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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter September 30, 2023 Case Laws in this Newsletter: GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles A succinct summary is provided to recapitulate the amendments enacted by the Finance Act, 2023, which are set to come into force from the 1st of October, 2023. MSME Registration: Everything You Need to Know GST DISCLOSURES FOR TAX AUDITS UNDER INCOME TAX APPOINTMENT OF ARBITRATOR UNDER SECTION 11 OF THE ARBITRATION AND CONCILIATION ACT, 1996 ITR requirement for loan purpose News Auction for Sale (re-issue) of (i) ‘7.06% GS 2028’, (ii) ‘7.18% GS 2033’, and (iii) ‘7.30% GS 2053’ Monthly Review of Accounts of Union Government of India upto August, 2023 for the Financial Year 2023-24 Sale of Electoral Bonds at Authorised Branches of State Bank of India (SBI) Public Debt Management report for the quarter of April-June 2023 India's Consistent Innovation Excellence: Retaining the 40th Position in Global Innovation Index 2023 Meeting of Trade & Economy Ministers of Shanghai Cooperation Organization member States conducted in Hybrid mode on 27 September 2023 Notifications Customs 71/2023 - dated 29-9-2023 - Cus (NT) Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver GST - States 49/GST-2 - dated 27-9-2023 - Haryana SGST Notification under sub-section (2) of section 23 to waive the requirement of mandatory registration under section 24(ix) of HGST Act, 2017 for person supplying goods through ECOs, subject to certain conditions under the HGST Act, 2017 48/GST-2 - dated 27-9-2023 - Haryana SGST Notification to notify "Account Aggregator" as the systems with which information may be shared by the common portal under section 158A of the HGST Act, 2017 47/GST-2 - dated 27-9-2023 - Haryana SGST Notification to notify the provisions of sections 3 to 6, 8 to 25 and clause (b) of section 26 of the HGST (Amendment) Act, 2023 under the HGST Act, 2017 23/2023 – State Tax - dated 1-9-2023 - Jharkhand SGST Seeks to amend Notification No. 03/2023– State Tax, dated the 05th June, 2023 22/2023-State Tax - dated 1-9-2023 - Jharkhand SGST Seeks to amend Notification S.O. No. 3 State Tax, dated the 03rd January, 2018 F.12(11)FD/Tax/2023-48 - dated 29-9-2023 - Rajasthan SGST Seeks to amend Notification No. F.12(11)FD/Tax/2023-31 dated 16th August, 2023 SEBI SEBI/LAD-NRO/GN/2023/152 - dated 27-9-2023 - SEBI Renewal of recognition to the Indian Clearing Corporation Limited Highlights / Catch Notes GST Blocking of its Input Tax Credit - Vague SCN - It is not apposite to enter this controversy as the same is required to be addressed by the proper officer in the first instance. Since the impugned show cause notice does not contain any allegations as stated in the counter affidavit filed by the respondents, the proceedings initiated pursuant to the impugned show cause notice cannot cover the said allegations. - SCN set aside - HC Visit to Get Source Income Tax Income taxable u/s 28(iv) - additions as 'benefit' by waiver of loans - As per the decision of Apex Court, the purpose of loan was neither dealt with nor would be a relevant determinative factor. The only test is that the 'benefit' or 'perquisite' should be other than ‘in the shape of money’. - The amendment vide Finance Act, 2023 also substantiate the findings of the Apex Court - Additions deleted - HC Visit to Get Source Reopening of assessment u/s 147 - Even when the order disposing of the objections is read, certain observations made on gain made on sale of property and change in amount of interest were not reflected in the reasons for reopening of assessment which also makes the exercise vulnerable. - Notices for reopening quashed - HC Visit to Get Source Correct head of income - profit arising from sale of shares - LTCG/STCG - The intention of the assessee can also be gathered from the Balance sheet and Financial Statement of Accounts. Shares held by the assessee as investment are chargeable to tax under the head “Capital Gains” and shares held by the assessee as stock in trade are chargeable to tax as “Business Income”. - Based upon the CBDT Circular, when the ld. CIT(A) accepted the long term capital gain, then we fail to understand why the ld. CIT(A) hesitated in not accepting the short term capital gain on the same set of facts. - AT Visit to Get Source Taxing the interest on income tax refund received u/s 244A - Non-Resident (Foreign Company) - since the assessee is benefitted with the protocol to the India-Netherland treaty dated 21.01.1989 and the favorable provisions of India-Italy tax treaty are applicable on the assessee company because Netherland and Italy both are members of the Organization for Economic Cooperation and Development (OECD) - Amount not taxable - AT Visit to Get Source Penalty u/s. 271(1)(c) is one such consequence, saved of course u/s. 273B on proving a reasonable cause, which is a reiteration of the principle that though a strict civil liability, penalty is yet not automatic and gets excluded where the assessee-defaulter was constrained to act in the manner he does, i.e., in the facts and circumstances of his case, the onus to prove which, raising the said plea, is though only on him. - Levy of penalty confirmed - AT Visit to Get Source Revision u/s 263 - taxability of income surrendered in the course of survey prescribed u/s 115BBE - The press release does not in any manner reads down the substituted provisions of S. 115BBE which are far wider in its scope and ambit. The salutary principles of charging Section 4 discussed in para 13 above would apply mutatis mutandis. - Twin conditions of Section 263 are not simultaneously satisfied - Revision order set aside - AT Visit to Get Source Revision u/s 263 - “no inquiry” v/s “inadequate inquiry” - there is a distinction between merely calling for information on a particular issue and considering such information with due application of mind if and when such information is actually provided by the assessee. Thus in the present facts, we are of the view that on the issue of allowing of provision for doubtful debts, the claim of the assessee was allowed which according to us is a case of “no inquiry” and not a case of “inadequate inquiry” and consequently a case of non application of mind to the material on record. - Revision order sustained - AT Visit to Get Source Reopening of assessment - donation/capitation fee paid for admission of daughter in cash at the time of admission - Reliance on the statement of Chairman [Medical College] - the assessee has been deprived of with the opportunity of cross-examining Chairman[ Medical College] which was ultimately resulted in making the addition of similar nature - Additions deleted - AT Visit to Get Source Customs Seeking release of detained goods - legality of search conducted at the factory premises, office premises as well as the residential premises of one of the directors of the Petitioner Company - import of the commodity Ethephon - prohibited goods or not - prima facie it stands made out that Ethephon is a regulated insecticide - High Court refused to set aside the seizure memorandum - HC Visit to Get Source Seeking provisional release of goods - Respondents (Revenue) have fairly stated that the goods imported are not prohibited goods and the only issue in dispute is with respect to the valuation. - the Respondents have not doubted the credentials of the Petitioner who is a regular importer of such goods. - The Petitioner has approached this Court only after receiving no response from the Respondents inspite of several request for provisional release of the goods. - Direction issued for provisional release. - HC Visit to Get Source Seeking release of seized goods - goods purchased by the petitioner from an importer - As per definition under Section 2(25) of the Act, the term “imported goods” clearly changes the nature, once the same are cleared for home consumption. - The respondents were not within their rights to seize/ confiscate the said goods. - HC Visit to Get Source Levy of anti-dumping duty - Amoxicillin Sodium with Clavulanate Potassium - Scope of clarifictaion issued by DGTR - The impugned clarification was not available to the adjudicating authority below but in the light of said clarification duly conceded by the department, it is held that anti-dumping duty as has been levied on Amoxicillin Sodium with Clavulanate Potassium, the product imported by the appellant is not sustainable - AT Visit to Get Source Classification of goods intended to be imported - Data Projector - the Data Projector (Model - ZH 350, ZW350e, ZX 350e) are classifiable under sub-heading 8528 62 00 of the First Schedule to the Customs Tariff Act, 1975 - Benefit of exemption available - AAR Visit to Get Source Indian Laws Execution of the Will in favour of the Plaintiffs - Will being a forged document or not - the Will was duly executed by the testator in the presence of witnesses out of his free Will in a sound disposing state of mind and the same stands proven through the testimony of one of the attesting witnesses, who was examined as PW2 by the Civil Court. - SC Visit to Get Source IBC CIRP - Transfer of property under auction - status of "charge" created on the property - Right and liability of the purchaser of property - Even otherwise as per Section 100 of the Transfer of Property Act, a charge cannot be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of such charge. The State moved in to get a charge registered on 15.12.2022 much later. - HC Visit to Get Source Initiation of CIRP - NCLT rejected the application u/s 7 - The Corporate Debtor had accepted before the AA that it is not in a position to repay `debt’ because of financial distress. The AA ought to have admitted the Application of the Appellant u/s 7 of the IBC, 2016 as there is no dispute about the `debt’ or liability of the Corporate Debtor - Matter restored back - AT Visit to Get Source CIRP - Maintainability of application u/s 7 r.w.s. 10A - default in repayment of term loan - there was default committed before implementation of the Plan, as NPA was declared on 29.12.2020. Hence, in the present case, asset classification of the borrower has to be treated to be downgraded with effect from 29.12.2020. Clause 48, is thus only to be read with regard to downgrading to NPA for the relevant date and this Clause 48 is not relevant to find out event of default, which occurred under the One Time Restructuring Agreement and which is foundation of Section 7 Application. - AT Visit to Get Source Service Tax Valuation under SVLDR Scheme - SVLDR Scheme is a scheme aimed at liquidating legacy cases locked up in litigation at various forums. However, it does mean that the scheme should be interpreted in a way to make a disqualified person qualified to avail the benefits of the scheme. - In the present case, there has not been a quantification before the cut-off date - The Petitioner was thus disqualified - HC Visit to Get Source Classification of services - cargo handling services or GTA? - The service rendered by the Appellant to M/s SSTAPL as a sub-contractor as well as M/s JSL directly, was transportation of goods service and not cargo handling service - the demand confirmed in the impugned order under 'cargo handling service' set aside on merit as well as on limitation - AT Visit to Get Source Exemption from Service Tax - Construction of Complex service for the service related to construction of houses under Jawaharlal Nehru National Urban Renewal Mission (JnNURM for short) and for Safai Kamdar to Ahmedabad Municipal Corporation - Not liable to service tax - AT Visit to Get Source Case Laws: GST 2023 (9) TMI 1331 Validity of SCN - summary has not been issued in the requisite form - Section 74 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Although the summary in the electronic form is required to be furnished along with the show cause notice, furnishing of the said summary at this stage would be substantial compliance with the said provisions. The present petition is disposed of with the direction to the proper officer to issue a summary of the notice and demands electronically, in FORM GST DRC-01 FORM GST DRC-02 as expeditiously as possible and preferably within a period of one week from date. 2023 (9) TMI 1330 Blocking of its Input Tax Credit - Vague SCN - Principles of natural justice - applicability of Circular No. F.3(429)/GST/Policy/2022/1067-1072 dated 08.03.2022 - HELD THAT:- The impugned show-cause notice issued to the petitioner cannot be sustained. It does not effectively provide any reasons for raising a demand. The opening sentence of the impugned show-cause notice appears to be a mechanical reproduction of the statutory provision. In so far as the Circular is concerned, the same cannot be read as permitting the proper officer to mechanically create a demand. The proper officer can issue a show cause notice only if he has reasons for raising any demand against the tax payer. The said reason must specifically be stated in the show cause notice. It does, prima facie, appear that the respondent had followed the said Circular in a mechanical manner. It is not apposite to enter this controversy as the same is required to be addressed by the proper officer in the first instance. Since the impugned show cause notice does not contain any allegations as stated in the counter affidavit filed by the respondents, the proceedings initiated pursuant to the impugned show cause notice cannot cover the said allegations. The impugned show cause notice is liable to be set aside as the same fails to disclose any reason for proposing the recovery and is incapable of eliciting any meaningful response - Petition disposed off. 2023 (9) TMI 1329 Maintainability of petition - non-constitution of Second Appellate Tribunal - petitioner has already deposited 10% of the demanded tax amount before the first appellate authority - HELD THAT:- Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of fifteen days from today, the rest of the demand shall remain stayed during the pendency of the writ petition. Application disposed off. 2023 (9) TMI 1328 Validity of SCN - the impugned summary of order was neither uploaded nor served - HELD THAT:- The prayer in the captioned main writ petition cannot but be acceded to. Prayer in the captioned main writ petition acceded to. Captioned Writ Petition is disposed of as allowed albeit making it clear that if the respondents are to initiate proceedings afresh, it is open to the respondents to do so and all the rights and contentions of both sides are preserved if proceedings are initiated afresh by the respondents. Consequently, connected Writ Miscellaneous Petitions are also disposed of as closed. Income Tax 2023 (9) TMI 1327 Assessment u/s 153C - Period of limitation in issuing notice - Search conducted at third party - As per HC the impugned show-cause notice was issued to the petitioner on 04.02.2022, one year has already passed whereafter the present petition came to be filed and in absence of any plausable explanation as to delay and also in face of statutory remedy of objection available to the petitioner, which objection has also been filed, we do not consider it a fit case to offer any interference HELD THAT:- Having regard to the observations made by the High Court reserving liberty to the petitioner(s) to take all objections before the concerned statutory authority. We are not inclined to interfere with the judgment and order impugned in these petitions. Hence, these special leave petitions are dismissed. 2023 (9) TMI 1326 Validity of Revision u/s 263 by CIT - payments made to persons specified under Section 40A(2)(b) allowed in assessment order - ITAT gave a finding of fact that no such issue was ever raised by CIT in the notice served upon the assessee and the assessee was not even confronted by the CIT before passing the Order - as decided by HC [ 2022 (4) TMI 1081 - BOMBAY HIGH COURT] there is a finding by the Tribunal, as noted earlier, that no issue was raised by the CIT in respect of particulars of payment made to persons specified under Section 40A(2)(b) of the Act and even the show cause notice is silent about that. HELD THAT:- There is a huge delay of 411 days in filing the Special Leave Petition. Nevertheless, we have heard learned counsel for the petitioner on merits of the case. The delay has not been explained to the satisfaction of this Court. Neither, do we find any merit in the petition. Hence, the special leave petition is dismissed both on the ground of delay as well as on merits. 2023 (9) TMI 1325 Income taxable in India - taxing of the sale of software and subscribers as royalty income - HELD THAT:- Learned panel advocate appearing for the petitioner submitted that the issues which arise in this special leave petition have been considered by this Court in the case of Engineering Analysis Centre of Excellence Private Limited [ 2021 (3) TMI 138 - SUPREME COURT] Hence, appropriate orders may be made in this special leave petition. In view of the aforesaid, the special leave petition is dismissed. 2023 (9) TMI 1324 Validity of Revision order u/s 263 - not mentioning any DIN - whether the DIN was mentioned in the order passed under Section 263? - Tribunal upon examining the facts held that the order does not incorporate the DIN number and it is in violation of the Circular No. 19 of 2019, dated 14th August, 2019 - HELD THAT:- Tribunal on examination of the facts held that the requirement as mentioned in the Circular No. 19 of 2019 quoting of the Document Identification Number, has not been followed and therefore allowed the assessee s appeal. The revenue filed miscellaneous application seeking for rectification of the said order. Once again the Tribunal has undertaken a factual exercise and in fact, raised a specific query to the revenue to point out how a DIN intimation letter along with the manual order as explained by the Commissioner of Income Tax (Exemption) in his reply fulfils the categorical requirement mandated by the CBDT Circular, more particularly, in paragraph 2 of the said Circular, that the body of the communication, the order under Section 263 of the Act, must contain the fact and that the communication issued referred to the DIN without justifying as to how the non compliance of the CBDT Circular dated 14th August, 2019, which was noted by the Tribunal when it passed the main order. The Tribunal notes that this specific query was unable to be answered by the revenue and therefore the learned Tribunal came to the conclusion that the order passed under Section 263 does not satisfy the requirement mandated by the CBDT Circular. Revenue appeal dismissed. 2023 (9) TMI 1323 Issuance and continuation of the Look-Out Circular issued against him at the behest of the Income Tax Department - Black Money - Petitioner remained untraceable and non-cooperative during the said search and seizure proceedings - notice was issued to the Petitioner u/s 10(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 requiring him to furnish information in relation to the undisclosed foreign assets that were found during the course of the investigations - whether Clause L of the OM of 2021 would be legally valid, especially in respect of the phrase detrimental to the economic interests of India and in respect of other clauses which permit indefinite continuation of LOCs, non-communication of reasons either prior or post issuance of the LOC and extension of LOC to such individuals who in the opinion of the authorities ought not to be permitted to travel on the ground of it being detrimental to the economic interests of India? - HELD THAT:- Both the parents of the Petitioner have filed their affidavits. The said affidavits of assets, show that the parents of the Petitioner live in Delhi. It is clear from the same that the father of the Petitioner has various properties in India and is engaged in the clothing business by the name of M/s Chitkara Cloth House. The parents of the Petitioner along with the Petitioner s sister, collectively, own immovable properties worth close to Rs. 40 crores as can be made out from the affidavits. Petitioner s wife is stated to be a practicing lawyer in Delhi. The Petitioner s brother is also an entrepreneur based in Delhi. Petitioner s parents have agreed to offer the properties as a security for the quashing of the LOC against the Petitioner, by filing affidavits before the Court. The situation that emerges from the above discussion is that the Petitioner has deliberately concealed the existence of a company in Hong Kong, which was under his control. He did not divulge the details of the same despite being provided with repeated opportunities to do so. As substantial transactions have been carried out in the bank account of the said Hong Kong based entity, which was also not revealed to the authorities. Additionally, the Petitioner attempted to wriggle out of giving any explanation in respect of these transactions. Court also takes into consideration the fact that the Petitioner is only about 34 years of age and that the non-issuing of permission to travel, could be having an adverse impact on his career and his personal life. Petitioner has substantial familial ties in India. His parents are senior citizens and have come to his rescue by agreeing to stand as sureties and are offering their properties as security. This court is of the opinion that this is not a case that would be detrimental to the economic interest of the country as there is no allegation that the Petitioner has siphoned off any public funds. In addition, the overwhelming fact that no criminal proceedings have been initiated against the Petitioner, despite the demand having already been raised against him is an important consideration. While the demand against the Petitioner has already been raised and the assessment order has already been passed under the Black Money Act, 2015, the appeal before the Commissioner of Income Tax (Appeals) is still pending. Fresh penalty proceedings are still under-way, and the Court is informed that prosecution is also sought to be initiated, after the final oral submissions in this matter stand concluded. This Court is of the opinion that stringent conditions deserve to be imposed upon the Petitioner. The LOC debarring him from traveling can be converted into an intimation about the arrival/departure of the Petitioner in terms of Clause 6(I) of the Office Memorandum of 2021. LOC shall stand modified to an intimation in terms of Clause 6(I) of the OM of 2021, which reads as under: (I) In cases where there is no cognizable offence under IPC and other penal laws; the LOC subject cannot be detained/arrested or prevented from leaving the country. The Originating Agency can only request that they be informed about the arrival/departure of the subject in such cases. Petitioner shall appear before the Assistant Director of Income Tax (INV), UNIT-4(4), ROOM NO.121; C, BLOCK CIVIC CENTRE, NEW DELHI for compliance of the above conditions on 5th October, 2023. The original files along with copies of documents, etc. which were handed over by the Income Tax Department have been returned. 2023 (9) TMI 1322 Income taxable u/s 28(iv) - additions as 'benefit' by waiver of loans - determination of the nature of loan - Tribunal has treated the amount flowing back to the assessee consequent to waiver of loan relating to day-to-day operation as income of the assessee under Section 28(iv) of the I.T. Act. whether the wavier of loan leading to a 'benefit' would fall within the ambit of income in terms of Section 28(iv) of the I.T. Act and hence, chargeable to Income Tax? - HELD THAT:- The clinching factor as per the in Mahindra and Mahindra [ 2018 (5) TMI 358 - SUPREME COURT] to bring the benefit/perquisite within the term 'income' under Section 28(iv) of the I.T. Act was that the 'benefit/perquisite' should be other than in the shape of money , while holding that the benefit upon loan waiver was in the form of a cash receipt and did not satisfy the test to make it taxable within the terms of section 28(iv). Clearly, the purpose of loan was neither dealt with nor would be a relevant determinative factor. The only test is that the 'benefit' or 'perquisite' should be other than in the shape of money . Thus, in the present case, the nature of loan would be of no relevance and accordingly, the exercise of ascertaining the purpose of loan as contended by the Revenue does not arise. The judgment of Apex Court in Mahindra and Mahindra (supra) holds the field. The benefit of waiver of loan in the present case is also not other than in the shape of money . Accordingly, the 'benefit' would fall outside the ambit of Section 28(iv) of I.T. Act. The recent amendment to Section 28 of I.T. Act vide Finance Bill 2023 Finance Bill 2023 - 11. In section 28 of the Income-tax Act, for clause (iv), the following clause shall be substituted with effect from the 1st day of April, 2024, namely: (iv) the value of any benefit or perquisite arising from business or the exercise of a profession, whether (a) convertible into money or not; or (b) in cash or in kind or partly in cash and partly in kind; wherein the legislature has included 'benefit' even in form of 'cash' arising from business or profession as being chargeable to income tax. Such amendment substantiates the interpretation of the Apex Court in Mahindra and Mahindra (supra), wherein it was concluded that the 'benefit' not being other than in the shape of money i.e., 'benefit' in form of 'cash' would fall outside the ambit of Section 28(iv) of the I.T. Act by proposing the present amendment. Accordingly, the order passed by the Income Tax Appellate Tribunal is set aside. - Additions deleted - Decided in favor of assessee. 2023 (9) TMI 1321 Reopening of assessment u/s 147 - petitioners are partners in a partnership firm engaged in the business of developing housing projects - whether petitioners have offered interest on capital and remuneration , in case of the partnership firm My Home Developers , where the assessment of the firm was sought to be reopened on similar grounds? - HELD THAT:- On the issue of reopening on the count in these three petitions on the ground that the petitioners have offered interest on capital and remuneration , in case of the partnership firm My Home Developers , where the assessment of the firm was sought to be reopened on similar grounds, the Division Bench of this Court in the petitions at the behest of the firm, on appreciation of the clauses in the partnership deed held as, the clauses contained partnership deeds are only enabling provision not mandatory in nature so as to lead to an inference that, the assessee had to pay interest on capital and remuneration to its partners. It provided for interest on partner's capital and remuneration, the same is subject to their mutual agreement. Even after 01.04.2009, interest on capital as well as the remuneration were not to be paid to the partners. We do not find any material on record to indicate that, the writ applicant has actually received any interest on capital and remuneration from the partnership firm. Record further indicates that, for the assessment year 2010-11, deduction under Section 80 IB(10) was claimed without paying any interest on capital and remuneration to partners and such claim was not disturbed by the assessing officer. In this view of the matter, the conclusion arrived at by the assessing officer that, the assessee has claimed deduction without providing interest on capital and remuneration to partners as per the clause 6 and 7 of the deed, has escaped assessment on account of failure on the part of the assessee in filing of the return of income disclosing fully and truly all material facts are contrary to law and without jurisdiction. Petitioner sold immoveable property but no capital gain was offered in the return of income - As property sold was owned by Lavjibhai Ambaliya HUF . The Balance-sheet of HUF of the preceding year submitted showed the property on the asset side. No description or situation of the property purchased was given. Sale consideration of Rs. 32,28.800/- was received by cheque. LTCG of Rs. 23,99,559/- duly reflected as is evident from the relevant Statement of Long Term Capital Gain. The reassessment was also therefore based on suspicion. As pointed out factors that indicate that income has escaped assessment consists of facts which if established will have a cause and effect relationship, whereas factors which indicate a suspicion about income escaping assessment which would warrant a further inquiry. This is not what is contemplated under section 148 of the Act. The jurisdiction cannot be used to carry out a roving inquiry. Even when the order disposing of the objections is read, certain observations made on gain made on sale of property and change in amount of interest were not reflected in the reasons for reopening of assessment which also makes the exercise vulnerable. Petition allowed. 2023 (9) TMI 1320 Challenge to Form 3 issued under the Direct Tax Vivad Se Vishwas Act, 2020 - petitioner says, that the impugned forms i.e., Form 3 in the above-captioned matters bear the same date, i.e., 15.04.2021 - revenue, says that the stand taken by the respondent/revenue is that the said forms issued to the petitioner would have to be reworked, to align them with the assertions made in the counter-affidavit - HELD THAT:- As per following assertions made in the counter-affidavit filed To the extent of not granting set-off of Brought Forward Unabsorbed Business Losses and Brought Forward unabsorbed Depreciation of prior AYs computed on net income basis against the income of impugned AYs assessable on net income basis, the error committed by the Respondent is accepted and corresponding tax calculations will be modified. However, the remaining assertions of Petitioner are denied as factually incorrect and contrary to the express provisions of DTVSV Act and DTVSV Rules . Liberty is however, given to the respondents/revenue to rework the calculations on the basis of stand taken in the counter-affidavit and thereafter, issue fresh forms, as deemed fit. After fresh forms are issued, if still aggrieved, the petitioner will have liberty to assail the same in accordance with the law. Writ petitions and pending applications are disposed of in the aforesaid terms. We may also note that during the pendency of writ petitions, we had issued an interim direction requiring the petitioner to deposit a cumulative amount of Rs. 7,33,15,591/- with the designated authority. 2023 (9) TMI 1319 Reopening of assessment u/s 147 - principal allegation which is levelled against the petitioner is that he is a beneficiary of an accommodation entry provided by one Mr Bajrang Lal Periwal, via a company going by the name BKR Capital Pvt. Ltd.- HELD THAT:- The sum and substance of the reply filed by the petitioner was that he had not taken any loan from BKR but, instead, deposited Rs. 40,00,000/- with BKR, and funds for this purpose were drawn from his savings bank account, maintained with the Defence Colony, New Delhi Branch of Standard Chartered Bank. The details of the savings bank account were also provided in the reply dated 03.03.2023. The first part of this paragraph does not align with the second part, however what does come through if both parts are read together is the petitioner had, in fact, deposited Rs. 40,00,000/- with BKR and not received the said amount by way of loan as alleged. AO though, was not persuaded, and went on to conclude in the order dated 26.03.2023, passed u/s 148A(d) of the Act that income amounting to Rs. 40,00,000/- had escaped assessment without providing the necessary basis in support of the application. Best way forward would be to dispose of the writ petition with the following directions: (i) Since the principal allegation levelled against the petitioner is that he had availed a fictitious loan of Rs. 40,00,000/- from BKR, the AO will furnish the relevant material which will establish the said allegation. (ii) In case any fresh material is furnished, the petitioner will be given an opportunity to respond to the same. (iii) AO will, thereafter, accord personal hearing to the petitioner and/or his authorized representative and only thereafter proceed to frame the assessment order. 2023 (9) TMI 1318 Condonation of delay - present appeal filed by the Department is time barred by 479 days - HELD THAT:- As undisputed that the order appealed against was received by the Department on 11.12.2018 and, therefore, the last date for filing the Departmental Appeal before the ITAT was 09.02.2019. Circular No. 23 of the CBDT is dated 06.09.2019 and the OM is dated 16.09.2019. Therefore, the Circular based on which the Department has filed this appeal was issued almost seven months after the expiry of the limitation period for filing of the appeal. As further seen that even after the issuance of the Circular and OM, the present Departmental appeal was filed on 02.06.2020 i.e. almost more than nine months after the issuance of the said Circular. Even if the Department is given the benefit of relaxation in the limitation in view of the order in suo moto Writ Petition (Civil) [ 2020 (5) TMI 418 - SC ORDER] the period from date of issue of Circular till March, 2020 is almost six months which could not be suitably explained. Therefore, unable to consider the prayer of the Department to condone the delay and dismiss the appeal as being unadmitted, being barred by limitation. Appeal of the Department stands dismissed. 2023 (9) TMI 1317 Disallowing commission expenses - HELD THAT:- AO has not made any attention to verify the authenticity of the transaction by calling the commission agent, Shri Majhi by issuing summon u/s 131 - Similarly, we find that out of total payment made to the alleged commission agent. While making payment, the assessee has deducted a sum from him as TDS. In such circumstances, the view taken by the ld. AO is not correct and in the present case while allowing the claim of the assessee ld. CIT(A) has elaborately discussed all the facts by allowing the claim of assessee. In such a situation, we do not find any infirmity in the order passed by the ld. CIT(A) accordingly we are inclined to dismiss the ground taken by the revenue. Calculating the addition @ 15% of the total addition made by the AO and the view taken by the CIT(A) - HELD THAT:- We find that while passing the impugned order, ld. CIT(A) has taken a view that only element of profit embedded from such purchase to be considered for an addition by applying various important decisions rendered on the subject matter of the issue involved whereby restricting the profit element of 15% of aggregate purchase from the alleged sum - From the above facts, we do not find any infirmity in the impugned order passed by CIT(A). Accordingly, the ground taken by the revenue is hereby dismissed. Determine the element of profit in the transaction by applying 15% on the impugned purchase - HELD THAT:- As element of profitability in transaction which had worked out at 15% following the various important decisions rendered - we do not find any infirmity in the findings given by the CIT(A) accordingly ground taken by revenue is hereby also dismissed. 2023 (9) TMI 1316 Levy of penalty u/s. 271(1)(c) - additions made on account of Amortized value of Leasehold Land and Depreciation claimed on Right to use Leasehold Land - HELD THAT:- Jurisdictional High Court in case of Sun Pharmaceuticals Ind. Ltd. [ 2009 (3) TMI 587 - GUJARAT HIGH COURT] have held that such expenditure on right to use leasehold land are allowable as revenue expenditure, which means such issue is also highly debatable and therefore no penalty u/s 271(1)(c) can be levied on it. We have no hesitation in confirming the order passed by the Ld. CIT(A). Thus the grounds raised by the Revenue is devoid of merits and the same is hereby dismissed. 2023 (9) TMI 1315 Revision u/s 263 - Deduction u/s 80IB(11A) - disallowance of deduction received from Duty Draw Back Scheme and from MEIS - HELD THAT:- Admittedly, the assessee has claimed a deduction u/s. 80IB(11A) after considering the adjustments of depreciation and other expenditure. As also found that the assessee has received an income from Duty Draw Back and from MEIS. This Bench by relying on the decision of the Hon ble Supreme Court in the case of CIT vs. Meghalaya Steels Limited [ 2016 (3) TMI 375 - SUPREME COURT] has allowed deduction of export incentives namely Duty Drawback scheme, Duty Entitlement Pass Book Scheme (DEPB) in the case of Nekkanti Sea Foods Limited [ 2023 (3) TMI 822 - ITAT VISAKHAPATNAM] - subsequently in the case of M/s. Saraf Exports [ 2023 (4) TMI 420 - SUPREME COURT] has clearly held that the income received from Duty DrawBack and DEPB schemes are not derived from the industrial undertaking and hence not allowable as deduction u/s. 80IB(11A). Decided against assessee. 2023 (9) TMI 1314 Deduction u/s 54F - Claim denied as assessee is already in possession of two residential properties - HELD THAT:- It is the specific case of the assessee that the assessee was owing two properties, one is C-409 IVth Floor Nirvana Courtyard, Sector-50, South City- II, Gurgaon, Haryana, which is commercial property and another Property No. 36, Aradhna Enclave, Sector-13, K. R. Puram, New Delhi which is a residential property . The assessee had produced conveyance deed dated 24/09/2010, wherein it is depicted that the assessee had purchased shops/Office premises bearing No. 409 Block-C 4th floor, admeasuring super area 1262.51 square feet (117.29 square metre) situated at Nirvana Courtyard, South City-II, Gurgaon, Haryana. But the Ld. A.O. without looking into the conveyance deed, formed an opinion that the assessee is already in possession of two residential properties . Thus, we are of the opinion, that the A.O. committed error in observing the commercial property as residential property and also committed error in denying the claim of deduction u/s 54F to the assessee. A.O. ought to have appreciated the fact that the Assessee owns a single residential property and should have allowed the deduction claimed u/s 54F of the Act - Appeal filed by the assessee is allowed. 2023 (9) TMI 1313 Correct head of income - profit arising from sale of shares - LTCG/STCG or Business income - intention of the assessee - HELD THAT:- CBDT Circular No. 6/2016 instructing the Assessing Officers and in the concluding para, the Board has reiterated that the principles have been formulated with the sole objective of reducing litigation and maintaining consistency in approach on the issue of treatment of income derived from transfer of shares. The intention of the assessee is paramount. If the assessee has decided to hold the shares as investment and the conduct of the assessee is in line with his intention, then the profits arising from sale of such investment shall be taxed as capital gains, long term or short term. Even the Board has recognized the fact that a taxpayer may have dual portfolio one as investment in shares and the other, as stock in trade of shares. Resolution of the Board of Directors mentioned elsewhere squarely lays down the intention of the assessee that since the holding in shares were of several years, therefore, the same should be held as investment. The intention of the assessee can also be gathered from the Balance sheet and Financial Statement of Accounts. Shares held by the assessee as investment are chargeable to tax under the head Capital Gains and shares held by the assessee as stock in trade are chargeable to tax as Business Income . Based upon the CBDT Circular, when the ld. CIT(A) accepted the long term capital gain, then we fail to understand why the ld. CIT(A) hesitated in not accepting the short term capital gain on the same set of facts. On a specific query from the Bench, in respect of the stand taken in subsequent years, the ld. counsel for the assessee pointed out that profits on sale of shares in subsequent years have been accepted as capital gains. This is also in line with the aforementioned CBDT Circular. As relying on SUKARMA FINANCE LIMITED [ 2015 (5) TMI 225 - DELHI HIGH COURT] and M/S EXPRESS SECURITIES PVT. LTD. [ 2013 (10) TMI 1182 - DELHI HIGH COURT] gains arising out of sale of shares should be taxed as LTCGs and STCGs as declared by the assessee. Accordingly, the appeal of the assessee is allowed and that of the Revenue is dismissed. 2023 (9) TMI 1312 Taxing the interest on income tax refund received u/s 244A - Non-Resident (Foreign Company) - As argued assessee is foreign company and in view of the MFN clause in the protocol to the India-Netherland DTAA the interest received u/s 244A is not taxable - HELD THAT:- We notice that the assessee is a foreign company based at Netherland. It received interest u/s 244A of the Act i.e. interest on income tax refund. Tax at source was deducted by the Revenue authorities. During the course of assessment proceedings, the assessee claimed it not to be taxable based on the finding of this Tribunal in [ 2023 (1) TMI 1198 - ITAT KOLKATA ]. The issue of interest on income tax refund held to be not taxable in the hands of the assessee has been dealt by this Tribunal reads. Therefore, since the assessee is benefitted with the protocol to the India-Netherland treaty dated 21.01.1989 and the favorable provisions of India-Italy tax treaty are applicable on the assessee company because Netherland and Italy both are members of the Organization for Economic Cooperation and Development (OECD) and as per provisions of Article 12(3)(a) of India-Italy DTAA interest earned from Govt. of India by a resident of Italy is not taxable in India, a similar analogy has been applied to the assessee company which is a resident of Netherland. Thus,we set aside the finding of ld. AO and decide the issue in favour of the assessee holding that interest received u/s 244A of the Act by the assessee company based at Netherland from Govt. of India is not taxable. Thus, ground no. 1 raised by the assessee is allowed. Levy of interest u/s 234A - HELD THAT:- We observe that the assessee has filed the return on 08.02.2021 which was within the due date i.e. 15.02.2021. Considering these facts that the return of income has not been filed after the due date interest u/s 234A of the Act cannot be levied. Since the fact that assessee has filed return of income on 08.02.2021 is appearing in the assessment order and since the due date of filing the return was 15.02.2021 there is no delay in filing the return and therefore, interest cannot be levied u/s 234A of the Act. Thus, ground no. 4 raised by the assessee is allowed. Erroneous addition towards refund already issued it is stated that no such refund was granted to the company - HELD THAT:- This fact needs to be verified at the end of the AO to which necessary opportunity of being heard to be provided to the assessee. Thus, ground no. 6 raised by the assessee is allowed for statistical purposes. 2023 (9) TMI 1311 Penalty levied u/s 271(1)(c) - assessee returning a lower income/under reporting of income - whether Defective notice u/s 274 issued? - assessee income was in the absence of audit, liable to be assessed u/s. 44AD at 8% of the turnover, but Assessment was accordingly made, i.e., as against the returned income @ 5% - HELD THAT:- The law, per Explanation 1 to s. 271(1)(c), shifts the onus on the assessee to satisfactorily explain his conduct in returning a lower income, as indeed his bona fides, failing which he is deemed to have concealed particulars of his income. The assessee failing to furnish any explanation, either before the authority levying penalty, before whom it is in law to be, or even the first appellate authority, as to why he did not, in the absence of audit of his accounts, return income, as statutorily mandated, at a net profit rate of 8 percent of the turnover, or, in the alternative, got them audited, returning income on the basis of the audited accounts, on which either side his case on facts would ordinarily lie, it is not open for him on facts, to contend that the notice did not specify the default , which essentially is the under-reporting of income w.r.t. to the amount that the law deems as his income in case of non-audit of books of account in a given set of facts. Audit of accounts, of which requirement the assessee is well aware, cannot be regarded as a mere formality, even as sought to be explained by the Hon ble jurisdictional High Court, as in Peroorkkada Service Cooperative Bank Ltd. [ 2020 (1) TMI 624 - KERALA HIGH COURT] and in the context of s. 271B of the Act;the law thereby allowing due credence to the expert opinion of the Auditor, places reliance on the assessee s accounts. An assessee choosing not to get his accounts audited, cannot avoid the legal consequence/s thereof, and does so only at his own peril. Penalty u/s. 271(1)(c) is one such consequence, saved of course u/s. 273B on proving a reasonable cause, which is a reiteration of the principle that though a strict civil liability, penalty is yet not automatic and gets excluded where the assessee-defaulter was constrained to act in the manner he does, i.e., in the facts and circumstances of his case, the onus to prove which, raising the said plea, is though only on him. No such plea has been made in the instant case. Non-strike off of the appropriate limb of the notice u/s. 274 - Assessee s explanation in the given set of facts and circumstances could and, rather, ought to have, centred around the reason/s for the non-audit of his accounts for the relevant year which would have, where found reasonable, and despite the application of the statutorily presumed profit rate of 8% of the turnover in assessment, saved penalty. It may here also be relevant to state that the assessee s return was even not accompanied by a statement to the effect that income from his business was being disclosed at lower than the said rate, i.e., based on his unaudited accounts, also stating the reason/s for the same. To a unanimous and clear verdict that the said notice is an administrative device for informing the assessee about the proposal to levy penalty in order to enable him to explain as to why it should be not done. A mistake or a mere non-strike off of the inapplicable portion would not invalidate the notice. The entire factual background would fall for consideration in the matter and no one aspect would be decisive. These decisions, it would be seen, are consistent with the law as explained, inter alia, in Vankata Narayana Sons [ 1966 (10) TMI 50 - SUPREME COURT] , T.A. Abdul Khader [ 2006 (10) TMI 78 - KERALA HIGH COURT] , Maharaj Krishna [ 2000 (7) TMI 37 - DELHI HIGH COURT] , and Hajarilal Kishorilal [ 1966 (9) TMI 5 - MADHYA PRADESH HIGH COURT] all, save the first, being only in the context of a penalty notice, while that by the Apex Court was in respect of notice u/s. 148, a jurisdictional notice, while that u/s. 274 is admittedly not. And, further, validates the analysis carried out at para 4.1 of this order. In view of the fore-going, we find no merit in the assessee s case, 2023 (9) TMI 1310 TP Adjustment - MAM - determination of the most appropriate method to benchmark the international transaction in respect of IT enabled Services (ITeS) - Assessee contending that when the assessee is rendering ITeS services to both AE segment and non-AEs segment, the comparison of those segments affords very reliable results than adopting the PLI taken from the external comparables - HELD THAT:- Neither the assessee nor the Revenue contend that there is any change in the functions performed, assets employed, and the risks assumed by the assessee from the same as in the assessment year 2009-10 [ 2017 (12) TMI 1867 - ITAT HYDERABAD] - Since the facts of this year are identical to the facts involved in the year 2009-10, while respectfully following the view taken by the Co-ordinate Bench for the assessment year 2009-10, where it this issue to the file of the AO/learned TPO with a direction to consider only the operating profit/operating cost of the transactions and also to consider internal TNMM where the services rendered by the assessee are similar to both AEs and non-AEs. Grounds relating to the issue are answered accordingly. TP adjustment in respect of the interest on trade receivables - In view of the fact that this issue in [ 2022 (6) TMI 1386 - ITAT HYDERABAD ] is no longer res integra and in assessee s own case, a view is taken that the interest on trade receivables is an international transaction, and has to be benchmarked separately and after considering the relevant factors pleaded by the assessee for such assessment year, took the view that 6% per annum is the appropriate rate of interest, we do not find any reason to deviate from this view or to distribute such view. Since no change of circumstances is brought to our notice, we follow the said view and direct the learned AO/learned TPO to consider interest rate on outstanding receivable at the year end @6% and recompute the transfer pricing adjustment. 2023 (9) TMI 1309 Revision u/s 263 - Validity of reassessment proceedings - PCIT on not satisfying with the reply given by the Assessee, observed that Assessee is involved in infamous NRHM scam and were raided by CBI and the key persons of the assessee company namely Shri Surendra Chaudhary and Shri Narendra Chaudhary were made as accused - HELD THAT:- In the present case, Ld. AO carried out an enquiry with regard to issues raised by him on reasons recorded for reopening of the assessment. Ld. PCIT was of the opinion that assessee was involved in NRHM scam and decision of Hon ble High Court of Allahabad in the case of Daffodils Pharmaceuticals Vs. State of UP. [ 2017 (4) TMI 1624 - ALLAHABAD HIGH COURT] and also another matter relating to M/s Daffodils Pharmaceuticals in the case of Surendra Chaudhary Vs. State of U.P. another [ 2015 (7) TMI 1429 - ALLAHABAD HIGH COURT] which are having bearing on the assessment of assessee for the assessment year 2012-13 and he ought to have considered the said Judgments while framing the reassessment. In our opinion, the above judgments are not part of the assessment record and at the time of reassessment, the ld. AO is required to go through the records in accordance with reasons recorded and he cannot presume certain facts which are beyond his records. Even otherwise, the ld. PCIT is expected to examine the assessment records at the time of issuing notice u/s 263 of the Act. At the time of issuing notice u/s 263 of the Act by Ld. PCIT, the above referred Judgments were also not forming part of the assessment records. The findings of the ld. PCIT on this issue are contrary to facts and also against the material brought on record by ld. AO. AO is not expected to carry out enquiry with regard to issues which are not subject matter of the reopening. The findings of the ld. PCIT to give direction to the ld. AO to reframe the assessment order in the light of the Judgments of Allahabad High Court in the case of Daffodils Pharmaceuticals cited (supra) is unwarranted, which is beyond the scope of the jurisdiction which the PCIT can exercise u/s 263 of the Act. Payment of commission to various persons, PCIT expected the ld. AO to verify with various Government officers including CBI officers. In our opinion, this is also not subject matter of reasons recorded for reopening of assessment. As such, the ld. AO is not required to carry out enquiry on this issue while passing assessment order u/s 143(3) r.w.s. 147 of the Act. Even the allowability of depreciation on Flat is also not subject matter of reason recorded for reopening of assessment. This cannot be verified by ld. AO when the main issue for reopening of the assessment is not sustained. The one more issue raised by the PCIT was that payment of commission was passed to public policy in view of the explanation to section 37(1) - It has been noted from the reasons recorded that the ld. AO not alleged about applicability of explanation to section 37(1) of the Act while reopening assessment. Once it is not the issue of reopening assessment, the ld. AO cannot be expected to carry out the enquiry as suggested by the ld. PCIT. AO satisfied about the correctness of the above and after calling for the details from the assessee and came to a conclusion that there was no necessity of any addition on the above issues and duly framed the assessment u/s 143(3) r.w.s. 147 of the Act. In our opinion, on the facts of present case, the pre-requisite condition to exercise jurisdiction by ld. PCIT suo-motu is not satisfied.The phrase prejudicial to the interest of the revenue has to be read in conjunction with the erroneous order passed by the ld. AO. Every loss of revenue has a consequence of an order of the ld. AO cannot be treated as a prejudicial to the interest of revenue. In the present case, the assessment framed by ld. AO u/s 143(3) r.w.s. 147 of the Act and the A.O. had recorded various reasons for reopening assessment and went on framing the assessment on the said basis and collected the information with reference to the reasons so recorded for reopening of the assessment and the A.O. was satisfied with the explanation given by the assessee regarding various issues raised by him. Now the ld. PCIT cannot find fault with the action of the ld. AO and direct A.O. to carry out further enquiry on the materials or judgments of the Hon'ble High Court which are not part of the assessment records. Thus merit in the issues raised by the ld. PCIT in the order passed u/s 263 - Decided in favour of assessee. 2023 (9) TMI 1308 Unexplained investment - Valuation Report of the Ld. DVO relied at arriving at the total cost of construction to the assessee - CIT(A) has granted relief citing there is a mistake in totaling in Annexure-II of the Valuation Report - HELD THAT:- We find from Annexure-I to the Valuation Report of the Ld. DVO vide Report No. 1: 02: 1470 in Item No.3 being the addition for cost of superior items provided in the building in place of items provided as per specifications of Plinth Area Rates (PAR) has included Rs. 8,58,893/- towards cost of flooring. Annexure-II, while valuing the flooring charges incurred by the lessee DVO valued at Rs. 19,36,116/-. As per clause 11 and 12 of the lease agreement entered on 12th March 2011, the lessee has to do the interiors and exterior installations including the decorations which shall not be claimed with the lessor. We therefore find that the Ld. CIT(A) has erred in adopting the valuation of Rs. 19,36,116/- incurred by the lessee and reducing it from the cost of construction of the assessee instead of Rs. 8,58,893/- incurred by the assessee as per Annexure-I of the Ld. DVO report. We therefore direct the Ld. AO to adopt Rs. 8,58,853/- as cost of flooring which needs to be reduced from the cost of construction of the assessee. Thus, this Ground raised by the Revenue is partly allowed. Expenditure towards electrical installations - CIT(A) directed to reduce the balance cost incurred by lessee from estimated cost of construction as lease agreement that the said clause does not mention anything about electric fittings - HELD THAT:- As on perusal of the lease agreement, we find that the lessee was not claiming cost of interiors and exteriors from the lessor. Further, from Clause-11 and 12 of the Lease Agreement we find that the lessor shall bear only the cost of Civil Structure side walls whereas the interiors and exterior installations are to be done by lessee at their own cost. Revenue Authorities have also not disputed the cost incurred by the lessee towards electrical installations. CIT(A) has rightly directed the Ld. AO to deduct entire expenditure towards electrical installations from the cost of construction of the assessee. We therefore find no infirmity in the order of the Ld. CIT(A) on this ground and hence this ground raised by the Revenue is dismissed. Deduction of 15% towards variation in the CPWD rates and the local rates - HELD THAT:- DVO in his valuation report has not considered the PAR [Plinth Area Rates] as per the State PWD of the Andhra Pradesh Government. DVO has estimated the cost of construction on the Plinth Area Rate 2007 approved by the CBDT and weighted average Cost Index 120 as has been derived from the approved cost indices prevailing during the period of construction at Vijayawada. DVO also stated in his report that no Cost Index was given for PAR. The jurisdictional Bench of the ITAT, Visakhapatnam has allowed the rebate of 15% towards the difference between the CPWD rates and State PWD rates in many cases including the case cited by the Ld. AR ie., in the case of M/s. Hillocks Hotels Pvt [ 2022 (6) TMI 946 - ITAT VISAKHAPATNAM] Consistently following the various decisions of the jurisdictional Bench of ITAT, CIT(A) has rightly directed the Ld. AO to adopt 15% towards variation between the CPWD rates and State PWD rates. Deduction of 10% towards self-supervision - HELD THAT:- The jurisdictional Bench of the ITAT, Visakhapatnam has allowed self supervision charges at 10% in many cases including the case cited by the Ld. AR ie., in the case of M/s. Hillocks Hotels Pvt [ 2022 (6) TMI 946 - ITAT VISAKHAPATNAM] Consistently following the decisions of the jurisdictional Bench of ITAT, the Ld. CIT(A) has rightly directed the Ld. AO to adopt 10% . 2023 (9) TMI 1307 Deduction u/s 10A in respect of interest income earned by the assessee - CIT(A) allowed deduction in respect of interest income earned by the assessee from parking of surplus funds with banks - revenue is aggrieved by the decision of Ld CIT(A) in allowing deduction u/s 10A without setting off of loss incurred from other eligible units against profit of eligible units - HELD THAT:- As in assessee s own case in A.Y. 2005-06 in the appeal of the revenue [ 2023 (1) TMI 1292 - ITAT MUMBAI] as held that the loss incurred in one unit need not be set off of against the profits of other units for the purpose of computing deduction u/s 10A of the Act in respect of profit earning units. We notice that, in this regard, the Coordinate Bench has followed the decision rendered in the case of Scientific Atlanta India [ 2010 (2) TMI 658 - ITAT, CHENNAI ] wherein it was held that section 10A of the Act is a deduction section and not an exemption section. Further it was held that the deduction has to be computed undertaking-wise . The Hon ble Supreme Court has held in the case of CIT vs. Yokogawa India Ltd [ 2016 (12) TMI 881 - SUPREME COURT ] that the deduction u/s 10A of the Act should be computed at the stage before arriving at the Gross total income of the eligible undertaking. Thus we are of the view that the Ld CIT(A) was justified in holding that the losses incurred in other eligible units are not required to be set off against the profits of the undertaking against which the deduction u/s 10A was allowed. Computation of deduction u/s 10A - whether the telecommunication charges are required to be deducted from the Export turnover while computing deduction u/s 10A of the Act or not? - HELD THAT:- As relying on HCL Technologies Ltd [ 2018 (5) TMI 357 - SUPREME COURT ] we direct the AO to compute the deduction u/s 10A of the Act by excluding telecommunication charges both from export turnover and total turnover while computing deduction u/s 10A of the Act. TP adjustment in respect of income - assessee selected itself as tested party and adopted TNM method as most appropriate method - Net Profit Margin was selected as Profit Level Indicator (PLI) and the assessee s margin was 22% - assessee identified 43 companies, whose average margin was 9%. Accordingly, the assessee contended that its international transaction with AEs is at arms length - HELD THAT:- TPO, after holding that the foreign AEs should be taken as tested parties have selected three unknown Indian comparable companies. Accordingly, he has held that the assessee should have remunerated the AEs at Cost plus 10% margin. Admittedly, the above said approach of the TPO is against the Transfer pricing provisions and also in gross violation of principles of natural justice. Accordingly, we are of the view that the Ld CIT(A) was justified in rejecting the above said approach of TPO. Net profit margin declared by the assessee is 22%. We noticed that the average margin of 11 comparable companies selected by the Ld CIT(A) was 22.53%. Hence the difference in the margin rate falls within the tolerance limit of 5%, in which case, the international transactions of the assessee should be considered to be at arms length. Accordingly, no transfer pricing adjustment is called for. Accordingly, we modify the order passed by Ld CIT(A) on this issue and hold that no transfer pricing adjustment is called for. Accordingly, we delete the addition sustained by Ld CIT(A). Disallowance u/s 14A r.w.r. 8D - HELD THAT:- The year under consideration being A.Y. 2006-07, the provisions of Rule 8D will not apply to the year under consideration as per the decision rendered by Hon ble Bombay High Court in the case of Godrej Boyce Mfg Co Ltd. [ 2010 (8) TMI 77 - BOMBAY HIGH COURT ] Accordingly the tax authorities are not justified in applying provisions of rule 8D to the year under consideration. However, since the assessee has earned exempt income, a portion of expenditure needs to be disallowed in terms of section 14A of the Act. The Hon'ble Bombay High Court has upheld the disallowance of 2% of exempt income in the case of Godrej Agrovet Limited [ 2014 (8) TMI 457 - BOMBAY HIGH COURT] ] Following the same, we direct the Assessing Officer to restrict the disallowance under section 14A to 2% of the exempt income. TP adjustment made in respect of delayed receivable from the AEs - TPO noticed that the assessee has received money from its AEs with considerable delay and accordingly made transfer pricing adjustment of Rs. 3.80 crores on account of delayed receivable by adopting interest at 6.87% on average quarterly balance due from AEs - HELD THAT:- We noticed that the AEs have remitted money to the assessee with delay ranging from 1 day to a period exceeding 1 year, after realization from their debtors. Hence the reasoning given by the Tribunal, as rightly pointed by Ld D.R, would not apply to the facts of the year under consideration. We also noticed that the TPO has computed the interest by taking average quarterly balances. In our view, the same is not correct method of computing interest on delayed receivables. Since the details of realization of individual bills are available, it will be possible for the assessee/TPO to compute interest individually after allowing accepted credit period. Thus we are of the view that this issue requires fresh examination at the end of the Assessing Officer/TPO. Accordingly we set aside the order passed by the learned CIT(A) on this issue and restore the same to this file for examining this issue afresh in the light of discussions made supra. TP Adjustment - loan given to AEs - TPO has arrived at ALP rate of interest for i flex America at 8.37% and for ISE Mauritius Company Mauritius at 11.75% - TPO took the view that the assessee has undercharged interest and accordingly made transfer pricing adjustment - HELD THAT:- We notice that, with regard to Mauritius subsidiary, no material has been furnished by the assessee to substantiate the ALP of interest charged. It is the submission of Ld A.R that the ALP of interest income should be determined by considering LIBOR rate, to which certain points are added to bring the same to market rate. We notice that the TPO has considered Prime Lending rate plus Guarantee charges, which according to Ld A.R is not correct. We agree with the contentions of Ld A.R on this point. Thus, we notice that both the parties have not substantiated their stand properly. Accordingly, we are of the view that this issue also requires examination at the end of AO/TPO. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of AO/TPO for examining this issue afresh. 2023 (9) TMI 1306 Validity of final assessment order - AO has not implemented the directions of DRP in letter and spirit as per the mandate of section 144C(13) - HELD THAT:- As could be seen from the aforesaid observations of learned DRP, it has issued a specific direction to the AO to verify from his records whether he has asked for further details/query from the assessee during the remand proceeding, which the assessee did not furnish. In case, it is so, the addition to be retained. DRP had further directed, in case, AO has not asked for any clarification or conducted any inquiry during the remand proceeding, AO must record, as to why and under what circumstances, he did not conduct any inquiry relating to the manner of delivery of services or proof of employees visiting India for rendering such services, that too, without providing any opportunity to the assessee. DRP also directed the AO to pass a speaking order. On a reading of the final assessment order, more particularly, the observations of the AO in paragraphs 8 and 9, we are of the view that the AO has completely disregarded the specific directions of learned DRP and has passed the final assessment order in a perfunctory and cavalier manner. Thus, in our view, the Assessing Officer has disobeyed the statutory mandate. We are inclined to set aside the final assessment order and restore the matter back to the AO for fresh adjudication of the issues contested by the assessee in course of proceeding before DRP and before us, as well. AO is directed to consider the additional evidences furnished by the assessee before DRP on their own merits and pass assessment order with proper reasoning in the light of the directions issued by DRP. Before passing the order, AO must provide reasonable opportunity of being heard to the assessee. Grounds are allowed for statistical purposes. 2023 (9) TMI 1305 Revision u/s 263 - taxability of income surrendered in the course of survey prescribed u/s 115BBE - as per CIT AO inter alia took note of the additional income included by the assessee in its e-return of income and accepted the e-return without any adjustment while framing the e-assessment order u/s 143(3) after making a brief reference to factum of survey and inclusion of additional income in the ROI - Pr.CIT observed on the basis of perusal of case record that the additional income offered are largely in the nature of unexplained cash, excess stock and unexplained advances as on the date of survey which is liable to be assessed u/s 68/69/69A/69B/69C and consequently the tax payable on such undisclosed income is susceptible to enhanced tax rate of 60% as per Section 115BBE - HELD THAT:- Determination of true nature and character of income is highly contextual and law has not devised any straight jacket formula in this regard. The classification of income under a particular head of income may significantly vary having regard to the nuanced facts of each case. When seen contextually, the additional income in instant case was conceded by the assessee in the course of survey operations at her business premises. The income surrendered is sort of lumpsum figures offered in the form of excess stock, unaccounted advance to staff, excess cash generated etc. from business operations. Such additional income confessed in survey at business premises gives a facial impression of business attributes. In the light of assertions made in statement in survey and post survey proceedings placed in the paper book, the assessee appears to have made out an arguable case that such income is concomitant of business activities and thus impressed with the character of business income as correctly disclosed in the ROI. Action of AO is not open to attack as erroneous where a view taken is in the realm of a possible view and not found to be wholly incongruous to facts or law. One can not say without any reservation that no plurality of opinion can exist on the point and such additional income cannot be treated as business income at all as adjudged by AO. This makes the action of the AO is the league of being plausible. The power of review cannot be exercised to collect more taxes merely owing to the reason that the law now provides for penal and steep rate of taxation by bringing such income within the ambit of S. 68/69 etc. Significantly, the PCIT, while seeking to set aside the action of AO and remitting the matter back for further enquiries, did not bring any definite material to show any incorrect assumption of such facts on this score. Besides, no observations are found in the impugned revisional order suggesting a course to be adopted towards manner of determining true character of additional income or the nature of enquiries expected from AO. Taking into account the entire conspectus of the matter, we thus find merit in this plea. The pre-requisites of S. 263 are clearly not found to be fulfilled. Admittedly, while the survey was conducted prior to substitution/ modification of S. 115BBE, the assessment year concerned continues to be AY 2017-18. The ROI was filed after the substituted amendment had come into force. The amended provision also came into force w.e.f 01.04.2017 i.e. AY 2017-18 notwithstanding the fact that it was substituted in Dec., 2016. Section 4 of the Act postulates that the law applicable at the beginning of an assessment year would apply to all income of the previous year unless excluded by express enactment. It is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication. There is no question of the assessee possessing any vested right under the law as it stood before the amendment.The plea that substituted provision of S. 115BBE is not applicable for the earlier period in the same previous year thus fails at the threshold. In this view of the matter, we are dis-inclined to agree with the second plea for lack of jurisdiction for revision exercised by the PCIT u/s 263 of the Act. Assessee contends that the income arising after 31.03.2017 would only face the wrath of penal rate of S. 115BBE of the Act and would thus apply to AY 2018-19 onwards - We do not see any merit in this plea either. The substituted provision of S. 115BBE has come into effect w.e.f. 1-4-2017 and would thus apply to all transaction covered in the previous year relevant to AY 2017-18, to the extent applicable. The press release referred is in the context of setting right the default in relation to unaccounted banned notes. The press release does not in any manner reads down the substituted provisions of S. 115BBE which are far wider in its scope and ambit. The salutary principles of charging Section 4 discussed in para 13 above would apply mutatis mutandis . The plea towards applicability of substituted provision of S. 115BBE from AY 2018-19 instead of AY 2017-18 provided in the Act thus fails. In conclusion, in the light of discussion the approach adopted by the AO being plausible, the action of the Assessing Officer cannot be labeled as erroneous although it may be prejudicial to the interest of the revenue. Thus, twin conditions of Section 263 are not simultaneously satisfied in the instant case. The jurisdiction usurped by the Pr.CIT under Section 263 thus fails on this parameter and hence the revisional order cannot be sustained in law. Consequently, the revisional order passed under Section 263 is quashed. Appeal of the assessee is allowed. 2023 (9) TMI 1304 Revision u/s 263 - no inquiry v/s inadequate inquiry - As per CIT deduction of provision for bad debts which were written back from the total income of the assessee in the year under consideration on the presumption that no enquiries were conducted by the learned AO with respect to the aforesaid claim, in the course original assessment - HELD THAT:- We are of the view that there is a distinction between merely calling for information on a particular issue and considering such information with due application of mind if and when such information is actually provided by the assessee. Thus in the present facts, we are of the view that on the issue of allowing of provision for doubtful debts, the claim of the assessee was allowed which according to us is a case of no inquiry and not a case of inadequate inquiry and consequently a case of non application of mind to the material on record. In the present case since the required information was not furnished by the assessee therefore it cannot be considered to be a case where the AO was satisfied with respect to the query by some other explanation offered by assessee. Merely asking a question which goes to the root of the matter and not carrying it further, would according to us fall in the category of non inquiry. We find that Hon ble Apex Court in the case of Malabar Industries Co. [ 2000 (2) TMI 10 - SUPREME COURT ] has held that an incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous and in the same category fall orders passed without applying the principals of natural justice or without application of mind. Also in the case of Duggal Co. [ 1994 (8) TMI 6 - DELHI HIGH COURT ] has held that the Income tax officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. It is incumbent on the Income- tax Officer to further investigate the facts stated in the return when circumstances would make such an inquiry prudent and the word erroneous in Section 263 of the Act includes the failure to make such an inquiry. It has further held that the order becomes erroneous because such an inquiry has not been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct. Thus we are of the view that PCIT was fully justified in invoking the provisions of Section 263 of the Act in the present case and therefore there is no merit in the grounds raised by assessee. Grounds of the assessee are dismissed. 2023 (9) TMI 1303 Reopening of assessment - donation/capitation fee paid for admission of daughter in cash at the time of admission - Reliance on the statement of Chairman [Medical College] - The statement of Chairman [Medical College] clarified that capitation fees was received and the registers seized and annexurised contained entries of both accounted and unaccounted receipts and also name of assessee s daughter figures in the list of such names and as per the code given the figure of fees paid and donation given and their total is clearly stated and it is the same pattern in all the cases - assessee argued he as denied with the opportunity of Cross-examination HELD THAT:- Similar issue has came up for considerations before the Tribunal in the case of Sulekh Chand Singhal[ 2020 (8) TMI 65 - ITAT DELHI] wherein the same college and the very same Doctor s statement was in dispute and the Assessee therein was denied with the opportunity of Cross-examination. In view of the fact that even in the present case, the assessee has been deprived of with the opportunity of cross-examining Chairman[ Medical College] which was ultimately resulted in making the addition of similar nature, in our opinion, the addition made by the Revenue is in violation of the natural justice which requires to be interfere. By relying the order of the Co- ordinate Bench of ITAT, Delhi, we allow the grounds of appeal of the Assessee and delete the addition made by the AO which was confirmed by the Ld. CIT(A). Customs 2023 (9) TMI 1302 Refund of amounts deposited towards provisional duty - whether claim for refund of amounts deposited towards provisional duty, as a condition for clearance of imported goods can be the subject matter of refund after conclusion of assessment proceedings and having regard to its outcome, under Section 18 of the Customs Act? HELD THAT:- It is brought to the notice of this Court that a judgment subsequent to the ruling in Allied i.e. SAHAKARI KHAND UDYOG MANDAL LTD. VERSUS COMMISSIONER OF C. EX. CUS. [ 2005 (3) TMI 116 - SUPREME COURT] appears to have expressed a different view in that the Court held that to maintain a claim for refund, the assessee has to establish that he or it had paid the amount for which relief is sought and had not passed on the burden to the consumers. This judgment though rendered by a three Judge Bench, overlooked the ruling in Allied - Furthermore, even though the judgment has generally referred to the nine Judge Bench ruling in MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA [ 1996 (12) TMI 50 - SUPREME COURT] nevertheless the specific observations in Para 104 appears to have escaped the attention of the Court. There is no infirmity with the findings and conclusions recorded in the impugned judgments, which are in accord with the ratio in Allied - Appeal of Revenue dismissed. 2023 (9) TMI 1301 Jurisdiction of the Designated Officer to issue show cause notices to the petitioners who are foreign exporters - Applicability of Customs Act to the transactions which have taken place in a foreign territory - HELD THAT:- When the proceedings are listed on the backdrop of such prior orders, Mr. Mishra, learned Counsel appearing for the revenue would submit that in issuing the impugned show cause notice, the department has basically relied on the decision of the learned Single Judge of the CESTAT in the case MS. PRERNA SINGH, CEO M/S. SEVILLE PRODUCTS LIMITED AND INDIAN AUTHORISED REPRESENTATIVE: V. LAKHSMIKUMARAN VERSUS COMMISSIONER OF CUSTOMS (IMPORT-II) MUMBAI [ 2020 (1) TMI 905 - CESTAT MUMBAI ], hence, the respondents were justified in issuing the show cause notice to a foreign party. Prima facie the stand of the department is not satisfying even assuming that the provisions of the amended sub-section (2) of Section 1 of the Customs Act are taken into consideration as applicable to the facts and circumstances in the present case. Accordingly, as purely an issue of law arises for consideration in the present proceedings which goes to the root of the authority and jurisdiction of the designated officer to issue the impugned show cause notices to a foreign entity, we would be required to hear the parties on the merits of their respective contentions, at the final hearing of the petition. Hence, Rule. Respondents waive service. Considering the provisions of Section 1(2) of the Customs Act prior to its amendment by Finance Act, 2018 (w.e.f. 29.3.2018) as also considering the effect of the said amendment, the petitioners have made out a prima facie case for grant of interim reliefs. Hence, pending the hearing and final disposal of the petitions, the impugned show cause notices shall stand stayed. 2023 (9) TMI 1300 Seeking release of detained goods - legality of search conducted at the factory premises, office premises as well as the residential premises of one of the directors of the Petitioner Company - import of the commodity Ethephon - prohibited goods or not - HELD THAT:- It is an admitted fact, Ethephon is a scheduled commodity under the Insecticides Act. Therefore, by virtue of the language of section 17(1)(c) read with Section 3(e)(i) of the Insecticides Act, a stipulation in law does arise on the import of Ethephon to allow its import only upon fulfillment of conditions of prior registration obtained under Section 9 of the Insecticides Act. To that extent, the second submission advanced by learned counsel for the petitioner that the requirement to obtain a prior registration under the Insecticides Act is only a regulatory measure not provided with any consequence (for its non-compliance), is misconceived. It would be premature for the writ Court to reach a fact conclusion whether Ethephon is an insecticide that may not cause any of the specified harm to any form of plant or animal life, generally. Neither the Court is an expert in the science of chemistry or environment, nor it has any expert jurisprudential material available to it as may safely lead it to the conclusion that import and/or manufacture of Ethephon may not cause the effect of preventing or destroying or repelling or mitigating any insect or rodent or fungi or weed or any other form of plant or animal life. 35. A fact enquiry would be required to be conducted before the contention being canvassed by the learned counsel for the petitioner may be accepted. That consideration has become necessary in the face of the claim of exemption set up by the petitioner. That claim must arise and be tested before the fact-finding authority i.e., the statutory authorities. At present, Ethephon being a scheduled commodity under the Insecticides Act, it falls outside the scope of any fruitful discussion if it is an insecticide for the purpose of the Insecticide Act. Clearly, it is. In absence of any further fact proven to establish any exemption available to it under section 38 of the Insecticides Act, prima facie it stands made out that Ethephon is a regulated insecticide. It may not be imported or manufactured, except under a valid Registration Certificate etc. and upon fulfilment of the conditions thereto - in the absence of any further legislative and/or executive declaration expressed, at present, the only authority that may deal with the issue of claim of exemption being made by the petitioner would be the quasi-judicial authority under the Act. At present, the proceedings initiated under Section 124 of the Act are pending. The FSSAI established under the Food Safety and Standards Act, 2006 seeks to guard the health interests of the human species only. On the other hand, the Insecticides Act seeks to guard the minimum existential interest of all life forms, from the harmful effects that may be caused by use of an insecticide. To that extent and for that reason, the Insecticides Act is both a special Act and an enactment with wider outreach and spread than the Food Safety and Standards Act, 2006. There are no good ground to set aside the seizure memorandum and remit the matter to the seizing authority to pass a fresh order, at this stage. Under the scheme of the Act, the seizure memorandum would remain subject to outcome of the confiscation proceeding. Those being pending before the adjudicatory authority, keeping in mind the further fact that the adjudication on the issue whether Ethephon is exempt under the Insecticide Act, would have a direct bearing on all subsequent transactions of import and manufacture of that commodity, by the petitioner, it is deemed desirable and in the interest of justice that the adjudication proceedings be expedited and concluded without further delay. The writ petition is disposed of with a direction, in case the petitioner files its reply to the show cause notice dated 21.12.2021 within a period of four weeks from today, the adjudicating authority may ensure expeditious conclusion of the adjudication proceedings, after due opportunity of hearing etc. to the petitioner, preferably within a period of three months therefrom. 2023 (9) TMI 1299 Seeking provisional release of goods - dispute related to valuation - silver articles/utensils - Section 110-A of the Customs Act, 1962 - binding effect of orders of the higher authority unless stayed - HELD THAT:- The Respondents are not justified in not provisionally releasing the goods which were imported in December, 2021 and are lying with Respondents till today that is for almost one year and nine months. The Respondents have fairly stated that the goods imported are not prohibited goods and the only issue in dispute is with respect to the valuation. There is also no dispute that as of today, there is no stay of the Order-in-Original dated 16th December, 2022, whereby the show cause notice for misdeclaration of the value of the goods was dropped. The Petitioner is justified in relying upon the decisions of the Supreme Court in the case of Union of India [ 1991 (9) TMI 72 - SUPREME COURT ], Collector of Customs, Bombay [ 1993 (9) TMI 124 - SUPREME COURT ], Himgiri Buildcon Industries Limited and Agsons Agencies (I) Private Limited [ 2021 (2) TMI 391 - BOMBAY HIGH COURT ] and HLG Trading [ 2018 (8) TMI 1608 - MADRAS HIGH COURT ] in support of his contention that orders of the higher authority is binding on lower authorities unless same is stayed. Since, there is no stay as of today, the Order-in-original is binding on the Authorities and therefore the Petitioner is justified in seeking provisional release of the goods under Section 110-A of the Customs Act, 1962. It is important to note that the Respondents have not doubted the credentials of the Petitioner who is a regular importer of such goods. The Petitioner has approached this Court only after receiving no response from the Respondents inspite of several request for provisional release of the goods. The petition is allowed by directing the goods, subject matter of Bill of Entry No. 669283 dated 17th December, 2021, be provisionally released on the Petitioner paying the duty on the value as declared i.e. Rs. 1,01,23,813/- and furnishing a bond containing an undertaking that the Petitioner shall pay the duty fine and/or penalty of the differentiated amount and/or as may be adjudged by the adjudicating authority, subject to the appellate provisions under the Act. The bond and undertaking shall be appropriately furnished. 2023 (9) TMI 1298 Seeking release of seized goods - goods purchased by the petitioner from an importer - privity of contract - banned goods or not - Allegation of undervaluation on the basis that other importers have imported the same goods at higher rate - HELD THAT:- As per definition under Section 2(25) of the Act, the term imported goods clearly changes the nature, once the same are cleared for home consumption. Admittedly, in this case, the goods were duly cleared in favour of the importer and were subsequently sold to the present petitioner for home consumption. Coupled with the above, the authorities have not challenged the sale made by the said importer in favour of the present petitioner. Therefore, the respondents were not within their rights to seize/ confiscate the said goods. Principle of Natural Justice - HELD THAT:- No notice was served upon the petitioner before such an action was taken - It is not a case where the petitioner was dealing in some illegal or banned goods, which had to be confiscated - where the goods are not banned or against any violation of any other law, a business transaction cannot be ruined at the whims and fancies of the respondents. Merely because one of the importer was successful in clicking a deal for a lesser amount of price, cannot be a reason for such a bizarre action. Allegation of undervaluation on the basis that other importers have imported the same goods at higher rate - HELD THAT:- There is nothing on record to show that the price at which the said importer had imported the said goods was wrong and it may be a case that the other importers are purposefully importing the said goods on a higher price for higher profits. Fixation of price of the goods is absolutely relative and based on multiple factors, which two businessmen take a call before entering into an agreement. It is not a case where diamond worth Rs. 100 Crores has been imported at Rs. 100/- to avoid tax. However, in case it is found to be a fake diamond then probably Rs. 100/- could also be a higher price. The seizure memo dated 14.02.2023 (Annexure P-1) is quashed and the respondents are directed to release the goods seized vide seizure memo dated 14.02.2023, forthwith - Petition allowed. 2023 (9) TMI 1297 Seeking provisional release of the seized goods - mismatch in the disclosure made by the supplier as well as by the importer, the petitioner herein - Section 110A of the Customs Act, 1962 - HELD THAT:- This Court is of the considered view that no prejudice would be caused to the respondents if the petitioner s representation seeking for provisional release of the seized goods is considered by the respondents, on merits and in accordance with law, within a time frame to be fixed by this Court. This Court is of the considered view that six weeks time will suffice for the respondents to pass final orders on the petitioner s representation seeking for provisional release of seized goods. These writ petitions are disposed of by directing the respondents to pass final orders on the petitioner s representation dated 23-11-2022 seeking for provisional release of the seized goods as per the provisions of Section 110A of the Customs Act, 1962, on merits and in accordance with law. 2023 (9) TMI 1296 Application for a new Customs House Agents Licence, in terms of Section 146 of the Customs Act, 1962 - violation of provisions of Regulation 11 of Customs Broker Licensing Regulations 2013 (CBLR) (Regulation 13 of Customs House Agents Licensing Regulations, 2004) - HELD THAT:- There are no hesitation in holding that the issuance of the impugned notice under Section 124 of the Customs Act, for the aforesaid purpose, is just not made out under the statute. In the circumstances, the show cause notice issued by the Department is ab initio void and is therefore liable to be quashed. The show cause notice issued by the Department as a nullity in law. Under the circumstances, all and any proceeding issued in pursuance of a void show cause notice are in themselves void ab initio and therefore, carry no legal force. The proceedings initiated are therefore set aside on this preliminary ground alone, without going into the merits of the case. The Appeal filed by the Department is dismissed. 2023 (9) TMI 1295 Levy of anti-dumping duty - Classification of imported goods - Amoxicillin Sodium with Clavulanate Potassium - to be classified under Tariff Entry No. 30032000 or under CTH 29411030? - HELD THAT:- Admittedly letter dated 22.11.2019 is the response to the clarification sought by the appellant from DGTR. From the said letter it is clear that while clarifying regarding anti-dumping duty on import of Amoxicillin Trihydrate from China PR in the light of final findings dated 3rd April, 2017 recommending anti-dumping duty on the import of Amoxicillin Trihydrate from China PR in para 5, 6 7 thereof - In the light of said clarification, hold that the product in question is not covered under the notification vide which the anti-dumping duty was imposed upon another product called Amoxicilin Trihydrate . The impugned clarification was not available to the adjudicating authority below but in the light of said clarification duly conceded by the department, it is held that anti-dumping duty as has been levied on Amoxicillin Sodium with Clavulanate Potassium, the product imported by the appellant is not sustainable - Appeal allowed. 2023 (9) TMI 1294 Classification of goods intended to be imported - Data Projector (Model - ZH 350, ZW350e, ZX 350e) - classifiable under CTH 85286900 or not - applicability of Sr. No. 17 of Notification No. 24/2005-Customs, dated 1-3-2005, as amended - HELD THAT:- A projector is an optical device that projects an image/video onto a surface, commonly a projection screen. The idea of a projector is to convert a small image into a much larger one so that a greater number of people can see it. A projector accepts a video/image as an input, processes it with the assistance of its inbuilt optical projection system consisting of a lens and optical source and projects the enhanced output on the projection screen. Therefore, the compatibility of a projector with input devices, such as a computer, a DVD player, etc. feeding images/videos to it and its ability to project these inputs accurately on the screen forms the most important attribute for the classification of a projector. The projectors under consideration have got certain additional ports such HDMI x 2, Audio Out, USB-A (5V/1.5A), RS-232, etc., which make them capable of being a video projector and consequently classifiable under CTH 85286900 also. GRI Rule 3 states that the heading which provides the most specific description shall be preferred to headings providing a more general description . The website, https://www.optoma.com/ap/product, of the manufacturer of the impugned devices were referred to understand how these projectors are marketed by the manufacturer. These are listed under the business/education category of projectors on the said website - From the description, it is clear that these are marketed as data projectors only. From the product catalogues and information available on the websites, it is clear that data projectors are principally meant for use in/with an automatic data processing system. They are designed to project in places like conference rooms, business meetings, financial institutions, tradeshows, exhibition venues etc. with connectors matching that of a laptop/computer. They possess both indoor and outdoor projection capability. The projectors proposed to be imported by the appellant have got additional features such as an HDMI x 2, Audio Out, USB-A (5V/1.5A), RS-232, etc. along with the capability to adjust the aspect ratio in 3 models. The presence of additional features cannot disentitle the impugned goods from classification under sub-heading 8528 62 00. Sr. No. 17 of Notification No. 24/2005-Customs, dated 1-3-2005, as amended, exempts all goods of a kind solely or principally used in an automatic data processing system of 8471 and falling under Heading 8528 62. As the impugned goods are held as classifiable under sub-heading 8528 62 00 and are principally used in/with automatic data processing system they are entitled to the exemption. The Data Projector (Model - ZH 350, ZW350e, ZX 350e) are classifiable under sub-heading 8528 62 00 of the First Schedule to the Customs Tariff Act, 1975 and would be eligible to avail benefit of Sr. No. 17 of Notification No. 24/2005-Customs, dated 1-3-2005, as amended. Insolvency & Bankruptcy 2023 (9) TMI 1293 CIRP - Transfer of property under auction - status of charge created on the property - Right and liability of the purchaser of property - whether once the property was sold by the liquidator in the public auction and on as is where is basis , the secured creditor cannot be allowed to assert an entry for the asset once sold? - HELD THAT:- Claims were invited and the State during the process failed to substantiate it and at the stage of liquidation did not lodge its claim. In light of the judicial pronouncement above the debt therefore did not form a part of the resolution plan and therefore stood extinguished - Admittedly state tax dues and the State would be a claimant as an operational creditor. The claim lodged during insolvency process stood rejected and during the liquidation, no such claim was lodged. This fact is reiterated at the cost of repetition as this would lead thus to examine the provisions of Section 52 and 53 of the IBC. Reading Section 52 would indicate that a secured creditor in the liquidation proceedings may relinquish its security interest to the liquidation asset and receive proceeds on the sale of assets by the liquidation in the manner specified under section 53 or realise its security asset by enforcing its claim or settling it. In the facts of the present case having failed to assert its claim the State as an operational creditor/stakeholder/secured creditor would have to fall in line as per the waterfall mechanism under Section 53 of the IBC. Once having relinquished its interest under Section 52, the State cannot continue the insistence of maintaining the charge in the revenue records and its claim will have to stand in priority. The argument of the State that since the asset was sold on a condition of AS IS WHERE IS BASIS , the charge of the State was rightly recorded is misconceived as the deed already records that the purchaser shall not be liable for payment of any outstanding dues of the government. This too was, in the opinion of the Court a clause that would relieve the petitioner of the liability to pay tax dues - Even otherwise as per Section 100 of the Transfer of Property Act, a charge cannot be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of such charge. The State moved in to get a charge registered on 15.12.2022 much later. The order dated 05.01.2022 is set aside - Petition allowed. 2023 (9) TMI 1292 Admission of section 9 application - CIRP of Corporate Debtor initiated - it is contended that the Adjudicating Authority had failed to consider that nothing was due or payable by the Corporate Debtor to the Operational Creditor and that there was a pre-existing dispute subsisting between the two parties - HELD THAT:- The Adjudicating Authority has rightly observed after perusing the reply filed by the Corporate Debtor to the legal notice of 05.12.2019 as well as their reply to the demand notice dated 02.01.2020 that at no occasion the Corporate Debtor had raised complaints with regard to poor quality of goods with the Operational Creditor after issue of the two credit notes aggregating Rs.35,91,500/-. Neither any invoices have been furnished in support of their contention that the Corporate Debtor had supplied material to the Operational Creditor. There are no communication which has been placed on record by which the Corporate Debtor had sent any reminder to the Operational Creditor in respect of their outstanding payments. It has also been rightly observed that disputes surrounding claims and counter-claims cannot be adjudicated or determined by the Adjudicating Authority given their summary jurisdiction. The Adjudicating Authority in the present case has carefully considered the reply and submissions made by the Corporate Debtor and has correctly come to the conclusion that there is no ground to establish any real and substantial pre-existing dispute which can thwart the admission of section 9 application against the Corporate Debtor - there are no hesitation in observing that in the present case there is no real pre-existing disputes discernible from given facts and all other requisite conditions necessary to trigger CIRP under Section 9 stands fulfilled. The Adjudicating Authority has rightly admitted the application of the Operational Creditor filed under Section 9 of IBC - the impugned order does not warrant any interference - Appeal dismissed. 2023 (9) TMI 1291 Initiation of CIRP - NCLT rejected the application u/s 7 - Corporate Debtor admitted default in payment of debt - existence of dispute about debt or liability or not - HELD THAT:- There is no dispute regarding disbursal of Rs.3.20Crs. from the account of the Financial Creditor to the account of the Corporate Debtor. There is also no dispute that Application under Section 7 of IBC, 2016 was filed within limitation. The AA has erred in relying on the Joint Venture Agreement dated 04.03.2017, which was terminated by consent by both the parties on 29.04.2017 also noting therein that with this termination of MoU, none of the parties are bound by the terms and conditions of the MoU dated 04.03.2017. Even if it is assumed that payments have come under the Joint Venture, the subsequent two Agreements dated 29.04.2017 clearly establish that Joint Venture MoU was terminated, and fresh MoU for unsecured loan was executed and that it was mutually agreed by Corporate Debtor and Financial Creditor that they will not be bound by the Joint Venture MoU. The amounts paid by the Financial Creditor to the Corporate Debtor took the character of loan from Financial Creditor to Corporate Debtor. The Corporate Debtor had accepted before the AA that it is not in a position to repay `debt because of financial distress. The AA ought to have admitted the Application of the Appellant under Section 7 of the IBC, 2016 as there is no dispute about the `debt or liability of the Corporate Debtor and the Corporate Debtor has admitted that it is defaulting in repayment of `debt due to its financial condition. Matter remanded back to the AA for consideration of the Application of Financial Creditor under Section 7 of the IBC, 2016 - appeal allowed. 2023 (9) TMI 1290 Legality of forfeiture of EMD deposited by the Respondent - failure to pay the balance 75% of sale consideration till 15.08.2020 which was the date stipulated for full payment in the EOI. Whether the parties are bound by the terms and conditions fixed by the Appellant in the EOI dated 08.07.2020 or the Appellant was required to follow the terms and conditions of Clause 12 of Schedule 1 of the Regulations which was amended on 25.07.2019? HELD THAT:- The very fact that the circular dated 26.08.2019 has already been withdrawn and that the amendment dated 25.07.2019 was in vogue as on 08.07.2020, it was incumbent upon the Appellant to have followed the provisions of Regulation 33 much less Schedule 1 (Clause 12) of the Regulations which has not been followed and the terms and conditions have been provided by the Appellant on its own in the EOI overlooking the terms and conditions as envisage in Schedule 1. The action of the Appellant is totally unsustainable, therefore, there are no error in the order under challenge in which all the factors of this case have been thoroughly appreciated. In the end, Counsel for the Appellant requested that the component of interest which has ordered to be paid with EMD which has been forfeited would cause extra burden on the Appellant but at the same time, it is also submitted that the amount of EMD is lying deposited in Bank on which the interest is accruing. In such circumstances, there are no merit in this argument as well. There are no merit in the appeal and the same is hereby dismissed. 2023 (9) TMI 1289 CIRP - Maintainability of application u/s 7 r.w.s. 10A - default in repayment of term loan - applicability of time limitation - date of default - it is claimed that original Loan Agreement,has not to be looked into for default and default which is the basis of Section 7 Application is the default under OTR Agreement, which default took place on 31.03.2022 - HELD THAT:- Section 7 Application, thus, has been filed on the basis of default committed by the Corporate Debtor on 31.03.2022 as per OTR Agreement. Section 7 Application is thus based on event of default as per Clause 8.1 of the OTR Agreement and date of default has been clearly mentioned as 31.03.2022 under the OTR Agreement. It is also to be noted that date of NPA has been mentioned as 29.12.2020 as per Clause 48 of the Circular of the RBI dated 06.08.2020. Section 10A makes it clear that no Application shall ever be filed for initiation of Corporate Insolvency Resolution Process ( CIRP ) if the default occurred during the Section 10A period. What is prohibited was initiation of proceeding under Section 7, 9 and 10 for any default committed by the Corporate Debtor pre 10A period. When we look into Section 7 Application filed by the Corporate Debtor, the Application is not filed on a default under 10A period, rather it was filed on event of default, which has occurred under the One Time Restructuring Agreement dated 21.05.2021, which default occurred on 31.03.2022, when the Corporate Debtor failed to pay interest installments as well as principal installments, which were due by that time. In the present case, there was default committed before implementation of the Plan, as NPA was declared on 29.12.2020. Hence, in the present case, asset classification of the borrower has to be treated to be downgraded with effect from 29.12.2020. Clause 48, is thus only to be read with regard to downgrading to NPA for the relevant date and this Clause 48 is not relevant to find out event of default, which occurred under the One Time Restructuring Agreement and which is foundation of Section 7 Application. The event of default under the One Time Restructuring Agreement, which contained in Clause 8.1 as extracted above and by virtue of Claude 8.2, which contains heading Consequences in event of default , the lenders in its own discretion can exercise or pursue any other legal remedy or right provided in any other applicable law. Thus, when event of default under the One Time Restructuring Agreement happens, the said event of default shall form foundation of any legal action - by the One Time Restructuring Agreement an amount of Rs.51.71 Crores was granted as Fresh Funded Interest of the Term Loan, which was disbursed to the Corporate Debtor and default with regard to the said amount can be committed only when there is a default in repayment of FITL disbursement. The learned Senior Counsel for the Appellant has relied on the judgment of the Hon ble Supreme Court in Rakesh Kymal vs. Siemens Games Renewable Power Pvt. Ltd [ 2021 (2) TMI 394 - SUPREME COURT] , in which case the Hon ble Apex Court had occasion to consider Section 10A - In the above case an Application under Section 9 was filed on 11.05.2020 whereas an Ordinance No.09/2020 was Promulgated by the President of India from 05.06.2020, by which Section 10A was inserted in the Code. It was contended that the Application was filed prior to Ordinance when Section 10A was brought into force, which argument was rejected. The ratio of the judgment is well settled that with regard to a default committed under Section 10A, no Application can ever be filed for the said default. Thus, what is prohibited is initiation of proceedings for any default committed during 10A period. In the present case, Application under Section 7 was not filed for default committed during 10A period, rather the Application was specifically filed for default committed under the OTR Agreement, which is committed on 31.03.2022, which was much subsequent to 10A period. The mentioning of date 29.12.2020 as NPA in Section 7 Application was on account of Clause 48 of the RBI Circular dated 06.08.2020, which downgraded the Corporate Debtor in event of any default committed under One Time Restructuring Agreement. By mentioning NAP date, i.e., 29.12.12020, which was in obedience of the Clause 48, no benefit can be made by the Appellant by contending that Application was filed for default during the 10A period. The Application under Section 7 of the Code filed by the Central Bank of India was not for any default committed during 10A period, rather the Application was filed for default committed on 31.03.2022 under the One Time Restructuring Agreement dated 21.05.2021 and the event of default under One Time Restructuring Agreement happened only on 31.03.2022, giving right to the Financial Creditor to take recourse of Section 7 Application, which was rightly done in the facts of the present case - no error has been committed by the Adjudicating Authority, admitting Section 7 Application. Appeal dismissed. Service Tax 2023 (9) TMI 1288 Levy of Service tax on additional service provided - mounting of printed material or board - HELD THAT:- The Tribunal s end conclusion does not suffer from any infirmity. However, while recording the finding, the Tribunal just omitted to mention couple of lines regarding the admitted case that the respondent had been paying service tax on any additional service provided regarding mounting of printed material or boards on which they had paid service tax, no further consideration would have been required. There are no infirmity in the final order of the Tribunal - appeal dismissed. 2023 (9) TMI 1287 Eligibility to claim benefit of SVDRS - Valuation under SVLDR Scheme - quantification of the demand on/or before 30th June, 2019, being the cut-off date specified in the SVLDR Scheme - HELD THAT:- Clause (e) of Section 125(1) of the SVLDR Scheme provides for disqualification of a person who has been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has been quantified on/or before 30th June, 2019. In the present case, the Petitioner was subjected to audit vide letter dated 10th July, 2018 issued by Respondent No. 4. However, the amount of duty involved in the said audit was not quantified on/or before 30th June, 2019. There is no quantification of duty by the Petitioner in the letter dated 27th May, 2019. This is fortified by a letter dated 24th October, 2019 addressed by the Additional Commissioner to the Petitioner wherein there is further reference to letter dated 3rd October, 2019 and it is stated that the Petitioner has not agreed to the payment of tax/duty along with interest and penalty. These two letters of 3rd October, 2019 and 24th October, 2019 are addressed much after the cutoff date of 30th June, 2019. The quantification of duty happened only on the issuance of the show cause notice dated 14th January, 2020 which also falls after the cut-off date of 30th June, 2019. The Petitioner was thus disqualified as per clause (e) of Section 125(1) of SVLDR Scheme to make a declaration since in the Petitioner s case there has not been a quantification before the cut-off date. Section 121(r) defines quantified to mean a written communication of the amount of duty payable under the indirect tax enactment. In the instant case, the letter of the Petitioner dated 27th May, 2019 cannot be read to mean a communication of the amount of duty payable since there is no such statement in the said letter or its annexure. Bombay High Court in the case of Thought Blurb V/s. Union of India [ 2020 (10) TMI 1135 - BOMBAY HIGH COURT] on the issue of opportunity of being heard. In the said case inspite of there being quantification of demand, the declaration under SVLDR Scheme was rejected without giving an opportunity of hearing. It was on these facts that the High Court observed that summary rejection of an application without affording any opportunity of hearing would be in violation of the principles of natural justice. The facts of the Petitioner before us are different. There is no quantification at all before the cut-off date and therefore even if an opportunity of hearing was given to the Petitioner, it would not have made any difference as to the eligibility under the SVLDR Scheme - It is settled position that a decision has to be read in the context of facts of that case and one cannot read the same dehors the facts. Therefore, for more than one reason the decision in the case of Thought Blurb is not applicable. SVLDR Scheme is a scheme aimed at liquidating legacy cases locked up in litigation at various forums. However, it does mean that the scheme should be interpreted in a way to make a disqualified person qualified to avail the benefits of the scheme, though such a scheme is in public interest inasmuch as the government can collect taxes immediately, pendency in courts gets reduced and the assessee gets relieved from uncertainty, penalties, etc. The entry into the scheme is to be interpreted strictly without doing any violence to the scheme. Any other interpretation in the garb of beneficial legislation would amount to giving the benefit of the scheme to those who are expressly not qualified. Petition dismissed. 2023 (9) TMI 1286 Validity of SCN - Details called by petitioner not furnished - Invocation of extended period of limitation - HELD THAT:- The respondent was duty bound to inform the petitioner about the fate of Order in Appeal No.63 of 2010 (M-ST) dated 26.03.2010 as to whether the said order was appealed before the appellate Tribunal and whether the order of the Appellate Commissioner in Order in Appeal No.63 of 2010 (M-ST) dated 26.03.2010 which remanded back to the original authority was disturbed or not. The impugned order appears has to be passed in a hurried manner without furnishing the details called for by the petitioner, as is evident from reading of the impugned order. This Court is of the view that the impugned Order in Original was passed in hurried manner without furnishing the details to the petitioner and without hearing the petitioner. Considering the above, the impugned order is set aside and the matter is remanded back to the respondent/Additional Commissioner herein to pass fresh orders on merits, after hearing the petitioner within a period of three months from the date of receipt of a copy of this Order. Petition allowed by way of remand. 2023 (9) TMI 1285 SCN issued by invoking extended period of limitation - time limitation - levy of service tax on renting immovable property came into effect by way of amendment in the Finance Act, 2010 retrospectively w.e.f. 01.06.2007 - HELD THAT:- The facts are not in dispute that the appellant is providing renting immovable property service w.e.f. 01.06.2007 and at that time, the wires of levy of service tax was challenged before the Hon ble Delhi High Court and it was held that the levy of service tax under renting of immovable property is ultra vires. Thereafter, by way of Section 77 of the Finance Act, 2010, the amendment was brought in and the levy of service tax became on renting of immovable property and came retrospectively w.e.f. 01.06.2007. In that circumstances, the show-cause notice issued to the appellant by invoking extended period limitation is not sustainable as held by this Tribunal in the case of JINDAL VEGETABLE PRODUCTS LTD. VERSUS CCE [ 2013 (3) TMI 56 - CESTAT, NEW DELHI] . The show-cause notice issued to the appellant is barred by limitation as the same has been issued by extended period of limitation. Therefore, no demand is sustainable against the appellant - Appeal allowed. 2023 (9) TMI 1284 Levy of Service Tax - Management, Maintenance or Repair Service - amounts collected by the Appellant towards electricity, diesel charges for DG sets, water and parking charges - non-inclusion of parking charges in the value of taxable services - HELD THAT:- Having regard to the Order passed by this Tribunal in the case of VITP Pvt Ltd [ 2022 (7) TMI 1030 - CESTAT HYDERABAD] , wherein the reliance has also been placed on Hon ble Supreme Court s judgment in the case of Intercontinental Consultants Technocrats Ltd [ 2018 (3) TMI 357 - SUPREME COURT] , as also factual matrix brought out in the SCNs as well as in the OIOs, the amount collected towards water, electricity and diesel are in the nature of reimbursable expenses and therefore, not liable for inclusion in the taxable value towards provision of Management, Maintenance or Repair services by the Appellant. There is nothing in the SCNs or impugned orders, which states that they have been collecting anything over and above the amount incurred towards payment of electricity bill and water bill or diesel consumption or that there was any profit involved therein - The fact that the reimbursable expenses, have been specifically brought under the coverage of gross value w.e.f. 14.05.2015, further supports the Appellant s argument that the amounts collected on reimbursable basis were not liable for inclusion before that. In fact they have stated that in their own case itself for the subsequent period, Commissioner (Appeals) has also set aside the demand for the period 01.10.2014 to 14.05.2015 on diesel charges . Thus, the demand on these three charges viz., electricity, water and diesel cannot sustain - for parking charges, the amount collected also needs to be included in the gross value in Management, Maintenance or Repair services - appeal allowed in part. 2023 (9) TMI 1283 Levy of service tax - Renting of immovable property service - Amount relatable to Copy Right Services - Amount already paid and not adjusted - Short Claim of Property Tax - Amount already paid but not adjusted - HELD THAT:- There was no service tax demand on 'Copy Right Service'. Copy Rights Service as defined under Section 65(zzzzt) of the Finance Act 1994, specifically excludes the right covered under sub-clause(a) of clause(1) of Section 13 of the said Act, which deals with copy rights related to 'Original literary, dramatic, musical and artistic works' - it is found that the Copy Rights service rendered by the Appellant are related to 'Original Artistic Works' which are excluded from payment of service tax. Accordingly, the demand of service tax amounting to Rs.8,41,684/- is not sustainable. Even otherwise, there was no demand of service tax under the category of 'Copy Right Service' in the Notice. Hence, the demand of service tax of Rs.8,41,684/- confirmed in the impugned order is not sustainable on this count also. Regarding the remaining demand confirmed in the impugned order, the Appellant stated that as per the direction of the Hon'ble Supreme Court, the Lessees paid Rs.1,91,121/- which has not been taken into account by the adjudicating authority. They further stated that the adjudicating authority has excluded Property Tax amounting to Rs.56,83,647/-. However, actual property tax paid was Rs. 57,66,009/- Thus, an additional amount of Rs 82,362/- has also to be excluded on account of property tax. They also stated that there was a short adjustment of Rs.40,087/-paid by them which has not been appropriated - the claim of the Appellant on these counts needs to be verified by the adjudicating authority. For that purpose, the matter needs to be remanded back to the adjudicating authority. Appeal allowed by way of remand. 2023 (9) TMI 1282 Classification of services - cargo handling services or Goods transport agency services? - bundled services or not - demand computed on the basis of TDS Certificates in form 26AS issued by the Income tax department - Board Circular No. 104/07/2008-S.T. dated 6-8-2008 - extended period of limitation - suppression of facts or not - HELD THAT:- During the period April 2012 to December 2014, the appellant was engaged by M/s. SSTAPL as a subcontractor to provide transportation service to M/s. JSL and for the period January 2015 to March 2017, the Appellant started providing Goods transport agency services directly to M/s. JSL. During both the periods, M/s JSL has paid service tax under GTA service as recipient of service. The contention of the department is that service tax is liable to be paid under 'Cargo handling service' by the Appellant and not by M/s JSL under GTA service. Thus, the Work Orders received by the Appellant from M/s SSTAPL and M/s JSL has to be analysed separately to determine the nature of the service rendered by the Appellant during these periods. After successful completion of the job and necessary certification by M/s. JSL, the Appellant raised invoices on M/s. SSTAPL for Transportation and Unloading of Coal from Sukinda Railway Siding to JSL, KNIC . The Appellant did not issue any 'Consignment Note' in the name of the consignee M/s. JSL. After loading of the goods into the Rakes, 'Consignment notes' were issued by M/s SSATPL to M/s. JSL, the consignee. Service tax as applicable was duly discharged under reverse charge by M/s. JSL on the GTA Service. It is evident from the clauses in each of the Work order issued to the Appellant by SSTAPL that the services fall under the category of Goods transportation and not Cargo handling service. However, since the consignment note in the present case has been issued by SSTAPL on JSL and not the Appellant, the said service qualifies as services of transportation falling under the negative list entry Section 66D(p) services by way of transportation of goods (i) by road except the services of (A) a goods transportation agency . The said service rendered by the Appellant to SSTAPL duly qualifies under the negative list and lies outside the ambit of Service tax. Accordingly, appropriate service tax in this case has been rightly paid by the consignee under GTA service as recipient of service. Hence the demand raised on the Appellant under 'Cargo handling service' during the period April 2012 to December 2014 is not sustainable. The service provided by the Appellant during the period January 2015 to March 2017, directly to M/s. JSL w.e.f. January, 2015, was GTA service and not 'Cargo Handling service'. Accordingly, the Appellant is not liable to pay service tax under the category of 'Cargo handling service' and service tax on the said GTA service has been rightly paid by the recipient M/s. JSL. Hence, the demand confirmed against the Appellant for this period is not sustainable. Extended period of limitation - Suppression of facts or not - HELD THAT:- It is a settled position of law that the authorities subsequently cannot adopt a different view once a view has already been accepted during the audit proceedings. Thus, there is no suppression of fact involved in this case and hence the demand confirmed by invoking extended period of limitation is not sustainable - the demand confirmed in the impugned order is liable to be set aside on the ground of limitation also. The service rendered by the Appellant to M/s SSTAPL as a sub-contractor as well as M/s JSL directly, was transportation of goods service and not cargo handling service - the demand confirmed in the impugned order under 'cargo handling service' set aside on merit as well as on limitation - appeal allowed. 2023 (9) TMI 1281 Exemption from Service Tax - Construction of Complex service for the service related to construction of houses under Jawaharlal Nehru National Urban Renewal Mission (JnNURM for short) and for Safai Kamdar to Ahmedabad Municipal Corporation - HELD THAT:- In the present appeal the fact is not under dispute that the construction of Complex is made for JnNURM scheme and construction of houses for Safai Kamdar for the Ahmedabad Municipal Corporation. In these facts, the houses are made under a particular scheme for the poor people for residential purpose and not for other commercial activity. The construction activity under the same JnNURM scheme, this Tribunal on same issue in the case of MS KHURANA ENGINEERING LIMITED VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [ 2022 (12) TMI 1053 - CESTAT AHMEDABAD ] where it was held that In the present case, the quarters/residential complexes were got constructed by the AMC and AUDA for urban poor people for their residential use, the same amounts to personal use‟. The confirmation of demand qua these services by the Commissioner is therefore not sustainable. Thus, the construction of Complex under the same scheme has been considered by this Tribunal and viewed that such construction of Complex is not liable to service tax. Therefore, following the above decision of this Tribunal, in the present case also the impugned order is not sustainable hence the same is set-aside. Appeal allowed. Central Excise 2023 (9) TMI 1280 Adjudication of SCN - HELD THAT:- The SLP disposed holding that Considering the fact that both the show cause notices - one dated 1-3-2016 issue by the Directorate General of Central Excise Intelligence, Delhi Zonal Unit and the subsequent show cause notice dated 23-10-2017 issued by the Commissioner, Central Goods and Services Tax Commissionerate, Alwar were on the same subject-matter, the High Court is justified in passing the impugned judgment and order and directing that both the notices to be adjudicated and heard together by one authority. The present special leave petition is disposed of. 2023 (9) TMI 1279 Levy of Excise Duty - Process amounting to manufacture or not - addition or blending of Multi-Functional Additives with Motor Spirit (MS) and duty paid High Speed Diesel (HSD) - HELD THAT:- The Tribunal had followed its previous rulings as well as this Court s judgments on such issue, which had broadly held that unless the essential characteristic of the article of emerging product changed, the mere blending or addition of something in such articles leading to negligible or inconsequential changes, would not result in manufacture of or the emergence of a new product, as long as its usage remains the same. It is also a matter of record that the product emerging after blending confirms to the same specifications as in the case of old one. It is also pointed out that this issue has been decided against the revenue recently in Commissioner of Trade Tax v. M/s. Kumar Paints and Mill Stores Through its Proprietor [ 2023 (3) TMI 943 - SUPREME COURT ]. This Court is of the opinion that the appeals have to fail - Appeal dismissed. 2023 (9) TMI 1278 Valuation of physician samples - replica of dutiable goods are removed from factory for free distribution to medical practitioners with the cost thereof implicitly included in the valuation of the goods or not - HELD THAT:- The findings are not tenable for its lack of clarity on the transactions that were sought to be brought within the tax net. It also cannot be seen how goods cleared to principal manufacturer from raw materials supplied by them can take recourse to rule 4 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000, as held by the first appellate authority, when rule 8 is specific to such a situation. It would also appear to us that rule 4 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000 is applicable when, as held in CADILA PHARMACEUTICALS LTD. VERSUS COMMR. OF C. EX., AHMEDABAD-II [ 2008 (9) TMI 98 - CESTAT AHEMDABAD] , no sale occurs at the time of removal warranting recourse to price at which goods are sold at the nearest time of removal. The facts and circumstances of each removal and the nature of the transaction with the recipient of such clearances will determine the specific provision in Central Excise (Determination of Price of Excisable Goods) Rules, 2000 that must be applied. It would be in the fitness of things for such detailed scrutiny to be undertaken by the original authority. The impugned order is modified and the terms of remand to the original authority altered accordingly. 2023 (9) TMI 1277 CENVAT Credit - iron ore pellets purchased by the appellant - availment of cenvat credit on the iron ore pellets and utilization of such credit for payment of duty on its final product - HELD THAT:- Although the appellant has taken cenvat credit on iron ore pellets, it has been held that the product of iron ore pellets is exempted from payment of duty and the said goods were used by the appellant for manufacturing process and the manufactured goods have been sold on payment of duty . Therefore, the demand of duty on such iron ore pellets shall be demanded reversal of cenvat credit as held by this Tribunal in the case of AJINKYA ENTERPRISES VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III [ 2013 (6) TMI 610 - CESTAT MUMBAI] , which has been affirmed by the Hon ble Bombay High Court in THE COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS AJINKYA ENTERPRISES [ 2012 (7) TMI 141 - BOMBAY HIGH COURT] , wherein the Hon ble High Court of Bombay has held in the present case, the assessment on decoiled HR/CR coils cleared from the factory of the assessee on payment of duty has neither been reversed nor it is held that the assessee is entitled to refund of duty paid at the time of clearing the decoiled HR/CR coils. Further, the supplier of the goods has paid the duty on iron ore pellets and the same has been accepted by the respondent, therefore, being a manufacturer of excisable goods, the appellant is entitled to cenvat credit of duty paid by the appellant and it has not been questioned to the supplier of the goods that the product is exempted from payment of duty and the Revenue has accepted the duty payment. In that circumstances, the appellant is entitled to take cenvat credit as held by the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE CUSTOMS VERSUS MDS SWITCHGEAR LTD. [ 2008 (8) TMI 37 - SUPREME COURT] . The appellant has correctly taken the cenvat credit - the impugned order is not sustainable on the eyes of law and the same is set aside - Appeal allowed. CST, VAT & Sales Tax 2023 (9) TMI 1276 Seeking refund of the amount paid in excess in view of the TDS deducted from the State bills of the petitioner and paid to the State Government - rejected in view of non-passing of the order of assessment orders for the assessment years 2010-11 to 2015-16, within the provisions of Section 29 of the Tripura Value Added Tax Act, 2004 - HELD THAT:- The impugned order dated 31-8-2021 is hereby set aside. The case for the assessment year of 2010-11 to 2015-16 under the Tripura Value Added Tax Act, 2004 is remanded back to the Respondent No. 3 for passing the order under Sections 29 and 43 of the Tripura Value Added Tax Act, 2004 after giving the petitioner a reasonable opportunity of being heard. Petition disposed off. Indian Laws 2023 (9) TMI 1332 Direction to respondents to pay his due gratuity along with interest - Offence involving moral turpitude - It is the contention of the petitioner that the Deputy Chief Labour Commissioner failed to appreciate the scope of Section 4(6) of the Payment of Gratuity Act, 1972 and that payment of gratuity is not a gesture of charity, rather is a recognized statutory right to be provided in favour of the employee - HELD THAT:- Section 4(6) of the Payment of Gratuity Act, 1972 specifically states termination as a pre-requisite condition for forfeiture of gratuity in all cases, including the present allegation of offence involving moral turpitude . The Supreme Court in Jorsingh Govind Vanjari Vs. Divisional Controller, Maharashtra State Road Transport Corporation, Jalgaon Division, Jalgaon, [ 2016 (12) TMI 1905 - SUPREME COURT ] stated that termination of service was an essential pre-requisite for denial of gratuity. The co-ordinate bench of this High Court in Steel Authority of India Ltd. Anr. Vs. Taraknath Sengupta Ors.,[ 2009 (4) TMI 1057 - CALCUTTA HIGH COURT ], affirmed the right of an employee to receive payment of gratuity and postulated the need for termination as a requisite for invoking Section 4(6) of the Payment of Gratuity Act, 1972. Payment of gratuity is not charity, rather is a statutory right recognized by the Payment of Gratuity Act, 1972 - Section 4(6) of the Payment of Gratuity Act, 1972 stipulates specific conditions where the employer may forfeit gratuity. Through the aforementioned judgements, specifically, Jorsingh Govind Vanjari Vs. Divisional Controller, Maharashtra State Road Transport Corporation, Jalgaon Division, Jalgaon, alleged misconduct of the employee as per the report of the domestic inquiry is not enough to constitute an offence involving moral turpitude , rather termination of services on account of the alleged misconduct, which constitutes an offence involving moral turpitude is essential for forfeiture of payment of gratuity. Petition allowed. 2023 (9) TMI 1275 Execution of the Will in favour of the Plaintiffs - Will being a forged document or not? - whether there are sufficient grounds that warrant interference with the concurrent findings of the fact, upholding validity of a Will? - Second marriage and bigamy - HELD THAT:- A Will is an instrument of testamentary disposition of property. It is a legally acknowledged mode of bequeathing a testator s property during his lifetime to be acted upon on his/her death and carries with it an element of sanctity. It speaks from the death of the testator. Since the testator/testatrix, at the time of testing the document for its validity, would not be available for deposing as to the circumstances in which the Will came to be executed, stringent requisites for the proof thereof have been statutorily enjoined to rule out the possibility of any manipulation. Coming to the facts of the case, a careful perusal of the relevant material on record and applying the provisions and the case laws it is evident that the Will was duly executed by the testator in the presence of witnesses out of his free Will in a sound disposing state of mind and the same stands proven through the testimony of one of the attesting witnesses, namely, Suraj Bahadur Limboo who was examined as PW2 by the Civil Court. This witness categorically states that the testator executed the Will in question and, both he and the testator signed the Will in the presence of each other. There is no evidence on record to conclude that the deceased was not in a fit or stable mental condition at the time of execution of a Will, or that a Will was executed under suspicious circumstances, or the presence of any element of undue influence - both the courts below have rightly noted that the relevant provisions were complied with, and given the well reasoned order upholding the validity of the Will, the same does not warrant interference of this court. Second marriage and bigamy - HELD THAT:- Such submissions are not entertained as the same is not a relevant factor in deciding the main lis, which is confined to the validity of the Will. Since the validity of the Will stands proven according to settled principles of law, consequential benefits be disbursed accordingly - appeal dismissed.
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