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Showing 401 to 420 of 1434 Records
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2021 (8) TMI 1034
Disallowance of claim for depreciation as regards the opening W.D.V of the fixed assets, viz. civil work of factory building - HELD THAT:- As observed by us hereinabove, the CIT(A) for A.Y 2009-10 had allowed the assessee’s claim for depreciation in so far the same pertained to the civil work of factory building executed by M/s Teracon Construction (I) Pvt. Ltd. was concerned. On further appeal by the revenue, the Tribunal vide its order for A.Y 2009-10 [2017 (11) TMI 1965 - ITAT MUMBAI] had restored the issue as regards the disallowance of the assessee’s claim for depreciation to the file of the A.O, which as observed by the CIT(A) was pending on the date of passing of his order.
Nothing has been brought to our notice by the ld. Authorized representatives for either of the party to show that the set-aside assessment consequent to the directions of the Tribunal had thereafter been framed by the A.O. Backed by the aforesaid facts, we concur with the view taken by the CIT(A) that now when the very basis for making of the disallowance by the A.O while framing the assessment for A.Y. 2009-10, as on date, does no more survive any more, therefore, the disallowance of the assessee’s claim for depreciation on fixed assets, viz. civil work of factory building executed by M/s Teracon Construction (I) Pvt. Ltd. for the year under consideration i.e A.Y 2012-13 also cannot be sustained.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Admittedly, as the facts and the issue pertaining to the disallowance of the interest expenditure U/rule 8D(2)(ii) during the year under consideration remains the same as were there before the Tribunal in the assessee’s own case for A.Y. 2009-10, therefore, we respectfully follow the view therein taken and vacate the disallowance of the interest expenditure.
As pursuant to the judgment of Maxopp Investment Ltd. Vs. CIT [2018 (3) TMI 805 - SUPREME COURT] as the dominant purpose for which the investment into shares is made by an assessee may not be relevant, therefore, the claim of the assessee that no administrative expenses could be attributed qua the investments made by the assessee in its wholly owned subsidiary company cannot be accepted. But then, as it is a matter of fact borne from the record that the assessee had during the year under consideration not received any exempt dividend income, therefore, on the said count we herein conclude that no disallowance under Sec. 14A was called for in its hands. Accordingly, we in terms of our aforesaid observations modify the view taken by the CIT(A) but at the same time concur with him that no disallowance under Sec. 14A was warranted in the case of the assessee for the year under consideration.
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2021 (8) TMI 1033
Stay of demand - recovery of outstanding demand stayed subject to deposit of ₹ 50 crores on or before 31.03.2016 - HELD THAT:- The appeal filed by the assessee could not be heard and was adjourned from time to time, the stay already granted was extended by the Tribunal.It would be relevant to mention here that the assessee filed extension of stay the co-ordinate bench vide order dated 04.09.2019 [2019 (9) TMI 1579 - ITAT MUMBAI] extended the stay for a period of six months subject to further deposit of ₹ 25 crores in two equal instalments of ₹ 12.50 crores each to be deposited by the end of September, 2019 and October 2019, respectively.
The assessee challenged further demand of ₹ 25 crores as a condition for extension of stay before the Hon’ble High Court. The counsel for the Revenue conceded before the Hon’ble High Court that unless permitted by the Court, respondent (Department) shall not insist on the petitioner (Assessee) to deposit such amount as directed by the Tribunal. The Hon’ble High Court [2019 (12) TMI 1535 - BOMBAY HIGH COURT] admitted the Writ Petition and in view of concession by the by the Revenue’s Counsel directed that the condition imposed by the Tribunal for further deposit of ₹ 25 crores shall not be forced. The aforesaid writ petition is still pending for final adjudication. Now, the assessee has filed present stay application seeking extension of stay.
After having examined the documents on record, we are of considered view that the stay already granted to the assessee deserves to be extended for a further period of six months from today or till the disposal of appeal, whichever is earlier.
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2021 (8) TMI 1032
Disallowance u/s 40(a)(ia) - provision for payment of gratuity - only reason for disallowance of assessee’s claim of deduction is due to non–approval of the gratuity scheme - HELD THAT:- When, it is fact on record that assessee has applied for approval of the gratuity scheme in the year 2007, non–approval of the said scheme even after more than 14 years is undesirable and has resulted in undue harassment to the assessee. Due to no fault of the assessee the deduction otherwise allowable has been denied
As relying on case Narasu’s Spinning Mills [2015 (12) TMI 1553 - ITAT CHENNAI], M/S. VERIZON DATA SERVICES INDIA PVT. LTD [2015 (10) TMI 316 - ITAT CHENNAI], JAIPUR THAR GRAMIN BANK [2016 (11) TMI 794 - RAJASTHAN HIGH COURT] and JAIPUR THAR GRAMIN BANK [2016 (11) TMI 794 - RAJASTHAN HIGH COURT] No disallowance of deduction claimed towards provision made for gratuity fund can be made even during the pendency of assessee’s application for approval of the gratuity scheme. In the facts of the present appeal, as earlier discussed, there has been inordinate and unacceptable delay in disposing of assessee’s application seeking approval of the gratuity scheme. Pertinently, while completing the assessment for assessment years 2011-12 and 2014-15 in assessee’s own case, the AO himself has allowed deduction claimed towards provision created for gratuity, though, assessee’s application seeking approval of the gratuity scheme is still pending. Thus, considering the overall facts and circumstances of the case in the light of the ratio laid down in the decisions cited before us, we are of the view that the assessee is eligible to claim deduction of the contribution make towards the gratuity fund of the employees. Accordingly, we delete the impugned disallowance. Assessee Grounds are allowed.
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2021 (8) TMI 1031
Recovery proceedings - contention of petitioner is that, even while the petitioner's appeal, against the assessment order passed by AO under Section 143(3) is pending consideration before CIT(A) a substantial amount has been recovered from the petitioner, which is, an act, contrary to the Office Memorandum issued by the Central Board of Direct Taxes that prescribes payment of 20% of the disputed demand if the demand is contested before CIT(A) - HELD THAT:- As pursuant to the assessment order, dated 28.12.2017, which concerns the assessment year (AY) 2015-2016, against the total demand amounting to ₹ 3,37,95,120/-, ₹ 2,92,09,436/- has been recovered till now. Mr. Salil states that the amount recovered, in percentage terms, is 86.43%.
Accordingly, issue notice to the respondents. Mr. Sunil Agarwal accepts notice on behalf of the respondents/revenue,he says that he will revert with instructions. In case instructions are received to resist the writ petition, a counter-affidavit will be filed before the next date of hearing.
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2021 (8) TMI 1030
Income from house property - Leasing out the property to its sister concern at a rent lesser than the market rent - AO including the sub-lease income of Fazlani Exports Pvt. Ltd., in respect of sub-lease of Rational House property to M/s. Goldman Sachs on the ground that Fazlani Exports Pvt. Ltd sub-leased aforesaid property at higher rent and treating as Sham Transaction - HELD THAT:- The entire transaction of assessee leasing out the property to its sister concern at a rent lesser than the market rent, cannot be construed as a sham transaction. However, in this recalled proceedings, we have to adjudicate the applicability of the decision of Hon’ble Jurisdictional High Court in the case of CIT vs Akshay Textile Trading & Agencies Pvt Ltd [2007 (10) TMI 251 - BOMBAY HIGH COURT] which was admittedly relied upon by the ld AR as held no case of revenue that transaction was sham – hence annual value of the property is the value received by the owner from the tenant irrespective whether tenant on sub-letting has received higher rent - ITAT was justified in holding that the annual letting value has to be determined on basis of annual rent received by the assessee and not what has been received by its tenants from the ultimate users - Decided in favour of assessee.
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2021 (8) TMI 1029
CENVAT Credit - input services - place of removal - Clearing charges paid to the Custom House Agent for export of goods - Commission on export sale - Material Handling Charges - Terminal Handling Charges - Bank Commission Charges - Aviation Charges - Courier Services - CBEC circular 999/6/2015-CX dated 28.02.2015 - HELD THAT:- In view of the Board Circular and Larger Bench decision in M/S HONEST BIO-VET PVT. LTD. VERSUS CCE AHMEDABAD-I [2014 (11) TMI 579 - CESTAT AHMEDABAD], it is held that the place removal in case of the exports, would be upto the point when goods are loaded on the ship or the depot from where the goods are finally sold, and all the services that are received for exporting the goods till that point shall be covered by the definition of “input services” as per Rule 2 (l) of The CENVAT Credit Rules, 2004. Hence the services of Custom House Agent (Clearing Charges), Material Handling Charges, Terminal Handling Charges will be admissible to the Appellant.
Commission paid on export sales - HELD THAT:- Commission on the Export Sales is the commission paid by the Appellant to their foreign commission agent for promoting the sale of their products in that country. Service Tax in respect of these services is paid by them on reverse charge basis. The issue in respect of admissibility of CENVAT Credit of the Service Tax paid on the Commission Charges paid for export of goods has been considered by Hon’ble Madras High Court in THE COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI VERSUS INTIMATE FASHIONS INDIA (P) LTD. [2019 (8) TMI 1311 - MADRAS HIGH COURT] where it was held that the service tax paid on commission to foreign agents could not denied the benefit of Cenvat credit under Cenvat Credit Rules, 2004 - the Commission paid on export sales is nothing but for sale promotions and is covered by the definition of input services under Rule 2 (l) of the CENVAT Credit Rules, 2004.
Bank Commission charges - HELD THAT:- Issue in respect of “Bank Commission charges” has been considered by tribunal on number of occasions, and tribunal has constantly held in the favour of allowing the CENVAT Credit of Service tax paid on these charges - reliance can be placed in the case of M/S SUNDARAM CLAYTON LTD. VERSUS CCE, CHENNAI - II [2016 (6) TMI 161 - CESTAT CHENNAI] where it was held that finance being the necessary input for the purpose of carrying out the manufacturing activity and money is invested to carryout manufacture, credit cannot be denied for such services availed - the Service Tax paid on Bank Commission Charges shall be admissible as CENVAT Credit to the Appellant.
Courier Services - HELD THAT:- Courier Services are utilized by the appellants for the delivery of documents to the customers and statutory bodies. In fact these services are used for conducting their business by the Appellants - courier services are input services for appellant for conducting their business. Hence CENVAT Credit will be admissible of Service Tax paid on these services.
Travel charges incurred towards the transportation of their senior executives/ employees for attending seminars/ conference for conduct of their business - Aviation Services - HELD THAT:- For qualifying as input service, the use of the service was to be in manufacture of the finished products. The services in respect of which the CENVAT Credit is claimed by putting them under the category of Aviation Services, do not qualify the test laid down as per the Rule 2 (l), hence CENVAT Credit in respect of these services shall not be admissible.
Extended period of limitation - penalties - HELD THAT:- There was no suppression etc, in the case for invoking extended period of limitation - as we have held in favour of the Appellants on merit in respect of all the disputed services except for those under category of “Aviation Services” the issue of limitation becomes infructuous in respect of these services - there was no case for invoking extended period of limitation, as there was no suppression the penalties imposed on the Appellant equivalent to the demand confirmed cannot be upheld.
Appeal allowed in part.
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2021 (8) TMI 1028
Assessment u/s 144 - Addition u/s 69 - assessee failed to provide details of credit entries in his bank accounts - HELD THAT:- We note that in assessee`s case an enquiry report was received from the Dy. Director of Income Tax (Inv.)-III, Surat regarding huge credits in the bank account of the assessee during the year under consideration. From the enquiry, the AO gathered that the assessee has four bank accounts and total credit entry in the bank accounts. AO treated as unexplained investment and treated income for the year under consideration by passing order u/s 144 r.w.s 147. On appeal, ld CIT(A) directed the assessing officer to calculate the commission @₹ 50 per lacs on the total turnover of ₹ 98,22,26,712/-.
We note that investigation Wing, Surat, reported after examining the assessee and recording his statement on oath u/s 131 of the Act, that the assessee was engaged in the business of cheque discounting business and was using 18 bank accounts. The AO in the A.Y. 2009-10 had completed the assessment order dated 25.11.2016 holding that the assessee had earned commission income @₹ 50 per lacs on the turnover of ₹ 29,84,17,709/- and had made addition of ₹ 14,92,088/-. Therefore, we note that in previous year the Department has accepted the claim of the assessee that assessee had earned commission income @₹ 50 per lacs on the turnover of ₹ 29,84,17,709/-.
It is a well settled legal position that factual matters which permeate through more than one assessment year, if the Revenue has accepted a particular's view or proposition in the past, it is not open for the Revenue to take a entirely contrary or different stand in a later year on the same issue, involving identical facts unless and until a cogent case is made out by the AO on the basis of change in facts.
Assessee is engaged in cheque discounting business. However, considering the time value of money, we note that rate of @₹ 50 per lacs, is lower side, therefore we direct the assessing officer to compute the disallowance @ ₹ 75 per lacs.
Principle of consistency are applicable to the assessee on cheque discounting business and not on the rate of ₹ 50 per lacs, therefore, considering the time value of money, we have directed the assessing officer to compute the disallowance @ ₹ 75 per lacs. Appeal of the Revenue is partly allowed.
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2021 (8) TMI 1027
Maintainability of appeal - time limitation - appeal filed before Commissioner (Appeals) after a delay of 11 months - section 35 (1) of Central Excise Act, 1944 - HELD THAT:- The SVLDR Scheme for settling disputes was introduced prior the period of 60 days to file the appeal before Commissioner (Appeals) could expire. This Scheme talks about amount in arrears” (as discussed above) to also be settled. Appellant availed the said benefit within reasonable time without any inordinate unexplainable delay.
More time has been taken by the department for considering appellant’s request under the Scheme which finally was rejected. The appeal before Commissioner (Appeals) has also been within reasonable time. Commissioner (Appeals) himself has held that appellant otherwise has sufficient reason to reach him but beyond the time as prescribed under Section 35(C ) of Central Excise Act.
Also, under the statutory mandate of Section 35 of Central Excise Act that Commissioner (Appeals) is not empowered to condone the delay of more than 30 days over and above the period of 60 days from the date of receipt of Order in Original. Apparently the appeal in the present case could not have been filed before the Commissioner (Appeals) within the said period of 90 days.
The matter is ordered to be remanded back to the Commissioner (Appeals) directing him to consider the appeal as the one which has been filed within time and to adjudicate the same on merits - appeal allowed by way of remand.
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2021 (8) TMI 1026
Initiation of proceedings u/s. 153C - Unaccounted on-money payment for purchase of land - Search and seizure u/s. 132 - addition based on loose paper found and seized - persons who have received the on-money payment have taken contradictory stands before different income-tax authorities and, therefore, the appellate proceedings in connected cases have direct bearing on the case of the assessee - CIT-A deleted the addition - HELD THAT:- After perusal of the material on record and order of the AO it is clearly indicated that the information received from search conducted in Himalyan Group was also utilized in making impugned addition in the case of the assessee. The ld. counsel has also submitted that in addition to the fact that addition was not made on the basis of document seized from the office promises of Saumya Construction Pvt. Ltd., the referred documents dated 19-04-2008 as a copy of agreement between the Sandesh Ltd., Pusti Enterprises and Saumya Construction did not pertain to assessment year in question.
Reliance upon the decision of Sanhgad Technical Education Society [2017 (8) TMI 1298 - SUPREME COURT] wherein held that where loose papers found and seized did not establish co-relation document– wise with assessment year, notice issued under section 153C had rightly been quashed and set aside.
We have considered the judicial pronouncement as supra wherein it is held that where loose paper found and seized did not establish co-relation document wise with assessment year in question notice issued u/s. 153C had rightly been quashed and set aside. Before us, the Revenue could not point out to the contrary. In the light of the above facts and findings and after considering the decision of the ld. CIT(A), the appeal of the Revenue is dismissed. Therefore, this appeal of the revenue is dismissed.
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2021 (8) TMI 1025
Proceedings u/s. 163 - TDS liability u/s 195 - agent of non-resident assessee - assesses being treated as agent of the non resident for assessment of income of that non-resident - remittances made by the assessee towards reimbursement of expenses that were incurred by the latter on behalf of the assessee - As argued CIT(A) has erred in not appreciating that proceedings u/s. 201 are for treating the assesses in default for failure to comply with the provisions of section 195
HELD THAT:- as the amounts remitted by the assessee company, viz. BIPL to Braitrim U.K have been held to be towards reimbursement of expenses (without any mark-up), therefore, in the absence of any ‘Income’ element therein involved the assessee, viz. BIPL could not be held to be a representative assessee within the meaning of Sec. 160(1)(i) qua the said remittances.
Treatment of the assessee as Agent of non-resident and assessee in Default for non Deducting TDS u/s 195 - HELD THAT:- The Tribunal in [2010 (11) TMI 393 - ITAT, MUMBAI] has observed that as the liability of an assessee to deduct tax at source under s. 195 is different from the liability of an assessee to file a return of income as an agent of a foreign principal, therefore, the claim of the assessee that simultaneous proceedings cannot be taken, i.e holding the assessee as an assessee in default under Sec. 201; and at the same time passing an order under s. 163, holding the assessee as a representative assessee, did not merit acceptance.
We do not find favor with the observation of the CIT(A) that as he had upheld the order passed against the assessee u/s 201 of the Act, therefore, having held so, there cannot be one more assessment in respect of the same income on the assessee pursuant to Sec. 163 of the Act.
Pursuant to the amendment made available on the statute vide the Finance Act, 1987 w.e.f 01.06.1987 as the words “unless he is himself liable to any income-tax” in Sec. 195 stood omitted w.e.f 01st June, 1987, therefore, the innate exception carved out for a person who was himself liable to pay tax as an ‘agent’ of the non-resident person u/s 163 of the Act qua deduction of tax at source u/s 195 of the Act as per the pre-amended law i.e prior to 01.06.1987, had thereafter been dispensed with or in fact obliterated from the statute. We, thus, in terms of our aforesaid observations set-aside the view taken by the CIT(A) that as he had upheld the order passed against the assessee u/s 201 of the Act, therefore, having held so, there could not have been one more assessment in respect of the same income on the assessee pursuant to Sec. 163
Whether the assessee company, viz. BIPL could principally be held to be the ‘agent’ of Braitrim U.K u/s 163? - As observed by the ITO(IT)-TDS-3, Mumbai, that the assessee, viz. BIPL was to be held to be an ‘agent’ of Braitrim U.K u/s 163 of the Act for the reasons, viz. (i). that BIPL has a business connection with Braitrim U.K and its principal business is substantially controlled and managed over by Braitrim U.K ; (ii) that Braitrim U.K is directly or indirectly in receipt of income from or through BIPL; and (iii). that BIPL is the agent office managed on behalf of Braitrim U.K. Although, the assessee has assailed before the CIT(A) the aforesaid observations of the ITO(IT)-TDS-3, Mumbai, on the basis of which it was held to be an ‘agent’ of Braitrim U.K, however, we find that the CIT(A) by merely confining his adjudication to the aspect that the assessee could not have been subjected to double jeopardy under the two provisions of the Act i.e Sec. 201 and Sec. 163 of the Act, had thus, not dealt with the specific contentions that were raised by the assessee before him, therein, assailing its being treated as an ‘agent’ of Braitrim U.K under Sec. 163 of the Act.
Also no contentions qua the aforesaid issue on merits i.e treating of the assessee as an ‘agent’ u/s 163 of the Act were advanced by the authorized representatives for both the parties in the course of hearing before us. As we have set-aside the view taken by the CIT(A) that having upheld the order passed against the assessee u/s 201 of the Act, the assessee could not be held to be an ‘agent’ of Braitrim U.K under Sec. 163 of the Act, therefore, in all fairness we restore the matter to the file of the CIT(A) for adjudicating by way of a speaking order the assessee’s claim on merits that it could not have been held to be an ‘agent’ of Braitrim U.K u/s 163.
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2021 (8) TMI 1024
Revision u/s 263 - long-term capital loss - HELD THAT:- Documentary evidence placed on record clearly establish that even though the claim of the assessee for long-term capital loss was allowed by the AO only to the extent of ₹ 1,19,29,790/-, even the said loss to the extent allowed in the assessment was not allowed to be carried forward by the AO to the subsequent years as per the computation sheet annexed to the assessment order.
Even the ld. CIT(DR) has not been able to rebut or controvert this position which is clearly evident from the assessment order passed by the Assessing Officer under section 143(3) read with computation sheet annexed thereto and further corroborated by the application filed by the assessee under section 154 before the Assessing Officer and the appeal filed before the ld. CIT(Appeals).
We, therefore, find merit in the contention of the ld. Counsel for the assessee that there was no error in the order of the Assessing Officer dated 28.12.2018 passed under section 143(3) in allowing to carry forward the entire long-term capital loss claimed by the assessee instead of ₹ 1,19,29,790/- only allowed in the assessment order, as alleged by the ld. Principal CIT in his impugned order. The order passed by the Assessing Officer under section 143(3) thus was not erroneous as well as prejudicial to the interest of the revenue and the ld. Principal CIT, in our opinion, was not justified in revising the same vide his impugned order passed under section 263. We, therefore, set aside the order passed by the ld. Principal CIT under section 263.
Appeal of the assessee is allowed.
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2021 (8) TMI 1023
Validity of the reassessment order u/s 147 which was sought to be revised by the impugned order u/s 263 - validity of re-assessment proceedings cannot be judged or challenged in revisionary proceeding - main contentions raised by the ld. CIT-DR was that once the assessee has accepted the re-assessment order and has not challenged the validity of reopening u/s.147, then assessee is precluded from agitating this issue especially in the proceedings u/s.263 on the ground that assessment order itself is bad in law - HELD THAT:- The present proceedings being collateral proceedings and if the assessment order is inherently invalid or bad in law, then validity of such an order can be challenged at any stage in the collateral proceedings including the proceedings u/s.263, because invalid order cannot be set aside or can be revised to make it valid. Though assessment order may be said to be erroneous but certainly it cannot be held prejudicial to the interest of the revenue in such circumstances when assessment order itself is unsustainable.
The reasons recorded by the AO are totally vague, scanty and ambiguous. The reasons recorded by the AO do not disclose the AO's mind as to what was the nature and amount of transaction or entries, which had been given or taken by the assessee in the relevant year. The reasons recorded by the AO also do not disclose his mind as to when and in what mode or way the bogus entries or transactions were given or taken by the assessee. From the reasons recorded, nobody can know what was the amount and nature of bogus entries or transactions given and taken by the assessee in the relevant year and with whom the transaction had taken place.
There is no live nexus with the information received and the formation of belief by the Ld. AO. At least the reason which is the foundation and edifice for acquiring jurisdiction to reopen the assessment, at least should prima facie indicate that there is live link nexus with the material coming on record with the income escaping assessment. The material should not be specific but also should indicate what is the amount which is escaping assessment. As held above, nowhere the reasons refer what was the nature of accommodation entry, the quantum of the amount of entry which has escaped assessment. In fact the reason is purely based on general observation and the modus operandi without any live link nexus with the assessee.
Thus it is well settled that only the reasons recorded by the AO for initiating proceedings u/s 147 of the Act are to be looked at or examined for sustaining or setting aside a notice issued u/s 148 of the Act. The reasons are required to be read as they were recorded by the AO. No substitution or deletion is permissible. No addition can be made to those reasons. Therefore, the details of entries or amount mentioned in the assessment order and in respect of which ultimate addition has been made by the AO, cannot be made a basis to say that the reasons recorded by the AO were with reference to those amounts mentioned in the assessment order.
Thus since the reassessment order itself is bad in law, therefore, the same cannot be revised under section 263 of the I.T. Act. Only valid re-assessment order can be revised under section 263 - Decided in favour of assessee.
Reopening of assessment - addition of bogus accommodation entry - HELD THAT:- As reasons recorded at least mention what is the nature of accommodation entry and which is the entity from which assessee has received the amount. Whether the entry has been received towards share application money or loan or gift, etc. These reasons are purely vague and show there is a non application of mind on the information which was received and the reason recorded by the AO - he has not even mentioned as to what was the nature of entry as given in the report and simply saying that assessee received entry to the tune of ₹ 20,50,000/- from entry operators during the period is not sufficient. Such a vague reasons cannot justify the reopening and as observed above, the Assessing Officer can validly acquire jurisdiction only when the reasons recorded itself points out or speaks of live link nexus with the material available on record and income escaping assessment and it should not be vague or mere pretence - he should have at least perused the report and examine what is the material pertaining to assessee and what is the nature of entry and whether it is matching with records of the assessee.
He should have prima facie seen what is the nature of bogus entry and from which entity assessee has received. Such vague and general observation made by the Assessing Officer in the reasons recorded does not confer any jurisdiction to him reopen the case - Decided in favour of assessee.
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2021 (8) TMI 1022
Validity of satisfaction and proceedings u/s.153C - Satisfaction recorded by the AO of searched person or not? - CIT(A) had held that nothing is incriminating in the documents found and, therefore, additions cannot be made if no incriminating documents exist and no undisclosed income found during the course of search - HELD THAT:- As carefully perused the satisfaction note, written submissions of the appellant and also the contentions of the Ld. CIT (DR). A chart was furnished by the appellant, wherein every seized document was described as to its nature and it was emphasized that all the documents are either statutory records filed with the tax authorities, ROC or are audited accounts and books of the appellant.
As perused the chart from which it clearly comes out that the documents belong to the appellant. However, they do not indicate any undisclosed income that has escaped assessment in the impugned assessment years. The appellant had also submitted a chart demonstrating that the assessment years in appeal are completed assessment years which has been reproduced in the submissions of the appellant.
The tests that the documents belong to the appellant are duly verified. Section 153C of the Act also states that once the assessment is sought to be opened based on the documents belonging to the appellant, further assessment shall be made in accordance with the provisions of section 153A of the Act. There is a further requirement which states that the Assessing Officer must record a satisfaction note that documents must have a bearing on the determination of the total income of the appellant. Both the conditions lead to the conclusion that the documents found must be indicative of escapement of income and that the total income declared by the appellant in its return of income must necessarily be effected by the findings in the seized documents.
From the perusal of the satisfaction note, it cannot be held that it is reflective of any undisclosed income or in the nature of incriminating belonging to the assessee the reason being none of the documents either pertained to the impugned assessment years or are already party of regular books of account.
This is fairly clear from the assessee’s explanation with regard to each and every document incorporated in the tabulated form in the following paragraphs. Most of the documents did not pertain to impugned assessment years or does not specify any assessment year or have already recorded in the books of account or a part of assessment years. The documents at least indicate some prima facie that there is same escapement of income or there is an element of undisclosed income, it cannot be said to be incriminating. If the documents found are available in public domain or are statutory records, same cannot be held to be incriminating.
Order of the ld. CIT (A) holding that the additions made in the impugned assessment order are not based on incriminating material, is affirmed. Hence, the appeal of the Revenue is dismissed
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2021 (8) TMI 1021
Refund of tax - zero-rated supply of goods or services or both without payment of tax - ITC on export of goods and services without payment of Tax - Section 54 of the CGST Act, 2017 - HELD THAT:- The intent of Policy Wing of revenue is to restrict the refund sanction amount by considering the lower value mentioned in the shipping bill or in GST invoices. Further, it is settled position that where there is any ambiguity in the provision of law with reference to any exemption/concession provided by the Govt should be reading it down and the intention of reading down of any provision is to be provide a restricted or narrow interpretation of the said provisions.
The proper officer (adjudicating authority) has rightly taken ₹ 13,09,623/- as Net ITC, the FOB value as total turnover of zero rated supply i.e. ₹ 2,89,44,004/- and Adjusted Total turnover as ₹ 4,17,91,104/-. Therefore, the adjudicating authority has decorously processed the refund application in austere compliance of provisions of law - there are no infirmity in the order passed by the adjudicating authority.
Appeal disposed off.
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2021 (8) TMI 1020
Supply or not - Levy of GST - activities carried by the Applicant's Head office located outside India and rendered to the Applicant - requirement to obtain registration in India under Section 24 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- For the purpose of operating the LO in India, the HO outside India assists in support of human resources, recruit employees in India in order to launch the LO operations in India, IT support to set up necessary infrastructure, advise on any accounting, internal control processes, project coordination, and other management guidance for the C4IR India Management team and the said activities are in relation to setting up and administering of the LO office and the RBI permissible activities that the applicant undertakes viz. liaising in nature and does not involve any business activities.
The said activities undertaken by the Head Office located abroad, no consideration is paid by the applicant to the Head Office. Since the liaison office is restricted under the RBI regulations to undertake any activities other than of liaising (i.e. acting as a communication channel between its head office and parties in India), the applicant is also not allowed to undertake any business or commercial activities, without the permission of the RBI. Further, the services received by the applicant from its Head Office is import of service since the Head Office is located abroad - There is no doubt that both, the Head Office and the Liasion Office are related persons and the provision of Schedule I mentioned above should be applicable in the present case because the supply received by the applicant from the Head Office is a supply of services. However it is seen that the said provision will be applicable only when the said services are imported in the course or furtherance of business.
The applicant can only perform the activities mentioned at (i) to (iv) above. No other activities of any kind can be performed without the express permission and approval of the RBI - the applicant is not undertaking any 'business' as defined under Section 2(17) of the CGST Act and therefore the activities/services received by the applicant from its HO cannot be said to be in the course or furtherance of its business and hence cannot be considered as a supply under Section 7 of the CGST Act, 2017.
The activities carried by the Applicant's Head office located outside India and rendered to the Applicant will not amount to supply as envisaged under Section 7 of the Central Goods and Service Tax Act, 2017.
Whether the activities carried by the Applicants Head office located outside India and rendered to the Applicant would be liable to GST in the hands of the applicant considering that the Applicant is not engaged in any business? - HELD THAT:- The activities carried out by the Applicants HO located abroad and rendered to the Applicant will not amount to 'supply' as defined under Section 7 of the CGST Act, 2017, since the Applicant is not engaged in any business. Therefore so long as the services imported by the applicant from its HO are not such transaction. However, if the applicant undertakes any further supply which is liable to GST then, in such a case the import of services from its Head Office will be liable to GST at the hands of the applicant.
To the import of service in this case, not being considered as a supply liable to GST, the applicant would not be required to obtain registration in India under Section 24 of the Central Goods and Service Tax Act, 2017 with respect to activities carried out by the Applicant's Head office located outside India and rendered to the Applicant.
Issues answered in negative.
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2021 (8) TMI 1019
Exemption from GST - rent-a-cab service - transportation of passengers excluding tourism, conducted tour, charter or hire of NON Air Conditioned Buses under a contract carriage with our customer - applicability of N/N. 12/2017 dated 28.06.2017 - HELD THAT:- In the instant case, the applicant has an agreement with RIPL for supplying Non-AC buses to transport staff of RIPL and the buses are owned by the applicant. Further, the applicant also incurs expenses on fuel and maintenance of the buses and for all these services provided by the applicant, they are paid fixed hire cost plus fixed fuel cost at predetermined rates of fuel plus mileage.
It is RIPL which controls the deployment of the buses. A perusal of the agreement reveals that the applicant shall deploy the buses (already inspected by RIPL) or as per instructions of the Admn. Dept. of RIPL. Thus the applicant cannot run the buses on their own because the overall control of the buses is with RIPL. Further, as per the agreement, Insurance Charges, etc., will be paid by the applicant whereas toll tax, etc will be paid by RIPL. Thus while the ownership of the buses lies with the applicant, the buses shall be operated strictly as per the instructions of RIPL. Therefore in the subject case, there is a clear transfer of right to use the buses by way of effective control as is seen from the fact that the buses are plying strictly as per RIPL’s instructions.
In the case of transportation of passengers, the recipient of service would be the passenger whereas in the case of renting of any motor vehicle, like buses in the subject case, the recipient would not be the passenger. In the subject case, the consideration for supply of service is charged from RIPL and not the passenger. Therefore in the subject case it is clear that the recipient is RIPL. Hence, there are no hesitation in holding that the subject activity, amounts to ‘renting of motor vehicle’ and shall qualify as a taxable activity under the provisions of the GST Laws.
Since the subject activity is not ‘transportation of passengers’ the provisions of Notification No. 12/2017-CT (R) dated 28.06.2017 are not applicable in the subject case - All activities of Renting of any motor vehicle/transport vehicle which is designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient are chargeable to either 2.5% GST or 12% GST depending on availment of Cenvat Credit. Therefore in the subject case since there is a Renting of any motor vehicle/transport vehicle which is designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient i.e. RIPL, the applicant will have to pay GST @ 12%, if credit of input tax charged on goods and services used in supplying the service, other than the input tax credit of input service in the same line of business (i.e. service procured from another service provider of transporting passengers in a motor vehicle or renting of a motor vehicle) has not been taken.
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2021 (8) TMI 1018
Levy of GST - reimbursement by Industry Partner to the applicant, of the stipend paid to students - HELD THAT:- As per the agreements entered into with industry partners as a NEEM agent they: prepare monthly attendance record of the trainees, getting it certified from the Company; process stipends of the trainees; make payment of stipend to the trainees in their individual bank accounts; provide uniform and safety shoes (as per requirement of industry partner) to the trainees; take Insurance policies towards Employee Compensation and Personal Accident Policy for trainees.
The applicant, is registered as Agent under National Employability Enhancement Mission (‘NEEM') for facilitating and extending support for mobilizing trainees under NEEM Scheme of Government of India as per regulations under notification issued by All India Council for Technical Education (AICTE), for providing trainees on-the-job practical training in industries to enhance their future employability, For that purpose, for which they enter into agreements with various companies/ organizations (called as industry partner) who impart actual practical training to the students.
The stipend is not directly paid to the trainees by the companies, rather the same are routed through the applicant. The applicant has submitted that the entire amounts received as stipend from the companies are paid to the trainees without any amount being retained. Thus, it is seen that the applicant is only acting as an intermediary in collecting the stipend from the companies and then disbursing the same to the trainees in full since the applicant is not allowed to make any deductions from the stipend before disbursing the same to the trainees - The applicant is only a conduit for the payment of stipend and the actual service is supplied by the trainees to the trainer Companies (industry partners) against which stipend is payable. Hence the amount of stipend received by the applicant from the industry partners and paid in full to the traniees, is not taxable at the hands of the applicant.
The reimbursement by Industry Partner to the applicant(YAS), of the stipend paid to the trainees, does not attract tax under the GST Acts.
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2021 (8) TMI 1017
Levy of GST - reimbursement by Industry Partner to YAS of the stipend paid to students - HELD THAT:- The applicant, is empanelled with the Ministry of Skill Development and Entrepreneurship, as a “Third Party aggregator” for mobilizing the trainees under National Apprenticeship Promotion Scheme (NAPS) for providing them on-the-job practical training in various industries, for which they enter into agreements with various companies/ organizations (called as industry partner) who impart actual practical training to the students.
The issue in respect of stipend paid to the trainees by the applicant, the industry partner that provides training to the trainees is required to pay stipend to the trainees. This stipend is not directly paid to the trainees by the companies, rather the same are routed through the applicant. The applicant has submitted that the entire amounts received as stipend from the companies are paid to the trainees without any amount being retained. Thus, the applicant is only acting as an intermediary in collecting the stipend from the companies and then disbursing the same to the trainees in full since the applicant is not allowed to make any deductions from the stipend before disbursing the same to the trainees.
The applicant is only a conduit for the payment of stipend and the actual service is supplied by the trainees to the trainer companies (industry partners) against which stipend is payable. Hence the amount of stipend received by the applicant from the industry partners and paid in full to the trainees is not taxable at the hands of the applicant.
The reimbursement by Industry Partner to the applicant (YAS), of the stipend paid to the trainees, does not attract tax under the GST Acts.
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2021 (8) TMI 1016
Reopening of assessment u/s 147 - Reason to believe - HELD THAT:- There is direct nexus / live link between the material coming to the notice of the Assessing Officer and that, for formation of his belief that there has been escapement of the income of the assessee from assessment in the year under consideration because of his failure to disclose fully and truly all material facts as from the inquiry/investigation by the Investigation Wing of the respondent, some tangible material was found to substantiate the fact that the assessee was the provider of accommodation entries and that, the income from commission, ranging from 0.5% to 1% was not disclosed and thereby, the income chargeable to tax has escaped assessment for the year under consideration.
As emerges from the record, the petitioner has filed RoI for the A.Y. 2012-13 disclosing income despite showing a huge turnover in the audited books of account - a detailed investigation is carried out by the Investigation Wing of the respondent and the outcome of the same is referred to herein above, which prima facie substantiates the case of the respondent - we are of the considered opinion that formation of belief by the AO that the income chargeable to tax has escaped assessment, based upon material derived during inquiry/investigation, appears to be justified.
A perusal of the same revealed that they are mainly based on the aspects of change of opinion and reason to believe. There cannot be any dispute with regard to the ratio laid down in the same, however, as discussed herein above, the petition has failed so far as such aspects are concerned and accordingly, we deem it proper not to delve deep into them as would be of no avail to the petitioner.
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2021 (8) TMI 1015
Reopening of assessment u/s 147 - validity of the notice issued u/s 148 - case reopened is beyond four years, but within six years - HELD THAT:- In the present case, the petitioner has submitted its objections elaborately and the said objections were disposed of by the respondent by issuing an order and while disposing of the objections, the respondent had considered the objections filed by the petitioner and rejected the objections on the ground that for the AY 2003-04, ADIT, International Taxation, Chennai, issued a Notice u/s 148 on similar ground that claim of the assessee as regards payment made towards geological studies, seismic data acquiring and processing and chartered hire charges would not fall for consideration u/s 44BB of the Act to go for TDA at the rate of 4%. On the contrary, the services fell within the definition of “fee for technical services”.
When the AO could able to trace out the material from and out of the materials submitted by the assessee, such new informations or materials undoubtedly would provide the AO for 'reason to believe' to reopen the assessment. This being the factum established, this Court is of the considered opinion that the respondent could able to establish that the AO has 'reason to believe' for reopening of assessment. The other intricacies raised by the assessee on merits are to be adjudicated elaborately with reference to the original documents and evidences to be made available before the authority. Such an elaborate adjudication on merits need not be entertained by the High Court in a writ proceedings under Article 226 of the Constitution of India.
In the present case, the reopening is based on certain materials on record, then further adjudications are to be done before the authority based on the materials available on record. The sufficiency of the reasons need not be gone into by the High Court in a writ proceedings. Thus, the petitioner is bound to co- operate for the completion of the reopening proceedings initiated u/s 147/148 of the Act and the respondent is directed to conclude the assessment / reassessment proceedings as expeditiously as possible by following the procedures as contemplated.
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