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Showing 421 to 440 of 1564 Records
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2022 (12) TMI 1144
Levy of Service tax - Business Auxiliary service of not - commission amount paid to foreign Commission agent - extended period of limitation - Revenue Neutrality - HELD THAT:- As regards the question of extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994, the same would not be available to the Department on the ground of revenue neutrality. We are of the view that the demand, having been raised by invoking the longer period of limitation is hit by the provisions of Section of the Act.
If non-registration and non-filing of returns is the criteria for rejecting the appellant‟s plea of bona fide belief and holding against them, the plea of limitation would not be available to any assessee, inasmuch as the Service Tax liabilities would arise only in those cases where the appellants are not registered and are not filing the returns. Coming to the bona fide belief of the assessee, there are number of factors which are required to be considered.
As no intention to contravene the provisions of Finance Act, 1994 and of the rules made thereunder can be attributed to the appellant for the reason that even if they are required to pay Service Tax on the disputed service, in question, provided by foreign agent, the entire Service Tax paid under RCM would be immediately available to them as Cenvat Credit and collection of Service Tax from the appellant would be a revenue neutral exercise - there are plethora of judgments by various Courts that no mala fide can be attributed to an assessee so as to invoke the longer period of limitation.
The demand is barred by limitation and is required to be set aside - Appeal allowed.
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2022 (12) TMI 1143
Invocation of extended period of limitation - non-payment of service tax - providing the taxable service as that of Business Auxiliary Service on commission basis who had collected huge amount from various persons/companies/organizations etc. during the period from 01.10.2014 to 30.06.2017 - suppression of facts or not - HELD THAT:- It is an admitted case of the appellant that the appellant did not get itself registered under Service Tax Commissionerate during the period in question while providing the impugned “Business Auxiliary Services” on commission basis. It has also been acknowledged while making submissions that the issue of services in question being taxable is no more res integra - Reliance placed in the decision of this Tribunal in the case of VED AUTOMOTIVES VERSUS COMMISSIONER OF CENTRAL EXCISE, KANPUR [2016 (11) TMI 836 - CESTAT ALLAHABAD], wherein a reference has been answered holding that the activity of direct selling agent on commission basis is a “Business Auxiliary Service” which is taxable under Section 65 (19) of the Finance Act, 1994.
Whether the demand should not have been confirmed as the Show Cause Notice was issued beyond the normal period of limitation? - HELD THAT:- It is observed that department can issue a show cause notice beyond the prescribed period of one year from the period under question only in accordance of the proviso to Section 73 of the Finance Act, 1994 - here there is suppression of any fact for the reason of fraud or collusion or any willful misstatement with an intent to evade duty, the department is entitled to invoke the extended period. No doubt mere non-disclosure of fact will not be such suppression as may entitle the department to invoke this provision except where there is an intent to evade the duty. From the above observed admission of the appellant, it is clear that appellant was not paying the service tax to the department despite providing the taxable service. It is also nowhere denied that even the service tax registration was not obtained.
It is also observed that the present show cause notice was issued based upon the information received from the Income Tax Department. It becomes clear that the amount received by the appellant during the period under challenge was taken as the income of the appellant and accordingly, the income tax liability thereupon was being discharged by the appellant. The circumstances are sufficient for me to hold that there was no intent on the part of the appellant to evade the liability - it is held that the intent to evade the duty has wrongly been confirmed against the appellant. The non-payment of service tax was purely a bona fide unawarenss about the liability. In such circumstances the extended period could not have been invoked. The order under challenge though has dealt with the amount which was service tax liability of the appellant but the demand was not raised during the statutory period prescribed for raising the same. As held above, there was no reason to invoke the extended period of limitation. It is held that demand has been time barred and thus has wrongly been confirmed by Commissioner (Appeals).
Appeal allowed.
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2022 (12) TMI 1142
Work contract services - Determination of Value - Consideration - taxability of amount received on accrual basis - Commercial or Industrial Construction services/ Erection, Commissioning or Installation service - Works Contract service - Renting of Immovable Property service - Business Support services - demand of service tax alongwith interest and penalty - HELD THAT:- From the impugned order, para 13.4, it is evident that Commissioner has concluded that the amount of Rs 60,00,000/- forfeited by the Appellant, is a consideration on the basis of the definition of term “consideration” as per Section 2 (d) of the Contract Act, 1962. However in the Finance Act, 1994, explanation to section 67, defines the term “consideration”. In our view the manner in which the term consideration has been defined by the Finance Act, 1994 is not in pari materia with the definition as contained in Contract Act. The impugned order which relies solely on the definition as contained in the Contract Act, for holding that this amount is “consideration”, for the services provided or to be provided cannot be upheld in view of the specific definition contained in Finance act, 1994. Commissioner needs to record a finding to the effect that this amount is an consideration as per the Finance Act, 1994 by referring to definition contained in therein.
Appeal is partly allowed and the matter is remanded back to the original authority.
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2022 (12) TMI 1141
Non-payment of Central Excise Duty on new packing machines added during the relevant month - non-payment on the ground that the number of old packing machine have been replaced with equal number machines and the total number of installed packing machines remained unchanged during the said relevant months - contravention of statutory provisions of Rule 6(4),7,8,9 and 13 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 - HELD THAT:- As regard the demand of Rs. 1,20,12,500/- we find that the case of the department is that provisions of Rule 8 nowhere provide the pro-rata payment of duty on the basis of date of installation of new Machines. As per department Appellant was required to pay duty for the whole month. The Learned Commissioner in impugned order also held that the Appellant was not entitled for the abetment of duty in case of non-production of the notified goods as provided in Rule 10. It should be appropriate at this juncture to re-visit the legal provisions.
In the present matter undisputedly appellant had followed the procedure, as the appellant filed declaration regarding change of number of packing machines and the declaration was accepted by the proper officer after due verification, the declaration was accepted and the annual capacity of the machine was fixed by the competent jurisdictional officers and the appellant accordingly paid the duty. The same is also clear from the following correspondences. There is no misdeclaration found by Revenue on the part of appellant regarding number of machines used for manufacture of notified goods. In such circumstance demands of duty over and above the duty determined by the Jurisdictional officer legally not correct.
It is clear the duty is payable on the number of installed machines which are deemed to be operating machines. In the present matter the number of installed machines in the month remained the same before and after replacement of the machines. Therefore, the demand confirmed by the Learned Commissioner in instant case is legally not correct.
In the present matter Revenue cannot demand duty unless the orders of determination of production capacity based duty has been reviewed. In the present case, it is seen that the Appellant after following the proper procedure paid the duty assessed by the Jurisdictional Deputy Commissioner fixing annual capacity of production after the replacement of packing machines, however no action was taken by the department to modify these orders by filing review application or appeal. On this ground also demand is prima facie not sustainable.
Appeal allowed.
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2022 (12) TMI 1140
Claim for monetization of the restored CENVAT credit as approved by the Hon’ble High Court of Karnataka in circumstances of closure of the factory of the appellant - operation of rule 8(3A) of Central Excise Rules, 2002 (as existing then) withdrawing privilege of consolidated payment at the end of each month as well as of discharge through CENVAT credit till the default is made good along with interest - HELD THAT:- The duty liability, on which CENVAT credit is availed, is nothing but the leviability discharged in accordance with section 3 of Central Excise Act, 1944 on clearances effected by the supplier - manufacturer and refund of that amount would be tantamount to negating the correctness of that levy. CENVAT Credit Rules, 2004 does not, for this reason, envisage any erosion of credit availed except by utilization towards duty liability under rule 3(4) thereof, by refund under rule 5 thereof or by recovery for ineligible availment under rule 14 thereof. To accede to the plea of the appellant herein would be to discard the leviability of duty/tax on manufacture/supply of goods/services procured by the appellant.
The appeal lacks merit and, for that reason, is dismissed.
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2022 (12) TMI 1139
Validity of assessment order - Deemed sale - transfer of right to use goods or not - inter-state transfer of goods - sale or not - HELD THAT:- This court finds force in the argument of Mr. Deb, learned senior counsel on the point that respondents have no jurisdiction and there is no transfer/sale and further the situs of sale - This court is of the considered opinion that the owner of the cylinder is IOCL. The transport/supply does not fall within the ambit of transfer of goods as defined in “sale”. Further, when transaction has taken place in Assam, the respondent authorities cannot have any jurisdiction over Interstate.
The impugned Assessment Order dated 31.03.2021 and consequently, the two demand notices dated 31.03.2021 issued by the respondent no.3 are liable to be set aside and quashed on the point of jurisdiction and also with regard to the right to sale of goods and further with regard to the place of execution of the contract since the situs of the sale which has been executed at Guwahati, the State of Tripura has no jurisdiction in so far as levying of tax by the respondents upon the petitioner - Petition allowed.
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2022 (12) TMI 1138
Validity of suo-motu revision order dated 12th July, 2018 passed by the Addl. Commissioner of Sales Tax (Addl.CST), Cuttack-II Range, Cuttack - jurisdiction of the Addl. CST to pass an order in suo-motu revision - HELD THAT:- In terms of Rule 5(2) of the OVAT Rules, the CST cannot delegate to an officer appointed under Section 3(2) of the OVAT Act, which includes the Addl. CST and the JCST, the powers of CST under Section 79(1) of the OVAT Act “without the prior approval of the Government”. The mandatory nature of the requirement of prior approval is evident from the fact that all the delegation notifications including the one dated 15th May, 2009 specifically mentioned the prior approval obtained from the Government. However, when one peruses the notification dated 5th June, 2018 in terms of which the CST delegated his power under Section 79(1) of the OVAT Act to the Addl. CST, reference is made only the earlier approval obtained on 30th April, 2009. That approval was not for delegation of the powers of the CST to the Addl. CST but delegation of the powers of the CST to the JCST.
The observation of the CST in the impugned order that the Addl. CST, at the time when the suo motu revision order was passed on 6th December 2018, was still exercising the powers of the JCST is also not factually correct. The notification promoting the JCST as Addl. CST and posting him on promotion was issued on 2nd May, 2018 itself. Therefore, at the time when the impugned suo motu revisional power was passed by the Addl. CST he was functioning as Addl. CST and not as JCST. Even in terms of the notification dated 5th June, 2018 the Addl. CST could have exercised the suo motu revisional power only if the order under revision was passed by the JCST or Dy. CST -
Admittedly, in the present case, it is the STO who has passed the assessment order under Section 42 of the OVAT Act which was sought to be revised by the Addl. CST. Therefore, even in terms of the notification dated 5th June, 2018 the Addl. CST lacked the jurisdiction to revise the order of the STO.
The Court is of the view that the suo motu revisional power passed by the Addl. CST on 6th December, 2018 was entirely without jurisdiction and beyond the powers of the Addl. CST. Consequently, the suo motu revisional order, and the impugned order of the CST affirming it in the appeal, are hereby set aside - Petition allowed.
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2022 (12) TMI 1137
Jurisdiction - Constitutional validity of Section 174(2) of the KSGST Act - Demand / Recovery of VAT after implementation of GST - Scope of saving clause under the GST Act - validity of notices and orders of assessment/penalty - competence of the State Legislature - Revenue, in purported exercise of saving power granted by Section 174(2) of the KSGST Act read with Section 25(1), Section 42(3), or Section 67 of the KVAT Act 2003, issued notices proposing to reopen the assessments of the Dealers, as the case may be for best judgment, penalty etc. - HELD THAT:- The State Legislature is competent to enact Section 174(2) of the KSGST Act. The consequence of such a conclusion is that clauses in Section 174(2) are within the competence of the State Legislature. To escape the saving clause's effect, the arguments noted above are canvassed. The argument proceeds on the assumption that with the repeal of the KVAT Act, an absolute right in favour of Dealers erasing and effacing every legal obligation under the KVAT Act has been attracted. The purpose of savings is intended to have certainty on initiation, enquiry, etc., even after the repeal is given effect.
Statutory obligation means an obligation arising under a Statute. Legal obligation means an obligation that derives from the operation of law. These obligations are discharged by duly complying with the requirement thereof, or the obligation stands discharged with the efflux of limitation. The third way now canvassed is that since notices are issued after 01.07.2017, the State cannot proceed to recover the amount - The absence of initiation of any proceeding before 16.09.2017 is not a criterion at all in the scheme of the KVAT Act. With the applicable saving clause, what is required in law is that when steps for reassessment etc., are taken up, those steps conform to the limitation covered by the applicable Section under the KVAT Act.
The notices now impugned are well within the period under Section 25 or within the reasonable period under Sections 56, 58 and 67; such proceedings are covered by the saving clause of Section 174(2) of the KSGST Act. The converse of the above deliberation is that the State Legislature, however, has the power to repeal and provide for a saving clause; still, on the interpretation now suggested to various clauses, again, the provisions of the KVAT Act could be rendered ineffective. The effect of the saving clause cannot be defeated on any of the grounds now raised by the Dealers. The Dealers must complete the legal obligations, or the timelines expire to assume rights either accrued or vested. It is not the case of Dealers that beyond the period of limitation, the impugned notices are issued or orders made. The migration to GST is not an amnesty given to defaulting dealers from paying the tax due under the KVAT Act - the Revenue/State has not disentitled itself from enforcing its right to recover the defaulted tax or tax dues under the KVAT Act arising before 01/07/2017.
The impugned notices are saved by clauses (i) to (iv) of Section 174(2) of the KSGST Act and are within the competence of the Department - Constitutionality of Section 174(2) of the KSGST Act and legality of notices/ orders as the case may be impugned in the respective Writ Appeals are answered against the dealers, hence necessarily, the Writ Appeals must fail and accordingly are dismissed.
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2022 (12) TMI 1136
Refund of the additional tax burden suffered by the petitioner in the light of introduction of the GST regime w.e.f. 1st July, 2017 onwards - HELD THAT:- The plain reading of the new amended Order of the State Government dated 30.09.2022 would reflect that the State Government has now for the Water Resources Department has taken a decision to ensure that the Additional Tax burden that has suffered by a Contractor in the event of a new tax that is imposed, the additional burden shall be reimbursed to the contract, subject to the Contractor furnishing the details of the difference of the tax liability and the additional tax that was required to be paid by the Contractor.
It is the further contentions of the counsel for the petitioner that even otherwise the decision not to reimburse would be too harsh a decision on the part of the respondents, for the reason that the Contractor is not at fault in any manner for incurring the additional tax liability that has occurred because of the introduction of any new tax. The bid and the price quoted therein by the Contractor always is taking into consideration the existing taxes and for which he is liable to pay and deposit. In case of additional liability incurred on account of the imposition of a new tax, the Department has to have a mechanism of compensating the Contractor to the extent of the additional tax liability that the Contractor had to bare - It goes without saying that this aspect has been fairly appreciated by the Government itself and had taken a decision of reimbursing the additional tax burden to the Contractors when they had issued Orders for the various Departments under the State Government like: PWD, Chhattisgarh Rural and Development Agency and Chhattisgarh Urban Administration and Development Department and subsequently now vide the order dated 30.09.2022 in the Water Resource Department as well.
The impugned therefore deserves to be and is accordingly set aside / quashed - Petition disposed off.
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2022 (12) TMI 1135
Classification of goods - marine paint used on the hull of the ships - anti-fouling paint should be considered part of the ship or not? - N/N. 1/2017, dated 28 June 2017 - HELD THAT:- The Authority has observed that the paint generally means any liquid or composition that, after application to a substrate in a thin layer, converts into a solid film. There are various types of paints; one type is anti-fouling paint, which falls under Item 3208. It was the Petitioner's case that the goods marine paint would be covered under Sr.No.252 being part of goods falling under Headings-8901, 8902, 8904, 8905, 8906 and 8907 and; therefore, the enquiry before the Authority was restricted to ascertaining whether goods- marine paint supplied by the Petitioner would be a part of goods Headings 8901, 8902, 8904, 8905, 8906 and 8907. Both the Authorities concluded that just because, as per the Merchant Shipping Act, the marine paint is mandatory to be applied, it does not become part of the ship. This is a considered opinion reached by both Authorities - both the Authorities have adopted the approach required for the classification of the goods in the context of the application of tax, and the Authorities have not widened the enquiry to ascertain various issues sought to be raised by the Petitioner as regards the legality of sailing of the vessel without the marine paint.
The contention of the Petitioner primarily centered around the necessity to apply marine paint to increase the longevity and productivity of the vessel, and the legal position requiring that the paint to be used on a ship without which it cannot sail and requirements of International Conventions for applying anti-fouling system. Though the learned counsel for the Petitioner is right in contending that the argument of the learned counsel for the State that paint is just one part of the anti-fouling system was not a ground on which both the Authorities decide the question, the conclusion arrived at by the Authorities cannot be said to be without considering the material on record.
In the case at hand, the Authority was considering the interpretation and classification of entries under the CGST Act. In our opinion, the Appellate Authority has rightly distinguished all these decisions cited observing that under this regime prime test is whether the product is marketable or not. Similarly, the Appellate Authority has also referred to and distinguished the decision of the Gujarat High Court in the case of SURGICHEM VERSUS STATE OF GUJARAT [1991 (7) TMI 303 - GUJARAT HIGH COURT]. The Authorities have dealt with the decisions cited before the Authorities, and there is no fundamental error in their approach.
The view taken by the Authority and Appellate Authority is based on the material placed before it. The Petitioner seeks to convert this limited enquiry in respect of Advance Ruling into an appellate enquiry, which is not permissible to be undertaken in writ jurisdiction. The scrutiny in writ jurisdiction of the orders passed by the Authority and the Appellate Authority is minimal. The Petitioner, who sought an advance ruling as to which entry the marine paint should fall, was given full opportunity of hearing - Petition dismissed.
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2022 (12) TMI 1134
Cancellation of GST registration granted to the petitioner - application for revocation was beyond the time prescribed under Section 30 of the CGST/SGST Acts - HELD THAT:- It is a principle at the heart of administrative law that where the law requires a thing to be done in a particular manner, it must be done in that manner alone. - The action taken by the officer by initiating proceedings in form GST REG-31 of the CGST Rules and completing the proceedings for cancellation of registration by issuing Ext.P1 order is clearly without jurisdiction. If the Officer wishes to initiate proceedings for cancellation of registration, he must issue a notice as specified in Rule 21 of the CGST Rules and in form GST REG-17 and not in form GST REG-31.
The Division Bench of the Gujarat High Court in AGGARWAL DYEING AND PRINTING WORKS VERSUS STATE OF GUJARAT & 2 OTHER (S) [2022 (4) TMI 864 - GUJARAT HIGH COURT] has considered an almost identical situation. The Court considered the contents of the show cause notice issued in that case and came to the conclusion that the show cause notice was woefully inadequate inasmuch as it did not specify the reasons which compelled the Officer to initiate action for cancellation of registration.
The Supreme Court in GOVERNMENT OF KERALA & ANR. VERSUS MOTHER SUPERIOR ADORATION CONVENT [2021 (3) TMI 93 - SUPREME COURT] has taken the view that where concessions or exemptions are granted with a specific purpose of promoting or encouraging a certain activity the principle that such concessions/exemptions must be interpreted in favour of the revenue does not apply - In the facts of these cases, this Court is concerned with the provisions of Sections 29/30 of CGST/SGST which gives to the power to cancel registration and also to revoke it. These are not provisions which need to be interpreted with reference to the principles laid down in the COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY & ORS. [2018 (7) TMI 1826 - SUPREME COURT] and in GOVERNMENT OF KERALA & ANR. VERSUS MOTHER SUPERIOR ADORATION CONVENT [2021 (3) TMI 93 - SUPREME COURT].
The quashing of the impugned order of cancellation will not have the effect of absolving the petitioner of any fiscal liability - Petition allowed.
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2022 (12) TMI 1133
Suspension of GST registration of petitioner - no additional place of business or any business in the principal place was found - HELD THAT:- As section 30 of the Assam GST Act, 2017 provides alternative and efficacious remedy to the petitioner to apply for revocation of the cancellation of the registration, the Court is of the considered opinion that the petitioner be relegated to the concerned designated authority for availing remedy as prescribed under the provision of section 30(1) of the Assam GST Act, 2017.
As the petitioners have approached this Court within the period of limitation prescribed under section 30(1) of the Assam GST Act, the Court is inclined to provide that in the event the petitioner makes an application before the Officer empowered to deal with the prayer for revocation of cancellation of registration within a period of 15(fifteen) days from the date of this order, the concerned authorities shall accept the application for revocation filed by the petitioner under section 30 of the Assam GST Act, 2017 and if such an application is made/ filed within the extended time, such an application shall not be dismissed on the ground of delay.
Application disposed off.
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2022 (12) TMI 1132
Cancellation of GST registration of petitioner - failure to furnish returns for a continuous period of six months - HELD THAT:- Since, the petitioner failed to furnish returns for a continuous period of six months and show cause notice has been sent to him, it is directed that the petitioner shall file an application for revocation under Section 30 of the GST Act in terms of Rule 23 of the GST Rules. Though it is time barred, we are inclined to wave the limitation and direct the petitioner to file application for revocation within 21 days hence. He shall also comply the other provision of Section 30 of the Uttarakhand GST Act, i.e, submission of returns for the defaulted six months and any further completed months after the revocation. In such case if dues is found to be due from the petitioner and he pays the same than his case shall be considered liberally by the revenue and shall be dispose of within 15 days.
Application disposed off.
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2022 (12) TMI 1131
Seeking grant of bail - fake ITC passed without any actual supply of goods - bogus firms - offence under Section 132 (1) (b) of CGST Act, 2017 - HELD THAT:- As far as creation of firm is concerned, again since the entire process was online, at least, technical investigation in this regard is required and is wanting. However, considering that investigation is being carried out, also the fact that as on date, there is no independent evidence other than the statements against the accused, as also, the fact that he has already spent more than 35 days in JC, as also, considering that co-accused has already been admitted to bail and Department has not sought the cancellation of the bail of co-accused, the present accused Shubham Goyal is also admitted to bail on furnishing of bail bonds/surety bonds in the sum of Rs.5,00,000/with one surety of like amount to the satisfaction of the concerned MM/Duty MM subject to the conditions imposed.
Application allowed.
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2022 (12) TMI 1130
Seeking grant of Regular Bail - fraudulent transactions - it is suspected that spurious goods have been exported and ITC claimed fraudulently - HELD THAT:- The case of the Department seems to be that there is a chain of documents without any actual supply of products while simultaneously there is no claim that the initial tax payment was not made and the entire claim of ITC in the chain is without any input tax deposit. Rather the Department is suggesting that, even though, there is payment of tax at one stage, all ITCs claimed in the chain are without any supply of goods. In the alternative and in my view, to explain the inherent contradiction in the said argument, the counsel for the Department has coined the parallel theory that if there was actual purchase of cigarettes by M/s Radiant Traders, the same were perhaps sold in the market without invoicing and spurious smoking mixture was used as a cover to explain its disappearance, as also, used for the purposes of claiming input tax credit for the export of the smoking mixture. This is proposed to be established by firstly, the lab test report dated 02.11.2022 and secondly, the statement of the applicant/accused.
Surprisingly, even though, the report was given by the chemist on 02.11.2022, that is even before the arrest of the accused, the Department made no further attempt to seek an opinion from another lab on the subject. Rather, the Department chose to arrest the accused and even after the arrest and up till today the samples have not been sent to any other lab to seek answer to query no. 2 and 3 raised by the IO as far as back on 19.10.2022. The Department seems content with the assumed position that Tobacco was not used in the smoking mixture, which assumption is in the teeth of the inconclusive opinion given by the chemist on 02.11.2022 - Why the Department chose not to send the samples to another lab seeking answers to query no. 2 and 3 when the accused is languishing in Jail, that too, in the clear absence of any opinion on the presence of Nicotine and Tobacco in the product? The benefit of this serious lapse in the investigation has to be given to the accused at this stage.
In view of the discussion pertaining to the assumption of the Department regarding non use of Tobacco as a input, even though the report of the chemical examiner being inconclusive on the presence of nicotine and tobacco for want of testing facility, the period already undergone by accused in JC and want of any evidence other than the statement of the accused and the aforesaid discussion, the accused is admitted to bail on furnishing bail bonds/surety bonds in the sum of Rs.10,00,000/with one surety of like amount to the satisfaction of the concerned Ld. MM/Duty MM and also subject to the conditions imposed.
Bail application allowed.
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2022 (12) TMI 1129
Revision u/s 263 by CIT - excess deduction claimed under Section 35 (2AB) - As stated that the assessee has suo moto added back amount while computing the taxable income for the relevant assessment year - HELD THAT:- As furnished the relevant extracts of the financial statement for the financial year 2015-2016 highlighting all the relevant details. Further the location wise break up of those items of expenses as reflected in the profit and loss account were also placed before the learned tribunal and it was explained that the items set out in the Column (B)(C)(D)(E) in the above table formed part of the depreciation on scientific research assets; assets written off and profit and loss on sales of asset debited in the profit and loss account. Thus, it was explained that the sum of Rs. 1,34,45,166/- was added back in the computation of income.
This aspect of the matter has been analyzed by the learned tribunal and it has found that the said sum was added back in the computation of income and therefore there was absolutely no basis for the PCIT to invoke his power u/s 263 - records clearly show that the assessing officer had issued notices to the assessee on the very same issue considered their reply thereafter pointing out certain discrepancies issued show cause notice for which reply was submitted by the assessee and after a detailed enquiry the assessment has been completed. Thus, it is not a case of lack of enquiry or lack of proper enquiry.
PCIT does not in as many words states that there was lack of enquiry or lack of proper enquiry and all that is said is that the assessing officer did not verify these aspects which is factually incorrect. Therefore, it is not a case where the PCIT could have invoked his jurisdiction under Section 263 of the Act.
Advertisement expenditure for employment charged by “LINKED IN” and bank charges therein -Advertisement expenses in June 2014 were admitted as liability and crystallized for payment in the year under consideration owing to the fact that the “LINKED IN” being non-resident had furnished the necessary documents in the such as TRC under Section 90(4) of the Act read with Rule 21 AB of the Rules and no PE certificate etc. only in the assessment year under consideration.
Tribunal noted it is not the case where these expenses were charged as deduction in the preceding year more importantly, the tribunal noted that there is no revenue implication and no prejudice is caused to the revenue since the tax rate applicable to the assessee during the assessment year 2015-2016 to which invoices relates and the tax rates applicable for the assessment year 2016-2017 in which the invoices were accounted and paid were the same.
Hon’ble Supreme Court in Malabar Industrial Company Limited [2000 (2) TMI 10 - SUPREME COURT] held that every loss of revenue cannot be treated as prejudicial to the interest of revenue and if the assessing officer has adopted one of the courses permissible under law or where two views are possible and the assessing officer has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order, unless the view taken by the assessing officer is unsustainable under law.
Also on facts the tribunal found that the PCIT has not carried out any enquiry on his own and merely set aside the assessment order and sent the file back to the assessing officer to re-examine the issues which is contrary to the law as laid down in several decisions and the tribunal rightly noted the decision in DG Housing Projects Limited [2012 (3) TMI 227 - DELHI HIGH COURT] - No substantial questions of law.
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2022 (12) TMI 1128
Amount shown in 26AS aken into consideration even when the TDS certificate indicates a higher receipt - HELD THAT:- We find that the Tribunal had done an elaborate fact finding exercise and has pointed out as to how the assessing officer erroneously relied upon only the figures mentioned in the TDS certificate and ignored Form No.26AS - HELD
Simply because there is difference in the claim of assessee in respect of TDS credit and the corresponding income, the AO has made the addition which cannot be accepted when the Form 26AS gives a different picture, which also assessee has no control; and 26AS Forms are generated by the Income-tax department and the figures come close to the assessee’s contention. Therefore, opinion the assessee’s income should be taken as Rs.3,95,030/-, which is shown in Form 26AS (downloaded from the Income tax Department website) and she should be given TDS credit of only Rs.39,569/- as reflected in the Form 26AS. We direct the AO to adopt these figures and compute the taxable income of assessee accordingly as per law.
In this appeal, the above factual position is not being disputed by the revenue. Thus, we are of the clear view that there is no substantial question of law much less substantial question of law arising in this appeal for consideration.
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2022 (12) TMI 1127
Revision u/s 263 - According to PCIT, the AO failed to verify the excess allowance of bad debts - HELD THAT:- As this being limited scrutiny assessment framed by the AO for the purpose of verification of large business loss incurred in the money lending. We noted that the AO has gone into the details and noted in the assessment order - We also noted that all the debtors have confirmed while summoned and statements were taken from them. Some of them could not attend in person but confirmed in writing.
We noted that the AO has formed an opinion and now PCIT, should not have invoked the powers of revision u/s.263 of the Act on the same issue which is examined by the AO in detail. Hence, we find that the revision order passed by PCIT is bad in law and hence, the same is quashed. Appeal filed by the assessee is allowed.
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2022 (12) TMI 1126
Addition under the head ‘income from capital gains’ - business of real estate development had converted her land into stock-in-trade in terms of provisions of Sec.45(2) - assessee has formed a layout as per approved plan from the local municipal authorities - AO has computed long term capital gains in terms of Sec.47(iii) of the Act, on land earmarked for road, on the ground that when the assessee has converted her own land into public roads, there is an extinguishment of right in the land which amounts to transfer within the meaning of Sec.47(iii) - HELD THAT:- We ourselves do not subscribe to the reasons given by the AO for the simple reason that the land earmarked for public utility purpose in terms of municipal regulations while forming residential lay out, cannot be brought to tax either u/s.47(iii) of the Act or u/s.45(2) of the Act, because, relinquishment of right in land earmarked for common utility purpose, cannot be considered as extinguishment of any right in property which can be considered as transfer within the definition of Sec.47(iii) - the provisions of Sec.45(2) of the Act, also cannot be invoked to compute business profits when the land has been converted into stock-in-trade, because, the assessee has not transferred the land for a consideration.
We are of the considered view that when the assessee has relinquished her right in the land earmarked for common utility purpose in terms of regulatory requirements and also executed Gift Deed in favour of the Commissioner, Virudhachalam, without any consideration, then, the question of computing long term capital gains on such land and also business profit in terms of Sec.45(2) of the Act, does not arise.
In this case, the assessee has executed a Gift Deed dated 22.03.2019 and handed over the land in favour of the Commissioner, Virudhachalam Municipality. In our considered view, said transaction neither attracts capital gains as per Sec.47(iii) of the Act, nor business profit as per Sec.45(2) - We are of the considered view that the AO is completely erred in taxing deemed long term capital gains and deemed book profit in respect of 40,386.81 sq.ft. land earmarked for public utility purpose and handed over to local municipal authorities. CIT(A) after considering relevant facts has rightly deleted the additions made by the AO and thus, we are inclined to uphold the order of the Ld.CIT(A) and dismiss the appeal filed by the Revenue.
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2022 (12) TMI 1125
Assessment u/s 153A - disallowance of deduction u/s 80IC - HELD THAT:- We note that the assessment was framed u/s notice u/s 153A of the Act. In the assessment order, no specific reason has been given by the Assessing Officer for making disallowance. He has not pointed out the defect if any noted in the books of accounts of the assessee warranting the said disallowance.
In our considered opinion, CIT(A) has taken a correct view of that matter. Without pointing out any shortcoming in the claim of the assessee in terms of section 80IC of the Act, no disallowance is sustainable. More so when the AO himself noted that the assessee has furnished complete details and no defect has been pointed out. In this view of the matter, in our considered opinion, there is no infirmity in the order of the Ld. CIT(A), hence, we uphold the same.
Whether addition has been made de-hors incriminating material found during search? - The assessee had also relied upon Hon’ble jurisdictional High Court decision in the case of Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT ]
CIT(A) has dismissed this ground of the assessee. We find that the same is only of academic interest. As, we have upheld the Ld. CIT(A)’s order on merits and the Revenue’s appeals are liable to be dismissed. Accordingly, the Cross Objections of the assessee are also dismissed as infructuous.
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