evidence Act, to be read with Rule 2 (9) of the NCLT Rules, after raising a demand and payment of the Requisite Fee, the Free Copy of the Impugned Order will not be treated as to be as good as a Certified Copy, contemplated under Rule 22 (2) to make the Appeal maintainable. Since, the necessity of filing of an Appeal, along with the Certified Copy and the distinction between the Free Copy and the Certified Copy , as to the basis for filing of an Appeal has already been decided, by the larger Bench of this Tribunal, in that eventuality and in the light of the Chandra Prakash Judgment, the reference is answered accordingly, since, the principle of Limitation has already been settled that the Appeal would lie on the basis of the Certified Copy of the Judgment, and not on the basis of Free Copy. Hence, the reference is answered accordingly. Holding thereof the Free Copy provided under Rule 50 of NCLT Rules, 2016, cannot be treated as to be a Certified Copy referred to under Rule 22(2) of NCLAT Rules, 2016, and the Free Copy will not satisfy to be a Certified Copy, as defined under Section 2(j) of the NCLT Rules, to be read with Section 76 of the Evidence Act.

  ---

• 2024 (7) TMI 692
  Validity of Resolution Plan - classification of the Appellant's Claim - Locus to challenge the Resolution plan approved by CoC, as the Appellant is an individual member of Financial Creditor - genuine homebuyer or a speculative investor - HELD THAT:- From the definition of the Code of Homebuyers as Financial Creditors as contained in Section 5(8)(f) along with two explanation along with definition of Allottees and Real Estate Projects as contained in Section 2(d) and 2 (zn) of the RERA Act, 2016, it is clear that any allotee who has paid the amount in the Real Estate Project shall be deemed to be Financial Creditor and the said amount paid to Real Estate Developers will be treated having commercial effect of the borrowing - The Code or the RERA Act, 2016 do not differentiate anywhere between the Homebuyers who purchase units for his own consumption or the Homebuyers or unit purchaser who purchase the multiple units for commercial purposes. It becomes clear that whether the homebuyer/ allottee is genuine homebuyer or genuine allottee or speculative homebuyers/ allottee but if he has paid the money for acquisition of such properties or given the advance, such allottee/ homebuyer shall be treated as Financial Creditor in terms of Section 5(8)(f) of the Code . Hence, the pleadings of the Respondent No. 2 in this regard that the Appellant is speculative investor will not affect the rights of the Appellant to be treated as the Financial Creditors. From judgment of Essar Steel India [ 2019 (11) TMI 731 - SUPREME COURT ], it is clear that once the CoC approves the Resolution Plan by the requisite majority, the same cannot be challenged by any individual unit buyer/ homebuyer like the Appellant in the present appeal - This makes absolutely clear that the Resolution Plan may provide different categories of creditors and different payment schemes, as seen in the present case which is valid and legally enforceable. The ratio of the above judgment is very explicit and clear and therefore we find that the Appellant has no locus in the present appeal to challenge the Resolution Plan or his classification in category 4 of the Resolution Plan on his own as individual homebuyer/ allottees. There are no merit in the appeal. The appeal devoid of any merit stands dismissed.

  ---

• Service Tax

• 2024 (7) TMI 691
  Violation of principles of natural justice - opportunity of personal hearing not provided - Classification of activity - Supply of Tangible Goods Service or Deemed Sale? - activity of leasing of Air Separation Plant by the Appellant to its customers for manufacturing industrial gases such as oxygen and nitrogen - HELD THAT:- It is found that out of four show cause notices, in three show cause notices dated 26.07.2013, 18.11.2013 16.10.2014, the Adjudicating Authority has not granted the personal hearing and passed the ex-parte order. It is also observed that in the show cause notice dated 16.10.2014, there is an additional issue that whether the activity of management, maintenance and repair service can be categorized as supply of tangible goods service or otherwise. Therefore, by passing a common order in respect of all these show cause notices where the effective hearing was not granted, the order is suffered from principles of natural justice. The whole issue needs to be reconsidered after granting the sufficient opportunity of personal hearing - Appeal allowed by way of remand.

  ---

• 2024 (7) TMI 690
  CENVAT Credit - input service which is attributed to output service that is stock broker services and other banking and financial services - case of the department is that since the appellant, apart from providing service to their client also carrying out the activity of trading for themselves appellant did not entitle for CENVAT Credit - time limitation. CENVAT Credit - HELD THAT:- On the plain reading of the Rule 14, it is clear that the CENVAT Credit can be recovered under Rule 14 of CENVAT Credit Rules only in case where such CENVAT Credit was availed wrongly. In the present case undisputedly the appellant is engaged in providing the output service that is stock brokerage service and other financial service. Therefore, the appellant s output service is taxable service which is provided on payment of Service Tax. As regards the activity of the appellant that is stock trading for their own the same is not output service as this activity is not carried out for any other person - In the present case admittedly the provisions of Rule 6(3) was neither invoked in the show cause notice nor invoked for the recovery of the CENVAT Credit under Rule 6 (3) of CENVAT Credit Rules therefore since the availment of credit is in is in order. In the peculiar facts of the present case, there is no machinery provision for recovery of CENVAT Credit, hence the demand of CENVAT Credit is not tenable. Time limitation - HELD THAT:- The fact which is not under dispute reveals the act of the appellant and the appellant had declared the details of credit taken by them on various input services during the period in dispute in compliance of the statutory requirement of filing monthly return - It is also observed that on merit the eligibility of CENVAT Credit even when the appellant provide the taxable output service or activity which is for themselves under which no Service Tax was paid is highly debatable, particularly when the Department has not invoked Rule 6(3) for recovery of CENVAT Credit, no suppression of fact can be attributed towards the appellant. Therefore, the demand is also not sustainable on the ground of time bar - the recovery of CENVAT Credit in the present case is not tenable. The impugned order is set aside - Appeal allowed.

  ---

• 2024 (7) TMI 689
  Classification of services - Terminal Handling Charges or Port Service - engaging port authorities for getting containers of import and export cargo handled by the port authorities - HELD THAT:- It can be seen that container has been handled by M/s. Mundra International Cargo Terminal and the invoice has been raised on the appellant, in this invoice even Service Tax has been charged by the Port Authority namely M/s. Mundra International Cargo Terminal. This very fact makes it clear that actually the service of terminal handling has been provided by the port namely MICT and appellant is the service recipient in this case on behalf of his client. As it can be seen from the definition of port service, that it is imperative that port service has to be within port by port authorities or by any person authorized by the port. Since, it is very apparent from the record of the appeal that the appellant was not authorized person within port area, the activity undertaken by them does not fall under the category of port service. Reliance placed on the decision of this Tribunal on this issue in case of VELJI P. SONS (AGENCIES) P. LTD. VERSUS COMMISSIONER OF C. EX., BHAVNAGAR [ 2007 (8) TMI 35 - CESTAT, AHMEDABAD] where it was held that ' activities undertaken by the appellant does not fall under the category of Port Services. Thus, the activities under taken by the appellant during the period of demand does not fall under the category of port service - the impugned order set aside - appeal allowed.

  ---

• 2024 (7) TMI 688
  Determination of taxable value under Section 67 of the Finance Act, 1994 - differential amount worked out comparing the bank statement and ST-3 returns - HELD THAT:- It can be seen that although inquiry and investigation was carried out in the matter from 2009 to 2013, there is no averment in the show cause notice as to how the differential amount as per the bank statement can be said as derived from the consideration received by the appellant out of the activity of service under sub-section (44) of Section 65B of Finance Act, 1994. The statements of the appellant s accountants cannot be the basis to consider such amounts as taxable value without any corroborative evidence of actual provision of services against such amounts. Moreover, such statements are not relevant in absence of examination of deponents as per the mandate of section 9D of the Central Excise Act, 1944 applicable to the provisions of Finance Act, 1994. In the present matter the Adjudicating Authority has failed to follow the requirement of Section 9D of the Act applicable to the provisions of Finance Act, 1994 regarding examination in chief of witness, therefore the statements of persons are not relevant and cannot be relied upon. Since department has not provided any evidence or justification to substantiate their claim that the differential amounts represent the consideration received for rendering taxable services, demand of service tax is not tenable. The demand of service tax is liable to be set aside. Since demand of tax is not sustainable, penalty upheld under section 78 also cannot be sustained. As regards, penalty upheld under section 77 - the impugned order is not sustainable and is set aside - appeal allowed.

  ---

• 2024 (7) TMI 687
  Liability of service tax on trainings imparted by the appellant under the head Commercial training or Coaching service - Eligibility of composition scheme under Works Contract Service - Service Tax on Mandap Keeper services - Liability of service tax under Reverse Charge Mechanism on foreign remittances - Liability of service tax on Scientific Technical Consultancy received by the appellant - Liability of service tax on Grants-in-aid - Extended period of limitation. Liability of service tax on trainings imparted by the appellant under the head Commercial training or Coaching service - HELD THAT:- There is no dispute that the appellant provided training to farmers, students, teachers in the field of horticulture. Such training would enable the trainee to upskill themselves and carry forward the objective of the institute, viz., promotion of agricultural entrepreneurship. There is no dispute that such trainings did enable the trainees to seek employment in the field of their choice, or to improve the yield of the farmers by sharing and training them to the latest technological and other advancements in their field. Therefore, as long as there is the ability to seek employment or self-employment in terms of the explanation of the notification, the benefit of exemption cannot be denied, as has been held by this Tribunal in the case of M/s Frankfinn Aviation Services Pvt Ltd., vs Commissioner of Service Tax, New Delhi [ 2017 (3) TMI 1027 - CESTAT NEW DELHI ]. Consequently, the appellant is entitled to the exemption for the period prior to the amendment dated 27.02.2010 - As regards the demand for the subsequent period, the same would be taxable. However, the demand would be restricted to the normal period only. Eligibility of composition scheme under Works Contract Service - HELD THAT:- The dispute pertains limitedly in respect of the extension of benefit of the composition scheme without prior intimation to the Department. It has been submitted that the computation of demand is incorrect. It was also contended that the service tax in respect of works contract services has already been paid by the appellant by availing the composition scheme. It is observed that the impugned order has denied such benefit on the ground that neither the actual value of goods was provided by the Appellant nor an advance intimation about opting for the composition scheme - the appellant is eligible to avail the benefit of the Composition scheme, and it is noted that the appellant had already paid the Service Tax on the same. Therefore, the said demand is also not sustainable. Service Tax on Mandap Keeper services - HELD THAT:- It is clear that for any service to be taxable under mandap keeper service , the immovable property has to be let out for organizing any official, social or business function. In the present case, it has been submitted that the property was let out by the Appellant for conducting the seminars on horticulture only which is for the educational/academic purpose and would thus, fall outside the purview of mandap keeper service and hence, demand confirmed is not sustainable - the appellant s activity of renting out the property for holding of seminars by their clients is squarely covered by mandap keeper service. Hence, the demand is upheld for the normal period. Liability of service tax under Reverse Charge Mechanism on foreign remittances - HELD THAT:- The training services have been provided by M/s Stitching PTC Netherlands to trainers/managers in Netherlands, i.e. a place outside India. Thus, since the place of performance of such service is outside India, the same is not taxable. Liability of service tax on Scientific Technical Consultancy received by the appellant - HELD THAT:- In the instant case, what has been received is design of business and master plan, which as per the above decision cannot be classified as Scientific or Technical consultancy. Consequently, the demand under this head does not stand. Liability of service tax on Grants-in-aid - HELD THAT:- This issue stands decided by the Supreme Court in the case of Commissioner vs Apitco Ltd [ 2011 (5) TMI 1086 - SC ORDER] , wherein it upheld the Tribunal s order that grant-in-aid received from the Government for implementation of schemes were fully utilised for the said activity and no consideration was received for any service to the government, was not taxable - in the instant case, the grant-in-aid had been received from the government for the scheme and is therefore squarely covered by the aforesaid decision. Extended period of limitation - HELD THAT:- It is observed that no cogent evidence has been adduced for invocation of the extended period, or establish suppression of facts with an intent to evade tax. Therefore, the demand for extended period, and the penalties are set aside. However, the liability to interest will be recalculated as per the demand to be recalculated by the adjudicating authority. The impugned order is upheld to the extent indicated above by way of remand, and the appeal is allowed partially.

  ---

• Central Excise

• 2024 (7) TMI 686
  Classification of goods - LIV 52 Protec - goods misclassified as Animal Feed Supplement under Central Excise Tariff Heading 230990/23099010 of Central Excise Tariff Act, 1985 - it was held by CESTAT that 'the Liv 52 Protec Liquid in bulk is exported under the Chapter Heading 30039011.' HELD THAT:- It is not required to interfere in the matter - The civil appeal stands dismissed.

  ---

• 2024 (7) TMI 685
  Classification of goods - Suncros UVA Lotion/Gel/Hyclean Cream - to be classified as medicaments under Chapter Sub-Heading No. 3004 of the First Schedule to the Central Excise Tariff Act, 1985 or whether the same is classifiable as cosmetics under Chapter Sub-Heading No. 3304 of the First Schedule to the Central Excise Tariff Act, 1985? - invocation of extended period of limitation. Classification of goods - HELD THAT:- The appellant have produced ample evidences such as the ingredients used in the manufacture of the product namely UVA Lotion/Gel/Hyclean Cream, the package of the product and label states that product is to be sold by retail on the prescription of registered medical practitioner only. In such case the product can be administered by licensed cosmetologist, dermatologist or a qualified healthcare professional. It also states that the product is to provide comprehensive protection against UV rays that can cause skin damage, sun burn and skin cancer. As per the above facts the product prima facie classifiable under 3004 as medicaments - as per the nature of the product since the same being highly technical, a non technical person cannot be expected to arrive at conclusion about the classification of a product contains various drugs and chemicals. The adjudicating authority was suppose to either get the product tested or at least obtain an expert opinion from authorized and recognized independent pharma/chemical authority before deciding the classification. Therefore the observation of the learned Commissioner in the impugned order is based on incomplete/ premature material which needs to be reconsidered. Therefore on merit the matter should be remanded to the adjudicating authority. Extended period of limitation - HELD THAT:- There is absolutely no intention of the appellant to evade the payment of duty. Having said so we find that the objection was raised during EA-2000 Audit of the appellant s record, the appellant have been filing the ER1 return regularly wherein they have declared their product and also claimed the exemption notification under the classification 3004. In this position there are nothing which suggests that there is suppression of fact on the part of the appellant with intent to evade the payment of excise duty. Therefore the demand for the extended period is not sustainable on the ground of limitation. Therefore, the demand for the extended period is set aside without going into merit of the case in such demand. However the merit needs to be reconsidered by the adjudicating authority for normal period. The impugned order set aside - the demand for the extended period is set aside and for the demand under normal period, the matter is remanded to the adjudicating authority.

  ---

• 2024 (7) TMI 684
  Refund claim - International Competitive Bidding (ICB) as per Sl. No. 336 of Notification No.12/2012-CE dated 17.03.2012 - denial of exemption only on the ground that at the time of clearance of goods, the Appellants have not fulfilled the condition under clause (b) of condition No.93 of Customs Notification No.12/2012-Cus dated 17.03.2012, which provided that in the case of imports by a Central Public Sector undertaking, the quantity, total value, description and specifications of the imported goods are certified by the Chairman and Managing Director of the said Central Public Sector Undertaking - principles of unjust enrichment. HELD THAT:- When the condition was amended on 01.03.2015, it was not practically possible for the appellant to obtain a required certificate within the same month. Therefore, the appellant has chosen to clear the goods on payment of duty, subsequently, admittedly the appellant have obtained certificate. Thereafter all the conditions of Notification No. 12/12-CE dated 17.03.2012 and Notification No. 12/2012-Cus dated 17.03.2012 and conditions thereof stands complied with. In this position, merely because the certificate required for availing the exemption notification was not available at the time of clearance of the goods, the exemption could not have been denied. Piece of paper i.e. certificate is only a procedural requirement but the nature of supply is predominant for granting the exemption which was never been in dispute, after obtaining certificate the procedural requirement also stands fulfilled. It is a settled law by the Hon ble Apex Court in the various judgments that benefit of Notification can be claimed at any stage if otherwise the same is eligible to the assessee. Therefore even though at the time of clearance of the goods the appellant have paid the duty but after obtaining the certificate, all the conditions prescribed under notification stand complied with - In some of the judgments, it is categorically held that merely because at the time of clearance of goods certificate was not available, however the same was submitted later on the substantial benefit of exemption cannot be denied. Therefore, the issue is no longer res-integra. Principles of unjust enrichment - HELD THAT:- The adjudicating authority has categorically dropped the proceeding under Section 11B(2) holding that there is no unjust enrichment in this case. This observation was also endorsed by the Learned Commissioner (Appeals) in the impugned order. The appellant is eligible for exemption notification and consequential refund of the duty paid at the time of clearance of goods. Therefore, the impugned order is set aside - Appeal allowed.

  ---

• 2024 (7) TMI 683
  Disallowance of Input Tax Credit - appellant has not established that these services have been used directly or indirectly or in relation to the manufacturing of final products - HELD THAT:- When there is no dispute raised by the jurisdictional authorities against the input service distribution centres for availing the credit and distributing the same, the department cannot deny the credit at the end of the manufacturing unit on very vague allegations. The show cause notice does not make any specific allegation with respect to particular input service. In the appellant's own case for a different period the very same issue of disallowing credit at the manufacturing unit distributed by the Cost Centres and has been considered by the Tribunal in BHARAT HEAVY ELECTRICALS LTD VERSUS COMMISSIONER OF CENTRAL TAX (APPEALS-II) CGST CENTRAL EXCISE, CHENNAI [ 2018 (12) TMI 438 - CESTAT CHENNAI] - Almost all the services listed in the above table was held to be eligible for credit by the Tribunal, by the Commissioner (Appeals) and by the adjudicating authority as pointed out by the Ld. Counsel. The appellant has given the details of the case law in respect of each input service in the last column of the table. Outdoor catering services - HELD THAT:- It is seen that the services have been availed prior to 01.04.2011. So, also in the case of works contract services/ civil work these are availed for repair and maintenance as well as modernization and not of setting up of a factory. There is no allegation by the department that such civil works were availed for setting up of a factory. All the services are eligible input services. The credit cannot be denied on such vague allegations at the end of the manufacturing unit without disputing the credit availed by the input service distributor. The impugned order cannot sustain and is set aside - appeal allowed.

  ---

• 2024 (7) TMI 682
  Refund claim of duty paid under protest - whether the ground raised in the appeal that since M/s. BHEL had imported the goods by paying the duty under protest and so would have availed credit of the said duty and therefore the respondent is not eligible for refund is sustainable or not? - Rule 6(6)(vii) of CENVAT Credit Rules, 2004 - Principles of unjust enrichment. HELD THAT:- The bar under sub-rule (1) of Rule 6 not to avail credit of goods which are exempted from payment of duty is not applicable to inputs meant for use in the manufacture of finished products cleared to Mega Power Projects in terms of Notification No. 6/2006-CE. Further, in the present case, the respondent has filed the refund claim as an ultimate consumer and therefore whether the supplier M/s. BHEL has availed credit or not is of no relevance. The Department if aggrieved of wrongful availment of credit has to initiate proceedings against M/s. BHEL. The refund of the duty paid by the ultimate consumer cannot be denied alleging that the supplier has availed credit. When the duties are exempted for supplies made to Mega Power Project, the same cannot be frustrated by imposing conditions which are beyond the control of the respondent. In the present case, the power project has been constituted by 5 units each of the capacity of 270MW. There is no ground to differ with the view taken by Adjudicating Authority and the Commissioner (Appeals). Unjust enrichment - HELD THAT:- It is seen that both M/s. BHEL as well as EPIL have filed disclaimer certificates before the Department that the incidence of duty has been borne by respondent. Therefore there is no issue of unjust enrichment also - the Adjudicating Authority as well as the Commissioner (Appeals) have correctly analysed the refund claim and sanctioned the same. The appeal filed by the Department seems to be of misconception of facts and law. The appeal filed by the Department is dismissed.

  ---

• 2024 (7) TMI 681
  Violation of Rule 8(3A) of the Central Excise Rules, 2002 - default in payment of quarterly duty liability - HELD THAT:- This Bench in the case of CHERAN CEMENTS LTD. AND OTHERS VERSUS CCE TRICHY AND CCE COIMBATORE [ 2015 (8) TMI 99 - CESTAT CHENNAI] has held that 'demand of duty under Rule 8(3A) is unsustainable as the said Rule has been struck down by the Hon'ble High Court and the demand of duty and penalty imposed in the impugned orders is liable to be set aside.' There are no merit in the demands confirmed in the impugned orders and hence, the impugned order to this extent cannot sustain - appeal of Revenue dismissed.

  ---

• 2024 (7) TMI 680
  CENVAT Credit - outward transportation of goods - place of removal - appellant has availed credit from 2010-2011 upto 2014 in January 2015 - Time limitation. CENVAT Credit - outward transportation of goods - place of removal - appellant has availed credit from 2010-2011 upto 2014 in January 2015 - HELD THAT:- Rule 4 (7) of CCR 2004 was introduced only w.e.f. 1.9.2014. The time limit for availing the credit was introduced for the first time only from 1.9.2014. The appellant has availed accumulated credit upto December 2014 in January 2015 on invoices issued prior to 1.9.2014. The appellant has availed the credit within 6 months from the date of introduction of time limit in terms of Rule 4 (7) of CCR 2004. The said rule cannot be applied retrospectively. However, this issue is to be reconsidered by the original authority. Credit eligible on outward transportation of goods upto buyer's premises - HELD THAT:- The said issue has been considered by the Larger Bench of the Tribunal in M/S. THE RAMCO CEMENTS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUDUCHERRY [ 2023 (12) TMI 1332 - CESTAT CHENNAI-LB] . The Larger Bench has held that in each case the place of removal has to be ascertained on the basis of documents and if the place of removal is the buyer's premises, the assessee would be eligible for credit. It is also held that the place of removal has to be ascertained by applying the judgment of the Hon'ble Supreme Court in the case of COMMISSIONER CENTRAL EXCISE, MUMBAI-III VERSUS M/S. EMCO LTD. [ 2015 (8) TMI 200 - SUPREME COURT] and in the case of COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, AURANGABAD VERSUS M/S ROOFIT INDUSTRIES LTD. [ 2015 (4) TMI 857 - SUPREME COURT] ) as well as the decision of Hon'ble High Court of Karnataka in the case of BHARAT FRITZ WERNER LTD. AND MAPAL INDIA PRIVATE LIMITED VERSUS THE COMMISSIONER OF CENTRAL TAX, BANGALORE [ 2022 (7) TMI 352 - KARNATAKA HIGH COURT] . The circular issued by the Board dt. 08.06.2018 also clarifies as to the ascertainment of place of removal - if the appellant has included the freight charges in the price of the finished products cleared by them, they would be eligible for credit of the service tax paid on outward transportation of finished products. Time limitation - HELD THAT:- The issue being interpretational in nature, the appellant has a strong case on limitation. However, as the appeal is remanded to the adjudicating authority to decide the issue on merits, the issue of limitation also has to be considered afresh by the adjudicating authority. The appeal is allowed by way of remand.

  ---

• 2024 (7) TMI 679
  Refund of duty paid - central excise levy was withdrawn retrospectively vide Notification No. 23/2012 dated 08.05.2012 on articles of jewellry - appellant has not established that the duty is not passed on to another - principles of unjust enrichment - HELD THAT:- The refund sanctioning authority had called for a report from the Range Officer to verify and report as to whether the incidence of duty has been passed on to the customers by the appellant. The Range Officer vide his report O.C.No. 107/2013 dated 22.02.2013 has reported that the incidence of duty has not been passed on to the customers. It is also seen stated that he has verified the documents - the appellant has mentioned 1% excise duty on the value of the goods. However, on the invoices issued from the depot to the customers, the appellant has not mentioned any excise duty. The actual sale takes place from the depot to the customer. From the factory to the depot, it is merely a stock transfer from one unit of the appellant to the other. As per the Range Officer s report as well as the invoices furnished before us, we are able to conclude that the appellant has borne the burden of duty and has not passed the incidence of duty to the customers. The appellant has not collected any amount as duty from the customer. The Ld. Counsel for the appellant has explained difference in the value of the clearances is because of the fluctuation in the price of gold. This is a case of refund of excise duty and not an issue of valuation. The only aspect to be looked into is whether the incidence of duty is passed on to another. It is found that the view taken by the Adjudicating Authority as well as the Commissioner (Appeals) that the incidence of duty has been passed on to the customer and that refund is hit by bar of unjust enrichment is erroneous and requires to be set aside. The appellant is eligible for refund. The impugned order to the extent of crediting the amount to the Consumer Welfare Fund is set aside. The amount sanctioned is to be refunded to the appellant - Appeal allowed.

  ---

• 2024 (7) TMI 678
  Method of Valuation - Section 4 or Section 4A of the Central Excise Act, 1944 - toilet soaps - Applicability of MRP on goods sold to Canteen Stores Department (CSD) under Ministry of Defence - HELD THAT:- CSD comes under the category of institutional consumer and hence covered by Rule 2A of Standards Weights Measures (Packaged commodities), Rules, 1977 - the value of the goods has to be determined under Section 4 of Central Excise Act, 1944. Appeal allowed.

  ---

• CST, VAT & Sales Tax

• 2024 (7) TMI 677
  Rejection of appeal - rejection of books of accounts - best judgement assessment - it was held by High Court that ' Once, the finding of fact with regard to variation of stocks has not been challenged which was also basis for rejecting the books of accounts and make the best judgment assessment, therefore impugned order cannot said to be bad in the eye of law. ' HELD THAT:- No case for interference is made out in exercise of the jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is accordingly dismissed.

  ---

• Indian Laws

• 2024 (7) TMI 676
  Recovery of arrears of tax on a vehicle purchase with penalty - HELD THAT:- After adjusting the said sum of Rs. 51,120/- as above from Rs. 52,991/- paid by the petitioner on 17.09.2017, the excess amount of Rs. 1,871/- has been adjusted towards tax liability for period between 01.10.2020 and 31.12.2020 - the respondent has re-calculated the above said amount of Rs. 1,11,581/-, there is no justification in imposing penalty on the petitioner for no fault of the petitioner. The petitioner entertained a bona fide view that the petitioner was entitled to have the tax paid on life time basis and thus, had paid a sum of Rs. 52,991/- on 17.09.2017 for the period between 01.10.2017 and 14.12.2025. Therefore, imposition of penalty cannot be justified. Under these circumstances, the petitioner is directed to pay the differential tax due and payable by her together with 1% towards Government Labour Welfare Scheme through the Regional Transport Office. Petition disposed off.

  ---