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2022 (7) TMI 1572
Reopening of assessment u/s 147 as barred by limitation - HELD THAT:- As per section 153(2) of the Act as was then available on the statute, the assessment u/ss. 147/143(3) could have been framed by the A.O. latest by 31.12.2008, i.e., upto 9 months from the end of financial year in which notice u/s. 148 of the Act was served.
In the present case the assessment had been framed by the A.O order passed u/s.143(3)/147, dated 24.11.2009, therefore, the same as claimed by the assessee, and rightly so, is much beyond the time limitation prescribed in sub-section (2) of Section 153 of the Act. We, thus, in terms of our aforesaid observations, quash the assessment framed by the A.O vide his order passed u/s.143(3)/147 dated 24.11.2009 as having been passed beyond the prescribed time limit. Decided in favour of assessee.
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2022 (7) TMI 1571
Seeking to quash the proceedings on the file of the learned Judicial Magistrate, Dharapuram, thereby taken cognizance for the offences punishable under Sections 294(b), 323 & 506(2) of IPC as against the petitioners.
Offence under Section 294(b) of IPC - HELD THAT:- Admittedly, there is absolutely no words uttered by the petitioners as such to constitute the offence under Section 294(b) of IPC, there is no averments and allegations. Further the charges do not show that on hearing the obscene words, which were allegedly uttered by the petitioners, the witnesses felt annoyed. No one has spoken about the obscene words, they felt annoyed and in the absence of legal evidence to show that the words uttered by the petitioners annoyed others, it can not be said that the ingredients of the offence under Section 294(b) of IPC is made out.
Offence under Section 506(ii) of I.P.C - HELD THAT:- Threat should be a real one and not just a mere words when the person uttering does not exactly mean what he says and also when the person to whom threat is launched does not feel threatened actually. Whereas, in the case on hand, there is no averment to attract the offence under Section 506(ii) of I.P.C.
Offence under Section 323 of IPC - HELD THAT:- The first petitioner is a handicapped person up to the level of 80% and in fact he appeared before this Court through video conference and he could not even stand or walk. Therefore, there is absolutely no possibility for the first petitioner to attack the second respondent by his leg, since the first petitioner has severely affected with muscular dystrophy. Therefore, the present proceedings is nothing but clear abuse of process of law and initiated only to wreck vengeance against the petitioners.
Conclusion - The charges under Sections 294(b), 323, and 506(2) were not substantiated by evidence and were inherently improbable. The entire proceedings is clear abuse of process of law and it cannot be sustained as against the petitioners.
The Criminal Original Petition stands allowed.
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2022 (7) TMI 1570
Belated return of income accepted by condoning the delay - Condonation of delay in filing return - reasonable cause of delay - genuine hardship - HELD THAT:- Having considered the facts and circumstances due to which the respondent-assessee, at the relevant time, could not file the return of income within the time prescribed, the order passed by the High Court directing the Revenue to condone the delay and accept the belated return of income and to consider the return of income in accordance with law on merits does not warrant any interference. The facts which led to the assessee in late filing of the return of income are glaring.
Therefore, no interference of this Court is called for, in exercise of powers under Article 136 of the Constitution of India. However, at the same time, the question of law, “whether the CBDT, while exercising the powers under Section 119(2)(b) of the Income Tax Act, can direct to condone the delay in filing the return of income” is kept open to be considered in an appropriate case. It is further observed that the impugned judgment and order passed by the High Court be not treated as a precedent. SLP dismissed.
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2022 (7) TMI 1569
Nature of receipts - Securities held under 'held to maturity' have the material characteristics of capital asset rather than stock in trade and the form part of investments only - HELD THAT:- Question No.1 is covered against the Revenue in Commissioner of Income-tax, Hubli Vs. Karnataka Vikas Grameen Bank [2015 (12) TMI 1420 - KARNATAKA HIGH COURT]
Writing off entire expense as revenue - Whether expenditure towards software item is capital in nature having enduring benefit eligible for depreciation at 60%? - HELD THAT:- In [2013 (10) TMI 1225 - KARNATAKA HIGH COURT], this Court has recorded detailed reasons and held that software is an aid in manufacturing process rather than a tool itself. Though certain application has enduring benefit, it does not result into acquisition of capital asset. It merely enhances the productivity or the efficiency and therefore, it has to be treated as a Revenue expenditure. In Oriental Bank of Commerce [2018 (4) TMI 1534 - DELHI HIGH COURT] for the use of such software, the nature of expenditure otherwise incurred for streamlining its functions i.e. towards fee payable to the consultants for systems and employment of special professionals to carry on the tasks that the software in fact performs, would have fallen undoubtedly in the revenue stream. Taking these into account and the further circumstance that the software itself would have run its course or life span as it were, given that the earlier assessment year in question is 2008-09, we are of the opinion that the question of law framed is to be answered in favour of the assessee
Provision for expenses of branch offices' - AO disallowed the same on the ground that the liability is purely contingent and not an ascertained one - HELD THAT:- We have perused the said Circular. It is stated therein that in the Direct Tax Laws (Amendment) Act, 1987, the provisions of Section 36(1)(vii) of the IT act and Section 36(2) of IT Act, 1961, has been amended to rationalize the provisions regarding allowability of bad debt with effect from April 1, 1989. It is further stated that the Legislative intention behind the amendment was to eliminate the litigation on the issue of allowability of 'bad debt' by doing away with the requirement for assessee to establish that the debt had in fact, become irrecoverable. He placed reliance on Big Bags International Pvt. Ltd. [2020 (12) TMI 830 - KARNATAKA HIGH COURT] in support of this contention. In view of the said Circular and the said authority wherein, this Court has held that the Act mandates that in order to claim bad debts, the assessee has to write-off the same in his Books of accounts and he is not required to prove that the debt was irrecoverable, we answer this question in favour of the assessee and against the Revenue.
Writing off of non-banking assets - Whether losses which are contingent in nature cannot be allowed to be written off and charges against the profits of the company? - HELD THAT:- We hold that the ITAT's conclusion that the asset shall be treated as 'Stock in Trade' does not call for any interference and accordingly, this question is answered in favour of the assessee and against the Revenue
Broken period interest - Whether assessee cannot follow receipt basis of accounting for some items of income and follow accrual basis of accounting for other items of income? - HELD THAT:- This question is covered against the Revenue in Commissioner of Income-tax Vs. The Karnataka Bank Ltd [2014 (11) TMI 221 - KARNATAKA HIGH COURT] and the same is not disputed
Expenditure claimed to be incurred in connection with sale of shares - Whether assessee has failed to substantiate that the expenditure on sale of shares is a wholly and exclusively incurred for the purpose of transfer of shares? - HELD THAT:- ITAT has recorded that the terms of Compromise indicated that the payment of Rs.2.66 Crores was in connection with the transfer of Capital asset. We have also perused the portion of the compromise terms extracted in the ITAT's order. It is stated therein that parties had amicably agreed upon certain terms and the assessee had paid the said amount. The DHFL has waived all indemnities, liabilities and claims. It is settled that the Revenue shall not sit in the arm chair of an assessee and decide the exigencies of business/transactions. ITAT is the last fact finding authority and based on the facts, it has held that the expenditure had nexus with the agreement between the parties. In substance, assessee has paid money to DHFL to give quietus to the dispute between the parties. As per Section 48 of the Act, the expenditure incurred in connection with the transfer is permissible. In view of the facts recorded hereinabove, in our considered opinion, payment has nexus with the transfer of shares as per the terms of Compromise. Accordingly, this question is answered in favour of the assessee and against the Revenue.
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2022 (7) TMI 1568
Issuance of summons under Section 160 of Cr.P.C. without registering the FIR under Section 154 Cr.P.C. - HELD THAT:- The impugned notice when carefully seen, there is no reference under 160 Cr.P.C. and just a notice has been issued calling upon the petitioner to come with documents for enquiry. The police has not referred the provision of Section 160 Cr.P.C.in that notice.
For issuance of summons the same can be issued for attendance of witness who resides within the limit of the police station jurisdiction or any adjoining station. Further on a perusal of the Section makes it very clear that the issuance of the summons under Section 160 Cr.P.C. applies only to the cases of persons who appears to be acquainted with the facts and circumstances of the case, who are only witness or possible witnesses. Once the FIR has been registered as against the accused, summons cannot be issued against the accused under Section 160 Cr.P.C.for requiring his attendance for an accused person with a view to answering the charge made against him.
The complaint given before the Police is relating to the dispute arising out of employment. Therefore, any cognizable offence is made out or not, it is the duty of the police to make an enquiry to ascertain any congnizable offence is made out. In such a view of the matter, it cannot be said that police has no power to call for any enquiry of any person.
The distinction between Section 160 and 41-A Cr.P.C.is that summons under Section 160 Cr.P.C.could be issued only to the witnesses within the jurisdiction of the police station or adjoining police station. Summons cannot be extended to beyond the jurisdiction. Whereas Section 41-A Cr.P.C.does not restrict the police to issue a notice to any person. The restriction of the jurisdiction also taken away. Therefore, the police can very well issue notice under Section 41-A Cr.P.C. when there is reasonable complaint made or any suspicion exists that he has committed any cognizable offence. In such a view of the matter the police is always have a power to issue notice under Section 41-A Cr.P.C. to ascertain as to whether any cognizable offence is made out or not.
Conclusion - i) The distinction between Section 160 and 41-A Cr.P.C. is that summons under Section 160 Cr.P.C. could be issued only to the witnesses within the jurisdiction of the police station or adjoining police station. Summons cannot be extended to beyond the jurisdiction. ii) The notices for preliminary inquiries can be issued under Section 41-A Cr.P.C. without jurisdictional limitations, while Section 160 Cr.P.C. is limited to witnesses within jurisdiction.
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2022 (7) TMI 1565
Attachment order - transfer of ownership of the property purchased by the petitioner in execution proceedings - 1st respondent Panchayat has refused the transfer of ownership in respect of certain buildings in the records of the Panchayat on account of the fact that there is an attachment over the property - HELD THAT:- There is merit in the contention taken by the learned counsel for the petitioner that the petitioner is entitled to the benefit of the first proviso to Section 281 of the Act.
5 cents of property (out of the total extent of 51 cents) together with a building was brought to sale and the petitioner himself purchased the said property in the execution proceedings with the permission of the court. Sale certificate has been issued, appeals filed against the execution proceedings have been dismissed and the property along with the building has been delivered to the petitioner.
Mutation has been effected and the only remaining formality was change in the ownership details in the records maintained by the Panchayat. In the facts of the present case, it is evident that the first proviso to Section 281(1) clearly applies as the sale was obviously without notice of the proceedings initiated by the Income Tax department. The award of the Lok Adalat itself was about two years prior to the date on which the property had been attached by the Income Tax department.
It cannot be said that the proceedings were with notice or with the knowledge of the proceedings initiated by the Income Tax department. Therefore, in respect of the five cents of property purchased by the petitioner in execution proceedings, the provisions of sub-section (1) of Section 281 of the Act do not apply and the transfer cannot be treated as void.
Writ petition is allowed. The 1st respondent is directed to change the ownership details in the records maintained by the Panchayat, as applied for by the petitioner, without having any regard to the proceedings initiated by the 5th respondent.
It is made clear that this will apply only to the five cents of property which has been sold in execution proceedings to the petitioner and will have no bearing on the rest of the properties of the 4th respondent, against which it is open to the 5th respondent to proceed for recovery of amounts due to the department.
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2022 (7) TMI 1564
Disallowance u/s 36(1)(va) - late deposit of Employees’ share of EPF and ESI - HELD THAT:- We find that similar issue came up for consideration before co-ordinate Bench of Pune Tribunal in [2022 (6) TMI 1520 - ITAT PUNE] wherein an admitted position that the assessee did deduct employees’ share of EPF and ESI and paid the same after the due date under the respective legislations but before the time stipulated for filing return u/s 139(1) of the Act. In our opinion, this issue is no more res integra in view of several judgments allowing deduction u/s 36(1)(va) of employees’ share of contribution deposited after due date under the respective Acts but before the date prescribed u/s 139.
As Nipso Polyfabriks Ltd. [2012 (11) TMI 592 - HIMACHAL PRADESH HIGH COURT] has held that there exists no difference between employees or employer’s contribution and both are to be allowed as deduction if deposited before the due date. Decided in favour of assessee.
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2022 (7) TMI 1563
Addition u/s 68 - denial of long term capital gain claimed exempt by appellant u/s. 10(38) - HELD THAT:- Admittedly, transactions are substantiated with the documentary evidences by the assessee that these were done through proper banking channel, shares purchased were credited in the Demat account of the assessee, shares sold through an authorised broker details of which are shared with the AO by the assessee. Payment of sale of shares was received by the assessee in its bank account and STT was duly charged.
AO and the CIT(A) are guided by the report of the investigation wing but no part of the report of the investigation wing could be brought out which observe something against the assessee under reference. A vicious circle showing the assessee’s collusion with the persons investigated such as stockbrokers, entry operators or any other persons, could not be extracted by the AO and thus no wrong involvement of the assessee in such sham transactions could be established by the department.
The contentions of department are not acceptable, which are based on general practices of the entry operators, their modus operandi, report of the investigation wing without having any specific observation on the transactions by the assessee. Such observation of the revenue authorities are based on presumptions having no specific evidence against the assesee, thus is not sustainable and deserves to be set aside. Accordingly, we set aside the orders of authorities below and direct the AO to delete the addition. Thus, we allow the appeal of the assessee.
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2022 (7) TMI 1562
Addition u/s 69 - unexplained investment - HELD THAT:- Prima facie, it appears that the petitioner has not transferred the aforesaid balance amount of Rs. 2,40,00,000/- to the buyer through normal banking channel. The petitioner appears to have furnished the details of the seller pursuant to communication dated 28.03.2022. The petitioner had also uploaded copy of the sale deed dated 14.08.2014, copy of the plaint filed before the District Munsif Court, Chengalpattu against various persons. The respondent has however passed the impugned order without considering the same.
Thus, the impugned order is set aside. The respondent is directed to pass a fresh order within a period of six months from the date of receipt of copy of this order.
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2022 (7) TMI 1561
Dismissal of appeal as barred by limitation - delay of 789 days on the part of the assessee in filing this appeal before the Tribunal - Dismissal of appeal by CIT(A) as barred by limitation - unexplained cash deposits in bank account - HELD THAT:- As already noted, there was non-compliance on the part of the assessee to the notices issued by the Assessing Officer during the course of assessment proceedings as well as to the notices issued by the learned CIT(A) during the course of appellate proceedings resulting into passing of exparte orders by them. Moreover, there was a delay on the part of the assessee in filing his appeal before the learned CIT(A) and as specifically noted by CIT(A) in his impugned order, no request whatsoever was made by the assessee for condonation of the said delay.
Even before the Tribunal the assessee has not made any efforts to explain the delay on his part in filing the appeal before the CIT(A) which has resulted in dismissal of the said appeal by the CIT(A) by treating the same as barred by limitation.
no efforts whatsoever have been made by the assessee to explain the cash deposits of Rs.24,79,430/- found to be made in his bank account with ICICI Bank Limited, Mumbai either before the authorities below or even before the Tribunal inspite of proper and sufficient opportunity given to him.
It is not doubt true that the appellate authorities are vested with discretion to condone the delay in filing the appeal taking into consideration the reasons advanced by the appellant for such delay if the same constitute a sufficient cause. In the present case, the assessee has not only failed to establish such sufficient cause on evidence for the delay on his part in filing the appeal belatedly before the learned CIT(A) as well as before the Tribunal, but even his approach and attitude during the course of assessment proceedings as well as during the course of appellate proceedings before the learned CIT(A) as well as Tribunal have been found to be negligent, casual and non-compliant - Decided against assessee.
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2022 (7) TMI 1560
Rejection of Application by Micro and Small Enterprises Facilitation Council on the ground that the Petitioner is a Medium Enterprise and cannot invoke the Jurisdiction of the Council under section 18 of Micro, Small and Medium Enterprises Development Act, 2006 - Interpretation of the definition of "supplier" - HELD THAT:- Section 2(n)(iii), 17 and 18 of the Act, 2006 will have to be read harmoniously. The provisions in a statute cannot be read in a manner to render a particular provision otiose or superfluous. If it is held that a supplier engaged in selling goods produced by micro or small enterprise and rendering services which are provided by such enterprise cannot invoke the forum provided under section 18 of the Act, 2006, then, it would be doing violence to section 2(n) read with section 17 and 18(1) of the Act, 2006. Reading the provision of section 2(n)(iii), section 17 and 18(1) harmoniously the only irresistible conclusion that can be drawn is that the enterprise other than the Micro and Small Enterprise may also be entitled to take recourse to section 18 of the Act, 2006. Provided, it is a supplier of the goods produced by the micro or small enterprise and rendering service which are provided by such enterprises.
The fundamental rule of construction of the provisions is to read the provision literally, i.e., by giving to the words their ordinary and natural meaning. Every provision of the statute has to be construed with reference to the context and other clauses of the Act. The definition of the “supplier” is precise and unambiguous. The words in the definition of the “supplier” will have to be expounded in the natural and ordinary sense - Under the impugned order, the Council has failed to take into consideration the definition of the term “supplier” as defined under the Act, 2006 and thereby has misdirected itself in holding that a medium enterprise cannot invoke its jurisdiction. The Respondent no.1 was required to consider the definition of “supplier” as enumerated in section 2(n)(iii) of the Act, 2006.
Thus, it was necessary for the Council to first come to the conclusion whether the Petitioner is a supplier of goods produced by micro or small enterprises and rendering services which are provided by such enterprises. It is only thereafter Council could have arrived at a conclusion of jurisdiction under section 18.
The impugned order is quashed and set aside. Council shall consider the factual matrix of the case and if it comes to the conclusion that the Petitioner is a supplier of the goods produced by the micro or small enterprises and rendering services which are provided by such micro and small enterprise then consider the claim of the Petitioner on its own merits - petition disposed off.
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2022 (7) TMI 1559
Addition u/s 69A r.w.s. 115BBE - demonetized currency deposits - appellant did not bring any material on record to establish that the amount was out of his business receipts - HELD THAT:- We find that as per extant provisions, the assessee was permitted to accept demonetized currency till 24.11.2016 and the only reason to suspect the source of the same is the fact that the same was deposited on 29.11.2016.
The adjudication of lower authorities overlooks the fact that the assessee deposited as much as Rs.49.12 Lacs out of which only an amount of Rs.0.46 Lacs is suspected to be unexplained income of the assessee. It could also be seen that the demonetized currency could be deposited till 31.12.2016. Therefore, we do not concur with the stand of CIT(A). By deleting the impugned addition, we allow the grounds raised by the assessee.
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2022 (7) TMI 1558
Income deemed to accrue or arise in India - Royalty receipt - Payment received on account of Information & Communication Technology (ICT) service charges to be taxed as “Fees for Technical Services” under Article 12 of the India-Netherlands DTAA - HELD THAT:- During the hearing of the stay petition, it was accepted and it was consented by both the parties that the issues involved in the present appeal are squarely covered by the order of the Tribunal in Assessee’s own case for Assessment Year 2017-18 [2022 (2) TMI 1292 - ITAT DELHI] allowing the appeal of the Assessee. Since, the matter is squarely covered by the ratio laid down in the order of the Tribunal in assessee’s own case, the same ratio is being followed for the years before us.
Appeals of the Assessee are allowed.
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2022 (7) TMI 1557
Refusal to grant approval u/s 12AA - order passed by CIT (Exemptions) dismissing the application of the assessee/applicant, without giving an opportunity of being heard - denial of principle of natural justice - assessee submitted that the Trust is carrying out activities within the scope permitted under the Income Tax Act, and if given an opportunity of hearing, the assessee/applicant is willing to file all necessary details/documents as may be required for registration of Trust.
HELD THAT:- We note that the CIT (Exemptions) passed the order ex-parte and the assessee/applicant did not have opportunity to present his case in detail. We note is that only two notices of hearing were issued to the assessee/applicant out of which only one remained un-compiled with. In the interest of justice, we are therefore, hereby setting aside the matter to the file of CIT (Exemptions) for fresh consideration - Appeal of the assessee/applicant is being allowed for statistical purposes.
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2022 (7) TMI 1556
Rejection of transaction value and its re-determination - Valuation, confiscation of goods, consequential demand of duty, redemption fine and penalty imposed - import of betel nuts made by the Appellant - acceptability of the report of the First Secretary (Commerce), High Commission of India, Singapore for rejecting the transaction value - Appellant imported 05 consignments of betel nuts from Thailand and 17 consignments of betel nuts from Indonesia.
Adjudicating Authority, while accepting the transaction value of goods imported from Thailand, finds that products from different countries are not comparable and held that betel nuts of Indonesia and Sri Lankan origin are different in nature, quality and price - HELD THAT:- We find that the aforesaid reasoning for rejection of transaction value would not meet the mandate of section 14 of the Customs Act and Rules as elucidated in M/s Sanjivani Non-Ferrous Trading Pvt Ltd [2018 (12) TMI 738 - SUPREME COURT]. In view of the above judgments, it is clear that the rejection and re-determination of transaction value are not based on any contemporaneous imports and therefore the findings of the Adjudicating Authority are illegal and incorrect.
In absence of quality test report, it is not possible to compare the price of the goods involved in the case of M/s Integral Traders and M/s Rajeswari Match Works. Moreover, in the impugned order it is stated that those cases are under investigation. Revenue has not submitted any evidence before us to prove the outcome of investigation. In such circumstances, comparison of goods imported by M/s Integral Traders and M/s Rajeswari Match Works cannot be justified.
In the absence of any quality assessment of the goods, evidences of contemporaneous imports on higher transaction value of identical/similar goods at or about the same time and in the absence of any evidence leading to the payment of any amount directly or indirectly, over and above the invoice value presented before customs, the rejection of transaction value and its re-determination is not in agreement with the procedure established by law.
The Order-in-Original is flawed and contrary to law, for it doesn’t give any cogent reason for rejecting transaction value in terms of section 14(1) of the Customs Act, 1962 and Rule 12 of the Customs Valuation Rules, 2007. The impugned order is not in accordance with Section 14 and Rule 3 and 12 as the mandates of these provisions are ignored.
Competency of the Commissioner of Customs, who was formerly First Secretary (Commerce), High Commission of India, Singapore, to adjudicate the impugned case, when his report was relied upon among various documents for adjudication - From records, it is clear that the Appellants have not challenged the said decision of the Board before any forum and therefore the said issue is no more res integra. We therefore reject the argument of the Appellant with regard to the competency of the Adjudicating Authority to adjudicate this case.
Rejection of request for cross examination of the First Secretary (Commerce) in the High Commission of India, Singapore - As submitted by the Learned A.R, show cause notice in this case was issued on 09.02.2010 and Order was passed on 17.5.2010. Even when the First Secretary (Commerce) in the High Commission of India, Singapore, took charge as Commissioner of Customs, Cochin on August 2012, no such requests were made. Later, in September 2012 the Appellants demanded opportunity to cross examine the First Secretary (Commerce) in the High Commission of India, Singapore. We are of the view that the request of the Appellant for cross examination, after one round of adjudication is not justified with any supporting evidences and therefore the same is liable to be rejected.
Even though Tribunal has remanded the case for de-novo consideration, Adjudicating Authority has not considered the contentions of the Appellant afresh and has borrowed findings from the first adjudication order - We have perused the impugned order in detail and found that the Adjudicating Authority has observed that certain contentions of the Appellant have been already considered by the Original Authority, while passing orders. We are unable to agree with the said findings of the Adjudicating Authority when there is an open remand for de-novo consideration is on records. Therefore, we hold that the impugned order, passed by the Adjudicating Authority, is not a well-considered order. Since this matter is under lis for the past more than 10 years and since this matter is in its third round before this Tribunal, we are not inclined to remand this case again.
Commissioner of Customs, Cochin, has ordered confiscation of goods under section 111(m) of the Customs Act, 1962 with an offer to redeem the goods on payment of redemption fine besides imposing penalty under section 112(a) of the Customs Act, 1962. We have already found that Revenue has failed in establishing undervaluation on the part of the Appellant and no evidences are brought before us to establish remittance, in excess to the invoice value submitted before the Customs. Therefore, we are of the view that, order of confiscation of goods under section 111(m) is not sustainable and consequentially redemption also fails. Penalty under section 112(a) of the Customs Act being a confiscation related penalty, the same is also held to be unsustainable. Since there is no violation of EXIM Policy, nothing survives more.
Demand of differential duty, interest, redemption fine and penalty cannot be sustained. Resultantly the impugned order is set aside. The appeals are allowed.
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2022 (7) TMI 1555
Seeking grant of bail - smuggling of of 0.585 kg. of Charas/Hashish - commercial quantity or not - admissibility of statement recorded under Section 67 of the NDPS Act - reasonable grounds under Section 37 of the NDPS Act for grant of bail - HELD THAT:- Section 37 of the NDPS Act, which contain a provision for a person accused of the offence punishable under the Act, being released on bail, contemplates satisfaction of two conditions, being the Public Prosecutor has been given an opportunity to oppose the application for such release and where the Public Prosecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence, while on bail.
The Hon’ble Apex Court has clarified the expression “reasonable grounds” in the case of Union of India through Narcotics Control Bureau, Lucknow Vs.Md.Nawaj Khan [2021 (9) TMI 1054 - SUPREME COURT] holding that 'The expression used in Section 37(1)(b)(ii) is “reasonable grounds”. The expression means something more than prima facie grounds. It connotes substantial probable causes for believing that the accused is not guilty of the offence charged and this reasonable belief contemplated in turn points to existence of such facts and circumstances as are sufficient in themselves to justify recording of satisfaction that the accused is not guilty of the offence charged.'
“Reasonable grounds” in terms of Section 37(1) would mean credible, plausible and the grounds for the course to believe that the accused person is not guilty of the alleged offence. Looking to the material compiled in the charge-sheet, it cannot be believed that the applicant has not committed the offence, though finding of his guilt not recorded. Restricting myself to the limited purpose of considering the application for bail, the material in the charge-sheet is focussed and considering the alleged connection between the applicant and the co-accused, the evidence cannot be weighed to reach a conclusion that he has not committed any offence. Mere absence of recovery of the contraband from the applicant is no ground to confer his liberty upon him. The applicant appears to be a part of a larger chain and he was knowing the dealers and he is one of the person in the whole chain, who was facilitating the supply of drug either procuring from the dealers directly or he was an intermediary link between the supplier and the purchaser.
The length of custody/long incarceration is no ground for releasing the applicant on bail, whose involvement is prima facie, apparent from the material compiled in the charge-sheet and there is no material to show that he will not indulge in similar activity on being released on bail.
The application is rejected.
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2022 (7) TMI 1554
Undisclosed income u/s 69B - difference of stock between the stock submitted to the bank as on 28/3/2005 and the stock indicated in the audit report for the period ending 31/03/2005 relating to raw material, stock-in-process and finished goods - as decided by HC [2022 (2) TMI 1040 - MADHYA PRADESH HIGH COURT] once the AO finds that there was excess stock, in absence of explanation by the assessee, the conclusion is inescapable that the excess stock, if any, was from undisclosed sources. Once the assessee's explanation, if any, has not been accepted, the resultant position is that there was excess stock un-disclosed in the books of accounts and non disclosure was only with a view to suppress the income, thus decided against assessee
HELD THAT:- As petitioner seeks and is permitted to withdraw the special leave petition, as he wishes to file a review petition before the High Court. Ordered accordingly.
Special leave petition stands dismissed as withdrawn.
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2022 (7) TMI 1553
Assessment u/s 153A - addition of bogus LTCG - incriminating material found during the course of search u/s 132(1) found or not? - CIT(A) deleted addition - HELD HAT:- This appeal of the assessee is, being disposed of ex-parte qua the assessee after hearing the arguments of learned DR and perusing the relevant material available on record.
As observed that a search u/s 132 in this case was conducted on 12.02.2015 and there was no assessment proceedings pending for the year under consideration on that date. There was thus no abatement of the assessment originally completed in the case of the assessee for the year under consideration and it was a case of unabated assessment which was completed by the AO after the search for the year under consideration.
As per the settled position of law, the scope of such unabated assessment made u/s 153A of the Act was confined only to the additions which are based on the incriminating material found during the course of search and since there was no such incriminating material found during the course of search on the basis of which the said addition was made as held by the CIT (A) in his impugned order and not disputed by the DR, we find ourselves in agreement with CIT (A) that the impugned addition made by the AO on account of alleged bogus Long Term Capital Gain was not sustainable in the absence of any incriminating material found during the course of search to support and substantiate the same. We, therefore, find no infirmity in the order of the CIT (A) deleting the addition - Appeal of the Revenue is dismissed.
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2022 (7) TMI 1552
Assessment u/s 153A - Validity of additions made in the absence of incriminating material in concluded assessment proceedings - HELD THAT:- The decisions of the Hon’ble Jurisdictional High Court are squarely applicable to the facts and circumstances of the case as no assessment was pending on the date of search and the addition has been made merely on the basis of the book entries already disclosed to the department. Reliance is also placed on the decision of the Hon’ble Jurisdictional High Court in the case of PCIT Vs. Subhash Khattar [2017 (7) TMI 1091 - DELHI HIGH COURT]
Hence, keeping in view, the entire factum of the case, we hold that the addition made vide the assessment u/s 153A in the absence of any incriminating material is not sustainable - Decided against revenue.
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2022 (7) TMI 1551
Penalty imposed u/s. 271D and 271E - default u/s 269SS and Section 269ST - Whether ITAT was correct in finding that action u/s 68 was a prerequisite to levying penalty for contravention u/s. 269SS and 269ST? - ITAT deleted addition - HELD THAT:- There is no intention/mens rea on the part of the assessee-Co-operative society to accept the cash deposit from its members in their accounts maintained by it similar to savings account maintained by the banks in view of the provision of section 273B.
No penalty would be leviable if the person concerned proves that there is reasonable cause for the alleged failure. Thus, the Tribunal as well as the CIT (A) have rightly held that the provision of section 273B gives the discretion to the authority to impose the penalty or not which has to be exercised in a just and fair manner having regard to the facts and material existing on record.
When the CIT (Appeals) and the Tribunal on the basis of the facts and material on record have come to the conclusion that the assessee-Co-operative Society on bona fide belief coupled with the nature of transaction in question being genuine and bona fide undertaken during the regular course of business would not result in levy of penalty u/s 271D and E, there is no legal infirmity in the impugned orders of the CIT (Appeals) and the Tribunal requiring any interference by this Court.
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