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2023 (9) TMI 1447
Revision u/s 263 - ‘limited scrutiny’ assessment in assessee's case conducted - As per CIT different figures of tangible asset, intangible asset are getting reflected, however, no question has been asked by the AO on acquisition of assets, depreciation, its impact on profit and loss account and ultimately on the taxable income of the assessee, thus, the assessment order is not only erroneous but prejudicial to the interest of Revenue and therefore needs revisions - assessee’s case was selected for “limited scrutiny purpose” for the purpose of verification of refund claim and ICDS compliance and adjustment
HELD THAT:- AO can not go beyond the items specified in the ‘limited scrutiny’ hence the jurisdiction exercised by ld PCIT is not in accordance with law, reason being assessee`s case was selected for ‘limited scrutiny’ and the issue involved in the items selected in ‘limited scrutiny’ were answered by the assessee during the assessment stage. Apart from this, during the assessment proceedings the assessee had provided all the required information to the assessing officer, which includes the complete financial statements and tax audit report of the company and other details sought by the AO. Hence assessment order passed by the assessing officer should not be erroneous and therefore the order of PCIT should be quashed.
On merit, we note that AO has issued notice u/s 142(1) wherein although he has not raised the issue pertaining to depreciation, because he was instructed to conduct limited scrutiny, however, we note that tax audit report which contains depreciation schedule as per Income Tax Act, and audit report as per Companies Act, which contains depreciation as per Companies Act, were on the record of the assessing officer. Therefore, Assessing Officer having satisfied himself passed the assessment order and such order passed by the Assessing Officer should not be prejudicial to the interest of revenue.
The assessee has not claimed the depreciation in tax audit report (for income tax purposes) as the new assets so purchased were not put to use. However, for Companies Act purpose, the assessee has shown depreciation in the audited books of accounts, this difference between the depreciation schedule prepared as per Income Tax Act and the depreciation schedule prepared by the assessee, as per companies Act, has been raised by ld PCIT. We note that there is no default on the part of the assessee to submit the depreciation schedule as per companies Act and as per Income Tax Act before the assessing officer. Therefore, on merit also the assessing officer has examined the issue which was raised by the ld. Principal Commissioner of Income Tax.
Therefore, order of the assessing officer passed u/s 143(3) cannot be termed as erroneous since enquiry was, in fact, carried out by assessing officer on the issue on which the ld PCIT has found fault with and has taken a plausible view.
The Hon’ble Supreme Court in the case of Malabar Industries [2000 (2) TMI 10 - SUPREME COURT] held that this phrase i.e. “prejudicial to the interest of the revenue’’ has to be read in conjunction with an erroneous order passed by the Assessing Officer - it has to be remembered that every loss of revenue as a consequence of an order of Assessing Officer cannot be treated as prejudicial to the interest of the revenue. When the Assessing Officer adopted one of the courses permissible in law and it has resulted in loss to the revenue, or where two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue “unless the view taken by the Assessing Officer is unsustainable in law”. Based on the facts and circumstances of the case, we quash the order passed by ld PCIT - Decided in favour of assessee.
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2023 (9) TMI 1446
Seeking remand of matter for reassessment of the bills of entry taking into consideration the country-of-origin certificate - Concessional rate of duty - Eligibility for benefit of N/N. 152/2009- Cus. - HELD THAT:- The prayer put forward by the respondent before the Commissioner (Appeals) was only to remand the matter for reassessment of the bills of entry taking into consideration the country-of-origin certificate. The Commissioner (Appeals) has, however, gone beyond the prayer made in the appeal before him and held that the respondent is eligible for the benefit of the notification.
The respondent having produced the country-of-origin certificates, the matter requires to be remanded to the original authority to consider the benefit of concessional rate of duty as per the Notification No.152/2009-Cus. The original authority is also directed to take into consideration Notification No.187/2009-Cus. dt. 31.12.2009 (Determination of Origin of Goods under the Preferential Trade Agreement between the Government of India and the Republic of Korea Rules, 2009) which provides for production of the countryof-origin certificate within a period of 12 months from the date of shipment of the goods.
The impugned order is modified to the extent of remanding the matter to the original authority to look into the benefit of Notification No.152/2009-Cus. as well as 187/2009-Cus. - the appeal filed by the Department is disposed of by way of remanding the matter to the original authority.
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2023 (9) TMI 1445
TDS u/s 195 - deduction of TDS in respect of remittances made by the appellant to US based company i.e., M/s. IGTL Solutions (U.S.A.) - appellant strongly contended that once when the certificate was obtained from the Joint Director so far as the waiver of deduction of TDS in respect of remittances is made to M/s. IGTL Solutions (USA) has not been considered, discussed, referred to either by the Commissioner of Income Tax (Appeals) or by the Tribunal
HELD THAT:- Today, when the matter is taken up for hearing, the entire paper-book that was filed before the Tribunal was made available by the learned counsel for appellant and one such document therein is the certificate so issued u/s 195(3) of the Act, granting exemption to M/s. IGTL Solutions (USA) so far as receiving of remittances without deduction of income tax at source. If the contents of the said document is to be accepted and on verification, found to be genuine, the consequences would be that the entire remittances that have been made to M/s. IGTL Solutions (USA) would be non-taxable so far as TDS is concerned. Further, if the contents of the said letter stands accepted, then the action on the part of the respondent in carrying out deduction at source on the remittances made to M/s. IGTL Solutions (USA) would be per se bad.
Thus taking note of the fact that there is a non-reference or non-deliberation of the exemption so obtained under Section 195(3) of the Act by the two forums below, we are of the considered opinion that it is a fit case where matter can be remitted back to the Tax Tribunal for considering the contentions raised by the appellant so far as exemption that they have got under Section 195(3) of the Act insofar as the remittances that have been made to M/s. IGTL Solutions (USA) is concerned. Considering the fact that the order of the Tribunal is one, which was passed as early as on 03.08.2007, it is expected that the Tribunal shall reconsider this matter, particularly, taking into consideration the exemption so granted to the appellant on 10.02.2003.
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2023 (9) TMI 1444
Payment of Income tax on the compensation under the provisions of Right to Fair Compensation and Transparency in Land Acquisition Act, 2013 - Quantum of compensation and deduction of income tax at source on the said compensation without granting any exemption from payment of income tax - As contended that the compensation was required to be awarded under Act, 1894 and not under Act, 2013 as the same is not applicable in respect to the acquisition made by KIADB. That the deduction of tax at source was in accordance with provisions of law as no exemption is provided from payment of income tax on the compensation.
HELD THAT:- As rightly taken note of by the learned Single Judge that in the background of upholding the contention of the respondents/writ petitioners of their entitlement of compensation under the provisions of Act, 2013, the entire benefit including the benefit under Section 96 of the said Act, 2013 has to be extended in its entirety. More so, as already noted even BMRCL, which is the appellant in the connected matter challenging the relief granted in favour of respondent/writ petitioners for determination of their claim for compensation under Act, 2013, itself has issued package compensation as per Annexure-H and General Compensation has been awarded as per Annexure-H1 taking into consideration the provisions of Act, 2013. Therefore, contention of appellant cannot be accepted, to say that since the exemption of payment of Income Tax Act and deduction of income tax at source on the compensation payable against the acquisition of land only if it is made under Act, 2013 and not under KIADB Act, 1966.
Learned Single Judge in his discussion on point No.3 has taken into consideration the provisions of law, the Circular and also the exemption granted from payment of income tax and deduction of tax at source in the awards and also the precedence in the nature of judgments passed in the case of Viswanathan M. vs The Chief Commissioner and Others [2020 (5) TMI 465 - KERALA HIGH COURT] wherein it has been held that compensation payable to the land losers would be exempt from payment of income tax, we do not see any reasons to deviate and hold contrary to the said view more particularly, for the reason of respondent/writ petitioners having held to be entitled for determination of their claim for compensation under Act, 2013. Since the only contention raised by the appellant that the exemption is provided under the new Act, 2013 and that having been held in favour of the respondents/writ petitioners, no grounds are made out warranting interference with the impugned order.
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2023 (9) TMI 1443
Quantum of compensation and deduction of income tax at source on the compensation without granting any exemption from payment of income tax - compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - compensation received pursuant to acquisition by the State/KIADB [Karnataka Industrial Areas Development Board] - Entitlement to refund the tax deducted at source together with applicable interest from the date of deposit till the date of refund - compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - Whether the petitioners are entitled to compensation under the Land Acquisition Act, 1894 or under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act ,2013, in respect of lands acquired pursuant to preliminary notification issued after 01.01.2014 u/s 28(1) of the Karnataka Industrial Area Development Act, 1966?
HELD THAT:- The claim of the petitioners is for grant of compensation under the Act, 2013. Though respondent authorities and the appellant herein do not seriously dispute grant of compensation under the Act, 2013, except stating that the package compensation offered by the appellant herein applying provisions of Act, 2013 is only for the limited purpose of passing consent award and if it was not accepted the compensation would be awarded in accordance provisions of KIAD Act, 1966, it is necessary at this juncture to refer to the very notification dated 15.10.2015 issued under Section 28(1) of the KIAD Act, 1966 seeking to acquire the subject property in that it is stated that compensation for acquisition would be paid in terms of Act, 2013. When a representation to pay the compensation is under Act, 2013 is made in the very notification, respondent-authorities cannot be allowed to contend the contrary.
In that view of the matter the contention of the respondent-authorities that grant of compensation in the cases referred to and relied upon by the respondents/ writ petitioners was on the basis of the fact the land acquired was not for BMRCL and the contention of the appellant herein that the calculation of package compensation that was made under Act, 2013 is only for the limited purpose of passing consent award cannot be countenanced.
It is also necessary to note that no appeal has been filed by the respondents 5, 6, 7 and 8 on the question of validity or otherwise of the resolution of the KIADB passed in its 343rd meeting dated 27.08.2016 which is heavily relied upon by the respondents/petitioners and accepted by learned Single Judge. State Government by its letter dated 08.08.2019 bearing No. CI 176 SPA 2019 had reiterated and reaffirmed the resolution of the KIADB to pay the compensation under the Act, 2013.
The contention of the appellant that KIADB under the scheme of Act, 1966 is not having any power or authority in the matter of determination and payment of compensation which power and authority is vested exclusively in the State Government though appears to be tenable, however, in view of the fact that the resolution of the KIADB passed in its 343rd meeting referred to hereinabove has apart from being given effect to has been accepted and reiterated by the State Government in its communication referred to above, the said contention pales into insignificance. That apart KIADB in the aforesaid proceedings namely Puttalakshmma and Jalaja has relied upon said resolution enabling this Court to accept the contentions of the land losers of their entitlement for compensation under Act, 2013. As already noted above, there has been no challenge to the validity or otherwise of the said resolution of KIADB by the State Government and the same has attained finality.
As regards the contentions of the appellant that it being a joint venture entity consisting of Central Government and State Government as their share holders and being liable to pay the compensation is entitled to maintain the challenge to the impugned order, and though referring to the certain clauses of the memorandum of understanding in terms of which the Appellate entity has been brought into existence, submission was made on behalf of the appellant that since payment of compensation, repayment of debt is the responsibility of the appellant- BMRCL it has locus standi to question the payment of compensation under Act, 2013, even before the amendment brought in to Section 30 of KIAD Act, 1966, it is necessary to refer to Annexure-H a communication dated 21.10.2016 addressed by BMRCL to the Special Land Acquisition Officer- respondent No. 7 with respect to providing package compensation. In that taking into consideration of the Notification dated 21.10.2016 and the value of land, solatium of 100% and the interest at 12% as provided under Section Act, 2013 has been calculated. Based on the said compensation package notices under Section 29(2) of KIADB Act, 1966 has been issued by KIADB and in furtherance thereof, general award as per Annexure-H1 has been passed by KIADB on 29.05.2018 though rejected by the petitioners.
Appellant has made out a case for maintainability of the writ appeal, cannot be heard to say that the respondents/petitioners are not entitled to payment of compensation under Act, 2013.
Similarly, though no appeal is preferred by the State and the KIADB, a feeble attempt is made by them to contend that the payment of compensation under Act, 2013 was made in the cases of Puttalakshmamma, Jalaja, Mahesh and Jemcy Ponnappa as the said cases were not concerned with the acquisition of land of BMRCL, the said submissions cannot be countenanced in view of the law laid down by the Apex Court in the case of Nagpur Improvement Trust [1972 (12) TMI 82 - SUPREME COURT] wherein the Apex Court has held that if the existence of two acts enables the State to give one owner different treatment from another equally situated, the owner who is discriminated against can claim protection of Article 14. That it is immaterial under which Act and for what purpose the land is acquired as far as land looses or concerned the differential standard of compensation cannot be applied.
Respondents/petitioners, as rightly held and declared by learned Single Judge, are entitled for the compensation under Act, 2013.
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2023 (9) TMI 1442
Grant of default bail - incomplete chargesheet or not - FSL report awaited - whether the main chargesheet as well as the subsequent supplementary chargesheets filed in the present case are incomplete on account of non-filing of documents likke doctor's opinion, FSL Report and sanction order u/s 39 of the Arms Act, 1959? - HELD THAT:- With regard to requirement sanction vis-a-vis default bail under Section 167(2) of the CrPC, in Judgebir Singh alias Jasbir Singh Samra alias Jasbir and Others v. National Investigation Agency [2023 (5) TMI 1302 - SUPREME COURT], the Hon'ble Supreme Court took note of the decision in Suresh Kumar Bhikamchand Jain [2013 (2) TMI 821 - SUPREME COURT] and held that a chargesheet filed without sanction would not be deemed incomplete.
In the present case, the investigation qua the applicant was complete at the time the first chargesheet was filed, as regards the offences mentioned in the FIR, on 02.12.2021. At the time of filing of the first chargesheet, there was sufficient material on record qua the applicant such as statements of eye-witnesses and other material evidence collected and placed on record. Mere non-filing of the FSL Report is not sufficient to conclude that the chargesheet filed in the present case was incomplete. The said report can be filed by way of a supplementary chargesheet. In any case, the case of the prosecution is primarily based on the eye witness account of the complainant. The FSL report, if any, would be a corroborative piece of evidence.
The opinion of the expert can always be filed before the learned Trial Court by way of supplementary chargesheet. It is further pertinent to note that in the present case, the learned Trial Court had taken the cognizance after the chargesheet was filed and the said order was not challenged by the petitioner.
This Court is of the opinion that the chargesheet filed in the present case was not incomplete - the bail application is dismissed.
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2023 (9) TMI 1441
Process amounting to manufacture or not - activity of blending, labeling, packing and re-packing of 'Horlicks' - section 2(f) (iii) of the Central Excise Act, 1944 read with chapter note 5 of chapter 19 of CETA, 1985 - HELD THAT:- The appellant undertakes the activity/processing on the bulk malt based powder, received from GSK thereafter removal of unwanted particles from the bulk malt based powder to make it fit for human consumption. Then processing/blending of the bulk powder with sweetened milk powder, sugar, vitamins etc. to make it marketable in the finished form and then packing of the final manufactured product either in pouches or in jars having brand name of 'Horlicks' on it. The said activity undertaken by the appellant do qualify as process of manufacturing in terms of section 2(f) of the Central Excise Act, 1944 as the activity undertaken by the appellant brings about a change in the name, character and use and bringing a new product in the market which is known as 'Horlicks', therefore, the activity undertaken by the appellant is manufacturing activity and the appellant is a manufacturer in terms of section 2(f) of the Central Excise Act, 1944.
Thus, it cannot be said that the appellant is a job-worker and providing 'Business Support Service' and no demand of service tax can be raised against the appellant - the impugned order qua demand of service tax from the appellant that they are service provider post June 2012 and prior to 2012, the appellant was providing 'Business Support Service', is not sustainable - there are no merit in the impugned order - appeal allowed.
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2023 (9) TMI 1440
Refund of accumulated CENVAT Credit under Rule 5 of Cenvat Credit Rules, 2004 - port service - input service - HELD THAT:- The ld. Commissioner (Appeals) referring to the judgments of this Tribunal in the cases of COMMISSIONER OF CENTRAL EXCISE, RAJKOT VERSUS ROLEX RINGS (P.) LTD. [2008 (2) TMI 295 - CESTAT, AHMEDABAD] and CCE, RAJKOT VERSUS ADANI PHARMACHEM P. LTD. & ORS. [2008 (7) TMI 102 - CESTAT AHMEDABAD] held that ‘port service’ is an input service, accordingly, eligible for refund of the credit availed on the said service - there are no discrepancy in the said order of ld. Commissioner (Appeals). The services rendered at the port has been consistently held as an input service within the definition of ’input service’ as per Rule 2(l) of Cenvat Credit Rules, 2004, port being the place of removal in case export of goods.
The order of the ld. Commissioner (Appeals) is upheld and the appeal filed by the Revenue is dismissed.
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2023 (9) TMI 1439
Assessment in the name of non-existing company - assessee itself has filed the return of income, appeals in the name of non-existent company - HELD THAT:- Mistake committed by the assessee does not empower the Revenue to also commit the same mistake especially in a situation where the fact about the scheme of amalgamation and conversion of the assessee into LLP was known by the AO which is evident from the assessment order discussed above. The department was aware of the complete fact that the company was no longer in existence, yet the AO has framed the assessment in the name of non-existing company. Therefore, contention of the DR fails on this count that the assessee has also made a mistake in filing the returns of income and appeal papers in the name of non-existing company.
We also note that this Tribunal in case of Urmin marketing (P) Ltd. [2020 (11) TMI 47 - ITAT AHMEDABAD] has already decided the identical issue in favor of assessee on the similar facts and circumstances. Assessment framed u/s 143(3) of the Act is not sustainable. Hence the ground of appeal of the assessee is allowed.
Disallowance of depreciation on the intangible assets/goodwill acquired in the scheme of amalgamation - all assets and liabilities of the amalgamating company were transferred to the assessee company at their book value - HELD THAT:- Goodwill generated in the scheme of amalgamation is acquired by the assessee. Thus, in our considered view the assessee has complied with all the conditions provided under section 32 of the Act. Accordingly, we are not convinced by the findings of the authorities below.
All the necessary details about the management of both companies were disclosed in the scheme of amalgamation and nothing was hidden. The scheme contained all the information related to purchase consideration, its valuation, mode of payment and accounting treatment. The Hon’ble High Court approved such scheme after inviting observation and comment from ROC, MCA, and official liquidator including the income tax department. Thus, in the given fact and circumstances the reasonableness of the scheme cannot be doubted. Accordingly, no inference can be drawn that the assessee has employed colorable device in order to record high value of purchase consideration which is resulting goodwill.
There is no prohibition under the Act for disallowing the depreciation on the goodwill generated in the scheme of amalgamation. There are certain kinds of transactions, prejudicial to the interest of Revenue, which may fall under the purview of the provisions of General Anti-Avoidance rule (GAAR), POEM, and BEPS provided under section 95 to 102, section 6(3) of the Act respectively under which the impugned transaction (depreciation on the goodwill in a scheme of amalgamation) can be denied. But such provisions are not applicable for the year under consideration.
There is no dispute about the fact that the payment was made by the assessee to the shareholders of the amalgamating company in the form of shares and not through the cash payment. But the payment through the shares is a valid mode of payment.
As pertinent to note that scheme of the amalgamation can be approved under the provisions of section 2(1B) of the Act where shareholders holding not less than 75% in the value of shares of the amalgamating company become the shareholders of the amalgamated company. It is possible only when the shares are issued to the shareholders of the amalgamating company. Accordingly, we are not impressed with the finding of the AO that there was no cash payment for the acquisition of the goodwill by the assessee, rather it was recognized in the books of accounts by way of accounting entries. Thus, we hold that the impugned transaction cannot be regarded as colorable device merely on the reasoning that the assessee claimed the depreciation on the goodwill in the scheme of amalgamation.
There was an amendment to section 32, section 2(11) of the Act and other relevant sections of the Income Tax Act from the Finance Act 2021, effective from AY 2021-22. The amendment was brought into section 32 of the Act to exclude goodwill from depreciable assets.
As no depreciation is allowable on goodwill from the AY 2021-22 onwards. However, goodwill is not excluded from capital assets. The purpose of exclusion of goodwill from the depreciable assets is that it is seen that Goodwill, in general, is not a depreciable asset and in fact depending upon how the business runs; goodwill may see appreciation or in the alternative no depreciation to its value. Therefore, there may not be a justification of depreciation on goodwill. Accordingly, there is no need to provide for depreciation on goodwill of business/profession like other intangible assets or plant & machinery. But such an amendment is not applicable for the year under consideration.
Thus we reverse the order of the authorities below and direct the AO to allow the claim of the assessee for the depreciation on the impugned goodwill. Decided in favour of assessee.
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2023 (9) TMI 1438
Levy of service tax - Business Support service or not - whether appellant has not received any amount towards marketing agency agreement? - HELD THAT:- During the course of hearing of the Stay Petition by this Tribunal, a report was sought from the Commissioner, Jamshedpur to the effect that whether the appellant has received any amount towards marketing and consignment agency services and the said report has been submitted by the ld.Commissioner.
It is evident from the records and the reports submitted by the ld.Commissioner, Jamshedpur that the appellant has not received any amount towards marketing agency agreement, therefore, the question of demanding service tax does not arise.
There are no merit in the impugned order and the same is set aside - appeal allowed.
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2023 (9) TMI 1437
Murder - rarest of the rare case - case based on circumstantial evidence - principle of proof beyond reasonable doubt - HELD THAT:- A conspectus of the prosecution's case clearly reveals that it is poised entirely on circumstantial evidence as there was no eyewitness to the kidnapping and murder of Ajit Pal. In a case resting on circumstantial evidence, the prosecution must establish a chain of unbroken events unerringly pointing to the guilt of the Accused and none other.
The manner in which the police tailored their investigation, with complete indifference to the essential norms in proceeding against the Accused and in gathering evidence; leaving important leads unchecked and glossing over other leads that did not suit the story that they had conceived; and, ultimately, in failing to present a cogent, conceivable and fool-proof chain of events pointing to the guilt of the Appellants, with no possibility of any other hypothesis, leaves us with no option but to extend the benefit of doubt to the Appellants.
The higher principle of 'proof beyond reasonable doubt' and more so, in a case built on circumstantial evidence, would have to prevail and be given priority. It is high time, perhaps, that a consistent and dependable code of investigation is devised with a mandatory and detailed procedure for the police to implement and abide by during the course of their investigation so that the guilty do not walk free on technicalities, as they do in most cases in our country.
It is indeed perplexing that, despite the innumerable weak links and loopholes in the prosecution's case, the Trial Court as well as the High Court were not only inclined to accept the same at face value but went to the extent of imposing and sustaining capital punishment on Rajesh Yadav and Raja Yadav. No valid and acceptable reasons were put forth as to why this case qualified as the 'rarest of rare cases', warranting such drastic punishment. Per contra, we find that the yawning infirmities and gaps in the chain of circumstantial evidence in this case warrant acquittal of the Appellants by giving them the benefit of doubt. The degree of proof required to hold them guilty beyond reasonable doubt, on the strength of circumstantial evidence, is clearly not established.
The conviction and sentences of all the three Appellants on all counts are set aside - appeal allowed.
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2023 (9) TMI 1436
Denial of deduction claimed u/s 80P (2)(d) - interest earned from Cooperative Banks - HELD THAT:- Section 80P(2)(d) of the Act allows whole deduction of income by way of interest or dividend derived by Cooperative Society from its investments with any other co-operative society. This provision does not make any distinction with regard to the source of investment because this section envisages deduction in respect of any income derived by co-operative society from in his investment with a cooperative society. So, the Revenue is not required to look another of investment whether it was formed as required within time or otherwise.
As decided in The Kot Ram Dass Coop. Thrift & Credit Society Ltd. Jalandhar [2023 (6) TMI 871 - ITAT AMRITSAR] investment of assessee in cooperative bank is eligible investment u/s 80P(2)(d) of the Act. The interest of the said investment related to Cooperative Society; the assessee is eligible for deduction u/s 80P(2)(a)(i) of the Act. The addition amount is quashed. Decided in favour of assessee.
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2023 (9) TMI 1435
Validity of notice u/s 148 - Notice challenged on the ground that the same has been issued by the jurisdictional assessing officer and not by NFAC as required u/s 151A of the Income Tax Act, 1961 - As per detailed in office memorandum dated 20th February, 2023 being F No. 370153/7/2023-TPL issued by the CBDT section 144B of the Act lays down the role of NFAC and the units under it for the specific purpose of conduct of assessment proceedings in a specific case in a particular Assessment Year. This cannot be construed to be meaning that the JAO is bereft of the jurisdiction over a particular assessee or with respect to procedures not falling under the ambit of section 144B and since, section 144B of the Act does not provide for issuance of notice u/s 148 of the Act, there can be no ambiguity in the fact that the JAO still has the jurisdiction to issue notice u/s 148
HELD THAT:- Considering the facts and circumstances of the case and submissions of the parties and in view of the aforesaid circular of the Board, as find no merit in the writ petition.
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2023 (9) TMI 1434
Income taxable in India or not - FTS/FIS - payments received by the assessee from its Indian customers on account of Centralized Services - Fee for Technical Services as defined u/s 9(1)(vii) of the Income Tax Act, 1961 or “Fee for included services as defined under Article 12(4)(a) of the Indo-US DTAA - assessee is a non-resident company incorporated in ‘USA’ engaged in the business of providing various services to hotels in different countries across the world, including India - assessee claimed that the receipts from Indian Hotel owners towards centralized services, are in the nature of business profit and in absence of Permanent Establishment (‘PE’) in India are not taxable in terms of India – USA DTAA
HELD THAT:- We find, while deciding identical issue in assessee’s own case [2022 (7) TMI 781 - ITAT DELHI], after analyzing in detail the nature and character of receipts has held that they cannot be treated as FTS/FIS, either under the provisions of the Act or under the treaty provisions.
Thus we find no reason to interfere with the decision of learned first appellate authority in declaring the receipts from centralized services to be not in the nature of FTS/FIS. Decided against revenue.
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2023 (9) TMI 1433
Constitutional validity of Section 420 I.P.C.ultra vires on the vice of Article 14 & 21 of the Constitution of India - HELD THAT:- The impugned F.I.R. dated 15.04.2023 lodged at the instance of the Respondent No. 3 and the consequent registration of ECIR against the present petitioners is the subject matter of Criminal Misc. Writ Petition No. 10893 of 2023. The said writ petition has already been entertained and an interim protection has been granted to the petitioners therein. Though, a recall of the order dated 04.07.2023 passed by the Apex Court, which order forms one of the basis of our order, is stated to be pending, or for that matter a SLP is also stated to have been filed against our interim order dated 13.07.2023 passed in Criminal Misc. Writ Petition No. 10893 of 2023, there is no order staying the effect and operation of either of the orders. In such view of the matter, there are no justifiable ground to take a different view as taken while passing the order dated 13.07.2023.
List this case after six weeks along with connected matters.
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2023 (9) TMI 1432
Maintainability of revision - Entitlement to ownership and possession of the entire second Schedule property or only a one- sixth share therein - gift-deed dated 24.04.1982, was fraudulently obtained from Fathima Beevi and never acted upon or not - sale-deed dated 14.11.1990, executed by Fathima Beevi in favour of Plaintiff is valid or not - property described in the second Schedule belonged to Fathima Beevi on the basis of a Hiba executed by her father or not.
Whether a revision Under Section 115 of the Code of Civil Procedure is maintainable against an order of the subordinate Court rejecting on merits an application for review of an appealable decree passed in a civil suit?
HELD THAT:- Where the review is allowed and the decree/order under review is reversed or modified, such an order shall then be a composite order whereby the court not only vacates the earlier decree or order but simultaneous with such vacation of the earlier decree or order, passes another decree or order or modifies the one made earlier. The decree so vacated, reversed or modified is then the decree that is effective for the purposes of a further appeal, if any, maintainable under law. But where the review petition is dismissed, there is no question of any merger and anyone aggrieved by the decree or order of the Tribunal or Court shall have to challenge within the time stipulated by law, the original decree and not the order dismissing the review petition. Time taken by a party in diligently pursuing the remedy by way of review may in appropriate cases be excluded from consideration while condoning the delay in the filing of the appeal, but such exclusion or condonation would not imply that there is a merger of the original decree and the order dismissing the review petition.
Apart from above, there is another reason also for a revisional court not to entertain a revision against an order rejecting on merits an application for review of an appealable decree, which is, if the revisional court sets aside or modifies or alters a trial court's decree, the decree of the trial court would merge in the one passed by the revisional court. In consequence, the right of the party aggrieved by the trial court's decree to file an appeal would get affected.
In the instant case, the trial court, which had jurisdiction to allow or dismiss the review application, dismissed the review application on merits. If it had granted the review, the aggrieved party would have had a right to file an appeal Under Order XLIII Rule 1(w) read with Order XLVII Rule 7 of the Code of Civil Procedure. And if it had allowed the review and simultaneously altered/modified/reversed the decree, the aggrieved party would have had a right to file an appeal against the said decree. But, if the revisional court does the same, as has been done by the High Court while passing the impugned order, an anomalous situation would arise - if the revisional court's order is allowed to stand, owing to modification of the decree by the revisional court, to which in normal course an appeal would lie, the right of an appeal to the aggrieved party would get seriously prejudiced.
Where an appealable decree has been passed in a suit, no revision should be entertained Under Section 115 of the Code of Civil Procedure against an order rejecting on merits a review of that decree. The proper remedy for the party whose application for review of an appealable decree has been rejected on merits is to file an appeal against that decree and if, in the meantime, the appeal is rendered barred by time, the time spent in diligently pursuing the review application can be condoned by the Court to which an appeal is filed.
The revision of the Respondent against rejection of her application for review of an appealable decree ought not to have been entertained by the High Court. The impugned judgment and order of the High Court is set aside - The appeal is, therefore, allowed.
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2023 (9) TMI 1431
Condonation of delay of 12 days in filing appeal - sufficient cause for delay or not - HELD THAT:- The Appellant has to give sufficient cause in the Application which should inspire confidence in the Appellate Authority to condone the delay for not reaching the Appellate Authority within the prescribed period. In this regard, it would be relevant to refer to the averments made in the Application in which the Appellant has not stated as to how and why the delay has occurred in not filing the Appeal within the prescribed period of 30 days from the date of pronouncement of the Order dated 31st March, 2023 - As a matter of fact, the reason much less sufficient, for the purpose of condonation of delay is conspicuous by its absence, in the entire application. Therefore, there is nothing for this Tribunal to appreciate about the sufficient cause for not approaching the Appellate Authority within the time prescribed or even thereafter within the window of 15 days.
The period of 15 days cannot be extended and the Appellate Tribunal does not have jurisdiction to consider and condone the delay beyond the period of 15 days and in case the Appellate Authority is satisfied that there has been a sufficient cause for not filing the Appeal within the time prescribed or within the extended period, it can condone the delay and hear the matter on merits. Therefore, sufficient cause is the heart and soul of the application for condonation of delay which is totally missing in this Application.
The law is very strict so far as the proceedings under the Insolvency and Bankruptcy Code, 2016 is concerned as has been held by Hon'ble Supreme Court in the case of NATIONAL SPOT EXCHANGE LIMITED VERSUS MR. ANIL KOHLI, RESOLUTION PROFESSIONAL FOR DUNAR FOODS LIMITED [2021 (9) TMI 1156 - SUPREME COURT] in which it has been held that after the expiry of 15 days, the limitation cannot even be condoned under Article 142 of the Constitution of India. Having said that, in the absence of any averment made in the application for condonation of delay in regard to sufficient cause, we do not find any reason to condone the delay and the Application is thus hereby dismissed.
Application dismissed.
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2023 (9) TMI 1430
Condonation of delay of 14 days in filing appeal - sufficient reasons for delay or not - whether delay in filing the appeal has occurred due to the reason which was beyond the control of the Appellant? - HELD THAT:- On perusal of the statement made in the condonation of delay application we are satisfied that no such reason has been assigned. Moreover, once the appeal was filed belatedly, it was expected on the part of the appellant to bring on record certified copy of the order. However, in this case an exemption application has been filed. A lenient view is takenin the matter had on the first day when the main appeal was taken up, the appellant had requested for condonation of delay but to the reasons best known to the appellant consecutively on number of dates despite the fact that the appeal was taken up no submission was made that the appeal was filed belatedly.
Under Section 61of the I.B. Code, for filing an appeal limitation period is prescribed as 30 days and thereafter in further 15 days if the parties are in position to satisfy the court that there was sufficient plausible reason for non filing of appeal within said period the court can condone the delay but only within extended period of 15 days.
However, considering the ground set forth in the application as well as none disclosure by the Appellant to the Court regarding filing of the condonation of delay application on number of dates, it is not inclined to entertain the condonation of delay application - the condonation of delay application stands dismissed.
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2023 (9) TMI 1429
Adjustment of Demand with the Refund while objections were pending - Refund the amounts claimed along with interest as per the return which was submitted by the petitioner for the first quarter of Financial Year 2016-2017 - deeming fiction as envisaged u/s 74(9) had come into play or not on the failure of the OHA to make the decision against the objections of 2010-11 within a period of 15 days form the service of notice in DVAT-41 - HELD THAT:- In the case of FLIPKART INDIA PRIVATE LIMITED VERSUS VALUE ADDED TAX OFFICER, WARD 300 & ORS. [2023 (8) TMI 987 - DELHI HIGH COURT] it was held that where a refund is claimed and stands embedded in the self-assessment form which is submitted, the respondents are liable to release the amount as claimed within two months from the date when the return is furnished in a situation where the assessee submits return on a quarterly basis. Undisputedly it is the provisions of Section 38(3)(a)(ii) of the Act which apply to the petitioner here.
The ambit of Section 38(2) of the Act is explained and it is held that an adjustment against a refund claim could only be made in respect of a tax demand which is “due” and “enforceable”. On a conjoint reading of the said provision along with Section 35(2) of the Act, it is concluded that till such time as objections are pending before the OHA, the tax demand cannot be said to have “crystalised” so as to be adjusted against the refund as claimed.
In the facts of the present case it is found that not only have adjustments been made contrary to the mandate of Section 38 of the Act, the demand as raised for FY 2010-2011 and which has been adjusted against the refund as claimed is additionally liable to be set aside on grounds resting on the provisions contained in Section 74 of the Act.
The position which therefore emerges is that not only would the Hearing Notice of 24 May 2022 be rendered unsustainable in law, even the adjustments which have been made in the Refund Order of 29 April 2022 would be contrary to the provisions of the Act. It is concluded that since it is manifest that insofar as the demand for FY 2010-2011 is concerned, the objections would be deemed to have been accepted and granted by the Commissioner upon the expiry of 15 days when computed from 04 May 2022. The demand as created in terms of the assessment order as framed would thus clearly not survive - as a consequence of which the Commissioner would stand denuded of the jurisdiction to adjudicate upon those objections once the statutory fiction comes into effect. Section 74(9) in that sense not only accords a closure but commands to hold that the objections preferred by the assessee would be deemed to have been accepted.
Turning then to the adjustments which have been made with respect to the demand for the first quarter of FY 2017-2018, the respondents do not dispute that the objections tendered by the petitioner before the OHA remain pending on its board. The demand for the first quarter of FY 2017-2018 is clearly rendered unenforceable and could not have been adjusted against the refund as claimed by the petitioner for the first quarter of FY 2016-2017. This aspect is clearly covered by the decision in Flipkart.
The instant writ petitions is allowed and the Hearing Notice dated 24 May 2022 is quashed. The Refund Order of 29 April 2022 shall for reasons aforenoted stand set aside to the extent that it adjusts an amount of Rs. 13,60,14,547/-.
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2023 (9) TMI 1428
Disallowance u/s 14A r.w.r. 8D - dividend from shares/units of mutual funds is subjected to tax in the hence of the payer under section 115 – O/115 – R of the act - treatment to expense or interest made out of tonnage tax income computation - HELD THAT:- We find that identical issue arose in the case of the assessee for assessment year 2009 – 10 [2023 (9) TMI 1427 - ITAT MUMBAI] wherein held grounds of appeal concerning disallowance u/s 14 A rwr 8 D while computing normal computation of income to the file of the ld AO, assessee is directed to submit revised computation before AO, AO may examine the same and following our above directions and finding recompute the disallowance by :-
i. No disallowance of expense or interest should be made out of tonnage tax income computation
ii. As there is no interest expenditure liable for a disallowance as the own funds consisting of the share capital and reserves, are far more than the aggregate value of investments held by the company. No Interest disallowance should be made.
iii. The administrative expenses cannot exceed the actual expenditure incurred.
iv. Those investments on which no exempt dividend income was received by the Appellant during the year are to be excluded while computing the disallowance under Rule 8D(2)(iii).
MAT computation for addition u/s 14A - Both the lower authorities are not correct in holding that the disallowance made under Section 14A of the Act under the normal computation of income is also required to be added back for computing book profits under section 115JB of the Act. This issue is covered in favour of the assessee by the decision of Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein it was held that the computation under clause (f) of Explanation 1 to Section 115JB(2) is to be made without resorting to the computation as contemplated under Section 14A read with Rule 8D of the Income-tax Rules, 1962.
Non-granting of tax deduction at source credit - After hearing the parties we direct the learned assessing officer to verify the availability of the credit to the assessee and if it is found in accordance with the law, grant the same. Accordingly, ground number 9 of the appeal is allowed with above direction.
TP Adjustment - determination of the arm’s-length price of the financial guarantee given by the assessee to its associated enterprises - adjustment is with respect to 1.15% as guarantee fees made by the assessee on its own - HELD THAT:- We find that the issue in this ground is identical to the ground of the appeal of the assessee for assessment year 2009 – 10 [2023 (9) TMI 1427 - ITAT MUMBAI] wherein we have held that assessee has adopted the internal cup and taken the average of the guarantee fee is charged by the bankers from the assessee. We find that the issue is of benchmarking with respect to the corporate guarantee fee is corporate guarantee issued by the assessee to associated enterprises which is quite different then the bank guarantees. Perhaps the bank guarantee rates adopted by the assessee are the highest rates by which the ALP is determined. For assessment year 2009 – 10 we have already upheld 0.55% being the arm’s-length price of the guarantee issued by the assessee to its associated enterprises.
For this year, the assessee has computed ALP at the rate of 1.15% on its own. Therefore, we have no hesitation in upholding that the guarantee commission rate adopted by the assessee is at arm’s-length price. Accordingly, ground of the appeal is allowed.
Performance guarantee given by the assessee on behalf of the associated enterprises - Assessee has not charged any guarantee fees and not disallowed any sum on this account - AO after the direction of the learned dispute resolution panel has computed 1% guarantee fee commission as arm’s-length price of such performance guarantee - HELD THAT:- While deciding that ground of appeal, the coordinate bench in assessment year 2009 – 10 [2023 (9) TMI 1427 - ITAT MUMBAI] has held that performance financial guarantee is equivalent to the financial guarantee only and is and international transaction and therefore it needs to be benchmarked. Coordinate bench has Set-aside the issue back to the file of the learned assessing officer with a direction to the assessee to benchmark the international transaction of performance guarantee and the learned AO/TPO was directed to examine the arm’s-length price. Accordingly, ground of this appeal are also set-aside to the file of the learned assessing officer with similar direction.
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