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Showing 281 to 300 of 1445 Records
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2024 (3) TMI 1165
Transitional credit - Disparity was on account of the transitional credit availed of and reflected in the GSTR 9 annual return - mismatch between the Input Tax Credit (ITC) reported in GSTR 9 versus the GSTR 3B returns - HELD HAT:- The petitioner clearly stated in reply dated 21.09.2023 that transitional ITC of Rs. 1,15,40,474/- was claimed and that this is reflected in the GSTR 9 return but not in the GSTR 3B return. As regards the alleged defect pertaining to Director's remuneration, in the reply dated 27.10.2023, the petitioner stated that the Directors of the Company are based at the head office in Mumbai and that their remuneration would be taxable on RCM basis in the State of Maharashtra and not in Tamil Nadu. Similarly, as regards the blocked credit, it was expressly stated in the reply dated 27.10.2023 that no ITC was claimed in respect of the four items specified under defect no.2.
In the impugned order, the respondent has confirmed the tax demand without taking into consideration the above replies of the petitioner. This is also the case with regard to the other defects discussed in the impugned order. Hence, the impugned order is unsustainable.
The impugned order dated 31.12.2023 is quashed and the matter is remanded for re-consideration by the respondent - Petition disposed off.
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2024 (3) TMI 1164
Violation of principles of natural justice - validity of assessment order - the impugned order was issued after the petitioner failed to reply to the show cause notice or participate in proceedings in spite of being provided an opportunity to do so - attachment of bank account - HELD THAT:- On examining the impugned order, it is evident that the tax liability indicated therein is a sum of Rs. 95,666/-. The petitioner has placed on record proof of payment of Rs. 96,132/- by submitting Form GST DRC-03. The impugned order also indicates that the petitioner was not heard before such order was issued. Given the fact that revenue interest is fully secured as on date, it is just and appropriate that the petitioner be provided an opportunity of being heard.
The impugned order dated 12.09.2023 is quashed and the matter is remanded for reconsideration. The petitioner is permitted to file a reply to the show cause notice within a period of two weeks from the date of receipt of a copy of this order. Upon receipt thereof, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh assessment order within a period of two months from the date of receipt of the petitioner's reply.
As a consequence of the impugned assessment order being quashed, the bank attachment order shall stand raised.
The writ petition is allowed.
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2024 (3) TMI 1163
Challenged the order of cancellation of registration - appeal preferred was dismissed on the ground of limitation - limitation of filing of an appeal - date of the order - HELD THAT:- The Counsel for the petitioner argues that the appeal has been dismissed as being beyond limitation as such the doctrine of merger would not apply and the petitioner is fair entitled to seek judicial review of the order dated 14.02.2023 on the ground that the same is non speaking order. This Court in M/S Chandrasen, Sarda Nagar, Lucknow vs Union of India and others [2022 (9) TMI 1047 - ALLAHABAD HIGH COURT] had held that the order of cancellation of registration or any other order passed either on administrative or on judicial side is without any reason and prima facie, without application of mind, the same does not stand the test of scrutiny under Article 14 of the Constitution of India.
Thus, following the said judgment rendered in the case of M/s Chandrasen (Supra), the writ petition deserves to be allowed.
Accordingly, the writ petition is allowed. The order dated 14.02.2023 is set aside and the petitioner is permitted to appear before the respondent along with the reply to show cause notice and the certified copy of this order within three weeks from today.
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2024 (3) TMI 1162
Time Limitation - issuing a notice after the detention and then in passing the final order from the date of service of such notice - two figures in the vehicle number differing from that recorded in the e-way bills - HELD THAT:- Annexure-P/1 is series of e-way bills which shows the transport to be in vehicle no. UP78 CT 9645. On detention the transport was found to be made in a vehicle having no. UP78 CT 9650. The petitioner produced documents, as stated in the writ petition, establishing that the vehicles bearing both the registration numbers belonged to the petitioner. The tax authority in the order passed specifically pointed out that this would further the case of evasion and if the vehicles were with two different operators probably the recording of the number in the e-way bill was a bonafide mistake - the merits of the case need no consideration, especially when the contention is of bar by virtue of limitation.
Be that as it may, even if the detention is stated to be on 28.12.2023, the notice was only issued on 05.1.2024, after the seven day period provided in Section 129(3) CGST Act. Likewise when the petitioner had been informed at the time of verification, if the petitioner had sought for time on the seventh day from the date of serving of notice, there was nothing preventing the tax authority from rejecting the said prayer and passing the order, especially since, if the matter is kept pending, the proceedings would be barred by limitation.
The Limitation is clear and definite. The facts of the case indicate that the officers did not act in accordance with the provisions, we hence find no reason to sustain the demand raised. We set aside the orders passed for detention of the vehicles. The vehicle with the goods would be released immediately. Ordered, accordingly.
Petition allowed.
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2024 (3) TMI 1161
Cancellation of GST registration of the petitioner - rejection has been made primarily on the ground that the petitioner has failed to file their returns for more than six (06) months continuously - HELD THAT:- It is necessary to appreciate the fact that the show cause notice was that of December, 2020. Everybody knows that since March, 2020, onwards it was Covid pandemic that ripped through the entire country bringing the entire commercial and industrial establishments to a standstill or at least remaining closed for a major part of that period. The business of these establishments including that of the petitioner must have definitely been affected - If the default on the part of the petitioner is only so far as non-furnishing of the returns, we are of the considered opinion that subject to the petitioner making good the default, the said GST registration of the petitioner would get restored which would enable the petitioner to carry on his business and which would also generate GST revenue to the respondent authorities as well.
Learned counsel for the petitioner has also undertaken to make good the necessary default so far as non-furnishing of the GST returns are concerned along with late fees and penalty that would be applicable.
The present Writ Petition stands allowed directing the petitioner to immediately appear before the respondent authorities by 12.03.2024 and upon furnishing the entire GST returns up till date which they have not yet filed along with requisite late fees and penalty if any, the respondent authorities shall forthwith restore the GST registration of the petitioner without any further scrutiny so far as the default of non-payment of GST returns till now is concerned and the same is a onetime measure.
Petition allowed.
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2024 (3) TMI 1160
Seeking release of goods in terms of the provision of Section 129(1)(a) of the U.P.G.S.T. Act 2017 - SCN issued to the petitioner in its capacity as the consignee - HELD THAT:- The transaction disclosed to the revenue authorities was one of job work return to the petitioner (a registered dealer in the State of Haryana) from a dealer in Daurala. The goods were intercepted during movement through the State of Uttar Pradesh - Penalty order has also been passed against the petitioner in its capacity as the consignee. The case of the revenue is that the petitioner has also prepared delivery challan of job worker and therefore, the penalty has been rightly imposed. At the same time, upon query made, learned counsel for the revenue fairly states, no person other than the petitioner has claimed the goods.
Undoubtedly, under Section 129 of UPGST Act, 2017, different rates of penalties are prescribed depending upon the status of the person viz-a-viz, the goods that may have been seized. Again, undoubtedly the owner of the goods may not be visited with penalty exceeding 200 percent of the tax leviable on the offending goods.
Learned counsel for the petitioner last submits that the goods may be made over to the petitioner subject to its complying Section 129 (1)(a) of UPGST Act, 2017 with liberty to appeal against the penalty order.
The writ petition succeeds and is allowed at this stage itself to the extent, petitioner is permitted to obtain release of goods against furnishing security equal to 200 percent of the tax imposable on the goods.
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2024 (3) TMI 1159
Delay in filling appeal before SC - Deduction u/s 80-IA - Nature of Interest income - Advances extended to Employees - interest on the bonds issued by GRIDCO in lieu of unpaid energy bills - Nexus with business activity - Disallowing deduction towards ‘power profit’ under Section 80-IA (4)(iv) - As decided by HC [2022 (3) TMI 539 - ORISSA HIGH COURT] on the netting principle, since there is no other activity of the Assessee except power generation, the AO, the CIT(A) and the ITAT, were in error in disallowing the aforementioned sum as deduction under 80-IA of the IT Act. There is merit in the contention of the Assessee that the interest received from the bonds issued by GRIDCO have a direct nexus with its essential business activity and therefore, was income derived from it, thus, making it eligible for such deduction
HELD THAT:- There is a gross delay of 608 days in filing the special leave petition. The reasons assigned for seeking condonation of delay are not acceptable to us. Hence, the application seeking condonation of delay is dismissed.
Consequently, the special leave petition is dismissed on the ground of delay keeping open the question of law, if any, which arises in this matter.
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2024 (3) TMI 1158
Reopening of assessment u/s 147 - Pro-Trade activity of Petitioner - reason to believe - as alleged Assessee had entered into sales/purchase of equity shares with or without actual delivery in recognized Stock Exchange and there are no details provided - mandation to have live link between the information received by AO and formation of his belief that income had escaped assessment
HELD THAT:- Queries were raised and replies were sent itself indicates, as held in Aroni Commercials Limited [2014 (2) TMI 659 - BOMBAY HIGH COURT] once a query is raised during the assessment proceedings and assessee has replied to it, it follows that the query raised was a subject of consideration of the AO while completing the assessment. It is also not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. Therefore, the reopening of the assessment, in our view, is merely on the basis of change of opinion of the AO from that held earlier during the course of assessment proceedings and this change of opinion does not constitute justification and/or reason to believe that income chargeable to tax has escaped assessment.
AO in the reasons recorded does not even make an allegation that there was failure on the part of assessee to truly and fully disclose material facts. From the reasons as reproduced earlier, we are unable to cull down the factum of failure to disclose. The reason, in our view, does not indicate anything cogent or clear that in fact there was failure on the part of Assessee to truly and fully disclose all material facts necessary for its assessment.
There is no live link, which is a sine qua non between the material before the AO in the present case and the belief which he has to form regarding escapement of income.
We are satisfied that the jurisdictional conditions have not been met and the reassessment proceedings are nothing but a ‘change of opinion’. This ‘change of opinion’ does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. Decided in favour of assessee.
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2024 (3) TMI 1157
Determination of long term capital gain u/s 50C - assessee has received part sale consideration - whether the assessee is eligible for the benefit of First and Second proviso to Section 50C? - HELD THAT:- The first proviso to Section 50C specify that in case where the date of agreement fixing the amount of consideration and the date of registration of the transfer of capital asset is not the same, the value adopted or assessed by the stamp valuation authority or the date of agreement may be taken for the purpose of computing full values of consideration for such transfer. Further second proviso to section 50C specify that the benefit of first proviso shall apply only in case where the amount of consideration, or part thereof has been received by way of account payee cheque or by banking channel.
As part payment of the consideration is received by the assessee prior to the execution of agreement to sale in the month of June 2011, which we have verified from the bank statement of the assessee and as find that as per jantri rate applicable as on 01.08.2011 (sale agreement date) i.e., Rs. 64,82,526/-, the assesse has shown / received sale of Rs. 1.94 Crore, which is much more than the agreed price.
Thus, in view of the aforesaid factual discussion, we find that the assessee is entitled for the benefit of first and second proviso to section 50C. Hence, the addition made by assessing officer by invoking the provision of section 50C is not sustainable and the same is deleted. In the result, the ground No. 1 of the appeal raised by the assessee is allowed.
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2024 (3) TMI 1156
Late remittance of PF and ESI - HELD THAT:- We find the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd [2022 (10) TMI 617 - SUPREME COURT] has decided the issue in favour of the Revenue and therefore, respectfully following the decision of the Hon'ble Supreme Court, we allow the grounds raised by the Revenue.
Loans advanced to sister concerns - CIT (A) reducing the rate of interest from 16% to 8% on the loans advanced by the assessee to the sister concerns - HELD THAT:- The findings given by the CIT (A) cannot be faulted with CIT(A) as he had examined the availability of funds and thereafter had restricted the interest at 8% correctly.
Disallowance of expenses - assessee has not filed the requisite bills/vouchers/documents substantiating the increase in expenditure which is in the range of more than 39% of the earlier expenditure - HELD THAT:- AO is required to be disbelieved as the assessee had filed a letter dated 26.3.2015 before the AO which was filled before the passing of the order, where in the assessee had explained the increase in the expenditure . The situation continues to be the same even before the CIT (A). CIT (A) mentioned that the “ Manufacturing, administrative and selling and distribution expenditures along with ledger extracts.” were produced before the revenue authority. The above said, categorical finding of the CIT (A) recorded in the order have gone unrebutted. Undoubtedly, there is no ground raised by the Revenue challenging the order of the learned CIT (A) on the ground of the no adherence to principles of natural justice mentioned in Rule 46A of I.T. Rules.
In the absence of any ground-raising violation of principles of natural justice or accepting the evidence at the back of the assessee, the finding recorded by the CIT (A) that the assessee has produced bills/vouchers explaining the increase in expenditure before the AO and before CIT (A) is required to be accepted.
Once the bills have been produced by the assessee before the Revenue authorities and the bills have been examined by the CIT (A) and thereafter only the disallowance made by the AO has been deleted. We do not find any reason to interfere with the findings given by the CIT (A) and accordingly, the disallowance deleted by the learned CIT (A) is sustained.
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2024 (3) TMI 1155
Addition u/s 68 - Bogus LTCG - Penny stock transactions - long-term capital gains derived by the assessee on sale of shares of listed companies questioned - entry operators involved in facilitating bogus LTCG to beneficiaries like assessee, which according to AO is nothing but converting the black money of the beneficiaries to white - CIT(A) deleted the addition - HELD THAT:- As decided in the case of PCIT v. Ziauddin A Siddique [2022 (3) TMI 1437 - BOMBAY HIGH COURT] which is found to be relevant in the facts involved in the present case. In the decided case, the issue before the Hon’ble High Court was whether this Tribunal was right in law in deleting the addition made u/s 68 in relation to LTCG derived on sale of shares, ignoring the fact that the shares were purchased from off-market sources and that the sharp rise in prices were not supported by financials. Answering the question raised by the Revenue in the negative, the Hon’ble High Court held that there was a finding of fact that the purchase & sale of shares occured on the platform of stock exchang, upon payment of STT and were supported by documentary ecidences and therefore there was no perversity in the order of this Tribunal. The Court further noted that there was no allegation against the assessee that he had participated in price rigging in the market and therefore dismissed the appeal of the Revenue.
We concur with the view of the CIT(A) and uphold the impugned order of the CIT(A) deleting the addition - we direct the AO to allow the LTCG/exemption claimed by assessee u/s 10(38) on sale of shares of M/s Shaleen Textile Ltd. Decided against revenue.
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2024 (3) TMI 1154
Reopening of assessment u/s 147 - Reasons to believe for escapement of income - power of reopening v/s review - notice issued after expiry of four (4) years - assessee claim of deduction u/s 80IB(10) - HELD THAT:- As in the original assessment, the AO had noted about the housing project in question and noted that the assessee had claimed deduction u/s 80IB(10) and after verification of the claim has accepted the claim after due application of mind. And it is further, noted from perusal of the reasons recorded AO had belief of escapement of income only after verifying the records of the assessee viz assessment folder wherein original assessment proceedings would be available including assessee’s submission on this issue.
Therefore, we find that there was no new/tangible material other than the documents already available in the original assessment records. In such a scenario, it can be safely inferred that AO has re-opened the assessment on mere change of opinion, which impugned action AO is not permitted to do because he doesn’t enjoy the power of review as held in the case of CIT v/s Kelvinator of India Ltd., [2010 (1) TMI 11 - SUPREME COURT] wherein after taking note of the amendment brought to section 147 of the Act w.e.f. 1st April 1989 has held that though, post amendment the power to re-opening is much wider, however, a schematic interpretation to the words “reason to belief’ has to be given, otherwise, the AO would exercise arbitrary power by re-opening the assessment on mere change of opinion.
The Hon'ble Court clarified that the AO has no power to review but has power to re-assess and such power to re-assess has to be based on fulfilment of certain pre-conditions one of which is, such re-assessment cannot be on the basis of a mere change of opinion. The Hon'ble Court held, even after 1st April 1989, the AO has power to re-open provided there is tangible material to come to the conclusion that there is escapement of income from assessment.
In the present case, AO only on re-appraisal of the material available at the time of original assessment has re- opened the assessment under section 147 of the Act by forming a belief that the assessee is not eligible to claim deduction under section 80IB(10) of the Act due to non-completion of the project within the stipulated time. Thus, considering the facts and material on record in the light of well settled legal principle leads to the irresistible conclusion that the AO has re-opened the assessment on mere change of opinion without having in his possession any tangible material. Therefore, it amounts to review of the original assessment order passed in case of the assessee, which is legally impermissible. Therefore re-opening assessment un/s147 of the Act in the instant case is not valid - Decided in favour of assessee.
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2024 (3) TMI 1153
Revision u/s 263 - another possible view of the matter - PCIT opined that no exemption on account of dividend income could be claimed / allowed but the Ld. AO accepted the claim of the assessee - assessee’s case was picked up for scrutiny under CASS for four specific reasons, namely, reduction in profit, excess claim of exemption of dividend income, large increase in unsecured loans during the year and large refund claimed out of advance tax - HELD THAT:- It is now well established that an incorrect assumption of fact and an incorrect application of law will satisfy the requirement of assessment order being erroneous. In the assessee’s case it would be obvious that the Ld. AO has neither assumed facts incorrectly nor there is incorrect application of law. On the contrary, he applied his mind. In our opinion, therefore the impugned order of the Ld. AO is not erroneous. If that be so, the question of it being prejudicial to the interest of Revenue will hardly arise in the given facts and law related to them.
The deeming provision contained in Explanation 2 to section 263(1) inserted w.e.f. 01.06.2015 referred to by the Ld. PCIT is inapplicable to the assessee’s case in view of admitted submission of details, e.g. income from dealing in shares and securities (NET); sale and purchase of shares and securities along with proof of transaction ledger/trading account, DEMAT account; Form -10DB and evidence of dividend income in the form of Dividend Advice issued by Taurus Mutual Fund and JM Financial Mutual Fund before the Ld. AO/PCIT in reply to questionnaires. This amply demonstrates that adequate requisite enquiry was made by the Ld. AO on the issue of excess claim of exemption of dividend income and necessary verification was made by him examining the details and documentary evidence produced before him by the assessee.
This finding recorded by the AO in the assessment order could not be controverted by the Ld. PCIT. The direction of thePCIT to the AO to examine and reconcile claim of dividend income and its exemption is therefore unwarranted and to say the least superfluous.
The remaining direction of the PCIT to the AO to reconcile the information on purchase of mutual fund units and to examine the sources of investment therein is beyond the reason being not even part thereof for selection of assessee’s case for scrutiny.
AR has relied on several judicial precedents in support of the view that revisionary powers u/s 263 of the Act can be exercised only on issues for which the case was selected for scrutiny under CASS. The details of purchase and sale of mutual fund units were furnished in reply to notice u/s 142(1) of the Act issued by the Ld. AO. Enquiry as to the source of investment in mutual fund units was neither envisaged nor called for.
Thus we are of the opinion that suo-moto assumption of jurisdiction by the Ld. PCIT u/s 263 of the Act in the case of the assessee is not sustainable. Decided in favour of assessee.
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2024 (3) TMI 1152
Addition u/s 69A - unexplained cash deposits in the bank account - onus to prove - HELD THAT:- We find that before the lower authorities the assessee had provided source of cash deposits in the bank account. Revenue has not brought any material to controvert the claim of the assessee that the assessee was having cash in hand to make the impugned deposits.
Thus when the assessee has provided the source of cash deposits being cash withdrawals, AO without bringing adverse material ought not have treated the same as unexplained. Therefore, hereby direct the AO to delete the impugned addition - Decided in favour of assessee.
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2024 (3) TMI 1151
Addition u/s 40A(2)(b) - Allegation of excessive and unreasonable salary paid to the relative of partner acting as administrative head - appellant has shown salary payment to the Specified Period and deducted TDS, upon deduction of the same, the remaining amount has been shown as unsecured loan obtained from her - She is the Administrative Head, possesses the degree of Masters in Business Administration from University of Houston-Downtown engaged in looking upon areas related to students like accommodation, food facility, water supply, disciplinary actions etc. of the hostel - HELD THAT:- Payment of salary and granting of interest free loan are two different transactions and there is no scope of clubbing the same to attract the provision of Section 40A(2)(b). The same salary would have been given to any other person recruited by the appellant for the said post. Thus, question of diversion of funds or routing of funds does not and cannot arise as these two transactions i.e. payment of salary as well as loan is through journal entry and the amounts stands payable, on the other hand, in the form of creditor or lender as rightly pointed out by the appellant. As Smt. Palak A Shah did not withdraw salary, the amount was lying as unsecured loan as per normal accounting principle. Had the interest been paid the Revenue would have at loss because the appellant firm attracts 30.9% tax whereas Smt. Palak A shah, an employee falls under 20.6% tax slab.
Income Tax Authority must put themselves in the shoes of the appellant and to see as to how a prudent businessman would act. The authorities must not look at the matter from their own view point but of a prudent businessman.
When the expenditure incurred by the appellant is otherwise deductible but deduction is restricted to a part of the sum by considering such expenditure to be excessive, having regard to the fair market value of the goods or services etc. and so much part of the expenditure is disallowed or in other words, if the expenditure incurred by the appellant is proved by the Ld. AO to be excessive or unreasonable considering the fair market value of the goods or services for which the payment as made the deduction under Section 40A(2)(b) of the Act is permissible. None of the order passed by the authorities below doubted the services so rendered by Smt. Palak A Shah nor alleged to have been paid salary excessive or unreasonable which is sine qua non in invoking the provision of Section 40A(2)(b) of the Act, in the absence of which, the order of disallowance is found to be not sustainable, bad in law and therefore, quashed. Decided in favour of assessee.
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2024 (3) TMI 1150
Income from other sources - Deduction of interest expenditure - direction of the CIT – A in restricting the deduction to the extent of income earned of term deposit - whether the expenditure of interest is laid out or expended wholly and exclusively for the purpose of making or earning such income is required to be tested - HELD THAT:- Undoubtedly the assessee has earned bank interest of Rs. 41 lakhs. According to section 57 of the income tax act, assessee is entitled to deduction under section 57 (iii) of any other expenditure which is not in the nature of capital expenditure which is laid out or expended wholly and exclusively for the purpose of making or earning such income.
Same has been verified and decided by the coordinate bench in case of assessee for assessment year 2013 – 14 till 2015 – 16 [2020 (11) TMI 326 - ITAT MUMBAI]. Further the direction of the CIT – A in restricting the deduction to the extent of income earned of term deposit is also not in accordance with the decision of the coordinate bench wherein in case of Mr. Ashwin Mehta [2019 (11) TMI 1450 - ITAT MUMBAI] wherein against the interest receipt of ₹ 1,801,778/– the coordinate bench has granted the deduction of ₹ 21,969,050/–.
Thus we direct the learned assessing officer to allow the claim of the assessee of deduction of interest expenditure. Accordingly, ground is allowed.
Charge of interest u/s 234B - HELD THAT:- The proviso to section 209 (1) has been inserted with effect from 1 April 2012. Therefore if any income of the assessee on which tax is deductible, the interest under section 234B shall not be chargeable prior to 1 April 2012. AO is directed to compute the interest in accordance with the law as it was prevailing for assessment year 2006 – 07. Accordingly ground number 3 of the appeal is allowed with above direction.
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2024 (3) TMI 1149
Addition u/s 68 - bogus share transactions - as alleged transactions in shares, “penny stock” are fraudulent and accommodation entries - HELD THAT:- Assessee has filed complete supporting evidences like sale was effected through open market using an authorized SEBI broker, contract notes were also produced before the AO and also submitted Demat statement and bank account statement, where the assessee has made purchase and subsequently, sold the shares and received the amount.
AO has nowhere pointed out any defect in assessee’s credit note or the shares entered into demat account or the amount paid for purchase of these shares and held these shares in Demat account for more than one year. The AO and CIT(A) both noted only that these are accommodation entries as observed from investigation proceedings, statement recorded from various operators, promoters and related persons, wherein they admitted how the unaccounted money of the beneficiaries get into the books of accounts of various assessee’s in the grab of long term capital gain.
CIT(A) and AO based their decision only on one investigation report of investigation wing of income-tax department, which does not contain the name of the assessee. Both the parties below also noticed, sharp jump and sharp decline in price, wherein it was noted that the share price of Finalysis Credit and Guarantee Co. Ltd., arose from Rs. 7 in March, 2012 to Rs. 180 in March, 2013 and thereafter dipped to Rs. 5 in October, 2013, in a period between 18 months only. We noted that all these are presumptions of the AO and CIT(A) and AO has nowhere pointed out any defects in the documents furnished by the assessee. Admittedly, the transaction carried on by the assessee is from open market and not grey market.
Assessee has produced copy of credit notes, contract notes, demat account and bank statements. The assessee has made payments through banking channel for purchase and even received sale consideration through banking channel only. AO could not find any defect in the above but based his decision on assumptions and presumptions. Hence, we have no hesitation in reversing the order of the lower authorities and allowing the appeal of assessee. Therefore, the appeal of the assessee is allowed.
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2024 (3) TMI 1148
Framing assessment u/s 143(3) without serving notices at the registered e-mail address - changing of the e-mail id - assessee on failure to provide reasonable and adequate opportunity of hearing, thus sought for setting aside the order impugned - HELD THAT:- Assessee had partially complied to notice issued u/s 143(2) and the notice u/s 142 (1) dated 01/02/2020, which proves that the assessee was accessing to his registered e-mail address till 1st February, 2020. It is the claim of the assessee before the AO that the assessee had changed the e-mail id subsequently, therefore, the notice has not been served on the Assessee.
It is seen that the said changing of the e-mail id has not been brought to the notice of the Revenue Authorities, in such events, the A.O. cannot be found fault of not serving the notices. Thus, we find no merit in Ground raised by assessee.
Disallowance in respect of exceptional items claimed in the profit and loss account - Assessee claimed expenditure in form of exceptional item - Assessee has entered into concession agreement with Ramagundam Fertilizer & Chemical Limited (RFCL) on 23/03/2016 towards grant of right and concessional to RFCL with regard to facility area - HELD THAT:- It is an admitted fact that the assessee has given right of lease of 99 years of the property of the Assessee to RFCL vide concession agreement dated 23/03/2016. In view of the said lease, RFCL has issued 11% of the total capital expenditure of the said property as equity shares to the Assessee valuing at Rs. 144.49 crores. The assessee charged the said amount to P & L account claiming as exceptional item, thus, the Assessee claimed as Revenue expenditure while computing the income of the Assessee. The said claim of the assessee was not based on any prudent accounting principles. The same is an income earned by the Assessee on giving the right to use the land at a concession rate. In any normal circumstances, if any third party would be required to pay Rs. 144.49 crore to acquire those shares. The shares were acquired in lieu of right to use the Assessee’s capital assets by RFCL. Thus, we find no merit in the grounds of Appeal of the Assessee.
AR made an oral submission that the Assessee had indeed offer to tax this sum in AY 2020-21. As we have already held herein above that income had indeed accrued to the Assessee during the year under consideration sum of Rs. 144.49 crores, which has been received by the Assessee in the form of shares in the Joint Venture Company to the tune of Rs. 92.51 crores, remaining sum of Rs. 51.98 crores has been shown as receivable in the balance sheet of the Assessee, in case if the said sum has been again offered to tax by the Assessee in subsequent years, the same should be deleted in the Assessment Year, in order to avoid double taxation. In our considered opinion, this direction is given to the Ld. A.O. to avoid double taxation and to meet the ends of justice.
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2024 (3) TMI 1147
Benami transaction - Jurisdiction by the Investigating Authority or the Adjudicating Authority under the Benami Act - Benami transaction - summons issued u/s 19 of Benami Act and the provisional order of attachment as well as extension of such order passed u/s 24 of the said Act challenged - petitioner argues that the respondent-Authorities do not have any jurisdiction to initiate a proceeding under the Benami Act - HELD THAT:- The petitioner obviously acted as a conduit, being owned by shareholders which were none other than shell companies having fictitious existence, for channelizing money from undisclosed sources, shown to have been advanced by Shakambhari and others, into tangible properties by the 37 purchases which are in issue. Taking a broad view of Section 2(9)(D), the purchase of the properties through consideration which came from fictitious sources squarely attracts the said provision to the present transactions. It is to be noted that sub-clause (D) does not merely restrict itself to non-traceable sources of consideration but also to “fictitious” sources of consideration. Hence, there is sufficient prima facie material to indicate that the transactions-in-question were arrangements in respect of properties where the person providing the consideration is fictitious.
Hence, this Court does not find that there is ex facie erroneous assumption of jurisdiction by the Investigating Authority or the Adjudicating Authority under the Benami Act sufficient to displace the legitimate opinion formed in writing by the Investigating Authority, which justifies the reference to the Adjudicating Authority after issuance of notice and passing of provisional assessment order, which was continued subsequently.
For an adjudication of merits on the issues involved in the present case as indicated above, a full-fledged enquiry on factual assessments based on appreciation of evidence is required, which is entirely unwarranted at the instance of the writ court, since a comprehensive procedure is provided in Section 26 of the Benami Act, which is, as the Madhya Pradesh High Court held, in the nature of a self-contained code.
Thus, no ground to interfere with the impugned notice u/s 24 or the provisional orders passed therein, particularly, since the matter has already been referred to the Adjudicating Authority and is under consideration before it within the contemplation of Section 26 of the Benami Act. The appropriate remedy before the petitioner is to participate in the said proceedings, and to have its defence vindicated there. In any event, even thereafter, the petitioner has two stages of remedies – one, a hearing before confiscation and the other by way of an appeal under Sections 30 and 31 of the Benami Act, if aggrieved by the decision of the Adjudicating Authority.
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2024 (3) TMI 1146
Seeking benefit of Merchandise Exports from India Scheme (MEIS) - submission of online declaration indicating that it would not avail the benefits of MEIS - HELD THAT:- Following the Judgment in the case of “Jubilant Biosys Limited vs. Directorate General of Foreign Trade and Ors. [2022 (12) TMI 1254 - DELHI HIGH COURT]. The Petitioner will now be able to take the benefit of Merchandise Exports from India Scheme (MEIS) and the fact that the last date has expired, will not come in way of the Petitioner and the Respondents are directed to consider the case of the Petitioner in accordance with the law laid down by this Court.
The present writ petition is allowed on the same terms and conditions. Pending applications, if any, stand disposed of.
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