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Showing 161 to 180 of 1569 Records
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2024 (5) TMI 1409
Unexplained cash deposits u/s 69A - Credibility of earlier withdrawals as a source for redeposits - Examination of fund flow and cash flow statements - Presumption of cash availability for redeposit - assessee had deposited a sum during the demonetization period - HELD THAT:- The assessee has filed the details bank accounts, showing the cash deposit and withdrawals and details of rent agreements and rental income earned by the assessee and also confirmation from certain tenants. Regarding receipt of rent by cash, confirmation is kept on record - According to the assessee, he has deposited earlier withdrawals made by assessee and amount received by the tenants into assessee’s bank accounts during the demonetization period. The assessee submitted that assessee has been regularly withdrawing the cash from the bank account on abundant caution to meet unforeseen expenses relating to the maintenance of assessee’s house properties. This practice has been accepted by the ld. AO by giving credit towards opening balance.
As held in the case of S.R. Venkataratnam [1980 (8) TMI 73 - KARNATAKA HIGH COURT] if assessee states that earlier withdrawal is available to the assessee to redeposit the same into bank account, the credit to that amount cannot be denied without bringing any material on record to suggest that, that earlier withdrawal has been spent by the assessee for some other purpose.
Assessee has to get due credit towards the cash withdrawals made by assessee and also rental income collected by assessee in the form of cash to deposit the said amount to assessee’s bank account. Accordingly, we delete the addition made towards unexplained cash deposit made into assessee’s bank account on various dates during the demonetization period. This ground of assessee is allowed.
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2024 (5) TMI 1408
Addition u/s 68 - Evidentiary value of statements recorded u/s 132(4) - as per ITAT no assessment could have been made on mere presumption of existence of incriminating material - Rectification of mistake u/s 292B or not, when no notice u/s 153C was issued - HELD THAT:-Statement recorded under Section 132 (4) of the Act has better evidentiary value but it is also a settled position of law that addition cannot be sustained merely on the basis of the statement. There has to be some material corroborating the content of the statements.
Act does not contemplate computing of undisclosed income solely on the basis of statements made during a search. However, these statements do constitute information, and if they relate to the evidence or material found during the search, they can be used in proceedings under the Act, as specified under Section 132 (4) of the Act. Nonetheless, such statements alone, without any other material discovered during the search which would corroborate said statements, do not grant the AO the authority to make an assessment.
Rectification of mistake u/s 292B or not, when no notice u/s 153C was issued - HELD THAT:- Reliance can also be placed upon the decision in the case of CIT v. Micron Steels P. Ltd. 2015 [2015 (2) TMI 589 - DELHI HIGH COURT] whereby, it was held that the jurisdictional defects cannot be cured under Section 292B of the Act and they render the entire proceedings null and void.
In the present case, it is seen that the Revenue has failed to allude to any steps which were taken to determine that the seized material belonged to the respondent-assessee group. Notably, the satisfaction note has also been prepared in a mechanical format and it does not provide any details about the incriminating material. Therefore, a failure on the part of the Revenue to manifest as to how the material gathered from the search of Jain group of companies belonged to the respondent-assessee group and the same is incriminating, vitiates the entire assessment proceedings.
Accordingly, we find no reason to intermeddle with the order of the ITAT which has rightly set aside the assessment order and deleted the additions made therein. Decided in favour of assessee.
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2024 (5) TMI 1407
Clubbing of consignments - Levy of anti-dumping duty - Alleged undervaluation of DVB remotes and diodes - Differential duty confirmation - Confiscation of goods and imposition of penalty.
Clubbing the consignment of parts of calculators imported by Banke Bihari and Zippo Mobiles through the four Bills of Entry, two dated 20.02.2018 and two dated 24.03.2018 and 19.03.2018 - HELD THAT:- It is evident that the two consignments imported by Banke Bihari and Zippo Mobiles through two Bills of Entry, each dated 20.02.2018, have the same invoice number and have a common supplier. The purchase orders for both the importers were placed by Dinesh Udhwani to the same supplier M/s. Pandas Technology Ltd., Hong Kong.
The calculator parts that were imported by Zippo Mobiles under the Bills of Entry dated 20.02.2018 were found to have been stored in the warehouse of Banke Bihari. The Principal Commissioner has also considered the statement made by Dinesh Udhwani that the goods imported through the Bill of Entry dated 24.03.2018 had been sold out was not correct. It also transpires that the nature of the goods that were imported had matching quantities. Banke Bihari had along with other parts also imported polybags, colour boxes and two pressing machines for calculators. Zippo Mobiles also imported cartons for calculator with front and back covers. The Principal Commissioner was, therefore, justified in recording a finding that the intention was to assemble the calculators from the parts that were imported. Infact, it is also clear that Zippo Mobiles had never imported the parts and that the two consignment of plastic part for calculators arranged by Dinech Udhwani were the first import.
It is, therefore, more than apparent that Banke Bihari had imported parts of calculator through Bills of Entries so as to assemble the parts to form the calculator only to avoid anti-dumping duty.
Anti-dumping duty under Notification dated 29.05.2015 read with rule 2(a) of Interpretative Rules and recoverable from Banke Bihari u/s 28(4) read with section 28(8) of the Customs Act - The PCB assembly (having in-built cell bracket) connected with display along with button cell, therefore, provides the essential character of the complete or finished article. As per of rule 2(a) of the Interpretative Rules to the First Schedule to the Tariff Act, it is not necessary that all the parts/components of article must be present to merit classification as a complete article. It will still be classified as a complete article if the parts, which are presented, have the essential character of a complete or finished article. PCB assembly along with the cell are enough to provide the essential characteristic and, therefore, as per Interpretative rule 2(a), the parts imported by Banke Bihari are in the nature of a finished article i.e. calculator.
Undervaluation of DVD remotes in CKD imported under Bill of Entry No. 6460501 dated 21.05.2018 and Diodes under Bill of Entry No. 6675087 dated 05.06.2018 and whether the rejection of declared assessable value and re-assessment thereof by the Principal Commissioner is correct - The items DVB remote and LED diodes figure in these pages. The summary of container numbers is also mentioned. The said pages also have summary of payments made and payments due and, therefore, indicate the transactional nature of the entries. On being shown Dinesh Udhwani agreed that the details like description, date and quantity is similar to the details in their Bill of Entry/Invoice/Packing list but could not explain the price difference. He was not only evasive in his response but also claimed that the documents cannot be understood by him as they were partly in Chinese.
Allegation of undervaluation of DVB remote in CKD under Bill of Entry No. 6460501 - In view of the fact that the model of remote in the Bill of Entry No. 6460501 dated 21.05.2018 was not declared and that the documents showing the actual values for DVB remote of same model were obtained during the investigations, it was found that the assessable value declared by the appellant in Bill of Entry No. 6460501 dated 21.05.2018 was liable to be rejected in terms of the provisions of rule 12 of the 2007 Valuation Rules. No values of identical goods could be found during investigation and so the actual transaction value of the same model found from the email of Dinesh Udhwani was taken to be the transaction value under the provisions of rule 5 of the 2007 Valuation Rules. Thus, the total assessable value in respect of the goods covered under the Bill of Entry No. 6460501 dated 21.05.2018 was arrived at Rs. 49,29,000/- (total value of the goods= Rs. 16.43x3,00,000 units i.e. Rs. 49,29,000/-). It needs to be noted that 1.58 RMB is equal to Rs. 16.43 as per exchange rate of RMB in the show cause notice.
Undervaluation of High lumin LED Emitting Diode under the Bill of Entry No. 6675087 - higher values of high lumin LED Emitting Diode 5 MM (Red, Green-S, Blue-S, White, White-S, RG-S, Blue, White-0.25w, White-0.75W) were found in the document containing 23 pages retrieved from email account. When asked to explain, Dinesh Udhwani admitted that the quantity, description, date were matching with the invoices/packing list with Bills of Entry, but he feigned ignorance about the document and denied any connection with the imports. These documents recovered from his email, along with other documents like commercial invoices from Zippo Mobiles indicating details of containers related items and value, payments made and due, cannot be discarded as not related to imports. As no values of identical goods were unearthed during investigation, the transaction value of the same goods found from email of Dinesh Udhwani was correctly taken to be the transaction value under the provisions of rule 5 of the 2007 Valuation Rules.
Differential Duty Confirmation - As it has been found as a fact that Banke Bihari had undervalued DVD remotes and diodes, the Principal Commissioner was justified in requiring Banke Bihari to pay the differential duty.
Confiscation of Goods and Imposition of Penalty - The Principal Commissioner found that BBEPL and Zippo Mobiles actively connived to evade anti-dumping duty by filing separate Bills of Entry and misclassifying goods. The goods were liable to confiscation u/s 111(m) of the Customs Act. Penalties were imposed under sections 112 and 114A of the Customs Act on BBEPL, Zippo Mobiles, and associated individuals for submitting incorrect and fabricated invoices.
All appeals (Customs Appeal Nos. 50856 to 50862 of 2020) were dismissed, upholding the Principal Commissioner's findings and actions.
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2024 (5) TMI 1406
Money Laundering - proceeds of crime - petitioners are aggrieved of their booking by the Directorate of Enforcement (ED) for alleged commission of offences u/s 3 read with Section 70 and punishable u/s 4 of the Act of 2002 - invocation of inherent jurisdiction of this Court vested in terms of Section 482 of the Code of Criminal Procedure, 1973 - HELD THAT:- In the backdrop of an over view of the complaint so derived hereinabove, the petitioners came forward complaining that when in none of the aforesaid FIRs and the chargesheets borne out of them they were and/or are related with alleged commission of any alleged offences to figure as accused persons investigated and chargesheeted by the CBI, Chandigarh, then the jurisdiction exercised by the Directorate of Enforcement (ED) to implicate the petitioners in the case is nothing but usurpation of the jurisdiction of booking the petitioners without any statutory basis leaving the petitioners clueless as to by reference to which culpable statement of facts they have been booked in the company of nineteen (19) other accused persons with whom they have no privity of transaction.
With reference to recovery of movable properties during search and seizure conducted under Section 17 of the Act of 2002, the reference with respect to the petitioner No. 2 is in para 9.2 wherein gold jewellery weighing 1765 gms is said to be recovered from the residential house of the petitioner No. 2 and seven (07) arms licences in original were found and seized during search thereby relating it to the petitioner No. 2.
The petitioner No. 2 is alleged to have directly indulged in criminal activities related to scheduled offences under Section 2(1) (x) & 2(1) (y) of the Act of 2002 and committed the offence of money laundering under Section 3 of the Act of 2002 punishable under Section 4 of the Act of 2002.
Prima facie case made out particularly in the manner the court of Special Judge Anti-Corruption (CBI Cases) Jammu has, in a very cryptic order of one and half page, has come to take cognizance of the complaint against the petitioners figuring in the array of twenty one (21) accused persons/concerns without undertaking any examination of the complaint as to in which manner and on what basis the petitioners are being subjected to prosecution at the instance of the complaint-Enforcement Directorate (ED).
Issue notice to the respondent - the proceedings in the complaint against the petitioners shall remain stayed till next date of hearing.
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2024 (5) TMI 1405
Taxability in India - interest received by the Indian PE on deposit maintained with Head Office/Overseas Branch - scope of India-US DTAA - HELD THAT:- As decided in Credit Agricole [2015 (6) TMI 974 - BOMBAY HIGH COURT] had taken note of the indubitable and well settled position of branch offices not being separate personalities or juridical entities and that one person cannot thus profit from itself. Since the receipt of interest was from the Head Office of the respondent-assessee, it was according to Mr. Pardiwalla, the aforesaid principles which would govern.
Explanation to Section 9 (1) (v) of the Act is principally concerned with entities engaged in the business of banking and a PE in India once remitting payments to its Head Office, the statute giving rise to a legal fiction of such remittances being deemed to have accrued or arisen in India.
Explanation to Section 9 (1) (v) provision which introduces a statutory fiction by ordaining that a PE of a banking enterprise in India would be deemed to be a person separate and independent of the non-resident person of which it is a PE. However, it was the undisputed position before us that the said Explanation would have no application since it came into effect only from 01 April 2016 and by virtue of Finance Act, 2015.
That only leaves us to examine the challenge that stands raised based on the well settled position of the law clearly not contemplating a person profiting out of itself. Once we come to the firm conclusion that the branch office would not partake the character or attribute of a separate legal personality, the view as taken by the Tribunal is clearly rendered unexceptional. In any event, it would be the exception carved out in the DTAA with respect to banking enterprises which would govern.
As decided in Kikabhai Premchand KT [1953 (10) TMI 5 - SUPREME COURT] it is wholly unreal and artificial to separate the business from its owner and treat them as if they were separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact is non-existent. Cut away the fictions and you reach the position that the man is supposed to be selling to himself and thereby making a profit out of himself which on the face of it is not only absurd but against all canons of mercantile and income tax law.
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2024 (5) TMI 1404
Maintainability of Revenue appeals before CESTAT - Monetary threshold limit - Binding nature of CBIC instructions on the department - Validity of the assessment order on enhanced value - HELD THAT:- We find that for reduction of litigation, the CBIC has issued circulars/instructions from time to time instructing the department not to file the appeal and in some cases, if it has already filed, not to press the appeal before higher authorities i.e. the CESTAT, the High Courts and the Supreme Court as the case may be, where the duty amount involved is below the minimum threshold limits respectively prescribed in such circulars. In the present cases, we are concerned with the CBIC’s latest circular dated 02.11.2023, wherein it has been specifically prescribed that no appeal shall be filed before the CESTAT below the monetary limit of Rs. 50 lakhs and if already filed, will have to be withdrawn. These instructions have been issued in exercise of its power under Section 131BA of the Customs Act, 1962. The perusal of the circular cited supra shows that the same prescribes monetary limit below which the department shall not file appeal before the CESTAT, the High Courts and the Supreme Court. In so far as, the CESTAT is concerned the monetary limit prescribed is Rs. 50 lakhs. Para 3 of the said circular prescribes that in respect of the pending cases before the CESTAT, the High Courts and the Supreme Court which are below the monetary limits, process of withdrawal of the appeal would be undertaken by the department.
Further, we find that the present appeals do fall within the instructions as prescribed in the circular dated 02.11.2023. We also note that the CESTAT, the High Courts and the Supreme Court have been consistently dismissing the appeals of the Revenue if the same are below the monetary limits as prescribed in circulars issued by CBIC from time to time.
It is pertinent to mention here that the amount of duty involved in each of the appeal is below of the threshold limit prescribed in circular dated 02.11.2023 issued by the CBIC wherein it is provided that if the duty amount involved is less than Rs. 50 lakhs, then no appeal shall be filed before the CESTAT, and if already filed, the same will be withdrawn by the department.
Thus, the present appeals filed by the department are not maintainable in view of the instructions dated 02.11.2023 issued by the Board and consequently we dismiss all these 26 appeals leaving the question of law, if any, open.
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2024 (5) TMI 1403
Modification of terms of the Demerger Scheme by altering the Appointed Date to the date of pronouncement of the Impugned Order - Section 421 of the Companies Act, 2013 - wrong interpretation of law and no reasoning - HELD THAT:- It is seen from the case of Accelyst Solutions Pvt Ltd Vs Freecharge Payment Technologies Pvt Ltd [2021 (3) TMI 1009 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI] that while sanctioning the scheme of arrangement if the Court comes to a conclusion that the provisions of statute have been complied with; and that there is no violation of any provision of law, or the proposed scheme of compromise or arrangement is not unquestionable, unconscionable or contrary to public policy, then the NCLT has no further jurisdiction to sit in appeal over the commercial wisdom of the class of person who with their eyes open have given their approval, even if, the Court is of the view that better scheme could have been framed. Further we also agree the alterations in the appointed date would affect the calculation and would have a serious financial implication. Hence if the parameters for sanctioning the scheme are complete, then the Tribunal would only have a supervisory jurisdiction.
There was no reason to change the appointed date as was given in the scheme of merger and even the reliance on Sterlite Port [2023 (12) TMI 1220 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI] was incorrect since in the said case the definition of the term “Appointed Date” itself gave an authority to the Ld. NCLT to fix a date other than the date fixed by the Scheme but though the NCLT had fixed another date than the Appointed Date yet in the cited case this Tribunal retained the Appointed Date to be the one as fixed under the Scheme.
The appeal is allowed holding the Appointed Date be the date as fixed by the scheme per para 5 above and it shall not be the date of pronouncement as is held by the Ld. NCLT.
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2024 (5) TMI 1402
Entitlement of the plaintiff to recover the suit amount along with interest - Existence of cause of action for the plaintiff - Clean hands of the plaintiff in approaching the court - Privity of contract between the parties - Suit being bad for non-joinder and mis-joinder of necessary parties - HELD THAT:- As noticed by the Courts below, the total claim of the plaintiff against the 1st defendant was Rs.19,75,146.24 ps, from which, Rs.5 lacs was paid through four cheques by the 1st defendant to the plaintiff and a further sum of Rs.5 lacs had been paid for compromise in the Complaint filed under Section 138 of the N.I. Act by the 1st defendant to the plaintiff. The balance claim of the plaintiff is Rs.9,75,146.24.
No doubt, the plaintiff placed reliance on Ex.PW-1/D, final bill, but the said final bill appears to have been generated after the construction was completed and it was not even signed by the plaintiff or the 1st defendant. So no reliance could have been placed on it by the plaintiff.
If the plaintiff's claim is that various items of work done by him for construction of the house of the 1st defendant was agreed to be done at the market rates, he should have adduced evidence about the market rate of each item of work, but he has not chosen to do so.
It is settled law that stipulations and terms of the contract have to be certain and the parties must have been consensus ad idem. The acceptance must be absolute and must correspond with the terms of the offer. The burden of showing the stipulations and terms of the contract, and that the minds where ad idem, is on the plaintiff. If the stipulations and terms are uncertain, and the parties are not ad idem, there is no contract at all (Mayawanti vs. Kaushlya Devi) [1990 (4) TMI 304 - SUPREME COURT]
Since the claim of the plaintiff is with regard to the distinct items of work said to have been executed by him for the 1st defendant, burden was on him to establish the rate of each item of work, for which, there is no evidence adduced by him.
Therefore, though I hold that there is privity of contract between the parties, I hold that that the trial Court as well as the First Appellate Court were not right in decreeing the suit in favour of the plaintiff on the basis of the unilateral document Ex.PW-1/D, more particularly when the plaintiff had not produced a single original bill, voucher or material to establish the amount of expenditure incurred by the plaintiff towards executing various items of work for constructing the house of the 1st defendant.
In my opinion, the judgments of the trial Court as well as the lower Appellate Court are perverse and cannot be sustained. Substantial questions of law (1) and (2) are answered in favour of the respondent but substantial questions of law (3) and (4) are answered in favour of the appellants.
Accordingly, this Regular Second Appeal is allowed and the judgments of the trial Court as well as the lower Appellate Court are set-aside.
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2024 (5) TMI 1401
Non-payment of Service Tax - demand - Corporate Guarantee and margin retained for cargo space booking - Whether provision of corporate guarantee without consideration is taxable - profit/markup is liable to service tax - HELD THAT:- The issue of taxability of providing Corporate Guarantee without any consideration was dealt at length by this Tribunal in the case of Commissioner of CGST & Central Excise Vs Edelweiss Financial Services Ltd. [2023 (4) TMI 170 - SC ORDER] wherein it was held that any activity must, for the purpose of taxability under Finance Act, 1994, not only, in relation to another, reveal a ‘provider’, but also the flow of ‘consideration’ for rendering of the service. In the absence of any of these two elements, taxability u/S 66B of Finance Act, 1994 will not arise. It was held that there is no consideration insofar as ‘corporate guarantee’ issued by respondent on behalf of their subsidiary companies is concerned.
The issue on taxability of service tax on profit/mark up is no more res integra as the same has been decided in catena of decisions, the latest being the judgment in the case of M/s Tiger Logistics (India) Ltd., vs Commissioner of Service Tax-II, Delhi [2022 (2) TMI 455 - CESTAT NEW DELHI].
Thus, we uphold the impugned order and dismiss the appeal.
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2024 (5) TMI 1400
Refusal to condone the delay in maintaining the appeal under Section 107 of the WBGST Act, 2017 - appeal filed beyond one month from the prescribed period of limitation, as provided in Section 107 (4) of the said Act - failure on the part of appellate authority to exercise jurisdiction in rejecting the application for condonation of delay - challenge to determination u/s 74 of the said Act - HELD THAT:- It may be noticed that an identical issue had fell for consideration before the Hon’ble Division Bench of this Court in the case of S.K. Chakraborty & Sons [2023 (12) TMI 290 - CALCUTTA HIGH COURT]. The Division Bench of this Court, while considering the scope and ambit of Section 107 of the said Act and the applicability of Section 5 of the Limitation Act 1963 on the basis of the provisions contained in Section 29 (2) of the Limitation Act 1963 and by placing reliance on the judgment delivered by the Hon’ble Supreme Court in the case Superintending Engineer/Dehar Power House Circle Bhakra Beas Management Board (PW) Slapper and another versus Excise and Taxation Officer Sunder Nagar/Assessing Authority [2019 (11) TMI 6 - SUPREME COURT], had concluded that in absence of non obstante clause rendering Section 29 (2) of the Limitation Act 1963, non applicable and in absence of specific exclusion of Section 5 of the Limitation Act, 1963, it would be improper to read implied exclusion thereof.
Thus, the appellate authority is not denude of its power to condone the delay beyond one month from the prescribed period of limitation as provided for in Section 107 (4) of the said Act.
The appellate authority had failed to exercise jurisdiction in refusing to entertain the application under Section 5 of the Limitation Act, since the same was filed beyond one month, beyond the prescribed period of Limitation as provided for in Section 107 (4) of the said Act - the order dated 19th January 2024 passed by the appellate authority in refusing to condone the delay under Section 107 of the said Act is set aside.
The matter as regards consideration of the application under Section 5 of the Limitation Act, 1963 to the appellate authority, such issue needs to be considered by this Court. Having considered the application for condonation of delay, the explanation provided by the petitioner in the application under Section 5 of the Limitation act is satisfactory and delay has been sufficiently explained.
Application disposed off.
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2024 (5) TMI 1399
Challenge to penalty order passed u/s 129(3) of the UPGST Act, 2017 - expiry of e-way bill - engine of the vehicle got failed and after being repaired, it was moved for its onward journey - intent to evade tax, present or not - HELD THAT:- One may take reference to the judgment of this Court in M/s Globe Panel Industries India Pvt. Ltd. v. State of U.P. and others [2024 (2) TMI 363 - ALLAHABAD HIGH COURT] passed by this Court, wherein this Court had dealt with the similar issue and held 'Indubitably, there is a technical violation that has been committed by the petitioner. However, the authorities have not been able to indicate in any manner that the E-Way Bill had been used repeatedly nor have they made out any case with regard to an intention to evade tax by the petitioner.'
In light of the same, this Court is unable to agree with the findings of the authorities, and accordingly, the impugned orders dated December 9, 2017 and May 8, 2019 are quashed and set aside - petition allowed.
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2024 (5) TMI 1398
Territorial jurisdiction of the court in a Writ Petition - Kerala HC or Madras HC - seeking a direction to lift the Attachment of a bank account by the assessing authority under the Income Tax Act - Single Judge found that the attachment of the bank account of the appellant in Wayanad was consequent to the exercise of power by the assessing authority under the Income Tax Act who was situated in Ooty, in Nilgiris District, which comes within the jurisdiction of the Madras High Court and could not be maintained before this Court[Kerala High Court] for lack of territorial jurisdiction
HELD THAT:- On a consideration of the rival submissions, we are of the view that the impugned judgment of the learned Single Judge requires no interference. It is well settled through the decision of the Supreme Court in M/S. Ambica Industries v. Commissioner Of Central Excise 2007 (5) TMI 21 - SUPREME COURT] and the later decisions including the decision of this Court in Aparna Balan and Another v. Union of India and Others [2018 (7) TMI 2347 - KERALA HIGH COURT] as also V. Viswanathan v. State of Kerala [2014 (10) TMI 1074 - KERALA HIGH COURT] and the judgment in K S Jamestin v. The Ministry of Petroleum and Natural Gas Shastri Bhavan, New Delhi and Another [2022 (11) TMI 1486 - KERALA HIGH COURT], that merely because the appellant has a bank account within the State of Kerala, he cannot maintain a Writ Petition challenging the orders passed by an assessing authority who is situated in Tamilnadu, more so when the orders in question are issued in connection with the business carried out by the appellant in Tamilnadu. The Writ Appeal, therefore, fails and is accordingly dismissed.
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2024 (5) TMI 1397
Best judgment assessment - Validity of assessment order u/s 144 without issuing notice u/s 143(2) - HELD THAT:- When assessee has filed the return of income and responded to the notice of the AO, the conditions for invoking Section 144 are not met. Therefore, the assessment made by the AO u/s. 144, would not sustain. Various judicial decisions have held that invoking Section 144 is improper, if the assessee has filed a return of income and complied with the notices.
The courts have quashed such assessments, emphasizing that best judgment assessments are intended only for cases where the assessee fails to file returns or comply with statutory notices.
Addition u/s 69A as unexplained Money - In the present case, the assessee has furnished the details of cash deposits, during the course of the appellate proceedings. The Affidavits of relatives confirming that the cash deposited in the bank account of the assessee belongs to them were also produced before the CIT(A). Assessee also produced the return of income of the relatives.
As observed that the deposits is not relating to cash deposit and it is related to the maturity proceeds of the fixed deposits.
As noted that there is an addition on substantive basis in the hands of Shabbir Kantawala, brother of the assessee and the said Rs. 10,00,000/- is the same amount deposited in the joint bank account held by the assessee.
CIT(A) was not correct in upholding the half of the assessment in the hands of assessee u/s. 69A Affidavits, if credible and corroborated by other evidences, can be sufficient to explain the source of cash deposits. Neither the AO nor the CIT(A) has provided concrete reasons or evidences to reject the Affidavits and the explanation provided by the assessee. Mere suspicion or conjecture is not sufficient to sustain an addition u/s 69A - We, therefore, set aside the order of CIT(A) and delete the entire addition made u/s. 69A r.w.s 115BBE in the hands of the assessee by the AO.
Initiation of penalty proceedings u/s 271AAC(1) & 271F - Proceedings for initiation of penalty proceedings u/s. 271AAC(1) & 271F of the Act be dropped. Appeal of assessee is allowed.
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2024 (5) TMI 1396
Penalty levied u/s 271(1)(c) - addition made of bogus purchases - CIT (A) restricted addition to 12.5% of bogus purchase - Information received from Maharashtra Sales Tax Department by DGIT investigation Mumbai which was in turn forwarded to the AO wherein five parties were found to be hawala parties providing accommodation bills.
HELD THAT:- As it is apparent that the addition made in the hands of the assessee remains on estimated basis. Though it cannot be the case that whenever addition is made on the estimate basis penalty cannot be levied. However, when the assessee has furnished all the relevant information, what is the information that the assessee has furnished inaccurately is the question. It cannot be said that assessee was in known of things at the time of recording of these purchase that same are bogus and furnished these information which was inaccurate to the AO - The several decision of the co-ordinate Bench in this case clearly shows that in such case the penalty u/s 271(1)(c) of the Act could not have been levied.
Thus as relying on Krishi Tyre Retreading and Rubber Industries [2014 (2) TMI 21 - RAJASTHAN HIGH COURT] the appellate orders of the ld. CIT (A) deleting the penalty u/s 271 (1) (c) of The Act , are confirmed. - Decided in favour of assessee.
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2024 (5) TMI 1395
Exemption from tax as the appellant is an ‘instrument of state’ as per Article 12 of the Constitution - as per assessee it is not liable to tax, as being a State under Article 289 of the Constitution of India engaged in public utility services - AO was of the view that the assessee is a partnership firm, having perpetual succession - HELD THAT:- We find that in the instant case, Assessee/APSCHE is incorporated under Special Legislation i.e. APSCHE Act, 1988. As per the said Act, the State Government is only having power to appoint Chairman and other members in the Government Council, i.e. full control of the State Government on the policy decisions as well as management. The Hon’ble Supreme Court has therefore held that the autonomous bodies like State Transportation Corporation or Warehousing Corporation, where there is full control by the Government either State or Central, theseare instrumentalities of State only. Further perusal of Article 12 shows that the definition of ‘the State’ given in Article is inclusive and not exhaustive.
The expression ‘other authorities’ used in Article 12 is neither defined in the Constitution of India nor in any other statute. Therefore, the Hon’ble Supreme Court of India and the Hon’ble High Court have interpreted this expression in various judgements. The Hon’ble Supreme Court of India while interpreting the expression “other authorities” in the case of Som Prakash Rekhi v. Union of India [1980 (11) TMI 113 - SUPREME COURT] have culled out certain tests to determine as to when a Corporation should be said to be an instrumentality or Agency of the Government.
If the body is found to be an instrumentality of the agency of the Government, it would be an authority included in term ‘State’ under Article 12 of the Constitution of India. However, the tests indicated by the Hon’ble Apex Court in the case of Som Prakash Rekhi [Supra] are merely indicative and not absolute and thus, have to be applied discretely. If any Body or organisation falls within the criteria as laid down by the Hon’ble Apex Court it can be considered that it falls within the term “State”.
we observe that the assessee has satisfied majority of the conditions. We also further note that the assessee’s Govt. Counsel has made an application, both for cancellation of PAN, which was issued wrongly as a partnership firm and also an application under 10(46) of the Act for exemption of specified income to the assessee. Considering the arguments of the Ld.AR that the assessee is under bonafide mistaken belief as being instrument of state is exempt from filing the return of income, the assessee has not filed the return of income for the impugned year under consideration. Therefore, considering the facts and circumstances of the instant case that the assessee is completely under the superintendence and control of the State Government, financially and administratively, the assessee falls under the definition of ‘State’ as per Article 12 of the Constitution of India and in our view, the assessee is entitled for immunity from taxation of it’s income under the provisions of Income Tax Act., We are therefore, inclined to allow Ground raised by the assessee. Further, we are also of the opinion that since the assessee is fully exempt from tax, there cannot be taxation on the income of the assessee or the receipts collected by the assessee. Assessee appeal allowed.
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2024 (5) TMI 1394
Levy of penalty u/s 271(1)(c) - bogus LTCG - exemption of Long Term Capital Gain u/s 10(38) of the Act on sale of shares denied - revised income declaration was not voluntary but a response to the notice issued u/s 148 -
HELD THAT:- We find that in MAK Data (P.) Ltd. [2013 (11) TMI 14 - SUPREME COURT] held that voluntary disclosure does not release the assessee from the mischief of penal proceedings. Further, it is evident from the record that though the assessee claimed the transaction of shares of M/s. Action Financial Services (India) Ltd to be genuine, however, did not bring any material of record to support its contention and straight away upon receipt of notice u/s 148 offered to tax the LTCG on the sale of shares of M/s. Action Financial Services (India) Ltd.
There is also no material on record to show that the assessee subsequently again claimed the Long Term Capital Gain to be exempt. Since the additional income on account of the aforesaid Long Term Capital Gain was offered to tax only in response to the notice issued u/s 148 we agree with the findings of the lower authorities that the same is not voluntary but is consequential to the issuance of notice u/s 148 of the Act.
In view of the above, we also do not find any merits in the submissions of the assessee that no penalty can be levied in the present case since the returned income and assessed income are same, as the only basis of issuance of notice u/s 148 was the alleged bogus LTCG claimed as exempt by the assessee in the original return of income and which was subsequently offered to tax by the assessee in response to notice issued u/s 148 - we find no infirmity in the impugned order in upholding the levy of penalty u/s 271(1)(c) of the Act, and therefore, the same is upheld. As a result, the grounds raised by the assessee are dismissed.
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2024 (5) TMI 1393
Penalty u/s 271(1)(c) - Defective notice u/s 274 - non specification of clear charge - whether the assessee has concealed its particulars of income or furnished inaccurate particulars of such income? - HELD THAT:- AO has not struck off the inappropriate portion therein. The notice, so issued, does not mention the specific charge i.e. whether the assessee has concealed particulars of its income or furnished inaccurate particulars of such income. Hence, the show cause notice issued u/s 274 read with Section 271(1)(c) of the Act dated 08.03.2016 becomes defective and bad in law, therefore, no penalty u/s 271(1)(c) can be levied in such case. The issue is squarely covered by the ratio of decision of M/s Sahara India Life Insurance Company Ltd.. [2019 (8) TMI 409 - DELHI HIGH COURT]
As Revenue could not bring any contrary material on record to demonstrate that the notice so issued contained specific charge, grounds raised by the Revenue are rejected.
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2024 (5) TMI 1392
Unexplained investment in the form of cash for the purpose of purchasing immovable property - Search and seizure operation carried upon - Confirmation of Addition Without Cross-Examination - Burden to prove - HELD THAT:- We fail to find any merit in such observation of the lower authorities for the reasons that the search and seizure action have been conducted by the Income Tax Department on person to whom cash was given [Mr. Nilesh Ajmera] and certain documents and diaries were seized. Based on such documents and also taking basis of statements given by Mr. Nilesh Ajmera, reassessment proceedings have been carried out in the case of the assessee.
Admittedly, search action was conducted on the assessee and the alleged addition is merely on the basis of third parties’ information. So, when the additions have been made on the basis of documents found from the possession of Mr. Nilesh Ajmera and the search operations have been carried out in the case of Nilesh Ajmera, then as per the direction of this Tribunal, it was the responsibility and duty of the AO to bring Mr. Nilesh Ajmera for cross examination before the assessee and give him the opportunity to assessee to cross examine Mr. Nilesh Ajmera so as to adhere to the principles of natural justice, since the additions have been made based on third parties’ statement. The burden to discharge the onus as directed by this Tribunal was purely on the AO and he could not absolve from his duty by mentioning that summons were sent twice to Mr. Nilesh Ajmera.
The action of the AO seems like that there is a witness from the side of the Revenue and on his statement, the addition has been made in the hands of the affected party but when the opportunity of giving cross examination is to be given, then rather than the Revenue to bring its witness for cross examination the affected party is held responsible for bringing such witness. Similar approach of the Ld. AO in the instant case cannot be held to be justified. For the inability of the AO to comply with the directions of this Tribunal by not providing the opportunity to the assessee to cross- examine to Mr. Nilesh Ajmera leaves us with no option except to delete alleged addition for unexplained investment of cash given by the assessee.
Even DR could not place on record any other material in support of revenue to prove that any such investment was made in Dubai flat and also failed to controvert the findings of this Tribunal given in the case of Pukhraj Soni [2016 (9) TMI 1489 - ITAT INDORE], wherein also under similar set of facts and circumstances, relief was given to the assessee, since no corroborative and concrete evidence was found, which could prove that Mr. Pukhraj Soni has advanced money to Mr. Nilesh Ajmera. Decided in favour of assessee.
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2024 (5) TMI 1391
Unexplained cash credit u/s 68 - Bogus share capital/share premium - HELD THAT:- AO issued notices u/s 133(6) of the Act to all the subscribers and were duly replied by furnishing all the details/evidences as called for. Besides the AO also issued summons u/s 131 of the Act to all the parties, which were duly replied by the share subscribers copies of which are filed in the paper book as stated above. In our opinion, the assessee has duly discharged its onus by filing evidences before the ld. AO and AO has acted on the ground that the subscribers have no creditworthiness to invest in the assessee company as they were not having sufficient income either in the current year or in the preceding years.
AO ignored the fact that these subscribers were having huge networth and have made investments out of that. The ld. AR stated that where the AO has any doubt about the lenders where the assessee has furnished all the evidences before the AO, then the matter should be looked into the hands of the creditors and not the assessee when all the subscribers are duly assessed to tax and even the assessment orders u/s 143(3) of u/s 143()1) of the Act are placed on records.
Thus as the share subscribers have even replied to the notices issued u/s. 133(6) of the Act and also to the summons issued u/s. 131, we are inclined to hold that assessee has proved all the ingredients of section 68 of the Act by filing all the evidences and the authorities have failed to any substantive evidence or material to the contrary .Accordingly, we set aside the order of ld. CIT(Appeals) and direct the ld. Assessing Officer to delete the addition - Decided in favour of assessee.
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2024 (5) TMI 1390
Levy of penalty u/s 271AAB - Defective Notice for Penalty Proceedings - show cause only mentioned the offence committed by the assessee by mentioning that assessee has concealed the particulars of income or furnished inaccurate particulars of income show cause notice is meant for initiating penalty proceedings u/s 271(1)(c) as AO has used the same show cause notice in the same format for initiating penalty proceedings u/s 271AA - whether the assessee has concealed the particulars of income or had furnished inaccurate particulars of income?
HELD THAT:- There is a greater onus casted on the Revenue to specifically mention in the show cause notice itself as to what offence the assessee has committed and also to mention the rate of penalty that is sought to be levied by the AO on the assessee i.e., 10% or 20% or 30% or 60% of undisclosed income, as the case may be. If none of these preliminary informations are mentioned in the show cause notice, then the show cause notice issued by the Ld. AO becomes completely defective and consequentially fatal and would vitiate the entire penalty proceedings.
This issue, in any case, is no longer res integra in view of the decision of Kolkata Tribunal in the case of Sushil Kumar Paul [2022 (12) TMI 1008 - ITAT KOLKATA] wherein as held there is no mention about various conditions provided u/s 271AAB - AO has very casually used the proforma used for issuing notice before levying penalty u/s 271(1)(c) of the Act for the concealment of income or furnishing of inaccurate particulars of income. Except mentioning the section 271AAB of the Act in the notice, it does not talk anything about the provisions of section 271AAB. Therefore, certainly such notice has a fatal error and technically is not a correct notice - Decided in favour of assessee.
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