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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter September 6, 2023 Case Laws in this Newsletter: GST Income Tax Benami Property Customs Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles ITC would be denied on non-payment of tax by supplier RECENT DEVELOPMENTS IN GST Order to cancel GST registration without specifying reason is not sustainable Entire disputed amount required to be deposited before opting writ remedy News 6.84 crore ITRs verified out of 6.98 crore ITRs filed for AY 2023-24 with over 88% of verified ITRs processed as on 5th Sept. 2023 Keynote Address by Shri Shaktikanta Das, Governor, RBI at the G20 TechSprint Finale organised by Reserve Bank of India and Bank for International Settlements (BIS). Mumbai, September 4, 2023 Notifications Central Excise 02/2023 - dated 4-9-2023 - CE (NT) Territorial Jurisdiction of Commissionerate - Seeks to amend Notification No. 13/2017-Central Excise (N.T.), dated the 9th June, 2017 Customs 52/2023 - dated 5-9-2023 - Cus Effective rates of customs duty and IGST for goods imported into India - entries substituted for goods (other than old and used) for use in the textile industry - Notification No. 50/2017-Customs, dated the 30th June, 2017 amended. GST - States 43/GST-2 - dated 29-8-2023 - Haryana SGST Notification under section 148 to notify special procedure to be followed by a registered person pursuant to the directions of the Hon'ble Supreme Court in the case of Union of India v/s Filco Trade Centre Pvt. Ltd., SLP(C) No.32709-32710/2018 under the HGST Act, 2017 ERTS(T)65/2017/Pt.III/Vol.I/469 - dated 26-7-2023 - Meghalaya SGST Amendment in Notification No. ERTS(T)65/2017/471, dated the 31st December, 2018 ERTS(T)65/2017/Pt.III/Vol.I/467 - dated 26-7-2023 - Meghalaya SGST Amendment in Notification No. ERTS(T) 65/2017/13, dated 29th June, 2017 ERTS(T)65/2017/Pt.III/Vol.I/466 - dated 26-7-2023 - Meghalaya SGST Amendment in Notification No. ERTS(T)65/2017/12, dated 29th June, 2017 Money Laundering G.S.R. 652 (E) - dated 4-9-2023 - PMLA Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2023 Circulars / Instructions / Orders SEBI SEBI/HO/DDHS/DDHS-POD2/P/CIR/2023/151 - dated 4-9-2023 Mechanism for Sharing of Information by Credit Rating Agencies (CRAs) to Debenture Trustees (DTs) IBC IBBI/CIRP/60/2023 - dated 1-9-2023 Filing of CIRP Forms for the purpose of monitoring corporate insolvency resolution processes and performance of insolvency professional entities under the Insolvency and Bankruptcy Code, 2016 and the regulations made thereunder Highlights / Catch Notes GST Intermediary services or not - Export of services - Denial of refund of unutilized input tax credit - zero rated supplies - In the present case, although the agreement does use the word ‘agent’ but is clear that the petitioner is not acting as an agent for procurement of services for the service recipient. It is, in fact, providing the principal service of “Bookkeeping, Payroll, and accounts, through the use of cloud technology”. - Refund allowed - HC Visit to Get Source Validity of adjudication order confirming demand of GST with interest and penalty - Cryptic SCN - validity of Audit Observations - It is noticed rightly that the petitioner's reply has adverted to only certain aspects and not to the entirety of the observations made in the Audit Report and accordingly, the contention of the petitioner that Show Cause Notice by itself does not contain all the grounds, requires acceptance, in the facts of the present case. - Matter restored back - HC Visit to Get Source Income Tax Condonation of delay in filing appeal before the Tribunal - delay of 1529 days - Petitioner submitted that a lenient view may be taken, since the appellant is being officiated by official liquidator and further, the appellant has very good case on merits - Delay condoned subject to cost of Rs. 15,000 - HC Visit to Get Source Revision u/s 264 - Exclusion of income declared under Income Declaration Scheme, 2016 ("IDS") - Petitioner having paid the tax and surcharge and the penalty with interest, amount of undisclosed income cannot be included in the income of the declarant/petitioner. Therefore, in our view, Commissioner should have exercised his power u/s 264 of the Act and decide the matter on merits. - HC Visit to Get Source Right of “legal representative” of the deceased assessee - Section 2(29) r.w.s 159 - Legislature has prescribed specific conditions for an applicant that he or she represents the estate of the deceased person; as the case may be we thus conclude that since the appellant has failed to satisfy the above clinching criterion his instant petition seeking his impleadment as the “legal representative” fails - AT Visit to Get Source Penalty u/s 271(1)(c) - There is no conclusive proof that the assessee has PE in India. In the penalty proceedings the AO simply relied on the MAP proceedings in holding that the assessee has PE in India which in fact is not correct. - there is no concealment of income or furnishing inaccurate particulars of such income by the assessee - No penalty - AT Visit to Get Source Applicability of higher rate of tax as per section 115BBE - income declared during the course of survey proceedings - Admittedly, the assessee had offered such additional income under the head “income from business” and the Assessing Officer also assessed the same under the head “income from business”. Thus, it cannot be said that the source for additional income remains unexplained. - provisions of section 115BBE have no application - AT Visit to Get Source Addition u/s 69 - Unexplained investment or not - only when the investment is not recorded in the books of accounts or the explanation by the assessee regarding the nature and source of the investment is found to be not satisfactory, the value of the investment can be treated as an unexplained investment u/s 69 - However, in the present case, no such allegation has been raised by the Revenue. - AT Visit to Get Source Revision u/s 263 - Failure of AO levy tax u/s 115BE for the additions made u/s 68 - AO having made addition u/s 68 of the Act, taxing it at the rate prescribed u/s 155BBE of the Act was a natural corollary. Admittedly the law itself prescribes a special rate of tax for additions made u/s 68, 69, 69A/B/C of the Act u/s 115BBE of the Act. - The order of the ld. PCIT finding the assessment order erroneous causing prejudice to the Revenue, sustained - AT Visit to Get Source Order u/s. 201 (1) r.w.s. 201(1A) - Non deduction of TDS - payees concerned have offered the same to tax and therefore, they duly stand assessed - Rejecting the contentions of the assessee, demand of TDS with interest confirmed - AT Visit to Get Source TP Adjustment - Determination of ALP - The Appellant had acquired shares from the promoter (i.e. Viney Sagar Sahgal) by triggering call option in terms of Shareholders Agreement. There is nothing on record to show that the exercise of call option had no impact on the determination of sale price. - ‘Other Method’ be adopted as the most appropriate method - AT Visit to Get Source Search proceedings - Addition based on loose sheets found - presumption u/s 1324A and 292C cannot be drawn against third party from whose possession, no documents etc. found and seized and therefore in our considered view, such party is not under obligation to rebut the presumption. - The loose papers, on which entries of amounts are depicted, can not be used without corroborating evidences - AT Visit to Get Source Customs Refund of excess duty paid - time barred or not - Section 27 of the Customs Act clearly requires that any person claiming refund of any duty is to make an application in the form or manner as may be prescribed before the expiry of one year from the date of payment of such duty or interest. - it is clear that the Petitioner has been negligent in pursuing its statutory remedies and now is seeking the indulgence of this Court in its writ jurisdiction which we are not inclined to exercise - HC Visit to Get Source Seeking release of seized gold - smuggling - Since, the transit challan records did not match with the recovered purchase invoices it is clear that the transit challan too were fabricated, and presented subsequently, like various other documents and submitted as an afterthought perhaps to even mislead the judiciary; besides being a failed attempt to justify transportation of the smuggled goods. - order of confiscation sustained - AT Visit to Get Source Classification of imported goods - Imaging Plates - Imaging Cassettes - In view the earlier decision and board clarification, the classification adopted by the appellant under CTH 90229090 is to be sustained. The re-determination of classification under CTH 370110 is set aside. - AT Visit to Get Source Levy of penalty u/s 112 of CA - Allegation against the employees of ICICI Bank - Forged letters - issuance of project implementation authority certificate - The roles of the appellants would need to be evaluated within the rubric of the altered narrative and it could well be that the impugned order, in such circumstances, lacks detail that may be necessary to decide the present appeals. - Matter restored back - AT Visit to Get Source Direct Taxes Benami transaction - source of carrying huge cash - The fact of the matter is that, here is the petitioner who is found to possess unexplained cash which he tries to explain through conflicting versions. Whether a person Sultan Foumi exists itself now comes under the scanner, since the response of the petitioner to the notice under Sec.24(1) of the Act seems to suggest something different. Could Sultan Foumi be a fictitious character? It is for the petitioner to explain. - Petition dismissed - HC Visit to Get Source Indian Laws Constitutionality of transfer notification - Transfer of Joint Commissioner of state tax - There is no material on record to infer that there is any motive of the government in transferring the petitioner from Parwanoo to Shimla. Mere fact that the official respondents have passed orders four times to transfer petitioner within a span of last seven years is not sufficient to infer any motive of the employer in doing so, much less a motive which can be termed as oblique or ulterior. - HC Visit to Get Source PMLA Money Laundering - seeking grant of bail - Petitioner fails to furnish prima facie satisfactory explanation regarding huge fixed assets and cash available with him, while recording his statement under section 50(3) of the Act, where it appears to investigating agency that petitioner is not co-operating during investigation, where investigation regarding remaining proceeds of crime is still going on. - Petition dismissed - HC Visit to Get Source Money Laundering - scheduled offence - proceeds of crime - There is a distinct difference in the reason to believe appearing in Section 17 and the reason to believe in respect of Section 5 - the impugned order is without jurisdiction there being no scheduled offence against the petitioners, it is not necessary to delve into the question as to what would be the impact of not passing an order under sub- section (2) of Section 20 of PMLA on the PMLA proceedings. - HC Visit to Get Source Central Excise SSI Exemption - clubbing of clearances - dummy units with slipping partners - The department has failed to establish the allegations raised in SCN for clubbing of clearances of the 11 firms. Further, the creation of a fictitious/deemed group (GTP) to be responsible for clandestine activities also does not find favor with us. - AT Visit to Get Source Refund claim alongwith interest - duty paid under protest - unjust enrichment - As from the facts itself, it is clear that the appellants were not required to pay any duty on the goods cleared to BSED and not collected any duty from BSED. Moreover, the duty has been paid by the appellants themselves, we hold that the appellants have passed the bar of unjust enrichment. - Refund allowed - AT Visit to Get Source Case Laws: GST 2023 (9) TMI 231 Rejection of grant of bail - evasion of tax - wrongful availment and passing of ITC - Sub Clauses (b) (c) of Sub-Section 1 of Section 132 of GST Act - HELD THAT:- Investigation qua the petitioner is complete. Petitioner is thus not required for custodial interrogation. Allegations against the petitioner are matter of trial. There are 64 prosecution witnesses. Matter is now fixed for 06.09.2023 for pre-charge evidence of complainant. Commencement/conclusion of trial will take some time. Bail allows an accused to maintain his freedom until his guilt or innocence is determined. Whereas, petitioner remained in custody with effect from 30.10.2020 to 25.05.2021, per custody certificate. He however, admits that no other case is pending against him. Petitioner is stated to be 45-year old family person, and in his absence, his family members are living in sheer penury. He is only breadwinner of his family. He has already lost his livelihood due to prolonged incarceration. Having clean antecedents and fixed abode, it is unlikely that he poses any flight risk and/or will flee from trial proceedings - Considering the overall scenario and without commenting on the merits of the case, the instant petition is allowed. Thus, no useful purpose would be served to further incarcerate the petitioner. The petitioner is ordered to be released on bail, if not required in any other case, on his furnishing bail bonds and surety bonds to the satisfaction of learned trial Court, where his case is being tried and in case he/she is not available, before learned Duty Judge, as the case may be. 2023 (9) TMI 230 Export of services - Intermediary services or not - Denial of refund of unutilized input tax credit - zero rated supplies - place of supply of services within the territory of India - S ection 16 of the Integrated Goods and Services Tax Act, 2017 - HELD THAT:- The petitioner is not an intermediary, inasmuch, as the petitioner is neither facilitating the provision of services by a third entity nor acting as a middleman for procuring such services for its affiliate. The petitioner is, in fact, contracted to provide the services, and is the principal service provider in the context of the services provided by it book keeping, payrolls, and accounts through the use of cloud technology. In case of intermediary services, there are three entities one providing the principal service, one receiving the principal service, and an intermediary who acts as an agent or a broker for facilitating or arranging such services for the service recipient. In the present case, although the agreement does use the word agent but is clear that the petitioner is not acting as an agent for procurement of services for the service recipient. It is, in fact, providing the principal service of Bookkeeping, Payroll, and accounts, through the use of cloud technology . The fact that such services may be for the clients of the petitioner s affiliate, Boks Business Services Limited, does not make the petitioner an intermediary . The issue, whether the petitioner can be considered as an intermediary, is squarely covered by the decision of this Court in M/S. ERNST AND YOUNG LIMITED VERSUS ADDITIONAL COMMISSIONER, CGST APPEALS -II, DELHI AND ANR. [ 2023 (3) TMI 1117 - DELHI HIGH COURT] , where it was held that the Services rendered by the petitioner are not as an intermediary and therefore, the place of supply of the Services rendered by the petitioner to overseas entities is required to be determined on basis of the location of the recipient of the Services. Since the recipient of the Services is outside India, the professional services rendered by the petitioner would fall within the scope of definition of export of services as defined under Section 2(6) of the IGST Act. The impugned orders cannot be sustained. The same are set aside - Petition disposed off. 2023 (9) TMI 229 Validity of adjudication order confirming demand of GST with interest and penalty - Cryptic SCN - validity of Audit Observations - sufficient opportunity of hearing not provided to the petitioner - principles of natural justice - HELD THAT:- This Court finds that it would be appropriate if the observations in the Audit Report and the intimation given by the Department be read as part and parcel of the Show Cause Notice and while observing so, the petitioner would be at liberty to make out a fresh reply in light of the observations made, thereby the Show Cause Notice at Annexure-'D' dated 13.10.2022 is now deemed to include the observations in the Audit Report as well as the Intimation of Tax ascertained at Reference-4 and such reply to the Show Cause Notice to be made out by the petitioner within four weeks from the date of receipt of Certified Copy of today's order. It is noticed rightly that the petitioner's reply has adverted to only certain aspects and not to the entirety of the observations made in the Audit Report and accordingly, the contention of the petitioner that Show Cause Notice at Annexure-'D' by itself does not contain all the grounds, requires acceptance, in the facts of the present case. The matter is remitted back to the Authority - Petition allowed by way of remand. 2023 (9) TMI 228 Maintainability of petition - Appellate Tribunal not yet constituted - Liability of petitioner to pay tax and penalty - 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 227 Maintainability of petition - Second Appellate Tribunal not yet been constituted - liability to pay tax with penalty - 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 it is directed that subject to the petitioner depositing the entire demanded tax amount, rest of the penalty and interest shall remain stayed during the pendency of the writ petition. So far as attachment of bank account is concerned, it is stated by learned counsel for the petitioner that the petitioner has already deposited the entire tax amount as demanded by the authority. The petitioner is permitted to file an application before the authority with regard to attachment of the bank account so that the same can be considered by the authority and pass appropriate order in accordance with law - Application disposed off. 2023 (9) TMI 226 Cancellation of GST registration of petitioner - appeal rejected on the ground of delay - HELD THAT:- This Court must opine that, on reading of the Notification dated 31.03.2023, the apprehension is not well founded because insofar as the period contemplated, the Notification reads that all those whose registration is cancelled on or before 31.12.2022 may apply subject to certain conditions, including the conditions first mentioned. The petitioner must first submit an application as contemplated under the aforesaid Notification, and the concerned must offer reasons to justify rejection of the application, even if it could be rejected. The petition stands disposed of reserving liberty to the petitioner to file application in terms of the Notification dated 31.03.2023. 2023 (9) TMI 225 Seeking rectification order under section 161 of the Goods and Services Tax Act, 2017 with reference to adjudication order under section 74 of the Goods and Services Tax Act, 2017 in respect of the Assessment Year 2018-2019 - provisional attachment of Bank Accounts - HELD THAT:- There is no gainsaying that the issue raised by the petitioner and for which the rectification has been sought for, would be under examination by the revisional authority. In view of the revisional proceedings having been commenced, the present petition and the prayers made therein are rendered not liable to be gone into as the revisional authority is in the process of adjudication of the disputed aspects. It was requested by learned advocate for the petitioner Mr. Uchit Sheth that revisional authority may be directed to complete the proceedings within time-bound. This request is reasonable. Therefore, it is directed that the revisional authority shall complete the proceedings initiated under section 108(1) of the Act and pass appropriate orders in accordance with law after examining the merits of the issue involved within eight weeks from the date of receipt of order. In that process, the petitioner shall be granted opportunity of hearing. At this stage, learned advocate for the petitioner submitted that till the revisional decision is rendered by the revisional authority, interim relief granted earlier by this court about not taking coercive action may be continued so that irreversible situation may not arise for the petitioner - the present petition is disposed of. 2023 (9) TMI 224 Seeking provisional return of goods - HELD THAT:- Considering the facts and circumstances and there being no objection expressed by the learned Government Advocate to the suggestion of this Court, 1st respondent is directed to dispose of application filed by the petitioner within a period of twelve (12) weeks from the date of receipt of a copy of this order, after hearing the petitioner, in accordance with law. Petition disposed off. Income Tax 2023 (9) TMI 223 Requisite procedure u/s 260A - manner of disposal of the appeal filed by Revenue, by the High Court - non formaliting substantial question of law at the time of admitting the appeal - HELD THAT:- We find that in the instant case ex facie the High Court has not followed the procedure contemplated u/s 260A of the Act. Having discussed the principles for entertainment of an Appeal by the High Court under Section 260A and when the same are applied to the present case, we find that the High Court did not formulate any substantial question of law at the time of admitting the appeal, rather the appeal was heard on merits and in the absence of formulating the substantial question of law the appeal was reserved for judgment. During the course of preparation of the judgment, the question of law was framed stated to be a question of law and the matter was then admitted and at the same time considered on merits. Issuance of notice prior to admission without framing any substantial question(s) of law is not contemplated under Section 260A. The High Court has either to admit or not admit the appeal. If the High Court admits the appeal then substantial question(s) of law has to be framed and the respondent put on notice on such substantial question(s) of law. On the contrary, if the High Court is of the view that no substantial question of law arises, then the appeal has to be dismissed. We find that the procedure adopted by the High Court in the instant case is not in consonance with what is contemplated u/s 260A of the Act and hence, on that short ground alone the impugned judgment is set aside. The matter is remanded to the High Court for re-consideration of the appeal filed by the respondent-Revenue having regard to the essentials of Section 260A and in accordance with law. Since the parties are represented by their respective counsel, they shall appear before the High Court on 25.09.2023 without expecting any separate notice from the High Court. 2023 (9) TMI 222 Condonation of delay in filing appeal before the Tribunal - delay of 1529 days - as submitted by the appellant is a Co-operative bank under liquidation and as the official liquidator was not conversant with the tax matters and did not take note of letter addressed by the AO and therefore could not take steps in time - further submit that a lenient view may be taken, since the appellant is being officiated by official liquidator and further, the appellant has very good case on merits - HELD THAT:- It is an admitted fact that the license of appellant was cancelled by the RBI on 14.02.2014 and the appellant was under liquidation and is being operated by official liquidator and is responsible for administrative and other activities concerning the appellant bank. The averments made in the affidavit that the official liquidator did not notice the letter dated 15.03.2017 addressed by AO and that due to lack of knowledge of income tax proceedings, the appeal could not be filed and thus, a delay of 1529 days occurred in preferring the appeal, does not inspire the confidence of this Bench. This Bench is concerned with the difficulty, injustice that may result to the depositors of the appellant-bank. To a query of this Bench with regard to refund of the amounts to the depositors, the learned counsel for appellant informed the Bench that the depositors are being paid their amounts in pro-rata basis from the amounts that are being received by the bank from time to time. In the above factual matrix, if the delay application is dismissed on the technicalities, the depositors would be put to further hardship for no fault of them. This Bench is inclined to condone the delay of 1529 days in preferring the appeal subject to payment of costs of Rs. 15,000/- (Rupees fifteen thousand only), payable to the Secretary, State Legal Services Authority, within a period of four weeks from today and matter is remanded back to the Respondent for adjudication on merits in accordance with law in expeditious manner. 2023 (9) TMI 221 Income accrued in India - income in respect of ships - freight earnings collected from India - Assessee produced ship registration certificates of only 128 ships and not for the remaining 8 ships - denial of Benefit of Article 8 of the Double Taxation Avoidance Agreement (DTAA) between India and Singapore - Whether, ITAT has erred in not restricting the benefit of Article 8 of the Double Taxation Avoidance Agreement (DTAA) between India and Singapore to the assessee, in accordance with the limitation imposed by Article 24 of the said DTAA? HELD THAT:- As relying on M.T. MAERSK MIKAGE [ 2016 (9) TMI 19 - GUJARAT HIGH COURT] and M/S. CITICORP INVESTMENT BANK (SINGAPORE) LTD.) C/O. CITIBANK NA SECURITIES AND FUND SERVICES, [ 2023 (6) TMI 1222 - BOMBAY HIGH COURT] Courts while analysing Article 24 held that under 'Article 24 where the income from sources in India shall be exempted from tax or taxed at a reduced rate in India and under the laws in force in Singapore, the said income is subject to tax by reference to the amount thereof which is remitted to or received in Singapore and not by reference to the full amount thereof, then the exemption or reduction of tax to be allowed under the DTAA in India shall apply to so much of the income as is remitted to or received in Singapore. Therefore, the exemption or reduction of tax to be allowed under the DTAA in India shall only apply to so much of the income as is remitted to or received in Singapore where the laws in force in Singapore provides that the said income is subject to tax by reference to the amount which is remitted or received in Singapore. When under the laws in force in Singapore, the income is subject to tax by reference to the full amount thereof, whether or not remitted to or received in Singapore, then in that case Article 24(1) would not apply. In both the cases, i.e., Citicorp Investment Bank (Singapore) (Supra) and M.T. Maersk Mikage (Supra), the Courts relied on letters/confirmation issued by the IRAS which confirmed the taxability of income in Singapore on accrual basis. In those two cases also Assessee had submitted certificate issued by the IRAS. Even in the case at hand, Assessee has submitted certificate from the IRAS but the CIT (A) chose to disregard that certificate on the basis that it has been issued by an officer of the IRAS and it is a non binding opinion without any statutory authority. This Court in Citicorp Investment Bank (Singapore) (Supra) has held that such certificate issued by Singapore Tax Authorities will constitute sufficient evidence for accepting the legal position. This Court while coming to such a conclusion, also relied upon in the judgment of the Hon'ble Madras High Court in the case of Commissioner of Income Tax v. Lakshmi Textile Exporters Ltd. [ 1997 (7) TMI 20 - MADRAS HIGH COURT] Therefore, in our view, no substantial questions of law arise as regards the first 4 questions proposed. Benefit in respect of freight receipts from 97 ships u/s 8 of the India - Singapore DTAA even though Article 8 (4) of the said DTAA requires the assessee to be the owner, lessee or a charterer of the ships - HELD THAT:- As in view of the judgment of this Court in the case of Balaji Shipping UK Ltd. [ 2012 (8) TMI 681 - BOMBAY HIGH COURT] in our view, no question would arise. In another matter of Assessee which came up before this Court in APL Co. Pte. Ltd. [ 2016 (1) TMI 1169 - BOMBAY HIGH COURT] the Court relying upon Balaji Shipping UK Ltd. (Supra), held that no substantial question of law would arise. As submitted that an SLP has been admitted against the judgment of this Court in Balaji Shipping Uk Ltd. (Supra) and, therefore, the Hon ble Apex Court has doubted the correctness of judgment and this Court therefore, cannot rely upon Balaji Shipping UK Ltd. (Supra). We are unable to accept such submission of Mr. Chhotaray. Appeal dismissed. 2023 (9) TMI 220 Revision u/s 264 - power of the Commissioner u/s 264 - Exclusion of income declared under Income Declaration Scheme, 2016 ( IDS ) - declaration of Petitioner under the IDS was accepted - HELD THAT:- Exercise of power under Section 264 was not subject to the power of the Assessing Officer to make adjustment under Section 143(1) of the Act. The Court held that power of the Commissioner under Section 264 is rather wide and even the errors committed could be rectified. Commissioner is bound to apply his mind to the question whether Petitioner's income was taxable and to what extent. Admittedly, amount payable under the IDS has been paid. Section 188 of the IDS provides that the amount of undisclosed income declared in accordance with 183 shall not be included in total income of the declarant for any assessment year for the Income-tax Act, if the declarant makes the payment of tax and surcharge referred to in Section 184 and the penalty referred to in Section 185, by the date specified under Sub-section 1 of Section 187. Petitioner having paid the tax and surcharge and the penalty with interest, amount of undisclosed income cannot be included in the income of the declarant/petitioner. Therefore, in our view, Commissioner should have exercised his power u/s 264 of the Act and decide the matter on merits. We hereby quash and set aside the impugned order dated 26th March, 2021 and remand the matter to Respondent No. 1 to decide the matter on merits. Before passing any order, Respondent No. 1 shall give personal hearing to Petitioner. 2023 (9) TMI 219 Disallowance of Prior Period Expenses - HELD THAT:- As in the case of Indian Petrochemicals Corporation Ltd. [ 2016 (9) TMI 110 - GUJARAT HIGH COURT] held that prior period expenses quantified and paid during current year would be allowed as business expenditure in relevant assessment year even though assessee was following mercantile system of accounting. Respectfully Judgment (cited supra), we hereby delete the addition which has been confirmed by Ld. CIT(A).Decided against revenue. Over statement of loss - Auditors in the Special Audit Report observed that though during the year the assessee sold five shops of the hotel building for a consideration of Rs. 40,03,000/- but the sale consideration of only Rs. 35,03,000/- was adopted while working out the profits on such sales, accordingly a sum of Rs. 5,00,000/- was proposed to be added by the AO - HELD THAT:- As CIT(A) after considering the material records and held that he do not find any reason why this sum of Rs. 5,00,00/- should again be added in the total income, accordingly the addition made by the AO is deleted.D.R. could not submit any contra evidence on the above findings of the Ld CIT [A]. Thus the ground no. 2 raised by the Revenue is devoid of merits and hereby dismissed. Addition u/s. 22 - ALV of finished stock - CIT(A) after considering the submissions of the assessee determined the ALV at 5% of the book value of the flats and determined the income - HELD THAT:- Merely because income in respect of said units has not been recognized during the year on account of NON-Execution of Sale Deed, it cannot be held that units are vacant and owned by the assessee for the purpose of taxing notional income u/s. 22 - The assessee is in business of real estate flats in question are the part of the stock in trade . Therefore the ALV computed by the lower authorities at 8% and 4% are against the provisions of section 22 and the addition made on this account is illegal As in order to give relief to Real Estate Developers, section 23 has been amended w.e.f. AY 2018-19 (FY 2017-18). By this amendment, it is provided that if the assessee is holding any house property as his stock-in-trade which is not let out for the whole or part of the year, the annual value of such property will be considered as Nil for a period up to one year from the end of the financial year in which a completion certificate is obtained from the competent authority. In view of the above amendment to section 23, in the instant case, the assessee is a builder and developer. The issue of taxability is with regard to unsold flats relating to the A.Y. 2013-14. In view of the insertion of sub-section (5) in section 23 by the Finance Act, 2017, w.e.f. 01.04.2018 narrated hereinbefore, we hereby delete the addition made on account of ALV. Disallowance u/s. 40(a)(ia) - TDS on payments made towards interest, rent, commission etc. - assessee contended that the amounts are charged to WIP of hotel building and reflected in the block of assets and the same has not been claimed as revenue expenditure during the previous year - HELD THAT:- CIT[A] correcly deleted the sum paid to HUDCO is clearly out of the purview of TDS and hence no disallowance can be made of this amount. As regards the balance amount, since the same has not been charged to revenue account the same cannot be disallowed from revenue account. However, as the applicable TDS has not effected by the assessee, thus following the provisions of section 40(a)(ia) of the Act, the WIP has to be reduced. Thus Ld CIT[A] directed the AO to reduce the WIP and partly allowed the appeal correctly. Deduction u/s. 80IB(10) - income of residential/commercial projects constructed - CIT(A) held assessee has not fulfilled the condition for becoming eligible to deduction u/s. 80IB(10) - Project has not been completed within the time limit of 5 years prescribed in section 80(IB) - HELD THAT:- Regarding Takshshila Coloneal project was not completed within the time limit of 5 years prescribed in section 80(IB) as decided in Bench of this Tribunal in [ 2023 (8) TMI 1185 - ITAT AHMEDABAD] separate planning permission obtained by the assessee for each Block separately and after construction obtained separate Building Usage permission from the Local Authority within 5 years period, therefore the assessee cannot be denied the claim of exemption u/s. 80IB(10) of the Act. Thus the order passed by the Lower Authorities on this issue is hereby set aside - thus assessee is eligible for deduction u/s. 80IB [10] of the Act on the Takshshila Coloneal project. Commercial construction is more that the prescribed limit of 3% of the aggregate built-up area of the housing project - As relying on cases Suyog Shivalaya [ 2018 (7) TMI 1458 - SC ORDER] and Arun Excello Foundations (P.) Ltd. [ 2012 (10) TMI 1216 - MADRAS HIGH COURT] the assessee is eligible for deduction u/s. 80IB [10] of the Act on the commercial construction which was approved by the Local Authority within the frame work of Development Control Rules and Regulations. Thus this ground raised by the assessee is hereby allowed and the disallowance made by the AO is hereby deleted. Assessee sold units to more than one person of a family which is not allowed as per section 80(IB) - As relying on Om Swami Smaran Developers (P.) Ltd. [ 2018 (1) TMI 1646 - ITAT MUMBAI] the assessee cannot be denied the deduction u/s. 80IB [10] of the Act on the entirety and the assessee is eligible for balance units which has been constructed as per conditions laid down in section 80IB[10][c] of the Act. Thereby this issue is set aside to the file of the AO with a direction to grant the deduction after giving opportunity to the assessee. Difference in cost of construction - In the Special Audit Report the Auditors compared the cost of construction of the shops/flats adopted by the assessee in the current year to the earlier years and pointed out that the cost adopted in the current year is much higher in comparison to the cost taken in earlier years after adjusting the addition to cost of construction during the year - HELD THAT:- CIT[A] considering the reply of the assessee held that the Auditors have arrived at the cost of construction on the basis of what was debited in earlier years and have not found any false expense or any part of the cost debited in the books of accounts of the current year despite the extensive special audit carried out. When the accounts of the assessee are subjected to special audit disallowance or addition cannot be made without impeaching the entries in the books of accounts or without any income/expense found not entered in the books of accounts, which has not been done in this case. Further in the SAR the Auditors pointed out that the assessee company has incurred various expenses pertaining to the projects eligible for deduction u/s. 80IB but they were charged to the projects which were not so eligible. Also certain common expenses were not proportioned between the projects eligible for deduction u/s. 80IB and other projects. Hence, the CIT[A] do not find any merit in the action of AO and the addition was deleted correctly. No contra evidence on the above detailed findings of the Ld CIT [A]. 2023 (9) TMI 218 Penalty for misrepresentation of fact u/s 270A(1) r.w.s. 270(9)(a) - assessee submits that instead of contesting the additions made in the assessment order, the assessee filed an application for seeking immunity from penalty and filed application u/s 270AA before assessing officer and penalty was levied by other assessing officer, without taking the fact in the consideration that the application of assessee was not rejected thus, the action of levying penalty is not justified - CIT(A) confirmed the action of AO by taking view that application for seeking immunity was filed belatedly and no provision under which the assessing officer could condoned the delay. HELD THAT:- We find that the finding of assessing officer and CIT(A) are on different footing. Though, we are in agreement with the submissions of ld Sr DR for the revenue that if the penalty was initiated for misreporting of income, the assessee was not eligible for immunity u/s 270AA. Yet, we find that the assessee during the assessment filed revised computation of income, and included entire income from house property in its income and such revised computation was accepted by assessing officer, in such circumstances, at the best it could be a case of under reporting of the income. AO made disallowance of interest expenses on the basis of the details furnished by the assessee only. However, considering the peculiar facts of the present case, the underreporting allegedly done by the assessee cannot amount to misreporting as the assessee had furnished all the details of deductions claimed under different heads of income. We find that in Prem Brothers Infrastructure LLP case [ 2022 (6) TMI 130 - DELHI HIGH COURT] held that where penalty was levied on assessee under section 270A alleging misreporting of income, however, fact that assessee had furnished all details of transactions relating to disallowance made and Ao as well as assessee had used same details to arrive at different quantum of disallowances, this by no stretch of imagination could be held to be 'misreporting' and further, in absence of details as to which limb of section 270A was attracted, impugned penalty order was to be quashed and revenue was to be directed to grant immunity under section 270AA. Thus, we do not find any justification of penalty on account of misreporting, the disallowance of interest expense was for the reason that it was claimed under wrong head and the assessee ultimately offered entire rental income in the hand of assessee. In the result, the grounds of appeal raised by the assessee are allowed. 2023 (9) TMI 217 Right of legal representative of the deceased assessee - Section 2(29) r.w.s 159 - one Mr. Javed Karim Khan Patel has filed his petition seeking to pursue his deceased father s file - Penalty u/s.271(1)(c) - HELD THAT:- Section 159 dealing with liability of a legal representative deserves to be read in conjunction with section 2(29) of the Act defining such a representative; thereby adopting the corresponding definition, in section 2(11) of the Civil Procedure Code, 1908. Legislature has prescribed specific conditions for an applicant that he or she represents the estate of the deceased person; as the case may be we thus conclude that since the appellant has failed to satisfy the above clinching criterion his instant petition seeking his impleadment as the legal representative fails as per Shri V.V. Ramarao Naidu Vs. CIT [ 1960 (10) TMI 107 - ANDHRA PRADESH HIGH COURT ] Ordered accordingly. This assessee s appeal also fails as this necessary corollary with a rider with it shall very much open for his legal representative(s); if any to pursue the same as per law. 2023 (9) TMI 216 Exemption u/s 11 - denial of exemption assessing income of the assessee on commercial basis - charitable activity u/s 2(15) - HELD THAT:- The activities of some essential services provided by non-statutory bodies are held to be not in the nature of trade, commerce or business, or service, towards trade, commerce or business. In the case where the services rendered by the institutions/organizations to the state or its agencies at the cost or marginal mark up over cost and above cost then such activities may fall within the description of one advancing the general public utility. As decided in Ahmedabad Urban Development Authority [ 2022 (10) TMI 948 - SUPREME COURT] has given interpretation of section 2(15) r.w. proviso, section 11(4A) and section 13(8) of the Act and held that there is no conflict between these provisions of the Act so far as carrying out activity in the nature of trade, commerce or business, or service in relation to such activities - the activity in the nature of business, trade, commerce or service in relation to such activities should be conducted actually in the course of achieving the general public utility object, and the income, profit or surplus or gains can then, be logically incidental Hon ble Supreme Court has set out certain parameters for different categories of charities/institutions/trusts and observed that if fee, rent or other charges are mandated under the statute for carrying out some essential public utility activities of development then the fee and charges for providing essential services or amenities for the purpose of public development work will not fall in the nature of business, trade or commerce or services in relation to such business, trade or commerce if the profit or markup is reasonable and not with motive to earn profit. CIT(A) has passed an ex-parte order by observing that in spite of adequate opportunity of proper delivery of notices assessee did not file any documentary evidence/proof in support of the grounds of appeal. Therefore, the appeals of the assessee were dismissed by the Ld. CIT(A) for want of proper representation and supporting evidence. Accordingly in the facts and circumstances of the case and in view of the judgment of Ahmedabad Urban Development Authority (supra) the matter requires a proper verification about the profit margins/markup earned by the assessee for providing these services and activities of publication of newspaper and other contents as well as production of documentary film etc. for the State Government as well as PSUs. Therefore, these matters are set aside to the record of the AO for fresh adjudication after proper verification and examination of the relevant facts and records as well as clarification made by the Hon ble Supreme court reported in [ 2022 (11) TMI 255 - SUPREME COURT] Appeals of assessee allowed for statistical purposes. 2023 (9) TMI 215 Penalty u/s 271(1)(c) - difference in returned income and assessed income - difference is in view of royalty income not offered to tax in Return of Income which was accepted later in MAP resolution - CIT(A) deleted the penalty - HELD THAT:- We find that the authorities for the purpose of settling the cases under MAP proceeded on assumption that the assessee has PE in India and the business profits earned from those contracts are deemed to be attributed to the assumed PE and taxed in India at 30% of the profits arrived. We observe that even in the MAP proceedings it is only by way of an assumption that the authorities have concluded that the assessee has PE and on such assumption of PE the business profits were attributed to the PE for the purpose of settling the issues. No corroborative evidence is brought on record by the Revenue Authorities to suggest that the assessee has PE in India. Further the CIT(A) in all these assessment years in fact deleted the additions holding that Assessee does not have a PE in India. We also find that the CIT(A) while deleting the penalty levied u/s 271(1)(c) held that the assessee has not concealed any particulars of income and has disclosed all material facts during the assessment as well as MAP proceedings. CIT(A) has considered all the aspects of the material and concluded that the assessee has disclosed all material facts during the assessment as well as MAP proceedings and has not concealed any particulars of income. We see no infirmity in the order passed. We further observe that at best it is only a difference of opinion as to whether there exists PE in India for Assessee or not. There is no conclusive proof that the assessee has PE in India. In the penalty proceedings the AO simply relied on the MAP proceedings in holding that the assessee has PE in India which in fact is not correct. As we said earlier it is only on assumption that the assessee has PE in India and by way of deeming fiction the profits were attributed for such assumed PE by the authorities in the MAP proceedings. Thus we hold that there is no concealment of income or furnishing inaccurate particulars of such income by the assessee in any of these assessment years and thus, we sustain the order of the CIT(A) - Decided against revenue. 2023 (9) TMI 214 Unexplained income u/s 68 - addition of entire credit in the bank account of assessee by taking view that no response or explanation was furnished by assessee despite services of various notices - assessee has categorically contended that he has in the business in contract and carting - AO has made addition @ 8% on contract receipts - HELD THAT:- The Hon'ble jurisdictional High Court in the case of Pradeep Shantilal Patel [ 2013 (11) TMI 1646 - GUJARAT HIGH COURT] while considering the issue of cash credit / deposits in savings bank account when the nature of business was not forthcoming from the record, held that when the assessee admitted the cash deposits pertaining to his retail business and nature of business was not forthcoming on record, the net income has to be determined on the basis of turnover of assessee. Thus,keeping in view that the total deposits in bank account of assessee, therefore deem it fit and proper to estimate the income of assessee @ 10% of credit / deposits in assessee s bank account. 2023 (9) TMI 213 Disallowance of interest on unsecured loan creditors which was subject to TDS - AR emphasized that no fresh loans were obtained from the unsecured loan creditors during the financial year 2011-12 - HELD THAT:- AO has not disputed on the genuineness of loans and the loan funds were utilized wholly and exclusively for the purpose of business. AR emphasized that the own funds are more than the loan funds and relied on the judicial decisions. Considering the facts, circumstances and the information filed in the course of hearing find that there is no dispute with respect to the interest paid to the unsecured loan creditors on the opening balances and further the revenue has been accepting the interest claim in earlier years. Accordingly, the order of the CIT(A) on this disputed issue is set aside and direct the Assessing officer to delete the disallowance of interest on unsecured loans For interest on housing loan paid to LIC Ltd and HDFC Ltd - AR filed the evidences of interest paid to LIC Ltd loans and supported with the loan repayment and loan interest receipts and in the case of HDFC Ltd, statement of account was filed. Considering all there is no dispute that the assessee has let out the property and derived the rental income and the assessee has substantiated the submissions with the documentary evidences. Accordingly, direct the AO to delete the disallowance of interest and allow the grounds of appeal in favour of the assessee. 2023 (9) TMI 212 Applicability of provisions of section 115BBE - income declared during the course of survey proceedings - Assessee chosen to assess the additional income under the head income from business - HELD THAT:- There is no dispute about the quantum of addition to be made nor was there any dispute regarding the head of income under which the same was to be assessed to tax. Admittedly, the income offered, during the course of survey proceedings, was credited to the Profit Loss Account and it was stated that the additional income is derived from the business of Hotel carried on by the appellant. Admittedly, the assessee had offered such additional income under the head income from business and the Assessing Officer also assessed the same under the head income from business . Thus, it cannot be said that the source for additional income remains unexplained. Therefore, the provisions of section 115BBE have no application to the facts of the present case. Thus, the grounds of appeal filed by the assessee stand allowed. 2023 (9) TMI 211 Deduction u/s. 80(P)(2)(A)(i) - allowance of interest on deposits earned by the Cooperative Society from the fixed deposits in various bank accounts - contention of the Ld. AO is that as per section 80P(2)(d), the assessee is eligible to claim deduction U/s. 80P(2)(a)(i) only when it is invested with any other cooperative society - HELD THAT:- From the plain reading of section 80P(2)(a)(i) of the Act, the whole of amount of profits and gains of the business attributable to one or more of such activities shall be allowed as a deduction. Further, section 80P(2)(d) and 80P(2)(e) of the Act also allows similar deductions. In simple terms, the benefit under clause (a) will be limited only to the profits gains of the business attributable to any one or more of such activities. But in case, if the cooperative society has an income not attributable to any one or more of such activities listed in sub-clauses (i) to (vii) of clause-(a), the same may go out of the purview of clause (a) but still the cooperative society may claim the benefit of clause (d) or (e) as per the conditions laid down therein. In the instant case, the original source of investments made by the assessee in Nationalized Banks is admittedly the income of the assessee derived from the activities listed in sub-clauses (i) to (vii) of clause (a). The character of such income must be last, especially when the statute uses the expression attributable to and not any one of the expressions viz., derived from or directly attributable to . As in the case of Vavveru Cooperative Rural Bank Ltd vs. Chief Commissioner of Income Tax and Another [ 2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT] held that the cooperative society is eligible for deduction U/s. 80P(2)(a)(i) of the Act on the interest income received from investment in banks. In the instant case also, the assessee has invested surplus funds out of the activities carried out as per the provisions of section 80P(2)(a) of the Act. We therefore are of the view that interest income should be allowed as deduction U/s. 80P(2)(a)(i) of the Act and thereby the Ld. CIT(A)-NFAC has rightly held by deleting the addition made by the Ld. AO and hence we find no infirmity in the order of the Ld. CIT(A)-NFAC. Decided in favour of assessee. 2023 (9) TMI 210 Validity of the re-assessment proceedings - disallowance of expenditure while computing the income under the head capital gains - HELD THAT:- As re-assessment proceedings initiated by the AO are valid in law, inasmuch as, the information received by the AO that the co-owners of the property which was sold during the previous year relevant to the assessment year under consideration, in respect of which the capital gains arising on sale of such property were offered to tax constituted an information enabling the Assessing Officer to form an opinion that the income escaped assessment to tax. On merits of the issue, there is no material to disbelieve that the expenses incurred on account of development of the flat sold is genuine. Therefore, the Assessing Officer was not justified in making the addition as well. Thus, the grounds of appeal filed by the assessee stand partly allowed. 2023 (9) TMI 209 Disallowance u/s 14A r.w.r. 8D - mandation of recording satisfaction - HELD THAT:- As evident from the record, in the present case, no satisfaction as required u/s 14A(2) was recorded by the AO, and the disallowance under section 14A of the Act was made only pursuant to the directions issued by the learned DRP. Thus the jurisdictional pre-condition as laid down in provisions of section 14A(2) of the Act was not fulfilled in the present case. Disallowance as computed by DRP was not by applying the mandatory computation provisions of Rule 8D of the Income Tax Rules, 1962 and the same was directed merely as a reasonable disallowance under section 14A(1) of the Act. Therefore, in view of the above, we do not find any basis for upholding the disallowance made under section 14A of the Act. Accordingly, the AO is directed to delete the same. As a result, grounds no.5 and 6, raised by the assessee are allowed. Allowance of interest expenditure u/s 57(iii) - interest expenditure claimed under the aforesaid section is not wholly and exclusively expended for the purpose of earning the interest income - DRP after duly noting the chronology of events, i.e. borrowing of interest-bearing funds by the assessee and thereafter advancing the same as interest-bearing loan to the sister concern, in its directions came to the conclusion that the interest expenditure claimed by the assessee is directly related to the interest income earned during the year under consideration. It is undisputed that the assessee utilised the interest-bearing borrowed funds for advancing the loans to the sister concern. It is pertinent to note that the violation of RBI guidelines on the usage of ECB funds for other purposes has no relevance in the allowance of deduction u/s 57(iii) - Therefore, we find no infirmity in the impugned final assessment order passed in conformity with the aforesaid directions of the DRP, whereby the interest expenditure was directed to be allowed under section 57(iii) of the Act against the interest income offered for taxation under the head income from other sources . Accordingly, the impugned final assessment order on this issue is upheld and the grounds raised by the Revenue are dismissed. 2023 (9) TMI 208 Addition u/s 68 - Bogus LTCG - disallowance of exemption of long-term capital gains claimed u/s 10(38) by treating the share transaction as non-genuine - HELD THAT:- Revenue has failed to prove with any cogent evidence on record that the assessee was involved in converting its unaccounted money into long-term capital gains by conniving with any entry operator/exit operator, who was involved in artificial price rigging of shares. Thus this is the case wherein the AO merely on the basis of suspicion rejected the claim of the assessee, without establishing any link between the assessee with the entry operators/exit operators, who were allegedly involved in price rigging of shares. We are unable to persuade ourselves to accept the conclusion reached by the Revenue on the basis of the findings recorded in the order passed by the lower authorities. Accordingly, we direct the AO to delete the impugned addition made u/s 68 and accept the plea of the assessee in respect of long-term capital gains earned during the year. Since the main transaction has not been found to be bogus, the addition on account of commission @ 3% made by the AO and upheld by the learned CIT(A) is also deleted. Decided in favour of assessee. Unexplained investment - addition u/s 69 - purchase of shares of M/s Rutron International Ltd. - HELD THAT:- Since the assessee has not sold any shares of M/s.Rutron International Ltd., the question of long-term capital gains/short-term capital loss does not arise. As evident from the record that the assessee in order to substantiate the purchase transaction submitted that the sale consideration was paid through normal banking channel and the shares are held in the Demat account. It is pertinent to note that only when the investment is not recorded in the books of accounts or the explanation by the assessee regarding the nature and source of the investment is found to be not satisfactory, the value of the investment can be treated as an unexplained investment u/s 69 - However, in the present case, no such allegation has been raised by the Revenue. Thus the addition made by treating the purchase consideration as unexplained investment u/s 69 of the Act has no basis and accordingly is directed to be deleted. 2023 (9) TMI 207 Correct head of income - gain from sale of shares - business income or short term capital gain - assessee has categorized the purchases of shares/securities in two categories; one is investment portfolio and the second is trading portfolio and has shown the gain/income these shares under these two sections as and when the shares were sold - HELD THAT:- It is the decision of the assessee as to which purchase to be treated as investment and which to be treated in trading section. The mere fact that the assessee has purchased shares and disposed them off within a short span of time will not justify the gain to be treated as business income while the same was shown in the investment portfolio in the books of the assessee. In our opinion, the decision of both the authorities below is not sustainable as this being a factual issue and the assessee has maintained the books clearly maintaining the dichotomy in the purchase of securities in the books of accounts. The case of the assessee finds support from the decision of HK Financers Pvt. Ltd. [ 2015 (5) TMI 828 - CALCUTTA HIGH COURT] and Purvanchal Leasing Ltd. [ 2022 (2) TMI 437 - CALCUTTA HIGH COURT] - Thus we direct Ld. AO to treat it as short term capital gain. Appeal filed by the assessee is allowed. 2023 (9) TMI 206 Revision u/s 263 - Failure of AO levy tax u/s 115BE for the additions made u/s 68 - addition made by AO in the assessment order of unexplained sundry creditors and bogus salary and wages expenses ought to have been made u/s. 68 and section 69C of the Act respectively and subjected to tax at the rate prescribed u/s. 115BBE - HELD THAT:- The contention of the assessee that pending appeal before the Ld. CIT(A) revisionary powers u/s 263 of the Act cannot be exercised, is dismissed. Addition u/s. 68/69C - AO having made the addition u/s 68 of the Act, the assessee s plea that it could not have been made under the said section cannot be entertained in revisionary proceedings. The scope of proceedings u/s 263 of the Act is limited to revision of orders which found erroneous causing prejudice to the Revenue. Any finding prejudicial to the assessee cannot be dealt with by the Revenue authorities in revisionary proceedings u/s 263 of the Act. The assessee has remedy by way of right to appeal against orders prejudicial to it and the same can be dealt with in appeal only. PCIT in revisionary proceedings u/s 263 of the Act cannot adjudicate/deal with issues decided by AO to the prejudice of the assessee. AO having made addition u/s 68 of the Act, taxing it at the rate prescribed u/s 155BBE of the Act was a natural corollary. Admittedly the law itself prescribes a special rate of tax for additions made u/s 68, 69, 69A/B/C of the Act u/s 115BBE of the Act. Even the Ld. Counsel for the assessee does not dispute this position of law. The AO, therefore having not taxed the addition made on account of unexplained creditors u/s 68 of the Act, as per the rate prescribed u/s 115BBE of the Act, is clearly an error causing prejudice to the Revenue. The contention of the ld. counsel for the assessee that the computation of tax is not part of the assessment order is incorrect. The sheet of computation of tax has been held in the case of KalyanKumar Ray [ 1991 (8) TMI 291 - SUPREME COURT] as being part of the assessment order in terms of section 143(3) of the Act. Any error in the same, we hold, would undoubtedly constitute an error in the assessment order. We confirm the order of the Ld. PCIT holding the non-invocation of section 115BBE of the Act on the addition made on account of unexplained sundry creditors u/s. 68 of the Act as an error in the order of the Assessing Officer causing prejudice to the Revenue. Disallowance of bogus expenses - As with regards to disallowance of expenses, the invocation of section 69C by the Ld. PCIT, we hold is not correct and the provisions of section 115BBE of the Act could not have been applied to this disallowance made. We therefore hold that the ld. PCIT has erred in holding that the assessment order was erroneous on account of the disallowance of expenses not being made u/s. 69C of the Act and 115BBE of the Act not invoked as a consequence. We uphold the order of the ld. PCIT finding the assessment order erroneous causing prejudice to the Revenue only with respect to the aspect of non-invocation of section 115BBE on the addition made on account of unexplained sundry creditors u/s. 68 of the Act. With respect to the other aspect of bogus expenses disallowed, we hold there is no error in the order of the AO. Appeal of the assessee is partly allowed. 2023 (9) TMI 205 Order u/s. 201 (1) r.w.s. 201(1A) - Non deduction of TDS - payees concerned have offered the same to tax and therefore, they duly stand assessed - HELD THAT:- We are afraid to accept the assessee s instant sole substantive contention for want of the corresponding records and evidence emanating from the case files. We make it clear that although the legislature has diluted the provisions of the impugned TDS recovery mechanism u/secs. 201(1) r.w.s. 201(1A) subject to only to the condition that it is incumbent for the assessee(s) in-default to file the relevant details to this effect going by sec. 201(1) first proviso introduced in the Act vide Finance Act, 2012 w.e.f. 01.07.2012. This is indeed coupled with the fact that the learned lower authorities have also rejected the assessee s contention for the very reason only as it is evident from the NFAC s above extracted detailed discussion. We thus see no merit in these assessee s identical sole substantive grievance. The same stands rejected. 2023 (9) TMI 204 TP Adjustment - ALP of the international transaction of purchase of equity shares - Transaction of purchase of shares of SIPL and QNPL by the Appellant from its AE - Grievance of the Appellant is that the Final Assessment Order passed by the Assessing Officer is silent on the proposed downward adjustment in relation to the cost of acquisition of shares in the subsequent years - HELD THAT:- We find merit in the contention advanced by the Appellant that the TPO could not have substituted the actual figures for projected figures in DCF valuation for the purpose of determining the value of shares of QNPL. The decision in the case of DQ (International) Ltd. [ 2016 (8) TMI 727 - ITAT HYDERABAD] , which was followed by the Mumbai Bench of the Tribunal in the case of Aaradhana Realties Limited ( 2023 (3) TMI 191 - ITAT MUMBAI ) supports the aforesaid contention advanced on behalf of the Appellant. Guidance for Tax Administrations clearly provides that where the actual cash flows are significantly higher than the projected cash flows, there is a presumption that projected cash flows should have been higher requiring scrutiny for the probability- weighing of such outcome. However, the Guidance goes on to provide that it would be incorrect to base revised valuation on actual cash flows without taking into account the said probability. We note that no such scrutiny or probability-weighing was done by the TPO. Therefore, the above OECD Guidance on which reliance was placed by the Learned Departmental Representative does not come to the aid of the Revenue. Rule 10B(5) of the Rules provides for use of current year data or data pertaining to financial year immediately preceding current year. The proviso to Rule 10B(5) deals with the availability of data of current year subsequent to the determination of arm s length price and permits use of the same for determination of ALP during assessment proceedings even though the data was not available at the time of furnishing of the return of income. Thus, Rule 10(5) does not provide for or deal with the data pertaining to future/subsequent years. The data used by the TPO pertains to years subsequent to the current year. Thus, Rule 10B(5) also does not further the case of the Revenue. A perusal of Rule 10D(1)(j) of the Rules would show that a person undertaking an International Transaction is required to maintain a record of the actual working carried out for determining the ALP, including details of the comparable data and financial information used in applying the Most Appropriate Method, and adjustments, if any, which were made to account for differences between the international transaction and the comparable uncontrolled transactions. This also shows that the data which is required to be used and maintained by the Appellant has to be data available at the time of determining the ALP [with proviso to Rule 10B(5) providing exception to the aforesaid general rule]. We reject the approach adopted by the TPO for the purpose of determining the value of shares of SIPL by substituting actual financial results for the projected results in the DCF valuation furnished by the Appellant. Revenue has accepted the directions issued by DRP and no addition has been made in relation to income arising from the international transaction of purchase of shares of SIPL. Further, admittedly even the Final Assessment Order does not provide for downward adjustment in the cost of acquisition of share of SIPL. Therefore, in the facts and circumstances of the case we hold that no adjustment can be made in the cost of purchase of shares of SIPL. Transaction of purchase equity shares of QNPL for a consideration - Appellant had selected Other Method as the most appropriate method and benchmark the transaction on the basis of valuation report - difference of 3 months between the International Transaction and transactions projected as comparable uncontrolled transactions by the Appellant - HELD THAT:- The contention of the Revenue that the gap of 3 months between the International Transaction and project comparable uncontrolled transactions would make the said transactions incomparable is a general averment not supported by factual analysis. Having said as aforesaid, we do find merit in the submission of the Learned Departmental Representative to the limited extent that where under shareholders agreement the parties thereto undertake to purchase/sell shares at value determined by independent expert, the transaction undertaken are more reflective of the valuation agreed upon rather than a price determined by market forces. The Appellant had acquired shares from the promoter (i.e. Viney Sagar Sahgal) by triggering call option in terms of Shareholders Agreement. There is nothing on record to show that the exercise of call option had no impact on the determination of sale price. Therefore, in the facts and circumstances of the present case we hold that Other Method be adopted as the most appropriate method for computation of ALP of transaction of sale of shares of QNPL by the Appellant to SIPL. Accordingly, we direct the Assessing Officer/TPO to re-compute the ALP of the aforesaid international transaction and the consequent transfer pricing adjustment, if any, on the basis of DFC valuation report furnished by the Appellant after verifying the same. In terms of the aforesaid, Ground No. 2 raised by the Appellant is partly allowed. 2023 (9) TMI 203 Correct head of income - correct income chargeable to tax for the current year - head of income under which the income arising on the sale of developed property in SSI is assessable under the Act -20% share of the easement right fee (ERF) - HELD THAT:- The claims made, i.e., qua capital gains; ERF; AOP, are not sustainable in law; rather, mutually contradictory. In fact, as would be apparent, as indeed admitted during hearing, the claims qua the latter two were made only with a view to enable a reasonable assessment of income. We agree in principle; it being only the real income that is, subject to the provisions of law, to be brought to tax. This is precisely, as would be presently seen, what we have attempted to. There is no gainsaying, however, that the claims, to be acceptable, are to be valid in law and, further, conform to process known to law. Why, even income assessed in the hands of another, much less returned, is nevertheless liable to be assessed in the hands of the right person. AO cannot, without issuing a finding as to the person to whom the income in reality belongs, and which can only be on the basis of material in his possession, assess income arising to one in the hands of another, even if agreed to by the latter, or even both. Tax can only be levied under the authority of, and following the due process of, law. In the instant case, on the other hand, we have, even at this stage, no clue as to when, and by whom the Approval was sought, or even if the same was later amended to co-opt others. Why, as against seven entities, with the land ceiling of 15 acres, the total area developed is a mere 9 acres. Here it also needs to be appreciated that while the land ceiling in Malibu Estate Pvt. Ltd. [ 2006 (8) TMI 168 - DELHI HIGH COURT] was with reference to the township area, in the instant case the same is only w.r.t. land holding per se, i.e., without any reference to any project. In fact, 3 of the 6 companies, stated to be a part of AOP, came up much later, i.e., after a time lag of 20 years, i.e., which itself was much after the work began, even as the bulk of the development was done in the initial years. In Conclusion The assessments, in view of the foregoing, are restored back to the file of the assessing authority. We have, considering the indeterminate state of affairs, with the assessee s claims being both unsubstantiated and inchoate, construed the issue arising before us holistically, i.e., the income assessable, including the head under which it is, in the facts and circumstances of the case, i.e., in accordance with law, also addressing the additional grounds. The claim of AOP does not survive, being both untenable and without jurisdiction. As regards ERF, the assessee itself seeks it s disregard despite returning it. In our view, the same could hold only where the same is shown to represent an economic charge, i.e., where one gains at the expense of the other, while, that as presented bears anomalies, discussed in detail in the order. We are conscious that assessments have been made in the group companies, assessing loss on account of ERF, and which, being undisputed, may have attained finality. That however would not detain us inasmuch as the said assessments are not before us and, two, it is only the correct legal position, and not the view of the parties in the matter, that would hold. If an assessee benefits under the circumstances, in view of the statutory limitation/s, so be it. The income arises as business income and, accordingly, is to be computed in accordance with the relevant provisions which, as observed, have been highlighted. The AO shall, where and to the extent contested, issue definite findings on each of the computational aspects, including ERF, and assess the total income in accordance with law after affording reasonable opportunity of hearing and to present it s case before him to the assessee. Retention of ERF by him would again require definite findings, meeting the issues raised herein in its respect. Assessee s appeals are allowed for statistical purposes. 2023 (9) TMI 202 Disallowance of employees contribution to PF - HELD THAT:- Issue covered against the assessee in the case of Checkmate Services P. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] . TP Adjustment - notional interest on the excess credit period allowed to outstanding receivables of associate enterprise (AE) - whether any upward adjustment of interest on outstanding receivables of AE s exceeding their credit period is warranted in terms of section 92C? - HELD THAT:- As what can be derived from the above is that in view of Hon ble Delhi High Court decision in the case of Kusum Health P. Ltd. [ 2017 (4) TMI 1254 - DELHI HIGH COURT] the position of law on the issue is that where working capital adjustment takes into account the impact of outstanding receivables no further adjustment is required of interest on outstanding receivables of AE s beyond the agreed credit period if the margin of the assessee is comparable to that of external comparables. In the present case, the Ld.CIT(A) has dismissed this plea of the assessee relying on the decision of Ameriprise India P. Ld. [ 2015 (8) TMI 652 - ITAT DELHI] which as we have noted above, has been held to be not good law by the Hon ble Delhi High Court in its consistent decision in Kusum Health P. Ltd. (supra) and Mckinsey Knowledge Centre P. Ltd. [ 2018 (8) TMI 592 - DELHI HIGH COURT] In the facts and circumstances of the present case, as we have noted above, since the assessee has demonstrated that its profit margin calculated after working capital adjustment are within 5% range as compared to adjusted profits of the comparables, we hold that adjustment made on account of interest on outstanding receivables is unwarranted and unjustified. The same is, therefore, directed to be deleted. 2023 (9) TMI 201 Search proceedings - Addition based on loose sheets found - Whether the presumption as enumerated in the provisions of section 132(4A) and section 292C can be drawn against a third person from whose possession and control, in the course of search, no books of accounts, other documents, money, bullion, jewellery or other valuable articles etc. have been recovered? - HELD THAT:- Presumption that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to a person may be drawn against such person from whose possession or control of, in the course of a search, such documents etc. found. We are of the considered view that the presumption as prescribed, under the provisions of section 132(4A) and 292C of the Act, may be drawn against such person only from whose possession or control, the documents etc. as mentioned in the said provisions is/are found and seized or recovered but not against the third person from whose possession or control, no such document(s) etc. as mentioned in the said provisions, is/are found and seized or recovered. We answer question no. (i) accordingly. Coming to the instant case, the alleged documents, have been found in the premises of Shri Ajay Kumar and therefore, the presumption as prescribed u/s. 132(4A) and 292C of the Act, can only be drawn against Shri Ajay Kumar, which infact has already been drawn by making the addition on the basis of the seized documents including Annexure LP-04 used in this case. It is also not the mandate of law that the addition can be made in two hands on substantive basis. Hence on the aforesaid analyzations, the addition is liable to be deleted in this count itself. Whether, a third person, from whose possession or control, no recovery of such documents etc. as referred to u/s 132(4A) and section 292C has been effected, is still required to rebut the presumption as prescribed section 132(4A) and 292C? - Our answer is no because as we already held that presumption u/s 1324A and 292C cannot be drawn against third party from whose possession, no documents etc. found and seized and therefore in our considered view, such party is not under obligation to rebut the presumption. Whether the loose papers, on which entries of some amounts are depicted, can be used without corroborative evidences? - Unless the statement/document is tested under the cross examination, the same cannot be read in evidence against the Assessee and no adverse inference can be drawn, unless the entries made in the documents so found are corroborated by the independent evidence. The presumption as provided in section 132(4A) and 292C of the Act, is not in absolute terms, but is subject to corroborative evidence. Where the department proposes to invoke section 69 of the Act for taxing unexplained investments, it cannot harp on the presumption u/s. 132(4A) of the Act. It will first have to prove by independent evidence that the Assessee has, in fact, made investments, which are not recorded in the books of account etc. and this burden cannot be said to have been discharged merely on the basis of some entries found in the books of account or documents seized in the course of search. The onus of proving the source etc. will shift to the Assessee only, after the burden of establishing unexplained investment has been discharged by the Revenue Department. The loose papers, on which entries of amounts are depicted, can not be used without corroborating evidences, hence we answer question no. (iii) accordingly. The Hon ble jurisdictional High court of Allahabad in the case of Mumar Trading Co. Vs. Commissioner of Trade Tax, [ 2007 (9) TMI 284 - HIGH COURT OF JUDICATURE AT ALLAHABAD] as well, also clearly held that it is settled principle of law that if the Revenue wants to rely upon the entries of the document, seized from the premises of third party, the burden lies upon the Revenue Authorities to prove the genuineness and authenticity of the said entries to connect the said entry with the dealer, in case the dealer denies to have any connection with such entry. In the instant case the Assessee as well as Sh. Ajay Kumar from whose possession documents found and seized, denied to have any connection with payments as noted in the notings/documents, which have been used by the Revenue, against the Assessee in making the addition in hand. Department failed to prove/bring on record the author of the writings on the loose papers, on the basis of which the addition under consideration has also been made. It is also a fact that the Assessee was never provided an opportunity to cross examine the scriber of the notings and even the other persons whose names have also been narrated in short form and Mr. Ajay Kumar from whose possession and control, the alleged documents were recovered. On the aforesaid analyzations as well, the addition in hand is also un-sustainable. Where the presumption is rebuttable, then how and in what mode, the presumption can be rebutted by the third person? - It is not the mandate of law as provided u/s. 132(4A) and 292C of the Act that whenever the documents etc. as prescribed in the said provisions are seized with, the court shall necessarily bring the presumption irrespective of the other factors which may dissuade the court from doing so. The question also arise, what kind of evidence would rebut a legal presumption in the given set of facts, in fact there is no rigid rule. In our opinion, the evidence can be direct or indirect or circumstantial or in combination, however, in certain cases/ situation, a mere statement of the Assessee (third person) can suffice or may be enough to rebut the legal presumption. We answer question no. (iv) accordingly. Though the Assessee is not liable to rebut the presumption drawn by the Assessing Officer, however, still rebutted the same by raising aforesaid pleas and therefore, the presumption drawn against the Assessee is un-sustainable. We also observe as held by the Hon ble Courts that presumption can only be drawn after establishing the addition under the substantive provisions of section 69 of the Act as involved in this case and before fulfilling the conditions of section 69 independently, the presumption cannot be drawn, which in the instant case is missing. Hence, on this aspect as well the addition in hand is unsustainable. Asadmitted fact that the Assessee was not empowered to grant any contract of value of more than Rs. 40 lacs and as alleged contracts were of more than the prescribed limit of Rs.40 lacs, then the circumstantial evidence as construed by the Assessing Officer having no value, as the same is based on surmises and conjectures. As no recovery of any documents as used by the Assessing Officer, has ever been effected from the Assessee s possession or control and even otherwise, no corroborative evidence against the Assessee has been established. Therefore, the adverse inference drawn, against the Assessee is unsustainable. The addition is deleted and the appeal filed by the Assessee is allowed. Benami Property 2023 (9) TMI 200 Benami transaction - Prosecuting the petitioner u/s 55 of the Prohibition of Benami Property Transaction Act, 1988 - petitioner was standing in front of a certain lodge with a black bag in his hand, he was intercepted by the Inspector of Police, and he searched the bag and found cash worth Rs. 34,60,000/- inside it - petitioner under Section 131(1A) of the Income Tax Act, the Deputy Commissioner of Income Tax, the second respondent in this case, referred the matter to Benami Prohibition Wing of the Income Tax Department - HELD THAT:- Today the petitioner has made conflicting statement regarding the ownership of the property. First he made a statement that it belonged to Sultan Foumi, later he changes his statement and states that it is his own money. Now it is this inconsistency that has prompted the authority to grant sanction under Section 55 of the Act for prosecuting the petitioner. After weighing the rival submissions, this Court considers that it is too premature stage for this Court to interfere with the decision of the first respondent to accord sanction for prosecution under Section 55 of the Act. So far as certain contradictory statements alleged to have been made by the petitioner is concerned, its merits can be decided only post prosecution. The fact of the matter is that, here is the petitioner who is found to possess unexplained cash which he tries to explain through conflicting versions. Whether a person Sultan Foumi exists itself now comes under the scanner, since the response of the petitioner to the notice under Sec.24(1) of the Act seems to suggest something different. Could Sultan Foumi be a fictitious character? It is for the petitioner to explain. The stage is too pre-mature for this Court go by the version of the petitioner. Consequently, this Court does not consider there is merit in this writ petition, and hence dismissed Customs 2023 (9) TMI 199 Refund of excess duty paid - time barred or not - application filed beyond a period of one year from the date of payment of duty - Section 27 of the Customs Act - whether there has been a mistake and whether the said mistake in having paid excess or double duty, in the present case, was bonafide or not? - HELD THAT:- Petitioner is a corporate involved in various kinds of businesses, having eight divisions expected to be guided and advised by a professional set of Managers as well as Chartered Accountants. To demonstrate bonafides, a corporate of the stature of the Petitioner ought to demonstrate that due care and diligence were exercised. Admittedly, although the payment of excess duty was made in July, 2017, it is only in 2019 that while conducting an internal audit, the mistake that Petitioner had paid excess customs duty was noticed and it is only thereafter that pursuant to a certificate dated 2.7.2019 by Petitioner s Chartered Accountants that Petitioner engaged with the Customs Department. All that the Certificate states is that based on verification of such records as produced to them and as per the information and explanation given to them by the Petitioner, they have certified that the Company filed a claim for refund of the IGST paid as the same was paid twice against the import of the components - There is no whisper of the time or the circumstances under which said mistake was discovered by the Petitioners. It appears that the said certificate had been issued at the behest of the Petitioner itself and the certificate nowhere suggests that the Chartered Accountants had discovered the mistake at a point in time and brought it to the notice of the Petitioner. The Petitioner has relied upon the decision of the Hon ble Supreme Court in the case of Vedanta Limited vs. Commissioner of Customs (Port) and Anr. [ 2016 (12) TMI 266 - SC ORDER ] . The Petitioner therein had filed application for refund of the amount of the customs duty paid in excess as the goods for export were short shipped. The Commissioner of Customs had rejected the refund application as being made beyond the prescribed time. The Hon ble Supreme Court held that the provisions of Section 27 of the Customs Act would not apply to the case on its plain language and accordingly directed refund of the excess amount of customs duty to be paid within a specified time - decision in the case of Vedanta Limited vs. Commissioner of Customs (Port) and Another would not apply to the facts of this case, as in that case the goods were short shipped, which meant no duty could be levied and there is no finding that the mistake was not bonafide, but that is not the case here. In the facts of the present case, the Petitioner has not been able to establish that the mistake was bonafide. Section 27 of the Customs Act clearly requires that any person claiming refund of any duty is to make an application in the form or manner as may be prescribed before the expiry of one year from the date of payment of such duty or interest. In the present case, the petitioner has filed refund application on 30.07.2019, after more than two years of payment of duty and therefore, even if the date of 11.7.2017 is considered as the payment of duty, the one year would end on 10 July 2018 which is clearly beyond the period of one year as contemplated by the Customs Act and is barred by limitation. The claim of refund made by the Petitioner nowhere states or submits that the tax or duty had been claimed or collected by misinterpreting or misapplying the provisions of law. There would therefore be no question of unjust enrichment as claimed by the Petitioner in the Respondent no. 3 rejecting the refund claim on the ground of limitation. Further, the period of ninety days has expired much before 16 March 2020, and therefore, the benefit of the suo motu order of the Hon'ble Apex Court extending or excluding the time period between 16 March 2020 and 20 February 2022 on account of Covid-19 pandemic, as claimed by the Petitoner, would also not be available to the Petitioner - it is clear that the Petitioner has been negligent in pursuing its statutory remedies and now is seeking the indulgence of this Court in its writ jurisdiction which we are not inclined to exercise as we have found that the Petitioner has not been able to establish that the mistake was bonafide nor has the Petitioner come with clean hands. In the facts and circumstances of this case, no interference is called for in the impugned order dated 8 November 2019 passed by the Assistant Commissioner of Customs, Refund Section, ACC, Mumbai, under Section 27 of the Customs Act, 1962 - Petition dismissed. 2023 (9) TMI 198 Seeking release of seized gold - smuggling - possession acquired licitly of illicitly - Discharge of onus to prove - retraction of statements - HELD THAT:- All the sets of these invoices have been found be false, forged, fictitious, manipulated and hence ab initio void. Invoices recovered/produced at the time of seizure were initially claimed as cover documents for the acquisition of the seized gold. R.K Angangbi Singh, the claimant of the said gold himself had negated these invoices and he produced different set of invoices on 09.09.2014 claiming them as the actual set of documents for the said gold under seizure - It is thus apparent that R.K Angangbi Singh had produced/submitted different sets of invoices in a deliberate attempt to mislead the investigations and as an act of afterthought as well as to justify transportation of smuggled goods and in an attempt to discharge the onus cast upon the under Section 123 of the Act. It is evident that the description of the purchase invoices in transit challan produced before the Hon ble High Court, Shillong did not tally with the purchase invoices recovered at the time of seizure. Since, the transit challan records did not match with the recovered purchase invoices it is clear that the transit challan too were fabricated, and presented subsequently, like various other documents and submitted as an afterthought perhaps to even mislead the judiciary; besides being a failed attempt to justify transportation of the smuggled goods. The Hon ble Supreme Court in case of KI. PAVUNNY VERSUS ASSTT. COLLR. (HQ.) , C. EX. COLLECTORATE, COCHIN [ 1997 (2) TMI 97 - SUPREME COURT] had held that a mere general corroboration is sufficient and each of the detail was not required to be gone into. It even upheld the validity of the statement, containing wealth of information that was retracted in close proximity of making it and therefore disallowed the said retraction. Thus, no case is made out by the appellants, calling for interference in the impugned order passed by the Ld. Commissioner. The same is therefore upheld and the appeals filed are dismissed. 2023 (9) TMI 197 Classification of imported goods - Imaging Plates - Imaging Cassettes - Department is of the view that the goods fall under CTH 37011010 whereas the appellant (importer) has adopted the classification under CTH 90229090 - HELD THAT:- The very same issue as to the classification of Imaging Plates and Cassettes came up for consideration before the Tribunal in the case of Jindal Photo Ltd. [ 2014 (2) TMI 540 - CESTAT MUMBAI ]. The Tribunal in the said case held that the goods are classifiable under CTH 90189090 and are eligible for the benefit of Notification No.21/2002-Cus. The importer therein had adopted the classification under 90189099 and not under 90229090. As per the decision in FUJIFILM INDIA PVT LTD. VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , NHAVA SHEVA [ 2015 (1) TMI 839 - CESTAT MUMBAI ] the Tribunal doubted the classification decided in the case of M/s.Jindal Photos Ltd. [ 2014 (2) TMI 540 - CESTAT MUMBAI ] under 90189099 and held that the IP plates and Cassettes are rightly classifiable under CTH 370110. However, it was held that these are accessories. The Tribunal categorically observed that it is not a part. It was also observed that the benefit of notification 21/2002 would be available even if the goods fall under CTH 370110, as the Sl.No.357B of the notification covers all goods falling under Chapter 90 or any other chapter - The assessee being aggrieved by the redetermination of classification under 3701 filed appeal before the Hon ble Apex Court. As per the judgement reported in FUJIFILM INDIA PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS (IMPORT) NHAVA SHEVA [ 2017 (4) TMI 635 - SUPREME COURT ] it was held that as there was already a decision of co-ordinate bench in the case of M/s.Jindal Photo Ltd. [ 2014 (2) TMI 540 - CESTAT MUMBAI ] the Tribunal ought not to have deviated. In case of doubt should have sought for Larger Bench. It was observed that as the dispute before the Tribunal was only with regard to the eligibility of notification, the Tribunal ought not to have disturbed the classification. From the above it can be seen that in the case of Fujifilms Pvt. Ltd. the classification of the goods has been settled to be under 90229090. So also, the department in the OIO dt. 23.09.2011 has held the goods to be classifiable under 90229090 against which no appeal has been filed by the department. We therefore hold that the classification adopted by the appellant under CTH 90229090 is to be sustained. The re-determination of classification under CTH 370110 is set aside. Whether the goods are eligible for exemption under notification 21/2002? - HELD THAT:- The Commissioner (Appeals) has not made any discussion as to how the impugned goods fall under the category of consumables and not accessories . The meaning of accessory has to be understood in relation to the nature of the main machine and the type of accessory in relation to which it is used. The Tribunal in the case of Fujifilm (P) Ltd. (2nd round of litigation) has held that the impugned goods being accessories are eligible for the benefit of notification. The imported goods merit classification under CTH 90229090 and are eligible for benefit of exemption under Notification No.21/2002-Cus. The impugned orders are set aside - Appeal allowed. 2023 (9) TMI 195 Valuation of imported goods - old and used worn clothing, completely fumigated - restricted item - enhancement of value - HELD THAT:- This issue came up before this Tribunal in the case of VENUS TRADERS, RAINBOW INTERNATIONAL, AL-YASEEN ENTERPRISES, GLOBE INTERNATIONAL, KRISHNA EXPORT CORPORATION, PRECISION IMPEX, BMC SPINNERS PVT. LTD., SHIVAM TRADERS, LEELA WOOLEN MILLS, M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI [ 2018 (11) TMI 625 - CESTAT MUMBAI ], wherein this Tribunal has held that The failure of the original authority to comply with the direction in remand to disclose the margin of profit that prompted the fine and penalty, the matter would normally have to be remitted back by another remand order. However, the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so. Against the confirmed duties and the penalties the Redemption Fine imposed by the Adjudicating Authority, the Respondent has not filed any appeals - the redemption fine and penalty imposed on the respondents by the adjudicating authority is sufficient to meet the end of justice. Therefore, the redemption fine and penalty confirmed by the adjudicating authority are upheld. There are no infirmity in the impugned order and the same are upheld - appeals filed by the Revenue are dismissed. 2023 (9) TMI 194 Levy of penalty u/s 112 of CA - Allegation against the employees of ICICI Bank - Forged letters - issuance of project implementation authority certificate - recovery of duty foregone by recourse to notification no. 84/97-Cus dated 11th November 1997 on imports - principal plea of the appellants is that the Tribunal had, in appeal of both M/s Rashtriya Chemicals Fertilizers Ltd and M/s ICICI Bank Ltd, held that duty was not leviable owing to substantive compliance with the intent of the said notification - HELD THAT:- Imposition of penalties under section 112 of Customs Act, 1962 on persons is triggered by finding that, in relation to goods liable to confiscation under section 111 of Customs Act, 1962, acts of omission and commission have rendered such outcome. The role of individuals must, therefore, be subjected to scrutiny in relation to the facts that have rendered the goods liable for confiscation. Undoubtedly, on that the Tribunal is categorical. It appears that the factual matrix therein is inextricably enmeshed with the project implementation authority certificate and the relevance of that certificate to legal consequence of its validity has been decided by the Tribunal in the appeals of M/S. RASHTRIYA CHEMICALS FERTILIZERS LTD., M/S. ICICI BANK LTD. VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI. [ 2019 (7) TMI 1987 - CESTAT MUMBAI] . There is, thus, material alteration of the narrative of the case and consequence. The roles of the appellants would need to be evaluated within the rubric of the altered narrative and it could well be that the impugned order, in such circumstances, lacks detail that may be necessary to decide the present appeals. It would, therefore, be appropriate for the allegation against the two appellants to be considered afresh in adjudication for which purpose, the impugned order is set aside and matter remanded to the original authority for fresh decision. The two appellants herein should be afforded an opportunity to be heard in person in accordance with law. Appeal remanded. Insolvency & Bankruptcy 2023 (9) TMI 193 Condonation of delay of 14 days in preferring appeal - Section 61(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Admittedly in the instant case, the Appeal , came to be filed on 15.06.2023, through e-portal of the Office of the Registry, National Company Law Appellate Tribunal, Chennai Bench . To put it succinctly, the instant Appeal , came to be filed after delay of 30 days, but not acceding (30 + 15 = 45 days) and exactly it was filed on 44th day, which is well within the condonable period, as per Section 61(2) of the Insolvency and Bankruptcy Code, 2016. In view of the fact that the Petitioners / Appellants have come out with reasons, to the effect, that the Petitioners / Appellants are in Kerala and it took some time for collating and preparing the documents and that apart, it took some time to procure the legible copy of the same etc., this Tribunal , by taking a pragmatic, purposeful and rational and meaningful approach and adopting a hyper-technical view, condones the `Delay of 14 days , and furtherance to `Substantial Cause of Justice . No costs. 2023 (9) TMI 192 Seeking consolidation of the Corporate Insolvency Resolution Process (CIRP) in relation to both the Companies (RISPL and RPPL). Whether the appellant is an operational creditor under the IBC even though it was a purchaser ? - HELD THAT:- The Hon ble Apex Court in the Judgment Consolidated Construction Consortium Limited Vs. Hitro Energy Solutions Pvt. Ltd. [ 2022 (2) TMI 254 - SUPREME COURT ] concluded that the Appellant is an Operational Creditor under the IBC, since an Operational Debt will include a debt arising from a Contract in relation to the supply of goods and services from the Corporate Debtor - In the instant case, it is an admitted fact that RPPL is a holding Company and RISPL is a Subsidiary Company providing Operation and Maintenance Services to the Wind Energy Turbines / Wind Energy Generators monitored and held by the Holding Company RPPL to its customers. This Tribunal is of the earnest view that these Appellants fall within the ambit of the definition of Operational Creditors as defined under Section 5 (20) of the Code and therefore, these Appeals are maintainable. Whether the businesses of RPPL and RISPL are intertwined and integrated and whether the criteria required for Consolidation of these two CIRPs is met? - HELD THAT:- A perusal of the material on record shows that there is no rebuttal by RPPL regarding the issues of interlinked finances , common assets , common liabilities and common directors . This Tribunal is conscious of the fact that the Ministry of Renewable Energy has clearly specified in its Regulations that the manufacturer has to provide the O M Services as well. The Resolution Professional of RISPL has submitted that all the O M Equipment in possession of RISPL is actually owned by RPPL; that despite the O M Agreement, RPPL continues to have obligation; that RISPL has received huge sums of liquidated damages every year solely because RPPL has not refurbished the failed Wind Energy Generators on time; that RPPL has created another Subsidiary called ROMSL and there are some liabilities. From the Report of the Mediator, it is clear that at the outset, there was unanimity that the Resolution Plan must be a single one for both the Companies and the efforts must be to identify a single entity for purchase of both the Companies . This unanimity was arrived at by the Mediator after prolonged sessions with the Resolution Professionals and the CoCs of both the Companies. It was also observed by the Mediator in the Report that attempts were made to formulate a course of action through appropriate Resolution Plans that could be submitted to the CoCs, but there were same reservations. This Tribunal is of the considered view that the financial revival of one Company / Corporate Debtor will be closely linked to the Financial Health of the other Company if there is intricate Financial relationship between the two having the same set of Directors. Then it stands to reason that such Units should be looked at jointly - since the Order of Admission is not under challenge before this Tribunal, this Appellate Tribunal is not adjudicating on this issue at this point of time. This Tribunal is of the considered view that Consolidation of the CIRPs be allowed and the Impugned Order of the Adjudicating Authority dated 01/11/2021 is set aside - Appeal disposed off. 2023 (9) TMI 191 Rejection of claim - ambit and scope of Reconciliation of accounts - claim relating to Bank Guarantees issued by JAL invoked by the Lenders of JIL is the amount which need to be adjusted/deducted from the amount payable to JIL or not - Mutually settlement of claim. What is the ambit and scope of Reconciliation of accounts between JAL JIL as per directions of the Supreme Court in Jaypee Kensington Judgment [ 2021 (3) TMI 1143 - SUPREME COURT ]? - HELD THAT:- The Adjudicating Authority rightly came to the conclusion that the determination was of the amount which was receivable by JIL/Homebuyers of JIL - a very wide submission made by Shri Krishnan Venugopal on behalf of the JAL that reconciliation required adjustment of claims of both JAL and JIL, cannot be accepted - the purpose was to refund Rs.750 Crores to JAL and from the said amount, the amount payable to JIL was to be retained. The Hon ble Supreme Court has further confined the determination to only the accounts concerning the amounts advanced to JAL by JIL towards construction contracts . It is true that extent of liabilities discharged by JAL towards the above was also to be taken care of, for which purpose reconciliation was directed. Thus, the limited scope was with regard to advance given by JIL to JAL towards the construction contract. How much liabilities have been discharged by JAL was possible by reconciliation of the financial statements of both JIL and JAL which was done by Grant Thornton appointed by the Adjudicating Authority. Ambit and scope of reconciliation of account between JAL and JIL was concerning the amounts advanced to JAL by JIL towards construction contracts and extent of liabilities discharged by JAL. The reconciliation was not to find out what amount was payable to JAL by JIL. Whether the claim of Rs.212 Crores relating to Bank Guarantees issued by JAL invoked by the Lenders of JIL is the amount which need to be adjusted/deducted from the amount payable to JIL? - HELD THAT:- It is clear that the amount of Rs.212 crores related to the Bank Guarantees invoked by the lenders of JIL was the amount not referable to any advance given by JIL to JAL for construction purpose. The amount of Rs.212 crores is already claimed by JAL in CIRP of JIL as is clear from the claim filed by JAL in Form B, as extracted above. When the JAL has already filed its claim in the CIRP process of JIL which includes Rs.212 crores towards invocation of Bank Guarantees, there is no occasion for deducting the said amount from the amount of Rs.750 crores deposited by JAL. The treatment of amount of Rs.212 crores has to be as per the IBC proceeding - the finding of the Adjudicating Authority that JAL is entitled to retain amount of Rs.212 crores out of Rs.750 crores is unsustainable. The amount of Rs.212 crores which is related to the invocation of Bank Guarantees cannot be subject matter of reconciliation process. Whether RA Bill for construction amounting to Rs.49.63 Crores payable by JIL to JAL should have been deducted from amount payable to JIL? - Whether the Facility Management Bills raised by JAL on JIL of Rs.2.33 Crores ought to have been deducted from the amount to be paid to JIL? - Whether amount of Rs.1.19 Crores towards providing Hospitality Services ought to have been deducted from the amount payable to JIL? - HELD THAT:- While considering Point No.1 opined that reconciliation between accounts of JAL and JIL was not for purpose of finding out amount which is payable to JAL from JIL rather the determination was towards the amount which is receivable by JIL out of the advance given to the JAL regarding construction - RA Bill for construction amounting to Rs.49.63 Crores payable by JIL to JAL could not be deducted from amount payable to JIL - The Facility Management Bills raised by JAL on JIL of Rs.2.33 Crores could not be deducted from the amount to be paid to JIL - Amount of Rs.1.19 Crores towards providing Hospitality Services could not be deducted from the amount payable to JIL. Whether the Adjudicating Authority on account of mutually settled amount totaling to Rs.12.26 Crores ought not to have added amount of Rs.6.13 Crores in the amount receivable by JIL? - HELD THAT:- The amount payable to JAL was not to be taken into consideration and amount payable to JIL was only to be taken into consideration. As per mutual resolution, Rs.6.13 crores was receivable by JIL. The said amount has rightly been included in the amount payable to JIL in Para 110 of the order of Adjudicating Authority. We do not find any merit in the submission of Appellant and no error is committed by the Adjudicating Authority in adding amount of Rs.6.13 crores in the amount receivable by JIL - Adjudicating Authority on account of mutually settled amount totalling to Rs.12.26 Crores has not committed any error in adding amount of Rs.6.13 Crores in the amount receivable by JIL. Whether direction of the Adjudicating Authority in paragraph 111 directing for payment to JIL/Home-Buyers of JIL of Rs.649.52 Crores with proportionate interest is unsustainable? - HELD THAT:- It is not the case of the JIL that mobilization advance was given by JIL to JAL which carried any interest nor it is submission of JIL that Interest Free Maintenance Deposit carries interest. When the amount which was receivable by JIL as found by Adjudicating Authority did not carry any interest, direction by the Adjudicating Authority to pay said amount alongwith proportionate interest was uncalled for - the direction issued by the Adjudicating Authority in Para 111 for payment of proportionate interest is unsustainable. Whether JIL is entitled for amount of Rs.70.89 Crores towards Land Swap Deal and the Adjudicating Authority has wrongly rejected the said claim? - HELD THAT:- Even though as per the financial statement of JIL, the amount of Rs.70.89 crore was payable as Trade Receivables the same cannot be part of the reconciliation process which is confined to the advance made by JIL to JAL towards construction contracts. Sub-lease Deeds were executed by JIL to discharge the liability of JAL to its lenders which transaction has rightly been treated by Grant Thornton to be outside the realm of reconciliation process - there are no error in the order of Adjudicating Authority rejecting claim of Rs.70.89 crore of JIL towards Land Swap Deals - JIL is not entitled for amount of Rs.70.89 Crores towards Land Swap Deal and the Adjudicating Authority has rightly rejected the said claim. Appeal disposed off. 2023 (9) TMI 190 Maintainability of application - initiation of CIRP - Operational Creditors - Pre-Existing Dispute or not - HELD THAT:- There are uncertain forces in the submissions on behalf of the Counsel for the Appellant that the Adjudicating Authority while passing the Impugned Order failed to consider the correspondences between the Appellant and Respondent No. 1 dated 17.06.2018 to 22.06.2018. Further, the Adjudicating Authority has also not considered paras 5 6 of the Reply Affidavit filed by the Respondent (Appellant herein) before the Adjudicating Authority in correct perspective. The Corporate Debtor is released from the rigours of CIRP and is allowed to function independently through its Board of Directors with immediate effect. The Resolution Professional shall however be paid his fees/expenses by the Operational Creditor. The Impugned Judgement passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court-I) cannot be sustained in the eye of law - Appeal allowed. PMLA 2023 (9) TMI 189 Money Laundering - proceeds of crime - seeking release of the attached properties - it was held by High Court that In view of the settled legal position in VIJAY MADANLAL CHOUDHARY ORS. VERSUS UNION OF INDIA ORS. [ 2022 (7) TMI 1316 - SUPREME COURT] an d the subsequent decisions and orders thereafter, the properties of Mr. Sachin Joshi and M/s. Muktanand Agro Farming Pvt. Ltd. which were attached by the impugned PAOs shall be released - HELD THAT:- There are no reason to interfere with the impugned judgment/order and hence, the special leave petition is dismissed. 2023 (9) TMI 188 Provisional Attachment Order - scheduled offences or not - the proceedings against the Petitioner, its directors, and shareholders in the scheduled offense as also the offense under the PMLA have been closed - it was held by High Court that The PAO deserves to be quashed in view of the legal position as held in the above judgments. HELD THAT:- There are no reason to interfere with the impugned judgment/order and hence, the special leave petition is dismissed. 2023 (9) TMI 187 Money Laundering - seeking grant of bail - accused is a woman - Section 45 of the Prevention of Money Laundering Act 2002 - HELD THAT:- The proviso to Section 45 of the Prevention of Money Laundering Act 2002 confers a discretion on the Court to grant bail where the accused is a woman. Similar provisions of Section 437 of the Code of Criminal Procedure 1973 have been interpreted by this Court to mean that the statutory provision does not mean that person specified in the first proviso to sub-section (1) of Section 437 should necessarily be released on bail. Considerations which weigh in the grant of bail are distinct from those which are relevant to the adjudication of an application for cancellation of bail. The respondent has undergone over 620 days of custody. Since in the exercise of its discretion, the High Court has come to the conclusion that the respondent should be released on bail, we are not interfering with the order under Article 136 of the Constitution. The respondent is released on bail subject to conditions imposed - SLP disposed off. 2023 (9) TMI 186 Money Laundering - seeking grant of bail - scheduled offences - use of proceeds of crime - statement of witnesses as recorded under section 50(3) of PML Act, not supporting the allegation - Reasons to believe - non-cooperation during investigation - HELD THAT:- Petitioner is accused in 8 criminal cases which appears schedule offence in terms of the Act, proceeds of which prima facie appears to create huge property and cash, further. Petitioner fails to furnish prima facie satisfactory explanation regarding huge fixed assets and cash available with him, while recording his statement under section 50(3) of the Act, where it appears to investigating agency that petitioner is not co-operating during investigation, where investigation regarding remaining proceeds of crime above Rs. 4,04,29,415.29/- is still going on. Therefore, this Court at this stage has no reasonable grounds for believing that petitioner is not guilty of offence and he is not likely to commit offence while on bail. The prayer of bail of petitioner is rejected herewith. 2023 (9) TMI 185 Money Laundering - scheduled offence - proceeds of crime - Freezing of Bank Accounts of petitioner - Constitutional Validity of Section 6(5)(b) and Section 6(7) Prevention of Money Laundering Act, 2002 - constitution of Bench of the Adjudicating Authority by the Chairperson with two or more Members including one Judicial Member - transfer of the case by a chairperson - HELD THAT:- The Prevention of Money Laundering Act, 2002 (PMLA) is an Act to prevent money laundering and to provide for confiscation of property derived from, or involved in, money laundering and for matters connected therewith or incidental thereto - a person would be guilty of committing an offence of money laundering under Section 3 of PMLA if he directly or indirectly or knowingly attempts to indulge or assist or is a party or is involved in any process or activity connected with such proceeds of crime including its concealment etc., and projecting it as untainted money. There is a distinct difference in the reason to believe appearing in Section 17 and the reason to believe in respect of Section 5. While the reason to believe is for the purpose of attachment under Section 5(1), the reason to believe is for the purpose of search and seizure under sub- section (1) of Section 17. The reason to believe in Section 5(1) is that a person must be in possession of any proceeds of crime and such proceeds of crime are likely to be concealed etc., thereby frustrating any proceeding for confiscation then the Director or the authorised officer may provisionally attach such property - the requirement or the standard of reason to believe in Section 17(1) is on a higher plane than in Section 5(1) inasmuch as the Director or the authorised officer must have reason to believe that the person concerned has committed the offence of money laundering or is in possession of any proceeds of crime involved in money laundering etc., instead of being in possession of any proceeds of crime etc. The proceeds of crime has been defined to mean any property derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence - the definition of proceeds of crime is intrinsically related to property derived or obtained directly or indirectly as a result of any criminal activity relatable to the scheduled offence. In Ramesh Chandra Mehta [ 1968 (10) TMI 50 - SUPREME COURT ] a Constitution Bench of the Supreme Court opined that the customs officer under the Customs Act is not a police officer within the meaning of Section 25 of the Indian Evidence Act, 1872 (Evidence Act) and that the statements made before him by a person who is arrested or against whom an enquiry is made are not covered by Section 25 of the Evidence Act. There are no hesitation in holding that impugned order dated 25.07.2022 is wholly without jurisdiction. It is trite law that if an order is without jurisdiction, the aggrieved party can approach the High Court under Article 226 of the Constitution of India notwithstanding availability of alternative remedy. This settled proposition needs no elaboration - the impugned order is without jurisdiction there being no scheduled offence against the petitioners, it is not necessary to delve into the question as to what would be the impact of not passing an order under sub- section (2) of Section 20 of PMLA on the PMLA proceedings. Petition allowed. Service Tax 2023 (9) TMI 196 Refund of service tax - services used in authorized operations in SEZ during the period October 2010 to December 2010 - whether the claim for refund made in terms of the notification No 9/2009-ST dated 03.03.2009 can be denied just for the reason that the the taxable services in respect of the which the claim has been made, are not mentioned in the list of specified services approved by the SEZ authorities - HELD THAT:- The scheme of SEZ Act, provides for exemption from payment of all taxes to the developer of SEZ or the Units operating in the SEZ. Notification No 9/20009-ST does not provide for any further exemption but provides a mechanism for operation of the said scheme, where a service provider has provided the taxable services to the Unit located in SEZ, on payment of service tax. The conditions specified in the sad notification need to be read accordingly. Article 265 of the Constitution clearly lays down that No taxes can be levied without the authority of law. When the developer of SEZ and units located in the SEZ have been given exemption from payment of all the taxes then any levy and collection of the taxes from such units is without any authority in law and thus contravenes the Article 265. In such a scenario, the amount so collected needs to be refunded to the person from whom such tax has been collected. In the present case revenue has not disputed the receipt of these services by the SEZ Unit, hence denial of the refund claim in respect of these three services for the reason that they did not find mention in the list of specified services approved by the SEZ authority cannot be upheld. The issue involved in the present appeal is no longer res-integra. Similar view has been expressed by the tribunal in M/S. METLIFE GLOBAL OPERATIONS SUPPORT CENTER PRIVATE LIMITED VERSUS COMMISSIONER, SERVICE TAX [ 2020 (12) TMI 1069 - CESTAT NEW DELHI] where it was held that Learned counsel for the appellant submitted the substantive benefit of the service tax exemption provided under section 26 of the SEZ Act and rule 31 of the SEZ Rules cannot be denied by any procedural requirement under a notification - This submission of learned counsel for the appellant deserves to be accepted. There are no merits in the impugned order and the same is set aside - appeal allowed. 2023 (9) TMI 184 CENVAT Credit - invocation of sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004 for demand of amount in respect of 85% component of the consideration received by the appellant, which was subsequently paid to the news media which published the advertisements collected by the appellant. HELD THAT:- The service provider should be providing more than one services and when one of the services provided is exempted, then alone the provisions of sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004 are invokable. In the present case, Revenue has failed to establish that there are more than one services provided by the appellant. Appellant is providing only one service whether it is earlier classified as advertising agency service or subsequently classified as business auxiliary service. Appellant is merely providing one service and, therefore, the provisions of sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004 are not invokable in the present case. Therefore, the demands involved in both the appeals are not sustainable. The impugned order-in-original dated 18.11.2016 is modified to the extent that the demand confirmed to the tune of Rs.4,90,25,118/- is set aside and interest and penalty associated with that imposed on the appellant are set aside - Appeal allowed. 2023 (9) TMI 183 Levy of service tax - Commercial or Industrial Construction Service - works contract service or not - providing of service of civil construction to different Government Organisation/PSU - HELD THAT:- In this case, it is not in dispute that the appellant is providing the services along with materials. Therefore, the merits classification of the above services under Works Contract Service and no demand is raised against the appellant under Works Contract Service . Therefore, following the decision of the Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT ], wherein the Hon ble Apex Court has held Works contract were not chargeable to service tax prior to 1.6.2007. The classification of the impugned service is under Works Contract Service and no demand has been made under Works Contract Service as per the show-cause notice. Therefore, till 30.06.2012, the appellant is not liable to pay any service tax. For the post 30.06.2012, the appellant has paid the service tax in respect of service to BSNL not contesting the same. The adjudicating authority in the impugned order has observed that the certificate issued by Executive Engineer, NPWD (Nagaland Public Works Department), Kohima cannot be accepted as the proof that the said building is not for use for any commercial consideration - It is very strange that the adjudicating authority has not accepted the said Certificate by only saying that the said Certificate cannot be accepted, but did not explain what other documents are required for consideration to find out the activity of construction, the said Guest House is taxable or not? The said Guest House constructed by the appellant for CIDCO, is not liable for service tax as the same is not used for commercial and industrial use. Therefore, the demand with reference to the said Guest House is also set aside - the appellant has admitted the service tax liability with reference to construction services provided to BSNL/Port w.e.f.30.06.2012 and paid the service tax thereon, the same demand is confirmed and rest of the demand confirmed under the impugned order, is set aside. Penalty - HELD THAT:- No penalty is imposable on the appellant. Therefore, the penalty imposed on the appellant is set aside. Appeal allowed in part. 2023 (9) TMI 182 Levy of service tax on ocean freight - reverse charge (RCM) - Matter is pending before the Supreme court, whereas no stay has been granted - Constitutional Validity of N/N.15/2017-ST and Notification No.16/2017-ST making Rule 2(1)(d)(EEC) and Rule 6(7CA) of the Service Tax Rules - inserting Explanation- V to reverse charge notification No.30/2012-ST as ultra vires of Section 64, 66B, 67 and 94 of Finance Act, 1994 - Power of Central Government under Section 94 of the Finance Act for charging and collecting tax on extraterritorial events - HELD THAT:- Neither the SLP filed by the revenue has been admitted nor any stay has been granted by the Hon ble Apex Court against the said order of the Gujarat High Court. That being so the appeal filed by the Revenue contesting the order of Hon ble Gujarat High Court before this tribunal is devoid of any merits. It is settled law that if certain provisions of law or any notification issued under the statute is held ultra vires by any High Court in the country the same is valid law in the jurisdiction of all the High Courts of the country, unless and until jurisdictional High Court or some other High Court gives a contrary view. On specific query as to whether there is any contrary order of any High Court or jurisdictional High Court in the matter which may support the case of the Revenue learned Authorized Representative was not able to point out the same. It is settled law that law as declared by the Hon ble Gujarat High Court is law of land as on date today. The order of Commissioner (Appeal) which follows the said decision cannot be faulted with - Appeal dismissed. Central Excise 2023 (9) TMI 181 Denial of Abatement claim - two FFS packing machines PK-91 GMP Model installed by the Appellant are 'single track' or 'double track' packing machines - determination of Annual Capacity of production and the duty thereon - HELD THAT:- It is found that a track mentioned in the same is the physical embodiment implementing flow along line A feed track mentioned in the report by Dr. Kore is a subsystem level classification, and different from track referred to in No. 11/2010 Central Excise (N.T.) dated 27th February, 2010 - on the basis of study conducted by in past, it is reconfirmed that FFS Packing Machines PK-90/PK-91 GMP model manufactured by Pakona Engineers (I) Pvt. Ltd. are Horizontal, Single Line, Single Track, duplex machines for forming filling and sealing of pouches. Pakona made FFS machines available at the Guwahati factory of the Appellant are PK-91 GMP model and that this model is a variant of PK-90 model, modified for the purpose of production of pouches of different sizes, otherwise the functions and features of both the models are identical. It is observed that the Appellant has been filing declarations as per Rule 6 of the CTPM Rules in 2010 and the Deputy Commissioner has passed orders fixing their Annual Capacity of production and the duty payable thereon, by treating the PK-91 packing machines as 'single track' machines. However, the Deputy Commissioner, Guwahati has not accepted their running declaration for the month of January 2011, based on the investigation initiated by the department in their Noida Unit. The Pakona make PK-91 packing machines installed at Guwahati Unit are identical to the Pakona make PK-90 packing machines installed at their Noida unit, which is evident from the Technical Literature as well as the report of IIT, Delhi - the department cannot raise any demand for the past period without challenging those orders. In January 2011, when they filed the Form-1 for fixing the Annaual Capacity of production, the Deputy Commissioner has passed order dated 05.01.2011, without issuing any notice to the Appellant. The Lower Authority has suo moto passed the impugned Order-in-Original without giving any chance of hearing to the opposition party, thereby denied their right of natural justice - Lower Authority has erred in not issuing the Show cause Notice to the Appellant for modifying the Annual Capacity of production of the disputed machine from 'Single track' to 'Double track' - Lower Authority has erred by reviewing his own order, thereby violated Section 35 of the Central Excise Act, 1944. Thus, the two PK-91 GMP Model packing machines are 'single track' machines. The demand of duty confirmed in the impugned order by treating the machines as 'Double Track' machines is not sustainable - the impugned order confirming the demand of duty along with interest and imposing penalty equivalent to the duty, is set aside, and the Appeal filed by the appellant is allowed. 2023 (9) TMI 180 SSI Exemption - clubbing of clearances of all the manufacturing units including one which is duty paying unit - value of clearances exceeded Rs.1.5 crores - mutuality of interest - HELD THAT:- N/N. 8/2003 grants exemption from payment of excise duty in case of Small Scale Industrial units whose value of clearances does not exceed Rs.1.5 crores. This exemption is subject to certain conditions. The SCN dt. 27.03.2014 alleges that the aggregate value of clearances made by Balaji Packagings (BPKG) for the period 2008-09 (01.03.2009 to 31.03.2009) to 2012-13 should be calculated by clubbing the clearances of the clearances made by factories BPKG, SHP, BP, BC, KRK and BPI and also value of goods manufactured by job workers Naga and SPPI and also sales turnover of SAP, SPP, SBPT, SEP and BIP in terms of para 2 (v) and 2 (vii) of notification 8/2003. It has to be stated that the department is a bit confused as to the provisions of Notification 8/2003 which have been invoked in the SCN. Para 2(v) speaks about the situation for calculation of aggregate value of clearances for exemption limit (Rs.1.5 crore) when a manufacturer has one or more factories. It states that for the purpose of calculating the value of aggregate clearances the value of clearances of each factory of manufacturer should not be considered separately - Although it is alleged that BPKG which is run by GTP (Group of Three Persons) has exceeded the exemption limit and other units are dummy units, it is also alleged that BPI has exceeded the exemption limit of Rs.4 crores in terms of para 2 (vii). Admittedly, BPI is a firm which holds Central Excise registration and is paying excise duty. In other words, it does not avail SSI benefit. The unit BPI clears its goods on payment of duty. This fact has been accepted by the adjudicating authority. The duty liability raised in SCN is Rs.2,43,82,782/-. Taking into consideration the duty paid by BPI (Rs.16,60,246/-) the amount confirmed was reduced by the adjudicating authority to Rs.2,27,22,336/- (para 11.01 of OIO). In the absence of such evidence, the above view taken by the Commissioner (Appeals) according to us is legal and proper. It is also observed that the burden to prove clandestine removal of goods is on the department. In case of clubbing of clearances of different units to deny the SSI exemption benefit there should be concrete evidence of mutuality of interest, financial flow among the units. In the case of STUDIOLINE INTERIOR SYSTEMS PVT. LTD. VERSUS COMMR. OF C. EX., BANGALORE-I [ 2005 (11) TMI 14 - CESTAT, BANGALORE] it was held that mere presence of common directors / partners cannot be reason for clubbing of clearances. The interest of parties directly or indirectly in the business of each other and flow back of profit of one unit to another has to be proved. When units belong to a group of persons, occasional financial accommodations may not be uncommon. When each unit is registered with Central Excise / State authorities there should be clear evidence to treat them as dummy units. All the eleven units are held to be dummy units by the department and the demand of duty is raised against a new unit i.e. BPKG run and operated by GTP. The unit BPKG has three partners viz. Smt. R. Rukmani, V. Nagaraj Sri A. Subbiah - there can be partners in a partnership firm who are not actively involved in the business of the firm. The law considers them as sleeping partners. Such sleeping partner shares profits and losses of the firm and cannot be disregarded or removed from rights and responsibilities of the firm. Smt. R. Rukmani is the Proprietor of Balaji Industries Pack (BIP). Smt. N. Devaki w/o Sri V. Nagaraj is a Partner in BPI which is a duty paying unit. Smt. R. Rukmani and Smt. N. Devaki are considered as dummy partners by department as per the table given in para 10.1.2 of the SCN dt. 27.03.2014. Another main allegation is that Sri Kasi Viswanath was the accountant common to all firms who was maintaining the accounts. So also that all firms had common office premises at BPI. It has been held in various decisions that merely because the accounts were maintained at a common office, or the workers were same, it cannot be said that there is mutuality of interest. To establish mutuality of interest there should be some evidence to show that the profits of all the firms are taken by one or few persons only. In the present case, all the units are filing sales tax return, income tax return etc. separately. The department has failed to establish the allegations raised in SCN for clubbing of clearances of the 11 firms. Further, the creation of a fictitious/deemed group (GTP) to be responsible for clandestine activities also does not find favor with us. As per the provisions contained in the Partnership Act 1932, persons can come together to form a partnership firm. Such a partnership can be terminated or dissolved only as per law - The department has, in fact, made all eleven units to be dummy units and created a new entity BPKG run and operated by GTP to be responsible for the clandestine activities. The provisions of law do not permit the same. The impugned order cannot sustain - Appeal allowed. 2023 (9) TMI 179 Reversal of CENVAT Credit - eligibility to proportionate credit in respect of naphtha used for generation of electricity to the extent such electricity was used for production purposes in the power plant i.e. to run the power plant itself - period April 2006 to January 2011 - suppression of facts or not - extended period of limitation - HELD THAT:- Having regard to the ratio of the judgment of the Hon ble Supreme Court in M/S. MARUTI SUZUKI LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-III [ 2009 (8) TMI 14 - SUPREME COURT] , it is indisputable that naphtha used in the power plant to produce electricity which was used in the power plant itself for the production of electricity is an 'inpu' within the meaning of rule 2(k) of the 2004 Rules. As held by the Hon ble Supreme Court, electricity generation also forms part of the manufacturing activity and the input used in that electricity generation is an input used in the manufacture of final product . Period from April 1, 2008 to January 31, 2011 - HELD THAT:- As held by the Hon'ble Supreme Court in the case of M/S. MARUTI SUZUKI LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-III [ 2009 (8) TMI 14 - SUPREME COURT] and by the Tribunal in Appellant's own case, the naphtha used for generation of electricity, which is consumed within the factory of production is an eligible 'input'. Accordingly, the Appellant is eligible for the Cenvat credit availed on naphtha, which is used for generation of electricity and consumed within the factory of production. Period from April 1, 2006 to March 31, 2008 - HELD THAT:- The impugned order has held that Cenvat credit was not admissible in respect of naphtha used to produce electricity which was used for production purposes in the power plant itself, on a totally different ground. The Commissioner sought to distinguish the reported decision in Appellant's own case HALDIA PETROCHEMICALS LTD. VERSUS COMMISSIONER OF C. EX., HALDIA [ 2005 (1) TMI 306 - CESTAT, NEW DELHI] on the ground that in the instant case electricity was also sent to the housing colony and Praxair India Ltd. and was also used in the power plant for administrative purposes - It is observed that this was also the case during the period involved in the reported decision. During the earlier period also, the Appellant had reversed the proportionate Cenvat credit in respect of naphtha referable to electricity so used and such use of electricity cannot be a reason for not following the reported decision in Appellant's own case - the grounds raised by the Commissioner in the impugned order to deny the credit availed on naphtha sent for job work for generation of electricity is not tenable. Extended period of Limitation - suppression of facts or not - HELD THAT:- A perusal of the copy of working details relating to reversal of credit for the months of January 2005 and February 2005 submitted by the Appellant to the Superintendent of Central Excise vide letter dated April 28, 2005, indicate that the Appellant has separately given the bifurcation of the quantum of electricity consumed in the power plant for its production operations. Accordingly, the grounds raised in the impugned order for invoking extended period not tenable. As there is no suppression of fact involved and the entire issue was within the knowledge of the department, it is held that the demand confirmed in the impugned order is not sustainable on the ground of limitation also. The demand confirmed in the impugned order is not sustainable and is set aside - appeal allowed on merit as well as on limitation. 2023 (9) TMI 178 Continuance of the adjudicating proceedings against the co-noticees (Directors) when the subject matter of the show cause notice has been settled by the main noticee viz. the Company under SVLDR Scheme - Section 124 (1) of the Finance (No.2) Act, 2019 - HELD THAT:- The Circular No.1071/4/2019-CX.8 dated 27.08.2019 as well as the FAQ, the co-noticee has a responsibility to opt or apply for the scheme, once the main notice has been issued the discharge certificate of the duty liability, which in the present case, the appellant has failed to do so. It is opined that this is only a procedural flow, for which the appellant cannot be burdened with the liability of penalty, in asmuch as, there is no loss to the Revenue. The amount proposed in the show cause notice stands settled with the issuance of the discharge certificate issued in favour of the main noticee. The interpretation placed is based on the provisions of the Circular, which explains that the scheme is a bold endeavor to unload the baggage relating to the legacy taxes viz. central excise and service tax that have been subsumed under GST and allow business to make a new beginning and focus on new GST, therefore, it is incumbent on all the officers and staff of CBIC to be partner with the trade and industry to make the scheme a grand success. This Tribunal in similar circumstances has set aside the said penalty imposed in the case of SHRI B.V. KSHATRIYA VERSUS COMMISSIONER OF GST CE, NASHIK [ 2023 (5) TMI 858 - CESTAT MUMBAI] . The impugned order and the penalty imposed on the appellants set aside - appeal allowed. 2023 (9) TMI 177 Demand of differential duty - finalization of provisional assessment - deduction of distributors discount as provided in the contract - it is the contention of the respondents that the assessable value has to be determined on normal transaction value after allowing the distributors discounts and other discounts, such as, quantity discounts, cash discounts, PME etc. - HELD THAT:- The adjudicating authority held that in terms of the agreements entered into between the respondent and the distributors, the respondent has imposed such conditions on the distributors, which meant that the distributors were being controlled in all respects by the respondents. In effect, the distributors were the agents of the respondents. There was no question of deduction of the discounts payable by the respondent to the distributors. Further, the goods could be assessed to duty on the value which could be determined under Section 4 (1)(a) of the Central Excise Act, 1944. Thus, it is not necessary to charge the duty on the normal transaction value as claimed by the respondents. Further, in view of the relationship of the distributors as that of agents, the deduction of discounts claimed by the respondents for various calendar years was not permissible. However, the respondent was entitled to deductions on account of cash discounts, quantity discounts, PME etc. In terms of the agreement with the distributors, the goods were purchased by the distributors at the rates fixed by the respondents from time to time and it is expressly provided in the agreement that all the transactions between the respondent and the distributor are on principal to principal basis and nothing in the agreement shall constitute or be deemed to constitute by either party as the agent of the other - the valuation of the goods cannot be done in terms of 4 (1)(a) of the Central Excise Act, 1944 as the goods are not sold for delivery at the time and place of removal, the time of removal being the time at which the goods were cleared from the factory. In this case, the sale of the goods from C F Agents, premises is at a time , which is subsequent to the time of removal i.e. subsequent to the time at which such goods have been removed from the factory. Therefore, the valuation of goods shall be governed by Section 4(1)(b) of the Act and the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - the valuation of the said goods is to be done under 4(1)(b) of the Central Excise Act, 1944 i.e normal transaction value. The respondents are entitled to deductions of discount as claimed from the value of the goods and the ld. Commissioner (Appeals) has gone through the issues and held so - there are no infirmity with the impugned order and accordingly, the same is upheld - the appeals field by the Revenue are dismissed. 2023 (9) TMI 176 Refund claim alongwith interest - duty paid under protest - unjust enrichment - SSI Exemption - clubbing of clearances - clearances beyond exemption limit - denial of benefit of exemption Notification dated 01.03.1978 - HELD THAT:- The said issue has been settled by this Tribunal vide its Order dated 06.10.1986, wherein this Tribunal has observed that appellants cannot be denied the benefit of Notification No. 71/78. In view of the orders dated 06.10.1986, 15.12.1986 25.10.1989 of this Tribunal, the appellants filed various refund claims on various occasions in the years 1986 and 1989. Thereafter, various show-cause notices were issued to the appellants to deny the said refund claim on the ground that the said refund claims are barred by limitation and the provisions laid down under Rule 233B of the Central Excise Act, 1944 for payment of duty under protest have not been observed by the appellants. The refund claims were rejected , but on appeal the ld.Commissioner (Appeals) of Allahabad Calcutta, held that the duty was paid under protest after following the procedure of Rule 233B and hence refund claim cannot be treated as time barred and remanded back the matter to the Assistant Commissioner for entertaining the refund claim, but the refund claims were rejected on the ground of unjust enrichment on 31st January, 1992. On going through the said and the certificate issued by the recipient of the goods, it is clear that the duty component has been borne by the appellants themselves. Moreover, the appellants have cleared the good to Bihar State Electricity Board under IBRD Financed Project and for the said clearance, the appellant is not liable to pay duty at all on their clearance, but the fact that the appellants were denied the benefit of SSI exemption, therefore, the appellants paid duty under protest and cleared their goods. Unjust enrichment - HELD THAT:- The adjudicating authority has gone beyond the scope of show-cause notice for entertaining the refund claim. As from the facts itself, it is clear that the appellants were not required to pay any duty on the goods cleared to BSED and not collected any duty from BSED. Moreover, the duty has been paid by the appellants themselves, we hold that the appellants have passed the bar of unjust enrichment. Interest - HELD THAT:- The appellants are entitled to claim the interest after three months from the filing of the refund claim till realization. Therefore, the interest allowed to the appellants after three months from the date of filing of the refund claim till its realization and the interest shall be paid at the rate of 12% as held by this Tribunal in the case M/S SHREE RAJASTHAN SYNTEX LIMITED VERSUS COMMISSIONER, CENTRAL GOODS AND SERVICE TAX (COMMISSIONERATE) RAJASTHAN [ 2023 (7) TMI 950 - CESTAT NEW DELHI] . All the appeals are allowed. 2023 (9) TMI 167 Jurisdiction to pass the original order of adjudication - Whether an Officer, holding charge of the Commissionerate in accordance with such an order/empowerment being made by the Chief Commissioner (also read and not the Board ) is legally competent to discharge the statutory functions responsibilities and execute them in accordance with the powers vested in him under the statute (Central Excise, Customs and Service Tax Laws), in his capacity as the Commissioner? HELD THAT:- The fact that the appellants had filed a Miscellaneous Application before the Tribunal, the purport of which is that the Commissioner Shri C.M. Mehra, who adjudicated the matter and was holding the charge of Commissioner of Central Excise and Service Tax, Siliguri, pursuant to such assignment of charge by the jurisdictional Chief Commissioner, was statutorily not vested with powers to adjudicate the matter as there was no delegation in terms of Section 37A of the Central Excise Act, 1944 read with Rule 3(1) 3(2) of the Central Excise Rules, 2002, in favour of the Chief Commissioner, by the Central Government empowering him to appoint Sri C.M. Mehra to the charge of Commissioner of Central Excise Service Tax, Siliguri. Hence, the impugned adjudication by Sri C.M. Mehra suffered from lack of jurisdiction. Having specified a jurisdiction which is not disputed and having identified individuals (including Sri CM Mehra) as Central Excise Officers, it is not so mandated that the Board alone can post the individual (Central Excise Officers) to a given charge (jurisdiction) and it cannot be done by any subordinate officer in the absence of delegation of power. For the reason, any interpretation restricting the scope of this power, its free flow and to state as its vesting only in the Board, is nowhere enshrined in law. The Larger Bench of the Tribunal in CCE, New Delhi Vs. Avis Electronics Pvt. Ltd., [ 2000 (2) TMI 122 - CEGAT, NEW DELHI] had held that in understanding the provisions of the rules, the Tribunal was not to supplement or add words to the Rule. While it could be argued that the decision rendered in Mall Eximp (P) Ltd., is without the aid of any words to the provisions contained, but it is a fact that the manner of reading the law as interpreted in Mall Eximp (P) Ltd., gives rise to a meaning that does not flow from the language deployed in the statute unless extraneous words are added to it. It is too well known that an interpretation that leads to absurdity more so when the words used are plain and unambiguous and the intention of the legislature is clearly discernible, is to be avoided, yet the co-ordinate bench in its wisdom has decided in the manner holding lack of jurisdiction of the Commissioner deputed on additional charge, assigned by the Chief Commissioner - The issue of jurisdiction involved in the present matter is akin to the case of Raghunath International Ltd., Vs. UOI [ 2012 (11) TMI 951 - ALLAHABAD HIGH COURT] . The Hon'ble High Court, having held that the publication of notification was not meant to be in respect of existing Central Excise Officers, it is clear that the decision of this Tribunal in Mall Eximp (P) Ltd., was extra-legal and not good law. The decision rendered by the Tribunal, in the case of Mall Eximp (P) Ltd. [ 2008 (6) TMI 17 - CESTAT, KOLKATA ], is in violation to the language of the statute. While there can be no qualms to the principle of Verbis legis non est recedendum, as it so flows from a plain reading of the statutory words, without interpolating words that have not been made use of in the statute. The learned adjudicating authority wielded absolute jurisdiction in the matter and was the proper authority exercising statutory, administrative and functional jurisdiction over the Central Excise Service Tax Commissionerate, Siliguri in his capacity as Commissioner of Central Excise Service Tax, Siliguri having been duly assigned the said charge by the jurisdictional Chief Commissioner. The ratio of law in Mall Eximp (P) Ltd., case is respectfully disagreed with and therefore cannot be adopted in the present case. In view of the observations above and respectful but strong disapproval of and disagreement with the decision rendered by the co- ordinate bench in the case of Mall Exim (P) Ltd., it is deemed appropriate that the matter needs to be considered by the Larger Bench to resolve the conflict and decide the following question of law:- Whether in the facts and circumstances of the case, Sri C.M. Mehra was vested with the jurisdiction to adjudicate the matter . The Registrar directed that the matter alongwith the case records be placed before the Hon'ble President for his kind consideration and constitution of the Larger Bench to decide the impugned question of law. CST, VAT & Sales Tax 2023 (9) TMI 175 Interest and penalty for delayed payment of tax - tribunal set aside the penalty - HELD THAT:- Given the said statutory provisions and powers conferred upon the Tribunal, it was within the powers of the Tribunal to look into the reasons which prevented the assessee in timely payment of tax and the delay also was too short a period so as to infer that the delay was with any mala fide intention. Another fact which needs consideration is the fact that penalty imposed is invoking the provisions under Section 15(4) of the A.P.G.S.T. Act. The proviso to the said Section clearly indicates that before passing of an order of penalty, the authority concerned is required to issue a notice to the assessee seeking his explanation as to the cause which led to the delayed payment of tax. The very insertion of the aforesaid Section 15(4) pre-supposes that upon a notice being issued before penalty orders are passed, if the assessee was able to provide plausible and justifiable reasons which led to the delayed payment of tax it would be then within the discretion of the authority to decide whether penalty at all is to be levied. The petitioners failed to make out any case warranting interference of this Bench with the order passed by the Sales Tax Appellate Tribunal - the question of law framed by the Court, while admitting the revisions, deserves to be decided in the negative. 2023 (9) TMI 174 Validity of assessment order - Levy of Trade Tax - association of persons - HELD THAT:- While making the assessment assessing authority was of the view that the business is being run by three brothers namely Pradeep Kumar, Kamlesh Kumar and Vimlesh Kumar and, therefore, treating them to be association of persons the said assessment order has been passed. The assessment has been made against the firm namely Pradeep Khad Bhandar which has challenged the assessing orders as well as both the appellate orders. Against the said order of assessment an appeal was filed which was allowed by the Joint Commissioner (Appeal) - Ist, Lucknow thereby holding that all the three persons were part of the association of persons and directions were issued to the assessing authority to pass a fresh assessment order considering them to be an association of persons and issue them individual notices before finalizing the said assessment. It is noticed that there is no dispute in the present case with regard to the assessment order but the grievance pertains only that the said Association of Persons has been described as S/Sh Pradeep Khad Bhandar and, accordingly, the liability to pay the tax for Association of Persons would fall directly on the revisionist. It is stated that the other two partners are also liable to pay the Trade Tax as per the assessment order. In the present case it is noticed that the said Association of Person is being run by the three brothers while the firm is being run by only one brother, i.e., revisionist has been made liable to pay the amount of Trade Tax and, accordingly, even if the revisionist pays the tax as assessed, he can always recover it from other members of the Association of Person as the liability is joint and several but merely on this score the validity of the impugned orders cannot be doubted - this Court does not find any infirmity with the assessing order or with order passed by the Commercial Tax Tribunal and it is left open to the petitioner to recover the outstanding amount of the tax from the other members of the Association of Person in accordance with law. The revision is dismissed. 2023 (9) TMI 173 Rejection of appeal - non-deposit of 15% of the pre-deposit - HELD THAT:- Considering the facts and circumstances of this case and in the interest of justice the impugned orders of the first appellate authority, revisional authority and the Tribunal are set aside and the matter is remanded back to the first appellate authority concerned to consider and dispose of the appeal on merit and in accordance with law subject to compliance of any other formalities, if any, which is required to be observed. It is expected that the appellate authority shall consider and dispose of the appeal expeditiously - Application disposed off. 2023 (9) TMI 172 Classification of goods - Interpretation of statute - kattha and cutch - forest produce or mot - Whether for the purpose of Road Tax, both can be treated as one product or different products? - HELD THAT:- When the State Government in its letter dt. 20.07.2001 had itself taken a decision that both are different products and both cannot be taxed at same rate because their price in the market varies from Rs. 250-400/- per kg for Kattha and Rs. 5-25/- per kg for Cutch , the said view of the Government was binding on the Excise and Taxation Commissioner because the said letter dt. 20.07.2001 was addressed by the Government to the Excise and Taxation Commissioner, Himachal Pradesh only. It is not open to Excise and Taxation Commissioner to take a different stand as he is supposed to have done in the alleged letter dt. 20.01.2003, as stated by the Assistant Excise and Taxation Commissioner, Himachal Pradesh in his letter dt. 30.01.2003 - In fact, the request of the petitioner for supply of the proceedings dt. 20.01.2003 of the Excise and Taxation Commissioner under the Right to Information Act, 2005, has been returned on 18.07.2017 saying that said letter is not even available in the office of Deputy Excise and Taxation Commissioner, H.P. The order passed by the Deputy Excise and Taxation Commissioner-cum-Appellate Authority, Palampur, on 28.09.2011 cannot be sustained because he had simply refused to grant the refund on the view that the Excise and Taxation Commissioner, H.P. had rejected the refund on 20.01.2003. But there is no such letter made available to petitioner under the Right to Information Act, 2005 - the order dt. 28.9.2011 of the Deputy Excise and Taxation Commissioner-cum-Appellate Authority, Palampur, on 28.09.2011 set aside. The petitioner is entitled for refund of Rs. 40,48,125/- illegally collected by the respondents as Road Tax on Cutch during the period 13.11.2000 to 28.12.2001 - Petition disposed off. Indian Laws 2023 (9) TMI 171 Interpretation of statute - disposal of an application under Section 33 of Arbitration and Conciliation Act, 1996 would be the starting point for limitation or not - HELD THAT:- Once the arbitral award has been amended or corrected, it is the corrected award which has to be challenged and not the original award. The original award stands modified, and the corrected award must be challenged by filing objections. In the present case, the objections/application for setting aside the arbitral award were filed on 03.08.2018, which is within a period of ninety days from the date of the corrected award. Hence, the High Court was right in holding that the objections were filed within the limitation period. Even otherwise, the Court has the power to condone the delay for further period of thirty days. Application for condonation of delay can be filed at anytime till the proceedings are pending. Of course, exercise of discretion and whether or not the delay should be condoned is a different matter. There are no good ground and reason to interfere with the impugned judgment - SLP dismissed. 2023 (9) TMI 170 Constitutionality of transfer notification - Transfer of Joint Commissioner of state tax - Petitioner assailed his transfer order before the then Himachal Pradesh Administrative Tribunal, however, in the meanwhile his transfer order was cancelled and petitioner was allowed to continue as AETC Sirmaur at Nahan - huge tax evasion - HELD THAT:- Petitioner is Class-I Gazetted Officer. As a matter of fact, petitioner has remained posted at Parwanoo since December, 2020. There is no gainsaying that the transfer is an incidence of service. The employer has unfettered power to effect transfer save and except for extraneous reasons. A government servant holding a transferable post, neither holds a fundamental nor legal right to remain posted at one place or the other. In the case in hand, the petitioner has made an attempt to show that the reasons for his transfer from Parwanoo to Shimla are not bonafide. Reliance has been placed on the order passed by the Company Court in Co. Pet. No. 13 of 2014, whereby the petitioner was authorised to conduct the sale of assets of wound-up company named M/s Indian Technomac Pvt. Ltd. It has also been propagated that the petitioner had detected the invasion of huge amount of taxes by M/s Indian Technomac Pvt Ltd. Company and it was for such reason that he was repeatedly posted at Nahan, Paonta Sahib or Parwanoo - the case of the petitioner is that the official respondents have some hidden purpose to see that the petitioner does not remain involved in the matter of M/s Indian Technomac Pvt. Ltd. Company - It is more than settled that the allegations of malafide have to be specifically pleaded and then have to be proved by cogent material. There is no material on record to infer that there is any motive of the government in transferring the petitioner from Parwanoo to Shimla. Mere fact that the official respondents have passed orders four times to transfer petitioner within a span of last seven years is not sufficient to infer any motive of the employer in doing so, much less a motive which can be termed as oblique or ulterior. Even the transfer policy adopted by the State Government does not reserve any privilege of being not transferred before a minimum period of time for Class I, Gazetted officer(s). Rather, the flipside of the facts as have merged can be the unwillingness of the petitioner himself to be get detached from the affairs of Indian Technomac Limited. The petitioner has been discharging the duties assigned to him by Hon ble Company Court for the last about three years, while having his place of posting at Parwanoo. It is noticeable when the petitioner can discharge his duties as assigned to him by the Company Court while sitting at Parwanoo, why cannot he achieve from Shimla. In case of any complaint with respect to lack of facilities, he can always make his request to the authorities and the Company Court as well and in such event, it will be for Hon ble Company Court to pass appropriate orders in the best interest of adjudication of the lis before it. The petitioner has not been able to make out a case for himself and in result the petition is dismissed. 2023 (9) TMI 169 Dishonour of Cheque - insufficient funds - legally recoverable debt or liability or not - complainant failed to submit details of loan outstanding against the accused - rebuttal of presumption - HELD THAT:- The High Court, in revision, exercises supervisory jurisdiction of a restricted nature. It cannot re-appreciate the evidence, as Second Appellate Court, for the purposes of determining whether the concurrent finding of fact reached by the learned Magistrate and the learned Additional Sessions Judge was correct. Recently, in case of MALKEET SINGH GILL VERSUS THE STATE OF CHHATTISGARH [ 2022 (7) TMI 1455 - SUPREME COURT] , the Supreme Court observed There has to be well-founded error which is to be determined on the merits of individual case. It is also well settled that while considering the same, the Revisional Court does not dwell at length upon the facts and evidence of the case to reverse those findings. Accused Manoj Kumar has not challenged receipt of loan amount of Rs.2,60,000/- under the Vehicle Loan Scheme. Rather, in examination of accused under Section 313 of CrPC, he had specifically admitted that he has taken loan of Rs.2,60,000/- from the complainant Bank under Vehicle Loan Scheme. Therefore, learned Trial Court and Appellate Court have not committed mistake in drawing presumption of existence of legally enforceable liability in favour of the holder of cheque i.e., the complainant Bank - The accused has not submitted any evidence to show re-payment of the loan, therefore, nothing is brought on record to rebut the legal presumption under Sections 118 and 139 of Negotiable Instruments Act. The finding of learned Trial Court and Appellant Court does not suffer any patent illegality or perversity. No interference in the concurrent findings in exercise of revisional jurisdiction is called for. - Petition dismissed. 2023 (9) TMI 168 Dishonour of Cheque - Amicable settlement of dispute - seeking reduction of the period of sentence already undergone - HELD THAT:- Considering the fact that the parties have amicably settled their dispute and have entered into compromise before this Court in the revision and decided to avoid further litigation, hence, the applicant is liable to pay 2% of the cheque amount i.e. Rs.4,700/- by way of cost to be deposited with the State Legal Services Authority Indore. Subject to payment of cost at the rate of 2% of the cheque amount with the State Legal Services Authority Indore, within a period of 15 days from today, the applicant be released from the jail. Sentence awarded to the applicant is hereby modified by reducing the sentence to the period already undergone. Revision disposed off.
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