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2023 (10) TMI 1398 - JHARKHAND HIGH COURT
Money Laundering - issuance of summons - summons issued as an accused or as a witness - HELD THAT:- The Hon’ble Supreme Court in Vijay Madanlal Choudhary’s case [2022 (7) TMI 1316 - SUPREME COURT] has already ruled that the two provisions, as not ultra vires of the Constitution and that the summons, which have been issued to the petitioner, have become infructuous because of efflux of time, it is opined that the writ application is not maintainable. Hence, we do not entertain the writ application and consider that it is not a fit case to rule nisi the respondents. Hence, the writ petition is dismissed in limine.
Petition dismissed.
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2023 (10) TMI 1397 - ITAT RAIPUR
Disallowance of Amortization of land rehabilitation - HELD THAT:- We remit this covered issue to the file of AO to adjudicate the same after taking into consideration the view and directions given in the case of East India Minerals Limited [2014 (3) TMI 249 - ITAT CUTTACK] duly followed in assessee’s own case [2019 (12) TMI 203 - ITAT RAIPUR] after providing reasonable opportunity of hearing to the assessee.
Nature of expenses - Disallowance of Land Compensation & Rehabilitation Expenses - HELD THAT:- On perusal of the order of the coordinate bench of the Tribunal in assessee’s own case for A.Y. 1997-1998 wherein principle imbibed in the ratio laid down in the case of Arvind Mills Ltd. [1992 (7) TMI 2 - SUPREME COURT] as been held that capital expenditure would not become revenue expenditure simply by reasons of the fact that it was incurred in connection with business activities which ultimately resulted in efficiently carrying on the day to day business. Enduring nature does not necessarily mean that the benefit is derived for a very long period of time. Even if an asset has a life of five years, the expenditure incurred for acquiring the same, is a capital expenditure, even though the asset has to be replaced after five years and in that case, the period of five years is long enough to qualify as one bringing the asset of enduring benefit and in that case, it has to be treated as a capital expenditure and not as a revenue expenditure. Decided against assessee.
Disallowance of Guest House Expenses - AO restricted the claim of the assessee company to 50% of the total expenditure - CIT(A) reduced and restricted the addition made by the AO to Rs. 1.21 lakhs on account of failure to establish the expenditure fully to the extent claimed in the profit and loss account - HELD THAT:- No reason to interfere with the findings recorded by the ld. CIT(A). Thus, this ground raised by the assessee is dismissed.
Disallowance of repair and maintenance expenditure on assets not belonging to company (roads etc.) - HELD THAT:- As decided in assessee’s own case wherein the Tribunal by following the decision of the ITAT Kolkata Bench of the Tribunal in the case of Integrated Coal Mining Ltd. [2010 (1) TMI 1274 - ITAT KOLKATA] is of the view that the assessee is eligible for deduction of expenses incurred on the assets not belonged to the assessee. This ground of assessee is allowed.
Disallowance of coal transportation expenses paid to ESM companies - HELD THAT:- As in assessee’s own case for A.Y. 1998-1999 [2019 (12) TMI 203 - ITAT RAIPUR], wherein the Tribunal has remitted the issue back to the file of AO for determining the allowability of expenses.
Provision for leave encashment - AO found that the assessee has claimed provision for leave encashment for the relevant year as fully deductible business expenditure ignoring the provisions of Section 43B(f) - HELD THAT:- Hon’ble Supreme Court also decided the issue in favour of the revenue in Exide Industries limited [2020 (4) TMI 792 - SUPREME COURT] holding therein that, “an employer seeking deduction from tax liability in advance, in name of discharging liability of leave encashment, without actually extending such payment to employee as and when time for payment arises may lead to abhorrent consequences, it is this mischief clause (f) of section seeks to subjugate and thus is constitutionally valid”. Therefore, considering the prayer of the assessee we remit the issue to the file of AO to verify, examine and allow the payment towards leave encashment in the year of actual payment of leave encashment. If the same has been paid before the due date of filing of the return for the relevant assessment year, then the expenditure is allowable to such extent, if the payment has been made after the due date of filing of the return of income, the amount is to be disallowed. Ground of assessee is partly allowed for statistical purposes.
Disallowance of community Development Expenditure - no admissible material produced by the assessee either before the AO or before the CIT(A) to substantiate the claim - HELD THAT:- As decided in own case [2019 (12) TMI 203 - ITAT RAIPUR ] for A.Y. 2008-2009 find that the AO, however, ignored a very relevant and material fact that the population residing in the area which was benefitted by the provision of such basic amenities mainly comprised of the workers of the assessee-company and their families. He also appears to have overlooked the fact that such basic amenities could not have been provided to the assessee's employees in isolation as the said expenditure in any case had to be incurred for the entire area as a whole. Before us, assessee has contended that over 90 per cent of the population residing in that area constituted assessee's own workers and their families and it appears from the record that this fact has not been disputed by the Revenue at any stage. Moreover, in the absence of such facilities in that area, it would not have been possible for the assessee- company to get the proper work force for its operation without which it was not possible to carry on its business effectively and efficiently. The labour by itself is an important input for any type of business, more particularly for the business of the assessee-company of mining operation and, therefore, the expenditure incurred mainly for the welfare of the labour force has to be treated as incurred wholly and exclusively for the purpose of it's business. Decided in favour of assessee.
Disallowance of social overheads fuel & power - HELD THAT:- The disallowance of 50% made by the AO is on higher side which is restricted to 25%. The CIT(A) has not discussed the issue in detail and only relied on its earlier order and allowed the claim of the assessee, which in our opinion, is not justified and sustainable. Accordingly, we set aside the order of CIT(A) and restrict the disallowance to 25% as against 50% made by the AO. Thus, we partly allow this ground of revenue.
Apropos, status of the issue pertaining to social overheads-fuel and power, the department has preferred an appeal before the Hon’ble Jurisdictional High Court, however, the admission of the same was not reflected on the website of Hon’ble High Court as on 31st July, 2023, therefore, till the issue is admitted and decided by the Hon’ble High Court, the decision of Tribunal following the principle of consistency shall prevail and thus, has been followed.
Disallowance of grants to schools and institutions - HELD THAT:- Both the parties submitted that this issue has been decided by the coordinate bench of the Tribunal in assessee’s own case in [2019 (12) TMI 203 - ITAT RAIPUR] wherein specifically this issue was dealt with in A.Y. 2008-2009 [2019 (12) TMI 203 - ITAT RAIPUR] wherein the Tribunal has dismissed this ground of revenue as held that the expenditure incurred by the assessee-company on account of grants made to various schools was an admissible business expenditure.
Disallowance of welfare expenses-LPG - HELD THAT:- Tribunal in assessee’s own case in [2019 (12) TMI 203 - ITAT RAIPUR] held that CIT(A) while adjudicating this issue has followed his predecessor’s order and observed that the assessee company has claimed to have treated the reimbursement of expenditure on account of the provision of LPG to the employees as perquisite and has been deducting income tax thereon, the AO’s action is disallowing the above expenditure is not justified - order of the Ld. CIT(A) on this issue is fair and reasonable and the same does not call for any interference.
Provision for land reclamation/Exp. On reclamation of mining land & disallowance of expenditure on plantation of trees - HELD THAT:- As decided in A.Y. 2008-2009 [2019 (12) TMI 203 - ITAT RAIPUR] uphold order of CIT(A) in deleting the disallowance made by the Assessing Officer on account of expenses on trees plantation and others.
Disallowance of claim for OBR adjustment - HELD THAT:- As in assessee’s own case in [2019 (12) TMI 203 - ITAT RAIPUR] wherein Tribunal following the decision of the Jabalpur Bench of the Tribunal in the case of Northern Coalfields Ltd. [2015 (6) TMI 36 - ITAT JABALPUR] has dismissed this ground of revenue as held there is nothing on record to establish, or even suggest, that expenses incurred on removal of overburden at the surface level, which were capital expenditure in nature, have been claimed as revenue deduction on the strength of coal mining in another piece of land within that coal mine.
Disallowance of expenditure on actuarial valuation of employee compensation - assessee has created the provision towards fatal accident under the actuarial valuation done by Coal India Limited, i.e., the parent entity of the assessee - HELD THAT:- The analogy articulated by Hon’ble Apex Court in the case of M/s. Excide Industries Ltd. [2020 (4) TMI 792 - SUPREME COURT] would be the most appropriate ratio of law that has to be adopted wherein has held that “concededly, it is a provision to attach conditionality on deductions otherwise allowable under the Act in respect of specified heads, in that previous year in which the sum is actually paid irrespective of method of accounting”, Since the details pertaining to actuarial valuation as well as actual payment of any compensation to employees on fatal accident were not furnished before us, also in order to work out the admissible figure i.e. the amount actually paid, verification of accounting records, working of actuarial valuation and examination of supporting evidence has to be undergone therefore, in all equality the matter merits to be restored back to the file of the A.O to re-adjudicate the issue in terms of our aforesaid observations.
Disallowance of depreciation on Apollo Hospital Building - HELD THAT:- The licensee was required to employ its own staff including doctors, nurses, technicians for running of the hospital, the persons so employed shall have no nexus or connection with the licensor or Coal India or any of its group companies. Such covenants / obligations cast upon the licensee clearly shows that the licensor has provided the land and building to the licensee for running of the hospital and the licensor was in no way connected with the day to day operation of the hospital - license fee is in the nature of rental income earned by the assessee and therefore, the same should be charged for tax under the head “income from house property”. Our view is supported by the view of Universal Plast Limited [1999 (3) TMI 15 - SUPREME COURT]
Alternative prayer of the assessee pertaining to granting of consequential relief wherein it was the plea of the assessee that alternatively if the assessment of rent receipt from Apollo hospital as “income from house property” is upheld then the Ld. AO may be directed to grant consequential relief of 30% standard deduction of income from house property - The licensee was required to employ its own staff including doctors, nurses, technicians for running of the hospital, the persons so employed shall have no nexus or connection with the licensor or Coal India or any of its group companies. Such covenants / obligations cast upon the licensee clearly shows that the licensor has provided the land and building to the licensee for running of the hospital and the licensor was in no way connected with the day to day operation of the hospital. Under such facts and circumstances, we are of the considered view that the license fee is in the nature of rental income earned by the assessee and therefore, the same should be charged for tax under the head “income from house property”. See Universal Plast Limited [1999 (3) TMI 15 - SUPREME COURT] Accordingly, the decision of the Ld. CIT(A) with respect to disallowance of depreciation on Apollo Hospital building is justified and thus, needs no interference.
Disallowance of expenditure on account of land revenue - HELD THAT:- From facts coming out from the orders of the revenue authorities, it is not clear whether the expenditure booked under the head “miscellaneous expenditure” was for acquisition of land or towards compensation in lieu of employment. This aspect needs to be examined. Therefore, in the interest of natural justice, the issue demands and justifies being restored back to the file of the A.O to verify the nature of expenditure incurred in terms of our observations and readjudicate the same accordingly.
Disallowance of prior period expenses - HELD THAT:- Considering facts to allow any expenditure which pertains to a year earlier to the relevant assessment year, in that case in order to compute the true profit and gains of the year so as to ascertain the taxable income and tax liability, it has to be seen that whether such liability was crystalized and quantified during the relevant previous year. To verify this aspect, we remit the matter back to the file of the AO to allow the expenses in the year in which the expense is actually crystallized. Since the assessee was unable to substantiate by producing corroborative evidence before the revenue authorities in support of the contention that the expenditure termed as prior period expenses are actually crystalized during the relevant assessment year, the assessee is directed to assist in the set-aside assessment proceedings before the A.O making all the requisite compliances and submissions so as to satisfy the Ld. AO with respect to this aspect. Thus, this ground is partly allowed for statistical purposes.
Accumulated liquidated damages penalty - HELD THAT:- If the compensation relates to delay in procurement of capital assets, the same should be treated as capital asset, therefore, if the amount received by the assessee towards compensation for sterilization of the profit earning source and not in ordinary course of its business, the same should be treated as capital receipt in the hands of the assessee. Considering the nature of receipt explained by the assessee towards liquidated damages on account of belated supply of machinery by the suppliers has been held as capital receipt.
In the present case since the assessee was failed before the revenue authorities to substantiate the fact that the liquidated damages are capital in nature, in our opinion, when the assessee could not prove with any relevant and supporting documents as to how the liquidated damages are capital in nature, and since many of the other grounds in the present appeals are being restored to the file of the A.O in the interest of justice, we find it appropriate to provide the assessee one more opportunity to substantiate its claim by submitting relevant information/ evidence before the A.O., with the direction to Ld. AO to re-adjudicate the issue in light of our observations.
Addition made on account of corporate social responsibility - HELD THAT:- While the information pertaining to name, address and TDS in respect of CSR was called for, no such details were furnished by the assessee. AO further stated that under such circumstances, veracity of expenses remained unconfirmed, the reliability of expenses incurred under the head CSR was also doubtful. With all such observations, the claim of the assessee was not allowed by the A.O. On perusal of appellate order, it is not discernible as to whether ld. CIT(A) has verified the required documents, which were sought by the AO during the course of assessment proceedings, which was the main cause for the disallowance.
Therefore, we cannot take the finding of Ld CIT(A) on proper examination and appreciation of the facts, thus are unable to endorse the view taken by the ld. CIT(A) on the basis of theoretical submissions of the assessee in deleting the disallowance made by the AO without addressing the issues raised by A.O while making the addition under the head in doubt - restore this issue to the file of AO for verification and examination - ground of the revenue is allowed for statistical purposes.
Reopening u/s. 147 - assessment was done on account of audit objection - whether the additional depreciation u/s. 32(1)(iia) is allowable on caterpillers and 240 Dumpers treating them as machineries ? - HELD THAT:- In the present case, the reopening u/s. 147 was initiated after recording reasons u/s. 148(2) of the Act wherein provisions of Section 32(iia) were reproduced and had categorically mentioned that he has the reason to believe that the income chargeable to tax has escaped assessment. The reasons recorded by the A.O has no mention about the audit objection; therefore, even if the reopening is prompted by the Audit objection but was based on analysis of information available in the form of audited accounts of the assessee and not merely on the basis of audit objection. Under such circumstances, the plea of the Ld. AR that reassessment proceedings cannot be initiated on the basis of audit objection, does not survive.
Additional depreciation u/s. 32(1)(iia) is allowable on caterpillers and 240 Dumpers treating them as machineries - Case laws referred by the Ld. AO in the case of Western Coalfields Limited (2016 (5) TMI 517 - SUPREME COURT] in the same line of business/operation, pertains to sister concern of the assessee as observed by the Ld. CIT(Appeals), therefore, having a close nexus with the nature of assessee’s business, the decision in case of Western Coalfields Limited will be more apt to be followed. Accordingly, findings of Western Coalfields Ltd. (supra) based on the principle of law guided by the Hon’ble Apex Court in the case of Baloni Ors Ltd. [1974 (9) TMI 115 - SUPREME COURT] is squarely applicable in the facts and circumstances of the present case. We, thus, hold that the disallowance on account of additional depreciation made by the Ld. AO and confirmed by the Ld. CIT(Appeals) is on right footing and thus, sustained. In the result, Grounds No. 2(a) (b) & (c) are dismissed in terms of our aforesaid observations.
Provision made for mine closure - HELD THAT:- Expenditure incurred by the assessee was not actually incurred during the year. On perusal of the CIT(A)’s order it is discernible that the ld. CIT(A) has held that the liability was not ascertainable. Thus we are of the opinion that matter may be restored to the file of AO to verify and examine as to whether the expenditure incurred during the year under consideration. It is also not clear as to whether the amount has been credited to escrow account or not. Therefore, we restore this issue to the file of AO to grant corresponding deduction in the year in which such amount was actually incurred by depositing the same to the escrow account. This issue is allowed for statistical purposes.
Non grant of TDS credit due to income mismatch - HELD THAT:- It is clear from the assessment order as well as the appellate order that the assessee had claimed the credit of TDS without offering the corresponding income to the income tax and, therefore, both the authorities have rightly denied the TDS credit by virtue of provision of section 199 of the Act read with rule 37BA of the IT Rules, 1962. Ld. AR of the assessee also could not brought to our notice any cogent evidence to substantiate its claim that the corresponding income has been offered to tax. In view of the above, we uphold the findings accorded by both authorities below, in this regard. However, we direct the AO to grant TDS credit in the year in which corresponding income is declared by the assessee. Thus, this issue is partly allowed for statistical purposes.
Reversal of interest disputed deposits w.r.t. MPGATSVA/Terminal Tax - HELD THAT:- The issues pertaining to interest on disputed deposits on behalf of third parties which are considered as liability by the assessee company, since the same belongs to deposits of third parties under trust. Accordingly, the assessment of such income should be completed treating the assessee company as representative assessee as deliberated in the foregoing discussions. The issue, therefore, is restored back to the file of Ld. AO for fresh adjudication after examining and verifying the facts of the issue.
Disallowance u/s. 14A read with rule 8D - HELD THAT:- In the present case, since the A.O has referred to various judgments, response of the assessee and also, made the requisite calculation, therefore, we are unable to subscribe with the contention of the assessee that there was no application of mind, and the addition was made under mechanical approach.
Sufficient interest free funds for investing in investments having interest free income, therefore, disallowance u/s. 14A is not justified - Whether the disallowance u/s. 14A r.w.r. 8D made by the Ld. AO will survive or not is dependent on verification of facts from the financials of the assessee and also, depends upon the judgment of Hon’ble Apex Court in Maxoop Investment [2018 (3) TMI 805 - SUPREME COURT] wherein the provisions of Section 14A r.w.r. 8D and their applicability has been interpreted. - issue should be restored back to the file of the A.O for adjudicating the same afresh.
Disallowance of expenditure on computer software - CIT(A) upheld the order of the AO stating that the computer software is an asset and eligible for 60% tax depreciation and, hence, 40% of the cost of the computer software should be added back to the total income of the assessee - HELD THAT:- We may accept the fact submitted by assessee that the computer software requires upgradation or renewal after one year or two years, in such a situation, the expenditure incurred on software under the normal accounting parlance shall be allowed according to the life of software on pro-rata basis, based on usage in the relevant assessment year. Since such details of usage are not readily available or would be difficult to fetch according to Ld. AR, it would be appropriate to allow depreciation according to the mandate of law - authorities below have rightly added 40% of the cost of the computer software to the total income of the assessee. Assessee can claim depreciation on the computer software in the subsequent years. Thus, we direct the AO to allow the depreciation on the computer software in the subsequent years on production of the material evidence and documents relating to actual amount of purchase of computer software. This issue is partly allowed for statistical purposes.
Disallowance of land crop compensation - HELD THAT:- We send this issue back to the file of the A.O to verify the nature of the expenditure incurred, if the same is in lieu of employment which helps the assessee company to avoid recurring revenue expenditure in the nature of salary and other administrative legal hassles, then the same would be considered as revenue in nature and should be treated as an allowable expenditure.
Write off/depreciation of railway siding leased out to Aryan Coal Beneficiation (ACB) - HELD THAT:- AO has rightly relied on the Section 27(iiib) r.w.s. 269UA - assessee is not eligible to claim depreciation as the asset of the assessee has already been given on lease and currently not in possession of the assessee - AR by way of submission or arguments was also unable to substantiate that how the case laws relied upon are applicable on the facts and circumstances of the present case and helpful in substantiating contention of the assessee. Accordingly, no good reason to interfere with the order of the ld. CIT(A) upholding the disallowance made - thus, we dismiss this ground of assessee.
Disallowance of sustainable development as Cap. Expenditure - HELD THAT:- CIT(A), allowing the expenditure incurred under the guidelines issued by the Ministry of Heavy Industries and Public Enterprises, following the same Coal India Limited, the parent company of the Assessee had issued a communication to all its subsidiaries, mandating creation of such reserve and incurrence of such expenditure, which was mandatory in the business interest and expediency of the assessee’s business. Such information has been duly substantiated with the supporting evidence, accordingly Ld. CIT(A) on the basis of principal of consistency has allowed such expenditure and deleted the addition/disallowance made by the AO. Such a finding of the Ld. CIT(A) on the issue is found convincing and justified - we dismiss this ground of revenue.
Disallowance of payments made to Coal India Sports Promotion Fund[CISP] - HELD THAT:- Incurrence of expenditure for CISP fund was an unavoidable regulatory necessity for functioning of the business activities of the company and for business expediency - expenses incurred on direction of the holding company in accordance with the policies of Government are mandatory and beyond the control of the assessee cannot be said to be non-business in nature.
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2023 (10) TMI 1396 - ITAT AHMEDABAD
Addition u/s 68 - unexplained cash credit in the form of unsecured loans - Addition made as assessee has failed to establish the identity and creditworthiness of the cash creditors as well as the genuineness of transactions - CIT(A) deleted addition as Assessee has provided sufficient documents such as PAN, copies of ITR-V and various ROC forms to establish the identity of the creditor and sufficient documents in the form of confirmation letter from creditor, affidavit from their director, bank statement showing amount debited in the creditor’s bank account and credited in assessee’s bank through RTGS to establish genuineness of transaction.
AO did not accept the genuineness of loans credited in the books of the assessee because notices issued to loans parties for independent inquiry have not been responded.
Whether the documentary evidence provided by the assessee should be brushed aside for the reason that they did not respond to notices issued u/s 133(6) of the Act or not found when income tax official visited at their address or on the basis of commission report alleging that the creditor parties were managed by entry provider? - HELD THAT:- The report of the commission cannot be taken as sacrosanct/gospel truth for taking any adverse view against the assessee without pointing out any specific defect in the documentary evidence furnished by the assessee during the assessment proceedings which have been elaborately discussed in the preceding paragraph. In our considered view the identity, creditworthiness of the parties and genuineness of the transaction were established by the assessee based on the documentary evidence but the revenue without pointing out any defect in such documents has decided the issue against the assessee based on the commission report. As such it is the onus upon the revenue to disprove the materials/documents submitted by the assessee in support of the transactions in dispute based on cogent reasons.
But the same has not been done by the revenue in the objective manner. Likewise, it is also a fact on records that the revenue has taken some statements from the 3rd party which were not provided to the assessee for the rebuttal. It is the settled law that the third-party statement cannot be used against the assessee until and unless the opportunity of cross-examination is afforded to the assessee. In view of the above facts and after considering the necessary details discussed above, we do not find any reason to interfere in the finding of the learned CIT-A. Decided in favour of assessee.
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2023 (10) TMI 1395 - ITAT SURAT
Penalty u/s 271(1)(c) - Estimation of income on Bogus purchases - in quantum assessment before Tribunal the disallowances / additions of impugned purchase were restricted to 5% - HELD THAT:- We find that ultimately the addition was restricted to 5% being average profit ratio in the industry. Such disallowance was restricted by following decisions of various benches of Tribunal and by following some decisions of jurisdictional High Court. In our considered view the addition was ultimately restricted by Tribunal on ad hoc to the extent of average profit ratio.
We find this combination in Nazar Impex P Ltd [2022 (7) TMI 119 - ITAT SURAT] while considering the similar contentions of the parties on levy of penalty on similar estimated additions of similar purchase, deleted the similar penalty u/s 271(1)(c) by taking view that no penalty is leviable on estimated additions. While deleting the similar penalty, we followed the decision of jurisdictional High Court in Vijay Proteins Limited [2015 (1) TMI 828 - GUJARAT HIGH COURT].
No justification in levying the penalty by assessing officer on the additions of bogus purchase, which were ultimately restricted on estimation average of profit in the similar business. Thus, the assessee succeeds.
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2023 (10) TMI 1394 - SC ORDER
Seeking rejection of plaint - Rule 11 of the Code of Civil Procedure, 1908 (CPC) - it was held by Delhi High Court that 'there is no merit whatsoever in the application of the applicant/defendant no.2 under Order VII Rule 11 of the CPC. It has been filed only to delay the proceedings in the suit' - HELD THAT:- There are no reason to interfere with the impugned judgment and hence, the special leave petition is dismissed.
The observations/findings recorded in the impugned judgment should be read as confined and necessary for the disposal of the application under Order VII Rule 11 of the Code of Civil Procedure, 1908.
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2023 (10) TMI 1393 - SECURITIES APPELLATE TRIBUNAL MUMBAI
Insider Trading Allegations - Appellants to be guilty of insider trading under the Prohibition of Insider Trading Regulations, 1992 - promoters of the complainants Prannoy Roy and Radhika Roy also carried out insider trading in the scrip of NDTV during the investigation period. - Non Compliance with NDTV's Code of Conduct - WTM found that Prannoy Roy and Radhika Roy had traded while in possession of price sensitive information and accordingly directed them to disgorge the unlawful gains and also prohibited them from accessing the securities market for a period of 2 years.
HELD THAT:- The trades of Prannoy Roy and Radhika Roy is during PSI-6. In Quantum Securities [2023 (2) TMI - SECURITIES APPELLATE TRIBUNAL MUMBAI] as already held that PSI-6 was not a price sensitive information and, therefore, the charge of insider trading during that period cannot be sustained. The matter of Prannoy Roy and Radhika Roy is thus squarely covered by the decision of this Tribunal in Quantum Securities (Supra) which fact is not disputed by the learned counsel for the respondent.
As we find that Prannoy Roy and Radhika Roy had secured pre-trade clearance from the Compliance Officer of NDTV which is an admitted fact in the show cause notice and, therefore, the trades executed by these two entities was in conformity with the NDTVs Code of Conduct and the PIT Regulations. There is no finding in the impugned order to the effect that the Compliance Office had acted improperly in granting permission to these two entities to sell during the period when the trading window was closed.
The impugned order passed by the WTM against Prannoy Roy and Radhika Roy cannot be sustained.
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2023 (10) TMI 1392 - PUNJAB AND HARYANA HIGH COURT
Directions for deciding appeals against Advance Ruling filed manually in a time bound manner, as the same have been pending adjudication well beyond the statutory limit of 90 days - HELD THAT:- The receipt of the said communication which was sent by e-mail is denied by counsel for the petitioner.
Leaving the said fact apart, since the process of hearing is already started, we are of the considered opinion that respondent No.2 shall make efforts to decide the appeals within a period of six weeks from today. The petitioner shall be put to notice at least 10 days in advance of the hearing which is to be fixed.
The present writ petition stands disposed of.
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2023 (10) TMI 1391 - ITAT KOLKATA
Reopening of assessment u/s 147 - addition of a sum @1% of the share capital raised by the assessee holding the same to be the commission income earned by the assessee by facilitating accommodation entry - HELD THAT:- We notice that the assessee declared loss in the return of income which was subjected to scrutiny proceedings and the same were completed u/s 143(3). Perusal of the assessment order dated 25.03.2014 indicates that the assessee was asked for various information u/s 142(1) of the Act and details as called for were submitted and produced by the assessee.
The order also indicates that notices u/s 133(6) of the Act were issued to all the investors who have paid the share capital and share premium to the assessee company towards allotment of 2,50,125 equity shares. After examining all these details and making a disallowance u/s 14A of the Act income assessed at Rs. NIL.
We observe that thereafter based on the information received from DDIT (Inv.) it was found that the assessee is one of the beneficiaries of an alleged accommodation entry of Rs. 81 Lakh from M/s. Ashtavinayak Commodity Trade Pvt. Ltd. Based on this information re-assessment proceedings were carried out. AO did not make any addition for the alleged accommodation entry received from M/s. Ashtavinayak Commodity Trade Pvt. Ltd.
AO made an addition for commission income at the rate of 1% of the total amount of share capital and share premium received during the year. The facts narrated above clearly indicates that ld. AO has not made any addition on the basis of the reasons for which the re-assessment proceedings were carried out and even though in the regular assessment proceedings complete details of the amount received towards share capital and share premium received were examined by way of issuing notice u/s 133(6) of the Act and no addition has been made by the AO, examining very same details in the re-assessment proceedings and making addition towards commission income clearly tantamount to change of opinion.
Since AO did not make any addition for the reasons recorded and has made an addition for estimated commission income, such re-assessment proceedings become bad, illegal and deserves to be quashed. We, accordingly quash the re-assessment proceedings, set aside the order of ld. CIT(A) and allow ground raised by the assessee on legal issue. Decided in favour of assessee.
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2023 (10) TMI 1390 - BOMBAY HIGH COURT
Jurisdiction - Powers of the Revenue Department to resume inquiry into the show cause cum demand notices issued in the matters of proposed reversal under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944, after lapse of more than 10 years - HELD THAT:- Since the proposed action regarding reversal was contemplated, the provisions of Section 11A of the Central Excise Act, 1944 are sought to be invoked for raising the demand and recovery. The provision of Section 11A inter alia provides for a period of limitation within which the notices are supposed to be issued to make the recoveries and provides that the action of recovery has to be initiated within six months/2 years from the date of notice depending upon the facts whether it is a case falling under Sub-Section 1 or Sub-Section 2 respectively. It is, therefore, abundantly clear that contrary to this statutory time limit, the respondents have now revived the inquiries after more than a decade and the action would apparently be illegal.
In respect of similar proceedings under the service tax matters under Section 73 of the Finance Act, coordinate benches of this Court in the matters of Reliance Transport and Travel Pvt. Ltd. [2022 (3) TMI 1169 - BOMBAY HIGH COURT], ATA Freight Line (I) Pvt. Ltd. [2022 (3) TMI 1162 - BOMBAY HIGH COURT] and Coventry Estate Pvt. Ltd. [2023 (8) TMI 352 - BOMBAY HIGH COURT], the actions initiated after prolonged period have been struck down.
The impugned actions of reviving the inquiries which were in cold storage for more than a decade are clearly contrary to the law and is liable to be struck down - Petition allowed.
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2023 (10) TMI 1389 - DELHI HIGH COURT
Levy of penalty on appellant for the negligence of its counsel - respondent/plaintiff despite being aware of the reference under the SICA did not apprise the Court of such proceedings - jurisdiction of impugned order - Suit for recovery - sick company - HELD THAT:- Evidently, an appearance had been put on behalf of the appellant/defendant on the service of summons by publication, however not only was the written statement not filed but the Court was also not apprised about the registration of the reference or pendency of the proceedings before BIFR. Thus, there was no due diligence on the part of the appellant/defendant in contesting the proceedings.
It is well settled that there was legal duty cast upon the appellant/defendant to bring it to the notice of the Court that it had qualified for the protection under the SICA, and this obligation was not discharged.
Learned Single Judge rightly found that appellant/defendant merely took a lame excuse, most conveniently blaming its previous counsel but then it is also borne out from the record that the respondent/plaintiff on becoming aware of the reference before the BIFR, filed an application before the BIFR on 23 July 2012, seeking its permission to execute the decree. Although the appellant/defendant was provided with an opportunity to file a reply to the said application, it was not filed so much so that the respondent/plaintiff was impleaded in the said proceedings before the BIFR on 12 December 2012 and admittedly the appellant/defendant came out of purview of SICA on 18 September 2014. And yet no legal proceedings were initiated by the appellant/defendant up until 2019.
The learned Single Judge has committed no illegality, perversity or adopted an incorrect approach in passing the impugned order dated 27 May 2009.
Appeal dismissed.
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2023 (10) TMI 1388 - CESTAT MUMBAI - LB
Non-payment of service tax on outbound tours - tour operator service - service provided within the taxable territory or not - services relating to “outbound tours” provided by the appellant would be covered under the category of “tour operator” services under section 65(115) of the Finance Act or not - liability for the period from 10.9.2004 - HELD THAT:- The decision of the division bench of the Tribunal in M/S COX & KINGS INDIA LTD., M/S TRAVEL CORPORATION OF INDIA LTD. AND M/S SWAGATAM TOURS PVT. LIMITED VERSUS CST, NEW DELHI [2013 (12) TMI 1024 - CESTAT NEW DELHI], therefore, holds that where a person is engaged in a composite activity of operating tours and planning, scheduling, organizing or arranging of tours (including arrangements for accommodation, sightseeing or similar activities) by a mode of transport other than by a tourist vehicle covered by a permit issued under the provisions of the Motor Vehicles Act or the Rules made thereunder, such activity would fall outside the scope of the definition of a tour operator. However, the activity of planning, scheduling, organizing or arranging tours including operating the tour in a tourist vehicle covered by a permit granted under the Motor Vehicles Act or the Rules made thereunder would fall within the ambit of tour operator.
Whether the service that the appellant is providing is a taxable service under section 65(105)(n) of the Finance Act? - HELD THAT:- The division bench in Cox & Kings examined whether the activity of providing services in relation to outbound tours during the period from 10.09.2004 to 30.09.2008 would fall within the ambit of a service provided by a “tour operator” and consequently subjected to levy of service tax. The division bench observed that the definition of “tour operator” has two facets. The business of planning, scheduling, organizing or arranging tours by any mode of transport including where the tour is by a tourist vehicle covered by a permit under Motor Vehicles Act is one facet of the definition, while operating of tours in a tourist vehicle covered by a permit granted under Motor Vehicles Act including planning, scheduling, organizing or arranging of such tours is another facet. Thus, where a person pursues a composite activity of operating tours and planning, scheduling, organizing or arranging of such tours by a mode of transport other than a tourist vehicle covered by a permit under the Motor Vehicles Act, then such activity would fall outside the scope of the definition of “tour operator” - The operating of a tour “by any mode of transport” would have clearly covered operating tour in a tourist vehicle covered by a permit granted under the Motor Vehicles Act and so the inclusionary clause would be rendered surplusage.
The first part of the definition of a “tour operator” defines it to mean any person engaged in the business of planning, scheduling, organizing or arranging tours by any mode of transport. This would be an exhaustive definition of a “tour operator”. However, the definition also provides that a “tour operator” would include any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act or the Rules made thereunder - The first part of the definition of a “tour operator” is by any mode of transport and, therefore, there is no restriction about the territorial jurisdiction of the country. It only deals with the planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport - It is, therefore, not possible to hold that what is contained in the inclusive clause of the definition is necessarily not contained in the first part of the definition as was held by the division bench in the earlier decision in Cox & King.
The decision of the Principal Bench in Cox & Kings, based on validation of the Circular of 1997 as not being impacted by the several changes in the definition of “tour operator”, may not be applicable in case of “outbound tours” over the period of time that the activity had been taxable.
There can, thus, be no two opinions about taxability of tours undertaken within India. However, the definition in section 65(105) of Finance Act is not limited to the physical aspect but also the precursor preparation which is taxable on its own standing within the scope permitted by section 65(105)(n) of Finance Act. Such evaluation of extent of taxability cannot be decided upon without reference to the factual aspects of the activity sought to be brought within the tax net by service tax authorities.
Thus, the taxability of activity undertaken by the appellant will have to be decided on the facts peculiar to the case and in accordance with intent of section 65, section 66 and section 67 of the Finance Act - The dispute in this appeal, i.e., from 01.04.2005 to 31.03.2011, pertaining to the period prior to the “negative list” regime does not have to consider “taxable territory” as affecting the decision thereon.
The papers may be placed before the division bench to decide the appeal on merits.
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2023 (10) TMI 1387 - DELHI HIGH COURT
Doctrine of merger - Seeking urgent directions for full and proper access to and inspection of all Aircraft documents, records, including its maintenance record/storage preservation records - HELD THAT:- The objection raised by Respondent/RPof Go Air on the doctrine of merger cannot be agreed upon. The doctrine of merger enunciated by the Supreme Court, does not have a universal or unlimited application. For a merger to operate, the superior court must examine the issues and record findings on merits.
The decision in KUNHAYAMMED AND OTHERS VERSUS STATE OF KERALA AND ANOTHER [2000 (7) TMI 67 - SUPREME COURT] also sets forth that doctrine of merger applies once a superior court has disposed of the lis before it. The Supreme Court in the case of Kaikhosrou (Chick) Kavasji Framji v. Union of India [2019 (3) TMI 1961 - SUPREME COURT] has reiterated this and clarified that the merger principle is applicable to a decision on merits.
Thus, the doctrine of merger is applicable only when an Appellate Court has gone into the merits of the case.
In any event, it has now been more than five months, since the Aircraft were grounded by the Respondent/RP of GoAir. A review of the documents and photographs filed by the Petitioners/Lessors show the evident cannibalization of the Aircraft. The Petitioners/Lessors have made out a prima facie case and it has become necessary for this Court to pass additional directions to protect these highly valuable equipment during the pendency of the present case - It is also deemed necessary that the Petitioners/Lessors be permitted to contract a 24 hour security services for all the Aircraft, to be provided at the expense of the Petitioners/Lessors.
The Respondent/RP of Go Air shall within the next fourteen days provide access to the Petitioners/Lessors of the documentations in relation to the Aircraft, the Airframe, its engines and other parts and components - application disposed off.
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2023 (10) TMI 1386 - ITAT JODHPUR
Levy of late fees u/s 234E - intimations u/s 200A for delay in filing quarterly returns of TDS for the period prior to 01.06.2015 - HELD THAT:- The dispute in this appeal is for F.Y. 2012-13 the power to levy the said late fees u/s 234E of the I. T. Act has is came into effect from 01.06.2015. Therefore, it is prospective in nature. In the light of this facts when the levy was not supported by the law the demand is raised is not in accordance with the law. Similar view is taken in the case of Madhya Pradesh Gramin Bank [2022 (11) TMI 771 - ITAT INDORE] as held the issue has already been decided in favour of the assessee that the late fees u/s 234E of the Act could not have been levied in the intimation u/s 200A for delay in filing quarterly returns of TDS the said power to levy fees has come into effect from 01.06.2015. Thus this appeal of the assessee is allowed.
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2023 (10) TMI 1385 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Approval of Resolution Plan - Department of State Tax is a secured creditor or not - HELD THAT:- The issues raised in the appeal are fully covered by the judgment of this Appellate Tribunal in DEPARTMENT OF STATE TAX, THROUGH THE DY. COMMISSIONER OF STATE TAX VERSUS ZICOM SAAS PVT. LTD. & ANR. [2023 (2) TMI 1170 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] where in the appeal filed by Department of State Tax similar issues were decided and it was held that Department of State Tax is not a secured creditor.
Appeal dismissed.
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2023 (10) TMI 1384 - DELHI HIGH COURT
Addition u/s 14A r.w. rule 8D - assessee earned exempt income during the year and the provisions u/s 14A were mandatory provisions to arrive at correct real income, it was necessary to apportion the expenditure between taxable and non taxable income - 100% depreciation claimed on temporary erections - Asset used less than 180 days - addition of loss on shifting of securities from AFS/HTS category to HTM category - Disallowance u/s 36(1)(vii) - ITAT allowed all the ground in favour of assessee - HELD THAT:- Out of the proposed questions of law, question numbers (A) to (D) are covered by a decision rendered by this court in a bunch of appeals, the lead appeal Pr. Commissioner of Income Tax vs. Oriental Bank of Commerce (now merged with Punjab National Bank Ltd) [2023 (10) TMI 1244 - DELHI HIGH COURT]
MAT provision applicability on assessee banking company - HELD THAT:- The said appeals concern AYs 2014-15, 2015-16 and 2013-14.We may note that during the said AYs, admittedly, the proposed question (E) was not raised by the appellant/revenue. Therefore, having regard to the principle of consistency, in our view, proposed question no. (E) cannot be considered in the aforementioned AY i.e., AY 2016-17.
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2023 (10) TMI 1383 - ITAT JABALPUR
Validity of exercise of jurisdiction u/s 153A and 153C - AO justification in passing the assessment orders u/s 143(3) and not u/s 153C - validty of assessment orders passed u/s 143(3) - HELD THAT:- Matter to be covered by the decision of the Supreme Court in the case of Pr. CIT Vs Abhisar Buildwell P. Ltd [2023 (4) TMI 1056 - SUPREME COURT] wherein held no addition can be made in respect of completed assessment in absence of any incriminating material.
Also Lordships concluded :-
i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under section 153A;
ii) all pending assessments/reassessments shall stand abated;
iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved.
In view of the above detailed reasoned judgement rendered by the Hon'ble Supreme Court in “Abhisar Buildwell P.Ltd.” (supra), Question No. 1 raised before us, i.e., as to whether the AO was justified in passing the assessment orders u/s 143(3) and not u/s 153C of the Act is answered in the negative and Question No.2, as to whether the assessment orders passed u/s 143(3) are invalid and bad in law is answered in the affirmative. Both these Questions, thus, are answered in favour of the assessee.
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2023 (10) TMI 1382 - CESTAT AHMEDABAD
Classification of service - supply of tangible goods for use service or otherwise - providing the cylinder skid vehicle to the service recipient on charge based on per trip - HELD THAT:- As per the fact which is not in dispute between the appellant and the revenue that the charges for providing the vehicle to Raj & Company is on per trip basis. This shows that the transaction is not of renting of vehicle as in case of renting the fixed amount is charged on monthly basis or lump sum, however, if the charge is on the basis of per trip that prima facie shows the activity is of transportation.
However, the aspect that whether the activity falls under GTA or otherwise and consequently the liability of service tax can be passed on the appellant was not examined for the obvious reason that neither the department has contended nor the appellant has raised the issue but on the basis of fact it prima facie appears that the activity can be classified under GTA - matter needs to be reconsidered from the aspect of GTA.
The impugned orders are set side - appeals are allowed by way of remand to the Adjudicating Authority.
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2023 (10) TMI 1381 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS, MUMBAI
Classification of goods intended to be imported - Clear Float Glass - classifiable under Customs Tariff Item 7005 2990 of the First Schedule to the Customs Tariff Act, 1975 or not - HELD THAT:- All glass manufactured under the float process (clear, coated or tinted) invariably would contain a layer of tin on one side, which does not mean that the float glass is to be classified under 7005 10. Any float glass said to have an absorbent layer will invariably be coated with a microscopically thin coating of metal or metal oxide, provided the coating is done on-line i.e. during the process of manufacturing of float glass, and before the process of annealing, so that the glass isn't regarded as worked. If otherwise, the float glass has to be regarded as one having no absorbent layer.
The float glass has not been undergone any coating process (coating as absorbent, reflecting or non-reflecting layer) and cannot be classified under the Tariff Sub Heading 7005 10. The occurrence of tin layer on one side of the float glass does not make the glass have an absorbent, reflecting or non-reflecting layer. Further, as it is also not coloured throughout the mass (body tinted), opacified, flashed or merely surface ground, the item would not be covered under the Sub heading 7005 21. Hence, the appropriate classification for "clear float glass" would be under the tariff sub heading 7005 29 as "Others". At the 8 digit level, if the item is 'tinted', it would be classifiable under the CTI 7005 2910 and if the item is 'non-tinted' it would be classifiable under CTI 7005 2990 of the Custom Tariff Act, 1975.
The goods in question i.e. the clear float glass don't merit classification under CTI 7005 1090 as claimed by the applicant, instead they merit classification under CTH 7005 and more specifically under CTI 7005 2990 of the first schedule to the Customs Tariff Act, 1975 and accordingly, the benefit of exemption from duty under notification no. 46/2011- Customs dated 01.06.2011 Serial No. 934 which provides exemption to goods classifiable under 70010020 to 70051090 cannot be extended to the subject goods.
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2023 (10) TMI 1380 - ITAT CHENNAI
Reopening of assessment u/s 147 - reasons to believe - reopening beyond period of four years - AO made certain additions by making disallowance of inadmissible items and also recomputed the claim of deduction u/s. 36(1)(viia) - HELD THAT:- In the absence of any failure on the part of the assessee to disclose fully and truly all material facts and assessment framed u/s. 143(3) of the Act and now reopening beyond 4 years which is against the provisions of the Act. Hence, we find no infirmity in the order of CIT(A) and the same is confirmed. This appeal of the Revenue is dismissed.
Power of enhancement of CIT(A) - claim of deduction u/s. 36(1)(viia) - HELD THAT:- We noted that the decision of Hon’ble Supreme Court in the case of Jute Corporation of India [1990 (9) TMI 6 - SUPREME COURT] categorically held that the power of the CIT(A) is co-terminus with that of the AO and enhancement can be made on any issue which was touched upon by the AO in the assessment order. According to Hon’ble Supreme Court, the CIT(A) cannot go beyond the assessment record and discover a new source of income for enhancement.
In the present case before CIT(A), the claim of deduction u/s. 36(1)(viia) of the Act was very much before the AO and he has gone into the claim of deduction and only the issue before CIT(A) is in connection with the correctness of proposal of enhancement of assessment order. We find that the CIT(A) has not adverted to new issue rather this issue is very much under discussion of AO and he has utilized his power of enhancement to correct the assessment order and enhance the income to the extent of claim of deduction u/s. 36(1)(viia) of the Act. The assessee has claimed more than what was provision created in the books of accounts. Hence, we confirm the enhancement and dismiss this issue of assessee’s appeal.
Claim of deduction u/s. 36(1)(viia) - CIT(A) held that the deduction cannot exceed the provision made for bad and doubtful debts in the books of accounts - HELD THAT:- The direct decision available on the issue is only one High Court decision i.e., the Hon’ble Punjab & Haryana High Court in the case of State Bank of Patiala [2004 (5) TMI 12 - PUNJAB AND HARYANA HIGH COURT] and that of Hon’ble Karnataka High Court in the case of CIT vs. Syndicate Bank [2020 (2) TMI 1020 - KARNATAKA HIGH COURT] has explained the provisions and held that the condition precedent for claiming deduction under section 36(1)(viia) is that a provision for bad and doubtful debts should be made in the accounts of the assessee. The language employed in the section is clear and ambiguous. In the absence of any provision, the assessee is not entitled to deduction. However, the assessee is entitled to deduction to the extent provision is made in the accounts subject to the limit mentioned in section 36(1)(viia) of the Act. Hence, this issue decided against the assessee.
Validity of notice issued u/s 143(2) as barred by limitation - HELD THAT:- We noted that the notice u/s. 143(2) of the Act dated 14.08.2014 and 15.07.2014 was issued after return filed u/s. 148 of the Act. The assessee in response to notice u/s. 148 of the Act dated 20.03.2014 filed an application dated 17.04.2014 asking the AO to treat the return filed on 28.09.2009 as the return filed in response to notice u/s. 148 of the Act. This means that the notice u/s. 143(2) of the Act dated 15.07.2014 is within limitation and hence, this issue of assessee does not survive and hence, accordingly dismissed.
Validity of reopening of assessment - AO detected that there is escapement of income in the claim of deduction u/s. 36(1)(viia) of the Act in regard to amount claimed by assessee is in excess of provision made in the books of accounts in regard to provision for bad and doubtful debts - HELD THAT:- There is sufficient material placed on record which shows the existence of income chargeable to tax and which originally ought to have been included in the taxable income while framing assessment but was not so included. Hence, it is sufficient and it itself provide a cause or justification for a belief to the AO that such income had escaped assessment and the AO in such cases would be ex-facie justified in initiating the proceedings u/s. 147 of the Act. It is the case of non-assessment of an item on account of claim of deduction u/s. 36(1)(viia) of the Act in regard to the amount for which no provision for bad or doubtful debt have been created in the books of accounts of the assessee. Hence in our view, the nonassessment of an item of income chargeable to tax would warrant formation of requisite belief to initiate the proceedings within four years from the end of the relevant assessment year even yet where full disclosure was made and income chargeable to tax had escaped assessment from being included in the final assessment order in which taxable income was worked out. Hence according to us, this ground of the assessee does not succeed and hence, dismissed.
Rectification u/s 154 to rectify the claim of deduction u/s. 36(1)(viia) - According to AO, deduction u/s. 36(1)(viia) of the Act is allowable only to the extent of claim made in the books of accounts i.e., provision for bad and doubtful debts made in the books of accounts and it cannot be claimed in the computation simpliciter - HELD THAT:- We noted that there is a lot of debate and it is highly debatable issue and it cannot be decided while acting u/s. 154 of the Act as there is a limitation in the provisions of section 154 of the Act that only the mistake apparent from record which can be rectified but where two views are possible or there is a debate available, it cannot be rectified u/s. 154 of the Act. Here is the case where the AO has allowed this claim while giving effect to the order of CIT(A) dated 18.07.2017 and that cannot be rectified while acting u/s. 154 of the Act. Hence the very issue on assumption of jurisdiction, we allow in favour of assessee and against Revenue. This issue of assessee’s appeal is allowed.
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2023 (10) TMI 1379 - CESTAT AHMEDABAD
Exemption from service tax vide Notification No. 9/2009-ST dated 03.03.2009 as amended by Notification No. 15/2009-ST dated 20.05/2009 - appellant being sub-contractor provided service in SEZ on behalf of the main Contractor - HELD THAT:- Revenue has denied the exemption on payment of service tax under Notification No. 09/2009-ST only for the reason that the appellant being a sub-contractor, have not provided service directly to the SEZ unit or developer of SEZ. On perusal of notification, it is found that notification prescribes that the service which are provided in relation to authorised operation in SEZ and received by a developer or unit of SEZ are exempted from whole of service tax. As per this plain reading of the notification, the only criteria is that the service which is provided, should be in relation to the authorised operations in SEZ and received by a developer or unit of SEZ. In the facts of the present case, there is no dispute that appellant have provided service which are approved by the concerned authority in relation to the authorised operations in SEZ therefore, even the appellant is sub-contractor but the condition of providing service to authorised operation has been satisfied. Therefore, exemption cannot be denied to the appellant.
There is no doubt that service provided by the appellant in the capacity of sub-contractor but in relation to the authorised operations in SEZ are clearly eligible for exemption Notification No. 9/2009- ST dated 03.03.2009 as amended - The impugned order is set aside - appeal allowed.
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