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Showing 381 to 400 of 18020 Records
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2023 (12) TMI 1059
Valuation - addition of scrap value to the assessable value, at which Appellant job worker had cleared the intermediate product to the input supplier cum Principal manufacturer - demand alongwith interest and penalty - HELD THAT:- Order already passed in the Appellant’s own case for its earlier period VISHNU KUMAR RATANLALJI OZA VERSUS COMMISSIONER OF CENTRAL EXCISE, NAGPUR AND M/S. VINAR ISPAT LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NAGPUR [2023 (2) TMI 1232 - CESTAT MUMBAI] holding that money value of the scrap retained by the Appellant does not represent additional consideration for the Appellant and it is not liable to be included in the assessable value of the job worked goods, being cleared on payment of duty to the manufacturer. There is no substantial change of law in the meantime except inclusion of Rule 10(A) which CBEC have clarified vide its Circular dated 31.03.2010 that once goods manufactured by job workers are not sold by the Principal Manufacturer but are consumed by the Principal manufacturer, Provision of Rule 8 of Valuation Rules, 2000 that provides for determination of value on the basis of 110% of the cost of production is required to be adopted, besides the facts that ever since the judgment of P.R. Rolling Mills passed way back in 2010 [2009 (3) TMI 444 - CESTAT, BANGALORE], it has been consistently held by the Judicial Authorities that additional scrap value would not determine the final assessable value.
The order passed by the Commissioner (Appeals) is set aside - appeal allowed.
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2023 (12) TMI 1058
Levy of Central Excise Duty - resin powder reflected in the monthly returns of Allied Resins - resin powder clandestinely cleared - under valuation of stock transferred goods - penalty under Section 11AC of the Central Excise Act, 1944 - penalty under rule 26 Of Central Excise Rules, 2002 read with Section 9(1) of the Central Excise Act, 1944.
Confirmation of duty demand of Rs.61,24,002/- including Education Cess and SHE Cess, relating to unaccounted manufacture and clearance of U F Resin Powder, to Rampur Unit of Allied Resins - HELD THAT:- There is no evidence to substantiate the allegation of clandestine clearance and there is no question of the Appellant being required to pay any duty in respect of the said quantity. Thus, we hold that the demand of duty from the Appellant on the said quantity again is not sustainable. Accordingly, the demand confirmed in the impugned order on this count is liable to be set aside.
Confirmation of duty demand of Rs.22,99,672/- including Education Cess and SHE Cess, relating to clandestinely cleared goods not accounted for in physical stock verification - HELD THAT:- On going through the reconciliation statement submitted by the Appellant, the net shortage of 36.13 MT arrived at by the Appellant is satisfied. Accordingly, the Appellant is liable to pay duty of Rs. 3,02,176/- along with interest on the shortage of 36.13 MT, as worked out by them.
Confirmation of duty demand of Rs. 1,50,540/- relating to under valuation of stock transferred goods - HELD THAT:- The Appellant has not disputed this liability. Accordingly, the confirmation of this demand is upheld.
Levy of penalty of Rs.85,74,214/- on the Appellant under Section 11AC, of the Central Excise Act, 1944 - HELD THAT:- The duty of Rs. 3,02,176/- along with interest has been confirmed on the shortage of 36.13 MT, which the Appellant agrees to pay. It is observed that this shortage has been arrived at by taking the yield of UF Resin Powder produced as 55% of the weight of liquid resin consumed. As there is no evidence available on record to establish clandestine clearance of this quantity of U F Resin Powder, penalty under Section 11AC not imposable on this demand. Also, the demand of duty Rs. 1,50,540/- is related to under valuation of stock transferred goods. The Appellant has not disputed this liability. However, the issue being technical in nature, the intention to evade payment of duty cannot be attributed to this demand. Accordingly, no penalty imposable on this demand.
Levy of penalty of Rs.1,00,000/- on Shri. R K Vijay, CEO under rule 26 Of Central Excise Rules, 2002 read with Section 9(1) of the Central Excise Act, 1944 - HELD THAT:- The allegation of suppression with intent to evade payment of duty has not been substantiated in this case. Also, the department has not brought in any evidence to highlight the role of Appellant No.2 in the commission of the alleged offence. Accordingly, the penalty imposed on him under rule 26 read with section 9(1) of the Central excise act, is not sustainable.
Appeal disposed off.
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2023 (12) TMI 1057
Clandestine removal - demand of differential duty based on difference in the quantity mentioned on the railway receipts and central excise invoices prepared by the Respondent - HELD THAT;- It is observed that there is no evidence brought on record by the department to allege that there has been excess production. There is no evidence available on record regarding excess receipt of corresponding raw materials or there has been excess electricity consumption or other similar variations to establish clandestine manufacture and removal of goods. Thus, it is observed that the demand raised by the department is based merely on assumptions only.
It is observed that the department has not brought in any evidence on record to substantiate the allegation of clandestine clearance. Accordingly, the demand of duty calculated by the department only on the basis of the excess quantity mentioned in the railway receipts, is not sustainable. Thus, there are no infirmity in the OIO passed by the Ld. Commissioner. Accordingly the OIO dated 28.03.2013 passed by the Ld. Commissioner is upheld.
The impugned order passed by the adjudicating authority upheld - appeal of Revenue dismissed.
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2023 (12) TMI 1056
Dishonour of Cheque - punishment to accused with jail sentence which may be extended to two years or with fine which may extend to twice the amount of the cheque or with both - HELD THAT:- It appears that under section 138 of Negotiable Instruments Act, there is a specific provision that court has empowered to punish the accused with jail sentence which may be extended to two years or with fine which may extend to twice the amount of the cheque or with both.
In view of the law laid down by the Hon'ble Apex court in Surinder Singh Deswal [2019 (5) TMI 1626 - SUPREME COURT], the first appellate court is conferred with the power to direct the applicant to deposit such amount pending appeal which shall be minimum 20% of fine or compensation awarded by the trial court.
The impugned order dated 19.1.2023 passed by the first appellate court appears to be just and proper which does not suffer from any illegality or irregularity - this criminal revision petition is accordingly dismissed by affirming the order passed by the first appellate court. The applicant is directed to deposit the said amount before the trial court within a period of one month from the date of receipt of certified copy of this order.
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2023 (12) TMI 1055
Dishonour of Cheque - compounding of offence - CIRP proceedings have been initiated against the Accused company and its directors - whether the present case is an appropriate case where the consent of non-applicant no.2 for compounding the offence, could be ignored? - HELD THAT:- In the present case, the complaint has been filed on 29.03.2018, the summons is said to have been issued in April, 2018. Advocates appeared through counsel. On 11.12.2018 the applicants have filed an application seeking compounding of offence. Demand draft of the entire amount of cheque was also annexed. Strictly speaking, the applicants have not filed the application on 1st or 2nd hearing of the case but have filed the same on third hearing of the case which can be said to be an initial stage. This application has been filed in response to the summons issued by the Court making it clear that if the applicants would make an application for compounding of offence at the first or second hearing of the case, the compounding may be allowed.
The non-applicant no.2, thus, appears to have raised his claim for recovery of the amount on 03.01.2018 before the IRP. Admissible recovery, whether of Rs.3 crores or otherwise, will be considered before the IRP and in terms of the provisions of the IBC Code, 2016. In the circumstances, to not offer consent on the ground that the applicants owe dues to the non-applicant no.2 to the tune of Rs. 3 crores is, in my considered opinion, an abuse of process of law and, therefore, by invoking the jurisdiction u/s 482 of the Code, this attempt will have to be and stands nipped down.
Whether it will be permissible for six accused (the present applicants) out of twelve, to seek compounding of offence? - HELD THAT:- The applicants have referred to the judgment of the Allahabad High Court, in the case of GAGAN PAL SINGH AHUJA AND ORS VERSUS STATE OF U.P. AND ORS. [2023 (5) TMI 1280 - ALLAHABAD HIGH COURT], which was required to consider whether piecemeal compromise and compounding thereof is permissible and it was held that the scope and ambit of Section 482 Cr.P.C. is in much wider than that of Section 320 of Cr.P.C.
The non-applicant is getting adequate compensation. In the circumstances, having given my thoughtful consideration to the attending circumstances, the request to compound the offence will have to be allowed.
The present case appears to be a fit case where powers under Section 482 of the Code must be exercised, considering the peculiar facts and circumstances of the case - criminal application allowed.
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2023 (12) TMI 1054
Provisional attachment of the Bank account u/s 83 of the CGST Act, 2017 - challenge to attachment order on the ground that the condition precedent to initiate proceeding under Chapter XII, XIV and XV of the GST Act is absent in the present case - HELD THAT:- So far as objection of the respondents with regard to maintainability of the writ petition before this Court on the ground of lack of territorial jurisdiction is concerned, is not sustainable since cause of action is a bundle of fact and in the facts and circumstances of the present case, the part of cause of action arose within the territorial jurisdiction of this Court since petitioner’s bank account in Kolkata was attached though may it be by an authority in Guwahati and in view of the fact that petitioner is a registered person in Kolkata and as such writ petition before this Court against the impugned order passed by the authority at Guwahati is maintainable.
So far as challenge by the petitioner the legality and validity of the impugned order of provisional attachment under Section 83 of the Act on the ground of non pendency or initiation of any proceeding against the petitioner is concerned, on reading conjointly Section 1(2), Section 6(1), Section 83, Section 122(1) and Section 122 (1A), Clause (i), (ii), (vii) and (ix) thereunder and judgments, relevant circulars and notification and taking into consideration materials found against the petitioners during investigation, CGST Guwahati authority’s action of attaching the bank account of the petitioner provisionally and the impugned order to this effect is very much legal, valid and within jurisdiction and is not liable to be interfered by this writ Court.
This Writ Petition is dismissed.
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2023 (12) TMI 1053
Rejection of appeal on the ground of being delayed - appeal was beyond even the one month period provided under Section 107 of the BGST Act - HELD THAT:- Aan appeal against an order under Section 73 or 74 has to be filed on or before 31.01.2024, and any appeal filed which is pending before the authority could also be considered as properly filed, even if there is delay in such filing.
In the present case, the appeal was filed and was dismissed by the first Appellate Authority. In such circumstances, it is only proper that the appeal be restored to the files of the Authority subject to the conditions under paragraph no. 3 being satisfied - Hence the petitioner would be entitled to satisfy paragraph no. 3 of the N/N. 53 of 2023- Central Tax, dated 02.11.2023 (S.O. 4767(E)) by paying up the deficient amounts as would be required to maintain the appeal under the notification - The Central Board of Indirect Taxes and Customs has by Notification No. 53 of 2023- Central Tax, dated 02.11.2023 (S.O. 4767(E)) extended the time for filing appeal against an order passed by the Proper Officer on or before 31.03.2023 under Sections 73 and 74 of the BGST Act. This in fact extends the period for filing a delayed appeal beyond the one month period as provided under Section 107(4) of the BGST Act, on following the special procedure prescribed under the said Notification.
The impugned order set aside - petition allowed.
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2023 (12) TMI 1052
Validity of show cause cum demand notices issued under Section 74 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The Respondents are duty-bound to comply with the requirement of Section 67 (5). This Section provides that the person from whose custody any documents are seized shall be entitled to make copies thereof or take extracts therefrom in the presence of an authorised officer at such place and time as such officer may indicate in this behalf except where making such copies or taking such extracts may, in the opinion of the proper officer, prejudicially affect the investigation.
The concerned Respondents are directed to dispose of the Petitioners' representations dated 03.05.2023, and and further representations as request in terms of Section 67 (5) of the said Act. This is because there is prima facie merit in Mr Agni's contention that they should have access to such documents for filing an effective reply/ response to the impugned notices which are now to be treated as show cause notices.
Petition disposed off.
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2023 (12) TMI 1051
Belated claim of Input Tax Credit (ITC) - purchase of Petroleum product - contention of the petitioner is that as per Section 38 of the GST Act read with Rule 60 of the TNGST Rules, the ITC shall be claimed through GSTR-2, GSTN had not provided the facility of GSTR-2 till now.
HELD THAT:- The respondents without giving any opportunity to file the returns by notifying the Form GSTR-2, cannot expect the taxable person to file returns. In fact, the petitioner has no intension to violate the provisions of the Act. In order to show his bonafide, he has filed physically. Moreover, all tax liability is paid and there is no loss to the department. Moreover, the petitioner has also claimed financial crisis. Even though the financial crisis cannot be a ground for not filing the returns in time, not notifying of Form GSTR-2 is clearly a ground to consider the petitioner's claim of belated returns.
The next contention of the petitioner is that the ITC can be claimed through GSTR-3B, but GSTN has not permitted to file GSTR-3B in online if the dealers had not paid taxes on the outward supply / sales. In other words, if the dealer is not enabled to pay output tax, he is not permitted to file GSTR-3B return in online and it is indirectly obstructing the dealer to claim ITC. In the present case the petitioner was unable to pay output taxes and so the GSTN not permitted to file GSTR-3B in the departmental web portal it is constructed that the petitioner had not filed GSTR-3B online, that resulted the dealer unable to claim his ITC in that particular year in which he paid taxes in his purchases. Hence if the GSTN provided option for filing GSTN without payment of tax or incomplete GSTR-3B, the dealer would be eligible for claiming of input tax credit - The petitioner had expressed real practical difficulty. The GST Council may be the appropriate authority but the respondents ought to take steps to rectify the same. Until then the respondents ought to allow the dealers to file returns manually.
This Court is inclined to quash the impugned orders and accordingly the impugned orders are quashed. The respondents shall permit the petitioner to file manual returns whenever the petitioner is claiming ITC on the outward supply / sales without paying taxes - the matter is remitted back to the authorities for reconsideration - Petition allowed.
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2023 (12) TMI 1050
Failure on the part of the respondent to deposit an amount paid by the petitioner towards Goods and Service Tax to the respondent No. 1 - HELD THAT:- It is informed by the learned counsel for the Khopoli Municipal Council that the amount of Rs.38,94,868/- has been deposited in this Court on 6th July 2023 by demand draft. If that be so, what remains is the deposit of the said amount with the GST Authorities, in even proportion as per the requirement of the Central Goods and Services Tax (CGST) Act and also the Maharashtra State Goods and Services Tax (MGST) Act - Registry of this Court accordingly to receive intimation from the learned Advocate for the said Respondents authorities, to furnish bank account details of the concerned jurisdictional authorities so that the said amount can be transferred by this Court. The said compliance would be completed within two weeks from today and on receipt of such information, office to deposit the amount as directed within one week thereafter.
The CGST Authorities and SGST Authorities to consider the Petitioner’s case sympathetically with regard to interest and penalty - Petition disposed off.
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2023 (12) TMI 1049
Classification of supply - Supply of outputs as sale of goods - water sold as 'water including natural or artificial mineral waters and aerated waters, not containing added sugar or sweetening matter, not flavoured (other than drinking water packed in 20 litre bottles) - classified under heading 2201 or not.
Supply of outputs as sale of goods or not - HELD THAT:- From the conjoined reading of section 4 of The Sale of Goods Act, 1930 and the Hon'ble Supreme Court judgement in the case of State of Madras vs Gannon Dunkerley & Co.,(Madras) [1958 (4) TMI 42 - SUPREME COURT], it is clear that the modus of operation as purchase of effluent and sale of output is applicable only if all the elements cited in the Section and judgement cited are present. If that is the case, then the classification of supply of treated water, salt and other products, as sale of goods is correct - However, it is emphasized that the mode of operation intended by the applicant i.e. purchase of raw effluent, treating the same and selling the resultant products, can be classified as sale of goods, if and only if, the applicant follows the procedures envisaged in the Sale of Goods Act and rationale of the observations of Hon'ble Supreme Court. If such is the case, the proposed mode of purchase of raw effluent, treat it on own account and supply of output, can be treated as sale of goods and consequently the first question is answered in the affirmative.
Whether the classification of water sold as 'water including natural or artificial mineral waters and aerated waters, not containing added sugar or sweetening matter, not flavoured (other than drinking water packed in 20 litre bottles) under heading 2201 is correct? - HELD THAT:- Water grouped under the heading 22.01 is ordinary water whether or not clarified or purified. And this heading specifically excludes distilled or conductivity water and water of similar purity which are classified in heading 28.53. Therefore, it is amply clear that, water recovered out of the effluent treatment process nothing but an ordinary water which is suitable for reuse by the dyeing and bleaching units as a solvent and as a washing, rinsing medium. Thus, it aptly fits into Sl. No. 99 of Notification No. 02/2017, CT (Rate), dt.28.06.2017 under the heading 2201 rather than Sl.No.24 of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 under the same heading 2201 - As per Circular No. 179/11/2022, dated 03.08.2022, issued by Ministry of Finance, regarding applicability of GST on various goods and services, it has been clarified that treated sewage water attracts Nil rate of tax.
The ultimate intention behind the effluent treatment process is to treat the effluent water discharged by textile units to recover water, salt and other chemicals consumed during the course of dyeing and bleaching to the maximum extent possible so as to reuse the same without getting it discharged to pollute water bodies. Moreover, ZLD has been mandated by the TNPCB for all the highly polluting industries including Textile Dyeing and Bleaching industries in order to prevent pollution of River water and ground water. Therefore, it is evident that the common effluent treatment plant has been set up in order to comply with the legislative and environment regulations thereby conserving water through recovery and reuse and not to manufacture water or chemicals - effluent treated water is eligible for exemption as per Notification No. 2/2017- Central Tax Rate as amended vide notification No.7/2022-Central Tax (Rate), dated the 13th July, 2022.
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2023 (12) TMI 1048
Validity of revision u/s 263 - Allowability of Maintenance expenses and depreciation - Validity of order passed u/s 143(3) by AO confirmed by ITAT and setting aside revisional order of the Commissioner on the question of disallowability maintenance expenses and depreciation - HELD THAT:- Assessee is engaged in business of chartering flights and had derived chartering income which evidences the business nexus of use of aircrafts owned by the respondent/assessee. This being the finding of fact and not disputed by the revenue even before us, it can be safely concluded that the aircrafts were utilised for business purpose.
Even if officers of the assessee i.e. directors have used the aircrafts for business meetings in different locations, it cannot be said to be a personal use. The assessee is a company and thus an artificial juristic person. Therefore, even if directors on some occasion have been allowed to use the aircrafts for their personal use, neither the expenses incurred in maintenance of the aircrafts nor the depreciation of the aircrafts can be disallowed, inasmuch as then, at the best, the value of use of the aircrafts on such occasion is perquisite in the hands of the user. On that account, neither depreciation nor maintenance can be disallowed, even partially.
Tribunal has found that the aircrafts have been used for chartering business. Substantial receipts from chartering business has been shown by the assessee. Therefore, the view taken by the Tribunal in the impugned order, does not suffer from any error of law. Hence, the substantial question of law No.(i) is answered against the revenue and in favour of the assessee.
Since the revenue/appellant themselves have conceded on the question of admissibility of the maintenance expenses and depreciation of the aircrafts, in full, in the matter of the present assessee in other assessment years, therefore, the revenue cannot be allowed to take a contrary stand in the present appeal. Therefore, for this reason also, the afore-quoted substantial question of law is answered in the manner as afore-stated i.e. against the revenue and in favour of the assessee.
Deduction of lease rent for vehicle obtained on lease by the Assessee permitted - Relying upon the judgment of IM/S ICDS. LTD. VERSUS COMMISSIONER OF INCOME TAX. MYSORE & ANR. [2013 (1) TMI 344 - SUPREME COURT] and Rajshree Roadways v. Union of India & Ors. [2003 (3) TMI 50 - RAJASTHAN HIGH COURT] Tribunal held that the issue of lease rent is covered by the aforesaid judgment of the Hon’ble Supreme Court and hence the order passed by the Assessing Officer by taking one possible view, cannot be termed as ‘erroneous’ warranting initiation of revision proceedings under Section 263 of the Act, 1961. The Tribunal also found that in own case of the respondent/assessee for the assessment year 2011-12, the issue was accepted by the revenue, pursuant to the directions of the DRP.
The impugned order of the Tribunal on the point of lease rent cannot be said to suffer from any illegality. Hence, the substantial question of law no. (ii), is answered against the revenue and in favour of the assessee.
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2023 (12) TMI 1047
Income from business u/s 28(iv) - Valuation of shares on scheme of amalgamation - actual market and/or valuation of the Shares of the transferee company being more than face value, the differential valuation of such shares issued representing the value of the net identifiable assets accruing to the transferee constitutes a profit and/or taxable benefit accruing to the transferee company within the meaning of Section 28(iv) - HELD THAT:- To invoke Section 28(iv) of the Act 1961, the necessary requirement is that firstly there should be a benefit and secondly the benefit should arise from business. In the present set of facts, there was neither any benefit nor any benefit arising from business to attract Section 28(iv) of the Act 1961. Under the circumstances, Section 28(iv) of the Act 1961 has no application at all, on the present set of facts. The findings recorded by the Tribunal are findings of fact based on consideration of relevant evidences on record. The findings recorded by the Tribunal do not suffer from any illegality or perversity.
No merit in this appeal. The substantial question of law answered against the revenue and in favour of the assessee.
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2023 (12) TMI 1046
Reopening of assessment u/s 147 - period of limitation - Unexplained deposits - HELD THAT:- An order u/s 148A (d) of the Act of 1961 had been passed and a notice under Section 148 of the Act of 1961 was issued as against the appellant.
The impugned order dated July 28, 2022 had been passed u/s 148A (d) of the Act of 1961 and relates to the Assessment Year 2015-2016. The issue of limitation has been dealt with in the impugned order. It has been held that the case of the appellant would fall under definition of asset as laid down under the provision of Clause b of Section 149 (1) of the Act of 1961.
The impugned order has found that, for the relevant financial year a sum had been deposited with ICICI bank by the appellant in his account and that the appellant had failed to produce any supporting documentary evidence to explain such deposit. Such deposit has not been reflected in the relevant assessment year. Therefore, by the impugned order, the authorities had come to a finding that, there was an escapement of income tax chargeable to tax for the relevant assessment year. Consequently, the authorities, by the impugned order have decided that it was a fit case to issue a notice u/s 148 of the Act of 1961 for the relevant assessment year.
Issue of limitation had been taken by the appellant before the authorities. Appellant had also taken the point of limitation and contended that the authorities wrongly assumed jurisdiction by deciding the issue of limitation erroneously before the learned Single Judge. Contention of the appellant with regard to lack of jurisdiction has revolved around the new regime of limitation that had been introduced with effect from April 1, 2021 by the substituted provisions of Sections 147 to 151 particularly Section 149 of the Act of 1961 by the Finance Act, 2021.
In the facts of this case, the appellant had suffered a notice under Section 148 of the Act of 1961 on April 30, 2021. Such notice had been set aside by the High Court on February 22, 2022. The appellant and the department are governed by the directions of Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] which had issued directions relating to all notices issued under Section 148 after April 1, 2021. The department by a letter dated May 23, 2022 had provided the materials based on which the proceedings had been initiated. To that the appellant had submitted a response dated June 5, 2022. The impugned order dated July 28, 2022 passed under Section 148A (d) of the Act of 1961 had dealt with the response of the appellant dated June 5, 2022 in extensor. In fact, the impugned order dated July 28, 2022 of the Authorities had set out the entirety of the response of the appellant dated June 5, 2022 in its body and arrived at the finding that, the reply given was not tenable. The impugned order has also ascribed reasons why the reply of the appellant was not found to be tenable.
The impugned order of the authorities under Section 148A (d) of the Act of 1961 cannot be said to be vitiated by breach of principles of natural justice. The appellant had been heard before passing of the order. Appellant had submitted a response to the show-cause notice and filed written submissions which were considered by the Authorities. The impugned order, as noted above, cannot be said to without reasons for arrival at the decision recorded.
Learned Single Judge has exercised discretion not to entertain the writ petition. Learned Single Judge has proceeded to hold that there was no violation of the principles of natural justice or that there was any procedural defect in arriving at the impugned decision dated July 20, 2022 of the Authorities - No ground to interfere in the appeal
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2023 (12) TMI 1045
Payment of interest u/s 244A to the deductor on the refund of tax made u/s 240 - Failure to release the undisputed refund due and determined by respondents themselves in the intimation/order issued u/s 168(1) - stand of the Revenue is interest is not provided for refund of amounts deposited under the equalisation levy and, therefore, the question of payment of any interest does not arise - HELD THAT:- In Tata Chemicals Ltd. [2014 (3) TMI 610 - SUPREME COURT] Apex Court also held that refund due and payable to the assessee is debt owed and payable by the Revenue. The Government, there being no express statutory provision for payment of interest on the refund of excess amount/tax collected by the Revenue, cannot shrug off its apparent obligation to reimburse the deductors lawful monies with the accrued interest for the period of undue retention of such monies. The State having received the money without right, and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. Whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course
In the present case, it is not in doubt that petitioner was entitled to refund of Rs. 4,23,60,940/- because the amount has been paid after the petition was filed. Since the excess amount has been paid over by petitioner on various dates during Financial Year 2017-2018, in our view, the refund ought to have been processed and paid latest by 31st July 2018.
The interest, therefore, of course, will become payable from 1st April 2018 if we apply the principles prescribed in Section 244A of the Act. The amount, as noted earlier, has been paid only on 21st August 2023. Consequently, we are of the view that petitioner is entitled to interest on this amount of Rs. 4,23,60,940/- from 1st April 2018 upto 21st August 2023 at the rate of 6% p.a. which is the rate prescribed under Section 244A of the Act.
Since we have awarded simple interest at 6%, we are not granting any cost in this case. This order shall be given effect to and the interest shall be paid over on or before 15th February 2024 - If not paid, with effect from 16th February 2024, the rate of interest payable will be at 9% p.a. until the date of payment. This will be in addition to other proceedings to hold the department and concerned officers to be in willful disobedience of the orders passed by this Court. The difference of 3% (9% - 6%) will be recovered from the Officer who will be responsible to have the interest paid.
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2023 (12) TMI 1044
Penalty u/s 271(1)(c) - undisclosed royalty receipts - assessee earned revenues from two streams i.e. web hosting and domain registration charges and offered revenue from web hosting services to tax in the return filed for the relevant AYs. However, the assessee did not offer to tax its income from domain registration services for the reason that it was under a bonafide belief that this income is not chargeable to tax under the provisions of the Act.
HELD THAT:- Tribunal was of the view that the issue involved in the appeal was debatable. As would be evident, in this behalf, the Tribunal had also taken recourse to the fact that the quantum appeal was pending in this court.
Concededly, the quantum appeals were filed by the respondent/assessee with this court for the AY in issue, i.e., AY 2013-14 and other AYs as well. The other AYs qua which the appeals were filed, as noticed above, were AY 2014-15 and AY 2015-16.
Insofar as these appeals were concerned, the question of law, as framed, was answered in favour of the respondent/assessee and against the appellant/revenue, although, as noticed above, the respondent/assessee had preferred appeals before this court.
The question of law which was framed and answered by this court in [2023 (12) TMI 718 - DELHI HIGH COURT] decided issue in favour of assessee. Thus the penalty imposed in the instant appeal cannot be sustained.
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2023 (12) TMI 1043
Penalty levied u/s 271(1)(c) - undisclosed income taxable as "royalty" - assessee earned revenues from two streams i.e. web hosting and domain registration charges and offered revenue from web hosting services to tax in the return filed for the relevant AYs but did not offer to tax its income from domain registration services for the reason that it was under a bonafide belief that this income is not chargeable to tax - HELD THAT:- Insofar as these appeals were concerned, the question of law, as framed, was answered in favour of the respondent/assessee and against the appellant/revenue by this Court in [2023 (12) TMI 718 - DELHI HIGH COURT] reads as follows:
“Whether on the facts of the case and in law, the Income Tax Appellate Tribunal [in short, “Tribunal”] erred in holding that the income received by the appellant as a consideration for providing domain name registration services amounted to „royalty‟ under Section 9(1)(vi) of the Income Tax Act, 1961 ?”
Given the position that the respondent/assessee before us has succeeded in the aforementioned appeals, the penalty imposed in the instant appeal cannot be sustained. Therefore, the impugned order, in our opinion, requires no interference.
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2023 (12) TMI 1042
GP estimation - AO has determined the GP rate at 6% as against the disclosed GP rate of 4.6%, which was reduced by the CIT(A) to 5% - ITAT has further reduced it and made an ad hoc addition of Rs. 4,00,000/- to the Gross Profit - HELD THAT:- No reason whatsoever has been assigned by the Tribunal to sustain the addition of Rs. 4,00,000/- in the GP rate of the assessee. Under the circumstances, the finding of the ITAT that ad hoc addition of Rs. 4,00,000/- to the disclosed GP rate of the assessee would be reasonable and fair, is based on no material. Even the Tribunal has not recorded any finding based on any material so as to disbelieve the GP rate disclosed by the assessee. Under the circumstances, the ad hoc addition made by the Tribunal to the GP of the assessee is wholly arbitrary and based on no evidence, consequently, it cannot be sustained. Therefore, the substantial question of law no. (i) is answered in favour of the assessee and against the revenue.
Addition u/s 68 - transaction of sale of jewellery out of receipt of gift of jewellery - HELD THAT:- The opinion of the Assessing Officer for not accepting the explanation offered by the assessee as not satisfactory is necessarily required to be based on proper appreciation of material and other attending circumstances available on record. The Assessing Officer has to form his opinion objectively with reference to the materials available on record and not merely on surmises and conjecture. Application of mind is a sine qua non for framing the opinion of the Assessing Officer. Since in the present set of facts the assessee has offered proper explanation based on documentary evidences and the evidences so filed by the assessee were not found to be in-genuine or fake, therefore, genuineness of the sale transaction of jewellery by the assessee could neither be disputed nor Section 68 could be invoked to make addition in the income of the assessee. The legal proposition with respect to applicability of Section 68 has also been settled by the Hon’ble Supreme Court in Commissioner of Income Tax Vs. P. Mohanakala[2007 (5) TMI 192 - SUPREME COURT] which also helps the assessee in the present set of facts. Therefore, the addition of Rs. 9,00,000/- upheld by the Tribunal cannot be sustained. Decided against the revenue.
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2023 (12) TMI 1041
Addition u/s 68 - onus to prove - ITAT sustained addition - HELD THAT:- Tribunal correctly concluded that once unexplained credit was found in the books of accounts, the initial onus under Section 68 of the Act lay on the assessee.
Tribunal held that there was no material except the assertion of the appellant/assessee that he was merely an entry provider and, therefore, only the amount received as commission ought to have been added to his income.
Appellant made a valiant attempt to defend the position of the appellant/assessee by submitting that the appellant/assessee could not assist the AO in unravelling the truth, since Mr Dinesh Prasad had expired immediately after the assessment order was passed in the first round.
Having regard to the record and the approach adopted by the Tribunal, we are unable to persuade ourselves that this is a fit case for interfering with the impugned order. No substantial question of law arises for our consideration.
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2023 (12) TMI 1040
Sham collaboration agreement - addition made after adjustments towards technical expertise and brand value - addition made by the AO is the collaboration agreement as executed between the assessee and an entity named, MGF Development Ltd. - collaboration agreement entered into between the assessee and MGF cast several obligations upon the latter, which included providing and securing funds, bank guarantee and technical expertise for the integrated hotel project and assessee was required to pay 60% of the revenue earned from the transfer/sale of the integrated hotel project to MGF.
Tribunal’s view that the contention of revenue that the collaboration agreement represented a sham transaction was not established and consideration for sharing the revenue was provided by MGF in the form of funds, technical support/assistance for execution of the project and the benefit of its brand value that had been acquired perhaps over the year - HELD THAT:- Tribunal as concluded that the obligation cast on the respondent/assessee to share the revenue from the project represented commercial expediency. In a nutshell, the Tribunal applied the well-established principle that the AO could not have put itself in “the armchair of the businessman” and decide what amount would pass as a reasonable expenditure, vis-à-vis the subject project.
In our view, having regard to the findings of facts returned both by the CIT(A) and the Tribunal, no interference is called for. As was correctly concluded by the Tribunal, the amount received by MGF had been offered for tax and quite clearly, addition in that regard could not have been made in the hands of the respondent/assessee, once the remittance had been accepted in the hands of MGF. In a manner of speech, in our view, what is sauce for the goose is also sauce for the gander. No substantial question of law arises for our consideration.
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