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2022 (9) TMI 1285
CENVAT Credit - duty paying documents - debit note suffices for the documentation requirements prescribed in rule 9 of CENVAT Credit Rules, 2004 or not - whether such debit notes/invoices pertaining to reimbursements of diesel and electricity costs incurred by the service provider on which tax under Finance Act, 1994 has been duly discharged enables the recipient to take credit?
HELD THAT:- The availment of credit, whether against invoices or against debit notes that contain substantially the same information as prescribed in rule 9 of CENAT Credit Rules, 2004 stands settled by the decision of the Tribunal and of the several High Courts. It is seen from the debit notes, as well as the invoices in question, that, while the adjustments reflect the separate charges as provided in the master service agreements, discharge of tax liability therein under Finance Act, 1994 by the provider of service and raising of the amount as due from the recipient of the service is not in doubt. It is settled law that once the tax has been collected, it is not within the jurisdiction of the tax authorities governing the recipient to contend that such payment of tax was not in consonance with the law.
Also, the competent authority has not been able to draw a distinction between diesel as goods and any duties paid thereon being ineligible for availment of credit and a charge raised upon the recipient of the service as value of the service on which tax liability under Finance Act, 1994 has been duly discharged.
Appeal dismissed - decided against Revenue.
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2022 (9) TMI 1284
Levy of penalty u/s 78 of FA - Short payment of service tax - Short payment found during the course of audit - HELD THAT:- The appellant has accepted the demand with regard to non-payment of service tax under various categories of services. One of the issue was whether the amount that has to be paid under works contract services was to be treated as original works or maintenance work. Other issue was whether the tax has to be paid under manpower supply services or works contract service. It is seen that there are interpretational issues. There is no iota of evidence adduced by the department that the appellant has committed any positive act of suppression of facts with intention to evade payment of service tax. Further, the appellant is an undertaking under the State Government of Tamil Nadu and for these reasons, it is a fit case to set aside the penalties imposed u/s 78 of the Finance Act, 1994.
All the penalties imposed under section 78 requires to be set aside - the impugned order is modified to the extent of setting aside the penalties imposed under sec. 78 of the Finance Act only without the disturbing the confirmation of demand or the interest thereon - appeal allowed.
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2022 (9) TMI 1283
Recovery of the irregularly availed Cenvat credit alongwith interest and penalty - appellant paid excess service tax on inward freight under the category of “Transport of Goods by road in a goods carriage", and subsequently availed excess Cenvat credit on input services - HELD THAT:- From the impugned order and the arguments as recorded the fact of payment of service tax is not in dispute. Once the fact of payment of service tax is not disputed the CENVAT Credit availed by the appellant which is equal to the tax paid cannot be disputed.
In the case of THE COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS AJINKYA ENTERPRISES [2012 (7) TMI 141 - BOMBAY HIGH COURT], the Hon'ble High Court of Mumbai held that during the relevant period, that is, during the period from 2nd March 2005 to 31st December 2005, it could not be said that the issue was settled and that the assessee paid duty on decoiled HR/CR coils knowing fully well that the same were not manufactured goods. If duty on decoiled HR/CR coils was paid bona fide, then availing credit of duty paid on HR/CR coils cannot be faulted.
In view of the decision of the Hon’ble High Court of Mumbai, there are no merits in the impugned order and the same is set aside - appeal allowed - decided in favor of appellant.
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2022 (9) TMI 1282
CENVAT Credit - input services have been used in or in relation to the manufacture of the said dutiable final products as well as exempted goods - non-maintenance of separate records - period from July, 2010 to March, 2014 - requirement to pay an amount equal to 5% (effective up to 16.03.2012) and 6% (w.e.f.17.03.2012) of the value of exempted goods or not - HELD THAT:- This Tribunal in the case of M/S PHILIPS CARBON BLACK LTD., M/S PROMODE KUMBHAKAR VERSUS CCEX & SERVICE TAX, DURGAPUR AND CGST & EXCISE, BOLPUR VERSUS M/S PHILIPS CARBON BLACK LTD. [2020 (1) TMI 530 - CESTAT KOLKATA] had held that non-compliance of the procedure prescribed under Rule 6(3A) of the Cenvat Credit Rules, 2004 does not result in loss of substantive right of the assessee to avail the option of reversing proportional credit and such non-compliance is at best a procedural lapse, which can be condoned.
Further, Hon’ble Supreme Court in the case of CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [1995 (12) TMI 72 - SUPREME COURT] has held that reversal of credit along with interest amounts to a situation, which is akin to as if the assessee had never availed such credit at the first place.
Also, Hon’ble Calcutta High Court in the case of COMMISSIONER OF SERVICE TAX-1, KOLKATA VERSUS M/S. SURYA VISTACOM PRIVATE LIMITED [2022 (7) TMI 719 - CALCUTTA HIGH COURT] has held that if according to the adjudicating authority, the assesse did not abide by the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004, it was open to such adjudicating authority to reject the assessee’s claim as regards the disputed Cenvat Credit and it could not mechanically invoke the 6% Rule on the assesse.
The demand cannot sustain and is accordingly set aside - appeal allowed - decided in favor of appellant.
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2022 (9) TMI 1281
Reduction in the amount of refund, which was in the nature of predeposit - whether interest have been rightly allowed under Section 35FF of the Act? - principles of unjust enrichment - time limitation - HELD THAT:- A Division Bench of this Tribunal in the case of Parle Agro Ltd [2021 (5) TMI 870 - CESTAT ALLAHABAD], under similar facts and circumstances, have held that interest is payable also on the amount paid during investigation/audit as well as the amount of pre-deposit and further such interest is payable @ of 12% per annum, following the ruling of Hon'ble Supreme Court in the case of SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [2006 (1) TMI 55 - SUPREME COURT].
Hon'ble Madras High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE, COIMBATORE VERSUS M/S. PRICOL LTD., THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL [2015 (3) TMI 735 - MADRAS HIGH COURT] have held that any amount deposited during investigation has to be treated as pre-deposit and the same is neither hit by limitation nor by the clause of unjust enrichment for the purpose of refund.
Thus, the learned Commissioner (Appeals) have erred in holding that the amount of Rs. 50,000/- is hit by limitation and unjust enrichment, and further interest is not payable under section 35FF - the appellant is entitled to refund of the balance amount of Rs. 50,000/- which was deposited on 30th January 2003 - further appellant is entitled to interest on the full amount of Rs. 8.5 lakhs from the date of deposit till the date of refund @ of 12% per annum under the provisions of Section 35FF of the Act - appeal allowed - decided in favor of appellant.
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2022 (9) TMI 1280
CENVAT Credit - duty paying documents - case of Revenue is that the invoices of GMIPL are not valid documents for taking credit as they do not pay the service tax after taking credit of the tax paid by the broadcaster - suppression of facts or not - extended period of limitation - HELD THAT:- From the perusal of the invoices issued by the broadcaster, it is quite evident that the name of the appellant appears on each and every invoice of the service provider as recipient of the service. That being so the credit taken by the appellant on the basis of the invoices issued by the broadcaster cannot be denied as the invoices clearly show the recipient of service as appellant. Further now the appellants have received these services through M/s Group M Media India Pvt. Ltd., who have enclosed the invoices of the broadcaster alongwith their invoices. M/s Group M Media India Pvt. Ltd. have facilitated the provision of Broadcasting services by the Broadcaster to the appellant and have definitely acted as “pure agents”, for the provision of these services.
The denial of the credit on the invoices of M/s Group M Media India Pvt. Ltd, taken along with the invoices of the Broadcasters, is not justified.
There are no substance in the manner in which Commissioner has sought to distinguish the case of Zapak [2018 (9) TMI 759 - BOMBAY HIGH COURT]. On perusal of the sample invoices it is already concluded that the name of the appellant appear as client (service recipient) on the invoices issued by the Broadcaster, that being it is held that M/s. Group M Media India Pvt Ltd., is pure agent in the provision of the service. Commissioner has not recorded any finding in this order to the contrary.
Since it is held in favour of the appellant on merits itself, no findings are recorded on the issue of interest, limitation and penalties.
Appeal allowed.
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2022 (9) TMI 1279
Clandestine removal - Ingots - demands of duty made on account of alleged production based on the number of heats and alleged clandestine removal based on parallel invoices - demand based on the private production records of the appellant - demand based on the 12 parallel invoices recovered from the appellant’s office.
Demand based on the number of heats of manufacture every day and the average quantity of MS Ingots produced per heat - HELD THAT:- According to the appellant itself the cross-section of the ingots is 3.5 inches X 4.5 inches. If the total volume of the ingots per inch is converted into cubic centimeters and the weight of 1.96 kg. per inch is considered, the density of the MS Steel ingots produced by the appellant is consistently around 7.59 gms. per cubic centimeter which is consistent with the density of the mild steel. Therefore, there are no inconsistency in the production records for the three days. The data is reliable and robust.
How much quantity of ingots were produced during the previous three months? - HELD THAT:- There is no evidence that it had been modified during the three month period. Therefore, the quantity of MS Ingots produced in one batch/heat will be more or less be similar to the quantity produced in another batch. At any rate, there cannot be a very large variation - the average quantity of 8.447 tons of ingots per batch reckoned by the Adjudicating Authority for confirming the demand is correct and calls for no interference. The submission of the learned Counsel that only 6 or 6.5 M.T. can be produced per heat is inconsistent with the data which is undisputed and is available on record.
The duty of central excise is leviable for the manufacture of the goods although it is payable on removal or at the end of the month. If there is no manufacture there cannot be any demand of duty. To the extent the manufacture was shown by the appellant in its excise returns, duty has already been paid. It is this excess manufacture which has not been reflected in the excise returns which is in dispute. This manufacture has not been determined by the Revenue out of thin air but has been worked out on the basis of the records of the appellant themselves - Merely, because the buyers of clandestinely removed goods and the transporters could not be found the manufacture of these goods cannot be denied when the appellant’s own records indicate the manufacture.
There is no evidence of any variation of the capacity of the furnace during that period. There are sufficient reason to trust the private records maintained by the appellant itself and hold that the demand on this count is reasonable and needs to be upheld.
Demand on the basis of 12 parallel invoices - HELD THAT:- There cannot be two invoices with the same number with different dates and different quantities and with paying duty on the one and not paying duty on another. Maintaining a parallel sets of invoices is a well known modus operandi for clandestine removal of goods. If the parallel invoices are not detected, they can be destroyed by the assessee after clandestinely removing goods against them without paying duty or even indicating duty and then and recovering the duty from the customers and not paying the duty to the Revenue. However, Revenue can only book a case against the appellant to the extent it finds evidence. In this case, only 12 invoices were detected and duty was demanded only on such invoices. It is undisputed that there were another set of invoices of the same number, but with different details.
The impugned order is correct in demanding duty to the extent it did. Consequently, the demand of interest and penalty under section 11AC also need to be upheld - It is undisputed that Shri Singh was a Director. He was directly responsible for the operations of the assessee. Accordingly, the penalty of Rs. 50,000/- imposed upon him is fair and just and no interference is required.
Appeal dismissed.
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2022 (9) TMI 1278
Grant of interest on the amount deposited during investigation which has subsequently been ordered to be refunded - interest at the rate of 6 per cent under the notification dated 21.08.2014 issued under section 35FF of the Central Excise Act, 1944 - HELD THAT:- The Allahabad High Court in Pace Marketing Specialties v/s Commissioner of Central Excise [2011 (8) TMI 796 - ALLAHABAD HIGH COURT] while granting interest at the rate of 12 per cent had relied upon the decision of the Supreme Court in SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [2006 (1) TMI 55 - SUPREME COURT] - the view taken by the Allahabad in Pace Marketing is followed by the Division Bench of the Tribunal in M/S. PARLE AGRO PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS & SERVICE TAX, NOIDA (VICE-VERSA) [2021 (5) TMI 870 - CESTAT ALLAHABAD].
The appellant would, therefore, be entitled to interest at the rate of 12 per cent instead of 6 per cent from the date of deposit till the date of payment - appeal allowed - decided in favor of appellant.
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2022 (9) TMI 1277
Area Based Exemption - activity of the appellant of making nail polish from base liquer and colour solution - process amounting to manufacture or not - eligibility of Notification dated 10.06.2003 - HELD THAT:- The issue involved in this appeal was considered and decided by a Division Bench of the Tribunal in GS PHARMABUTORS PVT. LTD. (UNIT-II) VERSUS ADDITIONAL DIRECTOR GENERAL, (ADJUDICATION) [2022 (2) TMI 615 - CESTAT NEW DELHI]. It was held that the appellant was entitled to the benefit of the area based notification dated 10.06.2003.
The appellant, therefore, for all the reasons stated in the aforesaid Division Bench decision of the Tribunal in GS Pharmabutors, would be entitled to the benefit of the area based exemption Notification dated 10.06.2003 - Appeal allowed - decided in favor of appellant.
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2022 (9) TMI 1276
CENVAT Credit - duty paying documents - Revenue was of the view that availment of Cenvat credit on the basis of order-in-original was not proper as per Rules 3 & 9 of the Cenvat Credit Rules - HELD THAT:- In the present case the appellant has not paid any excise duty for which they are required to make claim for refund of duty. It is the case where certain credit taken by them was sought to be denied and during the course of the proceedings for denial of such Cenvat Credit, the appellant reversed the entire credit sought to be disallowed to them. Subsequently major portion of such credit has been allowed to them.
If Revenue had any objection to the order-in-original they should have preferred an appeal before the appropriate authority. By way of issuing second show cause notice they could not have denied the benefit granted to the appellant in the first round of proceedings.
Appeal allowed.
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2022 (9) TMI 1275
Eligibility for concessional rate of duty in terms of Notification No. 6/2011-CE dated 01.03.2011 - Perforated Nickel Cylinders (Screen) - HELD THAT:- The very same issue has been decided by this Tribunal in STOVEC INDUSTRIES LTD VERSUS C.C.E. -AHMEDABAD-I [2021 (12) TMI 240 - CESTAT AHMEDABAD] where it was held that the appellant has classified the impugned goods under CTH 844250 which includes “Plates,cylinders and other printing components;”. The appellant is entitles for benefit of Sno. 41 in list 2 of notification no. 06/2011-CE dated 01/03/2011.
The appellant are entitled for the exemption Notification 6/2011-CE dated 01.03.2011 and subsequent exemption under Notification No. 12/2012-CE dated 17.03.2012 - Appeal allowed - decided in favor of appellant.
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2022 (9) TMI 1274
Jurisdiction - delegation of power to an Officer not below the rank of Deputy Commissioner (CT) and to conduct the enquiry - Section 64 (4) of the TNVAT Act - HELD THAT:- The issue that has been raised in the present appeal is no longer res integra and the Division Bench of this Court has settled the issue in Joint Commissioner (CT), Chennai and others Vs. M/S. Original Vel Sporting News, Rep. by its Manager, Mr. Dinesh Kumar Soman [2019 (6) TMI 1586 - MADRAS HIGH COURT], where it was held that the order of the learned Commissioner under Section 64(4) of the Act is a quasi-judicial order, requiring a prior notice of hearing to the assessee and passing of a reasoned speaking order in individual cases of registered dealers for conducting audit by the specified Authority as directed by the Commissioner.
Thus, it is clear from the above that under Section 64(4) of the Act, it does not empower the Commissioner to delegate the power and to pass orders to any lower authority and the Commissioner himself will have to pass orders.
Appeal allowed.
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2022 (9) TMI 1273
Works contract - inter-state trade - Benefit u/s 3F(2)(b) of the U.P. Trade Tax Act - contract in question was individual in nature or not? - whether the value of goods received by the assessee from its manufacturing unit situated at Vadodara outside U.P. to the State of U.P. in pursuance of contract entered by the assessee with Bharat Petroleum Corporation is covered by Section 3 of Central Sales Tax Act and is deductible from the net taxable turn over? - HELD THAT:- The U.P. Trade Tax Act not only covers the field of levies on sale and purchase of the goods in U.P. but also of transfer of rights to use any goods which has been covered by definition of sale. Section 3-F of the Act of 1948 imposes liability upon every dealer to pay tax on the net turn over of transfer of property in goods involved in the execution of work contract. Sub-section (2) of Section 3-F of the Act provides certain deduction in calculating net turn over for the purpose of charging tax under Section 3-F of the Act. From the reading of sub-section (2) of Section 3-F, it is clear that every dealer who is involved in execution of work contract, but the amount representing the sale value of the goods which are covered by Section 3, 4 and 5 of the Central Sale Tax Act are deductible from the said turn over in determining the tax liability.
In the present case, the assessee has an office in U.P. and has a manufacturing unit outside the State of U.P. The work contract was to be executed in U.P. and the goods have been received from outside the State after manufacturing was done by the dealer at its plant at Vadodara, thus, the goods received in the execution of work contract has resulted in movement of goods from one State to another attracting Section 3 of the Central Sales Act and thus assessee is liable for the benefit under Section 3(F)(2)(b) of the U.P. Trade Tax Act, 1948.
The goods received by the assessee in U.P. after the same having been manufactured at its site at Vadodara and consumed for execution of work contract would amount to sale of goods in the course of inter-state trade or commerce which is covered under Section 3 of the Central Sales Tax Act and the value of such goods is therefore liable to be deducted under Section 3(F) (2)(b) of the 1948 Act from the net turn over of the assessee.
The matter is no more res integra and co-ordinate Bench of this Court in case SANTOSH AND COMPANY VERSUS COMMISSIONER OF TRADE TAX [1999 (7) TMI 670 - ALLAHABAD HIGH COURT], COMMISSIONER, TRADE TAX, UP., LUCKNOW VERSUS DHARMEX PVT. LTD. [2008 (12) TMI 689 - ALLAHABAD HIGH COURT] and COMMISSIONER, TRADE TAX, UP., LUCKNOW VERSUS ADVANCE SPECTRA TEC (P) LTD. [2010 (7) TMI 920 - ALLAHABAD HIGH COURT] had held that where the assessee dealer had brought goods in and consumed them in U.P. in execution of work contract, it would be a case of inter-state trade on which no tax is chargeable in U.P.
There is no error in the judgment and order passed by the Tribunal partly allowing the appeal of the assessee. The question raised in the revision is answered accordingly, in favour of the assessee and against the revenue - Revision dismissed.
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2022 (9) TMI 1272
Seeking grant of Interim Bail - applicant had suffered an incident on 14th July, 2022 of fainting and frothing from mouth with numbness of his limbs - whether the treatment in jail was unsatisfactory or inadequate? - HELD THAT:- The Supreme Court in State of UP [2020 (10) TMI 1281 - SUPREME COURT] was dealing with an appeal against an order passed by the Allahabad High Court, Lucknow Bench granting interim bail to an accused on medical grounds for a period of two months while directing the listing of the regular bail application for hearing.
Here too the regular bail application has been listed for hearing on 26th September, 2022 in which bail has been sought on the merits of the case along with the interim bail application moved on grounds of ill health. This application as noted above is the second one pleading medical grounds. The decision of the Supreme Court has a direct bearing to this case.
From the Status Report, it is amply clear that even the incident of 14th July, 2022 was dealt with promptly and effectively by the jail authorities and neither the doctors at DDU Hospital nor at the RML Hospital considered his condition to be of such a serious nature to call for hospitalisation. They rather advised review in Neurology and Medicines OPD. The Neurologist at GB Pant Hospital has advised neurosurgery evaluation, which it appears is yet to be carried out - there is nothing in the Status Report which would suggest to this Court that treatment was unsatisfactory or inadequate. No case has been revealed justifying directions for treatment of the applicant at any other hospital/medical institute. The documents that have been placed on the record by the applicant, are of doctors at Indore and in the application, he has sought interim bail to get himself neurologically evaluated in his “home town Indore Madhya Pradesh”. While not doubting the capabilities of the doctors at Indore nor the standard of medical care available at Indore, it would be absurd to hold that the otherwise able doctors at GB Pant Cardiology and Neurology Departments would have a lower degree of skill than the doctors at Indore, to evaluate the condition of the applicant and prescribe adequate treatment.
The present condition of the applicant is also reported to be stable - No ground whatsoever has been made out for grant of interim bail.
The present application is dismissed.
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2022 (9) TMI 1271
Transfer petition - Constitutional validity and interpretation of certain provisions of the Prevention of Money-Laundering Act, 2002 - procedure followed by the Enforcement Directorate (ED) while inquiring into/investigating offences under the PMLA - effect of amendment in Section 45 of the 2002 - HELD THAT:- The Transfer Petition is disposed of in terms of the judgment in VIJAY MADANLAL CHOUDHARY & ORS. VERSUS UNION OF INDIA & ORS. [2022 (7) TMI 1316 - SUPREME COURT].
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2022 (9) TMI 1270
Invocation of bank grantee furnished at the time of provisional release of the aircraft - use of aircraft imported by the appellant with benefit of exemption from customs duty under serial 347B of notification no. 21/2002-Cus dated 01.03.2002, as amended by notification no. 61 of 2017 dated 03.05.2007 - providing passenger air transport service to its group company by carrying personnel of the group company for remuneration - whether amounts to violation of Condition No.104 of the said exemption notification or not - whether such use are in accordance with the permit for nonscheduled (passenger) services granted by Director General of Civil Aviation (DGCA).
HELD THAT:- Aircrafts and helicopters are classified under Customs Tariff Heading 88 of the First Schedule to the Customs Tariff Act, 1975. The tariff rate of duty till 28.02.2007 on the import of aircraft was 3% / 12.5%. Subsequently, pursuant to the proposal made in the Finance Bill 2007, exemption notification no. 20/2009 dated 01.03.2007 was issued inserting Entry 346B and Condition No. 101 in the earlier exemption notification dated 01.03.2002, whereby, the effective rate of duty on import of aircraft for scheduled air transport service was made ‘nil’. No exemption was, however, granted to non-scheduled air transport service and private category aircraft. However, with the issuance of the exemption notification dated 03.05.2007, the effective rate of duty on the import of aircraft for non-scheduled air transport service was made ‘nil’.
The exemption notification dated 03.05.2007 inserted Condition No. 104 which requires at the stage of import, an approval from MCA to import the aircraft for non-scheduled (passenger) service and an undertaking by the importer to the Customs authority that the aircraft would be used only for non-scheduled (passenger) services and that the operator would pay on demand, in the event of his failure to use the aircraft for the specified purpose, an amount equal to the duty payable on the said aircraft but for the exemption under the notification.
The use of the aircraft has been in accordance with the scope of non-scheduled (passenger) services and there is no violation of the undertaking to use the aircraft for non-scheduled (passenger) services.
It is not possible to sustain the impugned order dated 31.08.2010 passed by the Commissioner in so far as it concerns the appellant - the penalty imposed upon Sudhir Nayak cannot also be sustained - appeal allowed.
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2022 (9) TMI 1269
Addition made on account of bogus expenses corresponding to the sundry creditors - ITAT deleted the addition - HELD THAT:- AO after opining on the genuineness of the purchases, disallowed the sundry creditors and held the creditors to be doubtful. ITAT and CIT(A) satisfied itself with respect to the genuineness of the sundry creditors through bank statements and thereafter deleted the addition. Revenue has been unable to bring out any deficiency in the said concurrent finding of the appellate authorities.
The learned counsel's endeavor to urge this Court to examine the issue of bogus purchases by perusing the bills and statements of alleged suppliers in these proceedings cannot be accepted. This Court in exercise of its jurisdiction under Section 260A of the Act is confined to hearing substantial questions of law and interference on the finding of facts is not warranted if it involves re-appreciating of evidence.
The learned counsel has not been able to point out any perversity in the finding of facts. We therefore, find no infirmity in the orders of the appellate authorities deleting the addition made on account of bogus expenses corresponding to the sundry creditors.
Disallowance on account of static creditors - ITAT concurred with the findings of the CIT(A) and held that the AO could not have relied upon initial letter for making such an addition when to the knowledge of the AO the Assessee had retracted the said letter during the assessement proceedings. ITAT noted that the department representative had not brought on record any material on record to contradict the fact findings of the CIT(A) on this issue and accordingly upheld the said deletion. In this appeal as well, the learned counsel for the Revenue has not brought to our attention any material to indicate that the finding of the appellate authorities is incorrect. His sole contention was that since the Assessee initially had surrendered the income, no further enquiry was required to be conducted by the AO. He, however, could not point any infirmity in the findings of the CIT(A) while deleting the said addition.
As per the Circular No. 14(XL-35) of 1955 dated 11th April, 1955, as well the Department has been directed to assist a taxpayer where the proceedings or other particulars before AO indicate that some refund or relief is due to the Assessee.
We, therefore, find that in the present appeal, the appellate authorities have returned concurrent findings of fact by deleting the additions made by the AO. The ITAT is the final fact finding authority and no material has been placed on record to contradict the findings of the appellate authorities, therefore, no substantial question of law arises for consideration in the present appeal. Accordingly, the same is dismissed.
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2022 (9) TMI 1268
Jewellery seized during the course of search - disclosure made by him in VDIS-97 and IDS-2016 - assessee filed a letter in the office of DDIT (Investigation) along with VDIS certification and valuation report stating that all the gold / diamond jewellery found from residence / lockers and valued by the various Government approved valuer is fully explained and supported by necessary documents / evidences and requested for release of jewellery seized during the search action - HELD THAT:- There are two adult ladies in the family i.e. assessee’s wife and assessee’s daughter (who got recently married). The ld. AR had pleaded in his written submissions that the value of addition towards gold coins constitute 2.16% of the gold and diamond jewellery found at the time of search which is insignificant compared to the stature of the assessee.
We find that assessee had disclosed substantial amount of time and gold jewellery in VDIS 97 itself. During the intervening period of 22 years it is very likely that the household ladies resorting to change the old jewellery to be in tune with the latest fashion or design thereon. This fact has been duly submitted by the assessee before the ld. AO which was not accepted. In fact the assessee had also submitted that the diamond jewellery had been changed to be in tune with the latest trend and fashion which had resulted in reduction in carats of diamond and correspondingly, contributed to increase in gold jewellery.
We are inclined to accept this line of argument advanced by the ld. AR in his written submissions and also the submission made before the lower authorities. However, it is also a fact that assessee had not brought any material on record to prove the receipt of gifts in the form of gold coins completely.
As stature of the assessee and also considering disclosure made by him in VDIS-97 and IDS-2016, we hold that assessee should be given credit to the tune of 137 gms in the form of gifts received by it on various occasions. Accordingly, 100 gms of gold coins alone would be subject matter of addition. AO is directed accordingly to recomputed the addition. Hence, the grounds raised by the assessee are partly allowed.
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2022 (9) TMI 1267
Income from other sources - Addition of interest earned on IBMS( Interest bearing maintenance security) - scope of principle of mutuality - set off of interest expenditure - AO was the opinion that deduction of the TDS on distributed interest income amongst members does not absolve the society/assessee from its taxation obligation, held that interest earned from banks on IBMS by the assessee society is liable to be taxed under the head of ‘income from other sources’ - whether the interest received by the assessee on IBMS is taxable or not? - HELD THAT:- The said issue has been considered by the Coordinate Bench of the Tribunal in the case of Belaire Condominium Association [2018 (5) TMI 240 - ITAT DELHI] assessee society has paid interest each one after deducting tax at source. Thus, it is not a case of exemption on the principle of mutuality. Such interest paid by the assessee society is taxable in the hands of the Apartment owner. In view of these facts, we are of the view that interest expenditure is to be set off against the interest income. As regards the AO's contention that interest paid to member is not eligible deduction in the case of AOP under Section 40 (ba), we have perused the said Section. This clause excludes registered society from its applicability. Accordingly, this clause will not be applicable to the assessee society. Moreover, as rightly contended by the learned AR Section 40 (ba) is applicable while computing business income. This clause is not applicable while computing income from other sources. There is no prohibition in Section 57 (iii) under which deduction of interest is eligible to the assessee society.
We direct the AO to delete the addition made on account of the interest. Appeal of assessee allowed.
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2022 (9) TMI 1266
Offence under FEMA - Eligible charge against petitioner in SCN - no permission was given for repatriation of sale proceeds to person resident outside India and that acquisition and transfer of immovable property by her heirs residing outside India would be covered - petitioner has contravened the provisions of Section 6(3)(i) of FEMA read with Rule 8 of FEMA (Acquisition and Transfer of Immovable Property in India) Regulations 2000 (FEMA Regulations) and thereby petitioner has rendered itself liable to be proceeded against under Section 13(1) read with Section 42(1) of FEMA - HELD THAT:- Issuance of a show cause notice is not an empty formality. Its purpose is to give a reasonable opportunity to the affected persons to contend that they have not committed any breach. Proper opportunity should be given to the person likely to be affected by the order proposed to be made a notice of the action intended to be taken, inform him about the materials on the basis of which the appropriate authority proposes to take action and give a fair and reasonable opportunity to such person to represent his case and to correct or controvert the material sought to be relied upon against him.
It is essential for a show cause notice to indicate the precise scope of the notice and also to indicate the points on which the recipient of the show cause notice give a reply.
In our view, there is nothing in the show cause notice to give any indication as to what are the allegations to which petitioner should furnish a statutory explanation. In paragraph 9 of the show cause notice, it is stated that without obtaining the prior permission of RBI, petitioner has repatriated the sale proceeds to M/s Salvation Army but the provisions relied upon in the show cause notice by respondent no.2 has nothing to do with repatriation of any sale proceeds. Further, Regulation 8 of the said Regulation only provides ‘save as otherwise provided in the act or regulations no person resident outside India shall transfer any immovable property in India’. It does not refer to any acquisition.
As could be seen from the show cause notice itself the admitted position is Mrs. Meerabai Dawson held immovable property in India, which she inherited from her parents, who were resident in India. The Executors of the Will of Mrs. Meerabai Dawson only disposed the immovable property that she had inherited from her parents who were residents in India, and repatriated the sale proceeds to the beneficiaries of her Will. The beneficiaries did not transfer any property in India from respondent no.2 to allege breach of Regulation 8. Moreover, petitioner was, admittedly, only the power of attorney holder and legal counsel of the Executor’s of the Will of Mrs. Meerabai Dawson and therefore, cannot be held liable in the facts of the present case.
We are inclined to exercise our jurisdiction under Article 226 of the Constitution of India and quash and set aside the impugned show cause notice.
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