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Showing 441 to 460 of 1570 Records
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2024 (5) TMI 1130
Demand of service tax on charges related to banking and financial services - Service charge received against Working Capital Term Loan (WCTL) - income from pre-payment for financial charges received against seed capital - registration charges on the one time settlement - HELD THAT:- We find that the issues raised in these proceedings are already covered by the decision of Coordinate Bench in appellant’s own case. Thus, it is seen that the issue is settled in favour of the appellants in respect of income from pre-payment of financial charges received against seed capital and in respect of registration charges on the one time settlement. However in respect of service charges received against WCTL, the issue has been decided against the appellant. Thus, we set aside the demand in so far as seed capital and registration charged on the one time settlement is concerned and we confirm the charges in respect of WCTL. The impugned order is modified accordingly.
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2024 (5) TMI 1129
Recovery of Central Excise duty - non-inclusion of investment subsidy in transaction value - HELD THAT:- The issue was examined by the Tribunal in M/s. Harit Polytech Pvt. Ltd. vs. Commissioner, Central Excise and CGST-Jaipur I [2023 (3) TMI 1120 - CESTAT NEW DELHI] and it was observed that 'The subsidy amount, therefore, cannot be included in the transaction value for the purpose of levy of central excise duty under section 4 of the Excise Act.'
The order passed by the Commissioner cannot be sustained and is set aside - Appeal allowed.
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2024 (5) TMI 1128
Valuation - incentive received under Sales Tax package Scheme of Incentive - whether the same is on account of discount and should form part of the transaction value under Section 4(1) (a) read with Section 4(3) (d) of the Central Excise Act, 1944? - HELD THAT:- An identical issue to the present case has been dealt with by the Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE, RAIGAD, BALKRISHNA INDUSTRIES LTD., ESSEL PROPACK LTD. VERSUS UTTAM GALVA STEELS LTD., BHUSHAN STEEL LTD., JSW ISPAT STEEL LTD., COMMISSIONER OF CENTRAL EXCISE, AURANGABAD [2015 (10) TMI 1727 - CESTAT MUMBAI] where it was held that 'In any case, in the present case, the amount payable has not been varied by the Sales Tax Authorities. Under the facts of the present cases, in our view, the Explanation may not be of any help to the Revenue as at the time of clearance, the term ‘actually payable’ was relevant and not ‘actually paid’. Further, the amount of actually payable sales tax has not been varied by the Sales Tax Authorities.'
The Hon’ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, BANGALORE VERSUS MAZAGON DOCK LTD. [2005 (7) TMI 105 - SUPREME COURT] have held that subsidy received from the Government cannot be said to be the additional consideration, as it is not received from the buyer either directly or indirectly and thus, not includable in the price of the excisable goods for the purpose of payment of central excise duty.
There are no merits in the impugned orders passed by the learned Commissioner (Appeals) in confirming the adjudged demands on the appellant. Therefore, the impugned orders are set aside - appeal allowed.
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2024 (5) TMI 1127
Recovery of Excise Duty u/s 4A or u/s 4A of Central Excise Act, 1944 - package is more than 10 gm - Applicability of Standards of Weights and Measures Rules, 1997 - invocation of Extended period of Limitation - HELD THAT:- N/N. 49/2008-CE (NT) dated 24.12.2008 mentions the applicability of Section 4A only to pouches/ packages whose net weight is more than 10 gm; it is not the Department’s case that chewing tobacco sold by the appellant in the impugned pouches is more than 10 gm. It is found that notwithstanding the fact that MRP is printed on the pouch, provisions of Section 4A can be made applicable only when the weight of the net contents is more than 10 gm, as required under Standards of Weights and Measures Rules, 1997. Under these circumstances, it is found that the gross weight of the pouch or the net weight of the pouch including the freely supplied lime tube cannot be the criteria for adopting valuation of Section 4A.
Invocation of Extended period of Limitation - HELD THAT:- It is found that the appellant is a longstanding assessee; has been filing all the declarations and tax returns; under the circumstances, the extended period cannot be invoked. Therefore, there is merit in the appeal filed by M/s Jaimal Singh Kundan Lal Khatri(Appeal No. E/57/2012) on limitation also.
Appeal disposed off.
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2024 (5) TMI 1126
Cancellation of GST registration of petitioner - excess claim of Input Tax Credit or not - demand u/s 73 with penalty - order passed solely on the ground that there was no response received from the petitioner - HELD THAT:- Perusal of the order shows that the same has been passed solely on the ground that there was no response received from the petitioner. Petitioner has annexed the copies of certain account statements as well as invoices to contend that the petitioner had not availed Input Tax Credit, contrary to its entitlement.
Keeping in view the peculiar facts and circumstances of the case, one opportunity should be granted to the petitioner to file a response to the Show Cause Notice. Thereafter, the Show Cause Notice shall be re-adjudicated in accordance with law.
The impugned order dated 21.12.2023 is set aside. The Show Cause Notice is restored on the file of proper officer - Petition disposed off.
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2024 (5) TMI 1125
Merger of intimation/proceedings u/s 143(1) with regular assessment u/s 143(3) - Exemption u/s 11 - Claim denied by the AO in sec. 143(1) proceedings on non-filing of Form 10B along with the return of income - HELD THAT:- Assessee has not filed the form 10B along with the return of income due to the fact that it did not had the registration u/s 12A, and the assessee was claiming the benefits under the concept of mutuality. We observe that the assessee has applied for registration before filing the return of income for the current assessment year on 27.03.2019 and subsequently filed the ROI on 30.03.2019. The ROI was processed u/s 143(1) of the Act on 10.11.2019 and denied the benefit u/s 11 on the basis of not filing the Form 10B on time.
Statutory notice u/s 143(2) was issued on 22.09.2019. Further notices u/s 142(1) were issued in order to proceed with the regular assessment. Accordingly the assessment u/s 143(3) was completed. When regular assessment was completed and the relevant intimation issued u/s 143(1) will automatically merges with the assessment passed u/s 143(3). Therefore, it loses its relevance once the regular assessment is processed and it is only an intimation towards the accuracy of the information submitted by the assessee.
Assessee has claimed deduction u/s 11 and failed to file the form 10B along with the ROI. Based on the above observation, the claim of the assessee was denied by the AO in sec. 143(1) proceedings. Therefore, there is no denial of fact that AO can make the above disallowance, however, the validity of the intimation issued u/s 143(1) is limited to mere intimation of correctness and accuracy of the income declared in ROI and its accuracy based on the information submitted along with the ROI.
It does not carry the legitimacy of an assessment. When the assessment was processed under regular assessment then it loses its individuality and merges with the regular assessment. We are in agreement with the findings of Ld CIT(A) that the intimation u/s 143(1) merges with the order passed u/s 143(3) of the Act and the appeal against the above intimation becomes infructuous. In our view, he should have stopped with the above findings and should not have proceeded to decide the issue on merits, because it is brought to his knowledge that the assessee has filed appeal against the regular assessment order. Therefore, he has travelled beyond the mandate. The issue of allowability of section 11 is already considered in the regular assessment and that issue is already in appeal before FAA. Therefore, reviewing the same is uncalled for.
Intimation merges with the regular assessment when the proceedings are initiated u/s 143(3) of the Act. Therefore, the admitted fact that the appeal against the intimation is infructuous. The grievance of the assessee is that Ld CIT(A) has not stopped with the findings but gave findings on the merits. After considering the submissions, we are also of the view that the findings on allowability u/s 11 is uncalled. Particularly when the issue under consideration is under challenge before another Appellate Authority.
Eligibility for exemption u/s 11 after grant of registration u/s 12A - This is accepted fact on record that the assessee is eligible to claim exemption after the introduction of first proviso to sec. 12A(2) of the Act with the applicable conditions in Finance Act 2018. Since there is no change in the objects and activities in the case of the assessee, there is no doubt that the assessee is eligible to claim the benefit.
However, in our view, this issue has to be raised before the FAA in the appeal against regular assessment passed u/s 143(3) of the Act. Since the issue is still under appeal before FAA, this issue can be decided by the FAA without taking any clue from the appeal decided u/s 143(1) of the Act by the present CIT(A). Therefore, the issue raised against the intimation order is decided in favour of the assessee and hold that the order passed u/s 143(1) is merged with the regular assessment passed u/s 143(3) and it does not have legs to stand on its own once the regular assessment proceedings are initiated. At the same time, we are also hold that the findings of the Ld CIT(A) on the maintenance of the appeal as infructuous, hence, the demand raised in the 143(1) intimation does not survive.
Appeal filed by the Assessee is partly allowed.
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2024 (5) TMI 1124
Violation of the principles of natural justice - Delay and laches in filing the writ petition - opportunity of hearing not provided - cancellation of petitioner’s registration of GST - Digital signature on the impugned order - Retrospective effect of the impugned order.
Time limitation - HELD THAT:- The Hon’ble Apex Court in M/s. Godrej Sara Lee ltd. v. The Excise and taxation Officer – cum – Assessing Authority [2023 (2) TMI 64 - SUPREME COURT], held that the theory of mistake of law and the consequent period of limitation of three years from the date of discovery of such mistake of law cannot be invoked by an assessee taking advantage of the decision in another assessee’s case. All claims for refund ought to be, and ought to have been, only under and in accordance with Rule 11/Section 11B and under no other provision and in no other forum. The decisions of the Court saying to the contrary were overruled therein. In the aforesaid case it has not been held that the period of limitation for filing writ petition is three years - The Hon’ble Apex Court clearly held that Writ Court while deciding writ petition is required to remain alive to the nature of the claim and the unexplained delay on the part of the writ petitioner.
Violation of principles of natural justice - HELD THAT:- The show cause notice dated 01.04.2023 was issued to the petitioner and the petitioner did not submit any reply. In the order of cancellation in the first sentence it shows that “this has reference to your reply dated 18.04.2023 in response to the notice to show cause dated 01.04.2023”, and in the second sentence, “it clearly states that no reply to notice was filed by the petitioner”. The case of the petitioner is that he did not file any reply. Consequently, there is no violation of principles of natural justice since the petitioner was served with the show cause notice and he did not file any reply.
Opportunity of hearing - HELD THAT:- So far as the opportunity before passing the order of suspension is concerned, the suspension was passed during the pendency of the proceedings for cancellation, the opportunity of hearing is not required. Any legal provision could also not be placed that opportunity was required before suspension.
The petition is dismissed.
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2024 (5) TMI 1123
Demand of service tax - service tax so paid “under protest”- service rendered by a non-resident from a country outside India - issuance of Foreign Currency Convertible Bonds (FCCB) - banking and financial services - Recovery of Interest and Imposition of Penalty - Recovery of CENVAT credit wrongly taken or erroneously refunded - HELD THAT:- As per the impugned order the demand of service tax made against the appellant has been dropped. They had deposited the amount demanded in show cause notice during the course of investigation under protest and are entitled to refund of the same along with the interest as prescribed in law. However while depositing the said amount appellant had taken the cenvat credit of the same and as they are registered as input service distributor distributed the same to their manufacturing units.
We in view of above undertaking do not find any reason to disallow the distribution of the said amount taken as credit by the appellant. Impugned order does not record any reason for disallowing the credit and its distribution, except that the service tax has been held to be not payable by the impugned order. In any case the entire exercise of recovering the said credit from the appellant is nullity as the appellant is entitled to refund of the same/ similar amount along with interest as per the impugned order.
We are in agreement with the submission made by the appellant that show cause notice issued to them do not record any reason or the provisions in law as per which this recovery of CENVAT Credit is to be made. Even the impugned order does not record any provisions under which this recovery has been ordered. In absence of statement of any such provision in the show cause notice or the impugned order, the impugned order to this extent cannot be upheld.
Thus, we do not find any justification in implementation of the impugned order to extent it orders for recovery of CENVAT Credit, in view of the undertaking given by the appellant during the course of argument on appeal.
Appeal is disposed of.
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2024 (5) TMI 1122
Detention of goods - e-way bill had expired 44 minutes ago - evasion of tax or not - HELD THAT:- This Court considers it appropriate to reproduce the relevant portion of the judgment rendered by a Division Bench of the Hon’ble Madhya Pradesh High Court in the case of M/s. Daya Shaker Singh vs. State of Madhya Pradesh [2022 (8) TMI 814 - MADHYA PRADESH HIGH COURT] where it was held that 'In the instant case, the delay of almost 4:30 hours before which E-way Bill stood expired appears to be bona fide and without establishing fraudulent intent and negligence on the part of petitioner, the impugned notice/order could not have been passed.'
This Court further observes that the only fault lying with the petitioner was that the e-way bill with regard to the goods that were being transported had expired 44 minutes before the inspection took place due to the delay caused resulting from the tyre puncture for no fault of either of the petitioner or the driver of the truck, thus it cannot be said that there existed an intention to evade tax or any fraudulent intention on part of the petitioner; the only issue lied with expiry of the e-way bill and not renewing the same. It is not in dispute that all taxes under the regime of CGST/ SGST were paid for.
This Court further observes that the impugned notice was issued and the impugned order dated 01.03.2021 was passed under Section 129 (3) of the CGST Act, 2017, the same being completely unjustified in the eye of law as the issue was not one of there not being an e-way bill, but one of the existing e-way bill having expired during transit, thus imposition of such a heavy penalty for a minor offence is unacceptable and the penalty imposed should have been as per Section 122 of the CGST Act, 2017 of Rs. 10,000/-, as there is no apparent case of tax evasion.
This Court is of the opinion that the impugned notice and the impugned orders dated 01.03.2021 and 24.05.2021 deserve to be quashed and set aside and the same are hereby quashed and set aside - Petition allowed in part.
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2024 (5) TMI 1121
Addition made on the basis of the cash received for termination of agreement of purchase of the property - Addition of business expenses related to disputed agreements - rejection of the assessee’s claim that the ld. CIT(A) had not considered the evidence duly filed by the assessee during assessment and appeal hearing - HELD THAT:- An agreement of sale of property the property is not transferred. The property and all other documents should be transferred at the time of registration subject to completion of all pecuniary activities. There is a reasonable ground that assessee had failed to pay Rs. 20 lacs to the party. So, the agreement is terminated, and cash was refunded. So, the source of cash is well established.
Related to addition of investment in property amount to Rs. 1,57,51,042/-. The registered deed is duly annexed with the submission. DR had not made any objection and Mr. Ahmed Noor made investment of his share in the property. This amount cannot be taken in the hands of the assessee in presence of the primary evidence, registered deed. Related to expenses amount to Rs. 19,75,000.- the assessee deducted expenses from income& this amount is fully related to this business and the addition should be deleted.
Accordingly, ground nos. 3 (a), (b) and (c) of the assessee are allowed
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2024 (5) TMI 1120
Validity of the assessment order framed u/s 147 - no valid notice u/s 148 of the Act was issued by the jurisdictional AO - Assessee contended that, once ACIT, Circle-24(2), Hooghly had admitted that he did not have jurisdiction over the assessee, and the correct jurisdiction lies with ACIT, Circle-23(1), Hooghly, then a fresh notice u/s 148 of the Act ought to have been issued by ACIT, Circle-23(1), Hooghly for carrying of the re-assessment proceedings. Since no such notice was issued, the same is of fatal nature and makes the impugned assessment proceedings as illegal, bad in law and void ab initio.
HELD THAT:- We are inclined to hold that since no valid notice u/s 148 of the Act was issued by the jurisdictional assessing officer for reopening of the assessment proceedings, the alleged re-assessment proceedings are bad, illegal and void ab initio and deserves to be quashed. Accordingly, additions made in the said re-assessment proceedings stands deleted on this legal ground itself. Appeal filled by assessee allowed.
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2024 (5) TMI 1119
Disallowance made u/s. 80IA - assessee has not claimed deduction u/s. 80IA in response to the return filed u/s. 153A -. AO rejected the explanation and held that bogus purchases are to be added -HELD THAT:- Here in this case addition has been confirmed by the ld. CIT(A) however, he has given relief by holding that all the additions / disallowances on account of purchases are related to business activity and therefore, deduction u/s. 80IA would be allowed in line with the CBDT Circular No.37 of 2016.
AO with regard to purchases made from one party has applied gross profit rate and with regard to other party has treated the entire transaction of purchase as ‘bogus’. All these have lead to enhancement of business income only which otherwise is eligible for deduction u/s. 80IA, because even ld. AO has also assessed under the head ‘business income’. Accordingly, in view of the CBDT Circular and the past precedents in case of the assessee, we do not find any infirmity in the order of the ld. CIT(A) and same is confirmed. Decided against revenue.
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2024 (5) TMI 1118
Bogus purchases - addition as based on information from the Investigation Wing of Mumbai regarding accommodation entries - HELD THAT:- Once the assessee has produced the documents evidencing the purchases of the goods from the said two entities viz., M/s. Ankia Exports and M/s. Pankaj Exports and the payments made thereto, the onus to prove the negation is shifted to the Ld.AO.
AO should have been examined M/s. Ankia Exports and M/s. Pankaj Exports by issuing summons U/s. 131 of the Act or calling for informations u/s 133(6) of the Act and find out whether these two entities existed or non-existed or in alternative should have been brought on record any evidence to prove that the invoices produced by the assessee were not genuine.
No positive evidences were brought on record by the Revenue to show that the expenditure claimed by the assessee by way of purchase of jewellery were not genuine.
We are also of the opinion that once the sales made by the assessee have been considered & accepted and taxes have been collected from the assessee, then it is difficult to accept the contention of the Ld. AO that the purchases made by the assessee were not genuine.
In the case on hand also, once the Revenue has accepted the sale of the assessee and taxed the assessee, then the Revenue cannot charge solely on the basis of alleged bogus purchases. Further, we may also draw the support from the decisions referred to by the assessee (supra) in support of his case, wherein it was held in the case of bogus purchases, only some percentage of the bogus purchases is required to be considered as additional income. In the light of the above, we find no merit in the argument of the DR and therefore the same is required to be rejected.
DR has referred to the decision of in the case of Nokia India Private Limited [2015 (5) TMI 820 - ITAT DELHI] wherein the Tribunal has held that unless the assessee asked for the cross-examination, the assessee cannot be permitted to raise such ground at a later stage. Similar view was also taken in the other judgments cited by the learned DR herein above.
Though, during the course of argument one of the contentions raised by the learned AR for the assessee is that the assessee has not been given the opportunity of cross-examination and therefore on that ground also the order passed by the lower authorities is not tenable. However, to counter the argument of the learned AR, the learned DR had filed the written submissions which are reproduced herein above.
Violation of principles of natural justice and fair play - We are of the considered opinion that the right to cross-examine is a matter of right vested in the assessee by virtue of the various pronouncements of the Hon’ble Supreme Court and also in the realm of principles of natural justice. The law is clearly settled that no person should be criticised and is subjected to any civil liability unless a chance to rebut and cross-examine is granted to the assessee.
For the above said propositions, we hereby rely upon the ratio laid down in the case of Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT] and Odeon Builders (P.) Ltd [2019 (8) TMI 1072 - SUPREME COURT] Therefore, in our considered view this objection of the Revenue is also without any merit. To conclude, in the light of the above observations, we hereby allow the appeal of the assessee.
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2024 (5) TMI 1117
Addition u/s 41(1) converting the same having been made u/s 68 - actual receipt of money or only journal entry made an adjustment of accounts - Prior period expenses - AR has primarily contended that it is mere case of journal entries made for adjustments of loan taken in earlier year - HELD THAT:- The purpose of section 68 of the Act, the conclusion drawn by the CIT(A) was erroneous because on the one hand, without there being any actual receipt of money, a mere journal entry was passed during the year in regard to entries of borrowed funds standing as unsecured loan and amount receivable from two different set of parties.
On the other hand, the CIT(A) has doubted the identity of two lenders on the basis that companies are deregistered and their whereabouts are not known. However, the addition is made on the basis that source of credit shown as unsecured loan received from M/s Vrinda Developers Pvt. Ltd., remains unexplained. The journal entry only shows cessation of liability towards the two companies on the basis that these liabilities are taken over by M/s Vrinda Developers Pvt. Ltd. Thus, the conclusion of failure to explain the source of funds credited during the year in the name of M/s Vrinda Developers Pvt. Ltd. is an erroneous finding.
The journal entry had the debit effect on the bank account with the increase in the bank balance and credit effect on the loan account. The assessee has explained that no entry in this regard was effected in the P&L Account as a credit effect on the unsecured loan account was reflected in the balance sheet only.
We are of the considered view that the opening balances on account of unsecured loans of the two parties and certain amount receivable from M/s Vrinda Developers Pvt. Ltd., being in the background of journal entry, then for the purpose of section 68 it cannot be said to be an unexplained cash credit. The fictitious cash entry in the bank account without any real credit of cash to the cash book cannot give rise to inclusion of the amount of the entry increasing bank balance as unexplained cash credit.
Book entry transfer lets transfer only through the respective accounts in the books of the concerns.” Accordingly, the deletion was made which was sustained by the Tribunal further observing that since there was no physical transfer of money from the account of Shri Pritam Goel and only a journal entry was passed, the findings of the AO that transaction was sham is baseless.
A coordinate Bench at Delhi in the case of DCIT vs. M/s Glass Tech India Ltd [2022 (3) TMI 1281 - ITAT DELHI] while dealing with the provisions of section 68, has held that it is not just an entry of cash credit in the books of account that would create liability of explanation from the assessee, but, there should be an actual flow of funds. Once the flow of funds is established, then, the question of explanation from the assessee actually arises. Thus, we are inclined to allow these grounds of the assessee.
Prior period expenses - Allowability of expenditure being related to the project which had started in the year under consideration - All evidences make it clear that though the invoice for commission was raised by M/s Vrinda Developers Pvt. Ltd. in the last year, however, the expenditure being related to the project which had started in the year under consideration, the same is allowable in the year under consideration. In the light of the aforesaid, this ground is decided in favour of the assessee.
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2024 (5) TMI 1116
Assessment u/s 144C(13) as time barred - applicability of time limits u/s 144C(13), and the legality of the final assessment order - HELD THAT:- Applying principles laid down in case of GS Chatha Rice Mills [2020 (9) TMI 903 - SUPREME COURT] only relevant fact necessary for deciding in present appeal relating to time barred assessment, is time of uploading by DRP of DRP order onto ITBA portal. Intimation letter to DRP order unambiguously shows 27th April 2022 as date of uploading of DRP order.
This fact cannot be disputed. Except this critical and relevant information everything else (like when order is visible to AO, date of uploading some document by DCIT/ACIT circle 2 (1) (1) Delhi) has been submitted by Respondents. It is fair to conclude that date of uploading DRP order on ITBA portal is 27.04.2022. As per section 144C(13) of the Act, assessment had to be completed on or before 31.05.2022. In present case the assessment is completed only on 30.6.2022 i.e., it is time barred null and void. Therefore, impugned assessment order dated 30.06.2022 is set aside being barred by limitation - Appeal of the assessee is allowed.
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2024 (5) TMI 1115
Deduction u/s. 80P(2)(a)(i) and 80P(2)(d) - assessee has invested its fund in co-operative banks and earned interest thereon - HELD THAT:- Assessee has received interest from cooperative bank but it is not clear whether the interest payer is a bank and registered with Reserve Bank of India and holding licence from RBI for carrying out banking business as per RBI Act.
In addition, in the judgment of Kerala State Cooperative Agricultural and Rural Development Bank Ltd. KSCARDB [2023 (9) TMI 761 - SUPREME COURT] it has been discussed in detail the definition of cooperative banks and co-operative society. If the payer bank falls under the definition of co-operative bank in the light of the judgment of Hon’ble Apex Court then the assessee is not eligible to get deduction u/s. 80P(2)(d) on such interest income received from cooperative banks, therefore this issue is remitted back to the Ld.AO.
Deduction of expenditure u/s 57 - Assessee has received interest from other co-operative bank on its investments. In this regard, the Ld.CIT(A) has not given benefit of deduction u/s. 80P(2)(d) as per the judgment of the Jurisdictional High Court 2017 (7) TMI 1049 - KARNATAKA HIGH COURT]. The revenue authorities have considered the entire interest as income from other sources u/s. 56 and no cost of expenses u/s. 57 has been allowed to the assessee. While calculating the income, the net income should be considered as taxable income after reducing the expenditure incurred towards earning of such income.
Therefore relying on the judgment of Totgars’ Co-operative Sales Society Ltd. [2015 (4) TMI 829 - KARNATAKA HIGH COURT] assessee is eligible for claim of its cost of funds on the entire interest income. Reliance is also placed on the judgment of The West Coast Paper Mill Employees Souhardha Credit Co-op. Ltd. [2023 (8) TMI 1110 - ITAT BANGALORE]. Accordingly, the assessee is directed to provide the details of cost of funds before the assessing officer. Therefore for allowing cost of funds, we are remitting this issue to the assessing officer for determining the cost of funds for earning interest income.
Appeals of the assessee are partly allowed for statistical purposes.
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2024 (5) TMI 1114
Levy of service tax - appellant, engaged in the generation of electricity - Income from late delivery of the materials/goods and non-execution of work - applicability of circular issued by the Department of Revenue - Whether the appellant provided a 'declared service' u/s 66E(e) of the Finance Act - HELD THAT:- A service conceived in an agreement where one person, for a consideration, agrees to an obligation to refrain from an act, would be a ‘declared service’ u/s 66E(e) read with section 65B(44) and would be taxable u/s 68 at the rate specified in section 66B of the Finance Act. Likewise, there can be services conceived in agreements in relation to the other two activities referred to in section 66E(e) of the Finance Act.
Circular dated 03.08.2022 issued by the Department of Revenue regarding applicability of goods and service tax on liquidated damages, compensation and penalty arising out of breach of contract in the context of ‘agreeing to the obligation to refrain from an act or to tolerate an act or a situation, or to do an act’. This Circular emphasizes that there has to be an express or implied agreement to do or abstain from doing something against payment of consideration for a taxable supply to exist and such an act or a situation cannot be imagined or presumed to exist merely because there is a flow of money from one party to another. It also mentions that unless payment has been made for an independent activity of tolerating an act under an independent arrangement entered into for such activity or tolerating an act, such payment will not constitute ‘consideration’ and such activities will not constitute ‘supply’.
The issue in the present appeals is covered by the decisions rendered by the Tribunal in South Eastern Coalfields [2020 (12) TMI 912 - CESTAT NEW DELHI] and Northern Coalfields [2023 (1) TMI 934 - CESTAT NEW DELHI] and, therefore, it has to be held that service tax could not have been demanded from the appellant.
In the result, Service Tax Appeal filed by the appellant is allowed and Appeal filed by the department is dismissed.
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2024 (5) TMI 1113
Best judgement u/s 144 - Addition of Depletion in value of investment, Debit balance written off, Amount disallowable u/s 40(a), Unsecured loans - HELD THAT:- The assessee has not brought any material contradicting the finding of the AO. Even it is found that Auditor of the assessee himself recorded about the depletion in value of investment being capital in nature, debit balance being capital in nature and disallowance made u/s 40(a) of the Act and disallowance made u/s 14A of the Act.
The assessee grossly failed to bring on records material evidence, contradicting the findings of AO on impugned additions. In the absence of any contrary material filed by the assessee and the assessee, failed to get confirmation of the unsecured loan taken from the concerned parties, we do not see any reason to interfere in the findings of AO, the same is hereby affirmed. Appeal of the assessee is dismissed.
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2024 (5) TMI 1112
Disallowance u/s 14A r.w.r. 8D - expenditure incurred on exempt income - as argued assessee company had sufficient self-owned funds for sourcing its exempt income yielding investment, therefore, no disallowance of any part of the interest expenditure that was claimed as deduction was called for in its case - HELD THAT:- When the assessee company in the present case had claimed that no part of the administrative/other expenses claimed by it as a deduction were incurred in relation to the income which did not form part of its total income, then the A.O only after being satisfied that having regard to the accounts of the assessee, as placed before him, it was not possible for him to generate the requisite satisfaction with regard to the correctness of the claim of the assessee, thus, only after rejecting the said claim of the assessee, after complying with the aforesaid statutory obligation as stood cast upon him, could have validly proceeded with and determined the amount of such other/administrative expenditure incurred in relation to the income which did not form part of its total income. We however find that in the case of the present assessee company the AO had carried out the disallowance of the other/administrative expenditure u/s 14A in a mechanical manner as per the methodology provided in Rule 8D(2)(ii).
The general observations of the AO can by no means partake the color and character as that of a satisfaction, which as per the mandate of law is required to be arrived at by him with regard to the correctness of the claim of the assessee in respect of the administrative/other expenses claimed to have been incurred in respect of income which did not form part of the total income of the assessee company, having regard to the accounts of the assessee, as were placed before him.
Thus, being of the considered view that as the A.O had summarily carried out the disallowance of the administrative/other expenses u/s 14A, as per the methodology provided in Rule 8D(2)(ii), without satisfying the statutory requirement of first arriving at a satisfaction as required by the mandate of law, having regard to the accounts of the assessee as placed before him, therefore, am unable to persuade myself to uphold the disallowance which had been sustained by the CIT(A). The order of the CIT(A) sustaining the disallowance u/s 14A is thus set aside. Decided in favour of assessee.
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2024 (5) TMI 1111
Correct head of income - Nature of gain on sale of property - business income OR capital gains - intention of assessee - consistency approach - assessee had entered into the JDA element of profit sharing between the assessee and the developer - assessee got 2.40% share of total Revenue - Scope of Circular issued by the Revenue and the MCQ replies given by the Revenue in the context of Section 45(5A) of the Act under the heading Joint Development Agreement
HELD THAT:- Once the co-ordinate Bench in the case of connected assessees whose rights are emanated from the same JDA, had decided the issue in favour of the assessee, then the said principle laid down by the co-ordinate Bench is required to be applied to all the assessees unless there is a change in law or facts. The Revenue in the instant case has failed to point out any change in law or facts in the case of assessee and therefore, we are left with no other option but to follow the decision of the co-ordinate Bench of the Tribunal in the case of Vinod Narapa Reddy [2020 (10) TMI 354 - ITAT BANGALORE] - Department had accepted that the assessee in those cases was entitled for long term capital gain. In our view, the department is supposed to take coherent, consistent and uniform stand against all the assessees, who are similarly situated and whose rights are emanating from the very same agreement. In our view, the department cannot take the contrary view, which has been taken in a group of assessees to the determinant to the assessee before us. The law abhor uncertainty and selective approach against any individual.
The assessee can opt for monetary consideration and receive the consideration in the shape of share in the sale of project. In the light of the above, though, the clarification and the MCQ(supra) had been issued subsequently, however, the circular and the MCQ are in the same line of reasoning as given by the co-ordinate Bench and therefore, the order passed by the CIT(A) with respect to treating the income received by the assessee as long term capital gain is permissible and was in accordance with law. Accordingly, we dismiss the grounds of the Revenue on this aspect.
Deduction u/s 54F - AO while examining the case of the assessee has not decided on the entitlement of the assessee under section 54F of the Act, as the AO has considered the income received by the assessee as business income - Issue remanded back to the file of AO with a direction to decide the claim of allowability of the assessee u/s 54F in accordance with law after granting due opportunity of hearing to the assessee. The assessee also shall be at liberty to file documents, if any, as required for proving its case and the Assessing Officer shall consider such evidences, if any, filed by the assessee. Needless to say, the Assessing Officer shall examine those documents / evidence filed by the parties and thereafter pass a detailed speaking order.
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