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Showing 261 to 280 of 1642 Records
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2024 (7) TMI 1382
Cancellation of GST registration of petitioner - SCN does not clearly reflect the reasons for proposing the adverse action of cancellation of the GST registration of the petitioner - Violation of principles of natural justice - HELD THAT:- The purpose of a show cause notice is to enable the noticee to respond to the allegations on the basis of which the adverse action is proposed. It is, thus, necessary that the show cause notice must clearly specify the allegations along with necessary details for eliciting a meaningful response. Bereft of any details, the noticee is left clueless as to the case, which he is required to meet. In the event the petitioner desires to contest the notice, the only response that he could give is that he has not violated the provisions of Section 16 of the CGST Act/ DGST Act. Plainly, that would be of little assistance to the respondent.
The impugned order also does not provide any reason for cancelling the petitioner’s GST registration except to say that it is in reference to the impugned SCN - It is apparent that the impugned order has been passed in violation of the principles of natural justice.
The impugned SCN and the impugned order are set aside. The petitioner’s GST registration is directed to be restored forthwith - the petition is disposed off.
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2024 (7) TMI 1381
Offence punishable u/s 276B - delay in depositing the TDS amount in the account of the Opposite Party (Complainant) ranging from 31 days to 214 days - COVID-19 Pandemic Effects - Reasonable and sufficient cause -
As decided by HC [2023 (11) TMI 447 - ORISSA HIGH COURT] present complaint is vitiated as the failure on the part of the Petitioners to comply within the provision of law as to deposit of the deducted TDS was on account of the reasonable causes for the prevalence of COVID-19 Pandemic standing on their way.
The order of sanction thus being found to have been passed without due application of mind and in a mechanical manner even putting the blame upon the Petitioners for not filing any exemption/ relaxation notifications / circulars, the same stands vitiated. The Court below in the facts and circumstances ought not to have taken cognizance of the offence u/s 279B, section 2(35) and 278(B) of the I.T. Act when even the latter two are no penal provisions and as such is bad in law and liable to be set aside.Revision is allowed - HELD THAT:- Delay condoned.
We are not inclined to interfere with the impugned judgment and order of the High Court. The Special Leave Petition is, accordingly, dismissed.
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2024 (7) TMI 1380
Assessment of trust - Charitable Activity - assessee's activities were commercial due to the receipt of fees and corporate donations - As argued activities undertaken by the respondent/assessee clearly fall within the broad principles which came to be propounded by the Supreme Court in Lok Shikshana Trust [1975 (8) TMI 1 - SUPREME COURT] - whether Tribunal has correctly come to the conclusion that the activities undertaken by the assessee would fall within the sweep of the expression ‘education’ as appearing in Section 2 (15)? - HELD THAT:- As is manifest from the record of facts appearing in that paragraph, the assessee in the concerned AY was found to have essentially undertaken educational activities spread across various subjects and streams, providing opportunities to underprivileged youth and others and essentially skilling them for the purpose of future employment. It is also stated to have undertaken various digital literacy initiatives spread across as many as ten States of the country. The instruction was imparted at either NIIT-run centers or NGO-partnered establishments. Its revenue stream was disclosed to flow from tuition fees and other educational services provided by it. The fee structure was asserted to be heavily subsidized and discounted. It is the aforesaid facts which appear to have weighed upon the AO to characterize the activities undertaken by the assessee as being charitable and falling within the meaning of the word ‘education’ and which falls within the six principal activities spoken of in Section 2 (15).
Tribunal came to the firm conclusion that the activities undertaken by the respondent/assessee were systematic and proceeded along well-defined lines based on curated courses all of which were designed to skill and educate the students who had been enrolled. On facts, the assessee was also able to establish beyond a measure of doubt that the courses run by it were informed by a fixed curriculum and attendance criteria and thus fulfilling all essential ingredients of formal education.
The Tribunal also found that the corporate receipts were mainly flowing from the CSR obligations of the concerned business houses and could not possibly be viewed or characterized as aimed at profiteering. Those corporate donations were asserted to have been utilized solely for the purposes of the educational activities which were undertaken by the assessee. It becomes pertinent to note that the veracity of the facts noticed above was not contested by the respondents before us.
Tribunal, in our considered opinion, correctly found in favour of the assessee when it held that affiliation with and recognition by a regulatory authority are not essential attributes of education under Section 2 (15). This clearly flows from the principles enunciated by the Supreme Court in both Lok Shikshana Trust and New Noble Educational Society. This, of course, was in addition to it having been duly established that the centers of the respondent/assessee had been duly approved by the NSDC, which undoubtedly is a nodal agency concerned with vocational and technical training.
We ultimately bear in mind the precept formulated by the Supreme Court in Lok Shikshana Trust [1975 (8) TMI 1 - SUPREME COURT] and where it explained Section 2 (15) as being concerned with training and developing knowledge, skill, mind and character by formal schooling. These tests, in our considered opinion, were clearly met by the assessee.
We also find merit in the Tribunal’s conclusion that the mode and manner in which education is imparted would be a concept which would have to necessarily be evaluated bearing in mind the march of technology and the myriad modes of imparting instruction which now exist and have enabled institutions to overcome barriers of distance and time. Imparting of education through a virtual mode or by the adoption of new technologies would not detract from the said activity, otherwise fulfilling the requirements of structured education. The test, as propounded by Lok Shikshana Trust, essentially requires us to evaluate whether a formal and systematic process of imparting education had been adhered to.
We thus find no merit in the challenge which stands raised to the order of the Tribunal. Considering the conclusions that we have arrived at on the principal issue of Section 2 (15), the question with respect to whether the CIT (E) was justified in invoking its powers conferred by Section 263 of the Act pales into insignificance and need not be answered. Decided in favour of the assessee.
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2024 (7) TMI 1379
Validity of Faceless assessment of income escaping assessment - Challenge to notice u/s 148 as non-compliance with Section 151A of the Act - notices issued by JAO instead of FAO - HELD THAT:- Similar issue came up for consideration before a Division Bench of Bombay High Court in Hexaware Technology Ltd.(2024 (5) TMI 302 - BOMBAY HIGH COURT] discussed the issue at length and held that notice under Section 148 after introduction of Finance Act, 2021, cannot be issued by Jurisdictional Assessing Officer.
Considering the fact that the impugned notice issued by the JAO was itself defective and without authority of law and the same was contrary to the provisions of Section 151A read with the Scheme dated 29 March, 2022 issued thereunder, the Petitioner having filed an Appeal ought not distract this Court’s attention. Consistent with the view taken in Vikram Developers [2024 (5) TMI 1453 - BOMBAY HIGH COURT] and since there is no dispute that the JAO had no jurisdiction to issue the impugned notice, the Writ Petition is accordingly allowed and the impugned notice as well as the reassessment order are hereby quashed and set aside. So also, consequential demand notices or penalty notices will also stand quashed and set aside.
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2024 (7) TMI 1378
Inadmissible Input Tax Credit (ITC) utilization from cancelled suppliers - this writ petition is confined to the supplies allegedly made by Dhiraj Kumar Sharma to the petitioner no. 1 in respect of the tax period from September 2017 to October 2017 - HELD THAT:- The petitioner no. 1, in the appeal filed therefrom, which is confined to the supplies allegedly effected by Dhiraj Kumar Sharma had disclosed and produced documents which included four inward tax supply invoices mentioned in Table – A of the order, party ledger for the period from 1st April, 2017 to 31st March, 2018, bank statements and copy of the GSTR- 2A. Admittedly, in this case the petitioner no.1’s supplier had filed returns for the relevant tax period. It is also noticed that the relevant e waybills had also been disclosed by the petitioner no.1 which, inter alia, include the name of the transporter.
Though the petitioner no. 1 had discharged its initial burden of proof, the appellate authority had, by glossing over the same without indicating the documents required to be disclosed by the petitioner no. 1, arrived at a finding that the petitioner no. 1 is not eligible for ITC. In this context, it may be noted that the finding returned by the appellate authority that the petitioner no.1 is not eligible for ITC in absence of transport and other documents, appears to be verbatim reproduction of the observations made by the adjudicating authority/ proper officer, in the order dated 13th April 2022.
The aforesaid order suffers from non-application of mind and is perverse. The appellate authority ought to have indicated and specified as to what other documents the petitioner no.1 was required to be disclosed to establish the genuinity of the transaction. Although, in page 198 of instant writ petition it appears that the appellate authority had recorded that the petitioner no. 1 could not establish that the goods had been moved and had failed to produce and substantiate the same by disclosure of documents like loading expenses, transportation expenses, unloading expenses and other vouchers.
The matter is remanded back to the appellate authority. The appellate authority in the facts of the case is directed to reconsider the matter with respect to the issue of movement of goods - Petition allowed by way of remand.
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2024 (7) TMI 1377
TDS u/s 195 - default u/s. 201(1)/201(1)(A) - assessee at the time of payment of consideration for purchase of shares deducted tax at source@10% plus applicable surcharge and education cess on total consideration paid - action of the TDS Officer in re-characterizing the nature of transaction from ‘sale of shares’ to ‘sale of assets’ - HELD THAT:- As an undisputed fact that the assessee has deducted tax at source on the payments made for purchase of shares from the non-resident sellers.
A perusal of order passed u/s. 201(1)/201(1A) of the Act shows that the AO has passed an order purely on surmises and conjectures changing the nature of transaction of ‘sale of shares’ to ‘sale of assets’. AO in proceedings u/s. 201 of the Act has gone beyond his jurisdiction in re- characterizing nature of transaction. Further it is an undisputed fact that the assessee has deducted tax at source @10% plus surcharge on consideration paid for purchase of shares and has deposited the TDS to the Government exchequer. Thus, in light of undisputed facts the assessee cannot be held as “assessee in default”. We find no infirmity in the impugned order; hence, the same is upheld. Decided against revenue.
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2024 (7) TMI 1376
Addition u/s 14A - Addition of interest expenditure - Admissibility of deduction of expenditure incurred in earning exempt income - HELD THAT:- CIT(A) as well the assessing authority has not brought any material suggesting that the interest free funds were diverted for earning of tax free income. Under these facts, the disallowance made in respect of interest expenditure is not justified. Moreover, the AO and Ld. CIT(A) did not advert to the submissions of the assessee that bank charges and bank guarantee charges do not partake character of interest and had been wrongly included as interest while making disallowance u/s 14A of the Act.
We therefore, respectfully following the judgement of Godrej Boyce Mfg. Company Ltd [2017 (5) TMI 403 - SUPREME COURT] hereby delete the impugned disallowance made u/s 14A of the Act in respect of interest expenditure. Thus, grounds of the assessee’s appeal are allowed.
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2024 (7) TMI 1375
CIT(A) requesting for exemption from depositing of advance tax as is contemplated u/s 249(4)(b) - non appearance/non compliance before the AO by the assessee during reassessment proceedings - HELD THAT:- Sufficient reasons for non appearance/non compliance before the AO by the assessee during reassessment proceedings , are also demonstrated by the assessee. Now, we set aside the appellate order passed by CIT(A) and direct the CIT(A) to make necessary preliminary enquiry as to the assessee’s claim to have filed additional evidences before ld. CIT(A) by way of Land Records 7/12 and 8A, evidence of agricultural income etc., and if that be found to be prima-facie true, then CIT(A) shall admit the appeal as good and reasonable cause as are stipulated under proviso to Section 249(4)(b) is shown by the assessee to seek exemption from deposit of advance tax, before filing appeal with ld. CIT(A).
CIT(A) shall give finding in writing on the claim of the assessee w.r.t. admission of appeal keeping in view provisions of Section 249(4)(b) read with proviso to Section 249(4)(b), by passing a reasoned and speaking order on this issue.
If the ld. CIT(A) decides to admit the appeal of the assessee keeping in view provisions of Section 249(4)(b) read with proviso, then the CIT(A) shall proceed to adjudicate the appeal of the assessee, on merits in accordance with law, by passing a speaking and reasoned order, keeping in view provisions of Section 250(6) - CIT(A) shall admit the additional evidences filed by the assessee, while adjudicating the appeal of the assessee. As per section 250(6), CIT(A) has to state the points for determination, decision thereof and reasoning thereof. Appeal filed by the assessee is allowed for statistical purposes.
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2024 (7) TMI 1374
Turnover as provided u/s 145A - Determination of turnover declared by the assessee whether it should be inclusive of excise duty or not? - Taxability of income at a higher tax slab of 30% despite turnover not exceeding INR 250 Crores. - whether such adjustment can be raised by the CPC in the intimation while processing the return of income u/s 143(1) of the Act so as to find the rate of tax in pursuance to First schedule of Finance (No. 2) Act 2019 - HELD THAT:- The purpose of including the excise duty in the amount of the turnover under the provisions of section 145A of the Act was different as evident from the object for which it was brought under the statute which is reproduced in the preceding paragraph. Thus, we are of the opinion that the meaning of the turnover as provided under section 145A of the Act cannot be adopted while determining the rate of tax in pursuance to First schedule of Finance (No. 2) Act 2019 based on turnover. However, we keep this issue open and are not inclined to adjudicate at this juncture whether to include or exclude the amount of excise duty from the amount of turnover on the issue on hand.
Similarly, the ICAI does not mandate to include the amount of excise duty in the value of sales which has already been observed in this preceding paragraph.
Likewise, it is also important to note that the assessee is collecting the excise duty from the customers in the capacity of an agent only and does not give any rise to the income to the assessee. The judgement in the case of CIT vs. Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME COURT] has directed to exclude the excise duty from the amount of turnover. However, the judgment was in the context of deduction under section 80HHC of the Act.
Excise duty is leviable on manufacturing of the goods and the rate of the same varies based on different goods being manufactured. There can be a situation where a company manufactures goods subject to excise duty at the rate of 5% whereas another company manufacturing other goods and excise duty is applicable on the same at the rate of 25% of the sales. Thus, in a situation where both the companies having exact amount of sales but because of different rate of excise duty their turnover can be of different amount and consequentially both the companies may fall under different tax bracket i.e. 25% or 30% as the case may be which does not appear to be in consonance with the intent of Article 14 of Constitution of India.
Based on the above discussion, it is transpired that the issue whether to include or exclude the excise from the amount of turnover for determining the rate of tax in pursuance to First schedule of Finance (No. 2) Act 2019 is a debatable issue which cannot be resolved in the intimation processed u/s 143(1) of the Act.
Whether to include excise duty as a part of the turnover while applying the tax rate is a debatable issue and the same cannot be resolved while processing the return of income under section 143(1)? - CIT-A while adjudicating the issue discussed above has not made any reference to the turnover for the financial year 2016-17 which was required to be considered for working out the applicable tax rate. As such the Ld. CIT(A) has adopted the turnover of the assessee for the year under consideration for working out the tax rate applicable to the assessee.
We are of considered opinion that the adjustment made by the revenue while processing the return of income under section 143(1) of the Act in the given facts and circumstances is not sustainable being an issue of debatable nature. Hence, we set aside the finding of the Ld. CIT(A) and direct the AO to delete the addition made by him. Thus, the ground of appeal of the assessee is hereby allowed.
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2024 (7) TMI 1373
Addition u/s 68 - assessee could not furnish supporting documents to prove the sources that recovery has been made from debtors besides not substantiating the cash withdrawals from bank with supporting evidence - HELD THAT:- The assessment order as well as impugned order that against the notice issued by the AO assessee furnished the details of cash deposits in various bank accounts, recovery from debtors, cash book, etc. and no further notice has been issued by the AO seeking further details.
Since the AR prayed to afford an opportunity to furnish complete details as may be required by the AO to prosecute his case, we deem it proper in the interest of justice to remand the matter back to the file of the AO for his consideration afresh. Assessee is at liberty to file evidence in support of his claim and the AO shall conduct the assessment proceedings de novo. Thus, grounds raised by the assessee are allowed for statistical purposes.
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2024 (7) TMI 1372
TP Adjustment - Corporate Guarantee commission - HELD THAT:- Coordinate Bench of this Tribunal in assessee’s own case for the assessment year 2018-19 [2023 (4) TMI 1254 - ITAT HYDERABAD] considered this issue in extenso and held that ALP on account of corporate guarantee at the 0.50% on the amount guaranteed is proper commission.
We direct AO/TPO to adopt the same at 0.50% on the guaranteed amount. Relevant grounds are answered accordingly.
Interest on receivables - We are of the considered opinion that when the assessee is extending the credit period between 60 days and 240 days to the non-AEs, and basing on this the learned DRP in the assessment year 2018-19 took a view that the credit period as agreed between the parties shall be respected and followed and such a finding of the learned DRP has become final without the Revenue challenging the same, the credit period which is extended to the non-AEs by the assessee shall be extended to the AEs also. On this reasoning we do not find any illegality or irregularity in the findings returned by the CIT(A) that the interest shall be record beyond the credit period as agreed between the parties.
Rate of interest - We are of the considered opinion that the ends of justice would be met by accepting the interest rate on similar foreign currency receivables/advances as LIBOR+200 points. We direct the AO / TPO to adopt the same. Grounds are partly allowed accordingly.
Disallowance of weighted deduction claimed u/s 35(2AB) - HELD THAT:- The issue has clearly been covered by the decision of Cadila healthcare Ltd [2013 (3) TMI 539 - GUJARAT HIGH COURT] referred to and followed in the case of M/s Sun Pharmaceuticals Industries Limited [2020 (3) TMI 345 - GUJARAT HIGH COURT] A coordinate Bench of this Tribunal in assessee’s own case for the assessment year 2018-19 having noticed the judicial review on this aspect, including the argument advanced in that case, and basing on CIT vs. Vegetable Products Ltd [1973 (1) TMI 1 - SUPREME COURT] reached a conclusion that when once the clinical trial expenses incurred outside the approved R&D facilities, were approved by the prescribed authority the assessee is entitled to claim deduction u/s 35(2AB) of the Act. We hold the issue in favour of the assessee and allow weighted deduction in respect of the expenses incurred on clinical trials.
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2024 (7) TMI 1371
Reopening of assessment - reason to believe - Notice after the expiry of period of four years - Disallowance u/s 14A - transaction of purchase of shares of HHML questioned - HELD THAT:- The share agreement and reconciliation of investments capturing quantity and value of opening investment, investment purchased and sold during the year were provided to the AO during assessment and infact AO made a incorrect observation while disposing the objections to the reopening that agreement was not provided.
There is also substance in the contention of ld. Sr. Counsel that when AO was examining disallowances for purpose of Section 14A of the Act, certainly AO had material before him to also examine the prices of acquisition of investments and any hidden cost or advantages.
We further find that the Assistant Director of Income-tax (Investigations) had raised queries on the basis of ‘reliable sources’ about 26% stake acquired by the assessee @ Rs. 739/- per share and this was replied by the assessee by letter dated 24.03.2011 informing that this matter is already under inquiry by International Taxation Division of the Income-tax Department by issuance of a notice u/s 133(6) of the Act and, therefore, request was made that to avoid multiplicity of proceedings, the proceedings be dropped by Assistant Director of Income-tax (Inv.), Unit-5(3), New Delhi.
The instances of disclosures to various government and statutory authorities and tax authorities sufficiently establish that the assessee was not acting in any surreptitious manner in regard to the share purchase transaction. Rather, as it appears to be a case where an Indian enterprise was not selling its stake to a foreign enterprise, but, purchasing the stake of a foreign enterprise of the stature of Honda. Which certainly must be looked upon as a sign of growing and strengthening of India as a emerging economy, for which, Hero group must have been eager to take credit and thus the information was not kept close to heart but shared at large. So much so that based on ‘media reports’ only a notice dated 09/03/2011 was issued to the assessee by Director of Income Tax (International Taxation)-1, New Delhi, to examine the purchase of 26% stake in Hero Honda Motors Ltd. by Hero Investment Pvt. Ltd. from Honda Moto Company Ltd., Japan, and information u/s 133(6).
As we conclude that there was no failure on the part of the assessee to furnish full and true material facts at the time of assessment and the content and information in the return of income, annual report, books of accounts, specific queries raised, and replies filed etc., as discussed in detail above, were quite supposedly examined by AO while completing the assessment u/s 143(3) of the Act, thus making the same set of information as basis of recording of reasons u/s 148 of the Act, is merely change of opinion. Thus by merely mentioning in the reasons recorded that certain fresh information was received from the office of Pr. CIT regarding alleged benefit received by the appellant in transaction of purchase of shares of HHML from Honda, which was not disclosed by the appellant during the original assessment proceedings, the AO cannot come out of the rigour of law, which mandates that re-opening can only be on the basis of fresh tangible material.
Whether the impugned discount on the transaction can be treated as benefit or perquisite of the business? - As considering the agreements and MOU executed between the Honda and Hero groups of companies, the acquisition of shares by Honda is only strategic investment to consolidate the holding in JV. Thus, we find substance in the submissions that provisions of section 28(iv) per se does not apply to the disputed transaction, as the assessee has held such shares in the capacity of promoter shareholder and not for the purpose of trading and has been consistently showing it as long term capital investment in the books of accounts and balance sheet. It is established that assessee has held the shares of HHML since inception for more than 25 years as long-term investments and not a single share has been sold by the assessee during those 25 years.
The Circular No.6/2016 dated 29.02.2016, expressly lays down that where the taxpayer treats shares as investment in the books of accounts, then, profit on sale of listed shares held for more than twelve months should be taxed as long-term capital gains. Thus, any benefit, if there is any, may fall within capital field.
Then, when we consider the order dated 29.01.2014 of the CIT(A), Ludhiana in appeal against original assessment order dated 29.01.2014 available at pages 204-229 of the paper book. We find that the CIT(A) has rejected AO’s conclusion of assessment u/s 143(3) that assessee was earning business income from sale and purchase of shares, etc., and CIT(A) concluded that shares were held as investments giving rise to capital gains only.
Infact by reopening vide notice u/s 148 AO has tried to undo the findings of CIT(A) order dated 29.1.2014 where in it was categorically held that income from sale and purchase of shares was to be treated as capital gains and not business income. Thus when there was no business income from the selling shares held as investments, certainly provision of section 28(iv) of the Act could not have been invoked. Thus bringing the difference in the price of acquisition of shares with market price as benefit arising from business u/s 28(4) of the Act was in a way again holding that sale and purchase of shares gives rise to business income - we are of firm view that AO had fallen in error to invoke provision of section 28(iv) of the Act.
Decided in favour of the assessee.
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2024 (7) TMI 1370
Disallowance of interest component u/s 14A r.w.r. 8D - HELD THAT:- As going through the contents of order passed by ITAT in the assessee’s own case for assessment year 2010-11 we observe that the Tribunal has categorically given relief to the assessee on this issue on the ground that the assessee’s own funds are far in excess of the investments made in funds yielding exempt income. Accordingly, so far as disallowance of interest u/s 14A of the Act is concerned, no disallowance is called for u/s 14A of the Act. Assessee appeal allowed.
Disallowance of ESOP expenses - allowable business expenses or not? - CIT(A) deleted addition - HELD THAT:- The law on the subject, is unanimous as various tribunals by following the decision of Biocon Ltd. [2020 (11) TMI 779 - KARNATAKA HIGH COURT] have decided the issue in favour of the assessee.
Secondly, we observe that the ESOP scheme under consideration was part of the Annual Report of the assessee and further the specific details of ESOP benefit granted to its employees had been duly disclosed to the assessing officer during the course of assessment proceedings, being the difference between the market price of shares at the time of grant of option to these employees and the market price of such shares as on the date of exercise by employees of the assessee company. Therefore, even from this perspective, the expenses so claim were not contingent the nature, since the assessee had claimed the ESOP expenses at the time of actual exercise of option by its employees, during the year under consideration.
Sssessee had reflected such ESOP expenses as “perquisites” in the hands of its employees and TDS at appropriate rate had also been deducted by the assessee company at the time of grant of ESOP benefits to its employees.
ESOP expenses are allowable in the hands of assessees under Section 37 of the Act and looking into the facts of the assessee’s case, as highlighted above, we are of the considered view that Ld. CIT(Appeals) has not erred in facts and in law in deciding this issue in favour of the assessee.
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2024 (7) TMI 1369
Loss in respect of embezzlement of stock by an employee - loss of jewellery/ stock - HELD THAT:- The assessee has not only been able to substantiate its claim, but has also filed all the relevant evidences to prove that there was an actual embezzlement. All these explanation and material on record proves beyond doubt the loss of jewellery/ stock claimed by the assessee and we reject the finding and the reasoning given by the authorities below. Accordingly, we hold that the loss claimed by the assessee during the year on account of embezzlement of stock is allowed and disallowance made by the AO is deleted. Accordingly, the appeal of the assessee is allowed.
Estimation of income - Bogus purchases - report based on information on portal of Maharashtra VAT department about few dealers providing bogus bills, deduced that the assessee has taken accommodation entries - HELD THAT:- As in case Ashwin Purshotam Bajaj [2023 (8) TMI 770 - BOMBAY HIGH COURT] held that section 69 is not applicable to such bogus purchases and only profit has to be added and their Lordships have also held that, once the sales have not been doubted against the said purchases and there is no dispute regarding the quantitative details of stock as per books then the ld. A.O. cannot add the entire purchase and only GP rate is to be applied.
Similar view has also been taken in the case Rishabhdev Technocable Ltd. [2020 (2) TMI 662 - BOMBAY HIGH COURT] Moreover, we find that in case of the assessee for A.Y. 2007-08, 2008-09 and 2009-10, this Tribunal had applied GP rate of 3% over and above the GP rate declared by the assessee. Accordingly, in the facts and circumstances of the case, the gross profit of 3% is applied over and above the GP rate declared by the assessee on the bogus purchase. Accordingly, the assessee gets part relief.
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2024 (7) TMI 1368
Validity of assessment order without quoting DIN - HELD THAT:- As the assessment order does not contain the DIN but as evident from the remand report, which submitted by AO to CIT (A), DIN was duly generated and intimated to the assessee vide letter dated 28.12.2019 and duly been delivered to the registered email of the assessee. Hon’ble Supreme Court of India in the case of CIT V/s Brandix Maurititus Holdings Ltd. [2024 (1) TMI 276 - SC ORDER] has granted stay on this issue, therefore the argument of the assessee regarding the validity of assessment order, without mentioning of DIN in the body of assessment, though the same was duly generated and separately intimated to the assessee, is not found to be acceptable and hence the same is rejected.
Approval of draft assessment order u/s 153D - We find that the fact of giving approval is duly mentioned in the body of assessment order itself, therefore there is nothing on record to presume that the approval was given in mechanical manner. Regarding non generating and mentioning the DIN on the approval granted by ACIT we have given the elaborated finding on the issue of DIN in para above and the same is mutatis mutandis applied here also.
The other arguments raised by the assessee is regarding satisfaction note being not proper, assessment based on surmises conjecture and cross examination etc. and also the principal of natural justice, are interlink & interconnected to the addition made by AO, which is challenged in ground No. 2 of appeal, therefore the same are being dealt with while adjudicating the ground No. 2 of the appeal and for the sake of brevity the same are not being adjudicating here.
Unaccounted money by the assessee on sales of flats at Royal Imperia Apartment - material placed on record, it is apparent that during the course of search at Shri Upendra Kumar Soni a document was found & seized - HELD THAT:- Addition so made the AO relied on the document found from the possession of Shri Upendra Kumar Soni and also on some extracted statement, though in such statement he nowhere admitted to pass on/receiving any cash amount by the appellant.
We found that there is a noting of cash over the seized from the possession of Shri Upendra Kumar Soni and to this effect the AO neither examined to Shri Upendra Kumar Soni nor provided his cross examination to the assessee. CIT (A), directed to Ld. A.O. to provide the cross examination of Shri Upendra Kumar Soni to the assessee, which is basic principle of natural justice and it is not a mere formality.
AO has not made any effective efforts to enforce the attendance of Shri Upendra Kumar Soni by issuing of summons u/s 131 of the Act. It was incumbent on the AO to enforce the attendance of shri Upendra Kumar Soni and to record his statement on the disputed issues. Therefore, without confrontation of fact of receiving of on money by the appellant from Shri Upendra Kumar Soni and without allowing the cross examination, the addition made by AO in absence of corroborative evidence is not sustainable in the eyes of law.
The Hon’ble Supreme Court in the case of Andaman Timber Industries vs. CCE [2015 (10) TMI 442 - SUPREME COURT] while dealing with the issue of violation of principles of natural justice for not providing the opportunity of cross examination of the witnesses whose statements were relied on by the AO has held if the testimony of the two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the show-cause notice.
When person has not stated anything about the assessee in his statement recorded u/s 132(4) of the Act during search operation which has a evidentiary value in the eyes of law then any further statement recorded u/s 131 of the Act that too after Hon’ble ITSC order, it shall not be sufficient to make addition in the assessee’s case. We hold that the Id. CIT(A) has erred in confirming the addition.
Thus we set aside the order passed by CIT(A)-2, and direct the AO to delete the entire addition. Assessee appeal allowed.
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2024 (7) TMI 1367
Challenge to final assessment orders - Jurisdiction of the Assistant Commissioner in passing final assessment orders - no opportunity of hearing was given to the petitioner - non-compliance with the principles of natural justice - HELD THAT:- This Court finds that the petitioner was provisionally assessed under PD Bond No.77/2023 dated 02.06.2023 for an amount of Rs. 30,79,13,411/- executed by the exporter. As per the contract reference dated 18.05.2023, the overseas buyer was M/s. Caravel Metallurgical Limited, Hong Kong. The price of Iron Ore Calibrated Lumps was USD 82.00 per DMKT CFR FO One Main Port North China based on 56.50% Fe fraction prorate. As per the Fixture Note dated 26.05.2023, the Freight rate was USD 10.70. On the relevant date the exchange rate of USD 1.00 was Rs.81.70. The aforesaid Shipping Bill was assessed provisionally under Section 18 of the Customs Act, 1962 under cover of P.D. Bond No.77/2023 dated 02.06.2023, for an amount of Rs.30,79,13,411/- executed by the exporter, for want of Final Invoice, Test analysis Reports, e-BRC etc.
Paragraph 5.0-Test Reports of the impugned assessment order dated 24.04.2024 under Annexure-1 shows that CRCL Re-Test Report at Sl. No.4 in respect of CRCL, Pusa, New Delhi has been accepted and other four test reports in respect of SGS India Pvt. Ltd., SGS India Pvt. Ltd., CRCL, Visakhapatnam and CCIC have been rejected without assigning any reasons. Therefore, it is contended that acceptance and rejection of such reports, without assigning any reason, cannot be sustained in the eye of law.
The impugned assessment orders dated 24.04.2024 and 18.05.2024 passed by opposite party no. 1-Assistant Commissioner, Gopalpur Customs Division, Ganjam under Annexures-1 & 2 respectively are quashed - matter is remitted to the authority concerned with a direction to hear it afresh and pass appropriate order in accordance with law.
Petition allowed by way of remand.
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2024 (7) TMI 1366
Rejection of the declared F.O.B. value along with imposition of penalty under Section 114(iii) and 114AA of the Customs Act, 1962 - manner of conducting the market enquiry on the basis of the wholesale market of Delhi, whereas gooda are purchased from the impugned goods from Ludhiana - HELD THAT:- From the records of the case, it is apparent that the market enquiry was conducted in the presence of the Shri Sunil Bhandari, the Authorised Representative of the appellant company alongwith three independent sellers. The re-calculated F.O.B. value was duly explained to Shri Sunil Bhandari and he, categorically accepted the same. Moreover, as pointed out by the learned Authorised Representative for the respondent, the Authorised Representative of the appellant company in his statement recorded statement under Section 108 of the Act admitted and agreed to the value arrived at during the market enquiry.
Thus, when the exporter himself has participated in the market enquiry, along with independent sellers and has agreed to the value arrived in his presence, nothing survives to challenge further.
The reliance placed by the learned Authorised Representative on the decision of the Tribunal in CC (IMPORT) , ICD, TKD, NEW DELHI VERSUS M/S SODAGAR KNITWEAR [2018 (5) TMI 686 - CESTAT NEW DELHI] on the principle that the admitted facts need not be proved, rejected the challenge to the calculation of the assessable value as the Manager of the appellant admitted in his statement that he agreed with the manner of calculating the assessable value.
Since there was misdeclaration as to the quantity and the value of the goods, the goods were rightly held to be liable for confiscation under sub-sections (i),(ia) and (ja) of Section 113 of the Act. Consequently, the imposition of penalty under Section 114 of the Act is upheld as there was overvaluation of goods of around 2.8 times - the exporter has intentionally mis-declared the value and quantity of the goods to be exported and for that they submitted false documents or information so as to avail undue export benefits, i.e. Drawback and ROSCTIL on the goods. Therefore, the imposition of penalty under Section 114AA of the Act is justified and is affirmed.
There are no reason to interfere with the impugned order and hence the same is affirmed - appeal dismissed.
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2024 (7) TMI 1365
Confiscation of export goods - imposition of redemption fine and penalty - intentional mis-declaration on export goods with intent to avail higher rate of drawback, or not - HELD THAT:- Only few goods were found to be mismatched with the invoice and packing list. It is further found that the Appellant had given cogent explanation based on the statement and clarification of the shipper, via letter, clarifying that due to a large variety of goods being packed, the error occurred at the time of preparing the invoice, resulting in some mismatch which is not deliberate. Thus, there is no case of any deliberate mis-declaration on the part of the Appellant (exporter) who had filed the Bill of Entry declaring the goods under export as per the invoice and packing list. Accordingly, the allegation of mis-classification & mis-declaration on the part of the Appellant is set aside.
Since there is no willful mis-classification or mis-declaration on the part of the Appellant, the order for confiscation of the goods and imposition of redemption fine is not sustainable in law.
The confiscation of the export goods cannot sustain and it is hereby set aside. Penalty imposed on the Appellant is unwarranted - the impugned order is set aside - Appeal allowed.
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2024 (7) TMI 1364
Seeking permission to withdraw application - Application on behalf of the substituted LRs of Defenant No. 3, to file a Written Statement - absolute new defence is sought to be taken by filing a Written Statement by the Defendants who have stepped into the shoes of the deceased Defendant - HELD THAT:- The application is permitted to be withdrawn with the liberty as prayed for.
Seeking dismissal of the Suit as infructuous - Section 248 read with Section 250 of the Companies Act, 2013 and Order XXII Rule 8 CPC - HELD THAT:- At present, the Company has been made active to enable the filing of annual returns - the conditions imposed by the NCLAT stand complied with. At this stage, it cannot be said that the Company is dead and the Suit stand abated - application is without merit and is hereby dismissed.
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2024 (7) TMI 1363
De-sealing and handing over of the physical, vacant and peaceful possession of the property - Rules 6 & 9 of the Companies (Court) Rules, 1959 - removal of the security guards deputed by the Official Liquidator from the property - HELD THAT:- The manner in which the sale agreement dated 16.04.2013 was executed, towards the transfer of shareholding of SJSPL, as also the pattern of payments pursuant to the same, which events took place prior to the winding up petition being entertained by this Court, raise an inference that such disposition had been done in the ordinary course of business. The transfer of shareholding was a purely commercial decision taken in the ordinary course of business and was obviously based on certain conditions prevailing in the real estate market. The management of SJSPL pursued its remedies against the respondent company in good faith, in the process laying claim over the subject property subsequent to the adverse action taken by the Noida Authority.
Since it is evident that the right to the shareholding of the applicant company/SJSPL did not fructify in favour of the respondent/ company (in liquidation), it is difficult to discern that there has been any lack of bonafides or diligence on the part of the applicant/SJSPL and for that matter, on the part of the Ex-directors of the company (in liquidation). It is also difficult to discern any element of collusiveness or conspiracy between the two parties, soon before or after commencement of the winding up petition vide order dated 23.02.2016. In such a scenario, there could be no two opinions but to hold that the subject property cannot be made available to the Official Liquidator for the purposes of the winding up proceedings.
The benefit of vesting the subject property in favour of the company (in liquidation) so as to enhance its assets cannot be sustained. Lastly, merely because some schemes for revival of the company (in liquidation) have been proposed by the stakeholders and are pending for consideration before this Court, the same would not warrant vesting the subject property in favour of the company (in liquidation), particularly when, apart for bhumipujan at the site, no construction work ever commenced at the subject property.
The instant application moved by the applicant-SJSPL is hereby allowed and the Official Liquidator is directed to de-seal the subject property viz. Plot No.1, Sector 154, Noida- 201301 and hand over its peaceful and vacant possession to the applicant-company.
Application allowed.
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