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Showing 241 to 260 of 1455 Records
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2021 (3) TMI 1215 - KARNATAKA HIGH COURT
TDS u/s 195 - payments made by the appellant for purchase of computer software by holding that the said payments are in the nature of ‘royalty’ - income chargeable to tax in India or not? - disallowance made under Section 40(a)(i) - HELD THAT:- As decided in the case of ENGINEERING ANALYSIS CENTRE FOR EXCELLENCE PRIVATE LIMITED [2021 (3) TMI 138 - SUPREME COURT] amounts paid by resident Indian end-users/distributors to non-resident computer software manufacture/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in Section 195 of the Income Tax Act were not liable to deduct any TDS under Section 195 - Decided in favour of assessee.
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2021 (3) TMI 1214 - SUPREME COURT
Covid-19 Regulatory Package notified by the RBI vide notification dated 27.03.2020 - case of petitioner is that the Regulatory Package will not in any manner salvage the MSMEs and help them recover from financial losses that have been caused due to the unforeseen circumstances - complete waiver of interest or interest on interest during the moratorium period - sector-wise relief packages sought to be offered by the Union of India and/or the RBI and/or the Lenders - seeking moratorium to be permitted for all accounts instead of being at the discretion of the Lenders - seeking extension of moratorium beyond 31.08.2020 - seeking extension of last date for invocation of the resolution mechanism, namely, 31.12.2020 provided under the 6.8.2020 circular.
HELD THAT:- In RK. GARG VERSUS UNION OF INDIA AND OTHERS [1981 (11) TMI 57 - SUPREME COURT], it has been observed and held that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It is further observed that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this particularly true in case of legislation dealing with economic matters - This Court in the case of STATE OF MP VERSUS NANDLAL JAISWAL [1986 (10) TMI 321 - SUPREME COURT] has observed that the Government is entitled to make pragmatic adjustments which may be called for by particular circumstances. The court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide.
In the case of PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD. VERSUS RESERVE BANK OF INDIA [1992 (1) TMI 337 - SUPREME COURT], it is observed and held by this Court that the function of the Court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority. It is further observed that a public body invested with statutory powers must take care not to exceed or abuse its power. It must keep within the limits of the authority committed to it. It must act in good faith and it must act reasonably. Courts are not to interfere with economic policy which is the function of experts. It is not the function of the courts to sit in judgment over matters of economic policy and it must necessarily be left to the expert bodies. In such matters even experts can seriously and doubtlessly differ. Courts cannot be expected to decide them without even the aid of experts.
Thus, it is not the function of the Court to amend and lay down some other directions. The function of the court is not to advise in matters relating to financial and economic policies for which bodies like RBI are fully competent. The court can only strike down some or entire directions issued by the RBI in case the court is satisfied that the directions were wholly unreasonable or in violative of any provisions of the Constitution or any statute. It would be hazardous and risky for the courts to tread an unknown path and should leave such task to the expert bodies. This Court has repeatedly said that matters of economic policy ought to be left to the government.
The present petitions seeking reliefs, namely, (i) total waiver of interest during the moratorium period; (ii) to extend the period of moratorium; (iii) to extend the period for invocation of the resolution mechanism, namely 31.12.2020 provided under the 6.8.2020 circular; (iv) that there shall be sector-wise reliefs provided by the RBI; and (v) that the Central Government/RBI must provide for some further reliefs over and above the relief packages already offered stand dismissed.
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2021 (3) TMI 1213 - SUPREME COURT
Seeking extension of Amnesty Scheme - cap on the late fees to be collected - exemption from the payment of late fees between 25 March 2020 and 30 June 2020 - refund of amounts calculated - HELD THAT:- The Amnesty Scheme itself lies in the realm of a policy intervention by the Union Government. The terms on which the Amnesty has been granted are hence matters of policy. There are no merit in the petition.
Petition dismissed.
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2021 (3) TMI 1212 - DELHI HIGH COURT
Disallowance u/s 14A - correctness of such claim of the Respondent in respect of such expenditure in relation to income which does not form part of the total income under this Act - license fee paid to the Department of telecommunication by the assessee - whether exemption under section 10A of the Act should not be computed after excluding telecommunication expenses and foreign currency expenditure from the export turnover - HELD THAT:- In view of the decision rendered in HCL COMNET SYSTEMS & SERVICES LTD. [2021 (3) TMI 1182 - DELHI HIGH COURT]These questions of law as suggested by the revenue cannot be entertained. In brief, the questions of law as suggested by the revenue stand covered by various judgments of either this Court or the Supreme Court.
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2021 (3) TMI 1211 - ITAT BANGALORE
Claim of deduction u/s 80P(2)(a)(i) denied - assessee was also dealing with associate / nominal members - HELD THAT:- The Hon’ble Apex Court in the case of The Mavilayi Service Co-operative Bank Ltd [2021 (1) TMI 488 - SUPREME COURT] had held that the expression “members” is not defined under the Income-tax Act. Hence, it is necessary to construe the expression “members” in section 80P(2)(a)(i) of the I.T.Act as it is contained in the respective State Co-operative Act. Also providing credit facilities to associate or nominal members would be entitled to deduction u/s 80P(2)(a)(i) of the I.T.Act unless they are not considered as members of co-operative under the respective State Act.
A.O. has merely denied the benefit of deduction u/s 80P(2)(a)(i) for the reason that the assessee was also dealing with associate / nominal members, which is against the dictum laid down by the Hon’ble Apex Court in case of Mavilayi Service Co-operative Bank Ltd. & Ors. (supra). The Hon’ble Apex Court has settled many issues. The instant case needs to be examined by the A.O. in light of the principles enunciated by the Hon’ble Apex Court in case of Mavilayi Service Co-operative Bank Ltd. & Ors. (supra). Accordingly, the CIT(A) order on this issue is set aside and the same is restored to the files of the A.O. for Re -examination
Rejection of claim of deduction u/s 80P(2)(a)(i) of the I.T.Act with regard to interest income earned from fixed deposit kept with Co-operative Banks - Whether the Income Tax Authorities has erred in holding that the interest earned by the assessee from deposit made with Co-operative Banks is chargeable to tax u/s 56? - HELD THAT:- On identical facts the co-ordinate bench of the Tribunal in the case of M/s.Raithara Seva Sahakara Sangh v. ITO [2019 (1) TMI 282 - ITAT BANGALORE] had restored the matter to the A.O. for de novo consideration. We restore the issue of claim of interest income received from other co-operative banks to the files of the A.O. for de novo consideration. The A.O. shall follow the directions of the Tribunal contained (supra)
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2021 (3) TMI 1210 - ITAT MUMBAI
Eligibility of Deduction u/s 80P - CIT(A) held that the interest income earned by the appellant from investment of surplus funds with co-operative banks is not eligible for deduction u/s 80P(2)(d) or 80P(2)(a)(i) - assessee is a co-operative credit society and doing banking business ; it collects deposits from members from various schemes ; its major source of income as evident from the profit and loss account is on account of interest on loan given to members and interest on deposits with banks - HELD THAT:- In CIT v. Kalpadi Co-operative Township Ltd. [2016 (9) TMI 952 - MADRAS HIGH COURT] the Hon’ble Madras High Court held that “a Cooperative Credit Society providing credit facilities to its members alone and not to general public large nor it did receive moneys by way of deposits on general public, would not be treated as Co-operative Bank ; it would be entitled to deduction u/s 80P.”
As per Mavilayi Service Co-operative Bank Ltd. v. CIT [2021 (1) TMI 488 - SUPREME COURT] limited object of section 80P(4) is to exclude Co-operative Banks that function at par with other commercial banks i.e. which lend money to members of the public .
To sum up: In Totagars Co-operative Sale Society [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] the Hon’ble Karnataka High Court has held that for purpose of section 80P(2)(d) a Co-operative Bank should be considered as a Co-operative Society. In Mavilayi Service Co-operative Bank Ltd. [2021 (1) TMI 488 - SUPREME COURT] the Hon’ble Supreme Court has held that “Section 80P of the IT Act, being benevolent provision enacted by Parliament to encourage and promote the credit of the co-operative sector in general must be liberally and reasonably, and if there is any ambiguity, in favour of the assessee.
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2021 (3) TMI 1209 - ITAT DELHI
Deduction u/s 80HHC on DEPB in full as claimed by the assessee in his return of income - HELD THAT:- As both the parties have to be looked into the context of the law laid down by various decisions passed by the Hon’ble High Courts as well as the Supreme Court in cases of Avani Exports [2015 (4) TMI 193 - SUPREME COURT] and Carpet India [2019 (9) TMI 738 - SUPREME COURT]. Hence, we are remanding back both the issues to the file of the Assessing Officer for fresh adjudication in light of the provisions of law settled by the judicial forums including Hon’ble Apex Court.
Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Hence, Ground Nos. 2 and 3 of the assessee’s appeal are partly allowed for statistical purpose.
Disallowance on account of interest - HELD THAT:- It is pertinent to note that from the paper books pointed out by the Ld. AR during the hearing, it can be seen that these advances were not from the interest bearing borrowed funds. Thus, the advances were exclusively for the purposes of business of the assessee and the Assessing Officer has not taken cognizance of the same. Further while disallowing the claim of the assessee, the Assessing Officer failed to establish the nexus between the amount not given and the advances. Thus, the CIT(A) was not correct in confirming this addition.
Allowability of deduction u/s 80HHC by the Assessing Officer only after reducing the amount of deduction u/s 80IB from the amount of business profit - HELD THAT:-We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the Hon’ble Delhi High Court in case of Great Eastern Exports Ltd. [2010 (11) TMI 91 - DELHI HIGH COURT] held that the deduction allowed u/s 80-IA had to be reduced from the profits for computing deduction u/s 80HHC. The same principle will be applicable in the present case, hence, Ground No. 8 is dismissed.
Depreciation @ 50% on machinery purchased under TUF Scheme - HELD THAT:- As assessee is in the business of manufacturing and export of handloom goods, floor coverings and made ups which are covered under the TUF scheme, though the Assessing Officer has not denied these facts. The assesse in fact, has demonstrated before us by giving details which was produced before the Assessing Officer as well, as to how each machinery is covered under which clause of TUF Scheme. Thus, the CIT(A) has rightly held that after comparing the bills, the description of the machines and the relevant entry in schedules to TUF Scheme, it is clear that item no. 1 to 30 and 36 are covered under TUF Scheme and the same are eligible for depreciation accordingly @ 50%, whereas, item no. 31 to 35 totaling for value of ₹ 97,000/- only are not covered under any clause of the schedules of TUF Scheme, therefore, the machinery worth ₹ 97,000/- are eligible for depreciation at the normal rate of 25% and accordingly directed the Assessing Officer. Therefore, there is no need to interfere with the findings of the CIT(A).
Difference in the value of stock as per stock statement submitted to the Bank and as declared in the trading results of the assessee - HELD THAT:- As the books of accounts of the assessee were never rejected by the assessee during the year. Further, from the perusal of the details filed by the assessee, it can been seen that the assessee received/ purchased goods worth ₹ 4,66,94,618/- before 01.03.2004. The said purchase is evident from the bills and vouchers. All these documents/evidences were before the Assessing Officer. Thus, the CIT(A) rightly deleted this addition with justifiable reasoning. Therefore, there is no need to interfere with the finding of the CIT(A). Hence, Ground No. 2 of the Revenue’s appeal is dismissed.
Disallowing foreign traveling expenses - DR submitted that the assessee other than the partners of the firm or the supporting bills could not produced any other evidence to establish that these expenses have been wholly and exclusively for the business purposes - HELD THAT:- From the perusal of the order of the CIT(A) as well as the Assessment Order, it can be seen that the evidences/documents were produced by the Assessee during the assessment proceedings to establish the claim of the assessee that the foreign travel was exclusively for the business purpose only. Hence, there is no need to interfere the findings of the CIT(A).
Addition on account of building repair and maintenance expenses - HELD THAT:- AO has not disputed the expenditure incurred on repair and maintenance but held the same as capital expenditure. The assessee’s factory is on rented premises and there is no new structure created by the assessee. These facts were also not disputed by the Assessing Officer. Hence, there is no need to interfere with the finding of the CIT(A). Ground No. 5 of the Revenue’s appeal is dismissed.
Disallowing export promotion expenses - HELD THAT:- It is pertinent to note that the AO has allowed the export promotion expenses to the extent of 9/10th of the expenses claimed by the assessee. AO never disputed that there is export promotion expenses. In fact, there is no observation by the AO that certain portion of these expenses were utilized for personal use.The disallowance is only on the basis of presumption and assumptions.Therefore, the CIT(A) rightly deleted this addition.
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2021 (3) TMI 1208 - ITAT HYDERABAD
Validity of notice u/s.143(2) at this belated stage - notice beyond the statutory period of six months from the end of the financial year in view of the revised return dt.16.11.2015 - HELD THAT:- There is no dispute between the parties about the assessee having filed the original return on 4.7.2014 followed by Section 143(2) notice, revised return dt.16.11.2015 and the subsequent section 143(2) notice dt.18.11.2016; respectively, in seriatum. Mr. Pandey fails to dispute that the Assessing Officer notice u/s. 143(2) dt.18.11.2016 turns out to be beyond the statutory period of six months from the end of the financial year in view of the revised return dt.16.11.2015. This period of six months has to be counted from 31.03.2016 therefore. We go by this analogy and find that this latter section 143(2) notice dt.18.11.2016 is not a valid notice since issued beyond the said period of six months.
Whether the Assessing Officer must issue afresh section 143(2) notice; going by the assessee or by the earlier notice issued before the assessee's revised return dt.16.11.2015 shall continue to hold the field, we find that the same is no more res integra as per learned co-ordinate bench’s decision [2017 (6) TMI 1344 - ITAT CHENNAI] is no more res integra.
Learned co-ordinate bench has held in other words that such an issuance of fresh section 143(2) notice is a condition precedent going by the honourable apex court land mark decision in Hotel Blue Moon case [2010 (2) TMI 1 - SUPREME COURT] We adopt the very reasoning mutatis mutandis to accept the assessee's additional substantive grounds 20 to 25. The impugned assessment stands annulled therefore. Ordered accordingly. All other rival pleadings in assessee's and Revenue’s cross appeals on merit are rendered infructuous as the necessary corollary.
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2021 (3) TMI 1207 - DELHI HIGH COURT
Withholding of refund u/s 241A - Non-finalization of tax demand - Period of limitation for sending intimation of withholding of refund - ITR being processed under Section 141(1) - notice under Section 143(2) of scrutiny assessment - HELD THAT:- Section 241A however does not prescribe the time limit within which order thereunder is to be made. The question which thus arises is, whether the order under Section 241A of the Act issued on 15th July, 2020, was within time, inasmuch as if it is beyond time, direction for refund will have to be issued and need to go into challenge to validity thereof will not arise. - In the facts of the present case, the order under Section 241A thus had to be before 31st March, 2020 and the order dated 15th July, 2020 is beyond that date.
For the writ Court to quash the order under Section 241A of the Act on the ground that no tax is due and thus question of refund likely to adversely affect the revenue does not arise, this Court has to conclusively hold that the petitioner has no tax liability in India. Once it is so held, there will be nothing left to be determined in the assessment underway pursuant to notice under Section 143(2) of the Act.
A determination of tax liability in a challenge to an order under Section 241A would set at naught the entire statutory scheme of assessment and appeals, ultimately to this Court, opening the doors to every assessee to whom a notice under Section 143(2) of the Act is issued, to approach this Court contending that the ITR filed and being processed under Section 143(1) of the Act admits / permits of no scrutiny and should be accepted. This Court would then be appropriating to itself the entire statutory mechanism of assessment, First Appeals and Appeals to Income Tax Appellate Tribunal and thereafter to this Court.
Rather, the AO and Principal Commissioner also, in exercise of powers under Section 241A, are concerned largely with the question of grant of refund likely to adversely affect revenue i.e that the tax, if ultimately found due, being not recoverable; though the AO and Principal Commissioner have in the impugned order given detailed reasons, but in our view were not required to, as the same is likely to prejudice the assessment underway. We thus clarify that the same will have no bearing in the final assessment.
Petition dismissed.
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2021 (3) TMI 1206 - MADRAS HIGH COURT
Levy of Service tax - sale of starter packs with prepaid voucher - margin earned by the petitioners during the sale process - HELD THAT:- The issue on hand is squarely covered by the decision of the Hon'ble Division Bench in THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. BHARAT CELL [2015 (10) TMI 1111 - MADRAS HIGH COURT] where it was held that Though the correct procedure for discharge of the service tax liability by the two parties is that the distributors raise bills for commissions that is due to them along with service tax and BSNL takes Cenvat credit of tax paid by distributors for discharging liability on the telecommunication service provided by BSNL, such procedure does not result in extra realization of Revenue.
Petition allowed.
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2021 (3) TMI 1205 - CESTAT CHENNAI
Reduction in quantum of redemption fine and penalty - Smuggling - Gold Bar - Revenue entertained a doubt that the appellant had improperly imported gold into India - HELD THAT:- It is interesting to note that there is no explanation on the cut pieces of 100 gms foreign marked gold bar with the marking “Cambi, Suisse 100 gm Gold 999.9” ending with last five digits of Sl.No. 09053” that was retrieved from Ryobi brand 6” Orbittal Buffer car cleaning machine. There is also no rebuttal on maintaining a secret chamber and a hot furnace inside nor has he disputed the availability of dismantled power tools of buffer car cleaning machine, etc. More interestingly, the appellant has nowhere claimed, rather has not even admitted that he is an authorised/license holder/goldsmith to carry out the job of melting gold pieces and convert to gold items of his so called customers. After having mentioned that the gold pieces were given by his customers, he has nowhere even offered to furnish the details of such customers to whom the seized gold including the one cut piece with marking “Cambi, Suisee 100 gm Gold 999.9” belonged.
The cumulative effect of the observations is that the initial burden cast on the appellant in terms of Section 123 ibid has not been discharged and therefore Revenue's action is justified. Strangely, the non-filing of appeal against rejection of absolute confiscation by Commissioner (Appeals) is questionable especially when an order authorising appeal against Order-in-Original granting redemption was made. Further, the Revenue has happily accepted the Commissioner (Appeals) order whereby the substantial reduction is ordered, both in terms of redemption fine as well as penalty, hence Commissioner (Appeals) order has to be upheld.
Appeal dismissed.
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2021 (3) TMI 1204 - CESTAT CHENNAI
Reduction in quantum of penalty - Smuggling - Gold - defence of appellants is the retraction statement of these appellants wherein they have inter alia mentioned that the ‘Officers searched their Workshop in Ayanavaram when they were doing their job with regard to melting of the Gold Pieces converting to Gold Rings which was given by the customers - HELD THAT:- The retraction statement itself hints that they were aware/conscious of what job they were carrying on; the very fact that they were involved in melting gold of the alleged huge quantity cumulatively points to the modus operandi in converting smuggled gold bar into crude gold.
In the case of their employer also, Shri Alaudeen has nowhere furnished or even offered to furnish any registration for having engaged in the job of the nature they were involved in, nor has he come forward to furnish the details of their so-called customers, including such customer who wanted the melting of foreign marked gold bars. If they were aware of the identity of their customers, then there was no need for the first appellant herein to go to the brokers in N.S.C. Bose Road to sell off the melted gold, which fact has neither been denied nor rebutted in their retraction.
The melting activity was carried on by all three of them jointly to hide the identity of the foreign marked gold bars, make them appear as crude gold and sell them locally, which clearly attracts the penal provision of Section 112 of the Customs Act, 1962 - Appeal dismissed.
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2021 (3) TMI 1203 - CESTAT CHENNAI
Condonation of delay in filing appeal - appeal has been filed after lapse of 113 days from the date of communication of the order - rejection of appeal on the ground of time limitation - restriction provided under first proviso to sub-clause (a) of clause (1) to Section 129A of the Customs Act, 1962 - Smuggling - Cigarettes - Saffron - absolute confiscation - penalty - HELD THAT:- As per the above proviso, no appeal would lie before the Tribunal in respect of any order passed by Commissioner (Appeals) if such order relates to any goods imported or exported as baggage. In the present case, apart from confiscating the goods in the baggage, there is also an issue of smuggling of gold. Further, the order passed by the Commissioner (Appeals) does not touch the merits of the case and is confined to the time-bar aspect in filing the appeal. So it would fall under sub-clause (b) of clause (1) of Section 129A of the Customs Act, 1962.
The appellant has denied receipt of the Order in Original by registered post and has affirmed this by affidavit. When a letter is sent by registered post a presumption is to be drawn that it has been received by the addressee. However, such presumption is a rebuttable presumption. A negative fact can be established only by affidavit. When the appellant has affirmed the negative by filing an affidavit, the burden shifts on the department to establish as to why they served the registered letter to Shri S. Mujahian. Department has establish details that the person who signed the acknowledgment card is known to the appellant or that they have served the letter on the person who is duly authorized by the appellant. The department has failed to establish these facts. The only conclusion that can be arrived therefore is that the order is served on some person other than the appellant - When the registered post is received by some person unknown to the appellant it cannot be said that the order is served or communicated to the appellant. The consultant of the appellant has obtained a copy of the Order in Original on 16.12.2019. The appeal then has to be filed within 60 days from 16.12.2019. The appellant has filed the appeal before Commissioner (Appeals) on 9.3.2020 which is beyond 60 days period. The Commissioner (Appeals) can condone delay of 90 days. The delay in this case would be less than 30 days. So when computed from 16.12.2019, the appeal has been filed within the time limit condonable by Commissioner (Appeals).
The rejection of appeal on the ground of time-bar cannot sustain and requires to be set aside - the appeal is remanded to the Commissioner (Appeals) who shall consider the application for delay - Appeal allowed.
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2021 (3) TMI 1202 - CESTAT BANGALORE
Scope of SCN - Refund of unutilized CENVAT credit of service tax - sales, marketing and administrative services - export of service or not - allegation is that the impugned order have all travelled beyond the SCN - HELD THAT:- When the show-cause notice dt. 28/03/2014 was issued when the appellant filed the refund claim and the grounds raised in the show-cause notice was lack of nexus, claim is time barred and lack of documentation or discrepancies in documents; whereas when the Order-in-Original dt. 16/01/2018 was passed, the original authority travelled beyond the show-cause notice and came to a finding that the sales, marketing and administrative services are classified as BAS provided in India and hence Rule 6A not fulfilled and the appellant is acting as an intermediary.
Further, the appellant has satisfied all the six conditions of Rule 6A which proves that these services rendered by them are export of service.
Thus, the impugned order is bad in law as it has travelled beyond the show-cause notice and also on merit, the services rendered by the appellant fall in the definition of ‘Export of Service’ and the appellant is entitled to refund of the said amount - appeal allowed - decided in favor of appellant.
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2021 (3) TMI 1201 - CESTAT BANGALORE
CENVAT Credit - Cargo Handling Services - duty paying invoices - supplementary invoices - the show-cause notice, adjudication order and the Order-in-Appeal have not mentioned anything regarding the issuance of show-cause notice by the Proper Officer for recovery of service tax from the service provider - applicability of exceptions contained in Clause (bb) of Rule 9(1) to restrict the credit - HELD THAT:- Admittedly in the present case, no proceedings have been initiated against the service provider Shri K. Basavaraj by issuing any notice and there is no adjudication order against the service provider who paid the service tax on the advice of the jurisdictional Superintendent and issued the supplementary invoices dated 4.3.2016 and the appellant on the basis of the said supplementary invoices has taken the CENVAT credit. Further, as per Rule 9 of CENVAT Credit Rules, 2004, supplementary invoices issued by the service provider is a valid and prescribed document for taking CENVAT credit and the only embargo for taking CENVAT credit is when the amounts as contained in the supplementary invoices become recoverable from the provider of service on account of non-levy or non-payment or short-payment or short-levy by reason of fraud, collusion, wilful mis-statement or suppression of facts and contravention of any of the provisions of the Finance Act, 1994 or Rules made thereunder with intention to evade payment of service tax as specified in Clause 9(1)(bb) of CENVAT Credit Rules, 2004.
It has been consistently held by the Tribunal in the various decisions that in the absence of show-cause notice and determination that the additional amount of duty or tax become recoverable, the tax amounts paid by the service provider cannot be denied on the ground that provisions of Rule 9(1)(bb) of CENVAT Credit Rules, 2004 are attracted. Further, the allegations of adjudicating authority that the appellant have violated the provisions of Rule 4A(1) of CENVAT Credit Rules, 2004 and Rule 3 of the Point of Taxation Rules, is also erroneous because the said Rules are applicable to service provider and not to service recipient.
The CENVAT credit of ₹ 25,54,522/- paid voluntarily by the service provider on the strength of supplementary invoices is admissible to the appellant as credit in terms of Rule 9(1)(bb) of CENVAT Credit Rules, 2004 - Appeal allowed - decided in favor of appellant.
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2021 (3) TMI 1200 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - NPA - Financial Creditors or not - existence of debt and dispute or not - Time Limitation - HELD THAT:- It is admitted that the Corporate Debtor failed to make any payment and only 20th May, 2016 the Respondent No. 1 issued a recall notice for an outstanding dues of ₹ 26,61,47,046/- - It is admitted that on 20.02.2019 the Respondent No. 1 computed the total dues of the Corporate Debtor which came to ₹ 42,33,36,044/- and informed the Corporate Debtor through letter which is part of Annexure- A/2 Vol- II, pages 247 to 249 of the Appeal Paper Book.
In view of the categorical acknowledgement by the Corporate Debtor, acknowledging the dues and making requests for the rescheduled the payment of the instalments, we are of the clean opinion that in view of the Judgment of this Appellate Tribunal [2020 (9) TMI 582 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] dated 14th September, 2020 the ratio of the judgment is applicable in the facts of this case and this case is squarely covered by the aforesaid judgment. At this stage the plea of the Appellant is that the Application under Section 7 of the IBC is barred by limitation, cannot be sustained in the eye of law.
The Appellant has failed to demonstrate that the impugned order suffers from any legal infirmity - Appeal dismissed.
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2021 (3) TMI 1199 - ITAT ALLAHABAD
TDS u/s 194C OR 194J - Short deduction of tds - payment of Special Services - assessee in default u/s 201(1A) - assessee has claimed that these are payments of confidential/secret nature and the details of payees and other details cannot be disclosed and no income tax was deducted at source while making payments under this head as otherwise confidentiality would have been breached if the PAN and other details such as of payees etc are uploaded into the system while filing TDS returns - HELD THAT:- Only bald assertion made that the amount was spent for supply of pre-printed examination papers while there are no evidence on record before us to hold that these payments were made for the aforesaid purposes. Even affidavit from Secretary, Lok Seva Aayog, U.P.(UP Public Service Commission) averring the nature of expenses incurred has not been filed. It is equally true that the assessee has got allocation from UP State Government for expenditure for secret services.
The assessee has to maintain secrecy and confidentiality of these payments and hence it is claimed that no income-tax was deducted at source as otherwise it will breach the confidentiality once PAN of the payee is uploaded while filing TDS returns. The assessee is facing genuine hardship as on the one hand it is bound to maintain complete secrecy of payments as is mandated by State Government as the nature of expenses is claimed to be for supply of pre-printed examination paper, while on the other hand, the provisions of the 1961 Act requires the deduction of income-tax at source under Chapter XVII-B if the payment falls under the said provisions. The assessee has not obtained any certificate from the AO for non deduction of TDS on these payments as is mandated under the provisions of Section 197 of the 1961 Act. Provisions of Section 119 empowers CBDT to grant exemption from rigours of provisions of the 1961 Act to redress genuine hardship of the taxpayers. The assessee has also filed additional evidences before tribunal(pb/page 8-11) by way of allocation of budget of the assessee by State Government which also contains allocation for Secret Services Expenses, these evidences are vital to resolve the issue but the same requires verification by the authorities below. It is equally well settled that the duty of all taxing authorities to assist taxpayers so that they get reliefs which they are entitled to. Reference is drawn to Circular issued by the Central Board of Direct Taxes Circular No: 14 (XL-35) dated April 11, 1955.
We are of the considered view, that one more opportunity need to be granted to the assessee and the issue is restored to the file of the AO for fresh adjudication.
We clarify that all the contentions are kept open. The AO shall give proper and adequate opportunity to the assessee in accordance with principles of natural justice in accordance with law.
Default in deduction of income tax at source on payments made towards Rent and other charges - Assessee is claiming that these are payments towards house tax and water tax- HELD THAT:- As observed that apart from house tax and water tax payments, there were further payments as discovered by AO during proceedings conducted for submission of remand report to ld. CIT(A) during the appellate proceedings, which facts is stated by AO in its remand report that payments to the parties covered under the head ‘Rent and other charges ’ were also made from other heads of expenditure, on which no income tax was deducted at source.
Complete details of the payee, nature of payment, rent agreement details, premises hired details etc. are neither specified by AO in its remand report nor by ld. CIT(A) in its appellate order. Thus, complete facts are not emerging from the orders passed by the authorities below as the orders passed are cryptic in nature and we are of the considered view that the matter need to be restored to the file of the AO for fresh adjudication of the issue on merits in accordance with law. The evidences filed by assessee in its support shall be admitted by AO and adjudicated on merits in accordance with law. The AO is directed to pass speaking and reasoned order.
Invocation of provisions of Section 206AA - HELD THAT:- Since, we have already restored the issue back to the file of the AO for denovo adjudication of the issues concerning deduction of income-tax at source on payments made towards Suspense Service Expenses as well on Rent and other charges as above, since this issue is interlinked with the above issues, it will be appropriate that this issue is also restored back to the file of the AO for denovo adjudication on merits in accordance with law.
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2021 (3) TMI 1198 - ITAT MUMBAI
Disallowance of loss in share trading activity - Genuineness of loss claimed by the assessee - HELD THAT:- We notice from the record that in the first round of appeal, Co-ordinate Bench [2019 (6) TMI 1592 - ITAT MUMBAI] had noted that “as seen from the written submission before the CIT(A) also the assessee was referring to various documents placed before AO in proving the genuineness of the transactions. Neither the AO nor the CIT(A) examined or referred to these documents. Be that as it may, the fact remains that neither the AO nor CIT(A) examined these documents in its correct perspective, but carried away mere by the observations of SEBI and JPC in the group cases.” With the above observation, the case was remitted back to AO. But in the second round also, we notice that AO has given notices to assessee and called for information once again. AO observe that assessee has not substantiated the genuineness of the transaction and accordingly, he sustained the disallowance of loss. The Co-ordinate Bench has clearly observed that all the relevant information was submitted by the assessee, AO should have referred those information which was already available on record. If there is any short coming or any documents, which is not proper, AO should have discussed in his order before sustaining the disallowance. He has not discussed any merits of the case based on the information submitted by the assessee in the original assessment proceedings. AO simply completed the proceedings blaming the assessee without taking cognizance of the earlier direction from ITAT.
Even the Ld. CIT(A) dismissed the appeal filed by the assessee blaming the non-appearance of the assessee and its submission. The Ld. CIT(A) also not verified the genuineness of the documents filed by the assessee in the original assessment proceedings.we are inclined to accept the submission of Ld. AR. Accordingly, the grounds raised by the assessee are allowed.
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2021 (3) TMI 1197 - ITAT VISAKHAPATNAM
Revision u/s 263 - AO estimated the income at 8% on the cash deposits without examining source of each cash deposit - HELD THAT:- AO has verified the source of cash deposits and taken a conscious decision that the source of deposits made in the bank account was related to the turnover. The cash deposits made in the savings bank was duly verified by the AO. As discussed earlier, this case was selected for limited scrutiny for verification of deposits made in the savings bank account and the case was not converted into full scrutiny.
AO is not permitted to travel beyond the scope of the case for which it was selected, unless the case is being converted into full scrutiny with the approval of Chief Commissioner of Income Tax or Commissioner of Income Tax as the case may be, as per the instructions given by the Board to the field functionaries. Calling for the details of movable and immovable properties, unexplained investments and any other information not related to limited scrutiny amounts to travelling beyond the scope of scrutiny for which the case was selected.
AO acted within the scope of limited scrutiny and assessed the income, after verification of the details. The Ld.Pr.CIT intends to substitute his view in place of decision taken by the AO, which is not permissible in the guise of revision u/s 263. No other evidence was collected by the department to show that the assessee has understated the income.
As argued by the Ld.AR, inadequate enquiry is not the reason for taking up the case for revision u/s 263 as decided by the Tribunal in the case of M/s Naveena Rice Industries [2018 (7) TMI 2170 - ITAT VISAKHAPATNAM] relied upon by the assessee. Though the Ld.DR tried to distinguish the case of the assessee with the Naveena Rice Industries, we find that the observation of the Tribunal is squarely applicable to the assessee’s case also. In the cited case, this Tribunal held that though lack of enquiry is the reason or for taking up the case for revision, inadequate enquiry cannot be held to be erroneous and prejudicial to the interest of the revenue.
We hold that there is no error which is prejudicial to the interest of the revenue in the order passed by the AO u/s 143(3) dated 16.08.2016. Hence, we set aside the order of the Ld.Pr.CIT and allow the appeal of the assessee.
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2021 (3) TMI 1196 - ITAT DELHI
Jurisdiction of Assessing Officer u/s 120 - Transfer of case u/s 124 - jurisdiction of DCIT, Circle-3, Gurgaon and ACIT, Circle-13(1), New Delhi - HELD THAT:- The assumption of jurisdiction by DCIT, Circle-3, Gurgaon in AY 2012-13 is not free from doubt in the light of the undisputed fact that jurisdiction in other years was exercised by ACIT, Circle-13(1), New Delhi. Moreover, from perusal of the Paper Book filed by the assessee, it is obvious that the assessee had filed details before the Ld. CIT(A) on merits of the additions made by the Assessing Officer, alongwith supporting evidence. It is also clear that the Ld. CIT(A) had obtained Remand Report from the Assessing Officer and further that the assessee had submitted Rejoinder to the Remand Report of the AO. In view of the foregoing, it is obvious that the Ld. CIT(A) was in error in making observation at para 3.8 of his impugned appellate order dated 15.12.2016 that the appellant had not filed any written submissions on the issue of disallowances/ additions made by the AO.
Assessee had a legitimate expectation from the DCIT, Circle-3, Gurgaon, that the objection raised against the jurisdiction assumed by DCIT, Circle-3, Gurgaon will first be decided by the DCIT, Circle -3, Gurgaon, before he would proceed to make assessment. When the jurisdiction exercised by DCIT, Circle-3, Gurgaon, is not free from doubt; the jurisdiction of Ld. CIT(Appeals)-1, Gurgaon, who passed the impugned appellate order against which assessee has filed the present appeal, is also not free from doubt; because jurisdiction of CIT(Appeals) is related to jurisdiction of the Assessing Officer.
CIT(A) was in error in disregarding the submissions made by the assessee on mertis of the additions made in the assessment order; and in wrongly observing that the assessee had not filed any written submissions on the issue of disallowances / additions made by the Assessing Officer. In view of the foregoing, we are setting aside all the disputes raised in the present appeal before us, to the file of the Assessing Officer with the direction to pass fresh assessment order as per law. We direct the Assessing Officer to first decide the dispute raised by the assessee regarding the jurisdiction assumed by the DCIT, Circle-3, Gurgaon
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