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Showing 21 to 40 of 1466 Records
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2024 (6) TMI 1446
Software development expenses - revenue or capital expenditure - HELD THAT:- The issue has already been decided in the assessee’s own case by the co-ordinate bench of the Tribunal [2024 (5) TMI 1544 - ITAT CHENNAI] by following the decision of the Tribunal we dismiss the ground by upholding the decision of the ld.CIT(A) of software development expenditure as capital asset and allowing the deprecation on the same @ 60%. The corresponding ground stand dismissed.
Recovery of Bad-Debt written off in the books of amalgamating Companies - HELD THAT:- Admittedly, this issue is covered against the assessee by the order of Tribunal in earlier years. In latest decision in [2024 (5) TMI 1544 - ITAT CHENNAI] held that after amalgamation, the assessee has all the rights as well as liabilities of amalgamating company which were transferred to it. Such recoveries of bad-debts were nothing but business receipts for assessee and therefore, assessable in its hands. Respectfully, following the same, we dismiss the grounds urged by assessee, in other three A.Ys. i.e. 2015-16, 2016-17& 2017-18 also.
Rate of depreciation on UPS - assessee claimed depreciation on UPS system @60% - AO restricted the same to 15% - HELD THAT:- We find that this issue has been decided by Tribunal in assessee’s favour. In for the A.Y. 2012-13 to 2014-15 [2024 (5) TMI 1544 - ITAT CHENNAI] the Tribunal confirmed first appellate order which allowed depreciation of 60%.
Disallowance u/s.14A r.w. Rule 8D - HELD THAT:- Tribunal in assessee’s own case [2024 (5) TMI 1544 - ITAT CHENNAI] for the A.Y. 2012-13 to 2014-15, accepted the propositions of Ld. AR. Following consistent stand of Tribunal, we direct Ld. AO to verify whether assessee’s own funds are sufficient enough to cover the investment. If so, interest disallowance would not be justified. Further, the indirect disallowance of 0.5% should be computed only on those investments which have yielded exempt income during the year.
Method of recognizing income on hire purchase contracts - HELD THAT:- We find that this issue is covered by the latest order of Tribunal [2024 (5) TMI 1544 - ITAT CHENNAI] as considered the decision of Hon’ble High Court of Madras in assessee’s own case as directed Ld. AO to tax the interest income on EMI method or ESM method which was consistently being followed by the assessee and allow consequential relief in accordance with law. Considering the same, similar directions were issued by Tribunal.
Since facts are pari-materia the same in this year, the Assessing Officer and the Ld.CIT(A) have already affirmed the income offered to tax to the tune is in consistency with the method of income followed in hire purchase finance charges as correct. In our considered view, the claim of the assessee for a reduction from total income of Rs. 510.90 lacs which was brought to tax in the earlier years is not acceptable and therefore the ground of the assessee is dismissed.
Inclusion of Notional Income related to NPA as income for the A Y 2011-12 - HELD THAT:- As assessee stated that the action of assessing officer will be appropriate only if uniformly the income is assessed for all the years. Since, the department is still pursuing before the High Court for earlier years contending that notional income on the basis of contract should be assessed. If that stand is upheld then the same amount cannot be taxed in the year of receipt. We have perused the issue and we consider that there is no reason to interfere in the decision of lower authorities and dismiss the ground of the assessee.
Disallownace of Pooja Expense - HELD THAT:- Profits declared, customer base and employees of the assessee company, the amount of expenditure spent forpooja expenses as a commercial expediency to the business and claiming such expenditure is reasonable. The amount spent towards Pooja expenses is a miniscule compare to the turnover and profits of the assessee.
Considering the decision of the high court of P&H in the case of Atlas cycle Industries Ltd [1980 (10) TMI 19 - PUNJAB AND HARYANA HIGH COURT] the claim of pooja expenses claimed by the assessee cannot be denied as inadmissible expenditure. Therefore, we are of the considered view that the said expenditure is spent by the assessee company is a commercial expediency and claiming the same as business expenditure cannot be termed as personal in nature and hence appeal of the assessee is allowed by dismissing the decision of by the lower authorities. Hence, the assessee succeeds in this ground and allowed.
Disallowance of presentation to employees / customers - amount spent towards gifts and compliments given to the customers and employees on the special occasions like marriage, opening ceremonies and anniversaries - HELD THAT:- Considering the huge turnover, Profits declared, customer base and employees of the assessee company, the amount of expenditure spent on account giving gifts and compliments to employees and customers as a commercial expediency to the business and claiming such expenditure is reasonable. Therefore, the said expenditure is spent by the assessee company is a commercial expediency and claiming the same as business expenditure cannot be termed as personal in nature and hence appeal of the assessee is allowed by dismissing the decision of disallowing the same by the lower authorities. Hence, the assessee succeeds in this ground and allowed.
Rate of Depreciation on Commercial vehicles - assessee claimed higher depreciation of 50% on leased vehicles - AO rejected the claim on the ground that the assessee was involved in the business of finance and leasing and the accelerated depreciation was not available to them - HELD THAT:- CIT(A) allowed the claim of the assessee by considering item no. 3(via) as inserted in New Appendix-1 (Table of Rates at which depreciation is admissible). w.e.f. 01-04-2009 stating AO erred in disallowing the depreciation claimed by the appellant. AO is directed to allow depreciation at the higher rate of 50% for the new motor vehicles acquired between 1.1.2009 and 30.09.2009 and used for the purposes of their business - Decided in favour of assessee.
Loss on sale of repossessed assets allowed as expenditure - HELD THAT:- Assessee is into business of financing for purchase of assets to customers and in case of default in repayment, such assets are repossessed as per the terms of agreement and or sold to the third parties. If, the amount realized on sale of repossessed assets falls short of the principal amount outstanding, it results in a loss which is nothing but a bad debt which has been written off in the books as ‘loss on sale of repossessed assets’. Since, assets are treated as stock in trade the resulting on disposal of the same is a trading loss and an admissible business deduction as a bad debt written off u/s. 36(1)(vii) of the Act.
We are inclined to uphold the decision of the ld.CIT(A) of deleting the disallowance of expenditure by the AO, and direct the AO to verify the correctness of the claim of ‘loss on sale of repossessed assets’ and allow the expenditure in accordance with law. Therefore, this ground of the revenue is dismissed.
Depreciation on Computer Software @60% - AO restricted the depreciation to 25% and thereby made a disallowance - HELD THAT:- no infirmity in the order of the ld.CIT(A) in deleting the disallowance of depreciation made by the AO. The admissibility of depreciation @60% for computers including computer software has been clearly mentioned inentry no. 5 under the head ‘machinery and plant’ of the table of the rates at which the depreciation is admissible (new appendix-I u/r. 5 of the I.T. Rules, 1962). This issue has already been endorsed in the case of ACIT vs TNQ Books and Journals Pvt Ltd. [2016 (6) TMI 1493 - ITAT CHENNAI] - Thus we hold that allowing the appeal of the assessee for claiming the depreciation at 60% by the ld.CIT(A) is in accordance with law and does not require interference.
Disallowance of Bad and doubtful debts - HELD THAT:- We find that this issue has been settled in assessee’s favour by coordinate bench in its order [2024 (5) TMI 1544 - ITAT CHENNAI] for the A.Y. 2012-13 to 2014-15. The coordinate bench, dismissed revenue’s appeal.
Nature of expenses - Non Compete fees - revenue or capital expenditure - HELD THAT:- As relying on Guffic cum P ltd [2011 (3) TMI 6 - SUPREME COURT] and Carborandum Universal Ltd [2012 (10) TMI 178 - MADRAS HIGH COURT] non-compete fee paid by the assessee is allowable expenditure u/s. 37(1) of the Act and hence, the ground of the revenue is dismissed.
Business Origination Cost - AO has disallowed such expenditure treating it as capital in nature since it results in increased effectiveness and efficiency of the business - HELD THAT:- We find that this issue has been dealt with by tribunal in [2024 (5) TMI 1544 - ITAT CHENNAI] as chose to follow the decision of Taparia Tools Pvt. Ltd. [2015 (3) TMI 853 - SUPREME COURT] where in it was held that normally revenue expenditure incurred in a particular year has to be allowed in that year and if the assessee claims the full expenditure, department could not deny the same. Finally the claim was allowed. Therefore, this issue is covered in Assessee’s favour.
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2024 (6) TMI 1445
Issuance of show cause notices under GST regulations - HELD THAT:- It is noticed that the proceedings, which emanated with the issue of show cause notice dated 31.10.2022 in Show Cause Notice cum Demand Notice No.121 of 2022-GST is yet to be adjudicated and orders are yet to be passed. However, pending orders, the impugned show cause notices have been issued to the petitioner.
The aforesaid order, without awaiting for the order in Show Cause Notice cum Demand Notice No.121 of 2022 dated 31.10.2022, cannot be passed. As the issues are intertwining, the respondent ought to have passed common order after hearing the petitioner in the first mentioned show cause notice and impugned show cause notices.
Petition disposed off.
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2024 (6) TMI 1444
Penalty u/s 271(1)(c) - Defective notice - non specification of whether the penalty has been levied for concealment of income or for furnishing inaccurate particulars of income - HELD THAT:- Issue is squarely covered by the decision of Mohd. Farhan A. Shaikh [2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] Accordingly, the penalty order passed under section 271(1)(c) of the Act for the assessment year 2010-11 is quashed.
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2024 (6) TMI 1443
Rectification u/s 254 - Levy of penalty u/s 271(1)(c) - disallowance of exemption of capital gains earned, u/s 54F & 54EC - ITAT found that the claim was disallowed for the reason that new house was not purchased within the stipulated time as prescribed under the law, since the assessee had invested Rs.30 lakhs in the said property within stipulated period prescribed u/s 54F, therefore, the assessee was eligible to deduction of exemption to the extent of Rs.30 lakhs.
HELD THAT:- As the exemption denied by the AO under section 54F was allowed by the ITAT to the tune of Rs.30 lakhs. While penalty has been confirmed by the ITAT even on the addition/disallowance deleted by the ITAT in quantum proceedings.Therefore, the facts as stated by assessee that the ITAT has confirmed penalty even on the addition deleted is found to be factually correct.
As during the course of hearing, which took place before the ITAT on various occasions, the assessee in the first instance itself had placed copy of the order of the ITAT in quantum proceedings demonstrating the fact that of having been granted relief to the extent of Rs.30 lakhs, which was even taken note of by the Bench, when the appeal was first heard on 21.2.2020. Therefore, it cannot be denied that order of the ITAT in the quantum proceedings was very much part of the records and non-consideration of the same, while dealing with the appeal of the assessee, in penalty proceedings, does tantamount to a mistake apparent from record. Even if the assessee did not refer to the same when the appeal was finally heard the fact remains that the order was very much part of the record before us and non-consideration of the same tantamounted to error in the order of the ITAT.
Even otherwise, we may state that even if the assessee had failed to place on record the order passed by the ITAT in the quantum proceedings granting relief to the assessee to the extent of Rs.30 lakhs, the said order being a public document, non-consideration of the effect of the same in penalty proceedings would still tantamount to mistake apparent from the record. The fact remains that in the quantum proceedings, the assessee has been granted relief to the tune of Rs.30 lacs allowing exemption u/s. 54F of the Act to the said extent against capital gains returned and confirming penalty on this addition which stands deleted by the ITAT, is clearly impermissible in law. There cannot be any case for penalizing the assessee for an offence which has been found to have not been committed at all, and therefore, the confirmation of penalty on this aspect i.e. on the addition which stood deleted by the ITAT, was in any case a mistake which was eligible for rectification under section 254(2) of the Act. It is a clear and apparent mistake and the MA filed by the assessee needs to be allowed, which we hold so. MA allowed.
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2024 (6) TMI 1442
Seeking grant of interim bail - bail sought on the ground that the health condition of his uncle is getting bad to worse, day by day - HELD THAT:- The applicant, in the present case, is seeking the interim bail on the ground of ailment of his uncle, who, as per the application, met with an accident, on 10th April, 2024 and stated to be in intensive care unit. However, there is nothing on record to probabilize, at this stage, that the doctors have opined that there are no chances of recovery of the patient.
As such, considering the apprehensions, which have been expressed by the Enforcement Directorate, in the status report, this Court is of the opinion that the applicant is not entitled for the relief, which has been sought in the application. Moreover, the apprehensions, which have been expressed, in the status report, cannot be said to be unfounded, at this stage.
Consequently, the applicant is not able to make out a case for grant of interim bail, at this stage. Consequently, the bail application is dismissed.
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2024 (6) TMI 1441
Disallowance of deduction u/s. 80P(2)(d) in intimation u/s. 143(1) - HELD THAT:- As scope of adjustment u/s. 143(1)(a) provides that adjustment can be made from Clause (i) to (vi). Sub-clause (v) which existed prior to 01/04/2021 only permitted adjustment u/s. 10AA, 80AIA, 80IAB, 80IB, 80IC, 80ID or Section 80IE.
There was no scope of making any prima facie adjustment u/s. 80P. The amendment was brought in the statute to include Section 10AA or under any provision of Chapter VIA if the return of income has been furnished beyond the due date specified under sub-section (1) of Section 139.
Thus, prior to A.Y. 2021-22, no such adjustment could have been made. Moreover, here in this case as held above, the return of income was furnished within the due date prescribed u/s. 139(1). Thus, the entire disallowance was beyond the scope of Section 143(1) itself. Disallowance made by the CPC and as confirmed by the ld. CIT(A) is set aside and assessee is entitled for reduction u/s. 80P. Appeal of the assessee is allowed.
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2024 (6) TMI 1440
Money Laundering - proceeds of crime - acquisition and possession of assets disproportionate to known sources of income by the Petitioner and his wife and other family members - applicability of Section 45 read with Section 44 of the PML Act - it was held by High Court that the proceedings under the PMLA are maintainable, a prima facie case is established, and the anticipatory bail is not warranted.
HELD THAT:- Issue notice returnable on 29th July, 2024.
In the meanwhile, the petitioner shall not be arrested in connection with Complaint Case (PMLA) No .11 of 2022 arising out of ECIR No. ECIR/BBZO/01/2019 dated 22nd January, 2019 at Bhubaneswar Sub-Zonal Office of Enforcement Directorate pending before the District and Sessions Judge-cum-Special Judge(PMLA), Khurda at Bhubaneswar subject to condition that within two weeks from today, the petitioner shall appear before the Special Court and furnish bonds for appearance in accordance with Section 88 of the Code of Criminal Procedure, 1973.
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2024 (6) TMI 1439
Addition u/s. 69 - AO made the addition solely based on the seized data and statement of the searched person, who paid the taxes on admission of such undisclosed ‘on-money' in cash - HELD THAT:-Such addition was made without affording an opportunity to the assessee to cross-examine the person, whose statements were relied upon. This is against the principles of natural justice.
Furthermore, the payments made by cheque aggregating were duly recorded in the assessee's books of account and reflected in her Axis Bank account. These entries have not been disputed by the AO. Therefore, the addition to this extent is not justified.
As regards the cash component assessee has consistently denied making such payment and there is no corroborative evidence brought on record by the AO to substantiate this addition. Therefore, in the absence of any conclusive evidence, the addition is not sustainable.
Appeal of the assessee allowed.
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2024 (6) TMI 1438
Imposition of penalty u/s. 43 of the Black Money Act, 2015 - failure to disclose immovable property located outside India - HELD THAT:- We find, that though, the assessee has not disclosed the said property in the schedule FA of the return of income filed for the assessment year 2016-17, the said investment in the property claimed to be under construction in Dubai, has always been shown in the returns of income in preceding years as well as in the succeeding years.
Otherwise also, during the assessment year under consideration, the assessee has paid certain advances to the builder so, it is wrong to say that the assessee has not disclosed his property to the income tax department. The appellant has already admitted that this is a bonafide and inadvertent clerical omission.
Thus, this is not a fit case where penalty u/s. 43 of BMA is imposable. Thus, the appeal of the revenue is dismissed.
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2024 (6) TMI 1437
CENVAT Credit availed of Service Tax paid by the service provider - denial on the ground that the debit note against which they have taken the credit is not a proper document to avail CENVAT Credit in terms of Rule 9(1) of the CENVAT Credit Rules, 2004 - also no services have been provided by the service provider to the appellant - HELD THAT:- There is no dispute to the facts of the case that the service provider has raised debit notes on the appellant for providing the service and Service Tax has been paid thereon. There is no provision to deny CENVAT Credit to the appellant in the CENVAT Credit Rules, 2004 if Service Tax is paid by them to the service provider.
Moreover, the debit notes issued by the service provider contains all the details required in terms of Rule 9 of the CENVAT Credit Rules, 2004, to avail CENVAT Credit. In these set of facts, we hold that the CENVAT Credit cannot be denied to the appellant.
There are no merit in the impugned order and accordingly, the same is set aside - appeal allowed.
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2024 (6) TMI 1436
Exemption claimed u/sec 10(10AA)(ii) - petitioners in these cases are retired employees of different Public Sector undertakings and Scheduled Banks - HELD THAT:- Similar issues have been considered and decided by this Court [2024 (6) TMI 1230 - KERALA HIGH COURT] as held petitioners all stood retired before the latest notification, which has been issued fixing the upper limit as Rs.25 lakhs for exemption from payment of earned leave income. The employer has also deducted the admissible tax above Rs.3 lakhs from the petitioners. At this distant point of time, this Court, considering the limitation on the power of the Court as well as the doctrine of separation of powers, cannot issue a mandamus to the respondent Authorities to revise the upper limit of the encashment of earned leave for granting exemption from payment of the income tax with retrospective effect. Issuance of notification, as provided in the provision, is in the realm of the powers of the Executive.
These writ petitions are disposed of with liberty to the petitioners to approach the Government for the reliefs sought for in these writ petitions, and the Government may take a decisions on their representations.
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2024 (6) TMI 1435
Best assessment judgement u/s 144 - Unexplained money u/s 69A r.w.s. 115BBE - assessee has failed to prove that the cash deposited during demonetization are normal business receipts - HELD THAT:- AR stated that assessee is a registered Co- operative Society engaged in the activity of collective disposal of labour of its members and is eligible for deduction u/s 80P - assessee has furnished computation of total income wherein net profit as per profit and loss account was shoen on which tax payable. The assessee has also submitted Form 26AS wherefrom it is seen that TDS was made. After giving credit for the TDS refund was due to the assessee. These facts were not before the Assessing Officer during the assessment proceedings.
In the appeal before first appellate authority, the appeal was not admitted because assessee has not paid advance tax as required u/s 249(4)(b) - the facts remain that the assessee did not file its return of income u/s 139(1) of the Act or in response to notice u/s 142(1) of the Act.
Before the Tribunal, assessee submitted paper book containing 94 pages including cash book, bank book, books of account, profit and loss account and balance sheet, copy of Form 26AS and computation of income. Hence, we are of the view that one more opportunity should be given to the assessee to plead his case before the AO. It is settled law that principles of natural justice require that the affected party is granted sufficient opportunity of being heard to present his case - Appeal of the assessee is allowed for statistical purposes.
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2024 (6) TMI 1434
Income deemed to accrue or arise in India - “make available” any technical knowledge, experience, skill, know-how or processes to group companies - receipts from GIT infrastructure charges ('GIT charges') by the assessee from its group companies for the use of various software are taxable as Fee for Included Services ('FIS') or Fee for Technical Services ('FTS') under section 9(1)(vii) of the Income Tax Act, 1961 and Article 12 of the India-Canada DTAA
HELD THAT:- Assessee do not “make available” any technical knowledge, experience, skill, know-how or processes to group companies which may enable them to apply any technology contained therein without recourse to the Appellant. The amounts received as GIT charges is only for providing use of third-party software and is not in the nature of FIS as envisaged under Article 12(4)(b) of India-Canada DTAA.
Whether the receipts can be considered as royalty as per Article 12 India-Canada DTAA has also been examined.
We find that the facts of the assessee are covered by the decision in case of Engineering Analysis Centre of Excellence Private Limited [2021 (3) TMI 138 - SUPREME COURT] after determining various clauses of EULA/ Distribution agreement held that payments made by the Appellant to non-resident vendors shall not be taxable as Royalty under the relevant DTAA.
We hold that payment made by Indian group entities to the Appellant is in consideration for use of software provided by third party vendor and is towards the ‘copyrighted article’, without any copyrights being granted for its commercial exploitation, hence, the same shall not qualify as ‘Royalty’ as per Article 12(3) of the India-Canada DTAA. Appeal of assessee allowed.
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2024 (6) TMI 1433
TDS u/s 194H - discount/margins granted on account of sale of SIM cards/recharge vouchers/talk time - HELD THAT:- As decided in Bharti Cellular Ltd. [2024 (3) TMI 41 - SUPREME COURT] the term ‘agent’ denotes a relationship that is very different from that existing between a master and his servant, or between a principal and principal, or between an employer and his independent contractor. The term ‘agent’ should be restricted to one who has the power of affecting the legal position of his principal by the making of contracts, or the disposition of the principal’s property; viz. an independent contractor who may, incidentally, also affect the legal position of his principal in other ways.
We hold that the assessees would not be under a legal obligation to deduct tax at source on the income/profit component in the payments received by the distributors/franchisees from the third parties/customers, or while selling/transferring the pre-paid coupons or starter-kits to the distributors. Section 194-H of the Act is not applicable to the facts and circumstances of this case. Accordingly, the appeals filed by the assessee – cellular mobile service providers, challenging the judgments of the High Courts of Delhi and Calcutta are allowed and these judgments are set aside. Decided in favor of assessee.
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2024 (6) TMI 1432
Review Petitioner under the provisions of the Right to Information Act from the Nilambur Police Station that no requisition/warrant of authorization u/s 132A had been issued - HELD THAT:- Tax Department has filed a memo producing therewith the warrant of authorisation issued under Sub- Section (1) of Section 132A of the Income Tax Act which is seen acknowledged by the Sub Inspector of Police, Nilambur on 08.06.2022.
It appears that the information provided to the Review Petitioner under the Right to Information Act from the Nilambur police station is incorrect. Since this is the only ground raised in the review petition, I am of the view that the petitioner has not made out any case for exercise of review jurisdiction. Accordingly, the Review Petition stands dismissed.
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2024 (6) TMI 1431
Validity of the jurisdiction assumed by the Jt. CIT, Range-1, Bilaspur - valid jurisdiction to act as the AO in the case of the assessee - absence of any order u/s. 120(4)(b) - HELD THAT:- Admittedly, as stated by the AR, and rightly so, no order u/s. 120(4)(b) of the Act had been passed by the Commissioner of Income Tax, Bilaspur conferring jurisdiction with the Jt. CIT, Range-1, Bilaspur to exercise or perform the powers and functions of the A.O in the case of the present assessee company before us.
Jt. Commissioner of Income Tax, inter alia, can exercise or perform all or any of the powers and functions conferred on, or assigned to the A.O under this Act, but as provided in sub-section (7A) of Section 2 of the Act, the same is subjected to a fundamental pre-condition that he is so directed under clause (b) of sub-section (4) of Section 120 of the Act to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under the Income Tax Act, 1961.
Accordingly, the Jt. Commissioner of Income Tax in absence of an order u/s. 120(4)(b) of the Act cannot exercise or perform all or any of the powers and functions conferred on or assigned to, an A.O under this Act. A corollary flowing thereto is that the Jt. Commissioner of Income Tax in absence of an order u/s. 120(4)(b) of the Act cannot frame the assessment u/s. 143(3) of the Act.
As decided in Tata Sons Ltd. [2016 (10) TMI 1228 - ITAT MUMBAI]had, inter alia, held that Addl. Commissioner of Income Tax can perform functions and exercise powers of an AO only if he is specially directed u/s. 120(4)(b) of the Act.
Jt. CIT, Range-1, Bilaspur in absence of any order passed by the specified authority u/s. 120(4)(b) of the Act had no jurisdiction to frame the assessment in the case of the assessee company before us, therefore, the calling into question of the same by the assessee company before us would not be hit by the prescribed time limit contemplated in Section 124(3) of the Act, which as observed by us hereinabove, is in context of the territorial jurisdiction of the A.O. Thus we quash assessment for want of valid assumption of jurisdiction. Decided in favour of assessee.
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2024 (6) TMI 1430
Unsecured loan u/s. 68 - HELD THAT:- Assessee had submitted the full details and documents in respect of the unsecured loan as well as interest expenses which was verified by the AO and the evidence as produced was found satisfactory.
There was no objection by the AO to the admission of the additional evidences as well. CIT(A) had, therefore, rightly deleted the addition on the basis of the additional evidences brought on record in the course of the appeal and the verification as was carried out by the AO in the remand proceeding.
We do not find anything wrong with the order of the ld. CIT(A). Therefore, the decision of the ld. CIT(A) to delete the addition in respect of unsecured loan is upheld.
Addition in respect of interest - CIT(A) correctly Restricted the addition to Rs. 43,466/- as recommended by the AO.
Aappeal of the Revenue is dismissed.
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2024 (6) TMI 1429
Refund of additional duty paid on imported mobile phones - rejection on the ground that the appellant had not provided reassessed Bills of Entry - requirement of determination of amount of duty under section 28(8) within six months from the date of issuance of the SCN.
Whether the requirement of section 28(9) of the Customs Act that the proper officer should determine the amount of duty under section 28(8) within six months from the date of issuance of the show cause notice is satisfied in the facts and circumstances of the case? - HELD THAT:- It is seen that after the notice has been issued under sub-section (1) of section 28, the proper officer has to determine the amount of duty under sub-section (8), but this has to be done within six months from the date of notice as contemplated under sub-section (9) of section 28 of the Customs Act.
In the present case, the notice under sub-section (1) of section 28 of the Customs Act was issued to the appellant on 26.09.2018, but it is only on 24.05.2021 that the Principal Commissioner determined the amount of duty under sub-section (8) of section 28 of the Customs Act. According to the department, though the time limit of six months for such determination may have expired on 25.03.2019 but in view of the provisions of the Relaxation Act and the orders passed by the Supreme Court in suo-moto proceedings relating to Covid Pandemic, the period stood extended, and the Chief Commissioner in terms of the proviso to sub-section (9) of section 28 also gave extension upto 30.06.2021. Thus, according to the department, the Commissioner determined the amount of duty within the time stipulated. According to the appellant, the provisions of the Relaxation Act or the directions contained in the orders passed by the Supreme Court in suo-moto proceedings do not come to the aid of the department and so the order deserves to be set aside for this reason alone.
The adjudication of the two show cause notices dated 26.09.2018 had been kept in abeyance owing to pendency of the appeal filed by the department before the Supreme Court and this reason ceased to exist on 18.09.2019 when the Supreme Court decided the appeal filed by the department in ITC. The period of six months from 18.09.2019 would expire on 17.03.2020.
The show cause notices, therefore, in view of the orders dated 08.03.2021, 27.04.2021 and 23.09.2021 could have been adjudicated upto 02.10.2021 and in the present case they were adjudicated on 24.05.2021. Thus, the show cause notices were adjudicated within time. It is also seen that the Chief Commissioner had also extended the time for adjudicating the show cause notices upto 30.06.2021 by exercising powers under the proviso to section 28(9) of the Customs Act.
It also needs to be noticed that while both the importer and the Revenue can appeal to the Commissioner (Appeals) under section 128 of the Customs Act against an order of assessment or self-assessment of a Bill of Entry, the proper officer has another option of issuing a show cause notice under section 28 of the Customs Act to demand and recover duties erroneously refunded. This is clear from a plain reading of section 28 of the Customs Act and in Collector of Central Excise, Kanpur vs. Flock (India) Pvt. Ltd. [2000 (8) TMI 88 - SUPREME COURT], the Supreme Court also held that an assessment can be modified either through an appeal or under section 28 of the Customs Act.
The appellant is, therefore, not justified in asserting that the notice under section 28 of the Customs Act could not have been issued to the appellant claiming ‘erroneously granted refund’ as the only remedy available to the department was to challenge the refund order by filing an appeal before the Commissioner (Appeals).
Conclusion - It is, therefore, not possible to accept the contention of the learned counsel for the appellant that order dated 24.05.2021 should be set aside for the sole reason that it was passed beyond the time period contemplated under section 28(9) of the Customs Act.
Seeking exclusion of the time period from the date of out of charge of the respective Bills of Entry till the date of judgment of the Supreme Court in ITC [2019 (9) TMI 802 - SUPREME COURT (LB)] - HELD THAT:- The conditions stipulated in section 14 of the Limitation Act were not satisfied by the appellant for the reason that the matter that was earlier pursued by the appellant before the department related to refund of Additional Duty and not re-assessment of Bills of Entry, which relief had been claimed in the appeals filed before the Commissioner (Appeals), and even if it is assumed that the appellant was pursuing the same matter, the refund applications were filed before the correct authority and there was no defect in jurisdiction. The Commissioner (Appeals) also held that the appellant was required to challenge the self-assessment before claiming refund and so the filing of the refund applications instead of challenging the assessment was not in good faith and was out of commercial consideration to reap the benefits arising out of the decision of the Supreme Court in SRF.
Whether section 14 of the Limitation Act can be applied to proceedings under section 128 of the Customs Act? - HELD THAT:- This aspect was examined at length by the Supreme Court in M.P. Steel Corporation vs. Commissioner of Central Excise [2015 (4) TMI 849 - SUPREME COURT]. The Supreme Court held that though on a plain reading of the provisions of the Limitation Act it would be clear that suits, appeals and applications are only to be considered from the limitation point of view if they are filed in courts and not before quasi-judicial bodies, but after making reference to the decision of the Supreme Court in P. Sarathi vs. State Bank of India [2000 (5) TMI 1063 - SUPREME COURT], the Supreme Court observed that it would also be applicable to proceedings before Tribunals.
In the present case, the appellant had also bona fide pursued the remedy of filing refund applications before the Deputy Commissioner instead of filing an appeal before the Commissioner (Appeals) against the order of assessment. The Delhi High Court had also, at the instance of the appellant, directed that refund applications should be allowed and refund should be sanctioned - Merely because the appellant had filed applications for refund of this Additional Duty of customs before the Deputy Commissioner and subsequently an appeal before the Commissioner (Appeals) for modifying the order of assessment would not mean that the two proceedings do not relate to the same matter. If it is held in the appeals that the appellant was not required to pay the Additional Duty of customs, it would result in granting relief of refund of the Additional Duty of customs. It also cannot be denied that both the proceedings were before a quasi-judicial authority. The Supreme Court held in M.P. Steel [2015 (4) TMI 849 - SUPREME COURT] that this would not be fatal for the reason that though section 14 of the Limitation Act may not strictly apply, yet the principles of section 14 of the Limitation Act will get attracted and that section 14 of the Limitation Act should be liberally construed to advance the cause of justice.
The principles laid down by the Supreme Court in M.P. Steel would, therefore, apply in the present case for excluding the time period under section 14 of the Limitation Act from the date of filing of the refund applications on 25.09.2015 upto 18.09.2019, on which date the Supreme Court decided ITC.
Whether the appeals can still be said to have been filed within the time period stipulated in section 128 of the Customs Act even if the aforesaid period from 25.09.2015 upto 18.09.2019 is excluded for the purpose of calculating the limitation period? - HELD THAT:- In the instant case, the Bills of Entry were self-assessed by the appellant and were filed from 07.10.2014 to 17.07.2015. They were given out of charge from 07.09.2014 to 17.07.2015. Even if the last of this date i.e. 17.07.2015 is taken into consideration, the refund applications were filed only on 25.09.2015. The appellant could have filed an appeal before the Commissioner (Appeals) within 60 days as provided under section 128(1) of the Customs Act. Thus, the appeal could have been filed within 60 days from 17.07.2015 i.e. upto 16.09.2015 and a delay of 30 days only after the expiry of the said period of 60 days could be condoned.
The decision of the Supreme Court in Singh Enterprises [2007 (12) TMI 11 - SUPREME COURT] emphasises that the language of the proviso to section 35(1) of the Central Excise Act, 1944 makes it clear that the Appellate Authority has no power to allow the appeal to be presented beyond the period of thirty days after the normal period of limitation of sixty days. In such circumstances, the Supreme Court held that there is complete exclusion of section 5 of the Limitation Act.
Conclusion - Even though the benefit of section 14 of the Limitation Act for exclusion of time period from 25.09.2015 upto 18.09.2019 would be available to the appellant, but still the 31 appeals would have to be dismissed as having been filed beyond the time period contemplated under section 128(1) of the Customs Act.
The Commissioner (Appeals), therefore, committed no illegality in dismissing the appeals.
Appeals dismissed.
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2024 (6) TMI 1428
Reopening notice against dead person - applicability of Section 159(2)(b) concerning the continuation of proceedings against the legal representative- HELD THAT:- The admitted fact being that the notice is issued against a dead person and the assessee has died on 14.10.2022, the notice is invalid in law. In the event the assessee had died even before the issuance of notice u/s 148 of the Act, only procedure making it permissible to initiate proceedings is the satisfaction of the test under Section 159(2)(b) of the Act.
Notice against the legal representative - The present proceedings under Section 148 of the Act are as regards the assessment year 2016-17, the time limit for the proceedings under Section 148 would be in terms of Section 149(1)(b) proviso. In terms of the proviso there is a bar for issuance of notice under Section 148 in a case for a relevant assessment year before 01.04.2021 and in the present case as the assessment year 2016-17 falls within the applicability of the proviso, and proceedings would have been initiated within 31.03.2023 within the outer limit of 6 years from the end of assessment year 2016-17 as against the legal representative.
Accordingly, at this stage while setting aside the notice under Section 148 of the Act, question of granting liberty would be contrary to the mandate of time prescribed under Section 149(1)(b) proviso.
No doubt it is the contention of learned counsel for the revenue that intimation if given within time, the revenue would have initiated fresh proceedings against the legal representatives.
Taking note of the order in the case of Alamelu Veerappan [2018 (6) TMI 760 - MADRAS HIGH COURT] as well as Savitha Kapila [2020 (7) TMI 441 - DELHI HIGH COURT] we find that there is no support for the contention that there is a statutory obligation on the deceased assessee to intimate the department. The observation made in the case of Savitha Kapila [2020 (7) TMI 441 - DELHI HIGH COURT] requires endorsement in the present case also. Decided in favour of assessee.
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2024 (6) TMI 1427
Valuation of motor vehicles when the bodybuilders fabricate and mount bodies on chassis supplied by the appellants - Applicability of Rule 10A of the Central Excise Valuation Rules, 2000 - HELD THAT:- This case is no longer res integra having been decided by the Tribunal in the case of Audi Automobiles [2009 (5) TMI 426 - CESTAT, NEW DELHI] and a number of cases involving one of the bodybuilders.
CESTAT in the case of Audi Automobiles [2009 (5) TMI 426 - CESTAT, NEW DELHI] held that 'it is apparent that the said firms had cleared the goods in relation to the body fabricating and mounting on the chassis which were supplied to the said firms free of cost by the manufacturer of chassis. Being so, the activity for the purpose of valuation would squarely fall under Rule 10A and not under Rule 6.'
There is no merit in the appeals and there is no need to interfere with the impugned orders - Appeal dismissed.
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