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2024 (3) TMI 1446
Maintainability of Petition - Rejection of nomination form for election to the membership of the standing committee - Validity of withdrawal of the proposer's consent - Whether Bombay Bar Association is a 'State' within the meaning of Article 12 of the Constitution of India - HELD THAT:- We are not persuaded to accept the contentions, as urged on behalf of the Petitioner, that any relief can be granted to the Petitioner, by entertaining this Petition filed under Article 226 of the Constitution. This, firstly, for the reason that we cannot accept the Petitioner's contention that the Bombay Bar Association is a 'State' under Article 12 of the Constitution of India. We are informed by Mr. Tally that the Bombay Bar Association is a society registered under the Societies Registration Act, 1860, having its bye-laws and Rules. It does not receive any aid / financial assistance from the government to meet its expenditures, nor does the government have any other form of controlling stake either in the establishment or in the management or administration of the bar association. There is no deep or pervasive "State control" in the management of its affairs. Furthermore, the functions of the Bombay Bar Association do not relate/or are governmental functions. For all these reasons the Bombay Bar Association cannot be held to be a 'State' under Article 12 of the Constitution of India. Thus, on this ground alone, we cannot entertain this Petition. We may observe that the alternate remedy for the Petitioner, if at all, would be to file a Civil Suit for redressal of any election grievance which the Petitioner has.
Be that as it may, the issues which are raised in the Petition concern the elections of the Standing Committee of the bar association. Election itself is a creature of the statute. Such elections are held according to the Rules and Regulations. If the Petitioner has any grievance regarding the same, certainly the remedy for the Petitioner cannot be to invoke the writ jurisdiction of this Court.
Needless to observe, as fairly stated by Mr. Tally, if the Petitioner has any grievance, she is free to make a representation to the standing Committee of the Bombay Bar Association, which would look into all the concerns raised by the Petitioner.
Before parting we may clarify that our observations as made in this judgment are confined in the context of the petitioner's case which raises issues in regard to the elections of the bar association. Hence our judgment ought not to be construed to have delved on any other issues which are not before us.
Writ Petition is accordingly dismissed. No costs.
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2024 (3) TMI 1445
Disallowance of bad debts u/s 36(1)(vii) - comparison between the pre amendment and post amendment of Section 36(1)(vii) - ITAT deleted addition - HELD THAT:- The amount was never recovered by the assessee. There is nothing to infer that the write off was not genuine. The amount was duly written off and the amount has been treated as income due to the assessee in his books due to the business transactions entered into by the assessee with M/s. Unitech Ltd.
There was relationship of debtor and creditor. It is pertinent to note that the income from the sale of the land has been accepted by the revenue in the preceding year as such income from business. The assessee has also shown the income as business income. We find that the claim of the assessee is in consonance with Section 36(1)(vii) and Section 36(2) of the Act.
It cannot be said that assessee has not complied with the conditions u/s 36(2) of the said Act. The assessee has taken into account the debt so written off in computing the income of assessee in the previous year in which the amount of such debt is written off.
Tribunal has taken into consideration these aspects. It was observed that even if the income has not been taken into account in the earlier previous years it cannot be said that the assessee has not complied with provisions of Section 36(2). It is the case where ultimately no recovery has been made by the assessee from M/s. Unitech Ltd. Once the assessee sold the land to M/s. Unitech Ltd, the debtor and creditor relationship has come into existence due to the business transaction between the assessee and M/s. Unitech Ltd.
The legislature by amendment has sought to exclude the burden on the assessee to prove that the debt is bad debt. The subsequent circulars reflects the object of amendment. The object of provision is to avoid litigation and to do away with disputes regarding allowing bad debts as deduction in computing income of assessee as observed by this Court in the decision referred above. No reason to interfere in the order of ITAT.
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2024 (3) TMI 1444
Addition of sale proceeds from share transactions u/s 68 - transactions in penny stocks - HELD THAT:- We notice that the transaction of the assessee was doubted by the authority on the basis of the report of the Investigating Wing, Kolkata. It is pertinent to note at this stage that in furtherance to the aforesaid report, SEBI has undertaken a detailed inquiry against M/s.Mishka Finance & Trading Ltd. and in the said inquiry, vide order dated 5.10.2017, the SEBI has not found any adversarial material of any violation of statute. Over and above, admittedly, the assessee has also furnished complete evidence including contract note of shares, demat details, details of bonus shares and those evidences have not been doubted by the authorities.
The entire transaction was done by the assessee through the platform of BSE by paying necessary security transaction tax and the transaction was undertaken by the share brokers, no such allegation was made against the said broker for indulging in any price manipulation. Decided against revenue.
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2024 (3) TMI 1443
TP Adjustment - Appellant contends that benchmarking in respect of Inter Group Services was not undertaken - HELD THAT:- The order passed by the CIT(A):
“4. That the AO/TPO have inappropriately rejected the Transactional Net Margin Method (“TNMM”) used by the Appellant and erroneously applied Comparable Uncontrolled Price (“CUP”) method to determine the arm’s length price of the international transactions related to availing of intra group services, without appreciating the fact that intra-group services availed were proprietary in nature and no uncontrolled data was available for the application of CUP method.
5. That the learned AO/TPO have erred, in law and on facts, in concluding that the Appellant has derived no benefits from the intra-group services availed from the associated enterprises and arbitrarily determining the arm’s length price of said international transaction as Nil as against the actual transaction value of Rs. 5,32,51,014/-.”
However, in order to cut short the controversy which stands raised, we request the respondent to place the Transfer Pricing Report on the record. Let the aforesaid be done within a period of three weeks from today.
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2024 (3) TMI 1442
Dismissal of quashing of FIR - Breach of contract - criminal offence or civil matter - invocation of extraordinary powers of the High Court Under Section 482 of the Code of Criminal Procedure - abuse of process of law - HELD THAT:- The dispute between the parties is primarily, civil in nature. It is after all a question of how many bicycles the complainant had assembled and the dispute between the parties is only regarding the figure of bicycles and consequently of the amount liable to be paid. This is a civil dispute. The complainant has not been able to establish that the intention to cheat the complainant was there with the Appellants right from the beginning. Merely because the Appellants admit that only 28,995 bicycles were assembled, but they have admittedly paid an amount of Rs. 62,01,746/- to the complainant, which is of a much higher number of bicycles, would not prove that the intention of the Appellants right from the beginning was to cheat. This amount i.e. the additional amount of Rs. 26 lacs have been paid by the Appellants pursuant to a settlement. The reasons and the logic for arriving at a settlement are quite different - The allegation that the complainant was coerced into a settlement, looks unlikely for two reasons. First, there is no FIR or Complaint that the complainant was coerced into this settlement. Secondly, this amount was duly accepted by the complainant.
This is a case where the inherent powers should have been exercised by the High Court Under Section 482 of the Code of Criminal Procedure as the powers are there to stop the abuse of the process and to secure the ends of justice.
Essentially, the present dispute between the parties relates to a breach of contract. A mere breach of contract, by one of the parties, would not attract prosecution for criminal offence in every case, as held by this Court in Sarabjit Kaur v. State of Punjab and Anr. [2023 (3) TMI 1572 - SUPREME COURT]. Similarly, dealing with the distinction between the offence of cheating and a mere breach of contractual obligations, this Court, in Vesa Holdings (P) Ltd. v. State of Kerala [2015 (3) TMI 1385 - SUPREME COURT], has held that every breach of contract would not give rise to the offence of cheating, and it is required to be shown that the Accused had fraudulent or dishonest intention at the time of making the promise.
In the case at hand, the dispute between the parties was not only essentially of a civil nature but in this case the dispute itself stood settled later. There are no criminal element here and consequently the case here is nothing but an abuse of the process.
Conclusion - The dispute is essentially civil and that the High Court erred in refusing to quash the FIR. The criminal proceedings are quashed under Section 482 CrPC as an abuse of process, given the settlement and absence of criminal intent.
The order of the High Court set aside - appeal allowed.
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2024 (3) TMI 1441
Cash deposits during demonetization - HELD THAT:- Even if the assessee has filed his voluminous paper book running into 150 pages, his contention that the cash deposit during demonetization period in fact had come from his other family members who are regular return filers, could hardly be accepted in principle. The fact also remains that learned lower authorities have not given credit of the accumulated cash in his household as well.
Faced with the situation, we deem it appropriate in larger interest of justice that a lumpsum addition of Rs. 8 lakhs out of that in issue of Rs. 11.19 lakhs deserves to be upheld. The assessee gets relief of Rs. 3.90 lakhs in very terms. Necessary computation shall follow as per law.
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2024 (3) TMI 1440
Grant of interest on the principal amount of the refund - wilful violation of order - Contempt of court - HELD THAT:- This contempt case shall not lie. Merely because there is some delay in complying with the Court’s order the proceeding under the Contempt of Courts Act, 1971 cannot be maintained.
The contempt petition is dismissed.
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2024 (3) TMI 1439
Rejection of application u/s 12A(1)(ac)(iii) - assessee-trust has been created for the benefit of particular religious community or cast “BAUA BHAVIK.” - HELD THAT:- We find that most of the objects of the trust are for the benefit of general public. The objects at serial No. 5 to 15 are for benefits of general public, therefore, it can not be said that trust has been created for the benefit of particular religious community or cast “BAUA BHAVIK. For that reliance is placed on the case of Bayath Kutchhi Dasha Oswal Jain Mahajan Trust [2016 (9) TMI 8 - GUJARAT HIGH COURT] wherein it was held that where Trust had large number of other objects for benefit of general public apart from objects for benefit of a religious community, Tribunal was correct in allowing registration to it.
We set aside the order of CIT(E) and remand the various issues raised by the assessee in the grounds of appeal, for fresh consideration by the CIT(E), with a liberty to the assessee-trust to prove his case by producing sufficient evidence/material to the satisfaction of the CIT(E). For statistical purposes the appeal of the assessee is allowed.
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2024 (3) TMI 1438
Admission of additional ground admission due to inadvertent delay - Challenge to jurisdiction of the Addl. Commissioner of Income Tax to pass the assessment order on the ground that there is no notification or order under section 120(4)(b) or 127 - HELD THAT:- Though additional ground can be raised if it is a pure question of law, but for adjudication such question of law, ascertainment of facts are necessary, then without those facts coming on record it is difficult to decide the question of law itself. Though we are aware that in some of the decisions by the Coordinate Bench have been admitted such an additional ground after inadvertent delay and decided the issue. However, in the present case, in absence of the records being available before us, we are not able to adjudicate this issue. Had the records being made available then perhaps such delay would have been condoned, being the point of jurisdiction. However, without actual records coming on record because of bonafide reasons given by the department that after lapse of so many years and that to be when this issue was not raised at any point of time, we cannot quash the assessment simply on the presumption that no such order would have been passed.
As we have already observed above there is a difference between order not available on record for transferring the jurisdiction from DCIT to Addl. CIT and not available on record due to lapse of time and latches on part of the assessee. Thus, we agree with the contention of the Ld.DR that additional ground cannot be admitted due to inadvertent delay and accordingly, the petition for admission of additional ground is rejected.
Eligibility of depreciation on assets pursuant to the scheme of demerger - appellants had ceased to be the owner of the assets and had ceased to use the assets for the purpose of its business - HELD THAT:- We observe from the record that identical issue is decided in favour of the assessee for the A.Y. 1997-98. While deciding the issue, the Coordinate Bench [2016 (1) TMI 1491 - ITAT MUMBAI] as held every year the block of assets has to be adjusted in case if there are any changes in the composition of the assets within the block. This exercise has to be done every assessment year. In the given case, it is fact on record that the impugned assets are not in existence with the organization. The ITAT has come to the conclusion in A.Y.2000-01 interpreting the provisions as applicable at that point of time. In our view the assets in the block has to be evaluated every assessment year and as per provision 43(6)(C)(B), it clearly indicates that the value has to be reduced of the moneys payable in respective of any assets falling within that block which is sold/discarded/demolished or destroyed. In the given case, the block does not consist the assets, which are transferred in the demerger in the A.Y. 1997-98. However, these particular assets are not in existence in the beginning of the year and it can be considered as discarded in the provisions with “NIL” value. This issue needs to end some point of time. In that case, the value of the assets has to be written off this year and to be claimed as loss in the statement of income (instead of depreciation). Therefore, we are inclined to direct the Assessing Officer to treat the opening balance of the assets to the extent of assets, which was already transferred to the demerged company as loss of assets or discarded.
Nature of expenses - disallowing expenditure of Rs. 55,01,084/- in connection with Software treating the same as capital expenditure and granting depreciation at the rate of 25% instead of 60% - HELD THAT:- We observe from the record that identical issue is decided in favour of the assessee for the A.Y. 1997-98 [2016 (1) TMI 1491 - ITAT MUMBAI] held that application software are of revenue in nature.
Adhoc disallowance of 25% of total foreign travelling expenses - HELD THAT:- This ground is covered in assessee’s favor in several earlier years also and the department has accepted the ruling of the Tribunal in those years and has not preferred further appeal, on this issue. This being the case, we direct Ld. AO to delete the additions as sustained by Ld. CIT(A).
Disallowance of Hotel and airfare expenses incurred on foreign visitors to India - these expenses were not for the purpose of the business - HELD THAT:- We observe from the record that identical issue is decided in favour of the assessee for the A.Y. 1997-98. While deciding the issue, the Coordinate Bench [2016 (1) TMI 1491 - ITAT MUMBAI] held that foreign victors came to India for purposes of attending the board meetings, general discussion, finance, reporting etc. It is considered that the expenditure represented predominantly business expenditure.
Disallowance u/s 14A r.w.r. 8D- HELD THAT:- Identical issue is decided in favour of the assessee for the A.Y. 1998-99. While deciding the issue, the Coordinate Bench in [2016 (1) TMI 1491 - ITAT MUMBAI] we direct the AO to restrict the disallowance @2% of the exempt income.
Disallowance of Unavailed Modvat Credit - HELD THAT:- As following the principle of consistency, the view taken by the Tribunal in assessee’s case for the preceding assessment years are respectfully followed, we direct the AO to make the similar adjustment to opening stock as made to the closing stock towards the unutilized MODVAT credit, accordingly, ground raised raised by the assessee is allowed.
Disallowing advances written off - HELD THAT:- As we observe from the record that identical issue is decided in favour of the assessee [2021 (4) TMI 1346 - ITAT MUMBAI] as concluded that advances lost during the course of business would be business losses.
Deduction u/s 80HHC - excluding 90 per cent of the receipts while working out the profits of the business by assuming that they are in the nature of receipts - HELD THAT:- Interest on employee’s loan, Interest on overdue debtors, Interest on deposit with MSEB & MIDC, Insurance Claims, Scrap Sales Income, Cash Discount, Equipment lease rentals, Conversion Charges, Write back of liabilities, Cost of Services Recovered, Profit u/s 41(3) on sale of R & D Assets and Misc. Claims items would form part of Profits of business and accordingly, not required to be reduced while computing deduction u/s 80HHC.
Interest on Sales Tax Refund & Income Tax Refund (Gross) - Both these items, in our opinion, would be covered by explanation (baa) and accordingly, required to be reduced to the extent of 90% while computing profits of the business. However, as per the decision of ACG Associates Capsules Pvt. Ltd [2012 (2) TMI 101 - SUPREME COURT] netting-off would be available to the assessee. The Ld. AO is directed to re-work the same.
Sales Tax Set-off & Excise Duty refund - These two items would stand excluded in view of the fact that as per the impugned order, sales tax as well as excise duty would not form part of total turnover in the denominator. When denominator has been reduced by these two components, similar connected items would stand excluded from the numerator also.
AO is directed to re-compute the deduction available to the assessee u/s 80HHC in the light of our adjudication on various issues effecting computations u/s 80HHC,
Computing the income from house property at a notional value - HELD THAT:- As decided in own case [2021 (4) TMI 1346 - ITAT MUMBAI] it was not a case where the property was actually let out by the assessee to a third-party but was a case wherein to facilitate demerger and to ensure smooth running of existing business, an arrangement was made between the assessee and its demerged entity that the business premises would be shared with an understanding that the proportionate cost would be recovered from the demerged entity till the time an alternative facility was arranged by the demerged entity. This being the case, it could very well be said that the premises was being used by the assessee only in furtherance of its business interest, the objective of which was to facilitate demerger. It is quite discernible that this similar arrangement is continuing since AYs 199798 onwards and such an arrangement has never been disturbed by Ld. AO while framing assessment for AYs 1997-98 to 2000-01 which is evident from extract of assessment orders of those years as placed on record. Therefore, rule of consistency would operate in assessee’s favor and the facts being identical, Ld. AO was not justified in disturbing such an arrangement. Therefore, on the peculiar facts and circumstances, the action of Ld.AO in bringing to tax notional rental value of the common premises was not justified.
Capital gains arising from the transfer of Plot no 1 by adopting the fair market value of the asset transferred as at 01.04.1981 - HELD THAT:- The valuation report submitted by the DVO to evaluate the same pieces of land which the assessee had sold on piecemeal basis. The valuation was done by the neutral agency, there should not be any issue for adopting the same in the assessment year under consideration. Therefore, we direct the AO to adopt the Fair Market value as on 01.04.1981 as determined by the DVO for the year under consideration and determine the capital gains accordingly. In the result the grounds raised by the assessee are accordingly allowed.
Capital gains arising from the transfer/sale of development right in respect of slum plot by adopting the fair market vaue of the asset transferred as at 01.04.1981 - HELD THAT:- As we observe that the issue under consideration is exactly same as adjudicated in Ground Nos 10 and 11, therefore, the same is applicable mutandis mutatis. Accordingly, we direct the AO to adopt the FMV as determined by the DVO for the issue under consideration. Hence, the grounds raised by the assessee are allowed as indicated above.
Treating incremental amount, over and above the amount offered to tax u/s 41(3), arising from sale of buildings used for research and development purpose as revenue receipts and in not allowing appellants claim for allowance of Capital Loss thereon as claimed in the return of income - HELD THAT:- Since it is a capital assets transferred by the assessee the provisions of section 45 to 48 of the Act is attracted, since the assessee has claimed the benefit under section 35 of the Act to the extent of the benefit claimed by the assessee under section 35 of the Act, the provisions of the section 41(3) are attracted to that extent, we observe that the assessee has also complied by declaring the sale proceed as business income. Since it is a capital assets transferred, the provisions of section 48 of the Act is attracted to the portion of the sale proceed over and above the exemption claimed by the assessee under section 35 of the Act. Therefore, as per the provisions of section 48 of the Act, the income of the assessee under the head capital gains has to be determined for the value of excess consideration received by the assessee.
In our view, the above said loss is allowed to be carry forward under section 74 of the Act. We came to the conclusion by relying on the decision of the Pharmason Pharmaceuticals Ltd [2003 (1) TMI 740 - ITAT AHMEDABAD] Decided in favour of assessee.
Incremental liability for VRS - HELD THAT:- As identical issue is decided in favour of the assessee for the A.Y. 1997-98. While deciding the issue, the Coordinate Bench in [2016 (1) TMI 1491 - ITAT MUMBAI] applying the amended order, the deduction would be allowable to the assessee.
Disallowance of corporate entrance fees paid by the assessee to the clubs - HELD THAT:- Identical issue is decided in favour of the assessee for the A.Y. 2001-02. While deciding the issue, the Coordinate Bench [2021 (4) TMI 1346 - ITAT MUMBAI] holding that club membership fees for employees incurred by the assessee is business expense under Section 37.
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2024 (3) TMI 1437
Classification “QDx InstacheckTM PCT” with reader “QDx InstachcckTM” as a kit - to be classified under chapter heading 3002 as Antisera and other blood fractions and immunological products, under chapter heading 3822 as Diagnostic or laboratory reagents, or chapter heading 3006 as Pharmaceutical goods including diagnostic reagents designed to be administered to patients? - HELD THAT:- The classification of the goods under the Customs Tariff is governed by the principles as enumerated in the General Rules of Interpretation (‘GRI’) set out in the First Schedule to the Customs Tariff Act, 1975 (Tariff). In view of the Rule 1 & Rule 3(a) of the General Rules of Interpretation to answer the question of classification of the products under consideration asked by the applicant, provisions of the relevant Section or Chapter Notes and Sub-Notes or explanatory notes are to be interpreted considering that the goods in question comprise “Reagent”, however, they are put up in the form of Kit which gives essential character to the products. Sections and Chapter Notes have been given statutory backing and have been incorporated at the top of each Section/Chapter.
Explanatory notes to Heading 3822 explains that this heading covers diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents whether or not on a backing, whether or not put up in the form of kits, including blood grouping reagents, other than diagnostic reagents designed to be administered to the patient of Heading 3006.
From the test procedures elaborated in the product brochure it is observed that the reagents of the goods in question are not designed to be administered to the patient, furthermore, they are for in vitro diagnostic use only. Therefore, by virtue of Note 4 to Chapter 30 the product in question is not classifiable under Chapter Heading 3006. Further, the applicant has submitted that the kit’s main ingredient is antibody, and it is a blood serum containing monoclonal antibodies against specific antigens - there are specific tariff entries for prepared diagnostic reagent whether or not put up in the form of kits meant for certain diseases viz. malaria and zika, blood grouping and pregnancy test. All other prepared diagnostic or laboratory reagent whether or not put up in the form of kits are covered under residuary Tariff Item 3822 9090.
The Notification No. 1/2017-Integrated tax (Rate), dated 28th June, 2017 and the Circular No. 163/19/2021-GST, dated 6-10-2021 issued by Tax Research Unit regarding clarification of GST rates & classification of goods based on the recommendations of the GST Council clarified that concessional GST rate of 12% is applicable on all the goods falling under heading 3822, vide entry at Sr. No. 80 of Schedule-II of Notification No. 1/2017-Integrated Tax (Rate) dated 28-6-2017. Notification No. 1/2017 ibid covers ‘All diagnostic Kits and reagents’ under Heading 3822 at Sr. No. 80 of its Schedule-II.
In the case of Span Diagnostics Ltd. v. Commissioner of C.Ex., Surat [2007 (4) TMI 617 - SUPREME COURT] the issue before the Hon’ble Supreme Court was regarding the classification of monoclonal antibodies under heading 3002 or under heading 3005. However, it is observed that in the case in hand issue is regarding the classification of a complete diagnostic kit and not about only one of its component i.e. Anti-PCT antibody - the case law relied upon by the applicant to support their arguments is not germane to the case in hand.
Conclusion - The products in question i.e. “QDx InstacheckTM PCT” with reader “QDx InstacheckTM” as a kit merit classification under CTH 3822, more specifically under CTH 3822 9090 of the First Schedule to the Customs Tariff Act, 1975 and the said products are covered under entry at Sr. No. 80 of Schedule-II of notification No. 1/2017-Integrated Tax (Rate) dated 28-6-2017.
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2024 (3) TMI 1436
Classification of imported pet foods in bulk bags - rate of custom duty - to be classified as put up for retail sale under Customs Tariff Heading (CTH) 2309 10 00 or under the residual entry 2309 90 90? - HELD THAT:- It is seen that under CTH 2309 of the Customs Tariff Act, 1975, there are two possible entries at 8-digit level wherein the pet food bulk bags can be classified, i.e., 2309 10 00 and 2309 90 90, i.e. the residual entry.
The CTI 2309.10.00, clearly and specifically covers the cat and dog food ‘put up for retail sale’. Therefore, where the product under consideration is not meant for retail sale, the same shall not get covered under the specific CTI 2309.10.00. It is seen that the products under consideration are to be imported without any labelling, information, MRP etc. printed on the packages that are required for retail packages defined under Rule 2(k) of LM(PC) Rules, 2011. In fact, it cannot be sold directly in retail market considering inasmuch as the nature of the bulk import and the obligation of the applicant to follow the provisions of LM Rules. Hence the said goods cannot be classified under CTI 2309 10 00. Instead, the proposed pet food imported in bulk packages by the Applicant should be classified separately from the classification provided for packages for retail sale The other possible classification for the subject goods thus can be CTI 2309 90 90 i.e. “Other preparation of a kind used in animal feeding” under the same heading.
Conclusion - The pet food i.e. cat and dog food, imported in bulk merit classification under CTI 2309.90.90 of the First Schedule of the Customs Tariff Act, 1975.
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2024 (3) TMI 1435
Refund of payment of Countervailing Duty (CVD) and Special Additional Duty (SAD) made after the commencement of the GST regime - non-fulfilment of Export obligation - time limitation - HELD THAT:- Refund claim is filed on 12/2/2019. Since they have made the payment on 21/06/2018, the time limit for filing the refund claim has to be calculated from this date and not from the date of Bill of Entry as has been erroneously taken by the Adjudicating Authority. Therefore, the Appellant has filed the refund claim within the time limit of one year.
So far as the stand taken by the Adjudicating Authority that the Pay Order is not a proper document for taking the credit, it is to be noted that the Appellant has not availed the Cenvat Credit since it is not possible for him to do so. He is only making a claim that in the normal course, he will be eligible to take the credit. Even under Rule 9 of the Cenvat Credit Rules, 2004, any challan evidencing the payment of duty will be eligible to as document for taking the Cenvat Credit. The Pay Order along with the Working Sheet showing the details of Basic Customs Duty, CVD, SAD and interest has to be viewed as a proper document for availing Cenvat Credit. Therefore, there are no merit in the stand taken by the Adjudicating Authority.
Whether the Appellant is eligible to take cash refund for the payment of CVD and SAD done by them during the present GST regime? - HELD THAT:- This issue is no more res intigra. The Larger Bench in the case of [2023 (12) TMI 1145 - CESTAT CHENNAI-LB] has held 'even if the service tax had been deposited by the appellant after 01.01.2017, nonetheless the refund of any amount of the CENVAT credit could be claimed only under subsection (3) of section 142 of the CGST Act and against this order an appeal will lie to the Tribunal.'
Conclusion - The refund of the CVD and SAD amounts paid by the Appellant allowed along with applicable interest, thereby affirming the entitlement to cash refund under the CGST Act for duties paid under the erstwhile law post-GST implementation.
Appeal allowed.
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2024 (3) TMI 1434
Denial of the benefit of input tax credit on account of the provisions contained in Sub Section (4) of Section 16 of the CGST/SGST Act, for the financial year 2017-2018 through Ext.P4 proceeding dated 13.12.2023 - HELD THAT:- By the incorporation of section 16(5) to the CGST Act, the time limit to claim the input tax credit for the financial years 2017-18 to 2020-21 has been extended till 30-11-2021. In view of the incorporation of sub-section (5) of Section 16 of the CGST/SGST Act, petitioner claims that it will be entitled to input tax credit, as it had filed the returns within the time prescribed therein. Petitioner’s claim for input tax credit has been rejected without reference to section 16(5) of the CGST/SGST Act. Hence, Ext.P4 order is liable to be set aside to the extent it had denied input tax credit to the petitioner on the basis of Sub Section (4) of Section 16 of the CGST/SGST Act and a reconsideration is required to be directed.
Ext. P4 is set aside to the extent it has denied input tax credit to the petitioner, and the competent authority is directed to pass fresh orders within three months from the date of receipt of a certified copy of this judgment - Petition allowed.
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2024 (3) TMI 1433
Addition u/s 68 - bogus LTCG on sale receipt of shares - HELD THAT:- No irregularity was highlighted by the Securities and Exchange Board of India pertaining to the transaction of the scrips of the Company, would lead us to the conclusion that there is nothing adverse against the respondent-assessee which could establish a fictitious LTCG to claim exemption at the behest of the respondent-assessee. Rather, the arguments put forth by the Revenue are mere findings of fact.
The issues raised by the Revenue in the present appeals already stand covered by the decision of this Court in the case of PCIT v. Krishna Devi [2021 (1) TMI 1008 - DELHI HIGH COURT] wherein, under similar facts and circumstances, it was held that the preponderance of probabilities cannot be a ground to reject the evidence put forth by the parties. ITAT correctly deleted addition - Decided in favour of assessee.
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2024 (3) TMI 1432
Unexplained cash deposit u/s 69A - cash deposited during demonetization period - HELD THAT:- Amount of Rs. 50,000/- was deposited by the assessee out of her tuition fee income. We note that assessee has explained the source of cash deposit in bank account in a satisfactorily manner, hence we delete the addition of Rs. 50,000. Decided in favour of assessee.
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2024 (3) TMI 1431
Unexplained income u/s 69A - amount of introduction of the capital account in the hands of the assessee and another small amount of disallowance - HELD THAT:- When the assessee confronted about the source of the money credited in the capital account. The assessee submitted that he has on 27th March, 2027 transferred a sum of Rs. 18,00,000/- from his saving bank account No. 43280100000261 and Rs. 45,000/- was introduced out of cash balance arising from the agricultural activities. AO did not find any substance in the contentions of the assessee and therefore, the said amount was added as income of the assessee.
Assessee referring to capital account of the audited accounts being the bank book of his proprietary concern Krishna Agri Genetics and assessee’s saving bank account and maintained with the Bank of Baroda from where the assessee has transferred from his saving bank account to the current year maintained by the assessee in proprietary concern explained that the source is coming from the same bank account and credit of which is examined by the ld. AO. The source of credit in the proprietary concern account is sourced from the saving bank account and the source of saving bank account is the proceeds of the agricultural income which the ld. CIT (A) tough added by the AO considered as genuine.
CIT (A) stated that money is not from the bank cheque whereas the entries are recorded on the same date i.e. 27.03.2017. The money so sourced from that account the assessee has transferred in his business concerns thus the source is found explained and the transfer of money from one account to another cannot be considered as income of the assessee. The bench noted that the issue of addition of agricultural income has already been considered by the ld. CIT (A) while dealing with the addition made by the ld. AO wherein he deleted the addition made on account of agricultural income for Rs. 22,01,479/-.
Considering that this aspect of the matter source of Rs. 18,00,000/- out of that agricultural income which is considered as genuine cannot be denied to the assessee and as regards the cash of Rs. 45,000/-, the assessee stated that it is generated from the saving bank account and activities of the agricultural income is not disputed. Even the addition of Rs. 45,000/- does not warrant. In terms of these observations, the ground No. 1 raised by the assessee is allowed.
Addition due to a discrepancy in the capital account balance - As relevant fact arises from the assessment order is that on examination of capital account. AO noted that the closing balance of capital account for F.Y 2015-16 was Rs. 52,28,065/- but the opening the balance which the assessee carried over in the F.Y 2016-17 was Rs. 52,44,864/-. Thus a sum of Rs. 16,799/- was carried over ground what is the balance in the last year.
AO added that amount income of the assessee on this aspect of the matter, the ld. CIT (A) did not find any merit in the contentions so raised and therefore, the same was dismissed. Before us, the ld. AR of the assessee did not demonstrated before us by filing any cogent evidence so as to take a different view then what has been taken by the lower authorities. In terms of these observations, we do not find any merit and therefore, the addition of Rs. 16,800/- is confirmed. Based on these observations, the ground No. 2 raised by the assessee is dismissed.
Appeal of the assessee is partly allowed.
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2024 (3) TMI 1430
TDS exemption u/s 194A(3)(V) to petitioner society as registered under the provisions of The Karnataka Souharda Sahakari Act, 1997 - SCN issued u/s 201 (1) and 201 (1A) - HELD THAT:- As petitioner society being undisputedly Cooperative Society registered under The Karnataka Souharda Sahakari Act, 1997, the exemption for TDS u/s 194A (3) V of the IT Act, is clearly admissible in so far as the petitioner society is concerned and consequently the impugned show cause notice is clearly without jurisdiction or authority of law and the same is being illegal and arbitrary, no useful purpose would be served by continuing the service pursuant to the impugned show cause notice.
In the light of the judgment of the Hon’ble Division Bench in Karnataka State Souharda Federal Co-operative Ltd. [2022 (1) TMI 540 - KARNATAKA HIGH COURT] and the wide and expansive definition contained in Section 2 (19) which includes the petitioner society which has been registered under the provisions of The Karnataka Souharda Sahakari Act, 1997, the impugned show cause notice deserves to be quashed.
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2024 (3) TMI 1429
Seeking grant of regular bail - Money Laundering - conglomeration of illegal betting websites, which are hosted from abroad - Section 45 of the PMLA - HELD THAT:- As per provisions of Section 45 of the PMLA, apart from providing Public Prosecutor, opportunity to oppose bail application, filed by the applicant, two conditions are required to be fulfilled i.e. firstly the court is satisfied that there are reasonable grounds for believing that applicant is not guilty of such offence and secondly he is not likely to commit any offence while on bail.
In the case of Satish Jaggi Vs. State of Chhattisgarh [2007 (4) TMI 775 - SUPREME COURT], it has been held that “ at the stage of granting of bail, the Court can only go into the question of prima facie case established for granting bail, it cannot go into the question of credibility and reliability of witnesses put up by the prosecution. The question of credibility and reliability of prosecution witnesses can only be tested during trial”.
Statement of applicant under Section 50 of the PMLA was recorded on 27-8-2023. He has admitted in his statement that he has visisted Dubai thrice in the year 2020, 2021 and 2022. He has also admitted that in all three occasions, he met there with Sourabh Chandrakar and Ravi Uppal, who are said to be king pin/promoters of instant money laundering case - It is also revealed that time frame of applicant travel seems to be orchestrated to facilitate the applicant to attend a high profile Mahadev Online Book events held in September, 2022, which suggests a close affliation between applicant and the promoters of Mahadev Online Book app, who not only sponsored his journey but also handlled Visa arrangement and other services and thereby he has been benefited from proceeds of illegal betting activity. All these facts prima facie connect involvement of applicant in present crime, so far as his alleged role of facilitator / supplier is concerned.
It has not been brought on record by the Enforcement Directorate as to when, where and how much amount was received by the applicant and supplied by him. Chandra Bhushan Verma, ASI has been prosecuted in first prosecution complaint as accused No. 4. As per his statement recorded by Enforcement Directorate under Section 50 of the PMLA on 22-8-2023, he has stated indulgence of applicant with regard to collection of cash amount from hawala operators of Nagpur and handing over a part of collected amount as protection money to various police officers. He has also said that, applicant was in direct touch with Mahadev Online Betting app promoters and he along with other persons visited Dubai in order to meet with Sourabh Chandrakar and Ravi Uppal, which has also been admitted by applicant in his statement recorded under Section 50 of the PMLA.
Conclusion - A prima facie case exists against the applicant based on his involvement in the money laundering network and the evidence presented. The applicant's bail application is rejected due to the lack of satisfaction of the conditions under Section 45 of the PMLA.
Bail application dismissed.
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2024 (3) TMI 1428
Eligibility for relief u/s 89(1) in respect of amount of compensation received for termination of services, as the employer had closed down the plant following the norms imposed by World Health Organization - HELD THAT:- The compensation in question comes within the provisions of section 17(3). No doubt, the provisions of section 89 provides for relief when the salary was received in advance or paid in arrears or compensation was received which comes within the purview of clause (3) of section 17 of the Act, but the proviso to section 89 of the Act clearly provides that no relief u/s 89 shall be granted in respect of amount received or receivable by the assessee on his voluntary retirement or termination of services in accordance with any scheme or scheme of voluntary retirement.
The claim made by the assessee u/s 89 of the Act is clearly hit by proviso to section 89(1) of the Income Tax Act, the assessee is not entitled to relief u/s 89(1).
As regards to the additional claim made by the assessee before the CIT (A) that the compensation in question should be treated as capital receipt, cannot be accepted as the compensation in question comes within the ambit of provisions of section 17(3)(iii) of the Act which clearly provides that the compensation received from the former employer for termination of his services is taxable as a profit in lieu of salary. The grounds of appeal filed by the appellant are devoid of any merit.
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2024 (3) TMI 1427
Classification of the service rendered by the appellant - works service contract or Erection, Commissioning or Installation Service? - HELD THAT:- The issue is no more res integra and as evident from the show-cause notice and the tax invoices relied by the respondent, the issuance of show-cause notice itself is unsustainable as the activity carried out by the appellant prior to 01.06.2007 is falling under ‘works contract service’ and since levy of service tax is not applicable for ‘works contract service’ prior to 01.06.2007, the impugned order confirming the demand is unsustainable.
Appeal allowed.
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