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2024 (7) TMI 1640
TDS u/s 194C - disallowance u/s 40(a)(ia) - HELD THAT:- The disallowance by the assessing authority at first instance was not for the reason that the declarations were not produced as required under Section 194C(6). The disallowance was on a specious finding that the payments made by the appellant assessee were not to transport contractors but to their agents.
While we are at a loss to understand the basis on which the assessing authority arrived at such a finding, even if the assessing authority did entertain a doubt in that regard, he ought to have considered the declarations that were produced before him (the production of which was never denied by him) and given reasons as to why those declarations could not be accepted on their face value. In the absence of such a finding by the assessing authority, his finding that the payments were made only to agents had to be seen as wholly without any basis, and against the documents made available before him. To that extent, we find that the First Appellate Authority, who had perused the declarations and found them to be genuine arrived at a correct decision by deleting the disallwance made by the assessing authority under Section 40(a)(ia). Tribunal was not justified in remanding the matter to the assessing authority for a fresh adjudication on this issue.
Disallowance u/s 36(1)(va) - Tribunal placed reliance on the decision of this Court in Merchem Ltd [2015 (9) TMI 560 - KERALA HIGH COURT] as followed in Alliaz Corhill Information Services (P) Ltd [2023 (12) TMI 1419 - KERALA HIGH COURT] to find that in circumstances where the employees' contribution to EPF/ESI was not made over by the employer to the statutory authorities within the due date prescribed for making those payments under the respective statutes, the disallowance under Section 36(1)(va) would operate against the erring employer assessee. It accordingly proceeded to hold that in the instant case also the disallowance made by the assessing authority had to be restored. We see no reason to interfere with the finding of the Tribunal in relation to the disallowance under Section 36(1)(va) since, as already noticed, it is based on the judgments of this Court referred above, that settle the issue.
(1) Did not the Appellate Tribunal err in law in restoring the addition deleted by the CIT(A), mechanically without ascertaining whether payments were made within due date or not and without entering a finding as to whether Sec. 36(1)(va) is applicable or not on the facts and circumstances of the case? - Decided against assessee.
(2) Did not the Tribunal err in not having given weight to the Apex Courts ruling dismissing the SLP filed against the judgment whereby High Court of Rajasthan held that, employees contribution if paid within due date of filing of Return of Income u/s. 139(1) are allowable? - Decided against assessee.
(3) Did not the Tribunal err in not holding that the non obstante clause of Sec. 43B make it mandatory to allow deduction of actual payments made to Employees Contribution as per the provisions contained in that section? - Decided against assessee.
(4) Should not the Appellate Tribunal have held that Sub Section (6) of Section 194C is squarely applicable to the sums paid to Transport Contractors? - Decided against revenue.
(5) Did not the Appellate Tribunal err in law in not finding that Sec. 40(a)(ia) is not applicable to assessee's payments made to Transport Contractors? - Decided against revenue.
(6) Did not the Tribunal err in remanding the matter to AO, to verify the agreements entered between Contractors and assessee, when the statute prescribes furnishing of only PAN of Transport contractors for claiming deduction?- Decided against revenue.
(7) Did not the Tribunal err in not holding that Sec. 40(a)(ia) is applicable only to amounts outstanding as payable as on 31.03.2013? - Decided against revenue.
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2024 (7) TMI 1639
Application for granting bail on health issued - offences involving commercial quantity of narcotic drugs or psychotropic substances under Sections 21(c)/29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 ("NDPS Act") - twin conditions under Section 37(1)(b)(ii) of the NDPS Act - Anonymization as relates the identity of the respondent-accused as ‘Smt. X’ has been done, as she is Human Immunodeficiency Virus (HIV) positive - HELD THAT:- The subject FIR viz., FIR No. 06(02)23 under Section(s) 21(c)/29 of the NDPS Act, would reveal that the quantity of the contraband involved is 1.040 kgs of heroin. The impugned order granting bail to accused-Smt. X, dated 29.09.2023 would reveal, this time also, the bail was granted on the ground that she is suffering from HIV and conspicuously, without adverting to the mandate under Section 37(1)(b)(ii), NDPS Act, even after taking note of the fact that the rigour of Section 37, NDPS Act, calls for consideration in view of the involvement of commercial quantity of the contraband substance. When the accused is involved in offences under Section 21(c)/29 of NDPS Act, more than one occasion and when the quantity of the contraband substance viz., heroin is 1.040 Kgs, much above the commercial quantity, then the non-consideration of the provisions under Section 37, NDPS Act, has to be taken as a very serious lapse.
In cases of like nature, granting bail solely on the ground mentioned, relying on the decision in Bhawani Singh v. State of Rajasthan [2022 (4) TMI 1655 - SC ORDER] would not only go against the spirit of the said decision but also would give a wrong message to the society that being a patient of such a disease is a license to indulge in such serious offences with impunity. In the contextual situation it is to be noted that in Bhawani Singh’s case the offence(s) involved was not one under the NDPS Act. We have no hesitation to say that in the above circumstances it can only be held that the twin conditions under Section 37 of the NDPS Act, are not satisfied and on the sole reason that the accused is a HIV patient, cannot be a reason to enlarge her on bail. Since the impugned order was passed without adhering to the said provision and in view of the rigour thereunder the accused-Smt.X is not entitled to be released on bail, the impugned order invites interference.
Consequently, the impugned order is set aside. The accused-Smt. X shall surrender before the trial Court within a week from today and in case of her failure to do so, she shall be taken into custody in accordance with law. Upon such surrender/production of the accused before the trial Court, it shall cancel the bail bond of the accused and discharge the sureties.
In view of the indisputable fact that Smt. X is HIV positive she is entitled to the benefit under Section 34(2) of the Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome (Prevention and Control) Act, 2017,.
In view of the said provision the trial Court shall take appropriate steps to expedite the trial on priority basis and to dispose of the case as early as possible.
The Special Leave Petition is disposed of, as above.
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2024 (7) TMI 1638
Rejection of provisional registration granted u/s 12AB r/w section 12A(1)(ac)(vi) - CIT(E) came to the conclusion that the assessee has failed to file details of loan lenders, their address, PAN details, identity of such persons, date and mode of payment received, etc. - HELD THAT:- Observations of the CIT(E) are absurd, because of the fact that taking into consideration the locality in which the assessee trust is running the educational institution and parting education to the poor tribal people in Naxal affected, remote and backward areas of Gadchiroli District, the amount of money borrowed by the assessee trust being a temporary arrangement need to be taken into consideration.
The assessee trust, inspite of those difficulties, is running the educational institutions to help the poor tribal students and to bring those students at par with the main stream of the society.
Assessee trust is working for a noble cause for the upliftment of the tribal students, in our opinion, small borrowing made by the assessee that too as a temporary arrangement and since the loans were not availed from banks or financial institutions, neither violates any provision of the Maharashtra Public Trust Act, 1950, nor any provisions of the Income Tax Act, 1961.
Hence, we hold that the CIT(E) doubted the genuineness of activities and non–compliance of transactions of borrowings made by the assessee trust is without any basis. Consequently, we reverse the order passed by the CIT(E) and direct him to grant registration under section 12A(1)(ac(iv). The grounds of appeal raised by the assessee are allowed.
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2024 (7) TMI 1637
Denial of cross-examination process of witness - Importance of cross examination of the witnesses whose statements have been utilized by the AO in the assessment order
ACIT restricted cross examination process by denying the questions asked by the Petitioner during cross examination - As decided by HC [2023 (6) TMI 94 - JHARKHAND HIGH COURT] as gone through the directions in the remand order wherein he has allowed the appellant, cross examination of the witnesses whose statements have been utilized by the AO in the assessment order. There is no ambiguity in the said directions.
We hereby direct the petitioner to file petition for recall of the witnesses who have been cross-examined and discharged, to put them the question which have been initially discarded by the AO.
HELD THAT:- It is stated on behalf of the respondent that cross-examination has been completed and remand report has been submitted by the assessing officer to the first appellate court. The respondent is stated to have filed some objections before the appellate authority.
As petitioners prays for some time to obtain instructions in this regard.
Counter affidavit/reply, if any, will be filed within a period of three weeks from today.
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2024 (7) TMI 1636
Recovery of service tax with interest and penalty - existence of reasonable belief - demand of service tax on club membership charges was justified, given that the appellant had deposited the tax prior to the issuance of the show cause notice or not - Construction of Residential Complex Service or Work Contract Service - entitlement to claim abatement and cum-tax benefit in the valuation of taxable services - treatment of service tax liability on receipt basis versus due basis.
Existence of reasonable belief - HELD THAT:- Though the appellant have specifically stated that the search was not proper, in absence of any reasonable belief, we do not find any merits in the said submission. It is for the officer issuing the search warrant to make such reasonable belief on the basis of material placed before him and issue the search warrant. The reasonable belief entertained by the officer duly empower to issue such search warrant could not be questioned by the party searched, unless and until he is in position to show perversity in issuance of such search warrant. There are no perversity being alleged or established on the basis of cogent evidences.
Club or Maintenance Services - HELD THAT:- The appellants have discharged the entire amount for service tax duty (Rs.1,35,689/- along with interest of Rs. 20,865/-) much prior to issuance of show cause notice. That being so even if it is on the basis of being pointed out during the search operation the benefit of Section 73 (3) could not have been denied to the appellant. This amount should have been appropriated towards the demand made and matter closed by the revenue authorities. As this amount was to be settled in terms of the said provision, penalties imposed in respect of this demand needs to be set aside. Accordingly, penalty amount of Rs. 67,845/- imposed under Section 78 of the Finance Act is set aside.
Construction of Complex Services - cum tax benefit - HELD THAT:- The claim for appellant on cum tax benefit should have been allowed to them as has been discussed in the impugned order and it has been observed that the contracts entered by the party, provided that the amount of tax due are to be paid separately over and above the contract value. The said stipulation in the contract has been accepted by the Director of the appellant.
The demands in the present case have been made on the basis of the Receipts shown in the Book of Accounts which are made on the basis of the Guidance Note on accounting for real estate transaction GN (A) 33 (Revised 2012), Accounting Standard – 7 pertaining to Construction Contracts. As per the said guidance note revenue is recognized on percentage completion method and no accounting entry is passed on in respect of installments becoming due from the customers unless the same is received by the appellant - if the receipts taken are not as per as invoice issued/ installments paid but on the basis of the book of accounts then the cum tax benefit needs to be extended to the appellant. The fact whether the amount of service tax was collected over and above the contract value as per the terms of agreement needs to be verified from the invoices issued by the appellant and relevant records maintained by the appellant in respect of the installment received. Thus, this issue needs to be re-examined by the adjudicating authority on the basis of actual receipts project wise and not on the basis of fictional entries appearing in the books of accounts as per the above guidance note.
The fact of payment of service tax on the receipt basis also needs to be verified, it cannot be so that the service tax is demanded on due basis by taking the figures from the book of accounts and is in actual paid by the appellant on receipt basis - In such situation it would amount to double taxation on such transactions by following different method of computation which is against the Article 265 of Constitution. In case the amount in respect of all the projects has been paid of receipt basis then the benefit of such payments should be allowed while computing the tax demand. However, in such cases also appellants would be liable to pay interest on the total payment of service tax from the due date determined as per Point of Taxation Rules, 2011 till the date f payment of service tax.
The value of services specifically in respect of consideration of complex services needs to be re-determined for the F.Y.2011-12, 2012-13, 2013-14 after taking into consideration the observations made above, we set aside the impugned order. Remand the matter back to the Original Authority for re-computation of taxable values and service tax due if any by the appellant only in case of Construction of Residential Complex Services. Issues of penalty imposed will have to be re-decided in the remand proceedings.
Penalties imposed upon Director Shri Nikhil Agarwal under Section 78A is set aside.
Conclusion - The matter reamnded to the Original Authority for re-computation of taxable values and service tax demand in respect of Construction of Residential Complex Services, taking into account the correct classification, abatements, cum-tax benefit, and Point of Taxation Rules. Penalties were to be reconsidered accordingly. The penalties imposed on the director under Section 78A were set aside for lack of material establishing knowledge or involvement in evasion.
Appeal allowed by way of remand.
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2024 (7) TMI 1635
Benefits pertaining to the Special Additional Duty of Customs (SAD) and the Additional Duty of Customs - HELD THAT:- Bearing in mind the findings of fact which have come to be recorded in both the final order of the Tribunal as well as the order-in-original passed by the Commissioner, it is found that the appeal fails to raise any substantial question of law which would warrant consideration.
The appeal consequently fails and shall stand dismissed.
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2024 (7) TMI 1634
Assumption of jurisdiction u/s 153C as barred by limitation - identifying the relevant assessment year for the purpose of computing the ten year block - HELD THAT:- Admittedly in the case of assessee books of account were handed over to the AO of Assessee Company in AY 2022-23, hence ten years period would not cover the year under consideration. In case of Ojjus Medicare Pvt. Ltd. [2024 (4) TMI 268 - DELHI HIGH COURT] has specifically dealt with the cases where accounts were handed over in FY 2022- 23 and 2023-24, and held that so far AY 2010-11, 2011-12 and 2012-13 are concerned they fall beyond the "relevant assessment year". Same squarely applies to the case of assessee. In the light of the aforesaid, we allow the additional ground. Appeal of the assessee is allowed.
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2024 (7) TMI 1633
Stay of contempt proceedings by the Supreme Court affects the jurisdiction and powers of the High Court under Article 215 of the Constitution of India and the Contempt of Courts Act - constitutional relationship between the Supreme Court and the High Courts, particularly regarding the authority of the Supreme Court to issue directions affecting ongoing contempt proceedings before a High Court - HELD THAT:- The Hon'ble Supreme Court itself has clarified multiple times that the High Court is not subordinate to the Supreme Court. Therefore, the relation between High Court and the Supreme Court is not the same as is the High Court. In terms of Articles 132 to 134 of the Constitution of India, the Supreme Court is not even an ordinary Court of unconditional appeal, unless there is a specific statute providing for appeal from the orders of the High Court to the Supreme Court in specified matters. Therefore, there is no scope for sundry direction being issued by the Supreme Court to a High Court, regarding certain proceeding pending before a High Court.
Though under Article 136 of the Constitution of India, the Supreme Court can permit an appeal and entertain the same against an order of any Court, including an appeal directly from the order of a Court of Civil Judge (Junior Division), however, that is a provision for appeals through special leave from the Supreme Court. Even this Article use non-obstante clause qua only provision contained in Chapter IV of Part V of the Constitution of India and not qua the provisions contained in Chapter V of Part VI of the Constitution of India containing Article 215 of the Constitution of India. The power of the High Court under Article 215, is framed in exactly the same language as in Article 129 of the Constitution of India under which the Supreme Court has the power to punish for contempt qua its own orders. Therefore, Article 215 of the Constitution of India, per se, is not even subject to the Article 136 of the Constitution of India.
Power to initiate and to continue the proceedings for alleged contempt qua an order passed by the High Court lies exclusively with the High Court as per the Article 215 of the Constitution of India and Section 12 of the Contempt of Courts Act. The Supreme Court has no role in this aspect except in an appeal against the order of a Division Bench of High Court convicting a contemner. As per the provisions of the Act even an appeal does not lie before the Supreme Court against an order passed by Single Bench, rather it lies before the Division Bench of High Court, and even there, the powers of the appellate Court are well defined, in terms of stage of appeal and in terms of the nature of order which the appellate Court could pass. The Supreme Court may have power to permit special appeal by a 'party' to contempt proceedings before the High Court, against certain types of orders of Contempt Court under certain circumstances, however, in the present case neither there are any such circumstances, nor has any such special appeal been filed by the respondents against any such order of the Contempt Court.
A question can very legitimately asked, as to who is responsible for this plight of judicial officer manning the Superior Judiciary of State of Punjab and State of Haryana. Is it the High Court or is it the Supreme Court. A soul searching on this aspect by the High Court and the Supreme Court may surprise both of them equally. However, this, in humble opinion of this Court should sound a note of caution even for the Hon'ble Supreme Court to be more specific in causing legal consequences through its order. Otherwise, if this is the interpretation given by a High Court to such an order then one can very well imagine the damage which could ensue between private parties, on account of such an order, where the parties are intensely fighting with each other.
Keeping in view the sanctity of the judicial process, this Court feels to be absolutely bound by the order and hence, the case is adjourned sine die till the aforesaid SLP is decided by Hon'ble the Supreme Court. But this may not be always possible for a High Court to follow such a course in view of particular facts and circumstances embedded in a particular case or because of involvement of some statutory provisions. That would be an unfortunate situation, which would better be avoided.
Conclusion - The contempt proceedings before the High Court continue to have full legal force since the Supreme Court did not stay the underlying order, and the stay of contempt proceedings alone does not divest the High Court of its constitutional jurisdiction under Article 215. The Court, however, adjourned the matter sine die out of respect for the Supreme Court's order but cautioned against the broad and potentially damaging implications of such orders.
Appeal disposed off.
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2024 (7) TMI 1632
Dismissal of the appeal of the assessee by the CIT(A) in limine for want of payment of advance tax u/s 249(4)(2) - HELD THAT:- The issue of payment of any advance tax as per the provisions of section 249(4)(b) does not arise as held by this tribunal in case of Deepak Khandelwal [2024 (7) TMI 1629 - ITAT INDORE] for filing the appeal before the CIT(A) against the reassessment order passed by the AO the question for payment of advance tax by the assessee as per clause (b) of sub-section (4) of section 249 of the Act does not arise.
Accordingly this issue is now covered by the earlier decisions of this tribunal and consequently the impugned order of the CIT(A) is set aside being contrary to the provisions of law. Since the assessment order was also passed ex-parte due to non-appearance of the assessee therefore, in the facts and circumstances of the case when the CIT(A) has not adjudicated appeal of the assessee on merits the matter is remanded to the record of the jurisdictional AO for fresh adjudication after considering relevant details/evidences as well as explanation to be filed by the assessee. Needless to say the assessee be given an appropriate opportunity of hearing before passing fresh order.
DR has fairly submitted that assessment order is passed ex-pare as best judgment assessment therefore, the matter may be remanded to the record of the AO for fresh adjudication. Accordingly the matter is remanded to the record of the AO for fresh adjudication after giving an appropriate opportunity of hearing to the assessee.
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2024 (7) TMI 1631
Dismissal of appeal as infructuous and non-maintainable by CIT(A) - as alleged assessee had failed to fulfil the mandatory conditions specified u/s 249(4) for entertainment of appeal - assessee to have not filed any return of income and to have not complied with the conditions specified u/s 249(4)(b) of the Act of having paid advance tax on his income - HELD THAT:- As per the provisions of said section 249(4)(b), two conditions need to be satisfied for invoking the same. First, no return of income is filed by the assessee and second, advance tax is not paid by the assessee.
As far as the contention of the assessee that the first condition was not satisfied since the assessee had filed return of income, we are not in agreement with the same. The findings of the AO to which our attention was drawn to the effect that the assessee had filed return of income in response to notice u/s 148 of the Act is an incomplete finding to which the assessee has drawn our attention.
AO goes on to note this return of income filed by the assessee in response to notice u/s 148 of the Act, had not been e-verified – which means that the necessary validation of the return filed by the assessee had not been done by it; and for all purposes, therefore, no return of income had been filed by the assessee. Therefore, this contention of the assessee that it had filed its return of income and therefore Section 249(4)(b) of the Act could not be invoked is dismissed.
Whether CIT(A) had incorrectly interpreted the provisions of law holding that the assessed tax liability was to be treated as an advance tax liability? - Admittedly, the ld. CIT(A) has referred to the provisions of Section 234B of the Act for holding that the assessed tax liability is the advance tax liability of the assessee. We have gone through the provisions of the said section reproduced above in our order, and we find that the said section nowhere states so. It only states that where the advance tax paid by the assessee falls short of the assessed tax by 90%, the assessee has to pay interest for the entire period of the shortfall at the specified rate. The Section itself identifies a difference between the advance tax liability and the assessed tax liability. Therefore, reliance placed by the ld. CIT(A) on the provisions of Section 234B(1) for holding that the assessed tax liability was the advance tax liability of the assessee is incorrect
Assessee has, on the contrary, drawn our attention to the provisions of Section 209 of the Act which provided for computation of advance tax liability as reproduced above in the earlier part of our order. Since we have noted that the ld. CIT(A) has, on an incorrect interpretation of law, held the assessee to have not discharged his advance tax liability, for the purposes of dismissing the appeal as infructuous in terms of provisions of Section 249(4)(b) of the Act, we consider it fit to restore the issue back to the ld. CIT(A) for reconsideration of both the aspect of admitting the appeal in terms of the provisions of Section 249(4) of the Act and, if considered fit for admission,to deal with the merits of the grounds raised by the assessee.
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2024 (7) TMI 1630
Adjustment of refund due - as noted that as per established procedure, upon payment of 20% of the demand, the remaining 80% is stayed - contention of the petitioner that the entirety of refund was adjusted and in light of their application for stay, if the demand for 2015-16 and 2016-17 is stayed, the question of adjustment of entirety of refund would not arise.
HELD THAT:- It is not in dispute that the application for stay was filed on 11.01.2024 as regards assessment year 2015-16 and on the same date i.e., on 11.01.2024 application for stay was filed as regards the assessment year 2016-17. As on the date of filing of the application for stay, the petitioner had the benefit of order of refund for the year 2023-24. If as on the date of filing the application for stay dated 11.01.2024, if the petitioner had made payment of 20% remaining 80% would have been stayed.
In light of adjustment at Annexure-P, only manner of moulding the relief would be adjustment of refund to an extent of 20% of the demand for the year 2015-16 and 2016-17. Once adjusted, the remaining amount of 80% of refund adjusted towards demand requires to be reversed by crediting the same to the petitioner. Accordingly, the third respondent is directed to refund the amount of 80% of the demand for the assessment year 2015-16 and 2016-17 as already been adjusted. Such refund to be made within a period of eight weeks from today.
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2024 (7) TMI 1629
Dismissal of appeal of the assessee in limine as not admissible for want of payment of advance tax as per provisions of section 249(4)(b) - assessee did not file any return of income u/s 139 of the Act as the income of the assessee was below the taxable limit - HELD THAT:- AO has stated the reasons for reopening of the assessment as CIB information received regarding the transactions of Multi Commodity Exchange (MCX).
AO noted that the assessee has not filed any return of income for the year under consideration. Even in response to notice u/s 148 the assessee did not file any return of income. The AO accordingly proceeded to frame the assessment as best judgment assessment u/s 144 of the Act.
Undisputedly, the assessee has not filed any return of income and therefore, there is no question of any self-assessment tax or advance tax payable by the assessee. Further the AO has estimated the income of the assessee at Rs.3 lac and addition of Rs.6 lac has been made as unexplained investment.
Therefore, it is only a case of estimation of income and not a case of undisclosed income or income assessable to tax as escaped assessment revealed by some material. Carrying out the transactions in Multi Commodity Exchange (MCX) does not ipso facto lead to the conclusion that the assessee has earned income as it may be a case of loss or no income. This tribunal has taken a consistent view on this point that the income assessed by the AO in the reassessment proceedings does not attract provisions of section 249(4)(b) of the Act.
This Tribunal has taken a consistent view and held that for filing the appeal before the CIT(A) against the reassessment order passed by the AO the question for payment of advance tax by the assessee as per clause (b) of sub-section (4) of section 249 of the Act does not arise.
Accordingly this issue is now covered by the earlier decisions of this tribunal and consequently the impugned order of the CIT(A) is set aside being contrary to the provisions of law. Since the assessment order was also passed ex-parte due to non-appearance of the assessee therefore, in the facts and circumstances of the case when the CIT(A) has not adjudicated appeal of the assessee on merits the matter is remanded to the record of the jurisdictional AO for fresh adjudication after considering relevant details/evidences as well as explanation to be filed by the assessee.
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2024 (7) TMI 1628
Disallowing the claim of the assessee u/s.35D - HELD THAT:- The issue as travelled up to Tribunal and the Tribunal had allowed the assessee's claim of 1/5th expenditure in the A.Y. 2009-10, for 5 years in their order for assessment year 2009-10.
Similarly, the same amount which has been spent during the A.Y. 2010-11, had been allowed to claim for 5 assessment years u/s. 35D of the Act from the assessment years 2010-11 to 2014-15 in their order [2016 (10) TMI 807 - ITAT CHENNAI] for assessment year 2010-11. Therefore, it is noted that the lower authorities have erred in understanding the facts properly and passed the orders erroneously by disallowing the deduction of 1/5th expenditure of Rs. 75.00 lakhs for the assessment year 2014-15, which the assessee is eligible as per the orders of the Tribunal (Supra) and hence, we are of the considered view that the lower authorities erred in disallowing the deduction U/s.35D of the Act. Therefore, we delete the impugned disallowance u/s.35D of the Act and allow the ground of the appeal of the assessee.
Disallowing the withholding tax and Relief U/s.90 - assessee has earned interest income from Singapore and paid to the Singapore Tax authorities - HELD THAT:- The same issue is squarely covered in favour of the assessee in their own case in the co- ordinate bench of this Tribunal [2016 (10) TMI 807 - ITAT CHENNAI] for the A.Ys.2010-11, 2011-12,[2017 (6) TMI 1345 - ITAT CHENNAI] 2012-13, [2021 (4) TMI 768 - ITAT CHENNAI] 2015-16 & [2022 (4) TMI 1582 - ITAT CHENNAI] 2016-17 wherein the Tribunal has held that once the interest income subject to tax in any manner in the hands of the assessee, the corresponding credit to be given. Therefore, in view of the fact that the assessee has filed the confirmation of payment of withholding tax from the Singapore Tax authorities and respectfully following the decision of the co-ordinate bench of the Tribunal, this issue is remitted to the file of the AO and direct the AO to verify the confirmation of payment filed by the assessee and allow the relief u/s.90 in accordance with law. Hence, this ground of the appeal is allowed for statistical purposes.
MAT credit not considered - lower authorities have not given any tax credit u/s. 115JB of the Act, to the assessee stating that the assessee has not claimed as per the return of income filed for the assessment year 2014-15 on 28.11.2014 and in the Schedule right from AY 2006-07 to 2014-15, no MAT credit was claimed for any of the years - HELD THAT:- Assessee is eligible for the credit of legitimate taxes paid and hence, we deem it proper to remand this issue to the file of the AO by allowing this ground of the assessee’s appeal and direct the AO to give the MAT Credit in accordance with law. Assessee to be diligent in providing the relevant details and documents before the AO in support of their claim of MAT credit. Therefore, this ground of the assessee’s appeal is allowed for statistical purposes.
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2024 (7) TMI 1627
Application for revocation of cancellation of GST registration - HELD THAT:- The issue is squarely covered by the decision rendered by this Court in Tvl. Suguna Cutpiece Center Vs. Appellate Deputy Commissioner (ST) (GST) and others, [2022 (2) TMI 933 - MADRAS HIGH COURT].
Thus, this Writ Petition is allowed, subject to the petitioner complying with the conditions imposed in Tvl. Suguna Cutpiece Center’s case (cited supra). No costs. Consequently, connected miscellaneous petition is closed.
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2024 (7) TMI 1626
Ascertain income of the bonded warehouses which has been added on mercantile basis and is not subjected to tax on cash basis - Taxation of income actually 'accrued' under mercantile system of accounting - HELD THAT:- As decided in ITA. No. 3942/Del/2011 for assessment year 2006-07 [2021 (6) TMI 68 - ITAT DELHI] in the case, the assessee has credited the income from the bonded warehouse on realisation basis i.e. cash basis, but the assessee is following Mercantile system of the accounting and therefore income has to be credited in the profit and loss account as and when it is accrued to the assessee.
AO has added the income from warehousing charges which is accrued during the year under consideration. Ld' Counsel has agreed in principle that warehousing charges is liable to be assessed on accrual basis in view of Mercantile system followed by the assessee, but he emphasized that income which has been tax on accrual basis in the year under consideration, should not subjected to tax twice i.e once on Mercantile basis and second on cash basis. We concur with the above contention of assessee.
Accordingly, the bonded warehouse income added by the AO on accrual basis, is hereby confirmed, however, the AO is directed to ascertain that, bonded warehouse income which has been added on mercantile basis in the year under consideration, is not again subjected to tax on cash basis in subsequent years. No justification to entertain this appeal.
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2024 (7) TMI 1625
Classification of imported goods - front cover, middle cover and back cover and few other parts of the mobile phones - to be classified under CTH 85177090 or under CTH 39209999? - front lenses and camera lenses imported by the appellants classifiable under CTH 90021100/85177090 (as claimed by the appellants) or under CTH 39209999? - it was held by CESTAT that the classification of none of the goods in any of the appeals under CTH 39209999 as held by the Commissioner in the impugned orders can be sustained.
HELD THAT:- There are no error in the view taken by the Customs, Excise and Service Tax Appellate Tribunal - appeal dismissed.
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2024 (7) TMI 1624
Undervaluation of the export goods - challenge to Expert Panel Opinion inasmuch as it does not reveal the source for the market value - applicability of provisions of Section 14 of the Customs Act, 1962, read with the Customs Valuation (Determination of Value of Export Goods) Rules, 2007, to the valuation of exported rough diamonds, which are not dutiable goods under the Customs Tariff Act, 1975 - HELD THAT:- The original order dated 14.11.2022 had referred to the comments/reports submitted by the Expert Panel Members, in order to reject the declared value of export and for re-determination of the same. Both the authorities below have not furnished any reference with regard to the competency of the Expert Panel for submission of any report. Further, the said reports were also not supplied to the appellants and the reference viz., number and date of such reports were also not disclosed in the respective orders. Furthermore, we also find that there is no coherence between the Export Opinion obtained by the department inasmuch as the Single Expert Member had confirmed that the value stated by the appellant is approximately 40 to 45% less than the market rates; whereas, the Three Expert Panel Members had confirmed that the declared value on the average are 20% less than the market value as on 17.02.2021.
The said fact is evident from the respective reports inasmuch as the phrases “approximately” and “average” have been used for issuance of the certificates. In other words, the Expert Panel chosen by the department were not sure about the manner of determination of the actual value, for which there must have been laid down norms, by the established body for the diamond trade, which can be universally acceptable. Therefore, the Expert Panel reports relied upon by the department cannot be hold good for rejection of the declared value of export.
The department had not brought on record any evidence to show that the appellants had received towards the export proceeds any amount over and above the price indicated in their commercial invoice. On the contrary, we find that the appellant had raised the invoice No.29/2020-21 dated 15.02.2021 on the overseas buyer towards sale of the impugned goods, total amounting to Yuan 2,636,904/-, which was duly received through the approved banking channel by them. On perusal of Bank Realization Advices issued by Kotak Mahindra Bank, in remitting the exact invoice amount to the appellant. Thus, it cannot be said that the appellant had undervalued the goods exported by them.
Conclusion - i) Valuation provisions under the Customs Act apply only for levy and collection of customs duty and not otherwise. ii) xport of goods not subject to customs duty cannot be subjected to valuation reassessment, confiscation, or penalties under provisions linked to undervaluation for duty purposes. iii) Expert valuation reports must be transparent, based on established norms, and shared with the affected parties to be legally valid.
There are no merits in the impugned order, insofar as it has upheld the adjudication order and rejected the appeal filed by the appellants. Therefore, the impugned order is set aside and the appeals are allowed in favour of the appellants.
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2024 (7) TMI 1623
TP adjustments under the head of intra-group services - HELD THAT:- Issue would no longer survive in light of our order dated 13 August 2019 and which had recorded the Transfer Pricing Officer having undertaken the requisite Arm’s Length Price exercise.
Circuit accrual - year of assessment - The lower authorities allow the entire claim of expenditure in the next year when such reversals are made. Thus, we are of the view that this practice of disallowing the claim of circuit accrual in the year of creation and allowing it in the next year is nothing but a timing difference. The fact that the expenses are allowed in the subsequent year also proves that the lower authorities have not disputed the incurrence of such expenses. Hence, in accordance with the mercantile provisions it should be allowed in the year of creation itself. The assessee has also drawn reference to the principles laid down in the case of M/s Rotork Controls India (P) Ltd [2009 (5) TMI 16 - SUPREME COURT] and M/s Bharat Earth Movers [2000 (8) TMI 4 - SUPREME COURT]. According to us the provision for circuit accruals is made in compliance of accounting standards issued by the Institute of Chartered Accountants of India and also on a proper scientific basis backed by documentation. Therefore, we hold that the circuit accruals are created on scientific basis and thus needs to be allowed in the year of creation on accrual basis. No substantial question of law.
We consequently admit these appeals on the following question:
“1. Whether on the facts and circumstance of the case, the Tribunal was correct in law in deleting the disallowance of interest incurred on ECBs and short-term loans respectively, availed during the year, holding the same to be for 'expansion' and not 'extension' of existing business in terms of proviso to section 36(1)(iii) of the Act?”
Let the matters be called again on 18.10.2024.
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2024 (7) TMI 1622
Seeking to direct the first respondent to issue ‘No Objection Certificate’ for the release of the petitioner’s Container - failure to notify the Bill of Lading to clear the imported Cargo - HELD THAT:- This writ petition is disposed off at the time of admission after hearing the Learned Counsel for the petitioner and the Learned Senior Standing Counsel for the respondents and after dispensing with the counter by directing the first respondent to consider the petitioner’s representation dated 12-4-2024 for removal of container without the Cargo from the custody of the second respondent.
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2024 (7) TMI 1621
Levy of surcharge @ 30% on maximum marginal rate of tax @ 30% -HELD THAT:- As the income of the assessee did not exceed the monetary limit of Rs. 50 lakhs and therefore levy of surcharge is not warranted as per First schedule introduced vide Finance Act, 2021, hence the surcharge levied by the CPC and affirmed by the Ld. Commissioner is deleted. Decided in favour of assessee.
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