Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
August 23, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
GST
-
Excess stock found during GST inspection? Initiate proceedings u/ss 73/74, not Section 130.
-
Arbitrary tax order set aside: Incomplete files led to faulty notice despite taxpayer's clarifications & reconciliations.
-
Petitioner gets relief on GST turnover discrepancy due to lack of personal hearing; remanded with condition to pay 10% demand.
-
Deficient show cause notice on GST registration cancellation quashed for lack of specificity.
-
Tax authority breached natural justice in rejecting zero-rating application; Court allows partial relief on remitting 20% disputed tax.
Income Tax
-
Tax payment not mandatory for filing appeal, rules High Court against Revenue's stance.
-
High Court halts tax demand, lifts bank attachment over violation of natural justice in ex parte order.
-
High Court Quashes CBDT Condition for Settlement Application, Allows Interim Board to Reconsider Petitioner's Case.
-
Lessee can claim depreciation on leased assets despite lack of ownership; Mere academic ownership irrelevant.
-
Company's estimated provisions disallowed as expenses for lacking scientific basis to calculate.
-
Hardship compensation from builder to vacate flat for redevelopment not taxable income.
-
Appellate Authority's Ruling on Cash Payments & Development Expenses Challenged.
-
Improper Penalty Initiation under IT Act: Lack of Finding on Concealment Renders Revisionary Order Untenable.
-
Land sale not capital asset, income explained via land sale, no capital gains tax, stamp duty cash payment tax upheld.
-
Non-admission of evidence improper. LPSC not taxable income. Interest capitalization partly upheld. Notional interest deduction allowed.
-
Medical professional's ad expenses disallowed for violating rules prohibiting patient solicitation.
-
Assessing Fair Market Value of Shares: Tribunal Orders Reconsideration.
-
Pharmacist's expenditure fully deductible for dispensing medicines, AO lacks jurisdiction for ad-hoc disallowance.
-
Tax officer's oversight: ICDS adjustment wrongly considered despite examining & accepting assessee's claim.
-
Income surrendered but not admitted leads to penalty under tax law.
-
Tax authority's ex-parte order passed on holiday violates natural justice; fresh hearing ordered.
-
Unexplained cash deposits during demonetization, nursing home receipts, unsecured loans under scanner for tax scrutiny.
Customs
-
Lack of "reason to believe" for seizure nullifies proceedings; cross-exam denial violates justice.
-
Laser Imager's tariff classification controversy: 'Diagnostic instrument' vs 'Accessory'.
-
Jurisdictional defect voids orders, remanded for fresh decision on Anti-Dumping Duty applicability.
-
Veterinary vaccine ingredients wrongly classified; duty demand overturned by tribunal.
-
Importer evades duty, claims wrong IGST rate for footwear import without MRP - liable for 18% tax + confiscation.
Corporate Law
-
Revival plan for liquidated firm approved, sans stock exchange NOC.
Central Excise
-
Dispute over CENVAT credit on imported dump trucks: Importer's claim rejected for lack of evidence.
-
Fireworks Saga: Untangling Duty Disputes, SSI Exemptions, and Brand Legacies.
VAT
-
Petitioner entitled to C-Form declarations for interstate natural gas purchase after GST rollout.
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
-
GST
-
2024 (8) TMI 1041
Jurisdiction of proper officer to seize u/s 67 - Seizure of unaccounted assets - interpretation of statute - section 67 of GST Act - Seeking unconditional release of goods - two silver bars - Indian currency - Mobile Phones - legality of search and seizure of residential premises - it was held by High Court that 'The respondents are directed to forthwith release the currency and other valuable assets seized from the petitioner during the search proceedings conducted on 28.01.2020' - HELD THAT:- No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. SLP dismissed.
-
2024 (8) TMI 1040
Monetary limit of SLP in view of latest circular being Circular No.207/1/2024-GST dated 26.06.2024 issued by Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing - HELD THAT:- These special leave petitions disposed off reserving liberty to the petitioner herein to raise the question of law, if any, which arises in these cases. SLP disposed off.
-
2024 (8) TMI 1039
Initiation of proceedings u/s 130 of the GST Act instead of proceedings u/s 73/74 of the GST Act - excess stock - inspection/search u/s 67 of the GST Act was conducted at the business premises of the petitioner by the SIB and the stock was assessed on the basis of eye measurement - HELD THAT:- It is not in dispute that survey was conducted at the business premises of the petitioner on 11.05.2022. It is also not in dispute that excess stock was found, which triggered the initiation of the present proceedings against the petitioner. On various occasions, this Court has held that if excess stock is found, then proceedings under sections 73/74 of the GST Act should be pressed in service and not proceedings under section 130 of the GST Act, read with rule 120 of the Rules framed under the Act. The law is clear on the subject that the proceedings under section 130 of the GST Act cannot be put to service if excess stock is found at the time of survey. The impugned order dated 03.04.2024 passed by the respondent no. 1, the first appellate authority, as well as the impugned order dated 24.01.2023 passed by the respondent no. 2 cannot be sustained in the eyes of law. The same are hereby quashed - petition allowed.
-
2024 (8) TMI 1038
Refund claim - levy of GST on Ocean Freight Services - HELD THAT:- The issue stands covered by the judgment of the Hon'ble Supreme Court in UNION OF INDIA ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR [ 2022 (5) TMI 968 - SUPREME COURT] confirming the judgment of Gujarat High Court in MOHIT MINERALS PVT LTD VERSUS UNION OF INDIA 1 OTHER [ 2020 (1) TMI 974 - GUJARAT HIGH COURT] , wherein it was held that the levy of GST on Ocean Freight Services vide notification 8/2017-IT(Rate), dated 28.07.2017 and the Entry of the Notification No.10 of 2017-IT(Rate), dated 28.06.2017 was struck down. The Writ Petition is disposed of.
-
2024 (8) TMI 1037
Violation of principles of natural justice - respondent ignored the clarifications and GSTR 9 reconciliation along with audited balance sheet and confirmed the show cause notice allegations through the impugned order stating that the documents are incomplete - discrepancies with respect to GSTR 1 and GSTR 3B filed by the petitioner - HELD THAT:- In the present case, the show cause notice was issued to the petitioner on 28.12.2023, for which, the petitioner has also filed his reply dated 11.03.2024. In the reply, final reconciliation and reconciliation of E-Way bill Turnover with GSTR-1 along with seven supporting documents were filed, but, the same were not considered by the respondent and the respondent has mechanically passed the impugned order without application of mind. Hence, this Court is inclined to set aside the order passed by the respondent dated 30.04.2024 and accordingly, the same is set aside. While setting aside the impugned order, this Court remits the matter back to the respondent to consider the reply taking into consideration all the final reconciliation and reconciliation of E-Way bill Turnover with GSTR-1 along with seven documents enclosed therewith and afford them an opportunity of personal hearing and thereafter, pass a detailed speaking order. Petition disposed off by way of remand.
-
2024 (8) TMI 1036
Short fall of the tax paid along with interest and penalty - respondent has failed to appreciate the Reconciliation Statement filed under GSTR -9C and payment of tax/ ITC credit utilized for it - violation of principles of natural justice - HELD THAT:- Considering the fact that all the notices were uploaded in the portal under the Additional Notices Column and therefore, the petitioner had no occasion to view the said column and the impugned order was passed without affording an opportunity to the petitioner to establish his case before the authorities concerned, which is violation of principles of natural justice, this Court is inclined to set aside the impugned Assessment Order and accordingly, the same is set aside on condition that the petitioner shall deposit a sum of Rs. 1,50,00,000/- within a period of four (4) weeks from the date of receipt of a copy of this order. Upon receipt of the said deposit, the authorities concerned is directed to pass orders with regard to lifting of the attachment order issued against the supplier of the petitioner. Thereafter, the petitioner is directed to file a reply within a period of two (2) weeks. Petition is disposed off.
-
2024 (8) TMI 1035
Cancellation of GST registration with retrospective effect - SCN did not specify any intelligible reason for proposing to cancel the petitioner s GST registration - violation of principles of natural justice - HELD THAT:- The purpose of a show cause notice is to enable the noticee to respond to the allegations. In the present case, since the SCN did not contain any specific details, it was incapable of eliciting any meaningful response. The SCN was cryptic and fails to meet the standards of a show cause notice. The impugned order is also bereft of any details. It merely mentions that it is in reference to the SCN. It is important to note that the SCN did not propose cancellation of the petitioner s GST registration with retrospective effect. However, the impugned order proceeded to cancel the petitioner s GST registration with retrospective effect from 22.04.2018. Neither the SCN nor the impugned order cancelling the petitioner s GST registration can be sustained. As is apparent from the above, the impugned order has been passed in violation of the principles of natural justice - the SCN and the impugned order set aside - the respondents are directed to restore the petitioner s GST registration forthwith - petition disposed off.
-
2024 (8) TMI 1034
Challenge to impugned order regarding GST discrepancies - petitioner has failed to avail the opportunity of personal hearing - HELD THAT:- In the present case, a notice was issued by the respondent based on the difference between the turn over reported in Form 26AS and Form GSTR 3B, for which the petitioner filed a reply stating that the said difference has occurred since the Form 26AS includes the turn over of three months, viz., April 2017 to June 2017, which is prior to the commencement of GST Regime, whereas, the turnover reported in Form GSTR3B will not include the said period. However, the said aspect was not considered by the respondent while passing the impugned order. Therefore, this Court believes that if one more opportunity is granted, the petitioner can establish his case before the Authorities concerned. In such view of the matter, this Court is inclined to set aside the impugned order dated 12.12.2023. The impugned order dated 12.12.2023 is set aside and the matter is remanded to the respondent for fresh consideration on condition that the petitioner shall pay 10% of demand amount to the respondent within a period of four weeks from today (12.08.2024) and the setting aside of the impugned order will take effect from the date of payment of the said amount - petition disposed off by way of remand.
-
2024 (8) TMI 1033
Cancellation of GST registration of petitioner - SCN does not provide any specific reason for proposing to cancel the petitioner s GST registration - Violation of principles of batural justice - HELD THAT:- The impugned SCN has merely reproduced Rule 21 (b) of the Central Goods and Services Tax Rules, 2017 (hereafter the CGST Rules). The impugned SCN also does not indicate as to which bill or transaction is alleged to be in non-compliance of the statutory provisions. Although, Rule 21 (b) of the CGST Rules provides for the cancellation of the GST registration in case the tax payer issues the invoice or bill without the supply of goods or services in violation of the provisions of the CGST Act. However, the proper officer has failed to specify as to which invoice / bill is without the supply of goods or services has been allegedly issued by the petitioner. No document is annexed with the impugned SCN, which provides any clue as to which allegation is sought to be raised. The purpose of issuance of the show cause notice is to enable the noticee to respond to the allegations on the basis of which an adverse action is proposed. Absent of any specific allegation, the issuance of the show cause notice is rendered meaningless. In the present case, the impugned SCN fails to meet the requisite standards of the show cause notice. Accordingly, the present petition is allowed. The impugned SCN is liable to be set aside. The respondents are directed to restore the petitioner s GST registration forthwith. Petition is disposed off.
-
2024 (8) TMI 1032
Restoration of petitioner s cancelled Goods and Services Tax (GST) registration - impugned cancellation order does not indicate that the reply of the petitioner was considered - violation of principles of natural justice - HELD THAT:- The impugned cancellation order is not an informed decision in as much as it does not set out any reason for cancellation of the petitioner s GST registration. The impugned cancellation order does not indicate that the reply of the petitioner was considered. Further, the inspection report of the inspector, Panchnama and the photograph of the premises in question on which the decision to cancel the petitioner s GST registration is claimed to be premised were not supplied to the petitioner. The impugned cancellation order has been passed in violation of the principles of natural justice as the petitioner was never called upon to explain such documents. The impugned cancellation order and SCN are liable to be set aside. In the event, the respondent seeks to cancel the petitioner s GST registration, this order will not preclude it from issuing a fresh show cause notice by setting out all the grounds on which such adverse action is proposed and an order is passed in accordance with law. Petition disposed off.
-
2024 (8) TMI 1031
Rejection of rectification application - zero rated supply - violation of principles of natural justice - HELD THAT:- On perusal of the impugned order, it is evident that the tax payer's reply and the documents annexed thereto were considered in respect of each defect dealt with therein. Upon such consideration, tax proposals relating to five defects were withdrawn / dropped. The petitioner subsequently filed rectification application dated 21.03.2024 and attached the purchase order and MEPZ certificate. Likewise, the petitioner has provided details of credit notes and the availment of Input Tax Credit so as to establish that only net ITC was availed of. These additional documents and information would not justify rectification of the order in original given the limited scope of Section 161 of applicable GST enactments. The impugned order in original dated 29.12.2023 is set aside only insofar as defect nos.5 and 6 are concerned subject to the condition that the petitioner remits 20% of the disputed tax demand in respect of the said defects as agreed to within fifteen days from the date of receipt of a copy of this order. The petitioner is also permitted to re-submit all relevant documents within said period. Upon receipt thereof and on being satisfied that 20% of the disputed tax demand as regards defect nos.5 and 6 were received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of the petitioner's reply. Petition disposed off.
-
Income Tax
-
2024 (8) TMI 1044
Loss incurred through the 'off market' sale of shares to a partnership firm -colorable device aimed at tax evasion - Sale of the two scrips as violated the Spirit of the Act and is a colorable device through which the Assessee on the one hand seeks to take advantage of the Statutory Provisions i.e., Section 10(38) by claiming exemption of Long-Term Capital Gains but on the other hand creates Long Term Capital Loss artificially by transfer the shares to his sister concern in order to offset current and future gains against losses as mentioned HELD THAT:- Assessee should not be encouraged to avoid payment of tax by resorting to dubious methods through colourable devices and that such devices cannot be a part of tax planning. We came to this conclusion in view of the fact that assessee transferred the above mentioned two listed securities to its partnership firm, which in turn no doubt passed the consideration also to the assessee. In nutshell, if we analyse the whole transaction it can be concluded that effectively money is lying with the assessee i.e. consideration paid by the partnership firm to the assessee, securities /shares are still with the assessee i.e. hold by the partnership firm of the assessee, on the other hand without any effective loss of control of the securities and artificial transfer of consideration, he made himself entitled to create a long term capital loss which is available for set off against the current years capital gain and also available for future long term capital gains. In these circumstances, the case laws relied upon by the assessee and Ld. CIT (A) is of no help as the facts of those judicial pronouncements vis-a-vis the facts of the assessee s case cannot be equate. he arrangement under scrutiny appears to lack commercial substance. It was noticed that the transaction under consideration created extraordinary rights and obligations that do not align with principles of fairness, suggesting it qualify as an impermissible avoidance arrangement. The court observed that in the facts of the present case, the evidence and facts suggests that the arrangement was designed primarily for tax evasion. In these circumstances and facts on record we uphold the appeal and set aside the order passed by the Ld. CIT (A) and restore the decision passed by the AO keeping in view the ratio laid down in the cases of McDowell Co. Ltd. [ 1985 (4) TMI 64 - SUPREME COURT] and Vodafone International Holdings BV v. Union of India [ 2012 (1) TMI 52 - SUPREME COURT]
-
2024 (8) TMI 1043
TDS u/s 195 - Interest payment made to China Development Bank (CDB) - eligibility for Exemption from taxation under Article 11(3) of India China DTAA - HELD THAT:- Uses the word means and not 'includes' or 'deemed to be included which suggests that CDB is and has always been a financial institution wholly owned by the Government. Also, with the inclusion of the above definition and for the purpose of defining the term financial institution wholly owned by the Government, the protocol restricted the scope of the financial institutions covered under Article 11(3) of India-China DTAA to include the specified institutions or any other institution wholly owned by the Government of China as may be agreed from time to time between the competent authorities of the Contracting States. Therefore, the specific institutions listed in the protocol for both India and China, were always covered as a government owned financial institution for the purpose of Article 11(3) of India- China DTAA. Article as if stood during the relevant FY was more expansive and after the definition of financial institution wholly owned by the Government in the protocol, wherein China Development Bank is specifically included, it is clear and beyond doubt that China Development Bank is and has always been a financial institution wholly owned by the Government and hence, eligible for the benefit for the provisions of Article 11(3) of India-China DTAA and therefore, the appellant cannot be treated assessee in default with respect to non-deduction of tax u/s 195 of the Act on interest payments made to China Development Bank. Appeal of the Revenue is dismissed.
-
2024 (8) TMI 1042
Validity of Reopening of assessment - Section 143(2) notice not sent - addition u/s 68 - HELD THAT:- From the perusal of records uptill date of issuance of Section 142(1) of the Act dated 31.10.2022 where the assessee has filed his reply on 07.11.2022 alongwith documents but the assessee has not filed return of income. In fact, the assessee chose to file return of income on 14.02.2023 as submitted in assessee s written submission but the same cannot be treated as return in respect of response to the notice u/s 148 as the assessee has filed the original return of income as mentioned in the return of income acknowledgement dated 14.02.2023. Thus, the CIT(A) has rightly dismissed this ground with the precise observation. Hence ground no.1 is dismissed. Mandation to issue notice u/s 143(2) - As in the present case s scenario the assessment is reopened and the notice u/s 148 was rightly issued to the assessee for which the assessee has responded and, therefore, the statutory notice i.e. Section 148 notice has been issued and the plea to again issue notice u/s 143(2) is not justifiable when the notice itself has been issued u/s 148 and the other respective statutory notices u/s 142(1) was also subsequently issued for which the assessee has responded. Thus, the extension of ground no.1 in this context also is dismissed. Addition u/s 68 - As from the perusal of documents, it appears that certain documents which were submitted before the AO as well as before the CIT(A) was not taken into account either by the AO or by the CIT(A). Hence, it will be appropriate to remand back this issue on merit to the file of the AO for proper adjudication and verification after taking cognisance of the evidences/documents filed by the assessee. Appeal of the assessee is partly allowed for statistical purpose.
-
2024 (8) TMI 1030
Admission of appeal of the assessee in contravention of Section 249(4)(a) - non-payment of due tax - HELD THAT:- As in terms of Section 249(4)(a) of the Act, does not provide that appeal may be entertained after depositing the admitted tax. In other words, it is submitted by the appellant/revenue in the appeal that appeal could not be entertained in terms of Section 249(4)(a) of the Act, if the admitted tax was deposited after filing of an appeal. From perusal of the order of ITAT, it is clear that the order has not been passed on merits and it has interpreted Section 249(4)(a) of the Act which deals with the issue of entertaining an appeal in the case where amount is deposited, though it may be prior to filing an appeal or after appeal. Since there is no merit in the appeal, the ITAT has remanded the matter back to the CIT (A) for adjudication on merits based on the law laid down in the case of Vijay Prakash D. Mehta [ 1988 (8) TMI 109 - SUPREME COURT] and CIT Vs. K Satish Kumar Singh [ 2012 (4) TMI 213 - KARNATAKA HIGH COURT] and, therefore, the same cannot be said to be erroneous and prejudicial to the interest of revenue.
-
2024 (8) TMI 1029
Stay of the demand raised against the petitioner and to lift the bank attachments - ex parte order passed by the second respondent - counsel contended that the impugned order is liable to be quashd as the first respondent has mechanically passed a non-speaking order without even considering any of the submissions and judgment placed on record by the petitioner during the course of hearing and petitioner has not been heard before passing the impugned order. HELD THAT:- Admittedly, challenging the assessment order passed by the first respondent, Appeal is pending for consideration before the second respondent. Further, it is seen that recovery proceedings initiated against the petitioner is only due to dismissal of the Appeal by the second respondent, which order, was in fact, an ex parte order passed by the second respondent, however, by virtue of order passed by ITAT, the Appeal preferred by the petitioner against the assessment order was rejuvenated, since it was an ex parte order. Thus, fact that the petitioner undertaken before the ITAT that they would prosecute the case before the second respondent, by virtue of which, the Appeal filed by the petitioner was allowed, this Court, in the interest of justice, is inclined to pass the following order:- i) The second respondent is directed to dispose of the Appeal filed by the petitioner within six weeks from the date of receipt of a certified order copy by the second respondent. ii) Till the disposal of the Appeal, the petitioner shall not be put to any harassment by the firsts respondent in pursuance of the impugned order. WP allowed.
-
2024 (8) TMI 1028
Validity of Impugned Settlement Order passed u/s 245D (4) - Interim Board for Settlement passed the impugned order holding that the Petitioner's Settlement Application was not maintainable, as the Petitioner was ineligible to file the Settlement Applications for the said assessment years as no proceedings were pending as on 31 January, 2021 for the assessment years - HELD THAT:- This Court in the case of Sar Senapati Santaji Ghorpade Sugar Factory Ltd. [ 2024 (4) TMI 204 - BOMBAY HIGH COURT ] in which the Court considering the provisions of Section 192 as also the other relevant provisions of the Act, has held that the Notification dated 21 September, 2021 issued by the CBDT u/s 119(2)(b), although was issued within the powers as conferred on the CBDT, however, to the extent it laid down additional conditions in paragraph 4 of the said notification to the effect that the assessee should be eligible to file an application for settlement on 21 January, 2021, was held to be beyond the scope of powers of the CBDT under Section 119. The Court accordingly quashed the conditions as incorporated in paragraph 4 of the said notification issued by the CBDT. Thus in the present case, the Interim Board for Settlement thus was not correct in rejecting the Petitioner s Settlement Application for the relevant assessment years, and more so considering the view taken by this Court being the jurisdictional High Court - the decision in Sar Senapati was considered by this Court in a recent decision of this Court in M/s. Vishwakarma Developers [ 2024 (8) TMI 366 - BOMBAY HIGH COURT ] in which, in similar circumstances, a writ petition filed by the Petitioner therein, praying for similar reliefs was allowed by quashing and setting aside the orders passed by the Interim Settlement Board. We are of the considered opinion that the Interim Board of Settlement could not have rejected the Petitioner s application, the present proceedings hence are required to be allowed.
-
2024 (8) TMI 1027
Benefit of deduction u/s 10B - HELD THAT:- In the case of Commissioner of Income Tax, Chennai Vs. SRA Systems Limited [ 2021 (3) TMI 1133 - MADRAS HIGH COURT] the Court upheld the order passed by the Income Tax Appellate Tribunal [ 2008 (5) TMI 661 - ITAT CHENNAI] that the assessee would be entitled to deduction under Section 10A and disallowance made by the Assessing Officer was not correct. In our considered view, since the issue is covered in favour of the appellant and considering the fact that the similar fact was decided in favour of the appellant by the Income Tax Appellate Tribunal 'B' Bench, Chennai [ 2012 (12) TMI 522 - ITAT CHENNAI] which is the appellant's own case relating to the assessment year 2007-08 we are inclined to answer the appeal in favour of the appellant.
-
2024 (8) TMI 1026
Depreciation on leased assets - transactions of lease of various assets were mere financial transactions and the assessee was not entitled to depreciation - denial of claim by revenue as assessee does not fulfill the twin requirement of ownership and usage for business purpose to claim depreciation u/s 32 - ITAT allowed claim - HELD THAT:- The position in law as enunciated in the decision of the Supreme Court in I.C.D.S. [ 2013 (1) TMI 344 - SUPREME COURT] would squarely be applicable in the facts of the present case. The revenue s contention on the basis of clauses of lease agreement, that the assessee although was the purchaser of the assets in question, by virtue of having made payments to the seller of the assets, and that the assessee had not acquired the risk of ownership of such assets and further that the assessee s concern was only to recover the contracted amount of lease rentals provided in the agreements, the lease agreements being in fact loan transactions, in disguise of finance lease and that the lessee was the owner of the assets would disentitle the assessee to claim depreciation cannot be accepted. The reasons as rendered by the assessing officer have been rightly not accepted by the Tribunal, that the documents have artificially empowered the assessee with the ownership of the assets, although its economic life was vested with the lessee, and only to claim depreciation, the academic ownership was shown to be with the assessee company. Such observations of the assessing officer which is the case of the revenue in appeal, cannot be accepted, considering the plain reading of Section 32 as interpreted by the Supreme Court in I.C.D.S. (supra). First question of law as raised by revenue would not arise for consideration of this Court. Decided in favour of assessee. Addition of Interest u/s 220(2) - ITAT allowed claim holding that interest u/s. 220 (2) of the Act is chargeable upto original assessment order passed u/s. 143 (3) or 144 of the Act but not upto the order passed u/s. 143 (3) r.w.s. 254 - HELD THAT:- Tribunal was right in deleting the interest in question by holding that the interest under section 220 (2) of the Act is chargeable upto original assessment order passed u/s. 143 (3) or 144 of the Act, but not upto the order passed u/s. 143 (3) r.w.s. 254 of the Act. The depreciation on the leased asset is allowed to the assessee, by setting aside its disallowance, the issue of such interest under section 220 (2) is consequential to the disallowance of depreciation on leased assets. It was, therefore, rightly held that the assessee was not liable to pay further interest after the passing of the assessment order. For these reasons, second question of law would also not arise for consideration.
-
2024 (8) TMI 1025
Disallowance u/s 40 (a) (ia) - amounts which were payable at any time during the year - Scope of amendment to Section 40 (a) (ia) with effect from 01.04.2015 - HELD THAT:- It appears to be not in dispute that Section 40 (a) (ia), not only, as it stood prior to its amendment as inserted by the Finance (No. 2) Act, 2004, but also by the subsequent amendment to the said provisions by Finance Act 2010 and Finance Act, 2014 had fell for consideration of the Supreme Court in the case of Shree Choudhary Transport Co. vs. Income-tax Officer [ 2020 (8) TMI 23 - SUPREME COURT ] What was earlier held by the Supreme Court in the case of CIT vs. Calcutta Export Company [ 2018 (5) TMI 356 - SUPREME COURT ] the Supreme Court, considering the effect of amendment brought about by the Finance Act, 2010 to the provisions of Section 40 (a) (ia), observed that the amendment as brought about by Finance Act, 2010 was retrospective in operation, being curative in nature and hence the same would become applicable from the date of insertion of the provision of sub-clause (ia) of Section 40 (a) of the Act. The Supreme Court while examining the issue of law and taking such view held that insofar as the amendment brought about to Section 40 (a) (ia) of the Act by the Finance Act, 2014 was concerned, the position in law as laid down in Calcutta Export Company would not become applicable, as the amendment was not a curative amendment, relating to any procedural aspects concerning deposit of the deducted TDS, as the amendment was to the substantive provision. It was held that the assessee cannot escape from the rigour of the substantive provisions of the Act providing for disallowance. In similar circumstances as in hand, the Supreme Court observed that the benefit of amendment as inserted by the Finance Act, 2014 would not be available to the assessee and accepting the retrospective applicability of such provisions would be preposterous. In view of the position in law as laid down by the Supreme Court in Shree Choudhary Transport Co. [ 2020 (8) TMI 23 - SUPREME COURT ] it is absolutely clear that the approach of the Tribunal in the present case was fundamentally flawed inasmuch as what has been undertaken by the Tribunal is to give a retrospective application of the substantive provisions of law, which has been held to be not permissible as held in Shree Choudhary Transport Co. (supra). We may also observe that the logic and applicability of a curative amendment which was brought about by the Finance Act, 2010, was certainly not a situation in hand which was the case that had fell for consideration before the Supreme Court in Commissioner of Income-tax vs. Calcutta Export Company (supra).The question of law stands answered in favour of the Revenue and against the assessee.
-
2024 (8) TMI 1024
Allowability of provision as allowable expenditure - Non consideration of the Hon ble DRP s direction for granting relief in respect of provision for expenses - Provision for Freight and Material Handling Charges have been made on a scientific basis or on the basis of previous years trends ? - HELD THAT:- The assessee has merely submitted that the provision was made on accrual basis. The invoices were received in subsequent financial year. The assessee was asked to file the basis for making provision - During the assessment proceedings, assessee has not filed any document to prove the basis on which provision was made. The assessee has not filed any document before ITAT also to prove the basis on which the provision was made. The assessee merely filed a list of entities to whom payments were made in subsequent years. However, that does not prove that services were received from those entities during A.Y.2009-10. Assessee had to establish that the expenditure had accrued. Since it was a provision, assessee was required to prove that provision was made on some scientific basis. Assessee failed to prove the same. Thus, for all the reasons discussed above, we agree with the AO that provision of is not allowable expenditure. Disallowance of IT support expenses - DRP directed assessee to prove that the provisionwas made on some scientific basis, however, assessee had not filed any document to prove the same - As already observed that no single document has been submitted by assessee to prove that the provision was made on scientific basis. As per Income Tax Act, provisions is not an allowable expenditure, unless it is established that it was made on some scientific basis as held by the Hon ble Supreme Court in the case of Bharat Earth Movers Limited [ 2000 (8) TMI 4 - SUPREME COURT] In this case, assessee has not filed any document to prove that the provision was made on scientific basis, rather assessee admitted that it was made on estimated basis. In these facts and circumstances of the case, we hold that provision is not an allowable expenditure. Decided against assessee.
-
2024 (8) TMI 1023
Addition being hardship compensation received from builder for vacating the existing flat for re-development purposes taxed as income from other sources - claim of the assessee is that such receipt is a capital receipt and not income - HELD THAT:- As carefully perused the decision of Sarfaraz S. Furniturewalla [ 2024 (5) TMI 163 - BOMBAY HIGH COURT ] wherein the Hon ble High Court has held that any hardship allowance and rehabilitation allowance which is paid by the developer who suffers hardship due to dispossession cannot be considered as revenue receipt and same is not liable to be taxed. As undisputed fact that assessee is also receiving the hardship allowance from the developer. Thus, the amount of hardship allowance received by the assessee is not income of the assessee. Therefore, we allow ground made in the hands of the assessee.
-
2024 (8) TMI 1022
Disallowance of exemption u/s 10(23C)(iiiab) - addition by treating the grant as voluntary contribution - wrong filling of the relevant column in the Income Tax Return - appellant society was formed by the Government of Uttarakhand with the main object to impart technical education to carry on skill development activities in the state of Uttarakhand - HELD THAT:- The assessee society received a sum during the year from state Government. After adding opening balance under the head Grant Account and after deducting the amount of expenditure incurred during the year on imparting training and other expenses to attain the objective of the society, net balance amount was shown as liability under the head Grant Account in Schedule B of the Balance Sheet. After going through the entire details, we find that the disallowance has been made by the CPC and confirmed by the CIT(A) owing to wrong filling of the relevant column in the Income Tax Return. We also find that the A.Y. 2018-19, the ld. CIT(A) has duly allowed the exemption. Hence, we hold that the wrong filling of a column in the return cannot take away the benefit which is otherwise statutorily available to the assessee . Hence, the AO is directed to rectify the order of the CPC and nullify the demand. Appeal assessee allowed.
-
2024 (8) TMI 1021
Addition u/s 40A(3) - cash payments exceeding Rs. 20,0000/- - HELD THAT:- CIT(A) erred in rejecting the submission of the appellant as regards business expediency, has overlooked the statement on oath and affidavits given by the vendor and that the father of the vendor was in jail and having ill health and also overlooked that the vendors of land had customers earlier for this deal but cash payment was the precondition for this deal to materialize. Decided in favour of assessee. Disallowance of development expenses - AO disallowed an amount of 10% owing to lack of vouchers and other supporting details - CIT(A) has restricted the disallowance to 5% - HELD THAT:- Having gone through the material before us, since no other evidences have been produced, we decline to interfere with the order of the ld. CIT(A). Decided against assessee.
-
2024 (8) TMI 1020
Revision u/s 263 - assessment order passed u/s. 153C is erroneous insofar as prejudicial to the interest of Revenue - AO has initiated penalty proceedings u/s. 271AAC of the Act instead of initiating penalty u/s. 271(1)(c) - HELD THAT:-Admittedly assessment was framed u/s. 153C of the Act and the AO initiated penalty proceedings u/s. 271AAC which is non-existent provision and the same was also approved by the Addl.CIT u/s. 153D of the Act. But there is no recording of any satisfaction that the assessee has concealed the particulars of income or furnished inaccurate particulars of income. Once there is no satisfaction recorded in the order, the order cannot be subject matter of revision u/s. 263 by the PCIT in view of another decision of Hon ble High Court of Madras in the case of CIT vs. Chennai Metro Rail Ltd. [ 2018 (3) TMI 1586 - MADRAS HIGH COURT ] considering the decision of Surendra Prasad Agarwal [ 2004 (9) TMI 45 - ALLAHABAD HIGH COURT] concurred with the decision of Hon ble Allahabad High Court but given a finding that the AO has to record his satisfaction or establish that the assessee has concealed his income by filing inaccurate particulars of income. In the absence of the same, the Hon ble High Court held that the Tribunal has rightly set aside the directions of CIT directing the AO to initiate penalty proceedings although they have not agreed with the reasoning s in its entirety. Even the authorities can levy penalty i.e., AO or CIT(A) or PCIT or CIT in the course of assessment proceedings under section 271(1) - Revenue contended that these authorities have power to initiate penalty proceedings and hence, the PCIT u/s. 263 has jurisdiction in directing the AO to initiate penalty proceedings u/s. 271(1)(c) of the Act - We do not agree with the contentions raised by ld.CIT-DR for the reason that section 271(1)(a), (b) or (c) is for levy of penalty, it gives power for levy of penalty in the proceedings before him and the revisionary power u/s. 263 of the Act is entirely distinct and different power which upset the assessment completed and creates uncertainty. For that, this power cannot be exercised for directing the AO to initiate penalty under this provision. In our view, if the proceedings are pending before PCIT or CIT(A) or the AO like assessment proceedings, they are well within the power to initiate and levy penalty. But for that, that authority has to initiate and levy the penalty. Hence, in our view, this argument of Revenue fails. There is no finding in the assessment order to the effect that there is concealment of income or furnishing of inaccurate particulars of income. Hence, the impugned action of the PCIT cannot be countenanced. For such a proposition, we rely on the ratio of decisions of Chennai Metro Rail Ltd. [ 2018 (3) TMI 1586 - MADRAS HIGH COURT ] and C.R.K.Swamy [ 2001 (11) TMI 56 - MADRAS HIGH COURT ] Hence, we are inclined to set aside the impugned revision order. Assessee appeal allowed.
-
2024 (8) TMI 1019
Unaccounted sale proceeds received towards sale of land - nature of land sold - assessee reiterated his arguments made before the AO and claimed that the impugned land sold by the appellant to M/s. Incredible India Projects (P) Ltd is an agricultural land and is situated beyond 2 kms from local Municipalit - HELD THAT:- The impugned land sold by the assessee is situated beyond the specified limit of the local Municipality and thus cannot be treated as capital asset. Further, the appellant has also placed necessary evidence to prove that he has carried out agricultural operations and also declared agricultural income in the return of income filed in the earlier A.Ys. Be that as it may be, merely because the agricultural operation was not carried out in land which is otherwise an agricultural land as per revenue record and is also situated beyond the specified limit cannot be treated as capital asset, as long as the said land is capable of carrying out agricultural operations. Therefore, we are of the considered view that the land sold by the assessee to M/s Incredible India Projects (P) Ltd is an agricultural land and thus, cannot be treated as capital asset in terms of section 2(14) of the I.T. Act, 1961. CIT (A)-12, Hyderabad, while deciding the issue of taxability of sale of land in the case of Shri Raja Babu Nimmattoori for the A.Y 2018-19 has considered the very same land sold by the assessee and after considering the relevant facts including the certificate issued by the Tehsildar and certificate from the Commissioner of Bhongir Municipality held that the impugned land sold by the assessee is an agricultural land and cannot be treated as capital asset. Thus impugned land sold by the assessee is an agricultural land and is situated beyond 2 kms from the local limitation of Bhongir Municipality and thus cannot be treated as capital asset. AO and CIT (A) without appreciating the relevant facts simply made additions towards capital gain from sale of land. Decided in favour of assessee. Addition towards increase in capital account - assessee submitted that the source for increase in capital account is out of sale proceeds received from sale of agricultural land and balance amount is out of current year income - AO made additions without appreciating the relevant evidence filed by the assessee - HELD THAT:- Assessee has filed necessary evidence to prove the source of the increase in capital accounts. As per explanation furnished by the assessee, sum as received from M/s. Incredible India Projects (P) Ltd towards sale of 4 acres of agricultural land. The balance amount is out of current year income after withdrawal for personal expenditure. We find that when the assessee is able to explain the increase in capital accounts with necessary evidence, in our considered view the AO ought not to have made addition by stating that the assessee is not able to furnish any evidence. CIT (A) without appreciating the relevant facts simply sustained the addition made by the AO. Since the appellant has explained increase in capital account with known sources of income and such explanation is supported by necessary evidence, in our considered view, the addition made by the AO towards increase in capital account is not sustainable. Thus, we set aside the order of the CIT (A) on this issue and direct the AO to delete the addition made towards increase in capital account. Addition towards undisclosed income arises towards amount received - We are of the considered view that the ld. CIT(A) is erred in confirming addition made by the Assessing Officer towards the advance received from M/s. Aishwarya Infra Developers as income of the assessee u/s 56(2)(ix) of the I.T. Act, 1961, even though having observed that the impugned land is an agricultural land in the case of another co-owner while deciding the appeal for the A.Y 2018-19. Thus, we set aside the order passed by the learned CIT (A) on this issue and direct the Assessing Officer to delete the additions made towards undisclosed income received from M/s. Aishwarya Infra Developers u/s 56(2)(ix). Taxability of capital gain in pursuant to JDA entered - From a plain reading of section 45(5A) of the act, it is undoubtedly clear that the capital gain, if any, is chargeable to tax in terms of specified agreement shall be levied for the previous year in which certificate of completion is issued by the competent authority. In the present case, there is no dispute with regard to the fact that the Developer has not completed the project in all respects and has not obtained a completion certificate from the competent authority. In fact, it was not a case of the Assessing Officer and the learned CIT (A) that the assessee has obtained completion certificate and even after obtaining completion certificate, capital gain was not offered to tax. Unless AO and CIT (A) proves that the conditions prescribed for u/s 45(5A) of the Act is satisfied, the question of computation of capital gain for the impugned A.Y does not arise. Therefore, we are of the considered opinion that the AO completely erred in making addition towards capital gain in pursuant to the JDA on 30.06.2017, contrary to the provisions of section 45(5A) - CIT (A) without appreciating the relevant facts simply sustained the addition made by the AO and further enhanced the assessment on the very same issue. Thus, we set aside the order passed by the learned CIT (A) and direct the Assessing Officer to delete the addition made towards computation of capital gain in terms of development agreement with JVG Structures (P) Ltd. Addition u/s 56(2)(x) - difference between the stamp duty value and consideration paid for purchase of the property - HELD THAT:- Although the assessee claims to have entered into an agreement in the year 2007 and also paid part of consideration, but sale agreement was not registered and also advance has been paid by cash and thus, as per provisions of section 56(2)(x) and proviso as provided therein, the provisions of the first proviso shall apply only in a case where the amount of consideration referred to therein has been paid by way of an account payee cheque on or before the date of agreement for transfer of such immovable property. Since the appellant claims to have entered into agreement in the year 2007 and also paid the consideration in cash, the provisions of 1st proviso and consideration as on the date of the agreement cannot be applied - there is no error in the reasons given by the CIT (A) to sustain the addition made by the AO for an amount being the difference between the stamp duty value and consideration paid for purchase of property u/s 56(2)(x) of the I.T. Act, 1961. Thus, we are inclined to uphold the findings of the CIT (A) and reject the ground taken by the assessee. Addition u/s 69 - unexplained investment for purchase of land - CIT (A) deleted the consideration paid through cheques as per registered sale deed being 1/6th share of the assessee but sustained balance - HELD THAT:- We find that although the Assessing Officer has made addition towards the difference amount, there is no reference as to how the said payment was made in terms of the agreement of sale dated 5.5.2017 i.e whether it is by cheque or by cash. In absence of any finding as to cash payment, then it is difficult to accept the reasons given by the Assessing Officer to make additions in the hands of the assessee, more so when the other party claims that the entire consideration has been paid from his account and the source has been explained. CIT (A) without appreciating the relevant facts simply sustained the addition made by the AO. Thus, we are inclined to reverse the findings of the learned CIT (A) on this issue and direct the Assessing Officer to delete the differential consideration of Rs. 13.00 lakhs in the hands of the assessee. Addition towards the cash found and seized during the course of search - HELD THAT:- Since there are contradictory explanation, one at the stage of search proceedings and another at the stage of assessment proceedings, it is difficult to accept the explanation of the assessee with regard to the source of cash found during the course of search - it is also difficult to reject the explanation of the assessee in light of income declared by the assessee for the last 3 A.Ys. Since the appellant is not required to maintain regular cash book for his income and further as per the revised balance sheet as on 31.3.2017, sufficient cash balance is available to explain cash found during the course of search, in our considered view, a reasonable amount of cash found during the course of search can be attributable to cash in hand available with the assessee before the date of search. Therefore, we direct the AO to accept the explanation of the assessee with regard to the source for cash found during the course of search to the extent of Rs. 20.00 lakhs. The assessee gets relief to the extent of Rs. 2.00 lakhs out of additions made by the Assessing Officer at Rs. 28,06,200/-.. Unexplained cash deposit u/s 69A - assessee has made a cash deposit in his UCO Bank account - HELD THAT:- CIT (A) recorded a categorical finding that the appellant has received Rs. 2,07,000/- from M/s. Aurora Educational Society on various dates towards the part repayment of loan of Rs. 4,45,00,000/- given by the appellant to the Society on 14.2.2007. The learned CIT (A) further noticed that even otherwise the income declared by the assessee for the current financial year relevant to A.Y 2018-19 is much more than the amount of cash deposit of Rs. 2,07,000/- into UCO Bank Account and the appellant is entitled to the benefit of telescoping the income to the additions made u/s 69A - findings of the facts recorded by the learned CIT (A) are not controverted with any evidence. Therefore, we are inclined to uphold the findings of the learned CIT (A) and reject the grounds taken by the Revenue. Addition of unsecured loans u/s 68 - CIT(A) deleted addition - HELD THAT:- As per the revised statement of affairs filed by the assessee, there is no difference in assets shown in either of the balance sheet, whereas there is a change in capital account and loan and liabilities. On perusal of the statement of affairs, we find that there is no unsecured loan as claimed by the AsO but there is a credit under loan liability from UCO Bank. From the details filed by the assessee, it appears that there is no unsecured loan as claimed by the AO - Although the appellant himself has shown unsecured loan in the statement of affairs filed during the assessement proceedings but fact remains that the assessee has explained the mistake committed while preparing the earlier financial statements and as per explanation furnished by the assessee, there was an error and the same has been rectified by filing the correct financial statements. CIT (A), after considering the relevant evidence has rightly deleted the addition/ Addition towards increase in capital account - HELD THAT:- We find that when the assessee is able to explain the increase in capital accounts with necessary evidence, in our considered view the Assessing Officer ought not to have made addition by stating that the assessee is not able to furnish any evidence - CIT (A) without appreciating the relevant facts simply sustained the addition made by the AO. Since the appellant has explained increase in capital account with known sources of income and such explanation is supported by necessary evidence, in our considered view, the addition made by the AO towards increase in capital account is not sustainable. Unexplained investment in land at Edupally Village, R.R. District - No source for consideration paid over and above what was stated in the registered sale deed provided - HELD THAT:- Although the appellant claims to have explained the source out of opening cash and bank balance available as on 31.3.2017, but the revised statement of affairs filed by the assessee does not include additional consideration paid as per cash receipt. In so far as the argument of the assessee that the Assessing Officer has not confronted with the seized document and also not provided for cross examination of the vendors, in our considered view when the document found during the course of search clearly shows the signature of the vendors and further the contents also matched with the registered sale deed, then the question of providing cross examination of the vendors does not arise. We therefore, are of the view that the assessee could not explain the source for excess consideration paid over and above the consideration as per the registered sale document and thus, the AO and CIT (A) are rightly sustained the addition towards the consideration paid for purchase of property as per cash receipt. Extra consideration alleged to have been paid for purchase of the property - differential consideration as per the registered document for the A.Y 2018-19 - HELD THAT:- If the claim of the AO is correct, then the additions, if any, to be made towards the differential consideration should be made for the AY 2017-18 and further the assessee needs to explain the source for said investment for the A.Y 2017-18 only. In the present case, the Assessing Officer has made addition towards differential consideration as per the registered document for the A.Y 2018-19, even though it was alleged that Rs. 1.57 crore was paid for the A.Y 2017-18. On this count itself, the additions sustained by the CIT (A) cannot be upheld. The appellant has also filed copies of bank statement of Shri N Raja Babu and others and claimed that even the balance consideration of Rs. 1.57 crores have been paid through proper banking channels and accounted in the books of account for the relevant A.Y - From the details filed by the assessee, it appears that even the additional consideration of Rs. 1.57 crores has been paid through proper banking channels and once it is proved that the payments are gone from bank accounts, it appears that the source for the said payment is already explained by the appellant. Therefore, on this count also the additions sustained by the learned CIT (A) cannot be upheld. Therefore, for the above reasons, we reverse the findings of the learned CIT (A) and direct the AO to delete the additions sustained by CIT (A) towards extra consideration alleged to have been paid for purchase of the property. Addition made towards credits found in bank account - HELD THAT:- When the appellant is having sufficient income in excess of credits found in the bank account, then credits in bank account can be very well explained out of income declared in ITR. Therefore, the AO is erred in making separate addition. The learned CIT (A) after considering the relevant facts has rightly deleted the addition made by the Assessing Officer and thus, we are inclined to uphold the findings of ld. CIT(A) and reject ground taken by the Revenue. Addition made towards income from family pension - HELD THAT:- The assessee has filed relevant bank statement of the assessee from 1/4/2016 to 31/03/2018 which and as per the said bank statement, the appellant has only received family pension of Rs. 1,20,000/- and the same has been disclosed in her return of income filed for the impugned A.Y. Therefore, we are of the considered view that when the appellant has received only Rs. 1,20,000/- income of family pension, it is incorrect on the part of the AO and the learned CIT (A) to assume that the assessee has received Rs. 6,60,000/- income from family pension without there being any evidences to prove this finding, more particularly when the assessee claims that for earlier A.Ys she has received arrears from family pension. Thus, we set aside the order of the learned CIT (A) on this issue and direct the Assessing Officer to delete the addition made towards income from family pension.
-
2024 (8) TMI 1018
Non admission of additional evidence produced by the assessee by CIT(A) - HELD THAT:- CIT(A) has rejected the evidences submitted before him without granting proper opportunity to the assessee as well as analyzing the evidences submitted before him. In our considered view, the evidences submitted by the assessee goes to the root of the matter and Ld CIT(A) could have dealt with the issue on merits instead of rejecting on the face of it. Since the issue raised by the assessee and the additional evidences have direct correlation. Hence these are required to be admitted to adjudicate the issue on merit. Accordingly, the ground no 2 raised by the assessee is allowed. Addition on account of non-recognition of late payment surcharge (LPSC) - claim sale prices of the electricity and late payment surcharge (LPSC) of existing rate of 1.5% per month in case the sale considerations are settled beyond the agreed period of settlement - as per AO assessee follows mercantile system of accounting and the same is chargeable to tax whether it is received or receivable - HELD THAT: - We observe that the assessee has not recovered any LPSC in the past and as per the accounting standard and norms, the assessee has to declare its income not only based on accrual system, also supported by the concept of certainty of recovery. In the similar facts on record, the Hon ble Supreme Court held in the case of Godhara Electricity Co. Ltd. [ 1997 (4) TMI 4 - SUPREME COURT] that there was real accrual of income to the assessee Co. in respect of the enhanced charges for supply of electricity, has to be considered by taking the probability or improbability of realisation in a realistic manner. Tribunal had rightly held that the claim at the increased rate made by the assessee Co., on the basis of which necessary entries were made, represented only hypothetical income and the impugned amount as brought under tax by the ITO did not represent the income which had really accrued to the assessee during the relevant previous year - mere accrual does not make the income chargeable to tax but also supported by the concept of certainty of recovery . Therefore, we are inclined to allow the grounds raised by the assessee both in addition made under normal provision of income tax and also under MAT provisions. Also we observe that the assessee has submitted various propositions before us, since we have already allowed the grounds raised by the assessee on the basis of concept of certainty of realization based on the Accounting Standards, the other propositions raised by the assessee are not adjudicated at this stage. In the result, the grounds raised in ground 3 and 4 are allowed. Disallowance u/s 36(1)(iii) - proportionate interest calculated by applying average cost of debt to the total investment being CWIP, additions to fixed asset and capital advance - interest on borrowed capital pertaining to additions to fixed asset, Capital WIP and capital advances has been capitalized during the year - HELD THAT:- On careful analysis of the facts on record, we observed that the capitalization of interest is directly linked to the specific funds utilized for the purpose of making investment for the creation of fixed assets. In the given case, we observed that the assessee has proceeded to make investments in the three categories, viz., a). direct purchase of fixed assets, b). In house development of project I (Bamnauli project) and c). In house development of project II (Bawana Project). As per the information submitted before us clearly shows that the Bawana Project was already commissioned in FY 2013-14 and to the extent of interest for the period was already capitalized. In this project there was direct utilization of equity funds, loan from PFC and GNCTD. The interest was already determined and capitalized at the time of commissioning of the project itself. Therefore, there is no requirement to make further capitalization in this project. The next project is Bamnauli Project, it was submitted that this project was fully financed out of equity introduced by GNCTD and no borrowed funds were utilized during this AY. The relevant evidence was submitted before CIT(A) and he has rejected the same. For the sake of justice, we observe that none of the tax authorities have verified this aspect and for the sake of clarity, we direct the AO to verify the claim of the assessee and allow the same as per law. The next issue is direct purchase of assets, once it is put to use, or deferred there is no concept of further capitalization. Therefore, we do not see any reason to sustain the addition made by the AO. Therefore, we direct AO to only verify the Project Bamnauli and allow the claim of the assessee as per law after providing proper opportunity of being heard to the assessee. In the result, ground raised by the assessee is partly allowed as per above directions. Deduction claimed u/s 80IA(4)(iv) - addition of amount of notional interest accounted for in the accounts of the company during the Financial Year 2017-18 on the liability to be discharged by the Assessee to its contractors in future by adopting IND AS with effect from the financial year 2015-16 - HELD THAT:- Deduction u/s 80IA is allowable to the assessee on the basis of eligible unit. In the present case, the assessee has two eligible units eligible to claim deduction u/s 80IA, therefore the computed income under the Act is towards the income generated for the purpose of eligible business u/s 80IA. After careful consideration, we are of the view that the assessee has rightly determined the eligible profit from the eligible business by adopting the declared profit as per Profit and Loss Account statement and added back the notional finance cost, which is otherwise not allowable expenditure under the Income Tax Act. Even otherwise, the assessee determines the eligible profit of the eligible unit separately, by considering the revenue from eligible units and relevant costs of eligible units, without considering the notional loss adopted in the books of account, the relevant eligible profit would be the same. Therefore, the disallowance of deduction claimed u/s 80IA of the Act by the assessing officer is not proper. Accordingly, the ground raised by the assessee is allowed. Disallowance as revenue expenditure u/s 37(1) r/w section 43A - net loss on account of foreign exchange transaction and translation on account of capital assets acquired by the assessee from abroad - HELD THAT:- The assessee has reinstated the forex liability in the Balance Sheet and the excess liability was claimed as forex loss. In the subsequent AY, the relevant settlement will be made and in case the settlement made are lesser than the liability created above, the same will be declared as income during the next AY. The method of accounting is continues process and the liability in the foreign currencies has to be recognized at the end of each year. Therefore, the foreign currency liability relating to the above project remained with the assessee till the relevant liability is settled. Considering the agreement with BHEL on payment procedure agreed with them, the claim made by the assessee during the year under consideration is proper. Accordingly, the ground raised by the assessee is allowed. Disallowance of depreciation - CIT(A) has sustained the additions by observing that the assessee had failed to submit the working/details of depreciation claimed - HELD THAT:- As as submitted before us that the assessee itself has claimed 50% of the depreciation for those assets which were added to the fixed assets after 01.10.2017. Since the assessee has already submitted the relevant depreciation schedule in the audit report, we are inclined to remit this issue back to the file of AO to verify the relevant depreciation schedule and also verify the relevant documents submitted to claim that the assets were already put to use on or before 31/03/2018. The assessee had already adopted the relevant method of claiming the depreciation as per the rates in Appendix 1A, AO has to verify the same afresh as per law after giving proper opportunity of being heard to the assessee. Accordingly the grounds raised by the assessee on the issue of depreciation u/s 32(1) as well as allowable depreciation in the computing the book profit u/s 115JB of the Act are remitted back to AO to verify the same and allow them as per law. It is needless to say that assessee may be given proper opportunity of being heard. Accordingly, the ground raised by the assessee is allowed for statistical purpose.
-
2024 (8) TMI 1017
Revision u/s 263 - assessment order passed u/s 147 r.w.s. 144B - reasons for reopening the assessment was that assessee was a beneficiary of accommodation entry - HELD THAT:- The case of the assessee was reopened because of transaction with Shri Chiragkumar B Patel (Proprietor of Mahariv Sales Corporation), who was an entity provider and assessee was beneficiary from transaction with the above party. Hence, the question for decision against the above factual background before us is whether the AO passed an erroneous and prejudicial order in respect of the alleged transaction within the meaning of Section 263 of the Act. We find that the AO had issued notice u/s 143(2) and had supplied reasons for re-opening to the assessee, which was duly replied by the assessee vide replies dated 03.09.2021 and 22.10.2021. The assessee had given explanation regarding transaction with Shri Chirakumar B Patel and Shri Sailashbhai P Patel. Being satisfied with the reply of the assessee, the AO passed order u/s 147 r.w.s 144B of the Act accepting the returned income. Thus, it can be said that the AO has examined the issue and taken a considered view on the subject issue. AO cannot be said to have not applied his mind because in the assessment order itself he has observed that he had considered the details and documents and reply of assessee. PCIT has invoked jurisdiction u/s 263 by issuing notice u/s 263 of the Act and passed an order directing the AO to pass fresh assessment order after giving opportunities of being heard to assessee. There is a distinction between lack of inquiry and inadequate inquiry . If there was any inquiry, even inadequate, that could not, by itself, give occasion to the Ld.PCIT to pass order u/s 263 of the Act merely because he has different opinion in the matter. It is only in cases of lack of inquiry that such a course of action could be opened. In the present case, the Assessing Officer has duly examined the facts and formed an opinion that no addition is necessary in view of the reply of the assessee on the subject-issue. Therefore, the decision of PCIT that the order passed by AO was erroneous and prejudicial to the interest of revenue is not correct. Decided in favour of assessee.
-
2024 (8) TMI 1016
Addition u/s 37(1) - disallowance of advertisement expenses - allowability of expenditure as per Indian Medical Council Guidelines, 2002 - CIT(A) erred in restricting the disallowances to 50% without any verification and providing reasons for such estimation of partial relief - as per AO assessee was specifically asked with respect to the claim of the advertisement expenditure during the assessment proceedings to substantiate the same that does not fall under unethical Acts under the professional conduct, Etiquette and Ethics Regulations, 2002 of Indian Medical Council HELD THAT:- Assessee has failed to respond to any of the notices during the assessment proceedings. Subsequently, during the First Appellate Proceedings, assessee submitted various documents before the CIT(A) for which the Remand Report was obtained from the AO regarding verification of allowability of such expenditure. AO in his Remand Report objecting to such expenditure which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business. In addition to the above the AO also objected to the non submission of bank statements to prove the payments made to the advertisers. Further, in the Remand Report we find that AO has objected to the non-submission of details of TDS on the various payments made to the advertisers including the bank statements in support of the payments made to the advertisers. We also find that the assessee has not substantiated the claim of expenditure which are to be allowed under the Indian Medical Council professional conduct, Etiquette and Ethics Regulations, 2002. CIT(A) has also not adjudicated the case with respect to allowability of expenditure as per Indian Medical Council Guidelines, 2002. Chapter 6 of the Indian Medical Council Act, 1956 professional conduct, Etiquette and Ethics Regulations, 2002 prohibits even the institutions and organizations to solicit patients either directly or indirectly. We are therefore of the considered view that the assessee has violated the provisions of Indian Medical Council Act 1956, professional conduct, Etiquette and Ethics Regulations, 2002. There is no merit in the arguments of assessee has made public only the services offered by the assessee which in our opinion construes advertisement. Further, we also find that CIT(A) has erred in estimating the disallowances and restricting to 50% of the expenditure claimed by the assessee without providing any valid reasoning and hence we are inclined to set aside the order of the CIT(A), thereby restoring the order of the AO on this issue. Accordingly the appeal of the assessee is dismissed.
-
2024 (8) TMI 1015
Unexplained investment u/s. 69 - case was selected for scrutiny under CASS to verify the cash deposits made during the demonetisation period - assessee stated that the said the assessee got married on 15/05/2015 and the cash deposited during the demonetisation period are from the cash gifts received during the marriage ceremony and post marriage ceremony. HELD THAT:- The assessee has deposited Rs. 5,45,000/- to her bank account during the demonetisation period. Further, she got married on 15/05/2015 and stated that the source for the deposit of cash was gifts received during the Marriage function from the relatives, friends and well wishers. Since, the amount of deposit made to bank account and the gift received by the assessee on occasion of the marriage is a reasonable and by following the decision of the tribunal relied by the assessee we are inclined to delete the addition of Rs. 5,45,000/- made by the AO u/s. 69 of the Act as unexplained by allowing the ground the appeal of the assessee.
-
2024 (8) TMI 1014
Addition u/s 56(2)(viib) - difference between the market value and the consideration received - AO has adopted the book value as on 31.03.2011 whereas the assessee has adopted the revalued figure of land and buildings as on 31.10.2011 - Assessee has issued shares at a value of Rs. 250/- to its Directors at a premium of Rs. 240/- per share. The premium is arrived at by the assessee based on a draft valuation report issued by CB Rechard Elis which was further certified by the Chartered Accountant of the assessee - AO reworked the share premium based on the book value at 31.03.2011 to arrive at the value of share at Rs. 138.50 per share. Accordingly, the AO made an addition u/s 56(2)(viib) - HELD THAT:- As per the provisions of Rule 11UA in the case of unquoted shares the Fair Market Value (FMV) shall be determined based on the book value of assets and liabilities as on the valuation date for the purpose of making addition under section 56(viib). In the given case the AO has adopted the value as at 31.03.2011 which in our view is not correct. At the same time we notice that the assessee has not submitted the relevant document to substantiate the basis of valuation and also the proper statement of accounts as at the valuation date to enable to the AO examine whether share premium is not excessive or unsubstantiated. In the light of these facts and that lower authorities have not examined the facts correctly for the reason that the assessee did not produce the required documentary evidences in support of the claim, we deem it just and proper to remit the issue back to the AO for a de novo examination. The assessee is directed to produce all the relevant documents to substantiate the valuation of land and building and the valuation of shares at Rs. 250/- per share. AO is directed to examine the facts of the case based on the documentary evidences that may be submitted by the assessee and decide in accordance with law. Appeal of assessee is allowed for statistical purposes.
-
2024 (8) TMI 1013
Disallowance of expenditure incurred for earning the income under section 57(iii) - HELD THAT:- AO in the assessment order has disallowed the expenditure claimed on ad-hoc basis. AO nowhere challenged the genuineness of the expenditure. Rather in the assessment order, AO had mentioned that Bills, Vouchers were submitted. It is an admitted fact that expenditure has been claimed u/s 57(iii) of the Act. Thus, as per section 57(iii), any expenditure which has been incurred wholly and exclusively for earning income and which is not capital expenditure is an allowable deduction. In this case, it is not the case of the AO that the expenditure was capital expenditure. Thus, the only thing one needs to verify is that whether it was incurred wholly and exclusively for the purpose of earning income. Admittedly, assessee had earned income from dispensing medicines. We have perused the list of expenditure submitted by the ld.AR and apparently, we are convinced that it was incurred in relation to income earned from dispensing medicines. The AO has also not challenged genuineness of the expenditure. The AO has not doubted that expenditure was not incurred for earning income. As relying on PETROLEUM SPORTS PROMOTION BOARD [ 2014 (3) TMI 298 - DELHI HIGH COURT ] we are of the opinion that AO had no jurisdiction to make the ad-hoc disallowance of 50% expenditure without pointing out any defect in the Bills, Vouchers or Ledgers pertaining to the expenditure - we direct the AO to delete the addition made - Accordingly, Ground No. 1 of the assessee is allowed.
-
2024 (8) TMI 1012
Disallowance of Deduction u/s 48 - indexed cost of acquisition claimed denied for a reason that the assessee has not furnished any documentary evidences supporting the claim of the deduction - CIT(A) has denied admitting the additional evidence - HELD THAT:- From the perusal of the dates on which the notices were issued it is observed that the same are issued during the Covid period and therefore, in our considered view there is a reasonable cause for the assessee for not appearing before the AO. From the perusal of the Paper Book submitted before us, we noticed that the assessee has submitted before the CIT(A) an affidavit from the seller of the property to the assessee, copy of receipt acknowledging the consideration received from the assessee by the seller, copy of society transfer documents in favour of the assessee, copy of letter of transfer of tenement issued by MHADA in favour of the assessee, and the share certificate issued by the Society in favour of the assessee. The assessee has submitted these documents before the CIT(A) in order to substantiate the claim of the indexed cost of acquisition. CIT(A) has denied admitting the additional evidence stating that the same should have submitted before the AO. Considering the fact that the notices were issued by the AO during Covid period and that the assessee has submitted all the relevant documents to substantiate the claim of deduction, in our considered view it is just and proper to give one more opportunity to the assessee to evidence the claim made before the AO. Appeal of the assessee is allowed for statistical purposes.
-
2024 (8) TMI 1011
Addition u/s 68 - unexplained cash deposited in bank account - assessee trying to explain the cash deposited in April 2014 for a sale made in May 2014 sold - HELD THAT:- AO has not mentioned anywhere in the assessment order regarding to the Bank account number and the joint holders of the abovesaid bank account. The assessee had submitted the reply and facts along with the nature and source of the cash deposit, during the assessment proceedings and even before the CIT(A), but the facts apparent from record are not considered by lower authorities. The spouse of the assessee has sold the house property in the year 2014-2015. The property was sold for consideration of Rs. 40 Lacs out of which the cash of Rs. 4 Lacs was received by the spouse of assessee, before the execution of the Sale deed in the beginning of month of April 2014. The amount of Rs. 4 Lacs received in cash was deposited by wife in the abovementioned Joint Bank account situated at SBI Bhilwara so the source of the said money cannot be added in the hands of the assessee. As regards the saving by the wife of the assessee wherein the assessee submitted that she is earning leady filing the return of income the money so deposited in the bank account belong to her the wife cannot be added in the hands of the assessee. Since, the information that the cash deposited is related to his wife, these explanations of the assessee who is also self employed and having saving of Rs. 3,59,000/- cannot be denied in the wife of the assessee. Therefore, there is no basis to make the addition in the hands of the assessee. As regards the sale of household items there is no finding in the order of the ld. CIT(A) as to why the said amount being small in nature cannot be considered as not taxable in the hands of the assessee. In the light of these facts and considering the explanation of the assessee is Rs. 21,000/- cannot be denied the benefit also the assessee. In the light of the facts and circumstances of the case, the discussion herein above the appeal of the assessee is allowed.
-
2024 (8) TMI 1010
Addition of cash deposit in bank account - unexplained money u/s 69A r.w.s. 115BBE - HELD THAT:- The previous withdrawal was Rs. 15,00,000/- whereas the assessee deposited only Rs. 11,00,000/-. Therefore, the previous withdrawal was more than enough to meet the re-deposited money. Hence, in present case, there is no necessity of any verification or re- consideration at AO level. Therefore, the addition made by AO needs to be deleted straight-away on the basis of previous withdrawal itself. As relying on SHRI. GIRIGOWDA DASEGOWDA, BENGALURU [ 2022 (8) TMI 1406 - ITAT BANGALORE] we agree that the amount of previous withdrawal was more than the amount of re-deposit, therefore there is no shortfall requiring any further verification at AO level. Being so, we are inclined to delete the addition made by AO - Decided in favour of assessee.
-
2024 (8) TMI 1009
Application u/s 154 against the intimation u/s 143(1) - Adjustment on account of ICDS - HELD THAT:- Case of the assessee was selected for scrutiny for examining ICDS compliance and adjustment and which in the facts of the present case relates to claim - AO has issued specific notices calling for information /documentation in support of the said claim from time to time and in response, the assessee has filed its submissions providing the necessary explanation as to the nature of the transaction in relation to which claim of losses has been made during the year under consideration as well as filed the necessary information/documentation in support thereof. The matter was therefore examined during the course of assessment proceedings and while passing the assessment order, no adverse finding has been recorded by the AO which means that the claim of the assessee has been examined and duly accepted by the AO. While computing the income, the AO took the figure of income as computed u/s 143(1) of the Act which in normal course would be the right basis but in the facts of the present case, where there was adjustment on account of ICDS as per intimation u/s 143(1) and thereafter, the matter relating to ICDS adjustment was subject matter of examination and in fact, duly examined and accepted during the course of assessment proceedings, the AO should have considered the income after deleting the adjustment as per intimation u/s 143(1) which apparently has not happened in the instant case. We therefore find that the facts are crystal clear and apparent from record that the adjustment towards the ICDS has not been deleted by the AO while computing the income whereas the same was duly examined and accepted during the course of assessment proceedings. We set-aside the order of the CIT(A) and direct the deletion of adjustment. Appeal of the assessee is allowed.
-
2024 (8) TMI 1008
Validity of Reassessment proceedings - reasons to believe - Addition u/s 68 - treating the short- term capital gains earned by the assessee from sale of shares as bogus - HELD THAT:- We find that in the present case return of income filed by the assessee was not selected for scrutiny. AO based on the information received from the DDIT(Investigation), Unit-6(2), Mumbai initiated the reassessment proceedings. We are of the considered view that the said information constitutes new and tangible material for initiating the reassessment proceedings in the case of the assessee and on the basis of the aforesaid information, the AO initiated proceedings under section 147 of the Act and issued a notice u/s 148. Thus, sufficiency or correctness of the material is not a thing to be considered at the stage of recording the reasons. As a result, we find no infirmity in the reassessment proceedings initiated by the AO under section 147 of the Act. Bogus STCG - The lower authorities have not examined the details furnished by the assessee and have not analysed the claim of the assessee in light of those details. Further, no material is available on record to show that the assessee was put to notice before disputing the source of the payment made for purchasing the shares of VAS Infrastructure Ltd. From the record it is also evident that an opportunity to cross-examine the broker on whose statement Revenue has placed reliance was also not provided to the assessee. Accordingly, we deem it appropriate to restore this issue to the file of the AO for de novo adjudication after considering the details filed by the assessee. Since the matter is restored to the file of the AO, the assessee shall be at liberty to furnish any other information in support of his claim. Appeal by the assessee is partly allowed for statistical purposes.
-
2024 (8) TMI 1007
Penalty u/s. 271AAB - additions on account of service tax refund - HELD THAT:- The assessee s case, in our considered opinion, would squarely fall within Clause (c) of Sec.271AAB(1) since the admission made by the assessee was not honored in the return of income and clause (a) and (b) would have no application in such a case. The only clause which would apply to the assessee s case would be clause (c) which has correctly been invoked by Ld. AO in the present case. We also concur with the submissions of Ld. Sr. DR that adequate opportunity of hearing was given to the assessee to assail the penalty. The same is as per the provisions of Sec. 274(1) of the Act. Whether the same was through statutory notice or a non-statutory notice would be immaterial. The only requirement is that opportunity of hearing should be given specifically mentioning the ground which the assessee has to meet. The same has been done in the present case. The various case laws as referred to by Ld. AR would have no application to the facts of the present case since the limb which would apply to assessee s case has clearly been spelt by Ld. AO in the penalty order. No other limb could have been invoked against the assessee. The arguments of Ld. AR, in this regard, stand rejected. In the present case, the limb was clearly spelt out and the assessee could not offer any explanation against the impugned addition. The assessee never raised any grievance against notices of penalty before lower authorities and merely pleaded to keep the proceedings in abeyance till the disposal of quantum appeals by Hon ble High Court of Madras. Penalty order is barred by limitation u/s 275(1) - The extant statutory provision provides that in case the assessment order is subject matter of appeal before appropriate authorities including Tribunal, no order shall be passed after the expiry of financial year in which the relevant proceedings in which penalty is initiated are completed or within one year from the end of the month in which the appellate order is received, whichever is later. In the present case Tribunal has passed order in quantum appeal on 27-09-2019. Considering the same, penalty order has been passed by Ld. AO on 23-03-2020. Therefore, the penalty order is well within the prescribed time limits. The arguments of Ld. AR, in this regard, stand rejected. Violation of principle of natural justice - The facts on record do not show any such violation. Adequate opportunity of hearing has already been afforded to the assessee. Ground No.3 4 stand dismissed since the income surrendered but not admitted would fall under the purview of undisclosed income - Assessee appeal dismissed.
-
2024 (8) TMI 1006
Validity of order passed by CIT(A) - Validity of reassessment order - ex-parte order passed w/o affording adequate opportunity of being heard and denying inspection of assessment records, in gross violation of principles of natural justice - HELD THAT:- The order dated 18.03.2022, passed ex-parte qua the assessee, is a non-est order, in as much as it was passed on 18.03.2022, which was a Public Holiday, since the festival of Holi fell on 18.03.2022 and as such, 18.03.2022 was not a working day. Then, vide notice dated 11.03.2022, issued u/s 250 of the Act, the assessee had been required by the NFAC to submit written submissions on or before 21.03.2022 Therefore, evidently, the assessee was to file written submissions on or before 21.03.2022. However, the impugned order got to be passed, in high haste, before the expiry of the said date of 21.03.2022, i.e., on 18.03.2022, rendering the order passed by the ld. CIT(A) to be an order passed in flagrant violation of the stipulation/requirements contained in the notice dated 11.03.2022. Apropos the observations of the ld. CIT(A) to the effect that the documents, the certified copies of which were sought by the assessee from the office of the Assessing Officer, were either already in the possession of the assessee, or were not relevant for the purposes of the decision of the appeal pending before the ld. CIT(A), it is trite that it is not for the ld. CIT(A), in the absence of material on record leading to such a conclusion, to hold that these documents were in possession of the assessee. It is not within the purview of the ld. CIT(A) to conclude that the documents were not relevant for the purposes of the decision of the appeal. It is entirely only for the assessee to consider as to whether the documentary evidence which he seeks to rely on is relevant or not. Shutting out the supply of certified copies of the assessment record to the assessee is nothing other than violation of the principles of natural justice, in that thereby, the assessee though legally entitled to it, has been deprived of documentary evidence available on record of the AO. The adjournments too, are not shown to have been sought as unnecessary adjournments. It is, due to the fact that the certified copies of the assessment record, as sought for by the assessee from the office of the AO, were only partially supplied to the assessee, despite the assessee having given repeated numerous reminders requesting supply of such certified copies of the assessment record, that the adjournments (two in number) were sought. On considering the above conspectus of the matter, the grievance of the assessee by way of Ground Nos. 1 2, is found to be justified . The order passed by the ld. CIT(A) is an order passed in violation of the principles of natural justice. Accordingly, the order under appeal is set aside and the matter is remanded to the file of the ld. CIT(A), to be decided afresh - CIT(A) shall pass the order expeditiously, i.e., within a period of three months from the date of receipt of this order. Assessee appeal allowed for statistical purposes.
-
2024 (8) TMI 1005
Cash deposit during the demonetization period - unexplained cash credit u/s 68 - CIT(A) construed nature of the appellant's professional income as exclusively from cash receipts - CIT(A) has sustained addition u/s 69A - HELD THAT:- According to the ld. CIT(A), entire amount has been shown as receipt from Nursing Home by way of cash and there is no supporting evidence to come to the conclusion that how the assessee has received the entire amount by way of cash and there are no credit cards or payment through bank transfers and no details are given to prove the same. In our opinion, it is the duty of the assessee to place necessary corroborative material to show that the above amount has been received by way of cash receipts from Nursing Home by producing the relevant documents. The ld. A.R. made a plea before us that the assessee maintained the regular books of accounts and audited u/s 44AB of the Act and the same has been disclosed as professional income and due credit to be given. In our opinion, this issue has been considered by this Tribunal in the case of Bhoopalam Marketing Services Pvt. [ 2022 (11) TMI 331 - ITAT BANGALORE] wherein held abnormal jump in percentage of cash trails to on identifiable persons as compared to earlier histories will also give some indication for suspicion. Non- availability of stock or attempts to inflate stock by introducing fictitious purchases is also some indication for suspicion of fictitious sales. Transfer of deposit of cash to another account or entity, which is not in line with the earlier history. Therefore, it is important to examine whether the case of the assessee falls into any of the above parameters are not. In view of the above order of the Tribunal, we are inclined to remit the issue in dispute to the file of ld. AO for fresh consideration to examine in the light of above order of the Tribunal. Unsecured loan receipts - assessee has not submitted any details which can prove the genuineness of the unsecured loan and creditworthiness of persons who have advanced the loan - D.R. is that there is a doubt about the capacity of the lenders and genuineness of the transactions and documents produced by the assessee are self- serving document as not enough to justify the claim of the assessee - HELD THAT:- As seen from the facts of present case, the lower authorities concerned has to examine the evidences furnished by conducting independent enquiry and there after to state whether he is satisfied with the details of evidences produced by the assessee and conducting of enquiry made by him. If he is not satisfied with the details of evidence and enquiry made by him after confronting the same to the assessee, he should take a decision to make an addition or not to make addition. At this point of time, it is not possible to hold that assessee has successfully discharged its primary onus cast upon him to explain the source of alleged credits in its books of accounts. Though the lower authorities noted the various shortcomings in the compliance made by the assessee, the lower authorities has not carried out the enquiry to the full extent. AO can also refer to any material or evidence available with him and call upon the assessee to file their response and a general and universal procedure or method to be adopted by AO while verification of facts cannot be laid down. However, the manner, the mode of conducting assessment proceedings has to be left to the discretion of the AO and same should be just, fair and should not cause any harassment to the assessee. The provisions of Evidence Act are not applicable, but the AO being a quasi-judicial authority must take care and caution to ensure that decision is reasonable and satisfied the balance of equity, fairness of justice and the principles of preponderance of probabilities apply - It is appropriate to remit this issue in dispute to the file of ld. AO to carry out necessary enquiry on this issue as deemed fit and to decide accordingly. Addition as income u/s 68 declared by assessee as an agricultural income - contention of the ld. D.R. that the assessee has not placed necessary evidence with regard to earning of agricultural income along with details of land holdings and also details of expenditure incurred for the purpose of earning agricultural income - HELD THAT:- A.R. made a plea that in earlier assessment years, the agricultural income declared by the assessee has been accepted. It was submitted that on similar line, the agricultural income declared by assessee in this AY to be accepted. In our opinion, the principles of res judicata does not applicable to the income tax proceedings. More so, there is no evidence produced by the assessee to suggest that in earlier assessment years, the agricultural income has been accepted by the department vide scrutiny assessment u/s 143(3) of the Act. The agricultural income earned by assessee in each assessment year depend upon the various factors and the assessee is required to establish in each assessment year that he has earned the agricultural income declared in his return of income. Being so, in the interest of justice, it is appropriate to remit the issue in dispute to the file of ld. AO to examine these facts with regard to earning of agricultural income.
-
Customs
-
2024 (8) TMI 1004
Classification of imported goods - Navigation System - Multifunctional Devices or not - classifiable under CTH 8527 2900 or under Chapter Heading 8526 9190? - penalty u/s 114A of the Customs Act, 1962 - Extended period of Limitation - it was held by CESTAT that 'the Commissioner (A) was justified in invoking the suppression on the ground that the facilities provided to the appellant being an Accredited client was misused by mis-declaring the facts. Accordingly, the differential duty with interest is upheld along with mandatory penalty under Section 114A of the Customs Act, 1962.' HELD THAT:- The appeal is dismissed.
-
2024 (8) TMI 1003
Invocation of the extraordinary remedy under Article 226 of the Constitution of India - Seizure of goods and the adjudication order - Reasons to believe - denial of cross-examination - violation of provisions of N/N. 9/96 (N.T)-Cus dated 22.01.1996, issued under Section 11 of the Customs Act - violation of principles of natural justice - HELD THAT:- The reason to believe is the foundational aspect which enables seizure and initiation of an adjudication proceeding. In the present case it is seen that the reason to believe is illegal import while the adjudication has proceeded on the allegation of illegal export. Even the counter affidavit speaks of export of sugar having been regulated by licence. It is found that the foundational aspect to be absent in the above proceedings; which would enable invocation of the extraordinary remedy under Article 226, as has been held in STATE OF HP. AND OTHERS VERSUS GUJARAT AMBUJA CEMENT LTD. AND ANOTHER (AND OTHER APPEALS) [ 2005 (7) TMI 353 - SUPREME COURT] - the Hon ble Supreme Court has held that if an assessee approaches the High Court without availing the alternate remedy, it should be ensured that the assessee has made out a strong case or that there exists good grounds to invoke the extraordinary jurisdiction. While reiterating that Article 226 of the Constitution confers very wide powers on the High Court, it was clarified that nonetheless the remedy of writ is an absolutely discretionary remedy. There is clear lack of jurisdiction in so far as the adjudication proceedings initiated on the ground of illegal export when the seizure was on the belief that there is illegal import . The request for cross-examination of the seizing officer hence assumes relevance and the denial to summon the officer is a clear violation of principles of natural justice. Both these aspects justify the invocation of the extraordinary remedy under Article 226 of the Constitution of India. The writ petition hence stands allowed setting aside the impugned order.
-
2024 (8) TMI 1002
Classification of imported goods - Dryview 6850 Laser Imaging W/3D (Medical Equipment) - to be classified under Customs Tariff Heading 90189019 as other diagnostic instruments and apparatus or under Heading 9033? - HELD THAT:- The intended use of the Laser Imager as per the Company s booklet, is that it will interface with a variety of digital modalities including but not limited to CR (Computed Radiology) DR (Digital Radiology), CT (Computerized Topography), MRI (Magnetic Resonance Imaging) and FFDM (Full Field Digital Mammography). It does not state that the accessory is more suited solely or principally for one machine as against the others either due to its make, technology used or capabilities etc. while the word solely means only and not involving anyone or anything else , the word principally means primarily or of first importance . Hence the market test of the goods shows that it a multi-compatible accessory for a variety of medical digital imaging sources and cannot be said to be suitable for use solely or principally with a particular kind of machine or instrument or apparatus, or with a number of machines, instruments or apparatus of the same heading. In such a situation it would be a travesty to limit its suitability or use only as an accessory to the MRI system or to medical equipment classifiable under CTH 9018 only. Classifying a multi-compatible accessory by pairing it with the machine of choice of the importer runs the possibility of the same model of the Laser Imager being classified under different heading each time an importer declares its suitability or use solely or principally with a machine covered by a different CTH. Classification of imported goods cannot be the subject matter of such vagaries. This being so classification of the impugned goods under CTH 9018 9019, by application of Note 2 (b) of chapter 90 would not be appropriate. The appellant has referred to the Tribunals judgment in MANIPAL ACADEMY OF HIGHER EDUCATION VERSUS COMMR. OF CUS., CHENNAI [ 2005 (5) TMI 165 - CESTAT, BANGALORE ], as upheld by the Supreme Court in COMMISSIONER VERSUS MANIPAL ACADEMY OF HIGHER EDUCATION [ 2006 (3) TMI 810 - SC ORDER ], to state that Path speed work station which was capable of use along with CT Ultra scan, X-ray systems was also held to be an accessory to the MRI system and was accordingly found eligible for exemption under notification no 20/99-Cus as an accessory. The facts of the present case are different. The Lower Authority has taken a view which is reasonable, legal and proper - the impugned order is upheld - appeal dismissed.
-
2024 (8) TMI 1001
Levy of ADD - whether the imported goods declared as Aluminium Foil Paper Ultrathin 5 5.5 microns falling under CTH 7607 and originating in or exported from China PR are in the thickness range of 5.5 microns to 80 microns so as to attracts ADD as per Notification No. 23/2017-Customs (ADD) dated 16.5.2017? HELD THAT:- The Ld. Commissioner (Appeals) found that the said BIS standard is for 11 micron to 75 micron. Moreover, none of these test reports that came out are in favour of the appellant to prove that the imported goods thickness is less than 5.5 microns as declared by them in the bill of entry. Further, the ADD notification supra does not contain any clause with reference to such tolerance level for exemption and therefore she agreed with the department s plea that such tolerance level is applicable only for the purpose of clearance into the Indian market and it not applicable for the purpose of levy of ADD. It is found that the question of a defect of jurisdiction strikes at the very authority of the Proper Officer to pass any order, and such a defect cannot be cured even by consent of parties. The inherent lack of jurisdiction for issue of SCN if found, makes the subsequent order passed by the Authority void in law. The issue hence merits being disposed of first before any other issue is examined on merits. The discussion in the impugned order is cryptic and would require a more detailed treatment on the legal issues involved and merits a remand. The matter remanded back to the Commissioner of Customs (Appeals) for de novo decision - appeal disposed off by way of remand.
-
2024 (8) TMI 1000
Classification of imported goods - Montanide ISA 206 VG - to be classified under CTH 38249090 or CTH 30023000? - importer has claimed classification under CTH 38249090, whereas department has proposed and classification under CTH 30023000 as Vaccine for veterinary medicine - HELD THAT:- The adjuvants are to be classified as per the material composition in the respective Tariff heading. The appellant imports different Adjuvants , based on their composition, they are being classified, accordingly. It is found that the item imported is Immunological Adjuvant used in the preparation of vaccines for human and animals. Immunological Adjuvant was classified by the Department under Tariff Item 30023000 as Vaccine for veterinary medicine as against the appellants declaration under Tariff Item 38249090 as chemical products not elsewhere mentioned even though the imported goods are injectable mineral oil and emulsifier obtained from mannitol and purified oleic acid of vegetable origin. The Adjuvants are of different types and they are used for the purpose of enhancing the immune response in the Immunological vaccines administered for humans and animals. It is found that to classify Adjuvant as a vaccine by the Department is incorrect and not legally tenable. Therefore, the confirmation of demand with interest is legally not sustainable, hence it needs to be set aside - it is also found that the imposition of penalty under Section 114A of the Customs Act. 1962 is also not sustainable as there is no misdeclaration or suppression of facts as all the details are submitted at the time of filing the bill of entry. The appeal is allowed.
-
2024 (8) TMI 999
Confiscation of goods - redemption fine - penalty - importer tried to evade the duty deliberately claiming lesser IGST - applicability of N/N. 1/2017, dated 28-6-2017 - HELD THAT:- There is no dispute that the appellant had imported footwear and as per the relevant N/N. 1/2017, it was mandatory to mention the sale price of the footwear on the footwear itself for claiming the benefit of concessional rate of duty. The appellant also admits that they were aware of the fact that MRP had to be mentioned since in the past also they had imported and cleared the goods and it is also admitted that the imported goods MRP/RSP was not mentioned on any of these products. The Commissioner appeals in the impugned order has rightly observed that As per Sl. No. 225 of Schedule 1 of N/N. 1/2017 (Rate), dated 28-6-2017 this lower rate of 5% is applicable to footwear of Chapter 64 only if they have a retail sale price not exceeding Rs. 1,000/- per pair provided that such retail sale price is indelibly marked or embossed on the footwear itself and otherwise IGST 18% shall be applicable . Since admittedly the goods are being cleared without MRP/RSP goods are liable for confiscation as held by the Commissioner is valid - the differential duty amount approximately Rs. 5,00,000/-, the redemption fine and penalty of Rs. 49000/- appears to be nominal and therefore, the impugned order needs no interference. The impugned order is upheld - Appeal dismissed.
-
Corporate Laws
-
2024 (8) TMI 998
Approval of the Scheme of Arrangement for the revival of the Corporate Debtor under section 230 read with Section 66 of the Companies Act, 2013 and Regulation 2-B of the IBBI (Liquidation Process) Regulations 2016 - whether Regulation 37(1) and (2) of the LODR would apply to the Scheme submitted by the Liquidator under Section 230 of the Companies Act read Regulation 2B of the Liquidation Process Regulations? HELD THAT:- SEBI has chosen to exempt the requirement of seeking NOC from stock exchanges for any restructuring proposal by way of a resolution plan under Section 31 of the Code. This is in accordance with the principle the CIRP process under the Code must be carried out in a time-bound manner under the supervision of one authority i.e. the Ld. NCLT. Pertinently, when the amendment was carried out, the concept of schemes of arrangement for revival of companies in liquidation was not statutorily recognized under the Code. There was no specific provision under the Code or under the Liquidation Process Regulations that permitted such a scheme of revival. Admittedly, schemes for revival of companies in liquidation was prevalent under the old Companies Act, 1956 and had been recognized by the Hon ble Supreme Court in MEGHAL HOMES (P.) LTD. VERSUS SHREE NIWAS GIRNI KK. SAMITI [ 2007 (8) TMI 447 - SUPREME COURT ]. However, it was not clear as to whether the same would also apply to a company undergoing liquidation under the Code. Thus, it can be safely stated that when SEBI carried out the amendment to various regulations including the LODR in May 2018, it did not have in its contemplation the concept of a scheme for compromise or arrangement for revival of a company in liquidation. The scheme in question in the present matter is akin to a Resolution Plan under Section 31 of the Code and it complies with the requirement of Resolution Plan under Section 30(2) of the Code and Regulation 37 and 38 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The scheme contemplates full payment of CIRP and liquidation cost, dues of workmen, payment of settlement value to creditors, extinguishment of all liabilities filed or not filed/admitted or not admitted, ouster of the erstwhile promoters, inducting of the acquirers as new promoters, constitution of monitoring committee, payment of EMD and performance security etc. - The Courts have time and again held that every effort must be made to revive the business of the company as the same is in the interest of all the stake holders. Admittedly till date no objection has been raised by BSE on the merits of the Scheme, which offers Rs. 52.3 Crore for the Corporate Debtor (i.e. 3 times offers made by way of rejected resolution plans and higher than liquidation value of the Corporate Debtor). Further, the Stock Exchange has the opportunity to place before Ld. NCLT its objections, if any, to the Scheme of Arrangement in response to the notice issued to it prior to final approval of the scheme. The Impugned Order dated 4th April 2024 is set aside - prior NOC from stock exchanges under Regulation 37(1)(2) of the LODR is not required for schemes for revival of companies undergoing liquidation under the Code - Appeal allowed.
-
Insolvency & Bankruptcy
-
2024 (8) TMI 997
Initiation of CIRP - authentication of default as contemplated in Regulation 21, not taken - information of default not filed with the information utility - it was held by NCLAT that ' There are no substance in any of the submissions raised by the Counsel for the Appellant to interfere with the impugned order of the Adjudicating Authority' - HELD THAT:- There are no reason to interfere with the order of the National Company Law Appellate Tribunal - appeal dismissed.
-
2024 (8) TMI 996
Entitlement to file an appeal as an Independent Director in the Corporate Debtor - aggrieved person regarding acceptance of claim of the financial creditor or the quantum of financial credit admitted or not - it was held by NCLAT that 'The claim, as well as constitution of CoC with voting share as per claim, was in the knowledge of appellant from the very beginning. There are no fault in the RP s admission of claim of Respondent No. 2'. HELD THAT:- There are no reason to interfere with the impugned order - appeal dismissed.
-
Service Tax
-
2024 (8) TMI 995
CENVAT Credit - input services - Trading activities - N/N. 03/2011-CE dated 01.03.2011 - Rule 6(3A) of the Cenvat Credit Rules, 2004 - period of dispute is from 01.04.2011 to 31.03.2012 - HELD THAT:- In the present case the period of dispute is from 01.04.2011 to 31.03.2012 vide N/N. 03/2011-CE dated 01.03.2011, the definition of exempted service has been amended to cover trading activities. It is also that the appellant has accepted that they are required to reverse the cenvat credit on trading activities; as per the appellant the amount to be reversed comes to Rs. 2,00,455/-, whereas, as per the department, Cenvat credit required to be reversed as per the formula prescribed in rule 6(3A) amount to Rs. 2,70,184/-. On the basis of the formula as prescribed in Rule 6(3A) of the Cenvat Credit Rules the amount of proportionate credit to be reversed comes to Rs. 2,70,184/-. There are no infirmity in the amount of Cenvat credit to be reversed as held by both the authorities below after applying the formula given in Rule 6(3A) of Cenvat Credit Rules. It is found that Ahmedabad Bench of the CESTAt in the case of Orion Appliances Ltd. [ 2010 (5) TMI 85 - CESTAT, AHMEDABAD] , it was held that ' Naturally this cannot be done in advance since it may not be possible to forecast what would be the quantum of trading activity and other activity which is liable to service tax. The only obvious solution which would be legally correct appears to be to ensure that once in a quarter or once in a six months, the quantum of input service tax credit attributed to trading activities according to standard accounting principles is deducted and the balance only availed for the purpose of payment of service tax of output service.' In view of the statutory provisions as prescribed in Rule 6(3A) of the Cenvat Credit Rules and the decision of the Orion Appliances Ltd., it is found that there is no infirmity in the impugned order - the appeal is dismissed.
-
Central Excise
-
2024 (8) TMI 994
CENVAT Credit - removal of inputs or capital goods as such - Activity amounting to manufacture or not - whether the Department was justified in not accepting the claim of Manufacturing activity of the Appellant/importer insofar as the dump truck in question is concerned? - HELD THAT:- It is not in dispute that the imported goods falling under chapter 87 that was received in incomplete/unfinished condition, but having the essential character of the complete finished goods. The conversion/assembling of the imported dump truck in SKD condition into fully finished dump truck, could amount to manufacture. Further, there is also an observation by the commissioner insofar as the price difference is concerned, but however, the same alone may not be a reason for disregarding the very activity of manufacture since any such difference may invite a different action if the same amounts to infraction of any provision/s of the statute. But, in any case, the factum of assembly is required to be established, which is the primary condition. A cumulative reading of OIO and OIA indicates that the Revenue department had seriously disputed the claims of the Appellant including the import in SKD condition since, apparently, the same was understood to be a complete/finished product/article which was ready to be used. Hence, requiring the production of documentary evidences by the Show Cause Notice issuing authority is justified since, his satisfaction is paramount. Rule 2(a) of the General Rules of Interpretation could be applied when the facts are clear and so would Note 6 ibid. Facts are required to be placed on record before applying the Rules, when the importer has claimed that the article was in SKD condition, the invoice does not say so. But in any case, it was its duty to show with evidence, especially when asked, as to the processes undertaken by it to make the article a finished one. The orders relied upon by the appellant are thus distinguishable, clearly, on facts. It therefore, appears prima facie, that the appellant has not been able to demonstrate (1) the condition of the imported article; and (2) the processes to which the imported article was subjected to. There are no reasons to interfere with the findings of the First Appellate Authority and accordingly, the appeal is dismissed.
-
2024 (8) TMI 993
Refund claim of amount which was reversed - CENVAT credit taken on House Keeping Services, Courier Services, Hospitality services and Car hiring services - Statutory interest. Refund claim of amount which was reversed - whether the appellant could claim input-service tax credit on an output which is neither a service nor excisable goods? - HELD THAT:- A Coordinate Bench of this Tribunal examined the issue in detail in M/S WOODWARD GOVERNOR INDIA LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE-DELHI-IV [ 2023 (5) TMI 564 - CESTAT CHANDIGARH ] where it was held that 'The appellants have claimed that credit attributable to input services used in the manufacture of dutiable goods cleared by them was also sought to be denied. In terms of Rule 2(l), the input services used in the manufacture of dutiable goods cleared by them qualify to be called input services and therefore, credit cannot be denied on the same.' This being so the period during which the input credit was taken cannot find shelter from credit reversal, just because as per the appellants averments, Notification No. 3/2011-CE (NT) dated 1.3.2011 did not considered trading as an exempted service prior to the introduction of explanation, in Rule 2 of Rules, w.e.f. 01.04.2011 and the notification did not have retrospective effect. The fact whether trading is an exempted service or not is not a relevant consideration, so long as the output for which the input credit is taken, itself is neither a service nor excisable goods. CENVAT credit taken on House Keeping Services, Courier Services, Hospitality services and Car hiring services - HELD THAT:- Restriction on input used for personal use or consumption of employees etc. came about only after 01/04/2011. There is nothing to show that the said services were not used for the provision of output service. Further considering the low tax amount involved in these appeals and the appellant being prima facie eligible for the refund it would be in order, to grant such benefits without straining the plain words of the section at this distant date. Statutory interest - HELD THAT:- The same would be payable on the credit utilized and reversed towards trading activity only. The impugned order is modified setting aside the portion pertaining to refund claimed on various input services as shown in the table above and allow the refund of an amount of Rs. 98,578/- as claimed by the appellant along with interest paid on the said amount. The rejection of refund on the service tax paid on various services used for trading activities of Rs 39,71,696/- along with interest is upheld. Appeal allowed in part.
-
2024 (8) TMI 992
Refund of excise duty paid - by-product molasses - captive consumption(being exempted under N/N. 67/95CE dated 16.3.1995, as amended) for the manufacture of exempted final products - Rectified Spirit and Extra Neutral Alcohol - HELD THAT:- Undisputed facts are that the appellants are manufacturing sugar and in the process of manufacturing of sugar, molasses emerge as a by-product which in turn used in the manufacture of dutiable products viz., Fuse Oil, Denatured Spirit, Ethyl Alcohol and Carbon dioxide; and also exempted products viz., Rectified Spirit and Extra Neutral Alcohol. The appellant had initially discharged duty on the said molasses for the period September 2007 to April 2008. Later, they filed a refund claim of the duty paid pleading that molasses consumed captively, eligible for exemption under Notification No.67/95-CE dated 16.3.1995, since they have complied with the Condition (vi) of the N/N. 67/1995-CE dated 16.3.1995. Therefore, molasses even if used in the manufacture of exempted products viz., Rectified Spirit and Extra Neutral Alcohol still eligible to avail exemption. In the present case, the appellant had reversed proportionate credit attributable to manufacture of molasses which cannot make them eligible to claim exemption N/N. 67/95-CE on molasses used in the manufacture of exempted goods, which is the second stage of manufacture of Ethyl Alcohol and denatured spirit. Thus, the credit attributable to the inputs i.e., molasses used in the manufacture of exempted goods is to be statutorily reversed. This Tribunal analysing the relevant provisions of Rule 6 of CCR, 2004 has taken a view that credit on inputs availed and used in the manufacture of molasses, an input and intermediate by-product, which in turn is used in the manufacture of exempted final products viz., Ethyl Alcohol and denatured spirit, therefore, inputs attributable to the manufacture of molasses, on its reversal, is a sufficient compliance of Rule 6 of CCR, 2004; hence, eligible to the benefit of N/N. 67/95-CE dated 1.3.1995. The impugned order is set aside - Appeal allowed.
-
2024 (8) TMI 991
Clandestine removal - SSI exemption - clubbing of clearances - brand name Parrot which belongs to another (M/s Premier fireworks defunct) - Department has not produced any document to establish unaccounted purchase of raw material, use of extra labour, receipt of unaccounted sale proceeds - HELD THAT:- From the excerpts of SCN, it can be gathered that the case of the department is that the partnership firm founded by the father with his two sons continue even after his death. Though both sons are independently manufacturing and selling fireworks, as the original Vadivel Fireworks remain and continue, their independent clearances should be considered as manufacture and clearance from a single factory i.e; the original Vadivel Fireworks. This allegation is totally erroneous as original Vadivel Fireworks cannot remain and continue to exist after the death of a partner (Shri Vadivel) unless there is evidence to show that other partners have agreed to constitute and continue the new partnership. No such evidence is forth coming. Even by the case of department both sons have shared 10 sheds each and are doing manufacture and selling of fireworks separately. The clearances of each manufacturer is eligible for SSI exemption. These aspects have not been examined at all. By clubbing the clearances of both premises (20 sheds) the demand of duty has been raised, which in our view cannot sustain. The department has mainly relied on 711 invoices seized from the premises. In the impugned order the Commissioner (Appeals) has not rendered any finding as to how these 711 invoices are admissible and acceptable in evidence. Further, if such large quantities of fireworks are alleged to be manufactured and sold, there should be proper evidences for purchase of raw materials. The impugned order does not reason this out - The confirmation of duty on the basis of these 711 invoices therefore cannot sustain. Use of brand name Parrot which belongs to M/s. Premier Fireworks which was run by Shri. Vadivel as sole proprietorship - HELD THAT:- After his death this firm has become defunct. So it cannot be said that the brand name Parrot belongs to M/s. Premier Fireworks. This allegation also to deny the SSI exemption cannot sustain. The confiscation of goods, demand of duty and penalties imposed cannot sustain. However, it requires to be stated that the original authority vide Order-in-Original dated 13.03.2002 has confirmed duty demand of Rs.5,828.00 and equal penalty. The appellant has not filed any appeal against this order - As the appellant has not filed any appeal against this order, it has attained finality. The impugned order is set aside and the Order-in-Original dated 13.03.2002 and 26.03.2002 are restored - The appeals are partly allowed.
-
2024 (8) TMI 990
CENVAT Credit - common input services used in the manufacture of dutiable as well as final products which were exempted (exported) - rebate of duty on export of goods - HELD THAT:- On perusal of the impugned order, we find that the issue stands covered by the decision in the case of the appellant's sister concern, M/S. SRI VELAYUTHASWAMY SPINNING MILLS (P) LTD., (UNIT-II) VERSUS THE COMMISSIONER OF G.S.T. CENTRAL EXCISE [ 2019 (6) TMI 362 - CESTAT CHENNAI ]. The Tribunal after discussing the issue in detail has held that the demand alleging that the appellant has to pay amount after including the value of export clearances also was set aside. The demand cannot sustain. The impugned order set aside - Appeal allowed.
-
CST, VAT & Sales Tax
-
2024 (8) TMI 989
Concessional rate of duty at 2% for goods described in Section 8 (3) of CST Act - Eligibility of the petitioner to issue declarations in C-Forms for inter-State purchase of natural gas post-GST implementation - Trade Circular No. 37T of 2017 dated 24 August, 2017 - HELD THAT:- The issue which has fell for consideration in the present proceedings would stand squarely covered by the said decisions of the High Courts and the decision of the Supreme Court in The Ramco Cements Ltd. [ 2021 (3) TMI 1184 - SUPREME COURT] where it was held that 'Considering the consistent view of nine High Courts, including dismissal of special leave petitions by different Bench of this Court, and being satisfied about the exposition on the matters in issue by the High Court of Madras vide impugned judgment and order being a possible view, we decline to interfere in these special leave petitions.' Thus, the petitioner would be entitled for issuance of C Form in respect of natural gas purchased by the petitioner from the oil company in Gujarat and used in their manufacturing activities as also in generation of electricity at captive power plant. The petition is allowed.
|
9911796707
