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Showing 341 to 360 of 844 Records
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2020 (7) TMI 505
Disallowing the claim of exemption u/s.11 - assessee is registered u/s.12A - CIT- A upheld the action of the ld. AO that assessee trust is only a mutual association and accordingly, any receipt received from non-members would be liable to tax as business income and held that assessee’s case is squarely covered by the proviso to Section 2(15) of the Act and accordingly, upheld action of the ld.AO in rejecting the claim of Section 11 - HELD THAT:- Admittedly, the activities carried on by the assessee were not with a view to make profits. It is not even the case of the revenue that assessee trust is not existing for the purpose of ‘not for profit’ within the meaning of Section 11-13 of the Act. We find that the ld. AO had erroneously treated the assessee as a mutual association instead of charitable organization merely on the ground that services were rendered by the assessee to its members. It is pertinent to note that assessee had not even claimed to be a mutual association and had not claimed any exemption from Income Tax on the basis of principle of mutuality.
We find from the perusal of the orders of the lower authorities that nowhere they had pointed out that assessee activities involved in the nature of trade, commerce or business or activity of rendering any service in relation to any trade, commerce or business and in consideration of which a cess or fee has been received by the assessee. Hence, we hold that assessee’s case does not fall within the ambit of proviso to Section 2(15) of the Act. - Decision in the case of ALL INDIA RUBBER INDUSTRIES ASSOCIATION VERSUS ADIT (E) [2018 (10) TMI 1172 - ITAT MUMBAI] followed - Decided in favour of assessee.
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2020 (7) TMI 504
Validity of reopening of assessment u/s 147 - Income accrued in India - Assessee had shifted to the United States - period of stay in India - amount held by HSBC Private Bank, Geneva, Switzerland, in the name of Tharani Family Trust, of which the assessee was a beneficiary - whether the assessee was a resident in India in this year or not? - HELD THAT:- The income tax return filed by the assessee, which was available at the time of recording the reasons for reopening the assessment, did not show the status of non-resident. The recording of reasons cannot thus be faulted. Whatever claim is made subsequently is required to be dealt with in the subsequent proceeding but it will not vitiate the validity of reasons recorded for reopening the assessment.
As regards the decisions that reopening cannot be done for mere verifications, the present case is not a case which some general and vague information is received about the assessee, which may or may not lead to an income escaping assessment in the hands of the assessee, and which is thus required to be examined on merits, but of a very specific cogent information regarding a bank account, with complete details that is good enough for holding at least the prima facie view that income has escaped in the assessment in the hands of the assessee. The peak balance in the account, which has subsequently come to the knowledge of the Assessing Officer and on the basis of which reopening is done, is tens of thousand times more than annual income of the assessee.
Assessee had shifted to the United States only just seven days before the beginning of the relevant previous year, and it will be too unrealistic an assumption that within these seven days plus the relevant financial year what the assessee could have earned this huge amount of around ₹ 200 crores, which, at the rate at which she did earn in India in the last year, would have taken her more than 11,500 years to earn. Even if one goes by the basis, though the material on record at the time of recording reasons did not at all indicate so, that the assessee was a non-resident in this assessment year, which is, going by the specific submissions of the assessee, was admittedly first year of her “non-resident” status, it was wholly unrealistic to assume that the money at her disposal in the Swiss Bank account reflected income earned outside India in such a short period of one year.
Since the assessee did not disclose the status of “non-resident” in the income tax return filed by the assessee anyway, and the reasons recorded for reopening the assessment can only be on the basis of material on record or the information coming in the possession of the Assessing Officer- which indicated that the assessee was a “resident” in the relevant previous year, this aspect of the matter is wholly the sole and decisive factor leading to our conclusion about correctness of the reasons recorded for reopening the assessment.
Addition in the hands of the assessee being an amount held by HSBC Private Bank, Geneva, Switzerland, in the name of Tharani Family Trust, of which the assessee was a beneficiary - HELD THAT:- No reasonable person can accept the explanation of the assessee. The assessee is not a public personality like Mother Terresa that some unknown person, with complete anonymity, will settle a trust to give her US $ 4 million, and in any case, Cayman Islands is not known for philanthropists operating from there; if Cayman Islands is known for anything relevant, it is known for an atmosphere conducive to hiding unaccounted wealth and money laundering, and that does not advance the case of the assessee.
While we have noted the claim of the assessee that she is a discretionary beneficiary of Tharani Family Trust, that fact does not find mention in the base note. As we have clearly analyzed above, the base note shows that the assessee was beneficial owner or beneficiary of GWU Investments Ltd. We may add that in the remand report filed by the Assessing Officer, there is a reference to some unsigned draft copy of the trust deed having been filed before him but neither this deed is authentic nor is it placed before us in the paper-book. The assessee has not submitted the trust deed or any related papers but merely referred to a somewhat tentative claim made in a letter between one Mahesh Tharani, apparently a relative of the assessee and the HSBC Private Bank (Suisse) SA- an organization with a globally established track record of hoodwinking tax authorities worldwide.
It is wholly un-understandable as to how can assessee, on one hand, seek to treat a cleverly worded private letter from HSBC Private Bank (Suisse) SA as gospel truth, and, on the other hand, effectively stall, by declining consent waiver and by stating half truths- even if her statements have an element of truth, the Assessing Officer obtaining direct information from the same organization. There is no meeting ground in this approach. In any case, for the reasons set out above and as evident from the base note, the assessee is beneficial owner of GWU Investments Ltd, Cayman Islands. There is nothing to controvert this fact stated in the base note, and since the assessee has declined consent waiver in this case, the assessee cannot decline correctness of the details obtained from the HSBC Private Bank (Suisse) SA.
As regards the question of income which can be brought to tax in the hands of the assessee being a non-resident and certain errors in computations on account of duplicity of entries etc, we have noted that the learned CIT(A) has given certain directions which we have reproduced below paragraph 18 of this order, and neither these directions are challenged nor any infirmities are shown therein. Obviously, therefore, there is no occasion, or even prayer, for interference in the same. We approve the conclusions arrived at by the learned CIT(A) and decline to interfere in the matter. The impugned addition in respect of assessee’s account with HSBC Private Bank (Suisse) SA, Geneva, is thus confirmed. - Decided against assessee.
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2020 (7) TMI 503
Late filing of fees u/s.234E - intimation u/s.200A - HELD THAT:- On perusal and analyzing the details , it is absolutely clear that prior to 1.6.2015, there was no enabling provision in section 200A of the Act for raising a demand in respect of levying fee u/s.234E. Therefore, we hold that the intimation u/s.200A of the Act as confirmed by the Ld. CIT so far as levying of fees u/s.234E of the Act is, therefore, set aside and the fees levied is deleted. See CHHATTISGARH RAJYA GRAMIN BANK VERSUS INCOME TAX OFFICER [2019 (1) TMI 1791 - ITAT RAIPUR] - Ground raised by the assessee is allowed.
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2020 (7) TMI 502
Disallowance u/s.14A r.w.Rule 8D(2) - disallowance made under third limb of Rule 8D(2) of the Rules - HELD THAT:-We find that the Hon’ble Supreme Court in the case of Maxopp Investments Ltd., [2018 (3) TMI 805 - SUPREME COURT] had held that in the case of bank, investments that are held as ‘stock in trade’ cannot be subject matter of disallowance u/s.14A. The Special Bench of Delhi Tribunal in the case of Vireet Investments [2017 (6) TMI 1124 - ITAT DELHI] had held that those investments which had not yielded any exempt income should not be considered for the purpose of working out the disallowance u/s.14A of the Act r.w.Rule 8D(2) of the Rules.
We direct the ld. AO that since, assessee being a bank, investments held as ‘stock in trade’ should not be considered for the purpose of working of disallowance u/s.14A of the Act irrespective of the fact whether exempt income was derived from such investments or not. Strategic investments held by the assessee which had yielded exempt income alone are to be considered for the purpose of working out the disallowance u/s.14A of the Act read with Rule 8D(2)(iii) of the Rules.
Deduction for provision for bad and doubtful debts u/s.36(1)(viia) - HELD THAT:- We find that the ld. CIT(A) in principle had accepted to the fact that assessee would be entitled for deduction u/s.36(1)(viia) of the Act which would be restricted to 7.5% of total business income plus 10% of average rural advances. This is the benefit provided to the assessee in the statute which had to be duly provided to the assessee. The ld. AO is hence directed to apply this statutory provision and consider the claim of deduction u/s.36(1)(viia) of the act for the year under consideration after suitable verification of the details provided by the assessee.
Claim of deduction towards bad debts written off u/s.36(1)(vii) - HELD THAT:- As opening credit balance brought forward as on 1st April of the relevant accounting year in provision for bad and doubtful account is more than the bad debts written off during the year, the appellant will not be entitled to any deduction u/s.36(1)(viia) in the above manner. The AO after examining the balance in provision for bad and doubtful debts account 36(1)(viia) shall allow deduction of bad debts written off only if it exceeds the credit balance in the provision account as explained.
Broken period interest - HELD THAT:- CIT(A) had deleted this addition by following the decision of the Hon’ble Jurisdictional High Court in assessee’s own case and the decision of this Tribunal in assessee’s own case for A.Y.2008-09 and 2009-10 and 2010-11 [2015 (9) TMI 643 - ITAT MUMBAI]. In all these decisions, it was held that the broken period interest paid by the assessee is allowable as deduction while computing total income of the assessee.
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2020 (7) TMI 501
Disallowance of short term capital loss on sale of shares - HELD THAT:- As assessee had filed various documents in the form of shareholders agreement, agreement of Banakhat etc., before the ld. AO which was not discussed by the ld. AO in his order for arriving at a conclusion that loss of shares on sale is not allowable. We find adjudication of all these documents would assist in proper decision making process of the issue involved herein. Hence, we deem it fit and proper in the interest of justice and fair play, to remand this issue to the file of the ld. AO for denovo adjudication in accordance with law. In view of this decision from our side, we refrain to give our opinion on various arguments made by the learned Counsel for the assessee and all those issues are left open. Assessee is also at liberty to furnish additional evidences, if any, in support of its contentions. Accordingly, ground No.1 raised by the revenue is allowed for statistical purposes.
Claim of deduction towards bad debts u/s.36(1)(vii) - MAT Computation - Assessee has not made any claim - assessee had voluntarily added back this sum in the return of income under normal provisions of the Act - HELD THAT:- We find from the computation of income for the year under consideration that even without adding these bad debts of ₹ 2.27 Crores in the profit and loss account of the assessee, the assessee would not fall within the ambit of provisions of Section 115JB in view of loss - as rightly pointed out by the ld. AO in his order that this would certainly have an impact in the carry forward of book loss which need to be reduced while computing the book profits u/s.115JB in future years. But at the same time, we find that this is not an item that could be added back as per the list of items required to be added back pursuant to Explanation to Section 115JB(2) - It is not the case of the revenue that this claim of bad debt of ₹ 2.27 Crores is ingenuine or is not emanating from the business of the assessee company.
As in the case of Apollo Tyres Ltd., [2002 (5) TMI 5 - SUPREME COURT] had categorically held that the ld. AO is not empowered to disturb the net profit as per profit and loss account which has been prepared in accordance with part II and part III of schedule-VI of the Companies Act, 1956, except in respect of specified items that could be disallowed and reduced as per Explanation to Section 115 JB(2) of the Act. In view of this, we do not appreciate the addition to book profits made by the ld. AO. - Decided against revenue.
Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [2020 (5) TMI 359 - ITAT MUMBAI]
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2020 (7) TMI 500
Disallowance u/s 14A - rectification of mistake u/s 154 - HELD THAT:- AO has to examine correctness of the said suo-motu disallowance having regard to the books of account maintained by the assessee. If, the assessee neither makes any disallowance in the return of income nor furnishes the reason for doing so, the AO cannot be expected to record his satisfaction in vacuum. This, in our humble opinion, is the law propounded by the Hon’ble Supreme Court in [2018 (3) TMI 805 - SUPREME COURT]. We find that in the instant case before us, no suo-motu disallowance was made by the assessee towards indirect expenses u/s.14A. We are afraid that if the stand of the assessee is to be accepted, then the very purpose of introduction of provisions of Section 14A would stand defeated. Hence, we dismiss this line of argument of recording of satisfaction by the assessee in the peculiar facts and circumstances of the instant case.
In the instant case, admittedly, there is no direct expenditure incurred for the purpose of earning exempt income. Hence only the indirect / administrative expenses are to be considered for working out the disallowance. We find that the assessee had held investments to the tune of ₹ 66.92 crores as on 31.3.2008 and derived exempt income in the form of dividends during the Asst Year 2008-09 .
Considering the intention behind introduction of provisions of section 14A of the Act, the law laid down in various supreme court decisions referred to supra , considering the fact that computation of disallowance of indirect expenses in terms of Rule 8D(2)(iii) of the Rules resulting in absurdity in as much as majority of the expenses debited in the income and expenditure account getting disallowed thereon, considering the fact that substantial exempt income was derived by the assessee and considering the fact that definitely some time and energy would have been devoted by the assessee for monitoring the accounts tracking the investments and additionally incurring certain common indirect expenses , we hold that 25% of the aforesaid expenditure (i.e as per list above) to be attributable for the purpose of earning exempt income of the assessee which would meet the ends of justice in the peculiar facts and circumstances of the instant case. We hold that this decision would not fall as binding precedent for other cases due to its peculiar facts and circumstances.- Decided in favour of assessee.
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2020 (7) TMI 499
Entitlement for interest u/s. 244(1A) on the refund - whether the assessee is entitled for interest u/s.244 for the period 29/10/2013 to 22/11/2017? - HELD THAT:- It is not in dispute that the entire taxes were ultimately paid by the assessee on 29/10/2013 either by way of physical payment or by way of adjustment of refund as narrated hereinabove. We find that while giving effect to the order of the Tribunal order in the proceedings dated 21/11/2017 passed by the ld. AO, the ld. AO had finally determined the refund which was ultimately adjusted against the demand of A.Y.2009-10.
This is a case of assessee seeking interest on the taxes actually paid by him which ultimately resulted in refund vide proceedings dated 21/11/2017. This is not a case of assessee claiming interest on interest. Hence, we direct the ld. AO to grant interest u/s.244 for the period 29/10/2013 to 21/11/2017. Accordingly, the ground No.2 raised by the assessee is allowed.
Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [2020 (5) TMI 359 - ITAT MUMBAI].
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2020 (7) TMI 498
Notional rental income on commercial property u/s 23(1)(a) - notional rental income on unsold stock u/s 23(1)(a) - HELD THAT:- In the case in hand a show-cause notice for cancellation of lease was issued on 25.8.2013 and ultimately lease of plot was cancelled vide order dated 31.12.2015, therefore, we find force in the submission of assessee that after issuance of show-cause notice for cancellation of lease on which building was developed, the assessee was not entitled to let out occupied/constructed portion.
We find force in the submission of the AR that after issuance of show-cause notice the assessee was not entitled to let out the property. Hence, taxing notional income of unoccupied portion of building on the basis of deemed annual letting value is not justified by the AO - we direct the AO to delete the disallowance. Considering the fact that we have accepted the contention of assessee was legally not entitled to let out the property.
As noted that the issue is already been adjudicated by Tribunal in earlier year, wherein it is held that once, there is show cause notice issued to the assessee for cancellation of lease and finally the lease was cancelled vide order dated 31.12.2015 and the same was served to assessee on 01.01.2016. This being impossibility of renting out the property, the AO is not justified to charge notional rent from this property and assess the same as income from house property as deemed income. - Decided in favour of assessee.
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2020 (7) TMI 497
Reopening of assessment u/s 147 - Claim of deduction u/s 80P(2) against enhanced income - HELD THAT:- As established beyond doubt that the re–opening of assessment is not on the basis of any tangible material but on a mere change of information. AO has re–opened the assessment after expiry of four years there is no allegation either in the assessment order or anywhere else stating that the escapement of income was due to failure on the part of the assessee to disclose all material facts relating to his income truly and correctly. Accordingly, the condition enshrined in section 147 is not fulfilled. For the aforesaid reasons, we agree with Commissioner (Appeals) that the re–opening of assessment under section 147 of the Act in the present case is invalid.
Deduction u/s 80P(2) against enhanced income due to disallowance of capital expenditure - HELD That:- in view of the decision of the Hon'ble Supreme Court, the issue stands settled in favour of the assessee. As regards the other deductions claimed by the assessee and disallowed by the Assessing Officer, we fully agree with learned Commissioner (Appeals) that since such disallowances were in course of assessee’s regular business activities, they will only enhance the business profit of the assessee.
Therefore, the assessee will be entitled to claim deduction under section 80P(2)(a)(i) of the Act in respect of such enhanced income. Accordingly, we dismiss the grounds raised by the Revenue.
Disallowance under section 14A - HELD THAT:- On a perusal of the details filed, we are satisfied that the assessee has sufficient own fund to make the investment. Therefore, no disallowance on account of interest expenditure can be made. Further, in case of Maxopp Investment Ltd [2018 (3) TMI 805 - SUPREME COURT] has held that in case of Bank, investments are held as stock–in–trade. Hence, it becomes a business activity of the assessee.
That being the case, no disallowance under section 14A of the Act can otherwise also be made. In view of the aforesaid, we uphold the decision of learned Commissioner (Appeals) on the issue by dismissing the ground raised by the Revenue.
Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [2020 (5) TMI 359 - ITAT MUMBAI]
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2020 (7) TMI 496
Rectification u/s 154 - claim of deduction u/s 80JJAA denied - Claim made at the time of assessment proceedings - HELD THAT:- In the present case assessee did not make claim of deduction u/s 80JJAA in the return of income or revised return of income. The fresh claim was allegedly made at the time of assessment proceedings. In the assessment order dated 27/03/2015, the Assessing Officer has not made any note of assessee’s said claim.
In fact the AO had no occasion to consider assessee’s fresh claim as the same was filed on 28/3/2015 i.e. one day after the passing of the assessment order. The assessee filed petition u/s 154 for considering assessee’s claim of deduction u/s 80JJAA.
Appellate authorities are not precluded from entertaining assessee’s fresh claim not made in the return of income. The Hon’ble Jurisdictional High Court in the case of CIT vs. Pruthvi Brokers & Shareholders [1997 (4) TMI 39 - RAJASTHAN HIGH COURT] has held that an assessee is entitled to raise before appellate authorities additional claims not made in the return of income. Taking into consideration entirety of facts we are of considered view that asessee’s claim of deduction under section 80JJAA of the Act deserves to be admitted for consideration.
Since, legality and quantum of the claim were not examined by any of the lower authorities, without commenting on merit of claim, we deem it appropriate to restore the issue back to the file of Assessing Officer for consideration of same. While examining assessee’s claim, the Assessing Officer shall allow reasonable opportunity of hearing to the asseesee, in accordance with law. Appeal of the assessee is allowed for statistical purpose.
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2020 (7) TMI 495
TP Adjustment - notional interest adjustment - delay in realising the amount from the AEs - HELD THAT:- From the details furnished by ld. AR for the assessee about the delay in realizing the money of sales from AEs and non AEs, we have observed that on the working of delay of credit period for AE and non AEs as138 days and for non AEs are 146 days; the ld. has not disputed the factual matrix.
Considering the decision of Tribunal in assessee’s own case for AY 2009-10 and 2010-11 . [2016 (7) TMI 1402 - ITAT MUMBAI] and [2018 (1) TMI 240 - ITAT MUMBAI] we find merit in the submissions of the assessee that no notional interest adjustment was warranted against the assessee - Decided in favour of assessee.
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2020 (7) TMI 494
Characterization of distribution fee i.e. Royalty or not? - HELD THAT:- In assessee’s own case for AY 2011-12 on the issue held that the distribution fee paid by the assessee to its AE is not ‘Royalty’.
Comparable selection - Considering the facts that the Avance and Sonata were accepted as valid comparable in assessee’s own case in AY 2011-12 [2020 (3) TMI 781 - ITAT MUMBAI]and Trijel and Integra was held as valid comparable with channel distribution, therefore, we in principal agree and accept the submission of ld. AR of the assessee to accept these four comparable as comparable with assessee. However, we have seen that the TPO rejected the comparability of these comparable summarily, without examining their segmental data, hence we direct the AO/TPO to verify the segmental data of these four comparable for the relevant financial years as per Rule 10B(4) and recompute the TP adjustment afresh and allow appropriate relief to the assessee. The assessee is also directed to provide all necessary information and evidence to the TPO/AO. Needless to order that before passing the order, the TPO/Assessing Officer shall grant opportunity to the assessee. In the result, the grounds related to comparability of comparable are allowed in accordance with the aforesaid directions.
Short deduction of TDS - HELD THAT:- Considering the submissions of the ld. AR for the assessee the assessing officer is directed to verify the TDS details and grant appropriate relief to the assessee after verifying the details as early as possible.
Deduction of education secondary and higher education cess - admitting the additional ground of appeal - HELD THAT:- gone through the copy of income tax return furnished by the assessee and the assessment order passed by the assessing officer and the working of income tax calculated and rectified by assessing officer. Considering the facts and circumstances of the case and the submissions of ld representatives of the parties that no additional facts are required to the brought on record and the necessary facts for adjudicating the additional grounds of appeal are already available on record, we admits the additional ground of appeal. Considering the facts that the assessee has raised the additional ground for the first time before the Tribunal, therefore, we direct the assessing officer to verify the facts and pass the order afresh on this issue (claim), after considering the decision SESA GOA LIMITED, VERSUS THE JOINT COMMISSIONER OF INCOME-TAX, RANGE 1, PANAJI GOA. [2020 (3) TMI 347 - BOMBAY HIGH COURT]
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2020 (7) TMI 493
Penalty u/s 271AA and 271BA - TP adjustment - Failure to provide or maintain specific Information / Documents - relationship between the assessee and the KEPL AND alleged international transaction between them - HELD THAT:- In quantum appeals before the Tribunal in [2020 (3) TMI 413 - ITAT MUMBAI] the Tribunal held that the assessee and KEPL Singapore is not associated enterprises (AE). It was held that no arms length price adjustment could be made on the transaction between assessee and KEPL.
As the assessee is not associated enterprises of KEPTL for the year under consideration, we are of the view that when the very basis of the foundation of impugned penalties has been set aside, thus, the penalty order would also not survive, therefore we direct the assessing officer to delete the penalty under section 271AA and 271BA, levied - Decided in favour of assessee.
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2020 (7) TMI 492
Bogus purchases - Addition @3% - estimation of profit from alleged bogus purchases - HELD THAT:- As in the case of CIT vs Simith P.Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] had considered a similar issue and held that at the time of estimation of profit from alleged bogus purchases no uniform yardsticks could be adopted, but it depends upon facts of each case. The ITAT, Mumbai, in number of cases had considered an identical issue and depending upon facts of each case, directed the Ld.AO to estimate gross profit of 10% to 15% on total alleged bogus purchases.
In this case, considering the nature of business of the assessee the Ld. AO has made 100% additions, whereas the Ld.CIT(A) has scaled down addition to 3% gross profit on total alleged bogus purchase. Although, both authorities have taken different rate of profit for estimation of income from alleged bogus purchase, but no one could support said rate of gross profit with necessary evidences or any comparable cases. CIT(A) has taken a fair view and estimated 3% gross profit on alleged bogus purchases to settle dispute between the parties in respect of purchases from all parties.
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2020 (7) TMI 491
Unexplained cash deposits in Bank Account - undisclosed income - HELD THAT:- Documentary evidences brought to our notice. It is true that neither the Assessing Officer nor the first appellate authority has made any comment on the sufficient cash withdrawals made by the husband of the assessee from Syndicate Bank Account. It is equally true that there is nothing on record to suggest that these withdrawals were utilised by the assessee or her husband (during his life time) for some other purposes.
These documentary evidences need to be examined. - Matter remanded back to AO.
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2020 (7) TMI 490
Penalty u/s 271(1)(c) - concealment of income - non specification of charge - Whether no clear finding in the notice u/s 274? - whether the assessee has concealed the particulars of income with respect to such business receipts not disclosed in the income tax return? - HELD THAT:- The term concealment of particular of income has not been defined under the provisions of section 271(1)(c) or elsewhere in the Act. The meaning of the term concealed /inaccurate has been discussed in the case of Reliance Petroproducts (P) Ltd [2010 (3) TMI 80 - SUPREME COURT] wherein it was held that the term ‘inaccurate’ signifies deliberate act or omission on the part of the assessee. As such, the details/informations contained in the return of income /financial statements /audit report which are not correct according to truth, and were furnished by the assessee with the dishonest intent shall be treated as inaccurate particulars.
We find that the assessee has disclosed the business income during the assessment proceedings which was not doubted by the authorities below.
Business income was charged to tax on presumption basis under the provisions of section 44 AD of the Act. Thus it is transpired that there was no deliberate act on the part of the assessee not to disclose the business receipts in his income tax return. In holding so we draw support and guidance from the judgment in the case of ITO Vs. Bombay wala readymade stores [2014 (11) TMI 1099 - GUJARAT HIGH COURT]
Any addition/disallowances made during the quantum proceedings does not automatically justify the levy of the penalty under section 271(1)(c) - Besides the element of income added the quantum proceedings, there must be some material/circumstantial evidences leading to the reasonable conclusion that there was conscious concealment or the act of furnishing of inaccurate particulars on the part of the assessee. Accordingly, we are not convinced with the finding of the authorities below. Hence we set aside the order of the learned CIT (A) and direct the AO to delete the penalty levied by him under section 271(1)(c). Thus the appeal of the assessee is allowed.
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2020 (7) TMI 489
Classification of imported goods - GoPro HERO5 Black Action Camera - whether the imported goods namely, 'GoPro HERO5 Black' Action Camera is classifiable under CTH 8525 8020 as claimed by the appellant, or under CTH 8525 8090 as affirmed by Revenue? - benefit of N/N. 50/2017 – Cus, dated 30.06.2017 - HELD THAT:- It is an admitted fact on record that the appellant had claimed the benefit of notification dated 30.06.2017, which was purportedly denied by the authorities below on the ground that imported cameras are not capable of recording the images as per the parameters prescribed under notification dated 17.03.2012. On careful examination of both the notifications dated 17.03.2012 and 30.06.2017, it clearly reveals that the later notification was issued by superseding the former notification, wherein the character and features of the digital cameras of Tariff Item 8525 8020 were defined by way of inserting an explanation. For ascertaining the true scope and ambit of the phrase 'supersession', we may refer to the meaning assigned to it in the dictionary.
In the present case, it is an undisputed fact that the learned Commissioner (Appeals) has accepted that the cameras in question imported by the appellant have functionality of both digital still cameras as well as capable of capturing videos. Thus, the duty exemption provided under notification dated 30.06.2017 for 'digital still image video camera' should be available to the appellant.
Reference made by the learned AR for Revenue to the Circular No. 32/2007-Cus, dated 10.09.1997 is incorrect on two folds. Firstly, the said circular was issued with respect to Sl. No. 13 of Notification No. 25/2005-Cus., dated 01.03.2005 and secondly, the said circular evidently referred to the restriction on video recording as per the explanation provided within the notification defining the goods as 'digital still image video camera' - In the case in hand, the appellant had claimed the duty exemption provided under the Notification No. 50/2017-Cus., dated 30.06.2017, where under no condition was prescribed for availment of the benefit.
The law is well settled by the Hon'ble Apex Court in the case of TATA TELESERVICES LTD. VERSUS COMMISSIONER OF CUSTOMS [2005 (12) TMI 96 - SUPREME COURT] that the CBEC circular cannot impose limitation or restriction, which is not provided in the notification itself.
There are no merits in the impugned orders in classifying the disputed goods under Tariff Item 8525 8090 and denying the benefit of Notification No. 50/2017 dated 30.06.2017 - appeal allowed - decided in favor of appellant.
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2020 (7) TMI 488
Valuation of imported goods - demand on the ground that the impugned goods were imported in packaged form for retail sale attracted the provisions of Section 4A of the Act, 1944 read with the provisions of Standards of Weights and Measures Act, 1976 - HELD THAT:- It is an undisputed fact on record that the candies/chocolates of different variety are displayed by the retail outlets in the tubs and bins, wherefrom according to the choice, the buyer picks up the chocolates in loose form and mixed up with other kinds of chocolates and thereafter the chocolates so picked up by the buyer are sold without any packages, on the basis of weight only. The appellant used to circulate the price list for retail sale for its outlets, which were made of the quantity like 10 gm, 20 gm, 50 gm of mixed candies. The imported goods were packed in cartons only for transportation purpose and not otherwise. The statements of various persons referred to in the impugned order have also endorsed such means and methods adopted for sale of confectionary items from the retail outlets - Since, the notified goods in this case were not sold in packaged form or condition to the ultimate buyers, there was no statutory requirement on the part of the appellant to declare the retail sale price of loose chocolates for determination of the value as per Section 4A of the Act.
The CBEC vide Circular dated 28.02.2002 has clarified that if there is no statutory obligation under the provisions of SWM Rules to declare the retail sale price of the packages, then the provisions of Section 4A would not be applicable.
Appeal allowed - decided in favor of appellant.
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2020 (7) TMI 487
Levy of Anti-Dumping Duty - import of Ductile Iron Pipes, DI Pipes originating in or exported from China PR - initiation of a sunset review investigation for continuation of ADD - likelihood of dumping injury - HELD THAT:- The Designated Authority has recommended that continuation of Anti-Dumping Duty on import of DI pipes from the subject country namely, China PR is no longer required. The Anti-Dumping Duty on the product under consideration namely, DI pipes has been levied since 14 September, 2007 vide Customs Notification dated 14 September, 2007. The appellant is before us as the Anti-Dumping Duty has not been continued after 9 October, 2018 on the expiry of the period mentioned in the Notification dated 10 October, 2013. It is appropriate to mention that levy of Anti-Dumping Duty on any goods is primarily to protect the domestic industry from unfair trade practices adopted by the foreign exporters who resort to export of goods at highly reduced prices with an intent to dump the goods in the domestic market so as to capture the major share of domestic demand resulting in causing grave economic injury to the domestic industry. The provisions of Customs Tariff Act, 1975 as well as rules framed thereunder are in consonance with the guidelines of World Trade Organisation. These guidelines ensure that in case there is any attempt to dump goods, the domestic industry is insulated from injury which may be caused by unscrupulous exporters.
It had been established by the Designated Authority that there was dumping by the exporter which had resulted in injury to the domestic industry in the past and, therefore, they initiated detailed investigation and concluded in the year 2007 vide their Final Findings notified vide Notification dated 23 August, 2007 that there was dumping of subject goods namely, DI pipes from China PR, and accordingly, Anti-Dumping Duty on the subject goods imported from China PR was imposed by the notification in September, 2007 - It is also a matter of record that the Designated Authority considered it necessary to continue with the Anti-Dumping Duty in the first sunset review which took place in September, 2013 and accordingly the levy of Anti-Dumping Duty on subject goods was continued.
Thus, it is apparent that in case of sunset review, the authority has to only see whether the cessation of Anti-Dumping Duty on the subject goods would lead to continuation or recurrence of dumping and injury to the domestic industry.
It is obvious that the injury margin is likely to be positive in no uncertain terms if the Anti-Dumping Duty is not extended. The price undercutting would also be positive. In such a situation, withdrawal of Anti-Dumping Duty will certainly enable the manufacturers and exporters of the subject goods from China to freely dump the subject goods to the detriment of the Domestic Industry.
Non-disclosure of dumping margin to the appellant by claiming shelter of Rule 7 is not justified and violates the principles of natural justice - it is convincing that if Anti-Dumping Duty on the import of DI pipes from China PR is not continued, it may result in likelihood of dumping of subject goods i.e. DI pipes in the Domestic market.
The Anti-Dumping Duty on the subject goods namely, D.I. pipes needs to continue after the expiry of the period covered by the first sunset review - matter remanded to the Designated Authority for a limited purpose for re-determining the quantum of Anti-Dumping Duty, if so considered necessary, for the remaining period of five years - the Final Findings of the Designated Authority is set aside - appeal allowed.
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2020 (7) TMI 486
CENVAT Credit - common input services were used for manufacture of both taxable as well as exempt goods - Rule 6(3) of CCR - case of the Department in this case is that the appellant had adopted incorrect value of "P" in the formula 'M/N*P' provided under Rule 6(3A)(c)(iii) ibid inasmuch as the factor "P" denotes total Cenvat credit and not common Cenvat credit - HELD THAT:- The issue arising out of the present dispute is no more res integra, in view of the decision of this Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE & ST, RAJKOT VERSUS M/S. RELIANCE INDUSTRIES LIMITED [2019 (3) TMI 784 - CESTAT AHMEDABAD] where it was held that From the reading of Rule 6(1), it is clear that only in respect of input or input service used in exempted goods are not allowed. That means input or input service used in taxable service/dutiable goods.
Appeal allowed - decided in favor of appellant.
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