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Showing 21 to 40 of 1551 Records
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2024 (2) TMI 1534
Disposal of the suit filed by the assessee as claimed amounts from the State far in excess of that already disbursed which disbursed amounts also is claimed to have been utilized fully in providing flood relief - HELD THAT:- We have to immediately notice that though the amounts were siphoned off and deposited in an account of a fictitious firm, registered in the name of a fictitious person, the assessee admits to have utilized the said amounts in supplying relief material. There is also evidence to substantiate the operation of the accounts by the assessee.
Hence, as held by the Tribunal, the assessee cannot wriggle out of the liability unless the purchases and the money spent on relief material is substantiated, failing which the assessee would have to be taxed for the entire money’s received in the accounts.
We do not think that there is any reason to keep the matter pending till the suit is disposed off. As has been rightly noticed by the Tribunal, neither would the findings of the Assessment Officer have a bearing on the disposal of the suit nor would the findings in the suit have a bearing on the assessment to be carried out.
Assessee has not produced any material before the AO to substantiate the purchases made by him, from the amounts disbursed by the State Government for the purpose of providing flood relief. Tribunal has categorically noticed that no evidence was led by the assessee before the AO
A contention was raised based on Section 50 of the Disaster Management Act, 2005, but no certificate of utilization was produced by the assessee. The supply of relief material was the responsibility of the Corporation and if at all, the utilization certificate is obtained, it can only be by the Corporation. The assessee had no privity of contract either with the State or the Corporation to supply relief material and there is no question of a utilization certificate issued under the Disaster Management Act coming to the rescue of the assessee.
We find absolutely no question of law arising in the case and the question framed is one on facts and not on law.
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2024 (2) TMI 1533
Classification of 'PVC raincoats' for exports through the port of Nhava Sheva - to be classified under HSN code 392690 or HSN code 6201? - HELD THAT:- On plain reading of the provisions of Chapter Notes of Chapter 39 it is amply clear that the product in question i.e. PVC raincoats are not covered under any of the headings of the Chapter 39. The applicant has explained the manufacturing process of PVC raincoats whereby it is evident that the products to be exported by the applicant is raincoat which can be said readymade garment. The fact that raincoat is made of PVC does not render it to be considered as article of plastic. Thus, classifying PVC raincoat under Chapter 39 is not apropos to the provisions of Chapter Notes of Chapter 39.
The applicant has submitted that to manufacture PVC raincoat the small PVC sheets are generally not stitched with a needle and thread. Since PVC is nonporous, a needle would leave a large hole that would allow water to enter, making for a very ineffective raincoat, and weakening the seam. Instead, PVC seams are generally "welded" (sealed) with heat, or bonded by chemical means. Either way, the all pieces of materials are melt together, either thermally or chemically, and are permanently bound. Thus, it is a non-woven product. Chapter Note 1 of Chapter 61 states that "This Chapter applies only to made up knitted or crocheted articles". Therefore, by applying this chapter note 1 ibid it is amply clear that PVC raincoat can not be classified under heading 6101: Men's or boys' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets) wind-cheaters, wind-jackets and similar articles, knitted or crocheted, other than those of heading 61.03. Articles covered under heading 6103 are also knitted or crocheted.
Heading 6201 covers Men's or boys' overcoats, car-coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles, other than those of heading62.03. Heading 6203 covers Men's or boys' suits, ensembles, jackets, blazers, trousers, bib and brace overalls, breeches and shorts (other than swimwear). Plain reading of these two headings makes it clear that heading 6201 is the most suitable heading to cover raincoat, moreover, CTI 6201 4010 specifically covers--- Overcoats, raincoats, car-coats, capes, cloaks and similar articles (of man-made fibres).
'PVC raincoats' merit classification under CTH 6201 and more specifically under CTI 6201 4010 of the first schedule of the Customs Tariff Act, 1975.
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2024 (2) TMI 1532
Disallowance of interest expenses as the assessee had not started its business activities - ITAT deleted addition - HELD THAT:- ITAT's decision to allow the deduction of interest expenses u/s 57(iii) was upheld, based on the direct nexus between the borrowed funds and the interest income earned by the assessee. No justification to interfere with the view taken by the ITAT. The appeal raises no substantial question of law.
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2024 (2) TMI 1531
Expenses incurred are excessive u/s 40A(2)(b) - as during the assessment proceedings the said did not furnish any benchmarking analysis in order to justify expenses in relation to its related parties to substantiate its claim that the expense re not unreasonable in terms of the said provision of the Act - ITAT deleted addition - HELD THAT:-According to the ITAT as well as in our considered opinion, all material particulars had been duly placed before the DRP and the Assessing Officer failed to justify the invocation of the said provision. The ITAT has further found that the Department had failed to produce any material or establish from the record that the expenses claimed were inflated or unjustified. The Department had also not founded its allegation on a single comparable so as to even prima facie establish that the expenses had been unduly claimed.
Applicability of provisions of section 44BBB - It was found that the assessee was not executing a turnkey power project.
No substantial question of law.
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2024 (2) TMI 1529
Scope of Consumer under the provisions of the Consumer Protection Act, 1986 - borrower of a project loan, falls within the definition of ‘Consumer’ or not - HELD THAT:- A bald averment that company engaged itself in the post-production of the movie solely for the purposes of brand-building does not alter the fundamental nature of the transaction, i.e. the availing of credit facility from the appellant-bank, which was purely a business-to-business transaction, entered into for a commercial purpose. Post-production of a film involves multiple activities, which finally gives shape and presentation to a film, which is a commercial venture.
In Lilavati Kirtilal Mehta Medical Trust vs. Unique Shanti Developers [2019 (11) TMI 1824 - SUPREME COURT], this Court has observed that no straitjacket formula can be laid down for determining whether an activity or transaction is for a commercial purpose and has laid down certain principles which are to be kept in mind.
What is to be seen here is that whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the person who has availed the service. Therefore, the respondent No.1 is not a ‘consumer’ in terms of Section 2 (1) (d) (ii) of the Act.
Conclusion - The borrower was not a consumer, thus rendering the consumer complaint non-maintainable.
Appeal allowed.
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2024 (2) TMI 1528
Validity of order passed by ITAT without granting sufficient opportunity to the assessee - denial of natural justice - HELD THAT:- Tribunal by recording that no representative has appeared on behalf of the assessee and also on the previous occasions proceeded to decide the matter on merits. The nature of disputes involved for adjudication of the Tribunal are on factual aspects. The Tribunal being final fact finding authority was expected to grant sufficient opportunity to the assessee to submit his case.
Tribunal by proceeding to decide the appeal on merits without granting sufficient opportunity to the assessee, it would prejudice the assessee’s interest. The further appeal under Section 260 A of the Act before this Court would be on substantial questions of law. In the circumstances, we are of the view that the order of the Tribunal is not sustainable and the same needs to be set aside on the ground of violation of principles of natural justice.
Appeal is allowed. The appeal is remitted to Tribunal for fresh consideration after granting opportunity of hearing to the assessee/assessee representative and the revenue
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2024 (2) TMI 1527
Absolute confiscation of the goods imported - used motor vehicle - levy of penalty - entitlement to the benefit of Transfer of Residence (T.R.) under the Customs Act, 1962, for the importation of a used motor vehicle - principles of natural justice - HELD THAT:- The fact remains that indisputably, the appellant has been unable to evidence that the appellant has fulfilled the conditions of the T.R. as was conceded before the lower adjudicating authority; and indisputably, the appellant is therefore also unable to evidence compliance of the conditions of ITC (Hs) Schedule I- import policy appended to chapter 87, that are required to be adhered while importing a passenger vehicle, a restricted item.
However, that does not translate into a power to the customs authorities to give re-export as the sole option upon imposing a redemption fine, as if compelling a re-export. It is seen that a division bench of this Tribunal has held in the decision in HBL Power Systems Ltd v.CC, Vishakapatnam [2018 (7) TMI 793 - CESTAT HYDERABAD] where it was held that 'not only Section 125 but no Section of the Customs Act, 1962 gives any officer the power to compel anyone to import or export or re-export. This Section also does not give the Adjudicating Authority the right to give a conditional redemption saying “you can redeem only if you agree to re-export”.'
It is seen that for violation of the import policy with respect to car imports, a division bench of this Tribunal has held that absolute confiscation is not warranted in its decision in J. S. Gujral v Commissioner of Customs, Chennai, [2016 (3) TMI 607 - CESTAT CHENNAI].
Therefore, this Tribunal is of the view that the order of confiscation and imposition of penalty in the appellant’s case cannot be faulted. However, confining the option only to re-export on payment of redemption fine is opposed to the decisions aforementioned and is decidedly untenable - this Tribunal is of the view that the appellant is required to be extended the option to redeem the vehicle on payment of redemption fine.
The order of confiscation with an option to re-export on payment of redemption fine is hereby modified into an order of confiscation with an option of redemption of the vehicle. Given the facts and circumstances of this case, the penalty imposed under Section 112(a) is also reduced to Rs.1,00,000/-
Conclusion - i) For restricted goods, absolute confiscation is not justified; redemption should be allowed on payment of applicable fines and duties. ii) Section 125 of the Customs Act does not empower authorities to impose conditions like re-export for redemption. iii) The penalty imposed under Section 112(a) should be proportionate to the violation and circumstances. iv) The adjudicating authority must adhere to principles of natural justice and cannot ignore appellate directions.
The matter is remanded to the adjudicating authority for re-determination of duties and redemption fine, with instructions to consider issuing a waiver for detention and demurrage charges - appeal disposed off by way of remand.
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2024 (2) TMI 1526
Dishonour of Cheque - presumption as regards validity of cheque - seeking a forensic opinion to compare the contents of the cheque with the signature of the petitioner - HELD THAT:- Attention drawn to the judgment in Bir Singh [2019 (2) TMI 547 - SUPREME COURT], wherein it has been observed that even if a blank cheque leaf is voluntarily signed and handed over by the accused towards some payment would attract the presumption under Section 139 of the Act and in the absence of any cogent evidence to show that the cheque was not issued in discharge of the debt, the presumption would hold good.
It is not in dispute that in the instant case, the accused has signed the cheque. The only dispute is with regard to the age of the ink used in making the signature on the cheque and the age of the signature and contents of the cheque.
It is found that the application filed by the accused before the trial Court was wholly frivolous and that the trial Court had rightly rejected the said application. The High Court ought not to have allowed the said application and thereby allowed the revision petition of the respondent-accused.
Conclusion - i) The age of the ink used in the signature and the contents of the cheque were the only points of contention in the present case. ii) The accused's application before the trial court is found to be frivolous, and the trial court's rejection of the application is deemed appropriate.
The impugned order set aside - appeal allowed.
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2024 (2) TMI 1525
Challenge to assessment order - reasonable opportunity to contest the tax demand not provided - violation of principles of natural justice - HELD THAT:- N/N.53/2023 has been placed on record. The said notification is applicable to assessment orders issued on or before 31.03.2023. The assessment order in this case was issued on 29.03.2021. The said Notification applies to assessees who could not file an appeal within the time limit specified in Section 107 of the applicable GST enactment or whose appeal was rejected solely on the ground of delay. The petitioner herein would fall within the first category. As per the Notification, such appeals may be received if filed on or before 31.01.2024. In the case at hand, the petitioner presented this writ petition on 09.01.2024, which is prior to 31.01.2024. In these circumstances, the petitioner makes out a case to exclude the period when the writ petition had been filed and was pending before this Court. If such period is excluded, the petitioner is in a position to present and prosecute an appeal in terms of N/N. 53/2023.
Therefore, without expressing any opinion on the merits of the matter, the petitioner is granted leave to present an appeal in terms of N/N. 53/2023 provided such appeal is filed within a maximum period of seven days from the date of receipt of a copy of this order and subject to fulfilment of conditions specified in N/N. 53/2023.
Petition disposed off by way of remand.
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2024 (2) TMI 1524
Invocation of extended period of limitation - confirmation of demand that was raised on the basis of information received from Income Tax Department in Form 26AS - HELD THAT:- It was held by this Tribunal in the case of [2017 (7) TMI 168 - CESTAT ALLAHABAD] that it was the responsibility of the executive to examine the records and examine the audit objection raised with reference to the records and facts of the case and take a view whether there is a sustainable case for issue of show cause notice and that charges in the show cause notice have to be on the basis of books of account and records maintained by the assessee and the other admissible evidence and the transactions recorded in the books of account cannot be held to be contrary to the facts.
It was further held by this Tribunal in the case of Kush Construction [2019 (5) TMI 1248 - CESTAT ALLAHABAD] that without examining the reasons for difference in the figures reflected in Form 26AS and ST-3 returns, Revenue cannot raise demand on the basis of such difference without establishing that the entire amount received by the appellant as reflected in the said returns and Form 26AS being consideration for services provided and without examining whether the difference was because of any exemption or abatement.
Clause (44) of Section 65B of Finance Act, 1994 has provided for definition of service and it has elaborately dealt with a list of activities which shall not be included in such definition. Further, Section 66D of Finance Act, 1994 has provided for negative list of services where the activities provided covered by such negative list do not qualify to be a taxable service. Therefore, it is clear that while determining the value of taxable service under Section 67 ibid, such aspect as to the activities which are covered by negative list and activities which are mentioned in the definition of service as those which are not covered by such definition become important.
Conclusion - For arriving at amount of service tax not paid or not levied arriving at correct value of taxable service which has not suffered service tax needs to be determined as the first step. Further, there are services where entire or part of service tax is to be paid by service recipient. In addition, mega exemption N/N. 25/2012-ST dated 20.06.2012 has provided exemption to various activities from the levy of service tax. Therefore, unless the data is examined with reference to all the above stated aspects, no one can come to a conclusion about the exact value which has not suffered service tax. Such exercise has not been undertaken in the present case.
The impugned order is set aside - appeal allowed.
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2024 (2) TMI 1523
Seeking to initiate Insolvency Resolution Process for the Personal Guarantor - validity of the personal guarantee agreement and limitation - HELD THAT:- The issue/objections raised by the Ld. Counsel for the Personal Guarantor will be considered after the submission of the report by the Resolution Professional and response of the Personal Guarantor on the same.
Shri Ram Ratan Kanoongo, as proposed by the Financial Creditor in Part-IV of the Form-C, who is registered with IBBI as Insolvency Professional having Registration No. IBBI/IPA-001/IP-P00070/ 2017-18/10156 is appointed as the Resolution Professional in the present matter. Written consent is given by the said RP through Affidavit dated 20.12.2021 which is annexed as Exhibit -18 of the petition.
Petition disposed off.
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2024 (2) TMI 1522
Validity of reassessment proceedings beyond period of limitation - as argued reasons as recorded would clearly evidence that the reassessment is essentially a “change of opinion” which had already been formed during the course of original assessment - scope of mere generation of a notice
HELD THAT:- A Court would, while examining a challenge to the invocation of Section 148, and where it be asserted that it essentially amounts to a change of opinion, have to bear in mind that the power to reassess would be wholly unjustified in a case where the assessment order itself reflects that an issue was raised and duly examined.
Usha International [2012 (9) TMI 767 - DELHI HIGH COURT] lays emphasis on the assessment record and the various queries that may have been addressed by the AO for eliciting information. It thus held that if the record of the reassessment proceedings were to evidence a query being specifically addressed and answered by the assessee and the same not being pursued by the AO or leading to an addition being made must necessarily be rendered finality and a quietus. This it observed since it found that even if the view taken by the AO in that respect were erroneous or prejudicial to the interest of the Revenue, it did not stand deprived of a right to adopt corrective measures including those provisioned for in Section 263 of the Act. However, it was held that such a contingency would not justify the power of reassessment being exercised.
Fresh or new factual information that may come to light pursuant to an order of assessment made subsequently - The Full Bench in Usha International held that if new information comes to the knowledge of the AO in the course of undertaking an assessment for a subsequent period, the same could be validly taken into consideration and would not amount to a change of opinion. It observed that an opinion which may have been formed originally, if established to be based on wrong or incorrect facts, would not stand insulated or rendered immunity from review. It thus held that factual information or material which was either not available at the time of original assessment or which comes to light subsequently may justify the initiation of reassessment proceedings.
Usha International pertinently observes that it is equally important to bear in consideration the fact that if material facts are duly disclosed by an assessee, it is for the AO to draw appropriate legal inferences and appreciate the implications of those disclosures. It thus held that a failure on the part of the AO to duly apply a legal provision or give shape to a liability which would arise under the Act despite appropriate disclosures being made, would not justify the invocation of Section 148.
Reverting then to the facts of our case, we find that the petitioner had unmistakeably placed copious material on the record during the original assessment proceedings and which would have been relevant and determinative of the “four new issues” which constitute the basis for invoking Section 147. The respondents, therefore, cannot justifiably urge that the petitioner had failed to make a full and true disclosure. Whether it be with regard to remittances to SMC, TDS, long or short term capital gains, the petitioner had not only made adequate disclosures, these aspects also appear to have been duly flagged and noticed by the AO in the course of the original assessment.
The details of the material placed for the consideration of the AO, the documentation submitted, the nature of the queries that were addressed and the replies submitted leave us in no doubt that all material germane and relevant to the assessment had been duly presented by the writ petitioner.
Having thus found that the petitioner has crossed the rubicon of a full and true disclosure, we then proceed forward to consider whether the impugned action constitutes a change of opinion and whether the fresh material could have been validly taken into consideration for the purposes of formation of opinion that reassessment was warranted.
The record which has been analysed by us leads us to the inevitable conclusion that it would be wholly incorrect to hold that the AO was not cognizant of the relevant facts, the different heads of income and expenditure involved, the remittances made to SMC as well as the issue of short and long term capital gains. The petitioner has also demonstrated that appropriate disclosures were made with respect to placement of representatives of SMC in India.
This, therefore, clearly appears to be a case where the AO, though conscious and cognizant, chose not to make any additions, draw any adverse inference or doubt the stand which was taken by the writ petitioner.
The discussion on this aspect, however, must be prefaced with the observation that it is not the case of the respondent that what was disclosed by the petitioner in the earlier assessment had been found to be incorrect or wrong.
It is also not their case that the material and information that came to light in the subsequent AY casts a doubt on the correctness or credibility of the responses which were submitted. It is these aspects which convince us to hold that the “four new issues” neither constituted fresh information nor could have validly formed the basis for commencement of action under Section 147 of the Act. In our considered opinion, this was at best a case where the respondents could have perhaps only alleged that the AO had failed to correctly appreciate and apply the appropriate legal provisions or give shape to a liability under the Act despite adequate disclosures having been made.
A reading of the reasons assigned establishes that the AO has not even made a token or superficial attempt to evaluate the issue from that perspective. The decision to reopen thus clearly appears to have been predicated solely on the basis of what the AO came to hold in AY 2010-11. We thus and for all the aforesaid reasons find ourselves unable to sustain or uphold the impugned action under Section 147 of the Act.
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2024 (2) TMI 1520
Validity of Reopening of assessment u/s 147 - proceedings are initiated within a period of 4 years - reasons to believe - in the objections to the reasons recorded, the petitioner had specifically raised a plea that there is no double deduction of the same amount - HELD THAT:- There is no rebuttal to this objection by AO in his order dealing with the objections and therefore it would be safe to conclude that the officer has accepted that there is no double deduction. In any case on the directions of the Court, Profit and Loss account was produced in which these items do not appear to have been debited and therefore, no case is made for double deduction. Therefore, even on this count the basis of reopening falls to ground.
The four items namely Inventories, Sundry Debtors, Loans & Advances and Cost of Set Top Boxes sold which are subject matter of reassessment proceedings were reduced from the Share Premium Account and claimed as deduction in the computation of income.
Treatment given by the petitioner against the Share Premium Account is a balance sheet item and not routed through the profit and loss account. Therefore, the petitioner made a claim in the computation of income while offering its income under the Income-tax Act.
AO himself accepts in the reasons recorded that these items have not been charged to profit and loss account. We fail to understand that if these items are not charged to the profit and loss account then how can it be said that there is a double deduction. On a query being raised by this Court, the respondent has not justified the issue of the petitioner claiming double deduction of the same amount for which the reopening was sought. Therefore, even on this count the impugned proceedings are required to be quashed and set aside.
The petitioner is justified in relying upon the decision of Aroni Commercials Limited [2014 (2) TMI 659 - BOMBAY HIGH COURT] wherein held that even in case of reopening within 4 years from end of the assessment year if the issue was examined in the course of the assessment proceedings then no reopening of assessment can be done since the same would amount to change of opinion. In our view, the ratio of this decision supports the case of the petitioner.
Thus impugned notice u/s 148 set aside. Decided in favour of assessee.
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2024 (2) TMI 1519
Representation filed before the respondents for the revocation of suspension and reinstatement in service - State's failure to consider representations from aggrieved parties before resorting to litigation - principles of natural justice - HELD THAT:- This Court deems it appropriate to note that the State, by constitution as well as practice is a welfare-state. The State, whilst exercising governance over it’s citizens, is expected to protect and promote the citizen’s social and economic well-being, based on the ideals of equal and due opportunity and public responsibility for citizens who find it difficult and/or are unable to bare the necessities of life.
It is noted that the writ court, whilst exercising jurisdiction under Article 226/227 of the Constitution of India, employs a discretionary approach, where in the presence of an alternate and efficacious remedy, the Courts often ponder in delegating the dispute to the said alternate authority, better equipped with experts or otherwise, to entertain the dispute. Resultantly, in service matters, the primary expert and/or the body possessing the complete acumen regarding the issue is the State itself, being one of the parties to the litigation before the Court.
By assiduously addressing the grievance put forth by the aggrieved employees and acting as first responders, the State can very well do itself a favour and reduce the litigation before it substantially. It goes without saying that the State is patently/obviously not under the responsibility to address the representations positively in favour of the aggrieved-employees. Rather, the only requirement it ought to fulfill is that of providing an ear to their grievance, and thereafter pass appropriate speaking orders in compliance of the principles of natural justice, which may or may not address the aggrieved employee’s concerns to their liking. However, by said the careful consideration of the representations received by the State, even if a fraction of the grievance(s) are resolved, of which the cost is born by the State exchequer as well as the litigating employees, the litigation before the Courts wherein the State is a party shall reduce immensely.
Chief Secretary for the State is directed to issue instructions to the State instrumentalities to consider the representations of aggrieved parties and dispose of the same by way of speaking orders, so that frivolous/uncalled for litigation is cut-down before the already exceedingly over-burdened courts.
Conclusion - The respondent-State is directed to pay due and timely heed to the representation preferred by the petitioner on 23.08.2023 and thereafter, pass a speaking order within a period of 30 days. It is expected that the principles of natural justice shall be adhered with.
Petition disposed off.
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2024 (2) TMI 1518
TP adjustments - specified domestic transactions of raw material transfer from Non-SEZ Units to SEZ Units - AO made reference u/s 92CA(1) to the TPO for determination of Arms’ Length Price (ALP) - HELD THAT:- TP analysis of the assessee was rejected by the TPO. However, while determining the ALP, TPO has also adopted cherry picking of certain products out of 11 families.
When the assessee is selling its formulation under 11 families from one unit to another unit of the assessee, then the entire lot of formulation will be considered as a basket of products and the TPO is not justified in picking only some of the products which are having low price and excluding the products which are having higher prices in comparison to the unrelated transactions of the assessee.
Therefore, we find that neither methodology applied by the assessee which excludes 70% of the products while determining the ALP and benchmarking its specified domestic transactions in the TP study is acceptable as resulting a distorted outcome, nor the action of the TPO while cherry picking some of the products out of the total basket of 11 product formulations showing as 11 families of the formulation is a right approach. We further note that in the subsequent A.Y i.e. for the A.Y 2020-21, the TPO himself after rejecting the TP analysis of the assessee has proceeded to conduct an independent search by applying TNNM as the most appropriate method.
Assessee has claimed that its specified domestic transactions having operating margin of 25.21% is at arm’s length in comparison to the median margin of the comparable at 20.61%. Accordingly, this issue is remanded to the record of the TPO/Assessing Officer for determination of the ALP by adopting TNNM as the most appropriate method based on the external comparables as well as international comparables of the assessee. If the operating margin of the assessee is found to be within the tolerance range of 3% of ALP, then no adjustment would be called for. Needless to say, before passing the fresh order, the assessee be given an appropriate opportunity of hearing.
Disallowance of weighted deduction u/s 35(2AB) - AO has restricted the claim of weighted deduction u/s 35(2AB) only to the extent of the expenditure incurred for in house R&D facility and denied the claim in respect of the expenditure incurred on clinical drug trials outside the inhouse facility - HELD THAT:- When the issue as well as the facts are identical for the year under consideration to that of the A.Y 2017- 18, then to maintain the rule of consistency, we following the earlier order of this Tribunal and allow the claim of the assessee u/s 35(2AB) of the I.T. Act, 1961 for the entire expenditure as referred in the report of the DSIR.
Disallowance of additional depreciation - claim was dis-allowed by AO in the draft assessment order by giving the reasons that it was used for less than 180 days - HELD THAT:- DRP after considering all the relevant facts and material has accepted the claim of the assessee and directed the AO to allow additional depreciation u/s 32(iia). In the final assessment order, the AO has not given the effect to the directions of the DRP which is not only uncalled for but also reflects the indiscipline on the part of the AO. Accordingly, we direct the AO to give effect to the directions of the DRP and allow the claim of the additional depreciation as directed by the DRP.
Appeal filed by the assessee is partly allowed.
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2024 (2) TMI 1517
Unexplained cash credit - unexplained income - HELD THAT:- Assessee has failed to offer any explanation for the cash deposited in the bank account of the assessee in the month of February and March 2015.
Tribunal after considering the submissions has also given relief of Rs. 2,80,000/- and made addition of Rs. 22,00,000/- out of Rs. 24,80,000/- by the Assessing Officer confirmed by the CIT(Appeal).
It appears from the explanation placed on record along with the memo of appeal by way of paper book, in the submissions made before the CIT(A) the assessee tried to explain the cash deposit in the bank account, however such explanation is not accepted either by the CIT(Appeal) as well as the Tribunal. Decided against assessee.
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2024 (2) TMI 1516
Seeking the decree for specific performance of the agreement to sell and in the alternative, for refund of the advance sale consideration / earnest money - Whether a decree for specific performance of land to be transferred from tribal to non-tribal can be granted subject to obtaining permission u/s 36A of Maharashtra Land Revenue Code? - HELD THAT:- The High Court has focused itself only on the aspect regarding Section 36A of the Land Revenue Code to deny relief to the appellant-plaintiff. The trial Court, the First Appellate Court as well as the High Court have concurrently held that there was indeed an agreement to sell between the parties and the plaintiff had paid a sum of Rs.2,20,000/- out of a total consideration of Rs.2,25,000/- to the defendant-respondent herein, who had also handed over possession of the subject land to the plaintiff.
On a reading of the Section 36A, what is evident is that there is only a restriction on the transfer to be made by a tribal in favour of the non-tribal by way of sale, gift, exchange, mortgage, lease or otherwise. Such a restriction is in the context of requiring the non-tribal to make an application for a previous sanction before such a conveyance could be made by a tribal (defendant/ respondent herein) in favour of non-tribal (plaintiff/appellant herein) before the State Government so as to seek previous approval of the State Government only after a previous approval of the State Government could such a sale take place. The conveyance by way of sale would take place only at the time of registration of a sale deed in accordance with Section 17 of the Registration Act, 2008. Till then, there is no conveyance. Therefore, there is no bar for a tribal to enter into an agreement to sell and seeking advance sale consideration.
In view of the defendant not performing his part of the agreement to sell, the plaintiff was constrained to file suit for specific performance. When all the courts have held that the plaintiff has performed his part of the agreement inasmuch as he had tendered a sum of Rs.2,20,000/- out of a total consideration of Rs.2,25,000/- and he was ready and willing to perform the rest of the obligation under the contract, it was only in the context of non-performance by the defendant that the plaintiff was constrained to file the suit for specific performance. Therefore, on the basis of Section 36A, the trial Court, the first appellate court as well as the High Court could not have declined to grant the decree for specific performance to the plaintiff inasmuch as the considerations under the provisions of the Specific Relief Act, 1963 only had to be made for the purpose of adjudicating the suit between the parties.
Conclusion - The suit filed by the plaintiff decreed, granting specific performance of the agreement to sell, subject to the plaintiff obtaining the necessary sanction under Section 36A of the Maharashtra Land Revenue Code.
Appeal allowed.
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2024 (2) TMI 1515
CENVAT Credit - inputs as per Rule 2(k) of the Cenvat Credit Rules, 2004 - channels, angles, joists, plates, coils, and welding electrodes - HELD THAT:- The items have been used in the conveyor system, iron ore silo, furnace gratings, induration furnace, furnace duct, product storage hopper etc. There is no dispute that these are all essential capital goods which are required for carrying out the manufacturing process. From paragraph 15 of the Order-in-Original, it is found that the appellant has provided a certificate from the Chartered Engineer as to how the inputs have been utilized in fabrication of the capital goods or for making the structures for capital goods. Therefore, the usage of the goods in question is not in dispute. During the period under consideration several proceedings were initiated throughout India based on the basis of Larger Bench decision in the case of Vandana Global [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)]. When these proceedings reached the Tribunal or High Court stage, all such demands were set aside and the appeals filed by the appellants have been allowed.
Conclusion - The inputs used for supporting plant and machinery should be considered integral parts of the capital goods, making the appellant eligible for CENVAT Credit.
Credit allowed - appeal allowed.
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2024 (2) TMI 1514
Seeking to restrain the defendant from proceeding with the proposed Resolution until the disposal of the main suit - Re-appointment of the plaintiff as Executive Chairperson/Managing Director at its 40th Annual General Meeting [AGM] - Order XXXIX Rule 1 and 2 of the CPC - HELD THAT:- It is evident that an applicant seeking an injunction must establish all three essential ingredients, i.e., prima facie case, balance of convenience, and irreparable injury. These ingredients must be satisfied concurrently, and the inability of the applicant to establish even one would render the applicant ineligible for obtaining the injunctive relief.
The cardinal principles for the grant of temporary injunction were further considered in DALPAT KUMAR VERSUS PRAHLAD SINGH [1991 (12) TMI 282 - SUPREME COURT], wherein the Supreme Court observed 'If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit, the subject matter should be maintained in status quo, an injunction would be issued. Thus the Court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit.' - The Court further held in Dalpat Kumar, that the phrases “prima facie case”, “balance of convenience” and “irreparable loss” are not rhetoric phrases for incantation, but words of width and elasticity, to meet myriad situations presented by ingenuity in the given facts and circumstances of each case. These principles are to be applied with judicial discretion, such that, the relief granted aligns with the ends of justice.
Where monetary compensation can provide full restitution, an injunction preventing termination is unwarranted. Therefore, as the Court should be hesitant in interfering with corporate governance decisions, particularly where alternative remedies in the form of monetary compensation remain available, applying this principle to the facts of the instant case, even if the plaintiff succeeds in the suit, the relief at best available to her would be in the form of financial compensation.
Whether the ingredient of a prima facie case operates in favor of the plaintiff? - HELD THAT:- It is pertinent to note that while the plaintiff was appointed on 24.02.2023 for a fixed tenure of five years, a careful perusal of the minutes of the Board Meeting dated 10.08.2022 and the Annual General Meeting dated 23.09.2022 reveals that both explicitly stipulated the retirement of the plaintiff by rotation. This clearly indicates that the understanding of the plaintiff that she is liable to retire is not something that was introduced for the first time in 2025, but was well embedded in the earlier Resolutions passed in the aforementioned board and general meetings.
In the instant case, it is a clear case of the plaintiff having knowledge of being subjected to retirement by rotation and thus, if the plaintiff is not found to be vigilant and diligent having regard to the circumstances, the relief sought ought to be refused. In light of these considerations, it is evident that the plaintiff has failed to establish a prima facie case for injunction in her favour.
With respect to the balance of convenience, it is a well-settled principle that every shareholder of a company has the right, subject to statutory procedures and requisite numerical thresholds, to participate in the affairs of the company. This participation is essential to uphold the principles of corporate democracy and to maintain transparency in corporate governance. The shareholders must be allowed to regulate and determine the affairs of the company through General Meetings, which serve as the primary forum for decision-making within a corporate entity. Given this framework, the jurisdiction of the Court in such matters is limited, and judicial interference in the internal management of a company should be exercised with caution. Courts have consistently maintained that unless there is a clear violation of statutory provisions or principles of natural justice, they should refrain from intervening in the internal governance of a company.
The similar position was upheld in LIFE INSURANCE CORPN. OF INDIA VERSUS ESCORTS LTD. [1985 (12) TMI 289 - SUPREME COURT], wherein it was observed that in a company, every shareholder possesses the right to call for a general meeting for the purpose of passing a Resolution, and such an exercise of corporate democracy cannot be restrained by way of an injunction.
In the present case, upon a careful examination of the facts and arguments advanced, assessed on the anvil of the established legal principles governing injunctions, the Court is of the considered view that the plaintiff has failed to demonstrate that the essential conditions for granting an injunction stand satisfied in her favor. The plaintiff has neither demonstrated a prima facie case, nor has shown that the balance of convenience tilts in favour. Furthermore, the alleged injury, if any, is quantifiable in monetary terms, thereby negating any irreparable harm. In the absence of these fundamental elements, the grant of an injunction would be unwarranted.
Conclusion - i) The plaintiff's appointment was subject to retirement by rotation, as evidenced by her past conduct and the resolutions passed in previous meetings. ii) The proposed resolution for the plaintiff's re-appointment was found to be legally tenable and in accordance with the company's established procedures.
The application stands dismissed.
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2024 (2) TMI 1513
Reopening of assessment u/s 147 - reopening beyond period of four years - bogus long-term capital gains booked by various persons by way of transaction/sale of shares of penny stock - HELD THAT:- Original assessment in this case was completed u/s 143(3) of the Act and the assessment was reopened after four years from the end of the relevant year which is hit by First Proviso to section 147 of the Act and that there was no allegation in the notice that any income chargeable to tax has escaped assessment because of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the assessment year under consideration.
In this case, the assessee duly disclosed capital loss incurred by the assessee in trading in shares of M/s SV Electric and nothing has been pointed out by the Assessing Officer that the income of the assessee has escaped assessment due to failure on the part of the assessee in disclosing fully and truly all material facts necessary for assessment.
As decided in South Yarra Holdings [2019 (3) TMI 582 - BOMBAY HIGH COURT] the reopening of the assessment was hit by First Proviso to section 147 of the Act. Since the Assessing Officer has not applied his mind to the information received in the context of the facts on record, therefore, the notice issued u/s 148 of the Act was also bad in law.
Thus, we quash the reopening of the assessment and thereby the additions made in the course of such assessment are ordered to be deleted. Decided in favour of assessee.
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