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2023 (12) TMI 1357
Seeking grant of regular bail - application under Section 439 of the Code of Criminal Procedure, 1973 (CrPC) read with Section 36A(3) of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) - right to be searched in the presence of a Gazetted Officer or a Magistrate - non-compliance of Section 50 of the NDPS Act.
HELD THAT:- The contention of learned APP for the State that the question of being search in the presence of the ‘nearest’ Gazetted Officer or Magistrate would arise only if the accused had exercised his option in terms of Section 50 of the NDPS Act, is not tenable.
The right of the accused, as contained in Section 50 of the NDPS Act is mandatory in nature and the same has been emphasized time and again in the various judicial precedents. The co-ordinate bench of this Court, in MOHD. JABIR VERSUS STATE OF NCT OF DELHI [2023 (3) TMI 1529 - DELHI HIGH COURT], has taken note that the word ‘nearest’ has been used in the statute with a certain intention.
The relevance of a notice under Section 50 of the NDPS Act and its mandatory compliance was clearly spelt out by the Hon’ble Supreme Court in State of Punjab v. Balbir Singh [1994 (3) TMI 173 - SUPREME COURT], wherein it was held that 'When such is the importance of a right given to an accused person in custody in general, the right by way of safeguard conferred under Section 50 in the context is all the more important and valuable. Therefore it is to be taken as an imperative requirement on the part of the officer intending to search to inform the person to be searched of his right that if he so chooses, he will be searched in the presence of a Gazetted Officer or a Magistrate. Thus the provisions of Section 50 are mandatory.'.
A perusal of the notice reflects that the word ‘nearest’ does not find any mention as stated hereinabove. The said word is in the language of the section itself. The raiding officer in the present case ought to have given the said option to the applicant. This Court is in agreement that the judgment of co-ordinate bench in Mohd. Jabir to the effect that the word ‘nearest’ has been used in the statute with a certain intention and cannot be ignored by the concerned Investigating Officer at the time of giving notice under Section 50 of the NDPS Act.
As per nominal roll dated 10.05.2023, the applicant has been in judicial custody for 01 year 05 months and 28 days. The investigation in the present case is complete, the chargesheet stands filed and the trial is underway. No useful purpose will be served by keeping the applicant in judicial custody any further.
The applicant is admitted to bail upon his furnishing a personal bond in the sum of Rs. 50,000/- alongwith two sureties of like amount to the satisfaction of the learned Trial Court/Link Court, further subject to fulfilment of conditions imposed - the present application is allowed.
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2023 (12) TMI 1356
Conditional stay order - petitioner has been directed to pay of 20% of the total tax demand raised - Not only the conditional stay on payment of 20% has been granted but the petitioner has also been given facility of payment of 20% in seven equal installments.
HELD THAT:- Petitioner has submitted that the assessment orders after survey under Section 133A of the Income Tax Act had been finalized merely on the basis of the statements of the Director and Managing Director who had retracted later on. This submission does not appear to be correct.
The assessment order would disclose that not only the statements of the Director and Managing Director were taken into consideration but the other incriminating material including the excel sheets and digital datas maintained in the computers and laptops had also been examined before adding the undisclosed income to the returned income of the petitioner. Therefore, no much substance in the present writ petition that the merit of the assessment orders have not been considered while passing the impugned Ext.P5 order granting conditional stay.
The present writ petition is dismissed. The petitioner was granted time to pay the first instalment on or before 25.09.2023, the said time is extended to 30.12.2023 and the last and final installment has to be paid on or before 30.06.2024. Needless to say that the observation made herein will not prejudice the appellate authority to consider the case of the petitioner on merit.
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2023 (12) TMI 1355
Money Laundering - proceeds of crime - provisional attachment order - mis-joinder of parties in the proceedings before the Adjudicating Authority - non-compliance of section 8(1) of PMLA 2002 - Jurisdiction and power of the Adjudicating Authority.
Mis-joinder of parties - HELD THAT:- The proceeds of crime was under the possession and control of the Official Liquidator, but he was not given an opportunity of hearing despite the mandate under section 5(1) of the Act. There are no mandate under section 5(1) that before attachment of the property, the Official Liquidator was required to be heard by the Adjudicating Authority. The provision for hearing is given under section 8(1) of the Act. Section 5(1) provides for attachment against "any person" in possession of proceeds. At the relevant time defendant was in possession of the proceeds. The Competent Authority passed the order of attachment was not having information that an Official Liquidator has been appointed. The information was given only to the Adjudicating Authority - the argument in reference to section 5(1) of the Act of 2002 alleging mis-joinder of parties is not made out. The facts available on records shows a serious allegation against the accused for inviting investments on higher rate of interest and then investors were denied interest and refund of amount. Thus, the accused had cheated the investors.
The apprehensions of the respondent was that proceeds of crime or the property of equivalent value of the proceeds of crime may be transferred or alienated, thus the attachment of the property was made. In view of the aforesaid, ground of misjoinder in reference of section 5(1) is not made out.
Non compliance of section 8(1) of the Act of 2002 - HELD THAT:- As per section 8(1), the Adjudicating Authority remain under obligation to have reasons to believe that any person has committed an offence under section 3 of the Act of 2002 or is in possession of proceeds of crime then to serve a notice of not less than thirty days calling up the person to indicate the source of income, earning or assets out of which he has acquired the property attached under section 5(1) of the Act - The Adjudicating Authority found and recorded reasons to believe that defendant have committed offence under section 3 of the Act of 2002 and accordingly all those persons were given an opportunity of hearing. It is not that Official Liquidator has made an application to provide an opportunity of hearing and has been denied. Rather, it is found that M/s Birla Surya Limited remain unrepresented and it is they who were relevant party to inform about the appointment of Official Liquidator - section 8(1) mandate a notice to a person committed an offence under section 3 of the Act and defendants were alleged to have committed offence and for possession of proceed, it could have been either M/s Birla Surya Limited or the Official Liquidator and not the appellant. It is not that the hearing under section 8(1) is to be given only to a person in possession of proceeds of crime, but also to a person committed the offence under section 3 of the Act and accordingly all the defendants before the Adjudicating Authority, having an allegation for commission of offence under section 3 of the Act of 2002 were necessary party and provided an opportunity of hearing.
The Official Liquidator never came forward to seek an opportunity of hearing and otherwise the appellant said to be not in possession of proceeds of crime cannot make an issue when they alleged to have committed an offence under section 3 of the Act of 2002 and were provided opportunity of hearing. - there are no violation of section 8(1) of the Act of 2002.
Power and jurisdiction of Adjudicating Authority under Sections 8(2) and 8(3) of the Act - HELD THAT:- It is not correct to state that the final conclusions about commission of offence has been drawn by the Adjudicating Authority. The Adjudicating Authority is under obligation to record a finding that properties are involved in money laundering. To find out that a case of money laundering is made out, essentially a prima facie opinion has to be drawn about commission of offence. Otherwise, the question may be raised for formation of opinion of money laundering without an offence - no illegality has been committed by the Adjudicating Authority to record a prima facie opinion about the commission of offence which may generate the proceeds of crime and if laundered, then an offence under section 3 of the Act of 2002. It is however made clear that the prima facie opinion of Adjudicating Authority is not conclusive, rather it would be recorded by the Special Court in criminal case and accordingly the issue is clarified to the extent - there are no reasons to cause interference in the impugned order.
The appeals are disposed of.
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2023 (12) TMI 1354
Money Laundering - obtaining huge loans from financial institutions with outstanding liabilities - siphoning off of funds - reasons to believe - search and seizure conducted under Section 17 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- The reason for search and seizure is to be based on the information that person has committed an act of money laundering or is in possession of proceeds of crime involved therein and so on. The authorized officers then enter and search any building, place and vessel etc. and seize the records and the property etc. The authorized officer may even examine a person on oath which is found to in control of any record or property relevant to the case. The retention of the property would not be beyond a period of 180 days from the date of seizure and freezing. Its continuance would be subject to confirmation of retention by the Adjudicating Authority within the period given above and unless the Adjudicating Authority permits retention of property and documents etc. beyond the period of 180 days, it would be returned to the person concern.
The show cause notice otherwise discloses all the relevant materials to seek retention of the seized material. In the instant case, ECIR was recorded in the year 2019 itself and the search was conducted in the year 2023. The relevant documents are now part of the show cause notice. In the background aforesaid, we do not find that any prejudice is caused to the Appellant on non-service of the copy of the reasons to belief recorded in writing for search and seizure under Section 17(1) of the Act of 2002.
In case of J. Sekar v/s. Union of India & Ors. [2018 (1) TMI 535 - DELHI HIGH COURT], the Division Bench of Delhi High Court has not addressed the issue in reference to Section 17(1) of the Act of 2002 but was in reference in Section 5(1) of the Act of 2002. The provisions may be similar but purpose of the proceedings under two provisions are altogether different. One pertains to the attachment of the property till conclusion of the trial, if the attachment order is confirmed by the Adjudicating Authority. The retention of the documents or property would remain for the period given by the Adjudicating Authority and infact if the investigation is completed followed by the prosecution complaint, justification of retention of documents subsequent to it may require to be addressed by the Adjudicating Authority on merits. It is looking to the facts that if the materials seized became part of the prosecution complaint with a copy thereupon to the Appellant then an appropriate order can be passed by the Adjudicating Authority.
It is not found that copy of reason to believe under Section 20 and 21 of the Act of 2002 was prayed before the Adjudicating Authority thus prayer for it cannot be made for the first time in the Appeal.
There are no reason to cause interference in the impugned order - appeal dismissed.
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2023 (12) TMI 1353
Rejection of revision application on the ground of non-compliance of the order of pre-deposit - whether the Tribunal was justified in directing the petitioner to predeposit the outstanding tax amount in the revisional proceedings filed under Section 75 of the Gujarat Value Added Tax Act, 2003? - HELD THAT:- On conjoint reading of the provisions of the GVAT Act, it is clear that the provisions of Section 75 of the GVAT Act would be applicable in case of an application made to the Tribunal against an order of the Commissioner, not being an order passed under sub-section (2) of Section 73 of the GVAT Act in second appeal under Clause (a) of sub-section (1) of Section 75 of the GVAT Act. Therefore, it is clear that any application made to the Tribunal under Section 75(1)(b) of the GVAT Act would be an application challenging the order against which no appeal is filed under Section 73 of the GVAT Act, which is not an appealable under Section 74 of the GVAT Act as well as no application before the Tribunal could be filed against any order passed by the Commissioner under Section 75(1)(a) of the GVAT Act.
On bare perusal of Section 75 of the GVAT Act, it does not provide for passing any order of pre-deposit as it is provided under Section 73(4) of the GVAT Act. Therefore, the impugned order of the Tribunal dated 21st March 2023 is beyond the scope of Section 75 of the GVAT Act insisting for pre-deposit to entertain the revision applications filed by the petitioner.
The impugned order dated 21st March 2023 passed by the Tribunal, being contrary to the provisions under Section 75 of the GVAT Act, is hereby quashed and set aside - Petition allowed.
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2023 (12) TMI 1352
Service of notice - HELD THAT:- Court notice be issued to the standing/nominated counsel for the State, who will obtain instructions and enter appearance - In case deposit in terms of interim order dated 16.01.2023 is not made, the respondents/authorities will proceed to enforce and execute the impugned judgment.
The Haryana State Pollution Control Board and the concerned authorities for the State of Haryana will carry out site inspection and ensure that no mining activities are being carried. Photographs of the site can be taken and filed. If required, satellite images will also be filed.
Re-list in the month of February 2024.
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2023 (12) TMI 1351
Belated remittance of employees contribution to PF/ESI - Case of the assessee is that belated remittance of employees contribution to PF/ESI would also not to be taxable having regard to sec. 43B provided the same has been paid before the due date of filing of return u/s 139 and aforesaid disallowance is not called for and assessee, prayed for remitting the matter to the file of ld.AO for fresh adjudication
HELD THAT:- We do not find any serious objection to this effect from the ld.DR as against the contention made by the assesee before the authorities below and before us too.
Thus, we find merit in the submission and case made out by the assesee. In that view of the matter, we under the present facts and circumstances of the case find it fit and proper to remit the issue to the file of the ld.AO to consider the details as provided by the assessee as summarized hereinabove and to pass speaking order in favour of the assesee after giving an opportunity of being heard to the assessee and to adduce evidence at the time of hearing the appeal before the ld.AO. Appeal of the assessee is allowed for statistical purposes.
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2023 (12) TMI 1350
Rejection of registration application u/s. 12AB - form filed by the assessee i.e form 10AB rather than form No. 10A - HELD THAT:- We noted that the ld. CIT( E) simpliciter rejected the assessee’s application for registration only on the issue that assessee has not furnished form No. 10AC/10AD and the present application u/s. 10AB of the Act was filed u/s. 12A(1) (ac)(iv) of the Act seeking registration is not maintainable and hence rejected.
We are of the view that assessee has not filed application in form 10A and filed form no. 10AB of the Act which is merely a technical breach which can be cured by allowing the assessee to file application in form 10A of the Act alongwith other details. Hence, we set aside the appeal and the matter is remitted back to the file of the ld. CIT (E) who will allow assessee to file application in form No. 10A along with other required details and the ld. CIT (E) will examine entire aspect relating to registration u/s. 12AB of the Act as well as u/s. 80G of the Act and then will decide the appeal accordingly - Appeal of the assessee allowed for statistical purpose.
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2023 (12) TMI 1349
Seeking grant of Regular bail - Money Laundering - bail sought on medical grounds - applicant have argued that the applicant herein is 'sick' and 'infirm', and thus, should be granted regular bail in the present ECIR - twin conditions u/s 45 of PMLA satisfied or not - it was held by High Court that 'this Court is of the opinion that the applicant is not suffering from any life threatening condition or sickness or infirmity which involves danger to his life and for which treatment cannot be provided to the applicant in jail' - HELD THAT:- It is not required to interfere with the impugned judgment and hence, the special leave petition is dismissed.
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2023 (12) TMI 1348
Unexplained cash deposits - Addition u/s 68 - cash sales made before demonetization which was deposited in the bank account as alleged unexplained amount cash sales to unverifiable persons - HELD THAT:- For Cash receipts from the customers and against which delivery of vehicle was made to them cash is generated out of the stock already on record and thus the sales made by the assessee company is genuine sales recorded in the books of account. All the details required to prove the sales made by the assessee were provided in the assessment proceedings.
Now on the part of the receipt of the cash from the customer the jurisdiction high court judgement in the case of Smt. Harshil Chordia [2006 (11) TMI 117 - RAJASTHAN HIGH COURT] held that So far as question No. 2 is concerned, apparently when the Tribunal has found as a fact that the assessee was receiving money from the customers in hands against the payment on delivery of the vehicles on receipt from the dealer the question of such amount standing in the books of account of the assessee would not attract section 68 because the cash deposits becomes self-explanatory and such amounts were received by the assessee from the customers against which the delivery of the vehicle was made to the customers. The question of sustaining the addition would not arise.
We, therefore, hold that no addition was required to be made nwhich was found to be the cash receipts from the customers and against which delivery of vehicle was made to them.
When the revenue partly considered the sales on the same invoice for an amount of Rs. 16,00,000/- why not on the balance. Thus, the facts of the case are different considering the finding recorded here in above. Therefore, the contention of the revenue based on the facts and circumstance of the case is not accepted and we direct to delete the addition - Decided in favour of assessee.
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2023 (12) TMI 1347
Money Laundering - illegal mining and transportation of stones from Sahebganj and illegal activities were carried out under political and administrative patronage - HELD THAT:- It is difficult to be persuaded by the argument on behalf of petitioner that the mandate of directions given in Pankaj Bansal [2023 (10) TMI 175 - SUPREME COURT] was intended to have retrospective operation. The plain reading of para 35 of the said order and the use of word ‘henceforth’, can only mean that that direction of the Hon’ble Supreme Court was prospective and not retrospective in nature. Furthermore, if the suggested interpretation of the expression ‘henceforth’ is accepted, it will amount to review all the arrest so far made under Section 19(1) of PMLA.
Be that as it may, there are factors from which an inference can be drawn that rigors of Section 45 PMLA Act will not apply in the present case. The petitioner was not named in the earlier two prosecution complaints submitted by E.D. and his name has transpired in the 3rd supplementary prosecution complaint. The F.I.R. which has been lodged under Sections 279 and 304A, read with Section 120B of the IPC, will have no bearing on the present case.
The above named petitioner is directed to be released on bail on furnishing bail bond of Rs. 1,00,000/-(One Lakh) with two sureties of the like amount each to the satisfaction of the Court below, subject to the condition that one of the bailor shall be an income tax payee - Petition allowed.
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2023 (12) TMI 1346
Denial of exemption u/s 11/12 - audit-report (Form No. 10B) was filed after filing of return of income but before processing u/s 143(1) - HELD THAT:- In view of settled judicial rulings noted in foregoing paragraphs as in Indian Panel Board Manufacturer [2023 (3) TMI 1374 - GUJARAT HIGH COURT] we find that the assessee can’t be denied the benefit of exemption u/s 11/12 as claimed in return of income for mere delay in filing of audit-report (Form No. 10B), when the assessee has in fact filed such report though after filing of return. We, therefore, deem it fit to remand this matter back to the file of AO for a fresh assessment after considering audit-report (Form No. 10B) filed by assessee. The assessee succeeds in this appeal.
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2023 (12) TMI 1345
Classification of service - packing cement and loading the same in the wagons and in the trucks - to be classified as Manpower Services or as Cargo Handling Services? - extended period of limitation - suppression of facts or not.
Classification of service - HELD THAT:- The Appellant has been given a contract for packing, loading, unloading of the cement bags for which they were providing manpower services.
On an identical issue in the case of CCE, Bhopal Vs. Jagat Enterprises [2015 (11) TMI 970 - CESTAT NEW DELHI], the Hon’ble Delhi Tribunal has held that 'the Revenue has not given any reason as to why the impugned services were classifiable under “Cargo Handling Services” before 16-6-2005 and as manpower recruitment from 16-6-2005. The admitted fact is that the services remain same and there is no reason for different service tax treatment for different period. Considering the detailed discussions and findings in the impugned order we find no reason to interfere with the same.'
The facts in the present case are identical. Therefore, there are no necessity to take a different view - the Appeals allowed on merits.
Extended period of limitation - suppression of facts or not - HELD THAT:- First of all, in the first SCN, no specific about suppression has been brought in by the Department. Further, while issuing the second SCN, the Department was barred from invoking the extended period provisions when they have already issued the first Show Cause Notice by invoking such provisions as held by the Hon’ble Supreme Court in the case of Nizam Sugar Factory Vs. Collector of Central Excise [2006 (4) TMI 127 - SUPREME COURT]. Therefore, the demand in respect of the extended period in respect of the both SCNs is time barred and the same is set aside.
Appeal allowed.
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2023 (12) TMI 1344
Dismissal of appeal by CIT(A) for want of payment of admitting tax due on the returned income - HELD THAT:- CIT(A) has referred to provisions of section 249(4)(a) of the Act which contemplates inter alia that no appeal under this chapter shall be admitted unless at the time of filing the appeal the assessee has paid the tax due on the income returned by him. Now the assessee has produced challans of payment of tax due on returned income.
Therefore, in the facts and circumstances of the case and in the interest of justice the matter is set aside to the record of the CIT(A) for deciding the same afresh after considering the payment made by the assessee as well as explanation for delay in making payment of due tax on returned income. Needless to say the assessee be given an appropriate opportunity of hearing before passing fresh order. Appeal of the assessee is allowed for statistical purposes.
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2023 (12) TMI 1343
Recovery of short levied duty alongwith interest on the said short levied duty - wrong exemption claimed by the petitioner by classifying the goods on wrong customs heads - competence of Deputy Commissioner of Customs to issue SCN - SCN barred by limitation under the provisions of Section 28(9) of the Customs Act, 1962 or not - HELD THAT:- The imported goods covered in the bill of entry No. 7517069, dated 24-4-2020 were out of charge on 5-5-2020 and, therefore, the last date for issuance of Show Cause Notice would be 3-5-2022. However, the subject Show Cause Notice was issued on 20-4-2022 and, therefore, the said notice was well within time.
The next objection of the petitioner is in respect of the demand for the Bills of Entry Nos. 7572108, dated 2-5-2020 and 7985069, dated 23-6-2020 which were said to be barred by limitation under the provisions of Section 28(9) of the Customs Act, 1962 was also rejected. It was said that only an interim Show Cause Notice was issued vide the letter dated 23-5-2022. Later on, a corrigendum to Show Cause Notice was issued on 15-10-2022 for a change of adjudication authority due to the monetary limit in terms of Notification No. 29/2022-Customs (N.T.), dated 31-3-2022. The petitioner did not submitted any reply to the show cause notice. In due observance to the principles of natural justice, the new adjudication authority had given the importer reasonable opportunity of personal hearing before the adjudication of the case.
Short payment of customs duty and wrong exemption claimed by the petitioner by classifying the goods on wrong customs heads - HELD THAT:- There are no substance in the challenge to the order-in-original on the ground of barred by limitation. The 2nd ground that the Show Cause Notice was not issued by the competent authority, the petitioner never took this objection before the adjudication authority in his reply or the submissions. This is the first time the petitioner has raised this objection before this Court. Even the Show Cause Notice is not challenged in this writ petition, and it is only the order-in-original which has been challenged. Even otherwise it is the order-in-original which is under challenge and that has been passed by the competent authority. It is not the case of the petitioner that the order-in-original has not been passed by the competent authority.
This writ petition is hereby dismissed leaving it open to the petitioner to approach the appellate authority if he so advised against the impugned order-in-original, and if appeal is filled, the same shall be adjudicated in accordance with the law.
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2023 (12) TMI 1342
Exclusion of the period of 1854 days in computing the period of limitation for filing the Petition challenging the Award - defect of jurisdiction - Section 14 of the Limitation Act - HELD THAT:- The Applicant in the present case has failed to exercise due diligence and good faith. Further, the proceedings adopted by the Applicant viz. the Writ proceedings cannot be said to be proceeding suffering from “defect of Jurisdiction” or “any other causes of like nature”. It is not the submission of the Applicant/Petitioner that the Writ Court cannot interfere with the Arbitral Award. In the present case, the Writ Court chose not to interfere on account of alternate remedy.
In the decision of the Supreme Court in Zafar Khan [1984 (7) TMI 404 - SUPREME COURT] “Defect of Jurisdiction” has been construed as well as “other cause of like nature” and explanation (c) to Section 14 has also been referred to which provides misjoinder of parties or causes of action shall be deemed to be a cause of like nature with defect of jurisdiction. This expression must take its colour and content from the just preceding expression, “defect of jurisdiction”. In the present case, the Writ Petition challenging the Award cannot be termed as “defect of jurisdiction”.
There are much merit in the submission of the Counsel of Respondent No.1 that presuming Section 14 applies to the Arbitration Petition, the Arbitration Petition is not preferred within the prescribed period of limitation as the delay is of 166 days as the period between receipt of the Award and filing of the Writ Petition as well as the period between the rejection of the Writ Petition and filing of the SLP and the period between the dismissal of SLP and filing of the Arbitration Petition cannot be counted in the exclusion period under Section 14 of the Limitation Act. Thus, in any event the Arbitration Petition has been preferred beyond the permissible period of 120 days under Section 34 of the Arbitration Act.
There are no merit in the present Interim Application for exclusion of the period of 1854 days from 5 th April, 2017 till 1st November, 2022 in computing the period of limitation for filing the Petition challenging the Award dated 31st March, 2017 passed by the Facilitation Council constituted under the MSME Act. The delay beyond the permissible period of 120 days under Section 34(3) and proviso thereto of the Arbitration Act can in no event be condoned.
The Commercial Arbitration Petition under Section 34 of the Arbitration Act is dismissed as being barred by Limitation and is accordingly disposed of.
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2023 (12) TMI 1341
Deduction u/s 80P(2)(d) - interest income earned from other co operative banks - HELD THAT:- The Hon’ble jurisdictional High Court in the case of PCIT Vs. Totagars Co-operative Sale Society Ltd. [2017 (7) TMI 1049 - KARNATAKA HIGH COURT] had categorically held that interest income earned out of the surplus fund is to be taxed under the head “income from other sources” and is not entitled to deduction under section 80P(2)(a)(i) of the Act.
The Hon’ble jurisdictional High Court held that interest income received from co-operative banks cannot be equated with interest received from co-operative society and therefore is not entitled to deduction under section 80P(2)(d)
CIT (A) had relied on the order of Vasavamba Co-operative Society Ltd.,[2021 (8) TMI 706 - ITAT BANGALORE] considered the judicial pronouncements on the subject and had followed the judgment of the Hon’ble jurisdictional High Court in the case of PCIT Vs. Totagars Co-operative Sale Society Ltd.(supra).
Since the relevant finding of the Bangalore Bench of the Tribunal has been reproduced in the impugned order of the CIT(A), the same is not reiterated here. Therefore, hold that assessee is not entitled to deduction under sections 80P(2)(a)(i) or 80P(2)(d) of the Act with regard to the interest income that is received from the scheduled banks / co-operative banks - Appeal filed by the assessee is dismissed.
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2023 (12) TMI 1340
Refund along with interest at the rate of 12% p.a. on pre-deposit - HELD THAT:- Section 129EE of the Customs Act 1962 envisages that any amount that may have been deposited by way of a pre-deposit by an assessee is to be refunded along with interest not below 5% p.a. and not exceeding 36% p.a., and at such rate as may be notified by the Union Government.
In terms of the aforesaid provision, the Union Government by way of a notification dated 12 August 2014 has prescribed interest on refund to be fixed at the rate of 6% p.a. In that view of the matter, the order impugned cannot be sustained.
Interest shall consequently be computed and paid @ 6% p.a. - the impugned order is set aside - appeal allowed.
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2023 (12) TMI 1339
Taxability of income in India - services rendered for providing Supply Planning Services (SPS) - Royalty /FTS under the India – UK DTAA - services falls within the purview of “royalty” under Article 13(3) of India-UK DTAA and crediting services and DTC accreditation business as FTS under Article 13(4) or not? - HELD THAT:- From the perusal of the services, it is seen that what has been provided is intention to offer whereby assessee communicates in advance to every sight holder the aggregate value of each Box it intends to make available to the sight holder during the selling period. It also undertakes to use its reasonable efforts to ensure that, insofar as practicable, there is consistency as to the size, type, quality and colour of diamonds contained in each box in any category that it supplies during the intention to offer period.
This is purely service for providing diamonds to the sight holders and such service cannot be held that some kind of technical service is being provided by the assessee on this under Article 13 of DTAA or there is any managerial, technical or consultancy services even under the provision of section 9(1)(vii) of the Act.
Provision of extranet, it only accelerates efficiencies in the intention to offer process and provides a platform for sharing DTC information, propriety content plus tailored access to each sightholder to their own specific business information and processes via secured web-based, informationsharing and business platform. It is merely for providing information and there is no element of making available technical services and therefore, we are unable to appreciate as to how these can be treated as FTS. In so far as the provision of key account management, it is a kind of main point of contact between sightholder and assessee and assists in managing that relationship and to provide support in planning the intention to offer and delivery schedules. This account is related to supply of diamonds and nothing to do with providing any technical services.
So far as maintaining integrity of supplier of choice, assessee has engaged an organization to verify the accuracy of the information contained in sightholder submissions and information supplied or ought to be supplied by sightholders during the term of the contract. Thus, this has nothing to trigger FTS clause of DTAA. Accordingly, the finding and observation of ld. CIT (A) is upheld. Accordingly, this issue is decided in favour of the assessee.
Receipts being fees for SPS not falling under the purview of royalty under Article 13(4) - The receipt of SPS fees by the assessee cannot be said to be falling in the definition of Royalty by virtue of information concerning industrial, commercial or scientific experience as the information is provided based on experience and not for imparting of experience.
However, with regard to taxability of supply planning services under Article 13(4)(a), for use of brand "Nakshatra or "Forevermark to promote sale of branded diamond products, it has been stated that the Nakshatra brand which was owned by assessee from which it has earned royalty income, earlier was sold in AY 2008-09. Thus, this payment cannot be held in the nature of FTS or royalty. Albeit this is business income for assessee in India. However, if assessee does not have a PE in India, therefore, in the absence of PE, the receipts from supply planning services cannot be taxable in India.
Receipts being receipts/ fees received for grading services as business income of assessee and not as royalty - We find that this issue stands covered by the decision of the Hon”ble Jurisdictional High Court in the case of Diamond Services International (P) Ltd. [2007 (12) TMI 182 - BOMBAY HIGH COURT] and also it has been brought on record that assessee's group company, Forevermark Limited, also a tax resident of UK. The Tribunal for A.Y.2013-14 has held that grading services rendered by it is not taxable as royalty. Thus, we upheld the order of the ld. CIT(A) that grading services do not fall within the ambit of royalty as per Article 13.
Receipts/ fees received from DTC Accredited Business Programme (DTC-ABP) as not falling within the purview of royalty or FTS under the Indo - UK Treaty - AO in his draft assessment order treating the receipts from DTCABP as an extension of Value Added Services and accordingly, taxed the same as FTS and royalty under Article 13 which has been confirmed by the DRP also - HELD THAT:- We agree with the submissions with the ld. Counsel that once it is not a registered trademark, it does not have a sign or logo and it is not owned by the assessee, there is no question of taxing the same as royalty. Further, it cannot be held to be taxable as FTS also under Article 13 because there is no make available technical knowledge under this programme. Accordingly, order of the ld. CIT (A) is upheld and the grounds raised by the Revenue are dismissed.
It has been stated that in the appeals for A.Yrs. 2010-11 to 2012-13 have exactly similar issue under consideration with similar facts. However, they are assessee”s appeal, since post assessment order assessee has preferred DRP route and accordingly, the order of the AO has been upheld. Accordingly, our finding given in the A.Y.2009-10 will apply mutatis mutandis for these years also.
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2023 (12) TMI 1338
Export of non-Basmati White Rice - grievance of the petitioner- Company is that it has already entered into contract for supply of aforesaid rice to various foreign entities prior to issuance of notification (Annexure P-1) and if terms of the contract are not fulfilled, then of-course same will be create various hardship to the petitioner alongwith goodwill of his business - HELD THAT:- Considering the fact that contract was already entered into for supply of non- Basmati White Rice with foreign entities and letter of credit has also been issued by the petitioner for the said quantity, therefore, this Court finds that prima facie point is made out for consideration and considering the facts of the case, objection raised by learned Deputy Solicitor General is not found to be appropriate to disallow the aforesaid application.
The respondents are directed to permit the petitioner to export the Non-basmati White Rice to foreign entities in compliance of contract entered into between them, to which letter of credit has been issued by the petitioner for supply of quantity - Application allowed.
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