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Showing 121 to 140 of 1390 Records
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2023 (6) TMI 1270 - ITAT DELHI
Income accruing or arising in India - bonus is received by the assessee form the Singapore Company in respect of employment services rendered by the assessee in Singapore - Denying relief u/s 90 - HELD THAT:- Assessee herein was a non resident when he was rendering employment in Singapore Company in pursuance of which employment, the assessee was given bonus in June 2011. Also during the period for which bonus is received, the assessee was serving only in Singapore and not in India.
On perusal of the provisions of section 5(1) of the Act, the said bonus income would have to be construed as income accruing or arising to him in India and it is also received during the year by the assessee. Hence, the bonus received by the assessee, being a resident would be taxable for the year under consideration in India.
As in terms of section 90 entire taxes paid by the assessee in Singapore for the very same salary and bonus component, would be eligible for tax credit for the assessee.
We are unable to apprehend ourselves to accept to the tax credit calculation determined by the ld. AO in the instant case by working out @5.92% which has no support from the provisions of Act or in DTAA. Hence, the said determination of foreign tax credit by the AO is hereby rejected.
Direct the ld AO to allow the foreign tax credit in full in respect of tax paid in Singapore for the very same salary and bonus income. Ground raised by the assessee are allowed.
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2023 (6) TMI 1269 - ITAT CHENNAI
Reopening of assessment - bad debts written off disallowed - HELD THAT:- The details of bad debts written off were called for by Ld. AO during the course of original assessment proceedings. The assessee had supplied the requisite details.
After considering the assessee’s reply, AO disallowed bad debts to the extent of Rs. 204.26 Lacs and chose not to make any further addition on this account. There is no further discussion whatsoever in the assessment order, in this regard.
When the complete details were asked for and the same were duly furnished by the assessee and Ld. AO chose to disallow a part of the same, it could rightly be concluded that the issue was duly considered by AO with due application of mind and a conscious decision was taken in the matter.
To reopen the already concluded assessment on the same very issue would be nothing but review of the order and on mere change of opinion which is impermissible as per the decision in the case of CIT vs. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT]. Therefore, impugned order could not be faulted with and we concur with the same.
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2023 (6) TMI 1268 - ITAT BANGALORE
TP Adjustment - Arm's Length Price (ALP) - US-AE transactions and Non-AE transactions - transaction with US-AE as agreed in the MAP may be considered for the transaction with US-AE for such period that is not covered in the MAP - assessee is praying for the rates agreed in the MAP with the US-AE transactions during April to December 2012 to be considered for the transactions between January to March 2013 which is relevant FY to the Assessment Year under consideration which was not considered in MAP - HELD THAT:- It is obvious that the transaction with an entity is to be considered in a consolidated way, and cannot be bifurcated according to the calendar year prevalent in that contracting state.
We therefore direct the Ld.AO/TPO to consider the rate applied in the MAP for the transactions that entered by the assessee with US-AE for the period April 2012 to December 2019 to the transactions that the assessee entered with the US-AE during January 2013 to March 2013.
In respect of non-US transaction, we note that the assessee in the TP study report gave bifurcation of the revenue earned from USAE and non-AE. The relevant extract is placed at page 2 of the 92CA order. Both the transactions are in respect of SWD segment.
We note from the order passed u/s. 92CA that the ALP was computed only having regards to the US-AE transaction. In other words, the Ld.TPO treated the non-AE transaction to be at arms length. This we notice from the computation of ALP of the 92CA order wherein the price received considered by the Ld.TPO pertains to the US-AE transaction alone.
However in the event there is any transaction with a non-AE is considered in a consolidated way in the said amount by the Ld.TPO, the same may be considered in accordance with the ratio laid down in case of J.P. Morgan Services India (P.) Ltd. (2019 (4) TMI 219 - BOMBAY HIGH COURT). Decided in favour of assessee.
Depreciation on computer servers and software at 15% by considering it as plant and machinery - HELD THAT:- We find that the issue is no longer res-integra and has been decided in the case of Mphasis Ltd. [2014 (8) TMI 690 - KARNATAKA HIGH COURT] wherein held that computer accessories such as switches and routers form part of peripherals of computer system and hence entitled to depreciation at 60%. Following the same, we allow this ground by the assessee.
Direct the Ld.AO to grant the depreciation to assessee at 60% on computer servers, software and networking equipments as it falls under the category computers.
Computation of deduction u/s. 10AA - AO reduced the expenditure incurred in foreign currency and communication expenses and insurance expenses as not contributable to the delivery of articles or things or computer software outside India - HELD THAT:- We note that this issue is no longer resintegra by virtue of the decisions passed in case of CIT vs. Mphasis Ltd.[2019 (11) TMI 1383 - SUPREME COURT] held that since the services rendered were in respect of software development or production of computer software which are technical in nature, the said expenses incurred in foreign currency for providing technical services outside India, cannot be excluded from the export turnover.
We direct the Ld.AO to compute the deduction u/s. 10AA in accordance with the principles laid down by Hon’ble Supreme Court hereinabove.
Non-grant of foreign tax credit- AR submitted that relevant documents in respect of the same were filed before the Ld.AO however the same has not been considered - HELD THAT:- In the interest of justice, we remand this issue to the Ld.AO to verify the documents and to consider the claim in accordance with law.
Non-grant of MAT credit - AO has not granted the MAT credit to the extent of difference assessed tax computed under normal provisions of the act and MAT computation - HELD THAT:- We remand this issue to the Ld.AO and direct to compute the MAT credit available to the assessee in accordance with law. Assessee is directed to file relevant details in respect of the same.
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2023 (6) TMI 1267 - ITAT SURAT
Addition on account of profit from future & options - assessee has failed to tender evidence and explanation in this regard - assessee has stated that the figure mentioned in his ledger with regard to individual share brokers and that ascertained in the SCN are different and imaginary - CIT-A deleted the addition as AO 's working of net gain from the brokers gain/loss statement is misleading figure and not the actual profits - HELD THAT:- The main reason for discrepancies as analysed by the CIT(A) and noted by CIT(A) that in the working profits from Motilal Oswal Sec. Ltd., all the transactional value of F & O rolled over was misread as profits by the AO - Once this column of rolled over F & O transaction are considered properly, the assessee’s profit working was found to be correct.
Similarly, in the case of Jainam Share, the share trading and commodity trading transactions were added with F & O transactions leading to incorrect loss figure. CIT(A) held that the difference in profits worked out by the AO from Future & Option transactions are incorrect and not sustainable.
Thus, the addition was deleted and only addition pertaining to incorrect loss computation by the assessee was confirmed by ld CIT(A). There is no infirmity in the order passed by ld CIT(A). Grounds of appeal of the Revenue are dismissed.
Unexplained increase in capital - CIT(A) deleted the addition as held that the capital accumulation was fully explained by assessee on the basis of capital in the Income Tax Return and accumulated incomes duly shown in the return of income - HELD THAT:- The assessee has furnished summary of capital balance starting from AY 2011-12 taking capital as on 31.03.2011 and duly explained capital accumulation till current assessment year. CIT(A) after considering submissions and explanations of the assessee, observed that the capital accumulation was fully explained by the assessee on the basis of capital in the Income Tax Return of assessment year 2011-12 and accumulated incomes duly shown in the return of income for assessment years 2012-13, 2013- 14, 2014-15 and current assessment year. In the remand report on this issue, the Assessing Officer has not given any adverse comments, therefore CIT(A) held that the addition is not sustainable in the eye of law and deleted the addition. We have gone through the above findings of ld CIT(A) and noted that conclusions arrived at by the CIT(A) are correct and admit no interference by us. We, approve and confirm the order of the CIT(A) and dismiss ground No.2 raised by the Revenue.
Addition of investments in Future & Option and equities - CIT-A deleted the addition - HELD THAT:- No concrete findings of defects in assessee’s submission could be pointed out by the assessing officer. AO had accepted the withdrawals from firms and bank transfers upto Rs. 62,95,655/-and adding the profits on F&O, STCG, LTCG and other profits duly adds upto investments of Rs. 1,49,96,114/-. Thus, assessee’s explanation of source of fund for Rs. 1,49,65,879/- was found to be duly explained. Hence, CIT(A), based on the above facts, held that there is no case for sustaining addition as unexplained investment, therefore CIT(A) deleted the same. As gone through the above findings of CIT(A) and noted that conclusion reached by ld CIT(A) is correct therefore we agree with the findings of ld CIT(A) and dismiss ground No.3 raised by the revenue.
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2023 (6) TMI 1266 - ITAT RAJKOT
Levy of penalty u/s 271(1)(c) - Addition confirmed by CIT(A) for concealment of income - HELD THAT:- We find that the quantum proceeding and the penalty proceeding are different. Any addition or disallowances made under quantum proceeding do not ipso facto empower the revenue authority to levy penalty u/s 271(1)(c) - In the penalty proceeding it has to be proved by the revenue based on cogent material that the assessee has either concealed income or furnished inaccurate particulars of income.
Disallowances made during the quantum proceeding is of interest expenses which was considered as excessive by the Revenue authority - What is transpired that it is not the case that claim of the assessee altogether found incorrect or assessee has not incurred such interest expenses. As such it is a case where revenue authority was of opinion that the assessee was paying interest at excessive rate as compared to market rate.
Hence, in our considered opinion, the same does not amount to concealment of income or furnishing incorrect particular of income. Penalty u/s 271(1)(c) of the cannot be levied merely for the reason that certain claim made by the assessee is not allowable or excessive in the opinion of revenue authority. In holding so we draw support and guidance from the judgment of Reliance Petroproducts Pvt .Ltd [2010 (3) TMI 80 - SUPREME COURT]
The addition made was based on estimation of reasonable rate of interest. As such the assessee paid interest at different rate, the AO estimated different and the learned CIT-A further estimated different rate of interest. It settled position of law by the various High Court that the no penalty under section 271(1)(c) can be sustained in case of estimated addition. See Norton Electronics System Pvt. Ltd [2014 (2) TMI 606 - ALLAHABAD HIGH COURT] - Thus in view of the above discussion we are of the opinion that no penalty u/s 271(1)(c) of the Act can be levied on addition/disallowances of interest expenditure found to excessive as compared to market rate.
Nature of expenses - computer repair maintenance expenses and excess depreciation - purchase of computer to be treated as revenue or capital expenditure - HELD THAT:- Again it is case of difference of opinion where assessee claimed certain deduction in the return of income which was not accepted by the AO. Hence, the question of concealment of income or furnishing inaccurate particular of income does not arise as held by the Hon’ble Supreme Court in case Reliance Petroproducts Pvt .Ltd (supra). Therefore, we are of the opinion that no penalty under section 271(1)(c) of the Act can be levied on addition/disallowances of computer repair maintenance expenses and excess depreciation.
Disallowances against Credit card expense and computer expenses respectively for the reason that same were either not supported by the documentary evidences or held as personal in nature - The question has been answered in preceding paragraph of this order that the quantum and penalty proceeding are different and any addition/disallowances made in quantum proceeding do not ipso facto empower the revenue authority to levy penalty under section 271(1)(c) - As such revenue authority have to prove based on cogent material that the assessee has concealed income willfully with mala fide intension.
There is no such finding of the Revenue authority in the penalty proceeding. Further considering the amount involve we do not agree with contention of the revenue of authority that the assessee concealed his income by claiming deduction of impugned credit card expense and computer expenses. We hereby set aside the finding of the learned CIT(A) and direct the AO to delete the penalty levied - Decided in favour of assessee.
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2023 (6) TMI 1265 - ITAT AHMEDABAD
Disallowance being 10% of office expenses - HELD THAT:- As we note that ITAT Ahmedabad in the assessee’s own case for assessment year 2007- 08 [2010 (7) TMI 1222 - ITAT AHMEDABAD] allowed the appeal of the assessee on this identical issue as held no quantum of amount is specified as to how which expenditure was not supported by any bills/vouchers. AO has also not pointed out as to which of the expenditure was inadmissible in nature. It, therefore, appears that the AO has made ad hoc addition of 15% out of the total expenditure. - Decided in favour of assessee.
Disallowance of Attimari Coolie expenses - CIT(Appeals) held that considering the fact that the entire expenditure has been made in cash, the genuineness of expense cannot be verified, accordingly disallowed 25% of such expenses u/s 37 - HELD THAT:- As decided in assessee own case [2018 (7) TMI 2312 - ITAT MUMBAI] as held as the assessee filed ledger account of Attimari Coolie Expenses and also vouchers for payment of such charges on sample basis.Going by the decision of G.G. Joshi [1993 (9) TMI 39 - GUJARAT HIGH COURT] and findings of CIT(A), we find no infirmity in the order of CIT(A). Hence, this issue of Revenue’s appeal is dismissed.
Inclusion of excise duty component in the closing stock of consumables - HELD THAT:- As excise law, an assessee incurs liability to pay excise duty only upon both events taking place, namely, manufacture of excisable goods and removal of excisable goods and for purpose of Income-tax Act, position in law is not different. Therefore, excise duty cannot be included in value of closing stock of finished goods at end of accounting period. In view of the above decisions including one rendered by the jurisdictional Gujarat High Court in the case of Narmada Chematur Petrochemicals [2010 (4) TMI 1198 - GUJARAT HIGH COURT] ground number 4 of the assessee’s appeal is allowed.
Disallowance out of consultancy expenses by treating the expenses as capital in nature - HELD THAT:- The assessee has produced copy of the contract with M/s B.J. Services for our perusal as wellwhich indicates that these expenses have been incurred for carrying out high pressure pneumatic testing of piping system by use of liquid / gaseous nitrogen and the same have been incurred during the course of business of the assessee. As in the appellate order, Ld. CIT(A) has not given any specific reason why these expenses are required to be capitalized by the assessee, incurred during the course of execution of contract of the assessee with M/s Toyo Engineering.
Therefore, services are revenue in nature - CIT(A) also required the assessee to capitalize some other expenses viz. management consultancy for software development and management consultancy fee for finance matters etc., however no specific reason has been assigned why the above expenses were required to be capitalized by the assessee. We are of the considered view that the expenses are revenue in nature and in the light of above discussion, ground Number 5 of the assessee’s appeal is allowed.
Penalty u/s 271(1)(c) - ITAT has restricted the disallowance to 25% of the expenses on estimated basis - HELD THAT:- In the case of Vision Research & Management (P.) Ltd [2014 (11) TMI 1228 - ITAT LUCKNOW] ITAT held that imposition of penalty upon assessee u/s 271(1)(c) on basis of ad hoc and estimated disallowance/addition, without bringing any clinching material suggesting concealment of income or furnishing of inaccurate particulars of income, was not justified.
Again, in the case of Gurunanak Oil Agency [2013 (3) TMI 718 - ITAT JODHPUR]held that where additions were based on estimated disallowance of expenses, penalty under section 271(1)(c) could not be imposed. In view of the above, we are of the considered view that this is not a fit case of imposition of penalty. Decided in favour of assessee.
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2023 (6) TMI 1264 - MADRAS HIGH COURT
Joint properties purchased by husband and wife [housewife] - legal owner - exclusive right over the properties - Property purchased out of the monies earned by the plaintiff [husband] and by the indirect contribution made by 1st defendant [wife] - plaintiff was working abroad and sending money to the 1st defendant [wife] - suit properties, items 1 to 4 were purchased in the name of the 1st defendant benami out of the money sent by the plaintiff while he was in abroad and that the plaintiff took possession and managed the said properties as his own properties after returning from abroad - 1st defendant failed to prove that she had sufficient funds of her own to purchase the 4th item of the suit properties.
The plaintiff and the 1st defendant are husband and wife, married as living in Neyveli. The plaintiff got a job in a Steel Company in Saudi Arabia, and left for Saudi Arabia, the 1st defendant [wife] continued to live in Neyveli children and she was entrusted with the funds of the plaintiff - During his visit to India between 1983 and 1994, he brought various articles of value, jewellery and cash. The 1st defendant [wife] had no income of her own and was only managing and administering the affairs of the plaintiff prudently and operating the accounts and thus was acting in effect as the agent in a fiduciary capacity. While managing the affairs of the plaintiff, she purchased items 1 to 4 properties on behalf of the plaintiff utilizing the funds of the plaintiff.
HELD THAT:- This Court is of the considered view that the 1st defendant/wife has contributed equally, though not directly but indirectly by way of looking after the home and taking care of the family for more than a decade and managing the household chores, thereby releasing the husband for gainful employment and made his stay comfortable in abroad and also to reduce the expenses and save the money for future benefit of the family including for purchasing of the assets.
Though the properties purchased in the name of the 1st defendant, she alone cannot claim exclusive right over the properties merely because the title deed is in her name since the documentary evidence would establish that the 1st defendant/wife purchased the properties out of the direct financial contribution of the plaintiff also.
Likewise, the plaintiff also cannot claim absolute right merely on the basis that he had sent the money to purchase the properties and the 1st defendant is only holding the property in trust as ostensible title over the properties in fiduciary capacity, as already discussed based on Ex.A1 to Ex.A11, this Court arrives at the conclusion that since Item Nos.1 and 2 have been purchased from and out joint contribution of spouses, viz., the plaintiff by earning and the 1st defendant indirectly by way of her invaluable services as home maker, whereby reducing the expenses of her husband which lead her husband to save more and this way the wife had contributed indirectly to purchase the property item Nos.1 and 2, which aspect cannot be ignored as the same could be decided based on Ex.A1 to Ex.A11.
This Court has no hesitation to hold both the plaintiff and the 1st defendant are entitled to equal shares in the present facts of the case over the Item Nos.1 and 2 of the schedule mentioned properties and to that extent the judgment and decree of the First Appellate Court are set aside.
Item No.4 of the schedule mentioned properties - 1st defendant also failed to produce any documentary proof to show that this property was purchased by selling her ancestral property. In the absence of the documentary evidences on the part of the 1st defendant, a presumption can be drawn by this Court to the effect that this property was purchased from and out of the monies earned by the plaintiff and by the indirect contribution made by the first respondent and further as stated above, both the spouses, have directly or indirectly contributed in acquiring the properties, likewise, the item No.4 also. Accordingly, this Court holds that both the plaintiff and the 1st defendant are entitled to equal share over the item No.4 of the schedule mentioned properties and to that extent the judgment and decree of the First Appellate Court is set aside.
No hesitation to hold both the plaintiff and the 1st defendant are entitled to equal shares in the present facts of the case over the Item Nos.1 and 2 of the schedule mentioned properties and to that extent the judgment and decree of the First Appellate Court are set aside.
Benami transaction - As benami transaction would not attract in respect of the properties purchased for the benefit of the husband and the 1st defendant is only holding the property in trust for the benefit of her husband. Though they have taken a stand that the Benami Transactions would not be applicable, this Court already arrived at the conclusion that the suit properties have been purchased by the joint contribution made by the plaintiff and the 1st defendant equally, Section 3, 4 or 5 of the Benami Transaction Act would not attract in the present case.
This Court is of the view that Item Nos. 1, 2 and 4 of the schedule mentioned properties were purchased from and out of the joint contribution made by both the plaintiff and the 1st defendant and they are entitled to equal shares over the item Nos.1, 2 and 4 of the schedule mentioned properties. Accordingly, the Substantial Questions of Law Nos.2, 4, 5, 6 and 7 are answered.
Property of a female Hindu to be her absolute property - 3rd item of the suit properties was purchased by the 1st defendant by pledging her jewels and that she is the owner of the said property - When this property was purchased in the name of the 1st defendant by pledging her jewels, it should be considered that the 1st defendant alone is the full owner of the property and not a limited owner. Merely the plaintiff/husband helped her for redeeming the jewels, would no way, create a right in his favour over the property. Only Ex.A15 shows that the jewels were redeemed out of the monies received from the plaintiff. ExA14 is the document, which establishes that the money had been received by pledging the 1st defendant/wife's jewels for the purchase of Item No.3 of the schedule mentioned properties. Therefore, I do not find any error in the judgement of the First Appellate Court in holding that the Item No.3 of the schedule mentioned properties belongs to the 1st defendant only.
Jewels in the 5th item locker were purchased by the plaintiff for the benefit of the 1st defendant and that the plaintiff is not entitled to the same - relationship of husband and wife between the plaintiff and the 1st defendant came to an end by dissolution of the marriage - The correspondences took place between the 1st defendant and the plaintiff, clearly reveals that the plaintiff had not bought the same on his own volition, but only on requests made by the 1st defendant persistently to gift her jewels, the plaintiff in order to fullfill her wishes, bought the jewels, sarees, etc., and presented her. Therefore, once he presented the gifts, he is not entitled to claim it back though he purchased out of his own earnings. Therefore, this Court is of the view that the Item No.5 of the schedule mentioned properties belongs to the 1st defendant. Thus, do not find any error in the judgment and decree of the First Appellate Court on this aspect of Item No.5. Accordingly, the substantial question of law No.3 is answered in favour of the 1st defendant.
This Court holds as regards Item Nos. 1, 2 and 4 of the schedule mentioned properties, that both the plaintiff and the 1st defendant are entitled to half share each and as far as Item No.3 and 5 of the schedule mentioned property are concerned, the 1st defendant is the absolute owner of the same.
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2023 (6) TMI 1263 - MADRAS HIGH COURT
Benami transaction - Relief of declaration and partition seeked - suit for declaration as the co-owner to the extent of 21,000 Sq.ft of the suit property and for consequential relief of partition and separate possession of plaintiff's share in the suit property - plaintiff also sought for the relief of permanent injunction restraining the defendants from encumbering the suit property or changing the physical features of the suit property by putting up construction -Whether plaintiff is entitled to the relief of declaration that the plaintiff is the owner of 21,000 sq.ft out of 85,949 sq.ft in the suit schedule property? - Whether the plaintiff is entitled to the relief of partition by metes and bounds as prayed for?
HELD THAT:- Admittedly, in this case, there is no written documents, in support of the plaintiff's plea that there was a partnership arrangement between the parties to develop the suit property and share the profits. The learned senior counsel appearing for the plaintiff empathetically submitted that the partnership arrangement can be formed even orally and it is not necessary that it should be only by way of written documents.
As rightly contended by defendants even in the plaint averments, the plea regarding the oral partnership is very vague and bereft of material particulars. The plaintiff has not pleaded the date, place etc., in which the oral agreement was entered into. There is no plea in whose presence the oral arrangement between the parties was entered into. Even during trial, the plaintiff has not examined any independent witnesses in support of the oral partnership agreement. Therefore, except the interested testimony of PW.1, there is no other acceptable evidence available on record to suggest oral partnership agreement. In such circumstances, we cannot come to a conclusion that there was an oral partnership agreement between the plaintiff and the contesting defendants.
Main legal plea raised by the contesting defendants is that the plaintiff is not entitled to maintain a suit prayer that he is a co-owner of the suit property on the ground that he contributed financially for purchase of the suit property - As there is some evidence available on record atleast to show that the plaintiff contributed to the extent of Rs. 96,38,266/- to enable the first defendant to acquire land with an extent of 9168 sq.ft. However, there is no evidence available on record to support the case of the plaintiff that he contributed Rs. 2,16,38,266/- to enable the first defendant purchased the suit property to the extent of 21,000 sq.ft.
In any event, even assuming the suit property was purchased by first defendant out of the contribution made by the plaintiff, it is the case of the plaintiff that it was purchased in the name of the first defendant for the benefit of future business entity to be formed by plaintiff and the defendants 1, 9 and 10. Therefore, it can only be treated as property purchased in the name of first defendant for the benefit of plaintiff and the contesting defendants. In such circumstances, the same would come under the Prohibition of Benami Property Transaction Act, as per the definition contained in Prohibition of Benami Transaction Act.
As far as contention raised by the learned Senior Counsel for the plaintiff that the 1st defendant stands in fiduciary capacity and hence exception recognized under Benami Prohibition Act gets attracted, is concerned, as discussed earlier, this Court already concluded that the plea of oral partnership was not proved by plaintiff. Hence, there is no fiduciary relationship between the plaintiff and the 1st defendant.
The plaintiff cannot seek a declaration that he is the co-owner of the property and for consequential relief of partition and permanent injunction in view of the specific bar contained under Section 4 of the Act.
This Court comes to a conclusion that the suit is barred by Section 4 of Prohibition of Benami Property Transaction Act even assuming the plaintiff proved that he contributed for purchase of the suit property in the name of the first defendant. Therefore, issues No.3 and 4 are answered against the plaintiff.
Relief of declaration and partition as prayed for denied - The plaintiff is not entitled to any relief and the suit is dismissed.
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2023 (6) TMI 1262 - BOMBAY HIGH COURT
Seeking release of seized export goods - Potassium Gold Cyanide (PGC) - related precious metals like Gold Bars, Strips, and Dust - case of Revenue is that as the issues are pending consideration of the department, the reliefs as prayed for in the petition are not to be considered at this stage, as the petition according to him itself is premature.
HELD THAT:- In the facts and circumstances of the present case, it is opined that the concerned Authorities need to adjudicate the show cause notices dated 1st July 2022 and dated 5th July 2022, as expeditiously as possible and in accordance with law.
The proceedings arising from the provisional release are already pending before the Tribunal, and as the present proceedings are pending, the said appeal was not being heard - the Tribunal is requested to take up the appeal and decide the same as expeditiously as possible and within a period of three months from today.
Petition disposed off.
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2023 (6) TMI 1261 - CALCUTTA HIGH COURT
Levy of Penalty on Customs Broker License - Failure to advice their client only to comply with the provisions of the Customs Act and other allied acts and rules and regulation - failure to verify the correctness of Importer Exporter Code (IEC) number, goods and services tax identification tax (GSTIN) identity of client - Contravention of regulation 10(d) and regulation 10(n) of The CBLR.
Failure to advice their client only to comply with the provisions of the Customs Act and other allied acts and rules and regulation - HELD THAT:- The learned Tribunal on facts found that the value as has been given in the Bill of Entry was enhanced by the approved valuer and further enhanced by the assessing officer of the Customs Department. Therefore, the learned Tribunal came to the conclusion that in the background of those facts the respondent Customs Broker cannot be held guilty for not able to find out correct value of the goods, as could be seen from the facts of the case that the valuation which was done by the department was much higher than the valuation as suggested by the Government approved valuer which was higher than the value which was declared in the Bill of Entry filed by the respondent. Therefore, on facts the tribunal has come to such a conclusion, we cannot disturb the said finding while examining the correctness of the order passed by the learned tribunal in an appeal filed under section 130 of the Act as we are required to see whether any substantial question of law arises for consideration. Therefore, the factual finding rendered by the tribunal cannot be interfered.
Failure to verify the correctness of Importer Exporter Code (IEC) number, goods and services tax identification tax (GSTIN) identity of client - HELD THAT:- The Tribunal noted that admittedly the appellant has taken up such verification on the basis of the documents which were available in the Government website and this was held to be sufficient compliance of regulation 10(n) of the Act - the Tribunal on facts found that it is not the case of the revenue that the documents for undertaking the KYC of the importer were not taken by the respondents and the only allegation was that the respondent Customs Broker had not physically met and physically verified the premises.
The matter being entirely factual no substantial question of law arises for consideration in this appeal - Appeal of Revenue dismissed.
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2023 (6) TMI 1260 - BOMBAY HIGH COURT
Levy of interest during the period of protection granted by the High Court - Imposition of safeguard duties - imports of Aluminum Foil - Interim order was being passed by the Court with effect from 19th August 2009, an amendment came to be incorporated to the provisions of Section 8C of the Act by insertion of Sub-section (5A) by Finance No. 2 Act, 2009 with retrospective effect - The protection was vacated as on 11.6.2010 - HELD THAT:- It is not in dispute that the proceedings have remained pending as they stood on 11th June 2010, that is when the Court passed the modified interim order. Never an application was made by the Respondents after 11th June 2010 for vacating of the said orders. The Bank Guarantee as furnished by the Petitioner in pursuance of the order dated 11th June 2010 passed by the Court, has continued to remain with the Respondents, the validity of which has been extended from time to time. The bond as furnished by the Petitioner also has continued to remain valid. Almost about 13 years having lapsed after the order dated 11th June 2010, the Respondents are yet to pass a final assessment order. However in the intervening period there was a self-assessment as made by the Petitioner in the year 2017, in pursuance of which the Petitioner deposited duty amounting to Rs. 97,44,034/-.
When the interim protection granted to the Petitioner continuous to operate the only apprehension of the Petitioner, today is that although the Respondents may take forward the matter to pass a final assessment order, however, in the peculiar facts and circumstances of the case and more particularly in view of the interim order passed by this Court dated 8th May 2009, as modified by order dated 11th June 2010, in the final assessment order which may be passed, the Petitioners ought not to be subjected to the levy/payment of interest. Such apprehension of the Petitioner is in the light of the letter of Assistant Commissioner (H) dated 28th March 2017, addressed to the Petitioner a copy of which has been placed on record.
This is certainly not a case where the Petitioner ought to be foisted with interest under Section 28AA of the Customs Act as made applicable by Sub-section 5A of Section 8C of the Customs Tariff Act. It may be observed that the Respondents also, were in no manner aggrieved by the self-assessment as undertaken by the Petitioner under which duty was paid - the Respondents are directed to proceed to pass a final assessment order, however, without levy of any interest on the assessment which may be arrived.
Application disposed off.
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2023 (6) TMI 1259 - GUJARAT HIGH COURT
Maintainability of appeal - import of Superior Kerosene Oil (SKO) or not - prohibited goods or not - discharge of burden of prove - re-testing of the samples - mis-declaration and mis-classifications of goods - absolute confiscation - penalty - HELD THAT:- It is required to be noted that whether the subject goods fall within one category or other would essentially be a question of fact. However, even while deciding the same, if the Tribunal overlooks certain basic principles of law applicable to the case on hand and records a finding which could be termed as perverse, then definitely, such decision of the Tribunal would give rise to a question of law.
In the case of Rajkamal Industrial Pvt. Ltd. [2022 (2) TMI 264 - GUJARAT HIGH COURT], this Court held Where the determination of an issue depends upon the appreciation of evidence or materials resulting in ascertainment of basic facts without application of any principle of law, the issue raises a mere question of fact.
In the present case, to arrive at the conclusion that the product is SKO, there are eight parameters which need to be tested. As per the Test Report, three parameters were tested. However, the Test Report of the Chemical Examiner categorically suggests that the goods imported by the importer are meeting with the specification of Kerosene - In the case of Rajkamal Industrial Pvt. Ltd., 14 parameters were tested and on the basis of the report submitted by the concerned laboratories, this Court has, after applying the principle of “reasonable doubt” and “preponderance of probability” quashed and set aside the order passed by the learned CESTAT and the Tax Appeals filed by the Revenue were allowed.
The appeal is admitted for considering the following substantial questions of law:
(i) Whether the Tribunal was right in holding that the Department has not discharged the onus to establish the cargo as Superior Kerosene Oil (SKO)?
(ii) Whether in the facts and circumstances of the case, the CESTAT was correct discarding Chemical Examiner’s Report as inconclusive, especially when the importer had not sought re-testing of the samples before the Original Adjudicating Authority or during investigation?
(iii) Whether in the facts and circumstances of the case, the CESTAT was correct in setting aside the directions of absolute confiscation of Prohibited Goods under section 111(d), 111(m), 111(o) & 118 and penalty under section 112(a) of the Customs Act by the Adjudicating Authority, despite the mis-declaration and mis-classifications of goods?
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2023 (6) TMI 1258 - CESTAT CHENNAI
Classification of imported goods - tomato dry flavour - to be classified under CTH 3302 1010 or under Tariff Item 2106 9060? - benefit of exemption of concessional rate of Basic Customs Duty (BCD) of 10% under Customs Notification No. 21/2002, Sl.No.119 - HELD THAT:- The appellant’s submission is that the subject goods consists of various odoriferous substances and what is imported i.e., the tomato flavour, is of synthetic origin, which makes it classifiable under CTH 3302 1010. The Ld. adjudicating authority has relied on Chapter Note 2 to Chapter 33 of the Customs Tariff Act, 1975, which states that “odoriferous substances” in Chapter Heading 3302 refers only to substances of Chapter Heading 3301 to odoriferous constituents isolated from those substances or to synthetic aromatics, and also referred to the HSN, which states that the goods which qualify for classification under Chapter Heading 3302 should be mixtures, whether or not combined with a diluent or carrier or containing alcohol, of products of other Chapters (e.g., spices) with one or more odoriferous substances (essential oils, resinoids, extracted oleoresins or synthetic aromatics), provided these substances form the basis of the mixture.
The odoriferous substances can be of synthetic origin, which fact is omitted to be noted by the Ld. adjudicating authority. The appellant has been arguing that the tomato flavour is of synthetic origin though it may contain some natural odoriferous substances and it cannot be directly or indirectly used in food preparations. In this regard, the appellant has also put forth that it is not necessary that it should be made of essential oil, resinoid or oleoresin alone to merit classification under Chapter Heading 3302 and that in any case, the product contains garlic oil, which is an oleoresin - A closer study indicates that the item which is imported is of synthetic origin and consists of odoriferous substances, which is an industrial raw material for making food flavours and the same cannot be directly used in any food preparations for human consumption.
Chapter Heading 3302 covers both natural and/or synthetic mixtures of odoriferous substances - the item imported is correctly classifiable under CTH 3302 1010 of the Customs Tariff Act, 1975.
Appeal allowed.
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2023 (6) TMI 1257 - CESTAT CHENNAI
Doctrine of Merger - Appeal dismissed on being time barred - Project Import - Exemption from duty of customs - failure on the part of the importer to meet the Project Import regulations - HELD THAT:- In the first round of litigation before this forum, an appeal was filed by the importer and this Bench, after hearing both sides and after waiving the pre-deposit in V. Mohan [2010 (6) TMI 334 - CESTAT, CHENNAI] chose to set aside the impugned order by observing that the appellant had no knowledge of the adjudication against M/s. Powmex Steels Ltd. at any date prior to 28.07.2007. Further, the above order of this Bench has been accepted by both the parties and thus, has attained finality - By the time the above order of this Bench was passed, the second Show Cause Notice dated 27.07.2004 was already on board and we do not see any whisper about the same anywhere in the order of this Bench and in particular, any issue being made as to the Show Cause Notice being issued much after the period of limitation. Hence, we can only say that the contention of the appellant cannot be accepted as, apparently, it has missed the bus.
Further, when the order of this Bench which was passed against the Order-in-Appeal wherein the Order-in-Original was challenged, which was passed on the second Show Cause Notice, has become final now, we have to only hold that by virtue of the doctrine of merger, the orders of the lower authorities have merged with the order of this Bench and it is only consequent to the directions of this Bench that the de novo Order-in-Original dated 26.07.2012 was passed.
The appellant registered its Project Contract for import of capital goods, but it has not disputed the missing of two items which therefore resulted in denying the concurrent benefit of exemption. For this, differential duty was demanded, which is as per law - Appeal dismissed.
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2023 (6) TMI 1256 - CESTAT CHENNAI
Service of SCN - SAD refund - whether the appellant is served with Order-in-Original in time as held in the impugned Order-in-Appeal? - HELD THAT:- The sanction was granted as early as 11.03.2010, and the receipt of the refund has also been acknowledged by the assessee in its various letters addressed to the Revenue authorities, including the Commissioner of Customs. Hence, to say that the sanction was ordered as per the order in original is not correct.
This is the usual practice by the original authority wherein the Order-in-Original itself contains the printed number of the order as well as the date. There is some insertion by hand, but unfortunately, there are no initial for carrying out the correction or insertion which is essential; hence, the said insertions do not impress us. But in any case, as it is observed that the date of sanction was much earlier, the contentions of the assessee is accepted that it did not receive the Order-in-Original until 06.01.2011, when it had an occasion to meet the Commissioner of Customs (Export). These facts are not disputed by the Revenue - the impugned order, insofar as it relates to the issue on limitation, deserves to be set aside as unsustainable.
The first appellate authority has not given any findings on the merits of the case, though he has discussed about the same in the impugned order - it is deemed appropriate that matter remanded back to the file of the first appellate authority for disposal of the appeal on merit alone, since it is satisfied that there is no delay in filing the appeal before the first appellate authority.
The appeal of the appellant stands allowed by way of remand.
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2023 (6) TMI 1255 - CESTAT CHENNAI
Refund of Customs Duty paid - Assessment of Bill of Entry not challenged - Import of non-coking coal in bulk - assessable value was worked out by adding 2% of CIF value on high seal sales load at the time of assessment of import of goods, which the assessee wanted to be re-assessed by adding Rs.33/- per M.T. - whether the incidence of duty has been passed on to the ultimate consumer? - Right to appeal.
HELD THAT:- Value addition, if any, as prescribed under Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, could always be a point of dispute since a claim for such addition by an importer needs to be supported by documentary evidence, to the satisfaction of the adjudicating authority. Further, the satisfaction of the assessing officer / adjudicating authority is paramount since he is the proper officer under the statute who is to be satisfied in the first place as to such claims by an importer. Hence, these aspects could only be considered during adjudication proceedings and not in any other proceedings.
It is the settled position of law that the right to appeal is available to an assessee as well as the Department, even against self-assessment; until and unless the “self-assessment” is modified and the duty thereafter is re-determined, no application would lie for refund of any duty from such self-assessment since the refund authority cannot assume the role of an adjudicating / assessing authority. This is because the scope of refund is limited as against the scope of adjudication proceedings and hence, the authority considering any refund application cannot revisit the adjudication proceedings for which he has no jurisdiction. This is also in view of separate statutory provisions being provided for, for both refund as well as adjudication proceedings.
The Hon’ble Supreme Court in the case of M/s. ITC Ltd. [2019 (9) TMI 802 - SUPREME COURT] has held that even an order of self-assessment is an order against which an appeal would lie, provisions of Section 27 cannot be invoked in the absence of amendment or modification having been made in the bill-of-entry and that refund proceedings are in the nature of execution for refunding amount.
The refund application is clearly not maintainable by applying the ratio decidendi in M/s. ITC Ltd. - Appeal of Revenue allowed.
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2023 (6) TMI 1254 - CESTAT KOLKATA
EPCG License - cancellation on the ground that the Appellant was not entitled to import the capital goods under concessional rate of Customs Duty - seeking waiver of interest and penalty - HELD THAT:- The facts are not in dispute and both sides agree that the EPCG Licences were issued in 2007 but were cancelled by DGFT in 2013. So far as the Customs Duty initially saved is concerned, in terms of Notification No.97/2004-Cus and 64/2008-Cus, the Appellant has the liability to discharge the Customs Duty along with applicable interest as per Para 2(5) of these Notifications, if the conditions of these Notifications are not fulfilled. Therefore when Licence has been cancelled and Customs Duty is paid, the interest liability on such Customs Duty payment cannot be waived. Hence, the prayer of the Appellant to waive the interest is rejected.
However, going through the documents submitted by them, it is seen that the Appellant has written a letter on 30/12/2013 submitted to the Department on 02/01/2014 wherein they have requested to Commissioner to realize the Customs Duty by encashing the Bank Guarantee. It is seen from letter F. No. S60(MISC)-265/14A.EPCG dated 12/08/2016 issued by the office of the Deputy Commissioner of Customs, the Bank Gurantee has been enchased on 07/03/2014 and 25/02/2015. This means that the encashment is after more two months in respect of two Bills of Entry and after about one year four months in respect of the other two Bills of Entry. The Adjudicating Authority is directed to re-calculate and requantify the interest payable by taking the realization date as 03/01/2014 as their consent to the Department for encashment of Bank Guarantee was given on 02/01/2014 itself.
Appeal disposed off.
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2023 (6) TMI 1253 - AUTHORITY FOR ADVANCE RULINGS, CUSTOMS NEW DELHI
Benefit of exemption from customs duty - Uninterrupted Power Supply - General purpose UPS or to be used with automatic data processing machine (ADP) - merits classification under Sub-heading 85044090 of the First Schedule to the Customs Tariff Act, 1975 or not
HELD THAT:- Even if words, 'solely and principally' have not been used to describe usage of static converter for applicability of notification; the words and phrases used in the notification are sufficient to suggest and clarify that exemption from Basic Custom Duty is applicable to only those static converters which are meant for automatic data processing machine and units thereof, and telecommunication apparatus other than static converters for cellular mobile phones; - The applicant has wrongly interpreted the notification by stating that UPS proposed to be imported by the applicant are intended to be used in operation of machines which either ultimately qualify as Telecommunication apparatus or ADP machine or where ADP machine is an integral part of the whole machine/system
The subject goods which are meant only for automatic data processing machine and units thereof, and telecommunication apparatus other than static converters for cellular mobile phones are eligible for exemption from Basic Customs Duty under serial number 4 of the notification No 25/2005-Cus. dated 01.03.2005. Such exemption is not available to static converters meant for machines of healthcare, infrastructure sector etc., machines which can indirectly be considered as ADP machine etc.
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2023 (6) TMI 1252 - SC ORDER
Penalty for violation of Section 15HB of SEBI Act, 1992 - justification for the Tribunal to reduce the penalty below Rs. 1,00,000/- which is the minimum as permissible - HELD THAT:- Tribunal has not taken into consideration the effect and mandate of Section 15HB of the SEBI Act, 1992.
Taking into consideration the facts and circumstances of this case, there appears no justification in calling upon the respondent and we modify the order impugned and the penalty of Rs.75,000/- as inflicted upon noticee no.5 (Mr. Sandip Ray) and noticee no.6 (Mr. Rajkumar Sharma), as referred to in para no. 13 of the order impugned, is modified and substituted to Rs.1,00,000/- in terms of Section 15HB of SEBI Act, 1992 and with this modification the present appeals stand disposed of.
We make it clear that if the respondents have any objection in reference to the modification made by this Court, they are always at liberty to make an application, if so advised.
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2023 (6) TMI 1251 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI
Seeking to restrain the Respondents from proceeding with the Challenge Process - modification in the Resolution Plan more than once either by way of revision or by way of challenge mechanism - seeking direction to accept the Resolution Plan of the Appellant as submitted on 28/10/2022 - seeking restrain on 1st Respondent from considering any of the Resolution Plans submitted after 20/10/2022.
HELD THAT:- The insertion of Regulation 39(1A) was especially that a objection to maximise the value of the assets and to reduce any delay in timelines by several resubmissions or addendums which the Resolution Applicants seek to submit - The NCLAT, Principal Bench, New Delhi, in VISTRA ITCL (INDIA) LTD. VERSUS TORRENT INVESTMENTS PVT. LTD. & ORS. AND INDUSIND INTERNATIONAL HOLDINGS LTD. VERSUS TORRENT INVESTMENTS PVT. LTD. & ORS. [2023 (3) TMI 176 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] addressed to the question whether Regulation 39(1A) contains an implied prohibition on the jurisdiction of the CoC to enter into any further negotiation with the Resolution Applicant or to further ask the Resolution Applicant to increase its Resolution plan value, where it was held that The Adjudicating Authority further fell into error in coming to a conclusion that there is no power with the CoC to enter into negotiations with the Resolution Applicant, after the Challenge Mechanism and the exercise of the commercial wisdom is circumscribed by the framework for value maximization provided under the Code read with the Regulations.
In the instant Case, keeping in view the facts of the matter that the decision to conduct the Swiss challenge was approved by the CoC by majority of 99.18% during the 43rd Meeting held on 29/12/2022 that the decision of CoC to conduct the Challenge Process is supported by Causes 1.17, 1.18 and 7.2 of the RFRP that the voting window commenced on 06/01/2023 vest the Challenge Process conducted on 04/01/2023 and such voting window remained open upto 16/01/2023 and only after closing the voting lines, the CoC has approved the Resolution Plan of Respondent No. 3 by majority of 94.96%, does not find any violation of Regulation 39 (1A) of the CIRP Regulations or any other provisions of the Code.
There are no substantial reasons to interfere in the well considered Order of the Adjudicating Authority - appeal dismissed.
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