Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 23, 2023
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Cancellation of GST registration of the petitioner - non-filing of the returns, despite notice - Admittedly, the petitioner did not file returns for a period of six months consecutively and therefore, the authority has no option than to cancel the registration - there are no error of law in the exercise of jurisdiction by the authority in cancelling the registration of the petitioner. - HC
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Cancellation of GST registration of petitioner - SCN did not provide any specific reason as to the alleged fraud - such show cause notices and orders which are not informed by any reasons cannot be sustained, however, tax payers continue to be vexed by such show cause notices and orders that provide no reason, whatsoever. - SCN quashed - Rs. 5000/- to be paid to assessee / petitioner - HC
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Rate of tax on Fruit Pulp manufactured by the petitioner - Effective date of the circular clarifying the issue of rate of GST - since the Circular reads to the effect that the GST rate including mango pulp was always meant to be at the rate of 12%, the same has to be taken as, for all the times the rate was only 12% so far as mango pulp is concerned. - HC
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Validity of search and seizure - impugned SCN issued beyond the period of six months - The contention that the impugned show cause notice is liable to be set aside because it has not been issued within the period of six months from the date of the order of prohibition is unmerited. The consequence of Sub-section (2) of Section 67 of the CGST Act merely provides that if no notice is issued within the stipulated period, the goods seized are liable to be returned. It does not postulate that the notice, issued after six months, is invalid. - Challenge to the SCN rejected - HC
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Principles of natural justice - assessment made on the basis of a TDS deduction carried out by the Executive Engineer - Petitioner / Assessee failed to prove its case that it has not provided any works contract service - Petition dismissed - HC
Income Tax
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Reopening of assessment - reasons to believe - The reasons as recorded at the highest, can only be termed as “a suspicion subject to a case of fishing inquiry”. Even though the Revenue has a greater latitude in re-opening an assessment where the return of income has been processed u/s 143(1) of the Act, even in such cases the re-opening of an assessment can only be done if there is reason to believe that income chargeable to tax has escaped assessment. - HC
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Exemptions u/s.11 and 12 - charitable activity u/s 2(15) - General Public Utility (GPU) - Statutory Corporations, Boards, Authorities, Commissions, etc. (by whatsoever names called) in the housing development, town planning, industrial development sectors are involved in the advancement of objects of general public utility, therefore are entitled to be considered as charities in the GPU categories. - They can claim benefit of exemption - HC
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Nature of expenses - payment of royalty - acquisition of intangible asset - the appellate authorities, while deleting the disallowances made by the assessing officer, have rightly treated the royalty payment as revenue expenditure. Once the payment of royalty is treated as revenue expenditure, automatically, it goes without saying that the assessees would be entitled to 100% deduction. - HC
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TDS u/s 195 - Payment of royalty - disallowance u/s 40(a)(i) - What the appellant gets is only a copyrighted article to use the product for its internal business purpose and not any right in any copyright to exploit the same for commercial reasons so as to constitute the payment received in consideration thereof as royalty in terms of Article 13 of the India UK DTAA. - No TDS liability - AT
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Addition on account of business income based on the unclaimed TDS in the 26AS of the assessee - Taxability of income comes from its accruing and arising in the hands of a person - TDS was accounted for in the partnership firm - there was no fault of the assessee when some other party had wrongly deducted tax at source on any transaction by quoting the PAN of the assessee by mistake - AT
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Eligibility to claim deduction u/s 32AC - the extraction of minerals from beach sand involve change in non-living physical object / article into a new and distinct object / article having different name and use. Thus, the same would amount to manufacture. - Benefit of deduction cannot be denied, moreover by invoking revision proceedings u/s 263 - AT
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Deemed dividend u/s 2(22)(e) - assessee has a strategic investment in one of the group concerns in which the assessee held 17.20% shareholding - The benefit is not individual but solely on business exigency. The deeming provision is always under the control of express provision. It is pertinent to observe that the benefit of expressed provision is covered in deeming provision or not. Considering the factual matrix, the assessee did not get any direct benefit of the payment made by GAPL and the amount was returned back to party. - Additions deleted - AT
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Validity assessment order - DRP issued directions (order) without quoting DIN - the argument advanced on behalf the revenue, that recourse can be taken to Section 292B of the Act, is untenable, having regard to the phraseology used in paragraph 4 of the circular 19/2019. - final assessment order quashed - AT
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Levy of penalty u/s 271D - contravention of provision of section 269SS - Since the cash was accepted by the assessee company on working days, the argument of the assessee company that these loans were taken for emergency payments cannot be accepted. - Acceptance of cash by the assessee company was not necessitated by any emergency/imminent circumstances. - Penalty confirmed - AT
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Addition of amounts written off - payment of service tax to its distributors - when the assessee company has paid amount to its distributors who had actually paid the service tax amount to the exchequer is a kind of adhoc reimbursement of expenditure or liability of service tax. - Such amount was write off by the assessee - CIT(A) was right in concluding that the payment was made by the appellant are directly related to the business activity of the assessee - claim cannot be denied - AT
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Additions u/s 41 (deemed incomed) - waiver of loan - Floating Rate Notes - To be treated as loan for business purpose or for purchase of capital asset - AO has mentioned in the assessment order that since the Loan was utilized to purchase the land, waiver of loan is business income. We do not agree with this proposition of the AO. - it is not taxable under section 28(i) - AT
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Penalty u/s 271C - TDS u/s 194H - It is undisputed fact that this is debatable issue having two possible views and the assessee was of the view that it was not under obligation to deduct tax at source as per the provisions of chapter XVII of Income Tax and particularly u/s 194H of the tax. - Penalty levied by the AO u/s 271C is not justified - AT
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Penalty proceedings u/s. 271E - conversion of loan into redeemable convertible bonds and therefore, it was observed that the repayment of loan is other than the modes prescribed u/s. 269T - the assessment which already stand completed and loans wherein it has been accepted in their hands prior to the amalgamation, then we do not find any reason or occasion as to why such loans are to be doubted in the hands of the amalgamated company and specifically in the proceedings u/s. 271E. - No penalty - AT
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Revision u/s 263 - calculation of capital gains - error in computing Cost of Acquisition - Assessee has made a claim which is prima facia erroneous. AO has allowed the said erroneous claim. Hence, the Assessment Order is erroneous and prejudicial to the interest of revenue. - AT
Customs
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Levy of penalty on custodian (CFS) - allegation of clandestine removal - the employer cannot be punished for such facts of discretion or extra diligence than prescribed, on the part of employee specially when department did not find anything wrong, when compared to employees of other CFS. - AT
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Confiscation of goods - Difference in actual quantity imported and as per Invoice / Bill of Entry - The importer is responsible for what he has imported and it is not sufficient if he files Bills of Entry corresponding to the documents. The declaration in the Bills of Entry must match with the goods actually imported - there are no infirmity in the confiscation of the imported goods in this case. - AT
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Benefit of exemption from customs duty - conversion from foreign going vessel to coastal vessel - It is the option of the importer to pay duty either in terms of clause (a) of the condition 82 of the notification or in terms of clause (b) Condition 82 of the notification. Ideally the original Adjudicating Authority, should have sought option from the importer and acted accordingly to assess either under Clause (a) of the Condition 82 or Clause (b) of the condition 82 of the Notification 12/2012- Cus dated 17.03.2012. - Matter restored back - AT
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Rejection of claim of interest on refund - the appellant is legally entitled for interest on the refund granted to them after three months from the date of the application i.e. 22.07.2003 till the grant of refund i.e. 25.06.2012 as per the rate of interest as prescribed under the Customs Act, 1962. - AT
Corporate Law
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Refusal of Transmission of shares - Transfer of title in accordance of Will of the deceased, in favor of Daughter - The intimation u/s 56 of the Companies Act was merely about transmission of said shares and not about execution Will. - It was not only undesirable, but also unlawful for the Company to have refused ‘transmission’ of said shares when other Class-I legal heirs of the Deseased had given explicit ‘no objection’ for transmission of the said shares in favour of claimant - AT
IBC
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Initiation of CIRP - application made on the basis of an Assignment Deed - the Respondent No.1 having clearly stepped into the shoes of SBI and on having acquired the assets under the Assignment Agreement in the capacity of an Asset Reconstruction Company in the manner and procedure laid down by the SARFAESI Act, it had become the deemed lender and therefore entitled to exercise its right to initiate proceedings under Section 7 of IBC. - AT
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Initiation of CIRP - Proxy of Corporate Debtor - two separate entities - whether any admission or communication sent by SNG Developers Ltd. can be considered as being sent by Corporate Debtor SNG Techno Build Pvt. Ltd.? - it would not be proper to draw any inference from such e-mails that SNG Developers Ltd did not possess any authority to communicate on behalf of the Corporate Debtor SNG Techno Build Pvt. Ltd. - AT
Service Tax
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Levy of penalty - the whole case is due to interpretational issue (change of opinion) on the part of the Revenue - it is further found in the facts and circumstances of this case, that the benefit of closure under section 73(3) has been wrongly denied to the appellant assessee, and no show-cause notice was required to be issued. - No penalty - AT
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Refund of service tax paid by mistake - The appellant, who has borne the tax. Admittedly, the appellant have paid the part of tax by challan and part of the tax has been deducted by the Rajasthan Housing Board from their bills, and deposited under RCM. Accordingly, the appellant is entitled to the refund under dispute. - AT
Case Laws:
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GST
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2023 (9) TMI 1004
Imposition of Condition of deposit of Rs. 2 crores upon the petitioners, for the grant of bail - onerous conditions - HELD THAT:- This Court has depracated imposition of such onerous conditions previously- notably in the recent order in SUBHASH CHOUHAN VERSUS UNION OF INDIA ANR. [ 2023 (1) TMI 1168 - SC ORDER ] where it was held that condition directing the appellant to deposit a sum of Rs.70 Lakhs is not liable to be sustained and is hereby set aside. Following the order in Subhash Chouhan vs. Union of India Anr., the condition requiring the petitioner to deposit Rs.2 crores is hereby set aside. The Court is informed that the petitioner had borrowed sums of money and deposited the same. It is open for them to seek withdrawal/ refund of such amounts. They shall, however, comply with the other conditions imposed on them. SLP allowed.
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2023 (9) TMI 1003
Appeal dismissed for non-payment of 25% pre-deposit of the penalty - proviso (1) to sub-Section (6) of Section 107 of CGST Act 2017, read with Section 21 of the UTGST Act, 2017 - HELD THAT:- The mandate of proviso (1) to sub-Section (6) of Section 107 of CGST Act, 2017 and Section 21 of UTGST Act, 2017 is clear and unequivocal and makes the appeal maintainable only if the person filing appeal makes a pre-deposit to the tune of Rs.25% of the penalty with the respondents. It is true that the petitioner herein has instead of depositing the said pre-deposit amount with the respondents has deposited the same in the electronic cash ledger. Since, the requisite amount is already deposited in the electronic cash ledger by the petitioner it would be appropriate and in the interest of justice to permit the respondents to take out and utilize the amount of pre-deposit in the manner, the pre-deposit is utilized. The petitioner, if required, shall facilitate the utilization of the aforesaid amount for the purposes of appropriating it towards the pre-deposit. Petition disposed off.
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2023 (9) TMI 1002
Cancellation of GST registration of the petitioner - non-filing of the returns, despite notice - HELD THAT:- The provisions for cancellation of registration and making payment of the tax due with interest are different. Both the provisions have different scope, purpose and intent. If an assessee fails to make payment of the full GST amount or part thereof, interest is liable to be levied for the delayed payment. Further, if an assessee fails to file the returns for a continuous period of six months, his registration is liable to be cancelled - there are no contradiction in the provisions of Section 50 or Section 29 of the GST Act, 2017. An alternative remedy is available to the petitioner as per the Act and the Rules thereto, which the petitioner should have resorted to within the statutory prescribed limit. Against the order of cancellation of registration, the petitioner ought to have availed the remedy of appeal within a maximum period of three months from the date on which the order is communicated. Admittedly, the petitioner did not file returns for a period of six months consecutively and therefore, the authority has no option than to cancel the registration - there are no error of law in the exercise of jurisdiction by the authority in cancelling the registration of the petitioner. It is made clear that if the petitioner applies for fresh registration, the said application shall be considered in accordance with law, expeditiously - petition dismissed.
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2023 (9) TMI 1001
Cancellation of GST registration of petitioner - registration obtained by means of fraud or not - SCN did not provide any specific reason as to the alleged fraud and it did not provide any clue as to the facts which were allegedly suppressed - HELD THAT:- It is evident that the petitioner had no clue as to why its GST registration was sought to be cancelled. The petitioner s request for providing further specific grounds was not acceded to and no further information was provided to the petitioner. The impugned order does not mention any reason whatsoever for the cancellation of the petitioner s GST registration. It merely states that it is an order for cancellation of registration and is in reference to the show cause notice dated 16.05.2023. It further states that the effective date of the cancellation of the GST registration is 04.05.2018 - this Court has, in a number of decisions, held that such show cause notices and orders which are not informed by any reasons cannot be sustained, however, tax payers continue to be vexed by such show cause notices and orders that provide no reason, whatsoever. Petition allowed albeit with the cost of ₹5,000/-.
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2023 (9) TMI 1000
Recovery proceedings - Section 161 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017 - HELD THAT:- It is an admitted position that pursuant to the impugned order passed on 28.07.2023, the petitioner had filed applications under Section 161 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017, which are pending consideration by the respondent. These Writ Petitions are disposed at the time of admission by directing the respondent to dispose the petitioner applications filed under Section 161 of the TNGST Act all dated 12.08.2023, as expeditiously as possible, preferably, within a period of three months from the date of receipt of a copy of this order.
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2023 (9) TMI 999
Seeking reopening of GST portal or to accept the manual filing of Rectification in amendment in GST Tran-1 - HELD THAT:- The learned counsel for the petitioner would seek liberty to challenge the proceedings dated 04.10.2020 or to file a representation. The writ petition stands disposed of with liberty to the petitioner to either challenge the proceeding dated 09.10.2020 in the manner known to law or to file a representation.
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2023 (9) TMI 998
Absence of proper mechanism of matching of credit note of supplier with the ITC reversal by the recipient - validity of provisions of Section 43 of the CGST Act/RGST Act - HELD THAT:- The validity of the provision is being challenged more on the ground of workability. For the present it is found that in the absence of their being any statutory obligation cast on the respondent to undertake matching exercise, if the petitioner is willing to claim reduction in tax liability, proof of reversal by the recipient is to be provided by the supplier - In the present case, the petitioner has challenged the validity of the provision more on the grounds of difficulty in collecting such certificate / proof from the recipient. Even according to the petitioner he has been able to collect such certificate / proof in some cases. This matter is required to be considered on the next date of hearing - List the matter on 05.10.2023.
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2023 (9) TMI 997
Rate of tax on Fruit Pulp manufactured by the petitioner - Effective date of the circular clarifying the issue of rate of GST - HELD THAT:- From Circular dated 03.08.2022, it was pellucidly mentioned that including mango pulp was always meant to be at the rate of 12% . Considering such mentioning, the Division Bench of this High Court in DR. SANDEEP KUMAR GUPTA FOODS AND INNS LTD VERSUS THE UNION OF INDIA THE STATE OF ANDHRA PRADESH THE DIRECTOR GENERAL OF GOODS AND SERVICE TAX (DGGST) , THE COMMISSIONER OF CENTRAL TAX AND CUSTOMS, THE CHIEF COMMISSIONER OF STATE TAXES DEPARTMENT THE ASSISTANT COMMISSIONER OF SALES TAX, THE DEPUTY COMMISSIONER OF CENTRAL TAXES, [ 2022 (9) TMI 1046 - ANDHRA PRADESH HIGH COURT] , which was also dealing with the case falling prior to the date of Circular, held that the petitioner therein was liable to pay GST on mango pulp at the rate 12% only and passed the order accordingly. It would show, a Division Bench of this High Court has ultimately held that since the Circular reads to the effect that the GST rate including mango pulp was always meant to be at the rate of 12%, the same has to be taken as, for all the times the rate was only 12% so far as mango pulp is concerned. The argument of learned Government Pleader that the Circular is only prospective in nature cannot be accepted. Petition allowed.
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2023 (9) TMI 996
Validity of search and seizure - reason to believe present or not - order of prohibition - impugned SCN issued beyond the period of six months, as contemplated under Sub-section (7) of Section 67 of the CGST - HELD THAT:- Sub-section (2) of Section 67 of the CGST is applicable only when it is not practicable to seize the goods. The contention that it is open for the concerned authorities conducting search, to first pass an order under the first proviso to Sub-section (2) of Section 67 of the CGST and, thereafter, take an informed decision whether to seize the goods, is unmerited. The action for seizure of the goods is required to be predicated on a reason to believe that the goods are liable for confiscation. This condition is required to be satisfied, before passing any order under the proviso to Sub-section (2) of Section 67 of the CGST as well. The first proviso permits the concerned authorities to pass an order prohibiting the tax payer from parting with the goods in cases where goods are liable for seizure, but is not practicable to do so. The order of prohibition is not a stop gap arrangement for the department to take an informed decision whether to seize the goods or not seize the goods. Although Sub-section (7) of Section 67 of the CGST Act refers to seizure of goods under Sub-section (2), it is clear from the scheme of Sub-section (2) of Section 67 of the CGST Act that an order of prohibition, is for all intents and purposes, an order of seizure. However, instead of physically seizing the goods, the taxpayer is directed not to part with or deal with the said goods if it is not practicable to seize the same. The contention that while the concerned authorities are required to return the seized goods if a notice is not issued within a period of six months; the order of prohibition can continue indefinitely, clearly militates against the scheme of Section 67 of the CGST Act. No further orders are required to be passed in this regard as the order of confiscation has already been passed by the concerned authority, and the same is the subject matter of another writ petition filed by the petitioner. The question whether the order of confiscation of goods is valid or is liable to be interfered with by this Court, is a matter to be considered in that petition and no order can be passed in this petition. The contention that the impugned show cause notice is liable to be set aside because it has not been issued within the period of six months from the date of the order of prohibition is unmerited. The consequence of Sub-section (2) of Section 67 of the CGST Act merely provides that if no notice is issued within the stipulated period, the goods seized are liable to be returned. It does not postulate that the notice, issued after six months, is invalid. Thus, the petitioner s challenge to the impugned show cause notice on the ground that it was issued after six months of the order of prohibition is rejected. Petition disposed off.
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2023 (9) TMI 995
Violation of principles of natural justice - specific date not given to the petitioner to appear for a personal hearing - HELD THAT:- Section 75(4) of the CGST Act, 2017 deals with the General Provisions Relating to Determination of Tax . It is mentioned therein that, an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person. The Court is inclined to quash the impugned order and remits the case back to the respondents to pass appropriate orders within a period of six weeks from the date of receipt of a copy of this order - Petition disposed off.
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2023 (9) TMI 994
Fraudulent availment and passing of ineligible Input tax credit to numerous taxpayers - HELD THAT:- Prima facie, the views of the Board regarding Rule 86-A(1)(a) and (c) of the Rules appears to be in order. The provisions do not permit the registered person to avail input tax credit on invoices or debit notes without actually receiving goods or services or both. Only Credit that is validly availed can be utilised for discharging the tax liability. This writ petition disposed off at the time of admission by permitting the petitioner to give a representation to the impugned Notice of Intimation dated 09.05.2023, within a period of 15 days from the date of receipt of a copy of this order.
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2023 (9) TMI 993
Condonation of delay in filing appeal - rejection of appeal filed under sub-Section (1) of Section 107 of the Odisha Goods and Services Tax Act, 2017 - HELD THAT:- Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing the entire tax demand within a period of four weeks from today, the rest of the demand shall remain stayed during the pendency of the writ petition. Application disposed off.
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2023 (9) TMI 992
Contravention of government guidelines - reimbursement of approved GST amount along with simple interest - HELD THAT:- This Court, without expressing any opinion on the merits of the case, disposes of the writ petition directing Opposite Party No.4 to consider the representation filed by the petitioner vide Annexure-4 series, and pass appropriate order in accordance with law taking into account the supplementary agreements under Annexure-3 series, within a period of three months from the date of production of certified copy of this order. Petition disposed off.
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2023 (9) TMI 991
Principles of natural justice - appeal dismissed without referring to the merits of the contentions - assessment made on the basis of a TDS deduction carried out by the Executive Engineer - HELD THAT:- The Appellate Authority specifically speaks of no document having been produced before it at the time of hearing. The mere reference to the screen-shot produced at Page-37 wherein an annexure is shown cannot substantiate the contention that it was the certificate Annexrue-P/8 which was produced before the Appellate Authority. Even otherwise, there can be no reliance placed on Annexure-P/8 certificate for reason of no such certificate being permissible for the purpose of assessment as per the BGST Act and also for the reason that the certificate has been issued in the name of Shiv Shankar Singh and not in the name of R.P. Construction, which is registered as a proprietorship under the BGST Act. Petition dismissed.
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Income Tax
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2023 (9) TMI 1025
Reopening of assessment u/s 147 - reasons to believe - deposit of cash as unexplained money - validity of approval AR argued that the recorded reason of the ld. AO was mechanical manner and without application of mind and further placed that u/s 151, CIT had approved the recorded reason only to mention Yes it is a fit case - HELD THAT:- The approval by the CIT for reopening is not a mere mechanical manner. The judgments which are riled by the assessee are clearly distinguishable and are not in similar factual matrix. We respectfully relied on the case Rakesh Gupta ( 2018 (5) TMI 445 - PUNJAB AND HARYANA HIGH COURT ). In our considered view the notice u/s 148 r.w.s. 151 is not illegal. We are not intervening in the order of the ld. CIT(A) in this ground. Addition based on statement of purchaser - As considering the fact of the case which is fully dependent on the circumstantial evidence created by the assessee related to cash receive from the purchaser. The entire evidence of the assessee clearly depicted that the agreement was duly executed by the purchaser and seller. Later the purchaser denied the agreement and rejected the argument for transfer of cash to the seller. During assessment, the ld. AO only relied on the statement of the purchaser Mr. Umed Singh Debas. No other circumstantial evidence is placed against the assessee by the revenue. AR fully relied on the order of Sh. Pappu Ram Saran, [ 2020 (9) TMI 228 - ITAT JAIPUR] and also relied on the order of Sh. Jagsir Singh[ 2022 (10) TMI 414 - ITAT AMRITSAR] - We also relied on the order of the same bench in case of Jagsir Singhand order of Coordinate Bench of ITAT, Jaipur. DR in argument was not able to adduce any contradictory fact against the submission of the ld. AR. In our considered view, the cash which was deposited in the bank account by the assessee was contemporaneous to sale of agricultural land and supported the agreement of sale. Accordingly, the addition amount is quashed. Assessee appeal allowed.
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2023 (9) TMI 1024
Validity assessment order - DRP issued directions (order) without quoting DIN - Scope of circular 19/2019 issued - whether defect be corrected by taking recourse to Section 292B? - HELD THAT:- DRP s order was manually passed on 29.6.2022 and at that time, no DIN was generated, which was subsequently generated on 30.6.2022. As per circular no.19/2019 dated 14.8.2019 issued by the Central Board of Direct Taxes (CBDT) it has been strictly mentioned that any communication issued by any Income Tax Authority (ITA) without DIN shall be treated as invalid and shall be deemed to never have been issued. Further, in the circular 19/2019 the CBDT has also prescribed some exceptional circumstances wherein the AO can issue any manual communication without DIN but there will be proper recording of reasons in the specified format and prior approval of designated authorities has to be taken before issuance of such communication. Thereafter, such manual communication has to be regularized within 15 days of its issuance. the argument advanced on behalf the revenue, that recourse can be taken to Section 292B of the Act, is untenable, having regard to the phraseology used in paragraph 4 of the circular 19/2019. The object and purpose of the issuance of the 2019 Circular was to create an audit trail. Therefore, the communication relating to assessments, appeals, orders, etc. which find mention in paragraph 2 of the 2019 Circular, without DIN, can have no standing in law, having regard to the provisions of paragraph 4 of the 2019 Circular.
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2023 (9) TMI 1023
Levy of penalty u/s 271D - contravention of provision of section 269SS - assessee company had received a loan in cash from one of its Director and the aforesaid loan was also repaid by the assessee company back to the Director in cash only - As per assessee since all the transactions have been accepted as genuine in the instant set of facts by the assessing officer, no penalty may be imposed - HELD THAT:- We do agree with the proposition that if the assessee is able to prove certain imminent circumstances, which necessitated receipt of money in cash by the assessee company, then, levy of penalty u/s 271D may be considered to be deleted. However, in the instant facts, the assessee has not been able to demonstrate any emergency/imminent circumstances which necessitated the assessee company to receive aforesaid amount in cash from its Director. Since the cash was accepted by the assessee company on working days, the argument of the assessee company that these loans were taken for emergency payments cannot be accepted. Accordingly, looking into instant facts, we are of the considered view that acceptance of cash by the assessee company was not necessitated by any emergency/imminent circumstances. In the recent case of Vasan Healthcare (P.) Ltd. [ 2021 (2) TMI 76 - SC ORDER] dismissed SLP against High Court ruling that where director of assessee-company obtained cash in excess of Rs. 20,000 as loan from a financier and deposited same in cash in bank account of company, merely because director took cash loans from financier and deposited it in current account of assessee-company on very same day and assessee utilized it to pay salaries, rent and EMI commitments, same could not be a ground to be taken as a mitigating factor to escape from rigour of levy of penalty under section 271D. In the case of K.V. George [ 2014 (1) TMI 712 - KERALA HIGH COURT] held that where reasonable cause for receiving loan or deposit in cash was not proved by assessee, levy of penalty under section 271D was to be upheld. Appeal of the assessee is dismissed.
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2023 (9) TMI 1022
Addition of amounts written off - payment of service tax to its distributors - assessee could not prove business expediency of the expenditure under reference - expenditure related to business activity or not? - CIT(A) deleted addition treating the expenditure as revenue expenditure - HELD THAT:- Neither the AO nor the ld CIT DR before us disputed the fact that the assessee made payment of service tax to its distributors who had actually paid the amount of service tax to the exchequer and thus, it was a kind of reimbursement of service tax liability of the assessee to its distributors. It is a fact of common knowledge that the liability of service tax was arose due to application of new taxation of law such as GST and the issue as to whether such liability was to be borne by the distributors of the assessee company or the assessee was not settled up to that point of time. We are in agreement with the contention of assessee, as noted that the ld CIT(A) observed that the payment was shown as loan in the books of account and not claimed as an expenditure on account of service tax in the year of payment since the legality of said liability was not clear and disputed. As to whether the liability has to be borne by the assessee i.e. service receiver or the distributor i.e. service providers. In such a situation when the assessee company has paid amount to its distributors who had actually paid the service tax amount to the exchequer is a kind of adhoc reimbursement of expenditure or liability of service tax. Thus without keeping in view the hardship of the distributors and the liability of the services tax the company decided to write off the amount of loan debited to the respective account of the distributors/ ABOs then the ld CIT(A) was right in concluding that the payment was made by the appellant are directly related to the business activity of the assessee and it was incurred wholly and exclusively for the purpose of business of the assessee due to commercial expediency and the same was allowable as business expenditure. Decided in favour of assessee.
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2023 (9) TMI 1021
Penalty u/s 271C - TDS u/s 194H - assessee appoints the distributors for issuing and sale of pre-paid SIM card and recharge vouchers - proceedings u/s 201 201(A) initiated on failure on the part of the assessee to deduct tax on the amount allowed by the assessee to its distributors/dealers which in the opinion of the department was in the nature of commission - diversified views on issue - HELD THAT:- There is no dispute that whether the transaction of allowing discount/commission to the distributors by the assessee as well as other telecom service providers for sale of SIM Card and pre-paid Recharge Vouchers would fall in the ambit of section 194H or not is a highly debatable issue as there are a series of decisions of this tribunal, as well as various High Courts on this point. Some of the judgment of Hon ble High courts are in favour of the assessee and some are in favour of the revenue upholding that the transactions of sale of SIM Card and Recharge vouchers are in the nature of sale and discount allowed by the assessee to the distributors is in the nature of commission attracting the provision of section 194H and consequently, the assessee was rightly held as deemed to be an assessee is in default as per the provision of section 201 of the Act. Similarly, a good number of other decisions have held that transaction in question does not fall in the ambit of section 194H and thereby the assessee was not liable to deduct TDS at source on these transactions. Apart from a series of decisions of this Tribunal there are divergent views of Hon ble High courts on this issue of liability of the assessee to deduct tax u/s 194H. It is undisputed fact that this is debatable issue having two possible views and the assessee was of the view that it was not under obligation to deduct tax at source as per the provisions of chapter XVII of Income Tax and particularly u/s 194H of the tax. This belief of the assessee is one of the possible view and therefore failure to deduct the tax at source in respect of the discount/commission allowed to the distributors in light of divergent decisions by the different High Courts as well as by the different benches of this Tribunal clearly established the genuine and bona fide decision of the assessee not to deduct tax u/s 194H. Hence there was a reasonable cause as provided u/s 273B of the Act to have not deducted TDS on these transactions. See SINGAPORE AIRLINES LTD. [ 2022 (11) TMI 783 - SUPREME COURT] and GM. (TELECOM), BSNL [ 2014 (2) TMI 800 - ALLAHABAD HIGH COURT] Thus penalty levied by the AO u/s 271C is not justified and liable to be deleted. Decided in favour of assessee.
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2023 (9) TMI 1020
Expenditure towards development activities - Treating the amount as merely diverting to development fund instead of incurring actual expenditure which is being 85% of the development charges - HELD THAT:- It is undisputed fact that the assessee is a non-profit organisation, established for the development of urban areas by implementing the provisions of the Master Plan as per the directions of the Government of Andhra Pradesh. The assessee debited 85% of the Development Charges received to the sinking fund to meet the future formation charges as per the directions given. Coordinate Bench of the Tribunal in the assessee s own case for the A.Y. 2009-10 to 2013-14 on similar issue [ 2022 (10) TMI 120 - ITAT VISAKHAPATNAM ] allowed the appeal of the assessee holding that since the assessee could not expend 85% of the development charges during the relevant assessment year does not warrant disallowance of the same, as the expenditure shall be incurred in future years for the purpose of general public utilities. As we hold that the CIT(A) has rightly deleted the disallowance made by the AO. We are therefore, inclined to uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue.
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2023 (9) TMI 1019
Exemption claimed u/s 11/12 - Claim denied on the ground that the Pr.CIT has cancelled the registration granted u/s 12AA - HELD THAT:- Since the Tribunal by order [ 2020 (9) TMI 196 - ITAT DELHI] cancelled the order of the Ld. PCIT passed on 01/03/2016 and 27/10/2017 withdrawing the registration u/s 12AA the reassessments made by the AO u/s 147/143 on the ground that the PCIT had withdraw the registration u/s 12AA of the Act will not stand and there has to be a fresh assessment in the light of the order of the Tribunal restoring the registration u/s 12AA - Thus, we set aside the order of the Ld. CIT(Appeals) and restore all these assessments to the file of the AO for denovo assessments in the light of the decision of the Tribunal in restoring the registration granted to the assessee u/s 12AA - Appeals of the assessee are allowed for statistical purpose.
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2023 (9) TMI 1018
Penalty proceedings u/s. 271E - loan take by erstwhile amalgamating company as accommodation entries - conversion of loan into redeemable convertible bonds and therefore, it was observed that the repayment of loan is other than the modes prescribed u/s. 269T - edifice for levy of penalty is based on reasoning that earlier loan take by erstwhile amalgamating company who had taken loan from very same lender companies which was found to be involved in some kind of accommodation entries are bogus or non-genuine - As per revenue since these loans were bogus, therefore, conversion of this loan into convertible debentures in this year should be subjected to levy of penalty HELD THAT:- It is not a case that any violation on account of section 269T has been found in the cases of those erstwhile companies has been found. What is being sought to be added in the hands of the assessee company is addition of cash credit u/s 68 on account of loans taken in the earlier years by the erstwhile amalgamating companies, in the garb of penalty u/s. 271E for converting bogus loan into redeemable bonds in this year. If loan taken in earlier years itself is being treated as bogus or non-genuine, which according to CIT (A) was liable to be taxed as non-genuine, then how penalty is leviable u/s. 271E in this year when it is being treated as repaid in the opinion of CIT (A). Again the question is how a loan taken in earlier years by erstwhile companies which have been amalgamated in the assessee after this assessment year, can a conversion of bond / debenture be treated as repayment of loan. This is completely outlandish and inexplicable reason beyond any legal parlance or any binding judicial precedence. All those observations made by CIT (A) on basis of some search or enquiry in the case of Crest Topworth Group where it was alleged that certain lending companies controlled by it has given loans to erstwhile companies, i.e., amalgamating companies is wholly irrelevant while dealing with the issue of levy of penalty u/s. 271E which is very specific to the conditions given in Section 269T which envisages that repayment of loan otherwise than banking channels. The amalgamation by the Hon ble Calcutta High Court from 31/03/2014; all the four legal entities have filed the return of income and assessments were completed in their hands. Therefore, the assessment which already stand completed and loans wherein it has been accepted in their hands prior to the amalgamation, then we do not find any reason or occasion as to why such loans are to be doubted in the hands of the amalgamated company and specifically in the proceedings u/s. 271E. Decided in favour of assessee.
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2023 (9) TMI 1017
Revision u/s 263 - as per CIT AO not considered issue of sale of immoveable property and calculation of capital gains properly - error in computing Cost of Acquisition - HELD THAT:- In the case under consideration , the asset sold is the plot number 113/15+16/1 along with the hotel standing on it, therefore, the cost of acquisition of the said plot number 113/15+16/1 along with the Hotel needs to be considered as Cost of Acquisition for the purpose of Section 48. For the purpose of section 48, the other two plots having Survey number 113/15+16/2 and 113/15+16/3 Shirdi have no relation to the Asset Sold and hence no relation to the cost of acquisition of the asset sold. Therefore, the pleading of Ld.AR that the plots number 113/15 + 16/2 113/15 + 16/3 have been acquired by Government Authorities have no relevance to the calculation of capital gain on sale of plot number 113/15 + 16/1 Hotel. Assessee in the computation of Capital gain considered total value as mentioned in the Sale Deed dated 9/2/2009 vide which the assessee along with two persons had purchased three commercial NA plots having Survey number 113/15+16/1, 113/15+16/2 and 113/15+16/3 Shirdi along with constructed Hotel. The said sale deed dated 9/2/2009 mentions Rs. 4,00,00,000/- as consideration paid for acquiring three commercial NA plots having Survey number 113/15+16/1, 113/15+16/2 and 113/15+16/3 Shirdi along with the Constructed Hotel. Thus, the consideration Rs. 4,00,00,000/- contains some part paid for two plots 113/15+16/2 and 113/15+16/3. The assessee is not eligible to claim deduction for the amount paid for acquiring the two plots 113/15+16/2 and 113/15+16/3 while calculating Capital Gain for Sale of plot number 113/15+16/1 along with the Hotel. AO has not looked into it. Therefore, qua calculation of Capital Gain the Assessment Order is erroneous and prejudicial to the interest of Revenue. Assessee has made a claim which is prima facia erroneous. AO has allowed the said erroneous claim. Hence, the Assessment Order is erroneous and prejudicial to the interest of revenue. This is not the case where two views are possible. Therefore, the Pr.CIT was right in invoking jurisdiction u/s. 263. Therefore, the order u/s. 263 is upheld. Decided against assessee.
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2023 (9) TMI 1016
Additions u/s 41 r.w.s 28(i) - Deemed income - waiver of loan - Floating Rate Notes - To be treated as loan for business purpose or for purchase of capital asset - AO held that the amount of waiver of loan was taxable under section 28(i) and 28(iv) and 41(1) - Whether Commissioner of income-tax (Appeals) has erred is not appreciating that floating Rates notes is a loan raised by the assessee for trading purpose and waiver thereof is taxable? - HELD THAT:- The facts of the present case are identical to the facts in the case of CIT Vs. Mahindra Mahindra [ 2018 (5) TMI 358 - SUPREME COURT] . In the case under consideration, the assessee had issued FRN. The FRNs are debt instruments carrying interest as mentioned in the subscription agreement. However, these FRN s were redeemed at a value less than the Face Value. Thus, what assessee had done by issuing the FRN was that it had raised a loan. Since these FRNs were cash receipts it is held that the amount is not taxable u/s 28(iv) and 41(1) - AO has also invoked section 28(i) to tax the amount - However, assessee is not in the business of lending and borrowing. Assessee is in the business of construction, therefore, waiver of loan amount is not business income of the assessee. AO has mentioned in the assessment order that since the Loan was utilized to purchase the land, waiver of loan is business income. We do not agree with this proposition of the AO. We ask simple question to ourselves, is the repayment of loan allowed as business deduction? the answer is obvious no, similarly the waiver of Loan is also not business income taxable u/s 28(i) of the Act. Hence, it is not taxable under section 28(i) of the Act. Grounds of appeal raised by the Revenue are dismissed.
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2023 (9) TMI 1015
Income deemed to accrue or arise in India - profit attributed to fixed place PE - HELD THAT:- As decided in assessee own case [ 2022 (7) TMI 1365 - ITAT DELHI] when the transaction between the assessee and its Indian AE is found to be at arm s length, no further attribution of profit can be made to the dependent agent PE in India . Also see HONDA MOTOR CO. LTD, JAPAN, [ 2018 (5) TMI 265 - SUPREME COURT] - Decided in favour of assessee. -
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2023 (9) TMI 990
Foreign Exchange Fluctuation Loss on External Commercial Borrowings (ECB) loans taken by assessee mainly for purpose of purchasing capital goods - disallowing market to Marked Loss (MTM Loss) on foreign currency swaps while computing income u/s. 115JB - deduction claimed u/s. 10B of Income Tax Act, while computing income from eligible unit under Chapter IV of Income Tax Act - HC held as not disputed by the revenue that as against the order passed u/s 263, the revenue was in appeal before this Court in the case Himadri Chemicals and Industries Ltd [ 2022 (7) TMI 1463 - CALCUTTA HIGH COURT] and the same was dismissed by judgment present appeal cannot be independently pursued by the revenue -HELD THAT:- There is delay of 185 days in filing the special leave petition. Nevertheless, we have heard learned counsel for the petitioner on merits. Delay condoned. We do not find any infirmity in the impugned order. The special leave petition is dismissed.
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2023 (9) TMI 989
Prosecution Proceedings u/s 276CC and 276C(2) - non furnishing the return and paying the tax on time - Presumption as to culpable mental state - Petitioner/ assessee contend that the petitioner on his own volition had filed his return for the assessment year 2013-14, albeit delayed return, well before the assessment order along with the payable tax. Yet the department has accorded sanction for prosecution of the assessee with the observation that there is a statutory presumption against him under Section 278E of the IT Act. As submitted that there is no mens rea/ intention to evade tax as the return and the payable tax with interest, was paid well before the assessment order and the return furnished by the assessee, was also accepted by the assessing officer. Issue notice, returnable in four weeks.
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2023 (9) TMI 988
Reopening of assessment - reasons to believe - Power of court to investigate reopening - reasons to believe or suspicion - HELD THAT:- While the Court cannot investigate into the adequacy or sufficiency of the reasons, which have weighed with the ITO in coming to the belief, the Court can certainly examine whether the reasons are relevant and have a bearing on the matter in regard to which the AO is required to entertain the belief before he can issue notice u/s 148 - If there is no rational or intelligible nexus between the reasons and the belief, the exercise undertaken by the ITO can be interfered with. The reason recorded only indicates that the officer was only wanting to examine the case of assessees with regard to the deposits, that also on the basis of report which he received from another Investigating Officer. Obviously, in such a case, there is no question of the AO having any basis to reasonably entertain the belief that any part of income of the assessee had escaped assessment. Thus, if more details are sought or some verification or examination is proposed, that cannot be a substitute for the reasons and which led the AO to believe that income chargeable to tax has escaped assessment. In the present case, Respondents do not state that income chargeable to tax has escaped assessment. All that the Revenue desires is to examine certain details pertaining to information that it received from another AO. That is also not founded on the belief that any income, which is chargeable to tax, has escaped assessment and hence, such verification is necessary. That belief is not recorded which alone would enable the AO to proceed. The reasons must be founded on the satisfaction of AO that income chargeable to tax has escaped assessment. Once that is not to be found, then the impugned notice cannot be sustained. The reasons as recorded at the highest, can only be termed as a suspicion subject to a case of fishing inquiry . Even though the Revenue has a greater latitude in re-opening an assessment where the return of income has been processed u/s 143(1) of the Act, even in such cases the re-opening of an assessment can only be done if there is reason to believe that income chargeable to tax has escaped assessment. The reasons which have been recorded, could never lead a prudent person to form an opinion that income had escaped assessment within the meaning of Section 147 - Decided in favour of assessee.
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2023 (9) TMI 987
Reopening of assessment u/s 147 - Effect of Annulment of the assessment - HELD THAT:- We had expressed a prime facie view that the appeal was not maintainable. We had also indicated that the CIT(A) had wide powers, whereby, if he was convinced of the case set up by the assessee, he could annul the assessment order, which would include the power to set it aside. Annulment of the assessment order would lead to its cancellation. The assessment order would cease to exist, relegating parties to the position obtaining before the order was passed. Although Mr Khan contends to the contrary, we are not able to accept his submission that the CIT(A) cannot nullify and/or set aside the assessment order.The writ petition is, accordingly, closed. Liberty, however, is given to the petitioner to take recourse to an appropriate statutory remedy.
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2023 (9) TMI 986
Exemptions u/s.11 and 12 - charitable activity u/s 2(15) - As per revenue assessee is involved in widespread commercial activities in nature of business and the activity of the assessee is covered under proviso to section 2(15) - HELD THAT:- It is not in dispute that the issue has now been settled in the case of Ahmedabad Urban Development Authority [ 2022 (10) TMI 948 - SUPREME COURT] fact that bodies which carry on statutory functions whose income was eligible to be considered for exemption under Section 10(20A) ceased to enjoy that benefit after deletion of that provision w.e.f. 01.04.2003, does not ipso facto preclude their claim for consideration for benefit as GPU category charities, under Section 11 read with Section 2(15) of the Act. Statutory Corporations, Boards, Authorities, Commissions, etc. (by whatsoever names called) in the housing development, town planning, industrial development sectors are involved in the advancement of objects of general public utility, therefore are entitled to be considered as charities in the GPU categories. The determinative tests to consider when determining whether such statutory bodies, boards, authorities, corporations, autonomous or self-governing government sponsored bodies, are GPU category charities - As long as the concerned statutory body, corporation, authority, etc. while actually furthering a GPU object, carries out activities that entail some trade, commerce or business, which generates profit (i.e., amounts that are significantly higher than the cost), and the quantum of such receipts are within the prescribed limit (20% as mandated by the second proviso to Section 2(15)) the concerned statutory or government organisations can be characterized as GPU charities. It goes without saying that the other conditions imposed by the seventh proviso to Section 10(23C) and by Section 11 have to necessarily be fulfilled. In the course of its functioning it collects fees, or any consideration that merely cover its expenditure (including administrative and other costs plus a small proportion for provision) - such amounts are not consideration towards trade, commerce or business, or service in relation thereto. However, amounts which are significantly higher than recovery of costs, have to be treated as receipts from trade, commerce or business. It is for those amounts, that the quantitative limit in proviso (ii) to Section 2(15) applies, and for which separate books of account will have to be maintained under other provisions of the IT Act. Reading the aforesaid paras would indicate that it is now concluded that the respondent is an authority involved in the advancement of objects of general public utility, and therefore, is not precluded from claiming exemption. The appeal is, accordingly, dismissed.
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2023 (9) TMI 985
Reopening of assessment - period of limitation - order under clause (d) of Section 148A beyond period of one month - Applicability of sixth proviso to Section 149(1) - HELD THAT:- The notice under Section 148 of the Act (accompanied by an order under clause (d) of Section 148A) is required to be issued within the period of three years from the end of the relevant assessment year if the income escaping assessment is less than ₹50,00,000/-. The sixth proviso to Section 149(1) of the Act makes it amply clear that if the time available to the Assessing Officer to pass an order under Clause (d) of Section 148A is truncated to less than 7 days on account of the period of limitation available for issuing a notice under Section 148, the same shall be extended for the said period. In our view, the period of one month from the end of the month in which the time available to the assessee to respond to the notice under Clause (b) of Section 148A expires, is available to the Assessing Officer to pass an order under clause (d) of Section 148A of the Act only within the rubric of Section 149 of Act, that is, within the overall time available in terms of Section 149(1) of the Act for issuance of a notice under Section 148 of the Act. This is because a notice under Section 148 of the Act which is not accompanied with the order under Clause (d) of Section 148 of the Act would be non-compliant with the Act. And, no such notice can be issued beyond the period as specified under Section 149(1) of the Act.
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2023 (9) TMI 984
Deduction u/s 80HHC - deduction u/s 80IB of the Act was not be reduced before calculating the eligible deduction - As submitted that the case in Micro Labs Ltd . [ 2015 (12) TMI 708 - SUPREME COURT] is yet to attain finality. HELD THAT:- Considering the submissions made by the learned counsel appearing for both sides and also following the aforesaid judgment of this court in M/s.Carborandum Universal Ltd [ 2021 (9) TMI 1514 - MADRAS HIGH COURT] - we are inclined to dispose of this appeal in the same lines. Accordingly, the orders of the authorities below are set aside and the matter is restored to the file of the AO, who shall await the decision of the Larger Bench of the Hon'ble Supreme Court in the reference made in the case of Micro Labs Ltd (Supra) . Consequently, the substantial question of law raised herein is left open.
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2023 (9) TMI 983
Nature of expenses - payment of royalty - whether towards acquisition of intangible asset and is revenue expenditure? - HELD THAT:- Issue is decided in favour of the assessee, by a common judgment [ 2022 (6) TMI 1428 - MADRAS HIGH COURT] the benefit granted by the licensor is not enduring in nature in the present cases. The assessing officer without appreciating the terms of the licence agreement and ascertaining the nature of the expenditure incurred by the assessee companies, disallowed the deduction of royalty payment and allowed the depreciation at 25% treating it as capital expenditure. However, the appellate authorities, while deleting the disallowances made by the assessing officer, have rightly treated the royalty payment as revenue expenditure. Once the payment of royalty is treated as revenue expenditure, automatically, it goes without saying that the assessees would be entitled to 100% deduction. Therefore, we need not interfere with the orders passed by appellate authorities. Accordingly, the substantial questions of law relating to royalty, are answered in favour of the assessee. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- As the Hon'ble Supreme Court in the decision in Maxopp Investment Ltd. [ 2018 (3) TMI 805 - SUPREME COURT] decided the same in favour of the assessee, by holding that Rule 8D is prospective in nature and could not have been made applicable in respect of assessment years prior to 2007, when this rule was inserted.
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2023 (9) TMI 982
Reopening of assessment u/s 147 - deduction towards the provision for customer disallowances and disallowance u/s. 35(2AB) - HELD THAT:- As both the alleged issues relating to escaping assessment as raised in the reopening proceeding initiated u/s. 148 of the Act, were duly verified by the assessing officer while completing the assessment u/s. 143(3) of the Act and no new material came to the knowledge of the Assessing Officer subsequent to the original assessment proceeding is reflecting in recording reasons or in the notice u/s. 142(1) of the Act by the Ld.AO. Thus the facts which was available during the regular assessment and duly verified and examined by the Ld.AO, reopening on the same set of facts is nothing but a clear case of change of opinion as submitted by the Ld.AR appears to be acceptable. We find that in the case in hand, the allegation of the assessing officer to disclose fully or truly of material facts for assessment for the year under consideration or the income chargeable to tax has escaped assessment for the year under consideration has no legs to stand upon. Moreso, once the issue has already been dealt with during the original assessment proceeding and only upon due application of mind and upon examination of the same, the Ld.AO passes an order in the original assessment, the Assessing Officer cannot exercise the power to review or reassess the same. - Decided in favour of assessee.
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2023 (9) TMI 981
Addition u/s 68 - income from undisclosed sources - As per DR there were multiple companies on the address of the investor Company and that was foundation of doubting the investment - CIT(A) deleted the addition - HELD THAT:- Revenue can not dispute that the appellant company had filed PAN of investor, which is none other than the holding company. Documents with regard to registered address of investor company, certificate of incorporation and tax residency certificates were filed. AR has taken the Bench through the financials of the investor company, to show the source of investor company. It also comes up from the material on record that AT Holdings is tax resident of Singapore and has reported net profit of around Rs. 341 crores during the year ended 31st December, 2014. There is force in the contention of learned AR that in fact the investing company being foreign company, the source of source was not required to be established even after the amendment brought in Section 68 of the Act qua obligation to establish the source of source. AR has pointed out that for the same issue there was reopening of assessment u/s 147 for A.Y. 2012-13 and the assessment has been completed without any addition. AR has pointed out that in fact the money in the form of investment was received not in the previous year but last financial year and reference for that was made in the order of learned CIT(A) itself at page no. 20, where the remittances received from the holding company have been shown of 5.3.2014 while the relevant financial year started from 1.4.2014. Just only because there is allotment of shares in the present year invoking of provisions of Section 68 is not sustainable.Reliance in this regard has been rightly placed by the learned AR on the judgment of CIT Vs. Usha Stud Agricultural Farms Ltd. [ 2008 (3) TMI 91 - DELHI HIGH COURT] which is also cited before learned CIT(A). - Decided against revenue.
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2023 (9) TMI 980
TP Adjustment - Comparable selection - exclusion of Infosys Ltd. as a comparable on account of high turnover, having business segments of software development and sale of products, diversified business operations, substantial intangible assets, brand value, intangible and R D expenses etc. - HELD THAT:- The coordinate Bench in assessee s own case in assessment year 2007-08 has excluded Infosys Ltd. as a comparable while deciding assessee s appeal [ 2015 (9) TMI 1398 - ITAT DELHI] . Identical view was expressed by the coordinate Bench while deciding assessee s appeal in assessment year 2008-09 [ 2016 (6) TMI 1259 - ITAT DELHI] . Learned counsel appearing for the assessee has made a statement at bar that in assessment year 2014-15, the Dispute Resolution Panel(DRP) has excluded Infosys Ltd. as a comparable. Whereas, in assessment year 2015-16 and 2016-17, TPO himself did not consider Infosys Ltd. as a comparable. Thus, keeping in view the decision taken by the coordinate Benches in assessee s own cases in assessment years 2007-08 and 2008-09 and the further fact that the departmental authorities themselves have excluded Infosys Ltd. as a comparable in assessment year 2014-15, 2015-16 and 2016-17 in assessee s own case, we decline to interfere with the decision of the first appellate authority on the comparability of Infosys Ltd.
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2023 (9) TMI 979
Reopening of assessment u/s 147 - Undisclosed income - receipt of cash unexplained - HELD THAT:-There is no mention of name of the assessee or any of the partners in the seized documents for receipt of impugned sum. Even otherwise, intimation from ITO ward 3 New Panvel categorically stated that addition is made in the hands of society, but tax could not be recovered. For this reason, the sum cannot be taxed in the hands of the assessee, without any material against the assessee. As applying the principles laid down by the honourable Bombay High Court Godrej Boyce Mfg. Co. Ltd. [ 2022 (4) TMI 639 - BOMBAY HIGH COURT] we find that the reasons recorded for reopening of the assessment, in absence of any allegation on the part of the assessee to fully and truly disclosed material facts in the reasons recorded, are not sustainable. Statement u/s 131 of Mr. Manohar Desai also do not state that cash is received by assessee. Letter of ITO ward 3 panvel says that he has only stated PAN and Jurisdictional AO of the Assessee. This is evident in last para of the letter dated 23/02/2015. Even otherwise on the merits the coordinate bench in case of the cooperative society has categorically held that income is chargeable to tax in the hands of the members of the society, therefore, we are not in a position to give any other finding with respect to the receipt of above sum and its addition in the hands of the assessee on the merits also. Accordingly, reopening of the assessment in case of the assessee is quashed.
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2023 (9) TMI 978
TDS u/s 195 - disallowance u/s 40(a)(i) on account of alleged non-deduction of tax at source by the assessee while making remittance to Symbiotics Ltd., UK - AO held the payments made to Symbiotics Ltd.UK to be in the nature of royalty - HELD THAT:- The assessee does not get any right to use the copyright in the software as it merely has access to the information / data processed by the software / application which is owned and executed by Symbiotics Ltd. UK in its server located in UK. What the appellant gets is only a copyrighted article to use the product for its internal business purpose and not any right in any copyright to exploit the same for commercial reasons so as to constitute the payment received in consideration thereof as royalty in terms of Article 13 of the India UK DTAA. Support may be drawn by the decision in the case of Engineering Analysis Centre of Excellence Pvt. Ltd. [ 2021 (3) TMI 138 - SUPREME COURT] - In sum and substance what Symbiotics Ltd. UK is doing for the assessee is merely testing the ability of the candidates as per the parameters / standards of the assessee so as to ascertain whether the candidates meet the quality / performance criteria of the assessee. Having considered all the above aspects, we are of the view that the consideration paid by the assessee to Symbiotics Ltd. UK for provision of candidate s reports do not fall within the purview of royalty under Article 13 of the India- UK DTAA. Having held above that the impugned payment to Symbiotics Ltd. UK is not royalty and the fact that the Symbiotics Ltd. UK has no PE in India and therefore not assessed to tax in India, the assessee has no obligation to withhold tax on the impugned payment made by it to Symbiotics Ltd. UK u/s 195 of the Act. It is well settled position of law that the tax is required to be withheld in respect of payments made to a non resident only if such payment is chargeable to tax in India. Decided in favour of the assessee.
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2023 (9) TMI 977
Addition on account of business income based on the unclaimed TDS in the 26AS of the assessee - Taxability of income comes from its accruing and arising in the hands of a person - TDS was accounted for in the partnership firm - CIT(A) deleted as here through technical mistake/oversight income of the Firm is wrongly represented in the hands of the appellant. However, at no point of time that income has accrued or arisen in the hands of the appellant - HELD THAT:- As in the original return of income assessee has claimed impugned TDS - However, upon realizing the fact that the corresponding income of TDS was accounted for in the partnership firm and therefore, assessee had filed a revised return of income wherein the assessee did not claim the said TDS and he paid the additional tax by way of self-assessment tax. Thus, the assessee had not claimed total TDS in his revised return of income, therefore ld CIT(A) has rightly deleted the addition in the hands of the assessee. We note that there was no fault of the assessee when some other party had wrongly deducted tax at source on any transaction by quoting the PAN of the assessee by mistake. The assessee had already informed to the customers that the proprietary business in the name of M/s Yogi Transport was closed and a new partnership was formed from assessment year (A.Y.) 2014-15 onwards. The assessee had also informed the PAN of the partnership firm of M/s Yogi Transport but customers wrongly deducted TDS by quoting assessee s PAN. Even after this fact was pointed out to these companies personally by the assessee, the said parties did not care to revise their TDS returns. Thus, there was no fault on the part of the assessee, as the assessee has also subsequently filed revised return of income on 28.09.2018, wherein the assessee did not claim the said TDS and the assessee paid the additional tax by way of self-assessment tax. Therefore, we note that in these circumstances, the assessee should not be penalized. We note that action of assessing officer, in making prima facie adjustment by adding the turnover in the hands of the assessee, is quite illogical and unjustifiable in as much as it has resulted into double taxation. The partnership firm, M/s Yogi Transport had already accounted for this turnover in its books of accounts and shown profit thereon and also paid due tax thereon and now, the said entire turnover was again added to the income of the assessee and hence, it is a clear case of double taxation. Assessee has not claimed TDS in the revised return of income filed by him, and partnership firm of assessee has shown turnover which belongs to TDS hence there is no loss to the revenue. Appeal filed by the Revenue is dismissed.
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2023 (9) TMI 976
Validity of Reopening of assessment u/s 147 - Bogus LTCG - exemption u/s. 10(38) denied - allegation of mandatory statutory procedural requirement stated in section 142(3) denied - AO observed that there are certain important circumstantial as well as direct evidence to show that gain reported by the assessee is not natural but is arranged one - HELD THAT:- As challenging the legality of the reassessment carried out u/s. 147 read with sec. 148 from the approval granted on his note that satisfied with the reasons we find that it is sufficient to indicate that approving authority has examined the reasons recorded and does not indicate a mechanical approach while giving the approval since the reasons to believe recorded contained details in respect of the share applicant for the reassessment proceeding sought to be initiated. Accordingly, we do not ascribe to the contentions raised by the Ld. Counsel on the legality of the impugned reassessment order. Non-supply of material gathered by the ld. AO from the enquiries conducted by him in the course of assessment and utilised for the purpose of assessment - Alternate plea taken, to remit the matter back to the Ld. AO in absence of the material, which also ought to have been provided by complying with the specific provision of section 142(3) - As we note that Ld. AO has conducted certain enquiries by issuing notice u/s. 133(6) of the Act to Calcutta Stock Exchange as well as summon u/s. 131 to one of the parties who bought the shares from the assessee i.e. the SVPL. From the impugned assessment order while rebutting the allegations of the assessee, Ld. AO has noted that he himself has made various enquiries in respect of the share transaction undertaken by the assessee. In the present case before us, from the perusal of the impugned assessment order, as a matter of fact, it is noted that Ld. AO has conducted enquiry from CSE by issuing notice u/s. 133(6) and has also issued summon u/s. 131 on one of the buying parties to whom assessee has sold 500 shares. Considering the above discussion in respect of provisions contained in sec. 142(3) read with sec. 142(2), we are inclined to consider the alternate plea taken by the ld. Counsel to remit the matter back to the file of Ld. AO by giving direction to the Ld. AO to make available the material gathered by him in the course of enquiry conducted in terms of sec. 142(2) and provide a reasonable opportunity of being heard to the assessee as enunciated u/s. 142(3) of the Act. Thereafter, Ld. AO may complete the assessment in accordance with the provisions of law. Accordingly, ground no. 11 and 12 taken by the assessee are allowed for statistical purposes.
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2023 (9) TMI 975
Revision u/s 263 - claim of deduction u/s 32AC, claim of additional depreciation u/s 32(1)(ii) Disallowance u/s 14A - HELD THAT:- So far as the disallowance u/s 14A is concerned, the undisputed position that emerges is that the assessee has not earned any exempt income during this year. In such a case, no disallowance u/s 14A is called for in terms of binding decision of Chettinad Logistics Ltd. [ 2017 (4) TMI 298 - MADRAS HIGH COURT] Additional depreciation - We find that ratio of decision of T.P. Textiles P. Ltd. [ 2017 (3) TMI 739 - MADRAS HIGH COURT] would apply wherein similar additional depreciation has been allowed for AY 2011-12. Therefore, the assessment order could not be termed as erroneous or prejudicial to the interest of revenue on both these scores. Eligibility to claim deduction u/s 32AC - We find that this issue is covered in assessee s favor by the decision of co-ordinate bench of this Tribunal in DCIT vs. M/s Indian Ocean Garnet Sand Company [ 2017 (10) TMI 1641 - ITAT CHENNAI] - In that case, the assessee was engaged in similar activity of separation of garnet sand from beach sand and claimed the same to be manufacturing process. The bench, relying on the cited decision of Apex Court in Sesa Goa Ltd. (supra), held that this process is one of manufacturing. We find that the term manufacture as defined in Sec. 2(29BA) means a change in a non-living physical object or article or thing resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure. We find that the extraction of minerals from beach sand involve change in non-living physical object / article into a new and distinct object / article having different name and use. Thus, the same would amount to manufacture. Respectfully following the ratio laid in cited case laws, we would hold that the activities carried out by the assessee amount to manufacture and the claim was in order. Therefore, no interference is called for in the assessment order, on this issue also. This being the case, the revision of the order fails on merits. Assessee appeal allowed.
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2023 (9) TMI 974
Penalty u/s 271(1)(c) - disallowance on non-genuine purchases - HELD THAT:- We find that in the impugned order, the CIT(A) after considering the submissions filed by the assessee and findings of the AO has dismissed the appeal filed by the assessee. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the CIT(A) requires no interference and, therefore, is upheld. Accordingly, the ground raised by the assessee is dismissed.
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2023 (9) TMI 973
TP Adjustment - comparable selection - HELD THAT:- Arvind Lifestyle Brands Limited - We remand this comparable back to the Ld.AO/TPO to carry out necessary verification having regard to the annual reports of this comparable that has already there placed on record. Assessee may assist the Ld.TPO/AO in determining the eligibility of this comparable by providing relevant information as called for. Needless to say that proper opportunity of being heard must be granted to assessee. Exclusion of KD Trend Wear Ltd., Sohum Shoppe Ltd. and Major Brands Pvt. Ltd. as the above comparables were rejected by the Ld.TPO as these were not appearing in the search matrix of the TPO - We are of the opinion that merely because these comparables do not appear in the search process by the Ld.TPO, it cannot be excluded if assessee is able to file the annual reports which are verifiable - Case followed Prism Networks [ 2022 (2) TMI 1296 - ITAT BANGALORE] - thus we remand these comparables to the Ld.AO/TPO to reconsider them in the light of the annual reports that will be filed by assessee. In the event they are found to be functionally similar with that of assessee, the same may be included in the final list. SSIPL Lifestyle Pvt. Ltd. - On perusal of the annual report of this company the business profile is revealed to be primarily engaged in business of trading of footwear and apparels etc. also submission of the assessee that the parent company of this comparable is into manufacturing activity whereas this company perse engaged in trading activity. In our considered opinion, this needs to be verified and in the event it is found that this comparable is carrying out trading activity, the same may be included. Accordingly, we remand this comparable back to the Ld.AO/TPO for verification as directed above. Aditya Birla Fashion and Retail Ltd. - We note that the annual reports has not been looked upon by the revenue authorities before rejecting this comparable. In the interest of justice, we remand this comparable to the Ld.AO/TPO for reconsidering the plea of assessee in the light of the annual reports. Accordingly we remand this comparable back to the Ld.AO/TPO for necessary verification in accordance with law. Metro Brands Ltd. - As this comparable has been held to be functionally not similar with that of assessee in assessee s own case by the Coordinate Bench of this Tribunal [ 2022 (9) TMI 1505 - ITAT BANGALORE] for Assessment Year 2015-16 in the preceding assessment year, we direct the exclusion of this comparable for the relevant year under consideration. Adidas India Mktg. Pvt. Ltd. - We note that assessee is challenging the functional similarity of this comparable only because the rental expenditure of this comparable is much lower than the rental expenditure incurred by the assessee. It is the submission of the Ld.AR that the high rental expenditure in the hands of the assessee affects the operating profits and therefore the business model is different as compared to Adidas. Working capital adjustment would take care of these itself by not considering such item which can be identified for computing the operating profit of the assessee in order to iron out the differences. We direct the Ld.AO/TPO to consider this comparable by excluding the rental expenditure for the purpose of computing the margins to determine the comparability. Thus this comparable is directed for inclusion. Sreeleather Ltd be excluded as functionally different. Pokarna Marketing Pvt. Ltd. As assessee was arguing certain comparables for inclusion, more particularly KD Trend Wear Ltd., the assessee argued that this comparable is functionally similar with that of assessee as it is engaged in trading of clothing and footwear and it passes all the filters applied by the Ld.TPO. Going by the same principle, we remand this comparable to the Ld.TPO for necessary verification on the functional similarities to be considered in accordance with law. We apply the same principle to the present comparable and direct the Ld.TPO to verify the filters that has been applied and in the event it is found to satisfy all the necessary filters, the same be considered. Accordingly we remand this comparable back to the Ld.AO/TPO. V F Brands India Pvt. Ltd. and Tommy Hilfiger Arvind Fashion Pvt. Ltd.- AR submitted that the operating margin considered by the Ld.TPO of these companies are incorrect - We accordingly direct the Ld.TPO to recomputed the ALP having regards to the financials of the two companies and determine the margins afresh in accordance with law. Working capital adjustment not granted - We are of the opinion that this issue is no longer resintegra as this issue is covered by the decision of Coordinate Bench of this Tribunal in case of Huawei Technologies India (P.) Ltd [ 2018 (10) TMI 1796 - ITAT BANGALORE] as held n keeping with the OECD guidelines, endeavor should be made to bring in comparable companies for the purpose of broad comparison. Therefore the working capital adjustment as claimed by the assessee should be allowed. Refusing the risk adjustment by the Ld.TPO - The same has been rejected as relevant data in respect of the comparables were not provided by the assessee. in the event the assessee is able to establish the risks undertaken by the outstanding comparables, the same may be considered in accordance with Rule 10B by the Ld.TPO. Necessary verification may be carried out in respect of the same by the Ld.TPO. TP Adjustment only to the gross income earned by assessee on sales made to AE. - We direct the Ld.AO to verify the computation of the international transaction to the total operating cost as provided by the assessee hereinabove. In any event, the transfer pricing adjustment has to be restricted to the value of international transaction alone. The Ld.AO is directed to consider the claim of assessee in accordance with law. ALP of local sourcing support fees under the TNMM - HELD THAT:- The assessee is into wholesale and retail sales of PUMA products. The common sourcing entity globally is the PIT to all PUMA sales entities, who is assisted by PITS and WCL. PIT assists the assessee with the sourcing services, to get the products manufactured from the local third party manufacturers. The products so manufactured by the third party local manufacturers, are restricted to Indian market only. On a detailed analysis of the transfer pricing study, we note that the assessee is one of the PUMA sales entity to sell PUMA products. PIT is a medium who sources by either to manufacture or have manufactured PUMA products, which is sold to PUMA sales entities like assessee before us. There is a contractual agreement between PIT and PUMA SE(an AE who owns and provides necessary rights to use trade mark and brand name to PUMA sales entities), as per which PIT is allowed to collect R D fees from PUMA sales entities to compensate PUMA SE for its global product creation efforts. This in our considered opinion cannot be aggregated with the trading activity of the assessee. It has been rightly segregated by the revenue authorities. However we not that the Ld.TPO/AO has not bench marked the transaction in accordance with the transfer pricing procedures. We therefore remand this issue back to the Ld.TPO to carry out necessary verification and to determine the arms length price by adopting internal CUP. Needless to say that proper opportunity of being heard must be granted to the assessee.
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2023 (9) TMI 972
Deduction u/s. 10A - Computation of deduction - HELD THAT:- Allow deduction u/s. 10A after reducing the expenses incurred by the assessee in foreign currency for deliver of software and telecommunication charges both from the export turnover as well as the total turnover. TP Adjustment - comparable selection - HELD THAT- As relying on Sterling Commerce Solutions India (P.) Ltd. case[ 2019 (6) TMI 1705 - ITAT BANGALORE] we direct the AO/TPO to exclude the above six companies viz., iGate Global Solutions Ltd. (seg.), Infosys Ltd., Mindtree Consulting Ltd., Persistent Systems Ltd., Sasken Communications Ltd. (seg.) and Flextronics Software Systems Ltd. whose turnover is exceeding Rs. 200 crores from the comparables and also for the reason that these companies are functionally different from the assessee which is a captive service provider rendering software development services. Aztec Software Ltd., Geometric Software Ltd. and Megasoft Ltd. which are sought to be excluded by the assessee on the ground that these fail the RPT filter - The issue regarding adoption of rate of RPT filter was considered by the Hon ble High Court of Karnataka in PCIT v. Yodlee Infotech P. Ltd. [ 2018 (6) TMI 1783 - KARNATAKA HIGH COURT] The AO/TPO is directed to follow the above judgment for applying the RPT filter rate. Tata Elxsi has to be excluded from the list of comparable chosen by the TPO on functional dissimilarity with the assessee company. Bodhtree Consulting is engaged in Web Service Integration including data cleansing services, data management services, e-paper solutions and completely different from assessee engaged in software development services for manufacturing and hospitality sectors. Accel Transmatics is engaged in various business models whereas the assessee is into software development services and KALS Info Systems Ltd. is into developing software products and not comparable with the assessee. Exclude Avani Cincom Technologies Ltd. from the list of comparables as functionally dissimilar. Celestial Biolabs Ltd.was basically/admittedly in clinical research and manufacture of bio products and other products, there is no clear basis on which the TPO concluded that this company was mainly in the business of providing software development services. We therefore accept the plea of the Assessee that this company ought not to have been considered as comparable. Helios Matheson Information Technology Ltd. is not comparable with the assessee and directed to be excluded from the comparable companies. Ishir Infotech Pvt. Ltd - we remit this issue to the AO/TPO to re-examine the issue whether professional charges paid to outside consultants are also included in the employee compensation and decide the issue as per law if it satisfies 25% employee cost filter. Megasoft Ltd. - TPO has computed the PLI of this company at 60.23%, whereas the assessee s claim is at 23.11%. Respectfully following the above decision of the Tribunal, we remit this issue to the AO/TPO to verify the aspect of correct computation of operating margin of this company in the light of the decision of the coordinate Bench in the case of Trilogy E-Business Software India (P.)Ltd [ 2013 (1) TMI 672 - ITAT BANGALORE] . Thirdware Solutions Ltd company deals in both products and services and manages products and applications for other product companies, whereas the assessee is into only software development services. Also, following the decision of the Tribunal in the case of Softbrands India (P.) Ltd. [ 2016 (8) TMI 1426 - ITAT BANGALORE] we direct to exclude Thirdware Solutions Ltd. from the comparable companies. Accel Transmatic Ltd. - This company is directed to be excluded from the comparables list for the AY 2006-07 in assessee s own case hereinabove. For the same reasons, since in the impugned AY there is no change in functional profile of the comparable company, accordingly we direct exclusion of this company as a comparable. KALS Info Systems Ltd company is into development of software and software products and training of software professionals on online projects. Further the employee cost is @ 16.38% which fails the threshold limit of 25% fixed by the TPO. It also holds inventories. Hence it is not comparable with assessee company which is engaged in software development services. Lucid Software Ltd is not comparable with the assessee and excluded from the comparables list due to non-availability of full information about the segmental details as to how much is the sale of product and how much is from the services. Avani Cimcon Technologies Ltd. excluded from the comparables list on functional dissimilarity. Bodhtree Consulting Ltd is functionally dissimilar to the assessee which is engaged in software development services and exclude this company from the comparables list. Celestial Biolabs Ltd. company s functional profile is different from the assessee and it fails employee cost filter of 25% applied by the TPO, therefore we direct exclusion of this company. E-Zest Solutions Ltd. be omitted from the set of comparables for the period under consideration in the case on hand as company is engaged in eBusiness Consulting Services consisting of web strategy services, IT design services including product development consulting services which are high end ITES / KPO services and functionally different from the assessee s profile. Infosys Ltd. company has significant intangibles and huge revenue from software products and not comparable with the assessee, therefore Infosys Ltd. is excluded from the list of comparables. KALS Information Systems Ltd. (Seg) company has been held to be functionally different for AYs 2006-07 2007-08 hereinabove. LGS Global Ltd revenue's contention that segmental data was available, cannot be accepted. The mere availability of proportion of the turnover allocable for software product sales per se cannot lead to an assumption that segmental data for relevant facts was available to determine the profitability of the concerned comparable. Persistent Systems Ltd. ought to be omitted from the set of comparables for the year under consideration as in the absence of segmental details/information a company cannot be taken into account for comparability analysis. Quintegra Solutions Ltd be excluded from the list of comparables in the case on hand since it is engaged in proprietary software products and owns its own intangibles unlike the assessee in the case on hand who is a software service provider. Wipro Ltd (Seg) is functionally different from the Appellant since it owns significant intangibles, IPRs, patents etc. and renders product development services. Segment bifurcation of revenue from sale of products and software services not available.
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2023 (9) TMI 971
Deemed dividend u/s 2(22)(e) - assessee has a strategic investment in one of the group concerns in which the assessee held 17.20% shareholding - AO was of the view that, as the assessee held 17.20% shareholding in the above said Company, thus, the amount received by the assessee from GAPL as an unsecured loan, is in the nature of deemed dividend - HELD THAT:- The payments in question were provided due to business exigencies and the funds so provided for the sole benefit of company and not to individual benefit of a shareholder and, therefore, the question of applicability of the provisions of Section 2 (22)(e) of the Act doesn t arise. None of the three conditions prescribed are applicable to the case on hand, namely, (i) no payments were made to the assessee by way of advance or loan by GAPL, but funds were allocated for execution of work assigned to the assessee on its behalf; (ii) no payments were made on its behalf; and (iii) payments made were not for anybody s individual benefit. A receipt which cannot be liable for tax, unless there are specific provisions to tax the same. Certain transaction is covered by deeming provision have been brought in the statute under deeming provision. Same section 2(22)(e), deeming provision has been brought in the statute to cover up transaction. The benefit is not individual but solely on business exigency. The deeming provision is always under the control of express provision . It is pertinent to observe that the benefit of expressed provision is covered in deeming provision or not. Considering the factual matrix, the assessee did not get any direct benefit of the payment made by GAPL and the amount was returned back to party. We respectfully relied on the order of Suraj Dev Dada [ 2014 (5) TMI 625 - PUNJAB HARYANA HIGH COURT] .Only it is the benefit of business exigency. Decided in favour of assessee.
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2023 (9) TMI 961
Reopening of assessment u/s 147 - AO appears to have formed the view that income which is otherwise chargeable to tax, has escaped assessment - It is the petitioner's case that he has moved from Quetta in West Pakistan. While moving to India, he brought with him cash amounting to approximately Rs.27,50,000/-, and jewellery weighing 150 grams. So far as the cash is concerned, Rs. 27,50,000 was deposited by the petitioner in Bank of India, Khanpur Branch, Delhi - as guided petitioner could take recourse to a statutory appellate remedy. HELD THAT:- It is the cash and the value of the jewellery, as arrived at on 01.04.2015, that forms the income, which is said to have escaped assessment. AO has valued the jewellery at Rs.3,85,500/-, which has been added to Rs. 27,00,000/-, i.e., cash brought by the petitioner from Pakistan. Consequently, the escaped income was pegged, as noticed above, at Rs. 30,85,500/-. Since an assessment order has been passed, as indicated to Mr Shafiq Khan, petitioner, that the petitioner could take recourse to a statutory appellate remedy. Mr Khan says that u/s 251 the appellate authority will not be able to set aside the impugned assessment order dated 31.05.2023. According to us, prima facie, this is a misreading of the provision. The provision, inter alia, confers power of annulment on the appellate authority. The expression annul is wider in scope than the power to set aside. We have queried Mr Khan as to how the petitioner got Indian currency into the country, and deposited the same in the aforementioned bank. As assessee says that he will obtain instructions in that regard. List the matter on 11.09.2023.
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Customs
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2023 (9) TMI 1014
Rejection of claim of interest on refund - rejection on the ground that the appellant was granted the refund within three months from the order passed by Commissioner (Appeals) - continuation of proceeding during moratorium period - HELD THAT:- As regard the issue that when the IBC proceeding is undergoing and pending before the NCLT whether this appeal can be heard and disposed of. It is found that the moratorium is provided under Section 14 of the IBC Code, the Delhi High Court in POWER GRID CORPORATION OF INDIA LTD VERSUS JYOTI STRUCTURES LTD. [ 2017 (12) TMI 1660 - DELHI HIGH COURT ] dealt with the provision of Section 14 of IBC and in view of the judgment read with Section 14 it is clear that the moratorium provision would apply to all those proceedings which are against the corporate debtor. However, in the present appeal the proceeding is in favour of the appellant (Corporate Debtor) as in this appeal the appellant is claiming the interest on refund. Therefore, following the aforesaid order of the Delhi High Court by conclusion and disposal of this appeal would not affect adversely the resolution plan therefore, in this appeal proceeding can be continued and appeal can be disposed of. Therefore, the appeal is taken up for disposal. The learned Commissioner (Appeals) rejected the claim of interest on refund referring the provision of Section 27 A of Customs Act, 1962 on the ground that the refund was payable within three months from the order dated 13.04.2012 of Commissioner (Appeals) whereby the refund was allowed - From the plain reading of Section 27A it is clear that the assessee is entitled for the refund if the same is not refunded within three months from the date of receipt of application under sub section (1) of Section 27. In the clear provision under Section 27 A and the landmark judgment of Hon ble Supreme Court in the case of Ranbaxy Laboratories Ltd [ 2011 (10) TMI 16 - SUPREME COURT] , the appellant is entitled for interest on the amount already refunded for the period from 22.07.2003 (three months after the date of application) till 25.06.2012 (date of grant of refund). As regard the contention of the Commissioner (Appeals) that interest is payable after three months from the date of Commissioner (Appeals) order wherein the refund was allowed is absolutely absurd and contrary to Section 27 A and principle laid down by Hon ble Supreme Court in the case of Ranbaxy Laboratories Ltd - the appellant is legally entitled for interest on the refund granted to them after three months from the date of the application i.e. 22.07.2003 till the grant of refund i.e. 25.06.2012 as per the rate of interest as prescribed under the Customs Act, 1962. Appeal allowed.
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2023 (9) TMI 970
Demand of duty foregone by the petitioner at the time of import of capital goods - SCN is time barred in as much as the imports was made by the petitioners as early as on 24.08.2004 - HELD THAT:- The imported capital goods which were cleared on the strength of EPCG License issued by the authorities under the Foreign Trade (Development and Regulation) Act, 1992, can be confiscated by invoking the provisions of Section 125 of the Customs Act, 1962 - As several other issues arise for consideration the Impugned Show Cause Notice, there is no merits in challenge the Impugned Show Cause Notice as time barred. That apart, issue relating to time barred is always a mix question of law and facts. Therefore, the Impugned Show Cause Notice cannot be quashed under Article 226 of the Constitution of India. Writ petition dismissed.
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2023 (9) TMI 969
Levy of penalty on custodian - allegation of clandestine removal - Cosmetics items removed in the guise of Baby diapers - exercise of proper diligence or not - HELD THAT:- There is nothing in the public notice, which required the employees of the ICD/custodian to refer to ICEGATE prior to public notice of 2015. The findings of lower authority to that extent is erroneous and not sustainable - Support found from the conduct of the department which has not issued either a penal or disciplinary SCN to the employees or CFS involved in other two transactions. Even if the committed omission in their case was for one bill of entry, each. The slandered of diligence cannot be different. The number of transactions can be basis for deciding quantum of punishment, if punishment for a lapse is required. Department cannot pick and choose to decide the lack of diligence by number of transactions even when the employee involved in extra diligence believed that documents not found was due to some system error or failure. There are no no merits in the impugned order an penalty imposed under Sub-Regulation 8 of Regulation 12 set aside, and it is found that the additional condition imposed by public notice of 2015, itself was procedural improvement under taken by the department through which requirement of referring to the ICEGATE was brought in - the employer cannot be punished for such facts of discretion or extra diligence than prescribed, on the part of employee specially when department did not find anything wrong, when compared to employees of other CFS. Penalty set aside - appeal allowed.
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2023 (9) TMI 968
Valuation of imported goods - Misc. Furniture of Different Types etc - rejection of declared value - redetermination of value on the basis of contemporaneous imports of similar goods - confiscation - imposition of redemption fine - penalty. Can the rejection of the declared transaction value and re- determination of the duty by the original authority and its affirmation in the impugned order be sustained? - HELD THAT:- This appeal is against re-assessment in which the appellant waived, in writing, the SCN and personal hearing and in which it had not even disputed that the goods which were imported were much more than what was declared. The question is whether the appellant can, after the goods have been cleared after paying duty, fine and penalty, now dispute the assessment of duty on facts which are now impossible to recheck but which could have easily be re-checked before clearance - similar case up before this Tribunal in the case of COMMISSIONER OF CUSTOMS DELHI VERSUS M/S HANUMAN PRASAD SONS [ 2020 (12) TMI 1092 - CESTAT NEW DELHI] where it was held that the Commissioner (Appeals) was not justified in setting aside the orders passed by the assessing officer on the Bills of Entry.Recycling also holds that if the declared transaction value is rejected, then it has to be determined in accordance with the procedure prescribed in rules 4 to 9. The only difference between this appeal and the one in Hanuman Prasad is that in this case, the re-valuation had to be done because more goods were imported than what were declared which fact has been accepted by the appellant and which it had not disputed during assessment whereas in the case of Hanuman Prasad the re-assessment became necessary because the declared value was much lower than the contemporaneous values and the enhanced value itself was accepted by the importer. In Hanuman Prasad, after accepting the enhanced value and clearing the goods for home consumption, the importer assailed the re-assessment - The assessing officer, having rejected the value under Valuation Rule 12, re-determined it on the basis of contemporaneous imports of similar goods based on the information available in the National Import Database (NIDB). The appellant, having waived the SCN, personal hearing, and having paid the re-assessed duty and clearing the goods for home consumption cannot now ask for the evidence or basis for re-assessment all of which it had waived, thus, putting the department in an impossible situation. Can the confiscation of the imported goods in the four Bills of Entry under section 111(l) and (m) on the ground of mis-declaration of the quantity and their release on payment of redemption fine be sustained? - HELD THAT:- It is not possible to accept the submission of the learned counsel that so long as the declaration in the Bills of Entry is as per the invoices, no mis-declaration can be alleged. The charge of duty of Customs and all the restrictions and prohibitions are on the goods imported into India and NOT on the goods said to be imported into India in the invoices or other documents. Usually, the documents match the goods actually imported and it provides a convenient way of assessing and clearing goods. However, in case of differences, what is important is the goods which are actually imported and not just what have been indicated in the invoices. Thus, it is the goods which must correspond to the declaration and if they do not, they will be liable to confiscation under section 111(m). The declaration in the Bills of Entry matching the invoices, bills of lading, etc. is of no avail. The importer is responsible for what is imported and how much is imported. The importer is responsible for what he has imported and it is not sufficient if he files Bills of Entry corresponding to the documents. The declaration in the Bills of Entry must match with the goods actually imported - there are no infirmity in the confiscation of the imported goods in this case. It also needs to be pointed out that the appellant had not contested before the adjudicating authority that the goods were liable for confiscation. In fact, it had, in writing agreed to pay the redemption fine. If the confiscation of the goods is sustained, are the amounts of redemption fine imposed correct or excessive? - HELD THAT:- In terms of the second proviso to Section 125, the maximum redemption fine in case of imported goods shall be the market value of the goods minus the duty chargeable thereon. The redemption fine imposed in each of the four Bills of Entry is way below this limit. In the factual matrix of this case, we find that amount of redemption fine imposed is fair and proper and calls for no interference. Are the amounts of penalty imposed under section 112 correct or excessive? - HELD THAT:- The penalties under section 112 are a small fraction of the market value of the goods confiscated which is fair and proper and calls for no interference. Appeal dismissed.
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2023 (9) TMI 967
Benefit of exemption from customs duty - conversion from foreign going vessel to coastal vessel - Interpretation of Statute - Sr. No. 462 of the Notification No 12/2012-Cus dated 17.03.2012, granting partial exemption to imports made by conversion of foreign run vessels to domestic run vessels - import of M V Dubai Faith, M V Athena M V Star Masaya - whether by deeming fiction the coastal conversion was considered as import of vessels? - HELD THAT:- A perusal of the conditions prescribed in the notification clearly shows that the notification gives two options to the importers. The first option is to pay the customs duty on the full lease or contract value in case of charter party contracts. The second option is to pay one by one hundred and twentieth of the applicable duty for each month or part thereof stay in India of coastal run - the applicable duty is to be calculated at any percentage of the value of goods then such duty will be calculated at that percentage of the value of the imported articles. It is the option of the importer to pay duty either in terms of clause (a) of the condition 82 of the notification or in terms of clause (b) Condition 82 of the notification. Ideally the original Adjudicating Authority, should have sought option from the importer and acted accordingly to assess either under Clause (a) of the Condition 82 or Clause (b) of the condition 82 of the Notification 12/2012- Cus dated 17.03.2012. Secondly, it is noticed from the impugned order that the value of the vessel declared in the insurance certificate has been taken and no opportunity has been granted to the appellants to refute or challenge the said value. In case the appellants wish to assess the goods under Clause (b) of the Condition 82 of the notification then they may be given opportunity to participate in determination of correct value of the vessels for the purpose of assessment. Thus, it is open to the appellants to seek assessment either under Clause (a) or Clause (b) of the Condition 82 of the Notification 12/2012-Cus dated 1703.2012. In case they opt for assessment under Clause (b) then duty will be calculated on the total assessment value of the ships determined in terms of Section 14 read with Custom Valuation Rules - the contention of the appellant that there is no mechanism under the customs valuation rules to determine the value in such circumstances as the said rules take care of all eventualities to reach the valuation in such circumstances, is rejected. Matter remanded to the original Adjudicating Authority for fresh assessment.
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Corporate Laws
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2023 (9) TMI 966
Refusal of Transmission of shares - Transfer of title in accordance of Will of the deceased, in favor of Daughter - full right to dispose of the shares in the open market, restricted by agreement - power of company to purchase its own shares - HELD THAT:- The present case is a case of transmission of shares to the daughter of deceased Shri Gagan Parasher, as is clear and evident from the letter of intimation dated 27.1.2021 sent by Kaashvi Parasher to the Company. Clause (c) of sub-section (4) of section 56 stipulates that within one month from the date of receipt of intimation of transmission, the company shall deliver the certificates of the relevant securities to the concerned person - The reply of the Company is to refuse the request for transmission permission of shares on a specious and legally unsustainable plea and so the company asks Kaashvi Parasher to withdraw the intimation letter, as she is not entitled for transfer of shares as per the last Will of Shri Gagan Parasher. The Learned Counsel for Appellants had emphasised on the condition regarding sale of said shares back to the company which is included in the Last Will of Shri Gagan Parasher to claim that Kaashvi Parasher is not entitled to transmission or transfer of the said shares - there was no need for the Company to have interpreted or acted upon the provisions included in the Will of Shri Gagan Parasher, since the intimation under section 56 of the Companies Act was merely about transmission of said shares and not about execution of Shri Gagan Parasher s Will. In such a situation, it was not only undesirable, but also unlawful for the Company to have refused transmission of said shares when other Class-I legal heirs of Shri Gagan Parasher had given explicit no objection for transmission of the said shares in favour of Kaashvi Parasher. These no objections were submitted by Kaashvi Parasher along with letter of intimation to the Appellant Company. The Company was wrong in sending the letter dated 22.2.2021 to Kaashvi Parasher - on the basis of the material available, and as required under law, the company should have transmitted the said shares in the name of Kaashvi Parasher without getting into the issue of execution of the Will or examining any settlement . The point in the Last Will of Shri Gagan Parasher that interest of a third party has been created vis- -vis Kaashvi Parasher, would be a matter to be decided by a court of appropriate jurisdiction and therefore, not an issue to be decided by NCLT when considering a case for transmission of shares. Both the directors of the Company namely, Gunjan Sharma and Abhinav Goyal have preferred appeal in a matter that was quite clearly between the Company and Kaashvi Parasher. Why third party like them should oppose the application of Kaaashvi Parasher is not explained in the appeal. In fact, both the Appellants have caused prejudice to the case/appeal of Kaashvi Parasher and dragged her into litigation for no ostensible or logical reason and to the detriment of the Kaashvi Parasher. The NCLT has not committed any error in quashing the communication dated 22.2.2021, which is the reply to the intimation letter dated 27.1.2021. Further, the said shares should be transmitted in the name of Respondent Kaashvi Parasher within thirty days of this order - Appeal dismissed.
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Insolvency & Bankruptcy
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2023 (9) TMI 1013
Maintainability of application u/s 7 of IBC - default prior to the Section 10 A period - Application barred by Section 10A or not - It was held by NCLAT that no error has been committed by the Adjudicating Authority in admitting Section 7 Application - HELD THAT:- There are no good ground and reason to interfere with the impugned judgment and hence, the appeal is dismissed.
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2023 (9) TMI 965
Maintainability of application u/s 7 of IBC - application made on the basis of an Assignment Deed - not legally enforceable document being and unregistered agreement - privity of contract between the Corporate Debtor and Respondent No.1 - making malafide attempt to file duplicate claims - non-service of notice of the company petition on the Corporate Debtor - existence of debt and dispute - HELD THAT:- At this stage, no contentions have been raised by either party regarding debt and default committed thereto. On perusing the impugned order, it is found that the Adjudicating Authority has recorded that there exists financial debt and default and admitted Section 7 application. Debt and default on the part of the Corporate Debtor not having been contested, there are no error on the part of the Adjudicating Authority in admitting the Section 7 application. Non-service of notice of the company petition on the Corporate Debtor - HELD THAT:- The Adjudicating Authority had taken cognizance of the Affidavit of Service which had been filed by the Respondent No.1. From the totality of above cited circumstances, we have sufficient reason to believe that notice was properly served upon the Corporate Debtor at their valid email address on three separate occasions and an affidavit of service to this effect was also filed as placed on record at pages 25-29 of Reply Affidavit. However, after service of notice, if the Corporate Debtor did not appear before the Adjudicating Authority, the Respondent No.1 cannot be held responsible for not having sent proper notice - the Appellant cannot rightfully claim that they were deprived of reasonable opportunity of hearing due to non-service of notice. While it is axiomatic that principles of natural justice are not an empty formality, it cannot be unmindful of the fact that this cannot be resorted to by a litigant to cover up their own shortcoming and derail the judicial process. The SBI vide the Assignment Agreement had assigned and transferred all its rights in the credit facilities extended to the principal borrower along with all underlying security interests to Respondent No.1. Hence, the Respondent No.1 having clearly stepped into the shoes of SBI and on having acquired the assets under the Assignment Agreement in the capacity of an Asset Reconstruction Company in the manner and procedure laid down by the SARFAESI Act, it had become the deemed lender and therefore entitled to exercise its right to initiate proceedings under Section 7 of IBC. The issue of debt and default on the part of the Corporate Debtor is not in contention and no submissions have been made in this regard by the Appellant. In result, there are no error in the impugned order admitting the Section 7 application - appeal dismissed.
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2023 (9) TMI 964
Proxy of Corporate Debtor - two separate entities - whether any admission or communication sent by SNG Developers Ltd. can be considered as being sent by Corporate Debtor SNG Techno Build Pvt. Ltd.? - time limitation - HELD THAT:- It is amply clear from the various communications and e-mails between the contractors/sub-contractors with the group companies of SNG Group that the use of the e-mail address or Letter head of SNG Developers Ltd was being used in loose sense and it would not be proper to draw any inference from such e-mails that SNG Developers Ltd did not possess any authority to communicate on behalf of the Corporate Debtor SNG Techno Build Pvt. Ltd. It is also significant that in every such e-mail or Minutes of Meeting the work of SNG Plaza has been clearly mentioned, and significantly, in the e-mail dated 11.09.2015 which calls upon Luxmi Electricals to submit the final bill of the work, the work relates to the Work Order No. SNG/GM(C)/Plaza/WO/11/460 dated 25.07.2011, which is the Work Order given by the Corporate Debtor SNG Techno Build Pvt. Ltd. to the Luxmi Electricals. Further, the invoices in relation to the R.A. Bills all relate to the same Work Order and the name of the site is clearly mentioned as Electrical Works at SNG Plaza at Gr. Noida - the Work Order dated 25.07.2011 is the genesis of the RA bills and the related operational debt. Time Limitation - HELD THAT:- It is clear that the dues payable between 01.10.2012 and 31.03.2015, remain at Rs. 8,54,593/- as no payments were made during this period. Thus, the operational debt gets limitation of three years from 1.10.2012, i.e., upto 30.09.2015. Within this period there is admission in Balance Sheet for the year ending 31.3.2016 wherein the due operational debt upto 31.3.2015 is included as Rs. 8,54,593/- - the work seemed to have been abandoned or stopped and upon a request by the Corporate Debtor vide e-mail dated 11.09.2015, the final bill was sought from the Operational Creditor. After the e-mail dated 11.09.2015, the final bill was submitted by the Operational Creditor on 24.03.2018. This final bill was granted approval by the Corporate Debtor vide e-mail dated 09.04.2018 (at Pg. 213 of the Appeal Paper Book) which is again admission of the operational debt by the Corporate Debtor. None of these facts have been controverted by the Corporate Debtor. The limitation of operational debt due was upto 23.3.2021 (i.e. 3 years from the issue of Final Bill on 24.3.18). The Section 9 Application was filed within three years of the extended limitation of 23.3.2021. In such a situation, it is clear that the Section 9 Application was filed within limitation. The Impugned Order does not suffer from any error - Appeal dismissed.
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PMLA
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2023 (9) TMI 963
Fugitive economic offender - requirements of section 297 of Cr.P.C. and the provisions of the Criminal Manual issued by the Bombay High Court complied with or not - HELD THAT:- The Deputy Director is very specific about his knowledge and it is mentioned in the verification that whatever was stated in the said application was true and correct to the best of his knowledge derived from the records. Section 297 of Cr.P.C. mentions that the deponent making the affidavit shall separately state such facts as he was able to prove from his own knowledge and such facts as he has reasonable ground to believe to be true, and in the case of his belief, he has to state the grounds of such belief. In the present case, the verification mentions that the application is filed to the best of the deponent s knowledge derived from the records. Section 21 of the FEO Act gives an overriding effect to the FEO Act and therefore even as per Section 5 of Cr.P.C. and also as per Section 21 of the FEO Act, the special procedure prescribed under the FEO Act will not get affected by any provision under Cr.P.C. All the requirements under Section 4 of the FEO Act and under Rule 3 of the FEO Rules are properly complied with in this case - there are no reason to interfere with the impugned order and hence the application is rejected.
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Service Tax
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2023 (9) TMI 1012
Non-payment of service tax - consultancy engineering services - no order passed on the stay petition filed by the appellant - appellant contend that the first appellate authority has grossly mis-directed himself by referring to an order dated 07.02.2013, which was non-existent and non-applicable to the appellant since admittedly, the date of personal hearing itself was 08.10.2013 at 02:45 p.m. HELD THAT:- The contentions of the Ld. Advocate agreed upon since the said order referred to by the lower appellate authority in OISP No. 24/2013(M-IV) dated 07.02.2013 is non-existent; even if it is in existence, the same cannot be made applicable to the appellant since the very first date of hearing itself is in October i.e., 08.10.2013 - thus, the impugned dismissal order by the first appellate authority can never sustain, There is no discussion on merits and hence, it is deemed proper to restore the case back to the file of the first appellate authority for passing a de novo order on merit alone. It goes without saying that the first appellate authority shall adhere to the principles of natural justice thereby affording reasonable and time-bound opportunities to the appellant before passing the de novo order - Appeal disposed off by way of remand.
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2023 (9) TMI 1011
Levy of penalty - benefit of closure under section 73(3) of Finance Act - differential service tax along with interest paid before issuance of SCN - HELD THAT:- In the facts and circumstances of this case appellant had rightly deposited the tax, as clarified by Board Circular dated 17/09/2004 - further the appellant was a registered assessee, and have regularly deposited the admitted taxes and have filed periodical returns. It is further evident that the whole case is due to interpretational issue (change of opinion) on the part of the Revenue - it is further found in the facts and circumstances of this case, that the benefit of closure under section 73(3) has been wrongly denied to the appellant assessee, and no show-cause notice was required to be issued. The appellant is entitled to benefit of closure under Section 73(3) the Act - Appeal allowed.
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2023 (9) TMI 1010
Valuation of service tax - supply of tangible goods service - inclusion of charges recovered from the customers on account of delay in return of cylinders in the assessable value - HELD THAT:- The identical issue has been decided in appellant s own case in AIMS INDUSTRIES LTD VERSUS C.C.E. -AHMEDABAD-I [ 2023 (1) TMI 5 - CESTAT AHMEDABAD ] where it was held that retention/detention charges is not a part of the sale price. It is only charged when the customers retain/detain the cylinders beyond the period stipulated by the appellant. Accordingly, the retention/detention charges are not includable in the transaction value of the excisable goods namely gas sold, duly packed, in the gas cylinders. The impugned order is set aside. Appeal is allowed.
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2023 (9) TMI 1009
Refund of service tax paid by mistake - applicability of time limitation - Scope of SCN - HELD THAT:- The Hon ble Karnataka High Court in the case of COMMISSIONER VERSUS KVR CONSTRUCTION [ 2011 (7) TMI 1334 - SC ORDER] have held that no limitation is applicable for refund of tax paid under mistake. Further, the Larger Bench of this Tribunal has held that under such facts and circumstances, where tax is paid by mistake, no limitation is applicable. Further, admittedly, it is the appellant, who has borne the tax. Admittedly, the appellant have paid the part of tax by challan and part of the tax has been deducted by the Rajasthan Housing Board from their bills, and deposited under RCM. Accordingly, the appellant is entitled to the refund under dispute. Scope of SCN - HELD THAT:- The Commissioner (Appeals) have erred in travelling beyond the scope of show cause notice by observing that RHB may have availed the cenvat credit and further observing that the appellant have not challenged self-assessment, at any point of time and further, where the tax is paid under mistake and the same has been accepted by the Revenue, there is no question of filing appeal against such self-assessment. Moreover, the Revenue have entertained the claim of appellant and adjudicated the same on merits. The impugned order is set aside. The Adjudicating Authority is directed to disburse the refund within a period of 45 days from the date of receipt of copy of this order along with interest as per rules - Appeal allowed.
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2023 (9) TMI 1008
Non-payment of service tax - non-filing of service tax return - construction of residential complex service - works contract or not - Period prior to 01.06.2007 - HELD THAT:- The period involved in the above appeal is clearly prior to 01.06.2007 and there is also no dispute that the nature of service alleged to have been rendered by the appellant was works contract. The Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] has observed Works contract were not chargeable to service tax prior to 1.6.2007. In view of the above specific decision and the undeniable claim of the appellant that what they provided was only works contract service, no tax is liable to be demanded on the construction contracts executed prior to 01.06.2007. Consequently, the impugned order, which cannot sustain, is set aside - appeal allowed.
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Central Excise
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2023 (9) TMI 1007
Maintainability of appeal - monetary amount involved in the appeal - HELD THAT:- For the Supreme Court, the monetary limit determined is Rs. 2,00,00,000/-. In that view of the matter, the above appeals, admittedly, having monetary limit of less than Rs. 2,00,00,000/-, are dismissed on the above count.
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2023 (9) TMI 962
Refund of education cess and secondary and higher education cess paid along with excise duty - N/N. 56/2002-CE dated 14.11.2002 as amended - HELD THAT:- The issue is no more res-integra and stands finally decided by the decision of the Hon'ble Supreme Court in the case of M/S. UNICORN INDUSTRIES VERSUS UNION OF INDIA OTHERS [ 2019 (12) TMI 286 - SUPREME COURT ] wherein the Hon'ble Apex Court, after considering the provisions of Notification No. 71/2003-CE dated 09.09.2003 has held that a notification has to be issued for providing exemption under the said source of power and that in the absence of notification containing an exemption to such additional duties in the nature of education cess and secondary and higher education cess, they cannot be said to have been exempted. Further, the provisions of Notification No. 56/2002- CE dated 14.11.2002 are pari-materia to the provisions of Notification No. 71/2003-CE dated 09.09.2003. By following the ratio of the decision in the case of M/s Unicorn Industries, there is no infirmity in the impugned order vide which the refund of the education cess and higher secondary education cess has been denied. Impugned order upheld - appeal dismissed.
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CST, VAT & Sales Tax
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2023 (9) TMI 1006
Refund of Input Tax Credit - Adjustment of refund with tax demand - Delay in processing the refund beyond - petitioner did not respond to several notices issued under Section 59 (2) of DVAT Act - time limitation - HELD THAT:- A fortiori the impugned adjustment letter dated 18 November, 2022 cannot be sustained in law since the mandate of Section 38 read with Section 39 and 59 of the DVAT Act was not followed. Therefore, the petitioner is entitled to the refund claimed. Validity of default notices of tax interest - HELD THAT: All said and done, in so far as issuance of the impugned default notices of tax interest is concerned, in light of the case of the respondent that revised return dated 31 March 2017 was filed for the 4th quarter 2015-16 and notices under Section 59(2) DVAT Act dated 19 February 2016, 27 May 2016 and 25 May 2018 were not complied with by the petitioner, the only recourse in law is to file a statutory appeal under Section 74 of the DVAT Act and it would be open to the petitioner to raise all objections regarding untenability of the impugned default notices of tax interest including under Section 34 of the DVAT Act with regard to the limitation prescribed for assessment or re-assessment. The instant Writ Petition is partly allowed to the effect that the impugned adjustment order dated 18 November 2022 is hereby quashed and the respondent is consequently directed to refund the amount of Rs. 17,10,15, 285/- for the 4th quarter of 2015-16 and also Rs. 5,44,39,148/- for the 1st quarter of 2017-18 along-with interest as per Section 42 of the DVAT Act from the date it fell due till realisation.
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2023 (9) TMI 1005
Validity of assessment order - failure of appellant to deposit the pre-deposit amount - disallowance of input tax credit - HELD THAT:- The appellant shall deposit Rs. 50 lakhs within a period of 15 days from today and Rs. 50 lakhs shall be deposited before 31.10.2023 and Rs. 1 crore before 30.11.2023 with the respondent instead of bank guarantee - The appellant shall also file an undertaking to the aforesaid effect before this court within a period of one week from today - The appellant shall tender a bond to the satisfaction of the Assessing Officer for the remaining amount of pre-deposit as directed by the Tribunal. The matter should be remanded to the First Appellate Authority as the First Appellate Authority has dismissed the appeals of the appellant without going into the merits. The matter is therefore remanded to the First Appellate Authority.
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