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Showing 261 to 280 of 1564 Records
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2024 (8) TMI 1304
Validity of transfer order u/s 127 - petitioner case was transferred from CIT Mumbai to be centralized with “Central Circle – 20, Range-5, PCIT (Central) – 2, New Delhi” - breach of the principles of natural justice, in as much as no hearing was granted to the petitioner.
HELD THAT:- In the facts of the present case, it cannot be said that there was no material which would lay down a foundation for the respondents to exercise powers u/s 127. Moreover, substantive material justifying the transfer was disclosed to the petitioner in the show cause notice dated 19 March 2021 issued to the petitioner. The receipt of such show cause notice is not denied by the petitioner.
The search/survey on such related entities/parties and the pre- search and post-search investigations as undertaken by the department revealed that the petitioner, who is an Indian citizen but based in UAE, Dubai, had multiple financial interests in India and abroad. Such material also revealed the petitioner’s involvement in evasion of taxes, abetment and facilitation of the evasion of taxes by various other individuals and companies and that the petitioner had many transactions with persons whose names are set out in the show cause notice. The cases of such related parties/persons were covered separately under Section 132 and their cases were also centralized in Central Circle, Delhi and it is for such reason, the petitioner’s case was proposed to be centralized with Delhi charge for coordinated investigation. It is in such context and reasons the petitioner was called upon to reply to the show cause notice. As noted above, the petitioner responded to the show cause notice by his letter dated 01 April 2021, however, except for a vague denial and some health ground, the petitioner appears to have not made out any case against transfer of the said proceedings.
It is most significant that on such show cause notice and even assuming that the reply of the petitioner was to be taken into consideration, an order on the show cause notice transferring the petitioner’s case to Delhi Circle was passed on 14 June 2021 and what is further noteworthy is as to what transpired after the transfer of the petitioner’s case from Mumbai Authority to the Delhi Circle.
Throughout the flow of all these events after the transfer of jurisdiction under Section 127, the petitioner did not think it necessary to challenge the order dated 14 June 2021. These events being accepted by the petitioner gives an impression of the petitioner having acquiesced with the order of transfer, as the petitioner, after a period of more than one year after the impugned order being passed has moved this petition on 05 June 2022.
The argument that the petitioner was unaware of the transfer proceedings does not inspire confidence since the very show cause u/s 127 had indeed been received and was also responded to. Therefore, even while the impugned order erroneously states that the petitioner had not replied to the show cause notice, in our opinion, the error of the Revenue does not turn the needle in the petitioner’s favour.
Thus, the impugned transfer order cannot be faulted on the ground that it is in breach of the principles of natural justice for several reasons. In such context the petitioner’s contention that the impugned order furnishes no reasons or has insufficient reasons, or it furnishes incorrect reasons, in a decision being taken by the respondents to transfer the proceedings from Mumbai to the Delhi jurisdiction cannot be accepted on the face of the impugned order. This more pertinently when the petitioner has admitted that the petitioner had transactions with the persons whose cases are already centralized with the Delhi Authority. For such reason the respondents found it necessary, appropriate and in the eminent interest of the revenue that the petitioner’s case is considered by the Central authorities at Delhi, who were seisin of the investigation, materials from the search and seizure operations, carried out not only in respect of the petitioner’s premises, but also the premises of the related parties.
As the impugned order transferring the proceedings in the petitioner’s case from the Mumbai to Delhi Authority was passed on 14 June 2021 and as noted above, much water has flown under the bridge, namely after such order was passed, the petitioner was issued notices under Sections 153A, 143 (2), 142 (1) and 142 (2A) of the Act, as also an order of penalty under Section 270 of the Act was passed. These proceedings cannot be discarded and overlooked as these are substantial events which have transpired after passing of the impugned order dated 14 June 2021, till the filing of the petition. Thus, post transfer of the petitioners case to the Delhi authorities, it is implicit in the receipt of such notices and the several proceedings initiated against the petitioner under such notices, including an order passed against the petitioner of imposing penalty, that the petitioner has certainly acquiesced in the order dated 14 June 2021 passed under Section 127 of the Act, which was already implemented and acted upon.
WP dismissed. No case for interference in exercise of our jurisdiction under Article 226 of the Constitution of India is made out by the petitioner, in assailing the impugned order passed u/s 127.
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2024 (8) TMI 1303
Reopening of assessment - Gross Profit (GP) rate determination on unrecorded transactions - HELD THAT:- The petitioner had disclosed all his undisclosed sale transactions of both years, but the Assessing Authority has assessed the gross profit @ 8%, thus, there was no failure on the part of the petitioner which can give reasons to believe to the AO to reopen the assessment, hence, relying on a judgment of Kelvinator of India [2010 (1) TMI 11 - SUPREME COURT] that Section 147 would give arbitrary power to the AO to reopen the assessment on the basis of mere change of opinion which cannot be per se reasons to reopen. A similar view has been taken in the case of CEAT Ltd. [2023 (1) TMI 73 - SC ORDER] and well as in Financial Software & Systems [2021 (9) TMI 200 - MADRAS HIGH COURT]
Reassessment proceedings set aside. Decided in favour of assessee.
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2024 (8) TMI 1302
Addition u/s 68 - share capital/premium as unexplained cash credit - assessee has failed to prove the identity, creditworthiness of the subscribers and genuineness of the transaction - ITAT confirmed deletion of addition - HELD THAT:- The share subscriber company was a holding company of the assessee company and both the companies were having common directors and that the share subscribing/holding company was interested in the business of the assessee. The nature of business activity was examined by the tribunal and noted that the assessee company had completed multiple pieces of land in the State of UP for developing a project in phases.
The estimated cost of the project at the relevant point of time was Rs.300 crores. The assessee company had registered its project before the Real Estate Development Authority, U.P. The tribunal noted that the funds of the investing company and its creditworthiness has been duly considered and discussed by the CIT[A] in its order dated 22.7.2020.
The entire share subscription amount was received by the tribunal from its holding company, i.e., IBIPL which in turn is promoted by Infinity Infotech Parks Limited and provided funds for execution of the project either by own or through subsidiaries.
Tribunal also took note that the CIT[A] called for a remand report from assessing officer in respect of various details and evidence was submitted by the assessee and thereafter after considering the remand report the CIT[A] passed the order.
Tribunal also took note of the decisions of this Court in the case of Anmol Stainless (P) Ltd. [2022 (2) TMI 649 - CALCUTTA HIGH COURT] and ultimately dismissed the appeal. No substantial question of law arises.
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2024 (8) TMI 1301
Nature of land sold - capital asset or agricultural land - Whether land transferred by the assessee, against which exemption u/s 54B as been claimed, was an “Agricultural land” not failing within the ambit of “capital asset” as defined u/s 2(14)? - HELD THAT:- As it appears that the Tribunal has not considered the nature of the land situated at Motera as to whether the same would be agricultural land as per the provision of section 2(14) of the Act or not.
In such facts, we deem it fit to remand the matter of the appellant to the Tribunal to decide only the issue qua the nature of the land situated at Motera as to whether such land is an agricultural land as per the provision of section 2(14) of the Act or not?.
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2024 (8) TMI 1300
Two separate assessment orders on best judgment against assessee husband and wife - non-receipt of notices issued by the Income Tax Department - HELD THAT:- It follows that the respective petitioner disclosed the entire income, including the entire alleged agricultural income. The reason for issuance of the assessment orders is the failure of the respective petitioner to submit documents to substantiate that the income for which exemption was claimed was indeed agricultural income.
Petitioner has placed on record an additional typed set in each writ petition and such additional typed set contains alleged purchase bills with regard to alleged supplies by the respective petitioner. The said additional typed set also contains bank account statements to corroborate alleged receipts against the purchase bills. On account of non submission, none of these documents could be considered by the assessing officer.
Although we are not wholly convinced with the explanation regarding non-receipt of notices issued by the Income Tax Department, the fact remains that the entire alleged agricultural income of the respective petitioner was added to the returned income to arrive at the respective petitioner's liability.
This was done without considering the genuineness or validity of documents produced now by the respective petitioner to substantiate that said income is agricultural. If such documents are genuine and valid, there would be miscarriage of justice. Solely for the purpose of providing an opportunity to the respective petitioner to place those documents before the assessing officer for consideration, inclined to interfere with the orders impugned herein. In the facts and circumstances, the respective petitioner should be put on terms so as to ensure that such laxity is penalised.
Respective assessment order and the penalty order under Sections 270A and 271AAC(1) are quashed. Since the respective petitioner was also directed to pay a penalty for non submission of responses to the notices u/s 142(1) the said penalty shall be paid as a precondition for fresh assessment. The petitioners are directed to pay a sum of Rs. 40,000/- each as penalty within a maximum period of two weeks.
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2024 (8) TMI 1299
Deduction u/s 80IA - delay in filing of form 10CCB - Income Tax portal glitch - statutory Form 10CCB which was to be filed on or before 31.10.2022 was actually filed at 01:22 AM on 01.11.2022 - CIT(A) allowed deduction as it was due to technical glitches that are claimed to have prevailed in the Income Tax portal on the night of 31.10.2022 at the time of filing of Form 10CCB relying only upon the statement provided by the assessee in Form 35
HELD THAT:- Delay involved in the present case for 1 Hour 22 Minutes caused even after continuous efforts of the assessee to upload the Form on the web portal of the income tax department, it cannot be construed that there was some discrepancies or failure on the part of the assessee, therefore, we are of the considered view that the Form 10CCB filed by the assessee shall be treated as filed within the prescribed time with no delay. It is pertinent to mention that the prescribed Form was filed and available before the Ld. AO(CPC) when the return of the assessee was processed u/s 143(1) of the Act, the department was very much in possession of Form 10CCB while the intimation was issued.
Since, it is decided that delay in filing of Form 10CCB in present case was occasioned due to technical issues on the portal of income tax department for which the assessee cannot be held liable, therefore, the case laws relied upon by the revenue qua implementation of exemption notifications is irrelevant.
CBDT’s Circular 9/2015 regarding delay in filing refund claim and claim for carry forward losses u/s 119(2)(b) is also of no help as the delay was caused because of malfunction in the income tax website.
As prescribed form was filed only with a delay of 1 Hour 22 Minutes also much before the due date of filing of the return.
we hold that the assessee has substantiated that the Form 10CCB was attempted to be filed within the stipulated time, however, due to the reasons beyond control of the assessee i.e., technical glitches on the web portal of the department, the Form could not be filed in time but was uploaded with a slight delay of 1 Hour 22 Minute. As the delay was not attributed or occurred due to any negligence or inaction on the part of assessee, therefore, in the interest of justice also the assessee shall not be saddled with any penal action. Decided in favour of assessee.
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2024 (8) TMI 1298
Deduction u/s 80IA - assessee is engaged in the manufacturing and job work of electronically engraved copper roller , which are used for printing and packaging industries
Income was generated on account of wind mill business (sale of power) - AO disallowed the claim of deduction u/s 80IA by following the decision of Goldmine Share and Finance Private Limited [2008 (4) TMI 405 - ITAT AHMEDABAD] wherein ITAT observed that while computing deduction u/s 80IA, the profit from the eligible business for the purpose of determination of the quantum of deduction u/s 80IA has to be computed after deduction of the notional brought forward losses and depreciation of eligible business even through they have been allowed to be set off against other income in earlier years - CIT(A) allowed the deduction u/s 80IA as claimed by the assessee
HELD THAT:- It is well settled that if there are two contrary decision of Hon’ble High Court wherein the said High Court’s are non jurisdictional High Courts, then the decision favourable to the assessee shall apply, and more so the later decision of Hon’ble Delhi High Court has taken a view in favour of the assessee after considering decision of Hon’ble Karnataka High Court which has taken a view in favour of Revenue. Reference is drawn to the judgment and order of Hon’ble Supreme Court in the case of CIT v. Vegetable Products [1973 (1) TMI 1 - SUPREME COURT] Thus, we upheld the view taken by ld. CIT(A) in favour of the assessee by following the judgment and order of Hon’ble Madras High Court in the case of Velayudhaswamy [2010 (3) TMI 860 - MADRAS HIGH COURT] So far so good, there is no difficulty, but the difficulty arose that ld. CIT(A) has simply followed the decision of this Tribunal for assessment year 2009-10 to 2013- 14 and granted relief to the assessee.
Presently, we are concerned with assessment year 2017-18. The verification of claim is a factual matter which requires factual verification of various aspects concerning installation/commissioning of wind mill as well computation thereof.
CIT(A) did not considered the factual aspects that the assessee has commissioned new windmill at Nani Malti, Jamnagar in the financial year 2013-14, and the impugned assessment year is the initial assessment year , wherein the assessee is claiming the deduction u/s 80IA for the first time. No verification was done by ld. CIT(A). Similarly, the ld. CIT(A) did not consider that the deduction u/s 80IA w.r.t. Wind Mill at Navedra was claimed in the impugned assessment year being the last year of the allowability of said claim. Thus, the ld. CIT(A) whose powers are co-terminus with the powers of the AO, did not examine the factual matrix of claim of deduction u/s 80IA , its computation and its allowability thereof. Thus, with these observations, we are remitting the matter back to the file of ld. CIT(A) for verifying the claim of deduction u/s 80IA after considering the factual matrix as is emerging for the impugned assessment year. The appeal of the Revenue is allowed for statistical purposes. We order accordingly.
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2024 (8) TMI 1297
Cancellation of registration u/s 12AB(4) - violation of provisions of Section 11(1)(a) Section 11(1)(d) and Section 13(1)(c) - HELD THAT:- We are of the considered opinion that the reference made in terms of 2nd proviso of Section 143(3) of the Act to the PCIT to whom the AO was subordinate is not permissible rather it is the CIT(E) Delhi, having territorial jurisdiction specified in Column 4 of the Notification Nos. 52/2014 and 53/2014 both dated 22.10.2014 from whom exemption inter/alia u/s 12A is being claimed is the appropriate authority. In fact by and under the said notification the CIT(Exemption) has been constituted separately for the purposes mentioned therein. In that view of the matter the order passed by the PCIT cancelling registration of the appellant society on the reference made by the AO is found to be flawed and without jurisdiction.
Apart from that after considering the 2nd proviso of Section 143(3) of the Act, we find that the reference granted u/s 12AA of the Act is permissible to be made only during the pendency of the assessment proceeding.
However, in the case in hand the assessment proceeding has already been concluded on 29.03.2022. In fact, the reference could be made only during the course of assessment proceedings so as to enable the AO to give effect of the order passed on reference in the Assessment Order itself.
Moreso, the said proviso has been inserted w.e.f 01.04.2022 in the statute to make reference to the PCIT by the AO u/s 12AA, 12AB of the Act. In that view of the matter application of a particular provision of law which was not in existence during the material point of time cannot be said to have been rightly invoked.
So far as the provision of Section 12AB(4) of the Act as exercised by the PCIT is concerned the Ld. A.R relied upon a judgment passed in the case of M/s Islamic Academy of Education, Manglore [2024 (3) TMI 876 - ITAT BANGALORE]
As in view of the provision of Section 12AA(5) of the Act as the provision of Section 12AA cannot be applied on order after 01.04.2021 the show cause notices issued by the PCIT to the appellant dated 05.07.2023 and 16.08.2023 are, thus, found to be erroneous and therefore liable to be quashed. Once the show cause is found to be non est in the eyes of law, the entire proceeding is naturally found to be on a wrong foundation of law and thus, liable to be set aside.
Similarly, invoking the provision of Section 12AB(4) of the Act by the PCIT to cancel registration for specified violation is also not permissible at the same has not seen the light of day prior to 01.04.2022; the same is therefore, not applicable to Assessment Years 2015-16 to 2021-22 as wrongly has been applied in the case in hand.
Thus, having regard to these particular facts and circumstances of the case the issuance of show cause notices proposing cancellation of registration alleging specified violation occurred prior to 01.04.2022 i.e. for Assessment Year 2015-16 to 2021-22 and the final order passed by the PCIT cancelling registration of the appellant society for AY 2015-16 to 2021-22 by wrongly invoking the provision of Section 12A r.w.s 12AA and 12AB(4) of the Act is found to be erroneous, bad in law, whimsical, in non application of mind and thus, unsustainable. Assessee appeal allowed.
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2024 (8) TMI 1296
Bogus LTCG - Addition u/s 68 - assessee was one of beneficiaries of the penny stock - reliance o Investigation report or independent enquiry - HELD THAT:- It is found that the coordinate benches of ITAT, Mumbai have already considered the sale of scrip of VAS Infrastructure Ltd. in several other cases. One of the Members of this Bench, while dealing with stock scrip of VAS Infrastructure, has also held in the case Kamalesh Mohandas Lakhwani [2023 (8) TMI 505 - ITAT MUMBAI] wherein held mere suspicion that the assessee has invested in alleged penny stock scrip cannot be made basis of addition u/s. 69B of the Act. In the absence of any material evidences to corroborate the information received from DDIT that M/s. Vas Infrastructure Ltd. is a penny stock, we find no justification in upholding the addition made by the A.O.
Even, the Hon’ble Jurisdictional High Court of Bombay in the case of Indravadan Jain, HUF [2023 (7) TMI 1091 - BOMBAY HIGH COURT] didn’t find any infirmity in the orders passed by the ITAT on the issue of penny stock on facts by saying that there is no substantial question of law is involved.
Thus, we also hold that transactions of share scrip of VAS infrastructure Ltd. cannot be termed as fictitious in the absence of any evidence of manipulation of that scrip. The orders of the Ld. AO and the Ld. CIT (A) are found to be based only on the modus operandi given in the Investigation report and not based on any independent enquiry. Decided in favour of assessee.
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2024 (8) TMI 1295
Penalty u/s 271(1)(c) - Addition of commission income - HELD THAT:- Though earning of alleged commission income by providing accommodation entry in itself is a doubtful activity, but AO has not doubted this activity. He has accepted the alleged commission income of the assessee in providing accommodation entry of huge sum of Rs. 78.9 crores.
He only made changes that instead of half percent, it should be 1% of commission income. The assessee should have earned in this activity. To our mind, the income of the assessee has been revised on an estimate basis, which is based on difference of opinion without any scientific method. Therefore, on such an issue the AO as well as by the ld. CIT(Appeals) should have not been visited the assessee with penalty. Appeal of the assessee is allowed.
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2024 (8) TMI 1294
Levy of penalty u/s 271(1)(c) - addition of 12.5% of non-genuine purchases - HELD THAT:- Considering the facts, we are of the opinion that the AO has not fully established that, the assessee has concealed his income and made purchases from the grey market. Merely because the profit has been estimated and the assessee chose not to litigate further, would not amount to concealment of income or filing of inaccurate particulars.
As decided in AARKAY SAREE MUSEUM [1990 (8) TMI 97 - BOMBAY HIGH COURT] merely because certain additions were made in the trading account by the Assessing Officer, it did not necessarily follow that the assessee had concealed its income. Thus we do not find any merit in the levy of impugned penalty u/s 271(1)(c) - Decided in favour of assessee.
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2024 (8) TMI 1293
Denial of grant of registration u/s.12A - Non sufficient time for compliances - appellant trust was asked to furnish certain information/clarification on discrepancies noticed in the information filed by on or before 11.03.2024 - HELD THAT:-CIT(Exemptions) has not given sufficient time to the appellant trust for compliance. The time given is a very short period, i.e. less than one week, which is against the Standard Operative Procedure (‘SOP’) issued by the CBDT dated 19.11.2020, wherein, minimum period of 15 days is required to be given to the assessee to comply with notices u/s 142(1) from the date of issue of the notice.
The Hon’ble Delhi High Court in the case of Dauphin Travel Marketing Private Limited [2023 (7) TMI 1355 - DELHI HIGH COURT ] taking note of this SOP held that the grant of insufficient time to respond the notice violates the principles of natural justice and, therefore, set-aside the assessment. Thus, it is clear that the appellant trust was given unreasonably very short period of time to respond to the notice, which is against the principles of natural justice. Appeal of the appellant is partly allowed for statistical purposes.
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2024 (8) TMI 1292
Validity of the initiation of proceedings u/s 153C - Period of limitation - addition u/s 68 - addition in respect of share application money by holding that addition was not based on any incriminating material found during the search - HELD THAT:- The law as declared by the Hon’ble Supreme Court in the case of Jasjit Singh [2023 (10) TMI 572 - SUPREME COURT] is binding and we can’t shut our eyes to the fact that the proceeding initiated u/s 153C of the Act in this case was not in accordance with the law as laid down by the Hon’ble Court in that case.
After carefully examining the facts as available in the assessment order itself, we have already held that the AO had no jurisdiction to initiate proceedings u/s 153C for the A.Y. 2008-09, as it was beyond the permissible period of six years from the date of recording of satisfaction of the common AO and deemed handing over of the seized documents pertaining /belonging to the assessee. Therefore, the assessment order passed u/s 153C of the Act for the A.Y. 2008-09 is quashed due of the lack of jurisdiction of the AO to initiate the proceeding u/s 153C for this year.
Since, the assessment order is quashed due to AO’s lack of jurisdiction to initiate proceeding u/s 153C of the Act for the A.Y.2008-09, we do not deem it necessary to adjudicate the grounds taken by the Revenue as well as by the assessee.
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2024 (8) TMI 1291
Addition in the hands of HUF v/s individual - advance money for purchase of land - as argued payments were made by Darshan Kumar HUF, no separate addition should be made in the hands of Darshan Kumar as an individual - HELD THAT:- No addition was required to be made and ld. Counsel have also been able to demonstrate that the name of the seller and description of the property tallies with the legal notice.
Even, a summary has been given in the Brief Synopsis, in which, it has been clarified that the deal was for Rs. 14 lacs per acre as stated in the agreement and on the basis of which, the addition has already been made of Rs. 20 lacs in the hands of Darshan Kumar HUF for Asstt. Year 2006-07,thus, since that addition has already been considered and made in the hands of Darshan Kumar HUF, the addition was not liable to be made on wrong interpretation of the facts of the case - Assessee appeal allowed.
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2024 (8) TMI 1290
Correct head of income - rental income received from the tenants “income from house property” or “income from business” - DR submitted that the assessee is solely engaged in the leasing out of the properties and the since the tenant is paying rent along with the amenities charges hence the income disclosed under the head income from house property is chargeable to tax under head income from business.
HELD THAT:-. Prima-facie the assessee has received composite rent, and the payee/tenant has deducted TDS u/sec 194I of the Act in respect of rent of the premises and similarly on maintenance of space and other charges, the tenant has deducted TDS under the provisions of Sec.194C of the Act. The assessee has maintained separate books of accounts and are audited under the provisions of companies Act. In the Audited Profit & Loss Account, in particular disclosure Under Income: “Revenue From Operations”& “Notes 17” the assessee has bifurcated the income (i) Sale of Services less service tax and at Notes 17.1 “License fees and rental income, service charges and events”. Similarly the assessee has disclosed at Notes 18 “Other Income” placed at Page 12 of the paper book to substantiate the composite rent is bifurcated between rental income and maintenance charges. We find that the assessing officer has accepted the method of accounting of offering of rental income under the income from house property and the common area maintenance charges under income from business rental income for the A.Y.2016-17 to A.Y.2021-22 and passed the orders u/sec 143(1) and U/sec143(3)
CIT(A) has over looked various factual aspects/evidences and sustained the action of the assessing officer.
Accordingly, we set aside the order of the CIT(A) on this ground of appeal and direct the AO to consider the rental income under the income from house property and the common area maintenance charges under income from business and allow the deductions incurred wholly and exclusively for earning the income.
Ground of appeal no.1 decided in favour of the assessee on taxability of rental income under income from house property.
Disallowing interest expenses considering the same pertains to expenses not incurred wholly for the purpose of business - HELD THAT:- Assessee could able to substantiate with the information and details of the availability of sufficient own funds but the reconciliation and the factual information has to be examined and we rely on the ratio laid down in the case of Reliance Utilities & Power Ltd [2009 (1) TMI 4 - BOMBAY HIGH COURT] and accordingly we restore this issue to the file of assessing officer for verification and examination of facts and decide on merits. The assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information.
Disallowing the adjustment of brought forward book loss to be set off against the book profits U/sec 115JB - HELD THAT:-Assessee could able to substantiate with the information and details. Therefore, considering the principles of natural justice shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, set aside the order of the CIT(A) on this disputed issue and remit the entire disputed issues to the file of the Asssessing officer to Re-examine issue.
Disallowance of interest expenses - Assessee has sufficient own funds and were utilized for the purpose of business and the interest claim cannot be denied - CIT(A) has erred in holding that the interest expenses are not incurred wholly and exclusively for the business purpose. Whereas these facts need to be examined and verified. Accordingly, we restore this issue to the file of assessing officer for verification.
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2024 (8) TMI 1289
TP adjustment - ALP of export commission paid to Honda Motor Co. Ltd., Japan - HELD THAT:- While deciding identical issue in assessee’s own case in the latest order passed in assessment year 2017-18 [2023 (8) TMI 1179 - ITAT DELHI] assessee has successfully demonstrated not only the benefits but has also shown that the profitability is higher (as per the charts exhibited elsewhere). Considering the totality of the facts we have no hesitation in directing the AO/TPO to delete the impugned addition on account of export commission.
TP adjustment of payment of royalty - As decided in own case [2023 (3) TMI 1520 - ITAT DELHI] allowed assessee’s claim of deduction in respect of technical know-how payment.
Disallowance of signage expenses - The expenditure was incurred on signage for display of the name of the assessee at the dealer's premises. However, once the same is fixed at dealers site then the Courts have held that it does not satisfy the test of ownership with the assessee and the expenditure is to be allowed as revenue expenditure - We find support from the ratio laid down in CIT vs Honda Siel Power Products Ltd [2017 (6) TMI 524 - SUPREME COURT] Thus, we are of the view that the expenditure to the extent claimed by the assessee is to be allowed in the hands of the assessee and not/the entire expenditure.
Disallowance of sales tools expenses - Respectfully following the decision of the coordinate bench in assessee’s own case for assessment year 2015 – 16 [2021 (5) TMI 949 - ITAT DELHI] we also hold that sales tool expenditure are revenue expenditure in nature and therefore the disallowance made by the learned assessing officer is directed to be deleted.
Capitalizing a part of the royalty expenses - We must observe that neither the AO nor learned Dispute Resolution Panel have found any substantial difference in factual position relating to past assessment years and the impugned assessment year. As discussed earlier, the issue has been consistently decided in favour of the assessee in its own case in assessment years 2012-13 to 2017-18. Having gone through the facts and material available on record, we do not find any good reason to deviate from the consistent view taken by the Tribunal on the issue in earlier assessment years. Hence, respectfully following the decision of the Co-ordinate Bench in Assessment Years 2012-13 to 2017-18 we direct the AO to allow assessee’s claim.
Disallowance of deduction claimed towards education cess - Identical issue in assessee’s own case in assessment year 2017-18 [2023 (8) TMI 1179 - ITAT DELHI] the coordinate Bench has followed the decision in case of JCIT vs. Chambal Fertilizers & Chemicals Ltd., [2022 (12) TMI 1098 - SC ORDER] expounded that term ‘tax’ u/s 40(a)(ii) of the Income Tax Act should include cess. Assessee in his elaborate submission tried to distinguish this case law. But we are not convinced. Hence, we decide this issue in favour of Revenue.
Therefore, in our view, the issue is no more res integra. Moreover, an amendment has been brought to section 40(a)(ii) by Finance Act, 2022 with retrospective effect from 01.04.2005 by inserting Explanation-3, which explains that the term “tax” shall include and shall be deemed to have always included any surcharge or cess, by whatever name called, on such tax. Thus, in view of said amendment in the Act, assessee’s claim is unsustainable. Accordingly we uphold the decision of the departmental authorities on this issue. Ground raised is dismissed.
Refund of excess dividend distribution tax (DDT) paid - Though, on a reading of Total Oil India Pvt. Ltd [2023 (4) TMI 988 - ITAT MUMBAI (SB)] it is clear that the issue raised by the assessee is covered against it, however, before us, learned counsel appearing for the assessee submitted that there are certain facets relating to the issue, which needs to be examined, as on those aspects, the decision of Special Bench is either silent or can be distinguished. Be that as it may, considering the fact that the issue was never examined on merits by the departmental authorities, we are inclined to restore the issue to the file of the AO for de novo adjudication after considering the submissions of the assessee and keeping in view the decision (supra). Ground is allowed for statistical purposes.
Disallowance of deduction of technical know-how expenses paid to parent company - AO disallowed assessee’s claim summarily, as it was neither raised in the original return of income nor through revised return of income - HELD HAT:- It is the specific case of the assessee that similar claim made in earlier assessment years in course of proceedings before the departmental authorities have been allowed by the Tribunal. Since the issue has not been factually examined by the departmental authorities, as they rejected assessee’s claim summarily, we are inclined to restore the issue to the AO for de novo adjudication after giving due and reasonable opportunity of being heard to the assessee. Ground is allowed for statistical purposes.
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2024 (8) TMI 1288
Seeking for Release / Return / Reexport of gold to the Petitioner - service of SCN - HELD THAT:- It is manifest that under Section 110 (2) of the Customs Act, a notice under Clause (a) of Section 124 has to be issued to the owner of the goods or other person concerned within six months of the seizure of the goods, failing which, such goods shall be returned to the person from whose possession they were seized. Section 153 of the Act prescribes the modes of service of such notice. The methods indicated in Section 153(1) are alternative methods, anyone of which could be attracted in the first instance.
Petitioner made a failed attempt to show that she did not receive any e-mail dated 04.07.2023, by placing on record the screen-shot of the inbox taken from the mobile phone. However, the same cannot be relied for the reason that as per certificate under Section 65-B of the Evidence Act filed by the petitioner, such digital record was taken out from the computer and not from the mobile phone. The screen-shot of inbox produced by the petitioner is therefore not a trustworthy document and cannot be relied upon.
The gold bars were admittedly seized on 21.01.2023, while the SCN was served through e-mail to the petitioner on 04.07.2023. The SCN was served within a period of six months, as provided under Section 110 (2) of the Customs Act, 1962, and therefore that being so, petitioner is not entitled to the release of gold bars at this stage.
There are no merit in the instant writ petition - petition dismissed.
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2024 (8) TMI 1287
Maintainability of Review Petition seeking review of an Order whereby this Court has disposed of Writ Petition on the ground that it would be appropriate for the Petitioners to take recourse to the remedy of an Appeal as provided under Section 129-A of the Customs Act, 1962 - HELD THAT:- It is well settled in law that a review can be entertained if a person discovers new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the order was passed or on account of some error apparent on the fact of the record.
In the present case, it is not even the case of the Petitioners that they have discovered any new or important matter or evidence which was not within their knowledge or which could not be produced by them when the said Order dated 5th February 2024 was passed. Therefore, this Review Petition is not maintainable on this ground.
Further, when the Order dated 5th February 2024 was passed, the ground of limitation was not even taken in the Writ Petitions, and, therefore, the Petitioners cannot contend that there is any error apparent on the face of the record on that account. For this reason also, the present Review Petition is not maintainable - merely because the Petitioners have to deposit monies while filing an Appeal, does not mean that the said Writ Petitions should be entertained by this Court.
The present Review Petition is dismissed.
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2024 (8) TMI 1286
RoSCTL Scheme benefits for exports made under specific shipping bills - whether right accrued pursuant to any law and/or Scheme in favour of the person can merely be denied due to any technical error and/or glitch? - HELD THAT:- The aforesaid question has already been answered by the coordinate Bench of this Court in case of BOMBARDIER TRANSPORTATION INDIA PVT LTD VERSUS DIRECTORATE GENERAL OF FOREIGN TRADE [2021 (3) TMI 9 - GUJARAT HIGH COURT] while considering the benefits under the MEIS Scheme. In the said decision, the facts were more or less similar to the case on hands. The proposition of law, therefore, could not be disputed by the learned advocate appearing for the respondent - It was held in the case that 'It is a settled law that the benefit which otherwise a person is entitled to once the substantive conditions are satisfied cannot be denied due to a technical error or lacunae in the electronic system.'
The respondent Nos.1 and 2 are directed to grant benefit of RoSCTL Scheme within a period of eight weeks from the date of receipt of copy of this order - petition allowed.
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2024 (8) TMI 1285
Undervaluation of imported goods - white and yellow poppy seeds imported from Turkey - rejection of declared value by the appellants importer on the basis of values available in data base maintained by Turkish customs authorities and Public Ledger prices - whether the impugned order confirming demand of differential duty, and imposing of fine and penalty by the adjudicating authority in the impugned order is legally sustainable or not?
HELD THAT:- It is a fact on record that the entire demand of differential duty is on the basis of documents obtained from Turkish Customs authorities and the chart indicating that there is undervaluation of goods as concluded in the DRI investigation. It is also found that the basic issue involving rejection of declared value by the appellants importer on the basis of values available in data base maintained by Turkish customs authorities and Public Ledger prices.
The very same issue have been extensively examined by the Coordinate Bench of the Tribunal, in a similar set of same facts of the case of Ajay Exports [2023 (6) TMI 1090 - CESTAT MUMBAI] by determining the basic issues of valuation imported poppy seeds from Turkey in terms of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and have held that rejection of declared value is without authority of law; and the confiscation of imported goods, imposition of redemption fine and penalties have also been set aside.
In view of the decision taken by the Co-ordinate Bench of the Tribunal, it is opined that a different stand on the matters cannot be taken in involving similar set of facts and circumstances.
The impugned order dated 20.01.2014 passed by the Commissioner of Customs (Import), Mumbai is not legally sustainable and the therefore the same is set aside - appeal allowed.
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