Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 27, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
GST
-
Disproportionate cancellation of GST registration by authorities quashed; Court upholds principles of reasonableness and due process.
This is a case involving the cancellation of a petitioner's GST registration by the respondent authorities. The court held that Section 16(2)(c) and Rule 86B of the GST Rules, which were relied upon for cancellation, lack statutory backing under the GST Act and are ultra vires. The cancellation of registration was deemed a disproportionate punishment, and the court found it arbitrary, unreasonable, and violative of Article 14 of the Constitution. The court set aside the impugned order canceling the petitioner's GST registration and directed the respondents to restore the registration forthwith. The court criticized the respondents for canceling the registration based on a prima facie investigation without completing the investigation. Overall, the court allowed the writ petition and provided relief to the petitioner against the cancellation of GST registration.
-
Quashed ITC denial order for dual GSTIN against single PAN; ITC adjustment allowed as per Circular 183/15/2022.
High Court quashed order denying adjustment of Input Tax Credit appearing in GSTR-2A due to issuance of two GSTINs against one PAN. Circular No.183/15/2022-GST applied, aligning with previous judgments allowing benefit of circulars issued during pendency of appeals. Joint Commissioner directed to pass fresh order in line with the circular, allowing adjustment of ITC.
-
Incorrect tax return filing led to refund rejection; court orders reconsideration after hearing petitioner's arguments.
The court held that the officer failed to consider the petitioner's case that the amount received in February 2024 was erroneously described as an advance, which was rectified by filing an amended return. This aspect was not considered while passing the order rejecting the refund claim. Consequently, the order was quashed, and the respondents were directed to reconsider the petitioner's refund application after affording an opportunity of hearing within two months from the date of receipt of the court's judgment.
-
Legitimate ITC entitlement upheld; procedural lapse condoned by court.
The High Court ruled that the petitioner's entitlement to avail Input Tax Credit under the CENVAT Credit Rules, 2004 cannot be denied, as long as the credit was validly earned. The court relied on the Supreme Court's decision in Collector of Central Excise, Pune v. Dai Ichi Karkaria Ltd., which held that validly earned credit is indefeasible and cannot be reversed, except in cases of illegal or irregular credit. Regarding the procedural irregularity u/s 140 of the CGST Act, 2017, the court condoned it, citing the Supreme Court's decision in Commissioner of Sales Tax, UP v. Auraiya Chamber of Commerce, Allahabad, which held that procedures are aids to justice, not obstacles. Consequently, the impugned order was quashed, and the petition was allowed.
-
GST assessment order set aside for fresh decision after procedural lapse, subject to partial deposit.
Petitioner challenged assessment orders citing lack of jurisdiction, as entire duty liability was discharged from ITC availed at import. Court rejected jurisdiction challenge based on precedent, holding respondent competent to pass order under circular and GST Act provisions. However, petitioner failed to provide proper reply with tabulations and documents when show cause notice issued. Court set aside impugned order, remitting case for fresh order on merits, subject to petitioner depositing 10% of balance amount excluding defect relating to 100% ITC adjustment, and 1% of tax liability u/s 86(b) of GST Rules within 30 days. Petition allowed.
-
Tax liability determination flawed: Jurisdictional issues, non-consideration of reply on RCM and trade payables.
Principles of natural justice violated due to lack of jurisdiction and non-application of mind. Reverse Charge Mechanism (RCM) liability issue: Petitioner's reply on amounts declared and paid under RCM greater than notice amount disregarded. Trade payables issue: Petitioner's reply on all trade payables below 180 days ignored without consideration. Impugned order reflecting non-application of mind, non-consideration of petitioner's reply. Order set aside, matter remanded for reconsideration. Petition disposed by way of remand.
-
Penalty reduced in e-waybill updation case due to genuine difficulty.
Petition for review dismissed concerning imposition of penalty for non-updation of four e-waybills. Court acknowledged e-waybills were updated within two minutes of interception and genuine difficulty in immediately updating part-B. Previous order, being non-speaking and harsh, modified penalty to Rs. 50,000/-. Difficult to conclude court overlooked non-updation of part-B of fourth e-waybill. No reason to conclude court was oblivious of such statement when passing order.
-
GST Refund Claim by SEZ Unit Upheld: Court Overrules Rejection Order.
The High Court quashed the order rejecting the refund claim of the petitioner, an SEZ Unit, on the ground that the petitioner was not allowed to claim a refund under the GST law. The Court held that the ratio laid down in the Britannia Industries Limited case, where it was held that the refund claim for the tax period on supplies made to an SEZ Unit/Developer can be claimed by the supplier of goods or services, is still binding. The Appellate Authority erred in not following the dictum laid down in the Britannia case merely because an appeal against it is pending before a higher forum without a stay. The facts in the present case and the Britannia case being identical, a different view cannot be taken. Consequently, the High Court allowed the petition and quashed the impugned order of the Appellate Authority.
Income Tax
-
Acquitted individuals can settle tax disputes under Vivad Se Vishwas scheme despite prior prosecution.
This is a summary of a court ruling regarding the eligibility criteria for availing the benefits of the Direct Tax Vivad Se Vishwas scheme. The court held that the scheme's prohibition applies only to individuals against whom prosecution has been initiated or who have been convicted under specified Acts like the Prevention of Money Laundering Act or the Prevention of Corruption Act. However, if an individual has been acquitted before filing the declaration, they are not barred from settling the dispute under the scheme. The High Court allowed the writ petition, granting the respondents liberty to recall the order if the petitioner's conviction is upheld by the Delhi High Court.
-
Tribunal corrects valuation errors, adopts Rs. 70.59 per share fair market value.
The Tribunal held that the workings provided by the Department for determining the fair market value (FMV) of shares at Rs. 131.86 per share were not in accordance with Rule 11UA of the Income Tax Rules, 1962. The Tribunal had intended to adopt Rule 11UA for FMV determination and had directed the Department to furnish workings accordingly. However, the Department's workings did not consider figures from certain intermediary companies. In the assessee's wife's case, the Tribunal observed that the AO's valuation of Rs. 131.86 per share suffered from fallacies and was not as per Rule 11UA. The AO subsequently computed FMV at Rs. 70.59 per share u/r 11UA in the wife's case. The assessee sought rectification to substitute the FMV of Rs. 131.86 per share with Rs. 70.59 per share, which the Tribunal allowed, considering it an arithmetical mistake rectifiable u/s 254(2). The Tribunal directed the AO to adopt FMV of Rs. 70.59 per share and recompute capital gains accordingly in the assessee's case.
-
Indian firm's foreign loan losses on local asset acquisitions: Sec 37(1) test awaits.
The High Court's judgment addressed the interpretation of Section 43A regarding losses arising from exchange rate fluctuations on foreign currency loans utilized for acquiring assets both within and outside India. The court held that Section 43A mandates capitalizing such losses for assets imported from abroad. However, for assets acquired locally, the applicability of Section 37(1) must be examined to determine if the expenditure qualifies as revenue or capital. The court remanded the matter to the ITAT to determine whether the expenditure disallowed by the AO and CIT-A, but allowed by the ITAT, qualifies as non-capital expenditure u/s 37(1), considering the substance of the expenditure. The Supreme Court's judgment in Wipro Finance Ltd. clarified that Section 43A's positive obligation does not necessarily mean the converse - that exchange rate losses on loans for locally acquired assets must be treated as capital expenditure. The High Court emphasized expediting the proceedings, given the vintage of the case.
-
Cash deposits in agent's bank account not income but receipts on farmers' behalf, only commission taxable.
Assessee engaged in business of commission agent (Aadatia) for agricultural products. AO made addition u/s 68 treating entire cash deposits in bank account as unexplained, alleging undisclosed trading activity. CIT(A) deleted addition after considering cash books, ledgers, bank statements of three proprietorship concerns, observing cash deposits duly recorded relating to consignment sales over Rs. 17 crores, part received in cash. ITAT upheld CIT(A)'s decision, noting AO failed to rebut assessee's explanation that cash deposits represented sale proceeds received on farmers' behalf, incidental to commission income. AO could have cross-verified from Mandi Samiti records but didn't. Only real income taxable, AO erred by taxing receipts instead of commission income. CIT(A) also deleted 25% disallowance of expenses made by AO, as assessee substantiated salary payments through evidence like employee confirmations, volume of Rs. 17 crore business necessitating manpower. ITAT found no infirmity in CIT(A)'s well-reasoned order based on evidence. Revenue's appeal dismissed.
-
Assessee's Unrecorded Income Additions: Books Rejected, Profits Estimated, Tribunal Directs Reduction.
The provisions of section 69A allow for additions if the assessee is found to be the owner of unrecorded money, bullion, jewelry, or valuable articles. However, when sales are duly recorded and supported by the books of account, additions cannot be made u/s 69A. The assessee's books were rejected, and profits were estimated at 10% on the money deposited in the bank account. The Assessing Officer made a trading addition without reducing the profit already reflected in the books. The tribunal directed the Assessing Officer to reduce the profit already declared by the assessee at 5.74% and consider the remaining 4.26% as a trading addition. Regarding section 145(3), once the books of account are rejected based on detailed reasons, rejecting the method of accounting and stock valuation is not necessary. The assessee did not challenge the rejection of books, and the tribunal found no infirmity in the findings of the lower authorities.
-
Income Tax reassessment quashed due to mechanical passing without application of mind.
The ITAT held that the final assessment order passed u/s 147 read with Section 144C(13) pursuant to the Dispute Resolution Panel's direction was invalid. The addition u/s 69A for unexplained investment/credit was unsustainable as the assessee failed to furnish the same before the lower authorities. The draft assessment order passed by the Assessing Officer on irrelevant facts could not be sustained after rejection by the DRP and allegations of mechanical passing without application of mind. Relying on the Excel Commodity Derivative case, the ITAT ruled that the term 'information' under Explanation 1 of Section 148 cannot be used lightly for reopening assessments. The AO had erroneously issued notice and made additions on fresh grounds after considering the assessee's submissions. The ITAT held that the impugned orders were illegal and unsustainable, aligning with the Akshar Builders & Developers and Paranjape Schemes cases, which reprimanded mechanical reassessments based on erroneous information and non-application of mind. Consequently, the ITAT quashed the draft and final assessment orders and allowed the assessee's appeal.
-
Grocery trader's profits rightly estimated at 4% on unaccounted sales; no separate addition for unexplained expenses required.
Profit estimation on unaccounted turnover: AO estimated 8% profit based on seized material, which was reduced to 5% by CIT(A). ITAT held that in case of profit estimation u/s 145, Revenue must make an honest and fair estimate by applying the profit rate declared in preceding years. Considering the assessee's business of trading in Kirana items, ITAT opined that 4% profit amounting to Rs. 35,70,673 shall meet justice. Since Rs. 75 lakh was offered for taxation as business income, the additional profit needs to be telescoped with the offered income, and no separate addition is required. Unexplained expenditure: Assessee argued that once books were rejected and profits estimated on turnover, expenses for earning such profits should be considered, and any addition for expenses would amount to double addition. ITAT held that the expenditure on unrecorded cash coupons is treated as unexplained expenditure u/s 69C and taxed at 60% u/s 115BBE. However, the basic invocation of Section 69C based on estimates is uncalled for. CIT(A) appropriately decided, and ITAT upheld the order. 4% net profit on turnover: ITAT found that CIT(A) correctly considered the additional income of Rs. 75.
-
Bank eligible for tax deduction on bad debt provisions regardless of rural/non-rural advances.
A bank is eligible to claim deduction towards provision for bad and doubtful debts u/s 36(1)(viia), irrespective of whether it has rural or non-rural advances. The presence of both rural and non-rural advances is not mandatory. The assessing officer must consider the actual provision made in the books for bad and doubtful debts, regardless of the nature of advances. The deduction is allowed subject to the permissible upper limits specified in Section 36(1)(viia)(a). All types of banks described under sub-clause (a) of clause (viia) are entitled to seek deduction of an amount not exceeding the prescribed percentage of total income, provided there is a provision for bad and doubtful debts in the books of account. The existence of rural branches is not a condition for availing the deduction up to the specified percentage of total income.
-
Tax authority revises order, disallows termination fees as revenue expense, treats as capital expenditure/liquidated damages.
The Commissioner of Income Tax (CIT) invoked Section 263 to revise the Assessing Officer's (AO) order, disallowing the amount paid on termination of an agreement, considering it as capital expenditure, and disallowing the amount paid on termination of a License and Supply Agreement, considering it as liquidated damages/penalty u/s 37. The key points are: The AO failed to conduct proper inquiries before allowing the expenditure as revenue, such as verifying the commercial expediency, terms of novated agreements, liability for termination fees, and accounting treatment. Explanation 2 to Section 263, effective from 01/06/2015, deems an AO's order erroneous if proper inquiries or verification were not made, prejudicing revenue interests. Since the AO's order was passed on 31/01/2018, Explanation 2 applies. The termination charges of Rs. 340.45 crores paid under the Asset Purchase Agreement were for purchasing assets, constituting capital expenditure, not revenue expenditure. The liquidated damages of Rs. 6.19 crores paid for terminating the License and Distribution Agreement were not incurred wholly and exclusively for the assessee's business, hence disallowed u/s 37. The ITAT dismissed the assessee's grounds, upholding the CIT's revision order.
-
Strict evidence needed for reopening old assessments; Valuation report alone insufficient.
The assessment years beyond six years but not exceeding ten years can be reopened u/s 153A only if the Assessing Officer possesses evidence depicting escapement of income aggregating Rs.50,00,000/- or more in such relevant assessment years. These provisions extending the assessment period beyond six years up to ten years impose a stringent condition of the Assessing Officer possessing evidence of escapement of income of Rs.50,00,000/- or more. Such provisions must be construed strictly, and the evidence relied upon by the Assessing Officer in such extended period assessments must be tangible. The Departmental Valuation Officer's report on a standalone basis without corroborating material cannot be construed as incriminating material, and additions solely based on the Departmental Valuation Officer's report are unsustainable. In the assessee's case, no difference was found between the investment disclosed in the books of account and the Departmental Valuation Officer's report for the property. Since the evidence relating to undisclosed investments in the "relevant assessment years" was less than Rs.50,00,000/-, the reopening of the assessment for the "relevant years" was invalid and quashed. The assessee's appeal was allowed.
-
Interest on borrowed funds advanced to subsidiary allowed as business expense.
Disallowance of interest difference between the rate paid on borrowed capital and the rate advanced to a wholly owned subsidiary is not warranted. The Supreme Court in S.A. Builders held that advancing funds by a holding company to its subsidiary for commercial expediency does not warrant disallowance of interest, even if not charged. The Delhi Tribunal in Moonrock Hospitality ruled that where funds were advanced to a wholly owned subsidiary for business purposes, no interest paid on borrowed funds could be disallowed u/s 36(1)(iii) of the Income Tax Act. Following these precedents, the Tribunal held that no disallowance of interest paid on borrowed funds was permissible and directed the Assessing Officer to delete the addition.
-
Business cash sales & deposits during demonetization not unexplained income as per books.
Deposits by the assessee in bank account during demonetization period were not unexplained. Section 69A is inapplicable as there were proper entries for cash sales, cash balance, and deposits in assessee's books of accounts. Cash sales against issued cash memos and immediate delivery cannot be considered unexplained money. Authorities did not find defects in books or abnormal increase in cash sales/balance before demonetization. Section 115BBE, applicable on income u/ss 68-69D, is inapplicable since source of cash deposits is business income. Assessee discharged initial burden by explaining source as cash sales credited in books, supported by evidence. Onus shifted to department to prove deposits represent undisclosed income, which department failed. Relying on Supreme Court's judgment in CIT vs. Orissa Corporation, ITAT allowed assessee's ground against CIT(A)'s findings.
Customs
-
Gold smuggling case: Plea for discharge dismissed, trial to proceed on sufficient grounds.
Petition for discharge u/s 245(2) Cr.P.C. dismissed in offences u/s 135(1)(a) and 135(1)(b) of Customs Act, 1962 relating to improperly imported gold bars. At charge framing stage, court to prima facie consider sufficient grounds for proceeding against accused, not appreciate evidence for conviction. While considering discharge, court not to deeply evaluate probative value but form presumptive opinion on factual ingredients constituting alleged offence without roving inquiry or weighing evidence as in trial. Gold seized from pillion rider's possession, petitioner's involvement matter for trial. Sanction order challenged on ground of not considering evidence nature, role and mens rea, but petitioner neither specified facts not considered nor showed apparent error. No evidence produced to enable Magistrate find charge groundless. Dismissal of discharge petition cannot be faulted, revision devoid of merits, liable to be dismissed.
-
Importers misled court about firm status seeking relief for jewelry customs duty classification dispute.
Classification dispute over imported goods - whether categorized as freely importable silver jewelry or restricted under ITC (HS) Code 71069210. Apex court reiterated writ jurisdiction under Articles 32 and 226 is extraordinary, equitable, and discretionary, requiring petitioner to approach court with clean hands, candid disclosure without concealment. Petitioner made false averments about being a registered partnership firm, misleading the court. Held that petitioner abused legal process, not entitled to extraordinary relief. Petition dismissed for lack of candor and suppression of facts.
-
Imported bed sheets rightly classified as bed spreads despite polyester material. Respondents liable for duty, but no confiscation or penalties.
Bed sheets imported were correctly classified under CTH 6304 as bed spreads/bed sheets, despite being made of 100% polyester yarn. Although woven fabric of synthetic filament yarn, their identity as bed spreads/bed sheets remained intact, making them classifiable under CTH 6304. Respondents liable to pay duty by classifying goods under CTH 6304, but not liable for confiscation or penalties u/s 114A of Customs Act, 1962. No redemption fine payable. Appeals filed by Revenue dismissed.
-
Motor controllers import valuation upheld; classified rightly as "parts of electric motor.
The case pertains to the valuation and classification of imported motor controllers. The key points are: The assessing officer rejected the declared transaction value without valid reasons or following due procedure u/s 14 and Valuation Rules, despite no evidence suggesting the declared values were incorrect or that buyer and seller were related. The enhancement of assessable value by the adjudicating authority was struck down, and the transaction value declared by the respondent was accepted. Regarding classification, the respondent classified the goods under CTH 8503 0090 as "parts of electric motor." The Tribunal held that since the controllers are principally used with motors to perform functions like starting, stopping, selecting rotation, and regulating speed, they are rightly classifiable under CTH 8503 0090 and not under CTH 8708 9900. The orders of the Commissioner (Appeals) upholding the transaction value and classification under CTH 8503 0090 were affirmed, and the Revenue's appeals were dismissed.
Corporate Law
-
Minority shareholders' bid for oppression case denied due to insufficient stake, director removal not grounds.
The NCLAT upheld the NCLT's decision to refuse waiver u/ss 244(1)(a) and (b) of the Companies Act 2013 to the Appellants, who held only 5.83% shareholding, to file an oppression and mismanagement case u/s 241. While the NCLAT can make a preliminary assessment to determine if the petition falls within Sections 241 and 244, it found no exceptional circumstances to bypass the minimum shareholding requirement. The Appellants' primary grievance revolved around the removal of one Appellant as Director, which the Supreme Court has held cannot trigger oppression relief u/ss 241 and 242. The petition did not substantiate a genuine case of oppression and mismanagement, and the NCLT rightly refused the waiver based on its assessment.
IBC
-
Limitation period under IBC: Default date, SICA exclusion & balance sheet acknowledgment.
Determining the maintainability of a Section 7 application under the Insolvency and Bankruptcy Code (IBC) based on the date of default and the applicability of limitation periods. The key points are: The correct date of default was 26.02.2001 as per the recall notice, not 01.06.2019 mentioned in the application. The limitation period under Article 137 of the Limitation Act, 1963, applies to Section 7 applications. The benefit of excluding the limitation period u/s 22(5) of the Sick Industrial Companies (Special Provisions) Act (SICA), 1985, was wrongly denied by the adjudicating authority. However, even after excluding the relevant periods, the Section 7 application filed on 19.12.2019 was beyond the limitation period. The acknowledgment in the 2015-16 balance sheet was after the expiry of the limitation period. Consequently, the adjudicating authority rightly rejected the Section 7 application as time-barred, and the appeal was dismissed.
-
Creditors committee rightly rejected late resolution plan, approved 92.87% vote plan despite minor creditor's objection.
The court held that the Committee of Creditors (CoC) rightly considered and rejected the resolution plan submitted by M/s. Saverni Neutech Pvt. Ltd. and approved the plan of M/s. Trinity India Forgetech Pvt. Ltd. with 92.87% vote share. M/s. Saverni Neutech Pvt. Ltd. had no occasion to pray for a revised resolution plan when it failed to file a plan within the stipulated time. The Adjudicating Authority did not err in rejecting the application filed by Sandeep Jayantilal Vadodria. Regarding Prem Trading Company's appeal, its authorized representative Rakesh Patel was present in the CoC meeting and rightly exited from voting on approving the resolution plan due to conflict of interest as a co-resolution applicant. Prem Trading Company's 2.48% vote share was insignificant, and the plan was approved by HDFC Bank Ltd., the largest creditor with 92.87% vote share. The appeals were dismissed as lacking merit.
-
Debtor allowed to defend if borrowing constitutes financial debt.
The NCLAT held that the Adjudicating Authority erred in relying solely on the NeSL report as conclusive evidence of a financial debt without affording the Corporate Debtor an opportunity to present its defense. The Balance Sheets mentioned long-term borrowings and liabilities under separate heads, and the nature of the transaction needed examination to determine if it constituted a financial debt. The matter was remitted to the Adjudicating Authority for fresh consideration, allowing the Corporate Debtor to file a reply within three weeks to the Section 7 application. The appeal was allowed due to the lack of appropriate consideration of the real nature of the transaction by the Adjudicating Authority.
Indian Laws
-
Pre-sale agreements triggered stamp duty liability despite later sale deed, as possession transferred earlier.
The appeal challenges the liability to pay stamp duty and penalty on agreements executed prior to the sale deed for two properties. The court determined the real intention from the instrument's contents and language. Section 4(1) states that where multiple instruments complete a transaction, the principal instrument alone is chargeable with the highest duty prescribed in Schedule I. The proviso allows parties to determine the principal instrument themselves. In this case, although the agreements mentioned conveyance and the sale deed followed, the properties' value exceeded Rs.100, and possession was handed over on the agreement date, implying acquisition of possessory rights u/s 53A of the Transfer of Property Act, requiring proper stamp duty and registration u/s 17 of the Registration Act. The subsequent sale deed does not absolve the liability to pay appropriate stamp duty on the agreements, which were the principal documents under Explanation I of Article 25 of Schedule-I of the Act. The trial court rightly impounded the documents and directed adjudication of stamp duty and penalty by the Collector. The High Court correctly held no interference was warranted. The Supreme Court affirmed the orders and dismissed the appeal.
-
Unimpeachable evidence key to quash cheque dishonor cases, prima facie view insufficient.
Dishonour of cheque cases can be quashed by High Courts u/s 482 CrPC if unimpeachable material shows no offence. Supreme Court held proceedings shouldn't be scuttled at nascent stage based on prima facie impression. In a case where cheques were security deposit, Supreme Court ruled Section 138 covers cheques for "other liability" besides debt. Legal presumption and contested facts shouldn't be separated under inherent powers. Power to quash should be exercised sparingly. Petitioner raised mixed questions of fact and law, not examinable u/s 482 CrPC, desirable to leave for trial court adjudication based on evidence. Petition dismissed.
PMLA
-
Arrest under PMLA prevails over CrPC; can arrest despite judicial custody.
Arrest order challenged u/s 19(3) of Prevention of Money Laundering Act (PMLA), 2002. Court held PMLA prevails as special enactment over general law. Section 65 allows application of Criminal Procedure Code provisions not inconsistent with PMLA for arrest, investigation, etc. Respondents followed PMLA procedures for arrest, no infirmity found. If person already in judicial custody for one case, can be formally arrested for subsequent case investigation. Section 19(3) PMLA requirements complied with, no violation. Petition dismissed as devoid of merits.
-
Rich scammers denied bail over laundering money via fake documents.
Bail application dismissed in a case involving serious offences u/ss 420, 467, 471 of the Indian Penal Code and Section 45 of the Prevention of Money Laundering Act, 2002, related to the use of fake, forged, and fictitious documents to obtain holding numbers. The court held that while bail is generally the rule and jail the exception, socio-economic offences with deep-rooted conspiracies affecting societal moral fibre require a different approach. The accused's prolonged incarceration was deemed inconsequential given the gravity of the offence. The investigating agency's ongoing expedited trial process was also considered. Bail was granted to a purchaser protected u/s 54 of the Transfer of Property Act on different grounds. The court emphasized the need for a judicious exercise of discretion in granting or refusing bail based on the facts and circumstances of each case.
Service Tax
-
Directors' salaries exempt, sitting fees taxable - non-employed directors under reverse charge.
Remuneration paid to whole-time directors employed by the company is not liable to service tax, as it is considered salary. However, sitting fees paid to non-employed directors are subject to service tax under the reverse charge mechanism. The matter regarding payment of service tax on sitting fees to non-employed directors needs to be remanded to the adjudicating authority to verify the correctness of the reconciliation provided by the appellant. The Tribunal has relied on previous decisions and held that remuneration in the form of salary to whole-time employed directors is not subject to service tax.
Central Excise
-
Refund of accumulated CENVAT credit allowed for clearances to Mega Power Projects & SEZ units.
Manufacturer cleared excisable goods to Mega Power Projects and SEZ units. Refund claim filed for accumulated CENVAT credit u/r 5 of CENVAT Credit Rules, 2004. Refund permissible as per CBEC Circular 1001/8/2015-CE dated 28.04.2015. CESTAT in CCE, Faridabad vs. M/s Delton Cables Ltd. held refund rightly allowed for clearances to 100% EOU mega projects. Appellant entitled to refund of accumulated CENVAT credit for clearances to Mega Power Projects and SEZ units u/r 5. Impugned order sanctioning refund restored, appeal allowed.
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
-
GST
-
2024 (9) TMI 1486
Detention of goods - detention on the ground that correct documents were not travelling with the truck - HELD THAT:- It is clear that these goods were purchased from the Steel Authority of India Ltd. by a third party, who sold to the petitioner who subsequently re-sold to the consignee. Accordingly, there are no justification for the detention carried out by the authorities. The detention order along with the subsequent orders including the order passed under Section 129(1) of the GST Act are quashed and set aside. Consequential reliefs to follow - Petition disposed off.
-
2024 (9) TMI 1485
Cancellation of petitioner s GST Registration - seeking revocation of cancellation - seeking relief to declare Section 16 (2) (c) and Rule 86B of the Rules framed ultra vires the GST Act, 2017 - HELD THAT:- Section 49A of the Act prescribes conditions for utilization of input tax credit provided under Section 49; and Section 49B provides a restriction for utilization of input tax credit - The respondents have not answered in their reply to the petitioner s contention that Rule 86B of the Act itself is not backed by any statutory provision. Rule 164 enables the Rule making authority to frame the Rule 86B or other Rules, but the Rules must have backing in the main body of the statute. Otherwise the Rule would be ultra vires - there are no force in the petitioner s contention that Rule 86B of the Act has no statutory backing and appears to be ultra vires the provisions of the HPGST Act, 2017. Since the tax liability of the petitioner towards output tax stood discharged, no prejudice has been caused to the respondents. It was unnecessary for the respondents to cancel the GST Registration and they could have considered any other penalty which is more proportionate to the violation of law - the cancellation of GST Registration on the pretext of violation of Rule 86B is a disproportionate punishment imposed on petitioner and is liable to be interfered in exercise of the power conferred on this Court under Article 226 of the Constitution of India. Consideration by the court of alleged violation of Rule 21 (b) and Rule 21 (e) - HELD THAT:- How a prima facie investigation could be the basis of an order of cancellation of GST Registration without the investigation being completed, is not explained by the counsel for the respondents. The respondents ought to have waited for the investigation to be completed before imposing the drastic penalty of cancellation of GST Registration - It shocks the conscience of the Court to find an extreme penalty of the nature of cancellation of GST Registration being imposed on a business on the basis of a prima facie investigation conducted by the respondents - The said action of the respondents is thus clearly arbitrary, unreasonable and violates Article 14 of the Constitution of India. The impugned order Annexure P-1 dt. 09.02.2024 is set aside, and the respondents are directed to restore the GST Registration of the petitioner, forthwith - the Writ petition is allowed.
-
2024 (9) TMI 1484
Dismissal of appeal on the ground that the appeal was filed even beyond the condonable period of limitation - provision in the Tamil Nadu Goods Service Tax Act, 2017 to condone the delay and entertain the appeal - mismatch between GSTR - 3B and ITC auto populated in GSTR - 2A - HELD THAT:- In the instant case, on going through the assessment order, it is seen that a total tax liability of Rs. 49 lakhs together with 10% penalty has been imposed against the petitioner on the ground that there was a mismatch of the input tax claim between GSTR - 3B and the ITC auto populated in GSTR - 2A. The petitioner has come up with a clear case that no opportunity was given before passing the assessment order. Hence, they filed an appeal before the first respondent. However, the appeal itself was dismissed by the impugned order as it was filed beyond the condonable period. However, this Court is inclined to afford an opportunity to the petitioner by putting the petitioner on terms. The impugned order passed by the first respondent is hereby set aside. The delay in filing the appeal before the first respondent is condoned. The appeal filed by the petitioner shall be taken on file by the first respondent. Petition allowed.
-
2024 (9) TMI 1483
Challenge to action of the respondents in not adjusting the ITC appearing in GSTR-2A - petitioner was issued two different GSTIN against one single Permanent Account Number (PAN) - HELD THAT:- Circular No.183/15/2022- GST would apply in the present case. Furthermore, the judgment in the case of M/s. Santosh Kumar [ 2023 (10) TMI 936 - ALLAHABAD HIGH COURT ] is on similar factual matrix and the said judgment is agreed upon where it was held that ' adopting the similar view, this Court in the case of Commissioner of Sales Tax Vs. S/s. Agrawal Rolling Mills, Mirzapur, [ 2003 (4) TMI 550 - ALLAHABAD HIGH COURT] has held that the benefit of circular, which came into existence during the pendency of the appeal, even up to the stage of revision, the benefit of same cannot be denied to the assessee.' Thus, the impugned order dated December 22, 2023 is quashed and set aside with a direction upon the respondent No.4/Joint Commissioner, CGST Central Excise, Kanpur to pass a fresh order in terms of the Circular No.183/15/2022-GST. Petition allowed.
-
2024 (9) TMI 1482
Challenge to action on the part of the Central Board of Indirect Taxes and Customs in issuance of a Notification bearing No. 56/2023 dated 28.12.2023 - issuance of notification by the Central Board of Indirect Taxes and Customs is ultra vires of Section 168A of the CGST Act, 2017 or not - no recommendation of the GST Council which is the mandatory requirement for the purpose of issuance of the said Notification - HELD THAT:- This Court having heard the learned counsels appearing on behalf of the parties is of the opinion that it prima facie appears that the Notification bearing No.56/2023 is not in consonance with the provisions of Section 168(A) of the Central GST Act, 2017. If the said notification cannot stand the scrutiny of law, all consequential actions so taken on the basis of such notification would also fail. This Court is of the opinion, that the petitioner herein is entitled to an interim protection pending the notice. Till the next date, no coercive action shall be taken on the basis of impugned assessment order dated 22.04.2024 - The respondents are directed to file their affidavits on or before 15.09.2024.
-
2024 (9) TMI 1481
Challenge to order-in-original - difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR 2A of the registered person in respect of a supplier for the said financial year exceeds Rs. 5 lakh - HELD THAT:- It is required to interfere with the order passed by the learned Single Judge. Accordingly, we quash the impugned order and remit the case back to the respondent for passing fresh orders in terms of the circular dated 27.12.2022. The appellant is required to comply with the requirements of the aforesaid circular by producing the required certificate within the time to be stipulated by the assessing authority. This writ appeal stands allowed.
-
2024 (9) TMI 1480
Refund of certain amounts paid erroneously - respondents would submit that while rejecting the refund claim of the petitioner, it is seen that the officer had taken the view that the petitioner could not receive any advance payment after the supply of goods in the month of January, 2024 - HELD THAT:- This reasoning adopted by the Officer does not take into consideration the fact that the petitioner has a case that the description of the amount received in February, 2024, as an advance, is actually a mistake and the same was also rectified by filing an amended return as can be seen from Ext.P4. This aspect of the matter does not appear to have been considered by the officer while passing Ext.P9 order. The refund application of the petitioner shall be reconsidered by the competent among the respondents, after affording an opportunity of hearing to the petitioner. The orders as aforesaid shall be passed within a period of two months from the date of receipt of a certified copy of this judgment - Ext.P9 is quashed.
-
2024 (9) TMI 1479
Demand of differential IGST and GST Compensation Cess along with interest and penalty on supply of goods to merchant exporter - Fulfilment of conditions of N/N. 41/2017-Integrated Tax (Rate) on supplies made to merchant exporter or not - benefit of concessional rate of tax - HELD THAT:- As rightly contended by the learned counsel for the petitioner, a perusal of the reply dated 29.2.2024 vide Annexure-L will indicate that the petitioner has specifically sought for an opportunity of personal hearing before the matter was adjudicated. Despite the specific request made by the petitioner for an opportunity of personal hearing, the respondent has proceeded to pass the impugned order which is not only in violation of principles of natural justice but also contrary to Section 75 (4) of the CGSC Act warranting interference in the present petition. The impugned order at Annexure-A is hereby set aside - Matter is remitted back to the respondent for reconsideration afresh in accordance with law - Petition allowed by way of remand.
-
2024 (9) TMI 1478
Detention of the goods and vehicle of the petitioner - whether the goods may be released by the authorities under Section 129(1)(a) or 129(1)(b) of the CGST Act? - HELD THAT:- The facts and issue in the present writ petition are quite similar to one in H/S HALDER ENTERPRISES VERSUS STATE OF U.P. AND OTHERS [ 2023 (12) TMI 514 - ALLAHABAD HIGH COURT] . In light of the same, we see no reason why this Court should take a different view of the matter. Ergo, the goods would have to be released in terms of Section 129(1)(a) of the CGST Act. Accordingly, the order passed by the authorities dated July 27, 2024 is quashed and set aside. The authorities are directed to carry out the exercise in terms of Section 129(1)(a) of the CGST Act within a period of three weeks from today. The writ petition is allowed.
-
2024 (9) TMI 1477
Cancellation of registration under Odisha Goods and Services Tax Act, 2017 - it is submitted that client is ready and willing to pay the tax, interest, late fee, penalty and any other sum required to be paid for the return form of his client to be accepted by the department - HELD THAT:- Reliance placed in the case of M/s. Mohanty Enterprises v. The Commissioner, CT GST, Odisha, Cuttack and others [ 2022 (11) TMI 1521 - ORISSA HIGH COURT ] where it was held that ' the delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc., due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law.' Same direction is made in this writ petition. Petitioner gets the relief in the interest of revenue - petition disposed off.
-
2024 (9) TMI 1476
Condonation of delay in filing the appeal - seeking grant of one last opportunity to present the case before the concerned Appellate Authority - HELD THAT:- In the present case, it appears that the petitioner was unaware of the impugned order, due to which, there was a delay in filing the appeal. Therefore, being satisfied with the reasons assigned by the petitioner and also considering the submission made by the petitioner with regard to the payment of entire tax liabilities, this Court is inclined to condone the delay. The petition is disposed off.
-
2024 (9) TMI 1475
Transition of Input Tax Credit without actually filing a return under the provisions of the Central Excise Rules, 2001 for the month of July 2017 - HELD THAT:- As long as the petitioner was entitled to avail Input Tax Credit under the provisions of the CENVAT Credit Rules, 2004, it cannot be allowed to be lapsed, unless the provisions of the CENVAT Credit Rules, 2004 itself provided for its lapsing. In this connection, the decision of the Hon'ble Supreme Court in COLLECTOR OF CENTRAL EXCISE, PUNE VERSUS DAI ICHI KARKARIA LTD. [ 1999 (8) TMI 920 - SUPREME COURT] was invited wherein, it has been held ' There is no provision in the rules which provides for a reversal of the credit by the Excise Authorities except where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilised, has to be paid for. The credit in the instant cases having been taken validly, is, therefore, indefeasible.' Thus, the credit which was earned by the petitioner cannot be defeated under the provisions of the CENVAT Credit Rules, 2001. As far as the procedural irregularity committed by the petitioner in following the procedures under Section 140 of the Central Goods and Services Tax (CGST) Act, 2017 is concerned, the same has to be condoned as the procedures cannot come in the legitimate way of grant of Input Tax Credit - In this connection, the decision of the Hon'ble Supreme Court in COMMISSIONER OF SALES TAX, UP. VERSUS AURAIYA CHAMBER OF COMMERCE, ALLAHBAD [ 1986 (4) TMI 50 - SUPREME COURT] , is relevant wherein, the Hon'ble Supreme Court has held that procedures are handmaids of justice and not mistress of law. The impugned order dated 04.08.2021 is liable to be quashed. Accordingly, it is quashed - Petition allowed.
-
2024 (9) TMI 1474
Seeking to quash two orders issued by respondent No.3 - HELD THAT:- A perusal of the material on record will indicate that several contentions have been urged by the petitioner for the purpose of contending that the impugned order dated 22.12.2023 as well as the impugned order dated 20.03.2024 are illegal, arbitrary and without jurisdiction or authority of law. Under these circumstances, without expressing any opinion on the merits/demerits of the rival contentions and in the light of the undisputed fact that the impugned order dated 22.12.2023 was an ex-parte order which was passed without the petitioner contesting the Show Cause Notice, it is deemed just and appropriate to set aside the impugned orders and remit the matter back to the respondent No.3 for reconsideration afresh in accordance with law. The petition is hereby allowed by way of remand.
-
2024 (9) TMI 1473
Transition of ITC - Period of transition wherein the Input Tax Credit available under the VAT regime was to be electronically transferred to the Electronic Credit Ledger as available to the assessees, under the GST regime - petitioner contends that the non-uploading of the Form cannot restrict the Input Tax claim validly permissible under the CGST Act - HELD THAT:- This Court after noticing Section 18 of the GST Act with the nominal heading Availability of credit in special circumstances held ' As far as the transitional claims are concerned there is a further limitation prescribed as on 27.12.2017 and then of course, as per the Hon ble Supreme Court s directions there was a window of two months provided. Unless the claim is made in Form GSTR TRAN-1 within the time initially provided or that provided later, to get over the teething problems, there can be no claim raised even for credit of input tax and its set off and never of a refund in cash.' The petitioner hence cannot claim for the credit at this point of time. Despite the writ petition having been filed in 2022, the petitioner ought to have availed of the window of relief made available between 01.10.2022 and 30.11.2022. There is no question of a credit being permitted, which has not been sought for in the prescribed manner and within the time stipulated. There are absolutely no reason to entertain the writ petition, the same is dismissed.
-
2024 (9) TMI 1472
Challenge to order passed u/s 73 of the TNGST Act, 2017 - error apparent on the face of the record - eligibility to claim Input Tax Credit - HELD THAT:- The writ petition stands closed. The petitioner is at liberty to file a rectification petition under Section 161 of the TNGST Act, within a period of two weeks from the date of receipt of a copy of this order. If however, for any reason, the petitioner does not file the rectification petition within the stipulated period, the impugned order would stands revived. Petition closed.
-
2024 (9) TMI 1471
Cancellation of client s registration under Odisha Goods and Services Tax Act, 2017 - client is ready and willing to pay the tax, interest, late fee, penalty and any other sum required to be paid for the return form of his client to be accepted by the department - HELD THAT:- Reliance placed in the case of M/S. MOHANTY ENTERPRISES VERSUS THE COMMISSIONER, CT GST, ODISHA, CUTTACK AND OTHERS [ 2022 (11) TMI 1521 - ORISSA HIGH COURT] where it was held that ' the delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc., due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. The writ petition is disposed of.
-
2024 (9) TMI 1470
Review petition - Imposition of penalty - non-updation of the four e-waybills by the petitioners - HELD THAT:- The Coordinate Bench of this Court by its order dated 29th November, 2023 [ 2023 (11) TMI 1293 - CALCUTTA HIGH COURT] had not only taken note of the factum of e-waybills being updated within two minutes of interception but had also taken note that by reasons of genuine difficulty, updating of part-B of the e-waybills was not complied with immediately. It also appears from the aforesaid order that this Court taking note of the factum of non-disclosure of cogent reasons in the impugned order and the same being a non-speaking order and also being harsh, in the facts of the said case had modified the order of penalty to Rs. 50,000/-. Having regard to the aforesaid and taking note of the disclosure made in the writ petition, it is very difficult to conclude that the Court had passed the order by overlooking the factum of non-updation of the Part-B of the fourth e-waybill. There is no reason to conclude that the Court being oblivious of such statement had passed the order - Review dismissed.
-
2024 (9) TMI 1469
Violation of principles of natural justice - an opportunity for a hearing provided, but it failed to specify any date, time, or venue for the hearing - HELD THAT:- A perusal of the show cause notice dated August 8, 2023, clearly indicates that the authority marked 'not applicable' in the columns for the date, time, and venue of the personal hearing. This suggests that the authority was not inclined to provide a personal hearing to the petitioner, leading to the assessment order dated November 17, 2023. If the initial action is bad, subsequent proceedings based on such action cannot be sustained. The assessment was based on a show cause notice denying the petitioner the right to a personal hearing. Consequently, the proceedings based on the defective show cause notice must go. The authority is permitted to initiate a fresh proceeding under Section 73 of the Act of 2017, giving an opportunity of hearing to the petitioner. Should a new proceeding be initiated, the limitation under Section 73(10) of the Act should commence from the date of the new notice - Petition disposed off.
-
2024 (9) TMI 1468
Rejection of appeal filed by the petitioner against the order of demand - discrepancies in GSTR returns - HELD THAT:- Considering the fact that the notices were uploaded in the portal, but no hard copy was served on the petitioner, this Court feels that reasonable has been shown by the petitioner for the delay. Therefore, this Court is inclined to condone the delay of 263 days in filing the appeal. The delay of 263 days in filing the appeal before the first respondent is condoned and the order of the appellate authority/first respondent is set aside - Petition allowed.
-
2024 (9) TMI 1467
Violation of principles of natural justice - Challenge to demand notice issued under the Odisha Goods and Services Tax Act, 2017 - HELD THAT:- Any defect in the show cause notice would cause violation of principles of natural justice. On query made, respondent submits, time be extended for petitioner to file reply and thereafter in event personal hearing is sought, it will be given. The impugned demand is set aside and quashed. Petitioner has two weeks from date to file reply to the show cause. In event it does file reply, in it request may be made for personal hearing or separately thereafter. Petition disposed off.
-
2024 (9) TMI 1466
Seeking rectification of the order u/s 161 of the CGST/SGST Act - mismatch between GSTR-I filed by the supplier and GSTR-3B filed by the petitioner - input tax credit to which the petitioner was entitled has not been granted to him - HELD THAT:- Having regard to the limited nature of the reliefs now sought for by the petitioner, without going into the merits, this writ petition will stand disposed of directing the respondent to consider and pass orders on Ext.P9 rectification application filed by the petitioner in accordance with the law, after affording an opportunity of hearing to the petitioner within a period of 3 months from the date of receipt of a certified copy of this judgment. Petiiton disposed off.
-
2024 (9) TMI 1465
Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - difference between the purchase value, as reflected in the auto-populated GSTR 2A, and the purported outward supply value as per the petitioner's GSTR 3B returns - HELD THAT:- It is clear that tax liability was imposed on the difference between the purchase value, as reflected in the auto-populated GSTR 2A, and the purported outward supply value as per the petitioner's GSTR 3B returns. The petitioner asserts that the outward supply value was more than Rs.6 crores and not Rs.1.2 crore. Given that liability was imposed on deemed sales basis without the petitioner being heard, it is just and necessary to provide an opportunity to the petitioner to contest the tax demand on merits by putting the petitioner on terms. The impugned order dated 10.11.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. The petitioner is permitted to submit a reply to the show cause notice with in the aforesaid period - Petition disposed off.
-
2024 (9) TMI 1464
Challenge to assessment orders - lack of jurisdiction - discharge of entire duty liability from and out of the ITC availed by the petitioner, at the time of import - HELD THAT:- The challenge to the impugned order on the ground that the respondent lack jurisdiction based on the decision of M/S. RASATHE GARMENTS VERSUS THE STATE TAX OFFICER (ST) (INSPN.) , TIRUNELVELI, THE COMMISSIONER OF COMMERCIAL TAXES [ 2024 (6) TMI 481 - MADRAS HIGH COURT] is answered against the petitioner. The respondent is competent to pass the order in terms of above circular. That apart, the Act also does not discriminate between the officer from the Intelligence Wing or the Inspection Wing or the Regular Adjudication Wing. All of them are proper officers for the purpose of issuance of notice under Section 73 or 74 of the respective GST Act. At the same time, it is noticed that the petitioner has not given a clear reply and has suffered an assessment order. It is not open for the petitioner to state that all the information are available and therefore, the impugned order passed by the respondent is liable to be interfered with for failure on the part of the petitioner to get the necessary date / documents. Whenever a show cause notice is issued, it lays a foundation for future orders to be passed and therefore, it is incumbent on the part of an assessee to give a proper reply with proper tabulation, explaining the position with the documents which the petitioner has not done. This Court is inclined to set aside the impugned order, dated 24.04.2024 and remit the case back to the respondent to pass a fresh order on merits, subject to petitioner depositing 10% of the balance amount on the amount other than the defect no.1 relating to 100% adjustment of tax liability from and out of the ITC - The petitioner shall deposit 1% of the tax liability in terms of Section 86 (b) of the respective GST Rules, 2017. For the respective assessment years, the amount shall be deposited by the petitioner within a period of thirty (30) days from today. Petition allowed.
-
2024 (9) TMI 1463
Rejection of appeal on the ground that the appeal was beyond the condonable period under Section 107 of applicable GST statutes - belated filing of annual return in Form GSTR 9 - HELD THAT:- It is clear that the petitioner presented the appeal on 26.12.2023 and the condonable period lapsed on 17.12.2023. The period of delay beyond the condonable period is only nine days. In the affidavit filed in support of the writ petition, the petitioner stated that the papers were handed over to the accountant for filing the appeal and that the petitioner was not well during the relevant period. Immediately upon recovery, the petitioner contacted the auditor and came to know that the appeal had not been filed. These facts and circumstances justify the consideration of the petitioner's appeal on merits. Petition is disposed of by directing the appellate authority to receive and dispose of the petitioner's appeal on merits, without going into the question of limitation, provided such appeal is re-presented within ten days from the date of receipt of a copy of this order.
-
2024 (9) TMI 1462
Violation of principles of natural justice - petitioner did not notice the show cause notice or other communications in view of his limited computer knowledge - petitioner contends that the mechanism of reconciliation of GSTR 3B returns and the auto populated GSTR 2A was not in force during the relevant period - HELD THAT:- On examining the impugned order, it appears that the tax proposal was confirmed on the ground that the petitioner did not reply to the show cause notice. By taking into account the assertion that such non participation was on account of not being aware of proceedings, the interest of justice warrants re-consideration subject to putting the petitioner on terms. The impugned order dated 20.12.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to with in a period of fifteen days from the date of receipt of a copy of this order. The petitioner is permitted to submit a reply to the show cause notice within the aforesaid period - petition disposed off.
-
2024 (9) TMI 1461
Limitation period for initiating proceedings under Section 73(10) of CGST Act, 2017 - filing of annual returns under the Central Goods and Services Tax Act, 2017 - HELD THAT:- In the present case, the Assessment Year is 2018-19 and the end of the financial year comes on 31.12.2019, within which time as per Rule 80, an annual return has to be filed. The petitioner filed the annual return before 31.12.2019 and the present proceeding is initiated on 19.04.2024, as per Annexure P-3. The three year period as provided under Section 73(10) ends on 31.12.2022. The ground of limitation is raised on this count. The extension as provided in the second proviso to Section 44(2) is only with respect to the filing of a return even after the expiry of the further period of three years, from the due date of furnishing the annual return. Sub-section (2) as we notice speaks of any annual return to be filed within three years from the due date of furnishing the said annual return. Section 73(10) specifies three years from the due date of filing of annual return and not three years from the extended date of filing an annual return under Section 44(2). Further, it has to be noticed that the proviso under Sub-section (2) empowers the Government to issue a notification and the notification produced before us dated 28.10.2020 has been issued by the Commissioner who does not have such power. The notification is also issued under the proviso to Section 44(1) which empowers the Commissioner to exempt any class of registered persons from filing annual returns under the provision and not for extension of due date for filing of annual returns or extension of the period provided under Sub-section (2), for filing of annual returns. Interim stay of the Annexure P-3 order granted - Post on 11.09.2024.
-
2024 (9) TMI 1460
Violation of principles of natural justice - lack of jurisdiction - non application of mind - Reverse Charge Mechanism (RCM) liability issue - HELD THAT:- The petitioner replied on the RCM liability issue by stating that the amounts declared and paid under RCM are greater than the amount mentioned in the notice. The observation of the proper officer on this issue reflects complete non application of mind. Likewise, as regards trade payables, the petitioner replied stating that all trade payables are below 180 days. Once again, without applying his mind to the reply, an identical finding is recorded. Since the impugned order is vitiated by complete non application of mind and non consideration of the petitioner's reply, such order is liable to be set aside. The impugned order dated 30.04.2024 is set aside and the matter is remanded for reconsideration - Petition disposed off by way of remand.
-
2024 (9) TMI 1459
Refund order - rejection on the ground that the petitioner as an SEZ Unit was not allowed to claim refund under the GST law and the refund claim for the tax period on supplies made to SEZ Unit / Developers can be claimed only by the supplier of goods or services - HELD THAT:- Admittedly, no stay has been granted by the Hon ble Apex Court in the S.L.P. preferred by the Revenue against the aforesaid decision in the case of Britannia Industries Limited [ 2020 (9) TMI 294 - GUJARAT HIGH COURT] . The ratio laid down by the Division Bench of this Court in the case of Britannia Industries Limited still holds the field and thereby, the same ought to have been followed by the Appellate Authority while deciding the appeal of the Revenue. The Appellate Authority could not have ignored the dictum of law merely on the ground that the said decision is pending adjudication before the higher forum more particularly without any stay. The facts of the present case as well as the facts in the case of Britannia Industries Limited are more or less identical in nature and thereby, a different view than that of already taken by the Coordinate Bench of this Court in the case of Britannia Industries Limited cannot be takien. The present petition is allowed by quashing and setting aside the impugned order dated 30th November 2023 passed by the respondent No. 2 - Appellate Authority. The present petition is, accordingly, disposed of.
-
Income Tax
-
2024 (9) TMI 1458
Interpretation of Section 43A - losses arising out of fluctuation of exchange rates in servicing a foreign currency loan that is utilized partly for acquiring assets from outside India and partly for acquisition of assets within India - ITAT allowed the foreign exchange losses to be broken up in proportion to the value of import of assets and value of assets acquired locally, and allowed the latter component to be treated as revenue expenditure - whether losses should be entirely capitalised with the value of the assets acquired? - Accounting Standard (AS) 11 and its amendment - HELD THAT:- In the case at hand, the Respondent-Assessee opted for capitalizing and adding the expense arising out of exchange rate fluctuation on its foreign currency loan to the cost of the capital asset. Such election was under AS-11 and therefore, obviously, regardless of whether the assets financed thereby had been imported from outside India or acquired locally in India. It is trite law that accounting treatment in the commercial books is no conclusive indication of treatment in the tax returns, and one must have regard to the legislative stipulation in the tax legislation to ascertain if the expense is allowable as revenue expenditure or is to be capitalised as a capital expenditure. It is in this context that we are of the view that Section 37 (1) must necessarily be dealt with. Positive Mandate of 43A vs. Negative Caveat in 37 (1) - It is apparent that to attract the mandatory obligation to capitalise the expense relating to exchange rate fluctuation under Section 43A, the ingredients of Section 43A have to be attracted. The essential jurisdictional fact for the mandatory capitalisation of such an expense under Section 43A is that the capital asset financed by the foreign currency loan in question, must have been brought into India from a country outside India. To the extent the loan was utilised for such an import, even the Respondent-Assessee has without demur, capitalised the loss on exchange rate fluctuation in servicing the loan, to add to the cost of the asset. Looking at the ingredients of Section 37 (1) of the Act, we believe it would be necessary to look at the substance of the expenditure and come to a view that it is not in the nature of capital expenditure, for it to qualify as revenue expenditure for purposes of Section 37 (1). The gap in the Impugned Order is that the analysis on whether the expenditure in question cannot be regarded as capital expenditure, is missing. Effect of judgement in Wipro Finance Ltd. [ 2022 (4) TMI 694 - SUPREME COURT ] - Section 43A contains a positive enjoinment that losses due to exchange rate changes on a foreign currency loan taken for import of a capital asset must not be treated as revenue expenditure. This is why Section 43A is a non-obstante provision, that positively imposes such obligation notwithstanding anything contained in the Act. However, that positive obligation would not necessarily mean the converse that any loss on exchange rate fluctuation on a foreign currency loan taken for acquiring capital assets would necessarily not be a capital expenditure, only because the assets were not imported into India from abroad. It is made clear that the relevance of whether the fluctuation results in erosion of an asset s value or in enhancement of a liability s size, can also be fully articulated by the parties before the ITAT this was a facet hotly contested before us. To be clear, the question to be answered by the ITAT on remand is as follows:- Whether the expenditure in the sum of Rs. Rs.4,78,38,245/- that has been disallowed by the AO and the CIT-A, and allowed by the ITAT, would on its own showing (de hors Section 43A that contains a positive enjoinment of treating such exchange rate losses relating to foreign currency loan deployed to import assets as capital expenditure), qualify as not being capital expenditure, so that it can be considered towards allowance as revenue expenditure under Section 37 (1). We are deeply conscious that this Appeal pertains to the Assessment Year 2009-10. By the time this litigation came to be filed in the High Court, after traveling through two rounds of appeal, it was October 2017. Final hearing of this appeal took place in 2024. The scope of remand being limited, as articulated above, we trust the ITAT would deal with the remanded proceedings at its earliest possible convenience, bearing in mind the vintage of the proceedings. Both the Revenue and the Assessee are also requested to extend full cooperation to the ITAT by participating in the hearings expeditiously, without seeking unnecessary adjournments, so as to enable the ITAT to deal with the issue at the earliest. We also make it clear that nothing contained in this judgement and order is to be regarded as an expression of our opinion on the merits of the issue being remanded to the ITAT.
-
2024 (9) TMI 1457
Rejection order of the 2nd respondent - seeking return of seized documents - return of the original documents seized during the search conducted in the petitioner's house - HELD THAT:- Totally, 5 documents were seized from the premises of the petitioner. The petitioner seeks return of the documents which were not only seized from the premises of the petitioner, but also from the third party houses. Hence, he has no right to seek those documents which were seized from the third party. He is entitled to only 5 documents. However, he can only seek those documents upon completion of the assessment proceedings. Now, they are entitled to get only a copy of those documents. These are all the documents which ultimately were seized about the involvement of the petitioner's son in the tax evasion. The respondents have come to the conclusion that there are incriminating documents in connection with the offence alleged against the petitioner's son. Until completion of the assessment proceedings, the petitioner is not entitled for the original documents. The respondents have rightly rejected the contention of the petitioner. No reason to interfere with the same. Accordingly, this Writ Petition is dismissed.
-
2024 (9) TMI 1456
Benefit of Direct Tax Vivad Se Vishwas - HELD THAT:- No doubt, there is an embargo and certain categories of persons from availing the benefit of the amnesty under the Act. As far as the petitioner is concerned, sting if any would stand attracted in terms of Section 9(c) of the Act which reads as under:- 9(c) to any person in respect of whom prosecution for any offence punishable under the provisions of the Unlawful Activities (Prevention) Act, 1967, the Narcotic Drugs and Psychotropic Substances Act, 1985, the prevention of Corruption Act, 1988, the Prevention of Money Laundering Act, 2002, the Prohibition of Benami Property Transactions Act, 1988 has been instituted on or before the filing of the declaration or such person has been convicted of any such offence punishable under any of those Acts; A reading of the above provisions indicates that either a criminal case should be pending or it should have resulted in a conviction. There is no embargo for settling the dispute in respect of a person who has be acquitted before filing of the declaration. Therefore, there is no merits in the stand of the respondents. Thus, inclined to allow this Writ Petition with liberty to the respondents to recall the order in case conviction is sustained by the Delhi High Court against the petitioner.
-
2024 (9) TMI 1455
Addition as unexplained income from purported sale of casurina trees u/s 69 - Assessment u/s 144(A) - assessment of agricultural income reported as unexplained income based on the enquiry report of the Income Tax Inspector - HELD THAT:- In this case, the Department has disbelieved the letter of the person who had given a statement in favour of the appellant without subjecting the said person to any cross examination. Therefore, the substantial question of law to be answered in this appeal is whether a statement of a person who had given a statement in favour of the appellant can be disbelieved and discredited long after it was given without cross examination of the said person by a mere reliance on an enquiry Report of the Income Tax Officer based on information gathered by the Income Tax Officer from the Village Headman. The evidence which department has gathered is long after the felling of trees and sale by the appellant by placing reliance on the statement of the Village Headman. The statement of the Village Headman can at best only corroborate the stand which department based on evidence, if there were other compelling evidence. As incumbent on the part of the Income Tax Department to have summoned the said Mr.Thangasamy of Alangudi Taluk, Pudukottai District and verified and confirmed whether the said person had indeed given the statement which was produced by the Appellant and if so whether the statement given by the said person was true or not. Although the department is governed by preponderance of probability and not by strict rules of evidence, yet it was incumbent to have secured the presence of the said person. They should have cross examined him before disbelieving the statement. Therefore, an issuance of summon to Mr.Thangasamy who had given statement by the Income Tax department is not sufficient. Income Tax department should have secured the presence of Mr.Thangasamy to answer to the summons and should have confronted him and contradicted the content of the statement of Mr.Thangasamy produced by the appellant by way of cross examination. Therefore, without cross examination, the statement of Mr.Thangasamy can neither be disbelieved nor disregarded. The statement of Mr.Thangasamy cannot be therefore discredited. If Mr.Thangasamy had refused to co-operate, the Income Tax Department was not without remedy under the provisions of the Income Tax Act, 1961 to secure his presence. Since this exercise was not done, the demand confirmed u/s 144(A) which view was affirmed by the AO passed u/s 143(3) and by the Commissioner of Income Tax (Appeals) and by the Income Tax Appellate Tribunal vide order are liable to be interfered as unsustainable. We are therefore of the view, the succeeding orders passed against the appellant in so far as the addition under Section 69A of the Income Tax Act, 1961 as unexplained credit / unexplained money of the appellant are incorrect and are liable to the set aside. Decided in favour of assessee.
-
2024 (9) TMI 1454
Validity of reassessment proceedings - Challenge to the assessment order rejected by giving liberty to the appellant to work out the remedy before the appellate authority - availability of depreciation which the appellant had availed on the vehicles - HELD THAT:- Single Judge in both the writ petitions was that after the assessment was completed on 24.10.2014 for the assessment year 2007-08 u/s 148(3) of the Income Tax Act, 1961 and invocation of power u/s 148, ibid ., for the purpose of Section 147, ibid. , on 01.03.2013 was bad and therefore, overruling of the objection of the appellant was bad. Consequently, the impugned assessment order dated 24.10.2014 was also without jurisdiction. As a matter of fact, the issue on the availability of depreciation which the appellant had availed, appears to have been answered by the Hon'ble Supreme Court in Industrial Credit and Development Syndicate Limited. [ 2013 (1) TMI 344 - SUPREME COURT ] held if the lessee was in fact the owner, he would have claimed depreciation on the vehicles, which, as specifically recorded in the order of the Appellate Tribunal, was not done. It would be a strange situation to have no claim of depreciation in case of a particular depreciable asset due to a vacuum of ownership. The entire lease rent received by the assessee is assessed as business income in its hands and the entire lease rent paid by the lessee has been treated as deductible revenue expenditure in the hands of the lessee. This reaffirms the position that the assessee is in fact the owner of the vehicle, insofar as Section 32 of the Act is concerned We are, therefore, of the view that no useful purpose will be served by remitting the matter to the learned Single Judge to pass orders on merits, as it would result in wastage of judicial time. To balance the interest of the appellant and the Income Tax Department, we deem it fit to quash the impugned assessment order dated 24.10.2019 and remit the case to the Assessing Officer to pass fresh orders on merits, in the light of the decision of Industrial Credit and Development Syndicate Limited - AO shall examine the issue afresh and pass orders on merits. Needless to state, the appellant shall be heard before passing orders.
-
2024 (9) TMI 1453
Faceless assessment scheme - Jurisdiction of the Jurisdictional Assessing Officer (JAO) to issue notice u/s 148 - HELD THAT:- As decided by JASJIT SINGH, [ 2024 (8) TMI 228 - PUNJAB AND HARYANA HIGH COURT] Notices issued by the JAO under Section 148 of the Act, 1961 and the proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B have been found to be contrary to the provisions of the Act, 1961 and accordingly notices issued are set aside for want of jurisdiction.
-
2024 (9) TMI 1452
Unexplained share capital and share premium u/s 68 - assessee has directly or indirectly received share capital and premium from entities/persons not having creditworthiness to provide such huge amount of unsecured loans - ITAT deleted addition - HELD THAT:- We note that an identical question arose for consideration in Principal Commissioner of Income Tax-Central-I v. Surya Agrotech Infrastructure Limited [ 2023 (9) TMI 391 - DELHI HIGH COURT] wherein held irresistible conclusion is that since the undisclosed income which is subject matter of the present dispute had already been taxed in the hands of the flagship company, it cannot be again subjected to tax in the hands of the respondents/assessee companies in the form of application of the said income as their share capital. No substantial question of law.
-
2024 (9) TMI 1451
Faceless assessment of income escaping assessment - validity of notice issued by the JAO as not in accordance w/sec 151A - not permissible for the Jurisdictional Assessing Officer to issue a notice u/s 148, as the same would amount to breach of the provisions of section 151A - HELD THAT:- As decided in recenet case recent decision of this Court in Nainraj Enterprises Pvt. Ltd. [ 2024 (7) TMI 511 - BOMBAY HIGH COURT ] relying on Hexaware Technology Ltd. [ 2024 (5) TMI 302 - BOMBAY HIGH COURT ] provisions of Section 151A had clearly brought a regime of faceless assessment. The Court held that it was not permissible for the Jurisdictional Assessing Officer to issue a notice u/s 148, as the same would amount to breach of the provisions of section 151A of the IT Act. There is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice u/s 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdiction of both FAO or the JAO with respect to the issuance of notice u/s 148. An act which is done by an authority contrary to the provisions of the statue, itself causes prejudice to assessee. All assessees are entitled to be assessed as per law and by following the procedure prescribed by law. Therefore, when the Income Tax Authority proposes to take action against an assessee without following the due process of law, the said action itself results in a prejudice to assessee. Decided in favour of assessee.
-
2024 (9) TMI 1450
Addition u/s 68 - addition of share capital and share premium as bogus - identity of shareholders, creditworthiness of the shareholder and genuineness of the transaction not proved - HELD THAT:- Except for filing paper documents, which are in the nature of self-serving recitals but could not justify the genuineness of the transactions for investing in a newly formed company with no past history nor having any plausible business model, that too at a huge premium of Rs. 499/- for shares of the face value of Rs. 1, the assessee could not establish the genuineness of the transactions and the creditworthiness of the share applicants. The factors which militate against the assessee and question the genuineness of the entirely dubious and unjustified transactions for receipt of share capital along with huge share premium from corporate entities. Since neither the identity, nor the creditworthiness, nor the genuineness of the transition could be established and the whole arrangement was dubious and a smokescreen to camouflage the real transactions, as is rightly held by the Ld. AO and the Ld. CIT(A), therefore, the Ld. AO was justified in adding the amount to the income of the assessee as unexplained cash credits, which additions has been rightly confirmed by the Ld. CIT(A). Appeal of the assessee is dismissed.
-
2024 (9) TMI 1449
Addition u/s 68 - Admissibility of additional evidence under Rule 46A - CIT(A) deleted addition admitting additional evidences - as argued AO making the addition of the whole of the sum deposited into the bank account stating that on the one hand AO ask the assessee to reconcile the sale with mandi tax and pin point the difference in sale and on the other hand make the addition of the whole cash deposited into the bank account as unexplained - assessee he is aged 64 years and is assessed to tax for last more than 40 years. Since inception he is engaged in the business of Aadatia (आडतिया) of agriculture products - CIT(A) deleted addition As argued CIT(A) has admitted and considered the additional evidence without giving adequate opportunity to the AO in the remand proceeding - HELD THAT:- While concluding assessment proceedings, AO eventually considered all the documentary evidence furnished and made addition by invoking the provisions of section 68 as against 69A as was originally proposed. In support of the above submission, copies of acknowledgements of submission made before ld. AO, whereby cash books of all the three proprietary concerns were submitted is placed on record. AO though the ld. DR did not controvert this aspect of the matter and therefore, based on the material placed on record it is very much clear that no additional evidence was furnished by assessee during appellate proceedings before ld. CIT(A). Based on these observations ground no. 1 2 raised by the revenue has no leg to stand and thereby the same are dismissed. Addition u/s 68 on account of Cash deposited by assessee in bank account - CIT(A) has deleted that addition by observating that the assessee submitted cash books of all the three proprietorship concerns, all the bank statements, Ledger account of all the expenses claimed in all the three proprietorship concerns, Ledger account of farmers with supporting evidences - The assessee is one of the license holder of the mandi samiti (owned and controlled by the State Government) as per which he became entitled to get one shop area in the above stated type of mandi premises from where he carried out his Adat activity as per the rules and regulations formed by the State Government and implemented through the Government Officers in the relevant Mandi Samiti by observing the prescribed practice that as and when a vehicle carrying the agriculture produce enters into the premises of the mandi samiti, the same measured in terms of weight and nature of goods and thereafter prescribed gate pass is issued by the mandi samiti which contains the details of the produce brought into along with the details of the sender / person who brings the produce and the details of Adatia to whom such produce is being assigned for sale by auction. With this, the produce is brought to the shop of such adatia where such produce is unloaded from the vehicle and after making entry of such goods into the register authenticated by the Mandi Samiti, the same is sold through open auction process, where the prospective bidders bid for the produce are gathered and the successful bidder after making the payment as per the conditions between the broker (Adatia like the assessee) and the customer, take delivery of the goods (produce). AO has alleged that assessee might have engaged in the trading business which as not disclosed and the cash deposit in the bank account of his commission agency firm belonged to such undisclosed trading activity and accordingly treated the said cash deposit as unexplained cash credit and made the addition of entire cash deposited into bank u/s 68 of the Income Tax Act. While alleging so the ld. AO has failed to appreciate the fact that the bank accounts under which the said cash was deposited belonged to and pertaining the transactions carried out by the proprietorship firms of the assessee namely M/s Kanhaiya Lal Nenu Mal and M/s Prashant Kumar Lakhmi Chand where the consignment sale of more than 17.00 crores were carried out and part of the same was received in cash and duly recorded in the books of accounts maintained. The entire cash was deposited in the bank accounts regularly maintained by the assessee therefore under no circumstances such deposit could be held unexplained. Even otherwise the addition of cash deposits of Rs. 8,60,03,806/- made u/s 68 by treating the same as unexplained cannot be made as the assessee has submitted the cash book all the three concerns and the cash so deposited into the bank account is duly reflected in the books of account. The assessee has explained the source of this cash deposit. We also note that the ld. AO of the assessment order has reproduced the details of amount received by the assessee in cash and through recovery of credits (as furnished by assessee) AO pointed out Bilty issued by transporter for consignment of agriculture produce, which was in the name of assessee (though there was no invoice issued in the name of assessee) and a details submission on the same has already been made. Firstly, Bilty is always issued in the name of recipient and assessee, being registered Adatiya in Mandi Samiti was authorized to receive goods for sale. Ld.AO could have verified this fact from the record of Mandi Samiti, which has not been done It is thus submitted that addition made by ld.AO amounts to double addition which is against the principle of taxation. It is further submitted that ld. AO grossly erred in not appreciating the fact that only Real Income can be taxed and moreover in the case of assessee, ld. AO miserably failed to understand the facts that in the business of Adatia only commission income can be taxed. AO has neither rebutted the submission of the assessee that cash deposits represent sale consideration received by assessee on behalf of farmers nor brought any material on record by making any independent enquiry that assessee has indulged into the trading activity which was not disclosed and the cash deposited in the bank account is over and above the cash receipts from his regular ADAT business. Thus, once accepting commission income, receipt of money their behalf is incidental. In fact, ld.AO is vested with power to make direct enquiries and if he had any doubts, notices could have been issued Mandi Samiti to cross verify the Sales or to bankers to confirm that payments were made to farmers and subsequent deposits were on account of their sale consideration. Based on these discussion so recorded and ongoing through the detailed order of the ld. CIT(A) we see no infirmity in the finding of the ld. CIT(A) while deleting the addition in the hands of the assessee. Disallowance made by ld.AO being 25% of expenses on ad hoc basis - CIT(A) deleted addition - We note that during the course of assessment proceedings, ld. AO had issued notices u/s 133(6) to the persons to whom salary has been paid but they remained un-complied and only one of them has reverted that he was in employment somewhere else however, has not submitted anything else like Salary Certificate etc. and has further informed that he was in employment with the assessee prior to this year and after this year also which rather proves that he was under employment with the assessee in the year under consideration. Also, the persons to whom salary is being paid are not techno friendly and is not having legal counsels to look after their respective income tax login along with their mails and rather they are simple accountant, salesmen, loaders etc. which are earning their livelihood from the employment. Further the fact that they have provided services was neither doubted nor can be denied looking to the volume of business carried out by the assessee where the total consignment sale of more than 17.00 crores was taken place in the entire year which could not be possible without the help of manpower. Further except the salary expenses, no doubts were raised on the other expenses claimed by the assessee thus disallowance has been made without pointing out any specific defect in the records which were completely placed on record by the assessee vide letter dated 22.02.2022 In view of the above, we note that ld. CIT(A) has decided the appeal after considering all the documentary evidence furnished by the assessee and evidence adduced which are not disputed. Assessee has placed on record all the details which are necessary to prove the claim of salary expenses - This factual detail has not been controverted. Therefore, we see no infirmity on the facts of the case while ordering to delete the lumpsum addition of 25% out of the expenses so claimed by the ld. CIT(A). Appeal of the revenue stands dismissed.
-
2024 (9) TMI 1448
Application of provision of sec. 69A - cash deposit in the bank during the demonetization period - additions are out of regular books as maintained - HELD THAT:- The provisions of section 69A provides to make the addition if the assessee is found to be the owner of any money, bullion jewellery and other valuable articles and such money bullion jewellery or valuable is not recorded in the books of the account of the assessee. When the sale has been duly recorded and supported by the books of account produced by the assessee the addition cannot be made u/s. 69A. But since the books of account of the assessee has already been rejected and the profit is estimated @ 10 % on the money so deposited into the bank account where we note that since this addition being trading addition made by the AO he has not given the credit of the profit already reflected in the books of account and therefore, while doing so the ld. AO has not reduced that profit which we considered is required to be given credit to the assessee while making the addition therefore, we direct the ld. AO to reduce the profit already declared by the assessee @ 5.74 % and balance amount 4.26 % can be considered as trading addition in the hands of the assessee. Application of provision of sec. 145(3) without rejecting method of accounting and stock valuation - HELD THAT:- We note that the assessee is not challenging the rejection of the books based on the detailed observation made by the ld. AO but contend that the method of accounting as well as the stock valuation was not rejected. We note that once the books of account is rejected based on detailed 6 reasons by the ld. AO, it may not be a particular part of the record but once the same is rejected on various reasons we do not find any infirmity in the finding recorded by the ld. CIT(A) and that of the ld. AO. Therefore, ground no 1 raised by the assessee stands dismissed.
-
2024 (9) TMI 1447
Addition u/s 68 - bogus LTCG - share capital received by the assessee treated to be not genuine - HELD THAT:- We are of the considered view that the assessee has proved the share application money are received from the share applicants companies by necessary documents justifying the identity, genuineness and creditworthyness of the said parties and accordingly are of the considered view that the Assessing Officer grossly erred in making the additions to share application money under section 68 of the Act and which was rightly deleted by the learned CIT(A). Consequently, we decline to interfere with the order passed by the learned CIT(A) and dismiss the grounds of appeal raised by the Revenue.
-
2024 (9) TMI 1446
Validity of final assessment order passed u/s. 147 r.w.s. 144C(13) in pursuance of the Hon ble Dispute Resolution Panel direction - Addition u/s 69A - unexplained investment/credit - failure on the part of the assessee to furnish the same before the lower authorities - whether the draft assessment order passed by the ld. A.O. on irrelevant facts could be sustained pursuant to the rejection of the same by the Hon ble DRP and also for the allegation made by the assessee that the same was passed mechanically and without application of mind? HELD THAT:- Hon ble High Court of Calcutta in the case of Excel Commodity Derivative (P) Ltd. [ 2022 (9) TMI 310 - CALCUTTA HIGH COURT ] wherein it was held that the term information stated in Explanation 1 of section 148 cannot be taken at ease for the purpose of reopening an assessment and the Revenue cannot be given an unbridled power to reopen the assessment based on such information. Further, it held that the ld. A.O. has lightly used the said information and had issued notice and further proceeded to make addition on a fresh ground after duly considering the assessee s submission. As evident that the assessee s case would squarely be covered by the said decision where the Hon'ble High Court has held that in such situation there is no necessity to remand the matter back to the ld. AO by holding that the said order is illegal and wholly unsustainable. AR has also placed reliance on the decision of Akshar Builders Developers [ 2019 (1) TMI 1277 - BOMBAY HIGH COURT ] wherein it was held that the ld. A.O. cannot reopen the assessment mechanically based on erroneous information received by him. Further, it was held that there was complete non application of mind on the part of the ld. A.O. This proposition was further supported by the decision of the Hon'ble Jurisdictional High Court in the case of Paranjape Schemes (Construction) Ltd. [ 2024 (3) TMI 736 - BOMBAY HIGH COURT ] As evident that the action of the ld. A.O. in reassessing a case on erroneous facts and on non application of mind has been reprimanded by various decisions of the Hon ble High Courts and Hon'ble Apex Court. This fallacy which occurred while reopening the assessment in the present case cannot be rectified by the subsequent action of the Hon ble DRP in rejecting the draft assessment order and in proposing a fresh addition.We hold that the impugned draft assessment order and the consequential final assessment order are held to be invalid and are hereby quashed. Appeal filed by the assessee is allowed.
-
2024 (9) TMI 1445
Validity of reassessment proceedings - reason to believe - unexplained loan receipts - A.Y. 2011-12 - HELD THAT:- We find that theLd.AO has already adjudicated the issue by issuing notice under section 142(1) during the impugned assessment year by the order passed U/s 143(3) of the Act. The same issue was reopened by the report of the Investigation department. During the assessment, we find that the Ld.AO had not made any separate investigation against the unsecured loan which was treated as accommodation entry. Mere change of opinion cannot be the reason for reopening. We respectfully relied on the order of Seimens Financial Services P. Ltd [ 2023 (9) TMI 552 - BOMBAY HIGH COURT] and Aditi Constructions vs DCIT [ 2023 (5) TMI 281 - BOMBAY HIGH COURT] and Engineers Allied Elastomers ( 2024 (9) TMI 1371 - ITAT MUMBAI] which have the common legal issue. Accordingly, the notice issued under section 148 is bad in law. The ld. AO acted beyond jurisdiction to reopen the assessment. We set aside the impugned appeal order and direct the ld. AO to delete the addition amount. Decided in favour of assessee. Addition of loan and interest thereon - AY 2013-14 - We find that the entire addition was made on the basis of the report of the investigation department. The Ld.AO has not made any separate verification about the loan creditors and the interest payment. The assessee has shifted its onus to the revenue by submitting all relevant documents in relation to the loan-creditors. In case of interest, the assessee deducted TDS and paid the amount through banking channel. AO was not able to bring any contrary fact and not even nullified the documents submitted by the assessee. The ld. AO ld. CIT(A) only relied on the report of the investigating authority. CIT(A) only followed the order of the Ld.AO and confirmed the addition. We find that the entire addition was made without proper verification. The assessee had shifted its onus by submitting the evidence before the revenue authority. No further investigation was done. The ld. AO was unjustified for addition the same. Decided in favour of assessee.
-
2024 (9) TMI 1444
Net Profit (NP) estimation on unaccounted turnover/cash sales - AO estimated the profit % 8% based on seized material - HELD THAT:- We find that the AO on the aggregate quantum of sale, 8% profit has been calculated on estimate basis. However, CIT(A) reduced it by 5%. It is well-settled that in case of estimate of profit u/s 145, Revenue has to make an honest and fair estimate of the income by applying the profit rate declared in the preceding years. Considering that the assessee is engaged in the business of trading in Kirana items, we are of the opinion that the profit @ 4% which amounts to ₹ 35,70,673, shall meet justice. Since a sum of ₹ 75 lakh has been offered for taxation as income from business, the additional profit needs to be telescoped with the offer for addition income. No separate addition is required at all in the peculiarity of the circumstances. Unexplained expenditure - Assessee argued once the AO has rejected books of accounts and estimated profits on turnover, the same shall take care of the expenses incurred for earning such profits and any addition made with respect to such expenses would tantamount to double addition - HELD THAT:- The expenditure on account of unrecorded cash coupons works out as detailed at table above is treated as unexplained expenditure and assessed u/s 69C of the Act and the same is taxed at maximum marginal rate of 60% u/s 115BEE - There is no scope for estimation of unexplained expenditure because the same is a deeming provision and actual incurring of expenditure is must. The addition itself is fragile and is based on pure surmise and conjunctures. The basic invocation of section 69C is uncalled for merely on estimates. The learned CIT(A) has appropriately decided which needs no interference at our end. Thus, though on a different line of logical line of thinking, we uphold the order passed by the CIT(A) by dismissing the ground no.4. Addition based on 4% net profit estimated on the turnover - We have heard the rival arguments, perused the material available on record and gone through the orders of the authorities below. We find that the CIT(A) has recorded that the appellant has offered ₹ 75 lakh, as additional income, which duly covers the profit @ 4% on the total turnover. Thus, we find that the CIT(A) has correctly considered the additional income and our interference is not called for. Addition on account of profit estimated @ 8% on the difference in the stock physically found vis- -vis as appearing in books of accounts - It is admitted that the Assessing Officer has rejected books of account and estimated turnover and profit on sales from the business. CIT(A) deleted the addition stating the reason that once the books of accounts are rejected and the profit percentage has been estimated, no separate addition is called for the shortage found in stock. The same can also be telescoped with the additional income offered for ₹ 75 lakh. Therefore, CIT(A) has correctly decided to delete the addition. As such, we decline to interfere in his rock solid findings. Accordingly, we uphold the order passed by the learned CIT(A) by dismissing the ground no.5, raised by the Revenue. Additions proposed by the Assessing Officer as modified by the learned CIT(A) is quashed. The returned income is sacrosanct and no addition may be made thereafter in view of the additional income offered for ₹ 75 lakh which has already suffered tax.
-
2024 (9) TMI 1443
Addition u/s 36(1)(viia) - provision for bad and doubtful debts disallowed - whether the presence of both rural advances and non-rural advances by a bank, is a must in order to be eligible to claim deduction towards provision for bad and doubtful debts u/s 36(1) (viia) ? - HELD THAT:- On identical facts, the Co-ordinate Bench of ITAT Bangalore, in the case of ING Vysya Bank Ltd. [ 2014 (9) TMI 44 - ITAT BANGALORE] held that in order to allow assessee's claim under section 36(1)(viia) of the Act, what has to be seen by Assessing Officer, is as to whether provision for bad and doubtful debts (PBDD) is created, irrespective of whether it is in respect of rural or non-rural advances by debiting profit and loss account and, to extent of provision for bad and doubtful debts (PBDD) is so created, assessee is entitled to deduction subject to upper limit of deduction laid down in said section. Our view is fortified by the order of Bhagini Nivedita Sahakari Bank Ltd. [ 2018 (12) TMI 322 - ITAT PUNE] wherein it was held that a co-operative bank is entitled to claim deduction of bad debts provided in first part of section 36(1)(viia)(a) being 7.5 per cent of total income even in absence of rural branches. Actual provision made in the books by the Assessee on account of provision for bad and doubtful debts (PBDD) (irrespective of whether it is rural or non-rural) has to be seen. To the extent PBDD is so created, then subject to the permissible upper limits referred in section 36(1)(viia) (a), the deduction has to be allowed to the Assessee. For availing the benefit of 7.5% (present limit 8.5%) of total income, there is no condition that it should be in respect of any rural branches. All types of banks described under sub-clause (a) of clause (viia) are entitled to seek deduction of an amount not exceeding 7.5% (present limit 8.5%) of total income and only condition is that there should be provision for bad and doubtful debts in the books of account. Based on these facts and circumstances, we delete the addition made by the assessing officer and allow the appeal of the assessee.
-
2024 (9) TMI 1442
Accrual of income in India - treatment by the assessee of the Royalty Income received from non-resident OEMs, who have reported their sales from India - Taxability u/s 9(1)(vi)(c) and Article 12(7) of India-US DTAA - HELD THAT:- Respectfully following the decision of the co-ordinate bench [ 2023 (6) TMI 966 - ITAT DELHI ] that when the entire edifice of the present additions made by the Assessing Officer is based on the assessment order passed for the assessment year 2012-13, which now stands reversed by the Tribunal in our view, the addition made by the AO are not sustainable , this grievance is allowed in favour of the assessee and against the Revenue. Accordingly, we direct the Assessing Officer to delete the additions made u/s 9(1)(vi)(c). Assessee appeal allowed.
-
2024 (9) TMI 1441
Rectification u/s 254 - determination of fair market value of shares - whether the workings given by the Department for determination of fair market value of shares could be construed as workings given in terms of Rule 11UA of the Income Tax Rules, 1962? - main contention of the revenue is that these workings were not in accordance with Rule 11UA of the Rules and the Bench had also not directed the Department to furnish the workings in terms of Rule 11UA of the Rules - main contention of the assessee is that the actual consideration received by it should be adopted on sale of shares as against Rs. 131.86 per share determined as fair market value. HELD THAT:- In the course of original MA proceedings, the assessee had placed on record before this Tribunal, the workings of fair market value of shares as per Rule 11UA of the Rules, wherein, FMV was arrived at Rs. 70.59 by the assessee. Even in the prayer of the assessee in his miscellaneous application which is reproduced supra, we find that the assessee is only seeking to include the fact that the workings were sought to be asked by the Tribunal in accordance with Rule 11UA of the Rules for determination of fair market value while computing capital gains on sale of SBPL shares to understand the intention of this Tribunal as to whether the workings of fair market value of share were called for as per Rule 11UA of the Rules or not. Tribunal always intended adoption of Rule 11UA of the Rules for determination of FMV of shares and directed the Department to furnish the workings accordingly. But the workings given by the Department to the Tribunal were not in accordance with Rule 11UA of the Rules as it had not considered the figures pertaining to certain intermediary companies. Whereas, in assessee s wife case i.e. Mrs. Neelu Analjit Singh, who had also sold certain shares along with assessee herein of SBPL, the Tribunal [ 2019 (12) TMI 1198 - ITAT DELHI ] had observed that the valuation of Rs. 131.86 per share adopted by the AO suffered from certain fallacy and the same was not according to Rule 11UA of the Rules. Accordingly, the Tribunal in the case of Mrs. Neelu Analjit Singh directed the AO to verify all the figures from the audited balance sheet of the intermediary companies and compute the fair market value of shares accordingly. AO had passed the giving effect order u/s 254/ 143(3) of the Act dated 12.02.2020 in the case of Mrs. Neelu Analjit Singh, wherein, for the very same shares, the AO by adopting Rule 11UA of the Rules had determined fair market value of SBPL share at Rs. 70.59 per share. Assessee in its miscellaneous application is only trying to substitute the value of FMV which was arrived at Rs. 131.86 per share by the Tribunal, which contain certain basic fallacies ad admitted by the Tribunal in the case of Mrs. Neelu Analjit Singh vide order dated 19.12.2019 if Rule 11UA of the Rules is adopted. Hence, it purely becomes arithmetical exercise. Accordingly, we have no hesitation to conclude that miscellaneous application of the assessee is only to rectify the arithmetical mistake that had crept in the original Tribunal order dated. Hence, this miscellaneous application proceedings is effectively meant only to modify the order passed by this Tribunal on 01.12.2017 and not to recall the same. On careful reading of the original appellate order dated 01.12.2017 of the Tribunal, we find that the Tribunal had ultimately sought to determine the fair market value of shares by using NAV method, which is admittedly one of the prescribed methods in Rule 11UA of the Rules. This aspect also goes to prove the intention of the Tribunal beyond reasonable doubt (de hors the observation made in first MA order dated 19.03.2018) that it was always intending to adopting only Rule 11UA of the Rules for determination of fair market value. In fact even in the workings given by the Department at Rs. 131.86 per share, provisions and Income Tax provisions had been added back which itself indicates that even the AO had sought to determine the FMV using Rule 11UA of the Rules only. In our considered opinion, the workings given by the Department before the Tribunal determining the FMV at Rs. 131.86 per share contained certain fallacies as it was not in accordance with Rule 11UA of the Rules, which alone is sought to be modified and rectified in the present miscellaneous application proceedings. Hence, the fallacies contained in the workings of the Department do constitute mistake apparent from record warranting rectification u/s 254(2) of the Act. Against the original Tribunal order passed on 01.12.2017 in the case of the assessee, the assessee had preferred an appeal before the Hon ble High Court and the same is admitted. Against the order passed by this Tribunal in the case of Neelu Analjit Singh dated 19.12.2019, the revenue as well as assessee had preferred respective appeals before Hon ble High Court and the same are already admitted. It was always the case of all the parties before us i.e. Mr. Analjit Singh, Mrs. Neelu Analjit Singh and the Income Tax Department, that Rule 11UA of the Rules cannot be applied for the purpose of section 48 of the Act while computing the capital gains. But Tribunal directed the Department to adopt FMV as per Rule 11UA of the Rules after dismissing the preliminary plea of the assessee that actual consideration received should be considered for computing the capital gains. This preliminary plea is already subject matter of challenge before the Hon ble High Court. As far as the Tribunal is concerned, since it had adopted two different values as fair market value, the same is sought to be rectified by this present MA proceedings. We direct the AO to adopt FMV of Rs. 70.59 per share and recomputed the capital gains accordingly in the case of assessee herein. The order dated 01.12.2017 stands modified accordingly. Miscellaneous Application of the assessee is allowed.
-
2024 (9) TMI 1440
Validity of Order Of NFAC, Delhi - Assessment based on non-consideration of Form 10 - Lack of reasoning for additions by AO - Failure to conduct specific inquiry by NFAC - Dismissal of appeal without adjudication on merits by NFAC - HELD THAT:- In the present case, when the detailed written submissions have been filed by the assessee before the NFAC, which has been simply reproduced and held that the assessment order does not need any interference, hence, the entire appeal has been dismissed without even uttering a word into the merits of the case. Such kind of order has to be held perverse, bereft of any findings and bad in law. Since the NFAC has not adjudicated the issue on merits, we are of the considered view that the matter has to be remanded back to the file of the NFAC for denovo adjudication as per law while complying with the principles of natural justice. The NFAC should also call for a report from the AO regarding Form No. 10 filed by the assessee and if on the basis of Form No.10 and consideration thereof, as whatsoever submissions have been made by assessee, the NFAC finds there is merit in the matter, accordingly, the matter should be disposed off as per law at the same time, the assessee is also directed to comply with the hearing notices as and when called for through submitting relevant documents/evidences before the NFAC. The grounds of appeal raised by the assessee are allowed for statistical purposes.
-
2024 (9) TMI 1439
Revision u/s 263 by CIT - disallowing the amount paid on termination of agreement considering it as capital expenditure and disallowing amount paid on termination of License and supply agreement considering it as liquidated damage / penalty in nature and thereby disallowing the same u/s 37 - HELD THAT:- There is no dispute about the facts that the AO had missed to conducted enquiry in certain important aspect before allowing the expenditure as revenue expenditure to the assessee i.e. the AO did not verified the commercial expediency of the various agreement produced before him by the assessee i.e. he did not enquiry as to whether, the L S agreement novated by SAL in favour of ASPL on 14.11.2011 were on some consideration or not., a) he did not enquiry whether there was any clause in such novated agreement to pay any termination charges or not, b) he did not enquiry why the title of the termination of the L S agreement dated 31/10/2013 has been titled as Asset Purchase Agreement where as the termination charges paid by the assessee has been claimed as revenue expenditure, c) he also did not enquiry actually who was liable to pay the termination fees, d) he did not make any inquiry, when a total consideration of Rs. 340.45 crores was to be receivable by ASPL from Mylon Ireland on account of L D agreement, why only Rs. 273,05,47,600/- had been accounted for in the books of ASPL etc. Hence there was lacking on the part of the AO to make proper enquiry before allowing the expenditure as revenue. On going through the explanation 2 to section 263, which has been inserted w.e.f. 01/06/2015, it is abundantly clear that, if the AO failed to make proper inquiries or verification, then it shall be deemed that the order passed by the AO is erroneous so far as it is prejudicial to the interest of the revenue. Hence under such circumstances section 263 can be invoked. In our opinion, since the explanation has been made effective from a specific date , it will be applicable to the every order of AO, which has been passed by him w.e.f. 01/06/2015. As the impugned order of the Ld. AO has been passed on 31/01/2018, which is much latter than 01/06/2015, hence the explanation 2 to section 263 of the Act will be applicable on the order passed by the Ld. AO in the case of the assessee. Once the explanation 2 to section 263 of the Act being applicable on the order passed by the Ld. AO and there is lack of inquiry on the part of the Ld. AO(as discussed above), in our opinion the invocation of section 263 by the Ld. PCIT is justified and the claim of the assessee is not correct. Hence we dismiss these grounds of the Assessee. Disallowance of termination charges - From Assets Purchase Agreement, it is observed at the top of the page, the title of agreement itself shows that it is an assets purchase agreement. On the same page it has been mentioned that the seller shall cede their rights and obligations under the licence agreement and the supply agreement to the buyer pursuant to the terms of this agreement . Whereas Section 2.1 at page number 114 talks about purchase of all the right, title and interest of seller by the buyer. Section 2.5 at page 114 and 115 talks about the purchase price to be paid in lieu of this assets purchase agreement. Section 3.3 at page number 118 talks about the transfer of assets in the agreement. Hence on the basis of such observation, it is abundantly clear that it was an agreement for purchase of assets and the amount paid under this agreement was on account of the purchase price of the said assets and was not in the nature of termination charges/fees . Hence, we are of the considered opinion that the charges of Rs. 340.45 crores paid by the ASPL to Pfizer are in the nature of capital expenditure and not in the nature of revenue expenditure. Hence we dismiss the ground no. 4 of the assessee. Disallowance of liquidated damages - There is no dispute about the facts that MLL was not interested to continue the L D agreement with Fresenius and as per the business need of MLL, the assessee terminated the L D agreement with Fresenius and was liable to pay the liquidated damages of Rs. 6.19 crores. It is also clear from the aforesaid portion of submission of the assessee, MLL was not interested to continue the L D agreement with Fresenius and the ASPL had paid the liquidity damages of Rs. 6.19 crores to Fresenius to protect the business interest of MLL. The payment of liquidated damages made by the ASPL by no means related to the business needs of the assessee. As per section 37 of the Act, the expenditure which is incurred wholly and exclusively for the purpose of business, can only be allowed as business expenditure. Hence we are of the concerned opinion that the liquidated damages of Rs. 6.19 crores paid by the ASPL to Fresenius were not incurred wholly and exclusively for the purpose of business of the assessee and therefore can not be allowed as expenditure to the assessee u/s 37 of the Act. Decided against assessee.
-
2024 (9) TMI 1438
Assessment u/s 153A - incriminating material found during the search action or not? - Validity of additions based on the Departmental Valuation Officer (DVO) report - HELD THAT:- The assessment years beyond six years but not more than ten years can be reopened u/s 153A of the Act only if the AO is in possession of evidence depicting the escapement of income of aggregating Rs.50,00,000/- or more in such relevant assessment years beyond six years from the date of search. These provisions extending the assessment beyond six years and upto ten years put a stringent condition of possession of evidence with the AO of escapement of income of Rs.50,00,000/- or more. Such provisions extending the scope of assessment beyond six years from the date of search has to be construed strictly and the evidence relied upon by the AO in such assessments of extended period must be a tangible evidence. It has been held time and again by various courts of law that the DVO s report on standalone basis without any corroborating material cannot be construed as incriminating material and hence the additions solely on the basis of the DVO s report are not sustainable. In the case of the assessee, even there is no difference found out between the investment disclosed by the assessee in the books of account as compared to the DVO s report in respect of property at Leela Bhawan Chowk, Patiala. Under the circumstances, since the evidence relating to the undisclosed investments in respect of relevant assessment years as defined in Explanation 1 to 4th Proviso of section 153A(1) was less than Rs.50,00,000/-, therefore, the reopening of the assessment of the relevant years was bad in law and the same is hereby quashed. Assessee appeal allowed.
-
2024 (9) TMI 1437
Rectification u/s 254(2) - second opportunity to the assessee to raise issues which he had omitted to raise at the time of the original appeal - Tribunal omitted to consider that no status is mentioned in the notice issued u/s 148 and as such the re-assessment for the assessment years 2006-07 to 2009-10 was without jurisdiction and liable to be annulled, as it was a patent mistake apparent on the face of record which deserved to be rectified u/s 254(2) HELD THAT:- It is fairly clear that none of the issues that are now being agitated in the Misc. Applications were taken up before the ITAT as grounds of appeal in Form 36 or even during the course of arguments before the ITAT during the hearing of ITA [ 2023 (3) TMI 853 - ITAT ALLAHABAD] . Therefore, there was never any occasion for the ITAT to pronounce judgment on any of the issues that are contained in the Misc. Applications filed by the assessee. The provisions of section 254(2) are very clear, in that they exist for rectification of any mistake committed by the ITAT in any order passed by it. They do not exist for rectification of mistakes in orders passed by the AO or ld. CIT(A). The proper recourse of action for the assessee in such cases is to either move rectification application before the lower authorities or to file appeals against their decisions before the next higher authorities, including the ITAT. If the assessee chooses not to agitate any issue before the ITAT during the course of appeal, no mistake would arise in the order of the ITAT, if the ITAT did not adjudicate on such issues. The provision of Misc. Applications u/s 254(2) are also not designed to give a second opportunity to the assessee to raise issues which he had omitted to raise at the time of the original appeal. Nor do the powers of the ITAT extend to revising their orders upon consideration of new facts or points of law. Accordingly, we are in agreement with the views as expressed by the ld. DR. There being no infirmity in the orders of the ITAT and the issues being raised by the assessee in the Misc. Applications having never being raised earlier, are not fit grounds to recall the order passed by the Hon ble ITAT in [ 2023 (3) TMI 853 - ITAT ALLAHABAD] All the Misc. Applications are, therefore, dismissed as non-maintainable.
-
2024 (9) TMI 1436
Disallowance of interest - difference between the rate of interest paid on borrowed capital and the rate at which the amount was advanced to the wholly owned subsidiary - as argued merely because the assessee had agreed for the addition before the AO there is no estoppel against law and assessee had sufficient funds of its own - HELD THAT:- We find the assessee in the instant case has advanced the amount to its wholly owned subsidiary which is not in dispute. The Hon ble Supreme Court in the case of S.A. Builders [ 2006 (12) TMI 82 - SUPREME COURT] has held that where the funds are advanced by the holding company to its subsidiary and even if interest was not charged, advancing of funds to the wholly owned subsidiary would be for commercial expediency and no disallowance of interest is warranted. We find the Delhi Bench of the Tribunal in the case of Moonrock Hospitality Pvt. Ltd [ 2021 (9) TMI 1033 - ITAT DELHI] while deciding an identical issue has held that where assessee had advanced the funds to its wholly owned subsidiary company for the purpose of business, no interest paid on borrowed funds could have been disallowed u/s.36(1)(iii) of the I.T. Act. Decision of Hon ble Supreme Court in the case of S.A. Builders [ 2006 (12) TMI 82 - SUPREME COURT] and the decision of Moonrock Hospitality (P) Ltd. [ 2021 (9) TMI 1033 - ITAT DELHI] we are of the opinion that no disallowance of interest paid on borrowed funds could have been disallowed. We, therefore, set-aside the order of the CIT(A) and direct the AO to delete the addition. Grounds raised by the assessee are accordingly allowed.
-
2024 (9) TMI 1435
Addition u/s. 69A r.w.s. 115BBE - Deposits by the assessee in his bank account during Demonetization period unexplained - HELD THAT:- Section 69A of the Act is not applicable in this case because there are proper entries in the books of accounts of the assessee in relation to cash sale, cash balance and deposit (SBN s) Bank. It is noted that the sale transaction in cash cannot e taxed u/s 69A of the Act because the sales against cash and deposit of such cash in assessee s bank account cannot be called unexplained money. It is also noted that cash memos were immediately issued to the buyer and delivery was made immediately against cash SBN s/ cash and thus sales are recorded properly in the books of accounts. Lower authorities did not find any defects in the books of accounts and trading. It is also noted that there is no adverse observations in the AO s order particularly in para 3.5 of assessment order that there has been abnormal increase in cash sales as well as cash balance during the period prior to demonetization period. The Bench noticed that provisions of Section 115BBE are applicable only on the income taxable u/s 68,69,69A,69B or 69D of the Act. Since in this case, the source of cash deposit in bank is income from business and thus Section 115BBE is not applicable. CIT(A) failed to take into consideration various papers and documents including the under mentioned papers and documents produced/furnished during assessment proceedings before the AO - Assessee has duly discharged the initial burden of proof which lay upon him by explaining that source of SBN s deposited at Rs. 26.00 lacs during demonetization period is out of cash sales made by him and duly credited the sales in the regular books of account of the assessee. It is also noted that the assessee has given necessary evidence on the basis of its books of accounts, sale/purchase invoice, cash book, journal, ledger bank statements and other relevant records that the cash deposited by him in bank accounts upto 31.12.2016 were out of sale proceeds in cash and the cash in hand as per books of accounts as on 01.04.2016 and cash withdrawals made from the banks before 08.11.2016 and as such the assessee should be deemed to have discharged the primary onus which lay upon him and there after onus is shifted on the department to prove that cash amount deposited in bank represent assessee s undisclosed income. AO has fully failed to discharge the burden of proof which squarely lay upon him. Reliance is placed on the judgment of Apex Court in the leading case of CIT vs. Orissa Corporation Pvt. Ltd. [ 1986 (3) TMI 3 - SUPREME COURT] . Hence taking into consideration the above deliberation, the Bench does not concur with the findings of the ld. CIT(A) and the Ground No. 3 of the assessee is allowed.
-
Customs
-
2024 (9) TMI 1434
Classification of imported goods - prohibited goods - whether the goods imported fall under category of silver jewellery which is freely importable or under restricted category of ITC (HS) Code 71069210? - HELD THAT:- The Apex Court in the case of Bilkis Yakub Rasool V Union of India Others [ 2024 (1) TMI 1318 - SUPREME COURT] reiterated the principle that the jurisdiction of the Supreme Court under Article 32 and of the High Court under Article 226 of the Constitution is extraordinary, equitable and discretionary and it is imperative that the petitioner approaching the Writ Court must come with clean hands and put forward all the facts before the Court without concealing or suppressing anything and seek an appropriate relief. The jurisdiction exercised by this court under Article 226 is extraordinary, equitable and discretionary and it was imperative that petitioner must have come with clean hands and put forward all the facts before the Court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure petitioner is guilty of misleading the Court and his petition should be dismissed at the threshold without considering the merits of the claim. Petitioner having made false averments in the petition that it was a registered partnership firm and reiterating the same during the course of arguments and that also in response to a specific query raised on by the court, in our view, has abused the process of law. The petitioner is not entitled to the extraordinary, equitable and discretionary reliefs - petition dismissed.
-
2024 (9) TMI 1433
Seeking grant of regular bail - smuggling of foreign origin gold - offences punishable under Sections 135(1)(a) and 135(1)(b) of the Customs Act, 1962 - implication and coercion by custom officers or not - HELD THAT:- Considering mainly the facts that petitioners have clean antecedent, nothing has been recovered from the conscious possession of the petitioners, rather the recovery have been made from the vehicle in question and the nature of allegation levelled against the petitioners in the FIR as well as the petitioners period of custody, let the petitioners, above-named, be released on bail on furnishing bail bond of Rs. 50,000/- each with two sureties of the like amount each to the satisfaction of the learned Special Judge, Economic Offences, Patna, in connection with Economic (DRI) Case No. 22(O) of 2024, arising out of Unit Case No. 31 of 2023-24, subject to fulfilment of conditions imposed. Bail application allwoed.
-
2024 (9) TMI 1432
Dismissal of petition for discharge filed under Section 245(2) Cr.P.C. - offences under Section 135(1)(a) and 135(1)(b) of the Customs Act, 1962 - improperly imported goods - Seizure of gold bars from possession of petitioners or not - existence of mens rea - HELD THAT:- It is settled law that at the stage of framing charge, the Court has to prima facie consider whether there is sufficient ground for proceeding against the accused and the Court is not required to appreciate evidence to conclude whether the materials produced are sufficient or not for convicting the accused. It is also settled law that while considering an application seeking discharge from a case, the Court is not expected to go deep of the probative value of the material on record, but on the other hand, the Court has to form a presumptive opinion as to the existence of the factual ingredients constituting the offence alleged, and for that purpose, the Court cannot conduct a roving enquiry into the pros and cons of the matter and weigh the evidence as if it is a main trial. Since the gold was seized from the possession of the pillion rider of the motorcycle which was driven by the petitioner, whether the petitioner was also involved in the alleged occurrence, cannot be gone into the present stage and it is a matter for trial. Though the petitioner has challenged the sanction order on the ground that the sanction was accorded without considering the nature of evidence, the role of the person in the evidence and mens rea of the person, the petitioner has not whispered anywhere, what are the facts that were not considered in the sanction order and that the petitioner has not shown that there is apparent error on the face of the sanctioning order - Moreover, the petitioner has not produced any evidence or materials so as to enable the Magistrate to give a finding that the charge is groundless. The order dismissing the petition cannot be found fault with. Consequently this Court concludes that the Criminal Revision Case is devoid of merits and the same is liable to be dismissed.
-
2024 (9) TMI 1431
Violation of principles of natural justice - respondent did not provide sufficient and reasonable opportunity to the petitioner nor acceded to his request for personal hearing and proceeded to pass the impugned order - issuance of SCN invoking Section 124 of the Customs Act, 1962 - HELD THAT:- A perusal of the material on record will indicate that despite the petitioner making a request for crossexamination of the Deputy Director and for production of documents, the respondent No.2 has proceeded to pass the impugned order, without providing sufficient and reasonable opportunity to the petitioner in this regard. So also, the first appellate authority/respondent No.1 has mechanically/summarily confirmed the order in original despite the petitioner taking up a specific contention that he was deprived of an opportunity of cross-examining the Deputy Director and also producing certain documents. In order to provide one more opportunity to the petitioner to establish his defence by producing the necessary documents as well as cross-examining the Deputy Director, without expressing any opinion on the merits/de-merits of the rival contentions of the parties, it is deemed just and appropriate to set aside the impugned order dated 09.03.2023, passed by the appellate authority. Petition allowed by way of remand.
-
2024 (9) TMI 1430
Smuggling - Confiscation of prohibited goods - red sanders - penalties u/s 114 of the Customs Act - appellant s case is that although the Airway Bill was filed in the name of his firm through its courier agency Fedex, he is not responsible because it was filed by his employee Brijlal without his authorisation - HELD THAT:- It is a well established legal principle that for any action of the employee, the employer is responsible. It is not the case that Brijlal filed the Airway Bill on his own account or in the name of somebody else. The submission of the appellant that he had not authorised Brijlal to file this Airway bill cannot be accepted. An employee works on the directions of his employer and no employer issues written authorisations to his employee to file every paper or document. It is presumed that the employee worked at the behest of his employer unless the contrary is proved. There is nothing on record to show that Brijlal acted on his own, except the unsubstantiated assertion by the appellant. From the facts of the case, there remains no manner of doubt that the airway bill was filed in the name of the appellant by his employee on his directions and when the consignment was caught, the appellant attempted to shift the blame to his employee. This submission cannot be accepted. Penalty - HELD THAT:- The appellant also contested the quantum of penalty on the ground that if the penalty imposed on him and the penalty imposed on Fedex are added, they would exceed the limit laid down under section 114 of the Customs Act. This submission is erroneous. Section 114 of the Customs Act lays down the penalty imposable on each person and not the sum of penalties imposed on all persons. There are no reason to interfere with the impugned order. The impugned order is upheld - appeal dismissed.
-
2024 (9) TMI 1429
Classification of importe dgoods - bed sheets - classifiable under CTH 5407 or under CTH 6304? - wilful misdeclaration of the goods - levy of penalties under Section 114A of the Customs Act, 1962 - HELD THAT:- Admittedly, the goods in question are Bed spreads i.e., Bed sheets. Although made of 100% polyester yarn, it does not mean that the article loses its identity as Bed spreads / Bed sheets, which are properly classifiable under Customs Tariff Heading 6304. It is admitted that the articles which have been imported by the respondents are woven fabric of synthetic filament yarn, but they are Bed spreads / Bed sheets and quantity of the goods in numbers has been described by the respondents. In the circumstances, the merit classification of the impugned goods is under CTH 6304 of the Customs Tariff Act. Therefore, the impugned goods classified as Bed spreads (Bed sheets) classifiable under CTH 6304 of the Customs Tariff Act. In view of this, the impugned goods have been correctly classified by the respondents and the same are not liable for confiscation. The respondents are liable to pay duty by classifying the impugned goods under CTH 6304 of the Customs Tariff Act and no penalty is imposable on the respondents. No redemption fine is payable by the respondents. The appeals filed by the Revenue are dismissed.
-
2024 (9) TMI 1428
Valuation of imported goods - Motor Controller - rejection of declared value - classification of the item imported from CTH 8503 0090 to CTH 8708 9900. Valuation of goods - HELD THAT:- The assessing officer has rejected the transaction values without any valid basis/reasons and without following the due procedure as laid down under Section 14 and Valuation Rules, especially when there is nothing on record to suggest that the transaction values declared by the appellant were not the price actually paid for the goods when sold for export to India. There is also nothing on record to suggest that the buyer and seller of the goods were related or price was not the sole consideration for sale. Also, it is found that the Department has adduced no evidence that the respondent has paid any amount over and above the invoice value to the foreign supplier. In these circumstances, the enhancement of assessable values by the ld. adjudicating authority is liable to be struck down and set aside and the impugned bill of entry is to be assessed at values declared by the Respondent - the Ld. Commissioner (Appeals) has given categorical findings to reject the enhancement of value by the assessing officer and there are no reason to interfere with the same - the impugned order passed by the Commissioner (Appeals) upheld, accepting the transaction value declared by the Respondent in the respective Bills of Entry. Classification of the goods imported by the Respondent - HELD THAT:- The Respondent has classified the goods under the Tariff Heading 8503 0090. Customs Tariff Heading 8503 covers parts suitable for use solely or principally with the machines of heading 8501 or 8502 and Custom Tariff Item 8503 0090 covers parts of electric motor (other than DC motor) . The electric motor is classified under the chapter heading 8501. In the Assessment Order, the Ld. Adjudicating authority has observed that the 'Controller' is used for starting and stopping the motor, selecting forward or reverse rotation, selecting and regulating the speed etc. It is observed that all these functions are connected to motor and the 'controller' is principally used with the motor to perform these functions. Thus, the 'controller' imported by the Respondent is rightly classifiable under the chapter 8503. The controllers are not covered under the CTH 8708 as per the explanatory notes to Section XVII. It is also pertinent to note that the Notes to CTH 8503 covers the parts to be used with motor and as such merits the classification of the goods under CTH 8503. Thus, the goods imported by the Respondent are rightly classifiable under Chapter heading 8503 0090 as claimed by them in the respective Bills of Entry. The correct classification of the goods in question is CTH 8503 0090. Therefore, hold that the Ld. Commissioner (Appeals) has rightly held the classification of the impugned goods under CTH 8503 0090. There are no infirmity in the impugned orders and the same are upheld - the appeals filed by the Revenue are dismissed.
-
2024 (9) TMI 1427
Valuation of imported goods - old and used worn clothing, completely fumigated - enhancement of value - confiscation - redemption fine - penalty - HELD THAT:- This issue came up before this Tribunal in the case of VENUS TRADERS, RAINBOW INTERNATIONAL, AL-YASEEN ENTERPRISES, GLOBE INTERNATIONAL, KRISHNA EXPORT CORPORATION, PRECISION IMPEX, BMC SPINNERS PVT. LTD., SHIVAM TRADERS, LEELA WOOLEN MILLS, M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI [ 2018 (11) TMI 625 - CESTAT MUMBAI] , wherein this Tribunal has observed ' the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so. In the light of the admitted failure to comply with the licensing requirements, we uphold the confiscation of the goods under Section 111(d) of Customs Act, 1962. However, it is our opinion that the ends of justice would be served by reducing the redemption fine to 10% of the ascertained value and penalty to 5%.' The redemption fine and penalty imposed on the respondent to the tune of 10% 5% respectively on the assessed value is sufficient. Therefore, the redemption fine and penalty confirmed by the ld.Commissioner (Appeals) are sufficient to meet the end of justice - there are no infirmity in the impugned order and the same is upheld - appeal filed by the Revenue is dismissed.
-
Corporate Laws
-
2024 (9) TMI 1426
Oppression and mismanagement - whether the Appellants are entitled to the waiver of requirements under Sections 244(1)(a) and (b) of the CO Act 2013 so that they can apply under Section 241 of the Act for a case of oppression and mismanagement? - HELD THAT:- While dealing with an application for a waiver under Section 244, the NCLT is very much empowered to make a preliminary assessment to determine whether the Petition falls within the purview of Sections 241 and 244. While the NCLAT in the Cyrus Investments [ 2017 (9) TMI 1500 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] case did hold that the merits of the case should not be considered at the waiver stage, but this does not preclude the NCLT from determining whether the Petition falls within the ambit of Sections 241 and 244. In the instant case, the waiver was refused based on the finding that the Petitioner has no prima facie case as the primary complaint in the petition relates to the directorship of the Petitioner, and hence the complaint is directorial. The important question is whether such a removal tantamounts to an oppressive or prejudicial conduct. The Hon ble Supreme Court in Tata Consultancy Services [ 2021 (3) TMI 1181 - SUPREME COURT ] has made it clear that mere removal/termination of the Director cannot be projected as something that would trigger the just and equitable Clause (2) to grant relief under Sections 241 and 242 of the Act. It is noted that the removal of the CEO / Executive Director at the AGM was not a motion by the management of the Company, but by another shareholder of the Company i.e. Respondent No.21. In this case, it is noticed that there are ongoing complaints and counter-complaints between the Appellants and the Respondents even prior to the filing of the Company Petition. But the Company Petition was filed by the Appellants around the time when a proposal was in circulation for the removal of Appellant No.1 as Director / Executive Director along with a notice for AGM. Even the interim relief sought in IA No. 5855 of 2023 in this Appeal is for staying the decision taken in the Annual General Meeting (AGM) dated 30.09.2023 with respect to removal of the Appellant No.1 as an Executive Director of the Respondent No.1, apart from various other interim reliefs. Appellant relies upon the conclusion in Cyrus Investments Private Limited vs Tata Sons Limited and Ors. [ 2017 (9) TMI 1500 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ], that there is a situation in the instant case also, that until and unless the minority shareholders join together, shareholding will not come up to 10% of the issued share capital of the Company and the threshold for filing a Petition under Section 241 of the Companies Act, 2013 will not be met. The Appellants with a total shareholding of 5.83%, do not meet the requirement as per Section 244(1)(a) and 244(1)(b). The Appellant s argument that this case presents exceptional circumstances meriting the grant of a waiver is not convincing. Perusal of the materials on record and the circumstances of the petition and the Appeal do not indicate any exceptional circumstances. The threshold for granting a waiver under Section 244 is high and is intended to be an exception rather than the rule. The NCLT s decision indicates that the Appellant has not demonstrated such exceptional circumstances that would justify bypassing the statutory requirement of a minimum shareholding for the filing of a petition under Section 241. The Petition revolves significantly around the Appellant s removal as a Director and the related grievances. Section 241 is not intended to address such personal grievances, but is meant to protect the interests of the company and its shareholders against genuine acts of oppression and mismanagement. The NCLT was, therefore, correct in refusing the waiver based on its assessment that the Petition does not substantiate a case of oppression and mismanagement as envisaged under the Companies Act. It is concluded that the NCLT acted within its jurisdiction and in accordance with the principles of law while denying the waiver under Section 244 of the Companies Act, 2013 - there are no infirmity in the orders of the NCLT - appeal dismissed.
-
Insolvency & Bankruptcy
-
2024 (9) TMI 1425
Maintainability of Section 7 Application - application barred by time limitation or not - relevant date of default - exclusion of period of Limitation as available u/s 22(5) of SICA Act, 1985 - extension of Limitation in pursuance of the Recovery Certificate. What is the date of default committed by Company, whether 01.06.2019 as claimed in Section 7 Application or the default was committed in the Year 2001 as pleaded by the Company and accepted by the Adjudicating Authority? - HELD THAT:- The Appellant in its Appeal itself claim issuance of recall Notice dated 16.02.2001, which clearly recall the loan and directed the Company to pay within 10 days. The date of default as per the recall Notice is clearly 26.02.2001 - there are no valid reason for mentioning 01.06.2019 as date of default for purposes of IBC. It is well settled that for filing an Application under Section 7, Article 137 of the Limitation Act 1963 is applicable - the date of default in Section 7 was imaginary and without any basis and the date of default is the Year 2001 (26.02.2001). Whether the benefit for excluding the period of Limitation as available under Section 22(5) of SICA Act, 1985, has been rightly denied by the Adjudicating Authority on account of prosecuting the OA No.03/2002 before the DRT by the Appellant culminating into Recovery Certificate dated 19.10.2006? - HELD THAT:- The Adjudicating Authority did not correctly construed the provisions of Section 22 of SICA Act. The period which is covered by Section 22(1) deserves to be excluded as required by Section 22(5). In the present case, it is not required to express any opinion with regard to proceeding initiated by Appellant by OA No.03/2002 and the legal consequence of the said proceeding. It is however to be noticed that when the Recovery Certificate dated 19.10.2006 was issued, the reference under SICA had already been dismissed on 06.06.2006. Hence, on the date when Recovery Certificate was issued SICA Proceedings were not pending - the Appellant was entitled to exclude the period for the purposes of Limitation which is covered by Section 22(1) and Section 22(5) of the SICA Act and the view taken by the Adjudicating Authority in this regard is not approved in the facts of the present case. Whether after excluding the period of Limitation as per Section 22 of SICA Act 1985, the Application filed by the applicant was within period of Limitation? - Whether the Appellant is entitled to the extension of Limitation in pursuance of the Recovery Certificate dated 19.10.2006, OTS letter dated 10.01.2008 and OTS letter dated 28.07.2010? Whether the Order of the Adjudicating Authority rejecting the Section 7 Application as barred by time deserves to be interfered with in this Appeal? - HELD THAT:- The date of default being 26.02.2001, Limitation for filing the Section 7 Application under Article 137 started running which came to be arrested by filing the reference by the Company on 12.09.2002. The reference was dismissed on 06.06.2006 thus period from 12.09.2002 to 06.06.2006 needs to be excluded. Appeal having been filed against the Order dated 06.06.2006 on 23.11.2006, which came to be dismissed on 29.09.2010. The said period from 23.11.2006 to 29.09.2010 also needs to be excluded. The period after 30.09.2010 till 04.03.2013 during which the Writ Petition remain pending before the High Court needs no exclusion being not covered by Section 22(1). Further, no exclusion can be allowed after 31.12.2013, when the AAIFR dismissed the Appeal. The period during which the Writ Petition remain pending and the period after 31.12.2013, in which no exclusion is available itself exhaust period of 3 Years for filing the Application under Article 137. On 19.12.2019 when the Section 7 Application was filed the period of 3 Years had already came to an end. It is need to be seen whether after 27.07.2013, when the period extended under Section 18 of Limitation Act comes to an end, whether there is any other acknowledgement within 3 Years period. The Appellant has relied on the Balance Sheet for the Year 2015-16, which Balance Sheet has been brought on record both by the Appellant and the Company. The Balance Sheet 2015-16 have been signed on 26.09.2016. Thus, acknowledgement if any has to be treated from 26.09.2016, before which acknowledgement 3 Years period from the OTS letter 28.07.2010 has already come to an end. Thus, acknowledgement in the Balance Sheet are after 3 Years of the expiry of the period of Limitation. Thus, in any view of the matter, the Application filed by the Appellant on 19.12.2019, was much beyond period of Limitation which was available to the Appellant to file Section 7 Application. The Adjudicating Authority did not commit any error in rejecting Section 7 Application filed by the Appellant as barred by time - there is no merit in the Appeal - The Appeal is dismissed.
-
2024 (9) TMI 1424
Condonation of 185 days delay in refiling of the Appeal - HELD THAT:- The delay in refiling can be condoned only if the Tribunal is satisfied that there is reasonable and justifiable cause for not refiling the appeal on time. On looking at the sequence of events, it is found that the Appeal was e-filed on 02.12.2023 and defects were intimated soon thereafter by the Registry on 11.12.2023. On perusal of the defect list pointed out by the Registry, most of the defects are minor in nature like lack of pagination, need of rescanning of certain pages of the appeal, correction of index etc. The correction of such defects was by no stretch of imagination of a time-consuming nature. The defects which were indicated by the Registry clearly fell in the routine category which were easily curable. The Applicant has also not indicated any circumstance beyond his control which warranted 185 days to clear the defects. Even the attribution of court vacations as a ground for delay does not cut ice since duration of court vacations are never that long. Clearly therefore, since the time of intimation of defects, the Applicant slept over the defects for nearly six months. No earnest efforts were made by the Applicant to correct the defects. It cannot be the unilateral prerogative of the Applicant to elect when it chooses to cure the defects to get the matter listed. This shows that the applicant was casual, callous and negligent in refiling the appeal - The Applicant cannot be given any indulgence keeping in view that the IBC proceedings have stringent timelines to be followed and the proceedings have to be concluded in a time-bound manner. Thus, sufficient ground has not been made out for condonation of 185 days delay in refiling of the Appeal. The refiling delay application is rejected - application dismissed.
-
2024 (9) TMI 1423
Admissibility of pleadings when respondent does not file a counter affidavit - judicial implications of non filing of a Counter - HELD THAT:- NCLT has recorded that it was conscious of the objection raised by the Appellant in the objection, failure to consider the same and to record specific finding on it, that is, on the facts as pleaded by the Appellant in the Memo of Objection, would render Judgment being perverse and without application of mind especially when the pleadings of the Appellant remain undenied by the Respondent s Counsel having denied to file a Counter Affidavit, qua the pleadings. Accordingly, the Judgment dated 09.07.2024 as rendered in CP/IB/173(CHE)/2023 would be held to be vitiated, owing to the ground which has been taken by the appellant that even after taking note of the Appellant s contention raised in his objection dated 14.03.2024, and referring to the same in the body of the Judgment, the Learned Adjudicating Authority has not recorded any, no finding on the same in its judgment. Even in the light of the Judgment of Mobilox Innovations Private Limited [ 2017 (9) TMI 1270 - SUPREME COURT ], where the guidelines have been framed therein for the purposes of determining an application under Section 9 based on the criteria prescribed therein prior to the imposition of moratorium under Section 14, since the aforesaid factors have not been considered while passing the final judgment, the judgment Impugned will be held as being not in consonance to the provisions contained under Section 424 of the Companies Act and therefore, the initiation of the Section 9 proceedings would be bad and without application of mind. The Impugned Judgment dated 09.07.2024 as rendered by the National Company Law Tribunal, Chennai Bench in CP/IB/173(CHE)/2023, would hereby stand quashed - the proceedings are remanded back to the Learned National Company Law Tribunal, Chennai Bench, to redecide the matter afresh after considering the rival contentions and particularly in the context of the pleading which has been raised qua the claim which is subject matter of consideration and decide the same on its merit.
-
2024 (9) TMI 1422
Approval of the Resolution Plan - rejection of the application to allow submission of a revised Resolution Plan - violation of the Principle of Natural Justice - HELD THAT:- From the Minutes of the 9th CoC Meeting held on 15.12.2023, as quoted above, it is clear that CoC on 15.12.2023, considered both the Resolution Plan i.e., Resolution Plans submitted by M/s. Saverni Neutech Pvt. Ltd. as well as the SRA M/s. Trinity India Forgetech Pvt. Limited. Resolution Plan of M/s. Trinity India Forgetech Pvt. Ltd. was approved with 92.87% vote shares and Resolution Plan of M/s. Saverni Neutech Pvt. Ltd. was disapproved by 92.87%, vote shares and the Plan which was earlier submitted by M/s. Saverni Neutech Pvt. Ltd. has considered and rejected. There is no occasion for M/s. Saverni Neutech Pvt. Ltd. to pray for further revised Resolution Plan when it failed to file Resolution Plan, according to its own case within the time allowed as it reflected from the email dated 18.12.2023 sent by the Appellant themselves. Adjudicating Authority did not commit any error in rejecting the Application I.A. No.124/2024 filed by Sandeep Jayantilal Vadodria. Insofar as the Appeal filed by the Prem Trading Company, one of the contentions raised is that Prem Trading Company who was Financial Creditor having 2.48%, vote shares was not permitted to vote. Suffice it to say that Authorised Representative of the Appellant Prem Trading Company, Rakesh Patel was present in the CoC Meeting, which is recorded in the Minutes - It has been noted that Rakesh Patel has voted only on the agenda 1, 6, 7 8, and thereafter he exited, he having participated in the EOI process as co- Resolution Applicant in M/s. Saverni Neutech Pvt. Ltd. and Rakesh Patel who was Authorised Representative of Financial Creditor was participating in EOI. He was rightly not permitted to vote. He rightly exited from the voting which was held on Item No. 2. In any view of the matter, vote share of the Prem Trading Company is only 2.48% and vote share for Prem Trading Company was not considered in favour of the approval of the Plan and the Plan was approved by 92.87% vote shares of HDFC Bank Ltd. the largest Financial Creditor. There are no merit in the Appeal filed by Prem Trading Company. In the CoC Meeting held on 15.12.2023, Prem Trading Company was represented by its Authorised Representative and the grounds which are sought to be raised in the Appeal are without any substance. Appeal dismissed.
-
2024 (9) TMI 1421
Admission of Section 7 Application - financial debt or not - Notices were never served on the Corporate Debtor and the Adjudicating Authority on second date of hearing proceeded Ex-Parte against the Corporate Debtor - HELD THAT:- In the facts of the present case, the Adjudicating Authority in the Impugned Order has relied on record of default by NeSL and held that Report is sufficient evidence to arrive at the conclusion to an amount of debt. There can be no dispute that report of NeSL is an important piece of evidence, but in the facts of the present case where the Corporate Debtor has no opportunity to place its defence, it cannot be said that reliance on NeSL Certificate was conclusive evidence to come to the conclusion that there was a Financial Debt. Adjudicating Authority in Paragraph 3 of the Order has noticed the Balance Sheets maintained by the Corporate Debtor. Although the Balance Sheets have been noticed, but the Adjudicating Authority failed to notice that long-term borrowing and long-term liabilities have been mentioned under two different heads. Hence, non-mention of the amount of ₹1,00,00,000/- under the heading long-term borrowing has to be given some meaning and purpose. Long-term liabilities can be different kind of liabilities which may be an Operational Debt, Financial Debt or any other nature of debt. However, the real nature of transaction between the parties needs to be examined and adjudicated by the Adjudicating Authority before admitting Section 7 Application. In the present case, the Corporate Debtor unfortunately could not appear before the Adjudicating Authority to raise his defence, hence in the facts of the present case, the ends of justice be served in remitting the matter before the Adjudicating Authority for fresh consideration with liberty to the Appellant to file its Reply within three weeks. There is no appropriate consideration of the real nature of transaction on basis of which Section 7 Application was filed by the Adjudicating Authority. The ends of justice be served in remitting the matter for fresh consideration before the Adjudicating Authority, with liberty to the Appellant to file a Reply within 3 weeks from today - Appellant is allowed three weeks time to file a Reply to Section 7 Application before the Adjudicating Authority - appeal allowed.
-
PMLA
-
2024 (9) TMI 1420
Challenge to arrest order - violation of Section 19 (3) of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Section 65 of PMLA stipulates that the provisions of the Code of Criminal Procedure, 1973 shall apply, in so far as they are not inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under this Act . PMLA being a special enactment will prevail over the general law and therefore, there are no hesitation in forming an opinion that the respondents have made arrest and thereafter, followed the procedures as contemplated under the provisions of PMLA and there are no infirmity as such. In view of the settled legal position of law, if a person is already in judicial custody in connection with another case, can be formally arrested in respect of investigation of the subsequent case. Therefore, the requirements of Section 19(3) of the provisions of PMLA is complied with and thus, there is no violation. The criminal original petition is devoid of merits and stands dismissed.
-
2024 (9) TMI 1419
Seeking grant of regular bail - fake, forged and fictitious documents were used to obtain the holding numbers - offence under Sections 420, 467, and 471 of the Indian Penal Code - Section 45 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- When a serious offence of such a magnitude mere fact that accused was in jail for long time inconsequential besides such casual approach would undermine trust of public in integrity of Investigating Agency. Further, bail is the rule and jail is an exception but competing forces need to be carefully measured before enlarging the accused on bail. Socio economic offences constituted a class apart and need to be visited with different approach in the matter of bail since socio economic offences have deep-rooted conspiracies affecting moral fibre of society and causing irreparable harm. Moreover, investigating agency was in process of expediting the trial. So far as the bail of Dilip kumar Ghosh is concerned, he was allowed bail as he was the purchaser and protected under Section 54 of the Transfer of Property Act as such the allowing the bail of Dilip kumar Ghosh @ Dilip Ghosh is on different footing. There is no hard and fast rule regarding grant or refusal of bail, each case has to be considered on the facts and circumstances of each case and on its own merit. The discretion of court has to be exercised judiciously and not in an arbitrary manner. This Court is unable to accept the argument of the learned counsel appearing for the petitioner that bail is the rule and the jail is an exception. In view of the above facts reasons and analysis, this Court finds that no case of regular bail is made out as such the prayer for the regular bail of the petitioner is, hereby, rejected. Bail application dismissed.
-
Service Tax
-
2024 (9) TMI 1418
Seeking for issuance of appropriate writ to quash the SCN issued by the 1st respondent - Seeking to restrain the said Authority from adjudicating the same - HELD THAT:- The nature of contentions raised by the petitioner require not only interpretation of the work order which would be factual but also a detailed consideration of the exemption sought for by placing reliance on the N/N. 25/2012-ST. The contention whether supply of man power involved in garbage collection as well as auto tipper with condition imposed in the supply order fall within the activity of solid waste management, is a matter that requires factual appreciation after taking note of the terms of the supply order. Such exercise cannot be made by this Court in exercise of writ jurisdiction. Accordingly, the matter is remanded to the stage post show cause notice. Petitioner is also at liberty to make out reply to the show cause notice within a period of 30 days from the date of receipt of certified copy of this order. All contentions of the petitioner are kept open including as referred to by this Court in the discussion made above as well as grounds made out in the writ petition - Petition disposed off by way of remand.
-
2024 (9) TMI 1417
Classification of activity of appellant - falls under the category of mining service as claimed by the department or transport service as submitted by the appellant? - period 2009-2010 to 2013-2014 - HELD THAT:- On the basis of 26-AS record it does not show the actual detail of the activity carried out by the appellant. Therefore, in the entire case there is no concrete evidence to establish that the appellant have provided the mining service. The invoices produced by the appellant also do not suggest that the appellant have provided any mining service. The appellant is admittedly a transport contractor providing transportation service. The 3 CD report under Income Tax also shows that the appellant is a transport contractor. As per the 26-AS, the deduction of TDS made by the service recipient is under Section 197 C of the Income Tax which is applicable in case of transportation service. Therefore, in one hand, the revenue could not produce any evidence to establish that the appellant have provided the mining service whereas all the books of account and other documents produced by the appellant shows that they being a transport contractor provided the transportation service of mined goods. Therefore, the appellant s activity cannot be classified under mining service. The appellant have also relied upon the board circular F.No. 232/2/2006-CX.4 dated 12.11.2007 wherein at paragraph 5 the board has clarified that transportation of mineral from pithead to a specified location even within the mine or for transportation outside the mine are chargeable to service tax under relevant taxable service i.e. goods transport by road - In the present case since the appellant have transported the mineral in their own vehicle and have not issued any consignment note in this regard, their service is that of transportation of goods by road. Therefore, the demand under mining service is not maintainable. This issue has been considered by the Hon ble Supreme Court in the case of Singh transporters [ 2017 (7) TMI 494 - SUPREME COURT ] wherein it was held that transport of coal from pithead to railway siding within the mining area is classifiable under GTA service and not under mining service. Similar view was taken in the case of Rasleela Enterprises Pvt Ltd [ 2024 (1) TMI 888 - CESTAT NEW DELHI ] wherein the tribunal held that transportation charges received are not covered under mining service, therefore, the demand under mining service in the present case will not sustain as the appellant have provided transportation service. The impugned order is not sustainable and the same is set aside - Appeal allowed.
-
2024 (9) TMI 1416
Liability to pay Service Tax under reverse charge mechanism - Directors remuneration paid to the whole time Director who are employed with the company and also non employed Directors to whom the sitting fees is paid. Salary paid to the whole time director whether liable to service tax or otherwise - HELD THAT:- This issue has been considered time and again by this Tribunal and came to the conclusion that when any remuneration is paid to the Director which is in the form of the salary the same is not liable to service tax. The issue is covered by the decision of RATNAMANI METALS AND TUBES LTD VERSUS C.C.E. S.T. -AHMEDABAD-III [ 2024 (3) TMI 10 - CESTAT AHMEDABAD] wherein relying on various judgments, this Tribunal has held that 'In the light of the records submitted by the Appellants, in terms of Board Resolution and Income tax returns submitted under Form 16, we are of the considered view that the Directors have been appointed as employees of the Appellant s Company.' - In view of the above decision, in case of whole time Director Mrs. T R Amin remuneration paid to her is not liable to service tax. Hence the service tax related to the remuneration paid to Mrs. T R Amin is set aside. Levy of service tax on director fees - payment made to non-employed director as a director sitting fees since the same is not in the nature of salary - HELD THAT:- As per the reconciliation chart, it prima facie appears that the appellant have discharged the Service Tax. However the same need to be verified by the Adjudicating authority. Therefore, the matter related to the service tax demand on the remuneration paid to the non-employed directors, the matter needs to be remanded to check the correctness of reconciliation given in the Annexure-C. The impugned order is modified - Appeal allowed.
-
2024 (9) TMI 1415
Short payment of service tax - manpower recruitment or supply agency service - suppression of value of taxable service - it was noticed by the department that noticee have shown less income in their ST-3 returns as compared to the income shown in their profit and loss account for the period covering 2006-2007 to 2009-2010 - HELD THAT:- The appellant have been discharging their service tax liability on the gross amount received by them for manpower recruitment or supply agency service. However, the appellants have also received reimbursement of the certain expenditures made by him on account of the service recipient on the manpower supplied by him to them on account of supply of shoes and uniform, making provision for the provident fund, providing bonus, insurance etc. - It can be seen from the statement of profit and loss account that other than the income on account of the supply of the manpower under head Labour Charges the appellant has got reimbursement on account of PF, shoes, insurance, uniform etc. on actual basis which have been made by him. The issue involved in the present appeal is no longer res- integra. As this Tribunal in case of STAR FREIGHT PVT. LTD. VERSUS C.S.T. -SERVICE TAX - AHMEDABAD [ 2023 (9) TMI 71 - CESTAT AHMEDABAD] has held that ' there is no suppuration of fact or malafied intention to evade payment of service tax, demand for the extended period shall not be sustainable also on the ground of limitation.' The impugned Order-In-Appeal is without any merit and is set aside - appeal allowed.
-
2024 (9) TMI 1414
Liability of sub-contractor to pay service tax when the main contractor has already discharged the service tax - whether the appellant who is a sub- contractor of the main contractor of L T is liable to pay service tax on the service on which the main contractor had paid the service tax? - HELD THAT:- The appellant being sub-contractor is liable to pay service tax in view of the Larger Bench s decision in Commissioner Vs. Melange Developers (P.) Ltd. [ 2019 (6) TMI 518 - CESTAT NEW DELHI-LB ] but extended period cannot be invoked to demand service tax from the appellant. Hence, the demand of service tax confirmed against the appellant for the normal period and for this purpose, the matter remanded back to the adjudicating authority for computing the demand of service tax for the normal period along with interest. Matter remanded to the adjudicating authority with the direction to do the needful within a period of three months after receiving the certified copy of this order.
-
Central Excise
-
2024 (9) TMI 1413
Interpretation of the Notification Nos.41 of 1998 and 42 of 1998 - entitlement to the benefits of the Compounded Levy Scheme under Section 3A of the Central Excise Act, 1944 - respondent had installed the Hot Air Stenter and was an independent processor falling within the purview of Section 3A of the Central Excise Act, 1944 - HELD THAT:- On perusal of the Notifications, it is clear that the Tax Appeal would be maintainable only if there is a question of constitutional validity of the provision of the Act or the Rules is under challenge or the cases where the Notification / Instruction / Order / Circular is held to be illegal or ultra vires. In the facts of the present case, none of the above conditions are fulfilled and, therefore, in view of the Instructions, the Appeals would not be maintainable in spite of the instructions of the respondent authorities to the learned advocate for the appellant to proceed with the matter on merits. The appeals are dismissed.
-
2024 (9) TMI 1412
Application for rectification of mistake - pending appeals before the Supreme Court - HELD THAT:- The subject-matter of the appeals are not challenged as abundant items of the appellant. Therefore the respondent can independently proceed with the same and the respondent/Department challenge the order passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, in Nos.E/510,E.208/2011, E.365/2011, E/40915 40918/2015 and now the same is pending with the Honourable Supreme Court. Further pending appeals, the appellant has filed application for rectification of the mistake and for which, the Tribunal has passed the above said order. Though the learned counsel for the appellant would submit that the appellant is not enttled to get an order in favour of them in the Rectification Application, but however, on a perusal of the order passed by the Tribunal, it is seen that they have nothing to with the merit or entitlement or any mistake that has been committed. The orders impugned herein are set aside and the matter is remitted back to file of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai and the Appellate Tribunal is directed to consider the said application for rectification filed by the appellant and pass orders in accordance with law after giving an opportunity of hearing to both the parties and the parties are at liberty to raise their objections, grounds or points, as the case may be, before the Appellate Tribunal. Appeal disposed off.
-
2024 (9) TMI 1411
Confirmation of demand of incorrectly availed input cenvat credit, along with interest and penalty - time limitation - HELD THAT:- There is no doubt that the market was not encouraging insofar as the new products claimed to have been launched by the appellant for which, its overseas partner provided financial assistance, which is termed by the Indian entity as reimbursement towards shortfall/compensation, etc. We are afraid the said claims of the Indian entity cannot decide the taxability or otherwise. Understandably, payment as in the case in hand, which may be in the nature of compensation, but is clearly towards keeping the Indian entity alive and kicking and to meet various expenditure including overheads. That therefore, is certainly not per se towards the clearance of a manufactured product and hence, there was no question of CENVAT credit being availed, just because the Indian entity chose to pay service tax. CENVAT credit, as governed by Rule 3 ibid is available to a manufacturer or the provider of taxable service of the input tax paid, which is used in the manufacture or provision of a taxable service, which is not the case here - the department is justified in holding that the credit has been wrongly availed, which therefore was required to be recovered as the same was not in accordance with law. Extended period of limitation - HELD THAT:- The issue is required to be considered from a larger perspective, in the sense that they said claim was part of the statutory returns/periodical returns filed by the appellant which were picked up by the revenue and hence, there was no scope to invoke the larger period of limitation. Other than an assertion that during audit of the returns, the team picked up this issue itself suggests that there is nothing hidden/suppressed; and other than this, the revenue has not placed anything on record to support its above ground to justify its claim about suppression and the consequential invoking of the larger period of limitation. The Revenue has not at all established the fact of suppression for invoking the extended period of limitation for recovery of wrongly availed CENVAT credit. Hence, the impugned order does not sustain - the impugned order is set aside - appeal allowed.
-
2024 (9) TMI 1410
Challenge to direction that the liability on each and every individual should be fixed separately - HELD THAT:- From the operating potion of the order, it can be seen that the liability and recovery of rebate amount Rs. 65,54,595/- was once again confirmed against the Shri Mahesh M Harlalka and Shri Pradip Sharma jointly. It is clearly against the direction of the Tribunal whereby it was directed that the liabilities against each person should be fixed separately. However, the liability of Rs. 65,54,595/- was confirmed jointly on both the aforesaid person. Therefore, the order impugned was passed without following the order of the Tribunal, hence, the same is not sustainable. Accordingly, the impugned order is set aside and matter remanded to the Adjudicating Authority to pass a fresh order fixing liability separately against each person. The appeals are allowed by way of remand to the Adjudicating Authority.
-
2024 (9) TMI 1409
Interest on differential duty on the escalated value - suppression, mis-statement and willful default payment of appropriate leviable duty in the matter by choosing not to opt for provisional assessment in terms of Rule 7 of the Central Excise Rules, 2002 - extended period of limitation - HELD THAT:- It is evident that the Show Cause Notice for interest on differential duty on the escalated value was raised on 09/09/2013 i.e. well beyond normal period of limitation of one year from (31 March 2012) the date of payment of differential duty under the last of the aforesaid invoices. It is also noted that the contention of the department with regard to mis-declaration, suppression etc. is clearly not attracted in the present matter as complete facts of the case and the scheme of assesse s transactions, work methodology and clearance of finished goods was well within the knowledge of the Department. Any fraud or collusion or suppression for that matter cannot be read under the aforesaid scheme of operation to suggest any intention to evade payment of duty, more so since it has been a regular practice of the assessee s working. For a SCN invoking the larger period of time in terms of the provisions of Section 11A(1) ingredients thereto like fraud, collusion, willful misstatement, suppression of fact etc. are required to be evidently established. However, it is found that no such ingredient actually exists in the matter and merely holding non-availment of provisional assessment procedure as a valid ground to invoke longer limitation to understating belies reasonability and logic. For a show cause notice invoking normal period of limitation, it is required to be served on the noticee within one year of the relevant date and the period of one year would be required to be counted from the date of the return for the month concerned with short payment of duty. In the present case the notice is issued on 19.09.2013, which is well beyond normal period of limitation - the extended period of limitation is not invokable in the facts and circumstances of the case. The demand for payment of interest being beyond normal period of limitation is therefore unsustainable and liable to be set aside. Whether the appellant is liable to pay the interest on supplementary invoices by invoking extended period of limitation or not? - HELD THAT:- The said issue has been dealt by this Tribunal in the case of COLLECTOR OF CUSTOMS, MADRAS VERSUS TVS. WHIRLPOOL LTD. [ 1996 (4) TMI 232 - CEGAT, MADRAS] and as maintained by the Hon ble Apex Court in CCE VERSUS TVS WHIRLPOOL LTD. [ 1999 (10) TMI 701 - SC ORDER] wherein it has been held by the Apex Court that it is only a reasonable time that the period of limitation that applies to a claim for the principal amount should also apply to the claim for interest thereon. Thus, the extended period of limitation is not invokable for the facts and circumstances of the case as the appellant has paid the duty on the supplementary invoices for the material period prior to issuance of Show Cause Notice and the same appropriated vide the impugned order. In that circumstances, the extended period of limitation for demand of interest, is not invokable. Consequently, the demand of interest on supplementary invoices is barred by limitation. The impugned order qua demanding interest on the duty paid on supplementary invoices is set aside. Under the circumstances, no penalty is imposable on the appellant and the same is also set aside. Appeal disposed off.
-
2024 (9) TMI 1408
Refund of accumulated Cenvat Credit under Rule 5 of Cenvat Credit Rules, 2004 - supply to Mega Power Project and to SEZ - HELD THAT:- The facts are not in dispute that the appellant is a manufacturer of excisable goods which has been cleared to Mega Power Projects and SEZ units. Therefore, the appellant filed refund claim for accumulated Cenvat Credit under Rule 5 of Cenvat Credit, 2004. The said credit can be refunded in terms of CBEC circular no. 1001/8/2015 CE 8 dated 28.04.2015. Further, the issue has been examined by this Tribunal in the case of CCE, FARIDABAD VERSUS M/S DELTON CABLES LTD. [ 2017 (5) TMI 557 - CESTAT CHANDIGARH] with regard to clearance to Mega Power Project and observed ' As the issue on account of clearances 100% EOU mega projects has already been attained finality, therefore we hold that the Ld Commissioner (A) has rightly allowed the refund claims to the respondents.' As the appellant has cleared goods to Mega Power Projects and the SEZ units, therefore, the appellant is entitled for refund of accumulated Cenvat Credit lying in their cenvat credit account in terms of Rule 5 of Cenvat Credit Rules, 2004 - there are no merit in the impugned order. The adjudication order sanctioning the refund claimed to the appellant is restored - appeal allowed.
-
CST, VAT & Sales Tax
-
2024 (9) TMI 1407
Waiver of tax under CST Act - difficulties in obtaining C-Forms - HELD THAT:- A decision has been taken in regard to these issues by this Division Bench in SRI SRINIVASA RICE MILL VERSUS COMMERCIAL TAX OFFICER AND OTHERS [ 2024 (9) TMI 1316 - ANDHRA PRADESH HIGH COURT] , where it was held that 'It would be inequitable, to grant relief to those dealers who approached in the year 2019 while denying such relief to the dealers who approached later. In any event, the applications are only for the purposes of ascertaining the eligibility of the dealers/petitioners for grant of waiver'. Following the above said Judgment, these Writ Petitions are disposed of with the following directions:- 1. The Endorsements issued by the respective tax authorities are set aside. 2. The respective tax authorities, shall consider the applications of the petitioners afresh and grant waiver to those petitioners who are able to comply with the requirements of the documents set out in the memos. Petition disposed off.
-
Indian Laws
-
2024 (9) TMI 1406
Liability to pay stamp duty and penalty on the agreements to sell executed prior to the sale deed executed in favour, in respect of two properties - determination of real and true meaning of the instrument by ascertaining the intention of the parties from the contents and the language employed in the whole instrument - HELD THAT:- Section 4(1), makes it clear that where several instruments are executed for completing a transaction, the principal instrument alone shall be chargeable with duty prescribed in Schedule I. The proviso makes it clear that the duty chargeable on the instrument so determined shall be the highest duty which could be chargeable in respect of any of the said instruments forming part of the same transaction. Each of the other instruments is chargeable with a fixed duty. That apart, sub-section (2) also gives an opportunity to the parties to determine for themselves, which of the instruments shall be deemed to be the principal instrument. In the instant case, in the documents, though there was a clause for conveyance between the vendors and purchasers in relation to the respective properties, the value of the properties were above Rs.100/- and there was also a clause by which possession was admittedly handed over on the date of the agreement, implying acquisition of possessory rights protected under Section 53A of the Transfer of Property Act, which requires payment of proper stamp duty and registration as mandated under Section 17 of the Registration Act - Even considering the contention of the appellant, that the sale agreements ultimately concluded in the sale deed on which stamp duty was paid, would not by ipso facto absolve the primary liability of paying the appropriate stamp duty at the time of execution of the sale agreement as it was the principal document. Therefore, Section 4 of the Act cannot come to the aid of the appellants. Therefore, all these six documents ought to have been necessarily stamped and registered. The trial Court rightly observed that the subsequent sale deed cannot be construed as a principal transaction and the agreements to sell would be treated as the principal conveyance as per Explanation I of Article 25 of Schedule-I of the Act and impounded all these documents and directed to send the same to the Collector for adjudication of stamp duty and penalty. After, a detailed analysis, the High Court held that no case for interference was made out by the appellants, which, we affirm, to be correct. There are no reason to interfere with the orders passed by the Courts below. Accordingly, this appeal fails and is dismissed.
-
2024 (9) TMI 1405
Denial of promotional benefits - Adoption of sealed cover procedure - Whether by the mere grant of prosecution sanction, it could be said that the prosecution for a criminal charge is pending against the respondent Government Servant and whether grant of sanction for prosecution could be a valid ground for putting the DPC recommendations in a sealed cover? HELD THAT:- The disciplinary/criminal proceedings can be said to be initiated against the employee only when a charge memo is issued to the employee in a disciplinary proceeding or a charge-sheet for a criminal prosecution is filed in the competent Court. The sealed cover procedure is to be resorted to only after issuance of the charge-memo/charge-sheet is issued. The pendency of investigation and grant of prosecution sanction will not be sufficient to enable the authorities to adopt the sealed cover procedure. It is not in dispute that the sanction to prosecute the respondent was granted on 2nd June, 2006 and the charge sheet was filed by CBI, after completion of investigation on 25th October, 2008, whereas the DPC to consider the promotion of Additional Commissioners of Income Tax was convened on 22nd February, 2007, wherein the sealed cover procedure was adopted qua the respondent. It is thus clear that the charge sheet against the respondent was filed well after the meeting of the DPC was convened. Hence, it could not be said that the prosecution for a criminal charge was pending against the respondent when the DPC was convened. Therefore, the move on the part of DPC to resort to the sealed cover procedure was unjustified and unsustainable on facts and in law. There are no hesitation in holding that the impugned judgment of the High Court dated 26th April, 2013 is based on apropos consideration of facts and law and hence the same does not warrant interference. The Sealed Cover wherein the assessment of the respondent was considered by the DPC was presented to the Court by learned counsel for the appellant and was opened. The letter shows that the DPC assessed the respondent to be FIT for promotion. Consequential steps in light of the above recommendations shall follow - appeal dismissed.
-
2024 (9) TMI 1404
Dishonour of Cheque - legally enforceable debt or not - quashing of summons issued based on factual defences - whether the security cheques given by the petitioner were towards any future consideration or legally enforceable debt? - HELD THAT:- It is relevant to note that this Court can quash the summoning orders issued in NI Act cases in the exercise of its inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) if such unimpeachable material is brought forth by the accused persons which indicates that they were not concerned with the issuance of the cheques or that no offence is made out from the admitted facts. The Hon ble Apex Court in the case of Rathish Babu Unnikrishnan v. State (NCT of Delhi) [ 2022 (4) TMI 1434 - SUPREME COURT] had discussed the scope of interference by the High Court against the issuance of process under the NI Act held that 'to non-suit the complainant, at the stage of the summoning order, when the factual controversy is yet to be canvassed and considered by the trial court will not in our opinion be judicious. Based upon a prima facie impression, an element of criminality cannot entirely be ruled out here subject to the determination by the trial Court. Therefore, when the proceedings are at a nascent stage, scuttling of the criminal process is not merited.' In the case of Sunil Todi and Others v. State of Gujarat and Another [ 2021 (12) TMI 175 - SUPREME COURT] , the cheques were issued by the accused as a security deposit under a power supply agreement, and on non-payment of the amount, the cheques were dishonoured on its presentation. It was contended on behalf of the accused that the cheques were intended at all material times to be security towards debt and were not intended to be deposited and would not attract the provisions of Section 138 of the NI Act on its dishonour. Section 138 of the NI Act specifically mentions that the cheque must have been issued for discharge of not only any debt but can also be for other liability . It is, therefore, not necessary that when the cheques are issued, the drawer had any debt to discharge on the date of issuance - the allegations made in the complaint, at the stage when the complaint is sought to be quashed at the initial stage, are to be taken as correct unless evidence of unimpeachable character has been produced. When there is a legal presumption and where facts are contested, it would not be judicious for the Court to separate the wheat from the chaff under the garb of inherent powers. It has been held time and again that the power of quashing criminal proceedings while exercising power under Section 482 of the CrPC should be exercised sparingly and with circumspection. This Court finds that the petitioner, at best, has raised question of fact mixed with question of law which cannot be examined in the limited jurisdiction under Section 482 of the CrPC, for it is desirable that the same be left to be adjudicated upon based on the evidence led by both sides at the trial - Petition dismissed.
-
2024 (9) TMI 1403
Auction purchaser of secured asset - Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - HELD THAT:- The Judgment of the Apex Court in GOVIND KUMAR SHARMA ANR. VERSUS BANK OF BARODA ORS. [ 2024 (5) TMI 364 - SUPREME COURT] was rendered in the circumstances where the entire money has been refunded and there has been no issue of delivery of possession of property. In the instant case respondent-bank as already noted above has undertaken the endeavour to deliver possession of the subject property to the petitioner. In that view of the matter this Court do see any justification in petitioner claiming compound interest on the amount deposited. However, this Court is of the considered view that petitioner is entitled for simple interest at the rate of 12% p.a. for the period claimed in the writ petition. Petition disposed of.
|
9911796707
