Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 16, 2024
Case Laws in this Newsletter:
GST
Income Tax
Benami Property
Customs
Corporate Laws
Insolvency & Bankruptcy
FEMA
PMLA
Service Tax
Central Excise
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
-
GST Exemption Upheld: Petitioners' Claim of Nil GST under Disputed HSN Code Stands Until 22.07.2023.
Challenge to show cause notice u/s 74 of Central/Gujarat Goods and Services Tax Act, 2017 regarding classification of product manufactured by petitioner under HSN 19059040 instead of HSN 19059030 and consequent levy of GST. Court held that in view of minutes of GST Council meeting and circular dated 1st August, 2023, issue was to be regularized on 'as is where is' basis up to 22.07.2023, meaning petitioners' claim of exemption under HSN 19059040 and payment of nil GST to continue as filed. Respondents misinterpreted 'as is' basis by issuing impugned notices levying 18% GST under HSN 19059030, ignoring binding advance ruling. When petitioners claimed exemption under HSN 19059040 and paid nil GST, same was required to be regularized 'as is' as per GST Council and Board's notification coupled with binding advance ruling. Impugned show cause notices quashed, respondents directed to regularize past returns filed by petitioners on 'as is' basis accepting nil rate of GST up to 22.07.2023. Petition allowed.
-
Goods Detention Quashed for UP GST E-way Bill Absence Despite Central E-way Bill Availability.
Seizure order for detention of goods due to absence of State E-way Bill was challenged. The Court held that at the time of interception, the Central E-way Bill under GST Act was available, and only the E-way Bill under UP GST Act was not present, which was later produced before passing the penalty order. The issue was covered by previous Division Bench judgments, which held that from 1.2.2018 to 31.3.2018, the requirement of E-way Bill under UP GST Act was not enforceable. Since the goods were detained and seized on 23.3.2018 solely for the absence of the E-way Bill under UP GST Act, and the Central E-way Bill was accompanying the goods, the detention order, seizure order, and penalty were unjustified. Consequently, the impugned orders dated 24.3.2018 and 1.10.2020 were quashed by the High Court, and the petition was allowed.
-
Taxpayer denied natural justice; GST reconciliation errors reconsidered after proof of payment.
The court held that the petitioner was denied the principles of natural justice by not being given a reasonable opportunity to contest the tax demand on merits regarding the difference between GSTR 3B and GSTR 1, and the RCM liability mismatch. The petitioner provided proof of payment for the GSTR 3B and GSTR 1 difference, and substantiated the RCM liability mismatch as an inadvertent error through GSTR 3B returns, securing the revenue interest. The impugned order relating to RCM liability mismatch was set aside, and the matter was remanded for reconsideration by the respondent authority. The petitioner was directed to submit a reply to the show cause notice within 15 days. The petition was disposed of.
-
Unfair tax demand due to lack of proper communication; order set aside for reconsideration after partial payment.
Principles of natural justice violated due to lack of proper communication regarding show cause notice and order, leading to tax demand confirmation without petitioner's response. Court set aside the order and remanded matter for reconsideration, subject to petitioner remitting 10% of disputed tax demand within two weeks, acknowledging procedural lapse despite imposing condition. Petition disposed through remand for fresh consideration after partial compliance.
-
Tax demand adjournment rejected despite valid reasons; opportunity granted on part-payment.
Principles of natural justice violated due to lack of reasonable opportunity to contest tax demand. Petitioner cited ongoing tax audit and father's illness for seeking adjournment, but failed to submit substantive reply from September 2023 to February 2024 despite sufficient time. Considering health records submitted, petitioner granted opportunity to contest demand by remitting 10% of disputed tax within three weeks. Matter remanded for reconsideration after compliance.
Income Tax
-
Bank denied deduction for bad debts & profit on investment sale; Remanded to verify depreciation on current assets.
The key points covered in the summary are: Disallowance of deduction u/s 36(1)(vii) for debts written off, as the assessee did not create a provision in the books, which is a mandatory requirement. The matter was remanded back to the Assessing Officer to examine afresh the assessee's claim for deduction u/s 36(1)(vii) for bad debts actually written off after providing an opportunity. Regarding addition towards profit on sale of investments, the matter was set aside to the Assessing Officer to decide afresh after providing an opportunity to the assessee to produce documentary evidence. On the issue of depreciation claimed on investments shown as current assets, it was held that no depreciation is allowable on investments treated as current assets. The contention that investments are non-SLR and shown as current assets was remanded to the Assessing Officer to verify, in light of CBDT Circular No. 665, whether investments fall under stock-in-trade to be valued at lower of cost or market rate as per accounting principles.
-
Tribunal can't be directed for uniform TDS deduction in motor accident claims; case-specific approach needed.
The High Court declined to issue general directions to all Motor Accident Claims Tribunals in Gujarat regarding the uniform procedure for deduction of TDS in MACP compensation cases. The petitioner had deducted TDS and obtained a certificate from the Income Tax Department, but the Court's previous decision held that such deduction may be contrary to law. However, the Court observed that at the relevant time when the petitioner deducted TDS u/s 194A(3) of the Income Tax Act, the Court's decision was not available. While the Tribunals are bound by the Court's decision, the Court cannot issue blanket directions as each case's facts differ. The petitioner has the liberty to challenge individual orders contrary to the Court's decision. The petition was disposed of accordingly.
-
Tax notice validity: JAO can't issue 148 notice under faceless regime, FAO has jurisdiction.
The High Court held that the Jurisdictional Assessing Officer (JAO) is not permitted to issue a notice u/s 148 of the Income Tax Act, as it would violate the provisions of Section 151A, which mandates faceless assessment. The Court relied on recent decisions in Nainraj Enterprises Pvt. Ltd. and Hexaware Technology Ltd., where it was established that the faceless assessment regime u/s 151A excludes the JAO's jurisdiction to issue notices u/s 148. The Court clarified that there is no concurrent jurisdiction between the JAO and the Faceless Assessment Officer (FAO) for issuing notices u/s 148 or passing assessment/reassessment orders. When specific jurisdiction is assigned to either the JAO or the FAO under the Faceless Assessment Scheme, it is to the exclusion of the other. Accepting the Revenue's argument would lead to chaos and render the faceless proceedings redundant. The Court held that when an authority acts contrary to law, the act is required to be quashed as invalid, and the assessee need not establish prejudice, as the unlawful act itself causes prejudice. All assessees are entitled to be assessed as per law, and when the Income Tax Authority proposes action without following due process, it results in prejudice to the assessee. The Court decided in favor of the assessee.
-
Insurance co's income u/s 44 excludes pre-2011 investment sale profits; Apollo Tyres irrelevant for regular insurance biz computation.
Insurance company computing income u/s 44 is not required to include profits from sale of investments for periods prior to 01.04.2011 as per Rule 5, aligning with decisions in United Insurance Company and Oriental Insurance Co. Ltd. Apollo Tyres Ltd. judgment on MAT computation is irrelevant as present case involves regular computation u/s 44 specific to insurance business. Profits from sale of investments must be included post 01.04.2011 due to amended Rule 5(b). High Court ruled in favor of assessee.
-
Depreciation claims upheld, Tribunal's reasoning accepted for retail and land divisions.
The High Court held that the order u/s 263 made no reference to the issue of depreciation, and the Tribunal had correctly answered the question by stating that the assessee's claim for depreciation was correct for more than one reason. The Tribunal found that the re-allocation of depreciation concerning the land and retail divisions was merely based on the Assessing Authority's opinion, which was not convincing. The Tribunal also opined that there was no practical purpose in making a distinction between the claim of depreciation for the retail business and land division business. The High Court observed that the Tribunal's findings and conclusions on identical facts and circumstances for the same assessment year had been accepted by the respondent, and thus, no substantial question of law arose. Although the respondent did not have the benefit of the Tribunal's order dated 21.07.2006 at the time of initiating action u/s 263, the Tribunal did consider it while passing the impugned order in 2007. The High Court considered the subsequent developments and the Tribunal's order, attaching finality to it. Consequently, the substantial questions of law were answered in favor of the assessee. Additionally, the High Court pointed out that the impugned order was dated 25.07.2008, and as per Section 153(3), a consequential order of assessment should have been passed within twelve months from the end of the financial.
-
Comparability key in transfer pricing; size alone can't reject internal comps if transactions normal.
Transfer pricing adjustment concerning comparability selection and attribution of profits between the respondent assessee and foreign Associated Enterprise. TPO rejected internal comparables due to size of transactions with AEs. ITAT held size alone cannot be grounds for rejecting comparables, unless transactions are contrived or abnormal. Internal TNMM comparing AE and non-AE profitability justified. ALP adjustment deleted. Identification of comparables key to transfer pricing analysis. Choice of method depends on availability of comparables and comparability adjustments. As comparability increases, potential inaccuracies decrease. Consistent with Sony Ericsson case. Attribution of profits between assessee and AE - appeals dismissed following principle of consistency.
-
Govt. subsidies for new industries treated as capital receipts, not taxable income.
Capital subsidy received by assessee for setting up new industry, by way of refund of sales tax/excise duty, is a capital receipt not includible in book profits for MAT computation u/s 115JB. Once subsidy is reduced from written down value (WDV) of assets for depreciation purposes, it cannot be treated as income u/s 2(24)(xviii) from A.Y. 2016-17 onwards. Capital receipts are excluded from book profits even if credited in profit and loss account. Allowing subsidy for depreciation but disallowing for MAT would lead to double taxation. Consistent treatment should be given for regular income and MAT purposes.
-
Disallowance of donation deduction u/s 35(1)(ii) due to business loss, unapproved trust, and forged certificate.
The assessee claimed weighted deduction u/s 35(1)(ii) for donation made to M/s Shri Arvindo Institute of Applied Scientific Research Trust at the end of the year. The Assessing Officer disallowed the deduction, stating that the assessee had business loss and did not carry out any business after selling the factory land. The Tribunal held that the computation of income chargeable under the head "Capital Gain" is governed by Section 48, allowing deductions for expenditure incurred in connection with transfer of capital asset, cost of acquisition, and cost of improvement. Section 48 does not provide for deduction u/s 35(1)(ii). Allowing such deduction would be against the provisions of the Act. The CBDT clarified that the trust was not approved u/s 35(1)(ii) after 31.03.2006 and had raised substantial donations on a "forged certificate." Therefore, the donation made by the assessee to the trust is ineligible for deduction u/s 35(1)(ii). The assessee's appeal was dismissed.
-
Professional agriculturist's income exempted despite lack of books; genuine agri-income based on consistent declaration.
Income derived from agricultural activities is exempt u/s 10(1) of the Act. The assessee, a professional agricultural graduate, consistently declared agricultural income over multiple years. Despite not maintaining books as per Section 44AA, the assessee provided bills for sale of agricultural produce, even to related parties. As an agriculturist, the assessee is not mandated to maintain books u/s 44A. The agricultural expenses were met from seedlings sales, and the income declaration appears genuine based on the regularity and consistency observed. Considering these factors, the disallowance of agricultural income by the Assessing Officer is unwarranted, and the assessee's grounds are allowed by the Appellate Tribunal.
-
Unexplained cash credits & interest added to income; Accommodation entries rejected.
Unsecured loans treated as unexplained cash credits u/s 68. Interest paid on such unexplained loans also added to income. Assessee's contention of repayment of loans rejected, as loans were mere accommodation entries to introduce unaccounted money. Addition of interest on unexplained loans upheld. Tribunal confirmed additions made by Assessing Officer u/s 68 for unexplained cash credits and interest thereon.
-
Charitable society's cash credits from non-resident donor upheld despite doubts on credibility.
Charitable society received cash credits from a non-resident individual, offered as taxable income. AO doubted credibility of donor based on his wife's statement about monthly expenses. ITAT held donor's non-taxability in separate assessment u/ss 153C and 144 lends credence to transaction. Society's charitable nature, public utility works undisputed. Mere suspicion based on donor's association insufficient to treat him as conduit. Wife's unawareness about donations renders reliance on her statement unjustified. Lack of corroborative evidence from Gupta brothers' search precludes treating donor as conduit. Affidavit possessed by assessee supports donation. Revenue's grounds rejected, decided in assessee's favor.
-
Cosmetic approval by tax officer renders assessment order unenforceable.
Assessment u/s 153A - addition u/s 68 - Validity of approval u/s 153D questioned - Held that the approval granted by Joint Commissioner of Income Tax (JCIT), Central Circle, Noida u/s 153D for framing assessment order was contrary to provisions. In the assessee's case, the JCIT granted approval without considering factual and legal positions, appraisal report, or incriminating material collected during search. The JCIT merely granted approval as a statutory compulsion without application of mind, rendering the approval a mere ritual or formality. Consequently, the assessment order for the assessment year 2014-15, pursuant to the hollow and cosmetic approval u/s 153D, was held unenforceable in law and quashed, decided in favor of the assessee.
-
Jewelry inheritance: Long-term gains treated as short-term, wife's 50% exemption disallowed incorrectly.
Key issues: 1) The treatment of long-term capital gain on inherited/gifted jewelry as short-term capital gain, where the assessee's claim of the jewelry being 30-40 years old was accepted based on valuation report, wife's statement, and jeweler's statement, allowing benefit u/s 54. 2) The disallowance of exemption u/s 54 for 50% share of the wife in the new house property was incorrect, as the entire investment was made by the assessee, and the full value was reflected in Form 26AS. 3) Based on the above findings, the assessee's appeal was allowed by the Appellate Tribunal.
-
Non-resident's UAE salary exempt from tax after proving employment & income details.
Addition of exempt salary income earned in the UAE by a non-resident assessee during the relevant assessment year. The assessee had stayed in India for only 20 days and was employed in the UAE, earning salary from Al Kayed Workshop. The assessee provided a salary certificate from the employer, along with eligible emoluments for the period from 01.04.2016 to 31.07.2017 (A.Y 2017-18), which was accepted by the CIT(A). The assessee also submitted a general ledger account maintained by the company, showing amounts credited as eligible salary and withdrawn for personal use/investments. The ITAT held that the assessee had proved the amount was earned from the company outside India, supported by proof of employment in the UAE, salary certificate, and ledger account. No interference was required with the CIT(A)'s decision, and the Revenue's appeal was dismissed.
-
Rental Income from Equipment in India: Tax Implications Explored.
Income from equipment rental sourced in India u/s 5(2) read with Section 9 of the Income Tax Act and Article 12 of India-Malaysia DTAA. DRP erred in ignoring exceptions under clause (iva) to explanation 2 to Section 9(1)(vi) while concluding receipts as royalty u/s 9(1)(vi) read with Section 115A. DRP also erred in holding Section 44BB applicable only if non-resident has PE in India, contrary to the provision's essence. Receipts offered to tax u/s 44BB upheld as per statutory provision. AO directed to compute income u/s 44BB for the assessment years. Assessee's appeal allowed.
Customs
-
Authorities detain platinum alloy shipment without recorded reasons doubting Certificate of Origin or non-compliance, violating natural justice.
Impugned orders detaining consignment of platinum alloy sheets lacked recorded reasons for doubting Certificate of Origin or non-compliance with statutory requirements, violating principles of natural justice. Validity of action must be tested on recorded reasons, a core jurisprudential doctrine safeguarding against arbitrary exercise of power. Respondents merely asserted investigation concluded, advising assessment under bond and bank guarantee without considering relevant factors for verification, doubting certificate, or invoking provisions. Online real-time verification process available, brushing aside certificates would undermine trade agreement. Bank guarantee demand under guidelines requires proper officer finding need for provisional assessment, chemical test, or further information, none of which were spelt out. Respondents directed to expeditiously reconsider release, bearing observations in mind. Petition allowed.
-
License revoked for customs broker due to non-compliance; delay in inquiry.
Customs broker's license revoked for non-compliance with Regulations 13(d), 13(e), and 13(f) of CHALR, 2004. Delay in inquiry proceedings. Broker held license since 1983. Prohibited from operating at Chennai Customs Port due to mis-declarations in shipping bills. License suspended pending inquiry. Suspension revoked on April 30, 2012, by Commissioner of Customs (General), Mumbai, citing ongoing investigation. CESTAT ruled suspension revocation violated its December 15, 2011 order directing license restoration if inquiry not concluded within three months. High Court agreed with CESTAT's specific direction binding on Department unless set aside by superior forum. Appeal dismissed.
-
Aluminum formwork structure and accessories classified under Customs Tariff Heading 7610 90 10 for scaffolding/shuttering.
Classification of imported aluminum formwork structure with accessories under the appropriate customs tariff heading. The key points are: The goods should be classified under Customs Tariff Heading 7610 90 10 as aluminum structures similar to equipment for scaffolding, shuttering, propping or pit-propping, rather than under Heading 8480 60 00. The Revenue failed to challenge the self-assessment by the appellant under the Bills-of-Entry before issuing the demand notice. The adjudicating and appellate authorities exceeded the scope of the Show Cause Notice by denying the benefit of the Notification without specifying the conditions not fulfilled, depriving the appellant of an opportunity to defend their case. Consequently, the impugned order is set aside, and the appeal is allowed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
-
Long delay of 8 years in adjudicating show cause notice quashed due to statutory time limit violation.
The court adjudicated a show cause notice (SCN) after a delay of almost 8 years. The primary ground raised was that the respondents failed to adjudicate the SCN for nearly 8 years, warranting the impugned SCN to be set aside. The court held that the decision in Coventry Estates Pvt. Ltd. v. Joint Commissioner CGST and Central Excise & Anr. analyzed this issue in-depth and ruled that such delay in adjudicating SCNs should be quashed. The decision relied upon by the respondents in Collector of Central Excise, New Delhi v. Bhagsons Paint Industry (India) was distinguishable on facts. Section 28(9) expressly bars passing an order after the prescribed time limit of 6 months/1 year, subject to specified conditions. Consequently, the court allowed the petition.
-
Imported goods wrongly deemed hazardous waste, redemption fine & penalty overturned due to lack of proper analysis.
The case pertains to the confiscation of imported goods and the imposition of a redemption fine and penalty for alleged illegal import. The appellants contended that the goods were meant for reprocessing and recycling purposes, governed by the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016. The key issue was whether the impugned items fell under A4070 of Schedule III Part-A, requiring prior permission. The Central Pollution Control Board's report did not explicitly state that the goods were hazardous waste but suggested compliance with specific rules and analysis requirements. However, no such analysis was conducted by the authorities or presented by the importer. The report presumed the goods fell under A4070 without proper analysis. The denial of cross-examination violated natural justice principles. The fact that identical goods were imported at different ports without issues and no samples were drawn added credence to the appellant's submission. The conclusion that the goods were hazardous waste was based solely on warning words on the container, which is insufficient. Warnings like "dangerous" or "hazardous" do not automatically classify goods as hazardous waste under the Rules. The non-permitting of cross-examination further undermined the report's reliability. Consequently, the impugned order was set aside, and the appeal was allowed by the Appellate Tribunal (CESTAT).
FEMA
-
Over-invoicing book imports and illegal forex remittances lead to FERA penalty.
Appellant was found guilty of contravening Sections 8(3) read with 8(4) and Sections 8(3) read with 8(4) read with Section 64 of FERA for over-invoicing imported books and unauthorised foreign exchange remittances through proprietorship firms. Although not the mastermind, Appellant had knowledge of the fraudulent scheme and allowed the main accused to use proprietorship names for imports. Based on recorded statements and available records, Appellate Tribunal established Appellant's involvement in the contravention. The penalty was reduced to Rs. 2 Lakhs, which was already pre-deposited. The blocked amount of Rs. 60,859.52 in Appellant's firm's account was directed to be released along with interest.
-
Detainee's right violated: Detention quashed over lack of evidence & delayed decision on plea.
Detention order quashed due to non-supply of crucial documents relied upon by detaining authority, violating detenu's right to make effective representation under Article 22(5). Statements of a key witness not provided, affecting detenu's defense. Non-receipt and inordinate delay in deciding detenu's representation by authorities also violated Article 22(5). Prison authorities' casual approach in transmitting representation deprecated. Authorities must ensure prompt transmission and expeditious decision on representations concerning personal liberty. Detention order unsustainable on these grounds.
Corporate Law
-
Companies miss out on extended benefits of Fresh Start Scheme due to strict eligibility criteria, High Court dismisses appeal.
The High Court dismissed the petition seeking extension of the 'Companies Fresh Start Scheme, 2020' (CFSS 2020) by a notification dated 15th January 2021. The court held that exemption notifications granting benefits must be strictly construed, depending on the facts of each case. If a party is found eligible under the conditions prescribed, the notification is to be construed liberally; otherwise, it is to be construed strictly. The CFSS 2020 granted exemption from additional fees and immunity from prosecution for delay in filings, applicable only to companies not in the excepted category under clause 6(ix)(a), effective from 1st April 2020 to 30th September 2020. The scheme envisaged entitlement for companies whose restoration orders were passed between 1st December 2020 and 31st December 2020. Since the appellant's restoration order was not passed within this period, the appellant was ineligible for the extended CFSS 2020 benefits, even if 'NCLT' was replaced with 'Delhi High Court'. Consequently, the court found no reason to interfere with the impugned judgment and dismissed the appeal.
-
Procedural rights of enterprises in abuse of dominance cases: Timely challenges and change in status.
This case deals with the issue of belated challenge to orders and the change of status from 'participant' to 'opposite party' in proceedings related to abuse of dominant position. The key points are: The court held there was no delay in filing the writ petitions as one of the impugned orders was provided to the petitioner only recently. The petitioner was initially treated as a 'third party' participant, but its status was later changed to an 'opposite party' without prior notice. The court observed that an entity is entitled to know its status and the applicable legal provisions, as the consequences and available protections vary based on the status. u/s 27 of the Act, serious consequences like discontinuation of agreements and penalties up to 10% of average turnover can be imposed on enterprises found guilty of abuse of dominant position. The court noted that despite being made an 'opposite party', the petitioner was not provided with the Director General's investigation report as required u/s 26(4) for 'parties' concerned. The court held that the petitioner should have been given prior notice before being impleaded as a party, and the authority's satisfaction for such impleadment should have been recorded through a speaking order. The petition was ultimately dismissed.
Benami Property
-
Benami property transaction scrutinized: Provisional attachment order questioned for pre-2016 purchase.
The case pertains to a provisional attachment order issued u/s 24(4) of the Prohibition of Benami Property Transactions Act, 1988, involving a benami transaction. The key points are: The property was purchased before the 2016 amendment, but the benamidar held it even after the amendment. The amending Act's definition of "benami transaction" was not considered by the Adjudicating Authority. The company in whose name the property was purchased lacked the financial capacity to pay the consideration of Rs. 1 crore. Another company, whose ITR reflected the property's address, was found to be holding the property in the name of the first company. Despite not contesting the factual issues, the Appellate Tribunal found reasons to interfere with the impugned order, likely due to the applicability of the amended Act's provisions and the evidence suggesting a benami transaction.
-
Benami transaction - Currency's true owner contested, courts upheld evidence trail.
Benami transaction case involving beneficial ownership of currency seized. Appellant argued lack of evidence to prove beneficial ownership. Court held initial statement under Income Tax Act corroborated by Bikky Kumar Singh, quoted in impugned order, showing appellant's involvement. Appellant disowned currency but filing appeal indicates interest. Court found material on record considered by Adjudicating Authority, rejecting first argument. Delay in recording subsequent statement under Benami Act not an issue in absence of statutory period mandate. On adjudication timeline, court clarified reference received in April 2018, notice issued same month, order passed within one year from month-end of reference receipt as required u/s 26(7). Notice copy given to beneficial owner as per Section 24(2) requirement, appellant admitting receipt. Competent Authority approval for continuing provisional attachment as required u/s 24(4)(a)(i) found on record. All arguments rejected, appeal dismissed.
-
Property transfers for illegal purposes cannot claim fiduciary exception, rules Supreme Court.
Interpretation of "fiduciary capacity" in the context of benami transactions. It clarifies that fiduciary capacity cannot be used as an exception in all circumstances, particularly when property is transferred for illegal purposes or when a concluded contract passes title to others. The fiduciary exception applies only in cases where money is kept with another person on trust for safe custody, and not where there is a conflict of interest or profit motive. The Adjudicating Authority's analysis of witness statements and the Income Tax assessment supporting the respondent's position are also mentioned. The key legal principles regarding benami transactions and the scope of the fiduciary capacity exception are elucidated.
-
Benami Chit Funds Crackdown - Undisclosed Income Exposed Through Sworn Statement.
Benami transaction - Attachment of funds towards chit funds in appellants' name and another maturity value. Reliance on sworn statement u/s 132(4) of Income Tax Act permissible even in proceedings under 1988 Act, not just for prosecution. Revenue proceedings differ from criminal proceedings, no necessity to follow CrPC or Evidence Act. Initiating Officer considered issues raised before Adjudicating Authority. Appellant's argument of chit funds from disclosed sources rejected, admission of operation at instance of third party. Appellant failed to prove income from poultry or agriculture, VEO certificate based on information, not revenue records. Benami transaction rightly held. Appellant's income above taxable limit, no ITR filed. Each aspect considered by Adjudicating Authority, lame excuses rejected. No error found, appeals dismissed.
Indian Laws
-
Arbitration prioritized over jurisdiction objections; Tribunal to adjudicate complex claims first.
The court observed that as per the recent Supreme Court decision in SBI General Insurance Co. Ltd. versus Krish Spinning, the arbitral tribunal is the preferred first authority to determine questions of arbitrability and jurisdiction, and courts at the referral stage should not delve into contested issues involving complex facts. The respondents raised objections but did not deny the existence of the arbitration agreement invoked by the petitioner, satisfying the requirement of prima facie existence u/s 11 of the Arbitration & Conciliation Act, 1996. Once constituted, the tribunal can consider respondents' objections before adjudicating petitioner's claims. Justice Mohit S. Shah, former Chief Justice of Bombay High Court, was appointed as the sole arbitrator, with fees and modalities to be fixed in consultation with parties. The petition was allowed.
PMLA
-
Cattle smuggling proceeds laundering case: Woman granted bail despite anti-money laundering law.
Allegations against applicant involve laundering Rs. 12 crore proceeds of crime from cattle smuggling by her father, who received bribes from BSF personnel. Though not accused in predicate offence, prima facie evidence shows applicant owns firms used for laundering. Despite stringent PMLA provisions, right to liberty under Article 21 must be upheld. Proviso to Section 45(1) PMLA entitles women special treatment for bail. Following recent Supreme Court precedents, considering voluminous chargesheet, applicant's status as woman, and potential lengthy trial, regular bail granted on Rs. 10 lakh personal bond and surety, subject to conditions.
-
Court grants bail to accused in money laundering case despite evidence; observes low flight risk & tampering likelihood.
The court granted regular bail to the accused in a money laundering case involving conspiracy and proceeds of crime. While acknowledging ample evidence linking the accused to money laundering, the court observed that the twin test of guilt and likelihood of committing an offense was weak. Considering the accused's clean antecedents, lack of previous involvement, and the documentary nature of evidence, the court concluded that the accused was not a flight risk or likely to tamper with evidence or influence witnesses. The court directed the accused's release on bail upon furnishing a bond of Rs.10,00,000 with two sureties of the same amount, subject to conditions imposed by the trial court. The bail application was allowed.
-
Money laundering law tribunal's constitution upheld; 'reasons to believe' disclosure at initial stage not required.
This appeal challenges the constitution of the Adjudicating Authority under the Prevention of Money Laundering Act (PMLA), 2002, alleging violation of principles of natural justice. The court held that the new law governing tribunals, including the Appellate Tribunal under PMLA, has been enacted based on Supreme Court observations. While the Adjudicating Authority is required to pass reasoned orders, it operates under tight time-frames and cannot be expected to address every issue raised through miscellaneous applications. The appellant's contention that a Judicial Member must be present was rejected, as no such ratio was laid down in the cited cases. The court also clarified that the 'reasons to believe' recorded u/s 17 for search and seizure need not be provided at the initial stage, as it is an administrative process, and parties are given an opportunity for hearing before confirmation by the Adjudicating Authority. Consequently, all appeals were dismissed.
Service Tax
-
Fire safety service provider wrongly taxed as manpower supply agency; wins appeal.
The appeal pertained to the classification of services provided by the appellant as Manpower Recruitment or Supply Agency Service. The appellant was engaged by M/s. Chambal Fertilizers and Chemicals Limited under an annual contract to assist in firefighting, handle emergencies arising due to fire incidents, and maintain fire safety equipment in working condition. The appellant received a monthly payment of Rs. 1,63,000/- and was responsible for making statutory payments like PF and ESI for its employees. The Tribunal held that the appellant's activity did not fall under the category of Manpower Recruitment or Supply Agency Service as the contract was specifically for firefighting, emergency handling, and equipment maintenance, and not for providing manpower. Consequently, the impugned order was set aside, and the appeal was allowed.
-
Rental payments to directors in personal capacity exempt from service tax under RCM.
The case pertains to the levy of service tax under the reverse charge mechanism (RCM) on rental payments made by a company to its directors for renting immovable property. The key points are: 1) The service of renting immovable property provided by the directors was in their individual capacity, not as directors of the company. 2) Imposing service tax liability under RCM on the company for services rendered by directors in their individual capacity would lead to unwarranted liability. 3) Following the Cords Cable Industries Ltd. case, the Tribunal held that the company cannot be saddled with service tax liability under RCM when the service of renting immovable property was provided by directors in their personal capacity, not as directors. 4) Regarding the penalty u/s 78, the Tribunal upheld the imposition of a 25% penalty for wrongly availing CENVAT credit on exempted services, as the appellant had reversed the credit only after an audit. 5) The appellant is liable to pay the balance interest u/s 75 for delayed payment of service tax. 6) The impugned order was partially set aside, allowing the appeal partially.
-
Tour operator rightly classified, abatement availed on voucher sales; extended period wrongly invoked.
Appellant engaged in multi-level sales promotion activities, selling vouchers for gifts, holidays and airline tickets to corporate clients. Classified services under 'Tour Operator' and availed abatement, but demand raised under 'Business Auxiliary Service'. Held appellant directly provided services to customers without corporate intervention, rightly classified under 'Tour Operator' and availed abatement. Extended period invoked solely based on audit without evidence of intent to evade tax, appellant filing returns declaring abatement, hence not sustainable. No demand sustainable, so no interest or penalty payable. Impugned order set aside by Appellate Tribunal.
-
Service tax on repairs: Excluding material value on which VAT paid.
Recovery of service tax u/s 73(2) of Finance Act, 1994 and section 174 of CGST Act, 2017 with interest and penalty was challenged. The issue pertained to classification of repair and maintenance activity involving supply of materials as works contract service and exclusion of value on which VAT was paid to determine taxable value of services. The Tribunal held that when invoices separately show value of goods and service charges, service tax is chargeable only on service/labor charges, and value of goods used for repair is not includable in assessable value. The Commissioner erred in including value of spare parts in assessable value as it was a composite contract involving supply of goods and services. Service tax was not leviable on composite contracts till 01.07.2012, and the period involved was from April 2009 to June 2012. Consequently, the impugned order was set aside, and the appeal was allowed.
-
Tax refund dispute: Interest accrues after 3 months from application filing, not deposit date.
The appellant is entitled to interest on the refunded amount after the dispute was resolved in their favor by the Tribunal's order. However, the interest calculation is governed by Section 11BB, which states that interest accrues after three months from the date of receipt of the refund application, not from the deposit date. Even if Section 35FF applies, the interest cannot be paid from the deposit date due to the proviso. The refund application was allowed within a month, so the appellant is not entitled to any interest u/ss 11BB or 35FF of the Central Excise Act, 1944. The appeal is dismissed.
Central Excise
-
Exported Buses Rebate Claim: Court Upholds Rebate Despite Non-Filing of Declaration.
The High Court held that the petitioner's failure to file the declaration and Form ARE-2 should not result in rejection of the rebate claim, as the buses were undisputedly exported and foreign exchange was received. The petitioner demonstrated a correlation between the chassis numbers, purchase invoices, and export invoices. The input-output ratio procedure was deemed inconsequential since the rebate claim pertained solely to the excise duty paid on the chassis used in manufacturing the exported buses. The respondents were entitled to verify compliance with export conditions and foreign exchange receipt. Significantly, each chassis could manufacture only one bus. Consequently, the orders rejecting the rebate claim were quashed, and the respondent was directed to consider the rebate application on merits, disregarding the non-filing of the declaration and input-output ratio.
-
Tariff classification dispute: Bleaching clay termed 'raw clay' attracts NIL duty.
The adjudicating authority classified the goods 'Bleach-9' manufactured by the assessee under chapter sub-heading 25.05, claiming NIL rate of duty, based on technical opinions stating it is raw clay/washed clay and not Activated Clay/Earth. The opinions mentioned that clay washed with water and dried is not termed 'Activated Clay,' and its properties remain the same as natural clay. The department did not adduce any evidence contradicting these findings, which formed the basis for classifying 'Bleach-9' under Tariff heading 25.05. As no fresh evidence was provided to challenge the orders, the Appellate Tribunal dismissed the department's appeal, upholding the classification under 25.05.
Case Laws:
-
GST
-
2024 (9) TMI 759
Challenge to SCN u/s 74 of the Central/Gujarat Goods and Services Tax Act, 2017 as being wholly without jurisdiction - classification of the product manufactured by the petitioner under HSN 19059040 instead of HSN 19059030 - Levy of GST - HELD THAT:- In view of the minutes of the meeting of GST Council and circular dated 1st August, 2023, question arises at to what rate the GST is payable by the petitioners upto 22.07.2023 as both the GST Council as well as the Board were of the opinion to regularise the issue for the past period on as is where is basis meaning thereby whatever situation was prevailing with regard to the status of payment of GST by the petitioners shall continue to prevail upto 22.07.2023 and the petitioners have claimed their product to be exempt from GST, therefore, the petitioners cannot be subjected to levy of GST in order to regularise their returns which have been filed at Nil rate of GST. It appears that the respondents have misinterpreted the words as is basis by issuing the impugned notices to levy GST at 18% on applicability of Tariff Item No. 19059030 ignoring the binding decision of Gujarat Appellate Authority for Advance Ruling under section 103 of the GST Act. When the petitioners have claimed exemption under the Tariff Item no. 19059040 by claiming exemption to pay GST on the product manufactured by them, the same is required to be regularised on as is basis as per the minutes of the meeting of GST Council as well as the notification issued by the Board on 1st August, 2023 coupled with binding ruling of appellate authority of advance ruling. The impugned notice dated 7.02.2024 issued under section 74 of the GST Act are hereby quashed and set aside. The respondents are directed to regularise the past returns filed by the petitioners on as is basis accepting the same as it is filed at Nil rate upto 22.07.2023. Petition allowed.
-
2024 (9) TMI 758
Application for cancellation of GST registration - HELD THAT:- It is well settled that cancellation of the taxpayer s registration does not absolve the taxpayer from being held accountable for any statutory violations prior to the date of the cancellation. It is also clarified that in certain cases, the proper officer may proceed to pass orders under Section 29 of the CGST Act and DGST Act for cancellation of the taxpayer s GST registration with retrospective effect, if there are reasons do so. It is considered apposite to direct the respondent to consider the application of the petitioner seeking cancellation of its GST registration bearing in mind that the cancellation ought not to be withheld on account of any assessment proceedings or any proceedings for recovery of any statutory dues from the taxpayers. It is so directed. Petition disposed off.
-
2024 (9) TMI 757
Violation of principles of natural justice - petitioner had not received the impugned SCN and, therefore, he had no opportunity to respond to the same - order passed by the Adjudicating Authority u/s 73 of the CGST Act, 2017 / the SGST Act, 2017 - HELD THAT:- The respondent is granted another opportunity to reply to the impugned SCN within a period of two weeks from date. The Adjudicating Authority shall consider the same and pass such order, as it deems fit, after affording the petitioner an opportunity to be heard. The impugned order is set aside - petition allowed.
-
2024 (9) TMI 756
Rejection of petitioner's application for cancellation of GST registration - application rejected on the ground that the petitioner has availed Input Tax Credit (ITC) from certain suppliers that were found to be non-existent - HELD THAT:- It is apparent from the above that the petitioner s request for seeking cancellation of its GST registration was withheld on account of certain proceedings initiated for the assessment of the petitioner s liability. It is well settled that cancellation of the taxpayer s registration does not absolve the taxpayer from being held accountable for any statutory violations prior to the date of the cancellation. It is also apposite to clarify that in certain cases, the proper officer may proceed to pass orders under Section 29 of the CGST Act and DGST Act for cancellation of the GST registration with retrospective effect, if there are reasons do so, notwithstanding that the taxpayer has requested for cancellation of its GST registration with effect from another date. The learned counsel for the respondent rightly points out that in cases where the tax prayer has been found to be non-existent, the said action may be warranted. It is considered apposite to direct the respondent to consider the petitioner s application seeking cancellation of its GST registration bearing in mind that the cancellation ought not to be withheld on account of any assessment proceedings or any proceedings for recovery of any statutory dues from the taxpayers. It is so directed. Petition disposed off.
-
2024 (9) TMI 755
Seizure order - detention of goods on the ground that State E-way Bill was not present at the time of interception and on the said ground seizure order was passed - HELD THAT:- It is not a case of the respondent authority that at the time of interception of the goods in question, the Central E-way bill under the GST Act was not available. Only E-way Bill 01 under UP GST Act was not available with the goods in question however before passing of the penalty order, the same was produced. The issue in hand is not res integra. The issue in hand is squarely covers with the judgements of Division Bench of this Court in the cases of M/s Godrej and Boyce Manufacturing Co. Ltd. [ 2018 (9) TMI 1261 - ALLAHABAD HIGH COURT] and M/s Varun Beverages Limited [ 2021 (10) TMI 429 - ALLAHABAD HIGH COURT] . Further during period from 1.2.2018 to 31.3.2018, the requirement of E-way Bill under UP GST Act read with the Rules framed thereunder was not enforceable. The goods in question was detained and seized on 23.3.2018 on the ground that E-way Bill 01- 02 under UP GST Act was not accompanying with the goods. It is not the case of the respondent authorities that Central E-way Bill was not accompanying with the goods in question. Once the said fact is not disputed by the respondent authorities, neither the detention order nor the seizure order nor penalty was justified . The impugned orders dated 24.3.2018 and 1.10.2020 cannot be sustained in the eyes of law and same are hereby quashed - Petition allowed.
-
2024 (9) TMI 754
Issuance of SCN and impugned order against the petitioner's wife, who is a dead person - seeking to grant an opportunity to the petitioner, who is the only legal heir of the deceased, to present his case before the respondent - HELD THAT:- In the present case, it appears that the impugned order dated 07.02.2024 was passed by the respondent against a dead person, who was passed away on 21.11.2019. In such case, the impugned order is liable to be set aside. Further, since the petitioner is the only legal heir of the deceased, it is just and necessary to provide an opportunity to the petitioner to establish his case on merits. In such view of the matter, this Court is inclined to set aside the impugned order dated 07.02.2024 passed by the respondent. The impugned order dated 07.02.2024 is set aside and the matter is remanded to the respondent for fresh consideration on condition that the petitioner shall pay 10% of disputed tax amount to the respondent within a period of four weeks from today (02.09.2024) 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 (9) TMI 753
Violation of principles of natural justice - petitioner was unaware of these proceedings because the intimation and show cause notice were uploaded on the GST portal but not communicated to the petitioner through any other mode - confirmation of tax liability - HELD THAT:- On perusal of the show cause notice, it appears that the petitioner was called upon to show cause with regard to the proposed tax liability of Rs.33,270/-. When this is compared with the notice in Form ASMT-10 and the impugned order, in these documents, the discrepancy /confirmed tax liability was specified as Rs.1,84,835/- - Since the tax proposal was confirmed without the petitioner being heard and by taking note of the discrepancy, it is just and appropriate that the petitioner be provided an opportunity, albeit by putting the petitioner on terms. The impugned order dated 10.10.2023 is set aside and the matter is remanded to the respondent for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand of Rs.1,84,835/- within two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.
-
2024 (9) TMI 752
Delay in filing the revocation application - compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due, the 3B Return Form filed by the Petitioner - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. Petition disposed off.
-
2024 (9) TMI 751
Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - difference between the petitioner's GSTR 3B and GSTR 1 - RCM liability mismatch - HELD THAT:- The petitioner has placed on record proof of payment of tax dues relating to the difference between the petitioner's GSTR 3B and GSTR 1. As regards the RCM liability mismatch, the petitioner has placed on record the relevant GSTR 3B returns to substantiate the contention that the tax proposal was the result of an inadvertent error. Since the tax dues appear to have been recovered, revenue interest has been secured at this juncture. The impugned order dated 17.11.2023 is set aside insofar as it relates to RCM liability mismatch and the matter is remanded for reconsideration by the first respondent. The petitioner is directed to submit a reply to the show cause notice within fifteen days from the date of receipt of a copy of this order. Petition disposed off.
-
2024 (9) TMI 750
Delay in filing the revocation application - compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due, the 3B Return Form filed by the Petitioner - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. Petition disposed off.
-
2024 (9) TMI 749
Violation of principles of natural justice - petitioner was unaware of proceedings culminating in the impugned order because the show cause notice and order were uploaded on the GST portal but not communicated to the petitioner through any other mode - petitioner agrees to remit 10% of the disputed tax demand as a condition for remand - HELD THAT:- Upon examining the impugned order, it is evident that the tax proposal was confirmed because the petitioner did not reply to the show cause notice. In these circumstances, albeit by putting the petitioner on terms, the matter requires reconsideration. The impugned order dated 01.11.2023 is set aside and the matter is remanded to the respondent for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.
-
2024 (9) TMI 748
Violation of principles of natural justice - challenge to assessment order - petitioner did not have a reasonable opportunity to contest the tax demand - HELD THAT:- By reply dated 27.11.2023, the petitioner cited the on going tax audit as the reason for requesting for an adjournment. In the subsequent letter dated 01.02.2024, the ill health of the petitioner's father was cited. As contended by learned Government Advocate, the petitioner had sufficient time between September 2023 to February 2024 to submit a reply on merits. The petitioner failed to do so. At the same time, it should be noticed that the petitioner has submitted the health records of his father while seeking further time in February 2024. In these facts and circumstances, the petitioner should be provided an opportunity to contest the tax demand on merits, albeit by putting the petitioner on terms. The matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand within three weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.
-
Income Tax
-
2024 (9) TMI 747
Search warrant u/s 132 - Retention of cash seized in search - as decided by HC [ 2021 (1) TMI 24 - TELANGANA HIGH COURT] very seizure and retention of the cash amount of ₹ 5.00 crore by the respondents from 27.08.2019 till date is illegal and unsustainable - as submitted that even prior to the issuance of the interim order passed by this Court, the petitioner department had complied with the directions issued by the High Court and therefore, nothing survives for consideration of this Court. Petitioner submitted that the proceedings u/s 132 and subsequent assessments have been made. HELD THAT:- We find that the special leave petitions have been rendered infructuous. Hence, the special leave petitions are dismissed as infructuous. It is needless to observe that if any proceeding has been initiated by the petitioner department under the provisions of the aforesaid Act, the same may be concluded in accordance with law.
-
2024 (9) TMI 746
Revision u/s 263 by CIT - Deduction u/s 35D - assessee had wrongly claimed the deduction as it was not an industrial undertaking within the meaning of such expression as envisaged u/s 35D - As petitioner submitted that having regard to the subsequent developments in the case, the special leave petition may have been rendered infructuous - As decided by HC [ 2021 (10) TMI 1209 - KARNATAKA HIGH COURT] claim which has been granted by the AO could not be disallowed subsequently, without disturbing the decision in the initial year. Post action of the AO in modifying the original order would not cure the flaw pointed out in Shasun Chemicals and Drugs Ltd. [ 2016 (9) TMI 1199 - SUPREME COURT] this issue in favour of the assessee and against the Revenue. HELD THAT:- This is because, in the order passed u/s 154 of the Income Tax Act (rectification order) which is against the Revenue for the year 2008-09, no challenge has been made to the relied upon judgment. Recording the same, the special leave petition stands disposed as infructuous.
-
2024 (9) TMI 745
Revision u/s 263 - allowability of the expenditure and carry forward of the losses - ITAT quashed the order of CIT - As decided by HC [ 2021 (2) TMI 232 - BOMBAY HIGH COURT] taking into consideration the reasoning of the CIT, we feel that the ITAT was not justified in interfering with the CIT's order, since, the twin conditions prescribed u/s 263 were fulfilled. Besides, the CIT, by the impugned order, had quite fairly, granted the assessee an opportunity of being heard whilst directing the AO to verify the claim of the assessee in respect of the allowability of the expenditure and carry forward of the loss in accordance with law HELD THAT:- Despite opportunity afforded, as is evident from the office report dated 29.05.2024, the counsel for the petitioner has not taken steps for removing the defects. The delay in filing the spare copies shall be deemed to be condoned, if the steps are taken within a period of two weeks. Indulgently, as prayed for, needful to be done within a period of two weeks, failing which, the petition shall automatically stand dismissed for non-prosecution, without any further reference to the Court.
-
2024 (9) TMI 744
Reopening of the concluded assessment - reassessment u/s 148 despite a prior assessment order under Section 147 - validity of passing of an order under Section 148-A (d) - HELD THAT:- The right of the respondent to reopen the concluded assessment on the basis of the decision of the Supreme Court in Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT] was the question which fell for our consideration in Anindita Sengupta [ 2024 (4) TMI 96 - DELHI HIGH COURT] held that Ashish Agarwal neither intended nor mandated concluded assessments being reopened. The respondent clearly appears to have erred in proceedings along lines contrary to the above as would be evident from the reasons which follow. Firstly, Ashish Agarwal was principally concerned with judgments rendered by various High Courts striking down Section 148 notices holding that the respondents had erred in proceeding on the basis of the unamended family of provisions relating to reassessment. They had essentially held that it was the procedure constructed in terms of the amendments introduced by Finance Act, 2021 which would apply. None of those judgements were primarily concerned with concluded assessments. As would be manifest from the aforesaid extract, the emphasis clearly was on the notices which formed the subject matter of challenge before various High Courts and the aim of the Supreme Court being to salvage the process of reassessment. This is further evident from the Supreme Court observing that the AO would thereafter proceed to pass orders referable to Section 148A (d). We consequently find ourselves unable to construe Ashish Agarwal as an edict which required completed assessments to be invalidated and reopened. Ashish Agarwal cannot possibly be read as mandating the hands of the clock being rewound and reversing final decisions which may have come to be rendered in the interregnum. Admittedly, in this case, assessment proceedings had already concluded on 26.03.2022 and the reassessment action was reinitiated on the same set of reasons vide Show Cause Notice dated 31.05.2022 under Section 148-A (b), leading to the passing of an order under Section 148-A (d) and issuance of notice under Section 148 of the Act, both dated 20.07.2022 - Thus we find ourselves unable to sustain the impugned action of reassessment. Decided in favour of assessee.
-
2024 (9) TMI 743
Faceless assessment of income escaping assessment - validity of notice issued by the JAO as not in accordance w/sec 151A - not permissible for the Jurisdictional Assessing Officer to issue a notice u/s 148, as the same would amount to breach of the provisions of section 151A - HELD THAT:- As decided in case recent decision of this Court in Nainraj Enterprises Pvt. Ltd. [ 2024 (7) TMI 511 - BOMBAY HIGH COURT ] relying on Hexaware Technology Ltd. [ 2024 (5) TMI 302 - BOMBAY HIGH COURT ] provisions of Section 151A of the IT Act had clearly brought a regime of faceless assessment. The Court held that it was not permissible for the Jurisdictional Assessing Officer to issue a notice under Section 148, as the same would amount to breach of the provisions of section 151A of the IT Act. There is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice under Section 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdiction of both FAO or the JAO with respect to the issuance of notice under Section 148. When an authority acts contrary to law, the said act of the Authority is required to be quashed and set aside as invalid and bad in law and the person seeking to quash such an action is not required to establish prejudice from the said Act. An act which is done by an authority contrary to the provisions of the statue, itself causes prejudice to assessee. All assessees are entitled to be assessed as per law and by following the procedure prescribed by law. Therefore, when the Income Tax Authority proposes to take action against an assessee without following the due process of law, the said action itself results in a prejudice to assessee. Decided in favour of assessee.
-
2024 (9) TMI 742
Faceless assessment of income escaping assessment - validity of notice issued by the JAO as not in accordance w/sec 151A - not permissible for the Jurisdictional Assessing Officer to issue a notice under Section 148, as the same would amount to breach of the provisions of section 151A - HELD THAT:- As decided in recent case recent decision of this Court in Nainraj Enterprises Pvt. Ltd. [ 2024 (7) TMI 511 - BOMBAY HIGH COURT ] relying on Hexaware Technology Ltd. [ 2024 (5) TMI 302 - BOMBAY HIGH COURT ] provisions of Section 151A of the IT Act had clearly brought a regime of faceless assessment. The Court held that it was not permissible for the Jurisdictional Assessing Officer to issue a notice under Section 148, as the same would amount to breach of the provisions of section 151A of the IT Act. There is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice under Section 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdiction of both FAO or the JAO with respect to the issuance of notice under Section 148. When an authority acts contrary to law, the said act of the Authority is required to be quashed and set aside as invalid and bad in law and the person seeking to quash such an action is not required to establish prejudice from the said Act. An act which is done by an authority contrary to the provisions of the statue, itself causes prejudice to assessee. All assessees are entitled to be assessed as per law and by following the procedure prescribed by law. Therefore, when the Income Tax Authority proposes to take action against an assessee without following the due process of law, the said action itself results in a prejudice to assessee. Decided in favour of assessee.
-
2024 (9) TMI 741
Exclusion of profits from sale of investments - assessee is an Insurance Company that computes its income in line with the prescription of Section 44 - HELD THAT:- There is no justification in bringing to tax profits from sale of investments so long as they stand deleted for the periods 1998 to 2011. Admittedly, the position for assessments post 01.04.2011 is different. With the introduction of clause (b) to Rule 5 there is a requirement in law to include profits/loss from sale of investments. This Court in the assessee's own case in several tax cases appeals relating to A.Ys 2006-2007 to 2009-2010 has noted the applicability of the earlier decision in the case of United Insurance Company [ 2019 (7) TMI 387 - MADRAS HIGH COURT ] deciding the issue in favour of the petitioner. With this, we find no necessity whatsoever to remand the matter as the facts in issue as well as the applicability of law to those facts is very clear as borne out from the statutory position, and the decisions in United India Insurance Company [ 2019 (7) TMI 387 - MADRAS HIGH COURT ] and Oriental Insurance Co. Ltd. [ 2017 (9) TMI 172 - DELHI HIGH COURT ] As regards the reference to the judgment in Apollo Tyres Ltd. [ 2002 (5) TMI 5 - SUPREME COURT ] would have no relevance to the present case as it was delivered in the context of the computation of income under Minimum Alternate Tax (MAT) for which the basis is the profit and loss account, as confirmed by the shareholders in the Annual General Body Meeting of that company. In the present case, the situation is entirely different and distinguishable as the assessments are under regular computation, and are premised upon the application of Section 44 which is specific to Insurance business, read with Rule 5 of the First Schedule. Decided in favour of assessee.
-
2024 (9) TMI 740
Revision u/s 263 - as per CIT order makes no reference to the issue of depreciation - HELD THAT:- The very question considered to be an error by the respondent has been answered at paragraph 5 to state that the Appellant s claim of depreciation is correct, for more than one reason. Firstly, the Tribunal finds that the re-allocation of depreciation qua the land and retail divisions is merely on the opinion expressed by the Assessing Authority that a particular business of the assessee does not require 'that much business premises' . This is only an incidental finding which has not impressed the Tribunal, and quite rightly so. That apart, they have also opined that there is no practical purpose to be served in making a distinction between the claim of depreciation qua retail business and land division business. The findings and conclusions of the Tribunal on identical facts and circumstances as for the present AY have been accepted by the respondent and as such, no question of law much less a substantial question of law arises in these circumstances. It is true that the respondent did not have the benefit of the order of the Tribunal dated 21.07.2006 at the time when the suo moto action u/s 263 was proposed. However, the Tribunal did, in 2007, while passing the impugned order. A perusal of the order of the Tribunal reveals that the 2006 order was not brought to its notice and thus the Tribunal did not have the benefit of the reasoning under that order. While deciding the matter today, we cannot close our eyes to subsequent developments and the order of the Tribunal and the finality attached to it, thus assume great relevance. The substantial questions of law, are, in light of the discussion above, answered in favour of the assessee/Appellant and adverse to the respondents. Incidentally, we may also point out that the impugned order in this case is dated 25.07.2008. The provisions of Section 153(3) of the Act require a consequential order of assessment to be passed within a period of twelve (12) months from the end of the financial year when the order u/s 263 was received by the Chief Commissioner. Assessee appeal allowed.
-
2024 (9) TMI 739
TP Adjustment - Comparability selection - attribution of profits between the respondent assessee and the foreign Associated Enterprise [ AE ] - TPO appears to have been influenced by the sheer size of the transaction set which was undertaken between the respondent assessee and its foreign AE, thus taken the view that internal comparables would not be acceptable - HELD THAT:- ITAT held if the size of the uncontrolled transaction is too small, it may provoke an inquiry by the TPO to ensure that it is not a contrived transaction outside the normal course of business or with regard to other significant factors surrounding smallness of such transaction. However, in our considered view, in none of these cases, a comparable can be rejected on the basis of its size per se. In this view of the matter, the authorities below were clearly in error in rejecting the internal comparable, i.e. profitability of assessee's transactions with Non AEs, on the ground that the volume of business with non AEs was too small vis-a-vis business with AEs. As also bearing in mind entirety of the case, the assessee was quite justified in adopting internal TNMM and comparing the profit earned on its transactions with AEs with profit earned with Non AEs. Accordingly, the ALP adjustment deserves to be deleted. We find no justification to interfere with the view as expressed. As decided in Sony Ericsson Mobile Communications India P. Ltd [ 2015 (3) TMI 580 - DELHI HIGH COURT] identification of the potential comparables is the key to the transfer pricing analysis. As a sequitur, it follows that the choice of the most appropriate method would be dependent upon the availability of potential comparable keeping in mind the comparability analysis including befitting adjustments which may be required. As the degree of the comparability increases, extent of potential differences which would render the analysis inaccurate necessarily decreases. Attribution of profits between the assessee and foreign Associated Enterprise (AE) - Following the principle of consistency, we find no justification to entertain these appeals on the issue of attribution. They consequently fail and shall stand dismissed.
-
2024 (9) TMI 738
Validity of order u/s 119(2)(b) passed without giving opportunity of hearing to the petitioner - HELD THAT:- The fact remains that opportunity of hearing was not granted to the petitioner while passing the impugned order u/s 119(2)(b) of the Act. Under such circumstances, without entering into the merits of the matter, only on the ground of breach of principle of natural justice, the impugned order is quashed and set a side and the matter is remanded back to the respondent authority to pass a fresh de novo order in accordance with law after giving opportunity of hearing to the petitioner within a reasonable time.
-
2024 (9) TMI 737
Uniform procedure for deduction of TDS in MACP compensation cases by Motor Accident Claims Tribunals in Gujarat - as submitted that the petitioner deducted the TDS and has placed on record TDS Certificate obtained from the Income Tax Department to show that petitioner has already paid the amount and, therefore, it is for the claimants to get the refund of the TDS deducted by the petitioner which may be contrary to decision of this Court - HELD THAT:- At the relevant point of time when the petitioner deducted the TDS as per Section 194A(3) of the Income Tax Act, the decision of this Court was not available. As considered the submissions of learned advocate Mr.Rathin Raval and also perused various orders passed by the Tribunals. It goes without saying that the decision of this Court is binding upon the sub- ordinate Courts and it is for the Tribunal to consider the same, however, we cannot issue general directions to all the Tribunals and the petitioner has to challenge individual case where direction is contrary to the decision of this Court as fact of each case would be different. We do not entertain this petition with a liberty to petitioner to challenge the individual orders in accordance with law. This petition is accordingly disposed of.
-
2024 (9) TMI 736
Disallowance of interest - appellant company had borrowed interest bearing loan funds and advanced interest free funds to its sister concern - HELD THAT:-The Hon'ble Supreme Court in the case of CIT vs. Reliance Industries Ltd. [ 2019 (1) TMI 757 - SUPREME COURT] has held that when the interest-free funds available to the assessee were sufficient to make investment, it could be presumed that the investments were made from the interest-free funds available with the assessee and therefore, interest referable to the funds given to the subsidiaries is allowable as deduction u/s 36(1)(iii) of the Act. We find that, following the above decision and various other decisions, case of South Indian Bank Ltd[ 2021 (9) TMI 566 - SUPREME COURT] has held that if investments in tax-free securities are made out of common funds and the assessee has available, non-interest-bearing funds larger than the investments made in tax-free securities, in such cases, disallowance of interest u/s 14A of the Act cannot be made. Since, admittedly the assessee in the instant case is having sufficient own capital and free reserves surpluses which far exceeds the amount of interest free advance given to the sister concern, therefore, we are of the considered opinion that no disallowance of interest u/s 36(1)(iii) of the Act is called for. Assessee appeal allowed.
-
2024 (9) TMI 735
Nature of receipt - receipt of Sales Tax Subsidy - MAT computation - AO not reducing the same in computation of income under the MAT provisions considering it is a capital receipt - HELD THAT:- When such subsidy has been reduced from the written down value, it is no longer an income u/s 2(24)(xviii) of the Act in the lines as enunciated and is a capital receipt. See Century Plyboards Pvt. Ltd [ 2020 (12) TMI 55 - ITAT KOLKATA] as held when subsidies received by the assessee for setting up new Industries, by way of refund of VAT and excise duty are liable to be excluded from the computation of book profit u/s 115JB We direct that the capital subsidy should be reduced for computation of book profit. Particularly in view of the excruciating fact that reduction of subsidy from written down value was accepted by the Assessing Officer and he did not tinker with the amount of depreciation claimed. Conclusion: i) The company is justified in raising additional claim of reduction of subsidy from computation of book profit though not claimed at the time of filing return of income; ii) Upon verification of income tax return, it is clear that the amount of subsidy has been reduced from WDV for the purpose of computation of depreciation and as per Income Tax Act; iii) Once the subsidy has been reduced to compute the actual cost of machineries building, it can no longer be considered as income, even u/s 2(24)(xviii) w.e.f. A.Y. 2016 17; iv) Once it is not income, the same cannot be part of book profit, though it is shown in Profit Loss Account, because capital receipt cannot be brought under the ambit of taxation even under the provisions of Minimum Alternate Tax. Entries in the books of account are not relevant; v) The Department is not permitted to take diametric opposite stand once while computing depreciation and again while computing book profit on the same issue; vi) Reduction from written down value leads to abatement of depreciation which in turn leads to higher taxable income. Again taxing the subsidy will lead to indirect double taxation which cannot be countenanced; vii) Distinct lines of reasoning should be eschewed while computing total income under normal provisions and book profit u/s 115JB.
-
2024 (9) TMI 734
Deduction claimed u/s 35(1)(ii) - assessee has made donation at the fag-end of the year to M/s Shri Arvindo Institute of Applied Scientific Research Trust and claimed weighted deduction - AO disallowed the deduction by stating that there was business loss and assessee had not carried out any business after selling the factory land/ - HELD THAT:- The mode of computation of income chargeable under head Capital gain is as per provisions of Section 48 of the Act. The following deductions can be allowed from the capital gains: (i) expenditure incurred wholly and exclusively in connection with transfer of a capital asset and (ii) cost of acquisition of asset and cost of any improvement thereto. Some other instances covered under clause-(iii) need not be discussed here because the same is not relevant to the fact of the instant case. Hence, only expenditure in connection with transfer of the capital asset and cost of acquisition and improvement can be allowed in respect of the capital gain earned by the assessee. The assessee has already claimed such permissible deduction from the sale consideration of Rs. 10,92,98,692/- and has earned net capital gain of Rs. 10,75,67,234/-. He has also claimed deduction of Rs. 50,00,000/- u/s 54EC, which has been allowed to it. There is no provisions u/s 48 to allow deduction u/s 35(1)(ii) of the Act. Hence, allowing such deduction would be against the provisions of the Act. If due to clear operation of the provisions of the Act, any hardship is caused to the assessee, the same can be redressed only by the Legislature and not by any appellate authority. In view of the above discussion, the AO and CIT(A) have rightly disallowed the deduction claimed u/s 35(1)(ii) of the Act. Be that as it may, the CBDT in F.No.225/351/2018-ITA(II) dated 14.12.2018 has clarified that M/s Shri Arvindo Institute of Applied Scientific Research Trust was earlier approved u/s 35(1)(ii) which expired on 31.03.2006. Thereafter, this entity being not recognized for the purpose of Section 35(1)(ii) is not eligible to raise donation for undertaking scientific research. Trust has raised substantial donation over the last six years on the basis of a forged certificate while the doners have claimed weighted deduction u/s 35(1)(ii) of the Act on donation made to the trust. This makes it clear that the Trust was not approved u/s 35(1)(ii) of the Act after 31.03.2006. Hence, the donation made by the appellant to the said Trust is not eligible for deduction u/s 35(1)(ii) of the Act. Appeal filed by the assessee is dismissed.
-
2024 (9) TMI 733
LTCG - Disallowance of claim of exemption of capital gains u/s 54F - assessee has not given any submissions in support of its claim before the AO, and has failed to participate in the appellate proceedings also - whether the issue be restored back to the file of the Revenue authorities below for giving the assessee another opportunity to prove its claim of exemption u/s 54F to be decided in accordance with the directions of the ITAT in the first round? - HELD THAT:-Undeniably, the assessee has not given any submissions in support of its claim before the AO, and has failed to participate in the appellate proceedings also. It is clear, therefore, that the assessee has been lax in pursuing its matter before the Revenue authorities. No plausible reasons for the same have been adduced before us. In the light of the same, though the assessee ideally should not be given any further opportunity, but in the interest of justice considering that even the ITAT noted the assessee to be in possession of certain facts/ documents to prove construction activity being carried out by it on the land purchased and the direction of the ITAT being that the assessee be allowed exemption even if construction is incomplete, we consider it fit to restore the matter back to the AO, giving the assessee one more opportunity to prove its claim of exemption under section 54F. AO is directed to examine the issue afresh in accordance with the directions of the ITAT in the first round. The assessee is directed to cooperated in the proceedings failing which the AO is at liberty to reiterate his order passed earlier. Matter is restored back subject to levy of cost of Rs. 1000/- on the assessee for giving no plausible reason for not attending the assessment as well as appellate proceedings. Appeal of the assessee is allowed for statistical purpose.
-
2024 (9) TMI 732
Disallowance of agricultural income - assessee has not claimed any expenditure in the return of income - HELD THAT:- Considering the regularity and consistency of declared income over the years and subsequent assessment years, the income declared by the assessee seems to be in order and also assessee is a professionally graduated in agricultural science. As observed that the AO observed that assessee has not maintained any books of account as per section 44AA of the Act. In our view, assessee s income falls under section 10(1) of the Act and as per section 44A of the Act, as per the provisions of the Act, who are supposed to maintain books of account, does not include agriculturist. Therefore, assessee s case does not fall u/s 44AA - assessee has submitted copy of bills of sale of agricultural produce to various persons, even though to the related parties Considering the agricultural income declared by the assessee over the years, the claim of the assessee is genuine and assessee has submitted that the agricultural expenses were met out of sale of seedlings to farmers is acceptable. If at all required, assessee would have grossed up the sales by including the seedlings sales and claimed the agricultural expenditure. Therefore, no reason to suspect the income declared by the assessee. Accordingly, the grounds raised by the assessee are allowed.
-
2024 (9) TMI 731
Disallowance u/s 40(a)(ia) - assessee submitted that the expenditure is in nature of direct cost not covered by the provisions of Section 40(a)(ia) - HELD THAT:- As correctly submitted by Assessee payment towards expenditure incurred is also made to a person who is assessable to tax and as relied upon the judgement of Ansal Land Mark Township (P) Ltd .[ 2015 (9) TMI 79 - DELHI HIGH COURT] that the second proviso to section 40(a)(ia) of the Act is declaratory and curative in nature and should be given retrospective effect from 01.04.2005. Thus, we delete the addition on account of disallowance u/s. 40(a)(ia) of the Act. Disallowance of Travelling expenses payment to Music Party and service charges and Production expenses - AO has disallowed 20% of the travelling expenses - HELD THAT:- We find that 20% disallowance is arbitrary. As per the Indian Stamps Act, 1899, a receipt has been defined in Section 2 (23) and is made chargeable in accordance with Article 53 Schedule 1 of the Act. According to Article 53 Schedule 1 of the Indian Stamps Act, 1899, a receipt for any money, the amount of which exceeds Rs. 5000/ is chargeable with stamp duty of Rs. 1/ and as per Section 11 of the Act and Rule 16 of Indian Stamp Rules, 1925, such a receipt is to be stamped with a adhesive stamp. In this case CIT(A) has not pointed out which receipts are above Rs. 5,000/-. Similarly, without inquiry CIT(A) cannot say the receipts are self-made. Hence, we delete the addition on account of travelling expenses. Disallowance under Sub-contract payment - HELD THAT:- We find that this issue is not properly verified by the both authorities below hence, we remand back this issue to ld.AO to verify TDS and evidence and if found true the ld. Ld. Assessing Officer will allow the same. Disallowance u/s 40(a)(ia) - HELD THAT:- Appellant stated that he has produced necessary evidences to confirm the TDS were deducted and paid before the due dates for filing return of income alongwith written submissions on 27.11.2012. In the light of aforestated submissions we remand back this issue to ld.AO to verify TDS and whether paid before due date and if found true by the AO, he will allow the same. Credit of TDS and Interest u/s 234B are consequential in nature and direct the AO to recomputed the income a fresh after considering credit of TDS and Interest u/s 243B as per law.
-
2024 (9) TMI 730
Unsecured loans taken - unexplained u/s 68 - addition of interest paid on such unsecured loans - HELD THAT:- On perusal of the aforementioned statement showed that in the list of companies given the accommodation entries names of Duke Business Pvt. Ltd, Casper Enterprises Pvt. Ltd and Ryan International are mentioned which means that as per the order of the coordinate bench it has been established that these companies were providing accommodation entries through unsecured loans claimed to have been borrowed from these companies by the assessee during the year under consideration as unexplained and rightly added u/s 68. We have no hesitation in confirming the addition made u/s 68 for the captioned Assessment years. The contention that the loans have been re-paid during the year under consideration therefore the set off of the same should also be given to the assessee does not hold any water as it has been established that the impugned loans were nothing but accommodation entries and the repayment is also nothing but return of accommodation entries therefore, the money which has been brought in the garb of unsecured loan is nothing but the unaccounted money of the assessee and the repayment of the same does not make any sense. Addition of interest paid on such loans - Since the loan amount has been treated as unaccounted money of the assessee for payment of interest of such loan amount claimed as unexplained and added by the AO is also confirmed. Decided against assessee.
-
2024 (9) TMI 729
Unexplained cash credits u/s 68 - sum found credited in the books of the assessee and the assessee does not offer satisfactory explanation, such sum credited may be charged to tax - manner in which the money was credited in the account of Mr. Grover and then reached the assessee - as argued receipt of money from Late Sanjay Grover has been offered for taxation as taxable income. Reliance on Statement of the wife of Mr. Grover to submit that her statement establishes that Mr. Grover had no creditworthiness or reasons to make loan or donations - HELD THAT:- CIT(A) has taken into cognizance the fact that Sh. Sanjay Grover as an individual and non-resident was assessed to tax by the same AO completing assessment u/s. 153C and 144 of the Act and no addition was made in his assessment. This, to our mind is of great assistance to the assessee as where the credibility of source is doubted and the assessment of source is on the reported income then it is not justified to doubt the source and specially when the matter pertains to a charitable and religious society whose funds are to be used for public utility only. We are of the considered view that the assessee being a charitable and registered society is not disputed by the AO. The AO has also not disputed the nature of work of public utility of the assessee including construction and maintenance of cremation ground and the construction of temple by the society for public welfare. It appears that the AO was driven more by suspicion out of Mr. Grover s association with Gupta brothers. AO himself observes that the wife of Mr. Sanjay Grover was not aware of the donations in that case reliance on her statement was not justified. It is unjust to draw any inference about the credibility of a donor only on the basis of his monthly expenses or the money remitted to family. AO had alleged Sh. Sanjay Grover was conduit on merely on the basis of statement of the wife about monthly expenses or income as reported. We are of considered view that the deceased cannot be said to be conduit in the absence of any corroborative evidence surfacing during the search from the premises of the family of Gupta Brothers or their institutions. The affidavit in the possession with the assessee was in due course as beneficiary of the donation. We find no reason to differ from CIT(A) and we find no substance in the grounds raised by the Revenue - Decided in favour of assessee.
-
2024 (9) TMI 728
Assessment u/s 153A - addition u/s 68 - Validity of approval under section 153D - as argued approval granted for framing assessment order is contrary to provision - HELD THAT:- We observed that the approval granted by JCIT, Central Circle, Noida in which the approval granted u/s 153D of the Act was granted to the eighteen assessees including the case of the assessee. In the case of M.G. Metolloy Pvt. Ltd [ 2023 (10) TMI 686 - ITAT DELHI] assessee s own case, which was also granted approval by the same letter wherein held manifestly, the JCIT, without any consideration of factual and legal position in proposed additions/disallowances and without contents of appraisal report before him or incriminating material collected in search etc. has buckled under statutory compulsion and proceeded to grant a simplicitor approval with caveats and disclaimers. This approach of the JCIT has ipso facto rendered the impugned approval to be a mere ritual or an empty formality to meet the statutory requirement and can not thus be countenanced in law. We are unhesitatingly disposed to hold that the assessment order for AY 2014-15 in question, in pursuance of a hollow cosmetic approval accorded u/s 153D and undeniably without application of mind, is rendered unenforceable in law and hence quashed. Decided in favour of assessee.
-
2024 (9) TMI 727
LTCG u/s STCG - benefit u/s 54 - treatment of long-term capital gain on Jewellery as short-term capital gain - HELD THAT:- Considering the fact that the jewellery is claimed to be more 30 to 40 years old which were inherited/gifted by the Assessee s relatives on various customary occasions and also considering the amount of the jewellery and the family structure and status of the assessee, it is quite reasonable as per the culture and customs of an Indian family to have the grammage of jewellery inherited by the assessee. Revenue Authorities should have considered the Valuation Report submitted by the Assessee and should have also been considered the statement of wife of the Assessee and the jeweler of the Assessee and ought to have considered as LTCG and even the benefit u/s 54 - Following the Judgment of Satya Narain Patni [ 2014 (5) TMI 1002 - RAJASTHAN HIGH COURT] and considering the above facts and circumstances, we delete the disallowance/addition accordingly we allow Ground No. 2 of the assessee. Disallowance of exemption u/s 54 being 50% share of the wife in the new house property - HELD THAT:- The entire investment has been made by the Assessee and the entire TDS has been deducted by the Assessee which was duly deposited to the Government and the full value of the purchase price was reflected in the Form No. 26AS of the Assessee for the year under consideration, by following the above ratio laid down by the Jurisdictional High Court and the Coordinate Bench of the Tribunal, we find merit in Ground No. 3 of the Assessee, accordingly, we allow the Ground of the Assessee by deleting the addition made by the A.O., wherein by disallowed the exemption u/s 54 of the Act. Appeal filed by the Assessee is allowed.
-
2024 (9) TMI 726
Computation of income at 8% of the purchase value of broiler chickens - NP determination - AR filed charts and case law compilations on consistency and a paper book pertaining to lower proceedings - HELD THAT:- We find substance in the submissions of the assessee that a reasonable estimate may be taken seeing the past and subsequent years profits of the assessee. It is true that doctrine of res judicata does not aply to income tax proceedings but rule of consistency should be maintained for the finality of the controversy, otherwise it will lead to nowhere. We, therefore following rule of consistency, direct AO to take profit of Rs. 0.50 per kg for assessment year 2011-12 and Rs. 0.75 per kg for assessment year 2014-2015 as both assessment years are prior to assessment year 2015-2016. Therefore, the ld. Assessing Officer will re-compute the income keeping in mind the consequential relief, if any as prayed in the grounds of appeal. Penalty proceedings u/s 271(1)(c) - furnishing inaccurate particulars of income - In our considered opinion, additions which are mere estimated additions do not attract penalty u/s. 271(1)(c) of the Act and it is not a fit case of levy of penalty. The decision of Sri Saibaba Guest House[ 2021 (8) TMI 1421 - ITAT CHENNAI] wherein the penalty on similar factual matrix, has been cancelled. Accordingly, we delete the impugned penalty.
-
2024 (9) TMI 725
Addition of exempt salary income - salary income earned in UAE - assessee s stay in UAE during the relevant assessment year, his employment and salary drawn - Addition under the head salary income of the assessee stating the corresponding credit in his bank account was not established for having received the salary outside India - assessee was Non-resident and was employed in UAE during the relevant assessment year under consideration - HELD THAT:- We note that the assessee was a Non- Resident employed at UAE and earned salary income from AL Kayed Workshop. During the relevant assessment year, the assessee had stayed in India only for 20 days. The assessee has earned salary at UAE and in support of that salary certificate issued by the employer along with the eligible emoluments of salary for the period from 01.04.2016 to 31.07.2017 (A.Y 2017-18) was furnished before the Ld. CIT(A), which has been accepted by the Ld. CIT(A). The assessee had submitted general ledger account of assessee maintained by the company wherein the amounts credited as eligible salary on regular basis along with amounts withdrawn from time to time for his personal use/investments. The assessee has proved that the amount has been earned from the company at outside India which has been supported by the proof of employment at UAE, salary certificate, ledger account of salary drawn duly certified by the company - no interference needed for the decision made by the Ld. CIT(A) and hence, we dismiss the appeal of the Revenue.
-
2024 (9) TMI 724
Addition of the amounts standing in the names of sundry creditors - creditors have not confirmed the balances standing in the name of the appellant independently - HELD THAT:- We note that the confirmations were available with the AO. If he had any doubt regarding balances shown, he could have again verified with the creditors. He has not doubted the closing balances, he has merely observed that the confirmations do not contain PAN of the creditors and therefore genuineness of these creditors remains unverified. The names and address of creditors were available with the CIT(A), therefore he could have verified from the books of account of the creditors by taking appropriate steps. The statute has provided ample powers to the authorities but both the authorities did not do so. As interesting to note that the for the AY 2014-15 for the following AY the order was passed by the AO W-1 on 26.02.2016 after the passing of the order the impugned AY and there is no any whisper or remarks on the opening balance of the creditors. Therefore, we delete the addition. Decided in favour of assessee.
-
2024 (9) TMI 723
Denial of relief u/s 90 for foreign tax credit - Form No. 67 for claiming Foreign Tax Credit has not been filed within the time allowed u/s 139(1) - directory OR mandatory provision - HELD THAT:- We are of the opinion that it will be sufficient compliance on the part of the assessee if the said Form No. 67 claiming the benefit of FTC is filed before the completion of assessment proceedings and the said Form No. 67 should be before the AO for his consideration at the time of processing or assessment u/s 143(1). In the instant case, since the Form No. 67 has been filed by the assessee alongwith return u/s 139(8A) on the same date which is updated return in ITR 3 U, the AO was not justified in ignoring the Form No. 67 which was also on record before him at the time of assessment proceedings. As such, we direct the AO to consider the Form No. 67 for the purpose of assessment of the updated return filed u/s 139(8A) Disallowance of TDS credit claimed - it is admitted that this particular return of income has been submitted under the provisions of section 139(8A) and no claim for TDS refund is allowable with respect to return filed under the said section - HELD THAT:- As pointed out by the CIT. DR that the assessee has also not claimed the full TDS as reflected in Form 26AS in his return of income. As such, on this issue we set aside the matter back to the file of the AO to examine the return and allow the credit of TDS to the extent of actually claimed in the return, which again should be supported by Form 26AS, and to allow the credit of TDS to the extent which is legally allowable as per provisions of the Act.
-
2024 (9) TMI 722
Royalty receipts - receipts of the assessee from equipment rental - eligibility of receipts of the assessee company for the benefit u/s. 44BB - income from equipment rental is sourced in India in view of Section 5(2) r.w.s. 9 of the Act as such services are utilized in India as well as Under Article 12 of India- Malaysia DTAA - HELD THAT:- As decided in own case [ 2023 (2) TMI 120 - ITAT DELHI ] DRP has made a fundamental error in ignoring the exceptions provided under clause (iva) to explanation 2 to section 9(1)(vi) of the Act while concluding that the amount received is in the nature of royalty u/s 9(1)(vi) read with section 115A of the Act. One more fundament error committed by DRP is in holding that section 44BB will be applicable only in a case where non-resident has a PE in India. The aforesaid conclusion of learned DRP is based on complete misinterpretation of the provision and goes against the very essence of the provision, which does not put the condition of existence of PE for applicability of the provision. Thus, in our view, the conclusion drawn by DRP that the amounts received are in the nature of royalty u/s 9(1)(vi) read with section 115A of the Act is unacceptable. We accept the position taken by the assessee in offering the income to tax under section 44BB of the Act, as, it is in accordance with the statutory provision. Accordingly, we direct the AO to compute the income in both the assessment years under dispute under the provisions of section 44BB - Assessee appeal allowed.
-
2024 (9) TMI 721
Disallowance of debts written off by the assessee - denial of deduction u/s 36(1)(vii) the claim as the assessee did not create any provision in the books of accounts, which is a mandatory requirement for claiming such deductions - HELD THAT:- We have reproduced the relevant provision of the Act, herein above and from the bare reading of the provisions of the Act it is abundantly clear that, for the purpose of invoking the provisions of section 36 (1) (viia), it is essential for the assessee bank to make a provision in the books of account for bad and doubtful debts. Admittedly the assessee has not made any provision for bad and doubtful debts in its books of account, therefore in our considered opinion the assessee is not entitled to benefits of section 36 (1) (viia). In view of the above, the ground raised by the assessee is dismissed. Additional ground raised by the assessee - entitlement of the assessee u/s 36(1)(vii) of the Act to claim deduction on account of the bad debts actually written off in their books of account - Having admitted the additional ground raised by the assessee, which is relating to entitlement of the assessee u/s 36(1)(vii) of the Act to claim deduction on account of the bad debts actually written off in their books of account, since this issue has been raised before us for the first time and has not been considered by the lower authorities, therefore we deem it appropriate to remand back the matter to the file of the Ld. AO with the direction to examine afresh the issue in accordance with law after affording opportunity to the assessee. The assessee is also directed to prove that they have complied all the requirement of the law for claiming the deduction on account of the bad debts actually written off in their books of account. Addition towards profit on sale of investment - assessee had wrongly credited to the profit and loss account on account of profit on sale of investment and during the assessment proceedings the assessee filed the revised computation of income by deleting the said amount - revenue authorities did not allowed the claim of the assessee due to the reason that the assessee did not produced necessary evidence/documents before them - HELD THAT:- It is a fact that the assessee does not stand to gain by not producing such documents. Be that as it may, now that the assessee is ready to produce all such documentary evidence in support of his contentions and get the matter disposed of on merits. The highest that would happen by allowing an opportunity to the assessee is that a cause would be decided on merits. We are of the view that fresh opportunity should be given to the assessee and, accordingly, we set aside the impugned issue to the file of the Ld. AO for deciding the issue afresh on merits after affording the opportunity of hearing to the assessee. Accordingly, the ground of the assessee is allowed for statistical purposes. Depreciation claimed on investment - HELD THAT:- We are of the concerned opinion that no depreciation will be allowable to the assessee on the investment treated as current assets. We here by make it clear that, neither we have decided the nature of the investment, whether it is current or otherwise, nor it was an issue before us to decide the nature of the investments. We have only decided on the issue whether the assessee is eligible to claim depreciation on the investments, which the assessee has shown as current assets. Accordingly, on this count, this issue of the assessee is dismissed. Contention of the assessee that the investment are in the nature of non SLR and has been shown under the current assets - CBDT vide circular no. 665 dated 03/10/2/1993 has clarified that the investment which has been classified as per the guidelines of RBI as Available For Sale(AFS) and Held For Trading (HFT) will be treated as stock in trade and can be valued at lower of cost or market rate. Therefore in our opinion, whether the claim of the assessee that the investment are stock in trade or not in lieu of the aforesaid circular of CBDT is required to be verified from the relevant documents and books of accounts of the assessee. Therefore we remand the matter back to the file of Ld. AO with a direction to verify, whether the investment falls under stock in trade or not in lieu of the CBDT circular no. 665 dated 03/10/2/1993. If the Ld. AO after verification found it to be stock in trade, then he is directed to value the same at lower of cost or market rate as per the accepted accounting principle. This issue of the assessee is allowed for statistical purposes.
-
Benami Property
-
2024 (9) TMI 720
Benami transaction - Provisional Attachment Order u/s 24(4) of the Prohibition of Benami Property Transactions Act, 1988 - events of transaction pre- amendment and the post - HELD THAT:- It is even by giving illustration that even if the property has been purchased prior to the amendment w.e.f. 01.11.2016, then it would be subject to the decision of the Apex Court in the case of Ganpati Delcom [ 2022 (8) TMI 1047 - SUPREME COURT ] It is, however, with the clarification that if such a property is transferred prior to the amendment but heldeven after the amendment by the Benamidar, then initiation of action under the amended provision would not be invalid. The significance of the word `held‟ given under Section 2(9)(A) has been elaborately discussed which word was not existing in the earlier definition of Benami transaction (pre-amendment). In the instant case, the Company in whose name the property was purchased i.e. M/s Seasons Warehousing Pvt. Ltd. had no capacity to purchase the property worth of Rs. 01 Crore because as per the annual return submitted with the ROC, it was having worth of around 7 lakhs and that too in the Financial Year 1998-99. It is also a fact that the ITR for the Assessment Year 2020-21 filed by M/s Voltamp Controls Pvt. Ltd. reflected the address of the said property. Adjudicating Authority ignored the definition of Benami transaction given under the amending Act of 2016 while passing the order. The property in question was purchased in the name of M/s Seasons Warehousing Pvt. Ltd. Respondent No. 1 whereas it was not having means to pay consideration. M/s Voltamp Controls (I) Pvt. Ltd. Respondent No. 2 was holding the property in the name of M/s Seasons Warehousing Pvt. Ltd. Respondents did not contest the factual issues. It may be for the reason that the purchase of the property in the name of M/s Seasons Warehousing Pvt. Ltd. is for a sum of Rs. 01 Crores whereas the Company was not having sufficient funds to purchase the property worth of Rs. 01 Crores. It was thus held by M/s Voltamp Controls (I) Pvt. Ltd. and the address of the property was given even in the Income-tax return. Accordingly, the consideration of the property was paid by M/s Voltamp Controls (I) Pvt. Ltd but it was using the name of M/s Seasons Warehousing Pvt. Ltd. in whose name the Registered Deed was executed. We find reasons to cause interference in the impugned order.
-
2024 (9) TMI 719
Benami transaction - beneficial owner of the currency seized from Bikky Kumar Singh - as argued no evidence could be produced by the respondent to prove appellant to be beneficial owner of the currency seized from Bikky Kumar Singh - HELD THAT:- The statement initially recorded un/s 132(4) of the Income Tax Act have been corroborated by the Bikky Kumar Singh. The statement aforesaid has been quoted in the impugned order to show involvement of the appellant. The elaborate discussion on the issue has been made but now appellant has disowned the currency notes and pleading to this effect has been made in the appeal. The counsel for the appellant could not clarify that if the currency notes does not belongs to the appellant, how he is aggrieved by the attachment of the aforesaid amount which was seized from the possession of Bikky Kumar Singh. In fact, filing the appeal would show interest of the appellant in the currency and would be only when it belongs to him and not otherwise. In any case, we do not find any substance in the argument of the appellant to state that no evidence or material has been produced by the respondents to prove case against him. Rather, the material available on record was considered by the Adjudicating Authority and elaborate finding was recorded thereupon. It is based on the material. Thus, we are unable to accept the first argument raised by the appellant. First statement u/s 132(4) was recorded on 06.02.2017 by the Income Tax Authority while the subsequent statement under section 19(1)(b) of the Act of 1988 was recorded on 17th and 18th January, 2018, i.e. with the delay of almost eleven months - Appellant however failed to refer to any provision which mandates that statement should be recorded within the specific period and otherwise as such there is no variance in the two statements of Bikky Kumar Singh recorded under section 132(4) of the Income Tax Act and the subsequent statement under section 19(1)(b) of the Act of 1988. Thus, even second argument raised by the appellant cannot be accepted in absence of a statutory provision to mandate recording of the statement within the specific period. Adjudication of benami property - impugned order that 25.04.2019 was passed after one year after the date of reference which is 26.03.2018 - Section 26(7) mandates order under sub-section 3 of section 26 within a period of one year from the end of the month in which reference under sub-section (5) of section 24 was received. The learned counsel for the appellant has ignored the word received rather it was taken to be the date of reference . In fact, no pleading has been made to plead the order was passed beyond a period of one year from the date of receipt of the reference. Though, the issue aforesaid is mixed question of facts and law. In any case, it was clarified by the respondent that reference dated 26.03.2018 was received by the Adjudicating Authority in the month of April 2018 who then caused show cause notice to Bikky Kumar Singh with a copy to the appellant in the month of April 2018 and the order was passed within one year from the date of receipt of the reference. In fact, from the end of the month of the receipt of the reference, the impugned order was passed within one year. Thus, the third issue raised by the appellant is also not made out though was not even pleaded in the appeal. Notice and attachment of property involved in benami transaction - As provision of section 24(2) of the Act of 1988 its not mandate issuance of notice in the name of beneficial owner rather what is required is a copy of the notice to the beneficial owner. In the instant case, a copy of the notice was sent to the appellant and perusal of the pleading of the appeal would show not only its receipt but reply to the notice by the appellant. It could not have been, if the copy of the notice would not have been served on the appellant. In fact, the appellant has admitted service of the copy of the notice as per section 24(2) of the Act though it is to be given to the benamidar but copy was given to beneficial owner. Thus, the argument in reference to section 24(2) is also not made out. Approval required under section 24(4)(A)(i) - We find that approval aforesaid was granted by the Competent Authority and was a part of the record. For the compliance, the respondent was directed to place on record the order of the approval which was submitted with the copy to the appellant. In view of the above even the last issue raised by the appellant in reference to the requirement of approval under section 24(4)(a)(i) is concerned, the compliance of the aforesaid also exist. It was for continuing the provisional attachment of the property. Appeal dismissed.
-
2024 (9) TMI 718
Benami transaction - reliance on sworn statement u/s 32(4) to make out a case of benami transaction - reference of the meaning of fiduciary capacity - appellant would submit that the cash with the alleged benamidars was not in the capacity of trustee, executor, partner or a Director of the Company, thus would not fall in one of the exception given under sub-clause (ii) - HELD THAT:- The fiduciary capacity cannot be used as an exception in all the circumstances which may include transfer of property for or is held for illegal purpose. It cannot be even when there is a concluded contract which pass on the title to others then keeping the property by the person on whose favour title gets transferred would not keep it in fiduciary capacity rather with the transfer of the title, the relationship would also change and those cases would not fall in the sweep of the exception of fiduciary capacity. It would be simpliciter in those cases where the money has been kept with other person on trust for safe custody. It would not apply even in the cases where a conflict exist in regard to the relationship and the fiduciary should not be to make profit. It can be illustrated further but looking to the limited issue involved in the present case and as there is no allegation against the respondents for putting the money with the employees against any of the principle laid down by the Supreme Court [ 2015 (12) TMI 1775 - SUPREME COURT ] RBI Vs. Jayanti Lal N. Mistry the elaborate discussion is not made however, this order would apply in the case where a person stand in the fiduciary capacity towards others simpliciter. As statement of the witnesses have been analyzed by the Adjudicating Authority at length and for that even the statements have even been quoted. The fact remains that the alleged benamidar did not claim right and ownership on the property and at the same time alleged beneficial owner did not disown the cash found with the alleged benamidar rather claimed it to be their. The Income Tax Assessment was made adding the amount in the income of the beneficial owners which obviously was not shown in the books of accounts and therefore only the addition was made in the Income Tax Assessment. This fact also supports the respondent.
-
Customs
-
2024 (9) TMI 716
Detention of a consignment of goods comprising of platinum alloy sheets - no reasons assigned in the impugned orders for formation of a reasonable belief or opinion that the COO certificate or the imported articles were non-compliant with the statutory prescriptions - violation of principles of natural justice - HELD THAT:- The validity of the action would have to be necessarily tested on the basis of the reasons recorded and assigned. It is by now well-settled that the requirement of reasons being recorded forms the core of our jurisprudential doctrine of fairness, constitutes an important safeguard against arbitrary exercise of power and serves as validation of due application of mind. It constitutes a fundamental component of the rule of law itself. All that the respondents assert is that although the SIB has concluded its investigation, they have been advised to assess the Bill of Entry under a PD Bond and the furnishing of a Bank Guarantee. The impugned orders woefully fail to record any reason which may be reflective of consideration having been accorded to the various factors which would be relevant to an exercise of verification being initiated, for a COO certificate being doubted or the action being necessitated under any provision of the Act, CEPA Rules or CAROTAR. The respondents did not even dispute the assertion of the writ petitioners that such a verification exercise can, in fact, be initiated and completed by way of an online verification process and in real-time. If those certificates were to be loosely brushed aside, it would shake the very edifice of a Trade Agreement and be contrary to the reciprocal arrangement agreed upon by respective States. The stipulation of a Bank Guarantee as security has been applied ostensibly in light of clause 6(b) of Paragraph 3 of the Guidelines. Clause 6(b) of Paragraph 3 would have been attracted provided the proper officer had found it necessary to order a provisional assessment for the purposes of a chemical test, a felt a need for further information being called for from the importer or causing further inquiries. Even these situations and conditions which would have justified a demand for a Bank Guarantee are neither spelt out nor are they discernible from the reasons assigned. The respondents are directed to reconsider the release of the imported articles with due expedition bearing in mind the observations made - petition allowed.
-
2024 (9) TMI 715
Revocation of Customs Broker License - failure of Customs Broker to comply with Regulations 13(d), 13(e) and 13(0) of CHALR, 2004 - delay in Inquiry Proceedings - HELD THAT:- Respondent was holding a CHA license since 1983. Respondent was prohibited from operating at Chennai Customs Port in view of certain mis-declaration in some shipping bill that was reported against the exporter. The license was suspended pursuant to an order passed by the Commissioner of Customs (General) directing discontinuance of the service pending inquiry. By an order dated 30th April 2012 the Commissioner of Customs (General), Mumbai revoked the suspension of CHA license by observing that it was being done as the investigation is still under progress before the investigating unit. The CESTAT took a view that this has been done despite a clear direction to restore respondent s license in the event of Department s failure to conclude the inquiry within three months of receipt of the CESTAT order passed on 15th December 2011. There are nothing incorrect in the conclusion arrived at by the CESTAT. We agree with the CESTAT that there is a specific direction that the Department has to strictly follow it unless that direction is set aside by a superior forum. Appeal dismissed.
-
2024 (9) TMI 714
Seeking grant of anticipatory bail u/s 482 of the Bhartiya Nagrik Suraksha Sanhita, 2023 - arrest in relation to offence punishable under Sections 135(1)(b), 135(1)(i)(A) of Customs Act - smuggling of 5 Kgs of gold - HELD THAT:- Certainly, in this case, the vehicle used in the crime, was in the name of applicant's brother Gourav Garg, only on the basis of that ground, the gravity of the offence cannot be mitigated. Actually, as per the allegation made in the case diary, there are evidence wherein allegations of committing offence, are prima facie emerging against the applicant. So far as the law laid down in the case of TARSEM LAL VERSUS DIRECTORATE OF ENFORCEMENT JALANDHAR ZONAL OFFICE [ 2024 (5) TMI 837 - SUPREME COURT] is concerned, since the applicant has not cooperated in the investigation proceeding then he cannot be given any benefit in view of the law laid down in Tarsem Lal. So far as the law laid down in the cases of ARNESH KUMAR VERSUS STATE OF BIHAR ANR [ 2014 (7) TMI 1143 - SUPREME COURT] and SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION ANR. [ 2022 (8) TMI 152 - SUPREME COURT] is concerned, the law laid down in V. SENTHIL BALAJI VERSUS THE STATE REPRESENTED BY DEPUTY DIRECTOR AND ORS. [ 2023 (8) TMI 410 - SUPREME COURT] , by Hon'ble the Apex Court, it is held that the said law can not be applied to certain categories of offences, including economic offences, but only to minor offences under the Penal Code, 1860. Thus, without expressing any opinion on the merits of the case, no case for grant of anticipatory bail is made out. Hence, the application is liable to be and is hereby rejected.
-
2024 (9) TMI 713
Adjudication of SCN after a period of almost 8 years - Primary ground is that Respondents have not adjudicated the SCN for almost 8 years and, therefore, the impugned SCN is required to be set aside - HELD THAT:- The decision of this Court in the case of COVENTRY ESTATES PVT. LTD. VERSUS THE JOINT COMMISSIONER CGST AND CENTRAL EXCISE ANR. [ 2023 (8) TMI 352 - BOMBAY HIGH COURT] has analysed this issue in depth and has held that such delay in adjudication of SCN is required to be quashed. The decision relied upon by Respondents in COLLECTOR OF CENTRAL EXCISE, NEW DELHI VERSUS BHAGSONS PAINT INDUSTRY (INDIA) [ 2003 (10) TMI 49 - SC ORDER ] is distinguishable on facts. The justification which is sought in the present case before us for the delay in adjudication of the SCN was not the fact case before the Supreme Court. It is important to note that Section 28 (9) provides for determination of the amount of duty or interest within 6 months/1 year from the date of notice as the case may be with further extension of the same period and subject to the conditions specified in the proviso therein. Therefore, insofar as, the provision with which we are concerned, i.e., Section 28 (9) of the Customs Act, there is an express bar in passing the order. Petition allowed.
-
2024 (9) TMI 712
Classification of imported goods - Aluminium Formwork Structure with Accessories - to be classified under the Heading of 8480 60 00 of the Customs Tariff Act or under Customs Tariff Heading 7610 90 10? - recovery of the short-levied Customs Duty - scope of SCN - HELD THAT:- When the goods viz., Aluminium structures in this case, are similar to equipment for scaffolding, shuttering, propping or pit-propping, the same would get classified under heading 76.10 only. Therefore, we hold that the appellant was correct in classifying the impugned goods under CTH 7610 90 10. This is a case where the Bills-of-Entry were self-assessed by the appellant. The Revenue has not challenged the assessment under these Bills-of-Entry, which they are required to do before they come up with their demand notice. There are force in the appellant s submission that the ld. adjudicating authority and the lower appellate authority have traversed beyond the scope of the Show Cause Notice. Admittedly, though a proposal was made to deny the benefit of the Notification, the Show Cause Notice did not specify as to any condition which had not been fulfilled by the appellant so as to deny the benefit of the said Notification. In such a case, the appellant would not have had an opportunity to defend their case by submitting proper documentary evidence. The impugned order is set aside - appeal allowed.
-
2024 (9) TMI 711
Confiscation of imported goods - redemption fine - penalty - illegal import or not - goods imported by the appellants were meant for re-processing and re-cycling purposes and hence are governed by Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 - whether the impugned items fall under A4070 of the Schedule III Part-A or not - HELD THAT:- The report dated November 11, 2022 given by Central Pollution Control Board does not state that the impugned goods are hazardous waste. It states that as per Rule 13(10) of the said Rules, the Port and Customs authorities shall ensure that shipment is accompanied with the movement document as given in Form-6 and the test report of analysis of the waste consignment, wherever applicable, from a laboratory accredited or recognized by the exporting country. In case of any doubt, Customs may verify the analysis. In the impugned case, it is not on record whether any such analysis was presented by the importer or got conducted by the Customs from a competent authority/ agency. The report appears to have presumed the goods to fall under A4070 of Schedule III Part-A of the List of Hazardous Waste as per Hazardous and Other Waste (Management of Transboundary Movement) Rules, 2016 and that such goods require prior permission. No analysis of the consignment seems to have done by the authorities - the denial of cross-examination particularly when the opinion was given only on the basis of records or visual examination is violation of principles of natural justice. The fact that the appellants imported goods identical to the impugned goods at different ports and no questions were raised and the fact that no sample was drawn in the presence of the appellant or his representative add to the credence of the appellant s submission. In the impugned case, the opinion that the imported goods were of hazardous waste was not arrived on the basis of any chemical test or analysis; it appears that the decision has been arrived on the basis of the warning words written on the container. Such a conclusion drawn even by a competent authority will not stand the scrutiny of law. It is very difficult to understand as to how hazardous goods would be construed as hazardous waste just by the warning words written on the container. It is a common knowledge that warnings like dangerous , hazardous are mentioned to indicate the nature of the contents and for the same reason, they do not become waste attracting the provisions of Hazardous Goods Rules, 2016. Moreover, non-permitting of the cross-examination of the concerned officers/ scientists of Pollution Control Board makes the report all the more non-reliable. The impugned order is set aside and the appeal is allowed.
-
Corporate Laws
-
2024 (9) TMI 710
Petition dismissed on the ground that the delay cannot be condoned - seeking extension of Companies Fresh Start Scheme, 2020 (CFSS 2020) by letter/notification dated 15th January, 2021 - whether the benefits of a particular scheme brought into force by the respondents as an exemption notification could be applicable to the appellant in the fact situation obtaining in the present case, it would be appropriate to consider the law in this regard? HELD THAT:- It is trite that a notification granting benefit of exemptions from a regime, whether taxation or otherwise, is to be strictly construed. This of course, is dependent also on the facts of each case. The question whether party falls in the notification or in the exemption clause, has to be strictly construed and when once the ambiguity or doubt is resolved by interpreting the applicability of exemption clause strictly, the Court may construe the notification by giving full play bestowing wider and liberal construction. The Courts are to examine as to whether the party seeking such benefit under such exemption notification is found to be entitled to such benefits or not. In case, a party is found to be eligible within the conditions prescribed, the notification is to be construed liberally. In contradistinction thereto, if a party is found to be ineligible as per the conditions prescribed, the notification is to be construed strictly. All that is to be seen is the legislative intent or the economic justification behind such notification. A perusal of the CFSS 2020 dated 30th March, 2020 reveals that the benefit of exemption from charging additional fees and grant of immunity from launching prosecution on account of delay associated with certain filings was notified in respect of only those companies which were not in the excepted category as per sub clause (ix) (a) of clause 6 thereof. It is also apparent that the said benefit was to come into force with effect from 1st April, 2020 to 30th September, 2020. The scheme envisages entitlement to companies, whose restoration orders were passed between 1st December, 2020 and 31st December, 2020. It is an undoubted fact that the restoration of the name of the appellant was directed. Thus, in view of the fact that the order restoring the name of the appellant was not passed between 1st December, 2020 and 31st December, 2020, even if it is to assume replacement of NCLT with Delhi High Court , the exemption notification of extended CFSS 2020 cannot be made applicable to the appellant - the appellant was clearly not entitled to the benefit of extended CFSS 2020 and thus, this cannot be a second bite at the cherry. There are no reason to interfere with the impugned judgment and resultantly, the appeal along with pending applications, if any, is dismissed.
-
2024 (9) TMI 709
Abuse of dominant position - belated challenge to orders - change of status from 'participant' to 'opposite party'. Whether the challenge to orders dated 01.11.2019 and 26.08.2020 are belated and whether the Writ Petitions suffer from laches? - HELD THAT:- There is no delay in filing of these Writ Petitions, since one of the impugned orders have been provided to the petitioner only very proximate to the filing of the Writ Petitions. A copy of order dated 01.11.2019 was supplied to the petitioner under cover of letter dated 14.09.2020. At that juncture, the stand of the respondents had been that the role of the petitioner as a participant was only in the capacity of a third party'. Since a copy of order dated 26.08.2020 has been supplied only on 01.03.2024, the petitioner was unaware that the furnishing of order dated 01.11.2019 was on account of the upgradation of its status. Thus, the participation of the petitioner in the proceedings does not either militate against the present challenges or amount to acquiescence thereof. Importantly, a photostat copy of order dated 26.08.2020 has been supplied to the petitioner only 01.03.2024 and the present writ petitions have been filed on 07.03.24. There is thus no delay in the petitioner approaching this Court. Whether the change of status of the petitioner from participant to party / opposite party in the reference is material and whether it is contrary to the provisions of law and the procedure contemplated under the Act and connected Regulations? - HELD THAT:- An entity is entitled to know the status under which its presence and participation is sought in statutory proceedings. The application of the statutory provisions and connected Regulations, their consequences, as well as available protections would vary depending on the status of the party. Thus, unless a party is aware as to the specific provision under which its involvement is sought and obtained, it would be in the dark as to the measures available to it under the law. There are serious consequences to an order passed by the Commission under Section 27 of the Act whereunder it may direct any enterprise found guilty of abuse of dominant position, to discontinue from, and not re-enter such agreement. It may also impose penalties as it may deem fit, upto 10% of the average turnover or income for the last three preceding financial years when the entity is found to have abused its dominant position. In the present case, a reference has been made by R6 on the basis of which the DG would directed to investigate the matter. The powers of the DG under Section 41 thus stand triggered. Section 41 provides for the powers to investigate similar to the powers under Section 136(2) conferred on the Commission. In the present case, a report dated 17.08.2020 has been furnished by the DG which has not been furnished to the petitioner. Sub-section (4) provides for the Commission to forward a copy of the report referred to in sub-section (3) and (3B) to the parties concerned. The term used in Section 26(4) is parties . Since a copy of the report u/s 26(3) has not been furnished to the petitioner, it is clear that it is still being treated on par with a third party to the proceedings. This is despite the updation in status exparte to contesting party, under order dated 26.08.2020 furnished to the petitioner in 2024 - In the present case, a report dated 17.08.2020 has been furnished by the DG which has not been furnished to the petitioner. Sub-section (4) provides for the Commission to forward a copy of the report referred to in sub-section (3) and (3B) to the parties concerned. The term used in Section 26(4) is parties . Since a copy of the report u/s 26(3) has not been furnished to the petitioner, it is clear that it is still being treated on par with a third party to the proceedings. This is despite the updation in status exparte to contesting party, under order dated 26.08.2020 furnished to the petitioner in 2024. This Court is of the view that the petitioner ought to have been given notice prior to impleadment as a party and the satisfaction of the authority as to the justification for such impleadment ought to have been made out by way of a speaking order. Petition dismissed.
-
Insolvency & Bankruptcy
-
2024 (9) TMI 708
Admission of application filed under Section 7 of the Insolvency Bankruptcy Code, 2016 - Suspended Director of the Corporate Debtor and Financial Creditor have jointly submitted that in view of the settlement (Consent term) the impugned order may be set aside and the CIRP initiated against the Corporate Debtor may be dropped - HELD THAT:- The present appeal is disposed of and the impugned order is hereby set aside. The matter qua the claim of the IRP is being kept open for him to file an appropriate application, if so advised, before the Tribunal for redressal of his grievances - The Registrar shall release the FDR within two weeks from today to the counsel for the respondent.
-
FEMA
-
2024 (9) TMI 707
Validity of detention order of the detenu - Detenu was engaged in illegal transactions by way of purchase and sale of illegally collected foreign currencies from NRIs and other foreign exchange dealers - as argued the material against the detenu could not have led any reasonable person to come to the conclusion that there was a case made out against the detenu to detain him AND Detaining Authority has not applied his/her mind to the material in proper perspective resulting in an unsustainable order of preventive detention. Whether non-supply of the statements of Ms. Preetha Pradeep has affected the right of the detenu to make an effective representation under Article 22(5) of the Constitution of India? - HELD THAT:-There can be no doubt that it is not necessary to furnish copies of each and every document to which a casual or passing reference may be made in the narration of facts and which are not relied upon by the Detaining Authority in making the order of detention. Failure to furnish copies of such document/documents as is/are relied on by the Detaining Authority which would deprive the detenu to make an effective representation would certainly amount to violation of the fundamental right guaranteed under Article 22(5) of the Constitution of India. This Court reiterated that, primarily, the copies which form the ground for detention are to be supplied and non-supply thereof would prejudice the detenu. It has been further held that the documents which are merely referred to for the purpose of narration of facts in that sense cannot be termed to be documents without the supply of which the detenu is prejudiced. It is thus a settled position that though it may not be necessary to furnish copies of each and every document to which a casual or passing reference has been made, it is imperative that every such document which has been relied on by the Detaining Authority and which affects the right of the detenu to make an effective representation under Article 22(5) of the Constitution has to be supplied to the detenu. No doubt, as has been reiterated time and again by this Court, it may not be necessary to supply each and every document to which a passing or casual reference is made. However, all such material which has been relied on by the Detaining Authority while arriving at its subjective satisfaction will imperatively have to be supplied to the detenu. In our view, the documents relied on by the Detaining Authority which form the basis of the material facts which have been taken into consideration to form a chain of events could not be severed and the High Court was not justified in coming to a finding that despite eschewing of certain material taken into consideration by the Detaining Authority, the detention order can be sustained by holding that the Detaining Authority would have arrived at such a subjective satisfaction even without such material. In that view of the matter, we have come to a considered conclusion that non-supply of the statements of Preetha Pradeep has affected the right of the detenu to make an effective representation under Article 22(5) of the Constitution of India and as such, the detention is vitiated on the said ground. Whether non-receipt of the representation and the delay in deciding the representation by the Detaining Authority and the Central Government would also affect the right of the detenu under Article 22(5) of the Constitution? - We find that the Superintendent of the Central Prison Correctional Home has acted in a thoroughly callous and casual manner. In spite of there being catena of judgments by this Court that it is the duty of the transmitting authorities to transmit the representation of the detenu promptly and it is the corresponding duty of the concerned authorities to consider the said representation and to decide it swiftly, the same has been followed only in breach in the present matter. In the present case, it has been casually stated that though the Jail Authorities had informed that the representations of the detenu were sent through ordinary post, the same were neither received by the Detaining Authority nor the Central Government. We deprecate the practice of the Prison Authorities in dealing with the valuable right of the detenu in such a casual manner. In spite of this Court clearly observing in the case of Vijay Kumar (supra) that the State Government must gear up its own machinery to ensure that the representation is transmitted quickly; it reaches the Central Government as quickly as possible and is decided expeditiously. In the present case, the law laid down by this Court has been given a go-bye. Jail Authorities ought to have ensured that the representation of the detenu reaches the concerned Authorities at the earliest. In the present era of technological advancement, the Jail Authorities could have very well sent the copies of the representation to the Detaining/Appropriate Authority either by email or at least a physical copy could have been sent by Speed Post (acknowledgment due) so that there could have been some evidence of the said being sent to the competent authority and could have been tracked. Merely because there has been a casual or callous and, in fact, negligent approach on the part of the Jail Authorities in ensuring that the representation of the detenu is communicated at the earliest, the valuable right available to the detenu to have his representation decided expeditiously cannot be denied. There has been a delay of almost about 9 months in deciding the representations made by the detenu. Even otherwise, from the Memoranda dated 12th June 2024, as already discussed herein above, there would be at least 27/20 days delay on the part of the Central Government and the Detaining Authority in deciding the representation of the detenu after it reached them subsequent to the filing of the present appeal. In the present era of technological development, the said representation can be sent through email within a day. It is further needless to reiterate that the Competent Authority should decide such representation with utmost expedition so that the valuable right guaranteed to the detenu under Article 22(5) of the Constitution is not denied. In the matters pertaining to personal liberty of the citizens, the Authorities are enjoined with a constitutional obligation to decide the representation with utmost expedition. Each day s delay matters in such a case. In the present matter, we find that on account of casual, callous and negligent approach of the Prison Authorities, the representation of the detenu could not reach to the Detaining Authority and the Central Government within a reasonable period. There has been about 9 months delay in deciding the representation. Even otherwise, accepting the stand of the respondents as made in the counter affidavit, there has been a delay of 27/20 days on the part of the Central Government and the Detaining Authority in deciding the representation when it was called from the Prison Authorities after notice was issued in the present matter. We further find that the detention order is liable to be quashed and set aside on this ground also. Thus, order passed by the Joint Secretary (COFEPOSA) to the Government of India directing the detention of the detenu is quashed and set aside.
-
2024 (9) TMI 706
Offence under FERA - contravention of Section 8(3) read with (r/w) Section 8(4) and Sections 8(3) r/w 8(4) r/w Section 64 of FERA - penalty has been imposed on him for the over-invoicing of the imported books and unauthorised remittances in foreign exchange made abroad through his alleged proprietorship firms - It is contention of the Appellant that the main accused Shri Kamlesh Shah placed the order for the import of the books, made the payment for the consignments for the imported books and the subsequent remittance in foreign exchange abroad and the only act committed by the Appellant was that he allowed Shri Kamlesh Shah to use the name of his proprietorships for import of books. HELD THAT:- We observe that the Appellant had the knowledge that Shri Kamlesh Shah had placed orders for the books, effected the consignment imports and made payment of remittances in foreign exchange to give effect to the fraudulent scheme. Further, based on the said recorded statements under Section 40, we are not inclined to believe the assertion of the Appellant that he was not aware that Shri Kamlesh Shah had opened the bank. Moreover, we observe that any inconsistencies in the statement of Shri Kamlesh Shah do not cast doubts on the veracity of the recorded statements and records available before us for drawing inference about the involvement of the Appellant. Based on the materials before us, we do not consider the Appellant to be main mastermind to over-value the imported book consignments and send remittances abroad in foreign exchange for the said import. From the role played by the Appellant in the entire scheme, we hold that the contravention of Section 8(3) r/w Section 8(4) as well as of the said Sections r/w Section 64(2) of FERA are established against the Appellant. We reduce the total penalty on the Appellant to Rs. 2 Lakhs. We note that Rs. 2 Lakhs has already been pre-deposited by the Appellant and therefore, the amount is to be adjusted towards the reduced penalty. We also observe that the Ld. Adjudicating Authority has directed Rs. 60,859.52 lying in the bank account of M/s Vishal Internationals, the proprietorship firm of the Appellant to be adjusted against the total penalty of Rs. 8 Lakhs imposed on the Appellant in the impugned order. In view of the reduction in penalty to Rs. 2 Lakhs, which has already been deposited by the Appellant as pre-deposit, we direct that the amount of Rs. 60,859.52 blocked in the account of M/s Vishal Internationals in the Corporation Bank be released to the Appellant, along with interest thereupon, if any.
-
PMLA
-
2024 (9) TMI 705
Seeking grant of Regular Bail u/s 439 of Criminal Procedure Code 1973 read with section 45 of the Prevention of Money Laundering Act, 2002 (by a woman) - Cattle smuggling was happening from India to Bangladesh by paying illegal gratification to BSF personnel deputed on the Border - HELD THAT:- The allegations essentially against the Applicant are that Satish Kumar who was the then Commandant of 36th Battalion of BSF and is the second husband of Tania Sanyal, had received the bribes for the business of Cattle smuggling across the border. The Applicant s father, Anubrata Mondal had received the money from Satish Kumar and the Applicant had helped in laundering the money to the tune of Rs. 12,00,00,000/- through her Companies/Firm. Even though she projected herself as a primary School teacher, but there is enormous prima facie evidence to establish that she owns/ manages various Firms and Companies, in the accounts of which the proceeds of crime generated from the predicate offence of Cattle-Smuggling are laundered. Indisputably, the Applicant is not an accused in the predicate offence. It has been held in the recent decision of the Apex Court in Manish Sisodia vs. Central Bureau of Investigation [ 2023 (11) TMI 63 - SUPREME COURT ], that right of liberty guaranteed under Article 21 of the Constitution of India is a sacrosanct right which needs to be accepted even in cases where stringent provisions are incorporated in the special enactments. Furthermore, Proviso to Section 45 (1) of PMLA, 2002 entitles a woman for special treatment, while her bail application is being considered. In the recent decision of the Apex Court in Kalvakuntla Kavitha vs. Directorate of Enforcement, [ 2024 (8) TMI 1411 - SUPREME COURT ], a reference has been made to Proviso to Section 45 (1) of PMLA, 2002 to observe that this Proviso permits a certain category of accused including woman to be released on bail, without the twin requirement under Section 45 of the PMLA being satisfied. While the Proviso does not operate automatically in favour of the woman, but the facts and circumstances of the case are to be considered. However, while denying such benefit, the Court is required to give specific reasons as to why the benefit be denied. In the present case, the facts essentially are in pari materia, the Applicant is the daughter of Anubrata Mondal and the allegations essentially against her are that she had used her Company/Firm accounts to launder the money, proceeds of crime which was received by her father - As has been observed in the case of Saumya Chaurasia [ 2023 (12) TMI 685 - SUPREME COURT ], the Applicant may be an educated woman having her business and commercial enterprise, but it cannot be overlooked that the allegations against her are essentially in the context of her father and that she in her commercial ventures, has laundered the money received by her father as a bribe. Looking at the number of pages in the Chargesheet which were voluminous, and some were in Bengali which were required to be translated, Sh. Anubrata Mondal was admitted to bail. In the present case, the Applicant is in judicial custody from 26.04.2023. As has been observed in the context of this case itself while deciding bail of Anubrata Mondal the documents involved are voluminous and the trial may take a long time to get concluded. Furthermore, the Applicant is a woman who is entitled to bail under Proviso to Section 45 of PMLA, 2002. The Applicant is admitted to regular bail upon her furnishing a personal bond in the sum of Rs. 10,00,000/- and one surety of the like amount to the satisfaction of the learned Trial Court, subject to fulfilment of conditions imposed - bail application allowed.
-
2024 (9) TMI 704
Seeking grant of Regular bail - money laundering - involvement in conspiracy - proceeds of crime - benefit of Proviso to Section 45 of the PMLA sought on the ground of being sick and infirm - HELD THAT:- There is ample evidence to link the Accused to the commission of the offence of Money Laundering, and his release on Bail would adversely affect further investigation to trace remaining proceeds of crime especially in light of the nature of the case, severity of allegations and voluminous evidence on record. Certain facts are in the personal knowledge of the Applicant which the Investigation Agency is yet to unearth and there exists all likelihood of the accused tampering the evidence of the case, if released on Bail. There is also a likelihood of him evading the process of law, the possibilities of which cannot be ruled out. While personal liberty is of paramount importance, the same is not absolute but subject to reasonable restrictions, including the interest of the State and public. Reference has been made to Vijay Madanlal Choudharv Ors [ 2022 (7) TMI 1316 - SUPREME COURT ] wherein while considering the twin conditions under Section 45 of the PMLA, the Apex Court observed that the twin conditions are valid being reasonable on having correct nexus with the purposes and objects sought to be achieved by the 2002 Act to combat the menace of money-laundering having transnational consequences including impacting the financial systems and sovereignty and integrity of the country. It is asserted that the investigations against the Applicant are complete and the prosecution Complaint has also been filed. The IO and the ED have taken all steps to expedite the trial and has been proactive in complying with the directions of the Court. The Directorate of Enforcement as per the established law, is not required to give the list of un-relied documents to the accused persons before the stage of trial and thus, had challenged the Order of the Trial Court dated 05.01.2023 wherein it was directed to only provide the list of un-relied documents. In regard to the medical ground for Bail, it is stated that it is only on the exceptional sickness that Bail can be exercised and that too in sparing and cautious manner; any and every nature of sickness does not entitle an accused to be released on Bail. in a recent decision pertaining to interim medical bail in a PMLA case, this Court has accepted the principle that if the condition of the accused is not so serious or life threatening, he cannot be enlarged on medical bail. The basic argument on behalf of the applicant is that there is no prima facie case against him. There is no role of the applicant in framing or implementing the Excise Policy. The applicant has detailed that various meetings were held between the South Group and the AAP from March to July, 2021 at various locations in Delhi and Hyderabad and to none of those was he a party - The applicant also had given his comments only because he had been in this business for long and had huge experience. He merely gave his comments as a stakeholder and had not been in any way influenced the Policy. He has also sought to explain that the claim that he was getting kickbacks from the profits to be earned, is also not tenable as his profit margin was only 1 percent as has been explained in detail. The applicant has further explained that though there are allegations made against him of destruction of evidence, but it is in regard to three mobile phones which he had to change because these mobile phones were seized by the CBI during the raids making it imperative for him to switch to the new mobiles. Taking a prima facie view of the roll as defined of the applicant in the case, it can be observed that the twin test of guilt for the offence of money laundering or likely to commit any offence are weak. It may also be observed that the antecedents of the Applicant, who has no previous involvement, it cannot be said that he is of flight risk or is likely to tamper with the evidence or influence the witnesses since most of the evidence is essentially documentary in nature. The applicant is directed to be released forthwith on bail in connection with the ECIR No. HIU-II/14/2022 dated 22.08.2022, registered by the Directorate of Enforcement subject to furnishing a bail bond in the sum of Rs.10,00,000/-with two sureties of the like amount, to the satisfaction of the learned Trial Court - the Bail Application is allowed and Sameer Mahandru is admitted to bail subject to fulfilment of conditions imposed. Bail application allowed.
-
2024 (9) TMI 703
Seeking direction to constitute a fresh bench for hearing the O.A by an independent body and before an impartial forum - fundamental contention of the appellant in this appeal is that the Ld. Adjudicating Authority has been constituted against the principles of natural justice - HELD THAT:- The Legislature, acting upon the observations and recommendations of the Hon'ble Supreme Court in Madras Bar Association (which duly considered R. Gandhi) [ 2020 (12) TMI 3 - SUPREME COURT] , L. Chandrakumar [ 1997 (3) TMI 90 - SUPREME COURT] has enacted a new law which currently governs tribunals, including the Appellate Tribunal set up under PMLA, 2002. Similarly, in the case of Alok Industries Ltd. [ 2022 (6) TMI 1499 - DELHI HIGH COURT] ,the direction of the Hon'ble Delhi High Court was that steps shall be taken for filling up the vacant posts ... on an expeditious basis and in any case, within a period of four months from today. Notably, the said case was decided by the same single-judge Bench of the Hon'ble Delhi High Court which later decided Gold Croft Ltd. [ 2023 (9) TMI 1070 - DELHI HIGH COURT] . It is a well-established and indisputable proposition that orders passed by judicial and quasi-judicial authorities should be speaking orders which provide the detailed reasoning for the decisions. Upon a perusal of the impugned order, it is found that the requirement of passing a reasoned order has been violated by the Ld. AA while disposing of the Miscellaneous Applications filed by the appellant before it. It has duly provided its reasons, albeit very succinctly. It can be seen that the Ld. AA has given its reasons while disposing of the Miscellaneous Application. The appellant's grievance appears to be that the Ld. Authority did not address the underlying issue in the Miscellaneous Application which was regarding potential conflict of interest involved in cases generated by the Department of Revenue being adjudicated upon by a body within the same Department. It is noteworthy that the learned the Adjudicating Authority works under a tight time-frame. It has to pass its order within 180 days, otherwise the order of provisional attachment passed under Section 5 will cease to have effect and the property under attachment shall stand released by operation of law. The Ld. AA, therefore, does not have the luxury of unlimited time to deal with an OA/OC referred to it. The appellant is well-aware of this fact. Indeed, this very fact appears to be the main motivation behind the appellant in the present case filing a series of Miscellaneous Applications (as many as five)before the Ld. Authority when it is preoccupied with adjudication proceedings under Section 8 of the Act - Appeal dismissed. Prayer that the Ld. AA may be pleased to stay in the proceeding in the matter till such time the coram of the Adjudicating Authority as stipulated under Section 6 (7) of PMLA, 2002 is functional - HELD THAT:- The Hon'ble Bombay High Court in its order dated 18.01.2023 in Abbeys Realcon merely noted the matter before them requires consideration and requested the Ld. Addl. Solicitor General to assist the court. In doing so, it did not lay down any binding precedent - Similarly, the Hon'ble Sikkim High Court in Easter Institute of Integrated Learning [ 2015 (9) TMI 1573 - SIKKIM HIGH COURT] observed that in a case where serious questions of law and fact arise, as in the present case, it is essential that one of the Members of the Bench constituted under Clause (b) of Sub-section 6 of PMLA by the Chairperson of the Adjudicating Authority should be a Judicial Member. [emphasis supplied]. As is evident from the very observation of the Hon'ble High Court, no ratio was laid down in the said case that a Judicial Member must invariably be present and the absence of Judicial Member would as a rule render a decision of the Adjudicating Authority illegal. The decisions of this Appellate Tribunal relied upon by the appellant also do not support him. Moreover, the same would in any case not constitute good precedent anymore in view of subsequent judgments of various High Courts - Appeal dismissed. Seeking supply of 'reasons to believe' as recorded by the concerned officer of the Directorate under Section 17(1) of the PMLA, 2002 - HELD THAT:- Section 17 provides that for the purpose of search and seizure, the Directors or other Officers not below the rank of Deputy Director may proceed for search and seizure based on the information in his possession and has reasons to believe that any person has committed any Act which constitute money laundering and is in possession of any proceeds of crime involved in money laundering etc., the Authorised Officer may enter and search the building, place, vessel, vehicle etc. and thereupon take further action as given under Section 17(1) of the Act which includes seizure of records and property. However, it would remain in operation only for a period of thirty days unless the officer file an application requesting retention of such records and property before the Adjudicating Authority and at this stage the Adjudicating Authority would serve a show cause notice alongwith the reasons to believe to the parties effected by it. The Adjudicating Authority would supply complete material to the parties concern to seek their response to show cause notice where the reasons to believe recorded by the Adjudicating Authority are also supplied thus the stage prior to the initiation of Section 8(1) of the Act of 2002 is administrative in nature and the parties are not affected indefinitely unless the order is confirmed by the Adjudicating Authority but before confirmation, an opportunity of hearing is provided after disclosure of material and reasons to believe. The reasons to believe recorded under Section 17 were not required to be provided to the appellant - Appeal dismissed. All the appeals are dismissed.
-
Service Tax
-
2024 (9) TMI 702
Applicability of the exemption provisions under the N/N. 30/2012 dated 20 June 2012 - CENVAT Credit - HELD THAT:- The appeal failed to raise any dispute in respect of the findings which were rendered by the Commissioner with regard to the applicability of Clause (e) of the Notification 30/2012 dated 20 June 2012. The appeal fails to place on the record any material which may have established that the findings returned with respect to the provision of services to body corporates was either arbitrary or perverse. There are no ground to entertain the instant appeal. The same fails and shall stand dismissed.
-
2024 (9) TMI 701
Recovery of service tax under section 73 (2) of the Finance Act, 1994 read with section 174 of the Central Goods and Service Tax Act, 2017 with interest and penalty - activity of repair and maintenance, if provided along with material, merits classification under works contract service and the amount on which VAT has been discharged by the assessee has to be excluded from the value of works contract to ascertain the value of taxable services provided by the assessee or not - invocation of Extended period of limitation. HELD THAT:- The decision of the Tribunal in M/S. SAMTECH INDUSTRIES AND OTHERS VERSUS CCE. KANPUR AND OTHERS [ 2014 (4) TMI 995 - CESTAT NEW DELHI] clearly holds that when invoices are issued showing the value of the goods used and the service charges separately, service tax would be chargeable only on the service/labour charges and the value of goods used for repair would not be includable in the assessable value of the service. The Commissioner was not justified in including the value of spare parts in the assessable value of service, as the contract was a composite contract involving supply of goods (spare parts and consumer bills) as well as provision of services (repair and maintenance). It needs to be noted that service tax was not leviable on composite contracts up to 01.07.2012 and the period involved in this appeal is from April 2009 to June 2012. Such being the position, the impugned order dated 30.07.2018 passed by the Commissioner cannot be sustained. The impugned order dated 30.07.2018 is, accordingly, set aside - Appeal allowed.
-
2024 (9) TMI 700
Levy of service tax - reverse charge mechansim - rental amount paid to the directors of the company on account of renting of immovable property - levy of penalty u/s 78 of FA - misinterpretation of provisions of Entry 5A of Notification No.30/2012-ST dated 20.06.2012, as amended, by Notification No.45/2012-ST dated 07.08.2012 - whether the service tax can be levied under the RCM on the appellants, when the service of renting of immovable property provided by the directors was in their individual capacity and not as the director of the company? HELD THAT:- In the present case, the payment made by the company to the directors is in the nature of office rent as shown in the audited Profit Loss Account. This clearly relates to the fact that the service provided by the director is not as directors as renting of the building on rent does not fall under the director s service. It is a matter of chance that the renting service provided by a person happens to be a director. If the liability towards the services rendered by a person in his individual capacity is fastened on the company where he is a director, it would lead to extending the unwarranted liability on the company. The intention of the government is not that any activity/service which is performed by the director, the company would be liable to pay the tax. This Tribunal in the case of Cords Cable Industries Ltd. [ 2023 (4) TMI 441 - CESTAT NEW DELHI ] considered the issue of payment of service tax under RCM and observed that the directors in that case were providing service of renting of immovable property not as directors of the appellant company but in their individual capacity as owners of the premises and as the directors of the appellant and in such a situation, the appellant could not have been asked to pay the service tax on RCM - there are no good reason to differ from the view taken by the Co-ordinate Bench in M/s.Cords Cable Industries Ltd. Following the said decision, it is held that the appellant company cannot be saddled with the liability of service tax under RCM when the service of renting of immovable property has been provided not in the capacity of the directors of the company but in their personal capacity. Imposition of penalty under Section 78 of the Act - HELD THAT:- The amount of cenvat credit taken by the appellant on the exempted services was in contravention of the provisions of the Finance Act and the Rules made thereunder with intent to evade payment of duty. The Authorities below are correct in observing that the amount of cenvat credit was reversed only after the audit has taken place - instead of directing the imposition of mandatory penalty of 100%, the Adjudicating Authority had granted liberty to the appellant by directing that the imposition of penalty shall be limited only to 25%, subject to the condition that such reduced penalty is also paid within 30 days of the date of receipt of the order. Hence no interference is called for in imposition of penalty. Accordingly, there are no error in the imposition of penalty. The appellant is also required to pay the balance amount of interest from the sum of Rs.51,088/- as they had deposited only Rs.12,469/-. It is a settled law that the levy of interest is automatic and hence, the appellant is liable to pay the same under Section 75 of the Act. The impugned order is partly set aside - The appeal is accordingly allowed partially.
-
2024 (9) TMI 699
Exemption from service tax - repair maintenance of electrical transformers - N/N. 11/2010-S.T. dated 27.02.2010 - HELD THAT:- The appellant did not file any written reply to the show cause notice nor did he appear for personal hearings, as recorded by the original adjudicating authority. It is also noted that the appellant filed an appeal before the Commissioner (Appeals) but failed to appear when personal hearings were fixed, as has been recorded in para 4 of the Order-in-Appeal dated 31.01.2018. The impugned order has noted that the appellant has not been able to establish that appropriate VAT was paid on the materials used in the provision of such service. Further, it has been alleged by the Department that the appellant has artificially divided the amounts in their bills, for which there is no explanation by the appellant. There has been no submission by the appellant regarding their liability to pay service tax on GTA. These are questions of fact, which needs to be examined at the original level. This case needs to be remanded to the original adjudicating authority to examine the allegations afresh. The appellant is also directed to ensure that a detailed response to the allegations be filed before the original authority, along with all supporting documents such as bills, VAT returns, invoices, Contract, Work Orders etc and other relevant documents to buttress their case. Appeal allowed by way of remand.
-
2024 (9) TMI 698
Classification of services - Business Auxiliary Service or under Tour Operator Service? - Appellant is engaged in multi-level sales promotion activities and has entered into contracts with various corporate clients whereby it sold vouchers in the form of gift, free holiday and free airline ticket to corporate clients against a consideration - interest and penalty - Extended period of limitation. HELD THAT:- In the present case, the Appellant has entered into contracts with various corporate clients whereby it sold vouchers in the form of gift, free holiday and free airline ticket to corporate clients against a consideration and on that consideration, it is discharging the service tax liability under the head Tour Operator after availing abatement under N/N. 1/2006-ST dt. 01.03.2006 amended vide Notification No. 38/2007-ST dt. 23.08.2007. It is found that in the impugned order, the demand has been confirmed under the head Business Auxiliary Service for providing vouchers to the customers of corporate clients on their behalf, but for complying under the said clause, the service provider should render the services to the third party which would ordinarily be rendered by the client i.e. the service provider steps into the shoes of the client; whereas, in the instant case, the corporate clients are engaged in manufacture, sale and trading of goods and not engaged in providing Tour Operator Service i.e. in the business of planning, scheduling, organizing or arranging tours, therefore, it cannot be said that the Appellant is providing Tour Operator Service on behalf of the corporate clients when the corporate clients itself are not Tour Operators. The corporate clients were immune from all costs, actions, claims, suits, proceeding etc and hence, the corporate clients were not responsible for the services provided by the Appellant to the customers. Further, the customers of corporate clients are not bound to avail the benefits under vouchers by virtue of the agreement between the Appellant and the corporate clients. Consensus-ad-idem is required between the Appellant and the customers - the Appellant directly provided the services to the customers without any intervention of the corporate clients and the Appellant is rendering the services under the head of Tour Operator and has correctly availed the abatement under the N/N. 1/2006-ST dt. 01.03.2006 amended vide 38/2007-ST dt. 23.08.2007 after fulfilling the conditions as prescribed in these notifications. Extended period of limitation - HELD THAT:- The show cause notice invoking extended period of limitation has been issued solely on the basis of audit report without further investigation into the matter. It has been consistently held by the Courts that for invoking the extended period of limitation, intention to evade tax should be established, whereas in the present case, the Appellant has been regularly filing ST-3 returns wherein the abatement availed by the Appellant is duly declared and the department was well aware about the Appellant s activities; therefore, extended period of limitation cannot be invoked. In terms of the proviso to Section 73(1) of the Act, the extended period of limitation is applicable only in cases where service tax has not been levied/paid or has been short levied/short paid or erroneously refunded by reason of fraud or collusion or wilful ms-statement or suppression of facts or contravention of any provisions of the Act or the Rules made thereunder with an intent to evade payment of service tax. Interest and penalty - HELD THAT:- The question of interest and penalty does not arise because the demand of service tax itself is not sustainable. The impugned order is not sustainable in law and is liable to be set aside - Appeal allowed.
-
2024 (9) TMI 697
Interest on amount refunded - amount refunded was pre-deposit or not - relevant date for calculation of interest - HELD THAT:- The issue involved in the present case is no longer res-integra and is squarely covered by the decisions of Hon ble Supreme Court in Ranbaxy laboratories Ltd. [ 2011 (10) TMI 16 - SUPREME COURT] where it was held that ' ever since Section 11BB was inserted in the Act with effect from 26th May 1995, the department has maintained a consistent stand about its interpretation. Explaining the intent, import and the manner in which it is to be implemented, the Circulars clearly state that the relevant date in this regard is the expiry of three months from the date of receipt of the application under Section 11B(1) of the Act.' Undisputedly appellant is entitled to interest on the amounts refunded to him after the dispute was finally determined in their favour by the order of this tribunal. However the interest as per these orders would necessary be governed by the provisions of section 11BB and should be paid after expiry of three months from the date of receipt of the application for refund and not from the date of deposit as has been held by the original authority in the orders dated 09.07.2019 and 18.07.2019. Even if it is held that appellant was entitled to refund of interest as per section 35 FF then also the interest could not have been paid from the date of deposit, in view of the Proviso to section 35FF, which provided that in respect of the amounts deposited prior commencement of Finance (No. 2) Act, 2014 the provisions as contained in erstwhile section 35FF shall apply. Appellant is entitled to interest if any if the refund of the amount deposited was made beyond the period of three months from the date of refund application communicating the order in their favour to the jurisdictional Deputy/ Assistant Commissioner. In the present case the refund applications for refund of amount deposited under protest were allowed and the amounts paid vide order dated 11.06.2019 within a month of the receipt of the application. Thus appellant would not be entitled to any interest as per the section 11BB or Section 35 FF of Central Excise Act, 1944. Appeal dismissed.
-
2024 (9) TMI 696
Amendment in Rule 6 of CCR is retrospective or prospective? - applicability of amendment to the outstanding balance available as on 10.05.2008 or only prospective in respect of entries made in the books of accounts post 10.05.2008 - HELD THAT:- In the instant case, the period of dispute is for the tax pending on such outstanding amounts as reflected in their Books of accounts, immediately after the amendment. Undoubtedly, these were for services received during the period prior to the said amendment, as the payment had not been received. Since, the liability for payment of service tax arises upon receipt of payment towards taxable services, which has admittedly not been received by the appellant, there was no scope or occasion to discharge the service tax liability in terms of Rule 6 ibid as it had existed at the relevant disputed period. The confirmation of service tax and interest liability in the impugned order that amendment of Rule 6 ibid will have retrospective effect defeats the legislative intent and also against the principles of legal jurisprudence. It is also noted that payment of service tax in respect of transactions between associated enterprises on the basis of book entry was introduced only w.e.f. 10.05.2008 by incorporating the Explanation clauses in both Section 67 of the Finance Act, 1994 and Rule 6 ibid. The service tax statute holding the field at the relevant point of time did not contain any provision for demand of service tax by the authorities, prior to realization of the value of taxable services - N/N. 19/2008 introducing Explanation to Rule 6 ibid, nowhere specifies that the same will have retrospective application to deal with the past transactions. The service tax demand cannot be confirmed on the service fee not realized during the disputed period from the associate enterprise, even if the same has been reflected in the books of accounts of the appellant as the amount outstanding. There are no merits in the impugned order, and thus, the same is set aside - appeal allowed.
-
2024 (9) TMI 695
Recovery of Cenvat credit with interest and penalty - restriction on Cenvat credit utilization up to 20% on the ground that the appellant was providing taxable as well as exempted services - extended period of limitation. HELD THAT:- As per the appellant, the service rendered by him were not for the purpose of sale or telemarketing and therefore, the same cannot be described as service by a call centre for the purpose of said exemption Notification No. 08/03-ST dated 20.06.2003, this notification exempts the service provided by a call centre from payment of service tax, whereas, the Department it is a call centre service which is exempted service and therefore credit utilization is restricted up to 20%. It is further found that as per the terms of the agreement entered into by the appellant with M/s Spice Communications Limited. The appellant is supplying the customer care service under BAS by providing call support service and it has been held in the case of PHOENIX IT SOLUTIONS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, VISAKHAPATNAM [ 2011 (1) TMI 642 - CESTAT, BANGALORE] wherein it has been held that assessee providing call centre service on behalf of the client would fall under BAS within the purview of Service Tax. In the case of M/S. IBM DAKSH BUSINESS PROCESS SERVICES PRIVATE LTD. VERSUS CCE, DELHI-III [ 2014 (5) TMI 616 - CESTAT NEW DELHI] , it was held that call centre service provided on behalf of the client would fall within the purview of Business Auxiliary Service. Extended period of limitation - HELD THAT:- The affairs of the appellant were in the knowledge of the Department as the Department conducted audit on 16.11.2005 and 08 to 10.01.2007, whereas, the show cause notice was issued on 26.03.2010 after a considerable delay of three years which is beyond the period of limitation - in the case of GOLDEN LAMINATES LTD. VERSUS COLLECTOR OF C. EX., DELHI-III [ 2000 (1) TMI 611 - CEGAT, NEW DELHI] , the Tribunal held that when the facts are already known to the Department, it cannot be alleged that the appellant had suppressed or mis-declared any material facts with intention to wrongly avail the benefit of exemption from duty resulting in evasion of payment of duty. The impugned order is not sustainable in law on merits as well as on limitation - appeal allowed.
-
2024 (9) TMI 694
Refund of service tax paid to the service providers on service received - specified services - services can be considered as wholly consumed within SEZ unit or not - Revenue s contention is that since services related to erection, installation of transmission line for the transmission of power which is generated in the SEZ, the said transmission line is located outside SEZ area - HELD THAT:- It cannot be said that the service was exclusively used in the authorized operation of SEZ. On this, the Revenue cannot be agreed upon and the Learned Commissioner (Appeals) is completely agreed for the reason that for the purpose of generation of electricity and transmission thereon it is very obvious that the transmission line can travel beyond SEZ also but the fact remains that transmission line is used for the transmission of the electricity generated in the SEZ. Therefore, it can be conveniently concluded that the transmission line installed even though outside the SEZ but the same is used for the authorized operation of the SEZ unit. Therefore on this ground Revenue seeking of refund will not be sustainable. As regard other issues that the appellant are operating their business in SEZ as well as in DTA, and the electricity generated in appellant s unit is used for both the operations. Therefore, the Revenue s contention is that the services on which refund under Notification No. 12/2013-ST claimed by appellant is not tenable - all the identical facts has been considered by this Tribunal consecutively in the two judgments and held that on this ground refund cannot be denied - reliance can be placed in ADANI POWER LTD. VERSUS CST AHMEDABAD AND VICE-VERSA [ 2016 (3) TMI 231 - CESTAT AHMEDABAD ]. There is no infirmity in the impugned order of the Commissioner (Appeals) - the impugned order is upheld - Appeal of Revenue dismissed.
-
2024 (9) TMI 693
Classification of service - Manpower Recruitment or Supply Agency Service or not - assisting fire safety service to handle any emergency arising at the client s premises and to maintain fire and safety equipments in working condition - HELD THAT:- The annual contract was for assisting fire fighting and to handle any emergency arising due to fire incidence in the complex of M/s. Chambal Fertilizers and Chemicals Limited and to maintain fire safety equipments in healthy and working condition and for this purpose, the appellant are being paid an amount of Rs. 1,63,000/- per month. In the terms of contract, it is the responsibility that appellant to make statutory monthly payment like PF, ECI etc. for his employees and the receipt of the same need to be forwarded to the unit entering into the contract for fire safety with the appellant. From the work order mentioned, there is no contract for providing man power and the same is for specific purpose for fire fighting and to handle any emergent situation as well as for maintenance and keeping the fire fighting equipments in good condition. The activity undertaken by the appellant does not fall under the category of Manpower Recruitment or Supply Agency Service. The impugned order-in-appeal is not sustainable - appeal allowed.
-
Central Excise
-
2024 (9) TMI 692
Rebate of excise duty on materials used in the manufacture of goods - Rule 18 of the Central Excise Rules, 2002 - HELD THAT:- In the instant case, admittedly there is no dispute that there is failure on the part of the petitioner to file the declaration and Form ARE-2. However, on the facts of the present case there is no dispute that admittedly the buses have been exported, foreign exchange has been received, etc. Petitioner has made a claim of rebate only qua excise duty on chassis which bears a number and the said number of chassis is correlated with the invoice received by petitioner from Volvo India and the export invoices of buses exported by petitioner. Petitioner has demonstrated this by way of sample copies of purchase invoice of chassis and commercial invoice raised by petitioner on its customers. The procedure for submitting input-output ratio is inconsequential in the facts of the present case since the claim of the petitioner is only qua excise duty paid on chassis purchased and used in the manufacture of buses which are exported. There is no dispute that petitioner has to comply with the conditions like export of goods, receipt of foreign exchange, etc. which Respondents are entitled to verify. Also it is important to note that in the facts of the present case the claim of rebate is made qua chassis on which excise duty is paid and each one of the chassis can be used to manufacture only one bus. The order passed by Respondent No. 2, revisional authority, dated 15th September 2020, and Order-in-Appeal dated 31st December 2013, and Order in Original dated 15th May 2012, is hereby quashed and set aside - Respondent No.4 is directed to consider the application dated 8th December 2011 made by petitioner for claim of rebate of Rs.42,02,638/- on its merits without rejecting the same on the ground that declaration and input-output ratio have not been filed - petition disposed off.
-
2024 (9) TMI 691
Area Based Exemption - whether the respondent M/s Paraj Exim, who had purchased a unit from M/s Om Sai Motor Industries, Rudrapur was availing the benefit of exemption under the N/N. 50/2003-CE dated 10.06.2003, when they had taken over the unit from M/s Om Sai Motor Industries, Rudrapur on 02.11.2015? - HELD THAT:- The factual report given by the Superintendent was that the gold and silver unit was availing the benefit of exemption Notification when it was transferred by M/s Om Sai Motor Industries. Since it was only for verification of this fact, and this report has been given by the Superintendent, and the appeal has been rightly dismissed on 22.08.2022. The Revenue has come up in appeal against the above said order. The factual aspect has attained finality, as the case had only been remanded to verify the factual aspect whether before the transfer of unit to the respondent, it was availing the benefit of area based exemption. Once this finding of fact is concluded till Tribunal that when it was transferred to Om Sai Motor Industries in the year 2015, they were already availing the benefit of exemption, hence the same benefit cannot be denied to the respondent. The learned CESTAT has also referred to the CBEC Circular No. 960/03/2012 dated 17.02.2012, whereby change of ownership or change of the factory premises does not debar the unit to avail the area based exemption. Since the unit was already availing the benefit of exemption when it was transferred to the respondent, the benefit of exemption was rightly assessed by the learned CESTAT in its order dated 08.01.2018. This Court does not find any merit in the present central excise appeal - Appeal dismissed.
-
2024 (9) TMI 690
Determination of assessable value of excisable goods for the purpose of charging Excise Duty - inclusion of freight handling charges calculated separately and shown in the sale invoice in the assessable value - HELD THAT:- The issue in the present case is no longer res integra as decided in LUBI SUBMERSIBLES LIMITED VERSUS COMMISSIONER OF C.E. -AHMEDABAD-II AND LUBI INDUSTRIES LLP VERSUS COMMISSIONER OF C.E. -AHMEDABAD-II [ 2024 (5) TMI 810 - CESTAT AHMEDABAD] where it was held that 'in the present cases the handling charges is not includible in the assessable value of the excisable goods.' In view of the above decision in the appellant s own case the issue in the present case is no longer res integra. Therefore, the demand on the freight handling charges is not sustainable - the impugned order is set aside - appeal allowed.
-
2024 (9) TMI 689
Classification of goods - Activated Earth or Washed Clay/BLEACH-9 - to be classified under chapter sub heading No. 25.05 claiming NIL rate of duty or under chapter sub heading 38.02 of the first schedule to the Central Excise Tariff Act, 1985 - HELD THAT:- The adjudicating authority has reached the conclusion that the goods manufacture by the respondent assessee, as per the technical opinion given by M. M. Shah of M/s. Vaibhav Environ Consultant as well as by Dr. Chandrasekharam, IIT Mumbai vide its letter dated 21st October, 2007, wherein it has been opined that Bleach-9 is also raw clay and not Activated Clay / Earth. It has been mentioned that the clay washed with water and dried is not termed as Activated Clay and therefore the properties of the raw clay washed with water will not have different chemical parameters and therefore shall remains same as that of the natural clay. The same opinion has been given by Shri M. M. Shah of M/s. Vaibhav Enviro Consultant dated 22nd October, 2007. The department has not adduced any evidence to contradict the findings given the above two reports which has formed the basis of adjudicating authority to decide classification of that the product Bleach-9 under Central Excise Tariff heading 25.05. Thus, no fresh evidence has been adduced by the department to challenge the findings given in the impugned order-in-original as well as order-in-appeal - there are no merit in the appeal of the department - appeal dismissed.
-
Indian Laws
-
2024 (9) TMI 688
Seeking appointment of an arbitrator for the adjudication of disputes and claims - Section 11(6) read with Section 11(12)(a) of the Arbitration Conciliation Act, 1996 - whether the application of the petitioner for the appointment of an arbitrator deserves to be allowed? - HELD THAT:- In a recent decision in SBI GENERAL INSURANCE CO. LTD. VERSUS KRISH SPINNING [ 2024 (9) TMI 606 - SUPREME COURT] , it was observed that the arbitral tribunal is the preferred first authority to look into the questions of arbitrability and jurisdiction, and the courts at the referral stage should not venture into contested questions involving complex facts. The respondents have raised a number of objections against the present petition, however, none of the objections raised question or deny the existence of the arbitration agreement under which the arbitration has been invoked by the petitioner in the present case. Thus, the requirement of prima facie existence of an arbitration agreement, as stipulated under Section 11 of the Act, 1996, is satisfied - Once the arbitral tribunal is constituted, it shall be open for the respondents to raise all the available objections in law, and it is only after (and if) the preliminary objections are considered and rejected by the tribunal that it shall proceed to adjudicate the claims of the petitioner. Shri Justice Mohit S. Shah, former Chief Justice of the High Court of Judicature at Bombay is appointed to act as the sole arbitrator. The fees of the arbitrator including other modalities shall be fixed in consultation with the parties - petition allowed.
-
2024 (9) TMI 687
Dismissal of application of the appellant seeking bail - giving illegal gratification to the BSF personnel - offence punishable under Sections109,120B read with Section 420 of the Indian Penal Code, 1860 and Sections-7,9,11,12,13(2),13(1)(d) of the Prevention of Corruption Act, 1988 - HELD THAT:- There are serious allegations against the appellant-accused, however he is in custody since 11.08.2022 (approximately two years till today) and the trial is at the stage of submission of documents of the charge-sheet under Section-207 of the Cr.P.C. It also appears that the papers of the charge-sheet are very voluminous and some of them are in Bengali language, for which, the Special Court has directed the respondent-CBI to get them translated. The learned ASG, Mr. S.V. Raju, has assured this Court that all the documents shall be translated at the earliest, preferably within 45 days from today. However, from the voluminous record of the charge-sheet, it appears that the trial will take long time. It is also not disputed that the other co-accused, more particularly, the accused no.2 Md. Enamul Haque, has been released on bail by this Court vide Order dated 24.01.2022. The appellant shall be released on bail subject to the fulfilment of conditions imposed - bail application allowed.
-
2024 (9) TMI 686
Invocation of writ jurisdiction of this Court - seeking initiation of an appropriate writ against the respondents - legal purport of Clause (33) of the Corporate Guarantee dated 10.08.2016 - HELD THAT:- On a careful perusal of clause (1) to (32) of Corporate Guarantee, it prima facie appears that there is no question of provision for interest, while calculating the aforesaid Corporate Guarantee except to the extent of the amount provided therein. Be that as it may, the NCLT is only seized of the matter and it is competent to decide upon the quantum of the claims that would impact the entire CIRP proceedings, including but not limited to the valuation of the Resolution Plans and the ability of the petitioner to settle the proceedings under Section 12-A of the IBC. The present writ petition is disposed of with direction to the NCLT to decide the preliminary issue as regards applicability of Clause (33) of the Corporate Guarantee dated 10.08.2016 within four weeks of hearing fixed on 22.08.2024 for an effective CIRP proceedings at its end. The petition is disposed off.
|
9911796707
