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2022 (2) TMI 1397
Deemed dividend u/s.2(22)(e) - AO treated the unsecured loan as deemed dividend - whether it is sine qua non that the assessee company, which is not a registered shareholder, obtains any loan from companies in which its shareholder also holding substantial share may brought under the scanner of deemed dividend? - HELD THAT:- Coming to the case on hand, admittedly the assessee company is not holding any shares or rights of M/s. JP Iscon Ltd. Thus considering the above discussion and judgment of Hon’ble jurisdictional court in case of Mahavir Inductomelt [2017 (1) TMI 1159 - GUJARAT HIGH COURT] AO was not justified in invoking the provision of section 2(22)(e) - CIT(A) rightly deleted the addition made by the AO.
We note that in the case which arose before T. Abdul Wahid & Co.[2020 (9) TMI 977 - MADRAS HIGH COURT] the facts were that the assessee, a partnership firm, received unsecured loan from a company and the AO opined that one of partners of assessee-firm, being also a shareholder in the said company, holding 26.25 per cent shares had substantial interest in the firm and, consequently, concept of deemed dividend under section 2(22)(e) of the Act would apply. The High Court, on appeal by the Revenue, held that since payment had been made to the assessee, a partnership firm and assessee was not a shareholder in company, it was neither a loan nor an advance, but a deferred liability and, thus, section 2(22) (e) of the Act would not apply.
The decision of Gopal and Sons (HUF) [2017 (1) TMI 331 - SUPREME COURT] was distinguished by the Madras High Court after observing that "as in the case before the Supreme Court the assessee was the beneficial shareholder, whereas on facts, it was not so, in the assessee's case. Admittedly, the assessee in the case on hand was neither the beneficial owner of the shares nor registered owners of the shares. Accordingly, in our humble understanding, the principles laid down by the Hon’ble Supreme Court in the case of Gopal and Sons (HUF) [2017 (1) TMI 331 - SUPREME COURT] are not applicable in the given facts and circumstances. Thus the ground of appeal raised by the Revenue is hereby dismissed.
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2022 (2) TMI 1396
Money Laundering - Predicate offence - Conspiracy for misappropriation of money - misuse of important documents - whether it can be said that there is no cognizable offence disclosed and that no further investigation is necessary and, therefore, the FIR needs to be quashed and/or whether the FIR can be quashed on the premise that it is filed to wreak vendetta and is mala fide?
HELD THAT:- Once it is revealed in the investigation that a huge sum of cash was withdrawn on vouchers and for a corresponding period, substantial deposits have been made in the personal Accounts of those, who were in charge of the Trust, i.e. Applicant Ashok Gandole and others, the matter requires investigation as during investigation, the source of Rs.7,00,00,000/- would be traced and, therefore, at this stage, it cannot be said that there is nothing to investigate because the Auditor has made a statement before the Enforcement Directorate.
As regards the contention that the Respondent No.2 is on the run and is avoiding investigation by the Enforcement Directorate, the learned Senior Advocate for Respondent No.2 submitted that Respondent No.2 has taken exemption from the Enforcement Directorate and thereafter, no summons have been issued by the Enforcement Directorate, and it is entirely incorrect to state that the Respondent No.2 is on the run. Except asserting this orally, nothing further is pointed out to us by the Applicants that Respondent No.2 is avoiding investigating by the Enforcement Directorate. The Enforcement Directorate in the complaint itself has stated that it has not drawn any conclusion regarding the role of Respondent No.2, and further investigation is going on.
As regards the facts at hand are concerned, Applicant Ashok Gandole was in-charge of the affairs of the Trust. Other Applicants have been shown as connected with him. The Trust in question conducted various Colleges, which were grant-in-aid, and public money was received. The Investigating Agency has stated that money was siphoned off from the Accounts of the Trust on cash withdrawal. Applicant Ashok Gandole and others are alleged to have deposits in their personal Accounts and have substantial properties. Therefore, at this stage, when the investigation is in progress, and all facts are not before the Court, the Court will have to allow the Police Authorities to carry on the investigation as cognizable offences stand disclosed.
Once it is concluded that the FIR discloses cognizable offence and that investigation into this crime is necessary, and no case is made out for exercise of power under Section 482 of the Code, then direction that no coercive steps be taken cannot be continued. The Applicants have a remedy to apply for anticipatory bail under Section 438 of the Code, and if the court is satisfied, the Applicants can be released on anticipatory bail and, therefore, the Applicants are not remediless. To conclude, no case is made out by the Applicants to quash the concerned FIR.
Application dismissed.
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2022 (2) TMI 1395
Stay of demand - condition imposed that unless the petitioner/assessee makes a payment of 20% of the demand, the petitioner/assessee is not entitled for stay - HELD THAT:- The judgment of the Hon'ble Supreme Court LG Electronics India Private Limited 2018 (7) TMI 1905 - SC ORDER] has been relied upon by the learned Judge in the said order in Queen Agencies case [2021 (4) TMI 609 - MADRAS HIGH COURT] as stated that definite 20% need not be imposed in each and every case, even a lesser percentage can be imposed while passing an order under Section 220(6) of the Act.
If we take the said proposition this Court feels that, if at all the petitioner is having any grievance, that may be only to a limited extent to state that, 20% as has been sought for through the impugned order may be reduced to a lesser one. If it is a lesser one, we cannot once again remand the matter back to the respondent i.e., the assessing authority to use his discretion to fix a lesser percentage of the demanded amount to be paid by the petitioner/assessee.
In this context, since the demand under the assessment which is in question before the appellate authority is Rs. 12,86,72,780/-, which is comparatively a huge sum, instead of 20% demand by citing the Department Instruction No.1914 dated 29.02.2016, the assessing authority could have passed an order by making a demand of some lesser percentage.
Considering all this Court feels that, instead of remanding the matter back to the respondent for re-consideration, a direction can be given to the petitioner/assessee to make a payment of at least 15% of the demand and on that condition, the petitioner would be entitled to get a stay of the assessment order which is under appeal before the appellate authority. If such a direction is given as an interim arrangement, this Court feels that, the ends of justice would be met.
Thus dispose of this writ petition with the following order.
a. That the impugned order is modified to the effect that, instead of 20%, the petitioner/assessee shall pay 15% of the demand within a period of four weeks from the date of receipt of a copy of this order.
b. On this condition, there shall be an order of stay of the assessment order till the disposal of the appeal filed before the second respondent.
c. It is made clear that, within four weeks time if the payment of 15% of the demand as directed above has not been paid or complied with by the petitioner/assessee, the order of stay shall stand automatically vacated without any further reference to this Court.
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2022 (2) TMI 1394
Direction to furnish security by way of cash deposit - money decree - the judgment-debtor has since date of the decree though had means to pay the amount of the decree for substantial part thereof has neglected to pay the same - Order XXI Rule 40(b) CPC - HELD THAT:- The present decree is money decree. The court below has noticed the conduct of the judgment-debtor reflecting his unwillingness to satisfy the decree. On the basis of the factual material before it, the conclusion is drawn by the court below that though the judgment-debtor has means to satisfy the decree but has neglected in discharging his obligation. Upon assessing the facts and conduct of the judgment-debtor the Executing Court has duly found that they are indicative of unwillingness and avoidance on part of the judgment-debtor to pay the decreetal amount despite availability of means with him to pay. The Court has considered therefore that order for furnishing security deserved to be passed. The view taken by the court below is reasonable on facts and in law.
When there are circumstances suggesting that despite possessing the means, the judgment-debtor has neglected and refused to pay the decreetal amount, furnishing of security by judgment-debtor is warranted. The security is considered proper to be solicited by the judgment-debtor to ensure that the rights of the decree holder are not defeated.
In exercise of powers Order XXI Rule 40(b) of the Code of the Civil Procedure, 1908, requires the judgment debtor to furnish security and sum of Rs. 12,89,19,458/- which is the equivalent amount to the worth of the book value of shares in the four Australian companies held by the judgment-debtor. The impugned order is proper and reasonable in law as such in directing the judgment-debtor in furnish security - while no ground exists to interfere with the said order requiring the judgment-debtor to furnish the security to the aforesaid extent, what becomes conspicuous in the impugned order that the said security is directed to be furnished by way of cash deposit with the Registry of this Court.
While maintaining the impugned order as well as the reasons supplied by the Court in so far it requires the judgment-debtor to furnish security, the direction in the order is modified to the limited extent that the judgment-debtor petitioner herein may furnish the security for the sum of Rs. 12,89,19,458/- by way of bank guarantee equal to the said amount - Application dismissed.
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2022 (2) TMI 1393
Addition u/s 68 - unexplained unsecured loans obtained by the assessee - tribunal confirmed the view of the CIT (Appeals) that the additions made by the assessing officer were not sustainable - HELD THAT:- As observed that the companies through which the assessees had indulge into bogus accommodation entries, were not managed or controlled by Mr. Anand Sharma, who was supposed to be the kingpin. As it was observed that there was no link found in the documents and the financial statements of the companies concerned.
As noted that the assessee had produced the affidavit and the notices issued by the AO u/s 131 and 133(6) of the Act which was duly complied by the creditors. The statement of director of Ms. Royal Crystal Dealers Pvt. Ltd. was also recorded by the assessing officer while the director has confirmed the transaction of loan. The tribunal further observed that the assessment order was passed solely on the report of the Investigation Wing, Kolkata which merely contained the narration of the statements recorded during the investigation and the assessing officer had in his possession only the statement of Anand Sharma.
Tribunal was of the opinion that the assessing officer could not have made the additions in the hands of the assessee on the basis of the Investigation Wing at Kolkata to which the assessee was not privity to. The assessee was also not granted opportunity to cross-examine the persons whose statements were recorded by the investigation wing. Decided against revenue.
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2022 (2) TMI 1392
Classification of goods - Fuel &oil stored in the Engine Room of the vessel - to be classified under 89.08 or 27.10? - HELD THAT:- It is found that on this issue much water has flown. There are contrary judgments of this Tribunal on this issue. However, the jurisdictional High Court in the case of PRIYA HOLDING (P) LTD VERSUS COMMISSIONER OF CUSTOMS, PREVENTIVE [2012 (11) TMI 532 - GUJARAT HIGH COURT] decided the issue in the favour of the assessee in as much as it was upheld that the Fuel/oil stored in the tanks in the Engine Room should be classified under CTH 89.08. Accordingly, this judgment of the Hon’ble Gujarat High Court is binding and in force.
The Fuel and oil stored in the Tanks in the Engine room of the vessel is classifiable under CTH 89.08 - impugned order set aside - appeal allowed.
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2022 (2) TMI 1391
Smuggling - Absolute Confiscation of seized Gold - prohibited goods - power of the adjudicating authority in terms of Section 125 of Customs Act, to confiscate absolutely - HELD THAT:- Sub-section (1) of Section 125 provides that whenever confiscation of any goods is authorized by the Act, the officer adjudging it, the importation or exportation of goods which is prohibited may and shall in other cases offer an option to pay fine in lieu of confiscation. It is in this context that the counsel for the department has argued that the case falls under the first part of sub-section (1) of Section 125.
In a recent judgment dated 17.02.2022 Division Bench of this Court [2022 (2) TMI 1081 - RAJASTHAN HIGH COURT] has considered a very similar issue. It was a case in which the assessee had attempted to smuggle gold by concealing it in his handbag and not declaring the same upon arrival at the international airport. The authorities had provided absolute confiscation of gold and also imposed penalties. In the context of interpretation of Section 125 of the Customs Act, this Court held Whenever confiscation of goods is authorized under the Act, as per sub-section (1) of Section 125 the adjudicating officer has a discretion to offer redemption fine in lieu of confiscation in case of goods importation or exportation whereof is prohibited. In all other cases there is a statutory mandate on the adjudicating officer to offer such redemption fine. If the interpretation of Section 112 and 125(1) is not reconciled as above, this latter portion of sub-section (1) of Section 125 which covers all cases except where the importation or exportation of the goods is prohibited, would become otiose.
Attention drawn to the judgment of the Madras High Court in the case of COMMISSIONER OF CUSTOMS (AIR) VERSUS SAMYNATHAN MURUGESAN & CESTAT [2009 (4) TMI 77 - MADRAS HIGH COURT] in which view taken was slightly different. It is pointed out that the said decision was also upheld by the Supreme Court when the SLP was dismissed.
Petition dismissed.
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2022 (2) TMI 1390
Addition u/s 68 - unexplained share capital and share premium assessee company could not establish the genuineness of transaction - manadation of recording satisfaction - scope of amendment - CIT(A) deleted the addition - HELD THAT:- We note that with effect from assessment year 2013-14 section 68 has been amended to provide that if a closely held company fails to explain the source of share capital, share premium or share application money received by it to the satisfaction of the A.O., the same shall be deemed to be the income of the company u/s 68 of the Act.
The said amendment has been held to be prospective and not retrospective in Gagandeep Infrastructure Private Limited [2017 (3) TMI 1263 - BOMBAY HIGH COURT].
In a recent decision of Hindusthan Tea Trading Co. Ltd.. [2003 (3) TMI 53 - CALCUTTA HIGH COURT] it was held that the power of the assessing officer u/s 68 is not an absolute one. It is subject to his satisfaction where an explanation is offered. The power is absolute where the assessee offers no explanation.
The satisfaction with regard to the explanation is in effect an in-built safeguard in section 68 protecting the interest of the assessee. It provides for an opportunity to the assessee to explain the nature and source of the fund. Once it is explained, it is incumbent on the assessing officer to consider the same and form an opinion whether the explanation is satisfactory or not.
We are of the view that in assessee`s case the three ingredients of the Section 68 are satisfied to a reasonable extent, by the assessee. That being so, we decline to interfere in the order of ld CIT(A), his order on this issue is hereby upheld and grounds of appeal raised by the Revenue is dismissed.
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2022 (2) TMI 1389
Maintainability of appeal before HC on low tax effect - Tribunal holding that income of brokerage from dealing in shares in client account were to be allowed to the set off against speculation loss treated under Section 73, profit of sale of shares to be treated as Long Term Capital Gain and Short Term Capital Gain instead of normal business income, disallowance of interest expenditure ought to have been made under Rule 8D(2)(ii) and only dividend yielding investment are to be taken into account while calculating the disallowance under Section 14A - assessee submitted that the tax effect for the assessment year under consideration is below the threshold limit fixed by the CBDT Circular - HELD THAT:- As our attention was drawn to the Income Tax Computation Form appended to the assessment order from which we find that the total income computed is Rs. 1,04,65,829/- and the tax payable thereon in terms of the order of the assessing officer is nearly Rs. 35 lacs. Therefore, the appeal cannot be pursued by the revenue on the ground of low tax effect. Revenue appeal dismissed.
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2022 (2) TMI 1388
Re-auction of the entire properties by fixing the upset price higher than what has been fixed earlier - Sale in favour of highest bidder set aside - representations made by third parties, who did not even participate in the auction proceedings - HELD THAT:- Once the Appellant was found to be the highest bidder in a public auction in which 45 persons had participated and thereafter when the sale was confirmed in his favour and even the sale deed was executed, unless and until it was found that there was any material irregularity and/or illegality in holding the public auction and/or auction/sale was vitiated by any fraud or collusion, it is not open to set aside the auction or sale in favour of a highest bidder on the basis of some representations made by third parties, who did not even participate in the auction proceedings and did not make any offer.
Reliance placed in the case of JASBHAI MOTIBHAI DESAI VERSUS ROSHAN KUMAR HAJI BASHIR AHMED [1975 (12) TMI 167 - SUPREME COURT] where it was held that despite adequate opportunity, if a person has not lodged any objection at an appropriate stage and time, he could not be said to have been in fact, grieved - It is also required to be noted that the sale was confirmed in favour of the Appellant by the Commissioner, Endowments Department after obtaining the report of the Assistant Commissioner. Therefore, in the aforesaid facts and circumstances of the case, the High Court ought not to have ordered re-auction of the land in question after a period of 23 years of confirmation of the sale and execution of the sale deed in favour of the auction purchaser by observing that the value of the property might have been much more, otherwise, the object and purpose of holding the public auction and the sanctity of the public auction will be frustrated. Unless there is concrete material and it is established that there was any fraud and/or collusion or the land in question was sold at a throw away price, the sale pursuant to the public auction cannot be set aside at the instance of strangers to the auction proceeding.
n the present case, though Shri Jagat Kumar immediately after finalising the auction stated that he is ready and willing to pay a higher price, however, subsequently, he backed out. If the auction/sale pursuant to the public auction is set aside on the basis of the such frivolous and irresponsible representations made by such persons then the sanctity of a public auction would be frustrated and the rights of a genuine bidder would be adversely affected.
The impugned judgment and order passed by the Division Bench of the High Court is unsustainable and deserves to be quashed and set aside and is accordingly quashed and set aside - Appeal allowed.
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2022 (2) TMI 1387
Reopening of assessment u/s 147 - Scope of Section 148A as newly inserted - Comparison between old and new provisions for reassessment - Individual identity of Section 148 as prevailing prior to amendment - applicability of the newly inserted provisions of Section 148A and the amendments brought inter alia w.e.f. 1.4.2021 - identity of Section 148 as prevailing prior to amendment and insertion of section 148A - HELD THAT:- As decided in SUDESH TANEJA WIFE OF SHRI CP TANEJA [2022 (1) TMI 1212 - RAJASTHAN HIGH COURT] Under no circumstances the extended period available in clause (b) of sub-section (1) of Section 149 which we may recall now stands at 10 years instead of 6 years previously available with the revenue, can be pressed in service for reopening assessments for the past period. This flows from the plain meaning of the first proviso to sub-section (1) of Section 149. In plain terms a notice which had become time barred prior to 01.04.2021 as per the then prevailing provisions, would not be revived by virtue of the application of Section 149(1)(b) effective from 01.04.2021. All the notices issued in the present cases are after 01.04.2021 and have been issued without following the procedure contained in Section 148A of the Act and are therefore invalid.
Also held by virtue of notifications dated 31.03.2021 and 01.04.2021 issued by CBDT substitution of reassessment provisions framed under the Finance Act, 2021 were not deferred nor could they have been deferred. The date of such amendments coming into effect remained 01.04.2021.
In the result we find that the notices impugned in the respective petitions are invalid and bad in law. The same are quashed and set aside. The learned Single Judge committed no error in quashing these notices.
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2022 (2) TMI 1386
Seeking withdrawal of SLP - settlement agreement entered into between parties - HELD THAT:- Three settlement agreements all dated 21.01.2022 have been entered into with the three financial creditor who are petitioners in the present petition - The corporate debtor has agreed to settle the outstanding between them in terms of the settlement agreements in which future payments are also envisaged the settlement agreements are taken on record and shall form a part of this order.
The undertakings given shall be treated as undertakings given to the court. CP No. 1621/2018 shall stand dismissed as withdrawn in accordance with the three settlement agreements.
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2022 (2) TMI 1385
Admission of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - HELD THAT:- The figure of Rs.1.35 Crore which was mentioned in the Reply was reflected in the oral submission made by the Counsel for the Corporate Debtor which has been noted by the Adjudicating Authority. There being financial debt due which was an admitted fact, there are no error in the impugned judgment of the Adjudicating Authority by which Application has been admitted. Counsel for the Corporate Debtor submits that he does not admit the amount of default. An amount of Rs. 1.35 Crore having been admitted, the Application was rightly admitted.
It is open for the Corporate Debtor to enter into settlement and on the basis of settlement, if any, may file an Application under Section 12A before the Competent Authority i.e. Adjudicating Authority for passing appropriate order. It is made clear that the observations made in this order are without prejudice to the rights and contentions of the parties.
Appeal dismissed.
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2022 (2) TMI 1384
Reopening of assessment - HELD THAT:- As the order passed by this court [2022 (1) TMI 543 - BOMBAY HIGH COURT] will squarely cover this petition as well and, therefore, this petition can also be disposed in those terms.
Petition accordingly allowed. Notice dated 6th March 2019 issued u/s 148 of the Income Tax Act 1961 for A.Y.-2012-2013 and the order disposing of the objections are hereby quashed and set aside.
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2022 (2) TMI 1383
Condonation of delay of 2004 days in filing the appeal - applicant has stated that due to incorrect advice of the Consultant, instead of filing the appeal before the Tribunal, the Revision Application was filed before the Government of India in terms of Section 129A read with Section 129DD of the Custom Act 1962 - HELD THAT:- Consequent upon rejection of the application by the Revisionary Authority, the applicant has filed the present appeal before the Tribunal along with application for condonation of delay within the reasonable time. Under the facts and circumstances of the case, the delay in filing the appeal can be condoned, in the interest of justice. Accordingly, miscellaneous application filed by the applicant is allowed.
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2022 (2) TMI 1382
Disallowance u/s. 14A - assessee earned dividend income which was claimed as exempt u/s. 10 (34) / 10 (35) - Suo moto disallowance made by assessee - HELD THAT:- This Tribunal in A.Y. 2010-11 [2022 (7) TMI 374 - ITAT DLEHI] has considered a similar disallowance as held for the purpose of computing the disallowance u/s. 14A of the Act only such investments which yielded exempt income during the year should be taken into consideration, but not the entire investment.
Going by that principle, we find that during the year, the investment in Karnataka Bank Ltd. alone yielded dividend income. Tribunal accepted the contention of the assessee as far as the investment in shares of Karnataka Bank Ltd. was concerned. It is, therefore, clear that no disallowance could be made towards interest expense u/r. 8D(2)(ii) of the rules.
Disallowance of SAR expenses written back in the current year - HELD THAT:- As decided in [2020 (9) TMI 141 - ITAT DELHI] the issue-in-dispute of SAR expenses as revenue in nature is covered in favour of the assessee. Respectfully following the above decisions, we set aside the order of the learned CIT(A) and delete the addition.
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2022 (2) TMI 1381
Dishonour of Cheque - successive presentation of the cheque within the period permitted, when the cheque was earlier returned for the reason "account closed" is legally permissible? - HELD THAT:- While dealing with the cheque returned on the ground that the "account closed", it was observed NEPC MICON LTD. VERSUS MAGMA LEASING LTD. [1999 (4) TMI 659 - SUPREME COURT] that "account is closed" would mean that the cheque is returned as unpaid on the ground that "the amount of money standing to the credit of that account is insufficient to honour the cheque". It is observed in M/S LAXMI DYECHEM VERSUS STATE OF GUJARAT & ORS. [2012 (12) TMI 106 - SUPREME COURT] that the reasons for dishonour of cheque "as account closed", "payment stopped", "referred to drawer" are only species of the genus that the amount of money available in the account is insufficient. Therefore, these grounds for return would constitute a dishonour within the meaning of Section 138 of the Act.
It is no doubt, a cheque may be presented second time. Validity of second presentation depends on facts and circumstances of the case. The judgment in MSR Leathers V.S. Palaniappan and another [2012 (10) TMI 232 - SUPREME COURT] deals with the case where the cheque was returned for the reason "not arranged funds for". We have the case where the cheque was returned for the reason "account closed". The aforesaid judgments relied by the counsel appearing for the respondent do not deal with the situation where a cheque was presented again, when the earlier presentation was dishonoured on the ground "account closed".
In the case before hand, the first presentation of cheque and return on the ground of "account closed" was not even mentioned in the statutory notice and the complaint and it was not informed to the petitioner and petitioner had never asked the respondent to represent the cheque again.
In the case before hand the cheque was returned for the reason that "account closed" on 03.02.2016 when it was presented for the first time on 02.02.2016. Suppressing this return, cheque was presented again on 28.03.2016 and it was again returned for the same reason "account closed". It is palpably clear that second presentation was made only to bring the case within a period of limitation. There is no logic or reason for representing the cheque again, when the cheque was returned for the reason "account closed". Once account is closed, there is no question of re-opening the account to facilitate payment in the same account. It is quite obvious that the respondent having failed to issue a statutory notice within stipulated period after the first return, again presented the cheque to save the limitation. This Court finds that this case is barred by limitation and cannot be maintained.
Petition allowed.
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2022 (2) TMI 1380
Rejection of Rebate Claim - rejection on the ground that the petitioner had availed higher rate of drawback for the export which is available only when Cenvat facility has not been availed - petitioner failed to establish that it satisfied the condition No.15 of the notification No.92/2012 dated 04.10.2012 - HELD THAT:- Perusal of Rule 18 would show that such rebate would be granted by the Central Government by issuing notification on the duty paid on excisable goods or duty paid on materials used in manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations and fulfillment of such procedure as may be specified in the notification. As per this rule thus, upon export, an exporter is entitled to claim rebate on the duty paid on export goods as well as on materials used in manufacture or processing of such goods. This would of-course be subject to fulfillment of the conditions as may be prescribed.
If no duty is paid, the claim would not fall in Rule 18 at all. When the petitioner, through its drawback claims, claimed the refund of excise duty which was granted also, Rule 18 would have no applicability.
The Supreme Court in the case of M/s Spentex Industries Ltd. [2015 (10) TMI 774 - SUPREME COURT] referring to the scheme of granting rebate under Rule 18 and facilities for export of goods without payment of duty under Rules 19 of the Central Excise Rules, 2002 held that the rebate of duty paid by them on inputs as well as final product was available - This judgment thus rests on totally different facts. In fact a reversed anomaly would arise if the claim of the petitioner is accepted. If an exporter exercises option under Rule 19, he could export the goods without payment of duty. He would thereupon not be entitled to claim duty drawback on such component. On the other hand an exporter, who opts for the rebate of duty under Rule 18 is allowed the rebate after claiming drawback as well, there would be double benefit and a clear case of anomaly. In this context, the question as to from which source of Cenvat credit the duty was paid, becomes redundant.
The Assistant Commissioner has proceeded on the basis that the petitioner, for the purpose of claiming drawback, had made a false declaration. If these observations are allowed to stand, as correctly pointed out by the learned counsel for the petitioner the drawback claims which are closed, would be under jeopardy. It is clarified that the department as well as this Court have proceeded on the basis that the petitioner having claimed and received the drawback of excise duty, could not thereafter claim rebate of the same component of duty.
Petition dismissed.
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2022 (2) TMI 1379
Seeking grant of Regular Bail - offence punishable under Sections 132(1)(c) of the Gujarat Goods and Services Tax Act, 2017 and Central Goods and Service Tax Act, 2017 - evidences not discussed in detail - principles of natural justice - HELD THAT:- Considering the nature of the allegations made against the applicant in the First Information Report, without discussing the evidence in detail, prima facie, this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail.
Without discussing the evidence in detail, this Court, prima facie, is of the opinion that, this is a fit case to exercise the discretion and enlarge the applicant on regular bail. Hence, present application is allowed and the applicant is ordered to be released on regular bail subject to the conditions imposed - bail application allowed.
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2022 (2) TMI 1378
Unexplained investment in loans u/s 69B - Addition based on loose unsigned and undated computer sheets - HELD THAT:- AO was obligated to establish that the notings revealed either unaccounted income or unaccounted investment or unaccounted expenditure of the assessee. Additions could not be made simply on the basis of loose unsigned and undated computer sheets. These sheets were to be considered in the nature of ‘dumb document’ having no evidentiary value and could not be taken as the sole basis for determination of undisclosed income of the assessee. No fact-based finding has been rendered by Ld. AO that such transactions gave rise to the income in the hands of the assessee.
It is trite law that in case of search proceedings, the additions are to be based solely on the basis of incriminating material found during the course of search operations. Guess work or estimation or extrapolation of income is not permissible unless there are strong evidences to suggest otherwise. The additions are to be based solely on tangible material and not on the basis of estimations or extrapolation theory.
Book’ ordinarily mean a collection of sheet or papers or other material, blank or written or printed, fastened or bounded together so as to form a material as a whole. Loose sheets are scraps of papers cannot be termed as books for they can easily be detached and replaced. Therefore, these are not admissible evidences. The impugned addition of unexplained investment in loans u/s 69B is not sustainable - grounds thus raised by the assessee allowed.
Addition u/s 69A - unexplained money representing cash seized from the assessee - HELD THAT:- This addition would also stand deleted since it is undisputed fact that the partners of the firm have introduced capital of Rs. 130 Lacs during the year. This credit of the same was already allowed by Ld. AO while computing addition u/s 69B. Therefore, consequent to deletion of addition u/s 69B, this addition would stand deleted.
Addition of undisclosed interest and undisclosed commission income - HELD THAT:- Upon perusal of orders of lower authorities, we find that these additions are merely extrapolated additions by taking average of such income earned in other months. However, there is no incriminating material which would show that both the income was earned by the assessee. These are not supported by any incriminating material found during the course of search operations and merely based on the assumption that the assessee would have earned such income. This being so these additions are not sustainable in the eyes of law. We allow the appeal for AY 2011-12.
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