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Showing 61 to 80 of 1464 Records
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2021 (10) TMI 1405
Seeking grant of Anticipatory Bail - absconding and concealing himself to avoid service of warrant of arrest - rejection of bail on the ground that as the accused is absconding and even the proceedings under section 82/83 Cr.PC have been issued, the accused is not entitled to the anticipatory bail - HELD THAT:- It is required to be noted that after investigation a chargesheet has been filed against respondent no.2 – accused for the offences punishable under sections 406, 420 of IPC also. Thus it has been found that there is a prima facie case against the accused. It has come on record that the arrest warrant was issued by the learned Magistrate as far as back on 19.12.2018 and thereafter proceedings under sections 8283 of Cr.PC have been initiated pursuant to the order passed by the learned Chief Judicial Magistrate dated 10.01.2019. Only thereafter respondent No.2 moved an application before the learned Trial Court for anticipatory bail which came to be dismissed by the learned Additional Sessions Judge, Saran, by a reasoned order.
The specific allegations of cheating, etc., which came to be considered by learned Additional Sessions Judge has not at all been considered by the High Court. Even the High Court has just ignored the factum of initiation of proceedings under sections 8283 of Cr.PC by simply observing that “be that as it may”. The aforesaid relevant aspect on grant of anticipatory bail ought not to have been ignored by the High Court and ought to have been considered by the High Court very seriously and not casually.
The High court has committed an error in granting anticipatory bail to respondent No.2 – accused ignoring the proceedings under Section 8283 of Cr.PC. - Appeal allowed.
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2021 (10) TMI 1404
Murder - Misuse of power by political parties and the Police authorities, to bury the truth in respect of an unnatural death of one Yogishgouda goudar - seeking sanction to the Central Bureau of Investigation (CBI), under Section - 6 of Delhi Special Police Establishment Act, 1946, to conduct further investigation with respect to Crime - Investigating Officer of the 2nd respondent/CBI is empowered to proceed with the investigation, in view of the interim order passed by the Hon'ble Supreme Court staying the operation of the order passed by the learned Single Judge of this Court, or not.
HELD THAT:- On careful perusal of the material documents including the objections filed by the respondents, it clearly depicts that the deceased Yogishgouda Goudar was a member of the Zilla Panchayat from Bharatiya Janatha Party ('BJP') and the accused, especially Accused No. 15 was in the congress party and there was a verbal altercation between the deceased and accused in the meeting held on 24.4.2015, thereby the Accused No. 15 and other accused have developed vengeance. Accordingly, after entering into conspiracy, on 15.6.2016 the deceased was killed near the Gym within the jurisdiction of Dharwad Sub-Urban Police Station and the Police registered the case for the offence punishable under the provisions of Section 302 of IPC in Crime No. 135/2016 against unknown persons. During the course of examination of the prosecution witnesses in SC 50/2017, mother and brother of the deceased approached the then Chief Minister with a representation requesting to refer the matter to CBI and the said representation was not fructified into action - Admittedly Accused No. 15 and other accused persons belong to Congress party as alleged by the respondents in the Statement of objections as well as in the submissions made by the learned counsel for the parties and the deceased Yogishgouda Goudar belong to BJP as alleged in the grounds of the present writ petition and as contended by the learned counsel for the petitioners/accused persons, which clearly indicates that the political parties are trying to settle the scores against each other taking the advantage of the judicial process.
It is high time for the judiciary to protect the fundamental rights of the citizens of this country to ensure justice must not only be done but must be seen to be done and majesty of rule of law is to be upheld and it is to be ensured that guilty are punished in accordance with law notwithstanding their status and authority which they might have enjoyed. This Court being the protector of the civil liberties of the citizens, has not only power and jurisdiction but also an obligation to protect the fundamental rights guaranteed by part III in general and Article 21 of the Constitution in particular, zealously and vigilantly.
It is relevant to consider at this stage whether the State Government is justified in entrusting the matter to the CBI in pursuance of the impugned Government Order dated 6.9.2019, in view of the representation made by the kith and kin of the deceased. A careful perusal of the records which culminated into passing of the impugned Government Order dated 6.9.2019 clearly indicates that the State Government was aware of the fact that the complainant had earlier approached this Court requesting to hand over the case to the CBI and this Court has dismissed the said writ petition. After considering the entire material on record, the State Government was of the opinion that the matter has to be entrusted to the CBI for further investigation, which is an independent authority and there is no bar for the State Government to exercise its sovereign power to entrust the matter to the CBI under Section 6 of the Delhi Special Police Establishment Act, 1946 for further investigation in Crime 135/2016 for the offence under section 302 IPC, in order to meet the ends of justice, Accordingly, the Central Government also issued notification on 23.9.2019 extending the powers and jurisdiction of the members of the Delhi Special Police Establishment in whole State of Karnataka for further investigation of Crime No. 135/2016 under Section 302 IPC lodged in Dharwad Sub-Urban Police Station, Dharwad.
It is also not in dispute that the present writ petitions are filed challenging the validity of the Government Order dated 6.9.2019 entrusting the matter for further investigation to CBI and for quashing of FIR dated 24.9.2019. The learned Single Judge of this Court granted the interim order on 21.11.2019 staying all further proceedings pursuant to the Government Order dated 6.9.2019 and FIR dated 24.9.2019, till the next date of hearing and the said interim order was extended from time to time - the investigation was conducted and carried out by the CBI. After investigation, filed the supplementary charge sheet on 20.5.2020 adding Accused Nos. 7 to 14 in the array of accused and the cognisance was taken by the competent Court. Thereafter, another supplementary charge sheet was filed on 30.1.2021 adding Accused Nos. 15 to 17. Cognizance in respect of the said charge sheets were taken on 7.6.2021. Since Accused Nos. 19 and 20 are public servants, sanction to prosecute them has also been obtained by the CBI. In these writ petitions, none of the petitioners have challenged the charge sheets filed against the accused persons nor challenged the cognizance taken by the Court after applying its judicial mind.
The material on record depicts that the Public Prosecutor, who was in-charge of the crime was changed during trial. The material also revealed that during the course of further investigation by CBI, it has come to light that some of the Police officials including previous Investigating Officer are also found to be involved in the case, were found to have taken gratification to scuttle the investigation and they have been arrayed as Accused Nos. 19 and 20 - The material on record clearly depicts that there are overt acts against the accused persons in the supplementary charge sheets and the competent Court took cognizance of the additional charge sheets. Therefore, the contention of the learned counsel for the petitioners that the investigation is defective, mala fide and there is no permission obtained from the Court, cannot be accepted and same is devoid of any merit.
By careful perusal of the provisions of Section 173(8) of the Code of Criminal Procedure, it is clear that it does not prohibit the Police for conducting further investigation nor does it impinge on the power of the State Government to entrust the matter to CBI for further investigation under of Section - 6 of the Delhi Special Police Establishment Act, 1946.
There are materials against the accused persons including Accused No. 15 - Vinay Kulkarni in the supplementary charge sheet filed after examining 88 witnesses and considering more than 75 documents and now, the learned Judge has taken cognizance and the matter is committed to the Court of Sessions and the matter is posted for further trial. It is not open to contend that the State has no jurisdiction to entrust the matter to CBI and there cannot be further investigation and once the trial commenced, there is no further investigation under the provisions of Section 173(8) of the Code of Criminal Procedure, cannot be accepted.
In the present case, the allegations made in the first information report, prima facie constitute cognizable offence and make out a case against the accused persons. After investigation, the Investigating Officer of the 2nd respondent/CBI filed supplementary charge sheets and the competent Court took cognizance of the supplementary charge sheets and the matter is committed to the court of Sessions. The accused persons have not made out an express legal bar engrafted in any of the provisions of the Code to the institution and continuance of the proceedings in Crime No. 135/2016 - In the absence of any prejudice shown for continuation of the further investigation, it is not open for the petitioners/accused persons to seek for quashing the impugned Government Order dated 6.9.2019 and the FIR filed by the CBI, on the ground that the State Government has no power for entrusting the matter to CBI, that too after much water has flown under the bridge culminating into further investigation, recording the statements 88 witnesses, collection of more than 75 documents and filing of the supplementary charge sheets and taking cognizance by the competent Court etc. On that ground also the petitioners are not entitled for grant of any relief.
The Government is justified in entrusting the matter to the CBI, an independent agency to conduct a fair trial and investigation. When there is an improper investigation by state police and high Police officials are involved, in order to do complete justice, direction for investigation by an independent and specialized agency like CBI, is warranted.
The points raised in these writ petitions are answered as follows:
a) The 1st point raised in these writ petitions is answered in the negative holding that the petitioners - Accused Nos. 1, 5, 15, 16 and 21, in these writ petitions have not made out a case to quash the impugned Government Order bearing No. HD 48 PCB 2016, Bengaluru, dated 6.9.2019, by which sanction has been accorded to the Central Bureau of Investigation, under Section (6) of Delhi Special Police Establishment Act, 1946 for "further investigation" of Crime No. 135/2016 under Section 302 of IPC lodged in Dharwad Sub-Urban Police Station, Dharwad, and to quash the FIR dated 24.9.2019 made in Bangalore/CBI/ACB/BLR 2019 RC 17(S)/2019, by the Superintendent of Police, Central Bureau of Investigation, in the facts and circumstances of the present case.
b) The 2nd point is answered in the affirmative holding that the Investigating Officer of the 2nd respondent/CBI is empowered to proceed with the investigation, in view of the interim order passed by the Hon'ble Supreme Court dated 20.2.2020 in SLP (Criminal) No. 1348/2020 (from 20.2.2020 to 11.8.2021) staying the operation of the order passed by the learned Single Judge of this Court dated 21.11.2019 made in W.P. No. 51012/2019, in the peculiar facts and circumstances of the present case.
Petition dismissed.
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2021 (10) TMI 1403
Disallowance made of provision of stock obsolescence being charged to the profit and loss account - HELD THAT:- Since the issue already stands adjudicated as above in the preceding assessment year, A.Y. 2005-06 [2021 (7) TMI 1408 - ITAT CHANDIGARH] the decision rendered therein will apply to the issue in all the remaining years concerned wherein as held that claim of the assessee as fully justified vis a vis write off of vaccines since undoubtedly such vaccines were not capable of being used beyond expiry period and had no realizable value thereafter. The assessee has been able to establish documentarily the fact of write off of the said product and the Revenue has not proved anything to the contrary. For the reasons stated above in the context of write off of vaccines we see no reason to disallow the claim of the assessee. Moreover identical claim of the assessee, we have noted, was allowed by the ITAT in identical facts and circumstances in A.Y 2003-04. The claim of the assessee to write off of toothbrush also is therefore allowed
Accordingly, the issues of disallowance of provision of stock obsolescence stands decided in favour of the assessee.
Disallowance of 1/3rd of the expenditure on advertisement and promotion, holding that it results in promotion of brand name owned by the foreign company - HELD THAT:- Since the issue already stands adjudicated as above in the preceding assessment years, A.Y. 2005-06 & 2006-07 [2021 (7) TMI 1408 - ITAT CHANDIGARH]as held that it cannot simply be derived from the fact that assessee has incurred huge expenses on advertisement and sale promotion of products the brand of which belonged to another entity, considering the clear distinction in the end objective of the said expenses and the assessee consistently claiming that it had acquired the exclusive license to manufacture and sell the products in India and thus being the sole user of the brand name in India. These contentions of the assessee have remained uncontroverted. The entire benefit, in such circumstances, inured to the assessee alone as it alone was operating in the Indian market. Benefit if any to the AE was only incidental. And on account of such incidental benefit accruing to a third party it cannot be said that the expense was not wholly and exclusively for the benefit of the assessee. As long as the objective /purpose for incurring an expenditure is to benefit the assessee solely, the expenditure can be said to be incurred wholly and exclusively for the benefit of the assessee. Any incidental benefit accruing to a third party on account of the same, being beyond the control of the assessee, does not dilute the character of the expense.
No reason or basis therefore for holding a part of the expense as pertaining to brand building - Thus the decision rendered therein will apply to the issues in all the remaining years concerned. Accordingly, the issues of disallowance of 1/3rd of advertisement and promotion expenses stands decided in favour of the assessee.
Disallowance of purchase of vaccine of GlaxoSmithkline Biological S.A. u/s 40(a)i) - HELD THAT:- Since the issue already stands adjudicated as above in the preceding assessment years, A.Y. 2005-06 & 2006-07 [2021 (7) TMI 1408 - ITAT CHANDIGARH] the decision rendered therein will apply to the issues in all the remaining years concerned. Accordingly, the issues of Disallowance of purchase of vaccine of GlaxoSmithkline Biological S.A. u/s 40(a)i) of the Act stands allowed for statistical purposes.
Nature of expenditure - Disallowance of Product Development Expenses in relation to pre-launch of product being capital in nature - HELD THAT:- Since the issue already stands adjudicated as above in the preceding assessment year, A.Y. 2006-07, the decision rendered therein will apply to the issues in all the remaining years concerned. Accordingly, the issue of Disallowance of Product Development Expenses in relation to pre-launch of product, being capital in nature stands allowed for statistical purposes.
Disallowance of market research expenses incurred on market surveys, market research being capital in nature - HELD THAT:- The expenditure incurred by the assessee on market research is merely for maintaining its profit earning ability and does not enhance the same. It is an expenditure which is incurred by the industry segment to which the assessee belongs so as to remain relevant and competitive in the said segment. By no stretch of imagination, the impugned expenditure, therefore, can be said to be capital in nature. The benefit, though made may be derived for a few years but is definitely not on capital account but on the contrary is on a revenue account to maintain its profitability only and not by way of enhancing it.
The decision of the ITAT in the case of GlaxoSmithKline Consumer Healthcare Ltd. cited before us strengthens the case of the assessee wherein product development expenses which were found to have been incurred not on capital account but on revenue account, though giving enduring benefit in future, were held to be revenue in nature and hence allowable. Disallowance of market research expense is directed to be deleted and we hold that the assessee is entitled to claim the same as revenue in nature. The assessee has alternately pleaded for allowance of depreciation which is of no relevance since the entire claim of expenses has been allowed treating it as revenue in nature - Decided in favour of assessee.
Disallowance of post retirement medical benefit holding this expenditure as being in the nature of contingent liability - HELD THAT:- As gone through the orders of the ITAT in the case of GlaxoSmithKline Consumer Healthcare Ltd.(supra) and have noted that the issue of allowability of provision created for meeting medical expenses of the employees post retirement had been adjudicated in the said case wherein the ITAT had allowed the said provision on noting that it had been created on scientific basis by actuary in terms of and recognizing the scheme of employment and also the Accounting Standard-15 issued by the ICAI in this regard. Considering the same, the ITAT had held that the said provision could not be, therefore, said to be contingent in nature and was duly allowable, being recognized method of accounting. In the impugned case also, we find, that the assessee had claimed the provision, valued by an actuary, created in terms of the scheme of employment and the Accounting Standard-15 of the ICAI, which facts have not been controverted by the revenue before us. - Decided in favour of assessee.
Disallowance of claiming CENVAT recoverable holding that expenditure to be not in the nature of trading expenditure - assessee had written off service tax recoverable which was not allowed by the Revenue holding that it pertained to earlier years and could not also be treated as bad debt - HELD THAT:- CENVAT Credits represented cost of services availed, which was not claimed in the relevant years since they were eligible to be set off against output service tax to be paid by the assessee. On this claim of set off being judicially held to be not allowable, we agree with the assessee, the impugned CENVAT Credits partook the character of cost of services and did so in the year in which the order holding them as not eligible for setoff against output tax, was passed. Till then they merely represented asset by way of service tax credit available on account of the same. In view of the same, we find merit in the claim of the assessee that the write off of cenvat credit recoverable was allowable as revenue expenditure in the year written off and the disallowance so made by the revenue authorities, holding them to be non trading in nature, we hold is not in accordance with law and is directed to be deleted. Decided in favour of the assessee.
Disallowance of provision of Market Claims on account of the assessee having failed to establish the nature of liability - HELD THAT:- Assessee has contended that it has incurred liability on account of VAT claims to be made by dealers which is to be discharged in the subsequent years, but, we find, no documentary evidence in this regard has been filed to substantiate its claim. In the absence of the same, we fail to understand how the liability arose in the impugned year or could be said to be present obligation of the assessee even though it was required to be discharged in future years. The facts regarding the claim itself are not clear and therefore, we are not inclined to agree with the contention of the assessee. However, the alternate claim of the assessee of reducing the said provision reversed in subsequent years from its taxable income is justifiable and the revenue authorities are directed to allow the same in accordance with law. Decided against assessee.
Education cess falls within the scope of amounts not allowed as deduction u/s 40(a)(ii)
Adjustment made on account of interest on receivable allegedly recharacterizing as on secured loans - treatment of the delayed payment of receivables as international transactions as defined u/s 92B - Determination of arms’ length price adjustment be made to the income of the assessee in relation to the said transaction - HELD THAT:- As noted from the order of Kusum Healthcare Pvt. Ltd. [2015 (4) TMI 180 - ITAT DELHI] that it has been held that the delay in recovery of receivables would have an impact on the working capital of the assessee which also needs to be studied. In the decision of the ITAT in the case of Kusum Healthcare Pvt. Ltd relied upon by assessee before us, we have noted that the adjustment on account of outstanding receivables was deleted holding that the working capital adjustment would take into account the impact of delayed recovery of debtors as also any account payable mechanism adopted by the assessee to balance the delayed realization. It was, therefore, held that if the operating profit margin of the assessee are higher than the operating profit margin of comparable cases after working capital adjustment, then no adjustment on account of realization of trade receipts is required.
We restore the issue of treating the accounts receivables as international transactions and bench marking the same for the purpose of adjustment to be made to the income of the assessee, to the TPO to determine the same afresh in accordance with law.
Transfer Pricing Adjustment in relation to export of goods - assessee’s contention of no adjustment to be made on account of the end purpose of the transaction of sale of goods to its AE being philanthropic - HELD THAT:- No merit in the same for the reason that the commercial intention in the transaction between the assessee and its AE is an admitted fact, the assessee having charged a margin of 9% approximately on the cost incurred by it. When there is an admitted commercial intent in the transaction, it should ideally be, therefore, then at arms’ length only. The subsequent action of the AE of using the product/goods for philanthropic purpose cannot have any effect considering the admitted commercial transaction between the assessee and its AE.
Comparable selection - We consider it fit to restore the issue back to the TPO for reconsideration of the contention of the assessee regarding exclusion of certain comparables from the list of comparables selected by the TPO. The TPO is directed to pass a speaking order detailing the reasons for rejecting the above comparables as pointed out by the assessee and thereafter adjudicate the issue in accordance with law. Needless to add the assessee be granted due opportunity of hearing in this regard. This issue therefore, is partly allowed for statistical purposes.
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2021 (10) TMI 1402
Expansion of Scope of limited scrutiny to complete scrutiny - CIT(A) held that the limited scrutiny can be converted into full scrutiny with the approval of higher authorities and the assessee could not produce any evidences to show that approval from concerned authority was not taken - HELD THAT:- As perused the material on record and it is noticed that nowhere in the assessment record, AO has made any reference that any approval of the higher authority was taken for converting the case of the assessee from limited scrutiny to the detailed scrutiny.
We opined that the decision of CIT(A) is unjustified since the CIT(A) has neither called any remand report from the AO on the objection of the assessee regarding taking of approval from higher authority for converting limited scrutiny to the detailed scrutiny nor the CIT(A) has given detailed reason along with the points for determination of his decision as prescribed in section 250(6) - it would be appropriate to restore this case of the assessee to the file of the ld. CIT(A) for adjudicating afresh - Appeal of the assessee is allowed for statistical purposes.
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2021 (10) TMI 1401
Income taxable in India - Amounts received for leasing of alloys taxed as royalty - India US DTAA - assessee being a non-resident company incorporated in accordance with the corporate laws of United States of America and a tax resident of that County - HELD THAT:- Royalty for design of bushing is not paid by OCIPL to OCNLIC and payment to assessee is only towards lease rentals i.e. bushings made of alloys comprising Platinum and Rhodium. We note that the assessee has not provided any services to OCIPL and OCIIPL inconnection with intellectual property related to bushing and, since, the intellectual property right with regard to the bushings is with OCNLIC and assessee is merely providing alloys of Platinum and Rhodium, consideration for alloys cannot be treated as royalty.
The case is covered by the decision of Neyveli Lignite Corpn. Ltd. [1999 (10) TMI 40 - MADRAS HIGH COURT] wherein it has been held that payment to be constituted as royalty should be the payment made to a person who has exclusive right over a thing for allowing another to make use of that thing.
Similarly, the case is also covered by the decision of the Delhi Bench of the Tribunal in the case of Bharti Airtel Ltd. [2016 (3) TMI 680 - ITAT DELHI] wherein it has been held that in order to receive a royalty in respect of allowing the usage or right to use any property including an intellectual property, the owner thereof must have an exclusive right over such property.
Technology for manufacture of glass fibre including the use of bushing has been provided by OCNLIC a Dutch Company and royalty has been paid to that Dutch Company and, therefore, the amount of lease rental on alloy which are used to refurbish the bushing cannot be again treated and taxed as royalty in the hands of the assessee by invoking the India US DTAA and provisions of section 9(1)(vii) read with Explanation 5 of the Income-tax Act. Addition deleted - Decided in favour of assessee.
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2021 (10) TMI 1400
Revision u/s 263 - scope of limited scrutiny or expanded the scope of limited scrutiny - assessee’s case was selected under limited scrutiny category on Low income in comparison to high loan / advances / investments in shares appearing in balance-sheet and Minimum alternate tax (MAT) liability mismatch - HELD THAT:- Perusal of the notices issued u/s 142(1) as well as 143(2) make it clear that in course of assessment proceedings, AO did examine both the issues for which assessee’s case was selected for scrutiny - in response to query raised by the AO from time to time, the assessee had furnished all relevant and necessary details relating to loans and advances given and investment made in shares as appearing in balance sheet. AO has conducted necessary enquiry on the issues for which case was selected for scrutiny and after applying his mind to the materials on record, has completed the assessment.
As per CBDT instruction No.20/2015 dated 29-12-2015, in limited scrutiny cases the reasons / issues shall be verified as communicated to the assessee concerned and the questions u/s 142(1) of the Act shall remain confined only to a specific reasons / issues for which the case has been taken up for scrutiny - the scope of enquiry by the assessing officer shall be restricted to the limited scrutiny issue. The aforesaid position stands reiterated in CBDT Instrn. No.5 of 2016 dated 14-07-2016. Thus, the assessing officer being bound by instructions issued by CBDT from time to time, could not have gone beyond the scope and ambit of limited scrutiny for which the case was selected. AO was required to strictly confine himself to conduct necessary enquiry relating to issues for which limited scrutiny was required.
AO while completing the assessment has restricted himself and, rightly so, to the scope and ambit of the limited scrutiny. Thus, unless the scope of scrutiny is expanded by converting it to a complete scrutiny with the approval of the higher authority, the assessing officer could not have travelled beyond his mandate.
That being the case, the assessment order cannot be considered to be erroneous and prejudicial to the interest of revenue for not examining the loans taken by the assessee and their utilization as well as capitalization of interest. The material on record clearly establishes that the assessing officer adhering to the scope of limited scrutiny has enquired into and examined the specific issues. When the assessing officer is not empowered to do certain acts directly, the revisionary authority certainly cannot direct the assessing officer to do so indirectly by exercising power u/s 263 of the Act. While coming to such conclusion, we get support from the decision of M/s Su-Raj Diamond Dealers Pvt Ltd vs PCIT [2019 (12) TMI 26 - ITAT MUMBAI] - The assessment order cannot be considered to be erroneous and prejudicial to the interest of revenue. In view of the aforesaid, we set aside the impugned order of PCIT passed u/s 263 of the Act and restore the order of assessment. Appeal of assessee allowed.
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2021 (10) TMI 1399
Rectification of mistake u/s 254 - Incorrect and incomplete recording of the fact that the responsibility for installation and commissioning alongwith supply of equipment is with the appellant/applicant - HELD THAT:- The issue has been decided by this Tribunal [2020 (12) TMI 857 - ITAT DELHI] wherein the Tribunal has taken a view that the dominant purpose of the appellant/applicant is not to sell telecommunication equipment but to commission it after due customisation of hardware and software in accordance with the requirement of telecommunication service provider.
After carefully perusing the contents of the Miscellaneous Applications, we are of the considered view that this Tribunal has taken a view after due appreciation of facts. It may be an error of judgment but not an error as contemplated in section 254(2) of the Act. We, therefore, do not find any reason to hold that there is a mistake apparent from record in the view taken by this Tribunal. This issue is, accordingly, dismissed.
Incorrect adjudication of Ground of appeal No. 6 – Attribution of profits - Non-adjudication of Ground of Appeal No. 7 – Taxation of software as royalty - HELD THAT:- We have given thoughtful consideration to the orders of this Tribunal. We are of the considered view that for the limited purpose of adjudication of Ground No. 6 with its sub-grounds and Ground No. 7, needs to be re-adjudicated as there is a mistake apparent from record in not adjudicating the captioned grounds. Therefore, for this limited purpose, the captioned order of this Tribunal is recalled for the captioned A.Ys for the adjudication of Ground Nos. 6 and 7 in their true perspective.
Registry is directed to list the appeals for hearing of Ground Nos. 6 and 7 on 08th February, 2022 and inform the parties accordingly.
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2021 (10) TMI 1398
Smuggling - Betel Nuts of foreign origin - seizure of bags of betel nut under Section 110 of the Customs Act on the ground that the said betel nuts were brought to India through unauthorised route in violation of the Customs Act and are liable for confiscation under Section 111(b) and 111(d) of the said Act - HELD THAT:- The Division Bench of the Tribunal recorded the finding that the confiscated betel nut is non-notified goods and therefore, burden to prove the fact of smuggling lies on the department and same has not been discharged. In this regard, the department relied upon the certificate issued by the Arecanut Research and Development Foundation, Mangalore to show that the confiscated goods/betel nuts are of foreign origin. However, the Tribunal refused to consider this certificate on the ground that the said Institution is not accredited and hence the report was not relied on.
The Tribunal in this regard relied on the decision of the Patna High Court reported in M/S AYESHA EXPORTS VERSUS THE UNION OF INDIA AND ORS. [2019 (1) TMI 1633 - PATNA HIGH COURT] where it was held that This court is of the opinion that in absence of there being a standardized laboratory test for tracing the country of origin, established under some statute and such Labs have been accredited by the competent authority and the Labs could have the scientific method to come to a conclusion that a Betel Nut is of a particular country's origin, it would not be in the interest of justice to direct the petitioner to pay the custom's duty.
There are no error in the findings given by the Tribunal - appeal dismissed.
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2021 (10) TMI 1397
Classification of imported goods - API Supari - Chikni Supari - Unflavored Supari - Flavored Supari - Boiled Supari - Boiled & Cut Supari - classifiable under heading 0802 90 00 or under heading 2106 90 30? - HELD THAT:- The five goods, namely API supari, Chikni supari. unflavored supari, boiled supari and boiled & cut supari together. In these cases, one set of processes are found to be intended for cleaning; the second set for enhancing preservation; and third set for enhancing appearance or presentation, in addition to cutting. Addition of starch would be included under such process. These processes are clearly covered by the Chapter Note to Chapter 8 as well as the HSN, it is found that in the instant case, betel nuts atter being boiled are dried and this fact per se would not exclude the end-products from the scope of "dried nuts". Further, it is equally obvious to me that boiling or mere addition of certain additives for the limited purpose of enhancing preservation or appearance or ease of consumption per se does not result in obtaining a preparation of betel nut.
The processes to which raw betel nuts have been subjected to obtain API supari, Chikni supari, unflavored supari, boiled supari and boiled & cut supari are squarely in the nature of processes referred to in the Chapter Note 3 to Chapter 8 and HSN Note. Therefore, at the end of the said processes, the betel nuts retain the character of betel nut and do not qualify to be considered as "preparations" of betel nut, which is sine qua non for a good to be classifiable under Chapter 21.
Flavored supari - whether the addition of special flavoring agents would render the betel nuts into preparations of betel nuts, classifiable under Chapter 21? - HELD THAT:- The judgment of the Hon'ble Supreme Court of India in the case of CRANE BETEL NUT POWDER WORKS VERSUS COMMR. OF CUS. & C. EX., TIRUPATHI [2007 (3) TMI 6 - SUPREME COURT] has held that the process of cutting betel nuts into small pieces and addition of essential/non-essential oils, menthol, sweetening agent etc. did not result in a new and distinct product having a different character and use - Put simply, this decisions clearly imply that addition of flavoring agents do not change the character of the good, meaning in the present case betel nut would continue to remain betel nut and not become preparation of betel nut.
Thus, all the six goods placed before me for consideration, i.e., API supari, Chikni supari, boiled supari, boiled & cut supari, unflavored supari, and flavored supari, merit classification under Chapter 8 of the First Schedule to the Customs Tariff Act, and more precisely, under the heading 0802. This is so in view of the fact that the processes to which raw green fresh betel nuts have been subjected to obtain the said six goods are squarely in the nature of processes mentioned in Note 3 to Chapter 8, and have not materially changed the essential character of betel nuts - the said six goods are not classifiable under sub-heading 2106 9030, as contended by the applicant, since they have not attained the character of "preparations" of betel nut, which is sine qua non fora good to be so considered.
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2021 (10) TMI 1396
Assessment u/s 153A - necessity of valid approval u/s 153D - HELD THAT:- As in cases Navin Jain & Others [2021 (9) TMI 1068 - ITAT LUCKNOW] and SHRI NARESH KUMAR JAIN [2021 (9) TMI 1080 - ITAT LUCKNOW]has been followed, the Tribunal has held to the effect that granting of a mechanical approval u/s 153D of the Act vitiates the entire proceedings. It is on this basis that the issue was decided in favour of the assessee in both these cases, under facts and circumstances exactly similar to those present herein.
Respectfully following the view taken in the above appeals, we allow additional ground of appeal and quash the assessment order. As the assessment order has been quashed, the consequent order of learned CIT(A) is also quashed. Rest of the grounds do not survive for adjudication. Appeal of assessee allowed.
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2021 (10) TMI 1395
TP Adjustment - rate the interest-free loans granted by the assessee to its associated enterprise in Mauritius should be benchmarked as at an arm’s length - HELD THAT:- This issue is no longer res integra. The issue in the appeal is squarely covered, in favour of the assessee, by a coordinate bench decision in assessee’s own case for the assessment years 2009-10 and 2010-11 [2019 (6) TMI 1691 - ITAT MUMBAI]
It is indeed disappointing that even after taking note of the above fidnings of the coordinate bench, the authorioties below have justified a higher ALP on the basis of some new arguments. Given the findings of the coordinate bench-as extracted above, the reference to the fixed rate of interest and swap variable, with reference to the LIBOR, as has been done by the authorities below to go beyond LIBOR plus 300 bps, is irrelevant. There is no point in making these efforts to circumvent the conclusions arrived at by the coordinate bench, and justifying the same on the basis of a new set of arguments.
We direct the Assessing Officer to delete any arm’s length price adjustment beyond the difference, if any, between 4.01% interest charged by the assessee and LIBOR plus 300 bps. If suo motu adjustment by the assessee, i.e. adopting an interest rate of 4.01%, is below this rate, obviously no further ALP adjustment is called for. With these specific directions, the matter is restored to the file of the Assessing Officer for giving such relief as may be admissible in the terms indicated above. Appeals are allowed, in principle, and in the terms indicated above.
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2021 (10) TMI 1394
Review application - sheet anchor of his argument is based on the decision of the Hon'ble Supreme Court in M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [2021 (3) TMI 384 - SUPREME COURT] - HELD THAT:- Though the contentions advanced by the learned counsel appearing for the review applicant are highly persuasive, in as much as, the said decision of the Hon'ble Supreme Court is subsequent in point of time, it cannot be a ground for reviewing the order passed by this Court.
The review application is dismissed.
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2021 (10) TMI 1393
Refund claim of service tax paid due to wrong calculation of value - rejection also on the ground that the appellant’s payment of service tax is advance payment in terms of Rule 6(1A) of Service Tax Rules, 1994 which is required to be adjusted for the future payment - rejection also on the ground of unjust enrichment.
HELD THAT:- There is no charge in the show cause notice for denial of refund on this ground. Secondly, even if Rule 6(1A) is referred, it is found that appellant have clearly made the service tax payment in respect of an invoice of Bombardier Transportation Sweden. Therefore, it is an actual payment of service tax which falls under Rule 6(2) and does not fall under Rule 6(1A) as deposit. Therefore, on both the count the refund was wrongly rejected.
Principles of Unjust enrichment - HELD THAT:- On the perusal of the balance sheet, it is satisfied that the amount of refund is clearly shown under the head of Loan & Advances. Therefore, the appellant has established that the incidence of amount of refund has not been passed on.
On both the grounds the Commissioner (Appeals) has wrongly rejected the refund claim - the impugned order is set aside - Appeal allowed.
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2021 (10) TMI 1392
TP Adjustment - Comparable selection - HELD THAT:- Assessee is engaged in providing Business support services, thus companies functionally dissimilar with that of assessee need to be deselected.
Cedit of advance tax - We restore this issue to the file of AO to examine the claim of the assessee.
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2021 (10) TMI 1391
TP Adjustment - comparable selection - inclusion of E-clerx Services Ltd and TCS E-Serve Ltd. - HELD THAT:- This Tribunal has excluded E-clerx Services Ltd and TCS E-Serve Ltd. from the final set of comparables. Respectfully following the decision of this Tribunal in own case [2021 (2) TMI 575 - ITAT DELHI], we direct the Assessing Officer/TPO to exclude E-clerx Services Ltd and TCS E-Serve Ltd. from the final set of comparables. Ground with its sub grounds is, accordingly, allowed.
Addition on account of alleged interest on delay in collection of receivables from the AEs - invoices pertain to the year under consideration only and in most of the cases, the delay is NIL or less than 45 days. It is true that in some of the cases, the delay is more than the stipulated period of 45 days - HELD THAT:- We have been told that in the subsequent year, no addition has been made on this account and in earlier Assessment Year small additions were made which were not contested on the smallness of the amount. In light of the aforementioned observations of the Hon'ble High Court of Delhi KUSUM HEALTH CARE PVT. LTD. [2017 (4) TMI 1254 - DELHI HIGH COURT] we are of the considered view that the figure of receivables mentioned elsewhere do not reflect a pattern and, as held the assessee has already fettered the impact of receivable on the working capital which has been accepted by the DRP - we direct the Assessing Officer/TPO to delete the addition.
Assessee appeal allowed.
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2021 (10) TMI 1390
Handover of physical possession of the property - assignment of debt - Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - HELD THAT:- It is not in dispute that the respondent No.1 passed the order under Section 14 on 10.9.2018 whereas the petitioner has entered into the Deed of Assignment with the original lender on 5.11.2019.
On perusal of the provision of sub-section (4) of Section 5 of the SARFAESI Act, it is clear that on the date of acquisition of financial asset by the petitioner under subsection (1) of Section 5, if any suit, appeal or other proceeding of whatever nature relating to the said financial asset is pending by or against the bank or financial institution, then only the same shall continue in the name of the petitioner who has acquired the debt by way of assignment from the original lender.
Admittedly in the facts of the case, the order under Section 14 of SARFAESI Act is passed on 10.9.2018 prior to the date of Deed of Assignment on 5.11.2019. Therefore, it cannot be said that the proceedings under Section 14 of SARFAESI Act relating to the financial assets which are subject matter of the proceedings, were pending on the date of acquisition of financial assets under sub-section (1) of Section 5 of the SARFAESI Act - the respondent No.1 could not have directed the petitioner to approach the Debts Recovery Tribunal, but the petitioner is required to file a fresh application under Section 14 of the SARFAESI Act and the petitioner could also not have requested the respondent No.1 to substitute the name of the petitioner in the order passed under section 14 on 10.9.2018 prior to the date of Deed of Assignment.
The petitioner is directed to file fresh application under Section 14 of the SARFAESI Act to get the assistance of the respondent No.1 for taking over the possession of the assets of the borrower to realise the debts which it has been assigned by way of Deed of Assignment dated 5.11.2019 - the petition is disposed of.
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2021 (10) TMI 1389
Royalty receipt - Explanation 2 to section 9(i)(vi) of the Income-tax Act, 1961 and Article 12(3) of the India-USA Double Taxation Avoidance Agreement (“DTAA”) - appellant being a resident of USA is covered by the beneficial provisions of DTAA between India and USA and accordingly, could not be taxed under the provisions of the Act - HELD THAT:- After going through the decisions of the Hon'ble High Court of Delhi in the case of the appellant, we find that the quarrel has now been well settled in favour of the assessee and against the Revenue by the decision of the Hon'ble High Court of Delhi [2012 (9) TMI 1081 - DELHI HIGH COURT]
Similar view was taken in Assessment Year 2013-14 by this Tribunal [2019 (6) TMI 1689 - ITAT DELHI] wherein the Tribunal has placed strong reliance on the decision of the Hon'ble High Court of Delhi in the case of Asia Satellite Telecommunications Co. Ltd [2011 (1) TMI 47 - DELHI HIGH COURT] and New Sky Satellite [2016 (2) TMI 415 - DELHI HIGH COURT] and since the order of the Tribunal was based on these decisions of the Hon'ble Jurisdictional High Court of Delhi, the Hon'ble High Court dismissed the appeal of the Revenue holding that no question of law arises.
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2021 (10) TMI 1388
Provision for estimated loss of contracts - ascertained liability - AO observed that the said loss on an estimate, which is bound to vary due to variation in input costs - HELD THAT:- Accounting Standards are binding on the Company in so far as the preparation of books are concerned, but, are not binding for Income Tax purposes. Further, the Assessing Officer, by following the decision in the case of EDAC Engineering Limited [2013 (11) TMI 164 - ITAT CHENNAI], disallowed the same and the same was confirmed by the ld. CIT(A). The assessee, neither before the Assessing Officer nor before the ld. CIT(A) substantiated the provision made by it is an ascertained liability. Even before us, the assessee has not been able to explain as to what was the necessity for the assessee to make such a provision.
Assessee has simply stated that the provision made by the assessee is an ascertained liability. If at all, it is an ascertained liability, it is the onus on the assessee to establish that the liability is an ascertained liability. No material was placed on record before the Tribunal. We are of the opinion that the provision made by the assessee for a loss on contract is not an ascertained liability and it is a simple provision made by the assessee which is not allowable u/s 37.
So far as case law placed by the assessee are concerned, the decision in the case of Rotork Controls India Limited. [2009 (5) TMI 16 - SUPREME COURT] has no application to the facts of the present case. In the order passed by the Tribunal for the AY 2005-06 dated 03.08.2017, the issue dealt by the ITAT relates to provision of warranty and therefore, in our opinion, the issue under consideration need not be remitted back to the Assessing Officer. In view of the above, the ground raised by the assessee is dismissed.
Provision made in respect of various expenditures - HELD THAT:- The assessee has made a provision - However, no explanation was given before the Assessing Officer. Even before the ld. CIT(A), the assessee has not given any explanation the reason for making such provisions of expenses. Even before us, the assessee has not been able to explain the reason for making such provisions. We are of the opinion that the provision created by the assessee in respect of various expenses is an unascertained liability and not allowable as an expenditure for the assessment year under consideration. Therefore, we confirm the order passed by the ld. CIT(A).
So far as alternative submission is concerned, we direct the Assessing Officer to verify as to whether the assessee has reversed the provision and the same is offered for taxation for the assessment year 2012-13 and decide the alternative plea in accordance with law. This ground is partly allowed.
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2021 (10) TMI 1387
Amnesty scheme - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - seeking to issue discharge certificate under SVLDRS - declaration under FORM SVLDRS-1 was rejected on the ground of ineligibility, with the remarks that “Demand has neither been quantified nor has been communicated to the assessee” and “Submit SVLDRS-4 of main noticee” - it was held by Delhi High Court that In the present case, since amount could not be said to have been ‘quantified’, the petitioner was not eligible, and therefore, the reasoning given by the respondent in rejecting the application does not call for any interference.
HELD THAT:- No ground for interference is made out to exercise our jurisdiction under Article 136 of the Constitution of India.
The Special Leave Petition is, accordingly, dismissed.
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2021 (10) TMI 1386
Initiation of contempt proceedings against the alleged contemnors-Respondents - wilful disobeying the order passed by this Court - fixation of inter se seniority list published on 29th April 2004 - HELD THAT:- There can be no quarrel with the proposition that in a contempt jurisdiction, the court will not travel beyond the original judgment and direction; neither would it be permissible for the court to issue any supplementary or incidental directions, which are not to be found in the original judgment and order. The court is only concerned with the wilful or deliberate non-compliance of the directions issued in the original judgment and order.
This Court in unequivocal terms has held that if the order of dismissal of SLPs is supported by reasons, then also the doctrine of merger would not be attracted. Still the reasons stated by the court would attract applicability of Article 141 of the Constitution of India, if there is a law declared by this Court which obviously would be binding on all the courts and the tribunals in India and certainly, the parties thereto. It has been held that no court, tribunal or party would have the liberty of taking or canvassing any view contrary to the one expressed by this Court. Such an order would mean that it has declared the law and in that light, the case was considered not fit for grant of leave - It is thus clear that though it cannot be said that the second judgment of the Madras High Court has merged into the order of this Court dated 22nd January 2016, still the declaration of law as made in the said order, would be binding on all the courts and tribunals in the country and in any case, between the parties.
The Respondents are directed to revise and publish the seniority list of the selectees, who were selected in the selection process conducted in pursuance of the notification issued by TNPSC dated 10th September 1999, strictly on the basis of the merit determined by it in the selection process and not on the basis of the roster point. The same shall be done within a period of 12 weeks from the date of this order.
SLP disposed off.
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