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Showing 61 to 80 of 1551 Records
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2024 (2) TMI 1491
Royalty receipts - receipts of the assessee from its clients in India Income deemed to accrue or arise in India - Appellant sought to contend that the fees so generated from that exercise would fall within the ambit of “fee for technical services” in terms of Article 13 of the India-UK DTAA - HELD THAT:- The mere undertaking of background checks of an employee or the verification of testimonials cannot possibly be recognised as entailing the use of any technical knowledge, experience or skill as provided under Article 13(4) of the India-UK DTAA.
Assessee is merely verifying disclosures and which activity cannot be recognised as being imbued with any technological characteristic. There is also a complete absence of a transfer of data or information which could be described as “technical” as the word is commonly understood. In view of the aforesaid, we find no reason to take a view contrary to what has been expressed by the ITAT. No substantial question of law.
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2024 (2) TMI 1490
Denial of Foreign Tax Credit - appellant had not filed Form No.67 read with Rule 28 of the IT Rules i.e. the statement of income from a country or specified territory outside India - HELD THAT:- As relying on case of Mangalore Chemicals & Fertilizers Ltd. [1991 (8) TMI 83 - SUPREME COURT] Rule 128(9) of the IT Rules does not provide for disallowance of FTC in the case of delay in filing Form No.67. Filing of such Form 67 is not mandatory but a directory requirement. Moreso, when DTAA overrides the provision of the Act, the Rules cannot be contrary to the Act and hence, this right to claim of FTC is a vested right of the appellant, cannot be denied.
We find sufficient case has been made out by the appellant. Hence, respectfully relying upon the same, we allow the appeal on this aspect of filing of Form No. 67. We condone the delay, if any. We, thus, direct the Ld. CIT(A) to pass orders on merit strictly in accordance with law.
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2024 (2) TMI 1489
TP Adjustment - Selection of MAM - ALP adjustment of international transactions from Associated Enterprises - HELD THAT:- ITAT has principally faulted the decisions and directions rendered by the TPO and DRP upon finding that the assessee had adopted the Transactional Net Margin Method/TNMM as being the most appropriate method for the purposes of computation of ALP which was never discarded. It has found on facts that even though neither the TPO nor the DRP doubted that TNMM was the most appropriate method, they had proceeded to direct additions as noticed above.
It has also adversely commented upon the TPO as well as the DRP undertaking an exercise in seeking to re-evaluate the cost of raw materials purchased. Insofar as this aspect is concerned, it has found that both the TPO as well as the DRP erred in proceeding to consider issues which travelled far beyond the determination of ALP. It has also been found on facts that the TPO has compared controlled transactions with other controlled transactions, losing sight of the imperative of the comparison being made with “uncontrolled transactions”.
It has thus found that the direction as framed would clearly be contrary to Section 92F(ii) of the Act and which mandates that ALP would be the price identified for a “transaction between persons other than associated enterprises in uncontrolled conditions”.
Additions have come to be annulled. The view as taken by the ITAT cannot possibly be faulted. No substantial question of law.
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2024 (2) TMI 1488
Addition u/s 68 - bogus short Term Capital gain on sale of shares - ITAT deleted addition - HELD THAT:- The payment for purchase was through account payee cheque. The purchase and sale was through a Demat Account maintained by an independent agency. The shares were sold through registered share broker by an online transaction and as per the share prices prevalent on that day. AO failed to contradict the evidence adduced by the respondent to support the claim of long term capital gain.
It was considered that the statements recorded at the back of the respondent, without affording an opportunity of cross examination was no evidence in eyes of law. The statements nowhere stated that the transactions of the respondent with regard to sale and purchase of the shares of the company was an accommodating entry. It would be appropriate to note that second addition on account of undisclosed expenditure of commission paid was consequent upon addition made of long term capital gain.
Tribunal allowed the appeal on appreciation of evidence adduced by respondent and considering that no contrary material produced by the department. No case is made out for interference - Decided against revenue.
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2024 (2) TMI 1487
TP Adjustment - whether the guide-lines laid down under the Act and Rules are followed while determining the ALP by the Tribunal or not and whether the findings are perverse or not? - HELD THAT:- We agree with Mr. Shah that in the case at hand while passing the order this Court has not refused to scrutinise the Tribunal’s findings on the ALP. This Court has considered the matter on merits and came to the conclusion that no substantial questions of law arise.
We are also informed by Mr. Shah that the two judgments in Aptara Technology (P) Ltd [2018 (4) TMI 404 - BOMBAY HIGH COURT] and PTC Software (I) (P.) Ltd. [2018 (4) TMI 1002 - BOMBAY HIGH COURT] on which the Court had relied upon, have attained finality. In the case of Aptara (Supra), Revenue did not challenge it in the Apex Court and in the case of PTC Software (Supra), the appeal that was filed by Revenue, was withdrawn.
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2024 (2) TMI 1486
TP Adjustment - comparable selection - ITAT justification in deleting the comparable TCS e-Serve on the basis of the said comparable having a high profitability and brand when TNMM [Transactional Net Margin Method] as an appropriate method is deployed to iron out the differences among the comparables for the sake of a broad comparison - HELD THAT:- We find that the issue of TCS e-Serve being used as a comparable, came up for consideration in PCIT v. B.C. Management Services Pvt. Ltd[2017 (12) TMI 255 - DELHI HIGH COURT] wherein held Income-tax Appellate Tribunal observed that though there is a close functional similarity between that entity and the assessee, however, there is a close connection between TCS E-serve and TATA Consultancy Service Ltd. which was high brand value ; that distinguished it and marked it out for exclusion. The Income-tax Appellate Tribunal recorded that the brand value associated with TCS Consultancy reflected/impacted TCS E- serve profitability in a very positive manner. This inference too in the opinion of the court, cannot be termed as unreasonable. The rationale for exclusion is therefore upheld. Decided in favour of assessee.
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2024 (2) TMI 1485
Validity of TP Adjustment - order as barred by limitation, in violation of principles of natural justice, without jurisdiction and an erroneous order - petitioner submits that the respondent No.1 – TPO committed an error in passing the impugned order without considering or appreciating the relevant statutory provisions as well as the judgment of various High Courts - HELD THAT:- As rightly contended by petitioner, various judgments relied upon the petitioner which were rendered prior to the impugned order have not been considered by the respondent No.1 – TPO before passing the impugned order which also does not take into account the relevant statutory provisions before passing the impugned order.
Under these circumstances, without expressing any opinion on the merit/demerits of the rival contentions and in order to enable the first respondent – TPO to pass fresh orders after consideration of the relevant statutory provisions and the judgments of various High Courts referred to supra, deem it just and appropriate to set aside the impugned order and remit the matter back to the first respondent for reconsideration afresh in accordance with law.
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2024 (2) TMI 1484
Revision u/s 263 - excluding the SBC as non-operating cost while calculating the OP/OC - HELD THAT:- This issue is covered in favour of the assessee in its group company as relied by assessee noted supra in the case of Amazon Development Centre (India) Pvt. Ltd. [2023 (11) TMI 30 - ITAT BANGALORE] and the other case law relied by the ld. AR of the assessee supports the case of the assessee. In the case cited above the similar issue has been decided by the co-ordinate bench in the proceeding initiated by the ld. CIT u/s 263 in favour of the assessee. In view of this, respectfully following the above judgment we hold that this issue is in favour of the assessee.
While calculating OP/OC by the TPO, the depreciation and amortization expenses of Rs. 3 million have been excluded by the TPO from the operating cost - There is difference between revenue from operations and operating cost reported by the assessee and calculated by the TPO and no reconciliation is produced for the difference is produced before us. Therefore, we hold that the ld. CIT(TP) has rightly exercised his jurisdiction on this issue. We further observe from the submissions made by the ld. AR of the assessee even if ld. CIT(TP) has rightly exercised his jurisdiction on this issue, there will be futile exercise because the operating margin of the assessee will be within the +/-3% range as prescribed in the provisions. We find substance in the submission of the ld. AR of the assessee, After including the depreciation and amortization expenses as operating cost, the margin of the assessee still will remain the range of +/- 3% and no addition is called for. Therefore, there is no erroneous and prejudicial order passed by the TPO on this issue. Accordingly, the assessee succeeds on this issue.
Delivery and warranty expenses not part of AMP expenses - After going through the detailed submissions and case law relied by the ld. AR of the assessee these expenditure cannot be regarded as having been incurred for the purpose of development of brand since these are post sales activities and part of sales expenditure. It is also not a case of lack of enquiry.
We hold the delivery cost and warranty expenses are not part of AMP expenditure. Therefore, the ld. CIT(TP) is not justified for revising the order on this issue u/s. 263 of the Act. The assessee succeeds on this issue.
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2024 (2) TMI 1483
Disallowance of Foreign Tax Credit u/s 90 r/w Article 23 of India-Indonesia DTAA - late filing of Form-67 - Directive v/s obligatory condition - HELD THAT:- This issue has come for our consideration on various occasions and it has been consistently held that filing of Form-67 is directive in nature and not mandatory and therefore, just for the sake of delay in filing of Form-67, the assessee should not be denied the claim of foreign tax credit. See Sobhan Lal Gangopadhyay [2023 (5) TMI 1286 - ITAT KOLKATA] wherein held that the Assessing Officer ought not to have denied the relief u/s 90 of the Act merely for delay in filing of Form 67.
Also relying on Duraiswamy Kumaraswamy [2023 (11) TMI 1000 - MADRAS HIGH COURT] since all the conditions are fulfilled for making such claim, the assessee deserves to get the foreign tax credit for the assessment years in appeal. Assessee appeal allowed.
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2024 (2) TMI 1482
Addition u/s 68 - unexplained cash credit in the form of share capital and share premium - CIT(A) deleted Addition on the ground that no cash or cheque was actually received by the respondent assessee and the purchase of share assets and allotment of share by the assessee was under barter system - HELD THAT:- We have no hesitation to hold that substantial question of law raised in this appeal has to be answered against the appellant/revenue in the light of the decision of this Court in ITM/S ABHIJEET ENTERPRISE LTD. [2023 (11) TMI 1312 - CALCUTTA HIGH COURT] wherein held cash did not pass at any stage though entries were made in cash book showing payment and receipts; but since the entries made a complete round, no passing of cash was necessary for the purpose of making entries. Further, it was held that if there was no real cash entry on credit side of the cash book by merely an emotional or fictitious cash entry, as admitted by the Income Tax Officer, there is no real credit to cash, to its cash book the question of inclusion of the amount of the entry as unexplained cash credit cannot arise - Decided in favour of assessee.
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2024 (2) TMI 1481
Condonation of delay of 154 days in filing the petition - delay on account of the administrative reasons - sufficient reasons for delay or not - Review petition seeking review of the judgment - HELD THAT:- There are no ground to review the judgment under review. Moreover, it is also seen that the present review petition has been filed after 154 days delay. The learned counsel for the revenue states that the due process for approval / permission for filing the review petition, from the hierarchy of the departmental authorities was followed and the same resulted in the aforesaid delay. It is contended that the delay in filing the present review petition is on account of the administrative reasons.
It cannot be accepted that the Revenue was prevented by sufficient cause from filing the present review petition within the stipulated period.
The review petition is dismissed both on the grounds of delay and on merits.
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2024 (2) TMI 1480
TP Adjustment - payment for cost allocation of COE3 / IT charges - services based on CUP Method in accordance with Section 92CA(3) of the Act - HELD THAT:- As similar services were offered to the assessee from the A.Y. 2002-03 onwards. In short, assessee was not able to demonstrate the various cost incurred by the cost centre R&M to BP group worldwide and allocation of cost based on such PC count cannot be the only method of allocation. It does not appreciate the actual replacement and actual service allocation across the group concerns. It may be a simple way of indirect allocation of cost without there being any proper justification.
Once the assessee managed to restrict the charges at USD 795000 there is no point going back to justification based on allocation of cost of RM cost center. It is enough benchmarking has to be done only the value of restricted values of the services offered by the AE. It is also not proper for benchmarking the above transactions based on TNMM method.
Therefore, in our considered view the benchmarking has to be done based on the CUP Method and the assessee is directed to benchmark the above transactions based on the similar comparable global companies who are offering the similar services across its branches. There are several Multi-National companies who are having similar objectives. Therefore, we are inclined to remit this issue back to the file of the AO / TPO to benchmark the same on the basis of CUP Method and we direct them not to adopt adhoc method as adopted by them in the current assessment year or adopted in the past. Accordingly, ground raised by the assessee is allowed for statistical purpose.
Assessee could not establish the total cost incurred by the AE for the web hosting charges - Ideally assessee / TP Officer should have adopted one of the approved Method. However, assessee has not made available any comparable and also Transfer Pricing Officer has preferred to proceed with estimation of application on the basis of man hour / man hour rate without bringing anything on record on what basis. From the record we observe that assessee has taken services of third party and also submitted copy of tax invoices of the third party.
What is necessary to be benchmarked is the mark-up applied by the assessee at 5%. Since the actual cost of providing webhosting was brought on record. The allocation was made based on the services offered to various units. Whether this mark-up is within the Arm’s Length Price has to be determined it can be done only on the basis of TNMM. The assessee has carried on with the twenty-two (22) comparable and the data of all the comparable are already available on record. In our considered view Transfer Pricing Officer has to benchmark based on the above comparable available on record and also if required he may carry out benchmarking of the above margin with the comparable available on record or may add few more to determine proper Arm’s Length Price in this transaction. Accordingly, we deem it fit and proper to remit this issue back to the file of the Assessing Officer/ Transfer Pricing Officer to benchmark the above transactions as per law.
Addition of expenses pertaining to "Share based payments - DRP has considered the market value of shares of holding company and the difference of purchase price of the shares of the holding company and observed it as a notional loss - HELD THAT: AR filed details of shares purchased, name of the various executives which is placed on record and also assessee has filed copy of the tax statements of few employees to demonstrate that they have contributed the amount and to the extent of contribution made by the assessee are declared as perquisite. Further, the assessee also deducted the relevant perquisite tax. Therefore, as per the facts submitted before us, it clearly shows that assessee has incurred the above employee benefit expenses towards purchase of shares of the holding company. Therefore, this is not a notional loss to the assessee company but it is an actual cost incurred by the assessee towards purchase of the shares of the holding company to motivate the existing employees.
We observe that Ld.DRP has considered the market value of shares of holding company and the difference of purchase price of the shares of the holding company and observed it as a notional loss. We observe that assessee has not recorded the market price but recorded the actual share value of the allotted shares in its books of accounts. Therefore, there is no question of claiming the notional loss in this case. Accordingly, we direct the Assessing Officer to delete the additions proposed by Ld. Ld. DRP, accordingly, ground raised by the assessee is allowed.
Creating demand including interest, dividend distribution tax - As considering the overall submissions made by the assessee, we are inclined to remit this issue back to the file of assessing officer with a direction to verify the records submitted by the assessee on merit and as per law.
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2024 (2) TMI 1479
Process amounting to manufacture or not - strapping together of ‘tyres’, ‘tubes’ and ‘flaps’, referred to as ‘TTF’, at the premises of another for despatch of this particular combination of goods to dealers for catering to replacement market for bus/lorry operators - HELD THAT:- In the light of duty having been discharged on the declared retail selling price, and at rate, for each of the three that came to be aggregated and the uncontroverted claim that price of aggregate is sum of the price of the three disaggregated products, it is cause to wonder at the statutory consequence advanced by the initiation of impugned proceedings. No less bemusing is the resistance of the appellant but, then, an assessee is not commercially created for discharge of duty liability and its business model, to the extent of not being illegal, is entirely beyond intrusion of agencies of the State and their cause for apprehension, but for the proximate detriment, does not require justification or explanation. Not so is the taxing agency and the absence of review, contemplated in section of Central Excise Act, 1944, for evaluation of the impugned order as legal and proper has not attempted to rectify this inadequacy in the adjudicated demand.
There is no dispute on the classification adopted by the appellant upon clearance of the goods from the factory of manufacture or on the value adopted for assessment. And yet there is a differential duty demand which must, necessarily, be predicated on either, or both, of rate of duty and value. That incongruence should suffice for discard of the impugned order but in circumstances of objection from the assessee and ‘marketability’ aspect set forth by the respondent, to adjudicate the validity of the contrary claims.
The ‘hologram affixing’ proposition too presupposes lack of marketability in the absence of hologram. It also takes the scope of excisability beyond the stage of manufacture to brand acceptability. It is all too clear that not only is central excise law not about branding but is about manufacture - The expression in section 2(f) of Central Excise Act, 1944 is ‘marketable’ and not ‘more marketable’ and, thereby, puts that proposition to rest. The submission on this aspect is not acceptable.
The convenience of aggregation notwithstanding, it is not the case of the respondents that ‘tyres’, ‘tubes’ and ‘flaps’ are never sold except after aggregation. It may be that the replacement market may have been replete with such aggregated presentation. That there is industry practice of such aggregation does not render sale as separate pieces to be against the law or contrary to conventions of sales.
On facts alone, the proceedings do not sustain. It is not necessary to delve into the interpretation canvassed on behalf of the appellants. Accordingly, the impugned order is set aside to allow the appeals - appeal allowed.
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2024 (2) TMI 1478
Addition u/s 69A - cash deposited during demonetization period - Assessee said cash was duly recorded in the books of accounts. The books were subjected to Tax Audit u/s 44AB - HELD THAT:- There is no fact base finding as to how the sales were not genuine. Merely because the sales were high in this month could not lead to formation of such a conclusion especially when the sales turnover was found duly reflected in assessee’s books of accounts.
The sales were duly supported by monthly sales register. It is trite law no addition could be made on mere suspicion, conjectures or surmises. It could also be seen that cash has been generated out of sales turnover. The cash generated by the assessee arise out of same set of sale transaction, a part of which has been accepted by AO.
AO has segregated SBN and non-SBN cash deposits and made disallowance of cash deposits in SBN. In other words, the cash generated in non-SBN has been accepted to be genuine sales whereas cash generated in SBN has been accepted to non-genuine sales. This conclusion is clearly fallacious since a particular customer may pay in combination of SBN as well as non-SBN.
Therefore, accepting a part of the transaction and rejecting the other part could not be held to be justified, in any manner. When the assessee had furnished all the documentary evidences in support of its financial transactions then in such a case, in our considered opinion, the burden was on revenue to controvert the stand of the assessee. In the absence of such an exercise, the impugned additions have no legs to stand. Appeal of assessee allowed.
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2024 (2) TMI 1477
Interplay between the provisions of Chapter IX of the Food Safety and Standards Act, 2006 (FSSA) and Sections 272 and 273 of the Indian Penal Code (IPC) - HELD THAT:- There are very exhaustive substantive and procedural provisions in the FSSA for dealing with offences concerning unsafe food.
As per Section 89 of the FSSA, the title of the section indeed indicates that the intention is to give an overriding effect to the FSSA over all ‘foodrelated laws’. However, in the main Section, there is no such restriction confined to ‘foodrelated laws’, and it is provided that provisions of the FSSA shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. So, the Section indicates that an overriding effect is given to the provisions of the FSSA over any other law. The settled law is that if the main Section is unambiguous, the aid of the title of the Section or its marginal note cannot be taken to interpret the same. Only if it is ambiguous, the title of the section or the marginal note can be looked into to understand the intention of the legislature. Therefore, the main Section clearly gives overriding effect to the provisions of the FSSA over any other law in so far as the law applies to the aspects of food in the field covered by the FSSA.
The decision of this Court in the case of Swami Achyutanand Tirth [2013 (12) TMI 1753 - SUPREME COURT] does not deal with this contingency at all. In the case of the State of Maharashtra [2018 (9) TMI 1803 - SUPREME COURT], the question of the effect of Section 97 of the FSSA did not arise for consideration of this Court. The Court dealt with simultaneous prosecutions and concluded that there could be simultaneous prosecutions, but conviction and sentence can be only in one. This proposition is based on what is incorporated in section 26 of the GC Act - there are no manner of doubt that by virtue of Section 89 of the FSSA, Section 59 will override the provisions of Sections 272 and 273 of the IPC. Therefore, there will not be any question of simultaneous prosecution under both the statutes.
The impugned orders are set aside - appeal allowed.
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2024 (2) TMI 1476
Addition u/s 14A r.w.r 8D - assessee earned dividend income from shares held by it as part of its business of trading in securities, which was claimed as exempt u/s 10(34) - shares held as stock in trade - Assessee made a suo motto disallowance - HELD THAT:- Income has been earned from shares held as stock in trade. Detail of such shares is exhibited wherein shares purchased during the year were sold during the year itself, there being no opening and closing stock.
Though the assessee has suo motto disallowed yet as per the ratio laid down in the case of Maxopp Investment Ltd [2018 (3) TMI 805 - SUPREME COURT] assessee was not required to make any disallowance u/s 14A of the Act on shares held as stock in trade. Decided against revenue.
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2024 (2) TMI 1475
Abuse of dominant position - Section 19(1) (a) of the Competition Act, 2002 - HELD THAT:- From the perusal of the Information, subsequent submissions and material available on record, the Commission notes that the Informant is primarily aggrieved by the imposition of extra fees, including server costs, processing fees, gateway costs, and other convenience charges, without disclosing the complete details in the GST bill.
For an analysis of the case under Section 4 of the Act, the first requirement is to delineate the relevant market as per Section 2(r) of the Act which comprises of relevant product market and relevant geographic market in terms of Section 2 (t) and 2(s) of the Act, respectively. The next step is to assess the dominance of OP in the relevant market so delineated, in terms of the factors enumerated under Section 19(4) of the Act. Once the dominance of an OP is established, the final step is to analyse the allegations pertaining to abuse of dominance in terms of Section 4 of the Act.
The Commission notes that there are several players operating in the ‘market for digital payment platforms in India which include several domestic and global players. In such a structure of the market, the Informant does not seem to be dependent on the OP. Furthermore, the Informant has not provided any evidence of OP being dominant. In the absence of the dominance of the OP in the relevant market, there is no occasion to examine the allegation of abusive conduct against it under the provisions of the Act.
The Commission is of the considered opinion that no case of contravention of the provisions of Section 4 of the Act is made out against the OP for causing an investigation into the matter. Therefore, the matter is ordered to be closed forthwith under Section 26(2) of the Act. Consequently, no case for grant of relief(s) as sought under Section 33 of the Act arises and the prayer for the same also stands rejected.
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2024 (2) TMI 1474
Service tax under the category of ‘Business Auxiliary Service’ - appellant is a professional cricketeer - as alleged assessee had rendered promotional or marketing or sale of goods and services for the franchisee M/s. Royal Challengers Sports Pvt. Ltd. - HELD THAT:- We find that the issue has been considered at length by the Tribunal in Sourav Ganguly’s case [2020 (12) TMI 534 - CESTAT KOLKATA] wherein held that the appellant had received the fees for playing cricket only and even otherwise, it is a settled principle of law that if no machinery exists to exclude non-taxable service, a composite contract is not taxable since law must provide a measure or value of the rate to be applied and any vagueness in the legislative scheme makes the levy fatal. The confirmation of demand under this head, therefore, cannot be sustained.
The aforesaid observations of the Tribunal has subsequently been followed in the cases of Bharat Chipli and Anil Kumble [2022 (4) TMI 305 - CESTAT BANGALORE] by this Tribunal.
Thus demand dismissed.
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2024 (2) TMI 1473
TDS u/s 194C - External Development Charges EDC which were paid by the writ petitioners to HSVP [Haryana Shahari Vikas Pradhikaran] albeit on the directions of the Director General, Department of Town and Country Planning DTCP, Haryana, a department functioning under the Government of Haryana - HELD THAT:- The question which warrants consideration is whether EDC was a payment to the State must necessarily be answered in the negative bearing in mind the undisputed fact that the income was placed in the hands and at the disposal of HSVP. We note that undisputedly at least till 31 March 2017 all EDC payments even as per the DTCP were being made out in favour of HSVP. It is only thereafter that EDC was deposited with the DTCP. This too leads us to the irresistible conclusion that the payments made to HSVP would not fall within Section 196.
We also bear in mind the unambiguous legislative command of Section 194C which places the payer under the unshirkable obligation of deducting tax from all payments being made to a contractor. We have already noticed in the preceding parts of this decision that Section 194C of the Act vests no discretion in the payer to examine or contemplate chargeability of that payment to tax.
We negative the challenge raised in these writ petitions insofar as the invocation of Section 194C of the Act is concerned and hold that EDC payments would be covered thereunder. For reasons recorded in the body of this judgment, we also turn down the challenge to the Clarification issued by the Central Board of Direct Taxes dated 23 December 2017.
We dispose of those writ petitions where final orders under Section 201 may not have been made by according liberty to the respondents to revive the pending show cause notice proceedings and conclude the same in accordance with law bearing in mind the observations appearing hereinabove. The proceedings on the pending show cause notices would be liable to be decided afresh after affording an opportunity of hearing to the writ petitioners and decided in accordance with this judgment.
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2024 (2) TMI 1472
Admission of section 9 application - time limitation - due date for the payment of the last invoice is 19.09.2014, whereas the application under Section 9 has been filed on 13.12.2018, beyond the period of three years as envisaged under Article 137 of the Limitation Act, 1963 - HELD THAT:- There is no dispute that a Petition under Section 7 or 9 has to be filed within a period of three years in terms of Article 137 of the Act and the period of three years is to be counted from the date when the default had occurred. It is also not in dispute that the Appellant had not taken the defence either in their Reply dated 27.11.2018 filed to the Demand Notice dated 06.11.2018 or in the Reply filed to the application under Section 9. However, it is a well settled that the plea of Limitation can still be setup in Appeal in view of Section 3 of the Act which provides that `subject to the provisions contained in Sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence’.
The plea of Limitation can be setup in defence even in the Appeal if it is not setup before the Tribunal.
Be that as it may, since the question of Limitation is a mixed question of law and fact, therefore, the Appellant was required to setup his defence. In this case, the Respondent has submitted that had the question of Limitation been setup by the Appellant in defence before the Tribunal, he would have led evidence to prove that the period of Limitation had not expired in view of the fact that he had made the payment to the Reliance Industries in the Year 2015 etc., and on the basis of which the Resolution is being sought about the aforesaid invoices. The other thing is that the Memo of dishonoured cheque is dated 18.12.2015.
The issue of Limitation is to be decided after allowing both the Parties to lead their evidence, if any, it is just and expedient to set aside the impugned order and remand the case back to the Tribunal to decide the question of Limitation by affording the Parties an opportunity to lead evidence in support of their case, if any.
Matter on remand.
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