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Showing 281 to 300 of 754 Records
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2020 (5) TMI 474
Permission to amend the shipping bill - HELD THAT:- Respondent No.2 states that though the power exist to correct a shipping bill under Section 149 of the Customs Act, a proper application needs to be made by the Petitioner, to be considered as per law. The learned Counsel for the Petitioner states that an application will be made within a period of one week from today - If such application is made within a period of one week from today, the learned Counsel for Respondent No.2 on instructions states that it would be decided as per law within a period of four weeks. Statement is accepted.
Petition disposed off.
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2020 (5) TMI 473
100% EOU - Refund of service tax paid - refund claim was rejected by the department on the ground that consequent to allegation of illicit mining of beach sand, the Government of Tamil Nadu vide GO dated 8.8.2013 and 17.9.2013 had banned mining of beach sand miners and also formed District level committee to verify the allegation - HELD THAT:- The ground for rejection is on an allegation that the appellant has done unlawful mining of raw sand and other minerals in excess of the permission granted to them. This aspect has to be looked into by the Govt. of Tamil Nadu as well as the committee formed for this purpose. The provisions of Mines and Minerals Act of the State has to look into the legal consequences of unlawful mining.
When the appellant has exported the goods paying service tax on the services availed for exporting the goods, the department cannot deny the refund stating reasons beyond the Customs Act as well as Finance Act - Since the department does not have a case that the appellants have violated provisions of the Finance Act or the notification, the rejection of refund claim cannot sustain.
Appeal allowed.
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2020 (5) TMI 472
Refund of CENVAT Credit - while entertaining the refund claim of the appellant, various adjustments were required to be done against various demand and rebate claim filed by the appellant - HELD THAT:- While entertaining the refund claim, the adjudicating authority has observed that refund claim of ₹ 4,97,809/- has been withdrawn by the appellant being inadmissible. But, no finding has been given by the adjudicating authority, how this calculation has been arrived at. In view of this, the adjudicating authority is required to provide the details of admissible refund claim sought by the appellant of ₹ 4,97,809/-. Therefore, the impugned order qua rejecting the refund claim of ₹ 4,97,809/- on the ground that the same is not admissible and withdrawn is set aside and the matter is remanded back to the Adjudicating Authority. The adjudicating authority is required to give details of the admissible and not admissible refund alongwith co-relation sheet.
The appellant is directed to produce the order of this Tribunal before the concerned Assistant Commissioner who within a period of seven days of receipt of this order shall quantify the actual amount of refund - appeal allowed by way of remand.
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2020 (5) TMI 471
Principles of Natural Justice - Validity of assessment order - main grievance of the petitioner before this Court is that before passing the orders of assessment, the petitioner was not served with any notice of proposal - HELD THAT:- Going by the facts and circumstances and considering that one of the issues before the Assessing Officer is mismatch issue and that the same has to be dealt with in accordance with the guidelines/directions issued in JKM Graphics [2017 (3) TMI 536 - MADRAS HIGH COURT], further considering the fact that the petitioner was not heard before passing the orders of assessment and that the orders of assessment themselves were served on the petitioner only recently, this Court is of the view that interest of both parties will be protected if the matter is remitted back to the Assessing Officer to redo the assessment afresh on all issues by giving due opportunity of hearing to the petitioner.
The matter is remitted back to the Assessing Officer to redo the assessment on all issues after giving due opportunity of hearing to the petitione - Petition allowed by way of remand.
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2020 (5) TMI 470
Imposition of compounding/composition fees under Section 72 of the Tamil Nadu Value Added Tax Act, 2006 - allegation is that the goods transport accompanied defective an therefore, there was contravention of 71(5) of the Act - revision petition was dismissed by the 2nd respondent holding that the goods moved and the details in invoice No.0415 did not match - HELD THAT:- Though the petitioner claims that 7 logs were purchased by the petitioner on 06.08.2010 from M/s.New Patel Saw Mills, Shengottah, it is noticed that the petitioner has produced yet another commercial invoice dated 31.08.2010, wherein also, a transaction in respect of 7 logs has been shown for a total value of ₹ 13,50,318/- (₹ 12,00,283/- + ₹ 15,00,035/-). The petitioner has also enclosed the copy of another delivery Form JJ dated 03.09.2010 to show that the balance of 3 logs valuing ₹ 6,30,000/0 approximately were being sent back to the petitioner - It is not clear how invoice dated 31.08.2010 can be relied in support of the purchase of 7 logs on 06.08.2010. The petitioner has also not stated these facts before the 2nd respondent. The petitioner had earlier purchased 7 logs from the said M/s.New Patel Saw Mill, Shengottah on 06.08.2010 and had purportedly delivered the same to Sri Swastik Saw Mill, Erode for cutting and sawing. However, a new invoice dated 31.08.2010 has been filed to substantiate the same transaction. This raises doubt. Two transactions cannot be one and the same.
Since there was several disputed questions of facts, which were not placed before the 2nd respondent by the petitioner, a fair chance may be given to the petitioner to place the same before the 2nd respondent for the latter to pass an appropriate order in accordance with law after hearing the petitioner - Petition disposed off by way of remand.
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2020 (5) TMI 469
Maintainability of application - Dishonor of Cheque - non-payment of 20% of compensation amount as per Section 148 of N.I. Act - petitioner has not challenged any specific order of the Courts below - HELD THAT:- On careful reading of the Section 482 of Cr.P.C. it appears that it gives inherent power to the High Court to make such orders as may be necessary to prevent abuse of process of any Court or otherwise to secure the ends of justice. Under Section 482 of Cr.P.C., there is no necessity to challenge any specific order of any Court, if the aggrieved person feels that the act of anyone is amount to abuse of process of law, he can pray to the High Court to exercise its inherent jurisdiction and pass appropriate direction to secure the ends of justice. Herein, in petition memo, the petitioner prays for specific direction with regard to hearing of appeal and cancellation of order of suspension of sentence and bail granted to the respondent, therefore, there are no force in the ground raised by the respondent’s counsel and it is hereby discarded.
The appeal is a legal right of the accused and cancellation of bail is not an indefeasible right of the complainant to get the appellants bail canceled but herein, it is pertinent to mention that though appeal is a legal statutory right of the appellant accused but the same cannot be used to abuse the process of law, it is not disputed that bail which was granted to the respondent was conditional in character, i.e. depositing of 20% of the compensation amount and same has been affirmed by this Court in earlier round of litigation. Since, condition stipulated therein has been violated by the respondent, he cannot longer take benefit of the same and plead at this stage that these are his legal right - The respondent cannot be allowed to abuse the process of law and pertinently this aspect has not considered by the learned trial Court.
In view of the specific provision of Section 148 N.I. Act with regard to power of Appellate Court ordering of payment in pending appeal against conviction under the N.I. Act, there is no condition to the complainant to approach the Appellate Court for cancellation of bail - Petition allowed.
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2020 (5) TMI 468
Conversion of Consumer Welfare Fund Bill, 2010 into the Consumer Welfare Fund Rules, 2010 - transfer of the unclaimed or unpaid amounts of unidentifiable consumers lying with respondents to Consumer Welfare Fund or a Suspense Account as well as for refund of the same - HELD THAT:- This Court is of the firm view that present writ petition is untenable in law inasmuch as the petitioner has failed to appreciate that there is a system of separation of powers under the Indian Constitution and it is not for the courts to either legislate or convert bills/acts into rules or to disburse amounts to certain hospitals or for certain causes, howsoever genuine they may be.
The petitioner would like the unutilized and unclaimed amounts lying with Cooperative Banks, Insurance Companies etc being given a similar treatment. Petitioner has adverted to the Consumer Protection Act 1986 and Consumer Protection Rule, 1987 and the Guidelines provisioning for Consumer Protection Councils. It is urged that with the said Councils should be given the complete control over the unutilized and unclaimed funds. This, according to him, can be achieved by amending the Consumer protection Act with a view to re-constitute and re-construct the Councils under the Act so as to enable them with wider powers and control - We do not see how Petitioner’s viewpoint should be all-pervading and such institutions and departments should be forced to be compliant with his suggestions and ideas. The Petitioner has collated certain facts and figures to impress upon us that enormous amounts of Funds are lying in credit with several departments and wings of the Government. But, all these contentions remain Petitioner’s ipse dixit and nothing actionable is there in law.
The preferential treatment sought for the Safdarjung Hospital may not be founded on any bias, as indisputably the said Institution is presently doing great service to the nation, but we have no criteria to make a distinction for any one hospital. Significantly, the utilization of the funds is not a function that the courts are equipped to decide - the said petition was also half-baked, lacking content and structure, prompting the court to turn down the same.
Petition dismissed.
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2020 (5) TMI 467
Constitutional validity of Section 96(2) of the Rajasthan Goods and Service Tax Act, 2017 and Section 96 of the Central Goods and Service Tax Act, 2017 - petitioner has placed reliance on an order dated 03.05.2019 passed by this Court in the case of CHAMBAL FERTILISERS AND CHEMICALS LIMITED VERSUS UNION OF INDIA [2019 (7) TMI 943 - RAJASTHAN HIGH COURT] wherein similar challenge has been raised and while issuing notice by this Court, it is directed that no coercive steps shall be taken against the petitioner - HELD THAT:- The record of the Chambal Fertilisers and Chemicals Limited be called for and tagged to this brief.
Issue notice to respondent No.2, returnable on 08.06.2020 - List the matter on 08.06.2020.
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2020 (5) TMI 466
Recovery proceedings - Validity of assessment order - present writ petitions filed challenging the impugned demand issued on 10.03.2020 and 13.03.2020, while the writ petitions filed by the very same petitioner challenging the assessment orders, are yet to be heard by this Court - HELD THAT:- Considering the fact that these writ petitions are filed only against the consequential demand notices and considering the apprehension of the petitioner that the respondent will indulge in recovering the dues as per the demand notices immediately, this Court is of the view that the very apprehension of the petitioner is not well founded in view of the statement made by the learned Government Advocate by placing reliance on the above Notification No.35 of 2020 dated 03.04.2020.
Petition disposed off.
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2020 (5) TMI 465
Exemption from income-tax under the RFCTLARR Act [Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013] - compensation received for compulsory acquisition of agricultural land and non-agricultural land - compensation received in respect of award or agreement which has been exempted from levy of income-tax vide section 96 of the RFCTLARR Act - HELD THAT:- There is force and merit in the submissions. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 came into force with effect from 01.01.2014. It is a matter of record that the parties to the lis; viz., the petitioner and the acquisition authority, for the purpose of coming out the way development had in unison agreed to acquire and give the land on the basis of certain conditions in fixing the market value. Petitioner, in lieu, thereof received 80% of the amount, i.e., ₹ 43,51,786/-. I would not be commenting on the claim of the petitioner with regard to the balance amount, as the matter is subjudice in this Court. The language of Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, do not leave any doubt in the mind that if the land is either acquired or the result of an agreement, it could not fall within the mischief of Income Tax Act, in other words, exemption is liable to be granted.
Central Board of Direct Tax vide the Circular No.36/2016 dated 25.08.2016 came out with a clarification that compensation received in respect of award or agreement which has been exempted from levy of income-tax vide section 96 of the RFCTLARR Act shall also not be taxable under the provisions of income-tax Act, 1961 even if there is no specific provision of exemption for such compensation in the Income-tax Act, 1961 - Thus assessment and demand notice cannot sustain and are hereby quashed. Decided in favour of assessee.
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2020 (5) TMI 464
Reopening of assessment u/s 147 - reason to believe - LTCG - non-compete fee which is a capital receipt and is exempt from tax - recomputation of Long Term Capital Gains arising or accruing as a result of sale of shares in so far as the exclusion of the garnishee payment from the cost of acquisition/cost of improvement/expenses incurred in relation to transfer - HELD THAT:- Revenue has rightly invoked provisions of Section 147 and we uphold reopening of the concluded assessment within four years from the end of the assessment as was made by Revenue in the instant case and more-so even scrutiny assessment was not framed by Revenue initially u/s 143(3) of the 1961 Act and return was merely processed u/s 143(1) - we reject the contentions of the assessee and uphold the reopening of the concluded assessment by Revenue u/s 147 - While upholding reopening of the concluded assessment u/s 147 in the instant case, we note that there was tangible material before the AO to reopen the concluded assessment as the assessee is claiming huge exemption of income by making incomplete, untrue and wrong claim before the AO and scrutiny assessment having not been made earlier by Revenue by invoking provisions of Section 143(3) read with Section 143(2) while originally processing return of income, and reopening of the concluded assessment u/s 147 is sought to be done within four years from the end of assessment, the Revenue is within its right to reopen the concluded assessment u/s 147 .
Ratio of decision in the case of Rajesh Jhaveri Stock Brokers Private Limited [2007 (5) TMI 197 - SUPREME COURT] shall be clearly applicable as processing of return of income u/s 143(1) cannot be equated to scrutiny assessment u/s 143(3) read with Section 143(2) of the 1961 Act.
As laid down by Hon’ble Supreme Court in the case of P.V.S. Beedies [1997 (10) TMI 5 - SUPREME COURT] that reopening of concluded assessment u/s 147 can be made by AO based on factual errors pointed out by audit team of department. In the instant case, we hold that the Revenue was within its right to reopen the concluded assessment u/s 147 and we uphold the reopening of the concluded assessment by Revenue in the instant case.
Long Term Capital Gains - Shares were held by Minor sons of the assessee - The minor sons of the assessee were neither Director of Aditya Leather Exports Private Limited nor guarantors for the said loan granted by Indian Bank to Aditya Leather Exports Private Limited - assessee being natural guardian of minor son has no right to use sale proceeds belonging to minor sons to discharge Indian Bank Loan without permission of the Court and then turn back and say that the said amount paid to Indian bank is to be allowed deduction on the ground of diversion of overriding tittle, which will lead to traversity of justice and illegality. Assessee has not come to Court with clean hand and we cannot be party to such illegal and perverse act of the assessee.
We hold that the said amount of ₹ 4.25 crores was paid by assessee out of non compete fee received by assessee and further it is mere application of income and there is no diversion by overriding title as the shares were never part of the charge in favour of Indian Bank. The said amount of ₹ 4.25 crores was paid by assessee to Indian Bank to settle defaulted loan obligation of Aditya Leather Exports Private Limited. Further, the assessee has entered into simultaneous agreement for sale of shares as well for non compete fee and Indian Bank was also in a position to exercise restraint over non compete fee which belonged to assessee and even Indian Bank could not have exercised any extended lien over shareholding of minor sons in ‘Kris Srikanth Sports Entertainment Private Limited’ without permission of Court keeping in view laws prevailing in India relevant to minor and guardianship. No such permission was ever taken from Courts by Indian Bank or by assessee under the laws applicable to minor and guardianship and hence extended lien if at all it is available was over non compete fee which in any case is held to be an exempt income.
Assessee will not get any deduction from taxable income of amount paid to Indian Bank to discharge liability of ‘Aditya Leather Exports Private Limited’ of the misconceived cannot be part of scheme of illegitimate tax evasion undertaken by assessee. Further, we also hold that payments made to Indian Bank by assessee to the tune of ₹ 4.25 crores was merely an application of income. Reference is drawn to decision of Perfect Thread Mills Limited v. DCIT [2019 (10) TMI 1198 - ITAT MUMBAI]. We order accordingly.
a) We uphold reopening of concluded assessment by AO invoking provisions of Section 147 of the 1961 Act.
b) We hold that sale consideration of ₹ 7.50 crores was duly received for sale of shares of ‘Kris Srikanth Sports Entertainment Private Limited’ which is to be brought to tax under provisions of 1961 Act including Section 60-64 of the 1961 Act.
c) We hold that non compete fee of ₹ 7.50 crores was exempt from tax being capital receipt.
d) We hold that payment of ₹ 4.25 crores was made by assessee to ‘Indian Bank’ to settle loan availed by ‘Aditya Leather Exports Private Limited’ which was in default, out of non compete fee earned by assessee which we have already held to be exempt from tax and now it is academic whether there was any diversion of income by overriding title or not. In any case for completeness, we hold that the assessee was not entitled for deduction by way of diversion by overriding title as there was no charge held by ‘Indian Bank’ and there was merely a compromise entered into by assessee with Indian Bank voluntarily to pay defaulted loans availed by said ‘Aditya Leather Exports Private Limited’. Thus, the payment to Indian Bank was merely an application of income and that too of an exempt income.
e) The question of taxability of ₹ 3 crores which was not received by assessee is again an academic question as we have already held that this non receipt of ₹ 3 crores was on account of non compete fee which is held to be exempt income.
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2020 (5) TMI 463
Extension of the stay of demand - pandemic Covid-19 situation and worldwide lockdown - limited working of courts - HELD THAT:- Due to the extraordinary circumstances arising on account of COVID-19 Virus, the Hon’ble Delhi High Court has taken suo-moto cognizance and initially passed an order where any interim orders concerning stay, etc. would stand automatically extended till 25.03.2020 or until further orders [2020 (3) TMI 1186 - DELHI HIGH COURT]. Thereafter, the Hon’ble Delhi High Court vide its order [2020 (5) TMI 417 - DELHI HIGH COURT]has further extended the period of interim order till 15.06.2020 or until further orders.
In case, the extension as mentioned hereinabove of the interim order causes any hardship of an extreme nature to any party to such proceeding, they are at liberty to avail appropriate remedy as per law.”
At present, there is no necessity to go into the merits of the captioned stay application
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2020 (5) TMI 462
Penalty u/s 271 (1) (c) - credit card expenditure incurred through the credit card of the assessee for the purpose of business of another company, partly disallowed in the hands of that company, added in the hands of the assessee as perquisites - Addition made in the hands of the assessee as ‘ perquisites’ based on the disallowance made of expenses claimed by one of the companies, which was controlled by the sons of the assessee - HELD THAT:- The assessee has disclosed complete details that these are the expenditure, which has been incurred by the assessee through his credit card; these expenses have been paid by one of the company as those expenses were pertaining to that company. Directors of that company examined during the course of search stated that this expenditure belonged to that particular company. The company claims such expenditure as allowable expenditure in its return of income, which travelled up to the level of the Commissioner of income tax appeals, who allows the appeal of that company and deleted the substantial part of the expenditure holding that they were for the purpose of the business of that company. In all these facts, the assessee has not concealed any particulars of his income. This was the statement of the assessee during the course of search also. This is confirmed by the directors of the company who were the relatives of the assessee. In view of this we do not find any merit in levy of the penalty on the assessee.
There is another facet of the issue also. During the course of assessment proceedings where the assessment has been made, while making an addition, the learned assessing officer has not recorded any satisfaction whether the assessee has concealed his income or has furnished inaccurate particulars of income. At the time of levy of the penalty in the penalty order the assessing officer in para number 2 has categorically held that a show cause notice was issued on 30/3/2014 wherein the assessee was called upon to explain that it has concealed the particulars of its true income and furnished inaccurate particulars of its income in terms of explanation 271 (1) (C) of the income tax act 1961.
In the same order in para number 4, while issuing the other show cause notice for levy of penalty on 16/2/2016, the twin challenges were shown to the assessee for the explanation.
As per para number 6 of the penalty order, the learned assessing officer has categorically held that assessee has concealed his income. CIT – A has also confirmed the penalty for concealment of income. Thus from the above facts it is clear that none of the twin challenges were specifically confronted to the assessee at the time of assessment order, at the time of issuing two different notices for levy of the penalty.
Penalty was levied on one of the charges i.e. of concealment of income. The purpose of the issue of notice is to put forth specific charge before the assessee for his explanation.
It cannot be allowed that no specific charges are made against the assessee and at the time of passing of the penalty order penalty is levied on one of those charges.
This issue is squarely covered in favour of the assessee by the decision of Sahara India Life Insurances Co Ltd [2019 (8) TMI 409 - DELHI HIGH COURT] is so held that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1) (c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. Therefore, also, the penalty levied by the learned assessing officer and confirmed by the learned CIT – A cannot be upheld. In the result, we direct the learned assessing officer to delete the penalty imposed under section 271 (1)( c) of the act. - Decided in favour of assessee.
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2020 (5) TMI 461
Allowability of the bad debts or business loss - HELD THAT:- AO as well as the Appellate Authorities under the law can review the facts of the case and redetermined the taxability of income and the claims to be allowed against the same in the subsequent years and if certain mistake or wrong decisions has been rendered in the earlier years, the same cannot be perpetuated for subsequent year and it will not be a legal impediment even though the assessment for the earlier years has attained finality.
Another important thing is that the claim of income or loss or any deduction has to be examined afresh in the year in which it is claimed. Law as culled out from the aforesaid judgment is that the bad debt or loss which is claimed in this year has to be determined in this year only without distributing the earlier assessment which has attained finality, and therefore, we hold that the claim of loss made in this year is allowable as business loss.
Business loss or bad debt - Set off - One fundamental principle while deciding such kind of matters is that, tax due should be collected as enshrined in the taxing statute and which is also the mandate of the Constitution of India. Here assessee is fastened with tax liability on a hypothetical income which did not materialize /received and in this situation a justice oriented approach is warranted when assessee has, on one hand incurred huge loss and on other, tax is charged merely on technicality that, since assessee had offered the tax under one particular head which it is claiming in this year to be set-off in the other head, is precluded from doing so. When assessee itself has pointed out its bonafide and legal claim before the AO that correct head in which it is assessable is ‘business income’, then acquiescence by the assessee in earlier year cannot be the ground to tax the same or deny any legal claim.
We hold that the claim for the amount as business loss or bad debt is allowable in revenue account in this year and is allowed to be set-off in the revenue account as claimed by the assessee and not as a capital loss. - Decided in favour of assessee.
Addition pertaining to sale of property in terms of Section 50C - Reference to DVO - HELD THAT:- Before the Appellate Authority, the assessee has categorically stated that though the circle rate of the vicinity area was higher than prevailing market rate but the land in question which was sold was adjacent to cremation ground which adversely affected the market rate of the property, and therefore, the property could not be fetched the circle rate and was sold at the lower rate than the circle rate.
As the buyer who has to contest the stamp value of the property before the Valuation Authority in which assessee has no control. In any case, when the assessee has disputed the stamp duty valuation because of clinching circumstances, then in our opinion matter should have been referred to DVO for the valuation of the said property. Accordingly, we remand this issue to the file of the Assessing Officer who shall refer the matter for the valuation of the property to the DVO and assessee will substantiate its case before the AO or DVO to justify the sale price. Accordingly, this ground is partly allowed for statistical purpose.
Disallowance u/s.14A - suo motu disallowance - HELD THAT:- It is an admitted fact that firstly the dividend yielding investment were only ₹ 4,54,065/- and disallowance @ 0.5% worked out to ₹ 2196/- which has been suo motu offered for disallowance in the return of income. This Tribunal in assessee’s own case in the case of Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] held that average value of investment which has yielded income during the year shall only be considered for the purpose of disallowance u/s.14A, and therefore, respectfully following the same no addition over and above can be made. In any case, the dividend income received by the assessee is merely which in any case the disallowance could not have been exceeded the exempt income. Thus, the order of the ld. CIT(A) is upheld and the grounds raised by the Revenue is dismissed.
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2020 (5) TMI 460
Penalty u/s 271(1)(b) - assessee has not complied with the notice u/s.142(1) - Assessment u/s 153A - assessee has not furnished the requisite information/document, i.e., complete bank statement as well as failure to give consent letter - HELD THAT:- Once there was no incriminating material, neither any such information was available with AO, then where is the question of roping such an addition or making such inquiry in the assessment proceedings. If there would have been any incriminating document pertaining to the alleged bank account found directly or indirectly linking the said bank account with the assessee during the course of search, then only the entire scope of inquiry for the purpose of assessment could have been made; and if there is no such incriminating material or seized document, then ostensibly assessment has to be confined to the seized document relating to the assessee.
Here the information which was available prior to the date of search was itself vague in so far as there was no mention of any account with HSBC Geneva Switzerland for which AO has levied the penalty that the assessee has not signed the consent waiver form. Consent waiver form was addressed to the HSBC Bank Geneva Switzerland and when the information itself did not mention such bank account, then where was the default of the assessee.
It could be very difficult to justify the levy of penalty for non compliance of notice u/s. 142(1), firstly, when the scope of inquiry by the AO is circumscribed to material found during the course of search; and secondly, there is no specific information or document that the assessee was maintaining any account with HSBC Bank Geneva Switzerland.
There is no provision u/s.142(1) that assessee is required to sign the document thrust upon him when the assessee himself has denied the content of the document and denied having maintaining such bank account. Penalty u/s. 271(1)(b) is leviable only when there is failure on the part of the assessee to comply with the notice issued u/s.142(1).
Here there is no failure on part of the assessee for non compliance as assessee has duly replied and filed submission before the AO and also before the Ld. CIT (A).
The assessee thus can produce any such document or account, which is necessary for the purpose of making an assessment; or if assessee is having such account or document, then if required by the Assessing Officer, he has to file or produce the same.
If assessee is neither having such document nor she was in possession of any such document or is denying the document, then where is the question of default on the part of the assessee in terms of Section 142(1). Nowhere Section provides that the assessee has to create a document for furnishing it before the Assessing Officer what is contemplated is that whatever the information or document or account is available with the assessee the same has to be produced before the AO.
We are in tandem with the submission of Mr. Bindal that there is genuine and bona fide belief that the assessee was not require to sign the consent waiver form, because as per the averments made by assessee, he never had any kind of bank account in overseas leave alone HSBC Bank Geneva Switzerland; and secondly, nothing incriminating was found during the course of search wherein the assessee was found to be directly or indirectly involved in opening any bank account with HSBC Geneva Switzerland. If all these circumstances have been duly explained before the AO, then not signing of consent waiver form constitutes reasonable cause and therefore in terms of Section 273 B penalty is leviable. Accordingly, the penalty is deleted on this count also. - Appeals of the assessee are allowed.
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2020 (5) TMI 459
TP Adjustment - Comparable selection - HELD THAT:- NTPCESL is entirely provided work by its holding company, NTPC, and various projects and contracts are being awarded by Government companies/Departments and as such, is functionally dissimilar vis-à-vis the taxpayer.
What has been discussed above, we are of the considered view that ld. DRP has rightly excluded NTPCESL as a comparable on ground of functional dissimilarity.
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2020 (5) TMI 458
Transfer Pricing Adjustment with respect to IT Enabled Services segment - comparable - HELD THAT:- Infosys BPO Ltd. cannot be considered as a comparable to the assessee company for the simple reason that the assessee company is engaged in rendering system integration, enterprise solutions and software development services to the clients of its Associated Enterprises (AE) and also to independent customers in the United Kingdom, the United State of America and others countries in Europe as well as India while being a subsidiary of Steria (UK). On the other hand Infosys BPO Ltd. is a part of the Infosys Group, a giant in the field of Information Technologies Services and being a part of the Infosys Group, ‘Infosys’, it thus enjoys significant brand presence and brand value plays a significant role in its ability to generate profit. We direct the AO/Ld. TPO to exclude BPO Infosys Ltd from the final set of comparables.
Foreign exchange fluctuations gains/losses should be treated as operating item if the same are in relation to the trading items emanating from the international transactions - HELD THAT:- It only remains to be verified as to whether the foreign exchange fluctuations incurred by the assessee relate to the trading items emanating from the international transactions or not. Therefore, for the limited purposes of verifying that the foreign exchange fluctuations of the assessee relate to the trading activities of the assessee, the issue is restored to the file of the Assessing Officer/Ld. TPO to verify the same and if it is found that the foreign exchange fluctuation relate to trading with the associate enterprises the Assessing Officer/Ld. TPO is directed to treat the same as operating item. Thus, this issue stands allowed for statistical purposes.
Transfer Pricing Adjustment in the Software Development Segment - HELD THAT:- The issue of Transfer Pricing Adjustment in the Software Development Segment is restored to the file of the AO/Ld. TPO for the limited purposes of verifying the computation of 35th and 65th percentiles and if the same is found correct then no Transfer Pricing Adjustment would have to be made. AO/Ld. TPO is also directed to verify as to whether the foreign exchange fluctuation in this segment relates to the trading activities with the AEs and if it is so found then the same is to be treated as operating item.
TDS u/s 195 - management services fees u/s 40(a)(i) - HELD THAT:- Beneficial provision in the DTAA between India and UK can be automatically incorporated in India-France DTAA by applying the Most Favoured Nation clause present in the Protocol to India-France (DTAA). It was also held that the services rendered by Steria France were managerial in nature and were, therefore, outside the ambit of definition of fee for technical services and further that the payments made to Steria France were not liable to withholding of tax under the provisions of section 195 of the Act. Thereafter, for Assessment Years 2010-11 and 2011-12, the Hon’ble Delhi High Court went on to decide the issue in favour of the assessee [2017 (11) TMI 200 - DELHI HIGH COURT] - Decided in favour of the assessee.
TDS u/s 195 - Payments made to Steria France for purchase of computer software licenses for the reason of failure to deduct tax at source - HELD THAT:- In the present case, considering that the issue under consideration is payment made towards software, which is a copyrighted article/asset, it needs to be considered whether the payment made is for obtaining rights in respect of copyright in the software, which is governed by the provisions of Copyright Act, 1957. Further, it would be pertinent to note that the Steria France is a resident of France (TRC and no PE certificates are placed in the paper book). As per section 90(2) of the Act, the provisions of the Act shall be overridden by the provisions of the DTAA, to the extent the latter are more beneficial to a nonresident assessee. In the present case, Article 13 of India - France DTAA deals with taxability of royalty paid by an Indian resident to French resident.
Accordingly, respectfully following the ratio in DIT vs. Infra Soft Ltd [2013 (11) TMI 1382 - DELHI HIGH COURT] we are of the considered the opinion that tax was not required to be deducted at source in respect of the payment made to Steria France for the purchase of computer software license/s and therefore, in view of the above cited judgment we direct the AO/TPO to delete the disallowance. - Decided in favour of assessee.
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2020 (5) TMI 457
Penalty u/s 271D - violation of provisions of section 269SS - notice barred by limitation u/s 275 - HELD THAT:- We find that there is no dispute that the assessee has supplied electrical goods to M/s Shri Om Sai Stones Industries vide sale bill no. 237 dated 24.05.2012 for a sum of ₹ 4,58,430/-. It is also not in dispute that the cash amount of ₹ 1 lac received earlier from M/s Shri Om Sai Stones Industries during the last quarter of the impugned financial year has been adjusted against the said sales and only the balance amount of ₹ 3,58,430/- has been received by the assessee.
The nature of amount so received is the cash advance against supply of goods and not loan/deposit or specified sum in relation to transfer of an immoveable property and the same cannot therefore be subject to the rigour of the provisions of section 269SS of the Act. The consequent penalty u/s 271D so levied is hereby directed to be deleted and the matter is decided in favour of the assessee.
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2020 (5) TMI 456
Penalty imposed u/s 271C - non-deduction of TDS on submission of Form No. 15G/15H in cases where interest paid exceeds basic exemption limit - HELD THAT:- Section 271C provides that if any person fails to deduct whole or any part of the tax as required, then he shall be liable to pay by way of penalty a sum equal to the amount of tax which he has failed to deduct. Section 273B of the Act provides that notwithstanding the provisions contained under Section 271C, no penalty shall be imposable upon the person or the assessee for any failure referred to in the aforesaid provision if the person or the assessee concerned proves there was reasonable cause for the said failure.
Assessee bank is expected to carry out basic verification of such declarations before the same are accepted and similarly, where the interest paid/credited exceeds the basic exemption limit during the relevant financial year, such declarations shouldn’t form the basis for non-deduction of TDS as the same would not be in consonance with assessee’s bank obligation under section 194A read with section 197A(IB) which overrides the provisions of section 197A(IA) - in terms of section 197A(1C), it has been provided that no deduction of tax shall be made in the case of an individual resident in India, who is of the age of sixty years or more at any time during the previous year, if such individual furnishes to the person responsible for paying any income of the nature referred to section 194A, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.
Coming to the specific transactions under considerations, the assessee bank has relied on the declaration in Form 15G furnished by Shri Vimal Mehta for financial year 2010-11 and 2011-12 and in Form 15H furnished by Smt Prem lata Bhateja who is over sixty years of age during the financial year 2012-13 and 2013-14 respectively and has not deducted tax while crediting/paying the interest in the respective financial years. As far as payment/credit of interest to Smt Prem Lata Bhateja who is over sixty years of age during the financial year 2012-13 and 2013-14, in terms of provisions of section 197A(1C), there is a reasonable cause for non-deducting the TDS and the assessee bank cannot be fastened with the penalty u/s 271C.
There is no dispute that the information so provided in the declaration is the responsibility of the customer who is furnishing such declaration and where the assessee bank relies on such declaration, no fault can lie solely with the assessee bank except that certain basis verification is expected while accepting such declarations and uploading the same in bank IT system.
In the instant case, we therefore find that where the assessee bank has relied on the declaration so furnished by the customer, there is no malafide which is reflected in the action of the assessee bank in not deducting the TDS and the assessee bank cannot be fastened with the penalty u/s 271C.
Add. CIT (TDS) has dropped the penalty proceedings vide his order dated 19.10.2016 in case of another branch of the same bank and there is nothing on record which reflects the basis for taking a different view in the case of present branch of the same bank while passing the impugned order which was subsequently passed on 12.01.2017.
No doubt the discretion to levy the penalty or to drop the penalty proceedings is entirely the discretion of the appropriate authority who is authorized under the statute, however, where in case of same bank, different approach is adopted by the same authority in exercise of its powers so bestowed by the statutory, the same reflect arbitrariness in absence of any distinguishing facts and circumstances so highlighted and any such arbitrary levy of penalty reflects non-application of mind by such authority and penalty so levied is liable to be deleted.
We find that there exist a reasonable cause for non deducting the TDS by the assessee bank and the penalty so levied for the respective years is hereby directed to be deleted and the matter is decided in favour of the assessee bank and against the Revenue.
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2020 (5) TMI 455
Non collection of Tax at Source (TCS) - Order u/s 206C(6) r/w 206C(7) - requisite jurisdiction with ITO Jaipur - order as barred by limitation - HELD THAT:- Ground relating to challenging the order passed by the Assessing officer for want of jurisdiction was taken before the ld CIT(A), however, it appears that the ld CIT(A) has wrongly read the ground relating to jurisdiction and limitation together and has dismissed both these grounds as not pressed. Given that this ground was taken by the assessee before the ld CIT(A) and not adjudicated upon, the matter deserve to be set-aside to the file of the ld CIT(A) to adjudicate the said ground of appeal after providing reasonable opportunity to the assessee. In the result, the ground no. 1 is allowed for statistical purposes.
Demand towards TCS - sale of Tendu leaves - HELD THAT:- We find merit in the contention of the Id AR that the amount of ₹ 1,77,360 represents the sale amount on which the TCS is to be determined and it doesn't represent the amount of TCS and therefore, the liability of the assessee is only to the extent of TCS on such sales and not on the whole sale amount. The matter is accordingly set-aside to the file of AO to verify the same and determine the quantum of TCS and consequent interest thereon which is payable by the assessee in relation to the impugned transaction. The ground of appeal is thus allowed for statistical purposes.
Charging of interest under section 206C(7) - Short / Non Collection of tax at source under section 206C(6) alleging that assessee has committed a clear default of non-collection of TCS - HELD THAT:- Assessee firm shall be liable to pay interest from the date on which such tax was collectible to the date of furnishing of return of income by the respective buyers excluding the period prior to 1.07.2012 in respect of which no interest shall be leviable. The decision of the Coordinate Bench in case of Chandmal Sancheti [2016 (8) TMI 952 - ITAT JAIPUR] the decision of the Hon'ble Karnataka Court in case of Bharat Hotels[2015 (12) TMI 1469 - KARNATAKA HIGH COURT] and Solar Automobiles [2011 (9) TMI 637 - KARNATAKA HIGH COURT] were rendered for the period prior to the amendment brought in by the Finance Act, 2012 whereby proviso to section 206C(7) has been inserted with effect from 1.7.2012, have not considered the said provisions as amended and are therefore, distinguishable and doesn't support the case of the assessee firm - findings of the ld CIT(A) which are in consonance with the proviso to section 206C(7) are hereby confirmed subject to the modification that no interest shall be leviable for the period prior to 1.07.2012 and to that extent, the assessee shall be eligible for relief. The ground of appeal is thus partly allowed.
CIT(A) not considering that the case fall under under section 206C(1A) r/w Rule 37C in as much as the entire subjected sales of Tendu leaves was made to the ultimate consumers for use in manufacturing, processing or producing of Beedies and hence the provision of section 206C was not applicable and have been wrongly invoked by the AO - whether there is a reasonable cause for such delay in furnishing such certificates and the delay can be condoned and such certificates can be taken on record and admitted under Rule 29? - HELD THAT:- there is no culpable negligence or malafide on the part of the assessee in not obtaining these declarations and the assessee cannot be penalized where all along it acted diligently based on advice of his Counsel and subsequently, when the Revenue made it aware of its obligation to obtain such declarations, it made necessary efforts and finally got these declarations. As held by the Courts, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. The delay in filing such declarations being a technical breach is thus condoned and the same are being admitted as there is substantial compliance with the requirement of filing the declarations.
The matter is set-aside to the file of the Assessing officer for verification of declarations so filed by the assessee in Form 27C and examination of claim of the assessee under section 206C(IA) afresh in accordance with law. The ground of appeal is thus allowed for statistical purposes.
CIT(A) not allowing relief to the assessee firm on the basis of additional evidence without calling for remand report under Rule 46A and enquiry under Sec 250(4) of the Income Tax Act, 1961 - HELD THAT:- It can't be denied that the assessee submitted the certificates and declarations in Form 27BA exactly in the same manner but the department did not feel aggrieved in that year. Therefore, now filing the appeal on the same issue when the legal and factual position is admittedly the same and without bringing out any material change in the facts of the legal position, the department cannot be permitted to agitate the same issue in later year. This contention is fully supported by the various decisions of the Hon'ble Supreme Court and particularly in the case of Berger Paints India Ltd. v. CIT [2004 (2) TMI 4 - SUPREME COURT]
As observed by the Assessing Officer that he has gone through the documentation so submitted by the assessee firm and on perusal thereof, he noticed that complete information in the Form/certificate have not been given by the accountant/party as required by the legislature and most of the columns are either not filled up as required or simply mentioned as per details/enclosure - accountant has signed the forms with conditional remarks "As certified by the buyer" whereas the forms should have been filled up and certified by the accountant itself on the basis of records. Further, some of the parties have not filed return on or before due dates prescribed under section 139 of the I.T. Act, 1961. Further, on appeal, we find that these certificates in Form 27BA from the Chartered accountant and related declarations from the buyers have again been considered and examined by the ld CIT(A) and the observations of the AO regarding these certificates were not found tenable by the ld CIT(A) and basis his independent review and examination, the relief has been provided to the assessee firm as per his findings in para 5.3 of his order which we have reproduced supra. The Revenue has not pointed out what further evidence by way of additional evidence has been filed by the assessee during the appellate proceedings before the ld CIT(A). Therefore, the ground so taken by the Revenue is hereby dismissed.
Assessee deductor failure to make payment of interest under section 206C(7) - whether at the time of submitting the certificates in Form 27BA as required under proviso to section 206C(6A), the assessee is required to deposit interest and give details of such interest deposit in such certificates? - HELD THAT:- All it requires is that the accountant should certify as to whether the buyer has furnished his return of income, has taken into account such amount for computing income in such return of income and has paid taxes due on the income declared by him in such return of income or not. Further, on perusal of Form 27BA, we find that besides such certification, it contains a statement whether the assessee has to specify whether it has paid any interest under section 206C(7) or not for non-collection or short collection of taxes. Thus, there is no mandatory requirement to pay any interest under section 206C(7) as part of certification in Form 27BA and where the assessee has already paid, he has to specify that he has paid and where he has not paid, he has to specify accordingly. It is only an information seeking requirement and not a requirement in absence thereof which will makes the certification in Form 27BA invalid where there is substantial compliance as to the mandatory requirements of certification. In the result, the ground so taken by the Revenue is dismissed.
Difference between the provisions of the TDS and TCS - HELD THAT:- Provisions of section 206C are analogous and a measure for compliance of collection of tax at source as a similar measure for compliance of deduction of tax at source is provided under section 201 of the Act. Regarding decision of the Hon'ble Supreme Court in the case of M/s Hindustan Coca Cola (P) Ltd. [2007 (8) TMI 12 - SUPREME COURT] we find that the ratio so laid down therein has been subsequently brought on the statue books by way of proviso to sub-section (6A) to section 206C of the Act. Therefore, where the specific amendment has been brought in by the legislature accepting the ratio so laid down by the Hon'ble Supreme Court, we see no infirmity in the findings of the Id CIT(A) where he has held that the ratio so laid down continues to apply in context of collection of taxes at source. In the result, the ground so taken by the Revenue is hereby dismissed.
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