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Showing 101 to 120 of 1398 Records
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2023 (10) TMI 1298 - CESTAT AHMEDABAD
CENVAT Credit - credit availed by the appellant job worker based on supplementary invoices issued by Hindustan Unilever Ltd paying differential duty on the Bulk Detergent Powder, stock transferred to the appellant M/s. Indu Home Care Product - deniable on the ground of payment of such additional duty by Hindustan Unilever Ltd allegedly on account of suppression, etc. under Rule 9(1)(b) of CENVAT Credit Rules, 2004 - penalties under Section 11 AC(1)(c) of Central Excise Act upon the appellant - penalties under Rule 26 (2) upon HUL.
HELD THAT:- From Rule 9 (1) (b) of CENVAT Credit Rules 2004, it can be seen that the restriction of availment of credit on supplementary invoice is applicable in a case where the manufacturer supplier of inputs or capital goods not paid the duty or short paid the duty by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any provision of the Excise Act or of the Customs Act or the Rules made thereunder with intend to evade payment of duty only when such clearance is in the nature of sale of goods - In the present case the appellant is a job worker and they have received the goods on which CENVAT Credit was taken as a job worker, for the purpose of job work on behalf of M/s Hindustan Unilever Ltd. In this fact, the goods were received on returnable basis which does not involve the sale of goods as defined under Section 2(h) of Central Excise Act.
The ownership of goods remained with supplier M/s. Hindustan Unilever Ltd. As against the supply of goods there is no consideration paid by the appellant to M/s. Hindustan Unilever Ltd. Therefore, the transaction is clearly not covered under ‘sale’ of goods by M/s. Hindustan Unilever Ltd to the appellant. Therefore the combined reading of Rule 9 (1)(b) and Section 2(h), it is clear that only in a case of sale of goods, the restriction of CENVAT Credit on supplementary invoice is applicable. In the present case, the transaction being not a sale transaction the restriction shall not apply.
From the consistent view taken by the Tribunal and the courts it is settled that in a case where there is no sale of goods and only a stock transfer the restriction of availment of CENVAT Credit on supplementary invoice in case of non-payment or short payment of duty by the supplier unit shall not apply - Reliance placed in COMMISSIONER OF CUS. & C. EXCISE, HYDERABAD-IV VERSUS JAIRAJ ISPAT LIMITED [2008 (2) TMI 440 - ANDHRA PRADESH HIGH COURT] and UNITED PHOSPHORUS LTD. VERSUS COMMISSIONER OF C. EX. & S.T., SURAT-II [2013 (11) TMI 1530 - CESTAT AHMEDABAD] where it was held that when there is simply a stock transfer the prohibition under Rule 7(1)(b) will not be applicable.
Penalties - HELD THAT:- The appellants are entitled to the CENVAT Credit on the strength of supplementary invoices issue by M/s. Hindustan Unilever Ltd. consequently the penalties on the appellant as well as on the Hindustan Unilever Ltd shall also not sustain - Moreover, as regard the penalty on Hindustan Unilever Ltd as per the nature of the present case, there is no involvement of M/s. Hindustan Unilever Ltd in alleged wrong availment of CENVAT Credit by the appellant M/s. Indu Home Care Products. M/s. Hindustan Unilever Ltd rightly issued the supplementary invoice towards the payment of differential duty and the said issuance of the supplementary invoice is not illegal or incorrect. It is upto the appellant M/s. Indu Home Care Products, whether to avail CENVAT Credit or otherwise. Therefore, in any case, in the facts of the present case M/s. Hindustan Unilever Ltd cannot be fastened with any penalty under Rule 26 (2) of Central Excise Rules, 2002.
The impugned order is not sustainable, hence the same is set aside - Appeal allowed.
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2023 (10) TMI 1297 - CESTAT KOLKATA
100% EOU - clearance of Spent Sulphuric Acid to the fertilizer companies in DTA - eligibility for payment of ‘nil’ rate of duty Notification No.2/2008-CE dated 01.03.2008 for clearance of Linear Alkyl Benzene Sulphuric Acid - Notification No.4/2006-CE dated 01.03.2006 for clearance of Spent Sulphuric Acid to fertilizer companies - HELD THAT:- In view of the decision in SATYA METALS VERSUS UNION OF INDIA [2013 (8) TMI 161 - HIMACHAL PRADESH HIGH COURT], which is applicable to the facts of this case, the charging section for duty on DTA clearance is under the provisions of Section 3(1)(b)(ii) of the Central Excise Act, 1944 and as per the said provisions, the duty is to be levied and collected from a 100% EOU, would be the duty of Customs payable if the goods produced and manufactured outside India and the same have been imported into India. This is the basic charging section of duty leviable on a 100% EOU when clearing the goods to DTA. As per the said provisions, the duty of excise shall be levied and collected on any excisable goods, which are produced and manufactured by a 100% EOU and brought to any other place in India, shall be an amount equal to the aggregate of duties of customs which would be leviable under the Customs Act, 1962 or any other law for the time being in force, on like goods produced and manufactured outside India if imported into India and where the said duties of excise are chargeable with reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provisions of this Act, be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975.
Therefore, the duty payable in accordance with this Notification in respect of the said goods shall not be less than the duty of excise leviable on the like goods produced or manufactured outside EOU Unit, which is specified in the said Schedule read with the any other relevant Notification issued under Section 5A(1) of the Central Excise Act, 1944 - the appellant is entitled to pay the duty in terms of Notification No.2/2008-CE dated 01.03.2008 and Notification No.04/2006-CE dated 01.03.2006.
There are no merit in the impugned orders and the same are set aside - appeal allowed.
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2023 (10) TMI 1296 - GUJARAT HIGH COURT
Rejection of application, partly, under Vera Samadhan Yojna, 2019 (Amnesty Scheme- 2019) for A.Y. 2011- 12 and A.Y. 2012-13 - issuance of C-Forms or not - HELD THAT:- In this case, the respondent verified the ‘C’ form through “TINXSYSY” website resulting into allowing the ‘C’ forms of Rs. 1,45,87,986/- (without tax) and disallowing the amount of Rs. 1,85,82,948/- (without tax). Thus, the verification by the respondents was made prior to the passing of the order dated 15.2.2020 for A.Y. 2011-2012, and for A.Y. 2012-13. Since, the order under Amnesty-2019 Scheme was to be passed latest by 15.2.2020, the authority passed an order on 15.2.2020 after verification of the ‘C’ forms which was available on record and therefore, in our opinion there is no illegality committed.
Moreover, heavy reliance placed by the petitioner on the certificate dated 17.2.2020 at Annexure ‘G” is of no consequences since the same was made available after 15.2.2020 i.e. after the cutoff date to pass the order. Therefore, accepting the request or the prayer made by the petitioner would amount to extending the benefit of the scheme beyond the due date which is not permissible under law and, therefore, we do not find any error in the order passed by the authority dated 15.2.2020.
Further, the rectification application was rightly rejected by observing that there is no error apparent on the face of the record which requires rectification.
There are no illegality in the orders dated 15.2.2020 and 29.5.2020 - petition dismissed.
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2023 (10) TMI 1295 - SUPREME COURT
Seeking grant of Default bail - chargesheet or a prosecution complaint be filed in piecemeal without first completing the investigation of the case or not? - filing of such a chargesheet without completing the investigation will extinguish the right of an accused for grant of default bail or not - remand of an accused can be continued by the trial court during the pendency of investigation beyond the stipulated time as prescribed by the CrPC - HELD THAT:- It pertinent to mention that in the present case, this Court is not dealing with the merits of the case and as such is not inclined to make any observations regarding the same. Every court, when invoked to exercise its powers, must be mindful of the relief sought, and must act as a forum confined to such relief. In the present case at hand, this Court is not a court of appeal, but a court of writ, and therefore is inclined to limit its jurisdiction only to the personal liberty of the writ petitioner’s husband and the impugned points of law.
Under Section 167 of the Code of Criminal Procedure, 1898, which was the Act that governed criminal procedure before the enactment of CrPC presently in force, an accused, either under judicial or police custody, could be remanded only for a maximum period of 15 days.
Reliance placed in SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION & ANR. [2021 (10) TMI 1296 - SUPREME COURT], wherein it was held that Section 167(2) of the Cr.P.C. is a limb of Article 21 of the Constitution of India, and as such, the investigating authority is under a constitutional duty to expedite the process of investigation within the stipulated time, failing which, the accused is entitled to be released on default bail.
It is also to be noted that as per the scheme of Cr.PC, an investigation of a cognizable case commences with the recording of an FIR under Section 154 Cr.PC. If a person is arrested and the investigation of the case cannot be completed within 24 hours, he has to be produced before the magistrate to seek his remand under Section 167(2) of the Cr.PC during continued investigation. There is a statutory time frame then prescribed for remand of the accused for the purposes of investigation, however, the same cannot extend beyond 90 days, as provided under Section 167(2)(a) (i) in cases where the investigation relates to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than 10 years and 60 days, as provided under Section 167(2)(a)(ii), where the investigation relates to any other offence.
Without completing the investigation of a case, a chargesheet or prosecution complaint cannot be filed by an investigating agency only to deprive an arrested accused of his right to default bail under Section 167(2) of the CrPC - Such a chargesheet, if filed by an investigating authority without first completing the investigation, would not extinguish the right to default bail under Section 167(2) CrPC.
In the instant case, it is clear from the facts that during the pendency of the investigation, supplementary chargesheets were filed by the Investigation Agency just before the expiry of 60 days, with the purpose of scuttling the right to default bail accrued in favour the accused - The Investigating Agency and the trial Court, thus, failed to observe the mandate of law, and acted in a manner which was manifestly arbitrary and violative of the fundamental rights guaranteed to the accused.
It is pertinent to mention that the right of default bail under Section 167(2) of the CrPC is not merely a statutory right, but a fundamental right that flows from Article 21 of the Constitution of India. The reason for such importance being given to a seemingly insignificant procedural formality is to ensure that no accused person is subject to unfettered and arbitrary power of the state - it becomes essential to place certain checks and balances upon the Investigation Agency in order to prevent the harassment of accused persons at their hands.
The interim order of bail passed in favour of the accused is made absolute, and the present writ petition is, accordingly, disposed of.
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2023 (10) TMI 1294 - BOMBAY HIGH COURT
Professional Misconduct - Chartered Accountant (CA) - Delay of 19 years for completion of Proceeding on the part of ICAI - fabrication of bogus payment challans by putting forged stamp of Dena Bank, Vile Parle (W) Branch - allegation to have collected account payee cheques for making payment of sales tax dues which he misappropriated by depositing in his own bank account - HELD THAT:- The sequence of events clearly indicate that firstly the complaint itself was made after 10-12 years of the incident having taken place. Thereafter, it took the Council as many as 14 years to complete the procedure prescribed under the Act and reach a finding of guilt of Respondent. Another almost two years were spent in the process of filing the Reference and finally, about four more years were spent in removing office objections to get the Reference registered. Thus, the Council has prolonged the procedure for as many as 19 years and kept Respondent in the dock for the entire period.
Considering the nature of accusation against Respondent, the finding of guilt by the Committee and the Council and the consequent penal recommendation of such grave ramification, it is surprising that the Institute took such a long time to complete the procedure of indictment. The attitude of the Institute appears to be completely casual and negligent - Respondent is presently 77 years of age and save and except a period of five years for which he himself had surrendered his certificate of practice, he has been professionally active and no other complaint is found to have been made against him. The Institute has offered no explanation whatsoever for the inordinate delay in initiating and concluding the disciplinary action against Respondent.
The Supreme Court in its decision in the matter of State of Madhya Pradesh v Bani Singh [1990 (4) TMI 286 - SUPREME COURT] has quashed the charge memo and the departmental enquiry against an officer of the SAF, Gwalior on the ground of inordinate delay of 12 years to initiate departmental proceedings with reference to an incident that took place in 1975-76 and held that since there was no satisfactory explanation for the delay, it will be unfair to permit departmental enquiry against the officer to continue.
In the present case no explanation is offered by the Institute for the inordinate delay of as many as 19 years. Respondent has inasmuch suffered the agony of the sword of Damocles hanging over his head for so many years. In any case, we do not find that the Committee has found any substantial justification in the form of unrebutted evidence against Respondent as much as to hold him guilty to the extent that his name should be removed for a period of one year and Respondent be compelled to face an ignominy of the tag of ‘other misconduct’ at this stage in his professional career and at an age of 77 years - even the Council has merely reproduced the report of the Committee without giving its own independent findings. There is neither any analysis by the Council nor any justification recorded to explain the quantum of punishment recommended to this Court.
The view of Council is wholly untenable and the recommendation of the Council as prayed cannot be accepted. In view thereof, there is no need to take any further action against Respondent - Reference disposed off.
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2023 (10) TMI 1293 - SUPREME COURT
Murder - Scope of exception Under Section 84 of Indian Penal Code or not - issue of insanity - reversal of order of acquittal - HELD THAT:- The fact that the Appellant had committed murder of the deceased have been found established concurrently by the Trial Court as well as the High Court, therefore, we would discuss the evidence in this regard very briefly - Basing upon the evidence of PW-1 and PW-13 and the medical evidence adduced, it is fully proved that the Appellant-Accused had attacked the deceased with sharp-edged weapon causing his death.
Issue of insanity - HELD THAT:- It is settled that the standard of proof to prove the lunacy or insanity is only 'reasonable doubt' - In Surendra Mishra v. State of Jharkhand [2011 (1) TMI 1586 - SUPREME COURT] , HARI SINGH GOND VERSUS STATE OF M.P. [2008 (8) TMI 1012 - SUPREME COURT] and Bapu v. State of Rajasthan [2007 (6) TMI 557 - SUPREME COURT] this Court has held that an Accused who seeks exoneration from liability of an act Under Section 84 of Indian Penal Code has to prove legal insanity and not medical insanity. Since the term insanity or unsoundness of mind has not been defined in the Penal Code, it carries different meaning in different contexts and describes varying degrees of mental disorder. A distinction is to be made between legal insanity and medical insanity. The court is concerned with legal insanity and not with medical insanity.
It is settled that the judgment of acquittal can be reversed by the Appellate Court only when there is perversity and not by taking a different view on reappreciation of evidence. If the conclusion of the Trial Court is plausible one, merely because another view is possible on reappreciation of evidence, the Appellate Court should not disturb the findings of acquittal and substitute its own findings to convict the Accused - In the case at hand, the High Court had reversed the finding of acquittal and convicted the Appellant mainly on reappreciation of evidence by holding that the Trial Court erred in extending the benefit of Section 84 of Indian Penal Code, without even recording a finding that the Trial Court's finding is perverse.
In the light of the evidence discussed by the Trial Court including the medical evidence about the mental illness of the Appellant-Accused and his abnormal behaviour at the time of occurrence, it does not appear that the view taken by the Trial Court was perverse or that it was based on without any evidence - the High Court erred in setting aside the judgment of acquittal rendered by the Trial Court.
The Appellant-Accused of the charge Under Section 302 Indian Penal Code acquitted - appeal allowed.
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2023 (10) TMI 1292 - ANDHRA PRADESH HIGH COURT
Cancellation of GST registration of petitioner - cancellation on the ground that Registration has been obtained by means of fraud, wilful misstatement or suppression of facts - HELD THAT:- Though the show cause notice is vague, the petitioner seems to have submitted its reply dated 24.03.2023 with requisite particulars to the best of its ability. It clearly stated that to maintain proper supply chain and to have better control and operational efficiency on cost as well as convenience of operations, it applied for GST registration in A.P. by obtaining lease of part of the property owned by its parent company in Kuppam, Andhra Pradesh. The petitioner mentioned that all the TMT purchases of the petitioner are from its parent company and sales were spread over to different States.
The observations of the 2nd respondent would reveal that mainly basing on the fact that the registration of the petitioner and its parent company emanate from same premises, the 2nd respondent, without verifying the records to know whether the petitioner involved in issuing and obtaining the fake invoices and doing fake business to avoid tax, came to the conclusion that the place of business shown by the petitioner is not suited for the present business activities and hence, recommended for cancelation - it cannot be comprehended, even if the place of business of the petitioner for argument sake is not conducive for its business, how the said fact can be treated as sufficient to conclude that the petitioner obtained registration by committing fraud or wilful misstatement or suppression of facts.
In spite of the petitioner’s submission that the complete details of purchases and sales can be verified at any point of time, the 2nd respondent without resorting to such logical and legal exercise, simply carried away by the recommendations of the Inspecting Authority i.e., Deputy Assistant Commissioner who on a conjuncture suspected that the taxpayer may be engaged in bill trading without proper receipt and supply of goods, for which there is no proper basis. Therefore, the impugned registration cancellation order is not sustainable in the eye of law.
The cancellation order dated 20.04.2023 passed by 2nd respondent and the appellate order dated 07.07.2023 passed by 1st respondent are set aside with a direction to the respondent authorities to restore the GST registration of the petitioner within one (1) week from the date of receipt of a copy of this order - Petition allowed.
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2023 (10) TMI 1291 - CALCUTTA HIGH COURT
Levy of additional tax liability for execution of subsisting Government contracts either awarded in the pre-GST regime or in the post GST regime without updating the Schedule of Rates (SOR) incorporating the applicable GST while preparing Bill of Quantities (BOQ) for inviting the bids.
HELD THAT:- Considering the submissions of the parties this writ petition is disposed of by giving liberty to the petitioner to file appropriate representation in the aforesaid regard as referred in preceding paragraph of this order, before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks from date. On receipt of such representation the Additional Chief Secretary, Finance Department shall take a final decision within four months from the date of receipt of such representation after consulting with all other relevant departments concerned.
Petition disposed off.
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2023 (10) TMI 1290 - CALCUTTA HIGH COURT
Maintainability of petition - appealable forum not available - non availability of alternative remedy - HELD THAT:- The matter shall appear for final hearing in the monthly list of December, 2023.
Statute requires that for filing appeal before the first appellate authority against the order in original petitioner is to make pre-deposit of 10% of the tax and in case petitioner wants to challenge the order of the first appellate authority before the Tribunal, petitioner/assessee will have to make a pre-deposit of additional 20% of the remaining disputed tax. But, in this case, petitioner submits that the respondent authority has recovered more than the aforesaid amount which are required to be paid by pre-deposit before the first appellate authority and the second appellate authority and recovered even before the expiry of the statutory period of time to file appeal before the Tribunal.
Considering the facts and circumstances of the case, respondent authority concerned is directed to refund the excess amount of pre-deposit within two weeks from the date of communication of this order, subject to compliance of any other formalities which are required under the law.
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2023 (10) TMI 1289 - ALLAHABAD HIGH COURT
Condonation of delay in filing appeal - appeal of the petitioner has been dismissed on the ground of limitation by taking the date of order under challenge as the date of communication - HELD THAT:- The appeal preferred by the petitioner on 13/14.04.2023 was within limitation as the date of communication of the order was 22.03.2023, when the petitioner for the first time became aware of the order dated 03.12.2021, but the respondent no. 2 arbitrarily dismissed the appeal as barred by time - Matter requires consideration.
List as fresh on 11.09.2023. Both the appeals to be heard together.
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2023 (10) TMI 1288 - RAJASTHAN HIGH COURT
Taxable Supply or not - determination of differential amount of GST - validity of summons and enquiry proceedings - petitioner-company has expressed its intention to contest the proceedings claiming that the issue involving interpretation of law. - Petitioner sought to issue SCN u/s 73 before raising any demand. - providing complete turnkey solutions from concept to commissioning and maintenance of the electrification works and other civil works to its customers. - HELD THAT:- From the tenor of the reply filed on behalf of the respondents, it appears that still the inquiry is going on and final adjudication as per Section 73 of the CGST Act has not been done till date.
This writ petition is disposed off while directing the respondents not to insist the petitioner-company to pay the amount of Rs.5,51,49,553/-, as indicated in the impugned notices, till final adjudication is taken place under Section 73 of the CGST Act.
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2023 (10) TMI 1287 - SC ORDER
Condonation of delay - ITAT dismissed the appeals on the ground that there is a delay of 246 days and there is no explanation for condoning the delay - HELD THAT:- As noticed that the order of the Commissioner of Income Tax (Appeals) dated 21.02.2013 was communicated to the Appellant only on 18.12.2013. Thereafter, the Appellant immediately obtained a certified copy of the order passed by CIT(A) on 30.12.2013 and preferred an appeal on 06.01.2014. In the facts and circumstances of the case we deem it appropriate to condone the delay. Considering the amount involved in the appeals, we are also of the opinion that the appellant must have an opportunity of contesting the appeals before the Tribunal.
We set aside the order passed by the Income Tax Appellate Tribunal [2018 (2) TMI 2106 - ITAT JAIPUR] followed by decisions of the High Court [2018 (8) TMI 2136 - RAJASTHAN HIGH COURT] & [2018 (8) TMI 2135 - RAJASTHAN HIGH COURT] and restore the matters back on the file of the Income Tax Appellate Tribunal for consideration of the matters on merits. This will be subject to the Appellant’s paying an amount of Rs. 25,000/ towards cost to the respondent.
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2023 (10) TMI 1286 - GUJARAT HIGH COURT
Penalty u/s. 271(1)(c) - Reference to Explanation no. 7 while initiating penalty were made or not - application of arm’s length principles which resulted in the erosion of taxes payable in India to the extent of 24% - Base Erosion Theory was adopted and the application of arm’s length principles for making TP adjustment was not proper - Divergence of opinion between the Koltaka Bench and the Pune Bench of the Tribunal - Assessee had charged additional fees from its Indian AES in order to comply with Arm’s Length Standards, the additional fees would have been taxed in India in the hands of the appellant @ 10% on gross basis, while at the same time, the said additional fees would have been allowed or deducted in the hands of the payers - HELD THAT:- What is evident from the discussion herein above is that the CIT(A) did not accept the arguments on base erosion since the arguments were considered and dealt with in length by the ITAT Kolkatta Special Bench in the case.
According to the CIT(A) even if the assessee was charging lower fees for technical services to its Indian AEs and transfer pricing is proposed in the hands of the assessee, no deduction could be claimed by Indian AEs. Reading a particular paragraph of the observations of the AO’s order reproduced by the CIT(A) itself would indicate that there were two views possible and that the issue was debatable.
Therefore even if the deemed provision on the basis of Explanation 7 is pressed into service, then also there can be a case based on good faith and it cannot be termed as concealment.
What is evident is that the AO has found that the view of the ITAT in Cummins Inc [2016 (7) TMI 1689 - ITAT PUNE] on facts may not apply. Even though, a Mumbai Bench decision in the case of 3I INFOTECH LTD. [2010 (7) TMI 843 - ITAT MUMBAI] was on the subject of base erosion but the AO did not consider it appropriate as the Ahmedabad Bench had relied upon the Special Bench order of Kolkatta. These findings itself suggest that there are in fact more than two opinions on the subject of base erosion.
In the case of Toyota Kirloskar Motor (P) Ltd. V. Union of India [2019 (6) TMI 932 - KARNATAKA HIGH COURT]relied upon by Shri Soparkar, Explanation 7 of Section 271(1)(C) was under consideration where the Court held that the Explanation cannot be applied blindly in a routine manner to levy penalty on the additions made in the absence of any material to establish the concealing of income or furnishing inaccurate particulars. Moreover, they are independent and distinct from the assessment proceedings.
Also decided in VERIZON INDIA PVT. LTD. [2016 (8) TMI 1287 - DELHI HIGH COURT] in the absence of any overt act, which disclosed conscious and material suppression, invocation of Explanation 7 in a blanket manner could not only be injurious to the assessee but ultimately would be contrary to the purpose for which it was engrafted in the statute. It might lead to a rather peculiar situation where the assessees who might otherwise accept such determination may be forced to litigate further to escape the clutches of Explanation 7.
What is therefore evident from the above is that provisions of Section 271(1)(C) and Explanation 7 is clearly not applicable.
Also merely because the appeal of the assessee was admitted on the issue of quantum, the fact that the `Revenue’s appeal ipso-facto requires to be admitted, is not necessary. Penalty need to be deleted - Decided in favour of assessee.
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2023 (10) TMI 1285 - DELHI HIGH COURT
Addition u/s 40A(3) - purchases made otherwise than by account payee cheque - HELD THAT:- There are undated confirmations that bear identical language. This brought the genuineness of the transactions into serious doubt.
According to us, even if we were to accept that the reason given in the confirmation letters was correct, that is, the appellant/assessee was a new entrant in the business, we believe, to allay concerns of the suppliers i.e., the above-mentioned concerns, payments could have been made through bank drafts or other modes, whereby, banking channels were used for the subject payments.
We find that the Tribunal has returned with a finding of fact that these confirmations were produced for the first time before the CIT(A).
The grounds of appeal preferred before us show that there is nothing stated that would indicate that the appellant/assessee has averred that the said observation was perverse. However, as indicated hereinabove, even if we were to assume that these confirmation letters were produced before the AO, it would still not help the cause of the assessee.
Clearly, payments made by the assessee to the concerns violated Section 40A(3) as they were not made through an account payee cheque drawn on a bank, account payee bank draft or through the use of electronic clearing system through a bank account, and therefore, to fall within the ambit of the 1977 circular, the appellant/assessee was required to establish the genuineness of the transactions. The appellant/assessee having failed to do so, led to the deduction being rightly disallowed for the subject payments.
Even if the petitioner’s/assessee’s case fell within the ambit of the 1977 circular, the petitioner/assessee could not have been allowed deductions on the subject payments made by the petitioner/assessee as the rule under which leeway was claimed did not exist for the AY in question. Decided against assessee.
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2023 (10) TMI 1284 - GUJARAT HIGH COURT
Reopening of assessment u/s 147 - reason to believe - lump sum compensation receipts - HELD THAT:- As during the course of assessment proceedings, the petitioner had filed letters - also furnished the orders of the Court and related documents such as memorandum of understanding, entered into between the petitioner and the Ratna developers, ledger, account of the lump-sum compensation and the bank statement showing that the payment was made with regard to the lump sum compensation.
AO at the time of original assessment proceedings after satisfying himself about the correctness of the lump-sum compensation had passed an assessment order under section 143(3) of the Act? - there was no reason for the author of the notice u/s 148 to have reason to believe or come to a conclusion that the income had escaped assessment of the year under consideration.
Reading of the annual report and the auditor’s report indicates that in note 19 of other expenses and entry of lump-sum compensation was made. Even in response to the notice under Section 143(2) of the Act, a specific response was given under the headlump- sum compensation, producing the orders, the Court and relating documents to justify the lump-sum compensation paid by the company. Whereas the letter would indicate that a reference was made to memorandum of understanding between Ratna Bhumi Developers Private Limited and Ratna Developers along with bank statements earmarking the payments made to Ratna Developers for the compensation - during the entire scrutiny assessment, the question of the debit of an amount of Rs. 135.00 lakhs was gone into. In fact, the reasons recorded would indicate the fact that the very records were sought to be claimed as the basis of information for reopening.
Reasons recorded indicate that there was no new tangible material or information or fresh evidence which came into the possession of the assessing officer and the entire basis of the reasons to believe was founded on the original assessment proceedings.
Having built an opinion on the basis of the original assessment records which did not call for any clarifications and having accepted the same, it was not open for the Assessing Officer to review and recall that opinion and take a different stand based on the same set of facts and having accepted the view after scrutiny, as held by the Supreme Court in the decision in case of Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT].
Assessing Officer has no power to review; he has the power to re-assess. But re-assessment has to be based on fulfillment of certain pre-condition and if the concept of “change of opinion” is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of “change of opinion” as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, Assessing Officer has power to re-open, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief.
Apparently, the twin condition i.e. existence of new tangible material and failure on the part of the assessee to disclose all material facts (truly and fully), does not exist. Thus, jurisdiction under Section 148 cannot be exercised. Decided in favour of assessee.
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2023 (10) TMI 1283 - DELHI HIGH COURT
Deduction qua bad debts acquired from predecessor-in-interest on acquisition of its commercial vehicle division in a scheme of demerger - whether the successor-in-interest i.e., the respondent/assessee, could have written off the debts which were already turned bad? - HELD THAT:- According to us, this issue is no longer res integra, given the factual matrix arising in the instant matter and in view of the judgment T. Veerabhadra Rao [1985 (7) TMI 2 - SUPREME COURT].
This view has also found resonance with a judgment rendered in CIT v. Times Business Solution Ltd [2013 (4) TMI 370 - DELHI HIGH COURT].
Having regard to the factual position and the legal principles enunciated in the judgments referred to hereinabove, we are of the opinion that no interference is called for with the impugned order.
Disallowance concerning bad debts was correctly deleted - no substantial question of law.
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2023 (10) TMI 1282 - DELHI HIGH COURT
Nature of receipt - non- compete fee - capital or revenue receipt - assessee had been restrained both directly and indirectly from undertaking any business which would compete with the business of WSIL - as per CIT(A) non- compete fee was a camouflage for payment of money or transfer of business - HELD THAT:- According to us, a bare perusal of what is recorded by the CIT( A) of his order would show that the consideration was paid against various agreements, which included the non-compete agreements.
A plain reading of the extract embedded in the aforementioned proceeding order does not convey that the assessee had conceded, as is sought to be portrayed before us, that the non-compete agreements were sham agreements and the consideration was artificially bifurcated into that which were paid for various assets [both fixed and movable] and transfer of IPR rights.
There is, in fact, no elucidation of the note said to have been submitted by the authorized representative of the assessee.
Tribunal, in our view, has applied the correct test, which is that there was no material on record for the CIT(A) to conclude that non- compete fee was a camouflage for payment of money or transfer of business.
Tribunal, in brief, is seeking to convey is that because the assessee had executed a non-compete agreement with WSIL, the conversation the CIT(A) had with the assessee could not be used to vary, add or subtract from the obligations contained in the said agreement.
Assessee had been restrained both directly and indirectly from undertaking any business which would compete with the business of WSIL.
Clearly, for the period in which the non-compete agreement was to operate, which in this case was 10 years, the assessee’s source of income had been clamped and, therefore, compensation received by him could only be treated as capital receipt. - Decided in favour of assessee.
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2023 (10) TMI 1281 - GUJARAT HIGH COURT
Reopening of completed assessment - petitioner was not eligible for exemption u/s 10 AA being profits not derived from any export from its unit of Special Economic Zone - HELD THAT:- As in coming to the conclusion that the petitioner was not entitled or not eligible for exemption u/s 10AA and that the assessee had wrongly claimed the exemption, what is evident from reading the reasons and the order disposing the objections is that the author of these communications is the very same Officer who in response to a notice u/s 142 having been satisfied with the explanation given by the petitioner vide its communication dated 11.12.2019 passed an assessment order, accepting the explanation tendered by the petitioner in the communication of 11.12.2019.
This case can be no better example of a case where an Officer at the drop of the hat has sought to change his opinion which is contrary to the decision of the Supreme Court in the case of CIT Vs. Kelvinator of India Ltd [2010 (1) TMI 11 - SUPREME COURT]
Thus the petition is allowed. The impugned notice and the order disposing of objections are quashed and set aside. Decided in favour of asssessee.
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2023 (10) TMI 1280 - DELHI HIGH COURT
Levy of fringe benefit tax (FBT) on expenditure claimed concerning advertisement - Assessee claimed that it may not be able to produce all bills, as the record was voluminous and maintained in different branches - CIT(A) had arrived at a solution, by giving assessee benefit to the extent that the bills were produced and balance amount [ 50%] was disallowed - HELD THAT:- Even though the Tribunal has given complete benefit of the expenditure claimed by assessee in terms of 115WB read with Section 115WC of the Income Tax Act, 1961 [in short, “the Act”], the respondent/assessee would be quite satisfied if the order of the CIT(A) is sustained instead.
As revenue, says that this may perhaps be the best outcome, given the fact that this is the matter which pertains to AY 2008-09 and even if this Court were to remand the matter to the AO, it will be difficult for the respondent/assessee to produce the record.
Since substantial number of bills were produced by the respondent/assessee qua which no defect was found, this may be a reasonable outcome in the present appeal. We tend to agree with the submissions made by both parties impugned order is set aside, and instead the order passed by the CIT(A) is restored.
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2023 (10) TMI 1279 - ITAT JODHPUR
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