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Showing 121 to 140 of 1482 Records
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2023 (6) TMI 1362
Addition u/s 68 on share capital and premium - absence of identity of the creditors, genuineness and creditworthiness of the entire transaction - ITAT deleted the addition - only reason for making the addition in the hands of the assessee the director of the assessee company did not respond to the summons issued by the assessing officer u/s 131 - HELD THAT:- Non appearance of the director cannot be made a ground for addition in the hands of the assessee under Section 68 of the Act when other evidence relating to the raising of share capital qua the share subscriber were available on record as furnished by the assessee and also cross verified by the assessing officer pursuant to the enquiry conducted in response to the notices issued under Section 133(6) of the Act. Tribunal also referred to the decision of this Court in the case of Crystal Networks Pvt. Ltd. Vs. CIT [2010 (7) TMI 841 - KOLKATA HIGH COURT]
Thus we find that there is no question of law much less substantial question of law arising for consideration in this appeal.
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2023 (6) TMI 1361
Classification of goods - Polypropylene (PP) Flexible Intermediate Bulk Containers (FIBC) bags - to be classifiable under Chapter 6305 or 3923 as ‘Other made-up Textiles Articles’ - applicability of Board’s Circular No.42/2011 and Minutes of the Meeting of DGFT held on 25-7-2013 - HELD THAT:- DGFT and Board’s Circular have clarified that FIBC is classifiable under Chapter Heading 6305; and since there is no test reports relied upon by the Department to claim that it is not of manmade textile material, the classification cannot be concluded under Chapter 39 as ‘Articles for Conveyance or packing of goods made by other plastics’. Both the Board Circular and DGFT have clarified that FIBC is classifiable under 6305 based on the HSN Explanatory Notes to Chapter 39.
Further it is found in the case of CCE vs. Karur KCP Packaging P. Ltd. [2015 (8) TMI 1233 - CESTAT CHENNAI], the Tribunal by relying on the Hon’ble High Court’s decision rendered in the case of Karur KCP Packings Ltd. vs. CC [2015 (9) TMI 976 - MADRAS HIGH COURT], Board Circular and DGFT clarification, held that FIBC is rightly classifiable under 6305 32 00 and not under 3923 29 90.
In view of the above clarifications by the Board and DGFT and relying on the decisions in the case of Karur KCP Packaging P. Ltd. it is held that the goods are rightly classifiable under Chapter Heading 6305 32 00.
Accordingly, the appeal is allowed.
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2023 (6) TMI 1360
Maintainability of appellate order - protection from any coercive action of recovery if 10% of the disputed tax is paid - HELD THAT:- In view of the legal position and availability of alternative remedy, no relief to be granted to the petitioner in this writ petition except granting liberty to the petitioner to file statutory appeal before the appellate authority concerned within 15 days from date, subject to compliance of all other formalities and if petitioner files the statutory appeal within the time stipulated, the appellate authority concerned will not raise the issue of limitation and shall decide such appeal to be filed on merit.
Petition disposed off.
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2023 (6) TMI 1359
Taxability of waiver of loan as used for the purpose of acquisition of capital equipment - HELD THAT:- As assessee submits that the Income Tax Appellate Tribunal has passed the subsequent Order on 05.09.2022 [2022 (9) TMI 1514 - ITAT BANGALORE] and therefore, this Appeal does not survive for consideration and sought leave to withdraw the Appeal. He has filed a Memo of even date to the said effect.
His submission is placed on record. Memo be kept in record.
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2023 (6) TMI 1358
Delayed deposits of employee's share of contribution towards Employee's Provident Fund (EPF) - Addition u/s.36(1)(va) r.w.s. 2(24)(x) - scope of payment within the grace period - whether or not, the employees share of contribution towards EPF deposited by the assessee within the extended/grace period under the EPF Act, 1952 is to be construed as a payment made on or before the due date within the meaning of section 36(1)(va) of the Act? - HELD THAT:- As grace/extended period of 5 days that was available to the assessee for depositing other dues had been withdrawn w.e.f. February, 2016. As the deposits in the case of the assessee were made much prior to the aforesaid cut off date, i.e. February, 2016, therefore, the grace period for making respective payments was duly available to the assessee during the year under consideration.
As the assessee firm in the case before us had deposited the employees share of contribution towards EPF within the grace period under the EPF Act, 1952, therefore, respectfully following the judgment of Hind Filter Ltd. [2017 (12) TMI 810 - BOMBAY HIGH COURT], thus that the said amount could not have been disallowed u/s.36(1)(va) r.w.s 2(24)(x) of the Act.
Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. [2022 (10) TMI 617 - SUPREME COURT] had held that employees share of contribution towards the welfare enactment had to be deposited by the assessee in terms of those enactments and on or before the due dates mandated by such concerned law.
Thus unable to persuade to subscribe to the disallowance of employees share of contribution made by the A.O u/s.36(1)(va) r.w.s 2(24)(x) - disallowance made by the A.O u/s.36(1)(va) r.w.s 2(24)(x) of the Act is herein vacated.
Disallowance of the balance amount qua the delayed deposit of employees share of contribution made by the A.O u/s.36(1)(va) r.w.s 2(24)(x) as the said amount had been deposited by the assessee beyond the "due date", therefore, the A.O had rightly made an addition of the same to the returned income of the assessee. Thus, the Ground of appeal No.2 raised by the assessee is partly allowed in terms of my aforesaid observations.
Disallowance of expenses booked by the assessee under various heads of expenses u/s 37(1) - HELD THAT:- A disallowance of an expenditure claimed by the assessee as a deduction as per the mandate of section 37 of the Act can only be disallowed in case of satisfaction of either of the conditions set out in the said section, viz. (i) the expenditure is in the nature of a capital expenditure or personal expenditure of the assessee; or (ii) that the expenditure had been incurred for any purpose which is an offence or which is prohibited by law. As the A.O had failed to place on record any material which would prove to the hilt that the assessee had either raised a bogus claim of expenditure; or that the said expenditure was not incurred wholly and exclusively for the purpose of business; or that the expenditure so claimed as a deduction did not fall within the four parameters of Section 37 of the Act, therefore, unable to persuade myself to subscribe to the disallowance to the said effect so made by the A.O. Thus, we vacate the disallowance made by the A.O. The Ground of appeal is allowed in favour of assessee.
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2023 (6) TMI 1357
TP Adjustment - MAM selection - whether MAM will be CUP or TNMM - how the transfer pricing adjustment should be made, whether the margins of the comparables have to be taken on simple arithmetic mean of uncontrolled transactions or weighted average - HELD THAT:- As following the decision of the Tribunal in A.Y.2011-12 [2023 (2) TMI 502 - ITAT MUMBAI] we hold that, firstly CUP method is to be applied and secondly, simple average mean brokerage rate should be taken for the comparability purpose.
Whether comparability analysis should be undertaken by considering both overseas and domestic independent clients, i.e., all non-AE transactions for determining the ALP while applying CUP and how much adjustment should be allowed on account of various factors as claimed by the assessee? - The Tribunal has by and large accepted the stand of the assessee to give suitable adjustments on the price determined after CUP. The Tribunal in A.Y.2004-05 [2021 (10) TMI 1349 - ITAT MUMBAI] also followed in A.Y. 2005-06 [2022 (7) TMI 1210 - ITAT MUMBAI], held that adjustment of 40% will be allowed on marketing cost adjustments and research cost.
Thus, respectfully following the order passed by the coordinate bench of the Tribunal in the assessee’s own case cited supra, we direct the AO/TPO to grant adjustment to the extent of 40% to the assessee while determining the arm’s length price of international transaction of brokerage and commission. As a result, ground No. 1.3 raised in assessee’s appeal is partly allowed.
All the adjustments which has been claimed by the assessee has been restricted to 40% by the Tribunal and accordingly, in line with the past precedent, we direct the ld. TPO to make the adjustment of 40% while determining the arm’s length price of international transaction of brokerage and commission. In so far as the contention of assessee that AE has charged higher brokerage rates than average brokerage rates charged by AE with the third parties, it has been admitted that same has been dismissed by the Tribunal. Accordingly, this ground is dismissed.
Grant of benefit of +/-5% u/s. 92C (2), the same has been submitted that direction may be given to allow in accordance with law. Accordingly, the ld. TPO is directed to grant benefit in accordance with Section 92C (2) as in the statute at that point of time.
Depreciation of NSE membership card u/s. 32(1) - HELD THAT:- Issue is covered by the decision of the Tribunal as series of decisions of the Tribunal in A.Y.2000-01, 2001-02 and 2006-07 wherein the Tribunal has allowed the depreciation @25% of BSE and NSE membership.
Disallowance of club membership fees paid by the assessee, the same has been held to allowable by the Tribunal relying upon the judgment of Hon’ble Bombay High Court in the case of Otis Elevator Co. Ltd. vs. CIT [1991 (4) TMI 53 - BOMBAY HIGH COURT] and other decisions of the Jurisdictional High Court. Hence, this ground raised by the Revenue is dismissed.
Disallowance of remuneration paid u/s. 40A(2) - HELD THAT:- As respectfully following the judicial precedents in assessee’s own case, we direct the AO to delete the disallowance made under section 40A(2) of the Act in respect of payment made to Mr Ashith Kampani, who has 18 years of experience in the field of capital market. Identical issue arose in case of assessee for A.Y. 2004-05 where learned CIT(A) deleted the addition which was confirmed by ITAT. In view of this, we find no infirmity in the order of the learned CIT(A) in deleting the disallowance which has been confirmed by ITAT in assessee's own case for earlier years. We also find that the learned Assessing Officer has not given any reason that why the above remuneration is excessive and unreasonable looking to the legitimate needs of the business.
Disallowance of interest u/s. 40A (2)(b) - HELD THAT:- The relevant observation of the Tribunal for A.Y.2002-03 held that here cannot be disallowance of notional interest as computed by AO in respect of interest free security deposit provided by assessee to its sister concern. Notional interest does not fall within the ambit of exception u/s 40A(2)(b) of the Act. AO has not made a case for disallowance of any expenditure and made addition for notional return of interest from deposit. It was further held that the AO made addition to the income of assessee which has not been earned and. therefore, deleted the addition. Before us, neither the Ld. DR brought any contrary law nor any comparable rate of rent in similarly situated property. Moreover, the AO has not made a case of disallowance on the basis of any comparable and simply made addition for notional return of interest free deposit - as decided in Karma Energy [2015 (6) TMI 216 - BOMBAY HIGH COURT] held that where assessee paid lease rent to a group company in respect of wind farm taken on lease, since lease rent was fixed in accordance with formula provided by Indian Renewable Energy Development, a Government of India Company, impugned disallowance made by Assessing Officer under section 40A(2)(b) was to be set aside Thus, when no contrary fact or law is brought to our notice, we affirm the finding of Id CIT(A).
Disallowance of interest on loss on IT & T shares - HELD THAT:- Tribunal in A.Y.2002-03 had deleted the addition as held that since the loss of transaction of IT & T of AY 2001-02 has been allowed as business loss by his predecessor and accordingly, the interest component is married to such loss also assumes the character of business expense and is accordingly allowable and resultantly allowed relief to the assessee. We have further noted that the co-ordinate bench of Tribunal while considering the disallowance in AY 2001-02 held that loss suffered by assessee out of its business of earning commission income and on the principle of matching concept of income and expenditure, the entire loss was allowed in AY 2001-02. We are further in agreement that allowance of interest is merely consequential in the year under consideration. Therefore, we do not find any merit in the ground of appeal.
Disallowance on account of overseas support services have been broadly classified under the head “finance" (controllers, treasury and tax, information technology, legal and compliance and HR) - HELD THAT:- Nowhere the nature of intra-group services and how the services has been rendered and utilised have been analysed by the Tribunal nor any of the tests for examining the arm’s length price for such services has been discussed nor any of the tests for examining the arm’s length principle have been looked into
From the perusal of the ld. TPO‟s order as noted above, it is seen that, he has merely noted that assessee had various employees and therefore, there was no requirement or need for such services. Nowhere he is questioned or asked about the rendition of the services or to demonstrate whether there was any duplicative service. Once assessee has given the details, then ld. TPO should have at least asked for the documentation of proving the aforesaid tests and cannot simply determine arm’s length price at "Nil'. Since ld. TPO has not brought anything on record, therefore, we have no option but to follow the earlier year orders even though none of the orders of the Tribunal have considered this aspect. Accordingly, the Revenue cannot substantiate the disallowance of ALP at Nil and accordingly, the Revenue’s appeal is dismissed.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- We hold that disallowance u/s.14A is to be restricted to Rs.1,00,000/- in absence of applicability of Rule 8D in A.Y.2007-08. One of the reasons is that in case of the assessee, disallowance of interest is unjustified because admittedly assessee had more interest free funds exceeding the investments yielding any tax free income and now this issue stands covered by the judgement of the Hon’ble Supreme Court in the case of South India Bank Ltd [2021 (9) TMI 566 - SUPREME COURT] Accordingly, ground No.2 is partly allowed.
TDS u/s 194C/194J - disallowance of lease line charges, VSAT charges paid to stock exchange and transaction charges paid to local depository u/s.40a (ia) - HELD THAT:- It has been brought on record before us that the Tribunal in A.Y.2005-06 and 2006-07 has deleted the disallowance made u/s.40a(ia) and in respect of transaction charges, VSAT and lease line charges to stock exchange in view of the judgment of the Hon‟ble Supreme Court in the case of CIT vs. Kotak Securities Ltd. [2016 (3) TMI 1026 - SUPREME COURT] held that these charges are merely the recovery of the cost of infrastructure support and therefore, neither it falls under section 194J or section 194C of the Act.
Disallowance on account of lease rentals paid for use of vehicles - HELD THAT:- We find that the Tribunal in A.Y.2016-17 [2022 (7) TMI 589 - ITAT MUMBAI] following the order of the Tribunal in A.Y.2005-06 has deleted the said disallowance on the ground that nowhere it has been proved that assessee was the owner of the leased assets. Accordingly, following the earlier year precedents, the claim of the assessee is allowed and the ground raised by the Revenue is dismissed.
Disallowance u/s 14A - assessee had itself made suomoto disallowance under Rule 8D - AO has rejected the explanation and has made the disallowance on the basis of working given by the assessee - HELD THAT:- The assessee had to give reasons as to why disallowance is uncalled having regards to the books of accounts and then only ld. AO can record his satisfaction, whether to accept or reject the explanation given by the assessee. Here in this case, assessee at the very threshold has offered suo-moto disallowance which it rescinded from. Accordingly, the submissions made by the ld. Counsel cannot be accepted. However, interest disallowance is concerned, nothing has been brought on record as to whether the interest free funds exceeds the investments made in which had yielded exempt income. Accordingly, this issue is remanded back to the file of the ld. AO to examine the disallowance u/s.14A and assessee is directed to substantiate its claim as to why no disallowance should be made. With this direction, this ground is treated as allowed for statistical purposes.
Incorrect amount of income under the head "profits and gains from business" - HELD THAT:- It has been noted that rectification application has been filed. Accordingly, we direct the ld. AO to examine this issue and decide the correct amount assessable under the head "profits and gains‟.
TP Adjustment - DRP adopting weighted average methodology in computing the arithmetic mean of Non-AE 2002-03 transactions for arriving at ALP of brokerage charged for CH and DVP trades - HELD THAT:- Since, this issue is covered by the decision of the Tribunal in earlier years where Tribunal has accepted the stand of the Revenue to consider simple average brokerage rate for comparability purpose and that Tribunal has already accepted and directed the AO to consider the brokerage of non-AE for comparability purpose. Thus, in line with the earlier year’s decisions, we hold that weighted average methodology in computing the arithmetic mean is not tenable. Accordingly, this ground is dismissed.
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2023 (6) TMI 1356
Demand of illegal gratification or not - HELD THAT:- In the facts of the case, it was held that there are no circumstances brought on record which will prove the demand for gratification. Therefore, the ingredients of the offence under Section 7 of P.C Act were not established and consequently the offence u/s.13(1)(d) will not be attracted.
In the present case the complainant has deposed before the Court. His evidence does not inspire confidence. Evidence of panch witness is not reliable to prove the demand and acceptance of amount as illegal gratification. The foundation of charge itself is not established. No other circumstances can be relied upon to convict the appellant for the offences for which he is charged.
The prosecution has failed to establish the demand and acceptance of bribe - the conviction is required to be set aside - appeal allowed.
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2023 (6) TMI 1355
Seeking release of consignments in four bills of entry - relevant date for release of goods - HELD THAT:- It is the date of bill of entry that would determine the applicable rate of duty. In such an event, seeing as both the bills of entry are subsequent to the date of notification, these consignments, prima facie, are not entitled for provisional release.
Learned Senior Counsel seeks a short accommodation to respond.
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2023 (6) TMI 1354
Seeking provisional release of goods - used Multifunction Digital Print and Copying Machines - petitioner confirms categorically that enhanced duty will be remitted - HELD THAT:- The impugned order is set aside and the goods shall be released within a period of two weeks from today on payment of enhanced duty.
Petition disposed off.
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2023 (6) TMI 1353
Validity of reassessment order u/s 148A - allegation of bogus purchase made by assessee - HELD THAT:- As appears from the impugned order that the opportunity of being heard was provided to the petitioner along with the copy of information and material relied upon and the assessee petitioner was asked to explain as to why the aforesaid transaction should not be treated as income chargeable to tax which is an escaped assessment.
It also appears from the aforesaid impugned order that notice along with annexure was duly served upon the assessee petitioner through speed post to the registered address of the petitioner and the petitioner was asked to furnish reply to the same before 10th April, 2023 and pursuant to the same assessee has filed reply also and the assessing officer has considered the said reply.
AO has come to a different conclusion but that does not mean that the assessing officer has not given the petitioner any opportunity of hearing or the assessing officer will have to agree with the contention of the petitioner.
Findings against the petitioner based on material evidence cannot be re-appreciated and scrutinised by the Writ Court in exercise of its jurisdiction under Article 226 of the Constitution of India by acting as an assessing officer or an appellate authority. Furthermore petitioner has still ample scope after passing of the order u/s 148A(d) to make out any case if he has in his favour subsequent to the notice u/s 148 of the Act before passing of the final assessment order under Section 147 of the Act.
Thus order u/s 148A(d) of the Act is neither final assessment order nor any demand arises out of the same and even if the order is passed under Section 147 of the Act that itself is also appealable under the statute.
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2023 (6) TMI 1352
Seeking grant of Regular Bail - offences punishable under Sections 409, 419, 465, 467, 468, 471, 120-B and 34 of the Indian Penal Code - HELD THAT:- In the facts and circumstances of the case and considering the nature of allegations made in the FIR and without discussing the evidence in details as well as without going into details, prima-facie, this Court is of the opinion that this is a fit case to exercise the discretion to enlarge the applicant on bail. Hence, the application is allowed and the applicant is ordered to be released on bail in connection with C.R. No. I – 11210015220162 of 2022 with D.C.B. Police Station, District Surat City, on executing a bond of Rs.10,000/- with one surety of the like amount to the satisfaction of the trial Court and subject to the conditions imposed.
Bail application allowed.
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2023 (6) TMI 1351
Criminal conspiracy to cheat BHEL in the matter of award of contract for the construction of desalination plants - Conviction of accused - Section 197 of the Code - correctness of the procedure adopted while granting pardon Under Section 306 of the Code - culpability of each of the Appellants.
Revolving around Section 197 of the Code - HELD THAT:- It must be remembered that in this particular case, the FIR actually implicated only four persons, namely PW-16, A-3, A-4 an A-5. A-1 was not implicated in the FIR. It was only after a confession statement was made by PW-16 in the year 1998 that A-1 was roped in. The allegations against A-1 were that he got into a criminal conspiracy with the others to commit these offences. But the Management of BHEL refused to grant sanction for prosecuting A-3 and A-4, twice, on the ground that the decisions taken were in the realm of commercial wisdom of the Company. If according to the Management of the Company, the very same act of the co-conspirators fell in the realm of commercial wisdom, it is inconceivable that the act of A-1, as part of the criminal conspiracy, fell outside the discharge of his public duty, so as to disentitle him for protection Under Section 197(1) of the Code - the contention advanced on behalf of A-1 is upheld, that the prosecution ought to have taken previous sanction in terms of Section 197(1) of the Code, for prosecuting A-1, for the offences under the Indian Penal Code.
Revolving around grant of pardon - HELD THAT:- The approver was examined as PW-16 during trial and he was cross examined on the contents of the confession statement. The Magistrate who recorded the confession was examined as PW 17 and the Additional Chief Judicial Magistrate who granted pardon was examined as PW-18. The proceedings before the XVIII Metropolitan Magistrate, the petition Under Section 306 of the Code and the proceedings on tender of pardon were marked respectively as EXX. P-50, 51 and 52. All the Accused were given opportunity to cross examine these witnesses both on the procedure and on the contents - there was no violation of the procedure prescribed by Section 306(4)(a) of the Code.
Revolving around the merits of the case qua culpability of each of the Appellants - HELD THAT:- A-1 was found guilty of an offence Under Section 193. Section 193 applies only to false evidence given in any stage of a judicial proceeding or the fabrication of false evidence for the purpose of being used in any stage of a judicial proceeding. The allegation against A-1 was not even remotely linked to any of the Explanations Under Section 193 of the Indian Penal Code. Therefore, the judgment of the Trial Court and that of the High Court convicting A-1 for the aforesaid offences and sentencing him to imprisonment of varying terms and fines of different amounts are liable to be reversed.
A-4 had no role in choosing the tenderers, but entered the picture only after the offers were received from the tenderers. Admittedly, A-4 was subordinate to both PW-16 and A-3 - Thus, the competent authority refused to grant sanction to prosecute A-3 and A-4 for the offences under the PC Act. The Trial Court and the High Court did not find A-4 as a co-conspirator, which is why he was not held guilty of the offence Under Section 120-B Indian Penal Code. Section 193 Indian Penal Code had been included completely out of context - the conviction of A-4 by the Trial Court as confirmed by the High Court is wholly unsustainable and is liable to be set aside.
The finding recorded by the Trial Court and the High Court as though A-7 committed forgery and cheating by making applications for the issue of demand drafts in the names of bogus firms is wholly unsustainable - only connecting link pointed out against A-7 was the transfer of money to the total extent of Rs. 1,52,50,000/- to the account of a firm of which he was a partner. This by itself will not constitute any offence. Therefore, the charge that A-7 abetted the commission of the crime by the other Accused, should also fail. This is especially so when A-5, whose proprietary concern bagged the contract, not only lost the contract but also allowed the bank guarantee to be invoked by BHEL and in addition, left a huge amount of Rs. 2.60 crores still with BHEL. Therefore, the conviction and sentence awarded to A-7 cannot be sustained.
The judgment of the Special Court for CBI cases convicting the Appellants for various offences and the judgment of the High Court confirming the same are set aside - Appellants are acquitted of all the charges - Appeal allowed.
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2023 (6) TMI 1350
Jurisdiction of the National Financial Reporting Authority (NFRA) established inter alia under Section 132(1) of the Companies Act, 2013 - HELD THAT:- The direction is that all Petitioners must coordinate between themselves to present their arguments on one day together on the jurisdictional issue. It seems unworkable to expect the Authority to hear the same argument on jurisdiction repeatedly. How the submissions are to be divided between the parties and their counsel is a matter left to them but the scheduling by the Authority should ideally be in such a way that the jurisdictional point is on one day when all counsel for all matters can be heard. Thereafter a different schedule can be set for the facts for the individual cases that follow thereafter, if necessary, i.e., if the authority finds that it does have jurisdiction.
Petition disposed off.
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2023 (6) TMI 1349
TP adjustment - granting extended credit periods to the associated enterprises of the assessee without charging any interest on delayed payments - TPO has made adjustment to the amount on account of arms length price in respect of credit period extended by the assessee to its associates Enterprises in USA - TPO had taken the stand that for extending credit period to its associated enterprises the assessee was required to charge the interest and has taken the LIBOR rate of 3.40% and the amount loaded on it was plus 300 points (6.40%) - CIT(A) has partly allowed the grounds of appeal of the assessee, holding that USD LABOR rate at that point of time being 3.40% with a mark up of 80 basis point would be adequate for determining ALP interest for trade credit which can reasonable to charged to the Associates Enterprises - HELD THAT:- Considering the undisputed fact that assessee has also extended credit period to its non-associated enterprises without charging any interest on delayed payment, therefore, after following the decision of Hon’ble Jurisdictional High court as referred in M/s Indo American Jewellery Ltd. [2013 (1) TMI 804 - BOMBAY HIGH COURT] and Mr Livingstone Ltd. [2016 (11) TMI 1647 - BOMBAY HIGH COURT] this ground of appeal of the assessee is allowed that in such circumstances the AO/TPO is not required to make the adjustment on notional basis.
Claim of deduction u/s 10A - assessee submitted that for the purpose of computing the export turnover u/s 10A and AO has incorrectly reduced the expenditure incurred in foreign currency on telecommunication charges and expenses incurred in foreign currency in providing technical services outside of India - HELD THAT:- As perused the decision of Jurisdictional High Court of Bombay in the case of assessee/Tech Mahindra Ltd. [2014 (8) TMI 71 - BOMBAY HIGH COURT] wherein held that expenses incurred in foreign currency on telecommunication charges and providing technical services outside India should be excluded from total turnover for the purpose of computation of deduction u/s 10A.
During the course of assessment proceedings, assessee has also placed on record written submission that it has not separately recovered any freight telecommunication charges or insurance attributable to the delivery of the article or computer software outside of India or expenses, if any incurred in foreign exchange in providing the technical services outside India from its customer. The assessee has also furnished the annexure 1 along with written submission showing working of deduction u/s 10A of without including the above referred expenses.
After considering that it has never recovered foreign currency expenses from the customers and it was not part of its total turnover, therefore, we allow the appeal of the assessee that expenditure incurred on foreign currency on telecommunication charges and provision of technical services outside of India should not be excluded from export turnover for the purpose of computing u/s 10A, since this expenditure were not included in the export turnover of the assessee. Decided in favour of assessee.
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2023 (6) TMI 1348
Violation of principles of natural justice - non-application of mind - classification adopted by the petitioner on the specified services - HELD THAT:- The impugned order is in total non-application of mind and is non speaking order and no useful purpose will be served in keeping the writ petition pending and the matter should be remanded back to the sales tax authority tribunal to pass a fresh order after taking into consideration the observation made by the Hon’ble Division Bench of this Court in M/S. LGW LTD. VERSUS THE ASSISTANT COMMISSIONER, SERVICE TAX, DIVISION -II & ORS. [2022 (12) TMI 311 - CALCUTTA HIGH COURT].
The petition disposed off.
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2023 (6) TMI 1347
Levy of service tax - Business Auxiliary Service - receiving commission on the collection of premium of Crop Insurance Service from M/s. Agriculture Insurance Company of India Limited, Ahmedabad - Both the lower authorities have demanded service tax on the ground that service provided by the appellant is not an insurance service.
HELD THAT:- From the plain reading of the N/N. 3/2000-ST dated 06.07.2000, it is clear that exemption is not provided to a specific service of insurance but all the services if it is provided in relation to general insurance business provided under National Agricultural Insurance Scheme or the pilot scheme on Seed Crop Insurance or the Farm Income Insurance scheme - In the present case, the appellant have admittedly provided service for collection of premium in relation to the general insurance business provided under the aforesaid government scheme. Therefore, the appellant are clearly eligible for the exemption notification.
On careful perusal of the Commissioner (Appeals) order, though he has recorded the claim of notification by the appellant but except for the general findings, no specific finding on the admissibility of notification 3/2000-ST was given. However, on reading and interpretation of the notification 03/2000-ST, it does not give scope for denial of exemption - the appellant are entitled for the exemption notification 3/2000-ST and not liable to pay any service tax on the commission received in relation to general insurance under government’s various schemes.
The impugned order is set-aside and the appeal is allowed.
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2023 (6) TMI 1346
Disallowance u/s. 14A r.w.r 8D(2)(iii) - shares are held as stock-in-trade - HELD THAT:- As in light of various decisions rendered after considering the judgment rendered in the case of Maxopp Investment Ltd [2018 (3) TMI 805 - SUPREME COURT] deleting disallowance u/s. 14A where shares are held as stock-in-trade, we are of considered view that disallowance u/s. 14A of the Act is unsustainable in the instant case. Thus, the assessee succeeds on ground No.1 of the appeal.
Income taxable in India - Disallowing exclusion of profits of overseas branches - assessee claimed benefit of Double Taxation Avoidance Agreement (DTAA) entered into with the nations, where the branches of the assessee are located - HELD THAT:- As decided in Tecnimont Pvt. Ltd. [2020 (3) TMI 676 - ITAT MUMBAI] notification deals with connotations of the expression “may be taxed”, appearing in the tax treaties entered into by India, and there is absolutely no basis whatsoever to support the proposition that the effect of the notification has to be restricted in its application to non-business income only. No such differentiation in treatment of business and non-business income is envisaged in the said notification, nor to do we see any justification for inferring the same. Learned counsel does not have any material whatsoever in support of the proposition canvassed by him, nor does this proposition make any sense on the first principles- inasmuch as once the notification is issued without any such specific restriction for application to business income, we cannot infer a restriction in its application.
We, therefore, reject the plea of the assessee, and thus decline to interfere in the matter. We uphold the action of the Assessing Officer in including the profits of the assessee’s overseas branches in its taxable income in India. Decided against assessee.
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2023 (6) TMI 1345
Scope of limited scrutiny proceedings - disallowance U/s. 40A(3) as beyond the scope of limited scrutiny - AR argued that the AO has travelled beyond his powers in verifying the cash withdrawals where the case was selected under CASS for Limited Scrutiny for the purpose of verifying the cash deposits into the bank account of the assessee, thus AO has no jurisdiction to make disallowance U/s. 40A(3) without converting the assessment into complete scrutiny proceedings - HELD THAT:- We find that the Ld. AO has not taken approval from the Ld. Pr. CIT for verification of the cash withdrawals which is beyond the scope of the limited scrutiny for which the assessee’s case is opened for the purpose of verification of the huge cash deposits into the bank account of the assessee.
There is no dispute by the Ld. AO regarding the satisfaction of the cash deposits for which the limited scrutiny purpose was initiated. As far as the limited scrutiny proceedings are concerned, the scrutiny has to be limited to the parameters selected for the purpose of scrutiny only to the specific issues and not beyond that under any circumstances.
In case, if the Ld. AO wants to take up the case for complete scrutiny, first the Ld. AO has to convert the limited scrutiny into complete scrutiny case and then he may take up the case for complete scrutiny with the prior approval of the Ld. Pr. CIT / CIT concerned after being satisfied about the issue of converting it into a complete scrutiny.
In the instant case, we find that no such approval has been granted to the Ld. AO to travel beyond the verification of the cash deposits. AO also not found any material against the assessee with respect to the cash deposits into the bank accounts of the assessee. In view of the above discussions, we find that the Ld. AO has travelled beyond his jurisdiction in disallowing the cash withdrawals being payments made to various fishermen by invoking the provisions of section 40A(3) of the Act is not valid in law and therefore we are inclined to quash the order passed by the Ld. AO U/s. 143(3) r.w.s 144B and allow the Grounds raised by the assessee.
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2023 (6) TMI 1344
Seeking restoration of appeal adjudication of simultaneous remedies against the same impugned order at two forums - HELD THAT:- This Tribunal dismissed their appeal observing that they were pursuing remedy in both the forums; later the High Court dismissed their appeal on the ground that alternative remedy was available. After dismissal of the appeal by High Court, the appellant should have approached this Tribunal immediately or within a reasonable period bringing the order of the High Court and seeking restoration of appeal. Since, 4 years have been passed since passing of the Tribunal’s order, there are no merit in the ROA application being marred with negligence. No plausible reason has been submitted by the Applicant justifying the cause of delay.
In more or less in similar circumstances, this Tribunal in M/S. NATIONAL INFORMATION TECHNOLOGIES LTD. VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & CENTRAL GST, BHOPAL [2022 (6) TMI 163 - CESTAT NEW DELHI] rejecting the application for restoration on account of inordinate delay observed The appellant is already been observed to be negligent and thus he is held to not to be entitled for the discretionary relief. In the given circumstances, under no stretch of imagination there could be a justification to file an application at the sweet will of the applicant.
The miscellaneous application for restoration of appeal is dismissed.
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2023 (6) TMI 1343
Reopening of assessment u/s 147 - period of limitation - issuance of notice and initiation of reassessment proceedings are beyond the period of six years - Ld. State vehemently opposed the interim order as prayed for by the petitioner on the ground that the limitation is not applicable in the case of the petitioner and the assessment of tax is the fraudulent reversal of the Stock Exchange - HELD THAT:- Considered the rival submissions of the respective parties, this Court finds that the matter is required to be heard on merit only after exchange of affidavits and, as such, this Court, prima facie, is of the view that if, at this stage, no stay is granted, the petitioner will be prejudiced. Accordingly, the respondents are directed to file affidavit-in-opposition within eight weeks from date; reply thereto, if any, within three weeks thereafter.
In the meantime, there will be no further proceedings on the basis of the impugned order being annexure P-4 of the writ petition till disposal of the writ application. Let the matter appear before the next available Circuit Bench after completion of the period of 11 weeks.
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