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2024 (9) TMI 1382
Seeking quashment of the order and refund of tax - functionality of adjustment of refund against the outstanding (TAN/PAN) demand - Rejection of request for refund for the relevant assessment year can be raised, only if the assessee files its application on the TRACES Portal in the prescribed form i.e. Form 26B and secondly there is no provision available on the TRACES portal to adjust the outstanding demand of PAN or TAN against the pending refunds of the TAN and requested the petitioner to deposit the aforesaid demand
HELD THAT:- Section 243 provides payment of interest on delayed refunds that shall start accruing after the expiry of the period of three months from the date of the order granting the refund. Section 241A has been inserted by Finance Act,2001 w.e.f.01.04.2017 about the withholding of refunds in certain cases but the same would not apply in this case because these assessments are in respect of years 2010-11 and 2011-12. Section 245 also provides a set off of refunds against tax remaining payable which says that where under any of the provisions of this Act, a refund is found to be due to any person, the Assessing Officer, Deputy Commissioner (Appeal), Commissioner (Appeals) or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, may, in lieu of payment of refund, set off the amount to be refunded or any part of that amount, against the sum, after giving in an intimation in writing to such person of the action proposed to be taken under this section.
Therefore, in view of the above, after the order passed by ITAT, the respondents are bound to refund the amount to the petitioner with interest without there being any formalities to be completed by the petitioner. The non-functionality of the TRACES Portal shall not be grounds for denying the benefit arising out of the statutory provision under the Income Tax Act.
TRACES is nothing but a online Portal of the Income Tax Department to connect all the stockholders involved in the administration and implementation of TDS and TCS. The TDS is a Centralized Processing Cell created for TDS reconciliation analysis and correction enabling system which cannot run contrary to the provision of the Income Tax Act. The rights which have been given to the assessee under the Income Tax Act cannot be withheld due to the nonfunctionality of the TRACES.Let the entire exercise be completed within 30 days from the production of a certified copy of this order.
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2024 (9) TMI 1381
Revision u/s 263 - order of assessment passed under sec.153A - additions u/s 69A - Maintainability of the writ petition despite the availability of an alternative remedy of appeal under Section 246(A) - HELD THAT:- It is settled principle of law that the alternative remedy of appeal would not be a bar to exercise jurisdiction under Article 226 of the Constitution of India. However the same, as held by the apex court, is subject to certain limitations that warrants the exercise of jurisdiction, viz., where the order impugned is without jurisdiction, is in gross violation of principles of natural justice or is beyond the jurisdiction, or where the vires of the provisions of the Act are under challenge. I
In the instant case, pursuant to the order of Revision passed by the CIT u/s.263 of the Act, the assessing officer has issued notices u/s 142 (1) calling for details of the un-secured hand loans and confirmations from the said creditors. The petitioner has failed to furnish relevant information asked for, except to state, that the material that was relied upon by the assessing officer to come to a conclusion that the petitioner had accepted unsecured loans, is bogus material and the same is resultant of the fraud played by his ex-employees.
When the assessing officer had asked for the details, such as name, address and designation, of such of those employees who alleged to have played fraud on the petitioner and the details of the action taken against such employees, the petitioner did not respond to the same. Thus, the petitioner has failed to discharge the burden cast upon him. In the absence of any other material placed by the petitioner, the assessing officer proceeded with the assessment. The contention of the petitioner, that, the material that formed the basis for making the addition is Xerox copies of the promissory notes found at the premises of M/s.Raki Avenues Private Limited, which does not belong to him, and based on the said material the assessing officer could have made no addition, would involve a disputed questions of fact and the same would not be within the realm of this court under Art.226 of the constitution of India to be gone into.
The act of the assessing officer bringing to tax a receipt of a sum, which the assessee has failed to explain, cannot be said to be without jurisdiction under the provisions of the Income-tax Act. It is for the assessee to establish before the assessing officer that the receipt is not his receipt or that the same is not taxable.
Petitioner has not demonstrated any of the exceptional situations referred to above that would require this Court to interfere under Art.226 of the Constitution of India.
Following the judicial dicta on the issue, without going into the issue of taxability of unexplained unsecured loans in the form of promissory notes, we are of the view that the order of the assessing officer cannot be construed as without jurisdiction or in violation of the principles of the natural justice. We hold that the petitioner has not made out any case justifying the bypass of statutory effective remedy of appeal and approaching this Court under Art 226 of the Constitution of India. The writ petition is, therefore, not entertainable.
Writ Petition is accordingly dismissed. We however grant liberty to the petitioner to approach the appellate authority under Section 246A of the Income Tax Act.
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2024 (9) TMI 1380
Validity of the Section 234E - late fee imposed u/s 234E while processing the statement of TDS u/s 200A - HELD THAT:- In the present case, the respondent had imposed the late fee only u/s 234E of the Act for the assessment years 2012-2013, 2013-2014. However, Section 200A of the Act was not introduced during the said assessment years and it was introduced only with effect from 01.06.2015. Therefore, in the absence of any provisions u/s 200A of the Act, the respondents ought not to have imposed late fee under Section 234E while processing the applications for TDS under Section 200A. Hence, in such view of the matter, this Court is of the opinion that the impugned Demand Intimation Letters are liable to be set aside.
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2024 (9) TMI 1379
Penalty u/s 271B - failure to get accounts audited - Applicability of section 44AB to the assessee - as argued arrangement of the Mother Dairy with the Appellant as per terms & conditions of the agreement, according to which the relationship between them is that of Principal & Agent and, therefore, there is no requirement of tax audit - HELD THAT:- We are inclined to agree with the AR that the DGR has used word Commission which shows that the relationship between the Mother Dairy is that of Principal (Mother Dairy) to agent (Assessee). Even though the Mother Dairy has given nomenclature of Principal-to- Principal in its certificate, the nature of activity undertaken by the assessee shows the actual relationship between the Mother Dairy and assessee is that of Principal to Agent.
We are of the opinion that the sales proceeds belonged to Mother Dairy and the assessee turnover was only commission from the sales of Dairy and milk products. The ld DR has not controverted the fact that in earlier years, no penalty was levied u/s 271B on this issue.
As the value of gross commission received from the aforesaid business as turnover is much below than the prescribed limit of Rs. 1 Crore u/s 44AB of the Act, we hold that the provisions of section 44AB of the Act were not attracted in his case. The CBDT Circular No. 452 [F. No. 201/3/85-IT(A- II)], dated 17-3-1986 also supports our view which in cases of kachha arahati has advised that the turnover did not include sales effected on behalf of the principals and only gross commission has to be considered for the purpose of section 44AB.
The remuneration of a kachha arahtia consists solely of commission and he is not interested in the profits and losses made by his constituent as is not the case with the pucca arahtia.
In the instant case, we are of the opinion that the assessee is similarly placed to that of the kachha arahtia, who gets remuneration which consists solely of commission and he is neither interested into nor entitled to the profit and losses made by his principal (ie., Mother Dairy in given case).
Thus penalty levied u/s 271B upheld by the ld. CIT(A) CIT/NFAC is quashed - Decided in favour of assessee.
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2024 (9) TMI 1378
Revision u/s 263 - unsecured loans received by the assessee was not duly verified by the Ld.AO - PCIT mentioned that assessee has not filed relevant documents in relation to the verification of unsecured loan - HELD THAT:- AO only added back 10% of the unsecured loan. The addition of @10% unsecured loan has no basis; even there is no application of mind for imposing Section 68 - assessee was unable to submit the documents which are convergent with the verification of unsecured loan creditors.
AR respectfully relied on the order of Accumax Lab Devices Pvt Ltd. [2024 (7) TMI 494 - ITAT AHMEDABAD] is distinguishable in fact. In impugned assessment there is no verification from the part of the ld. AO. AR took the plea that the issue is pending before the appellate authority.
But the issue was challenged only the 10% of addition u/s 68 of the Act. The revisional order pertains to balance “unsecure loan” creditors - Here the AO was fully ignorant about the verification of unsecured loan creditors which caused the impugned assessment order as erroneous and prejudicial to the interest of the revenue. Mere submission of the documents will not serve the purpose of section 263. Assessee appeal dismissed.
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2024 (9) TMI 1377
Scope of Limited Scrutiny - computation of capital u/s 45 of the Act and providing exemption u/s 54B - provisions of section 54B linked with section 48 of the Act, for enhancement of Capital gain u/s 45 - during the course of hearing, the assessing officer had noticed the different fact, about ‘Fair Market Value’ (FMV) claimed u/s 45 by the assessee, and observed that assessee has claimed fair market value, (FMV), under section 45 of the Income Tax Act, on higher side and therefore invoked provision of section 55A
HELD THAT:- We find that case of the assessee, was selected for Limited Scrutiny, for verification of limited issue of deduction claimed u/s 54B of the Act, however, the assessing officer has exceeded his jurisdiction by disallowing the fair market (FMV), claimed u/s 45 of the Act, which is beyond the jurisdiction assigned to the assessing officer, under the limited scrutiny therefore, we find that assessing officer has violated the CBDT instruction No. 5/2016, dated 14.07.2016, read with instruction No. 20/2015, dated 29.12.2015.
Thus, the assessment orders passed u/s 143(3) of the Act, dated 14.12.2016, become bad in law. The assessee`s case was selected for limited scrutiny to examine the provisions of section 54B of the Act and not for examination of provisions of section 45 of the Act, (determination of cost of acquisition) therefore, we find that assessing officer has exceeded his jurisdiction assigned to him. If the assessing officer wants to examine cost of acquisition, (which is not the subject matter of limited scrutiny) then in that circumstances, the assessing officer has to take permission from the higher authorities, which the assessing officer failed to do so.
Assessee`s case was selected for limited scrutiny to examine two issues, viz: (i) Large Investment, and (ii) Deduction claimed u/s 54B of the Act, however, the assessing officer has not made addition on both the issues of Limited Scrutiny Notice. AO cannot travel beyond the issue raised under Limited Scrutiny, as stated in the two instructions of CBDT, which are binding to all the Assessing Officer, viz, (i)Instruction No. 20/2015, dated 29.12.2015 and (ii)Instruction no. 5/2016, dated 14.07.2016. The Limited Scrutiny has narrow scope of inquiry, as mentioned in Para 3 (d) of Instruction No. 20/2015 and Para No. 4 of Instruction No. 5/2016 of the CBDT.
Thus, we find that the assessing officer has violated the Board Instructions and therefore the addition needs to be deleted.
Thus, we find that provisions of section 54B of the Act, cannot be linked with section 48 of the Act, for enhancement of Capital gain u/s 45 of the Act. If the assessing officer wants to enhance the Capital Gain u/s 45 of the Act, the assessing officer must have to take prior permission of Pr. CIT, which he has failed to do so. It is settled law that the Revenue Authorities are not allowed to travel beyond the issues involved in limited scrutiny cases, except by completing the relevant formalities before proceeding to other issues, which in the instant case does not appears to have adhered to. That is, if a case is taken for limited scrutiny by the A.O., he cannot exceed the jurisdiction beyond the one which he has carved out himself in the notice issued for limited scrutiny. In the present case, the Ld. Assessing Officer has travelled beyond his jurisdiction and made addition on the issues which are not part of the reasons for limited scrutiny. Appeal of the assessee is allowed.
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2024 (9) TMI 1376
Addition made in proceedings u/s. 153C - whether any incriminating documents relating to assessee unearthed as a result of search, when the case was already concluded i.e., unabated - HELD THAT:- Five concerns have been named in the Satisfaction Note. It is not clear as to how the documents pertain to the assessee - The said documents are not incriminating as per the satisfaction note since nowhere the name of the assessee is there. If that be so, how addition can be perpetrated against such documents. It is surprising to note that no addition has been made against the documents marked as “incriminating” Annexure B–2(23). The document dated 28/04/2017, is only an estimate of profit provided the price is quoted within the certain range. Nowhere it has been brought on record that actual price charged for resin capsules was within the same price range.
Similar orders were passed verbatim for the other entities namely Techno Precision Engineers Ltd. and Support Technologies Ltd. The same document is pertaining to multiple entities as per the Assessing Officer who is same for all the assessees. We ask a question to ourselves as to whether it is at all possible? Abject non–application of mind and brazen untenable stand of the Assessing Officer is displayed.An estimated profitability statement is held to be constant for seven years ignoring inflation. Then why for purpose of computing long term capital gain cost inflation index changes every year as enshrined in section 48 of the Act.
The Satisfaction Note drawn on a combined basis without any specific reference to any year is baseless and unsustainable and defies common logic. The bedrock of usurpation of jurisdiction under section 153C of the Act is missing palpably in the instant case since these documents are not conclusively established to pertain with the assessee nor do the same have a bearing on the determination of total income for the respective years. The year could then be subjected to action under section 154C of the Act only when the assessment is likely to be influenced or impacted by the material discovered. Section 153C of the Act neither mandates nor emerges a mechanical or an en–blank exercise of power. Hence, the assessment order is unsustainable on legal grounds. Decided in favour of assessee.
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2024 (9) TMI 1375
Unexplained deposit made in bank accounts during demonetization period -Receipt from the sale of agricultural produce - HELD THAT:- The receipt shown as source from agriculture for making deposit during demonetization period was also a part of total agricultural receipts shown by assessee for the financial year 2016-17.
Since the AO has accepted net agricultural income generated by assessee from gross receipts, the receipt of Rs. 6,00,000/- forming part of overall receipts of Rs. 9,19,400/- is also accepted by assessee. Therefore also, the AO is not justified in adopting a contradictory stand of rejecting the receipt while assessing the very same receipts as part of gross-receipts and for that matter net agricultural income of Rs. 2,29,100/- for the whole year.
Receipt from the recovery of loans given to friends/relatives - The assessee has filed supporting evidences of all loan given and recovered which are A/c Confirmations, Notarised Affidavits of parties and Aadhar Cards of parties as ID proofs (death certificate in case of one deceased), copies of these documents were also filed to CIT(A). On examination, we find that the parties have given their A/c Confirmations in which details of loans taken from assessee and repayments made to assessee with dates are mentioned which tally with the details submitted by assessee to AO. The same details are also testified by respective parties by way of notarized affidavits (except one person which had already deceased). The id proof of parties in the shape of aadhar cards are also available. The evidences filed by assessee prove the transactions claimed by assessee. In that view of matter, the addition made by AO is found not sustainable.
Assessee appeal allowed.
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2024 (9) TMI 1374
Penalty proceedings u/s 271B - failure to get accounts audited or initiated - HELD THAT:- Levy of penalty is discretion on the part of the AO in the current case, it is fact on record that the main income of the assessee is only earning of commission out of sales of milk, therefore, the assessee is getting only agency commission from the mother dairy and the gross sales reported by the assessee are not the actual sales of the assessee and it is the sales of mother dairy.
Since, the assessee is a small time agent working for the mother dairy, he purchases milk pockets in bulk and sells the same on daily basis. His real income is only percentage of commission received from mother dairy, therefore, as per assessee is concern, the gross income is only the commission income. As per the facts on record even the Assessing Officer observed that the assessee has not maintained any books of account and he merely purchases milk on daily basis and sell the same on daily basis remitting the amount collected to the mother dairy and retains the commission income with him.
Therefore, as per the facts on record it is not possible on the part of the assessee to maintain any books based on the nature of activities carried on by the assessee. In order to maintain the books and requirement to get his book audited depends upon the gross income, in this case, it is only the gross commission not the sales, therefore, we do not see any reason to levy the penalty u/s 271B - Decided in favour of assessee.
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2024 (9) TMI 1373
Rejecting the registration of the assessee trust u/s.12AB and recognition u/s 80G - HELD THAT:- Application of the assessee for registration u/s. 12AB was rejected on the objection of fact that the assessee is not registered under the Rajasthan Public Trust Act, 1959, for the assessee has made an application for registration and as regards the genuineness of activities the observation made by ld. CIT(E) is curable in nature and therefore, considering the arguments of the parties we are of the considered view that so far the issue of registration u/s. 12AB of the Act the assessee require one more opportunity to represent the correct fact and produce the registration certificate under RPT Act.
Thus, looking to the interest of justice and considering the prayer of assessee submitted that the assessee be given a chance to defend the issues on its merit before the ld. CIT(E)and the observation made are curable in nature we considered the prayer of the assessee to remind the case to the file of CIT(E) for making a decision a fresh and thus we set aside the order dated 22.03.2024 passed for rejecting the registration of the trust u/s. 12AB with a direction to the assessee to produce all the related to the issue. Appeal of the assessee allowed for statistical purpose.
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2024 (9) TMI 1372
TP Adjustment - comparable selection - claim raised before ITAT for the first time - HELD THAT:- Infosys BPO Limited, Eclerx Services Limited, Crossdomain Solutions Pvt. Ltd. excluded on the grounds of functional dissimilarity as in assessee’s own case in earlier assessment years.
Exclude MPS Limited from the list of comparable - There is no dispute about the facts that no objection was raised by the assessee before the revenue authorities regarding the exclusion of MPS Limited from the list of comparable. The claim has been raised before us for the first time. Respectfully relying on the decision of Quark Systems (P) Ltd. [2009 (10) TMI 591 - ITAT, CHANDIGARH] we hold that taxpayer is not estopped from pointing out that MPS Limited had wrongly been taken as comparable. While admitting the fresh claim of the assessee to include MPS Limited included in the comparable, we make no comments on merit except observing that assessee from record has shown its prima facie case. Further the claim may be examined by the Ld. AO. Therefore, we deem it fit and proper to remit the matter to the file of the Ld. AO for consideration
ACE BPO Services Private Limited rejected by the revenue authority due the reason that, sufficient financial information to verify related party transaction(“RPT”) were not available - AR submitted that, the annual report of ACE BPO Services Limited is now available on the public domain and contended that ACE BPO Services Limited should be considered as the comparable company as it is engaged in ITeS and passes all the filter applied by the Ld. TPO - Thus if the comparable is functionally same as that of tested party then same cannot be rejected. Hence we direct the Ld. AO to verify the RPT from the available data and to permit the assessee to demonstrate the RPT from the available data and consider the same as a good comparable.
Inclusion of Informed Technologies Limited as rejected by the revenue authority as functionally different and had high non current investment - As relying on Infor (India) Pvt. Ltd. [2019 (9) TMI 973 - ITAT HYDERABAD] we direct the Ld. AO to verify afresh and consider Informed Technologies Limited as a good comparable after providing an opportunity of being heard to the assessee.
Interest on outstanding receivables - In the case of PCIT vs. Tecnimont (P.) Ltd. [2018 (7) TMI 490 - BOMBAY HIGH COURT] held that interest chargeable on delayed recovery of export receivables from AEs should be taken at LIBOR rates for determining ALP of notional interest on delayed recovery. Respectfully following the same, we are of the considered opinion that the ends of justice would be met by accepting the interest rate at LIBOR+200 points. We direct the Ld. AO to adopt the same. Therefore this ground of the assessee is allowed in part.
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2024 (9) TMI 1371
Validity of Reopening of Assessment U/Sec 147 - Assessment on the basis of information received from the Investigation department of the Income Tax based on the Statement recorded of accommodation entry provider - main contention of the assessee is that the second reopening was done merely based on the information received for DDIT(Inv) and that the AO has not done any independent enquiry more so when the assessment is reopened beyond four years.
HELD THAT:- From the perusal of the assessment order we notice that the AO has acknowledged the fact that the assessee has submitted the bills, delivery challan, stock register etc., pertaining to the alleged bogus transaction - AO also acknowledges the fact that the assessee has submitted the ledger copy of M/s. Giriraj Enterprises, Bank statements, party confirmation etc. - We also notice that the AO is not disputing the fact that the goods bought through alleged bogus transactions have been sold as reflected in audited financial statements.
We further notice that the AO has not recorded any adverse findings with regard to the documents submitted by the assessee with regard to the alleged bogus transactions. We further notice that the AO has recorded in the assessment order that the input credit on the alleged bogus purchases has not been denied and that the supplier has not been named as the hawala party.
AO is making the addition for the reason that the party has admitted having entered into bogus transaction and that the assessee has not produced the parties. During the course of hearing the ld AR drew our attention to the statement of oath recorded from Mr. Harish Chandak, to submit that he has not mentioned having entered into any bogus transactions with the assessee - We notice that during cross examination by the assessee's partne has categorically denied having given hawala bills to the assessee .
From the perusal of the entire facts in assessee's case as explained herein above, it is clear that the AO has completed the reassessment without proper appreciation of the facts and evidences submitted by the assessee in support of the alleged bogus purchases and merely based on the information from DDIT(Inv). Therefore in our considered view the entire reopening is carried out only on the basis of report of investigation wing without any independent enquiry and without any tangible material in the hands of the AO to show that the assessee was involved in taking accommodation entry towards bogus purchases.
Accordingly the addition made by the AO is not sustainable and liable to be deleted. Decided in favour of assessee.
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2024 (9) TMI 1370
Non-issuance of notice u/s 143(2) by Jurisdictional AO - AO had suo moto transferred the assessment to ITO, Ward 2(2) Noida - appellant has contended that the statutory notice u/s 143(2) was issued by ITO, Ward-40(1), Delhi and another such notice was issued by ITO, Ward-2(2), Noida despite the fact that the assessment proceedings for AY 2014-15 were pending with ITO, Ward-70(2), Delhi at that time - HELD THAT:- As in the present case, as assessee had himself mentioned the Noida address in the ITR and on his request only the case was transferred to Delhi, so assessment is not vitiated. The question actually to be examined was if jurisdictional AO had issued notice u/s 143(2) with in time which Revenue has failed to justify and establish the validity of issuance of the notice u/s 143(1) by ITO, Ward 40(1) on 20.09.2016.
We find no justification as to how the tax authorities of Noida Office, when transferred the case of the assessee to Ward 40(1), Delhi, even to say on request of assessee, the same ultimately, reached Ward 8(2), Delhi, from where the final assessment order was passed. We are of the considered view that even if it is assumed that in accordance with the order dated 15.11.2014 u/s 120 of the Act, the jurisdiction vested with Ward 8(2), Delhi, then, why the assessment for the previous year AY 2014-15 stood transferred from the ITO, Ward 40(1) to ITO 70(2) from where the assessment order was passed on 31.01.2017.
We are of the considered view that it is not a case where the notice was issued and assessment completed by invoking provisions of concurrent jurisdictions, rather, it appears that in whimsical manner the AOs had exercised jurisdiction under the Act and transferred the assessment. There is no substance in the contention that due to sections 292BB or sub-section (3)(a) of section 124 of the Act, the assessee is barred to raise the ground objecting to the assumption of jurisdiction. More particularly when objections were raised at earliest and even considered by assessing officers. Decided in favour of assessee.
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2024 (9) TMI 1369
TP Adjustment - comparable selection - HELD THAT:- E-Infochips Bangalore Ltd. - No reason to exclude this company as a comparable. We may point out that merely because this company has earned some extra ordinary profit is no reason to exclude this company as long as this company continues to be comparable with that of the assessee on FAR analysis. In view of the above, we do not find any reason to exclude this company and accordingly, the ground raised by the assessee is dismissed.
Persistent Systems Ltd. - If we look into schedule 11 where bifurcation of sales and software services and products are mentioned, then we find that this company does not have any inventories showing software products and though this company has classified as sales of software products. In view of the above, it is difficult to accept the contention of the assessee that this company is into product development. Further, if we look at the revenue recognition, then only we find that the Revenue the assessee is recognizing the income from software services only and there is no reference of making development of any products. We do not agree with the contention of the assessee and accordingly, this ground is also dismissed.
Mindtree - Assessee has not objected to the inclusion of this company in the list of comparable selected by the TPO while filing objection in response to the show cause notice before the TPO. Before the learned TPO, the assessee has only raised objection with respect to E-Infochips Bangalore Ltd, Infosys Technologies Ltd, Kal Infosystems Ltd, L&T Infotech Ltd. No objection has been filed by the assessee with respect to any other comparables. In our view, once the assessee has forgone his right to raise objection before the TPO, it is not permissible in law to raise the objection before the Tribunal at this stage. Further, we are of the opinion that merely because the company is owning intangible and earned reasonable margin cannot be a ground to exclude this company if on FAR analysis, it is found to be otherwise comparable with that of the assessee. In view of the above, we do not find any reason to exclude this company. Accordingly, this ground is also dismissed.
Interest on Trade Receivables - Admittedly, this Tribunal in the case of Satyam Ventures Engineering Services [2024 (6) TMI 147 - ITAT HYDERABAD], Zeta Interactive Systems India Private Limited [2022 (6) TMI 1383 - ITAT HYDERABAD], M/s. Apache Footware India Private Limited etc. [2023 (4) TMI 521 - ITAT HYDERABAD] has decided the issue in favour of the Revenue by holding that the SBI bank rate of 6% with a credit period of 60 days is to be applied for determining the interest on delayed trade receivables. However, in the present case, the Revenue is not in appeal against the finding given by the DRP and the assessee cannot be worsened off in the appeal filed by the assessee.
If we look into the order passed by the DRP where the DRP has decided the issue in favour of the assessee by restricting the interest to be paid at LIBOR Plus 250-point basis, though the said decision of the DRP is contrary to the decision of the Tribunal. However, since the Revenue is not in appeal against the decision of the DRP, therefore, we deem it proper to dismiss the ground raised by the assessee and sustain the order passed by the DRP by reiterating that the delay on trade receivable will be restricted to LIBOR Plus 250 point basis, as there is no appeal of the Revenue and the assessee cannot be worsened off in its appeal by following the decision in the case of Satyam Ventures [2024 (6) TMI 147 - ITAT HYDERABAD]. Thus, this ground of appeal is dismissed.
Set off of losses of the Hyderabad Unit against the profit of the Pune Unit - Since in the present case, the assessee has not raised ground before the learned DRP and therefore, the grievance of the assessee is not emanating from the final assessment order or from the direction of the DRP. Therefore, the assessee is not entitled to raise this ground before the Tribunal now. We may also point out that no deduction u/s 10A or 10B or under Chapter VI A is allowable in respect of income by which the total income of the assessee is enhanced after computation of income under sub section 92C, in view of 1st proviso to Section 92C(4) of the Act. Appeal raised by the assessee is dismissed.
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2024 (9) TMI 1368
Seeking grant of bail - offence committed under Sections 135(1)(a) and 135(1)(b), and punishable under Section 135(1)(i)(A) of the Customs Act - HELD THAT:- Having regard to the fact that the appellants have already undergone sixteen months of incarceration (as on date), and that the charge-sheet has been filed as back as in August, 2023 and since then, even the charge has not been framed by the Trial Court, without going into the merits of the cases, the present appeals accepted.
In that view of the matters, the appellants namely, Premal Ketan Radia and Anil Paswan @ Anil Saroj, are directed to be released on bail in connection with the Criminal Complaint Case No. 67(O) 2023 arising out of the D.R.I. Regional Unit Patna, Unit Case No. 5/2023-24 dated 09.06.2023, lodged before the Court of Presiding Officer(Special), Economic Offences, Civil Court, Patna for the offence committed under Sections 135(1)(a) and 135(1)(b), and punishable under Section 135(1)(i)(A) of the Customs Act, if they are not required in any other case, on such terms and conditions that may be imposed or deem fit by the Trial Court, including the condition that the appellants shall deposit their passport with the Trial Court and give their correct addresses and contact numbers on affidavit. They shall also co-operate with the Trial Court in concluding the trial expeditiously.
Appeal allowed.
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2024 (9) TMI 1367
Revocation of Customs Broker License - forfeiture of security deposit - Failure to follow any of the condition mentioned under Regulation 11(a), 11(d), (k) and 11(n) of the CBLR 2013 - respondent has not obtained any job clearance from the exporter and the authorization has been obtained through intermediaries after filing of the shipping bill.
The only allegation in the show cause notice issued by the Directorate of Revenue Intelligence (DRI) is that the respondent on receipt of the KYC documents, authorization letter IEC of M/s. Panel Pin Manufacturing Company Pvt. Ltd. had initiated the clearance work without meeting authorized person of the exporter and work was received through many people in between acting as middlemen.
HELD THAT:- Reading the order of adjudication does not show as to whether the Department/DRA investigated as to how seal came to be fixed by the authorities and whether there was any involvement of the officials in the said process. Be that as it may, the learned Tribunal has considered the facts of the case and has arrived at the finding that the relevant provisions of the CBLR does not envisage physical verification of the exporters and antecedents nor verification of the factory premises of the exporter concerned. One other aspect which needs to be also taken note of is that the proceedings initiated under the provisions of the Customs Act culminated in an order passed by the Commissioner of Customs (Port), Kolkata dated 14th February, 2019 imposing a penalty of Rs.10 Lacs on the partner of the respondent Surendra Nath Mallick.
One more aspect which has been brought to notice by the learned counsel for the respondent is that the DRI initiated criminal proceedings against the partner of the respondent and based on a petition filed by DRI before the Chief Metropolitan Magistrate, Kolkata. An order was passed on 8th August, 2023 stating that the adjudicating authority did not recommend prosecution against the partner of the respondent who was arrayed as accused no.1. There is also a communication sent by the Senior Intelligence Officer (Group III), Kolkata Zonal Unit, DRI stating that necessary verification has been done regarding the Customs Broker namely, Surendra Nath Mallick and nothing adverse was noted against the firm or the respective person. Thus, the other collateral proceedings have also ended in favour of the partner of the respondent.
The view taken by the learned Tribunal is one of the plausible views and the same cannot be faulted - the appeal filed by the revenue is dismissed and the substantial questions of law are answered against the revenue.
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2024 (9) TMI 1366
Levy of duty and penalty - challenge to order dated 23.01.2015 by Director General of Health Services under Customs Act - HELD THAT:- As per the memo, the proceedings are pending regarding default and violation of terms and conditions of Notification No.64/1988, the possibility of the Tribunal hearing all the matters involving violation of terms and conditions of Notification No. 64/1988 cannot be ruled out. Even if the Tribunal for its convenience hears the matter by clubbing the similar appeals, it is expected that the Tribunal shall apply and examine each appeal on its facts. Though the apprehension expressed in the memo is not justifiable, however, considering the nature of dispute and requirement of examination of facts of each case on its own, the apprehension cannot be brushed aside. Further if the Tribunal is directed to consider the appeal of the petitioner independently, by extending due opportunity of hearing, no prejudice would be caused to the revenue.
The Customs, Excise and Service Tax Appellate Tribunal shall dispose of the appeal i.e., Appeal No. 20295/2020 against the petitioner herein, independently on its own merits - Petition disposed off.
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2024 (9) TMI 1365
Violation of conditions of Carnet by not filing normal Bill of Entry for clearance of the same - alleged misdeclaration and misuse of carnet documents - Applicability of N/N.94/1996 dated 16.12.1996 - HELD THAT:- There is a misdeclaration on the part of the appellant to the effect that the car was exported only for the purpose of repair and reimported thereafter. Since the appellant has accepted his liability on the value of his repairs, the demand of duty on repairs is confirmed. The Commissioner observing that ‘no case of physical concealment within the car having been brough out, the car being available for examination by Customs and duties of Customs having already been paid on the car at the point of first import, denial of benefit of said Notification No.94/1996-Cus. dated 16.12.1996 would be travesty of justice’. Having extended the benefit of the Notification No.94/1996 dated 16.12.1996 which is eligible for goods being exported for repairs, we do not find any reason for confiscating the vehicle nor imposition of penalty under Section 112(a) of the Customs Act 1962. Hence redemption fine and penalty is set aside.
The Revenue challenging the additional grounds filed by the appellant for the first time regarding determination of duty submitted that the appellant had paid the entire amount of duty and thus, now cannot challenge the same having not taken up this issue before the adjudicating authorities. With regard to determination of duty since the issue has been raised for the first time and being a pure question of law.
The impugned order is modified to the extent of allowing the redemption fine and penalty and appeal is remanded to the Commissioner to decide only on the additional ground raised before this Tribunal with regard to their liability to pay only basic customs duty - Appeal disposed off.
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2024 (9) TMI 1364
Classification of imported one consignment of Bed sheet, declared as made of 100% Polyester - classifiable under CTH 5407 or under CTH 6304? - HELD THAT:- The Tribunal in the case of M/S. C.F. INC., A UNIT OF SURINDER KUMAR & SONS (HUF) VERSUS COMMISSIONER OF CUSTOMS (PORT) , KOLKATA [2024 (4) TMI 1178 - CESTAT KOLKATA] has held that 'the goods imported by the appellants are only ‘Polyster Quilt Cover’.
Going by the factual details, particularly keeping in view the common parlance usage of the material as bed sheets which can be deduced from their size and the decided case laws, the goods are classifiable under CTA 6304 as contended by the appellant and not under CTA 54.07 as has been held by the Revenue.
The order of the lower authority is upheld and the appeal filed by the Revenue dismissed.
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2024 (9) TMI 1363
Levy of redemption fine and penalty - valuation of imported goods - rejection of transaction value and enhancement of value - Admissibility of e-mail evidence - non-compliance with Section 138C of the Customs Act, 1962 - HELD THAT:- Actually, there is no whisper replying to the allegation in the SCN that the appellant had opened his e-mail ID and downloaded 13 documents including the e-mail. This being so, the appellant had handed over the e-mail to the Department as part of the investigation. If there was any grievance for the appellant, he ought to have sent a letter or objection to the department stating that the email was downloaded on threat or duress. No such letter has been sent to the department. No such averment has been made in the reply to the SCN. Chapter XIII (Sections 100 to 110A of Customs Act, 1962) deals with the powers of officers for search, seizure and arrest. Section 110A provides power to inspect and Section 107 provides power to examine persons. For these reasons, the email is admissible evidence.
The other evidence relied is the statement of Shri Sheetal K. Jain (appellant–active partner) recorded by Department. In his statement, it is clearly deposed by him that after negotiations, they had agreed to supply Ginger Beer @ 4.55 GBP per case. It is also stated that the appellant had made part payment and the balance amount of 99.61 is still to be paid. This clearly shows that the declared value is incorrect - It is incumbent upon the appellant to come forward with an explanation in the reply as to why they have paid an amount over and above than that has been mentioned in the invoice. The appellant has not been able to put forward any explanation in regard to higher amount paid by them. The strong inference that can be drawn from the facts is that the value declared in the Bill of Entry is not correct transaction value.
The department has therefore correctly rejected the transaction value and enhanced the value on the basis of e-mail - the order of enhancement of value and the confirmation of differential duty is upheld.
The rejection of declared value and enhancement of value is upheld - The redemption fine is reduced to Rs. 1,00,000/- - The penalty imposed under Section 114A of Customs Act, 1962 is reduced to Rs. 1,00,000/- - appeal allowed in part.
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