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Showing 281 to 300 of 1557 Records
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2025 (1) TMI 1278
Disallowance being sales promotion expenses - HELD THAT:-Assessee had acquired a new unit and the expenditure was incurred for which bills related to sales promotion expenditure were filed before the Ld. CIT(A) and the same was allowable as the business expenditure u/s 37(1).
CIT(A) did not allow the expenditure as no details of the unit acquired nor other details were filed. Since the details of the unit acquired have been filed before us, the expenditure relates to 10.01.2010 while the unit was acquired on 14.08.2009 and the bills have been filed, hence the expenditure claimed is allowed as a deduction u/s 37(1) of the Act being in the nature of sales promotion expenses. Decided in favour of assessee.
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2025 (1) TMI 1277
TDS u/s 195 - Non-Deduction of tax on foreign payments - assessee has argued that the foreign associates are predominantly individuals and in some cases are body corporate and these services rendered are either professional services or business profit as per respective DTAA - HELD THAT:- Though, the AO in the order has observed that if the relevant DTAA provides the clause of independent personal services which includes legal services, the assessee is eligible to available the benefit. However, he has considered entire amount paid as fee for technical services and levied tax to be deducted and interest u/s. 201(1A) without examining the relevant DTAA.
As relying on Sri Subhatosh Majumder [2015 (11) TMI 1544 - ITAT KOLKATA] we direct the A.O to examine the assessee’s plea that payments were non taxable in India because of the beneficial provisions of the DTAAs with respective countries. The A.O shall grant adequate opportunity of being heard to the assessee and will also permit him to furnish necessary documents and evidences in support of his claim. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
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2025 (1) TMI 1276
Addition relatable to 12 creditors - assessee could not explain the sources of loan - as argued assessee has discharged her onus by providing the PANs, that the entire transactions were carried through the Banking Channels including repayment - HELD THAT:-Onus was on assessee to establish the creditworthiness of the loan creditors and the assessee has failed to file sufficient documentary evidences, in this regard, to the satisfaction of lower authorities. Further, it would make no difference whether the amounts are received in cash or through banking channel.
The provisions of Sec.68 would still be attracted to the assessee in both the cases. In fact, the assessee is debarred from accepting loans in cash beyond specified limits as laid down u/s 269SS.
Therefore, these arguments stand rejected. Considering the fact that the assessee has failed to discharge the onus of establishing the creditworthiness of the 12 parties, we provide another opportunity to the assessee to substantiate the same before Ld. AO. Accordingly, the issue of impugned addition stand restored back to the file of Ld. AO for fresh consideration with a direction to the assessee to substantiate the loan creditors. Appeal stand allowed for statistical purposes.
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2025 (1) TMI 1275
Unexplained cash deposits in the bank account - cash sales of the Assessee for the year under consideration were higher than that of earlier assessment year - Assessee explained that the cash deposits were out of sale proceeds of the Assessee - HELD THAT:-Assessee has explained that the Assessee during the year, was a trader of artificial goods and flowers. That during the year, the Assessee decided to stop its business. Assessee, therefore, sold its opening stock at discounted rates resulting into higher sales during the year under consideration as compared to the earlier years.
Assessee has further submitted that there is no rebuttal to the fact on the file that the Assessee was having opening stock out of which the said sales were made. That the Sales tax / VAT Return were also filed by the Assessee.
No justification on the part of the lower authorities in treating the deposits made by the Assessee out of the sales of the opening stock as income from undisclosed sales. Decided in favour of assessee.
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2025 (1) TMI 1274
Applicability of transfer pricing provisions to the transactions between an enterprise and its Permanent Establishment (“PE”) - Whether or not the transactions between an enterprise and its foreign permanent establishment can be considered international transactions for the purpose of section 92B, and accordingly can be subjected to the ‘arm’s length price’ adjustment? - HELD THAT:- The ultimate aim of Chapter -X of the Act is to determine the arm's length price of the transaction. The methods prescribed are only the means of achieving the object of the ALP determination. The purpose of transfer pricing provisions is to achieve reasonable, fair and equitable profits and tax in India.
The above view is also echoed by the Hon’ble Supreme Court in Morgan Stanley & Co [2007 (7) TMI 201 - SUPREME COURT] wherein observed that the object behind enactment of transfer pricing regulations is to prevent shifting of profits outside India.
The transfer pricing provisions need to be interpreted keeping in mind the above objective of fair and equitable tax allocation. In the instant case, the PO has undertaken onshore services on behalf of HO and incurred substantial losses in executing such services.
Whether unrelated party would have taken up the obligation of rendering onshore services, which at the threshold itself result in loss? - As per section 92B(1), to qualify as international transaction, atleast one party should be non- resident. The residential status of the branch is that of its head office. In case of Indian enterprise and its foreign PE, both are residents in India. Thus, the condition that at least one party should be non-resident does not get fulfilled in the case of Indian enterprise and its foreign branch.
However, in the case of foreign enterprise and its Indian branch, both parties are non-residents. Thus, the condition of section 92B(1) of the Act that atleast one party should be non- resident gets satisfied in the case of foreign enterprise and its Indian branch.
Whether PE a Separate Enterprise? - PE in India of a foreign enterprise, Article 7(2) provides that profits, which the PE might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities shall be attributed to India. So, PE has to be treated as a distinct and separate enterprise. So even if profit attribution has to be done as per treaty, PE has to be treated as a distinct and separate enterprise from the HO. Therefore, even under the tax treaty, the PE is a separate enterprise.
Since, PE is a separate enterprise from the HO for the purpose of transfer pricing provisions, the decisions relied by the learned AR to contend that one cannot generate income by dealing with self are not applicable in given context. The transfer pricing provisions are applicable to transactions between two enterprises and not between two persons. Thus, decisions in the case of Sir Kikabhai Premchand [1953 (10) TMI 5 - SUPREME COURT] Betts Huett & Co Ltd [1978 (4) TMI 58 - CALCUTTA HIGH COURT] & Sumitomo Mitsui Banking Corporation [2012 (4) TMI 80 - ITAT MUMBAI] are not applicable in the context of transfer pricing.
Income arising from International Transactions - AR has contended that there is no income arising out of international transactions in the current case as there is only fund movement between HO and PE and actual transactions are between PE and third parties - Section 92 of the Act brings income arising from international transaction within the ambit of transfer pricing provisions. The international transaction is between the associated enterprises. So as a first step one needs to evaluate whether there are two enterprises and such enterprises qualify as associated enterprises u/s 92A of the Act. Such AE's should have entered into international transactions satisfying the test of either u/s 92B(1) or 92B(2) of the Act. Such international transaction should give rise to income which is within the taxing ambit of charging provisions of the Act.
In our view, PO and HO are separate enterprise. Further as per Article 7(2) of the India-China DTA A and para 15, 16 & 17 of the commentary on Article 7 on Model tax convention published by OECD in 2010 also states that permanent establishment is to be treated as a functionally separate entity. PO and HO have transaction between them which has an impact on 'income'. Both are non-residents and thus satisfy the basic test of section 92B of the Act. Whether they qualify as AEs within the meaning of section 92A is discussed below.
Associated Enterprise - AR submitted that the TPO has erred in concluding that PO and HO are 'associated enterprise' merely by evaluating section 92A(1) - Transaction between an enterprise and an unrelated person should have been influenced by the associated enterprise of the first party having an arrangement or agreement with the unrelated party. The associated enterprise and the unrelated person can be said to have exercised influence over the transaction in question, if the terms of such transaction would have been different but for such influence. Therefore, where the associated enterprise and the unrelated person have not been able to influence the specific transaction between an enterprise and the unrelated person, section 92B(2) of the Act does not have any application. The influence to attract section 92B(2) of the Act can take two forms. Firstly, it can be in the form of a prior agreement in relation to the transaction in question (between the associated enterprise and the unrelated person). Secondly, the terms of the transaction have to be in substance determined by the associate enterprise and the unrelated party. It is possible that these two forms may be satisfied in a fit case.
DTAA v Act - PE of a foreign enterprise in India, the Article 7(2) provides that profits that will be attributed to PE shall be profits which the PE might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a PE.
Article 7(2) of the India China DTAA leads to the conclusion that determination of profits under the hypothesis of the PE being a distinct and separate enterprise, dealing wholly independently with the enterprise of which it is a PE, is nothing but adherence with the arm's length principles. The underlying philosophy of TP provisions and Article 7(2) is same wherein both try to analyse as to how third parties would have dealt with each other under uncontrolled conditions. Thus, contention of the learned AR that there is conflict between Article 9 of the DTAA and domestic TP provisions is rejected.
We are of the view that the transaction between foreign enterprise and its PE in India can be considered as an international transaction and be subject to ALP adjustment. The matter may be placed before the Division Bench to give effect to the direction of this Order
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2025 (1) TMI 1273
Status of the Appellant is a Non-Resident Indian and not a Resident of India - Period of stay in India - interpretation of the provisions of DTAA and section 6 of the Act defining the residential status of assessee - HELD THAT:- According to second condition if assessee has remained in India in last four years for more than 365 days and in relevant previous year for more than 182 days, then only shall be treated as non-resident
Assessee submitted that in relevant previous year, he was in India for 132 days only which is less than 182 days and therefore, assessee is not resident as per either of the conditions of section 6(1) of the Act. The assessee has filed evidence in support of employment outside India and also filed visit passes.
In view of the evidences filed before us, we feel it appropriate to restore this issue back to the file of the Assessing Officer for verification of residential status of Singapore as well non-residential state in India particularly in view of the Explanation 1 to section 6(1)(c) of the Act and decide the issue in accordance with law. The grounds Nos. 1 to 3 of the appeal of the assessee are accordingly allowed for statistical purposes.
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2025 (1) TMI 1272
Addition u/s 69A - cash deposited in bank account out of sale proceeds which stood recorded in the books of account and credited to profit & loss account - HELD THAT:- Sales made by the assessee and shown in the regular books of account have been accepted as such by VAT authorities while framing the VAT assessment; that the assessee was having sufficient stock in hand for making the impugned sales during the demonetization period and that it is not the case of the AO that the assessee has shown bogus purchases to show bogus sales to cover up cash deposited during the demonetization period.
We hold that the CIT(A) decision in infirm and perverse to the facts on record in confirming the addition u/s 69A. Accordingly, the addition made by invoking provisions of section 69A of the Act is held to be illegal and bad in law and as such, same is deleted.
Applicability of the tax rate as per provisions of section 115BBE also stand rejected, accordingly. Decided in favour of assessee.
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2025 (1) TMI 1271
Jurisdiction - power of Additional Director General, DRI to issue SCN - Confiscation of goods - rejection of declared value - it was held by CESTAT that 'the Additional Director General, DRI did not have the jurisdiction to issue the show cause notice.'
HELD THAT:- The proceedings are now remitted back to the Customs, Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkata.
Appeal disposed off.
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2025 (1) TMI 1270
Revocation of Custome Broker License - forefeiture of security deposit - levy of penalty - violation of Regulation 11(n) and Regulation 17(9) of the Customs Brokers Licensing Regulations, 2013 - HELD THAT:- The reasoning given by the CESTAT is that the KYC documents were duly submitted by the Respondent herein. However, the Department’s case is that the Respondent did not explain as to how it had obtained the said KYC documents. Hence, there were serious irregularities in the conduct of its business by the Respondent.
In the opinion of this Court, since the requisite KYC documents had been submitted by the Respondent and the main irregularity was in respect of the exporter Shri. Rakesh Gupta, proprietor of M/s. U.P. Garments, whose Importer Exporter Code (hereinafter “IEC”) had been misused by other exporters in conspiracy with each other, the Respondent’s Customs Broker license cannot be cancelled for perpetuity. The Respondent has already suffered severe consequences due to the cancellation of the said license for several months.
Conclusion - The Court is of the opinion that the impugned Final Order does not warrant any interference. Moreover, it is noted that the CESTAT also records that there is no ground set out in the Order-in-Original as to how the Respondent had violated the requirement of declaration under Regulation 17 (9) of the Customs Brokers Licensing Regulations, 2013.
The Court is of the view that there is no substantial question of law that has arisen in the present appeal - Appeal dismissed.
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2025 (1) TMI 1269
Power of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) to condone the delay in filing the appeal - sufficient cause was made for not presenting the appeal within the said period - import of provisions of Section 129(a) of the Customs Act to condone the delay in filing the appeal under Section 128 of the Customs Act.
HELD THAT:- There is nothing untoward in the order of the Commissioner of Customs (Appeals) dated 13.10.2008 dismissing the appeal on the ground of delay, as the Appellate Commissioner does not have the power to condone delay beyond 30 days. However, the second appeal before the CESTAT also met with the same fate, even though it was filed within the statutory time limit.
The CESTAT ought to have looked into the matter on merits as the reasons for condonation of delay before the Commissioner are compelling. The Appellant’s representation before the third respondent had been made on 22.08.2007 and admittedly, no orders have been passed thereupon. Hence, it is quite possible and plausible, that the appellant might have been awaiting orders on the representation which delayed the filing of the statutory appeal. The impugned order of the CESTAT has taken note of none of the aforesaid parameters and has cursorily closed the appeal.
The substantial questions of law that are admitted touch upon the aspect of limitation alone - the question of exemption must also be addressed which, stands fully covered by the order of the CESTAT, Bangalore dated 10.05.2006 [2006 (5) TMI 371 - CESTAT, BANGALORE], in favour of the Appellant.
Conclusion - The substantial questions of law regarding the limitation were answered in favor of the appellant.
Appeal allowed.
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2025 (1) TMI 1268
Levy of penalty u/s 114 of the Customs Act, 1962 - attempted export of prohibited items, specifically red sand/armature shaft - case of petitioner is that the petitioner has no direct role to play in the alleged export of red sand/armature shaft and that the petitioner has been made a scape goat - HELD THAT:- Even if the role of the petitioner in the alleged illegal export of red sand/armature shaft is confirmed, the imposition of penalty of Rs. 2/- Crores, on a Senior Manager cannot be countenanced as it appears to be disproportionate with the gains that the petitioner would have made from the alleged involvement in the export of red sand/armature shaft. Therefore, the impugned order is set aside insofar as imposition of penalty under Section 114 of the Customs Act, 1962 on the petitioner and the case is remitted back to the respondent to pass a fresh order on merits taking note of the financial position of the petitioner and the purported gain the petitioner would have made from the alleged involvement in the export of the contraband goods. This exercise shall be carried out by the respondent within a period of three (3) months from the date of receipt of copy of this order.
Petition disposed off by way of remand.
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2025 (1) TMI 1267
Absolute confiscation - penalties - smuggling of 2 kgs. of gold - discharge of burden of proof under Section 123 of the Customs Act, 1962 - HELD THAT:- The gold recovered from Md.Sajid Kamal Mondal has been absolutely confiscated on the premises that the invoices produced by the appellant, Rahul Harichandra Pawar are found to be correct, since the goods were handed over to Md.Sajid Kamal Mondal without any documents and the same casts serious doubt about legality of the same. Upon presumption that a genuine businessman could have issued proper challan for interstate movement of such high value goods. Therefore, he has held that as the person who has apprehended that the appellant has failed to discharge his burden of proof under Section 123 of the Customs Act, 1962 and ordered for absolutely confiscation of the gold in question.
Admittedly, in this case, there is no marking of foreign origin on the gold nor it is the case of interception at Port or Airport or any International Border. Further, the purity of seized gold is found between 994.2 to 996.9. In that circumstances, the appellants are able to discharge his burden of proof under Section 123 of the Customs Act, 1962 for acquisition of the said gold in question. Further, the Revenue has failed to discharge their onus of reasons to believe that the gold in question is smuggled in nature.
Conclusion - The appellants are able to discharge his burden of proof under Section 123 of the Customs Act, 1962 for acquisition of the said gold in question. 2 kgs. gold recovered from Md.Sajid Kamal Mondal, belongs to Rahul Harichandra Pawar, cannot be absolutely confiscated. Accordingly, the absolute confiscation of the gold is set aside. Consequently, no penalties are imposed on both the appellants.
Appeal disposed off.
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2025 (1) TMI 1266
Fresh valuation of shares of The Learning Internet Inc. held by EAPPL ordered by the Adjudicating Authority - scope of the Adjudicating Authority in directing fresh valuation - assets of the subsidiary company are different from the assets of the holding company or not - preservation of values of shares of EAPPL by Resolution Professional - No reasoning for under valuation has been recorded - three valuation reports quoted by the Respondent No. 1 to justify the revaluation.
Whether the Adjudicating Authority could have passed the directions to the Respondent No 2 to approach the IBBI for appointment of valuers for valuation of shares The Learning Internet Inc. based on the alleged under valuation of shares by the Respondent No. 1?
HELD THAT:- The Adjudicating Authority has rightly held that in terms of the Code and the Regulation, the Corporate Debtor and its subsidiary are two legally distinct entities. It has also been correctly held that the assets of the subsidiary company cannot be treated as part of the assets of the Corporate Debtor. The Adjudicating Authority further rightly held that it is not the duty of the Respondent No. 2 to preserve the assets of the subsidiary company which are not under control of the Corporate Debtor or which are not part of estate of the Corporate Debtor. The Adjudicating Authority has also not found anything wrong in the selling of the shares of The Learning Internet Inc. - However, the Adjudicating Authority has held that the Respondent No. 1 being the corporate guarantor of the principal borrower i.e., EAPPL (subsidiary of the Corporate Debtor) has right to protect its interest in corporate guarantee and therefore the Respondent No. 1 can take certain step to protect himself to reduce risk of standing as guarantor to EAPPL.
The Respondent No. 1 aggrieved due to alleged under valuation shares of The Learning Internet Inc., could have approached the liquidators or could have invoked the suitable jurisdiction, if any, in accordance with the relevant insolvency law of the Singapore before the High Court of Singapore, which he has not done as confirmed by the Respondent No. 1 in reply put by this Appellate Tribunal to Respondent No. 1 during the pleadings - it does not give any right to the Respondent No. 1 to approach the Adjudicating Authority on this issue and without any doubt, the Adjudicating Authority did not has any jurisdiction to give such directions w.r.t. fresh valuation in this regard as contained in Para 27 of the Impugned Order.
The valuations were done at different time periods and in different context on different issues and we are, therefore, of opinion that such valuation reports could not have been relied upon by the Adjudicating Authority. In any case such valuation reports were done long back in 2008 and 2014-2021 which would have been conducted based on the estimates and future projections relevant at that times and cannot be relied upon now.
Regulation 21A of the Liquidation Regulations has no applicability in the present Company Petition which is for insolvency proceeding of the Corporate Debtor.
Conclusion - The assets of a subsidiary cannot be treated as assets of the holding company in insolvency proceedings. The moratorium under the IBC applies only to the assets of the Corporate Debtor. The NCLT's directive for a fresh valuation of shares set aside, stating that it was beyond the scope of its jurisdiction.
The impugned order set aside - appeal allowed.
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2025 (1) TMI 1265
Seeking grant of Regular Bail after prolonged incarceration - Money Laundering - twin conditions as contemplated under Section 45 of the PMLA or not - Section 439 of the Code of Criminal Procedure, 1973, read with Sections 45 and 65 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Supreme Court in the case of Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)], considered the applicability of Section 436A of the Cr. P. C. which is concerning the maximum punishment for which an under trial prisoner can be detained, held that Section 436A of the Cr. P .C. has come into effect on 23.06.2006 and the said provision is the subsequent law enacted by the Parliament and the same will prevail and will apply in spite of rigors of Section 45 of the PMLA Act.
As per the settled legal position whereas at commencement of proceedings, the courts are expected to appreciate the legislative policy against grant of bail as enacted under Section 45 of the PMLA Act, but the rigours of such provisions will melt down where there is no likelihood of trial being completed within a reasonable time and the period of incarceration already undergone has exceeded a substantial part of the prescribed sentence - Thus, inspite of restrictive statutory provisions like Section 45 of the PMLA Act, the right of the accused undertrial under Article 21 of the Constitution of India cannot be allowed to be infringed. In such a situation, statutory restrictions will not come in the way of the Court to grant bail to protect the fundamental right of the accused under Article 21 of the Constitution of India.
It is an admitted position that both the cases will be tried simultaneously and trial has not yet commenced. Thus, this is a case where the trial is unlikely to conclude any time soon and is likely to take a considerably long time. As noted hereinabove, the Applicant has completed more than half of the punishment. The maximum punishment which can be imposed on the Applicant is 7 years and the Applicant has completed about 3 years and 10 months of imprisonment i.e. more than half of the punishment - the Applicant is entitled to the benefit of Section 436A of the CrPC.
Conclusion - i) The applicant is granted bail with a personal bond of Rs. 10,00,000/- and sureties. ii) The applicant is restricted from entering District Pune except for trial-related purposes. iii) The applicant must report to the Enforcement Directorate's Mumbai office twice a month. iv) The applicant must not tamper with evidence or influence witnesses. v) The applicant must surrender his passport and attend the trial regularly.
The Applicant – Anil Shivajirao Bhosale be released on bail in connection with ECIR No. ECIR/MBZO-II/20/2020 registered with the Enforcement Directorate on his furnishing P. R. Bond of Rs. 10,00,000/- with one or two solvent sureties in the like amount and subject to fulfilment of conditions imposed - bail application allowed.
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2025 (1) TMI 1264
Money Laundering - challenge to provisional attachment order - large scale illegal extortion punishable under section 384 read with 120 B of IPC - Non application of mind by the Adjudicating Authority - Absence of predicate offence - No nexus between the appellant and alleged proceeds of crime - appellants are bonafide purchaser of the property attached by the respondents - Absence of reasons to believe in the SCN.
Absence of predicate offence - HELD THAT:- The Apex Court in Sunil Kumar Agarwal [2024 (5) TMI 1346 - SC ORDER] found that the petitioner has already undergone incarceration for a period of 1 year and 7 months and was otherwise not named in the FIR, but without expressing any opinion on the issue, the interim bail was granted. The efforts of the appellant is to mis-lead the Tribunal by giving an impression of an order of the Apex Court to hold that the predicate offence does not exist and thus the proceedings under PMLA is not tenable. The written arguments also make a reference of it.
The perusal of the order for grant of the bail to the accused would reveal it to be on the ground of long period of incarceration in violation of Article 21 of the Constitution. The bail was granted on that ground. It was with the clarification that observation made in the order is for the purpose of grant of bail and not to have any effect on the merit of the complaint. There are no judgement of the Apex Court in favour of the appellant rather detailed judgement of the Supreme Court in the case of Saumya Chaurasia [2023 (12) TMI 685 - SUPREME COURT] holds it to be a case of schedule offence.
No nexus between the appellant and the alleged proceeds of crime - HELD THAT:- In the instant case, the syndicate of Suryakant Tiwari has not extorted money overnight but during the period of its operation which was started much prior to the registration of the FIR. It is otherwise settled law of the land that the properties acquired prior to the commission of the crime can also be made subject matter of the attachment if the proceeds are not available or vanished - The appellant may have acquired the property prior to the registration of the FIR but period of operation of crime started much prior to the registration of the FIR and otherwise if the proceeds has been vanished or siphoned off, the property of the equivalent value can be attached. It is otherwise submitted that appellants have been named for commission of the offence under the Act of 2002.
Appellants are bonafide purchaser of the property - HELD THAT:- The appellants have failed to disclose the source to acquire the cash used for acquisition of the properties and illustratively we may refer to 52 properties acquired by M/s. Indermani Minerals (India Pvt. Ltd.),showing it to be through bank channels and based on their financial condition - The statement recorded under section 50 of the Act of 2002 coupled with the documents seized from the custody of Suryakant Tiwari are sufficient to show layering of proceeds of crime and to channelize the same, immovable properties were purchased. The appellant Company has not purchased one or two properties, rather purchased as many as 52 properties without showing the source and document to prove it. In the appeal filed by them, even the Income Tax Return for financial year 2022-2023 was not enclosed. It was submitted later without showing its relevance for purchase of properties prior to it.
It is found that merely using the banking channel for purchase of the property by layering the money with deposit of cash in the Bank without disclosing the source with the material and proof, the source would not stand proved.
Absence of reason to believe - HELD THAT:- The appellants submits that no reasons to believe was given by the Adjudicating Authority while issuing show cause notice. It should have been for each appellant separately - There are no contest on the aforesaid before the Adjudicating Authority, otherwise it has given reasons to believe for issuance of notice. It is not necessary that for the show cause notice, it should be against the person committing the offence under section 3 of the Act of 2002, but can be against the person in possession of crime proceeds. It is not necessary to give reasons to believe separately but can be for the noticee together. The appellants are either the accused or in possession of proceeds of crime and has been indicated in the show cause notice.
The appellants are victims of extortion - HELD THAT:- The appellants are victims of extortion because they were involved in transportation of the coal and thereby had to pay Rs. 25/- per ton to the main accused. The argument aforesaid has been raised specifically in the appeal preferred by M/s. Indermani Minerals (India Pvt. Ltd.),. This argument endorsed the case of the respondents where serious allegations have been made against syndicate headed by Suryakant Tiwari for extortion of money and if the appellant was also victim, it could not be clarified as to why it did not register an FIR against the accused.
Conclusion - The appellants failed to provide credible evidence to substantiate their claims of bona fide acquisition and the absence of a nexus with the proceeds of crime. The existence of a predicate offence and the nexus between the appellants and the proceeds of crime is reaffirmed. The confirmation of the provisional attachment order upheld.
Appeal dismissed.
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2025 (1) TMI 1263
Challenge to action of the designated committee formed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) by issuing Form No. SVLDRS-3 dated 04.12.2019 - petitioner's case falls under the "arrears" category or the "litigation" category under SVLDRS - recovery of service tax with interest - non-payment of service tax under ‘Construction Service in respect of Commercial and Industrial Building and Civil Structure’ during the period from April 2014 to June 2017.
HELD THAT:- Considering the provisions of the SVLDRS, it is apparent and crystal clear that the case of the petitioner would fall in the category of “amount in arrears” as admittedly the petitioner has not preferred any appeal before 30.06.2019 challenging the Order-in-original and the demand raised in the Order-in-original amounting to Rs. 32,27,856/-has achieved finality so far as the petitioner is concerned and accordingly, the petitioner would be entitled to the benefit of the SVLDRS which has a basic feature of reducing the disputes and create an atmosphere of trust between the assessee and the respondent-department.
However, in the facts of the case it appears that, the designated committee, contrary to the provision of the SVLDRS and with total non-application of mind has issued Form SVLDRS-2 and without taking into consideration reply of the petitioner 29.11.2019 has issued Form SVLDRS-3 in a mechanical manner. The petitioner has been vigilant to challenge such SVLDRS-3 immediately by preferring this petition and this Court has directed the petitioner to deposit 60% of the tax arrears amounting to Rs. 31,32,551.60 which petitioner has already deposited.
Therefore, in the facts of the case, when there was no appeal pending filed by the petitioner, the amount of demand raised in the Order-in-original would become the tax dues being the amount in arrears as per clause (e) of section 123 of SVLDRS and accordingly, the petitioner is entitled to get the benefit of the provision of section 124 of the SVLDRS by paying 60% of the amount in arrears as tax dues which the petitioner has already deposited.
Conclusion - i) The petitioner's case is categorized under "amount in arrears" as per Section 121(c) and Section 123(e) of the SVLDRS. ii) The petitioner is entitled to the relief of paying 60% of the tax dues, having already deposited the amount. iii) The designated committee's issuance of Form SVLDRS-3 demanding a higher amount was incorrect and is set aside.
Petition allowed.
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2025 (1) TMI 1262
Levy of service tax - Business Support Service - cost sharing among the group Companies - Demand of service tax on the differential value of Profit & Loss Account and ST-3 returns - Recovery of ineligible CENVAT Credit - Extended period of limitation.
Levy of service tax - Business Support Service - cost sharing among the group Companies - HELD THAT:- The appellant incurred expenditure on behalf of the group companies and such expenditure has been shared among the group Companies at the ratio agreed in the agreement dated 01-04-2008. It is observed that there is no service element involved in this case. Thus, we find that in these circumstances, the demand of service tax under the category of 'Business Support Service' is not sustainable. We find that the issue is no more res integra as the demand of Service Tax on cost sharing is settled by the decision of the Hon’ble Supreme Court in M/S GUJARAT STATE FERTILIZERS & CHEMICALS LTD. & ANOTHER VERSUS COMMISSIONER OF CENTRAL EXCISE [2016 (12) TMI 103 - SUPREME COURT], wherein, it has been held that demand of Service Tax on cost sharing is not sustainable - the demand confirmed in the impugned order under the category of 'Business Support Service' is not sustainable.
Demand of service tax on the differential value of Profit & Loss Account and ST-3 returns - HELD THAT:- The ld. adjudicating authority has not given any finding regarding the liability of service tax on the differential value. It is the settled position of law that demand of Service Tax cannot be confirmed merely on the ground that there is a difference in the value of Profit & Loss Account and ST-3 returns. This issue is covered by the decision of Tribunal, Kolkata in the case of M/S BALAJEE MACHINERY VERSUS COMMISSIONER OF CGST & EXCISE, PATNA II [2022 (8) TMI 704 - CESTAT KOLKATA] where it was held that 'Since the records have been duly audited, the demand cannot be raised for the same period on account of change in the opinion. Further, we find that the Appellant had duly submitted the VAT Returns which have been recorded by the Ld. Commissioner in the impugned order.' - the demand of service tax of Rs.88,051/-, confirmed merely on the basis of the differential value between the Profit & Loss Account and ST-3 returns is not sustainable.
Recovery of ineligible CENVAT Credit - Extended period of limitation - HELD THAT:- There is no allegation of suppression, wilful misstatement or fraud in the impugned notice. In the impugned order also, the ld. adjudicating authority has not given any finding regarding suppression of facts or wilful misstatement for invocation of the larger period of limitation. Thus, the demand confirmed by invoking the extended period of limitation is not sustainable - the demand of irregular credit confirmed in the impugned order is not sustainable.
Conclusion - i) Service Tax cannot be levied on cost-sharing arrangements lacking a service element. ii) Demand confirmed merely on the basis of the differential value between the Profit & Loss Account and ST-3 returns is not sustainable. iii) As entire demand is time barred, the demand of irregular credit confirmed in the impugned order is not sustainable.
The impugned order set aside - appeal allowed.
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2025 (1) TMI 1261
Entitlement to interest on the refund of Rs.12,00,00,000/- from the date of deposit until the date of refund - Rate at which the interest is to be computed - Adjustment of the amount Rs.64,73,631/- from the total refund sanctioned to the appellant.
Entitlement of interest on the amount of Rs.12,00,00,000/- from the date of deposit till the date of refund - HELD THAT:- This issue is no more res integra as the same has been decided by the Hon’ble Apex Court in the case of Sandvik Asia Limited vs. Commissioner of Income Tax [2006 (1) TMI 55 - SUPREME COURT], which has been followed by the jurisdictional High Court of Punjab & Haryana in the case of COMMISSIONER OF CENTRAL EXCISE, PANCHKULA VERSUS RIBA TEXTILES LTD. [2022 (5) TMI 1531 - PUNJAB AND HARYANA HIGH COURT], wherein the Hon'ble High Court has upheld the order of the Tribunal granting interest on refund to the assessee computable from the date of payment till the date of refund @12% per annum. It is pertinent to note that the review application filed by the Revenue against this judgment has also been rejected by the Hon'ble Punjab & Haryana High Court - the Hon'ble Punjab & Haryana High Court in the case of Sunrise Immigration Consultants Private Limited vs. Union of India [2023 (4) TMI 504 - CESTAT CHANDIGARH], after relying upon the decision in the case of Riba Textiles Limited, has re-affirmed that the petitioner was entitled to refund of the amount deposited during investigation along with interest @12% computable from the date of deposit of the amount till the date of refund.
Rate at which the interest is to be computed - HELD THAT:- The Tribunal as well as various Courts in catena of decisions have consistently held that interest is payable from the date of deposit till the date of refund @12% per annum. In this regard, we may refer to the decision of the Tribunal in the case of Indore Treasure Market City Pvt. Ltd. [2024 (5) TMI 367 - MADHYA PRADESH HIGH COURT] wherein the Tribunal after considering the various decisions of the Courts, has held that the assessee is entitled for interest on the amount of refund sanctioned @12% to be calculated from the date of payment till the date of disbursement - the appellant is entitled to receive interest on the amount deposited during investigation from the date of deposit of the amount till the date of its refund at the rate of 12% per annum.
Adjustment of the amount Rs.64,73,631/- from the total refund sanctioned to the appellant - HELD THAT:- The Adjudicating Authority has committed an error because the said demand was not confirmed by the Appellate Authority rather the said demand was set aside by the Appellate Authority in the case of Bharti Infratel Ltd. [2022 (9) TMI 1339 - CESTAT NEW DELHI]. It is also found that in the case of Kisan Irrigations & Infrastructure Ltd. [2016 (7) TMI 429 - CESTAT NEW DELHI], the Tribunal has held that adjustment of refund against a confirmed demand during the pendency of an appeal amounts to coercive recovery and is not permissible under the law. Further, adjustment of demand confirmed by the Bharti OIO against the refund due to the appellant could not have been made prior to the Bharti OIO attaining finality. Further, the demand confirmed against Bharti Infratel Ltd was subsequently dropped vide Bharti OIA dated 13.03.2023; copy of the same has also been placed in the appeal paper-book - the amount adjusted from the total refund sanctioned to the appellant is refundable to the appellant at the rate of 12% per annum computed from the date of deposit till the date of its refund.
Conclusion - i) The appellant is entitled to interest on the full refund amount from the date of deposit until the date of refund at a rate of 12% per annum. ii) The amount adjusted from the total refund sanctioned to the appellant is refundable to the appellant at the rate of 12% per annum computed from the date of deposit till the date of its refund.
Appeal allowed.
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2025 (1) TMI 1260
Levy of service tax on the appellant, Velur Town Panchayat - Renting of Immovable Property service - exemption of service tax for performing sovereign functions - local authority - extended period of limitation - HELD THAT:- In similar circumstances, this Tribunal had in the Appellants own case for the previous period in M/S. VELUR TOWN PANCHAYAT VERSUS THE COMMISSIONER OF GST & CENTRAL EXCISE, SALEM COMMISSIONERATE AND M/S. MOHANUR TOWN PANCHAYAT VERSUS THE COMMISSIONER OF GST & CENTRAL EXCISE, SALEM COMMISSIONERATE [2024 (6) TMI 1182 - CESTAT CHENNAI] had remanded the matter to the Adjudicating Authority by taking note of the judgement passed by the jurisdictional High Court in the case of CUDDALORE MUNICIPALITY VERSUS THE JOINT COMMISSIONER OF GST & CENTRAL EXCISE, THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX AND VIRUDHACHALAM MUNICIPALITY VERSUS THE ASSISTANT COMMISSIONER, OFFICE OF THE ASSISTANT COMMISSIONER OF GST AND CENTRAL EXCISE, CUDDALORE [2021 (4) TMI 500 - MADRAS HIGH COURT], and the subsequent decision in the case of ST. THOMAS MOUNT CUM PALLAVARAM CANTONMENT BOARD VERSUS ADDITIONAL COMMISSIONER, COMMISSIONER OF GST AND CENTRAL EXCISE, CHENNAI [2023 (4) TMI 1024 - MADRAS HIGH COURT].
Conclusion - It is required to take a detailed examination of whether the services in question fall within the scope of sovereign functions.
Appeal allowed by way of remand.
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2025 (1) TMI 1259
Refund of service tax paid on Government work during the period from April 2015 to December 2015 - time limitation - rejection of refund for the reason that it had been filed beyond the period of six months prescribed under section 102 of the Finance Act - HELD THAT:- Once the time limit of six months has been provided, it cannot be contended that merely because the character of the tax deposit would continue to be in the nature of the tax collected without authority of law and, therefore, no limitation can be prescribed for filing the refund application. The learned Member failed to take into consideration the terms of sub-section (3) of the section 102 while arriving at such a conclusion.
The appellant also placed reliance of the judgment of the Karnataka High Court in KVR Construction [2012 (7) TMI 22 - KARNATAKA HIGH COURT]. The provisions of the section 102 of the Finance Act were not under consideration in this judgment. All that was considered was if service tax has been paid under a mistake, then the time limit provided under section 11B of the Central Excise Act would not be applicable.
Conclusion - The statutory time limits must be adhered to, and neither the Tribunal nor the revenue authorities have the power to extend or ignore such limits. The refund claim was rightly rejected as time-barred.
Appeal dismissed.
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