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2021 (8) TMI 1336
Validity of assessment u/s 153A - Requirement of prior approval of the Joint Commissioner u/s 153D - Whether CIT(A) has erred in law by upholding the alleged approval u/s 153D being illegal, bad in law and without any application of mind and the Assessment order is passed without obtaining requisite approval? - HELD THAT:- As approval was received in the office of the Assessing Officer on 28.7.2016, whereas the Assessment Order was passed by the AO on 27.7.2016. In the remand report, the Assessing Officer had submitted that in the era of technology where communication between the persons via phone /fax, date of receipt of physical letter by post is immaterial. In our considered opinion, the requirement of Section 153D is clear and unambiguous, which requires prior approval of the Addl. CIT before passing the order by the Assessing Officer.
Prior approval as contemplated u/s 153D cannot be granted over the phone, sometimes the approving agency may not agree in the complete draft order and suggest some modification, changes or deletion in the draft assessment orders. At times, the approving agency may also suggest the assessing officer to consider some material which has been missed by the assessing officer, for consideration and incorporating in the proposed assessment order. All the above said cannot be conveyed over the telephone. There has to be some written more for conveying the approval either by fax/ email/ letter after due deliberation or consideration of the relevant material and draft assessment order. In no case, oral approval can be granted by the Addl. CIT. The order granting the approval can be subject matter of judicial review if it is passed without application of mind, without assigning the reason or non-consideration of the relevant material or passing the order considering the irrelevant or extraneous material or reason.
As the Assessing Officer has passed the assessment order without having the approval in his record, in our considered opinion, the assessment order passed in all the cases before us is null and void and cannot be acted upon. In view of the above, all the appeals from the assessee are required to be allowed.
When the Assessment Order was passed by the Assessing Officer, than there was no prior approval in the record of the Assessing Officer, from the Addl. CIT. Further, the approval granted after passing of the order was non-est in the eyes of law as it was granted in the mechanical, stereotype manner, without assigning any reasons and without considering the draft assessment order and the assessment record. Appeal of assessee allowed.
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2021 (8) TMI 1335
Demand of Service Tax on royalty payable under the Rajasthan Minor Mineral Concession Rules, 2017.
HELD THAT:- Issue notice.
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2021 (8) TMI 1334
TP Adjustment - comparable selection - exclusion of Infosys Ltd., as a comparable company - turnover filter - HELD THAT:- As relying on Autodesk India Pvt. Ltd. [2018 (7) TMI 1862 - ITAT BANGALORE] we are of the view that the CIT(A) ought to have excluded Infosys Ltd., as a comparable company by applying the turnover filter. We direct that this company should be excluded as a comparable company.
Excluding Persistent Systems Ltd. - Persistent Systems Ltd. was excluded from the list of comparable companies on the ground that these companies were engaged in diversified activities and earning revenue from various activities including licensing of products and income from maintenance contracts and there was no segmental reporting so that the operating margins of SWD services of this company can be compared with the assessee. In the light of the aforesaid decision CSG Systems International (I) P. Ltd [2019 (8) TMI 350 - ITAT BANGALORE] we do find merit in ground raised by the Assessee and allow the same.
Adjustment towards working capital differences - CIT(A) was not justified in denying adjustment on account of working capital adjustment. Since, the CIT(A) has not found any error in the TPO's working of working capital adjustment, the working capital adjustment as worked out by the TPO has to be allowed. We may also add that the complete working capital adjustment working has been given by the Assessee and a copy of the same. No defect whatsoever has been pointed out in these working by the CIT(A). We may also further add that in terms of Rule 10B(1)(e) (iii) of the Rules, the net profit margin arising in comparable uncontrolled transactions should be adjusted to take into account the differences, if any, between the international transaction and the comparable uncontrolled transactions which could materially affect the amount of net profit margin in the open market. It is not the case of the CIT(A) that differences in working capital requirements of the international transaction and the uncontrolled comparable transactions is not a difference which will materially affect the amount of net profit margin in the open market. - Thus we hold that the working capital adjustment as claimed by the Assessee should be allowed. We hold and direct accordingly.
Computation of deduction u/s 10A - HELD THAT:- Taking into consideration the decision rendered by the Hon'ble High Court of Karnataka in the case of CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] we are of the view that whatever is excluded from export turnover should also be excluded from total turnover while computing deduction u/s. 10A of the Act. We are of the view that as of today, law declared by the Hon'ble High Court of Karnataka which is the jurisdictional High Court is binding on us. Moreover, the order of the Hon'ble Karnataka High Court has been upheld by the Hon'ble Supreme Court in the case of CIT v. HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT]
Exclusion of M/S. Kals Information Systems Ltd., by the CIT(A) as not comparable with the Assessee - The company is engaged in the development of software products and providing related services. It also provides implementation and maintenance of software products. It has developed a range of products such as Shine ERP software, Docuflo, Dac 4 Cast, CMSS, La Vision, Virtual Insure and Aldon. The annual report also confirms that the company is engaged in development of software and software products. The company holds significant inventories which account for 27% of the total current assets which demonstrates that it is a product development company as against a pure software service provider like the assessee. The functions carried out by the two companies being substantially different, this company ought to stand rejected as a comparable. The company is being consistently excluded from the list of comparables in similar cases. Since the circumstances leading to it being excluded as being functionally dissimilar in the previous assessment continue to remain same, the company ought to remain excluded in the current assessment year. Thus this company to be excluded in the case of assessees similar to the Assessee herein.
Persistent Systems Ltd - This is the claim of the assessee before us that VAT is leviable only on sale of goods and therefore, it has to be seen that what is the quantum of sale of goods by that company and whether segmental information in that regard is available or not. It has been submitted that as per the remaining three Tribunal orders rendered in the case of WM Global Technology Services (India) (P.) Ltd. [2018 (4) TMI 429 - ITAT BANGALORE] and in the case of Tecnotree Convergence Pvt. Ltd. [2018 (6) TMI 1688 - ITAT BANGALORE] the matter was remanded back to the TPO for fresh decision and therefore, in our considered opinion and in the facts of present case, we feel that this issue should also be restored back to the file of TPO for fresh decision in the light of all these four Tribunal orders after providing adequate opportunity of being heard to the assessee.
Software development services segment - We restore the matter back to the AO/TPO for fresh decision regarding the assessee's claim for exclusion of Larsen & Toubro Infotech Ltd. and Persistent Systems Ltd. after providing adequate opportunity of being heard to the assessee and the issue should be decided after considering all available Tribunal orders for Assessment Year 2013-14 in respect of exclusion of these two companies. Accordingly ground Nos. 9 and 10 are allowed for statistical purposes.
CG - VAK Software Exports Ltd. - CG - VAK Software Exports Ltd. is a software development company and was doing the work of integration, assimilation or patch work for its client and for that purposes is also rendering some services on-site. Therefore it cannot be urged that it was a product company. These findings are directly contradictory to the findings of the Tribunal rendered in the case of Hewlett Packard India Software operation Pvt. Ltd. [2021 (3) TMI 1379 - ITAT BANGALORE] Hence, we deem it proper to remand the issue of comparability of this company also to the TPO/AO for consideration afresh to find out from the financials and annual report and if necessary to issue notice u/s. 133(6) of the Act and in other manner provided in the Act, to find out the true position with regard to the AO.
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2021 (8) TMI 1333
Stay of the impugned order as regards making the payment of IRP costs - HELD THAT:- The application for directions is dismissed.
However, it is open to the applicant(s) as well as Arcelon Mittal Nippon Steel India Limited (Corporate Debtor) to intervene in the civil appeal.
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2021 (8) TMI 1332
Penalty issued u/s 271D and 271E - Amounts were received and paid by the assessee otherwise than through account payee cheques - Tribunal decided to remand the cases to the assessing authority, after finding that the First Appellate Authority had accepted evidence without receiving a remand report from the assessing officer as per Rule 46A of the Income Tax Rules - HELD THAT:- In an appreciation of the circumstances of the case and the purpose for which the matter is remanded, we find force in the contention of the learned Senior Counsel. The observations of the Tribunal, especially those extracted in the earlier paragraph may have the effect of serving as a guiding factor or as a controlling observation over the discretion of the assessing authority while it comes to the conclusion regarding the nature of transactions. The assessee apprehends that the observations may denude the assessing officer of any discretion, especially since at this distance of time, making the cheques physically available for examination may be next to impossible especially since the cheques had been handed over to the Banks. The apprehension is not unfounded.
For the purpose of entering into a conclusion on the veracity of the claim of the assessee that the transactions in question were through Bank accounts, different modes of proof would be available. Physical examination of the cheque alone is not the only method. Direct, indirect or circumstantial evidence can be adduced to satisfy the assessing authority while coming to the conclusion on the issue remanded to it. In the aforesaid circumstances, we are of the firm view that the observations of the Tribunal restricting the option of the assessing authority to physical examination of the cheques in question can cause prejudice to the assessee.
While we affirm the order of remand in all these cases to the assessing authority, we clarify that the assessing authority will consider and pass orders untrammelled by the observations in the order of the Tribunal and will be free to accept evidence of any legally acceptable nature produced by the assessee in support of its claim.
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2021 (8) TMI 1331
Classification of 11 Echo devices - Echo Flex, Echo Auto, Echo Link and Echo Link-Amp - to be classifiable under sub-heading 8517 62 90, or not - four products namely, Echo 4th Generation, Echo Dot 4th Generation, Echo Dot 4th Generation with Clock and Echo Studio classificable under sub-heading 8518 22 00 or not - products namely Echo Show 5, Echo Show 8 and Echo Show 10 classibiable under sub-heading 8528 59 00 or not - HELD THAT:- Regulation 21 of CAAR Regulations empowers this Authority to modify its orders or rulings in the event that the same was pronounced under mistake of law or fact. This power is only to modify the ruling and is evidently not a power to review its own ruling. The provisions of Chapter V-B of the Customs Act do not provide for powers of review, even as appeals provisions are duly included.
In the instant case, the advance ruling pronounced by this Authority on the question of classification of Echo devices was neither under a mistake of law nor of fact. It is a ruling pronounced after due consideration of facts and law. Under the circumstances, provisions of Regulation 21 of CAAR Regulations, 2021 cannot be invoked in the instant case.
Petition dismissed.
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2021 (8) TMI 1330
Maintainability of petition - availability of alternative remedy of appeal - writ petitions are filed with a view to avoid pre-deposits to be made in statutory appeals and on the ground that the appellate remedies are time consuming - HELD THAT:- Preferring an appeal is the rule. Entertaining a writ petition before exhausting the appellate remedy is an exception. Undoubtedly, writ proceedings may be entertained before exhausting the appellate remedy. However, it is to be ensured that there is an imminent threat or gross injustice warranting urgent relief to be granted. Mere violation of principles of natural justice is insufficient to entertain a writ proceedings under Article 226 of the Constitution of India, as every writ petition is filed based on one or the other ground stating that the principles of natural justice is violated or statutory requirements are not complied with or there is an illegality or otherwise. Thus, dispensing with an appellate remedy is to be granted cautiously in view of the fact that the very purpose and object of legislation providing an appellate remedy cannot be diluted nor the benefit be denied to the aggrieved person to exhaust the same. The statutory appellate authorities are the final fact finding authorities. Thus, the finding to be made by such appellate authorities with reference to the documents and evidences are of paramount importance for the purpose of exercise of judicial review by the High Court under Article 226 of the Constitution of India.
The power of judicial review of the High Court under Article 226 of the Constitution of India is to scrutinize the processes through which a decision is taken by the competent authority by following the procedures as contemplated, but not the decision itself. Therefore, the routine entertainment of a writ petition by dispensing with appellate remedy is not preferable and such an exercise would cause injury to the institutional hierarchy and the importance attached to such appellate institutions. The appellate institutions provided under the statute at no circumstances be undermined by the higher Courts. The appellate forums are the final fact finding authorities and more so, possessing expertise in a particular field.
The point of delay may be an acceptable ground for the purpose of entertaining a writ petition. The practise of filing the writ petition without exhausting the statutory remedies are in ascending mode and such writ petitions are filed with a view to avoid pre-deposits to be made in statutory appeals and on the ground that the appellate remedies are time consuming.
The petitioner is at liberty to prefer an appeal before the jurisdictional Appellate Authority in the prescribed format and by complying with the provisions of the Act, within a period of four weeks from the date of receipt of a copy of this order - Petition disposed off.
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2021 (8) TMI 1329
Maintainability of appeal - requirement of compulsory deposit of 7.5% for the appeal to become competent and to be heard - high valuation of goods which would actually be of much lesser value - penalty - HELD THAT:- All the arguments can be raised before the appellate authority and the appellate authority would be well within its powers either to itself examine these aspects of the matter or to remand the matter for fresh valuation if it is convinced that the Valuation Rules of 2007 have not been followed.
It is not deemed to be a fit case for interference under Article 226 of the Constitution. The petition is accordingly dismissed.
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2021 (8) TMI 1328
Weighted deduction u/s 35(2AB) - Claim Denied on expenditure incurred for Research and Development on the ground of Non furnishing of Certificate in Form 3CL from Department of Scientific and Industrial Research (DSIR) - HELD THAT:- Both the lower authorities have rejected the same for the sole reason that the then taxpayer had failed to file corresponding Form-3CL issued by the prescribed authority i.e., Department of Scientific and Industrial Research ‘DSIR’. Case file indicates that the assessee has filed its additional evidence petition dt.08-10-2020 placing on record the DSIR’s approval in Form- 3CI, dt.28-11-2017 whereas the CIT(A)’s order under challenge is dt.30-10-2017. We therefore deem it appropriate to restore the instant former issue back to the Assessing Officer to be examined afresh in light of the DSIR approval dt.28-11-2017 issued in assessee’s case in AYs.2014-15 to 2016-17; as the case may be.
Disallowance of depreciation - appellant acquired leasehold rights on land to setup a unit in SEZ - revenue contention in support of the impugned disallowance is that the assessee ought to have amortized the same u/s.35 - HELD THAT:- We find no merit in the instant contention per se in view of the fact that neither there is any specific provision in the Act nor is any CBDT circular to this effect. Hon'ble apex court’s recent decision in Taparia Tools Ltd. [2015 (3) TMI 853 - SUPREME COURT] rather holds that the claim of revenue expenditure is not to be denied merely because the same could also be split over a period of years. Coupled with this, this tribunal’s Special Bench in ACIT Vs. Progressive Constructions Ltd. [2017 (3) TMI 1167 - ITAT HYDERABAD] decides the issue in assessee’s favour that a right to operate any asset forms an intangible asset u/s.32(1)(ii) of the Act entitled for depreciation.
Assessee in the instant case has taken land on lease to set up an SEZ and therefore, the same ought not to be taken as eligible for depreciation - We find no substance in the instant last plea as well as the assessee has claimed the impugned relief qua lease premium of Rs.5,85,30,062/- than regarding acquisition of the land along with its title. We therefore distinguish the Revenue’s arguments based on case law M/s. Mahanadi Coalfields Ltd [2018 (1) TMI 326 - ITAT CUTTACK] and M/s. Cyber Park Development & Construction Ltd.[2018 (1) TMI 326 - ITAT CUTTACK] in light of the foregoing Special Bench decision (supra). The assessee’s instant second substantive ground is accepted in principle. AO shall frame his consequential computation as per law.
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2021 (8) TMI 1327
Classification of goods - Fire TV Cube Model No. A78V3N - IR extender cable - It is seen that a common application has been filed for two goods on the ground that IR extender cable is an IR accessory of the device Fire TV Cube - Fire TV Cube is rightly classifiable under Custom Tariff Item 8517 62 90 or not? - IR Extender Cable is rightly classifiable under Tariff Item 8543 70 99 or not?
Fire TV Cube - HELD THAT:- It is seen that Fire TV Cube is described on the Amazon website as “Hands-free streaming device with Alexa”; as “the fastest, most powerful Fire TV Streaming Device”; and with Alexa on Fire TV Cube, you can control compatible TVs, sound bars, tune to live TV channels with DTH set top boxes, etc. - Fire TV Cube is a multi-function machine which is sold in the market highlighting it as a streaming device - thus, Fire TV Stick (3rd Gen.), a device similar to but not as advanced as Fire TV Cube, merits classification under Heading 8517, and more specifically under sub-heading 8517 62 90.
It is seen that communicating with the AVS/Amazon cloud with the use of Alexa to deliver audio/video streaming content is the principal function of the device in question; it means that it receives voice/remote signals, converts the same into RF signals that are transmitted to the cloud, where processing takes place, after processing, processed signals, i.e. data/media requested by the user, are received by the device, which again undergoes conversion to be played through the speaker or be displayed on the compatible television. Thus, transmission or reception of voice, images or other data being the principal function of the device, sub-heading 8517 62 90 appears to be the most appropriate classification for Fire TV Cube.
IR (Infra-Red) Extender Cable - HELD THAT:- As per the application, the extender cable allows Fire TV Cube to control devices that are hidden, out of sight or are far from the range of Fire TV Cube; the user can connect it by plugging the IR Extender Cable into Fire TV Cube and place the other end of it close to the device that the user wishes to control. The Amazon website describes the item as : (t)his replacement IR Extender Cable for Fire TV Cube and Fire TV Blaster lets you control devices in hard-to-reach locations such as behind closed doors, in a cabinet or closet; when connected to Fire TV Cube or Fire TV Blaster, experience Alexa far-field voice control over your entertainment devices even if they are out of sight; and is easy to use - simply plug it into the IR port on Fire TV Cube or Fire TV Blaster, no additional set-up required.
In the light of the submissions and product description available on the Amazon website, the device appears to act as an accessory of Fire TV Cube, which is in the form of a cable with connector jack at one end and IR blaster at the other end. The cable carries IR codes in the form of electrical signals to the IR blaster where IR signals are generated and transmitted to entertainment devices to be controlled. In the light of the foregoing, in case this extender cable is presented along with the main device Fire TV Cube, then it also merits classification under Heading 8517 62 90 - However, in the event that IR Extender Cable is imported independently of the Fire TV Cube, it would need to be considered as a machine having independent function. Given the functions performed by the Extender Cable, it could have been considered for classification under Heading 8537. However, in view of Chapter Note 8, which provides that “Heading 8537 does not include cordless infrared devices for the remote control of television receivers or other electrical equipment (Heading 8543)”, the Heading 8543 is turned up, which covers Electrical machines and apparatus having individual functions, not specified or including elsewhere in this Chapter, and more specifically residual sub-heading 8543 70 99.
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2021 (8) TMI 1326
Application filed by the Resolution Applicant seeking direction against the RP and CoC - present Resolution Applicant seeks indulgence through this application to allow him to submit latest revised plan and revised after the rejection of previous plan - HELD THAT:- Let the plan be submitted to the RP within three days. Learned Counsel for the RP states that CoC is going to held the meeting tomorrow.
This applicant’s plan cannot be consider on such short notice. Hence, the CoC is directed to defer it’s meeting to three days. Let meeting be held on 13th August, 2021 or any suitable date nearby and let the both plans be placed before CoG for its consideration.
Application disposed off.
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2021 (8) TMI 1325
Decree of possession of the tenanted premises - recovery of arrears of rent alongwith interest - recovery of mesne profits/damages alongwith interest - HELD THAT:- In C. VENKATA SWAMY VERSUS H.N. SHIVANNA (D) BY L.R. & ANR. ETC. [2017 (12) TMI 1843 - SUPREME COURT], the Supreme Court held that right to First Appeal against a decree under Section 96 CPC is a valuable legal right of the litigant. The jurisdiction of the First Appellate Court is very wide and all findings of fact and/or law can be assailed by the Appellant. It is the duty of the First Appellate Court to appreciate the entire evidence and arrive at its own independent conclusion, for reasons assigned, either of affirmance or difference.
Provisions of Order XLI Rule 31 CPC mandate that the Appellate Court shall state the points for determination and the 'reasons' for the decision. It has been held in several judgments that it is the bounden statutory duty of the First Appellate Court to give reasons for the decision, which form the soul of the judgment. In the process of adjudication, it is implicit that reasons are clearly spelt out as the term 'adjudicate' is not an abstract term and while deciding the issues arising for determination, the judgment must reflect the mind of the Court and the factors that weighed as well as the law applied, in order to come to a conclusion that it does. Without any discussion or reasons in the Appellate order, the Appellant would never know why the Court disagreed with his contentions and concurred with the judgment impugned.
The Supreme Court in the landmark decision of SANTOSH HAZARI VERSUS PUROSHOTTAM TIWARI [2001 (2) TMI 131 - SUPREME COURT] held that the judgment of an Appellate Court must reflect its conscious application of mind and record the findings supported by the reasons on all the issues arising along with the contentions put forth and pressed by the parties for decision of the Appellate Court.
In the present case, there can be no two opinions that the First Appellate Court has dismissed the first appeal and concurred with the judgment of the Trial Court, both on facts and law. However, going by the dictum of the Supreme Court, the First Appellate Court was required to give its own reasoning on the questions of law raised, based on the facts and circumstances before it.
It is crystal clear from a mere reading of the impugned judgment that except for citing the submissions made by the parties, the findings and the conclusions of the Trial Court, the First Appellate Court has not dealt with the contentions raised by the Appellant and has not even given any 'reasons' for concurring with the findings of fact and law given by the Trial Court as also the reasons why the contentions of the Appellant challenging the judgment of the Trial Court were devoid of merit - Whilst it is a matter of record that the suit in question was instituted by Respondent No. 1 in 2015 and remanding the matter back to the First Appellate Court would cause some delay in deciding the disputes between the parties and learned counsels have also argued on the merits of the matter, however, this Court has no option on account of the limited jurisdiction to entertain and decide only substantial questions of law and given the law that the issues of facts and law can only be tested by the First Appellate Court.
This Court cannot re-appreciate the evidence or consider the arguments based on pleadings and questions of law which are not substantial. Moreover, that would deprive the Appellant of valuable right of her case being tested by the First Appellate Court on the anvil of questions of facts and law - once this Court finds that the judgment of the First Appellate Court is bereft of reasons and does not even deal with the contentions of the Appellant including the fact that the judgments relied upon are not even referred to, this Court has no option but to remand the matter back to the First Appellate Court for hearing and deciding afresh.
The impugned judgment and decree dated 23.01.2021 passed by the First Appellate Court is set aside. The case is remanded back to the First Appellate Court for hearing and deciding the First Appeal afresh, in accordance with law - Appeal allowed by way of remand.
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2021 (8) TMI 1324
Violation of principles of natural justice - disinclination of petitioner for availing opportunity of personal hearing - penalty proceedings - failure to pay service tax - HELD THAT:- With an averment that the petitioner has failed to pay the service tax, show cause notice (Ext.P1) was issued, to which the petitioner has tendered reply at Ext.P2. On some occasion, the assessment proceedings were deferred at the request of the petitioner. Ultimately, the proceedings were fixed for personal hearing of the petitioner on 24-11-2020. By the notice of hearing dated 11-11-2020 (Ext.P4), the petitioner was communicated date of hearing as 24-11-2020. He was directed to appear in person or through his authorised representative.
Bare reading of communication at Ext.P5 sent by the petitioner to the respondent makes it clear that the petitioner expressed his disinclination for availing opportunity of personal hearing and requested the authority to drop the penal proceedings against the firm - In this view of the matter, the records show that the petitioner was afforded opportunity of personal hearing in the matter which the petitioner declined to avail. In this view of the matter, it cannot be said that the impugned order suffers from viz. of violation of principles of natural justice. The impugned order is an appealable order.
Petition dismissed.
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2021 (8) TMI 1323
Seeking release of applicant on Interim Bail - HELD THAT:- Considering the fact that the co-accused (Neeraj Singal) has been released on interim bail in terms of the order dated 04.09.2018 in Criminal Appeal No. 1114 of 2018 and connected case, the release of the applicant herein (Nitin Johari) on interim bail is directed, on terms and conditions to be specified by the Trial Court in connection with C.C. No. 770/2019 pending before the Ld.
The application for grant of interim bail is allowed.
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2021 (8) TMI 1322
Discount on issue of ESOP - allowable deduction in computing the income under the head profits and gains of the business or not? - as per HC assessee has incurred a definite legal liability and on following the mercantile system of accounting, the discount on ESOPs has rightly been debited as expenditure in the books of accounts - HELD THAT:- Issue notice.
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2021 (8) TMI 1321
Disallowance u/s. 36(1) - interest on housing loans - HELD THAT:- As decided in own case [2019 (12) TMI 1600 - ITAT DELHI] assessee stated that 62.75% in on account of interest on long term housing loan and worked out applying that percentage on the total business income calculated a sum of Rs. 549834543/- pertaining to long term housing loan and computed deduction @20% of Rs. 10.99 crores as deduction.
AO changed the above ratio from 62.75 % to 55.89% as he considered the total receipt of business for the purpose of working out proportion. In the present case the methodology adopted by the assessee is consistently followed for last eight years. Same was accepted by the revenue without any objection.
The only issue is with respect to how the profit of the business for the purpose of long term housing finance shall be worked out. The only issue is that assessee is computed with respect to the total income with respect to the interest income whereas the Id AO has applied the above ratio to the total receipt. When the method has been consistently accepted for the above year we do not find any reason to defer from that. In view of this we do not find any infirmity in allowing the assessee claim of deduction u/s 36(1 )(viii) of the Act applying the ratio of 62.75%. In the result we do not find any merit in ground No. 1 of the appeal.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- CIT(A) followed the binding precedent in the case of Joint Investments (P)Ltd. vs. CIT, [2015 (3) TMI 155 - DELHI HIGH COURT] and deleted the addition. It is not established before us that the finding of fact by the ld. CIT(A) is in any way wrong. We, therefore, are of the opinion that in view of the binding precedent followed by the ld. CIT(A), findings of CIT(A) cannot be found fault with. Ground No. 2 of the Revenue’s appeal is accordingly dismissed.
Deduction in respect of education cess and higher and secondary education cess paid during the year - HELD THAT:- As aR places reliance on the decision in the case of Sesa Goa Ltd. [2020 (3) TMI 347 - BOMBAY HIGH COURT] and prayed that relief may be granted. DR submitted that this plea was not taken before either of the authorities below and therefore, the facts need to be verified. Ld. AR reports no objection. Recording the same, we leave the issue open to be adjudicated before the Assessing Officer. For this purpose, we remand the issue to the file of Assessing Officer for verification and taking a view in accordance with law.
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2021 (8) TMI 1320
Recovery of drawback amount under Rule 16 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 - shipping bills were not challenged by the Department - levy of penalty on the Company as well as the Director under Section 114(iii) of the said Act - period April 2008 and May 2008 - whether the Department could dispute the grant of DEPB and Drawback benefit in the facts of the present case? - HELD THAT:- Reliance placed in the case of M/S JAIRATH INTERNATIONAL AND ANR. AND RAJESH DHANDA VERSUS UNION OF INDIA AND ORS. [2019 (10) TMI 642 - PUNJAB AND HARYANA HIGH COURT]. In the above mentioned case, the DRI issued Show Cause Notices on the basis of investigation initiated by it to allege that the assessee exporter had fraudulently obtained drawback amount. The DRI conducted search at the various premises of the exporters on the basis of which the DRI alleged that the drawback amount was fraudulently obtained on the basis of willful wrong declaration with ulterior motive to defraud the Revenue. Demand proposed in the Show Cause Notice was confirmed against which the assessee approached the High Court. The High Court, while relying on the judgements of the Hon’ble Supreme Court, held that the Department has no power to reassess a shipping bill which was duly assessed by proper officer at the time of export of goods to dispute the export benefit already allowed to the assessee without challenging the shipping bills.
In the case of CENTURY KNITTERS (INDIA) LTD. AND ORS. VERSUS UNION OF INDIA AND ORS [2019 (10) TMI 804 - PUNJAB AND HARYANA HIGH COURT], the High Court took the same view as held in the case of Jairath International, where it was held that inspite of availability of alternative remedy available under 1962 Act, writ petition is maintainable in view of involvement of pure questions of law as well jurisdiction and law enunciated by Hon’ble Supreme Court and followed by this court time and again.
Since the legal position stands already decided by the Hon’ble High Court as well as earlier decisions of this Tribunal, the impugned adjudication orders cannot be legally sustained and hence, the same are set aside - appeal allowed - decided in favor of appellant.
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2021 (8) TMI 1319
Reopening of assessment u/s 147 - Mandation to consider objections against reopening filled by assessee - HELD THAT:- Undisputedly, the said notice came to be issued by respondent no.1, Assessing Officer, Income Tax, Special Range, Kanpur. In response to that notice, petitioner filed return through e-mode on 26.05.2021. Subsequently, on its further request, the petitioner was supplied the "reasons to believe", to initiate the re-assessment proceedings by email communication along with the approval order issued by the Principal Commissioner, under section 151 of Income Tax Act.
In response to the same, the petitioner has filed its written objection to the initiation of the re-assessment proceeding, vide objection dated 28.06.2021 filed on 29.06.2021 before the respondent no.1. Thus, the reassessment proceedings are stated to be pending.
Undisputedly, in view of the decision of the Supreme Court [2002 (11) TMI 7 - SUPREME COURT] as regularly followed by this Court by way of procedural principle, the Court does not directly entertain the challenge to re-assessment proceeding before disposal of the objection filed by the assessee to the initiation of such re-assessment proceeding. Thus the principle enunciated by the decision of Supreme Court in the case of GKN Driveshafts (India) Ltd. [2002 (11) TMI 7 - SUPREME COURT] has been consistently applied by this Court.
In view of above, we consider it proper that the assessee's objection dated 28.06.2021 filed on 29.06.2021 may be decided by its assessing authority before proceeding to issue any further notice to conduct the re-assessment proceeding.
Order:
Within one week from today, the petitioner shall file a physical copy of this order along with covering application before the respondent no.1 to inform him about this order and the compliance to be made.Upon such compliance being made by the petitioner, a notice may be issued by the concerned authority within a week thereafter. It may be served on the petitioner fixing a date to decide the objection dated 28.06.2021. At least two weeks notice may be given before the date fixed.
On the date fixed, the objections may be decided either upon physical hearing or through virtual proceedings, through online mode.
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2021 (8) TMI 1318
Scope of 'judgement' and 'order' - Default in payment of monthly rent for more than two months consecutively - eviction - recovery of arrears of rent and mesne profits - Order XII Rule 6 of CPC - whether the application under Order VI Rule 17 of CPC could have been filed after the learned Trial Court had heard arguments on the application under Order XII Rule 6 of CPC, it would be useful to understand what is a “judgment” and what is an “order”?
HELD THAT:- An “order” is something that does not result in a decree or, therefore, a final conclusion of a matter, though a “judgment” may include an “order”. The term “judgment” indicates a judicial decision given on the merits of the disputes brought before the Court. It determines the rights of the parties finally. In contrast, an “order” may not be so but could be an interlocutory one, if it does not determine or decide the rights of the parties once and for all. Thus, there are, broadly speaking, two kinds of “orders”, one, that is in the nature of a final order and the other not determining the main issue with any finality. If such orders have been passed to help with the progress of the case, they may dispose of a specific question finally, but without finally disposing of the dispute. There is yet another category of “orders”, which, if decided one way, would result in the determination of the rights of the parties finally, but, if determined in any other way, would result in the continuation of the proceedings. Such orders have been described as “intermediate” or “quasi final orders”.
Order XII relates to “admissions” and Rule 6 provides that the court may “at any stage” of the suit, either on the application of any party or on its own motion, without waiting for a determination of any other question between the parties, make such order or give such judgment as it may think fit. Where a judgment is pronounced, a decree is to be drawn up. In other words, Order XII Rule 6 of CPC does not per se provide for a final determination of the rights between the parties, though it may result in such a final determination.
It is the considered view of this Court that since the purpose of Order VI Rule 17 of CPC is to allow either party, at any stage, to alter or amend their pleadings in such manner as are necessary for the purpose of determining the real questions/controversies between the parties, subject to satisfying the court of due diligence, and in view of the fact that the power of the court under Order XII Rule 6 of CPC is discretionary, and could result in the final disposal of the matter, permanently debarring the defendant from exercising his right to defend such a suit, the application under Order VI Rule 17 of CPC should be considered on merits before the power under Order XII Rule 6 of CPC is exercised by the Trial Courts.
This Court finds no error in the decision of the learned Trial Court to take up the application under Order VI Rule 17 of CPC for hearing and disposal despite having already heard the parties on the application under Order XII Rule 6 of CPC - Petition dismissed.
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2021 (8) TMI 1317
Deduction u/s 80IB - Unaccounted money, found during the search proceedings and explained as on money received, are eligible for deduction under Section 80IB(10) - transactions entered into, with the buyers of flats, are eligible for deduction, even though there is violation of the sub-Sections(e) and (f) of Section 80IB(10), on the ground that these transactions were entered into before the amendments to sub-Section (3) and (f) of Section 80IB(10) - HC allowed assessee appeal - HELD THAT:- Leave granted.
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