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Showing 421 to 440 of 1564 Records
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2024 (8) TMI 1144
Adjustment of refund against duty demand - Refund of additional amount deposited based on High Court order - HELD THAT:- Going back to the legality of issue of adjustment of refund against duty demand, that has become infructuous in view of the order passed by the Hon'ble Supreme Court as no amount, by way of reversal of CENVAT Credit on removal of capital goods, is held to be payable after the same is paid on its depreciated value. What remains here to be seen is that on the basis of Appellant’s request letter dated 12.12.2023 the entire amount of ₹18,38,774/- (13.5 lakhs + 4.88 lakhs paid earlier) is required to be refunded to the Appellant within 15 days of receipt of such request letter in view of Board Circular dated 10.03.2017, falling which interest under Section 11BB is also payable but as could be noticed here, no order was passed by the Refund Sanctioned Authority in that respect.
The most important point that would be required to be determined by this forum is concerning its jurisdictional competency to deal with such an issue that occurred subsequent to passing of order by the Commissioner (Appeals), which is assailed herein.
This Tribunal which has denied the relief granted by the Commissioner (Appeals) to the Appellant, is duty bound to enforce the order passed by the Hon'ble Supreme Court as contained in order 2(a) of the said Enforcement Order 1954 and therefore, in exercise of the power conferred on this Tribunal under Rule, 41 of the CESTAT (Procedure) Rules, 1982, that provides in a way for implementation of order.
Appellant is entitled to get refund of payment of ₹18,38,774/- against demand raised for inadmissible credit taken by the Appellant alongwith applicable interest and for this purpose the order passed by the Commissioner (Appeals) is hereby set aside - Appeal allowed.
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2024 (8) TMI 1143
Classification of goods supplied to the Indian Railways - major items manufactured are brake systems, HVAC, couplers, doors, pantographs etc. - to be classified under Chapter 86 or under chapters 84, 85 etc.? - Extended period of limitation - interest - penalty.
Classification of goods - HELD THAT:- The discussion on pantographs and its parts occurs at para 26 of the impugned order and is very cryptic. It accepts that pantograph and its parts are exclusively used in railways or tramway locomotives, however it states that the classification of any item under the Central Excise Tariff is not guided by usage or application of the goods but guided by the notes prescribed under Section / Chapters of the Schedule to the Central Excise Tariff, 1985.
Revenue has failed to establish its case for classification of pantographs and its parts under CTH 8535. The order is cryptic and non-speaking on the issue. A lack of reasoning in an order makes it difficult for Appelate Authorities to discharge their appellate function properly.
Extended period of limitation - HELD THAT:- It is not merely a blame worthy act that would trigger the evocation of the extended period of limitation, something more is required. The act should have been done with the intention to evade payment of duty. There is a positive finding of intended duty evasion has not been arrived at in the impugned order. Hence the demand of duty for the extended period must fail.
Interest - HELD THAT:- The appellant is liable to pay duty for the normal period. Further whenever the payment of interest is mandated by statute, it automatically comes into play, when the happening or non-happening of an event mentioned in the relevant section of the statute occurs. The liability gets extinguished only when the statutory payments are made as required by the statute. A similar issue relating to payment of interest under the Central Excise Act was examined by the Hon’ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS M/S SKF INDIA LTD. [2009 (7) TMI 6 - SUPREME COURT] wherein it was held that interest was payable even in a case of short payment of duty which was indeed completely unintended and without any element of deceit etc. We thus find that the appellant is lawfully bound to pay interest on the duty demanded, and that interest is leviable on delayed or deferred payment of duty for whatever reasons.
Penalty - HELD THAT:- It is found that revenue has not made out a case of a blame worthy act with intention to evade payment of duty, hence the question of penalty does not arise and the same is set aside.
Appeal disposed off.
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2024 (8) TMI 1142
Extended period of limitation - suppression of facts or not - Classification of RAB - to be classified as concentrated sugar syrup under ETI 1702 90 90 as ‘other sugar syrups not containing added flavouring or colouring matter’ or not - benefit of excise exemption under the Notification dated 16.03.1995 denied on the ground that RAB was captively used in the manufacture of rectified spirit (non excisable commodity) - HELD THAT:- It would be seen from a perusal of sub-section (1) of section 11A(1) of the Central Excise Act that where any duty of excise has not been levied or paid, the Central Excise Officer may, within one year from the relevant date, serve a notice on the person chargeable with the duty which has not been levied or paid, requiring him to show cause why he should not pay amount specified in the notice - The proviso to section 11A(1) of the Central Excise Act stipulates that where any duty of excise has not been levied or paid by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act or the Rules made there under with intent to evade payment of duty, by the person chargeable with duty, the provisions of the said section shall have effect as if, for the word ‘one year’, the word ‘five years’ has been substituted.
It needs to be noted that the show cause notice did allege that suppression of facts by the appellant was with an intent to evade payment of central excise duty but such a finding has been recorded by the Commissioner. This apart, there is no discussion in the order as to why the appellant suppressed facts with an intent to evade payment of excise duty. The reply filed by the appellant on this aspect has not been considered at all by the Commissioner. The appellant had pointed out in reply to the show cause notice that the issue involved was complex in nature and the department also was not sure about the classification of RAB - The contention raised by the appellant have not been considered at all by the Commissioner. It was imperative for the Commissioner to have examined the aforesaid facts placed on record by the appellant as the consideration of the same was necessary for recording a finding one way or the other regarding invocation of the extended period of limitation.
The provisions of section 11A (4) of the Central Excise Act, which are as similar to the provisions of section 11A(1) of the Central Excise Act, came up for interpretation before the Supreme Court in PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [1995 (3) TMI 100 - SUPREME COURT]. The Supreme Court observed that section 11A(4) empowers the Department to reopen the proceedings if levy has been short levied or not levied within six months from the relevant date but the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. It is in this context that the Supreme Court observed that the act must be deliberate to escape payment of duty.
There can be a difference of opinion between the department and Revenue and an assessee may genuinely believe that it is not liable to pay duty. On the other hand, the department may have an opinion that the assessee is liable to pay duty. The assessee may, therefore, not pay duty in the self-assessment carried out by the assessee, but this would not mean that the assessee has wilfully suppressed facts. To invoke the extended period of limitation, one of the five necessary elements must be established and their existence cannot be presumed merely because the assessee is operating under self assessment.
In the present case, all that has been stated in the impugned order, even in the absence of any allegation in the show cause notice regarded intent to evade duty, is that since the appellant suppressed facts, the provisions of the extended period of limitation contemplated under the proviso to section 11A(1) of the Central Excise Act would be applicable since such suppression of facts was with an intent to evade payment of duty. The extended period of limitation could not have been invoked in the present case even if the returns were self assessed.
Thus, as the extended period of limitation contemplated under the proviso to section 11A(1) of the Central Excise Act could not have been invoked, the impugned order dated 09.05.2019 passed by the Commissioner deserves to be set aside as the entire demand is covered under the extended period of limitation.
The impugned order dated 09.05.2019 passed by the Commissioner is, accordingly, set aside - appeal is allowed.
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2024 (8) TMI 1141
Challenge to award under Section 34 of the Arbitration and Conciliation Act, 1996 - Arbitrator accepted the claim of loss on the ground of on-site establishment ‘as permissible’ to the extent of 3% of the contract amount by the Hudson’s formula for expenses of engineers, supervisors, etc. - interest claim.
HELD THAT:- The conclusion of the High Court, “that it appears that the bills were paid soon after they were prepared” or that, “in that case there could not have been any claim for interest” cannot qualify as grounds for interference under Section 37. Equally, the approach of the High Court in holding that the Arbitrator neither established nor discussed the questions posed by it is not a ground to set aside the Award. The reasoning of the Arbitrator is reflected in that portion of the Award extracted hereinabove and we see nothing perverse in it. Nor such conclusion is against our public policy. The scope of Section 37 is enunciated in many decisions of this Court, and we apply the principles laid down therein to the facts of the present case.
The judgment of the High Court in relation to claim no. 4 is set aside - the Award is restored and thereby the judgment of the District Court upheld the Award.
Interest claim - HELD THAT:- While pendente lite interest is a matter of procedural law, prereference interest is governed by substantive law. CENTRAL BANK OF INDIA VERSUS RAVINDRA [2001 (10) TMI 1065 - SUPREME COURT]. Therefore, the grant of pre-reference interest cannot be sourced solely in Section 31(7)(a) (which is a procedural law), but must be based on an agreement between the parties (express or implied), statutory provision (such as Section 3 of the Interest Act, 1978), or proof of mercantile usage - the High Court had no reason to interfere with the Arbitral Award with respect to grant of pre-reference interest, since the Contract between parties does not prohibit the same.
Appeal disposed off.
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2024 (8) TMI 1140
Seeking an appropriate Writ or Direction to the effect that the personal bonds and sureties executed by the petitioner registered at P.S. Sadar, District Gurugram, shall hold good for eleven other bail orders passed in his favour from the Courts of different States - Whether the petitioner entitled to the relief of treating the personal bond and one set of sureties already furnished as holding good for the other bail orders also?
HELD THAT:- From time immemorial, the principle has been that the excessive bail is no bail. To grant bail and thereafter to impose excessive and onerous conditions, is to take away with the left hand, what is given with the right. As to what is excessive will depend on the facts and circumstances of each case. In the present case, the petitioner is experiencing a genuine difficulty in finding multiple sureties. Sureties are essential to ensure the presence of the accused, released on bail. At the same time, where the court is faced with the situation where the accused enlarged on bail is unable to find sureties, as ordered, in multiple cases, there is also a need to balance the requirement of furnishing the sureties with his or her fundamental rights under Article 21 of the Constitution of India.
An order which would protect the person’s fundamental right under Article 21 and at the same time guarantee the presence, would be reasonable and proportionate. As to what such an order should be, will again depend on the facts and circumstances of each case.
It is directed that for the FIRs pending in each of the States of Uttar Pradesh, Rajasthan, Punjab and Uttarakhand, in each State, the petitioner will furnish his personal bond for Rs. 50,000/- and furnish two sureties who shall execute the bond for Rs. 30,000/- each which shall hold good for all FIRs in the concerned State, for cases mentioned in the chart set out hereinabove. The same set of sureties is permitted to stand as surety in all the States. This direction will meet the ends of justice and will be proportionate and reasonable.
Petition allowed.
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2024 (8) TMI 1139
Sufficient ground to proceed as contemplated under Section 227 of the Criminal Procedure Code - whether the materials collected during investigation even if admitted for the sake of the arguments discloses commission of an offence under Section 306 and 420 of the Indian Penal Code?
HELD THAT:- It is true that additionally there is charge under Section 420 of the Indian Penal Code. The main offence is under Section 306 of the Indian Penal Code. If there is delivery of the property in pursuance to the cheating, it is punishable under Section 420 of the Indian Penal Code. There is an allegation that the Applicant induced the deceased to join her company. The deceased has given all his best for the progress of the Company. It will not fall under Section 420 of the Indian Penal Code, because there is no delivery of the property. The first informant in his supplementary statement has stated about issuance of the cheque after the incident. Cheque is of Rs. 4,50,000/- and cash of Rs. 41,83,000/-.
If the deceased is upset due to the decision of the Applicant, we cannot say that she has intentionally aided the deceased to commit suicide. A person may not like decision of another person. Ultimately whether to continue business or personal relation is choice of the parties. If other party may not like that decision and if he puts to an end to his life, it does not fall within the meaning of the intentionally aiding under Section 107 of the Indian Penal Code.
The learned trial Judge has failed to consider the provision of Section 107 of the Indian Penal Code. Learned Judge has failed to consider the absence relationship in between acts alleged and the consequence - Merely on account of the dispute, it cannot be said that it can be abetment. This Court has taken this view after perusing the statements and panchnamas on one hand and considering the ingredients of the Section 306 read with Section 107 of the Indian Penal Code on the other hand.
The Order dated 10/04/2015 passed by the Court of the Additional Sessions Judge, Greater Mumbai in Sessions Case No. 658 of 2014 is set aside - Applicant is discharged for an offence under Sections 306 and 420 of the Indian Penal Code - Revision application is allowed.
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2024 (8) TMI 1138
Validity of the approval accorded in terms of Section 153D - Mechanical approval without application of mind - ITAT allowing the appeal of the assessee and quashing the assessment order by holding that the approval has been given mechanically without application of mind despite the fact that Range Head
HELD THAT:- An identical challenge of approval having been accorded mechanically and without due application of mind had arisen for our consideration in Pioneer Town Planners Pvt. Ltd [2024 (3) TMI 828 - DELHI HIGH COURT] it is seen that the PCIT has failed to satisfactorily record its concurrence. By no prudent stretch of imagination, the expression “Yes” could be considered to be a valid approval. In fact, the approval in the instant case is apparently akin to the rubber stamping of “Yes” in the case of Central India Electric Supply [2011 (1) TMI 89 - DELHI HIGH COURT].
In view of the aforesaid, we find no justification to interfere with the view expressed by the Tribunal. No substantial question of law arises. The appeals fail and shall stand dismissed.
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2024 (8) TMI 1137
Penalty u/s 271D - contravention of section 269SS - consideration received in cash towards sale of property - HELD THAT:- This issue is squarely covered in favour of the assessee by the decision of Katasani Tirupati Reddy [2024 (8) TMI 1097 - ITAT HYDERABAD] where the Tribunal by following the decision of Shri R. Dhinagharan (HUF) [2024 (1) TMI 61 - ITAT CHENNAI] held that ‘specified sum’ as per Explanation to section 269SS of the Act is only applicable for the advance receivable or advanced received in relation to transfer of any immovable property, but not to consideration received towards transfer of property.
Thus we direct the AO to delete the penalty levied u/s 271D of the I.T. Act, 1961. Decided in favour of assessee.
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2024 (8) TMI 1136
Accrual of income in India - FTS - PE in India or not? - treatment of network fees earned during the year by the assessee as fees for technical services and royalty under the Income-tax Act and u/A 13 of the India Netherland DTAA - HELD THAT: The assessee has various business infrastructures such as IT network, E-commerce portal facilitating interface with customers, network pool of various service providers, such as freight insurance etc. - During the course of scrutiny assessment proceedings the AO noticed that, assessee has earned its income from services provided to its Indian AE i.e. Damco India Private Limited (DIPL), as network transportation fee.
The transportation fee received from DIPL, was subjected to TDS treating the remittance as FTS but in the return of income was not offered to tax treating the same as business income on the ground that there was no PE in India.
Since the payment was in the nature of FTS, a show-cause notice was issued proposing to treat the transportation fee as FTS. Assessee filed a detailed reply explaining that it is overall responsible for operation and maintenance of the business at global level and since DIPL is part of such network it makes use of facilities like integrated supply chain management, freight forwarding network, Group IT for common platform for integrated and efficient operations.
As explained that, assessee does not charge any separate charge for use of such facilities.
From the above chart it was explained that in FY 2013-14 and 2014-15, DIPL has received network income in which it failed to earn profits less than arm’s length margin. It was clarified that network fee/network income is not a charge and hence it thus comes under the purview of FTS u/A 12 of India Netherlands Tax Treaty. It was strongly contended that such network fee receipts from DIPL are business income u/A 7 of India Netherlands Tax Treaty and in business of a PE, such network fee receipts are not taxable in India.
The explanation of the assessee did not find favour with the AO who was of the firm belief that as per Explanation 2 to Section 9(1)(vii) FTS has been defined as any consideration for rendering any managerial, technical or consultancy services and the taxability of the FTS is also applicable in view of the treaty. Accordingly, the network fees was taxed as fees for technical services and royalty.
Objections were raised before the DRP and the DRP after considering the facts and the submissions, was of the opinion that the DRP in AY 2016-17 had upheld the additions made by the AO to the total income of the assessee treating the impugned receipts as FTS. DRP further observed that the issues at hand is similar to those which were dealt by the DRP in AY 2012-13 and 2013-14.
Though the DRP fairly conceded that identical additions were made in assessee’s own case for AY 2013-14, 2017-18, 2019-20 and 2020-21 and the said additions were deleted by the Tribunal and since the decisions of the Tribunal were not accepted by the revenue, the DRP confirmed the action of the AO.
Respectfully following the order of the Co-ordinate Bench AY 2017-18 and 2020-21 [2023 (6) TMI 1428 - ITAT MUMBAI] we direct the AO to delete the impugned addition on account of receipt of network fees from DIPL.
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2024 (8) TMI 1135
Designation of Income-tax Authorities under the Income-tax Act - Determination of designation in the hierarchy of Income Tax Authorities - Whether Additional Commissioner can be the TPO? - HELD THAT:- The authorization by Board only refers to the designation of an Income Tax Authority for a particular vacancy & the transfer/ posting orders assign a particular officer to that vacancy. To put it in simple words, the Board authorization creates a vacancy and by virtue of transfer/posting orders the Department fills the said vacancy with the designated incumbent.
As pointed earlier, the definition of Joint Commissioner in Section 2(28C) includes Additional Commissioner, therefore, in our considered view there is no infirmity or irregularity in appointing officer in the grade of Additional Commissioner to a position designated for Joint Commissioner. Thus, in view of our above findings we find no merit in both the arguments advanced by the ld.Counsel assailing validity of order passed u/s. 92CA of the Act. As a result, additional ground of appeal is dismissed.
Allowability of Pro-rata amount for the year in respect of Leasehold Lands -Assessee had made claim by way of a Note in computation of income - AO rejected the claim on the ground that the amount has not been claimed in the return of income or in the revised return of income - HELD THAT:- AO has allowed assessee’s claim of pro-rata amount on the leasehold land. Since, the claim of assessee has been allowed in the past i.e. A.Y 2006-07 and 2007-08 on similar set of facts, in principle we hold that assessee’s claim of deduction of pro-rata amount in respect of leasehold lands deserves to be accepted, however, we deem it appropriate to restore the issue to the A.O for the limited purpose to examine quantum of claim. Ground No.1 of appeal is allowed in the aforesaid terms.
Write back of provision for doubtful debts - contention of the assessee is that the quantum of aforesaid claim has been inadvertently computed - HELD THAT:- During assessment proceedings the assessee furnished details of write back of doubtful debts along with certificate from Chartered Accountant. We find that in A.Y. 2006-07 [2019 (2) TMI 278 - ITAT MUMBAI] similar claim made by the assessee was denied by the A.O. The matter travelled to the Tribunal. The Tribunal restored the issue back to the file of A.O - Taking into consideration entire facts, we deem it appropriate to restore this issue back to the file of A.O for re-examination. The Assessing Officer shall also consider the fresh claim made by the assessee before the Tribunal.
Interest on Income-tax refund u/s. 244A - It is undisputed that the assessee after finalization of interest amount in proceedings u/s. 154 has not filed revised return of income, nevertheless the assessee in computation of income by way of Note No.2 has mentioned that in case interest amount is reduced or withdrawn, subsequently on completion of assessment the interest chargeable to tax for the year should be considered accordingly. Or in alternate the assessee reserve the right to claim interest withdrawn by the Department as deduction for the total income for the year in which interest is withdrawn. Nevertheless, the powers of the Appellate Tribunal are not impinged to entertain fresh claim made by assessee during appellate proceedings. It is a well settled law that Government cannot charge tax in excess of what is due. Since, assessee has offered to tax excess amount the AO is directed to grant relief on the excess amount offered to tax by the assessee.
Disallowance u/s. 14A r.w.r. 8D - No suo- moto disallowance was made by the assessee for earning of exempt income - Contention of the assessee is that own funds of the assessee are much more than the investments, hence, no disallowance u/r.8D(2)(ii) is warranted - HELD THAT:- It is no more res-integra that where the assessee has mixed bag of funds comprising of own interest free funds and borrowed interest bearing funds and if, own interest free funds of the assessee are sufficient to cover the investment made, it shall be presumed that the investments are made by the assessee from available interest free funds. Re.HDFC Bank Ltd. [2016 (3) TMI 755 - BOMBAY HIGH COURT]. The assessee has substantiated availability of own interest free funds in the form of Share Capital and Reserves & Surplus from the Balance Sheet and Funds Flow Statement. In view of the above, disallowance u/r.8D(2)(ii) is directed to be deleted.
Disallowance u/s. 8D(2)(iii) - Provisions of Rule 8D would apply from the Assessment Year 2008-09 i.e. the impugned assessment year before us. Prior to Assessment Year 2008-09 disallowance u/s. 14A was made merely on estimations. Hence, the manner of making disallowance prior to Assessment Year 2008-09 would not apply to Assessment Year 2008-09 and thereafter. Hence, we are not in agreement with the first submission of the assessee, therefore, rejected. The second/alternate contention of the assessee is that disallowance be restricted to investments yielding exempt income.
The Special Bench in the case of Vireet Investments Pvt.Ltd. [2017 (6) TMI 1124 - ITAT DELHI] has held that for the purposes of disallowance u/s. 8D only investments yielding dividend income should be considered. The alternate prayer of the assessee is in line with the principle laid down by Special Bench, hence, we find merit in the alternate prayer made by the ld.Counsel for the assessee. The Assessing Officer is directed to compute disallowance u/r. 8D(2)(iii) on investments yielding exempt income only.
Disallowance u/s. 14A r.w.r. 8D while computing book profit u/s. 115JB - HELD THAT:- Special Bench in the case of Vireet Investments Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] has held that while computing book profits u/s. 115JB of the Act disallowance made u/s.14A r.w.r. 8D shall not be considered. The Hon’ble Karnataka High Court in the case of Sobha Developers Ltd. [2021 (1) TMI 378 - KARNATAKA HIGH COURT] has reiterated that disallowance made u/s. 14A could not be added to book profits of assessee u/s.115JB.
Nature of expenditure - Expenditure on issue of FCCN[ Foreign Currency Convertible Bonds] - FCCNs issued by the assessee are in the nature of convertible debentures - HELD THAT:- We find that identical issue was considered by the Co-ordinate Bench in assessee's own case in Assessment Year 2006-07 [2019 (2) TMI 278 - ITAT MUMBAI] allowed expenditure on issuance of FCCN as stating whether the debenture issued is convertible or non-convertible, it is in the nature of loan. Therefore, any expenditure incurred in relation to issuance of such debenture is allowable as expenditure.
Deduction u/s. 80G - assessee has claimed deduction u/s. 80G of the Act in respect of donation made during the year - HELD THAT:- We find that the assessee is having negative income (loss), therefore, there is no occasion for the assessee to claim benefit of deduction u/s. 80G of the Act. Consequently, ground No.7 of the appeal is dismissed as infructuous.
Adjustment u/s. 92CA (3) of the Act in respect of export of vehicles - HELD THAT:- TPO in respect of product 207-D-31 picked the transaction with one AE i.e. Tata Uganda Ltd. having average FOB of Rs. 257,861 and compared it to a transaction with non-AE Nitol Motors Ltd. with an average FOB of 272670. The Assessing Officer /TPO while cherry picking transactions with AE turn blind eye to the other transactions with Non-AE, where the average FOB is lower and number of units sold is much higher. A perusal of the table would show that the average sale price per unit charged to AEs is higher than the average sale price per unit of comparable uncontrolled transactions. Though, the TPO held that internal CUP is not acceptable but he has not specified what other method he has applied to benchmark the transaction.
Similarly, in respect of product 207-4x4-483, the TPO selected the transaction with non-AE where the average price charged is more than price charged from AE ignoring the fact that there are transaction with other non-AEs where the average price charged is less than average price charged from AEs. The TPO further failed to consider the fact that the assessee has sold only two units to the non-AE where the average price charged is more than the average price per unit charged to AEs. Thus, we are in agreement with the ld.Counsel for the assessee that to determine ALP of the transaction average price charged to AEs should have been compared to the average price of the comparable uncontrolled transactions in respect of each product/model of vehicle. TPO has resorted to cherry picking which is unacceptable in making Transfer Pricing adjustment. Thus, the adjustment made in respect of export of vehicles deserves to be deleted. Hence, ground No.8 of appeal is allowed.
Adjustment u/s.92CA(3) in respect of transaction with Hispano Carrocera, S.A - HELD THAT:- It is an admitted position that as against total assets of Hispano aggregating to Euro 21.95 million the assessee has extended unsecured loans to the tune of Rs. 15 million, which count for more than 51% of the book value of total assets of Hispano. Thus, conditions set out in section 92A(2)(c) are satisfied. A perusal of Form 3CEB at page 70 to 95 of the paper book shows that while disclosing information in Clause 7 Part B i.e. the list of AEs, the assessee has disclosed the name of Hispano Carrocera –S.A at Sl.No.7 in Annexure -I and against the column nature of relationship with AE it is mentioned “Direct/Indirect participation in capital, control and management”. Thus, in view of self declaration made by the assessee in Form-3CEB there is no element of doubt that Hispano is an AE of assessee.
Adjustment u/s. 92CA(3) of the Act in respect of interest on loans granted to AE - Assessee submitted that the Contract Rate of Interest with the AEs is more than the base LIBOR/EURIBOR rates - HELD THAT:- The assessee has also brought to our attention table at page -16 of the assessment order indicating contracted rate, the base Libor/Euribor rates and the rate applied by the DRP. The assessee has also referred to effective base rates as per European Central Bank.
From perusal of aforesaid table prima facie it appears that the rates charged by the assessee from its AEs is higher than the base LIBOR/EURIBOR rates. Similar adjustments were made by the TPO in the preceding Assessment Years, the DRP restricted the rate of interest to LIBOR + 200bps. The Tribunal in Assessment Year 2007-08 [2019 (5) TMI 15 - ITAT MUMBAI] deleted the adjustment and restored the issue back to the file of AO to re-adjudicate the issue after considering submissions of the assessee. We deem it appropriate to restore this issue back to the file of Assessing Officer with similar directions. In the result, ground No.9 of appeal is allowed for statistical purposes.
Adjustment u/s. 92CA in respect of purchase of property from Hispano Carrocera - HELD THAT:- As it cannot be said that the valuer was oblivious of the encumbrances or has not considered the total value of encumbrances on the said property. The valuer has categorically stated that the total value of encumbrances is to be deducted from the value determined. The assessee has also placed on record Government Agency report on construction and value of property purchased by the assessee from Hispano.
A perusal of the said report shows the cost of construction to be applied on the office area and workshop area separately. The assessee has paid net amount of Euro 21.34 million to Hispano after deducting payments made to various parties in discharge of encumbrances. In the absence of any contrary material valuation certificate produced by the assessee from an independent valuer has to be accepted in determination of value of the property. TPO cannot arbitrarily adopt a value without there being any substantive basis.
The insurance value possibly could be only of the building and not the land as there was no question of insuring land. Thus we are of the considered view that the TPO erred in adopting insured value of the property. The transfer pricing adjustment cannot be made on adhoc basis. TPO has to apply one of the prescribed method as is notified during the relevant point of time. We see no plausible reason to sustain the addition, hence, the adjustment on account of purchase of property from Hispano is liable to be deleted. We hold and direct accordingly. In the result, ground No.11 of appeal is allowed.
Adjustment u/s. 92CA(3) - property leased to Hispano adopting 10% of property as fair annual value - HELD THAT:- The recitals of Lease Agreement show that the property has been leased out on monthly rent of Euro 80,000, excluding Value Added Tax charged by the State. The said rent has been calculated at Euro rate of 4% in accordance with stringent market conditions. Thus, in view of specific clause of rent in the lease agreement we observe that the findings of the TPO on this issue are contrary to the facts on record. Hence, the adjustment made on account of notional rent @10% of value of property is unsustainable, accordingly, we direct the TPO/Assessing Officer to delete the same.
Short TDS credit - assessee submits that the AO has erred in granting short credit of TDS by Rs. 2.94 crores - HELD THAT:- AO is directed to examine TDS in the case of assessee during the relevant period and allow the credit of short amount, if any, in accordance with law. Thus, ground of appeal is allowed for statistical purpose.
Levy of interest u/s. 234D is mandatory and consequential, hence, ground of appeal is dismissed being without any merit.
Admission of additional ground - Assessment order time barred by limitation, hence, liable to be quashed - HELD THAT:- Co- Cordinate Bench in the case of Lanxess India (P) Ltd. [2022 (7) TMI 1532 - ITAT MUMBAI] after considering the decision rendered in the case of Vedanta Limited [2020 (1) TMI 168 - MADRAS HIGH COURT] dismissed similar ground held that we are inclined to held that procedure of issuing draft assessment order laid down in the section 144C is to be followed with effect from 1-10-2009. In the instant case, though the assessment year involve is 2009-10, the draft assessment order has been issued on 28-3-2013, much after the specified date of 1-10-2009 and therefore we do not find any violation of the law by the Assessing Officer in issuing the draft assessment order on 28-3-2013 and passing of the final assessment order dated 26-2-2014 by the Assessing Officer. Therefore, the final assessment order passed by the Assessing Officer is well within the limitation provided in law. Thus, the additional grounds raised by the assessee are accordingly dismissed.
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2024 (8) TMI 1134
Freezing of bank account of petiitoner - impugned letter nowhere mentions that the bank account is frozen - HELD THAT:- Respondents, first of all, do not appear to have informed petitioner about the order dated 8th May 2024 and if such an order had been passed and communicated to petitioner, they ought to have informed their advocate, petitioner’s advocate and the court when the other writ petition was taken up on 8th July 2024. This only reflects sorry state of affairs in the office of respondents. Because of lack of instructions from the officers of the department, Revenue’s advocates are put in a very embarrassing position. Advocates for respondent revenue rely on instructions from the officers and therefore, it was the duty of officers to give proper and correct instructions before the matter is listed.
The Principal Secretary, Ministry of Revenue, Government of India is directed to have an enquiry instituted against the officer concerned and if there has been a lapse on the part of the officers in not giving timely instructions to their advocates then (a) to take disciplinary action against the concerned officer and (b) advice all its officers to give timely instructions so that such lapses do not recur.
The Principal Commissioner, Gurugram shall file affidavit in reply bringing all facts on record and also give an explanation on lapses noted above and this affidavit shall be filed and copy served on petitioner by 30th August 2024.
Stand over to 9th September 2024.
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2024 (8) TMI 1133
Challenge to action on the part of the Central Board of Indirect Taxes and Customs in issuance of a notification bearing No. 56/2023 dated 28.12.2023 - HELD THAT:- It prima facie appears that the notification bearing No.56/2023 is not in consonance with the provisions of 168(A) of the Central GST Act, 2017. If the said notification cannot stand the scrutiny of law, all consequential actions so taken on the basis of such notification would also fail.
This Court duly takes note of the submission of Mr. S.C Keyal, the learned Standing Counsel that the Petitioner would be entitled to the reliefs as proposed in the Financial Bill 2024. In addition to that, this Court also finds that an examination would be required as regards the applicability of the force majeure in respect to the notification bearing No. 56/2023 taking into account the contents of the Minutes of the 49th Meeting of the GST Council. However for the purpose of deciding the same, this Court is of the opinion that an opportunity has to be granted to the Respondent Authorities to place on record their stand as well as bringing on record the materials on which they claim the applicability of the force majeure.
This Court is of the opinion, that the Petitioner herein is entitled to an interim protection pending the notice. Till the next date, no coercive action shall be taken on the basis of impugned assessment order dated 18.04.2024.
The Respondents are directed to file their affidavits on or before 19.08.2024 - List this matter on 21.08.2024.
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2024 (8) TMI 1132
Time limitation - Rejection of petitioner’s appeal under Section 107 of the Central Goods and Services Tax Act, 2017 - cancellation of petitioner’s GST registration - HELD THAT:- The petitioner has explained that the delay in availing the appellate remedies was on account of certain mitigating circumstances. One Sh. Vinay Parkash Goel, who was the father of one of the Directors and the husband of another Director of the petitioner company expired on 21.04.2023.
The petitioner has been afforded sufficient opportunity to be heard in the proceedings relating to its application for revocation of the impugned cancellation order. And, it is apparent that the petitioner was remiss in not availing the same. However, it is noted that the petitioner was not afforded an opportunity to be heard at the threshold stage as the impugned SCN did not specify the date and time on which the personal hearing was to be scheduled.
It is considered apposite that the petitioner may be granted one more opportunity to satisfy the proper officer that it was in existence at the material time and continues to be in existence - petitioner’s application for revocation before the proper officer is restored - petition disposed off.
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2024 (8) TMI 1131
Time limitation - petitioner had already requested for cancellation of its registration way-back in the year 2020, and the impugned order was passed in December, 2023, thus, same was not in their knowledge - HELD THAT:- It is noticed that the petitioner had been conveyed the order only in April 2024, and therefore, the appeal could have been filed only after April 2024, within the stipulated period of 60 days i.e. the date when the order was communicated to the petitioner.
However, the provision only states that the limitation would count from the date of passing of the order.
The contention of learned counsel for the petitioner is accepted that the petitioner was prevented from filing appeal within time - since there is a provision for filing of appeal, and the said provision necessary implies that the factual aspects shall be examined by the Appellate Authority.
Petition disposed off.
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2024 (8) TMI 1130
Challenge to impugned order - petitioner was unaware of proceedings culminating in the impugned order - mismatch between the GSTR 3B returns of the petitioner and the auto populated GSTR 2A - petitioner agrees to remit 10% of the disputed tax demand as a condition for remand - HELD THAT:- On perusal of the impugned order, it is evident that the tax proposal pertains to the mismatch between the GSTR 3B returns of the petitioner and the auto populated GSTR 2A. It is also evident that the tax proposal was confirmed because the petitioner did not reply to the show cause notice and the personal hearing notices. In effect, the tax proposal was confirmed without considering the objections of the petitioner. In these circumstances, albeit by putting the petitioner on terms, it is just and necessary to provide the petitioner an opportunity to contest the tax demand on merits.
The impugned order dated 18.12.2023 is set aside subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. Within the aforementioned period, the petitioner is also permitted to submit a reply to the show cause notice - Petition disposed off.
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2024 (8) TMI 1129
Maintainability of petition - barred by time limitation or not - HELD THAT:- On a perusal of the impugned orders, it is seen that despite noting the fact that this Court granted liberty to the writ petitioner to file revision petitions under Section 54 of the TNGST Act, 2006, before the Revisional authority within a period of 30 days from date of receipt of a copy of the order in WP.No.23745 to 23748 of 2016, the impugned orders have been passed rejecting the revision petition filed by the petitioner on the ground that the revision petitions filed are barred by limitation.
Admittedly, the Writ Petitioner has filed Revision Petitions in time i.e., within 30 days, as mentioned in the order passed in the aforesaid Writ Petitions and even the petitioner has not been heard before the impugned orders are passed and therefore the same is in violation of principles of natural justice and hence, the order rejecting the revision petitions on the ground of limitation is per se illegal and liable to be set aside.
Petition allowed.
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2024 (8) TMI 1128
Violation of principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax demand on merits - HELD THAT:- On perusal of the petitioner's reply, it is evident that the only documents enclosed with such reply are the GSTR 9, GSTR 9C and income tax documents. As contended by learned Additional Government Pleader, it was incumbent on the petitioner to provide all relevant documents to establish that the services fall within the scope of Section 9(3) of applicable GST enactments read with Notification No.13/2017 - Central Tax (Rate) dated 28.06.2017. Nonetheless, in the reply, the petitioner has asserted categorically that the services provided by him fall within the scope of the above provision and notification - it is just and necessary to provide an opportunity to the petitioner by putting the petitioner on terms.
The impugned order dated 18.12.2023 is set aside subject to the petitioner remitting 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order - petition disposed off.
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2024 (8) TMI 1127
Variation in the term of the letter of acceptance - the concerned Opposite Parties after execution of the work have unilaterally withdrawn the substituted Clause-9 as per letter dated 18.05.2018 - HELD THAT:- The Opposite Parties after the work having already been executed by the Petitioners could not have varied the terms contained in Clause-9 of the letter. The impugned communication dated 06.09.2021 cannot be sustained and is accordingly set aside. The consequences of the quashing of the said communication shall follow.
All actions taken based upon the said communication dated 06.09.2021 are held illegal.
Petition disposed off.
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2024 (8) TMI 1126
Refund claim - Benefit of Tax Deducted at Source [TDS] restricted - as argued AO had failed to take into consideration the total TDS which had been deducted and deposited and the refund thus being computed in light of what had been claimed in the original Return of Income - HELD THAT:- As in cases where a refund becomes due and payable consequent to an order passed in an appeal or other proceedings, the AO is obliged to refund the amount to the assessee without it having to make any claim in that behalf. The reference to Section 239 is thus clearly misconceived. The claim of the petitioner for being accorded credit of the entire TDS as reflected in Form 26AS was thus liable to be accorded recognition along with interest to be computed in accordance with Section 244A of the Act.
Regard must also be had to the fact that the TDS which had been duly deposited becomes liable to be treated as tax duly paid in terms of Section 199 and interest thereon would consequently flow from the first day of April of the relevant AY to the date on which the refund is ultimately granted by virtue of Section 244A (1) (a) of the Act. The contention of the respondents, therefore, that interest would flow only from the date of the order of the Tribunal is thoroughly misconceived.
In the present case the AO was called upon to give effect to a direction framed by the Tribunal. Viewed in that light, the stand as taken by the AO is clearly rendered unsustainable insofar as it restricts the claim of the petitioner to the disclosures made in the Return of Income.
It would be wholly illegal and inequitable for the respondents to give short credit to the tax duly deducted and deposited based on the claim that may be made in a Return of Income. It is pertinent to note that insofar as the question of rights to live feed being treated as royalty is concerned and other allied issues pertaining to the merits of the dispute stand settled right up to this Court by virtue of the judgment rendered by us [2024 (1) TMI 1008 - DELHI HIGH COURT] in ITA 812/2023.
We accordingly allow the instant writ petition and quash the impugned order dated 08 April 2024. A writ shall consequently issue commanding the respondents to acknowledge the credit of TDS as reflected in Form 26AS of the petitioner and to recompute the total refund.
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2024 (8) TMI 1125
Validity of reopening of assessment - invalid Approval u/s 151 to the re-opening u/s 148 - HELD THAT:- As evident that the approval order is bereft of any reasons. It does not even refer to any material that may have weighed in the grant of approval. The mere appending of the word “approved” by the PCCIT while granting approval u/s 151 to the re-opening u/s 148 is not enough.
While the PCCIT is not required to record elaborate reasons, he has to record satisfaction after application of mind. The approval is a safeguard and has to be meaningful and not merely ritualistic or formal.
The reasons are the link between material placed on record and the conclusion reached by the authority in respect of an issue, since they help in discerning the manner in which the conclusion is reached by the concerned authority. Our opinion in this regard is fortified by the decision of the Apex Court in Union of India vs. M.L. Capoor [1973 (9) TMI 99 - SUPREME COURT] The grant of approval by PCCIT in the printed format without any line of reason does not fulfil the requirement of Section 151 of the Act.
PCCIT has failed to satisfactorily record its concurrence. By no stretch of imagination, the mere use of expression “approval” could be considered to be a valid approval as the same does not reflect any independent application of mind.
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