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2022 (10) TMI 1261
Reopening of assessment and issue of notice u/s. 148 - information from the Investigation wing - addition u/s 68 - reason to believe - HELD THAT:- We are of the view that since the assessee has claimed to have substantial loan from a party which was found to be bogus. Therefore, under these circumstances, prima facie, these facts are sufficient for forming a belief that taxable income has escaped assessment. We are further of the view that at the stage of reopening, the only requirement is that the AO should have some tangible material facts which can form the basis to believe that income has escaped assessment and at that stage it is not to be established beyond reasonable doubt that such amount of income had already escaped assessment.
Therefore, the objections so raised by the assessee were rightly rejected by the AO and upheld by CIT(A). We find no reason to interfere into the lawful finding so recorded by the CIT(A) and further the assessee has not put forth any material which compel us to deviate from the findings recorded by the CIT(A). Thus, while concurring with the findings of the ld. CIT(A) on this issue, we dismiss Ground of the assessee.
Unsecured loans - We find that disallowance made u/s 68 of the Act by the lower authorities has no merit and we do not concur with the findings of the ld. CIT(A) as the assessee has proved the identity and creditworthiness of the party from whom the amount was received and genuineness of the transaction. In this view of the matter, the ground of the assessee are allowed.
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2022 (10) TMI 1260
Seeking a writ of quo warranto against the Vice-Chancellor VC of Calcutta University - authority of State government to appoint or re-appoint the VC Under Section 8 of the Calcutta University Act 1979 the Act or by taking recourse to the residuary provisions of Section 60 of the Act - HELD THAT:- The High Court in exercise of its writ jurisdiction in a matter of this nature is required to determine at the outset as to whether a case has been made out for issuance of a writ of certiorari or a writ of quo warranto. The jurisdiction of the High Court to issue a writ of quo warranto is a limited one. While issuing such a writ, the Court merely makes a public declaration but will not consider the respective impact on the candidates or other factors which may be relevant for issuance of a writ of certiorari.
A writ of quo warranto can only be issued when the appointment is contrary to the statutory rules.
The conditions of eligibility for holding the post of VC are stipulated in Section 8(1)(a) namely (i) a distinguished academic with proven competency and integrity; (ii) (a) minimum of ten years of experience in a University system of which at least five years shall be as a professor; or (b) ten years of experience in a reputed research or academic administrative organization of which at least five years shall be in a position equivalent to a professor.
The effect of the words "subject to the provisions of this section" in Section 8(2)(a) in its unamended form was that the reappointment would have to be in a manner provided in Section 8, which obviously included Section 8(1). Deletion of those words in Section 8(2)(a), as amended, would mean that the procedure which has been prescribed for making the appointment of a VC, namely the appointment of a search committee and the preparation of a panel, would not be attracted in the case of a reappointment. In the case of a reappointment, a VC who has completed a term of four years would be eligible subject to the satisfaction of the State government and on the basis of their past academic excellence and administrative record during the term of office held as a VC.
The State government chose the incorrect path Under Section 60 by misusing the "removal of difficulty clause" to usurp the power of the Chancellor to make the appointment. A government cannot misuse the "removal of difficulty clause" to remove all obstacles in its path which arise due to statutory restrictions. Allowing such actions would be antithetical to the Rule of law. Misusing the limited power granted to make minor adaptations and peripheral adjustments in a statute for making its implementation effective, to side-step the provisions of the statute altogether would defeat the purpose of the legislation.
The High Court was justified in coming to the conclusion that "in the guise of removing the difficulties, the State cannot change the scheme and essential provisions of the Act".
The judgment of the High Court is correct in law and on fact and does not warrant interference in appeal. The State government could not have issued the order re-appointing the VC - Appeal dismissed.
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2022 (10) TMI 1259
Refund of IGST - goods exported to the countries mentioned in the respective shipping bills - Zero Rated Supplies - HELD THAT:- On conjoint reading of section 16 of the IGST Act 2017, section 154 of the CGST Act, 2017 and Rule 96 of the CGST Rules 2017, for the exports made by the petitioner in the month of July and August 2017, the petitioner was entitled to receive the refund of IGST paid at the time of export supply.
Notification No. 131/2016 provides for denial of drawback specified in the schedule which is amended by Notification no.59/2017 on enactment of CGST Act, 2017 which includes exporters claiming refund of integrated goods and service tax on such exports. Notification No.37/2018 provided for denial of refund of IGST, however, such notification was issued subsequent to the date of exports made by the petitioner.
The facts of the present case are squarely covered by the decision in case of Amit Cotton Industries [2020 (7) TMI 455 - GUJARAT HIGH COURT] wherein reliance is placed upon the decision of Supreme Court in case of Commissioner v. Ratan Melting and Wire Industries [2008 (10) TMI 5 - SUPREME COURT] wherein it is held that circulars and instructions issued by the Board are merely instructions for understanding of statutory provisions and are not binding on the Court. It was further held that circulars which are contrary to the statutory provisions has no existence in eye of law.
The petitioner was holding valid registration number under the CGST Act, 2017 and was exporter entitled to benefit under the provisions of IGST Act, 2017, the petitioner is entitled to refund of IGST paid as per the provisions of section 16(3)(b) of the IGST Act, 2017 read with section 54 of the CGST Act, 2017 and Rule 96 of the CGST Rules, 2017 as the shipping bill filed by the petitioner shall be deemed to be an application for refund of IGST integrated tax paid on the goods exported outside India and such application shall be deemed to have been filed as per the procedure prescribed under Rule 96 of CGST Rules, 2017.
The petitioner is even otherwise entitled to refund of IGST as envisaged under the relevant provisions of IGST Act, 2017 CGST Act, 2017 and CGST Rules, 2017 - Petition allowed.
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2022 (10) TMI 1258
Unexplained Cash Credits u/s 68 - unsecured loans taken by the assessee from 15 parties - HELD THAT:- Because of non-compliance on the part of the assessee full inquiry could not be carried out during the remand proceedings. CIT(A) has further observed from the report received from the AO that 13 companies out of the 15 companies from whom the assessee had obtained unsecured loan were based on common 4 addresses at Kolkata.
It was also found from the search and survey action of the investigation wing of Kolkata that these companies were shell companies which were merely engaged in providing accommodation entries. Addition were sustained by the ld. CIT(A) correctly.
Also during the course of appellate proceedings before us in spite of providing abundant opportunities to the assessee to contest facts on the basis of which the ld. CIT(A) has sustained the addition, neither anyone has attended nor furnished any written submission to controvert the finding of CIT(A), therefore, we don’t find any reason to interfere in the decision of CIT(A). Accordingly, the grounds of appeal of the assessee stand dismissed.
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2022 (10) TMI 1257
Reopening of assessment u/s 147 - petitioner’s return of income did not offer to tax receipts of professional service charges from S.R. Batliboi & Associates LLP - As decided by HC [2023 (1) TMI 68 - DELHI HIGH COURT] order passed u/s 143(1) of the Act is not an assessment for the purposes of Section 147 - Further, it is not necessary in such a case for the Assessing Officer to come across some fresh tangible material to form a belief that income has escaped assessment.
The scrutiny assessment for assessment year 2019-20 also offers no assistance to the petitioner, as the petitioner did not place on record any documents such as Contract Agreement under which such transactions were carried out, copy of original invoices (not just invoice breakup) to show that the services rendered by the petitioner during assessment year 2018-19 were identical/similar to the services rendered to M/s Batliboi & Associates LLP in the assessment year 2019-20.
HELD THAT:- We are not inclined to entertain the Special Leave Petition under Article 136 of the Constitution of India.
Special Leave Petition is accordingly dismissed.
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2022 (10) TMI 1256
Review petition of the Judgment [2021 (4) TMI 276 - KARNATAKA HIGH COURT] - Assessee in default u/s 201(1) - non deduction of tax at source from the amount when such amount had not accrued to payee or any person at all - HELD THAT:- We have perused the petition as well as the Judgment passed by Kartanaka HC wherein held the provisions were created during the course of the year and reversal of entry was also made in the same accounting year.
AO erred in law in holding that assessee should have deducted tax as per the rate applicable along with interest. The authorities under the Act ought to have appreciated that in the absence of any income accruing to anyone under the Act, the liability to deduct TDS on the assessee could not have been fastened and consequently, the proceeding u/s 201 and 201(1A) could not have been initiated.The substantial question of law is answered in favour of the assessee.
There is no infirmity nor any apparent error on the face of the record to interfere with the aforesaid Judgment.
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2022 (10) TMI 1255
Revision u/s 263 - as per CIT there was no revenue from operations, the expenditure incurred on finance cost has to be capitalized and cannot be treated as an allowable expenditure u/s 37 - PCIT set aside the issue of allowability of expenditure u/s 37 of the Act to the file of Assessing Officer to the limited extent for verification - HELD THAT:- AO has made enquiries from the assessee during the course of assessment. In light of the above, we can safely conclude that the present case is not a case of no enquiry or lack of enquiry. In the present case, AO has made enquiries and thereafter, instead of disallowing the entire expenditure, had restricted the disallowance to 30% of the amount.
Therefore, it can be assumed that there is an application of mind by the AO after due examination of the facts of the case on record. It may be noted that the view taken by the AO though may not be echoing with the view as that of the PCIT, as the ld.PCIT has held that the entire expenditure of the financial expenditure made by the assessee has to be capitalized being pre-operative period expenditure.
AO on the other hand has allowed the business expenditure to the extent of 70% and has restricted to 30% being violation of section 40(a)(ia) of the Act. Once the issue has been examined, it cannot be said that the AO has not examined the issue and therefore, the question of invocation of Explanation II of Section 263 of the Act does not arise.
In the present case, AO has duly applied his mind and thereafter, restricted the disallowance to 30%. Merely because the AO has not applied the view as taken by the PCIT, it cannot be said that the order passed by the AO is erroneous as the view of the AO is also one of the possible views and when two possible views are available, then following one view will not make the order passed by the AO as an erroneous one. Decided in favour of assessee.
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2022 (10) TMI 1254
Revision u/s 263 initiated by Pr. CIT on the proposal submitted by the ACIT - HELD THAT:- Tribunal in the case of Alfa Laval Lund AB [2021 (11) TMI 327 - ITAT PUNE] quashed the order passed u/s. 263 of the Act on the proposal sent by the AO to the CIT. We note that the Tribunal, held the CIT passing the order u/s. 263 of the Act on the proposal sent by the AO is a case of jurisdiction deficit which resulting into vitiating the impugned order
Admittedly, the Pr. CIT-5, Pune initiated proceedings u/s. 263 of the Act on the proposal sent by the Addl. CIT, Range-9, Pune which is evident from impugned order, and not suo motu calling for and examining the record of the assessment proceedings. Therefore, revision jurisdiction exercised by the Pr. CIT u/s. 263 of the Act fails and it is set aside. Thus, the grounds raised by the assessee are allowed.
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2022 (10) TMI 1253
Unexplained cash credit u/s 68 - unsecured loan taken by the appellant alleging the appellant’s failure to prove the identity and creditworthiness of the creditors - HELD THAT:- Details of income tax return clearly shows that the cash creditors did not have sufficient source of income to give the loan of the size of 42,10,000/- to the assessee.
CIT(A) has also given finding that Mr. Arun Kumar Bhowmik deposited the cash amount of Rs. 10,10,000/- immediately before issuing the cheque of Rs. 12,10,000/- to the assessee which certainly create suspicion and before ld. AO, he could not explain the source of the said cash deposit in his bank account. Therefore, assessee failed to prove the creditworthiness of the cash creditors advancing loan to the assessee. Decided against assessee.
Disallowance of deduction u/s 54F - expenditure incurred on construction of residential building - HELD THAT:- Finding of ld. CIT(A) which remained uncontroverted from the assessee’s side by placing any material on record and also under the given facts and circumstances of the case where two of the parties from whom the assessee purchased the material have denied to have made any such transaction with the assessee and the inspector deputed by ld. AO on enquiry found that the bills drawn were not genuine, therefore, we fail to find any merit in the grounds raised by the assessee and the same deserves to be dismissed - Decided against assessee.
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2022 (10) TMI 1252
Addition u/s 40A(3) - business expediency in making the payments in cash - Payments made on holidays / Sundays - HELD THAT:- As seen that the payments have been made for purchase of building material, purchase of cement, sand, wood & steel, Labour payment and purchase of electrical and hardware material.
All these items are supported by relevant bills and vouchers and are related to the business of the assessee.
Assessee was working at various construction sites which were located at different places, it may not be always possible to make the payments through banking channels. It was quite possible that the supervisors had to make the payment in cash to ensure uninterrupted supply of material for construction work.
Therefore, to some extent there could be business expediency in making these payments in cash. Therefore, partly accepting the plea of Ld. AR and considering the peculiar facts of the case, we direct Ld. AO to delete addition of those payments which have been made on holidays / Sundays and re-compute the addition.
Appeal stands partly allowed for statistical purposes.
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2022 (10) TMI 1251
Rejection of books of accounts - estimation of net profit from the business of the assessee - Addition made by the AO in regard to defects found during survey for not recording the transactions and entry made in loose sheets - HELD THAT:- The increase in the sales made by the AO from 4.65 crores to 6 crores was without any basis, therefore, the actual sales reported in the audited financial statement is accepted.
AO has also not made out the case as per Chapter VI of the Act., AO noted that the some of the purchases and expenditures were not recorded, therefore, the AO had sufficient reasons for rejection of books of accounts as per section 145(3) of the I.T. Act., in view of this, AO had rightly applied the provision of section 145(3) for rejection of books of account for estimation of net profit from the business of the assessee, however, during the course of hearing, the AR fairly accepted the 5% net profit may be considered on the turnover disclosed in the audited financial statements.
Therefore, considering the profitability for the previous and subsequent assessment years, we accept the plea of the assessee for applying 5% net profit on the turnover of Rs. 4,64,79,756/- which comes to Rs. 23,23,988/-. The assessee has himself disclosed the net profit of Rs. 18,49,242/-, therefore, we confirm the addition of Rs. 4,74,746/-and the assessee gets relief of Rs. 34,36012/-. We make it clear that from the estimated profit adopted @5% on the turnover, no further deduction shall be allowed under the head income from business and profession.
Once the books of accounts have been rejected and profit has been estimated by applying sec.145(3) no further disallowance can be made under the head “income from business and profession” for tax computation of taxable income of the assessee - HELD THAT:- The pattern of assessment under the Act is given by section 29 which states that the income from profits and gains of business shall be computed in accordance with the provisions contained in sections 30 to 43D. Section 40 provides for certain disallowances in certain cases notwithstanding that those amounts are allowed generally under other sections. The computation under section 29 is to be made under section 145 on the basis of the books regularly maintained by the assessee. If those books are not correct or complete, the AO may reject those books and estimate the income to the best of his judgment. When such an estimate is made it is in substitution of the income that is to be computed u/s 29.
All the deductions which are referred to under section 29 are deemed to have been taken into account while making such an estimate. This will also mean that the embargo placed in section 40 is also taken into account. The other additions made by the AO towards disallowance of certain expenses cannot be made. Therefore, the ground no.5 and 6 is allowed.
Unexplained cash credit - HELD THAT:- The name and address were provided to the AO by the assessee and she had also requested to the AO for exercising his power u/s 131. The specimen copy of application for Deposit has been placed by the assessee in the Fixed Deposit certificates with ID No. is enclosed, the name and address is also mentioned therein. But the AO did not issue any notice to the Fixed Depositors.
AO had to enquire only those fixed depositors from whom the assessee has received Rs. 1.00/- lakh or more for fixed deposits during the year in respect of whom the confirmations have not been received. On perusal of chart produced in most of the cases the assessee submitted confirmations but the AO did not issue any summons to the rest of the fixed depositors whose balance is more than Rs.1.00/- lakh or more. Addition made by the AO towards unexplained cash credit is not justified. Accordingly, we delete the addition.
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2022 (10) TMI 1250
Validity of assessment order passed - lack of territorial jurisdiction - The appeal is admitted on the following substantial questions of law :
i) Whether the ITAT has erred in law in quashing the Assessment Order passed by the AO by holding that it suffered from lack of territorial jurisdiction and thereby allowing the assessee’s appeal without considering the fact that as on the date of passing Assessment Order, the Pan was with the ITO, Wd.9(1), Kolkata from 12/12/2002 to 31/05/2018 ?
ii) Whether the plea of territorial jurisdiction raised at the time of hearing before the Tribunal, can be entertained at all after the lapse of time limit specified in Section 124(3) and in view of Section 292BB of the Income Tax Act, 1961 ?
The appellant shall file requisite number of informal paper books prepared out of Court including therein all relevant papers and documents within ten weeks from date by serving advance copy on the respondent.
Since the respondent is not represented by its learned Advocate, let notice of this appeal be served on the respondent. Settlement of index and all other formalities are dispensed with.
List the appeal after twelve weeks.
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2022 (10) TMI 1249
Delay in payment of Employee contribution to Provident Fund - AR submitted that the payment of employee contribution to PF & ESI though belated, was paid before the due date of filing the return of income u/s 139(1) of the Act and therefore allowable u/s. 43B - HELD THAT:- We notice that the Hon’ble Supreme Court in the case of Checkmate Services [2022 (10) TMI 617 - SUPREME COURT] has considered the issue of whether the employees contribution paid before due date for filing the return of income u/s.139(1) whether otherwise allowable u/s.43B, putting to rest the contradicting decisions of various High Court.
In view of the above decision of the Hon’ble Supreme Court, we hold that the employees contribution to PF and ESI should be remitted before the due date as per explanation to section 36(1)(va) i.e. on or before the due date under the relevant employee welfare legislation like PF Act, ESI Act etc., for the same to be otherwise allowable u/s.43B. We therefore see no reason to interfere with the order of the CIT(Appeals). The grounds taken by the assessee on this issue is dismissed.
Disallowance of Club fees - AO confirmed the disallowance while completing the assessment u/s.143(1) since the assessee did not file any response - CIT(Appeals) confirmed the same on the same ground that the assessee did not file any details - HELD THAT:- We notice that the lower authorities have not verified the details of club expenditure based on documents /details. The contention of the assessee that these expenditure are incurred wholly and exclusively for the purpose of business need to be factually verified before the deciding the allowability u/s.37 of the Act - we remit the issue back to the AO, to examine the nature of club expenditure i.e., whether the same is incurred for the purpose of business and decide the allowability in accordance with law, after giving reasonable opportunity of being heard to the assessee. The assessee is directed to submit the required details and cooperate with the proceedings. This ground is allowed for statistical purposes.
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2022 (10) TMI 1248
Denial of registration u/s 12AA - appellant trust is engaged in imparting education by running two institutions namely Guru Govind Singh Collection Education and Swami Dayanand Sarswati Educational Institute and offering B.Ed., BEID, DEIED, B.Pharma courses - HELD THAT:- Bench is of considered opinion that grant of recognition and its extension is sufficient compliance of the laws material for achieving its objects and beyond that no inquiry is required. It is for the concerned statutory authorities to see that the conditions of accreditation of the courses are complied. There is no requirement of any supporting documents/ bills/ vouchers in regard to educational activity being run when the authorities responsible for regulating the education of that stream or course examine eligibility to run the courses and that the same are run in accordance with law.
Appeal of assessee is allowed with direction that subject to the Ld. CIT(E) being satisfied about extension of the accreditation of the B.Ed. course beyond 30.06.2018, vide letter dated 10.05.2018 issued by Mahatma Jyoti Phule Rohilkhand University, Bareilly, the CIT(E) shall allow the application of the assessee. An opportunity of hearing for filing relevant evidence in that context be given to the assessee.
Appeal of assessee is allowed for statistical purposes.
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2022 (10) TMI 1247
Estimation of income - Bogus purchases - addition that was made by the A.O towards peak addition of purchases - HELD THAT:- We find substance in the claim of the Ld. AR that as it is not a case that the assessee had made any purchases from his unaccounted money, therefore, the very basis for making the impugned addition of peak purchases could not be sustained and had rightly been struck down. As observed by the CIT(Appeals) and, rightly so, the aforesaid addition has no legs to stand upon in the backdrop of the facts involved in the case before us. Admittedly, the payments towards the impugned purchases have been made by the assessee from his bank accounts which were duly disclosed in his books of accounts. In our considered view the concept of peak addition would come into play in a case where the assessee had made certain undisclosed purchases out of his unaccounted money lying in a bank account, wherein, after considering the withdrawals made from the said account the addition in all fairness has to be restricted to the extent of peak credit appearing in the said account.
In our considered view, now when the assessee had admittedly made the payments for making the impugned purchases from his duly disclosed sources i.e. bank accounts, therefore, there could be no justification for the A.O to have made an addition of the amount of peak purchase. We, thus, concur with the view taken by the CIT(Appeals) and uphold his order to the said extent. Decided in favour of assessee.
Addition on account of short yield of rice as in comparison to the percentage of yield as mentioned in the contract that was executed by the assessee with Chhattisgarh State Government Authority - HELD THAT:- We find substance in the claim of the Ld. AR that as the addition was made by the A.O on the basis of misconceived and incorrect facts, thus, the same had rightly been vacated by the CIT(Appeals). On a perusal of the orders of the lower authorities, it transpires that the A.O while arriving at the assessee’s yield of rice (own milling) for the year under consideration at 61.30% had erred on two counts, viz. (i) that the actual yield of rice (own milling) was 62.65% and not 61.30% as stated by the A.O; and (ii) that the A.O had erred in not considering the 5.60% yield of kanka (broken rice). In sum and substance, though the yield of rice of the assessee was 68.25% [62.65% (rice) + 5.60% (kanka)], but the same was wrongly taken by the A.O at 61.30%.
As observed by the CIT(Appeals) and, rightly so, as the yield of rice as per norms of the State Government was 67% (68% for Usna variety of paddy) while for that in the case of the assessee worked out at 68.25% i.e. after considering 5.60% of Kanka (broken rice), therefore, there was no justification on the part of the A.O to conclude that the same was below the norms fixed by the state government. As a matter of fact, as observed by the CIT(Appeals) by referring to the specification of various impurities fixed by the government the broken rice (kanka) a/w. other impurities form a part of the accepted quality of rice as per the norms fixed, though, subject to the condition that the quantity of broken rice does not exceed 25% in case of raw rice and 16% in case of Usna rice.
Controversy in hand had arisen primarily for the reason that the A.O had excluded the yield of broken rice (kanka) while working out the yield criteria. As the yield of rice alongwith yield of broken rice (kanka) works out at 68.25%, therefore, in our considered view the CIT(Appeals) had rightly vacated the adverse inferences drawn by the A.O. CIT(Appeals) had rightly vacated the addition made by the assessee on account of short yield of rice uphold his order to the said extent - Decided in favour of assessee.
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2022 (10) TMI 1246
Assessment u/s 153A - incriminating materials as found during search proceedings or not? - HELD THAT:- The Hon’ble Delhi High Court in the case of Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] has categorically held that a non-abated assessment can only be reopened u/s. 153A of the Act if during the course of the search proceedings some incriminating materials have been found.
Since this is not the situation in the impugned assessment year A.Y.2007-08, therefore, the assessment framed u/s. 153A of the Act becomes bad in law and deserve to be quashed.
Nature of receipt - incentive / subsidy - revenue or capital receipt - Deduction as per the West Bengal Incentives Scheme 2000 by which sales tax subsidy and power incentive has been provided in the scheme mainly for sustaining the units in backward year - CIT(A) concluded by holding “just because the scheme of West Bengal Government talks about generation of employment or development of the area does not make any incentive / subsidy as capital receipts in the hands of the assessee - HELD THAT:- West Bengal Incentive Scheme 1999 was discontinued pursuant to the national policy. However, the state of West Bengal decided to introduce the West Bengal Incentive Scheme 2000 which also covered the district of Howrah and, therefore, the units of the assessee are eligible for the incentive scheme. It is provided that the industrial unit to get State capital investment subsidy on the investment made in the fixed capital depending on location with direct employment generation of 200 or more. The minimum investment qualified for special package of benefits as mega projects is Rs. 25 crores and it is provided that the waiver of electricity duty on electric consumption for production/ operation for 5 years. The 2000 scheme was generally be applicable to all large, medium, cottage and small scale projects to which / medium sector tourism units to be set up and also to expansion projects of existing units on or after 1.01.2000.
Eligibility criteria is concerned the unit at Jangalpur Distt. Howrah is eligible and there is no quarrel in respect of its eligibility. The only reason for denying the scheme of the assessee given by the CIT(A) is that the purpose of the subsidy is to be decided by utilization of subsidy. This is not what the Hon’ble Supreme Court has decided in the case of VSSV Meenakshi Achi [1965 (12) TMI 34 - SUPREME COURT] has held that the character of the of the subsidy in the hands of the recipient is to be determined having regard to the purpose for which the subsidy has been given.
As in the case of Ponni Sugar and Chemicals Limited [2008 (9) TMI 14 - SUPREME COURT] had the occasion to consider the taxability of incentive bestowed on new / expanded sugar factories and the Hon’ble Supreme Court following Sahaney Steel and Press Works Ltd. [1997 (9) TMI 3 - SUPREME COURT] held that the subsidy received by the assessee was in the nature of capital receipt since the object behind the same was to assist entrepreneurs in setting up of new unit/ expansion of existing business.
We are of the considered view that the purpose for which the incentive have been given can be gauged from the objects and reasons behind introduction of the policy and as per the policy discussed elsewhere, it can be safely concluded that the intention of the State Government of West Bengal behind providing incentives were to promote industrialization, development of State, Generation of Employment, being objects in larger public interest.
Thus we direct the AO to allow the claim of the assessee for A.Y. 2009-10 and 2012-13.
Appeals of the assessee are allowed.
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2022 (10) TMI 1245
Exemption from GST - leasing of residential premises as hostel to students and working professionals - it was held by the High Court that 'The service provided by the petitioner i.e., leasing out residential premises as hostel to students and working professionals is covered under Entry 13 of Notification No.9/2017 dated 28.09.2017 namely 'Services by way of renting of residential dwelling for use as residence' issued under the Act. The petitioner is held entitled to benefit of exemption notification.'
HELD THAT:- Issue notice, returnable three weeks hence.
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2022 (10) TMI 1244
Quantification of demand - Valuation of excisable goods manufactured - valued lower than the cost of production and profit of the goods - Section 4(1) (a) of the Central Excise Act, 1944 - recovery of short paid duty with interest and penalty - HELD THAT:- From the perusal of the report of the cost auditors it is evident that there are few instances wherein the goods specially “Palio” model cars were being cleared on transaction value which was lower than the cost of production. It was clarified by the appellant that the said model was being phased out. Commissioner has rejected the said argument, ignoring the factual report contained in the cost auditor report there is no sale of the said car during the Financial 2012-13, and thereafter.
It is found that the ratio at which the cost of production of Palio cars has increased over the years is much higher than the ratio for the other Fiat Car models manufactured by the assessee. With no evidence of any plan to stop production and selling of Palio brand cars from 2008 onwards itself being on record, the above analysis clearly implies that in the case of Palio models, the assessee failed to bring down the cost of production and hence resorted to selling the cars below the cost of production to penetrate the segment - when production and clearance show such sharp decline, rejection of the submission to this effect that this was being phased out cannot be justified.
In the present case it is not even the case of revenue that any additional consideration over the price charged for the actual sale of goods was received by the appellant from the buyer of goods in any manner directly or indirectly. That being so, there are no hesitation in holding that the transaction value is to be accepted for determination of the duty liability in respect of the goods cleared by the appellant, and the amendment made in the rule 6 in 2014 is only clarifying.
There are no merits in the grounds for confirmation of demand against the appellant we are not taking the other issues of limitation, demand of interest and imposition of penalty for discussion.
The impugned order set aside - appeal allowed.
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2022 (10) TMI 1243
Reopening of assessment - reason to believe - bogus sauda chitthi against the purchase of an immovable property situated at Surat wherein one person claimed to have paid an amount as advance to petitioner - as per reasons for reopening assessment assessee did not account an amount of advances nor did he show the same in his ROI for the year and therefore, there is escapement of income chargeable to tax - HELD THAT:- From the record, it appears that the immovable property has not been sold by the petitioners and other co-owners to Shri Kiritkumar V. Makadiya by execution of sale deed and the immovable properties are registered in the name of the petitioners and also the possession of the properties is with the petitioner and other co-owners. Thus there is no income accrued on account of transfer of a capital asset either by way of sale deed or handing over possession pursuant to agreement to sell.
It is well settled that the Assessing Officer must have reason to believe that income chargeable to tax has escaped assessment. In the present case, there is no escapement of any income chargeable to tax due to failure on part of the assessee to disclose truly and fully all material facts as all the relevant records were produced on record. In absence of any escapement of income chargeable to tax, it is not open for the department to reopen the case of the present assessee.
Thus impugned notices u/s148 are not tenable in law and are accordingly quashed and set aside and consequently the orders disposing of the objections raised by the petitioners against the notice for reopening are also quashed and set aside. Assessee appeal allowed.
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2022 (10) TMI 1242
Exemption from Sales Tax - Transmission Belts - cotton fabric falling under Entry 5 of IV Schedule read with Section 8 of APGST Act or not - HELD THAT:- The findings of the Hon’ble Supreme Court, in in Fenoplast’s case [1998 (9) TMI 92 - SUPREME COURT], clearly applies to the case on hand. Explanation to IV Schedule of the State Sales Tax Act makes it clear that the expression used in Item 5 thereof has the meaning that is assigned to in the Central Act 58 of 1957. Hence, the words cotton fabrics, man made fabrics and woollen fabrics in Item 5 of IV Schedule, have to be read in the light of Item 59.03 of the I Schedule to Central Act 58 of 1957, which refers to textile fabrics, impregnated cloth covered or laminated.
Therefore, the appellants’ product is covered by Item 59.03 and the appellants were liable to pay and accordingly, paid additional duties of excise under the Central Act 58 of 1957. Having regard to the above, the petitioner is liable for exemption, in view of Section 8 of the State Sales Tax Act. Hence, inclusion of Entry 101 of I Schedule would not make any difference to this decision.
Both the Tax Revision Cases are allowed. There shall be no order as to costs.
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