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Showing 421 to 440 of 1182 Records
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2025 (2) TMI 762
Assessment of trust - Adjustments contemplated u/s 143(1) - Treatment of corpus donation as voluntary donation by the authorities - HELD THAT:- We are of the considered view that treatment of such corpus donation as voluntary donation falls outside the scope of adjustments contemplated u/s 143(1) unless such incorrect claim is apparent from any information in the return of income.
In the return of income filed by the assessee, such donation was specifically treated as corpus donation and not as voluntary donation. Accordingly, in our considered view, treatment of corpus donation as voluntary donation falls outside the scope of adjustments contemplated u/s 143(1) of the Act.
Denial of exemption u/s 11&12 - late filing of Form No. 10B - As decided in Shree Swaminarayan Charitable Trust [2024 (10) TMI 1635 - ITAT AHMEDABAD] delay in submission of Form No. 10B is a procedural defect and once the said Form has been filed during the course of hearing, no disallowance is called for on account of late / delayed filing of Form No. 10B. In the instant case, we observe that the assessee had filed Form No. 10B before Ld. JCIT(A) before conclusion of appellate proceedings.
Thus, exemption u/s 11&12 of the Act cannot be denied to the assessee only on account of late filing of Form No. 10B. Accordingly, in light of the above observations, the appeal of the assessee is allowed.
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2025 (2) TMI 761
Denial of deduction claimed u/s 80IA - contract with Lucknow Metro Rail Corporation Ltd. (LMRCL) - HELD THAT:- The assessee was only awarded the contract for design and construction of tunnel as specified in the tender document and the job of the assessee was over when the construction of tunnel was done as per the design approved.
Assessee also does not fulfil the condition that the agreement has to be with Central Government/ State Government / Local Authority/Statutory Authority as LMRCL, does not fit in any of them. It can be seen from the record that LMRCL was incorporated on 25/11/2013 under the Companies’ Act, 1956 as a special purpose vehicle between the Central and State Government with equity share of 50:50, therefore, in our understanding of the law it cannot be regarded as Central Government or State Government, nor does it fall under the definition of local authority statutory authority. It is trite law that for claiming deduction u/s 80IA(4) all conditions have to be fulfilled cumulatively.
No merit in the claim of deduction u/s 80IA of the Act and the lower authorities have not faulted anywhere by denying the same. Since we have dismissed the claim of the assessee u/s 80IA at the very threshold treating the assessee as a contractor, we do not find it necessary to address the issues taken by the AO for denying the impugned claim. Accordingly both the appeals by the assessee are dismissed.
Disallowance of legal and professional fees (fees for technical services) paid to Gulemark TPL JV - sole reason for the disallowance is that Gulemark TPL JV, has not rendered the services, therefore, the claim was disallowed u/s 37 - HELD THAT:- As details were supported by copies of bank payment advices for payment made to GLM were legal and professional fees before the AO along with copies of visa of the two employees of GLM visited India from time to time during the tenure of the project for rendering services supported with copy of leave and license agreement wherein concerned employees of GLM are accommodated in India along with vouchers of car hire charges for domestic transfer cost and two employees during the year visit to India.
We are of the considered view that the fees for technical services as claimed by the assessee has been incurred for the purpose of business and, therefore, eligible for deduction under section 37 of the Act. AO has never treated the said claim as capital expenditure and has accepted the same as revenue expenditure, therefore, we do not find any reason to interfere with the findings of the CIT(A). Accordingly, appeals of the revenue are dismissed.
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2025 (2) TMI 760
Bogus LTCG - Addition u/s 68 - exemption u/s 10(38) denied - HELD THAT:- Addition made by the AO u/s 68 of the Act in both the years under consideration are devoid of any merit. The claim of the assessee u/s 10(38) of the Act has been made based on facts which could not be rebutted by the AO. The documentary evidences could not be rejected without bringing on record any substantial piece of evidence and just on the basis of certain individuals who also were not produced for cross examination of their stated stands - AO is therefore, directed to delete the additions made u/s 68.
Addition on account of estimated commission at the rate of 2% - CIT(A) deleted addition - HELD THAT:- Since we have already decided the issue of LTCG in the foregoing paras and deleted the addition made u/s 68 of the Act, thus holding the share transactions as genuine, the above ground of the Revenue has no merit which is accordingly, dismissed.
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2025 (2) TMI 759
Unexplained cash credit u/s 68 r.w.s 115BBE - HELD THAT:- AO made the addition u/s 68 as unexplained cash credit of the same amount which was accounted in the books as sales.
The explanation from a business entity should be on the basis of facts supported by some evidences which will establish that in due course of business, such income could have been generated by the assessee. It is not a case of survey or search, but scrutiny. Thus AO, could have only relied the financials or other evidences supporting the financials to see if the onus is duly discharged.
In the instant case the assessee had explained the source as sales, produced the sale bills and admitted the same as revenue receipt. Purchases, sales and the Stock are interlinked and inseparable. We find that primarily the AO has not doubted the sales on the basis of suspicious sales through 221 invoices and that no stock register was maintained.
The reasons to suspect the sales merely because of some routine observation of suspicious nature such as making sales of 270 bills in the span of 4 hours, non availability of KYC documents for sales, non writing of tag of the jewellery to the sale bills, non-availability of CCTV footage for huge rush of public etc., were not found to be good enough to make addition u/s 68.
Also, the contention of the assessee that due to demonetization, the public became panic and the cash available with them in old denomination notes becomes illegal from 09.11.2016 and made the investment in jewellery, thereby thronged the jewellery shops appear to be reasonable, and deserved due consideration, as done by the Ld. CIT(A). Decided in favour of assessee.
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2025 (2) TMI 758
Classification of goods - Lamda Cyhalothrin Technical - be classified under the heading “CTH 38089199”? - Merchandise Exports from India (MEIS) Scrips - HELD THAT:- Having regard to the facts of the present case, especially the fact that the controversy with regard to classification was earlier examined and decided by the Directorate General of Foreign Trade to the effect that the goods, Lamda Cyhalothrin Technical, be classified under the heading “CTH 38089199” and, thereupon, it had issued Merchandise Exports from India (MEIS) Scrips, there are no good ground and reason to interfere with the impugned judgment.
The appeal is dismissed.
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2025 (2) TMI 757
Classification of imported goods - parts of the shock absorbers to be classified under Customs Tariff Item [CTI] 8714 91 00 or under 8714 10 90? - it was held by CESTAT that 'Classification of the goods in the order impugned in this appeal under 8714 10 90 needs to be sustained.'
HELD THAT:- There are no good ground and reason to interfere with the findings recorded by the Customs, Excise & Service Tax Appellate Tribunal. Hence, the present appeal is dismissed.
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2025 (2) TMI 756
Entitlement to exemption under N/N. 50/2017 dated 30th June, 2017 - Challenge to provisional attachment order of the bank account of the Petitioner - certain parts of CNG kits in 2017 - subsequant withdrawal of the exemption - HELD THAT:- This Court holds the view that the Customs Department ought to take a decision as to whether there is adequate material before it or not and if they wish to issue a show cause notice the same sought to be done at the earliest. Therefore, the Department is directed to complete the investigation and issue a show cause notice within a period of three months from now.
In the meantime, since the demand, which is yet to be computed, seems to be only in the range of Rs. 30 crores and considering the amount of business that the Petitioner is doing, it is directed that the Petitioner shall deposit a sum of Rs. 3 crores as an ad hoc deposit with the Department within a week. The HSBC bank accounts shall be defrozen immediately to enable the Petitioner to deposit within a week, a sum of Rs. 3 crores with the Department.
Petition disposed off.
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2025 (2) TMI 755
Implementation of the order dated 29th January, 2024 - release of certain goods belonging to the Petitioner, who had arrived from Paris and had goods detained by the Customs Department - liberty sought by the Petitioner to file an appeal - HELD THAT:- On both counts, the Court has perused the copy of the incomplete appeal which has been served by the Department upon the Petitioner. Clearly, there has been an appeal which has been filed by the Department of which formal notice may yet even be not issued to the Petitioner. Moreover, as per the Petitioner, the appeal has also not been listed till date.
Considering these circumstances and the fact that the matter would have to be adjudicated comprehensively by the Commissioner (Appeals), the Petitioner is also permitted to file his appeal within a period of thirty days from now before the Commissioner (Appeals) - If the Petitioner intends to seek implementation of the order dated 29th January 2024, to the extent that permits the deposit of redemption fine and partial release of goods for export under specified conditions, he may seek the same from the Commissioner (Appeals).
Let both the Appeals be listed before the Commissioner (Appeals) on 15th April, 2025 for hearing and adjudication in accordance with law.
The petition is disposed of.
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2025 (2) TMI 754
Challenge to preventive detention order under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA Act) - Smuggling of foreign gold from Yangoon (Myanmar) to Gaya through Gaya International Airport with the active involvement of Marshal deputed in the flight - petition was in custody in connection with the criminal complaint for the same incident - HELD THAT:- The object of detention under the detention law is not to punish, but to prevent the commission of certain offences. Further, in the recent decision rendered by the Hon’ble Supreme Court in the case of Ameena Begum [2024 (1) TMI 4 - SUPREME COURT], it has been specifically held by the Hon’ble Supreme Court that a constitutional court, when called upon to test the legality of orders of preventive detention, would be entitled to examine certain aspects referred in paragraph 28.1. to 28.10 of the said decision.
In the case of Saraswathi Seshagiri [1982 (3) TMI 252 - SUPREME COURT], the Hon’ble Supreme Court has observed that the concerned detenue tried to export Indian Currency to the tune of Rupees 2,88,900.00 to a foreign country in a planned and pre-meditated manner by clever concealment of it in several parts of his baggage and, therefore, the Hon’ble Supreme Court observed that the detaining authority was justified in coming to the conclusion that he might repeat his illegal act in future also. His past act in the circumstances might be an index of his future conduct. Thereafter, the Hon’ble Supreme Court observed that the authority may prosecute the offender for an isolated act or acts of an offence for violation of any criminal law, but if it is satisfied that the offender has a tendency to go on violating such laws, then there will be no bar for the State to detain him under a Preventive Detention Act.
In the case of Rekha [2011 (4) TMI 1217 - SUPREME COURT], the Hon’ble Supreme Court has observed that if the ordinary law of the land (the Penal Code and other penal statutes) can deal with a situation, recourse to a preventive detention law will be illegal.
The main contention of the petitioner is that criminal complaint has been lodged against him and in connection with the same he was already in custody when the impugned order of detention has been passed. Thus, there was no apprehension on the part of the detaining authority that petitioner will indulge into similar type of activity if he is released on bail. Thus, the subjective satisfaction of the detaining authority is vitiated. The aforesaid contention is misconceived in view of the decision rendered by the Hon’ble Supreme Court in the case of Haradhan Saha [1974 (8) TMI 104 - SUPREME COURT] and observations made in paragraph 26 in the case of Ameena Begum.
Delay in service of the order of detention by contending that the detention order has been passed on 06.03.2024, which was communicated to him on 29.05.2024 - HELD THAT:- From the records, it transpires that the order of detention was passed on 06.03.2024, which was duly executed on the petitioner on 11.03.2024. Thereafter, the petitioner made representation on 04.04.2024 to the detaining authority and the Central Government, which was received on 12.04.2024 and 15.04.2024 respectively, which were duly considered by the concerned authorities and, in the meantime, the case of the petitioner was referred to the Advisory Board on 10.04.2024 and after conducting the proceedings on 29.04.2024 and 13.05.2024, the Advisory Board gave the opinion and opined that the detention of the petitioner is justified. The said opinion has been duly considered by the Central Government and thereafter the Central Government also confirmed the impugned detention order, which was communicated by the Deputy Secretary of the Government of India vide order dated 29.05.2024. Therefore, it cannot be said that the order of detention dated 06.03.2024 was communicated to the petitioner on 29.05.2024. Hence, the said contention is misconceived.
Conclusion - The respondent detaining authority has followed all the constitutional, statutory and procedural requirements as well as safeguards. The subjective satisfaction of the detaining authority does not vitiate, as has been contended by the petitioner. Therefore, when the detaining authority after satisfying itself subjectively after considering all the relevant material, passed the impugned order of detention, the same cannot be interfered with while exercising power under Article 226 of the Constitution of India.
Petition dismissed.
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2025 (2) TMI 753
Classification of Natural Beta Carotene Powder - classifiable under Tariff item 3203 00 20 of the Customs Tariff Act, 1975 or under Customs Tariff Heading 2106 90 60? - HELD THAT:- Chapter 3203 is meant for ‘Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks’ which clearly establish the fact that these colouring products are industrial products and not edible products as the case of the impugned product. Hence, the question of classifying the product under Chapter Heading 3203 is ruled out.
The supplier’s brochure clearly mentions that ‘Beta Carotene’ is used as colouring matter in a variety of food and beverages applications as it gives bright yellow-orange colour to the food products when it is added. Chapter 2106 9060 which is meant for Food flavouring material is nothing but a product which provides colouring for the food items which are edible, the impugned product being a colouring food agent is specifically covered under this category, hence rightly classifiable under Customs Tariff Heading 2106. The products are rightly classifiable under Chapter Heading 2106 9060, consequently, impugned order is upheld.
Conclusion - The product fell under Tariff Heading 2106 as a food flavoring material, specifically for providing color to edible items.
Appeal dismissed.
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2025 (2) TMI 752
Classification of imported Power Weeders - to be classified under Chapter Heading 8433 or under Chapter Heading 8432 of the Customs Tariff Act, 1985? - concessional rate of duty - benefit of N/N.12/2012-Cus. dated 17.03.2012 - HELD THAT:- The appellant had filed Bill of Entry No.3675794 dated 29.10.2013 for clearance of 150 sets of Rotary Power Weeder and on investigation, it was found to be ‘Brush Cutters’ and hence, the benefit of Notification was denied demanding a duty of Rs.3,91,930/- which was paid under protest by the appellant. On further investigation for the period 06.12.2010 to 23.07.2013, similar goods were found to be ‘Brush Cutters’ which were imported under concessional rate of duty, hence, the differential duty of Rs.26,43,951/- on the past clearances was also confirmed.
With regard to past clearances, it is found that Bills of Entry No. 4656425 dated 16.09.2011, 6559041 dated 17.04.2012, 6935540 dated 26.05.2012, 7280139 dated 03.07.2012, the appellant has declared the items as ‘Brush Cutters’ as also the description was correctly mentioned, therefore, the question of suppression does not arise. In view of the above, there are no reason to sustain the demand beyond the normal period of limitation. Accordingly, the demand is confirmed for the normal period.
Regarding confiscation of goods valued at Rs.18,65,268/- is sustained, however redemption fine reduced to Rs.2,00,000/- under Section 125 of the Customs Act, 1962. Since, demand is confirmed for normal period, penalties imposed under Section 114A and Section 114AA is set aside. Penalties imposed under Section 112 and 114AA on Director S.V. Aravind is also set aside.
Conclusion - i) Classification of 'Brush Cutters' under Chapter Heading 8467 8990 is upheld. ii) Penalties not imposed due to suppression of facts. iii) Confiscation of goods sustained, redemption fine reduced.
Appeal allowed.
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2025 (2) TMI 751
Applicability of Anti-Dumping Duty (ADD) - Origin of imported consignments of PVC Flex Banner - Malaysian origin or Chinese origin - admissibility and reliability of statements and documents provided by witnesses - cross-examination of only one witness allowed, while that of otheres were denied - applicability of section 138B of the Customs Act - HELD THAT:- The entire case has been built up by the investigation on the basis of the statements recorded and documents submitted by these persons. The appellants have questioned the veracity of these documents as the originals of these documents were never given to them. The appellants also submitted that the persons who handed over the documents never disclosed the origin of the documents and from where they got them. Thus, if the Department wanted to rely upon the statements recorded from them and the documents submitted by them, then the Department should have allowed cross examination of all those persons. In stead, cross examination only one person by name Shri Arup Bandhu Guha was conducted. Thus, the statements recorded and documents submitted by all persons, other than Shri Arup Bandhu Guha, are not admissible as evidence in the adjudication proceedings as they have not fulfilled the tests prescribed in Section 138B of the Customs Act, 1962.
By relying on the decision of the Hon'ble Calcutta High Court in Ajay Saraogi Vs. Union of India [2023 (9) TMI 733 - CALCUTTA HIGH COURT] it is held that the statements given and documents recovered from those persons who have not been cross examined, cannot be relied upon in the adjudication proceedings in this case.
Regarding the statements recorded and the documents submitted by Shri Arup Bandhu Guha, whose cross examination was conducted, it is observed that during the cross examination Shri Guha has given vague and unclear answers to the questions put by the appellants.
Regarding the origin of the goods, we observe that the appellants have produced AIFTA Certificate of Origin, which was issued by the Ministry of International Trade & Industry, Malaysia. It is observed that the investigation has not established that the said Certificates are not genuine. The investigation only alleges that the said certificates have been obtained by influence, but it is observed that the said claims were not supported by any evidence.
In all the swift transfer messages, name of the overseas supplier of Malaysia was given. We find that there is no allegation that the money was transferred to supplier appearing in the alleged master bill of lading. The entire payments were remitted to said overseas supplier and there is no evidence that said supplier had not received the payments remitted by the appellants. Thus, the evidences available on record indicate that the Malaysian exporter was the actual beneficiary of the money transfer.
The demands of Anti-Dumping Duty, Customs Duty and interest confirmed in respect of all the ten consignments imported by the appellants is legally not sustainable and accordingly, the same are set aside. Since, the demands of duty are not sustainable, the question of imposition of penalties does not arise.
Conclusion - The evidences available on record indicate that the goods are of Malaysian origin and thus no Anti-Dumping Duty is payable on the 10 consignments imported by the appellant. The appellant is eligible for the benefit of concessional rate of duty provided under Customs N/Ns.46/2011-Cus. dated 01.06.2011 and 053/2011-Cus. dated 01.07.2011.
Appeal allowed.
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2025 (2) TMI 750
Allegations of violations by a SEBI registered stockbroker - violations have been alleged by the SEBI against the noticees for Misuse of clients’ funds, Funding the clients beyond T+2+5 days and Not issuing the contract notes.
HELD THAT:- As recorded in the impugned order that during the inspection, it was noted that funds of credit balance clients were being utilized for settlement obligation of debit balance clients. In all 41 instances were checked and in 31 instances misutilization was observed ranging between Rs. 88,000 to Rs. 2.48 crores. Some of the instances have been tabulated and reproduced in paragraph No.21 of the impugned order. It is also recorded in paragraph No.22 that Noticee No.1 has brought in Rs. 1 crore into the system in October, 2020. Though a sum of Rs. 1 crore was infused in October, 2020 the G value was still negative for March, 2021 ranging between Rs. 66.35 Lakhs to Rs. 88,000. It is not denied by the appellant that the G value was negative as recorded in the tabular column in paragraph No.21 of the impugned order.
Second charge is providing exposure beyond T+2+5 days. This charge is also not denied but an explanation is sought to be urged that appellant was unable to detect the over exposure because of a bug in the computer system. It is also not denied that the over exposure was about Rs. 39.13 Lakhs as described in the table in paragraph No.46.
Third charge is non-issuance of contract notes. Appellant has furnished an excel sheet containing a column with regard to the status of delivery of the contract notes. As urged by the learned Advocate for the appellant that there is no specific provision to convey the proof of delivery of contract notes to the respondent. To a pointed query as to whether there exists any provision requiring the stock broker to furnish the proof of delivery of contract notes on a regular basis, on instruction it was submitted by Shri Kanade that no such provisions exists. Therefore, in our considered view, the third charge is untenable.
We may hasten to record that SEBI as a Regulator must treat all brokers with even hand. It is not disputed that in the case of Angel Broking where the misutilization of funds was to the extent of Rs. 32.97 crores, the penalty imposed is Rs. 10 Lakhs. In the instant case, as noted in paragraph No.25 of the impugned order, misutilization is in the range of Rs. 42.47 Lakhs to Rs. 2.08 crores (Rs.99 Lakhs).
Quantum of exposure beyond T+2+5 days(charge No.2) is also Rs. 39.13 Lakhs. Therefore, having regard to the undisputed facts, in our view, appellant’s case merits consideration only with regard to the doctrine of proportionality. Considering the quantum of penalty imposed in the case of Angel Broking Ltd., and also keeping in view that noticee No.1 is a ‘repeat offender’, ends of justice would be met by reducing the penalty to Rs. 15 Lakhs.
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2025 (2) TMI 749
Approval of the Resolution Plan - Section 30(2) of the IBC - HELD THAT:- The financial creditors having been given the right to proceed against the personal guarantor for the balance liability, it is always open for the financial creditor to proceed against the personal guarantor/ corporate guarantor that being the approved clause of Resolution Plan, Appellant cannot be heard to say anything against that. One more ground which has been taken in the appeal is that after the commencement of the insolvency proceeding against the Appellant against the personal guarantor w.e.f. 01.03.2024, Appellant has not been invited to participate in the meeting of the CoC.
In the present case, Appellant has not pleaded that in the CoC meeting which was held subsequent to 01.03.2024 there was no representation of the suspended director of the corporate debtor. The personal insolvency having been commenced on 01.03.2024 not allowing participation of the Appellant cannot be said in any manner affect the meeting of the CoC where it is not even pleaded that suspended management was not invited to participate. It is not the case of the Appellant that the Resolution Plan submitted by the SRA is not compliant of Section 30(2) of the IBC. The jurisdiction of the Adjudicating Authority and this Tribunal to interfere with the commercial wisdom of the CoC is too limited and the Adjudicating Authority and this Tribunal can interfere with approval of the Resolution Plan only when plan is not in compliance of Section 30(2).
Conclusion - There are no grounds to interfere with the Adjudicating Authority's approval of the Resolution Plan. Approval of a Resolution Plan does not discharge a personal guarantor's liabilities.
There are no ground to interfere with the impugned order. There is no merit in the appeal. The Appeal is dismissed.
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2025 (2) TMI 748
Seeking grant of discharge/bail - Money Laundering - proceeds of crime - Resolution Professional is a public servant under Prevention of Corruption Act, 1988 or not - demand of bribe - all the conditions as stipulated under Section 3 of the PML Act, 2002 read with Section 2 (1) (u) of the PML Act, 2002 are satisfied or not - HELD THAT:- The “proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad - In the explanation it has been referred that for removal of doubts, it is hereby clarified that "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. The explanation has been inserted in the statute book by way of Act 23 of 2019.
The reason for giving explanation under Section 2 (1) (u) is by way of clarification to the effect that whether as per the substantive provision of Section 2 (1) (u), the property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country but by way of explanation the proceeds of crime has been given broader implication by including property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence.
It is settled connotation of law that at the stage of framing of charge, the probable defence of the accused is not to be considered and the materials, which are relevant for consideration, are the allegations made in the First Information Report/complaint, the statement of the witnesses recorded in course of investigation, the documents on which the prosecution relies and the report of investigation submitted by the prosecuting agency. The probative value of the defence is to be tested at the stage of trial and not at the stage of framing of charge and at the stage of framing of charge minute scrutiny of the evidence is not to be made and even on a very strong suspicion charges can be framed.
The Hon'ble Apex Court in the case of Palwinder Singh Vs. Balvinder Singh & others [2008 (10) TMI 742 - SUPREME COURT] has been pleased to hold that charges can also be framed on the basis of strong suspicion. Marshaling and appreciation of the evidence is not in the domain of the court at that point of time.
Further it is pertinent to mention here that power to discharge an accused was designed to prevent harassment to an innocent person by the arduous trial or the ordeal of prosecution. How that intention is to be achieved is reasonably clear in the section itself. The power has been entrusted to the Sessions Judge who brings to bear his knowledge and experience in criminal trials. Besides, he has the assistance of counsel for the accused and Public Prosecutor. He is required to hear both sides before framing any charge against the accused or for discharging him.
Whether the evidence which has been collected in course of investigation and has been brought on record, as would be available in the impugned order prima facie case against the petitioner is made out or not? - HELD THAT:- Sub-section (v) of Section 2(c) of the Prevention of Corruption Act defines public servant. Further it is the nature of a duty, not an individual’s position, that discloses whether or not the person carrying it out is a public servant. Under the Prevention of Corruption Act the concept was to replace the notion of conventionally recognized public officials with those who carry out public duties - Further it is evident from the record that earlier the petitioner had preferred the Criminal Miscellaneous Petition being Cr.M.P. No. 1048 of 2021 for quashing of entire criminal proceeding arising out of the instant case, instituted against the petitioner including the F.I.R. being R.C.1(A)/2020-D, CBI, ACB, Dhanbad for the offence under Section 7 of Prevention of Corruption Act, 1988 by raising the similar ground which has been raised herein that petitioner is not a public servant within the meaning of Section 2(c) of the Prevention of Corruption Act, 1988 or under Section 21 of the IPC therefore charges under Prevention of Corruption Act cannot be alleged against him.
The learned Single Judge of this Court has categorically held that Resolution Professional is made during the resolution process before the Company Law Tribunal with its approval, he will be a public servant under Section 2(c)(v) of the P.C. Act - This Court is of the view that since the duties performed by RP are public in nature, they are public servants and Sec 2(c) of Prevention of Corruption Act is pretty clear that an individual who performs public duties are public servants for the purpose of the Act and hence, the legislature would have felt that there are no explicit provisions are required.
The ‘Resolution Professional’ will not come within the meaning of ‘Public Servant’ under Section 2 (c) of the PC Act is not tenable in the eyes of law.
Discharge application - HELD THAT:- The expression “money-laundering”, ordinarily, means the process or activity of placement, layering and finally integrating the tainted property in the formal economy of the country. However, Section 3 has a wider reach. The offence, as defined, captures every process and activity in dealing with the proceeds of crime, directly or indirectly, and not limited to the happening of the final act of integration of tainted property in the formal economy to constitute an act of money-laundering. This is amply clear from the original provision, which has been further clarified by insertion of Explanation vide Finance (No. 2) Act, 2019, Section 3, as amended.
The law regarding the approach to be adopted by the court while considering an application for discharge of the accused persons under Section 227 and approach while framing charges under Section 228 of the Code, is that while considering an application for discharge of the accused under Section 227 of the Code, the Court has to form a definite opinion, upon consideration of the record of the case and the documents submitted therewith, that there is not sufficient ground for proceeding against the accused. However, while framing charges, the Court is not required to form a definite opinion that the accused is guilty of committing an offence. The truth of the matter will come out when evidence is led during the trial. Once the facts and ingredients of the Section exist, the court would presume that there is ground to proceed against the accused and frame the charge accordingly and the Court would not doubt the case of the prosecution.
It appears that the complaint contains material evidences for prosecution, thus, the petitioner has to prove her innocence by undergoing the trial therefore, the aforesaid contention of the learned counsel for the petitioner that the alleged money which has been allegedly trapped from this petitioner was under deemed custody of CBI (ACB), and the petitioner was never put in possession of the alleged cash, which is said to have been recovered from the possession of the petitioner, therefore alleged offence is not made out, cannot be adjudicated herein in the light of aforesaid discussion and settled position of law - there is no reason to believe by this Court that the petitioner is not involved in the alleged offence.
This Court is of the view, that in such a grave nature of offence, which is available on the face of the material, applying the principle of discharge wherein the principle of having prima facie case is to be followed, the nature of allegation since is grave and as such, it is not a fit case to allow the application for discharge.
Conclusion - i) A Resolution Professional, due to the nature of their duties, qualifies as a "public servant" under the Prevention of Corruption Act, 1988. ii) The petitioner's actions, as alleged, constituted money laundering under Section 3 of the PMLA, given the acquisition and possession of proceeds of crime. iii) At the discharge stage, the court must assume the prosecution's evidence to be true and determine if a prima facie case exists, without delving into the probative value of the evidence.
The petitioner's application for discharge dismissed.
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2025 (2) TMI 747
Money Laundering - proceeds of crime - alleged transfer of public funds, by way of fraudulent transactions - Appellant Bank, as a victim of fraud, has a legitimate claim over the attached properties that were mortgaged to it by Vijay Kumar Kushwaha and others or not - HELD THAT:- The properties which have been attached by the Respondent Directorate in exercise of powers under section 5 of the PMLA, 2002 were, admittedly, already under mortgage with the appellant bank. The Appellant Bank has argued that it is the victim of a fraud and has the first charge over the property. As such, it is entitled to appropriate the properties in view of the charge created on the properties in its favour. The Appellant has inter alia placed reliance on the judgement titled Deputy Director, Directorate of Enforcement. Delhi v. Axis Bank [2019 (4) TMI 250 - DELHI HIGH COURT].
The underlying issue is squarely covered by the judgement of this Appellate Tribunal in the case of JM Financial Asset Reconstruction Company Ltd. [2024 (4) TMI 1228 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI] where it was held that 'the interference in the order of the attachment order, on a challenge by the financial institution, should not be persuaded by the sentiments and only on the ground that once there is a mortgage of the property, it should go to the financial institution.'
Conclusion - The attachment under PMLA is lawful and does not transfer title unless the property is confiscated. The rights of financial institutions are protected under Section 8(8), and they may pursue their claims in accordance with the provisions of PMLA.
Appeal dismissed.
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2025 (2) TMI 746
Money Laundering - proceeds of crime - challenge to Provisional Attachment Order - mala fide intention to misappropriate the fund - withdrawing and utilizing funds without knowing the actual source and without receiving confirmation from the Council - non-recording of satisfaction by the respective authorities - Properties purchased much before the alleged predicate offence - Amount in question had been utilized fully by the appellant in the month of April 2008 itself for the purposes of their business, more particularly, for payment of vehicle loan, overdraft facility, payment to labourers etc.
Non-recording of satisfaction by the respective authorities - violation of sections 5 and 8 of PMLA - HELD THAT:- The authority has merely repeated the language of the statute and has not arrived at any independent satisfaction to the fact that the offence of money laundering has been committed under section 3 and if the property was not attached immediately, the proceedings under the Act will be frustrated. The decisions of the Hon'ble Punjab and Haryana High Court in Seema Garg v. Deputy Director, Directorate of Enforcement [2020 (3) TMI 460 - PUNJAB & HARYANA HIGH COURT], and the judgment of the Hon'ble Delhi High Court in J. Sekar v. Union of India & Ors. [2018 (1) TMI 535 - DELHI HIGH COURT] are relied upon. It is also contended that though the judgment in the latter case has been stayed by the Hon‟ble Supreme Court, as per the settled legal position, its ratio would continue to apply.
There are no substance in the contention of the appellants that the condition u/s 5(1) of recording the reasons was not met. It is found that detailed reasons for the action initiated under the provision have been recorded by the respondents before initiating the action. As regards, the reasons under section 8, it is seen that the language of the said provision is different insofar as section 8 does not specifically lay down that the reasons to believe are to be recorded or that there should be any material in possession, other than the original complaint filed by the Directorate under section 5(5). Nor does the provision specifically necessitate recording of the reasons in writing.
There are no sufficient grounds to hold that the actions taken under sections 5 and 8 were not valid for want of recording of reasons (which were duly recorded) or on account of non-communication of the reasons by the relevant authorities.
Properties purchased much before the alleged predicate offence - HELD THAT:- The Canara Bank was impleaded as respondent in the present case vide an order dated 04.12.2018 based on the finding that the Canara Bank was Defendant No. 7 in the complaint and the subject properties had been mortgaged with the Bank. With its reply on 31.01.2019 the Bank had submitted copies of the title deeds of the properties standing in the name of the appellants herein which had been offered as securities to the Bank. The same were taken on record. In subsequent proceedings, it was submitted on behalf of the Bank that the loan account has since been closed and the Bank has no further interest in the case. Accordingly, there are no issues pending for decision before this Appellate Tribunal in the present case in so for as Respondent No. 2 (Canara Bank) is concerned - thus, the subject properties have been attached by the respondents in the present case as value of proceeds of crime.
Amount in question had been utilized fully by the appellant in the month of April 2008 itself for the purposes of their business, more particularly, for payment of vehicle loan, overdraft facility, payment to labourers etc. - HELD THAT:- The present position is that a charge sheet dated 21.01.2011 stands filed against the two appellants herein along with Shri Depolal Hojai and Shri Dabiruz Jaman, in the Court of Special Judge, CBI, Assam, Guwahati. Though the appellants have moved the Hon‟ble Gauhati High Court for quashing of the Special Case filed against them under Sections 3 and 4 of PMLA, 2002, the said petition of the appellants is still pending before the Hon‟ble High Court. Further, as clarified by both parties in the hearing held on 08.01.2025, prosecution complaint under the PMLA, 2002, also stands filed against the accused persons in this case. Proceedings in the prosecution case under the PMLA, 2002, have been stayed by the Ld. Special Judge following the stay granted by the Hon‟ble Guwahati High Court - at this stage, when the criminal trial of the appellants herein is still pending before a court of competent jurisdiction, even the balance of interests lies in favour of continued attachment of the subject properties. The same by itself does not disturb the ownership title of the appellants and does not deprive them of possession and enjoyment of the same.
Thus, so long as the source of the money is alleged to be „proceeds of crime‟ within the meaning of the Act, it can be attached by the respondents regardless of whether the appellants herein themselves stood charged of any scheduled offences or the prosecution complaint filed under the PMLA, 1999 or not. In the present case, as already noted, the appellants have been named in the prosecution case filed under the PMLA, 2002. However, even if they were not accused in the PMLA case, the properties could have been attached so long as there was evidence to indicate that alleged proceeds of crime traveled from one or more persons who are so accused.
Conclusion - i) The procedural requirements under sections 5 and 8 of the PMLA, 2002, were met, and the attachment of properties was valid. ii) The properties acquired before the alleged crime can be attached if they represent the value of the proceeds of crime, following the three-limb definition of "proceeds of crime." iii) The retrospective application of the PMLA, 2002, is constitutionally valid, as the attachment is a civil action.
Appeal dismissed.
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2025 (2) TMI 745
Exemption from service tax - services rendered to a Governmental authority - providing services of work contract services - providing services of laying of cable under or along side the road under the National Optical Fibre Undertaking (NOFN) Project - HELD THAT:- The Customs, Excise & Service Tax Appellate Tribunal, New Delhi took the view that the appellant is not entitled to seek exemption under the Notification which it sought to rely upon.
This is a fit case to remand the matter to the original authority only for the purpose of recalculation of the demand extending the benefit of cum-tax on the gross amount charged by the appellant.
Issue notice returnable after four weeks.
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2025 (2) TMI 744
Invocation of Extended period of limitation - no intent to evade payment of service tax - whether there is any error apparent on the face of the record to review the judgment? - it was held by High Court that 'there is no error apparent on the face of the record, and also there are no grounds to review the judgment, therefore the review petition stands disposed of.'
HELD THAT:- The penalties imposed by the Department in the peculiar facts and circumstances of these cases deserve to be waived and are waived, accordingly.
Appeal allowed.
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2025 (2) TMI 743
Rejection of refund claim of accumulated Cenvat Credit - rejection on the ground that since opening balance in ST-3 return for the period April’2015 to September’2015 was ‘Nil’, hence credit was never availed in returns and consequently there is no question of refund - HELD THAT:- Apparently, the refund claim was filed by the Appellant in terms of Rule 5 of the CENVAT Credit Rules, 2004 and sub-rule (1) of Rule 5 provides that refund of CENVAT credit shall be allowed subject to procedure, safeguards, conditions and limitations as may be specified by the Board by notification in the Official Gazette. A perusal of Rule 5 nowhere indicates that the same provides disclosure of balances of CENVAT credit in ST-3 return as the condition precedent for claiming refund of credit. There is nothing in Rule 5 to assume that if credit was validly availed but not disclosed in ST-3 return, the same would prohibit the refund of credit.
In exercise of powers conferred under Rule 5(1), Notification No.27/2012-CE(N.T.) dated 18.06.2012 has been issued specifying the safeguards, conditions and limitations and also the procedure for filing the refund claim - clause 2(g) has to be read as it is without any addition or subtraction of words and clause 2(g) cannot be interpreted on any presumption or assumption that balance has to be considered as the amount shown as closing balance in ST-3 return. The interpretation to the contrary placed in the impugned order is therefore clearly erroneous and is not flowing from a plain reading of clause 2(g) of the notification - clearly clause 2(g) of the notification has been incorrectly interpreted in the impugned order and rejection of refund claim on this ground is not sustainable.
Both the parties are ad-idem to the fact that no objection has been raised by the Revenue to the revised return for the subsequent period Oct’2015 to March’2106 showing the same opening balance as disclosed by the Appellant in corrigendum for the period April’2015 to Sep’2015 - It is not disputed before me that by the time the Appellant realised the mistake, the time period for revising the return got expired and therefore the Appellant cannot be expected to perform an impossible task. Thus, there are no reasonable reason for not extending the benefit of the corrigendum to the Appellant.
As regards finding in the adjudication order regarding taking credit within a period of one year, it is found that the said finding has been recorded only on the ground that the amount of credit was not disclosed by the Appellant in ST-3 return for the period April’2015 to Sep’2015. The adjudicating authority appears to have misguided himself by taking a view that credit is taken by declaring the amount of credit in ST-3 return. On the contrary, credit is always taken in account books and/or other statutory records. The disclosure of opening/closing balance of credit and utilised amount of credit in ST-3 may be a condition required to be complied by a taxpayer, but the same by itself is not a condition to claim credit.
There is absolutely no finding in the adjudication or appeal order that the invoices in question were issued prior to period of one year. no adverse finding has been recorded by the two authorities and therefore the submission to the contrary made by the Ld. A.R. deserves to be rejected.
Conclusion - i) Substantive benefits cannot be denied on technical grounds, such as non-disclosure in ST-3 returns. ii) Clause 2(g) of Notification No. 27/2012-C.E should be interpreted based on the actual balance, not the disclosed balance in ST-3 returns. iii) The Adjudicating Authority is directed to sanction the refund claim in accordance with the law.
Appeal allowed.
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