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Showing 21 to 40 of 1509 Records
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2022 (8) TMI 1490 - KERALA HIGH COURT
Interpretation of statute - N/N. 148/1994 - Refund claim - cancellation of benefit of exemption - Was not the Tribunal wrong in holding that the 'Grant' received by the importer from the European Union would come within the preview of the term 'gift' or 'donation' under Notification No.148/1994 to get exemption from duty? - liberal interpretation to Notification No.148/1994 without following the principal of law that an exemption notification has to be interpreted strictly.
Maintainability of the appeal under Section 130C of Customs Act - HELD THAT:- The principal consideration is whether the goods or plant imported by the respondent would satisfy the requirement of exemption notification or not. Once exemption notification is attracted, the obligation to pay customs duty does not attract. Therefore, the issue is whether the respondent's exemption claim on the import of plant is tenable or not. It has nothing to do with the rate or the value of the goods imported by the respondent. Therefore, the appeal is rightly filed before this Court under Section 130C of the Act and is maintainable.
Re-examination of issues - whether a finding of fact is correctly recorded and binding on this Court? - HELD THAT:- The CESTAT has not appreciated the sequence of circumstances culminate in the import of plant and whether a future obligation is fastened on the respondent for repayment of the cost incurred for the purchase of the plant or not. Therefore, the finding is recorded by not considering the circumstances and documents which have a bearing on the issue. For the above reasons, the findings of fact recorded are perverse and unavailable and therefore, not binding on this Court. Hence the second objection raised is also without merit, accordingly rejected.
Whether exemption notification is attracted to the circumstances of the case and that the appeal at the instance of the Revenue must fail? - HELD THAT:- The findings recorded in para 5 of the order under appeal are certainly unsustainable, for it has been recorded by the CESTAT as a general application of the exemption notification. The relevant circumstances should have been placed before the CESTAT before inviting the findings in this behalf. It is believed that the CESTAT ought to be called upon to decide the merits of the appeal filed by the respondent herein and decide the core issue.
The matter is remitted to CESTAT for consideration and disposal afresh as per law within four months from the date of receipt of copy of the judgment - appeal allowed by way of remand.
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2022 (8) TMI 1489 - BOMBAY HIGH COURT
Seeking benefits - Circular No.3/2022-Customs issued - debiting notional social welfare surcharge in the duty credit scrip issued under the Merchandise Export from India Scheme (MEIS) - HELD THAT:- In view of the circular, certainly Petitioner will be entitled to recredit and/or refund of notional social welfare surcharge in the duty credit scrip issued under MEIS in the goods imported by Petitioner.
Respondents to do needful within 8 weeks of receiving copy of this order - Petition accordingly stands disposed.
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2022 (8) TMI 1488 - GUJARAT HIGH COURT
Reopening notice against company not in existence - petitioner company, which came to be amalgamated by an order of the Company Court - HELD THAT:- Facts obtained in the present case clearly disclosing that petitioner company even as on date of issuance of impugned notice dated 27.3.2021 was not in existence by virtue of same having been amalgamated with effect from 1.4.2015 itself or it had ceased to be in existence from the said date and this fact was also being within the knowledge of the jurisdictional ITO by virtue of communications dated 23.11.2015 and 27.1.2016 forwarded by the petitioner to the said authorities impugned notice cannot be sustained. Decided in favour of assessee.
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2022 (8) TMI 1487 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Rejection of Application filed by the Appellant u/s 9 of the IBC, 2016 - existence of operational debt or not - HELD THAT:- The Joint Development Agreement between the parties makes it clear that both the parties are to share profits according to the percentage and mechanism as provided therein. Present was the case of sharing revenue profit by both the parties. Present was not a case where any Operational Debt was owed by the Corporate Debtor to the Appellant so as to initiate Section 9 Application. Various clauses of the Joint Development Agreement have been noticed and Revenue, Sharing Concept is the key to the Joint Development Agreement and the Joint Development Agreement also contemplated arbitration between the parties in event of any dispute. It has been informed by the Learned Counsel for the Respondent that Arbitration Proceedings have already been initiated and are pending between the parties.
Thus, no grounds have been made out to entertain this Appeal - The Appeal is dismissed.
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2022 (8) TMI 1486 - DELHI HIGH COURT
Addition u/s 14A - exempt income earned or not? - direct and proximate nexus between exempted income which the investment shall generate and the expenditure directly or indirectly involved in earning the said income - HELD THAT:- The present case is covered by the judgment of this Court in Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT] wherein this Court has held that the expression 'does not form part of the total income' in Section 14A of the Act that there should be an actual receipt of income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. In other words, Section 14A will not apply if no exempt income is received or receivable during the relevant previous year.
Scope of amendment made by the Finance Act, 2022 to Section 14A - As decided in Era Infrastructure (India) Ltd.[2022 (7) TMI 1093 - DELHI HIGH COURT] Amendment to section 14A of the Act which is for removal of doubts cannot be presumed to be retrospective.
Allowability of prior period expenses - ITAT and CIT(A) have given concurrent finding of fact on the issue relating to prior period expenses on contract has been allowed in favour of the assessee by the Tribunal in assessment year 2005-06 [2017 (10) TMI 1577 - ITAT DELHI]
Though the appellant in the appeal memo has not mentioned the status of the appeal in assessee’s own case for the assessment year 2005-06, yet during the course of hearing, learned counsel for the appellant-revenue admitted that no appeal had been filed against the said order. No substantial question of law
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2022 (8) TMI 1485 - ITAT AHMEDABAD
Characterization of receipts - Additions on account of Sales Tax Subsidy, Excise Duty incentive and Debenture redemption Reserve of made for the purpose of income computation u/s 115JB - HELD THAT:- We note that Revenue does not dispute that the issue is covered in favour of the assessee in assessee’s own case for AY 2006-07 [2016 (5) TMI 1136 - ITAT AHMEDABAD] as held that as evident from the scheme itself that the sales tax subsidy/incentives were not given to the appellant for assisting it is carrying out the business operations. The objects of the subsidy were to encourage large scale investment by attracting entrepreneurs for setting up of industries in the notified area of Kutch district where the economic activities came to a standstill on account of the devastating earthquake in the state on 26th January, 2001. The scheme was formulated and the incentives were given to entrepreneurs to attract the large-scale investment to generate new employment and for making the economic environment of Kutch district of Gujarat before the specified date as per the scheme of incentive. The limit of the incentive was fixed.
As decided in Ponni Sugars & Chemicals Ltd [2008 (9) TMI 14 - SUPREME COURT] character of the receipt in the hands of the appellant has to be determined with respect to the purpose for which the subsidy is given. In other works, in such cases one has to apply 'Purpose test'. The point of time when the subsidy is paid is not relevant. The source is immaterial and the form of subsidy is also immaterial. It is evident from the incentive scheme itself that the purpose of the scheme was to attract the large scheme investment to generate new employment and for talking the economic environment of Kutch district live. Thus relying on the decision of Birla VXL Ltd. [2011 (11) TMI 731 - ITAT RAJKOT] sales tax incentives and Excise duty incentive received by the appellant were in the nature of capital receipts and thus were not chargeable to tax. AO is directed to delete the above additions.
Also as relying on Raymond's Ltd [2012 (4) TMI 128 - BOMBAY HIGH COURT] mere fact that a Debenture Redemption Reserve is labelled as a reserve will not render it as a reserve in the true sense or meaning of that concept. An amount which is retained by way of providing for a known liability is not a reserve. Consequently, the Tribunal was correct in holding that the amount which was set apart as a Debenture Redemption Reserve is not a reserve within the meaning of Explanation (b) to Section 115JA.
Also addition of made by the AO on account of sales Tax incentive subsidy, Excise duty incentive and Debenture Redemption Reserve to the Book Profit under section 115JB of the Act is held to be unjustified.
However it has been claimed that the decision of ITAT is under challenged before the Hon’ble High Court, in our considered opinion, this cannot be a reason to stood depart from the decision of coordinate Bench. Hence, following the aforesaid decision of ITAT in assessee’s own case, we uphold the order of ld. CIT(A).
Revision u/s 263 - disallowance on account of depreciation on subsidy - sales-tax subsidy which has been treated as capital receipt on the direction of CIT u/s 263 has been attributable to be relatable to the assets acquired and accordingly, depreciation against the so-called capital subsidy purchased as such has been denied - HELD THAT:- CITA’s order in this regard is quite appropriate as he has held that subsidy is given with reference to sales made and sale-tax benefit is given. Subsidy nowhere linked to cost of acquisition of the assets, hence there is no reason to make any deduction from the depreciation claimed. We find that the above reasoning is quite in consonance with the order of ITAT in this regard on the basis of which we have disposed off as above. In the said decision, ITAT had categorically held that the same was a capital receipt and it had upheld the order of CIT (A) and no view was expressed that the same is linked to capital assets acquisition, hence question of deduction in depreciation does not arise.
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2022 (8) TMI 1484 - MADRAS HIGH COURT
Time Limitation - whether the complaint lodged by the respondent is barred by limitation or not? - Sections 468 & 469 of Cr.P.C - HELD THAT:- In the present case the show cause notice was issued on 14.06.2018 for which the petitioners sent reply on 22.06.2018. Thereafter, the respondent lodged complaint on 12.04.2019.
This Court repeatedly held in various judgments that there is absolutely no provision available under the Act contemplating prior sanction for initiating prosecution of the offence under the Act. According to the respondent, there was a delay for obtaining sanction from the authority concerned and as such the complaint was lodged belatedly.
Further the respondent had knowledge about the commission of the offence by the petitioners company as early as on 14.06.2018. Since, there is no provision available under the Act contemplating the prior sanction for initiating prosecution for the offence under the Act, the knowledge of the alleged commission of offence must have come to the notice of the Central Government. The consent or sanction as has been referred to in sub-clause 3 of Section 470 of Cr.P.C., relates to consent or sanction which is obtained under the Statute itself - Further in the present case, under the Act neither any consent nor any sanction from the Central Government is required to prosecute the petitioners. The administrative side permission cannot be equated to a consent or sanction to be obtained statutorily as referred to under sub-section 3 of Section 470 of the Cr.P.C., Therefore, the period for obtaining sanction cannot be excluded at all from the period of limitation. The present complaint was filed on 12.04.2019 viz., after the period of six months. Thus, the complaint is barred by limitation, since the complaint was not launched within a period of six months.
The present complaint cannot be sustained as against the petitioners and the impugned proceeding is liable to be quashed - Petition allowed.
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2022 (8) TMI 1483 - ITAT CHENNAI
Undisclosed money/investment u/s. 69A r.w.r.115BEE - cash balance as on the date of announcement of demonetization - addition made as assessee has made cash deposits into bank at least sixteen times between 01.04.2016 and 08.11.2016 and that one doctor single-handedly increased the turnover of assessee firm by 202%, increase in cash receipts is also not accepted as the bills copies submitted does not give details of patients which are incomplete in details and increasing in pharmacy sales is beyond human probabilities - CIT(A) deleted the addition - HELD THAT:- What the Ld. AO has added is the balance of cash in hand on the date of announcement of demonetization though factually, the deposit of cash in SBNs during the demonetization period was of Rs. 3.30 Cr. From the books of account and corroborative documents placed on record, we find that there is no dispute about the availability of cash balance and its source with the assessee. Thus, once availability of cash in hand is proved, assessee cannot be asked to furnish proof of acquisition of such amount in currency notes of particular denomination.
We note that balance of cash in hand as on 08.11.2016 is out of opening cash balance (duly subject to assessment in AY 2016-17) and receipts during the year on account of sale of medicines and hospital receipts. Income derived from sale of medicines and hospital receipts have been subject to tax while accepting the income returned at Rs. 84.71 lakhs. Thus, we find that cash balance being part of sale of medicines and hospital receipts, cannot be brought to tax at the hands of the assessee again which will otherwise lead to taxing the same amount twice.
We find no reason to interfere with the finding of the Ld. CIT(A) in respect of deletion of addition relating to balance of cash in hand on the date of announcement of demonetization. Accordingly, the addition so made by the Ld. AO stands deleted. Grounds of appeal raised by the revenue are dismissed.
Enhancement done by the CIT(A) - estimating the business income @ 4% of the SBNs of Rs. 3.30 Cr. deposited by the assessee in its bank account - Primary objection of the assessee is that deposit of SBNs is from the hospital and pharmacy receipts, on which tax is paid by the assessee on the income embedded in such receipts, thus, on such receipts, further estimation of income is unjustified and tantamounting to double addition - HELD THAT:- We do find force in the submissions made by the Ld. Counsel in the above respect and are inclined to direct for the deletion of the addition made by the CIT(A) on an estimate basis, more particularly when the doubts referred by him have been cleared by the assessee by reference to corroborative material placed on record which we have discussed above while dealing with the appeal of the Revenue. Accordingly, the direction by the CIT(A) to the ld. AO for making the addition of Rs. 13.32 lakh @ 4% of Rs. 3.30 Cr. is set aside. Accordingly, grounds of cross objection of the assessee are allowed.
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2022 (8) TMI 1482 - ITAT MUMBAI
Attribution of interest expenditure pertaining to non-tonnage income to the tonnage income - HELD THAT:- A perusal of assessment order would show that excerpts from the chart furnished by the assessee giving details of the loans initially taken for shipping business but subsequently utilised for non-tonnage activities has been reproduced. AO disallowed interest expenditure without appreciating the facts on record. Undisputedly, the loans were initially taken for acquiring/maintaining ships. Subsequently, the ships were sold and the sales proceeds were utilized for non-tonnage activities. Therefore, the loans taken for business of qualifying ships were eventually utilized for the purpose of business other than that of the business of qualifying ships (non-tonnage activities).Thus, in the facts of case and the decision of Co-ordinate Bench in assessee’s own case for assessment year 2006-07 [2018 (3) TMI 2027 - ITAT MUMBAI] ground No.1 of the appeal is allowed.
Disallowance u/s 14A - assessee has made suo motu disallowance - assessee submitted that AO while computing disallowance u/s 14A has included interest expenditure under tonnage scheme as well - HELD THAT:- As the first argument of assessee, if any loan has been taken for shipping business (qualified for tonnage tax scheme) and live link is established between the loan taken and the particular purpose, interest payment on such loan should not form part of interest expenditure for the purpose of Section 14A of the Act.
It is accepted position that the entire administrative cost cannot be allocated for earning income exempt from tax if the assessee has other businesses as well. In the instant case the contention of the assessee is that the assessing officer has made disallowance u/s 14A of the Act of an amount more than the entire administrative cost of the Treasury Department.
Third contention of the assessee is own interest free funds of the assessee are sufficient to cover the investments made. It is a settled legal position that where assessee is having mixed bag of own interest free funds and interest bearing funds, the presumption would be that for investment purpose own interest free funds would be utilised by the assessee.
Taking into consideration entire facts of the case, we deem it appropriate to restore this issue back to the file of Assessing Officer to reexamine the issue in light of above observations. If own interest free funds of the assessee are much more than the investments made no disallowance under rule 8D(2)(ii) is warranted.
Income pertaining to tonnage tax business has to be excluded from non-tonnage tax income - HELD THAT:- The Co-ordinate Bench in assessee’s own case for assessment year 2006-07 [2018 (3) TMI 2027 - ITAT MUMBAI] following the decision rendered in the case of Shipping Corporation of India [2011 (7) TMI 588 - ITAT, MUMBAI] decided these grounds in favour of the assessee as held though the assessee has computed other income while filing its return of income, in our opinion, the income arising from section 41(1), cannot be classified as, either income from other sources or income from incidental activities. When all the ships of the assessee are qualifying ships and when there is no other activity other than core activities and incidental activities, in our opinion, a third category of other business income cannot be created. As pointed out by the learned Sr. Counsel, if such introduction is allowed then, a claim of the assessee of deduction under section 43B i.e., deduction only on actual payment would be required through the expenditure actually belongs to pre-tonnage period, to be allowed. The Assessing Officer cannot take recourse to sections 28 to 43C, when there is no other activity or business carried on by the company, other than business of operating qualifying ships - we allow ground of the assessee
Disallowance of expenditure in connection with transfer of residential flats while computing short term capital gains - whether the building repair fund and expenditure towards share certificate should be allowed to be deducted from total sale consideration while computing capital gain on sale of ‘Manek flat.’? - contention of the assessee is, the said expenses were incurred at the time of sale of flat. 50% of the expenditure were borne by the assessee and the remaining 50% were paid by the purchaser - HELD THAT:- It is a well settled legal position that expenditure incurred at the time of sale of asset, if borne by the seller/to the extent borne by the seller has to be reduced from the total consideration. In the instant case, the expenditure towards building repair funds and share certificate were paid by the assessee and the purchaser in equal ratio. Since, expenditure was incurred at the time of sale of flat, the said expenditure is allowable to the extent paid by the assessee and hence, deductible from total sale consideration. We find merit in ground of the appeal, hence, the same is allowed in the terms aforesaid.
AO non-complying with directions of the DRP to grant credit of TDS - HELD THAT:- AO is directed to comply with the directions of the DRP with respect to allowing credit of TDS. The ground of the appeal is thus allowed for statistical purpose.
Benchmarking foreign loan transaction to the overseas Associated Enterprise (AE) - HELD THAT:- We find that identical issue was subject of appeal before the Co-ordinate Bench in assessment year 2007-08 [2014 (1) TMI 709 - ITAT MUMBAI] as held the loan of USD 4 million was given in earlier accounting year and as per the agreement, the rate of interest was taken at 5%. The fixed rate of interest cannot be accepted to be changed with the subsequent change in LIBOR , if any , and as the loan of USD 17 million has been repaid within the year itself, there is no logic in taking the rate for more than 5 years at 6 months LIBOR plus 350 basis point. In our humble opinion, the benchmarking done by the assessee are based on the interest paid by it on its own borrowings of loan in foreign currency from KEXIM bank and also from State Bank of India as mentioned elsewhere in this order we find that the interest charged by the assessee on the loan given by it to its AE is at arm's length and therefore, no further adjustment is required. We, accordingly, reverse the findings of the Ld. CIT(A) with a direction that no Transfer Pricing adjustment is required.
TP adjustment in respect of Performance Guarantee given by the assessee on behalf of AE - HELD THAT:- The assessee had extended performance guarantee to shipyard in respect of its 100% subsidiary based in Singapore. The assessee has taken ALP of the performance guarantee facility as ‘Nil’. The DRP has determined ALP of the transaction @1%. The agreement in respect of which performance guarantee has been extended by the assessee on behalf of its foreign subsidiary is with respect to construction of a ship. Guarantee has been extended to a shipyard. If guarantee is invoked, the assessee would be under obligation to pay guarantee, in turn the assessee would acquire the vessel. We find force in the argument of the Counsel for the assessee, there is no element of risk involved. In any case, on enforcement of guarantee clause the assessee would acquire vessel, the same can be used by the assessee in its own business.
We find that the Tribunal in the case of ACIT vs. KEC International Ltd [2019 (9) TMI 437 - ITAT MUMBAI] deleted adjustment made on account of performance guarantee where there was absolutely no risk involved for the assessee in issuing performance guarantee on behalf of its AE. Thus, in the facts of the case and the decision by the Coordinate Bench, we hold that no adjustment is warranted on account of performance guarantee.
TP adjustment in respect of financial guarantee given by the assessee on behalf of its AE - TPO had made adjustment by determining guarantee commission @3%. The rate of guarantee commission was restricted by the DRP to 1.5% - HELD THAT:- As is evident from the letters from various banks on record, different rates of guarantee commission are charged by different banks depending upon the extent and duration of facility availed. Taking note of wide-ranging guarantee commission rates being charged by different banks, we adopt guarantee commission rate approved by Hon'ble Bombay High Court in the case of Everest Kanto Cylinders Ltd [2015 (5) TMI 395 - BOMBAY HIGH COURT] , i.e 0.55%. We uphold guarantee commission charged by the assessee at 0.55%. Hence, no adjustment is warranted on this issue. The, assessee succeeds on this ground of the appeal.
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2022 (8) TMI 1481 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI
Maintainability of section 7 application - initiation of CIRP - Share subscription cum Shareholders agreement by and between IL & FS Trust Company Ltd. (as Trustee to the India REIT fund Scheme –IV) (the Investor) and Mr. Raj Singh Gehlot (the Promoter & Ambience Pvt. Ltd. (Developer & Ambience Projects and Infrastructure Pvt. Ltd.) - Financial Debt or not - HELD THAT:- It is made clear that Investment made in SPV/Joint Venture through Share Subscription & Shareholders Agreement will not come within the purview of Section 7 R/w Section 5(8) of the ‘Code’.
It is also further stated that to get it covered under Section 7 R/w Section 5 (7) & (8) of the Code that there must be disbursal of fund by the Financial Creditor to the Corporate Debtor or in simple term, if there is no disbursal then even ‘Financial Debt’ will not attract Section 7 of the Code, as it looks from the bare reading of Section 5(8) of the Code in order to qualify under Section 7 of the Code, the following basic ingredients are a requirement to get covered under Section 7 of the Code: a). The Creditor must be a ‘Financial Creditor’ and be covered by Section 5(7) & (8) of the Code; b). The Financial Debt must be owed by the Corporate Debtor. However, the default may be occurred in respect of that Financial Creditor or any other Financial Creditor.; c). Financial Debt to carry interest element and be disbursed against the consideration of time value of money; d). Money borrowed against the payment of interest; e). Investment made with the object of profit sharing from revenue generated will also not be covered within the ambit of Section 7 of the Code; f). Award received under Arbitration and Conciliation Act, 1996 or amount emerged from the Settlement Agreement will not come within the purview of Section 7 of the Code.
Even the Applicant has mentioned in the Form-1, Part-IV total amount of debt guaranteed as on 31st October, 2018 Rs. 234,69,62,791/- are in default as per Settlement Agreement dated 07.04.2017. This suggests that Section 7 of the Code is being invoked pursuant to Settlement Agreement which is not permissible under Section 7 of the Code.
The order of Adjudicating Authority cannot be sustained - appeal allowed.
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2022 (8) TMI 1480 - CALCUTTA HIGH COURT
Levy of penalty u/s 129 of the WBGST Act, 2017 - e-way bill in question had expired its validity - period of 1st June, 2019 to 30th June, 2019 - violation of principles of natural justice or not - HELD THAT:- The facts as appears from record and the grounds of appeal taken by the petitioner before the GST appellate authority and the reasons given by the appellate authority in the impugned order dismissing the appeal of the petitioner, there is no procedural irregularity or violation of principle of natural justice or the action of the authority is contrary to law which invites invoking of constitutional writ jurisdiction of this Court under Article 226 of the Constitution and more particularly in this case petitioner has failed to show any specific provisions of law to establish that the nature of goods which was being transported is exempted from any e-way bill.
Petition dismissed.
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2022 (8) TMI 1479 - ITAT RAJKOT
Addition on account of warehouse rent being excessive - payment to persons covered u/s 40A(2)(b) and not expedient to business expenditure - CIT(A) deleted addition - HELD THAT:- Disallowance on account of warehouse rent being excessive payment was rightly deleted by the CIT(A) as the assessee has given the details related to warehouse expenditure on rent thereby filing the details of related to entry/payment of the corresponding receipts along with cheques. CIT(A) has taken cognisance of the same referring to the bills and invoices towards warehouse rent and recipient as party has already paid due tax thereon. Therefore, ground of Revenue’s appeals are dismissed.
Addition on account of interest payment u/s. 36(1)(iii) - CIT(A) deleted addition - HELD THAT:- CIT(A) has rightly observed that CFS bill account shows that sizable amount of payables by the assessee to GFPL, thus the assessee was having sufficient fund and the assessee has established the nexus between the interest-free advance and the interest-bearing loans. The books of account of the assessee also show this fact. In fact, the assessee earned positive income of more than Rs.5 Crores which in any case should necessarily be considered available for making interest-free advances. As per observation of the CIT(A) the deployment of fund available with one concern of the group for the purpose of business has been taken into account while deleting this addition by the CIT(A). There is no need to interfere with the same and hence ground no.2 of Revenue’s appeal dismissed.
Addition on account of Repairs & Maintenance - CIT(A) deleted addition - HELD THAT:- The payments were made after deducting TDS. The parties directly confirmed the said charges while replying notice u/s 133(6) of the act. Thus, the Assessing Officer has totally ignored the evidences placed before him and, therefore, the CIT(A) rightly deleted this addition.
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2022 (8) TMI 1478 - SC ORDER
Seeking extension of time by 60 days to make the deposit - Appellant, an Operational Creditor contends that the impugned order is prejudicia to the right of the Appellant to receive the amounts payable to the Appellant under the approved Resolution Plan, within the timelines thereunder - HELD THAT:- Three months’ time granted to the Resolution Applicant (Respondent No. 1) to pay the residual balance amount in the designated account along with overdue interest, has expired. No payment has been made.
The appeal has, thus, become infructuous and is dismissed.
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2022 (8) TMI 1477 - ITAT MUMBAI
TP Adjustment - comparable selection - exclusion of AISL - HELD THAT:- We note that the Marketing Support Segment of the Appellant was engaged in providing sales and marketing services to the AEs. According to the functional profile of the AISL, as per the extracts of its websites placed on record, AISL was engaged in providing services related to Directorate General of Foreign Trade, Customs/Excise & Service Tax related services, which are in the nature of the professional consultancy services as opposed to sales and marketing support services provided by the Appellant.
AISL was providing liaison services to large number of customers as opposed to the Marketing Support Segment of the Appellant which was providing support services only to its AEs.
AISL was also engaged in the business of trading in digital certificate. Since the nature of support services vary from business to business, TPO erred in treating liaison services provided by AISL at par with the marketing and sales support services provided by the Appellant. On perusal findings regarding functional profile of AISL in the judgments relied upon by the Ld. Authorised Representative for the Appellant, it is clear that AISL was functionally not comparable with the marketing support services rendered by the Appellant. Therefore, we direct the Assessing Officer to exclude AISL from the list of comparables.
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2022 (8) TMI 1476 - ITAT MUMBAI
Disallowance of bad debts - relevant date of sales of commodities - AO has proceeded on the belief that the assessee has booked sales of commodities on 3.8.2013 and 17.8.2013 i.e. after the date of suspension of trading operations in NSEL - AR submitted that the commodities have been sold by the assessee prior to 31.7.2013 - CIT(A) has expressed the view that the assessee has not complied with the provisions of section 36(2) of the Act i.e. the assessee has not proved the amount written off as bad debts has been declared as her income in any of the years, but it is the submission of the learned AR that the assessee has duly recorded both purchases and sales of commodities in her purchases and sales account disclosed in the profit and loss account - HELD THAT:- Since there is contradiction with regard to the facts surrounding the issue, we are of the view that the issue relating to claim of bad debts requires examination at the end of the AO on two aspects, viz.,
(a) the date of sale of commodities and
(b) whether the assessee has disclosed the amount claimed as bad debts as her revenue.
If the assessee is able to show that sale of commodities have taken place prior to 31st July, 2013 and further the assessee has proved that she has declared the above sales amount as revenue in her Trading/Profit & Loss account, then the claim of bad debts is allowable as per the decision rendered in the case of TRF Ltd [2010 (2) TMI 211 - SUPREME COURT]. In the case of Nirship Securities Pvt. Ltd. [2021 (6) TMI 814 - ITAT MUMBAI], the claim of business loss has been accepted by the co-ordinate bench of Tribunal and this claim may also be examined from this angle also, if the assessee makes such a claim.
Thus we set aside the order passed by learned CIT(A) with regard to the claim of bad debts and restore the same to the file of the AO for the limited purposes of examining two aspects discussed in the preceding paragraph. The assessee may, if so advised, may raise alternative claim of business loss, which may be examined by the AO, if so raised.
Treating the claim of bad debts as speculation loss - HELD THAT:- We notice that AO has taken the view that the purchase and sales have taken place without availability of corresponding commodities on the basis of enquiries conducted by EOW in the hands of Anand Rathi Commodities and accordingly, he has held that these transactions are speculative in nature. The assessee on the other hand denies such claim and it has been submitted that the assessee has entered into the commodities transactions on delivery basis. The admitted fact is that the NSEL platform has allowed trading in commodities on “delivery basis” and the transactions have been entered by the assessee on that basis only through the broker.
Though there are allegations that the broker of the assessee has given false confirmations on availability of the stock, yet there is no proof to show that the stocks dealt within by the assessee were not available. Hence the view taken by the assessing officer, in our view, is not supported by any material.
We notice that the assessee has carried on trading operations prior to the sale of two commodities referred above and has declared business income therefrom. AO has accepted the same as trading of commodities on delivery basis. AO was not justified in treating the loss as speculative loss in respect of this transaction alone, when he has accepted the business income declared by the assessee in respect of other transactions.
Claim of the assessee does not represent profit/loss from trading operations, but it represents debts which were not recovered from NSEL Only profit/loss from trading operations could be examined for deciding as to whether it is speculative in nature or not. On this reason also, the AO was not correct in law in treating claim of the assessee as speculative in nature. Decided in favour of assessee.
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2022 (8) TMI 1475 - SUPREME COURT
Maintainability of appeal - Locus standi to institute the criminal revision - murder - appellant is the defacto complainant - revisional jurisdiction of High Court - HELD THAT:- The basis of the order of the trial court, which has been upheld by the High Court, namely, that the statement of the appellant is a statement under Section 161 CrPC is erroneous. The statement of the appellant, in fact, was the basis on which the FIR was registered. Hence, it was legitimately open to the prosecution to have the statement proved and marked as an exhibit during the course of the trial.
There would be a serious miscarriage of justice in the course of the criminal trial if the statement were not to be marked as an exhibit since that forms the basis of the registration of the FIR. The order of the trial judge cannot in these circumstances be treated as merely procedural or of an interlocutory in nature since it has the potential to affect the substantive course of the prosecution. The revisional jurisdiction under Section 397 CrPC can be exercised where the interest of public justice requires interference for correction of manifest illegality or the prevention of gross miscarriage of justice.
The principles which have been enunciated in Sheetala Prasad [2009 (12) TMI 1060 - SUPREME COURT] have been recently relied upon by this Court in MENOKA MALIK AND ORS. VS. THE STATE OF WEST BENGAL AND ORS. [2018 (8) TMI 2141 - SUPREME COURT] to hold that the High Court can exercise its revisional jurisdiction in a revision petition filed by the first informant where the trial court overlooked material evidence. Thus, the impugned judgment of the High Court dated 20 December 2021 is incorrect in holding that the appellant did not have locus to institute the criminal revision against the order of the trial court.
The order of the trial court dated 3 October 2019 and the impugned judgment of the High Court dated 20 December 2021 is set aside - appeal allowed.
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2022 (8) TMI 1474 - CESTAT ALLAHABAD
Rejection of declared value of the goods seized under rule 12 of the Customs Valuation Rules 2007 - redetermination the same in terms of rule 5 - HELD THAT:- There is force in the submission advanced by learned counsel for the appellant. The officer who had issued the show cause notice could not have decided the appeal filed against the order adjudicating the said show cause notice.
The impugned order dated 10.12.2018, therefore, deserves to be set aside on this ground alone and is set aside - Appeal allowed.
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2022 (8) TMI 1473 - SUPREME COURT
Rejection of an application under Section 311 CrPC seeking to summon the nodal officers of certain cellular entities along with the decoding register to trace the mobile location of accused Vikas, Mangilal and Suresh - HELD THAT:- In the present case, the application of the prosecution for the production of the decoding registers is relatable to the provisions of Section 91 CrPC. The decoding registers are sought to be produced through the representatives of the cellular companies in whose custody or possession they are found. The decoding registers are a relevant piece of evidence to establish the co-relationship between the location of the accused and the cell phone tower. The reasons which weighed with the High Court and the Trial Court in dismissing the application are extraneous to the power which is conferred under Section 91 on the one hand and Section 311 on the other.
The power under Section 311 to summon a witness is conditioned by the requirement that the evidence of the person who is sought to be summoned appears to the Court to be essential to the just decision of the case.
The Court is vested with a broad and wholesome power, in terms of Section 311 of the CrPC, to summon and examine or recall and re-examine any material witness at any stage and the closing of prosecution evidence is not an absolute bar.
Appeal allowed.
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2022 (8) TMI 1472 - ITAT CHENNAI
Penalty u/s.271(1)(c) - CIT(A) decided the appeal ex-parte dismissing the appeal - assessee could not file details before AO except filing written submissions - HELD THAT:- Assessee could not file details before AO except filing written submissions dated 25.09.2014. We have noticed that the assessee is actually non-cooperating with the authorities in providing details or he is totally non-cooperative. Hence, the CIT(A) has no alternative except to pass ex-parte order. When these facts were confronted to assessee, he only pleaded mercy. On the other hand, DR requested that the order of CIT(A) be confirmed.
After hearing rival contentions and going through the facts, we are of the view that in the interest of justice, one more opportunity be provided to assessee to represent its case before CIT(A) subject to a cost of Rs.10,000/- to be paid to Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras. Assessee will pay this cost and produce the challan before CIT(A) - We set aside the order of CIT(A) and remand the matter back to the file of the CIT(A) for fresh adjudication. Appeal filed by the assessee is allowed for statistical purposes.
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2022 (8) TMI 1471 - ITAT COCHIN
Additions u/s 41(1) - Cessation of liability - Freezer Deposit considered as lapsed liability u/s 41(1) - HELD THAT:- As in assessee’s own case [2016 (11) TMI 1584 - ITAT COCHIN] by following the earlier Tribunal order, had held that addition u/s 41(1) is not warranted. The relevant finding of the Tribunal for assessment year 2011-2012.
Disallowance of belated payment of employees’ contribution to PF & ESI - HELD THAT:- The assessee is claiming deduction of delayed remittance of employees’ contribution to PF and ESI, stating that the same has been deposited before the due date of filing return u/s 139(1) of the I.T. Act. However, the Hon’ble jurisdictional High Court in the case of CIT v. Merchem Limited [2015 (9) TMI 560 - KERALA HIGH COURT] and in the case of Popular Vehicles & Services Private Limited v. CIT [2018 (8) TMI 133 - KERALA HIGH COURT] had clearly held that employees’ share of PF and ESI, which was not deposited within the due date under the respective Acts, is not an allowable deduction u/s 36(1)(va) of the I.T. Act.
Therefore, following the judgments of the Hon’ble jurisdictional High Court in the case of CIT v. Merchem Limited [2015 (9) TMI 560 - KERALA HIGH COURT] and Popular Vehicles & Services Private Limited [2018 (8) TMI 133 - KERALA HIGH COURT] we hold that since the employees’ contribution to PF and ESI was not deposited within the due date specified in the relevant Acts, the same cannot be allowed as a deduction u/s 36(1)(va). It is ordered accordingly.
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