TMI Tax Updates - e-Newsletter
January 11, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy PMLA Service Tax Central Excise

Articles

1. Registration has to be cancelled retrospectively from the date when no business is being conducted by Registered Person

   By: Bimal jain

2. AUTHORIZATION AND ASSIGNMENT UNDER TELECOMMUNICATIONS ACT, 2023

   By: DR.MARIAPPAN GOVINDARAJAN

3. Amount paid for early termination of the lease constitutes consideration for the supply

   By: Bimal jain

4. Revenue Authority directed to Expedite the disposal of Rectification Application filed by Registered Person under GST

   By: Bimal jain

News

1. Central Bureau of Narcotics (CBN) officials seize over 6,000 kg in two operations in Rajasthan and Madhya Pradesh in two days

2. PM GatiShakti is India's revolutionary offering to the world and future planning tool for infrastructure globally: Sh. Piyush Goyal

3. DPIIT organises Startup India Innovation Week 2024 from 10th-18th January 2024

4. CCI approves acquisition of remaining 30% equity stake in Signet Excipients Private Limited by IMCD India Private Limited

Notifications

GST - States

1. 94/Leg.A2/2023/Law - dated 5-1-2024 - Kerala SGST

Kerala State Goods and Services Tax (Amendment) Ordinance, 2023

2. S.O. 2/P.A.5/2017/S.3/2024 - dated 1-1-2024 - Punjab SGST

Amendment in Notification No. S.O. 15/P.A.5/2017/S.3/2017, dated the 30th June, 2017

3. S.O. 1/P.A.10/2023/S.1/2024 - dated 29-12-2023 - Punjab SGST

Seeks to bring in force provisions of Punjab Goods and Services Tax (Amendment) Act, 2023

4. F.12(1)FD/Tax/2024-71 - dated 9-1-2024 - Rajasthan SGST

Seeks to notify special procedure to be followed by a registered person engaged in manufacturing of certain goods

5. F.12(1)FD/Tax/2024-70 - dated 9-1-2024 - Rajasthan SGST

Seeks to rescind Notification No. F.12(11)FD/Tax/2023-31, dated on 16-08-2023

Highlights / Catch Notes

GST

• Retrospective Registration Cancellation Not Allowed Without Objective Criteria, Non-Filing Alone Insufficient.

  Case-Laws - HC : Cancellation of registration of the petitioner with retrospective effect - The registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer’s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant - HC
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• Municipal Corporation must reimburse GST with 9% interest from July 1, 2017, to petitioners.

  Case-Laws - HC : Reimbursement of GST - the MCD is directed to reimburse the tax paid by the petitioners along with interest at the rate of nine (9) percent, with effect from 01.07.2017 - HC
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Income Tax

• Faceless Assessment Scheme: Court Upholds Authority's Jurisdiction on Notices u/s 143(2) of Income Tax Act.

  Case-Laws - HC : Jurisdiction of the Income Tax authority to issue notice u/s 143[2] of the IT Act under the National Faceless Assessment Scheme (NaFAC / NFAC) - The provisions of Section 124 stipulate that when an assessee calls in question the jurisdiction of the AO - If the right to call in question the jurisdiction is left open to be raised at any stage, the proceedings will remain inconclusive and that could not have been the intendment of the legislature. Therefore, this Court must opine that the petitioner must fail - HC
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• Duplicate Addition of Interest Income Removed Due to Discrepancy in Tax Return and Form 26AS Reconciliation.

  Case-Laws - AT : Additions towards difference in interest income between interest as per Form 26AS and interest income shown in the Return of Income - Since the alleged accommodation loan was treated as bogus and assessing officer made estimation addition, hence addition on account of difference in interest income, is tantamount to double addition, hence the same is hereby deleted. - AT
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• Additional Income Declared from Excess Stock; Higher Tax Rate Imposed Without Source Challenge by Tax Officer.

  Case-Laws - AT : Higher rate of tax u/s 115BBE - As noted that the assessee has declared additional income towards excess stock found during the course of survey and assessee has explained the source for excess stock found during the course of survey i.e., that it was out of income earned from current year business or earlier years business and surrendered the amount, the AO has not done anything to dispute the claim of assessee that the source was not from the business income. - AT
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• Allegations of Share Price Inflation Dismissed Due to Lack of Evidence Linking Taxpayer to Fraudulent Trading Practices.

  Case-Laws - AT : Bogus LTCG - share price increased multi-fold - Allegation that there is artificial increase by circular trading of shares forming carte - It clearly raises several doubt on the purchase and sales transactions recorded in this case. However, there is no discrepancies in the documents filed by the assessee claiming the deductions u/s 10(38). At the same time, even though all the characteristics of the penny stock exists in the present case, still the revenue has not brought on record any materials linking the assessee in any dubious transactions relating to entry, price rigging or exit providers. - AT
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• Interest on Loans for Settling Outgoing Partners' Accounts is Deductible u/s 36(1)(iii.

  Case-Laws - AT : Disallowance of interest u/s. 36(1)(iii) - loan borrowed for the purpose of settling outgoing partners’ capital account - The settlement of capital account of outgoing partners becomes debt of partnership firm and discharge of said debt out of borrowed funds assumes the character of loans/funds borrowed for the purpose of business of the assessee. - interest paid on borrowed capital account is allowable deduction u/s. 36(1)(iii) of the Act. - AT
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• Trust's Exemption and Registration Under Income Tax Act Examined; Dharmashala's Non-Profit Status Questioned.

  Case-Laws - AT : Exemption u/s 11 - registration u/s 12AA - activity of running a Dharmashala for public at large - an activity in the nature of trade, commerce or business or not - absence of profit motive - since the actual activities of the trust cannot be the deciding factor while granting the registration u/s 12A but the object of the trust should have been looked into, the activities have to be looked into by the Assessing Officer at the time of assessment proceedings. - AT
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Customs

• Glass Beads Chatons Misclassified: Piercing Required for Bead Designation Under Harmonized System Nomenclature.

  Case-Laws - AT : Classification of Glass Beads Chatons - relying on the definition of the beads given in the HSN notes, it is held that piercing is a necessary requirement for anything to be classified as beads. There is no disputes that the product imported by appellant is not pierced. Therefore, the same cannot be classified as beads. - AT
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IBC

• Adhering to Timelines in Insolvency Process: Only Final List Applicants' Plans Accepted to Avoid Delays.

  Case-Laws - AT : CIRP - Resolution Plan - If unsolicited plans are obtained at any stage it will cause unnecessary avoidable delay in the CIRP process. If resolution plans are allowed to be submitted at any stage, it will make the whole CIRP process unending. To curtail the delay in the CIRP process, it is appropriate to restrain the tendency to consider resolution plans after the time as specified by the CoC and from someone not in the final list of PRAs. This has been the spirit and justification of newly inserted provisions in the Regulations in 2021 and which has been eloquently described in the Discussion Paper of the IBBI, before changes were brought in and which have also been referred to by SRA viz. SEAPOL. - AT
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• Insolvency Resolution Plan Approved with Over 82% CoC Support; No Worker Grievances or Appeals Filed.

  Case-Laws - AT : Approval of Resolution plan - payments to related parties - discrimination in Resolution Plan - No workers and employees have any grievance nor any workers and employees is dissatisfied with the payments made under the plan to them nor have they come in Appeal. Plan has been approved with 82.40% vote shares of the CoC - view of the Adjudicating Authority also confirmed that there is no non-compliance of Section 30(2) of the IBC. - AT
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Service Tax

• Tax Demand Dismissed: Show Cause Notice Deemed Invalid Due to Expiration of Five-Year Limitation Period.

  Case-Laws - AT : The period in question is beyond the period of five years. It is a settled position that no demand can be raised beyond the period of five years. The assessee is correct in saying that the show cause notice is barred by time and is unsustainable. - AT
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• Compensation for Accepting Substandard Goods Classified as Taxable Service Under Finance Act 1994.

  Case-Laws - AT : Declared service or not - amount of compensation received by the appellant on the act of tolerance by receiving the claim for poor quality of the goods - The said act is covered under declared service under sub-section (e) of section 66 (E) of the Finance Act, 1994 as it is an act of tolerance by the appellant for which appellant received compensation for receiving poor quality of goods. - AT
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• Providing Share Tips Excluded from "Banking and Other Financial Services" Classification Due to Lack of Advisory Role.

  Case-Laws - AT : Classification of services - Banking and Other Financial Services - They have not been guiding or suggesting any course of action to his customers. The appellant neither adviced nor guided the customers as to what quantity of share they can buy, when can they buy, when can they sell the share etc. Appellant have neither provided any broking or portfolio services nor has any details of the shares held by his customers - thus merely providing tips/information related to shares will not encompass the ingredients of ‘Banking and Other Financial Services’. - AT
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• Eligibility of Cenvat Credit on Input Services for Output Quality and Efficiency Highlighted; Lower Court's Order Criticized.

  Case-Laws - AT : Cenvat credit - input services - quality and efficiency of the output service - nexus with output services - the definition provides for credit of both types of input services, the benefit of which is either received directly or indirectly. There is no such restriction in the definition under Rule 2(l) - the Order of the Court below is non-speaking and cryptic.- AT
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Central Excise

• Credit Disallowance Must Align with 'Input Service' Definition; Current Order Lacks Factual Support.

  Case-Laws - AT : Disallowance of credit cannot rest upon statements but must stand the test of definition of ‘input service’ in rule 2(l) of CENVAT Credit Rules, 2004 on facts which is sorely lacking in the impugned order. The observation of the adjudicating authority that it is upto the assessee to establish eligibility is, in our view, not a correct appreciation of CENVAT Credit Rules, 2004 inasmuch as recovery, initiated under rule 14 of CENVAT Credit Rules, 2004, must engage the assessee with evidence to justify such recovery which is only then open to disputation. - AT
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• Exemption Notification Under Central Excise: Absolute or Conditional? Cenvat Credit Demand Deemed Unsustainable.

  Case-Laws - AT : Scope of exemption notification - Absolute exemption or conditional exemption - In the present case, the goods were supplied under notification No. 108/1995-CE depending upon the nature of supplies and as per Rule 6(6)(iv) the provision of Sub Rule (1), (2), (3) and (4) shall not be applicable. Accordingly, the appellant is on one hand eligible for Cenvat credit and is not required to pay 5% in terms of Rule 6(3) of Cenvat Credit Rules, 2004 accordingly, the demand of 5% is not sustainable. - AT
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• Judgment: Specific issues override general principles in Cenvat Credit; no mala fide intent found, demand time-barred.

  Case-Laws - AT : The judgments dealing with the specific issue will prevail over the judgment in respect of general principle of the Cenvat Credit Rules - there are no mala fide on the part of the respondent. Therefore the Adjudicating Authority’s order setting aside the demand of Cenvat credit on Sales Commission exclusively on the ground of time bar is not found any fault. Therefore, the extended period was not invokable for the demand beyond the normal period. - AT
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Case Laws:

• GST

• 2024 (1) TMI 437
  Maintainability of appeal - appeal dismissed solely on the ground of limitation - GST registration of the petitioner was cancelled retrospectively - HELD THAT:- In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. The registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant. It is important to note that, according to the respondent, one of the consequences for cancelling a tax payer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period. Although, we do not consider it apposite to examine this aspect but assuming that the respondent s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted - the show cause notice does not even state that the registration is liable to be cancelled from a retrospective date. The impugned show cause notice dated 08.11.2022, order of cancellation dated 07.02.2023 and the order in appeal dated 24.08.2023 are accordingly set aside. GST registration of the petitioner is restored - petition allowed.

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• 2024 (1) TMI 436
  Rejection of application filed by the petitioner seeking cancellation of GST registration - application rejected on the ground that petitioner had failed to furnish stock position, value of raw material as well as the value of capital goods - HELD THAT:- In terms of Section 29 sub-section 5 of the Central Goods Services Tax Act, 2017, every person whose registration is cancelled is liable to pay an amount equivalent to the credit of input tax in respect of inputs held in stocks and inputs contained in semi-finished or finished goods held in stock or capital goods of plant and machinery on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher. In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. The registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant. A taxpayer s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. Clearly, the order is erroneous to the extent that the same could not have been passed retrospectively. The registration was suspended with effect from 02.09.2021. Accordingly, the order is modified to the extent that cancellation shall take effect from 02.09.2021. Petition disposed off.

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• 2024 (1) TMI 435
  Cancellation of registration of the petitioner with retrospective effect - registration obtained by means of fraud, wilful misstatement or suppression of facts - vague SCN - Violation of principles of natural justice - HELD THAT:- Since it is held that the show cause notice and the order of cancellation are bereft of any details and are not sustainable, no purpose would be served in awaiting the outcome of the hearing on the application for revocation of cancellation. Since the very foundation of the proceedings i.e. show cause notice, is defective, further proceedings thereon shall be vitiated. In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. The registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant - a taxpayer s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. The impugned show cause notice dated 10.07.2023 and the order of cancellation dated 25.08.2023 are set aside - Petition allowed.

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• 2024 (1) TMI 434
  Cancellation of registration of the petitioner and its relevant date - SCN does not give any reason or detail - violation of principles of natural justice - HELD THAT:- Perusal of letter dated 12.06.2023 shows that there is an allegation that one Neeraj Enterprises had issued invoices without any underlying supply of goods or services and passed on fraudulent input tax credit to various recipients and petitioner is alleged to be one of the such recipients. It is held that the show cause notice does not contain the requisite details, the same is not sustainable and is liable to be quashed and even the letter dated 12.06.2023 does not give any clarity as to the allegation of availing of fraudulent input tax credit by the petitioner. Accordingly, the show cause notice is set aside. It would be, however, open to the respondent to take further action in accordance with law inter alia, cancellation of registration with retrospective effect. However, the same would be in accordance with law and pursuant to a proper Show Cause Notice and an opportunity of hearing being given to the petitioner. Petition disposed off.

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• 2024 (1) TMI 433
  Maintainability of Petition - remedy to file a contempt petition - petitioner states she has moved representation before the Executive Engineer, however till date her representation is not decided though the period of four weeks as directed by the Court for disposal of the said representation has expired long back. HELD THAT:- The remedy available to the petitioner is to file a contempt petition, not the successive writ petition before this Court, before the appropriate Court or take appropriate proceedings in accordance with law. The writ petition is disposed off.

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• 2024 (1) TMI 432
  Refund to the petitioner appropriate amounts after retaining 10% towards pre-deposit for filing the statutory appeal - HELD THAT:- The review application would be required to be placed and heard by the Bench (Coram:- G.S. Kulkarni and Jitendra Jain, JJ) which had passed the order dated 28 November, 2023. As suggested by petitioner, it would be also permissible for the petitioner to move a praecipe on the administrative side of the Court, for the present writ petition to be tagged along with the review application [ Interim Application (L.) No. 36091 of 2023 ] as filed on behalf of the Department. Mr. Shah states that appropriate steps in that regard would be taken by the advocate for the petitioner.

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• 2024 (1) TMI 431
  Maintainability of petition - non-invocation of appellate remedy under Section 107(1) of the Act of 2017 within the time stipulated under Section 107(4) of the Act of 2017 - HELD THAT:- This Court is not required to enter into the issues of fact or law raised by the writ petitioner, as the petitioner has the liberty to invoke the appellate remedy under Section 107(1) of the Act of 2017 by the cut-off date 31.01.2024 in terms of the notification dated 04.11.2023. It however appears that the bank accounts of the petitioner have been attached in recovery proceedings. Therefore, in order to allow the petitioner to effectively avail the remedy of appeal as provided under the notification dated 04.11.2023, it is directed that the Branch Manager, ICICI Bank, Bishalgarh Branch would permit the petitioner to remit the amount of pre-deposit as required in terms of the notification dated 04.11.2023 from the attached bank accounts on such application being made through the permissible mode for preferring the appeal within the cut-off date 31.01.2024. The writ petitions are disposed of - no comments made on the merits of the case of the parties.

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• 2024 (1) TMI 430
  Cancellation of the petitioner s registration of GST - Appeal filed beyond the condonable delay - HELD THAT:- It is evident from the bare reading of sub section (2) and Section 29 of the Act that the registration could be cancelled by appropriate officer on any of the grounds mentioned under sub-section (2) - In the present case the ground of cancellation is that the petitioner filed nil returns continuously for more than six months. Learned counsel for the petitioner submits that since the returns were Nil, the nil returns were filed - Section 29(2) does not contain any such ground for cancelation. In the Rules also there is no such ground for cancellation. In the show cause notice or in the order it is not the case of the respondents that the nil returns were filed incorrectly, contravening any provision of the GST Act or the Rules - the impugned order of cancelation is without jurisdiction and without any valid statutory ground. The same cannot be sustained. Petition allowed.

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• 2024 (1) TMI 429
  Reimbursement of GST - HELD THAT:- The action of the respondents, in not reimbursing the tax paid to the concerned statutory authorities is unlawful. Therefore, the MCD is directed to reimburse the tax paid by the petitioners along with interest at the rate of nine (9) percent, with effect from 01.07.2017. Needless to add, since there has been a long gap concerning reimbursement of tax paid by the petitioners, the MCD will reimburse the amount at the earliest, though not later than eight (08) weeks from the date of receipt of a copy of the judgment. Petition disposed off.

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• Income Tax

• 2024 (1) TMI 428
  Addition u/s 36(1)(vii) on account of provisions of bad and doubtful debts, Addition on account of foreign exchange fluctuation - Addition made on account of disallowance of depreciation - effective ownership - Addition made while computing book profits u/s.115 JB - HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the High Court. [ 2017 (5) TMI 1497 - RAJASTHAN HIGH COURT] Hence, the Special Leave Petition is dismissed. Allowance of business expenditure u/s. 37 incurred on foreign tour of wife of the Director of the Company,100% deduction u/s.80IA specifically when the assessee company itself and claimed deduction @ 30% u/s. 80IA, Computation of Minimum Alternate Taxation (MAT) u/s 115JA, Cancelling the rectification order under Section 154 and deleting the interest levied u/s.234C by ITA, Validity of revised return - justification of holding that the revised return u/s 139(5) was a valid return, Addition account of downward impact of Retention Price Subsidy, Addition in respect of fees paid to a consultant for drafting the shareholders agreement, Addition made on account of purchase of software being capital in nature, Depreciation on catalyst not allowable under Section 32 - Accrual of income, MAT computation - AO jurisdiction, Allowable business expenditure, Addition u/s 40A - HELD THAT:- Post along with CHAMBAL FERTILIZERS AND CHEMICALS LTD [ 2019 (11) TMI 1581 - SUPREME COURT] Levy of penalty u/s 271(1)(c) - MAT - computation of income u/s 115JB - adjustments towards bad debts - As decided by HC [ 2017 (5) TMI 1606 - RAJASTHAN HIGH COURT] penalty cannot not be imposed on the assessee since, the original appeal was decided in favour of the assessee - HELD THAT:- We adjourn this matter for two weeks to enable Mr. Arijit Prasad, learned senior counsel to verify, if any similar matters are pending.

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• 2024 (1) TMI 427
  Seeking issuance of refund along with up-to-date interest - Petitioners states that despite absence of any demand outstanding against the Petitioner for AY 2000-01, refund due to the Petitioner for AY 2014-15 was adjusted against non-existent demand for AY 2000-01 due to inaction of the Respondents in passing the appeal effect order for AY 2000-01 - also stated no adjustment was called for on the said date of adjustment as the demand for AY 2000-01 already stood deleted and cancelled and no demand can be adjusted against the refund without passing a speaking order under Section 245 of the Act. HELD THAT:- Keeping in view the limited relief sought in the present writ petitions, the same are disposed of with a direction to the Assessing Officer to pass an appeal effect order within four weeks and refund the amount along with interest, if any, in the petitioner s bank account within a further period of four weeks. Since learned counsel for the petitioner states that the rectification application for A.Y. 2015-16 dated 24th January, 2023 is most comprehensive, this Court directs the Assessing Officer to decide the same in accordance with law within four weeks, and refund the amount along with interest, if any, in the petitioner s bank account within a further period of four weeks.

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• 2024 (1) TMI 426
  Validity of reopening of assessment - investment in shares in an Indian subsidiary - as submitted notices u/s 148A(b) had been issued in the present batch of matters in accordance with the Risk Management Strategy formulated by the Central Board of Direct Taxes ( CBDT ) - HELD THAT:- The admitted facts in the present batch of matters are that the assessees are foreign companies who have made remittances/investment in shares of their Indian subsidiaries. It is an admitted position that the transactions in question are capital account transactions. Though there is a doubt expressed that the transactions in question may be a consequence of round tripping, yet no evidence or proof of the said allegations have been stated or annexed with the impugned orders and notices. It is settled law that investment in shares in an Indian subsidiary cannot be treated as income as the same is in the nature of capital account transaction not giving rise to any income. In Nestle SA Versus Assistant Commissioner of Income Tax [ 2019 (8) TMI 934 - DELHI HIGH COURT ] this Court held that the allegation of the Revenue that the investment in the shares of Indian subsidiary amounted to income is flawed. The action of the Respondents is in contravention of the CBDT Instruction No. 2 of 2015 dated 29th January, 2015 reiterating the view expressed by the Bombay High Court in Vodafone India Services Pvt. Ltd. Versus Union of India [ 2014 (10) TMI 278 - BOMBAY HIGH COURT ] that no income arises on investment in shares since it is a capital account transaction. Further, this Court in Divya Capital One Private Limited (Earlier Known as Divya Portfolio Private Limited) [ 2022 (5) TMI 1016 - DELHI HIGH COURT ] held that Whether it is information to suggest under amended law or reason to believe under erstwhile law the benchmark of escapement of income chargeable of tax still remains the primary condition to be satisfied before invoking powers under Section 147 of the Act . Consequently, the impugned orders under Section 148A (d) of the Act and the notices passed under Section 148 of the Act and all consequential action taken thereto are set aside. It is clarified that if any material becomes subsequently available with the Revenue, it shall be open to it to take proceedings in accordance with law. The challenge to the vires to Explanation 1 to Section 148 of the Act is left open.

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• 2024 (1) TMI 425
  Validity of faceless assessment - Jurisdiction of concerned AO - as argued jurisdictional AO is the Deputy Commissioner of Income Tax, Central Circle 2(1), Bangalore [the first respondent] and as such, ACIT, NaFAC-1(1)(2), Delhi [the second respondent] could not have assumed jurisdiction to issue notice because the jurisdiction of the first respondent has not been decentralized insofar as the petitioner - HELD THAT:- In the present case, at the first instance, Sections 143[3A] 143[3C] are incorporated into the Act enabling Notification of a Scheme for the purposes of making assessment u/s 143[3] or Section 144 to usher in efficiency, transparency and accountability in the assessment proceedings and stipulating that the Central Government may, for the purposes of giving effect to the Scheme proposed, direct, by a Notification in the Official Gazette, that any of the provisions of the IT Act relating to the assessment of total income or loss shall not apply or shall apply with such exceptions, modifications and adaptations. In exercise of this power, the Central Government has notified Faceless Assessment Scheme, 2019 and the CBDT, which is conferred with powers to ensure that assessment shall be under the Scheme in respect of certain persons or class of persons or class of incomes under the terms of the Scheme, has issued order dated 13.08.2020 u/s 119[2] stipulating that all assessment orders shall be by the National E-Assessment Centre through the Faceless Assessment Scheme, 2019 except insofar as the cases assigned to Central Charges and International Taxation Charges. With the CBDT also issuing appropriate notification in exercise of powers under Section 143[2] of the IT Act authorizing certain officers as the Prescribed Income Tax Authority for the purposes of this section, notices have been served on all assessees, including the assessees in the case of Central Charges and International Taxation Charges, and because of the order dated 13.08.2020, the assessment proceedings insofar as the aforesaid two categories are carried forward by the jurisdictional AO. This arrangement with the necessary statutory orders is part of the Scheme notified in exercise of powers under Section 143[3A] 143[3C]. The terms of the Scheme which is part of the Scheme notified under sub-delegation is brought into the enactment with the introduction of Section 144B of the IT Act, and thus, the Faceless Assessment Scheme, 2019 is repealed with this enactment. It must be observed at this stage that it is not pointed out to this Court that the National Faceless Assessment Scheme which is now part of the Statute contained any condition that would be inconsistent with the arrangement under the Faceless Assessment Scheme, 2019 or that the CBDT has issued any directions to the contrary. This Court must opine that there is a transition from a Scheme notified under the provisions of the IT Act to a Scheme under the IT Act incorporation all the essential without material changes insofar as assessments generally and assessments in the cases of Central Charges and International Taxation Charges and there is nothing in this transition, including the provisions of Section 144B or the CBDT s Order, to infer exclusion of the operation of CBDT s order dated 13.08.2020. This Court must therefore conclude that the operation of the CBDT s order dated 13.08.2020 is saved by the application of the Section 24 of the General Clauses Act, 1897. Jurisdiction of the Prescribed Income Tax authority to issue notice under Section 143[2] of the IT Act under the National Faceless Assessment Scheme - Section 124[3] prescribes the time limit. Where a return is filed under Section 115WD[1] or under Section 139[1], an Assessee cannot call in question the jurisdiction of the Assessing Officer after the expiry of one month from the date on which the assessee is served with notice under Section 143[2] or 143[1] or 115WE[2] and after the completion of assessment but on the condition that the earlier of the two will apply. The provisions of Section 124[1] relate to the territorial jurisdiction and determination of the questions relating to territorial jurisdiction when raised within the time limit under Section 124[3] by the officers mentioned in Section 124[2]. The provisions of Section 124 stipulate that when an assessee calls in question the jurisdiction of the Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under Section 124[2]. These provisions, it is argued, is limited to those cases where territorial jurisdiction is challenged, but even according to the decision [CIT v. Ramesh D Patel [ 2014 (2) TMI 29 - GUJARAT HIGH COURT ] relied upon by the petitioner, these provisions mainly refer to the territorial jurisdiction. It is implicit from this that the restriction under Section 124[3] of the IT Act on the right to raise the question of jurisdiction must extend to all grounds on which jurisdiction is called in question. If the right to call in question the jurisdiction is left open to be raised at any stage, the proceedings will remain inconclusive and that could not have been the intendment of the legislature. Therefore, this Court must opine that the petitioner must fail even on the second question. Petitioner, because of the undertaking given by the respondents before this Court, which is continued through these months, has had the advantage of not tendering the further installments in terms of the order 20.12.2022. However, with the disposal of this petition answering the questions framed against the petitioner, the petitioner must necessarily pursue its appeal subject to deposit of further installments in terms of the order dated 20.12.2022 starting from 20.01.2024. The petition is rejected, and the petitioner, in terms of the orders of the Principal Commissioner of Income Tax, Central, Bengaluru, shall be at liberty to pay installments due but from the month of February 2024.

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• 2024 (1) TMI 424
  Addition u/s 56(2)(vii) (b)(ii) - stamp value on the date of registration v/s stamp valuation on the date of agreement to be taken into consideration - AO took stamp value as on the date of registration and declined to give relief of the first proviso to s. 56(2)(vii)(b) of the Act on the premise that the phrase used in the said proviso is may be taken and not shall be taken - HELD THAT:- First proviso to section 56(2)(vii)(b) categorically provides that where the date of agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement maybe taken for the purpose of this provision. Admittedly, the agreement fixing the consideration was entered into on 21.06.2022 fixing the value of Rs 1.82 crores and the sale deed was registered on 13.08.2013. Prescription of the second proviso is admittedly fulfilled in the instant case inasmuch as the assessee paid a sum of Rs. 26 lakhs in FY 2010-11 (i.e. on 17.06.2010 i.e. even before the date of the agreement to sell being 21.06.2022) as part payment through banking channel. Provisions of s. 56(2)(vii)(b) do not apply to the facts of the instant case as it is covered by the first and second provisos inasmuch as the assessee entered into an agreement fixing the amount of consideration for the purchase of the immovable property in the year 2010 but the actual registration took place in 2013 and, further, the assessee paid a part of the consideration by cheque in the year 2010 before the date of the agreement. In such circumstances, we hold that, it is the stamp value on the date of agreement in the year 2010, has to be considered. Apeal of the assessee is allowed.

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• 2024 (1) TMI 423
  Addition u/s 68 - unsecured loans raised from 12 entities/companies along with interest as unexplained cash credit - AO made the addition on the basis of statements of three persons, which were extracted in the assessment order also - HELD THAT:- We find that the assessee has raised loans from twelve entities, the details of which were given in the assessment order in para 3. We note that the assessee has also paid interest on these loans after deduction of tax at source and the details were also given in the same table. The tax deducted at source was also deposited in the Government Treasury. We would like to note that these loans were repaid through banking channel even prior to passing of the assessment order by the ld. Assessing Officer. The assessee has filed copies of ITR acknowledgments, master-data of the lenders, audited financial statements, Memorandum Article of Associations, copies of bank statements, loan confirmations and ledgers showing receipt and refund of loans alongwith TDS details in respect of each of the lenders. We note that the six parties, to whom notices were served, have duly responded and replied with all the requisite details. Where the assessee has filed all the evidences concerning transactions to establish the identity and creditworthiness of the lenders and to prove the genuineness of the transactions and the ld. Assessing Officer has not carried out any further verification, the addition cannot be made in the hands of the assessee. AO must examine the issue in the cases of creditors and make the addition there and not in the hands of the assessee. The assessee has discharged its initial burden and the burden shifted on the AO to enquire further into the matter by filing the evidences, which he failed to do. Accordingly, we set aside the order of ld. CIT(Appeals) and direct the ld. Assessing Officer to delete the addition. Decided in favour of assessee.

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• 2024 (1) TMI 422
  Estimation of commission income - Entitlement to enhanced estimated expenditure - During the course of survey, it was found that the assessee was providing bogus bills of purchase / sales and accommodation loan entries on commission basis - HELD THAT:- As assessee has not been given set off against the amount mentioned in column F in the table, for the amount mentioned in column D and E respectively and Assessing Officer has computed the balance irreconcilable amount, which is wrong. Therefore, assessee is entitled to claim enhanced estimated expenditure from 20% to 50%. Hence, we find merit in the submissions of the ld Counsel to the effect that deduction on account of estimated expenditure @ 20% of the gross commission, should be increased to @ 50% of the gross commission. Therefore, we direct the assessing officer to allow estimated expenditure @ 50% of the gross commission. Therefore, ground No.2 raised by the assessee is allowed partly. Difference in interest income between interest as per Form 26AS and interest income shown in the Return of Income - Whether it will tantamount to double addition? - HELD THAT:- We find merit in the propositions canvassed by assessee that addition on account of difference in interest income between interest as per Form 26AS and interest income shown in the Return of Income, treated as alleged undisclosed interest income from alleged accommodation loan entries of loans to various parties, which is not acceptable. Since the alleged accommodation loan was treated as bogus and assessing officer made estimation addition, hence addition on account of difference in interest income, is tantamount to double addition, hence the same is hereby deleted. Decided in favour of assessee.

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• 2024 (1) TMI 421
  TP Adjustment - Interest on delayed payments from its AE s - proposed to benchmark the outstanding receivable from associate enterprises as separate transaction in the light of s. 92E and directed the AO for appropriate transfer pricing adjustment towards interest on delayed payments from its AE s consistent with arm s length principles - HELD THAT:- We find merit in the plea of the assessee that the assessee being a foreign entity, the overdue receivables do not act detrimental to the Indian Transfer Pricing regulations and determination of ALP in the instant case. The delay in payment of such receivables if any, do not appear to operate to the prejudice of the revenue. Secondly, the issue is also covered in favour of the assessee by the observations in Kusum Healthcare ( 2017 (4) TMI 1254 - DELHI HIGH COURT ) that once the working capital adjustment is given on account dues receivables, it ordinarily subsumes the interest on receivables and no separate benchmarking for it is needed. We thus direct the Assessing Officer to reverse and cancel the adjustment in question. Appeal of assessee allowed.

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• 2024 (1) TMI 420
  Eligible assessee in terms of section 144C(15) - assess assessee s income u/s 143(3) - requirement to pass a draft assessment order u/s 144C(1) - HELD THAT:- As assessee has returned income of Rs. 4,49,20,980/- and the AO has completed the assessment adopting the same income. The variation, if any, is with regard to the taxability of the said income. While the assessee has claimed that the income is not taxable under the provisions of tax treaty, the AO has rejected such claim. Thus, essentially, the AO has not made any variation to the returned income, which is prejudicial to the interest of assessee. In case of Amadoroco Limited vs. ACIT [ 2023 (3) TMI 211 - ITAT DELHI] while faced with a similar situation, has held that in cases, in which no variation in the income or loss returned is proposed by the Assessing Officer, there is no requirement for passing draft assessment order in terms of section 144C (1) of the Act. Same view has been expressed by the coordinate Bench in case of M/s. Worldpart Limited vs. DCIT ( 2022 (12) TMI 921 - ITAT CHENNAI ). No contrary decision has been brought to our notice by learned counsel for the assessee. Finance Act, 2020 has amended the provisions of section 144C (1) of the Act by omitting the words in the income or loss returned w.e.f. 01.04.2020. Thus, by virtue of the aforesaid amendment, any variation, which is prejudicial to the interest of the assessee, can lead to assumption of jurisdiction under section 144C(1) of the Act. However, this is a case relating to a period prior to the aforesaid amendment. Therefore, the amendment, being prospective in nature, would not apply. Thus, respectfully following the decisions of the coordinate Benches, we hold that the Assessing Officer has rightfully proceeded to assess assessee s income under section 143(3) of the Act. Additional grounds are dismissed. Nature of receipt - FIS or business receipts - whether the fees received would amount to fees for included services (FIS) under Article 12 of India-USA Double Taxation Avoidance Agreement (DTAA)? - HELD THAT:- FAA himself is of the opinion that the entire skills in no manner be passed on to the client in course of rendering of services. Therefore, what is the extent of skill, knowhow, knowledge etc., which has been made available, has neither been specified nor demarcated. Therefore, the conclusion drawn by learned First Appellate Authority is more in the realm of imagination rather than based on facts. It is fairly well settled, technical knowhow, knowledge, skills etc. can be considered to have been made available when the person acquiring the services is in a position to apply the technology independently. Merely because, the provision of service may require technical input by the person providing the services does not mean that technical know-how, skill etc. are made available to the person receiving such service. In the facts of the present appeal, in our view, the Revenue has failed to establish on record that while rendering services, assessee has made available technical knowledge, know-how, skill etc. to TCG Life Sciences Private Ltd. so as to bring it within the ambit of Article 12(4)(b) of the tax-treaty. That being the factual position emerging on record, we have no hesitation in holding that the fee received by the assessee from TCG Life Sciences Private Ltd. cannot be treated as FIS under Article 12(4)(b) India-USA DTAA. AO is directed accordingly. Assessee appeal is partly allowed.

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• 2024 (1) TMI 419
  Rectification u/s 154 charging interest u/s 234A, 234B 234C - rectification on debatable issue - HELD THAT:- We noted that now assessee filed a copy of one Tribunal judgment in the case of Ms. Priti Pithawala [ 2003 (3) TMI 743 - ITAT MUMBAI] wherein the chargeability of interest u/s. 234A in case of return filed u/s. 147 r.w.s. 148 of the Act was under dispute. This is one of the view of the Tribunal. Even in the case of CIT vs. Salora International Limited [ 2010 (5) TMI 67 - HIGH COURT OF DELHI] held that charging of interest u/s. 234B and 234C of the Act by the ld. AO, as a consequence of the order passed u/s. 154 of the Act, was a debatable issue which a AO could not do by invoking the provisions of Sec. 154 of the Act. Hence, while acting u/s. 154 of the Act, interest u/s. 234A of the Act in the present case cannot be charged. Hence, this jurisdictional issue of the assessee s cross objection is allowed,

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• 2024 (1) TMI 418
  Higher rate of tax u/s 115BBE - Unexplained investment in stock - difference in valuation of stock found during the course of survey conducted u/s. 133A - Addition u/s. 69B - higher rate of tax applied invoking the provisions of section 115BBE - HELD THAT:- As decided in Overseas Leather [ 2023 (4) TMI 1207 - ITAT CHENNAI] wherein when the assessee has explained that the source was from the business and except stock difference, no other investment with any other asset was found and particularly, this unexplained investment is surrendered as business income , in the absence of any other finding, the same has to be assessed as business income and not under the head unexplained investment u/s. 69B As noted that the assessee has declared additional income towards excess stock found during the course of survey and assessee has explained the source for excess stock found during the course of survey i.e., that it was out of income earned from current year business or earlier years business and surrendered the amount, the AO has not done anything to dispute the claim of assessee that the source was not from the business income. Hence, the AO cannot apply the provisions of section 115BBE - assessee also admitted the difference as income, which is not disputed but has to be taxed as normal business income and not as unexplained investment u/s. 69B of the Act. Accordingly, we allow the grounds of appeal of assessee.

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• 2024 (1) TMI 417
  Validity of assessment u/s 153C - date of recording of satisfaction - HELD THAT:- As date of search 22.03.2012 (A.Y. 2012-13) and Date of recording of satisfaction u/s 153C 18.11.2013 (A.Y. 2014-15), thus on going through the judgments of Hon ble jurisdictional High Court and Jasjit Singh [ 2023 (10) TMI 572 - SUPREME COURT] AND RRJ Securities Ltd [ 2015 (11) TMI 19 - DELHI HIGH COURT] we have no hesitation to hold that the Assessments made for A.Y. 2007-08 u/s 153C consequent to the satisfaction note recorded on 18.11.2013 are outside the scope of Section 153C of the Income Tax Act, 1961 and hence, the assessments are treated as void ab initio. Consequently, the assessment made u/s 143(3) for A.Y. 2012-13 shall also be treated as void. Decided against revenue.

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• 2024 (1) TMI 416
  Assessment u/s 153C - incriminating documents seized or any material was found indicating any undisclosed income of assessee or not? - addition u/s 68 - HELD THAT:- We note that additions made by the Assessing Officer, while passing the assessment order u/s 153C of the Act, were without mentioning of any incriminating material found during the course of search, therefore addition made by the assessing officer is not justified. The assessee filed regular return of income on 31.03.2014 and on the date of search, no proceedings were pending. Once completed assessments cannot be interfered, if no incriminating material was found, during the course of search. The assessee cited several case laws before ld CIT(A). The assessee also submitted the judgment of jurisdictional High Court of Gujarat in the case of PCIT Vs. Saumya Construction P. Ltd [ 2016 (7) TMI 911 - GUJARAT HIGH COURT] During the year consideration, AO has made additions considering loan as non-genuine by applying section 68 of the Act, however, these loans were examined by the assessing officer during regular assessment proceedings, hence these loans were not incriminating material, therefore, ld CIT(A) deleted the addition. The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A) and dismiss the ground raised by the revenue. Addition considering the agricultural income as bogus - CIT(A) held that keeping in view of facts that additions made by the Assessing Officer were not based on any incriminating material found during the course of search, even at the third party premises, and the binding judgement of Hon ble High Court of Gujarat, as mentioned above, the additions made by the Assessing Officer were not found justified, hence, ld CIT(A) deleted the addition. That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. Addition of unsecured loans - HELD THAT:- We note that partial additions made by the assessing officer (AO) considering loan taken from the following creditors as non-genuine, were deleted by ld CIT(A), as the assessee has discharged onus to prove identify of the creditors, genuineness of the transactions and creditworthiness of the creditors For part therof since, additional evidences filed before the Tribunal first time and these have not been examined by the Assessing Officer, hence we are of the view that these evidences should be remitted back to the file of Assessing Officer for his examination. Therefore, out of total addition of Rs. 3,34,40,000/- sustained by ld CIT(A), we remit the various creditors mentioned in para (xxxi) of ld CIT(A) order, at Rs. 1,86,65,000/- to the file of the assessing officer for his examination and to adjudicate the issue in accordance with law and balance addition of Rs. 1,47,75,000/- (Rs.3,34,40,000- Rs. 1,86,65,000) is hereby deleted. Thus, ground no.1 raised by the assessee is partly allowed in above terms. Bogus agricultural income - CIT(A) deleted addition - HELD THAT:- CIT(A) noted that assessee was subjected to search on 27.12.2012 and assessment of 6 years was made u/s 153A - During the course of search, no evidence was found which shows that the assessee is inflating the agricultural income, reopening in view the above documents, the addition made by the AO was not found justified by ld CIT(A), hence, ld CIT(A) deleted the addition. We have gone through the above findings of ld CIT(A) and noted that there is no infirmity in the order of ld CIT(A). That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. Exemption u/s 54B - assessee submitted the sale deed of the property sold and purchased, however, no details in relation to agricultural activity being carried out on that land sold, are submitted by the assessee and assessee simply submitted the computation of income showing the agricultural income - HELD THAT:- We note that CIT(A) has himself admitted that assessee is owning agricultural land which was used for agricultural purpose during past two years before the date of transfer. Ongoing through the facts of the case, the assessee s contentions have been found factually correct that assessee is owning agricultural land which was used for agricultural purpose during past 2 years before the date of transfer, as seen from 7/12 and 8A form, return of income filed by the assessee and assessment made by the AO for various assessment years u/s 153A of the Act, after search was conducted upon the assessee, on 27.12.2012. Thus, the assessee has satisfied the conditions prescribed about the land sold, despite this fact ld CIT(A) denied exemption under section 54B of the Act. We note that assessee is regularly showing agricultural income for several years in the income tax returns filed and the same was accepted by the department even in the assessment under passed u/s 153A of the Act after search was conducted upon assessee on 27.12.2012. Therefore, we note that assessee has satisfied the condition prescribed u/s 54B of the Act, therefore exemption should be granted to the assessee u/s 54B of the Act, hence, we allow exemption under section 54B.

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• 2024 (1) TMI 415
  Bogus LTCG - share price increased multi-fold - Allegation that there is artificial increase by circular trading of shares forming carte - HELD THAT:- We observe that the assessee is not the regular investor and had specifically made the investment in the scrip under consideration. It is fact on record that the financials of the company are not commensurate with the purchase and sale price in the market. Assessee has purchased the shares from open market, D-mated the scrips and subsequently sold the same in the stock exchange. It clearly raises several doubt on the purchase and sales transactions recorded in this case. However, there is no discrepancies in the documents filed by the assessee claiming the deductions u/s 10(38). At the same time, even though all the characteristics of the penny stock exists in the present case, still the revenue has not brought on record any materials linking the assessee in any dubious transactions relating to entry, price rigging or exit providers. Even in the SEBI report, there is no mention or reference to the involvement of the assessee. We can only presume that the assessee is one of the beneficiary in this transactions merely as unsuspecting investor, who has entered in investment fray to make quick profit. Even the assessing officer has applied the presumptions and concept of human probabilities to make the additions without their being any material against the assessee. Decided in favour of assessee.

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• 2024 (1) TMI 414
  Disallowance u/s 14A r.w.r. 8D - expenditure incurred earning exempt income - sufficiency of own funds - HELD THAT:- In the instant case, the Revenue has not been able to controvert the fact that own funds of assessee are much more than the investments made. There being no distinction in facts in the impugned assessment year, following the decision of Co-ordinate Bench in assessee s own case Assessment Year 2002-03 [ 2023 (4) TMI 1284 - ITAT MUMBAI] the disallowance made u/s. 14A of the Act is directed to be deleted for parity of reasons. As regards application of Rule 8D , it is no more res-integra that Rule 8D would apply from Assessment Year 2008-09 onwards and would not apply retrospectively.{Re. Godrej Boyce Mfg. Co. Ltd. vs. DCIT, [ 2010 (8) TMI 77 - BOMBAY HIGH COURT] . Hence, the provisions of Rule 8D cannot be invoked in the impugned Assessment Year. In the result ground No.1 2 of appeal are allowed. Income taxable in India - interest paid by Indian branch to its Head Office /Overseas branches is taxable in the hands of assessee under the provisions of DTAA - HELD THAT:- We find that similar issue was raised in the appeal by the Revenue [ 2023 (4) TMI 1284 - ITAT MUMBAI] analyzed the issue of interest paid by Indian Branchto Head Office/ Overseas Branches with reference to provisions of the Act as well as DTAA and concluded such payment of interest by Indian Branch is not chargeable to tax in India. In the absence of any contrary material we see no reason to take a different view, hence, ground No.3 of the appeal is allowed for parity of reasons. TP adjustment made in respect of correspondent banking services - HELD THAT:- It is the case of Transfer Pricing adjustment and not a case of determination of taxability of income in international taxation, as has been tried to be portrayed by the assessee. TPO while analyzing the transaction came to the conclusion that if the same services were to be rendered by the Indian Branch in an uncontrolled environment with the third party, the Indian Branch would have added markup to the cost, hence, the payment for correspondent banking charges is not at arm s length. It was not the case of assessee before the TPO that receipt from correspondent banking charges is not taxable by virtue of DTAA. We find no infirmity in the findings of CIT(A) on this issue, hence, ground No.4 of appeal is dismissed. Disallowance of interest expenditure towards earning income on foreign currency loan - HELD THAT:- We find that this issue is recurring and was considered by the Tribunal in Assessment Years 1997-98, 1998-99 and 2002-03 in appeal by the Department for the respective Assessment Years as held that the legislature has intended to tax the interest only on gross basis. Further in support of his arguments ld. A.R has also cited Article 10 11 of DTAA with Canada. Notification No.10503(F No.505/2/87-FTD) reference 229 ITR 44(St.) Further it has also been mentioned that section 90(2) of IT Act also provides that the provisions of this Act shall apply to the extent they are more beneficial to that assessee. The order of the first appellate authority is quite elaborate on this subject and needs no interference, therefore, under the totality of the circumstances and in view of the specific provisions of the Act we hereby dismiss this ground of the Revenue. Addition in respect of salary paid to expatriate employees working in India - CIT(A) deleted the addition - HELD THAT:- We find that the issue in the impugned assessment year is similar to the one considered by the Co-ordinate Bench in Assessment Year 2002-03 [ 2023 (4) TMI 1284 - ITAT MUMBAI] wherein Tribunal decided the issue against the Revenue to conclude that payment of salary to expatriate employees paid by the head office is an allowable expenditure in view of Article 7(3) of the DTAA and section 37 of the Act and such expenditure does fall within the ambit of section 44C of the Act. We find no infirmity in the findings of CIT(A) on this issue. Computation of deduction u/s. 36(1)(vii) - consideration of closing balances for provision for bad debt - HELD THAT:- We find that the issue in the present appeal is similar to the one considered by the Co-ordinate Bench in appeal of the Revenue for Assessment Year 2002-03[ 2023 (4) TMI 1284 - ITAT MUMBAI] placing reliance on the decision in the case of CIT vs. UTI Bank Ltd., [ 2013 (1) TMI 209 - GUJARAT HIGH COURT] and CBDT Instruction No.17/2008 dated 26/11/2008 dismissed the ground raised in appeal by the Department. No fresh material has been placed on record by the Revenue to distinguish the findings of the Co-ordinate Bench on this issue, hence, following the decision of Co-ordinate Bench ground No.3 of appeal is dismissed.

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• 2024 (1) TMI 413
  Disallowance of interest u/s. 36(1)(iii) - loan borrowed for the purpose of settling outgoing partners capital account - character of loan borrowed - HELD THAT:- Interest paid on capital account of partners partakes the nature of funds borrowed for the purpose of business of the assessee and consequently, interest paid on said capital account needs to be allowed as deduction u/s. 36(1)(iii) of the Act. In so far as interest paid on loan borrowed from Punjab National Bank, the AO has not disputed that the assessee s firm has borrowed Rs. 19 Crs. loan from Punjab National Bank. The said loan has been borrowed for the purpose of business of the assessee s firm, because, the firm was carrying on the business of running hotel called the Hotel President which was owned by the partnership firm which is evident from the financial statement of the assessee for earlier years where the property is in the name of partnership firm and the assessee has claimed depreciation on building. Loan from Punjab National Bank has been borrowed to settle the capital account of retiring partners. As we have already stated in our earlier part of this order, unless the firm settle the outgoing partners capital account, which is nothing but a debt of the firm business cannot be run smoothly, because, the entire business of the assessee is running a hotel. Therefore, in our considered view, any loan borrowed for the purpose of settling outgoing partners capital account which has been treated as debt in the books of accounts of the firm assumes the character of loan borrowed for the purpose of business of the assessee, and consequently, interest paid on borrowed capital account is allowable deduction u/s. 36(1)(iii) of the Act. Sole basis for the AO to disallow interest paid on partners capital account and loan borrowed from Punjab National Bank is on the ground that payment to outgoing partners is nothing but family settlement - AO and CIT(A) were completely erred in coming to the conclusion that reconstitution of partnership firm to retire partners and settle their account cannot be considered as family settlement, because, asset was brought into the books of accounts of the partnership firm. Further, the firm has developed the property and exploited the property for the purpose of running its business. The firm has claimed depreciation on building, on which, the hotel was constructed and managed. Therefore, when the asset was owned by the partnership firm, any settlement out of assets belong to the firm to the outgoing partners, cannot be considered as settlement of family property, just because, the partners were family members. Therefore, it is very clear that retired partners taking a portion of value of firm s assets and thus, just because, the asset has been revalued before reconstitution of partnership firm, cannot be a reason for the AO to treat the settlement of firm properties among partners as settlement of family property. As relying on Narayanappa v. Bhaskara Krishnappa [ 1966 (1) TMI 75 - SUPREME COURT ] share of partner in partnership assets means his proportion share in the assets of the firm is net of liabilities. Therefore, when the outgoing partners are taking out their share in the assets of the firm, the Fair Market Value of the assets needs to be ascertained. In the present case, the assessee has revalued the assets to ascertain the Fair Market Value of the assets of the firm before settlement of retiring partner s shares in the proportionate assets of the firm. Therefore, we are of the considered view that the AO and the CIT(A) erred in holding that settlement to partners is a family settlement and the same cannot be considered as settlement of firm assets. We are of the considered view that there is no dispute with regard to the fact that the sole business of the partnership firm is running hotel and said business was owned by the partnership firm. On retirement, the outgoing partners has been paid their proportionate share in the assets of the partnership firm. The firm has borrowed loan from Punjab National Bank and raised fresh capital from incoming partner to settle the debt/capital account of retiring/outgoing partners. The settlement of capital account of outgoing partners becomes debt of partnership firm and discharge of said debt out of borrowed funds assumes the character of loans/funds borrowed for the purpose of business of the assessee. Since, the loan borrowed from the Bank and capital raised from incoming partner is for the purpose of business of the assessee, any interest paid on said loan and capital account is nothing but interest paid on loan borrowed for the purpose of business of the assessee and allowable u/s. 36(1)(iii) - AO and the Ld.CIT(A) without appreciating the relevant facts simply disallowed interest paid on partners capital account and interest paid on loan from Bank. Therefore, we direct the AO to delete the additions made towards disallowance of interest u/s. 36(1)(iii) of the Act. Appeal filed by the assessee is allowed.

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• 2024 (1) TMI 412
  TP adjustment made in Manufacturing segment - MAM selection - CUP or TNM - HELD THAT:- In view of the consistent with the view taken in the earlier year, we set aside the transfer pricing adjustment made in the manufacturing segment and direct the TPO/AO to re-compute ALP of that segment under TNM method. TP Adjustment made in respect of fees paid for technical support services - Comparable selection - HELD THAT:- M/s Excel Infoways Ltd is not a good comparable company which is in the process of closing down its ITES segment and also because of the factum of fluctuating margins, could not be selected as functionally comparable to the assessee. Following the same parity of the reasons, we hold that the said concern i.e. Excel Infoways Limited, because of different factors and also fluctuating to be excluded from final set of comparables. M/s Hartron Communications Ltd. cannot be considered as a comparable company as it has achieved extraordinary profits during the relevant assessment year and further it has diversified activities and therefore functionally dissimilar to that of the assessee company. Appeal filed by the assessee is treated as allowed.

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• 2024 (1) TMI 411
  Validity of Reopening of assessment u/s 147 - Addition u/s 68 - assessee had failed to discharge its onus of establishing genuineness of creditworthiness of the parties - HELD THAT:- While here is a case where Ld. AO intends to make an addition u/s 68 of the Act, for any sum found credited in the books, by rebutting the explanation given by the assessee u/s 68 of the Act, on the basis of incriminating material found in the search of another person who has also been subject to assessment u/s 153A. We are of considered opinion that the assessment of the any assessee, whose explanation u/s 68 is being discredited on the basis of incriminating evidence found elsewhere alone, then the assessment of such other person should be u/s 153C as other person , and not u/s 147. In the case in hand a thorough examination of the reasons for reopening and the manner in which the ld. AO has relied the incriminating evidences and materials allegedly recovered in the hands of S.K. Jain and the intermediary that only go to show that Ld. AO has fallen in error in invoking powers of Section 147/148 in the absence of reasons of satisfaction being drawn u/s 153C by the Assessing Officer of the searched person. CIT(A) has fallen in error is not examining the assessment order to see as to how the AO exclusively and extensively relied only the alleged incriminating material found in the case of S.K. Jain Group of Companies to make addition under 147/148. Appeal of assessee allowed.

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• 2024 (1) TMI 410
  TDS liability u/s 194N - Payment of amount in Cash to co-operative societies - Amounts paid to PACCS towards Pongal Inam/gift and agrarian loans given by the State Government. - demand raised u/s 201(1) / 201(1A) for default in deduction of tax at source - The funds have been transferred by the assessee to various Co-operative societies who apparently do not fall under the exception clause - HELD THAT:- The assessee and similar other assessees have already approached Hon ble High Court of Madras in Writ jurisdiction wherein the recovery of demand has been stayed by Hon ble Court but the final adjudication is pending. As rightly pointed out by Ld. Sr. DR, the latest decision has been rendered by Hon ble Court in the case of Primary Agricultural Co-operative Credit Societies titled as Erode Mavatta Valaman Thodakka [ 2023 (8) TMI 42 - MADRAS HIGH COURT] As seen that Hon ble Court has granted six weeks time to Ministry of Finance, Government of India and the CBDT, New Delhi to decide the request made by the Government of Tamil Nadu through the letter of the Chief Secretary to Government of Tamil Nadu dated 27-9- 2022, seeking exemption for all those Primary Co-operative Credit Societies functioning in the State of Tamil Nadu from the purview of Section 194N of the Income-tax Act and accordingly pass orders thereon and communicate the same to the State of Tamil Nadu. The issue of applicability of Sec. 194N to the PACCS has thus been directed to be considered by the appropriate organs of the Government of India. The bench has been made aware that the same is still pending for disposal. Thus bench is of the considered opinion that the aforesaid disposal by appropriate authorities would have direct bearing on the demand raised against the assessee and the issue of applicability of Sec. 194N to co-operative societies, itself, is under consideration by appropriate authorities. On this fact, the bench deem it fit to set aside the impugned orders passed by learned first appellate authority, in all the appeals, and restore all the appeals back to the file of Ld. CIT(A) keeping all the issues open. CIT(A) shall adjudicate the appeals de-novo in the light of outcome of aforesaid disposal of representation made by Government of Tamil Nadu before appropriate authorities. All these appeals stand disposed-off accordingly.

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• 2024 (1) TMI 409
  Reopening of assessment u/s 147 - unexplained investment under construction of work - eight group companies gathered and entered in to agreement with Global Enterprises a partnership firm, wherein the directors of all the eight companies are partners and there was equivalence among the corporate entity and partners of Global Enterprises and only funds were brought in Global Enterprises. The profits were to be assesses in the hands of the owners of the project that is corporate entities, which returned nill income - HELD THAT:- We find that Pursuant to search and survey action the assessment of Global Enterprises for three assessment years. The assessing officer in AY 2008-09 made certain other additions, which were deleted by Ld. CIT(A) and the order of CIT(A) was upheld, by the Ahmedabad Tribunal. We find that there is no material on record placed either by assessee or by revenue that cases of other six group entity/ companies were reopened or not under section 147 or revised under section 263. In such circumstances, we assume that no such reassessment action was initiated in remaining six group entity. Only, the case of present assessee was reopened for three assessment years. Thus, the assessment of all six group entity have attained finality. We find that in the reasons recorded itself the assessing officer recorded that 11.64% of profit Rs. 7.93 Crore has escaped from assessment in the hand of present assessee. Such profit has already offered by Global Enterprises and has been accepted by the revenue. We are unable to subscribe that that fact that once, the profit of Rs. 7.93 Crore, which is declared by Global Enterprises and accepted by revenue, as to how its 11.64% being share of assessee can be again brought to tax. The assessing officer and the ld CIT(A) failed to appreciate the settled position under taxing statue that double taxation of similar revenue (income) is not permissible. There was no income which escaped from assessment, the receipt of income as indicated from the reasons recorded itself was taxed by the revenue in the hands of Global Enterprises. Hence, the reasons recorded itself was not sufficient and rather incorrect assumption of facts, based on which the action of reopening was initiated. Accordingly, reopening is not valid and justified and the action initiated thereupon is void ad initio . The issuance of notice under section 148 was based wrong assumption of fact. Therefore, the assessment order passed under section 143(3) rws 147 is quashed. Thus basis of reopening in the case in hand clearly demonstrate that the income which was sought to be brought to tax, has already been taxed and accepted by the revenue. Thus, the assessee succeeded on the primary submissions of ld AR for the assessee on the validity of reopening. Decided in favour of assessee.

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• 2024 (1) TMI 408
  Addition made in the reassessment proceedings on account of profit on on-money receipt - CIT(A) deleted the addition - HELD THAT:- CIT(A) has deleted the addition by following its earlier order in the quantum appeal against the assessment order passed u/s 143(3), whereby the addition made by the AO on account of profit on on-money receipt was deleted. Therefore, the addition made in the original assessment was deleted by the CIT(A) then the enhancement of the said addition in re- assessment proceedings would not survive and cover by the earlier order of the CIT(A). We further note that the appeal filed by the Department against the order of the CIT(A) arising from the original assessment u/s 143(3) was decided by this Tribunal vide [ 2023 (5) TMI 1285 - ITAT INDORE] whereby the appeal of the Revenue was dismissed and the order of the Ld. CIT(A) was upheld. Thus, it is the matter of record that the addition made by the AO on account of profit on on-money receipt in the re-assessment proceedings is now covered by the order of this Tribunal in assessee s own case [ 2023 (5) TMI 1285 - ITAT INDORE] CIT(A) has deleted the addition by following its earlier order against the original assessment order passed u/s 143(3) of the Act. Therefore, in view of the order of this Tribunal confirming the earlier order of the CIT(A) we do not find any error or illegality in the impugned order of the CIT(A) as the issue is now covered by the order of this Tribunal in assessee s own case.

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• 2024 (1) TMI 407
  Exemption u/s 11 - rejection of application for registration u/s 12AA - as per CIT(E) assessee is not engaged in any charitable activities, the assessee is indeed engaged in advancement of any other object of general public utility, which are far exceeds the allowed limit of 20% - as per assessee activity of running a Dharmashala for public at large can not be treated as an activity in the nature of trade, commerce or business, specially when the objects of trust are for No profit motive - HELD THAT:- In view of the aforesaid decision in the case of Ananda [ 2020 (2) TMI 1293 - SUPREME COURT] since the actual activities of the trust cannot be the deciding factor while granting the registration u/s 12A but the object of the trust should have been looked into, the activities have to be looked into by the Assessing Officer at the time of assessment proceedings. It is also a fact that the trust was formed with charitable objects eligible for approval u/s. 12AA of the Act, which is substantiated by the department itself by granting registration u/s 12AA. In such circumstances, we are of the considered opinion that the rejection of application for registration u/s 12AA of the Act by Ld CIT(E) was an erroneous application of law, thus, cannot sustain, accordingly we quash the same and direct to grant registration to the assessee as per law. Decided in favour of assessee.

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• Customs

• 2024 (1) TMI 406
  Seeking release of various models of second hand Highly Specialised Equipment digital Multifunction Print, Copying Scanning Machines, imported by the petitioner - HELD THAT:- In the present case, the petitioner had sought for the release of goods and in a batch of writ petitions, this Court had already dealt with the similar issue and passed the following order on 23.11.2023 in [ 2023 (12) TMI 198 - MADRAS HIGH COURT] , where it was held that This Court is inclined to allow these writ petitions to the extent of releasing the goods provisionally. There shall be a direction to the respondents to consider the plea of the petitioners to release the goods by way of provisional release on condition that, the petitioner shall pay/deposit the enhanced duty amount. On receipt of such enhanced duty amount paid by the petitioners, the goods in question shall be released within a period of three (3) weeks thereafter - For payment of such duty, quantification shall be made by the Customs forthwith within one (1) week from the date of receipt of a copy of this order. On receipt of such quantification, the payment shall be immediately made by the petitioners and on receipt of the payment in entirety, the goods shall be released as indicated above at the outer limit of three (3) weeks. Petition disposed off.

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• 2024 (1) TMI 405
  Change in classification of goods imported - Glass Beads Chatons - It was argued that while glass beads classifiable under Heading 70181020, the chatons are classifiable under heading 70181090 in the category others - HELD THAT:- It is apparent that the custom tariff itself was different when decision of Tribunal in the case of M/s. Art Beads Pvt Ltd [ 2013 (9) TMI 463 - CESTAT MUMBAI ]was given and the same was the condition when the decision of Hon ble High Court of Bombay was given in the case of M/s Starlite Corporation [ 1985 (12) TMI 61 - HIGH COURT OF JUDICATURE AT BOMBAY ]. In both these cases the classification was not being examined under the new custom tariff and in both these cases the explanatory notes given in HSN were not brought to the knowledge of the Courts. In these circumstances, the decisions given in the context of new custom tariff purely relying on the decision of Tribunal in the case of M/s. Art Beads Pvt ltd and that of Hon ble High Court of Bombay in the case of M/s. Starlite Corporation ignoring explanatory notes to the HSN on cannot be relied. In view of clear definition of beads provide in HSN, which is a most reliable guide for the purpose of classification under the custom tariff cannot be ignored. Thus, relying on the definition of the beads given in the HSN notes, it is held that piercing is a necessary requirement for anything to be classified as beads. There is no disputes that the product imported by appellant is not pierced. Therefore, the same cannot be classified as beads. Appeal dismissed.

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• Insolvency & Bankruptcy

• 2024 (1) TMI 404
  Condonation of delay beyond the maximum period - HELD THAT:- There is a delay beyond the maximum period that can be condoned in terms of the provisions of Section 62 of the Insolvency and Bankruptcy Code 2016 - the appeal not entertained since it is barred by limitation. Since the Civil Appeal has been dismissed on the ground of limitation, it needs to be only clarified that this will not come in the way of the appellant pursuing its claim in the pending arbitration proceedings - The Civil Appeal is dismissed on the ground of delay.

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• 2024 (1) TMI 403
  Eligibility of appellant to submit a Resolution Plan for the Corporate Debtor - maximisation of the value of the assets of the Corporate Debtor - Regulations 39(1-B) read with 36B(7) of the IBBI (CIRP) Regulations, 2016 - HELD THAT:- The Adjudicating Authority has consistently allowed opportunity to all the resolution applicants as long as they were as per law. In the first case of M/s SEAHAWK, the order clearly states that the CoC is directed to consider the resolution plan, which is submitted by the Applicant as per law in its order in I.A. No. 3593 of 2022 and subsequently when Jindal Power Limited approached the Adjudicating Authority in I.A No. 3223 of 2023, it again acknowledged that an opportunity be given to submit the resolution plan to maximise the value of Corporate Debtor asset. However, this opportunity will be subject to compliance with the provisions contained in Regulation 39(1-B) read with Regulation 36-B(7) IBBI (CIRP) Regulations, 2016. In the first case, even though opportunity was given to M/s SEAHAWK, it is confirmed by the RP that the resolution plan was not submitted. The claim of SRA viz. SEPOL that this resolution plan was rejected by the RP/COC on the same ground that it is not in compliance with the provisions contained in Regulation 39(1-B) read with Regulation 36-B(7) IBBI (CIRP) Regulations, 2016 and now in the case of JPL they have changed their stand and recommending for resolution plan to be considered. The Regulations do not permit the proposals to be entertained which are not there in the final list of the PRAs and the Adjudicating Authority has acted as per this provisions. If unsolicited plans are obtained at any stage it will cause unnecessary avoidable delay in the CIRP process. If resolution plans are allowed to be submitted at any stage, it will make the whole CIRP process unending. To curtail the delay in the CIRP process, it is appropriate to restrain the tendency to consider resolution plans after the time as specified by the CoC and from someone not in the final list of PRAs. This has been the spirit and justification of newly inserted provisions in the Regulations in 2021 and which has been eloquently described in the Discussion Paper of the IBBI, before changes were brought in and which have also been referred to by SRA viz. SEAPOL. RP/CoC should finalize the proposal at hand which is in a sealed cover with them and was improved as per their suggestions and if it is not satisfied, as per the provisions of Regulation 36B(7) of the CIRP Regulations it can reject the resolution plan submitted by M/s SEAPOL and proceed as per the Code and Regulations. There are no merit in the present Appeal, which if allowed would mean contravention and violation of Regulation 39(1- B) read with Regulation 36-B(7) of IBBI (CIRP) Regulations, 2016 - The Appeal is, therefore, dismissed.

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• 2024 (1) TMI 402
  Approval of Resolution plan - payments to related parties - discrimination in Resolution Plan - HELD THAT:- Related parties cannot claim entitlement of any amount in the plan and cannot claim any discrimination with regard to payments to unrelated unsecured Financial Creditors. Respondent has rightly placed reliance on the judgment of the Hon ble Supreme Court in M.K. Rajagopalan vs. Dr. Periasamy Palani Gounder and Anr.- [ 2023 (5) TMI 344 - SUPREME COURT] where Hon ble Supreme Court had occasion to consider the provisions of the IBC specially the payments to related parties and discrimination in the Resolution Plan. In relation to related party, it was held by the Hon ble Supreme Court that there is no provision in the Code which mandates that related party should be paid in parity with unrelated party. It is also relevant to notice that submission which is advanced by the Appellant is with regard to discrimination in payments to the workers and employees. No workers and employees have any grievance nor any workers and employees is dissatisfied with the payments made under the plan to them nor have they come in Appeal. Plan has been approved with 82.40% vote shares of the CoC - view of the Adjudicating Authority also confirmed that there is no non-compliance of Section 30(2) of the IBC. Thus, no grounds have been made out to interfere with the impugned order which have been challenged in these Appeals - Both the Appeals are dismissed.

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• PMLA

• 2024 (1) TMI 401
  Seeking grant of regular bail - Power to arrest - noncompliance of the mandate of Section 19 of the PMLA - Legality of arrest of the Petitioner - violation of settled tenets of law in Section 41A(3) Cr.PC or not - HELD THAT:- The issue whether the law laid down in MOIN AKHTAR QURESHI VERSUS UNION OF INDIA ORS. [ 2017 (12) TMI 289 - DELHI HIGH COURT] or in RAJBHUSHAN OMPRAKASH DIXIT VERSUS UNION OF INDIA AND ANR [ 2018 (2) TMI 1327 - DELHI HIGH COURT] would be applicable, need not detain this Court any longer, in as much as, it is trite law that pendency of a reference to a larger bench, does not mean that all other proceedings involving the same issue would remain stayed till a decision is rendered in the reference. Till the time, the decisions cited at the bar are not modified or altered in any way, they continue to hold the field . In the present case, there is absolutely no doubt that at the time of arrest of the petitioner i.e., on 09.06.2023, the law laid down in Moin Akhtar Qureshi was holding the field, which position continued till the pronouncement of decision in PANKAJ BANSAL VERSUS UNION OF INDIA ORS. [ 2023 (10) TMI 175 - SUPREME COURT] whereby Moin Akhtar Qureshi and CHHAGAN CHANDRAKANT BHUJBAL, MS. ANJALI DAMANIYA, VERSUS UNION OF INDIA, [ 2016 (12) TMI 1014 - BOMBAY HIGH COURT] were specifically overruled. Meaning thereby that at the time of petitioner s arrest, oral communication of the grounds of arrest was proper compliance of the provisions of Section 19(1) of the PMLA. The above position is also fortified by the observation of the Supreme Court in RAM KISHOR ARORA VERSUS DIRECTORATE OF ENFORCEMENT [ 2023 (12) TMI 785 - SUPREME COURT] wherein the Court held that non furnishing of grounds of arrest in writing till the date of pronouncement of judgment in Pankaj Bansal case could neither be held to be illegal nor the action of the concerned officer in not furnishing the same in writing could be faulted with. Now reverting to the factual conundrum which still looms large in the present case and needs to be decided is whether the petitioner was orally communicated, or in other words shown, the grounds of arrest at the time of his arrest and for this purpose reference to ground of arrest and other contemporaneous documents is imperative - Clearly, the document ground of arrest bears the signatures of the petitioner at two points. One, immediately after the conclusion of narration of grounds of arrest. Secondly, below the endorsement made in terms of the judgment of the Supreme Court in SHRI DK. BASU, ASHOK K. JOHRI VERSUS STATE OF WEST BENGAL, STATE OF UP. [ 1996 (12) TMI 350 - SUPREME COURT] to the effect that the petitioner has been intimated about his rights as an arrestee and his wife has been informed about his arrest physically at 22.28 on 09.06.2023. Therefore, there is no substance in petitioner s contention that the signature of the petitioner on the ground of arrest is only a token of acknowledgement of the compliance of mandate of D.K. Basu. Therefore, merely because each page of the ground of arrest is not signed by the petitioner cannot be a reason to disbelieve the existence of the said document, or to negate the fact that the grounds of arrest were shown and informed to the petitioner. This Court to sum up, the findings which have been recorded in the remand order dated 10.06.2023, as corrected by order dated 20.06.2023, as follows (i) the contention of the Ld. Counsel for the accused that the petitioner/accused was not informed about the grounds of his arrest, is contrary to the records, (ii) the petitioner/accused has been shown the grounds of his arrest, and (iii) the grounds of arrest have been duly signed by the petitioner and countersigned by two independent witnesses. The issue deserves to be considered from yet another angle. The respondent/ED had moved an application Section 167 Cr.P.C. seeking remand of the petitioner and a copy of same was undisputedly served upon the learned counsel for the petitioner before the learned Special Judge on 10.06.2023. The remand application when juxtaposed with the ground of arrest reveals that the remand application virtually contains the grounds of arrest, therefore, in view of the law laid down in Moin Akhtar Qureshi the petitioner stood informed of the grounds of arrest in terms of Section 19(1) of the PMLA when he was produced before the learned Special Judge within twenty-four hours of his arrest by the ED for seeking his remand. Concerned officer did not forward a copy of the arrest order along with the material in his possession immediately to the Adjudicating Authority in terms of the mandate of sub-section (2) of Section 19 of the PMLA - HELD THAT:- The petitioner was arrested on 09.06.2023 at 10:25 pm, which happened to be a Friday night. There is substance in the contention of Mr. Hossain that on Saturday i.e. 10.06.2023 and Sunday i.e. 11.06.2023 the office of the Adjudicating Authority remained closed, therefore, copy of arrest order along with other relevant material was immediately forwarded on 12.06.2023. It is trite law that where a period is prescribed for the performance of an act in a Court or office, and that period expired on a holiday, then according to Section 10 of the General Clauses Act, 1897, the act should be considered to have been done within that period, if it is done on the next day on which the Court or office is open. The obligation flowing from the expression immediately occurring in Section 19(2) of the PMLA has to be given meaning depending upon the context and the manner in which arrest order along with other material is to be forwarded to the Adjudicating Authority in accordance with the rules - Further, it is well settled that when the statute provides something to be done in a particular manner it can be done in that manner alone - there is no delay in forwarding a copy of the Order of Arrest along with the material to the Adjudicating Authority. Thus, it cannot be said that the arrest of the petitioner is illegal. Under the circumstances, the petition and bail application deserve to be dismissed and, are accordingly dismissed.

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• Service Tax

• 2024 (1) TMI 400
  Time Limitation - whether the show cause notice issued in the present case is beyond the period of five years? - HELD THAT:- From the provisions of Clause 6 of section 73, the period of five years shall be computed firstly from the date of filing the return. Secondly, where no return is filed the last date on which such return is to be filed. Lastly, the date on which the service tax is to be paid. As per rule 6, the liability to pay the service tax accrues by the 6th day of the following month and as per Rule 7 the assessee is required to submit the half yearly return by the 25th of the following month. In the present case for the period 1.04.2008 to 30.09.2008 the return was required to be submitted by 25th of October, 2008, which would be the relevant date for computing the period of five years. Therefore, the show cause notice issued on 21.04.2014 for the period in question is beyond the period of five years. It is a settled position that no demand can be raised beyond the period of five years. The assessee is correct in saying that the show cause notice is barred by time and is unsustainable. Neither the demand is maintainable nor the interest and penalty is leviable - the impugned order deserves to be set aside - appeal allowed.

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• 2024 (1) TMI 399
  Levy of service tax - declared service or not - amount of compensation received by the appellant on the act of tolerance by receiving the claim for poor quality of the goods - HELD THAT:- On going through the credit note, the amount is shown as claim raised by the appellant on account of poor quality of the material supplied which is in nature of compensation received by the appellant for receiving poor quality of goods. The said act is covered under declared service under sub-section (e) of section 66 (E) of the Finance Act, 1994 as it is an act of tolerance by the appellant for which appellant received compensation for receiving poor quality of goods. There are no merit in appeal filed by the appellant. Accordingly, the same is dismissed.

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• 2024 (1) TMI 398
  Classification of services - Banking and Other Financial Services - providing of tips/information related to shares of various companies which are traded at National Stock Exchange and Bombay Stock Exchange to it s clients - time limitation - Cum tax value for quantification of the demand - HELD THAT:- In the present matter undisputed facts are that the appellant are providing tips/information related to shares of various companies traded in NSE and BSE and collecting fees for sending the aforesaid tips/information from the clients. Revenue authorities and Ld. Commissioner are of the view that such activity undertaken by the appellant would fall under category of advisory and other auxiliary financial services including investment and portfolio research and advice, advice of mergers and acquisitions and advice on corporate restructuring and strategy as enshrined in the definition of banking and financial service. From the reading of the definition of banking and financial services and the meaning of financial institution, it appears that the services rendered by the appellant would not fall under the category of service provided by a banking or a financial institution or any other body corporate or commercial concern. In the case in hand, it is found that it is undisputed as to the appellant is only giving tips/information related to shares. Appellant are not giving any advice to its customers related to purchase or sell of share. It is on record that appellant are doing research and giving information to their customers on the basis of their research. They have not been guiding or suggesting any course of action to his customers. The appellant neither adviced nor guided the customers as to what quantity of share they can buy, when can they buy, when can they sell the share etc. Appellant have neither provided any broking or portfolio services nor has any details of the shares held by his customers - thus merely providing tips/information related to shares will not encompass the ingredients of Banking and Other Financial Services . In the absence of any advisory and other auxiliary services including investment and portfolio research and advice, advice on mergers and acquisitions and advice on corporate restructuring and strategy activity undertaken by the appellant, the services rendered by the appellant will not fall under the category of banking and financial services. Time Limitation - HELD THAT:- The transaction of the appellant alleged activities are recorded in their books of account. Therefore there is no suppression of fact with intent to evade payment of service tax on the part of the appellant. Therefore the demand of service tax is clearly hit by limitation of time and the service tax demand for the extended period is not sustainable on the ground of time bar also in terms of Section 73(1) of the Finance Act, 1994. Cum tax value for quantification of the demand - HELD THAT:- It is settled law beyond any doubt that while calculating any service tax demand, the gross value of the service invariably has to be considered as cum tax and the service tax amount has to be deducted to arrive at the assessable value for calculating demand of service tax. Hence, the learned adjudicating authority has seriously erred in not providing the benefit of cum tax value while calculating the service tax demand in the present case. The appellant s activity is not covered under the taxable service Banking and other financial Services - the impugned order set aside - appeal allowed.

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• 2024 (1) TMI 397
  Valuation of service tax - inclusion of reimbursed charges in the assessable value - section 67 of the Finance Act 1994 read with Rule 5(1) (2) of the Service Tax (Determination of Value) Rules, 2006 - pure agent services - HELD THAT:- It would be important for the appellant to clearly identify what the reimbursement being claimed are, since the nomenclature used by the Appellant is not decisive of its nature; to claim exclusion of expenses incurred as pure agent, they would have to satisfy the conditions mentioned in the Rule as listed above. Merely stating that the charges were paid by them to service providers who do not issue any bills/ receipts and accordingly they had correctly discharged their service tax burden, will not come to their help. The Hon ble Supreme Court in Khedut Sahakari Ginning and Pressing Society v. State of Gujarat [ 1971 (9) TMI 160 - SUPREME COURT] has placed emphasis on the need to closely scrutinize the documents between the parties. Tthe primary objection raised by the learned Commissioner in the impugned order is that the appellant did not furnish any supporting documents to prove their case and in the absence of any supporting document he was unable to accept the claim of the appellant that they fulfilled the stipulated conditions. Whereas it is the case of the appellant that all the documents and records were taken over by the Investigating Officers and hence, there was nothing left with the appellant to be furnished before the lower authority. In fact, the appellant has pleaded before us that he has all the documents to substantiate all his claims. In the circumstances, the issue requires to be re-determined afresh to prevent a failure of justice. It is deemed appropriate to set aside the impugned order - case remanded back to the file of the adjudicating authority for de novo adjudication - appeal disposed off by way of remand.

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• 2024 (1) TMI 396
  100% EOU - refund of unutilized Cenvat credit - input services - quality and efficiency of the output service - nexus with output services - penalty under Rule 15 of CCR read with Sec 78 of Finance Act - HELD THAT:- The Court below summarily rejected the contentions of the Appellant, observing that the absence of such input services would not adversely impact the quality and efficiency of the output service provided by the Appellant/Assessee. This amounts to interfering and/or dictating how the Assessee should do their business, which is not the spirit of law - it is further observed that Rule 2(l) of CCR provides input service means any service used by a provider of output service for providing an output service and includes services used in relation to renovation or repairs of the premises/factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, requirement of quality control, coaching and training, computer networking, etc. Thus, the definition provides for credit of both types of input services, the benefit of which is either received directly or indirectly. There is no such restriction in the definition under Rule 2(l) - the Order of the Court below is non-speaking and cryptic. Further, no penalty is exigible in the facts and circumstances as the issue is wholly interpretational. Accordingly, the penalty imposed and retained by the Court below under Rule 15 of CCR read with Sec 78 of the Act is set aside. Appeal allowed by remanding the matter back to the Original Adjudicating Authority to decide the SCN afresh, after considering the relevant Circular and the precedent decisions of various Courts as well as the explanations and clarifications provided by the Assessee.

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• 2024 (1) TMI 394
  Substantial question of law or not - difference of figures between balance sheet and ST-3 return - error in not remanding the matter to the authorities below for verification of the challans - time limitation - demand of excess paid service tax and penalty - non-consideration of relevant fact of production of documents - HELD THAT:- In this appeal filed by the assessee under Section 35G of the Central Excise Act, 1944 the Court is required as to whether any substantial question of law arises for consideration. The matter here is entirely factual and the adjudicating authority, the first appellate authority and the learned tribunal have appreciated and re-appreciated the factual position and rejected the contentions raised by the appellant. In fact, the learned tribunal has granted a partial relief to the appellant by reducing the penalty to 25%. Thus, there are no question of law much less substantial question of law is arising for consideration. The appeal fails and the same is dismissed.

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• Central Excise

• 2024 (1) TMI 395
  Levy of Excise Duty - Marketability/Excisability - lean gas/waste gas containing carbon monoxide is used in the generation of electricity, which is subject to Nil rate of duty and non-excisable and/or exempted goods under Central Excise Act - HELD THAT:- Taking into consideration a very vital unignorable aspect that initial subject matter of challenge in this writ petition was impugned show cause notice which culminated into impugned ex-parte final adjudication order which has been passed during pendency of this writ petition and though it appears from record that several opportunities were given to the petitioner to file objection/reply to the impugned show cause notice and for hearing before passing the impugned adjudication order, but since it is the case of the petitioner that it had immediately filed this writ petition against the impugned show cause after receipt of same, petitioner thought it proper to not to give any reply to the same or to participate in the impugned proceeding and all the legal and factual points in challenging the impugned show cause and adjudication order it has taken in this writ petition, supplementary affidavit, and in course of hearing of the same against the impugned show cause notice and order-in-original could not be taken before the adjudicating authority. The aforesaid impugned ex parte adjudication order dated 30th November, 2017 set aside and matter remanded back to the adjudicating authority concerned to pass fresh adjudication order by allowing the petitioner to file objection against the impugned adjudication order by treating the same as show cause notice and to take all the points raised in this writ petition and supplementary affidavit, the judgments and relevant circulars and notifications petitioner intends to rely in support of its case and after giving opportunity of hearing to the petitioner or its authorised representatives within two weeks from date and final adjudication order shall be passed within four months from the date of receipt of such objection/reply by observing principles of natural justice. Petition allowed by way of remand.

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• 2024 (1) TMI 393
  Recovery of CENVAT Credit alongwith interest and penalty - steel plates of various grades utilized by the appellant for repair, maintenance and replacement of acid tank , annealing furnace and buckets in the factory of manufacture - HELD THAT:- The availment of credit of duty paid on steel plates of various grades on the finding that the definition of capital goods in rule 2(a) of CENVAT Credit Rules, 2004 was not allowed for non-conformity with that and that their alternative plea for consideration of eligibility as inputs in terms of rule 2(k) of CENVAT Credit Rules, 2004 was not to be entertained by recourse to procedural lacuna indicated in the order. On the other hand, the first appellate authority had rejected the appeal solely by relying upon the decision of the Larger Bench of the Tribunal on the ground that the said decision covered the issue in dispute. On a perusal of rule 2(k) of CENVAT Credit Rules, 2004, we find that the definition therein is intended for such goods as are entitled to availment of credit in terms of rule 3 of CENVAT Credit Rules, 2004; steel plates do not come within that definition and, consequently, are not capital goods but, nonetheless, the installation of capital goods within the factory of manufacture by or on behalf of assessee is permissible towards availment of CENVAT credit on the parts deployed therein to qualify as inputs under rule 2(k) of CENVAT Credit Rules, 2004. That claim of the appellant herein has been discarded by the original authority on procedural grounds and had not been considered by the first appellate authority at all. The first appellate authority has failed to subject the order of the original authority, on the discarding of claim for coverage as inputs for availment of CENVAT credit on the part of the appellant, to scrutiny. This is an aspect that requires consideration by the original authority. The impugned order set aside and matter remanded back to the original authority to determine the claim of the appellant for coverage of credit within the meaning of rule 2(k) of CENVAT Credit Rules, 2004.

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• 2024 (1) TMI 392
  Demand of differential duty - duty short-paid by claiming that the goods cleared into the domestic tariff area (DTA) between June 2007 and September 2015 were similar to the goods exported by them - concession under N/N. 1/2011-CE dated 1st March 2011 as amended by notification no. 16/2012-CE dated 17th March 2012 - time limitation - HELD THAT:- It is found that the eligibility for the exemption from additional duties of customs upto 2011, and concessional rate of duty thereafter under alternative notification, has been settled by the Hon ble Supreme Court in M/S. ESSILOR INDIA PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS, BANGALORE [ 2016 (5) TMI 303 - SUPREME COURT] which has held that the goods could not be treated as semi-finished and it could be appropriately described as to be finished spectacle lenses . Therefore, such lenses would clearly be treated as spectacle lenses and were [xx] entitled to exemption notification which view was taken by even the department itself for earlier years. The issue stands settle insofar as eligibility for concessional rate of duty in terms of notification no. 6/2006-CE dated 1st March 2006 is concerned. The question of eligibility in the environment in which that exemption was replaced by the one relied upon by appellant thereafter, viz., notification no. 1/2011-CE dated 1st March 2011 vis-a-vis the amendment effected to the tariff stricture would need to be examined in the light of the decision of the Hon ble Supreme Court. Time Limitation - HELD THAT:- It is found that the notice, while having travelled beyond the normal period of limitation for a portion of the disputed period is quite possibly within the limitation period for the remaining. The details, however, needs to be ascertained and, in view of the finding in relation to the latter two of the four show cause notices, it may be appropriate for being decided afresh. The impugned order set aside and matter remanded for a fresh decision - The appeal is, accordingly, disposed off by partially modifying the impugned order and remanding the remaining part of the impugned order.

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• 2024 (1) TMI 391
  Recovery of duties of central excise leviable on manufacture of active pharmaceutical ingredient (AQI - also known as bulk drugs) - irregular availment of CENVAT Credit - input services - HELD THAT:- The impugned order has fastened recovery of credit availed during the disputed period by relying upon statements on the premise of being tenable merely for not having been retracted. It is seen that reliance had been placed on the statement of Shri Anand Dhokia and which, by its contents, was held as having absorbed the statement of Sachin Madan with it. With the former having been made a noticee and response thereto being denial of the charges, that could well be deemed to be retraction that neutralizes the presumption that the adjudicating authority relied upon for conclusion as facts. Disallowance of credit cannot rest upon statements but must stand the test of definition of input service in rule 2(l) of CENVAT Credit Rules, 2004 on facts which is sorely lacking in the impugned order. The observation of the adjudicating authority that it is upto the assessee to establish eligibility is, in our view, not a correct appreciation of CENVAT Credit Rules, 2004 inasmuch as recovery, initiated under rule 14 of CENVAT Credit Rules, 2004, must engage the assessee with evidence to justify such recovery which is only then open to disputation. Matter remanded back to the original authority to decide the charges afresh - appeal allowed by way of remand.

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• 2024 (1) TMI 390
  Levy of penalty - Discharge of duty liability in respect of clearance effected by availing credit in respect of National Calamity Contingent Duty, Additional Duty of Excise on Pan Masala, Education Cess and Higher Education Cess - contention of the Revenue in the instant appeal is that having confirmed the demand, learned Commissioner ought to have imposed penalty under Section 11AC of Central Excise Act or Rule 25/27 of the Central Excise Rules, 2002. Penalty under Section 11AC - HELD THAT:- The terms of the Section are very clear that penalty under the Section can only be imposed when duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reasons of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty. Thus, to attract penalty under Section 11AC, the five ingredients should be present and intent to evade payment of duty should be established; Tribunal and Courts have been consistent in holding this opinion. The demand is issued under Section 11A of Central Excise Act, 1944, the proviso is not invoked. No elements of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty, have been alleged leave alone discussion and establishment of the same - The ingredients for invocation of extended period being not even alleged, the Commissioner was right in his finding. To that extent, there are no infirmity in not imposing penalty under Section 11A of the Central Excise Act, 1944. Non-imposition of penalty under Rule 25 of Central Excise Act, 2002 - HELD THAT:- It is not the case of the Department also that sub-clauses (a) (b) (c) are applicable; the same are not even alleged in the show-cause notice; there is not even a whisper in the show-cause notice about manufacture, production, storage, removal of goods in contravention of the provisions of the Act or the Rules made thereunder. Therefore, imposition of penalty for contraventions listed in sub-clauses (a) (b) (c) of Rule 25(1) of Central Excise Rules, 2002 is beyond the scope of the show-cause notice. the conditions for imposing penalty under Rule 25 are also not satisfied and that learned Commissioner was correct in concluding that no case for imposition of penalty has been made by the Revenue. Coming to the penalty under Rule 27 of Central Excise Rules, 2002, we find that though the learned Commissioner mentions that he refrains from imposing penalty under that Section, the same is not invoked in the show-cause notice. When the same is not invoked in the show-cause notice, there is no way that the Adjudicating Authority could have imposed penalty under Rule 27 of Central Excise Rules, 2002 - the conditions for imposing penalty under Rule 25 are also not satisfied and that learned Commissioner was correct in concluding that no case for imposition of penalty has been made by the Revenue. Penalty under Rule 27 of Central Excise Rules, 2002 - HELD THAT:- Though the learned Commissioner mentions that he refrains from imposing penalty under that Section, the same is not invoked in the show-cause notice. When the same is not invoked in the show-cause notice, there is no way that the Adjudicating Authority could have imposed penalty under Rule 27 of Central Excise Rules, 2002. There is no infirmity in the impugned order and the order does not require any intervention - there are no merit in the appeal - appeal dismissed.

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• 2024 (1) TMI 389
  CENVAT Credit - taxable as well as exempt goods - availing cenvat credit of central excise duty on inputs going into the manufacture of medicaments which were chargeable to central excise duty and did not avail cenvat credit of central excise duty paid on inputs which were going into the manufacture of medicaments which were exempted - HELD THAT:- The appellant had debited entire cenvat credit availed on account of service tax paid on input services, even if a part of the input services were utilized in the manufacture of dutiable final products. It is also noted that central excise duty paid on inputs which were going into the manufacture of exempted final products was not availed by the appellant. This Tribunal in the case of COMMISSIONER OF C. EX. S.T., UDAIPUR VERSUS SECURE METERS LTD. [ 2016 (6) TMI 1260 - CESTAT NEW DELHI] has held that even if subsequent to clearance, the availed cenvat credit is debited, then it is as if the cenvat credit was never availed. The said view of this Tribunal was affirmed by Hon ble Rajasthan High Court in UNION OF INDIA VERSUS SECURE METERS LTD. [ 2017 (2) TMI 1350 - RAJASTHAN HIGH COURT] . Thus, the appellant had not availed cenvat credit at all for the reason that it had debited the entire availed cenvat credit. Therefore, the question of recovery of 5% or 10% of the value of the exempted goods does not arise. The impugned order set aside - As a result, the demand confirmed and penalty imposed on the appellant and penalty imposed on the other appellant are set aside - appeal allowed.

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• 2024 (1) TMI 388
  Levy of penalty - Nil rate of duty decided under Settlement of disputes under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT:- When demand is settled under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 imposition of penalty under Rule 26 on the Co-Appellant would fail for the reason that the said Proviso Section 124(i)(b) of the Finance Act, 1994 that deals with Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and subsequent clarificatory circular issued vide Circular No. 1071/4/2019- CX.8 dated 27.08.2019 as well as consistent decision of this Tribunal, penalty would have been settled at Nil on the Appellant, had he filed an application under the scheme and availed of its opportunity. In respect of the merit of the appeal also we have perused the order passed by the Commissioner (Appeals) and noticed that allegation of violation of provisions of Central Excise Act is made in general without specific reference to the actual conscious knowledge of the Appellant that the goods so purchased by them were liable for confiscation so as to attract penalty under Rule 26 of the Central Excise Rules, 2002. Thus, on merit as well as under the dispute resolution scheme penalty would not survive against the present Appellant M/s Protochem Industries Pvt. Ltd. and accordingly the same is set aside - appeal allowed.

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• 2024 (1) TMI 387
  Scope of exemption notification - Absolute exemption or conditional exemption - Liability to pay 5%/6% of the value of the goods cleared under Notification No. 108/1995-CE under Rule 6(i) of Cenvat Credit Rules, 2004 - eligibility of N/N. 04/2006-CE dated 01.03.2006 - whole case of the department is that when Notification No. 04/2006-CE was available to the appellant, which is the absolute notification, the appellant was supposed to clear the goods under said notification. Whether the Notification No. 04/2006-CE is absolute or conditional? - whether the appellant was mandatorily required to avail such notification? HELD THAT:- The issue that whether the exemption notification No. 04/2006-CE (Sr. No. 54 and 59) are conditional or otherwise, It was held that the said notification is conditional one in the appellant s own case, for which the order was passed by this Tribunal vide final order No. 11450-11451/2023 dated 07.07.2023 [ 2023 (7) TMI 360 - CESTAT AHMEDABAD] . From the above judgment, it can be seen that this Tribunal has categorically held in para 4.2 of the order that Notification No. 04/2006-CE (Sr. No. 54 and 59) is conditional one, therefore, it is an option for assessee either to avail such exemption or not. In the present case, the goods were supplied under notification No. 108/1995-CE depending upon the nature of supplies and as per Rule 6(6)(iv) the provision of Sub Rule (1), (2), (3) and (4) shall not be applicable. Accordingly, the appellant is on one hand eligible for Cenvat credit and is not required to pay 5% in terms of Rule 6(3) of Cenvat Credit Rules, 2004 accordingly, the demand of 5% is not sustainable. Moreover, it is a settled legal position that when two beneficial provisions are available to the assessee, it is the choice of the assessee to avail the more beneficial provision, which is settled in SHARE MEDICAL CARE VERSUS UNION OF INDIA [ 2007 (2) TMI 2 - SUPREME COURT] and COLLECTOR OF CENTRAL EXCISE, BARODA VERSUS INDIAN PETRO CHEMICALS [ 1996 (12) TMI 66 - SC ORDER] . The demand of 5% is not sustainable, hence, the impugned order is set aside - Appeal allowed.

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• 2024 (1) TMI 386
  Principles of Res-Subjudice - CENVAT Credit - input services - service of Sales Commission - invocation of extended period of limitation - HELD THAT:- As regard the merit of the case, whether the assessee is eligible to avail the Cenvat credit on Sales Commission the issue is pending before the Hon ble jurisdictional High court of Gujarat in the case of commissioner Vs. Essar Steel Ltd [ 2016 (6) TMI 1305 - GUJARAT HIGH COURT] . Therefore, the merit of the case cannot be taken up. Whether the demand for extended period is sustainable or the same was rightly set aside by the learned commissioner? - HELD THAT:- The period involved in the present case is April-2010 to March-2014. During this period, there was no dispute about admissibility of the Cenvat Credit on Sales Commission to the assessee. The Revenue has heavily relied upon the decision of Hon ble Supreme Court in the case of M/S. MARUTI SUZUKI LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-III [ 2009 (8) TMI 14 - SUPREME COURT] which was on general principle of Cenvat Credit Rules. Whereas, the specific issue of availment of Cenvat Credit on Sales Commission has been decided in various judgments. The judgments dealing with the specific issue will prevail over the judgment in respect of general principle of the Cenvat Credit Rules - there are no mala fide on the part of the respondent. Therefore the Adjudicating Authority s order setting aside the demand of Cenvat credit on Sales Commission exclusively on the ground of time bar is not found any fault. Therefore, the extended period was not invokable for the demand beyond the normal period. There are no infirmity in the impugned order setting aside the demand on the ground of time bar, therefore impugned order to the extent it set aside the demand on time bar is upheld - Revenue s appeal is dismissed.

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• 2024 (1) TMI 385
  Appropriation of sanctioned refund - HELD THAT:- The issue has been set aside by the Delhi Bench of Tribunal in COMPUTER SCIENCES CORPORATION INDIA PVT LTD. VERSUS COMMISSIONER OF SERVICE TAX, NOIDA [ 2014 (4) TMI 252 - CESTAT NEW DELHI ] where it was held that As the assessed liability of the petitioner under the adjudication order has thus suffered a plenary eclipse, the petitioner would entitled to refund. In case of M/S. PEPSICO INDIA HOLDINGS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-II (VICE-VERSA) [ 2019 (5) TMI 1341 - CESTAT CHANDIGARH ], Chandigarh bench held the demand itself has been set aside by this Tribunal, therefore, the order of appropriation is not sustainable and the same is set aside. The appeal filed by the Revenue is dismissed.

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