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Showing 41 to 60 of 1450 Records
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2021 (7) TMI 1412 - ITAT MUMBAI
Addition u/s 68 - Cash deposits in bank account unexplained - non rejection of books of accounts - HELD THAT:- As not disputed that the cash deposits made out of book balance should be considered as explained when the books of accounts of the assessee were not rejected.
As notice that neither the AO nor CIT(A) has examined the cash book of the assessee. We notice that both the authorities have rejected the claim of the assessee that the cash deposits have been made out of earlier cash withdrawals made from the bank account on the reasoning that the earlier cash withdrawal has not been proved.
Cash withdrawal could have very much been verified from the bank account of the assessee as well as from the entries made in the books of account.
In the instant case, the books of account maintained by the assessee have not been rejected and it is the submission of the assessee that the cash withdrawals have been recorded in the books of account. In that case, if the cash has been deposited into the bank account from the cash balance available in the books of account, then it should be held that the cash deposits have been explained. However, as noticed earlier, the tax authorities have not examined books of account also.
This issue needs to be set aside to the file of the AO for the limited purpose of examining as to whether the impugned cash deposits have been made out of cash balance available in the books of account. Accordingly, I set aside the order passed by Learned CIT(A) on this issue and restore the same to the file of the AO for the limited purpose of examining as to whether the impugned cash deposits have been made out of cash balance available in the books of account. Decided in favour of assessee for statistical purposes
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2021 (7) TMI 1411 - KARNATAKA HIGH COURT
Disallowance made under the head investment portfolio - RBI guidelines were applicable to the assessee for the purposes of the I.T.Act or not ? - income recognition - Tribunal held that the assessee-Bank cannot be considered as a Company - Section 115JB applicability to assessee Bank for MAT purposes - HELD THAT:- These substantial questions of law involved in this appeal have already been answered in favour of the assessee by this Court vide judgment of COMMISSIONER OF INCOME-TAX, BANGALORE Vs. ING VYSYA BANK LTD [2020 (1) TMI 1116 - KARNATAKA HIGH COURT]
Disallowance u/s 14A r.w.r. 8D(2) (ii) and (iii) - expenditure incurred on earning exempt income - HELD THAT:- As question of law involved in this appeal also has already been answered in favour of the assessee by case of M/S QUEST GLOBAL ENGINEERING SERVICES PVT. LTD.[2021 (3) TMI 434 - KARNATAKA HIGH COURT]
TDS u/s 194H - disallowance u/s 40(a) (ia) on ATM charges of other Banks - HELD THAT:- As substantial question of law is answered by Judgment M/S. CORPORATION BANK [2020 (12) TMI 529 - KARNATAKA HIGH COURT] in favour of the assessee and against the revenue.
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2021 (7) TMI 1410 - ITAT, MUMBAI
Rectification of mistake - Addition on account of depreciation on fixed assets u/s. 40a(ia) read with section 37 in respect of capitalization of professional fees capitalized of certain expenses FCCB Premium and FCCB Issue Expenses - HELD THAT:- The year before us is A.Y. 2007-08 wherein the depreciation on fixed assets is required to be allowed only as consequential effect of depreciation already allowed by the ld. AO in the A.Y. 2005-06.
We find that no expenditure was per se incurred during the year relating to this issue and hence, the provisions of Section 40(a)(ia) of the Act could not be made applicable for A.Y. 2007-08.
We find that directions of this Tribunal to examine the allowability of expenses u/s. 40(a)(ia) of the Act for A.Y. 2007-08 would only result in impossibility of performance on the part of assessee in as much as no expenditure was incurred by the assessee in A.Y. 2007-08 thereof.
The expenditure falling within the ambit of Section 40(a)(ia) had been incurred by the assessee in A.Y. 2005-06 on which depreciation is already allowed by the ld. AO in A.Y. 2005-06. Hence, the A.Y. 2007-08 is only consequential year of allowing depreciation on fixed assets and expenses falling under 40(a)(ia) of the Act. Miscellaneous Application of the assessee is allowed.
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2021 (7) TMI 1409 - CALCUTTA HIGH COURT
Money Laundering - Provisional attachment Order - proceeds of crime - case of appellant is that events in subject matter of the alleged offences for the properties-in-question are stated to be proceeds of crime, have occurred much after the date of acquisition of the said properties - typographical errors resulting to show suspicious transactions - connection of petitioners with the accused - HELD THAT:- This Court notes that in terms of Section 8 of the PMLA Act, the petitioners have been issued show cause notice on 8th June, 2021. The matter is pending adjudication before the Adjudicating Authority. The writ petition is premature - question of jurisdiction raised in respect of a quasi judicial proceeding by the writ petitioners, is first required to be addressed by the authority created under the statute to adjudicate the matter.
The writ petitioners also have a remedy of an appeal before a Tribunal against the order of the adjudicating authority - This Court, therefore, is of the view that it may be rather premature for the writ petitioner to approach the writ court against the provisional findings by the authority under the statute.
This Court directs the adjudicating authority under Section 8 to complete proceeding against the writ petitioners within the period specified under the statute. No unnecessary adjournment shall be granted by the adjudicating authority to any of the parties - Petition disposed off.
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2021 (7) TMI 1408 - ITAT CHANDIGARH
Disallowance of stock written-off - Assessee discontinued dealing in one of its products i.e. Aquafresh Tooth Brush and vaccine stocks nearing expiry were not capable of being sold in the market - appellant failed to produce evidence of (i) informing the excise authorities or other regulatory authorities for destruction of such goods and (ii) intimating the dealers/ stockiest for not selling Aquafresh toothpaste, to substantiate the claim - HELD THAT:- It is not that the claim was entirely unsubstantiated - despite the repeated assertion of the assessee that the vaccines written off were nearing expiry, evidenced with emails so exchanged and the stock write off sheets so mentioning, the Revenue has not brought anything on record to controvert the said claim. Without pointing out any infirmity in the explanation of the assessee duly evidenced with documents, we hold, the claim could not be denied for want of further evidence. Nothing has been pointed out regarding the insufficiency of evidences filed by the assessee. Then why further evidences were needed to substantiate the claim we are unable to understand.
We hold, the 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.
As for the write off of Aquafresh tooth brush the assessee we find had explained to the CIT(A) the reasons for discontinuation of the business and the consequent withdrawal of the toothbrushes, from the market, being commercially unviable and had as evidence filed copy of the Board resolution dated 25-11-2003 to this effect. Thus, we find that 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.The claim of the assessee to write off of toothbrush also is therefore allowed.
Disallowance being 1/3rd of the expenditure on advertisement and promotion - Addition on the ground that the said expenditure resulted in promotion of brand name owned by the foreign company - HELD THAT:- Revenue claiming that the assessee has incurred brand building expenses, the onus is on the Revenue to establish the said fact. 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. We therefore direct deletion of the disallowance made on account of brand building expenses.
TDS u/s 195 - disallowance made of amount paid to M/s GlaxoSmithKline Biological S.A., Belgium for purchase of vaccine, on account of non-deduction of tax at source thereon, holding that there was a permanent establishment of the said entity in India and, therefore, the profits attributable to the purchases made by the assessee from the said entity were liable to tax in India - HELD THAT:- As brought to our notice that the AO’s findings were based on data/information extracted from websites none of which was related to the assessee. That even the information extracted regarding conducting of clinical trials of the AO’s order did not mention the assessee as the site where trials were to be carried out. That even the Genetic Engineering Committee report did not relate to the impugned year, being dated 8th February 2006.That the findings to the effect that no other activity was being carried out by the assessee except clinical trials was incorrect as the assessee was manufacturing Eno and Crocin.
The findings of the AO therefore that the assessee was carrying out clinical trials for GSK Biologicals, we find, has been demonstrated before us to be not based on relevant facts. CIT(A) has merely reiterated the findings of the AO despite specific factual and legal contentions made by the assessee to the contrary. We have also noted that the determination of PE of GSK Biologicals SA, is pending before the Hon’ble Delhi High Court in writ petitions filed by GSK Biologicals SA against proceedings initiated u/s 148 of the Act on the basis that there exists PE, for A.Y. 2005-06 TO 2009-10.
Thus we are of the view that it would be in the fitness of matter to restore the issue back to the AO for adjudication afresh in accordance with law after giving due opportunity of hearing to the assessee and after considering all factual and legal contentions raised by it.
Admission of additional ground - whether the education cess paid by the assessee and calculated as proportion of the income tax, is allowable as expenditure? - HELD THAT:- In the present case it is not that the outcome of the entire appeal depends on the additional ground raised. On the contrary the additional ground impacts only one claim of the assessee to deduction of education cess paid, which neither requires any facts to be uncovered or even verified or investigated. There is no finding of fact to be recorded vis a vis the impugned issue and hence no impediment to the ITAT in adjudicating the issue. Therefore we find there is no reason to restore it for adjudication to the CIT(A). The contention of the Ld. D.R. therefore that the additional ground raised should be restored to the CIT(A) is accordingly dismissed.
Allowability of education cess - The education cess is an additional surcharge levied by the Union. Considering that tax on income has been so defined as including surcharge and additional surcharge, it stands settled therefore, that the education cess is in the nature of tax levied on the income from the business and profession and thus specifically not allowable as per the provisions of section 40(a)(ii) of the Act. There is no scope for any other interpretation/ view on the issue considering the decision of the apex court in K. Srinivasan [1971 (11) TMI 2 - SUPREME COURT] read with the Finance Bill levying education cess.
We therefore hold that education cess falls within the scope of amounts not allowed as deduction u/s 40(a)(ii) of the Act.
Claim of Product Development & Research Expenses - HELD THAT:- Revenue has decided the issue based on general observations without examining the nature and impact of the expenses on the existing business of the assessee. Even the decision of the ITAT in the case of Glaxo Smithkline consumer Health care Ltd.(supra), relied upon by the assessee, we find, rendered its judgment after examining the facts relating to the expenses vis a vis its nature and impact on business. The issue therefore, we hold, needs to be reconsidered by the AO for which purpose we restore it to the AO with the direction to adjudicate it in accordance with the direction of the ITAT in the case of the assessee for A.Y. 1998-99 and 1999-2000.
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2021 (7) TMI 1407 - CESTAT KOLKATA
Deposit of Service Tax or not - learned Commissioner in the impugned order has observed that though the appellant has submitted that the amount has been deposited through book adjustment but the actual payment has not been established - HELD THAT:- The Railway Board, Ministry of Railways, vide letter no. 2017/AC-II/1/21 dated 16.11.2020 has confirmed the deposit of the service tax. It has been initer-alia stated that The amount of service tax collected by Railways was being credited to Civil Head of Account, Major Head – 0044 Service Tax every month through monthly Account Current sent to CGA, Ministry of Finance as per existant guidelines from the Ministry of Finance. The details of Service Tax booked under Major Head 0044 by Ministry of Railways during the financial year 2012-13, 2013-14 and 2014-15.
Thus, service tax stands deposited with the Government Treasury through account adjustment, instead of payment by challans, as per the guidelines issued by the Finance Ministry, and hence, this is not the case of non-payment of service tax - The said view has consistently been taken by the Tribunal in M/S. POST MASTER VERSUS COMMISSIONER OF CENTRAL GOODS & SERVICE TAX AND CENTRAL EXCISE, JODHPUR [2020 (4) TMI 345 - CESTAT NEW DELHI], SENIOR POST MASTER VERSUS CCE AND ST, JAIPUR-I [2018 (3) TMI 1673 - CESTAT NEW DELHI] and THE SUPERINTENDENT OF POST OFFICE VERSUS COMMISSIONER OF CENTRAL EXCISE, GUWAHATI [2017 (3) TMI 789 - CESTAT KOLKATA].
There is a need for examination of quantification of tax amount involved during the period in dispute so as to ensure whether the same corresponds to the amount deposited by way of book adjustment for which the matter is remanded back for limited purpose. In the said remand proceedings, the authorities shall verify with regard to the quantification and supporting documents.
Appeal allowed by way of remand.
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2021 (7) TMI 1406 - ITAT BANGALORE
Order passed by the CIT(Appeals) ex parte - Non giving due opportunity of hearing to the assessee - as submitted that as per the return of income, the assessee has duly paid the admitted tax shown in the return filed by the assessee also Form 26AS of the respective assessment years - HELD THAT:- Admittedly, in this case, order was passed by the CIT(Appeals) ex parte without giving due opportunity of hearing to the assessee. Further, the CIT(A) has not gone through the details of payment of admitted tax which is required to be verified by him after giving opportunity of hearing to the assessee in both the assessment years. Accordingly, these appeals are remitted back to the file of the CIT(Appeals) for de novo consideration of the issues after providing opportunity of being heard to the assessee. Appeals of assessee are allowed for statistical purposes.
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2021 (7) TMI 1405 - MADRAS HIGH COURT
Dishonour of Cheque - compoundable offence or not - amicable settlement of disputes - trial for offence under Sections 406, 409, 420, 506(i) r/w 34 IPC - HELD THAT:- In this case, the victims handed over money to the 2nd respondent/LW1 directly to get job from the Transport Department and some through LW2, LW3, LW4, LW5 and LW6. All these persons categorically stated that along with money, they handed over the Interview Call Letter. The 2nd respondent/LW1 stated that he had contact with A4, who represented to him that he knew A3, the Personal Assistant of A1, the former Transport Minister. LW2 to LW6 handed over the money to the 2nd respondent/LW1 and other aspirants have never met the 2nd respondent/LW1. In order to confirm the job, the 2nd respondent/LW1 went along with A4 and met A3, who received the money and promised that within a week the appointment order will be issued - When the cash balance were verified with the bank, it was found that no sufficient balance in the account of A4. In this case, the 2nd respondent/LW1 and A4 are the persons who had been in constant touch with each other during the transactions and involved themselves in the process of getting appointment orders. As regards A1 and A2 are concerned, they had given assurance that the appointment order would be issued to the victims, but there is no material to show that A1 and A2 directly involved in the transactions. The other victims namely LW7 to LW11 did not handover the cash to the accused seeking job. It was to LW1. Further, in this case, the appointment orders or any other documents in respect of the transaction were not produced. Hence, the allegations seems to be general and vague in nature.
The case is still at the stage of trial. By passage of time, the parties have decided to bury their hatchet and compromised the dispute amicably among themselves. This Court enquired both the parties and is satisfied that the parties have come to an amicable settlement between themselves. Thus, no useful purpose would be achieved by keeping the above case pending.
Thus, no useful purpose will be served in this case, even though the offences involved are not compoundable in nature - petition allowed.
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2021 (7) TMI 1404 - ITAT MUMBAI
Addition u/s 41(1) - advance received by the assessee for sale of his flat originally pursuant to MOU entered into with the purchaser - since the said purchaser expressed his inability to pay the remaining part of the consideration for the property, the MOU was cancelled by the assessee AND assessee is bound to refund the advance received which he had no sufficient funds to refund the advance to the party, the same were refunded in installments - amounts received as advance for sale of property is a capital receipt and is certainly not a trading receipt - CIT-A deleted addition - whether CIT(A) was correct in accepting the proof of payments submitted by the assessee before him which were never produced before the AO in contravention to the provisions of' Rule 46A of the Income Tax Rules, 1962? - HELD THAT:- As on 31/03/2019, there were no amounts payable by the assessee to said party. This cannot be construed as any additional evidence as it is only submission of mere fact of repayments made to the said party which were submitted at the behest of the ld CIT(A). Even before us, the Revenue had not brought any contrary evidence to prove that the said liability was not repaid.
In the first instance, the addition ought not to have been made u/s.41(1) of the Act in the facts of the instant case as we have already stated hereinabove that assessee has been continuing to show it as liability as on 31/03/2015 in his balance sheet. AO having made an unwarranted addition in the hands of the assessee cannot claim recourse to Rule 46A violation by merely taking the ground before us when the said provision of Section 41(1) of the Act could not have been applied by him in the eyes of law.
CIT(A) had not granted relief to the assessee by relying on the said table. He had granted relief on the ground that no deduction has been claimed by the assessee in earlier years and hence, provisions of Section 41(1) of the Act could not be invoked in the instant case. Moreover, the ld. CIT(A) had also appreciated the fact that assessee had continued to show the liability in his books and that the liability had not ceased to exist. Hence, the ground No.1 raised by the Revenue on the alleged violation of Rule 46A of the IT Rules is hereby dismissed. In view of the aforesaid observations, both the grounds of the Revenue are dismissed.
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2021 (7) TMI 1403 - ANDHRA PARDESH HIGH COURT
Levy of IGST - Appealable order or not - non-availability by petitioner by way of statutory remedy - petitioner argues that the assessment was made taking into consideration the maximum retail price and not the actual sale price - HELD THAT:- We are afraid that such issue ought to have been agitated before the appellate forum and do not make out any case of assessment without jurisdiction or in breach of principles of natural justice requiring invocation of writ jurisdiction of this Court and that too after a lapse of more than two years.
The Writ Petition is dismissed.
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2021 (7) TMI 1402 - MADHYA PRADESH HIGH COURT
Territorial jurisdiction of the Court to entertain this writ petition - the office has taken an objection with regard to the territorial jurisdiction as the respondent No.1/National Company Law Tribunal is situated at Ahmedabad and outside the territorial jurisdiction of this Court - HELD THAT:- Undisputedly, no original order has been passed by any authority in the State of Madhya Pradesh which was taken to the NCLT at Ahmedabad by the aggrieved party. Merely because the petitioner is situated in Madhya Pradesh or the fact that the NCLT at Ahmedabad which passed the impugned order on account of notification passed by the Central Government on 31.01.2020 was now vested with all the cases which would otherwise have been tried by the NCLT at Indore, cannot give jurisdiction to this Court, in view of Article 227 of the Constitution, where High Courts have been vested with the authority of superintendence over all Courts and Tribunals within the territory to which its power extends, precludes this High Court from entertaining the present writ petition on the ground of lack of territorial jurisdiction.
As the original order itself has been passed by the NCLT at Ahmedabad and there being no other order which has been passed by any authority in Madhya Pradesh by which the petitioner herein was aggrieved by, it would only be the High Court of Gujarat that would have jurisdiction to entertain the present petition.
This petition is dismissed for want of territorial jurisdiction.
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2021 (7) TMI 1401 - ITAT BANGALORE
TP Adjustment - Comparable selection - HELD THAT:- Referring to Appellant's international transactions in respect of software development services, companies functionally dissimilar with that of assessee need to be deselcted as comparable.
Working capital adjustment - As decided in own case [2018 (10) TMI 1796 - ITAT BANGALORE] no comparable uncontrolled transactions for the purpose of comparison. The transfer pricing exercise would therefore fail. Therefore in keeping with the OECD guidelines, endeavor should be made to bring in comparable companies for the purpose of broad comparison. Therefore the working capital adjustment as claimed by the Assessee should be allowed. Thus we are of the opinion that this issue has to be remitted back to the file of AO/TPO for fresh consideration in accordance with the above order of the Tribunal in assessee’s own case for AY 2012-13
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2021 (7) TMI 1400 - BOMBAY HIGH COURT
Benefit of DTVSV Scheme - Petitioner’s application has been rejected for the reason that assessee had not filed any appeal against the order in respect of which he wishes to avail benefit, while an assessee has to file appeal on or before 31st January, 2020 and since the appeal had not been filed, it does not fulfill the criteria prescribed under the DTVSV Act - HELD THAT:- This is a peculiar case wherein assessment order of 22nd December, 2019, had not been served upon the Petitioner until Petitioner obtained a copy on 15th December, 2020 and as can be seen from the aforesaid discussion, Petitioner as such had suffered handicap to lodge an appeal before the specified date i.e. 31st January, 2020 for no fault of his. In the circumstances, it would emerge that Petitioner would be able to avail benefit of the term ‘Appellant’ under Section 2(1) (a)(ii) of the DTVSV Act.
In circular bearing No.9 of 2020 dated 22nd April, 2020 in its reply to Questions No. 1 and 23, it has been referred to that where any order has been passed under the I.T. Act and time limit to file appeal has not expired on 31st January, 2020, then the assessee can be very well opt for the said Scheme. The purpose and object underlying bringing in under DTVSV Act is to provide resolution of the disputed tax and matters connected therein and to put an end to litigation and unlock revenue detained under litigation.
It would be expedient that present Petition be allowed. As such, impugned order of Respondent No.3, (Exh. ‘K’ - page 107 of writ petition) rejecting application in Form Nos.1 & 2 under the DTVSV Act and the Rules, is set aside. Respondents are directed to consider Petitioner’s application made in Forms 1 & 2 and issue proper order in the Form 3 in accordance with the provisions of the DTVSV Act and Rules within a period of two weeks from the date of this order.
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2021 (7) TMI 1399 - ITAT, MUMBAI
Treatment of advertisement revenue as Business income taxable in India - AR emphasized that the alleged permanent establishment (PE) by the income tax department has been remunerated on an ALP basis and is evident from the transfer pricing order of the assessee wherein all its international transactions have been accepted at ALP with no TP adjustments - HELD THAT:- We find the Hon’ble ITAT in Assesses own case for the A.Ys 2000-01 to 2004-05 [2021 (1) TMI 125 - ITAT MUMBAI] has dealt on this disputed issue and decided in favour of the assessee
We find in the present case the facts are similar and the assessee has paid Arms Length Commission to its Agent and TPO has accepted the payments and no transfer pricing adjustment was made considering it as fair and reasonable. We respectfully fallow the judicial precedence and the ratio of the decision on the advertisement revenue treatment and direct the assesseing officer to delete the addition and allow the grounds of appeal in favour of the assessee.
Income accrued in India - distribution revenues earned by the assessee falls within the meaning of Royalty under Article 12 of India - USA DTAA is taxable in India - HELD THAT:- The distribution rights granted by the assessee is only a Broad Casting right and cannot be brought under the purview of Copy right. We fallow the judicial precedence [2021 (1) TMI 125 - ITAT MUMBAI] and direct the assesseing officer to delete the addition as per the ratio of the decision discussed in the above paragraphs and allow the grounds of appeal in favour of the assessee.
Short of TDS credit - HELD THAT:- We are of the opinion that the assessee should not be deprived of its legitimate right for TDS credits and direct the A.O. to verify the claim and grant the TDS credit.
We find the assessee has claimed additional TDS credit (only in the A.Y.2010-11) in the DRP proceedings and the directions were issued to the Assessing officer (A.O).The asseesse has submitted the supporting claim of evidences before the A.O. Accordingly, the assessing officer is directed to verify and examine the documents filed in support of TDS claim.
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2021 (7) TMI 1398 - KARNATAKA HIGH COURT
Allegation of involvement in alleged anti-competitive practices and conduct - deep discounting - preferential listing - sale of private label brands through preferential sellers - exclusive tie-ups - violation of Section 3(1) r/w Section 3(4) of Competition Act - Section 26(1) of the Competition Act, 2002 - HELD THAT:- The record of the case reveals that respondent No. 2 - Delhi Vyapar Mahasangh filed an information on 24.10.2019 to CCI under Section 19(1)(a) of the Act of 2002 against both the appellants alleging that the appellants are involved in alleged anti-competitive practices and conduct, such as deep discounting, preferential listing, sale of private label brands through preferential sellers and exclusive tie-ups, alleged to be in violation of Section 3(1) read with Section 3(4) of the Act of 2002. The CCI based upon the information received by it, has passed an order dated 13.1.2020 in Case No. 40/2019 directing an investigation under Section 26(1) of the Act of 2002 by the Director General.
In the considered opinion of this Court, the CCI certainly have a jurisdiction to take appropriate steps to curb the anti competitive practices and a detailed mechanism is provided under the Act itself to ensure that no anti competitive practices are undertaken. The appellants, it appears, do not want to participate at all in the proceedings initiated by the CCI and do not want the CCI to proceed ahead in accordance with law. This Court really fails to understand as to why the appellants do not want to participate in the enquiry, in which the appellants will have an opportunity to produce the material before the Director General on the basis of which, after hearing the appellants and after following the due process of law, the Director General shall be able to conduct an enquiry.
In order to achieve the object of the Act of 2002, the question of interference does not arise. The appellants do have a right to participate in the proceedings and/or under an obligation to produce all the material as desired during the enquiry by the Director General. The appellants want to crush the proceedings at a preliminary stage in a similar manner like quashing of FIR as prayed in a petition filed under Section 482 of the Cr.P.C. Earlier, almost in every criminal case, petitions were filed for quashment of the First Information Report (FIR) and in those circumstances, the Hon'ble Supreme Court has laid down parameters for quashment of the criminal proceedings/FIR in the case of State of Haryana and others v. Bhajan Lal and others, [1990 (11) TMI 386 - SUPREME COURT] - Hon'ble Supreme Court in the the case has held that unless and until the show cause notice is vague or has been issued by an authority not competent to do so, interference can be done in the matter. In the present case, the order passed by the CCI directing an enquiry is the first stage of initiating process under the CCI Act and the enquiry is yet to commence. The appellants do not want to participate in the enquiry for the reasons best known to them.
The present case is not a case where the mala fides are alleged against the Regulator, nor there is any jurisdictional infirmity. The order passed under Section 26(1) is neither an adjudication, nor determinative, but merely an inquisitorial, departmental proceedings in the nature of a direction to the Director General to make an investigation. It is neither a judicial nor a quasi judicial proceedings.
It is apparent from a reading of the CCI order dated 13.1.2020 that the prima facie case was in existence and keeping in view the prima facie case, an enquiry has been ordered by passing an order under Section 26(1) of the Act of 2002 by the CCI. In the considered opinion of this Court, the learned Single Judge was justified in holding that the order passed by the CCI does not warrant an interference - The issue relating to deep discounting, preferential listing and exclusive tie-ups will be looked into in depth at the time of enquiry by the Director General only when various agreements executed by the appellants are brought to the notice of the Director General. At this stage, the petitions/appeals filed are premature and deserves to be dismissed. The learned Single Judge was justified in holding that the order passed by the CCI under Section 26(1) is an administrative order and the findings arrived at by the learned Single Judge does not warrant an interference.
The order was passed by the CCI on 6.11.2018 directing closure of the case under Section 26(2) of the Act of 2002. The present order has been passed by the CCI under Section 26(1) of the Act of 2002 on 13.1.2021, meaning thereby after a lapse of considerable long time it has been passed and in a competitive market various agreements are executed, new practices are adopted every day and merely because some other issue has been looked into by the CCI earlier, it does not mean that on the ground of res judicata the CCI cannot look into any information subsequently against the appellants. The principle of res judicata has no application in the matter under the Act of 2002 in the peculiar facts and circumstances of the case. The market place is by its very nature a constantly evolving and dynamic space - In the considered opinion of this Court, an expert body cannot be crippled or hamstrung in their efforts by application of technical rules of procedure.
In the considered opinion of this Court, by no stretch of imagination, the process of enquiry can be crushed at this stage. In case, the appellants are not at all involved in violation of any statutory provisions of Act of 2002, they should not feel shy in facing an enquiry - The writ petitions filed against the order dated 13.1.2021 and the present writ appeals are nothing but an attempt to ensure that the action initiated by the CCI under the Act of 2002 does not attain finality and the same is impermissible in law as the Act of 2002 itself provides the entire mechanism of holding an enquiry, granting an opportunity of hearing, passing of a final order as well as appeal against the order passed by the CCI. In the considered opinion of this Court, the present writ appeals filed by the appellants are devoid of merits and substance, hence, deserve to be dismissed and are accordingly, dismissed.
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2021 (7) TMI 1397 - KERALA HIGH COURT
Seizure of goods alongwith vehicle - expired E-way bill - case of petitioner is that the E-way bill unfortunately expired as the vehicle could not travel within the prescribed time because of break-down - HELD THAT:- For whatever reasons, the goods, at the time of inspection, were found to be without valid documents as required by the GST Act. The proper Officer, therefore, started proceedings under Section 129 of the GST Act, which are not even culminated in the final order.
In the matter of M/S. PODARAN FOODS INDIA PRIVATE LIMITED VERSUS STATE OF KERALA, THE ASSISTANT STATE TAX OFFICER (SQUAD NO. I) , THE ASSISTANT STATE TAX OFFICER, COMMISSIONER STATE GOODS AND SERVICE TAX DEPARTMENT [2021 (1) TMI 552 - KERALA HIGH COURT], this court had already concluded the issue with the observations that I do not find any reason to interfere with the adjudication orders in Form GST MOV-9 impugned in the writ petition. The petitioner is relegated to his alternate remedy of preferring appeals against the said adjudication orders before the appellate authority under the Act. All contentions, legal and factual, are left open to be agitated by the petitioner before the appellate authority.
Petition disposed off.
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2021 (7) TMI 1396 - ITAT AHMEDABAD
Disallowance u/s 14A r.w.r. 8D - Suo moto disallowance by assessee - Necessity of recording satisfaction - CIT(A) deleted the addition made by the AO with respect to interest disallowance observing that the amount of interest income shown by the assessee exceeds the amount of interest expenses and therefore there cannot be any disallowance - whether the AO can resort to the provisions of section 14A read with rule 8D without rejecting the suo-moto disallowance made by the assessee? - HELD THAT:- We find that the provisions of section 14A of the Act requires that the AO has to record the satisfaction after having regard to the accounts of the assessee as well as correctness of the claim of the assessee in respect of the expenditure incurred in connection with the exempted income. Admittedly, there was the disallowance made by the assessee against the exempted income. But the AO has not pointed out any defect in the disallowance made by the assessee. Thus in our considered view such act of the AO is in violation of the provisions of section 14A read with rule 8D of Income Tax Rule. As such, the AO was under the obligation to record the dissatisfaction about the correctness of the claim of the assessee.
We find support and guidance from case of DCIT v/s Pidilite Industries Ltd. [2019 (6) TMI 470 - ITAT MUMBAI] wherein it was held that the AO has to form an opinion as to why the disallowance offered by the assessee, having regards to its accounts, was not satisfactory or correct. The aforesaid satisfaction of the AO is sine-qua-non, before acquiring jurisdiction under section 14A r.w. rule 8D - we are not convinced with the order of the ld. CIT-A and thus, we direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed.
Nature of expenses - business development expenditure - Revenue or capital expenditure - HELD THAT:- As decided in assessee own case[2016 (11) TMI 1730 - ITAT AHMEDABAD] business development expenditure to be Revenue in nature - accordingly, we dismiss the ground of appeal of the Revenue.
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2021 (7) TMI 1395 - SUPREME COURT
Power of the High Court in exercising extraordinary writ jurisdiction under Article 226 - assessment of conflicting technical reports - removal / repair of the wall of the adjoining property - The Appellant submits that, the structures being interlinked, structural repair of any one structure would affect the stability of the adjacent structure.
HELD THAT:- the High Court has committed a serious error in directing removal of a wall with the assistance of M/s. Shetgiri and Associates, when there were conflicting reports including an earlier report of the Technical Advisory Committee on the basis of the opinions of other Architects, declaring the building to be of the C-1 category.
It is well settled that the High Court exercising its extraordinary writ jurisdiction Under Article 226 of the Constitution of India, does not adjudicate hotly disputed questions of facts. It is not for the High Court to make a comparative assessment of conflicting technical reports and decide which one is acceptable.
It is not understood how the High Court could have been satisfied that the stability of the building could be restored by repair in the manner directed. The High Court patently erred in passing the impugned order. The impugned order cannot be sustained.
The appeal is, accordingly, allowed, for the reasons discussed above. The impugned final judgment and order is set aside and the writ petition is dismissed.
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2021 (7) TMI 1394 - KARNATAKA HIGH COURT
MAT computation applicability - Tribunal held that the assessee is governed by the different Acts and Rules and is not required to prepare its profit and loss account and balance sheet as per Part II and III of Schedule VI of the Companies Act, hence the provisions of Section 115JB cannot be invoked in the instant case - HELD THAT:- When the matter was taken up today, the learned senior counsel for the assessee submitted that the aforesaid substantial question of law involved in this appeal has already been answered in favour of the assessee for the previous assessment year namely 2005-2006, by this Court vide judgment[2017 (12) TMI 1631 - ITAT BANGALORE]
The aforesaid submission could not be disputed by the learned counsel for the revenue.
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2021 (7) TMI 1393 - AUTHORITY OF ADVANCE RULING, JHARKHAND
Classification of supply - rate of tax - activity of transportation of coal from the mine to the railway siding at Pakur, till the time the railway siding is made operational at the mine - an independent activity or part of supply of mining service - exemption available to the applicant as 'transportation of goods by a person other than GTA' - liability to pay GST under RCM on the transportation services received from the transporters, as they are not issuing consignment note.
HELD THAT:- The price charged by the supplier for both the services are separately mentioned in the contract held in this regard. The bills/invoices are also separately raised in this regard. Moreover, none of the services can be considered as predominant over the other service. Both the services are important for the service recipient and accordingly invited tender and held contract for availing both the services. These services in any way cannot be considered as naturally bundled services as order of both the services can be awarded to separate service providers. Also they are not supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply nor are these services supplied made in conjunction with each other for a single price.
In this case it can be treated that the applicant has made an arrangement in place of consignment note by issuing different forms in their own style which they handover to the transporters and after delivery of the goods, weighment challans have been issued at railway siding which proves that goods have been delivered safely. After verification of the quantity, the payment is released to the transporters in due course as per the clauses of agreement - The purpose of issuing consignment note indicates that the lien on the goods has been transferred to the transporter and the transporter becomes responsible for the goods till its safe delivery to the consignee. In the present case also collective reading of Work Order awarded to the transporter with the requisite forms required to be filled/signed, makes it amply clear that the transporter becomes responsible for the goods till its safe delivery to the destination.
As per the provisions of Section 9(3) of the Act, the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both - the services rendered by the 'Goods Transport Agency' in short GTA falls under 'Reverse Charge Mechanism' (in short RCM) and the applicant is liable to pay GST on the same under RCM after appropriate valuation of the service.
GST applicable in this case has been covered under Entry 9(iii) of the Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 (Heading 9965), as amended, subject to conditions mentioned therein, i.e., a GST Rate of 5% will be applicable provided that credit of input tax credit charged on goods and services used in supplying the services has not been taken. However, Entry No. 9(iii) of the said Notification has been substituted vide Notification No. 20/2017-CT (Rate) dated 22.08.2017 for including an alternative GST Rate of 12%, provided that the transporters opted to pay so.
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