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TMI Tax Updates - e-Newsletter September 25, 2023 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles RECENT AMENDMENTS TO ‘IBBI (INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 2023’ ITC cannot be denied to the recipient solely on the ground that transaction not reflected in GSTR-2A INITIATION OF RESOLUTION PROCESS BY FINANCIAL CREDITOR Pre- fabricated shelters, tower, tower material are eligible for CENVAT Credit News International Seminar on Digital Public Infrastructure: Enabler for Financial Inclusion & Productivity Gains, organised in New Delhi Notifications GST - States G.O.Ms. No. 378 - dated 4-8-2023 - Andhra Pradesh SGST Andhra Pradesh Goods and Services Tax Rules, 2017-Amendments to G.O.Ms. No. 258, Revenue (CT-II) Department, dated 29.06.2017 G.O.Ms. No. 377 - dated 4-8-2023 - Andhra Pradesh SGST Andhra Pradesh Goods and Services Tax Rules, 2017- Amendments to G.O.Ms. No. 256, Revenue (CT-II) Department, dated 29.06.2017 G.O.Ms. No. 376 - dated 4-8-2023 - Andhra Pradesh SGST Andhra Pradesh Goods and Services Tax Rules, 2017- Amendments to G.O.Ms.No. 588, Revenue (CT-II) Department, dated 12.12.2017 G.O. Ms. No. 375 - dated 4-8-2023 - Andhra Pradesh SGST Andhra Pradesh Goods and Services Tax Rules, 2017- Amendments to Go. Ms. No. 259, Revenue (CT-II) Department, dated. 29.06.2017 38/1/2017-Fin(R&C)(262)/3248 - dated 21-9-2023 - Goa SGST Goa Goods and Services Tax (Third Amendment) Rules, 2023 G.O. Ms. No. 23 - dated 29-8-2023 - Puducherry SGST Special procedure to be followed by a registered person or an officer u/s 107(2) of PGST Act who intends to file an appeal against the order passed by the proper officer Income Tax 80/2023 - dated 22-9-2023 - IT Central Government notifies non-banking financial companies (NBFCs) u/s 43B to be classified as Top Layer, Upper Layer and Middle Layer 79/2023 - dated 22-9-2023 - IT Central Government notifies non-banking financial companies (NBFCs) u/s 43D to be classified as Top Layer, Upper Layer and Middle Layer Highlights / Catch Notes GST Profiteering - petitioner was not provided with the copies of the reports submitted by the Director General of Anti-Profiteering (DGAP) - The petitioner has had no opportunity to address the issues raised in the said reports. Thus, clearly, the impugned order is vitiated as it has been passed without following the principles of natural justice. - Matter restored back - HC Visit to Get Source Classification of services - Licensing services for the Right to Broadcast and Show Original Films, Sound Recordings, Radio and Television Programmes etc. - Trade Parlance / Common Parlance test is not applicable since there is no ambiguity in classification - The classification of licencing services of distribution of rights to exhibit the film by the distributor to the exhibitor are classified under SAC 999614. - AAR Visit to Get Source Income Tax Withholding Tax u/s 195 - CIT(A) examined the taxability of the non-resident under the provisions of the DTAA between India and Italy. The AO, in the Remand Report, had proposed that business income had arisen to the non-resident. However, there was no evidence to suggest that the Italian company had established a permanent establishment in India under the DTAA. Consequently, no business income was taxable in India under the DTAA. - No TDS liability - AT Visit to Get Source Disallowance of advertisement and sales promotion expenses - if the expenditure is incurred by the assessee for the purposes of the benefit of the third party or its overseas sister concern, it becomes an international transaction which could not have been resulted into disallowance u/s 37 (1) but determination of Arm/s length price of such transaction under Chapter X of The Act. - No additions - AT Visit to Get Source Penalty order u/s 272A(1)(d) - No co-operation from assessee's side - To the mind of this Bench, ‘non-cooperative attitude’ as such in itself cannot be the basis of imposing penalty under the relevant section, as above, without specifically bringing on record the specific notices, their specific non-compliances and the satisfaction of the ld. AO recorded during the assessment proceedings that there has been failure to comply with the said notice for which imposing penalty is warranted. - AT Visit to Get Source TP Adjustment - intra group services - The assessee has failed to completely demonstrate the Arm’s Length Price of intra group services by satisfying need test, benefit test, rendition test, duplicative test etc . We set aside the whole issue back to the file of AO/ TPO with a direction to the assessee to substantiate the Arm’s Length Price of the intra group services demonstrating the above tests / ingredients mentioned. - AT Visit to Get Source Validity of order passed u/s 92CA - Transfer Pricing - Since the ld. TPO order has been passed on 30/10/2015 which is clearly barred by limitation by one day by virtue of time limit provided u/s. 92CA (3) and consequently, the same has to be treated as bad in law and the same is hereby quashed. Thus, in such a situation, if there is no TPO order, consequently the entire transfer pricing adjustment proposed by the ld. TPO in international transaction becomes non-est and to be quashed and being barred by limitation. - AT Visit to Get Source Revision u/s 263 - TP Adjustment - once it is proved that assessment order is erroneous and prejudicial to the interest of revenue, the PCIT has no option except to exercise his jurisdiction under section 263. There is no bar in section 263 that the ld PCIT cannot revise the issue where it contained the determination of Arm’s Length Price. - AT Visit to Get Source Assessment u/s 153A pursuant to search - Addition based on loose paper - Assessee stated loose papers does not carry any name and it also not clear whether the amount if received or paid, the totaling also not proper - Various grounds raised by the assessee (legal heir) rejected - Additions confirmed - AT Visit to Get Source Nature of selling and marketing expenses - Revenue or Capital Expenditure - Treatment to the expenses while recognition of income - Guidance Note on Accounting for Real Estate transactions issued by ICAI - Claim to be allowed as revenue expenditure - AT Visit to Get Source Addition u/s 40A(3) - allegation of making huge cash payments in excess of Rs. 20,000/- As per the assessment order made u/s 144, no books of accounts were produced - in absence of examination of the books of accounts and without finding that such cash payments were made and debited to the profit and loss account, the AO could not have made the disallowance u/s. 40A(3). - AT Visit to Get Source Customs Imposition of penalty on container freight station (CFS) u/s 112A of Customs Act - clandestine removal by way of generating & producing bogus Custom documents - existence of mens rea or not - In absence of any statement bringing on record either knowledge of employee or of CFS, penalty under Section 112A does not get attracted - AT Visit to Get Source Corporate Law Oppression and mismanagement - grave and irreparable loss - Seeking an injunction to restrain the defendants from enforcing an anti-suit permanent injunction order passed by the High Court of Singapore - It cannot be countenanced that the plaintiff would stand restrained from pursuing the only remedy available to him before the NCLT, while the arbitration at Singapore would continue and the award that may be rendered therein would be unenforceable in India. Therefore, on the aspect of grave and irreparable loss also, the plaintiff has made out a case in his favour. - HC Visit to Get Source IBC CIRP - Preferential Transaction - transactions infringing section 43 of the IBC - the transactions made between 22.6.2021 to 30.9.2021 were all made within a period of two years immediately preceding the insolvency commencement date which is 6.10.2021. Therefore, and quite clearly, all these transactions are within the ‘relevant period’. - order of NCLT sustained - AT Visit to Get Source Recovery of Electricity dues - waterfall mechanism - The resolution plan is approved when it is in accord with the provision of the Code. Thus, the issue of corporate debtor’s dues falls within the fold of the phrase ‘arising out of or in relation to insolvency resolution’ under section 60(5)(c) of the Code. - SC Visit to Get Source Service Tax Adjustment of excess paid service tax from the liability of another period - if the contention of the appellant is accepted that they have paid excess service tax in the returns filed for the period 2013-14 then the only course left to him is to seek refund of the same. There is no provision of adjustment of excess payment of service tax of one period towards the liability of the other period. - AT Visit to Get Source Non-payment of Service tax - RCM - GTA Service or not - the demand has been raised upon the appellant alleging that they are the recipient of services of goods transport agency services provided by the CHA. Admittedly, the appellant has not been issued a consignment note. - the demand cannot be sustained if no consignment note has been issued to the service recipient - AT Visit to Get Source Central Excise Refund claim - Duty paid wrongly on goods supplied for power projects eligible for exemption - Once the Department has accepted nonpayment of duty for the previous and subsequent periods, it is not open for the Department to deny refund, if otherwise in order, for the short period during which the appellants have paid duty under mistaken notion of law. - Refund allowed - AT Visit to Get Source Refund claim - unjust enrichment - abatement percentage permitted on their product - they could not clear the goods from factory by claiming higher abatement due to oversight - goods were cleared by them to their depot and not to the ultimate consumer - The onus which is upon the party as per presumption of Section 12B is therefore not discharged - Appeal dismissed - AT Visit to Get Source Case Laws: GST 2023 (9) TMI 1054 Seeking release of Provisional attachment of property - petitioner's director has deposited a sum of Rs. 50,00,000/- - Section 83 of the Central Goods and Services Tax (CGST) Act, 2017 - HELD THAT:- Considering the fact that the petitioner's director has deposited Rs. 50,00,000/-, which stands confirmed in the Show Cause Notice No.9/2023 dated 06.02.2023 issued to the petitioner, there shall be a direction for lifting the order of attachment. The third respondent shall allow the petitioner to operate the account. Petition disposed off. 2023 (9) TMI 1053 Profiteering - Violation of principles of natural justice - petitioner was not provided with the copies of the reports submitted by the Director General of Anti-Profiteering (DGAP) - HELD THAT:- Admittedly, the reports submitted by the DGAP, pursuant to which the impugned order was passed, were not provided to the petitioner. It is not disputed that the said reports are not favourable to the petitioner. The petitioner has had no opportunity to address the issues raised in the said reports. Thus, clearly, the impugned order is vitiated as it has been passed without following the principles of natural justice. The contention that the impugned order is in favour of the petitioner is erroneous as in that case proceedings would have been terminated. However, the Authority has examined the reports submitted by the DGAP (copies of which were not provided to the petitioner) and has issued further directions for verification and investigation. The Authority has not accepted the petitioner s contention to close the proceedings. The impugned order is liable to be set aside and it is not necessary for this Court to examine any other contention - Petition disposed off. 2023 (9) TMI 1052 Violation of principles of natural justice - no clear discussion as to which provision has been referred to - Excess Tax carried forward to electronic credit ledger as state tax in Tran-1 - HELD THAT:- A reading of the impugned order indicates that there is no clear discussion as to which provision has been referred to in the paragraph immediately following the table in the impugned order. There is also no discussion in the impugned order while denying the amount of Input Tax Credit that was allegedly wrongly transmitted by the petitioner in Trans-1. The impugned order is set aside and the case is remitted back to the respondent to pass a fresh order on merits and in accordance with law within a period of four weeks from the date of receipt of a copy of this order - petition disposed off. 2023 (9) TMI 1051 Violation of principles of natural justice - SCN preceeded a notice under Rule 141(1A) of the Central Goods and Services Tax (CGST) Rules, 2017 in DRC-01A or not - adequate opportunity of hearing not provided to petitioner - HELD THAT:- The respondent is directed to keep the recovery proceedings in abeyance pending disposal of the rectification application of the petitioner under Section 161 of the respective GST enactments. Petition closed. 2023 (9) TMI 1050 Violation of principles of natural justice - respondent without serving physical notice / order the impugned order is passed which is against the Section 169(1)(b) of the Act - HELD THAT:- This Court is of the considered opinion that the impugned order is passed without serving notice as per section 169(1)(b) and without taking into account that the petitioner is having three business verticals. Therefore, this Court is inclined to quash the impugned order. Hence, the impugned order is quashed. The respondent is directed to grant opportunity to the petitioner, preferably grant personal hearing and thereafter pass orders. The petitioner shall produce all the evidences and documents before the respondent. Petition allowed. 2023 (9) TMI 1049 Seeking release of input tax credit lying in the electronic credit ledger of the said petitioner - HELD THAT:- The petitioner in W.P.No.12420 of 2022 has to either recover the amount from the petitioner under liquidation in W.P.No.2298 of 2021 and W.P.No.84 of 2022 or the 4th respondent liquidator in W.P.No.12420 of 2022 or defend its stand before the official respondents therein. The notice dated 04.01.2022 issued by the Deputy Commissioner, 1st respondent therein that has been impugned has not determined the liability of the said petitioner one way or the other - Petition dismissed. As the petitioner in W.P.No.2298 of 2021 and W.P.No.84 of 2022 is under liquidation, these writ petitions filed by the Resolution Professional for the petitioner has to be closed. The 4th respondent liquidator in W.P.No.12420 of 2022 appointed by the NCLT, Chennai is liquidating the petitioner in W.P.No.2298 of 2021 and W.P.No.84 of 2022 pursuant to the directions of the NCLT, Chennai. The liquidation has not desired to pursue with the remedy in W.P.No.2298 of 2021 and W.P.No.84 of 2022. Petition dismissed. 2023 (9) TMI 1048 Classification of services - Licensing services for the Right to Broadcast and Show Original Films, Sound Recordings, Radio and Television Programmes etc. - to be classified under SAC 997332 or not? - HELD THAT:- It is observed that SAC 9973 deals with the Leasing or Rental services without operator, SAC 99733 deals with Licensing services for the right to use intellectual property and similar products and SAC 997332 deals with Licensing sendees for the right to broadcast and show original films, sound recordings, radio and television programme etc. Further, it is specified that the service falling under SAC 997332 includes licensing services for the right to reproduce, distribute or incorporate entertainment, musical such as broadcasting and showing of original films, sound recordings, radio and television programmes, prerecorded tapes and videos. The service covered under SAC 997332 is for licensing the right to distribute and show original films by way of broadcasting the same. In the instant case, admittedly, licence is given by the distributor to the exhibitor for the purpose of exhibition in theatres, which means the exhibitor can only show the film by exhibiting the same in a theatre but cannot broadcast the same and show the film - The exhibitor in the instant case merely exhibits the film in a theatre but does not broadcast the said original film and show it. Thus the SAC 997332 is not appropriate and applicable to the instant case. In the instant case, the applicant obtains the distribution licence of the film from the producer and thus owns the copyright of the said film through the licence. The applicant in turn licences the exhibitor granting permission to exhibit the film, usually intended for theatres. It is pertinent to mention here that the film is included in the audiovisual works. Also the Note to the SAC 999614 stipulates that the transaction between the distributor and exhibitor is covered under the said SAC. The applicant in the instant case licences/grants permission to the exhibitor to exhibit the film and hence the impugned service is squarely covered under the SAC 9614 and is the most specific classification. It is found that Trade Parlance / Common Parlance test can be used only when the scheme of classification as per the Service Accounting Codes is ambiguous. In the instant case, the service of distribution of films is squarely covered under SAC 999614. The classification of licencing services of distribution of rights to exhibit the film by the distributor to the exhibitor are classified under SAC 999614. Income Tax 2023 (9) TMI 1081 TP Adjustment - MAM - DRP denied the adjustment to operating cost claimed by the assessee on the ground that claim lacks concrete evidence to support the claim of extraordinary events/expenses, which are peculiar to this assessment year, which actually affected margins earned in rejecting the adoption of Resale Price Method (RPM) as the Most Appropriate Method (MAM) on incorrect assumptions and presumptions - AR confined his arguments to the addition, contending that such an adjustment should be allowed under Transactional Net Margin Method (TNMM) and in the alternative, RPM should be taken as the MAM - Assessee desired to issue additional evidences like copy of agreement reached between AE and the assessee, with respect to loss suffered by assessee, copy of credit notes, mail communications for shortage of supply and computation of adjustment of import related expenses HELD THAT:- We are of the considered opinion that receiving additional evidence does not prejudice the case of the Revenue and on the other hand, promotes the determination of the tax liability of the assessee in a just way. With this view of the matter, we receive the additional evidence and restore the issue to the file of learned Assessing Officer/learned TPO for verification of the additional evidence in the light of the attendant facts and circumstances. In that process, AO/TPO will re-visit the suitability of the RPM as the MOM and take a view according to law. Insofar as the notional interest on money advances to AE, it is submitted by the assessee before us that Ceekay Seeds and Seedlings Pvt. Ltd., to whom the money was advanced is a resident entity situated at Secunderabad, India. Learned AR accordingly submits that for that reason, the transaction is outside the purview of the TP regulations. Assessee will produce the relevant material before AO/TPO to establish its contention - This issue also therefore, restore to the file of learned Assessing Officer/learned TPO. Grounds are accordingly treated as allowed for statistical purposes. 2023 (9) TMI 1080 Revision u/s 263 - TP Adjustment - international transaction with its Associates Enterprises (AEs) - CIT concluded AO s failure to examine the issue by not referring the SDT[specified domestic transactions] to TPO - HELD THAT:- There is no dispute that the AE while filing return of income, in its report in Form 3CEB reported various international as well as specified domestic transfer. The assessing office made reference to TPO for determination of Arm s length price of certain international transactions only. Admittedly the assessee reported specified domestic transactions with its associated enterprises for more than Rs. 47.00 Crore, which is more than the threshold limit of Rs. 10.0 Crore for making reference to the TPO. The specified domestic transaction which consist of transfer of steam from boiler unit is of Rs. 23.65 Crore. Thus, admittedly remaining specified domestic transaction of more than threshold limit of Rs. 10.00 Crore, nowhere discussed examined or disallowed by assessing officer. Deduction of section 80IA disallowed on the basis of finding of TPO in earlier years - Such action of assessing office in not in accordance with mandate of CBDT Circular no.3 of 2016. There is no dispute that the Circulars of CBDT is binding on the assessing officer. So far as other / remaining specified domestic transaction of more than Rs. 23 Crore, the assessment order is totally silent, hence, the assessment order is certainly not only erroneous on such issue but so far as prejudicial to the interest of revenue. In absence of reference to TPO with regard to such domestic transaction, the transaction remained unexamined. The specified domestic transaction has direct bearing on the computation of income, therefore, to that extent it is certainly prejudicial to the interest of revenue. Further clause (c) of Explanation-2 of section 263 is also attracts in the present case. In our considered view the twin conditions for invoking the jurisdiction under section 263 is fully met out. PCIT while granting approval of reference to TPO with regards to international transaction reported by AE, considered the issue of specified domestic transaction and now cannot review of decision of his predecessor and that impugned order will enlarge the period of limitation for passing order by TPO - We are not convinced with such submission of ld AR for the assessee, once the order passed by assessing officer is found to be erroneous and so far as prejudicial to the interest of revenue and stand revised, all necessary legal consequences are to be followed as per the statutory provisions. The AO or TPO will be bound to pass order giving effect as per the statutory proceeding. And there is no such enlargement of period of limitation as argued by ld AR for the assessee. We are also not convinced with the submissions that the ld PCIT has revived order of his predecessor by passing order under section 263. As recorded earlier that once it is proved that assessment order is erroneous and prejudicial to the interest of revenue, the PCIT has no option except to exercise his jurisdiction under section 263. There is no bar in section 263 that the ld PCIT cannot revise the issue where it contained the determination of Arm s Length Price . All the grounds of appeal raised by the assessee dismissed. 2023 (9) TMI 1079 Disallowance of capital loss - Real ownership on amalgamation - Whether no real change in ownership has taken place because of amalgamation and the real ownership remained with the assessee company? - As per AO ultimate beneficial ownership rests with the shareholders of the company and even after affecting the Scheme of Arrangement, real ownership remained with the assessee as the company BESPL became subsidiary of the holding company, which is the assessee, and there is no change in ownership of net assets prior to taking effect of the Scheme of Arrangement and post effect of arrangements but the assessee claimed to have incurred loss to the extent of without any change in ownership HELD THAT:- The entire quarrel revolves around the wrong interpretation done by the AO in respect of Section 2. AO has grossly erred in taking effective date as 01.04.2014 instead of 01.04.2015, which means that the entire findings of the Assessing Officer are the result of erroneous understanding of the order of the Hon'ble High Court of Allahabad. It was only EPC business of the assessee and MBPL transferred to BESPL by way of slump sale effective from 01.04.2014 and MBPL and EIL amalgamated with the assessee effective from 01.04.2015 which is F.Y. 2015-16 relevant to A.Y 2016-17, which is not the impugned A.Y. Since the Assessing Officer has proceeded on a wrong assumption of facts, his entire findings became erroneous and the ld. CIT(A) having correctly understood the implication of Scheme of Arrangement and effective date relevant for the transaction for the year under consideration, we do not find any reason to interfere with the findings of the ld. CIT(A). Decided against revenue. 2023 (9) TMI 1078 Assessment u/s 153A pursuant to search - Addition based on loose paper - Assessee stated loose papers does not carry any name and it also not clear whether the amount if received or paid, the totaling also not proper - Assessee (Deceased) was an Executive Engineer with PWD Department, Government of Madhya Pradesh showing income from salary and house property - HELD THAT:- As materials available on record including the Paper Book filed by the assessee. In these additions made by the A.O. on loose papers, the assessee has not justified the initial burden cast upon him/her by producing cogent evidences and materials. The assessee claimed that the transactions are relating to the office work calculation of allotment receipts, but the assessee failed to adduce any evidence from the office of PWD to prove his contention. Entry with loose paper seized assessee initially stated that these entries relating to the payments received by PWD for civil construction and maintenance work done for Medical College as deposit. But the assessee failed to adduce in support of the same either from Medical College or from the office of the PWD. Similarly the purchase of a Scorpio Vehicle, the assessee failed to prove that it belonged to the senior officer of the department, when various payments break-up are entered into the loose paper seized. Regarding Rs. 7,50,000/- treated as illegal gratification on the basis of loose paper seized, the assessee failed to substantiate the above payments were made to Shri Vinod Gupta, Anil Songra for the work done by them by PWD Department with necessary evidences. Thus the assessee failed to discharge the initial onus cast upon him/her. Unexplained expenditure - AO was not satisfied with the reply given by the assessee as the assessee has not given any details regarding the person mentioned as Sahab in the Loose Paper Seized nor has any proof of the claim of the payment of the amount mentioned in the Loose Paper seized by the so called Sahab has been furnished. The assessee has also not discharged its onus of submitting any documentary evidence in respect of the claim that the transaction could be in the official record of the department. Had it been expenditure incurred for any official vehicle, the assessee could have furnished the relevant documents/confirmation from the office of PWD to explain the above transaction. Assessee has not produced the Registration Certificate of the so called scorpio vehicle before any of the lower authorities to sustain his stand that it belongs to the higher officer or to the PWD Office. In the absence of any proof to that extent, the explanation offered by the assessee cannot be accepted. AO was justified in treating as unexplained expenditure incurred by the assessee out of this undisclosed income. Therefore the same addition is hereby confirmed. Purchase of Plot at Gora Bishan Khedi - Assessee and his wife had never earned any income from conducting tuition or running Beautician for the earlier years which are source of purchasing the lands. There was no return of income filed for the above years. In the absence of the source of income, AO was justified in holding the additions on substantive basis in the hands of the husband and protective additions in the hands of the wife are hereby deleted. Investment in ICICI Prudential Policy - A.R. claimed that the investments were from the past savings and by teaching activity and beauty parlour which are unorganized activities, hence no details of the same could be produced before the Authorities - Assessee failed to produce Shri Shakil Ahmed and confirmed that she do not have detail about the Shakil Ahmed. Further it is stated that the sum of Rs. 51,00,000/- was received in cash for surrendering of rights in the said property which are also made up story just to try to show that the availability of cash in the hands of the assessee. A.O. clearly added the same as the unexplained investment in the hands of the assessee. Thus the findings of the Lower Authorities is not contravented by the assessee by producing relevant documents/ evidences before the any authorities. In the absence of the same, the substantive additions made in the hands of late Jitendra Bhasne does not require any interference, however protective additions made in the hands of Smt. Bharti Bhasne is liable to be deleted. Thus the grounds raised by the assessee are devoid of merits and the same is liable to be dismissed. Addition on account of cash found during the course of search - The Insurance Policy that too of higher denomination of Rs. 50,000/- and above cannot be paid by cash. Those transactions is to be routed through only cheques or DDs in favour of the Insurance Company. Further past savings of Rs. 86,000/- why it was seized from the briefcase of the assessee is not properly explained. In the absence proper explanation by the assessee with necessary evidences, the additions made by the Assessing Officer does not require any interference. Thus the ground raised by the assessee is hereby rejected. Addition towards Registry expenses for purchase of plot at Kerwa Dam - A.O. has rejected the explanation of the assessee that the payment is from the past savings of the assessee - Since the cash flow chart/statement of affairs of Smt. Bharti Bhasne submitted during the course of assessment proceedings already stand rejected and it was held that she was not having any regular source of income before commencing her work as an Insurance agent. The Ld. CIT(A) also confirmed that Smt. Bharti Bhasne did not have regular source of income before starting her profession as an agent of ICICI Prudential Insurance in 2006. There is no evidence to show that she had earned income from private tuition and beauty parlour business. Thus rejected the cash flow statement submitted by the assessee. In the absence of any evidence, we have no other option but to confirm he addition made by the AO. Thus the ground raised by the assessee is devoid of merits and the same is hereby dismissed. 2023 (9) TMI 1077 Nature of selling and marketing expenses - Revenue or Capital Expenditure - Treatment to the expenses while recognition of income - Guidance Note on Accounting for Real Estate transactions issued by ICAI - assessee is following Percentage of Completion Method for recognition of revenue from real estate transactions carried out by the assessee - HELD THAT:- We find that the fact of assessee not recognizing any income from sale of flats in accordance with the Guidance Note issued by ICAI while following Percentage of Completion Method, is not disputed by the ld. AO in the instant case. We find that the ld. AO had not doubted the incurrence of selling and marketing expenses for business purposes AO had not stated that the same are personal in nature ; the ld. AO had not stated that the same are capital in nature and the AO had not stated that the same were incurred in violation of Explanation 1 to Section 37(1) of the Act. Whether the selling and marketing expenses could be claimed as revenue expenditure independently by not including the same by capitalizing to Project Costs? - We find as per the Guidance Note issued by ICAI on Accounting for Real Estate Transactions , the selling and marketing expenses had to be charged off to revenue in the year of incurrence and not to be included in the project costs, which has been factually done by the assessee in the instant case. This fact is duly appreciated by the ld. CIT(A) in the instant case while granting relief to the assessee, subject to assessee complying with the provisions of section 40(a)(ia) of the Act. Hence we do not find any infirmity in the order of the ld. CIT(A) in this regard. Accordingly, the grounds raised by the revenue are dismissed. Disallowance made on account of gifts - It is not in dispute that the assessee is in the real estate business wherein purchase of land and sale of projects is the most critical and commercially important activity and hence it was very important for the assessee to keep land aggregators and brokers in good humor. The assessee had submitted that it had purchased land parcels worth Rs. 399 crores till the year end. It is customary to incur these expenses on various auspicious occasions especially festivals like Diwali to be given to brokers, persons who work on behalf of the assessee company, customers and suppliers of the assessee, in order to keep them in good humor. It is a fact that by incurrence of these expenditure at the proper time like Diwali occasion would certainly strengthen the relationship of the assessee with the persons who work for the assessee company, customers and suppliers which in turn would enable the company to have continued relationship with the parties. Hence we hold that the said expenditure is held for the purpose of business as per the principle of commercial expediency. 2023 (9) TMI 1076 Addition u/s 40A(3) - assessee company made huge cash payments in excess of Rs. 20,000/- in connection with development of housing plots at Bangalore - HELD THAT:- AO is trying to invoke the provisions of section 40A(3) for some site expenses and other expenses, but not on account of any payments made to Shri B.V. Sampath and family members by the assessee. Even in the remand report also, the AO had given vague answer according to which he is presuming that part of the payments might have reached Shri B.V. Sampath. This in our opinion cannot be the basis for addition u/s. 40A(3). For attracting the provisions u/s. 40A(3), there must be some cash payments recorded in the books of accounts. However, in the instant case as mentioned earlier no books of accounts were produced during the course of assessment proceedings for which the assessment was completed u/s. 144 of the I.T. Act and therefore, the AO could not have invoked the provisions of section 40A(3). So far as the statement of the Director is concerned, we find nowhere he has stated that they have paid an amount of Rs. 1.50 crore towards purchase of land. We also agree with the observation of the ld.CIT(A) that in absence of examination of the books of accounts and without finding that such cash payments were made and debited to the profit and loss account, the AO could not have made the disallowance u/s. 40A(3). DR also could not controvert the finding of the ld.CIT(A) that the AO had made the same disallowance of Rs. 1.50 crores u/s. 40A(3) in the subsequent assessment year i.e. AY 2009-10 also. Since, no evidence either oral or documentary has been brought on the record by the AO that in fact the said cash payments were made by the assessee company to Shri B.V. Sampath and family members, therefore, order of the ld.CIT(A) deleting the addition of Rs. 1.50 crores made by the AO u/s. 40A(3) upheld - Decided against revenue. 2023 (9) TMI 1047 Direct Tax Vivad se Vishwas scheme - settlement in respect of tax arrear - ineligibility to file declaration - debar to petitioner from filing a declaration for settlement of tax arrear - As decided by HC [ 2021 (3) TMI 1089 - BOMBAY HIGH COURT] no hesitation to hold that either on a literal interpretation or by adopting a purposive interpretation, the only exclusion visualized under the said provision is pendency of a prosecution in respect of tax arrear relatable to an assessment year as on the date of filing of declaration and not pendency of a prosecution in respect of an assessment year on any issue. The debarment must be in respect of the tax arrear as defined under section 2(1)(o) of the Vivad se Vishwas Act. To hold that an assessee would not be eligible to file a declaration because there is a pending prosecution for the assessment year in question on an issue unrelated to tax arrear would defeat the very purport and object of the Vivad se Vishwas Act HELD THAT:- We are not inclined to interfere with the impugned judgment as the criminal prosecution relates to delayed payment of self-assessment tax and the application under the Direct Tax Vivad Se Vishwas Act, 2020. For short, Act relates to the additions made in the assessment order. Criminal prosecution was on a separate and different issue, and would have continued, even if the application under the Act was accepted. We are informed that the prosecution case has been dismissed. That may not be material and relevant in terms of the objective and purpose of the Act. Recording the aforesaid, the special leave petition is dismissed. 2023 (9) TMI 1046 Levy of Penalty - ITAT deleted the penalty in the remand back proceedings which was confirmed the HC - Satisfaction of the AO - Retrospective Amendment by Finance Act, 2008 - Constitutional validity of Section 271 (1B) - HELD THAT:- Delhi High Court had remanded the matter to the Income Tax Appellate Tribunal (ITAT) for fresh consideration in light of the judgment, which is impugned in this appeal. On remand, the ITAT, Delhi Bench-B, New Delhi granted relief to the respondent/Assessee by allowing her appeal. The said order was challenged by the Revenue [ 2013 (3) TMI 75 - DELHI HIGH COURT] before the Delhi High Court. The Division Bench of the Delhi High Court, however, dismissed the appeal. Hence, learned counsel for the respondent submitted that as far as the respondent/Assessee is concerned, the appeal filed by the appellants herein has been rendered infructuous and, therefore, an appropriate order may be made in this appeal. As appellant(s)/Union of India and Anr. did not contradict the aforesaid facts submitted by learned counsel for the respondent. He, however, submitted that questions of law, which arise in this appeal may be left open, to be agitated in other appropriate case. Having regard to the submissions of learned counsel for the respective parties, we dismiss this appeal insofar as only the present respondent/Assessee is concerned in view of the aforesaid developments. However, the questions of law, which arise in this appeal are left open, to be agitated by the appellants in any other appropriate case. 2023 (9) TMI 1045 Deduction of income from export of cashew kernels u/s 80HHC - question that fell for consideration before the High Court was, whether, the Revenue was justified in holding that the retrospective amendment to Section 80-HHC(3) of the Act entitled the Assessing Officer to invoke the powers of rectification u/s 154 of the Act to bring the assessment orders in tune with the amendment - as per HC [ 2010 (3) TMI 1281 - KERALA HIGH COURT] while considering the amendment to Section 80HHC(3) by the Taxation Laws (Amendment) Act, 2005 with retrospective effect from 01.04.1992 and the fact that the assessments pertained to the years 1999-2000 and 2000-2001, although the assessments and reassessments were completed, held that the power of rectification under Section 154 of the Act was rightly exercised by the Assessing Officer. Therefore, the appeals filed by the Revenue were allowed and consequently the matter(s) were remanded to the Tribunal for reconsideration of the appeals on other grounds. HELD THAT:- This Court in Avani Exports and Anr. [ 2015 (4) TMI 193 - SUPREME COURT] held essence the High Court has quashed the severable part of third and fourth proviso to Section 80-HHC(3) and it becomes clear therefrom that challenge which was laid to the conditions contained in the said provisos by the respondent has succeeded. To make the position crystal clear, we substitute the direction of the High Court with the following direction that having seen the twin conditions and since Section 80-HHC benefit is not available after 1-4-2005, we are satisfied that cases of exporters having a turnover below and those above Rs.10 crores should be treated similarly. This order is in substitution of the Judgment in appeal This position has been clarified by this Court in Union of India vs. Paliwal Overseas Private Limited [ 2016 (12) TMI 615 - SUPREME COURT] as far as issue relating to turnover below 10 crores and above 10 crores is concerned, the same has already been answered by this Court in the recent order dated 30-3-2015 in CIT v. Avani Exports making it clear that it applied to both categories. In terms of the said order, these appeals are also disposed of. Order dated 30-3-2015, as mentioned above, shall form part of this judgment . Having regard to the fact that this Court accepted the judgment of the High Court impugned therein except to the aforesaid extracted portion wherein this Court stated that the twin conditions under Section 80-HHC(3) which have been quashed by the High Court would apply to both categories of exporters having a turnover above Rs.10 crores and those having a turnover below Rs.10 crores and sustaining the impugned judgment of the High Court in all other respects, we find that the direction for remand after the judgment of this Court in the aforecited case would be otiose and wholly unnecessary. In fact, the issue having been settled, the remand has become redundant. In the circumstances, we set aside the impugned order(s) of the High Court. The appeals are, accordingly, allowed. 2023 (9) TMI 1044 Addition of expenditure as commission on export of goods - payment on behalf of the Assessee to its overseas agents for facilitating its export business - Department's appeal is on the footing that no deduction/expenditure, which was not claimed in the return of income, could be claimed before the Assessing Officer without filing any revised return - As decided by HC [ 2019 (7) TMI 645 - BOMBAY HIGH COURT] what the Assessee received from its foreign buyers was the net FOB value; the Assessee was not claiming any expenditure on account of commission paid and, there was, thus, no question of any revised return - HELD THAT:- Having heard learned Additional Solicitor General appearing for the petitioner at a considerable length and after carefully perusing the material available on record, we are not inclined to interfere with the impugned Order passed by the High Court. Special Leave Petition is, accordingly, dismissed. 2023 (9) TMI 1043 Validity of reopening of assessment - reopening as initiated beyond 4 years - Reasons to believe - As decided by HC [ 2022 (12) TMI 404 - KARNATAKA HIGH COURT] notice u/s 148 is to be issued after expiry of four years or before expiry of six years, the assessee should have failed to disclose the material facts and on consideration of the material on record has held that AO has not even stated or alleged that there was failure on the part of assessee to disclose fully and truly all the material facts necessary for the said assessment years - HELD THAT:- Delay condoned. Application seeking exemption from filing certified copy of the impugned order is allowed. This Court is of the opinion that the impugned order does not call for interference. The Special Leave Petition is, accordingly, dismissed. 2023 (9) TMI 1042 Reopening of assessment u/s 147 - Reason to believe - non independent application of mind by AO - HELD THAT:- Notice under Section 148 of the Act has been issued without ascertaining the income that has escaped assessment and AO has merely stated, I have reason to believe that income of Rs. 7,00,000/- chargeable to tax in assessee s case has escaped assessment, which shows that proceedings have been initiated in a casual manner so as to conduct roving inquiries. The AO in his letter dated 15th September 2014 and 14th August 2014 respectively rejecting the objections raised by Petitioners, has given fresh reasons not included in the reasons as recorded under Section 148(2) of the Act, which Courts have time and again held cannot be done. These reasons cannot be improved upon and/or supplemented much less substituted by affidavit and/or oral submissions. Just because some information has been received from the Investigation Wing, do not entitle Respondents to re-open assessment. 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. What we find is that there are no reasons to believe but, only reasons to suspect. Hence, re-opening of assessment is not satisfactory. We hereby quash and set aside the impugned notices issued under Section 148 - Decided in favour of assessee. 2023 (9) TMI 1041 Reopening of assessment u/s 147 - Reasons for the belief that income has escaped assessment - reopening notice beyond four years - HELD THAT:- In the case at hand, the AO does not say that any income chargeable to tax has escaped assessment. All that the AO desires is examination of certain details pertaining to the amount paid by Petitioner to Crown . That cannot be stated to be founded on the belief that any income which is chargeable to tax has escaped assessment and hence such verification is necessary. Just because some information has been received from the Investigation Wing, does not entitle Respondent to re-open assessment. 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. What we find is that there are no reasons to believe but, only reasons to suspect. Hence, re-opening of assessment is not satisfactory. notice set aside - Decided in favour of assessee. 2023 (9) TMI 1040 Mistake made in filling up the two challans accompanied the deposit of the self-assessment tax - principal grievance of the petitioner is that he deposited (albeit, in two tranches) towards tax was inadvertently captured against under Assessment Year (AY) 2019-20 instead of AY 2020- 21 - It is also the petitioner s case that there was no requirement to make a deposit towards the self-assessment tax in AY 2019-20, since it had suffered losses in the relevant period. HELD THAT:- As submitted revenue could deal with the petitioner s requests in one of three ways: (i) First, refund Rs. 40,00,000/- to the petitioner. (ii) Secondly, condone the delay and permit the petitioner to file a revised return. (iii) Thirdly, allow the petitioner to adjust Rs. 40,00,000/- deposited by the petitioner for against another AY. Thus having regard to what is put forth by the learned counsels for the parties before us, the writ petition is disposed of with a direction to the CBDT to examine the three alternatives placed before us by the petitioner. CBDT will, thereafter, take a decision as to what would be the best way forward. The CBDT is requested to pass a reasoned order and have the same communicated to the petitioner. Needless to add, before any decision is taken, the CBDT will hear the authorized representative of the petitioner, in that behalf. 2023 (9) TMI 1039 Validity of assessment order passed u/s 147 r/w 144B - petitioner, confines his challenge, to the infraction of principles of natural justice - Via the SCN, the petitioner was granted time to file a response by 10.05.2023 (15:46 hours). The petitioner made a request on the very next date i.e., 09.05.2023, for adjournment. The petitioner sought adjournment till 18.05.2023. The reason given by the petitioner for seeking adjournment was that she had to gather material to respond to the SCN. It is the petitioner s case that the request was not dealt with and on 18.05.2023 when she attempted to upload her response, she could not do so as the designated portal had been closed. These facts are not in dispute. HELD THAT:- The assessment order, as indicated above, was passed on 18.05.2023. Without making any observations on the merits of the matter, we are inclined to set aside the assessment order, as this would be the best way forward. 2023 (9) TMI 1038 Addition u/s 69 - difference between estimated value of construction adopted by D.V.O. being declared by the assessee - A.O. made addition based on the cost of construction as determine by the DVO held to be fair market value of construction done in the respective Assessment Years - Whether CIT (A) has erred in law and on facts while taking into consideration the valuation report of D.V.O. which is erroneous and arbitrary as the rate of construction adopted by the D.V.O. is on higher side and based on estimate and assumption? - HELD THAT:- Report of the DVO is also not in accordance with the minimum rate of construction as adopted and published by the Govt. of NCT of Delhi through Special Inspector General (Registration) vide notification dated 22.09.2014 in the said notification issued by the Governor of Delhi, the minimum rate of construction was stipulated at Rs. 11,160/- per sq. meter and Rs. 1,036/- per sq. meters for construction of residential unit falls under 'D' category of Delhi. Considering the fact that the A.O. has not assigned any reason to reject the valuation report submitted by the assessee and apart from the same the A.O. has not even provided opportunity to the assessee to cross examine the DVO and not considered the objection filed by the assessee on the Report of the DVO, further considering the fact that as on 22/09/2014, the cost of construction as per Stamp Duty Rules being Rs. 11,160/- per square meter which has been considered by the Government Valuer while giving the Valuation Report which was supported by the Notification published by the Government of NCT Delhi, in our opinion, the authorities have committed error in accepting the Report of the DVO and rejecting the Valuation Report of Government Approved Valuer submitted by the assessee. A.O. should have summoned the DVO for cross examination to ascertain the basis of the rates or to ascertain the contradictions in the rate adopted by the DVO and the Stamp Duty Rules in the absence of the same, the A.O. committed error in relying on the said report of the DVO and making addition which not only erroneous but also the same is against natural justice. 2023 (9) TMI 1037 Long term capital gains - FMV determination - CIT(A) confirming the addition as LTCG by adopting miniscule market value as on 01.04.1981 of land sold by the appellant - It was the case of the assessee that the land sold by her could not be compared with the value adopted by the Hon'ble Supreme Court in the case Premawati Vs. Union of India and Ors. [ 2013 (7) TMI 1217 - SUPREME COURT] and also Rajender Singh (D) by LRs Vs. Delhi College of Engineering [ 2013 (7) TMI 1217 - SUPREME COURT] and contended that her land was better located and was not an agriculture land. HELD THAT:- The assessee except making the above assertions that the land sold by the assessee was in a better position, not produced any evidence before the Lower Authorities to prove that the Assessee s land that of the Hon'ble Supreme Court of India had decided the fair market and no specific difference has been pointed out by the assessee. Therefore, in our opinion, in the absence of any material to prove that the land of the assessee and the land for which the Hon'ble Supreme Court has decided the fair market value at Rs. 50,000/- per Bigha are different and in the absence of any supporting evidence in support of the contention of the assessee, we find no error or infirmity in the orders of the Lower Authorities in adopting fair market value on the basis of the decisions of Hon'ble Supreme Court of India. Appeal filed by the assessee is dismissed. 2023 (9) TMI 1036 TDS u/s 195 - non-deduction of tax at source on payment made to Italian company[non-resident company] for supply of manufacturing plant of tissue paper - liability u/s 201(1) and 201(1A) - Whether business income was taxable in India under the DTAA? - HELD THAT:- The entire plant was supplied in movable packages and assembled with the help of two local contractors engaged by the assessee. No documentary evidences are presented by the Assessing Officer or ld CIT(DR) to establish that plant was assembled or commissioned by the non-resident in India. In the absence of any such documentary evidence, no income can be accrued or arisen or deemed to have accrued or arisen to the non-resident in India under the provisions of the Act. CIT(A) examined the taxability of the non-resident under the provisions of the DTAA between India and Italy. The AO, in the Remand Report, had proposed that business income had arisen to the non-resident. However, there was no evidence to suggest that the Italian company had established a permanent establishment in India under the DTAA. Consequently, no business income was taxable in India under the DTAA. In conclusion, as no income accrued to the non-resident either under the Act or the DTAA, the assessee was not obligated to comply with Section 195(1) of the Act - Decided in favour of assessee. 2023 (9) TMI 1035 Addition u/s 68 - genuineness creditworthiness of foreign entities/ ultimate investors were not properly established by the assessee - assessee failed to discharge its onus to prove the genuineness of these transactions as the Cleartrip Inc. (Mauritius) did not have its own fund to invest and money trial revealed that main source of these funds were routed through various accounts - HELD THAT:- To show the creditworthiness of the private equity investors in Cleartrip incorporation Cayman Island assessee submitted their profile and the annual financial statements of Cleartrip incorporation Mauritius. The learned assessing officer did not have any material, which controverts above submission and information. There is information about FT7TR reference made by LD AO. For this assessment year assessee has proved identity and creditworthiness of investor as well as the genuineness of the transaction of investment in equity shares of the company. Apparently, assessee has discharged its initial onus cast upon the assessee under the provisions of section 68 of the income tax act. Therefore, we find that the assessee has fairly demonstrated the identity, creditworthiness and the genuineness of the transition by producing extensive material independently for this year also. Proviso to section 68 does not apply to a non-resident investor. Even otherwise assessee has shown nature and source of funds in the hands of Nonresident 100% holding company investor also independently. Hence, we confirm the order of the learned CIT (A) deleting the above addition. No merit in the appeal of the learned Assessing Officer. Hence, the solitary ground of appeal against the deletion of addition is dismissed. Disallowance of advertisement and sales promotion expenses - As stated that the even if there is an incidental indirect third-party benefit, it would not result into characterization of expenditure as not incurred wholly and exclusively for the business of the assessee, no disallowance in the hands of the assessee can be made - HELD THAT:- AO despite having the complete detail of such expenditure could not give any independent finding on examination of such detail that the expenditure incurred by the assessee is not wholly and exclusively incurred for the purpose of the business of the assessee. Though assessee denied that there is any benefit to the third parties, however, even if there is an incidental indirect benefit to the some other parties, that would not entitled to revenue to disallow the expenses incurred by the assessee for its own business purposes. We find that if the expenditure is incurred by the assessee for the purposes of the benefit of the third party or its overseas sister concern, it becomes an international transaction which could not have been resulted into disallowance u/s 37 (1) but determination of Arm/s length price of such transaction under Chapter X of The Act. In absence of any evidence placed by the learned assessing officer that these expenditure has resulted into benefit to the third-party and these are not incurred wholly and exclusively for the purposes of the business of the assessee, we do not find any reason to sustain the disallowance. Disallowance of expenditure of advertisement and sales promotion expenditure being 20% of the total expenditure of advertisement and sales promotion expenses incurred by the assessee is allowed. 2023 (9) TMI 1034 Penalty order u/s 272A(1)(d) - non-cooperative attitude of the assessee - As argued penalty orders have been passed without application of mind as the orders do not disclose as to which notice was not complied with - as submitted that the assessments are completed u/s 153(C) and not u/s 144 as such there cannot be any penalty for non-compliances - HELD THAT:- The penalty order does not mention as to which notice and under what provisions of law was issued, how served and which was not responded by the assessee. As the matter of fact, the assessments have been completed u/s 153C of the Act and no adverse inference was drawn against the assessee to pass an order on best judgment basis u/s 144C. The respective assessment orders cited before us in PB also do not show that if at the time of assessment. Ld. AO had made observation as to which specific document or information sought was not supplied. It appears from the penalty orders that the dispute was with regard to some external hard disc which was sought to be produced but was not produced by the assessee on the basis that it was not readable or corrupt and on that basis the AO issued notice at the time of conclusion of assessment. Unless it is established in the assessment order or even under the penalty order that at the time of assessment proceedings itself, Ld. AO had formed opinion that there was intentional non-compliance justifiying issuing notice u/s 271(1)(d) or u/s 272A(1)(d) of the Act, Ld. AO is not justified to levy penalty. Ld. CIT(A) has also sustained the addition on the basis of non-cooperative attitude of the assessee. To the mind of this Bench, non-cooperative attitude as such in itself cannot be the basis of imposing penalty under the relevant section, as above, without specifically bringing on record the specific notices, their specific non-compliances and the satisfaction of the ld. AO recorded during the assessment proceedings that there has been failure to comply with the said notice for which imposing penalty is warranted. Decided in favour of assessee. 2023 (9) TMI 1033 Difference of stock of silver - Addition on account of alleged excess stock-in-trade on the date of survey - reliance on statement recorded on oath during the survey u/s 133A of the Act about stock of silver to the tune of 200 Kg of silver - according to the AO, when the physical inventory of silver was being carried out, mob of locals/association of traders came inside the shop and disrupted the survey operation; and in the ruckus created by the unruly mob, the physical inventory couldn t be completed and the papers prepared by them, were torn and resultantly, the survey team had to leave the jewellery premise without completing their assigned task. HELD THAT:- As statement u/s 133A of the Act recorded on 06.01.2012 cannot be held to be voluntarily given; and the assessee s explanation shows that he made the statement on estimation which includes both pure impure silver. And since no physical inventory was prepared (due to disturbance) there is no other material in the hands of the AO/Ld. CIT(A) to make/confirm the allegation of excess stock of silver, therefore the addition made of Rs. 1,84,080/- was not warranted. As assessee has explained within 15 days the difference of stock as admitted during survey and reflected in books, which is a plausible view, so assessee s appeal is allowed. Therefore, the addition made by AO cannot be sustained and so directed to be deleted. Appeal of the assessee is allowed. 2023 (9) TMI 1032 Addition of unexplained cash u/s. 69 - Whether the addition u/s. 69 is sustainable particularly when both the parties, the appellant and M/s. Eureka Builders has denied such cash payment made by the appellant - HELD THAT:- Neither the legal notice issued to the appellant by the said M/s. Eureka Builders has earned any credence from the authorities which ought to have been considered in its proper perspective in view of the particular fact that the creditor itself is denying of receiving the loan of Rs. 50 Lakhs in cash from the appellant. We also find that the denial on the part of M/s. Eureka Builders has been considered by the Ld.CIT(A) to this effect that such might have been for the specific purpose of making its case stronger as the matter was under dispute. This observation, according to us, is merely on surmise and conjectures. The authorities below ought to have considered the entire aspect of the matter is its proper perspective that too on the basis of the documents placed before them. Whereas, in this particular case the documents mainly the legal notices were not been considered in its true sense. Neither we find, any other iota of evidence in support of such observation made by authorities below against the appellant so as to substantiate the addition made u/s. 69 to the impugned amount - Hence we do not find any cogent reason in making such addition particularly when both the parties in dispute are denying the repayment of loan of Rs. 50 Lakhs by cash. Decided in favour of assessee. 2023 (9) TMI 1031 Addition u/s. 68 - unexplained cash credit in the form of share capital with premium - Onus to prove - HELD THAT:- The assessee has successfully discharged its onus by proving the identity and creditworthiness of the share applicants and cash creditors and genuineness of the alleged transaction of receiving share application and unsecured loans and, therefore, the addition made u/s 68 is uncalled for and is hereby deleted. 2023 (9) TMI 1030 Validity of the reassessment order framed u/s 143(3) r.w.s 147 in the absence of fresh tangible materials - assessee contended that the AO has formed reasons to believe that the income of the assessee has escaped assessment merely on verification of the same set of documents which were available during the assessment proceedings - HELD THAT:- What is emerging from the above reasons is this that the AO has initiated the proceedings after verification of the case records which implies that there was no fresh tangible material available on record distinct from what was available during the original assessment proceedings. Thus, in the absence of any fresh material coming to the notice of the AO giving rise to draw the reasons to believe that the income of the assessee has escaped assessment, in our considered view, is without any basis and therefore the proceedings initiated under section 147 of the Act is liable to be quashed. Thus we are of the opinion that the reopening is not as per the provisions of law but based on the same set of documents which were available during the original assessment proceedings. Accordingly, we quashed the proceedings initiated u/s 147 of the Act. Decided in favour of assessee. 2023 (9) TMI 1029 Deduction u/s 11 - Claim denied as audit report in Form 10B is not filed alongwith the return of income as laid down in section 12A(1)(b) - CIT(A) allowed the claim - HELD THAT:- The appellate proceedings being the continuation of assessment proceedings merely because the assessee has not furnished at the threshold i.e. furnishing the audit report along with return of income, but filed during the assessment proceedings, and available even during the appellate proceedings, it cannot be stated that the assessee has failed to comply with the provisions so as to deny substantial justice by way of granting exemption. As in a recent decision in Social Security Scheme of GICEA [ 2022 (12) TMI 1172 - GUJARAT HIGH COURT] in the matter of exemption provisions contained in section 11/12 of the Act, requiring filing of Form 10B alongwith return of income for claiming exemption, held the requirement of furnishing of report to be a mandatory requirement while that of filing the report alongwith return of income to be a procedural requirement. We have no hesitation in holding that the Ld. CIT(A) has rightly held the denial of exemption u/s 11 of the Act for non-filing of requisite form alongwith return of income, to be not as per law, noting the fact that the assessee did file the requisite form during regular assessment proceedings and appellate proceedings before him. Decided against revenue. 2023 (9) TMI 1028 TP Adjustment - determination of Arm s Length Price of the intra group services - comparision of manufacturing company with marketing company - assessee failed to prove the rendition of intra group services as well as benefit derived from those services - as per TPO for purposes of determination of Arm s Length Price of the intra group services, assessee must demonstrate the Need test, benefit test, rendition rest and to show that services are not duplicative in nature and are not part of shareholders‟ activity - HELD THAT:- Assessee submitted the functional and economical analysis of the assessee as well as the nature of the services, however, the learned lower authorities have held that Associated Enterprises is responsible for marketing support services. Further, the email correspondence and other documents produced by the assessee were also not discussed. The assessee was considered as a distributor , but it is a manufacturer and therefore, naturally the assessee cannot be considered as a distributor. Further, determination of Arm s Length Price of marketing support services by applying the proportionate sales percentage based on the sale of comparable companies is also not a correct approach for the reasoning nature of the services rendered by Associated Enterprises to the assessee was not demonstrated to be similar. The assessee has also failed to completely demonstrate the Arm s Length Price of intra group services by satisfying need test, benefit test, rendition test, duplicative test etc . We set aside the whole issue back to the file of AO/ TPO with a direction to the assessee to substantiate the Arm s Length Price of the intra group services demonstrating the above tests / ingredients mentioned. On submission of the detail by the assessee, the learned Transfer Pricing Officer may examine and determine the Arm s Length Price in accordance with the law. TPO may examine the claim of the assessee and determine the Arm s Length Price of these intergroup services. We make it absolutely clear that Onus would be on assessee first to show that international transaction is at arm's length. 2023 (9) TMI 1027 Validity of order passed u/s 92CA - Period of limitation - counting of 60 days - draft assessment order was passed u/s. 143(3) r.w.s. 144C(1) - HELD THAT:- The period of limitation for making the assessment order as per Section 153(3) was 31/03/2014, i.e., 24 months from the end of the assessment year. The extension of period of limitation made u/s. 92CA (3) and also as per proviso to Section 153(1) was upto 31/03/2015 i.e. after a period of 12 months. The proceedings for the assessment have been completed before 31/03/2015 and prior to the date of which limitation expires as per Section 92CA(3A) was 29/01/2015 as the date prior to the date of which limitation expires is 30/03/2015 and 60 days expires on 31/02/2015. Accordingly, in view of the Section 92CA(3), TPO s order which has been passed u/s. 92CA(3) on 29/12/2015 wherein in this case it has been passed on 30/01/2015.The period of limitation for making the assessment order as per Section 153(3) was 31/03/2014, i.e., 24 months from the end of the assessment year. The extension of period of limitation made u/s. 92CA (3) and also as per proviso to Section 153(1) was upto 31/03/2015 i.e. after a period of 12 months. The proceedings for the assessment have been completed before 31/03/2015 and prior to the date of which limitation expires as per Section 92CA(3A) was 29/01/2015 as the date prior to the date of which limitation expires is 30/03/2015 and 60 days expires on 31/02/2015. Accordingly, in view of the Section 92CA(3), ld. TPO s order which has been passed u/s. 92CA(3) on 29/12/2015 wherein in this case it has been passed on 30/01/2015. Ergo, the TPO can pass an order u/s 92CA of the Act at any time before 60 days prior to the date on which period of limitation referred to u/s 153 expires. Thus 60 days have to be counted prior to the date of last date of limitation u/s 153. The time limit for passing the ld. TPO order in the case of the assessee was 29/01/2015 as noted above which is not in dispute. Since the ld. TPO order has been passed on 30/10/2015 which is clearly barred by limitation by one day by virtue of time limit provided u/s. 92CA (3) and consequently, the same has to be treated as bad in law and the same is hereby quashed. Thus, in such a situation, if there is no TPO order, consequently the entire transfer pricing adjustment proposed by the ld. TPO in international transaction becomes non-est and to be quashed and being barred by limitation. We quashed the final assessment order being barred by period of limitation u/s. 92CA (3). Customs 2023 (9) TMI 1075 Valuation of export goods - deemed export - undervalued clearances of PTA made to deemed export category buyers - it was held by CESTAT that The transferred advance license, can be beneficial for the appellant for duty free inputs of the raw materials required for manufacture in the appellant s factory. Hence, certain benefit accrued to the appellant through the receipt of transferred advance licenses. HELD THAT:- Since, the question involved in these appeals is covered against the appellant as per the judgment of this Court in Commissioner of Customs, Cochin v. GTN Textiles [ 2022 (10) TMI 579 - SUPREME COURT] , these Civil Appeals stand dismissed. 2023 (9) TMI 1074 Imposition of penalty on container freight station (CFS) u/s 112A of Customs Act - existence of mens rea or not - cosmetics items mis-declared as Baby diapers - clandestine removal by way of generating producing bogus Custom documents - HELD THAT:- In the instant case law of M/s. Munjal Showa Munjal Showa Ltd [ 2022 (9) TMI 1076 - SUPREME COURT] , has no relevance as the same was pronounced, when import was made under forged license and purchaser in good faith wanted to benefit on the strength of such purchase. Same is not the situation here. In absence of any statement bringing on record either knowledge of employee or of CFS, penalty under Section 112A does not get attracted, as decided by the Hon ble High Court of Gujarat in the matter of RAMA NAGAPPA SHETTY VERSUS COMMISSIONER OF CUSTOMS [ 2020 (10) TMI 741 - GUJARAT HIGH COURT ] and as followed in the matter of SANDEEP GARG COMPANY VERSUS C.C. -JAMNAGAR (PREV) , GUJARAT [ 2023 (7) TMI 642 - CESTAT AHMEDABAD ]. Accordingly, mens rea not having been established in the instant matter, penalty imposed under Section 112A of Customs Act, 1962 is not sustainable. Appeal allowed. 2023 (9) TMI 1073 Smuggling - Betel Nuts of Foreign origin - no documentary evidence could be produced with regards to legal import - burden to prove - Confiscation - Penalty - HELD THAT:- The Form CA-5 which has been filed is incomplete and fails to record even the basics of the cases as per the impugned orders of the lower authorities. Commissioner (Appeal) has in appeal filed by two of the aggrieved persons against the order in original sets aside the entire order in original even against the person whose appeal was not under consideration by him, and revenue files this appeal even without uttering a single word about the same. Might be the revenue is only aggrieved by the setting aside of the order against the respondent and not against setting aside of the entire order in original without any appeal. On going through the impugned order of Commissioner (Appeals), it is noted that he has primarily gone by the fact that bBABOO BANIK VERSUS COMMISSIONER OF C. EX. CUS., LUCKNOW [ 2004 (7) TMI 482 - CESTAT, KOLKATA] . Further, the Tribunal in the case of BIJOY KUMAR LOHIA VERSUS COMMISSIONER OF CUSTOMS (PREV.), PATNA [ 2005 (11) TMI 306 - CESTAT, KOLKATA] has held that the local trade opinion cannot take the place of the legal evidence. It is also noted that the reliance on the opinion of Arecanut Research Development Foundation (ARDF), Mangalore as regards the country of origin by the Original Adjudicating Authority was not proper inasmuch as the said organization in reply to an RTI query has stated that it is not possible to determine the place of origin of betel nuts through test in laboratory. As such, the Appellate Authority is agreed upon that the said report can only be treated as an opinion and not as scientific test report regarding the country of origin. The respondent had also brought on record a survey report on the cultivation of areca nuts in India issued by the Directorate of Arecanut and Spices Development, Ministry of Agriculture, Government of India which shows substantial production of betel nuts in West Bengal, Assam and North Eastern State. In the absence of any positive evidence to establish the foreign origin of the goods and their illegal smuggling into the country, the Appellate Authority is agreed upon that their confiscation is neither warranted nor justified. The order of the Allahabad bench in case of COMMISSIONER, CUSTOMS (PREV.) , LUCKNOW VERSUS M/S MAA GAURI TRADERS, [ 2018 (11) TMI 1668 - CESTAT ALLAHABAD] relying on which impugned order has given the relief to the respondent, was relied upon by the Kolkata Bench in case of SMT. LALTANPUII VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) , NER, SHILLONG [ 2020 (12) TMI 377 - CESTAT KOLKATA] . The Bench stated The betel nut being non notified goods; burden to prove the fact of smuggling lies on the department and the same has not been discharged; the report of ADRF, Mangalore cannot be relied upon. On the issue of goods being held to be unfit for human consumption, it is held that as the goods are neither imported nor proved to be smuggled, no action by Customs is warranted. SLP filed by the revenue against this order of Hon ble High Court has been dismissed by the Hon ble Supreme Court as reported at [2022 (382) ELT 588 (SC)]. There are no infirmity in the impugned order of the Commissioner (Appeals) and the same is upheld - appeal of Revenue dismissed. Corporate Laws 2023 (9) TMI 1072 Oppression and mismanagement - Seeking an injunction to restrain the defendants from enforcing an anti-suit permanent injunction order passed by the High Court of Singapore - NCLT is the only appropriate and competent forum to decide the disputes and grievances raised by the plaintiff, pertaining to oppression and mismanagement against the defendants or not - balance of convenience - HELD THAT:- This Court is conscious of the position of law and the principles laid down in the said judgment, in the case of MODI ENTERTAINMENT NETWORK ANR. VERSUS W.S.G. CRICKET PTE. LTD. [ 2003 (1) TMI 734 - SUPREME COURT] , particularly when parties have agreed to submit to a foreign Court or forum for resolution of disputes. In such circumstances, as in the present case, the plaintiff seeking to restrain proceedings before such chosen foreign Court or forum, has to make out an exceptional case to satisfy the test of a strong prima facie case being made out for grant of an antienforcement order. In such a case, the plaintiff is also required to satisfy a high threshold of the three-pronged test. The Delhi High Court, in the case of Interdigital Technology Corporation Vs. Xiaomi Corporation and others [ 2021 (5) TMI 1072 - DELHI HIGH COURT] had an occasion to consider factors that would be relevant when a court is called upon to issue an anti-enforcement injunction, as in the present case. The Delhi High Court held that certain principles could be kept in mind while issuing or refusing anti-suit injunctions or anti-enforcement injunctions - The Delhi High Court, in the said judgment, before identifying the aforementioned general principles, has made an observation, with which this Court agrees, that when the ends of justice are predominant, there can never be any hard and fast rule or guidelines cast in iron. Hence, each individual case has to be dealt with on its own facts and circumstances, while applying principles that have been developed by Courts of law over a period of time, dealing with similar or identical situations. It is settled law that if the plaintiff fails to make out a prima facie case, examination of questions pertaining to grave and irreparable loss, as also balance of convenience, are rendered meaningless - in such a situation, this Court is called upon to first determine as to what are the factors to be taken into consideration while answering the question as to whether the plaintiff has indeed made out a prima facie case in his favour for allowing the present application. In order to arrive at a conclusion on the said aspect of the matter, some of the established positions of law need to be adverted to. Whether the NCLT has exclusive jurisdiction to decide disputes pertaining to oppression and mismanagement, has arisen before Courts and after much deliberation, it has been found that only the NCLT has exclusive jurisdiction to decide such disputes. No Court, including a Civil Court, can go into such disputes. In this regard, Sections 241, 242 and 430 of the Companies Act, 2013 are relevant. It becomes abundantly clear that when the subject matter of dispute, as in this case pertaining to oppression and mismanagement, is incapable of settlement through arbitration under the law of India, the Court cannot have any discretion in such matters and enforcement of such a foreign award becomes an impossibility. Hence, there is substance in the contention raised on behalf of the plaintiff that in the light of the said public policy of Indian law, as recognized by the Courts in India pertaining to non-arbitrability of disputes concerning oppression and mismanagement, even if the said questions were gone into in the arbitral proceedings at Singapore, the award pursuant thereto would be incapable of enforcement in India under Section 48 of the Arbitration Act. The fact that the plaintiff has been able to show that if the anti-suit permanent injunction order granted by the High Court of Singapore is enforced, he will be rendered remediless, is enough to make out a strong prima facie case in his favour. The aspect of grave and irreparable loss to the plaintiff in the absence of such temporary injunction, becomes evident in the light of the finding given hereinabove that the plaintiff would be left remediless if the anti-suit permanent injunction order of the High Court of Singapore is allowed to operate. It cannot be countenanced that the plaintiff would stand restrained from pursuing the only remedy available to him before the NCLT, while the arbitration at Singapore would continue and the award that may be rendered therein would be unenforceable in India. Therefore, on the aspect of grave and irreparable loss also, the plaintiff has made out a case in his favour. As regards balance of convenience, this Court finds that if the temporary injunction sought by the plaintiff is not granted, the plaintiff shall stand restrained from pursuing the only remedy available to him as regards the disputes of oppression and mismanagement, while if such temporary injunction is granted, the plaintiff would be able to pursue such a remedy - It is not as if the defendants would not be able to assert their claim before the NCLT that the petition filed by the plaintiff is a dressed-up petition and that the disputes raised therein are not genuine oppression and mismanagement disputes, instead being disputes purely contractual in nature. Hence, the balance of convenience is also in favour of the plaintiff. This Court finds that temporary injunction restraining enforcement of the anti-suit permanent injunction order needs to be granted in favour of the plaintiff - the interim application is disposed of. Insolvency & Bankruptcy 2023 (9) TMI 1071 Recovery of Electricity dues - waterfall mechanism - successful resolution applicant is asked to pay the arrears payable by the corporate debtor for the grant of an electricity connection in her/his name - HELD THAT:- The observations from Embassy Property Developments Private Limited [ 2019 (12) TMI 188 - SUPREME COURT ] would confer jurisdiction on the tribunal constituted under the Code insofar as the appellant Tata Power Western Odisha Distribution Limited is insisting on payment of the dues of the corporate debtor for restoration/grant of the electricity connection. The dues of the corporate debtor have to be paid in the manner prescribed in the resolution plan, as approved by the adjudicating authority. The resolution plan is approved when it is in accord with the provision of the Code. Thus, the issue of corporate debtor s dues falls within the fold of the phrase arising out of or in relation to insolvency resolution under section 60(5)(c) of the Code. There are no good ground and reason to interfere with the impugned judgment(s)/order(s) - the present appeals are dismissed. 2023 (9) TMI 1026 CIRP - Preferential Transaction - transactions infringing section 43 of the IBC - HELD THAT:- A plain reading of sub-section (2) of section 43 makes it clear that if the transfer of a property or an interest of the corporate debtor is made for the benefit of a creditor or a surety or a guarantor, such transaction would be preferential transaction , if it puts such creditor or surety or guarantor in a beneficial position and if such transactions are made within the relevant period - the transactions which are the subject of the Impugned Order were made during the period 18.11.2019 to 30.9.2021. Out of these, the transactions made between 22.6.2021 to 30.9.2021 which total Rs. 7,81,352 were all made within a period of two years immediately preceding the insolvency commencement date which is 6.10.2021. Therefore, and quite clearly, all these transactions are within the relevant period . In the background of the report of Forensic Audit of the Corporate Debtor , it is quite clear that the said transactions amounting to Rs.7,81,352 are preferential transactions , as defined under section 43 of the IBC - the Impugned Order does not suffer from any infirmity - there are no reason to interfere with the said order - appeal dismissed. PMLA 2023 (9) TMI 1070 Maintainability of application - Seeking deferment of the proceedings before Adjudicating Authority - Bench at that point of time suffered from coram non-judice as no Adjudicating Authority had been constituted in terms of Section 2 (a) read with Section 6 (1) and (2) of the PMLA, 2002 - money laundering - proceeds of crime - HELD THAT:- A perusal of the Order of the Adjudicating Authority shows that at the time when the application of the Appellant was considered by the learned Chairperson, the case was only at a nascent stage. Further, a perusal of the material on record and the application filed by the Appellant does not indicate that the issue involved at that stage was of such a nature that it ought to be heard by a Bench of two Members. Section 6 does not postulate filing any application for reference to a larger Bench. When the adjudication under Section 8 of the PMLA commences and during the hearing of the matter if the Chairperson sees that the matter is of such a nature that it should be heard by a Bench of two Members then the Chairperson needs to constitute a two Member Bench. In fact, it has rightly been noted by the learned Single Judge that the application itself was not maintainable. Further, the Judgment of the learned Single Judge discloses that the matter was ready for final hearing before the Adjudicating Authority, and therefore, this Court is of the opinion that no interference is required at this juncture. The Apex Court in COMMISSIONER OF INCOME TAX OTHERS VERSUS CHHABIL DASS AGARWAL [ 2013 (8) TMI 458 - SUPREME COURT ] has observed the Act provides complete machinery for the assessment/reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Commissioner of Income Tax (Appeals). The writ petition before the learned Single Judge was itself not maintainable - this Court is of the opinion that the Judgment of the learned Single Judge confirming the Order dated 25.01.2023 passed by the Adjudicating Authority does not warrant any interference by this Court. Application dismissed. 2023 (9) TMI 1069 Validity of the cognizance/ summoning order - non-bailable warrant issued against the applicant - grant of pardon under Section 306 Cr.P.C. would fall within the purview of finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the scheduled offence against him ? - HELD THAT:- An order for discharge of the accused is passed or the criminal proceedings against him are quashed when on the face of the allegations, no triable offence is made out against the accused person and an order of acquittal is passed when the accused could not be proved guilty even after facing the trial. On the other hand, pardon is granted to a person who is supposed to have been directly or indirectly concerned in or privy to an offence . Pardon is granted only to persons who were involved in commission of the offence and not to a person against whom no case is made out or no case could be established. Therefore, a person who is granted pardon under Section 306 Cr.P.C. in a scheduled offence, would not be a person who has been finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the scheduled offence against him mentioned in Vijay Madanlal Chaudhary [ 2022 (7) TMI 1316 - SUPREME COURT] , against whom no proceedings under PMLA can continue. Section 46 of the Prevention of Money Laundering Act, 2002 provides that the persons conducting the prosecution before the Special Court, shall be deemed to be a Public Prosecutor. However, the public prosecutor conducting the trial of the offence under PMLA before the Special Court cannot file objections regarding concealment of facts relating the processes or activities connected with proceeds of the offence, namely - (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property before the Court trying the scheduled offence. Grant of pardon under Section 306 Cr.P.C. would not fall within the purview of the words finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the scheduled offence against him - The pardon granted under Section 306 Cr.P.C. to a person in a scheduled offence would not ipso facto result in his acquittal in the offence under the PMLA, unless, of course, the accused person seeks pardon in the case under PMLA also by making a full and true disclosure of the whole of the circumstances within his knowledge relative to the offence under PMLA also. The power under Section 482 Cr.P.C. can be exercised to secure the ends of justice, as held in State of Haryana v. Bhajan Lal, [ 1990 (11) TMI 386 - SUPREME COURT] , wherein the Hon ble Supreme Court gave a word of caution by stating that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases . In case the contention put forth by the learned Counsel for the applicant is accepted, it would result in a person accused of committing an offence under PMLA going scot free without facing trial and without seeking pardon in PMLA case by making a full and true disclosure of the whole of the circumstances within his knowledge relative to the offence and it would defeat the ends of justice. There is no illegality in the cognizance/ summoning order - Application dismissed. Service Tax 2023 (9) TMI 1068 Maintainability of appeal - monetary limit involved in the appeal - HELD THAT:- The Appeal is dismissed owing to low tax effect. Any substantial question of law, if arises in this appeal, limited to the question on which notice has been issued, is left open, to be agitated in an appropriate matter. 2023 (9) TMI 1067 Maintainability of appeal - appeal rejected on the grounds that the appellant had not made the pre-deposit as required under section 35F of the Central Excise Act, 1944 as made applicable to Service Tax - HELD THAT:- The appellant had filed an application for waiver of pre-deposit ordered by the Commissioner (Appeals). This Tribunal vide Miscellaneous Order No. 42008/2014 dated 24.11.2014 directed the appellant to make a pre-deposit of Rs.1,30,000/- only. Upon deposit of the said amount, predeposit of the balance amount of tax along with interest and penalty was to be waived and stay of recovery thereof to be operative till the disposal of the appeal. The appeal has not been disposed of on merits by the lower appellate authority since the predeposit had not been made by the appellant. Now that the defect has been cured, the matter remanded back to the lower appellate authority to decide the issue on merits. The Commissioner (Appeals) shall follow the principles of natural justice and afford a reasonable and time bound opportunity to the appellant to state their case both orally and in writing if they so wish, before issuing a speaking order in the matter. The appellant should also co-operate with the appellate authority in completing the process expeditiously and in any case within ninety days of receipt of this order. The impugned order is set aside and the appeal is restored before the Commissioner (Appeals) for a decision on merits - appeal disposed off. 2023 (9) TMI 1066 Refund of unutilized CENVAT Credit - input services received have been utilized in the provision of output services, which have been exported without payment of Service Tax - rejection on the ground of time limitation - period April 2008 to June 2009 - HELD THAT:- This Bench has considered in threadbare almost similar issue in the light of the Order of the Ld. Larger Bench in the case of CCE CST, BENGALURU SERVICE TAX-I VERSUS M/S. SPAN INFOTECH (INDIA) PVT. LTD. [ 2018 (2) TMI 946 - CESTAT BANGALORE] and also referred to orders of various CESTAT Benches across the country, and held In respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed on a quarterly basis. The rejection of refund by the lower authorities is not in order, for which reason the impugned order is set aside - appeal allowed. 2023 (9) TMI 1065 Levy of Service Tax - Manpower Supply Services - appellant is a Society registered under Andhra Pradesh Co-operatives Societies Act 1964 - appellant has not attended the (personal hearing) PH though several opportunities were given - HELD THAT:- The Adjudicating Authority has given very detailed findings and has held that the Appellant s arguments cannot be legally sustained, by holding that the service provider is a society registered under the Andhra Pradesh Co-operative Societies Act, 1964. The society is providing the services to M/s ONGC on commercial basis at commercially agreed upon terms and conditions. However, in the present case there is nothing on record to show that they were providing the services on a non-commercial basis and without any profit to the society. Thus in the absence of any evidence in this regard to show that the society is providing the services on non-commercial basis, the service provider s contention that they are not commercial concern cannot be accepted and hence they are liable to pay the service tax w.e.f 16.6.2005 onwards. As regards period after 1.5.06, the society is liable to pay service tax within the meaning of Person included in the definition in the statute. There are no reason to interfere with the detailed and considered decision given by the Adjudicating Authority - appeal filed by appellant dismissed. 2023 (9) TMI 1064 Adjustment of excess paid service tax from the liability of another period - HELD THAT:- The period of 2013-14 is not in dispute and hence never been examined by the department. Further, it is found that the contention of the appellant that he has paid excess payment in 2013-14 has been examined by the department and the Ld. Commissioner has held that there is nothing to co-relate the amounts paid with the liability of the appellants for the post negative list regime period, therefore, nothing could be deduced regarding payment of service tax liability w.e.f. 01.07.2012 in want of any corroborative documents. The ground taken by the appellant that the service tax liability for 01.07.2012 to 31.03.2013 was discharged in the year 2013-14 is not tenable as the service tax return for the financial year 2013-14 filed by the appellant has never been challenged nor the revise return was filed by the assessee. Further, if the appellant has discharged their service tax liability for the period 2012-13 in ST-3 returns of financial year 2013-14 but they have not given any intimation to the department regarding the payments of service tax liability in financial year 2013-14 for the period 2012-13. Further, if the contention of the appellant is accepted that they have paid excess service tax in the returns filed for the period 2013-14 then the only course left to him is to seek refund of the same. There is no provision of adjustment of excess payment of service tax of one period towards the liability of the other period. There is no infirmity in the impugned order passed by the Commissioner (Appeals) - Appeal dismissed. 2023 (9) TMI 1063 Non-payment of Service tax - GTA Service or not - transportation charges of the export cargo - consignment note not raised for the service - period from August 2006 to December 2010 - Time limitation - HELD THAT:- As per the definition under 60(50b) of the Finance Act, 1994, only if the service provider in relation to the transportation of goods by road issues a consignment note, the levy of Service Tax would be attracted to the carriage of goods by the goods transport agency. The Service Tax Rules under Section 2(1)(b), provides that the recipient of service is liable to pay the Service Tax - In the present case, the demand has been raised upon the appellant alleging that they are the recipient of services of goods transport agency services provided by the CHA. Admittedly, the appellant has not been issued a consignment note. The Tribunal in the case of Carris Pipes and Tubes Pvt. Ltd. [ 2018 (7) TMI 24 - CESTAT CHENNAI] had occasion to consider the similar issue has observed In cases where admittedly no consignment notes have been issued, the said transporter cannot be called Goods Transport Agency - In the said case, the Tribunal followed the decision in South Eastern Coalfields Ltd. Vs. Commissioner of Central Excise [ 2016 (8) TMI 677 - CESTAT NEW DELHI] , and held that the demand cannot be sustained if no consignment note has been issued to the service recipient. Thus, the demand of Service Tax cannot be sustained. The issue on merits is answered in favour of assessee. Time Limitation - HELD THAT:- The situation is entirely a revenue neutral as well as the fact that several audits have been conducted raising the objection of non-payment of Service Tax under GTA services. The Department had full knowledge about the issue and still the Show Cause Notice has been issued invoking the extended period which in our view cannot be sustained. The appellant succeeds on the ground of limitation also. The impugned order is set aside. The appeal is allowed. Central Excise 2023 (9) TMI 1062 Clandestine removal - precipitated calcium carbonate. It was held by CESTAT that The raw material i.e. lime stone 40000 MT, pet coke 1000 MT and charcoal 1000 MT were also seized. The said quantity has been arbitrarily taken by eye estimation and no verification report/chart prepared and it is not possible to verify the said huge quantity of raw material in a single day, the allegation of non-accountal of goods in the statutory record is not sustainable. HELD THAT:- After carefully perusing the material placed on record, it is not required to interfere with the impugned order passed by the Customs, Excise Service Tax Appellate Tribunal, Chandigarh. Appeal dismissed. 2023 (9) TMI 1061 Maintainability of appeal - requirement of pre-deposit - demand of wrongly availed CENVAT Credit of CENVAT duty including Education cess and Secondary and Higher Secondary Cess - HELD THAT:- It is manifest that the demand-cum-show cause notice dated 30.07.2013 has not attained finality in law in absence of any subsequent order confirming the demand as proposed to be levied under the show cause notice. As there is no demand, the question of pre-deposit does not arise at all. Therefore, the impugned order dated 14.07.2023, passed by the CESTAT, Kolkata Bench, in so far as the direction of making payment of pre-deposit of Rs. 3,50,000/-(Rupees Three Lacs Fifty Thousand Only), being 10% of the contested amount of Rs. 35,34,992/-(Rupees Thirty Five Lacs Thirty Four Thousand Nine Hundred and Ninety-Two Only), does not stand to scrutiny and is set aside. The appeal filed by the appellant against the order dated 14.07.2023, shall be registered and decided as per law after providing opportunity of hearing to both parties - Appeal allowed. 2023 (9) TMI 1060 CENVAT Credit availed on export goods which were unconditionally exempt - goods cleared to EOUs and SEZS - requirement to pay 6/8% of the value of goods which were cleared to EOUs and SEZS - HELD THAT:- This bench, in the case of ASTRIX LABORATORIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX, HYDERABAD-I, [ 2019 (5) TMI 1344 - CESTAT HYDERABAD] has held Hon ble High Court of Bombay in the case of REPRO INDIA LTD. VERSUS UNION OF INDIA [ 2007 (12) TMI 209 - BOMBAY HIGH COURT] has held that assessee can remove the exempted goods on furnishing bond and clearance would come under the ambit of Rule 6(6)(v) of CCR 2004 and there is no need to reverse CENVAT Credit. The issue is squarely covered by the above decision of this Bench. The Revenue has not come up with any submission that the facts are different in the present appeals. On going through the records, it is seen that the present appeals are on account of the periodical showcase notices issued to the appellant on the same issue. Appeal allowed. 2023 (9) TMI 1059 Refund claim - refund filed on the ground that supplies were against International Competitive Bidding and thus exempt - rejection for the reason that the project had two different units of 500 MW each whereas the exemption is applicable only to power projects of a capacity of 1000 MW. Benefit of exemption denied - project is not a mega project with more than 1000 MW power - Condition No.19 of the Notification No.06/2006 is not satisfied as the goods are not exempted, when imported, vide Notification No.21/2002-Cus as amended by Notification No.49/2009-Cus - appellant was not a party to the International Bidding and as a sub-contractor of the BHEL. Project in question is not a 1000MW project - HELD THAT:- Joint Secretary, Ministry of Power, Government of India, vide certificate dated 16-12-2009, certified that it is a case of setting up of Power plant of Capacity of 1000 MW. This should put to rest the speculation that the impugned project is of capacity of 1000 MW and not two projects of 500 MW each - CBEC vide F. No. 354/2007/2011-TRU dated 06.07.2012 has clarified that: FM s approval has been obtained for the issuance of suitable instructions to the Central Excise authorities based on clarification received from Ministry of Power in this case directing them to dispose of protective demand notices in the light of this clarification. Appellant not a sub-contractor - HELD THAT:- The project authority certifies the requirement of procurement of Main Plant equipment and other items to be supplied and that the list of the Sub-Contractor along with items to be supplied with quantities shall be intimated later. It is not the case of the department that the appellant is not a sub-contractor. This Tribunal in the case of CST LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, HYDERABAD [ 2008 (2) TMI 755 - CESTAT, BANGALORE] and CST LTD. VERSUS COMMISSIONER OF CUS. C. EX., HYDERABAD-I [ 2007 (6) TMI 369 - CESTAT, BANGALORE] held that exemption is available to the sub-contractors also. Condition No.19 of Notification no.06/2006 is not satisfied since as per Notification No 21/2002-Cus as amended by Notification No.49/2009-Cus prescribes Customs Duty @2.5% - HELD THAT:- The learned Commissioner has erred in looking at the Customs duty applicable to the project imports falling under CTH 9801 whereas the appellants have supplied castable refractory goods falling under Chapter 69 and 38 of Central Excise Tariff Act. To this extent, the findings of the Commissioner are erroneous. Moreover, Department has not also issued any show-cause notice to the similarly placed sub-contractor-suppliers involved in the same project. Once the Department has accepted nonpayment of duty for the previous and subsequent periods, it is not open for the Department to deny refund, if otherwise in order, for the short period during which the appellants have paid duty under mistaken notion of law.The Ld. Counsel also submits that the appellants are, alternatively eligible for exemption under Notification No.20/2002 as the goods were supplied to power projects. The impugned order is not sustainable and is liable to be set aside - Appeal allowed. 2023 (9) TMI 1058 Refund claim - unjust enrichment - abatement percentage permitted on their product - they could not clear the goods from factory by claiming higher abatement due to oversight - goods were cleared by them to their depot and not to the ultimate consumer - Rate of rebate under Notification No. 26/2012 dated 10.05.2012 was varied from 25% to 35% - reliance placed upon the Chartered Accountant s Certificate - principles of unjust enrichment - HELD THAT:- This Court finds that as pointed out by the Learned Commissioner (Appeals) the language of the CA certificate leaves much to be desired. And therefore for reasons stated he has correctly rejected the same. It is thus clear that variance in the rate of abatement just does not happen due to variance of Excise Duty only but also because of variance of other taxes that might have moved intandem with the rate of abatement. In fact percentage of abatement is likely to go up as per Section 4A(3) only when taxes have already been raised. It is thus clear that unless and until exact components of Excise duty varied as well as other taxes including state levies varied while computing abatement is known, it cannot be stated by a party categorically that it paid which tax in excess, specially when some state levies are meant for wholesalers and retailers. It is thus clear that in MRP based assessment, refund of non claim of abatement cannot be purely treated as a refund of excise duty paid in excess only as per Section 11B. Since the fixing of MRP has repercussions even under legislations like Legal Metrology Act and change of such MRP once goods are cleared from the end of manufacture, is not easy to change. Therefore, it cannot be agreed upon as mentioned by the appellant on the basis of the evidence made available that they having cleared the goods did not charge the price as per abatement claimed by them from ultimate consumer and also that excess abatement was only on account of excess excise duty, which they alone will have borne the brunt of in case of their above oversight. The onus which is upon the party as per presumption of Section 12B is therefore not discharged. However, it is desirable that department too while working out abatement as per Section 4A(3) should exhibit transparency in its working to indicate what all taxes and to what extent have been taken in to consideration or at least should liberally provide such information to concerned parties. Appeal dismissed. CST, VAT & Sales Tax 2023 (9) TMI 1057 Levy of purchase tax - penultimate sale - raw hides and skin purchased without tax were converted as dress hides using materials purchased at concessional rate of tax under Section 3(3) of the TNGST Act - It was held by High Court that the petitioner is therefore not entitled to exemption under Sections 5(3) and 5(4) of the Central Sales Tax Act, 1956 - HELD THAT:- No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. SLP dismissed. 2023 (9) TMI 1056 Seeking permission to withdraw the petition - settlement having been arrived at already - HELD THAT:- The petition is dismissed as withdrawn. Indian Laws 2023 (9) TMI 1055 Dishonour of cheque - legal and enforceable liability or not - failure to rebut the presumption under Section 139 of the N.I. Act - HELD THAT:- In view of the overwhelming evidence produced at record by the accused-petitioners, their conviction on the part of the Trial Court and upholding of the same by the Appellate Court is absolutely unjustified. No doubt, presumption under Section 139 of the N.I. Act was available in favour of the complainant once the signatures on the cheques were admitted and that the cheques were issued for a legal and enforceable debt or liability, but the accused-petitioners were justified in their action of stopping the payment, inasmuch as the cheques were issued towards salary for the period, for which the complainant did not serve the company of the accused-petitioners and rather, served another company Skylark Securities Pvt. Ltd. Besides, complainant was found to have embezzled the amount payable for the salary of the guards regarding which FIR Ex.D2 was lodged against him. The impugned judgment of conviction and order of sentence as recorded by the Courts below are set aside. The petitioners stand acquitted of the charges. The present revision petition is hereby allowed.
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